Cates v. Swain

• Decision Date: 14 August 2012
• Docket Number: No. 2010–CA–01939–COA.,2010–CA–01939–COA.
• Citation: 116 So.3d 1073
• Parties: Mona CATES, Appellant/Cross–Appellee v. Elizabeth SWAIN, Appellee/Cross–Appellant.
• Court: Mississippi Court of Appeals

116 So.3d 1073

Mona CATES, Appellant/Cross–Appellee

v.Elizabeth SWAIN, Appellee/Cross–Appellant.

No. 2010–CA–01939–COA.

Court of Appeals of Mississippi.

April 17, 2012.

Rehearing Denied Aug. 14, 2012.

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

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

Before IRVING, P.J., MAXWELL and RUSSELL, JJ.

MAXWELL, J., for the Court:

¶ 1. Mona Cates and Elizabeth Swain were involved in an intimate relationship with one another and cohabited for over five years in three different states. After Swain moved out of Cates's Tate County, Mississippi, home, Swain sued Cates seeking various equitable remedies.

¶ 2. We affirm the chancellor's denial of Swain's claim that, based on their living arrangement, Swain was entitled to an interest in Cates's house through a constructive and/or resulting trust. But we hold the chancellor exceeded his discretion in finding Cates had been unjustly enriched by Swain's financial contributions during their cohabitation. An action for unjust enrichment is based on an implied contract. And the Mississippi Supreme Court has refused to circumvent the Mississippi Legislature's abolishment of common law marriage by extending implied contractual remedies to unmarried cohabitants. Similarly, this court is restrained from delving into policy issues of this nature and extending implied contractual remedies to unmarried cohabitants, whether opposite-sex or same-sex, when there is no express agreement for remuneration beyond cohabitation. We, therefore, reverse the $44,995 unjust-enrichment award and render judgment in Cates's favor.

FACTS AND PROCEDURAL HISTORY

¶ 3. Cates is a commercial pilot, and Swain, until her 2005 retirement, was a meteorologist and oceanographer for the Navy. In 2000, while living in separate states, they met online through a website for people seeking same-sex partners. Swain stated in her profile that she was single. But Cates later learned Swain was married and her estranged husband lived in another state. At trial, Swain admitted her marital status entitled her husband to coverage under her medical insurance policy. By being married, Swain also benefitted by claiming a greater housing allowance from the Navy. Swain did not divorce her husband until after she retired and ended her relationship with Cates.

I. Florida Home

¶ 4. At the end of 2000, Swain transferred to Pensacola, Florida. Swain bought a house in Pensacola and titled it in her name solely, though she was required to list her husband on her mortgage. Cates provided $2,500 in earnest money. And Swain paid the mortgage, significantly paying down the principal. Cates lived with Swain and traveled for work. Both women made improvements to the home. They opened a joint checking account, but Swain testified only Cates made financial contributions. Cates also paid $11,000 to trade in Swain's Toyota SUV for a Mercedes. They also purchased other vehicles jointly titled in both of their names.

¶ 5. When asked at trial why they set up joint accounts, Swain testified because “we trusted each other. We had a mutual relationship that we were investing together in.” After the September 11, 2001 terrorist attacks, Cates set up an E-trade investment account in both of their names as a joint tenancy with right of survivorship. Cates testified she was concerned as a commercial pilot that something might happen to her and wanted Swain to have access to the money.

¶ 6. In 2003, Swain transferred to Seattle, Washington. She sold the Florida home and received approximately $32,000 in equity.

II. Washington Home

¶ 7. Cates, who flew to Seattle for work, moved to Washington with Swain. Cates purchased a home in Washington for approximately $200,000. Swain gave Cates a check for $34,000 representing the equity from the Florida home plus additional money from their joint Florida account. Cates testified this was a loan repayment for the more than $34,000 Cates had given Swain during their time in Florida—an assertion the chancellor found unsupported. Cates purchased the house in her name only. Swain testified she did not want her name on the title because she was still married and “wasn't going to take that chance.” Swain lived in the Washington home without paying rent or mortgage payments but testified she made various improvements to the house. After two years, Cates sold the Washington house for $300,000.

III. Mississippi Home

¶ 8. In 2005, the two returned to Cates's native Mississippi where Cates purchased a home in Tate County for $350,000. While Cates involved Swain in selecting a home, Cates bought the house in her name only. But Swain provided a check for $5,000, with “closing costs” written in the memo line. Swain also paid $4,449 to carpet the home.

