When unmarried couples make oral financial promises to each other, problems can arise if they split up. In a recent New York court decision, the Appellate Division, Second Department addressed such a situation, finding that the Plaintiff could pursue her claim for constructive trust with respect to certain property she asserted was promised to her by the Defendant, while they were cohabiting as an unmarried couple. Although this case has several unusual facts, couples should be aware of the possible consequences of oral agreements made between them.

In the case of Baron v. Suissa,Plaintiff and Defendant met in 1992, when they were both married to other people. Defendant obtained his divorce in 1995 and Plaintiff and Defendant moved into a house located in Northport shortly thereafter. The house was solely owned by Defendant, who also was the only borrower on the mortgage utilized in connection with the purchase of the home. Plaintiff’s complaint alleged that the parties had agreed that the house would be re-titled into joint ownership upon completion of her divorce. She also alleged that she and Defendant entered into an oral agreement to form a partnership in an antique business pursuant to which they were to share equally in the profits and inventory of the business. Oral partnerships are recognized in New York. Plaintiff, an attorney who represented herself in the litigation, further claimed that in exchange for domestic services she provided at the home and certain legal services which she provided to Defendant’s other businesses during the course of their relationship, Defendant promised to maintain and support her and that they would share equally in the income and assets acquired during the relationship.

After the relationship ended, the Defendant sought to evict Plaintiff and her son from the residence notwithstanding Plaintiff’s claim of ownership of the same. Plaintiff also alleged that Defendant removed from the premises certain fixtures and antiques and other personal property in which Plaintiff claimed to have an ownership interest.

Generally, the statute of frauds requires agreements involving real property to be in writing. As a result, the agreement that the Plaintiff would be joint owner in the house should normally have been in writing to be enforceable. The Court in Baron, however, found that the Plaintiff’s allegations of partial performance under the various oral agreements which she claimed to have entered into with Defendant were sufficient to permit the claims related to the real estate to survive even in the absence of an appropriate writing. While the Court did not address the merits of Plaintiff’s claim, it did find that her claim was sufficient, “at this early procedural stage” to fall within an exception to the statute of frauds and, as such should not be dismissed.

Although Baronseems to impact an unmarried couple’s rights regarding property distribution and support, the case appears to be somewhat unique as the Plaintiff alleged the existence of specific oral agreements relating to the support and maintenance being provided by Defendant in exchange for services rendered by Plaintiff.

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