Court Opinion

ID: 9919399
Source: CourtListenerOpinion
Date Created: 2024-01-18 15:05:21.190625+00
Date Added: 2024-06-11T08:06:10.708854
License: Public Domain

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

                       COMMONWEALTH OF MASSACHUSETTS

                                 APPEALS COURT

                                                  23-P-467

                              EDWARD J. O'ROURKE

                                       vs.

                                  KARIN GALIL.

               MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

       In 2002, during the early years of a sixteen-year committed

 relationship, the plaintiff, Edward J. O'Rourke, and the

 defendant, Karin Galil, together purchased a home in Winchester

 (the property) and held title initially as tenants in common,

 and later as joint tenants.1        In June 2012, O'Rourke transferred

 his interest to Galil to facilitate refinancing the mortgage on

 the property with the joint understanding that his interest in

 the property would be deeded back to him after completion of the

 transaction.     Although the parties continued to live together at

 the property for an additional five years, Galil never executed

 a deed to revive O'Rourke's interest, and after the relationship

 ended in 2017, O'Rourke brought this action seeking a

 1 The relationship produced one daughter.            The parties never
 married.
constructive trust on the basis of breach of the implied

covenant of good faith and fair dealing,2 unjust enrichment,

promissory estoppel, breach of fiduciary duty, and

misrepresentation.   He also sought a declaratory judgment that

the parties "share title of the Winchester Property jointly."3

After a trial, a judge of the Probate and Family Court entered

judgment declaring that Galil holds the Winchester property in a

constructive trust for the benefit of O'Rourke based on unjust

enrichment and breach of fiduciary duty, and ordered her to

convey the property to herself and O'Rourke as tenants in

common.   Galil appeals from the judgment;4 because we agree that

Galil holds the property in a constructive trust on the basis of

unjust enrichment, we affirm with a modification.

     Background.   We summarize the facts as found by the judge,

reserving some for discussion of the issues.   The history of the

purchase of the property is undisputed; the parties purchased

2 The implied covenant of good faith and fair dealing count was
dismissed at trial and no argument has been made on appeal as to
that count.
3 Galil filed an answer containing affirmative defenses of, among

other things, the Statute of Frauds, the statute of limitations,
and accord and satisfaction. Galil did not file a counterclaim.
4 To the extent Galil also noticed an appeal from the order

denying her motion for relief from judgment, she has not raised
any argument addressing that order; accordingly, we deem any
such argument waived and we need not further address the matter.
Mass. R. A. P. 16 (a) (9) (A), as appearing in 481 Mass. 1628
(2019) ("The appellate court need not pass upon questions or
issues not argued in the brief").

                                 2
the property in 2002 with O'Rourke contributing $312,000 towards

the down payment, Galil $125,000, and together taking out a loan

in the amount of $550,000.   The judge found that between 2002

and 2012, O'Rourke paid the loan payments, taxes, insurance, and

utilities; Galil paid certain other expenses and periodically

reimbursed O'Rourke for portions of his payments.   The judge

specifically found that O'Rourke's payments were not intended to

create a greater ownership interest in the property but instead

that the parties essentially divided up their living expenses,

with both contributing to the maintenance, repair, and

improvements to the property.

    The parties refinanced their loan on several occasions.      In

May and June of 2012, Galil initiated a refinance and worked

with a mortgage broker to take advantage of lower rates.

Because O'Rourke had not filed his 2010 or 2011 tax returns, the

refinancing could not proceed.   In order to facilitate the

refinancing, O'Rourke agreed to transfer his interest in the

property to Galil "subject to [Galil's] promise to reconvey the

property to him after the refinance was complete.   [O'Rourke]

trusted [Galil] to reconvey the property to him."   The judge

found that O'Rourke "did not intend to convey his interest in

the property to [Galil] permanently for no consideration."

    Galil testified that her original plan was to reconvey in

August of 2012, but that when O'Rourke refused to pay a share of

                                 3
the refinanced loan, she told him she would reconvey when he

renewed his contributions.     The judge found that Galil refused

to reconvey the property to O'Rourke because O'Rourke stopped

paying the loan installments.     Galil then paid the approximately

$4,505 monthly payment on the loan, taxes, and insurance; she

also stopped making her usual $5,000 per month payment to

O'Rourke for other expenses.     Thus, as the judge found, "their

financial arrangement remained largely the same."5

     Galil testified that she spent $577,657 for a kitchen

renovation and other repairs, though she has filed suit against

the contractor seeking damages for errors.     O'Rourke testified

that an earlier estimate for the kitchen renovation had been

$230,000 and argues that, at most, the evidence supports Galil's

expenditures of $304,046.    Neither party presented evidence of

how much the kitchen renovation increased the fair market value

of the property.   O'Rourke and Galil offered appraisers'

