Ryffel Family Partnership Ltd. v. Alpine Country Construction, Inc.

12/28/2016
DA 15-0805
Case Number: DA 15-0805
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 350
RYFFEL FAMILY PARTNERSHIP LTD.,
Plaintiff and Appellant,
v.
ALPINE COUNTRY CONSTRUCTION, INC.,
Defendant, Appellee,
and Cross-Appellant,
____________________________________________
APLINE COUNTRY CONSTRUCTION, INC.,
Counter-Claimant, Appellee,
and Cross-Appellant,
v.
RYFFEL FAMILY PARTNERSHIP LTD.,
Counter-Defendant
and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and For the County of Gallatin, Cause No. DV 08-372C
Honorable John C. Brown, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Rhett B. Nemelka, Nemelka Law, P.C., Bozeman, Montana
For Appellee:
Jesse Beaudette, Nathan A. Fluter, Bohyer, Erickson, Beaudette & Tranel,
PC, Missoula, Montana
Submitted on Briefs: September 28, 2016
Decided: December 28, 2016
Filed:
__________________________________________
Clerk
2
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Plaintiff and Appellant Ryffel Family Partnership, Ltd. (Ryffel Partnership)
appeals from a jury verdict entered in the Eighteenth Judicial District Court, Gallatin
County. The jury found that Ryffel Partnership had breached two oral contracts with the
Appellee Alpine Construction (Alpine), but awarded zero damages. The first agreement
was entered into in January of 2007 and the second agreement was entered into in
September of 2007. Although awarding zero damages for Ryffel Partnership’s breach,
the jury found Ryffel Partnership was unjustly enriched by Alpine’s labor and awarded
Alpine $50,348.18 in damages. Finally, the jury awarded $25,000 to Alpine for Ryffel
Partnership’s breach of the covenant of good faith and fair dealing.
¶2 The District Court issued an order pursuant to M. R. Civ. P. 59, amending the
judgment to assign the jury’s damages award for unjust enrichment to its finding that
Ryffel Partnership breached its contract. The District Court did so upon the basis that
breach of contract and unjust enrichment are inconsistent legal theories of recovery. The
District Court’s order also struck the jury’s award of $25,000 for breach of the covenant
of good faith and fair dealing, concluding no evidence in the record supported the award.
Alpine filed a motion to amend the judgment for pre-judgment interest pursuant to
§ 27-1-211, MCA, which the District Court denied by allowing the motion to expire. In
its appeal, Ryffel Partnership seeks a new trial, alleging the jury’s verdict was
inconsistent and that there was not substantial evidence to support breach of the second
agreement entered into in September of 2007. Ryffel Partnership does not raise any issue
regarding the first agreement entered into in January of 2007, which the jury found it had
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also breached. Alpine cross-appeals the District Court’s denial of pre-judgment interest.
We affirm the District Court’s ruling, including its denial of pre-judgment interest, and
deny Ryffel Partnership’s appeal to review the verdict for lack of substantial evidence.
We restate the issues on appeal as follows:
1. Whether the jury’s verdict regarding the parties’ second agreement was
supported by substantial evidence.
2. Whether the District Court erred in denying Ryffel Partnership’s motion for a
new trial based on an inconsistent or illegal jury verdict.
3. Whether the District Court erred in denying Alpine’s motion for pre-judgment
interest pursuant to § 27-1-211, MCA.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Although James Ryffel (Ryffel) was born in Bozeman, Montana, Ryffel
Partnership is a Texas-based partnership consisting of Ryffel, his wife, and a family trust
as partners. Ryffel often travels to Montana and purchased the property at issue because
of its scenic nature and beauty, along with its suitability as a location for a family home.
Part of the property’s appeal to Ryffel and his wife were the statuesque “specimen trees”
and the “hilly knoll” upon which many of these trees were located.
