Richardson v. Carolina Bank

MARTIN (Robert M.), Judge. This appeal presents two questions, the most important question being whether the trial court erred in granting defendant’s motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. We hold that the trial court erred in granting defendant’s Rule 12(b)(6) motion, since plaintiff’s complaint sets forth a cause of action for unjust enrichment. The facts in this case are similar to those in Fulp v. Fulp, 264 N.C. 20, 140 S.E. 2d 708 (1965). In that case the husband and wife placed improvements on land titled in the husband’s name only. The husband agreed that he would add the wife’s name to the deed if she would contribute one-half of the cost of the improvements. The wife paid one-half the costs of the improvements and then asked that the property be titled in both their names, but the husband refused to change the deed. The parties separated in 1959 at which time the wife brought an action to impose a resulting or constructive trust, or in the alternative, to recover her contributions to the cost of the improvements. Justice Sharp (later Chief Justice), speaking for the Court, found the theories of resulting trusts and constructive trusts inapplicable to that fact situation, since the wife’s funds had not been used by the husband to acquire title to realty. Id. at 22, 140 S.E. 2d at 711. Instead, the court found the wife’s evidence sufficient to establish an equitable lien. In describing this remedy it stated “An equitable lien, or encumbrance, is not an estate in land, nor is it a right which, in itself, may be the basis of a posses-sory action. It is simply a charge upon the property, which charge subjects the property to the payment of the debt of the creditor in whose favor the charge exists.” Id. at 24, 140 S.E. 2d at 712. *496 The court further stated that the remedy “results only where there are factors invoking equity, here the confidential relationship.” Id. at 25, 140 S.E. 2d at 713. While, in the present case, the plaintiff and Richardson were not husband and wife at the time plaintiff contributed to the cost of improvements placed on Richardson’s land, we feel that their relationship was so similar to the confidential relationship found in Fulp that we are compelled to invoke the equitable lien doctrine. In another similar case where husband and wife had divorced, the husband sought to recover the value of improvements he had made to the wife’s property during the marriage. Parslow v. Parslow, 47 N.C. App. 84, 266 S.E. 2d 746 (1980). The facts did not disclose any express or implied communication on the part of the wife indicating she was willing to add her husband’s name to the record of title. The Court of Appeals held that where the plaintiff possessed a good faith belief that plaintiff owned or would own an interest in the value of the improvements made by plaintiff on defendant’s property and the improvements inured to defendant’s benefit, plaintiff had a claim sufficient to support an equitable lien under the unjust enrichment doctrine. “No contract, oral or written, enforceable or not, is necessary to support a recovery based upon unjust enrichment.” Id. at 88-89, 266 S.E. 2d at 749. We hold that plaintiff’s action should not have been dismissed, as the complaint contained enough information to set out a cause of action for unjust enrichment. Plaintiff should be allowed to prove, as in Parslow, that she possessed a good faith belief that she owned or would own an interest in the value of the improvements made by plaintiff to defendant’s property. Since we hold that the theory of constructive trusts is not applicable to these facts, we find no prejudicial error in the trial court’s denial of plaintiff’s motion to amend her complaint to include a prayer for imposition of a constructive trust. With respect to the plaintiff’s appeal from the judgment dismissing the complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), we hold that the judgment of the trial court was in error. The judgment is therefore *497 Reversed and remanded. Judges Arnold and Whichard concur.