Appeal by defendant from a judgment entered 26 September 2000
by Judge V. Bradford Long in Moore County District Court. Heard in
the Court of Appeals 25 March 2002.
Robbins, May, & Rich, L.L.P., by P. Wayne Robbins, for the
plaintiff-appellee.
Rich Costanza, for the defendant-appellant.
HUDSON, Judge.
Defendant appeals a judgment which: (1) orders that a
resulting trust in favor of the plaintiff be issued upon
defendant's interest in real property held by the parties; (2)
awards damages against her for fraud; and (3) denies her counter-
claim for unjust enrichment. We affirm.
The evidence presented at trial tended to show the following:
prior to the lawsuit, the parties had been in a romantic
relationship for approximately six years, from 1993 to 1999. They
lived together during the relationship, moving from state to state
to meet the demands of plaintiff's employment. In October 1997,
the parties moved to North Carolina. Throughout the course of the
relationship, plaintiff remained steadily employed, first with
Meisner Marine Construction and then with the Army Corps ofEngineers. Defendant held jobs sporadically, if at all. The
parties held a joint bank account into which plaintiff deposited
her salary.
Plaintiff testified that during the parties' relationship, the
defendant handled all of their finances. In 1995, plaintiff gave
defendant an unlimited power of attorney so that the defendant
would be able to handle arrangements for renting plaintiff's house
in Jacksonville, Florida. At some point, plaintiff also granted a
half interest in the house in Florida to defendant. Defendant
applied for credit cards and told plaintiff that the cards were
joint accounts. Plaintiff later found that defendant had not
listed herself as jointly liable for payment, but that defendant
did list herself as authorized to use the accounts. Defendant
simply signed plaintiff's name on the credit card, rather than
applying as attorney-in-fact.
In the summer of 1998, the parties decided to purchase a house
in Whispering Pines, North Carolina. At defendant's suggestion,
plaintiff agreed to purchase the house solely in plaintiff's name,
so that plaintiff's employer would reimburse her for closing costs.
At the closing, which was arranged by defendant, plaintiff simply
signed the papers but did not read them. Plaintiff did not realize
until later that, contrary to her agreement with defendant, the
deed to the house was issued in both of their names. The deed of
trust to the mortgage, however, carried only plaintiff's name,
making her solely liable for payments on the house. The plaintiff
funded all of the down payment with cash gifts from her family, andby selling stock that she inherited from her family. Defendant did
not contribute to the down payment or closing costs.
By March of 1999, plaintiff and defendant were having
difficulties in their relationship. At around that time, plaintiff
discovered that both names were on the deed to the house.
Plaintiff moved out for a time, then moved back in when defendant
promised her that she was leaving. When defendant did not leave,
plaintiff moved out again on 24 April 1999.
On 22 July 1999, plaintiff filed this action alleging in her
complaint that the deed to the house had been issued in both
parties' names by mistake, that defendant had obtained credit cards
and incurred numerous charges on them using plaintiff's name
without permission, and requesting that the court reform the deed
and award her damages for the unauthorized charges. On 27
September 1999, the defendant answered, denying the allegations of
plaintiff's complaint, raising various affirmative defenses and
asserting a counterclaim against plaintiff for unjust enrichment,
alleging that if plaintiff were given sole ownership of the house,
she would be unjustly enriched by defendant's contributions and
improvements to the property. The court heard the case without a
jury in May 2000, and on 14 August 2000, plaintiff moved to amend
her complaint to request the remedy of a resulting trust. On 25
September 2000, the Honorable V. Bradford Long entered a judgment
granting plaintiff a resulting trust on defendant's interest in the
property, granting plaintiff damages for fraud and denying
defendant's counterclaim for unjust enrichment. Defendant appeals. Defendant argues that the trial court erred in finding that
the plaintiff was entitled to a resulting trust when the plaintiff
did not specifically request this remedy in her original complaint.
