The Elements for a Claim of Imposition of a Constructive Trust

In Nevada, one must prove the following in order for a court to impose a constructive trust:

  1. A confidential relationship between the parties;
  2. Retention of legal title by defendant against plaintiff would be inequitable under the circumstances; and
  3. Existence of trust is essential to the effectuation of justice.

Locken v. Locken, 98 Nev. 369, 650 P.2d 803 (1982).

Constructive trusts are those that arise purely by construction of equity, are entirely independent of any actual or presumed intention of the parties, and are often directly contrary to such an intention. Omer v. Omer, 523 P.2d 957, 961 (Wash.App. 1974).  Constructive trusts are entirely in invitum and are forced upon the conscience of the trustee for working out justice or frustrating fraud.  Id. (citing Carkonen v. Alberts, 83 P.2d 899 (Wash. 1938)).

When a court of equity finds that a defendant is the holder of a property interest which he retains due to unjust, unconscionable, or unlawful means, it takes the interest from the defendant and vests it in the wronged party.  24 George G. Bogert, et al., Bogert’s Trusts and Trustees § 471 (3d ed. 2007).  Often this is accomplished by issuing a decree that the defendant conveys to the complainant.  Id.  If the property has been sold, the trust attaches to its proceeds in the hands of the defendant, or to other property purchased by defendant into which the original property or its proceeds can be traced.  Id.  The plaintiff has the election of suing in equity for the imposition of a constructive trust or seeking damages in an action at law for the value of the property.  Id.  Equity is not limited in the types of relief that may be granted to enforce a constructive trust.  Id.

The court must take into account not only the original situation, but also all of the events that have occurred since the defendant began to hold inequitably.  Id.  For example, if the trust property or its product can be traced into the hands of a third party, a constructive trust may be imposed upon the property in the hands of the third party unless he is a bona fide purchaser for value and without notice.   Id.

Because constructive trusts do not require that the parties specifically intended to create a trust, they may be imposed when title to property is acquired by fraud, duress, undue influence, or is acquired or retained in violation of a fiduciary duty.  Bemis, 114 Nev. at 1027, 967 P.2d at 441; See Estate of Campbell, 704 A.2d 329, 331 (Me. 1997).  To summarize, absent coercion, duress, or mistake a constructive trust is generally imposed in only two situations: (1) where actual or constructive fraud is considered as equitable grounds for raising the trust; and (2) where there is a fiduciary duty and a subsequent breach of that duty.  GGSI Liquidation, 351 B.R. at 593 (citing See e.g., Amendola v. Bayer, 907 F.2d 760, 762-63 (7th Cir. 1990)).

In Nevada, a constructive trust will arise and affect property acquisitions under circumstances where: (1) a confidential relationship exists between the parties; (2) retention of legal title by the holder thereof against another would be inequitable; and (3) the existence of such a trust is essential to the effectuation of justice.  Locken, 98 Nev. at 372, 650 P.2d at 805 (quoting Schmidt, 82 Nev. at 375, 418 P.2d at 993).  The requirement that a constructive trustee have title, to the property involved and not mere possession, is critical to the imposition of a constructive trust.  Danning, 86 Nev. at 871, 478 P.2d at 167.  Proof of those circumstances must be by clear and convincing evidence.  Randono v. Turk, 86 Nev. 123, 128, 466 P.2d 218, 222 (citing Garteiz v. Garteiz, 70 Nev. 77, 82, 254 P.2d 804 (1953).

Courts have consistently imposed a constructive trust arising out of the breach of an oral agreement, especially where a confidential relation existed between the parties.  Davidson v. Streeter, 68 Nev. 427, 437, 234 P.2d 793, 798 (1951).  Although the betrayal of such confidence is constructively fraudulent, it is independent of any element of actual fraud.  Id.

