7

s - Trusts - Breach of Fiduci

Contents:

Case Names
Case Extracts
Full case cited

CaseNames:

State ex rel. Nebraska State Bar Ass'n v. Douglas,416 N.W.zd 515, (1987)
F u c h s v . B i d w i l l , 3 3 4 N .E .zd 117 ( 1975)
Z i n n v . Sta te , 1 1 2Wi s.2 d 4 L 7,334 N.W .2d,67,( 1983) .
Wisconsin Retired Teachers Ass'n, Inc. v. Employe Trust Funds Bd., 558
N.W.zd 83, (1997- WI Sup. Ct.)
Village of Wheeling v. Stavros, 411 N.E.2d 1067,(1980)
Ross v. Specialty Risk Consultants, Inc., 621 N.W.2d 669,(2000)
Warsco v. Oshkosh Savings & Trust Co., 208 N.W. 886 (1926)
In re Massouras'Estate, LL4 N.W.zd 449 (L962)
Midland Nat. Bank of Minneapolis v. Perranoski,2gg N.w.2d 404,(1980)
Callahan v. Callahan, L27 A.D.zd 298 (1987)
In re Dryden's Estate (Johnson v. Richards) 52 N.W.zd 757 (I9SZ)
St. PaulFire and Marine Ins. Co.v. TruesdellDistributingCorp.,296N.W.zd 479(1980)
Parsons v. Steingut, STN.Y.S.2d 663 (1945)
P e o p l e v. S a va i a n o ,3 5 9 N .E .zd 475( L976\
In re Olson, 300 N.W. 398 (1941) (Extract only)
Plaquemines ParishCom'n Councilv. DeltaDevelopment Co.,Inc.,502So.2d1034(1987)
Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 491 P.zd 4Zl (Lg7L')

CASE EXTRACTS (puttca"usu"ei' pae"zor

State ex rel. Nebraska State Bar Ass'n v. Douglas. 416 NW.2d

Page 1 of259 re /-So z"<h'4214

515, ( 19 8 7 )

HEADNOTES

[5] Fraud
Wltenrelationship of trustandconfidence exists,fiduciar,r,
hasduq.'todisclose
all materialfac:ts
to lreneficiarl
of thattrr-rst.
andfailureto do soconstitr-rtes
fi'aud.

16l Officers and Public Employees

Prrblicotlicels ale fidr,rcialies charged.,r,ithhonest]'and fidelitrr,in adrrinistration
andtrustees. of theil office
ander.ecLrlionof theirdrrries.

[7] States
Relationship benveen stateofflcialandstateis thatofplincipalandasentandtrustee andcestuiquefrust.public
officeis publictrust.andsuchofficesarecreated for benefitof pubiic.notfbrthatof incumbent.

[8] Fraud
liraud nrav consistof r-rrnissicln
or concealmentof rratslial tact. if accorrpaniedbf intcnt to decciver,rnder
circumstances rvhichcreateopportunitvand dutv to soeal<.

[9] Fraud
\Vhere one has c1ut1'to speal< but deliberateiy remains srlent. irrs silence is equivalent to false
i:epresentation.

EXTRACTS
ftl "l\lthoueh the genei'ai r:ule is that'one party to a transactjon has no dutl'to clisclosem.atei'j;rl
f:rcts tr: the other,' end [srcl erception to this irule is made rvheit the parties are in a firluciar5-
r el: t t ions hi p w i ti r e :rc l r o th e i :." M i d l a nd l {at. B attk, etc. u. P etanoski .299 N .W .2d 404. 4I 3
(Minn.1980). See, also, Callahan u. Callahan. 127 A.D.2d 198.514N.Y.5.2d 819 098i\. When a
relationship of trust and cor:fidence exists, the firluciar'y'has the duty to disclo*cero the beneficiarv of
that trust illi mater:inl facts, and f:ljlure to do so cor:stitutes fraud. See 37 *24 C.J.S. Fraud $ 16d
(1e43).

Regardingthe larn'of frustsanddisclosureby a fiduciary,we havesaid:

"It is the dutv ofl a tr:ustee to fullv inform the cestui que tr:ust [beneficiar5'] of c/J facts
relating to tire subieci matter of the trust rvhich corne to the knowledge of the trustee
and which are material to the cestui que trust to knos' for the protection of his
interests."

(Emphasissupplied.)Joh.nsorr. u. Richords. 155 Neb. 552, 566-67,52 N.W.2d 737. 746 (19b2).See,
aIso, St. Paul Fire & Marine ltts. Co. u. TruesdellDistributhw Coro..207 Neb.153.296N.W.2d 479
(1980).

t6lt7lf8l Throughout the United States, public officers have been characterized as **530
fiduciaries and trustees. charged with honesty and frdelity in adrrrinistration of their
of,fice arrcl exet:uticrn of their duties. See, Driscol,lu. Burlirueton-BristolBriaLeeCo..8N.J. 433.86
A.2d 201 (1952);Mqrsllall Inpeachmer,tCcise.363 Pa. 326.69 A.2d 6Ig 0949\; Fuclts u. Bid.will 3l

Page2 of259
 I ll. A pp. 3d 5 6 7 . 3 3 4 N .E.2 d 1 1 7 (1 9 7 b );Jerset,C i ty u. H ague.IB N .J. S 84.ILS A .2d,8 (Igbl i i ; M at t er
of
P or s or z su . S re l rrg u z ,1 8 5 Mi s c . 3 2 3 , 5 7 N .Y .S .2d 663 (1945). S ee, al so, P nopte r. S i roi o," o.66n : . zdz.
15. 3 IIl.Dec. 886. 841. 859 N.E.2d 47b. 4g0 (1976) (member of county boar-; p..lti*
to the people they' represent"); WiIIianLSu. Stote, 8g Ariz. 84. 86-g7. "fli.i"t*
Bts
^":.:l*:i1:I-dtttv
t'.zd 981.983 (1957) (state land commissioner; "The relationship betra,eena stitte o{ficial;d
th"
sti'rte is tlr::t oll principal anci agent and trustee and cestui qr,retrust"): ht re Remoue,l
of MesenbrinJt
as Sherf/. 211 \'Iinn. 114. 117^ 300 N.W. 398. 400 (1941) (sheriff: "r\ pubtic o{frce is a public
trust.
Siich officcts are crr:atecl for the henelit of the public, not. for the benefit of the incumbe nt").

",'\n affii:rnatirre statement is noi nlr,vavs irequ.i.recl,hog,ever.

anil frrluri rnay cr:nsist the
or::is-cion or concealment of a material fact if accornpanled b;' the intent tr:
decej'e 'fun4er.
crrcumstances s'hich cleate the opportunitv and dut5,'to spe..rk."Tan u. Bovlze. 156 III.App.Bd.4g.54.
108 lll.Dec- 229. 232^ 508 N.E.2d 390. 393 (1987). See, also, Krung", ,. St. Jo*ph;i
Horritol. B}s
N'W.2d 18 (N.D-1981) (frar-rdma,v arise not onl1' lrom misrepresentation but fi:om concealment
as
\\'ell. lvhere there is of facts rvhich one partl.- has a legai or equitable *25 obligatio' tr:
'c1-rppres-cicn
communicate to another). "Concealment" roeans nondisclo-qrtrewhen a partv has a dutl,
to disclose.
See -Beedu' Kize. 145 Cal.App.3d 261. 193 Cal.Rptr. 130 (1983). "Cottcial means to hide, secrete,
or
withhold from knowledge of others...." State u. Copple. 224 Neb.672.697. 40I N.W.2d I4l. 7bE
( 1987) . S e e , a L s o , N e l s o n u . C h .e n e y .2 24N eb.7b6.407N .W .2d
472 (I9g7\;M
Neb. 51. 361 N.W.2d 193 (1985). "The word cottceelpertains to affirmative action Lif."5' t" pt**"t-"
rntended to prevent knowledge of afact...." State u. Coppte, suprd..

It is a genc::a1 principle in the iaw of flar-rci thaf lvhere thele is a duty to speak, the clisclosure
must be fr"ill and complete. It is firrr11' e..tahli-ched that ;e partiai and fi:agmentary ciisclosuye,
accornpatricd rvith tht: rvilful concealment of material rrnd qualifving {acts, is 1ot il true statement.
and is at-"ntuch a fraud as iln actu?ll misreprest.rntation.lvhrch. ln effect, it is. Telling haif':r truth has
btltln declareclto be equivalent to concezrlingthr: otlrel haL{.Even thotrgh one is rincler no obligation
t'
spt:ak ils to ?.1natter. if he rLndertakes to do so, either voluntaril-u- or" in response to i*quiries.
he is
br:und nr:t ot:lv lo stilte ti:nl1- '"r'hat he tells. but also not to suppress or conr:ea1an1,-facis r,vitbjn
hjs
i;nrxr'ledge rvhich u-j ll rtr:rtei:ral];'qualify those statecl. If he speaks at all. he mtrst nrake a
fluli ancl
faii: disclosure. 'llhei'r:fore^if one iviifully conceals ancl ,ouppressessuch fncts ancl thereby.'
learls the
other p:lltv tr: believe that the matter:s to i.vhich the statements mncle relate are dif-ferer-rtf::onr lvhat
tlrev actu.rlly :lre. he is guilt.v of a fraudulent cor-rcealment.

37 Am.Jw.2d Fraud an d Deceit \ IE7 at 208-09 (Ig6g\.

f9] l'Ioreover, rvhere one has a dutv to speak, but deliberately remains silent, his
silerrce is equivalent to a false representation. See, Securit:- St. Bh. oi Howard. Lalze u. Dieltz,
408 N.W.2d 186 Minn.App.198il; Cattaha,r u. Catlaha,t,. tZt A.n.Za ZSA. StaN.y.S.Za
8lg eg87\
Holconb u. Zilr'ke. 365 N.W.2d 507 (N.D.7985\; AtLdersotL u. AtLd,ersotL. 620 S.W.Zd glb
( T ex . Civ . A p p .1 9 8 1 );3 7 C .J .S . F rc tu d $ 16a (1948).

In passing upon the propnet,): of action b1' a commission council, the Supleme Court
of Louisiana.
1n " 26
stated:
"Publie officials occl-lpy positions of public trust.... tl" arrty i.rrpo""a o1 a fiduciar-v
ernbraces the obligation to render a full and fair disclosure to the benefieiarv
rr*5,81which materialll,- of all facts
affeci his rights and interests.,'

As expressedin L'.S. u. Flolzer. 816 F.2d 304. 307 (7th Cir.lggn: ..A public official
is a
fiduciar;' toward the public ... and if he deliberately conceals material information
from
them he is guilty of fraud."

Page 3 of259
 "To reveal some infcrrmation on a subject trirgers the dutl' to reveal all knou'n mat,el'ial facts.''
Hendr er u u . A l l s ta te l tts . C o ..7 0 0 N .M .5 06.517.672P .2d7737.7142 (Jg83\. S ee, al so, Ingahar r o u.
Blanchette. 7221{.H.54. 440 A.2d 445 (.L982);Wirth u. Comtnercial Resources.Inc..96ll"M.340. GB}
P.2d 292 (1981); Shaver u. Mortroe Construction"Co.. 68 N.C.Aop. 60b. Ba6 S.E.Zd 5I9 ftgg}\.

As expressed in 37 Am.Jur.2d. supro, $ 150 at 207-08:

A palt,v of rvhom iirquirrt is mad.e concelning the facts invo.h,'edin a trernsaction must not, zrccordi.ng
to x'ell-settleci prir:r:ipies, conceai ol fail to disck:se an)- pertinent or mater"ial jnforrnatron in repl5-ing
ihei:eto. or he r.vill be chat:geablewith frar"rd.iilhe i"easonfor the rule is precise. lVhere one
-"imple and
responds to an inquirv, jt is his dutl' to impart col'rect infor:mation. Thus. one r.r'horesponds to alr
inquii'r' is gui)t5'of fraud if he denies r'rilknowledge of a fact ivhich he knorvs to exist; if h.egives
equivocal. evasive, or misleadrng ans$'ers calcr.riatedto convey a f'alse impression. erren though rhey
are iiterallv tnre as thi'as thel'go; or if ire fails to disclose the whole truth.

