Acts, 1st Ex. Laws Ann.
Property division for common-law couples
La Buda, Mich. Chase Manhattan Bank, F. Spousal rights to dispose and manage property during life, at divorce, and at death; b. Creditor rights in property of spouses; and c. Estate, gift, and income taxes. Relying on In re Brollier, B. The Court disagrees with Brollier. In addition, the Court finds the reasoning in Brollier unpersuasive.
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See B. And Brollier did not reference or discuss 11 U. For these reasons, the Court declines to follow Brollier. Docket 15 at 3. Either Debtor or Defendant could unilaterally exercise his or her right to draw on the line of credit.
Married Spouses – Equalization of Net Family Property
And both of them would be jointly liable for any debt incurred as a result of any cash advance obtained by either of them. Because the line of credit was secured by a mortgage on the marital home, Comerica Bank had the right, in the event of a default, to foreclose on the mortgage to satisfy any debt incurred on the line of credit by either Defendant or Debtor.
At the time of their divorce in , neither Debtor nor Defendant had exercised his or her right to take any advances on the line of credit, and so there were no proceeds from the line of credit that became part of the marital estate to be divided into separate property of Defendant and Debtor.
However, because the Divorce Judgment did not say anything about the line of credit, it is possible that after the divorce, Debtor retained the legal right to make draws on the line of credit, even though it was secured by the home that was awarded to Defendant as her sole property. After Defendant and Debtor divorced, only Defendant exercised her right to draw on the line of credit, by taking advances up to the contractual limit. Assuming that after the divorce, Debtor still retained the right to make draws on the line of credit, on the date of filing the petition, the only interest Debtor had in the line of credit was an unexercised right to make a draw on the line of credit up to the contractual limit.
Because the contractual limit had already been reached, however, Debtor's property interest in the line of credit, if any, was effectively worthless on the petition date. So there is nothing for the Trustee to recover from anyone, based on the line of credit. The only common law or equitable theory the Trustee has argued as a basis for recovering half of the cash advance proceeds is, in substance, a theory of unjust enrichment. But this theory fails, because the Trustee cannot establish the required elements of an unjust enrichment claim under Michigan law.
No person is unjustly enriched unless the retention of the benefit would be unjust. Mandeville, Mich. The essential elements of a quasi contractual obligation, upon which recovery may be had, are  the receipt of a benefit by a defendant from a plaintiff,  which benefit it is inequitable that the defendant retain. Michigan Educ. Employees Mut. Morris, Mich. Ford Motor Co. The Trustee argues that both of the elements of an unjust enrichment claim are satisfied under the facts of this case.
She then used that line of credit to obtain money for herself. Arguably, at least, Defendant did receive a sort of benefit from Debtor, in being able to draw on the line of credit. But such benefit cannot be measured by the amount of money Defendant was able to borrow or as one-half of that amount. And it is not unjust for Defendant to retain all of the cash advance proceeds. This is so for two reasons: first, because Defendant's draws on the line of credit were secured by property belonging only to the Defendant her home ; and second, because Debtor ultimately suffered no quantifiable injury as a result of Defendant's drawing on the line of credit.
As to the first of these points, the Court agrees with Defendant's argument that:. To hold otherwise would allow [Debtor] to effectively nullify [Defendant's] property rights in the home by unilaterally drawing on the line of credit and depleting the equity. In the context of this case, requiring the Defendant to pay the Trustee half of the line of credit proceeds would result in a significant payment of Debtor's debts at the expense of Defendant.
1 CA-CV 16-0659 - ZWICKY V. PREMIERE VACATION - 1/23/2018
She would still have the entire mortgage to pay. See Def. Docket 20 at 5. The second point above, that Debtor did not suffer any quantifiable injury because of Defendant's draw on the line of credit, is established by the following: First, Comerica Bank never sought recovery from Debtor of any amounts advanced under the line of credit. Second, beginning when Debtor filed his bankruptcy petition, the automatic stay under 11 U. Third, on July 2, , Debtor received a discharge of his debt to Comerica Bank, so the bank can no longer seek to collect from Debtor.
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Fourth, the Trustee cannot establish, and does not argue, that Debtor's liability to Comerica Bank on the line of credit forced Debtor to file bankruptcy. At the hearing on the motions, Trustee's counsel admitted that he could not say that the debt to Comerica Bank precipitated Debtor's bankruptcy filing, because Debtor had substantial other debts. See Docket 13 in Case No.
For these reasons, the Court concludes that the Trustee cannot prevail on his unjust enrichment theory. And to hold [Debtor] harmless, [Defendant] should now turnover half the money. As things stand, however, [Defendant] is not holding [Debtor] harmless. Instead, as she herself points out, this is a classic case of unjust enrichment. Docket 27 at 4—5. The Court must reject the Trustee's argument. The Trustee fails to explain why this is so, or to cite any authority for such a proposition. Third, and most importantly, and as explained above, the Debtor has not been harmed by the Defendant's draws on the line of credit.
During the hearing on the summary judgment motions, the Trustee requested that if the Court rules against him on his legal theories pled so far, the Court grant him leave to amend his complaint. If the Court rules that the cash advance proceeds are not property of the bankruptcy estate, the Trustee wants an opportunity to allege any cause of action under Michigan law that Debtor may have had against Defendant on the petition date.
The Trustee argues that, as successor in interest to the rights and interests of Debtor, he may have unspecified claims under Michigan law for the harm Debtor suffered from Defendant's drawing on the line of credit. The Court has now ruled that no part of the cash advance proceeds are property of the bankruptcy estate. But the Defendant opposes the Trustee's request for leave to amend his complaint, arguing that it is untimely, and also arguing, at least implicitly, that any amendment would be futile. The Court concludes that the Trustee's delay in making his request has not prejudiced the Defendant in a way that would justify denying leave to amend.
But the Court will deny the Trustee's request, because amendment would be futile. Under Fed. Vehicle Mack Dump Truck, F.
Granting or denying leave to amend a pleading is within the trial court's discretion. See Foman v. Davis, U. A court may deny leave to amend when a party unnecessarily delayed in seeking amendment, thereby causing prejudice to the other party or unduly delaying the litigation. Phelps v. McClellan, 30 F. However, delay alone is insufficient to deny the proposed amendment.
Robinson v. Michigan Consol. Gas Co. Finally, although liberal, it is well established that justice does not require the Court to grant leave to amend a pleading if to do so would be futile. See In re Ford Motor Co. Securities Litigation, Class Action, F. The following background is relevant to the timeliness of the Trustee's oral request for leave to amend his complaint.
The Trustee filed this adversary proceeding on February 3, The Court entered a scheduling order on March 28, After that date, any amendments would require consent of the opposing party, or Court approval. The Court's scheduling order also set deadlines of July 31, for the parties to complete all discovery, and August 15, for the parties to file any potentially dispositive motions.
The order scheduled a trial date of September 6, The court has taken a number of different approaches when this happens. The approaches range from giving all the property to the husband, to dividing it between the putative spouse and husband, or giving the two spouses a quarter and the husband a half.
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Keep in mind that Arizona does not recognize common-law marriages. This means that Arizona will not care if you and your partner were living with each other and acting like a married couple. The court wants evidence of a valid marriage. Usually the court takes a position that it is not there to help those who only cohabitated.