Cates v. Swain
2013 WL 1831783, 215 So. 3d 492, 2013 Miss. LEXIS 188 (2013)
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Rule of Law:
The equitable remedy of unjust enrichment is available to unmarried cohabitants for specific, identifiable monetary contributions to property titled in the other's name, provided the claim is based on those contributions rather than the relationship itself.
Facts:
- In 2000, Elizabeth Swain and Mona Cates began a cohabiting romantic relationship. Swain remained legally married to, but estranged from, her husband throughout the relationship.
- In late 2000, Swain bought a house in Florida, with Cates contributing $2,000 in earnest money.
- In 2003, Swain sold the Florida home and gave Cates a check for $34,000, representing the equity from the sale plus $2,000 from her personal account.
- Cates used the $34,000 from Swain as a down payment for a home in Seattle, Washington, which was titled solely in Cates's name.
- In 2005, the Washington home was sold at a significant profit, and Cates used the proceeds to purchase a home in Tate County, Mississippi, for $350,000, again titled solely in her name.
- Swain contributed an additional $5,000 for closing costs and paid $4,495 for carpeting in the Mississippi home.
- Cates contended that all funds from Swain were repayments for undocumented personal loans she had made to Swain.
- The relationship ended in March 2006, and Swain moved out, with Cates retaining ownership of the Mississippi home and the funds Swain had contributed.
Procedural Posture:
- Swain filed a complaint against Cates in the Tate County Chancery Court (trial court) seeking a constructive trust or relief based on unjust enrichment.
- The chancellor rejected the trust claims but found that Cates had been unjustly enriched and entered a judgment for Swain in the amount of $44,995.
- Cates, as appellant, appealed to the Mississippi Court of Appeals (intermediate appellate court).
- The Court of Appeals affirmed the chancellor’s rejection of the trust claims but reversed the unjust enrichment award, holding that the remedy was not available to unmarried cohabitants.
- Swain, as petitioner, filed a petition for a writ of certiorari, which the Mississippi Supreme Court (highest court) granted.
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Issue:
Does the equitable remedy of unjust enrichment apply to claims between unmarried cohabitants when the claim is based on specific monetary contributions to property rather than on the existence of the relationship itself?
Opinions:
Majority - Chandler, J.
Yes, the equitable remedy of unjust enrichment is available in these circumstances. This claim is permissible because it is not for an equitable division of assets based on the cohabiting relationship, which is prohibited, but is instead a claim for restitution of specific, identifiable monetary contributions. Unlike prior cases where parties sought a divorce-like division of property based on their relationship, Swain seeks the return of her specific funds which Cates used to acquire property and which Cates, in good conscience and justice, should not be allowed to retain. The chancellor did not err in focusing on the readily identifiable assets Swain conferred upon Cates and ordering a refund to restore the parties to their prior positions, thereby preventing Cates from being unjustly enriched.
Concurring-in-part-and-dissenting-in-part - Dickinson, P.J.
Yes, the theory of unjust enrichment applies, but the remedy is inequitable. While the majority correctly allows the unjust enrichment claim, its remedy of simply refunding Swain's initial contributions allows Cates to keep all the profits generated from the use of Swain's money, which is not an equitable result. Cates used Swain's funds to purchase a home that she later sold for a $109,000 profit. Allowing Cates to retain all of this profit hardly restores the 'status quo.' The case should be remanded to the chancellor to exercise discretion and determine a truly fair and equitable award, which could include considering the profits Cates earned using Swain's money.
Analysis:
This decision carves out a critical exception to the general rule that Mississippi courts will not adjudicate property disputes between unmarried cohabitants as they would for married couples. It distinguishes between claims for a general 'equitable division' of assets based on the relationship (which are barred) and claims for unjust enrichment based on specific, traceable financial contributions (which are permissible). This provides a path for non-married partners to recover direct financial investments in property titled in their partner's name upon separation. However, the majority's focus on simple restitution, rather than a share of profits, suggests that the remedy may be limited to recovering the principal investment, not any appreciation in value.
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