' . kC c i ; : k* i ; : b * ir :k* *t' ;' ,t *ir :k* *r r k:k *ic* **:k * *'i r;t* i r;tr:k i r:L* **:b **:k *:k*-**i c:k* i :*:k* i ;-,k*****i c*

Fuchs v. Bidwill. 334 N.E.2d 117 (1975)

HEADNOTES

[3] States
Relationshipbretu'eena stateotficialandthestateis thatof principalandagentandtrusteancicestuiquetrurst.
[4] Officers and Public Employees
Principles of ec;riitl' r'clated to fiducrar5'litrbrht-r'c,i'pubhcofficials do not ::equire the discoverv o1'
actual halm or mt:rlsr-trable in3ur'1'to the publir:"S.H.A.ch. 102,$ 3; ch. 127,SS601-101et seq.,601-
105,603-101et seq.,603-102.
[5] Officers and Public Employees
'l'he or.vnershrp
of pr"rblic; js not,the conti:oiiingcrjteria follorved
frinds oi:.'rtl'u-etr:f puhlic pr"{)perty
il--;courts in determining whethei'1.rr-rbhc of-ficialshave violerteda fidriciary dutl'. S.H.A. ch. 102, $ B,
c]n.127,$$ 601-101et seq.,601-105,603-101et seq.,608-102.
Trusts
Complaint alleging that race track operator secretly made available to legr.slatorsshares in
racing corporation at price of $1 per share and arranged to buy back the shares at prices rangrng
from $3 to $7 per share sufficiently alleged vrolation of fiducrary dutv b;.-Iegi-<latorsslfficienr to
i:ecluile an accourttrng aud constructive trusl in favor of si,ate upon money'-qalleged to have been
receivedrn violatron of frcluciarvrelatron and duties as legtslators.S.H.A. ch. 102, $ 3; ch. 127, SS
601-101et seq..601-105,603-101et seq.,603-102.
Trusts
Aclior-r lor an ac:cortnting and to inpose a c(rnstrLrclivc Lrr-rstin f'avor of
-qLateLtpolt mone_vsalleged
to har:e beert received b-v del'endants in vicilatron o{'the ir {'rduciary relatron irnd duties as legislators
could be bror,rght b;,- private citizen and r.vas not, one rvhich could be brought on1r.,, f;.' the Attornev
( iener al. S . H .A . c h . 1 4 . I 4 .

Page 4 of 259
EXTRACTS
[2][3] It has long been agreed that pubhc officials occup\,'positronsof pubhc trust.

'.\ public o{fice is a pubiic trust ancl the holder thereof'cannot use it ciirectly ol inclirectiy-
for a
personzrl pro{it: and officols :ro not permitted to place themselves in a position in ',r,hich person:t)
*571 interest tlilv comc into conflict r,vith the
dutv rvhich they orve to ther public.' 46 CJ. 1087,
Officers. par. 308.

**120 Incident to said trust:

"['hev st.r'rndin I fjduciaj:): ,*tuttotlthil to tlre pr:opl<,.(]rr.')n,honr they have br,:e; electe{ apcl
:ilrllointed to servc.'

( Jersev Citv v. Hague. 18 N.J. 584. 115 A.2d 8.) ?he relationship between a state official
and the State is that of principal and agent and trustee and cestui que trqst. The
relationship has been described as founded in the comrnon law.lFNll Williams v. State. 88
Ariz. 34. 315 P.2d 981: Driscoll v. Burlington-Bristol Bridge Comoany. 8 N.J. 433. 86 A.2d 20t:
Jerselr Citv v. Hasue. 18 N.J. 584. 115 A.2d 8; Panozzo v. City of Rockford. 306 IIl.App. +48. Zg
N. E . 2d 748 .

FN1. 'These obiigations are not rnere theoretical concepts or idealistic abstractions of 1o
practical force and effect; they- are obligations irnposed by the comrnon law on public
officers and assnmed b-v thern as a rnatter of iarv upon their entering public office.' Jersev
Cit v v . Hae u e . l 1 5 A 2 d 8 n 1 2

FN2. \\rtl ct>ncltrd<tthat the Govei:nmental Ethic*. Act. ef{'ective January,' 1. 1968, does not cfeate ?}
ncr.v obligation but stateii more explicitly the fidr-rcrary status of a public o{ficiral u'hich equitl'}ras
iong assertecl.
[4.[ The pri.nciples of equit5' r:e]ated to fidriciar-v liabi)it;..- do not recluire the discr:vei.5.,of acttral
harr:t oi: measurahle injurv to the pubiic. The Restatement of Restitution^ s 197, pr:oviclesthat i.r
fi.ducian. rvhri receir.ed profit in violaticln of his dutv:

'ffi)olds urliat hc r(-r'ei\-(rsliJ)on a crrnstructjve trusf. fi)1'the ber:efician .'

Comment c explains:
'The rule stated in this Sectron is applicable although the profit received, by the fiduciary
is not at the
expense of the beneficiary. * " * The rule stated in this Section. like those stateci in the other
Sections in thrs Chapter, is nr:t based **121on harm cloneto fhe beneficiar5'in the particr"rlar case,
but rests Lrporla broad principle of preventing a conflict of opposing interests rn the mjnds of
ficluciaries. u,hose duty it is to act solell- fbr the bene{it of their beneliciales.'

i4J The princinles of equitl' related to fiduciarv liabilit_v do not require the discoverl, of actual
harm or ureasurable injr.rrl' to the public. The Restatement of Restitution. s 197, provic!.es that rr
fiducrar'1' s,[6 lscsiypci profit in violation of hrs d r,rrv:

'(H)olds rvhr,rth<:r'c(lclves upon a constructivc tfust for the beneficiarv.'

Com m e n t c e x p l a i n s :

Page 5 of.259
'The rule stated in this Section is applicabie although the profit received by the fiduciary is not at the
expense of the beneficiary. o o * The nile stated in this Section. iike those stated in rhe other
Sections rn t,hrs ('hapter, j.snot based **121 on harm done to the beneficiary in the particular case.
but i' c s t s g D o n R [i ' r;i rd n r' ' i rrl i rr]on { ' rrrnvpnti ns a ,^nrrfl i ctri {' nnnosi nrti rrtpro:ts i n rho rtri nds o{'
r. lrPv r . P!
j ,r Lr y r r \/a \ ri l y \ / a ] , , 8

fidr"rciar''ies. rvhose dr-rtvit is t<;act soleh'for the bcnefit of their beneficiaries.'

*:t**:k ? k ** * * ) ktr * **- tk- l? iL **- ,? ***:k** ***:?** **r! *-,ktr * * ****i r*'*'****)k**:k**:k**:tr< **

zinn v. state. 112wis.zd 417.334N.W.zd67. (1983).

HEADI\OTES
16l Erninent Domain
It is eifect of the state'saclion thar triggers ";ust compensation"clauseof Si,ateConstitution.not
intent of governnrentjn taking actionri'hichleciio deprir-ation of plivate plopelt\-rights:if
goternmentactionhas effecrof rakrngpi'ivatepropel't\-forpublic use..justcompensatir-rn must be
made.W.S.A.Const.Art. 1, I 13;U.S.C.A.Const.Amend. 5.

f11l States
Doctrine of sovereign immunit)- cannot bai' aclion {bl just compensation based on taking of
privRteplopelt:" fbr pub)icrisrr.e\-erlthorrghlegrslattri'c
has failed to esrablishspecificplovisionsfol
(:ourliensation.
i'ccolol'\'of.rr"rst W.S.A.32.01et seq.;W.S.A.Const.Art. 4. $ 27.

[12] States
Q11 1'1 -,1'1 im
. i, 'rnnr r nilr - nnd
ir : s r r . 6m r r on s a t i O n c l a u s C s o f S t U t . e C O n S t i t t r t i O l l m u S t b C f p a d t r ) r 'c t h r .i ".
r-indt:r just t:ompt,nsatir:n t:lr,rusc.pi'opolt\- oln/ner hlr.s constituti.onally mandated right to bt:
cornpensateci fi:r: pi:operty'taken b"l- the state and i-]bsence of anv statute pr:ovi.dir:g fi:r such r:erued\r
does not hal acljon against sti,rte foi: just cornpensation. W.S.A. 32.01 et seq.; W.S.A. Const. Art. 1. {
13;Art. 4. I 27.

EXTRACTS
The state moved to dismiss on a number of grounds, including failure to state a claim upon which
relief couid be granted and the doctrine of sovereign immunity. The rrial court deniecl the motion.
holc ling t h a t i h e rc rn p i a i n t s ta te d a c l ai m based on the ,i nsr ccupensati on' cl ause of the \Y i sconsin
(lonstrtr-rtion.finrirng rhat the oi'igrnal DNII ruling constituted a iemporarv taking of the Zinn
propeltv foi: public use. It also held that the def'enser:f so-.'eleignimmunrtv rvas unavailable to the
state u'hen an unconstitutionai taking is alleged

'oln nv view'. once a court establishes that there was a regulaiory 'taking,' the
Constitution dernands that the governrnent entit,v pa;' just compensation for the period
commencing on the date the regulation first effected the 'taking.'and ending on ihe date
the government entity chooses to rescind or ntherwise amend the regulation. This
interpretation, I believe, is supportert by the express lrrords and purpose of the
'Iust
Cornpensation Clarrse" as well as b1,'cases of this Court construing it.

Page 6 of259
 "The language o{tire FiiihAmenclment pi'ohririt.; tire 'raklingl'of'pln-ilte propr-rty {br'public r-rse'
'.rust compensalion.'As soon as plivatt:**?3 propert).'has been t,aken^ whether
uithout pzrr-ment of
t hr r > Lr gh { trrm e l c o n d e mn a ti o n p ro ceedi ngs. occLl panc\-.ph1' si cal i nr-asi on. cr1' r' eg^Lrlat ion.t he
l:rnclor.vnrrrhzts r.tir*s,ci,J, suf{'ered a con-ctitutional violation, and ' "the self-executing c}raracter of the
constitutionr.rl pi:ovisior: rvith respect to compensation.*429 " 'United States u. Clarhe. 445 r.t.5. 253.
257 f 100 S.Ct. 1127. 1130. 63 L.Ed.2d 373 (1980), quotrng 6 J. Sackman, Nichols' Law of Eminent
Domain Sec. 25..11 (rev. 3d ed. 1980), is triggered. This Court has consistentiy recognized that the
jus t c om p c l l s z l ti o n rc q u i rc mc n r i n tl t e Fi fth A rnenrl nrent i * * trot l rrccatoi ' r.:oncc thei ' e i s a't akr ng. '
conlpensa.tlonIn.u.stlle alva]"decj....^

**:k>? x*rN**-* r k"?*xtr tr x) ktr *x*tr n- **:k**:k- **- x***x***i< * r k * - * * * * '* * >!* x * t{* x * *

Wisconsin Retired Teachers Ass'n, Inc. v. Emrrlove Trust Funds

HEADNOTES
[6] Eminent Domain
Itis efl'ect o{the state's actionthat tngge|s 'Just compensation" claust o{ State Clonstirution, not,
int ent o{ ' s o v e m m e rl t i n tu k i n g a c ti on s' hi ch }crl to rl epi ' i vati on o{ ' pl i vrrte pl ope} ' tv rigir t s: if
giiv et ' nt ne n t rrt:ti o n h a s c ff' e c t o f ta k rn g pi ' i l atc propertl fol , publ i c use. ;ust compensati on r nust bC'
m ade. W . S .A. C o n s t. Art. 1 . $ 1 3 ; U .S.C .A . C onst.A mend. 5.
[11] States
I)octrine of sorrereign immunitl.' cannot har action fbi' just compensation hased on tzrking o{i
privnte propertl.' {br public uso, everl though logislature }ras fni}ed to establish specific provisions for
I ' ec ov el: vo f j u s t. c o n l p e n s a ti o n .W .S .A. 32.01 et seq.;W .S .A . C onst. A rt. 4. I 27.
[12] States
Sor-eleign imnrr.r.nitvanci lust coml;ensatir:n ciauses ofl State Constitution must be read togethe:';
under inst conrlrensatir:;ncjause. T)r'opel:t)' ollrneyhas constjtutir:;naliv mandated r:ight to be
com.pensateclfr>i:pi:r;pertv -rnlien b;'the stlr,teand absence of anl strtute 1ri'ovrdurgfoi" sucir rerrled\r
does not bar action ariliu.-t stafe foi'.jr-rstcomi:ensairon. W,S.A. 32.01 et seq.; W.S.A. Const. Art. 1. $
13: A r t . 4. I 2 7

