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Civil Remedies to Consider when
Representing the Elderly Client
- Breach of Fiduciary Duty
- Claim and Delivery
- Constructive Trust
- Conversion
- Negligence
- Predatory
Lending/Foreclosure Rescue Scams, a Professional's Guide
- Unjust Enrichment
Breach
of Fiduciary Duty
A fiduciary relationship exists when there is “a reposing of
faith, confidence and trust and the reliance of one upon the judgment
and advice of another.” Vicencio v Ramirez, 211 Mich. App. 501,
508; 536 N.W.2d 280 (1995). Because of the elderly often rely
on others for assistance they are more likely to misplace their
trust which may result in a breach of fiduciary duty claim.
When a fiduciary duty has been established, the fiduciary must
“act for the benefit of the other with regard to matters within
the scope of the relation.” Teadt v Lutheran Church Missouri Synod,
237 Mich. App. 567, 581; 603 N.W.2d 816 (2000). A plaintiff is
entitled to relief under a breach of fiduciary claim when the
“position of influence has been acquired and abused or, when confidence
has been reposed and betrayed. Vicencio, supra at 508.
Abuse by conservator on estate, guardian ad litem, fiduciary:
1. A fiduciary is liable for a loss to an estate for:
a. embezzlement by the fiduciary;
b. a loss through commingling estate money with the fiduciary's
money;
c. negligence in the handling of an estate;
d. loss through self-dealing. MCL
700.1308(1).
2. Court may appoint a special fiduciary
a. Court may appoint a special fiduciary upon reliable information
from an interested person, or other informed source, including
the court’s files, or on its own initiative. MCL
700.1309(a); MCR 5.204(A) OR
b. Court may enjoin a person subject to the court’s jurisdiction
from conduct that unnecessarily dissipates an estate or trusts’
property or jeopardizes an interested person’s interest. MCL
700.1309(b). The enjoined person may request a prompt hearing.
3. Appointing a special fiduciary suspends the power of the
general fiduciary. MCR 5.204(B).
4. Interested party’s sample letter to the court requesting
an accounting, and/or special fiduciary.
i. Fraud perpetuated against a decedent’s estate:
1. Person injured by the fraud may obtain appropriate relief
against the perpetrator of the fraud or restitution from a person
who benefited from the fraud (except a bona fide purchaser).
MCL
700.1205(3).
2. The statute of limitations for an action of fraud against
a decedent’s estate is two years after discovery of the fraud.
The statute of limitations is 5 years for actions against those
who benefited from the fraud. MCL
700.1205(3).
3. If person wrongfully embezzles or wrongfully converts a decedent’s
property before authority over decedent’s property is granted
or denied, that person is liable to the estate for double the
value of the property embezzled, converted or withheld. MCL
700.1205(4).
ii. Definitions:
1. Agent: includes, but is not limited to, an attorney-in-fact
under a durable or nondurable power of attorney and an individual
authorized to make decisions as a patient advocate concerning
another's health care. MCL
700.1103(a)
2. Fiduciary: includes, but is not limited to, a personal representative,
guardian, conservator, trustee, plenary or partial guardian
appointed as provided in chapter 6 of the mental health code,
1974 PA 258, MCL 330.1600 to 330.1644, and successor fiduciary.
M.C.L. 700.1104(e) [return to top]
Claim and
Delivery
A claim and delivery action is used to recover goods that have
been unlawfully taken and to recover damages incurred as a result
of the unlawful taking or detention. MCL
600.2920
5. MCL 600.2920
a. Sec. 2920. (1) A civil action may be brought to recover possession
of any goods or chattels which have been unlawfully taken or unlawfully
detained and to recover damages sustained by the unlawful taking
or unlawful detention, subject to the following conditions:
(a) An action may not be maintained under this section to recover
possession of or damages for goods or chattels taken by virtue
of a warrant for the collection of a tax, assessment, or fine
in pursuance of a statute of this state.
