Jones v. MacKey Price Thompson & Ostler

This opinion is subject to revision before final
publication in the Pacific Reporter
2015 UT 60IN THE
SUPREME COURT OF THE STATE OF UTAH
GREGORY N. JONES,
Appellant,
v.
MACKEY PRICE THOMPSON & OSTLER, 1
Appellees.
No. 20130135
Filed July 28, 2015
Third District, Salt Lake
The Honorable Anthony B. Quinn
No. 060911956
Attorneys:
James D. Gilson, J. Tayler Fox, Salt Lake City, for appellant
Thomas R. Karrenberg, Salt Lake City, for appellees Mackey Price
Thompson & Ostler, Randall A. Mackey, and Gifford W. Price
Blake T. Ostler, Salt Lake City, for appellees C. Jeffrey Thompson,
Russell C. Skousen, Thompson & Skousen, L.L.C.,
and Russell C. Skousen, L.L.C.
CHIEF JUSTICE DURRANT authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE LEE, JUSTICE DURHAM, JUSTICE PARRISH, and
JUDGE LAWRENCE joined.
Due to his retirement, JUSTICE NEHRING did not participate herein;
THIRD DISTRICT JUDGE BARRY G. LAWRENCE sat.
JUSTICE DENO G. HIMONAS became a member of the Court on
February 13, 2015, after oral argument in this matter, and
accordingly did not participate.
1Randall A. Mackey, Gifford W. Price, C. Jeffrey Thompson, Russell
C. Skousen, Thompson & Skousen, L.L.C., Jeffrey Thompson, L.L.C.,
and Russell C. Skousen, L.L.C.
JONES v. MACKEY PRICE
Opinion of the Court
CHIEF JUSTICE DURRANT, opinion of the Court:
Introduction
¶1 This case arises out of a dispute over compensation paid to
an attorney, Gregory Jones, by the law firm Mackey Price Thompson
& Ostler (Mackey Price) for work Mr. Jones performed on several
class-action contingency fee cases involving the weight-loss pill Fen-
Phen. Mr. Jones worked on the Fen-Phen cases from 2002 to May 26,
2005, when he abruptly developed a mental disability called
dissociative amnesia, which prevented him from remembering
anything prior to that date. This disability also prevented him from
continuing to work on the Fen-Phen litigation. The Fen-Phen cases
eventually generated $1,060,869.20 in fees, and Mr. Jones was paid
$165,000 (or around 15 percent) of these fees.
¶2 Mr. Jones claims that he and Mackey Price agreed that the
general Compensation Agreement (which entitled Mr. Jones to 80
percent of the fees he generated from hourly work after payment of
his overhead) would apply to the fees generated by the Fen-Phen
litigation. In the alternative, he argues under quantum meruit that
Mackey Price and additional Defendants were unjustly enriched by
his work. Finally, Mr. Jones claims that a second law firm that
worked on the Fen-Phen litigation and received a portion of the fees,
Thompson & Skousen, is liable to him under Utah’s Fraudulent
Transfer Act as recipients of the disputed funds.
¶3 Mr. Jones appeals a series of decisions by the district court.
First, he appeals the district court’s dismissal of his contract claim on
summary judgment. Second, he appeals the district court’s decision
to deny his jury demand on his quantum meruit claim. Third, he
challenges the district court’s measure of damages under his
quantum meruit claim. Finally, he appeals the district court’s
decision to dismiss his quantum meruit and Fraudulent Transfer Act
claims against the individual Defendants.
¶4 We uphold the district court’s dismissal of Mr. Jones’s
contract claim. Mr. Jones claimed that he and Mackey Price had
agreed that the Compensation Agreement would govern the Fen-
Phen fees. Mackey Price moved for summary judgment on this
claim, arguing that it was undisputed that no such agreement was
reached. Mackey Price directed the court to evidence supporting this
assertion and in response, Mr. Jones failed to present affirmative
evidence demonstrating a genuine issue of fact for trial regarding
this claim. Accordingly, we affirm the district court’s dismissal of
Mr. Jones’s contract claim.
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¶5 We reverse the denial of Mr. Jones’s jury demand because at
the time of the ratification of the Utah Constitution a claim for
money damages under quantum meruit was a claim at law, not in
equity. In sending the claim back to the jury, we clarify that the
correct measure of damages for the contract-implied-in-law branch
of a quantum meruit claim is the benefit conferred. Finally, we
uphold the district court’s dismissal of the individual Defendants
from both the quantum meruit claim and the Fraudulent Transfer
Act claim.
Background
¶6 Mr. Jones began working for Mackey Price in 1991. Over the
next ten years Mackey Price paid him a salary based on the number
of hours he billed. The lone exception to this arrangement was a
personal-injury contingency fee case that he originated. In January
2001, Mr. Jones and Mackey Price began experimenting with
different compensation arrangements to accommodate his health
problems. Finally, in 2002, they agreed to the following
Compensation Agreement: the first $4,000 in legal fees generated by
Mr. Jones would go to Mackey Price to cover a portion of Mr. Jones’s
overhead; the next roughly $2,000 would be split fifty-fifty to cover
the remaining overhead; and once all the overhead was paid for the
current month and all previous months, Mackey Price would retain
20 percent of all fees generated by Mr. Jones and he would receive
the remaining 80 percent. Although the Compensation Agreement
was never reduced to writing, it governed compensation for Mr.
Jones’s hourly work until he left the firm in May 2005.
¶7 The litigation that spawned the fee dispute between
Mr. Jones and Mackey Price related to the diet drug fenfluramine
and dexfenfluramine—known as Fen-Phen. In early 2002, C. Jeffery
Thompson and Russell C. Skousen, partners at the law firm
Thompson & Skousen, began supervising and managing the Fen-
Phen case program. 2 As part of this program, Thompson & Skousen
set up a client-referral program, located physicians and other Fen-
Phen experts, arranged for financing of litigation costs, and arranged
for clients to receive the medical testing necessary to demonstrate
injury from the drug. They also established relationships with
attorneys in other states to help facilitate the litigation.
2Mr. Thompson and Mr. Skousen were also associated with Mackey
Price, but they operated Thompson & Skousen as a separate entity.
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JONES v. MACKEY PRICE
Opinion of the Court
¶8 Mr. Thompson and Mr. Skousen presented Mackey Price’s
attorneys with the opportunity to work on the Fen-Phen cases. Later,
Thompson & Skousen reached an agreement with Mackey Price
regarding how the firms would split the fees. Under this agreement,
Mackey Price attorneys were to be paid from Mackey Price’s
percentage of the fees.
¶9 In 2002, Mr. Jones decided to work on the Fen-Phen cases
and began contacting medical practitioners to find clients. He
enlisted Rebekah Brown, a Mackey Price employee, to help him
locate potential clients. Ms. Brown cold-called Dr. Poulsen, who
entered into a services agreement with the law firm Thompson &
Skousen. This agreement provided that Dr. Poulsen’s patients could
receive an echocardiogram test and cardiologist evaluation paid for
by the firm. While Mr. Thompson ultimately negotiated the service
agreement with Dr. Poulsen, Mr. Jones did much of the other work,
including meeting with clients from Dr. Poulsen’s office, assisting
with their medical testing, and helping them fill out the paperwork
to submit their claims.
¶10 Mr. Jones also contacted various diet centers located in
Georgia and paid for some of the expenses he incurred to travel
there for meetings. He performed much of the work associated with
entering into agreements with the diet centers and he arranged to
have their patients receive medical testing. 3 Thompson & Skousen
made arrangements with two law firms, Armstrong & Guy and
Thach & Thach, to manage the cases for the Georgia patients. To
assist those firms with the Georgia cases, Mr. Jones advanced $6,000
in personal funds and borrowed approximately $167,000 from his
neighbor at an interest rate of 30 percent per annum to help cover
litigation costs. He did not inform Mackey Price that he was funding
the Georgia cases. Finally, Mr. Jones also performed a large amount
3 The district court’s finding of facts from the bench trial
contradicted Mr. Jones’s version of the facts on this point. The court
found that, while Mr. Jones made the initial contact, Mr. Thompson
and Nancy Armstrong, a partner at the law firm Armstrong & Guy,
flew to New Orleans and Georgia to negotiate and consummate the
service agreements. The court also found that Mr. Jones “had no
contract with the clients in Georgia.”
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of work on eight cases that originated from the medical offices of
Dr. Brown. 4
¶11 The facts regarding Mr. Jones’s compensation are central in
this appeal. Initially, Thompson & Skousen proposed that Mackey
Price pay him 40 percent of the fees generated from the cases he
originated. Following these discussions, Mr. Thompson told
Mr. Jones that Mackey Price would pay him 40 percent of fees on
cases he originated. But approximately six weeks later, Mackey Price
adjusted the fee percentages between it and Thompson & Skousen
and requested that Mr. Thompson stop discussing Mr. Jones’s
compensation because he was an employee of Mackey Price, not
Thompson & Skousen. Mr. Thompson later told Mr. Jones that
Mackey Price did not agree to pay him 40 percent, and he urged Mr.
