Tikalsky v. Friedman
| Decision Date | 23 May 2019 |
| Docket Number | No. 2017AP170,2017AP170 |
| Citation | 928 N.W.2d 502,386 Wis.2d 757,2019 WI 56 |
| Parties | J. Steven TIKALSKY, Plaintiff-Appellant, v. 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. |
| Court | Wisconsin Supreme Court |
For 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.
For 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.
¶1 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.1
¶2 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").2
¶3 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.3 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."4 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. Tikalsky died in 2014, five years after her husband.
¶4 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.5 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)6 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.
¶5 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.7 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):
¶6 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.
¶7 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.8
¶8 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, 382 Wis. 2d 830, 2018 WL 2422657 . 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. Id.
¶9 We granted Terry's petition for review and now reverse the court of appeals.
¶10 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 (). 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 N.W.2d 136.
¶11 "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, 401 N.W.2d 816. "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, 401 N.W.2d 816. And we liberally construe pleadings "with a view toward substantial justice to the parties." Id. (citing Wis. Stat. § 802.02(6) ).
¶12 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...
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