Cates v. Swain, 2010–CT–01939–SCT.

• Decision Date: 02 May 2013
• Docket Number: No. 2010–CT–01939–SCT.,2010–CT–01939–SCT.
• Parties: Mona CATES v. Elizabeth SWAIN.
• Court: Mississippi Supreme Court

215 So.3d 492

Mona CATES

v.Elizabeth SWAIN.

No. 2010–CT–01939–SCT.

Supreme Court of Mississippi.

May 2, 2013.

Rehearing Denied June 27, 2013.

Jonathan S. Masters, Clarksdale, Robert M. Stephenson, attorneys for appellant.

John Thomas Lamar, Jr., David Mark Slocum, Jr., Senatobia, attorneys for appellee.

EN BANC.

ON WRIT OF CERTIORARI

CHANDLER, Justice, for the Court.

¶ 1. Elizabeth Swain and Mona Cates cohabited from 2000 until 2006. After they severed the relationship, Swain filed an action seeking the repayment of funds she first had invested in property in Washington, which were then used to purchase a residence in Tate County. The chancellor rejected Swain's claim of a constructive trust or a resulting trust. The chancellor found that Cates had been unjustly enriched by Swain's contributions and awarded Swain a judgment in that amount. The Court of Appeals affirmed the chancellor's rejection of the trust claim but reversed the decision of the chancellor, which was based on unjust enrichment. The Court of Appeals held that, because "cohabitation alone cannot form the basis of an equitable remedy between non-married cohabitants," the remedy of unjust enrichment was outside the bounds of the chancery court's equitable powers. Cates v. Swain, 116 So.3d 1073, at 1080 (Miss.Ct.App.2012).

¶ 2. We find that the chancellor was empowered to award relief on the basis of unjust enrichment. We affirm the judgment of the Court of Appeals to the extent that it affirmed the chancellor's rejection of Swain's claim of a constructive trust or a resulting trust. We reverse the judgment of the Court of Appeals with regard to the unjust-enrichment award. Because the chancellor made a mathematical error in the calculation of the unjust-enrichment award, we vacate the chancellor's judgment in part, and remand the case to the chancery court for entry of judgment in the correct amount of $41,495.

FACTS

¶ 3. In 2000, Swain and Cates met though an online dating service and began a relationship while living in different states. Swain was in the Navy and worked as an oceanographer, and Cates was a commercial airline pilot based in New York, New York, where she maintained a separate residence. During the entirety of her relationship with Cates, Swain was married and estranged from her husband. Swain testified that she remained married so that her husband could remain covered under her medical insurance policy, and so that Swain could claim a larger housing allowance from the Navy than she would have been entitled to as a single individual. Swain divorced after her relationship with Cates had ended.

¶ 4. In late 2000, Swain transferred to Pensacola, Florida, and bought a house there. Cates provided $2,000 in earnest money toward the purchase of the house, residing there and in New York. Swain made the monthly mortgage payments and significantly paid down the principal. The two made improvements to the house.

¶ 5. In 2003, Swain and Cates moved to Seattle, Washington. Cates bought a home in Seattle, where the two cohabitated. Swain sold the Florida home and received $32,000 in equity. Swain testified that she gave Cates a check for $34,000, representing the equity in the Florida home, plus an extra $2,000 from Swain's personal checking account as an investment. Swain testified that Cates used this money for the down payment on the Washington home, which Cates purchased for $191,000. In contrast, Cates testified that the check was repayment for undocumented loans. Swain and Cates made various improvements to the Washington home, and in 2005 the residence sold for $300,000.

¶ 6. In 2005, Cates and Swain moved to Tate County, Mississippi, where Cates bought a home for $350,000, using the equity from the sale of the Washington home. Swain provided Cates a check for $5,000 with "closing costs" written in the memo line. She also paid $4,495 to carpet the home. Again, Cates characterized these expenditures as repayments for undocumented loans to Swain.

¶ 7. Subsequently, the parties' relationship deteriorated, and Swain moved out in March 2006. On June 13, 2006, Swain filed a complaint against Cates, alleging that they had been cohabitants, that they had been involved in several joint ventures together, and that they had entered into an agreement for Swain to invest the proceeds from the sale of her Florida home into future purchases of real property in Washington and Mississippi. Swain requested that the chancery court declare a constructive trust or a resulting trust in the Mississippi home, and that Cates had been unjustly enriched.

¶ 8. The chancellor rejected Swain's claims of a constructive trust or a resulting trust. The chancellor found that Cates had been unjustly enriched by Swain's investment contributions. The chancellor rejected Cates's unsupported assertions that these contributions were merely loan repayments. The chancellor found Swain was entitled to recover the equity from her Florida home. The chancellor awarded Swain $38,000, minus $2,500.¹ The chancellor also found that Swain was entitled to recover the $5,000 she had tendered to Cates for closing costs on the Mississippi home and the $4,495 she had spent to carpet Cates's Mississippi home. The chancellor entered a judgment in the amount of $44,995 in favor of Swain.

