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Waxler v. Waxler
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1997 ME 190
Docket: 	Cum-96-434
Argued:	May 5, 1997
Decided:	August 12, 1997

Panel:		WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, DANA, and
		LIPEZ, JJ.


ALFRED WAXLER v. LAWRENCE WAXLER, et al.
RUDMAN, J.

	[¶1]  Alfred Waxler appeals from the judgment entered in the Superior
Court (Cumberland County, Saufley, J.) in favor of his son, Lawrence Waxler,{1}
following a nonjury trial.  Alfred contends that (1) Teri Berenson, Alfred's
daughter, was not entitled to transfer property on Iffley Street to Lawrence,
(2) Alfred did not breach his fiduciary duty to Lawrence with malice, (3)
Lawrence was not entitled to an award of damages for damage to his credit,
(4) the trial court failed to consider mitigating circumstances in awarding
damages to Lawrence, and (5) Alfred was entitled to damages for rent on the
Farnham Street land.  Lawrence cross-appeals contending that the trial
court awarded him insufficient damages.  For the reasons stated below, we
vacate the judgment. 
	[¶2]  This appeal arises from Alfred's attempt to establish the rights
and responsibilities of the parties in two parcels of land in Portland, one on
Iffley Street and one on Farnham Street.  Both parcels abut Alfred's property
on Warren Avenue on which Alfred and his corporation, Your Home, Inc.,
have been attempting for twenty-five years to develop a mobile home park. 
	[¶3]	In April 1988, Your Home, Inc. was dissolved and all of its assets
assigned to Alfred.  In March 1994 Alfred brought this action against Teri
and Lawrence seeking, inter alia, a declaration that he holds title to the
Iffley Street property.  In response, Teri and Lawrence answered and
counterclaimed alleging, inter alia, that Alfred breached his duty to
Lawrence to make timely payments on the mortgage debt, property taxes
and other expenses pertaining to the property in Lawrence's name on
Farnham Street; and seeking an accounting of his joint venture with Alfred
to manage the Farnham Street property.  The court found Lawrence to be
the owner of the Iffley Street property subject to an easement to Alfred; that
Alfred breached his fiduciary duty to Lawrence regarding the management of
the Farnham Street property; and awarded Lawrence compensatory and
punitive damages of $25,925.00 plus interests and costs.{2}     
Iffley Street Property
	[¶4]  The record reveals the following facts pertinent to the Iffley
Street property.  In December 1984 Alfred arranged for his daughter, Teri
Berenson, to purchase the Iffley Street property with funds he provided. 
The deed was recorded in the Cumberland County Registry of Deeds and
that same day, at Alfred's request, Teri conveyed an easement over the Iffley
Street lot to Your Home, Inc.  Shortly thereafter, again at Alfred's request,
Teri executed and delivered a deed to the Iffley Street lot to Your Home,
Inc.  Lawrence notarized both deeds.  Alfred did not record either deed
until September 1995. 
	[¶5]  In July 1993 Teri executed and delivered a deed to the Iffley
Street property to her brother, Lawrence, in an effort to help Lawrence
solve a problem he was having with Alfred concerning the Farnham Street
property.  Alfred argues that at the time of the December 1984 conveyance
to Teri, Teri had at most a contingent remainder interest subject to a
resulting trust.  Lawrence contends that no resulting trust was created when
Alfred paid for the purchase of the Iffley Street property because Alfred gave
the property to Teri originally as a contingent gift, and ultimately as a final
irrevocable gift.    
	[¶6]  We need not determine the exact nature of the December 1984
transaction because, regardless of the capacity in which Teri held title to
the property in December 1984, she conveyed the entire property to Your
Home, Inc. in January 1985.  "The conveyance of title to property requires a
manual transfer of the deed and an intent to pass title between a grantor and
grantee."  Poling v. Northup, 652 A.2d 1114, 1115 (Me. 1995).  On January
3, 1985, Teri executed a warranty deed to Your Home, Inc.  Lawrence
notarized the deed and Teri delivered the deed to Alfred.  Alfred has
retained possession of the deed since that date.  
	[¶7]  There is no dispute that the deed from Teri to Your Home, Inc.
was delivered to Alfred.  There is a presumption that a deed found in the
possession of the grantee was delivered by the grantor who executed and
acknowledged it.  Sachelie v. Connellan, 141 Me. 267, 273, 43 A.2d 300
(1945).  This presumption is even stronger in cases involving a voluntary
conveyance as opposed to an ordinary bargain and sale.  Shaw v. McKenzie,
131 Me. 248, 249, 100 A. 911 (1932).  "Only clear and convincing evidence
can overcome the presumption."  Id. at 249.  
	[¶8]  The sole issue here is whether the parties intended that title to
the Iffley Street property pass from Teri to Your Home, Inc. when the deed
was delivered.  We answer this question in the affirmative.  When the
physical possession of a deed is transferred from one party to another, there
is a presumption that "both parties intended to effect an immediate transfer
of the title, in accordance with the terms of the deed."  Coombs v.
Fessenden, 116 Me. 304, 306, 101 A. 465 (1917).   
	[¶9]  The record reveals that Teri failed to overcome the presumption
that she and Alfred both intended to effect an immediate transfer of title
when she delivered the deed to Your Home, Inc. in January 1985.  Teri
testified that she executed and delivered the deed to the Iffley Street lot to
Your Home, Inc. solely because Alfred asked her to do so.  The record is
devoid of evidence indicating that Teri did not intend to transfer the
property to Your Home, Inc. at that time.  See Coombs, 116 Me. at 307 (well
settled rule of law is that after conveyance of real estate a declaration of the
grantor in disparagement of his grant, made in the absence of the grantee, is
never admissible in evidence against the grantee).  The trial court did not
make any findings as to Teri's intent at the time of the January 1985
conveyance and we find no evidence to rebut the presumption arising from
Alfred's possession that both parties intended to effectuate an immediate
transfer of the Iffley Street property. 
	[¶10]  Contrary to Lawrence's contention, the presumption in favor of
delivery is not rebutted by Alfred's failure to record his deed until 1995. 
The fact that the deed was unrecorded for many years does not change the
effect of Teri's delivery of the deed to Alfred. 
	[¶11]  Teri's 1993 deed to Lawrence has no effect because, by
notarizing the deed from Teri to Your Home, Inc., Lawrence had actual
knowledge that she had already conveyed the same property to Your Home,
Inc.  See Bartlett v. Pullen, 586 A.2d 1263, 1265 (Me. 1991) (unrecorded
conveyance ineffectual against anyone other than grantor and persons having
actual knowledge).  Furthermore, Lawrence's assertion that he believed in
1993 that Teri owned the Iffley Street property is unavailing.  Before
purchasing real estate, a purchaser

