543 S.W.3d 508
Ark. Ct. App.2018Background
- Jeff and Susie Phillips and J.E. and Val Denton lived on one parcel bought in 1995; J.E. and Val were on the promissory note and deed.
- Phillips testified to an oral agreement that each couple would pay one-half of the mortgage and each would own half of the land; Phillips and Susie paid monthly amounts from 1995–2010.
- Phillips produced sequential receipt booklets documenting roughly $25,000 (about one-half of the total note payments); payments ceased after a mortgage satisfaction in 2010.
- J.E. (adverse witness) admitted Phillips paid money to the Dentons and admitted giving Phillips the receipt booklets, but denied any deal with Phillips or that the payments were for Phillips’s equity or taxes.
- At the close of Phillips’s case in a bench trial, the circuit court granted Denton’s motion to dismiss, finding Phillips failed to prove entitlement to a constructive trust or clear-and-convincing proof of unjust enrichment; the court dismissed all claims with prejudice.
- The court of appeals reversed, holding Phillips made a prima facie unjust-enrichment case such that dismissal at the close of his proof was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff produced sufficient evidence at close of plaintiff's case to survive a motion to dismiss on unjust-enrichment grounds | Phillips argued his receipts, long course of payments (~$25k), and oral agreement showed he conferred benefit and that J.E. would be unjustly enriched if allowed to retain money and title | Denton argued Phillips failed to prove fraud, confidential/fiduciary relationship, or other grounds to impose a constructive trust and that proof must be clear and convincing | Court held Phillips presented prima facie evidence of unjust enrichment and the motion to dismiss was improperly granted; reversed and remanded |
| Whether a constructive trust (or other equitable remedy) is required to prove unjust enrichment | Phillips contended money-measured restitution is available and a constructive trust is only one remedy if legal relief is inadequate | Denton emphasized need for clear-and-convincing proof for a constructive trust and relied on absence of such proof | Court clarified a constructive trust is only one remedy; plaintiff need only make a prima facie unjust-enrichment showing to proceed; remedy issues are for later determination |
| Proper standard when evaluating a motion to dismiss after plaintiff rests in a bench trial | Phillips argued court must view evidence in light most favorable to plaintiff and not weigh credibility | Denton argued evidence was insufficient as a matter of law | Court applied the Rymor standard: judge must consider whether evidence would be sufficient for a jury, without assessing credibility, and found Phillips met that standard |
| Whether a confidential relationship was shown sufficient to support equitable relief | Phillips pointed to family relationship, long-running payments, and trust between parties | Denton disputed existence of such a relationship and denied any agreement with Phillips | Court found there was sufficient evidence to submit the question of a confidential relationship to the fact-finder |
Key Cases Cited
- Rymor Builders, Inc. v. Tanglewood Plumbing Co., 265 S.W.3d 151 (2007) (bench-trial directed-verdict motion must be treated as motion to dismiss; court must assess whether evidence suffices to send issue to jury without resolving credibility)
- Hatchell v. Wren, 211 S.W.3d 516 (2005) (defines unjust enrichment and when restitution is appropriate)
- Hartness v. Nuckles, 475 S.W.3d 558 (2015) (plaintiff meets burden in unjust-enrichment claim by presenting coherent theory allowing reasonable approximation of restitution)
- Stokes v. Stokes, 491 S.W.3d 113 (2016) (unjust enrichment may be inferred from conduct, circumstances, and relationships)
- Sanders v. Bradley Cty. Human Servs. Pub. Facilities Bd., 956 S.W.2d 187 (1997) (restitution for unjust enrichment generally allows recovery of value of benefit conferred)
- Dews v. Halliburton Indus., Inc., 708 S.W.2d 67 (1986) (equitable restitution doctrines are liberally applied)
- Little Rock Mun. Airport Comm'n v. Ark. Valley Compress & Ware. Co., 277 S.W.2d 836 (1955) (doctrine of unjust enrichment broadly remedial)