In the recent case of Hrit v McKeon, No 317988, 2015 WL 447474 (Mich Ct App Feb 3, 2015), the Michigan Court of Appeals held that a plaintiff failed to state a claim on which relief could be granted when she filed an action for partition of residential real property held by plaintiff and defendant as joint tenants with full rights of survivorship. The factual situation was as follows: plaintiff and defendant lived together in lake-front residential property owned by defendant. They were not married, but were involved in a same-sex relationship for over 30 years. In the early 1990s, defendant conveyed the lake property to herself and plaintiff “as joint tenants with full rights of survivorship.”
Some years later, plaintiff and defendant’s relationship deteriorated. In April, 2013, plaintiff brought an action against defendant to partition the lake property. Plaintiff sought an order from the court that either (1) forced the sale of the property and divided the proceeds equally between plaintiff and defendant, or (2) forced defendant to buy out plaintiff’s interest in the property at fair market value. Defendant responded with a motion for summary disposition (MCR 2.16(C)(8)), claiming that plaintiff had failed to state a claim on which relief could be granted. The trial court agreed, and the Michigan Court of Appeals affirmed. Plaintiff’s partition claim failed.
Wait a minute. Don’t cotenants have a right to partition? Isn’t it an equitable remedy? Look, it’s even codified: “All persons holding lands as joint tenants or as tenants in common may have those lands partitioned.” MCL 600.3304. How could plaintiff fail to state a claim?
While all of this is true, it fails to consider the unique nature of the interests created when property is conveyed using this magic phrase: “joint tenants with full rights of survivorship.” In Michigan, joint tenants with full rights of survivorship hold joint life estates, in addition to dual contingent remainders dependent on one tenant surviving the other. The practical result is best illustrated through example (albeit at the risk of 1L Property flashbacks). Suppose A and B hold Blackacre as joint tenants with full rights of survivorship. On A‘s death, A‘s life estate ends and her contingent remainder fails (because she did not survive B). At the same instant, B‘s contingent remainder becomes vested, i.e., the contingency is satisfied because B survived A. Therefore, B now holds a life estate and a vested remainder in Blackacre. Assuming that these are all the interests in Blackacre, B‘s interests merge into a fee simple absolute.
In light of this and prior Michigan case law on the subject, the Michigan Court of Appeals reasoned that a joint tenancy with full rights of survivorship can only be partially partitioned. In other words, a court can order the division of the joint life estates, but such a division does not and cannot affect the dual contingent remainders; they are indestructible. The result is not very satisfying. Using the earlier example, if B sold her interest in Blackacre to C while A was still alive, C would only take a life estate in Blackacre measured by B‘s life (a life estate pur autre viefor you property nerds out there). A‘s contingent remainder would not be affected. Therefore, if Bwere to die before A, C‘s interest would end and A (through the same process described in the first example) would hold Blackacre in fee simple.
Applying this logic to the facts of the case, the Court found that plaintiff’s suggested resolutions were not practicable. Specifically, the Court could not order the property sold and the proceeds divided because there was not a market for life estates pur autre vie in residential real property. Who would want to buy a property interest that ended when another person died, and even if someone did, how would it be valued? For the same reasons, the Court could not order defendant to buy plaintiff’s interest, as there was no market to determine fair market value. Finally, because the property was residential, it was not amenable to any sort of physical partition. Therefore, the “only remedy available” to plaintiff was to literally exercise her survivorship rights and outlive defendant—essentially, plaintiff failed to state a claim for relief.
Of course, this issue is complicated by the fact that plaintiff and defendant were not (and could not legally be) married in Michigan. Generally, a husband and wife in Michigan hold property together as “tenants by the entirety.” This interest functions similarly to a joint tenancy with full rights of survivorship, but it can be successfully partitioned or divided by a decree of divorce. Therefore, even though this issue may be largely resolved in the coming months, it is worth remembering that a joint tenant with full rights of survivorship cannot state a claim for partition against the other—at least where the parties are unmarried and residential property is at stake.