Schmaling v. Schmaling

• Decision Date: 10 March 1998
• Docket Number: No. 14649,14649
• Citation: 48 Conn.App. 1,707 A.2d 339
• Court: Connecticut Court of Appeals
• Parties: Jennie T. SCHMALING v. Scott M. SCHMALING. Scott M. SCHMALING v. Jennie T. SCHMALING et al.

Page 339

707 A.2d 339

48 Conn.App. 1

Jennie T. SCHMALING v. Scott M. SCHMALING.

Scott M. SCHMALING v. Jennie T. SCHMALING et al.

No. 14649.

Appellate Court of Connecticut.

Argued Sept. 30, 1997.

Decided March 10, 1998.

Kenneth J. Bartschi, with whom was Karen L. Murdoch, Hartford, for appellant (plaintiff in the first case, named defendant in the second case).

Ralph L. Palmesi, with whom was Christine Donahue, Trumbull, for appellee (defendant in the first case, plaintiff in the second case).

Before EDWARD Y. O'CONNELL, C.J., and SCHALLER and FRANCIS X. HENNESSY, JJ.

SCHALLER, Judge.

This appeal involves a contractual dispute between the plaintiff, Jennie T. Schmaling, and her son, the defendant Scott M. Schmaling, ¹ concerning improvements to real property owned by the plaintiff that were made by the defendant in return for the conveyance of a one-half interest in the property with the parties holding as joint tenants. The two civil actions arising from the dispute were consolidated for trial. In the first case, the plaintiff filed suit against the defendant in a four count complaint claiming breach of contract, fraudulent misrepresentation, detrimental reliance and unjust enrichment. The defendant filed an answer and a two count counterclaim claiming breach of contract and unjust enrichment. In the second case, the defendant filed a complaint seeking a partition by sale of the property with a division of the sale proceeds according to the parties' respective ownership interests. In her answer, the plaintiff admitted the existence of the factual predicates that would entitle the defendant to a partition of the property, but asserted the special defenses of fraud and breach of contract that would preclude the defendant from obtaining a partition. This was construed by the trial court, however, as a stipulation of the parties entitling the defendant to a partition subject to the determination of the validity of the special defenses. The consolidated cases were tried to an attorney trial referee pursuant to General Statutes § 52-434(a)(4) and Practice Book § 430.

The dispositive issue in this appeal by the plaintiff is whether the trial court properly rejected the attorney trial referee's finding of lack of donative intent on the part of the plaintiff when she conveyed an interest in the property to the defendant to enable the parties to obtain mortgage financing. We reverse the trial court's judgment in part.

The attorney trial referee found the following facts. Prior to March 10, 1982, the plaintiff was the sole owner of certain real property located at 5 Idlewild Manor in Greenwich. The plaintiff is a widow and had resided at the property for approximately forty-six years. She owned the property free and clear of any mortgages or material encumbrances. The defendant was planning to marry, and the plaintiff believed that he would need to secure suitable housing for himself and his wife. The plaintiff offered to allow the defendant to add a second floor to the structure of her home to enable him and his wife to live on the property; the defendant did nothing to induce his mother to make such an offer.

To finance the construction of the second floor pursuant to the plaintiff's offer, it was necessary to obtain a mortgage loan. To secure mortgage financing, the parties believed that it was necessary to have the defendant's name on the property as a record owner. As a result, the plaintiff conveyed an undivided one-half interest in the property, via quitclaim deed, to the defendant, with the parties holding title as joint tenants with right of survivorship. The parties obtained a mortgage loan on June 4, 1982, in the amount of $32,000. That loan was subsequently refinanced on February 23, 1983, in the amount of $43,000.

The parties specifically agreed to the following arrangement, although they did not reduce their agreement to writing. The plaintiff was to be responsible for the payment of the following expenses: one half of the real estate taxes, one half of the maintenance of the property, one half of the utilities for the barn (a separate structure on the premises), and the insurance and other expenses associated with the downstairs portion of the property. The defendant was to be responsible for the payment of the following expenses: all mortgage loan payments, the remaining one half of the taxes, maintenance expenses and utilities, and all expenses associated with the upstairs portion of the property. In addition, the defendant was responsible for the construction of the upstairs living quarters, including obtaining all applicable permits and paying for all materials and labor associated with the construction, which funds were to be derived from the proceeds of the mortgage loan.