EXTRACTS
The state moved to dismiss on a number of grounds, including farlure to state a claim upon whrch
relief could be granted and the doctrine of sovereign immunity. The trial court denied the motion,
holding t h a i th c ' to m p i a i n t;ta te d " i r c l al m bascd oi l the' .i ust cc' mpg' nsati oncl ause of' the \l :i sconsin
Cons lit ut i o n . l i n .l i n g rh rt th e o ri g rn a l D N R rul rns (' on,cr1Ture,^l
a temp()rar)' tal i i ns o{ ' the Zi nn
propr:rtv {ol: pu}:1icusc. It, also helcl that thc dei'enseo{'sovr,-rt:ign imrnunitt'lvas r"inavailablefo lhe
state rvht:n an ur-rconstitutionaltakinq is iille ged

o'In rny \rielv, once a court establishes that there was a regulatorl,-
'taking.' the
Constitrrtion dertrands that the governrnent entity pay just cornpensation for the period

Page 7 of 259
corrunencing on the date the regulation frrst effected the 'taking,' and ending on the date
the governrnent entity chooses to rescind or otherwise amend the reguiation. This
interpretation. I believe. is supported by the express w'ords and purpose of the Just
Compensation Clause. as well as by cases of,this Court conslruing it.

"The language of tire Fi{th Amendmcnt prohibits the 'takfingl' of pi:ivate property {br 'public use'
r t it hout pa \-rn r.r1t:J " j 1 1 ,rt c rrn rp t' n s ;rti on.' ;\ssr)on:r$ pl i r-artc* * 73 propurtv has becn rai retr. tr - hcr hol
t hr " ouqh f o rn ri i l (,rn (l e l n ()ctrLpi rn(' J-.
n a ti o n 1 .,i " o ceerl i ngs. ph1' ;i cal i nvi .i si otr. or- rcqui i rti rln. t he
l:rnrlorvn<rr h'a.suitvrsd.r' sr-rff'ei'erd a con-qtitutional r'iolirtion, ancl ' "the sel{'-executing character ofl the
consiitutioni:l provision rvith r:espectto compensatj.ol,*429 " 'Urtited States u. Clarke, 445tJ.5.253.
257 [ 100 S.C t. 1 1 2 7 . 1 1 3 0 .6 3 L .E d .2 d 373 (1980), quoti ng 6 J. S ackman, N i chol s' Law of Em inent
Domain Sec. 25.41 (rev. 3d ed. 1980), is triggered. '['hrs Courf has consistentlv i'ecognized that the
'taking.'
Iust compet:sation requilement in tlre F'ifth Amendnrent is not precator5r: clnce thele is a
c onr pens a ti { )1i n
1 l i " c lh e a ri ' a i ' d e d ....

f 12l As stated in Comment a. to sec. 8958 of Restatement, 2 Torts (Second) at 400

"... As for suit brought against the State in its own courts, consent is obnously required. In many
States the rule that the State cannot be sued without its consent is written into the constitution.
Some state constitutions prohibit the givrng of consent. On the other hand, consent to suit, in some
respects at ieast, may be implied from constitutional provisions. Thus most conslitutrons have a
plovision plohrbrtrng rhe taking of propertl' fbr public purposes rvithout just compensation. The se
provisirtn.. have i"rsually been hekl to be self-executrng ancl to constitute a consent, to suit^ so that
er.cn though the legrslature has f:riled to esrablish airy procedurc for litrgating thc claims, resol:1,tt)
r he c oult s i s h c l rl tn b r' o p c n { b r a ' ti rk i n g. or. i n nranl - S tates. a cl amagi ngof' pri vetc pl opcl tf ibi'ir
public Ilurpose u'ithin the terms o{ the constitution. This is often called invcrse condemnzrtion.--."

"... As for suit brought against the State in its own courts, consent is obviously required. In many
States the rule that the State cannot be sued without its consent r.s written into the constitution.
Some state constitutions prohibit the giving of consent. On the other hand, consent to suit, in some
respects at least, ma5r be impiied from constitutional provisions. 'l'hus rnost con-.titulions hilve a
pi:ovision pr:r:lri.liiringthe- taiirng of property fr:r pr"rblicpurposes rl'ithout. ju-<t compensati,ln. These
pi'ovisiol:s have usr-raliy.'heer:held to be self-executjng ar.rdto cr:nsiltute a coll-cent to suit. so th:it
even thor"rghthe legisiatui:e has failed to establish any-procedu:refor litigatrnr the clai.ms, resort to
r he c oui' t s L s h c l ,l ro b e o p e n fo l ' a ' ta k i ng.' or. i n rnanr-S tate.+ .a damagi ng of pi ' i r-ate pl opel t r . f or a
nulil ic nrrrnnse rr-ilhin rhe terms of the constitution. This is otten called inverse conden:natiorl...."

,k*:t* tk*-.i -*- **- **- *- *- d r i* *:!***:tr tr < **' d- **- tr k ** **-x * * * '* * i ;'r x * * :!* * * - * - J <* * * r k * - A'

Villase of Wheeline v. Stavros, 411 N.E.2d 1067,(1980)

HEADNOTES

L2'lOfficers and Public Employees

A pubiicoffrcialorvestt-rhis plincipaldutiesof absrilute
lovalt1.
andfidelit1...
andoccupies
a po-sition
of the
trust.
hishestnr-rblic

Page 8 of.259
 [3] Trusts
Couplaint bloughi b1' viliage lr'hich allegeci exisfence of il fiduciarl' dr-rr5,owe{ by yi}lage of1icials
to viilagtr llnt{ suitsctclil(itlibreach of the relationship br.'villagc officials, and u,hich ch2rgecl that thirri
wi'rs a u'jlling p:)rticipant in ;r scherne to cituse village of'{icials to breach tlrr,'ir ficl-rci:lry, riut1.-
Tr:11't)'
and that it wl'is thircl pi:r't1'"who induced such br:etrch.stateci a caLlseof laction agailst thirri pai't,r.;n
that it ndequatelv pled existence of a {iducialy relation,qhip, subsoquent Lrelch the.erof. ir'd
sufficie nt facts, i{'proven^ to justifl irnposition of a constructirre truiit.

[4] Trusts
Constt'Ltctive
ilLrst is imposed b1' a courf u'here person holding title to propeq,' rvoulcl profit by a r,r,rongor
r'lould be unjr"rstll"enrjclted
if he ivere permittedto keepthe propes,: actionto prevenisr,rchunjr-rst enriclnteii is
nraintainablein all c:rsesrvheret>nepersonitasreceivedntone\ Lrndersr-rch circurnstancesthat in ec1Lrit1,
anri gor:d
colrsclence.he r>Lrghtnot retail'|.

[5] Implied and Constructive Contracts

Thild per'-"on rvho hets colluded ivith a fiduciar'f in commrtting a bi-each of clutv, ancl rvho
obtained a ben<,'fitthr:refi'om, is under a dut,v of restitution to the bene{iciarr,.

[6] Torts
'l'lrird partl''s indricement of. or knosring partrcipatron in a breach of dut5' b3'agent
is a rvt:ong
against princip:r1 which nray subject third party to liability,-.

[7] Trusts
Constr''rct'ivet,',:i1st
mat'tre intl;osed upon benelits cbtarned bv a thud pel:sorlthrough his knorvlerige
of r:r in''lr'r.me't in a r:r-rblicofficiai's breach of a liciucrarv dr-rtr,.

EXTRACTS
{!} \4'e beheve lllinois recognizes a cause of aclion bv a municipalitv fbr the imposition o{ a
constructive trust upon profits of a thrrd paltv arising from a pr-rblic official's breach of a ficl-rciary
dutv' Generallv, constrtrctive irusts ai'e dividecl inro trvo classes: ont: in rvhich act,ual fraud is
consicierec{ as equrtab}e ground-* for raising the trusf, irnc{ the other, rvhere the existence oI a
fiduciarv relationship and a subsequent abusi: o1 r;onficlcnceirlising therefr:orn. are si-r{ficicnt to
t:stabli-.h thc tIr"rst. ( CarroII v. Catdwell (1957). 12 I11.2d487^ 147 N.E.2d 69; Eiseman v. Lerner
( 1978) . 64 i 1 ]-Ap p .3 d 1 8 5 . 2 0 l l l .D e c . 8 24. 380 N .E .2d 1033.)In thc prcsent
c1-* e.pl si nti f{ has alles. ed
both thc cristenr:o trf lr fraud upon the citizens o{ t}rc Yiil;;rge and the zli1sc of a {ir{u,:iarr-
lelationship. Ilhnois ct)Lri't.shave repeatediy,' :rifirrned the pr:incipie that public r:f{icinis are tr:ugtees
n'j.th iL ficluciarl' durr. ro the people. ( Chicaeo Park District v. Kenro),. Inc. (1gg0). 7g Ill.2d bbb.
3T
Ill.Dec. 291. 402 N.E.2d 18i; Brown v. Kirk (1976). 64 Il1.2d 144. 3bb N.E.2d 12: Cit; of Chi"uso
tul. Cohutt t. Kea.t" (1976). 64 lli.2d 559. 2 I11.Dec.285. 357 N.E.2d 452.) :\ public official owes to "*
his
pr:rncipal duties of absolute 1oy:rJtyand fideJit5:,and occupies a position of the highest public
trust.
See People v. Bordeaux (1909). 242 II1. 327. 89 N.E. 971: County of Cook v. ijarreti (197b). 36
I lI . A np. 3d 6 2 3 , 3 4 a N .E.z d 5 4 A .