¶4 Ryffel and his wife wanted to build a home on the property that would, among
other things, look upon the beauty of the knoll and its trees. To implement that vision,
Ryffel hired Steve Hanson (Hanson) as a general contractor to oversee the building and
logging work the project would require. Hanson is an experienced builder of custom log
homes. Ryffel’s testimony reflects that, overall, he wanted to cut only the trees necessary
to build a road on the property to the home, the trees to build the home itself, thin those
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trees that then remained on the property, clear those trees that were dead and fallen, and
then preserve specimen trees greater than 24 inches in diameter. To those ends, some
trees were specially marked for use as house logs in the upcoming construction of the
Ryffel Partnership residence on the property.
¶5 Bob Kammers (Kammers) is one of the owners of Alpine Construction. Seeking
the potentially substantial logging business on the Ryffel Partnership property, Kammers
met Hanson through a mutual acquaintance, Scott Cooper (Cooper). Cooper, Kammers,
and Hanson all gathered on the Ryffel Partnership property in January of 2007, and
discussed the job. Hanson hired Alpine for logging work on the property: logs were to
be delivered to the upper landing where the house would be built, and the thinning would
have to be done within parameters, i.e. no specimen trees greater than 24 inches would be
cut. Hanson hired Alpine in January of 2007. He showed Kammers where the house
logs were and where they should be placed for use in construction.
¶6 Although Hanson could not remember if Kammers gave him a rate sheet for the
work, Cooper and Kammers both testified that the terms of the agreement were for
Alpine to be paid by the hour. Kammers believed that an hourly rate was the only
acceptable payment method under the circumstances because all of the “good logs” were
to be used for the Ryffel Partnership house construction, while all of the “butts, tips, and
crooked logs” were to go to the mill. However, Kammers contended that it was
impossible for him to determine beforehand what should stay on the property, and what
should go to the mill, making it difficult to estimate the labor on a lump sum basis.
Kammers testified that payments from what he took to the mill were to be offset against
5
Alpine’s costs, and that Alpine would charge a flat fee for delivering each load to the
mill. Kammers also testified that Hanson never mentioned the specimen tree restrictions.
¶7 Hanson explained that Alpine performed side jobs as well. According to Hanson,
Alpine hauled materials and equipment, and cleared snow and ice from the property’s
road to ensure timely deliveries of material and the safe traversal of workers constructing
the house. Alpine also cleared trees along the road, and hauled logs that would later
serve as trusses for the home. Alpine’s work on the road was frequent, as the road was
cleared of materials every time someone needed to travel upon it—at least once or twice
per day. Alpine also backfilled around the house’s foundation.
¶8 Alpine sent an invoice dated February 4, 2007, to Ryffel and Hanson for road
work. The invoice billed an hourly rate, which Ryffel and Hanson testified was
acceptable, because the road work was considered “side work.” Alpine sent another
invoice for hourly work on March 1, 2007, for building a de-barker. Ryffel testified that
this too was considered side work. Ryffel stated that he received several such invoices,
dated between May and September, 2007, for hourly labor and equipment.
¶9 Ryffel questioned the fairness of one of those invoices for $97,000 and so asked
Kammers to meet to discuss it. This meeting would form the basis of the parties’ second
agreement. At that meeting in September 2007, Kammers and Ryffel discussed the
invoices accrued so far, and attempted to concur on the terms of their agreement going
forward. Ryffel was concerned in part, because there was no set agreement between
Ryffel Partnership and Alpine concerning a rate for the logging work. Hanson was
convinced that Alpine was not to be paid an hourly rate for logging, a fact supported by
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Ryffel Partnership’s expert witness who believed that an hourly rate for logging is
unusual in the industry. Ostensibly, under the terms of this second agreement and
according to Kammers, Alpine would now log trees on the ground, haul them to the mill,
deduct the cost of hauling them from the money received at the mill, and then evenly split
the remaining proceeds with Ryffel Partnership. Kammers’ testimony indicated that
Ryffel Partnership’s share of the proceeds was to be applied first to any outstanding
balance owed to Alpine. Kammers also agreed Alpine would no longer bill by the hour.
