Jack O. Parris v. Denise Leifels

In this case regarding the imposition of a constructive trust on certain real
property, the dispositive facts have been stipulated by the parties. Jack O. Parris
is the former father-in-law of Denise Leifels, who married Parris' son on
October 21, 1978. Parris gave his son and Leifels an undeveloped parcel of
property, and the newlyweds built a home there using the proceeds of a
construction loan. In 1979, Parris loaned his son and Leifels enough money to
pay off this construction loan, and, in return, Parris' son and Leifels executed
a security deed on the property in favor of Parris. Parris' son and Leifels made
nine mortgage payments to Parris in 1980, but never made any other payments
on the loan. Leifels paid the property taxes on the property each year.

During times when Leifels' relationship with her husband was strained,
Parris promised her that, if she ever got divorced, she would continue to be able
to use the marital property for herself and her children. In 2000, Leifels filed for
divorce, and the final divorce decree awarded her possession of the property
until her youngest child graduated from high school. Until that time, Leifels'
husband was required to make mortgage payments and maintain the home. After
the youngest child's graduation, the divorce decree stated that the property was
to be sold, and Leifels would receive one-half of the proceeds, not reduced by
any indebtedness.

When notified about the divorce, Parris began demanding loan payments.
Some time afterwards, Leifels remarried and moved off the property.

Afterwards, Parris foreclosed, buying the property himself at the foreclosure
sale. It is undisputed that this foreclosure was proper and legal. Following the
foreclosure, Leifels filed a request that a constructive trust be imposed over the
property, alleging only generally that equitable principles would be violated if
Parris were allowed to remain sole owner. On May 9, 2005, the trial court ruled
in favor of Leifels, finding that the imposition of a constructive trust was
necessary to prevent Parris from being unjustly enriched. Parris now contends
that this ruling is erroneous.

OCGA § 53-12-93 (a) provides: "A constructive trust is a trust implied
whenever the circumstances are such that the person holding legal title to the
property, either from fraud or otherwise, cannot enjoy the beneficial interest in
the property without violating some established principle of equity." With
regard to interests in real property, a constructive trust generally may not be
imposed based solely on a broken verbal promise to hold or transfer the land for
the benefit of another. Mays v. Perry, 196 Ga. 729 (27 SE2d 698) (1943). To
hold otherwise would wholly undermine the Statute of Frauds. Id. A broken
verbal promise may be the basis of a constructive trust, however, if it was
fraudulently made "with the intention of being broken and for the purpose of
thereby obtaining title." Id. at 736. See also Westbrook v. Westbrook, 212 Ga.
472 (93 SE2d 683) (1956) (no constructive trust over real property where
plaintiff made no allegation that verbal promise was made with intention of later
breaking it).

In the matter now before us, Leifels' case rests solely on Parris' broken
verbal promise to allow her to continue to inhabit the property following her
divorce from his son. There is no allegation in Leifels' pleadings or evidence in
the record, however, that Parris made this promise with the intention of later
breaking it so that he could take Leifels' interest in the property. In fact, the
record shows that Leifels voluntarily left the property, despite any prior
arrangement with Parris, and Parris never ultimately broke his promise to allow
Leifels to use the home. As such, the facts do not support the imposition of a
constructive trust against Parris, and the trial court's order imposing such a trust
must be reversed.

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http://www.gasupreme.us/pdf/s05a1614.pdf

Judgment reversed. All the Justices concur.

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