The Corporation of the President of the Church of Jesus Christ of Latter-Day Saints v. Jolley

While working as an accountant for the Corporation of the President of the Church of Jesus Christ of Latter-Day Saints (the church) (plaintiff), LaMar Kay embezzled funds to buy a new Pontiac Firebird and a Chevrolet Corvette that he gave to Vickie Jolley (defendant). Kay set up bank accounts using fictitious business names and pretended to pay amounts the church owed those businesses. To buy the Firebird, Kay wrote a check on one of the fictitious business accounts to pay the dealership slightly more than the car’s purchase price. Four months later, he used a cashier’s check drawn on the same account to pay another dealership $3,000 toward the $5008.87 purchase price of the Corvette. Kay paid the remaining balance in cash a few days after withdrawing $2,700 cash from the same account. Jolley went with Kay to the dealership to buy the Corvette. After the purchases, Kay transferred the title to each car to Jolley without consideration. After discovering the embezzlement, the church sued Jolley seeking a constructive trust on the two cars. The district court granted judgment for the church and issued a decree imposing a constructive trust. Jolley appealed, arguing that a constructive trust could be imposed against only a fiduciary or confidant and that even if a constructive trust could be imposed against a third person, it could extend only to the amount of funds embezzled and traceable to the cars, not cash.