Chassels v. Krepps
174 A.3d 896
| Md. Ct. Spec. App. | 2017Background
- Father and Mother divorced in 2006; their Separation Agreement required each parent to maintain a $250,000 life insurance policy naming the other parent as trustee beneficiary and made the party’s estate liable if the obligation was not met.
- Mother later married Husband; Husband handled family finances and, while in the military, paid for life insurance premiums that covered Mother.
- After Husband left the military, he stopped paying the premiums, the policy lapsed, and Mother died in 2015; no estate appears to have been opened and the $250,000 policy proceeds were not paid to Child.
- Father (on behalf of Child) sued Husband and Mother’s Estate asserting six counts: concealment/non-disclosure, negligent concealment, constructive fraud, constructive trust, negligence, and unjust enrichment.
- The trial court dismissed most counts and initially allowed amendment only as to unjust enrichment; after amendment the court dismissed all claims with prejudice. Father appealed.
Issues
| Issue | Plaintiff's Argument (Chassels) | Defendant's Argument (Krepps) | Held |
|---|---|---|---|
| Whether Husband owed a duty to Child for concealment/non-disclosure | Husband assumed responsibility for compliance with the divorce agreement and represented he would ensure coverage, creating a duty to disclose lapse | Husband was not party to the separation agreement and owed no duty to Child | Dismissal was premature; plaintiff may amend Counts I, II, V to attempt to plead an assumed duty (vacated and remanded) |
| Whether a confidential relationship (supporting constructive fraud) existed between Husband and Child | Husband’s control of finances and assurances to Father created confidences sufficient for constructive fraud | No confidential relationship existed; familial ties alone insufficient here | No confidential relationship pled; constructive fraud and constructive trust claims dismissed (affirmed) |
| Whether a constructive trust is an independent cause of action | N/A (Claim pressed as remedy based on alleged wrongdoing) | A constructive trust is an equitable remedy, not a standalone cause of action | Constructive trust is a remedy, not a claim; Count IV properly dismissed (affirmed) |
| Whether unjust enrichment was sufficiently pleaded against Husband | Husband retained the benefit (saved premium payments) knowingly and inequitably, so unjust enrichment claim lies | Husband was not enriched by Mother’s death and policy proceeds were never received | Unjust enrichment adequately alleged as to unpaid premiums; dismissal reversed and remanded (plaintiff may recover premiums/gain, not insurance proceeds) |
Key Cases Cited
- Blondell v. Littlepage, 413 Md. 96 (elements of concealment/non-disclosure tort)
- Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP, 451 Md. 600 (negligent misrepresentation and requirements for liability)
- UBS Fin. Servs., Inc. v. Thompson, 217 Md. App. 500 (assumption of duties by interjecting oneself into performance of obligations)
- Thompson v. UBS Financial Services, Inc., 443 Md. 47 (constructive fraud and duties arising from confidences)
- Jacques v. First Nat’l Bank, 307 Md. 527 (elements and proximate-nexus requirements for economic-loss negligence)
- County Comm’rs of Caroline Cnty v. J. Roland Dashiell & Sons, Inc., 358 Md. 83 (definition and elements of unjust enrichment)
- Wimmer v. Wimmer, 287 Md. 663 (constructive trust as available equitable remedy)