AKIMA THOMAS, f/k/a Akima Corbin v. SHARON MENA, MASSACHUSETTS HOUSING PARTNERSHIP FUND, and SANTANDER BANK, N.A., f/k/a Sovereign Bank

This case concerns a single-family property at 26 Union Court in Lynn, Massachusetts. According to the latest recorded deed for 26 Union Court, its owners are plaintiff Akima Corbin (now known by her married name, Akima Thomas) and her mother, defendant Sharon Mena, as joint tenants with rights of survivorship. But land records don't always tell the full story. In this case, Ms. Mena claims she owns all of 26 Union Court, and that Ms. Thomas holds her half for Mena, under the doctrines of resulting trust and constructive trust. Mena also contends that Thomas should be estopped from claiming any interest in 26 Union Court. If Mena prevails on any of her claims, Thomas won't have the right under M.G.L. c. 241, §1 et seq., as a normal joint tenant would, to a court-supervised partition of 26 Union Court. Ms. Thomas has petitioned this Court for precisely that relief.

The parties appeared for trial on October 7, 2019, solely on Ms. Mena's claims. Having heard the parties' witnesses, having reviewed the exhibits admitted into evidence, having accepted the parties' stipulations of fact, and having considered the arguments of counsel, this Court finds the facts set forth above as well as these:

1. Ms. Mena is 64 years old. She was born in Trinidad and Tobago. While there, she married and gave birth to two daughters, one of whom is Ms. Thomas. Mena later divorced her husband.

2. In 1990, Ms. Mena placed Ms. Thomas (who was then five years old) with relatives, and came alone to Massachusetts. She worked first as a live-in babysitter, and later as a certified nursing assistant. She also did other work, performing as many as three jobs at a time.

3. Ms. Thomas turned eighteen in 2003. She graduated from high school in Trinidad and moved to Massachusetts to live with Ms. Mena. At the time, Mena was renting an apartment in Salem, Massachusetts. In 2004, Thomas moved out of Mena's apartment and started living with her boyfriend. Thomas subsequently broke up with her boyfriend, but was pregnant by that time. She returned to reside again in Mena's apartment.

4. Upon Ms. Thomas's return, Ms. Mena started thinking of buying a larger place to live. She started saving more purposefully for a down payment and took a first-time homebuyer course. Taking that course qualified Mena for a home-purchase subsidy. But after completing the course, Mena's credit union told her that she didn't qualify for a suitably sized loan.

5. Ms. Mena thus discussed with Ms. Thomas her becoming a co-borrower on a future residential loan. Thomas agreed, and she joined in Mena's efforts to locate a suitable new home. Mena eventually attended an open house for 26 Union Court in the spring of 2005. On the same day as the open house, Mena made an offer and paid a $500 deposit towards the purchase. That deposit came entirely from Mena's savings.

6. Ms. Mena and Ms. Thomas hired an attorney to help them review a purchase and sale agreement for 26 Union Court. That agreement named Mena and Thomas (then Corbin) as the property's "Buyer." Mena gave two explanations as to how that occurred. She first believed, and reportedly told Thomas, that having them both listed as "Buyer" would facilitate passing the property to Thomas upon Mena's death, without the property having to go through probate. The eventual deed to Mena and Thomas, reflecting the parties' rights of survivorship, is consistent with that understanding. Mena's second explanation for why she understood that Thomas had to be listed as a "Buyer" is that Mena understood that a lender would insist on that, given that Mena and Thomas were to be co-borrowers on a loan to buy the property.

7. While I believe Ms. Mena's explanations for why she was willing to have Ms. Thomas listed as a "Buyer" on the purchase and sale agreement, and have her name appear on the property's deed, I further find that at no time prior to the purchase of 26 Union Court did Mena and Thomas discuss their relative interests in 26 Union Court or other tenancy issues. In particular, at no time did Thomas ever promise that she would hold for Mena whatever interest Thomas got in the property, nor did Thomas promise not to assert ownership while Mena was still alive.

8. Both Ms. Mena and Ms. Thomas signed the purchase and sale agreement identifying both of them as "Buyer," and both of them initialed each of the agreement's pages. At the time they executed the agreement, Mena paid an additional $4,500 deposit on the property, entirely out of her own funds.

9. Ms. Mena and Ms. Thomas thereafter began applying for financing. The one loan application submitted into evidence, Trial Exhibit 4, shows the parties' liquid assets as approximately $27,700, not including Mena's deposits towards the house. The disclosed liquid assets were entirely Mena's. Thomas reported nothing in the way of liquid assets on Exhibit 4, but she did list her monthly income (as did Mena). Both Mena and Thomas signed the loan application.