Whether relations are technically fiduciary or merely informal, a confidential relation exists between two persons whenever one trusts in and relies on the other.  Randono, 86 Nev. at 129, 466 P.2d at 222.  Because the relationship hinges on whether trust is reposed, in order for a confidential relationship to exist there must be evidence of a special trust with respect to the property or business.  Id.  where “one party gains the confidence of the other and purports to act or advise with the other’s interests in mind.” Giles v. GMAC, 494 F.3d 865, 881 (9th Cir. 2007). In Giles, the Court of Appeals affirmed the district court’s finding that a confidential relationship did not exist simply because a contractual relationship existed between a car dealership and its financing company. Further, the Nevada Supreme Court has recognized a confidential relationship exists: “where one party imposes confidence in the other because of that person’s position, and the other party knows of this confidence.” See Perry v. Jordan, 111 Nev. 943, 947-48, 900 P.2d 335, 337-38 (1995).

When one uses a confidential relation to acquire an advantage, which he ought not in equity and good conscience to retain, the court will convert him into a trustee and compel him to restore what he seeks unjustly to retain.  Davidson, 68 Nev. at 438, 234 P.2d at 798.  Indeed, equity will not permit the confidence placed in the grantee to be betrayed.  Id. at 437, 798.  Nevada recognizes confidential relationships in (a) investment advisors, (b) family, and (c) attorney-client relations, as discussed below.

Investment advisors occupy a confidential relationship toward those whom they advise.  Randono, 86 Nev. at 129, 466 P.2d at 222.  Where a trustee or other fiduciary holds property to be used for the benefit of his cestui, it is a breach of his trust to employ the property for his own private advantage.  Id.  That is, where he spends or consumes it for his own benefit, or uses it directly to acquire other property in his own name.  Id.  From an equity stance, courts will view the breach of trust as reprehensible as the criminal act of embezzlement. Id.  Thus, it is readily admitted to be a sufficient basis for charging the fiduciary with a constructive trust as to any avails of the breach of his express trust.  Id.

Given the confidential relationship of investment advisors, joint adventurers own each other a fiduciary duty.  Randono, 86 Nev. at 129, 466 P.2d at 222.  In Randono, the Turks and Randono became good friends socially and developed a close relationship.  Id. at 126, 466 P.2d 218, 219.  Because Randono was a promoter of business deals and a real estate sales man, he undertook to aid, counsel and advise the Turks in the investment of their earnings and savings.  Id.  In fact, Randono informed the Turks about an opportunity to acquire a half interest in 320 acres of Arizona land, which the Turks could later subdivide and resell for a profit.  Id.  Specifically, Randono told the Turks that they should invest together and buy the 320 acres at $21 an acre.  Id.  As a result, the Turks advanced $3,364.14 toward the purchase of property, which in fact was only sold for $11 an acre.  Randono, 86 Nev. at 126, 466 P.2d at 219.  Randono failed to disclose the purchase of an additional 200 acres with the Turks’ advanced money.  Id.  Consequently, the Court imposed a constructive trust on the 520 acres of realty due to the confidential relationship between the Turks and Randono whereby Randono fraudulently induced the Turks to advance funds.  Id. at 129-30, 466 P.2d 218, 222-23.

Where confidential relations between parent and child are shown to have existed and where a conveyance of property is made by the weaker to the dominant party, a presumption arises that the conveyance was obtained through the undue influence of the dominant party.  Schmidt, 82 Nev. at 376, 418 P.2d at 993.  The burden is on the dominant party claiming under the conveyance to show that the transaction was bona fide.  Id.

