This was originally posted on the SGR Blog.
A romantic relationship often results in concomitant promises to share financial responsibility and wealth that are never reduced to writing—but, needless to say, are disputed when the relationship ends. And, as a recent case illustrates, efforts to enforce the promise may be based on various legal theories that may (or may not) be subject to a panoply of defenses.
Virginie Farre alleged that she and Antoine Lours engaged in a 17-year romantic partnership, during which they had three children, all currently under the age of 12. They never married but held themselves out as spouses.
Lours worked in the financial industry and earned a multi-million dollar annual income. He also accumulated real estate and investment assets worth millions of dollars, including homes in Manhattan and Long Island, both of which he paid for in cash and are titled in his name alone.
Farre contended that at Lours’ request and upon his assurances of financial security and support, she moved to numerous countries and gave up her own lucrative employment opportunities to live with and support him and later, their family. Lours repeatedly told Farre that they would share their finances and that what was his, was theirs, and other words to that effect.
When the parties purchased their apartment in Manhattan, Farre claimed that she paid for some of the appliances and furniture and the decorator’s fee, and paid some monthly bills, including the maintenance, from 2013 to 2016, when she lost her job. She also paid for a nanny, babysitter, and other expenses, and contributed her time toward the renovation of the Long Island home, paying for various sundries, including kitchen appliances.
In 2020, Lours began dating another woman, at which point he told Farre that the two homes were his property alone and asked her and the children to move out of them.
Farre sued Lours. She advanced a claim for fraud as her first cause of action, based on Lours’ “various misrepresentations, in sum and substance, that he would treat his earnings from his career in finance during their relationship, as well as the assets, investments, and investment income these earnings generated, as the parties’ jointly held property on a 50/50 basis including, but not limited to, [the two homes].” She alleged that Lours knew his representations were false when he made them and that after he began dating the other woman, he considered the homes to be his property and attempted constructively to evict Farre and their kids from them. Farre also maintained that Lours intended to induce her reliance on his promises, “so that he could continue profiting from [her] acting as the primary (and often sole) childcare provider for the parties’ 3 children, a do-it-all professional for his real-estate properties, and as his virtual wife in all but formal title,” and that she justifiably relied on his representations based on their long-term relationship.
Farre alleged damages consisting of:
- compensatory damages of not less than 50 percent of the parties’ joint assets accumulated during the parties’ partnership including, but not limited to, the two homes, his squirreling away of these financial assets, and depriving her of financial information;
- lost income in destroying her career in reliance on his promises; and/or
- lost savings by contributing more funds to the parties’ housing expenses and childcare costs than she otherwise would have if Lours had not represented that the assets belonged to both of them.
As a second cause of action, Farre alleged constructive fraud, in that the parties were in a fiduciary and confidential relationship by virtue of their partnership, which caused her to repose her confidence in Lours and trust that the assets that they jointly accumulated would be equally shared.
In the third cause of action, Farre alleged that Lours fraudulently induced her to compromise her career in numerous ways, to accept almost exclusive responsibility for their children’s care, and to act as a real estate professional for him, as his personal assistant, and as a property manager for their homes. In order to so induce her, Lours falsely represented that he would treat the assets earned by him and the homes purchased by him as their jointly held property and that Lours knew that these promises were false when made and made them with the intent to induce her to take on all of these roles. Moreover, Lours’ false promises were material, and had Farre known of their falsity, she would not have sacrificed her career and taken on these roles.
Farre alleged that she was entitled to a constructive trust in her fourth cause of action, in that, based on all of her allegations, allowing Lours to renege on his promises would unjustly enrich him by permitting him to abscond with the assets the parties had accumulated during their 17-year financial partnership, simply because he was the primary breadwinner and had assets in his name alone, and because she had agreed to facilitate his career in finance by caring for their children almost exclusively for the past 11 years, home-making for him, and generally attending to his family affairs. Farre sought a constructive trust on 50 percent of the remaining earnings from Lours’ career during the parties’ relationship, as well as the assets, investments, and investment income those earnings generated including, but not limited to, the cash value of his severance package from one of his jobs and the two homes.
In her fifth cause of action for unjust enrichment, Farre claimed that Lours received numerous benefits from her during their relationship related to his career and finances, their children, and their real estate purchases and that to permit him to retain these benefits at her expense would be unjust.
Farre sought a partition in her sixth cause of action, alleging that she and Lours owned their two homes as joint tenants with rights of survivorship and that they were unable to agree on the sale of the homes and division of the proceeds thereof. Specifically, Lours refused to sell the homes or divide the proceeds if there was a sale, and based on the nature of the homes, they could not be partitioned. Thus, based on her contributions to the homes, Farre asserted entitlement to 50 percent of the proceeds of their sale.
In her seventh cause of action, Farre contended that Lours breached his fiduciary duty to her as her partner for 17 years by committing misconduct against her through false representations and promises, and caused her to suffer damages.
Farre alleged that she was entitled to quantum meruit in her eight cause of action, as she provided services to Lours as his “virtual-wife,” he accepted her services, and she expected to be compensated for these services by sharing in the assets gained during their relationship.
In her ninth and tenth causes of action, Farre sought custody of the children and child support.
