What is a constructive trust?

Constructive Trust Defined

“A constructive trust is an equitable remedy to prevent unjust enrichment and to enforce restitution, under which one who wrongfully acquires property of another holds it involuntarily as a constructive trustee.” (Haskel Engineering & Supply Co. v. Hartford Acc. & Indem. Co. (1978) 78 Cal.App.3d 371, 375.) “The trust extends to property acquired in exchange for that wrongfully taken.” (Id.)

“A constructive trust is an equitable remedy, not a cause of action in and of itself, which can be imposed against one who wrongfully detains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act.” (See Civ. Code, Secs. 2223 and 2224; see also Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1332; PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398; Meister v. Mensinger (2014) 230 Cal.App.4th 381, 399.)

Requirements for the Imposition of a Constructive Trust

“A cause of action seeking to impose a constructive trust will generally be allowed so long as it is predicated upon an underlying claim of fraud, breach of fiduciary duty, or other wrongful act entitling the plaintiff to some relief.” (See Ehret v. Ichioka (1967) 247 Cal.App.2d 637, 642; see also Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1114 stating “[a] cause of action for constructive trust is not based on the establishment of a trust, but consists of fraud, breach of fiduciary duty or other act which entitles the plaintiff to some relief. Relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff.) (Id.)

Pleading Requirements:

The required elements are:

  1. facts constituting the underlying cause of action, and
  2. specific identifiable property to which defendant has title.”.

(Id.)

Constructive Fraud as Underlying Cause Supporting Constructive Trust Remedy

Where Plaintiff asserts that the underlying wrongful act is Defendant’s alleged constructive fraud, however, Plaintiff does not allege sufficient facts to state a claim for constructive fraud: “[c]onstructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship... [c]onstructive fraud arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice.” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1131, internal citation and quotation marks omitted; Feeney v. Howard (1889) 79 Cal. 525, 529; Peterson Dev. Co. v. Torrey Pines Bank (1991) 233 Cal.App.3d 103, 116 stating “[i]t is essential to the operation of the doctrine of constructive fraud there exists a fiduciary or special relationship”.) Thus, [Where] [t]here are no allegations in the FAC establishing that Plaintiff and Defendant had a fiduciary or confidential relationship... [p]laintiff fails to allege sufficient facts to state a claim for constructive trust and/or constructive fraud.) (Id.)

Useful Rulings on Constructive Trust

Recent Rulings on Constructive Trust

YESLENDER, LLC, A PENNSYLVANIA LIMITED LIABILITY COMPANY VS FIVE BULLS TRANSPORT, INC., A CALIFORNIA CORPORATION, ET AL.

On March 17, 2020, Plaintiff filed a complaint, asserting causes of action against Five Bulls, Anacleto and Does 1-5 for: Breach of Written Agreement Breach of Written Guaranty Money Had and Received Breach of Implied Covenant of Good Faith and Fair Dealing Common Count Fraud Constructive Trust Unfair Business Practices Failure to Compensate for All Hours Worked in Violation of Labor Code § 1198 On July 6, 2020, Five Bulls’ and Anacleto’s defaults were entered.

  • Hearing

    Aug 12, 2020

  • Type

    Contract

  • Sub Type

    Breach

CHING FU CHANG, ET AL. VS PAN MING LEI, ET AL.

On August 8, 2019, Plaintiffs filed a complaint, asserting causes of action against Defendants and Does 1-20 for: Breach of Contract Breach of Implied Covenant of Good Faith and Fair Dealing Common Count Fraud Constructive Trust Unfair Business Practices Failure to Compensate for All Hours Worked in Violation of Labor Code § 1198 On October 3, 2019, Wu’s, Pan’s, ZHDI’s, Trend’s and Z&SHDI’s defaults were entered.

  • Hearing

    Jul 29, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

ESTATE OF ALPHONSA LINDSEY

Nature of Proceedings: Petition for Constructive Trust Appearances required. Parties must come prepared to discuss why the Court should not strike the “Petition for Constructive Trust” as improperly filed, as Petitioners are attacking the validity of the Anna E. Johnson Trust admittedly under trust provisions of the Probate Code. From the pleading, this Petition should have been filed in a separate trust matter and related to this decedent’s estate case, not filed in the estate case.

  • Hearing

    Jul 13, 2020

  • Judge Jed Beebe
  • County

    Santa Barbara County, CA

WHITNEY SPRINGER VS KEITH STEPHENSON, ET AL.

