Commercial Division Blog
Court Upholds Claim Seeking Constructive Trust
On April 2, 2020, the First Department issued a decision in Homapour v. Harounian, 2020 NY Slip Op. 02179, upholding a claim seeking a constructive trust, explaining:
The court erred in dismissing the derivative claim for a constructive trust against Harounian and the Harounian LLCs. A constructive trust is an equitable remedy, and its purpose is to prevent unjust enrichment. Accordingly, it may be appropriate to impose a constructive trust in situations when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest. Here, the complaint sufficiently alleges that Harounian misappropriated the Family LLCs' funds to acquire real property for his own personal benefit (which were allegedly owned by the Harounian LLCs).
(Internal citations omitted).
We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. This decision discusses one tool to help a judgment creditor collect on a judgment: the imposition of a constructive trust over the proceeds of wrongly-transferred funds. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client need help collecting on a judgment.