Posts Tagged ‘resulting trust’

Agreement To Convey Half Interest In Home May Be Valid

JUNE 21, 1999 VOLUME 6, NUMBER 51

Sylvia Ann Patterson and Dennis Strickland began seeing each other socially in 1963. After Ms. Patterson’s divorce in 1969, their relationship continued to intensify, until Ms. Patterson moved into Mr. Strickland’s mobile home in 1975. That year, Mr. Strickland bought a new home in Charlotte, North Carolina, and the couple moved in together.

The new home was purchased in Mr. Strickland’s name alone, and made the down payment of over $8,000. He also signed the note for the balance of the purchase price, over $30,000.00, and obligated himself to make monthly payments of $256 for ten years to pay the note off. From the beginning, however, Ms. Patterson made payments to Mr. Strickland of $160 per month.

After the balance of the home had been paid off, Ms. Patterson continued to make her monthly payments to Mr. Strickland. She began to note that the payments were for “rent” on the description line of her checks.

In 1990, over a quarter century after the couple first began their relationship, Ms. Patterson became suspicious about the possibility that her niece was seeing Mr. Strickland. When she confronted them about her fears, Mr. Strickland broke off his relationship with Ms. Patterson and moved out of the house. Five years later, he married Ms. Patterson’s niece, and asked Ms. Patterson to vacate the residence.

Ms. Patterson responded by filing suit against Mr. Strickland. She alleged that there had been an agreement between the two of them, and that her payments had been her share of the contribution to purchase of the home. Now, she argued, she owned a half interest in the home. She did not oppose the sale of the residence, but sought half the proceeds from that sale.

Ms. Patterson relied on several legal theories for her claim. She first argued that the court should impose a trust on the property, based on the couple’s alleged agreement to purchase the home as a couple and her contribution to the mortgage payments. This kind of trust, a so-called “resulting trust,” would require Mr. Strickland to convey a one-half interest in the property to Ms. Patterson.

Her second argument also addressed a special kind of trust. A “constructive trust” could be imposed if Ms. Patterson could show that the parties had a “confidential relationship” and that Mr. Strickland had abused that relationship.

Finally, Ms. Patterson argued that she and Mr. Strickland had entered into a contract to purchase the property together, and that he should be compelled to complete the terms of the contract. She acknowledged that the contract was not in writing.

At trial, the judge dismissed all of Ms. Patterson’s claims except the allegation of breach of contract. A jury decided that there was a contract between the parties, and the judge therefore ordered that Ms. Patterson was a half-owner of the property. Both parties appealed.

The North Carolina Court of Appeals sent the matter back for another trial. The appellate judges decided that the contract claim was barred by the Statute of Frauds, which requires that contracts involving real property be reduced to writing. On the other hand, reasoned the Court of Appeals, Ms. Patterson should be given a chance to prove her allegations that Mr. Strickland had an equitable obligation to her, and that he breached his duty to her by failing to transfer the property into joint names. Patterson v. Strickland, June 15, 1999.

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