The applicant subcontractor sought an order that the respondent law firm pay $39,812.68, which the firm had received from its client (the general contractor) for legal fees.
The funds originated from a settlement in a construction lien action.
The court found that the funds were impressed with a statutory trust under section 8 of the Construction Lien Act.
The court held that the law firm was in 'knowing receipt' of trust funds when it transferred the money from its trust account to its general account to pay its legal fees, as it had knowledge of the applicant's outstanding trust claim against the contractor.
The law firm was ordered to pay the funds to the applicant as a constructive trustee.
