Bower v Bower

[*1] Bower v Bower 2014 NY Slip Op 50289(U) Decided on January 22, 2014 Supreme Court, Monroe County Dollinger, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 22, 2014
Supreme Court, Monroe County

Patricia A. Bower, Plaintiff,

against

Randy S. Bower, Defendant.



13/1752



Joan de R. O'Byrne, Esq.

Attorney for Plaintiff/Defendant

Rochester, New York

Thomas A. Coletta, Esq.

Attorney for Defendant/Plaintiff

Rochester, New York

Richard A. Dollinger, J.

In this matter, this Court revisits an increasing familiar haunt: the concept of a [*2]constructive trust.[FN1] Having decided a comparable case recently, this Court returns and is invited again to rummage around this aged-equitable concept and determine whether a complaint to establish a constructive trust, in an offshoot of equitable distribution, can survive a motion for summary judgment.

This court notes that it has previously diagnosed, at length, what it perceives as the dangers posed by constructive trust actions based on inferred or implied pre-marital promises between couples.[FN2] Unraveling these complex inter-personal transactions risks resurrecting palimony-like claims [FN3] and claims outlawed by the demise of common law marriage in New York [FN4]. The public policy contortions created by the confluence of equitable distribution claims under the Domestic Relations Law and common law constructive trust claims, if they merit reappraisal, must be deconstructed by some higher authority. Numerous appellate courts have recently permitted such claims in the quasi-marital context, seemingly without concern that their analysis may encroach on claims based on marriage and devised under the Domestic Relations Law. Guided by these precedents, this court now reviews the claims of the couple here. [*3]

The husband and wife in this case met in 1994, and in 1996, they began living together in a house owned by the wife. During the time that they lived in the wife's house, they shared expenses and the husband performed some repairs and maintenance. In 2003, the couple together searched for a second home. The wife signed a contract to buy the new home. The husband, allegedly strapped with bad credit from prior marriages, did not participate in the financing for the new home, but did put up $66,000 as the down payment to reduce the amount that the wife would have to borrow to finance the purchase. When the property was transferred, the title was put in the wife's name. Three years after the purchase of the home, the couple married. After the initial purchase of the property and during the course of the marriage, the wife refinanced the house on several occasions. On each occasion, the house was refinanced in her name. The matter came to this court when the wife commenced a divorce action in June 2012. The husband answered the complaint and issue was joined. Seven months after the commencement of the action, the husband commenced the constructive trust action, seeking return of his $66,000 down payment on the house.

The facts vary regarding the couples' understanding of the husband's $66,000 advance. The wife states that she never signed any document attesting to her commitment to repay the $66,000. The husband dates the "living together" arrangement to 1995 — eight years before he advanced the funds — and notes that their relationship was comparable to a married couple. When the couple went to buy the new home, the husband attests that he checked his credit, and found it would not support a mortgage application. However, as he describes it, "to hold up my proverbial end of the log," he contributed $66,000 to the purchase price of the house while his then girlfriend, who had access to loans through a credit union, applied for and received mortgage approval. To facilitate the purchase, the husband transferred the $66,000 directly to the girlfriend, and she deposited it into her account, eventually using the funds for the down payment on the house. The husband avers that the wife, on several occasions during the time prior to their marriage, stated "I know this is your house . . . I know we purchased it based on your father's inheritance money" and "if anything happens, this will be your house." He adds, "she repeatedly assured me that based on my contribution to the purchase price that the

house would be mine if something happened to her."

During the time they lived in the house, the husband worked on the house and contributed to expenses. The husband acknowledges that the house was refinanced, but claims he only knows about two of the refinancings, and has no knowledge of what the wife did with the refinanced proceeds. There is no evidence that the husband, when the refinancings occurred, demanded that his name be added to the deed. The husband alleges that during the marriage, the wife required him to finance the costs and repairs of the house without contribution from her. At the same time, he claims, she increased her [*4]retirement account contributions.[FN5]

The husband's verified complaint alleges that the house was purchased in 2003 for $129,000, and that he contributed $66,000 in funds from an inheritance from his father to the purchase price.[FN6] He further alleges that the house was purchased in contemplation of marriage and that the parties, at the time of the purchase, had a close and confidential relationship based on trust and an agreement that the property would be subsequently placed in joint names. The wife, in answering the complaint, raised a series of affirmative defenses. In her defense against the constructive trust, she alleges the purchase of the house "was in contemplation of marriage," but that the parties exchanged representations that the property was "defendant's [wife's] house." She also claims that the six-year statute of limitations for a constructive trust has elapsed because the husband's claim accrued when he advanced the funds in 2003 and also that laches bars his claim.

The wife moves for summary judgment to dismiss the constructive trust claim. On a motion to dismiss the complaint pursuant to CPLR 3211(a) (7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Sposato v Paboojian, 110 AD3d 979 (2nd Dept. 2013); see also Leon v Martinez, 84 NY2d 83, 87-88 (1994). To meet her burden for summary judgment, the wife in this matter must make a prima facie showing that there are no credible and material facts to support the elements of a constructive trust. Perez v. Avi-Spl Holdings, Inc., 2013 NY Slip Op 52249(U)(Sup. Ct. Queens Cty. 2013). See also Bush v. St. Clare's Hosp., 82 NY2d 738 (1993) (reasoning that if a question of fact exists the court is precluded from granting a summary judgment motion). If the wife meets that threshold, then the burden shifts to the husband, who must then demonstrate through admissible evidence that there are material issues of fact sufficient to establish the grounds for his claim. Zuckerman v. City of New York, 49 NY2d 557, 562, (1980). While this motion precedes depositions and other discovery, this court is cognizant that the "mere hope" that discovery will bring forth favorable evidence is not sufficient to defeat the wife's motion. See Zarzona v. City of New York, 208 AD2d 920 (2nd Dept. 1994). Mere conclusions, expressions of hope, or unsubstantiated allegations or assertions for each element of a constructive trust are insufficient to defeat a summary judgment motion. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).Simply put, the court's function at this stage of this proceeding is to determine whether material factual issues exist, not to resolve such issues. Ruiz v Griffin, 71 AD3d 1112, 1115 (2nd Dept. 2010); Pennsylvania Lumbermens Mut. Ins. Co. v Zurich American Ins., 2013 NY Slip Op 33053 (U) (Sup. Ct. Kings Cty. 2013) (considering [*5]a summary judgment motion requires viewing the evidence in the light most favorable to the motion opponent).

