Carroll v. Lee

• Decision Date: 06 January 1986
• Docket Number: No. 18382-PR,18382-PR
• Citation: 148 Ariz. 10,712 P.2d 923
• Parties: , 54 USLW 2431 Judith (Lee) CARROLL, Appellee, v. Paul T. LEE, Appellant.
• Court: Arizona Supreme Court

Page 923

712 P.2d 923

148 Ariz. 10, 54 USLW 2431

Judith (Lee) CARROLL, Appellee, v. Paul T. LEE, Appellant.

No. 18382-PR.

Supreme Court of Arizona, In Banc.

Jan. 6, 1986.

Reconsideration Denied Feb. 12, 1986.

Leighton Rockafellow, Tucson, for appellee.

Aboud & Aboud, P.C., Tucson, by Michael Aboud, for appellant.

GORDON, Vice Chief Justice.

Judith Carroll (Judy) has petitioned this Court for review of a decision of the court of appeals reversing the trial court's judgment granting her request of partition of certain real and personal property. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and Rule 23, Ariz.R.Civ.App.P.

Judith Carroll, aka Judith Lee cohabited with Paul T. Lee for fourteen years ultimately settling in Ajo, Arizona. They went their separate ways in 1982. The couple did not marry nor ever seriously contemplate marriage. However, they did hold themselves out as husband and wife and Judy assumed Lee as her surname. Little personal property was owned by either party prior to the relationship and neither owned any real property. Throughout the course of the relationship the couple jointly acquired three parcels of real estate, several antique or restored automobiles, a mobile home and various personal property. The parties filed joint tax returns as husband and wife several times.

Paul is a mechanic by trade and operates an automobile repair shop in Ajo on a parcel of land acquired during the relationship. He supplied the vast majority of the money used to sustain the couple, while Judy kept the house (cleaning, cooking, laundry, working in the yard). Occasionally Judy helped Paul at the shop with billing and bookkeeping. The couple had a joint checking account out of which Judy paid the household bills. Paul did not utilize the account, preferring to deal in cash or money orders in his business.

The real property was titled to the couple in one of three ways. Title was held either, 1) as joint tenants with the right of survivorship, 2) as husband and wife, or 3) as husband and wife as joint tenants with the right of survivorship. The various automobiles and mobile home were all titled to Paul T. Lee or Judith E. Lee.

Judy was self-employed for approximately five years from 1978 to 1982 as a photographer/dark room technician. She made little money; most of it went back into the business. However, some was spent on the household. "Photos by Judy" had a separate business account with Judy the only signatory. After the parties "split up" Judy filed a partition action pursuant to A.R.S. § 12-1211.

A bench trial was held and both parties testified. The trial court, in an amended judgment, essentially awarded each party a one-half interest in the real and personal property that was acquired by the couple during their relationship. The trial court found the following:

"A contract existed and exists between the parties. While said contract is not in writing, the Court finds that the contract was assiduously and scrupulously adhered to by both parties in the repeated acquisition of properties and the repeated taking of title to properties in both names, pursuant to the contract. The Court further finds that gifts to and from each, to and from the other, pursuant to this same silent contract, of time, money, labor, sharing of duties, and the like constituted an equal sharing of the cost of the acquisitions of the various properties."

Paul appealed the decision of the trial court. The court of appeals reversed the award primarily on its interpretation of Cook v. Cook, 142 Ariz. 573, 691 P.2d 664 (1984). See Carroll v. Lee, 148 Ariz. 21, 712 P.2d 934 (1985). The court found that no valid agreement existed and that Judy held the property in a resulting trust for Paul's benefit. We believe the court of appeals construed the holding in Cook too narrowly and relied erroneously on Becchelli v. Becchelli, 109 Ariz. 229, 508 P.2d 59 (1973).

In Cook v. Cook, supra, we exhaustively reviewed agreements between non-married cohabitants. The agreement approved of in Cook was one between unmarried cohabitants to pool income, acquire assets and share in the accumulations. 142 Ariz. at 576, 691 P.2d at 667. We compiled basic concepts of contract law:

"The sine qua non of any contract is the exchange of promises. Restatement (Second) of Contracts § 1 (1981). From this exchange flows the obligation of one party to another. 1 Williston on Contracts § 1 at 2 (1957). Although it is most apparent that two parties have exchanged promises when their words express a spoken or written statement of promissory intention, mutual promises need not be express in order to create an enforceable contract. Restatement (Second) of Contracts § 4. Indeed, a promise 'may be inferred wholly or partly from conduct,' id., and 'there is no distinction in the effect of the promise whether it is expressed in writing, or orally, or in acts, or partly in one of these ways and partly in others.' Id. § 19, comment a. See also Arizona Board of Regents v. Arizona York Refrigeration Co., 115 Ariz. 338, 341, 565 P.2d 518, 521 (1977). Thus, two parties may by their course of conduct express their agreement, though no words are ever spoken. From their conduct alone the finder of fact can determine the existence of an agreement. Restatement (Second) of Contracts § 4; 1 A. Corbin, Contracts, § 9 at 20-21 (1963). See also Malcoff v. Coyier, 14 Ariz.App. 524, 484 P.2d 1053 (1971)."

