Simmons v. Samulewicz

Citations: 129 Haw. 507; 304 P.3d 648; 2013 WL 1919564; 2013 Haw. App. LEXIS 279Docket: No. 30527

Court: Hawaii Intermediate Court of Appeals; May 9, 2013; Hawaii; State Appellate Court

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Plaintiff-Appellant Scott E. Simmons appeals a Final Judgment from the Circuit Court of the First Circuit favoring Defendant-Appellee April Lee Samulewicz. The judgment followed the court's April 28, 2010 order granting Samulewicz's Motion for Summary Judgment and a subsequent December 13, 2010 order awarding attorney’s fees to Samulewicz. Simmons and Samulewicz had a nearly seven-year romantic relationship that included cohabitation and an engagement. After their relationship ended, Simmons claimed they had a joint venture involving real estate, leading to multiple causes of action against Samulewicz, including breach of contract and unjust enrichment.

On appeal, Simmons argues the circuit court erred in granting summary judgment, specifically contesting the applicability of res judicata, collateral estoppel, and the statute of frauds to their agreement. He asserts that his part performance removes oral agreements from the statute's constraints, the parol evidence rule does not apply to a quitclaim deed, and there are genuine issues of material fact regarding their partnership agreement and his right to damages. Additionally, he challenges the award of attorney's fees as excessive and unwarranted.

The court concluded that the circuit court correctly granted summary judgment on Simmons's express and implied contract claims but erred regarding his unjust enrichment claim and the award of attorney's fees. Consequently, the court vacated the Final Judgment concerning Simmons's unjust enrichment claim and the attorney’s fees, remanding the case for further proceedings. The case background details that Simmons and Samulewicz began their relationship in June 2000, cohabited, and purchased a property together in May 2002, with differing accounts about the purpose and financial arrangements surrounding the property.

In August 2002, Simmons and Samulewicz participated in a spiritual wedding ceremony but did not sign a marriage license due to concerns over financial liabilities associated with legal marriage. Although they intended to secure a marriage license afterward, it was never obtained. Following the ceremony, Simmons claims they presented themselves as husband and wife and lived together at the Kuupua Street Property. During this time, Simmons managed the property, handling various maintenance and rental responsibilities, while Samulewicz was frequently away on business.

In August 2004, Simmons transferred his interest in the Kuupua Street Property to Samulewicz to protect it from potential creditors. However, Samulewicz contends there was no agreement regarding Simmons retaining any interest in the property. Simmons asserts that they had agreed not to place him on the titles of subsequent properties purchased with refinancing proceeds, including a Rental Property and a Florida Property, which were titled in Samulewicz's name and her family's names. He claims an agreement existed to create a trust encompassing these properties, where he would be a trustee and beneficiary.

Samulewicz disputes Simmons's involvement in the property purchases and any agreement to establish a trust. The relationship ended in June 2007, leading Samulewicz to file an action to eject Simmons from the Kuupua Street Property, which resulted in a district court ruling granting her possession. Simmons then filed a complaint for division of quasi-marital property in family court, but this was dismissed for lack of jurisdiction. Subsequently, Simmons filed a complaint in circuit court in April 2008. On October 21, 2009, Samulewicz moved for summary judgment, arguing Simmons had no rights to her property and that his claims were barred by res judicata, collateral estoppel, the statute of frauds, and the parol evidence rule.

On April 28, 2010, the circuit court granted Samulewicz’s Motion for Summary Judgment, determining there was no genuine issue of material fact regarding the Plaintiff’s claims, although the specific grounds for the ruling were not specified. Subsequently, on May 25, 2010, Simmons filed a Notice of Appeal and Samulewicz sought attorney’s fees and costs. On December 13, 2010, the court awarded Samulewicz $29,800 in attorney's fees and $1,025.56 in costs, and issued a Final Judgment in his favor. Simmons then filed an Amended Notice of Appeal on December 27, 2010.

The standards of review indicate that the grant or denial of summary judgment is reviewed de novo, with summary judgment appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Furthermore, the award of attorney’s fees is reviewed under an abuse of discretion standard.

