J. Steven Tikalsky v. Susan Friedman
928 N.W.2d 502
Wis.2019Background
- Donald and Betty Lou Tikalsky executed estate plans (1999, then revised 2007–2009) that ultimately disinherited their son J. Steven Tikalsky (Steven); Steven only learned of the 2009 disinheritance after Donald's death in 2009.
- Steven sued siblings Susan, James, and Terry for multiple claims including undue influence, intentional interference with expected inheritance, unjust enrichment, conversion/fraud, and sought imposition of a constructive trust on funds each sibling received.
- Prior to summary judgment Steven voluntarily dismissed several claims (including unjust enrichment and conversion as to defendants), leaving: (a) intentional interference with expected inheritance (against Susan and James); (b) constructive trust (pleaded as a cause of action against all defendants, including Terry).
- The circuit court granted summary judgment dismissing Terry with prejudice, reasoning constructive trust is unsupported absent the unjust enrichment claim; the court of appeals reversed as to the constructive trust remedy. Terry petitioned to the Wisconsin Supreme Court.
- The Wisconsin Supreme Court held: (1) a constructive trust is a remedy, not an independent cause of action; (2) a constructive trust can attach to property held by an innocent transferee in particular circumstances (e.g., where the transferor violated a duty to the plaintiff), but here Steven pleaded no viable cause of action against Terry or other grounds to impose such a trust on Terry’s property; dismissal of Terry was therefore proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is "constructive trust" a standalone cause of action or a remedy? | Tikalsky argued label is immaterial and constructive trust may be pursued if facts at summary judgment justify it. | Stevens argued constructive trust is only a remedy and cannot be an independent cause of action. | Held: Constructive trust is a remedy, not a cause of action. |
| Could a constructive trust be imposed on property held by an innocent transferee here? | Tikalsky argued he could reach Terry’s property because Susan and James allegedly wrongfully influenced parents and converted his share; thus remedy could follow the property. | Stevens argued no duty was violated by the parents to Steven and there is no viable underlying claim against Terry to support a trust. | Held: Constructive trust can reach innocent holders in narrow circumstances (e.g., transferor violated duty), but those circumstances are not present here; no trust may be imposed on Terry’s property. |
| Did Steven’s dismissal of unjust enrichment and conversion claims defeat his constructive-trust request against Terry? | Tikalsky contended dismissal of labels should not foreclose equitable relief if underlying facts support it. | Stevens contended the operative unjust-enrichment/conversion claims (the causes of action) were dismissed, leaving no predicate for the remedy. | Held: Because the unjust enrichment and conversion claims were voluntarily dismissed, no viable underlying cause remains to support a constructive trust against Terry. |
| Was the circuit court’s dismissal of Terry on summary judgment proper? | Tikalsky maintained there were factual disputes and allegations that could support imposition of a constructive trust on Terry’s property. | Stevens maintained no cause of action remained against her and she was properly dismissed with prejudice. | Held: The circuit court did not err; dismissal of Terry with prejudice was affirmed (court of appeals reversed, Supreme Court reversed the court of appeals). |
Key Cases Cited
- Green Spring Farms v. Kersten, 136 Wis. 2d 304 (standard for reviewing pleadings and summary judgment) (framework for summary judgment review)
- Goetz v. State Farm Mut. Auto. Ins. Co., 31 Wis. 2d 267 (distinguishing causes of action from remedies) (defines remedy vs cause of action)
- Richards v. Richards, 58 Wis. 2d 290 (constructive trust follows property and may reach innocent transferees absent bona fide purchaser status) (illustrative innocent-beneficiary line of cases)
- Gorski v. Gorski, 82 Wis. 2d 248 (constructive trust requires unjust enrichment plus an additional wrongdoing factor) (articulates additional showing required beyond unjust enrichment)
- Wilharms v. Wilharms, 93 Wis. 2d 671 (constructive trust limited to particular circumstances; held tied to unjust enrichment and violated duty scenarios) (explains limits of constructive trust remedy)
- Prince v. Bryant, 87 Wis. 2d 662 (constructive trust as equitable remedy imposing additional factors beyond unjust enrichment) (reinforces requirement of unconscionable conduct)
- Sulzer v. Diedrich, 263 Wis. 2d 496 (2003 WI 90) (discusses two-step inquiry for constructive trust and equitable remedies) (procedure for considering constructive trust)
- Bautista v. Schneider, 16 Wis. 2d 304 (constructive trust used to protect beneficial interests against legal title holders) (early statement of purpose of constructive trust)