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

FIDELITY NATIONAL TITLE INSURANCE COMPANY V. HOROWITZ

The constructive trust remedy is rationally related to the breach of fiduciary duty by Brown II as found by the arbitration panel, and the aiding and abetting finds against Deborah Marheine, Joseph G. Brown, and Donna Snider. (Meleski Decl., ¶ 2 and Exhibit A (Arbitration Award, at pp. 11-22 and 31).) The constructive trust ensures that Brown II complies with its fiduciary duty, and prevents Ms. Marheine, Mr. Brown, and Ms.

  • Hearing

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 a first amended complaint (FAC) on January 31, 2020, alleging claims for: (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. On July 28, 2020, Defendant filed a cross-complaint against Plaintiff, alleging claims for: (1) conversion; (2) negligence; (3) money had and received; (4) imposition of constructive trust; (5) breach of contract; and (6) accounting.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

RICHARD DIXON VS SCOTT D MCGEE, ET AL.

Dissolution of CIM Group Elder financial abuse False pretenses Sexual and medical condition harassment, discrimination, and retaliation Infliction of emotion distress Unjust enrichment, restitution, and constructive trust Oppression of shareholder by fraud, deceit and false pretenses On July 10, 2020, Defendant UBA LLC (“UBA”) filed the instant Motion to Change Venue.

  • Hearing

FORD MOTOR CREDIT COMPANY VS YANIV A. KAHANER, ET AL.

On June 17, 2019, Plaintiff filed it’s complaint for conversion, receiving of stolen property, unjust enrichment, fraudulent conveyance, and constructive trust. On January 14, 2020, the clerk entered a default against Defendants Rebeka Shadpour and Wealth Road, Inc. On January 21, 2020, Defendants Rebeka Shadpour and Wealth Road, Inc. filed an answer to the complaint. On September 16, 2020, the clerk entered a default against Yaniv A. Kahaner aka Alex Y. Kahaner.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

YIFEI PEI VS EUROBOOST MOTOR SPORTS

On December 11, 2019, Plaintiff filed a complaint, asserting causes of action against Defendant and Does 1-25 for: Breach of Oral Contract Breach of Implied Covenant of Good Faith and Fair Dealing Fraud Conversion Constructive Trust Unjust Enrichment Slander of Title Specific Performance Violation of Bus. & Prof. Code § 17200, Unfair Competition Claim and Delivery On January 27, 2020, Defendant’s default was entered.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

NANCY L. ROJO, MS. VS ROBERT M. ROCHA, ET AL.

Dissolution of CIM Group Elder financial abuse False pretenses Sexual and medical condition harassment, discrimination, and retaliation Infliction of emotion distress Unjust enrichment, restitution, and constructive trust Oppression of shareholder by fraud, deceit and false pretenses On July 10, 2020, Defendant UBA LLC (“UBA”) filed the instant Motion to Change Venue.

  • Hearing

GEOFFREY BENNETT, AS ATTORNEY IN FACT FOR CLEAVES M. BENNETT, AND AS SUCCESSOR TRUSTEE OF THE CLEAVES M. BENNETT LIVING TRUST VS ELIZABETH CHAI-CHANG, ET AL.

Trust; (2) Partition; and (3) Breach of Oral Joint Venture Agreement filed December 29, 2008, in the Superior Court of the State of California, County of Los Angeles, Case Number YC058797, entitled Cleaves Bennett, M.D. v.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

IN THE MATTER OF THE MARY E. JONES TRUST

Petition for Instructions; for Retrieval of Premature and Wrongly Distributed Trust Assets; for Exemplary Damages Under Probate Code Section 859; for a Constructive Trust Objection to: Petition for Instructions; for Retrieval of Premature and Wrongly Distributed Trust Assets; for Exemplary Damages Under Probate Code Section 859; for a Constructive Trust Petition for Approval of Trust Accounting and Attorney Fees and Costs Objections to Accounting by Shanee Jones and Request for Surcharge Notice of Motion and

  • Hearing

FORMOSA FABRIC INC., A CALIFORNIA CORPORATION VS OMID LAVI, ET AL.

trust against all Defendants.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

YAPHET HARRIS VS EUROPEAN AUTO OUTLET, INC., ET AL.

The Synod’s Complaint (Synod Complaint) asserts causes of action for (1) declaratory relief and (2) constructive trust. The Synod Complaint alleges in pertinent part as follows. The Synod is the executive organ of the Sobor Council of Bishops (Sobor), the highest law-making and administrative body in the Russian Orthodox Church Outside of Russia (ROCOR). The Synod has jurisdiction over matters concerning church property. The Church is a ROCOR parish.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

VIRK, ET AL. V. ANAND, ET AL.

Thirteenth cause of action for constructive trust AI argues that “Taproop does not allege any facts showing that Anjaneyap acquired, converted or detained any funds or property to which she is entitled, much less did so wrongfully.” (AI’s memo, p.11:12-19.)

  • Hearing

ANJELA RAMOS VS PAMELA TIERNEY, AN INDIVIDUAL AND AS TRUSTEE OF THE HUBBA BUBBA TRUST

This is true even when an equitable remedy is sought based on an alleged promise, including imposition of a constructive trust. (Id. at 835.) It does not appear that Plaintiff would be able to cure this defect, as presenting the claim in probate is a precondition to filing suit. (Probate Code § 9351.)

  • Hearing

(NO CASE NAME AVAILABLE)

This is true even when an equitable remedy is sought based on an alleged promise, including imposition of a constructive trust. (Id. at 835.) It does not appear that Plaintiff would be able to cure this defect, as presenting the claim in probate is a precondition to filing suit. (Probate Code § 9351.)

