Branson v. Branson ( 2019 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
VINCENT BRANSON and LEE §
MESTRE, § No. 280, 2018
§
Defendants Below, § Court Below—Court of
Appellants, § Chancery of the State of
§ Delaware
v. §
§ C.A. No. 11504-VCG
DAVID BRANSON, ALBERT §
BRANSON, and ROBERT §
BRANSON, §
§
Plaintiffs Below, Appellees. §
Submitted: November 16, 2018
Decided: January 14, 2019
Before VALIHURA, SEITZ, and TRAYNOR, Justices.
ORDER
After consideration of the parties’ briefs and the record on appeal, it appears
to the Court that:
(1) The pro se appellants, Vincent Branson and Lee Mestre, challenge a
decision of the Court of Chancery quieting title to certain real property that includes
a cottage, which is located in South Bethany Beach, Delaware. After careful review
of the parties’ briefs and the record on appeal, we affirm.
(2) The appellant Vincent Branson and the appellees (collectively, the
“Brothers” and, with their sister, who is not a party to this action, the “Siblings”) are
four of the five children of Dorothea Branson, who died in 2001. The appellant Lee
Mestre is Vincent’s 1 daughter. Ownership of the property at issue has been the
subject of several protracted litigations between the parties in Delaware and
Maryland. There have been allegations of bad faith and misconduct by both sides.
Ultimately, though, the present appeal arises from an in rem action brought by the
appellees to quiet title to the cottage. 2
Factual Background and the Prior Delaware Litigation
(3) The factual background of this matter has been set forth more fully in
decisions of the Court of Chancery in the prior litigations.3 In brief, Dorothea and
the Siblings’ father divorced in 1969. The Siblings’ father acquired the cottage in
1974 and later transferred ownership to the Siblings.4 A series of transfers among
the Siblings and Dorothea later occurred, but no deeds were executed or recorded;
as a result of those transfers, by 1990, Dorothea owned 75% of the cottage and Albert
owned 25%. 5
1
For clarity, we use first names to refer to many of the individuals discussed in this case. We
intend no disrespect.
2
The pleadings in this case asserted additional causes of action, but the order from which the
appellants appeal was issued in rem, determining the rightful owners of the property against any
other person, known or unknown, who might claim title to the property.
3
E.g., In re Estate of Branson, 2010 WL 3449235, at *1 (Del. Ch. Sept. 1, 2010).
4
Id.
5
Id.
2
(4) Dorothea died in 2001. Her will left all of her estate, in equal shares, to
the Siblings. 6 The Brothers’ sister disclaimed her interest in the estate, and the estate
was divided in equal shares among the four Brothers. Vincent took his share entirely
in cash or stock; Albert, David, and Robert each received at least part of his share in
the form of an ownership interest in the cottage. In September 2004, Vincent initiated
an action in the Court of Chancery alleging that (i) Robert, Albert, and David had
agreed to sell him the cottage and seeking specific performance of that agreement
or, alternatively, damages for breach of contract, and (ii) he did not receive his full
and final share of Dorothea’s estate in cash or stock and he therefore inherited an
interest in the cottage. After trial, the Court of Chancery found that there was no
enforceable oral agreement for the sale of the cottage and that Vincent had received
his full share of the estate in cash or stock and had no ownership interest in the
cottage.7 This Court affirmed on appeal.8
(5) The property records continued to suggest that Vincent had an
ownership interest in the cottage despite the Court of Chancery’s 2010 ruling that he
did not. Thus, in 2012, Albert, David, and Robert filed a separate action seeking to
quiet title. They did not proceed in rem, however. For that reason, the Court of
6
Id. at *2.
7
Id. at *1, 7, 10.
8
Branson v. Branson, 2011 WL 6141029 (Del. Dec. 9, 2011).
