Wright v. Wright

• Decision Date: 30 March 1982
• Docket Number: No. 111A81,111A81
• Citation: 305 N.C. 345,289 S.E.2d 347
• Court: North Carolina Supreme Court
• Parties: Wayne R. WRIGHT v. Kathleen D. WRIGHT.

305 N.C. 345

289 S.E.2d 347

Wayne R. WRIGHT v Kathleen D. WRIGHT

No. 111A81

Supreme Court of North Carolina

March 30, 1982

[289 S.E.2d 345]

On petition for further review ¹ of a decision of the Court of Appeals, 47 N.C.App. 367, 267 S.E.2d 61 (1980), vacating a jury verdict for defendant and a judgment entered pursuant to the verdict by Judge Hairston, presiding at the 13 August 1979 Session of Forsyth Superior Court, and ordering a new trial. The case was argued as No. 58 at the Spring Term 1981

Alexander, Hinshaw & Schiro by Robert D. Hinshaw, Winston-Salem, for plaintiff appellee. Harper, Wood, Hux & Brown by William Z. Wood, Jr., Winston-Salem, for defendant appellant.

EXUM, Justice.

Plaintiff furnished extensive improvements to land owned by his wife, the defendant. His claim is for a money judgment and an equitable lien pursuant to the doctrine of unjust enrichment. The principal question presented is whether Judge Hairston, under the pleadings and evidence before him, properly required plaintiff to prove by clear, cogent and convincing evidence that defendant expressly promised him an interest in the land. The Court of Appeals concluded not. We conclude to the contrary and reverse. We also conclude that the same presumption of gift should apply in these cases whichever spouse furnishes the consideration for improvements on the other spouse's land.

This is an action for a money judgment of $17,270.15 and for an equitable lien in that amount on property owned by defendant. Plaintiff alleged the following: The parties were married on 25 October 1975. “[O]n or about” 1 November 1975 defendant “made certain representations” to plaintiff that if plaintiff made and paid for certain improvements on defendant's real property, defendant would convey the property to the parties as tenants by the entirety. “[I]n reliance upon defendant's said representation,” plaintiff spent $15,126.91 for materials and $2,143.24 for labor for permanent improvements on defendant's home. Defendant has refused to “fulfill her representation to reconvey said real property to defendant and plaintiff as tenants by the entirety.” Plaintiff is therefore entitled to equitable relief “on the basis that defendant has breached the quasicontractual relationship existing between the said parties and has become unjustly enriched.”

In her answer defendant admits the allegations relating to the marriage and that plaintiff “did purchase certain materials and pay for certain labor to the defendant's house.” Otherwise, she denies the allegations of the complaint.

The matter came on for trial before Judge Hairston. The evidence consisted solely of the testimony of the parties.

Plaintiff testified as follows: He is a carpenter. He met defendant on 4 July 1975 and married her on 25 October 1975. Before their marriage they discussed the fact that defendant's home was inadequate to house the five people, including defendant's daughter and plaintiff's two sons, who would live there after the marriage. They discussed buying a new home but instead decided that they would remodel defendant's home. Plaintiff, using his carpentry skills, made substantial improvements to defendant's home. He installed new carpet and a new heating and air conditioning system. He added a bedroom, bath, den, double carport with two utility rooms, and a front porch. Although the improvements were begun before the marriage, most of the work was actually accomplished after the marriage. All improvements and additions were the result of the parties' “joint decision.” Plaintiff paid for the improvements out of savings “that I had accumulated throughout my life.” He spent $15,544.37 for materials and valued his labor at $2,147. In his opinion the fair market value of the home increased from $19,000 before the improvements to between $38,000 and $40,000 after the improvements.

Plaintiff testified that as a result of discussions with his wife about how the improvements would be paid for, he “assumed” and “expected” to own the property jointly after the improvements were made. They discussed changing the deed to include his name. He requested that his name be put on the deed and his wife “informed me that she did have the deed changed.” Later plaintiff discovered that defendant had merely changed her name on the deed from her prior married name to that of “Wright.” Plaintiff, however conceded that when he made the improvements he knew that the house was titled in his wife's name. Plaintiff also testified that “the statement about sharing the house was made before we were married.” He said, “Our disagreement over the property did lead to our marital problems.” Both went to marriage counseling sessions, but ultimately the parties separated on 24 November 1976.

