This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Joseph Lee, et al.,
Lake Area Bank, et al.,
Filed September 26, 2000
Ramsey County District Court
File No. C1997600
Richard J. Thomas, Bryon G. Ascheman, Burke & Thomas, 3900 Northwoods Drive, Suite 200, Saint Paul, MN 55112; and Don M. Lattimore, Lattimore, Mooney & Malchow, 386 North Wabasha Street, Suite 1350, Saint Paul, MN 55102 (for appellants)
Katherine A. Brown Holmen, Mark K. Thompson, Dudley and Smith, P.A., 2602 Firstar Center, 101 East Fifth Street, Saint Paul, MN 55101 (for respondent Motzko)
Daniel S. Rethmeier, Rethmeier Law Office, P.O. Box 754, 200 Corporate Center, 26 North Sixth Avenue, Saint Cloud, MN 56302 (for respondent Reynolds)
Considered and decided by Crippen, Presiding Judge, Willis, Judge, and Huspeni, Judge.*
U N P U B L I S H E D O P I N I O N
Joseph and Audree Lee appeal from summary judgment, arguing that the district court abused its discretion in failing to impose a constructive trust on the proceeds of a payable-on-death certificate of deposit, and, alternatively, that fact issues remain as to whether, based on the decedent’s intent, the proceeds should be subject to a constructive trust. We affirm.
On December 17, 1997, Irene B. Lee purchased a $100,000 certificate of deposit (CD) at Lake Area Bank, designating respondents Francis Motzko and Arlys Reynolds as payable-on-death (POD) beneficiaries. On April 20, 1998, while hospitalized, Irene Lee signed a handwritten statement indicating that she wanted to remove the names of Motzko and Reynolds from the CD and concluding: “All my possessions to Joe Lee.” On April 23, 1998, Irene Lee spoke with her attorney, Douglas Meslow, instructing him to change the beneficiaries on the CD from Motzko and Reynolds to appellants Joseph and Audree Lee. Meslow’s affidavit states that following this meeting, he spoke with an employee of Lake Area Bank, asking what documentation the bank required to make this change in beneficiaries. Meslow further states that he was told that a letter from him, on Irene Lee’s behalf, would be sufficient. Meslow immediately drafted the letter and sent it to the bank. Irene Lee died on April 24, 1998, the following day.
Sometime during the summer, the Lees unsuccessfully demanded payment from Lake Area Bank. The bank later informed Meslow that the change in beneficiaries was invalid under Minnesota law because it was not in writing and that the writing that Irene Lee had executed on April 20, 1998, had not been received prior to her death. The bank refused to release the funds without a court order, and the Lees commenced this litigation.
The Lees’ complaint alleged promissory estoppel against Lake Area Bank and requested declaratory judgment and temporary injunctive relief against all defendants. Motzko and Reynolds filed a motion for summary judgment on the claims asserted against them individually, arguing that the failure to comply with Minn. Stat. §§ 524.6-204 and 524.6-205 (1996), rendered ineffective any change of beneficiaries. The Lees filed a cross-motion for summary judgment, arguing that Meslow had acted as Irene Lee’s agent and that his letter complied sufficiently with statutory requirements. In the alternative, the Lees argued that if Meslow’s letter was insufficient to change the beneficiary designation, equity compelled the imposition of a constructive trust for their benefit.
After a hearing, the district court granted summary judgment to Motzko and Reynolds. The district court noted that (1) Motzko and Reynolds had been designated as POD beneficiaries on the CD months before Irene Lee’s death, (2) there was no evidence that Irene Lee had wanted them to hold the money in a fiduciary capacity and to distribute it to others, and (3) the Lees had not provided the necessary clear and convincing evidence of Irene Lee’s intent for the imposition of a constructive trust. Relying on Spiess v. Schumm, 448 N.W.2d 106 (Minn. App. 1989), the district court concluded that it would not be “morally wrong” for Motzko and Reynolds to retain the money, especially in light of Irene Lee’s failure to provide written notice of the change in beneficiary designation as required by statute. This appeal follows.
Granting or denying equitable relief lies within the discretion of the district court, and we will not reverse absent a clear abuse of that discretion. Nadeau v. County of Ramsey, 277 N.W.2d 520, 524 (Minn. 1979).
The Lees argue that the district court erred in failing to impose a constructive trust on the proceeds of the CD.
A constructive trust is
not the product of the intent of the parties. The nature of a constructive trust can best be comprehended by keeping clearly in mind that it is not, in its true sense, a trust at all, but purely a creation of equity designed to provide a remedy for the prevention of unjust enrichment where a person holding property is under a duty to convey it to another to whom it justly belongs.
Knox, 222 Minn. at 481, 25 N.W.2d at 228 (citations omitted). In imposing a constructive trust, a court is “bound by no unyielding formula, but is free to effect justice according to the equities peculiar to each transaction.” Id. (citation omitted). But a court may impose a constructive trust only when there is clear and convincing evidence that a constructive trust is necessary to prevent unjust enrichment. In re Estate of Eriksen, 337 N.W.2d 671, 674 (Minn. 1983).
