Zook v. Zook , 312 Neb. 128 ( 2022 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/05/2022 09:06 AM CDT
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Nebraska Supreme Court Advance Sheets
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ZOOK V. ZOOK
Cite as 312 Neb. 128Michael R. Zook and Teresa L. Chramosta, Copersonal
Representatives of the Estate of Robert L. Zook,
deceased, et al., appellees and cross-appellees, v.
Jerry L. Zook, appellee and cross-appellant,
and John B. Marshall, appellant.
___ N.W.2d ___
Filed August 5, 2022. No. S-21-176.
1. Limitations of Actions: Appeal and Error. The point at which a statute
of limitations begins to run must be determined from the facts of each
case, and the decision of the trial court on the issue of the statute of
limitations normally will not be set aside by an appellate court unless
clearly wrong.
2. ____: ____. The question of which statute of limitations applies is a
question of law that an appellate court must decide independently of the
conclusion reached by the trial court.
3. Contracts: Restitution: Unjust Enrichment. A claim for unjust enrich-
ment is a quasi-contract claim for restitution.
4. Contracts: Restitution. Any quasi-contract claim for restitution is an
action at law.
5. Judgments: Appeal and Error. In reviewing questions of law, an
appellate court is obligated to reach a conclusion independent of the
determinations reached by the lower courts.
6. Unjust Enrichment: Proof. To recover on a claim for unjust enrich-
ment, the plaintiff must show that (1) the defendant received money, (2)
the defendant retained possession of the money, and (3) the defendant in
justice and fairness ought to pay the money to the plaintiff. The plain-
tiff must also allege facts that the law of restitution would recognize as
unjust enrichment.
7. Unjust Enrichment: Words and Phrases. Unjust enrichment is a
flexible concept. But it is a bedrock principle of restitution that unjust
enrichment means a transfer of a benefit without adequate legal ground.
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ZOOK V. ZOOK
Cite as 312 Neb. 1288. Unjust Enrichment. Unjust enrichment results from a transaction that
the law treats as ineffective to work a conclusive alteration in owner-
ship rights.
9. Unjust Enrichment: Contracts: Restitution: Liability. A third party
is not liable in quasi-contract, unjust enrichment, or restitution merely
because he or she has benefited from a contract between two others.
There must be some misleading act, request for services or the like, to
support such an action.
10. Unjust Enrichment: Contracts. One who is free from fault cannot be
held to be unjustly enriched merely because one has chosen to exercise
a legal or contractual right.
Appeal from the District Court for Dawson County: James
E. Doyle IV, Judge. Dismissed in part, vacated in part, and in
part reversed and remanded with directions.
John D. Icenogle, of Bruner, Frank, Schumacher & Husak,
L.L.C., for appellant.
Jonathan M. Brown, of Walentine O’Toole, L.L.P., for appel-
lees and cross-appellees.
Claude E. Berreckman, Jr., and Claire K. Bazata, of
Berreckman & Bazata, P.C., L.L.O., for appellee and cross-
appellant.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Heavican, C.J.
INTRODUCTION
The plaintiffs, Michael R. Zook and Teresa L. Chramosta,
as copersonal representatives of the estate of Robert L. Zook
and in their individual capacities, and Robin L. Kuhlman, in
her individual capacity, brought suit against Jerry L. Zook,
alleging unjust enrichment and seeking a constructive trust,
and against John B. Marshall, alleging negligence in failing to
change the beneficiary on Robert’s life insurance. The district
court found in favor of the plaintiffs and against Marshall
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ZOOK V. ZOOK
Cite as 312 Neb. 128and Jerry. Marshall appeals, and Jerry cross-appeals. We dis-
miss in part, vacate in part, and in part reverse and remand
with directions.
FACTUAL BACKGROUND
The facts are largely undisputed. Jerry and Robert were
brothers. In the 1980s and 1990s, the two operated a welding
business in Cozad, Nebraska, of which each brother owned
50 percent.
In March 1993, the business purchased “key-man life insur-
ance policies” on both Jerry and Robert, through Marshall, an
insurance agent. In October 1993, the brothers entered into a
buy-sell agreement, which provided for transfer of the busi-
ness to the highest bidder. In addition, the agreement provided
that at the time of payment of the purchase price and transfer
of the stock, the parties were to each transfer to the other
ownership of the life insurance policies each owned on the
other’s life.
