        DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

                              LENORE MAIO,
                                Appellant,

                                     v.

                            PATTI D. CLARKE,
                                Appellee.

                              No. 4D17-2305

                           [September 12, 2018]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Karen M. Miller, Judge; L.T. Case No. 50-2016-DR-008059-
XXXX-NB.

  Jeffrey M. Clyman, Millie Orrico and Trent Steele of Steele Law, Hobe
Sound, for appellant.

  Caryn A. Stevens and Eddie Stephens of Ward, Damon, Posner,
Pheterson & Bleau, West Palm Beach, for appellee.

CIKLIN, J.

   Lenore Maio (“Lenore”) appeals an amended final judgment of
dissolution of marriage and raises a number of issues. Lenore argues that
the trial court erred in failing to find that an oral cohabitation agreement
existed before she and her former spouse, Patti Clarke (“Patti”), were
married, and that the trial court erred in awarding attorneys’ fees to Patti
as a sanction. We affirm the trial court’s determination with respect to the
oral cohabitation agreement. But, we reverse the award of attorneys’ fees
and we remand for the trial court to make required findings, if it is able to
do so, and to modify the award as we explain.

             Oral Cohabitation Agreement and Constructive Trust

   The two women lived together and shared expenses for a number of
years before marrying and divorcing. During their cohabitation and after
they married, the women executed testamentary documents leaving their
assets to one another. Throughout their cohabitation and marriage, the
parties maintained individual bank accounts. Patti testified that she was
unaware that Lenore had opened up joint accounts for the women.
According to Patti, the parties did not pool their income and assets. Each
month, Patti gave Lenore $3,000, an amount representing a portion of her
income, to be used to pay a share of household expenses.

   Lenore owned a home. Two years after the parties married, Lenore
wanted to refinance the mortgage loan by placing Patti’s name on the
mortgage. Patti agreed to help facilitate the refinance, but only if her name
was placed on the deed. Patti’s credit and income information was used
to obtain a refinance of the loan. Patti was added to the mortgage and
Lenore transferred a half share of her interest in the property to Patti.

    In the divorce proceedings, Lenore sought one half of Pattie’s premarital
retirement earnings and sought to have a constructive trust imposed on
the retirement account. Lenore claimed that during their premarital
cohabitation, the parties pooled their assets, and that Patti promised that
her premarital retirement earnings would fund their golden years.
However, Patti denied Lenore’s claims.

   The trial court rejected Lenore’s testimony.

    “The existence of an oral contract is an issue for the finder of fact. An
appellate court reviews a trial court’s factual findings for competent
substantial evidence.” Armao v. McKenney, 218 So. 3d 481, 485 (Fla. 4th
DCA 2017) (citation omitted). “[A] party who asserts an oral contract must
prove its existence by a preponderance of the evidence.” St. Joe Corp. v.
McIver, 875 So. 2d 375, 381 (Fla. 2004). “Florida law recognizes that
unmarried cohabitants may agree to enter into an enforceable contract
that establishes rights and responsibilities towards each other ‘as long as
it is clear there [is] valid, lawful consideration separate and apart from any
express or implied agreement regarding sexual relations.’” Armao, 218 So.
3d at 484 (alteration in original) (citation omitted).

   The trial court explicitly indicated in the amended final judgment that
it did not believe Lenore’s testimony regarding the parties’ purported
understanding. That makes this case distinguishable from Armao, 218
So. 3d at 485 (affirming trial court’s finding that parties entered into an
oral cohabitation agreement where evidence established that parties
agreed to pool “all their income, investments, assets, and inheritances”
and use the funds “to pay their current and future expenses”). Instead,
the trial court believed Patti. Her testimony established that the parties
shared expenses, but that their income and assets were not pooled.



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   We also affirm the trial court’s decision not to impose a constructive
trust on Patti’s retirement account. “A constructive trust is one raised by
equity in respect to property which has been acquired by fraud, or where,
though acquired originally without fraud, it is against equity that it should
be retained by him who holds it.” Provence v. Palm Beach Taverns, Inc.,
676 So. 2d 1022, 1025 (Fla. 4th DCA 1996) (citation omitted). “[A]
constructive trust is a remedial device with dual objectives: to restore
property to the rightful owner and to prevent unjust enrichment.” Id. “To
impose a constructive trust, there must be (1) a promise, express or
implied, (2) transfer of the property and reliance thereon, (3) a confidential
relationship and (4) unjust enrichment.” Id. Because the trial court
believed Patti, the facts did not support imposition of a constructive trust.

                       Attorneys’ Fees as a Sanction

   Although we affirm the final judgment to the extent Lenore was not
awarded a share of Patti’s premarital retirement earnings, we reverse the
portion of the judgment awarding Patti attorneys’ fees as a sanction. The
award of fees was made pursuant to Rosen v. Rosen, 696 So. 2d 697 (Fla.
1997). The trial court erred in awarding Rosen fees to Patti as a sanction,
as Patti did not plead a need for fees. See Hallac v. Hallac, 88 So. 3d 253,
259 (Fla. 4th DCA 2012) (recognizing that in the Rosen context, a trial
court may not award fees to a party based on vexatious litigation where
the “primary criteria” of section 61.16 are not met: need and ability to
pay).

    Although Rosen fees were not permissible, a trial court has the inherent
power to award fees “where one party has exhibited egregious conduct or
acted in bad faith.” Id. (quoting Bitterman v. Bitterman, 714 So. 2d 356,
365 (Fla. 1998)). However, “[s]uch awards are rarely applicable and should
be reserved for extreme cases in which a party litigates vexatiously and in
bad faith.” Id. Further, the court must “make an express finding of bad
faith and include facts justifying the imposition of the award.” Id.

    Here, the trial court’s findings either lacked merit or did not rise to the
level of a finding of bad faith. Fees were awarded based in part on the trial
court’s belief that Lenore’s oral cohabitation agreement and constructive
trust claims were barred by specified statutes. But they were not. The
trial court also found that Lenore’s financial affidavit was fraudulent
because she listed expenses she was not paying. This finding is contrary
to the evidence, namely Lenore’s financial affidavit, wherein she noted that
many of the expenses were not currently incurred. The trial court based
fees in part on a finding that a claim Lenore made in her petition conflicted
with another claim. But the claim was made in the alternative, which is

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entirely permissible. See Fla. R. Civ. P. 1.110(g). The trial court relied on
Patti’s claim that she would have settled the case had Lenore’s attorney
provided case law supporting her oral cohabitation and constructive trust
claims. Patti’s attorney is board certified, and Lenore’s claims had a clear
basis in the law. This finding does not establish bad faith.

    The trial court also based fees in part on Lenore’s withdrawal of her
alimony claim shortly before trial, a basis which could support an award
of fees as sanctions if the trial court made the required bad faith findings.
We reverse the fees award and remand to the trial court to make the
necessary bad faith findings, if it can, supporting its award of fees based
on the withdrawal of the alimony claim, and to limit any award of fees to
time spent on the alimony claim.

   Lenore’s remaining arguments on appeal are either moot based on the
foregoing analysis or without merit.

   Affirmed in part, reversed in part, and remanded for further proceedings
consistent with this opinion.

GERBER, C.J., and GROSS, J., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.




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