Robertson's Marine v. I4 Solutions

223 P.3d 1141

2010 UT App 9

ROBERTSON'S MARINE, INC., Plaintiff, Appellee, and Cross-appellant, v. I4 SOLUTIONS, INC., Defendant, Appellant, and Cross-appellee.

No. 20080962-CA.

Court of Appeals of Utah.

January 22, 2010.

Steven L. Rinehart, Woods Cross, for Appellant and Cross-appellee.

Richard R. Golden and James A. McIntyre, Salt Lake City, for Appellee and Cross-appellant.

Before Judges DAVIS, THORNE, and BENCH.¹

OPINION

THORNE, Judge:

¶ 1 I4 Solutions, Inc. (I4) appeals from the district court's judgment in this contract and unjust enrichment action between I4 and Robertson's Marine, Inc. (Robertson). Specifically, I4 challenges the district court's failure to award attorney fees to I4 under the parties' contract. Robertson cross-appeals, challenging the district court's conclusion that Robertson was unjustly enriched and seeking an award of attorney fees incurred in defending against I4's appeal. We affirm the district court's judgment but remand this matter for a determination of Robertson's reasonable attorney fees incurred in defending against I4's appeal.

BACKGROUND

¶ 2 In April 2005, Robertson and I4 entered into a services contract whereby I4 was to design and implement a website for Robertson's boat dealership. Robertson paid I4 $3275, one half of the total contract price of $6550, at the time the contract was entered and agreed to pay the remaining $3275 when the website was completed and approved. The parties' contract included the following language pertaining to attorney fees: "I[, Robertson,] agree to pay all collection costs, including court costs and reasonable attorney[] fees if collection is required."

¶ 3 Although the contract did not contain a deadline for I4 to complete the website, Robertson anticipated that the website would be complete and operational by mid-summer of 2005 so that it would be usable by potential Robertson customers during the 2005 boating season. By December 2005, I4 had still not completed the website to Robertson's satisfaction, and Robertson demanded a refund of the $3275 it had paid I4. I4 refused Robertson's demand and Robertson sued I4 for breach of contract and unjust enrichment. I4 brought counterclaims against Robertson seeking payment under the contract or unjust enrichment damages.

¶ 4 The district court conducted a bench trial in August 2008 and took the matter under advisement. On September 3, 2008, the district court issued a minute entry containing its ruling on the matter. In the minute entry, the district court described the terms of the contract and determined that I4 had substantially completed its work under the contract. However, the district court determined that I4 had failed to complete one component of the website-a price calculator that the parties had valued at $600. The district court did not find that either party had prevailed on its breach of contract claim. Rather, the district court ruled that Robertson had been unjustly enriched because I4 "complet[ed] the majority of the work on [Robertson's] website" and "[i]t would be unjust to permit [Robertson] to retain the benefit of these services and the resulting website without having paid for them." However, in light of I4's failure to complete the calculator component of the website and delay in completing the work, the district court ordered Robertson to pay I4 only $1800 rather than the full $3275 contemplated by the contract. The district court also ordered that each party was to be responsible for its own attorney fees and costs.

¶ 5 Despite the district court's attorney fee ruling, I4 filed a motion seeking an award of attorney fees under the contract. I4's motion argued that the district court should amend its ruling to find that I4 had prevailed on its breach of contract claim, but that, in any event, I4 was the prevailing party because of the unjust enrichment award. The district court effectively denied I4's motion in a minute entry noting that it had already ruled on attorney fees and again ordered each side to pay its own attorney fees and costs. Subsequently, the district court entered findings of fact and conclusions of law substantially reflecting its September 3 minute entry, and a judgment of $1800 in favor of I4. I4 appeals from that judgment, and Robertson cross-appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 6 We first address Robertson's argument on cross-appeal that the district court's factual findings do not support its legal conclusion that Robertson was unjustly enriched.² "Questions about the legal adequacy of findings of fact and the legal accuracy of the trial court's statements present issues of law, which we review for correctness, according no deference to the trial court." Shar's Cars, LLC v. Elder, 2004 UT App 258, ¶ 12, 97 P.3d 724 (internal quotation marks omitted). However, challenges to the adequacy or detail of a trial court's factual findings must be preserved for appeal in the trial court or such challenges are waived. See In re K.F., 2009 UT 4, ¶¶ 58-64, 201 P.3d 985 (affirming and clarifying the preservation rule announced in 438 Main Street v. Easy Heat, Inc., 2004 UT 72, 99 P.3d 801).