Jones, on multiple occasions, to negotiate his compensation with
Mackey Price.
¶12 During a discussion Mr. Jones had with Gifford Price, a
shareholder of Mackey Price, Mr. Jones mentioned his
understanding that he would be paid 40 percent of the fees on the
cases he originated. Mr. Price changed the subject and would not
discuss the compensation issue further. Both Mr. Price and Randall
Mackey, another shareholder at Mackey Price, testified that no
agreement was reached with Mr. Jones regarding the Fen-Phen
cases.
¶13 Mr. Jones regularly had lunch with Jeffrey Olsen, another
associate at Mackey Price. According to Mr. Olsen, Mr. Jones told
him, on multiple occasions, that he had not yet worked out an
agreement with Mackey Price regarding his compensation from the
Fen-Phen cases. Mr. Olsen testified that he encouraged Mr. Jones to
finalize a compensation structure with Mackey Price.
¶14 Mr. Jones also discussed his compensation with the
neighbor who lent him the money for the Georgia cases. The
neighbor testified that Mr. Jones initially indicated that he, Mr. Jones,
4There is a dispute as to who originated these claims. Mr. Jones’s
argument is founded on the deposition testimony of Rebekah Brown,
who simply states that it was her impression that the Dr. Brown
cases were developed from the Dr. Poulsen cases. At trial, the district
court ultimately found that Mr. Jones had “absolutely no
responsibility for and nothing to do with the Dr. Brown category of
cases.”
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JONES v. MACKEY PRICE
Opinion of the Court
would receive 40 percent of the fees generated from the cases, but
that he later indicated he would receive less than 40 percent.
¶15 On February 12, 2005, over two years after he began
working on the Fen-Phen cases, Mr. Jones made a hand-written
memorandum concerning his compensation. In it he recounted the
conversation he had with Mr. Price about his compensation:
Finally [Mr. Price] met w/me and tried to open up the
issue by saying ‘we need to discuss what to do with the
60% that does not go to [Thompson & Skousen].’ I
responded that all I knew is that I got 40% and did not
care what the other arrangements were.
After recounting his discussion with Mr. Price, Mr. Jones
wrote:
Split w/firm of Phen work – after overhead paid is 10%
to originator 80% to me 10% to firm. Usually meant
firm got 20% b/c firm [Gifford Price and Randall
Mackey] originated. If this is how Phen treated, then I
get 80%, not 40%. Bottom line: If not 40%, then 80%[.] If
not 80% then 50%.
¶16 On May 26, 2005, only a few months after writing the
memorandum, Mr. Jones abruptly developed a mental disability
called dissociative amnesia, which prevented him from
remembering anything prior to that date. His condition persists to
this day. Due to this condition, he stopped working for Mackey
Price. The legal work on Mr. Jones’s Fen-Phen cases was
substantially completed before he became disabled. 5
¶17 In June 2006, Mackey Price received approximately
$1,060,869.20 for the Fen-Phen cases that Mr. Jones had worked on,
which it deposited in its trust account. Mr. Jones filed suit on July 19,
2006, naming Mackey Price, Thompson & Skousen, Mr. Mackey,
Mr. Price, Mr. Thompson, Mr. Skousen, Russell C. Skousen, L.L.C.,
and C. Jeffery Thompson, L.L.C. as defendants. About one month
after the lawsuit was filed, Mackey Price gave Mr. Jones less than
two days’ notice that it was distributing a portion of the fees. Then,
about four months later, Mackey Price informed Mr. Jones that the
5There is a dispute of fact between the parties as to whether any
work remained on the Fen-Phen cases. At trial, the district court
found that there was substantial work remaining, including checking
and rechecking client files and reclassifying various clients’ claims.
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rest of the fees were being distributed. From the total of $1,060,869.20
in fees Mackey Price received, it distributed $165,000 to Mr. Jones,
approximately $400,000 to Thompson & Skousen, and around
$175,000 each to Mr. Mackey and Mr. Price, with the remainder
going to Mackey Price and its creditors. 6 After these distributions
took place, Mr. Jones amended his complaint to assert seven causes
of action, including a claim that Mackey Price breached a contract
not to distribute the Fen-Phen fees from the firm’s trust account
without providing him advanced notice.
¶18 The Defendants filed motions for partial summary judgment
on several of the claims in Mr. Jones’s amended complaint, including
his contract claim against Mackey Price, his claim against all
Defendants for quantum meruit, and his claim against all
Defendants for fraudulent transfer. In its motion for summary
judgment, Mackey Price argued that it was undisputed that it and
Mr. Jones never agreed that the general Compensation Agreement
would govern the fees from the Fen-Phen litigation. Mackey Price
directed the court to evidence supporting this assertion. In response,
Mr. Jones failed to present affirmative evidence demonstrating a
genuine issue of material fact for trial regarding this claim. Thus, the
district court granted Mackey Price’s summary judgment motion.
The court also dismissed his quantum meruit claim against all
Defendants on summary judgment, except Mackey Price, holding
that Mackey Price was the only Defendant that directly benefited
from Mr. Jones’s work. And finally, the court dismissed Mr. Jones’s
Fraudulent Transfer Act claims against all Defendants on summary
judgment, except Mackey Price, Mr. Mackey, and Mr. Price. The
court concluded that the uncontroverted material facts showed that
the distributions to Thompson & Skousen were made in good faith,
and that Thompson & Skousen was a good faith creditor of Mackey
Price.
¶19 Before trial on the remaining quantum meruit and
Fraudulent Transfer Act claims, Mackey Price moved to strike
Mr. Jones’s request for a jury trial on his quantum meruit claim and
to bifurcate the trial, with the quantum meruit claim being tried first
to the court. The court granted the motion, holding that quantum
meruit was an equitable claim, and was, accordingly, not a claim for
which a plaintiff may demand a jury trial.
6 In July 2004, Mr. Jones also received $50,000 directly from
Thompson & Skousen as part of a Mackey Price client’s settlement.
Mr. Jones did not disclose this payment to Mackey Price.
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JONES v. MACKEY PRICE
Opinion of the Court
¶20 During the bench trial on his quantum meruit claim,
Mr. Jones argued that the proper measure of damages is the benefit
conferred upon the Defendants as a result of his work, not the
reasonable value of the services he provided. The court disagreed
and required Mr. Jones to show that the reasonable value of his
services exceeded the amount Mackey Price paid him. Ultimately,
the court concluded that he failed to establish that he provided
services worth more than the $215,000 he received from the Fen-
Phen fees. 7
Standard of Review
¶21 Mr. Jones raises several issues on appeal. First, he argues the
district court erred in granting Mackey Price’s motion for summary
judgment on his breach of contract claim. “We review the district
court’s rulings on summary judgment motions for correctness.” 8
¶22 Second, he argues the district court improperly denied his
jury demand on his quantum meruit claim. Generally, “[w]hether
there is a right to a jury trial is a question of law that we review for
correctness.” 9 But we have stated that “[i]n circumstances where
doubt exists as to whether the cause should be regarded as one in
equity, or one in law,” “[u]nless it is shown that the ruling
[determining the equitable or legal nature of the issue] was patently
in error or an abuse of discretion, this court will not interfere with”
the district court’s decision. 10 After reviewing this issue anew,
however, we conclude that the legal-equitable distinction in the
context of a jury demand is an abstract legal question. 11 The district
7 This figure includes the $165,000 that Mackey Price paid
Mr. Jones from the Fen-Phen proceeds and the $50,000 that
Thompson & Skousen paid Mr. Jones. It is disputed whether the
Thompson & Skousen payment was actually a payment or merely a
loan.
8 Prince, Yeates & Geldzahler v. Young, 2004 UT 26, ¶ 10, 94 P.3d 179(internal quotation marks omitted).
9 Failor v. MegaDyne Med. Prods., Inc., 2009 UT App 179, ¶ 9, 213
P.3d 899.
10 Sweeney v. Happy Valley, Inc., 417 P.2d 126, 128−29 (Utah 1966).
11 See Manzanares v. Byington (In re Baby B.), 2012 UT 35, ¶¶40−41,
308 P.3d 382 (discussing the distinction between findings of facts—
where “the lower court often has a competitive advantage in its
firsthand access to factual evidence” and conclusions of law—where
(continued . . .)
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court is in no better position than we are to ascertain the nature of
the rights asserted and the remedies sought or to conduct a historical
analysis of a claim’s equitable or legal nature at the time of the
ratification of the Utah Constitution. We therefore review the district
court’s decision for correctness.
