Cohen v. Raymond

Steven Cohen met John Raymond when Raymond began dating Cohen’s stepdaughter, Molly, whom Raymond eventually married. Cohen owned a successful scrap metal company and offered Raymond a job. Cohen knew a broker and private wealth manager at Merrill Lynch, and Cohen testified that he wanted to help Raymond learn about investment through that broker. To set up an investment account, Merrill Lynch required a minimum deposit of $250,000. Cohen deposited this amount into an account in Raymond’s name, later testifying at trial that he considered the money to be “seed money” for a business that he planned to open with Raymond. Although Raymond testified that he never intended to go into business with Cohen, the trial court found that “the parties had decided to enter the recycling business together.” Raymond and Molly decided to divorce. Raymond then withdrew $50,000 from the Merrill Lynch account, which he used for “personal purposes.” Upon learning of the divorce and withdrawal, Cohen demanded that Raymond repay him the $250,000, and then sued Raymond in superior court. Cohen claimed that the money was a loan, and that he was entitled to repayment with interest at 5% or 6%. In the alternative, Cohen claimed that Raymond had been unjustly enriched, and that he was entitled to restitution. In his argument on unjust enrichment, Cohen suggested, for the first time, that the $250,000 was a conditional gift. Cohen, appealed the trial court’s ruling that the $250,000 deposited into the investment account was an unconditional gift. Cohen argued, among other things, that the trial court erred by: (1) finding that the $250,000 was an unconditional gift, rather than a loan or a conditional gift; and (2) presuming that the $250,000 was a gift, thereby placing the burden on Cohen to show that it was not a gift. The New Hampshire Supreme Court vacated and remanded: Raymond was Cohen’s son-in-law, thus, the gift presumption did not apply, and the burden should have been on Raymond to prove that Cohen intended to give him the $250,000 as a gift. View "Cohen v. Raymond" on Justia Law