Leer Mfg. Co., Inc. v. Arctic Ice

• Decision Date: 20 November 1986
• Citation: 401 N.W.2d 27,135 Wis. 2d 541
• Parties: NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. LEER MANUFACTURING CO., INC., a Wisconsin corporation, Plaintiff-Respondent, v. ARCTIC ICE, a Texas partnership, RON MENDENHALL, partner and individually, and MILDRED H. MENDENHALL, partner and individually, Defendants-Appellants. 85-0976.
• Court: Wisconsin Court of Appeals

Page 27

401 N.W.2d 27

135 Wis.2d 541

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

LEER MANUFACTURING CO., INC., a Wisconsin corporationPlaintiff-Respondent, v.ARCTIC ICE, a Texas partnership, RON MENDENHALL, partner and individually, and MILDRED H. MENDENHALL, partner and individually, Defendants-Appellants.

85-0976.

Court of Appeals of Wisconsin.

Nov. 20, 1986.

Circuit Court, Dane County

Affirmed

Appeal from a judgment of the circuit court for Dane County: Richard W. Bardwell, Judge.

Before GARTZKE, P.J., DYKMAN and EICH, JJ.

DYKMAN, Judge.

Appellants Arctic Ice, a Texas partnership, and its partners, Ronald and Mildred Mendenhall, appeal from a judgment in favor of Leer Manufacturing Company.The issues are whether the trial court properly sustained the jury's verdict that Arctic was unjustly enriched when it retained ice manufacturing equipment without paying Leer; whether the trial court properly set aside the jury's verdict as to the nature of Arctic's promise to pay Leer; and whether the trial court had personal jurisdiction over Arctic.Because we conclude that the jury's unjust enrichment verdict is supported by credible evidence, we need not consider whether the trial court erred in setting aside the jury's verdict based on Arctic's promise to pay.We also conclude that the trial court had personal jurisdiction over Arctic.Accordingly, we affirm the judgment.

FACTS

Ronald Mendenhall, on behalf of Arctic, contracted with ITX, a California corporation, for the construction by ITX of an ice-making facility in Texas, and paid ITX the purchase price of $305,000.ITX ordered ice merchandising equipment and mobile units for the facility from Leer.Leer refused to extend credit to ITX, requiring prepayment before Leer would customize and ship the equipment.Because ITX did not prepay, Leer did not deliver any equipment.

Mendenhall contacted Leer's sales manager, Robert Carr, about the delay in shipping the equipment.When Carr informed him that ITX had not paid for the equipment, Mendenhall promised to pay for the equipment if ITX did not.Leer customized the equipment, shipped it to Arctic, and billed Arctic.Arctic did not pay the bill.

Leer's complaint against Arctic and the Mendenhalls alleged an oral contract for the equipment, or, in the alternative, that Arctic was unjustly enriched when it retained the equipment without paying for it.

The jury found that Arctic had been unjustly enriched and that Mendenhall did not unconditionally promise to pay for the equipment.On motions after the verdict, the trial court sustained the jury's verdict that Arctic was unjustly enriched but set aside the verdict on the promise.The court concluded that the evidence showed that Mendenhall's promise to pay was not an oral agreement to answer for the debt of another, which is void under the statute of frauds, sec. 241.02(b), Stats.Rather, it concluded that Mendenhall's promise was primary and therefore not barred by the statute of frauds.The court granted judgment on the verdict based on the jury's answer that Arctic was unjustly enriched.The court also concluded that because it had personal jurisdiction over the alleged primary promise claim, it had jurisdiction over the unjust enrichment claim.^1..

STANDARD OF REVIEW

A jury verdict will be sustained if there is any credible evidence to support it.'When the verdict has the trial court's approval, this is even more true.'Fehring v. Republic Ins. Co., 118 Wis.2d 299, 305, 347 N.W.2d 595, 598(1984).Here, the trial court sustained the jury's verdict that Arctic was unjustly enriched.^2..If more than one reasonable inference may be drawn from the evidence, we must accept the inference the jury drew, and we search the record for credible evidence to sustain the jury's verdict.We do not search for evidence to sustain a verdict that the jury could have reached but did not.Id. at 305-06, 374 N.W.2d at 598.

UNJUST ENRICHMENT

Arctic contends that because it paid ITX for the value of the benefit Leer conferred, Leer was not unjustly enriched and Leer must recover from ITX on its agreement for the equipment.Leer responds that because Leer had no contractual relationship with ITX on which to base a claim for payment it is not inequitable to require Arctic to pay twice.