In Schmidt, a mother and father deeded land in California to their daughter and son jointly, indicating that they were to share alike in the property.  Id. at 374, 418 P.2d 991, 993.  However, when the father became ill and entered a hospital, the brother caused title to the property to be transferred from his father’s name to only his name.  Id. at 375, 418 P.2d 991, 993.  The brother argued that a constructive trust cannot result in this case where the conveyance is from the parent to an adult child because the parent is assumed to be the dominant party, and there can be no presumption of fraud or undue influence from the mere existence of the relationship.  Id.  Yet, the facts indicated that the father was an old man, very ill and suffering from hallucinations when the son acquired title of the property.  Schmidt, 82 Nev. at 376, 418 P.2d at 993.  Moreover, there was no evidence that consideration was given by the son to the father for the transfer.  Id.  Accordingly, the court held that the brother’s dealings clearly deprived his sister, the only other heir of the father and mother, of any share in the property.  Id.  Because a confidential relationship existed between the brother and father and the brother and sister, the Court found a constructive trust as to the property in favor of the daughter.  Id.

When an attorney deals with his client for the former’s benefit, the clearest and most satisfactory evidence can only overcome the presumptive invalidity of the transaction on the ground of constructive fraud.  Davidson, 68 Nev. at 440, 234 P.2d at 799.  This rule is founded in public policy, intended as a protection to the client against the strong influence to which the confidential relation naturally gives rise.  Id.  Thus, the requirement that the plaintiff’s proof must be clear and convincing proof to establish a constructive trust based upon violation of an oral trust arrangement, does not apply where the transfer is made to a fiduciary.  Id. at 439, 234 P.2d 793, 798-99.  Instead, in such an instance, the burden of overcoming certain presumptions is upon the fiduciary.  Id.

In Davidson, a fiduciary relationship existed between a seasoned attorney and a client who was, rather advanced in years of very limited education and with no experience in legal matters.  Id. at 441, 234 P.2d 793, 799.  The facts indicated that the client had complete confidence in her attorney and was satisfied with the work he had done for her in the past and therefore relied upon his advice.  Id.  The attorney had orally agreed to hold real property for the client’s benefit, to collect the rentals, and make the necessary payments under a subsisting contract of purchase.  Id. at 430, 234 P.2d 793, 794.  Even though the attorney carried out all of these promises, he eventually sold the premises, and upon the client’s demand for payment repudiated his oral agreement.  Id.  The Court found that the client transferred the deed to the attorney solely for him to hold the property in trust for her.  Davidson, 68 Nev. at 442, 234 P.2d at 800.  Specifically, no consideration was paid for the assignments or the deed, the transfer was not made for any preexisting indebtedness, nor was it given without consideration or given as a gift.  Id.  Therefore, the Court upheld a constructive trust upon the property in favor of the client based on their confidential relationship and her substantial interest in the property.  Id. at 430-32, 234 P.2d 793, 794-95.

A constructive trust will arise whenever the circumstances under which property was acquired make it inequitable that it should be retained by him who holds the legal title, as against another.  Schmidt, 82 Nev. at 375, 418 P.2d at 993.

In Bemis, a divorce decree provided that two minor sons would be entitled to equal payments from a $25,000 trust, when in the sole discretion of the trustees, payments shall be necessary for the support, education, or general welfare of either one of them.  Bemis, 114 Nev. at 1023, 967 P.2d at 439.  However, the father failed to establish the trust, which resulted in the sons never receiving any financial assistance from their father after the divorce.  Id.  When the father died, the sons filed creditors’ claims against their father’s estate to collect the money that the father had agreed to hold in trust pursuant to the divorce decree.  Id.  The Court found that the father’s retention of legal title of the funds that he promised to his sons in the divorce agreement was inequitable.  Id. at 1027, 967 P.2d 437, 441.  Because the other two elements of constructive trust were satisfied, the Court concluded that the father had held the monies designated for his sons in a constructive trust.  Id. at 1028, 967 P.2d 437, 442.  Therefore, upon the father’s death, the estate became the trustee of the constructive trust.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

The creation of a constructive trust arises when it is necessary to achieve justice.  See DeLee v. Roggen, 111 Nev. 1453, 1457, 907 P.2d 168, 170 (1995).  In DeLee, Sol sold property to a purchaser who went bankrupt shortly thereafter and the property was foreclosed.  Id. at 1454-55.  Morris, Sol’s brother, purchased the property at public auction held by the holder of the second mortgage and orally promised to give the property to Sol.  Id. at 1455, 907 P.2d 168, 169.  In exchange for the property, Sol promised to pay off farm equipment used in connection with the property, which constituted consideration for Morris’ promise to convey the 640 acres of land to Sol.  Id.  Although Sol completed payment on the equipment sometime in 1978, he made no demand on the property until Morris filed suit against Sol, ten years later, for default on loans totaling $100,000.  Id.