¶23 Third, Mr. Jones argues the district court improperly
bifurcated the trial by trying his quantum meruit claim to the bench
prior to trying his fraudulent transfer claim to a jury. “Rule 42(b) of
the Utah Rules of Civil Procedure gives the trial court ‘considerable
discretion’ to administer the business of its docket and determine
how a trial should be conducted. We will not disturb the trial court’s
bifurcation order unless the trial court abused its discretion.” 12 But
we note that where a district court’s decision to bifurcate the legal
and equitable claims and to try the equitable claims to the court first
has the potential to deny a party a full jury trial on the legal claims,
we will apply a heightened standard of review. 13
¶24 Fourth, Mr. Jones contends that the district court applied the
wrong measure of damages to his quantum meruit claim.
Determining the applicable measure of damages is a legal question,
which we review for correctness. 14
¶25 Finally, he argues that the individual Defendants were
improperly dismissed on summary judgment from his quantum
“the lower court has no comparative advantage in resolving legal
questions”).
12 Walter Drug Co. v. La Sal Oil Co., 972 P.2d 1238, 1244 (Utah 1998)
(citation omitted).
13 See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510 (1959)
(noting that even though the trial court is accorded discretion in
deciding whether the legal or equitable claims should be tried first
“that discretion is very narrowly limited and must, wherever
possible, be exercised to preserve jury trial” “[s]ince the right to jury
trial is a constitutional one”).
14 See Anesthesiologists Assocs. of Ogden v. St. Benedict’s Hosp., 884
P.2d 1236, 1237−38 (Utah 1994) (“[W]e must determine how the law
of damages [applies in this case]. Because we are reviewing only
legal questions, we accord the conclusions of the court below no
particular deference but review them for correctness.”).
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JONES v. MACKEY PRICE
Opinion of the Court
meruit and Fraudulent Transfer Act claims. Again, we review a
district court’s rulings on summary judgment for correctness. 15
Analysis
¶26 Below, we first address Mr. Jones’s contract claim and
uphold the district court’s dismissal of this claim on summary
judgment. Next, we analyze the district court’s denial of Mr. Jones’s
jury demand on his quantum meruit claim. We conclude that he was
entitled to a jury trial because a claim for unjust enrichment seeking
money damages, such as the one Mr. Jones now advances, was a
claim at law at the time of the ratification of the Utah Constitution.
Finally, we review the district court’s decision to dismiss Mr. Jones’s
quantum meruit and Fraudulent Transfer Act claims against the
individual Defendants and uphold this decision.
I. We Uphold the District Court’s Dismissal of
Mr. Jones’s Contract Claim
¶27 The district court dismissed Mr. Jones’s contract claim on
summary judgment. In reviewing a grant of summary judgment we
must determine whether “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact.”16
Summary judgment is appropriate if “reasonable jurors, properly
instructed, would be able to come to only one conclusion.” 17
¶28 Mr. Jones claimed that he and Mackey Price agreed that the
general Compensation Agreement, which had applied to his hourly
work at the firm, would apply to the fees generated in the Fen-Phen
litigation. Mr. Jones had the burden of proof on this claim at trial.
Mackey Price moved for summary judgment on the contract claim.
As the movant on an issue where the nonmoving party bears the
burden of proof at trial, Mackey Price had the initial burden to show
through “reference to the pleadings, depositions, answers to
interrogatories, and admissions on file . . . that there [was] no
genuine issue of material fact” concerning this claim. 18 Mackey Price
15 Prince, Yeates & Geldzahler, 2004 UT 26, ¶ 10.
16 UTAH R. CIV. P. 56(c); see also Clegg v. Wasatch County, 2010 UT
5, ¶ 15, 227 P.3d 1243.
17 Clegg, 2010 UT 5, ¶ 15.
18 Orvis v. Johnson, 2008 UT 2, ¶ 18, 177 P.3d 600 (internal
quotation marks omitted) (“A summary judgment movant, on an
issue where the nonmoving party will bear the burden of proof at
(continued . . .)
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met this burden by setting forth evidence showing it was undisputed
that the parties had not agreed the Compensation Agreement would
govern the Fen-Phen fees. This evidence included Mr. Jones’s
admission that there was no express agreement regarding the
distribution of the Fen-Phen fees, and testimony from Mr. Olsen and
Mr. Jones’s neighbor negating the existence of an agreement.
¶29 Once Mackey Price had successfully met its burden as the
moving party, the burden then shifted to Mr. Jones, “who may not
rest upon the mere allegations or denials of the pleadings, but must
set forth specific facts showing that there is a genuine issue for
trial.” 19 The court granted Mackey Price’s motion, finding that
Mr. Jones had failed to set forth affirmative evidence demonstrating
a genuine issue of material fact as to this claim. We uphold the
district court’s decision and hold that, as a matter of law, the
affirmative evidence Mr. Jones set forth in response to the
Defendant’s summary judgment motion failed to create an issue of
material fact.
¶30 Mr. Jones claims there are two pieces of evidence that create
a genuine issue of material fact regarding his claim that the
Compensation Agreement governed the Fen-Phen fees. He first
points to his February 2005 memorandum, which he claims “set[s]
forth his understanding at the time that, absent an agreement to the
contrary, the Compensation Agreement applied to his Fen-Phen
cases.” Second, he points to the testimony of Rebekah Brown, where
she stated that he was paid under the Compensation Agreement for
a previous contingency fee case. We agree with the district court that
neither of these pieces of evidence creates a genuine issue of material
fact regarding the contract claim.
trial, may satisfy its burden on summary judgment by showing, by
reference to ‘the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any,’ that there
is no genuine issue of material fact. Upon such a showing, whether
or not supported by additional affirmative factual evidence, the
burden then shifts to the nonmoving party, who ‘may not rest upon
the mere allegations or denials of the pleadings,’ but ‘must set forth
specific facts showing that there is a genuine issue for trial.’”(citation
omitted)).
19 Id. (internal quotation marks omitted).
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JONES v. MACKEY PRICE
Opinion of the Court
¶31 In order to create a contract, the parties must have “a
meeting of the minds on the integral features of an agreement.”20
This meeting of the minds requires agreement on the essential terms
of the contract. 21 “So long as there is any uncertainty or
indefiniteness, or future negotiations or considerations to be had
between the parties, there is not a . . . contract.” 22 The evidence
referenced in Mackey Price’s motion for summary judgment shows
there was no meeting of the minds between Mr. Jones and Mackey
Price. And the February 2005 memorandum and Ms. Brown’s
testimony do nothing to create a factual dispute regarding this issue.
¶32 First, the February 2005 memorandum does not reflect a
meeting of the minds, but merely notes a range of possible
compensation scenarios. In the memorandum, written before he lost
his memory, Mr. Jones records his impressions concerning various
conversations he had pertaining to the distribution of the Fen-Phen
proceeds. These notes discuss various fee distribution arrangements
in numbered paragraphs, including “that originator of new cases
would get 50% of attny fees,” that Mr. Jones would get 40 percent of
the attorney fees from two specific cases, and that Mr. Jones had
stated in front of Mr. Price that he got 40 percent and Mr. Price
“never mentioned it again” and “did not dispute my position.” Mr.
Jones then makes note of another arrangement and states that “[i]f
this is how phen [is] treated, then I get 80%, not 40%.” Finally, the
memorandum concludes with the statement, “[b]ottom line: If not
40%, then 80%[;] If not 80% then 50%.”
¶33 When viewed in the light most favorable to the nonmoving
party, the first line of the “bottom line” statement could be read as
consistent with Mr. Jones’s claim that if there was not another
specific agreement regarding Fen-Phen (the 40% agreement), then
the general Compensation Agreement would apply (the 80%/20%
agreement). But there is no way to read the second line as consistent
with his argument. The second line states that if not 80 percent
(which is consistent with the Compensation Agreement) then 50
percent.
20 Prince, Yeates, & Geldzahler v. Young, 2004 UT 26, ¶ 13, 94 P.3d
179 (internal quotation marks omitted).
21 Id.22 Id. ¶ 17 (internal quotation marks omitted).
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¶34 Therefore, this memorandum does not, as Mr. Jones claims,
“set forth his understanding, at the time that, absent an agreement to
the contrary, the Compensation Agreement applied to his Fen-Phen
cases.” Instead, it discusses a range of possible compensation
arrangements and ends with a “bottom line” indicating there was
never an agreement between the parties as to what arrangement
would govern. The February 2005 memorandum—with its list of
various compensation scenarios, and its “bottom line” that names
four different compensation possibilities—did not create a factual
dispute regarding the application of the Compensation Agreement
to the Fen-Phen fees.
¶35 Next, we must consider whether Ms. Brown’s testimony
creates a genuine issue of fact as to whether the parties agreed that
the Compensation Agreement applied to the Fen-Phen fees.
Mr. Jones challenges the district court’s decision to strike Ms.
Brown’s testimony for lack of foundation and claims that her
testimony, if admitted, would have created a genuine issue of
material fact. We uphold the district court’s decision to exclude Ms.
Brown’s testimony. Further, even if the district court erred in
excluding this testimony, such error was harmless because her
testimony does not create a genuine issue of material fact.
