J-A16028-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MID-STATE CONSTRUCTION, INC. IN THE SUPERIOR COURT OF PENNSYLVANIA Appellee
v.
JAMIE RITCHEY
Appellant No. 1428 WDA 2013
Appeal from the Judgment Entered August 19, 2013 In the Court of Common Pleas of Blair County Civil Division at No(s): No. 2010 GN 288
BEFORE: DONOHUE, J., OTT, J., and MUSMANNO, J.
MEMORANDUM BY OTT, J.: FILED OCTOBER 10, 2014
Mid-State Construction, Inc. (Mid-State) appeals from the judgment
entered in the Court of Common Pleas of Blair County ordering Jamie
Ritchey (Ritchey) to reimburse Mid-State $28,000.00. Mid-State sought
damages of approximately $74,000.00 from Ritchey, representing the cost
of labor and materials used by Ritchey to improve his home. That sum was
comprised of approximately $28,000.00 in materials from Mid-State,
approximately $29,500.00 in labor, and $16,583.73 in materials purchased
from third-party vendors. In this timely appeal, Mid-State claims the trial
court abused its discretion and/or committed an error of law by failing to
order Ritchey to reimburse Mid-State the $16,583.73 for building materials
purchased by Ritchie, using Mid-State’s corporate account, from third-party
vendors. After a thorough review of the submissions by the parties, the J-A16028-14
certified record, and relevant law, we agree with Mid-State. Accordingly, we
reverse and remand to the trial court for entry of an amended judgment.
Large portions of the relevant underlying facts of this matter are not in
dispute. At all times relevant to this matter, Ritchey was the vice-president
of Mid-State. Mid-State is a general contractor company owned by Robert
Stangl. During a slow period of work, Ritchey sought and obtained
permission to use Mid-State personnel and materials and accounts to
renovate a home he had purchased. Ritchey eventually used labor and
materials in excess of $74,000.00 in value. The dispute in this matter
concerned how much, if any amount, Ritchey was obliged to repay. Mid-
State argued there was an oral contract for Ritchey to repay the entire
amount, which represented Mid-State’s cost for labor and materials. In the
alternate, Mid-State also claimed Ritchey owed repayment based on unjust
enrichment. Ritchey argued the entire $74,000.00 in labor and materials
was part of a bonus given to him for his years of service to the company.
Following a non-jury trial, the judge found there was no meeting of the
minds and no oral contract existed to repay the sums expended to renovate
Ritchey’s home. However, the judge determined that based on unjust
enrichment, Mid-State was entitled to repayment of the $28,000.00 in
materials from Mid-State’s inventory and used by Ritchey, but found a
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mutual benefit to both Ritchey and Mid-State for the labor costs.1 In his
supplemental opinion dated August 19, 2013, the judge specifically
determined that the additional $16,853.73 in materials obtained by Ritchey
from third-party vendors also represented a mutual benefit because it
enabled Mid-State to maintain its business relationship with the suppliers
during a slow period. See Opinion and Order, 8/19/2013, at 1. Accordingly,
no award was made regarding either labor costs or the cost of materials
obtained from the third-party vendors.
Post-trial motions were denied, and this appeal followed.2 Mid-State is
now arguing the certified record does not support the judge’s findings
regarding the third-party vendors.
In reviewing matters such as this, “we have stated that our standard
of review of a decree in equity is particularly limited and that such a decree
will not be disturbed unless it is unsupported by the evidence or
____________________________________________
1 “Unjust enrichment is the retention of a benefit conferred by another, without offering compensation, in circumstances where compensations is reasonably expected, and for which the beneficiary must make restitution. An action based on unjust enrichment is an action which sounds in quasi- contract or contract implied in law.” Roethlein v. Portnoff Law Associates, Ltd., 81 A.3d 816, 825 n.8 (Pa. Super. 2013) (citations omitted). 2 Judgment was originally entered on July 24, 2013. The August 19, 2013 order denying post-trial motions reaffirmed the prior order, thereby reentering judgment, making the August 19, 2013 order final and appealable. Mid-State is not appealing the failure to award damages for labor costs.
