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159 Wis. 2d 175

464 N.W.2d 217

Parge v. Parge

Court of Appeals of Wisconsin

Decided November 13, 1990

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Court of Appeals of Wisconsin · decided 1990-11-13

Cited by 9 later decisions — most recently October 2009

7 state decisions

Key passage — most relied on by later courts

“The constructive trust is an equitable device created by law to prevent unjust enrichment, which arises when one party receives a benefit, the retention of which is unjust to another.A constructive trust will be imposed only in limited circumstances. The legal title must be held by someone who in equity and good conscience should not be entitled to beneficial enjoyment. Title must also have been obtained by means of actual or constructive fraud, duress, abuse of a confidential relationship, mistake, commission of a wrong, or by any form of unconscionable conduct.”

quoted by 1 later decision, including Singer Ex Rel. Cohen v. Jones

“maintain a minimum of $7,500.00 life insurance policy with the minor children of the parties as beneficiaries .... Said insurance shall remain in force until the children are no longer subject to support.”

quoted by 1 later decision, including Singer Ex Rel. Cohen v. Jones

Relies on 93 Wis. 2d 671 - Wilharms v. Wilharms · 58 Wis. 2d 290 - Richards v. Richards · Truelsch v. Miller

Good law ✅— No negative treatment on recordhow we know

Decided 1990-11-13

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*181FINE, J.

¶1(dissenting). Franklin and Vivian Parge were divorced in 1974. They had five children. At the time of the divorce, Franklin Parge had no life insurance. The judgment of divorce, however, directed him to "maintain a minimum of $7,500.00 life insurance with the minor children of the parties as the beneficiaries," and provided that "[s]aid insurance shall remain in force until said children are no longer subject to support." Franklin Parge did not comply with that direction.

¶2In 1976, Franklin Parge married Constance. They had one child, Raquel Jean. Franklin Parge and Constance Parge were divorced in 1979. At the time of this divorce, Franklin Parge had no life insurance other than a policy in the amount of $1,510.89, which had previously named his father as beneficiary. In 1977, Franklin Parge had changed the designated beneficiary on this policy to Constance Parge. The 1979 judgment divorcing Franklin Parge and Constance Parge provided that "each of the parties shall maintain such life insurance ... as they now have, naming the minor child of the parties as beneficiary thereon, until the minor child Raquel Jean Parge, shall have reached the age of 18 or become otherwise emancipated."

¶3In 1987, Franklin Parge obtained a $15,000 life insurance policy and named Raquel Parge as the beneficiary. Franklin Parge died in 1989. The minor children of Franklin and Vivian Parge commenced this action to recover on the two policies. The majority affirms the trial court's grant of summary judgment dismissing their complaint. I respectfully dissent.

¶4When Franklin Parge designated Constance Parge as the beneficiary on the $1,510.89 policy, he was under an obligation created by a final court decree to "maintain a minimum of $7,500 life insurance" for the benefit of the minor children of his first marriage. His designa*182tion of Constance Parge as beneficiary thus violated that decree. He was still under that obligátion when he named Raquel Parge as beneficiary of the $15,000 policy. By affirming the trial court's refusal to impose a constructive trust on $7,500 of the proceeds of those policies, the majority in effect rewrites the 1974 final judgment.

¶5"The constructive trust is an equitable device created by law to prevent unjust enrichment, which arises when one party receives a benefit, the retention of which is unjust to another." Wilharms v. Wilharms, 93 Wis. 2d 671, 678, 287 N.W.2d 779, 783 (1980). The person against whom the trust is imposed need not be a wrongdoer. Id.,93 Wis. 2d at 679, 287 N.W.2d at 783. Rather, it is sufficient if one person has been deprived of a right to the benefit of another. See id.,93 Wis. 2d at 680-681, 287 N.W.2d at 784; Richards v. Richards, 58 Wis. 2d 290, 296-299, 206 N.W.2d 134, 137-138 (1973) (constructive trust imposed where decedent violated express terms of divorce decree). Here, Franklin Parge was directed by a final court judgment to use in one specific way whatever resources he had available to obtain life insurance; he was directed to use those resources to maintain $7,500 worth of life insurance for the benefit of the minor children of his first marriage. By diverting those resources for the benefit of his second wife and their child, Franklin Parge violated that final court judgment. Those for whom the judgment mandated protection have been deprived of $7,500; those who were strangers to that judgment have been unjustly enriched by that amount. I would reverse. Cf. Truelsch v. Miller, 186 Wis. 239, 259-260, 202 N.W. 352, 360 (1925) (constructive trust imposed on fund created by diversion of *183resources designated for the benefit of another even though specific monies cannot be traced).

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