[3]fa] In the present case, plaintiff has alleged the existence of a fiduciary duty owed by ViIIage
officrals to the Village and the subsequent breach of that relationship by Viilage officials. plaintiff
also charged that Stavros \ ras a willing partrcipant i.n a scheme to cause Villagl officials to
breach
therr fiduciarl' duty and that it was Star-ros who induced the breach. While we asree
that the

Page 9 of259
amended complarnt is not a model of exemplary pleadings, we do not, believe th:rt the complaint {ar1s
t.o state a cause of action merel1' because the means by which Stavros influenced Village
officials to breach their duties are not set forth. Plaintiff realistically cannot be expected to
outline intricate schemes and the specrfic methods of controi used by Stavros for such schemes or to
detail his secret deahngs with the public officials with exactitude. \Ve believe thart thel a.mended
cr)mpl:lint arlcqultcll' plr:irclsthc cristence of a {iiluci;lr1-r:el:rtionship.the subsequent breach theleofl
and su{ficient facts, if ploi'en, to iustif5' the '!454 imposition ofl a constructive trust. Even if we lvere
t n f ind t h :rr rh o n l ' ' :rd i n p l a ,^ k c di n o ci { i c rrl l noafi nnsnf' {i ' :rrd and t} re breach of rr fi duci arr- d ut r - ^ t ht . '
imposition of zr **1070 ***704 constructive ti'ust nonetl:eless rvould still be pr:opei:. Star'::os is
incoirect in assurnj.nq that zr r:onstr:rictivetr:ust nray 6pl_ybe imposed rvhere there is fraud oi" the
bveach of a fiduci..rrv r:elettjonshjp.r\ constructive ti'ust is b1,'no means lesti:jcted to those grounds. (
Countv of Lake v. X-Po Securitv Pohce Service, Inc. (1975). 27 I1i.App.3d 750. 327 N.E.2d 96.) The
par:ticular circumstances in which equity' rvill impress a constr:uctive trust are as
nurnerous as the modes bJ' q'hich property may be obtained through bad faith and
unconscionabie acts. (County of Cook v. Barrett ; 4 Pomeroy's Equity Jurisprudence s 1045, at 97
(5th ed. 1941).) A constructive trust is imposed b-v a court because the person holding title
to property woulcl profit b-v a r.vrong or r,vould be unjustly enriched if he were perrnitted
to keep the propert-v. ( Price v. State of Illinois (1979). 79 IIl.App.3d 143. 34 lll.Dec. 690, 398
N.E.2d 365; Bozeman v. Sheriff (1976). 42 Ill.App.3d 228. 355 N.E.2d 624.) An action to prevent such
unjust enrichment is maintainable in all cases where one person has received money under such
circumstances that in equity and good conscience, he ought not retain. M.J. McCarthv Motor Saies
Co. v . V an C . Arg i ri s & C o . (1 9 7 9 ). 78 l l l .A pp.S d 725. 33 Ii l .D ec. 529. 396 N .E .2d 1253: Cohon v.
O s c ar L. P a ri s C o . (1 9 5 8 ). 1 7 i l l .A p p .2 d 21, 149 N .E .2d 472.

f5ll6ll7ll8l We do not agree with Stawos that he owed no legal duty to plaintiff or that his
conduct amounted to no more than that of any paid lobbyist. A thirct person rvho has collucled with a
ficluciar'f in committing er bi'each oI'dut-v. and who obtained a beneiit. there{rom, is uncler a dutl' of
i:estifutron io the benefliciiii'i-.( Chicaeo Park District v. KenroJ*.Inc. (1980). 78 II1.2d 555, 37 Ill.Dec.
291. 402 N .E .2 d 1 8 1 ; a c c o rd J a c k s on v. S mi th (J921). 254 U .S . 586. 41 S .C t. 200. 65 L.Ed. 418;
Sexton v. Sword S.S. Line. Inc. (2d Cir. 1941). 118 F.2d 708: Craftsman Finance & Mortsas'e Co. v.
Brown (S.D.N.Y.1945). 64 F.Supp. 168.) A thir:rl p?rrtrr'sinciucement oi or knorving peri:ticipation in a
breach of duty' b]' rrt'ragent js a \{-r'ongsgainst the prinaparl g,hich rnay subiect the third part.v*to
liabilitv. (Continental Manaeement. Inc. v. United States (1975). 527 F.2d 613. 208 Ct.Cl. 501; B. F.
G oodr ic h C o . i ' . N a p l e s (S.D .C a I.1 9 54).121 F.S upp.345: Marti n C o. v. C ommerci al C hemist s. I nc.
( F la. A pn. 1 9 6 8 ),2 1 3 So .2 d 4 7 7 : J a c l yn, Inc. v. E di son B ros. S tores. Inc. (1979). 170 N .J.S up er . 334.
406 A.2d 474: Hirsch v. Schwartz (1965). 87 N.J.Super. 382. 209 A.2d 635: Kinzbach Tool Co. v.
Corbett-Wallace Corp. (1942). 138 Tex. 565, 160 S.W.2d 509.) A constructive trust mal' l:e imposed
i:trnn l r e n e{ ir : n h - ,r in n d h r - .' l th ir d r)ei 'son rhl orroh hi s I;nou'l edoe of ol i nvnlu rr-emerrt
\!r u !r r t ir rrr
r *
(! nrrhl i c
tr!trlrr\

of{iciai's };reach ,:rfa ficluciarrr cluty. (Chicago Park District v. Kenroy, Inc.; see also United States r'.
Car t er ( 19 1 0 ).2 1 7 L I.S.2 8 6 , 3 0 S .C t.515, 54 L.E d. 769.)' J' oi mpo-sea construci i ve tl ust. no fr cluciar v
dut r - oi' i' e l a ti o n :h i p rre e d e rrs t b e l l r een ti re person * 455 hol drne the propei ' l v and the aggneved
p?l-t't\;. "Reslrti-ition. b;' f itat. of its adaptabiliti," to inclividual cases on equitable p'ncrples ma)- *
" "
i' t ' ac lr s it u i rl i o n . h e v o n d th e g -i ' a s pof otht' r' ci i ' i i or cri nri nal remedrcs and do Justrce on equit . ablc
principles " r' 'r-.iCitatron.)" ( Chicago ex rel. Cohen v. Keane (1976). 64I11.2d 559. 566. 2 lll.Dec. 285.
289, 357 N.E.2d 452. 456.) Although the transaction assailed in constructive trust cases is usualiy
one between the parties directly, this is not a prerequisite. ( Edwards v. Miller (1978). 61 lll.App.Sd
1023. 19 lll.Dec. 82. 378 N.E.2d 583.) The rvay in which tht: pnrticularr transaction ariscs is
immatelial ( Ridgely v. Central Prpe Line Co. (1951). 409 IlI. 46. 97 N.E.2d 817.) ,\ third partl- u-ho
incluces a breach of a trustee's duty of io1'altv, or participates in such a breach, ur knowingl"r-ilccepts
any fgtt.rlit. {rom such a }:i'each. becomes drrectll' liable to thc zrggricvcri part-v. Lawrence
Warehouse Co. v. Twohie (Bth Cir. 1955). 224 F.2d 493: Hammonds v. Aetna Casualtv & Suretl' Co.
( N. D. O hio . 1 9 6 3 ). 2 3 7 F .S u p p . 9 6 .

Page 10 of259
Thus we believe t'hat the arnended complaint has alleged sufficient facis to srate a cause
of action against Stavros. He is charged rvith inducing and participating in a scheme
rvherebl' he caused certain Village officials to breach their fiduciar5,- dutv to the public.

Jr*********:'r*.t*-t *****:?**************************************

Ross v. Specialty Risk Consultants,fnc., 621 N.W.Zd 669,(2000)

HEADNOTES
Trusts
''Cotrstructive tltist" rs an equitabie device emplo.r'edto prevent fraud
or abuse of a confidentiaL
r eiat ions hr p a n d i .. i n rp l i e c ito a c c o mp Li shj usfrce.
[ 11] T r us t s
In tire constructlve lnrsl case, the defendant has legal rights in eomethrng that in gooC.
c ons c ienc eh e i o n g s to th e p l a i n ti ff: th e pl opertv i s subi ect to rr constructi ve ti ' r-rst.and the de{'endanr
is a construclive lrr"rsiee.
[ 12] T r us t s
Def'eucianr in a constructir:e trust case is r:rilde lo transf'er trtle to the plaintrff u'ho rs. i.n thc e'}'es
o{ec3rill', the tnrc o\vner.

[ 13] T r us t s
V lr en*q i ri tr i mp o ;e r i t c ()n s tl ' u c ti \e
fr ust upon an assel< ' t thr.defendant.
the pl ai nri ft-Lrl ri matel..t't
-r s{ir r m al
iegaltitle.
[ 14] T r us t s
Cons t lu c ' ti l c rl l l s t rti l l b e i m p o * *edonl f i n l i rl i tcd ci l cumstanccs: l egrL.lti Ll c mu:t hi tr. c hc'cn
ohtnined by" rncans of fi'ar"rd, commission o{i rvrong. or b5' l-ln,vfblm of unconscionable crinduct and
must bc held bl' someonc who in equity'shoulci not be entitled to it.
[15'l Trusts
It, is not, necessar)-thar the pelson against whom the constructive trr.r-qtis to be imposeri be the
u'r:rlngcloet:oi' knorv r.rfrvlongdr:ing initiall-v; if cther elemeuts for imposing a con.structir:e trust have
been -"ntisfied and the itolder: of legal title is not a br:na fide pr.ri:chaser'. a r:onstnictive t::ust mav be
im pos ed.
[ 16] T r us t s
{lonstirr.rctivelrust intposed on rl'i:ongfu}11. obtalned propertv foilorvs the property crr its piroceeds.
L17l Property
Intelest in land conprehends ever-vkrnd of claim to land rvhich can fbrm the basis of a propertv
rrgnr.

EXTRACTS
CONSTRUCTI\IE TRUST
f8l[9][10] fl 13 The first issue we must address is whether the Illinois action seeking the
imposition of a constructrve trust over the golf course is one that "might ... change interests in the
real property" within the meamng of WIS. STAT. { 840.10.We concludethat it is. "A constructive
trust arises rvhenever another's property has been wrongfully approprrated and converted into a

P a g e1 1 o f 2 5 9
different form." I{rorsco u. OshAosh Sauines & Trusl Co.. 190 Wis. 8?. 90. 208 N.W. 886 (1926)
(quoting 3 PONIEROY, EQUITY JURiSPRUDENCE S 1051, at 2397-2401 (4th ed.1918)). It is an
equitable device employed to prevent fraud or abuse of a confidential relationship and is implied to
accomplish justice. See In re Massouras' Estate. 16Wts-2d 304. 312. l74N.W.2d 449 (.1962).

t11l[12]t13] J] 14 "In the constr:uclive trust ca-se.the defendant has legal righrs iir
-qomcthing thar
in good c o n s c i c n c eb e l o n g s to th e p l a i nti ffi ." i D A N B . D OB B S , L{\,V OFR E X 4E D IE S g 4.8(l ) , at bgl-
BB (2d ed.1993). "The propertl. is'subject to a constmctir;e r,rust,'and the tLefencLanr is a'constr:ucti,",c
**676 trustee."'/d. "The defendant is thus rnade to ransfer
titie to the plainriff ivho is^ in the eyes of
equit,v, the trtte 'olr-neir.'" /d. "When equit-v inposes a constl:uctjve tlust upon an asset of t.he
deferrdant..ihe piaintiff ultimertel,vsers fc;rmal legai title.'' Id. at$ 4.8(Z), at 589.

11'41 *34 f 15,A cr.:nsiructivetrr.rst s'jll he imposeci on11."in]irnited

[15] circurnstances. l,egal tit)e
rnusl have lreen obtained b1'-rneans of fraud. comrnission of r.vrong or bv anv form of unconscionable
condrrct arrd musi be held bv someone rvho in eqr-rityshould not be entitied to it. See Wilh,arns u.
W ' illr or r ns . 9 3 W i s .2 d 6 7 1 ,6 7 8 -7 9 ,2 87 N .W .2d 779 (1980).FN 6
l t i s not necessar\rthat the per son
against rvhom the constructive irust is to be irnposed be the rvrongcloer or knolv of rvrongdoing
initiallv. if othei' eletnents for rmposing a constructive rrust have been satisfied and the holder of
legal title is not a bona fide purchaser, a const.rr.lc[ivebrusr may be imposect.See id,.

FN6. Some Wisconsin cases hold that a finding of wrongdoing is essential to impose a
constructive trust. SeeFirst I{at'I Bank u. Nennie. 92 Wis.Zd 578. 539-40. 285 N.W.2d 6I+
(1979);Ifi'ueeeru. Rodenberg.190Wis.2d367.37i.527l{.W.2d381(CtApp.tgg+\. This vrew
is not unlversally accepted.Seeht, re Massouras'Estate. 16 Wis.2d 304.3\3. II4 N.W.2d 449
(.7962\:1DAN B. DOBBS,LAW OF REMEDiES S 4.3(1),at 587-88(2 2d ed.1998).We need
not resolve the conflict because here the Town based its claim of a constructive trust on
r r / v ^h d,l
rv r vrr6uvurS.^;
- -

Ilq] fl 16 A constructive trust imposed on wrongfully obtained propertyr follows the

pr oper t v o r i ts p ro c e e d s .

lf one per:solr having mone!' or an): kind of propertJ.-belonging to anothei' in his hanris u,rongfulJl,
uses it foi: the pruchase of land-.. takjng the title in hrs o!yr1 name^ ... equity ir:rpress-.s a
consiructive tm-qi upon lh.e nes'form or species of propertv. not onlrr.-rvhile it is rn the hands of the
orlgillal t-t:ongdoe-r.bur as iong as jt can be follorved and rdentified in lvhosesoever hancls it mav
conle, excelrt lnto lhose of a ltona fide 1:urcha-sel:for value and rvithout notice; and the court rviil
enf.or:cethe constmctive trust for the benefit of the beneficial olvne1. or original cestui que trust
rvho has thr-ts beeu defra'.rdecl.... Wherever*35 one person has lvlongfrill1.-taken the property cf
another. anil ccnvetted it rnto a nerr, forrn. or trilnsfel'red it, the trust arises and {bllorv-q the
plopel' t l o i ' rts i :rt> c edes .

