Laura Dee, Appellant, v Dena Rakower, Respondent.
Supreme Court, Appellate Division, Second Department, New York
November 13, 2013
113 A.D.3d 204 | 976 N.Y.S.2d 470
Kahn & Goldberg, LLP, New York City (Michele Kahn of counsel), for appellant.
David P. Rubinstein, P.C., New York City, for respondent.
OPINION OF THE COURT
Austin, J.
The parties lived together in a committed, same-sex relationship for nearly 18 years, and are the parents of two children. After the relationship ended, the plaintiff commenced this action seeking, inter alia, damages for breach of an alleged oral “joint venture/partnership” agreement whereby she would share in assets, including the defendant‘s retirement contributions and earnings, in exchange for leaving her full-time job to care for the parties’ children. The plaintiff also asserted several equitable causes of action predicated upon the alleged oral agreement to share in the defendant‘s retirement contributions and earnings. For the reasons that follow, we conclude that the complaint is sufficiently pleaded to state a cause of action sounding in breach of contract. Accordingly, the Supreme Court should have denied that branch of the defendant‘s motion pursuant to
In her complaint, the plaintiff alleged, and the defendant did not dispute, that she was involved in a committed relationship with the defendant, living as a family unit, from 1990 until 2007. This was prior to the passage of New York‘s Marriage Equality Act (see
According to the allegations set forth in the complaint, before they had children, each party was employed full-time, earning a salary and retirement benefits. The parties pooled their respective salaries to meet their shared expenses pursuant to what the plaintiff described as a specific agreement to form “a partnership and/or joint venture.” In 1996, in furtherance of their agreement, the parties purchased a house as “joint tenants with rights of survivorship.”
After the parties’ first child was born, the parties agreed, given the cost of child care, that the plaintiff would eschew her full-time employment and work part-time so that she could “be home with the child (later, children) and perform other nonfinancial services for the benefit of the family and for the parties’ partnership and/or joint venture” while the defendant would continue to work full-time. The plaintiff claims that her decision to leave her full-time employment was based upon the defendant‘s promise that her non-economic contributions to their family unit would, along with their pooled salaries and assets, be in furtherance of the “partnership/joint venture.” Indeed, the parties “realized and specifically discussed that [the] [d]efendant would be earning more income for, and [the plaintiff] would be contributing more non-financial services to, the parties’ partnership/joint venture.” The plaintiff asserts that, as a result, the parties specifically agreed to share equally in all financial contributions made by each of them and that all such contributions were for their mutual benefit. In addition, the parties allegedly specifically discussed that the defendant would continue to accrue retirement savings while the plaintiff would no longer be able to, and agreed that the plaintiff would be entitled to one half of the defendant‘s retirement contributions and earnings for the period that the plaintiff did not work at a job that provided her with a retirement plan.
Upon the termination of their nearly-18-year relationship, the plaintiff commenced this action. In her complaint, the plaintiff
In her amended answer, the defendant denied the essential allegations of the complaint and interposed a general affirmative defense that the complaint failed to state a cause of action. Thereafter, the defendant moved pursuant to
In an order entered January 19, 2011, the Supreme Court granted the defendant‘s motion, determining that a cause of action was not stated.
Standard for a Motion to Dismiss for Failure to State a Cause of Action
On a motion to dismiss a complaint pursuant to
Breach of Contract Cause of Action
Applying these principles here, we find that, within its four corners, the complaint sufficiently alleges the elements of a breach of contract cause of action necessary to survive a motion to dismiss pursuant to
In her complaint, the plaintiff sufficiently pleaded all of the elements of a breach of contract cause of action. In pertinent part, she alleged:
“15. After the parties’ first child was born in 1996, the parties agreed that, given the costs of child care, Plaintiff would leave her full time job and assume part-time work so she could be home with the child (later, children) and perform other non-financial services for the benefit of the family and for the parties’ partnership and/or joint venture, while Defendant would continue to work full-time to support the family/joint venture/partnership financially.
“16. At that time, the parties realized and specifically discussed that Defendant would be earning more income for, and Plaintiff would be contributing more non-financial services to, the parties’ partnership/joint venture.
