Opinion
No. 26162-0-III.
May 6, 2008.
Appeal from a judgment of the Superior Court for Spokane County, No. 06-2-00790-0, Paul A. Bastine, J., entered April 23, 2007.
Reversed and remanded by unpublished opinion per Kulik, A.C.J., concurred in by Sweeney, J., and Thompson, J. Pro Tem.
Christopher Duncan and Catherine Peterschick cohabited for one year and then bought a house together. They each paid one-half of the down payment and the mortgage payments. Mr. Duncan and Ms. Peterschick lived in the house for three years. The couple eventually split up. Initially, the parties rented the property and used the rent proceeds to pay the mortgage. Ms. Peterschick then moved back into the property and paid the mortgage. At one point, Ms. Peterschick obtained a protection order against Mr. Duncan, preventing him from coming onto the property.
Mr. Duncan filed a complaint seeking partition and sale of the property. The court concluded that Mr. Duncan and Ms. Peterschick had not formed a meretricious relationship, and that Mr. Duncan had been ousted. The court divided the equity in the property equally between the parties.
Partition is an equitable remedy. Where co-owners contribute unequally to the purchase price, a presumption arises that they intended to share the property proportionate to their individual contributions. We conclude that (1) the trial court erred by determining Mr. Duncan had been ousted, and (2) the trial court abused its discretion by ignoring the co-owners' unequal contributions. We reverse and remand for the trial court to calculate the amount of each party's ownership interest based on their individual contribution toward the purchase price.
FACTS
Christopher Duncan and Catherine Peterschick began an intimate relationship in 1995 or 1996. In March 1997, they rented a house together and began cohabiting. One year later, in March 1998, they jointly purchased a house at 4111 East 37th Avenue, Spokane, Washington (East 37thAvenue property).
Mr. Duncan and Ms. Peterschick purchased the property for $82,157. They jointly obtained a mortgage to pay the purchase price. Their loan application listed them as unmarried. The warranty deed also identifies them as unmarried and does not indicate any percentage of ownership. Mr. Duncan and Ms. Peterschick each contributed a down payment of approximately $2,000. And, initially, they each paid one-half of the mortgage payments.
Mr. Duncan and Ms. Peterschick lived together at the East 37th Avenue property from March 1998 until June 2000 when they moved together into a house purchased solely by Mr. Duncan. This house was located at 6309 South Assembly (Assembly property). Ms. Peterschick testified that she could have participated in this purchase, but she elected not to do so.
During the time Mr. Duncan and Ms. Peterschick lived together at the Assembly property, the property on East 37th Avenue was rented to a third party for $900 per month. The rent money was applied toward the mortgage payment on the property.
The findings of fact state that Ms. Peterschick paid rent on the Assembly property of $350 to Mr. Duncan. Both Mr. Duncan and Ms. Peterschick state that the amount was $350 per month. Ms. Peterschick maintains that her payment was a contribution, not rent.
During their relationship, Mr. Duncan and Ms. Peterschick jointly purchased two jet skis. When the jet skis were sold, Mr. Duncan retained the proceeds. The trial court determined that no evidence of any other joint acquisitions was persuasive.
By April 2001, Mr. Duncan's and Ms. Peterschick's relationship had deteriorated. Ms. Peterschick moved out of the Assembly property and back into the property on East 37th Avenue. This property is a single residence. The trial court determined that the property did not have separate entrances and was not conducive to multi-family living. Ms. Peterschick has maintained exclusive control of the property. With the exception of a brief interlude in May 2001, Mr. Duncan had not been inside the East 37th Avenue property since April 2001.
In January 2002, Mr. Duncan married Lori Tschetter. Between November 2005 and November 2006, Ms. Peterschick did not reside at the East 37th Avenue house. During this time, she collected $725 per month rent on the East 37th Avenue property. In November 2006, Ms. Peterschick moved back into the East 37th Avenue property.
The court found that since May 2001, Ms. Peterschick had actively excluded Mr. Duncan from the East 37th Avenue property. This conclusion was based primarily on the finding that Ms. Peterschick obtained a protection order against Mr. Duncan which prohibited him from coming near her or the East 37th Avenue house. The order was issued on May 10, 2002, and expired one year later.
