Hunter v. Reece

• Decision Date: 23 June 2011
• Docket Number: No. S–10–0195.,S–10–0195.
• Citation: 2011 WY 97,253 P.3d 497
• Parties: Greg HUNTER and Staci Hunter, husband and wife, Appellants (Defendants),v.Ron REECE and Linda Reece, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

253 P.3d 497

2011 WY 97

Greg HUNTER and Staci Hunter, husband and wife, Appellants (Defendants),

v.Ron REECE and Linda Reece, Appellees (Plaintiffs).

No. S–10–0195.

Supreme Court of Wyoming.

June 23, 2011.

Representing Appellants: Jeffrey J. Gonda and Amanda K. Roberts, Lonabaugh & Riggs, LLP, Sheridan, Wyoming. Argument by Ms. Roberts.Representing Appellees: Vincent Schutte, Kinnaird Law Office, PC, Sheridan, Wyoming.Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.BURKE, Justice.

[¶ 1] Ron and Linda Reece brought suit against Greg and Staci Hunter claiming that the Hunters owed them money pursuant to a contract. Having heard the evidence at trial, the district court found that there was no valid contract, but awarded damages to the Reeces on an unjust enrichment theory. The Hunters appealed. We will reverse the district court's decision.

ISSUES

[¶ 2] The Hunters present three issues:

1. Did the district court err by disregarding the parties' stipulation that a valid and enforceable contract existed and by raising a claim of unjust enrichment sua sponte ?

2. Whether the district court erred in finding that Plaintiffs proved the elements of unjust enrichment.

3. Whether the district court erred in denying Defendants' Rule 59 motion for new trial and alternative motion to amend the judgment.

FACTS

[¶ 3] Ron and Linda Reece owned and operated a construction business in Sheridan County, Wyoming. In the fall of 2006, Mr. Reece was doing renovation work at the home of Greg and Staci Hunter. He noticed Mrs. Hunter watching a television program about “flipping” houses. According to trial testimony from both parties, flipping a house generally involves purchasing a house that needs improvements, making those improvements, and selling the house, usually in a relatively short period of time, and preferably for a profit. Mr. Reece and Mrs. Hunter both commented that they would be interested in flipping a house.

[¶ 4] After further discussions between the Reeces and the Hunters, the two couples agreed to flip a house located at 708 Broadway in Sheridan. Later, they all met to put their agreement in writing, with Mrs. Hunter typing up the document. The contract, in its entirety, provided as follows:

Contract Agreement for Property 708 Broadway

This contract agreement for property 708 Broadway is between Greg Hunter along with his wife Staci and Ron Reece, along with his wife Linda.

A verbal agreement in September of 2006 made between Greg Hunger and Ron Reece, for the renovation process and “flip” of 708 Broadway was made. This discussion included the following:

Greg Hunter is to purchase this property and pay for all renovations with all expenses being approved by Staci Hunter with the approximate budget of $30,000. Staci Hunter is to be in charge of all final decisions including budget and design elements of the house including interior and exterior.

Ron Reece will be supplying labor and knowledge of building codes and will hire his employees to work along side him when needed for projects that require more th[a]n one man (i.e.), the roof and major framing and demolition and to be approved by Staci. Greg will then pay employees their base wage that Ron is currently paying them.

After the renovation process of this property is complete, the property will then be sold and the division of profit will be split 50% to Greg and Staci Hunter and 50% to Ron and Linda Reece after total expenses are deducted.

The contract was signed by all four persons, and dated October 28, 2006.

[¶ 5] Work on the project began in November of 2006. As the work progressed, the Reeces submitted invoices to Mrs. Hunter for the expenses incurred by the Reeces, and for the time spent by the Reeces' employees working on the project. At this time, the Reeces did not submit any invoices for Mr. Reece's labor on the project.

[¶ 6] At the end of January 2007, an arsonist set fire to the house, causing substantial damage. The Hunters had insured the house and, in cooperation with the Reeces, submitted a claim to the insurance company. The Reeces and Hunters then entered into a new “Fire Contract” in which they agreed to use the insurance proceeds to restore the house to the condition it was in before the fire. Included in this agreement was a provision that Mr. Reece would be paid $35.00 per hour for his work in restoring the house. The parties further agreed that once the house was restored, they would revert back to their original agreement. During the time the parties operated under the “Fire Contract,” the Reeces submitted invoices that included the hours Mr. Reece and his employees spent working on the project.