Plaintiffs filed a Complaint on August 16, 2019, alleging five causes of action sounding in: (1) Breach of Oral Contract; (2) Breach of Fiduciary Duty; (3) Accounting; (4) Constructive Trust; and (5) Declaratory Relief. PRESENTATION: Plaintiff filed the four instant motions on April 15, 2020, Skydreams filed four associated oppositions on June 26, 2020, and Plaintiff filed four associated replies on July 1, 2020.

  • Hearing

    Jul 10, 2020

CARR V. RODRIGUEZ

The Complaint and First Amended Complaint are framed in tort, for conversion, intentional infliction of emotional distress, Civil RICO, and a remedy of constructive trust and injunctive relief which are not really substantive causes of action in any event, see Camp v. Board of Supervisors, 123 Cal.App.3d 334, 356 (1981); PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398.) It had to be shown how the causes of action sued upon support the remedy.

  • Hearing

    Jul 09, 2020

DAVID AZIZI VS. BEHNAM RAFALIAN, ET AL.

On November 6, 2006, judgment was entered in favor of Ely and a constructive trust was imposed on Rafalian to safeguard Ely’s 50% ownership in the property (“Carson Judgment”). The judgment was affirmed on appeal. On February 29, 2012, Ely assigned his interest to Azizi, as trustee. On November 30, 2017, Rafalian conveyed the property to Carson LP without Azizi’s knowledge. Rafalian is a partner in Carson LP and owns a 79.20% interest. The general partner in Carson LP is Carson LLC.

  • Hearing

    Jul 09, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

  • Judge

    Maurice A. Leiter or Salvatore Sirna

  • County

    Los Angeles County, CA

ROSEMARY WOODS VS RAZ INVESTMENTS,INC., A CALIFORNIA CORPORATION, ET AL.

Constructive Trust (7th COA) Constructive trust is a remedy, not a cause of action. (See Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 76.) Consequently, DLD Defendants’ demurrer to the 7th cause of action is sustained with leave to amend constructive trust as a remedy. Violation of California Penal Code §496 (8th COA) Plaintiff failed to allege sufficient facts to constitute a cause of action for civil penalties under Penal Code §496 against DLD Defendants.

  • Hearing

    Jul 09, 2020

  • Type

    Real Property

  • Sub Type

    Quiet Title

FRANK X. ENDERLE, JR., TRUSTEE OF THE AUGUSTINE H. ENDERLE TRUST, ET AL. VS OAKWOOD CEMETERY ASSOCIATION, OF LOS ANGELES, A NON-PROFIT CORPORATION, ET AL.

As a result, on August 21, 2019, Plaintiffs filed this action for: (1) Breach of Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3) Conversion; (4) Money Had and Received; (5) Unjust Enrichment; (6) Declaratory Relief; (7) Accounting and (8) Constructive Trust. OCA’s demurrer to the Conversion and Constructive Trust causes of action was sustained with leave to amend. On December 4, 2019, Plaintiffs filed a First Amended Complaint.

  • Hearing

    Jul 09, 2020

  • Type

    Contract

  • Sub Type

    Breach

DRAKE KENNEDY, ET AL. VS BRIAN KENNEDY, ET AL.

On April 8, 2019, Brian Kennedy (“Brian”) filed a cross-complaint alleging ten causes of actions: (1) Breach of Fiduciary Duty; (2) Breach of Contract; (3) Declaratory Relief; (4) Removal of Drake Kennedy as Director; (5) Financial Elder Abuse; (6) Intentional Interference with Prospective Economic Advantage; (7) Negligent Interference with Economic Advantage; (8) Quantum Meruit; (9) Constructive Trust and (10) Declaratory Relief. On March 6, 2020, Drake filed his First Amended Complaint (“FAC”).

  • Hearing

    Jul 08, 2020

NOEL LUSTIG, M.D., INC., A CALIFORNIA CORPORATION DOING BUSINESS AS PSYCHIATRIC MEDICAL GROUP VS MARC L. NEHORAYAN, M.D., A PROFESSIONAL CORPORATION, A CALIFORNIA CORPORATION, ET AL.

Plaintiff filed an amended complaint on January 31, 2020, alleging: (1) breach of fiduciary duty; (2) conversion; (3) fraud; (4) breach of written contract; (5) unfair business practices; (6) unjust enrichment and constructive trust; and (7) accounting. Noel Lustig, M.D. (Lustig) was the Chief Executive Officer of Plaintiff until his retirement in March 2015 and the sole shareholder of Plaintiff until his death on November 16, 2018. (FAC, ¶1.)