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demonstrably capricious.” Mid-Penn v. Farhat, 74 A.3d 149, 153 (Pa.
Super. 2013).
In its Pa.R.A.P. 1925(a) opinion, the trial court stated:
We will not award [Mid-State] the additional $16,853.73 of materials that were paid to third parties relative to the renovation project. During the time of trial, both Mid-State’s President, Robert Stangl, and the Defendant, Jamie Ritchey, testified that when they discussed the renovation project for the 1425 16th Avenue property, that business was slow for Mid- State. Therefore, in obtaining materials from these third party suppliers (Eckels Plumbing & Heating, Inc.; Extreme Construction; Carpet Depot; and Jason Beam), Mid-State was able to maintain its business relationship with each of said suppliers. As we set forth in our original Opinion, this renovation project occurred during a slow business period for Mid-State. Therefore, we once again find a mutual benefit to both parties herein.
Trial Court Opinion, 8/19/2013, at 1.
Although the trial court correctly recounts the testimony of Stangl and
Ritchey that business was slow, there was no testimony at all that Mid-
State’s business relationship with the suppliers was in any way harmed by
the slowdown in business. Similarly, there is dearth of evidence that Mid-
State’s relationship with its suppliers was in any way bettered by the
relevant transactions.
Case law does not provide a specific definition of the term “mutual
benefit”. Rather, it is defined through context. Here, in the context of
determining the equities pertaining to unjust enrichment, we believe a
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“mutual benefit” should provide at least a rough equivalence of benefits to
the parties involved.3 There is no indication in either the certified record or
in the trial court opinion how the more than $16,000.00 in materials
provided to Ritchey was in any way roughly equivalent to the stated
intangible benefit to Mid-State for continuing to do business with three
suppliers. Therefore, there is no factual basis for a finding of a mutual
benefit in this instance.
Accordingly, the trial court’s conclusion that Mid-State and Ritchey
received a mutual benefit is unsupported by fact. Because this aspect of the
decision is unsupported by the evidence, we are required to reject the trial
court’s determination in this regard. See Mid-Penn v. Farhat, supra.
The trial court further opined that if it awarded Mid-State the
$16,853.73 in material costs,
such would make the total judgment award $44,853.73. This amount would be in excess of the increase in value of the subject property from the date Mr. Ritchey acquired the property in 2003 (for $40,000), until he sold the property in January 2012 (for $84,000). [Defendant Exhibit 2].
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J-A16028-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MID-STATE CONSTRUCTION, INC. IN THE SUPERIOR COURT OF PENNSYLVANIA Appellee
v.
JAMIE RITCHEY
Appellant No. 1428 WDA 2013
Appeal from the Judgment Entered August 19, 2013 In the Court of Common Pleas of Blair County Civil Division at No(s): No. 2010 GN 288
BEFORE: DONOHUE, J., OTT, J., and MUSMANNO, J.
MEMORANDUM BY OTT, J.: FILED OCTOBER 10, 2014
Mid-State Construction, Inc. (Mid-State) appeals from the judgment
entered in the Court of Common Pleas of Blair County ordering Jamie
Ritchey (Ritchey) to reimburse Mid-State $28,000.00. Mid-State sought
damages of approximately $74,000.00 from Ritchey, representing the cost
of labor and materials used by Ritchey to improve his home. That sum was
comprised of approximately $28,000.00 in materials from Mid-State,
approximately $29,500.00 in labor, and $16,583.73 in materials purchased
from third-party vendors. In this timely appeal, Mid-State claims the trial
court abused its discretion and/or committed an error of law by failing to
order Ritchey to reimburse Mid-State the $16,583.73 for building materials
purchased by Ritchie, using Mid-State’s corporate account, from third-party
vendors. After a thorough review of the submissions by the parties, the J-A16028-14
certified record, and relevant law, we agree with Mid-State. Accordingly, we
reverse and remand to the trial court for entry of an amended judgment.
