JANICE M. CLARKE v. SHEILA M. MORGAN

In April 2019, 73-year-old Janice M. Clarke petitioned this Court under G.L. c. 241, §1, to partition Unit 651 of a condominium located at 651-643 Summer Street in Rockland, Massachusetts. Clarke's petition described the legal owners of Unit 651 as herself and her 76-year-old sister, respondent Sheila M. Morgan, as joint tenants. Clarke asked that Unit 651 be sold and the proceeds of the sale divided equitably.

Ms. Morgan answered Ms. Clarke's petition. Morgan agreed that Unit 651 should be sold, and the sisters caused that to happen. They deposited the proceeds of the sale (the "Proceeds") with this Court. They then appeared for trial on February 5, 2020 over the division of the Proceeds. Clarke contends she should receive all of the Proceeds because she provided all of the capital to buy the Unit. (Shortly before trial, Clarke moved to amend her petition to claim that Morgan was holding her 50% share of Unit 651 in a "resulting trust" for Clarke. The Court denied that motion, as (a) Clarke's claim would have necessitated discovery, and (b) all discovery in this case closed as of September 30, 2019.) Clarke argues in the alternative that, if she's entitled to only half of the Proceeds, she nevertheless should be reimbursed for certain improvements to Unit 651 and various expenses. Morgan argues that she should be compensated for her own improvements to the Unit, be paid her share of rental income from the Unit, and otherwise be treated as a 50% owner of the Unit.

Having heard the testimony of the parties' witnesses, having reviewed the exhibits admitted into evidence, having accepted the parties' stipulations of fact, and having heard the arguments of counsel, the Court FINDS the facts set forth above as well as these:

1. The sisters have very different work histories. Ms. Clarke retired as a partner from Boston Financial, a real estate syndicator that owned and operated properties in 26 states. Ms. Morgan is a retired laborer. At one time she worked for Wearguard, a company that made uniforms and work clothing.

2. In July 2000, Ms. Clarke purchased Unit 651 for $155,000. While title to Unit 651 was in her name and that of her then-husband, Gordon W. Provost, Clarke provided all of the money to buy Unit 651 (none was borrowed).

3. Ms. Clarke bought Unit 651 to give her ailing mother, Viola Pike, and Ms. Morgan a suitable place to live. After Pike and Morgan moved to Unit 651, Clarke paid for a home health aide to care for Pike during the day. Morgan cared for Pike at night.

4. Ms. Morgan and Ms. Pike paid rent to Ms. Clarke for use of Unit 651. Initially the monthly rent was $700 (with Pike contributing $200), but over time the rent rose to $1,000.

5. Sometime after 2000, but before 2003, Ms. Pike began living in a nursing home. After Pike moved out of Unit 651, Ms. Morgan (with Ms. Clarke's encouragement) convinced a former Wearguard colleague, Kathy Scherer, to rent one of Unit 651's rooms. Clarke and Morgan set Scherer's monthly rent. Scherer's initial monthly rent was $700. Scherer paid that rent in cash to Morgan, and Morgan would then pay Unit 651's entire rent to Clarke.

6. In June 2003, pursuant to a marital separation agreement, Mr. Provost conveyed to Ms. Clarke his interest in Unit 651, for one dollar.

7. From 2000 through December 2018, Ms. Morgan paid all of the expenses for the daily upkeep of Unit 651, plus the Unit's utility bills.

8. Prior to June 26, 2009, Ms. Morgan paid for installation of a deck, framing of the Unit's basement walls, installation of two garbage disposals, and a "T pipe." (Prior to trial, Morgan suggested she should be reimbursed out of the Proceeds for installing an oil tank at Unit 651 and wallpapering the Unit. She provided no testimony at trial concerning the oil tank, and while the parties agree that Morgan paid $350 for wallpapering, she provided no testimony as to when she incurred that expense.)

9. From 2000 through December 2018, Ms. Morgan did not pay the Unit's real-estate taxes or insurance premiums. Ms. Clarke made those payments out of the money Morgan remitted for rent. Prior to June 26, 2009, Clarke also paid for a refrigerator, a dishwasher and a stove for the Unit, and had its roof replaced.

10. On June 21, 2009, Ms. Morgan arranged for $7,025 in improvements to be made to Unit 651. Morgan paid a $2,300 deposit for that work on June 21, 2009. The work didn't begin until after June 26, 2009, and Morgan paid the balance of the improvement contract ($4,725) after that date. Morgan didn't consult with Ms. Clarke before having the improvements made.

