KLE Constr., LLC v. Twalker Dev., LLC

• Decision Date: 05 December 2016
• Docket Number: No. 20160054.,20160054.
• Citation: 887 N.W.2d 536
• Parties: KLE CONSTRUCTION, LLC, Plaintiff and Appellee v. TWALKER DEVELOPMENT, LLC, Defendant and Appellant.
• Court: North Dakota Supreme Court

887 N.W.2d 536

KLE CONSTRUCTION, LLC, Plaintiff and Appellee

v.TWALKER DEVELOPMENT, LLC, Defendant and Appellant.

No. 20160054.

Supreme Court of North Dakota.

Dec. 5, 2016.

Thomas M. Jackson, Bismarck, N.D., for plaintiff and appellee.

Sean T. Foss, Fargo, N.D., for defendant and appellant.

KAPSNER, Justice.

[¶ 1] Twalker Development, LLC appeals from a judgment granting KLE Construction LLC's claim for unjust enrichment and ordering Twalker to pay $87,958.74 in damages. We affirm, concluding the district court did not err in granting KLE's unjust enrichment claim and awarding damages.

I

[¶ 2] KLE is a construction company, providing civil construction services in western North Dakota and eastern Montana. Twalker is a real estate development company seeking to develop real estate in McKenzie County.

[¶ 3] KLE and Twalker engaged in negotiations for KLE to provide construction services to Twalker in exchange for four lots located in Twalker's development. KLE and Twalker never executed a written contract finalizing the terms of an agreement. KLE began performing construction services on the property, including preliminary dirt work related to clearing and scraping the property. KLE also hired an engineering firm to create plans to subdivide the property for future sales. KLE and Twalker disagreed about certain aspects of the project, and Twalker terminated KLE's services. Twalker continued to develop the property and did not compensate KLE for the services it provided.

[¶ 4] KLE sued Twalker for breach of contract, unjust enrichment, and forbearance. After a bench trial, the district court dismissed KLE's breach of contract claim, finding KLE failed to establish the existence of a contract. The court dismissed KLE's forbearance claim, stating forbearance is not a separate and distinct claim. The court granted KLE's unjust enrichment claim and found KLE was entitled to $90,857 in damages. The court ordered each party pay the other party's costs and disbursements. A judgment was entered in favor of KLE for $87,958.74.

II

[¶ 5] In Border Res., LLC v. Irish Oil & Gas, Inc., 2015 ND 238, ¶ 14, 869 N.W.2d 758 (quoting Brash v. Gulleson, 2013 ND 156, ¶ 7, 835 N.W.2d 798 ), we explained the standard of review for an appeal from a bench trial:

[T]he trial court's findings of fact are reviewed under the clearly erroneous standard of N.D.R.Civ.P. 52(a) and its conclusions of law are fully reviewable. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after reviewing all the evidence, we are left with a definite and firm conviction a mistake has been made. In a bench trial, the trial court is the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations.

The district court's determination of whether the facts support a finding of unjust enrichment is fully reviewable on appeal. Northstar Founders, LLC v. Hayden Capital USA, LLC, 2014 ND 200, ¶ 53, 855 N.W.2d 614.

[¶ 6] In McColl Farms, LLC v. Pflaum, 2013 ND 169, ¶ 18, 837 N.W.2d 359 (quotations and citations omitted), this Court explained the doctrine of unjust enrichment:

Unjust enrichment is a broad, equitable doctrine which rests upon quasi or constructive contracts implied by law to prevent a person from unjustly enriching himself at the expense of another. To recover under a theory of unjust enrichment, the plaintiff must prove: (1) an enrichment, (2) an impoverishment, (3) a connection between the enrichment and the impoverishment, (4) the absence of a justification for the enrichment and impoverishment, and (5) the absence of a remedy provided by law. The theory may be invoked when a person has and retains money or benefits which in justice and equity belong to another. For a complainant to recover, it is sufficient if another has, without justification, obtained a benefit at the direct expense of the complainant, who then has no legal means of retrieving it. The essential element in recovering under the theory is the receipt of a benefit by the defendant from the plaintiff which would be inequitable to retain without paying for its value.

