Bonina v. Sheppard ( 2017 )

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us
16-P-771 Appeals Court
STEPHEN BONINA vs. JANE A. SHEPPARD.
No. 16-P-771.
Worcester. March 2, 2017. - June 1, 2017.
Present: Kafker, C.J., Massing, & Desmond, JJ.
Cohabitation, Nonmarital. Restitution. Damages,
Restitution. Unjust Enrichment.
Civil action commenced in the Superior Court Department on
July 22, 2011.
The case was heard by Gregg J. Pasquale, J.
Barry A. Bachrach for the defendant.
Scott G. Gowen for the plaintiff.
KAFKER, C.J. The issue presented in this case is whether a
substantial, uncompensated contribution by one unmarried
cohabitant to improve the home owned by the other is recoverable
in restitution. The plaintiff, Stephen Bonina, and the
defendant, Jane A. Sheppard, were involved in a long-term
nonmarital relationship. The plaintiff, a contractor, expended
significant funds and labor to improve the home in which the
2
couple lived for sixteen years, which was owned by the
defendant. When the relationship ended, the plaintiff brought
this action against the defendant claiming, inter alia, that she
had been unjustly enriched by his contributions to the home.
After a bench trial, a Superior Court judge awarded the
plaintiff $156,913.07 in restitution, which represented the
funds he expended to improve the home over sixteen years. The
defendant appeals, claiming that the trial judge erred by (1)
finding that she was unjustly enriched; and (2) calculating the
plaintiff's restitution based on his costs to improve the home,
rather than the increased value of the home with the
improvements. We affirm.
Background. We summarize the facts found by the trial
judge, supplemented by uncontroverted facts in the
record. Weber v. Community Teamwork, Inc., 434 Mass. 761, 769
(2001). The plaintiff and the defendant met on New Year's Eve,
1989, and began dating shortly thereafter. Three years later,
the parties became interested in purchasing a home in Bolton
that had been vacant for two years. The home was owned by
Concord Co-Operative Bank (bank). During negotiations with the
bank, the parties coauthored a letter declaring their serious
interest in the home, and explaining that the cost to bring the
home to livable condition was $43,500, based on estimations by
the plaintiff and another contractor. In May, 1993, the
3
defendant purchased the home for $131,500 in her name only,
becoming the sole obligor on the mortgage.
As it turned out, the entire home had to be gutted, and the
necessary repairs cost much more than anticipated. The parties
moved into the home in September, 1993. The plaintiff
thereafter paid half of the mortgage payments, taxes, and living
expenses during the cohabitation. He used various places in the
home as his office for his contracting business.
In 1994, the parties constructed an addition to the living
room. Between 1993 and 1998, the plaintiff spent $74,068.94 on
improvements and maintenance of the home, which included the
addition, as well as a new furnace, windows, a gas stove, and a
new basement floor. The plaintiff spent "countless hours"
performing the "overwhelming majority" of the work. The
defendant spent $35,544.17 on improvements and maintenance
during this period.
The parties were engaged on Christmas Eve, 1999. Around
this time, the parties extended the kitchen to make a better
passageway to a room that the plaintiff planned to use as his
office. While this work was being performed, the parties
decided to build a second floor above the office. From 1999 to
2004, the plaintiff spent approximately $98,352.02 on
improvements to the home, most of which went toward materials to
construct the addition and the second floor, such as roofing,
4
siding, flooring, and electrical and plumbing work. The
defendant spent $46,532.99.
In 2005, the plaintiff contributed approximately $17,967.32
for a new septic system. From 2006 to 2008, the plaintiff
contributed an additional $3,572.24 for repairs and maintenance.
The defendant's contributions during this time were minimal.
