Title: ROSSEL v. MILLER

State: wyoming

Issuer: Wyoming Supreme Court

Document:

ROSSEL v. MILLER2001 WY 6026 P.3d 1025Case Number: 00-42Decided: 07/11/2001

APRIL TERM, A.D. 2001

 

                                                                                                            

KARL W. 
ROSSEL,

 

Appellant(Plaintiff),

 

v.

 

IRMTRUD 
MILLER and ERIC V. MILLER,

as 
Individuals and as Trustees

of the 
Miller Revocable Trust,

 

Appellees(Defendants).

 

 

Appeal 
from the District Court of Laramie County

The 
Honorable Edward L. Grant, Judge

 

Representing 
Appellant:

            
Bernard Q. Phelan of Phelan-Watson Law Office, Cheyenne, Wyoming  

 Representing 
Appellees:

            
Bert T. Ahlstrom, Jr., Cheyenne, Wyoming  

 

Before 
LEHMAN, C.J., and GOLDEN, HILL, and KITE, JJ.

*This 
case was originally assigned to Justice Thomas on October 4, 2000, for the 
rendering of a proffered majority opinion.  
The case was reassigned to Justice Kite on February 5, 
2001.

 

 

            
KITE, Justice.

 

[¶1]      This appeal 
presents a dispute between siblings.  
Karl Rossel sought imposition of a constructive trust and an accounting 
for real and personal property he contends was converted by his sister, Irmtrud 
Miller, and her husband, Eric Miller.  
He also sought a judgment for $25,000, an amount he claimed was a debt 
owed by the Millers.  The trial 
court imposed a partial constructive trust for Mr. Rossel on fifty-two and a 
half acres of the real property and awarded the Millers five acres described as 
the homestead plot.  The complaint 
was dismissed with prejudice as it related to the personal property, including 
joint account funds and the $25,000 alleged loan.  We affirm.

 

 

ISSUE

 

[¶2]      Mr. Rossel 
presents the following issue for our review:

 

            
Was the court's finding that a constructive trust should be imposed on 
only a portion of the assets transferred to a family member under an implied 
promise clearly erroneous?

 

The 
Millers did not provide a statement of the issues in their 
brief.

 

 

FACTS

 

[¶3]      The facts 
presented in this appeal are often conflicting and complicated.  Mr. Rossel is a German citizen while the 
Millers are United States citizens.  
In 1973, Mr. Rossel executed a contract with his mother in Germany which 
provided that upon her death he would inherit her home and garden located in 
Germany and he would be obligated to pay Mrs. Miller the equivalent of 50,000 
German marks as her share of the inheritance.1  The contract required the inheritance 
payment to be made in three installments over a three-year period.2  In 1990, the mother died leaving Mr. 
Rossel with the obligation to satisfy the contract.  He paid the first installment of $20,000 
to Mrs. Miller, but, due to financial problems, the next installment was 
delayed.  In time, Mr. Rossel paid 
another installment of  $30,000 to 
Mrs. Miller.

 

[¶4]      In 1992 or 1993, 
Mr. Rossel came to the United States with an interest in purchasing land in 
either Wyoming or Colorado.  Mr. 
Miller accompanied Mr. Rossel to Cheyenne where they located fifty-seven and a 
half acres in Buford to purchase.  
The final purchase price for the land was $47,000.  The proposed plan for the property was 
that Mr. Rossel would give the Millers enough land on which to build a house so 
Mr. Rossel and his family could stay with the Millers while visiting the United 
States.  Mr. Rossel made an earnest 
money deposit of $30,000, which left a balance of $17,000 on the purchase 
price.

 

[¶5]      At this point, 
the parties' versions of the events diverge.  Upon his return to Germany, Mr. Rossel 
sent the Millers approximately $61,000 which he claims was comprised of $22,000 
in satisfaction of the third and final installment of Mrs. Miller's inheritance, 
$17,000 as the final payment on the Buford property, and an additional $22,000 
which was a supplementary gift for Mrs. Miller.  Mrs. Miller maintains the $22,000 was 
not a gift but rather was an additional payment toward the balance due on her 
inheritance.

 

[¶6]      Mr. Rossel 
further asserts that, in 1993 or 1994, Mr. Miller called him and asked for a 
$25,000 loan to buy a house in Cheyenne.  
The Millers claim they wanted to have a house in Cheyenne while they 
supervised the construction of the Buford home.  The Millers contend they never asked Mr. 
Rossel for a loan but rather purchased the home with their own savings.  Mr. Rossel did in fact wire $25,000 and 
did not ask for or receive anything in writing to declare the terms of the 
alleged loan, including any mention of when or how the loan would be 
repaid.  The Millers received the 
money the day before the closing on their new home.  Mrs. Miller claims the $25,000 was 
another justified payment on her inheritance.