opinions of the property's fair market value at the fall of

2019; O'Rourke's appraisal was $1,600,000 in November 2019, with

Galil's at $1,450,000 in October 2019.    The judge took judicial

5 Galil submitted several exhibits purportedly showing that she
overpaid for joint expenses between 2006 and 2012 by some
$370,605. Leaving aside any statute of limitations issues, the
judge found, to the contrary, that Galil had not contributed
disproportionately.

                                   4
notice that the fair market value likely had increased by the

time of trial.

    Discussion.   "[U]nmarried cohabitants may lawfully contract

concerning property, financial, and other matters relevant to

their relationship."   Wilcox v. Trautz, 427 Mass. 326, 332

(1998).   However, they are not entitled to equitable

distribution of property; separate support and alimony; or the

right to sue for loss of consortium.   Id. (and cases cited).

See Sutton v. Valois, 66 Mass. App. Ct. 258 (2006).     "In

Massachusetts, there is no presumption that a claimant's

contributions during a romantic relationship are gratuitous."

Bonina v. Sheppard, 91 Mass. App. Ct. 622, 625 (2017).

    "A constructive trust is a flexible tool of equity designed

to prevent unjust enrichment resulting from fraud, a violation

of a fiduciary duty or confidential relationship, mistake, or

'other circumstances' in which a recipient's acquisition of

legal title to property amounts to unjust enrichment."        Maffei

v. Roman Catholic Archbishop of Boston, 449 Mass. 235, 246

(2007), cert. denied, 552 U.S. 1099 (2008), quoting Fortin v.

Roman Catholic Bishop of Worcester, 416 Mass. 781, 789, cert.

denied, 511 U.S. 1142 (1994).   "We examine the judge's

imposition of equitable remedies under an abuse of discretion

standard."   Bonina, 91 Mass. App. Ct. at 625, quoting Cavadi v.

DeYeso, 458 Mass. 615, 624 (2011).

                                 5
    1.   Unjust Enrichment.    "Unjust enrichment occurs when a

party retains the property of another against the fundamental

principles of justice or equity and good conscience" (quotation

omitted).    Bonina, 91 Mass. App. Ct. at 625.    "Whether the

benefit was unjust 'turns on the reasonable expectations of the

parties.'"   Id., quoting Metropolitan Life Ins. Co. v. Cotter,

464 Mass. 623, 644 (2013).    "The fundamental question . . . is

whether [Galil] . . . received [a property interest that] in

equity and good conscience belongs to [O'Rourke]."       Sutton, 66

Mass. App. Ct. at 265, quoting National Shawmut Bank of Boston

v. Fidelity Mut. Life Ins. Co., 318 Mass. 142, 150 (1945).

    Galil claims she was not unjustly enriched because she has

paid more than her fair share of expenses.       The judge found

that:

    "[Galil] argued in her proposed findings that she was not
    unjustly enriched by retaining [the property] because she
    contributed disproportionately to the parties' living
    expenses. The Court does not credit this argument. The
    evidence demonstrated that during their relationship, both
    parties contributed to the expenses for [the property] and
    for their other living expenses. They came to an agreement
    on how to share their joint expenses and re-negotiated that
    agreement over time. There was no credible evidence that
    the way they divided their expenses was intended to result
    in either party having a greater ownership interest in [the
    property]. Nor does this Court find that [Galil]
    contributed disproportionately to the parties' living
    expenses."

The judge found in addition that the parties did not intend that

O'Rourke's transfer of his interest in the property to Galil was

                                  6
intended to be a gift.   His contribution to the downpayment

exceeded Galil's by $187,000; he paid the monthly loan

installments, insurance, and taxes for ten years; he continued

thereafter to make payments to maintain the property and cover

the utilities.

    While an oral promise to reconvey may be unenforceable

under the Statute of Frauds, an "obligation to hold [the

property] in trust as implied from the entire course of the

couple's conduct" is enforceable.    Citizens Bank of Mass. v.

Coleman, 83 Mass. App. Ct. 609, 617-618 (2013).      See Abalan v.

