Opinion ID: 1903266
Heading Depth: 1
Heading Rank: 5

Heading: The Constructive Trust Counterclaim

Text: The defendant argues that, by her silence, Audrey acquiesced in the allegedly fraudulent statements of Anthony Sr., and therefore, the trial justice erred by failing to impose a constructive trust on the house for defendant's benefit. She asserts that the trial justice made an error of law by finding that the existence of a fiduciary relationship is an essential element in a constructive trust claim. The defendant contends that the existence of a confidential relationship is legally sufficient, and that she produced clear and convincing evidence of such a relationship and fraudulent conduct sufficient to warrant the imposition of a constructive trust. It is well settled that [t]he underlying principle of a constructive trust is the equitable prevention of unjust enrichment of one party at the expense of another in situations in which legal title to property was obtained by fraud or in violation of a fiduciary or confidential relationship. Renaud v. Ewart, 712 A.2d 884, 885 (R.I. 1998) (mem.) (citing Simpson v. Dailey, 496 A.2d 126, 128 (R.I.1985)). The essential elements that the party seeking imposition of a constructive trust must prove by clear and convincing evidence are the existence of a fiduciary or confidential relationship between the parties and either a breach of a fiduciary duty or fraud resulting from the parties confidential association. Id. Confidential or fiduciary relationships do not inherently exist between family members. Simpson, 496 A.2d at 128. We evaluate the facts and circumstances surrounding family member's dealings when considering whether a confidential or fiduciary relationship was at work. Id. at 128-29. In Simpson, we upheld a finding of a confidential relationship between a sister and brother because the evidence demonstrated that they trusted each other and relied on each other for assistance with matters of great importance. Id. at 129. The sister claimed a right to annuity proceeds upon her brother's death, but the evidence showed that she had promised, if her brother predeceased her, to apply the proceeds toward the care and maintenance of her brother's wife and children. Id. at 127, 129. We concluded that a finding of a breach of the sibling's confidential relationship was warranted, and imposition of a constructive trust on the proceeds was necessary to prevent unjust enrichment. Id. at 128-29. We analogized the brother and sister in Simpson to another brother and sister pair in Cahill v. Antonelli, 120 R.I. 879, 390 A.2d 936 (1978). In Cahill, this Court upheld a finding of a confidential relationship because the evidence demonstrated that the sister trusted her brother, looked to him for advice, and enlisted him as her agent to clear up liens on a parcel of real property. Id. at 883, 390 A.2d at 939. The sister conveyed the property to her brother, subject to a promise that he would reconvey it back to her after taking care of the liens. Id. The brother died, never having transferred the property back to his sister. Id. at 881, 390 A.2d at 938. We affirmed both the finding that the brother abused his sister's trust and confidence for his own personal gain and the trial justices imposition of a constructive trust on the property. Id. at 883-84, 390 A.2d at 939. Here, the trial justice found that defendant failed to demonstrate that a fiduciary relationship existed between her and plaintiffs. Our review of the record reveals no evidence of a fiduciary or confidential relationship between plaintiffs and defendant at the time plaintiffs purchased the house. Unlike in Simpson and Cahill, defendant's familial relationship with plaintiffs was prospectiveat the time Anthony Sr. and Audrey purchased the property, Cynthia was merely their sons fiancée. More crucial to our analysis, in contrast with Simpson and Cahill, there is no evidence establishing a pattern of defendant's reposing trust and confidence in plaintiffs. Therefore, we discern no error in the trial justice's finding in favor of plaintiffs on the constructive trust counterclaim.