B. [§ 8.21] Remedy for Breach of Confidential Relationship

• Jurisdiction: Maryland

B. [§ 8.21] Remedy for Breach of Confidential Relationship

Where a plaintiff seeks to impose a constructive trust because of a breach of a confidential relationship, however, the rules are somewhat different. In such a case, the Complaint must demonstrate:

1) There is an acquisition of property in which the plaintiff has some good equitable claim;
2) The existence of the confidential relationship; and
3) The breach of the confidential relationship by the dominant party.

Wimmer v. Wimmer, 287 Md. 663, 668-71, 414 A.2d 1254, 1258-59 (1980). The Court of Appeals has also noted that "[i]f a confidential relationship is breached or abused, with the result that property was transferred from the trusting party to the dominant party, a constructive trust may be ordered." Figgins v. Cochrane, 403 Md. 392, 410, 942 A.2d 736, 746 (2008).

In Wimmer, the Court of Appeals explained that:

In the ordinary case, there must be clear and convincing evidence not only of wrongdoing, but also of the circumstances which render it inequitable for the holder of the legal title to retain the beneficial interest. However, where a confidential relationship exists, the rules are somewhat different. In the context of the law of constructive trusts, a confidential relationship "exists where one party is under the domination of another, or where, under the circumstances, such party is justified in assuming that the other will not act in a manner inconsistent with his or her welfare." A confidential relationship will not be presumed from a marital relationship, but must be established by convincing evidence. Once a confidential relationship is shown, a presumption arises that confidence was placed in the dominant party and that the transaction complained of resulted from fraud or undue influence and superiority or abuse of the confidential relationship by which the dominant party profited. This presumption shifts the burden to the defendant to show the fairness and reasonableness of the transaction. The defendant's evidence must be clear, satisfactory, and convincing to overcome the presumption.
* * * [U]nless there was some transaction by which one party acquired some property in which the plaintiff had a bona fide equitable claim, however, no constructive trust may be imposed.

Wimmer, 287 Md. at 668-69, 671, 414 A.2d at 1258-59 (citations omitted); see also Doe v. Doe, 122 Md. App. 295, 712 A.2d 132 (1998), rev'd on other grounds, remanded, 358 Md. 113, 747 A.2d 617 (2000). See Figgi...