The court found that this order was in response to a letter written by Mr. Duncan and posted on Ms. Peterschick's front door. The letter stated that Mr. Duncan was going to assert his ownership rights against the property. Previously, Ms. Peterschick had agreed (1) to sell the East 37th Avenue property once she had completed her occupational therapy board examinations in March 2002, or (2) to buy out Mr. Duncan's one-half interest in the property.
Beginning on April 1, 2001, Ms. Peterschick made all of the payments on the East 37th Avenue property. The only exception was a payment of late fees by Mr. Duncan to preserve his credit rating. Mr. Duncan periodically checked the status of the mortgage because he remained liable on the mortgage. Ms. Peterschick incurred expenses for necessary repairs in the amount of $1,140.17.
Ms. Peterschick's friends and relatives testified they thought Mr. Duncan and Ms. Peterschick were going to be married. Mr. Duncan denied that he proposed to Ms. Peterschick. Ms. Peterschick testified that they were to be married but had not made the arrangements. However, Ms. Peterschick also testified that she did not want to get married until she had finished her education. During the time the parties lived together, Ms. Peterschick incurred substantial student loans.
Mr. Duncan and Ms. Peterschick did not hold themselves out as husband and wife. And except for their athletic membership, Ms. Peterschick used her separate name.
In February 2006, Mr. Duncan filed a complaint for partition and for sale of real property under chapter 7.52 RCW. Ms. Peterschick sought an award of all she had acquired since April 1, 2001. She pointed out that she had made all of the payments on the mortgage, taxes, and insurance from that date until the date of trial.
The trial court found that Mr. Duncan and Ms. Peterschick had not formed a meretricious relationship and that the equity in the East 37th Avenue property should be divided equally after deducting Ms. Peterschick's costs of improvement. The court entered findings of fact and conclusions of law, and denied Ms. Peterschick's motion for reconsideration.
Ms. Peterschick appeals.
ANALYSIS
An issue of equity is reviewed for an abuse of discretion. In reMarriage of Konzen, 103 Wn.2d 470, 478, 693 P.2d 97 (1985). Unchallenged findings of fact are verities on appeal. Rivers v. Wash. State Conferenceof Mason Contractors, 145 Wn.2d 674, 692, 41 P.3d 1175 (2002). Challenged findings of fact are reviewed to determine whether they are supported by substantial evidence, and whether the findings support the trial court's conclusions of law. Nordstrom Credit, Inc. v. Dep't of Revenue, 120 Wn.2d 935, 939, 845 P.2d 1331 (1993). Conclusions of law are reviewed de novo. Soltero v. Wimer, 159 Wn.2d 428, 433, 150 P.3d 552 (2007).
Meretricious Relationship. "A meretricious relationship is a stable, marital-like relationship where both parties cohabit with knowledge that a lawful marriage between them does not exist." Connell v. Francisco, 127 Wn.2d 339, 346, 898 P.2d 831 (1995) (citing In re Marriage of Lindsey, 101 Wn.2d 299, 304, 678 P.2d 328 (1984)). Generally, five factors are considered to determine whether a meretricious relationship exists: continuous habitation, duration of the relationship, pooling of resources, services for joint projects, and the intent of the parties. Lindsey, 101 Wn.2d at 304-05. If a meretricious relationship exists, the court must examine the property accumulations and make a just and equitable disposition of the property. Id. at 304 (quoting Latham v. Hennessey, 87 Wn.2d 550, 554, 554 P.2d 1057 (1976)).
The trial court concluded that Mr. Duncan and Ms. Peterschick had not formed a meretricious relationship. The court determined that the facts failed to establish two elements of a meretricious relationship: pooling of resources, and the intent of the parties to be in a meretricious relationship. Hence, our review is limited to the findings of facts supporting the court's conclusions regarding these two elements.
One element of a meretricious relationship is intent. This element requires the parties to demonstrate a mutual intent to be in a meretricious relationship. In re Pennington, 142 Wn.2d 592, 604, 14 P.3d 764 (2000).
Because the trial court properly found a lack of intent to form a meretricious relationship, we need not review whether there was a pooling of resources. The court correctly concluded that the parties did not demonstrate an intent to be in a meretricious relationship.
Mr. Duncan and Ms. Peterschick did not hold themselves out as husband and wife. Mr. Duncan denied having proposed marriage to Ms. Peterschick, and she testified that she did not want to get married until she had finished her education.