3
Chancery held that the title would be quieted only in personam with respect to
Vincent.9 On September 19, 2013, the Court of Chancery entered an order
incorporating the 2010 ruling that Vincent had no interest in the cottage, granting
summary judgment to quiet title against Vincent in personam, and ordering
cancellation of a lis pendens filed by Vincent in January 2012. This Court affirmed
on appeal. 10
The Maryland Litigation
(6) In February 2014, Mestre brought an action against her uncle, David,
and her father, Vincent, in the Circuit Court for Montgomery County, Maryland. In
that action, Mestre alleged that she was a third-party beneficiary of a 1992 oral
agreement between Dorothea and Albert, under which Albert would live in the
cottage rent-free for his life and would maintain the cottage as a family vacation
home, and the cottage would then pass to Dorothea’s grandchildren upon Albert’s
death. On August 28, 2014, when David had not yet been served, the Maryland Court
entered an order approving a partial settlement of the case, which dismissed one of
the two counts of the complaint, as to Vincent only. The August 2014 Maryland
Order incorporated a settlement agreement that created a Maryland trust, the 10
9
Branson v. Branson, 2013 WL 3789755, at *6 (Del. Ch. July 19, 2013).
10
Branson v. Branson, 2014 WL 1512792 (Del. Apr. 15, 2014). Other litigation filed by Vincent
in the Delaware courts relating to the cottage is noted elsewhere in this order.
4
North Fourth Street Trust (the “Trust”), which purportedly was funded with
Vincent’s interest in the cottage. The Order further provided that Vincent would
execute a quitclaim deed to Mestre as trustee of the Trust. Vincent executed a
quitclaim deed that was dated October 8, 2014 and recorded with the Sussex County
Recorder of Deeds on October 24, 2014. That deed from Vincent to Mestre clouded
title to the property yet again, despite the Court of Chancery’s rulings in 2010 and
2013 that Vincent had no interest in the property.
(7) On December 4, 2014, the Maryland Court entered an order dismissing
the action with prejudice with respect to Vincent (but not David). The December
2014 Maryland Order incorporated a settlement agreement that Mestre and Vincent
had signed on or about November 13, 2014. That settlement agreement recited
various “facts,” including that Mestre was a third-party beneficiary of a 1992
agreement between Dorothea and Albert under which “Albert in exchange for rent-
free use for life agreed to maintain the family vacation home for as long as he could
for the benefit of the family and that at his death the home would pass to the
grandchildren of Dorothea.” In January 2015, Mestre voluntarily dismissed the
action she had filed in 2014, in which David remained as the sole defendant; a few
days later, Mestre filed a new, similar action in the same Court, with David as the
sole defendant. Like the 2014 action, Mestre’s 2015 complaint alleged that Mestre
5
and Dorothea’s other grandchildren were third-party beneficiaries of the purported
1992 agreement between Dorothea and Albert.
(8) The Maryland Court held a three-day bench trial in June 2016. At the
close of Mestre’s case, David moved for judgment under Maryland Rule of Civil
Procedure 2-519. The Court granted that motion, applying Delaware law and holding
that Mestre had failed to prove the existence of the alleged 1992 agreement, and
entered judgment for David.
The Present Action
(9) Because of clouds that remained on the title, including the 2014
quitclaim deed from Vincent to Mestre, on September 15, 2015, Albert, David, and
Robert initiated this case in the Court of Chancery against Mestre and Vincent. The
complaint asserted, among other causes of action, a claim for a declaratory judgment
that there was no binding 1992 agreement between Dorothea and Albert and that
neither Mestre nor Vincent nor the Trust had any interest in the cottage. In May
2016, the plaintiffs filed an amended complaint asserting an in rem quiet title action.
(10) On or about September 7, 2017, following significant motion practice,
the Court of Chancery issued a rule to show cause why the appellees’ petition for
quiet title should not be granted and set a hearing on the petition for October 13,
2017. The rule to show cause was issued to Mestre and Vincent, who had objected
to the petition, and also provided for notice to any unknown defendants by
6
publication and a posting on the property. Following the hearing on October 13,
2017, the Court issued a briefing schedule for all objections. After the scheduled
briefing was complete, the Court scheduled a final hearing on the petition to quiet
title for March 7, 2018; that hearing was later continued at Mestre’s request because
of inclement weather.
