Opinion ID: 1875979
Heading Depth: 1
Heading Rank: 3

Heading: Can Plaintiffs Seek a Constructive Trust?

Text: Plaintiffs had a choice to either file a constructive trust cause of action in the circuit court or to file a discovery of assets suit in the probate division under section 473.340, RSMo 2000. [7] See Jarman v. Eisenhauer, 744 S.W.2d 780, 782 (Mo. banc 1988) (holding that the circuit court has jurisdiction to entertain plaintiff's action for declaratory judgment after the death of one of the co-owners of an asset and that such jurisdiction is concurrent with the jurisdiction of the probate division in discovery of asset proceedings). Plaintiffs elected to file their Petition for Declaratory Judgment and the Establishment and Imposition of a Constructive Trust in circuit court, seeking a declaration that the trust provision that prohibited the trust assets from being distributed to them was void and unenforceable. [8] Plaintiffs contend that because certain portions of the trust were void and unenforceable, the trial court erred in sustaining Defendants' motion to dismiss their cause of action. Their petition alleged that Wife placed her confidence in her husband in the belief that he would act and respect her wishes to provide for [Plaintiffs] in the manor (sic) he promised he would and having failed in said promise the [Defendants] are unjustly enriched. Plaintiffs further stated that Wife was subservient to and trusted her husband. They argue that Husband took advantage of his confidential relationship with Wife by excluding them as beneficiaries of the trust. They assert that, if they are successful in proving the allegations in their petition, a constructive trust on the trust assets should be imposed in their favor against Defendants. Defendants contend that, even if the trial court found for Plaintiffs and determined that the challenged provision of the trust was void and unenforceable, the assets would revert to Husband's estate as a resulting trust and then be distributed according to the terms of his will. Defendants contend that Plaintiffs do not have standing. They argue that Plaintiffs cannot establish a legally cognizable interest in the outcome of the litigation because they are not named devisees under Husband's will and because they did not challenge it. Further, they assert that the statute of limitations to bring a will contest under section 473.083 has expired. Although the statute of limitations for Plaintiffs to challenge Husband's will has expired, they are not seeking to challenge the will. They are claiming an interest in the trust. Defendants failed to raise in their pleadings at the trial court that the statute of limitations to contest the trust had run. As it is an affirmative defense, it was waived. Section 509.090; Agnew v. Union Const. Co., 291 S.W.2d 106, 108-09 (Mo.1956); Rule 55.08. Plaintiffs dispute Defendants' claims that a resulting trust is the appropriate remedy under the facts of this case. They argue that a constructive trust should be imposed because they allege violations of confidence and fraud. In order to determine the applicability of constructive and resulting trusts, a brief explanation is helpful. A constructive trust is an equitable device employed by courts of equity to remedy a situation where a party has been wrongfully deprived of some right, title or interest in property as a result of fraud or violation of confidence or faith reposed in another. Kohm v. Kohm (In re Estate of Davis ), 954 S.W.2d 374, 379 (Mo.App.1997). The touchstone for imposition of a constructive trust is injustice or unfairness, which may be the product of undue influence or abuse of a confidential relationship. Brown v. Brown, 152 S.W.3d 911, 918 (Mo.App.2005). It is imposed where a person who holds title to property is under a duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. Matlock v. Matlock, 815 S.W.2d 110, 114 (Mo.App.1991). A constructive trust arises without regard to the parties' intention. Id. Alternatively, a resulting trust is implied by law to meet the requirement of justice that a legal status be given to what is the clear intention of the parties. Brown, 152 S.W.3d at 920 n. 2. It arises where property is transferred under circumstances that raise an inference that the person who makes the transfer or causes it to be made did not intend the transferee to take the beneficial interest in the property. Matlock, 815 S.W.2d at 114. If the owner of property gratuitously transfers it and properly manifests an intention that the transferee should hold the property in trust but the trust fails, the transferee holds the trust estate upon a resulting trust for the transferor or his estate. . . . Theodore Short Trust v. Fuller, 7 S.W.3d 482, 493 n. 14 (Mo.App.1999). [9] However, the settlor may be refused the benefit of a resulting trust if he participated in an attempt to perpetrate a wrongful act. RONALD CHESTER & GEORGE GLEASON BOGERT, THE LAW OF TRUSTS AND TRUSTEES section 468 (3d ed.2005). Plaintiffs seek to have a trust provision voided for alleged undue influence or violation of confidence, not for the failure of the trust. By requesting the imposition of a constructive trust on assets that Defendants are to receive, Plaintiffs pled an appropriate remedy. The dismissal of their cause of action was error. If Plaintiffs can prove the necessary facts to show that they are entitled to share in the trust's assets, the imposition of a constructive trust is a proper remedy. [10] Because the trial court dismissed Plaintiffs' suit, they did not have the opportunity to engage in discovery and attempt to demonstrate that they are entitled to a constructive trust. Plaintiffs should have been given this opportunity. [11]