Opinion ID: 2739473
Heading Depth: 2
Heading Rank: 2

Heading: Unjust Enrichment/Constructive Trust

Text: ¶58. The Barriffes asserted, and the chancellor found, that a constructive trust was created. Taking all of the evidence and testimony into account and placing great weight on the close relationship between the two siblings, the chancellor concluded that the evidence was sufficient to prove that the Barriffes had given Lawson $165,000, and that the Nelsons had been unjustly enriched because there was no evidence that the Barriffes had been repaid. He held that a constructive trust came into being on March 18, 2002, when the Barriffes conveyed the eighty acres back to Lawson. After the first trial, the chancellor found that the ten-year statute of limitations had not expired when the Barriffes filed suit, and the chancellor awarded the Barriffes $165,000. ¶59. Sufficient evidence supports the chancellor’s findings that the Barriffes gave Lawson at least $165,000, which was not repaid, and that the Nelsons have been unjustly enriched by that amount. “[T]he basis for an action for ‘unjust enrichment’ lies in a promise, which 26 is implied in law, that one will pay to the person entitled thereto [that] which in equity and good conscience is his.” Estate of Johnson v. Adkins, 513 So. 2d 922, 926 (Miss. 1987) (quoting Magnolia Fed. Savings & Loan v. Randal Craft Realty, 342 So. 2d 1308, 1311 (Miss. 1977)). The Court has explained unjust enrichment as follows: The doctrine of unjust enrichment or recovery in quasi contract applies to situations where there is no legal contract but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain but should deliver to another, the courts imposing a duty to refund the money or the use value of the property to the person to whom in good conscience it ought to belong. Dew v. Langford, 666 So. 2d 739, 745 (Miss. 1995) (quoting Hans v. Hans, 482 So. 2d 1117, 1122 (Miss. 1986)). Where unjust enrichment is found, the party making the claim is entitled to restitution. Powell v. Campbell, 912 So. 2d 978, 982 (¶ 14) (Miss. 2005); Estate of Johnson, 513 So. 2d at 926. In other words, the claiming party should be “restored to his or her original position prior to the loss[.]” Black’s Law Dictionary 1313 (6th ed. 1990). ¶60. Often, where unjust enrichment is found, a constructive trust is imposed. A constructive trust is an equitable remedy intended to prevent unjust enrichment. See McNeil v. Hester, 753 So. 2d 1057, 1064 (¶ 24) (Miss. 2000); Griffin v. Armana, 687 So. 2d 1188, 1195 (Miss. 1996); Allgood v. Allgood, 473 So. 2d 416, 421-22 (Miss. 1985); Saulsberry v. Saulsberry, 223 Miss. 684, 78 So. 2d 758, 760-61 (1955). A constructive trust is one that arises by operation of law against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy. 27 Joel v. Joel, 43 So. 3d 424, 431 (¶ 23) (Miss. 2010) (quoting McNeil, 753 So. 2d at 1064 (¶ 24) (quoting Saulsberry, 78 So. 2d at 760)). “Any transaction may provide an appropriate setting for creating a constructive trust; their forms and varieties are ‘practically without limit.’” Alvarez v. Coleman, 642 So. 2d 361, 367 (Miss. 1994) (quoting Planters Bank & Trust Co. v. Sklar, 555 So. 2d 1024, 1034 (Miss. 1990)). ¶61. “[C]lear and convincing evidence is required to establish a constructive trust.” Davidson, 667 So. 2d at 620 (citations omitted). Mississippi law on constructive trusts is well-established. Constructive trusts are created for the purpose of preventing unjust enrichment, whereby one unfairly holding a property interest may be compelled to convey that interest to whom it justly belongs. Allgood v. Allgood, 473 So. 2d 416 (Miss. 1985). “It is unjust enrichment under cover of the relation of confidence, which puts the court in motion.” Russell v. Douglas, 243 Miss. 497, 506, 138 So. 2d 730 (1962) (citing Sinclair v. Purdy, 235 N.Y. 245, 139 N.E. 255 (1923) (Cardozo, J.)). Griffin, 687 So. 2d at 1195. “It is the relationship plus the abuse of confidence imposed that authorizes a court of equity to construct a trust for the benefit of the party whose confidence has been abused.” Davidson, 667 So. 2d at 621 (quoting Lipe v. Souther, 224 Miss. 473, 80 So. 2d 471, 475 (1955) (emphasis added)). ¶62. The chancellor’s finding that the facts gave rise to a constructive trust is supported by substantial evidence. Sufficient evidence existed to find a close relationship between Ernie and Lawson and an abuse of that relationship. It is undisputed that Lawson and Ernie had a close relationship, and the Barriffes trusted Lawson to take care of them and to handle their money appropriately. It is also evident that Lawson gave no consideration for the $165,000 28 from the Barriffes – the Barriffes were not repaid, nor did they get an interest in the business, so no consideration existed. The definition of a constructive trust is broad. Constructive trusts are meant to prevent unjust enrichment by one who holds something that in “equity and good conscience” he ought not. Joel, 43 So. 3d at 431 (¶ 23); Griffin, 687 So. 2d at 1195. I do not have any qualms with saying that the Nelsons have been unjustly enriched and hold property and money that in “equity and good conscience” they ought not. In my opinion, substantial evidence supported the chancellor’s imposition of a constructive trust.