Allegiant Airline v. Aamg Marketing Group

 AAMG, owned by Alfondia Hill, entered into a verbal agreement with
Allegiant wherein Allegiant would carry Westgate's timeshare tour
advertisement on its website. 1 According to the agreement, AAMG would
pay Allegiant $75 for each qualified Allegiant customer who booked a tour
of the Westgate timeshares through Allegiant's website during the test
period. The agreed upon duration of the test period was 30 days, and
AAMG sought to yield a profitable test period in the interest of securing a
long term relationship.
At the end of the 30-day test period, the Westgate timeshare
advertisement remained on Allegiant's website without further agreement
between the parties to enter into a long term relationship. Overall,
Allegiant carried the Westgate advertisement on its website for one year,
from September 2009 to September 2010. Hill testified that Westgate
paid AAMG $350 for each tour it secured during that year. Allegiant
earned $5,527 from hosting the timeshare advertisement, but this amount
was significantly less than the $720,000 to $7.2 million 2 AAMG claimed
Allegiant could net annually. In September 2010, with the test period
proving to be much less profitable than projected, Allegiant replaced
Westgate's timeshare advertisement with a timeshare advertisement for
Wyndham Vacation Resorts, Inc. (Wyndham).
'The advertisement offered qualified Allegiant customers free gifts if
they agreed to participate in a 90-minute presentation and take a tour of
the Westgate timeshares.
2 Hill
provided this estimate based on the initially proposed rate of
$100 per tour.
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Subsequently, AAMG filed suit against Allegiant and
Wyndham, alleging numerous causes of action. Wyndham settled shortly
before trial, but AAMG's claims against Allegiant for fraudulent
misrepresentation, tortious interference, and unjust enrichment,
continued to trial. At the close of evidence, Allegiant moved for judgment
as a matter of law, which the district court denied. A jury found Allegiant
liable for unjust enrichment, and awarded AAMG $800,000 in future
damages. The district court then denied Allegiant's motion for judgment
notwithstanding the verdict or a new trial.
DISCUSSION
Pursuant to NRCP 50(a), the district court may grant a motion
for judgment as a matter of law if the nonmoving party fails "to prove a
sufficient issue for the jury, so that his claim cannot be maintained under
the controlling law." Nelson v. Heer, 123 Nev. 217, 222, 163 P.3d 420, 424
(2007) (internal quotation marks omitted). If a party moves for judgment
as a matter of law at the close of evidence under NRCP 50(a) and the
motion is denied, the movant may renew the motion after the entry of
judgment under NRCP 50(b). Id. at 223, 163 P.3d at 424. When
considering a motion for judgment as a matter of law, "the district court
must view the evidence and all inferences in favor of the nonmoving
party." Id. at 222-23, 163 P.3d 424. On review, this court applies the
same standard as the district court. Id. at 223, 163 P.3d at 424. Thus, the
standard of appellate review for an order under either NRCP 50(a) or
50(b) is de novo. Id. at 223, 163 P.3d at 425. Statutory interpretation is a
question of law, which we also review de novo. Banks ex rel. Banks v.
Sunrise Hosp., 120 Nev. 822, 846, 102 P.3d 52, 68 (2004). However, we
review the district court's denial of Allegiant's motion for a new trial for an
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abuse of discretion. Langon v. Matamoros, 121 Nev. 142, 143, 111 P.3d
1077, 1078 (2005).
Nevada Uniform Trade Secrets Act
Allegiant contends that AAMG's common law unjust
enrichment claim is precluded by the Nevada Uniform Trade Secrets Act
(NUTSA) because the unjust enrichment claim is based on
misappropriation of trade secrets. Under NRS Chapter 600A, governing
trade secrets, NRS 600A.090 sets out the effect of the chapter on other
laws and remedies, providing:
1. Except as otherwise provided in subsection 2,
this chapter displaces conflicting tort,
restitutionary, and other law of this state
providing civil remedies for misappropriation of a
trade secret.
2. This chapter does not affect:
(b) Other civil remedies that are not based
upon misappropriation of a trade secret. . . .
(Emphases added).
Despite Allegiant's assertion of preclusion, we conclude that
NRS 600A.090's plain language does not bar AAMG's unjust enrichment
claim. See Erwin v. State, 111 Nev. 1535, 1538-39, 908 P.2d 1367, 1369
(1995) ("Where the language of a statute is plain and unambiguous . . . the
courts are not permitted to search for its meaning beyond the statute
itself." (internal quotation marks omitted)). AAMG voluntarily dismissed
its misappropriation claim, and therefore, there was no NRS 600A.090
claim with which the unjust enrichment claim could conflict. Moreover,
the statute explicitly provides that it does not affect other civil remedies
that are not based on misappropriation. We conclude, after review of the
record, that AAMG's unjust enrichment claim is not sufficiently based
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upon misappropriation of a trade secret to justify its preclusion. We
further note that this analysis is consistent with our decision in Frantz v.