(11) The Court of Chancery held the final hearing on the petition to quiet
title on April 4, 2018. The Court found the ownership of the property to be as
follows: Albert Branson, 46.40% tenant-in-common interest; Robert Branson,
31.87% tenant-in-common interest; and David Branson, 21.73% tenant-in-common
interest. The Court found that Vincent, Mestre, and the Trust “hold no interest in the
subject property as of the date of this Order.” The Court ordered that the Sussex
County Recorder of Deeds (i) record a copy of the Court’s order in the Office of the
Recorder of Deeds, “as conclusive evidence of said ownership,” and (ii) remove
from its records all documents recorded by “Vincent Branson, Lee Mestre, the 10
North Fourth Street Trust, and/or their representatives, creating an encumbrance on
the title.” Mestre and Vincent appeal from the Court’s order.
Issues Raised on Appeal
The Characterization of the 2014 Maryland Litigation as a “Sham”
(12) The appellants contend that the Court of Chancery erred “when it
maligned unjustly the personal character and professional reputation of” Mestre and
7
Vincent when it stated that the 2014 Maryland litigation was a “sham.” The
appellants’ arguments with respect to this claim of error largely overlap with their
other contentions, such as their arguments that the Court of Chancery failed to give
proper effect to the orders issued by the Maryland Court in 2014 and that the
appellees failed to establish title. To the extent that this argument is distinct from the
appellants’ other arguments, it focuses on the alleged harm to the appellants’
reputation from the Court of Chancery’s choice of words to describe the 2014
Maryland litigation. The appellants did not make that claim to the Court of
Chancery, nor have they explained how such reputational harm is a basis for
reversing the Court of Chancery’s conclusions concerning the ownership of the
property. We therefore decline to consider it further. 11
Subject Matter Jurisdiction and Personal Jurisdiction
(13) Next, the appellants contend that the Court of Chancery lacked subject
matter jurisdiction and personal jurisdiction over the trust and the trustee “to declare
the Trust the product of sham litigation and to effectively eviscerate the Trust by
directing that the Orders which created it and the deed which was transferred to it by
11
See DEL. SUPR. CT. R. 8 (“Only questions fairly presented to the trial court may be presented for
review; provided, however, that when the interests of justice so require, the Court may consider
and determine any question not so presented.”); Sandt v. Del. Solid Waste Auth., 640 A.2d 1030,
1034 (Del. 1994) (deciding an issue that was not fairly presented to the trial court because “the
issue is outcome-determinative and may have significant implications for future cases” and
decision would promote judicial economy).
8
Maryland Order be removed from the Delaware Land Records.” The appellants’
subject matter jurisdiction argument is without merit. The order subject to this
Court’s review does not decide the validity of the trust or its origins. The order
resolves only an in rem action concerning the ownership of real property located in
Sussex County, Delaware. It is clear that the Court of Chancery has subject matter
jurisdiction to decide an in rem action concerning property located in Delaware. 12 In
the order that is before this Court on appeal, the Court of Chancery exercised that
jurisdiction and found that the Trust did not have an ownership interest in the
property; it did not, as the appellants assert, rule regarding the validity or viability
of the trust.
(14) The appellants seem simultaneously to advance and withdraw their
personal jurisdiction argument. To the extent that they intend to press a personal
jurisdiction argument, the argument is unavailing. The Court of Chancery’s order
quieting title in the in rem action exercised jurisdiction over the property; it did not
impose on Mestre (individually or in her capacity as trustee of the Trust) or on
12
See Wilkes v. State, 265 A.2d 421, 424 (Del. 1970) (“[I]f an alleged cloud involves disputes
which can be resolved only by extrinsic evidence lying outside the record, or if the invalidity of a
recorded instrument must be established by matters outside the record, then equity has jurisdiction
to try the cause.”).
