920 N.W.2d 454
N.D.2018Background
- Plaintiff Louis Tornabeni, a drilling consultant, supplied rental equipment used on Continental Resources rigs and claims he arranged rentals/payments to Roadrunner Hotshot entities.
- Chance Innis operated Roadrunner Hotshot (sole proprietorship) until he transferred it to his sister, Cammie Wold, who reorganized it as Roadrunner Hotshot & Services, LLC (RHS) on April 11, 2011.
- Tornabeni alleges an oral agreement with Innis (spring 2010 meeting) that Tornabeni would provide equipment and receive 90% of rental profits, with Innis receiving 10%; Tornabeni provided equipment July 2010–April 2011.
- After the transfer, Tornabeni continued supplying equipment and arranging rentals through RHS until January 1, 2013, then stopped; his romantic relationship with Wold ended in June 2013.
- Procedural posture: Tornabeni sued Innis for breach of the oral contract and sued Wold and RHS for unjust enrichment; district court awarded Tornabeni $145,536.53 from Innis and $477,521.49 jointly and severally from Wold and RHS; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence/enforceability of oral contract between Tornabeni and Innis | Tornabeni: parties met and agreed to 90/10 profit split; performed under agreement | Innis: denies meeting/agreement; disputes credibility; claims contract unlawful or barred by statute of frauds | Court affirmed: factual finding of oral contract not clearly erroneous; contract enforceable |
| Lawfulness of the oral contract (conflict with Continental policies) | Tornabeni: no contention contract violated law; focused on performance/compensation | Innis: agreement violated Continental conflict-of-interest/self-dealing rules and thus was unlawful/unenforceable | Court rejected defendant’s unsupported contention; no authority showing contract unlawful |
| Statute of Frauds defenses (N.D.C.C. §§ 9-06-04(1), (4)) | Tornabeni: contract could be performed within a year; not a loan | Innis: alleged contract required writing because not performable within one year and was a loan >$25,000 | Court held defenses meritless: possibility of one-year performance avoids § 9-06-04(1); contract not a loan under § 9-06-04(4) |
| Unjust enrichment and joint/several liability of Wold and RHS | Tornabeni: Wold/RHS were enriched by rental profits generated largely from Tornabeni’s equipment/work; Tornabeni impoverished; no adequate remedy at law | Wold/RHS: challenge ownership proof, lack of enrichment, plaintiff’s misconduct, and that Wold’s individual liability is barred by corporate limited liability | Court affirmed unjust enrichment finding and damages as supported by evidence; Wold waived limited-liability defense by not timely raising it |
Key Cases Cited
- Edward H. Schwartz Constr., Inc. v. Driessen, 709 N.W.2d 733 (N.D. 2006) (existence of oral contract and related factual findings reviewed under clearly erroneous standard)
- Knorr v. Norberg, 872 N.W.2d 323 (N.D. 2015) (standard for reviewing district court factual findings and credibility in bench trials)
- Kohanowski v. Burkhardt, 821 N.W.2d 740 (N.D. 2012) (statute of frauds: oral contract permissible if there is any possibility of performance within one year)
- KLE Constr., LLC v. Twalker Dev., LLC, 887 N.W.2d 536 (N.D. 2016) (elements and review of unjust enrichment claims; damages reviewed for clear error)
- McColl Farms, LLC v. Pflaum, 837 N.W.2d 359 (N.D. 2013) (discussion of unjust enrichment elements)
- Flaten v. Couture, 912 N.W.2d 330 (N.D. 2018) (party sued individually may waive limited-liability defense by failing to raise it before judgment)
- Estate of Moore, 918 N.W.2d 69 (N.D. 2018) (unjust enrichment factual determinations subject to de novo legal review and clear-error factual review)