June 13, 2012 § 10 Comments

Mona Cates and Elizabeth Swain were involved in an intimate relationship with one another that spanned five years in three different states. They both contributed to the accumulation of equity in real property and financial assets while they were together. Swain did not want her name on the title to a home the parties purchased because she was still married to a man in another state, and did not want to give him any claim to her interest. In time, the relationship between Cates and Swain soured. Swain moved out of the DeSoto County home titled in Cates’s name and sued Cates, alleging that Cates had been unjustly enriched by the living arrangement. She sought equitable relief. Swain’s position was that she and Cates were parnters in several joint ventures. Cates took the position that to grant Swain’s prayer for relief would violate Mississippi’s ban on same-gender marriage.

The chancellor disagreed with Swain and overruled her motion to dismiss on the basis that the issues before him involved constructive trust or resulting trust and unjust enrichment, and that the issue of same-gender marriage was not necessary to that analysis. Following a trial, the judge found that Swain had been unjustly enriched and awarded Cates a judgment for $44, 495, and rejected the claim of any impled trust. Cates appealed from imposition of the judgment, and Swain cross-appealed from rejection of the trust-based claims.

In Cates v. Swain, decided April 17, 2012, the COA reversed the judge’s ruling on unjust enrichment. The opinion, by Judge Maxwell, notes that the chancellor found that no contractual relationship between the parties existed, and there was no evidence that the parties entered a business enterprise for profit. It goes on to point out that much of the trial record reads like a divorce trial, although any marital relationship or marital-type relief would have been barred by § 236A of the Mississippi Constitution, ratified November 2, 2004. The opinion states that “With no contractual or marriage-based remedies available to her, Swain bases her claim on the equitable principles of implied trusts and unjust enrichment.” The opinion continues:

¶20. Mississippi does not enforce contracts implied from the relationship of unmarried cohabitants. In Davis v. Davis, 643 So. 2d 931, 934-35 (Miss. 1994), the Mississippi Supreme Court addressed a claim by unmarried cohabitant, Elvis Davis, that she was entitled to equitable distribution of property her boyfriend had acquired while they lived together. Relying on Estate of Alexander, 445 So. 2d 836, 840 (Miss. 1984), the supreme court acknowledged any rights of a cohabitant would have to be provided by the Legislature—and the Legislature had clearly abolished common law marriage rights in 1956. Davis, 643 So.2d at 934-35 (citing Miss. Code Ann. § 93-1-15(1) (1972)). In denying Elvis Davis equitable distribution, the supreme court reiterated its earlier position in Estate of Alexander:

We are of the opinion that public policy questions of such magnitude are best left to the legislative process, which is better equipped to resolve the questions which inevitably will arise as unmarried cohabitation becomes an established feature of our society. While the judicial branch is not without power to fashion remedies in this area, we are unwilling to extend equitable principles to the extent plaintiff would have us to do, since recovery based on principles of contracts implied in law essentially would resurrect the old common-law marriage doctrine which was specifically abolished by the Legislature. Davis, 643 So. 2d at 934-35 (quoting Estate of Alexander, 445 So. 2d at 839) (emphasis added).

¶21. Prior to the supreme court’s 1984 decision in Estate of Alexander, Mississippi had not addressed the equitable rights of unmarried cohabitants, though the Court had previously considered the equitable rights of “putative wives”—women who had ceremonially married but did not, in fact, have a legally valid marriage. See Chrismond v. Chrismond, 211 Miss. 746, 52 So. 2d 624 (1951) and Taylor v. Taylor, 317 So. 2d 422 (Miss. 1975). In Estate of Alexander, the supreme [court] acknowledged the “putative spouse” line of cases but found them “factually quite dissimilar and thus not controlling” where there “was not even any attempted legal ceremonial marriage but a mere ‘live-in’ relationship[.]” Estate of Alexander, 445 So. 2d at 839. Our supreme court evaluated a variety of approaches from other states * * * Ultimately, Mississippi opted for what it deemed “the logical view . . . [as] stated by a Michigan court”—that public policy questions of this stature should be left to the legislative process, and the judicial branch should avoid fashioning implied contractual remedies that would essentially resurrect common-law marriage, which had been abolished by the Legislature. [Citations omitted]

¶22. Based on the principle established in Estate of Alexander and Davis, we find public policy questions concerning same-sex cohabitants’ rights, just as with opposite-sex cohabitants rights, “are best left to the legislative process.” Davis, 643 So. 2d at 934. We note the Mississippi Legislature in 1997 declared no marriage rights exist in Mississippi Laws between same-sex partners, even those with valid marriages in other jurisdictions. Miss. Code Ann. § 93-1-1(2). And in 2004, House Concurrent Resolution 56 proposed to amend Mississippi’s constitution by creating a new section on marriage. On November 2, 2004, Mississippi voters ratified Section 236A. Under this constitutional amendment:

Marriage may take place and may be valid under the laws of this state only between a man and a woman. A marriage in another state or foreign jurisdiction between persons of the same gender, regardless of when the marriage took place, may not be recognized in this state and is void and unenforceable under the laws of this state.

