Cobren v. Anderson
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Cite as 2011 Ark. App. 477
ARKANSAS COURT OF APPEALS
DIVISION II
No. CA10-776
Opinion Delivered
June 29, 2011
TROY COBREN
APPELLANT
V.
LAURA ANDERSON
APPELLEE
APPEAL FROM THE YELL COUNTY
CIRCUIT COURT, NORTHERN
DISTRICT
[NO. CV-2007-123]
HONORABLE TERRY SULLIVAN,
JUDGE
AFFIRMED
DOUG MARTIN, Judge
Troy Cobren appeals from an order of the Yell County Circuit Court awarding
judgment to appellee Laura Anderson and imposing an equitable lien on Cobren’s interest in
real property that the parties held as tenants in common. Cobren argues that (1) the trial court
erred in finding that the parties had entered into a contract implied in fact while awarding
Anderson remedies based on a contract implied in law; (2) the trial court erred in imposing
an equitable lien on Cobren’s property; (3) the trial court gave Anderson a double, or triple,
recovery; and (4) Anderson did not overcome the presumption that some of the money she
gave Cobren was a gift. We affirm.
The parties became romantically involved around 1998 and planned to get married.
In 2002, Cobren won a million-dollar lottery in Illinois. In 2003, Cobren purchased a house,
Cite as 2011 Ark. App. 477
farm equipment, and acreage in Yell County, Arkansas. Soon thereafter, Cobren moved to
Yell County and began a landscaping business. In April 2004, Anderson joined Cobren in Yell
County. That same month, the Yell County Prosecuting Attorney charged Cobren with
manufacturing marijuana, possession of drug paraphernalia, and simultaneous possession of
drugs and firearms.
Due to his legal problems, Cobren needed money for attorney’s fees, fines, and court
costs. Because of a bad credit history, Cobren could not borrow the money on his own.
Anderson, on the other hand, had a good credit history. Neither party disputes that, in order
to pay Cobren’s expenses, the parties orally agreed that Cobren would give Anderson a onehalf interest in the house and acreage in exchange for Anderson taking out a loan secured by
a mortgage on her interest in the property. As per the parties’ agreement, on May 18, 2004,
Cobren gave Anderson a warranty deed to a one-half interest in the property. In July 2004,
Anderson took out a loan—secured by a mortgage on her interest in the real property—for
$70,009.58.
In December 2004, Anderson took out a second loan secured by a mortgage for
$100,218.50. With the money from the second loan, Anderson paid off the first loan and
borrowed additional funds. Of the second loan, $15,336.36 was disbursed to Anderson, and
three disbursements totaling $8,731 paid off three of Anderson’s credit cards.
In April 2005, Anderson took out a third loan secured by a mortgage on the real
property. With the money from the third loan, Anderson paid off the second loan and
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borrowed additional funds, raising her total debt to $160,800. Of the third loan, $29,931.60
was disbursed to Anderson, and disbursements totaling $28,156 paid off two of Anderson’s car
loans.
According to Anderson, she left the parties’ home in April 2006 after Cobren, through
threats, lies, and intimidation, made it impossible for her to stay. Anderson, however,
continued to pay the mortgage.
In December 2007, Anderson filed this action against Cobren, alleging that Cobren
had recently listed the property for sale and had threatened to forge her signature. Anderson
requested an injunction barring the sale until the court determined her interest in the
property.
Anderson subsequently amended her complaint to allege unjust enrichment and to
request that the court order that the property be sold and impose an equitable lien on
Cobren’s interest in the property. Anderson also asked for the fair rental value of the property
for the period of time Cobren prevented her from occupying it, for the return of her personal
property, and for possession of some firearms she purchased at Cobren’s civil forfeiture
proceeding.
In response, Cobren denied inducing Anderson to take out multiple mortgages to pay
his expenses. Cobren further alleged that most of the loan proceeds were applied to
Anderson’s personal debts.
The case went to trial on November 20, 2009. Anderson testified that, to prevent the
house from being foreclosed upon, Cobren asked her to borrow money to pay his legal fees
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and medical bills. Anderson stated that the parties agreed Cobren would put the interest to
half of the property in Anderson’s name, and Cobren would make the payments on the
mortgage on the property taken out by Anderson.
