Pichon v. L.J. Broekemeier, Inc.

702 P.2d 884, 108 Idaho 846, 1985 Ida. App. LEXIS 656
CourtIdaho Court of Appeals
DecidedJune 28, 1985
Docket14594
StatusPublished
Cited by8 cases

This text of 702 P.2d 884 (Pichon v. L.J. Broekemeier, Inc.) is published on Counsel Stack Legal Research, covering Idaho Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pichon v. L.J. Broekemeier, Inc., 702 P.2d 884, 108 Idaho 846, 1985 Ida. App. LEXIS 656 (Idaho Ct. App. 1985).

Opinion

WALTERS, Chief Judge.

This suit was commenced by a vendor of real estate, seeking to recover damages caused by the purchaser in default. The trial court entered judgment against a mortgagee that had assumed the purchaser’s responsibility to perform the purchase agreement. The mortgagee appeals; the vendor cross-appeals against the mortgagee and other parties originally named in the complaint. We affirm the judgment. However, we vacate the trial court’s order denying an award of attorney fees and we remand for redetermination of such an award.

With thorough and well-prepared findings of fact and conclusions of law, the trial court found the following facts. In 1972, Mary Pichón entered into an agreement to sell approximately three acres of land located in Ketchum, Idaho, to L.J. Broekemeier, Inc. (Broekemeier). When Broekemeier approached Pichón with inquiries about the purchase of her land, Pichón indicated she was willing to sell and that she would accept installment payments on the purchase price. Pichón made it clear, however, she would not subordinate her interest to a commercial lender, i.e., she would not convey title to the property until she had been paid in full. The written contract provided for a conveyance of one-half of the property when Pichón received $20,000 plus $64,000 or an equivalent credit, at Pichon’s option, toward condominium units to be built on the conveyed property. A full conveyance of Pichon’s interest would enable Broekemeier to get construction financing for the condominium development. In 1973, Broekemeier paid Pichón the $20,000 and Pichón elected the *849 condominium acquisition option. The $64,-000, to be credited toward condominium units at their construction cost, entitled Pichón to three units. Pichón executed a warranty deed to one-half the property to Broekemeier, and she also signed a “consent to encumber” the entire parcel with a lender’s lien so long as it was subject to Pichon’s prior interest. The instruments were placed in escrow with Sawtooth Title Insurance Company, Inc. (Sawtooth), which recorded the warranty deed. Broekemeier acquired a construction loan from Colwell Mortgage Trust, Inc. (CMT) and built thirty-two condominium units on the approximately one and one-half acre parcel. Pichon never received a deed to the three units she had selected.

After Broekemeier defaulted on the note secured by CMT’s deed of trust in 1974, CMT commenced non-judicial foreclosure of its lien. A trustee’s sale was held, at which CMT acquired a deed to the developed property. After her attempts to get a deed to the three condominium units failed, Pichón filed suit, alleging claims against Broekemeier, Sawtooth and Lawyers Title Insurance Company, Inc. (Lawyers). Following a bench trial, the district court quieted title to the undeveloped property in Pichón and ordered CMT to convey title to the three condominiums or to pay $182,500 in damages to Pichón. The trial court also dismissed Pichon’s claims against Sawtooth and Lawyers. To facilitate clarity in the opinion, we will discuss the particular facts as found by the trial court as they pertain to the separate issues raised by the parties on appeal.

I

The trial judge entered judgment against CMT on a theory of unjust enrichment, i.e., CMT would be unjustly enriched by retention of the condominium units Broekemeier was obligated to convey to Pichón. CMT contends on appeal that Pichon cannot recover based on unjust enrichment because CMT was not guilty of any wrongdoing. We disagree. In Hixon v. Allphin, 76 Idaho 327, 281 P.2d 1042 (1955), our Supreme Court noted:

The essence of a quasi contractual obligation lies in the fact that the defendant has received a benefit which it would be inequitable for him to retain. * * * It is not necessary in order to create an obligation to make restitution or to compensate, that the party unjustly enriched should have been guilty of any tortious or fraudulent act. The question is: Did he, to the detriment of someone else, obtain something of value to which he was not entitled?

Hixon v. Allphin, 76 Idaho at 333, 281 P.2d at 1045. Subsequent Idaho appellate decisions also permit an unjust enrichment recovery when the defendant was not guilty of misconduct. See McKay Construction Co. v. Ada County Board of County Commissioners, 96 Idaho 881, 538 P.2d 1185 (1975); Continental Forest Products, Inc. v. Chandler Supply Co., 95 Idaho 739, 518 P.2d 1201 (1974); Dursteler v. Dursteler, 108 Idaho 230, 697 P.2d 1244 (Ct.App.1985). We believe it is clear that Pichón is not obligated to prove culpable conduct by CMT in order to recover on a theory of unjust enrichment.

CMT also maintains that it has not been enriched at all, let alone unjustly enriched, because it lost money on the overall transaction when Broekemeier defaulted. But CMT’s remedy for damages caused by Broekemeier is against Broekemeier, not against Pichón. The trial court found that CMT had assumed Broekemeier’s obligation on his contract with Pichón, including the obligation to convey clear title to the three condominiums to Pichón. Because it had not conveyed title to the units, CMT received a benefit that would be inequitable for it to retain without compensating Pichón. Such is the essence of an unjust enrichment recovery.

CMT next insists that Pichón was estopped to deny the effectiveness of the warranty deed conveying the one and one-half acres to Broekemeier. The argument is based on the trial court’s finding that Pichón knew Broekemeier needed the deed *850 in order to get construction financing. CMT also argues that the doctrine of estoppel by deed precludes Pichon’s claim for relief. We are not persuaded. CMT has cited us to no authority, nor did our research reveal any, that indicates on facts similar to the instant case that a grantor may not allege and prove he has not received the compensation which induced him to convey his property.

Finally, CMT contends that Pichon’s recovery is precluded by I.C. § 45-1508. That section denies to a purchaser in default on a deed of trust any right to redeem the property after it is sold at the trustee’s sale. Thus, although section 45-1508 prevents Broekemeier from redeeming the property sold to CMT, it does not prevent equity from ordering compensation to Pichon for her conveyance of the property. The trial court did not err by awarding the three condominium units or, in the alternative, payment of damages to Pichón.

II

Pichón contends on cross-appeal the trial court erred by dismissing her complaint against Sawtooth and Lawyers. Her claims against the title insurance companies were based on Sawtooth’s recording of the warranty deed to one-half of the property sold under the contract and issuing a title insurance policy, underwritten by Lawyers, on behalf of CMT.

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Bluebook (online)
702 P.2d 884, 108 Idaho 846, 1985 Ida. App. LEXIS 656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pichon-v-lj-broekemeier-inc-idahoctapp-1985.