¶10 Ryffel’s memory of that meeting and the terms of the resulting agreement differed
from Kammers’. In Ryffel’s recollection, he had only agreed to compensate Alpine with
a share of the logging proceeds, not an hourly rate. Additionally, he understood that
Kammers had encountered difficulty removing felled trees from a steep area and so
needed to purchase a line machine. Ryffel testified that he agreed at that meeting to pay
$45,000 for a line machine which Kammers would then use to haul logs from the base of
the knoll for transportation to the mill. Ryffel’s understanding was that Kammers would
then transport the logs to the mill, and proceeds therefrom would be evenly split. This
meeting and agreement, in Ryffel’s view, nullified any past agreements the parties may
have had and that going forward no more trees would be cut on the property at all,
including “specimen trees” on the knoll.
¶11 Ryffel sent Alpine the check for $45,000, along with a letter that attempted to
memorialize the terms of the agreement reached in the September meeting with
Kammers. The letter, never signed by Kammers, stated that “[t]his agreement will
replace any previous agreements or invoices.” However, the letter was cursory for a
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document purporting to replace a timber harvesting agreement and a series of past
invoices. The only definite term the letter addressed was that 50% of any log sale was to
be forwarded to Ryffel’s office, and even that term was hobbled by a vague description of
what logs were to be included as part of the deal. Although the letter confirmed that the
check for $45,000 was enclosed, it did not specify any use for the funds—no line
machine was mentioned. The letter presented no other terms or significant details and
was in fact only six sentences long, including the sentence about enclosing the check.
¶12 Kammers’ testimony differed from Ryffel’s recollection as to these facts regarding
their second agreement. Kammers’ testimony indicated he never told Ryffel he needed a
line machine and he never asked Ryffel for $45,000 to purchase the line machine—Ryffel
offered it. Furthermore, Kammers testified that he did not use the check to purchase a
line machine because he had already purchased one prior to the meeting with Ryffel; the
meeting did not eliminate any prior invoices due because Ryffel Partnership’s balance
due at the time was substantial; and hauling charges were not to come out of Alpine’s
share of the logging proceeds. Thus, according to Kammers, the letter Ryffel sent did not
accurately reflect at all the agreement reached at the meeting.
¶13 Despite the ambiguities, vagaries, and misunderstandings arising out of these oral
agreements, Alpine sent invoices and Ryffel Partnership sent payments. Alpine’s
bookkeeper, Kammers’ wife Shirley Kammers (Shirley), testified at trial to invoices that
were paid and invoices that were left unpaid. She testified that some invoices were paid
in full: an invoice for $6,464.32 and one for $19,746. Also, some payments from the
logging proceeds were applied to Ryffel Partnership’s outstanding running balance: a
8
payment for $6,292.48 and one for $10,005.18. Ryffel Partnership’s account was
similarly credited $27,250 when Alpine needed to purchase equipment from Ryffel
Partnership. Additionally, Alpine applied the check for $45,000 to a series of invoices
with outstanding balances, thereby reducing the total amount Ryffel Partnership owed to
$90,902.20.
¶14 This pattern of work, invoices, credits, and fluctuating balances continued through
the end of September 2007, without any written agreement between the parties, and in
spite of Shirley’s and Kammers’ failed attempts to contact Ryffel via telephone to discuss
his letter. Additionally, the record is devoid of written attempts by Alpine to discuss the
letter: Alpine sent no emails, letters by post, or faxes to clarify or repudiate Ryffel’s
letter. Nevertheless, Alpine continued to log and clear the land, generate invoices, assess
Ryffel Partnership the hauling costs, deduct hauling costs from the logging proceeds, and
apply Ryffel Partnership’s share of those proceeds toward invoices which remained
outstanding. In the end, Shirley’s testimony reflected that, after she had applied all of the
logging credits, Ryffel Partnership’s account still had a balance due of $49,281.12, which
Ryffel Partnership never paid. After Alpine applied finance charges through April of
2008, the amount totaled $50,348.18. In contrast, by calculation of Ryffel Partnership’s
expert, Alpine owed Ryffel Partnership $41,105.88 from the sale of the logs.