¶36 Ms. Brown testified that she “believed” there was a
personal-injury contingency fee case that came into the firm while
the Compensation Agreement was in place and that the fee
distribution for that case was handled under the general
Compensation Agreement. Mr. Jones argues that this testimony
establishes a dispute about whether the Compensation Agreement
applied to both his hourly work and his contingency fee work. Her
testimony on this issue was as follows:
Q: Do you recall there being any contingency fee
cases during the 2002, 2005 time period?
A: You are asking for specific clients?
Q: No, just – not by name, but whether there were
any contingency fee cases to your recollection that
Greg Jones worked on during 2002 through 2005?
A: I think there was, I think there was a personal
injury case he was working on during that time.
Q: Do you recall whether or not there was monies
that were received on that case?
A: I believe so.
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Opinion of the Court
Q: And were those funds put in the formula just
like hourly work cases?
A: I believe it was the same, handled the same way.
The district court concluded that this testimony was not admissible,
because Ms. Brown used the terms “I think” and “I believe” and
there was no information on the record showing the basis for this
belief.
¶37 Rule 104 of the Utah Rules of Evidence requires that before
admitting evidence, the court “must decide any preliminary
question about whether a witness is qualified, a privilege exists, or
evidence is admissible.” To prove admissibility, the party seeking to
present the evidence must lay a factual foundation showing that the
evidence is admissible under the relevant rules of evidence.
¶38 Under rule 602 of the Utah Rules of Evidence, witnesses are
required to have “personal knowledge of the matter” about which
they are testifying. This can be established by showing that the
witness “had an opportunity to perceive a relevant fact, actually
perceived it, remembers perceiving it, and can communicate that
perception.” 23 We have explained that this rule “merely requires that
the witness have the opportunity and the capacity to perceive the
events in question” and does not require a court to exclude
testimony simply because the “witness’s memory of the subject
matter of the testimony is less than complete.” 24
¶39 Mr. Jones argues that Ms. Brown had the required personal
knowledge because she “had been the office manager and secretary
to Gifford Price and Jones, and prepared spreadsheets that were
used to calculate the compensation of the attorneys at the firm.” But
this general knowledge of the workings of the office does not
necessarily establish that she had any personal knowledge about the
prior contingency fee case. Moreover, she was Mr. Jones’s witness,
and therefore his attorney had every opportunity to lay the proper
foundation regarding the basis of her personal knowledge of the
prior contingency fee case. For instance, he could have asked the
name of the case, the date of the case, or the attorneys who worked
on the case. Because the basis for Ms. Brown’s personal knowledge
R. COLLIN MANGRUM & DEE BENSON, MANGRUM & BENSON
23 ON
UTAH EVIDENCE 414 (2013).
24 State v. Eldredge, 773 P.2d 29, 33 (Utah 1989).
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was not on the record, we uphold the district court’s decision to
exclude her testimony on this point.
¶40 But even if the district court erred in excluding Ms. Brown’s
testimony, this error was harmless because her testimony did not
create a genuine issue of material fact regarding the applicability of
the Compensation Agreement to the Fen-Phen work. Mr. Jones
claims that she “testified that Jones was paid under the
Compensation Agreement between 2002 and 2005 for at least one
contingency fee case at the firm.” He points to this evidence to
establish that, because one contingency fee case was handled under
the Compensation Agreement, the parties must have agreed that the
Fen-Phen cases would be as well. This logic fails, however, when one
looks at the entirety of Ms. Brown’s testimony. When asked
specifically about the Fen-Phen cases, she testified that they were not
treated like other Mackey Price cases:
Q: And was Fen Phen treated like – did you have an
understanding as to whether the Fen Phen work that
was being done at Mackey Price was done as a firm
client?
A: It was not.
...
Q: How was it treated differently than other cases
that were being handled at Mackey Price?
A: This is my impression of that time period, but I
do remember clearly that it was not favored at all by
Randall and Gifford, and that there were strict, you
know, limits put on getting involved with this,
especially as far as using firm assets or staff, resources.
¶41 Further, when asked specifically about the fee arrangement
for the Fen-Phen work, she responded, “I don’t know the details”
and “I don’t know anything.” Taken in its entirety, Ms. Brown’s
testimony fails to raise a genuine issue of material fact. When viewed
in the light most favorable to Mr. Jones, her testimony may establish
that one contingency fee case he worked on was run through the
standard Compensation Agreement. But she also stated that the Fen-
Phen work was handled differently than work done for standard
firm clients and that she did not know the specific arrangement
regarding the fees from this work. The possible application of the
Compensation Agreement to a single contingency fee case does not
create a factual dispute as to whether the parties agreed that it would
apply to the Fen-Phen contingency fee cases as well. This is
15
JONES v. MACKEY PRICE
Opinion of the Court
especially true given Ms. Brown’s statement that the Fen-Phen work
was handled differently than work done for other firm clients.
Because neither the February 2005 memorandum nor Ms. Brown’s
testimony create a factual dispute regarding the contract claim, we
uphold the district court’s dismissal of this claim on summary
judgment.
II. We Reverse the District Court’s Finding That Quantum Meruit Is
an Equitable Claim For Purposes of a Jury Demand
¶42 Having concluded that Mr. Jones’s contract claim fails, we
now turn to his claim that the district court incorrectly denied his
jury demand. We reverse the district court on this issue because at
the time of the ratification of the Utah Constitution a claim seeking
money damages under the unjust enrichment branch of quantum
meruit was a claim at law, not in equity. Next, we clarify that the
damages owed under an unjust enrichment claim are based on the
benefit conferred upon the defendant, but may be measured by the
reasonable value of the plaintiff’s services in certain instances.
A. Because a Contract-Implied-in-Law Claim for Money Damages Was a
Legal Claim at the Time of the Ratification of the Utah Constitution, the
District Court Erred in Concluding That it Was Equitable and in Denying
Mr. Jones’s Jury Demand
¶43 We have held that article I, section 10 of the Utah
Constitution guarantees “the right of jury trial in civil cases.” 25 But
we have also “made it clear that this constitutional right to a jury
trial . . . extends only to cases that would have been cognizable at
law at the time the constitution was adopted.” 26 We have also noted
that the district court is not tied to the parties’ characterization of the
claims when trying to decide whether the “legal or equitable issues
predominate,” but “should examine the nature of the rights asserted
and the remedies sought in light of the facts of the case.” 27 Therefore,
our task is to “examine the nature of the rights asserted and the
remedies sought” in order to characterize Mr. Jones’s claim, and then
to decide if that claim would have been cognizable at law or in
equity at the time the Utah Constitution was adopted.
25 Int’l Harvester Credit Corp. v. Pioneer Tractor & Implement, Inc.,
626 P.2d 418, 421 (Utah 1981).
26 Zions First Nat’l Bank v. Rocky Mountain Irrigation, Inc., 795 P.2d
658, 661 (Utah 1990) (citing Hyatt v. Hill, 714 P.2d 299 (Utah 1986)).
27 State Bank of Lehi v. Woolsey, 565 P.2d 413, 415 (Utah 1977).
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¶44 Quantum meruit has two distinct branches—contracts
implied in law and contracts implied in fact. 28 Mr. Jones brought a
claim for the contract-implied-in-law branch of quantum meruit.
Contracts implied in law, also termed quasi-contracts or unjust
enrichment, “is a doctrine under which the law will imply a promise
to pay for goods or services when there is neither an actual nor an
implied contract between the parties.” 29 A contract implied in law
claim does not require a meeting of the minds. This is in contrast to
contracts implied in fact, which are contracts established by conduct,
and do require a meeting of the minds. 30
¶45 Contracts implied in law require the plaintiff to establish
that the defendant (1) received a benefit, (2) appreciated or had
knowledge of this benefit, and (3) retained the benefit “under
circumstances that would make it unjust for the defendant” to do
so. 31 Contracts implied in law were historically included in the cause
of action for general assumpsit. 32 In 1899, we characterized a
contract-implied-in-law claim as a claim for implied assumpsit. In
Short v. Bullion-Beck & Champion Mining Co., Justice Baskin described
implied assumpsit as a claim that today we would call unjust
enrichment:
28 Emergency Physicians Integrated Care v. Salt Lake County, 2007 UT
72, ¶ 10, 167 P.3d 1080.
29 Concrete Prods. Co. v. Salt Lake County, 734 P.2d 910, 911 (Utah
1987).
30 See Knight v. Post, 748 P.2d 1097, 1100−01 (Utah Ct. App. 1988);
see also Judy Beckner Sloan, Quantum Meruit: Residual Equity in Law,
42 DEPAUL L. REV. 399, 406−407 (1992).
31Emergency Physicians, 2007 UT 72, ¶ 11 (internal quotation
marks omitted).