Shortly thereafter, the relationship deteriorated, and the
plaintiff moved out in February, 2009. By this time, the
plaintiff had contributed $93,744.94 towards the monthly
mortgage payments, which represented approximately one-half of
the payments due during the sixteen years that he lived in the
home. The plaintiff then brought this action seeking
restitution for his contributions to the home under an unjust
enrichment theory. 1 The trial judge found that the "majority" of
the plaintiff's costs reflected materials to construct the three
additions, including lumber, cement, insulation, piping, and
flooring, as well as other items that became permanent fixtures
of the home, including windows, doors, appliances, the septic
system, and the furnace. The judge deducted the plaintiff's
1
The plaintiff also brought claims for breach of fiduciary
duty under a partnership, conversion, fraud, breach of the
covenant of good faith and fair dealing, misrepresentation,
constructive trust, and other equitable relief. Specifically,
the plaintiff alleged that he and the defendant entered into a
partnership agreement to renovate and to resell the home. The
trial judge found against the plaintiff on each of these claims,
and he has not appealed those rulings.
5
costs for maintenance of the home, such as fence painting and
lawn mowing, as well as those related to "short-term benefits,"
such as extension cords, light bulbs, and log splitting; the
judge found that the plaintiff had received the benefit of those
items. After deducting those latter amounts, the judge awarded
the plaintiff $156,913.07 in restitution, which represented his
costs to purchase the materials and the fixtures to improve the
home.
Discussion. 1. Unmarried cohabitants and unjust
enrichment. "Cohabitation in Massachusetts does not create the
relationship of husband and wife in the absence of a formal
solemnization of marriage, . . . [and] the incidents of the
marital relationship [do not] attach to an arrangement of
cohabitation." Sutton v. Valois, 66 Mass. App. Ct. 258, 262
(2006), quoting from Collins v. Guggenheim, 417 Mass. 615, 617
(1994). See Wilcox v. Trautz, 427 Mass. 326, 332 (1998) (noting
"clear distinction . . . between the legal rights of married and
unmarried cohabitants"). Unmarried cohabitants, however, "may
lawfully contract concerning property, financial, and other
matters relevant to their relationship." Ibid. See Northrup
v. Brigham, 63 Mass. App. Ct. 362, 368 (2005); Sutton, supra.
Equitable relief is also available, including restitution for
unjust enrichment. See Santagate v. Tower, 64 Mass. App. Ct.
324, 329 (2005); Sutton, supra at 262-263. "We examine the
6
judge's imposition of equitable remedies under an abuse of
discretion standard." Cavadi v. DeYeso, 458 Mass. 615, 624
(2011) (citation omitted).
Unjust enrichment occurs when a party retains the property
of another "against the fundamental principles of justice or
equity and good conscience." Santagate, supra (citation
omitted). The plaintiff must establish "not only that the
defendant received a benefit, but also that such a benefit was
unjust." Metropolitan Life Ins. Co. v. Cotter, 464 Mass. 623,
644 (2013). Whether the benefit was unjust "turns on the
reasonable expectations of the parties." Ibid. (citation
omitted).
The defendant claims that the trial judge erred in
determining that she was unjustly enriched because the parties
were in a romantic relationship when the plaintiff made his
contributions to the home. We disagree. The parties' romantic
relationship does not prevent the plaintiff from recovering from
the defendant under an unjust enrichment theory. See Sutton, 66
Mass. App. Ct. at 263. In Massachusetts, there is no
presumption that a claimant's contributions during a romantic
relationship are gratuitous. See Northrup, 63 Mass. App. Ct. at
368 (declining to apply "gratuitous services presumption" to
services provided to former boy friend). The judge's factual
findings demonstrate that the substantial contributions made by
7
the plaintiff to improve the home were not meant to be gifts to
the defendant. The trial judge found, for example, that the
plaintiff "believed that [the parties] were to jointly purchase
the home, make improvements, increase its value, and eventually
buy a bigger home."
The Restatement (Third) of Restitution and Unjust
Enrichment § 28(1) (2011) specifically provides for a remedy in
these circumstances, stating, "If 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." Id. at comment c. Recovery is
allowed because the claimant would not have conferred the
benefit, "except in the expectation that the parties' subsequent
relationship would be something other than it proved to
be." Ibid.
