J. Steven Tikalsky, Plaintiff-Appellant,
Susan Friedman a/k/a Susan Tikalsky, James Tikalsky and Amended and Restated Donald and Betty Lou Tikalsky Revocable Trust, Defendants, Terry Stevens, Defendant-Respondent-Petitioner.
SUBMITTED ON BRIEFS, ORAL ARGUMENT: November 7, 2018
of Appeal Circuit Court Waukesha County, L.C. No. 2015CV1733,
Maria S. Lazar Judge.
OF DECISION OF THE COURT OF APPEALS Reported at 382 Wis.2d
830, 917 N.W.2d 232
the defendant-respondent-petitioner, there were briefs filed
by Dean P. Laing, and O'Neil, Cannon, Hollman, DeJong
& Laing S.C., Milwaukee. There was an oral argument by
Dean P. Laing.
the plaintiff-appellant, there was a brief filed by Mark J.
Mingo and Mingo Yankala, S.C., Milwaukee; with whom on the
brief was Thomas C. Armstrong and Cabaniss Law, Milwaukee.
There was an oral argument by Mark J. Mingo.
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 in 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 trust 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.
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").
A few years after execution of the 1999 Trust and Wills, the
relationship between Steven and his parents started
deteriorating. Eventually, they became estranged. 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. 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." 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. Tikalksy died in 2014,
five years after her husband.
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. Steven asserted nine claims: (1)
a request for a declaration 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) 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.
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.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):
143. 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
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.
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.
The circuit court denied the summary judgment motion with
respect to count three (intentional interference with
expected inheritance), which left this as the sole remaining
claim in the case. Because this count asserted nothing
against Terry, the circuit court dismissed her from the
lawsuit with prejudice. The order of dismissal was final as
to Terry, and Steven appealed in due course.
Steven named Terry as the only respondent; neither of his
other siblings participated in the appeal in any capacity.
The sole issue he presented to the court of appeals was the
circuit court's dismissal of count nine (constructive
trust) as against Terry. The "Statement Of The
Issue" in his opening brief asked: "Did the trial
court err in dismissing Steven Tikalsky's cause of action
seeking to impose a constructive trust on inheritance alleged
to be wrongfully distributed to the defendant Terry Stevens,
on the basis that Steven Tikalsky previously dismissed his
cause of action for unjust enrichment?" The circuit
court did err, the court of appeals said. Although the cause
of action for unjust enrichment was gone, the court of
appeals concluded that Steven had nevertheless
"presented enough material on summary judgment to
continue seeking a constructive trust." Tikalsky v.
Stevens, No. 2017AP170, unpublished slip op., ¶2
(Wis. Ct. App. May 30, 2018) . According to the court of
appeals, a constructive trust remained as a "permissible
equitable remedy" as to Terry because Steven alleged
"some measure of untoward conduct on the part of Susan
and James," and therefore "the factual claims
undergirding the potential remedy of a constructive trust
have been sufficiently established at this stage of the
proceedings." Id. The court of appeals reversed
the circuit court's order dismissing Terry from the case.
We granted Terry's petition for review and now reverse
the court of appeals.
STANDARD OF REVIEW
We review the disposition of a motion for summary judgment de
novo, applying the same methodology the circuit courts apply.
Green Spring Farms v. Kersten, 136 Wis.2d 304, 315,
401 N.W.2d 816 (1987); Borek Cranberry Marsh, Inc. v.
Jackson Cty., 2010 WI 95, ¶11, 328 Wis.2d 613, 785
N.W.2d 615 ("We review the grant of a motion for summary
judgment de novo . . . ."). While our review is
independent from the circuit court and court of appeals, we
benefit from their analyses. See Preisler v. General Cas.
