557 P.2d 106 (Cal. 1976)
In October 1964, plaintiff and defendant entered into an oral agreement. While the parties lived together, they would combine their efforts and earnings. They would share equally any and all property accumulated as a result of their efforts, whether individual or combined.
They further agreed to hold themselves out to the general public as husband and wife. Plaintiff would render her services as a companion, homemaker, housekeeper, and cook to defendant. Shortly thereafter, plaintiff agreed to give up her lucrative career as an entertainer and singer. She did so to devote her full time to defendant as a companion, homemaker, housekeeper, and cook. In return, defendant agreed to provide for all of plaintiff's financial support and needs for the rest of her life.
The parties lived together from October 1964 through May 1970.1 During this period, as a result of their efforts and earnings, they acquired in defendant's name substantial real and personal property. This included motion picture rights worth over $1 million. In May 1970, defendant compelled plaintiff to leave his household. He continued to support plaintiff until November 1971 but thereafter refused to provide further support.2
Plaintiff brought this action asserting two causes of action.3 The first, for declaratory relief, asked the court to determine her contract and property rights. The second sought to impose a constructive trust upon one half of the property acquired during the course of the relationship.4 Defendant answered the complaint after an unsuccessful demurrer.5 Following extensive discovery and pretrial proceedings, the case came to trial.
When the case was called for trial, plaintiff sought leave to file an amended complaint. The trial court treated defendant's motion to dismiss as one for judgment on the pleadings. This was augmented by a stipulation that defendant's marriage to Betty Marvin did not terminate until the filing of a final decree of divorce in January 1967. The court granted the motion and entered judgment for defendant.6 Plaintiff moved to set aside the judgment. She asked leave to amend her complaint to allege that she and defendant reaffirmed their agreement after the divorce became final. The trial court denied the motion. Plaintiff appealed from the judgment.7
Whether a court may enforce an express or implied agreement between two unmarried persons to pool their earnings and to share equally in property accumulated during the period of their cohabitation?8
Agreements between unmarried persons to pool their earnings and to share equally in property accumulated during the period of their cohabitation are enforceable unless the agreement is explicitly founded upon the consideration of meretricious sexual services.9
Yes. The complaint alleges an oral agreement to pool earnings and share property equally along with homemaking services in exchange for lifetime support, with no explicit foundation in meretricious sexual services.10 The parties cohabited for over five years and accumulated over one million dollars in property titled in defendant's name.11 These facts state a valid cause of action for breach of express contract that the trial court should not have dismissed on the pleadings.12
A court may enforce such an express or implied agreement between unmarried cohabitants.13
Related opinions on this issue
Justice Mosk concurs in the judgment and in the opinion of the court.14 He writes separately only to emphasize that the rule we announce today applies only to agreements between unmarried persons who are competent to contract. It does not apply to agreements between persons who are married to others.
It does not apply to agreements that are explicitly founded upon the consideration of meretricious sexual services. This limitation ensures that the holding respects existing marital obligations and excludes contracts based on unlawful sexual services. Mosk's concurrence underscores the narrow scope of the new rule to prevent overbroad application to persons already bound by marriage or to arrangements resting on prohibited consideration.
Justice Sullivan concurs in the judgment and in the opinion of the court.15 He joins the majority without separate elaboration on the enforceability of agreements between unmarried cohabitants. By his concurrence, Justice Sullivan endorses the court's reexamination of prior precedent in light of changed social mores.
He supports the enforcement of express and implied agreements that are not founded on meretricious consideration. Sullivan's full concurrence affirms the majority's conclusion that such contracts are valid and should be enforced by the courts to protect the reasonable expectations of the parties to nonmarital relationships.
Justice Clark dissents from the judgment.16 He argues that the majority overrules a long line of California decisions and adopts a rule that will encourage unmarried persons to live together without benefit of marriage.17 He believes this is a step in the wrong direction.18
The rule of Trammel v. Vaughan and Vallera v. Vallera rests on sound public policy because the state has an interest in encouraging marriage.19 The majority's rule will discourage marriage and lead to more litigation between unmarried persons upon termination of their relationships.20
Whether the provisions of the Family Law Act govern the distribution of property acquired during a nonmarital relationship?21
The provisions of the Family Law Act do not govern the distribution of property acquired during a nonmarital relationship; such a relationship remains subject solely to judicial decision.22
No. The Family Law Act contains no language addressing property rights of nonmarital partners and its legislative history shows the Legislature never considered the subject.23 Prior to 1970 the rights of nonmarital partners had been fixed entirely by judicial decision.24 The Act therefore did not alter that body of law or require equal division of property accumulated in nonmarital relationships.25
The provisions of the Family Law Act do not govern the distribution of property acquired during a nonmarital relationship.26
Related opinions on this issue
Justice Clark would affirm the trial court judgment.27 He maintains that the majority's approach imposes economic obligations of lawful spouses on meretricious parties who may have rejected matrimony precisely to avoid those obligations.28 He further contends that equitable principles will reimpose unmanageable burdens on trial courts.29
Application of such principles necessitates examination of the conduct of the parties and violates the spirit of the Family Law Act designed to eliminate bitterness from the former fault system.30
Whether in the absence of an express contract the courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding?31
In the absence of an express contract, the courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding between the parties.32
Yes. Prior decisions had refused to recognize implied contracts or equitable remedies for nonmarital partners even though they enforced express contracts.33 The court holds that this inconsistency should end.34 Courts may now examine the parties' conduct to find an implied contract or other tacit understanding and may apply equitable remedies when the facts warrant.35
In the absence of an express contract the courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding.36
Whether the courts may employ the doctrine of quantum meruit or equitable remedies such as constructive or resulting trusts when warranted by the facts of a nonmarital relationship case?37
The courts may employ the doctrine of quantum meruit, or equitable remedies such as constructive or resulting trusts, when warranted by the facts of the case.38
Yes. When an express agreement is absent, courts may apply quantum meruit to recover the reasonable value of services rendered less support received, or may impose constructive or resulting trusts to protect the parties' expectations.39 These remedies supplement implied-contract analysis and are available when the facts of the particular case justify them.40
The courts may employ the doctrine of quantum meruit or equitable remedies such as constructive or resulting trusts when warranted by the facts of a nonmarital relationship case.41
Related opinions on this issue
Justice Clark warns that the majority's broad endorsement of equitable principles and quantum meruit fails to define the circumstances permitting recovery.42 It also fails to define limitations on recovery or whether the remedies are cumulative or exclusive.43 The general sweep of the majority opinion raises but fails to answer several questions about fairness and legislative intent.44
Conceivably a party may recover half the property on equitable principles, recover a bonus based on specific equitable considerations, and recover a second bonus in quantum meruit.45