¶15 The misunderstandings and nebulous terms of these oral agreements culminated in
the instant suit when Ryffel and his family visited the property in December of 2007, for
Christmas. Ryffel was appalled to see that the specimen trees on the knoll, which in his
remembrance had been specifically protected, were now gone from the property. Hanson
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testified that he had not authorized Kammers to cut them, but Kammers did not think he
needed Hanson’s authorization to do so. Kammers also believed that the logging plan
had changed under the oral agreement in September, which Ryffel’s letter had attempted
to memorialize. Kammers’ memory at trial was that the line machine’s whole purpose
was to remove trees from the steep downslope of the knoll, and that regardless, many of
those specimen trees had already been removed prior to the September meeting with
Ryffel. Whatever the reason for it, Kammers admitted he was the one who had removed
them.
¶16 In the trial that followed, the jury was instructed to find whether either of the
parties had breached either of two oral contracts between Alpine and Ryffel Partnership,
through its representative officer, Ryffel—one agreement arising from the initial meeting
of Kammers, Hanson, and Ryffel in January of 2007; and one from the meeting in
September of 2007 between Kammers and Ryffel. The jury was also tasked with
deciding whether either party had been unjustly enriched, and to what extent, if any, the
parties had suffered damages from either a breach of contract or unjust enrichment. The
jury found in favor of Alpine—that Ryffel Partnership had breached both its January and
September, 2007 oral contracts, but that Alpine should be awarded no damages for either
breach. However, the jury also found that Ryffel Partnership had been unjustly enriched
by accepting work done by Alpine on its property, for which it did not provide
compensation. For that unjust enrichment, the jury awarded $50,348.18, the same sum
reflected in Alpine’s books after finance charges were added, as of April 2008. Last, the
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jury found that Ryffel Partnership had breached the implied covenant of good faith and
fair dealing, for which the jury awarded $25,000 in damages.
¶17 After the jury rendered its verdict, Alpine filed a motion under M. R. Civ. P. 59
and 60 to amend the judgment to include pre-judgment interest, upon which the trial
court did not act, and so was deemed denied. On October 8, 2015, Ryffel Partnership
filed its own Rule 59 Motion for new trial, or alternatively, amendment of the judgment.
Ryffel Partnership contended that the jury’s award of damages for unjust enrichment,
coupled with a finding that both oral contracts were breached, constituted manifest legal
error, since breach of contract and unjust enrichment are mutually exclusive theories of
recovery. The District Court, acknowledging that breach of contract and unjust
enrichment are incongruous findings in the same judgment, denied Ryffel Partnership’s
request for a new trial or elimination of the award, but amended the jury’s verdict by
assigning the $50,348.18 in damages awarded for unjust enrichment to the finding for
breach of contract. The court also vacated the jury’s award of $25,000 for breach of the
implied covenant of good faith and fair dealing, as it would have been an impermissible
double recovery for Alpine and unsupported by any evidence of additional damages
suffered.
¶18 Ryffel Partnership appeals, alleging that the District Court erred by denying the
motion for a new trial and that the jury’s verdict regarding the parties’ second agreement
was not supported by substantial evidence. Alpine asks this Court to affirm the District
Court’s denial of a new trial and cross-appeals, alleging that the trial court erred by
11
denying Alpine’s motion after trial for pre-judgment interest pursuant to § 27-1-211,
MCA.
STANDARDS OF REVIEW
¶19 This Court reviews a district court’s order to grant or deny a new trial for manifest
abuse of discretion. Armstrong v. Gondeiro, 2000 MT 326, ¶ 17, 303 Mont. 37, 41, 15
P.3d 386, 389. To overturn the ruling of the lower court, the abuse of discretion must
materially affect the substantial rights of the complaining party. Lopez v. Josephson,
2001 MT 133, ¶ 16, 305 Mont. 446, 449, 30 P.3d 326, 329.
¶20 A district court’s denial of a motion to amend pursuant to M. R. Civ. P. 59 is
reviewed for an abuse of discretion. Lee v. USAA Cas. Ins. Co., 2001 MT 59, ¶ 27, 304
Mont. 356, 362, 22 P.3d 631, 636. “The test for abuse of discretion is whether the trial
court acted arbitrarily without employment of conscientious judgment or exceeded the
bounds of reason resulting in substantial injustice.” Lee, ¶ 27 (citation omitted).
