Appeal from a judgment in the Eastern District of New York, Charles P. Sifton, District Judge, imposing a constructive trust and directing an accounting.
Before: KAUFMAN, TIMBERS and MAHONEY, Circuit Judges.
Appellant Herbert Brand ("appellant" or "Herbert") appeals pro se from a judgment entered June 16, 1986 in the eastern district of New York, Charles P. Sifton, District Judge, imposing a constructive trust for the equal benefit of Herbert and Robert Brand, the two sons of Anton Brand, on certain assets held by appellant and directing an accounting by appellant with respect to his handling of those assets.
The judgment appealed from was entered on the court's findings of fact and conclusion of law. The court held that appellant had promised his father to preserve during the father's lifetime certain assets which, on his death, would constitute his estate; that the father, in reliance on the promise, had transferred to appellant title to, or the interest in, almost all of his assets; and that appellant's breach of the promise resulted in his unjust enrichment.
The sole issue on appeal is whether the court erred in imposing the constructive trust.
We hold that the court's findings of fact are not clearly erroneous. We further hold that its conclusion of law comports in every respect with the New York law on constructive trusts applicable to this diversity action. We therefore hold that the court correctly imposed the constructive trust.
We summarize only those facts believed necessary to an understanding of the issue raised on appeal.
Appellee Robert Brand ("appellee"), plaintiff below, and appellant, defendant below, are brothers. They are the only children of the late Anton Brand ("Anton") and the late Maria Brand "(Maria"). Both brothers are in their early forties. Appellee is a citizen of Connecticut. He resides with his wife and two children in Newtown. He is employed as a salesman by a chemical company. Appellant is a citizen of New York. He resides on Long Island. He has been a part-time substitute school teacher and, during the summers, a lifeguard.
On February 23, 1950, Anton executed a will leaving his entire estate to his wife Maria, on, in the event that she predeceased him, to his children in equal shares, per stripes. That will never was revoked or modified. Maria died in 1979. After Maria's death and throughout the period giving rise to the instant action, appellant lived with Anton in a house in Yaphand, New York.
Sometime during 1979, Anton was stricken with Parkinson's disease. Beginning in early 1983, Anton transferred to appellant interests in certain bank and securities accounts ("the accounts") as follows:
Account Date of Transfer Nature of Transfer
Brokerage account at February 4, 1983 From Anton to Janney Montgomery Scott Anton and appellant as joint tenants. Securities account at February 15, 1983 From Anton to Federated High Income Anton and appellant Securities with rights of survivorship. Union Savings money March 24, 1983 From Anton to market account Anton and appellant with rights of survivorship. Barclay's Bank checking August 4, 1983 to From Anton to account September 2, 1983 Anton and appellant with rights of survivorship. Putnam High Yield 1983 From Anton to Securities Trust Anton and appellant as joint tenants. Limited partnership 1984 From Anton to interest in Demson Energy Anton and appellant Company jointly.
On November 16, 1984, appellant filled out a preprinted form deed conveying title to the Yaphand house and property ("the Yaphand property") from Anton to appellant. Anton executed and delivered the deed to appellant on the same day.
In a letter from appellant to appellee dated December 5, 1984, appellant discussed in detail Anton's illness and, in the event of his death, how his assets should be treated and how appellant and appellee should share his estate. Appellant suggested that the accounts be left intact and stated hat "the interest [should be] shared equally" and that "after taxes your share should come to over $400. a month. That would be every month for the rest of your life." Appellant suggested also that the Yaphand property "could be sold but I think that would be a mistake. Aside from making you pay high taxes . . . it would give a goodly portion of the value of the house to the Government. I think this value should be kept by both of us." Appellant suggested that certain rooms in the house be rented, and stated that "we could split [the] profit and I could also mail you the money every month." The letter further stated:
"I haven't taken this up with Pop but I think he would agree with my ideas of how the estate should be divided. Pop and I have already taken measures to avoid either lawyers or the Govt. from getting anything from his death. And, as I see it, if we sue this plan we will continue to avoid such potential leeches. And leeches are exactly what they are. Once a lawyer is involved his intentions will be to create greed and discontent. And, if the Government gets involved with any major sale transactions they too become a leech, more of a bandit actually." (emphasis added).
Anton died on July 6, 1985. At that time, the aggregate value of the accounts was approximately $125,000; the value of the Yaphand property was between $100,000 and $125,000. from July to September 1985, both appellee and his attorney attempted through letters to reach a settlement with appellant ...