386 P.3d 649
Or. Ct. App.2016Background
- Madeline and Neal Grimstad owned a Durham, OR house as joint tenants; Neal predeceased Madeline so the house passed to Madeline. Madeline’s second codicil provided the Durham property would pass to Neal’s lineal descendants (plaintiffs) if she owned it at death. Defendants are Madeline’s biological children and named attorneys-in-fact under a power of attorney.
- The durable power of attorney authorized defendants to manage Madeline’s finances, sell real property, and make gifts; cover letter stated powers were to be used for Madeline’s benefit.
- Madeline was diagnosed with Alzheimer’s; defendants, using the power of attorney, sold the Durham property in May 2007, deposited proceeds in accounts in Madeline’s name, and paid Madeline’s long-term care expenses from those proceeds. Other Madeline income (Social Security, trust/pension) was deposited into a joint US Bank account with defendants and used for expenses related to the Sisters property.
- Plaintiffs sued asserting intentional interference with prospective inheritance, accounting, and constructive trust; after amendments, they pursued unjust enrichment and money had and received. The trial court granted plaintiffs relief on unjust enrichment and money had and received and awarded specific monetary sums; defendants appealed and plaintiffs cross-appealed the grant of summary judgment on the interference claim.
- The appellate court reviewed the bench-trial findings and summary judgment record: it held plaintiffs could bring a third-party unjust enrichment claim in theory but must show a better legal or equitable right to the property/proceeds; it concluded plaintiffs failed to show any legal/equitable right to the sale proceeds and therefore reversed the unjust enrichment and money-had-and-received rulings.
- On cross-appeal, the court affirmed the trial court’s grant of summary judgment for defendants on the intentional-interference-with-prospective-economic-advantage claim because plaintiffs failed to raise a genuine issue that defendants acted with improper means or improper purpose.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can unjust enrichment be pleaded where plaintiff did not confer the benefit? | Tupper allows third-party unjust enrichment claims where retention of property by defendant is unconscionable. | Plaintiffs conferred no benefit; unjust enrichment requires plaintiff to have conferred benefit. | A plaintiff may bring a third-party unjust enrichment claim, but must show a better legal or equitable right to the property/proceeds. |
| Did plaintiffs have a superior legal/equitable right to the Durham sale proceeds? | Madeline’s expressed intent and codicil showed property was intended for plaintiffs; defendants’ promises to third parties implied obligation to reserve proceeds. | Madeline owned the property at sale; POA authorized sale and use of proceeds for Madeline’s care; no instrument required preservation of proceeds for plaintiffs. | Plaintiffs failed to identify any legal/equitable source of right to proceeds; no superior right; unjust enrichment award reversed. |
| Were defendants unjustly enriched by diverting Social Security/trust income to Sisters property? | Defendants misused Madeline’s income to enhance property they would inherit; that enriched defendants at plaintiffs’ expense. | Any fiduciary breach was owed to Madeline (principal), not plaintiffs; enrichment, if any, belonged to Madeline’s estate, not plaintiffs. | Plaintiffs lacked standing to claim those funds; any fiduciary claim runs to Madeline/estate; award for Social Security payments was erroneous. |
| Did defendants tortiously interfere with plaintiffs’ expectancy of inheritance? | Selling the house and placing proceeds in accounts that would benefit defendants was improper means/purpose (self-dealing to enhance inheritance). | Sale and use of proceeds were authorized by POA and consistent with providing for Madeline’s care; no improper means or purpose. | Summary judgment for defendants affirmed: plaintiffs failed to create a factual dispute that defendants used improper means or had an improper purpose. |
Key Cases Cited
- Tupper v. Roan, 349 Or. 211 (Or. 2010) (recognizes third-party unjust enrichment theory and requires plaintiff show property rightfully belonging to her and not acquired by bona fide purchaser without notice)
- Allen v. Hall, 328 Or. 276 (Or. 1999) (intentional interference with prospective economic advantage can extend to expectancy of inheritance)
- Winters v. County of Clatsop, 210 Or. App. 417 (Or. Ct. App. 2007) (articulates three-element unjust enrichment test including benefit conferred)
- Jaqua v. Nike, Inc., 125 Or. App. 294 (Or. Ct. App. 1993) (unjust enrichment subelements: expectation of payment, defendant’s expectation to pay, or societal security interest)
- Cron v. Zimmer, 255 Or. App. 114 (Or. Ct. App. 2013) (third-party enrichment claims and source of plaintiffs’ interest in property)
- Belmont Int’l v. Am. Int’l, 313 Or. 112 (Or. 1992) (money-had-and-received requires defendant hold money that in equity and good conscience belongs to plaintiff)