Ashby v. Ashby
| Decision Date | 09 February 2010 |
| Docket Number | No. 20080737.,20080737. |
| Citation | 227 P.3d 246,2010 UT 7 |
| Parties | Gloria Hayley ASHBY, Plaintiff and Respondent, v. Dallen Ben ASHBY, Defendant and Petitioner. |
| Court | Utah Supreme Court |
Scott P. Card, Matthew R. Howell, Provo, for plaintiff.
David J. Hunter, Orem, for defendant.
On Certiorari to the Utah Court of Appeals
INTRODUCTION
¶ 1 This case is before us on writ of certiorari to the court of appeals and requires us to consider whether a divorcing spouse may bring claims for (1) unjust enrichment based on her support of her spouse's educational efforts and (2) breach of contract based on her promise to support her spouse's education efforts in exchange for the promise of a higher standard of living in the future (a "student support contract"). We determine that a divorcing spouse's claim for unjust enrichment based on support of a student spouse is barred by our rejection of the remedy of equitable restitution in Martinez v. Martinez.1 But we hold that Martinez does not bar claims for breach of a student support contract, and that such claims are permissible provided they are brought within the divorce action.
¶ 2 Gloria and Dallen Ashby were married on December 6, 1997, while Dallen was finishing his undergraduate studies at Brigham Young University in preparation for applying to medical school. While Dallen was completing his undergraduate education, Gloria worked as the family's primary financial provider. Gloria contends that, during this time, she and Dallen entered into a binding contract under which she agreed to support him while he attended medical school in exchange for Dallen's promise to support "her at a certain level with the income he would earn as the holder of a medical degree."
¶ 3 After Dallen obtained his undergraduate degree, he was accepted into medical school at the University of St. Louis. Gloria moved with Dallen to St. Louis and claims that this required her to forego a lucrative business opportunity in Utah. Dallen attended medical school in St. Louis from 2000 to 2004. During his time in medical school, Dallen paid for his tuition and books by taking out student loans that he is solely responsible to repay. While Dallen attended school, Gloria worked as an interior designer, and her income provided for most of the couple's day-to-day living expenses.
¶ 4 Gloria and Dallen separated in May 2005, shortly after Dallen began a one-year medical internship in St. Louis. Gloria filed for divorce on October 11, 2005 in Utah. In addition to a cause of action for divorce, her complaint included a breach of contract claim based on the couple's alleged support agreement.
¶ 5 Gloria's case was initially assigned to the Third District. The district court bifurcated Gloria's claims for divorce and breach of contract. It entered a decree of divorce on April 12, 2006 and reserved the breach of contract claim for trial. Dallen then filed a motion to dismiss Gloria's contract claim. Gloria responded to Dallen's motion and amended her complaint to add a cause of action for unjust enrichment.
¶ 6 Before the district court ruled on the motion to dismiss, the case was transferred to the Fourth District. There, Judge Howard, upon recommendation by Commissioner Patton, dismissed Gloria's contract and unjust enrichment claims for improper joinder. Gloria then refiled her dismissed claims in a separate action, assigned to Judge Hansen. Dallen again brought a motion to dismiss. The district court granted Dallen's motion, ruling that Gloria's contract claim violated the statute of frauds and that her unjust enrichment claim was barred by our holding in Martinez.
¶ 7 The court of appeals reversed the district court's dismissals.2 First, the court of appeals noted that the procedural posture of the case prohibited dismissal based on the statute of frauds.3 The court reasoned that, since Gloria had not pleaded all the facts necessary to determine that the alleged contract violated the statute of frauds, dismissal on that ground was improper without further discovery.4 Second, the court distinguished Gloria's claims for breach of contract and unjust enrichment from the equitable restitution claim we rejected in Martinez, stating that "Martinez only bars self-standing equitable allocations and not claims based on express contract or unjust enrichment."5
¶ 8 Dallen petitioned for certiorari review by this court, which we granted to determine whether the court of appeals erred in its assessment of the availability of claims for unjust enrichment and breach of contract in the context of Dallen's motion to dismiss. We have jurisdiction pursuant to section 78A-3-102(3)(a) of the Utah Code.
