KLE Construction, LLC v. Twalker Development, LLC
2016 ND 229
N.D.2016Background
- KLE Construction performed civil development work (dirt work, engineering/surveying, equipment hauling) on property owned by Twalker during negotiations for payment in four lots; no written contract was executed.
- Twalker terminated KLE’s services, completed further development, and did not pay KLE for the work performed.
- KLE sued for breach of contract, unjust enrichment, and forbearance; after a bench trial the district court dismissed the breach and forbearance claims but found unjust enrichment and awarded damages of $90,857 (judgment entered for $87,958.74 after offsets).
- Twalker appealed, arguing (1) KLE had an adequate remedy at law (could have filed a construction/mechanic’s lien) so unjust enrichment was improper, and (2) the damages award should be limited to the defendant’s enrichment rather than plaintiff’s impoverishment.
- The Supreme Court reviewed findings for clear error and conclusions of law de novo, and affirmed the district court judgment in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was unjust enrichment available where no written contract existed? | KLE: unjust enrichment applies because Twalker retained benefits and no contract remedy existed. | Twalker: KLE had an adequate legal remedy (mechanic’s lien/foreclosure), so unjust enrichment is unavailable. | Affirmed: Twalker failed to preserve the lien argument below; court did not address lien availability and upheld unjust enrichment. |
| Did KLE prove elements of unjust enrichment (enrichment, impoverishment, connection, lack of justification, lack of legal remedy)? | KLE: presented evidence showing Twalker was enriched by KLE’s work and KLE was impoverished. | Twalker: argued KLE failed to show Twalker was enriched by the services. | Affirmed: district court found each element satisfied as to specific services (dirt work, engineering, hauling). |
| Was the damages award improperly calculated by focusing on plaintiff’s loss rather than defendant’s gain? | KLE: sought recovery for employee costs, equipment use, mobilization, engineering, and management fee. | Twalker: damages should be limited to value of defendant’s enrichment, not full plaintiff loss. | Affirmed: court awarded damages only for services it found enriched Twalker; award was within evidentiary range and not clearly erroneous. |
| Are appellate attorney’s fees warranted because the appeal is frivolous? | KLE: appeal is frivolous and fees should be awarded. | Twalker: appeal had merit. | Denied: Court found the appeal not flagrantly groundless or devoid of merit. |
Key Cases Cited
- Border Res., LLC v. Irish Oil & Gas, Inc., 869 N.W.2d 758 (N.D. 2015) (standard of review for bench trials and credibility findings)
- McColl Farms, LLC v. Pflaum, 837 N.W.2d 359 (N.D. 2013) (elements of unjust enrichment explained)
- Ritter, Laber and Assoc., Inc. v. Koch Oil, Inc., 680 N.W.2d 634 (N.D. 2004) (unjust enrichment requires restitution of benefits received in absence of contract)
- A & A Metal Bldgs. v. I-S, Inc., 274 N.W.2d 183 (N.D. 1978) (damages measured by defendant’s unjust enrichment affirmed)
- Prairie Supply, Inc. v. Apple Elec., Inc., 867 N.W.2d 335 (N.D. 2015) (damages finding as fact reviewed for clear error)
- Valley Honey Co., LLC v. Graves, 666 N.W.2d 453 (N.D. 2003) (Supreme Court will not disturb a damages award unless it lacks evidentiary support)
- Gray v. Berg, 878 N.W.2d 79 (N.D. 2016) (standard for awarding appellate fees for frivolous appeals)