¶ 7 Next, we address I4's argument on appeal, that it was the prevailing party in the action below and was therefore entitled to an award of attorney fees under the parties' contract. "The question of which party is the prevailing party `depends, to a large measure, on the context of each case, and, therefore, it is appropriate to leave this determination to the sound discretion of the trial court.'" Radman v. Flanders Corp., 2007 UT App 351, ¶ 26, 172 P.3d 668 (quoting R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 25, 40 P.3d 1119), cert. denied. 186 P.3d 957 (Utah 2008). The discretion permitted to the district court allows it the "flexibility to handle circumstances where both, or neither, parties may be considered to have prevailed." R.T. Nielson Co., 2002 UT 11, ¶ 25, 40 P.3d 1119.

¶ 8 Finally, we address Robertson's request on cross-appeal that it be awarded its reasonable attorney fees incurred in defending against I4's appeal. "The general rule is that when a party who received attorney fees below prevails on appeal, the party is also entitled to fees reasonably incurred on appeal." Brown v. Richards, 840 P.2d 143, 156 (Utah Ct.App.1992).

ANALYSIS

I. Adequacy of the District Court's Factual Findings

¶ 9 On cross-appeal, Robertson argues that the district court's factual findings do not adequately support its legal conclusion that Robertson was unjustly enriched by I4. Specifically, Robertson argues that the district court failed to make adequate findings as to each of the three elements of unjust enrichment: (1) that a benefit was conferred; (2) appreciation or knowledge of the benefit by the conferee; and (3) acceptance or retention of the benefit under circumstances making it inequitable for the conferee to retain the benefit without payment of value. See generally Allen v. Hall, 2006 UT 70, ¶ 26, 148 P.3d 939; Desert Miriah, Inc. v. B & L Auto, Inc., 2000 UT 83, ¶ 13, 12 P.3d 580.

¶ 10 Robertson did not raise these alleged deficiencies in the factual findings to the district court, and has therefore failed to preserve them as issues for appeal. "[I]n order to preserve an issue for appeal[,] the issue must be presented to the trial court in such a way that the trial court has an opportunity to rule on that issue." 438 Main St. v. Easy Heat, Inc., 2004 UT 72, ¶ 51, 99 P.3d 801 (alterations in original) (internal quotation marks omitted). "This requirement puts the trial judge on notice of the asserted error and allows for correction at that time in the course of the proceeding." Id.

¶ 11 The Utah Supreme Court has specifically addressed the preservation requirement as it applies to challenges to the adequacy of factual findings. In In re K.F., 2009 UT 4, 201 P.3d 985, the court stated,

A trial court judge has the opportunity to address the sufficiency of the evidence to support the findings in his or her judgment. But a trial judge does not have the chance to address the adequacy of the findings themselves, unless that issue is brought before him or her. Therefore requiring a party to object to the adequacy of the detail of the trial court's findings before appeal allows the trial judge to address and correct, if necessary, the level of detail in his or her findings before the case moves forward.

Id. ¶ 62.

¶ 12 Because Robertson failed to preserve its adequacy arguments for appeal by objecting to the district court's factual findings below, Robertson has waived those arguments and we do not address them.³ See id. ¶ 60. Accordingly, we affirm the district court's conclusion that Robertson was unjustly enriched and turn to the parties' arguments pertaining to attorney fees.

II. Attorney Fees in the District Court

¶ 13 I4 appeals the district court's denial of its request for an award of attorney fees. I4 argues that it should have been deemed the prevailing party below and was therefore entitled to an award of fees under the terms of the parties' contract.⁴ The district court is vested with the sound discretion to determine the prevailing party in any particular case. See Radman v. Flanders Corp., 2007 UT App 351, ¶ 26, 172 P.3d 668, cert. denied, 186 P.3d 957 (Utah 2008). This discretion allows the district court the "flexibility to handle circumstances where both, or neither, parties may be considered to have prevailed." R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 25, 40 P.3d 1119.

¶ 14 I4 argues that it should be deemed the prevailing party for attorney fee purposes solely on the basis of its success in obtaining an unjust enrichment award. The problem, however, is that "[g]enerally, attorney fees are awarded only when authorized by contract or by statute." Bilanzich v. Lonetti, 2007 UT 26, ¶ 11, 160 P.3d 1041. An unjust enrichment claim seeks payment in equity and is not based on a breach of the parties' contract. See generally American...