Opinion
No. CV00 0273695-S
January 4, 2005
MEMORANDUM OF DECISION
I. Background
The plaintiff brought this action by a complaint dated August 11, 2000, seeking the partition of land, consisting of an undeveloped residential lot located at 33 Lucia Drive in the City of Meriden. On August 30, 2001, the plaintiff filed a revised complaint, to which the defendant answered and filed three counterclaims dated September 11, 2001. In his revised complaint, the plaintiff claims that he owns a one-half interest in the property, in common with the defendant. The defendant claims, inter alia, damages for the dissolution of their partnership, breach of contract and quantum meruit. In lieu of a court-ordered partition sale, the land was sold to the plaintiff for the purchase price of $55,000, by agreement of the parties, the sum of which is now held in escrow.
II. Facts
The parties to this action had a personal relationship and friendship dating back to the late 1970s. After the death of the defendant's husband in 1989, their friendship evolved into a romantic relationship and the parties dated during most of 1990. During the course of this relationship, the plaintiff became aware of the sale of an undeveloped lot located at 33 Lucia Drive, and expressed to the defendant his desire to purchase the property from the owners, Jose and Martha Mendoza. In response, however, the defendant expressed her desire to purchase the land in common with the plaintiff.
The plaintiff claimed to have knowledge of real estate matters, as he was the owner of approximately eight other properties. The original purchase price of the land was $60,000; a sales price that the plaintiff considered to be substantially below the market value, which he believed to be approximately $90,000.
The parties agreed to and executed a plan for the defendant to purchase the property by a warranty deed, exclusively in her own name, and then immediately quit-claim an undivided half interest in the title to the plaintiff. Both parties attended the closing at the law offices of Attorney Keith Cymbala, the plaintiff's attorney for other matters. The closing documents reflect that the defendant alone paid the $60,000 purchase price for the property. These deeds were properly executed on July 27th, 1990 and recorded in the land records for the City of Meriden on July 30th, 1990. The deed was unencumbered by any debt at the time of the closing.
Beyond these facts, the parties agree on very little. The plaintiff testified that he gave $30,300 to the defendant for his half of the purchase price and closing costs associated with the property. He testified that he gave this money to the defendant in the form of cash, $30,000 of which was in denominations of $100 and $50 bills, and $300 of which was in $20 bills. He testified that he gave the defendant this cash payment in the parking lot of her place of business, a nightclub named the Ritz in Meriden. He claims to have transferred this money to her on one occasion, several weeks prior to the closing. The defendant disputes these factual assertions in their entirety.
Upon further inquiry, the plaintiff testified that he kept cash in excess of $30,000 in his home on a regular basis. His sworn testimony is that he kept this amount of cash on hand for members of his extensive family to travel to Jamaica and for funeral expenses, since his many sisters living in North America would find it difficult to obtain funds for travel and burial expenses in the event of his death.
The plaintiff claims that he originally intended to purchase the property in his own name for future development, but that the defendant insisted on purchasing the property in common. The plaintiff further claims that he did not want to purchase the property with the defendant for fear of disclosing their romantic relationship to another woman, Melita Allen, with whom the plaintiff was living at the time. The plaintiff claims to have acquiesced to the plan for an exclusive warranty deed to the defendant, and immediate quit-claim of the title into both their names, under the mistaken belief that the subsequent quit-claim deed would not appear in the newspaper as a public record of their common ownership interest in the property.
The closing attorney for the parties had been the plaintiff's attorney in other matters. The plaintiff claims that he did not disclose the true and actual financial terms of the real estate transaction to his attorney, for fear that members of his attorney's staff would disclose the details of the transaction to Melita Allen, as they were mutually acquainted.
Upon the death of her husband, the defendant testified that she received substantial death benefits, including life insurance proceeds of $50,000, and a workmen's compensation award of $130,000, among others. In addition to her testimony, the defendant has produced a bank withdrawal slip of $60,437.79 to support her claim that the purchase money and closing costs for the property were funded exclusively from her own assets. She has also produced bank statements showing no cash deposits during the month of and month subsequent to the closing. The plaintiff, however, has produced nothing more than his own testimony that, despite all of the documentary evidence to the contrary, he supplied half of the purchase money for the property.
The plaintiff claims to have had no plan for the development of the property. On the other hand, the defendant claims that the property was purchased for the purpose of building a marital abode. The defendant unequivocally denies the plaintiff's assertion that he paid for half of the purchase price. Instead, she testified that the plaintiff's name was placed on the title because they were to be married, build a home and live together on the property. However, the romantic relationship between the parties terminated by the end of the calendar year of 1990, and the property remains an undeveloped lot in the city of Meriden.