Anderson testified that the proceeds from the first loan sufficed for a short time but that
Cobren’s business did not generate enough money to pay the bills. Consequently, the parties
accumulated much debt—most of which, according to Anderson, was Cobren’s.
Anderson testified that she took out the second loan in December 2004 for $100,000
and deposited over $8,600 from the proceeds of the loan into Cobren’s account. Anderson
said that, by April 2005, Cobren needed more money, and Anderson thus took out a third
loan in the amount of $160,000. Anderson stated that she deposited a total of $64,000 from
the three loans into Cobren’s account. She further testified that she made all of the mortgage
payments except four.
Anderson testified that, on June 22, 2009, the house sold for $141,908.33. A tractor
on which Anderson had made payments since 2004 was sold along with the real property.
The proceeds from the sale of the real property were deposited into the registry of the court.
Anderson also testified about a list of payments for which she sought reimbursement.
Anderson explained that her parents took out a second mortgage on their home and made
some of the parties’ mortgage payments, which she promised to repay, and that she owed her
parents $67,000 and approximately $4,800 in interest. Anderson described payments she made
for Cobren’s child-support obligations, his medical bills and legal fees, a loan she made to his
landscaping business, his business insurance, his separate acreage, a hitch for his truck, and his
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debt to the IRS, as well as checks made payable directly to Cobren. Anderson testified that
Cobren promised to repay her as soon as he “got back on his feet.”
During cross-examination, Anderson stated that only one mortgage payment was made
from loan proceeds and that none of the mortgage payments for which she sought
reimbursement came from loan proceeds. Anderson testified that she made the majority of the
payments after she left Cobren to prevent foreclosure of the real property of which she was
a half owner. Anderson stated that, to obtain the mortgage, Cobren had to place the property
in both of the parties’ names and Anderson had to pay off her own debts as well. Anderson
emphasized, however, that she was not asking the court to award her those amounts that she
applied to her personal debts. According to Anderson, when she moved out, she had been
supporting Cobren for nearly a year, and nothing was left of the loan proceeds. Anderson
testified that she also had depleted her 401K.
Anderson said that, giving Cobren the benefit of the doubt, she had removed from her
list any payments that might have been paid from the loan proceeds.1 Anderson testified that
she made twenty-seven mortgage and thirty-eight tractor payments after the parties separated.
Again, Anderson emphasized that she was not asking to be reimbursed for payments she had
made from loan proceeds, but only for the money that she had paid for Cobren’s benefit.
Anderson introduced Cobren’s emails that she claimed reflected his agreement to repay
her. An email from Cobren dated August 31, 2006, stated, “[T]he money I borrowed was a
1
The amounts are set out in the trial court’s letter opinion, as quoted below.
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Cite as 2011 Ark. App. 477
loan from my house. I think I was entitled to do with it what I wanted.” Another email dated
September 6, 2006, stated, “Good luck Laura and when I sell the house I will give you your
money.” In an email dated September 22, 2006, Cobren wrote, “I will have to figure a way
to pay you and the mortage [sic] of [sic] and that’s what I will do.” Finally, in an email dated
October 6, 2006, Cobren stated, “I guess I am just going to have to sell the place and give
youre [sic] money.”
Lindsey Richardson, Anderson’s daughter, testified that she had known Cobren since
she was young and that Cobren had asked her mother for money for things such as cigarettes
and gas when they lived in Illinois and Arkansas. Lindsey also testified that Cobren had
promised to repay her mother the money he had borrowed from her.
Mary Vancura, Anderson’s mother, also testified that she had heard Cobren tell
Anderson that he would repay the money he had borrowed from her.
Bruce Garrett, a CPA, testified that the reductions made by Anderson on her list of
payments were appropriate. Garrett clarified that the amounts requested had been reduced by
the amount paid on Anderson’s debts.
Cobren testified that, after he had unsuccessfully attempted to mortgage the house on
his own, he and Anderson agreed that she would obtain the loan in her name if Cobren put
her name on the deed. Cobren contended that he was not aware of more than one mortgage
and disputed Anderson’s testimony about the disposition of some of the proceeds and
payments she claimed were made using her funds. Overall, however, Cobren demonstrated
very little knowledge of how the money was spent or any aspect of the financial transactions.
