Jordan v. Mitchell

• Decision Date: 17 October 1997
• Citation: 705 So.2d 453
• Parties: Paulette JORDAN v. Thomas Lee MITCHELL, Sr. 2960528.
• Court: Alabama Court of Civil Appeals

Page 453

705 So.2d 453

Paulette JORDAN v. Thomas Lee MITCHELL, Sr.

2960528.

Court of Civil Appeals of Alabama.

Oct. 17, 1997.

Bryce U. Graham, Tuscumbia, for appellant.

No brief filed for appellee.

CRAWLEY, Judge.

Paulette Jordan and Thomas Lee Mitchell, Sr., were married in 1989; they were divorced in 1991. During their marriage, they lived in a mobile home on three acres of land. The divorce judgment required Jordan to convey her interest in the land to Mitchell.

In August 1991, three months after the divorce was final, the parties began living together again in the mobile home. Mitchell testified that when they began living together again, they "repeated [their] marriage vows" and "vowed fidelity to one another." He said that they lived together as husband and wife and that they had what he would call a "common law marriage." Mitchell testified that shortly after they began cohabiting, they agreed to sell the mobile home and to build a house on the property for their residence.

Mitchell stated that during his relationship with Jordan (both before and after the divorce), Jordan handled all the household finances. They had joint checking and savings accounts and their funds were routinely commingled. After the divorce, Mitchell gave Jordan his paycheck, and she deposited it into a joint account, along with the monthly Social Security benefit checks she received for herself and her daughter in consequence of her first husband's death. Mitchell testified that all of the funds for the construction of the residence came from his paychecks. When asked whether Jordan "put anything into the house," Mitchell replied, "To the best of my knowledge and to my request, no."

Jordan's testimony, in contrast, indicated that the parties were not living in a common law marriage after the divorce. She testified that after their divorce, she and Mitchell were "trying to reconcile." She stated that they were "just staying back and forth." She explained:

"I was staying at my mother's and staying with him too. We [were] trying to work things out. I wasn't with him full time.... I stayed with him off and on [for about three years]. With just my clothes. I didn't move [anything] else in there."

Jordan agreed that she and Mitchell decided to construct a residence on Mitchell's property. She claimed, however, that the money for the construction of the house came from her separate funds, money that she had received in settlement of a lawsuit after a former husband's death, money that she kept in separate certificates of deposit. She testified that she "cashed a CD and put it in another checking account, and it was strictly just that money" that was used to construct the house on Mitchell's property.

The parties broke up in February 1995. According to Mitchell, Jordan left one day, taking with her "all draperies, furniture, dishes, pots, pans ... everything except for the bed." She began living with another man, and at the time of trial, she had had a child by the other man.

Seeking reimbursement for her improvements to Mitchell's real estate, Jordan filed a declaratory judgment action in 1996, alleging that she had contributed more than $20,000 of her own funds to the construction of the house and that Mitchell had refused to repay her. After a bench trial, the circuit court entered a judgment for Mitchell, holding that Jordan was not entitled to recover for her improvements to the property. The court's order states:

"Alabama addressed the question of reimbursement for improvements upon the land of another by holding 'under the strict rule of common law, one who did not own real property could never recover for improvements he ... made thereon.' Gordon v. Tweedy, 74 Ala. 232 (1883).... [A]n equitable rule of set-off developed to ameliorate the sometimes harsh results ... That exception allows compensation for improvements on real property made by a non-owner when the one making the improvements (1) bona fide believed himself to be the owner of the property and (2) was without actual knowledge of any outstanding interest. McCloud v. AmSouth Bank, 540 So.2d 75, 76 (Ala.Civ.App.1989). It is well settled that 'one who has actual knowledge of an adverse claim to real property is not entitled to compensation for improvements to the property after he has acquired such knowledge.' McCloud, 540 So.2d at 77, citing Smith v. Persons, 285 Ala. 48, 228 So.2d 806 (1968). See also Ellett v. Wade, 47 Ala. 456, 466 (1872) [where the court stated 'I have not been able to find any case, either in this country or in England, where the court of chancery has assumed jurisdiction to give relief to a complainant, who has made improvements upon land, the legal title to which was in the defendant.' (citations omitted) ].

"Here, [Jordan] knew the title to the property was in [Mitchell], for she put it there. Instead, Jordan claims that she is entitled to compensation for her share of the building expenses she willingly put forth for the construction of the house on the lands of [Mitchell].

