Flood v. Kalinyaprak

• Citation: 2004 MT 15,319 Mont. 280,84 P.3d 27
• Decision Date: 28 January 2004
• Docket Number: No. 03-165.,03-165.
• Parties: Debra J. FLOOD, formerly Debra J. Cook, Plaintiff and Appellant, v. Murat KALINYAPRAK, Defendant and Respondent.
• Court: United States State Supreme Court of Montana

84 P.3d 27

2004 MT 15

319 Mont. 280

Debra J. FLOOD, formerly Debra J. Cook, Plaintiff and Appellant, v. Murat KALINYAPRAK, Defendant and Respondent.

No. 03-165.

Supreme Court of Montana.

Submitted on Briefs January 6, 2004.

Decided January 28, 2004.

For Appellant: Keith W. McCurdy, McCurdy Law Firm, P.C., Polson, Montana.

For Respondent: Philip J. Grainey, French & Grainey Law Firm, Ronan, Montana.

Justice JOHN WARNER delivered the Opinion of the Court.

¶ 1 Debra Flood (Debra) appeals from an order of the Twentieth Judicial District Court, Lake County, equally dividing the proceeds of real estate assets she held as a tenant in common with Murat Kalinyaprak (Murat). We affirm in part, reverse in part and remand for entry of judgment consistent with this Opinion.

¶ 2 We address the following issues on appeal:

¶ 3 Did the District Court apply the correct standard to the division of assets held as tenants in common by an unmarried couple in a partition action?

¶ 4 Were the District Court's findings of fact clearly erroneous?

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 Debra and Murat met in 1986 in California. In 1992, their relationship became more serious and the two decided to live together. After moving to Montana, Debra continued her business buying, remodeling, and selling real estate, while Murat started a business called Computerman. They agreed that Debra would finance housing for the parties while Murat would pay for the other living expenses. They opened a joint checking account to facilitate this arrangement. At the same time, both parties maintained separate banking accounts for their individual and business use.

¶ 6 In December 1992, Debra and Murat purchased bare land outside of Polson referred to as Lots 10, 21, 22, and 24 of Jette Ranch. Title to these lots was placed in both names as tenants in common and the total purchase price was approximately $34,000. Debra paid approximately $7,300 and Murat paid approximately $26,700. They orally agreed to proportional ownership based on their respective contributions, however they did not apply the proportional ownership equally to each lot. Rather, Murat owned a greater percentage of some of the lots than others. No designation was included in the deeds or in any other writing which reflected the unequal ownership.

¶ 7 In April 1993, Debra bought a home at 917 11th Street East in Polson for the two to live in. She did not take out a mortgage but used money she had accumulated from earlier real estate investments. Title to the property was in her name alone. When Debra sold the 917 11th Street East home in June 1995, she netted approximately $33,400 profit ($117,500 sale price minus $72,000 purchase price and remodeling costs). Debra eventually deposited most of the proceeds from this sale into her personal account.

¶ 8 In May 1995, the parties began building a home on Lot 10 of Jette Ranch. Apparently they were able to move to the property only a couple months after construction began. Eventually, they constructed a road to the property, a home, a well, and outbuildings. The parties financed this construction with the proceeds from the sale of Debra's home at 917 11th Street East. The construction ended up costing approximately $110,000.

¶ 9 About two months after the 917 11th Street East property sold, Lots 21, 22, and 24 of Jette Ranch also sold for approximately $85,500. The majority of this money was invested in a joint money market account in both Debra and Murat's names. The balance was deposited in the joint checking account.

¶ 10 Debra and Murat continued their relationship after moving to the home on Lot 10. However, in January 1997, the parties decided their relationship was over and they agreed to split the proceeds of the joint money market account. Of the money in the account, Debra received approximately $53,355 and Murat received approximately $34,410 per their agreement at that time. In February 1997, Lot 10 was listed for sale for about $250,000. However, both Debra and Murat continued to live there. Finally, in September 1998, Debra decided the situation was unacceptable and she returned to California. Murat continued to reside at the house on Lot 10.

¶ 11 No offers to buy Lot 10 were received for a time. Then, in 2001, an offer of $180,000 was received. Debra wanted to accept the offer, but Murat refused. In August 2001, Debra initiated this partition action pursuant to § 70-29-101, MCA, to force Murat to accept the latest offer on the property. Debra also brought a claim for unjust enrichment, asserting that she was entitled to a greater than 50% share of the proceeds of the pending sale. She claimed that Murat would be unjustly enriched by receiving a 50% share because she had contributed the bulk of the cost of the construction of the house out of her personal account. In addition, Debra claimed she was due rent for the time Murat lived alone at the house. Based on these claims, she requested that a constructive trust be imposed on Lot 10.

