Many couples may find themselves in a situation in which they have been living together, they may have acquired property together, or even contributed a significant amount of money to improving real estate listed in one or both parties’ names. But what happens if you break up and you had no written or oral agreement about who would move out, who gets what piece of furniture or who retains the equity in the real estate? Absent a formal agreement, parties in Colorado are left only with the option to seek civil contractual remedies such as unjust enrichment, partition of real and personal property, breach of express or implied contract, constructive or resulting trust and replevin.
There are two notable cases in Colorado that have addressed unjust enrichment claims for cohabitating partners. Salzman v. Bachrach and Lewis v. Lewis established that, in order to make a claim of unjust enrichment, the moving party must show the defendant received a benefit at the moving party’s expense, under circumstances that would make it unjust for the defendant to retain the benefit without paying. In Lewis, the most recent case from the Colorado Supreme Court in 2008, the court held that unjust enrichment claims by close family members or confidants requires the court to look at the ‘commonality of purpose’ between the parties.
When the enriched party deviates significantly from that mutual purpose, he or she has been unjustly enriched. For example, a party that may have contributed to the cost of construction, home improvements, or uncompensated labor to a property that they did not hold title to would have the opportunity to make a claim of unjust enrichment for the cost of those improvements or contributions made to that property.
Partition is a more commonly used civil remedy that allows a party that has an interest in real or personal property to have the property divided based on the title that they hold and contributions that have been made to the property. However, a partition action requires proof of co-tenancy or status as a title holder which may be hard to demonstrate for many couples that only titled property in one person’s name.
Breach of express or implied contract is also a more difficult remedy to seek, as many intimate relationships do not function the same way that more formal, contractual relationships do. A cohabitant would need to demonstrate the existence of a contract, performance or justification for non-performance, failure to perform the contract by the defendant, which resulted in damages to the plaintiff. Not only are most of these agreements not in writing, but in Colorado, sexual relations or services cannot serve as sole consideration for a contract.
A constructive trust allows a party that may have had a confidential or fiduciary relationship, that was subject to fraud, duress or undue influence, to have a transfer of property obtained as a result of an abuse of those relationships to be set aside. A resulting trust is similar, but it is an “intent-enforcing” trust where one individual holding property for the benefit of another, but that party did not intend to keep the beneficial interest in that property. Both of these remedies require factual evidence of intent, which requires more than just facts about the dissolution of a relationship, or what one parties’ intent was at some earlier time in the relationship.
Finally, replevin is a possessory action in which a claimant seeks recovery both for possession of personal property that has been wrongfully taken and damages for its unlawful detention. Unfortunately, because replevin only involves the recovery of personal property, a cohabitant must seek an additional contractual remedy in order to acquire rights to real property. In addition, the cohabitant must establish a superior right to possession or title along with the source of the claim to title or possession, which usually requires written evidence.
Each of these contractual remedies depend heavily on the facts and circumstances of the cohabitant’s relationship and the agreements made between the parties throughout the duration of their relationship. Many couples do not see the future issues they may encounter when entering into these types of transactions. The next blog post will address the options available that may prevent a situation where a cohabitant may be forced to seek these contractual remedies after a break up.
Authored by: Chelsea Augelli, Juris Doctorate Candidate 2019