Worsco. 190 Wis. at 90, 208 N.W. 886 see also Truelsch r:. Nortltwestent Mut. Life Ins. Co.. 186
W is . 239. 2 0 2 N .W. 3 5 2 (1 9 2 5 ).ry

FN7. In Truelsch,u. i{orthwestentMut. Life Ins. Co.. 186Wis.239.252.202 t{.W. 852 (192b):

It would be a signal failure of justice if one who has become a constructive trustee by
reason of wrongfully receiving or securing the property of another could escape the
consequences of his acts by changrng the form of the property thus acquired. Hence, as
between him and the cestui que trust, the latter may pursue the funds into the new

P a e e1 2 o f 2 5 9
 investment and charge that investment with the trust. He may also assert and enforce
the sarne right against third parties to whorn the propert)' has been transferred
with linop'ledge of the trust or who have paid no consideration for it. provided
the identity of the trust fund can be established.

l17lt18l fl 17 An interest in land comprehends "every kind of clai.m to land which can form the
basis of a property right." Weber u. Sunset Ridse. 269 Wis. 720. 126. 68l,).W.2d 706 ftgbl\ (citations
omitted). An action seeking the impositi.on of a constructive trust may ultimately change legal trtle"
See DOBBS , supro, at 587-88. [t fo]loivs, thei:efcre, tbat a claim for: the imposition of a constr"qr:tiye
irltst on t:eal estilte js an ilr:tion seekurg relief that "rrrght confir:m or change j.ntei:estsin the leal
pi'opertv." irs th.lt ielm is used in WIS. STA!-S j4Q-lO.

!J 18 In a case parallel to ours, the Superior Court of New Jersey, Appellate Division, reached
similar results. In PolA u. Schu,o.rfz.166 N.J.Super. 292. 399 A.2d 1001 (App.Div.tgZg), the owners
of a nursing home facility recorded a li.s pendens in **677 connection with a suit seeking a
constructive trust to be imposed on properties the *36 defendants acquired in Atlantic City. The suit
alleged that the defendants conspired to deplete the nursing home facility of funds by a variety of
methods, includrng drawing excessive salaries and converting g180,000 of patients' personal
Medrcaid funds. See id. at 1003. The suit alleged that the defendants used the wrongfully obtained
funds to acquire residences and businesses in Atlantic City. See id. at 7003-04.

********************fr*******i?************************************

Warsco v. oshkosh Savinss & Trust Co.. 208 N.W. 886 (1g26)

EXTRACTS

.. u i tv J u ri s p ru d e nce (,4th i l d.) pp" 2597-Z$1, j t i s sai d:

1n il P o mr:r' o 1Erl

"A cotntrur:til:e, trust. ctrises LL,herteueranotlzer's propertr- has beert.wt.ongfu.l!y

ctpproprio.ted. attd,
cattt'erted,irtto ct cli./feretttfortn. I{' one persan having mone.v or an-v kincl of propertv belonging to
another in his hands lvrongfuli.v uses it for the purchase of lands. takrng the title in his own name. orl
if a rrr,rstee or othel fiduciarS- person ri'r'ongfullj' converts the tmst fund into a ciifferent *.pecres of
propert;r. tahing to hrmself the title: or if an agent or bailee u'rongfull)' ilisposes of hrs pgncrpal's
sectrrities, anrl rvith lhe proceeds purchases othei: securities in his os'n name. itt, t.lLese a.n.tlal!, si,milar
ut.sesequi.ti irntr;resses a c:artstructit;t:frust Ltptxt.t.herlt?u)t'ortrLor speciesol'proptt.tl-, noL oy,l^,'u,h.ifu:
it
is i.rL Llt<:irtncls al th.e arigitnl, u.,rortgdaer, bu.L t:ts /.ang cts i.t ccur, bt: foll,-Luted urcl. identified in
tt'hosesoet'er Jt,cutdsi.! trtrt.r'.-:orn{?, except into those c{ i:. bona fide pulchaser fo1 value an4 lvitirout
notice; tutd !h.e toit.t'Ltt,i.//.rttfort:r,;th.e r,.<trtstntc!i,L;e trtt.sl
o|t'.gittrt.l.rx:.sttti.t7u.etrtr,st u;hrt h.os tltu,s beert.de:t'rrtu.rir:d.
r\s a neces-qaltlrcopseqlonce o{ this {octpnc,
whenevr:r: ploperf)' subjcct io a int-rt is wrong{irlly soJd anci transfer:recl to i,i bona iiclc purc}raser, so
that it is {rccd fron: the trust, the t,rust immediretelv attaches to the pri.ce ol proceecls in the hzr16s of
thr', r,endor^ rvhertht}r such plice be a debr 1,'etunpaid due from the plrchaser,. or ii cli{fer:ent kincl o{
proper:ty taken irt err:hange^or erren zr sunl r.rfmone1,-pard to the vendor. as long ersthe rronev can be

P a g e1 3 o f 2 5 9
 iclenti{ied antl reitched in his hands or undei: hi.s controi. It i.s ttot essenti,al for the o,pplico,tiori oi tlzis
d. ar : t r it t e th o .tc trz u .c tu l,o
rul .s tc n fi d u ,ci orl , rel ati .orts/tottl cl exi stbetu;eenth.t:ori gi ,rtol ttrottgd oer ond, t he
betteli.cial ourLer. 7(it,ereet,es'olLe person has u:rongfu.lLy'tokett tlte properf..t of anotlter, attd. c:ottt;c-rtecl it
itt.[ctct 77e71.: fot'rn. or trott,st'<nt"erJ it, the: Lntst <trises attd t'oll,ou.;sth,eproperty or its pror:teds.', {Italics
oul' s . )

It appears to ti-qthat the ibregorng quotation from Pornero-v-not onlv const,itutes good logic. but sounrl
lilu-. Thc cr:ult rightl,v declalcrl a iien upon the pr.opei't). {br thc ilmount of'the tnrst funcl actuail},.
used either in the purc:hitseclr in the impi'ovement of the pr:opert\'. 2 Pen'v on'l'rusts (5th lld-) p^ ;28.

* *?k* * ** * * Js**ir :k* * *- **? k* **- *- ?k'**-**:k**-.k-** ?k:t;k*-n*- **:t** *- ** *:k * ****t{* *.t:k ** ?k *

In re Massouras' Estate. 114 N.W.2d 449 (1g62)

EXTRACTS
f8] fgl The facts in this ca-qecail fbi't.he imposition oi'a conslructivr,.trr:sl. Such a trust is impliecl
b]' opr:ratron of larv as il i'emediai device {br the prott-ction of' a bene{icral interest against one rvho
either bi. actual or conslrr,rctivelraud. duress. airuse of'confidence, mistahe, commission of a u,ror:g,
ol b1'' any lorm o{ unconscionable conduct. has either obtained or holds the legal title to propeft}'
u'hich he ought nol in g'qrirtv and in good conscrence beneIicialil,' enjo;-. Joerres v. Koscielniak (1961).
13 W is . 2d 2 4 2 . 1 0 8 N .W.2 d 5 6 9 ; Z a rtner v. H ol zhauer (1931). 204 W i s. 18. 234 N .W . 508, 7 6 A. L. R.
396; Warsco r,. Oshkosh S. & T. Co. G926). 190 Wis. 87. 208 N.W. 886. 47 A.L.R. 866; Bogart, The
Law of Trusts and Trustees, 2d ed., cln.24, pages 3-10, sec. 477;Dawlt, The Elements of Law. Ch. 18.
E quit y , p. 3 0 5 ; 5 4 Am.J u r., T ru s t, p . 167, sec. 218; 89 C .J.S . Trusts { 189. p" 101b.

It rvas pointed out in Masino v. Sechrest (1954). 268 Wis, 101. 66 N.W.2d 740. and in Nehls r,,
ryleyer{,1-9-5-9),1-!1-r*?d-1.-7-%-'\:.F.2d?-S-Q.fhata consti'uctive tlust is a rlevice in n ccultof eciuiry,-to
plevent unJtlst ent:ichnlent q'hir:h ar:jses fi'r:m fi'aud oi: :rhuse of confiCentjeri ::eiationshjp rLnri is
implied ir.r iit:c:ompli-chjustrce. in those cijlses^the gr':'rnteeof property u.ould have_ireen un3ustll
enr ic hedbv a i re p r-rd i a ti o n o fa l l a g rfe e ment.S :i r:rrl ai ' i y hei ' er,thepeti ti rtnerrvoul dbeunj ustl venr ichecl
by i"epurliation of the propert,v settlenent. IJean Pound ohsei:veri,'Thr-rsconstmctive trust coulcl be
r-rsedin a variety of situations, *--r * and sornetimes to develop a new fieid tgl3 of equrtable
interposition. as in n hat u'e have come to thrnk the tr-pical case of constructive tmst. namelrr.
specifrc restrtution of a leceived benefit in nrder to prevent unjust enrichment.' The Pros.ress of Law.
Equitv. 33 Harv.Law Rev. 420 (1920). Restatement of Law, Restitution, Constructive Trusts, page
640, sec. 160, states the rule as follows:

'Where a person holding title to property is subject to an equitabie duty to conveyit to another on the
ground that he would be unjustly enriched if he were permitted to retain it, a construcrrvetrust
arises.'

* - * t r * * - k * * - , k ******' 2 r *:t*****? k*************:k**r k ***********-l **********tr*

Page 14 of259
Midland Nat. Bank of Minneapolis v. Perranoski. 299 N.W.2d 404. (1g80)

HEADNOTES
[9] Fraud
lienerallr..one party to a transactionhasno duty to disclosematerialf:rctsto the other,but suchrule cloesnot
applvwhenpartic's are in zifiduci*rvrelationship
lvitheachother.

EXTRACTS
I9l 3. Third-party plaintiffs also argue that Lurie had a duty to discloseto them the material fact that Stone
Housewas not a hmited partnership. fFNgl Although the generairr-le is that ''onepal't]'to a transactionhas
no dutl'' to disclosemat,eriai {'acfsto the other'. anctexccptronto this rule rs made rvhen the parties ar.eip ir
fiduciarl'' relationshrp r,vitheach other'. Klein v. First Edina National Bank, 293 Minn. 418. 421. 196
N.W.2d 619. 622 (.1972). " ',\ lliducinl]rlelation erists s'hen con{lclence
is reposeclon one side iinclt}rei.eis
i"csr-Lititrq
supt:riolitr-$n the othor':aud the relation anclduties in it need not be legal but rna3,' b6:mor:rl.
social,dornt:stic,ur:merclv 1:ersonal."'Kennedyv. Flo-Tronics.Inc., 274 Minn. at 331. 143 N.W.2d at 830
(quoting Stark v. EourtableLife AssuranceSocietv.205 Minn. 1.38.14b,285 N.W. 466.470(1989))

tr *-1"* **** * * ***' r :k* *^ J *:h **** * ********)kJs**:k**?k;k*****rk**-i rtk**i r?k**** * *- * -.k * -* * .,k ?k* -,?

