Jerry Harmon Motors, Inc. v. Heth

• Decision Date: 18 February 1982
• Docket Number: No. 10,10
• Citation: 316 N.W.2d 324
• Parties: JERRY HARMON MOTORS, INC., Plaintiff and Appellee, v. Gary HETH, Defendant and Appellant. Civ.078.
• Court: North Dakota Supreme Court

Page 324

316 N.W.2d 324

JERRY HARMON MOTORS, INC., Plaintiff and Appellee, v. Gary HETH, Defendant and Appellant.

Civ. No. 10 078.

Supreme Court of North Dakota.

Feb. 18, 1982.

McIntee & Whisenand, Williston, for plaintiff and appellee; submitted on briefs.

Bjella, Neff, Rathert, Wahl & Eiken, Williston, for defendant and appellant; submitted on briefs.

SAND, Justice.

This appeal stems from a motor vehicle transaction between Jerry Harmon Motors, Inc., Williston, North Dakota (Harmon) and Gary Heth, also of Williston (Heth). On 22 February 1980, Heth and a friend, John Holter, went to Harmon looking for a work vehicle. The sales manager, D. K. Long (Long), showed Heth a 1979 GMC 4-wheel drive van. Heth looked at it and inquired how much it would cost. Long checked the invoice and quoted the price of $8,500.00, plus tax and license. Heth inquired as to what he would have to do to own the vehicle and was told that a down payment of $1,800 was required and that a contract would have to be executed. Long also advised Heth that a radio cassette would be installed, whereupon Heth and Long executed a car order ¹ which in part stated:

²

Heth testified at trial that he signed the car order and a retail installment contract and made the required $1,800 down payment, then he left to secure insurance for the van. Heth further testified that when he returned for the van a half hour later, he was told the cost of converting the van to 4-wheel drive had not been included in the quoted price.

Jess Gregory Ditsworth (Ditsworth), credit manager for Harmon, testified that the car order was signed and then Heth left to get insurance, and that the retail installment contract was signed after Heth secured the insurance. Ditsworth testified that while Heth was away he looked at the invoice and noticed that the price of the conversion kit (4-wheel drive unit) ³ was not included in the price listed on the invoice and after Heth returned he informed Heth that the quoted price of $8,500.00 did not include the price of the conversion kit. Ditsworth further testified that the price of the conversion kit was not included in the retail installment contract because Harmon had not received an invoice for it from the manufacturer and consequently did not know the exact cost of the kit.

The record reflects that Heth asked Ditsworth how much the conversion kit would cost and that Ditsworth told him he did not know exactly how much it would cost but suggested prices ranging from $1,000 to $2,000. Ditsworth testified that it was his understanding that Heth would pay for the cost of the conversion kit, whatever it was, and based on that understanding he allowed Heth to take the van.

Heth testified that, in regard to the conversion kit, Ditsworth told him he would have to pay the invoice price submitted to Harmon by GMC and that the price would be between $1,200 and $2,000. Heth further testified that although he "understood" that Harmon had told him it was his obligation to pay for the conversion kit, he did not "agree" to pay for it and, as far as he was concerned, the conversion kit was part of the original purchase price.

Harmon received the invoice in the amount of $3,168.10 for the conversion kit and billed Heth that amount. Heth failed to pay and this action was instituted by Harmon against Heth. After a bench trial, the district court entered findings of fact, conclusions of law, and order for judgment and issued a judgment in the amount of $3,168.10 against Heth and in favor of Harmon. Heth appealed.

The issue as raised by Heth is whether or not the trial court erred in finding that he was unjustly enriched in the amount of $3,168.10. Heth points out that he contracted to purchase a 4-wheel drive van for the price of $8,500.00 plus tax and license and that the conversion kit should be included in the price of the van.

A careful examination of pertinent findings of fact and conclusions of law will be beneficial in narrowing the issues and in resolving them.

"FINDINGS OF FACT

"I.

"Gary Heth purchased a 1979 GMC van from Jerry Harmon Motors, Inc. on the 22nd day of February, 1980 for a quoted price of $8,500.00.

"II.

"Gary Heth went to the credit manager of Jerry Harmon Motors, Inc., Greg Ditsworth, and indicated that financing would be needed and attempted to make his own arrangements for insurance.

"III.

"Gary Heth departed from Jerry Harmon Motors, Inc. in order to procure insurance, with his yellow copy of a car order form.

"IV.

"Gary Heth returned to Greg Ditsworth's office a short while later, and immediately Greg Ditsworth told him that the 1979 GMC van could not be sold at the quoted price because the cost of the 4-wheel drive conversion kit had not been included in the quoted price.

"V.