11. The date of June 26, 2009, often repeated above, is critical to this case because on that day, Ms. Clarke conveyed title to Unit 651 to herself and Ms. Morgan, as joint tenants, for the stated consideration of $100 (although no actual consideration was paid). A deed reflecting that conveyance was recorded at the Plymouth County Registry of Deeds the same day Clarke signed it.

12. Ms. Clarke's chief motive for giving her sister joint title to Unit 651 was to provide Ms. Morgan with a place to live if Clarke died, without forcing Morgan to await the probating of Clarke's estate.

13. But the sisters gained something else in 2009 from joint ownership. In the summer of 2009, Ms. Clarke wanted to replace the heating systems in both her personal residence and Unit 651. She learned of a boiler-replacement program that provided five-year, interest-free loans for owner-occupied residences. If she were to make Ms. Morgan a joint tenant of Unit 651, Clarke would be able to arrange an interest-free boiler-replacement loan for both Clarke's personal residence and Unit 651.

14. In the summer of 2009, Ms. Clarke called her attorney, Jennifer Manning, and directed her to draw up a deed that would make Clarke and Ms. Morgan co-owners of Unit 651. Attorney Manning advised Clarke that it might be better to convey Unit 651 to a trust, and require the trust to allow Morgan to live in the Unit after Clarke's death. Attorney Manning also suggested the option of Clarke giving Morgan a life estate in Unit 651. Clarke rejected Attorney Manning's advice, and insisted that Morgan be made a joint tenant of Unit 651. Clarke made that decision without consulting Morgan. Clarke understood at that time the legal consequences of making her sister a joint tenant.

15. At the time Ms. Clarke made her sister a joint tenant of Unit 651, its fair-market value was $236,100.

16. Ms. Morgan didn't learn she'd become an owner of Unit 651 until sometime in July 2009. She learned that fact during a call with Ms. Clarke. Clarke had called to explain the arrangements she'd made for replacing Unit 651's boiler. Clarke told Morgan that replacing the boiler would cost $6,900, and that the money for the replacement was coming from a loan. Clarke told Morgan that Clarke had put Morgan's name on the deed to Unit 651 to save interest on the boiler loan, and had told the heating contractor that both sisters owned Unit 651. Clarke asked Morgan to contact the bank that was providing the boiler loan. The sisters agreed that Morgan would repay the loan, and that Clarke would reduce Morgan's "rent" by the amount of Morgan's loan payments. The Court thus finds that Morgan knew as of July 2009 that she was an owner of Unit 651, although she didn't bother to obtain a copy of her deed until late 2018.

17. Sometime in 2008 or 2009, Ms. Scherer's monthly rent increased to $825. From July 2009 through December 2018, despite being a co-owner of Unit 651, Ms. Morgan was still remitting to Ms. Clarke "rent" that was $1,000 monthly. And while the Town of Rockland was sending to Unit 651 real-estate tax bills addressed to "Clarke Janice M & Sheila M Morgan," Morgan sent those bills to Clarke, and Clarke continued to pay them out of Unit 651's "rent." Unit 651's real-estate taxes were approximately $4,000 annually. Clarke also continued to pay the Unit's insurance premiums, approximately $1,250 annually, out of Unit 651's "rent." Morgan continued to be solely responsible for all other Unit 651 expenses. She didn't question these arrangements until late 2018.

18. In late 2018, the sisters (who until that point had been on good terms) had an argument over nothing having to do with Unit 651. Around the same time, however, the Unit's quarterly real-estate taxes were due (a roughly $1,000 expense), and Ms. Clarke was feeling financial pressure. So Clarke gave the tax bill to Ms. Morgan and asked her to pay it. The sisters volleyed the bill until Morgan eventually paid it in December 2018. Morgan then did not pay the January 2019 "rent."

19. In early February 2019, Ms. Clarke hired an attorney. He wrote to Ms. Morgan and told her that Clarke wished to end the sisters' joint ownership of Unit 651. Morgan rejected Clarke's three proposals for ending their tenancy, and thereafter Clark filed this partition action.

20. Ms. Morgan made no remittances of "rent" for the first three months of 2019. That was the only period during her occupancy of Unit 651 in which she didn't remit rent. She resumed monthly remittances in April 2019 and sent Ms. Clarke rent through July 2019. In August 2019, Unit 651 was put on the market.