“17. The parties therefore specifically agreed that they would share equally in all financial and non-financial contributions made by each of them and that all such contributions—including without limitation earnings, assets, money, funds, accounts, and labor—was for their mutual benefit . . .
“18. At that time, the parties also realized and specifically discussed that Defendant would continue to accrue retirement savings from her work while Plaintiff would not, since Plaintiff would no longer work at a job which provided retirement plans.
“19. The parties therefore specifically agreed that Plaintiff would be entitled to one-half of Defendant‘s retirement contributions and earnings that accrued to Defendant during the period that Plaintiff did not work at a job that provided her with full retirement plans.”
The alleged contractual agreement between the parties was supported by consideration. “Consideration consists of either a benefit to the promisor or a detriment to the promisee. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him [or her]” (Anand v Wilson, 32 AD3d 808, 809 [2006]). The consideration here for the alleged contract is the forbearance of the plaintiff‘s career, the inability to continue to save toward her retirement during that forbearance, and her maintenance of the household in return for a share in the defendant‘s retirement benefits and other assets earned during the period of forbearance (see e.g. Halliwell v Gordon, 61 AD3d 932, 933-934 [2009]; C&D Dev., Inc. v Sea Breeze Dev., LLC, 60 AD3d 610, 611 [2009]; Anesthesia Assoc. of Mount Kisco, LLP v Northern Westchester Hosp. Ctr., 59 AD3d 473, 480 [2009]). Since the plaintiff also alleged that the defendant breached the alleged agreement and that she has sustained damages as a result of that breach, at this pleading stage, the eighth cause of action must survive dismissal (see e.g. Guido v Orange Regional Med. Ctr., 102 AD3d 828, 832 [2013]).
The fact that the alleged agreement was made by an unmarried couple living together does not render it unenforceable. “New York courts have long accepted the concept that an express agreement between unmarried persons living together is as enforceable as though they were not living together, provided only that illicit sexual relations were not ‘part of the consideration of the contract‘” (Morone v Morone, 50 NY2d 481, 486 [1980] [citations omitted], quoting Rhodes v Stone, 17 NYS 561, 562 [Sup Ct, Gen Term, 5th Dept 1892]). “[W]hile cohabitation without marriage does not give rise to the property and financial rights which normally attend the marital relation, neither does cohabitation disable the parties from making an agreement within the normal rules of contract law” (Morone v Morone, 50 NY2d at 486; see Matter of Gorden, 8 NY2d 71, 75 [1960]).
There is no reason, on this record, at this early stage of the litigation to conclude, as the Supreme Court did, that the oral agreement between the parties cannot serve as the basis for a breach of contract cause of action. Our dissenting colleague posits that even though the complaint alleges that the parties entered into an oral agreement to equally share in the financial and nonfinancial contributions made by each, it nevertheless fails to plead a breach of contract cause of action because it does not specifically allege that the parties agreed that they would divide their combined assets and the defendant‘s accrued pension benefits in the event that their relationship ended, and how they intended to do so. We disagree since the plaintiff sufficiently pleaded all of the required elements of a breach of contract cause of action in the complaint.
Contrary to the Supreme Court‘s determination and the opinion of our dissenting colleague, the plaintiff‘s failure to specifically allege that there was a “meeting of the minds” as to how the assets would be distributed upon the termination of the parties’ relationship does not compel the conclusion that the complaint fails to state a cause of action to recover damages for breach of contract. There is no requirement that a breach of contract cause of action include such an allegation in order to survive a motion pursuant to
Constructive Trust Cause of Action
The equitable remedy of a constructive trust may be imposed “‘[w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest‘” (Sharp v Kosmalski, 40 NY2d 119, 121 [1976], quoting Beatty v Guggenheim Exploration Co., 225 NY 380, 386 [1919]; see Simonds v Simonds, 45 NY2d 233, 241 [1978]; Rowe v Kingston, 94 AD3d 852, 853 [2012]). The elements of a cause of action to impose a constructive trust are (1) the existence of a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment (see Sharp v Kosmalski, 40 NY2d at 121; Quadrozzi v Estate of Quadrozzi, 99 AD3d 688, 691 [2012]; Rowe v Kingston, 94 AD3d at 853; Poupis v Brown, 90 AD3d 881, 882 [2011]). “However, as these elements serve only as a guideline, a constructive trust may still be imposed even if all of the elements are not established” (Rowe v Kingston, 94 AD3d at 853; see Simonds v Simonds, 45 NY2d at 243; Quadrozzi v Estate of Quadrozzi, 99 AD3d at 691) and the “factors should be applied flexibly” (Cruz v McAneney, 31 AD3d 54, 59 [2006]).
