Benchmark Construction v. Scheiner Commercial Group et al
Filing
161
MEMORANDUM DECISION granting in part and denying in part 82 Motion for Summary Judgment. The court GRANTS, without prejudice, Defendants motion as to Plaintiffs implied-in-fact contract claims. The court DENIES Defendants motion as to Plaintiffs unjust enrichment claims. Signed by Judge Clark Waddoups on 7/9/13. (jmr)
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION
BENCHMARK CONSTRUCTION LLC,
Plaintiff,
v.
AUTO-OWNERS INSURANCE CO.,
Defendant.
I.
MEMORANDUM DECISION AND
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT
Case No. 2:12-CV-00762
Judge Clark Waddoups
INTRODUCTION
On May 23, 2013, the court heard oral argument on the Motion for Summary Judgment
(Dkt. No. 82) brought by Defendant Auto-Owners Insurance Company (“Auto-Owners”) to
dismiss Plaintiff Benchmark Construction, LLC’s (“Benchmark”) claims for implied-in-fact
contract and unjust enrichment. The court has carefully reviewed the parties’ submissions in
support of and in opposition to Auto-Owners’ motion and finds that Benchmark has proffered
insufficient evidence to support its claim for implied-in-fact contract; the court therefore
GRANTS Auto-Owners’ Motion for Summary Judgment without prejudice on that claim. If
Benchmark is able to proffer sufficient evidence to support its claim after adequate time for
completion of discovery, Benchmark may, if it elects to do so, seek leave to amend its Complaint
to include a claim for implied-in-fact contract. The court hereby DENIES Auto-Owners’ Motion
to Dismiss Benchmark’s unjust enrichment claim for the reasons discussed below.
II.
BACKGROUND
This case arises out of a contractual agreement between a contractor, Scheiner
Commercial Group Inc. (“Scheiner”) and a sub-contractor, Benchmark, for the construction of
several retail stores at the City Creek Center Mall (“City Creek”) located in Salt Lake City, Utah.
Benchmark is a construction company based in Provo, Utah. Auto-Owners is an insurance
provider incorporated in Michigan and is one of several parties being sued by Benchmark.
Benchmark was hired by Scheiner as a sub-contractor to perform construction work on
several retail locations, including the retail store Sephora, which was under construction at City
Creek. Auto-Owners provided flood damage insurance at the Sephora location.
On or around February 9, 2012, another contractor cracked a sprinkler head causing flood
damage at Sephora. Plf.’s Am. Compl., 5 ¶ 29 (Dkt. No. 127). Benchmark alleges that on
February 10, 2012, Kevin Hansen, an adjustor for Auto-Owners, inspected the site. That same
day Benchmark sent a bid to Scheiner and Scheiner instructed it to begin work. Benchmark
alleges that both Scheiner and Auto-Owners represented to it that it would be paid by AutoOwners, but does not state who or when the representation was made. Benchmark further alleges
that it completed repair of the flood damage and the Sephora store opened on time on March 22,
2012. Auto-Owners claims that only Scheiner represented to Benchmark that it should begin the
repairs. Def.’s Mem. Supp. Mot. Summ. J. 8 (Dkt. No. 82).
In April 2012, Benchmark began asking for payment from Auto-Owners. In May, AutoOwners requested copies of time sheets and material expenses and had discussions about the
documentation required. Discussions continued between Benchmark and Auto-Owners through
September 2012, including representations to Benchmark that it would be paid if it provided a
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few more documents. Benchmark has never been paid. Farr Decl, 2/25/2013, ¶¶ 5-26 (Dkt. No.
104).
Auto-Owners contends that: (1) no contract existed between it and Benchmark, but that if
an implied contract did exist, it must be between Scheiner and Benchmark; (2) Auto-Owners
does not own Sephora and, therefore, was not unjustly enriched by the repairs; (3) Benchmark’s
claim is barred by the Statute of Frauds pursuant to Utah Code § 25-5-4(1)(b); and (4)
promissory estoppel has not been pled. See Reply 2-6 (Dkt. No. 116). Benchmark, however, has
not alleged claims under Utah Code § 25-5-4(1)(b) or for promissory estoppel against AutoOwners and, accordingly, the court will not address those arguments.
III.
DISCUSSION
A. Summary Judgment Standard
A court must grant summary judgment when the “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a) (2012). The moving party must first establish the absence of a genuine issue of
material fact on elements as to which it is moving for summary judgment. Celotex v. Cartrett,
477 U.S. 317, 323 (1986); Jensen v. Kimball, 1 F.3d 1073, 1076-1077 (10th Cir. 1993). The facts
and all reasonable inferences drawn therefrom are viewed in the light most favorable to the nonmoving party. Belhomme v. Widnall, 127 F.3d 1214, 1216 (10th Cir. 1997).
