Tornabeni v. Cammie Wold, Roadrunner Hotshot & Servs., LLC

920 N.W.2d 454

Louis TORNABENI, Plaintiff and Appellee

v. Cammie WOLD, Roadrunner Hotshot & Services, LLC, Chance Innis, and Noble Casing Incorporated, Defendants and AppellantsandLouis Tornabeni, Third-Party Defendant and AppelleeandTornabeni Consulting, Inc., a Montana involuntarily dissolved Closer Corporation; Bridger Forsness; Brittany Creech, Third-Party Defendants

No. 20180164

Supreme Court of North Dakota.

Filed December 6, 2018

John M. Fitzgerald (argued), Rapid City, SD, for plaintiff, third-party defendant and appellee Louis Tornabeni.

Robert D. Lantz (argued), Denver, CO, and Brett D. Payton (appeared), Greeley, CO, for defendants and appellants Cammie Wold, Roadrunner Hotshot & Services, LLC, and Chance Innis.

Jensen, Justice.

[¶ 1] Chance Innis, Cammie Wold, and Roadrunner Hotshot & Services, LLC ("RHS"), appeal from a judgment awarding Louis Tornabeni $145,536.53 from Innis and awarding Tornabeni $477,521.49, jointly and severally, from Wold and RHS. Innis argues the district court erred in determining he entered into an enforceable oral contract with Innis. Wold and RHS argue the district court erred in determining they were jointly and severally liable to Tornabeni for unjust enrichment in the amount of one-half of the net profits of RHS. We affirm the judgment.

I

[¶ 2] Innis and Wold are brother and sister. Innis operated a sole proprietorship doing business as Roadrunner Hotshot, which initially delivered goods to and cleaned shacks at oil rigs in western North Dakota and later began renting equipment to oil companies including Continental Resources. Wold operated Roadrunner Hotshot for Innis until April 11, 2011, when he transferred the business to her and she renamed and reorganized the company as Roadrunner Hotshot & Services, LLC.

[¶ 3] DTC Consulting employed Tornabeni as a drilling consultant in western North Dakota and assigned him to work on oil rigs operated by Continental Resources as part of his employment with DTC Consulting. Tornabeni and Wold began a romantic relationship in late 2009 or early 2010.

[¶ 4] According to Tornabeni, he met with Innis, Wold, and Nick Barker at a Williston, North Dakota, restaurant in the spring of 2010. Tornabeni testified he and Innis orally agreed that Tornabeni would provide equipment to Innis, and Innis, through his business, would then rent the equipment to Continental Resources under a Master Service Agreement. According to Tornabeni, the parties agreed he would receive ninety percent of the rental profits, and Innis would receive ten percent of the rental profits. Tornabeni provided equipment to Innis from July 2010 until Innis transferred his business to Wold in April 2011.

[¶ 5] Tornabeni continued to provide the equipment rented by Continental Resources after Innis transferred his business to Wold. According to Tornabeni, he arranged the equipment rentals to Continental Resources and for the payments by Continental Resources to RHS. Tornabeni’s involvement with equipment rentals to Continental Resources ended on January 1, 2013, and his romantic relationship with Wold ended in June 2013.

[¶ 6] Tornabeni sued Innis, Wold, and RHS. Tornabeni alleged that Innis breached their oral contract requiring Innis to pay Tornabeni ninety percent of rental income generated from equipment owned by Tornabeni and rented to Continental Resources from July 2010 through April 11, 2011. Tornabeni also alleged that after Innis transferred his business to Wold, Wold and RHS were unjustly enriched by the rental of equipment to Continental from April 2011 through December 2012.

[¶ 7] The district court determined that Innis and Tornabeni had an oral contract requiring Innis to pay Tornabeni ninety percent of the rental profit from equipment rentals and that Innis breached the oral contract. The court ordered Innis to pay Tornabeni $145,536.53 in damages. The court also determined Wold and RHS were unjustly enriched by rental payments they received from Continental Resources for the equipment owned by Tornabeni and held them jointly and severally liable to Tornabeni for one-half of the company’s net profits in the amount of $477,521.49, from April 2011 through December 2012.

