Harry and Tom have played poker together for years. Neither ever won or lost much money, but poker gave them a chance to get away, to have a few drinks, and to talk about which one of them is most supportive of the President.
One day, an old house down the road became available. One of the poker buddies was a wizened old real estate broker, who learned of the house and suggested on poker night that Tom and Harry buy it, fix it up, and split the profit. They agreed, and each put a few thousand dollars in the pot to pay expenses. Together they promised to pay the owner his $100,000 selling price within one year, and Tom and Harry took title in both their names.
The project didn’t exactly work as planned. Neither one of them was qualified to do some of the plumbing and electrical work that was necessary, and while they thought they were carpenters, a lot needed to be done that they were not prepared for. They found that it was difficult to find qualified help because everyone who really knew what he was doing was already working. Nevertheless, they struggled on and made their best efforts to rehabilitate the house.
About six weeks into the rehab and after all day replacing the floor, on his way home, Harry tried to pull out into a line of traffic, misjudged the speed of an oncoming truck, and caused an accident which was fatal to Harry, and caused serious injury to others.
Since Harry was unavailable to help with the work and expenses, Tom couldn’t finish the house, didn’t pay the mortgage, and contractors who had done work on the house didn’t get paid. Liens and lawsuits were filed to recover the monies due to contractors; the whole enterprise became a disaster. The truck driver and his family filed suit against both Tom and Harry alleging that both men were partners, and that the partnership was liable and demanded damages. Harry’s survivors filed suit against Tom on the same theory.
The owner from whom Tom and Harry bought the house sued to get the house back, since it was never paid for, and sought the $100,00 cost plus interest and legal fees, all from Tom.
You are Tom’s broker, and the one knowledgeable person that Tom trusts. He tells you all the above story, confidentially. He knows very well that he and Harry never agreed to be partners and never signed a partnership agreement. While he is responsible for half of all expenses, and even half the unpaid price of the house, Tom understands in his very soul that he is not responsible for Harry’s half of the debt and all the creditors are owed only one-half by him, and one-half by Harry or his estate. He knows the house will sell for far more money because of all the work that’s been done, and he asks you to sell the house so its debts can be paid.
Tom knows, and shares with you, that as soon as all these lawyers find out the true facts, these suits will go away and he can get back to worrying about other matters.
You are Tom’s confidant.
What can you tell Tom? If given up-front the chance to advise both Tom and Harry, what would you have told them that would change the predicament that Tom finds himself in? Are there lessons here?
The above facts are Episode One of the Tom and Harry story. Assume you are the one to whom Tom opens himself up and spills his certainty about how these lawyers are all wrong.
Please cut this episode out, or remember the facts and your answers. Episode Two and beyond will take up the case for you and for Tom. You will need to remember the facts.
This article is intended to raise questions that will be addressed in future articles.
This article was published in the Coastal Homes publication of the Northwest Florida Daily News on Oct. 5, 2019: http://www.coastalhomesfla.com/Olive/ODN/NWFLDNCoastHomes/