10. The parties did not place in evidence a HUD-1 or other summary of the final costs paid at the closing of the purchase of 26 Union Court, which occurred on August 4, 2019. The Court nevertheless can find the following:

a. The price of the property was $240,000, exclusive of closing costs.

b. Ms. Mena had paid by closing $5,000 in deposits.

c. Ms. Mena and Ms. Thomas signed first- and second-mortgage notes, in favor of Sovereign Bank, totaling $230,000. (They signed a third note, called a "subsidy note," that provided funds directly to the holder of the second mortgage so as to reduce Mena and Thomas's monthly payments on their second-mortgage note. The proceeds of the third note weren't applied to the purchase price or closing costs.)

11. While the parties stipulated that "[a]t the closing, there was approximately $5,000 due and owing from the Buyer's side in order to consummate the purchase," that $5,000 difference covers only the difference between the property's price, Ms. Mena's deposits, and the first- and second-mortgage notes. Both Mena and Ms. Thomas testified that more than $5,000 was paid at closing, as there were closing costs. They agree that Mena paid $7,000 at the closing. But Thomas claimed to have paid an additional $3,000 towards the closing costs, for a total payment from Mena and Thomas at the closing of $10,000. I find that Thomas's recollection is mistaken, and that consistent with what had happened up to the point of closing, Ms. Mena paid all of the costs and deposits in advance of closing.

12. At the closing, Ms. Mena and Ms. Thomas signed all of the mortgages and notes each mortgage secured, jointly and severally. The deed from the sellers recites that the grantees are "Sharon Mena and Akima Corbin, as Joint Tenants with Right of Survivorship."

13. Sometime after the closing, Ms. Mena and Ms. Thomas agreed that Thomas would pay the household's monthly utility, cable television/wifi, and telephone bills, and Mena would pay the mortgages, real estate taxes, and insurance. The parties largely abided by this arrangement until January 2013, when Mena left for Trinidad. At that point, Thomas started paying all of the mortgage expenses, real estate taxes, and insurance, in addition to the utility, cable television/wifi, and telephone bills, even though Mena returned to 26 Union Court for occasional visits.

14. Ms. Mena returned to 26 Union Court more permanently in May 2015. In August 2015, Ms. Thomas married and moved out of 26 Union Court. Since that time, Ms. Mena has been paying all of the property's expenses, plus all utilities.

15. In October 2015, Ms. Thomas asked Ms. Mena to get Thomas's name "off the mortgages" for 26 Union Court. Mena explored refinancing the mortgages and was told that her credit wouldn't allow her to refinance solely in her name. The parties' dispute over what to do with the mortgages and 26 Union Court resulted in Thomas petitioning this Court in November 2018 for partition of 26 Union Court.

16. From the time Ms. Thomas first moved to Salem through the purchase of 26 Union Court, Ms. Mena controlled her own financial and personal affairs, and did not rely on Thomas in making financial or other personal decisions.

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The sole issue tried is whether Ms. Thomas is holding her share of 26 Union Court in a "resulting trust" for her mother. "A resulting trust in real estate arises where one party furnishes the consideration to purchase property, not intending a gift or advancement, yet title is taken in the name of another." Fortin v. Roman Catholic Bishop of Worcester, 416 Mass. 781 , 789 (1994). The doctrine rests on the assumption that, "in the absence of anything to show the contrary, he who supplies the purchase price intends that the property bought shall inure to his own benefit and not that of another, and that the conveyance is taken in the name of another for some incidental reason." Quinn v. Quinn, 260 Mass. 494 , 501 (1927). See also McPherson v. McPherson, 337 Mass. 611 , 613-614 (1958) (discussing Quinn assumption).

It's the burden of the party who claims a resulting trust to "prove that he furnished himself the entire consideration or a specific and definite part thereof, for which it was intended he should receive a determinate and fixed fraction of the whole estate conveyed," and that "it was not intended at the time of the conveyance that [the other party holding title] should take a beneficial interest in the property by way of gift, settlement or advancement." Pollock v. Pollock, 223 Mass. 382 , 384 (1916). Ms. Mena easily passes the second of these tests: it's undisputed that she and Ms. Thomas never discussed the issue of who would own what percentages of 26 Union Court, and Mena had no intent to gift Thomas a present interest in the property (as opposed to a future interest, via survivorship).

Ms. Mena has a harder time with the first prong of the test. It's true that she furnished the down payment for 26 Union Court and paid all closing costs. But that amount ($12,000) wasn't the entire consideration for 26 Union Court: $242,000 was due at closing, and $230,000 of that came from Sovereign Bank, as the proceeds of two notes Mena and Ms. Thomas willingly agreed to co-sign. In the absence of a further agreement by Mena, at the time of closing, to pay Thomas's share of the two mortgages with nothing in return, or to indemnify Thomas in the event of any loss under the mortgages, Massachusetts law deems Thomas (by having co-signed the two notes and mortgages) to have provided some of the consideration for 26 Union Court. See Carroll v. Markey, 321 Mass. 87 , 89 (1947); see also Gerace v. Gerace, 301 Mass. 14 (1938) (father and other relatives who co-signed mortgage on property that son wished to purchase held not to have furnished consideration for the property, and to hold property in resulting trust, where parties had agreed that father and relatives would take title in their names, but where son provided down payment and agreed to make everyone else's mortgage payments).