The Court held that justice does not require the creation of a trust to preserve Sol’s interest in the property because Sol refrained from making a demand on the property for over ten years mainly for self-serving reasons.  DeLee, 111 Nev. 1453, 1457, 907 P.2d 168, 170.  Specifically, Sol had so many debts that if he had made such a demand, the property would have been “gobbled up” by creditors.  Id.  Thus, the evidence fairly inferred that Sol never wanted the property in his name, but made the claim to it in an effort to deter Morris from collecting the sums due to him from Sol.  Id.  Since the existence of a constructive trust was not essential to the effectuation of justice, the Court did not address the other two requirements.  Id.

At least one Nevada Supreme court decision holds that a “[constructive] trust can be established only by allegations of extrinsic fraud pleaded with particularity and supported by clear and convincing proof.”  Garteiz v. Garteiz, 70 Nev. 77, 82, 254 P.2d 804, 806 (1953).  This rule of law has been carried into the Nevada Rules of Civil Procedure, which first became effective January 1, 1953.  Id.  NRCP 9(b) provides that “in all averments of fraud or mistake, the circumstances constituting fraud or mistake, shall be stated with particularity.”  NRCP 9(b).

While a constructive trust is usually invoked when property has been acquired by fraud, such a trust may also be imposed where it is against the principles of equity that a certain person retain the property even though the property was acquired without fraud.  See Ferguson v. Owens, 459 N.E.2d 1293, 1295-96 (Ohio 1984).  In fact, to have a constructive trust imposed on property wrongfully held by the defendant, it is not necessary to prove that the petitioner suffered any pecuniary loss or that defendant personally profited from the acquisition and retention.  24 Bogert’s Trusts and Trustees § 471.  For example, in Bemis, the court explained that constructive trusts are no longer limited to fraud and misconduct, but are implemented to redress any unjust enrichment.  Bemis, 114 Nev. at 1027, 967 P.2d at 441.  In other words, a constructive trust is a remedial device not solely arising in cases of outright wrongdoing.  Id.  As stated, to establish a claim for imposition of a constructive trust in Nevada, the complaint must allege facts sufficient to show the abuse of a confidential relationship, the retention of legal title would be inequitable, and unjust enrichment.  See Locken, 98 Nev. at 372, 650 P.2d at 805.

The party seeking to establish a constructive trust has the burden of proving the facts alleged to give rise to the existence of such a trust.  See In re Goldberg, 168 B.R. 382, 384 (9th Cir. 1994).  The standard of proof demanded by the Ninth Circuit and Nevada Courts is usually clear and convincing evidence.  See Id.; Randono, 86 Nev. at 128, 466 P.2d at 222 (citing Garteiz, 70 Nev. 77, 82, 254 P.2d 804, 806 (1953)).  In fact, it is well settled that a constructive trust cannot be established by a mere preponderance of evidence, but must be established by evidence that is clear, definite, unequivocal, and satisfactory.  Moore v. DeBernardi, 47 Nev. 33, 220 P. 544, 545 (1923).  Where the existence of a confidential or fiduciary relationship is a necessary factor in the determination of whether a constructive trust should be declared, the burden is on the party seeking to impose the constructive trust to show the existence of such relationship.  See Davidson, 68 Nev. at 439-40, 234 P.2d at 798-99.