32 See Austin v. Shalala, 994 F.2d 1170, 1176 (5th Cir. 1993) (noting
that “[a] suit in quasi-contract falls under the common law writ of
general assumpsit”) (citing RESTATEMENT (FIRST) OF RESTITUTION §
5(a) (1937) (“The appropriate proceeding in an action at law for the
payment of money by way of restitution is . . . in States retaining
common law forms of action, an action of general assumpsit . . . .”));
see also Sloan, supra note 30, at 423−25 (noting the development of
general assumpit from including implied in fact contracts to
including implied in law contracts).
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JONES v. MACKEY PRICE
Opinion of the Court
Where a party is employed by another to perform some
specific act for a stipulated sum, and afterwards, at the
request of the employer, something additional is done
by the employe[e], without any express promise of
payment, the law will imply a promise by the employer to
pay what the additional service is reasonably worth, and the
employe[e] may recover on an implied assumpsit by
alleging . . . the facts from which the law implies a
promise to pay. This is elementary, and therefore
reference to authorities which support the principle is
not necessary. 33
Also, contracts implied in law were historically characterized as an
action for money had and received. 34 These causes of action, which
were equitable in nature, were nonetheless developed by the
common law court. 35
¶46 At the time of the signing of the Utah Constitution, it was
understood that a contract implied in law’s predecessor claims
(including assumpsit and an action for money had and received)
were claims at law, not in equity. This understanding is
demonstrated by our early caselaw and supported by
contemporaneous holdings in other state courts.
¶47 In 1897, we noted in a case involving debts owed in a
lumbermen’s exchange that “[t]his is a simple action for money had
and received, and corresponds with the old common-law action of
indebitatus assumpsit. It is an action at law, and not a suit in
equity.” 36 We did not discuss this statement further or apply it to the
facts of the case. In 1909, however, we discussed the legal/equitable
distinction in greater depth in a case concerning a materialman’s
3357 P. 720, 723 (Utah 1899) (Baskin, J., dissenting) (emphasis
added).
34 Sloan, supra note 30, at 424.
35 Id. at 423 (“The equitable nature of the new common law legal
actions, such as general assumpsit and all its tributaries such as
indebitatus assumpsit and quantum meruit, reflected the common
law courts’ efforts to move into the Chancellor’s equitable territory.”
(emphasis added)).
36 Mader v. Taylor-Romney-Armstrong Co., 49 P. 255, 255 (Utah
1897).
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lien. 37 In this case, the plaintiffs were pursuing a material man’s lien
against the defendant’s property for the cost of building materials
that were used on the property, but not paid for. 38 The lower court
found that the plaintiffs’ lien was for less than the defendant’s
homestead exemption and thus held that the plaintiffs were not
entitled to judgment under the lien.39 The plaintiffs then claimed that
they were entitled to a “personal judgment” against the property
owner for money damages. 40 We characterized the plaintiffs’
proposed personal judgment claim as one for assumpsit 41 and found
that it was a claim at law, while the lien was a claim in equity.42 We
discussed the distinction in the context of the then-recent provision
of the Utah Constitution that merged the courts of law and equity.43
We held that the merging of law and equity allowed the plaintiffs to
plead both their legal claim (for money damages under assumpsit)
and their equitable claim (for a lien requiring a sale of the property
and a deficiency judgment from the sale proceeds) in the same
complaint. 44 Both our statement in 1897 and discussion in 1909
demonstrate that at the time of the ratification of the Utah
Constitution, we viewed assumpsit as a legal claim. The fact that the
then-justices of the Utah Supreme Court saw assumpsit as a legal
claim is strong historical evidence that, at the time of ratification,
assumpsit was a legal claim.
37 Volker-Scrowcroft Lumber Co. v. Vance, 103 P. 970, 971 (Utah
1909).
38 Id.39 Id.40 Id. at 972.
41 Id. (“In all these cases in which it is held that a personal
judgment may be rendered though the lien fails it of course is also
held that the complaint . . . must also contain all the necessary facts
constituting both ground for relief and all the necessary allegations
of an action in assumpsit.”).
42 Id. (“The only relief demanded was the awarding of a lien and
sale of the premises, and a deficiency judgment after sale. Nowhere
is it made to appear that the action of the court was in any manner
invoked for a personal judgment apart from the relief demanded in
equity.” (emphasis added)).
43 Id.
44 Id.
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JONES v. MACKEY PRICE
Opinion of the Court
¶48 This conclusion is bolstered by the contemporaneous
decisions of other state courts recognizing contract implied in law’s
predecessor claims (assumpsit and an action for money had and
received) to be legal. For instance, in 1890 the New York Court of
Appeals held that an action for money had and received was an
action at law:
[T]he action has been frequently stated to be an
‘equitable one,’ that is one depending upon general
principles of equity for the maintenance of the
plaintiff’s claim to the money. . . . But although the
action may be generally described as one of an
equitable character, it never was in any aspect a suit in
equity. . . . That an action is of an equitable nature does
not make it an action in equity.
When, in an action for money had and received, all the facts
show that the plaintiff is ex aequo et bono [“from equity
and conscience”] entitled to recover, his right to recover is a
legal one, and maintainable in the court of law. 45
¶49 Just five years after the ratification of the Utah Constitution,
another court similarly recognized the legal nature of these causes of
action. In 1900, the North Carolina Supreme Court stated, “where
one party has received money to which another is entitled, the law
presumes a contract if it is necessary to do so to enable the party
entitled to recover the same.” 46 The court goes on to find that “[t]his
entitles the party having the right to the money to an action of debt,
indebitatus assumpsit, which, though an action at law, was equitable
in nature. It has been styled ‘an equitable action on the law side of
the docket.’” 47
¶50 Similarly, the Wisconsin Supreme Court noted the legal
roots of contract implied in law’s predecessor claims in 1914. The
court noted that “[t]he complaint is for money had and received. The
action though legal in form, the right to recover is in its nature
equitable, and can only be enforced where the defendant has
received money which in equity and good conscience he ought to
45 Chapman v. Forbes, 26 N.E. 3, 4−5 (N.Y. 1890) (emphasis added).
46 Davison v. W. Oxford Land Co., 36 S.E. 162, 163 (N.C. 1900).
47 Id. (emphasis added).
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pay to the plaintiff.” 48 Modern courts have also recognized this
history and held that assumpsit is based in law and thus requires a
jury trial.49 Based on the contemporaneous discussions of assumpsit
by the Utah Supreme Court and our sister states, we conclude that
assumpsit was legal in nature at the time of the ratification of the
Utah Constitution.
¶51 Having examined the nature of contract implied in law’s
predecessor claims, we turn to an analysis of the remedy sought. We
must now determine whether the relief sought by Mr. Jones is the
type of relief that could have been granted by a court of law at the
time of ratification. As we have noted, in addition to the nature of
the rights asserted, we also “examine the nature of . . . the remedies
sought” to determine if a claim is legal or equitable. 50 The remedy
for quantum meruit is restitution.51 Historically, the remedy of
restitution developed along two tracks: one in the courts of law and
another in the courts of equity. 52 Restitution is available as a legal
Steuerwald v. Richter, 149 N.W. 692, 694 (Wis. 1914) (emphasis
48
added).
49 Austin, 994 F.2d at 1176 (“A suit in quasi-contract falls under
the common law writ of general assumpsit. . . . In England in 1791,
these actions were at law and were tried to a jury.”); Jogani v. Superior
Court, 81 Cal. Rptr. 3d 503, 508 (Cal. Ct. App. 2008) (concluding that
at the time of the adoption of the California constitution in 1850
quantum meruit was an action at law); Nehi Beverage Co. of
Indianapolis v. Petri, 537 N.E.2d 78, 85 (Ind. Ct. App. 1989) (“Our
courts have used the phrases quasi-contract, contract implied-in-law,
constructive contract, and quantum meruit synonymously. These are
legal fictions providing a remedy to prevent unjust enrichment,
thereby promoting justice and equity. But, they are legal fictions
created by courts of law. They were triable at law and not in equity,
thus one is entitled to jury trial upon them.”(citations omitted));
Auburn Mech., Inc. v. Lydig Constr., Inc., 951 P.2d 311, 317 (Wash. Ct.
App. 1998) (“Most authorities agree that quasi contract, while
invoking equitable principles, is a legal remedy.”).
50 State Bank of Lehi, 565 P.2d at 415.
51 U.S. Fid. & Guar. Co. v. U.S. Sports Specialty Ass’n, 2012 UT 3, ¶
12, 270 P.3d 464 (“[R]estitution is an extracontractual remedy for a
claim of unjust enrichment.”).
52 Great-W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 212
(2002) (“In the days of the divided bench, restitution was available in
(continued . . .)