  • Hearing

    Jul 07, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

A. CHARLES WILSON VS CENTURY CITY MEDICAL PLAZA, L.P., ET AL.

The Cross-Complaint asserts causes of action for: Breach of Fiduciary Duty; Constructive Fraud; Constructive Trust; Unjust Enrichment; Unfair Competition; and Declaratory Relief. Defendant Century City Medical Plaza, L.P. (hereinafter “Defendant”) demurs to the entire FAC on the grounds that it fails to state causes of action against Defendant and it is uncertain. Legal Standard A demurrer for sufficiency tests whether the complaint states a cause of action. Hahn v.

  • Hearing

    Jul 06, 2020

  • Type

    Contract

  • Sub Type

    Breach

RICHARD MEDINA, ET AL. VS SALVADOR MEDINA, ET AL.

The Cross-Complaint asserts causes of action for: Breach of Fiduciary Duty; Conversion; Constructive Trust; Breach of Contract; and Common Count – Money Lent. Cross-Complainant moves for an order deeming the Requests for Admissions, Set One propounded on Richard, Angelica, and Rodolfo (hereinafter collectively referred to as “Plaintiffs”) admitted.

  • Hearing

    Jul 06, 2020

  • Type

    Real Property

  • Sub Type

    other

CELSO FERNANDEZ VS HO SOUNG WON, ET AL.

Specifically, Defendants’ control of the money thereby created a special relationship justifying imposition of a constructive trust or resulting trust imposed on the Defendants for the money to be reimbursed to; for money to be paid in commissions; and for money to be paid for wage / withholding tax liability; and for the benefit of Plaintiff FERNANDEZ (‘Special Relationship’).” (FAC, ¶ 119.

  • Hearing

    Jul 06, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

DAVID RADMACHER V. JOANN SALINAS

Here, Plaintiff seeks an order establishing a constructive trust over the commissions received by Defendant’s Allstate Insurance office (the Agency). Plaintiff argues a constructive trust is necessary to prevent the dissipation of “jointly-owned funds” by Defendant. “A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. [Citations.]

  • Hearing

    Jul 02, 2020

WOO HYUN KIM VS HEE SU KIM, ET AL.

On September 30, 2019, Plaintiff filed the operative first amended complaint against Defendant for: C/A 1: Imposition of a Resulting Trust C/A 2: Imposition of a Constructive Trust C/A 3: Breach of Fiduciary Duty C/A 4: Breach of Fiduciary Duty C/A 5: Breach of Fiduciary Duty C/A 6: Constructive Fraud C/A 7: Conversion C/A 8: Elder Abuse On January 31, 2020, Plaintiff passed away.

  • Hearing

    Jul 02, 2020

  • Type

    Real Property

  • Sub Type

    other

JD FINANCIAL GROUP LTD., A UNITED KINGDOM CORPORATION VS RENAISSANCE CAPITAL GROUP, LLC, A NEVADA LIMITED LIABITITY COMPANY, ET AL.

Plaintiff requests to be provided compensatory damages, restitution, attorney fees, punitive damages for conduct alleged committed against itself alone, and requests a court order for either an asset freeze or constructive trust to be imposed “over all monies in defendants’ possession that rightfully belong to Plaintiff.” (Complaint ¶¶ 66-68.) Based on the foregoing, the Court concludes that Plaintiff’s UCL claim is a private, rather than public claim.

  • Hearing

    Jul 01, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

TIANJIN JIU CHE YUE SUPPLY CHAIN MANAGEMENT CO., LTD, A CHINESE LIMITED COMPANY VS ONE STOP AUTO GROUP, INC., A CALIFORNIA CORPORATION, ET AL.

On November 7, 2019, Plaintiff filed a First Amended Complaint, alleging causes of action against Defendants and Does 1-10 for: Breach of Contract Common Counts Fraud and Fraudulent Inducement to Enter into Contract Conversion Unjust Enrichment Constructive Trust On March 5, 2020, Defendants’ defaults were entered. A Case Management Conference and Order to Show Cause re: Failure to Proceed with Default Judgment are set for July 1, 2020.