Johnson, 116 Nev. 455, 465, 999 P.2d 351, 357-58 (2000) (applying NRS
600A.090 and concluding that error existed where the district court relied
on numerous tort and restitutionary causes of action excluded by the
statute, as they all related to misappropriation of a trade secret).
Unjust Enrichment
"When a plaintiff seeks 'as much as he. . . deserve[s]' based on
a theory of restitution . . . he must establish each element of unjust
enrichment." Certified Fire Prot. Inc. v. Precision Constr., 128 Nev., Adv.
Op. 35, 283 P.3d 250, 257 (2012) (alteration in original) (quoting Black's
Law Dictionary 1361 (9th ed. 2009)). "Unjust enrichment exists when the
plaintiff confers a benefit on the defendant, the defendant appreciates
such benefit, and there is acceptance and retention by the defendant of
such benefit under circumstances such that it would be inequitable for
him to retain the benefit without payment of the value thereof." Id.(internal quotation marks omitted).
According to AAMG, it conferred a benefit on Allegiant
through its services implementing the timeshare marketing plan. "Benefit
in the unjust enrichment context can include services beneficial to or at
the request of the other, denotes any form of advantage, and is not
confined to retention of money or property." Id. (internal quotation marks
omitted). Here, the evidence adduced at trial, viewed in the light most
favorable to the nonmoving party, demonstrates that at least two benefits
were conferred on Allegiant: $75 for each customer booking, and
knowledge of the timeshare industry. Thus, we agree with AAMG that it
conferred a benefit on Allegiant.
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AAMG also argues that Allegiant appreciated such benefit by
taking AAMG's knowledge of the timeshare industry and continuing to
utilize the timeshare marketing program. To appreciate a benefit, the
party must have knowledge of the benefit. Dragt v. Dragt/DeTray, LLC,
161 P.34 473, 482 (Wash. Ct. App. 2007). As illuminated by emails
between Allegiant's personnel, Allegiant would enter into the agreement
with AAMG only if it stood to gain ample payment for providing access to
its customer database. Viewed in the light most favorable to AAMG,
Allegiant's subsequent limited agreement to conduct business with AAMG
indicates its knowledge or appreciation that it would be receiving the
benefit of AANIG's savvy about the timeshare industry, in addition to the
negotiated price of $75 for each qualifying customer who booked a tour.
Hence, Allegiant appreciated the benefit. However, our review does not
end there.
Additionally, AAMG argues that the circumstances under
which the benefit was appreciated were inequitable because Allegiant
intentionally or inadvertently failed to inform AA.MG that it was not going
to enter into a long-term relationship. We disagree. "[Q]uantum meruit to
avoid unjust enrichment applies 'when a party confers a benefit with a
reasonable expectation of payment." Certified Fire Prot., 128 Nev., Adv.
Op. 35, 283 P.3d at 257 (quoting 26 Samuel Williston & Richard A. Lord, A
Treatise on the Law of Contracts § 68:1, at 24 (4th ed. 2003)). Here,
AAMG had no reasonable expectation of payment from Allegiant. More
appropriately, and conversely, Allegiant had an expectation of payment
from AAMG. In turn, AAMG had an expectation of payment from
Westgate, which, as conceded by Hill at trial, AAMG received.
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We additionally reject AAMG's assertion that Allegiant was
required to notify AAMG that it did not plan to enter into a long-term
relationship. When a benefit is conferred without demonstrating an
expectation of compensation, a sought-after, but unrealized long-term
relationship does not justify an award of restitution for the benefit
conferred, unless, of course, the conferral was conditioned upon entering
into a long-term relationship. 26 Samuel Williston & Richard A. Lord, A
Treatise on the Law of Contracts § 68:5, at 69 (4th ed. 2003). Thus, the
onus belonged to AAMG. However, AAMG failed to demonstrate an
expectation of compensation from Allegiant, and did not condition the
benefit conferred upon a long-term relationship. Moreover, AAMG's
proposal anticipates the possibility that Allegiant would decide not to
enter into a long-term relationship, describing the test period as a time to
consider the merits or viability of a long-term relationship. Accordingly,
although Allegiant received and appreciated a benefit, the acceptance and
retention thereof did not occur under inequitable circumstances.
Thus, even when viewing the facts in a light most favorable to
AAMG, all elements of unjust enrichment were not met. Accordingly, the
district court erred by denying Allegiant's motions for judgment as a
matter of law. Based on the foregoing, we
ORDER the judgment of the district court REVERSED
01--C , n.
Parraguirre
LAS"
Douglas
J.
Cherry
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cc: Hon. Gloria Sturman, District Judge
Lansford W. Levitt, Settlement Judge
Fennemore Craig, P.C./Phoenix
Fennemore Craig Jones Vargas/Las Vegas
Goodman Law Group
Stovall & Associates
Alexander R. Arpad
Eighth District Court Clerk
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