With: SUPERIOR COURT CASE NO. WOCV 2008-2813A
This is a partition action within the land courts jurisdiction, [Note 1] with factually-related additional claims for breach of contract and unjust enrichment that were transferred to superior court and interdepartmentally assigned to me to hear and resolve in this consolidated proceeding. [Note 2] All arise from the property at 35 Washington Street in Shrewsbury.
Petitioners Janice Combs and Ronald Whittle (Janice and Ronald) and respondent Joyce Whittle (Joyce) are siblings and, by January 24, 2002 deed from their mother Marjorie Whittle (Marjorie), became co-tenants of the property in equal shares. By mutual agreement, Marjorie continued to live in the house until her death on March 21, 2005. Joyce was also living in the house at the time of Marjories death and the siblings agreed she could continue to do so for another two years. This suit was brought when Joyce stayed past those two years and the parties were unable to agree on a plan for the propertys sale and the appropriate division of the sale proceeds.
Every co-tenant has an absolute right to partition, regardless of whether the others agree. OBrien v. Mahoney, 179 Mass. 200 , 204 (1901). The property could not physically be divided among the co-tenants in any practical way. A partition commissioner was thus appointed, the property sold, and the net proceeds held in escrow. [Note 3] A trial was held, jury-waived, to resolve the parties competing claims and determine the proper distribution of the escrowed funds. Based on the parties stipulations, the evidence admitted at the trial, and my assessment of the credibility, weight and appropriate inferences to be drawn from that evidence, I find and rule as follows.
Facts and Analysis
There are three areas of disagreement between the parties.
The first concerns the renovations Joyce alleges she paid for while she lived at the property with Marjorie (the basement renovations) and, more specifically, Joyces right (if any) to compensation for them either in contract (for their cost or value), unjust enrichment (for the value they added to the home at the time it was sold), or pursuant to G.L. c. 241 § 23 (for the value they added to the home at the time it was sold). All were done to the part of the house Joyce lived in, with the intent to create a separate living space for her and her son. In essence, they built out the previously unfinished basement by creating two bedrooms, a full bathroom and a living room. The particular questions at issue are these. Did Joyce, in fact, pay for these renovations? [Note 4] If so, how much? Did Janice and Ronald agree to reimburse Joyce when the house was sold? Did the basement renovations add to the overall value of the house at the time of that sale? If so, how much? Lastly, Janice and Ronald contend that those renovations were built solely for Joyces benefit while she lived at the house and their cost and value added were intended as her rent. If so, should Joyce receive any compensation for them?
The second area of disagreement arises from Janice and Ronalds allegation that Joyce effectively blocked the sale of the property from March 2007 (when the two year period after Marjories death expired) until its ultimate sale by the commissioner on June 15, 2009. They contend that the market value of the house dropped precipitously during that time and seek recovery of that fall in value. They also contend that Joyce should pay the full amount of the commissioners fees and expenses since, in their view, neither this proceeding nor its resultant commissioner would have been necessary had Joyce acted reasonably.
The third concerns the proper allocation of responsibility for various utility and maintenance bills and whether Joyce should be charged rent for the period from and after April 1, 2007 (the end of the two years after Marjories death) to the time Joyce vacated the house in May 2009.
I address each of these in turn.
