Tuesday, June 5, 2012

Your Legal ownership in a Living-Together association - The ownership of Unmarried Cohabitants

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If you've read Part I of this article, you know that it's highly difficult to build a common law marriage under New York law. And, if this led you to wonder why the law has seemingly abdicated responsibility for issues related to the break-up of long-term living-together relationships, you're not alone. Why the courts and legislature have taken this coming is puzzling, particularly considering that in modern society such relationships are more prevalent than ever.

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You may find the talk to be disappointing. It's what lawyers and judges call, "judicial economy". This is the idea that inevitable litigants, as a matter of collective policy, should be kept out of the courts. The original rationale cited is the proverbial occasion of the floodgates, though some cite a state interest in promoting marriage. It's no secret that disjunction cases include a troublingly high ration of the courts' dockets, most studies say it's as high as 50% in New York State. This means the law is already on overload. So, involving more litigants into the law to address their divorce-like ownership isn't exactly enticing.

Yet, societal and legal trends addition the legal definition of terms such as "marriage" and "family" have been accelerating fast. As these terms come to be more elastic, maybe lawmakers will reconsider, and begin writing legislation that addresses the dilemmas faced in the dissolution of living-together relationships. Until that time, those of you in non-marital relationships seeing to the courts for guidance will likely have to look elsewhere.

One such place is alternate dispute resolution, e.g., mediation or arbitration. Or, you can plan in improve for the potential break-up of your non-marital relationship, by entering into a cohabitation business agreement (an especially sensible alternative for those beginning to fetch asset or build wealth together). Absent these alternatives, it's more than potential that there may be no legal solutions to the problems you'll encounter in the process of dissolving your living-together relationship.

However, before throwing up your hands to denounce the legal law as hopelessly antiquated, read on. There are inevitable circumstances for which the law does supply answers. In the equilibrium of this article, I will exertion to summarize these circumstances and the applicable legal concepts, most of which fetch from tort or ageement law, and elucidate how such might apply to your living-together relationship.

Contractual Rights
The most fundamental legal opinion ready to unmarried cohabitants concerned in establishing their legal ownership or obligations is ageement law. However, its applicability is severely exiguous under New York law. Under most circumstances, for any ageement to be enforceable it needs to have been reduced to writing and supported by "consideration" (meaning one party gives something up and the other receives something of benefit in return, e.g., cost for services rendered).

The courts have additionally held that the terms of any such ageement must be clear and definite. For example, where the promise was to supply domestic services and contributions as a firm partner in replacement for an equal share in the other's business, the court held that the replacement of promises was an enforceable contract. However, a more normal promise, such as one to take care of a primary other in the style to which she had come to be accustomed, in replacement for a promise to introduce and promote the other socially, was held to be inadequate. You should also be aware that any illicit form of notice is void as against collective policy.

The benefits of ageement law are generally only ready to those who have bargained for and entered into a written ageement in improve of their break-up. So, if you're presently complicated in or contemplating a committed living-together relationship, you should strongly think reducing your respective ownership and obligations to contract. This document is akin to a prenuptial business agreement and can be referred to as a cohabitation agreement, living together agreement, or the like.

Granted, it may be difficult, unpleasant, or even unadvisable to broach this topic with your primary other. Moreover, you don't have the capability to induce your primary other to sign a cohabitation business agreement by threatening not to go straight through with the wedding if they won't sign. Yet, other circumstances, e.g., purchasing or renting a common residence, or even involving in together, can maybe serve as motivation.

If you surmount these obstacles, you'll have the benefit of a clear blueprint to corollary in the event of separation. Someone else great benefit of ageement law is that most if not all of the legal benefits of a contractual business agreement are equally ready to same-sex cohabitants. This should also be the case with the equilibrium of legal concepts discussed below.

Property Rights
Assuming that you don't have a valid written contract, you will have to turn to a far less spoton set of legal law for guidance. Most of these legal law have existed since long before living-together arrangements became societally or legally sanctioned (in fact, many are common law innovations, meaning that they date back to case law that originated in England and was later adopted by most states, together with New York). Some of these concepts have been applied to living-together relationships.

Legal Presumptions
There are inevitable established presumptions that may supply guidance in the process of disentangling your financial affairs. Certainly, any bank account jointly titled in your respective names, absent business agreement to the contrary, is presumptively a fifty-fifty shared asset under applicable banking law. The same should apply to other investment accounts like securities, mutual funds, bond or money market accounts.

Jointly titled or jointly acquired assets that can=t readily be divided in half, such as artwork, an automobile or real estate (see consulation below), are more problematic. Although you might be able to agree to sell and equally divide the proceeds, that procedure may be impractical or undesirable for economic reasons.