Callahan v. Callahan, 127 A.D.2d 298 (1987)

HEADNOTES
[3] Fraud
Nondisciosurc ttf pertinentinlormationtlratparlv hasdutr,1odiscloseis talramountto affirmatiyemisrepr.esentation.
[4] F r aud
DLrt5'to cU.sciosefbr purpose of fraudulent nondisclosure may arise out of fiduciarl,- or conficlential
relationship or as restrlt rrl one pafi)-'s superror linori'Iedge lhat, rs not availabie to othei'partv.

EXTRACTS
Tr: plcarl it c:tlise o{'action ibr flrar"rd.a plaintiff'must :,i1icgea misrepresenrarion of a material existrng
{irct, fa}srty, scrctrter^ c}eceptionar-rdiniury (see,e.g., Hutcltins u. Utica Mut. hrc. Co..707 A.D.2d 87L.872.
484 N.Y.S.2d 686). Nondisclosure is tantarnount to an affirmative rnisrepresentation rvhere a party
to a transaction is dutl'-bound to disciose certain pertinent information (24 N.Y.Jur., Fraud. and
Deceit, S 107, at 161 [1962] ). Such dut5,' to disclose ma3r arise where a fiduciarv or confidential

P a g e1 5 o f 2 5 9
relatiorrship exists or where a part-v has superior knowledge not available to the other (see,Youttg
u . K eit h. 7I 2 A .D .2 d 6 2 5 .6 2 7 .4 9 2 1 1 .\.5 .2 d 489: C outttJ of W ' estch.ester
u. B ecket A ssoc..102 A .D. 2d34. 80-
5 1. 478 N. Y . S.2 d 3 0 5 . a ,//d . 6 6 N .Y .2 d 6 42. 495 N .Y .S .2d 364. 485 N .E .2d 1029: 24 N .Y .Jur.. Fr aud and
Deceit, SS 106-109, at 159-164 [1962] ). Here, plaintiff has alleged that Wein was personally familiar with
the subject propertSr, havrng visrted it on several occasions, and yet stili assured plaintiff that the assigned
value of $45,000 was fair. Wein also allegedly represented that the separation agreement was fair and
equitabie and that plaintiff did not need her own attorney. Moreover, plaintiff argues that in view of the
relationship of trust between them, Wein was obligated but failed to explain the *301 nature of her one-half
interest in the marital property, and that she was entitled to security for the indebtedness as well as interest
on the balance due.

f 5l [6] F)r'enif a case of actr,tatlfi:aud has not been presenied for"lack of the element of scienter. or actnal
awareness orl \lreiD's pnrt that fillse replesentations rvel:emi:de. rhe ailegations dr: establ is| a brear:h of 6uty
actionatrle as consir'.tcii','eli:auci (see,Del Vecchio u. Nassau Countl, 118 A.D.2d 675. 617-618. 4gg I\.Y.5.2d
l6L Brou;rt' u. Lockutood. i6 A.D.2d i21. 730-731. 132 N.Y.S.2d 786). To recover for constructrve fraud.
plaintiff need not prove actual knowledge of falsitS', but only thar a iiduciarr'**822 or confidential
relr t , nnc f r j. ar-i c t,-rli ;e tl v e e n h e rs e i f a n d \1 i ei n (i d.; see,24 N .Y .Jur., Fraud and D ecei t,
$S 2, 17, 1 09, at 35,
52- 53, 163- 164 [1 9 6 2 ] ).

* ******t( * * * ***** ? k' * *****? k *? k**tr :k*** )k* *****t(** **** *?k********?k**?k *)k* *;f * * * *cr

In re Drvden's Estate" 52 N.W.Zd737(1952)

HEADNOTES
[11] F r aud
Thougir one is under no dut\r to speak,if he does so, he must tell the truth and not suppressor ntaterially qualiB, facts
i.vithinhis knoi,i,ledgeaffectingthe sLrbjectof his disclosure.
[12] Fraud
Frarrdulentrepresentationlnal'.consistof halltrLrths.calculatedto deceive.and a representationliteral11,-true
is fraur1ulent
if Lrsedto createan irnpression sLrhstantiall_v
f-alse.
[13] F r aud
A -"lightimpositic,rrirv onc otherr.vise
underno cir.rtl,tospeakrnar.terminate his privilegeof silence.

EXTRACTS
f 11lf 12l[13] Thor"rg]rone nta-vbe under uo dut1,-to speak. if he undertakes to clo so, he must tell the ti,uth ancl
not suppress facts ri'jthin hjs knowledge or mater:iall5;qualifv them. Flaudulent repi:e-centationsn:ay consist
of half'-truths calculated to deceive, and a representation literallv true is frau.clulent if r-rseclto create an
iurpression sub-qtanriallv false.

P a g e1 6 o f 2 5 9
 * *** )k*tr * ** ** ** * ) k***** ** ***? k*tr *** *,-k*****)k*J.*******tr )k* *?k********>k?k *** * :r

St. Paul Fire and Marine Ins. Co. v. Truesdell Distributing Corp., 296
N.W.zd 47e (1980)

HEADNOTES
[3] Trusts
Trustee has dut1.-to fuli;,'inform beneficiar5r
of aii rnaterial fircts sclthat beneficiarr- can
protect his ou,'ninterests where llecessarv.

EXTRACTS
It h.as long been t?re i ule in this state that the tnistee has a clut-vto fr,rlh infbrm the beneficrary of ali
material f'acts so tl-rat the beneficiarl' can protect his orvn interests where necessarv. Johnson r'. Richard.s.
155 Neb. 552.5 2 N W.2 rl 7 3 i (1 9 5 2 \

* ***? k? .L **>k**:k**'* ?t************Jr **********?k**^J***tr ****** * * * * * * * * * * :k * * * * * * *

Parsons v. Steingut, 57 N.Y.S.2dG6B.1g45

HEADNOTES

[6] Officers and Public Employees

A public office is a pubiic tlust and a11public officers should so conduct thej.r:officrzrlduties as to be erbo'e
suspicir:i.rof irreguJttrities ir.:admi.nistr:ationof thejr offices. even though jrregu|arities malr 11ei.un6ei:
-ouch
the larv, constitute such wilfui misconduct, corruption. or malaclministration as to merit remoyal from office

EXTRACTS
[6] 'lt sliould not be tbrg'ctten that 'a pubJ.rcofiice rs a pr-rblic rrltst.' and al1 public officers should so cond.tcr
theil oificiai dutres as to be lilie Claesar'swif'e.'above suspicion'of irregularities in the admrnietration of
therr ofiices, even tir..lugh such illegulalrties ma;' not, unctei: the law, const,itufe sr.rchrvilful misconduct,
corruption. or millatimrnistt'ation as to merit removal lrom office.' State ex rel. Fletcher v. Naumann. 218
Iowa 418. 431. 2 3 9 N .W. 9 3 . 9 9 . 8 1 A .L .R . 483.

:i- J. + + -l- -l- + -L + + g S J- +.L {- + + {- {- g -L s + *L r r.

^ ^6^-ar^-n ^ ^ ^--rxxit*********'*tr**************;k*****tr******:k****

Page 17 of259
 People v. Savaiano.359N.E.2d475 (1g76)

HEADI{OTES

[3] Officers and Public Employees

Publicofilcialsareheldrnpublictntstard or.ve
a fiduciar,v
dutr to rirepeoplerhevrepresent.

EXTRACTS
**480 ***841 'llhe statute is unique because onil'-public
[3] officinls can violate its trr1ovisiols.These officjals
are held in publrc tntsi and owe a fiduciarl'- dutl,' to the people the-vrepresent. (See Citlz of Chicaeo ex reI.
Cohen v- Keane. 64 Ill.2d 559, 565. 2 Ill.Dec. 285. 357 N.E.2d 452.) ?he high stanclard of concluct ciemandecl
of pubiic officers. coupled rvith the broad srveeping language of the slatute, permits no oiher i.nterpretation
as t o it s int en t a n d rl re tn i n g .

: k * i r i r : k * : r : t * i r : k * *:i- :f*:' :;k*i;:t**' ic**ir ' ,k**i;r t*ic:b *J<**i ri ;:t*i r:t:k*:k:t*i r**i c***-i r:t*i r;k**rk?k*rrrk*tr

EXTRACT ONLY

i3]t4l 3. A public oifico is a pr-rblictrust. Such ofTice-"

ale createcl{br the benefit of rhe pr,rblic.not,for the
benefit o{ltho incr,imbcnt.*118 5 Dunneii, Minn.Dig., 2d Ed. & Sqpps.,SS7934,7985,and casescited.under
notes.

: k * ' * * ' * * * ' : k * * * ' * * ' r :k*' k*' *- *' ***^ r ****- *' l:t****- ***- *- *- k **-:*-**^r***?kx**X *-i r****-**-/r**:ktr**)k

PlaoueminesParish Com'n Council v. Delta DevelopmentCo.. Inc., 502 So.2d1034

(1987)

HEADNOTES

[1] Officers and Public Employees

A publc o{'licer owes an :.rndn'idecl duty to public rvhom he se'rves anrl is not permittecl t,o place
hrmself in
a position rhat rl'ill subiect him to conllicting duties orl callse him to acf other than {br
best interesrs of
prrblic.

P a g e1 8 o f 2 5 9
 *r' i
'-\,
. Jlk{,|&-*

[4] Fraud
Dut5" imposed on fiduciarv ernbraces obligation to render full and fair disclosnre to beneficirrrv
of all facts lvirich m:ltei:'iallv affect his rights and inte rests.

EXTRACTS

f1] A* duly elccted public officials selving thcir constituencies in Plaquemines Parj-qh. ,lrrclge Pe.t.ez,
j.,eatrderPe.rt:z,.Jr'..;rnd Chalin Pet:ezrvere bound lo erei:cise their:
official functions with the utmost clegree
of honestl'-and fjdelitr'. Pubiic officials occupy positions of public tr:ust. Public offices arye ereated for the
purpose of eff,ecting the ends for which go\/ernment has been instituted, rvhich are the
protection, safety, prosperity. and happiness of the people; and not the profit. honor, or private
interest of any one r?ran. famill', or: class ofl men. State u. Maloott, 172 Ohio St. BqB. 176 )l.E.2d qzz. lzl
(196i) ; S lale 1 ,. So a ' o .rd s .6 4 Ok l .C r. 4 3 0. 82 P " 2d 324 (1938). A nd, of course. l r,e srrbscribe t o t he
pr inc iple t hat

a public officer ol'r,'esaI? undivided dutv to the public whom he serves and is not permittecl io
place hirnself in a position that will sulrject hirn to conflicting duties or cause him to act other
than for the best interests of the public.

A r t der s on u . C i tv o f Pa rs o tts .2 Og Ka n.337. 496P .2d 1333,7337 Q972\. FN eC srnurenl i ng o n t he high

dutv of trr,i-qtaud ficleiit-i' or,ved b-,-public officials. the Llnited Srares Suprene Clourt has noteil:

FN9. T,ilu' en{orccntr,'nl,ol-ficialshavo f'luthel'more becn hcld to a higirer respon-+ibi1it1than r::ere cuml.rliance
i v it h t , he] o, w.S ta te u . Sta te F i s h q n d G a me C ommi ssi on.139Mont.384.365P .2d942.948 (1 g6I \ .

P] A fiduciary relationship has been further described as one that exists 'ow-hen confidence is
reposed on one side and there is resulting superiority and influence on the other'.'o Toombs t,"
Dozlels, 361 N.W.2d 801.809 (Minn.1985) (citations omitted). ?he duty irnposed on a fiduciarv
ernbraces the obligation to render a full and fair disciosure to the beneficiary of ali facts whicl:
materially affect his rights and interests. llobbs u. Elchler. 164 Cal.App.Sd 174. 210 Cal.Rptr. 887. 403-
404 (1985) (quoting lleeL t,. Maeana, Oh1.ey.Leuy, Cathcart atud Gelfatud. 6 CaI.Sd 776.98 Cal.Rptr. 837. 4gI
P.2d 421 (1971)). Relative to the duty of disclosure flowing from the fiduciary relatlonship, the fiduciary's
duty to disclose has been held paramount to the beneficrary's duty to investigate possible*1041 conflicts of
interest. See E.F. llurforz ori.d Co. r-,.Brourru.305 F.Supp. 371. 398 (S.D.Tex.196g).

