Lots of couples live together without getting married. Sometimes the couple plans to wed eventually, but breaks up before the big day. Sometimes one or both parties are adverse to marriage. Sometimes one or both parties were married before, and are not eager to have that sort of relationship again. But whatever the reasoning, these relationship often end. Then the parties are in a situation where their money, and sometimes property, are combined. Clearly, if the couple was married, the legal system would just use the Iowa Code chapter of divorces to divide the property. But that is not available to couples that did not marry.
The Iowa Supreme Court and Iowa Court of Appeals cases discussing this sort of situation usually, but not always, center upon real property, in the form of either a house or farm. Typically, the Court considers how to divide such property under theories of contract, unjust enrichment, constructive trust, and joint venture. In re Marriage of Martin, 681 N.W.2d 619 (Iowa 2004).
Contract: The most straight-forward, if it can be proven, recovery method is in contract. A contract is simply an agreement between two parties. For instance, when one partner in a non-marital relationship tells the other to sell her home and move in with him, and she will have a place to live into retirement, the Court found a contract. It was breached when the couple split, and the partner retaining the residence owed the other partner damages. Kerkove v. Thompson, 487 N.W.2d 643 (Iowa App. 1992).
Unjust Enrichment: Unjust enrichment arises where someone keeps some sort of benefit provided by another without paying, where compensation is reasonably expected. This maybe utilized where one person improved the house owned by the other member of the couple, but the owner did not in any manner compensate for the improvements, and kept the house. However, the enrichment must be unjust in order to obtain recovery. In a case where the woman agreed to cook and clean for the man, expended no capital, took no risks, and expended only minor labor on improvements, no unjust enrichment on the man's part was established. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).
Resulting Trust: A resulting trust is a trust imposed by courts, where the circumstances suggest the prior owner did not intend to convey an interest in the property. Intent is key here. So, if the person who accidentally gives his or her interest refused to be on the mortgage or deed to a house, it was clearly not an unintentional surrender of rights. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).
Constructive Trust: This trust is also imposed by the court, where one wrongfully obtained property through wrongdoing. Again, intent can be key, but focuses on the wrongdoing. For instance, if a man tells a woman to move in with him, and she performs cooking and cleaning activities, but provided little toward the actual expenses of the house, there is insufficient proof of him acting inequitably or unconscionably to provide for a constructive trust. She rendered her services gratuitously. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).
Joint Venture: This seems to be the most used recovery vehicle in such cases recently. A joint venture is a business undertaking by two or more people toward a single project. This method divides the property based upon the interest each party held, which when buying a house is usually one-half to each. Therefore, the Court will typically reimburse for contributions toward the house (such as carrying costs and improvements, including labor) and divide the remaining amount equally. Scheppele v. Schulz, 728 N.W.2d 60 (Iowa App. 2006). Under this approach, the Court limits its analysis to the project, like the purchase of the house. Therefore, net worth does not matter, nor does other property, such as joint bank accounts. Riley v. Schrage, no. 01-0681 (Iowa App. July 19, 2002).
Loans: Just because a couple lives together does not mean that money flowing between them does not have to be repaid. In Shold v. Goro, 449 N.W.2d 372 (Iowa 1989), money provided by one party to the other in check form, delineated as a loan in the memo line, had to be repaid after the couple separated. To allow otherwise would to unjustly enrich the borrower by allowing him to keep the money he agreed to repay.
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