¶21 A denial of prejudgment interest is a question of law, which we review to
determine if the district court’s interpretation is correct. Ramsey v. Yellowstone
Neurosurgical Assocs., P.C., 2005 MT 317, ¶ 18, 329 Mont. 489, 125 P.3d 1091.
DISCUSSION
¶22 1. Whether the jury’s verdict regarding the parties’ second agreement was
supported by substantial evidence.
¶23 Ryffel Partnership filed a Motion for New Trial or Amendment of Judgment,
arguing that there was insufficient evidence to justify the jury’s damages award of
$25,000 for Ryffel Partnership’s breach of the implied covenant of good faith and fair
12
dealing. The trial court found that this argument had merit because the award would be
an impermissible double recovery for Alpine and, accordingly, granted Ryffel
Partnership’s request that the award be vacated. However, Ryffel Partnership never
asserted that there was not substantial evidence supporting the jury’s determination that
Ryffel Partnership breached the second agreement, nor did it argue waiver or accord and
satisfaction as defenses.
¶24 We have cautioned litigants that this Court strongly recommends that challenges
to a verdict’s lack of evidence be first brought before the district court via post-trial
motions, before reaching us on appeal. D.R. Four Beat Alliance, LLC v. Sierra Prod.
Co., 2009 MT 319, ¶ 46, 352 Mont. 435, 218 P.3d 827. This is a long-standing policy,
which some jurisdictions require as a prerequisite to appeal. Four Beat, ¶ 46 (citing
Napier v. Jacobs, 429 Mich. 222, 414 N.W.2d 862, 864-65 (Mich. 1987); Cecil v. Smith,
804 S.W.2d 509, 510-11 (Tex. 1991); Great Atlantic and Pacific Tea Co., Inc. v. Sealy,
374 So. 2d 877, 880-81 (Ala. 1979); McAdams, Inc. v. Doggett Leasing Co., Inc., 681
S.W.2d 406, 407 (Ark. App. Div. 1 1984). Although this policy is not a requirement in
Montana, such post-trial motions “‘serve as an appropriate first step for contesting an
unfavorable verdict and . . . it would be best to afford the trial court that opportunity to
reevaluate its rulings.’” Four Beat, ¶ 46 (quoting Stauffer Chemical Co. v. Curry, 778
P.2d 1083, 1103-04 (Wyo. 1989). As a result, this Court generally will not address an
issue or new legal theory raised for the first time on appeal. Becker v. Rosebud
Operating Servs., 2008 MT 285, ¶ 17, 345 Mont. 368, 191 P.3d 435 (additional
13
citation omitted). We will not unfairly fault a trial court for failing to rule correctly on an
issue that it was not asked to consider. Becker, ¶ 17.
¶25 We observe also that although Ryffel Partnership did raise a sufficiency of the
evidence argument regarding the jury’s damages award for breach of the covenant of
good faith and fair dealing in its Rule 59 motion, it never argued to the District Court that
there was insufficient evidence to support the jury’s determination that there was a breach
of the second agreement. We cannot conceive of how the issue framed to the trial court
below—a lack of substantial evidence to support a finding of a breach of good faith and
fair dealing—could be considered as a challenge to the sufficiency of the evidence to
support the jury’s verdict that the second agreement was breached by Ryffel Partnership.
Nonetheless, § 25-11-102 (6), MCA, “does invest this Court with the ability to review . . .
challenge[s] to the jury’s verdict on the basis of insufficiency of the evidence.” Four
Beat, ¶ 44. This statute reads in pertinent part:
25-11-102. Grounds for new trial.
The former verdict or other decision may be vacated and a new trial granted
on the application of the party aggrieved for any of the following causes
materially affecting the substantial rights of such party:
. . .
(6) insufficiency of the evidence to justify the verdict or other decision or
that it is against law[.]
