Attorney Alicia McConnell sorts the facts from assumption when it comes to business assets and break-ups.
I started a business five years ago. It is a courier service. Two years ago, I needed to expand and hire another driver. My boyfriend at the time offered to a buy a car for my business to use. He purchased it, and promptly handed it over to me. Recently, after seven years together, we broke up. My ex-boyfriend is now demanding the vehicle be returned to him. True, the car title and loan for the vehicle are in his name, but it was always intended to be mine for the use of my business. He allowed me to pick out the car, add a wrap to the car’s exterior promoting my business, heck, my business even pays for the insurance on the car. He has never even sat in the driver’s seat, once! When he bought it for my business, he did not say, “you can use this till we break up”. I believe this is an asset of my business. I admit it became an asset through gifting- but it was not a gift that had strings attached. I do not believe I should have to pay him for the car any more than I believe he owes me money for things I bought for him over the course of our relationship. My ex is telling me that if I do not hand the car over to him soon, he is going to sue me. Can he do that? Isn’t there some sort of rules or laws out there about how long you must take a gift back from a business?
Confused & Car-less
Dear C & C
I am sorry to hear about your situation. Unfortunately, from the facts you have provided, it seems that you likely do not have a right to keep the vehicle. In New Mexico, a valid gift must contain the following: (1) property subject to gift; (2) a donor competent to make the gift; (3) the intent on the part of the donor to give the gift; 4) delivery of the gift; (5) acceptance of the gift; and (6) a present gift fully executed. Here, if your ex-boyfriend claims that he never intended the vehicle to be an actual gift, unless you have some sort of evidence to the contrary, it may be difficult to prove otherwise. My biggest concern in this case, however, would be with the last requirement, as your ex-boyfriend has always retained title to the vehicle. Because the vehicle is titled in his name and he never transferred the title to you, he never really fully executed the gift and has remained the owner, even if he allowed you or your business to use it for the past two years. The fact that a vehicle’s ownership is evidenced by a title is also what differentiates this from gifts that you may have given to one another throughout your relationship. When you give someone a watch or a jacket as a gift, generally, there is not any paperwork required to actually transfer ownership of the item. Those gifts were executed when you offered them to him, he accepted them, and took possession of them.
If you decided to keep the vehicle and he were to sue you, you might be able to claim a defense of promissory estoppel based on the fact that you spent money to add your busines wrap to the vehicle based on your reliance on his promise to give you the vehicle as a gift. Because these types of wraps are usually not terribly expensive and are easily removable, however, this argument is not likely to get you very far. In addition, you would still be required to present proof showing that he intended to give you the vehicle as a gift, which, as discussed above, would likely be difficult if he denies that he ever intended to do so.
Lastly, as a practical matter, even if you were to keep the vehicle, and your ex decided not to file suit, you may not be in the clear. If he stops making the payments, the vehicle could be repossessed. This could happen when you least expect it, which in turn could disrupt your business operation, particularly given the nature of your business.
Do you have some business assets of which exact legal ownership could be in dispute? Contact us today so we can help you ensure the property you need to stay in business, stays with the business, regardless of how your personal relationships may change.