¶ 9. After moving to Mississippi, the women's relationship deteriorated. Swain ultimately moved out of the Mississippi house in March 2006. Immediately after, Swain attempted to liquidate the E-trade account. Cates learned of the stock sale and directed E-trade to deposit the proceeds in her own bank account. When asked why she tried to withdraw money from the account, Swain testified it was “because I ended up with absolutely nothing financially from what I had invested, and so honestly, I was trying to get something back.”

IV. Lawsuit

¶ 10. In June 2006, Swain sued Cates in the Tate County Chancery Court. Swain alleged she and Cates “were cohabitants prior to and at the time of delivery of the [Mississippi home] deed” and they “were partners and were in several joint ventures together.” She also alleged they had “entered into an agreement by and between themselves that [Swain] would invest the proceeds from her sale of her real property in the state of Florida towards future purchases of real property in the states of both Washington and Mississippi in order to provide both [Swain] and [Cates] with a residence.” Swain requested the court declare a constructive and/or resulting trust exists in the Mississippi home and that Swain be reimbursed for her investments in both the Washington and Mississippi houses.

¶ 11. Cates moved to dismiss the complaint, arguing the requested relief “violates the Mississippi Constitution's prohibition against homosexual marriage.” The chancellor denied the motion. He found, while the Mississippi Constitution only recognizes marriage between a man and woman, the issues before him concerned a constructive and/or resulting trust and unjust enrichment.

¶ 12. The Mississippi Supreme Court denied Cates's request for an interlocutory appeal, and the case proceeded to trial. The chancellor found Cates and Swain were in a confidential relationship but Cates had not abused that confidence. Thus, he denied a constructive trust. The chancellor also held insufficient evidence of a resulting trust existed because there was no evidence title to the Florida, Washington, or Mississippi properties was to be held by Cates for Swain's benefit. So he rejected Swain's request that Cates be divested of a portion of her interest in the Mississippi home.

¶ 13. But the chancellor found Cates had been unjustly enriched. He found, based on their living arrangements in Florida and Washington, Swain was entitled to recoup her equity in the Florida home, which she had given to Cates. The chancellor awarded Swain $38,000, less the $2,500 Cates paid as earnest money on the Florida home.¹ The chancellor also found “the payment of $5,000 for the closing of the Tate County, Mississippi, property [fell] into this same category” because this money was “clearly not an inter vivos” gift but was instead made with “some reasonable expectation of some return by repayment or otherwise.” The chancellor credited neither party for improvements they made to each other's home because both enjoyed the use of the others' properties for extended periods of time. The one exception was the $4,449 in carpeting in the Mississippi home because “Swain was able to reap the benefits of that contribution for only a very short period of time before leaving the residence with the full blessing and prodding of Cates only three months after its installation[.]” In total, the chancellor awarded Swain a judgment of $44,995 ² to be paid by Cates in cash.

ISSUES ON APPEAL

¶ 14. Cates appeals the judgment against her, arguing the $44,995 award is nothing more than “monetary relief from the dissolution of [the couple's] five year lesbian relationship.” She claims the relief granted violates Mississippi's public policy and asks that this court reverse the award and render judgment in her favor.

¶ 15. Swain cross-appeals and seeks de novo review of the chancellor's denial of a constructive and/or resulting trust. She claims an equitable division of this trust entitles her to “a minimum sum of $76,755.56” plus attorney's fees—which is equivalent to 22% interest in the Mississippi property. Alternatively, Swain argues the chancellor's unjust enrichment award should be affirmed.

DISCUSSION

¶ 16. Cates and Swain take opposite approaches on the effect of their same-sex relationship and cohabitation on Swain's equitable claims. Swain suggests the nature of their relationship is irrelevant, while Cates argues it precludes Swain from equitable recovery because Swain's claims are marriage-based remedies in disguise.

I. Nature of Cates and Swain's Relationship

¶ 17. Though Swain alleged her living arrangement with Cates was a “joint venture,” the chancellor found no business partnership existed. See Hults v. Tillman, 480 So.2d 1134, 1142 (Miss.1985) (“broadly defin[ing] a joint venture as an association of persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, efforts, skill and knowledge”); see alsoMiss.Code Ann. § 79–13–202(a) (Rev. 2009) (“[A] business for profit forms a partnership [.]”); Miss.Code Ann. § 79–13–202(c)(1) (Rev. 2009) (Common...