[¶ 7] In August of 2007, the parties agreed that the house had been restored, and that the original agreement was again in effect. The Reeces continued to submit invoices covering the hours for their employees and their out of pocket expenses. They no longer submitted invoices for any of Mr. Reece's time working on the project.

[¶ 8] In October of 2007, the Hunters became dissatisfied with the slow progress on the project, and with what they perceived as the poor quality of some of Mr. Reece's work. The Hunters also came to believe that Mr. Reece could be doing more of the work by himself instead of paying his employees to work on the project. They confronted Mr. Reece about their dissatisfactions, an argument ensued, and the Hunters eventually told Mr. Reece to stop working on the project. The Hunters hired other contractors, at a total cost of $16,000.00, to complete the project, and to correct some of the work already done by Mr. Reece.

[¶ 9] On April 8, 2008, the Reeces filed suit against the Hunters. The two-page complaint sought a declaratory judgment that the contract quoted above “is a valid and enforceable agreement,” and alleged that the Reeces were entitled to “receive 50% or 1/2 of net profit after payment of cost of renovation and purchase price.” The Hunters answered, admitting the existence and validity of the contract, but generally denying the other allegations. The Hunters also pleaded counterclaims, including breach of contract by the Reeces.

[¶ 10] The parties engaged in discovery and other trial preparations until, on August 27, 2009, the Reeces moved the district court to order mediation of the dispute. Mediation was ordered, but was apparently unsuccessful, because on September 29, 2009, the district court set a trial date in the matter. Prior to trial, the parties stipulated to the existence and validity of their contract, although each asserted a different interpretation of that contract. The Reeces contended that they were entitled to payment for Mr. Reece's labor on the project, in addition to one half of the profits. The Hunters contended that the Reeces were entitled only to one half of the profits, because the agreement did not provide that Mr. Reece would be paid for his labor.

[¶ 11] A two-day bench trial commenced on March 3, 2010. At the close of trial, the district court announced judgment that the parties' contract was not valid because there had been no meeting of the minds regarding an essential term of the agreement, that being whether Mr. Reece was to be paid for his work on the project in addition to receiving one half of the profits. The district court then invoked the theory of unjust enrichment to award all of the profits to the Reeces, an amount the district court calculated as $21,989.07. A written judgment embodying the district court's decision was entered on March 26, 2010.

[¶ 12] On April 8, 2010, the Hunters filed a motion for new trial or, in the alternative, to amend the judgment, asserting generally that the parties had stipulated to the validity of their contract, that it was improper to apply a theory of unjust enrichment when a valid contract existed, and that unjust enrichment had never been pleaded by the Reeces. A hearing was held, and the district court entered an order denying the motion on July 2, 2010. The Hunters appealed both the judgment and the district court's denial of their motion for new trial or amended judgment.

DISCUSSION

[¶ 13] “Whether a contract has been entered into depends on the intent of the parties and is a question of fact.” Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 775 (Wyo.1988). The district court found that no contract had been formed in this case. We presume that finding is correct, and uphold it unless it is “inconsistent with the evidence, clearly erroneous, or contrary to the great weight of the evidence.” Narans v. Paulsen, 803 P.2d 358, 360 (Wyo.1990).

The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail re-weighing disputed evidence. Findings of fact will not be set aside unless they are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.

Fremont Homes, Inc. v. Elmer, 974 P.2d 952, 958 (Wyo.1999) (internal citations omitted); Jacoby v. Jacoby, 2004 WY 140, ¶ 6, 100 P.3d 852, 854 (Wyo.2004).

[¶ 14] Throughout the litigation, the parties disagreed about the interpretation of their contract, but consistently agreed that they had entered into a contract. The Reeces in their complaint alleged that they and the Hunters had “entered into a written agreement as set forth on the attached Exhibit A.” The Hunters admitted this allegation in their answer. In their pretrial memoranda, both parties listed proposed findings of fact to the effect that they had entered into a valid, binding contract. Prior to trial, the parties stipulated that “the Contract at...