## Facts

- In March 1995, Rodney Van Middlesworth and Sue Van Middlesworth (plaintiffs) signed a written agreement to buy approximately 500 acres of farmland from Harold Piper.
- After Piper later died, the plaintiffs sued Century Bank & Trust Company (as successor trustee), Timothy Piper, and Leon Piper and Phillip Piper (as next friends) (defendants), seeking specific performance of the land-sale agreement and damages for breach of contract.
- At trial, testimony about earlier grain transactions between Rodney and Piper in 1992 and 1993 (sales of corn and beans) showed Piper’s declining ability to understand the nature of the transactions.
- Rodney testified that during conversations with Piper in April and May 1995, Rodney believed Piper did not understand what was being said.
- Defendants presented medical testimony from a clinical psychologist, a neurologist, and a physician specializing in geriatric neurology that Piper was suffering from dementia as of March 1995.
- The trial court found Piper was mentally incompetent when he signed the March 1995 agreement.
- The trial court also found that reasonable people in the plaintiffs’ position would have been put on notice that further inquiry into Piper’s mental competence was needed before executing the agreement.
- The trial court refused to enforce the contract, and the plaintiffs appealed.

## Issues

1. Whether the trial court clearly erred in finding that Piper lacked mental capacity to enter the March 1995 land-sale agreement.
2. Whether the trial court clearly erred in finding that the plaintiffs had reason to know of Piper’s possible incapacity and therefore were required to make further inquiry before contracting.
3. Whether, given incompetence and the plaintiffs’ notice, the plaintiffs were entitled to specific performance or contract damages.

## Decision

- The Michigan Court of Appeals (unpublished, per curiam) affirmed.
- The court held the record supported the trial court’s finding that Piper was mentally incompetent at the time of contracting, based on lay testimony and medical testimony regarding dementia.
- The court also upheld the finding that a reasonable buyer in the plaintiffs’ position would have been on notice of potential incompetence and should have investigated further.
- Because Piper lacked capacity and the plaintiffs were on notice, the plaintiffs were not entitled to specific performance or breach-of-contract damages.

## Legal Principles

- A party must have sufficient mental capacity at the time of contracting to understand, in a reasonable manner, the nature and effect of the transaction.
- A contract made by a mentally incompetent person is generally voidable, and enforcement may be denied where the other contracting party knew or should have known of the incompetence.
- Specific performance is an equitable remedy; a court may refuse it where enforcement would be unfair, including when the party seeking enforcement had reason to suspect incapacity and failed to inquire.
- Findings on mental capacity and notice are fact-driven determinations reviewed on appeal for clear error.
- Courts may consider both lay observations and medical testimony (including testimony from mental-health and neurology-related physicians) when deciding contractual capacity.

## Conclusion

The Michigan Court of Appeals affirmed the denial of specific performance and contract damages because the trial court did not clearly err in finding that Harold Piper suffered from dementia and was mentally incompetent when he signed the March 1995 land-sale agreement, and that reasonable purchasers in the Van Middlesworths’ position would have been on notice of questionable competence and needed to investigate before proceeding.


Van Middlesworth v. Century Bank & Trust Co., 2000 WL 33421451 (2000)