In the present case, in accordance with § 28(1), the
plaintiff's contributions to improve the defendant's home were
substantial. The trial judge found that his compensable
contributions totaled $156,913.07, which allowed three additions
8
to be built and to remain permanent fixtures of the home. These
contributions were also uncompensated because the defendant did
not reimburse him and, although the plaintiff lived in the home
for sixteen years, he paid $93,744.94 toward the mortgage. The
judge found that the mortgage payments were "more than adequate
for [the plaintiff's] use and occupancy [of] the residence." As
such, the plaintiff could seek restitution for his contributions
to the defendant's home under an unjust enrichment theory.
2. Proper measure of restitution. The defendant next
claims that the trial judge erred by measuring the plaintiff's
restitution as the costs he incurred in improving the home,
rather than the increased value of the home with the
improvements. We disagree, and conclude that, in the particular
circumstances of this case, the judge did not abuse his
discretion in determining that the plaintiff's costs in
improving the home constituted a proper measure of unjust
enrichment and restitution.
We begin by recognizing that measuring restitution for
unjust enrichment poses special difficulties and, as such, trial
judges need "considerable discretion" to fashion appropriate
remedies. 2 Restatement (Second) of Contracts § 371 comment a
2
"It is a well settled principle that, in fashioning
appropriate relief, the issuance and scope of equitable relief
rests within the sound discretion of the judge . . . who may
9
(1981). See Dobbs, Law of Remedies § 4.1(4), at 566 (2d ed.
1993) ("The chief remedial problem of restitution is perhaps its
measurement"). "[R]esolution of these problems varies greatly
depending on the circumstances." Restatement (Second) of
Contracts § 371 comment a (1981). Thus, "[t]o the extent that
the benefit may reasonably be measured in different ways, the
choice is within the discretion of the court." Ibid. These
problems are particularly pronounced in the context of unmarried
cohabitants. The parties often have built a life together over
many years, and the trial judge must "untangl[e]" complicated
property interests that arose during the relationship.
Restatement (Third) of Restitution and Unjust Enrichment § 28
reporter's note a (2011).
That being said, we recognize that "[r]estitution cannot be
measured by the plaintiff's losses, only by the defendant's
gains." Dobbs, supra at § 4.5(4), at 651. Restitution is
distinct from damages, "which measures compensation for loss
rather than disgorgement of the defendant's gain." Id. at
§ 12.1(1), at 9. See Santagate, 64 Mass. App. Ct. at 336. The
plaintiff's costs to confer the benefit, however, may be
evidence of, and relevant to, determining the value of the
benefit received by the defendant. Restatement (Third) of
phrase the court's order so as to afford a full, complete
remedy." Johnson v. Martignetti, 374 Mass. 784, 794 (1978).
10
Restitution and Unjust Enrichment § 49 comment d (2011).
Indeed, § 49(3)(b) of the Restatement (Third) of Restitution and
Unjust Enrichment (2011) specifically lists "cost to the
claimant of conferring the benefit" as a possible measure of
restitution for unjust enrichment claims for nonreturnable
benefits. 3 The Restatement further provides, "Cases in which the
cost to the claimant is the only plausible measure of benefit
conferred are in fact very numerous. Obvious illustrations
include cases in which the claimant recovers out-of-pocket costs
in maintaining or repairing property for which the defendant is
solely or jointly responsible." Id. at reporter's note e. 4 The
Restatement explains, "[I]n many cases a reasonable way to value
the benefit conferred on the defendant is to value the services
and materials provided by the plaintiff. This is because the
cost of the services and materials provided is roughly
equivalent to the value of the benefit conferred, and the cost
. . . is susceptible to proof at trial, whereas the value
conferred is not." Ibid. See Dobbs, supra at § 13.2(2), at 520
3
The other possible measures of enrichment are "the value
of the benefit in advancing the purposes of the defendant," "the
market value of the benefit," and "a price the defendant has
expressed a willingness to pay." Restatement (Third) of
Restitution and Unjust Enrichment § 49(3) (2011).
