Unclean Hands Doctrine - Part II

In Flowers v. Dancy, the Court of Appeals affirmed the trial court's ruling and central finding that Andre is prohibited from attacking the forged deed to McIntyre due to the unclean hands doctrine. Andre knew the failure to settle the estates was creating a problem, yet he sought to profit from the property while title remained in question. Andre wrongfully benefited from the title problem.

Andre argued that despite his wrongful acts, his prior quiet title suit was unrelated to the forgery, and "would only impact the equitable relationship among the heirs to the estate," which do not include the three defendants, Wachovia, Dancy, or McIntyre. Andre correctly stated that the unclean hands is not a principle that punishes a bad actor generally, it "applies only if the inequitable conduct occurred in a transaction directly related to the matter before the court and affects the equitable relationship between the litigants." (California Satellite Systems, Inc. v. Nichols (1985) 170 Cal.App.3d 56, 70.) However, the Court of Appeals found that there was indeed a connection between his prior act and the matter before the court since he alleged in the quiet title suit that McIntyre obtained title by fraud and forgery. Furthermore, Andre failed to prosecute the action to conclusion thereby leaving McIntyre with apparent title to the house.

Accordingly, the Court of Appeals held that Dancy holds good title to the property, subject to the deed of trust securing Wachovia's loan. Neither of the estates, nor any of the heirs of decedents retains any interest in the property.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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