Parol evidence is admissible to prove the facts and circumstances constituting fraud from which the constructive trust arises.  Randono, 86 Nev. at 128, 466 P.2d at 222 (citing Moore, 47 Nev. 33, 50, 213 P. 1041, 220 P. 544 (1923)).  Parol evidence may be introduced to establish a constructive trust because it is a trust that arises by operation of law whereby the statute of frauds is of no impediment to its existence.  See Locken, 98 Nev. at 372, 650 P.2d at 804.  Indeed, any evidence that tends to prove or disprove actual or constructive fraud and is necessary to constitute a constructive trust is admissible.  Moore, 220 P. at 545.  However, the evidence must not be objectionable as to the relevancy, competency, and materiality, and the evidence must be clear and convincing.  See Id.  In fact, some jurisdictions require that parol evidence must be so clear, strong, and unequivocal as to remove from the mind every reasonable doubt as to the existence of the trust.  In Re Woolum, 279 B.R. 865, 870 (M.D. Fla. 2002).

Proof of an oral promise is not a violation of the parol evidence rule, when granting the necessary relief through parol, because it does not contradict the deed, but arises out of equity.  Davidson, 68 Nev. at 438, 234 P.2d at 798.  In essence, equity binds the grantee’s conscience to hold the land for the real purposes of the conveyance where the use of the deed according to its legal operation would work a fraud.  Id.  Therefore, parol evidence explains the transaction out of which the equity arises.  Id.

Under the statute of frauds, a contract to convey land is void unless in writing and no trust in real property is valid unless created by writing or operation of law.  Id. at 437, 234 P.2d 793, 797-98.  Accordingly, an oral promise to re-convey property is invalid and cannot be enforced.  Id.  However, in Nevada, the imposition of a constructive trust does not conflict with the statute of frauds when there is an oral agreement between parties for the conveyance of land.  Locken, 98 Nev. at 372, 650 P.2d at 804.  In particular, NRS 111.205 provides in pertinent part:

1)  No estate or interest in lands shall be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by deed or conveyance, in writing….

2)  Subsection 1 shall not be construed to affect in any manner the power of a testator in the disposition of his real property by a last will and testament, nor to prevent any trust from arising or being extinguished by implication or operation of law.

NRS § 111.205 (1861).  NRS 111.205(2) sets forth an exception to the statute of frauds, which permits the imposition of a constructive trust to avert the type of fraud the statute is designed and intended to prevent.  Locken, 98 Nev. at 372, 650 P.2d at 804.  Namely, Nevada courts have consistently imposed a constructive trust arising out of the breach of the oral agreement, especially where a confidential relation existed between the parties.  Davidson, 68 Nev. at 437, 234 P.2d at 798.  The betrayal of such confidence is constructively fraudulent and is independent of any element of actual fraud.  Id.  As such, in Nevada it is well settled that the statute of frauds is not an impediment to the existence of a constructive trust.  Locken, 98 Nev. at 372, 650 P.2d at 804.

A complainant seeking the establishment of a constructive trust is naturally subject to the ordinary rules of equity that he must come into court with clean hands and that he must do equity if he is to obtain equity.  24 Bogert’s Trusts and Trustees § 472 (3d ed. 2007).  In the rare case where the property in question was originally acquired by some artifice or illegal act, the subsequent possessor may try to oppose the imposition of the constructive trust doctrine by invoking the clean-hands doctrine.  See Locken, 98 Nev. at 372-73, 650 P.2d at 805.  In Locken, a father and son verbally agreed that the father was to make certain improvements upon the land, and after an awaited patent was granted, the son was to convey the property to his father.  Id. at 370, 650 P.2d 803, 804.  Although the father fulfilled his part of the agreement, expending considerable time, effort and money, the son refused to convey the property as agreed.  Id.  Specifically, the son argued that his father should be denied equitable relief because of the father’s affidavit accompanying the land patent application stating that the father had no interest in that parcel of land to be placed in the son’s name.  Id. at 373, 650 P.2d 803, 805.  The Court rejected this argument stating that, without condoning the father’s misstatement, such conduct, standing alone, absent an intent to deceive, does not amount to unclean hands.  Id.