During the course of the parties' ownership of the property, the plaintiff claims to have maintained the property by clearing a fallen tree and by policing the grounds occasionally to prevent the accumulation of debris. During the early 1990s, the defendant paid all of the property taxes on the property; however, by the mid 1990s tax payments were in arrears, and the defendant claims to have entered into a payment plan of $750 per month for the payment of taxes to Meriden. The defendant claims to have made $10,400 in total property tax payments for the property, plus $1,250 for expenses associated with the foreclosure action.
The first evidence of a tax payment made by the plaintiff is a check for $200, dated October 26, 1999, some nine years after the closing. A foreclosure action was commenced by the City of Meriden for nonpayment of property taxes in July of 2001. This action was withdrawn on April 30, 2003, presumably as the result of the payment of outstanding taxes of $4,784.03 by the plaintiff on April 28th, 2003, just two days prior to the date of withdrawal.
The plaintiff's attorney paid the taxes from a trustee account in the amount of $4,784.03 on April 28, 2003. The plaintiff wrote a check to his attorney in the same amount on the same day.
III. Discussion
This is a statutory action for partition, brought pursuant to General Statutes section 52-500. This statutory provision authorizes the court to order the sale of real property "owned by two individuals." Id. Although this is a statutory cause of action, this court has "equitable jurisdiction" over this matter. Id., also see Gaer Bros., Inc. v. Mott, 147 Conn. 411, 161 A.2d 782 (1960). The statute further provides that the court "shall make such order in relation to the investment of the proceeds of the sale as it deems necessary for the security of all persons having any interest in such land." General Statutes section 52-500(b). Since the initiation of this action, the land has been sold to the plaintiff, and the $55,000 proceeds of the sale are currently being held in escrow. Therefore, the only question for the court to decide in this case is the equitable distribution of the proceeds of the sale.
General Statutes section 52-500 states that "(a) Any court of equitable jurisdiction may, upon the complaint of any person interested, order the sale of any property, real or personal, owned by two or more persons, when, in the opinion of the court, a sale will better promote the interests of the owners.
"(b) The provisions of this section shall extend to and include land owned by two or more persons, when the whole or a part of the land is vested in any person for life with remainder to his heirs, general or special, or, on failure of the heirs, to any other person, whether the land, or any part thereof, is held in trust or otherwise. A conveyance made pursuant to a decree ordering a sale of the land shall vest the title in the purchaser thereof, and shall bind the person entitled to the life estate and his legal heirs and any other person having a remainder interest in the lands. The court issuing the decree shall make such order in relation to the investment of the proceeds of the sale as it deems necessary for the security of all persons having any interest in such land."
In support of the plaintiff's claim of an equal ownership interest in the property, he testified that, in addition to paying half of the purchase price, he maintained the property on occasion and paid some substantial portion of the taxes on the property, albeit late and substantially less than the defendant's payment of taxes. However, the court finds that the plaintiff has failed to prove that he paid $30,300 to the defendant for a one-half interest in the property.
The evidence presented at trial on this factual question is diametrically opposed. On the one hand, the plaintiff testified that he gave $30,300 in cash to the defendant in a parking lot. He offers no corroborative testimony from other witnesses. He shows no receipt for the money from the defendant. He shows no withdrawal slip for the money from a bank or credit union. He shows no record of any kind indicating that such a large sum of money or cash was ever in his possession. Instead, he simply asks the court to believe that he typically keeps such a sum of cash in his home for travel and burial expenses for members of his family. Although this may be plausible, the plaintiff offers no corroborative evidence to support the factual assertion that he paid half of the purchase price for this property.
On the other hand, the defendant's testimony is that she supplied all of the funds for the closing, and that she had sufficient funds to purchase the property due to the availability of her recent husband's death benefits. In support of her testimony, she shows bank records and closing documents indicating that all sums involved were hers and hers alone. This documentary evidence is of sufficient weight and credibility, in addition to her testimony, to rebut the plaintiff's claim of paying half the purchase price.
Notwithstanding the financial arrangements for the purchase of the property, each party held an undivided one-half interest in the land by virtue of the quit-claim deed. The plaintiff argues that if he is found not to have provided half of the purchase price, the court should nonetheless find that the defendant gave him a gift of a one-half interest in the property. However, "[a]lthough each party was the owner of an undivided one-half interest in the property, it does not follow that he or she will necessarily be entitled to equal shares of the moneys obtained from the sale. Equities must be considered and, if established, must be liquidated before distribution is ordered . . . [This] should not be construed to mean that the fifty-fifty presumption does not exist, but only that the law starts with that presumption, which then may be rebutted by the evidence." (Internal citations omitted.) Segal v. Segal, 65 Conn.App. 17, 21, 81 A.2d 492 (2001).