The defendant completed construction of the second floor living quarters, which substantially increased the overall value of the property. During the construction of the second floor living quarters, the defendant caused $1500 worth of damage to the first floor living quarters. The defendant and his wife moved into the second floor living quarters shortly after the construction was completed. The defendant and his family continued to reside in the second floor premises until March, 1992, when they moved out because the property was not large enough for the defendant, his wife, and their four children. The second floor was subsequently rented to third parties at a rent of $1550 per month.

At the time of their original agreement, the parties contemplated that the defendant would perform additional maintenance and improvement to the first floor living quarters occupied by the plaintiff, although they never agreed on the specific nature and scope of such work. Some time after the second floor living quarters had been constructed, the defendant agreed to extend a first floor room for the plaintiff using the overhang created by the second floor addition. The defendant commenced work on the first floor addition and completed the work necessary to enclose the room. The defendant did not complete the room, however, leaving unfinished the installation of insulation and sheetrock, and electrical work. The defendant provided the funds to construct the first floor addition, and performed most of the work himself.

The defendant made all of the required mortgage payments. In 1985, the plaintiff stopped paying her agreed share of the property taxes and other shared expenses for which she was responsible under the agreement. From that time, the defendant paid both his portion and the plaintiff's share of taxes and expenses due under the agreement. As a result, the defendant paid the following extra amounts on behalf of the plaintiff: $9039.54 in property taxes, $4710.85 for property insurance, and $509.14 for electricity supplied to the barn on the property.

The attorney trial referee made the following additional findings and conclusions: (1) the plaintiff failed to prove, by clear and convincing evidence, that the defendant misrepresented his intentions, either intentionally, negligently or recklessly, with respect to the period of time that he would reside at the property or what would happen to his ownership interest in the property should he move out of the second floor residence; (2) there was no evidence of a donative intent in connection with the plaintiff's transfer of the property interest to the defendant; (3) any presumption of donative intent arising from the relationship of the parties was overcome by the agreement of the parties that the sole motivation for transferring the property interest to the defendant was for the purpose of obtaining financing for the second floor addition; (4) the plaintiff proved monetary damages in the amount of $1500 related to the damage to the first floor caused by the defendant during the construction of the second floor; (5) the defendant proved monetary damages in the amount of $14,259.53 representing the total amount that the defendant paid on behalf of the plaintiff; (6) it would be inequitable to order partition of the property; (7) it would be inequitable to allow the defendant to retain a fee interest in the property; (8) it would be inequitable to order the defendant to reconvey his interest in the property back to the plaintiff unconditionally, given that the defendant is obligated on the mortgage note, has not been reimbursed for the expenses he paid on behalf of the plaintiff and has not been reimbursed for the excess of the value he put into the property over the reasonable value of his use of the property.

As a result of those findings and conclusions, the attorney trial referee made the following recommendations to the trial court: ² (1) judgment should enter in favor of the plaintiff on count one (breach of contract) of her complaint in the amount of $1500; (2) judgment should enter in favor of the defendant on counts two (fraudulent misrepresentation) and three (detrimental reliance) of the plaintiff's complaint; (3) judgment should enter in favor of the plaintiff on count four (unjust enrichment) of her complaint, with the court imposing a constructive trust on the defendant's interest in the property, subject to the plaintiff's restitution of the amounts due the defendant, including releasing the defendant from liability on the mortgage loan; (4) consistent with the plaintiff's restitution, judgment should enter in favor of the defendant on count one breach of contract) of his counterclaim in the amount of $14,259.53; (5) judgment should enter in favor of the plaintiff in the defendant's action against the plaintiff seeking a partition of the property, based on the plaintiff's special defense, which is essentially the ground set forth in count four (unjust enrichment) of the plaintiff's complaint.

On February 28, 1995, the trial court, after reviewing the attorney trial referee's report, issued its memorandum of decision. In its decision, the trial court (1...