To establish a constructive trust, the husband must come forward with evidence of a confidential relationship, a promise, and/or a transfer in reliance on the promise and unjust enrichment of the wife. Sharp v. Kosmalski, 40 NY2d 119, 121 (1976); Maiorino v. Galindo, 65 AD3d 525, 526 (2nd Dept. 2009). In searching the record in this case, the court is required to credit the husband's assertions on each of these aspects of the trust, and if there is evidence to support a finding by a finder of fact on each component, then the wife's motion fails. This court must also acknowledge that, under current law, even if the husband fails to establish sufficient proof on each factor, the wife's motion may still fail.

The justification for such a result arises in the oft-quoted language from the Court of Appeals in Simonds v Simonds, 45 NY2d 233, 241 (1978). While articulating the essential elements in a constructive trust claim, the Court of Appeals created the legal equivalent of an escape hatch for would-be litigants in constructive trust cases. The court, apparently seeking to avoid straight-jacketing the equitable concept, stated that "these elements, however, serve only as a guideline and a constructive trust may still be imposed even if all four elements are not established." Simonds v Simonds, 45 NY2d 233, 241 (1978), Henning v. Henning, 103 AD3d 778 (2nd Dept. 2013), citing Marini v Lombardo, 79 AD3d at 933. This add-on clause, echoed throughout subsequent case law, directs that this court could find sufficient evidence for a constructive trust to withstand a motion for summary judgment, even if there is no proof of one — or perhaps more of the four elements. Presumably, consistent with the language of Simonds v Simonds, this court could still deny the wife's motion if the Court found clear and convincing evidence on fewer than all four factors or, for example, on only two of the four touchstone factors.[FN7]

This uncertainty underlines the court's conundrum: how should this court weigh the [*6]proof on the various elements in resolving this motion? If this court finds an intimate pre-marital relationship, for example, can it apply a lesser burden of proof on the remaining three factors? If there is no proof on one aspect of the trust claim but clear and convincing proof on the remaining three supposedly essential elements, does the Court deny the current motion? The court is equally troubled by the apparent command that the New York courts, in seeking to impose legal consequences on "trust-related" claims, have required proof by a "clear and convincing" standard. Yet, if a constructive trust claim can be established by proof of only a portion of the required elements, should the court, in a motion for summary judgment, apply the exacting "clear and convincing" standard to only some portion of the proof before the court?

To decide whether the proof in this case meets the summary judgment standard, this court has searched for some clear indication of the reach of its equitable power. After reading dozens of cases from the Court of Appeals and elsewhere, this court finds virtually no clear standard to apply. Unfettered equity - as the case law seems to suggest must be applied - converts the legal doctrine of a constructive trust into a subjective judicial judgment about the fundamental "fairness" of a transaction.[FN8] This undefined doctrine, which as numerous appellate decisions attest, creates the equivalent of a non-marital form of equitable distribution, in which the courts are asked to unravel a pre-marriage exchange of property based on whispered amorphous promises and the supposed "unfairness" of the transfer of property before marriage. Despite ample misgivings, the court must review this case under the Simonds v. Simonds standard and accord the husband all the elasticity that equity, as defined by the Court of Appeals, provides.

Evidence of a Confidential Relationship

In McKeown, this court conducted a detailed analysis of the proof sufficient to establish a confidential relationship under the theory of a constructive trust. McKeown v. Frederick, 39 Misc 3d 1241(A) (Sup. Ct. Monroe Cty. 2013). The court concluded that a husband, engaged to his future wife, even for only a few months, alleged sufficient facts to justify a finding of a confidential relationship. Here, the undisputed facts establish that the couple lived together for almost a decade before the husband transferred $66,000 to his then girlfriend, now wife. The existence of an extended period of cohabitation makes the inference of a confidential relationship more likely. Dee v. Rakower, 2013 NY App. Div. LEXIS 7468 (2nd Dept. 2013) (confidential relationship established after 17 years of [*7]cohabitation); Cannisi v. Walsh, 13 Misc 3d 1231 (a) (Sup. Ct. Kings Cty. 2006) (domestic partners cohabitated for 18 years and there was a colorable claim for a confidential relationship and constructive trust).

In this case, the husband lived in the wife's home and contributed expenses and upkeep before the couple decided to purchase the new home. The wife does not dispute that the couple shared housing and other expenses during this time. The wife, using the word "we" concedes that "we put up a fence and built a garage" at a previous property that the wife owned. In this court's view, the husband, by living in the prior marital home, paying expenses (presumably including the mortgage) and performing repairs, created some marital interest in the prior home even though the wife owned it before he moved in, and he never paid any portion of the down payment on the prior property. Maldonado v Maldonado, 100 AD3d 448 (1st Dept. 2012); Hale v. Hale, 16 AD3d 231 (1st Dept. 2005) (fact that spouse provided upkeep and maintenance for a property could be considered in deciding whether the spouse has a marital interest in the property).

