Opinion ID: 147670
Heading Depth: 2
Heading Rank: 3

Heading: The Constructive-Trust Remedy.

Text: Under Texas law, a constructive trust is . . . an equitable remedy imposed by law to prevent unjust enrichment resulting from an unconscionable act. Haber Oil Co. v. Swinehart (In re Haber Oil Co.), 12 F.3d 426, 436 (5th Cir.1994). A constructive trust is not a cause of action under Texas law. The constructive-trust remedy is appropriate on a showing of actual fraud or breach of a confidential or fiduciary relationship. Id. at 436-37 (citations omitted). The burden of establishing the existence of the constructive trust rests on the claimant, as does the burden of identifying and tracing the trust property. Id. at 436 (citations omitted). If Cadle had demonstrated its entitlement to a constructive trust in the disputed properties by the time Moore filed for bankruptcy, those properties would belong exclusively to Cadle and would not be subject to pro rata distribution among all estate creditors. Id.; see also 11 U.S.C. § 541(d). But that did not occur; at the filing of the petition, Cadle and the defendants had only filed cross-motions for summary judgment. The constructive-trust remedy is therefore intertwined with the alter ego and fraudulent-transfer claims. Like the underlying claims, that remedy belongs to the estate. Cadle may thus acquire the constructive-trust remedy if it successfully purchases the underlying causes of action.