Unjust enrichment is a quasi-contractual obligation imposed by law on the grounds of justice and equity.Madison General Hospital v. Haack, 124 Wis.2d 398, 404, 369 N.W.2d 663, 666(1985).It is an action at law which is 'ruled by equitable principles.'Arjay Investment Co. v. Kohlmetz, 9 Wis.2d 535, 538, 101 N.W.2d 700, 702(1960).The elements of unjust enrichment are: (1) a benefit conferred; (2) an appreciation or knowledge of the benefit; and (3) acceptance or retention of the benefit under circumstances making it inequitable to retain the benefit without payment of its value.Puttkammer v. Minth, 83 Wis.2d 686, 689, 266 N.W.2d 361, 363(1978).

There is credible evidence that Leer's delivery of the customized ice merchandisers and mobile units conferred a benefit on Arctic.Arctic needed the equipment to run its ice business.Arctic's appreciation of this benefit is evidenced by its use of the equipment in its business.Arctic argues, however, that it would be inequitable to require it to pay twice for this equipment.

Credible evidence supports the conclusion that it is inequitable for Arctic to retain the benefit conferred by Leer without paying Leer for its value.Both Carr and Mendenhall testified that ITX approached Leer regarding equipment for Arctic's ice-making facility.Leer refused to extend credit to ITX, requiring prepayment before it would customize and ship the equipment.Because ITX never paid, Leer did not ship any equipment on ITX's order.Mendenhall contacted Carr about the shipping delay and was informed that Leer had not filled ITX's order because ITX had not paid.During the course of the conversation, Mendenhall, who needed the equipment to run his business, stated that Arctic would pay for the equipment if ITX did not.Carr testified that this promise to pay motivated Leer to customize and ship the equipment.

The jury balanced the inequity of requiring Arctic to pay twice against the inequity of Leer not being paid.It could have concluded that, as between two victims, the equities were in Leer's favor.

Arctic contends that the trial court erred as a matter of law in sustaining the jury's unjust enrichment verdict.Arctic relies on a series of Wisconsin cases involving contractors and subcontractors, S & M Rotogravure Service, Inc. v. Baer, 77 Wis.2d 454, 252 N.W.2d 913(1977), Seegers v. Sprague, 70 Wis.2d 997, 236 N.W.2d 227(1975), Cebhardt Bros., Inc. v. Brimmel, 31 Wis.2d 581, 143 N.W.2d 479(1966), andSuperior Plumbing Co. v. Tefs, 27 Wis.2d 434, 134 N.W.2d 430(1965).These cases hold that a property owner who retains a benefit conferred by a subcontractor is not unjustly enriched if the owner has paid the general contractor for the value of the subcontractor's labor and materials.

The S&M Rotogravure court summarized these cases and recognized that

[t]hese cases involved actions for money judgments commenced by a subcontractor against a property owner, upon whose property the subcontractor had performed construction work pursuant to an agreement with the general contractor.In each case this court held the plaintiff subcontractor had no cause of action [for unjust enrichment].[Emphasis added.]

Id. at 462, 252 N.W.2d at 916.

Arctic's contention is based on its assumption that Leer is a subcontractor.Whether Leer is a subcontractor depends upon whether it contracted with ITX.The jury did not answer that question because Arctic did not request a question to that effect in its proposed special verdict.Arctic's contention can therefore succeed only if there is no credible evidence of a failure of contract between ITX and Leer.

Leer's sales manager testified that Leer would sell to anyone, but some buyers needed to put 'money on the table before we will finalize the order,' and that he told a representative of ITX that 'they would have to have cash in house before we would process their order.'^3..Although it is undisputed that ITX ordered equipment from Leer, this testimony permits a reasonable inference that until ITX paid for the equipment, Leer was not obligated to ITX.We therefore cannot say, as a matter of law, that a contract arose between ITX and Leer.Without either a jury finding that the contract existed, or undisputed evidence of the contract, Arctic's contention, based on the four cases it cited, fails.

Arctic argues that Leer's letter to ITX seeking payment on the overdue invoices shows an agreement between them.Carr testified that Leer contacted ITX regarding the outstanding invoices in order to assist Arctic in clearing its account.Carr denied that this was an attempt by Leer to collect from ITX.Leer's letter, as explained by Carr, is not conclusive as to the existence of a contract.

Because credible evidence supports the jury's verdict that Arctic was unjustly enriched by Leer, the trial court did not err in sustaining the verdict.Having sustained the verdict, we need not determine whether the trial court erred in setting aside the jury's verdict regarding the nature of Mendenhall's promise to...