Posted by Nydia Streets of Streets Law in Florida Florida Divorce
What is a constructive trust in a Florida divorce? This is a remedy available to a party who claims ownership to property which is titled in someone else’s name. For example, a court may impose a constructive trust in favor of a spouse when a marital home is titled in the name of someone other than the spouses, such as in-laws or other relatives. This was an issue in the case Silvas v. Silvas, 4D21-373 (Fla. 4th DCA February 16, 2022).
Before the parties were married, the former husband purchased real estate and titled it only in his name. The former husband eventually transferred title to the property to his father’s name and testified that he intended to build a home on the property for his parents. The former wife countered that the home was purchased for the parties to raise their children in, and that the former husband’s father was only placed on title for purposes of securing a construction loan. After hearing testimony from a contractor who said she discounted her fee as a wedding gift to the couple, and that she never interacted or consulted with the former husband’s father in building the home, the trial court found the former wife’s version of events to be more credible. It imposed a constructive trust in favor of the former wife and ordered that the property be partitioned with her receiving 50% of the value of the home. The former husband appealed.
The appellate court upheld the trial court’s determination that a constructive trust was proper. It noted “‘To impose a constructive trust, there must be (1) a promise, express or implied, (2) transfer of the property and reliance thereon, (3) a confidential relationship and (4) unjust enrichment.’ Provence v. Palm Beach Taverns, Inc., 676 So. 2d 1022, 1025 (Fla. 4th DCA 1996). Moreover, there must be “clear and convincing evidence” on the record establishing the factors needed to prove a constructive trust. Saporta v. Saporta, 766 So. 2d 379, 381 (Fla. 3d DCA 2000).”
The appellate court analyzed all four elements of a constructive trust in this case, holding “First, the testimony of both Former Husband and Former Wife showed the existence of the implied promise that the house was intended to be their marital home where they planned on raising their children during the marriage. Second, while Former Wife did not contribute funds to buy the property, like in Saporta, clear and convincing evidence showed that Former Wife assisted with the design and construction of the home and made mortgage payments with Former Husband during the marriage. Additionally, the couple included the home on their marital tax returns. See id. Third, a confidential relationship existed and was supported by the trial court’s finding that the Former Husband and Former Wife were married with two children, lived in the house that they constructed together, and jointly paid mortgage payments. See id. Fourth, the record supported the court’s conclusion that failure to impose a constructive trust on the marital home would result in the unjust enrichment of Former Husband. See id.” (some internal citations omitted).
The court concluded “Although we disagree with Former Husband that imposing the constructive trust was improper, we do agree that the trial court erred by failing to account for Former Husband’s contribution of nonmarital funds towards the initial purchase of the property before the marriage. Because it was undisputed that Former Husband bought this property using his personal assets before the marriage, the trial court erred in awarding an equal split of the home’s sale proceeds without taking into consideration the value of the couple’s respective nonmarital contributions to the property.”
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