Opinion
No. CV05-4013785S
May 30, 2008
MEMORANDUM OF DECISION
This is a civil action in which the plaintiff has brought suit against his former mother-in-law and father-in-law alleging the existence of a constructive trust with reference to certain money payments made by him to the defendants over approximately a thirteen-year period.
The complaint is in two counts, the first seeking a recovery based on the alleged constructive trust, and the second alleging a breach of contract. The defendants deny both claims. In addition, the defendants have pleaded by way of special defenses that the contract fails to comply with the statute of frauds and that any claim by the plaintiff for reimbursement of monies paid for rent or improvements more than six years prior to the service of the complaint is barred by the statute of limitations.
The case was tried by this court on August 17, 2007. Memoranda has been filed by the parties and the court heard oral argument on January 28, 2008.
The court finds the following facts and reaches the following conclusions. The plaintiff and the defendant's daughter, Carol, were married on June 18, 1988. Prior to the marriage, they had dated on and off for twelve years. After their marriage they resided as tenants in a second-floor apartment on Arden Street in New Haven for approximately one year. During the course of the marriage they had three daughters, now approximately 18, 14 and 10 years of age. The plaintiff, throughout the marriage has been, and still is employed as a firefighter with the New Haven Fire Department.
In July 1989, the defendants told the plaintiff and Carol that a house across the street from where the defendants lived was for sale, and they were going to buy it and rent it to the plaintiff and Carol with an option to buy. The defendants lived at 40 Hopkins Drive in New Haven and the house for sale was located at 25 Hopkins Drive. The plaintiff, Carol, and both defendants visited the property in July 1989. It was in bad shape because the owner was a heavy smoker and the inside of the home was coated with nicotine. The defendants offered to purchase the house and to rent it to the plaintiff and Carol for $575.00 a month with an option to buy, and the rent paid would be applied towards the eventual purchase price of the house. The plaintiff and Carol accepted the offer. There was no discussion about the purchase price or when the purchase by the plaintiff and Carol would occur.
The offer was made by Mr. Mariano and Mrs. Mariano nodded, indicating her approval of the offer. She did not indicate any objection to the offer. Mr. Mariano was the dominant person in his home and he made all of the significant decisions. At no time during the marriage of the plaintiff and Carol did Mrs. Mariano ever voice any objection or indicate in any way that she objected to whatever Mr. Mariano proposed with respect to 25 Hopkins Drive. Her conduct throughout the relationship demonstrated that she agreed with what her husband said.
The parties have agreed that the plaintiff has paid rent for 25 Hopkins Drive totaling between $107,000 — $108,000. Based on the plaintiff's brief and his oral argument, he is not pursuing a claim of breach of contract, but does ask the court to prevent the defendants from being unjustly enriched by awarding him one-half of the rents paid, or one-half of the value of the house by way of imposing a constructive trust.
During the time in which the plaintiff and Carol were dating and throughout their marriage, until November 2002, the plaintiff had a very friendly relationship with the defendants. While they were dating the plaintiff frequently visited at the defendants' home and socialized with Mr. Mariano. He had a good relationship with both defendants. The plaintiff had a relationship with Mr. Mariano that was similar to that of a father and son. The plaintiff trusted the defendants based on his familial relationship with them and did not feel it necessary to get anything in writing concerning the terms of the option to buy 25 Hopkins Drive.
The defendants purchased 25 Hopkins Drive on July 10, 1989 for $182,000 and the plaintiff and Carol moved in on August 1, 1989. They engaged in extensive cleaning and renovations to the property. In addition to their own labor over the ensuing years, they spent approximately $12,000 in connection with the improvements to the property. In addition, Mr. Mariano, who is a licensed electrician, did considerable electrical work at no charge to the plaintiff and his wife, he also expended considerable sums of money for repairs and renovations, and he has paid all real estate taxes, which at the time of trial totaled $65,000.
