ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Friday, February 26, 2021

A Messy – but Fashionable – Dispute Among (Former) Friends

The New York Time’s Style Section had an article about André Leon Talley’s legal troubles with George Malkemus, the former head of Manolo Blahnik USA, and Anthony Yurgaitis, his business partner and husband.  According to the article, the couple bought a house in 2004 for $1million and agreed that Mr. Talley would occupy it and pay a certain amount each month.  They said that the monthly payment was “rent” and the three signed a two-year lease agreement which was renewable for up to eight more years.  The lease expired in 2014 and was not re-signed.  Talley continued paying monthly, but the amount varied “widely depending on his income.  In November 2020, Malkemus and Yurgaitis filed to evict their (former) friend.  But in January, Talley filed a counterclaim which claims that Malkemus and Yurgaitis bought the house and held the mortgage as “proxies” for him.  They did this, according to Talley, because his ability to get a mortgage was “complicated” by several previous personal bankruptcies.  Talley further claimed that the monthly payments by him were an “equity investment” which was intended to allow him to own the house.  His petition claims that he has paid nearly $1million ($955,558), and requests that the house be placed in trust until he can prove his ownership.  Malkemus, on the other hand, argues that it is his house, and that Talley owes him nearly half a million dollars (presumably in back rent).  To make this an even better final exam fact pattern more complex situation, Talley claims that he spent $12,000 on a new boiler and $30,000 on a new roof for the property.  He also claims that, back in 1999, Malkemus bought a car for Talley who, for unspecified reasons, was “unable” to do it for himself.  At that time, Talley wired the money to Malkemus who then went to the dealership to purchase the vehicle for Talley.  Talley is claiming this is “precedent” for the current situation.

What a mess – and one that is absolutely bursting with contract issues!  The Statute of Frauds rears its head as does the parol evidence rule. There is also the issue of consideration – what was Malkemus getting in return for going through all this trouble for Talley?  There are also interesting restitution and implied contracts questions.  Of course, there are interpretation and contractual intent discussions to be had.  Alas, in the end, I think – at least based on the article and a quick skipping through of the contract issues – Talley has a tough case to prove without anything in writing to evidence the arrangement existed.  Perhaps more facts will come to light, but without more, it looks to me like a gift that, over time, created expectations of entitlement.

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I agree. Talley seems like he may end up sleeping in an alley at the end of this—not that I wish homelessness on anyone.

Like you said, nearly all the evidence—and certainly the agreement itself—seems a lot more consistent with a lease arrangement that just kept going by inertia after the agreement lapsed. And prior to expiration, it appears they were following the written lease for around a full decade. The investments in repairs were pretty substantial, but presumably the couple would argue that he made those investments as a renter, so it's still fine for him to get evicted, as long as he's also reimbursed for the costs.

One possible factor in his favor is that he claims to have paid almost the entire purchase amount. You wouldn't normally expect that kind of behavior if someone is just renting. So if he can substantiate that it might help somewhat.

Posted by: hardreaders | Feb 26, 2021 11:58:34 AM

Yes, it will be interesting to see what the payments were for - were they in fact equity payments or were they for improvements? And were they improvements that were needed (such as repairs), or simply desired (for example, a larger walk-in closet....?) I think it makes a difference but suspect the case will ultimately be settled before we get into the messy details.

Posted by: Nancy | Feb 26, 2021 4:59:43 PM

Totally agree. It all seems like establishing some leverage in anticipation of settlement.

Posted by: hardreaders | Feb 27, 2021 8:54:29 AM

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