 

[¶7]      Mr. Rossel and 
Mrs. Miller also opened a joint bank account in Cheyenne.  According to Mr. Rossel, the account 
allowed him to have money available when he visited the United States.  Mr. Rossel also asserts the funds were 
intended to cover the costs of maintaining the real property.  Improvements made on the land, including 
drilling a well and planting trees, were paid for with money from the joint 
account funded by Mr. Rossel.  In 
addition, a truck and two all-terrain vehicles were purchased with joint account 
money. 

 

[¶8]      Upon a 
deterioration of relations between Mr. Rossel and the Millers, Mr. Rossel 
decided to build a home on the Buford property, as the planned construction for 
a home with the Millers had not been realized.  Mr. Rossel foresaw a difficult time 
obtaining financing for the construction of the home as a foreign citizen.  As a result, in January 1995 he executed 
a warranty deed which passed the entire Buford property to Eric and Irmtrud 
Miller as trustees of the Miller Revocable Trust with the intent that they would 
obtain a loan.  Mr. Rossel claimed 
it was very clear that, after he repaid the loan, the property would be 
reconveyed to him.  Mrs. Miller 
again claims the property was conveyed to her as part of her inheritance. 

 

[¶9]      In October or 
November of 1995, Mr. Rossel asked Mrs. Miller for paperwork which he needed for 
German tax purposes.  He wanted the 
paperwork to identify the previous payment of $22,000 as an inheritance payment, 
the remaining $22,000 as a gift, and $25,000 as a loan to the Millers.  Mrs. Miller refused to supply the 
requested paperwork and cut off all further contact with Mr. Rossel.  Subsequently, Mr. Rossel was not allowed 
on the Buford land, and the Millers denied his request for reconveyance of the 
land.  In addition, Mrs. Miller 
transferred the approximate $13,000 balance of the joint account into her own 
savings account.

 

[¶10]   The basis for Mrs. Miller's 
contentions is that she had not received the full share of her inheritance.  Mrs. Miller testified it was her 
understanding of German law that upon the death of a parent, if two children 
survive, each child receives fifty percent of the property.  Mrs. Miller believed that the stated 
value of the property was 120,000 German marks and under the contract she was to 
receive only 50,000 marks, which was less than fifty percent.3  She also questioned what was determined 
to be the value of the property, and, due to all the relevant circumstances, she 
believed Mr. Rossel actually owed her a total of $150,000.  Both parties testified regarding a 
ten-year "look-back period" under German law, which would allow Mrs. Miller to 
sue Mr. Rossel for an accounting of the funds and property acquired from their 
mother.  Mrs. Miller claims she 
reached an agreement with Mr. Rossel not to pursue litigation against him in 
Germany on the basis of his promise to pay her the full share of her 
inheritance.

 

[¶11]   The trial court heard the case 
without a jury on August 4, 1999.  
It found Mr. Rossel submitted certain sums of money and property to the 
Millers, which he insisted was to be held in constructive trust on his 
behalf.  The trial court noted the 
Millers contended the money and property were delivered in payment of Mrs. 
Miller's share of her mother's estate, which Mr. Rossel controlled.  In light of the often directly 
conflicting testimony, the trial court found the Millers' position more tenable 
and to be in conformance with the facts and circumstances of the case.  The trial court imposed a partial 
constructive trust for Mr. Rossel on fifty-two and a half acres of land and 
awarded the Millers five acres described as the homestead plot.  The claims pertaining to the personal 
property, which included the alleged $25,000 loan and the joint account funds, 
were dismissed with prejudice.  Mr. 
Rossel appealed the trial court's order.

 

 

STANDARD 
OF REVIEW

 

[¶12]   The purpose of special findings 
under W.R.C.P. 52(a) is to inform the appellate court of the underlying facts 
supporting the trial court's conclusions of law and disposition of the 
issues.  Hopper v. All Pet Animal 
Clinic, Inc., 861 P.2d 531, 538 (Wyo. 1993).  While the findings are presumptively 
correct, the appellate court may examine all the properly admissible evidence in 
the record.  Id.  In accordance with W.R.C.P. 52(a), 
we will not set aside a trial court's findings of fact unless the findings are 
clearly erroneous.  McNeiley v. 
Ayres Jewelry Co., 886 P.2d 595, 597 (Wyo. 1994).  "A finding is clearly erroneous' 
when[,] although there is evidence to support it, the reviewing court on the 
entire evidence is left with the definite and firm conviction that a mistake has 
been committed."  United States 
v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542, 92 L. Ed. 746 (1948); see also McNeiley, 886 P.2d at 597;  Hopper, 861 P.2d  at 538.  

 

 

DISCUSSION

 

[¶13]   A constructive trust arises by 
construction of the court when equity so demands.  76 Am. Jur. 2d Trusts § 200 
(1992).  It is an equitable remedy 
imposed to compel a person who unfairly holds a property interest to hold 
property in trust for the person for whom in equity and good conscience it 
should be held.  Id.  There must be some or all the following 
elements: a promise, either express or implied, a transfer made in reliance of 
that promise, and unjust enrichment.  
Id., at § 205. 

