Update: The merit decision in this case was handed down on February 23, 2012. Read the analysis here.
Can resuming a romantic relationship be legal consideration for a contract? The Supreme Court of Ohio will hear argument on this issue on September 20 in Williams v. Ormsby.
Plaintiff Amber Williams owned a home in Medina County, and in 2004, she allowed her then-boyfriend, Defendant Fredrick Ormsby, to move in with her. The two soon decided to become engaged. Ormsby paid off the $310,000 mortgage debt that Williams owed on the property, and in exchange, Williams transferred ownership to Ormsby and gave him the deed to the property, which was recorded.
The relationship between the parties deteriorated. In March of 2005 they signed a contract to lay out their respective interests in the property. They agreed that the house should be sold. The first $324,000 of the net proceeds would be paid to Ormsby to reimburse him for what he had already paid, and anything over that amount would go to Williams. The parties also agreed on how they would handle the expenses of the house until it was sold.
In 2005, the couple ended their engagement. Later, though, the two decided to try and reconcile. Williams told Ormsby that the only way she would move back into the house was if he would grant her a one-half interest in the property. Ormsby agreed and in June of 2005, they drew up a contract that made them “equal partners” in the property and entitled to equal shares in the event that they split up again. That contract was in writing and was recorded.
After two more years of living together, Williams and Ormsby ended their relationship for the final time in 2007, and in 2008, Ormsby moved out of the house.
Williams brought suit to enforce the June 2005 contract, and to receive her half share of the property that they owned together. Ormsby countered with a summary judgment motion, arguing that their contract was invalid.
The trial court found for Ormsby, concluding there was no valid consideration in the June 2005 contract. The Ninth District Court of Appeals reversed, finding that there was valid consideration in the June 2005 contract. Williams’ promise that she would live with and have a relationship with Ormsby in exchange for half of the property satisfied the requirements of consideration for a contract. The appeals court also was influenced by the fact that this case did involve a formal, written contract.
The appeals court also did not buy Ormsby’s other argument – that even if there was valid consideration, the contract was premised on the parties marrying, and since that did not occur, it was invalid. The court made quick work of dismissing this claim, concluding that nowhere in the contract does it state specifically that the parties had to marry for Williams to be entitled to her one-half share of ownership.
Ormbsy argues that Ohio has never recognized love and affection as consideration for a contract, and should reject the argument that resuming a romantic relationship can serve as consideration for a contract. He argues that binding parties to a contract based on cohabitation coupled with a relationship sounds a lot like palimony, which Ohio doesn’t recognize.
Williams argues this is a simple, straightforward contracts case, clear and unambiguous in its terms, in writing, supported by mutual consideration, that two adults freely entered into. She argues that the court of appeals decision should be affirmed.