Justices remand Bloomington property partition dispute

A woman’s case to partition and sell a Bloomington property will continue after the Indiana Supreme Court reversed a lower court’s finding that the husband and wife with whom the woman purchased the property were not tenants by the entireties of the property.

In 2002, a warranty deed on a Bloomington property near the Indiana University campus was granted to Cheryl Underwood, Kenneth Kinney and his wife, Judith Fulford.  The granting clause of the deed held that the three were granted the warranty “all as Tenants-in-Common.”

Twelve years later in 2014, a damages judgment was entered against Kinney and Underwood and in favor of Sheree Demming, Underwood’s former employer, becoming a lien on the property. Kinney died the same year, and in 2015 Underwood filed the present action asking the court to partition and sell the property and distribute its proceeds.

Thomas Bunger, personal representative of Kinney’s estate, moved to dismiss Underwood’s petition under Trial Rule 12(B)(6), arguing that the estate no longer had an interest in the property. Further, Demming moved for summary judgment, similarly arguing that the estate had no interest in the property and that she had a valid, enforceable lien against Underwood’s interest.

The Monroe Circuit Court granted both motions, finding that the deed clearly and unambiguously created “an estate by the entireties as to the interest of” Kinney and Fulford. The Indiana Court of Appeals affirmed those decisions on appeal nearly one year ago. 

The Indiana Supreme Court, however, reversed the trial court’s decision in a unanimous Monday opinion. Writing for the court, Justice Geoffrey Slaughter first noted that the granting clause in the warranty deed defeats the presumption that a conveyance of real property to spouses creates an estate by their entireties “by expressing an intention to create a tenancy in common among all three grantees – Underwood, Husband, and Wife.”

In 2002, the same year the warranty deed was granted, the Indiana Legislature reaffirmed the common-law presumption that spouses are tenants by their entireties, but reduced the showing required to overcome that presumption in Indiana Code Section 32-17-3-1(d) by holding that, “If: a contract expressly creates a tenancy in common; or it appears from the tenor of a contract that the contract was intended to create a tenancy in common; the contract shall be construed to create a tenancy in common.”

The deed’s granting clause included the phrase “all as Tenants-in-Common,” Slaughter said, and the use of the word “all” signifies that the grantor “did not view Husband and Wife as one entity whose unitary estate in the Property was by the entireties.”

“Were that his intention, the Deed would have described two sets of grantees – Underwood and Husband/Wife – and said they were acquiring their interests ‘both as Tenants-in-Common,’” the justice wrote. “We hold that the phrase actually used – ‘all as Tenants-in-Common’ – refers to more than two such tenants and denotes that ‘all’ three grantees take hold as tenants in common.”

Thus, the trial court’s contrary judgment in Cheryl L. Underwood v. Thomas Bunger, in his capacity as the personal representative of the Estate of Kenneth K. Kinney; Judith M. Fulford; and Sheree Demming, 53S01-1703-MI-126, was reversed and the case was remanded for further proceedings.