142 Ariz. at 576, 691 P.2d at 667.

The court of appeals found that

"... no evidence, in words or conduct, suggests mutual promises to contribute funds to a pool in the instant case. On the contrary, the implied agreement specifically described and delimited by the conduct of the parties in this case was an exchange of unlike services: one cohabitant's homemaking services for the other's monetary support."

712 P.2d at 935. (emphasis in original).

Further the court stated,

"There is no evidence of an agreement express or implied which could be read: he went to work, I stayed home, and we agreed to pool our assets and share our accumulations. Without the later element in the agreement we do not approach the Cook v. Cook, supra, situation."

at 935-936. (emphasis in original).

We disagree with the above reasoning and now reach the unanswered question from Cook as to whether an agreement between unmarried cohabitants with homemaking services severable from a meretricious relationship as consideration can stand. In Arizona we recognize implied contracts, Arizona Bd. of Regents v. York Refrigeration Co., 115 Ariz. 338, 341, 565 P.2d 518, 521 (1977), and there is no difference in legal effect between an express contract and an implied contract. Swingle v. Myerson, 19 Ariz.App. 607, 609, 509 P.2d 738, 740 (1973). An implied contract is one not created or evidenced by explicit agreement, but inferred by the law as a matter of reason and justice from the acts and conduct of the parties and circumstances surrounding their transaction. Alexander v. O'Neil, 77 Ariz. 91, 98, 267 P.2d 730, 734 (1954). Furthermore, in this state monetary consideration is not always required as consideration. Adequate consideration consists of a benefit to the promisor and a detriment to the promisee. Cavanagh v. Kelly, 80 Ariz. 361, 363, 297 P.2d 1102, 1103 (1956); Mack v. Coker, 22 Ariz.App. 105, 107, 523 P.2d 1342, 1344 (1974). Clearly a promise for a promise constitutes adequate consideration, K-Line Builders Inc. v. First Federal Savings and Loan Ass'n, 139 Ariz. 209, 212, 677 P.2d 1317, 1320 (App.1983), and consideration need not be of like or identical value. Taylor v. Kingman Feldspar Co., 41 Ariz. 376, 381, 18 P.2d 649, 651 (1933).

Mutuality of obligation is a requirement for a valid contract; however, mutuality is absent when only one of the contracting parties is bound to perform. Keck v. Brookfield, 2 Ariz.App. 424, 427, 409 P.2d 583, 586 (1965). When there are mutual promises between parties, as implied here, it is not necessary in order to render a particular promise by one party binding on the other party that there be a special promise on the part of the other party directed to that particular obligation. Id.; Taylor v. Kingman Feldspar Co., supra, 41 Ariz. at 381, 18 P.2d at 651 (1933). Furthermore, it is of no consequence that the parties exchanged "unlike services". Any performance which is bargained for is consideration, Restatement (Second) of Contracts, § 72, and courts do not ordinarily inquire into the adequacy of consideration. Id.; Restatement (Second) of Contracts, § 78, comment a.

Paul received the cooking, cleaning and household chores he bargained for while Judy received monetary support. Together they were able to acquire property through their joint efforts. Clearly Judy's homemaking services can be valued and constituted adequate consideration for the couple's implied agreement. See Bruch, "Property Rights of De Facto Spouse Including Thoughts on The Value of Homemakers' Services," 10 Family Law Q. 101 (1976). This is not a case of gross inadequacy of consideration on either party's part. "To the extent that the apportionment of productive energy and product in the economy are left to private action, the parties to transactions are free to fix their own evaluations". Restatement (Second) of Contracts, § 79, comment c. In the instant case each party gave up something of economic value and received something of economic value. See Bruch, supra, at 122-23 ("... it is clear that if services which are granted by one party to another have economic value so that the second person need not expend money to secure them elsewhere, the financial base of the second party is enhanced").

We agree with the court in Marvin v. Marvin, 18 Cal.3d 660, 134 Cal.Rptr. 815, 557 P.2d 106 (1976) in that "homemaking", severable from the meretricious relationship can support an implied agreement as between two parties. It is important to note that Judy does not claim the...