Where does that leave Ms. Mena? The Supreme Judicial Court has looked to the Restatement (Third) of Trusts (2003) and the Restatement (Second) of Trusts (1959) for guidance on resulting-trust issues. See, for example, Cavadi v. DeYeso, 458 Mass. 615 , 631-632 (2011). Under both Restatements, it's presumed that parties own property that's subject to a resulting trust in proportion to each owner's contribution towards acquiring it. See Restatement (Third) at §9, comment (d); Restatement (Second) at §454 ("Where a transfer of property is made to one person and a part of the purchase price is paid by another, a resulting trust arises in favor of the person by whom such payment is made in such proportion as the part paid by him bears to the total purchase price . . . . "); id. at §454, comments (b) and (f). That means that Ms. Mena owns a share of 26 Union Court that acknowledges her cash contribution to the purchase ($12,000) plus her assuming one half of the parties' mortgage obligation ($115,000). That totals $127,000. Dividing that number by 26 Union Court's purchase price and closing costs ($242,000) gives Ms. Mena, under Massachusetts law, a 52.5% share of the property. Ms. Thomas owns the remaining 47.5%.

Ms. Mena contends that she should be given the entirety of Ms. Thomas's interest under a second doctrine, that of "constructive trust." Under Massachusetts law, a court may declare that one person holds property for another via a constructive trust so as to prevent unjust enrichment resulting from fraud, a violation of a fiduciary duty, mistake, or "other circumstances." Fortin, 416 Mass. at 789; see also Nessralla v. Peck, 403 Mass. 757 , 762-63 (1989). The facts of this case don't support a conclusion that Thomas holds her 47.5% interest in 26 Union Court in constructive trust for Mena. Mena has provided no evidence that Thomas engaged in a fraud aimed at depriving Mena of her rightful share of 26 Union Court. Mena also hasn't proven that Thomas was her fiduciary at the time of the 26 Union Court purchase. "It is settled in this Commonwealth that a fiduciary relationship does not arise merely because the parties to a conveyance are members of the same family, even if the transferee promised to hold the land in trust." Kelly v. Kelly, 358 Mass. 154 , 156 (1920).

Ms. Mena also hasn't proven any of the other facts that produce constructive trusts. Mena hasn't established that the deed to her and Ms. Thomas - prepared in a transaction in which both had counsel - mistakenly stated the parties' agreement as to 26 Union Court's ownership: the Court finds that the parties hadn't discussed ownership at all. Mena also hasn't proven other circumstances that would allow this Court to conclude that, given the parties' relative positions at the time of the closing on 26 Union Court, Thomas would be unjustly enriched in the absence of a declaration that she holds her 47.5% share in a constructive trust for Mena: after all, by co-signing the three notes and mortgages, Thomas permitted Mena to buy 26 Union Court, something Mena couldn't do on her own. Thomas's smaller ownership share fully adjusts for her not contributing to the down payment or closing costs for 26 Union Court.

Ms. Mena last claims that Ms. Thomas should be estopped, under the doctrine of promissory estoppel, from claiming any share in 26 Union Court. That doctrine "permits recovery if (1) a promisor makes a promise which he should reasonably expect to induce action or forbearance of a define and substantial character on the part of the promisee, (2) the promise does induce such action or forbearance, and (3) injustice can be avoided only by enforcement of the promise." Loranger Construction Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152 , 154 (1978). But Mena rests her promissory-estoppel argument on a fact she didn't prove at trial: that Thomas agreed to have her name put on the deed for 26 Union Court but not claim any ownership of the property until Mena passed away. The Court finds that Thomas made no such promise.

What does today's ruling mean for Ms. Thomas's request for partition? It means that she and Ms. Mena are joint tenants, and thus Thomas is entitled to a partition of 26 Union Court. It means that in addressing the issues that might arise in connection with partition, the Court will be treating Mena as owning 52.5% of the property and Thomas as owning 47.5%. The Court hasn't ruled as to any issues concerning compensable improvements or other accounting or reimbursement issues. And most importantly, the Court hasn't determined how 26 Union Court shall be partitioned. The Court thus ORDERS the parties to appear for a telephonic status conference on November 20, 2019 at 10:30 a.m. to discuss how this case should proceed from here.

SO ORDERED.