Ins. Co., 2014 WI 135, ¶16, 360 Wis.2d 129, 857
"The first step of that [summary judgment] methodology
requires the court to examine the pleadings to determine
whether a claim for relief has been stated." Green
Spring Farms, 136 Wis.2d at 315. "In testing the
sufficiency of a complaint, we take all facts pleaded by
plaintiff  and all inferences which can reasonably be
derived from those facts as true." Id. at 317.
And we liberally construe pleadings "with a view toward
substantial justice to the parties." Id.
(citing Wis.Stat. § 802.02(6)).
Under the second step of this methodology, "[i]f a claim
for relief has been stated, the inquiry then shifts to
whether any factual issues exist." Id. at 315.
Summary judgment is appropriate only "if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law." Wis.Stat. § 802.08(2); see also Columbia
Propane, L.P. v. Wis. Gas Co., 2003 WI 38, ¶11, 261
Wis.2d 70, 661 N.W.2d 776 (quoting and applying Wis.Stat.
§ 802.08 (2) (2001-02)).
Terry says the circuit court correctly dismissed her from the
case because the Complaint's only claim against her was
for a constructive trust. This is a remedy, not a cause of
action, she says, and the former may not be imposed in the
absence of the latter. Steven says a constructive trust's
legal taxonomy is of no moment; all that matters is whether
the facts presented at summary judgment justify its
imposition. The court of appeals agreed: "Though the
parties spend considerable time debating whether constructive
trust should be labeled a cause of action or a remedy, the
answer to that question is largely immaterial."
Tikalsky, 2017AP170, unpublished slip op., ¶7.
At the most basic level, Steven and the court of appeals are
right. A complaint's success does not depend on accurate
labeling. When we "examine the pleadings to determine
whether a claim for relief has been stated," Green
Spring Farms, 136 Wis.2d at 315, we focus on the factual
allegations, not the plaintiff's characterization of
their legal significance.Shelstad v. Cook, 77 Wis.2d
547, 553, 253 N.W.2d 517 (1977) ("The theory of the
plaintiff's case is not controlling. A plaintiff is bound
by the facts alleged, not by his theory of recovery.") .
Not even misidentifying the cause of action will distract us
from our independent assessment of the factual
allegations' legal consequences: "Neither any
misstatement as to the precise nature of the wrong, as
classible by common law names, or misstatement as to the kind
of relief, or mere indefiniteness of statement are of any
particular moment, as regards either sufficiency of cause or
proper joinder of causes of action." Weinstein v.
McCabe, 43 Wis.2d 76, 80, 168 N.W.2d 210 (1969). See
also Bieri v. Fonger, 139 Wis. 150, 153, 120 N.W. 862
(1909) ("If facts are stated constituting a good cause
of action, though not the one the pleader intended, the
pleading is good as against a general demurrer.")
While Steven is right about our responsibility to look past
labels, that does not mean we may treat causes of action and
remedies as if they were the same thing. It just means we do
not depend on the complaint to properly label the claims or
to marshal the supporting facts into a logically cogent
grouping. Even as we look past such formalities, we still
distinguish between causes of action and remedies: "A
cause of action is distinguished from a remedy which is the
means or method whereby the cause of action is
effectuated." Goetz v. State Farm Mut. Auto
Ins. Co., 31 Wis.2d 267, 273-74, 142 N.W.2d 804 (1966)
(citation omitted), 
The distinction is important, especially at the summary
judgment stage, because the court must determine whether the
alleged facts comprise one or more causes of action. The
substantive law governing a cause of action tells us what
types of facts a plaintiff must allege. If the facts satisfy
all of the constitutive elements of the claim, then the
complaint has stated a good cause of action and the analysis
may proceed to the second step in the summary judgment
To state a claim upon which relief may be granted, the
plaintiff's allegations must be informed by the theory of
liability: "In sum, Twombly makes clear
the sufficiency of a complaint depends on [the] substantive
law that underlies the claim made because it is the
substantive law that drives what facts must be pled.
Plaintiffs must allege facts that plausibly suggest they are
entitled to relief."