Unjust enrichment has been found where a party has obtained legal title “in any unconscientious manner, so that he cannot justly retain the property.” Knox, 222 Minn. at 482, 25 N.W.2d at 229 (citation omitted) (finding unjust enrichment where wife refused to perform equitable duty to reconvey property to husband). As the district court noted, we have also found unjust enrichment where “it would be ‘morally wrong’ for the property holder to retain the funds.” Spiess, 448 N.W.2d at 108 (citing Timmer v. Gray, 395 N.W.2d 477, 478 (Minn. App. 1986) (stating that unjust enrichment may be found “based on * * * situations where it would be morally wrong for one party to enrich himself at the expense of another”)).
Citing Wilson v. Skogerboe, 379 N.W.2d 696, 699 (Minn. App. 1986), the Lees argue that Minnesota courts have acknowledged that unjust enrichment can occur when, by mistake, a party obtains property to which the party is not entitled. But Skogerboe did not involve unjust enrichment through mistake. Although the Skogerboe court cited Henderson v. Murray, 108 Minn. 76, 79, 121 N.W. 214, 216 (1909), for this proposition, Henderson also did not involve a mistake, and the Henderson court did not refer to “mistake” as a basis for finding unjust enrichment but rather “fraud or bad faith, or by taking advantage of confidential or fiduciary relations, or in any other unconscientious manner,” so that the property could not justly be retained. Henderson, 108 Minn. at 79, 121 N.W. at 215. The Lees also rely on Rollins v. Mitchell, 52 Minn. 41, 53 N.W. 1020 (1892). But Rollins involved a false representation or fraudulent promise, not mistake, and is therefore inapplicable as well. Id. at 49, 53 N.W. at 1021. We conclude that the Lees have failed to show that a mistake is sufficient to support the finding of unjust enrichment necessary for the imposition of a constructive trust.
Further, the Lees rely on Eriksen for the proposition that they need not show wrongful conduct on the part of the adverse party for a court to find unjust enrichment and impose a constructive trust. 337 N.W.2d 671. But in Eriksen, both parties had “contributed equally to the acquisition and maintenance of a home,” as well as to the insurance premiums on the home. Id. at 674. The supreme court affirmed the imposition of a constructive trust because unjust enrichment would occur if the estate of the party in whose name the property had been recorded was awarded the entire interest in the home. Id. Here, none of the individuals involved in this litigation contributed to the CD.
Finally, the Lees argue that clear and convincing evidence of Irene Lee’s intent was required and presented. The district court also appears to have read Spiess to require such evidence of intent, but the standard for the imposition of a constructive trust requires clear and convincing evidence, not of intent, but that a constructive trust is necessary to prevent unjust enrichment. Eriksen, 337 N.W.2d at 674. Although the Spiess court affirmed the decision of a district court that imposed a constructive trust to achieve the decedent’s intent, the affirmation was based on clear and convincing evidence that the POD beneficiary would be unjustly enriched absent the constructive trust. 448 N.W.2d at 108.
We conclude that because the Lees failed to present clear and convincing evidence that Motzko and Reynolds would be unjustly enriched by receiving the CD proceeds, the district court did not abuse its discretion in failing to impose a constructive trust.
The Lees argue in the alternative that if we do not conclude that the district court abused its discretion in failing to impose a constructive trust, a question of fact remains as to whether the proceeds from the CD should be subject to a constructive trust. On this basis, the Lees argue that the case should be remanded to allow them to conduct discovery and submit further evidence to support their allegations regarding Irene Lee’s intent to change beneficiaries. We disagree. Because Irene Lee’s intent is not relevant to our disposition of this case, further evidence of that intent is unnecessary.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 On December 17, 1997, Irene Lee also purchased a $100,000 CD naming St. Mary’s Catholic Church as the POD beneficiary. St. Mary’s agreed not to dispute the Lees’ claim to the funds and is no longer a party to this action.
 These provisions require that a request to change a POD beneficiary must be signed and received during the party’s lifetime.
 The Lees argue that the district court improperly concluded that the existence of a fiduciary relationship was a necessary prerequisite to the imposition of a constructive trust. We agree. The district court distinguished Spiess v. Schumm, 448 N.W.2d 106 (Minn. App. 1989), stating that the POD account in Spiess was opened solely to permit the defendant to act in a fiduciary capacity and distribute the funds to the intended beneficiaries and that the Lees had presented no similar evidence. But the existence of a fiduciary relationship is not a prerequisite to the imposition of a constructive trust. Knox v. Knox, 222 Minn. 477, 481, 25 N.W.2d 225, 228 (1946). Accordingly, we conclude that the district court erred in considering this factor. But we will not reverse a correct decision of a district court simply because the court based its conclusion on incorrect reasons. Schweich v. Ziegler, Inc., 463 N.W.2d 722, 728 (Minn. 1990); see Minn. R. Civ. P. 61 (stating that harmless error is to be ignored).