Ouster. The court determined that Mr. Duncan was "ousted" as of April 1, 2001. Clerk's Papers (CP) at 259. On that date, Ms. Peterschick moved back into the East 37th Avenue property while Mr. Duncan remained in the Assembly property. On May 10, 2002, Ms. Peterschick obtained a protection order which prohibited Mr. Duncan from coming near her or the house. Nevertheless, Ms. Peterschick asserts that Mr. Duncan was not ousted.
A cotenant claiming adverse possession of another tenant's interest in the shared property must prove ouster. Thor v. McDearmid, 63 Wn. App. 193, 207, 817 P.2d 1380 (1991). Because cotenants are presumed to possess their property in common, the standard of proof for ouster is more stringent than for adverse possession. Nicholas v. Cousins, 1 Wn. App. 133, 137, 459 P.2d 970 (1969).
To prove ouster, a cotenant must offer clear and convincing evidence of an unequivocal outward act of exclusive ownership by a tenant in possession precluding any idea of joint ownership and which was conveyed to the cotenant. Id. One cotenant's exclusive possession of the shared property for the prescriptive period is insufficient to trigger the statute of limitations. Shull v. Shepherd, 63 Wn.2d 503, 505, 387 P.2d 767 (1963) (quoting Church v. State, 65 Wash. 50, 55, 117 P. 711 (1911)). "In order for ouster to exist, there must be an assertion of a right to exclusive possession." Cummings v. Anderson, 94 Wn.2d 135, 145, 614 P.2d 1283 (1980).
Mr. Duncan contends he was excluded from the East 37th Avenue property because Ms. Peterschick had exclusive possession of the property, and the court found that the property "is a single family residence, not having separate entrances, and is not conducive to multi-family living." CP at 255.
Mere possession is insufficient to prove ouster. However, "where the property is not adaptable to double occupancy, the mere occupation of the property by one cotenant may operate to exclude the other." Id. Here, the court made no finding that the property could not be adapted to double occupancy. Instead, the court found the property was "not conducive to multi-family living." CP at 255. To the extent that the court's decision was based on Ms. Peterschick's possession of the property, the decision was erroneous.
The court also concluded that Ms. Peterschick actively excluded Mr. Duncan by obtaining a protection order that prohibited Mr. Duncan from coming near the house or her personally. But the protection order obtained by Ms. Peterschick does not constitute such an act. This protection order was issued pursuant to chapter 26.50 RCW — the Domestic Violence Prevention Act. The purpose of the act is to protect victims, not to affect property rights. See State v. Karas, 108 Wn. App. 692, 700, 32 P.3d 1016 (2001). Importantly, RCW 26.50.200 provides: "Nothing in this chapter may affect the title to real estate."
The court erred in its determination that Mr. Duncan was ousted from the property. The findings of fact do not establish an unequivocal act precluding joint ownership. Hence, there is no support for the court's conclusion that Mr. Duncan was ousted from the property. Because Mr. Duncan was not ousted from the East 37th Avenue property, this court need not address his claim for rent during the alleged ouster or the issue as to whether he abandoned the property.
Partition of the East 37th Avenue Property. A partition of property owned in common is an equitable remedy. The court has great flexibility when fashioning equitable remedies. Carson v. Wallstadter, 65 Wn. App. 880, 883, 830 P.2d 676 (1992). An appellate court reviews the trial court's authority to fashion this remedy for an abuse of discretion. In re Foreclosure of Liens, 123 Wn.2d 197, 204, 867 P.2d 605 (1994).
Where co-owners acquire property, and the agreement by which the property was purchased does not set forth the interests of the co-owners, a court will presume that they intended to share equally. However, if it is shown that the co-owners contributed unequally to the purchase price, a presumption arises that they intended to share the property proportionately to the purchase price. Cummings, 94 Wn.2d at 140.
In Cummings, a couple contemplating marriage bought the purchaser's interest in a contract for the sale of a residence as tenants in common. Id. at 136. The parties later married, but Ms. Cummings subsequently left the home taking substantially all of the community property, including the cash. Id. at 137. She was granted a default dissolution. Mr. Anderson remained in possession of the house and continued to make payments. Shortly before the last payment was due, Ms. Cummings brought a suit claiming rent and a one-half interest in the purchaser's equity. Id. at 137.