Springer v. Nohl Elec. Prod. Corp., 2018 WI 48,
¶35, 381 Wis.2d 438, 912 N.W.2d 1');">912 N.W.2d 1 (quoting Data Key
Partners v. Permira Advisers LLC, 2014 WI 86, ¶31,
356 Wis.2d 665, 849 N.W.2d 693). See also Val-Lo-Will
Farms, Inc. v. Irv Azoff & Assocs., Inc., 71 Wis.2d
642, 644, 238 N.W.2d 738 (1976) ("A cause of action is
defined as an aggregate of operative facts giving rise to a
right or rights termed 'right' or 'rights of
action' which will be enforced by the courts."
(citation and some internal marks omitted)). The cause of
action is important, therefore, because it is the standard
against which we measure the sufficiency of the
complaint's factual allegations.
As we assay Steven's Complaint for a cause of action, we
will proceed in two steps. First, we will determine whether
"constructive trust" is a cause of action or,
instead, a remedy. Second, we will review Steven's
Complaint to determine whether the alleged facts, without
regard to the labels, comprise a cause of action against
Terry. The first step is necessary because if
"constructive trust" is a cause of action, we need
to identify its substantive elements so that, in the second
step, we may determine whether the alleged facts satisfy its
terms. If "constructive trust" is not a cause of
action, however, then we must determine whether the Complaint
nonetheless alleges a set of facts that comprises some other
cause of action that might warrant imposition of a
constructive trust on property in Terry's possession.
"Constructive Trust" Is A Remedy
Our first step begins with a brief word about the nature of
constructive trusts. This will not only help illuminate its
essential function (remedy versus cause of action), it will
also lay the groundwork for understanding the circumstances
in which it is available as against innocent owners.
Conceptually, a constructive trust is an equitable device
used to address situations in which the legal and beneficial
interests in a particular piece of property lie with
different people. Under proper circumstances-more about that
later-the beneficial owner may ask the court to impose a
constructive trust on the property. Hanson v.
Valdivia, 51 Wis.2d 466, 476, 187 N.W.2d 151 (1971)
("A constructive trust can only be applied to some
specific res [that is, property] to which the party has
acquired legal title."). The purpose of a constructive
trust is to protect the beneficial owner against the legal
owner: "Such a trust is implied by operation of law as a
remedial device for the protection of a beneficial interest
against one who . . . holds the legal title to property which
he ought not in equity and in good conscience beneficially
enjoy." Bautista v. Schneider, 16 Wis.2d 304,
312, 114 N.W.2d 449');">114 N.W.2d 449 (1962) . In operation, a constructive
trust reunites the beneficial and legal ownership interests
in the same person. "By means of this device, the person
equitably entitled to the res becomes the cestui que
trust and may obtain possession from the
wrongful holder, the constructive trustee." Richards
v. Richards, 58 Wis.2d 290, 297, 206 N.W.2d 134');">206 N.W.2d 134 (1973) .
See also Zartner v. Holzhauer, 204 Wis. 18, 21, 234
N.W. 508 (1931), overruled on other grounds by Glojek v.
Glojek, 254 Wis. 109, 35 N.W.2d 203 (1948) ("It is
well established that equity will afford relief at the suit
of heirs to place them in possession of, or to quiet their
title in, real property, the legal title to which is held by
another, under circumstances giving rise to a constructive
trust."); Restatement (Third) of Restitution and Unjust
Enrichment § 55 cmt. b (2011) ("Constructive trust
is a flexible device by which a court directs that property
to which B holds legal title be transferred to A.").