21. Unit 651 was sold on October 11, 2019 for $282,500. (The net Proceeds, deposited with the Court, were $267,918.66. The Proceeds are in an interest-bearing account.) Ms. Scherer and Ms. Morgan lived in the Unit until it was sold. Ms. Clarke never resided in the Unit after initially purchasing it, but that was her decision. Morgan never prevented Clarke from living at or using the Unit.

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The first issue is whether the Court should disregard the parties' joint tenancy in Unit 651, and award Ms. Clarke more than 50% of the Proceeds. A conveyance to joint tenants, such as Clarke's June 26, 2009 conveyance to Ms. Morgan, creates among those tenants equal undivided interests. See Moat v. Ducharme, 28 Mass. App. Ct. 749 , 751 (1990). "Upon dissolution of a joint tenancy, however, that equality [of interests] is presumptive rather than conclusive." Id. A joint owner thus may show, in the course of a partition proceeding, "that [her] beneficial interest [in the property] is 'different from that indicated by the record title.'" Gonzalez v. Pierce-Williams, 68 Mass. App. Ct. 785 , 787 (2007), quoting Asker v. Asker, 8 Mass. App. Ct. 634 , 638 (1979). "[T]he burden of showing that a departure from equal division is appropriate rests with the party who seeks the departure." Canepari v. Pascale, 78 Mass. App. Ct. 840 , 844 (2011).

Ms. Clarke rests her claim to a greater-than-50% share of the Proceeds on three facts: (a) she bought Unit 651 originally, in 2000, with no contribution from her sister; (b) Clarke gave her sister joint tenancy only for estate-planning purposes; and (c) Clarke made that decision without consulting her sister. Clarke's arguments echo those often seen in resulting-trust cases, and as noted earlier, this Court denied Clarke's motion on the eve of trial to turn this case into one over an alleged resulting trust. The resulting-trust cases are nevertheless instructive here, and indicate that Clarke is not entitled to a greater share of the Proceeds.

"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, [the person] 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 the Quinn assumption).

As is true for a joint owner of property who seeks to receive a greater-than-equal share of the proceeds of the property's sale, it's the burden of the party who claims a resulting trust to "prove that [she] furnished [herself] the entire consideration or a specific and definite part thereof, for which it was intended [she] 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). One examines whether a resulting trust has arisen at the time of the challenged conveyance: "'[N]othing done after the completion of the purchase could affect the creation of the trust.'" Lewis v. Mills, 32 Mass. App. Ct. 660 , 664 (1992), quoting Checovich v. Checovich, 339 Mass. 71 , 74 (1959) (brackets in Lewis).

One sees in the resulting-trust cases the same facts Ms. Clarke presses in support of her claim for a larger share of the Proceeds. Her facts focus solely on the moment she conveyed to her sister an interest in Unit 651, as Lewis instructs. Those facts show that Clarke didn't discuss the transaction with her sister, and that Clarke furnished the entire consideration for Unit 651 – a critical element in all of the resulting-trust cases.

While the resulting-trust cases provide a sword to Ms. Clarke, they also provide a shield to her sister. That's because, had the Court allowed Clarke to press her resulting-trust claim, she would have been required to show that she had no intent as of June 26, 2009 to provide any benefit to her sister. And that's where Clarke's case for a greater share of the Proceeds collapses: Clarke deeded her sister half of Unit 651 largely in order to benefit her sister. Clarke also rejected her attorney's advice that there were ways of achieving Clarke's goal – providing housing for her sister, after Clarke's death – that wouldn't give her sister co-ownership of Unit 651. Clarke was experienced in real estate and understood the consequences of giving her sister joint ownership of the Unit. She nevertheless insisted on giving Ms. Morgan joint tenancy.

The Appeals Court suggests in Lewis that the doctrine of resulting trust was not developed to "rescu[e] every situation of perceived inequity or unjust enrichment," to benefit "disgruntled parties who seek to have their deals recharacterized," or to create "agreement[s] where there are none." Lewis, 32 Mass. App. Ct. at 665 n. 13. See also Young v. Paquette, 341 Mass. 67 , 69, 74-78 (1960) (mother who was the sole owner of a property, who later conveyed it to herself and her daughter in joint tenancy with mother reserving the right to collect rents during her lifetime, not allowed to "change[] her mind" about the conveyance when mother and daughter had a falling out, and daughter petitioned for partition of the property). None of the cases applying M.G.L. c. 241 suggests that, in the absence of an agreement between the parties, a court in a partition action may adjust anyone's record-ownership interests on the basis of facts relating to how the parties obtained title, if those same facts wouldn't entitle one or more owners to an adjustment on the grounds of resulting trust (or a related doctrine, that of constructive trust, a doctrine that has no application here). The Court thus holds that Ms. Clarke has not overcome the presumption that the Proceeds should be split equally.

