Southern Title Guar. Co., Inc. v. Bethers

• Court: Utah Court of Appeals
• Writing for the Court: GARFF
• Citation: Southern Title Guar. Co., Inc. v. Bethers, 761 P.2d 951 (Utah App. 1988)
• Decision Date: 23 September 1988
• Docket Number: No. 860212-CA,860212-CA
• Parties: SOUTHERN TITLE GUARANTY CO., INC., a Texas corporation, Plaintiffs and Appellants, v. Glenn L. BETHERS and Tella Mae Bethers, husband and wife, Defendants and Respondents.

Page 951

761 P.2d 951

SOUTHERN TITLE GUARANTY CO., INC., a Texas corporation Plaintiffs and Appellants, v. Glenn L. BETHERS and Tella Mae Bethers, husband and wife Defendants and Respondents.

No. 860212-CA.

Court of Appeals of Utah.

Sept. 23, 1988.

Gregory B. Wall (argued), Wall & Wall, Salt Lake City, for plaintiffs and appellants.

S. Rex Lewis, Leslie W. Slaugh (argued), Howard, Lewis & Petersen, Provo, for defendants and respondents.

Before BILLINGS, DAVIDSON and GARFF, JJ.

OPINION

GARFF, Judge:

Southern Title Guaranty Co. appeals the dismissal of its unjust enrichment action against respondents Glenn J. Bethers and Tella Mae Bethers. We affirm the dismissal.

Appellant is a Texas corporation authorized to do business in Utah. On June 7, 1978, Sunwest II Development Corporation (Sunwest) agreed to purchase land from respondents to develop a subdivision. Respondents and Sunwest signed and recorded a trust deed securing Sunwest's note for $82,950 in favor of respondents.

As part of the agreement, respondents agreed to reconvey title to one lot in the subdivision for each $6,912.50 principal paid towards the note. Initially, respondents executed and delivered to Valley Title twelve request and reconveyance forms, one for each lot in the subdivision. When a particular lot was sold, Sunwest deposited a certificate of deposit with Valley Title. In exchange, it received a reconveyance of the lot using one of respondents' previously executed forms. When the certificate of deposit matured, Valley Title either returned it to respondents or to Sunwest, which cashed it and issued a check for the amount to respondents. The deposit of the certificate of deposit, not the payment of money to respondents, triggered the reconveyance of a particular lot. Valley Title Company, as escrow agent, was authorized to release the lots as it received these payments.

After the subdivision was developed, Sunwest sold Lot 1 to Norman Anderson in January 1981. He subsequently sold it to the Martins, who obtained financing with Trans-America Mortgage Company. Appellant, without mentioning respondents' trust deed, issued a mortgagee title insurance policy to Trans-America which insured that Trans-America had a first deed of trust on Lot 1.

The trust deed note came due on July 1, 1981, but Sunwest did not completely pay off the note. Respondents did not receive any payments after August 15, 1981, at which time the principal balance was $13,253.87, an amount equal to the payoffs for Lots 1 and 2.

In 1984, Trans-America foreclosed on the Martins' mortgage and acquired their interest in Lot 1. It then learned that Lot 1 had not been reconveyed nor had the transaction been recorded at the time Norman Anderson bought the lot from Sunwest. Trans-America then demanded, under its title insurance policy, that appellant clear the defect in the title.

Appellant's attorney inquired of Valley Title about the status of Lot 1. On October 10, 1984, Valley Title sent him a letter which stated that Lot 1 had never been paid for. Appellant then elected to pay Valley Title $9,582.60. Upon receipt of these funds, respondents reconveyed Lot 1 to appellant.

Appellant, believing that Lot 1 had been paid for at the time of the original sale to Norman Anderson, and, thus, that respondents had received double payment for the lot, demanded that respondents return the $9,582.60 to it since it was subrogated to Trans-America's rights under the terms of the insurance policy. This action ensued, which was tried without a jury.

Appellant showed that on January 30, 1981, Valley Title delivered a check for $9,267.50 to Sunwest from Norman Anderson's purchase of Lot 1. The check was exchanged for a certificate of deposit. Evidence showed that Valley Title kept the certificates of deposit in a manila envelope, upon which various employees had, over a period of two years, recorded the date each certificate of deposit was received and released, and the lots to which the certificates of deposit applied. "Lot 1 1-30-81" was written upon this envelope, indicating that Valley Title had received a certificate of deposit for Lot 1 on January 30, 1981. Further, Valley Title had made a small notation on the certificate of deposit as to which lot it applied. The certificate of deposit in question bore, in the lower left hand corner, the notation, "Lot 1." A 5 X 8 inch slip of paper found in the manila folder was an accounting of money owed to respondents and reflected receipts for Lot 1. When the certificate of deposit was redeemed, a cashier's check was made out to respondents for $9,563.38. Respondents acknowledged receipt of the check on August 14, 1981. However, Valley Title did not reconvey Lot 1, but, instead, reconveyed Lot 5.

