United States District Court, D. Vermont
OPINION AND ORDER
WILLIAM K. SESSIONS, III, District Judge.
Plaintiff Ronald Cressy ("Cressy") initially brought seven claims against Defendant Kevin Proctor ("Proctor"): (I) Partnership, (II) Express Contract, (III) Implied Contract, (IV) Imputed Contract/Unjust Enrichment, (V) Promissory Estoppel, (VI) Quantum Meruit, and (VII) Additional Claims Related to Real Property. ECF No. 1. The Court granted summary judgment to Proctor on Counts I and II as well as the express trust claim portion of Count VII. See ECF No. 55, 64. Cressy's claims for unjust enrichment (Count IV) and quantum meruit (Count VI) are not distinct causes of action but rather different measures of damages for the same harm. ECF No. 55 at 20 n.3. At the beginning of trial, counsel for Cressy explained that, in addition to his claims for implied contract and promissory estoppel, Cressy would be seeking damages under the theory of quantum meruit and not unjust enrichment. ECF No. 93 at 8-9. He also conceded that Cressy's additional claims related to real property in Count VII depended on succeeding in either the implied contract claim (Count III) or the promissory estoppel claim (Count IV). Id. at 9. Proctor's Answer presented affirmative defenses and alleged three counterclaims: (I) Tortious Conversion of Property, (II) Tortious Conversion of Cash, and (III) Quantum Meruit. ECF No. 12.
The Court conducted a bench trial that began on April 27, 2015 and concluded on May 1, 2015. Based on the testimony of witnesses, all of the evidence submitted, and arguments of counsel, the Court makes the following findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedure. In brief, the Court rules in favor of Cressy on his quantum meruit claim (Count VI) but rules in favor of Proctor on all of Cressy's remaining claims. The Court rules in favor of Cressy on all of Proctor's counterclaims. The Court will enter judgment consistent with its conclusions and award Cressy damages in the amount of $173, 685.
I. Findings of Fact
The Court heard live testimony from several witnesses in open court and read the stipulated deposition transcripts of others. The Court also reviewed the trial exhibits. There are many sharply disputed factual questions, particularly with respect to the parties' personal relationship. On many occasions, one witness's testimony completely contradicted another's account. Not every factual dispute was equally important, however. The Court limits its factual findings to those that are relevant to its conclusions of law.
A. The Early Years
Proctor began Synergy Advertising ("Synergy") in Long Beach, California in 1990. The business was founded and operated as a sole proprietorship. Synergy's primary business was recruitment advertising and its largest client was (and remained) Apria Healthcare. At one point in the early 1990's Synergy had five employees: Proctor, who focused primarily on business development and client relations; Janet Morrison, who performed a number of functions including billing, account coordination, and sales; an account coordinator; an artist; and a clerical worker. The number of people working for Synergy fluctuated over time and some employees worked only a part-time schedule. Throughout the life of the business, Proctor required his employees to answer the phone whenever possible rather than allow a call go to voicemail. Proctor operated Synergy out of his den in the early years but eventually moved the Synergy office to the garage of his Long Beach property.
Meanwhile, Cressy worked for a women's clothing company, Carol Anderson, Inc., from 1976 to 1994. Cressy was the operations manager and, in that capacity, oversaw the warehouse, purchased raw materials, scheduled production, organized contractors, developed new computer systems as technology became available, and supervised as many as twenty other employees in the warehouse. At the peak of his tenure there he earned a substantial salary, more than $90, 000.
Prior to meeting Proctor, Cressy was married from 1988 to December of 1993. His marriage ended when he came out to his then wife and she filed for divorce. During the divorce process, Cressy cashed out his retirement savings and paid off some of his debts. Afterwards, Cressy had approximately $15, 000 in cash left over plus two vehicles, which he later sold for a total of approximately $9, 000. Cressy used these savings to pay for some of his personal expenses and occasionally to pay for meals early in his courtship with Proctor.
Cressy and Proctor began their romantic relationship in 1993. Because Cressy's living situation was somewhat uncertain in the wake of his divorce, Cressy moved into Proctor's Long Beach home in mid-1993. Soon after, Cressy took paid mental health leave from Carol Anderson for approximately six months. He eventually quit in 1994 and took some time off to recuperate. At the time Cressy moved in, Proctor owned Synergy, his home (without a mortgage), and a collection of antiques. He also held substantial personal savings.
The two continued their romantic relationship for nearly two decades. Cressy and Proctor considered themselves domestic partners and a family. They stayed together out of love and affection but Proctor supported Cressy financially throughout their entire relationship.
B. Cressy Begins to Work for Synergy
Eventually Cressy and Proctor developed a professional relationship in addition to their personal relationship. After moving in with Proctor, Cressy began working for Synergy on a part-time basis, initially as a volunteer. However, his role changed over time and his responsibilities began to increase significantly after Janet Morrison left in 1994. Ms. Morrison was a full-time employee and earned approximately $40, 000 per year. Her compensation included about $10, 000 in commissions she received for bringing in new clients. Ms. Morrison trained Cressy before she left. While she was still employed at Synergy Proctor made all the decisions about how Synergy operated.
