This was originally posted on the SGR Blog.
Brother Sues to Evict Sister from Apartment
I often report about decisions involving inter-generational family disputes. But, as a recent case illustrates, the Court may be called upon to adjudicate an intra-generational quarrel.
Leo Yau and Lucy Yau are siblings. Leo, the apartment owner in a residential condominium, allowed Lucy to live in the unit. Lucy made payments for her occupancy that “covered” Leo’s costs, including his mortgage and monthly maintenance. Leo reserved one of the two bedrooms in the apartment for his own occasional use. And Lucy made occasional payments directly to the condominium board for maintenance and repairs to the apartment.
Leo filed a holdover proceeding. Lucy asserted the affirmative defense of “constructive trust.” Following a trial, Civil Court awarded possession of the apartment to Leo and Lucy appealed.
A claim of a constructive trust may be asserted as an affirmative equitable defense to a summary proceeding. A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him or her into a trustee.
To obtain the remedy of a constructive trust, a party is generally required to establish four factors, or elements, by clear and convincing evidence of (1) confidential or fiduciary relationship; (2) promise; (3) transfer in reliance thereon; (4) unjust enrichment flowing from the breach of the promise
These factors, or elements, serve only as a guideline, and a constructive trust may still be imposed even if all four elements are not established, provided that those factors are substantially present.
Here, Lucy failed to establish that the elements of a constructive trust were substantially present. Although the parties, as familial relatives, shared a confidential relationship, there was no evidence that Leo made a promise to Lucy, express or implied, that she would have an interest in the apartment. Nor was there evidence that Lucy’s payments to either Leo or the condominium board were made in reliance upon such a promise.