9
Vincent any personal liability or obligation. 13 Moreover, both Mestre and Vincent
“have consented to jurisdiction to contest the in rem claim.”14
The Effect of the Maryland Court Orders
(15) Next, the appellants contend that the Court of Chancery erroneously
failed to give full faith and credit to the orders of the Maryland court dated August
26, 2014, and December 3, 2014. It is not entirely clear from the appellants’ briefs
precisely in what way or to what effect the Court of Chancery purportedly failed to
give the Maryland orders full faith and credit. But the appellants appear to argue that
the Court of Chancery’s determination of the ownership of the cottage was
inconsistent with the following aspects of the 2014 Maryland orders: (i) the
statement in the November 2014 settlement agreement, which was incorporated into
the Maryland order dated December 3, 2014, that Mestre is a third-party beneficiary
of a 1992 agreement between Dorothea and Albert; (ii) the term in the August 2014
settlement agreement, which was incorporated into the Maryland order dated August
26, 2014, that provided that Vincent would execute a quitclaim deed to Mestre, as
13
See generally RESTATEMENT (SECOND) OF CONFLICT OF LAWS: Intro. Note (observing that a
“state must have personal jurisdiction over a defendant in order to impose upon him through its
courts a personal liability or obligation in favor of the plaintiff,” but that where “the purpose of an
action is not to impose a personal liability or obligation on anyone but to affect the interests of all
persons in a thing,” in rem jurisdiction allows a state to “render through its courts a valid judgment
where it has jurisdiction over the thing even though it may not have personal jurisdiction over the
persons whose interests are affected”).
14
Opening Brief at 18.
10
trustee, with respect to the cottage; (iii) the creation of the Trust and appointment of
Mestre as trustee; and (iv) the provision in the Maryland order dated August 26,
2014 reserving to the Maryland Court exclusive and continuing jurisdiction over all
disputes involving the Trust and the trustee.15
(16) We disagree. The Full Faith and Credit Clause requires “that a
judgment which was conclusive in the state where it was rendered must be received
as conclusive in every other state.”16 Thus, a state court must give a final judgment
rendered by the courts of another state the same effect as it would be given by the
courts of the state by which it was rendered.17 Whether or not the 2014 Maryland
orders are final judgments that are entitled to full faith and credit,18 the Court of
15
Opening Brief at 2.
16
Kent County Md. v. Shepherd, 713 A.2d 290 (Del. 1998) (discussing the ruling of the United
States Supreme Court in Mills v. Duryee, 11 U.S. (7 Cranch) 481, 3 L. Ed. 411 (1813)).
17
28 U.S.C. § 1738. See also Baker v. Gen. Motors Corp., 522 U.S. 222, 232-33 (1998) (discussing
the Full Faith and Credit Clause).
18
The 2014 Maryland orders did not fully resolve the action in which they were issued—they
merely dismissed certain claims against one of the defendants in the case. “Of course, it is
thoroughly understood that the full faith and credit clause of the Constitution applies to final
judgments which are unconditional and certain, or capable of being made so, and remaining in full
force and effect in the State where rendered.” Coane v. Girard Trust Co., 35 A.2d 449, 451 (Md.
1944). “It is clear that when there is a disposition of all claims against all parties, there is a final
judgment” and “an order or other form of decision that adjudicates less than the entire claim, or
adjudicates the rights and liabilities of fewer than all parties to the action, is not a final judgment.”
Miller & Smith at Quercus, LLC v. Casey PMN, LLC, 987 A.2d 1, 8 (Md. 2010). In this case, we
need not decide whether the 2014 Maryland orders were final judgments under Maryland law,
because, to the extent the Court of Chancery’s ruling conflicts with those orders, the Court gave
them the same deference as the Maryland Court gave them in 2016.
11
Chancery gave them appropriate effect. For example, the Maryland courts clearly
did not consider the statement in the November 2014 settlement agreement that
Mestre is a third-party beneficiary of a 1992 oral agreement with respect to the
property to be a conclusive determination of that issue, because the Maryland Court
in 2016 conducted a trial on that issue and ruled against Mestre. Thus, the Court of
Chancery gave the same effect to the 2014 Maryland orders as the Maryland Court
gave them.
(17) Nor did the Court of Chancery fail to give appropriate deference to the
other aspects of the 2014 Maryland orders. The Court’s ruling did not conflict with
the term of the August 2014 settlement agreement providing that Vincent would
execute a quitclaim deed—indeed, it appears that he in fact executed the quitclaim
deed. In any event, the 2014 Maryland orders did not determine that Vincent had
any interest in the property, and the Court of Chancery’s determination that he does
not have such an interest therefore does not conflict with those orders. Similarly, the
Court of Chancery did not make any ruling regarding the creation or validity of the
Trust, and the Court’s decision quieting title to the cottage did not affect the
Maryland Court’s continuing jurisdiction over the Trust.
