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You are here: Home1 / Contract Law2 / DIFFERENCES BETWEEN AN ACTION TO IMPOSE A CONSTRUCTIVE TRUST AND AN ACTION...
Contract Law, Trusts and Estates

DIFFERENCES BETWEEN AN ACTION TO IMPOSE A CONSTRUCTIVE TRUST AND AN ACTION ALLEGING UNJUST ENRICHMENT EXPLAINED (THIRD DEPT).

The Third Department explained the differences between an action to impose a constructive trust and an action alleging unjust enrichment, here in the context of a couple’s investment in building a new house and the allegation one party put in 800 hours of unpaid labor which benefitted the other party.  The court held the constructive trust action was properly dismissed, but the unjust enrichment action should not have been dismissed:

Although the equitable claims of constructive trust and unjust enrichment are elementally related and involve overlapping proof, certain essential elements differ. “[A] constructive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest” … . “The elements of a constructive trust are a confidential relationship, a promise, a transfer in reliance on that promise and unjust enrichment” … .As relevant here, with respect to the promise element, it may be express or implied, as determined by the circumstances … . “Finally, a person . . . is unjustly enriched when retention of the benefit received would be unjust considering the circumstances of the transfer and the relationship of the parties” … .

Importantly, and as relevant here, “the constructive trust doctrine serves as a fraud-rectifying remedy rather than an intent-enforcing one” … . By contrast, an action based on unjust enrichment, which would only result in a money judgment rather than a judicially imposed lien, requires the plaintiff to establish that “(1) the other party was enriched, (2) at [the plaintiff’s] expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered” … . Clark v Locey, 2021 NY Slip Op 04176, Third Dept 7-1-21

 

July 1, 2021
Tags: Third Department
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ALTHOUGH IT WAS A VERY CLOSE CASE, THE EVIDENCE DID NOT SUPPORT A CHANGE IN... FAMILY COURT SHOULD NOT HAVE DELEGATED TO FATHER ITS AUTHORITY TO SUPERVISE...
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