Miss. Const. art. 14, § 263A.

¶23. Because the issue of same-sex marriage has been addressed by the legislative process, we find we must yield to the supreme court’s admonition against judicially creating equitable remedies that undermine these policy decisions—particularly when this policy has been written into Mississippi’s constitution. Thus, we hold we cannot extend implied contractual remedies to unmarried cohabitants, whether opposite-sex or same sex—especially here, where the chancellor found no express agreement beyond mere cohabitation that would support Swain’s claim that she be repaid for financial contributions she made during their relationship. Furthermore, Swain was married to another man and could not validly marry Cates even in a jurisdiction that recognizes same-sex marriage. Therefore, the limited putative spouse doctrine is inapplicable.

¶24. While chancellors typically enjoy discretion in determining equitable remedies in nondomestic matters, the supreme court has held it is outside the chancellor’s discretion to fashion an equitable remedy for an unmarried cohabitant “based on principles of contracts implied in law.” Estate of Alexander, 445 So. 2d at 839. But see Estate of Reaves, 744 So.2d at 802 (¶11) (finding Mississippi’s public policy against same-sex marriage does not prohibit same-sex partners from entering valid express contracts with each other).

¶25. “Unjust enrichment” is “modern designation for the doctrine of ‘quasi-contracts[.]’” Koval v. Koval, 576 So. 2d 134, 137 (Miss. 1991) (quoting Magnolia Fed. Savings & Loan v. Randal Craft Realty, 342 So. 2d 1308, 1311 (Miss. 1977)). “[T]he basis for an action for ‘unjust enrichment’ lies in a promise, which is implied in law, that one will pay to the person entitled thereto which in equity and good conscience is his.” Id. “It is an obligation created by law in the absence of any agreement; therefore, it is an implied in law contract.” 1704 21st Ave., Ltd. v. City of Gulfport, 988 So. 2d 412, 416 (¶10) (Miss. Ct. App. 2008) (citing Koval v. Koval, 576 So. 2d 134, 137 (Miss. 1991)) (emphasis added).

¶26. By holding Cates was unjustly enriched through her cohabitation with Swain, the chancellor essentially found an implied contract that Swain would be remunerated for her financial contributions to Cates. Estate of Alexander and Davis restrict such an implied contract arising between unmarried cohabitants. Swain testified to the financial benefits and obligations arising out of her marriage to her estranged husband. Thus, it was reasonable for her to understand similar rights did not arise from her relationship with Cates. As in Estate of Alexander, Swain’s financial contributions to the homes in which she cohabited, rent free, with Cates must be viewed as given gratuitously without expectation of repayment, absent evidence of an express agreement between the two. See Estate of Alexander, 445 So. 2d at 840. In the instructive words of supreme court in Estate of Alexander, “[a] deed or contract would also have sufficed.” Id.; see Estate of Reaves, 744 So. 2d at 802 (¶11). [Footnotes omitted]

¶27. The chancellor made no finding of any express agreement, but instead found Swain’s expectation of repayment was implied based on the women’s cohabitation arrangements. The supreme court has been explicit that cohabitation alone cannot form the basis of an equitable remedy between non-married cohabitants. Because we find the chancellor’s unjust enrichment remedy was outside the bounds of a chancery court’s equitable powers regarding such cohabitants, we must reverse the award of $44,995 and render judgment in Cates’s favor.

That’s a lengthy quote from the decision, but it merits your attention. Same-gender and unmarried cohabitation arrangements are becoming more and more common, and you need to know exactly how to advise your clients about how to protect themselves.

The state of the law would appear to be that neither unjust enrichment nor equitable remedies in the nature of implied trusts will be available to protect your clients in such situations, no matter how long the relationship continued or what was the level of investment, absent fraud, incapacity or undue influence. The courts will recognize bona fide partnership contracts, but those will require consideration and all of the formalities. Judge Russell’s separately concurring opinion points this out and finds it to be an inequitable result, although she agrees that it is within the exclusive province of the legislature.

