Opinion ID: 2194836
Heading Depth: 2
Heading Rank: 2

Heading: Substantial Likelihood of Success

Text: Mr. Alvord further argues that the trial court erred in finding a substantial likelihood of success of the appellees' claim, which in this context would be defined as the imposition of a constructive trust. Instead, he argues that he should succeed as a matter of law under the doctrine of laches, the Dead Man Statute, and the Statute of Frauds. [A] party seeking temporary equitable relief need not show a mathematical probability of success on the merits. Rather, the level of probability of success that must be demonstrated will vary according to the court's assessment of the other factors pertinent to the analysis. Thus, a stay may be granted with either a high probability of success and some injury, or vice versa. Thus, if irreparable harm is clearly shown, the movant may prevail by demonstrating that he or she has a substantial case on the merits. Akassy v. William Penn Apartments, Ltd. P'ship, 891 A.2d 291, 309-10 (D.C.2006) (citations and internal quotation marks omitted) (quoting In re Antioch Univ., 418 A.2d 105, 109 (D.C.1980)); Cuomo v. United States Nuclear Regulatory Comm'n, 249 U.S.App. D.C. 54, 56, 772 F.2d 972, 974 (1985); accord, Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815 F.2d 500, 503 (8th Cir.1987); Competitive Enters. Inst. v. United States Dep't of Agric., 954 F.Supp. 265, 269-70 (D.D.C.1996); Herrera v. Riley, 886 F.Supp. 45, 48 (D.D.C. 1995). Nevertheless, if the appellees' claims are barred by law, we must reach the merits of the decision at this point. See Zirkle, supra, 830 A.2d at 1256 n. 5. A constructive trust arises where a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if permitted to retain it. Dennis v. Edwards, 831 A.2d 1006, 1013 n. 3 (D.C.2003) (quoting Gray v. Gray, 412 A.2d 1208, 1210 (D.C.1980)). `Since a constructive trust is found for the purpose of preventing humans from being successful in shady bits of behavior, it is universally recognized that the required operative facts can be proved by parol.' Hertz v. Klavan, 374 A.2d 871, 873 (D.C.1977) (quoting 4A RICHARD R. POWELL & PATRICK J. ROHAN, POWELL ON REAL PROPERTY ¶ 594, at 567 (1974)). Furthermore, in a constructive trust action, there is no set limitations period, because it is not at all self-evident that substantial prejudice to the defendant's ability to defend himself is an inherent consequence of plaintiff's delay in prosecuting the case. As distinguishable from a suit over a discrete event, an equitable action involving property rights is by nature not so time-sensitive. . . . Rather, the guiding principle is one of laches. Granville v. Hunt, 566 A.2d 65, 68 (D.C. 1989) (citations omitted); accord, Interdonato v. Interdonato, 521 A.2d 1124, 1136 (D.C.1987) (holding that the statute of limitations cannot bar appellants' claim that a constructive trust should be imposed . . . because a constructive trust is an equitable remedy, and therefore not subject to the statute).
Mr. Alvord argues that the doctrine of laches is a complete bar to the appellees' constructive trust action, because in cases of mixed law and equity, courts consider themselves bound by statutes of limitations governing actions of law. King v. Kitchen Magic, Inc., 391 A.2d 1184, 1187 (D.C.1978). This rule, as the trial court indicated, appears to be mere dicta in this jurisdiction. Courts refer to the rule only to establish that allegations of fraud trigger a well-established exception to the rule. See, e.g., Fed. Mktg. Co. v. Virginia Impression Prods. Co., 823 A.2d 513, 528 (D.C.2003) (holding that the trial court's limiting of claims to those occurring five years before the date of filing under laches was reasonable; generous even, inasmuch as it was two years beyond the statutory limitations period); King, supra, 391 A.2d at 1187 (holding that [n]o rigid rule, such as a specific statute of limitations, controls in a case where fraud is an issue); Chiswell v. Johnston, 55 App. D.C. 3, 7, 299 F. 681, 688 (1924) (holding that fraud creates an exception to the rule). These cases stand primarily for the proposition that laches need not mimic the statute of limitations when fraud is at issue. Nor is laches bounded by the statute of limitations when a court assesses a claim of constructive trust. In Interdonato, supra, this court applied the statute of limitations to claims growing out of the defendant's promises that sound in contract. 521 A.2d at 1136. At the same time, the court held that constructive trust claims based on a promise by the defendant were not barred by a fixed period because an action to create a constructive trust is equitable in nature. Id. at 1137. A successful defense of laches has two elements: an unreasonable and unexplained delay by one party, and prejudice to the other party resulting from the delay. Id.; accord M.M. & G., Inc. v. Jackson, 612 A.2d 186, 189 (D.C.1992) (For laches to bar an equitable action, `the defendant must have been prejudiced by plaintiff's delay, and plaintiff's delay must have been unreasonable.' (quoting Martin v. Carter, 400 A.2d 326, 329 (D.C. 1979))). Furthermore, the utmost leniency is manifested by the courts where it appears that the delay is due to the intimate personal relationships existing between the parties and the high degree of confidence reposed by one in another. In such cases, and especially when the family relation exists, the same degree of diligence is seldom required. Interdonato, supra, 521 A.2d at 1137 (quoting Horton v. Horton, 63 App. D.C. 375, 376, 72 F.2d 831, 832 (1934)). Here, Mr. Alvord puts forth no argument as to why any delay was unreasonable, or how such delay prejudiced his ability to defend the action. Instead, he argues merely that the limitations period bars the appellees' claim as a matter of law. Such an argument cannot have merit with respect to the imposition of a constructive trust, where a defense of laches cannot be based on the length of time in and of itself. Granville, supra, 566 A.2d at 68.
