KENWORTH SALES COMPANY, a Utah corporation, doing business in the State of Idaho, Plaintiff-Appellant, v. SKINNER TRUCKING, INC., an Idaho corporation; JAMES E. SKINNER, an individual; and DAVID C. SKINNER, an individual, Defendants-Respondents. KENWORTH SALES COMPANY, a Utah corporation, doing business in the State of Idaho, Plaintiff-Respondent, v. SKINNER TRUCKING, INC., an Idaho corporation; JAMES E. SKINNER, an individual; and DAVID C. SKINNER, an individual, Defendants-Appellants.
Docket Nos. 45764 & 45883
IN THE SUPREME COURT OF THE STATE OF IDAHO
December 11, 2019
Twin Falls, September 2019 Term. Karel A. Lehrman, Clerk
The judgment and order of the district court are affirmed.
Benoit, Alexander, Harwood, High & Mollerup, PLLC, Twin Falls, for appellant. Michael Danielson argued.
BRODY, Justice.
This appeal concerns an unjust enrichment claim brought by Kenworth, a commercial truck dealer, against Skinner Trucking, one of its customers. Kenworth claims Skinner was unjustly enriched when Kenworth paid past due lease payments and the residual balance owed on Skinner’s lease with GE Transportation Finance. The district court entered judgment for Skinner on the grounds that, as to the residual value of the trucks, Kenworth had not conferred a benefit on Skinner, and that as to both the residual value of the trucks and the past due lease payments, Kenworth was an “officious intermeddler” because it had voluntarily paid GE without request by Skinner and without a valid reason. In a subsequent order, the district court denied Skinner’s request for attorney fees under
I. FACTUAL AND PROCEDURAL BACKGROUND
Kenworth Sales Company (“Kenworth“) is a commercial truck dealer. In August of 2011, Kenworth sold three trucks to GE Transportation Finance (“GE“), a financing company, for lease to Skinner Trucking. Kenworth negotiated Skinner’s lease with GE on Skinner’s behalf, but the lease was signed only by Skinner and GE.
Skinner’s lease with GE was known as a “TRAC” lease (terminal rental adjustment clause). In a TRAC lease, the vehicle’s post-lease residual value is determined at the beginning of the lease. Once the lease ends, the lessee has three options: re-finance the vehicle based on its residual value, buy the vehicle by paying an amount equal to the vehicle’s residual value, or return the vehicle to the lessor to be sold. If the lessee chooses the third option, and the vehicle is sold for less than its residual amount, the lessee will owe the lessor the difference. If the vehicle is sold for more than the residual amount, the lessor will owe the lessee the difference. In this case, the lease provided that the residual value for each truck was $58,051.20 and that the monthly rental payment for each truck was $2,357.72.
Skinner turned in two of the trucks in October of 2015, and the third truck in December of 2015. The trucks were turned in to Kenworth, where Skinner typically turned in its trucks.
In January 2016, Kenworth appraised one of the trucks and determined that the trucks were each worth $42,000at the time Skinner turned them in. Two days later, Kenworth invoiced Skinner for $55,226.77: the difference between the three trucks’ combined residual value and what Kenworth estimated the trucks were worth ($174,153.60 - $126,000.00), plus the back rent owed on one of the trucks ($7,073.17). Neither party disputes that there is no writing showing an agreement between Skinner and Kenworth that Kenworth would pay Skinner’s “obligation” to GE or that Skinner would pay Kenworth back.
About six months later, Kenworth filed a complaint in district court claiming that Skinner was unjustly enriched by Kenworth’s payments to GE, and requested a judgment against Skinner in the amount of $55,226.77. After a bench trial, the district court entered judgment in favor of Skinner, denying Kenworth’s unjust enrichment claim and dismissing it with prejudice. In its findings of fact, the district court found that Skinner owed approximately $7,000 in back rent and that Kenworth made the payments to GE because “Kenworth was sympathetic to Skinner’s position and did not wish to see Skinner get into a worse financial position by having the trucks sold at auction.” And that “[t]he most substantial evidence supporting the reason for [Kenworth’s decision to make the payments to GE] was that Skinner was a good customer and they wanted to help them.” Additionally, the district court found that there was no agreement between Skinner and Kenworth about what would happen if the trucks could not be sold for enough money to repay Kenworth. The court reasoned that while the trial record was not clear about the discussions between Skinner and Kenworth, Skinner had never asked Kenworth to pay off its debt. The most substantial evidence supporting Kenworth’s decision to make the payments was that “Skinner was a good customer and they wanted to help them.”