"The invoice from General Motors for the 4-wheel drive conversion kit had not yet been received by Jerry Harmon Motors, Inc. Only the invoice for the van itself had been received, and such invoice did not include the 4-wheel drive conversion kit.

"VI.

"Gary Heth asked how much the kit would cost, and Mr. Ditsworth indicated he did not know, but suggested figures ranging from $1,000.00 to $2,000.00.

"VII.

"Greg Ditsworth told Mr. Heth he could take the van that day if he would promise to pay the invoice price of the conversion kit, whatever it was, when the invoice was received by Jerry Harmon Motors, Inc.

"VIII.

"After much discussion, the sale was completed, the final papers signed, a down payment made and Gary Heth departed with his newly purchased vehicle.

"IX.

"Jerry Harmon Motors, Inc.'s copy of the car order form contains the notation 'customer to pay for conversion, whatever cost is'.

"X.

"There is, however, a discrepancy; the yellow copy of the car order form, which was given to Gary Heth, does not include the above stated notation. This is a close question, and the Court is of the belief that the Plaintiff did not carry its burden of proof that there was a valid contract, either actual or implied, obligating the Defendant to pay the invoice price for the conversion kit.

"XI.

"Gary Heth understood that the quoted price given to him did not include the cost of the conversion kit, but that he would be billed later for the invoice cost when and if Jerry Harmon Motors, Inc. ever received an invoice from General Motors.

"XII.

"When the invoice was received by Jerry Harmon Motors, Inc. and forwarded to Gary Heth, it exceeded the estimate of the figures given by Greg Ditsworth and the expectations of Gary Heth.

"XIII.

"Although there was no binding contract between Gary Heth and Harmon Motors, Inc. concerning the conversion kit, nevertheless, the Defendant is liable for it on the ground that he would be unjustly enriched if he was permitted to keep it without payment.

"XIV.

"The reasonable value of the 4-wheel drive conversion kit is $3,168.10."

"CONCLUSIONS OF LAW

"II.

"There is insufficient proof to show that a contract, either actual or implied, was entered into by and between Jerry Harmon Motors, Inc. and the Defendant, Gary Heth, as to payment for the invoice price of the 4-wheel drive conversion kit.

"III.

"The Defendant is liable for reasonable cost of the 4-wheel drive conversion kit on the ground that he would be unjustly enriched if he were permitted to keep it without payment."

Pursuant to finding of fact No. XIII and conclusion of law No. 2, the court concluded that there was no binding contract, either actual or implied, between Heth and Harmon concerning the conversion kit, but the court found that Heth was liable for the reasonable value of the conversion kit under the theory of unjust enrichment.

Findings of fact supported by the evidence are not clearly erroneous and will not be set aside under Rule 52(a), North Dakota Rules of Civil Procedure, unless we are left with a definite and firm conviction that a mistake has been made. Keidel v. Rask, 290 N.W.2d 255 (N.D.1980). We recognize that some of the findings are a mixture of conclusions of law and findings of fact, and that conclusions of law are fully reviewable by this Court. Northwestern Bell Telephone Co. v. Board of Commissioners of Fargo, 211 N.W.2d 399 (N.D.1973). Unfortunately, the court made no specific finding of fact as to the understanding between Harmon and Heth relative to the cost of the conversion kit, as will be discussed later herein.

Prior to reviewing the particular findings, a discussion of the law relative to quasi contracts and contracts will be helpful.

Section 9-06-01, North Dakota Century Code, provides as follows:

"A contract is either express or implied. An express contract is one the terms of which are stated in words. An implied contract is one the existence and terms of which are manifested by conduct."

Express contracts and implied contracts are based on the mutual intentions of the parties. Bismarck Hospital Ass'n v. Burleigh County, 146 N.W.2d 887 (N.D.1966). Express contracts are based on the express oral or written assent of the parties, and implied contracts are based on the surrounding facts and circumstances to determine whether or not the parties actually intended to enter into a contract but failed to articulate their promises. Id.

The law recognizes two classes of implied contracts: contracts implied in fact and contracts implied in law, more commonly referred to as quasi or constructive contracts. Gate City Savings and Loan Ass'n v. International Business Mach. Corp., 213 N.W.2d 888 (N.D.1973).

When dealing with contracts implied in fact the court is required to determine from the surrounding circumstances what the parties actually intended. Bismarck Hospital Ass'n v. Burleigh County, supra.

In Stark County v. State, 160 N.W.2d 101, 105 (N.D.1968), we stated the following with reference to contracts implied in law or quasi contracts:

"A quasi contract arises where a transaction between parties gives them mutual rights or obligations, but does not involve a specific agreement between them. Such...