Business Law Newsletter

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• Tax Treatment of Contaminated Property
  The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) imposes liability for the investigation and cleanup of contaminated real property without regard to whether the landowner created or allowed the... Read more.
• Internet Search Terms & Trademarks
  Over the past few years, Internet search engines, such as Google or Yahoo, have generated large revenues by selling advertising through sponsored links or pop-up ads. For example, businesses pay a fee to Google to have their... Read more.

• WTO Panel Finds U.S. Should Lower Tariffs By $2 Billion In Ongoing Airbus-Boeing Dispute
• Trustee seeks $80 million in damages in grocery bankruptcy case
• Comcast trying to put Denver sports channel out of business, lawsuit alleges
• FCC hands AT&T a win in dispute with TV stations
• Yacht placed ‘under arrest’ at boat show over $4 million dispute

Fraudulently Transferred Property & Constructive Trusts

A constructive trust is a remedy imposed by a court when a person has wrongfully attained property in an inappropriate way. The court will undo the transaction and order that title to the property go to the rightful owner.

Types of Wrongful Conduct

Any wrongful activity that leads to the unfair obtainment of property may be cause for a constructive trust, including:

• Fraud (including forgery)
• Theft (including embezzlement)
• Accident
• Mistake
• Undue influence
• Violation of fiduciary duty (for example, where a partner purchases property in his own name rather than in the name of the partnership)

Factors

In order for a constructive trust to be created, the following factors must exist:

• Fraudulent representations or concealment of important and material information, or breach of trust
• Acts such as transfer of property as a result of the fraud or breach
• Profit and/or unjust enrichment as a result of fraudulent representation or concealment of important and material information

Remedy Under Constructive Trusts

A constructive trust is imposed when an affected party initiates a lawsuit requesting relief. It typically provides that the property pass from the wrongful owner to the rightful owner.

However, if the unlawful owner has damaged or destroyed any of the property, the rightful owner is entitled to a money judgment for the value of the property.

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