Moreover, courts may overlook that the agreement was illegal or against public policy where: (1) the public interest cannot be restored because of the completed transaction; (2) no serious moral turpitude was involved; (3) the [subsequent possessor] is guilty of greater moral fault than the [initial possessor]; and (4) application of the rule would permit the [subsequent possessor] to be unjustly enriched at the expense of [the initial possessor].  Locken, 98 Nev. at 373, 650 P.2d at 805.  Essentially, the success or failure of this defense will turn on whether courts find the initial possessor’s acts of greater moral fault than the subsequent possessor’s act, which initially led to the constructive trust analysis in the first instance.

Because it is a remedy, the right to a constructive trust is subject to the statute of limitations on the underlying action that gives rise to the right to a constructive trust.  In re Advent Management Corp., 178 B.R. 480, 488 (9th Cir. 1995).  In Nevada, the statute of limitations begins to run from the time when the wronged party knows or should have known of the inequitable conduct of the titleholder.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

In Bemis, two sons first learned about the trust that their father was obligated to create for them after their father’s death on February 11, 1995.  Id.  Soon after, the two sons promptly filed creditors’ claims against the estate, but were denied.  Id.  Nevertheless, the district court held that the trust was repudiated in 1984 when the eldest son reached the age of twenty-five.  Id. However, the Nevada Supreme Court held that when one seeks the imposition of a constructive trust in equity, the statute of limitations accrues when the wronged party knows or should have known about the constructive trustee’s wrongful holding.  Id.  Therefore, the district court erred in holding that the trust was repudiated because the sons only first learned about their father’s failure to create a trust for their benefit shortly before they filed their creditors’ claims in 1995.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

Yet, where the cause of action does not arise until a demand and refusal, and it is within the plaintiff’s power to make such a demand, the statute will commence to run after the lapse of a reasonable time.  Southward v. Foy, 65 Nev. 694, 705-06, 201 P.2d 302, 307 (1948).  The nature of the contract and the circumstances surrounding it will determine what qualifies as a “reasonable time.”  Id.

NRS 11.190(2)(c) provides that an action must be brought within four years upon a contract, obligation or liability not founded upon an instrument in writing.  NRS §  11.190(2)(c) (2007).  Moreover, the statute of limitations applies even when parties are in a fiduciary relationship.  DeLee, 111 Nev. at 1458, 907 P.2d at 170.  In DeLee, Morris purchased the property, paid all taxes and other costs and held title to the property.  Id.  Sometime between 1974 and 1976, Morris and Sol made an oral agreement and by 1978 Sol had performed his part of the agreement.  Id.  Unfortunately, Sol refrained from demanding the property for over ten years.  Id.  The Court held that Sol cannot, by withholding his demand, forever stay the running of the statute of limitations and then demand the property when it is most profitable to him.  Id.  Thus, Sol did not make a demand within a reasonable time after he had performed in 1978 and the four-year statute of limitations ran prior to his 1990 claim for the property.  DeLee, 111 Nev. at 1458, 907 P.2d at 170.

Laches may be a defense to an action to establish and enforce a trust.  Murphy v. Emery, 629 S.W.2d 895, 898 (Tenn. 1982).  The doctrine of laches applies to an action for breach of trust to the same extent that it applies to any other action in equity.  See Murphy, 629 S.W.2d at 897.  In particular, the doctrine is based on several equitable principles: (1) equity never lends its aid to one who, with knowledge of his rights and with opportunities to assert them, delays unreasonably to do so; (2) equity aids those who are vigilant, not those who sleep on their rights, and always discourages stale demands; (3) time, in equity, is a witness that what has long been acquiesced in must have originally been founded on some right.  Id.

