Constructive Trust as a Cause of Action in Connecticut

A constructive trust is an equitable remedy imposed by the courts in Connecticut to prevent unjust enrichment when someone wrongfully holds property that belongs to another. Unlike a formal trust created through an express agreement, a constructive trust arises by operation of law when certain elements are met. It is often used in situations involving fraud, breach of a confidential relationship, or improper conduct.

In Gulack v. Gulack, the Connecticut Appellate Court described the essential elements necessary to establish a constructive trust:

1. Intent by a Grantor to Benefit a Third Party
   The grantor must have transferred property with the intent that it ultimately benefits a third person. This intent may be express or implied from the surrounding circumstances and the relationship between the parties.
2. Transfer of Property to Someone in a Confidential Relationship with the Grantor
   The transferee must stand in a confidential or fiduciary relationship with the grantor, such as a close family member, business partner, or trusted associate. This relationship imposes a duty of fairness and good faith on the transferee.
3. Unjust Enrichment if the Transferee Retains the Property
   The final element requires proof that the transferee would be unjustly enriched if allowed to keep the property. The court will intervene to prevent such unjust enrichment by declaring that the transferee holds the property in trust for the benefit of the intended third person.

A constructive trust is an equitable remedy, meaning it is granted at the court’s discretion when fairness and justice require it. The plaintiff must present clear and convincing evidence to establish the existence of a constructive trust. This remedy is often applied in cases involving family disputes, inheritance issues, or real estate transactions where a promise was made but not fulfilled.

Find the Law

The elements of a constructive trust are described in Gulack v. Gulack, 30 Conn. App. 305, 310-11 (Conn. App. Ct. 1993):

“The elements of a constructive trust are the intent by a grantor to benefit a third person, the transfer of property to another who stands in a confidential relationship to the grantor with the intent that the transferee will transfer the property to the third person, and the unjust enrichment of the transferee if the transferee is allowed to keep the property.”

This remedy ensures that property is held and used according to the original intent, protecting individuals from unfair outcomes.