Bowles v. Sunrise Home Center, Inc.

• Decision Date: 01 March 1993
• Docket Number: No. 92-124,92-124
• Citation: 847 P.2d 1002
• Parties: James E. BOWLES, Jr., individually, and, James E. Bowles, Jr., and Company, a Partnership, Appellants (Defendants), v. SUNRISE HOME CENTER, INC., a Wyoming corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 1002

847 P.2d 1002

James E. BOWLES, Jr., individually, and, James E. Bowles, Jr., and Company, a Partnership, Appellants (Defendants), v. SUNRISE HOME CENTER, INC., a Wyoming corporation, Appellee (Plaintiff).

No. 92-124.

Supreme Court of Wyoming.

March 1, 1993.

Curt A. Haws of Mullikin, Larson & Swift, Jackson, for appellants.

C. David Clauss, Jackson, for appellee.

Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT ^* and GOLDEN, JJ.

GOLDEN, Justice.

The owner of a newly constructed office building, Dr. James Bowles (Bowles), appeals a judgment in favor of a materials supplier, Sunrise Hardware Inc. (Sunrise), based on unjust enrichment. We affirm in part and reverse in part.

Bowles presents two issues:

I. Whether the District Court erred in finding that Appellants have been unjustly enriched where the undisputed testimony and the District Court's findings establish that Appellants have already paid more than the amount they had contracted to pay for construction of an office building?

II. Whether the District Court erred in assessing prejudgment interest at the annual rate of twenty-one percent (21%) where that percentage rate is based on a contract to which the appellants were not a party?

BACKGROUND

Bowles entered into a written contract for the construction of a pre-fabricated office building with a general contractor, Homestead Properties (Homestead), on June 19, 1990. Bowles signed the contract on behalf of a partnership, Bowles and Co., consisting of Bowles and his wife as partners. At the time, Bowles and Co. had title to the property where the building was to be constructed (hereinafter "Bowles" includes both Bowles and Bowles and Co.).

The total purchase price agreed to was $228,577.48, which was to be paid in increments. Bowles made an initial down payment of $22,000 to Homestead when the contract was signed and a second payment of $164,896.48 to the pre-fabrication company in late November, 1990, after delivery of the pre-fabricated building.

In November, 1990, Homestead opened a standard "job account" with Sunrise, a supplier of construction materials. ¹ Homestead opened this job account specifically to supply the Bowles office building project. During the period of construction of the building, a total of $9,262.15 was charged by Homestead, Bowles and a second contractor, Matt Thompson Construction (Thompson).

Bowles made a third payment on December 13, 1990, for $16,250 directly to Homestead, which like the previous payments was made with checks issued by the banking institution where Bowles had obtained financing. Sometime in January of 1991, Bowles became concerned about the pace of Homestead's progress. Due to his concern, Bowles enlisted a second contractor, Thompson, in order to expedite the project. For a brief period, Homestead and Thompson worked together without serious conflict; however, this amicable relationship rapidly deteriorated. Finally, Homestead simply quit working on the project, sometime in the spring of 1991, before completion. In addition to the amounts paid to Homestead, Bowles paid $23,000 to Thompson to complete projects required by the contract but which were not finished by Homestead.

In May, 1991, Homestead submitted a final bill to Bowles, which would have completed the contract payments. Bowles did not pay Homestead the final amount and subsequently Homestead failed to pay Sunrise the outstanding balance on the Bowles job account. The office building was completed by Thompson.

In the summer of 1991, Sunrise filed suit against Homestead, Bowles, and Thompson under two separate theories. First, Sunrise sought to foreclose on a mechanic's lien filed against the property where Bowles' building was situated. Second, Sunrise sought recovery of the outstanding balance on the job account based on unjust enrichment. Bowles and Thompson answered and filed cross-claims against Homestead.

The district court granted Bowles' and Thompson's motion for partial summary judgment dismissing the mechanic's lien action because Sunrise failed to follow the strict statutory requirements of Wyoming's mechanic's lien laws. The day before trial, Homestead filed for bankruptcy, therefore requiring a stay of all actions against Homestead. On May 1, 1992, a trial was conducted on the issue of unjust enrichment between Sunrise and Bowles and Thompson. On May 12, 1992, the district court entered judgment in favor of Sunrise based upon unjust enrichment in the sum of $9,262.15 plus twenty-one percent interest per annum beginning April of 1991. This judgment was entered solely against Bowles because the court found that Thompson had been acting as Bowles' agent. It is from this judgment which Bowles now appeals.

DISCUSSION

Unjust Enrichment

In reviewing the district court's decision finding unjust enrichment and awarding damages thereon, we "accept the evidence of the prevailing party as true and disregard the evidence of the unsuccessful party." Zitterkopf v. Bradbury, 783 P.2d 1142, 1144 (Wyo.1989); see also, Pancratz Company, Inc. v. Kloefkorn-Ballard Constr./Dev., 720 P.2d 906, 908-09 (Wyo.1986). We presume the district court's findings to be correct and uphold those findings unless they are, "inconsistent with the evidence, clearly erroneous or contrary to the great weight of the evidence." Pancratz, 720 P.2d at 909.

Unjust enrichment (or quantum meruit ) is an equitable remedy which implies a contract so that one party may recover damages from another. Zitterkopf, 783 P.2d at 1144; see also Landeis v. Nelson, 808 P.2d 216, 218 (Wyo.1991). One seeking damages based on unjust enrichment must prove four elements:

(1) Valuable services were rendered, or materials furnished,

(2) to the party to be charged,

(3) which services or materials were accepted, used and enjoyed by the party, and,

(4) under such circumstances which reasonably notified the party to be charged that the plaintiff, in rendering such services or furnishing such materials, expected to be paid by the party to be charged. Without such payment, the party would be unjustly enriched.

Zitterkopf, 783 P.2d at 1144 (quoting Johnson v. Anderson, 768 P.2d 18, 25 (Wyo.1989)). In addition, we recognize that an action for unjust enrichment will not lie where it would frustrate law or public policy, either directly or indirectly. R.O. Corp. v. John H. Bell Iron Mountain Ranch Co., 781 P.2d 910, 913 (Wyo.1989).

Bowles asserts that permitting Sunrise to recover based on a theory of unjust enrichment would violate the public policy behind our mechanic's lien statutes. Thus, we must determine the availability of an unjust enrichment remedy to suppliers of building materials in light of our mechanic's lien scheme. Wyo.Stat. § 29-1-308 (1981) (Remedies not Exclusive) expressly provides that the lien remedies created within Title 29 are not exclusive; therefore, a materialman is free to pursue an action under unjust enrichment. However, those seeking recovery based on unjust enrichment must prove each required element of the theory.

The facts of this case clearly establish that valuable materials were furnished to and accepted by Bowles for use in the construction of Bowles' new office building. The more difficult question is, whether the evidence demonstrates that Sunrise furnished these materials under such circumstances as to reasonably notify Bowles that Sunrise expected to be paid by them.

Before we can answer this question it is necessary to explain, more explicitly, the circumstances involving the disputed job account with Sunrise. The Bowles job account was opened solely by Homestead and the account application was signed only by Peter Edington, Homestead's job foreman. Bowles' name was included on the account to identify the job but was placed there by Homestead. According to the president of Homestead, the only persons authorized to use the job account were several of his employees, but not Bowles or Thompson. The terms of the job account included a twenty-one percent finance charge on late payments. The total...