Homeowner Ends Sleepy Hollow Romance: Former Housemate Claims Constructive Trust

This was originally posted on the SGR Blog.

New York does not recognize a claim for breach of contract to marry. But, as a recent case illustrates, where a couple resides together, in a long term personal relationship, other claims may exist when the romance comes to an end.

Charles Whalen sued Grace McElroy to impose a constructive trust on 115 Hunter Avenue, Sleepy Hollow, New York. The property was currently owned and occupied by McElroy. Whalen also asserted causes of action for unjust enrichment, replevin, and conversion. In the verified complaint, Whalen alleged that he and McElroy became involved in a romantic relationship in 2008 and that he resided at 115 Hunter with her from the fall of 2011 until December 2018, when McElroy ended the relationship and demanded that he move out.

Whalen alleged that, while residing with McElroy at 115 Hunter, he made substantial expenditures of time and money toward improvement and maintenance of the premises in reliance on McElroy’s promise that they would be married and that they would jointly own the property. Specifically, Whalen asserted that he installed a new modulating hydronic heating system, installed a new “on-demand” hot water boiler, repaired the toilet and shower in the second-floor bathroom, replaced windows and insulation, painted the exterior of the house, repaired the foundation, replaced the kitchen range, performed electrical work in the living room, repaired the roof, rear deck, and driveway, maintained the landscaping, and renovated the basement, which included demolition, painting, electrical work, and the installation of flood management systems. Whalen further asserted that he paid for those repairs and upgrades himself. Additionally, in his last two causes of action, Whalen claimed that he kept personal property at the premises, which he was unable to retrieve before moving out.

As a result, Whalen sought a judgment: (1) imposing a constructive trust on 115 Hunter; (2) awarding him $302,500 for improvements he made to the property and payments he made toward cable and utilities; (3) ordering the return of certain personal property listed in an exhibit to the verified complaint; and (4) awarding him $81,500 in damages for conversion.

McElroy moved to dismiss the complaint. She argued that Whalen’s claims for a constructive trust and unjust enrichment failed because he did not indicate when the alleged promise took place or in what manner, nor did he claim with any specificity when the work was done. McElroy further noted that Whalen failed to allege that McElroy made the purported promises without intending to honor them.

Additionally, McElroy contended that a constructive trust could not exist and damages for unjust enrichment could not be awarded because the claimed expenses were undertaken for the benefit of both parties. Whalen was living in the home that he allegedly improved, and he benefited from the payment of cable and utility bills. McElroy also took the position that the formation of an implied contract by an unmarried couple’s cohabitation was inconsistent with New York’s abolition of common law marriage.

McElroy also argued that Whalen’s third and fourth causes of action, for replevin and conversion respectively, should be dismissed because Whalen failed to specifically identify certain general household items listed in the exhibit to the complaint. To the extent that some items were properly identified, McElroy argued that Whalen failed to state when and how he became the owner of such items.

In opposition, contrary to McElroy’s position, Whalen argued that a constructive trust may be based on cohabitation between two unmarried parties with the promise of marriage and an interest in the property. He also contended that the fact that certain claimed expenditures were partially for his benefit did not preclude claims for a constructive trust or unjust enrichment. Finally, he took the position that the exhibit to the complaint sufficiently identified the items subject to his replevin and conversion claims.

In reply, McElroy noted that she acquired 115 Hunter before she met Whalen and began a romantic relationship with him. Whalen did not pay any costs associated with acquiring the property, nor did he make payments toward the mortgage or any other carrying costs other than cable and utilities. McElroy reiterated that the expenses for which Whalen sought recovery were made for his benefit as well as hers and that he did so without any promise on the part of the McElroy.

To impose a constructive trust, Whalen was required to establish: (1) a confidential or fiduciary relation; (2) a promise; (3) a transfer in reliance thereon; and (4) unjust enrichment. But those elements serve only as a guideline. And a constructive trust may still be imposed even if all of the elements were not established. Where the party has no actual prior interest in the property, he or she will be required to show that an equitable interest developed through the expenditure of money, labor, and time in the property.

McElroy did not dispute that a confidential relationship existed with Whalen. They were in a romantic relationship for approximately ten years and cohabitated for over six years. And no marital or familial relationship was essential to the existence of a confidential relationship So the first element was satisfied.

A promise to marry cannot be enforced, But Whalen satisfied the second factor through the allegation that McElroy promised him that he would ultimately share a partial interest in 115 Hunter.

And Whalen met the third factor through the allegation that he improved and maintained the premises in reliance on the promise that he would acquire a partial interest in the premises. The transfer concept extends to instances where funds, time, and effort were contributed in reliance on a promise to share in the result.

With respect to the fourth factor, to prevail on a claim of unjust enrichment, a party must show that: (1) the other party was enriched; (2) at that party’s expense; and (3) it was against equity and good conscience to permit the other party to retain what is sought to be recovered. Whalen satisfied each of those elements through his allegations that he significantly improved the value of McElroy’s property, at his own expense, in reliance on McElroy’s promise. Therefore, Whalen sufficiently pleaded the fourth factor for a constructive trust claim, as well as his second cause of action for unjust enrichment.

The branch of McElroy’s motion to dismiss the third and fourth causes of action was also denied. Two key elements of conversion are (1) Whalen’s possessory right or interest in the property: and (2) McElroy’s dominion over the property or interference with the property in derogation of Whalen’s right. A cause of action sounding in replevin must establish that McElroy was in possession of certain property of which Whalen claimed to have a superior right.

The facts alleged in the complaint sufficiently established that Whalen left certain items at his former residence that he was unable to retrieve. Such items were specifically listed in the exhibit to the verified complaint. And Whalen claimed to have a superior possessory right to property under McElroy’s control. And that McElroy was interfering with that right. So the branches of McElroy’s motions seeking to dismiss the third and fourth causes of action were denied.

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