As a defense, the elements of laches to an action by a beneficiary against a trustee are namely, lapse of time, want of diligence, knowledge or inexcusable ignorance, and change in the value of the property after the cause of action arises.  See Swanson v. Swanson, 501 S.E.2d 491, 493 (Ga. 1998).  These factors are relevant because laches is not merely a question of time, but principally a matter of inequity in permitting the claim to be enforced.  Id. at 494.  However, lapse of time is an important element and in some cases may be in itself telling on the question of inequity.  Id.

For laches to apply, repudiation of the constructive trust is not required, and the time usually runs from the moment that the trust arises by operation of law.  76 Am. Jur. 2d, Trusts § 721 (2d ed. 2007).  Laches is an affirmative defense to be pleaded and proved by the defendant in an action to impose a constructive trust.  See Swanson, 501 S.E.2d 491.  In particular, the defendant must establish unreasonable delay on the part of the plaintiff in filing suit, and hardship or disadvantage to the defendant as a result of such delay.  See Mills v. Holcomb, 389 So.2d 223 (Fla. App. 1980).

A party may attempt to invoke the homestead exemption as a defense to the imposition of a constructive trust.  However, the homestead exemption does not apply to transactions involving fraud or similar tortious conduct.  Maki v. Chong, 119 Nev. 390, 391, 75 P.3d 376, 377 (2003).

Nevada has a time-honored principle that states that she who keeps property that she knows belongs to another must restore that property.  Id. at 392, 75 P.3d 376, 379.  In Maki, Chong purchased real property from funds belonging to Maki who signed a limited power of attorney allowing Chong to cash his State Industrial Insurance System settlement check.  Id.  Although the purpose of the homestead exemption is to preserve the family home despite financial distress, insolvency, or calamitous circumstances, the Court found that Chong was undeserving of protection because she fraudulently obtained the funds to purchase her home.  Id. at 393-94, 75 P.3d 376, 379.  Specifically, the Court held that one cannot defeat the right to enforce a constructive trust or equitable lien against the property on the ground that the homestead exemption applies.  Id.  Otherwise, the entire purpose of the exemption would be defeated because it only provides protection to individuals who file the homestead exemption in good faith.  Maki, 119 Nev. at 394, 75 P.3d at 379.

When a plaintiff succeeds in enforcing a constructive trust, courts treat her as if she were enforcing a duty to deliver property under an express trust.  Capital Inv. Co. v. Executors of Estate of Morrison, 800 F.2d 424, 427 (4th Cir. 1986).  Consequently, plaintiff has the right to receive the property or its proceeds from a constructive trustee, as well as the right to receive a money judgment for property received against the constructive trustee.  Id.  Where it is necessary to make the successful plaintiff whole, the plaintiff may be allowed to recover a portion of the trust property or its proceeds along with a money judgment for the remainder.  Id.

A court of equity may decree an injunction for certain purposes, such as to restrain an unauthorized sale or diversion of the trust property.  76 Am. Jur. 2d, Trusts § 669 (2d ed. 2007).  For instance, a temporary injunction lies to freeze the res (Latin: “thing,” An object, interest or status, as opposed to a person.  Black’s Law Dictionary (8th ed. 2004)) of an alleged trust upon a showing that the res is in probable danger of dissipation and that there is a reasonable likelihood of success on the merits with respect to the constructive trust claim.  Korn v. Ambassador Homes, Inc., 546 So.2d 756, 757 (Fla. Dist. Ct. App. 1989).

This is a derivative work from the accumulated research of many people over time.  I am not the sole author. See elements for other claims at the Nevada Law Library



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1 comment

  1. Thank you for the eye opening lesson. I lost my home a year ago in a quiet title action for a home i built on my parents land. During construction my father passed away and i never got around to title it. To my surprise my eldest sibling had obtained a durable power of attorney and got me kicked out of my home , moved mom into assisted living, and then moved into her home and is giving mine to his daughter.This brought a smile across my face when i read it. Thanks

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