Legal Question in Civil Litigation in Massachusetts
Theory of Quantum Meruit, Constructive Trust, both, neither?
Hello. Here goes. An unmarried couple enters an oral agreement to purchase and restore a property. Down payment is split evenly. Working capital is provided by one partner, who is the sole title holder. The other partner invests about $200,000 in sweat equity throughout the course of a full gut-out and remodel. The arrangement is to split the profit equally upon sale. Immediately after completion, couple breaks up and labor partner never resides in home. Two years go by, title holder still resides on property and informs labor partner that the agreement will no longer be honored. Title holder claims there is no profit in a $700+ home purchased for less than $300K, after years of mortgage payments and utilities are recouped. Is labor partner just, in law, to the recovery of damages under quantum meruit? Can labor partner be awarded a constructive trust? Can title holder be reimbursed living expenses from profit? Sticky situation.
1 Answer from Attorneys
Re: Theory of Quantum Meruit, Constructive Trust, both, neither?
Good description of the problem. Still, the answer depends on (and requires) more facts. My sense, based only on the facts you provided, is that you probably have enforceable claims (whether express or implied) to be paid the value of the benefit you bestowed by working all that time, from which he benefitted. A more specific answer depends primarily on what the evidence shows about the parties' mutual understanding while the arrangement was in place; i.e., What each did and said (or didn't do or say) at the time, when their words and actions accurately reflected their true intent.
Given the break-up, and potential claims against the title owner, its not at all surprising he's claiming there is no profit and you are owed nothing. However, his position is both highly questionable on the purported value of the property you recite, and because he now has motive to take that position to benefit himself and impair your rights. he also has the means to do so (no written agreement reflecting terms of agreement and HE alone is the title owner). But the facts also clearly raise questions as to whether he is leveraging his present advantageous position unfairly.
You have significant leverage over him, therefore, on the equities/fairness element of the claims. His position faces the large problem that it is unreasonable to expect a jury to back his position that you were, supposedly, working so hard all that time with NO expectation of some form of compensation. Who would do so and why? He would need a good explanation to overcome these common sense questions, and I would not want to represent him on those grounds.
In fact, if the evidence reveals he is intentionally trying to cheat you (and he can be deemed to be operating commercially, not privately), which seems obvious, you might have claims for unfair/deceptive practices against him, providing you the possibility to obtain 2 or 3 times the amount actually owed, and to recover reasonable attys fees.
Your upside potential is significant enough that you should certainly pursue this further. Feel free to contact me for a free in-person initial consultation.
With fairness on your side, you can usually go a long, long way.