21
JONES v. MACKEY PRICE
Opinion of the Court
remedy where the plaintiff asks exclusively for monetary relief.53
“These claims [for monetary relief under quantum meruit] are claims
at law in every sense, first because they seek simple monetary relief,
and second because they are historically brought in the separate law
courts.” 54 But restitution can also be an equitable remedy, such as
when a plaintiff brings a quantum meruit claim and seeks a
constructive trust or equitable lien. 55 Because a plaintiff relying on a
contract-implied-in-law theory may seek either a legal remedy
(money damages), or an equitable remedy (a constructive trust or
equitable lien), courts have tied the question of whether the plaintiff
has a right to a jury trial to the remedy requested. 56 Our cases take a
similar approach. For instance, in International Harvester, we held that
a plaintiff’s foreclosure claim was legal “[s]ince [it] concerned only
money damages.” 57 In this case, Mr. Jones seeks only money
certain cases at law, and in certain others in equity.”); 1 DAN B.
DOBBS, LAW OF REMEDIES § 2.6(3) (2d ed. 1993) (“[S]ome restitution
claims were equitable. [However] [m]any restitution claims were
brought under the common law writ of assumpsit. . . . These claims
are claims at law in every sense . . . .”).
53 RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT
§ 4 cmt. d (2011) (“If restitution to the claimant is accomplished
exclusively by a judgment for money, without resort to any of the
ancillary remedial devices traditionally available in equity but not at
law, the remedy is presumptively legal.”).
54 1 DAN B. DOBBS, LAW OF REMEDIES § 2.6(3) (2d ed. 1993).
55 Id. § 4.3(2) 597 (“The constructive trust, like its counterpart
remedies ‘at law,’ is a remedy for unjust enrichment.”); id. § 4.3(3)
(“The equitable lien [may be] imposed . . . to prevent unjust
enrichment.”); see also RESTATEMENT (THIRD) OF RESTITUTION AND
UNJUST ENRICHMENT § 4 cmt. d (2011) (“Beginning with constructive
trust, and proceeding through every possible analogy to constructive
trust, remedies in restitution that give the claimant ownership or
security or priority in an identifiable asset or fund are presumptively
derived from equity.”).
56 Knudson, 534 U.S. at 215 (“[W]hether [restitution] is legal or
equitable in a particular case . . . remains dependent on the nature of
the relief sought.”).
57 Int’l Harvester, 626 P.2d at 421.
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damages for his quantum meruit claim. 58 Thus, he seeks a legal
remedy, not an equitable one. Therefore, both the type of claim he
presses and the remedy he seeks were available at law at the time of
the ratification of the Utah Constitution.
¶52 Mackey Price nevertheless argues that language in our
opinions has explicitly described quantum meruit in equitable terms.
For instance, we have stated that quantum meruit is an “equitable
tool that allows a plaintiff to receive restitution for the reasonable
value of services provided to the defendant.” 59 And we have
characterized recovery of quantum meruit as “equitable in nature.”60
But the language in our caselaw is best explained by looking again to
history. In Moses v. Macferlan, Lord Mansfield stated that recovery
under unjust enrichment is required by “the ties of natural justice
and equity.” 61 But commentators have explained Lord Mansfield’s
use of the word “equity” as follows: “Although Mansfield’s
description of quasi contract as ‘equitable’ has been repeated many
times, this refers merely to the way in which a case should be
approached, since it is clear that the action is at law and the relief
given is a simple money judgment.” 62
¶53 The language from our caselaw can be similarly explained.
When we described quantum meruit or unjust enrichment as
“equitable,” we meant merely to describe the way in which the claim
should be approached, given that such claims arise only where there
is no legal contract. Our prior opinions should not be read to
impliedly hold that a claim for quantum meruit is “equitable” for
purposes of the right to a jury trial. 63
58 In Mr. Jones’s Amended Complaint, he also asks the court to
hold the fees received by Mackey Price in constructive trust. But this
claim is separate from his claim for quantum meruit. His quantum
meruit claim seeks only “the monetary benefits” that “Mr. Jones has
conferred upon the Defendants.”
59Emergency Physicians, 2007 UT 72, ¶ 10; see also TruGreen Cos. v.
Mower Bros., 2008 UT 81, ¶ 18, 199 P.3d 929 (noting that restitution
and unjust enrichment are tools of equity).
60 Christensen v. Abbott, 671 P.2d 121, 123 (Utah 1983).
61 Moses v. Macferlan, 97 Eng. Rep. 676 (K.B. 1760).
62 GEORGE E. PALMER, THE LAW OF RESTITUTION § 1.2 (1978).
63We recognize that we have also characterized quantum meruit
as an equitable remedy when announcing that legal remedies must
(continued . . .)
23
JONES v. MACKEY PRICE
Opinion of the Court
¶54 In sum, because we conclude that Mr. Jones’s unjust
enrichment claim and his remedy of money damages would have
been available at law when the Utah Constitution was ratified, we
hold that the district court erred in rejecting Mr. Jones’s demand for
a jury on this claim.
¶55 Because we reverse the district court’s denial of Mr. Jones’s
demand for a jury trial, the subsidiary question of whether the court
erred in bifurcating the trial is moot.
A. Damages Owed Under an Unjust Enrichment Claim Are Based on the
Benefit to the Defendant, but Can Be Measured by the Reasonable Value of
the Plaintiff’s Services in Certain Instances
¶56 Because we have reversed the district court’s decision to
deny Mr. Jones’s request for a jury trial, we need not reach the issue
of damages. But we will nevertheless do so to give the district court
guidance on remand. 64 Mr. Jones argues that the district court
applied the incorrect measure of damages to his unjust enrichment
claim when it focused mainly on the hours he worked, with the goal
of quantifying the reasonable value of his services. Instead, he
argues, the district court should have focused on the benefit that he
conferred upon the Defendants. We clarify that a court should focus
on the defendant’s gain when assessing damages for an unjust
enrichment claim, but we recognize that in cases involving
professional services the appropriate measure of the defendant’s
gain will often be the value of the plaintiff’s professional services.
¶57 As a starting premise, “restitution should be measured to
reflect the substantive law purpose that calls for the restitution in the
first place.” 65 For an unjust enrichment claim, the substantive law
purpose is to restore to the plaintiff the benefit he or she conferred
be exhausted before equitable remedies are available. Interiors
Contracting Inc. v. Navalco, 648 P.2d 1382, 1388 (Utah 1982). But these
characterizations are also not controlling as they are not rooted in an
historical analysis of the Utah Constitution’s jury grant. Also here,
the Restatement (Third) of Restitution and Unjust Enrichment points out
the weakness of the application of the exhaustion doctrine to unjust
enrichment claims, which have their basis, historically, in law.
RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 4
cmt. e (2011).
64 See State v. Low, 2008 UT 58, ¶ 61, 192 P.3d 867.
65 1 DOBBS, LAW OF REMEDIES § 4.5(1) (2d ed. 1993).
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upon the defendant, when the retention of this benefit would be
unjust. 66 We therefore clarify that when assessing damages for unjust
enrichment, the court begins by looking to the value of the benefit
conferred. Utah caselaw has recognized that the general measure of
recovery for an unjust enrichment claim “is the value of the benefit
conferred on the defendant (the defendant’s gain) and not the
detriment incurred by the plaintiff.” 67
¶58 But in the case where the defendant has requested
professional services, either directly or impliedly, the proper
measure of the defendant’s gain will normally be the reasonable
value of the plaintiff’s services. 68 In other words, in the case of
professional services, the value of the benefit conferred is often the
same as the value of the services rendered. In most cases involving a
lawyer’s services, the value of those services will be measured by the
number of hours the plaintiff lawyer worked multiplied by his or her
hourly rate. But in contingency fee cases, such as the one before us,
the reasonable value of the plaintiff lawyer’s services requires us to
consider factors beyond hours worked. In such cases, the best
measure of the value of the benefit conferred upon the defendant
law firm by the plaintiff lawyer’s services is the value of those
services as determined by the standards applicable to contingency
fee cases in the legal community. In our case, Mackey Price implicitly
requested Mr. Jones’s professional services by allowing him to work
on the firm’s Fen-Phen litigation. Therefore, the proper measure of
66 See RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST
ENRICHMENT § 1 cmt. a (2011) (“Liability in restitution derives from
the receipt of a benefit whose retention without payment would
result in the unjust enrichment of the defendant at the expense of the
claimant.”).
67 Davies v. Olsen, 746 P.2d 264, 269 (Utah Ct. App. 1987).
68 See RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST
ENRICHMENT § 50 (2011); see also Candace S. Kovacic, A Proposal to
Simplify Quantum Meruit Litigation, 35 AM. U. L. REV. 547, 557 (1986)
(“[T]he reasonable market value of the plaintiff’s services can be
viewed as the correct remedy in most quantum meruit cases, even in
many cases in unjust enrichment because reasonable value can be
viewed as the defendant’s gain in certain situations. The value of the
plaintiff’s services measures the defendant’s gain when the
defendant requests the work: the defendant’s benefit is receiving
what he or she requested those requested services have a market
value.”(footnote omitted)).