The wife also acknowledges the close relationship between this couple when she states in her affidavit that "we decided to move to Webster" in 2003. The decision to buy a second house, even though it ended up titled solely in her name was, by the wife's own admission, a joint decision. What is also undisputed at this stage of the proceeding is that it appears that neither individual could have bought the Webster house without the other. The husband's $66,000 down payment was apparently necessary to allow the wife to mortgage the remaining $63,000 to buy the property. There is no proof before the court that the wife could have bought the Webster home without the husband's separate property contribution.[FN9]

Based on these facts, this court finds that there is sufficient evidence to justify a finding of a "confidential relationship" between this couple. In Matter of Greiff, 92 NY2d 341, 346 (1998), the Court of Appeals, albeit in another context,[FN10] noted "the unique character of the inchoate bond between prospective spouses - a relationship by its nature permeated with trust, confidence, honesty and reliance." In an age of evolving relationships, and a rising incidence of non-married couples living together, a confidential relationship, sufficient to justify a constructive trust, can arise between couples living together. A number of other courts, exploring these relationships, have granted pre-marital associations legal recognition. See e.g., Matusick v. Erie County Water Authority, 739 F.3d 51 (2nd Cir. 2014).[FN11] This court, having found sufficient facts alleged in [*8]McKeown to support a finding of a confidential relationship, concludes that the facts alleged in this instance are sufficient to defeat a claim for summary judgment on the first prong of a constructive trust.

Evidence of a Promise

In support of his claim that a promise exists, the husband makes two separate forms of allegations. In his verified complaint, the husband alleges that "there was an understanding the property would be subsequently transferred into joint names." He adds: "the parties were going to be married [FN12] and were sharing all expenses and carrying charges there on." He also alleges that "many times," prior to the marriage and after, his wife told him, "I know this is your house." He adds that she also said: "I know we purchased it based on your father's inheritance money" and, "if anything happens it will be your house." He concludes: It is noteworthy that she said "your house," not "our house." She repeatedly assured me that based on my 50%+ contribution to the purchase price . . . that the house would be mine if something happened.

The wife directly denies that she made any of these statements. But under the summary judgment rules, the wife's denials are not pertinent. If the husband's allegations are deemed true, the Court's ruling on this aspect of a constructive trust rises and falls based on whether her statements — as he attributes them to her — could constitute a promise.

In considering this question, some principles, articulated by the court at length in McKeown, need reiteration. Any promise, to be enforced, must have a certain definiteness. In regard to the transfer of interests in real property, courts have generally strictly applied the "definiteness" rule. Lefton v. Bedell, 160 AD2d 702, 703 (2nd Dept. 1980) (refusing to find a constructive trust even though a father told his son "this house is now yours"); Ogbunugafor v. St. Christopher's Union Free School Dist., 100 AD2d 580 (2nd Dept. 1984) (refusing to enforce the equivocal language - "if all goes well" - of the purported promise); Brown & Guenther v. North Queensview Homes, Inc., 18 AD2d 327 (1st Dept. 1963) ("a home of our desire" too equivocal to be enforced); Matter of Lublin, 40 Misc 3d 1208 (A) (Sur. Ct. Nassau Cty. 2013) (because there were no specifics as to the nature of property to be conveyed, or what constituted a "rightful or fair" share that was allegedly promised or when the transfer was to occur, the comments were "too indefinite" to support a constructive trust); Fortunato v. Fortunato, 2013 NY Misc LEXIS 4938 (Sup. Ct. Kings Cty. 2013) (no constructive trust even though plaintiff told "this house is yours," [*9]"I bought this house for you,");[FN13] Tompkins v. Jackson, 22 Misc 3d 1128 (A) (Sup. Ct. New York Cty. 2009) (the promise to "give" plaintiff "the house," and place same in plaintiff's name, in and of itself, is insufficient on its face and lacks definiteness).[FN14]

1.The husband's "understanding" that the property

would be placed in joint names.

Under applicable case law, this statement is not sufficient, standing alone, to provide the promissory stanchion for a constructive trust claim. The husband does not state when such an "understanding" was concluded. He does not quote any specific promissory language from his wife that justifies his "understanding." Importantly, there is no evidence that the husband, at any time between the date of this alleged "understanding" and the commencement of the divorce, ever specifically - or otherwise - directly asked the wife to transfer the property into joint names. The husband's lack of any indication as to when the "understanding" arose similarly erodes this court's confidence that the "understanding" is sufficient to support his claim. The husband never alleges that the "understanding" existed prior to purchase of the home, or when he transferred the $66,000 into his wife's account, or after the fact. In this court's view, the "understanding" would have to exist at the time of the establishment of the constructive trust, either before or when the funds were transferred for the purchase of the home. There is no evidence, however, that the "understanding" predated the transfer of the down payment.

In its prior analysis of the components of a constructive trust in McKeown v. Frederick, this court was concerned about this need for a promise to predate the transfer of property in order to create an "understanding." Other courts have not been so demanding on this aspect of the claim. In Cannisi v. Walsh, 13 Misc 3d 1231 (A), p. 10 (Sup. Ct. Kings Cty. 2006), the court held that the parties "agreed" to undertake certain domestic duties and contribute time and effort to the family unit, apparently after the purchase of the disputed real property, and these promises were sufficient to establish a constructive trust. Regardless, in this Court's view, any statements by the [*10]wife regarding the consequences of the husband's transfer of the $66,000 should be given greater weight if they precede the transfer. If the alleged representations regarding the transfer occur well after the transfer, the Court finds it more difficult to infer that these representations constitute a promise that motivated the husband to transfer the funds for the down payment.

2."I know this is your house."

The husband next alleges that the wife repeatedly told him - prior to the marriage and thereafter - that "this is your house." This nuanced statement suggests the wife recognized the husband's contribution to the property. The statement can easily be interpreted to rebut the notion that the wife thought the down payment was a gift. The declaration - which is presumed to be true at this stage of this proceeding - would rebut any claim that the wife assumed that husband, even after extending the payment, had no discernable interest in the house. Taken further, it can be interpreted to constitute an acknowledgment by the wife that the husband, either through the down payment or his work and covering expenses, acquired some interest in the house. However, this statement, standing alone, is a slender reed on which to construct a constructive trust. See Leicht v. Caretta, 23 Misc 3d 1117 (A) (Sup. Ct. Suffolk Cty. 2009) (girlfriend in a 22-year cohabitation referred to the residence as "their house," but never said she would give an ownership interest in the property to the boyfriend despite his repeated asking for such interest and the court held no constructive trust because the boyfriend had a "mere expectation" of ownership).