Defendant testified that plaintiff “came up with the idea of remodeling my house to make it bigger” because they were unable to find another house that satisfied him. She told him, “Well if that is what you want, you know, okay.” She denied ever promising him “anything concerning the house,” saying, “No, I never made any statement concerning joint ownership of the house.” She executed a will devising the home to plaintiff for life with remainder to her daughter. When she showed plaintiff the will “he did not like the wording. He got mad about it. He complained that his boys would not get anything out of the house. He left me for the last time the day after Thanksgiving in 1976. When he left, he had ‘cleaned house.’ No, he did not take any of my things. Yes, he did take furniture.” Defendant did not deny that plaintiff had made substantial improvements on her home. She did “agree with him to make the improvements ... after we had discussed the possibility of purchasing a bigger house together,” but she “did not promise him anything,” and “he did not ask or mention anything about putting his name on the deed.” She agreed, however, that the “main problem in the marriage concerned putting his name on the deed.”

Judge Hairston, treating the claim as one sounding in unjust enrichment, ² submitted and the jury answered three issues as follows:

1. Did the defendant agree with the plaintiff to share in the ownership of the real property?

ANSWER: No.

2. If so, was the defendant unjustly enriched?

ANSWER: ______

3. What amount, if any, is the plaintiff entitled to recover from the defendant?

ANSWER: ______

Judge Hairston instructed the jury on the first issue that the burden was upon the plaintiff “to prove by clear, strong and convincing evidence” that the defendant promised the plaintiff that if he would provide the improvements to her property she would permit him to share in the property. Judge Hairston further instructed the jury that “there is a presumption in law that when a husband makes improvements or spends money on his wife's property, he makes a gift to her ... unless it is shown, as I have said, by clear, strong and convincing evidence that some other arrangement was intended.” Judge Hairston also instructed the jury that if they answered the first issue “no” that would end the lawsuit. He entered judgment on the verdict that plaintiff recover nothing of the defendant and dismissed plaintiff's action.

On appeal to the Court of Appeals, plaintiff contended that Judge Hairston erred in submitting the first issue. Plaintiff argued that the first issue should have been as tendered by him, i.e., “Did the plaintiff intend to make a gift of the labor and materials in improving the home of his wife, the defendant?” The Court of Appeals agreed and ordered a new trial, saying:

The trial court's substituted issue incorrectly states the law. Plaintiff is not required to show by clear, strong and convincing evidence that his wife ‘... promised to share in the property.’ ‘No contract, oral or written, enforceable or not, is necessary to support a recovery based upon unjust enrichment.’ Parslow v. Parslow, 47 N.C.App. 84, 266 S.E.2d 746 (1980). ‘Such a recovery is founded on the equitable theory of estoppel and not on principles of quasi or implied contract.’ Clontz v. Clontz, 44 N.C.App. 573, 578, 261 S.E.2d 695 [, 698] (1980). If plaintiff had been successful in rebutting the presumption of gift, all he would have had to show was that the improvements were made upon the good faith belief that an estate in the property was promised him. See Clontz, supra, at 578 . That showing need not be made by clear, strong and convincing evidence.

This case must be sent back for a new trial. At the conclusion of the evidence, in order to recover, plaintiff must first rebut the presumption that the improvements placed on the wife's house were intended as a gift. See Shue v. Shue, 241 N.C. 65, 67, 84 S.E.2d 302 [, 303] (1954).

47 N.C.App. at 369-70, 267 S.E.2d at 62-63.

We allowed defendant's petition for further review to consider the correctness of the Court of Appeals' decision in light of our cases on the subject. We conclude that Judge Hairston's formulation of the first issue adequately and fairly put the dispute to the jury and that the jury's answer to that issue entitles defendant to a judgment in her favor. The Court of Appeals erred, therefore, in remanding for a new trial on this ground urged by plaintiff.

As both the Court of Appeals and Judge Hairston correctly noted, this is not an action on a contract. It is a claim based on the equitable doctrine of unjust enrichment. The theory, however, which plaintiff has invoked both in his pleadings and proof to support his claim is this: Knowing the realty to be owned by defendant, he nevertheless made and paid for improvements under the inducement of defendant's express promise that she would convey to him an entirety interest in the property. Although plaintiff does not seek to enforce such a promise, and could not because it is not in writing, ³ he seeks to recover his costs in making the improvements ⁴ on the ground that because he was induced by defendant's promise to make the...