HOW CONSTRUCTIVE IS THIS?

Courts look at four factors when considering whether to impose a constructive trust:

• the existence of a fiduciary or confidential relationship;
  
• a promise;
  
• a transfer in reliance of that promise; and
  
• unjust enrichment.

Recently, these elements were applied in Ubriaco v. Martino. In that case, Anthony Ubriaco commenced an action against his sister, Lynn Martino, in the Richmond County Supreme Court, seeking one-half of the net proceeds of the sale of certain real property.

Initially, the siblings' father retained a life tenancy in the property and conveyed equal interests in the remainder to his two children. In a subsequent deed, the father, as a life tenant, and his two children as holders of the remainder, conveyed a fee simple interest in the property solely to Martino.

According to Ubriaco, the reason for the conveyance was to facilitate refinancing of the property so that it could be renovated. Although his name was not on the deed, the understanding he allegedly reached with his sister was that he still retained an interest in the property as a remainderman. Yet, contrary to that oral arrangement, upon their father's death, Martino conveyed the property to a third party without recognizing Ubriaco's interest.

Martino claimed the conveyance had been made in recognition of the care that she had provided for both her mother and father while each had been in poor health. She argued that the court could not permit her brother's oral statements to rebut her documented interests in the property and moved for summary judgment dismissing her brother's case.

When that effort proved unsuccessful, Martino appealed to the Appellate Division, Second Department, which affirmed the lower court's decision. The AD concluded that the existence of a deed did not defeat Ubriaco's constructive trust claim as a matter of law, and, found that Ubriaco's allegations of an oral agreement raised a triable issue of fact which warranted a formal hearing or trial.

So, whenever engaging in this kind of transaction, it's probably best to ensure that all aspects of the arrangement are documented in a writing ... even when it involves relatives.*

For a copy of the Appellate Division's decision, please use the following link:  Ubriaco v. Martino

-------------------------------