Estate of Campbell
Download as PDF
Wordperfect 3
Back to Opinions page

MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1997 ME   212
Docket:	Yor-97-154
Argued:	October 8, 1997
Decided:	November 4, 1997

Panel:		WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, DANA, and LIPEZ, JJ.

ESTATE OF MARY E. CAMPBELL

DANA, J.

	[¶1]  John Campbell, a son of Mary Campbell, appeals from the
judgment of the York County Probate Court (Nadeau, J.) ordering him to
hold two parcels of real estate in a constructive trust for the benefit of
Mary's estate.  John contends that the court erred by finding that he abused
a fiduciary or confidential relationship so as to give rise to a constructive
trust and maintains that he owns one of the two parcels outright based on a
deed signed by the then owner after his mother's death.  John's brother,
Joseph Campbell, the personal representative of Mary's estate, cross-appeals
from that part of the Probate Court's amended decision that found no
constructive fraud.  Because the evidence supports the Probate Court's
finding of an abuse of a confidential relationship, we affirm the judgment.
	[¶2]  In 1987 Mary transferred her interest in two cottage properties
located in York to her son, John.  At the time of the conveyances, Mary was
85 years old, in failing health, and living in a nursing care facility in
Massachusetts.  Because Mary's liquid assets were almost depleted, John,
made inquiries of Massachusetts officials regarding how Mary could qualify
for Medicaid assistance.  On the advice of Massachusetts Medicaid
authorities and his own attorney, John arranged for Mary to transfer her two
Maine cottages into his name, thereby removing them from the assets
considered for Mary's Medicaid eligibility.  Although John had undertaken
the responsibility of making arrangements for Mary's care with the consent
of his siblings, he did not inform any of them about these transfers until
after their mother's death.
	[¶3]  Mary died intestate in 1990, and shortly thereafter a dispute
arose among her children over the proper disposition of the two York
properties.  Joseph was appointed personal representative of his mother's
estate and filed a complaint against John seeking a constructive trust over
the York properties for the benefit of the estate on the grounds of breach of
a fiduciary duty, fraud, misrepresentation, and undue influence.  Following a
testimonial hearing in March 1994, the York County Probate Court (Brooks,
J.), relying on the Improvident Transfers of Title Act, 33 M.R.S.A. §§ 1021-
25 (Supp. 1996), imposed a constructive trust on both properties.  John
appealed, and, without deciding whether a cause of action under the Act
survives the death of the transferor, we vacated the judgment because the
Act applies only to transfers made after August 4, 1988 and the conveyances
at issue here occurred in 1987.  Estate of Campbell, 651 A.2d 382, 384 (Me.
1994).
	[¶4]  On remand, and after further hearing, the court again declared
that John must hold the properties in a constructive trust for the estate of
Mary. The court found for Joseph on the abuse of the confidential
relationship count and the constructive fraud count and found for John on
the misrepresentation and undue influence counts.  After John moved to
alter or amend the judgment pursuant to M.R. Prob. P. 59, a newly elected
probate judge (Nadeau, J.) vacated the prior judge's finding supporting the
constructive fraud count.  The court upheld the imposition of a constructive
trust, however, finding sufficient evidence of John's abuse of a confidential
relationship.  This appeal and cross-appeal followed.{1}
	[¶5]  	"[A] constructive trust may be imposed to do equity and to
prevent unjust enrichment when title to property is acquired by fraud,
duress, or undue influence, or is acquired or retained in violation of a
fiduciary duty."  Gaulin v. Jones, 481 A.2d 166, 168 (Me. 1984) (citing
Chandler v. Dubey, 325 A.2d 6, 8 (Me. 1974)).  The modern rule, unlike the
traditional view, does not require a party seeking a constructive trust to
show affirmative wrongdoing.  See Horton & McGehee, Maine Civil
Remedies § 9-3, at 221 (2d ed. 1996).  "[T]he constructive trust arises by
operation of equity without regard to the parties' intentions.  Its objective is
to prevent unjust enrichment."  Id. § 9-2, at 220.
	[¶6]  The existence of a confidential relationship is a question of fact. 
Ruebsamen v. Maddocks, 340 A.2d 31, 35 (Me. 1975).  Issues of fact are
reviewed for clear error.  M.R. Civ. P. 52(a); VanVoorhees v. Dodge, 679 A.2d
1077, 1080 (Me. 1996).  "A trial court's factual finding is 'clearly erroneous'
if there is no competent evidence in the record to support it."  Id.
	[¶7]  John contends that the court committed an error of law in
holding that he retained title to the York properties in violation of a
fiduciary duty.  John, relying on Gaulin v. Jones, 481 A.2d 166 (Me. 1984),
argues that no constructive trust may be imposed in this case without clear
and convincing evidence of an agreement between Mary and John that John
would hold the property for the benefit of the other family members. 
Joseph maintains that although such a standard of proof is required to show
constructive fraud under some circumstances, the court's finding of a
breach of a fiduciary or confidential relationship does not require such a
showing.
	[¶8]  Although in Gaulin we spoke in terms of a "resulting fiduciary
relationship" arising out of an agreement by one party to hold property for
another, the term was used in that case in the context of describing the
elements of constructive fraud.  Gaulin, 481 A.2d at 169.  The elements of a
claim for a constructive trust on the independent basis of an abuse of a
confidential relationship are found in Ruebsamen v. Maddocks, 340 A.2d 31,
35 (Me. 1975). In Ruebsamen, we established the procedural steps
necessary before imposing a constructive trust based on an abuse of a
fiduciary or confidential relationship:  The party seeking the imposition of
the trust must first establish by a preponderance of the evidence the
existence of a confidential relationship between the grantor and the grantee. 
Id. at 34.