In November 1993, Robert entered the highest bid and
became the sole owner of the business. In December, Jerry’s
attorney wrote a letter noting that Marshall was making
arrangements to transfer the life insurance policies. A letter to
Marshall from a Cozad bank at approximately that same time
suggests that Robert intended to name his wife as beneficiary
of his life insurance policy.
Apparently, Marshall had Robert execute a change of ben-
eficiary form that was sent to the insurance company. Marshall
testified that he did this change of beneficiary on his own
and was not directed to do so by Robert, but that Robert did
sign the form. In a letter dated January 27, 1994, the insur-
ance company sent the form back as unrecorded, stating that
the “policy is owned by Jerry [and] we will need to have his
signature on the form before the beneficiary can be changed.”
Marshall testified that he does not recall informing Robert
that the change in beneficiary form was returned without
having been recorded and that he never informed Robert that
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ZOOK V. ZOOK
Cite as 312 Neb. 128the beneficiary had not been changed to his wife. Marshall
then sought Jerry’s signature to assign the policy, which
occurred on August 28, 1995.
Robert died on March 27, 2017, his wife having prede-
ceased him. After Robert died, the insurance company sent
Jerry information to assist him in filing a claim to the pro-
ceeds. Meanwhile, Marshall had begun the same process with
Robert’s children. The insurance company denied the plaintiffs’
claim. In May 2017, proceeds of approximately $200,000 were
paid to Jerry.
Robert’s children, individually and in their capacities as
copersonal representatives of the estate, filed suit against
Marshall and Jerry. As to Jerry, they proceeded on theories of
unjust enrichment, constructive trust, and conversion, allega-
tions which Jerry denied. As to Marshall, they alleged profes-
sional negligence by virtue of his position as an insurance
agent. Marshall conceded that he had failed to file the change
of beneficiary form, but argued that suit against him was
barred by the applicable statute of limitations.
The district court found in favor of Robert’s children and
found Marshall and Jerry jointly and severally liable for
$200,000. In addition, a constructive trust was imposed on the
insurance proceeds in Jerry’s possession and Jerry was ordered
to provide an accounting.
Marshall appealed, and Jerry cross-appealed.
ASSIGNMENTS OF ERROR
On appeal, Marshall assigns that the district court erred in
(1) applying the general tort statute of limitations rather than
the professional statute of limitations and (2) finding that the
claim was not barred by the statute of limitations.
On cross-appeal, Jerry assigns that the district court erred in
(1) finding clear and convincing evidence that he and Robert
agreed to certain terms regarding the beneficiary designations
on the life insurance policies; (2) finding that he had been
unjustly enriched; (3) finding that he was aware that the life
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312 Nebraska Reports
ZOOK V. ZOOK
Cite as 312 Neb. 128insurance proceeds were intended to be paid to someone other
than himself, yet he failed to rectify his unjust enrichment;
(4) failing to apply the doctrine of laches; (5) establishing a
constructive trust; and (6) finding that Marshall’s negligence
and proximate cause did not absolve Jerry of liability.
STANDARD OF REVIEW
[1,2] The point at which a statute of limitations begins to
run must be determined from the facts of each case, and the
decision of the trial court on the issue of the statute of limita-
tions normally will not be set aside by an appellate court unless
clearly wrong. 1 The question of which statute of limitations
applies is a question of law that an appellate court must decide
independently of the conclusion reached by the trial court. 2
[3,4] A claim for unjust enrichment is a quasi-contract claim
for restitution. 3 This court has held that any quasi-contract
claim for restitution is an action at law. 4
[5] In reviewing questions of law, an appellate court is obli-
gated to reach a conclusion independent of the determinations
reached by the lower courts. 5
ANALYSIS
Marshall’s Appeal
Marshall filed his notice of appeal on March 1, 2021. On
March 22, Marshall died. No notice of Marshall’s death or
any attempt to revive was filed with this court by any party
to this litigation. But after statements made at oral arguments
suggested his death, this court issued an order to show cause
why Marshall’s appeal should not be dismissed as a result of
1
Colwell v. Mullen, 301 Neb. 408, 918 N.W.2d 858 (2018).
2
See Reinke Mfg. Co. v. Hayes, 256 Neb. 442, 590 N.W.2d 380 (1999).
3
In re Estate of Adelung, 306 Neb. 646, 947 N.W.2d 269 (2020).
