Opinion
No. A03-984.
Filed March 30, 2004.
Appeal from the District Court, Isanti County, File No. C2-02-1198.
Gregory A. Abbott, Gregory A. Abbott, Esq., and Stephen A. Bard, Bard Bard, Ltd., (for appellant).
Douglas G. Sauter, Barna, Guzy Steffen, Ltd., (for respondent).
Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Harten, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant challenges summary judgment, arguing that the district court erred by applying the anti-palimony statutes to bar his claims for constructive trust and unjust enrichment and that fact questions precluded summary judgment on his claims for fraud and conditional gift. As to appellant's fraud and conditional gift claims, because no genuine issue of material fact exists, we affirm the summary judgment; because genuine issues of material fact preclude summary judgment on the constructive trust and unjust enrichment claims, we reverse and remand them.
FACTS
Appellant Christian V. Kraemer and respondent Kathryn A. Larson began dating in March 1999. Both parties were then married but separated from their spouses. Judgment was entered in respondent's divorce in October 1999 and in appellant's divorce in April 2001. The parties were engaged in December 1999 and began living together with relatives or in rental property. They never married; their relationship terminated in September 2002.
Appellant's now deceased maternal grandparents, Walter J. Steiner and Grace L. Steiner, had established an irrevocable trust (the Steiner Trust), of which appellant's mother and aunt were co-trustees. On 29 August 2000, the Steiner Trust conveyed to respondent five acres of vacant land near Princeton, Minnesota. The circumstances of the conveyance are disputed: appellant claims that he convinced the trustees to convey the property to respondent because, among other things, appellant was unable to obtain financing to build a house on the property. Respondent claims that appellant's mother approached her and offered the land because she wanted appellant and respondent to live near her. Respondent also claims that appellant's mother refused her offer to pay for the land.
At the time of the conveyance, the five acre parcel was vacant except for a driveway that appellant had constructed in the summer of 1999. The property value at the time of the conveyance is disputed: appellant presented evidence that the parcel was worth approximately $3,000 per acre; respondent presented evidence that it was only worth about $1,000 per acre.
Respondent obtained financing for the property, but the parties dispute the loan amounts and how the proceeds were used. Appellant claims that the proceeds were used to pay for building materials and to reimburse respondent for any funds she used in acquiring the financing or the materials. Appellant also claims that he bought groceries for the household and paid respondent at least $500 in cash each month for living expenses and a portion of the mortgage payment. Respondent claims that appellant made no financial contributions to the construction of the house or the real estate.
After respondent obtained financing, a house was purchased and moved onto the property. The parties remodeled the house and added new construction to it. Several facts regarding the construction are disputed, including the amount and value of labor appellant contributed to the construction, the amount each paid to third parties for construction, and the amount of service appellant bartered with third parties.
In September 2002, respondent called off the parties' engagement and requested that appellant move out; he moved to his mother's residence. Appellant filed suit one month later, claiming an equitable interest in the property based on: (1) constructive trust, (2) unjust enrichment, (3) fraud, and (4) conditional gift; he also filed a notice of lis pendens on the property. Respondent counterclaimed for slander of title.
Respondent made arrangements to sell the property and executed a purchase agreement on 6 March 2003 to sell for $215,000.
The parties attempted to schedule a time for appellant to collect items of personal property that remained on the property. In January 2003, appellant moved to amend the complaint to add a claim for conversion of personal property but that was later withdrawn by agreement of the parties.
Respondent moved for summary judgment on all claims. She also sought sanctions, alleging that the law firm that represents appellant in this matter also represented the Steiner Trust when the property was conveyed to respondent. The district court granted summary judgment dismissing all of appellant's claims, denied summary judgment on respondent's slander of title claim, denied her motion for sanctions, and removed the notice of lis pendens. Appellant now challenges the summary judgment.
The slander of title claim was dismissed and is now moot.
DECISION
When reviewing summary judgment, appellate courts determine (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). Motions for summary judgment are granted when pleadings, depositions, answers to interrogatories, and admissions, together with any affidavits, show that there is no genuine issue of material fact and that either party is entitled to judgment as a matter of law. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The moving party bears the burden of demonstrating that no material fact issues exist. Thiele v. Stich, 425 N.W.2d 580, 583 (Minn. 1988). On appeal, reviewing courts must view the evidence in a light most favorable to the party against whom judgment was granted. Fabio, 504 N.W.2d at 761.
