Ex-Boyfriend Denied $25,000 Windfall
The North Carolina Court of Appeals held today in Cury v. Mitchell, (COA09-238, filed February 16, 2010) that a woman may sue her ex-boyfriend for a $25,000 contribution she made toward the purchase of a house titled in his name. In reversing the trial court’s dismissal of the lawsuit, the appellate court held that the woman alleged two valid equitable claims – constructive trust and resulting trust.
A constructive trust is a duty or relationship imposed by courts of equity to prevent the unjust enrichment of the holder of title to property which the holder acquired through fraud or some other circumstance making it inequitable for him to retain it against the claim of the beneficiary of the constructive trust. The Court of Appeals held that proof of fraud is not required to support a claim of constructive trust where the title holder owed some duty to the one equitably entitled. The ex-boyfriend had a fiduciary duty to the woman at the time he purchased the house because she was pregnant with his child and they were in a “trusting” relationship.
A resulting trust arises “when a person becomes invested with the title to real property under circumstances which in equity obligate him to hold the title and to exercise his ownership for the benefit of another.”
It is reassuring to see that North Carolina appellate courts are not going to countenance a sleazy ex-boyfriend realizing a $25,000 windfall at the expense of a formerly love-struck girlfriend. Even so, better practice dictates that girlfriends (and boyfriends) require that their names be included on the title before contributing $25,000 toward the purchase of a house.
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