Watts v. Watts

Brief Fact Summary. This case involves a dispute between Sue Ann Evans Watt (Plaintiff) and James Watts (Defendant) over their interests in property. The circuit court dismissed Plaintiff’s amended complaint for failure to state a claim upon which relief can be granted. Plaintiff appealed.

Synopsis of Rule of Law. Public policy does not preclude an unmarried cohabitant from asserting a contract claim against the other party to the cohabitation so long as the claim exists independently of the sexual relationship and is supported by separate consideration.

Facts. This case involves a dispute between Plaintiff and Defendant over their respective interests in property accumulated during their nonmarital cohabitation relationship, which spanned twelve years and produced two children. Plaintiff and Defendant met in when she was nineteen years old and shortly thereafter Defendant persuaded Plaintiff to move in with him. The parties lived together holding themselves out to the public as husband and wife. Plaintiff assumed Defendant’s last name and she gave birth to two children who were also given Defendant’s last name. The parties filed joint tax returns and maintained joint bank accounts asserting that they were husband and wife. Defendant had a life insurance policy with Plaintiff has beneficiary and insured his wife on his health insurance policy. During the relationship Plaintiff contributed childcare and homemaking services and maintained their home. Plaintiff contributed personal property to the relationship that she owned prior to th
e relationship. The Plaintiff also worked part time at the Defendant’s office. Plaintiff asked the circuit court to order an accounting of the Defendant’s personal property and business assets accumulated between the duration of the parties’ cohabitation and to determine Plaintiff’s share of this property. The circuit court dismissed the amended complaint concluding that the statute authorizing a court to divide property does not apply to the division of property between unmarried persons.

Issue. Whether the complaining party has set forth any legally sufficient claim on the five legal theories asserted?

Held. Judgment affirmed in part and reversed in part.
The court agrees with the circuit court that the legislature did not intend the statute to apply to unmarried couple. However the court disagrees with the court’s conclusion that courts cannot or should not divide property between persons who have engaged in nonmarital cohabitation. Nonmarital cohabitation does not render every agreement between cohabiting parties illegal and does not automatically preclude one of the parties from seeking judicial relief. The court analyzes each of the five legal theories upon which the Plaintiff rests her claim.
The first of Plaintiff’s claims alleges that she is entitled under Wisconsin’s Family Code to an equitable division of property was rejected along with Plaintiff’s claim that Defendant should be estopped from asserting lack of legal marriage.
The third of Plaintiff’s claims alleged that she and Defendant had a contract to share equally the property accumulated during their relationship. In other words, the parties have a contract, which the Defendant breached. Parties have the freedom to contract. However, a contract will not be enforced if it is against public policy. Such a declaration that it is against public policy is made only after a careful balancing of the interest in enforcing a particular promise against policy against enforcement. The Defendant failed to show that enforcing an express or implied in fact contract between these parties would violate the Wisconsin Family Code. The Family Code does not preclude an unmarried cohabitant from asserting contract and property claims against the other party to the cohabitation. Pubic policy does not preclude an unmarried cohabitant from asserting a contract claim against the other party to the cohabitation so long as the claim exists independently of the sexual relatio
nship and is supported by separate consideration. Therefore, Plaintiff pleaded the facts necessary to state a claim.
The fourth claim alleges that the Defendant accepted and retained the benefit of services she provided knowing that she expected to share equally in the wealth accumulated during their relationship. An action for recovery based on unjust enrichment is grounded on the moral principle that one who has received a benefit has a duty to make restitution where retaining such a benefit would be unjust. Three elements must be proven for unjust enrichment: (1) benefit conferred on the defendant by plaintiff; (2) appreciation or knowledge by the defendant of the benefit; and (3) acceptance of the benefit by the defendant under circumstances making it inequitable for the defendant to retain the benefit. Plaintiff argues that she contributed both property and services to the relationship and that because of this the parties’ assets increased. She further alleges that Defendant knew that she expected to share in the property. Therefore, the facts alleged are sufficient to state a claim for recov
ery based on unjust enrichment.

Discussion. This case came to the court at the pleading stage of the case, before the trial.