Can Utah courts impose constructive trusts without confidential relationships? LeFevre v. Stout Explained

In LeFevre v. Stout, the Utah Court of Appeals clarified that constructive trusts can be imposed as equitable remedies even when traditional requirements for oral express trusts are not met, expanding the availability of this powerful remedy for preventing unjust enrichment.

Background and Facts

After Harold LeFevre died intestate, his widow Ellen orally agreed with Harold’s children from his first marriage that they would inherit the family home upon her death. Ellen created a trust and transferred the home into it, but later amended the trust to exclude the LeFevre children entirely, leaving the property to her own children. The LeFevre children discovered this change only after Ellen’s death and challenged the transfer.

Key Legal Issues

The central issue was whether a constructive trust could be imposed when the parties lacked the confidential relationship typically required for oral express trusts under Restatement (Second) of Trusts § 44. The court also addressed whether the LeFevre children’s claims were properly pleaded and whether they were entitled to attorney fees.

Court’s Analysis and Holding

The court distinguished between two types of constructive trusts: those arising at law to enforce oral express trusts (requiring confidential relationships) and those imposed in equity to prevent unjust enrichment. Following Parks v. Zions First National Bank, the court held that equitable constructive trusts require only: (1) a wrongful act, (2) unjust enrichment, and (3) specific traceable property. The court affirmed the trial court’s imposition of a constructive trust but remanded to determine whether the LeFevre children received a windfall requiring disgorgement.

Practice Implications

This decision provides Utah practitioners with greater flexibility in pursuing constructive trust remedies. Even when oral express trusts fail due to lack of confidential relationships or other deficiencies, litigants may still obtain relief through equitable constructive trusts based on unjust enrichment theories. However, practitioners should be prepared to address potential windfall issues and ensure proper notice of constructive trust claims, even if formal pleading amendments are denied.