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Blue Cross Health Servs., Inc. v. Sauer - 800 S.W.2d 72 (Mo. Ct. App. 1990)


Imposition of a constructive trust as a remedy to prevent unjust enrichment is appropriate under certain limited circumstances. The very essence of the remedy of constructive trust is the identification of specific property or fund as the res upon which the trust may be attached. An erroneous payment by an insurer does not create a trust fund or establish a trust relationship.


Plaintiff Blue Cross mistakenly mailed 66 checks to William Sauer at Chesterfield, Missouri. The checks were intended to cover medical services for William J. Sauer's child in Milwaukee, Wisconsin. Each check was mailed in a separate envelope that also contained a form entitled "Explanation of Benefits." When Blue Cross discovered the mistake, a demand letter was sent to William R. Sauer on March 29, 1985. Although receipt of the letter was acknowledged by William R. Sauer on April 2, 1985, no repayment was made. Blue Cross filed suit in equity against William R. Sauer and the R.T. Sauer Agency on May 14, 1985, praying that the court impose a constructive trust upon the funds of the defendants for the use and benefit of the plaintiff based on unjust enrichment and mistake. The circuit court entered judgment for Blue Cross. William R. Sauer requested a new trial and claimed entitlement to a trial before the jury, which was granted. 


Where plaintiff insurer sought restitution of money paid to defendants by mistake and based on unjust enrichment and also sought to impose a constructive trust upon the funds of defendants, was the grant of defendants' motion for a new trial proper?




The appellate court held that he who pleads and proves a cause of action cognizable at law may not convert the matter into a non-jury proceeding in equity merely by seeking an equitable remedy to which the pleaded facts show no entitlement. In this case, Blue Cross sustained its burden of proving it was entitled to restitution of money paid by mistake. Each of the defenses asserted by defendants fails either because of the absence of any evidentiary support or because of failure to constitute a defense as a matter of law. The order granting a new trial was reversed. The case was remanded with direction to reinstate the judgment in favor of Blue Shield.

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