	The salient elements of a confidential relation are the
actual placing of trust and confidence in fact by one party in
another and a great disparity of position and influence between
the parties to the relation.  That the parties are related by blood
or marriage may lead a court to find that a confidential relation
exists, where there is evidence as to trusting and where the
blood or family relationship is in a close degree so that the
imposition of great trust and the letting down of all guards and
bars is natural.

Id. at 35.  The burden then shifts to the benefited party to show the fairness
of the transaction.  Id. at 36-37.
	[¶9]  The court was justified in finding the following facts regarding
the existence of a confidential relationship and its abuse:  At the time of the
1987 conveyances Mary was 85 years old and in failing health.  During the
year prior to the conveyances John was responsible for Mary's finances,
including approximately $26,000 of Mary's savings, her Social Security, and
her husband's pension of $190 a month.  The plan to transfer title of the
two properties from Mary to John was initiated by John, who proceeded to
make all of the arrangements for carrying out the plan.  John informed his
mother that by transferring the properties, the cottages would remain in the
family and be available to pay bills at the nursing home.  John did not inform
his siblings of the transfer of the properties for several years and acted in a
manner consistent with the fact that he was holding the properties for the
family; for example, even after his mother's death he accepted contributions
from his siblings toward the upkeep of the cottages.  He testified that it was
his intention to hold the properties for the family and that he changed his
mind only when a conflict developed between him and his siblings.  This
evidence is more than sufficient to support the court's finding that a
confidential relationship existed between John and his mother and that the
confidential relationship was abused.
	[¶10]  In an effort to prove the fairness of the transactions, John
contends that the conveyances were supported by good and adequate
consideration and argues that the court erred in finding that he would be
unjustly enriched by retaining the properties.  Before asking his mother to
sign over the properties to him, John hired an appraiser who valued the
"rental cottage" at $52,500 and the "family cottage" at $49,500.  He then
convinced the Massachusetts Medicaid authorities that the transfers were
not fraudulent by showing consideration for the rental cottage of $62,000
worth of goods and services that he claimed he advanced to maintain the
property over the previous year and by signing a promissory note to his
mother for $49,500 for the family cottage.
	[¶11]  The court, however, found that John's appraisals of the
properties were not trustworthy because of known market conditions and
his listing of the rental property at a price well over twice the appraised
value only three years after the appraisal.  The court also did not accept
John's testimony regarding the value of the goods and services he claimed
constituted valuable consideration for the rental property.
	[¶12]  Even assuming that it erred in not accepting the appraisals,{2}
the court's finding that John would be unjustly enriched if he were allowed
to retain the properties was not clearly erroneous.  The court found that
John's testimony regarding his expenditures for the rental cottage was "not
believable."{3}  John also testified that he discontinued making payments on
the promissory note following Mary's death. These findings support the
conclusion that John would be unjustly enriched by his retention of the
properties.
	[¶13]  John also argues that he has outright ownership of the rental
cottage based on a deed given to him by his cousin, Arlene McLaughlin
Bevilacqua.  The deed that conveyed the rental cottage to Mary in 1951 was
a Massachusetts short form deed that contained no words of inheritance. 
Prior to 1968, when Maine enacted the Short Forms Deeds Act, 33 M.R.S.A.
§ 761-775 (1988 & Supp. 1996), Maine common law required that a deed
use the technical word "heirs" to create an interest of perpetual duration in
land by deed to an individual.  See Hall v. Hall, 106 Me. 389, 391, 76 A. 705,
706 (1910); Brown v. Dickey, 106 Me. 97, 103, 75 A. 382, 385 (1909). 
Without this word, the deed conveyed only a life estate to the grantee, no
matter how plainly the deed expressed an interest of perpetual duration. 
O'Neill v. Williams, 527 A.2d 322, 324 (Me. 1987).  John contends that
because the deed to Mary contained no words of inheritance, Mary
possessed only a life estate and the rights to the remainder were in the
grantor, so that when Mary died in 1990 the property reverted to
Bevilacqua, the only heir of the original grantor.  According to John,
Bevilacqua's deed granted him clear and complete title to the rental cottage,
and the rental cottage cannot be considered part of Mary's estate.
	[¶14]  Assuming, without deciding, that Mary had only a life estate in
the rental property, we are not persuaded that the deed from Bevilacqua to
John should defeat the imposition of a constructive trust.  John's fiduciary
obligation arose out of his confidential relationship with Mary during her
life, and we are presented with no compelling argument that the obligation
should not continue for the benefit of her estate at her death.  John's
procurement of the curative deed occurred while he was subject to this
obligation and has no effect on the equity power of the court to impose a
constructive trust in these circumstances.{4}
	The entry is:
					Judgment affirmed.
Attorney for appellant:

Edward J. Titcomb. Esq., (orally)
Titcomb, Marass, Flaherty & Knight
P O Box 311
Sanford, ME 04073-0311

Attorney for appellee:

Jeffrey W. Jones, Esq., (orally)
Jones & Warren, P.A.
P O Box 1270
Scarborough, ME 04070-1270

FOOTNOTES******************************** {1}. Neither party appeals from the court's findings in John's favor on the misrepresentation and undue influence counts. {2}. Joseph did not present any appraisals of his own regarding the value of the properties. {3}. John testified that he supplied $62,000 worth of goods and services toward upkeep of the rental cottage in the year prior to the conveyance, but expended only $30,000 over the five years prior to the hearing. He also testified that he included the money expended on his mother's nursing care in the $62,000 figure, a significant amount of which came from his mother's own income and savings over which he had control. {4}. Because we affirm the imposition of a constructive trust on the basis of a breach of confidential relationship, we do not address Joseph's cross-appeal on the issue of constructive fraud.