Bank of New York As Trustee v. Bell
Generally, the beneficiary of a resulting trust lacks standing to bring a cause of action against a third party. The plaintiff, Bank of New York, as trustee, filed a foreclosure suit against Sonja Bell, claiming that the bank is the holder of a note and that Bell did not pay the mortgage. In 2008, a court granted judgment of foreclosure. Bell filed for bankruptcy, and the law day was extended. Eventually, the bank withdrew the state foreclosure suit, and a foreclosure suit was filed in the U.S. District Court. Defendant Jonathan Bell, who is married to Sonja, claimed that he possessed standing, because he contributed funds toward the purchase of the property the bank seeks to foreclose. "When the purchase money for property is paid by one and the legal title is taken in the name of another, a resulting trust ordinarily arises at once, by operation of law, in favor of the one paying the money," pursuant to Stewart v. King, a 2010 decision of the Connecticut Appellate Court. "It is the payor's intention at the time of the transfer and not at some subsequent time that determines whether a resulting trust arises," pursuant to §9, comment (c) of the Restatement (Third) of Trusts. Sonja Bell testified she expected to share the property with her spouse, Jonathan Bell, even though title was in her name alone. Evidence indicated that Jonathan's role in the construction and maintenance of the parties' residence was substantial. Jonathan, wrote the court, "acted in every way as an owner" and established that a presumption existed that a trust was created. The court did not find any Connecticut decisions directly on point with respect to whether the trustee of a resulting trust is the sole entity that possesses standing to enforce the rights of the trust against third parties. Ruling on an issue of apparent first impression, the court found that Jonathan, as the beneficiary of the resulting trust, lacked standing to sue. The court rejected Jonathan's claim that an exception exists, because he is in possession of the property, and granted the motion to dismiss.