## Facts

- Frank and Lucy Lewis bought a Platteville, Colorado home in 1986 for $29,500, paid a $5,000 down payment, and took title in their names.
- Their son (Sammy) and his wife (Cassandra) moved in and paid Frank and Lucy monthly amounts equal to the mortgage payment while Frank and Lucy paid the lender.
- Cassandra and Sammy paid other home expenses, made substantial improvements (including an addition), and lived as if they were owners for about fourteen years.
- The trial court found the arrangement’s shared objective was for Cassandra and Sammy to obtain the benefits of homeownership while Frank and Lucy held title due to concerns about Sammy’s ability to qualify for financing.
- After Cassandra and Sammy divorced, Frank and Lucy sold the home for a large gain (about $109,000) and kept all sale proceeds.
- Cassandra sued for restitution, alleging unjust enrichment based on the parties’ shared objective and her contributions; Frank and Lucy claimed the payments were rent under a landlord-tenant relationship.

## Issues

1. What is the proper standard of appellate review for a trial court’s unjust-enrichment determination: de novo or abuse of discretion?
2. In informal arrangements among close family members or confidants, what test determines whether retention of a benefit is “unjust,” and did the trial court permissibly find unjust enrichment on these facts?

## Decision

- The Colorado Supreme Court held that appellate review of a trial court’s unjust-enrichment determination is for abuse of discretion once the correct legal test is applied.
- The Court held that unjust-enrichment claims arising from failed gifts or failed agreements among close family members or confidants should be evaluated by the parties’ mutual purpose.
- The Court reversed the court of appeals, which had applied de novo review and substituted its own assessment of whether the enrichment was unjust.
- The Court reinstated the trial court’s judgment awarding Cassandra restitution measured essentially by the sale proceeds minus the parents’ $5,000 down payment (about $104,000).

## Legal Principles

- Unjust enrichment is an equitable remedy; trial courts have discretion in determining whether enrichment is unjust and in selecting an appropriate restitutionary remedy.
- Appellate courts review unjust-enrichment determinations for abuse of discretion, not de novo, provided the trial court used the correct legal framework and its findings are supported by the record.
- In close-family or close-confidant disputes involving informal financial or property arrangements, courts should determine whether the parties shared a mutual purpose.
- If a mutual purpose existed and one party profited from a significant deviation from that purpose, retention of the benefit is unjust and restitution may be ordered.

## Conclusion

The court required deferential appellate review of equitable unjust-enrichment judgments and endorsed a mutual-purpose framework for informal intra-family arrangements, affirming restitution where title holders kept sale profits that conflicted with the parties’ shared aim that the occupants receive homeownership benefits.


Lewis v. Lewis, 189 P.3d 1134 (Colo. 2008)