DIAMONDHEAD IN THE ROUGH

August 13, 2012 § 1 Comment

Carolyn and Anthony lived together in Louisiana without benefit of marriage. They purchased a home together in Diamondhead, on the Mississippi gulf coast, which they titled as joint tenants with right of survivorship. They had the idea that they would later marry, move from Louisiana, and take up residence in their Hancock County home.

Anthony paid the entire $274,000 purchase price, along with the utilities, taxes, insurance and property owners association dues. Carolyn testified that she used some of her personal property to furnish the house, and she put up drapes and made other cosmetic improvements.

As things sometimes do, the relationship soured, and Anthony filed a petition in chancery court to partite the property by sale, claiming it was not susceptible to partition in kind. He also asked for an adjustment of equities, since he had made the greater contribution to the acquisition. Carolyn denied that Anthony should have the adjustment, since the parties were on an equal legal footing in relation to the property by virtue of the joint tenancy.

The chancellor found that to award Carolyn any money from the partition sale would be an unjust enrichment to her. He also cited MCA 11-21-9, providing for an adjustment of equities between the parties, and 11-21-33, which deals with owelty. He awarded Anthony 100% of the proceeds of sale of the property.

In a rather brief opinion rendered in the case of Jones v. Graphia, on August 7, 2012, the COA affirmed the chancellor. Judge Griffis, writing for the majority, distinguished cases cited by Carolyn and upheld the chancellor’s adjustment of equities per the statute, citing the appellate court’s limited scope of review.

Judges Carlton and Maxwell wrote dissents that are worth a read, particularly if you do a lot of this kind of work.

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.

The obvious distinction between the two cases is that in Cates v. Swain the parties intentionally did not title the real property jointly, while in Jones v. Graphia the property was titled in joint ownership.

Once again, if you are advising unmarried couples or individual parties to such a relationship, the implications of these two cases are clear: if the parties do not formalize their relationship, at least one, and maybe both, will have no legal protection. Jones was protected, as the majority opinion pointed out, in the sense that if Graphia had died she would have been vested with 100% title to the property. The court does not say so, but it is implicit in the opinion that, had Jones made any contribution to the accumulation of equity in the property, she would have been entitled to something in the adjustment of equities. Likewise, since Elizabeth Cates was not on the title, and the parties did not have any enforceable contractual obligation to one another, she had no claim to any interest in the property.

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§ One Response to DIAMONDHEAD IN THE ROUGH

  • thusbloggedanderson says:

    Glad you thought Cates was applicable – I was reading that op wondering why the COA didn’t cite back to Cates, which seemed the obvious authority.

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