“A resulting trust arises 'when a person becomes invested with the
title to real property under circumstances which in equity obligate
him to hold the title and to exercise his ownership for the benefit
of another . . ..'” Mims v. Mims, 305 N.C. 41, 46, 286 S.E.2d 779,
783 (1982) (quoting Teachey v. Gurley, 214 N.C. 288, 292, 199 S.E.
83, 86-87 (1938)). For example, if one person provides the
consideration for a purchase of land, but title to the land is
taken in the name of another, a resulting trust arises in favor of
the former. See id. “In such a situation . . . a resulting trust
commensurate with his interest arises in favor of the one
furnishing the consideration.” Cline v. Cline, 297 N.C. 336, 344,
255 S.E.2d 399, 404-05 (1979). Here, the trial court found that
the plaintiff furnished the down payment on the home, was solely
liable for and made all the payments on the mortgage, but that the
deed to the home named plaintiff and defendant as owners. The
court then “concluded as a matter of law that the Defendant
obtained title to the real property set out above under
circumstances which obligate the Court inequity [sic] to order that
a resulting trust will be issued over the title of the property in
favor of the plaintiff.”
Defendant argues that the court erred in granting a resulting
trust because plaintiff did not specifically request this remedy in
her complaint. Plaintiff instead requested “[t]hat the Deed to theproperty in question be reformed removing the name of the Defendant
from the title and the Defendant be ordered to vacate the
premises.” Plaintiff alleged in her complaint that the deed had
been placed in both names “by mistake.” Plaintiff moved to amend
her complaint to conform to the evidence, and to add a specific
prayer for a resulting trust pursuant to Rule 15(b) of the North
Carolina Rules of Civil Procedure. Rule 15(b) provides in
pertinent part:
When issues not raised by the pleadings are
tried by the express or implied consent of the
parties, they shall be treated in all respects
as if they had been raised in the pleadings.
Such amendment of the pleadings as may be
necessary to cause them to conform to the
evidence and to raise these issues may be made
upon motion of any party at any time, either
before or after judgment, but failure so to
amend does not affect the result of the trial
of these issues.
N.C.R. Civ. P. 15(b) (2001). Normally, "when a non-objecting party
allows evidence to be presented at trial outside the scope of the
pleadings, the pleadings are deemed amended to conform to the
evidence, and no formal amendment is required." McDevitt v. Stacy,
148 N.C. App. 448, 455, 559 S.E.2d 201, 208 (2002). "Where the
evidence which supports an unpleaded issue also tends to support an
issue properly raised by the pleadings, however, failure to object
does not amount to implied consent to try the unpleaded issue."
Members Interior Construction v. Leader Construction Co., 124 N.C.
App. 121, 124, 476 S.E.2d 399, 402 (1996), disc. review denied, 345
N.C. 745, 485 S.E.2d 56 (1997). The record does not reflect that
defendant responded to the motion to amend, and defendant has notaddressed this point in her brief to this Court. However,
defendant does take exception to the trial court's finding as fact
that “[t]he evidence presented at trial and the pleadings of the
Plaintiff place the Defendant on notice that the Plaintiff is
entitled to request a resulting trust” as a remedy. Defendant also
excepts to the trial court's conclusions of law based on this
finding.
Our standard of review where the trial court sits without a
jury is whether competent evidence supports the trial court's
findings, and whether the findings support the conclusions of law.
See In re of Azalea Garden Bd. and Care, Inc., 140 N.C. App. 45,
535 S.E.2d 388 (2000).
In Mims, the Supreme Court stated that:
Plaintiff is not precluded from relying on a
resulting trust because of deficiencies in his
complaint. Although plaintiff does not
expressly refer to a resulting trust in his
complaint, and prays for reformation of the
deed on the ground of mutual mistake, he has
pled sufficient facts to state a claim giving
rise to a resulting trust.
Mims, 305 N.C. at 59, 286 S.E.2d at 791. “In pleading a resulting
trust it suffices to allege the ultimate facts as to who paid the
consideration and to whom the conveyance was made.” Bowen v.