[¶ 7] Twalker argues the district court should have dismissed KLE's unjust enrichment claim because KLE had an adequate remedy at law and, therefore, KLE did not prove all of the required elements of its claim. Twalker contends KLE could have filed a construction lien against Twalker's property under N.D.C.C. § 35–27–02 and pursued foreclosure of the lien. KLE argues Twalker is barred from raising this issue on appeal because it did not raise the issue before the district court.

[¶ 8] Issues that are not adequately raised before the district court will not be addressed on appeal. State v. $44, 140.00 U.S. Currency, 2012 ND 176, ¶ 7, 820 N.W.2d 697. We have explained:

The purpose of an appeal is to review the actions of the trial court, not to grant the appellant an opportunity to develop and expound upon new strategies or theories. The requirement that a party first present an issue to the trial court, as a precondition to raising it on appeal, gives that court a meaningful opportunity to make a correct decision, contributes valuable input to the process, and develops the record for effective review of the decision. It is fundamentally unfair to fault the trial court for failing to rule correctly on an issue it was never given the opportunity to consider. Accordingly, issues or contentions not raised ... in the district court cannot be raised for the first time on appeal.

Paulson v. Paulson, 2011 ND 159, ¶ 9, 801 N.W.2d 746 (quoting Spratt v. MDU Res. Grp., Inc., 2011 ND 94, ¶ 14, 797 N.W.2d 328 ) (citations and quotations omitted).

[¶ 9] At the end of the trial, the district court requested the parties file written closing arguments focused on the unjust enrichment claim. Twalker filed a post-trial brief addressing KLE's unjust enrichment claim, but it did not argue that KLE failed to establish the absence of a remedy provided by law or that KLE had a remedy because it could have filed a construction lien. Twalker instead argued KLE failed to prove its unjust enrichment claim because it did not establish Twalker was enriched by KLE's services.

[¶ 10] Twalker contends it raised the construction lien issue during the trial through the testimony of a KLE employee. A KLE employee testified that KLE technically could have filed a mechanic's lien, but it would not typically do that in a property transaction and a lien would make the property harder to sell. However, this testimony alone was not sufficient to adequately raise and preserve for appeal the issue of whether a construction lien was an available remedy. The district court specifically requested the parties brief their unjust enrichment claim arguments in their post-trial briefs. KLE argued it established each element of its unjust enrichment claim. Twalker argued KLE did not prove Twalker was enriched by KLE's conduct and evidence established Twalker did not receive a benefit from the work KLE performed. Twalker did not argue there was evidence a construction lien was an available remedy or otherwise argue KLE failed to establish this element of its claim. Judges are not “obligated to engage in unassisted searches of the record for evidence to support a litigant's position[.]” State v. Goulet, 1999 ND 80, ¶ 10, 593 N.W.2d 345. Twalker failed to argue evidence established an available remedy existed, and the district court did not err by failing to search the record for evidence that would support dismissing the claim for a reason neither party argued in their briefs.

[¶ 11] Moreover, the issue of whether a construction lien was an available remedy in this case is more complicated than determining there was evidence KLE believed it could file a construction lien. “The parties have the primary duty to bring to the court's attention the proper rules of law applicable to a case.” Goulet, 1999 ND 80, ¶ 10, 593 N.W.2d 345. Section 35–27–02, N.D.C.C., authorizes construction liens, and states, “Any person that improves real estate, whether under contract with the owner of such real estate or under contract with any agent, trustee, contractor, or subcontractor of the owner, has a lien upon the improvement and upon the land on which the improvement is situated....” The district court found a contract does not exist in this case, and on appeal, the parties are disputing whether a contract between the parties was required for a construction lien to be an available remedy. This issue was not raised before the district court and is being argued for the first time on appeal. Under the facts and circumstances of this case, the testimony from the witness alone was not sufficient to adequately raise this issue. Because the issue was not adequately raised before the district court, it will not be addressed on appeal.

III

[¶ 12] Twalker argues the district court erred as a matter of law in awarding KLE damages for its unjust enrichment claim. Twalker claims unjust enrichment damages at most may only be equal to the amount by which the opposing party was enriched, and not the amount the claimant has been impoverished. Twalker contends the court erred by awarding KLE damages for the amount it was impoverished and not determining the amount Twalker had been enriched.

[¶ 13] An award of damages is a finding of fact subject to the clearly erroneous standard of review. Prairie Supply, Inc. v. Apple...