Brenda agrees to act as Jack’s agent in settlement negotiations with an insurance company. Brenda works out a profitable compromise for Jack, but deposits the company’s payment in her own account and refuses to give it to Jack. Besides normal contract and tort remedies, what remedy might a court impose for Jack?
Expert Answer
Besides using the remedies related to contract and torts, the court may use remedies for Jack using the Doctrine of Constructive Trust in this particular case. A constructive trust is an equitable remedy which resembles a trust imposed by the court to benefit a party (in this case, Jack) that has been wrongfully deprived of its rights due to either a person (here, Brenda) obtaining or holding legal right to property (the payments from the insurance company) which they should not possess due to unjust enrichment. Brenda’s enrichment is unjust here because this is something in excess of her fees or payment for her service as per the contractual agreement between her and Jack.