Don Ganser & Associates, Inc. v. MHI, Inc.

• Court: Wisconsin Supreme Court
• Writing for the Court: BEILFUSS
• Citation: Don Ganser & Associates, Inc. v. MHI, Inc., 142 N.W.2d 781, 31 Wis.2d 212 (Wis. 1966)
• Decision Date: 07 June 1966
• Parties: DON GANSER & ASSOCIATES, INC., a Wis. corporation, Plaintiff, v. MHI, INC., a Wis. corporation, et al., Defendants-Appellants, Carmen Construction Co., Inc., a Wis. corporation, Interpleaded Defendant-Respondent.

Page 781

142 N.W.2d 781

31 Wis.2d 212

DON GANSER & ASSOCIATES, INC., a Wis. corporation, Plaintiff, v. MHI, INC., a Wis. corporation, et al., Defendants-Appellants Carmen Construction Co., Inc., a Wis. corporation Interpleaded Defendant-Respondent.

Supreme Court of Wisconsin.

June 7, 1966.

Howard E. Halaska, Milwaukee, David L. Walther, Milwaukee, of counsel, for appellants.

Richard L. Novotny, Milwaukee, for respondent.

BEILFUSS, Justice.

The second amended cross-complaint contains substantially the same allegations as the amended cross-complaint. This being so the trial court was of the opinion that the order overruling the demurrer to the first amended cross-complaint was res judicata as to the demurrer to the second amended cross-complaint. The respondent, Carmen, concedes that the order sustaining a demurrer is not res judicata as to the same questions raised by a subsequent demurrer.

In United States F. & G. Co. v. Pullen (1939), 230 Wis. 137, at p. 141, 283 N.W. 462, at p. 464, the court held:

'The trial court concluded, in passing upon the demurrer to the amended complaint, that because no appeal was taken from the order sustaining a demurrer to the original complaint, the court's ruling in sustaining the latter demurrer constituted the law of the case excepting in so far as the amendment supplied allegations which were lacking in the original complaint, and which are necessary to set forth a cause of action. That conclusion was erroneous. The practice is well settled that 'An order of the trial court sustaining a demurrer to a pleading is not res adjudicata upon the same questions raised upon a second demurrer.' (Cases cited.)'

See also Watson v. City of Appleton (1885), 62 Wis. 267, 22 N.W. 475; Hackett v. Carter (1875), 38 Wis. 394; Schoenleber v. Burkhardt (1896), 94 Wis. 575, 69 N.W. 343; Rogers v. John Week Lumber Co. (1903), 117 Wis. 5, 93 N.W. 821.

The sole issue then on this appeal is whether the second amended cross-complaint states a cause of action.

Because the trial court recognized the second amended complaint to be substantially the same as the amended cross-complaint it is probable it would have ruled the same as to both cross-complaints. The trial court was of the opinion, that for the purpose of demurrer, the cross-complaint of Carmen did state a cause of action against MHI and Voight for money had and received.

The appellants view the cross-complaint as an attempt by a subcontractor with no privity of contract with the owner to state a cause of action for unjust enrichment.

The elements of unjust enrichment in a subcontractor's action are (1) a benefit conferred upon the defendant by the plaintiff, (2) appreciartion by the defendant of the fact of such benefit, and (3) acceptance and retention by the defendant of the benefit, under circumstances such that it would be inequitable to retain the benefit without payment of the value thereof. Kelley Lumber Co. v. Woelfel (1957), 1 Wis.2d 390, 391, 83 N.W.2d 872; Superior Plumbing Co. v. Tefs (1965), 27 Wis.2d 434, 437, 134 N.W.2d 430.

In Utschig v. McClone (1962), 16 Wis.2d 506, 509, 510, 114 N.W.2d 854, 856, we stated:

'By the subcontractors' lien statutes, sec. 289.02, Stats., and following, the law has offered security and protection to a subcontractor. His failure to avail himself of the remedy so provided does not produce for him a ruight to recover payment directly from an owner who did not employ him and with whom he had no contract. Of course the subcontractor retains his right to proceed against the party who employed him.'

Both Utschig and Superior Plumbing Company must be distinguished. In neither of those cases did the subcontractor perfect a lien against the land of the owner as Carmen did in this instance.

From the cross-complaint it appears that Carmen had a valid and enforceable lien for services and materials furnished under ch. 289, Stats. Carmen gave up its right to enforce its lien by satisfying it as of record and can no longer resort to an action against the land because of the statutory time limitations. The lien rights were surrendered in exchange for the funds to be held in escrow to satisfy Carmen's claim by stipulation of all the parties or by order of a court of record.

Under the allegations of the cross-complaint this is not, strictly speaking, an action by a subcontractor against the owner based upon unjust enrichment. Carmen had a right to pursue its claim by foreclosure of its statutory lien. Assuming, as we must that the notice of lien was properly filed, Carmen could pursue its right independent of MHI and Voight's obligations to Ganser. Carmen gave up this right which was an obvious benefit to MHI and Voight in exchange for the agreement to allow it to assert its claim against the escrow fund. The fund was not to be disbursed except upon a stipulation of all the parties or upon order of a court of record. The claim of Carmen is that it did not stipulate to the final disbursement of the fund and that the order of the court was obtained 'by withholding information from the above-entitled Court, erroneously, fraudulent, and improperly * * * without authority or consent of * * * (Carmen).'

The appellants contend plaintiff's allegation that the order of dismissal was obtained 'erroneously, fraudulently, and improperly' are conclusions of law and are insufficient to state a cause of action. This...