Canepari, 78 Mass. App. Ct. at 846, instructs that once the court in a partition case has made a preliminary determination as to how the property should be divided, the court should then examine requested adjustments. Ms. Clarke and Ms. Morgan ask for three types of adjustments. First, each seeks credit for improvements to Unit 651. Second, Clarke seeks reimbursement of all real-estate taxes and insurance premiums paid after the June 2009 conveyance. Third, the parties ask the Court to resolve various "rent" issues, with Clarke seeking payment for the three months Morgan withheld "rent," and Morgan asking the Court for an accounting of all of the "rent" Clarke received during sisters' joint ownership of Unit 651. The Court addresses each request in turn.

Improvements. Chapter 241, § 23 provides in part:

If the court in which partition proceedings are pending finds that one of the co-tenants has . . . made . . . permanent improvements on the common land, it may, if justice and equity so require, award such compensation as it deems proper for the value of such . . . improvements, not exceeding, however, the actual amount by which the market value of the common land has been increased thereby; and in awarding such compensation the court may deduct any benefit which the party claiming compensation has received from the common land.

Ms. Clarke seeks reimbursement for a refrigerator, a dishwasher, and a stove she purchased for Unit 651, as well as the costs of replacing Unit 651's roof. She conceded at trial, however, that she made these investments before Unit 651 became "common land." The same holds true for four items for which Ms. Morgan seeks reimbursement, the construction of a deck, the framing of the Unit's basement, the installation of two garbage disposals, and drainage improvements. (Morgan also sought reimbursement of the cost of (a) installing on oil tank at Unit 651 and (b) wallpapering the Unit. She provided no evidence concerning when she installed the tank, or at what cost. Similarly, she provided no evidence concerning when she repapered the Unit.) The Court thus DENIES Clarke and Morgan's requests for reimbursement of the costs of the foregoing items.

Ms. Morgan made two other capital improvements, however, after Unit 651 became common land: she paid $7,025 for installation of new windows, siding and other exterior improvements, and she paid $6,900 to replace the Unit's boiler. Ms. Clarke did not prove that these investments failed to increase Unit 651's value by the total of these payments, $13,925. The Court will thus reimburse Morgan $13,925 out of the Proceeds.

Real-estate taxes and property insurance allegedly paid by Ms. Clarke.

No provision in c. 241 deals explicitly with how taxes, mortgage debt service, and insurance should be accounted for [in partition proceedings]. Such costs, however, are incurred to preserve the common estate and 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.

Stylianopoulos v. Stylianopoulos, 17 Mass. App. Ct. 64 , 69-70 (1983). Clarke cites Stylianopoulos as authority for why she should be reimbursed out of the Proceeds for the taxes and insurance premiums she paid after June 26, 2009. What Clarke overlooks is that while she wrote the checks for these payments, she provided none of the funding (with the exception, perhaps, of certain expenses in the first quarter of 2019). Unit 651's "rent," rent that included owner Morgan's personal funds, financed the Unit's taxes and insurance premiums. With respect to taxes and insurance premiums, Clarke was, in Stylianopoulos's words, a "noncontributing tenant." She has made no case for why she should be reimbursed for expenses relating to the common estate that she didn't bear.

Rent. While both parties refer the Court to Stylianopoulos, 17 Mass. App. Ct. at 64-65, and its discussion of how rent issues may play out in partition proceedings, the parties overlook a key fact that distinguishes this case from Stylianopoulos: Ms. Clarke and Ms. Morgan had an agreement, at least through the end of 2018, concerning all of Unit 651's income and expense issues. The agreement was that Morgan would live in Unit 651, along with Ms. Scherer; Morgan would remit to Clarke $1,000 monthly (most of that coming from Scherer); Clarke would use the remittances to pay Unit 651's taxes and insurance premiums, and keep the excess; and Morgan would pay all other expenses of Unit 651. The parties agreed to that arrangement before Morgan became a joint owner, and adhered to that arrangement through the end of December 2018 notwithstanding Morgan becoming an owner.

