ARTHUR B. ROBERTS ET AL.
ROBERT BAILEY ET AL.
Session May 6, 2015
Appeal by Permission from the Court of Appeals, Eastern Section Chancery Court for Loudon County No. 11419 Frank V. Williams III, Chancellor.
Matthew A. Grossman, Knoxville, Tennessee, for the appellants, Richard Neal Bailey and Lisa Bailey Dishner.
Thomas M. Hale and Adam G. Russell, Knoxville, Tennessee, for the appellees, Kimber Littleton, Mark Lee Littleton, and Dale Littleton.
Gary R. Wade, J., delivered the opinion of the Court, in which Sharon G. Lee, C.J., and Cornelia A. Clark, Jeffrey S. Bivins, and Holly Kirby, JJ., joined.
GARY R. WADE, JUSTICE
I. Facts and Procedural History
On October 2, 1918, N.B. Bailey and his wife, Pearl Bailey, acquired by general warranty deed approximately 100 acres of land, known as the James Farm, in Loudon County. The property was described in two tracts: "Tract I, " consisting of approximately fifty-eight acres, and "Tract II, " consisting of approximately forty-three acres. In 1948, N.B. Bailey died intestate, survived by his widow, Pearl Bailey, and their four children, Robert W. Bailey, Naomi Bailey Littleton, Thelma Bailey Patty, and Pauline Bailey Whitaker. On July 12, 1957, Pearl Bailey, believing that she had a 100% ownership interest in the James Farm, conveyed Tract I by general warranty deed to her son, Robert W. Bailey, and his wife, Fay Bailey; Pearl Bailey reserved for herself a life estate interest in the property. On November 3, 1959, Robert W. Bailey and Fay Bailey conveyed their respective interests in a 1/4-acre parcel of Tract I to Robert's sister, Thelma Bailey Patty, and her husband, Ned Patty; in order to terminate her life estate interest as to the 1/4-acre parcel, Pearl Bailey joined in this conveyance to the Pattys. Later, Pauline Bailey Whitaker, who was divorced, died intestate without any children. On February 4, 1977, Pearl Bailey conveyed all of her interest in Tract II, in equal shares, to her three living children: Robert W. Bailey, Naomi Bailey Littleton, and Thelma Bailey Patty. 
On September 3, 1983, Fay Bailey conveyed all of her interest in Tract I by quitclaim deed to her two children, Richard Neal Bailey and Lisa Bailey Dishner; her husband, Robert W. Bailey, did not join in this conveyance. Two months later, Pearl Bailey died, extinguishing her life estate interest. On September 22, 1990, Naomi Bailey Littleton conveyed all of her interest in the James Farm, which was specifically described as including only Tract II, by deed to Robert W. Bailey; this deed did not purport to convey any interest in Tract I. On October 8, 1990, Naomi Bailey Littleton died intestate survived by one of her two sons, Dale Littleton. She was also survived by her grandchildren, Mark Lee Littleton and Kimber Littleton, who are the children of Wayne Littleton, who had predeceased his mother, Naomi Bailey Littleton. On August 3, 1991, Robert W. Bailey executed a deed conveying all of his interest in the James Farm to his children, Richard Neal Bailey and Lisa Bailey Dishner; Robert W. Bailey reserved for himself a life estate interest in the property. On November 1, 2001, Thelma Bailey Patty, who had survived her husband Ned Patty, died testate. Thelma's will named her daughter, Charlotte Ann Patty Dutton, as her sole real-estate beneficiary.
