Constructive trusts are not like other trusts. They aren’t set up by one person for the benefit of another. In fact, a constructive trust isn’t really a trust at all; it is a judicial remedy that courts use to award property to someone who has been wrongfully deprived of his or her rights.
In Mississippi, a constructive trust will arise “against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.”[1]
A recent Pearl River County probate case involves the application of constructive trust remedy to a live-in situation between a widow and her boyfriend. The boyfriend argued that the court should apply the remedy constructive trust to give him a life estate in the home that he shared with the widow.
Barbara Parker began a romantic relationship with Edward Bourgeois in 1990, after the death of her husband. When she entered into the relationship, she owned a piece of land and a mobile home. Edward moved in with her and they opened a joint checking account together. In 1995, Barbara began building a house on her land. She invested approximately $70,000 out of her checking account. Edward claims to have also contributed $20,000 from his retirement fund to put into the home.
Barbara and Edward began living in the home after it was built and lived together up until Barbara’s death in 2005. Barbara died without a will (intestate). Edward claimed that Barbara had orally agreed to allow him to live in the home after her death, with the home to pass to her children after his death. He claimed that the $20,000 that he contributed to the construction of the home was consideration for the life estate that Barbara gave him in the property.
By the time of Barbara’s death, the relationship between Barbara and Edward had cooled. Their joint checking account had been closed with the money divided between them equally. She had also revoked the power of attorney that she had granted Edward. And she had written a note stating that Edward was to be paid back the $20,000 he put into the home from one of her CDs. Edward was named as the beneficiary of that CD, which had a total amount of $41,000.
When Edward received the $41,000 check he offered to pay Barbara’s children $20,000 so he could remain living in the home. The children refused. Edward then locked the children out of the property. This action prevented them from getting their mother’s documents and belongings.
Edward claimed he was entitled to live in the home as a matter of equity and asked the court to award him a constructive trust in the home. For support, Edward attempted to show that there was “abuse of confidence”. Specifically, Edward claimed that confidential relationship existed between him and Barbara and that he had relied upon her promise that he could remain in the house after her death. Were it not for that promise, Edward claims that he would not have contributed $20,000 to the construction of the house. This was essentially a claim that Barbara had used her close relationship with Edward to influence him to contribute to the construction of the home. Edward claimed that the constructive trust remedy should be used to address this wrong.
Like many undue influence cases, this case turned on the existence of a confidential relationship. Relying on prior law, the court noted that in order for a confidential relationship to exist between two persons, there must be a relation in which one person is in a position to exercise a dominant influence upon the other.[2] The Pearl River County Chancery Court felt that there was no evidence that Barbara was in any position to exercise dominant influence upon Edward. And there was evidence that Edward knew the relationship was ending, yet he failed to get anything in writing from Barbara.
The absence of evidence to support a finding of confidential relationship was fatal to Edward’s case. There was little evidence of receipts or records that linked the $20,000 directly to the building of the house. In fact, the record showed that the $20,000 had been withdrawn after the house was built. And there was no proof that Barbara’s children would be unjustly enriched if the life estate was not awarded to Edward. The Pearl River County Chancery Court held, and the Mississippi Court of Appeals affirmed, that Edward did not meet his burden of proof that required him to prove by clear and convincing evidence (the highest standard for evidence) that Barbara’s children would been unjustly enriched were they to receive the property or that he was the rightful owner based on his past contributions to the property.
This case proves the old attorney adage: If it ain’t in writing, it don’t exist. If Barbara had really intended to give Edward a life estate in the home, nothing would have prevented her from going to a estate planning attorney and drafting the documents necessary to do so. This would have given Edward enforceable rights in the property. But since she failed to do so, Edward was left in the uncomfortable position of having to prove Barbara’s subjective intent. As between he and Barbara’s children, he had the best opportunity to prevent this situation by having documents drawn up to protect himself.
In Re Estate of Parker, 2008-CA-00693-COA (July21,2009).
[1] Planters Bank & Trust Co. v. Sklar, 555 So. 2d 1024, 1034 (Miss. 1990).
[2] Tatum v. Barrentine, 797 So. 2d 223, 230 (¶32) (Miss. 2001).
About Jeramie Fortenberry