And, as an eleventh cause of action, Farre sought a judgment declaring that she was a joint tenant of the homes and that Lourst may not evict her from them.
Lours argued that all of Farre’s claims, except those seeking child support and the custody claims, sounded in common law marriage and palimony which are not recognized in New York and thus stated no cognizable legal causes of action. And because New York State does not recognize common law marriage, Lours maintained that any claims based on a quasi-marital relationship were barred. While unmarried couples may contract with each other concerning the distribution of assets in the event of the termination of their relationship, such contracts must be express and specific, and no such contract existed here.
Farre contended that she had set forth the elements of a constructive trust as she gave up her career and took care of Lours’ children and homes in reliance on his promises that they would share in his finances and assets. She argued that the prohibition against common law marriage did not bar her claim, and as Lours promised her joint ownership of the two homes and held her out as their joint owner, she was entitled to a declaration of joint tenancy and a partition. Farre denied that the statute of frauds barred her quantum meruit claim or that her breach of fiduciary duty claim was duplicative of her fraud claim as the parties had a special confidential relationship. She contended that she adequately pled her fraud claims, as Lours made fraudulent misrepresentations to her and she justifiably relied on them to her detriment.
Lours observed that Farre did not distinguish the seminal case addressing the prohibition on claims based on an impermissible common law marriage, nor did she address why it did not require dismissal of her common-law claims. While a party may be compensated for services rendered outside of a personal relationship, that was not what was alleged here, Lours claimed. He also maintained that Farre’s fraud claims were insufficiently pleaded or unsupported by facts and that the breach of fiduciary duty claim was duplicative of the fraud claim as it was based on the same alleged misrepresentations and arose out of the same relationship.
Lours denied that Farre had pleaded a claim for a constructive trust in these circumstances. He also denied that a joint tenancy was created or that a partition was permitted, absent any legal interest by Farre in the homes.
The Court found that New York State does not recognize, and prohibits common law marriage. And while unmarried parties may contract with each other as to the distribution of assets in the event that their relationship ends, such a contract must be explicit and specific, not inferred. No such contract was alleged by Farre.
The Court’s reluctance to imply a contract was based on the reasonable inference that when people live together, the services are rendered gratuitously because they value each other’s company or because they find it a convenient or rewarding thing to do. Moreover, an attempt to sort out the intentions of the parties and affix jural significance to conduct carried out within an essentially private and generally noncontractual relationship ran too great a risk of error.
Here, the basis of Farre’s claims was that she was virtually or practically Farre’s wife, and that, therefore, now that the relationship had ended, she was entitled to some portion of the assets gained or acquired during their relationship, such as the two homes, or to damages based on the efforts and sacrifices she made during the relationship. Given the prohibition against common law marriage, those claims which are based on the existence of such a marriage were akin to those offered to a married person during or as a result of a divorce and were not legally cognizable. Even if considered on their merits, Farre’s claims failed.
The fraud claims, as pleaded, did not reflect that Lours’ alleged promises or representations were made with the present intent to deceive Farre. Rather, the allegations reflected that the promises were honored, as the parties shared Lours’ earnings and homes for years until the parties’ relationship ended.
Farre’s alleged sacrifice of her career in return for Lours’ false promises related to their future together did not constitute reasonable reliance as the law does not recognize a cause of action for sacrificing career opportunities in order to act as a `wife. And the claim that Lours falsely promised to support Farre in exchange for her having his children and giving up her career was void as against public policy.
Farre’s allegations that Lours promised to share his earnings, that what was his was theirs, and that he considered his property to be their joint property, among other similar alleged promises, were insufficiently specific.
And a fraudulent inducement claim was not viable absent an allegation that a party was induced to enter into a contract or agreement, which was not alleged by Farre.
The equitable remedy of a constructive trust required a showing of: (1) a confidential or fiduciary relation, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment.
Farre’s cause of action for a constructive trust related to the homes failed to state a cause of action absent an allegation that she contributed financially for the purchase of the homes or otherwise transferred any of her interests in reliance on a promise to share in the homes. And it was undisputed that Lours solely paid for the homes and that Farre lived in them for years rent-free.
Here, Farre made minimal contributions to the homes in general and none to their purchase. And, in any event, a constructive trust could not be imposed based on promises made during an unmarried romantic relationship.
Farre did not allege a sufficient basis for the imposition of a constructive trust on Lours’ finances as her claim essentially sounded inequitable distribution, which was not available to unmarried partners.
And Farrre’s allegations did not demonstrate that Lours would be enriched unjustly by keeping the money he alone earned and in which Farre shared and to which she enjoyed access for many years.
Farre’s claims related to the homes were barred by the statute of frauds. And, given the parties’ unmarried relationship, Farre’s rendition of services to Lours and his acceptance of those services could not provide the basis for those claims.
Farre did not purchase, and had no legal ownership interest in, the homes. So there was no basis for granting a partition or declaring her a joint tenant of the homes.
Farre’s breach of fiduciary duty claim relied on the same facts underlying her fraud claims and was fatally duplicative.
Family Court had original jurisdiction over claims for child support and custody. And because Lours had filed a paternity petition in Family Court, child support and custody could not be adjudicated in this case.