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Cumming v. Nipping

Court of Appeals of Oregon

May 3, 2017

Laurie CUMMING, Plaintiff-Appellant,
v.
Laurie NIPPING and Kent Nipping, Defendants-Respondents.

          Argued and Submitted December 17, 2015

         Lane County Circuit Court 161224954; Jay A. McAlpin, Judge.

          James R. Cartwright argued the cause and fled the briefs for appellant.

          Brian J. Millington and Thorp, Purdy, Jewett, Urness & Wilkinson, P. C., fled the brief for respondents.

          Before Ortega, Presiding Judge, and Lagesen, Judge, and Garrett, Judge.

         Case Summary:

         This case arises from a family dispute over a condominium in California, referred to as Seagate. Plaintiff understood that, after the deaths of her father and stepmother, Seagate would pass to her unencumbered, by operation of a family trust. Although plaintiff eventually acquired ownership of Seagate, it was by then encumbered by a deed of trust as a result of stepmother borrowing against the property to purchase a home with defendants. To recover the equity lost by the encumbrance, plaintiff fled a complaint against defendants that included a claim for unjust enrichment. After a bench trial, the trial court denied that claim. Held: The trial court applied an incorrect legal standard in deciding plaintiff's unjust enrichment claim.

         Vacated and remanded as to unjust enrichment claim; otherwise affirmed.

          ORTEGA, P.J.

         This case arises from a family dispute over a condominium in California, which we refer to as Seagate. Plaintiff understood that, after the deaths of her father and stepmother, Seagate would pass to her unencumbered, by operation of a family trust. Although plaintiff eventually acquired ownership of Seagate, it was by then encumbered by a deed of trust. For reasons that we explain below, plaintiff filed a complaint against defendants that included an unjust enrichment claim to recover the equity lost by the encumbrance. After a bench trial, the trial court denied that claim. Having reviewed the record, it appears that the trial court applied an incorrect legal standard in deciding the unjust enrichment claim. Accordingly, because the application of the correct legal standard would require the court to make factual findings and legal determinations that it appears not to have already made, we vacate the judgment as to the unjust enrichment claim and remand for further proceedings, but otherwise affirm.

         We recount facts that are generally undisputed and necessary to our limited disposition. Seagate was originally purchased by plaintiffs parents as their primary residence. Plaintiff is their only child. Plaintiff's mother passed away in the early 1970s and, shortly thereafter, her father married stepmother, who had three children from a prior marriage. Defendant Laurie Nipping is stepmother's granddaughter; defendant Kent Nipping is Laurie's husband.

         Plaintiff's father and stepmother lived at Seagate for the duration of their marriage. Seagate was held in a family trust, of which plaintiff's father and stepmother were trustees. The trust was, at some point, subdivided into Trust A (survivor's trust) and Trust B (decedent's trust). After father's death in 1999, stepmother, as trustee, allocated Seagate specifically to Trust B, which, the parties agree, then became irrevocable.[1] Plaintiff was the sole trust beneficiary. In 2002, stepmother changed the trust beneficiaries to plaintiff and plaintiff's three children.[2] Ultimately, plaintiff understood that Seagate would pass to her upon her stepmother's death.

         After plaintiff's father died, she and her stepmother had no further contact. Stepmother continued to live at Seagate until about 2008, when she moved to Oregon to be nearer to defendants. While in Oregon, stepmother lived in assisted living facilities and rented out Seagate. However, in 2010, during a discussion about stepmother moving in with them, defendants raised the possibility of purchasing a new home with stepmother. Defendants found the Kropf property (Kropf) and suggested that they purchase it together with stepmother. The property, a large farm house, required a cash purchase, as its condition precluded conventional financing. Stepmother took out a loan against Seagate for $300, 000, which corresponded with the Kropf purchase price. To obtain that loan, it appears that stepmother transferred Seagate out of the trust and placed it in her name and then transferred the property back into the trust after she had borrowed against it. Once purchased, stepmother and defendants each had a one-half interest in Kropf. Defendants intended to be responsible for the renovation of the house and indeed contributed labor and funds to restore the property. Stepmother passed away after her first night in the house.

         After stepmother's death, defendants became the sole owners of Kropf. When plaintiff learned of stepmother's passing, she transferred title of Seagate to herself by means that are unclear from the record. Plaintiff later learned that Seagate was encumbered by a deed of trust and that Seagate was ...


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