should clear up the doubts which apparently hang upon the title,
by making due inquiry and investigation.  If a party has
knowledge of such facts as would lead a fair and prudent
[person], using ordinary caution, to make further inquires, and
he avoids the inquiry, he is chargeable with notice of the facts
which by ordinary diligence he would have ascertained. 

Gagner v. Kittery Water Dist., 385 A.2d 206, 207 (Me. 1978) (quoting Knapp
v. Bailey, 79 Me. 195, 204, 9 A. 122, 124 (1887)).  Lawrence testified that 
he remembered notarizing the 1985 deed to Your Home, Inc., but that he
understood in 1993 that Teri owned the Iffley Street property.  According
to Lawrence, he believed that Teri owned the property because she told him
about "conversations that she had with [Alfred] on more than one occasion"
and because Teri believed that it was her property.  Lawrence admitted that
he did not discuss the pending conveyance with Alfred.  Lawrence made no
effort to determine whether Alfred in fact owned any interest in the Iffley
Street property.  Lawrence's failure to take appropriate steps to clarify the
doubts concerning title to the Iffley Street property can only been seen as a
failure of due inquiry.  Lawrence was not a bona fide purchaser of the Iffley
Street lot because he had knowledge that the property had already been
conveyed to Your Home, Inc.  Accordingly, the trial court erred when it
determined that Lawrence held title to the Iffley Street property in fee.
Punitive Damages
	[¶12]  In February 1987, Alfred's corporation, Your Home, Inc., owned
a parcel of property on Farnham Street upon which a mobile home was
located.  When the owners of the mobile home suffered financial difficulties,
the holder of the security interest in the mobile home foreclosed and Alfred
persuaded Lawrence to borrow money and purchase the mobile home. 
Alfred agreed to collect all rental income from the tenants of the mobile
home and pay all expenses related to the property such as the mortgage,
taxes, utilities, repairs and maintenance.
	[¶13]  In the years following Lawrence's purchase of the mobile home,
Alfred collected rental income from the tenants, but during some months he
did not pay the mortgage.  Additionally, it was Alfred's regular business
practice not to pay his real estate taxes when due.  Alfred admitted that he
was typically delinquent on all his property taxes and routinely paid his real
estate taxes shortly before the foreclosure of the tax liens on the properties. 
	[¶14]  In June 1993 Lawrence and his wife attempted to purchase a
new home in Portland.  Lawrence's credit report revealed outstanding tax
liens on the Farnham Street mobile home.  His bank, therefore, refused to
extend credit to him.  On July 1, Alfred wrote a letter to Lawrence's bank
and acknowledged responsibility for the defaults on Lawrence's credit
record.  The bank was not satisfied with Alfred's letter and continued to
decline to finance the purchase of Lawrence's new home.  Lawrence asked
Alfred to assume the mobile home debt in his own name or to satisfy the
debt in some way.  Alfred told Lawrence that it would not be possible for him
to get financing.  Alfred and Lawrence later spoke with an officer at the
Town & Country Federal Credit Union and asked to have Alfred substituted
for Lawrence on the loan.  The credit union asked for a mortgage on the
Farnham Street lot and Alfred refused because he "felt that it was
impractical at that point" since "there were other solutions at that time." 
Specifically, Alfred stated that it was "impractical" for him to go through the
mortgage application process because he knew that Lawrence's mother
could financially assist Lawrence.  Lawrence was unable to obtain financing
for his new home until his mother, Alfred's former wife, borrowed in her
own name and satisfied Lawrence's outstanding debt.  
	[¶15]  Alfred contends that the evidence is insufficient to support the
court's finding that Alfred acted with malice toward Lawrence.  A punitive
damage award must be based on tortious conduct and may be awarded only if
the tortfeasor acted with malice.  Haworth v. Feigon, 623 A.2d 150, 159
(Me. 1993).  "Punitive damages are available if the plaintiff can establish by
clear and convincing evidence that the defendant's conduct was motivated