With those general principles as background, we can recognize
the first clue that a constructive trust is a remedy, not a
cause of action: it functions as a means of repairing divided
ownership interests, not as a means of determining whether
they are in need of repair. It is for the
"protection of a beneficial interest,"
Bautista, 16 Wis.2d at 312 (emphasis added), as
opposed to determining who owns that interest. It allows the
beneficial owner to "obtain possession from the wrongful
holder," Richards, 58 Wis.2d at 297, but it
does not establish the wrongfulness of the holding. It allows
the court to "direct that property to which B holds
legal title be transferred to A," Restatement (Third) of
Restitution and Unjust Enrichment § 55 cmt. b, but it
does not provide the basis for ousting party B from his legal
title. Constructive trust is a kinetic device that operates
on a presupposed liability. And that leads us to the second
clue, which is embedded in the way we talk about that
We commonly say that "[a] constructive trust is imposed
by a court of equity to prevent unjust enrichment arising
when one party receives a benefit the retention of which
would be unjust as against the other." Prince v.
Bryant, 87 Wis.2d 662, 667, 275 N.W.2d 676');">275 N.W.2d 676 (1979) . When
we speak of "constructive trust" and "unjust
enrichment," the pattern matches what we described in
Goetz, in which we said a "remedy" is
"the means or method whereby the cause of action is
effectuated." Goetz, 31 Wis.2d at 273. In other
words, we determine whether the defendant owes the plaintiff
an enforceable duty, and then we identify a method by which
to actualize it. We used that exact formulation in
Schmalz v. McKenna: "'Where a person
holding title to property is subject to an equitable duty to
convey it to another on the ground that he would be unjustly
enriched if he were permitted to retain it, a constructive
trust arises.'" 58 Wis.2d 220, 228, 206 N.W.2d 141');">206 N.W.2d 141
(1973) (quoting Restatement (First) of Restitution § 160
(1937)). See also Warsco v. Oshkosh Sav. & Tr.
Co., 190 Wis. 87, 90-91, 208 N.W. 886 (1926)
("'Whereever [sic] one person has wrongfully taken
the property of another, and converted it into a new form, or
transferred it, the trust arises and follows the property or
its proceeds.' It appears to us that the foregoing
quotation from Pomeroy not only constitutes good logic, but
sound law.") (emphasis omitted). A constructive trust is
what arises when the defendant violates an antecedent duty
that will leave him unjustly enriched. It is the
defendant's obligation to perform the duty that is the
cause of action. The constructive trust exists for the
purpose of providing a remedy when he fails to do so.
As an aside, it is important to note that although proving
unjust enrichment means the plaintiff is entitled to a
remedy, it does not necessarily entitle him to this
remedy. After establishing unjust enrichment, the plaintiff
must next demonstrate that a constructive trust is warranted.
"A constructive trust will be imposed only in limited
circumstances." Wilharms v. Wilharms, 93 Wis.2d
671, 678-79, 287 N.W.2d 779');">287 N.W.2d 779 (1980) . The limitation to which
Wilharms refers is the "additional
showing" a plaintiff must undertake before he may have
Despite the suggestion of this rule that unjust enrichment
alone will give rise to a constructive trust, however, the
decisions of this court have consistently required an
additional showing. A constructive trust will be imposed only
where, by means of ". . . actual or constructive fraud,
duress, abuse of confidence, mistake, commission of a wrong,
or by any form of unconscionable conduct," the one
against whom the trust is imposed "has either obtained
or holds the legal title to property which he ought not in
equity and in good conscience beneficially enjoy . . .
Gorski v. Gorski, 82 Wis.2d 248, 254-55, 262 N.W.2d
120 (1978) (quoting Baustista, 16 Wis.2d at 312) .
See also Prince, 87 Wis.2d at 667 (explaining the
factors that must be shown in addition to unjust enrichment
include "actual or constructive fraud, duress, abuse of
confidential relationship, mistake, commission of a wrong or
any form of unconscionable conduct."); Meyer v.
Ludwig, 65 Wis.2d 280, 285-86, 222 N.W.2d 679');">222 N.W.2d 679 (1974)
("[B]oth cases go beyond the unjust enrichment-only
test, suggested by the Restatement rule, to require something
additional [such as] . . . 'duress, abuse of confidence,
mistake, commission of a wrong, or by any form of
unconscionable conduct . . . . "); Masino v.