* ; k ; k * * : k * * * * * i ; : k * i ; : ? *:k:f ***********************-,r****:kt-*t<)k**tr***tr-i ******-***:?*

Neel v. Magana, Olnev. Levv. Cathcart & Gelfand. 491 P.2d 421 (1971)

Page19 of259
 hlado Cansa of lction

F, Forms
Conpleint for Sreech of trlduciery Duty

DistrictCourt tr Co{DtYCourt

ffi@s):

v.
Detu&n{s}:
COT'RTT'SE ONLY

@fi Afio{rey (Nme md Addrcss)

Div-: Ckm-:

ptai*ifi, tbrougb the rmdersignedattomey, statesthe following c.orylaint agsiNt

Ddadmt
vrho residesb [comtyT
l. Plaintitr tnariel is a resident of the State of colorado
couxtty zt fstrect fusJ, lciry},colqrado fzip codel'
rsidesb Icotntyl
2. Defendantvrarcl is a reide,nt of the stale of colorado cfro
C@ty atlsr'lea &*sl,lcity\,Colordo tttp co&\
tryan infornattn
3, fIf ryplicable, add: Defazdantis a (icansetprof*sioml) wlto,
Colordo (zb
nd belief, fues bxtnss a* if n afice loeotedat (swa &es$, GA,
ce)-l
4.ThiscourthaspersmljuridictimoverDefEodanl
ttis is a civil
5. This corrt bs jgrisdiction over ihe subjectmatter at isse becarse
\n' $ {1}
action for dqmagBsandlorequibble relief- Colo. Const Arr
pr C'RC'P' 98'
6. Venuei1 rhis corgt is properprsuant to tspecify basisfor vsrnte'
od cite rel'evof sbseaion of C'RC'P' 98i'
wirt
7. [Msifu h Mail lwu, platn$ ccnneto qttq into afi&rcity re]aionship
od ary atal
efqrfu; andfor *twt prrp"ti. D*cribe tlte t,.,Woffidrc*ry relAAnshit

t-14
 8. Breach of Fiduciary Duty

or writta, corwtnni&iotts bawea plabzt;f otd defafurt tha &mowtrate the rraw
of the relaionship sd my ffifustoding @iotrs, od agreenwtts between ttle
pmies.l
8. As fte lsperifyrole u 6tontey, irtvwtu?e{advisor,
suchas: fr"ustee,
erc.l for Plaintifi, Defendaotowed fiduciary duties to Plainti includtng $ist relevant
f&teiey &ty or dutiesj.
9. Defudantbreached [his or her]frfuciary dutiesto Plaintifi, bcluding lhis or ha]
duty of tsp@ify &tty, xrch as: undividedlayalty] in &at Defendaotfailed tn [sryify
Wtt'ilW faihnes onpot offiduciryl.
10. Defuant's breachhas causedmd will crrusePlaifiiff to incur &e following
rr*rnages:[spec{y all economicand non-economicdoruges ailegd}.
WHEREFORE Plaintitr prays for a judgment agetust Defndet and as rdief
rqoests:
A Coryensatory damrgesas '' is court Bay deemjust md prope'q
B. ExqlarY demages;
C. Cosb ofthis actim;
D. Reasombleartorrey fees;
E. Pre,.judgnentaod post-judgmentintneston arr5raward of damagesto the exteot
permifiedby taw; md
F. Sucho&er and ftr&er relief asthis court may deemamrcpriat'
Phfutffidemen& a trhl UVjury es to ell clrim ss trieble.

DATED ftis - day of .

Respectfirllysub'Biteq

lNnu of Aaornq, RqfufrdtrrNunfutl

lNaac of l^atoFiml
AttomeyforPlaintiff

Phinffs Address:
[StredAe6sl
fCity,Staeod ffi1

8-15
 of Action
Calomfu Caalrrrs

NOTES TO FORI}T

Thisformwasad4tedfromafgmcontributedbyWhelcrTrigeKendy,LLP'
Den"e", colorado 8tr200'hup//www'cfiklaw'com-
1801califomia street, suite 3600'
Prerrerfsr Relisf (prmitive)
to include a claim for exerylry
Ir is common prrctice in cotorado c-R-s' $ 13-21-
in &e pd; for relief, * e" abovecor4laint' eventhougb
dpmages
r*
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afterte,aclaisfor exer ylrinitial
the prties etrchegB y
demrges is onty ty menoing;;;r*di"gr
md aft6 fu
"uo**
purs'aot to nUe Ze of A""Col*tao nules of Civil Procedure'
dfocts*res c.RS' $ I 3t I -I 02(I't'
issue-
;rt rr4f*i.poor orl*"ure
de6tr esablishs
;'I" all actionsbrougtt to recover dl*m:rgesfor
InColorado,itisessddalthatattomeysbefami|iarwiththestahtesgpverning
post-i i"t"**t
prren*pent mA "Op""t
fte
.r*o"i*i*, ;..;*.rs;p . . . it is lav/ful fortte plaintiffin
paeonalinjrnies*,t,io"aryanyFrsonresultingfromoroccasiodwketortofmy
pe,rson,*rp*Jo* o4 on
oitcr
m &e ,,-"6;[t*t ii'"- tE dafsaid suit is flee
corylaint to crai* interei to clairnin*rest on tbe
!g'g,rt is trasr'rl fo, tI pfuioJf T-ry:Y*li"'
asd after luty l, If interestts
from fte dat tro r.m; r*"*d"- c'RS' $ l3t1-101(1)'
drrnegesclaimed 127 Cslo' 25'252P'2d
in he corylainl interestis-waive& Clarko' ii&'
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1067(1953)-
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the paties as o interest,interstcan only be recove,rcd 1' 188colo'
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in Sectio s-tz-tiz. aarvt a breachof
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8-16
 Gmail - Attention Howard the powers delegatedto a public officer ...PageI of 1l

G r u ,i $ Gemi n i Investments <gemi n i research@gmai l.com>

att.riil H;*aro ilt" pl;"; detegated

to a pubtic
officerare held in trust for the people
1 message

o t* reservingtotusvox waivingnullus
truth@truthpress.org Mon,Jan24,2011
uberimafidae<truth@truthpress.org> at 12:40PM
To:geminiresearch@gmail.com

. http://www.hobbleknot.com/
EYR/Dm dVerEvOfTradeO
rBusi ness-CTR.pdf

63c Am.Jur.2d,
Publicofficersand Emplovees
s247
"As expressedotherwise,the powers
delegatedto a public officer are held in trust
for the people and are to be exercrsed in
behalf of the government or of att citizens
who may need the interventionof the officer.
U Furthermore the view has been
expressed that all public officers, within
whatever branch and whatever level of
government,and' whatever be their private
vocations

are trusfees of the

https://mail.eoogle.com /mall,/h/7n3zosvsd8l zs /?v=nt,("rh=12rth 1 /)L /)n11
Gmail - Attention Howard the powers delegatedto a pubiic officer ...Page2of 77

and accordingly labor under every disability

and prohibition imposed by law upon
trustees relative to the making of personal
financial gain fram a discharge of their
frusfs. [2J
That is, a public officer occupies a fiduciary
relationship to the political entity on whose
behalf he or she serves. ,,, and owes a
fiduciary duty to the public. ,,, lt has been
said that the fiduciarv respo nsibilfffes of a
public officer cannot be less than those of a
private individua|.,,,
Furthermore, it has been stated that any
enterprrseundertaken by the public official
which tends to weaken public confidence
and undermine the sense of security for
individual rights is againstpublic policy.[61"
[63C Am.Jur.2d, Public Officers and
Employees,52471

VIIJ State ex rel. N a g l e v S u l l i v a n ,9 8 M o nt

; 425,4A Pzd gg5, 99 ALR 321;Jersey Gity v
Hague,18 NJ 584 ,1 1 5A 2 d 8 .
W Georgia Dep't of Human Resources v

hthrs:/ / mail.s.ooqle.com/
mail/h/ln3zosvsdSlzs / ?v-ot&th=12db... 1 /24/ 2011
 Gmail - Attention Howard the powers delegatedto a public officer... page3 of 77

Sistrunk, 249 Ga 543, 291 SE2d 524, A

public official is held in public trust.
Madlenerv Finley (1st Dist) 101 ilt App 3d
796, 113 lll Dec 712, S1SNE2d 69Z,app gr
117 lll Dec 226, 520 NE2d gBTand revd on
othergrounds 128lll 2d 147,191llr Dec 14s,
539 NE2d 520.
I3l Chicago Park Dist. v Kenroy, Inc., Tg lll
2d 555,37 lll Dec 291,402NE2d181,appeal
after remand(1st Dist) 10Tlll App gd 222,63
lff Dec 134,437NE2d783.
U] UnitedStatesv Holzer(CAZilt) 816 Fzd
304 and vacated, remanded on other
grounds 484US 802, 98 L Ed Zd 19, 109S
Ct 53,on remand(CA7!ll) S40F2d 1949,cert
den 486US 1035,100L Ed 2d 008, 108S Ct
2022 and (criticizedon other grounds by
United States v Osser (CA3 pa) 964 Fzd
1056)and (supersededby statuteon other
grounds as stated in united states v Litile
(CAs Miss) 889 F2d 1307) and (among
conflicting authorities on other groundi
notedin Unitedstatesv Boylan(cA1 Mass)
898F2d 23A,29Fed RulesEvid Serv 1?,2gl.
El Chicagoex rel. Cohenv Keahe,64 lll Zd
559, 2 lll Dec 285, 352 NE2d 452, later
proceeding(1st Dist) 10Silt App 3d 299,61

https://mail.goosle.com/maiI/h/ln3zosvsdSlzs/?v-ot&th=t2r1h 1/)4/)o11
Gmail - Attention Howard the powers delegated to a public officer ... Page 4 of 11

lll Dec 172,434NE2d325.

16l Indiana State Ethics Comm'n v Nelson
(fnd App) 656 NE2d 1172,reh gr (lnd App)
659 NE2d 260, reh den (Jan 24, l 996) and
transferden (May28,1996).

http://famg uardian.o rg/

TaxFreedom/GitesByTopic/
PublicOffice.htm# ftn6

1. CITESBY TOPIC:publicoffice
A publicofficialis held in publictrust. Madlenerv
Finley(1 stDist)161lll App 3d 796,113lll DecZ1Z,
515NE2d697,app gr 117lll Dec 226,520NE2d
3 87...
famg uardian.org/TaxFreedom/
CitesByTopic/PublicOffice.htm - Cached
2. [PpF]
DEMANDFORVERIFIED OF ''TRADEOR
EVIDENCE
BUSINESS''
ACTIVITY
...
Adobe PDF- Viewas html
A publicofficialis held in publictrust.Madlenerv
Fin ley(1 stDist)161lll App 3d 796,113lil Dec712,
{515 NE2d697,app gr 117lll Dec 226,S20NEZd387
and revd ...
sedm.o rg/Forms/Tax/Co rrErrlnfoRtns/
DmdVerEvOfTradeOr...
3. DmdVerEvOfTradeOrBusiness-CTR

https:/ / mail.google.com/mall /h / ln3zpqvsdSlzs / ?v=ot&th=12dh 1 / 24 / ?o11

 Gmail - Attention Floward the powers delegated to a public officer ... page
5 of 11

