Polk v. Schwartz

In Polk v. Schwartz, 166 N.J. Super. 292, 399 A.2d 1001 (N.J. Super. 1979), the owners of a nursing home facility recorded a lis pendens in connection with a suit seeking a constructive trust to be imposed on properties the defendants acquired in Atlantic City. The suit alleged that the defendants conspired to deplete the nursing home facility of funds by a variety of methods, including drawing excessive salaries and converting $ 180,000 of patients' personal Medicaid funds. See Polk, 399 A.2d at 1003. The suit alleged that the defendants used the wrongfully obtained funds to acquire residences and businesses in Atlantic City. See Polk, 399 A.2d at 1003-04. In holding that the trial court erroneously discharged the lis pendens, the New Jersey court explained: "It is evident that the trial judge's concept in this case was that plaintiff's cause of action was essentially, if not exclusively, for the recovery of money damages. But this would not be so if the ... complaint sets forth a sufficient cause of action for the imposition of a constructive trust. In this regard it is to be noted that a claim for money damages does not necessarily preclude the assertion of a claim for alternate or additional equitable relief. ...There is no doubt that an action to impress a constructive trust on realty affects title to that property, so that a notice of Lis pendens may be filed under a statute such as ours." (Polk, 399 A.2d at 1004.)