Appeals court rules estate of woman killed by hurricane still owes debt on house

Steve Korris Dec. 3, 2008, 10:30am

Justice Hollis Horton

Hurricane Rita killed Bertha Costello, but according to the Ninth District appeals court in Beaumont, it didn't transform her from homeowner to renter.

The Ninth District on Nov. 26 rejected a bid by her daughters to escape their obligations to Lillian Meineke, previous owner of Costello's home.

Daughters Rhonda Wilson and Rochelle Day claimed their mother didn't buy the home from Meineke but only rented it.

They argued that no one recorded a deed, but that didn't disturb the appeals judges.

"A deed does not have to be recorded to convey title," Justice Hollis Horton wrote.

Horton, Chief Judge Steve McKeithen and Justice Charles Kreger affirmed Liberty County District Judge Don Taylor, who held that Meineke delivered a deed to Costello.

While they affirmed Taylor on law, they flunked him on mathematics. They reduced his award to Meineke from $26,785 to $22,624.95.

Costello first lived in Meinike's home as a renter. Each month she gave a check to Meineke's daughter, Jean Wunsch, who lived 200 yards away.

In 2001, Meineke sold her house to Costello for $40,000. Costello paid $1,000 down.

They executed a deed of trust with Meineke as beneficiary and a $39,000 promissory note with Meineke as lender. Both documents referred to a title deed of the same date.

The deed of trust was filed at the courthouse, but the title deed was not filed.

For almost four years, Costello continued monthly payments to Wunsch.

Then on Sept. 24, 2005, Hurricane Rita dropped a tree on the home, killing Costello.

Meineke sought to collect the remaining debt in probate court. Wilson, as representative of Costello's estate, denied the validity of the debt.

An insurer paid $40,000 into the court registry for Taylor to divide.

At a bench trial, Wunsch testified that she was present when her mother and Costello executed the deed of trust, the promissory note and the title deed.

She said she believed that the attorney who prepared them would record them.

She produced receipts showing payments "for rent" before the signing of the documents and "payment on house" afterward.

Wilson and Day testified too, but to Taylor their statements offered further evidence that their mother bought the house.

He ruled for Meineke and split the $40,000 by awarding $26,785 to her, $4,371.50 to her attorney, and $8,843.50 to Costello's estate.

On appeal, the daughters argued that Costello didn't deliver a deed. They claimed that her payments reflected rent and the promissory note lacked consideration.

In the alternative, they argued that Taylor miscalculated the debt.

The Ninth District, agreeing with Taylor, rejected the rent theory.

Horton wrote that delivery doesn't necessarily require physical transfer "or even that the deed be placed beyond the grantor's physical possession."

Horton found fault, however, with Taylor's calculation of interest. He sliced Meineke's share of the $40,000 to $22,624.95, and raised the estate's share to $13,003.55.

Logan Pickett represented Meineke. Bruce Stratton represented Costello's estate.

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