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JONES v. MACKEY PRICE
Opinion of the Court
damages is the reasonable value of his services. This is consistent
with our valuation of professional services in prior caselaw. 69
¶59 When assessing the reasonable value of Mr. Jones’s services,
the court should look to factors the legal community uses to value
contingency fee cases. The district court focused heavily on
quantifying the hours Mr. Jones worked in determining the value of
his services to the Defendants. The court resisted a discussion of
other factors that might affect how the contingency fees should be
divided among the attorneys—such as the risk each party
undertook. This narrow focus on Mr. Jones’s hours worked is
evident in the court’s findings of fact where it discusses the
testimony of his expert on the distribution of contingency fees. The
court states that Mr. Jones’s expert’s “opinion is based on an
erroneous premise. He attempts to determine how the Fen-Phen fee
should be split among all of the attorneys, rather than issuing his
opinion determining the reasonable value of the services of
Plaintiff.”
¶60 But determining the “reasonable” value of Mr. Jones’s
services in this contingency fee case necessarily requires
consideration of factors beyond the hours he has spent on the case.
While Mr. Jones’s hours is an important factor, the court should also
consider factors commonly used to measure the value of a lawyer’s
contribution to a contingency fee recovery, such as the relative
importance of his role in the litigation, his personal financing of the
case, his role in securing clients, his contribution to the management
of the case, and his expertise and experience in the area of the law
concerned. 70
¶61 Accordingly, in instructing the jury as to the damages on
Mr. Jones’s unjust enrichment claim, the court should instruct the
jury to consider factors such as these, or any others the court deems
69 See Emergency Physicians, 2007 UT 72, ¶ 29 (holding that the
proper measure of damages in a case involving physicians’ services
was the “reasonable value of the services [the plaintiff] provided”
(internal quotation marks omitted)); Baugh v. Darley, 184 P.2d 335,
339 (Utah 1947) (stating that the measure of damages in a case
involving real estate services would be “the reasonable value of the
services rendered”).
70 See UTAH R. PROF’L CONDUCT 1.5 (discussing the factors to
consider when determining a reasonable fee generally).
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appropriate for measuring Mr. Jones’s relative contribution to the
recovery of the Fen-Phen fees. 71
III. We Affirm the District Court’s Partial Dismissal of Mr. Jones’s
Quantum Meruit and Fraudulent Transfer Act Claims
¶62 On summary judgment, the district court dismissed Mr.
Jones’s claims for unjust enrichment against Mr. Mackey, Mr. Price,
Mr. Thompson, Mr. Skousen, Thompson & Skousen, L.L.C., C.
Jeffery Thompson, L.L.C., and Russell C. Skousen, L.L.C. The court
concluded that Mackey Price was the only defendant Mr. Jones
could properly sue for unjust enrichment, reasoning that the other
Defendants “were incidental and not direct beneficiaries of any
services performed by [Mr. Jones].”
¶63 The court also dismissed Mr. Jones’s Fraudulent Transfer
Act claims against Mr. Thompson, Mr. Skousen, Thompson &
Skousen, L.L.C., C. Jeffery Thompson, L.L.C., and Russell C.
71 See Mulholland v. Kerns, 822 F. Supp. 1161, 1169 (E.D. Pa. 1993)
(surveying courts approaches to valuing an attorney’s quantum
meruit attorney fee recovery and finding that “[t]he New Jersey
Superior Court has granted quantum meruit awards of attorneys’
fees on an hourly basis and on a percentage basis, depending on
which method of calculation seemed more reasonable in the
particular case. In New York, in a fee dispute between a dismissed
attorney and a client, the outgoing attorney was allow[ed] to choose
to take his quantum meruit award on an hourly basis before final
resolution of the case or as a percentage of the final recovery, when it
was available.” (citations omitted)); Ashby v. Price, 445 N.E.2d 438,
444 (Ill. App. Ct. 1983) (looking to “the skill and standing of the
attorney employed, the nature of the cause, the novelty and
difficulty of the questions, the amount and importance of the subject
matter, the degree of responsibility involved in the management of
the cause, the time and labor required, the usual and customary
charges in the community and the benefits resulting to the client”
when determining a reasonable attorney fee for a contingency fee
case under a quantum meruit claim); see also Paolillo v. Am. Exp.
Isbrandtsen Lines, Inc., 305 F. Supp. 250, 251 (S.D.N.Y. 1969)
(considering “(1) time; (2) standing of the lawyer at the bar;
(3) amount involved; (4) benefit to the client[;] and (5) skill
demanded” when valuing an attorney’s quantum meruit claim on a
contingency fee case).
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JONES v. MACKEY PRICE
Opinion of the Court
Skousen, L.L.C. (Thompson & Skousen Defendants). 72 It concluded
that “the uncontroverted material facts show that the negotiations
between Thompson & Skousen and [Mackey Price] were in good
faith and arm’s length as to the distribution of Fen-Phen funds to
Thompson & Skousen, L.L.C. with Thompson & Skousen, L.L.C.
being a good faith creditor of [Mackey Price].” We discuss each of
these dismissals separately below and affirm in each instance.
A. We Affirm the District Court’s Dismissal of Mr. Jones’s Claims for
Quantum Meruit Against Mr. Mackey, Mr. Jones, and the
Thompson & Skousen Defendants
¶64 As noted above, the district court dismissed Mr. Jones’s
quantum meruit claims against all Defendants except Mackey Price
on summary judgment. Mr. Jones argues this was error because each
of those Defendants ultimately benefited from his work on the Fen-
Phen cases by accepting part of the fees earned. We affirm the
district court’s dismissal of Mr. Mackey and Mr. Price because the
uncontroverted facts make clear that they were not direct
beneficiaries of Mr. Jones’s work. We also affirm the dismissal of the
Thompson & Skousen Defendants because the uncontroverted facts
show both that they were not direct beneficiaries of Mr. Jones’s work
and that it was not unjust for them to retain their contracted for
payment from the Fen-Phen fees.
¶65 A defendant is liable under the unjust enrichment prong of
quantum meruit only if he or she received a direct benefit from the
plaintiff. In other words, “unjust enrichment does not result if the
defendant has received only an incidental benefit from the plaintiff’s
service[s].” 73 The most relevant case applying this rule is Emergency
Physicians Integrated Care v. Salt Lake County. In that case, physicians
provided services to Salt Lake County inmates. 74 Emergency
Physicians Integrated Care (EPIC), a corporation that provided
billing and collections services for the physicians, later sued the
County seeking quantum meruit for the services its member
72For purposes of this section, the term “Thompson & Skousen
Defendants” includes Thompson & Skousen, L.L.C., Mr. Thompson,
Mr. Skousen, C. Jeffery Thompson, L.L.C., and Russel C. Skousen,
L.L.C.
73 Emergency Physicians Integrated Care v. Salt Lake County, 2007 UT
72, ¶ 26, 167 P.3d 1080.
74 Id. ¶ 1.
28
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physicians had provided. 75 The district court held that the County
had a constitutional and statutory duty to provide the inmates with
medical care and acknowledged that it satisfied this duty through
the services provided by the plaintiff physicians. 76 But it nevertheless
declined to grant the EPIC’s claim for quantum meruit because it
concluded that the inmates were the direct beneficiaries of the
physician’s services, not the County. 77
¶66 We reversed and concluded that the County did directly
benefit from the plaintiff’s services. 78 In so holding, we noted that
the County was not “acting as a passive third party to a primary
relationship between the physicians and inmates,” but instead “the
County ha[d] complete control over when and where medical
services [were] provided.” 79 Further, we noted that the County had a
duty to provide these medical services and that if the physicians had
not done so, the County would have had to provide these services by
other means. We held that these were “real benefits . . . sufficient to
establish the first prong of a quantum meruit claim.” 80 We also
recognized that “a large variety of items fall under the definition of
benefit, including an interest in money.”81
¶67 It is clear that Mr. Mackey and Mr. Price benefited from
Mr. Jones’s work in that they received money; the dispute focuses on
whether this benefit was direct or incidental. Whether a benefit is
direct or incidental depends on the relationship between the parties
and whether Mr. Mackey and Mr. Price were acting as “third
parties” to the primary relationship between Mr. Jones and the law
firm. We agree with the district court’s conclusion that the
undisputed facts show that Mr. Mackey and Mr. Price were third
parties to the primary relationship between the law firm of Mackey
Price and Mr. Jones. This primary relationship is evidenced by the
fact that all of the direct contractual relationships involved in this
case were with the law firm, not with Mr. Mackey or Mr. Price
individually. Mr. Jones was an employee of the law firm. The Fen-
75 Id.76 Id. ¶¶ 27−28.
77 Id. ¶ 27.
78 Id. ¶¶ 27−28.
79 Id. ¶ 27.
80 Id.
81 Id. ¶ 26 (internal quotation marks omitted).
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JONES v. MACKEY PRICE
Opinion of the Court
Phen litigants were in contractual relationships with the law firm.
Mr. Jones’s compensation agreements and contracts were all with the
law firm, not the individual defendants. Even viewed in the light
most favorable to Mr. Jones, these facts fail to raise a genuine issue of
material fact concerning whether Mr. Mackey and Mr. Price directly
benefited from his work on the Fen-Phen litigation.