"Courts have used equity jurisdiction in limited circumstances to compensate an individual who has built improvements upon lands of another. The keys to compensation have been mistake, fraud, duress, undue influence, or the like in awarding equitable liens against the property. See, e.g., Benedict v. Little, 288 Ala. 638, 264 So.2d 491, 495 (1972); Lee v. Menefield, 249 Ala. 407, 31 So.2d 581 (1947). 'One who makes improvements on the land of another is not entitled to an equitable lien to secure the payment of the costs of improvements unless the person making the improvements was induced by fraud, duress, undue influence, or mistake of such a character that he is entitled to restitution.' Hewett v. McGaster, 272 Ala. 498, 133 So.2d 189, 191 (1961), citing Taylor v. Shaw, 256 Ala. 467, 473, 55 So.2d 502 (1951); Lee v. Menefield, supra. See also Prince v. Crow, 589 So.2d 161 (Ala.1991)[A]n equitable lien is appropriate when 'the improver of property, mistakenly and in good faith, believes he owns the property.' Prince, 589 So.2d at 163, citing Manning v. Wingo, 577 So.2d 865, 869 (Ala.1991); 57 A.L.R.2d 263 ['At common law, emphasis is placed upon the right of the owner of land ... and it is considered that he is under no obligation, either legal or moral, to pay for improvements.... Every occupant makes improvements at peril, even if he acts under a bona fide belief of ownership. 2 Kent Com., 334'].

"In Manning v. Wingo, the Alabama Supreme Court summarized the law of this state:

" 'Alabama has limited its equitable rule of recovery to the following situations: (1) where an improver, acting in good faith and under the mistaken belief that he owns the land, makes improvements on the land of another, being induced to do so by 'fraud, duress, undue influence, or mistake of such character that he is entitled to restitution,'; (2) where the true owner of land makes a demand for the rents and profits, a bona fide occupant under a claim of title who has made valuable improvements on the land is entitled to compensation by way of set-off ...; and (3) where a true owner brings an action to recover possession of land, the defendant may recover for permanent improvements by way of set-off against the value of the use and occupation of the land, upon the defendant's suggestion and proof of adverse possession....'

"Manning v. Wingo, 577 So.2d at 869. Clearly, none of the three described situations above are even arguably applicable to the set of facts at hand.

"[Jordan] is not able to claim she mistakenly believed a marriage existed in order to obtain an equitable division of the property as she was collecting Social Security widow's benefits from her first husband's death as an unmarried woman during the years in question. See 20 C.F.R. Parts 404.339, 404.341. This Court will not now allow her to accomplish indirectly that which she cannot do directly, namely obtain an equitable property division pursuant to a divorce.

"Based on the facts of this case and the laws of this state, this Court can find no basis in law or equity to provide the relief [Jordan] now seeks."

On appeal, Jordan argues that she is entitled to reimbursement for the value of her improvements to Mitchell's property based on one or more of the following theories: constructive trust, money had and received, or restitution in quasi-contract. We reject Jordan's arguments and affirm the trial court's judgment.

Although the remedies proposed by Jordan differ in some respects, they all have one thing in common: each requires that the recipient of a benefit be unjustly enriched. One is unjustly enriched if his retention of a benefit would be unjust. Restatement of Restitution: Quasi Contracts and Constructive Trusts § 1, Comment c. (1937). Retention of a benefit is unjust if (1) the donor of the benefit (here, allegedly Jordan) acted under a mistake of fact or in misreliance on a right or duty, or (2) the recipient of the benefit (here, allegedly Mitchell) engaged in some unconscionable conduct, such as fraud, coercion, or abuse of a confidential relationship. In the absence of mistake or misreliance by the donor, or wrongful conduct by the recipient, the recipient may have been enriched, but he is not deemed to have been unjustly enriched. See Restatement of Restitution: Quasi Contracts and Constructive Trusts § 2 at 16. See generally F. Woodward, The Law of Quasi Contracts (1913).

Referring to the circumstances under which a constructive trust may be impressed, our supreme court explained:

"Equity may impress a constructive trust on property in favor of one beneficially entitled thereto when another holds title to the property by fraud, commission of wrong, abuse of a confidential relationship, or any other form of unconscionable conduct. Keeton, Law of Trusts, 210 (5th ed.1949); 4 Pomeroy Equity Jurisprudence, § 1053 (5th ed.1941); and Walsh on Equity, § 106 (1930)."

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