Cooper v. Cooper

In 1983, Brian Cooper and Karen Cooper (plaintiff), a married couple, purchased a home with financial assistance from Brian’s father, Herman (defendant). Title to the house belonged to Brian, Karen, and Herman. Herman had a 50 percent interest in the property as a joint tenant with right of survivorship as regarded Brian and Karen. Brian and Karen had the other 50 percent interest as tenants by the entirety. Initially, Herman paid the mortgage, taxes, and other property-related expenses. In 1986, Brian started making these payments on behalf of the cotenants. In 1992, Karen and Brian began divorce proceedings, and Brian stopped paying the mortgage. The bank holding the mortgage started foreclosure proceedings. Herman and his wife Beatrice (defendant) decided that Beatrice would purchase the mortgage in her name. Herman also converted the joint tenancy into a tenancy in common, eliminating Karen’s right of survivorship to Herman’s property interest. Karen sent letters to Beatrice inquiring about any claims against the cotenants retained by the bank and by Beatrice. Karen asked to meet to discuss the property but received no response. After two years in which no demands for mortgage payments were made, Beatrice notified Herman, Brian, and Karen that the mortgage was in default and that a payment of nearly $100,000 was due in thirty days. After the thirty-day period passed without payment, Beatrice initiated a foreclosure action. Karen counterclaimed against Beatrice on the foreclosure action. The court found that Beatrice and Herman had acted together to purchase the mortgage on behalf of the other cotenants and therefore granted Karen’s motion for summary judgment against the foreclosure on grounds of equity. Karen also crossclaimed against Herman and Brian, arguing that they had violated their fiduciary duties to her as cotenants. The court issued a directed verdict in Brian’s favor. With respect to Herman, the court held that Beatrice was acting as an agent for Herman when she purchased the mortgage and that the purchase had been part of Herman’s plan to avoid duties he owed Karen as cotenant. Further, the court noted Beatrice and Herman’s failure to respond to Karen’s letters and that Herman’s stated purpose for the foreclosure action by Beatrice on his behalf was to punish Karen. The court held that Herman had violated his fiduciary duty to Karen. The jury awarded Karen damages, and Herman appealed.