After the moving party satisfies its burden, the burden then shifts to the non-moving party
to point to specific material facts which show a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting the pre-amended version of Rule 56(e)). The
court must then determine whether there is a genuine issue of material fact that justifies trial,
beyond a mere disagreement between the parties. Id. at 251.
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B. Implied-in-Fact Contract
A claim for breach of implied-in-fact contract requires: (1) the existence of an implied-infact contract; (2) mutual assent; and (3) failure by a defendant to comply with its terms.
Retherford v. AT&T Communications, 844 P.2d 949, 967 (Utah 1992). To succeed on its motion
for summary judgment, Auto-Owners must show that Benchmark cannot establish at least one of
the required elements; the burden then shifts to Benchmark to identify evidence in the record to
generate a genuine dispute as to any material fact. Jensen, 1 F.3d at 1076.
To be a genuine issue of material fact, there must be sufficient evidence from which a
reasonable jury could find that each element of a claim has been met. Ryan v. Dan's Food Stores,
Inc., 972 P.2d 395, 401 (Utah 1998) (quoting Sanderson v. First Sec. Leasing Co., 844 P.2d 303,
306 (Utah 1992)). The non-moving party must offer evidence that is admissible at trial or, if
there is an objection, explain the admissible form of evidence it anticipates presenting at trial.
Fed. R. Civ. P. 56(c). If the evidence of intent relied on by the non-moving party does not
present triable issues of fact, the court may determine the existence of an implied-in-fact contract
as a matter of law. Cabaness v. Thomas, 232 P.3d 486, 654 (Utah 2010).
Benchmark’s evidence consists of: (1) a Declaration from Benchmark’s owner, Joel
Farrar; and (2) emails exchanged between the parties that contain requests for invoices prepared
after the work was completed. Mindful of its obligation to view the facts in a light most
favorably to Benchmark, the court finds that Benchmark has not met its burden to proffer
sufficient evidence to create a genuine dispute of any material fact to support its implied-in-fact
contract claim.
Benchmark’s Declaration, in relevant parts, contains statements that are too vague to
support a claim that Auto-Owners requested Benchmark to complete the work or that Benchmark
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reasonably relied upon statements by Auto-Owners before it began the repairs. Benchmark fails
to provide evidence of who from Auto-Owners asked it to proceed or when the representations
were made to support an implied-in-fact contract claim. Benchmark has provided no other
evidence regarding representations which would support its claim. At oral argument, Benchmark
represented that an insurance adjustor, Kevin Hansen, made representations regarding AutoOwners’ obligation to pay for the work done at the site; it has provided no evidence, however, to
support this claim. Benchmark also argues that in approximately February 2012, Auto-Owners
and Scheiner represented that Auto-Owners would pay for the repairs. Benchmark fails,
however, to state who made the statements. Benchmark argues that these representations are
corroborated by requests for invoices made through emails and at a meeting with Benchmark.
These requests, however, were made after, not before Benchmark began and completed the
work. Plf.’s Opp. Mot. Summ. J., 7 ¶ 28-30; Decl. Joel Farrar 2 ¶ 14, attached as Ex. C. to Plf.’s
Opp. Mot. Summ. J. (Dkt. No. 104). Conclusory, generic allegations that both Auto-Owners and
Scheiner made representations that Benchmark would be paid for the repairs are insufficient to
allow a jury to find that Benchmark had an implied-in-fact contract with Auto-Owners to
complete the repairs.
Benchmark’s evidence is not sufficient to establish a genuine issue of material facts to
require trial by a fact-finder for resolution and, therefore, Auto-Owners’ Motion for Summary
Judgment regarding the implied-in-fact contract is GRANTED without prejudice. If Benchmark
discovers sufficient evidence to create a genuine issue of material fact pursuant to Rule 56, it
may then seek leave to amend its Complaint to include a claim for implied-in-fact contract.
C. Unjust Enrichment
A claim for unjust enrichment in Utah requires proof of three elements: (1) a benefit
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conferred on one person by another; (2) an appreciation or knowledge by the conferee of the
benefit; and (3) the acceptance or retention by the conferee of the benefit under such
circumstances as to make it inequitable for the conferee to retain the benefit without payment of
its value. Berrett v. Stevens, 690 P.2d 553, 557 (Utah 1984). Unjust enrichment sounds in equity.
