J. Steven Tikalsky v. Susan Friedman

2019 WI 56, 928 N.W.2d 502, 386 Wis. 2d 757
CourtWisconsin Supreme Court
DecidedMay 23, 2019
Docket2017AP000170
StatusPublished
Cited by18 cases

This text of 2019 WI 56 (J. Steven Tikalsky v. Susan Friedman) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J. Steven Tikalsky v. Susan Friedman, 2019 WI 56, 928 N.W.2d 502, 386 Wis. 2d 757 (Wis. 2019).

Opinions

DANIEL KELLY, J.

*764¶1 In a vigorous dispute over the distribution of Donald and Betty Lou Tikalsky's estate, J. Steven Tikalsky sued his sister, Terry Stevens, to obtain part of the inheritance she received from their parents. His Complaint contains a count labeled "constructive trust," which he deployed against his sister as a cause of action. Terry Stevens asks us whether a "constructive trust" may play that role, and whether it may be used against those who have engaged *765in no inequitable behavior. We hold that a constructive trust is a remedy, not a cause of action. We also hold that, under the proper circumstances, a constructive *506trust may be imposed on property in the possession of one who is wholly innocent of any inequitable conduct. But because the Complaint in this case does not state a cause of action against Terry Stevens, nor assert any other grounds upon which a constructive trust could be imposed, the circuit court properly dismissed her from the case with prejudice. We reverse the court of appeals' decision reversing the circuit court.1

I. BACKGROUND

¶2 Donald and Betty Lou Tikalsky (jointly, the "Tikalskys," and individually, "Mr. Tikalsky" and "Mrs. Tikalsky," respectively) jointly developed an estate plan that included the "Donald J. Tikalsky and Betty Lou Tikalsky Revocable Trust dated January 15, 1999" (the "1999 Trust"), as well as two associated wills (the "Wills"). The 1999 Trust and Wills provided that, when the Tikalskys had both passed, the bulk of their estate would be divided equally between their four children: J. Steven Tikalsky ("Steven"); Susan Friedman ("Susan"); Terry Stevens ("Terry"); and James Tikalsky ("James").2

¶3 A few years after execution of the 1999 Trust and Wills, the relationship between Steven and his parents started deteriorating. Eventually, they became *766estranged. A succession of amendments to the estate planning documents followed. In 2007, the Tikalskys executed the "Donald J. Tikalsky and Betty Lou Tikalsky Revocable Trust" (the "2007 Trust") as a replacement for the 1999 Trust.3 Unbeknownst to Steven, the 2007 Trust provided that "J. Steven Tikalsky and his children are intentionally left out of this bequest or any bequest under this document." The Tikalskys amended the 2007 Trust in 2008; the amendment provided that "[i]t is the intent of Donald J. Tikalsky and Betty Lou Tikalsky that J. Steven Tikalsky be eliminated completely from this Trust or any Wills or the estate of the parties."4 The Tikalskys amended and restated the 2007 Trust the final time in April of 2009. Mr. Tikalsky died approximately five months later, at which time Steven first learned that his parents had disinherited him and his family. Mrs. Tikalsky died in 2014, five years after her husband.

¶4 Steven believes two of his siblings, Susan and James, wrongfully caused his estrangement from his parents and his subsequent disinheritance. His Complaint seeking redress for the latter injury named not just Susan and James as defendants, but Terry as well.5 Steven asserted *507nine claims: (1) a request for a *767declaration that his parents lacked capacity to execute their respective testamentary documents; (2) a request for a declaration that Susan and James exercised undue influence over his parents in the drafting and execution of their testamentary documents; (3) intentional interference with expected inheritance; (4) common law conversion/fraud; (5) statutory theft in violation of Wis. Stat. §§ 895.446 (2015-16)6 and 943.20; (6) unjust enrichment; (7) civil conspiracy; (8) punitive damages; and (9) constructive trust. The cardinal numbers in this list correspond to the numbered causes of action in Steven's Complaint. As we trace the disposition of each of these counts, we will maintain the cardinal number associated with each one to assist with clarity.

¶5 After his siblings moved for summary judgment, Steven voluntarily dismissed five of the Complaint's nine counts and acknowledged that "punitive damages" is not a cause of action.7 Consequently, when the circuit court considered the summary judgment motion, the remaining claims were: (2) undue influence; (3) intentional interference with expected inheritance; and (9) constructive trust. Neither count two nor three alleged anything against Terry. The ninth count (constructive trust) referred to Terry only obliquely (inasmuch as she was one of the defendants):

*768143. The funds that constituted a one-quarter share in Donald and Betty Lou's joint estate plan and were converted from Steven to the defendants were at all times after the conversion held by the defendants in constructive trust for Steven.
144. Steven therefore now holds a beneficial property interest in all funds converted by the defendants. To the extent that the defendants spent or otherwise disposed of funds since the conversion beginning in or around April 8, 2009, a legal presumption exists that the funds spent came from monies other than those funds converted, and that any assets now in the defendants' possession are the subject of Steven's constructive trust to the maximum extent. In addition, the converted funds remain in constructive trust in the hands of all persons who knew or had reason to know the funds were converted.

¶6 The circuit court granted summary judgment against Steven on counts two (undue influence) and nine (constructive trust). With respect to dismissal of the claim for constructive trust, the circuit court said:

Plaintiff Steven urges the Court to keep the constructive trust cause of action because the defendants were unjustly enriched and he is, therefore, entitled to the equitable remedy of a constructive trust. But as just noted by the Defendants, Plaintiff Steven voluntarily dismissed his unjust enrichment cause of action. So accordingly this cause of action for constructive trust is unsupported. Summary judgment dismissing this cause of action is granted.

¶7 The circuit court denied the summary judgment motion with respect to count three (intentional interference with expected *508inheritance), which left this as the sole remaining claim in the case. Because this count asserted nothing against Terry, the circuit court *769dismissed her from the lawsuit with prejudice. The order of dismissal was final as to Terry, and Steven appealed in due course.8

¶8 Steven named Terry as the only respondent; neither of his other siblings participated in the appeal in any capacity.

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Bluebook (online)
2019 WI 56, 928 N.W.2d 502, 386 Wis. 2d 757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-steven-tikalsky-v-susan-friedman-wis-2019.