Sack v. Tomlin

• Decision Date: 30 March 1994
• Docket Number: No. 23856,23856
• Citation: 110 Nev. 204,871 P.2d 298
• Parties: Catherine P. SACK, Appellant and Cross-Respondent, v. Rickey Randell TOMLIN, Respondent and Cross-Appellant.
• Court: Nevada Supreme Court

Page 298

871 P.2d 298

110 Nev. 204

Catherine P. SACK, Appellant and Cross-Respondent, v. Rickey Randell TOMLIN, Respondent and Cross-Appellant.

No. 23856.

Supreme Court of Nevada.

March 30, 1994.

Julian C. Smith, Jr., Carson City, for appellant and cross-respondent.

Robert A. Grayson, Carson City, for respondent and cross-appellant.

OPINION

PER CURIAM:

Appellant Catherine P. Sack (Cathy) and respondent Rickey Randell Tomlin (Rickey) commenced living together in March of 1984. Six months later Cathy obtained a divorce from her husband, William Sack (William). Pursuant to the divorce decree, Cathy received fee simple ownership to a house in Carson City, Nevada. In exchange, Cathy gave William a lump sum promissory note, in the amount of $43,082.00, due and payable on September 30, 1990. As the due date on the promissory note drew closer, Cathy contemplated her two viable alternatives: refinance or sell the house. After discussing the matter with Rickey, they collectively decided to refinance. On May 10, 1990, Cathy conveyed the house to herself and Rickey as tenants in common. Together, they obtained a new loan for the house in the amount of $126,000.00.

Eventually, differences arose between them and Rickey moved out of the house in late February, 1991. Rickey continued to make one-half mortgage contributions through October, 1991. The house was sold in April, 1992. Cathy made the final five mortgage payments entirely by herself. Thereafter, a dispute arose over the apportionment of the proceeds from the sale of the house. Applying the doctrine of quantum meruit, the district court concluded that Rickey had bought-in to 18% of the house's equity and it ordered the proceeds apportioned accordingly. It also denied Cathy's request for contribution towards mortgage payments and denied Rickey's request for attorney's fees. Both parties appealed the district court's order.

For reasons stated hereafter, the district court's denial of respondent's request for attorney's fees is affirmed. In addition, appellant is entitled to contribution for one-half of the last five mortgage payments that she made alone. Further, the district court's apportionment of the sale of the house is modified and remanded for action consistent with this opinion.

FACTS

Cathy and Rickey began living together in March of 1984, in a house (the house) located at 1510 Valencia Court, Carson City, Nevada. ¹ At the time, Cathy was separated from her husband with whom she owned the house in joint tenancy. ² Pursuant to a September 14, 1984, divorce decree, the house was transferred to Cathy, thus vesting in Cathy full fee simple ownership. ³

As the maturity date on the promissory note to William drew closer, Cathy contemplated her two viable alternatives: refinance or sell the house. After discussing the matter with Rickey, they collectively decided to refinance the house. On May 10, 1990, Cathy conveyed the house to herself and Rickey as tenants in common. Together, they obtained a new loan for the house in the amount of $126,000.00. The outstanding promissory notes to First Interstate Bank and William were retired. ⁴

In late February, 1991, Rickey moved out of the house after differences arose between him and Cathy. Following the separation and through October, 1991, Rickey continued to make one-half of the mortgage payment due each month. In November, 1991, the house was listed for sale. ⁵ Five months later, the house was sold for $185,000.00, leaving a net equity of $46,278.00. The dispute concerns the ownership of this equity interest.

Cathy contends that the May, 1990, conveyance of the house to herself and Rickey as tenants in common was not intended to transfer to Rickey any of the equity that Cathy had accumulated from 1977 to 1990; instead, it was only intended to transfer an equal portion of the future appreciation of the house. ⁶ Conversely, Rickey contends that he is entitled to one-half of the equity by virtue of the grant, bargain and sale deed conveying the house to him as a tenant in common.

The district court concluded that Cathy did not intend to make a gift to Rickey of one-half of her accumulated equity. However, the district court noted that Rickey contributed 36% of the funds applied towards the total expenditures of both parties during the period of cohabitation. ⁷ Applying the doctrine of quantum meruit, the district court determined that Rickey was essentially buying-in to one-half of Cathy's equity, and awarded Rickey 18% of the total net equity from the sale of the house, or $8,330.04. This left Cathy $37,947.96 of the net equity.