The plaintiff and Carol paid rent of $575.00 a month from August 1, 1989 to August 1992 when the rent was raised to $700.00. The plaintiff had instituted a dissolution of marriage action earlier in 1992, which he decided not to pursue, and he believed that the increase in rent was related to the filing of the dissolution action. The rent of $700 a month was paid thereafter. The monthly rent that the plaintiff and Carol paid while they lived in the house was lower than the fair rental value.
In 1995 the plaintiff and Carol talked to the defendants about purchasing the house. Mr. Mariano stated that they wanted $170,000 for the house and Mrs. Mariano indicated that she agreed with that demand by nodding and not saying anything by way of an objection. Mr. Mariano does not dispute the plaintiff's claim that when he and Carol purchased 25 Hopkins Drive they agreed to give the plaintiff and Carol an option to buy at an unspecified date with the rent payments being credited to an unspecified purchase price. However, he claims that the option was limited to a two-year period, but he does not dispute that he and his wife offered to sell the house in 1995 for $170,000 or $169,900. That the defendants were willing to sell the house for less than their initial purchase price after six years' ownership appears to contradict Mr. Mariano's claim that the option was limited to two years. The plaintiff and Carol decided not to buy the house at that price.
In October 1992, Carol told the plaintiff that her father had decided that he wanted to sell them the house for $100,000. The plaintiff asked Carol to talk to her father again and see if he would take $80,000. Carol reported back that her father insisted on $100,000. Based on what Carol had told him about her conversations with her father, the plaintiff approached Mr. Mariano and asked whether Mr. Mariano would take $80,000 for the home. Mr. Mariano said he would not go below his original price of $100,000 and the plaintiff and Carol agreed to pay that sum. The plaintiff felt the $100,000 demand was reasonable in that he believed the defendants were giving them a credit of over $100,000 based on the rents paid, thus bringing the total price to slightly over $200,000 for a property for which the defendants had paid $182,000 in 1989. The plaintiff and Carol had $25,000 on hand and they decided to obtain financing for the remaining $75,000 at People's Bank. Various documents were signed by both of them and they obtained a commitment for a $75,000 loan on November 5, 2002 on 25 Hopkins Drive. The plaintiff expended approximately $500.00 in connection with obtaining the commitment.
After obtaining the commitment from the bank, the plaintiff had his niece, who was a real estate agent, prepare a contract of purchase and sale which required the signature of the defendants as owners of the property. At this point the defendants refused to sign the purchase and sale agreement. No reason was given by either defendant as to why they would not sign the agreement. On November 26, 2002 Carol served the plaintiff with a dissolution of marriage action. It was the collapse of the plaintiff's marriage to Carol that caused the defendants to refuse to sell the house. The plaintiff agreed to vacate the house in March 2003. The marriage was dissolved by a judgment of this court on March 7, 2005 (Frazzini, J.). Carol and their three children now occupy the house and do not pay any rent. The title to 25 Hopkins Drive remains with the defendants.
The plaintiff is asking the court to order the imposition of a constructive trust of one-half of either the amount of rents paid or the value of 25 Hopkins Drive. The basis for the request for one-half is because, in the dissolution of marriage case, Judge Frazzini ordered that any interest in the property which the plaintiff and Carol were determined to have in the event that a constructive trust was imposed would be divided equally between the parties. Carol is not a party in this action and therefore the plaintiff is requesting one-half of the amount of any constructive trust imposed.
"A constructive trust arises where a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it." 5 Scott on Trusts (3d Ed.) § 462, p. 3413. "It is not a trust in which the trustee is to have duties of administration lasting for an appreciable period of time, but rather a passive, temporary trust, in which the trustee's sole duty is to transfer the title and possession to the beneficiary:" (Emphasis added.) Bogert, Law of Trusts (5th Ed.) § 77, p. 288. Brown v. Brown, 190 Conn. 345, p. 349.
In Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378 (1919), Judge Cardozo wrote: "A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee." See 5 Scott, Trusts (3d Ed.) § 462, p. 3413. The imposition of a constructive trust by equity is a remedial device designed to prevent unjust enrichment. 5 Scott, op. cit. § 462. Thus, a constructive trust arises where a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. See, e.g., Cherno v. Dutch American Mercantile Corporation, 353 F.2d 147, 153 (2d Cir. 1965); Mellon National Bank Trust Co. v. Esler, 357 Pa. 525, 528-29, 55 A.2d 327 (1947); Restatement, Restitution (1937) § 160; 5 Scott, op. cit. §§ 462, 462.2; 30 C.J.S., Equity § 95, p. 1028. One holding title to property upon which a constructive trust is imposed is not compelled to reconvey the property because he is a constructive trustee; it is because he can be compelled to convey title to the property that he is a constructive trustee. 5 Scott, op. cit. § 462, p. 3413. Cohen v. Cohen, 182 Conn. 193, pp. 202-03. "As we have recognized often, "[a] right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another. Franks v. Lockwood, 146 Conn. 273, 278, 150 A.2d 215; Schleicher v. Schleicher, 120 Conn. 528, 534, 182 A. 162. Connecticut National Bank v. Chapman, 153 Conn. 393, 399, 216 A.2d 814. With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard. Cecio Bros., Inc. v. Greenwich, [ 156 Conn. 561, 564-65, 244 A.2d 404 (1968)] . . . Providence Electric Co. v. Sutton Place, Inc., 161 Conn. 242, 246, 287 A.2d 379 (1971); Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 282, 649 A.2d 518 (1994)." (Internal quotation marks omitted.) Meaney v. Connecticut Hospital Ass'n., Inc., 250 Conn. 500, 511-12, 735 A.2d 813 (1999).
As indicated in the cases cited above, a constructive trust arises where the person or persons holding title to property is subject to an equitable duty to convey it to another person on the ground that the title holder would be unjustly enriched if he were permitted to retain it. The first count of the complaint seeking the imposition of a constructive trust on a sum of money alleges that to allow the defendants to retain the rents which had been paid and the value of improvements made to the property by the plaintiff and Carol results in the defendants being unjustly enriched. The plaintiff does not request a conveyance of the property.
"Unjust enrichment is a very broad and flexible equitable doctrine that has as its basis the principle that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him at the expense of the plaintiff. National CSS, Inc. v. Stamford, supra, 195 Conn. 597. The doctrine's three basic requirements are that (1) the defendant was benefitted, (2) the defendant unjustly failed to pay the plaintiff for the benefits, and (3) the failure of payment was to the plaintiff's detriment. Bolmer v. Kocet, 6 Conn.App. 595, 612-13, 507 A.2d 129 (1986). All the facts of each case must be examined to determine whether the circumstances render it just or unjust, equitable or inequitable, conscionable or unconscionable, to apply the doctrine. Meaney v. Connecticut Hospital Ass'n., Inc., supra, 250 Conn. 511-12." Gagne v. Vaccaro, 255 Conn. 390.
In this case the facts do not support a finding that the defendants were unjustly enriched by the conduct of the plaintiff and Carol. The defendants purchased the home at 25 Hopkins Drive. The rents paid by the plaintiff for over thirteen years were less than fair market rents. Mr. Mariano expended several thousands of dollars in improvements as well as performing certain labor around the house. Mr. Mariano paid all of the real estate taxes totaling over $65,000. The plaintiff and Carol also contributed money and labor in maintaining and improving the property during their thirteen-year occupancy. However, after due consideration of all the evidence, the court finds that the plaintiff has failed to prove that the defendants accepted or retained benefits to an extent that they have been unjustly enriched by the acts of the plaintiff and Carol.
Accordingly, for the reasons above set forth, a judgment may enter in favor of the defendants on both counts of the complaint.