¶26 There was sufficient evidence presented for the jury to find Ryffel Partnership
breached the second agreement. An oral contract is enforceable if the four elements of a
contractual agreement are met: (1 ) identifiable parties capable of contracting; (2) consent
of those parties; (3) a lawful object; and (4) sufficient consideration. Section 28-2-102,
14
MCA; Keil v. Glacier Park, Inc., 188 Mont. 455, 460, 614 P.2d 502, 505 (1980). In
making this determination, we must view the evidence in the light most favorable to the
prevailing party. Lee v. Kane, 270 Mont. 505, 511, 893 P.2d 854, 857 (1995). The
prevailing party is entitled to any reasonable inference that can be drawn from the facts.
Sandman v. Farmers Ins. Exc., 1998 MT 286, ¶ 41, 291 Mont. 456, 969 P.2d 277.
¶27 Ryffel and Alpine are identifiable parties capable of contracting and testified that
they reached an agreement when they met in September 2007. Further, logging and other
construction work is a lawful object of a contract. Finally, Ryffel had trees on the
property removed and thinned, in addition to other work being performed. Alpine
received payment for its work. Thus, though the parties disputed its terms, there was
sufficient evidence for the jury to find that all the elements of a contract existed. It was
for the jury to weigh and resolve conflicts in the evidence, to judge the credibility of the
witnesses, and to make factual determinations necessary to render a verdict. Sandman,
¶ 45. The evidence presented to the jury, consisting of both testimony of the parties and
exhibits, was sufficient to support its findings that Ryffel breached the second agreement
and that Alpine was damaged.
¶28 Ryffel Partnership also argues waiver or accord and satisfaction as a basis to
reverse the jury’s breach of contract determination respecting the second agreement.
Ryffel Partnership maintains it argued all along that by cashing the check for $45,000,
Alpine agreed to the terms as represented therein. However, the jury heard evidence
supporting an alternate interpretation of events. By Ryffel’s own testimony, he believed
the check for $45,000 was meant for the purchase of a line machine, not as satisfaction of
15
all prior invoices. Further, Kammers’ cell phone records showed that he had at least once
attempted to contact Ryffel to discuss the letter. Shirley testified, too, that she attempted
to contact Ryffel, but was only able to speak with his secretary. We find this evidence
substantive enough for the jury to have found in favor of Alpine, and to have rejected the
waiver, accord and satisfaction argument Ryffel Partnership now presents on appeal.
¶29 2. Whether the District Court erred in denying Ryffel Partnership’s motion for a
new trial based on an inconsistent or illegal jury verdict.
¶30 A district court may grant a new trial “for any reason for which a new trial has
heretofore been granted in an action at law in Montana state court[.]” M. R. Civ. P.
59(a)(1)(A). A verdict may be vacated and a new trial granted when an aggrieved party’s
substantial rights are affected by a verdict that is against the law. Section
25-11-102(5)-(7), MCA. “When a jury’s verdict is logically impossible and simply
cannot be reconciled with the evidence, argument and legal theories presented at trial, the
constitutional rights of the litigants to a fair trial requires [sic] that a new trial be
ordered.” Four Beat, ¶ 46. An irreconcilability of evidence, argument, and legal theory
is rare, however, and will be found only in very limited circumstances. Four Beat, ¶ 46.
