Opinion
No. A06-2164.
Filed December 24, 2007.
Appeal from the District court, Lake County, File No. 38-CV-05-503.
Stephen P. Doyle, Wayzata, MN (for respondent).
Keith M. Carlson, Cloquet, MN (for appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
The parties, who were not married, cohabited on land titled in the name of the brother of appellant Drew Simpson. The parties improved that land. Later, appellant's brother transferred title to the property to respondent Ann Mathisen, and appellant alleges that respondent orally gave him an option to acquire the property. After the parties' relationship ended, respondent moved off the property, appellant filed a mechanics' lien on the property, and respondent sued appellant, seeking to regain possession of the property and to have the mechanics' lien discharged. Appellant counterclaimed for a constructive trust, alleging, among other things, that (1) he had purchased and paid for the property but titled it in the name of his brother, and later respondent, for tax reasons; (2) respondent breached the oral option contract; (3) the mechanics' lien was valid; and (4) respondent should not be allowed to unjustly enrich herself by retaining title to the property. The district court granted respondent's motion for summary judgment, ruling that appellant's mechanics' lien was unenforceable, that respondent owns the property free and clear of appellant's claims, and that appellant must vacate the property. We reverse and remand.
DECISION
On appeal from summary judgment, appellate courts review whether there are genuine issues of material fact and whether either party is entitled to judgment as a matter of law. In re Collier, 726 N.W.2d 799, 803 (Minn. 2007). In doing so, appellate courts view the record in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).
Here, the district court summarily denied appellant a constructive trust based on a determination that his titling of the property in the names of his brother, and later respondent, to finesse tax obligations, showed that he lacked the "clean hands" necessary to be awarded equitable relief. See Peterson v. Holiday Recreational Indus., Inc., 726 N.W.2d 499, 505 (Minn.App. 2007) (reciting the "clean hands" doctrine in the general context of equitable remedies), review denied (Minn. Feb. 28, 2007). We reject this analysis for two reasons.
First, generally, the propriety of imposing a constructive trust is a fact question reviewed for clear error. Peterson, 726 N.W.2d at 506; see Wright v. Wright, 311 N.W.2d 484, 485 (Minn. 1981) (defining a constructive trust as a judicially-created equitable remedy imposed to prevent unjust enrichment of persons holding property under a duty to convey it or use it for a particular purpose). And it is inappropriate to resolve fact questions by summary judgment. DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997). Here, while Simpson testified at his deposition that he owed back taxes, he now asserts that this statement was incorrect. If there were no back taxes, appellant cannot have acted in bad faith regarding those nonexistent taxes. Nor can he have acted in bad faith in regard to the authorities to which he allegedly owed the taxes.
Second, and more importantly, appellant's answer and counterclaim provide more than sufficient notice that appellant ultimately sought a distribution of property. The supreme court has analogized claims like appellant's to the claims of a joint venture or a partner. See In re Estate of Eriksen, 337 N.W.2d 671, 674 (Minn. 1983). The supreme court has also indicated that couples cohabitating outside of marriage "[do not obtain] any ownership interest or legal right to the other individual's property or earnings[,]" and "courts cannot conclusively presume that each cohabitant is entitled to the value of any contributions made during the course of their relationship." In re Estate of Palmen, 588 N.W.2d 493, 496 (Minn. 1999). Therefore, as long as a party is seeking to recover his or her own property and is not seeking to assert a right in the property of the other cohabitant, the claimant "is in the same position as any other individual seeking to recover on the theory of unjust enrichment." Id. at 496-97. This analysis can apply even if the property in question is titled in only one of the cohabitant's names. See Eriksen, 337 N.W.2d at 672. Because recovery of what he alleged to be his property is what appellant sought through a counterclaim, we reverse the district court's grant of summary judgment and remand for further proceedings. Our reversal shall not be construed as an expression of opinion regarding the outcome of the proceedings on remand.