Partition of Real Property
If you own real estate jointly, it will probably be even more difficult to rule your respective ownership in the event of a dissolution of your non-marital relationship. Under a legal principle known as "partition", the ownership of joint asset holders are determined not just by how title is held, but also by virtue of the relative financial contributions (towards both acquisition and maintenance of the property) made by the title holders. There are lawyers who specialize in this area of practice.
Non-Contractual Rights

An even more troublesome class of property, is assets that were acquired together or straight through joint efforts and which one of you now holds in sole name or otherwise has within his/her exclusive control. To legally address assets of this type, you'll need to resort to theories of legal salvage that fetch from tort and ageement law. Most of these legal concepts were advanced with the idea of redressing wrongs perpetrated by one member of a fiduciary connection against the other (a fiduciary connection is one that by its very nature gives rise to a presumption of mutual trust or dependency, e.g., a broker-customer relationship, a connection in the middle of firm partners or one in the middle of close relatives of unequal bargaining power). These legal concepts include causes of operation under partnership law, ageement law and tort law, such as economic partnership, express contract, unjust enrichment, fraudulent misrepresentation, constructive trust and quantum meruit restitution, all of which are discussed below.

Economic Partnership
One legal opinion that may apply to your living-together connection is the law related to firm partnerships. The courts routinely refer to the financial connection in the middle of the parties to a marriage as an "economic partnership". In disjunction litigation, in order to refute this presumption, you must gift evidence showing that the parties indeed functioned as separate economic units. So, why shouldn't the opinion of economic partnership be applicable to the dissolution of non-marital relationships, assuming that a party can show that their connection functioned as an economic unit?

There are reported cases that have acceptable this logic. One such example is the case of McCall v. Frampton, which was a suit brought by Ms. McCall, an established firm manager of rock and roll acts before she became romantically complicated with Peter Frampton, a excellent rock guitar icon known for such hits as, "Do You Feel Like I Do?". Ms. McCall was able to convince the court that management services that she in case,granted to Mr. Frampton free of charge, services of a kind that she had previously been paid for in the marketplace, constituted a thing of value that should entitle her to recompense (namely, a share of the profits of their partnership).

The decision in McCall notwithstanding, establishing an economic partnership under New York law will need a high acceptable of legal proof. You will need to show that you and your primary other deliberately entered into a firm relationship, and that you then proceeded to function as firm partners over the procedure of your relationship. If this was your situation, I strongly propose that you speak to a lawyer well versed in partnership law.

Quantum Meruit Restitution
In a cause of operation for quantum meruit restitution, the quiz, to be resolved is: "Did the involving party give a financial benefit upon the non-moving party?" This typically could involve housekeeping or homemaking efforts, and, in a more unique case, could include financial, managerial or other marketable services.

As recommend above, it can not include sexual favors, which judges have disapprovingly termed "meretricious" services. Someone else criterion is whether the alleged gift was "quantifiable", or would be more appropriately characterized as "pillow-talk". Unless the advice-giving cohabitant is a career consultant by day, his or her guidance from the sidelines (or more likely, the bedroom) is not likely to be compelling. Again, the case of McCall is illustrative, where Ms. McCall's prior perceive as a rock and roll manager was crucial to the success of her claim.

Under reported New York cases, you must prove the following to make out a case for quantum meruit recovery: (a) good faith performance of the service(s); (b) acceptance thereof by the other party; (c) that you had an anticipation of compensation; and (d) that you can demonstrate the uncostly value of the service(s).

Constructive Trust
In a constructive trust cause of action, the movant must prove a confidential or fiduciary connection with the other party, that a promise was made to him or her, and that as a corollary the other party was unjustly enriched. The courts speak of a constructive trust cause of operation as an "equitable device", meaning one designed to redress inequality. An example of when the courts might apply this concept, is where one party in a position of trust convinces Someone else to replacement money or asset to him or her, based on a proclamation or promise that is subsequently broken.

Unjust Enrichment/Fraudulent Misrepresentation
The cause of operation known as "unjust enrichment" emphasizes the economic unfairness to the aggrieved party in a singular transaction. The related opinion of "fraudulent misrepresentation" involves the same unfairness, but with an added element of fraud. This means that the misrepresentation at issue must have induced the defrauded party to take or omit to take an act that resulted in some enormous detriment.