4
Id.5
See Kissinger v. Genetic Eval. Ctr., 260 Neb. 431, 618 N.W.2d 429 (2000).
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ZOOK V. ZOOK
Cite as 312 Neb. 128his death. In response, Marshall’s wife requested that she be
substituted as a party under Neb. Rev. Stat. § 25-322 (Reissue
2016). As relevant here, in the event of the death of a party,
§ 25-322 provides this court discretion to substitute a suc-
cessor in interest as a party. We lack sufficient information to
determine whether Marshall’s wife is a successor in interest.
Accordingly, we exercise our discretion to deny the request of
Marshall’s wife and dismiss Marshall’s appeal.
Jerry’s Cross-Appeal
Though we do not address Marshall’s appeal, Jerry filed
a separate cross-appeal to which we turn now. In that cross-
appeal, Jerry assigns that the district court erred in finding
unjust enrichment on his part and in imposing a construc-
tive trust. We find merit to Jerry’s assertions and reverse the
district court’s order insofar as it found Jerry was unjustly
enriched.
[6] To recover on a claim for unjust enrichment, the plain-
tiff must show that (1) the defendant received money, (2)
the defendant retained possession of the money, and (3) the
defendant in justice and fairness ought to pay the money to the
plaintiff. 6 The plaintiff must also allege facts that the law of
restitution would recognize as unjust enrichment. 7
[7,8] Unjust enrichment is a flexible concept. 8 But it is a
bedrock principle of restitution that unjust enrichment means a
transfer of a benefit without adequate legal ground. 9 It results
from a transaction that the law treats as ineffective to work a
conclusive alteration in ownership rights. 10
6
Kanne v. Visa U.S.A., 272 Neb. 489, 723 N.W.2d 293 (2006).
7
City of Scottsbluff v. Waste Connections of Neb., 282 Neb. 848, 809
N.W.2d 725 (2011).
8
Id.9
Id.10
Id.- 134 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
ZOOK V. ZOOK
Cite as 312 Neb. 128[9,10] A third party is not liable in quasi-contract, unjust
enrichment, or restitution merely because he or she has bene­
fited from a contract between two others. 11 Instead, there must
be some misleading act, request for services or the like, to
support such an action. 12 One who is free from fault cannot be
held to be unjustly enriched merely because one has chosen to
exercise a legal or contractual right. 13
Although the plaintiffs have shown that Jerry received
money and that Jerry retained that money, they have not shown
that Jerry “in justice and fairness ought to pay the money” back
to them. 14 Jerry was a beneficiary to Robert’s life insurance
policy. When initially named a beneficiary, Jerry was Robert’s
business partner. As we noted above, although the business
relationship ended, Robert never changed the beneficiary of
his policy.
But just because the plaintiffs maintain that Robert would
have changed his beneficiary had he known that Jerry was
still named in the policy, it does not mean that Jerry was
unjustly enriched. The plaintiffs do not allege, nor is there
any evidence to support, an assertion that Jerry engaged in
any wrongdoing in connection with his status as beneficiary
to Robert’s policy. Nor is there any evidence in the record that
would show that Robert was obligated to change his benefi-
ciary to, for example, his children or wife, such that it would
be unjust for Jerry to retain the life insurance proceeds. 15 Jerry
was named the beneficiary of the policy, and he simply
11
See Haggard Drilling, Inc. v. Greene, 195 Neb. 136, 236 N.W.2d 841(1975).
12
Id.13
Kissinger v. Genetic Eval. Ctr., supra note 5, citing Wrede v. Exchange
Bank of Gibbon, 247 Neb. 907, 531 N.W.2d 523 (1995).
14
See Kissinger v. Genetic Eval. Ctr., supra note 5, 260 Neb. at 436, 618
N.W.2d at 434.
15
See 22 Shepard’s Causes of Action 463 (1990) (collecting cases).
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ZOOK V. ZOOK
Cite as 312 Neb. 128exercised his right under the policy to apply for and accept the
proceeds of that policy.
We conclude that the district court erred in finding that Jerry
was unjustly enriched and in imposing a constructive trust on
the proceeds. Accordingly, we reverse that finding and vacate
the order imposing the constructive trust.
CONCLUSION
We dismiss Marshall’s appeal. As to Jerry’s cross-appeal,
we reverse the district court’s findings, vacate the constructive
trust, and remand with directions to dismiss.
Dismissed in part, vacated in part, and in part
reversed and remanded with directions.