The ten-member Mississippi Court of Appeals ruled on April 17, 2012, that Tate County Chancery Judge Percy L. Lynchard, Jr., erred in awarding compensation to a woman for part of the value of the house she had occupied with her former same-sex partner. Voting 8-2 on the ultimate merits of the case in Cates v. Swain, 2012 WL 1292639, the court found that the absence of any express contractual agreement between the women concerning ownership of the property left the court powerless to order compensation, despite evidence of the plaintiff's past contribution of assets that assisted in purchasing it.
The case shows the continuing need for LGBT "family planning" when same-sex couples cohabit, unless they are married or otherwise bound in a legally-recognized relationship that would govern joint property rights. Mississippi not only forbids same-sex marriage by statute and constitutional amendment, it also has legislatively abolished "common law marriage," as a result of which its courts have consistently rejected any theory of implied contractual obligations between cohabitants, either same-sex or different sex.
In this case, Mona Cates, a commercial airline pilot, and Elizabeth Swain, who was, until retiring in 2005, a meterologist and oceanographer for the U.S. Navy, met in 2000 through a website for people seeking same-sex partners, according to the majority opinion by Judge James D. Maxwell, II. Although Swain stated in her profile that she was single, she was actually legally married to a man, from whom she had separated. Swain did not finally divorce her husband until after all the facts relevant to this case.
At the end of 2000, Swain was transferred by the Navy to Pensacola, Florida, where she bought a house in her own name, although she was required by Florida law to list her husband on the mortgage as co-obligor. Cates contributed some money toward the down-payment and lived there with Swain between flight assignments. Swain made the mortgage payments. Cates opened a joint checking account with Swain, into which only Cates made deposits. Cates paid Swain $11,000 in order to trade up Swain's Toyota to a Mercedes, and they purchased other vehicles jointly. After the 9/11 terror attacks, Cates, asnoted above a commercial pilot, set up an E-trade investment account in both their names as a joint tenancy with right of survivorship, to ensure that if anything happened to her Swain would have access to the balance in the account.
In 2003, Swain was transferred to Seattle, Washington, selling the Florida home and recovering $32,000 in equity. Cates purchased a home in Washington, with Swain signing over $34,000 towards the purchase. The home was purchased solely in Cates' name, since Swain, still married, did not want to give her husband any rights to it. (At trial, Cates testified that the $34,000 was repayment to her of money she had loaned Swain, but Chancellor Lynchard found this to be unsupported by the record.) Swain lived in the Washington home without paying rent or mortgage payments, but did make various improvements to the house.
When Swain retired from the Navy, they decided to move to Cates' native state of Mississippi. Cates sold the Washington house at a profit, and purchased a new home in Tate County using the proceeds. Once again, the house was purchased solely in Cates' name, although Swain paid for closing costs and for carpeting the house. Their relationship deteriorated after moving to Mississippi, and Swain moved out in March 2006, immediately attempting to liquidate the E-trade account in order to withdraw the money, but Cates was able to block this and direct that the funds be deposited to her own bank account. At trial, Swain testified that she did this "because I ended up with absolutely nothing financially from what I had invested, and so honestly, I was trying to get something back."
When Cates refused to make any payment to Swain for her share of the investment in the Mississippi house, Swain filed suit in the Chancery Court, asserting various equitable theories, including that they were joint venturers in the purchase of the homes, that they had an agreement that Swain would invest the proceeds of the sale of her Florida house in their joint real estate holdings, that the court should declare a trust, either "constructive" or "resulting," of Swain's interest in the Mississippi property, or that Swain should be awarded compensation in order to avoid "unjust enrichment" of Cates.
The Chancellor accepted only one of these arguments: that Cates would be unjustly enriched if Swain were not compensated for at least a portion of the value of the Mississippi home, since the proceeds from sale of the Florida home had been given by Swain towards the purchase of the Washington home, the sale of which provided most of the money that Cates used to buy the Mississippi home. The Chancellor awarded $44,995 to Swain, to be paid in cash by Cates, and Cates appealed.
Eight of the ten members of the court agreed that the Chancellor correctly rejected the joint venture, implied contract and trust arguments, but ruled that the unjust enrichment theory could not be used in this case because it is a form of contractual relief (sometimes called "quasi-contract") forbidden in a case involving unmarried cohabitants. Only six members of the court signed the majority opinion by Judge Maxwell, however, with a concurring opinion representing the views of two judges who agreed with the result but regretted the "inequity" of the decision. Chief Judge L. Joseph Lee dissented, joined by another member of the court, arguing that it was within the Chancellor's discretion "to apply the rules of equity and award Swain a share of the property accumulated by the joint efforts of the parties during their relationship."
Looming over the case, of course, was the fact that Swain was still married to a man throughout her entire relationship with Cates, which means that even if Mississippi allowed same-sex marriage or had some sort of legal status for same-sex couples, Swain and Cates would be ineligible for it. Judge Maxwell did point out that despite the strong policy in Mississippi against same-sex marriage, the courts would enforce an express contract between cohabitants concerning their respective property rights, and had actually done so in a prior case involving a same-sex couple. So ultimately the problem here was that Cates and Swain failed to make any actual contracts concerning the ownership of their houses, and six out of the ten judges were content to rule that Swain's compensation for her "investment" was that she lived in the Washington and Mississippi houses that were purchased by Cates.
John Thomas Lamar, Jr., and David Mark Slocum, Jr., represent Swain. Jonathan S. Masters and Robert M. Stephenson represent Cates.