Nelson v. Gish

• Decision Date: 17 February 1982
• Docket Number: No. 13902,13902
• Citation: 644 P.2d 980,103 Idaho 57
• Parties: Lynn A. NELSON and Olive I. Nelson, husband and wife, Plaintiffs-Respondents, v. Roy GISH and Rena Gish, husband and wife, Defendants-Appellants.
• Court: Idaho Court of Appeals

Page 980

644 P.2d 980

103 Idaho 57

Lynn A. NELSON and Olive I. Nelson, husband and wife, Plaintiffs-Respondents, v. Roy GISH and Rena Gish, husband and wife, Defendants-Appellants.

No. 13902.

Court of Appeals of Idaho.

Feb. 17, 1982.

Review Denied May 4, 1982.

Pat W. Arney, Coeur d'Alene, for defendants-appellants.

Thomas W. Vasseur, Coeur d'Alene, for plaintiffs-respondents.

WALTERS, Chief Judge.

Lynn Nelson filed suit against Roy Gish to recover sums due him following termination of their agreement to operate a gravel excavating and rock crushing business. He also sought recovery for unjust enrichment of Gish's real property, as a result of its development for use as a gravel pit. The matter was tried to a jury and a verdict was rendered in favor of Nelson. Gish appeals the judgment entered upon the verdict. The primary issue at trial and on this appeal concerns the right of Nelson to recover both under the partnership contract and for unjust enrichment.

Lynn Nelson and Roy Gish began negotiating to set up their business in the spring of 1977, upon certain undeveloped property near Athol, Idaho, which was owned by Gish and was favorable for an open pit gravel mine. To prepare for the commencement of this operation, Nelson contributed labor and employed his own bulldozer for a number of hours. He built an access road to the pit site on Gish's property, and cleared an area near the pit for an office building. He opened the gravel pit by clearing brush, stripping the top soil, and removing overburden.

In April of the following year the parties executed a written partnership agreement and made certain contributions to the partnership without charge. Gish contributed the improved property, and Nelson likewise contributed his crusher equipment, the use of his bulldozer, and his managerial services to the "long-range gravel pit operation" envisioned in the agreement. Nelson also moved his crusher equipment to the site and set up his machinery for operation. The written agreement did not provide for compensation to Nelson for the improvements which he had made to the property prior to the execution of the written agreement, nor did it provide for the expenses Nelson incurred in setting up the crusher equipment. No oral agreement was ever reached between the parties regarding these expenses. Although the written partnership contract provided for a renewable term of two years, the agreement was terminated within a few months after it was signed. The parties could not reach an acceptable settlement regarding dissolution of the partnership and this action ensued.

In accordance with the terms of the written partnership contract, Nelson sought recovery of one-half of the fair market value of the stockpile of processed gravel and crushed rock remaining on Gish's premises when the agreement was terminated. ¹ In addition, Nelson sought recovery for the amount by which he felt Gish was unjustly enriched through Nelson's alteration of Gish's undeveloped land into commercial property and for the expenses incurred in setting up the crusher equipment.

During the trial Gish strenuously and repeatedly opposed Nelson's efforts to recover both the asserted contractual claim and the unjust enrichment claims, contending that Nelson's rights were governed solely by the written partnership agreement. Gish expressed this opposition by attacking the form of the complaint, by objecting to evidence submitted in support of Nelson's claims, by objecting to jury instructions regarding the claims, and by post-trial motions for judgment notwithstanding the verdict or in the alternative, for a new trial. The trial court ruled against Gish on all points.

The jury awarded Nelson one-half the value of the stockpile at the termination of the partnership agreement, certain sums for moving the crusher equipment to Gish's property and for the labor expenses incurred in setting up the crusher, and an amount which represented the benefit to Gish's property from the preparation of the gravel pit. We affirm the judgment entered following the jury's verdict in part and remand for remittitur the award for recovery of expenses related to moving and setting up the crusher.

Preliminarily, it should be noted that Nelson's unjust enrichment claim is extrinsic to the terms of the partnership agreement and is based upon what is known in law as an action on an "implied in law contract," or "quasi-contract." The Idaho Supreme Court has explained that:

"... a contract implied in law is not a contract at all, but an obligation imposed by law for the purpose of bringing about justice and equity without reference to the intent or the agreement of the parties and, in some cases, in spite of an agreement between the parties. (Citations deleted.) It is a non-contractual obligation that is to be treated procedurally as if it were a contract, and is often referred to as quasi contract, unjust enrichment, implied in law contract or restitution.

As the essence of a contract implied in law lies in the fact that the defendant has received a benefit which it would be inequitable for him to retain, it necessarily follows that the measure of recovery in a quasi-contractual action is not the amount of the enrichment, but the amount of the enrichment which, as between the two parties it would be unjust for one party to retain" (Emphasis in original) Continental Forest Products, Inc. v. Chandler Supply Co., 95 Idaho 739, 743, 518 P.2d 1201, 1205 (1974).

The amount of the recovery to be obtained in quasi-contract is a factual issue to be resolved by the trier of fact, in this case the jury. See 66 Am.Jur.2d Restitution and Implied Contracts, §§ 28, 90 (1973); e.g. McShane v. Quillan, 47 Idaho 542, 277 P. 554 (1929).

The main thrust of Gish's position on appeal tests the right of Nelson to recover under the written partnership agreement and also by way of quasi-contract for unjust enrichment. We hold that under the circumstances of this case, it was proper for Nelson to seek recovery on both theories. The recovery sought was neither alternative nor was it a double recovery. It resulted in compensating Nelson both for the amount that he was entitled to as a partner and for the benefit received by Gish as a result of Nelson's efforts prior to the written contract. The written contract was silent as to distribution of the value of improvements to Gish's land upon dissolution of the partnership.

Gish also asserts the applicability of the parol evidence rule to bar proof of unjust enrichment, arguing that the written partnership agreement controlled Nelson's right to recovery to the exclusion of all other claims. He argues that the labor and services which Nelson put into developing Gish's property into a commercial site simply related to the production of this stockpile. He asserts that Article Sixteen of the written agreement sets forth the clear and unambiguous intent of the parties regarding disposition of the stockpile and, therefore, allowing admission of evidence regarding the value of Nelson's unjust enrichment claim was a violation of the parol evidence rule. The parol evidence rule was stated in Gardiner v. Gardiner, 36 Idaho 664, 214 P. 219 (1923) as follows: "The general rule is well established that, when a contract is reduced to writing, it constitutes the final agreement of the parties as to its subject matter, and prior or contemporaneous oral agreements or statements varying or adding to its terms are not admissible." 36 Idaho at 670, 214 P. at 221. Accord, ...