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Litigation Newsletter

  • Intra-family Lawsuits and Immunities
    Over the years, intra-family immunity from lawsuits against other family members developed; “parental immunity” and “spousal immunity.” Some have suggested that these immunities were part of a body of rules that... Read more.
  • Payment of Litigation Costs and Fees
    Many people embark on a lawsuit without taking into consideration all possible consequences. Litigation can be very costly and not all the costs are obvious. Most expect the costs of hiring an attorney and make payment arrangements,... Read more.
  • Remedies for Copyright Infringement
    Under U.S. law, creators of artistic works, including literary and dramatic works, music, choreography, paintings, sculpture, sound recordings, and movies, automatically have a copyright in the work, provided it is... Read more.
  • Advantages of a Class Action Lawsuit
    A class action suit is a claim brought by one or more individuals on behalf of themselves and others with similar claims. There are several types of cases appropriate for a class action lawsuit including: A mass accident... Read more.
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Court-Imposed Transfers: Constructive Trusts

A constructive trust is a remedy imposed by a court when a person has wrongfully attained property in an inappropriate way. The court will undo the transaction and order that title to the property go to the rightful owner.

Types of Wrongful Conduct

Any wrongful activity that leads to the unfair obtainment of property may be cause for a constructive trust, including:

  • Fraud (including forgery)
  • Theft (including embezzlement)
  • Accident
  • Mistake
  • Undue influence
  • Violation of fiduciary duty (for example, where a partner purchases property in his own name rather than in the name of the partnership)

Factors

In order for a constructive trust to be created, the following factors must exist:

  • Fraudulent representations or concealment of important and material information, or breach of trust
  • Acts such as transfer of property as a result of the fraud or breach
  • Profit and/or unjust enrichment as a result of fraudulent representation or concealment of important and material information

Remedy Under Constructive Trusts

A constructive trust is imposed when an affected party initiates a lawsuit requesting relief. It typically provides that the property pass from the wrongful owner to the rightful owner.

However, if the unlawful owner has damaged or destroyed any of the property, the rightful owner is entitled to a money judgment for the value of the property.


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