As to payment for the trucks’ residual lease values, the court concluded that Kenworth
Following entry of judgment in its favor, Skinner filed a motion for fees and costs and a motion for reconsideration, asking the district court to reconsider its order that each party bear its costs and asking it to award Skinner attorney fees, citing
II. STANDARD OF REVIEW
Following a bench trial, this Court will not set aside a trial court’s findings of fact unless they are clearly erroneous. Turcott v. Estate of Bates, 165 Idaho 183, 443 P.3d 197, 202 (2019);
“[W]hen reviewing a trial court’s decision to grant or deny a motion for reconsideration, this Court utilizes the same standard of review used by the lower court in deciding the motion for reconsideration.” Fragnella v. Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012). “An award of attorney fees and costs is within the discretion of the trial court and subject to an abuse of discretion standard of review.” Dickinson Frozen Foods, Inc. v. J.R. Simplot Co., 164 Idaho 669, 676, 434 P.3d 1275, 1282 (2019), as amended (Apr. 22, 2019). This Court uses a four-part test to review an alleged abuse of discretion by the district court:
Whether the trial court: (1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion; (3) acted consistently with the legal standards applicable to the specific choices available to it; and (4) reached its decision by the exercise of reason.
Lunneborg, 163 Idaho at 863, 421 P.3d at 194. “However, when an award of attorney fees depends on the interpretation of a statute, the standard of review for statutory interpretation applies.” Med. Recovery Servs., LLC v. Lopez, 163 Idaho 281, 283, 411 P.3d 1182, 1183 (2018). “The interpretation of a statute is a question of law over which this Court exercises free review.” Id.
III. ANALYSIS
A. The officious intermeddler rule is not an affirmative defense.
The district court found that Kenworth’s unjust enrichment claim failed because the company was an “officious intermeddler.” Kenworth argues that the officious intermeddler rule
We have made it clear that
To determine whether the officious intermeddler rule constitutes an affirmative defense, we have to begin with the doctrine of unjust enrichment. We have long held that a prima facie case for unjust enrichment exists where: “(1) there was a benefit conferred upon the defendant by the plaintiff; (2) appreciation by the defendant of such benefit; and (3) acceptance of the benefit under circumstances that would be inequitable for the defendant to retain the benefit without payment to the plaintiff for the value thereof.” Med. Recovery Servs., LLC v. Bonneville Billing & Collections, Inc., 157 Idaho 395, 398, 336 P.3d 802, 805 (2014) (citations omitted) (emphasis added). It is well understood that “[u]njust enrichment will not apply in the instance of an officious intermeddler.” Teton Peaks Inv. Co., LLC v. Ohme, 146 Idaho 394, 398, 195 P.3d 1207, 1211 (2008). “The officious intermeddler rule essentially provides that a mere volunteer who, without request therefor, [sic] confers a benefit upon another is not entitled to restitution. This rule exists to protect persons who have had unsolicited ‘benefits’ thrust upon them.” Id.
Kenworth acknowledges that Idaho courts have not explicitly held that the officious intermeddler rule constitutes an affirmative defense, but argues that they have treated it as such, citing to our decision in Teton Peaks and the Court of Appeals’ decisions in Curtis v. Becker, 130 Idaho 378, 382, 941 P.2d 350, 354 (Ct. App. 1997) and Chinchurreta v. Evergreen Management, Inc., 117 Idaho 591, 790 P.2d 372 (Ct. App. 1989). Kenworth argues that the discussion of the officious intermeddler rule in these cases occurs separately from the list of elements that a plaintiff must satisfy in order to prevail on an unjust enrichment claim. Therefore, the rule must be a separate affirmative defense. We disagree.
The officious intermeddler rule will defeat a plaintiff’s claim, but this is true not because the rule is an affirmative defense, but rather because the voluntary nature of the payment bears directly on whether it would be inequitable for the defendant to retain the benefit of the payment. Stated differently, Kenworth had the burden of proving at trial circumstances which would make it inequitable for Skinner to benefit from Kenworth’s payments to GE. This would require more than evidence of a voluntary payment. See, e.g., Chinchurreta, 117 Idaho at 593 (“It is well settled that a person cannot—by way of set-off, counterclaim or direct action—recover money
B. The district court did not err when it concluded that Kenworth was an officious intermeddler.
Kenworth asserts that even if this Court holds that the officious intermeddler rule is not an affirmative defense, the district court erred in applying it to the facts of this case. Kenworth argues that the district court incorrectly found that Kenworth had no valid reason for purchasing the trucks from GE because it ignored the reason that Kenworth gave: to keep Skinner, “a long time customer,” in business. Kenworth also disputes the district court’s statement that there was “no indication that Skinner would continue to do business with [Kenworth].” Given the basis for the doctrine, we agree with the district court that merely keeping Skinner in business was not the kind of interest sufficient to avoid application of the officious intermeddler rule.
The term “officious intermeddler” first appeared in Idaho case law in the Court of Appeals’ decision in Chinchurreta v. Evergreen Management, Inc., 117 Idaho 591, 790 P.2d 372 (Ct. App. 1989). Explaining the basis for the rule, the Court of Appeals cited section 2 of the First Restatement of Restitution which states that:
A person who officiously confers a benefit upon another is not entitled to restitution therefor.
