MAXEY v. SAPP Et Al.

FIRST DIVISION
DOYLE, C. J.,
ANDREWS and RAY, JJ.

NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules

February 1, 2017

In the Court of Appeals of Georgia
A16A1504. MAXEY v. SAPP et al.

ANDREWS, Judge.

Lori S. Maxey sued her siblings, sister-in-law, and niece, seeking to impose a

constructive trust on real property formerly belonging to her mother. Following the

close of evidence at trial, the trial court directed a verdict for the defendants. Maxey

appeals, asserting that questions of fact remain for resolution by the jury. We agree

and reverse.1

A trial court properly grants a motion for directed verdict where “there is no

conflict in the evidence as to any material issue and the evidence introduced, with all

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The Supreme Court’s “equity jurisdiction is not invoked if the issue raised on
appeal involves only whether the evidence is sufficient to authorize the imposition
of an implied trust.” Robertson v. Robertson, 333 Ga. App. 864, 867, n. 4 (778 SE2d
6) (2015). Maxey, therefore, properly file her appeal in this Court. See id.
reasonable deductions therefrom, . . . demand[s] a particular verdict.” Troutman v.

Troutman, 297 Ga. App. 62 (676 SE2d 787) (2009). We review a directed verdict

ruling under the “any evidence” standard, construing the evidence most favorably to

the non-moving party. See id.

So viewed, the evidence shows that Dewitt Hugh Sapp, Sr. (“Hugh Sr.”) and

Gloria June Sapp had five children: Maxey, Dewitt Hugh Jr. (“Buddy”), Larry, Ann,

and Karen. In 1975, Hugh Sr. and Gloria executed a joint will providing that if one

of them died, the survivor would inherit the other’s property. The will further stated:

“Upon the death of the survivor of either of us the remainder of our estate, if any, real

and personal, is devised and bequeathed to our children, share and share alike, among

our five children.”

During his lifetime, Hugh Sr. amassed an estate that included ownership of all

stock in Sapp’s Saw Shop, Inc., a business he began in 1961, and five tracts of real

property. Hugh Sr. died in 2001, leaving the business and land to his wife. Gloria

subsequently conveyed her interest in the corporation to Larry, although she remained

a corporate officer and its registered agent.

In June 2007, a Sapp’s Saw Shop employee sued Larry and the corporation,

alleging that Larry had invaded her privacy and caused her emotional distress by

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installing surveillance equipment in an employee bathroom. Gloria, who was

seriously ill with cancer and undergoing treatment at the time, was upset by the

lawsuit, expressing concern that her property might be lost through the litigation.

Shortly after the legal proceedings began, Gloria transferred the five tracts of land

that she had inherited from Hugh Sr. to Buddy and his wife, Sharon Sapp.

Approximately six months later, on December 12, 2007, Gloria died.

Maxey learned about the property transfer while meeting with her siblings a

few days after Gloria’s funeral. Buddy told her that Gloria had transferred the land

to protect it from the litigation and that once “the lawsuit was over . . . [the property]

would be divided up equally” amongst the siblings, as their mother had intended. The

siblings then agreed on the property division, identifying parcels for each individual.

Several years later – after the lawsuit had been dismissed – Buddy and Sharon

deeded to Karen and Ann the parcels of property that they had selected. Karen then

deeded her property to her daughter, Kara. No transfer, however, was made to Maxey,

and the 17 acres earmarked for her remained in Buddy’s name. According to Buddy,

Maxey was causing “trouble,” threatening to hire a lawyer if he did not transfer the

property, and he refused to “convey under threats.”

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 Maxey subsequently filed suit, seeking a declaration that Buddy and Sharon

held the five tracts in a constructive trust for the benefit of Gloria’s children. She also

requested that the deeds conveying property to Ann, Karen, and Kara be cancelled so

that the land could be distributed properly. The case proceeded to trial, and the

defendants moved for a directed verdict after the close of evidence, asserting that

Maxey had not proven her constructive trust theory. The trial court agreed, directed

a verdict for the defense, and later denied Maxey’s motion for new trial. This appeal

followed.

