Did you ever wonder what happens when two unmarried people split up and then argue over who should get what? A recent Wisconsin Court of Appeals case, Leonard v. Lynn, 2009AP2026, for which the Wisconsin Supreme Court denied certiorari on January 11, 2011, gives us the answer, which may surprise many.
This couple had lived together for several years. While together, they had invested in a number of pieces of real estate, including a motel and providing substantial improvements to Richard’s home. Richard handled much of the rehab construction work they did on the properties, while Elizabeth handled the bookwork, managed the finances and the motel, and did the decorating. Richard argued that the court should have analyzed each asset separately. The Court of Appeals held that it was proper for the court to view the "joint enterprise" as a whole, recognizing that each party contributed in his or her own manner. The trial court awarded Richard his equity as of the beginning of the cohabitation, but equally divided the increase in value from that point forward, in recognition of the joint efforts of each of them.
The court also awarded Elizabeth prejudgment interest, which the court found equitable in light of Elizabeth’s lack of access to the assets after the couple split up.
This case occurred at a time when real estate prices were increasing. It would be interesting if prices had dropped to see whether Elizabeth would also have been therefore responsible for half the loss and would have had to "pay" Richard as she departed the relationship.