920 N.W.2d 454
N.D.2018Background
- Chance Innis operated as Roadrunner Hotshot and transferred the business to his sister, Cammie Wold, who reorganized it as Roadrunner Hotshot & Services, LLC (RHS) on April 11, 2011.
- Louis Tornabeni, a drilling consultant, provided rental equipment that was leased to Continental Resources beginning in July 2010; payments for rents went to Innis and later to RHS after the transfer.
- Tornabeni testified an oral agreement at a Williston meeting in spring 2010 with Innis gave Tornabeni 90% of rental profits and Innis 10%; Tornabeni supplied equipment July 2010–April 2011 under that arrangement.
- After the transfer to Wold/RHS, Tornabeni continued providing equipment (through December 2012) and later sued: (1) Innis for breach of the alleged oral contract and (2) Wold and RHS for unjust enrichment from rentals after the transfer.
- The district court found an enforceable oral contract between Innis and Tornabeni and awarded Tornabeni $145,536.53 from Innis; it also found Wold and RHS unjustly enriched and held them jointly and severally liable for half of RHS’s net rental profits ($477,521.49).
- On appeal, the Supreme Court of North Dakota affirmed both the contract judgment against Innis and the unjust enrichment judgment against Wold and RHS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence and terms of an oral contract between Tornabeni and Innis | There was a spring 2010 meeting and an oral agreement giving Tornabeni 90% of rental profits; performance (equipment provision) thereafter supports the contract | No meeting or agreement occurred; testimony is unreliable and lacks specifics | Court found credible testimony for Tornabeni and Barker; district court findings not clearly erroneous — oral contract exists and was breached by Innis |
| Enforceability of oral contract (illegal/unlawful object) | N/A (plaintiff asserts valid contract) | Agreement violated Continental’s conflict/self-dealing policies and thus had unlawful object, making it unenforceable | Defendant offered no legal authority showing contract violated N.D.C.C. § 9-08-01; Court declined to extend statute to these facts — contract enforceable |
| Statute of Frauds (need for writing) | N/A | Agreement barred by N.D.C.C. § 9-06-04(1) (not performable within one year) and § 9-06-04(4) (loan over $25,000) | Court held possibility of performance within one year avoids § 9-06-04(1); no evidence agreement was a loan — statute of frauds arguments fail |
| Unjust enrichment and joint/several liability of Wold and RHS | Tornabeni: Wold/RHS received benefit from his equipment and services without justification; damages equal portion of RHS net rental profits | Wold/RHS: Tornabeni did not own equipment, had no expectation of payment, failed to show enrichment, and engaged in misconduct; Wold also argued corporate limited liability shields her | District court’s factual findings satisfied unjust enrichment elements; damages within evidence range; Wold waived limited liability defense by not timely asserting it — joint and several liability affirmed |
Key Cases Cited
- Edward H. Schwartz Constr., Inc. v. Driessen, 709 N.W.2d 733 (N.D. 2006) (existence of oral contract and its terms are factual questions reviewed for clear error)
- Knorr v. Norberg, 872 N.W.2d 323 (N.D. 2015) (standard for reviewing district court findings of fact and credibility in bench trials)
- Kohanowski v. Burkhardt, 821 N.W.2d 740 (N.D. 2012) (statute of frauds does not bar an oral contract if it could be performed within one year)
- KLE Constr., LLC v. Twalker Dev., LLC, 887 N.W.2d 536 (N.D. 2016) (elements and damages review for unjust enrichment claims)
- McColl Farms, LLC v. Pflaum, 837 N.W.2d 359 (N.D. 2013) (discussion of unjust enrichment doctrine and required elements)
- Estate of Moore, 918 N.W.2d 69 (N.D. 2018) (unjust enrichment questions reviewed de novo as to legal application of facts)
- Flaten v. Couture, 912 N.W.2d 330 (N.D. 2018) (party may waive limited liability/corporate shield defenses by failing to raise them before judgment)