In the appeal, Simmons challenges the summary judgment concerning claims of constructive trust, fraud, estoppel, and conspiracy but fails to present arguments for these claims, leading to their waiver. He raises additional points of error related to the ambiguity of the circuit court’s ruling on summary judgment, focusing on arguments made by Samulewicz. Notably, the court addressed the applicability of res judicata and collateral estoppel, concluding that neither precluded the current action due to the distinctiveness of the prior lawsuits involving Samulewicz and Simmons. Res judicata prevents relitigation of previously adjudicated claims, while collateral estoppel prevents relitigation of issues that were actually decided in prior actions.

In Dorrance v. Lee, the court established that for claim preclusion to apply, three criteria must be met: (1) a final judgment on the merits, (2) both parties being the same or in privity with the original suit, and (3) the claim in question being identical to the claim originally decided. In contrast, collateral estoppel requires: (1) identical issues, (2) a final judgment on the merits, (3) the issue being essential to the prior judgment, and (4) the party against whom it is asserted being a party or in privity with a party to the earlier case.

In the current case, the summary possession action did not resolve identical claims or issues since it focused on possession of the property rather than damages. Simmons' defense in that action, which referenced his legal and equitable claims, did not align with the monetary damage claims raised in the present lawsuit. Consequently, Samulewicz did not satisfy the burden of proving claim or issue preclusion.

Furthermore, Simmons' family court action does not preclude his claims in this case. Although there are overlapping claims, the family court dismissed Simmons' complaint due to lack of subject matter jurisdiction, meaning there was no final judgment on the merits. Such dismissal does not serve to bar future claims.

Lastly, Simmons' claims regarding breach of express and implied contracts are framed as a partnership agreement with Samulewicz. However, while he alleges a joint venture related to real estate, the claims are fundamentally based on the failure to establish a promised trust, including his exclusion as a trustee or beneficiary and the sharing of trust income and assets.

Simmons's appeal does not contest that his contract claims are based on an alleged agreement to create a trust but focuses on the potential for those claims to proceed based on an alleged partnership agreement. According to Hawaii Revised Statutes (HRS) 425-101, a partnership is defined as an association of two or more persons to co-own a business for profit. The Hawai'i Supreme Court has clarified that a partnership's existence relies on the parties' intention to share profits. Evidence presented during the summary judgment motion suggests that no partnership agreement existed between Simmons and Samulewicz. Samulewicz stated in her declaration that, upon Simmons's signing of a quitclaim deed in August 2004, there was no agreement for her to hold the property for his benefit. She affirmed that Simmons had no involvement in the purchase of additional properties by her and her family and emphasized that there was no partnership or joint venture formed between them. Simmons's declaration, while detailing their romantic relationship and shared life decisions, fails to demonstrate a partnership aimed at profit. He described their relationship, the proposal for marriage, and joint decisions regarding financial matters and property, but characterized his actions as stemming from a romantic commitment rather than a business partnership. The deed for their property indicated joint tenancy but does not establish a partnership for profit.

Simmons co-signed a mortgage for a property with defendant April Lee Samulewicz, not as a mere favor, but because they intended to build a life together as a married couple. Both parties agreed to share financial responsibilities for the property, including mortgage payments, utilities, and improvements, and to share any equity or benefits derived from it. In August 2004, they agreed to transfer the title of the property solely to Samulewicz to protect their assets and relationship, with no intention to forfeit Simmons's financial interest. Simmons asserts that the refinance proceeds were meant to benefit their relationship, not to enrich Samulewicz at his expense.

However, the court found that the intent expressed in Simmons's declaration did not establish a partnership. There was no evidence of an agreement to share profits and losses typical of a business partnership. The absence of such an agreement led the circuit court to dismiss Simmons's express contract claim through summary judgment. Additionally, Simmons's claim of an implied contract based on their relationship was also dismissed, as cohabitation alone does not indicate a mutual intention to contract. The court ruled that there was no genuine issue of material fact regarding the existence of an express or implied contract, thus eliminating the need to consider issues related to the statute of frauds or the parol evidence rule.