35 Washington Street was the family home. Janice, Ronald and Joyce moved away as they became adults. Marjorie, a widow, remained. For reasons unexplained in the record but likely related to estate planning issues, Marjorie deeded the home to her children on January 24, 2002 as co-tenants in equal shares. In practical effect, however, nothing changed. With the siblings assent, Marjorie continued to live at the house and treated it as hers, paying all its bills and also for various renovations. [Note 5]
Joyce was divorced and unemployed in 2002, with a young son. [Note 6] She was very close to Marjorie, who invited her to move in with her. At that time, the house had three bedrooms and two bathrooms, all upstairs. The basement was unfinished. Joyce wanted a separate bedroom/bathroom area for her and her son in the basement, and Marjorie agreed. Joyce then sold her house in Holden, put the net proceeds from that sale into her mothers bank account, [Note 7] and two new bedrooms, a new full bathroom, a new living room and a new entryway were constructed in the previously unfinished basement. The cost was approximately $20,000 and was paid out of Marjories account. I find that Joyce was the source of the money. [Note 8]
Joyce claims she had an agreement with Janice and Ronald that they would reimburse her for 2/3s of the cost of these renovations at such time as the house was sold. I do not find this credible. Janice and Ronald were certainly aware of the work and raised no objection to it (Ronald periodically visited and watched the construction as it took place), but I doubt there were any definitive financial discussions at this time and certainly nothing that amounted to an agreement. Marjorie was only 79 and in good health. It is far more likely that the topic of reimbursement either never arose or was discussed only in a passing manner, and that Joyce was not bothered by this because she expected to live there with her mother for many years to come. I similarly reject Janice and Ronalds argument that Joyces payment for the renovations was somehow intended as rent for the right to live there while Marjorie was alive. Absent ouster or independent agreement, neither of which existed prior to Marjories death, [Note 9] co-tenants are not liable to the others for rent when they occupy the premises. Stylianopoulos v. Stylianopoulos, 17 Mass. App. Ct. 64 , 66-67 (1983). To the contrary, everyone agrees that Joyce lived at the house at Marjories invitation, with Janice and Ronalds knowledge and acquiescence.
Since there is no contractual liability for the cost or value of the renovations, and no rental value or other offset for the period of time prior to Marjories death, the inquiry turns to the partition statute, specifically G.L. c. 241 § 23. [Note 10] That provision permits the court, if justice and equity so require, to award compensation for buildings or other permanent improvements on the common land in an amount not exceeding the actual amount by which the market value of the common land has been increased thereby. [Note 11] G.L. c. 241 § 23. It also allows the deduction of any benefit which the party claiming compensation has received from the common land. Id. [T]he judge should begin with the presumption of equal division and then make adjustments to that presumption for particular contributions to the property, and the effect of those contributions on the propertys increase in value, to the extent that the party seeking the adjustment carries his or her burden of proving that the adjustment is warranted. Canepari v. Pascale, 78 Mass. App. Ct. 840 , 846 (2011).
As noted above, the renovations at issue were the construction of two bedrooms, a bathroom and a living room in the basement of the property, a new doorway from the basement to the garage, and a new hallway exit. Their cost was approximately $20,000. The work was properly performed and, from the pictures and testimony admitted into evidence, remained in good condition through the time the property was sold. The commissioner sold the house for $245,000, very close to its appraised value of $250,000 as determined by the appraiser retained by the commissioner. The report of that appraiser supports a calculation of the value added by the basement improvements at $22,000. [Note 12] Having reviewed all the evidence, I concur with that figure. Joyce is thus entitled to compensation in the amount of $22,000 for those improvements pursuant to G.L. c. 241 § 23. I do not deduct any amount for Joyces use and occupancy of those improvements from the time they were constructed through the two year period after Marjories death because Joyce was there with Janice and Ronalds assent and because, during the two year period, she paid all maintenance and carrying costs on the property including homeowners insurance, property taxes and utility bills. For the reasons and in the amounts set forth below, however, deductions are appropriate for the period after the expiration of those two years to the time Joyce vacated the property.
Janice and Ronald contend that Joyce should be liable for the propertys drop in value from the time her two years ended (the two years after Marjories death that Janice, Ronald and Joyce agreed Joyce could remain in the house, i.e. to April 1, 2007) to the time it ultimately sold (June 15, 2009). I disagree.