3."I know we purchased it based on your father's inheritance money."

This statement has the same quality as the preceding statement: it is an acknowledgment that the wife conceded that the husband had assisted in the purchase. Independently, it lacks any distinct promissory quality. There is no indication, even if the statement is broadly interpreted, that the wife intended to do anything based on her acknowledgment. In short, there is no promise inherent in this statement. Read broadly, it is simply a statement of a present fact and cannot be interpreted as a promise.

4."If anything happens, this will be your house."

This statement carries more weight. Interpreted broadly, as it must be at this stage, the statement is an acknowledgment that the husband, through the advance of the down payment, acquired — in his future wife's eyes — an interest in the house or that she intended that he obtain an interest in the house. Interestingly, the phrase "if anything happens" is ambiguous: it does not limit the circumstances under which the husband would acquire the house. Because the statement was allegedly made when the wife knew she was the only party on the deed to the property, the statement can be interpreted as a promise by the wife that the house would be owned - or at least controlled - by the husband if "anything happens." The apparent promissory quality of this comment still raises an additional question, i.e., whether the promise, made after the advance of funds, is sufficient to establish the promise underlying a constructive trust. The husband states that the wife "repeatedly assured" him that the house would be his if something happened, but he does not identify whether it occurred prior to the transfer. Whether made before or after the transfer, the statement could be interpreted [*11]as evidence that there was an implied promise by the wife to transfer an interest to the husband.

5.The "50 per cent plus" assurance by the wife.

In his affidavit, the husband supplements all the prior statements with the allegation that his wife "repeatedly assured me that based on my 50 per cent plus contribution to the purchase price, the house would be mine if something happened to her." What is unclear, at least at this stage, is whether the wife, in making this statement, referenced the husband's "50 per cent plus contribution" or whether this descriptive phase originates in the husband's own description of this alleged conversation. Giving the husband the benefit of the doubt, this court holds that this statement can be interpreted as evidence that the wife, while promising the house "would be [the husband's] if something happened to her" acknowledges that the husband had contributed "50 per cent plus" to the purchase price. If the wife acknowledged his contribution - in conjunction with the post-transfer representation that the property would be his at some time in the future - then the inference of a promise is more easily conceived.

6.The compilation of "representative" comments - the implied promise.

This court has previously expressed "reluctance" to construe ambiguous language to find a promise, especially when there is only circumstantial evidence of when the alleged promise was made. The comments here alleged by the husband in his complaint and affidavit lack a setting and context. For example, the comments alleged by the husband might be entitled to greater weight if they were uttered in unique places, or at unique times, such as a birthday or an anniversary. In McKeown, this court refrained from trying to determine the extent of the couple's romantic involvement at the time when the husband alleged the wife made promises prior to the couple's engagement. In this case, the court has less reluctance because when the alleged promissory comments were made, the couple had been living together for more than a decade, a period longer than the average length of marriages in the United States.[FN15] Under these circumstances, the factors that made this court reluctant to find an implied promise in McKeown militate strongly in favor of finding sufficient evidence of an implied promise here to defeat the motion for summary judgment.

New York courts have recognized that an implied promise can support a constructive trust. Other courts have accepted proof of an "implicit promise" to sustain this aspect of a constructive trust. Marini v. Lombardo, 79 AD3d 932, 934 (2nd Dept. 2010) (the second aspect of a constructive trust involving real property could be based on an implicit promise to convey it); Henning v. Henning, 103 AD3d 778 (2nd Dept. 2013) (allegation that a mother and father had "implicitly promised" to convey property to a couple was sufficient to satisfy the second element of a promise on a motion for summary judgment even though directly rebutted by the parent). More than a century ago, the Court of Appeals commented on implied promises: [*12] They always exist where equity and justice require the party to do or to refrain from doing the thing in question; where the covenant on one side involves some corresponding obligation on the other; where, by the relations of the parties and the subject-matter of the contract, a duty is owing by one not expressly bound by the contract to the other party in reference to the subject of it. In this court we have thrown some safeguards about the doctrine to secure its prudent application and have said that a promise can be implied only where we may rightfully assume that it would have been made if attention had been drawn to it (citations omitted), and that it is to be raised only to enforce a manifest equity or to reach a result which the unequivocal acts of the parties indicate that they intended to effect.

Wilson v. Mechanical Orguinette Co., 170 NY 542 (1902). Nearly a century later, the Court of Appeals suggested that "the required promise may be inferred where the totality of the transactions and the relations of the parties would render an express promise superfluous." Bankers Sec. Life Ins. Soc.. v. Shakerdge, 49 NY2d 939 (1980); Dooley v. Dooley, 2013 NY Misc LEXIS 196 (Sup. Ct. Suffolk Cty. 2013); Mele v. Okubo, 2010 NY Misc LEXIS 2626 (Sup. Ct. Suffolk Cty. 2010). In Mele v. Okubo, the court looked for outside evidence of the implied agreement. There was no direct evidence of a promise to transfer an interest in the property: the parties did not draft a contract before buying the house or make any written determination of what would happen if they went their separate ways. The wife alone applied for and obtained the mortgage on the property. In weighing all these factors, the court still concluded that these factual issues required a hearing on whether a constructive trust existed.

