Quimby v. Myers

• Decision Date: 09 November 2005
• Docket Number: No. 04-236.,04-236.
• Citation: 895 A.2d 128,2005 VT 123
• Parties: Michael QUIMBY v. Gaye Schaufus MYERS.
• Court: Vermont Supreme Court

Page 128

895 A.2d 128

2005 VT 123

Michael QUIMBY v. Gaye Schaufus MYERS.

No. 04-236.

Supreme Court of Vermont.

November 9, 2005.

Motion for Reargument Denied January 20, 2006.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND, JJ. and BURGESS, District Judge, Specially Assigned.

ENTRY ORDER

¶ 1. This case — before us for a second time — involves a protracted dispute between a former couple over the assets of their alleged partnership in a horse farm business.¹ In this second appeal, defendant Gaye Schaufus Myers contends the trial court erred in: (1) denying her motion for summary judgment, which was based on the Statute of Frauds, and later permitting the jury to determine that real property to which she held exclusive title was a partnership asset despite the absence of a writing transferring title to the partnership; (2) failing to conduct an accounting and judicial dissolution of the partnership taking into account the partners' capital contributions; and (3) dismissing her counterclaim for unjust enrichment. In a cross-appeal, plaintiff Michael Quimby contends the court erred in: (1) dismissing a fraudulent conveyance claim; (2) failing to award pre-judgment interest; and (3) denying his motion for attorney's fees. We affirm in part, reverse in part, and remand for further proceedings consistent with the views set forth below.

¶ 2. The material facts may be briefly summarized. Ms. Myers was the sole owner of a sixty-acre wooded lot in the Town of Lowell. In 1994, she began a personal relationship with Mr. Quimby. Quimby claims that he and Myers entered into an oral agreement in which he agreed to sell his house and use the proceeds to construct a pole barn and apartment on the Lowell property for use in a business to breed and sell horses. Although Quimby claims to have invested about $30,000 from the sale, the evidence at trial showed that he gave Myers two checks from the proceeds totaling $19,000. Quimby further testified that he and Myers entered into a "50/50 agreement" under which, if the relationship ended, "we'll sell, we'll split, and we'll be gone." Thereafter, Myers brought a number of her horses to the property, and Quimby claims that together they acquired several more and that he used his income to pay for the cost of feed, utilities, and taxes. Quimby acknowledged that although he pressed Myers "to give me something in writing" she refused, and that he consequently threatened to sue under the "original agreement" for "[h]alf of everything. Half of the house, barn, half of the horses that we had acquired."

¶ 3. The parties' relationship ended in 1999. In August 2000, Quimby filed a complaint against Myers, seeking a dissolution of the partnership, an accounting, and enforcement of the oral agreement to sell the property and divide the proceeds equally upon the dissolution of the parties' relationship. The court denied Quimby's motion for writ of attachment and, thereafter, granted Myers's motion for summary judgment, ruling that the oral agreement for reimbursement of the proceeds that Quimby had allegedly invested in the business was invalid under the Statute of Frauds, 12 V.S.A. § 181(5).² In Quimby v. Schaufus, No. 2001-528, slip op. at 2, 2002 WL 32813805 (Vt. June 27, 2002) (unreported mem.), however, we reversed the judgment, holding that an agreement for repayment of money, even if it requires liquidation of real property, does not require a writing. See Cameron v. Burke, 153 Vt. 565, 571-72, 572 A.2d 1361, 1365 (1990) (Statute of Frauds does not apply to promise to repay debt from proceeds of resale of land, which does not create interest in property within the statute). We also noted that material issues remained in dispute concerning Quimby's allegation that the parties had an oral agreement to operate a business, and his claim for an accounting. Quimby, No. 2001-528, slip op. at 2; see Harman v. Rogers, 147 Vt. 11, 14-15, 510 A.2d 161, 163-64 (1986) (partnership may be created by "tacit agreement"); Dutch Hill Inn, Inc. v. Patten, 129 Vt. 466, 469, 282 A.2d 815, 817 (1971) (holding that evidence was sufficient to support finding of oral partnership agreement).

¶ 4. Following our decision, Quimby acquired new counsel and filed an amended complaint, alleging that the parties had agreed to be equal partners in the horse farm business, that they were equal owners of the horses, and that the house and land were also "partnership property along with the personal property." He requested that the partnership be dissolved and that the assets be liquidated and distributed under the terms of the parties' agreement. The amended complaint added Myers's new husband, Joseph T. Myers, as a named defendant, alleging that Myers's conveyance of the property to Mr. Myers and herself as tenants by the entirety in June 2001 constituted a fraudulent conveyance. The amended complaint included an additional claim for unjust enrichment. Myers, in response, filed a counterclaim, asserting that Quimby had been unjustly enriched from Myers's services to the household, storage of Quimby's personal items, and contributions to Quimby's antique business.