In this case, there is no dispute that the parties enjoyed a confidential relationship for 17 years. Further, the plaintiff has alleged a promise associated with her agreement to leave full-time employment in favor of part-time employment in order to provide full-time child care to the parties’ two children. In addition, the plaintiff alleged a transfer in reliance on a promise by claiming a forbearance of the plaintiff‘s opportunity of realizing a retirement benefit in reliance upon the defendant‘s alleged promise.
However, although it is not necessary to establish each of the elements of a constructive trust in order to obtain equitable relief (see Simonds v Simonds, 45 NY2d at 243; Quadrozzi v Estate of Quadrozzi, 99 AD3d at 691; Rowe v Kingston, 94 AD3d at 853; see also Artache v Goldin, 133 AD2d 596, 599 [1987]), the allegations with respect to the seventh cause of action are insufficient to state a cause of action to impose a constructive trust. Unlike divorcing married couples who can rely upon the equitable distribution law (see
Accordingly, the Supreme Court properly granted that branch of the defendant‘s motion which was to dismiss the seventh cause of action.
Unjust Enrichment Cause of Action
A cause of action based on unjust enrichment is closely related to a cause of action to impose a constructive trust, since “[t]he ultimate purpose of a constructive trust is to prevent unjust enrichment” (Cruz v McAneney, 31 AD3d 54, 58-59 [2006] [based upon the equitable principles of constructive trust and unjust enrichment, the rights of a surviving same-sex domestic partner in the September 11 Victims Compensation Fund were not lost upon the ground that the partners were not married]; cf. Cannisi v Walsh, 13 Misc 3d 1231[A], 2006 NY Slip Op 52075[U] [Sup Ct, Kings County 2006]).
To establish an unjust enrichment cause of action, a plaintiff must allege that (1) the other party was enriched, (2) at that party‘s expense, and (3) it is against equity and good conscience to permit the other party to retain what is sought to be recovered (see Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421 [1972]). “[T]he essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” (id.).
Accounting Cause of Action
“‘The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest‘” (Lawrence v Kennedy, 95 AD3d 955, 958 [2012], quoting Palazzo v Palazzo, 121 AD2d 261, 265 [1986]).
Here, again, there is no question as to whether the parties shared a confidential relationship as members of a committed family unit. However, the complaint does not allege that “[t]he fiduciary relationship necessary to obtain an accounting [was] created by the plaintiff entrusting to the defendant some money or property with respect to which the defendant [was] bound to reveal [her] dealings” (Stevens v St. Joseph‘s Hosp., 52 AD2d 722, 722-723 [1976]; see Bouley v Bouley, 19 AD3d 1049, 1051 [2005]; see also Sitar v Sitar, 50 AD3d 667, 670 [2008]). Thus, the plaintiff failed to state a cause of action for an accounting, and the Supreme Court properly granted that branch of the defendant‘s motion which was to dismiss the sixth cause of action.
Conclusion
In according the plaintiff the benefit of all favorable inferences which may be drawn from viewing the complaint (see Campaign for Fiscal Equity v State of New York, 86 NY2d at 318; see also Sokoloff v Harriman Estates Dev. Corp., 96 NY2d at 414; Leon v Martinez, 84 NY2d at 87-88), that branch of the defendant‘s motion which was to dismiss the eighth cause of action should have been denied and the remaining branches granted.
Accordingly, the order is modified, on the law, by deleting the provision thereof granting that branch of the defendant‘s motion pursuant to
Dillon, J.P. (concurring in part and dissenting in part). I
The plaintiff and the defendant were in a 17-year committed relationship. During the relationship, each party gave birth to one biological child, with the parties each adopting the other‘s child. Both parties worked full-time before the birth of the children and accrued retirement benefits. After the birth of the first child, the parties agreed that the plaintiff would work part-time rather than full-time. The defendant continued to work full-time in support of the family.