Judge Lee’s dissent is also worth your time to read. He would uphold the authority of the chancellor to grant equitable relief in these cases. The majority, however, would leave any change in the status quo to the legislature.

The bottom line is that no matter how long the relationship, or the gender of the parties, or the nature of the relationship, or the nature of the investment, or the amount of the investment, or the mutual promises made, or the changes in position based on those mutual promises, there will be no relief absent fraud, etc. or contract, until the legislature acts.

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  • Elizabeth Swain says:

    You have the names reversed in the beginning of this article. You state it was determined that Cates was unjustly enriched which is not correct – it was Swain. Cates was not awarded the 44k, it was Swain that won in the chancellory court.

  • […] posted here and here about the saga of Cates v. Swain, the COA decision that essentially denied cohabitants any […]

  • […] those planning tools that can be used to help unmarried parties to formalize their relationships, as I have discussed here before. You will want to be sure you advise them both in advance, in writing and acknowledged by each of […]

  • […] You may recall that this is the April, 2012, COA case in which Judge Maxwell’s opinion held in essence that equitable relief is not available to enforce implied contractual rights between unmarried cohabitants. The holding which was based on the MSSC decision in Estate of Alexander, 445 So. 2d 836, 840 (Miss. 1984), that any such relief must be created by act of the legislature. The decision also touched on rights of unmarried couples in relationships nearly tantamount to marriage. You can read my post about Cates v. Swain here. […]

  • […] To me, the significance of this decision is that it comes in the wake of the Cates v. Swain case decided by the COA on April 17, 2012, and authored by Judge Maxwell. That is the case, you may recall, that held an unmarried, same-gender couple not to have acquired any equitable interest in assets accumulated during the relationship. I posted about the case here. […]

  • randywallace says:

    It will be interesting to see how the law develops when parties enter into what is basically a pre-nuptial contract without the nuptials. Dangerous and unchartered waters for both attorney and client.

    Just thinking out loud, but I also wonder how another state that recognizes same gender marriage or unions would treat a forum selection clause in a pre-nuptial agreement. Residency requirements and the cost of a foreign forum would be major hurdles.

    Likewise, I am curious how an arbitration agreement would play out if the parties agreed on how an equitable distribution should be made. For instance, if the parties agreed to arbitrate property division pursuant to then existing factors like Ferguson and both parties agreed to waive the contractual defenses of unconscionability and violation of public policy.

    For so long as there is a prohibition against anything, people will try to find ways to defeat it.

    • Larry says:

      Interesting questions all. Yet another instance where society or technology lurches in a new direction, and the law must play catch-up.

  • thusbloggedanderson says:

    That was an interesting decision, and probably the right call. We have a legal framework for domestic partnership – it’s called “marriage.” The courts shouldn’t abuse equity to cobble together a parallel framework. –Ooh! Is this where you get to say, “Equity follows the law”?

    Now, *should* the Legislature have denied these folks the opportunity for a domestic partnership? I think not. But the only input the courts have on that policy choice is to strike it down as unconstitutional. Not happening in the MCOA or MSSC.

    IMHO, the state has no business “marrying” anyone, and there should be a plain vanilla domestic partnership law. Instead of “Mr. and Mrs. John Smith,” “Jane & John Smith, D.P.” (Note to self: find term other than “domestic partnership” with better initials.)

    • Larry says:

      My concern does have everything to do with equity and nothing to do with gender. I think there is an unjust enrichment situation here, regardless of gender. I think the chancellor got it right, although I realize my personal viewpoint here is contra the case law. If you take the Cates-Swain situation and change the facts so that one is a male and one is a female — just to remove the same-gender concern — I think there is a situation where one party benefited at the expense of the other.

      My personal view, however, has nothing to do with how I would decide the case. I would follow the law, as I am sworn to do.

      As for the state and marriage, which came first: state marriage or religious marriage? Did the state first regulate and recognize marriage, followed by religious sanctification, or vice versa? I don’t know the answer; I’m asking. The answer may help inform the same-gender-marriage/union discussion.

      • thusbloggedanderson says:

        Presumably religious marriage came first, but then you’re talking about an era where “religion” and “law” were hardly separable.

        You’re familiar I’m sure with the arguments regarding the secularization of marriage, to where it’s a conglomeration of rights, duties, and benefits with no necessary connection to childbearing. Atheists can get married; pious couples get civil divorces.

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