12
(18) The appellants also assert that the Court of Chancery erroneously gave
preclusive effect to the 2016 decision of the Maryland Court.19 In that decision, the
Maryland Court, applying Delaware law, determined that Mestre, the plaintiff in that
case, had not demonstrated by clear and convincing evidence that there was a 1992
oral agreement between Dorothea and Albert regarding the subject property. The
Maryland Court therefore denied Mestre’s claim for declaratory judgment that there
was a valid and enforceable oral agreement—as well as all the other requests for
relief, which were predicated on the existence of an oral contract—and entered
judgment in favor of the defendant in that case, David.
(19) The Court of Chancery did not err by giving preclusive effect to the
2016 decision of the Maryland Court. Under Delaware choice-of-laws principles, a
Delaware court will “give the judgments of another state court the same preclusive
effect as would a court in that state.” 20 Under Maryland law, collateral estoppel bars
relitigation of an issue if: (i) the identical issue was decided in the prior case; (ii)
19
In its oral ruling, the Court of Chancery stated that the Maryland Court’s 2016 decision
concerning the oral agreement was “res judicata here.” In our view, the applicable preclusive
principle is collateral estoppel. “Collateral estoppel and res judicata are related principles of law.
Res judicata bars a suit involving the same parties based on the same cause of action. Collateral
estoppel prohibits a party from relitigating a factual issue that was adjudicated previously.
Accordingly, the collateral estoppel doctrine is referred to as the issue preclusion rule.” M.G.
Bancorporation, Inc. v. Le Beau, 737 A.2d 513, 520 (Del. 1999). This Court may affirm the Court
of Chancery’s ruling “on the basis of a different rationale than that which was articulated by the
trial court.” Unitrin, Inc. v. Am. Gen. Corp., 651 A.2d 1361, 1390 (Del. 1995).
20
Columbia Cas. Co. v. Playtex FP, Inc., 584 A.2d 1214, 1217 (Del. 1991).
13
there was a final judgment on the merits; (iii) the party against whom collateral
estoppel is asserted was a party or in privity with a party to the prior adjudication;
and (iv) the party against whom collateral estoppel is asserted had a fair opportunity
to be heard on the issue. 21
(20) In this case, Mestre asserted a claim to title based on the alleged 1992
oral contract. Mestre was the plaintiff in the Maryland action and had a fair
opportunity to be heard on that issue. After a trial, the Maryland Court decided that
Mestre had not proven the existence of an oral contract, and entered a final judgment
in favor of the defendant. The Court of Chancery did not err by concluding that
Mestre was precluded from relitigating the issue in this case.
Discovery Concerning Equitable Defenses
(21) The appellants argue that the Court of Chancery erred by deciding the
quiet title action without allowing the appellees to conduct discovery concerning
their assertions that the claim was barred by laches, the statute of limitations, or the
doctrine of unclean hands. The appellants contend that this action was time barred
because David “was aware of a claim to quiet title in 2004 when he discussed the
issue with David Baker, Esq., his estate counsel.” 22 Given the history of litigation
21
Caldor, Inc. v. Bowden, 625 A.2d 959, 970-71 (Md. 1993).
22
Opening Brief at 30. See also In re Estate of Branson, 2010 WL 3449235 (Del. Ch. Sept. 1,
2010) (“[David] insinuated [in his trial testimony] that the Estate might have brought a quiet title
action [in 2004] had Vincent not first filed this lawsuit.”).
14
among the parties, it is not apparent what additional facts possibly could have been
discovered that would have influenced the analysis of the timeliness of the claims.
The Court of Chancery has repeatedly found that Vincent has no cognizable interest
in the property. 23 Despite those rulings, Vincent executed a quitclaim deed from
Vincent to Mestre in October 2014, again clouding the title. Less than a year later,
the plaintiffs brought suit in the Court of Chancery on September 15, 2015, and they
filed an amended complaint that added the in rem cause of action on May 20, 2016.
The Court concludes that the action was not time barred.
(22) The appellants’ arguments concerning unclean hands are an attempt to
relitigate the parties’ prior disputes. The Court will not address them further.