“A constructive trust is a trust implied whenever the circumstances are such

that the person holding legal title to property, either from fraud or otherwise, cannot

enjoy the beneficial interest in the property without violating some established

principle of equity.” OCGA § 53-12-132 (a). In other words, equity does not allow

“one with a legal interest in a piece of property a windfall recovery when the

beneficial interest should flow to another.” Ansley v. Raczka-Long, 293 Ga. 138, 141

(3) (744 SE2d 55) (2013) (punctuation omitted). Parol evidence regarding the nature

of the transaction, the circumstances, and the parties’ conduct may be presented to

support a constructive trust finding. See Edwards v. Edwards, 267 Ga. 780, 781 (2)

(482 SE2d 701) (1997). Generally, however, a constructive trust cannot be imposed

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on real property “based solely on a broken verbal promise to hold or transfer the land

for the benefit of another.” Parris v. Leifels, 280 Ga. 135, 136 (625 SE2d 390)

(2006). A broken verbal promise may form the basis for a constructive trust on land

only “if it was fraudulently made with the intention of being broken and for the

purpose of thereby obtaining title.” Id. (punctuation omitted).

In directing a defense verdict, the trial court concluded that Maxey had not

established the fraud necessary to impose a constructive trust based on a broken

verbal promise. Maxey’s allegations, however, did not rest solely on evidence that

Buddy and Sharon broke a promise to hold the property for the siblings’ benefit. She

also offered evidence that Gloria had always intended for her children to share in the

property and transferred it to Buddy simply to protect it from a legal judgment. And

testimony supported the conclusion that the siblings agreed on an appropriate

distribution plan after Gloria’s death, a plan that Buddy followed with respect to

Karen and Ann, but refused to apply to Maxey because he thought she was causing

trouble for the family.

These circumstances parallel those confronted by our Supreme Court in

Edwards v. Edwards, supra. The grandmother in Edwards intended to bequeath real

property to her three grandsons, but conveyed the land to her daughter to qualify for

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government assistance benefits. Following the grandmother’s death, the daughter

deeded parcels of the property to two of the grandsons. The land intended for the third

grandson, however, included the house in which the daughter and her husband lived,

and the parties had agreed that the third grandson would receive this property only

after their death. The daughter eventually died, leaving the property to her husband,

who remarried and put the land up for sale, spurring litigation.

The Supreme Court found that material issues of fact remained as to whether

the daughter and husband had agreed to hold the property in trust for the third

grandson, noting that “[t]o allow the [husband] to sell the property while holding it

for [the grandson’s] ultimate benefit would result in the [husband’s] unjust

enrichment.” Edwards, supra at 782. Although two justices dissented, asserting that

the grandson had not shown fraud, id. at 783-784, the majority found the evidence

sufficient to sustain a constructive trust theory. See id at 782. The evidence presented

in this case – particularly the circumstances of the transfer, Gloria’s desire that the

property be divided between the siblings, and the distributions to Ann and Karen –

similarly supports the theory. See id.

Moreover, even if Maxey’s constructive trust allegations were based solely on

a broken verbal promise, issues of fact remain regarding fraud and Buddy’s intent to

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perform. According to Buddy, his mother authorized him to cut Maxey out of the

distribution. He testified that he had the right “not to give [Maxey] any land if she

caused trouble,” and he told relatives that she would get nothing if she took him to

court. Maxey, however, offered contrary evidence regarding Gloria’s intentions,

including that she wanted her children to share equally in the property.

This conflicting evidence raises factual questions as to whether Buddy agreed

to hold the land in trust for his siblings, but planned to distribute it according to his

own wishes, rather than his mother’s instructions. The trial court, therefore, erred in

directing a verdict for the defendants. See Hood v. Smoak, 271 Ga. 86, 88 (516 SE2d

301) (1999) (trial court erred in granting directed verdict on constructive trust claim

where evidence authorized jury to conclude that defendant fraudulently induced

plaintiff to put property in her name with no intention of honoring their agreement);

see also ASC Constr. Equip. USA v. City Commercial Real Estate, 303 Ga. App. 309,

315 (3) (693 SE2d 559) (2010) (“Because fraud is inherently subtle, [it] may be

proved by slight circumstances, and whether a misrepresentation is fraudulent and

intended to deceive is generally a jury question.”) (punctuation omitted).

Judgment reversed. Doyle, C. J., and Ray, J., concur.

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