Here, there is sufficient evidence to infer a promise. The totality of the comments, if true, could be interpreted to demonstrate a promise by the wife to either give the husband an interest in the real property or compensate him for his initial contribution or his work and expenditures after the purchase. While the lack of allegations that the wife, during the course of their entire relationship, ever made reference to the deed or undertook actions that would reveal an intention to grant the husband an interest in the real property may undercut the husband's claim that a promise existed, that determination remains for trial.[FN16]

In considering this aspect of the husband's claim, this court cannot ignore that this motion for summary judgment precedes any deposition of the wife. The husband has not had the opportunity to quiz the wife on the statements which he alleges she uttered. In addition, the husband has not had the chance to ask his wife what she [*13]understood would happen when he gave her $66,000 to buy the second home. As numerous courts have suggested, the constructive trust claim "invites discovery." Garcia-Valera v. McLendon, 2010 NY Misc LEXIS 4603 (Sup. Ct. New York Cty. 2010); Amato v. Amato, 24 Misc 3d 1216 (A) (Sup. Ct. Kings Cty. 2009). In Amato v. Amato, the court, paraphrasing the same procedural status as exists in this case, noted: [C]onstructive trust are remedies which compel the court to weigh the equities of the parties and fashion a resolution of the matter which achieves a fair distribution of the property in question, particularly where close familial relations, alleged implied or explicit promises made in the context of same and the reliance of defendant thereupon are at issue. Here, questions of intent, credibility and the parties' various contributions to, and connections with, the property necessitate further discovery and the denial of the summary resolution sought by plaintiffs. This is particularly true where, as here, a marital relationship is involved, a divorce action is currently pending between the married parties, and the parties' two unemancipated children currently reside at the subject property. The divorce case and the instant case have been consolidated, inter alia, due to the overlap of issues between them with respect to the potential distribution of the marital residence. Although the defendant's husband is not seeking the partition at issue, but rather his parents are, the court must nonetheless consider the equities of the parties, taking into account the nature of the marital relationship involved, where, as here, potentially colorable claims of constructive trust are alleged and interwoven confidential relationships exist, as do questions concerning any promises, agreements, understandings or reliance thereupon stemming from same. Accordingly, the court finds that such questions of fact, credibility and weighing of the ultimate equities, including the potential for unjust enrichment, must await resolution at trial.

Amato v. Amato, 24 Misc 3d 1216 (A), p. 30-31. The prospect that further discovery, including a deposition of the wife, would produce additional evidence on either side of the constructive question cannot be discarded and weighs, as it did in Amato v. Amato, in favor of denying a request for summary judgment.

When all the equities are balanced, this court concludes that the husband has made out a prima facie case that a sufficient implied promise exists based on his $66,000 contribution to the acquisition of the second home. The court makes this determination by stretching "equity" to its limit. If a constructive trust is designed to remedy an instance where property is acquired under circumstances where the holder of legal title may not in good conscience retain the beneficial interest - as a cavalcade of cases command [FN17] - then this court must find that the alleged statements made here [*14]are sufficient. In this court's view, this case is a rare instance in which, under the current pre-trial summary judgment standard, the "promise may be implied or inferred from the very transaction itself." Reiner v. Reiner, 100 AD2d 872, 874 (2nd Dept. 1984) citing Sharp v. Kosmalski, 40 NY2d 119,123.[FN18]

Transfer in reliance on the promise.

Under the third prong of a constructive trust, the husband must establish that he transferred the $66,000 in reliance on the implied promise which the court has recognized above. Henness v. Hunt, 272 AD2d 756 (3rd Dept. 2000) (element may be satisfied where the party seeking to impose the trust has no prior interest in the property, but does contribute funds, time or effort to the property in reliance on a promise to share in some interest in it); Cannisi v. Walsh, 13 Misc 3d 1231 (A) (Sup. Ct. Kings Cty. 2006) (third element of a constructive trust, a transfer in reliance of a promise, can be shown by contributions of funds, time, and effort, by a domestic partner in reliance on a promise to share the results of their joint efforts); Shrifter v. Goldman, 23 Misc 3d 1120 (A) (Sup. Ct. Kings Cty. 2009).

In this regard, the court is again left to discern whether there is any credible proof that the transfer was made after the alleged "implied promise" was uttered or manifested by the girlfriend, now wife. There is no specific evidence that the wife made any statements priorto the husband's advance of the funds. The wife admits that "we looked for a new home," an indication that the wife anticipated that the husband would make a contribution to the house.[FN19] In addition, this court could easily assess this circumstance and ask: who would give their girlfriend $66,000 - a portion of their inheritance from their father - and not request that his contribution be acknowledged by a concomitant interest in the house? In one sense, the court is astounded that anyone would give that amount to a girlfriend and not seek something - an explicit promise to be included as a titleholder on the deed as soon as possible - in response.

However, precedent comes to the husband's rescue on this score. In a slew of recent cases involving constructive trusts, New York courts have held that the mere fact that the party gave the funds to a person with whom he had a confidential relationship, combined with the fact that the funds were used to purchase the subject property, gave [*15]rise to an inference that the transfer was made in reliance on the promise. See Tyree v. Henn, 109 AD3d 906 (2nd Dept. 2013). In that case, the husband gave his father-in-law $58,500 for the purchase of property. The court held a constructive trust required the wife's parents, who stepped in as the title holders because the husband and wife could not obtain a mortgage, to return the husband's down payment.[FN20]

When all is said and done, the husband's evidence that he transferred the money to his then girlfriend in reliance on a promise to include him on the title is the weakest of the proffered proof. The husband simply fails to produce any proof that a promise - any type or description - was uttered by the wife prior to the transfer. Faced with these facts, this court would be required to stretch its search of the record beyond comprehension to support a finding on this element of a constructive trust. However, this court is not required to draw that conclusion. Because the standard articulated by the Court of Appeals suggests a constructive trust can be found in the absence of any proof of any specific elements - as Simonds v. Simonds commands - the court's conclusion that there is insufficient evidence of a promise made prior to the transfer does not require this court to grant the wife's summary judgment request. If there is sufficient evidence from the husband to support the other three prongs of constructive trust, the husband's claim survives the wife's challenge even if the proof to establish this prong of the test is absent. If this Court held that the lack of proof on the "transfer in reliance" portion of a constructive trust — isolated from sufficient proof on the other factors — defeated the husband's claim, the Court would elevating this aspect to a higher station then envisioned by the Court of Appeals in Simonds v. Simonds and constricting the broad equitable principles repeatedly invoked by New York's courts after Simonds v. Simonds. This Court declines to take that step.

