Tuesday, October 11, 2016
Financial Cohabitation Claims Update
Jeremy D. Morley
Courts in the United States have followed differing paths concerning an unmarried partner’s financial claims arising out of their cohabitation.
The rule in New York is that a contract as to earnings and assets may not be implied in law from the relationship of an unmarried couple living together, but that such a couple are free to contract with each other in relation to personal services, including domestic or “housewifely” services, and that there is no requirement that such a contract be in writing Morone v. Morone, 50 N.Y.2d 481 (1980).
In contrast Indiana, for example, has long ruled that an unmarried partner may be entitled to relief upon a showing of an express contract or a viable equitable theory such as an implied contract or unjust enrichment. Bright v. Kuehl, 650 N.E.2d 311 (Ind. Ct. App. 1995),
Now the Indiana Court of Appeals has refused to reconsider the Indiana rule. McMahel v. Deaton, 2016 WL 477841 (Ind.App.2016).
In its earlier case it specifically held that, “[t]o recover under the theory of implied contract, the plaintiff is usually required to establish that the defendant impliedly or expressly requested the benefits conferred” and that “[a]ny benefit, commonly the subject of pecuniary compensation, which one, not intending it as a gift, confers upon another who accepts it, is an adequate foundation for a legally implied or created promise to render back its value.” Id. (citations omitted).
It further held that, “[t]o prevail on a claim for unjust enrichment, a plaintiff must establish that a measurable benefit has been conferred on the defendant under such circumstances that the defendant’s retention of the benefit without payment would be unjust” and that “[p]rinciples of equity prohibit unjust enrichment of a party who accepts the unrequested benefits another provides despite having the opportunity to decline those benefits.”
In the latest case, it upheld a finding that a man had been unjustly enriched when his 17-year cohabitation with his former girlfriend ended. The woman had provided monetary and other contributions during their cohabitation, cleaned the gutters, painted the house, cleaned the toilets, cooked, and was the primary caretaker of the parties' son. The value of her earnings was 30% of the man’s earnings, and the court awarded her approximately 30% of the parties' combined assets.