Rawlings v. Rawlings, 240 P.3d 754 ¶ 29 (Utah 2010). It developed to remedy injustice when a
remedy at law was unavailable. Id. As such, it must remain a flexible doctrine. Id. Auto-Owners’
motion for summary judgment fails on Benchmark’s unjust enrichment claim because: (1) AutoOwners has accepted the benefit of repair work for which it had a duty to pay; (2) Auto-Owners
has not paid for the work; and (3) Benchmark has proffered sufficient evidence to proceed on a
claim for unjust enrichment.
Auto-Owners contends that it is entitled to summary judgment on Benchmark’s unjust
enrichment claim, arguing that Scheiner is the ultimate beneficiary for the unpaid work. Def.’s
Mem. Supp. Mot. Summ. J. 8 (Dkt. No. 82). Benchmark answers that Auto-Owners, as the
insurer, had an obligation to perform or pay for the repairs at the site. Plf.’s Opp. Mot. Summ. J.
5 (Dkt. No. 104). Since Benchmark performed the work, it conferred a benefit upon AutoOwners which Auto-Owners would have had to pay for or perform on its own.
Based on Auto-Owners’ request for invoices regarding the repair work, the fact-finder
could infer that Auto Owners understood Benchmark was working on the repairs at Sephora.
Since Auto-Owners is the insurance company which covered flood damage for the location, the
evidence is sufficient for a fact-finder to find that Auto-Owners knew that Benchmark expected
compensation. Furthermore, the evidence would support a finding that Auto-Owners understood
its obligation to pay Benchmark because it requested invoices from Benchmark after the work
had been completed. While Auto-Owners may have requested invoices and had discussions with
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Benchmark about payment for some other reason, such as whether the repair work fell under the
scope of its policy, the fact-finder may find from the evidence that Auto-Owners was
acknowledging its obligation to pay for the work.
The declaration and emails proffered by Benchmark are sufficient to create a genuine
dispute of material fact as to whether Auto-Owners realized a benefit from Benchmark’s labor
given an acknowledged duty to pay for the repairs at the site. Based on the meeting, invoices and
emails exchanged between Benchmark and Auto-Owners, Auto-Owners knew of the benefit. As
the insurer for flood damage to the store, Auto-Owners had a duty to cover the cost of the repair
work.
This case is similar to Emergency Physicians Integrated Care v. Salt Lake County, 2007
UT 72, 167 P.3d 1080. In that case, Emergency Physicians Integrated Care (“EPIC”) brought suit
against Salt Lake County (“County”) seeking compensation for the value of medical services it
had provided to inmates held in the County jail. The County refused payment, claiming that the
inmates, rather than the County, were the primary beneficiaries of the medical services. The Utah
Supreme Court rejected that argument, finding that the County had a statutory duty to provide
medical care to the inmates under subsection 1(c) of Utah Code Ann. § 17-50-319. Id. at ¶ 13.
Because EPIC had performed a duty owed by the County, it had conferred a benefit on the
County for which the County had refused to pay. The County was, therefore, unjustly enriched.
The Court reasoned, “[w]hile the inmates also benefitted from the services provided by EPIC
physicians, it is not an element [of unjust enrichment] that the benefit run exclusively to the party
from which compensation is sought.” Id. at ¶ 23.
Just as the County in Emergency Physicians was unjustly enriched by medical services
provided to the inmates, Benchmark has provided sufficient evidence for a fact finder to
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conclude that Auto-Owners was unjustly enriched by the repair services it had a duty to perform
at Sephora. Auto-Owners argues that it was not unjustly enriched since it did not own the store
and did not provide insurance to Benchmark. As the court held in Emergency Physicians,
however, it is not an element of unjust enrichment that the benefit run solely to the party from
which compensation is sought. Auto-Owners acknowledges that it insured the site and, therefore,
had a duty to pay for the repair work performed at the location. By not having to perform or pay
for the repair work at Sephora, Auto-Owners realized a benefit. Auto-Owners still had a duty, to
its unidentified insured, to pay for the repair work. Benchmark’s performance of the repairs
satisfied the duty owed by Auto-Owners and relieved it of its obligation to its insured. Therefore,
the court DENIES Auto-Owners’ Motion for Summary Judgment and Benchmark is entitled to
pursue its claim on the merits of the case.
IV.
CONCLUSION
The court GRANTS Defendant’s Motion for Summary Judgment (Dkt. No. 82) in part
and DENIES it in part. The court GRANTS, without prejudice, Defendant’s motion as to
Plaintiff’s implied-in-fact contract claims. The court DENIES Defendant’s motion as to
Plaintiff’s unjust enrichment claims.
SO ORDERED this 9th day of July, 2013.
BY THE COURT:
_________________________________
Clark Waddoups
United States District Judge
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