Hinebaugh v. McRae
2011 MT 270
Mont.2011Background
- Hinebauchs entered a buy-sell agreement in Nov 2005 to purchase the Shores building for $85,000 but never closed; $500 earnest money was paid but not applied.
- McRaes later bought the building from the McFarlands for $85,000; no part of the Hinebauchs’ deposit was applied to this purchase.
- In 2006 the Hinebauchs began paying rent to McRaes; the McRaes proposed a five-year lease with option to purchase at end, including specific insurance and remodel obligations.
- The Hinebauchs proposed changes but did not sign, and no written lease or sale contract was ever executed; the parties operated under an unwritten rental arrangement for over three years.
- Fire damaged the building in March 2009; McRaes claimed the Hinebauchs were behind on payments; insurance proceeds were collected by McRaes and later the lot was sold.
- Hinebauchs alleged an oral purchase agreement and sought breach of contract and unjust enrichment; District Court granted summary judgment for McRaes on both claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the district court err under the statute of frauds by granting summary judgment on breach of contract? | Hinebauchs contend oral terms were enforceable despite lack of writing. | McRaes argue no enforceable contract exists without writing and signature. | Yes; statute of frauds bars enforcement. |
| Did the district court err on unjust enrichment for lack of misconduct? | Hinebauchs allege McRaes benefited from insurance and sale proceeds at their expense. | McRaes contend no misconduct or fault; they were owners and acted properly. | No error; no misconduct shown; unjust enrichment claim fails. |
| Did the district court err in concluding Hinebauchs had unclean hands to bar unjust enrichment? | Hinebauchs claim unjust enrichment is warranted despite their conduct. | McRaes argue unclean hands due to the oral, unenforceable arrangement and failed obligations. | Not reached; premise of unjust enrichment fails. |
Key Cases Cited
- In re Estate of Braaten, 322 Mont. 364, 96 P.3d 1125 (Mont. 2004) (statute of frauds and writing requirement relevance)
- Orlando v. Prewett, 218 Mont. 5, 705 P.2d 593 (Mont. 1985) (written evidence required for real-property promises)
- Great Falls Waterworks Co. v. Great N. Ry., 21 Mont. 487, 54 P. 963 (Mont. 1898) (statutory interpretation and property-title certainty)
- Roseneau Foods v. Coleman, 140 Mont. 572, 374 P.2d 87 (Mont. 1962) (tenancy implied by unwritten commercial arrangements)
- Eagle Watch Invs. v. Smith, 278 Mont. 187, 924 P.2d 257 (Mont. 1996) (unjust enrichment and fault requirements)
- Wells Fargo Bank v. Talmage, 336 Mont. 125, 152 P.3d 1275 (Mont. 2007) (summary judgment and contract defenses)
- Hinderman v. Krivor, 358 Mont. 111, 244 P.3d 306 (Mont. 2010) (de novo review on summary judgment)
- Ternes v. State Farm Fire & Cas. Co., 361 Mont. 129, 257 P.3d 352 (Mont. 2011) (contract and equitable relief standards)
- Estate of Pruyn v. Axmen Propane, Inc., 354 Mont. 208, 223 P.3d 845 (Mont. 2009) (elements of unjust enrichment and fault)