Sechrest, 268 Wis. 101, 107, 66 N.W.2d 740 (1954)
("The underlying principle of a constructive trust is
the equitable prevention of unjust enrichment which arises
from fraud or the abuse of a confidential relationship.
'A constructive trust arises if, but only if, it is shown
that the transferee was guilty of fraud or the abuse of a
confidential relationship, or if the transfer was made in
contemplation of death, or is in the nature of a
mortgage.' Scott on Trusts, vol. 3, § 481.3,
2358."). Therefore, Steven is not entitled to a
constructive trust as a remedy unless he can prove unjust
enrichment and the "additional showing"
described in Gorski.
We recognize we have not been entirely consistent in
identifying a constructive trust as a remedy. Certainly,
there have been times that we have explicitly recognized it
as such. See, e.g., Prince, 87 Wis.2d at
667-68 ("Since the doctrine of constructive trust is an
equitable remedy . . . ."); Pluemer v. Pluemer,
2009 WI.App. 170, ¶9, 322 Wis.2d 138, 776 N.W.2d 261
("A constructive trust is an equitable remedy imposed to
prevent unjust enrichment."); Conn. Gen. Life Ins.
Co. v. Merkel, 90 Wis.2d 126, 130, 279 N.W.2d 715');">279 N.W.2d 715 (Ct.
App. 1979) ("A constructive trust is an equitable remedy
. . . .") . But at other times, we have left the
impression it is a cause of action. See, e.g.,
Gorski, 82 Wis.2d at 254 ("the amended
complaint does allege facts sufficient to support a cause of
action on the theory of a constructive trust."); see
also Demos v. Carey, 50 Wis.2d 262, 269, 184 N.W.2d 117
(1971) ("[T]he facts alleged ... do not state a cause of
action for constructive trust."). To remove any
confusion about the matter, we conclude that a constructive
trust is a remedy, not a cause of action. In doing so, we
join the overwhelming majority of our sister jurisdictions
who have addressed this question.
Persistency of Constructive Trusts
Conceptually, there are two potential paths by which a person
may pursue a constructive trust against property in
another's possession. First, the plaintiff may directly
assert a claim against the defendant (as described above)
claiming she has been unjustly enriched and that the
circumstances by which the unjust enrichment arose satisfy
the "additional showing" described by
Gorski. Or second, the plaintiff may prove that the
defendant came into possession of property that was already
burdened with a constructive trust.
Once a constructive trust exists, it travels with the
property to which it attaches. So, as long as the plaintiff
can trace the property from one person to the next, he may
have this remedy until the property comes into the hands of a
bona fide purchaser for value and without notice of the
[E]quity impresses a constructive trust upon the new form or
species of property, not only while it is in the hands of the
original wrongdoer, but as long as it can be followed and
identified in whosesoever hands it may come, except into
those of a bona fide purchaser for value and without notice
Warsco, 190 Wis. at 90 (quoting 3 Pomeroy, Equity
Jurisprudence (4th Ed.) pp. 2397-2401) (emphasis omitted)).
See also Richards, 58 Wis.2d at 298
("'Where a person holding property transfers it to
another in violation of his duty to a third person, the third
person can reach the property in the hands of the transferee
(by means of a constructive trust) unless the transferee is a
bona fide purchaser.'") (quoting 5 Scott, Law of
Trusts (3d ed.), p. 3444, § 470). If the property
reaches the hands of a bona fide purchaser for value, the
constructive trust attaches to the proceeds from the
purchase. "As a necessary consequence of this doctrine,
whenever property subject to a trust is wrongfully sold and
transferred to a bona fide purchaser, so that it is freed
from the trust, the trust immediately attaches to the price
or proceeds in the hands of the vendor . . . ."
Warsco, 190 Wis. at 90 (quotation omitted).