Darden, 241 N.C. 11, 14, 84 S.E.2d 289, 292 (1954). In Mims, the
plaintiff alleged in his complaint that he “'told the defendant
that he would be furnishing all of the consideration for the
purchase of this realty, that he was therefore buying it in his own
right as his sole and individual property, and that it would be hisand his alone.'” Mims, 305 N.C. at 59, 286 S.E.2d at 791.
In the case at hand, plaintiff alleged in her complaint: (1)
defendant stated she did not want the house placed in her name; (2)
the closing attorney informed the plaintiff that the title would be
placed in her name; (3) the closing attorney placed title in the
names of both plaintiff and defendant jointly; and (4) defendant
has refused to make any payments on the property. Defendant argues
that because plaintiff did not specifically allege in the complaint
that defendant paid none of the consideration for the purchase of
the property, that plaintiff did not allege sufficient facts to
state a claim giving rise to a resulting trust. Therefore,
defendant argues the trial court's choice of remedy was in error.
We disagree.
Although the Mims Court noted that the plaintiff alleged
facts in his complaint sufficient to state a claim, Mims was an
appeal from a summary judgment ruling, and not from disposition of
a motion to dismiss for failure to state a claim. In light of the
procedural posture in Mims, the Court further provided that:
In this context, particularly, “the nature of
the action is not determined by what either
party calls it.” At summary judgment the
nature of the action is determined not only by
the pleadings and the nature of the relief
sought, but also by the facts “which, on
motion for summary judgment, are forecast by
the evidentiary showing.”
Mims, 305 N.C. at 61, 286 S.E.2d at 792 (internal citations
omitted) (emphasis added). Thus, in determining that the plaintiff
was entitled to a resulting trust, the Mims Court did not limit
itself to the allegations of the complaint. Similarly, the trialcourt here considered not only the allegations and relief requested
in the complaint, but also the other pleadings including the motion
to amend, and evidence presented by the parties in choosing the
remedy.
Thus the question for us on appeal of this issue is whether
the evidence was sufficient to support the court's finding that the
pleadings and the evidence gave notice to the defendant that a
resulting trust was a possible remedy. The plaintiff testified
that the money for the down payment on the house came from gifts
from her family and from the sale of stock that plaintiff had
inherited from her family. Plaintiff further testified that
defendant did not contribute any amount to the down payment.
Finally, plaintiff testified that both she and defendant intended
that the house be titled solely in plaintiff's name so that
plaintiff could qualify for aid in closing costs from her employer.
We believe that this evidence, along with the pleadings and motion
to amend, was sufficient to establish the elements of a resulting
trust and to provide adequate notice to defendant that it was a
possible remedy. Therefore, we conclude that the evidence
supported the trial court's findings of fact, which in turn support
the conclusion of law that a resulting trust was the proper remedy.
Defendant next argues that the trial court erred in not
stating in its judgment what burden of proof it used in its
decision to grant a resulting trust. We can find no authority to
support defendant's argument. The case defendant cites in her
brief, In re Church, 136 N.C. App. 654, 525 S.E.2d 478 (2000),involved the failure of a trial court to comply with a statutory
requirement that grounds to terminate a biological parent's
parental rights be shown by “clear, cogent and convincing
evidence,” and that the order so state. N.C. Gen. Stat. 7A-
289.30(e), repealed by 1998 N.C. Sess. Laws 202, s.5 (now codified
at N.C. Gen. Stat. 7B-807, 7B-1109 (2001)); see also In re
Anderson, ___ N.C. App. ___, 564 S.E.2d 599 (2002). There is no
such statutory requirement here, nor is there a general requirement
that the trial court state in its judgment the burden of proof it
used. Moreover, defendant bases this argument on the language of
earlier holdings that plaintiff was required to show “clear, cogent
and convincing” evidence to prove a resulting trust. See, e.g.,
Mims, 305 N.C. at 57, 286 S.E.2d at 790; Bass v. Bass, 229 N.C.