Large portions of the relevant underlying facts of this matter are not in
dispute. At all times relevant to this matter, Ritchey was the vice-president
of Mid-State. Mid-State is a general contractor company owned by Robert
Stangl. During a slow period of work, Ritchey sought and obtained
permission to use Mid-State personnel and materials and accounts to
renovate a home he had purchased. Ritchey eventually used labor and
materials in excess of $74,000.00 in value. The dispute in this matter
concerned how much, if any amount, Ritchey was obliged to repay. Mid-
State argued there was an oral contract for Ritchey to repay the entire
amount, which represented Mid-State’s cost for labor and materials. In the
alternate, Mid-State also claimed Ritchey owed repayment based on unjust
enrichment. Ritchey argued the entire $74,000.00 in labor and materials
was part of a bonus given to him for his years of service to the company.
Following a non-jury trial, the judge found there was no meeting of the
minds and no oral contract existed to repay the sums expended to renovate
Ritchey’s home. However, the judge determined that based on unjust
enrichment, Mid-State was entitled to repayment of the $28,000.00 in
materials from Mid-State’s inventory and used by Ritchey, but found a
-2- J-A16028-14
mutual benefit to both Ritchey and Mid-State for the labor costs.1 In his
supplemental opinion dated August 19, 2013, the judge specifically
determined that the additional $16,853.73 in materials obtained by Ritchey
from third-party vendors also represented a mutual benefit because it
enabled Mid-State to maintain its business relationship with the suppliers
during a slow period. See Opinion and Order, 8/19/2013, at 1. Accordingly,
no award was made regarding either labor costs or the cost of materials
obtained from the third-party vendors.
Post-trial motions were denied, and this appeal followed.2 Mid-State is
now arguing the certified record does not support the judge’s findings
regarding the third-party vendors.
In reviewing matters such as this, “we have stated that our standard
of review of a decree in equity is particularly limited and that such a decree
will not be disturbed unless it is unsupported by the evidence or
____________________________________________
1 “Unjust enrichment is the retention of a benefit conferred by another, without offering compensation, in circumstances where compensations is reasonably expected, and for which the beneficiary must make restitution. An action based on unjust enrichment is an action which sounds in quasi- contract or contract implied in law.” Roethlein v. Portnoff Law Associates, Ltd., 81 A.3d 816, 825 n.8 (Pa. Super. 2013) (citations omitted). 2 Judgment was originally entered on July 24, 2013. The August 19, 2013 order denying post-trial motions reaffirmed the prior order, thereby reentering judgment, making the August 19, 2013 order final and appealable. Mid-State is not appealing the failure to award damages for labor costs.
-3- J-A16028-14
demonstrably capricious.” Mid-Penn v. Farhat, 74 A.3d 149, 153 (Pa.
Super. 2013).
In its Pa.R.A.P. 1925(a) opinion, the trial court stated:
We will not award [Mid-State] the additional $16,853.73 of materials that were paid to third parties relative to the renovation project. During the time of trial, both Mid-State’s President, Robert Stangl, and the Defendant, Jamie Ritchey, testified that when they discussed the renovation project for the 1425 16th Avenue property, that business was slow for Mid- State. Therefore, in obtaining materials from these third party suppliers (Eckels Plumbing & Heating, Inc.; Extreme Construction; Carpet Depot; and Jason Beam), Mid-State was able to maintain its business relationship with each of said suppliers. As we set forth in our original Opinion, this renovation project occurred during a slow business period for Mid-State. Therefore, we once again find a mutual benefit to both parties herein.
Trial Court Opinion, 8/19/2013, at 1.
Although the trial court correctly recounts the testimony of Stangl and
Ritchey that business was slow, there was no testimony at all that Mid-
State’s business relationship with the suppliers was in any way harmed by
the slowdown in business. Similarly, there is dearth of evidence that Mid-
State’s relationship with its suppliers was in any way bettered by the
relevant transactions.
