Klein v. Klein

• Decision Date: 24 January 2023
• Docket Number: A-22-241
• Parties: Marcene Klein and Eugene Klein, by Michael Klein and Sharon Klein, coconservators, Appellees, v. Lewis Klein, appellant.
• Court: Nebraska Court of Appeals

Marcene Klein and Eugene Klein, by Michael Klein and Sharon Klein, coconservators, Appellees,
v.
Lewis Klein, appellant.

No. A-22-241

Court of Appeals of Nebraska

January 24, 2023

THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the District Court for Cass County: Michael A. Smith, Judge. Affirmed as modified.

Rodney C. Dahlquist, Jr., of Dornan, Troia, Howard, Breitkreutz, Conway & Dahlquist, P.C., L.L.O., for appellant.

Julie E. Bear, of Reinsch, Slattery, Bear, Minahan & Prickett, P.C., L.L.O., for appellees.

Pirtle, Chief Judge, and Arterburn and Welch, Judges.

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

Arterburn, Judge.

I. INTRODUCTION

Marcene Klein and Eugene Klein, by Michael Klein and Sharon Klein, coconservators for Eugene (collectively "the Kleins"), filed a complaint in the district court for Cass County against Lewis Klein for, among other things, his ongoing use of their grain bins without permission or rental payments. After a bench trial, the district court found that Lewis was unjustly enriched by his ongoing use of the Kleins' grain bins. The court awarded the Kleins damages on their unjust enrichment claim. However, the court offset these damages after finding that the Kleins had sold some of Lewis' crops stored in the grain bins without providing him any compensation. Lewis appeals the district court's order. Upon our review, we affirm as modified.

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II. BACKGROUND

Eugene, age 91, and Marcene, age 85, are husband and wife who share 12 children: John, Theresa, Michael, Joe, George, Nancy, Cecil, Aaron, Lewis, Mary, Janet, and Sharon. Eugene and Marcene have been engaged in a farming practice throughout their 64-year marriage.

Together, Eugene and Marcene own one parcel of land, referred to in the record as "dad's place." Dad's place consists of approximately 500 acres of land and contains six grain storage bins. Eugene and Marcene share ownership of another parcel of land, referred to in the record as "grandpa's place," with their niece. Eugene and Marcene have leased their niece's half interest in this land in recent years. Grandpa's place consists of approximately 440 acres and contains seven grain storage bins. Michael estimated that approximately one-half to two-thirds of all the land on dad's place and grandpa's place is tillable farm ground.

Lewis testified that he had been helping Eugene farm the two parcels for at least the last 30 years since he graduated from high school. However, in March 2016, Michael assumed control over Eugene's part of the family farm operation, including becoming the farm tenant for a portion of dad's place. This change occurred after Michael began investigating Eugene's finances and found indications that Eugene was not being adequately compensated for the use of the farmland by Lewis and Cecil, who had by that time essentially taken over Eugene's farming operation as Eugene grew older. Ultimately, in April 2018, Michael and Sharon were formally appointed as coconservators for Eugene.

When Michael became the farm tenant for a portion of dad's place, his lease agreement specifically included the use of the grain storage bins which are located on the parcel leased. However, in March 2016, when Michael signed his first lease with Eugene and Marcene, all six of the grain bins were being utilized by Lewis. Michael testified that he continued to pay the full amount of rent for his use of the leased property to Eugene and Marcene, despite his inability to use the grain bins.

Michael testified to the arrangement his parents have with their niece (his cousin) regarding grandpa's place. Eugene and Marcene own a half interest and then lease their niece's half interest. The cropland is "custom farmed." None of the Klein children are to use the buildings, including the grain bins, for their own benefit. However, Lewis has been using some of the grain storage bins on grandpa's place to store his crops. Lewis admitted that as of December 2021, he was still using at least a portion of three of the seven grain bins on grandpa's place, but prior to that time, he had utilized more of the bins.

On March 2, 2018, the attorney for the conservators sent Lewis a letter demanding that he remove his crops from the grain bins on both dad's place and grandpa's place. The letter stated, in pertinent part:

The Conservators indicate that they have previously requested that you remove any existing grain in storage on farm property which is owned by your mother and father but that you have refused to so remove the same

Please be advised that the Conservators along with your mother, Marcene, hereby demand the removal of all grain in storage and that the same be completed within 15 days of this correspondence

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Please note that your failure to comply with this demand will result in the grain in storage being removed and disposed of by the Conservators in a commercially reasonable manner along with any further action deemed legally appropriate by the Conservators.