¶ 12 In November 2001, Murat and Debra apparently accepted an offer of $198,000 to buy the Lot 10 house and property. Murat answered Debra's complaint. He eventually asserted that he was entitled to 50% of the proceeds of the sale of Lot 10 because he supported Debra's living expenses during the time they were together, because he believed he was a half owner of the 917 11th Street East property, because he contributed labor to the remodel of 917 11th Street East, because he contributed labor on the construction of the house at Lot 10 and because he had contributed money to both properties.

¶ 13 Trial was had in July 2002. Both parties presented an accounting, testimony of their intent, and other evidence. Based on its review of the evidence, the trial court decided that each party owned 50% of the Lot 10 property and that the proceeds from the sale should be split equally. The court also found that Debra was over credited from the proceeds from the sale of Lots 21, 22, and 24 by $10,930.02. Further, the District Court determined that for the 38 months that Murat was living at Lot 10 alone, he owed Debra 50% of the $ 600 monthly rental value of the property, minus 50% of the costs for taxes and insurance which Murat paid. Based on this conclusion, the court determined Murat owed Debra $8,679.98 for rent. Netting these two figures, the court held that Debra owed Murat $2,250.04. Finally, the court denied Debra's claims for unjust enrichment and constructive trust. Debra filed a motion to alter or amend which the court denied. Debra now appeals. Further facts are discussed below as necessary.

II. STANDARD OF REVIEW

¶ 14 We review findings of fact in a partition action to determine whether the findings are clearly erroneous. Tillett v. Lippert (1996), 275 Mont. 1, 5, 909 P.2d 1158, 1160. See also Daines v. Knight (1995), 269 Mont. 320, 325, 888 P.2d 904, 906

. Further, we review a district court's conclusions of law to determine whether they are correct. In re Estate of McDermott, 2002 MT 164, ¶ 22, 310 Mont. 435, ¶ 22, 51 P.3d 486, ¶ 22.

III. DISCUSSION

¶ 15 Before we turn to the issues presented on appeal, we note undisputed aspects of this case that set the context for our review. First, neither of the parties allege they were ever married under common law. Second, this case concerns only the property held by Debra and Murat as tenants in common because, with the exception of the 917 11th Street East house, the parties did not present claims regarding their other property to the District Court. Therefore, we need not consider any of the assets Debra or Murat held individually including Debra's IRA, securities, other real property or Murat's business account. Third, neither party asserts that there was a written agreement governing the distribution of their assets upon separation. Finally, in spite of a remark by the District Court, neither party asserts the Marriage and Divorce Act, § 40-4-202, MCA, governing division of assets upon dissolution of marriage is applicable. Against this background, we turn to the issues presented.

ISSUE ONE

¶ 16 Did the District Court apply the correct standard to the division of assets held as tenants in common by an unmarried couple in a partition action?

¶ 17 The District Court noted, and we agree, that partition is an equitable action in which the court has great flexibility in fashioning appropriate relief for the parties. Frame v. Frame (1987), 227 Mont. 439, 443, 740 P.2d 655, 658. The court also stated that tenants in common are presumed to own property equally absent an agreement to the contrary. The court also noted that the parties had an agreement regarding the ownership shares of the bare land on Lots 10, 21, 22, and 24. The District Court, for some reason, stated that it should examine Debra and Murat's situation in a way "similar to that which would be conducted in a divorce" in order to determine an equitable division of assets. Further, the court noted its equitable approach required an assessment of monetary contributions, other expenditures that enabled the parties to acquire and maintain the property, conduct of the parties, and expressed intent of the parties. Finally, the court also noted that it would be "unfair ... to allow [Debra's] contributions to be preserved in an asset and [Murat's] contributions simply dissipated."

¶ 18 Debra asserts the court's approach is in error. Citing case law from other jurisdictions, Debra argues that tenants in common are presumed to share equally if there is no indication otherwise in the deed, but are presumed to share based on contribution if there is evidence showing contribution. She further argues that her contribution to Lot 10 was far greater than Murat's because she paid for most, at least $109,843, of the cost of the construction of the house. Debra asserts that she is entitled to full return on her contribution investment out of the sale of the property. According to her...