  • Hearing

    Jul 01, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

KAI HOU LIANG VS JI LI

A constructive trust is imposed in favor of Plaintiff Kai Hou Liang against Defendant Ji Li on all assets and equity of Hollywood Garden, LLC acquired by Defendant Ji Li (collectively, the ‘Property’). The Property is ordered transferred to Plaintiff Kai Hou Liang effective as of the date of this Judgment. The imposition of this constructive trust is intended to prevent the unjust enrichment of Defendant Ji Li; 3.

  • Hearing

    Jun 30, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

PENG CHEN VS CBM INVESTEMENTS INC ET AL

Plaintiff filed a complaint against Defendants alleging causes of action for: (1) conversion; (2) violation of California Penal Code, Section 496; (3) constructive trust; and (4) civil conspiracy. Cross-Complainants CBM Investments, Inc. and CBM Systems, Inc. filed a cross-complaint alleging causes of action against Cross-Defendants Ginny Lin and RBB for: (1) contribution; (2) equitable indemnity; and (3) declaratory relief.

  • Hearing

    Jun 30, 2020

  • Type

    Business

  • Sub Type

    Intellectual Property

KAI HOU LIANG VS JI LI

A constructive trust is imposed in favor of Plaintiff Kai Hou Liang against Defendant Ji Li on all assets and equity of Hollywood Garden, LLC acquired by Defendant Ji Li (collectively, the ‘Property’). The Property is ordered transferred to Plaintiff Kai Hou Liang effective as of the date of this Judgment. The imposition of this constructive trust is intended to prevent the unjust enrichment of Defendant Ji Li; 3.

  • Hearing

    Jun 30, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

GMP LABORATORIES OF AMERICA, INC V. METAFORMULA INTERNATIONAL, INC.

(ROA 46—11/25/29 Minute Order.) 8th COA for Equitable Relief (Equitable Lien or Constructive Trust) - Sustained Without Leave to Amend “[I]n order to create a constructive trust as defined in section 2224, three conditions must be satisfied: the existence of a res (property or some interest in the property); the plaintiff's right to that res; and the defendant's acquisition of the res by some wrongful act.” Optional Capital, Inc. v. Das Corporation (2014) 222 Cal.App.4th 1388, 1402.

  • Hearing

    Jun 29, 2020

MULJONO LOEKMAN, ET AL. VS DAVID KU FANG LIN, ET AL.

Plaintiffs filed a motion for an order granting Plaintiffs leave to file a First Amended Complaint: (1) to set aside fraudulent transfer, constructive trust, equitable lien, conspiracy, and aiding and abetting; and (2) to deem the proposed First Amended Complaint submitted with their motion filed. The Court finds that Plaintiffs’ motion is compliant with California Rules of Court, Rule 3.1324.

  • Hearing

    Jun 26, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

HUGO IVAN MALDONADO VS LUIS GONZALEZ, ET AL.

Defendants argue that that “the eighteenth cause of action for constructive trust is not a standalone cause of action and there are no allegations of wrongful conduct by Defendants.” (Worldwide Demurrer, p. 14:9-10; Scott Capital Demurrer, p. 13:25-26.) The Court finds that Plaintiff improperly brings a cause of action for constructive trust, as a constructive trust is not a cause of action but rather a remedy.

  • Hearing

    Jun 26, 2020

  • Type

    Real Property

  • Sub Type

    other

HUGO IVAN MALDONADO VS LUIS GONZALEZ, ET AL.

Eighteenth Cause of Action: Constructive Trust (All Defendants) “A constructive trust is “not an independent cause of action but merely a type of remedy” [citation], and an equitable remedy at that. [Citations.]” (Batt v. City and County of San Francisco (2007) 155 Cal.App.4th 65, 82, disapproved of on other grounds by McWilliams v. City of Long Beach (2013) 56 Cal.4th 613.)

  • Hearing

    Jun 26, 2020

  • Type

    Real Property

  • Sub Type

    other

MARC A. LAROCQUE VS. CHRISTINE LAROCQUE FRANZ, ET AL

After the court sustained a demurrer against Plaintiff’s complaint on June 28, 2019, Plaintiff filed a Third Amended Complaint (TAC), alleging: 1) Breach of Written Contract; 2) Breach of Fiduciary Duty; 3) Breach of Partnership Agreement; 4) Accounting; 5) Imposition of a Constructive Trust; and 6) Declaratory Relief/Quiet Title and Avoidance of Fraudulent Transfers.

  • Hearing

    Jun 25, 2020

  • Type

    Real Property

  • Sub Type

    other

  • Judge

    Paul A. Bacigalupo or Virginia Keeny

  • County

    Los Angeles County, CA

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