Slone v. Calhoun

386 S.W.3d 745 (Ky. Ct. App. 2012)

 

RULE:

Ky. R. Civ. P. 76.03(8) limits parties on appeal to only argue issues set out in their prehearing statements, except that when good cause is shown upon timely motion, the court may then permit additional issues to be submitted. Ky. R. Civ. P. 76.03(8) has been applied in the past to bar an appellant's arguments for reversal that were not raised in a prehearing statement or timely motion. However, Ky. R. Civ. P. 61.02 permits an appellate court to correct palpable errors which affect the substantial rights of a party, notwithstanding that the issue may have been insufficiently raised or preserved for review, if the court determines that manifest injustice has resulted from the error.

FACTS:

In August 2005, Slone entered into a land contract with Michael Calhoun for the purchase of a lot and a mobile home. Under the agreement, Slone was to pay $313 per month, as well as the taxes and insurance for the property. Slone claims that in January 2009, without her knowledge or approval, Calhoun executed a land contract with Jerry Sumner for the same lot and mobile home. In May 2009, Slone informed Calhoun that she was unable to continue making the monthly payment and moved from the property. In November 2009, Slone filed a lawsuit against Calhoun and Sumner seeking damages for breach of contract. She alleged that Calhoun and Sumner had forced her to move out. However, sometime between May and November, Calhoun and Sumner discovered that their land contract erroneously described its subject matter as the property that was contained in Slone's contract. Upon finding the error, they executed a corrected contract for other real property adjacent to Slone's lot.

ISSUE:

Is forfeiture of a buyer’s interest in land for failure to pay installments valid?

ANSWER:

No.

CONCLUSION:

The appellate court held it was error to forfeit the buyer's interest in the land because she had (1) an equitable ownership interest in it to the extent of her monthly payments, and (2) redemption rights in it under Ky. Rev. Stat. Ann. § 426.530, so the only judicial remedy was a judicial sale of the land. The contract's forfeiture provision was invalid as a matter of law because it provided for forfeiture of the buyer's payments upon the buyer's default and was not enforceable in Kentucky.

Click here to view the full text case and earn your Daily Research Points.