Case law does not provide a specific definition of the term “mutual
benefit”. Rather, it is defined through context. Here, in the context of
determining the equities pertaining to unjust enrichment, we believe a
-4- J-A16028-14
“mutual benefit” should provide at least a rough equivalence of benefits to
the parties involved.3 There is no indication in either the certified record or
in the trial court opinion how the more than $16,000.00 in materials
provided to Ritchey was in any way roughly equivalent to the stated
intangible benefit to Mid-State for continuing to do business with three
suppliers. Therefore, there is no factual basis for a finding of a mutual
benefit in this instance.
Accordingly, the trial court’s conclusion that Mid-State and Ritchey
received a mutual benefit is unsupported by fact. Because this aspect of the
decision is unsupported by the evidence, we are required to reject the trial
court’s determination in this regard. See Mid-Penn v. Farhat, supra.
The trial court further opined that if it awarded Mid-State the
$16,853.73 in material costs,
such would make the total judgment award $44,853.73. This amount would be in excess of the increase in value of the subject property from the date Mr. Ritchey acquired the property in 2003 (for $40,000), until he sold the property in January 2012 (for $84,000). [Defendant Exhibit 2]. To award Mid-State a judgment amount in excess of the increase in value would amount to a windfall to Mid-State.
Id. at 2.
3 Parties can undeniably voluntarily contract to one-sided terms, however, because unjust enrichment is quasi-contractual, we do not believe the courts should infer and impose one-sided terms. Therefore, “rough equivalence” appears appropriate.
-5- J-A16028-14
“Windfall” is not defined in Black’s Law Dictionary and, similar to
“mutual benefit”, is only defined by case law in context. Relevant to this
appeal, a windfall is the product of unjust enrichment. See Sevast v.
Kakouras, 915 A.2d 1147 (Pa. 2007); Wilson Area School Dist. v.
Skepton, 895 A.2d 1250 (Pa. 2006).
However, windfall it is defined in general dictionaries. A windfall is a
“sudden, unexpected piece of good fortune or personal gain,” as defined in
the American Heritage Dictionary of English Language, Fourth Ed., Houghton
Mifflin Co., 2000. Similarly, it is a “piece of unexpected good fortune,
especially financial gain,” pursuant to the Collins English Dictionary Complete
and Unabridged, HarperCollins, 2003. Because no benefit was conferred
upon Mid-State by its paying $16,853.73 to third-party vendors on Ritchey’s
behalf, Mid-State was not unjustly enriched and, therefore, repayment could
not represent a resultant windfall.
Additionally, the certified record demonstrates no connection between
Ritchey’s profit taking on the sale of his home and Mid-State. The fact that
Ritchey opted to sell his home, after he improved it at Mid-State’s expense,
for an amount less than the cost of the improvements, is not attributable to
Mid-State. The certified record provides no explanation why Ritchey chose
to sell the home when he did, nor the reasonableness of the price he
obtained for it. Neither the trial court nor Ritchey has provided a reasonable
nexus between Ritchey’s unilateral decision to sell his home and Mid-States
entitlement to reimbursement. Based on the foregoing, it is an error to
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balance Ritchey’s profits against Mid-State’s expenditures. Accordingly, an
award reimbursing Mid-State for the exact amount charged by Ritchey to
Mid-State’s account, to better Ritchey’s real property, cannot be a windfall to
Mid-State. At most, such an award merely returns Mid-State to the status
quo.
Because the trial court erred both in determining the $16,853.73 at
issue in this appeal represented a mutual benefit to Ritchey and Mid-State
and that repayment of the money would represent a windfall to Mid-State
we are compelled to reverse the trial court’s ruling on this issue.
Accordingly, Mid-State is entitled to the additional judgment it sought,
constituting reimbursement for costs sustained in paying for materials
obtained from Eckels Heating & Plumbing, Inc., Extreme Construction,
Carpet Depot, and Jason Beam. Pursuant to the certified record, these costs
total $16,853.73. Accordingly, the total award should be amended to
$44,853.73.
Judgment vacated. This matter is remanded to the trial court for entry
of a judgment consistent with this decision. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 10/10/2014
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