Palimony
Lastly, under New York law, there is no such thing as "palimony". Again, the opinion of judicial cheaper was a driving force here. The opinion of palimony first came to collective concentration in Marvin v. Marvin, 18 Cal. 3d 660, a California case, decided in 1976, which complicated a non-marital connection in the middle of the legendary film actor/action hero, Lee Marvin and Michelle Trola Marvin. In that case, the court afforded Ms. Trola Marvin the right to exertion to prove that an implicit or express ageement involving Mr. Marvin=s wage and assets was entered into in the middle of the parties. This case paved the way for recognition of palimony as a recognizable cause of operation in California.

However, on this side of the continent, the courts have viewed the issue quite differently. In 1980, New York's top court, in Morone v. Morone, 50 N.Y.2d 592, decided that it would not identify palimony as a valid cause of operation on the grounds of collective policy. As a result, palimony has been a disfavored cause of operation in New York ever since.

Conclusion
A word of caution, each of the legal concepts described above is applicable only under special circumstances. Again, reference to the involving case of A vs. A, may help to bring this home. Although Mr. And Mrs. A's connection lacked the formal sanction of marriage, they were virtually universally assumed to be a original married couple. After Mrs. A's common law marriage cause of operation was dismissed (as described in Part I of this article), she proceeded under some of the ageement and tort law law discussed above (including constructive trust, quantum meruit, economic partnership, unjust enrichment and fraudulent misrepresentation).

I believe that what enabled Mrs. A to prevail, in the face of Mr. A's appeal to dismiss, were the compelling and special circumstances that she was able to demonstrate. Specifically, when the parties embarked on their living together-relationship, they were in their late-20's to early 30's, and had yet to perform the primary financial success that they would later in life; Mr. A was still plying his trade as an oil burner furnace serviceman, and Mrs. A hers as a dental technician. Yet, over the procedure of their relationship, they built a flourishing firm together. Mrs. A was integrally complicated in both the amelioration of the product, and in fulfilling many of the demanding functions complicated in building a firm from the ground up (including physically involving and perilous jobs like manufacture late-night cash deposits in sometimes marginal neighborhoods).

By the time of their separation, they had a estimate of investments in joint name, filed joint wage tax returns for most years of the relationship, adopted common estate plans, and jointly owned residential apartments, together with the penthouse apartment they lived in up to their separation. While the years in which they built their enormous wealth, Mrs. A served as corporate officer and secretary of their original business, and, as they expanded into asset holding and development, she was issued shares in one or more corporate holding companies.

And lastly, but maybe as importantly, Mrs. A was able to prove these facts. As is often the case after litigation commences, when Mrs. A attempted to fetch inevitable documents in order to prove her claims, Mr. A contended that the documentation no longer existed, was no longer under his ownership or control, or never existed in the first place.

Consequently, it was crucial that Mrs. A had the foresight to hold and copy hundreds of documents before litigation was initiated. As a result, she was armed with an arsenal of paper that would help prove her claims.

So, my last word of guidance is to do more than just keep yourself informed and knowledgeable about your financial affairs. Also, be wary enough to fetch your documentary proof, and to do so before it's too late. Otherwise, you may find that you're barred from locations where documents are kept, and that documents have been thrown out, hidden, shredded, or otherwise located beyond the reach of legal process.

And lastly, the case of Jennings v. Hurt (discussed in Part I of this article) illustrates that you can't tailor the facts of your case to fit your claims. In dismissing Ms. Jennings' common law marriage cause of action, the court also refused her request for permission to amend her complaint to add three non-marital causes of operation (constructive trust, breach of ageement and breach of a promise to support), leaving her with effectively no legal remedy, except for the right to receive child hold for their common child.

Critically, the courts need a proponent of any one of the legal theories described above to specifically plead and prove the definite elements of the given cause of action. This was the case with respect to Ms. Jennings' proposed constructive trust and breach of ageement causes of action, which were held insufficient, as a matter of law, due to failure to plead definite elements of the cause of action. It should come as no surprise (in light of Morone) that the Court dismissed the third proposed cause of action, which it determined to be a mere promise to hold in return for "wifely" duties, in essence a palimony claim, seeing it to be void as against collective policy.

The lawyer for Ms. Jennings contended, rather unconvincingly, after losing on the trial level, that the trial judge had been blinded by Mr. Hurt's celebrity (even claiming that the judge had fallen in "love" with Mr. Hurt). Yet, issues of relative credibility aside, it seems clear to me from the face of their respective allegations that the degree of financial interdependence complicated in the connection in the middle of Ms. Jennings and Mr. Hurt, didn't collate to the interdependence that existed in the middle of whether Ms. McCall and Mr. Frampton, or in the middle of Mrs. A and Mr. A for that matter.

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