Living Together in Indiana: Cohabitation Agreements
What to do if you are living with someone, the relationship ends and there is property to divide? With married people, the answer lies in the dissolution of marriage statutes. Without a written agreement, Indiana has nothing comparable for those unmarried persons living together. Indiana stopped recognizing common law marriages over forty years ago. Palimony does not exist in Indiana. Few will enter into a cohabitation agreement. However, case law does offer some protection for unmarried persons who have not entered into a cohabitation agreement.
The cases start with Bright v. Kuehl . Indiana's first case upholding a cohabitant's ability to sue the other for financial contributions made to the relationship. "As such, we determine that a party who cohabitates with another without subsequent marriage is entitled to relief upon a showing of an express contract or a viable equitable theory such as an implied contract or unjust enrichment." In Bright , the plaintiff lost his judgment on appeal. Since then the Bright decision has been upheld in Turner v. Freed , and Fowler v. Perry . Turner and Fowler share with Bright the same lack of a cohabitation agreement and the use of unjust enrichment as the basis of a claim. On closer examination, the cases share another characteristic: the women were successful in all three cases.
Pointing out that the women won these cases is superficial but who won these cases signifies the equities involved in these cases. Unjust enrichment and implied are equitable causes of action. That we are dealing with an equitable causes of action must be kept in mind when evaluating these cases.
For an implied contract case, the plaintiff must prove "...that the defendant impliedly or expressly requested the benefits conferred.." For unjust enrichment, "...a plaintiff must establish that a measurable benefit has been conferred on the defendant under such circumstances that the defendant's retention of the benefit without payment would be unjust."
A close look at the facts of Bright will show how the Indiana Court of Appeals examined the equities in these cases. The Indiana Court of Appeals described the relationship of parties in Bright as tumultuous.
Bright and Kuehl had a tumultuous relationship which culminated in a mutual protective order in which both parties were restrained from abusing and threatening each other. As a result, the couple separated and Bright could not enter Kuehl's residence to retrieve any of her belongings. Bright did subsequently return with a police officer and obtained two boxes of clothing. Kuehl retained all of the household items acquired by either party during the cohabitation including the Grand Prix which he continues to make payments.
After Bright retrieved her property, Kuehl filed his action. During the time that Bright and Kuehl lived together, they lived together and commingled their money and Kuehl retained the majority of the property the two acquired during their relationship. Kuehl's retaining the property balanced the benefit Bright received due to her having a smaller income than Kuehl. Thus died Kuehl's unjust enrichment claim.
Kuehl's implied contract claim failed because the evidence failed to show that Kuehl expected Bright to return any money to him. The record indicates that Bright regularly used Kuehl's checking account for various payments of expenses. The record does not indicate that Kuehl attempted to prevent Bright's actions until the relationship soured. Nor did Kuehl present evidence"...that Bright impliedly or expressly requested these benefits." Fowler lacks the melodrama of the Bright case. The boyfriend, Fowler, fathered a child and gave his money to his girlfriend, Perry, to take care of his bills while he attended college.
Between these came Turner v. Freed . In Turner, the parties lived together for eleven years, there was at least one child, and there was also a business relationship involving a newspaper route. While Turner was working at the Salt Shop, Freed remained at home caring for their son and maintaining the home. Freed also took care of Turner's daughter from a previous relationship. Freed did nearly all the cleaning, cooking, and the laundry. Until December 1998, she also continued to deliver papers. Out of the money Freed made, she would purchase some of the groceries and cleaning supplies and all the clothes for herself and their son. By June 1999, the parties separated. Freed filed a Petition for Palimony. .. The value of the assets accumulated during their cohabitation, including Turner's interest in the Salt Shop, totaled around $108,000. With Freed taking care of the children, Turner's business increased in value and he was able to purchase a home. "Although it is true that Freed benefitted from the resources and home provided her by Turner, we also
agree with the trial court that Turner substantially benefitted from the services Freed provided and that Turner would be unjustly enriched if Freed were awarded no part of the value of the assets Turner acquired in his name alone during their cohabitation." Turner did not address an implied contract.
With unjust enrichment, focus on the party who substantially benefits from the relationship. Neither Perry or Bright obtained substantial benefits from their relationships. As the Bright court highlighted, Kuehl retained the majority of the property acquired by the parties and that finding echoes throughout Turner . Fowler does lack the explicit statement of benefits of Bright and Turner , but the more subtle details of Fowler do show the benefits favored the boyfriend: no child support order and the furtherance of his education.
