Court of Appeals Affirms Use of
Reformation Doctrine in Land Transfer
In Becky Cutter v. Jurus, the Indiana Court of Appeals applied the doctrine of reformation to alter the written terms of two deeds to include the grant of a life estate granted in other contracts involving the same land.
Bernard and Linda Jurus entered into an Agreement to Sell and subsequent Addendum with Joseph Bailey. The addendum granted the Juruses a life estate on the property. Previously, the Juruses rented a smaller house on the property to Cutter and, with the addendum, Cutter remained on the property as a tenant of Bailey. After Bernard’s death, Linda and Bailey executed a Contract for the Sale of Real Estate providing for Bailey’s purchase of the property subject to a life estate in favor of Linda. Thereafter, Linda engaged a title company to prepare a Warranty Deed effectuating the transfer. The Warranty Deed, however, omitted all reference to Linda’s life estate.
On Bailey’s death, Cutter became his estate representative and primary beneficiary. After completing her duties, Cutter executed a Personal Representative’s Deed which conveyed the property to herself and, unsurprisingly, failed to include any reference to the life estate. When Linda Jurus discovered the absence of the life estate in the Warranty and Representative’s Deeds, she filed suit against Cutter to reform the two deeds accordingly and prevailed on summary judgment.
The Court of Appeals agreed with Jurus and the trial court’s reformation. Noting reformation is an “extreme” remedy because all written instruments are presumed to embody the parties’ intentions, the Court nevertheless held reformation of the deeds was proper given the clear intentions present in the Addendum and Contract for the Sale of Real Estate. Although separate documents, they were executed at the same time and made clear there was a mistake of fact that allowed for reformation. In its opinion, the Court of Appeals rejected Cutter’s arguments invoking the doctrine of merger and the parol evidence rule. Specifically, the Court cited established Indiana law precluding application of merger in an action to reform a deed. Stack v. Com. Towel & Uniform Serv., 91 N.E.2d 790, 795 (Ind. Ct. App. 1950). Furthermore parol evidence remains admissible in an equity-based reformation action in order to ensuring the parties’ intentions are observed.
 2021 Ind. App. LEXIS 310 (Ind. Ct. App. 2021).