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Porter v. Zuromski

October 3, 2010

SEAN PORTER
v.
DONNA ZUROMSKI



The opinion of the court was delivered by: Zarnoch, J.

Zarnoch, Wright, Moylan, Charles E., Jr. (Retired, Specially Assigned) JJ.

Is this, as appellant contends, "nothing more than a palimony case," or is it, as appellee argues, unjust enrichment of one partner in an unmarried relationship at the expense of the other,justifying the imposition of an implied trust? After a February 2009 bench trial, Anne Arundel County Circuit Judge Michele Jaklitsch sided with appellee/plaintiff Donna Zuromski, and against appellant/defendant, Sean Porter. This appeal of the circuit court's decision calls upon us to address, for the first time, property rights issues oft-litigated in other jurisdictions. See Annot., Property Rights Arising From Relationships of Couples Cohabitating Without Marriage, 69 A.L.R. 5th 219 (1999, 2010 Supp.) ("Cohabitation -Property Rights"). For reasons set forth below, we affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

This is a dispute over real property located on Washington Avenue in Shady Side, Maryland. In her March 31, 2007 Memorandum Opinion, the trial judge summarized the relevant facts in this case:

The parties were romantically involved from 1993 though June 2007. They became engaged to be married in 1995, but postponed their wedding after Plaintiff's brother was injured in an accident in 1996. The parties lived with Plaintiff's mother in Fort Washington, Maryland, for approximately three years, during which time Defendant assisted around the house and in caring for Plaintiff's brother, and Plaintiff paid the rent of $600 each month to allow Defendant to save money for the parties. Defendant deposited his savings into a joint checking account held in both parties' names.

In 1997, the parties decided to purchase a home together. Defendant found a house, and in February 1998, the parties applied for a mortgage loan together at Severn Savings Bank to finance the purchase. Because of Plaintiff's credit score and impending bankruptcy filing (filed in May 1999), the parties were unable to qualify for a loan jointly. The parties then agreed that Defendant would apply for a mortgage loan again, this time in his name only. Defendant paid a down payment of $4500 from the parties' joint checking account, and Plaintiff paid Defendant $3700 for her contribution toward the down payment. The parties agreed that although Plaintiff could not qualify for a mortgage, the parties would act as joint owners of the property and Plaintiff would pay Defendant one half the mortgage expenses, and one half of all other property expenses each month.*fn1 The parties never had an agreement that Plaintiff would be a tenant; rather, they agreed that she was to be a joint owner. The parties agreed that Defendant's name would appear on the deed, but he would hold the property for both parties.*fn2 Defendant promised Plaintiff that in the future he would put Plaintiff's name on the deed and that the property would be held in joint tenancy.

The parties made significant improvements to the house, with each of them working extensively to the best of their capabilities, and with the help of friends of both parties. Plaintiff's mother's friend, Allen Keller, installed the HVAC system with the understanding that the house was to be jointly owned by both Plaintiff and Defendant. Defendant's friends installed drywall and other improvements.

Plaintiff paid one half of all mortgage, construction loan, utility, and other expense payments on the property until the parties' relationship deteriorated in mid-2007.*fn3 In January 2007, the parties ended their engagement, but the parties stayed together as a couple and Plaintiff continued making mortgage and home expense payments to Defendant. In May 2007, Defendant moved out of the parties' shared bedroom in the house. In July 2007, on the termination of their romantic relationship, Defendant ordered Plaintiff to vacate the property. Defendant refused the Plaintiff's request to divide the equity in the home, and he instituted a refinancing on the property which stripped a substantial portion of the equity out of the property.*fn4 On October 18, 2007, Zuromski filed a six-count complaint in the circuit court, asserting that Porter's actions: 1) warranted imposition of a constructive trust; 2) required the establishment of a resulting trust; 3) unjustly enriched Porter; 4) constituted a promissory estoppel; 5) required entry of a declaratory judgment declaring that Zuromski was entitled to one-half ownership of the property; and 6) mandated injunctive relief.*fn5 Porter answered and denied liability.

In February 2009, a two-day trial was held. The following month, the trial judge issued a memorandum opinion and order. The court found that Zuromski had "established the existence of a constructive trust as an equitable remedy for unjust enrichment." It emphasized that in cases where only one party holds title, a constructive trust should be imposed, not only where fraud or misrepresentation exists, but also "when the circumstances render it inequitable for the party holding the title to retain it." The court said that this standard was satisfied in this case.*fn6

The circuit court also found an additional basis for imposing a constructive trust. Porter, as holder of legal title to the property, was the dominant party in a confidential relationship.*fn7

Finally, the court said that, even absent a confidential relationship between the parties, it would find a constructive trust on the basis of unjust enrichment. As a result, the court declared that the parties each had an "undivided one half interest in the subject property as tenants in common." It denied any specific monetary award, an injunction, and other claimed relief, but did not expressly address the resulting trust claim.*fn8 The court declared that each party had an undivided interest in the property and appointed a trustee to transfer title and to cause a new deed to be prepared reflecting joint ownership. This appeal followed.*fn9

QUESTIONS PRESENTED

Porter has raised a single issue in this appeal:

On the facts of this case, did the trial judge commit reversible error by imposing a constructive trust on real property owned by Appellant and appointing a Trustee to transfer title to the same?

Zuromski has raised an alternative ground for upholding the judgment in the circuit court, which we have phrased as the following question:

Was there sufficient evidence before the trial court to support the imposition of a resulting trust?*fn10

DISCUSSION

1. Constructive ...


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