Ellen Marie Vandergrift

Appeal concerning whether a mortgagee that had been denied inclusion of a $4 million collateral mortgage in a prior judicial accounting could later assert entitlement to payment from the same power-of-sale proceeds.

The majority held that res judicata had been adequately pleaded and raised at first instance and that cause of action estoppel barred the appellant from advancing a new theory in support of the same entitlement claim.

The Court held that the prior and subsequent proceedings concerned the same cause of action, namely the validity, value, and priority of encumbrances in the judicial accounting, and that all reasonably available arguments should have been advanced in the earlier proceeding.

The appeal was dismissed with party-and-party costs.

Three judges dissented, disagreeing on whether res judicata had been raised in time and whether estoppel should apply.

The Court allowed the appeal and held that proprietary estoppel can bind a promisor who lacked ownership at the time of the promise if the promisor later acquires a sufficient interest in the property.

The majority upheld findings that the appellant reasonably relied to his detriment on his sister’s promise regarding her eventual one-third interest in the family home.

The Court ordered relief tailored to the equity by permitting purchase of the sister’s one-third share at fair market value as of when the appellant would reasonably have expected to buy it.