¶68 We uphold the dismissal of the Thompson & Skousen
Defendants because there was no genuine issue of material fact
regarding both whether they directly benefited from Mr. Jones’s
work and whether it was unjust for them to retain any benefit
recieved. In order to prove quantum meruit, Mr. Jones has to show
that the Thompson & Skousen Defendants received a benefit, had an
appreciation or knowledge of the benefit, and accepted the benefit
under circumstances that would make it unjust for them to retain it
without compensating Mr. Jones. 82 As discussed above, to meet the
first element of this test the benefit must be direct, not incidental.
Similar to Mr. Mackey and Mr. Price, the Thompson & Skousen
Defendants were third parties to the primary relationship between
Mr. Jones and the law firm of Mackey Price. Any benefit they
received from Mr. Jones’s work through fees collected on the Fen-
Phen cases was indirect. Mr. Jones was not an employee of the
Thompson & Skousen Defendants and had no contract for payment
of fees from the Thompson & Skousen Defendants.
¶69 Further, under the third element of quantum meruit, “it is
not enough that a benefit was conferred on the defendant, . . . rather,
the enrichment to the defendant must be unjust in that the defendant
received a true windfall or ‘something for nothing.’” 83 We have
further explained that “[t]he mere fact that a third person benefits
from a contract between two others does not make such third person
liable.” 84 Rather “[t]here must be some misleading act, request for
services, or the like, to support such an action.” 85
¶70 Mr. Jones has failed to raise a genuine issue of fact regarding
his claim that the Thompson & Skousen Defendants received a
82 Id. ¶ 11.
Id. ¶ 26 (quoting 66 AM. JUR. 2D RESTITUTION
83 AND IMPLIED
CONTRACTS § 13 (2001)).
84Commercial Fixtures & Furnishings, Inc. v. Adams, 564 P.2d 773,
774 (Utah 1977).
85 Id.30
Cite as: 2015 UT 60Opinion of the Court
windfall or something for nothing or that they misled Mr. Jones
regarding his compensation from the Fen-Phen cases. Instead, the
Thompson & Skousen Defendants took a lead role in the Fen-Phen
litigation and were paid for this work pursuant to an arm’s length
contract with Mackey Price. In the summary judgment hearing, the
district court noted that the contractual fee splitting arrangement
between Mackey Price and Thompson & Skousen “is a fee split that
was negotiated in good faith at arm’s length, and if anything Mackey
Price got the better of them with respect to how the fees were
split.” 86
¶71 Further, Mr. Jones did not raise a genuine issue of material
fact as to his claim that the Thompson & Skousen Defendants
attempted to mislead him. In fact, the record shows that
Mr. Thompson specifically warned Mr. Jones that there was no
agreement with Mackey Price regarding his compensation and that
he needed to take action to get a deal in place. Because Mr. Jones
failed to raise an issue of fact as to his claim that the Thompson &
Skousen Defendants either benefited directly from his work or
unjustly retained any benefit received, we uphold the district court’s
dismissal of the quantum meruit claim against them.
A. We Affirm the District Court’s Dismissal of Mr. Jones’s Fraudulent
Transfer Act Claims Against the Thompson & Skousen Defendants
¶72 We now turn to Mr. Jones’s Fraudulent Transfer Act claims.
In claiming that the Thompson & Skousen Defendants are liable
under Utah’s Fraudulent Transfer Act, Mr. Jones relies on section 25-
6-5(1) of the Utah Code, which provides:
(1) A transfer made or obligation incurred by a debtor
is fraudulent as to a creditor, whether the creditor's
claim arose before or after the transfer was made or the
obligation was incurred, if the debtor made the transfer
or incurred the obligation:
(a) with actual intent to hinder, delay, or
defraud any creditor of the debtor; or
(b) without receiving a reasonably equivalent
value in exchange for the transfer or obligation;
and the debtor:
86Mr. Jones disputes that the contract was necessarily at arm’s
length because Mr. Thompson was a director at Mackey Price.
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JONES v. MACKEY PRICE
Opinion of the Court
(i) was engaged or was about to engage
in a business or a transaction for which
the remaining assets of the debtor were
unreasonably small in relation to the
business or transaction; or
(ii) intended to incur, or believed or
reasonably should have believed that he
would incur, debts beyond his ability to
pay as they became due.
While the Act allows a plaintiff to unwind transactions intended to
evade a valid judgment, it also provides an exemption from this
provision if a transferee “took in good faith and for a reasonably
equivalent value.” 87 Mr. Jones argues that the exception is
inapplicable here because the Thompson & Skousen Defendants
knew about his claims to the fees and nevertheless received part of
the fees from Mackey Price. He argues that this constitutes bad faith.
¶73 We have not interpreted “good faith” as used in the current
version of the Fraudulent Transfer Act. But we have interpreted a
former version of the statute that contained very similar language:
“Every conveyance made, and every obligation incurred, with actual
intent . . . to hinder, delay[,] or defraud either present or future
creditors is fraudulent as to both present and future creditors.” 88 In
interpreting the statute, we held that “[p]roof that a transferee of
property knows that the transferor-debtor has preferred the
transferee over other creditors or that the transferee actively sought
the preference from the debtor does not support the conclusion that
the transferee lacks good faith.” 89 We went onto explain, however,
that if the value of the property the transferee received was greater
than the value of the transferee’s legitimate preference, the excess is
available to other creditors.90
¶74 In this case, there is no doubt that the Thompson & Skousen
Defendants were on notice of Mr. Jones’s claim to part of the fees,
given that they were named parties in his lawsuit. But under our
holding in Butler, simply being on notice of another creditor’s claim
87 UTAH CODE § 25-6-9(1).
88Butler v. Wilkinson, 740 P.2d 1244, 1260 (Utah 1987) (internal
quotation marks omitted).
89 Id. at 1261.
90 Id.
32
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does not foreclose the possibility that a creditor could still receive
funds in good faith. Here, Thompson & Skousen negotiated its
contract with Mackey Price regarding the Fen-Phen litigation long
before it ever received the transfer of fees from Mackey Price. And in
the interim, Thompson & Skousen managed and performed
extensive work on the cases. The uncontroverted facts show that
Thompson & Skousen received payment for successfully completing
the terms of its contract with Mackey Price. Its awareness of a
possible claim by Mr. Jones does not create a factual issue as to
Mr. Jones’s claim that it received the payment in bad faith.
¶75 Our Butler decision also holds, however, that if the value of
property the transferee received was greater than the value of the
transferee’s legitimate preference, then the excess is available to the
other creditors. So even if the Thompson & Skousen Defendants did
not act in bad faith, Mr. Jones might nevertheless have a valid claim
under the Fraudulent Transfer Act if he could show that they
received more than the value of their “legitimate preference.” But
Mr. Jones makes no attempt to do so in his opening brief. Only in his
reply brief does he raise this issue, and we “will not consider matters
raised for the first time in the reply brief.” 91 Accordingly, we
conclude that he has failed to raise a genuine issue of fact concerning
this claim.
¶76 We do note that it does not appear the Thompson &
Skousen Defendants clearly received more than their legitimate
preference. Among other things, the firm set up the Fen-Phen
litigation program, found physicians and other experts, managed
and supervised the litigation, and entered into agreements with local
law firms near the referring physicians. Further, Mr. Thompson and
Mr. Skousen were integral to this work. We therefore affirm the
district court’s ruling dismissing Mr. Jones’s Fraudulent Transfer Act
claims against the Thompson & Skousen Defendants because he has
not raised an issue of fact concerning whether the Defendants acted
in bad faith or received more than their legitimate preference.
Conclusion
¶77 We uphold the district court’s dismissal of Mr. Jones’s
contract claim because Mr. Jones failed to set forth affirmative
evidence demonstrating a genuine issue of material fact as to this
91 See Coleman ex. rel Schefski v. Stevens, 2000 UT 98, ¶ 9, 17 P.3d
1122 (declining to review an issue where it was raised for the first
time in the reply brief); see also UTAH R. APP. P. 24(c).
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JONES v. MACKEY PRICE
Opinion of the Court
claim. We reverse the district court’s decision to deny Mr. Jones’s
jury demand because an unjust enrichment claim for money
damages was a claim at law at the time of the ratification of the Utah
Constitution. To guide the district court on remand, we also clarify
that the correct measure of damages for an unjust enrichment claim
is the benefit conferred upon the defendant, but conclude that in this
case, where the Defendant has requested the Plaintiff’s professional
services, this benefit is properly measured by the reasonable value of
those services. In addition, we uphold the district court’s dismissal
of the individual defendants under both the unjust enrichment and
the Fraudulent Transfers Act claims as Mr. Jones has failed to raise a
genuine issue of material fact concerning these claims. Finally, we
remand the case to the district court for further proceedings in
accord with this decision.
34