The Circuit Court's summary judgment on Simmons' unjust enrichment claim was challenged on the grounds that Simmons presented sufficient evidence to indicate a genuine issue of material fact regarding Samulewicz's unjust enrichment. Simmons contends that he provided significant financial benefits to Samulewicz, including over $46,000 in mortgage payments and additional expenses related to their properties and relationship. In contrast, Samulewicz asserts that the favors exchanged between them do not constitute unjust enrichment, arguing that such claims could lead to unnecessary litigation among cohabiting couples.

While Samulewicz acknowledges receiving benefits from Simmons, the core issue is whether retaining these benefits is unjust given their relationship dynamics. The Hawai'i Supreme Court defines unjust enrichment as the enrichment of one party at the expense of another, emphasizing the prevention of injustice as the central focus of restitution. The court has previously recognized that benefits conferred can constitute unjust enrichment if their retention is deemed unfair.

Hawai'i case law has mainly addressed unjust enrichment in business contexts, affirming that material factual issues can exist regarding the unjust retention of benefits. Given that Simmons and Samulewicz lived together for years, held themselves out as a couple, and considering relevant case law—including Holstein v. Benedict, which involved recovery for support and services rendered—the court must evaluate the nature of their relationship and the circumstances surrounding the benefits exchanged.

The Hawaii Supreme Court established key principles regarding the presumption of gratuity in services rendered within a household. Typically, if services are rendered and accepted, the law implies a promise to pay; however, this presumption does not apply to family members living in the same household, as their services are generally deemed gratuitous. For a plaintiff to recover compensation, they must demonstrate either an express contract for payment or circumstances suggesting a reasonable expectation of compensation. This presumption of gratuity extends to both related and unrelated individuals cohabiting as a family.

In the case at hand, Simmons and Samulewicz, while not legally related, lived together as a family, leading to the presumption that Simmons's services were gratuitous. Consequently, Simmons's unjust enrichment claim for household-related services, such as maintaining a vehicle or purchasing supplies, is precluded because he failed to provide evidence of an express contract or a reasonable expectation of payment. However, Simmons may pursue compensation for mortgage payments made on the Kuupua Street Property, as these payments fall outside the scope of services intended for mutual comfort and convenience. Since Samulewicz claims full ownership of the property, there exists a genuine issue of material fact regarding the unjust retention of those mortgage payments.

Additionally, Simmons's claim for expenses incurred and services related to the Rental Property, co-owned by Samulewicz and her family, is not precluded, as those services are not considered gratuitous. The court recognized that unjust enrichment claims can arise between parties in a romantic relationship, supporting Simmons's position.

In *Maglica v. Maglica*, the court allowed quantum meruit recovery for a former girlfriend, affirming that she could claim the reasonable value of services rendered to her ex-boyfriend's company if they directly benefited him. The evidence presented indicated a genuine issue regarding whether the boyfriend, Samulewicz, had been unjustly enriched, leading to a conclusion that the circuit court wrongly granted summary judgment in favor of Samulewicz on this claim. 

Additionally, the circuit court's award of $29,800 in attorneys' fees to Samulewicz was not justified, as the basis for the award was unspecified. Samulewicz argued she was the prevailing party under HRS 607-14, relating to assumpsit actions, which include quasi-contractual remedies like unjust enrichment. Since the summary judgment for Simmons's unjust enrichment claim was vacated, the determination of the prevailing party remains uncertain. The court noted that while a plaintiff may not fully succeed in their claim, they could still be deemed the prevailing party for costs and fees purposes.

Consequently, the award of attorneys’ fees was vacated, and the circuit court was instructed that it could reassess the awarding of fees after resolving Simmons's unjust enrichment claim. The Final Judgment from December 13, 2010, was vacated regarding the unjust enrichment claim and the attorneys' fees, while remaining affirmed in other respects, and the case was remanded for further proceedings. The circuit court's award of costs was not contested by Simmons.