What then are we to make of cohabitation in Indiana? First, we could hope that our clients would enter into cohabitation agreements or talk to a lawyer before moving into together. "He that lives upon hope will die fasting." I think cohabitation agreements share with prenuptial agreements a certain psychological hurdle that people just do not want to try: romance does not want to acknowledge finance. Therefore, we need to be prepared for the breakup of a relationship which lacks the statutory guideposts provided by the dissolution of marriage statutes.
The cases start with Bright v. Kuehl . Indiana's first case upholding a cohabitant's ability to sue the other for financial contributions made to the relationship. "As such, we determine that a party who cohabitates with another without subsequent marriage is entitled to relief upon a showing of an express contract or a viable equitable theory such as an implied contract or unjust enrichment." In Bright , the plaintiff lost his judgment on appeal. Since then the Bright decision has been upheld in Turner v. Freed , and Fowler v. Perry . Turner and Fowler share with Bright the same lack of a cohabitation agreement and the use of unjust enrichment as the basis of a claim. On closer examination, the cases share another characteristic: the women were successful in all three cases.
Pointing out that the women won these cases is superficial but who won these cases signifies the equities involved in these cases. Unjust enrichment and implied are equitable causes of action. That we are dealing with an equitable causes of action must be kept in mind when evaluating these cases.
For an implied contract case, the plaintiff must prove "...that the defendant impliedly or expressly requested the benefits conferred.." For unjust enrichment, "...a plaintiff must establish that a measurable benefit has been conferred on the defendant under such circumstances that the defendant's retention of the benefit without payment would be unjust."
A close look at the facts of Bright will show how the Indiana Court of Appeals examined the equities in these cases. The Indiana Court of Appeals described the relationship of parties in Bright as tumultuous.
Bright and Kuehl had a tumultuous relationship which culminated in a mutual protective order in which both parties were restrained from abusing and threatening each other. As a result, the couple separated and Bright could not enter Kuehl's residence to retrieve any of her belongings. Bright did subsequently return with a police officer and obtained two boxes of clothing. Kuehl retained all of the household items acquired by either party during the cohabitation including the Grand Prix which he continues to make payments.
After Bright retrieved her property, Kuehl filed his action. During the time that Bright and Kuehl lived together, they lived together and commingled their money and Kuehl retained the majority of the property the two acquired during their relationship. Kuehl's retaining the property balanced the benefit Bright received due to her having a smaller income than Kuehl. Thus died Kuehl's unjust enrichment claim.
Kuehl's implied contract claim failed because the evidence failed to show that Kuehl expected Bright to return any money to him. The record indicates that Bright regularly used Kuehl's checking account for various payments of expenses. The record does not indicate that Kuehl attempted to prevent Bright's actions until the relationship soured. Nor did Kuehl present evidence"...that Bright impliedly or expressly requested these benefits." Fowler lacks the melodrama of the Bright case. The boyfriend, Fowler, fathered a child and gave his money to his girlfriend, Perry, to take care of his bills while he attended college.
Between these came Turner v. Freed . In Turner, the parties lived together for eleven years, there was at least one child, and there was also a business relationship involving a newspaper route. While Turner was working at the Salt Shop, Freed remained at home caring for their son and maintaining the home. Freed also took care of Turner's daughter from a previous relationship. Freed did nearly all the cleaning, cooking, and the laundry. Until December 1998, she also continued to deliver papers. Out of the money Freed made, she would purchase some of the groceries and cleaning supplies and all the clothes for herself and their son. By June 1999, the parties separated. Freed filed a Petition for Palimony. .. The value of the assets accumulated during their cohabitation, including Turner's interest in the Salt Shop, totaled around $108,000. With Freed taking care of the children, Turner's business increased in value and he was able to purchase a home. "Although it is true that Freed benefitted from the resources and home provided her by Turner, we also
agree with the trial court that Turner substantially benefitted from the services Freed provided and that Turner would be unjustly enriched if Freed were awarded no part of the value of the assets Turner acquired in his name alone during their cohabitation." Turner did not address an implied contract.
With unjust enrichment, focus on the party who substantially benefits from the relationship. Neither Perry or Bright obtained substantial benefits from their relationships. As the Bright court highlighted, Kuehl retained the majority of the property acquired by the parties and that finding echoes throughout Turner . Fowler does lack the explicit statement of benefits of Bright and Turner , but the more subtle details of Fowler do show the benefits favored the boyfriend: no child support order and the furtherance of his education.
What then are we to make of cohabitation in Indiana? First, we could hope that our clients would enter into cohabitation agreements or talk to a lawyer before moving into together. "He that lives upon hope will die fasting." I think cohabitation agreements share with prenuptial agreements a certain psychological hurdle that people just do not want to try: romance does not want to acknowledge finance. Therefore, we need to be prepared for the breakup of a relationship which lacks the statutory guideposts provided by the dissolution of marriage statutes.