Baldwin & Briscoe P.C.
301-862-4400
22335 Exploration Drive Ste. 2030
Lexington Park, MD 20653
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Constructive Trust Litigation

               A constructive trust is an equitable remedy that a court can impose to correct an inequitable transfer of property.  A constructive trust may be an option when an agent misuses a durable power of attorney, such as by executing a deed that was not consistent with the principal’s estate plan.  A constructive trust, created by the court, treats the recipient of the property as if he or she were an express trustee holding the property for the rightful recipient from the date of the first unlawful holding.

               There are generally two type of scenarios under which Maryland courts have imposed constructive trusts, first when the property has been acquired by fraud, misrepresentation, or another improper method and secondly, when the property has been acquired in breach of a confidential relationship.  In either scenario, the purpose of imposing a constructive trust is to prevent the person who has acquired title from being unjustly enriched.

               When property has been improperly acquired by fraud, misrepresentation, or other method, in order to obtain a constructive trust, the plaintiff must show three things:

   1.         That the defendant has obtained property in which the plaintiff has a valid equitable claim

   2.         That the defendant acted wrongly in acquiring the property.  Such acts could include fraud or misrepresentation

   3.         That under the circumstances it would be inequitable for the defendant to retain the beneficial interest in the property.

               When the plaintiff’s claim is based on the breach of a confidential relationship, the plaintiff must prove the following:

   1.         That the defendant acquired some property in which the plaintiff has a valid equitable claim

   2.         That there is a confidential relationship which has been breached by the dominant party.

                A confidential relationship exists where one party is under the dominion of another, or where under the circumstances, such party is justified in assuming the other will not act in a manner that is inconsistent with his or her welfare.  If the plaintiff can establish the existence of a confidential relationship, there arises a presumption that confidence was placed in the dominant party and that the transaction complained of resulted from fraud or undue influence.  This presumption then shifts the burden of proof to the defendant to show the transaction was fair and reasonable.  The defendant must present clear, satisfactory, and convincing evidence to overcome the presumption.

               Confidential relationships may exist in a variety of circumstances, such as between a parent and child, between spouses, between attorneys and their clients, or between a principal and their agent under a durable power of attorney.  Generally, a confidential relationship exists where one party acts as a fiduciary for another party. 

               A constructive trust may also be imposed where the plaintiff has a higher equitable call on property than the defendant and it would be inequitable for the defendant to retain the property.  Under this method of obtaining a constructive trust, it is not necessary that the plaintiff prove any particular wrongdoing on the part of the defendant.  An example of this would be where a husband changes the beneficiary of this life insurance policy to his second wife in violation of a separation agreement with his first wife requiring him to maintain the first wife as the policy beneficiary.  In this case, the first wife would not have to prove wrongdoing in order to obtain the benefit of a constructive trust.

               The information contained on this page is provided as general information and does not constitute legal advice.  The experienced attorneys at Baldwin & Briscoe, P.C. can assist you with many types of property litigation, including constructive trusts and breaches of fiduciary duties.  We’d be happy to sit down with you and review your situation and provide appropriate advice.  Call today for a no-obligation consultation.  A consultation fee may apply.

 

The Law Offices of Baldwin & Briscoe, P.C. also offers these services:

Bankruptcy and ForeclosureBusiness LawCivil LitigationCriminal DefenseEmployment, Disability, and Consumer RightsFamily LawGovernment Contracts LawIntellectual Property, Personal InjuryReal Estate, Social Security Disability & Workers’ Compensation and Wills, Trusts, & Estates

 

 

Contact Us

The Law Offices of Baldwin, Briscoe & Steinmetz, P.C.

22335 Exploration Drive

Suite 2030

Lexington Park, MD 20653

301-862-4400 Phone

301-862-3009 Fax

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Our Attorneys

Samuel C.P. Baldwin, Jr., Esq.

Janice Briscoe, Esq.

Richard J. Steinmetz Jr., Esq.

David J. Hebb, Esq.

Sandra Kaufman Jonasen, Esq.


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With an office conveniently located in Lexington Park, The Law Offices of Baldwin, Briscoe & Stienmetz, P.C. serves clients in the counties and cities of Lexington Park, Leonardtown, Hollywood, Mechanicsville, Loveville, Helen, Breton Bay, Chaptico, Charlotte Hall, Golden Beach, Avenue, La Plata, Waldorf, Newburg, Port Tobacco, Port Charles, Solomons Island, Prince Frederick, Chesapeake Shores, Hughesville, Benedict, Nanjemoy, Lusby, Port Republic, St. Mary's County, Charles County, Calvert County, Prince George's County, Southern Maryland.


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