Unjust enrichment of the wife.

Unjust enrichment is the heart of the constructive trust doctrine. Bolla v Bolla, 10 Misc 3d 906 (Sur. Ct. Bronx Cty. 2005). "A person may be deemed to be unjustly enriched if he (or she) has received a benefit, the retention of which would be unjust."Dooley v. Dooley, 2013 NY Misc LEXIS 196 (Sup. Ct. Suffolk Cty. 2013), citing Restatement, Restitution, § 1, Comment a. A conclusion that one has been unjustly enriched is "essentially a legal inference drawn from the circumstances surrounding the transfer of property and the relationship of the parties. It is a conclusion reached through the application of principles of equity." Sharp v Kosmalski, 40 NY2d 119 (1976).

Under this broad concept, the husband's proof demonstrates that the $66,000 provided both the husband and wife with a home in the period from 2003 through the commencement of this divorce. The husband clearly received some benefit from his funds: he lived in the house for nearly nine years. Therefore, the "enrichment" - the extent to which the $66,000 provided a larger home - did not exclusively benefit the [*16]wife.[FN21]The husband also argues that the wife's unjust enrichment occurs because the wife, freed by his advance of the down payment, and his payment of other expenses after the acquisition - while they were not married - and his continuing to pay expenses after the marriage resulted in him spending down his assets while the wife increased her retirement assets through her employer. In essence, the husband argues that the wife, by using his funds prior to and during the marriage, was able to accumulate other funds. Two observations rebut this claim. First, the unjust enrichment, if it occurs, must be related to the property which the husband claims an interest in. The husband does not seek to attach a constructive trust to the funds he expended during the marriage for the house, he simply seeks to have the trust attach to the $66,000 he advanced in 2003.[FN22] Second, the fact that the wife, after she received the advance and during the course of the marriage, accumulated other funds because the husband was paying expenses on the home does not transform the original advance into an unjust enrichment of the wife.[FN23] By linking the two, the husband, in essence, seeks to suggest that he has some form of equitable claim to the accumulated retirement accounts that should be traded off for recognition of his equitable interest in the house. The constructive trust is not a substitute for equitable distribution of marital assets enriched or accumulated during the marriage and should not be construed to accommodate an equitable trade off of assets accumulated by unmarried persons.

Nonetheless, when the court considers this factor, the wife's retention of the $66,000 down payment from the husband's inheritance, when it represents the sole source of financing the down payment on her property, strikes this court as unjust. The wife knew that the husband had, prior to marriage, inherited money from his father. He advanced those funds to buy a home for himself and his girlfriend, albeit before marriage. Now, as the marriage ends, she declares the advance a "gift" and suggests that she can retain any proceeds from the sale of the home. At this stage, in denying [*17]summary judgment, the court concludes that there is sufficient evidence to conclude that this advance of funds "unjustly enriched" the wife.

Conclusion on the Constructive Trust

As this lengthy analysis indicates, the equity underlying the constructive trust doctrine when applied to the evidence before this Court provides a stew of conclusions, of varying degrees of definiteness, in response to this motion for summary judgment:

(a)in the easiest finding, there is sufficient evidence that a confidential relationship existed between this unmarried couple, who lived together for a lengthy period of time prior to the transaction, at the time of transfer;

(b)there are asserted comments attributed by the husband to his then- girlfriend-now wife during the course of their confidential relationship from which a fact finder could draw an inference to support the conclusion that the girlfriend made a promise to her boyfriend to give him some interest in the house prior to the purchase of the house, even if some or all of the alleged comments were made after the transfer occurred;

(c)there is insufficient evidence, based on the sworn statements before the Court, that the boyfriend transferred his down payment in reliance on the promise because there is no specific comment, made prior to the transfer, to support the conclusion that he relied on any promise by his girlfriend prior to making the transfer; and,

(d)the evidence before the Court can be interpreted in a fashion to conclude that the girlfriend's retention of the entire $66,000 — which she knew was derived from her then boyfriend's inheritance — would be unjust to the extent that his contribution presumably exceeded the benefit he derived directly from the money because he lived for some time in the house purchased with the funds.

Constructive trusts, as interpreted by the Court of Appeals in Simonds v. Simonds, do not require exacting proof on all elements. Following this command, this Court finds sufficient evidence to deny this motion even though sufficient proof that the transfer was made after a promise is, at this pre-discovery stage, lacking. For these reasons, the wife's motion for summary judgment to dismiss the complaint for a constructive trust, because it fails to present a prima facie claim, is denied.

Statute of Limitations and Laches

The wife advances two other claims for summary judgment: the statute of limitations and laches. Neither requires this court to grant summary judgment dismissing this complaint. The wife's argument that the constructive claim is nixed by the statute of limitations is misplaced. A constructive trust claim is subject to a six-year statute of limitations. Matter of Thomas, 40 Misc 3d 1214 (A) (Sup. Ct. Monroe Cty. 2013), citing Dombek v. Reiman, 298 AD2d 876 (4th Dept. 2002). The claim in this case did not accrue until the wife declined to return the property that the husband had advanced to her: A determination of when the wrongful act triggering the running of the [*18]Statute of Limitations occurs depends upon whether the constructive trustee acquired the property wrongfully, in which case the property would be held adversely from the date of acquisition, or whether the constructive trustee wrongfully withholds property acquired lawfully from the beneficiary, in which case the property would be held adversely from the date the trustee breaches or repudiates the agreement to transfer the property.

Quadrozzi v Estate of Quadrozzi, 99 AD3d 688, 690 (2nd Dept. 2012); see also Vitarelle v Vitarelle, 65 AD3d 1034 (2nd Dept. 2009); Palmeri v Palmeri, 2013 NY Slip Op 32584 (U) (Sup. Ct. Suffolk Cty. 2013). The husband's claim for his share of the property did not accrue until the commencement of this action for distribution of property in which he had an interest. When she declined to return his advanced funds, the wife triggered the statute of limitations for the husband's claim. The complaint for a constructive trust, brought seven months after the filing of the divorce action, is timely.