Armed with these principles, we are now ready to scrutinize
Steven's Complaint for a cause of action capable of
implicating the property in Terry's possession. As we
discussed above, we will not be captured by labels as we do
so, but neither will we rewrite Steven's Complaint. He is
the master of his pleadings. Nor will we countermand his
strategic calculations, such as his affirmative decision to
dismiss certain causes of action. It is not for us to
resurrect what he has let go. We will consider the Complaint
from two perspectives. First, we will determine whether it
pleads a cause of action directly against Terry. Second, we
will consider whether it pleads a cause of action against one
of her siblings that could potentially call into question her
ownership of the inheritance she received from her parents.
Claims Against Terry
We begin by determining whether the Complaint states a cause
of action against Terry. As filed, two sections of the
Complaint made allegations that relate to her potential
liability to Steven. In one of them, the Complaint claimed
Terry had been unjustly enriched as a consequence of her
siblings' representations and conduct, the result of
which was that she received one-third of her parents'
estates instead of one-quarter (count six-unjust enrichment).
As we described above, unjust enrichment is the cause of
action for which a constructive trust is a potentially
available remedy. However, we are analyzing the Complaint not
as it was filed, but as it was presented to the circuit court
on the defendants' motion for summary judgment. In
response to that motion, Steven explicitly dismissed his
unjust enrichment claim against all of the
defendants. Consequently, count six (unjust
enrichment) is no longer an operable part of the Complaint
and is therefore incapable of asserting a cause of action
The other section of the Complaint containing factual
allegations against Terry is count nine (constructive trust).
There, the Complaint says "the defendants"
converted Steven's one-quarter share of their
parents' estates, such that each of them should be
considered to be holding Steven's share of the
inheritance as a constructive trust (count nine). Because we
construe pleadings liberally in the first step of the summary
judgment methodology, we will understand Steven's
reference to "defendants" to assert that Terry, as
well as Susan and James, converted his share of the
inheritance. Count nine does not itself describe the
conversion; instead, Steven placed those allegations in count
four (common law conversion/fraud), in which he says that
through "Susan and James' false and fraudulent
representations and conduct described above, amongst others,
Susan and James caused funds to be diverted from Steven to
themselves." Even if we could consider this an
inartfully drawn claim of unjust enrichment, it would suffer
the same fate as the actual claim of unjust enrichment:
Steven dismissed it in response to Terry's motion for
summary judgment. With count four voluntarily dismissed,
there is nothing in the Complaint to give meaning to the
allegation of "conversion" in count nine. So
nothing in count nine is capable of serving as an operable
cause of action against Terry.
For these reasons, the Complaint does not plead any cause of
action directly against Terry. So we must next determine
whether the remaining claims Steven made against Susan and
James might give him a right to impress a constructive trust
on the inheritance Terry received from their parents.
Claims Against Others That Might Implicate Terry
The two remaining claims presented to the circuit court on
summary judgment were count two (undue influence) and count
three (intentional interference with expected inheritance) .
The circuit court dismissed count two, and Steven did not
challenge that decision either in the court of appeals or
here. So the only remaining cause of action for us to
consider is for "intentional interference with expected
inheritance." In this section of his Complaint, Steven
Susan and James intentionally interfered with Steven's
expected inheritance through the exercise of undue influence
on Donald and Betty Lou and other bad faith conduct,
including the orchestration of the preparation and execution
of the Last Will and Testament of Donald J. Tikalsky and the
Amended and Restated Donald J. Tikalsky and Betty Lou
Tikalsky Revocable Trust dated April 8, 2009, along with any
other legal documents prepared for and executed by either
Donald or Betty Lou on, about or subsequent to that date.
alleged that "[b]ut not [sic] for Susan and James'
conduct described above, Donald and Betty Lou would have left
a legacy to Steven equal to that of the legacy left to each
of their other three issue."