Despite this demand, Lewis continued to utilize the grain bins on dad's place until at least November 2018. And, as stated above, Lewis continued to utilize at least three bins located on grandpa's place as late as December 2021.

In February 2020, the Kleins filed an amended complaint which asserted that Lewis had been unjustly enriched through his use of Eugene and Marcene's grain bins without payment or permission. The Kleins further alleged that they had lost the use of their grain bins from March 1, 2016, through the time of their filing. They requested that Lewis be ordered to reimburse them for the fair and reasonable value of the grain storage. We note that the Kleins' amended complaint raised two other causes of action. Those claims requested the court to determine ownership of disputed livestock and farm equipment between Lewis and the Kleins and requested an order requiring Lewis to remove all equipment determined to belong to him from the Kleins' property. However, the only issue before us in this appeal relates to Lewis' use of the grain storage bins.

In March 2020, Lewis filed an answer to the Kleins' amended complaint, which included a counterclaim. In his answer, Lewis generally denied that he owed the Kleins any amount of money for his ongoing use of the grain storage bins. He asserted that he had an oral contract with Eugene and Marcene to utilize the grain storage bins for the storage of his crops. As part of his counterclaim, Lewis alleged that the Kleins owed him money as a result of them selling approximately 16,000 bushels of his corn that had been stored in the grain bins on dad's place. Lewis alleged that the Kleins retained and converted the proceeds from that sale even though the corn was his property. Lewis also alleged further causes of action related to land, livestock, and equipment which are not relevant to this appeal.

A bench trial was held on the Kleins' amended complaint and on Lewis' counterclaim beginning on November 12, 2021, and continuing on December 30. A further summary of the evidence presented at trial will be provided, as needed, in the analysis section below.

On February 23, 2022, the district court entered an order finding "generally in favor of the [Kleins]." In the order, the court found that while there was some evidence that Lewis had received permission to utilize the grain bins at some point in time, any such permission was revoked in March 2018 when he received a letter from the conservators' attorney demanding that he remove his crops from Eugene's and Marcene's grain bins. The court explained, "There is no credible evidence to support any contention by [Lewis] that he had a right to continue to occupy the grain bins after that date." The court calculated damages beginning on May 1, 2018, approximately one month after Lewis was told to vacate the bins, and ending on various dates corresponding to when Lewis had removed his crops from each bin. Based upon Michael's testimony, the court then found that a fair price for grain storage was $.05 per bushel per month. The court ordered Lewis to pay the Kleins $12,950 for his use of the grain storage bins on dad's place and $107,500 for his use of the grain storage bins on grandpa's place, for a total of $120,450.

In its order, the district court did find in favor of Lewis on his counterclaim for conversion regarding the Kleins' selling of his corn and retaining the proceeds of that sale. The court found that the proceeds from the corn sale totaled $44,272.97. However, the court found that the Kleins

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were entitled to $.50 per bushel for the cost of transporting the corn to the grain facility which ultimately sold the corn. Such cost amounted to $7,361 and was deducted from the proceeds of the sale. As such, Lewis was entitled to $36,911.37 for the sale of his corn. The court ordered that the $36,911.37 owed to Lewis by the Kleins "will be used to offset other amounts owed by [Lewis] to [the Kleins]." The "other amounts" owed by Lewis also included a $10,000 judgment for money retained by Lewis following the sale of calves belonging to the Kleins. Lewis appeals from the district court's order here.

III. ASSIGNMENTS OF ERROR

On appeal, Lewis assigns as error the district court's judgment in favor of the Kleins on their unjust enrichment claim as to the grain bins on dad's place, because the evidence showed that the Kleins had received full payment for the use of those grain bins pursuant to their lease agreement with Michael. Lewis also assigns as error that the district court improperly calculated the damages awarded to the Kleins for his ongoing use of the grain bins on both dad's place and grandpa's place. In addition, Lewis asserts that the district court incorrectly calculated the damages the Kleins owed to him for...