Unclean hands defense precludes constructive trust as remedy for unjust enrichment claims based on an unmarried cohabitant’s investment in property owned by the other.

Shattuck v. Peck, 2013 VT 1 (Burgess, J.)  (Robinson, J., dissenting.)

Defendant appeals from a superior court judgment granting plaintiff  a writ of possession for the parties’ former residence in Cavendish and denying defendant’s counterclaim for an equitable interest in the Cavendish property and another former residence in Springfield. We affirm. 

A court may apply unclean hands doctrine, even where not set up as defense, where “the unconscionable character of a transaction” is plain. The property transfers were intended to circumvent governmental regulations that jeopardized defendants continued eligibility to receive Social Security disability benefits. Although the trial court here did not rule on this issue, there is no factual dispute concerning the intended purpose of the property transfers. The undisputed evidence demonstrates that defendant lacked the “clean hands” necessary for an award of equitable relief. Accordingly, we affirm the judgment on that basis. 

ROBINSON, J., dissenting. These parties were involved in a long-term, committed, intimate partnership. Defendant brought into the relationship substantial equity in the Springfield property and mobile home, and the trial court expressly found that she made a significant contribution to the purchase of the second parcel in Cavendish. Now that the parties’ relationship has ended with plaintiff holding legal title to both properties, the majority declines to address defendant’s claims for equitable relief on the ground that she has “unclean hands.” Because the majority relies solely on its own findings that defendant had a “guilty mind” when transferring her interests in the properties to plaintiff, without consideration of whether defendant actually benefitted from the arrangement, I respectfully dissent.

How cited