Pewther v. C Corp

The presumption of joint liability between co-owners in property presupposes that the co-owners maintain a joint tenancy, not a tenancy in common; and obligations will not be assumed to continue when it would be implausible under the terms of the contract following a termination of the tenant’s interest.

Petitioner Pewther challenged the trial court’s dismissal of respondent Whitaker (co-defendant with his former employer, C Corp) from a breach of contract action following a limited motion for summary judgment. Defendants were buyers as tenants in common of the Pewther’s land. Pewther sued both defendants for damages under the contract for a later land sale that required profit sharing if the land was resold prior to 2008, which it was (in 2004). However, Whitaker had conveyed his interest to C Corp in 2001 for nominal consideration of $1. The Court of Appeals affirmed the trial court’s rejection of Pewther’s argument that Whitaker should be held liable for damages. The Court found that Whitaker’s obligations ended when his tenancy in common ended, and the contract did not contemplate his continued liability if he sold his interest to C Corp instead of a third party. Affirmed.