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Estate of Phillips v. Nyhus, 874 P.2d 154 (1994)
A joint tenancy, that is, land ownership between two or more individuals with the right of survivorship, generally will be terminated by any act that serves one or more of the four unities of time, title, interest, and possession. But what if a joint tenant executes an earnest money agreement to sell the property and dies before transferring the property’s title at closing? Does the execution of the earnest money agreement itself terminate the joint tenancy? The Washington Supreme Court considered this question in Estate of Phillips versus Nyhus.
On November 8th, 1988, Theodore Phillips and Charles Nyhus signed an agreement under which Phillips would be a silent partner in certain real estate purchases. At the time, Phillips, Nyhus, and Nyhus’s wife had a history of doing business together.
Under the agreement, once the property was sold, the profit would be divided equally between Phillips and Nyhus. Ten days later, Phillips purchased one of the properties.
On July 24th, 1989, Phillips conveyed a one-half interest in the property to Nyhus and Nyhus’s wife by executing a quitclaim deed. The deed stated that the grantees intended to acquire the property as joint tenants with the right of survivorship.
Roughly one year later, Phillips and Nyhus signed an earnest money agreement to sell the property to Jeffrey and Carol Wiley. However, nine days later, Phillips died before closing.
Subsequently, Nyhus sued Phillips’s estate in state superior court for all the proceeds from the property sale based on the right of survivorship. In response, Phillips’s estate counterclaimed for partitioning of the proceeds and payment for one-half to the estate. Specifically, Phillips’s estate claimed that the joint tenancy was severed when the parties entered into the earnest money agreement to sell the property, and therefore, Phillips owned the property as a tenant in common.
Following discovery, Nyhus moved for summary judgment, which the trial court granted. Phillips’s estate appealed to the Washington Supreme Court.
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