Court Opinion

ID: 9775950
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:13:43.150843+00
Date Added: 2024-06-11T07:32:32.295056
License: Public Domain

Glaze, J., dissenting in part. I disagree only with point II of the majority opinion. To establish liability for the tort of conversion requires a showing that the defendant (here Lula Wright) wrongfully committed a distinct act of dominion over the owner’s property (here Orena Dent’s) which is a denial of, or is inconsistent with, the owner’s rights. If the defendant exercises control over the goods in exclusion or defiance of the owner’s rights, it is a conversion, whether it is for defendant’s own use or another’s use. Reed v. Hamilton, 315 Ark. 56, 864 S.W.2d 845 (1993). Here Lula placed $4,745.50 of Dent’s funds into an account listed as “Lula Wright for Orena Dent.” One week later, Lula refused to return any of these funds to Orena. The evidence reflects that Lula was in a special position of trust regarding Orena, and was a dominant party in the control of Orena’s money. When Lula refused Orena access to her money, Lula clearly acted inconsistent with Orena’s ownership. The majority opinion suggests that, when the trial court found Lula was holding the disputed funds in an account for Orena, the trial court in effect determined the money was held in constructive trust. That may be true but if the trial court impressed a constructive trust in these circumstances, that action was done for Orena’s beneficial interests and did not give Lula the right to retain Orena’s funds when she demanded their return. A constructive trust is an implied trust and arises by the operation of law when equity so demands. Hall v. Superior Federal Bank, 303 Ark. 125, 794 S.W.2d 611 (1990). Also relevant to the situation at hand, the law is settled that, while a confidential or fiduciary relationship does not in itself give rise to a constructive trust, an abuse of confidence rendering the acquisition or retention of property by one person unconscionable against the other suffices generally to ground equitable relief in the form of the declaration and enforcement of a constructive trust. Id. Here, Lula and Orena are sisters and Lula enjoyed a confidential and fiduciary relationship with Orena, which included Orena’s executing a power of attorney in Lula’s name and Lula’s handling Orena’s money. The trial judge found that Lula committed no fraud in handling her sister’s affairs, and the record supports that finding. Even so, Lula clearly controlled Orena’s funds, and for whatever reason, wilfully and contrary to Orena’s ownership rights, kept those funds from Orena when she demanded them. Perhaps a proper guardianship of Orena’s estate would have resolved this issue concerning Orena’s money, but as discussed in point III of the majority opinion, the chancellor had no authority to impose one. Hopefully, when this cause is remanded to correct point III, the merits of point II can be properly resolved as well. My main reason for writing is to emphasize disagreement with the majority opinion’s suggestion that a constructive trust under the facts of this case allowed Lula to exclude Orena from her money. To recover her funds, Orena was required to bring this suit. Contrary to the conclusion reached in the majority opinion, Orena never sought double recovery, nor would she have obtained a double award. Orena’s suit alleged undue influence, fraud and conversion of funds which she asserted resulted in compensatory and punitive damages. While no fraud was involved on Lula’s part, Orena still was entitled to her money upon demand. Instead Lula continues to withhold those monies, but now does so under an inappropriately imposed “frozen” constructive trust.