171, 173, 48 S.E.2d 48, 49 (1948); Bowen v. Darden, 241 N.C. 11,
14, 84 S.E.2d 289, 292 (1954). However, this burden appears to
have been imposed in those cases to overcome a presumption of gift
existing at that time between a husband and wife or between family
members. “When the presumption of gift is rebutted the effect is
'automatically to create a resulting trust' in favor of the party
furnishing the purchase price.” Mims, 305 N.C. at 58, 286 S.E.2d
at 790 (quoting 5 Scott on Trusts, . 443 at 3345 (3d ed. 1967)).
No such presumption of gift applies here. Even if a heightened
burden of proof applied here, we are not persuaded that the trial
court was obligated to state so in its judgment.
Defendant next argues that the trial court's findings of fact
did not support the conclusion that plaintiff was entitled todamages for fraud. On appeal, we review the trial court's
conclusions of law de novo. See Clark v. City of Asheboro, 136
N.C. App. 114, 119, 524 S.E.2d 46, 50 (1999).
This Court has held that the “elements of fraud are: (1)
False representation or concealment of a material fact, (2)
reasonably calculated to deceive, (3) made with intent to deceive,
(4) which does in fact deceive, (5) resulting in damage to the
injured party.” Allen v. Roberts Constr. Co., 138 N.C. App. 557,
532 S.E.2d 534 (2000), disc. review denied, 353 N.C. 262, 546
S.E.2d 90 (2000)(emphasis added).
“In order to constitute fraud there must be false
representation, known to be false, or made with reckless
indifference as to its truth, and it must be made with intent to
deceive.” Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 323 N.C.
559, 568, 374 S.E.2d 385, 391, (1988), reh'g denied, 324 N.C. 117,
377 S.E.2d 235 (1989). “While the concept of a statement made with
reckless indifference as to its truth . . . or the concept of
concealment of a material fact have been held to satisfy the
element of false representation, those concepts do not satisfy the
element of a statement made with intent to deceive.” Id.
Here, plaintiff alleges that the defendant acquired credit
cards in the plaintiff's name without the plaintiff's knowledge,
that the defendant falsely assured plaintiff that she (defendant)
was also liable on the cards, and incurred significant charges in
plaintiff's name on the credit cards. Plaintiff testified that
while she knew about some of the cards, it was her understandingthat defendant was transferring balances from old cards to new ones
and getting rid of the old cards. It was also plaintiff's
understanding that the total balance on all the cards was twenty
thousand dollars ($20,000) and that she and defendant were jointly
liable for the total amount. In fact, the total balance as of the
time of the complaint was thirty-nine thousand, seven hundred
eighteen dollars and nineteen cents ($39,718.19) and plaintiff was
solely liable. Plaintiff further testified that defendant handled
all of their finances and that plaintiff was unable to see the
records of all of their credit card statements.
The trial court made extensive findings of fact concerning the
plaintiff's credit card debt and defendant's actions, including
that at the end of their relationship there were eight credit cards
acquired by defendant in plaintiff's name; that plaintiff was
unaware of four of them; and that “[o]ver the course of the
relationship the Defendant deceived the Plaintiff by informing the
Plaintiff at various times in the relationship that their credit
card debt was $10,000.00 or less.” In addition, the court found
that defendant's testimony was not credible and that:
The Defendant engaged in a pattern of deceit
over the course of the relationship with the
Plaintiff:
a. The Defendant did not inform the
Plaintiff of all of the credit card
applications which were made in the
Plaintiff's name using the Power of
Attorney;
b. The Defendant did not execute the credit
card applications as Power of Attorney
for the Plaintiff but by executing the
Plaintiff's name solely;
c. The Defendant did not list herself as a
joint obligor on the credit cardsalthough giving herself full access to
the line of credit issued by the credit
card, in fact informing the Plaintiff
that they were joint obligors;
d. The Defendant at various times during the
relationship removed the Plaintiff's
mailbox key from her key chain;
e. The Defendant informed the Plaintiff that
all financial records of the parties were
maintained in a box located in the home;
f. When the Plaintiff became suspicious and
checked the box there were no financial
records of any meaning located in the box
but only trash;
g. The Defendant deceived the Plaintiff by
grossly underestimating the number and
amount of the credit card bills and by
informing the Plaintiff that the credit
card bills could be paid off by the
casualty settlement over the fire in the
state of Alabama;
h. The Defendant received all statements of
the credit cards with very limited
exceptions the Plaintiff never saw the
credit card statements and as set out
above would occasionally go to the
mailbox to find that her mailbox key had
been removed.
