Litigation Newsletter

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    Over the years, intra-family immunity from lawsuits against other family members developed; “parental immunity” and “spousal immunity.” Some have suggested that these immunities were part of a body of rules that... Read more.
  • Claims Arising out of Invasion of Privacy
    A “tort” may generally be defined as an act deemed wrongful enough that one who suffers injury from it may bring a lawsuit to recover damages. Many torts have their origin in “common law,” which is the body of... Read more.
  • Vicarious Liability Under the Doctrine of Respondeat Superior
    In general, people are not liable for the actions of others. There are, however, exceptions to this rule. One long-standing exception is the doctrine of “respondeat superior,” a Latin term meaning “let the master... Read more.
  • Supreme Court Curbs Punitive Damage Awards
    An injured party who has successfully proven that the injury and damages were caused by the defendant may be entitled to an award of “punitive damages” in addition to actual damages. Punitive damages are designed to punish... Read more.
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Returning Property to its Rightful Owner

A constructive trust is a remedy imposed by a court when a person has wrongfully attained property in an inappropriate way. The court will undo the transaction and order that title to the property go to the rightful owner.

Types of Wrongful Conduct

Any wrongful activity that leads to the unfair obtainment of property may be cause for a constructive trust, including:

  • Fraud (including forgery)
  • Theft (including embezzlement)
  • Accident
  • Mistake
  • Undue influence
  • Violation of fiduciary duty (for example, where a partner purchases property in his own name rather than in the name of the partnership)

Factors

In order for a constructive trust to be created, the following factors must exist:

  • Fraudulent representations or concealment of important and material information, or breach of trust
  • Acts such as transfer of property as a result of the fraud or breach
  • Profit and/or unjust enrichment as a result of fraudulent representation or concealment of important and material information

Remedy Under Constructive Trusts

A constructive trust is imposed when an affected party initiates a lawsuit requesting relief. It typically provides that the property pass from the wrongful owner to the rightful owner.

However, if the unlawful owner has damaged or destroyed any of the property, the rightful owner is entitled to a money judgment for the value of the property.