by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
If you read this blog then you know that failed relationships often make for the most interesting cases. For example, if your would-be spouse calls off your wedding, then you are usually entitled to get the engagement ring back. But, if you cancel your wedding reception, you may not be entitled to a refund from the venue where it would have taken place. And, of course, if your ex-wife agreed to pay all "utilities" under a divorce settlement but fails to pay for water filtration services that remained in your name and you get sued by the water filtration company, your ex-wife will be required to reimburse you for those charges. Now, Burke v. Bernardini can be added to this list.
In Burke, plaintiff and defendant were involved in a "romantic relationship." (They had actually known each other for 25 years before they began dating.) While they were dating, plaintiff bought property on which he built a house where he and defendant lived together. He paid approximately $368,000 for the property and another $100,000 for improvements and additions. Both plaintiff and defendant contributed furnishings.
Before buying the property, the parties entered into an agreement that provided:
[Plaintiff] acknowledges and agrees that [defendant] has provided, and will continue to provide[,] companionship to him of an indefinite length. [Plaintiff] promises and represents that upon closing, the home shall be deeded and titled in the name of "[plaintiff] and [defendant], as joint tenants with the right of survivorship."
(As a side note, only in the hands of a lawyer does "'til death do us part" become "I agree to provide companionship of an indefinite length.") The agreement also provided that defendant would have no "financial obligations for the home, including, but not limited to, property taxes, homeowners association fees, and homeowners insurance."
Notwithstanding this agreement, the original deed to the property conveyed title only to plaintiff. So, after the closing, the parties entered into another agreement under which plaintiff agreed to modify the deed within 45 days to conform to the parties' original understanding. He did so, filing a new deed that conveyed the property to he and defendant, "as joint tenants with the right of survivorship, and not as community property nor tenants in common."
Less than two years later, plaintiff ended the relationship and moved out. He then sued defendant to compel her to convey her one-half interest in the home to him for free. He alleged that: (1) the transfer of title to defendant jointly was "for the purpose of giving defendant the security of a right of survivorship conditioned on the maintenance and continuance of the amicable relationship and companionship that had been promised for an indefinite length of time," and this condition was not fulfilled; and (2) that the parties entered into a joint venture to buy and maintain the property, which ended when they broke up. Defendant countersued for partition.
After discovery, both sides moved for summary judgment. The trial court granted defendant's motion and denied plaintiff's motion. Plaintiff appealed.
The Appellate Division affirmed the trial court's decision. In doing so, it relied on long-standing precedent, which provides: "It is the general rule that the acceptance of a deed for land is to be deemed prima facie full execution of an executory agreement to convey and that thenceforward the agreement becomes void and the rights of the parties are to be determined by the deed, not by the agreement . . . Covenants collateral to the deed are exceptions to this rule." In other words, whatever agreement existed prior to the recording of the deed was wiped out by the deed. Because the deed conveyed title to the parties as joint tenants with the right of survivorship, not as joint venturers, title was held by the parties as joint tenants with the right of survivorship. As the Appellate Division noted, "even if the parties had agreed to a joint venture, that agreement became void, and the deed, not the agreement, determined the parties' rights." Therefore, defendant was entitled to partition of the property (presumably by sale, not physical partition) and an equal distribution of the sale proceeds.
By resolving the case in this manner, the Appellate Division avoided having to determine whether a house, like an engagement ring, must be returned if it is given in anticipation of marriage — or, more accurately, in anticipation of "an amicable relationship and companionship for an indefinite length of time" — but this condition is not met.