So Steven's challenge here is to explain how the
allegations in his "intentional interference" claim
can provide a vehicle by which he can reach property in
Terry's possession.Because these facts do not charge her
with any culpable conduct, Steven turns to our "innocent
beneficiary" line of cases to argue that he may have
access to property in her hands notwithstanding the fact that
she has engaged in no inequitable behavior. However, the
circumstances he describes in his Complaint do not fit the
contours of the innocent beneficiary doctrine.
Our opinion in Richards provides a good illustration
of the situations that call for constructive trusts on
property in the hands of innocent beneficiaries.
Richards, 58 Wis.2d at 290. There, Mr. Richards was
subject to a divorce decree that required him to name his
minor children as beneficiaries of certain life insurance
policies. Id. at 292. After he remarried, he
designated his new wife as the beneficiary. Id. We
recognized that he who pays the premium of a life insurance
policy gets to name the beneficiary. Id. at 293. But
we also said that the divorce decree created in the children
an equitable right to the insurance proceeds:
"[A]lthough a divorce judgment does not expressly
prohibit the owner of an insurance policy from changing the
beneficiary, the decree of the court is to be given the
effect of a continuing obligation to carry out the provisions
set forth therein." Id. at 296. Therefore, when
Mr. Richards changed the life insurance beneficiary, he was
conveying a property interest to his wife that was already
freighted with a constructive trust. We said "the mere
ignorance of the recipient of the original impropriety did
not make the recipient an innocent purchaser or, as
contemplated in the rules stated by Scott on Trusts, a bona
fide purchaser." Id. at 298.
The general rule we gleaned from this was that
"'[w]here a person holding property transfers it to
another in violation of his duty to a third person, the third
person can reach the property in the hands of the transferee
(by means of a constructive trust) unless the transferee is a
bona fide purchaser.'" Id. at 298 (citation
omitted). This rule does not dispense with the need to prove
unjust enrichment or establish Gorski's
"additional showing." When this pattern occurs, it
is clear that the innocent beneficiary "was, in fact,
enriched, although not because of any unconscionable conduct
on her part." Prince, 87 Wis.2d at 668. The
"additional showing" required by Gorski,
in these situations, is resident in the violation of the
transferor's obligation to a third person: "[A]
change of beneficiary in violation of an express provision of
a divorce judgment is a sufficient additional factor,"
as is "a change of beneficiary in violation of an
express promise supported by consideration . . . ."
Id. at 670. The constructive trust attaches to the
property in the transferor's hands, following which our
normal rules about the persistency of trusts (see
supra III.B) come into play, which allow the third
party to reach the property in the hands of all transferees
until it comes into the possession of a bona fide purchaser
Steven's Complaint does not fit this pattern. The
Richards rule contemplates the owners of the
property conveying it to an innocent beneficiary in violation
of a duty to transfer it to the plaintiff. Steven imagines
himself to be in the place of the person to whom the duty is
owed, while Terry stands in for the innocent beneficiary.
Steven's Complaint does not describe a Richards
scenario because it was the Tikalskys, not Susan and James,
who transferred the property in question to Terry. And the
Tikalskys owed Steven no duty to make him a beneficiary of
their estates. See Bautista, 58 Wis.2d at 229;
see also Olszewski v. Borek, 254 Wis. 153, 157, 35
N.W.2d 209 (1948), on reh'g, 254 Wis. 153, 35
N.W.2d 911 (1949) ("It has often been held by this court
that one of the most important rights that a normal adult
person has is his power to dispose of his property by will as
he chooses. In fact, it has been referred to by this court as
a 'sacred right' and one that is guaranteed by the
constitution."); Schaefer v. Ziebell, 207 Wis.
404, 410, 241 N.W. 382 (1932) ("One of the most
important rights that a person of full age, mature mind, and
disposing memory enjoys is the absolute right to dispose of
his property by will as he may choose.") . So the
Tikalskys violated no duty to Steven when they caused their
estate planning documents to transfer part of their estates
to Terry. And in the context of ...