¶31 Four Beat exemplifies those infrequent circumstances. In Four Beat, Four Beat
and Sierra—parties who were seeking to develop prospects for the acquisition or
development of oil and gas—operated their venture in part based on a letter. Four Beat,
¶¶ 4-6. The jury found this letter did not constitute a contract between them. Four Beat,
¶ 17. This finding should have defeated Four Beat’s claim, which was “premised solely
upon the assertion that the Letter constituted a contract[.]” Four Beat, ¶ 38. However, the
16
jury also awarded Four Beat $2.5 million for Sierra’s breach of the letter. Four Beat,
¶ 17. Even though there was arguably sufficient evidence for the jury to conclude that
Four Beat suffered those damages as a result of the events contemplated in the letter,
Four Beat could have been entitled to the damages award only if the jury had also found
the letter created a contractual obligation from Sierra to Four Beat. Since the jury had
found the opposite, that no contract existed between them, we reversed and remanded for
a new trial because we found the verdict to be inconsistent, logically impossible, and
incapable of reconciliation with the evidence, argument, and legal theories presented at
trial. Four Beat, ¶ 46. In our analysis, we examined prior case law covering inconsistent
verdicts: Rudeck v. Wright, 218 Mont. 41, 46, 709 P.2d 621, 624 (1985) (affirming the
District Court’s granting of a new trial where the jury’s verdict was totally inconsistent
and contrary to the mandates of the law); Abernathy v. Eline Oil Field Servs., Inc., 200
Mont. 205, 217, 650 P.2d 772, 779 (1982) (“holding that when two conflicting verdicts
are reached from the same evidence, a new trial is required”); Mont. Bank of Red Lodge,
N.A. v. Lightfield, 237 Mont. 41, 49, 771 P.2d 571, 576-77 (1989) (affirming the district
court’s grant of a new trial when the jury findings were inconsistent and the court could
not determine how the jury arrived at its conclusions). Four Beat, ¶ 41. These cases
provide a roadmap for when a court might be willing to either correct a jury’s verdict,
finding it otherwise consistent, or to reverse and remand for a new trial based upon
irreconcilable inconsistencies.
¶32 We have acknowledged certain grounds that will support a Rule 59 motion to alter
or amend a judgment—one of which is to correct manifest errors of law or fact upon
17
which the judgment is based. Nelson v. Driscoll, 285 Mont. 355, 360, 948 P.2d 256, 259
(1997) (citing 11 Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal
Practice and Procedure § 2810.1 (1995)). We note here also that, under Montana law, the
equitable remedy of unjust enrichment is unavailable where there is a legal contract
between the parties. Maxted v. Barrett, 198 Mont. 81, 87, 643 P.2d 1161, 1164 (1982).
¶33 In its Rule 59 Motion, Ryffel Partnership correctly argued that the jury’s
simultaneous finding that Ryffel Partnership had breached two contracts with Alpine,
while also being unjustly enriched by Alpine’s labor, was legally inconsistent. Here,
however, the record reflects that the District Court was able to reconcile the jury’s
findings with established law by reassigning the jury’s finding of damages from unjust
enrichment to breach of contract, while still maintaining the integrity of the jury’s
verdict. Unlike in Four Beat, where no alternative remedial theory for recovery such as
unjust enrichment was advanced, here, the special verdict form proposed two alternatives
for recovery: breach of contract or unjust enrichment. Although unjust enrichment is
only available in the absence of a contract, the jury found that a contract existed; that
Ryffel had breached that contract; that the breach caused Alpine no damages; but that
Alpine suffered damages in the amount of $50,348.18 as a result of Ryffel’s unjust
enrichment. It was not difficult for the trial court, and it is not difficult for us, to discern
how the jury arrived at its conclusions and to correct the verdict’s inconsistency: (1)
Alpine’s books as of 2008 accurately reflected the total of what Ryffel Partnership owed,
that being $50,348.18; (2) that amount constituted the sum total of damages to Alpine
arising out of the obligations created by the agreements between the parties; and (3)
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Ryffel Partnership was either the breaching party, or the party unjustly enriched. The
verdict was therefore reconcilable with the evidence presented at trial and may be
corrected without compromising its integrity. As such, we cannot conclude that the trial
court abused its discretion by amending the verdict and denying Ryffel Partnership’s
request for a new trial.
¶34 3. Whether the District Court erred in denying Alpine’s motion for pre-judgment
interest pursuant to § 27-1-211, MCA.
¶35 When a prevailing plaintiff’s amount of recovery is capable of being made certain
by calculation, that plaintiff is entitled to prejudgment interest under § 27-1-211, MCA.
Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 99, 341 Mont.
33, 55, 174 P.3d 948, 965. There are three requirements under the statute: (1) an
underlying monetary obligation must exist; (2) the amount of recovery must be capable
of being made certain; and (3) the right to recover must vest on a particular day.