4
See Restatement (Third) of Restitution and Unjust
Enrichment § 49 comment e (2011) ("When restitution is available
for goods or services having no established market price, the
cost of providing the benefit may furnish the best -- or the
only -- means of measuring the recipient's enrichment").
11
(benefits may be measured by "money paid by or on behalf of the
plaintiff"). 5
In the context of unmarried cohabitants, there are numerous
reasons why a plaintiff's actual costs may be a prudent and
reliable measure of the benefit conferred on a defendant. In
these relationships, the parties often have made substantial,
uncompensated contributions to property over many years without
a business-like or market-based approach to their financial
arrangements. Instead, the contributions reflect their romantic
relationship, shared expenses, and expectation of continuing to
live together as a couple. See Restatement (Third) of
Restitution and Unjust Enrichment § 28 comment c (2011). The
correlation of costs with benefits is especially valid where, as
here, the costs that the plaintiff incurred were for
5
See Peart v. District of Columbia Hous. Authy., 972 A.2d
810, 820 (D.C. 2009) ("[O]rdinarily measuring th[e] benefit by
the actual cost to the claimant will provide a reasonable
approximation of an appropriate award"); Bowden v. Grindle, 675
A.2d 968, 973 (Me. 1996) ("The cost of improvements, such as the
value of the work, labor, services, and materials furnished, is
evidence that may be considered in determining the value of the
benefit conferred"); Patrick V. Koepke Constr., Inc. v. Woodsage
Constr. Co., 844 S.W.2d 508, 516 (Mo. App. 1992) (labor and
materials used to improve property "not irrelevant" to
determining benefit received by defendant); Noel v. Cole, 98
Wash. 2d 375, 383 (1982) ("cost is some evidence of value").
Compare Nassr v. Commonwealth, 394 Mass. 767, 772 n.4 (1985)
(noting in hazardous waste cleanup case that "costs" are "not
the proper measure of damages under an unjust enrichment theory
of recovery" but, rather, that "the proper measure of recovery
for [unjust enrichment] is the reasonable value of the benefit
conferred").
12
construction materials and fixtures for the defendant's home.
In these circumstances, there is a direct dollar-for-dollar
correlation between the costs incurred by the plaintiff and the
benefit conferred on the defendant. Moreover, in the present
case, neither the plaintiff nor the defendant presented evidence
regarding other possible measures of unjust enrichment, such as
the increased value of the home resulting from the materials and
the services. As such, the trial judge had no other reliable,
measurable basis on which to calculate the award. 6
We further note that the benefit conferred on the defendant
might actually have been greater than the recovery that the
plaintiff sought based on his costs. As a contractor, the
plaintiff contributed significant skills, labor, and expertise
to the renovations, for which he did not charge the defendant.
The trial judge found that the plaintiff performed the "lion's
share" of the labor needed to improve the property, and spent
6
The defendant also claims that the judge undervalued her
own contributions to the home and the various benefits that the
plaintiff himself enjoyed from the home in crafting the award.
We disagree. The judge recognized that the defendant
contributed more financially to the initial renovation than the
plaintiff, credited her for other funds she expended, and noted
that she "offered minimal assistance" in terms of "physical
labor." Regardless, the defendant retained the home. The trial
judge also acknowledged that the plaintiff enjoyed various
benefits of his contributions while he lived in the home,
including having an office there. The judge noted that the
plaintiff's mortgage and tax payments were "more than adequate
for [his] use and occupancy [of] the residence" and, thus, did
not reduce the plaintiff's recovery on this basis.
13
"countless hours" doing the "overwhelming majority" of the work.