The doctrine of laches is an equitable doctrine which bars the enforcement of a right where there has been an unreasonable and inexcusable delay that results in prejudice to a party. Markell v Markell, 91 AD3d 832, 834 (2nd Dept. 2012) (seven-month delay in bringing an action to impose a constructive trust is not barred by the doctrine of laches). Laches requires a finding of prejudice to the wife by delay and this court cannot find any such prejudice or detrimental change in her financial position by the delay. Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801, 816 (2003), Skrodelis v Norbergs, 272 AD2d 316, 317 (2nd Dept. 2000) (prejudice may be demonstrated "by a showing of injury, change of position, loss of evidence, or some other disadvantage resulting from the delay"); O'Dette v Guzzardi, 204 AD2d 291, 292 (2nd Dept. 1994) (detrimental change of financial positions allowed party to invoke laches).

Conclusion

As noted throughout this analysis, the collision of constructive trust claims of unmarried couples accruing before a wedding and the equitable distribution of assets after marriage may plunge New York's courts into a complicated, unstructured and seemingly inappropriate analysis of the vagaries and intimacies — who whispered what to whom when — of undefined pre-marriage human relationships. In this case, the proof, when analyzed against these equitable precedents, justifies denial of the wife's motion and leaves only a trial, which will require further judicial probing into the intimate pre-marital lives and thoughts of these parties at a time when New York, through its recent "no-fault" divorce changes, seems to have elected to move in a different direction to exclude the courts from probing such personal details of people's lives.[FN24]

SUBMIT ORDER.

Dated: 1/22/14_______________________________ [*19]

Richard A. Dollinger, A.J.S.C. Footnotes

Footnote 1:This court discussed the ins and outs of a constructive trust as a companion claim in a matrimonial case in McKeown v. Frederick, 39 Misc 3d 1241 (A) (Sup. Ct. Monroe Cty. 2013).

Footnote 2:McKeown v. Frederick, 39 Misc 3d 1241(A) (Sup. Ct. Monroe Cty. 2013).

Footnote 3:Morone v. Morone, 50 NY2d 481 (1980).

Footnote 4:In McKeown v. Frederick, this court stated it was:

[W]ary that the recognition of a constructive trust in this case, would veer New York law too close to the interpersonal quagmire confronted by courts in determining the existence of common law marriages. New York State has long refused to recognize common-law marriages. In re Jacob, 86 NY2d 651, 670 (1995)(common law marriage abolished in 1933 by enactment of Domestic Relations Law § 11). New York courts recognize common law marriages in other states. Matter of Mott v Duncan Petroleum Trans., 51 NY2d 289, 292 (1980). In determining whether common-law marriages exist under the laws of other states, the New York courts have confronted the nettlesome factual inquiries into a couple's personal lives that such a determination demands. See In re Estate of Benjamin, 34 NY2d 27, 30 (1974) (direct or circumstantial evidence may suffice to establish a common law marriage and documentary evidence, cohabitation and reputation as husband and wife, acknowledgment, declarations, conduct and the like are all probative of the existence of a common law marriage); Baron v. Suissa, 74 AD3d 1108, 906 NYS2d 50 (2nd Dept. 2010) (discussing the proof required for establishing a common law marriage). While such an inquiry may be necessary to accord comity to laws in our sister states in certain circumstances, New York courts, through consideration of a constructive trust doctrine, should not venture into similar factual investigations of couple's personal lives to determine their extra-marital rights to property outside the well-worn doctrines of marriage-based equitable distribution under the Domestic Relations Law.



Footnote 5:There is no evidence that the couple maintained joint bank accounts or a joint credit card, or any evidence from a third-party that they ever held themselves out as being husband and wife before the transfer occurred.

Footnote 6:In Dooley v. Dooley, 2013 NY Misc LEXIS 196 (Sup. Ct. Suffolk Cty. 2013), a daughter's constructive trust claim against her father was upheld, in part, based on facts that indicated both parties knew that the daughter's contribution to the down payment came from an inheritance from the father's mother.

Footnote 7:In McKeown, this court concluded that the "clear and convincing standard" should be applied to the proof requirements in a constructive trust claim, noting:

If a constructive trust is a fraud-rectifying remedy in New York, as the Court of Appeals directed in Bankers Security Life Insurance Society v. Shakerdge, then the standard of proof for all the elements of a constructive trust should be "clear and convincing evidence" and this court will apply that standard in analyzing the husband's proof on this motion for summary judgment. As further evidence of the requirement of clear and convincing evidence to establish the elements of a constructive trust, this court notes that the CPLR requires that a claim for "breach of trust" requires that the "wrong" be "stated in detail." CPLR 3016 (b); Mance v. Mance, 128 AD2d 448, 513 NYS2d 141 (1st Dept. 1987) (a statement of future intention must allege facts to show that the defendant, at the time the promissory representation was made, never intended to honor or act on his statement). The Court of Appeals direction, combined with the legislative intent in CPLR 3016 (b), mandates that the husband's proof, in this case, be tested under the "clear and convincing" standard.

Maryanne McKeown (Frederick) v Frederick, 39 Misc 3d 1241at p.14.

Footnote 8:The lack of certainty in the contours of a constructive trust brings to mind another judge perplexed by a seeming amorphous concept but with substantial legal significance:

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.

Jacobellis v. Ohio, 378 U.S. 184,197 (1964)(Stewart, J., concurring)(regarding possible obscenity in the movie The Lovers). This Court is tempted to make the same judgment: I am not sure what a constructive trust is a pre-marital context is but, I'll know it when I see it.

Footnote 9:In contrast, in McKeown v. Frederick, the wife already owned the house and the husband, prior to marriage, added improvements. In that case, there was no suggestion that the wife had requested the improvements or could not have paid for them on her own.