by actual ill will or was so outrageous that malice is implied."  Fine Line, Inc.
v. Blake, 677 A.2d 1061, 1065 (Me. 1996).  For factual findings that must be
proven under the clear and convincing standard, the issue is "whether the
factfinder could reasonably have been persuaded that the required factual
finding was proved to be highly probable."  Fitzgerald v. Gamester, 658 A.2d
1065, 1070 (Me. 1995) (citation omitted).  Our review of a trial court's
award of punitive damages is limited to deciding whether the findings of fact
are clearly erroneous.  Auburn Harpswell Ass'n v. Day, 438 A.2d 234, 237
(Me. 1981).
	[¶16]  The trial court explicitly found that, prior to Lawrence's
attempt to obtain credit, Alfred did not act with malice when he breached
his fiduciary duty to pay the taxes and other expenses.  The court further
found that Alfred had a "continuing fiduciary duty" to Lawrence, and that he
breached that duty with malice when he "declined to take reasonable steps
to address [Lawrence's credit] problems."  We conclude that the trial court's
finding of malice was clearly erroneous.  The record reveals no evidence that
Alfred acted with actual ill will.  Furthermore, we cannot say that Alfred's
failure to make a greater effort to solve Lawrence's credit problems was so
outrageous that malice can be implied.  The record is devoid of evidence
that Alfred had the ability to cure the problems he had created.  We
conclude, therefore, that the trial court erred when it assessed punitive
damages against Alfred because the record does not support the court's
finding of malice.   
Compensatory Damages
	[¶17]  Both parties contend that the trial court erred in its assessment
of compensatory damages.  We agree and address the parties contentions
seriatim. 
	[¶18]  We review the computation of damages with great deference. 
Bradford v. Dumond, 675 A.2d 957, 962 (Me. 1996).  Generally we will not
substitute our judgment for that of the factfinder and will not disturb a
damage award unless the award is a product of bias, prejudice, improper
influence, or was reached under a mistake of law or in disregard of the facts. 
Id.  A damage award must be supported by some evidence in the record, but
the damages need not be proved to a mathematical certainty.  Id.  In
awarding damages, the factfinder is entitled to act on probable and
inferential as well as direct and positive proof.  Id. 
	[¶19]  The trial court awarded $5,000 to Lawrence for the "loss of
good credit and delay in obtaining financing for the new home."  Lawrence
testified that:  (1) Alfred destroyed his credit because he could not get a
mortgage when he and his wife tried to buy a new home, (2) the credit
union told him it would take about two years for his credit to recover and (3)
he had a brief credit problem when he purchased a new car.  Nevertheless,
Lawrence was unable at trial to attach any monetary value to the damage that
he has suffered to his credit.  Further, Lawrence testified that he was only
seeking damages for the detrimental effect on his credit with regard to his
attempt to purchase a new home in July 1993.  When asked what damages
he incurred he responded:  "Well, I think that my family went through hell
for the months of July and August 1993."  When asked if there were any
other damages, Lawrence answered, "No."  Lawrence did testify, however,
that while his family was in a temporary living space, he incurred a storage
bill for $875; the court made a separate award for those damages.
	[¶20]  Alfred argues that the trial court erred in awarding $5,000 in
damages to Lawrence for damage to his credit because the record contains
no evidence of economic damage.  We agree.  The record contains no
evidence of any monetary value of the damage to Lawrence's credit that
could support an independent award of damages.  See Bradford, 675 A.2d at
962 (damage award must be supported by some evidence of value of
property damaged or expenses incurred).  Thus, we conclude that the court
erred by awarding $5,000 for damages to Lawrence's credit.  
	[¶21]  Lawrence contends that the trial court did not award sufficient
damages to reflect the actual costs and damages that he suffered as a result
of Alfred's conduct.  We agree.  The trial court found that Alfred and
Lawrence were engaged in a joint venture to hold and ma