Fuger v. Wagoner

551 P.3d 1085

2024 WY 73

Donald FUGER and Mary Fuger, Appellants (Defendants),

v.Larry WAGONER, Appellee (Plaintiff).

S-23-0270

Supreme Court of Wyoming.

July 11, 2024

Appeal from the District Court of Sweetwater County, The Honorable Richard L. Lavery, Judge

Representing Appellants: Clark Stith, Rock Springs, Wyoming. No argument presented.

Representing Appellee: Elizabeth Greenwood and Inga L. Parsons, Greenwood Law, LLC, Pinedale, Wyoming. Argument by Ms. Greenwood.

Before FOX, C.J., and BOOMGAARDEN, GRAY, FENN, and JAROSH, JJ.

JAROSH, Justice.

[¶1] This is the second appeal stemming from a dispute between Donald Fuger and Larry Wagoner related to Mr. Wagoner’s construction and possession of two buildings on land Mr. Fuger and his wife owned. In the first appeal, Fuger v. Wagoner, 2020 WY 154, ¶¶ 6, 22, 478 P.3d 176, 180, 183 (Wyo. 2020) (Fuger I), this Court reversed the district court’s finding after a bench trial that Mr. Wagoner was entitled to damages for Mr. Fuger’s breach of an oral contract to transfer ownership of one of the buildings and a portion of the Fugers’ land to him. We concluded the purported oral contract was void because Mrs. Fuger, as a tenant by the entirety, did not join in the agreement, and remanded the case to the district court to decide Mr. Wagoner’s equitable claims against the Fugers. Id., ¶¶ 12-14, 478 P.3d at 182. On remand, the district court found for Mr. Wagoner on his claim that the Fugers were unjustly enriched by his construction of the buildings but offset some of his damages due to his use of the buildings for several years. The district court also awarded Mr. Wagoner prejudgment interest on a portion of his damages. The Fugers appeal one of the district court’s measures for offsetting Mr. Wagoner’s damages and the award of prejudgment interest. We affirm.

ISSUES

[¶2] We restate and reorder the Fugers’ issues as follows:

1. Did the district court err by offsetting Mr. Wagoner’s unjust enrichment damages by the amount of rent he actually received on the second building rather than its fair rental value?

2. Did the district court err by awarding Mr. Wagoner prejudgment interest?

FACTS AND PROCEDURAL BACKGROUND

A. Facts

[¶3] The relevant facts are not in dispute. Donald and Mary Fuger own forty acres of land in Reliance, Wyoming, as tenants by the entireties. Around 2008, Larry Wagoner began using the Western States Yard, a five-acre section of the Fugers’ land, to operate his oilfield business. Mr. Fuger and Mr. Wagoner had agreed to construct two buildings on the site, with Mr. Wagoner in charge of the construction and Mr. Fuger responsible for obtaining financing. They did not memorialize their agreement in writing. In 2012, the Fugers obtained the necessary financing for the project from RSNB Bank through their limited liability company, Reliance Storage. The financing was in the form of a construction loan and, later, permanent financing.

[¶4] Prior to beginning construction, Mr. Fuger and Mr. Wagoner signed a lease agreement giving Mr. Wagoner exclusive use of both buildings for five years. In the trial preceding Fuger I, Mr. Wagoner claimed he and Mr. Fuger also orally agreed Mr. Wagoner would receive ownership of one of the buildings and the Western States Yard in exchange for his construction work and making payments on the construction loan while he used the buildings (ostensibly in the form of rent). The Fugers denied there was an oral contract with Mr. Wagoner. Instead, they claimed the sole consideration for Mr. Wagoner’s construction work on the buildings and payment of the loan was their agreement to lease the buildings to him for five years.

[¶5] Before erecting the two buildings, Mr. Wagoner prepared a portion of the Western States Yard for the construction. He performed some of the work himself, using his own equipment. For other tasks, he rented equipment and supervised the labor. Mr. Wagoner did not charge the Fugers for the site preparation work or keep any contemporaneous time records, believing he was doing the work in exchange for his eventual ownership of one of the buildings and the Western States Yard.