First, any such calculation would be impermissibly speculative. As noted in Lowrie v. Castle, 225 Mass. 37 (1916):
[Damages] need not be susceptible of calculation with mathematical exactness, provided there is a sufficient basis for a rational conclusion. But such damages cannot be recovered when they are remote, speculative, hypothetical, and not within the realm of reasonable certainty. The nature of the business or venture upon which the anticipated profits are claimed must be such as to support an inference of definite profits grounded upon a reasonably sure basis of facts. When the elements, upon which the claim for prospective profits rests, are numerous and shifting contingencies whose relation to the wrong complained of is problematical, and such profits are not provable with assurance as a trustworthy result of the alleged cause, then there can be no recovery. Manifest ambiguities in ascertaining what would have been the course of events in the face of complicated factors, under circumstances which never have come to pass, and inherent difficulties in calculating the amount of prospective gains, prevent the recovery of damages. Pure chances lying between the alleged wrong and the anticipated profits, dependent upon unsettled conditions, render impracticable the assertion of cause and effect.
Id. at 51-52. See also Augat, Inc. v. Aegis, Inc., 417 Mass. 484 , 488-89 (1994); BBF, Inc. v Germanium Power Devices Corp., 13 Mass. App. Ct. 166 , 176-77 (1982); Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159 , 180-81 (1979). Janice and Ronald premise the alleged drop on the accuracy of a July 7, 2007 market analysis by a local realtor which priced the house in the $299,000-$324,000 range. Trial Ex. 5 at 1. But the alleged support for that analysis seems rather cursory. See Trial Ex. 6. More importantly, these numbers were never tested against the market (no actual offers were received), and no expert witness testimony was offered at trial.
Second, if petitioners truly believed that the passage of time was causing value to slip away rapidly, they could have commenced partition proceedings sooner. As noted above, their right as co-tenants to do so was absolute. OBrien, 179 Mass. at 204. I am not persuaded that the propertys value dropped greatly from the time this action began (August 27, 2008) to the time of sale (June 15, 2009).
Lastly, Joyce gained nothing from delay since, as set forth below, she is liable for rent from the time her two years ended to the time she vacated the property, and Janice and Ronald are receiving the benefit of their portion of that rent.
Similarly, I do not find it appropriate to assess Joyce more than her 1/3 share of the commissioners and other costs of this proceeding based on the petitioners assertion that Joyce was unreasonable in not agreeing to the sale of the property on the terms set forth in their June 18, 2008 letter (Trial Ex. 17), forcing them to bring this action. Such a request, in essence, is a motion pursuant to G.L. c. 231 § 6F which can only be granted after a finding that all or substantially all of the claims, defenses, setoffs or counterclaims, whether of a factual, legal or mixed nature, made by any party who was represented by counsel during most or all of the proceeding, were wholly insubstantial, frivolous and not advanced in good faith. G.L. c. 231 § 6F. I cannot make such a finding. It was not frivolous for Joyce to pursue reimbursement for the value of the basement renovations, even though the amount she wanted is more than she now receives. Nor can I find it unreasonable that Joyce refused to agree to the terms offered in the June 2008 letter. None of the three options outlined in that letter gave Joyce any compensation for the basement improvements. Joyce may have wanted to remain in the property as long as possible but, as noted above, the rent she is being assessed for her occupancy beyond the agreed two years after Marjories death is fair compensation to Janice and Ronald for any such delay.
Responsibility for Various Bills, and the Assessment of Rent From and After April 1, 2007
Having heard all the evidence, I find that the parties agreed Joyce could live in the house, rent free, for the two years after Marjories death (i.e. to March 31, 2007), but would have to leave at that time so the property could promptly be sold. Joyce did not vacate the house until May 2009. She is thus liable for rent from April 1, 2007 to May 31, 2009. Stylianopoulos, 17 Mass. App. Ct. at 66-67 (recognizing that rent can be owed by a co-tenant if such an agreement has been made). The parties stipulated that the fair market rental value of the property was $1500 per month over the relevant period of time. Joyce thus owes Janice and Ronald $1000 per month ($500 each) for the twenty-six months from April 1, 2007 to May 31, 2009 ($26,000), less the $13,475 she has already paid into escrow with the commissioner.