Petroleum Tank, ¶ 99 (citing Albers v. Bar ZF Ranch, Inc., 229 Mont. 396, 408, 747 P.2d
1347, 1354 (1987)). When the damages at issue are uncertain or disputed, an award of
prejudgment interest is inappropriate. Petroleum Tank, ¶ 99 (citing Northern Montana
Hosp. v. Knight, 248 Mont. 310, 320, 811 P.2d 1276, 1282 (1991)). “[N]o interest can
run until a fixed amount of damages has been arrived at, either by agreement, appraisal,
or judgment.” Northern Montana Hosp., 248 Mont. at 321, 811 P.2d at 1282 (quoting
Carriger v. Ballenger, 192 Mont. 479, 486, 628 P.2d 1106, 1110 (1981)).
¶36 In Petroleum Tank, we found that certain administrative costs relating to an
environmental cleanup and incurred by an insured as the result of an insurer’s breach of
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the duty to indemnify, should be considered consequential damages because they were
contemplated by both parties at the time the insurance contract was entered into and
would be the natural result of a refusal to indemnify. The terms of the policy were broad
and did not qualify or limit what would be construed as an expense under the policy.
Nonetheless, the policy contemplated that administrative costs incurred from a clean-up
would be covered. Petroleum Tank, ¶¶ 68-71. We held that the insured was not entitled
to prejudgment interest because the amount of damages to which the insured was entitled
was not conclusively determined until the date the jury returned the verdict. Petroleum
Tank, ¶¶ 100-01.
¶37 In Northern Montana Hospital, the hospital sought recovery from an architect for
damages it incurred as the result of design defects and code violations in its newly
constructed facility. Northern Montana Hosp., 248 Mont. at 313, 811 P.2d at 1278. The
hospital presented ample evidence as to its damages, resulting in a jury award of
$1,750,000. Northern Montana Hosp., 248 Mont. at 314, 321, 881 P.2d at 1278, 1282.
However, the jury’s award did not comport with any amount claimed by the hospital at
trial. Northern Montana Hosp., 248 Mont. at 321, 881 P.2d at 1282. We concluded that
the amount awarded could not have vested until the date of the jury’s verdict, and
therefore affirmed the District Court’s denial of prejudgment interest. Northern Montana
Hosp., 248 Mont. at 321, 881 P.2d at 1282.
¶38 Similar to both Northern Montana Hospital and Petroleum Tank, the amount to
which Alpine was entitled was not conclusively determined until the date the jury
returned the verdict. Unlike in Petroleum Tank, here, the terms of the agreement between
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the parties were premised upon oral contracts, one of which comprised solely of a
conversation between the parties. In Petroleum Tank, the contract at least contemplated
through its terms the issues and damages raised in the suit. Here, the terms resulting from
the oral agreements were cursory and the parties disputed each other’s recollection of the
meetings and the concomitant terms of agreement. As a result, the record shows it is
unclear, at best, whether hauling charges to the mill should have been applied to Ryffel
Partnership’s running balance, and if Alpine was to be billing an hourly rate for logging
work instead of a fee for the job. Further, Ryffel disputed that the check for $45,000
enclosed with his letter should have been applied to invoices—he believed it should have
been used to purchase equipment. Those terms were disputed at trial, but each was
supported with credible testimony. As a result, the jury could have reasonably
determined any number of sums as an appropriate award for Alpine. Similar to Northern
Montana Hospital, the jury was in no way bound by a particular amount and could have
decided on nearly any award beyond or below that claimed by Alpine.
¶39 Although the District Court denied Alpine’s motion for prejudgment interest by
inaction, we do not disagree with the result. Uncertainty over the terms of the agreement
and damages meant that the amount of Alpine’s recovery was not certain or capable of
being made certain by calculation. Alpine’s claim for prejudgment interest thus fails to
meet the requirements of § 27-1-211, MCA, and we affirm denial of the motion below
accordingly.
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CONCLUSION
¶40 The judgment of the District Court and its order entered pursuant to M. R. Civ. P.
59 are affirmed.
/S/ LAURIE McKINNON
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
/S/ BETH BAKER
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