Watts v. Watts

Brief Fact Summary. A couple, together for twelve years, terminated their relationship. The woman seeks to recover property she helped acquire during their relationship.

Synopsis of Rule of Law. Even if parties are not married and did not have a formal agreement as to property rights, property distribution can be obtained through contract and unjust enrichment claims.

Facts. Sue Ann Evan Watts (Plaintiff) and James Watts (Defendant) began living together in a marriage-like relationship. They held themselves out as husband and wife. Plaintiff assumed Defendant’s surname, and so did the two children they had together. Plaintiff was on Defendant’s insurance policy. Plaintiff provided childcare and homemaking services. Eventually, she worked part time at his office. After twelve years together, she moved from their home and ended their relationship. Defendant barred her from returning to work. Plaintiff asserts that her contributions increased the business and personal wealth of the couple. She asserts that they had a contract to share equally the property accumulated during their relationship and the Defendant breached it when he refused to share equally with her the wealth accumulated through their joint efforts.

Issue. When the relationship of an unmarried couple terminates and one party attempts to retain an unreasonable amount of property acquired through the efforts of both, can a claim of breach of contract and unjust enrichment be successfully brought?

Held. Yes.
Public policy does not prevent an unmarried cohabitant from asserting a contract claim against the other party in the cohabitation as long as the claim exists independently of the sexual relationship and is supported by separate consideration.
Claims for breach of an express or implied contract do not arise out of an agreement entered into by the parties. Recovery for unjust enrichment is grounded on the moral principal that one who has received a benefit has a duty to make restitution where retaining such a benefit would be unjust. This is often called a quasi contract.
An action for unjust enrichment has three parts: (1) a benefit conferred on the defendant by the 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.
Unmarried cohabitants may raise claims based upon unjust enrichment following the termination of their relationships when one of the party’s attempts to retain an unreasonable amount of the property acquired through the efforts of both.
Here, plaintiff alleges her contributions increased the assets of the company and that she was never compensated for her contributions. Defendant accepted her services knowing she expected to share the benefits. This is sufficient to state a claim for recovery based upon just enrichment.

Discussion. Allowing no relief to one party in an unmarried relationship effectively provided total relief to the other, by leaving that party with all the assets that were acquired by the efforts of both. That would be an unfair result, as this court notes.