LEGAL DISCUSSION

Whether the district court erred in applying the doctrine of quantum meruit to the apportionment of the proceeds from the sale of the house.

Both appellant and respondent assert that the district court erroneously applied the doctrine of quantum meruit to the facts in this case. The doctrine of quantum meruit generally applies to an action for restitution involving work and labor performed which is founded on an oral promise on the part of the defendant to pay the plaintiff as much as the plaintiff reasonably deserves for his labor in the absence of an agreed upon amount. See, e.g., Herrmann v. Blase, 77 Nev. 127, 359 P.2d 745 (1961); United Tungsten v. Corp. Svc., 76 Nev. 329, 353 P.2d 452 (1960).

This court has previously addressed the doctrine of quantum meruit in the context of property rights of unmarried cohabitants. Hay v. Hay, 100 Nev. 196, 678 P.2d 672 (1984); Warren v. Warren, 94 Nev. 309, 579 P.2d 772 (1978). In Hay, this court stated:

"The courts should enforce express contracts between nonmarital partners except to the extent that the contract is explicitly founded on the consideration of meretricious sexual services ... In the absence of an express contract, the courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding between the parties. The courts may also employ the doctrine of quantum meruit, or equitable remedies such as constructive or resulting trusts, when warranted by the facts of the case."

Hay, 100 Nev. at 199, 678 P.2d at 674 (quoting Marvin v. Marvin, 18 Cal.3d 660, 134 Cal.Rptr. 815, 831-32, 557 P.2d 106, 122-23 (1976)).

In Marvin, the California Supreme Court held that "a nonmarital partner may recover in quantum meruit for the reasonable value of household services rendered less the reasonable value of support received if he can show that he rendered services with the expectation of monetary reward." Marvin, 134 Cal.Rptr. at 831-32, 557 P.2d at 122-23.

In the instant case, the district court did not find an expressed or tacit agreement between the parties to compensate one another for household services. Instead, the district court based its apportionment of the net equity of the house solely on the cash contributions made by each party towards their total living expenses during the period of cohabitation. There is nothing in the record which indicates that either party promised or expected compensation for their contribution of household services. Nor is there any evidence in the record to indicate that whatever services were provided by one party were not reduced by equivalent services rendered by the other party. In addition, recovery for household services was not an issue before the district court. Under Marvin and Hay, the doctrine of quantum meruit does not apply to the factual circumstances in the instant case.

Whether the proceeds should have been apportioned pursuant to the doctrine of contribution.

Cathy and Rickey lived together under circumstances of mutual convenience. Each was able to enjoy a lifestyle and standard of living that neither could afford individually. They did not, however, hold themselves out to be husband and wife. There was no written income pooling agreement between the parties. The record reflects that there was conflicting testimony regarding the expectations of Rickey's contributions to household expenses. Rickey characterizes his contributions as pooling of income. Cathy characterizes Rickey's contributions as payment for rent and a fair share of the household expenses. Rickey testified that the rental value of Cathy's home, at least to him, was $700.00 in 1984 and $1,500.00 in 1992. During this period, Rickey contributed an average of $783.00 per month. ⁸ During that same period, Cathy contributed an average of $1,962.00 per month. ⁹ Consequently, Cathy considers Rickey's contributions as a quid pro quo for lodging and meals.

The community property apportionment method enunciated by this court in Malmquist v. Malmquist, 106 Nev. 231, 792 P.2d 372 (1990), is not applicable to the instant case because: these parties were not married, nor did they hold themselves out as being married; no community property was ever held by the parties and they purposely held title to the house as tenants in common. ¹⁰ Accordingly, the apportionment dispute in the instant case is more analogous to those instances where cotenants unequally contribute to the purchase price of real property.

Many cases have held that where cotenants unequally contribute to the purchase price of real property, that a presumption arises that the cotenants intended to share in proportion to the amount contributed by each to the purchase price. See Williams v. Monzingo, 235 Iowa 434, 16 N.W.2d 619 (1944); see also Milian v. DeLeon, 181 Cal.App.3d 1185, 226 Cal.Rptr. 831 (1986); Cummings v. Anderson, 22 Wash.App. 634, 590 P.2d 1297 (1979); cf. Kershman v. Kershman, 192 Cal.App.2d 23, 13 Cal.Rptr. 290 (1961); Moran v. Thomas, 280 A.D. 1037, 117 N.Y.S.2d 190 (1952). The courts have also held that in the absence of an agreement between two unmarried parties living together to pool their incomes and share equally in joint accumulations, each party is entitled to share in the property jointly...