SYLVIA ANN PATTERSON,
Plaintiff,
v
.
Mecklenburg County
No. 95-CVS-3906
DENNIS STRICKLAND, JR.,
Defendant.
Casstevens, Hanner, Gunter & Riopel, P.A. by Robert P. Hanner,
II, for plaintiff-appellee.
Rosenman & Colin, LLP, by William L. Sitton, Jr. and
Christopher A. Hicks, for defendant-appellant.
TIMMONS-GOODSON, Judge.
This is the second appeal in this matter. The Court of
Appeals, Lewis, J., reversed and remanded the matter for a new
trial. Patterson v. Strickland, 133 N.C. App. 510, 515 S.E.2d 915
(1999) (“Patterson I”). In Patterson I, this Court held that
Sylvia Ann Patterson (“plaintiff”) was not entitled to a one-half
share of the disputed property on a contract theory because the
contract violated the statute of frauds. The Court required a new
trial on the equitable theories of constructive and resulting
trusts, upon which the case was brought. A new trial was conducted
in the Superior Court of Mecklenburg County. The evidence at trial tended to show the following: Plaintiff
and Dennis Strickland, Jr. (“defendant”) met in the mid-1960's.
After their initial meeting, the relationship became romantic. On
12 December 1975, defendant purchased a house and real property
located at 720 West Arrowood Road, Charlotte, North Carolina,
(“Arrowood”). Defendant took title to Arrowood solely in his name
and plaintiff was aware that her name did not appear on the deed.
The overall purchase price for Arrowood was $39,528.00. Defendant
secured the mortgage with a payment of $8,781.00. At closing,
defendant executed a deed of trust for the remaining balance of
$30,747.60 payable over a ten-year period. Monthly mortgage
payments on Arrowood were $256.23.
In 1976, defendant, plaintiff and her two sons moved to
Arrowood. Upon moving to Arrowood, plaintiff paid defendant
$160.00 monthly. Plaintiff contends that she and defendant agreed
that she would share an ownership interest in Arrowood. Defendant
contends that plaintiff was a tenant and he never agreed to share
an ownership interest. In 1985, Jane Keever and Jean Keever
(“Jean”), nieces of the plaintiff, moved to Arrowood. In 1986, the
mortgage on Arrowood was paid in full. After 1986, plaintiff
continued to give defendant monthly payments. According to
plaintiff, the money was given to defendant to pay for insurance,
taxes, and basic repairs to Arrowood. Defendant contends that the
payments were made in satisfaction of a tenant-landlord
relationship. In 1985, defendant became romantically involved with Jean.
Defendant moved from Arrowood to his parents' family farm in
Maxton, North Carolina (“Maxton Farm”). Shortly after defendant
left Arrowood, Jean also moved to Maxton Farm. In 1987, the word
“rent” appeared in the memo portion of plaintiff's cancelled
checks. The word “rent” was not in plaintiff's handwriting. In
March 1995, defendant married Jean. Shortly after the marriage to
Jean, defendant's son demanded that plaintiff leave Arrowood.
Defendant now appeals from a jury verdict again in favor of
plaintiff awarding her a forty-five percent ownership interest in
Arrowood.
Resulting and constructive trusts are governed by the ten-year
and not the three-year statute of limitations. N.C. Gen. Stat. §
1-56 (2001); Bowen v. Darden, 241 N.C. 11, 17, 84 S.E.2d 289, 294
(1954). The statute of limitations begins to run “from the time
the trustee disavows the trust and knowledge of his disavowal is
brought home to the [beneficiary], who will then be barred at the
end of the statutory period.” Cline v. Cline, 297 N.C. 336, 348,
255 S.E.2d 399, 407 (1979).
Here, defendant argues that the initial wrong alleged by
plaintiff took place on 12 December 1975, when defendant took title
to Arrowood. Taking plaintiff's evidence as true and considering
the evidence in the light most favorable to her, the facts tend to
show that in March 1995 defendant's son called and demanded that
plaintiff vacate the property. Thus, there was sufficient evidence
for the jury to properly infer that the formal disavowal took place
in March 1995. Plaintiff filed her complaint in April 1995, which
is within the ten-year period allowed by the statute of limitations
for a resulting or constructive trust. This argument is without
merit.
By his second assignment of error, defendant argues that the
trial court erred in not granting him judgment as a matter of law
when plaintiff failed to present clear, strong, and convincing
evidence of a resulting trust. Defendant specifically argues thatplaintiff failed to show an agreement to take title jointly or that
her money was actually used to acquire Arrowood.