Restatement (First) of Restitution § 2 (1937). Comment “a” to this provision describes “officiousness” as unjustified interference in the affairs of others and explains that there must be a “valid reason” for conferring a benefit in order to prevail on a claim for unjust enrichment:
Officiousness means interference in the affairs of others not justified by the circumstances under which the interference takes place. Policy ordinarily requires that a person who has conferred a benefit either by way of giving another services or by adding to the value of his land or by paying his debt or even by transferring property to him should not be permitted to require the other to pay therefor, unless the one conferring the benefit had a valid reason for so doing. A person is not
required to deal with another unless he so desires and, ordinarily, a person should not be required to become an obligor unless he so desires. The principle stated in this Section is not a limitation of the general principle stated in § 1; where a person has officiously conferred a benefit upon another, the other is enriched but is not considered to be unjustly enriched. The rule denying restitution to officious persons has the effect of penalizing those who thrust benefits upon others and protecting persons who have had benefits thrust upon them (see § 112).
Restatement (First) of Restitution § 2 (1937) (emphasis added). “Valid reasons” are found in comment “a” to section 112 and include mistake, fraud, coercion (caused by duress or the necessity of protecting the interest of the person who conferred the benefit), and an agreement with the person receiving the benefit. Restatement (First) of Restitution § 112, cmt. a (1937).
Compared to the types of interests listed in section 112, Kenworth’s interest in the payment of Skinner’s obligation to GE is too attenuated to constitute a “valid reason” to hold Kenworth liable for restitution: Kenworth was not protecting an interest in its own property, and it was not liable in any way to GE. Although Kenworth could be said to have been protecting its interest in future profits by ensuring that Skinner Trucking survived to continue as a Kenworth customer, but recovery for an incidental benefit to another party in pursuit of one’s own financial advantage is specifically disallowed under Idaho precedent. See Hettinga v. Sybrandy, 126 Idaho 467, 471, 886 P.2d 772, 776 (1994)). Regardless, there was no evidence in the record suggesting that Skinner was a key client whose business was essential to Kenworth’s economic viability. Moreover, several Kenworth employees specifically disclaimed any profit motive and there is substantial evidence to support the district court’s determination that there was no evidence that Kenworth expected Skinner to continue doing business with them. Therefore, Kenworth’s desire to keep Skinner in business was not an interest sufficient to relieve Kenworth of officious intermeddler status.
C. Costs and attorney fees.
1. The district court did not err in determining that Skinner was not entitled to attorney fees under Idaho Code section 12-120(3) .
Skinner argues that the district court improperly denied it fees under
In any civil action to recover on an open account, account stated, note, bill, negotiable instrument, guaranty, or contract relating to the purchase or sale of goods, wares, merchandise, or services and in any commercial transaction unless
otherwise provided by law, the prevailing party shall be allowed a reasonable attorney’s fee to be set by the court, to be taxed and collected as costs. The term “commercial transaction” is defined to mean all transactions except transactions for personal or household purposes.
The district court found that there was no commercial transaction between Skinner and Kenworth. Therefore, there was no basis to award attorney fees under
First, Kenworth’s sale of the trucks to GE was undoubtedly a commercial transaction, but it was not the gravamen of Kenworth’s claim. Rather, Kenworth’s claim arose from the payments it made to GE four years later, allegedly to help Skinner. Because Kenworth’s sale of the trucks to GE was not the gravamen of its claim, the sale cannot support a claim for attorney fees under
Likewise, the lease does not provide a basis for Skinner to recover attorney fees under
As our flooring source, what that verbiage really means is that they don’t have a representative from GE fly into Boise and look at these trucks to confirm that yeah, they are what we say they are. We have an agreement with them that they trust us to say yeah, we’ve looked at the trucks, they are what we say they are. That’s what that means.
Finally, Kenworth did not allege that it was entitled to recover based on a commercial transaction between itself and Skinner. For there to be a transaction, there must be some kind of agreement, deal, or exchange. See Transaction, Black’s Law Dictionary (11th ed. 2019) (defining “transaction” as “[s]something performed or carried out; a business agreement or exchange“). Here, Kenworth consistently argued that it told Skinner that it would pay GE in order to help Skinner and that Skinner understood that this was Kenworth’s intention, but Kenworth stopped short of explicitly arguing that Skinner agreed to Kenworth’s plan. Rather, according to Kenworth, Skinner simply understood Kenworth’s plan and did not stop Kenworth from executing it. Therefore, even though Skinner and Kenworth were in a commercial relationship, it cannot be said that Kenworth alleged a commercial transaction as the basis of its claim. See SilverWing at Sandpoint, LLC v. Bonner Cnty., 164 Idaho 786, 800, 435 P.3d 1106, 1120 (2019) (“Here, even though the parties had a commercial relationship, they never consummated a commercial transaction for purposes of Idaho Code section 12-120(3).“). Because Kenworth did not allege that there was a commercial transaction between itself and Skinner, the district court correctly concluded that Skinner is not entitled to attorney fees under
2. The district court did not err by denying Skinner attorney fees under Idaho Code section 12-121 .
Skinner claims that the district court also erred by denying its claim for attorney fees under
3. Neither party is entitled to costs or attorney fees on appeal.
Both Skinner and Kenworth claim costs on appeal pursuant to
IV. CONCLUSION
We affirm the district court’s judgment in favor of Skinner and its order denying Skinner’s motion to reconsider regarding attorney fees. Neither party is awarded costs or attorney fees on appeal.
Chief Justice BURDICK, and Justices BEVAN, STEGNER, and MOELLER CONCUR.