The parties orally agreed to share equally in all financial and non-financial contributions made by each of them, including earnings and assets. They further orally agreed that the plaintiff would be entitled to one half of the defendant‘s retirement benefits, given that the plaintiff‘s part-time employment removed her from further personal retirement contributions.
In or about 2007, the parties’ relationship ended. The entirety of the relationship preceded the enactment of New York‘s Marriage Equality Act (see
In the order appealed from, the Supreme Court granted the defendant‘s motion to dismiss. The Supreme Court reasoned, as to the breach of contract cause of action, that on the face of the complaint, the parties had no agreement in place about the distribution or settlement of assets in the event the relationship were to end, and the court refused to imply such an agreement not set forth in the complaint.
I agree with the majority on the legal standard that must be applied by courts in determining motions to dismiss under
Whether a complaint states a cause of action is an inquiry that is sui generis.
In an action for an accounting, to impose a constructive trust, and to recover damages for breach of contract and unjust enrichment, as here, the complaint must contain statements addressing the elements of each cause of action. The absence of any given element that cannot be at least reasonably inferred (see China Dev. Indus. Bank v Morgan Stanley & Co. Inc., 86 AD3d 435, 436 [2011]; Rozen v Russ & Russ, P.C., 76 AD3d 965, 968 [2010]) renders the cause of action infirm (see generally “J. Doe No. 1” v CBS Broadcasting Inc., 24 AD3d 215 [2005]; Gray v Rochester Gas & Elec. Corp., 97 AD2d 975 [1983]; Peri v State of New York, 66 AD2d 949 [1978], affd 48 NY2d 734 [1979]).
The parties’ oral understanding relative to the cause of action alleging breach of contract was never reduced to writing. Moreover, by virtue of the lack of a marriage contract, the parties are not eligible for the benefits and protections of New York‘s equitable distribution law, as embodied in
An examination of the complaint in this action reveals an expressed oral contract that the parties, during their relationship, would share equally in the financial and non-financial contributions made by each of them, including such assets as wages, other money, funds, accounts, labor, and retirement earnings. However, the complaint is devoid of any allegation as to whether and how their assets and pension benefits would be divided in the event the parties were to no longer be together. To read such a provision into the parties’ agreement, where none is expressed in the complaint, would result in the invention of implied contractual provisions which, as noted, is prohibited by our law for agreements between unmarried persons living together (see id.).
Moreover, the defendant, in her answer, denied the allegation that the parties had agreed to split her retirement pension. While this fact is irrelevant to whether the complaint states a cause of action on its face, the papers submitted in opposition to the dismissal motion contain no affidavit from the plaintiff or other evidence as to whether and how the parties agreed to share assets and retirement pensions if their relationship terminated. In other words, the plaintiff did not take advantage of the opportunity afforded by
Distilled to its essence, the plaintiff in this action seeks “equitable distribution” of the defendant‘s assets and future pension benefits without alleging in the complaint that the defendant had promised to share them if the parties did not stay together. Indeed, there is no allegation that the parties had any meeting of the minds as to the distribution of property or assets upon a termination of their relationship. Absent such an allegation, and absent an affidavit from the plaintiff clarifying or expanding her description of the parties’ agreement to cover such an eventuality, the complaint fails to state a cause of action. The plaintiff‘s theory of recovery is dependent upon implying terms for the distribution of retirement benefits to circumstances
No aspect of this partial dissent speaks to the merits of New York‘s more recent enactment of the Marriage Equality Act. This Court is sensitive to the complications occasioned by various forms of familial relationships that necessarily result in financial agreements or entanglements. The judiciary, however, is limited in addressing and determining the ownership and/or distribution of familial assets, absent either the existence of a lawfully recognized marriage or an enforceable expressed contract between persons in a cohabitational relationship.
Austin, Balkin and Cohen, JJ., concur; Dillon, J.P., concurs in part and dissents in part, and votes to affirm the order appealed from, in a separate memorandum.
Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendant‘s motion pursuant to