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. . . . A trust of this sort does not
arise from or depend on any agreement between
the parties. It results from the fact that one
man's money has been invested in land and the
conveyance taken in the name of another.”
Patterson, 133 N.C. App. 510, 519, 515 S.E.2d 915, 920 (1999)
(quoting Teachey v. Gurley, 214 N.C. 288, 292, 199 S.E. 83, 86-87
(1938)). A resulting trust is created by operation of law.
Strange v. Sink, 27 N.C. App. 113, 116, 218 S.E.2d 196, 199, disc.
review denied, 288 N.C. 733, 220 S.E.2d 353 (1975). “[T]he fact
that the payor of the purchase money has previously obtained the
consent of the other person to the placing of the title in his name
does not prevent the creation of a resulting trust; he simply
consents to an obligation imposed by the law.” Id.
In the instant case, the issue of whether the parties created
a resulting trust was presented to the jury. The jury was asked
the following:
ISSUE 1: Is the property located at
[Arrowood] held under a purchase-money
resulting trust by [defendant] for the benefit
of [plaintiff]?
Answer: No
. . . .
While the jury's answer favors defendant, he assigns it as error.
Defendant argues that a resulting trust was not established byclear, strong, and convincing evidence, and the jury agreed. Thus,
even if the trial court erred by not directing judgment as a matter
of law, any such error would not have been prejudicial since the
jury's answer on the issue of a resulting trust is in defendant's
favor. We overrule this assignment of error.
In defendant's next assignment of error, he argues that the
trial court erred in failing to grant judgment as a matter of law
on the issue of a constructive trust. Defendant contends that
plaintiff failed to show a fiduciary relationship or fraud. We
disagree.
In Patterson I, this Court concluded that it was “extremely
reluctant to find a fiduciary relationship between unmarried
roommates,” and “merely living together should not, generally, be
enough to give rise to a fiduciary relationship.” Patterson, 133
N.C. App. 510, 516-17, 515 S.E.2d 915, 919 (1999). However, the
Court indicated that if plaintiff could “provide evidence of a
confidential relationship and fraud, a jury instruction on remand
regarding constructive trusts might be appropriate.” Id. at 521,
515 S.E.2d at 921-22. Defendant now asserts that plaintiff's only
basis for establishing a fiduciary relationship was her “common law
wife” status. We disagree.
A constructive trust exists,
“where a party acquires property by conveyance
or devise secured to himself under assurances
that he will transfer the property to, or hold
and appropriate it for, the use and benefit of
another, a trust for the benefit of such other
person is charged upon the property, not by
reason merely of the oral promise, but because
of the fact that by means of said promise hehad induced the transfer of the property to
himself.”
Ferguson v. Ferguson, 55 N.C. App. 341, 345, 285 S.E.2d 288, 291,
(quoting Glass v. Hulbert, 102 Mass. 24, 39, 3 Am. Rep. 418, 430
(1869)) (emphasis added) disc. review denied, 306 N.C. 383, 294
S.E.2d 207 (1982). Unlike a resulting trust, a constructive trust
“arises when one obtains the legal title to property in violation
of a duty he owes to another. Constructive trusts ordinarily arise
from actual or presumptive fraud and usually involves the breach of
a confidential relationship.” Fulp v. Fulp, 264 N.C. 20, 22, 140
S.E.2d 708, 711 (1965).
Defendant argues that plaintiff must show clear, strong and
convincing evidence that there was a confidential relationship and
fraud. Citing Patterson I, defendant highlights for the Court the
prior panel's language, which would seem to require both a
confidential relationship and fraud. However, defendant
misapprehends the law. It is not necessary to show fraud in order
to establish a constructive trust. Roper v. Edwards, 323 N.C. 461,
465, 373 S.E.2d 423, 425 (1988). Such a trust will arise by
operation of law “against one who in any way against equity and
good conscience” holds legal title to property which he should not.
Id.
Here, the jury could properly infer that there was evidence to
establish that (1) defendant acquired property by conveyance
secured to himself; (2) at the time Arrowood was purchased,
plaintiff believed that defendant acquired the real property solelyin his name for plaintiff's use and benefit; and (3) there was not
a landlord-tenant relationship as asserted by defendant. We
decline to reach a finding different from the jury. Thus, this
assignment of error is overruled.
