## Facts

- Roy Eddie Merrill and Pamela Davis first married in November 1965.
- The parties divorced in February 1973.
- About five months after the 1973 divorce, they began living together again and cohabited for several years without remarrying.
- During the cohabitation period, the parties maintained a joint bank account, lived as husband and wife, and Merrill discontinued court-ordered child-support payments while the household functioned as a family unit.
- While cohabiting but still unmarried, Merrill purchased 100% of the stock in Davis Tractor Company and operated the retail tractor business.
- During the same period, the parties held land as tenants in common, and Merrill began constructing a house on that property.
- Merrill paid $18,000 toward the land and house materials using proceeds from the sale of a house that had been awarded to him as separate property in the 1973 divorce decree.
- The parties remarried in February 1978, separated permanently in November 1978, and a second divorce decree was entered in 1982.
- In the second divorce, the district court rejected Davis’s claim that an implied agreement during cohabitation made the tractor-company stock jointly owned, and it recognized Merrill’s $18,000 separate-property lien against the tenancy-in-common property.
- The district court also denied Davis alimony, and Davis appealed to the New Mexico Supreme Court.

## Issues

1. Whether the parties’ post-divorce, pre-remarriage cohabitation (including a joint bank account, living as spouses, and discontinued child support) was substantial evidence of an implied agreement to pool earnings and share property acquired during cohabitation, giving Davis an interest in the tractor-company stock and defeating Merrill’s $18,000 separate-property lien.
2. Whether the district court abused its discretion by denying Davis alimony in the second divorce.

## Decision

- Affirmed the district court’s refusal to find an implied agreement to share property based on the parties’ cohabitation and related conduct; Davis received no ownership interest in the tractor-company stock.
- Affirmed the district court’s recognition of Merrill’s $18,000 separate-property reimbursement lien because the contribution was traced to his separate property.
- Affirmed the denial of alimony because the record supported the district court’s decision and there was no abuse of discretion.

## Legal Principles

- Cohabitation, even when coupled with a joint bank account, living as husband and wife, and informal changes in support practices, does not by itself constitute substantial evidence of an implied contract to pool resources and share post-divorce acquisitions.
- A court will not infer an agreement to create marital-like property rights from conduct alone when the evidence does not show the essential elements of a contract.
- Dominguez v. Cruz was distinguishable because it involved an express oral agreement; Merrill did not decide whether an express agreement between unmarried cohabitants can create marital-like property rights.
- Separate funds used to acquire or improve jointly titled property may support a reimbursement lien when the separate source is traced.
- Alimony determinations are reviewed for abuse of discretion, and an appellate court will uphold a denial when supported by the evidence.

## Conclusion

The New Mexico Supreme Court affirmed the second divorce judgment, holding that the parties’ post-divorce cohabitation and shared household practices were not substantial evidence of an implied agreement to share property acquired during that period; accordingly, Merrill kept the tractor-company stock as his separate property, his traced $18,000 contribution supported a separate-property lien against the jointly held real estate, and the trial court’s denial of alimony was not an abuse of discretion.


Merrill v. Davis, 673 P.2d 1285 (1983)