II

[¶ 8] Innis argues the district court erred in concluding he entered a valid and enforceable oral contract with Tornabeni. Innis argues there was not a meeting at the Williston restaurant in 2010, and the parties did not consent to an oral contract. He argues Tornabeni could not identify when the meeting occurred, and Tornabeni could not verify there was an agreement between the parties. Innis claims Tornabeni only indicated he was under the impression the parties were doing business and could not remember if they shook hands.

[¶ 9] The existence of an oral contract and the extent of its terms are questions of fact subject to the clearly erroneous rule. Edward H. Schwartz Constr., Inc. v. Driessen , 2006 ND 15, ¶ 6, 709 N.W.2d 733. Our review of a district court’s findings of facts is guided by N.D.R.Civ.P. 52(a)(6), which precludes this Court from setting aside those findings unless they are clearly erroneous. Rule 52(a)(6), N.D.R.Civ.P., requires this Court to "give due regard to the trial court’s opportunity to judge the witnesses’ credibility." We have previously summarized our review of findings of fact under the clearly erroneous rule:

A district court’s finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire record, a reviewing court is left with a definite and firm conviction a mistake has been made. In reviewing findings of fact, we view the evidence in the light most favorable to the findings and will not reverse the district court’s findings simply because we may view the evidence differently. "In a bench trial, the district court determines the credibility of witnesses, and we do not second-guess those credibility determinations."

Knorr v. Norberg , 2015 ND 284, ¶ 7, 872 N.W.2d 323 (citations omitted).

[¶ 10] The district court was provided with two conflicting versions of evidence—Tornabeni’s claim that the parties met and reached an oral agreement and Innis’s claim that the parties did not meet and did not have an agreement. The district court determined Innis and Wold were not credible and, relying on testimony from Tornabeni and Barker, the court found Tornabeni and Innis reached an oral agreement at a Williston restaurant in the spring of 2010. There is evidence to support the district court’s finding that the parties reached an oral agreement, including the testimony of Tornabeni and Barker, as well as the undisputed evidence that Tornabeni provided equipment that was rented to Continental Resources and that Continental Resources paid Innis for the use of the equipment. Innis’s challenge focuses primarily on the credibility of Tornabeni and is insufficient for this Court to set aside a district court’s credibility determinations about which witnesses were or were not credible. We decline to reweigh the witnesses’ credibility. We are not left with a definite and firm conviction the court made a mistake, and we conclude the court’s findings that Innis and Tornabeni had an oral contract and the terms of that contract are not clearly erroneous. We affirm the district court’s finding of an oral contract.

[¶ 11] Innis argues that even if an oral contract existed, the contract did not have a lawful object and was unenforceable. Innis argues the agreement violated Continental Resources’ policies regarding conflicts of interest and self dealing, which precluded Tornabeni from directly renting equipment to Continental Resources, and was therefore unenforceable. However, Innis has not marshaled any legal authority to support his claim that the parties’ oral contract had an unlawful object and was therefore unenforceable.

[¶ 12] Chapter 9-08, N.D.C.C., provides some guidance for our review of unlawful and voidable contracts. Only N.D.C.C. § 9-08-01 is arguably applicable to Innis’s assertion that the oral contract was unlawful. Section 9-08-01, N.D.C.C., provides that a provision of a contract is unlawful if it is contrary to an express provision of the law, contrary to the policy of an express provision of the law, or "[o]therwise contrary to good morals." Innis offered no legal authority or evidence to support a finding that the parties’ agreement violated N.D.C.C. § 9-08-01. This Court has not previously held that an agreement is unenforceable as the result of a party’s breach of an earlier or separate agreement with a third party, and we decline to extend N.D.C.C. § 9-08-01 to the circumstances of this case involving a claimed conflict of interest.

[¶ 13] Innis also argues the oral contract is invalid because the statute of frauds in N.D.C.C. § 9-06-04(1) requires a contract that by its terms will not be performed within a year to be in writing. We have previously recognized that an oral contract without an express term specifying a time of performance beyond one year and which could be performed within one year does not violate N.D.C.C. § 9-06-04(1). See Kohanowski v. Burkhardt , 2012 ND 199, ¶ 9, 821 N.W.2d 740 (recognizing that if there is any possibility an oral contract may be performed within one year, the contract is not barred by the statute of frauds). Innis’s argument that the oral agreement is unenforceable...