Esteves v. Esteves

Brief Fact Summary.

Plaintiffs and Defendant bought a residence together, each obtaining one-half interest in the property. Defendant expended more labor onto the property, while Plaintiff expended a substantial amount of expenses to operate and maintain the land. In 1998, the parties sold the residence. Plaintiff brought suit to determine how the proceeds should be split.

Synopsis of Rule of Law.

Cotenant, who is in sole possession of the property, is required to allow an equivalent credit for contribution of the value of the sole occupancy for the costs of operation and maintenance costs even if a cotenant is not in possession of the property.

Facts.

Plaintiffs, Flora Esteves and Manuel, bought a house with their son, Defendant, Joao Esteves. Plaintiffs obtained a one-half interest in the residence, and Defendant obtained the other one-half interest in the home. All three individuals moved into the residence and lived there for approximately three to eighteen months. In this period, Defendant spent a substantial amount of labor to make repairs and improvements to the property. Thereafter, Defendant moved out, however, Plaintiffs continued to live on the premises for eighteen years. In 1998, Plaintiffs and Defendant sold the residence. Plaintiffs initiated this action to determine how the proceeds should be divided. The trial court held that Plaintiffs paid 61,892 for operation and maintenance expenses, thus, mandating that Defendant pay half of that amount.  Also, the trial court found that Defendant spent more labor on the property, compared to Plaintiffs. The value of the excess labor was $2,000. The trial court allowed Defendant to obtain a $2,000 credit for the operating and maintenance expenses from Plaintiffs. Overall, the trial court held that Defendant did not have a right to demand credit for the rental value of Plaintiff’s sole occupancy of the residence.

Issue.

Whether cotenant, who is in sole possession of the property, is required to allow an equivalent credit for contribution of the value of the sole occupancy for the costs of operation and maintenance costs when a cotenant is not in possession of the property.

Held.

Yes, cotenant, who is in sole possession of the property, is required to allow an equivalent credit for contribution of the value of the sole occupancy for the costs of operation and maintenance costs even if a cotenant is not in possession of the property.

Discussion.

When determining how to distribute proceeds of a cotenancy, the court must apply two general rules. Each cotenant is required to pay a pro rata share of both the operating and maintenance costs of the residence. In the even that one cotenant pays a smaller pro rata share than the other cotenant, then the former cotenant must reimburse the latter cotenant. Also, the cotenant that is not in possession of the property does not have a right to receive rent from the tenant in possession, even if only one tenant is enjoying the right of occupancy in the property. All tenants have a right to occupy the premises free of charge. Likewise, when a cotenant that is in sole possession of the property demands a contribution cost for the value of his sole occupancy, the cotenant, not in possession of the property, has the burden of establishing the actual rental value of the property. In this case, the trial court properly determined that Plaintiffs were entitled to reimbursement for their expenses. Nevertheless, because the trial court required Defendant to contribute, the trial court must also provide Defendant credit for Plaintiffs eighteen years of sole occupancy. Therefore, the lower court’s judgment is reversed and remanded, and Defendant is required to prove the actual rental value of the home.