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  1. #1

    Default How to Prove a Transaction Was a Gift, Not a Loan

    My question involves court procedures for the state of: ohio

    So, my sister's ex boyfriend of 6 years is suing my parents and my sister for breach of contract, unjust enrichment, and trespass to chattels. Does a complaint need to state if Plaintiff is alleging a verbal or written contract and does the complaint need to state the terms of a loan in which the Plaintiff is alleging was breached? My sister and my dad(not my mom, so i still do not know why she was named in this lawsuit) had purchased a home to flip in the amount of $315,000 cash and they had more than enough money to do so, but her ex is alleging that he paid $17,000 for the purchase of that home in a loan(he did give my sis $17,000 but that was when she said he needed to start paying up on all those years he didn't pay her rent as he just got a job making $250,000/yr and had been living in her $400,000 home without paying anything until he passed his CPA and could get a good job). Anyways, the alleged loan took place in 2009 and without knowing what he is claiming were the terms of the loan, they have no way of knowing if they could use the statute of frauds claim to squash it immediately or to spend unnecessary money defending themselves. How do you answer a complaint and list all your defenses if you don't exactly know what they are claiming that you breached?

  2. #2
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    Default Re: Verbal Agreement: Loan vs Gift

    How do you answer a complaint and list all your defenses if you don't exactly know what they are claiming that you breached?
    not sure I understand. Are you saying he filed a complaint with claims as simple as:

    XXXX breached a contract between XXXX and myself. XXXX owes me $$$$ due to the breach.

    His claims have to be precise enough so that one can understand what is being claimed. If they aren't, then the response addresses that.

  3. #3

    Default Re: Verbal Agreement: Loan vs Gift

    He has an attorney, but yeah, the complaint basically states that: plaintiff and defendants entered into an agreement to purchase real property, plaintiff loaned $17,000 to defendants for purchase of real property, plaintiff has demanded repayment of loan, and finally defendants have refused repayment of loan....oh, and defendants were contractually bound to repay the loan of $17,000. Nothing else as to what the contract was or the terms. All defendants have no clue what the plaintiff is referring to as they never had a contract with him escpecially on any real estate transaction.

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    Default Re: Verbal Agreement: Loan vs Gift

    well, this doesn't appear to be that vague:


    plaintiff loaned $17,000

    plaintiff has demanded repayment of loan

    defendants have refused repayment of loan.

    and defendants were contractually bound to repay the loan
    why would you need to know the terms? That is suggesting sister knew it was a loan but simply isn't aware of the terms of the contract.

    You are saying there was no loan. That is the defense.




  5. #5
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    Default Re: Verbal Agreement: Loan vs Gift

    I'm a bit lost. I can't tell if the claim is for a loan to purchase real estate, or if it was a personal loan which is claimed.

    First, there can be a motion for dismissal claiming that the lawsuit is overly broad and vague. You have to decide if that fits.

    Second, if they are claiming the loan was on real estate, the loan has to be in writing. (Statute of frauds.)

    Third, if the loan was for a time longer than a year (Statute of frauds,) or maybe for more than a certain amount in your state it has to be in writing.

    Unable to know from here, I can't say but you can find out if you are entitled to dismissal for any of those reasons.

    Also, I agree, but haven't read documents if any, that your claim that it was a gift may win the day if it isn't in writing.

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    Default Re: Verbal Agreement: Loan vs Gift

    Quote Quoting cmre3456
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    First, there can be a motion for dismissal claiming that the lawsuit is overly broad and vague. You have to decide if that fits.
    If a complaint is so vague that you cannot reasonably answer the allegations, you can bring a motion for a more specific statement. If you answer, but you believe that the plaintiff has failed to state a proper legal action, you can bring a motion for summary disposition. In either case, the plaintiff can amend his complaint to properly state a cause of action, although with S.D. motions that may be by leave of the court.
    Quote Quoting cmre3456
    Second, if they are claiming the loan was on real estate, the loan has to be in writing. (Statute of frauds.)
    The statute of frauds pertaining to real estate transactions would not come into play merely because the lender anticipated that the borrower would use the funds to buy real estate - it's not about unsecured financing. The statute of frauds, O.R.C. 1335.04, states, "No lease, estate, or interest, either of freehold or term of years, or any uncertain interest of, in, or out of lands, tenements, or hereditaments, shall be assigned or granted except by deed, or note in writing, signed by the party assigning or granting it, or his agent thereunto lawfully authorized, by writing, or by act and operation of law."
    Quote Quoting cmre3456
    Third, if the loan was for a time longer than a year (Statute of frauds,) or maybe for more than a certain amount in your state it has to be in writing.
    There would have to be an express agreement that the contract would not be performed within one year - not just an implication or inference - as otherwise it is possible for the contract to be fully performed inside of a year and the statute of limitations would not apply. See, e.g., Cummings v. Groszko, 76 Ohio App. 3d 812 (1992) ("Defendant's statute-of-frauds argument is without merit. There is nothing in the record to suggest that defendant's promise could not be performed within one year from its making. She could have paid back the $4,200 the very day the money was lent.") Even if the statute of limitations applies, the plaintiff may be able to recover through equitable theories - e.g., unjust enrichment, promissory estoppel. Depending on the full facts (and more digging into Ohio law than I have time for at the moment) the doctrine of partial performance may apply which, if applicable, would also take the agreement outside of the statute of frauds.

    It sounds like the boyfriend is covering himself, up front, by claiming both breach of contract and unjust enrichment. (I don't know what the "trespass to chattel" claim is about.)

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    Default Re: Verbal Agreement: Loan vs Gift

    I agree with everything you're saying.

    As I said, all of this is up to her to research and to decide what, if anything fits. I don't even know if there is a written agreement which spells out the terms. I was giving ideas to research.

    As for amending the complaint, I also agree but if the defendant can't understand it, "we" would still file a motion for dismissal and then the plaintiff would be allowed to correct the complaint. That's the only way we could get specificity to argue against.

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    Default Re: Verbal Agreement: Loan vs Gift

    The portion paraphrased above seems pretty easy to understand.

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    Default Re: Verbal Agreement: Loan vs Gift

    I'm only still unsure about

    "Does a complaint need to state if Plaintiff is alleging a verbal or written contract and does the complaint need to state the terms of a loan in which the Plaintiff is alleging was breached?"

    and whether the complaint alleges it was for an interest in real estate or a personal loan. It could make all the difference (especially if it's in writing) as to whether the defendant could claim it was a gift, or claim relief under the statute of frauds.

    Maybe I'm just missing something? It won't be the first mistake I ever made.

  10. #10
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    Default Re: Verbal Agreement: Loan vs Gift

    A complaint does not have to list every factual allegation and detail. It has to raise sufficient facts to support the legal claims, and state the legal claims sufficiently to put the defendant on notice of what the plaintiff is claiming and the relief they are seeking. Besides, we've been told that there are no details to disclose here - there was no agreed repayment schedule.

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