Opinion ID: 2558397
Heading Depth: 3
Heading Rank: 3

Heading: Imposition of a Constructive Trust

Text: [¶ 49] The Stifels assert in a footnote that the trial court was without jurisdiction to order the imposition of a constructive trust on Hoch's assets transferred to the Stifels and located in Germany, citing to a case pertaining to the imposition of liens on property in another state. We do not view the issue as one of jurisdictional defect. As a court of general jurisdiction, the Superior Court has jurisdiction to grant equitable relief, such as the imposition of a constructive trust. See 4 M.R.S. § 105 (2010); 14 M.R.S. § 6051 (2010); Cassidy v. Cassidy, 2009 ME 105, ¶ 8, 982 A.2d 326, 329 (A constructive trust may be imposed to do equity and to prevent unjust enrichment when title to property is acquired by fraud, duress, or undue influence. ...). [¶ 50] Based on the few cases we have found relating to this issue, it appears that an American court may grant equitable relief in the form of a constructive trust over assets located in a foreign country. See, e.g., Watkins v. Watkins, 160 Tenn. 1, 22 S.W.2d 1, 2 (1929) (It is settled by the great weight of authority that a court of equity of one state or country, having personal jurisdiction of the necessary parties, and therefore the power to compel a conveyance, may declare and enforce a trust, including a constructive trust, relating to real property in another state or country.). [¶ 51] Some courts have concluded, however, that there are other reasons, such as considerations of comity, not to impose a constructive trust over assets in a foreign country. In Remington Rand Corp. v. Business Systems, Inc., 830 F.2d 1260, 1269-70 (3rd Cir.1987), the appellate court affirmed an order, stating that it imposed, in effect, a constructive trust, that ordered that documents held by a company in The Netherlands were to be turned over to a United States company. The court, however, vacated the trial court's imposition of a constructive trust on other of defendant corporation's assets located outside the territorial limits of the United States, not because the court had no jurisdiction to do so, but because the court's award of equitable relief violated principles of international comity in that case. Id. at 1270, 1272-74. In that case, the corporate defendant was undergoing bankruptcy proceedings in The Netherlands. Id. at 1262. The appellate court stated: Although the constructive trust arrangement would provide additional security for a judgment that [the U.S. plaintiff] was expected to secure, it did so at the expense of dooming any chance of rehabilitating the debtor and, in the event of liquidation, of giving priority to [the U.S. plaintiff] over other ... creditors. We believe that such an expansive and far-reaching order has the capacity to disregard the underlying reasons for comity, to interfere with the orderly administration of bankruptcy in The Netherlands, and to provoke a confrontation between the courts of the two countries. Id. at 1272. The court instead held that, before it could sustain the imposition of a constructive trust over assets held outside the United States, the United States plaintiff must first determine whether the Dutch bankruptcy court would enforce the plaintiff's judgment for damages; if the Dutch court fail[ed] to accord the district court's judgment proper respect, the district court [would then be] free to reconsider a proper remedy. Id. at 1272-73. [¶ 52] Due, perhaps, to the Stifels' inadequate briefing on the issue, we have before us no reason to vacate the court's imposition of a constructive trust and affirm that portion of the judgment. Whether a German court will enforce that aspect of the judgment is an issue outside our reach.