Hughes v. Krueger
67 So.3d 279, 2011 Fla. App. LEXIS 4658, 2011 WL 1195794 (2011)
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Rule of Law:
A cotenant in exclusive possession of a property who does not oust the other cotenant is not accountable for rent based on their own use, but is accountable to the other cotenant for their proportionate share of actual rents received from third parties, less necessary expenses.
Facts:
- In a 1990 divorce judgment, Norma Hughes and Hermann Krueger were awarded joint ownership of two commercial properties, the 'Tiner Property' and the 'Oakridge Property,' as tenants-in-common.
- Krueger received a 75% ownership interest and Hughes received a 25% interest in both properties.
- From 1990 to 2008, Krueger exclusively used the Tiner Property for his business and never collected any rent from it.
- During the same period, the Oakridge Property was leased to a third-party commercial tenant, generating rental income.
- Krueger was never found to have ousted Hughes from the Tiner Property.
- For nearly 19 years, Krueger made monthly payments to Hughes, which he represented as her share of the net income from the Oakridge Property, totaling $51,900.
- The parties' son also used a portion of the Tiner Property for his business without paying rent, with Hughes's awareness and consent.
Procedural Posture:
- Norma Hughes (Former Wife) filed a petition against Hermann Krueger (Former Husband) in the trial court, initially seeking to partition two jointly owned properties.
- The parties subsequently agreed to seek only a judicial accounting of the income and expenses related to the properties.
- The trial court conducted an accounting by combining both properties and entered a supplemental final judgment ordering Krueger to pay Hughes $7,787.
- Hughes, as appellant, appealed the supplemental final judgment to the intermediate appellate court.
- Krueger, as appellee, filed a cross-appeal of the same judgment.
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Issue:
Does a cotenant in exclusive possession of a property, who has not ousted the other cotenant and collects no rent from it, owe the out-of-possession cotenant the fair rental value of the occupied property?
Opinions:
Majority - Jacobus, J.
No. A cotenant who has exclusive possession of real property for their own benefit is not liable to a cotenant out of possession unless there is an ouster. The trial court erred by combining the two properties for the accounting because distinct legal principles apply to each. For the Tiner Property, which Krueger exclusively possessed without ousting Hughes and without collecting rent, Hughes was not entitled to any rent, including fair rental value. For the Oakridge Property, which was rented to a third party, Hughes was entitled to her 25% share of the actual net rental income (actual rents received minus necessary expenses). A calculation of the Oakridge Property accounting shows Krueger actually overpaid Hughes by $29,051.20, for which he is entitled to a judgment.
Analysis:
This case reinforces the critical distinction in property law between a cotenant's liability for rents collected from third parties versus liability for their own use of the property. The ruling solidifies the principle that ouster is a prerequisite for an out-of-possession cotenant to claim fair rental value from the occupying cotenant. It serves as a precedent instructing lower courts to analyze jointly owned properties individually when their uses differ, preventing the improper commingling of assets that are governed by separate legal rules of accounting.