¶ 5. Prior to trial, Myers moved for partial summary judgment, arguing that Quimby was not entitled to a division of the real property as a partnership asset because she had not transferred the property to Quimby or the partnership in writing, as required by the Statute of Frauds. Although the court failed to rule on the motion, it later overruled Myers's objection, based on the Statute of Frauds, to proposed jury instructions permitting the jury to find that the land and improvements were partnership assets. Myers renewed her objection to the charge at the completion of the court's instructions. The jury returned a special verdict, answering "yes" to the question whether Myers and Quimby had "enter[ed] into an oral agreement to form a 50/50 business partnership," and specifically identified the partnership property as land worth $36,600, a house worth $40,900, and horses worth $42,000, for a total of $119,500.³

¶ 6. Thereafter, Quimby moved for a nonpossessory writ of attachment or constructive trust on the partnership property, and for liquidation of the partnership property through a judicial sale to pay him half the value of the assets. Myers, in response, moved for a judicial accounting and distribution of the assets, including the contributions of the partners, under 11 V.S.A. § 3277(a). The court granted Quimby's motion and reserved ruling on Myers's request. In April 2004, following a hearing, the court issued a written judgment, ruling that the parties had agreed, upon dissolution of the partnership, to a sale of the partnership assets and a fifty-fifty division of the proceeds, and accordingly awarded Quimby damages of $59,750 noting that Quimby could petition the court for sale of the partnership real estate if the judgment were not satisfied. The court also denied Quimby's request for attorney's fees, and ordered interest to run from the date of judgment.

¶ 7. On appeal, Myers renews her argument that the Statute of Frauds barred Quimby's claim to the real property as a partnership asset. We agree. It is well settled that a writing is required to transfer real property, already owned by one partner, to another partner or to the partnership. See, e.g., Johnson v. Gilbert, 127 Ariz. 410, 621 P.2d 916, 919 (Ct.App. 1980) (contract providing for "transfer of land from one partner or joint venturer to another is within the Statute of Frauds"); McCloud v. Davison, 719 So.2d 995, 997 (Fla.Dist.Ct.App.1998) (agreements between partners or joint venturers to buy or sell land are not within the purview of the Statute of Frauds "unless there is a provision for transfer of title to specific real property from one of the parties to another"); Amendola v. Kendzia, 17 A.D.3d 1105, 793 N.Y.S.2d 811, 813 (2005) (affirming motion to dismiss partner's claim for accounting of alleged partnership asset in real property on ground that oral agreement to convey property to partnership was barred by Statute of Frauds); Ludwig v. Walter, 75 N.C.App. 584, 331 S.E.2d 177, 179 (1985) ("[T]he general rule is that land owned individually by one who enters into a partnership cannot become a partnership asset absent some written agreement sufficient to satisfy the Statute of Frauds."); Gunsorek v. Heartland Bank, 124 Ohio App.3d 735, 707 N.E.2d 557, 563-64 (1997) (trial court erred in failing to grant summary judgment based on absence of writing under general rule that partner's agreement to transfer real property he already owned as his contribution to the partnership is within Statute of Frauds); Shire Dev. v. Frontier Invs., 799 P.2d 221, 223-24 (Utah Ct.App.1990) (if agreement provides for transfer of real property interests among partners, "it would have to be in writing in order to comply with the statute of frauds"); see generally 1 Z. Cavitch, Business Organizations § 14.03[2], at 14-15 (2005) (observing that Statute of Frauds applies "where real property [is] to be conveyed from one partner to another"); 9 R. Lord, Williston on Contracts, § 25.17, at 606 (4th ed.1999) (noting general rule that agreement that new partnership shall have an interest in realty owned by one of the partners is within the Statute of Frauds).

¶ 8. As these authorities demonstrate, while partnership or joint venture agreements need not be in writing as a general matter, the fact that agreements covered by the Statute of Frauds — such as those relating to interests in real property — are made in the context of a partnership or joint venture agreement does not render the statute inapplicable. Merely because the agreement involves parties to a business partnership does not negate the interests traditionally safeguarded under the statute. As the court in East Piedmont 120 Assocs. v. Sheppard, 209 Ga.App. 664, 434 S.E.2d 101 (1993), cogently observed: "The evidentiary and cautionary...