Galante v. Oz, Inc.

379 N.W.2d 723, 1986 Minn. App. LEXIS 3920
CourtCourt of Appeals of Minnesota
DecidedJanuary 21, 1986
DocketC3-85-643
StatusPublished
Cited by16 cases

This text of 379 N.W.2d 723 (Galante v. Oz, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Galante v. Oz, Inc., 379 N.W.2d 723, 1986 Minn. App. LEXIS 3920 (Mich. Ct. App. 1986).

Opinion

OPINION

HUSPENI, Judge.

Appellants Carol Galante and Concord Group, Inc. appeal from the trial court’s denial of amended findings or, in the alternative, a new trial. The trial court ruled *725 that appellants were entitled to recover the $35,000 paid to respondent, Virgil Doerfler, as a down payment towards purchase of the Oz nightclub. Doerfler was allowed a $30,000 setoff against this amount for an unpaid personal loan he made to Joe Ga-lante. The trial court also found that Doer-fler had not been unjustly enriched and denied Galante recovery on a quasi-contract claim. We affirm.

FACTS

In early 1980, Doerfler entered into negotiations with Joseph Galante to sell Ga-lante the Oz nightclub. The sales agreement conditioned the sale on the successful transfer of the on-sale liquor license from Doerfler to Galante. The agreement also provided that pending this transfer, Ga-lante would be permitted to observe and learn the operations of the Oz. On March 18, 1980, Derek Jones on behalf of Galante took over as manager of the Oz and continued in that position until October 27, 1980. During this period, Doerfler moved to Phoenix, Arizona and took no active part in managing the Oz.

The attempt to transfer the liquor license was unsuccessful. The application for the transfer named Carol Galante and the Concord Group as the prospective owners. When the City of St. Paul inspector investigated, however, he found that Joe Galante would in fact be operating the Oz. At that time Joe Galante was facing drug charges. The parties were notified that because of those charges the license transfer would not be recommended. To avoid a refusal of the transfer, the parties withdrew the application. They believed that once the drug charges were resolved, a transfer would still be possible.

In fact, the parties never reapplied for a transfer of the license. On October 27, 1980, Doerfler ordered Jones to vacate the premises. Doerfler’s son, Mark, then took over management of the Oz until it was sold to another party.

Derek Jones did not testify at trial. However, his deposition was admitted into evidence. Jones stated he had, in the past, worked for Joe Galante and was hired by Galante to manage the Oz. Jones stated he was supposed to receive a salary for his services, but because of cash flow problems he agreed to take a bonus upon completion of the sale. Further, Jones billed many of his daily expenses to the Oz. The expenses included living in the penthouse above the Oz, leasing a limousine, hiring a driver for the limousine, dry cleaning, membership in the St. Paul Athletic Club, and the purchase of tuxedoes. When Jones’ management services ceased, he never made a claim upon either Galante or Doerfler for wages.

During the sale negotiations, several different sums of money were exchanged between the parties. Galante made a sale down payment of $35,000 to Doerfler. Jones wrote a check from an Oz account to Galante for $8,000 to reimburse him for cash advances he had made to vendors. Doerfler made a $30,000 personal loan to Galante under rather unusual circumstances. Doerfler made out three checks for $9,500 each to himself, Galante and Kurt Henriksson, a former employee of Doer-fler’s. Henriksson and Doerfler then cashed their checks and gave the money to Galante. Doerfler testified he also gave Galante $1,500 in cash. Allegedly this was done to prevent an inquiry from the tax department and banking authorities. In addition, Doerfler testified that Galante told him he needed money for a divorce. Galante claimed the loan was to buy cocaine for Doerfler.

Galante also presented expert testimony through an accountant whose testimony was based upon his review of several documents including the parties’ depositions, financial statements from the accounting firm Jones retained while managing the Oz, the purchase agreement, tax returns, a check register which he did not audit and which did not include all the actual checks, and a January 31,1980, balance sheet from the Oz which was also unaudited.

There was extensive testimony that Joe Galante rather than Carol Galante was the active participant in the transaction with Doerfler. The trial court found that Joe *726 Galante was in fact the real party in interest.

ISSUES

1. Did the trial court err in finding that Doerfler had received no benefit from Ga-lante’s sendees and was not unjustly enriched?

2. Did the trial court err in finding that any cash advances Galante made to vendors were offset by an $8,000 check withdrawn from an Oz account?

3. Did the trial court err in finding that Doerfler was entitled to a $30,000 setoff for a personal loan to Galante?

ANALYSIS

Galante claims that the trial court erred in not granting his motion for a new trial on the grounds that several of its findings were clearly erroneous and contrary to a preponderance of the evidence.

When reviewing a trial court’s denial of a motion for a new trial the issue is:

whether the trial court violated a clear legal right of defendant or abused its judicial discretion in refusing to grant a new trial.

Austin v. Rosecke, 240 Minn. 321, 324, 61 N.W.2d 240, 243 (1953). This court gives due regard to the trial court’s opportunity to judge the credibility of the witnesses and will not set aside the trial court’s findings unless they are clearly erroneous. Minn.R.Civ.P. 52.01. When the trial court sits without a jury as in the present case, and considers a great deal of conflicting testimony, the findings of fact will not be upset if there is evidence that reasonably supports them. Peterson v. Johnston, 254 N.W.2d 360, 362 (Minn.1977).

I.

Galante claims that Doerfler benefited from Galante’s management of the Oz while awaiting completion of the sale and that he is entitled to compensation for his services on a quasi-eontractual basis.

A quasi-contract will be imposed if failure to do so would result in unjust enrichment. Dusenka v. Dusenka, 221 Minn. 234, 21 N.W.2d 528 (1946). Unjust enrichment does not exist where one party has merely made a bad bargain. Cady v. Bush, 283 Minn. 105, 110, 166 N.W.2d 358, 362 (1969). There is not unjust enrichment:

because one party benefits from the efforts or obligations of others, but instead it must be shown that a party was unjustly enriched in the sense that the term “unjustly” could mean illegally or unlawfully.

First National Bank of St. Paul v. Ramier, 311 N.W.2d 502, 504 (Minn.1981).

To determine that unjust enrichment rather than simply a bad bargain exists, there need to be circumstances showing a benefit was conferred unknowingly or unwillingly. See, e.g., Braun v. Hamack, 206 Minn. 572, 289 N.W.

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Bluebook (online)
379 N.W.2d 723, 1986 Minn. App. LEXIS 3920, Counsel Stack Legal Research, https://law.counselstack.com/opinion/galante-v-oz-inc-minnctapp-1986.