[¶6] Mr. Wagoner and Mr. Fuger worked with an attorney to obtain the necessary building permits. Mr. Wagoner then served as general contractor or project manager for construction of the buildings. He also performed some of the construction labor himself and, on occasion, allowed the subcontractors to use his equipment. A third party, Cleary Building Company (Cleary), constructed the building exteriors and installed the garage doors under Mr. Wagoner’s supervision. Other contractors, Mr. Wagoner, and Mr. Wagoner’s family and friends performed the construction work on the interior of the buildings. While some of the project work was billed to Mr. Wagoner and then paid from construction loan proceeds, Mr. Wagoner never charged the Fugers for any of the labor he or his friends and family performed or for the construction management services he provided. He also did not keep contemporaneous records, again believing he would soon own one of the buildings and the Western States Yard. Based upon the evidence presented at the second bench trial, the district court determined the value of Mr. Wagoner’s self-performed labor to construct the buildings was $96,600, and the value of his construction management ser- vices was $77,120.¹ The value of various other expenses Mr. Wagoner incurred, including supplies, other unreimbursed costs, and a portion of the cost of a permanent electrical line called a Ready Line, was undisputed,

[¶7] Construction of the two buildings was substantially complete by early 2013. Mr. Wagoner occupied the first building and paid the Fugers $2,500/month rent for all of 2013 and the first eleven months of 2014. Thereafter, and until June 2018, Mr. Wagoner made monthly payments of approximately $2,041 to RSNB Bank to service the loan. The parties agree Mr. Wagoner’s payments to the Fugers (and then to RSNB Bank) totaled $160,205.19.

[¶8] Mr. Wagoner rented the second building to Randy Pitt for approximately 18 months, beginning in January 2013. Mr. Wagoner received $2,500/month in rent from Mr. Pitt for three of those months, but not for the other fifteen months. However, Mr. Pitt performed work on the Fugers’ property during that time, including building a containment area/pit and assisting Mr. Wagoner with installing electricity. He also paid the remainder of the cost of and installed the Ready Line. After Mr. Pitt vacated the second building sometime in 2014, Mr. Wagoner did not rent it out again until 2016, when Excel Driver Services (Excel) leased it at the rate of $2,500/month. Excel paid rent to Mr. Wagoner for 18 months; after that, it paid Mr. Fuger. The parties agree the total rent Mr. Wagoner received from Mr. Pitt and Excel was $52,500.

[¶9] Mr. Wagoner was responsible for maintaining both buildings for approximately five years, although at trial he could not provide a complete description of the work he did or the hours he dedicated to each project. Instead, he testified he generally performed maintenance work outside and inside the buildings, including, for example, repairing a furnace and frozen pipes. According to Mr. Wagoner, he "probably" spent around 100 hours doing maintenance and repair work over the course of five years. He testified he would normally charge a third party $100-$120/hour for that type of work.

B. Procedural Background

[¶10] By late 2017, the once harmonious relationship between Mr. Wagoner and Mr. Fuger had disintegrated and, on November 17, 2017, the Fugers issued a Notice to Quit Premises to Mr. Wagoner. Mr. Wagoner responded by filing a Complaint against the Fugers, which included claims for breach of the oral contract to give him title to one building and the Western States Yard, promissory estoppel, unjust enrichment, and quantum meruit. He also sought an injunction allowing him to continue to possess and use the two buildings. The Fugers filed a separate action against Mr. Wagoner claiming the only agreement between Mr. Wagoner and Mr. Fuger was the lease (i.e., there was no enforceable oral contract to transfer ownership of any property), slander of title, and forcible entry and detainer. The district court consolidated the two cases.

[¶11] On December 14, 2018, the district court held a one-day bench trial. In its subsequent Findings of Fact and Conclusions of Law, the district court determined Mr. Fuger and Mr. Wagoner had a valid oral contract whereby Mr. Wagoner was to receive one of the buildings and the Western States Yard in exchange for his construction of the buildings and his payment of rent and to service the loan. However, the district court also concluded Mrs. Fuger’s tenancy by the entireties made specific performance (conveyance of the land to Mr. Wagoner) impossible. The district court then awarded Mr. Wagoner $302,234.48 in contract damages, plus postjudgment interest. The district court did not reach Mr. Wagoner’s claims for promissory estoppel, unjust enrichment, and quantum meruit because it found an enforceable oral contract. The district court also gave the Wagoners thirty days to vacate the premises. Both parties appealed the district court’s decision.

[¶12] This Court subsequently ruled in Fuger I that the oral contract between Mr. Fuger and Mr. Wagoner was void because Mr. Fuger could not unilaterally sell property he owned with Mrs. Fuger as tenants by the entireties, and the district court erred by awarding damages for breach of the void contract. Fuger I, ¶¶ 14, 22, 478 P.3d at 182, 183. As a result, we reversed and remanded the case for consideration of Mr. Wagoner’s equitable claims against the Fugers. Id.

[¶13] On remand, the district court held a second bench trial. At the outset, and to avoid duplicating evidence, the parties stipulated that for the purposes of the second trial the district court could consider as evidence the trial transcript and exhibits...