On March 27, 2009, Arthur B. Roberts and his wife, Tia Roberts, filed suit against Robert W. Bailey and his two children, Richard Neal Bailey and Lisa Bailey Dishner (hereinafter collectively referred to as the "Baileys") in an effort to establish a boundary line between the James Farm and the Robertses' property. The Robertses eventually settled all of their claims against the Baileys and are not a party to this appeal. As a result of the boundary litigation, however, the Baileys became aware for the first time that Pearl Bailey, as a tenant in common with her husband, N.B. Bailey, did not acquire a 100% ownership interest in the James Farm upon the death of her husband in 1948. Because N.B. and Pearl had acquired the James Farm in 1918, the conveyance took place in the "gap years, " 1914 to 1919, during which time a deed to a husband and wife created a tenancy in common with no right of survivorship, rather than a tenancy by the entirety, which vests a surviving spouse with full ownership in the property upon the death of the other spouse. See generally Moore v. Cole, 289 S.W.2d 695 (Tenn. 1956); Gill v. McKinney, 205 S.W. 416 (Tenn. 1918). The Baileys filed a third-party complaint against the descendants of Naomi Bailey Littleton and Thelma Bailey Patty to quiet title as to Tract I, naming as third-party defendants Dale Littleton, Mark Lee Littleton, Kimber Littleton, and Charlotte Ann Patty Dutton (hereinafter collectively referred to as the "Littletons"). Robert W. Bailey died on February 1, 2013, thereby terminating his life estate interest. There is no dispute as to the ownership of Tract II.
In their third-party complaint, the Baileys initially claimed full ownership of Tract I on the theory that the actual intention of the 1918 deed was to create a tenancy by the entirety between N.B. Bailey and Pearl Bailey, and that, in consequence, Robert W. Bailey and Fay Bailey had received all rights, title, and interest in the property by virtue of the 1957 conveyance of Tract I from Pearl Bailey. In recognition of the confusion created by the gap years, the Baileys asked the trial court to reform the 1918 deed so as to confirm the right of survivorship in Pearl Bailey, meaning that upon N.B.'s death, Pearl would have retained a 100% ownership interest.
In response to the third-party complaint by the Baileys, the Littletons claimed their respective ownership interests in Tract I on the basis that the 1918 deed had created a tenancy in common between N.B. Bailey and Pearl Bailey, meaning that upon N.B.'s death without a will, Pearl would have retained only a fifty-percent interest, while N.B.'s fifty-percent interest would have passed first to his children in equal shares and eventually to his grandchildren and great-grandchildren. The Littletons also asserted interests in the 1/4-acre parcel that had been carved out of Tract I in 1959 by the conveyance from Robert W. Bailey and Fay Bailey to Thelma Bailey Patty and Ned Patty.
Based upon the facts set forth in their third-party complaint, the Baileys filed a motion for partial summary judgment. On March 30, 2010, the trial court denied relief, holding that because of the law in effect during the gap years, the James Farm had been owned by N.B. Bailey and Pearl Bailey as tenants in common. After the entry of the order, the Baileys appealed. In Roberts v. Bailey, 338 S.W.3d 540, 543 (Tenn. Ct. App. 2010), the Court of Appeals affirmed, holding that because "the 1918 deed . . . to N.B. Bailey and his wife, Pearl Bailey, was given during the
'hiatus in the estate of tenancy by the entireties[, ]' . . . N.B. Bailey and Pearl Bailey did not take title as tenants by the entireties." This Court denied the Baileys permission to appeal on March 9, 2011. On remand to the trial court,  the Baileys amended their third-party complaint, asserting absolute fee simple title by prescription on the basis that they had utilized Tract I exclusively and without interruption from the Littletons since 1957. The Baileys also asserted the doctrine of estoppel by deed based upon representations made in the 1990 quitclaim deed by which Naomi Bailey Littleton conveyed her interest in the James Farm to Robert W. Bailey.
The trial court again granted summary judgment to the Littletons, holding that the Baileys had failed to establish title by prescription because the Littletons had no knowledge of their interests in the property prior to the initiation of the boundary-line dispute, which qualified as a "disability" that prevented the Littletons from pursuing their rights. The court also held that the doctrine of estoppel by deed was "not applicable to the undisputed facts of this case." As a result, the trial court vested title to Tract I and the 1/4-acre parcel carved out by the 1959 deed as follows:
Tract I (fifty-eight acres less the ...