A publicofficialis held in pubrictrust.Madlenerv

Finley(1stDist)161ilt App 3d 296,113ilt Dec 712,
515 NEzd697,app gr 117ilt Dec 226,s20 NEzd 3gT
and revd ...
www.docstoc,com/docs/4069230 1/
DmdVerEvOfTradeOrBus i ness-CTR- Cached
4. [PpF]
DEMANDFORVERIFIED EVIDENCE
OF ''TRADEOR
BUSINESS''
ACTIVITY
...
AdobePDF- Viewas html
A publicofficialis hetdin pubrictrust. Madlenerv
Finley(1stDist)161ilt App 3d 796,113ilt Dec 712,
515NE2d697,app gr 117Il Dec 226,s20 NE2d397
and revd ...
www.ho bbleknot.com/EyR/
DmdVerEvOfTradeO rBusi ness-GTR.pdf
5. Publicv. PrivateEmployment: you Reallywork for
UncleS am ...
A publicofficialis held in pubrictrust.Madlenerv
Finfey(1stDist)161ilt App 3d 296,113ilt Dec 712,
515NE2d697,app gr 11TIt Dec 226,S20NE2d...
www.famg uardian.org/Subjects/
Taxes/Remedies/PublicV... - Cached
6. HumanRightsand PeaceLaw Docket

U.S.v. Goering6 FRD09 (19a6);(Triatof Major...

instigationof/withconsentor acquiescence of
pubfic official...of Gt'sjurisdiction. Tt4-11174:lcJ
heldpublich'gs on ...
s unsite.berkeley.edu/meiklejohn/meik-
peacelaw/meik-peace...
- Gaehed
7 . Frontierov. Richardson
Frontierov. Richardson... Morefrom this user
www.sc ri bd.com/doc/39Z3B414lFr ontiero-v-

https:/ / mail.google.com/m ail/h/ ln3zosvsdilzs /?v=nf&rh =1)dh 1 / )^ / )n11

Gmail - Attention Howard the powers delegatedto a public officer ...Page6 of 77

Richardson- Cached
8. SovFormslnstr-tocs
Morefrom this user
www.scribd.com/doc/33332509/SovForms Instr-tocs
- Cached
9. The "tradeor business"scam
...1918);Merchant's Loan& TrustCo.v... Davisv.
Davis.TexCiv-App., 495S.W.2d...tax indirectly
when they heldthe following:"The distinction
betweenpublic...
medies/
famg uardian1.o rg/Subjects/Taxes/Re
TradeOrBusiness... - Cached
10. PersonalLiabilityUnderthe Civil RightsAct of
1991...
...Sch.Dist.102,No.93-C-2568, 1993WL 532472, at
.2 (N.D.lll. Dec.2'1,1993) (superuisors may be
held...Pa.Dec.17,1993); Finleyv ...publicofficial
has beenheld...
ls.lexisnexis.com/webcd
Iitigatio n-essentia I app?---

1. CITESBY TOPIC:publicoffice

[1] Stateex rel. Naglev Sullivan,98 Mont425,40Pzd 995,

99 ALR 321;JerseyCity v Hague,18 NJ 584,115 A2dL t2I
GeorgiaDep'tof HumanResourcesv Sistrunk,249---
famg uardian.org/TaxF reedom/
CitesByTopic/Pu blicOffice.htm - Cached
2. [PpF]
DEMANDFORVERIFIED OF "TRADEOR
EVIDENCE
...
ACTIVITY
BUSINESS''
AdobePDF- Viewas html
of a publicofficercannotbe
...fiduciaryresponsibilities

https:/ /mall.soosle.com/mail/h/TnSzpgtrsdllzg,/?v-pt&th=12db... I/24/2077

Gmaii - Attention Howard the powers delegatedto a public officer... Page7 of 11

lessthan those of a privateindividual.5 1 Stateex rel.

Naglev Sullivan,98 Mont 425,40 Pzd 995,99 ALR 321...
www.ho bb leknot.com/EYR/D mdVerEvOfTradeOrBusiness-
CTR.pdf
3. [PpF]

IRSDUEPROCESS
MEETING
HANDOUT
AdobePDF- Viewas html
...Stateex rel. Naglev Sullivan,98 Mont 425,40 P2d995,99
ALR 321.....24 U.S.v. Bartrug,E ...
famg uardian.org/TaxF reedom/
Forms/TaxExamAud iUlRSDuePro...
4. [PpF]
DEMANDFORVERIFIED OF "TRADEOR
EVIDENCE
BUSINESS''
ACTIVITY...
AdobePDF- Viewas html
...individualrightsis againstpublicpolicy.6 " [63C
Am.Jur,2d,PublicOfficersand Employees,5247]1 Stateex
rel.Naglev Sullivan,98 Mont 425,40 Pzd 995,99 ALR 321...
sedm.org/Forms/Tax/CorrE rrlnfoRtns/
DmdVerEvOfTradeOr...
5. [PpF]
CORPORATIZATION
OF THEGOVERNMENT
AdobePDF- Viewas html
...Stateex rel. Naglev Sullivan,98 Mont 425,40 PZd995,99
ALR 321.....25,37Stateof Minnesotav
www.fourwinds 10.com/resources/
uploads/pdf/SEDM_CorpGovt.pdf
6. [PpF]
IRSDUEPROCESS
MEETING
HANDOUT
AdobePDF- Viewas html
...Stateex rel.Naglev Sullivan,98 Mont425,40Pzd995,99

https:/ lmail.google.com/mail/h/7n3zpwsd9lzs,/?v-pt&th=12db...
1./24/2077
 t)r r r
_ Attention F{oward the powers delegated to a public ottlcer ... rage o
Gmail

33 Stateof Minnesota"'
ALR 321..'.'
rms/D RSD
iscovery/l Handout'pdf
ueProcMtg
sedm.org/io
7. [PDF]
LAW IS LAW FORGOVERNMENT
WHYALL STATUTORY
A N DNO@
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:.";;;,'rf,'r ffi.cas. 17stateexrel'
737...'.
r.ri; ; t "iii;; ",9b'M o1t425, !9_l ?::-t1,:t"flst*"
AAF rrl \ A l E Jan.l

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"
...6 3c A m . J ur . 2d, Pu b | i c o ffi c e rs a n d Emp
Pzd| o995'
y 9 999
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fl"gfb v Sultivan, 98 Mont 425,40
State.* ,"i.
ALR 321;lerse! Cityv Hagu":]9.NJ 584"'
www.docstoc.cbm/d ocs/4069230 1/
DmdVe,evorrraoeorBusiness.GTR-cached
e. IPDFI
SCAM
THETRADEOR BUSINESS
AdobePDF- Viewas html 425,40 Pzd995'99
...stateex rel.Nagle usftliuan, 98 Mont
ALR 321-....38, 64 Stenbergv'
p/trade-or-busi ness'''
www.f reedom-schooi.comlcitizenshi
10. ts S45,5gz-tsy//6o//tttto6trtozo(t

ex rel (.".".st?i. of Montanav stanko,case

Kleist
state
-_...No.97-486; 1998MT32i;292Mont192;974P-zd "' ex rel'
u ilp"iio, court,'1 13Wash 296;193P 845;12
Makris
ALR. . .
sPeedlimits'htm - Cached

. CITESBYTOPIC:Publicoffice
Au g 1 6 ,2009...[3]C hi c agoP a r k ' Dis107t , viy
K eelry
n r o3d
y ,222,
ln c .63
, 7 8--'
lt t 2 d 5 5 5 , 3 7 t l tD e c2 9 1 ,4 0 2
NE2d181, rJiand
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htm - cached
ui.q ov.coff axFrJeJoi/. ../Pubticoffice'
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Gmari - Attentron.hloward the powers delegated to a public otficer ... l'Jage9 of 77

o [PDF]

AND"INCLUDING''
OF THEWORDS''INCLUDES''
MEANING

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3 ChicagoPark Dist.v Kenroy,lnc., 78 lll 2d 555,37 lll Dec 291, 402 NE2d .,.
inclusion.semitaqui ncludess.pdf
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DEMANDFORVERIFIED OF "TRADEOR
EVIDENCE
ACTIVITY...
BUSINESS''
II
FileFormat:PDF/Adobe
Acrobat
N E 2d697,ap pg r 1 1 7lll De c2 2 6 , 5 2 0NE 2 d3 8 7a n dr e v do n oth e r
No v2 3 ,2 0 08...515
grounds128Ul2d147,131lll Dec 145,538NE2d. 520.3 ChicagoParkDist.v Kenroy,
lnc.,78lll 2d 555,37 lll Dec291,402NE2d181,appealafterremand(7sfDlsf)107lll App
3d 222,63 lll Dec 134,437.NE2d783....
sedm.org/Forms/Tax/.../DmdVerEvaff radeOrBusine ss-CTR.pdf
o [PDF]

BURDENOF PROOF
GOVERNMENT

ilFileFormat:PDF/AdobeAcrobat
Nov 6, 2006 ...3 ChicagoPark Dist.v Kenroy,lnc., 78 lll 2d 555,37 lll ...
sedm.org/Forms/MemLaw/Burden OfProof.p df
o [ PD F ]

FEDERALTAXWITHHOLDING

FileFormat:PDF/Adobe Acrobat
3 ChicagoPark Dist.v Kenroy,lnc.,78lll 2d 555,37 lll Dec291,402 NE2d...
sedm.org/Forms/Tax/Procedure/ Fed Tax WithhoIding.pdf
Showmoreresultsfromsedm.org
o [PDF]

DE FACTOGOVERNMENT
SCAM
nr*t
Fiteformat:PDF/Adobe Acrobat
Mar 1,2010 ... 10 ChicagoPark Dist.v. Kenroy,lnc.,78 ttt2d 555,37 tll Dec 291, 402
NE2d181, appealafterremand(7sfDisf)107lll App 3d 222,...

h ++t o ./ /rnq il r y nn. t lo ...^ / t t , o; l lh /1-?ot . t . r o A Q l - n / 2 - . r - t . . l {. - +h - 1 )Ah 1 /) L /) n 1 1

Gmail - Attention Howard the powers delegatedto a public offic... Page10 of 11

sedm 1.orq/Forms/MemLaMD eFactoGov.pdf

. Theworld FreemanSocietyPublicForum. view topic - Do
you hold ...

L.Jr__l
1 post- 1 author- Lastpost:Apr 29,2010
[3] ChicagoPark Djst.v Kenroy,lnc.,78 lll 2d 555,37 ttlDec 291,402 NE2d181, appeal
afterremand(1st Dist)107lll App 3d 222,...
pic.php?f=43&t=s502- cephed
forum.worldfreemansociety.orq/viewto

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D E M A NDFO RV ERIFIED
EVIDENCE
i--ra-
r---ll ;
FileFormat:PDF/Adobe Acrobat
Oct26,2006...12 ChicagoPark Dist.v Kenroy,lnc.,78llt 2d 555,37 tllDec291,402
NE2d181, appealafterremand(7sfDisf)10T lllApp 3d 222,63 til ...
vvww.hobbIeknot.com/EYR/DmdverEvofrradeo rBusin ess-tR.pdf
. [PDF]

CommentLetter
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FileFormat:PDF/Adobe Acrobat
in Peskinv. Deutsch,134 lll.App.3d
4B,55-56 (7sfDisf.1985)....... Dish.ctv.
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lnc.
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555,565,37 111 . De c . 2 9 1 , 4N.
0 2E . 2 d1 8 1 ;. . .
vvvvw.sec.gov/rules/sro/nyse/nyse200577/ny se2a0s77- 14.pdf - SimiIar
o [PDF]

E N C L OSURE
(1 1Xb):
i-

FileFormat:PDF/Adobe Acrobat- Viewas HTML

May25,2007...3 gark Dist.v Kenroy,lnc.,78 lll 2d 555,37111Dec291, 402NE2d181,
appealafterremand(lst Dist)107lr11App 3d 222,63 lll Dec 134,...
vvvvw.fourwindslj.com/.../CH
13 ?8 ExhibitA Enclosure11 b Federal%o
20Jurisdiction.pdf

Replyto senderI Replvto group I Replyvia web post I start a NewTopic

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Gmail - Attention Howard the powers delegatedto a public offic... Page 11.of i.1.

VisitYou rGr ouo

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IIAIIH A NOTII!
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