¶ 9 On certiorari, we review the court of appeals' decision to determine whether the court of appeals correctly reviewed the decision of the district court.6 A district court should only grant a motion to dismiss when a plaintiff is not entitled to relief either "`under the facts alleged or under any state of facts they could prove to support their claim.'"7 Accordingly, when determining whether to grant a defendant's motion to dismiss, a court must assume the truth of the allegations in the pleadings and draw all reasonable inferences from those allegations in favor of the plaintiff.8
¶ 10 The parties in this case dispute both the effect of Martinez on Gloria's claims and what conditions, if any, should be placed on the enforcement of student support contracts between divorcing spouses. We begin by assessing the impact of Martinez on Gloria's unjust enrichment and breach of contract claims. We first conclude that the rationale underlying our rejection of equitable restitution in Martinez is equally applicable to Gloria's claim for unjust enrichment. We determine, however, that our decision in Martinez does not preclude Gloria's contract claim. Because we find that Martinez does not bar the enforcement of student support contracts, we next analyze the conditions under which student support contracts may be enforced by divorcing spouses. We conclude that claims for breach of such contracts are permissible, provided that they satisfy the normal conditions imposed on postnuptial contracts and that such claims are brought within the divorce action.
¶ 11 Gloria argues that Dallen has been unjustly enriched by her efforts to support him during medical school and that she is, therefore, entitled to be compensated for the value of the benefit she conferred on him. Gloria asserts that her case is distinguishable from Martinez because she, in contrast to the plaintiff in Martinez, alleges the existence of an actual contract. Although the presence of an actual contract casts Gloria's case in a somewhat different light from Martinez, Gloria's claim for unjust enrichment is nonetheless materially indistinguishable from the claim for equitable restitution we rejected in Martinez.
¶ 12 Martinez, like the present case, arose out of a divorce that occurred shortly after one spouse graduated from medical school.9 The plaintiff in Martinez sought a share in the future increased earnings from her spouse's medical degree.10 While the court of appeals declined the plaintiff's invitation to treat the medical degree as property subject to division, it nevertheless allowed the plaintiff to recover under a theory of "equitable restitution" based on contributions made to the family during the spouse's educational period.11
¶ 13 We reversed the court of appeals, declining to recognize the remedy of equitable restitution because (1) it treated marriage as "a venture akin to a commercial partnership," (2) recovery under the remedy would be "extraordinarily speculative," and (3) equitable restitution was "essentially indistinguishable" from treating an advanced degree as marital property.12 Although we recognized the equities involved in student support situations, we reasoned that the concept of alimony was broad enough to take the equitable concerns presented in Martinez into account. We stated that "if one spouse's earning capacity has been greatly enhanced through the efforts of both spouses during the marriage, it may be appropriate for the trial court to make a compensating adjustment in dividing the marital property and awarding alimony."13
¶ 14 Unjust enrichment "is an action initiated by a plaintiff to recover payment for labor performed in a variety of circumstances in which that plaintiff, for some reason, would not be able to sue on an express contract."14 A claim for unjust enrichment is an action brought in restitution,15 and a prerequisite for recovery on an unjust enrichment theory is the absence of an enforceable contract governing the rights and obligations of the parties relating to the conduct at issue. If there were a contract, it, rather than the law of restitution, would govern the parties' rights and determine their recovery.16 "Recovery under [unjust enrichment] presupposes that no enforceable written or oral contract exists."17
¶ 15 Accordingly, by the very nature of the cause of action, Gloria's claim for unjust enrichment is predicated on the assumption that there is no enforceable contract between her and Dallen. It is, then, essentially an alternative basis for recovery in the event her contract claim fails. And because Gloria's unjust enrichment claim is premised on the nonexistence of an enforceable contract between her and Dallen, it is, in reality, nothing more than a rewording of the equitable restitution claim we rejected in Martinez. Our rationale for rejecting the equitable restitution claim in Martinez did not hinge on the fact that the plaintiff had not alleged the existence of an express contract. Accordingly, our reasoning...
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