Mr. Alvord also argues that the appellees' claims are defeated by the Dead Man's Statute. [4] That Statute precludes entry of judgment in favor of a plaintiff suing a representative of a deceased person, if that judgment is based solely on the plaintiff's uncorroborated testimony as to interactions between her and the deceased or incapable person. Gray, supra, 412 A.2d at 1212. Here, the appellees offer their own testimony, corroborated by the evidence of Dr. Deborah Fort, a friend of Dorothy Reilly. In a sworn letter, Dr. Fort stated that Dorothy had told her that she had promised her husband to leave her half of the residence to his children. She also told Dr. Fort that she changed the terms of the Residence Trust in violation of this promise, swearing her to secrecy. Should the trial court credit this evidence, the appellees will overcome the requirements of the Dead Man's Statute. [5]
Finally, Mr. Alvord argues that the appellees' action is barred by the Statute of Frauds. The trial court held that the Statute of Frauds did not apply to the appellees' claims for two separate reasons. First, regarding appellees' attempt to prove the existence of an express trust, he held that the Statute did not apply because there was part performance of the oral agreement. Second, understanding appellees' claim in the alternative to be the existence of an implied trust, he held that constructive trusts are never subject to the Statute of Frauds. The Statute of Frauds requires that agreements creating a trust of real estate be in writing. D.C.Code § 28-3503 (2001). Oral agreements are exempt from this rule, however, if acts of part performance . . . constitute unequivocal evidence of the alleged agreement. Hackes v. Hackes, 446 A.2d 396, 401 n. 9 (D.C.1982) (citing Kaufmann v. Adalman, 186 Md. 639, 47 A.2d 755, 761 (1946); 73 AM.JUR. 2d Statute of Frauds § 406 (1974)). Here, the trial court found that the initial Residence Trust, created with the appellees as beneficiaries, constituted such part performance on the part of Dorothy Reilly. Furthermore, the trial court noted in its order denying Mr. Alvord summary judgment that Dorothy Reilly's subsequent amendment supports appellees' contention that she wrote the Residence Trust to fulfill her part of the bargain, then changed it because of anger at the beneficiaries. While we may harbor some reservation about whether the evidence here was unequivocal, see McCartney v. Fletcher, 11 App. D.C. 1, 19 (1897) (noting that the mere making of the deeds, or directing them to be made to the grantee, would certainly not be sufficient part performance to take a parol agreement out of the Statute of Frauds), we need not decide that question because we agree with the trial court's determination that the Statute of Frauds should never bar the imposition of a constructive trust. See Tauber v. District of Columbia, 511 A.2d 23, 27 n. 11 (D.C.1986). Express trusts are created when the settlor manifests an intent to place trust property in the hands of the trustee for the benefit of another, and the settlor must use written words to express her intentions if she wants the trustee to be bound. See RESTATEMENT (SECOND) OF TRUSTS § 17 (1959). Thus, the basis for express trusts is the written manifestation of the settlor's intent, and the Statute of Frauds operates. The basis for implied trustsindeed, their most evident difference from express trustsis the absence of any expressed words evincing the intent of the would-be settlor to create a trust for the would-be beneficiary. The existence of such words obviates a claim for a resulting trust (where the settlor designated one person as the beneficiary but, the claimant argues, meant for someone else to be the beneficiary) or a constructive trust (where the settlor designated one person but, the claimant argues, equity demands a different beneficiary). See Hertz, supra, 374 A.2d at 873 (holding that the operative facts of a constructive trust can be proved by parol); see also Starzec v. Kida, 183 Conn. 41, 438 A.2d 1157, 1160 n. 2 (1981) (holding [t]he statute of frauds . . . do[es] not apply to constructive trusts, which are implied by operation of law); cf. Edwards v. Woods, 385 A.2d 780, 784 n. 5 (D.C.1978) (It is true that the Statute of Frauds does not apply to resulting trusts. They come within § 28-3503's exception for trusts `aris[ing] or result[ing] by operation of law.' (citations omitted)). See generally 5 AUSTIN WAKEMAN SCOTT & WILLIAM FRANKLIN FRATCHER, THE LAW OF TRUSTS § 406 (1989). Thus, the Statute of Frauds presents no obstacle to appellees' claim for a constructive trust. [6] In summary, Mr. Alvord's arguments against the appellees' likelihood of success on the merits are based almost entirely on legal bars to recovery, which analysis shows do not exist here. He presents no argument about the actual strength of the appellees' evidence. Because of this, and given the strong showing of irreparable harm made by the appellees, see Akassy, supra, 891 A.2d at 309-10, we find no error in the trial court's finding of substantial likelihood of success on the merits supporting the injunction.