¶ 9. The Court of Appeals reversed. Cates, 116 So.3d 1073, at 1082–83. The Court of Appeals reviewed our prior cases pertaining to unmarried cohabitants, and concluded that "Mississippi does not enforce contracts implied from the relationship of unmarried cohabitants." Id. at 1077–78. Therefore, the Court of Appeals held that the chancellor had lacked the authority to grant the remedy of unjust enrichment. Id. at 1080–81. This Court granted Swain's petition for certiorari to review the legal question of whether the remedy of unjust enrichment was available to Swain. We find that, in the particular circumstances, the chancellor did not err by granting relief on the basis of unjust enrichment.

STANDARD OF REVIEW

¶ 10. This Court will not reverse a chancellor's fact-findings unless they were manifestly wrong, clearly erroneous, or the chancellor abused his discretion. Smith v. Wilson, 90 So.3d 51, 56 (Miss.2012) (quoting Zeman v. Stanford, 789 So.2d 798, 801–02 (Miss.2001) ). We review questions of law de novo. Smith, 90 So.3d at 56.

ANALYSIS

¶ 11. Unjust enrichment "applies to situations where there is no legal contract and ‘the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain but should deliver to another.’ "

Miss. Dep't of Envtl. Quality v. Pac. Chlorine, Inc., 100 So.3d 432, 442 (Miss.2012) (quoting Powell v. Campbell, 912 So.2d 978, 982 (Miss.2005) ). In these circumstances, equity imposes "a duty to refund the money or the use value of the property to the person to whom in good conscience it ought to belong." Estate of Johnson v. Adkins, 513 So.2d 922, 926 (Miss.1987). The amount of recovery for unjust enrichment is "that to which the claimant is equitably entitled." Id.

¶ 12. The chancellor found that Cates had been unjustly enriched by Swain's contributions to the Mississippi home, which consisted of Swain's proceeds gained from the sale of her Florida home, the $5,000 Swain contributed at closing, and the $4,495 Swain had paid to carpet the Mississippi home. The Court of Appeals concluded that the remedy of unjust enrichment was not available to Swain as an unmarried cohabitant. Cates, 116 So.3d 1073, at 1080–81. The Court of Appeals primarily relied upon Davis v. Davis, 643 So.2d 931 (Miss.1994), and Estate of Alexander v. Alexander, 445 So.2d 836 (Miss.1984), to reach this conclusion. Cates, 116 So.3d 1073, at 1078–79.

¶ 13. We find Davis and Alexander to be distinguishable from this case. In Davis, the unmarried parties separated, and the woman, Elvis Davis, sought an equitable distribution of assets. Davis, 643 So.2d at 932. Travis Davis had amassed considerable wealth, and Elvis argued that, by virtue of her efforts in her live-in, long-term relationship with Travis, she was entitled to an equitable division of assets. Id. at 933. The Court disagreed, noting that the Legislature has not extended the rights enjoyed by married people to those who cohabit. Id. at 936.

¶ 14. In Estate of Alexander v. Alexander, 445 So.2d 836 (Miss.1984), Margie and Sam Alexander had cohabitated for thirty years in a house owned by Sam. Id. at 837. When Sam died, Margie petitioned the court for a life estate in the residence. Id. The Court found that the Legislature had made no provision for a person in Margie's situation, and that "a mere ‘live-in’ relationship ... cannot be allowed to negate the law of descent and distribution." Id. at 839 (emphasis added). The Court also found that Margie could not recover under an implied-contract theory because no evidence established the existence of an implied contract between Margie and Sam. Id. at 840.

¶ 15. In both Davis and Alexander, the aggrieved party's claim for recovery was based upon a relationship. Both claims were for equitable division of property. In Davis, the Court rightly noted that cohabitation is prohibited as against public policy and that the Legislature has not extended the rights of married persons to cohabitants, nor do we today. In this case, Swain's claim was not one for equitable division. Swain made a claim, inter alia, for unjust enrichment based upon her monetary contributions to Cates's purchase of the Washington home and the purchase and improvement of the Mississippi home, which Cates retained after Swain moved from the residence. Ultimately, the chancellor adjudicated the case on that theory of relief, and we find no error in the chancellor's legal conclusion.

¶ 16. True, as Presiding Justice Dickinson indicates in his separate opinion, Swain's unjust-enrichment claim was predicated on her assertion that Swain and Cates had entered into an agreement that Swain would invest the proceeds from the...