(b) An action may not be maintained under this section to recover
possession of or damages for goods or chattels seized by virtue
of an execution or attachment at the suit of the defendant in
the execution or attachment unless the goods or chattels are exempted
by law from execution or attachment.
(c) An action may not be maintained under this section by a person
who, at the time the action is commenced, does not have a right
to possession of the goods or chattels taken or detained.
(d) A writ, order, or process for delivery of goods or chattels
before judgment may not be issued unless the court, after notice
and a hearing and under procedures provided by rules of the supreme
court, determines that the claim for recovery is probably valid
and unless the party claiming a right to recover possession of
the goods or chattels files a sufficient bond.
(2) A person who holds books or papers pertaining to an office
and who is not the person in that office shall surrender them
to the person entitled to that office. The person entitled to
possession of the books and papers may bring an action to recover
their possession. The court may order a person to show cause why
he should not be compelled to deliver those books and papers and
may order the delivery of the books and papers.
6. MCL
600.8303
a. Sec. 8303. The district court shall have equitable jurisdiction
over forfeiture proceedings brought under chapter 47. The district
court may hear and determine a forfeiture action or a motion relating
to a forfeiture action, and may issue and enforce any order or
judgment relating to a forfeiture action, as provided in chapter
47
7. MCL
600.1605
Index
of SCAO Approved Forms for Use in Claim and Delivery Complaints
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A Constructive
Trust is:
• When there is a relationship involving a confidence or trust
which has been broken.
• Established when the evidence showing that the trust was broken
is more likely to be true than not true. The standard is satisfied
if there is greater than 50% chance that the proposition is true.
(Mackey v. Baker, 327 Mich. 57, (1950); Grasman v. Jelsema, 70
Mich.App. 745, (1976) (basis for constructive trust is a preponderance
of evidence)).
• Constructive Trust - An implied Trust establish by operation
of law. While a person may take legal title to property, equitable
considerations require that the equitable title of such property
remain with others. Typically fraud is a requirement for the establishment
of a constructive Trust, the person who took legal title to the
property did so as a result of a fraud brought upon the prior
legal title holder.
Property
• Equity has power to rule on property that has been wrongfully
obtained. This is true if the property is in the hands of the
original wrongdoer. However, a good faith purchaser without notice
of the wrongdoing is protected. (Bruso v. Pinquet, 321 Mich. 630,
(1948); Rice v. Allen, 318 Mich. 245, (1947))
• Constructive trusts occur in the following cases:
o Fraud
o Misrepresentation
o Concealment
o Undue influence
o Duress
o Taking advantage of one’s weakness or necessities
o Or other cases that make it unfair for the holder of legal
title to keep the property.
(Laude v. Cossins, 334 Mich. 622 (1952)(action to impress constructive
trust on real estate devised by will); Hicks’ Estate v. Cary,
332 Mich. 606, (1952); Burton v. Burton, 332 Mich. 326, (1952);
Plans v. Doncea’s Estate, 72 Mich. App. 202 (1976)) [return
to top]
Conversion
If someone has taken your property without your permission and
is acting like it is their own, you may be able to bring a suit
for conversion to get your property back. Conversion is when someone
acts like the property belongs to them and has either changed
the property or excluded the owner from having rights to the property.
Proof of Conversion:
- any taking of property
- any taking of control over property
- any interference indicating a claim of ownership
- any assertion of rights which really belong to the owner
You will have to prove:
- You owned the property at the time of the conversion.
- You were entitled to immediate possession.
- Another individual wrongfully took the property. It doesn’t
matter what the intent was. It is enough that the true owner
is deprived by the unauthorized act.
- You are not required to have made a demand for the property
before beginning the suit. If you do write a letter demanding
your property back and the person refuses, the letter is sufficient
evidence of a wrongful conversion of the property.
Conversion of Part Constitutes Conversion of Whole when:
- circumstances show a purpose to control or dispose of all
of the property
- whenever the remaining part is impaired in value or utility
as a result
Before filing a legal action, you may want to refer to the section
on claim and delivery on informal ways to get your property back.
You should also refer to the section on Power of Attorney.
