How To Prove A Texas Constructive Trust Claim

 

 

In Texas, a claim of Constructive Trust is defined as:

A Constructive Trust is created by a court giving one party physical possession of property to use for the benefit of another party in the absence of a written agreement. The defendant who wrongfully obtained title or interest in property is treated as if he or she were a trustee acting for the benefit of the plaintiff.

It simply means:

When a person holds legal right to property that he should not be able to keep.

There are 3 elements of the claim:

• Element 1. There was a breach of a special trust or fiduciary relationship. A breach of a special trust or fiduciary relationship occurs when one person, who is expected to act in the best interest of another, fails to do so, often leading to misuse of assets or information that harms the other party.
  

  Facts that might support this element look like:

  * The defendant was entrusted with managing the plaintiff’s financial assets due to their longstanding personal relationship.
  * The defendant had exclusive access to the plaintiff’s bank accounts and investment portfolios, creating a fiduciary duty to act in the plaintiff’s best interest.
  * The defendant failed to disclose significant financial losses incurred while managing the plaintiff’s investments, violating their duty of transparency.
  * The defendant misappropriated funds from the plaintiff’s accounts for personal use, breaching the trust placed in them.
  * The plaintiff relied on the defendant’s expertise and advice in financial matters, establishing a special trust relationship that was subsequently violated.

• Element 2. The defendant gained an advantage at the expense of the plaintiff. In a constructive trust claim, this element means that the defendant benefited unfairly or took something valuable from the plaintiff, creating an obligation to return that benefit or compensate the plaintiff for their loss.
  

  Facts that might support this element look like:

  * The defendant received a substantial financial benefit from the plaintiff’s investment without providing any compensation in return.
  * The defendant misappropriated the plaintiff’s proprietary information to secure a lucrative contract with a third party.
  * The defendant used the plaintiff’s resources to develop a competing product, thereby undermining the plaintiff’s business.
  * The defendant intentionally concealed material facts from the plaintiff, leading to an unfair advantage in negotiations.
  * The defendant’s actions resulted in the plaintiff incurring significant losses while the defendant profited from the situation.

• Element 3. There is an identifiable suit that can be traced back to the original property. In a Constructive Trust Claim, “an identifiable suit that can be traced back to the original property” means there is a specific item or asset that can be clearly linked to the original owner, showing that it rightfully belongs to them despite being in someone else’s possession.
  

  Facts that might support this element look like:

  * The original property, a parcel of land, was sold to the defendant, who subsequently profited from its development.
  * The proceeds from the sale of the original property were used to purchase a luxury vehicle registered in the defendant’s name.
  * Documentation shows that the original property was intended to benefit the plaintiff, establishing a direct link to the current dispute.
  * The defendant transferred funds from the sale of the original property into a separate account, which is now being contested.
  * The original property was part of a family trust, and its sale was meant to provide for the plaintiff’s future needs.

^{(See KCM Financial LLC v. Bradshaw, 457 S. W. 3d 70 (Tex. Supreme Court 2015).)}
If you’re in court without a lawyer and plan to assert a Claim of Constructive Trust, it’s essential to engage in a Personal Practice of Law at Courtroom5. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents supported by thorough legal research and a strong analysis of the facts. This proactive approach will help you effectively navigate the complexities of your case.

Prove Your TX Constructive Trust Claim

U.S. Civil Cases Only