After Ms. Morrison left, Cressy began answering phones, handling payables, sending invoices, receiving and organizing tear sheets from newspapers, and handling receivables. Over time, Cressy also took on account coordinator responsibilities, including taking orders from customers, getting quotes from newspapers, placing ads, reviewing previous ads prepared for a client, and researching publications for placing ads. At some point Cressy also began to handle preparing the documents necessary to file Synergy's taxes.
Traci Wilson-Kleekamp, a Long Beach neighbor of Proctor, worked for Synergy part time after Ms. Morrison left. She and Cressy were the only employees aside from Proctor during her involvement with the business. Ms. Wilson-Kleekamp did not typically participate in the day-to-day operations but rather performed various research projects at Proctor's request. She often worked from her own home nearby because she had exclusive use of the phone line there for internet research. Because she had small children, Ms. Wilson-Kleekamp's hours decreased in 1996 and 1997 and she rarely came into the Synergy office after that. She did not, therefore, have the opportunity to regularly observe Cressy's hours in the office. However, at times she heard Cressy refer to Proctor as the "owner" when he answered the phone and observed him logging checks, opening the mail, and faxing insertion orders.
C. The Move to Vermont
In 1996 Proctor decided that he wanted to leave California for a variety of reasons. The Court is persuaded that, contrary to Proctor's assertion that Cressy "begged" him to take him to Vermont, Proctor always intended to take Cressy with him and considered Cressy's views in selecting their new home. See ECF No. 96 at 64. Over an eighteen month period, Cressy and Proctor traveled to New England together look at potential properties. Judy Cashman, Proctor's real estate agent, testified that Cressy was with Proctor every time they met but that only Proctor was her customer. Neither of the two told Ms. Cashman that Cressy would be a buyer or would be included on the title.
In 1998 Proctor selected and purchased a farm in Ryegate, Vermont using proceeds from the sale of his Long Beach home, his own personal savings, and profits from Synergy. Cressy made no individual financial contribution to the purchase of the property and only Proctor's name is on the title. Proctor signed the offer, purchase and sale, and closing documents, and the deed ran only to Proctor. Cressy was not present when the closing documents were signed.
Cressy's testimony that Proctor promised to put his name on the title later is not credible in light of Ms. Cashman's testimony. If Proctor had intended to include Cressy on the title it seems likely that he would have expressed this intention in some way to Ms. Cashman. Moreover, such an arrangement would be inconsistent with the exclusive control Proctor wielded over the couple's finances and Synergy's profits.
Cressy and Proctor moved to the new property over Labor Day weekend of 1998. Prior to moving the two threw out a significant amount of Synergy records. The rest of the records were, for the most part, moved into the home office at the Ryegate property. The office was on the second floor and stairs connected the office to the kitchen.
After purchasing the farm in Ryegate, Proctor eventually purchased six additional adjoining properties over the three years following the initial sale. Cressy was not included on any of the titles for those properties. While Proctor may have referred to the collection of properties he purchased as "ours" in front of Cressy, Proctor never intended to give Cressy a one half interest in the property. The assessed value of the all of the parcels is $967, 000. Cressy's real estate expert, Sal DeMaio, estimated the market value of the entire property is $1, 500, 000.
While in Ryegate, Cressy also spent a significant amount of time helping with farm chores including mowing the lawn, tending to the horses, mending the fences, plowing snow, and other necessary tasks. Cressy also posted signs around the property to forbid hunting and fishing that included only Proctor's name. Proctor participated in the farm responsibilities as well.
At some point Cressy moved Synergy financial records from the house to the main barn next to the house. Eventually Proctor moved these records to the other house on one of the later-purchased properties known as "Sunnyside." Sunnyside burned down in 2011 and the fire destroyed Synergy financial records as well as other personal property. Proctor told a neighbor, Nessa Flax, that he was concerned about all the records that had been lost at the time the house was still smoking.
D. The End of Synergy and the Relationship
From the time of the move to Vermont, the only two full-time Synergy employees were Cressy and Proctor. The business moved towards more of an online model but still did a significant amount of newspaper advertising. Eventually Proctor's father became ill and moved to the Ryegate property. Proctor took primary responsibility for his care and so Cressy took over many more to all of the responsibilities for the business during that time, approximately in 2004.
Proctor wound down Synergy's business operations in February of 2008. After terminating the business, Proctor and Cressy lived off of Proctor's savings and Synergy funds. By 2012, these reserves were depleted and Proctor asked Cressy to pay for some household bills out of his own savings. Shortly after, Cressy left Ryegate and their relationship ended after nineteen years of cohabitation.
Even using the conservative assessed value of the parcels Proctor owns and conservative estimates of the antiques, farm equipment, and other personal property in his possession, Proctor's total assets are worth well over $1 million. A substantial portion of Proctor's personal and real property were purchased with Synergy funds. When Cressy left he had less than $500 in his bank account and no other assets.
During the course of their relationship, Cressy and Proctor never married, never obtained a civil union, and never registered as a domestic partnership, nor did they ever adopt wills or trusts for each other. While the two were aware of and discussed changes in the legal recognition of same-sex marriage, Proctor declined to marry Cressy when Cressy asked after marriage became legal in Vermont. Proctor did make Cressy the beneficiary of a small IRA when Cressy told Proctor ...