Abalan, 329 Mass. 182, 183-184 (1952).   Moreover,

    "'[i]f two persons have formerly lived together in a
    relationship resembling marriage, and if one of them owns a
    specific asset to which the other has made substantial,
    uncompensated contributions in the form of property or
    services, the person making such contributions has a claim
    in restitution against the owner as necessary to prevent
    unjust enrichment upon the dissolution of the
    relationship.' Unjust enrichment in this context is based
    on the 'claimant's frustrated expectations.'"

Bonina, 91 Mass. App. Ct. at 625, quoting Restatement (Third) of

Restitution and Unjust Enrichment § 28(1) & comment c (2011).

Restitution can include the equitable remedy of reconveyance.

Cf. Bakwin v. Mardirosian, 467 Mass. 631, 639 (2014) (ordering

equitable remedy of reconveyance); Stewart v. Bass River Sav.

Bank, 3 Mass. App. Ct. 574, 578-579 (1975), quoting Lonergan v.

Highland Trust Co., 287 Mass. 550, 559 (1934) ("order of

reconveyance was within the judge's equitable power as 'equity

                                 7
regards that as done which ought to have been done'").     We

discern no error in these circumstances in the judge's

conclusion that Galil was unjustly enriched when she took title

to O'Rourke's interest in the property understanding her

obligation to reconvey it and subsequently refused to reconvey.6

     2.    Statute of limitations and laches.   Galil argues that

O'Rourke's claim to an ownership interest in the property is

barred by the three-year statute of limitations, claiming that

O'Rourke was aware in 2012 that she would not reconvey the

property and that the statute of limitations therefore expired

in 2015.    The judge rejected that argument, reasoning that

O'Rourke did not learn until 2018 that Galil would not reconvey

the property to him and that he commenced this case promptly

thereafter.    We discern no error.

     It is undisputed that, as the judge found, the transfer of

O'Rourke's interest to Galil in 2012 was solely for the purpose

of facilitating the refinancing to "take advantage of lower

interest rates."    Galil admits that it was her intention, when

she took title to O'Rourke's interest in the property, to

reconvey it to him.    The judge credited O'Rourke's testimony

6 Because of the result we reach on the issue of unjust
enrichment, we need not consider whether O'Rourke was also
entitled to a constructive trust based on his additional breach
of fiduciary duty, promissory estoppel, or misrepresentation
claims.

                                  8
that when he asked when she would reconvey the property, Galil

told him that the bank would not allow it and that the parties

agreed it would happen when they refinanced again.   Although

Galil denied agreeing to reconvey when they refinanced, the

judge credited O'Rourke's testimony on this issue.   "In a bench

trial credibility is 'quintessentially the domain of the trial

judge [so that his] assessment is close to immune from reversal

on appeal except on the most compelling of showings.'"

Prenaveau v. Prenaveau, 81 Mass. App. Ct. 479, 496 (2012),

quoting Johnston v. Johnston, 38 Mass. App. Ct. 531, 536 (1995).

    Galil contends that even if she had promised to reconvey

when they refinanced, O'Rourke was aware that she again

refinanced in December of 2012, that she did not reconvey to him

at that time, and, thus, that O'Rourke's claim accrued and the

limitations period began to run by at least December 2012.

Galil points to no e-mail or other evidence, however, that

O'Rourke was aware of the December 2012 refinance.   Moreover,

the judge did not credit Galil's testimony on this issue, but

instead credited O'Rourke's testimony that he was unaware of

that refinancing until 2018.   Again, that credibility

determination was for the trial judge.   Galil has not shown that

the judge's credibility determination was clearly erroneous.

    Moreover, we note that Galil, herself, testified that she

told O'Rourke that she would reconvey if O'Rourke renewed his

                                 9
loan payments.     This was not an absolute and unconditional

repudiation.     See Prendergast v. Sexton, 282 Mass. 21, 24-25

(1933) (refusal to reconvey unless plaintiff paid alleged debt

was not absolute and unconditional repudiation of promise to

reconvey).     Repudiation of a trust "does not occur if the

trustee instead of flatly rejecting a demand or request . . .

gives some apparently good or plausible reason for [her]

noncompliance, or promises future compliance . . . [which] may

well be regarded as being more nearly a recognition of the trust

than a repudiation thereof" (quotation omitted).     Lattuca v.

Robsham, 442 Mass. 205, 214 (2004).    The judge essentially found

that a definitive repudiation did not occur until shortly after

November 2017; O'Rourke commenced this action in April 2018.

