ELMORE
Appeal by plaintiff from order entered 7 July 2011 by Judge Chester Davis in Forsyth County District Court. Heard in the Court of Appeals 8 February 2012. William W. Walker of Craige, Brawley, Lipfert & Walker, LLP, attorney for plaintiff. No brief filed by defendant.
ELMORE, Judge.
Carol S. MacMillan (plaintiff) appeals from an order dismissing her motion in the cause for failure to state a claim upon which relief can be granted. After careful consideration, we reverse.
In 1955 plaintiff married Jerrold MacMillan, and in 1985 the couple divorced in Massachusetts. Around this time, plaintiff and Jerrold executed a separation agreement which provided in part that “[Jerrold] agrees that his last will and testament, or other instrument will provide Twenty–Thousand Dollars ($20,000.00) for [plaintiff] on the death of [Jerrold.]” In January 1985, Jerrold was living in Winston–Salem, so plaintiff sought to have the separation agreement registered in this state. On 25 March 1985, the Forsyth County District Court entered an order, registering the separation agreement. Then on 4 September 1985, the court entered a consent judgment, which addressed additional issues between plaintiff and Jerrold. That consent judgment modified the existing separation agreement such that “[Jerrold] will provide in his last will and testament, through insurance, or, if [Jerrold] dies intestate and without insurance, by hereby recognizing that plaintiff has a valid claim against defendant's estate for the payment of $18,000.00 to plaintiff upon [Jerrold's] death.”
Jerrold died in May 2010. He was survived by his wife, Mary MacMillan (defendant). Jerrold's will contained a specific bequest of $18,000.00 to plaintiff, pursuant to their agreement. However, at the time of his death Jerrold's estate had assets totaling only $7,500.00. Those assets were then distributed to defendant as part of her year's allowance as the surviving spouse, pursuant to this state's general statutes. Defendant also received more than $35,000 .00 from Jerrold's life insurance policies and IRA account.
On 1 February 2011, plaintiff filed a motion in the cause, requesting that the court impose a constructive trust for her benefit on the funds received by defendant as a result of Jerrold's death. Defendant then filed a motion to dismiss for, among other things, failure to state a claim upon which relief can be granted. On 7 July 2011, the trial court entered an order granting defendant's motion and dismissing plaintiff's suit for failure to state a claim upon which relief can be granted. Plaintiff now appeals.
“The motion to dismiss under N.C.R. Civ. P. 12(b)(6) tests the legal sufficiency of the complaint. In ruling on the motion the allegations of the complaint must be viewed as admitted, and on that basis the court must determine as a matter of law whether the allegations state a claim for which relief may be granted.” Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979) (citations omitted). “This Court must conduct a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court's ruling on the motion to dismiss was correct.” Leary v. N.C. Forest Prods., Inc., 157 N.C.App. 396, 400, 580 S.E.2d 1, 4,aff'd per curiam,357 N.C. 567, 597 S .E.2d 673 (2003).
On appeal, plaintiff argues against each of the grounds asserted in defendant's motion to dismiss. However, the order at issue states that the motion to dismiss was granted on only one ground, failure to state a claim. Thus, we will only address plaintiff's argument with regards to whether the trial court erred in dismissing her suit for failure to state a claim. Upon review of plaintiff's pleading, we conclude that the trial court erred in dismissing her suit.
“A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.” Sara Lee Corp. v. Carter, 351 N.C. 27, 34–35, 519 S.E.2d 308, 313 (1999) (quotations and citation omitted). Courts will impose “a constructive trust to prevent the unjust enrichment of the holder of the legal title to property acquired through a breach of duty, fraud, or other circumstances which make it inequitable for [the holder] to retain it against the claim of the beneficiary of the constructive trust.” Id. at 35, 519 S.E.2d at 313 (quotations and citations omitted). “[T]here is a common, indispensable element in the many types of situations out of which a constructive trust is deemed to arise. This common element is some fraud, breach of duty or other wrongdoing by the holder of the property, or by one under whom [the holder] claims[.] ” Roper v. Edwards, 323 N.C. 461, 464, 373 S.E.2d 423, 423–24 (1988) (quotations and citation omitted) (emphasis added) (alteration in original).
Here, plaintiff's pleading alleges 1) that pursuant to two court orders Jerrold was to provide the sum of $38,000.00 to plaintiff through his last will and testament, 2) that according to those court orders any of Jerrold's assets, including insurance policies, could be used to pay the sum owed, 3) that at the time of his death, Jerrold's probate estate possessed insufficient funds to pay plaintiff, 4) that also at the time of his death Jerrold owned three life insurance policies totaling $25,000.00, and an accidental death policy of unknown value, 5) that the proceeds of those policies were paid to Jerrold's widow, defendant, and 6) that Jerrold willfully and intentionally violated two court orders by failing to designate his existing assets to plaintiff at the time of his death.
Thus, it is clear from her pleading that plaintiff has adequately alleged that the property at issue here entered defendant's possession because Jerrold breached his duty under the terms of the separation agreement and consent judgment. As a result, we conclude that plaintiff's motion adequately states a claim for unjust enrichment and the imposition of a constructive trust, and we reverse the trial court's order dismissing plaintiff's suit.
Reversed. Judges BRYANT and ERVIN concur.
Report per Rule 30(e).