On May 21, 1986, the trial court dismissed appellant's case with prejudice after its presentation of evidence and prior to respondents' presentation of evidence.

The parties raise the following issues on appeal: (1) Did the trial court err in involuntarily dismissing plaintiff's complaint? (2) Were respondents unjustly enriched when appellant paid them the full purchase price to reconvey Lot 1 after Anderson had already paid Sunwest the full purchase price? (3) Is appellant's payment for the lot voidable on the grounds of mutual mistake of fact? (4) Are respondents entitled to an award of attorney fees for being required to respond to this appeal?

I. INVOLUNTARY DISMISSAL

Under Utah R.Civ.P. 41(b), the defendant in an action tried without a jury may, after the plaintiff has completed the presentation of his evidence, move for a dismissal on the ground that "upon the facts and the law the plaintiff has shown no right to relief." Rule 41(b) is "appropriately applied when the trial judge finds that the claimant has either failed to make out a prima facie case or when the trial judge is not persuaded by the evidence presented by the claimant." Lemon v. Coates, 735 P.2d 58, 60 (Utah 1987).

Appellant brought its case under the theory of unjust enrichment. To establish unjust enrichment, a plaintiff must show: "(1) the defendant received a benefit; (2) an appreciation or knowledge by the defendant of the benefit; (3) under circumstances that would make it unjust for the defendant to retain the benefit without paying for it." Davies v. Olson, 746 P.2d 264, 269 (Utah Ct.App.1987); see also Scheller v. Dixie Six Corp., 753 P.2d 971, 975 (Utah Ct. App. 1988); Knight v. Post, 748 P.2d 1097, 1100 (Utah Ct.App.1988). In defining such circumstances, "[t]he mere fact that a third person benefits from a contract between two others does not make such third person liable in quasi-contract, unjust enrichment, or restitution. There must be some misleading act, request for services, or the like, to support such an action." Knight, 748 P.2d at 1101 (emphasis in original) (quoting Commercial Fixtures and Furnishings, Inc. v. Adams, 564 P.2d 773, 774 (Utah 1977)).

The trial court found that "[o]n or about October 26, 1984, defendants received from plaintiff a check in the amount of $9,582.60"; that "[s]aid check was paid to the defendants by the plaintiff to obtain a request for reconveyance and the reconveyance of Lot 1 of the subject subdivision"; and that "[t]he plaintiff at all times knew that the defendants would not request a reconveyance of Lot 1 unless they were paid the sum of $9,582.60." The trial court thus acknowledged that appellant successfully showed the first and second elements of unjust enrichment, respondents' receipt of and knowledge of the benefit.

However, the trial court also found that "[t]he check ... [from the original sale] was not for the release of Lot 1 from the Deed of Trust as far as the defendants are concerned"; that "[t]he defendants have not been paid twice for the release of the subject lot"; and that "[t]he plaintiff received what it bargained for when it paid the sum of $9,563.38 to defendants and received therefore [sic] a conveyance of Lot 1." It thus concluded that "[t]he defendants have not been unjustly enriched at the expense of the plaintiff." Consequently, appellant did not show the third element of unjust enrichment to the trial court's satisfaction.

In reviewing involuntary dismissals, we must give great weight to the findings made and the inferences drawn by the trial judge, but must reject his findings if we consider them to be clearly erroneous. State v. Walker, 743 P.2d 191, 193 (Utah 1987); see also Lemon, 735 P.2d at 60; Wessel v. Erickson Landscaping Co., 711 P.2d 250, 253 (Utah 1985). Findings are "clearly erroneous" if they are against the clear weight of the evidence or if we otherwise reach a definite and firm conviction that a mistake has been made. Walker, 743 P.2d at 193; see also Wessel, 711 P.2d at 253. On the other hand, we do not defer to conclusions of law but review them for correctness. Id.

The evidence supporting the trial court's finding that the check from the original sale was not for the release of Lot 1 so far as defendants were concerned is controverted but, nevertheless, is sufficient to justify the finding. The record clearly indicates that respondents had not received payment on the contract equivalent to the value of Lots 1 and 2. Mr. Wall, vice president of Valley Title, testified that Valley Title did not notify respondents as to which lot it would reconvey upon receipt of a certificate of deposit. He also indicated that there were no written instructions from Sunwest or respondents as to which lots to reconvey upon receipt of payment, including the reconveyance of Lot 1. Respondents had no control over which lot was released in exchange for a specific payment. As far as respondents were concerned, th...