1. Constructive Trust and Unjust Enrichment Claims
Appellant argues that the district court erred by applying the anti-palimony statutes to bar his claims for constructive trust and unjust enrichment. The anti-palimony statutes provide for the enforcement of financial and property agreements between cohabitating couples:
If sexual relations between the parties are contemplated, a contract between a man and a woman who are living together in this state out of wedlock, or who are about to commence living together in this state out of wedlock, is enforceable as to terms concerning the property and financial relations of the parties only if:
(1) the contract is written and signed by the parties, and
(2) enforcement is sought after termination of the relationship.
Minn. Stat. § 513.075 (2002). If a financial or property agreement between cohabitants does not comply with section 513.075, courts are "without jurisdiction and shall dismiss as contrary to public policy any claim" based on the couple living together out of wedlock. Minn. Stat. § 513.076 (2002).
The anti-palimony statutes "apply only where the sole consideration for a contract between cohabitating parties is their contemplation of sexual relations out of wedlock." In re Estate of Eriksen, 337 N.W.2d 671, 674 (Minn. 1983) (quotation omitted). "[U]nless the sexual relationship constitutes the sole consideration for the property agreement, cohabitating parties may maintain actions against each other regarding their own earnings or property, based on equitable theories such as constructive trust or unjust enrichment." Obert v. Dahl, 574 N.W.2d 747, 749 (Minn. App. 1998), aff'd, 587 N.W.2d 844 (Minn. 1999). A cohabitant may not recover for general contributions made to the relationship, but may recover the value of direct contributions to the property. In re Estate of Palmen, 588 N.W.2d 493, 496 (Minn. 1999).
Respondent argues that Roatch v. Puera, 534 N.W.2d 560 (Minn. App. 1995); Mechura v. McQuillan, 419 N.W.2d 855 (Minn. App. 1988); Tourville v. Kowarsch, 365 N.W.2d 298 (Minn. App. 1985); and Hollom v. Carey, 343 N.W.2d 701 (Minn. App. 1984) have distinguished Eriksen. But these cases were appeals from judgments, where a trial court made findings on the existence and nature of any agreements between the cohabitants regarding property. None involves summary judgment.
The district court found that appellant's claims amounted to assertion of a right in respondent's property and the anti-palimony statutes required that the claims be rejected. But appellant's alleged equitable ownership interest in the property is the basis for the parties' dispute. See Vieths v. Thorp Fin. Co., 305 Minn. 522, 525, 232 N.W.2d 776, 778 (Minn. 1975) (summary judgment is not a trial of fact issues and determines only whether issues of fact exist).
Appellant presented evidence that an agreement between the parties regarding the ownership and division of the property was supported by consideration other than their sexual relationship. In his affidavit, appellant stated that he contributed more than 1,000 hours of labor to the construction of the home and the landscaping of the property. Affidavits from contractors who worked on the house establish that appellant paid for much of the work either in cash or through bartering of his services. Appellant also testified that the Steiner Trust contributed the five acres of land at his direction. He stated that respondent contributed to the property by obtaining financing for the house and construction materials.
Viewing this evidence in a light most favorable to appellant, we conclude that fact issues exist as to whether his unjust enrichment and constructive trust claims are based solely on his relationship with respondent. Because these fact issues are material to whether the anti-palimony statute should apply to appellant's claims, summary judgment is precluded.
2. Fraud Claim
Appellant argues that the district court erred in granting summary judgment on his fraud claim, which is based on the allegation that respondent misrepresented herself when she promised to marry appellant in a scheme to obtain title to the property. But actions based upon breaches of a promise to marry have been abolished as contrary to public policy. Minn. Stat. § 553.01 (2002). Therefore, the district court properly granted summary judgment on this claim.
3. Conditional Gift Claim
Finally, appellant argues that the district court improperly granted summary judgment on his conditional gift claim, reasoning that his claim for the property survives summary judgment because the district court found that a claim for an engagement ring would survive. Where a gift is conditioned on the performance of an act and the condition is not fulfilled, the donor may recover the gift. Benassi v. Back Neck Pain Clinic, Inc., 629 N.W.2d 475 (Minn. App. 2001), review denied (Minn. 11 Sept. 2001). But here, the donor of the parcel of land was the Steiner Trust, not appellant. Accordingly, the district court properly granted summary judgment on appellant's conditional gift claim.
Appellant never made any claim for an engagement ring. It is possible that the district court relied on the proposed amended complaint when considering summary judgment, but the complaint was never amended to include claims for personal property.