MCL
600.2919a
(1) A person damaged as a result of either or both of the following
may recover 3 times the amount of actual damages sustained, plus
costs and reasonable attorney fees:
(a) Another person's stealing or embezzling property or converting
property to the other person's own use.
(b) Another person's buying, receiving, possessing, concealing,
or aiding in the concealment of stolen, embezzled, or converted
property when the person buying, receiving, possessing, concealing,
or aiding in the concealment of stolen, embezzled, or converted
property knew that the property was stolen, embezzled, or converted.
(2) The remedy provided by this section is in addition to any
other right or remedy the person may have at law or otherwise.
[return to top]
Negligence
The four elements of a negligence claim are:
(1) a duty owed by the defendant to the plaintiff,
(2) a breach of that duty,
(3) causation, and
(4) damages.
Haliw v Sterling Heights, 464 Mich. 297, 309-310; 627 N.W.2d
581 (2001). [return to top]
Predatory
Lending/Foreclosure Rescue Scams, a Professional's Guide
Several statutory provisions touch upon this area. The primary
ones include:
Truth in Lending Act (TILA) (15
USC 1601, et seq.)
Home Ownership and Equity Protection Act (HOEPA) (15
USC 1639, et seq.)
Real Estate Settlement Procedures Act (RESPA) (12
USC 2601, et seq.)
Consumer Mortgage Protection Act (CMPA) (MCL
445.1631, et seq.)
Michigan Credit Services Protection Act MCL
445.1821, et seq
Mortgage Brokers, Lenders and Servicers Act MCL
445.1651, et seq
Federal Credit Repair Organization Act 15
USC 1679, et seq.
Some attorneys are also turning to using doctrines like constructive
trust, constructive mortgages, or conversion, and also looking
at usury laws and cases along with aiding and abettor theories
or conspiracy theories. The State Bar of Michigan’s Consumer Law
Section has written about predatory lending in their section publication
and some of their members have tackled such cases throughout the
state. See: http://www.michbar.org/consumer/pdfs/aug06.pdf
For a recent 6th circuit court of appeals case touching upon these
issues see: Barrett v. JP Morgan Chase Bank (as successor by merger
to Bank One) Nos. 05-5035/5146 decided April 18, 2006 by Judges
Guy, Sutton and McKeague. For an article by an attorney with a
pretty simple writing style visit: http://www.pamelaw.com/FederalTruth.shtml
Additionally the National Consumer Law Center has a guide available
and more about their organization can be found at: http://www.consumerlaw.org/index.shtml
In Michigan the Attorney General of the State, Michigan’s Office
of Financial and Insurance Services, and Michigan’s Department
of Civil Rights have all expressed concerns about predatory lending
and have materials regarding these issues and/or might be empowered
to take action in some instances. If you begin to help a consumer,
gather all documents including but not limited to the following:
Mortgage, Promissory Note, Settlement Statement, Application papers,
Advertisements, and notes from clients regarding what they recall
of the transaction. Some advise clearly noting which papers came
from the consumer since the documents sent by the mortgage broker
or bank or lender later on might well vary from what the consumer
has on hand.
State Attorney General’s Office or Attorney General (Your
State)
PO Box 30213
Lansing, Michigan 48909
www.michigan.gov/ag or
www.naag.org
Department of Labor and Economic Growth/Financial and Insurance
Services www.michigan.gov/dleg
At the Federal level check out the Comptroller of the Currency
website particularly: http://www.occ.treas.gov/Consumer/combat.htm
[return to top]
Unjust
Enrichment
The elements of a claim for unjust enrichment are:
(1) receipt of a benefit by the defendant from the plaintiff;
and
(2) an inequity resulting to the plaintiff because of the retention
of the benefit by the defendant.
In a case of unjust enrichment the law operates to imply a contract
in order to prevent unjust enrichment. A contract will be implied
only if there is no express contract covering the same subject
matter.
Barber v SMH (US), Inc., 202 Mich App 366, 375; 509 NW2d 791 (1993).
[return to top]
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