 

[¶14]   The parties correctly state that we 
have approved the imposition of a constructive trust in proper 
circumstances.  Mr. Rossel offers 
Thomasi v. Koch, 660 P.2d 806 (Wyo. 1983), as authority for the 
imposition of a constructive trust for real property in Wyoming.  The facts in the instant case are 
clearly distinguishable from the facts in Thomasi in which all the 
necessary elements of a constructive trust were established.  660 P.2d  at 811.  

 

[¶15]   Mr. Rossel also points to this 
court's decision in Fuller v. Fuller, 606 P.2d 306 (Wyo. 1980), wherein 
we found proper circumstances existed to impose a constructive trust.  Again, the facts in Fuller are 
dissimilar.  This court imposed a 
constructive trust based upon a finding of unjust enrichment.  We noted that "Scott on Trusts, Vol. V, 
Third Edition (1967) § 462.2 at page 3417, says that a constructive trust 
arises where the retention of property would result in the unjust enrichment of 
the person retaining it.'"  606 P.2d  
at 309.  Equity "abhors unjust 
enrichment."  Wantulok v. 
Wantulok, 67 Wyo. 22, 50, 223 P.2d 1030, 1032 (1950); see also 
Fuller, 606 P.2d  at 309.  In the 
instant case, this court is not persuaded that unjust enrichment will result if 
the trial court's order stands.

 

[¶16]   This court gives deference to the 
trial court's opportunity to assess the witnesses' credibility.  Hopper, 861 P.2d  at 538.  The trial court referenced its overall 
impression that Mr. Rossel was a sophisticated handler of assets and yet he made 
all the substantial transfers of valuable property at issue in this case to Mrs. 
Miller without any writing or formal memorialization.  This seemed inconsistent with his prior 
meticulous and cautious approach by which he properly formalized the contract 
with his mother, in part prompted out of concern that Mrs. Miller possessed ill 
motives.  The trial court 
additionally found that Mr. Rossel sought to set up the property transfers in 
such a way that their ambiguous nature and purpose would suit his own 
intentions.  In particular, the 
court alluded to his potentially unlawful conduct with the German revenue 
authorities.  The court also found 
it significant that Mr. Rossel did in fact pay Mrs. Miller in excess of the 1973 
contract requirements, which implied acknowledgment by Mr. Rossel that he owed 
Mrs. Miller more than he had originally paid her out of their mother's 
estate.

 

[¶17]   The trial court recognized the 
directly conflicting accounts of the parties.  As a result, it imposed a partial 
constructive trust with regard to the real estate excepting therefrom five acres 
of homestead property.  The trial 
court found Mr. Rossel failed to meet his burden with regard to the joint 
account and, therefore, no constructive trust was warranted.  Likewise, the trial court dismissed Mr. 
Rossel's claim seeking judgment for the alleged $25,000 
loan.

 

[¶18]   Our review is limited to examining 
the record, and we give due deference to the trial court's reasoning and ability 
to assess the credibility of the parties' versions of the events.  The trial court's decision with regard 
to the joint account is justified by the evidence wherein it did not find the 
existence of a promise, a transfer made in reliance of that promise, or unjust 
enrichment.  The trial court found 
the evidence was less than satisfactory as it related to the real property and 
determined there were grounds to provide Mr. Rossel some equitable relief.  "[I]t is the district court, not this 
court, which must be satisfied that there was clear and convincing evidence 
sufficient to establish a constructive trust."  Thomasi, 660 P.2d  at 
811.

 

[¶19]   Mr. Rossel further argues the trial 
court erred in distinguishing between the real property and the joint account in 
its order.  He contends that, for 
the order to be internally consistent, either the real property and the funds in 
the joint account were given to Mrs. Miller with the implied trust and 
understanding that they were being held for Mr. Rossel's benefit or they were 
given to her in settlement of her claims on the estate.  We resolved this issue in 
Thomasi, 660 P.2d at 810:

 

While 
serving on the bench of the State of New York, Justice Cardozo tellingly stated 
the inherent qualities of a constructive trust as a remedial and flexible 
device:

 

A 
constructive trust is the formula through which the conscience of equity finds 
expression.  When property has been 
acquired in such circumstances that the holder of legal title may not in good 
conscience retain the beneficial interest, equity converts him into a 
trustee.

 

. . . .

 

. . . A 
court in equity in decreeing a constructive trust is bound by no unyielding 
formula.  The equity of the 
transaction must shape the measure of relief.

 

Beatty 
v. Guggenheim Exploration Co., 225 N.Y. 380, 122 N.E. 378, 380, 381 (1919).

 

This 
court concludes, based on the conflicting facts and circumstances evident in the 
record, that the trial court's order achieved an equitable resolution.  Upon our thorough review of the record, 
we find no error.

 

[¶20]   Affirmed.

 

FOOTNOTES

1There is not an explanation in the 
record as to the conversion rate from German marks to United States dollars for 
the periods of time at issue.

 2The record does not reveal the exact 
amount which was to be paid in each installment.

 3Again, there is not an explanation in 
the record as to the conversion rate from German marks to United States dollars 
during the period at issue.