i. The Defendant would then return the mail
box key to the Plaintiff stating that she
had had a need to borrow the mail box
key;
j. At the separation of the parties the
total credit card debt balance was
approximately $39,700;
k. When the Plaintiff [sic] wrecked an
automobile in Moore County as further
evidence of her continued pattern of
deceit, she informed a police officer
investigating the accident that her
employment was [as] a counselor;
l. There was no evidence produced that the
Defendant had ever been a counselor or
that she was doing this at the time of
the citation.
The court's findings in this case go beyond mere concealment
of facts. They establish, in addition to concealment of material
facts, that defendant's actions were repeated and deliberate, andthat defendant's “continued pattern of deceit” included making
false statements to the plaintiff, to creditors, to the court and
to law enforcement officers. Even though the findings do not
include a specific finding that defendant acted with intent to
deceive, we are unable to read these findings as revealing anything
but intentionally deceptive conduct. Under these unusual
circumstances, therefore, we hold that the findings of fact
support the conclusion that defendant intended to deceive and did
in fact deceive the plaintiff. We therefore affirm the trial court
on this issue.
Finally, defendant argues that the trial court committed
reversible error in concluding as a matter of law that she failed
to establish her counter-claim for unjust enrichment, when the
court made no findings of fact concerning the issue. We disagree.
This Court has held that “[g]enerally, when a trial court fails to
make required findings of fact, the case must be remanded to the
trial court for entry of findings. However, when the evidence in
the record as to a finding is not controverted, remand is not
required.” Pitts v. American Sec. Ins. Co., 144 N.C. App. 1, 18,
550 S.E.2d 179, 192 (2001) (citations omitted). Defendant claims
that she “expended substantial sums of money, in an amount to be
proved at trial” and “substantial labor” improving the house and
property which she and the plaintiff both occupied. Ralph Warding,
the defendant's father, testified at trial that he worked on the
property and made various improvements. Neither defendant's
testimony nor Mr. Warding's provided evidence of the value of theimprovements, which is a necessary element to recover for unjust
enrichment beyond nominal damages. See Johnson v. Sanders, 260
N.C. 291, 295, 132 S.E.2d 582, 586 (1963). Because defendant
failed to meet her burden of producing evidence to prove the
necessary elements of her claim, remand is not necessary. See
Arnold v. Ray Charles Enterprises, Inc., 264 N.C. 92,99, 141 S.E.2d
14, 19 (1965) (where the court fails to find an essential fact, but
the record shows that the party having the burden of proving such
fact has not introduced evidence sufficient to sustain such fact,
remand would be futile).
In summary, we conclude that the trial court correctly
determined that when plaintiff showed that she supplied all the
purchase money for the real property, a resulting trust was created
in her favor. The trial court did not err in granting plaintiff
this remedy even though she did not specifically request it in her
complaint, since the complaint and the evidence presented at trial,
as well as the motion to amend, served as notice to the defendant
that a resulting trust was a possible remedy. We further hold that
the trial court did not err in its conclusion of law that plaintiff
was entitled to damages for fraud. Finally, we hold that while the
trial court did not find facts to justify its conclusion of law
denying defendant damages on her counter-claim for unjust
enrichment, remand is not necessary.
Affirmed.
Chief Judge EAGLES and Judge BRYANT concur.
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