Date Submitted: April 30, 2013
Draft Report: July 31, 2013
This is my Final Report following the submission of post-trial memoranda on Plaintiff Wells Fargo Bank, N.A.'s ("Wells Fargo") request for declaratory relief against Defendant Charlotte Richardson ("Mrs. Richardson"), individually and in her capacity as Administratrix of the Estate of Oliver F. Richardson. After reviewing the record, including the testimony and evidence presented at trial on December 20, 2012, 1 am now recommending that an equitable lien in the amount of $156, 958.78 plus interest and costs be imposed on real property located at 1219 South Farmview Drive, Dover, Delaware 19904 (the "Property") that is currently owned by Mrs. Richardson.
On September 22, 2011, Wells Fargo filed a verified complaint regarding an alleged cloud on the title of the Property owned by Oliver F. Richardson that was created when a deed executed on May 17, 2002 ("2002 Deed") purported to transfer the Property from "Oliver F. Richard" to Oliver F. Richardson and Charlotte Richardson, husband and wife. According to the complaint, on June 22, 2005, with the knowledge and consent of Mrs. Richardson, Mr. Richardson refinanced an earlier loan by executing in his sole name an Adjustable Home Equity Conversion Mortgage and Second Mortgage with Wells Fargo. The complaint alleged that due to an incorrect grantor name and an incorrect legal description of the Property in the 2002 Deed, Wells Fargo was not able to discover the 2002 Deed during the title search performed in conjunction with the 2005 refinancing. In its complaint, Wells Fargo sought a declaration that the 2002 Deed is void and should be stricken from the land records or, in the alternative, a judgment imposed against the Estate of Oliver F. Richardson and Charlotte Richardson, jointly and severally, in the amount due on the Wells Fargo mortgages, plus accrued interest and costs, or that a constructive trust be placed on the ownership interest in the Property of Charlotte Richardson, in the amount due on the above mortgages, plus accrued interest and costs.
After receiving an extension of time to respond to the complaint, Mrs. Richardson filed a pro se answer on November 17, 2011, pleading "not guilty" to the complaint and alleging that she had done nothing wrong. On January 23, 2012, Mrs. Richardson supplemented her pro se answer, denying Wells Fargo's allegations and alleging that the 2002 deed was valid. Mrs. Richardson requested that the complaint be dismissed because Wells Fargo had failed to do an accurate title search.
A trial was held on December 20, 2012. Wells Fargo presented one witness, Crystal Carey, Esquire, the attorney who handled the refinancing settlement in 2005. Mrs. Richardson appeared pro se, and testified on her own behalf. I reserved decision at the conclusion of the trial and requested post-trial briefing from the parties.
A deed dated August 15, 1989 ("1989 Deed") and recorded in the land records of Kent County, Delaware in Book Z46, page 318, shows that the Property was purchased in 1989 by Oliver F. Richardson. At the time, he was married to the Defendant, but she was not working and had bad credit so the Property was purchased in her husband's sole name. In 2002, the couple refinanced the Property. They borrowed $112, 000.00 from Savings First Mortgage in order to lower the monthly mortgage payments and to pay off Mrs. Richardson's credit card bills. Both husband and wife signed a mortgage and note (collectively referred to as "2002 Mortgage") as borrowers on May 17, 2002. On that same date, the 2002 Deed was executed transferring the Property for the sum of zero dollars to "Oliver F. Richardson and Charlotte Richardson, Husband and Wife, tenants by the entireties." The grantor's name recited in the 2002 Deed, however, was Oliver F. Richard, not Oliver F. Richardson. The signatures of the grantor and grantees were notarized by a Delaware notary public, but the 2002 Deed had been prepared and was subsequently recorded by an out-of-state settlement company. The 2002 Deed contained seven errors in the legal description of the Property in addition to the misspelling of the grantor's name.
In 2005, Mr. Richardson applied for a reverse mortgage. Mr. Richardson was then 93 years old, but Mrs. Richardson was nearly forty years younger than her husband and not old enough to qualify for a reverse mortgage. According to Mrs. Richardson's testimony, her husband had seen something on the television about a reverse mortgage, and had made a telephone call. In response, an unknown representative from Wells Fargo came to their home. Two or three weeks later, two other men came to their home with paperwork and sat in the kitchen with Mr. Richardson as he signed documents.According to Mrs. Richardson, these men would not let her stay in the room while they went over the paperwork with Mr. Richardson. She felt she had a right to be participate in the conversation based on her 38-year marriage to Mr. Richardson, and told the two men that there was another deed with her name on it; however, the two men told her they did not need it, and asked her to leave the room. Mrs. Richardson thought that she was being excluded because of her age.
On June 22, 2005, Mr. Richardson drove himself to Crystal Carey's law office for the settlement. He signed two copies of an Adjustable Rate Note, a Home Equity Conversion Loan Mortgage, and a Home Equity Conversion Loan Second Mortgage (collectively referred to as the "2005 Mortgage"). He also signed an "Owners Affidavit, " in which he swore that he was "the only party having an interest in the premises and [was] in every respect competent to convey or encumber the title to the premises." . At the settlement, Mr. Richardson executed an "Owners Affidavit" in which he swore that he was the only person having an interest in the Property.According to Carey's trial testimony, it was her practice to go over this affidavit with each affiant, and she had no reason to believe that she had not done so with Mr. Richardson. After a three-day rescission period expired, the couple's 2002 Mortgage was satisfied,  and Mr. Richardson received a check for at least $20, 794.58, which he spent on their son's college education and car.
Mr. Richardson died on August 27, 2008, at the age of 96. Three months after her husband's death, Mrs. Richardson received a letter from Wells Fargo telling her to leave the Property within three to six months. She hired an attorney to handle the administration of her husband's estate and the "foreclosure." In addition, the attorney helped Mrs. Richardson to transfer title to the Property into her name so that the county tax bills could be sent to her. Mrs. Richardson testified that her attorney had a difficult time finding the 2002 Deed because the grantor's last name was "Richard." Mrs. Richardson recalled that in 2002, the notary had asked her husband to sign the deed as grantor using the name "Richard." According to Mrs. Richardson, her husband had refused the notary's request and had insisted on signing his real name, i.e., Richardson. Mrs. Richardson has not made any mortgage payments on the Property since 2005.
Wells Fargo argues that because "Oliver F. Richard" did not have an interest in the Property and did not exist, the grantor named in the 2002 Deed could not convey any title to the Property to Mr. and Mrs. Richardson and, hence, the 2002 Deed was void. In addition, Wells Fargo argues that the error in the grantor's name extended to the certificate of acknowledgement, rendering the 2002 Deed legally insufficient to transfer title due to the faulty acknowledgment under 25 Del. C. § 132. Wells Fargo argues ...