The court concluded that Ms. Cummings had equity in the property in the same ratio to the total equity as the ratio of her investment to the total investment. Id. at 144. The court also found that Mr. Anderson was not owed rent because there was no ouster. Id. at 145.
The facts in Cummings are similar to the facts here. In both cases, a co-habiting couple purchased property together, the couple separated, and, later, one partner requested a one-half interest in the equity of the property even though the other had made more payments. In Cummings, the court awarded each party an interest in the equity in proportion to their portion of the investment.
Mr. Duncan argues that Cummings is not applicable because the parties later married and then divorced. But this distinction is not significant. The court in Cummings did not base its decision on a finding of a marital or meretricious relationship. Instead, the court concluded that the character of ownership was a cotenancy. Id. at 140.
Mr. Duncan also finds Cummings unhelpful because Ms. Cummings abandoned the house without notice or explanation. Presumably then, because there was no finding that Mr. Duncan abandoned the East 37th Avenue property, he is entitled to one-half of the equity in the property. This argument is contrary to Cummings. Partition is an equitable remedy and if it is shown that the co-owners contributed unequally to the purchase price, a presumption arises that they intended to share the property proportionately to the purchase price. Id.
Here, it is undisputed that the parties made unequal contributions to the property creating a presumption they intended to share the property in proportion to their interest in the purchase price.
The court's division of the equity constituted an abuse of discretion. The trial court erred by awarding Mr. Duncan and Ms. Peterschick equal portions of the equity in the East 37th Avenue property.
Joint Venture. The court concluded that the parties' investment in the East 37th Avenue property constituted a joint venture. Ms. Peterschick argues that even if the parties were engaged in a joint venture, the court erred by dividing the property equally.
Ms. Peterschick relies on Poole v. Schrichte, 39 Wn.2d 558, 236 P.2d 1044 (1951). In Poole, a couple cohabited and, by their joint efforts, acquired a tavern. However, the bill of sale, lease, and liquor licenses were in Mr. Schrichte's name. Id. at 560. Ms. Poole later left the relationship because of Mr. Schrichte's physical abuse. Id. at 561. The trial court awarded Ms. Poole $5,000 in lieu of a one-half interest in the tavern and the profits therefrom subsequent to her exclusion from participation in the tavern's operation. Id. Mr. Schrichte appealed. The appellate court affirmed the $5,000 award to Ms. Poole, concluding that the court had the authority to divide the property based on its equitable power and that "the innocent party may be awarded such proportion of the property accumulated as would under all the circumstances be just and equitable." Id. at 569.
Poole is not particularly helpful because of its procedural posture. Ms. Poole did not appeal, Mr. Schrichte did. The court affirmed the equal division of the property Page 14 awarded by the trial court. But the appellate court approved an award of whatever portion of the property would be just and equitable. The court indicated that it would have awarded Ms. Poole a greater portion of the property if she had appealed. Poole also talks about the innocent party rule.
The trial court apparently adopted the theory that Ms. Poole was an innocent party whose rights must be protected by a court of equity because she believed she was in a common law marriage. Poole, 39 Wn.2d at 566.
Overall, the language in Poole supports the court's decision in Cummings. In Poole, the court concluded that its authority to divide the property accumulated during this type of relationship was not limited to an equal division of the property. Id. Rent on Assembly Property. Finding of fact 8 states, in part, that: "[Ms.] Peterschick paid rent for the Assembly property in the approximate amount of $350.00 to [Mr.] Duncan." CP at 255.
However, Mr. Duncan testified that he collected rent from Ms. Peterschick in the amount of $350 per month for 9 months. And Ms. Peterschick testified that she paid $350 per month for 10 months to Mr. Duncan on the Assembly property.
The court erred by finding that Ms. Peterschick paid only $350. The evidence does not support this portion of the findings. But there is evidence to support the court's characterization of these payments as rent. Because these payments were rent, Ms. Peterschick has no ownership interest in the Assembly property.
Conclusion. The trial court's division of property constituted an abuse of discretion. We reverse and remand for the trial court to calculate the amount of ownership interest by each party in the East 37th Avenue property. The amount awarded to each party should be based on the presumption that the parties intended to share the property in proportion to their contribution toward the purchase price.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
Sweeney, J., Thompson, J. Pro Tem, concur.