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Cobren said that the parties had not distinguished between his and her money, and he denied
promising to repay Anderson.
In rebuttal, Anderson testified that she would not have loaned Cobren the money if
he had not promised to repay her. She further stated that her share of the proceeds from the
sale of the house would not pay off all of the debts she had incurred in relying on Cobren’s
promise to repay her.
In his post-trial brief, Cobren argued that the parties had simply made gifts to each
other and denied any agreement to create a lien on his share of the property. In response,
Anderson denied that the monetary transfers were gifts.
The trial court made the following findings in its letter opinion:
It is undisputed that [Anderson] is entitled to one half of the monies in the Registry
of the Court. The only issue for this Court to determine is what monies [Anderson]
is entitled to from [Cobren’s] portion of the monies held in the Registry of the Court.
....
The evidence is undisputed . . . the mortgage payments that [Anderson] made
on the property total $42,004.98 and [Anderson] is entitled to this sum. It is also
undisputed that [Anderson] made various other payments for the benefit of [Cobren]
and I find that he agreed to repay these monies. These would be . . . the IRS
payments, $750.00; land payments, $800.00; loan, $400.00; loan to landscape
company, $1,000.00; his insurance, $582.21; his medical, $246.10; his legal bills,
$1,960.00; his child support payments, $1,200.00; tractor payments, $9,714.49; and
payments on a Jefferson trailer in the amount of $2,580.00. Also, the testimony was
undisputed that [Anderson] had taken a loan from her parents regarding the above
monies that had been advanced for the benefit of [Cobren] and the interest she had to
pay on this loan was $4,463.03. . . . In the instant case it is clear that [Anderson] loaned
considerable amounts of money to [Cobren] in order to keep him going in his
business, when he had trouble with the law, and for various help with his legal and
personal problems, including payment of some of his medical bills. There’s no other
adequate remedy for [Anderson] and unjust enrichment would accrue to [Cobren] if
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Cite as 2011 Ark. App. 477
he should receive the benefit of the above payments, especially when [Anderson] and
[Cobren] had a lengthy and personal relationship. I am finding that [Anderson] has an
equitable lien, to avoid unjust enrichment to [Cobren], . . . from [Cobren’s] portion
of the monies held in the Registry of the Court.
On March 22, 2010, the trial court entered a judgment awarding Anderson
$70,954.16, less $2,221.25 for distributions already made, for a net of $68,732.92 out of the
proceeds from the sale of the real property. The judgment also awarded Anderson $65,200.81
for money loaned and secured by an equitable lien, plus attorney’s fees and costs. The court
did not award Anderson the value of the personal property she claimed or the fair rental value
of the real property. In the judgment, the trial court explained its decision as follows:
The Court found credible and undisputed evidence that [Anderson] had loaned
to [Cobren] the sum of $65,200.81 and that [Cobren] had agreed to repay her said
sum; further, that said sum was lawfully and appropriately secured by an equitable lien
in [Anderson’s] favor on [Cobren’s] presumptive share of the sales proceeds in the
registry of the Court. The Court also opined that[,] even without the proof of “loans
made in exchange for promises to repay,” the same result could and should need to be
reached through the application of the doctrine of unjust enrichment.
In his first point on appeal, Cobren argues that the trial court erred in finding that the
parties entered into a contract implied in fact and giving Anderson the benefit of that
agreement, while also awarding damages based on a contract implied in law or a theory of
unjust enrichment. Because Cobren has mischaracterized the trial court’s findings, we
disagree.
In the judgment, the court did not find that the parties entered into an implied
contract;2 rather, the court found that the parties had an express agreement whereby Anderson
2
An implied-in-fact contract is one that is inferred from the acts of the parties or from
circumstances demonstrating their intention. Pettus v. McDonald, 343 Ark. 507, 36 S.W.3d
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loaned Cobren money, and Cobren agreed to repay her. See K.C. Props. of Nw. Ark., Inc. v.