The Decision Quieting Title
(23) The appellants argue that the Court of Chancery erred by granting quiet
title relief on summary judgment because there were disputed issues of material fact
concerning the ownership of the property. This Court reviews the Court of
23
Branson v. Branson, 2013 WL 3789755 (Del. Ch. July 19, 2013), aff’d, 2014 WL 1512792 (Del.
Apr. 15, 2014); In re Estate of Branson, 2010 WL 3449235 (Del. Ch. Sept. 1, 2010), aff’d sub
nom. Branson v. Branson, 2011 WL 6141029 (Del. Dec. 9, 2011). On two occasions, the Court of
Chancery has ordered Vincent to pay the appellees’ attorneys’ fees because of his vexatious
litigation conduct or frivolous arguments. In re Estate of Branson, 2014 WL 1600518 (Del. Ch.
Apr. 22, 2014), aff’d sub nom. Branson v. Branson, 2014 WL 7041784 (Del. Dec. 12, 2014);
Branson v. Branson, 2013 WL 4773723 (Del. Ch. Aug. 12, 2013). The Superior Court has also
done so once, and this Court has affirmed. See Branson v. Branson, 2013 WL 1164827 (Mar. 19,
2013) (affirming Superior Court award of attorneys’ fees because Vincent’s abuse of process
complaint was a frivolous attempt to relitigate issues already decided by the Court of Chancery).
15
Chancery’s granting of summary judgment de novo. We view the evidence, and all
reasonable inferences taken therefrom, in the light most favorable to the non-moving
party and determine whether an issue of material fact exists such that summary
judgment was improper. 24
(24) There are two objectors here—Vincent and Mestre. As discussed
above, the Court of Chancery decided in 2010 that Vincent had no interest in the
cottage and, in a separate case, quieted title in personam as to Vincent on July 19,
2013. This Court affirmed both decisions. The appellants do not claim that Vincent
acquired any interest after July 19, 2013. Thus, it is clear that Vincent has no
ownership interest in the property.
(25) Mestre asserts two factual grounds for her claim to title. First, she
asserts that she presented to the Court of Chancery a title abstract showing that she
has “good title as Trustee of The Ten North Fourth Street [Trust] pursuant to Final
Maryland Orders recorded in the Land Records of Sussex County.” Second, she
contends that under “the 2014 Maryland Order, Lee Mestre and all grandchildren
are third-party beneficiaries of a 1992 Agreement between their grandmother,
Dorothea (75%) and their Uncle Albert (25%) when both were the undisputed
24
State Farm Mut. Auto. Ins. Co. v. Davis, 80 A.3d 628, 632 (Del. 2013).
16
equitable owners of the Beach home.” 25 Neither the title abstract nor Mestre’s
reliance on the 1992 Agreement present an issue of material fact that warrants
reversal.
(26) The title abstract reveals that David J. Branson (21.73%), Albert E.
Branson Jr. (46.4%), and Robert Branson (31.87%) hold record title as tenants in
common, based on a quitclaim deed from David J. Branson, executor of the estate
of Dorothea C. Branson, dated July 25, 2013 and recorded August 6, 2013. That
aspect of the abstract is consistent with the rulings of the Court of Chancery in 2010
and 2013. The abstract further indicates that any interest that Mestre has in the
property arises from a quitclaim deed from Vincent to Mestre dated October 8, 2014
and recorded October 24, 2014. Because, as discussed above, Vincent had no
ownership interest in the property to convey in 2014, the title abstract does not raise
a material issue of fact such that summary judgment should not have been granted.
(27) Mestre’s reliance on the alleged 1992 Agreement is similarly
unavailing. As discussed above, the Maryland Court determined, after a trial, that
Mestre had failed to prove the existence of any 1992 Agreement, and Mestre is
precluded from relitigating the existence of that agreement in this case.
***
25
Opening Brief at 1.
17
(28) All the other arguments raised by the appellants were not fairly
presented to the Court of Chancery in the first instance, are not sufficiently
articulated in the briefing on appeal, are inconsistent with the record, constitute
attempts to relitigate the parties’ prior disputes, or are entirely speculative, and
therefore do not provide a basis for reversal.
NOW, THEREFORE, IT IS ORDERED that the judgment of the Court of
Chancery is AFFIRMED.
BY THE COURT:
/s/ Gary F. Traynor
Justice
18