Because Joyce lived in the property rent free from March 21, 2005 to March 31, 2007, she is solely responsible for its property tax, homeowners insurance, utility bills, routine upkeep charges (minor repairs, maintenance plan for the gas furnace, etc), snow plowing and lawn care for those months (i.e., all the expenses incurred in connection with the occupancy of the house), which I find was an implicit term of the parties agreement. She is responsible for utility bills (water, electrical and gas), lawn care and snow plowing incurred during the period April 1, 2007 to May 31, 2009 (which would typically be paid by any renter of a single family home), but only her 1/3 share of homeowners insurance, property taxes, and repair costs during that period of time (which the landlord of a single family home typically would have paid). All property-related expenses from and after June 1, 2009 (when Joyce vacated the home) shall be borne in equal shares by the three co-tenants.
The parties stipulated to a series of party expenditures which need to be allocated, [Note 13] but did not provide information for some of them sufficient to make that allocation. Accordingly, a status conference shall be held at 11:45 a.m. on June 6, 2011 to review those expenditures in light of the guiding principles set forth above. The parties should come to that conference with updated information on the current amount of the escrowed funds, their position on the allocation of the various expenditures in light of the principles set forth above, and a calculation of the amount of the distribution that should be made to each of the parties in light of the rulings in this Decision. Final judgment shall enter promptly thereafter.
By the court (Long, J.)
[Note 1] G.L. c. 185 § 1(t).
[Note 2] G.L. c. 211B § 9; Order of Transfer and Assignment (Nov. 25, 2008) (Mulligan, CJAM).
[Note 3] The escrow is in an interest-bearing account, jointly administered by the parties counsel.
[Note 4] The parties agree that the checks to pay for these renovations were drawn on Marjories account.
[Note 5] These particular renovations (new driveway, new exterior siding and paint, new windows, new circuit breakers, and new carpeting, plumbing and other work on the upper floors), which the parties agree were paid for by Marjorie, are separate and distinct from the basement renovations at issue in this lawsuit.
[Note 6] She later found work.
[Note 7] I infer from this that Joyce was not a particularly good money manager. The account was in her mothers sole control.
[Note 8] I acknowledge, but reject, Janice and Ronalds arguments that some of this money could not have come from Joyces funds because it was expended before Joyce deposited the proceeds from the sale of her house in Holden into Marjories account. I am persuaded that any such expenditures were reimbursed. Among other things, there was no real dispute that the difference between the sum Joyce deposited in Marjories account and the sum she subsequently withdrew when she went to California (she later returned) was considerably more than $20,000.
[Note 9] Janice and Ronald neither lived at nor used the property while Marjorie was alive, but this was by their choice and not because they were ousted by anything Joyce said or did. I also find, as noted above, that there were no financial agreements between Joyce, Janice and Ronald prior to Marjories death. There was an agreement after Marjories death, however (the two-year agreement), with the terms and consequences discussed below.
[Note 10] Since Janice, Ronald and Joyce were co-tenants and the partition statute specifically addresses the issue of compensation for property improvements paid for by one co-tenant that ultimately benefit all (G.L. c. 241 § 23), I do not believe Joyce has an independent tort cause of action for unjust enrichment. In any event, in the circumstances of this case, the measure of damages for both would be the same.
[Note 11] Certain other costs incurred to preserve the common estate such as taxes, mortgage debt service and insurance may also be accounted for if it would be a windfall to the noncontributing tenant if,upon partition, the paying tenant and the noncontributing tenant were not obliged to account so that each tenant in common bears his proportional share of the costs. Canepari v. Pascale, 78 Mass. App. Ct. 840 , 846 (2011) (citing Stylianopoulos, 17 Mass. App. Ct. at 69-70). This aspect of the statute is discussed below.
[Note 12] See its discussion of adjustments. Trial Ex. 1 at 4. In the opinion of the appraiser, a full bath added $10,000 in value (here, Joyce added one), each bedroom $5,000 (here, Joyce added two), and each additional room $2,000 (here, Joyce added a living room).
[Note 13] See Joint Stipulations, Exhibit A (Sept. 11, 2009).