Footnote 10:In Greiff, the court was resolving a dispute over the burden of proof for a party defending an antenuptial agreement, but its recognition of the confidential nature of "prospective spouses" is pertinent here.

Footnote 11:As the Second Circuit noted, citing Roberts v. United States Jaycees, 468 U.S. 609, 619 (1984), "certain kinds of personal bonds have played a critical role in the culture and traditions of the Nation by cultivating and transmitting shared ideals and beliefs, a process essential to the maintenance of a pluralistic democracy . . .. Of course, not all romantic relationships presuppose such deep attachments. The Supreme Court has made the relevant, if rather uncontroversial, point that personal bonds' that are formed from the use of a motel room for fewer than 10 hours are not those that have played a critical role in the culture and traditions of the Nation by cultivating and transmitting shared ideals and beliefs." FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 237, 110 S. Ct. 596, 107 L. Ed. 2d 603 (1990), cited in Matusick v. Erie County Water Authority, 759 F.3d at 68, n.18.

Footnote 12:While the husband's suggests marriage was in the offing when the funds were transferred, the wedding did not occur until three years later.

Footnote 13:The facts in Fortunato bear a strong resemblance to the facts in this case. The case was resolved largely on the lack of proof of a transfer in reliance on any promise, even though the plaintiff, seeking to impose the constructive trust, paid the mortgage, insurance, utilities on the property and spent $63,000 in renovations. The court held that the payments by the plaintiff — made for his benefit and that of his wife — constituted rent and were not made in reliance on the promise. Fortunato v. Fortunato, 2013 NY Misc LEXIS 4938 (Sup. Ct. Kings Cty. 2013). See also Marini v Lombardo, 79 AD3d 932 (2d Dep't 2010)

Footnote 14:In considering this aspect of a constructive trust, the court is struck by a comparison of the requirement of a promise in the constructive trust and the promissory language in a breach of contract claim. In a contract action, the promise is bound by consideration and the promise, for the most part, is seldom inferred or implied. In this court's view, the "promise" required for a constructive trust often lacks this definiteness and precision. The existence of the confidential relationship, especially involving a personal relationship, makes the requirement for "definiteness" less determinative in a constructive trust claim. As a result, the court has greater latitude in extracting a promise from the conduct or relationship of the parties.

Footnote 15:See United States Census Bureau, Number, Timing, and Duration of

Marriages and Divorces: 2009, Household Economic Studies, May 2011, p.14

(average duration of marriages in the United States was eight years).

Footnote 16:This court acknowledges the wife's argument that the husband never suggests that the husband asked to be put on the deed and the wife refused. The husband knew that the wife had refinanced the property on at least two occasions and he apparently never asked, at either of these instances, to be put on the deed. There is no alleged act by the wife that ever suggests that she had such an intention. But, these factual assertions, if proven at trial, would simply be factors to be weighed by the court in deciding whether the husband had met his burden of proof.

Footnote 17:Sharp v Kosmalski, 40 NY2d quoting Beatty v Guggenheim Exploration Co., 225 NY 380, 386; Rowe v Kingston, 94 AD3d 852, 853; Poupis v Brown, 90 AD3d 881, 882; Fortunato v. Fortunato, 2013 NY Misc LEXIS 4938 (Sup. Ct. Kings Cty. 2013).

Footnote 18:In Reiner v. Reiner, the names of the husband's parents were listed on the deed in order to secure a guarantee for the mortgage, but the court held that the listing was solely for the convenience of the mortgagee and implied a promise from the parents to convey the property to the couple. Reiner v. Reiner, 100 AD2d 872, 874 (2nd Dept. 1984).

Footnote 19:In a case involving hip-hop artist "50 Cent," the court refused to find a constructive trust even though his girlfriend had shopped for the house with him and negotiated the purchase price. Tompkins v. Jackson, 22 Misc 3d 1128 (A) (Sup. Ct. New York Cty. 2009). But see Gottlieb v Gottlieb, 166 AD2d 413 (2nd Dept. 1990) (court imposed constructive trust on a home because spouse (1) "jointly shopped for, negotiated for and purchased the land upon which the said home was constructed," (2) "jointly planned" and "supervised" the "physical layout and construction of the said home," (3) "contributed financially to the improvement of, maintenance and upkeep of the said home," and (4) she invested her labor and money in reliance upon the decedent's promise that he would put the deed in both of their names. The facts in the present case lean closer to Gottlieb v. Gottlieb than Tompkins v. Jackson.

Footnote 20:The claim that the husband made improvements, paid down the mortgage, and performed repairs at the first house and later at the second is not as persuasive as his claim for a transfer based on the advance of the down payment. See Henning v. Henning, 103 AD3d at 780 (the payment of such operating expenses or the provision of repairs can be considered rent and do not qualify as expenditures in reliance on the promise to convey title).

Footnote 21:If the court concluded that the husband got some enrichment because he lived in a bigger house than he could otherwise afford during the period from 2003 until the commencement of the divorce, how would the court calculate the amount of his "enrichment" or the wife's "unjust enrichment?" Could the court determine that the wife was "unjustly enriched" in an amount less than the $66,000? What if the net equity, after the sale of the house occurs, is less than $66,000? These complex proof questions, springing from the recognition of a constructive trust, remain for another day.

Footnote 22:Although not raised at this time, the husband may have a claim, under equitable distribution, for his work in maintaining and improving the house, even without holding title. See Johnson v. Chapin, 12 NY3d 461, 466 (2009)(appreciation is subject to equitable distribution if non-titled spouse makes direct nonfinancial contributions, such as by personally maintaining, making improvements to, or renovating a marital residence).

Footnote 23:The unjust enrichment of the wife because she accumulated funds in her retirement is resolved, in part, because the husband's marital share of the retirement funds has increased and, presumably, he will recover that "enhanced" share when equitable distribution occurs.

Footnote 24:See Palermo v. Palermo, 100 AD3d 1453 (4th Dep't 2013).