The plaintiff argues this point despite his unequivocal testimony that the quitclaim deed from the defendant was not a gift.
The "fifty-fifty presumption" of equal shares in Segal is derived primarily from cases involving the purchase of property though funds supplied by one spouse, with title to the property held jointly by both. See Hackett v. Hackett, 42 Conn.Sup. 36, 41, 598 A.2d 1112 (1990), aff'd, 26 Conn.App. 149, 598 A.2d 1103 (1991), cert denied, 221 Conn. 905, 600 A.2d 1359 (1992). In Hackett, the court stated that "[i]t is settled law that where one spouse purchases property entirely with his or her funds and takes title in the names of both spouses jointly, a rebuttable presumption arises that a gift was intended to the other spouse of a one-half interest in the property . . ." (Internal quotation marks omitted.) Id. Also, see C. Tait, Connecticut Evidence (3d Ed. 2001) § 3.17.14, p. 188.
The underlying analysis of Hackett, cited in the plaintiff's brief, is well considered when addressing the property rights and responsibilities of married and divorced couples. In the context of this case, involving a quit-claim deed from a grantor with the purpose of living on the property in a future marital abode with the grantee, the presumption of an equal ownership interest is far less compelling. The presumption of donative intent, especially involving gifts of real property, is far more applicable and appropriate between spouses when compared with a dating relationship, and such a presumption in cases such as this could result in unjust enrichment. Therefore, the court will not presume, as a matter of fact, that the quit-claim deed was intended to bestow a gift of a one-half interest in the property upon the plaintiff.
The fact remains, however, that the defendant quit-claimed her interest in the land to both parties to this action. Based upon the evidence presented at trial, the court has found that this was done without proof of financial consideration from the plaintiff. Although the quit-claim deed in this case may give rise to the inference of a gift to the defendant, that fact need not be presumed by the court and rebutted by the defendant. Instead, "an inference will satisfy a party's burden of production so as to establish a prima facie case, but it has no effect on the burden of persuasion on that fact, that is, the trier can accept or reject the fact to be inferred." C. Tait, Connecticut Evidence (3d Ed. 2001) § 3.11.3, p. 171.
IV. Conclusion
The plaintiff has the burden of proving his case by a preponderance of the evidence. Although the plaintiff has presented a prima facie case that he owned an undivided, one-half interest in property located at 33 Lucia Drive in Meriden, he has failed to prove that he had an equitable or financial interest in the property, either by the contribution of funds to the purchase price or by an unconditional gift from the defendant.
In this case, the defendant clearly stated that she quit-claimed a one-half interest in the property to plaintiff with the belief that they would build a life together at their future marital abode. The real property in this case was and remains a vacant building lot in a residential area. The parties therefore never resided at the premises, nor did they ever live together in any context where their fortunes were tied together, literally or figuratively. This context is unlike a couple, married or otherwise, living together and sharing financial and family responsibilities. Therefore, the court finds that the defendant's donative intent was not sufficient to transfer an unconditional one-half interest in the real estate to the plaintiff.
Notwithstanding the plaintiff's failure to adequately prove a gift or financial contribution to the purchase of the property, the court finds that he should be credited for his out of pocket expenses, especially in light of his discovering, maintaining and paying substantial taxes on the property. By providing these services, the plaintiff contributed to lowering closing costs for the original purchase of the property without a realtor, and prevented a foreclosure of the property by the city of Meriden.
Ordinarily, the owners in common of real property jointly owe municipal real estate taxes. In light of the court's finding that the plaintiff had no proven, equitable or financial interest in the property, the plaintiff is credited for property taxes he has paid to the city of Meriden, in the amounts of $200 in 1999 and $4,784.03 in 2003. No other out-of-pocket expenses were sufficiently proven by the plaintiff to warrant recovery in a court of law or equity.
The original purchase price for the property of $60,000 has not been recovered by the plaintiff's purchase price of $55,000, now held in escrow, despite the plaintiff's original assessment of a $90,000 property value fourteen years ago. Nonetheless, the court orders an equitable split of the proceeds as follows: $4,984.03 for the plaintiff, and $50,013.97 for the defendant.
In light of the court's decision and findings pursuant to its equitable jurisdiction under General Statutes section 52-500(b), the court need not address the defendant's claims of damages, inter alia, for the dissolution of a partnership, breach of contract or quantum meruit.
BY THE COURT
Mark H. Taylor, Judge