There was obvious value to these services, but the plaintiff did
not seek at trial to recover or to present evidence of the fair
market value of his services. See Dobbs, Law of Remedies
§ 12.20(2), at 461 (2d ed. 1993) (benefit can be measured by
"the market value of the labor and materials package -- what it
would cost the owner to purchase such services and materials in
the market"). 7 Rather, he only sought reimbursement for his
costs in purchasing the materials and the fixtures. The
defendant therefore undoubtedly received a substantial discount
in improving her home, which the trial judge aptly noted and
took into consideration in measuring her unjust enrichment. 8
We therefore hold that in this case, where the costs
incurred by the plaintiff directly relate to the benefit
7
See also Neibert v. Perdomo, 54 N.E.3d 1046, 1049 (Ind.
App. 2016) (boy friend who worked in construction presented
evidence of his "customary rates" and number of "work hours"
spent renovating girl friend's father's home and new home couple
planned to share, to support his unjust enrichment claim).
8
As such, the trial judge properly exercised his discretion
in the circumstances by not devaluing the plaintiff's
contributions based on depreciation of the improvements. No
such evidence was presented, and the judge's approach sensibly
weighed the equities. The judge determined that the plaintiff
should not "suffer a discount" of his contributions "given the
nature and extent of his other intangible and meaningful
contributions," including his labor, skills, and expertise as a
contractor, for which he received no recovery. In the absence
of reliable evidence of the amount of depreciation, it was well
within the judge's discretion to not reduce the award on that
basis.
14
conferred on the defendant, and neither party presented reliable
evidence of other possible measures of unjust enrichment, the
trial judge did not abuse his discretion in valuing the
plaintiff's restitution as his costs in improving the home. 9
"This was a sound weighing of the equities based on the specific
facts of this case." 10 Bakwin v. Mardirosian, 467 Mass. 631, 639
n.9 (2014).
9
See, e.g., Dixon v. Smith, 695 N.E.2d 284, 287 (Ohio App.
3d 1997) (affirming restitution based on amount of money spent
to improve boy friend's home during four-year cohabitation,
despite evidence at trial through appraisals of "increase in
value" of home due to improvements). See also Salzman v.
Bachrach, 996 P.2d 1263, 1269-1270 (Colo. 2000) (remanding for
consideration of architect's exact contributions when he
designed home to be shared with girl friend, spent almost
$170,000 on construction, and conveyed his interest to her);
Mason v. Rostad, 476 A.2d 662, 666 (D.C. 1984) (contractor that
renovated girl friend's home during four-year cohabitation
"entitled to recover the funds he expended, the reasonable value
of the work he performed and the services he rendered in
renovating and improving the . . . property"); Evans v. Wall,
542 So. 2d 1055, 1056 (Fla. App. 1989) (girl friend properly
reimbursed for "capital, materials, and labor" invested in boy
friend's property during five-year cohabitation); Neibert v.
Perdomo, 54 N.E.3d 1046, 1049 (Ind. App. 2016) (contractor
entitled to bring unjust enrichment claim against former girl
friend for "labor, equipment, and materials" he provided in
renovating her father's home and new home couple planned to live
in); Thibeault v. Brackett, 938 A.2d 27, 33 (Me. 2007) (although
trial judge calculated expenditures incorrectly, judge properly
based award on "total amount spent on improvements," when girl
friend made substantial contributions to improvement of boy
friend's home during six-year cohabitation).
10
The defendant also claims that the trial judge erred by
not barring or reducing the plaintiff's recovery based on his
unclean hands. The doctrine of unclean hands denies equitable
relief "to one tainted with the inequitableness or bad faith
relative to the matter in which [he] seeks relief." Murphy v.
15
Judgment affirmed.
Wachovia Bank of Del., N.A., 88 Mass. App. Ct. 9, 15 (2015)
(citation omitted). The judge's over-all factual findings
regarding the relationship, however, provide no support for such
a finding. Neither party behaved dishonorably. Rather, the
relationship did not work out as the parties expected. "We are
in no position to substitute our judgment for that of the judge
on credibility questions." Commonwealth v. Werner, 81 Mass.
App. Ct. 689, 698 (2012). In these circumstances, the trial
judge did not err by not barring or reducing the plaintiff's
recovery.