960 N.W.2d 792
N.D.2021Background
- Kent and Erica McDougall (children) farmed and financed operations with AgCountry beginning in 2013; they were in default by 2016.
- AgCountry’s loan officer encouraged additional collateral to facilitate refinancing; Michael and Bonita McDougall (parents and title owners) agreed to transfer the “home quarter” to Kent and Erica with an understanding AgCountry would fund refinancing.
- Warranty deed and AgCountry mortgage on the home quarter were recorded April 5–6, 2016; two days later the loans were placed in special credit and a refinance request was denied.
- Kent and Erica filed bankruptcy and an adversary action; the McDougalls’ related claims were dismissed for lack of bankruptcy jurisdiction and later pursued in state court.
- This Court in a prior appeal reversed summary dismissal of deceit and unjust enrichment claims and remanded. At trial the jury rejected deceit, but the judge (in a bench phase) found unjust enrichment and awarded $170,397.76, prejudgment interest from April 6, 2016, and costs; AgCountry appealed.
Issues
| Issue | Plaintiff's Argument (McDougalls) | Defendant's Argument (AgCountry) | Held |
|---|---|---|---|
| Whether collateral estoppel or law-of-the-case bars McDougalls’ claims | Law of the case prevents relitigation; prior rulings left deceit/unjust enrichment for trial | Bankruptcy court’s findings against Kent/Erica preclude McDougalls by collateral estoppel | Law of the case bars AgCountry’s collateral-estoppel argument; claims were properly relitigated on remand |
| Sufficiency of unjust enrichment (elements: enrichment, impoverishment, causal link, lack of justification, absence of legal remedy) | Transfer was induced by AgCountry’s representations; McDougalls were impoverished, AgCountry enriched, causal link existed, no justification, and no remaining legal remedy | Jury verdict on deceit and intervening acts defeat findings; no impoverishment or causal connection; enrichment justified; legal remedies existed | Court’s factual findings on all elements were not clearly erroneous; unjust enrichment established |
| Prejudgment interest award for unjust enrichment (date and availability) | Interest is proper because amount was certain and vested on the mortgage perfection date (recording) | Unjust enrichment is equitable so prejudgment interest statute does not apply | Award of prejudgment interest from April 6, 2016 upheld as within court’s discretion because amount and vesting date were certain |
| Award of costs and inclusion of deposition expenses from bankruptcy proceedings and costs from prior appeal | Prior depositions were necessarily used at trial; costs allowed under state statute | Those costs should have been sought in bankruptcy; district court improperly taxed costs that this Court denied in prior appeal | District court did not abuse discretion in awarding costs for depositions used at trial, but cost judgment reduced by $125 to reflect denial of costs in the prior appeal |
Key Cases Cited
- McDougall v. AgCountry Farm Credit Servs., PCA, 937 N.W.2d 546 (N.D. 2020) (this Court reversed dismissal and remanded deceit and unjust enrichment claims)
- Apache Corp. v. MDU Res. Grp., Inc., 603 N.W.2d 891 (N.D. 1999) (articulates five-element unjust enrichment test and limits where enrichment is not inequitable)
- Thimjon Farms P’ship v. First Int’l Bank & Trust, 837 N.W.2d 327 (N.D. 2013) (importance of direct causal connection for unjust enrichment)
- Tom Beuchler Constr., Inc. v. City of Williston, 413 N.W.2d 336 (N.D. 1987) (definition and application of law-of-the-case doctrine)
- Midland Diesel Serv. & Engine Co. v. Sivertson, 307 N.W.2d 555 (N.D. 1981) (third-party participation in a transaction can support unjust enrichment)
- McColl Farms, LLC v. Pflaum, 837 N.W.2d 359 (N.D. 2013) (unjust enrichment may be pleaded as an alternative remedy)
- Viscito v. Christianson, 881 N.W.2d 633 (N.D. 2016) (mandate rule requires trial court to follow appellate pronouncements)
- Nelson v. Mattson, 910 N.W.2d 171 (N.D. 2018) (standard of review for findings of fact: clearly erroneous)
- Carlson v. Workforce Safety & Ins., 821 N.W.2d 760 (N.D. 2012) (discussion of mandate rule and appellate mandates)