Bingham v. Bridges
| Decision Date | 18 January 1980 |
| Docket Number | No. 78-1379,78-1379 |
| Citation | 613 F.2d 794 |
| Parties | Patricia W. BINGHAM, Plaintiff-Appellant, v. Russell BRIDGES, a/k/a Leon Russell, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Paul E. Garrison, of Garrison, Pigman, Comstock & Thurston, Tulsa, Okl., for plaintiff-appellant.
Mike Barkley, of Hall, Estill, Hardwick, Gable, Collingsworth & Nelson, Tulsa, Okl., for defendant-appellee.
Before SETH, Chief Judge, McKAY and LOGAN, Circuit Judges.
This is an action to recover damages for breach of an oral contract to convey an interest in real property. Because such oral contracts are not enforceable in Oklahoma, the plaintiff attempted, under a theory of unjust enrichment, to recover the amount by which her efforts increased the value of the property. A trial to the court resulted in a judgment for plaintiff in the amount of $6,041.66. Plaintiff has appealed.
The sequence of events that led to this lawsuit, as found by the trial court, is essentially as follows. The defendant owned a parcel of Oklahoma property which was expensive to maintain and in a state of disrepair. In May 1976, he entered into an oral agreement with plaintiff to develop the property as a senior citizens' retirement center. The plaintiff was to receive a salary for managing the center. The agreement provided that, after the property began operating on a profit-making basis, defendant would convey to plaintiff a one-half interest in the property for $100,000, and plaintiff would receive fifty percent of the profit derived from the operation of the center. At plaintiff's option, she could apply her monthly salary and her share of the profits toward the purchase price. The agreement provided other details, but notably lacked any provision for, among other things, profit calculation or loss allocation.
Plaintiff, her in-laws and hired help worked on cleaning and repairing the property. The trial court made specific findings as to the value of materials, labor and other expense attributable to plaintiff which increased the value of the property. The sum of those figures equals the judgment granted. The trial court concluded that the value of the services performed by the plaintiff and her mother-in-law were not established with any reasonable degree of certainty. The court also found that plaintiff and her in-laws continued to receive the benefit of residing at the property to the date of trial and that there was no reasonable possibility that the proposed retirement center would have ever operated at a profit. The trial court found that, approximately seven months after the agreement was entered into, defendant conveyed the property to Oral Roberts University as a charitable gift with a fair market value of $393,950.
Since plaintiff's theory was unjust enrichment, she had the burden of establishing the amount by which the value of defendant's property was enhanced by her uncompensated efforts. That task traditionally may be accomplished by a variety of evidentiary methods. The most direct and perhaps most common method is by testimony of an expert as to the amount by which plaintiff's efforts enhanced the value of the property. Plaintiff chose not to employ this method.
Another method is to show the value of the labor and materials supplied by plaintiff and that the resulting property value has been increased by at least the value of the labor and materials. Plaintiff presented evidence of this type, part of which was accepted by the trial court as the proper measure of enhanced value.
A third common method of proof is to show the value of the property before and after plaintiff's efforts. The difference, less the amount attributable to any other factors which might have contributed to the increase, constitutes proof by inference of the value contributed by plaintiff's efforts. Normally the terminal values are established by expert appraisals. However, fair market value may be established by the testimony of the owner. See H. D. Youngman Contractor, Inc. v. Girdner, 262 P.2d 693, 696 (Okl.1953). Plaintiff put her primary emphasis on this method by offering what she argued were defendant's own appraisals of the pre-improvement value in lieu of expert testimony.
The trial court accepted $393,950 as the value of the land at the time of the charitable gift. Plaintiff attempted to show that the pre-improvement value was $200,000. The difference of nearly $200,000 is the amount plaintiff claimed her labor and materials enhanced the property. The court concluded, however, that plaintiff had failed to carry her burden of establishing the pre-improvement value or that her effort, rather than some other factor, was the source of the difference in value. In essence, the trial court concluded that plaintiff had failed to carry her burden of proof as to the terminal values method but that she had in part carried her burden of proof when measured by the value of goods and services supplied method. It is the rejection of plaintiff's attempted proof by the terminal values method which burdens this appeal.
The only evidence purporting to show the fair market value of the property at the time of the oral agreement was the defendant's offer to sell a one-half interest in the property to plaintiff for $100,000 and the following interrogatory and answer:
Interrogatory no. 1: What monetary value did you place on the lake property on May 1, 1976?
Answer: Defendant unsure as to what plaintiff means by "monetary value." Solely in order to determine depreciation for income tax purposes defendant's accountant had placed a value of approximately $200,000 on the lake property on or about May 1, 1976. On or about May 1, 1976, the defendant felt the lake property had a fair market value, subject to appraisal, of $200,000 and assumption of the existing indebtedness on the property.
Record, vol. 4, at 293.
The trial court admitted both of these items of proof over objections of the defendant. However, in its conclusions of law, the court held:
12. The price at which defendant agreed to sell a one-half interest in the lake property to plaintiff, subject to the existence of a profit-making retirement center and payment of the mortgage indebtedness, is not proper evidence to be considered in determining the fair market value of the lake property on May 19, 1976.
13. Defendant was not qualified to give an opinion of the...
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