Lowell Inv. Partners, LLC, 373 Ark. 14, 280 S.W.3d 1 (2008) (discussing express and impliedin-fact contracts). It is generally held that, where there is an express contract, the law will not
imply a quasi- or constructive contract (such as unjust enrichment). Coleman’s Serv. Ctr., Inc.
v. Fed. Deposit Ins. Corp., 55 Ark. App. 275, 935 S.W.2d 289 (1996). The court discussed
unjust enrichment as an alternative basis for its ruling, explaining in the judgment that, even
without the proof of loans made in exchange for promises to repay, the court would have
reached the same result by applying the doctrine of unjust enrichment.3 We affirm on this
point.
In his second point, Cobren argues that the trial court erred in giving Anderson an
equitable lien on his real property without finding that the parties had an agreement to give
her such a lien or that Cobren had obtained the money through trickery or fraud. Again, we
disagree.
Anderson submitted sufficient evidence that the parties had an express agreement
through the emails Cobren sent her. In any event, an equitable lien, which is a right to have
a demand satisfied from a particular fund or specific property, C.A.R. Transp. Brokerage Co.
745 (2001). In contrast, an implied-in-law contract is not a contract at all, but an obligation
imposed by law to do justice even though no promise was ever made or intended. Id.
3
Even if the court had stated that it was making an unjust-enrichment award, which
is generally based upon the value of the benefit conferred upon the party unjustly enriched,
City of Damascus v. Bivens, 291 Ark. 600, 726 S.W.2d 677 (1987), such an award may, in
certain circumstances, be based upon the payment due under the contract. Roberts Contracting
Co. v. Valentine-Wooten Rd. Pub. Facility Bd., 2009 Ark. App. 437, 320 S.W.3d 1 (2009).
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v. Seay, 369 Ark. 354, 255 S.W.3d 445 (2007), can be imposed in more situations than those
listed by Cobren. The lien may arise by implication out of general considerations of right and
justice, where, as applied to the relations of the parties and the circumstances of their dealings,
there is some obligation or duty to be enforced. Id. at 361, 255 S.W.3d at 451. The law’s
tendency is to limit rather than expand all constructive liens; in the absence of fraud, there
must be no adequate remedy at law and a basis for equitable relief. Id., 255 S.W.3d at 451.
The equitable basis for this remedy was solidly established by Cobren’s lengthy history of
using Anderson financially, while promising to repay her, and consistently failing to follow
through on those promises. In its letter opinion, the trial court found that there was no
adequate remedy at law, and we cannot say that it erred in doing so.
In his third point, Cobren asserts that the trial court erroneously gave Anderson a
double, or triple, recovery by making an inequitable distribution. He contends that the court
should not have awarded Anderson the full amount of the money she loaned him plus the full
value of her interest in the house. He states:
Allowing [Anderson] to recover under her theory of express contract for the
value of equity of the house, with no offset for her portion of the debt received
through the mortgage, under unjust enrichment for the value of the purported loans
made to [Cobren] and for the payments on the underlying loan itself, affords
[Anderson] a double or triple recovery, which is unconscionable.
In attempting to discern the nature of the parties’ agreement, the trial court correctly
considered all of the evidence and properly focused on the intent of the parties in the light of
all attendant circumstances. Machen v. Machen, 2011 Ark. App. 47, at 5, ___ S.W.3d ___, ___.
Conclusions concerning the true intent of the parties primarily involve issues of fact, and the
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trial court’s decision on such issues will not be reversed unless the findings are clearly
erroneous. Id., ___ S.W.3d at ___. Disputed facts and determinations of the credibility of
witnesses are within the province of the fact-finder. Id., ___ S.W.3d at ___. Whether Cobren
agreed to repay Anderson the entire amount that she loaned him, without taking credit for
the value of her interest in the house, was a question of fact for the trial court to determine.
Anderson’s testimony and Cobren’s emails, discussed above, supported the trial court’s
understanding of the parties’ agreement. We cannot say that the trial court’s decision was
clearly erroneous, and we affirm on this issue as well.
In his fourth point, Cobren argues that the trial court erred in finding that Anderson
overcame the presumption that she made a gift to him of some of the money. The trial court,
however, did not make such a finding. We will not address arguments if they were not ruled
on by the trial court. Machen, 2011 Ark. App. 47, at 6, ___ S.W.3d at ___.
Affirmed.
WYNNE and HOOFMAN , JJ., agree.
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