## Facts

- Sue Ann Watts and James E. Watts cohabited for about 12 years in a marriage-like relationship, held themselves out as spouses, and had two children.
- The plaintiff used the defendant’s surname; the children also used his surname.
- The parties filed joint tax returns, maintained joint bank accounts, and obtained insurance coverage describing the plaintiff as the defendant’s wife.
- The plaintiff alleged she provided extensive homemaking and childcare services and worked part-time in the defendant’s office as a receptionist, typist, and assistant bookkeeper.
- The plaintiff alleged her domestic and business contributions increased the parties’ wealth, that she was not compensated, and that the defendant represented she would share equally in the accumulated wealth.
- After the relationship ended, the plaintiff alleged the defendant kept essentially all accumulated property and excluded her from further work in his business.

## Issues

1. Whether an unmarried cohabitant may obtain an equitable property division under Wisconsin’s divorce property-division statute, or prevent the other party from asserting nonmarriage through estoppel.
2. Whether public policy bars enforcement of express or implied-in-fact agreements between unmarried cohabitants when the relationship included cohabitation.
3. Whether an unmarried cohabitant may recover in unjust enrichment, including through constructive trust or related equitable relief, for benefits conferred during the relationship.
4. Whether partition is available to divide assets when the plaintiff can show an ownership interest derived from contract or equitable theories.

## Decision

- The Wisconsin Supreme Court held the divorce property-division statute applies only to married persons; the plaintiff had no statutory claim for equitable division, and estoppel could not extend the statute to nonmarital relationships.
- The Court held an unmarried cohabitant may pursue breach of express or implied-in-fact contract claims if supported by consideration independent of sexual services; public policy does not bar such claims.
- The Court held unjust enrichment claims are available between unmarried cohabitants when one attempts to retain an unreasonable amount of property acquired through the efforts of both; the complaint adequately pled unjust enrichment.
- The Court held partition may proceed to the extent the plaintiff can establish a legal or equitable ownership interest (including one arising from constructive trust or similar equitable relief).
- The Court reversed the dismissal for failure to state a claim and remanded for further proceedings.

## Legal Principles

- Wisconsin’s divorce property-division statute authorizes property division only in divorce, annulment, or legal separation and does not create a cause of action for unmarried cohabitants.
- Estoppel cannot create a marriage or expand a marital statute beyond its legislative scope.
- Cohabitation agreements are enforceable when supported by lawful consideration independent of sexual relations; agreements founded on sexual services as consideration are unenforceable.
- Unjust enrichment requires: (1) a benefit conferred on the defendant by the plaintiff, (2) the defendant’s knowledge or appreciation of the benefit, and (3) acceptance or retention under circumstances making retention without payment inequitable.
- When unjust enrichment is shown, equitable remedies such as constructive trust, accounting, or restitution may be used to determine the claimant’s share of property.
- Partition is a remedial mechanism available when the claimant can prove an ownership interest; it does not itself create property rights absent a legal or equitable basis.

## Conclusion

The court rejected statutory marital property division and estoppel for unmarried cohabitants, but allowed claims based on contract and unjust enrichment (and related equitable remedies), reversing the pleadings-stage dismissal and remanding for fact development and adjudication of the asserted property interests.


Watts v. Watts, 137 Wis. 2d 506, 405 N.W.2d 303 (Wis. 1987)