Massachusetts common law allows joint tenants to make agreements among themselves regarding the treatment of income and expenses of jointly owned properties. See, for example, Young, 341 Mass. at 73-78; see also 48A C.J.S. Joint Tenancy, §27 (2014). Ms. Morgan offers no reason why the Court shouldn't enforce the parties' agreement (while it lasted) regarding Unit 651's income and expenses. She was aware that she had become a joint owner of Unit 651 within weeks of her sister's decision to make her a joint owner. She also knew, or should have known, that Unit 651's remittances were generating $6,000 of profit for Clarke annually. (Such a profit for Clarke wasn't outrageous under the circumstances: after all, Morgan was still on good terms with Clarke in 2009, and Morgan knew that Clarke was the original source of all of the money used to purchase the Unit. Why shouldn't Clarke make little profit?) In any event, Morgan stuck with the agreed arrangements and did nothing to end them until late 2018.

The Court thus will enforce the parties' agreement as to the income and expenses of Unit 651 through the end of 2018. At that point, Ms. Clarke breached the agreement by not paying Unit 651's first-quarter 2019 property taxes, and Ms. Morgan responded by suspending remittances of rent for the first three months of 2019. The Court will thus perform an accounting of income and expenses only for 2019, from the time the agreement terminated through the end of September 2019, ignoring the eleven days in October 2019 before Unit 651's sale. The elements of the accounting are as follows:

Unit 651's Net Income. Ms. Scherer's monthly rent was $825 between January and July 2019. (Ms. Morgan testified she stopped paying rent when Unit 651 went on the market in August 2019.) Unit 651 thus took in $5,775 of gross income during that period (ignoring, for the moment, Ms. Morgan's monthly contributions). Unit 651's common expenses were $1000 quarterly for real-estate taxes (or $3,000 for nine months) and $312.50 quarterly for property-insurance premiums (or $937.50 for eight months). Unit 651's net income between January and September 2019 was thus $1,837.50, or $918.75 per sister. Since Ms. Clarke was handling Unit 651's rent, taxes and insurance premiums, the Court will subtract Morgan's $918.75 profit from Clarke's share of the Proceeds.

Property Tax paid by Ms. Morgan. Morgan paid the first quarter 2019 real-estate taxes of $1,000. Since property tax is a common expense, Ms. Clarke must reimburse Morgan half of $1,000, or $500, for that tax payment. The Court will subtract $500 from Clarke's share of the Proceeds and pay it to Morgan.

Unnecessary "rent" by Ms. Morgan. In April 2019, Morgan resumed paying $175 monthly to Ms. Clarke, over and above Ms. Scherer's rent payments. At that point, the parties' 2000-2018 rental arrangements had ended, and Morgan was no longer obliged to pay her own "rent" for Unit 651. Clarke thus must refund to Morgan, out of Clarke's share of the Proceeds, four months of that rent, or $700.

Rent withheld by Ms. Morgan. Morgan withheld from Ms. Clarke three months of rent payments paid by Ms. Scherer, totaling $2,475. Morgan should have remitted Scherer's rent to Clarke so that she could pay the Unit's common real-estate tax and insurance expenses. As $2,475 exceeds the amounts Clarke owes to Morgan by $356.25 ($918.75 plus $500 plus $700 equals only $2,118.75), on balance, Morgan owes Clarke $356.25 from Morgan's share of the Proceeds.

Based on the accounting above, the Court will enter a judgment confirming the partition of Unit 651 in accordance with the parties' agreement to sell the Unit. The judgment also will direct the Recorder to pay Ms. Morgan $13,925 from the Proceeds (which total $267,918.66) for unreimbursed improvements to the Unit. The judgment will then direct the Recorder to split the remaining Proceeds ($267,918.66 minus $13,925 equals $253,993.66), and divide that between the parties ($253,993.66 divided by two equals $126,996.83), plus half of the accumulated interest each. The judgment will direct the Recorder to subtract $356.25 from Morgan's share of the Proceeds and pay that amount to Clarke. Thus, the judgment will direct the Recorder to pay to Morgan $13,925 plus $126,996.83 less $356.25 (equaling $140,565.58), plus half of the accumulated interest; and pay to Clarke $126,996.83 plus $356.25 (equaling $127,353.08), plus half of the accumulated interest. The Court will direct the Recorder not to disburse any of the Proceeds, however, until fourteen days after entry of judgment, in case either party wishes to appeal this Decision and apply for a stay of the judgment.

Judgment to enter accordingly.