Gloria Rivera v. Elkin Ahumada, et al (2009)

MEMORANDUM OF DECISION

Plaintiff Gloria Rivera brought this summary process action by Complaint dated April 7, 2009 against defendants Elkin Ahumada and Claudia Ahumada predicated upon on a Notice to Quit served on March 31, 2009.   Defendants filed a Motion to Dismiss dated May 15, 2009, which the court denied by Memorandum of Decision dated June 11, 2009.   Defendants then filed an Answer and Special Defense dated August 3, 2009.   Trial was held before the court on August 6th and August 14th 2009.   The parties' attorneys presented closing arguments to the court on September 9, 2009.

I

Findings of Fact

1) Plaintiff Gloria Rivera and defendant Elkin Ahumada are brother and sister.

2) Defendants Elkin Ahumada and Claudia Ahumada are husband and wife.

3) Prior to June 21, 2005, defendants had attempted to purchase a home, but repeatedly failed to qualify for financing.

4) As a result of defendants' difficulties procuring financing, plaintiff agreed to purchase a single-family house located at 74 Nicole Court, East Haven, Connecticut and secure financing on behalf of the defendants.

5) Pursuant to the aforementioned agreement, defendants agreed to make the down payment on the house, pay the closing costs, and make the payments on the mortgage.

6) It was the intention of the parties that plaintiff would transfer legal title to defendants once they procured financing and paid off the mortgage.¹

7) The aforementioned agreement between the parties was never reduced to writing.

8) Plaintiff closed on the house and took legal title on June 21, 2005 with defendants making the down payment of $35,000.00 and paying the closing costs.

9) Defendants have resided in the house since the closing.

10) Defendants made the monthly mortgage payments until March 2009.   They have made no further payments on the mortgage.

11) By complaint dated June 17, 2009, U.S. Bank initiated foreclosure proceedings against plaintiff, an action that remains pending.

II

Discussion of Law

Plaintiff seeks to evict defendants, her brother and sister-in-law, from a single family residence to which she holds legal title.   This unfortunate scenario results from an oral agreement between the parties pursuant to which plaintiff agreed to purchase the property on behalf of defendants and secure financing and defendants agreed to pay the down payment, closing costs, and make the mortgage payments.   This ill-advised arrangement succeeded for almost four years, until defendants ceased making the monthly mortgage payments.

Defendants argue that because they possess a title interest in the premises pursuant to the doctrine of “resulting trust,” they cannot be evicted from the premises.   An eviction may not be ordered where a defendant “show[s] a title in himself existing at the time the notice to quit possession or occupancy was served on him ․” Connecticut General Statutes § 47a-26d.   As a result, the determinative issue in this matter is whether circumstances surrounding the conveyance of the property evidence the creation of a “resulting trust.”

“The law on resulting trusts in Connecticut is well settled.   Resulting trusts arise by operation of law at the time of a conveyance when the purchase money for property is paid for by one party and legal title is taken in the name of the other.”  Farrah v. Farrah, 187 Conn. 495, 500 (1982).²  The facts presented at trial demonstrated that the parties' actions at the time of the conveyance clearly meet the resulting trust standard as the defendants made all payments related to the property and assumed the responsibility for making the monthly mortgage payments.

Plaintiff argues that the doctrine of resulting trust does not apply in this case because the agreement between the parties violates the statute of frauds.   However, “[t]he statute of frauds does not extend to implied trusts because the intent is evidenced by conduct rather than language.”  Id. In addition, plaintiff maintains no trust was created because defendants did not pay the full purchase price at the time of conveyance.   This argument was also dealt with and rejected by the court in Farra h:  “The alleged payor need not prove that he paid cash;  a real obligation to pay which existed at the time title passed will suffice.   If the [payors] had met their burden of proving that the [title owners] had agreed to lend their credit to the [payors], then a resulting trust would have arisen in the [payors] at the time of conveyance to the [title owners].”  Id.³

The court finds that the actions of the parties at the time of conveyance supported the creation of a resulting trust.   As a result, defendants hold a title interest and cannot be evicted from the property.⁴  Judgment shall enter in favor of the defendants.

W. Abrams, Judge

FOOTNOTES

FN1. The parties offered divergent testimony on the issue of whether defendants promised to take title to the property within one year, an obligation they could not perform given their repeated unsuccessful attempts to procure financing.   Given that fact that the resolution of this issue has no bearing on the court's decision, it declines to make any finding in this regard..  FN1. The parties offered divergent testimony on the issue of whether defendants promised to take title to the property within one year, an obligation they could not perform given their repeated unsuccessful attempts to procure financing.   Given that fact that the resolution of this issue has no bearing on the court's decision, it declines to make any finding in this regard.

FN2. The factual scenario in the Farrah case is remarkably similar to the one at issue, although the court did not find a resulting trust based on its finding that the title owners paid the full purchase price.   The contrary is true in this matter, however, as the evidence clearly demonstrated that plaintiff never made any payments relating to the property..  FN2. The factual scenario in the Farrah case is remarkably similar to the one at issue, although the court did not find a resulting trust based on its finding that the title owners paid the full purchase price.   The contrary is true in this matter, however, as the evidence clearly demonstrated that plaintiff never made any payments relating to the property.

FN3. Plaintiff cites Zack v. Guzauskas, 171 Conn. 98 (1976), for the proposition that a resulting trust is not created where a loan is involved.   However, this holding appears to apply only in cases where the loan is from the title owner rather than from a third party..  FN3. Plaintiff cites Zack v. Guzauskas, 171 Conn. 98 (1976), for the proposition that a resulting trust is not created where a loan is involved.   However, this holding appears to apply only in cases where the loan is from the title owner rather than from a third party.

FN4. This action only deals with the issue of possession of the premises and should not be construed as authority for the proposition that legal title should pass to defendants, as plaintiff is entitled to retain legal title until such time as defendants satisfy the existing mortgage.   Farrah, supra, 501..  FN4. This action only deals with the issue of possession of the premises and should not be construed as authority for the proposition that legal title should pass to defendants, as plaintiff is entitled to retain legal title until such time as defendants satisfy the existing mortgage.   Farrah, supra, 501.

Abrams, James W., J.