  • Hearing

D'ANDRE HUMES, ET AL. VS MARCILLA HAYSLETT, ET AL.

On the same date, Plaintiffs filed a first amended complaint with the caption listing Breach of Contract, Specific Performance, and Promissory Estoppel as the causes of action, but the body of the complaint lists the causes of action as Specific Performance, Fraudulent Misrepresentation, and Constructive Trust. Plaintiffs also recorded a lis pendens on the property on the same date.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Landlord Tenant

LISA MARIE BROOKS VS LARA E FIELDING

The operative First Amended Complaint (“FAC”), Plaintiff asserts ten causes of action for: 1) conversion; 2) intentional interference with contractual relations; 3) inducing breach of contract; 4) intentional infliction of emotional distress; 5) negligent infliction of emotional distress; 7) unjust enrichment; 8) tort of another; 9) constructive trust; and 10) declaratory relief. On August 21, 2020, Defendant moved for summary judgment/adjudication as to each cause directed to her.

  • Hearing

KHALED J. AL-SABAH VS VICTORINO NOVAL

Thus, Plaintiffs claim they are entitled to a constructive trust. (Motion 11.) ANALYSIS Without regard to the statutory requirements for the appointment of a receiver—Code of Civil Procedure section 564—as a factual matter, Plaintiffs’ showing is completely inadequate to support the appointment of a receiver. Plaintiffs do not meet their initial burden on the motion. First, they do not demonstrate facts supporting an alter ego theory.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

VIRGINA ASSET PARTNERS, LLC VS USM INVESTMENTS, INC.

Discussion Plaintiff moves the court for an order granting leave to file a Second Amended Complaint; more specifically, Plaintiff proposes adding new claims for fraud (against USM/Ulloa), aiding and abetting (against Herman and Rosemary Carrillo), constructive trust and cancellation of instruments (against all Defendants) and amending the prayer to request the relief sought by the proposed additional causes of action. The motion was filed on January 29, 2020 and originally heard on August 31, 2020.

  • Hearing

ROSA HERRERA VS JOSE ONTIVEROS JR, ET AL.

Based on the foregoing, Defendant’s demurrer to the 5th Cause of Action for Quiet Title is OVERRULED. 1st Cause of Action for Constructive Trust First, Defendant demurs to Plaintiff’s cause of action for constructive trust on the ground that a “constructive trust” is an equitable remedy, not a cause of action. This is partially accurate.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

ZORRO CHEN VS SHIH-CHIEH CHEN, ET AL.

The Complaint asserts the following causes of action: (1) Breach of Oral Contract; (2) Fraud; (3) Conversion; (4) Conspiracy; (5) Aiding and Abetting; (6) Voidable Transfer; (7) Constructive Trust; and (8) Breach of Fiduciary Duty. Defendants SHIH-CHIEH CHEN; SHU-CHING CHEN; LAWRENCE CHEN; and JEFFREY CHEN demur to the first through eight causes of action pursuant to CCP §430.10(e).

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

  • Judge

    Lori Ann Fournier or Olivia Rosales

  • County

    Los Angeles County, CA

FOX VS MARKETORDER FINANCIAL SERVICES INC

The constructive trust cause of action alleges that plaintiffs "have the right to monies from the sale of the Caldwell Property to compensate them individually and jointly in their total investment and return of profit on the investments made with defendants ..."

  • Hearing

  • Type

    Contract

  • Sub Type

    Breach

D'ANDRE HUMES, ET AL. VS MARCILLA HAYSLETT, ET AL.

On the same date, Plaintiffs filed a first amended complaint with the caption listing Breach of Contract, Specific Performance, and Promissory Estoppel as the causes of action, but the body of the complaint lists the causes of action as Specific Performance, Fraudulent Misrepresentation, and Constructive Trust. Plaintiffs also recorded a lis pendens on the property on the same date.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Landlord Tenant

FOX VS MARKETORDER FINANCIAL SERVICES INC

The constructive trust cause of action alleges that plaintiffs "have the right to monies from the sale of the Caldwell Property to compensate them individually and jointly in their total investment and return of profit on the investments made with defendants ..."

  • Hearing

  • Type

    Contract

  • Sub Type

    Breach

DE CONSULTING GROUP, INC., A CALIFORIA CORPORATION, ET AL. VS YOKOHAMA VENTURES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL.

Twelfth Cause of Action (Constructive Trust). A constructive trust . . . is an equitable remedy, not a substantive claim for relief. “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.] The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. [Citations.]”

  • Hearing

HIS GLORY COMMUNITY CHURCH, A CALIFORNIA NON-PROFIT RELIGIOUS CORPORATION VS PACIFICO DIVERSON, ET AL.

Sixth Cause of Action—Constructive Trust "[A] constructive trust may only be imposed where the following three conditions are satisfied: (1) the existence of a res (property or some interest in property); (2) the right of a complaining party to that res: and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it. (Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 920).

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    other

LAWERENCE EBER VS VETERANS CARE COORDINATION, LLC., A MISSOURI LIMITED LIABILITY COMPANY, ET AL.

Plaintiff’s complaint includes causes of action for: Fraud (VCC, Sanchez, AVG); Fraud – Concealment (all defendants); Conspiracy to Defraud (all defendants); Breach of Fiduciary Duty (all defendants); Conversion (all defendants); Negligence (all defendants); Financial Elder Abuse (all defendants); Common Count for Money Had and Received (all defendants); Accounting and Imposition of Constructive Trust and/or Equitable Lien (all defendants); Declaratory Relief (all defendants).

  • Hearing

  • Type

    Other

  • Sub Type

    Intellectual Property

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