In defendant's fourth assignment of error, he argues that the
trial court's award of forty-five percent interest in Arrowood to
plaintiff was not supported by the law or evidence. Defendant
contends that plaintiff was able to prove by clear and convincing
evidence that she paid $8,935 over the ten-year mortgage period
which establishes approximately twenty-three percent interest in
Arrowood. We disagree.
When a court impresses a constructive trust upon property for
the benefit of a claimant, it exercises its equitable powers to
fashion remedies. Roper, 323 N.C. at 465, 373 S.E.2d at 425.
Constructive trusts arise to prevent unjust enrichment by the legal
titleholder. Patterson, 133 N.C. App. at 521, 515 S.E.2d at 921.
In the case at bar, the total purchase price for Arrowood was
$39,528.00. Plaintiff contended that she gave defendant monthly
payments of $160.00 but could only produce records of cancelled
checks and money orders totaling $8,935.46 from 1976 through 1986.
However, at trial defendant had the following exchange with
plaintiff's attorney:
. . . .
Q: For the . . . period from 1975 to 1986,
did [plaintiff] pay to you $160 a month,
whether it was applied towards the mortgage or
rent, or whatever you want to call it. . .
A: She paid $160 a month timely each month.
. . . .
By defendant's admission, plaintiff paid $160.00 each month for ten
years, which is a total of $19,200.00 and approximately forty-five
percent of the total mortgage. Defendant's testimony at trial does
not support his argument, in which he contends that plaintiff only
proved that she paid twenty-two percent of the total mortgage.
From the evidence presented by plaintiff and the testimony from
defendant, the jury could properly infer that plaintiff contributed
forty-five percent of the total purchase price of Arrowood. We
therefore overrule this assignment of error.
In defendant's fifth assignment of error, he argues that the
trial court erred in admitting evidence depicting plaintiff and
defendant living together as husband and wife. Defendant contends
that this evidence was irrelevant and prejudicial him. We
disagree.
This issue was raised and resolved in the prior appeal and
thus it may not be resurrected in this appeal. In Patterson I,
this Court held that “the descriptive evidence of the parties'
behavior as husband and wife was relevant here to rebut defendant's
claims of a mere landlord-tenant relationship.” Patterson, 133
N.C. App. at 517, 515 S.E.2d at 919.
In his last assignment of error, defendant argues that the
trial court erred by failing to instruct the jury on fraud as
requested. We disagree.
Defendant contends that the trial court committed prejudicial
error in failing to specifically instruct the jury as follows: Third, [plaintiff] must prove that [defendant]
acquired [Arrowood] through fraudulent conduct
or representations. This means that
[p]laintiff . . . must show, by clear, strong
and convincing evidence that (1) an oral
agreement between the parties prior to the
legal conveyance of [Arrowood] existed, and
(2) a promise was made by . . . [d]efendant
that misled . . . [p]laintiff and it was made
without the intention to fulfill the promise.
In this case, [p]laintiff contends that
[d]efendant . . . promised to acquire
[Arrowood] in both of their names, in
consideration for [p]laintiff making payment
on the note to Southern National Bank,
representing funds borrowed by [defendant] to
purchase the property.
“When instructing the jury in a civil case, the trial court
has the duty to explain the law and apply it to the evidence on the
substantial issues of the action.” Wooten v. Warren, 117 N.C. App.
350, 358, 451 S.E.2d 342, 347 (1994). In determining whether the
charge to the jury fairly and clearly presents the law to the jury,
this Court must consider the instructions in their entirety.
Murrow v. Daniels, 321 N.C. 494, 497, 364 S.E.2d 392, 395 (1988).
A charge that is substantially correct in stating the law will be
upheld. In re Will of Maynard, 64 N.C. App. 211, 237, 307 S.E.2d
416, 433 (1983), disc. review denied, 310 N.C. 477, 312 S.E.2d 885
(1984).
In the case at bar, defendant sought to have the court insert
defendant's requested jury instruction. However, charging the jury
as requested by defendant would have resulted in a patently
erroneous statement of the law. As previously noted in this
opinion, it is not necessary to demonstrate fraud in order to
establish a constructive trust. Having reviewed the instructionsin their entirety, we conclude that the charge clearly and fairly
presented the law to the jury. Thus, the trial court did not err.
No error.
Judge HUDSON concurs.
Judge CAMPBELL concurred in the opinion prior to 31 December
2002.
Report per Rule 30(e).
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