Opinion ID: 2623148
Heading Depth: 1
Heading Rank: 4

Heading: Constructive Trust as Remedy

Text: This court has stated: A single instrument may be both a will contractual in nature, and a contract testamentary in nature; as a will it is revocable but as a contract it is enforceable; and although a contractual will revoked by execution of a second will, cannot be probated, it may nonetheless be enforced as a contract against the estate of the testator breaching it. Reznik v. McKee, Trustee, 216 Kan. 659, Syl. ¶ 2, 534 P.2d 243 (1975). Sarah's revoked 1984 will was no longer in effect at the time of Sarah's death in 2001. However, because it was contractual, her estate remained subject to its terms. Because the 1984 will could not be probated, plaintiffs were correct to seek imposition of a constructive trust as their remedy. A constructive trust arises wherever the circumstances under which property was acquired make it inequitable that it should be retained by the person who holds the legal title. Logan v. Logan, 23 Kan. App. 2d 920, Syl. ¶ 6, 937 P.2d 967, rev. denied 262 Kan. 961 (1997). To prove a constructive trust, there must be a showing of one of the two types of fraud: actual or constructive. 23 Kan. App. 2d 920, Syl. ¶ 7. Actual fraud is not at issue in this case. Constructive fraud is a breach of a legal or equitable duty which, irrespective of moral guilt, the law declares fraudulent because of its tendency to deceive others or violate a confidence, and neither actual dishonesty or purpose or intent to deceive is necessary. 23 Kan. App. 2d 920, Syl. ¶ 7. Two additional elements also must be proved: [T]here must be a confidential relationship[, and] the confidence reposed must be betrayed or a duty imposed by the relationship must be breached. 23 Kan. App. 2d 920, Syl. ¶ 8. In Heck v. Archer, 23 Kan. App. 2d 57, 927 P.2d 495 (1996), the Court of Appeals was asked to determine whether summary judgment in favor of defendant Deborah Archer was appropriate. The plaintiff, Ralph Heck, argued that there was sufficient evidence to support the imposition of a constructive trust against Archer. Heck claimed that his father, who died intestate, intended all of his property to be divided evenly among his four children, including plaintiff and defendant. However, Archer had been named as the sole beneficiary on all of their father's accounts. The panel concluded that summary judgment for defendant on the issue of a constructive trust was inappropriate. 23 Kan. App. 2d at 68. For purposes of imposing a constructive trust, a confidential relationship can be based on an agreement between the owner of property and another who will distribute the owner's property in a specified manner upon the owner's death. 23 Kan. App. 2d at 67. The panel noted that the record reflected the father's wish to pass his estate to his four children. Whether this [was] sufficient evidence to establish that [defendant] led [the father] to establish or maintain her as the beneficiary on the . . . accounts with the representation that she would distribute those accounts in a specified manner is a genuine issue of material fact. 23 Kan. App. 2d at 68. In this case, the district court found that there was an agreement between John and Sarah regarding distribution of their property after the death of the survivor. The relationship between spouses qualifies as a confidential relationship. In addition, this confidential relationship was based on John's trust in Sarah to distribute four-sevenths of the estate to his children. See Heck, 23 Kan. App. 2d at 67. The agreement imposed a duty upon Sarah, and she breached this duty by executing the 1993 will and disinheriting plaintiffs. The district court properly imposed a constructive trust. Affirmed.