    Finally, Galil contends that over the years she took the

position in discussion with O'Rourke that she owned the property

and he had lost his equity in it due to the disparity of their

contributions to joint expenses, and those assertions should

have started the clock.    However, we cannot conclude that this

wrongful legal conclusion constituted a clear repudiation of her

status as trustee of O'Rourke's interest in the property.       It

appears that these statements were made in 2016 and 2017 during

the renovation of the kitchen -- well within the three-year

statute of limitations.     Moreover, to the extent they occurred

more than three years prior to this action, the parties

                                  10
continued to live together in the property, shared expenses, and

the judge found that O'Rourke made contributions to the

maintenance of the property while carrying the costs of a second

property the parties' owned, and he remained as an additional

insured on the homeowners' insurance policy.   O'Rourke was not

obligated to commence an action based on Galil's claims that his

equity had disappeared due to disparate contributions; it was an

incorrect statement of law, and her self-help remedy is

unsupported in the law.

    Galil also argues that laches bars O'Rourke's claim because

his failure to pursue his claim sooner caused her to expend

substantial sums in renovating the kitchen and other areas of

the home, which she would not have done if she did not believe

she owned one hundred percent interest in the property.   For

many of the same reasons, Galil's laches argument is unavailing.

O'Rourke commenced this action within a year of learning that

Galil had definitively repudiated her obligation to reconvey.

The facts indicate that Galil's unilateral legal conclusion that

O'Rourke no longer was entitled to have his interest in the

property reconveyed to him notwithstanding his many

contributions to the acquisition and maintenance of the

property -- rather than any conduct on O'Rourke's part -- is

what caused Galil to make expenditures on property she held

partially in trust for O'Rourke.

                               11
    3.   Breach of contract.     Galil next argues that O'Rourke's

refusal to make financial contributions toward the property

constituted a material breach of their general contract to share

expenses equally and justified her retention of the property.

She did not bring a breach of contract counterclaim.     Moreover,

in rejecting this claim, the judge noted that Galil's relative

contribution did not change because as she began making monthly

loan payments (of less than $5,000) she also stopped making

monthly expenses payments to O'Rourke (previously in the amount

of $5,000).

    Nothing in the record suggests that either party understood

that when O'Rourke transferred his interest in the property to

Galil, her obligation to reconvey was conditioned on equity in

their joint contributions or any obligation of O'Rourke to

compensate Galil.     Galil cites no authority for the proposition

that she may unilaterally change her position as trustee of

O'Rourke's interest in the property because she believed, going

forward, that she would bear a greater portion of their shared

expenses.     Her claim that "[a]s in a foreclosure action, Galil

had the right to terminate O'Rourke's ownership interest after

he defaulted on his mortgage obligation" is unsupported by

citation to legal authority.

    4.   Mortgage and improvements.     We note that the judgment

does not mention the mortgage.     All of the judge's findings

                                  12
indicate that the parties agreed to refinance the mortgage and

implicitly agreed that their interests would be subject to the

mortgage.    Equity requires in these circumstances that

O'Rourke's interest, like Galil's, be subject to the outstanding

mortgage.    We, therefore, modify the judgment to reflect that

the transfer to O'Rourke of his fifty percent interest in the

property is subject to the outstanding mortgage; in all other

regards, it is affirmed.

     Further, we are not unsympathetic to Galil's claims that

she made considerable improvements to the property based on her

incorrect belief that she owned the entire fee.    Should the

parties seek to partition the property, it will be open to Galil

to show that the improvements she paid for have enhanced the

value of the property and to seek reimbursement upon a sale in

partition.    See Lodigiani v. Paré, 103 Mass. App. Ct. 140, 146

(2023).

     To the extent we have not specifically addressed Galil's

remaining arguments, they "have not been overlooked.       We find

nothing in them that requires discussion."    Department of

Revenue v. Ryan R., 62 Mass. App. Ct. 380, 389 (2004) (quotation

omitted).7   The judgment shall be modified to specify that the

7 O'Rourke's motion and briefing request for an award of counsel
fees pursuant to G. L. c. 231, § 6F, and G. L. c. 211A, § 15, is
denied. Galil's request for attorney's fees is also denied.

                                 13
transfer to O'Rourke of his undivided fifty percent interest in

the property, like Galil's undivided fifty percent interest,

remains subject to the outstanding mortgage.    As so modified the

judgment is affirmed.    The order denying Galil's motion for

relief from judgment is affirmed.

                                      So ordered.

                                      By the Court (Meade, Singh &
                                        Smyth, JJ.8),

                                      Assistant Clerk

Entered:    January 18, 2024.

8   The panelists are listed in order of seniority.

                                 14