Appeal from the District Court of Teton County The Honorable Nancy J. Guthrie, Judge
The opinion of the court was delivered by: Golden, Justice.
Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] James Schlinger owns and operates Curtis Excavation, Inc., and WW Construction, LLC. Mr. Schlinger, acting as President of WW Construction, entered into an oral agreement to lease his business and all associated equipment and land to Christopher McGhee and Jack Robinson. Mr. McGhee and Mr. Robinson formed Curtis-Westwood Construction, LLC (CW Construction) as the entity to lease and operate the business. After approximately eight months, Mr. Schlinger determined Mr. McGhee and Mr. Robinson were not properly managing the business and terminated the oral lease agreement. The parties dispute the financial implications of the termination. After a bench trial, the district court determined Mr. Schlinger owed Appellees McGhee, Robinson, and CW Construction $206,875.70.
[¶2] In the face of the multiple issues raised by Appellants Schlinger, WW Construction and Curtis Excavation, we will affirm in part and reverse in part.
[¶3] Appellants state the issues as:
I. Did the district court err when it found, based on incomplete and unreliable bookkeeping spreadsheets, that defendants owed plaintiffs $206,875.70?
A. Did the district court err in its judicial accounting when it failed to credit defendants with $312,319.12 of business expenses defendants paid for plaintiffs in March, April and May 2004?
B. Did the district court further err when it accepted bookkeeper Barb Fields' unreliable and incomplete "tie out ending balance" number of $206,875.70 as its judicial accounting award?
II. Did the district court err when it awarded pre-judgment interest to plaintiffs where the underlying debt was unliquidated and plaintiffs provided no notice of that required sum to defendants?
III. Did the district court abuse its discretion when it denied defendants' unjust enrichment claims?
A. Did the district court incorrectly reject defendants' $10,800 claim for reimbursement for Jim Schlinger's time and help in running the business from March -- August, 2004?
B. Did the district court incorrectly reject defendants' $48,000 claim for reimbursement for bonding two projects for plaintiffs?
C. Did the district court err when it rejected defendants' $26,475 claim for reimbursement of one-half of the salary and bonus paid to employee Michael Mielke?
IV. Should the district court's judgment for $206,875.70 for plaintiffs be reversed, and judgment entered for defendants in the amount of $190,718.42?
[¶4] Mr. Schlinger moved to Jackson in the early 1970s. He established WW Construction shortly after arriving in Jackson. In 2000, Mr. Schlinger purchased Curtis Excavation, Inc., to operate in conjunction with WW Construction (both companies will hereinafter be referred to generally as WW Construction). Mr. McGhee and Mr. Robinson had worked for Curtis Excavation as heavy equipment operators since the early 1980s. Both men continued on after Mr. Schlinger bought the company.
[¶5] In early 2004, Mr. Schlinger was in the midst of divorce proceedings and was struggling with his physical health. He no longer wanted to deal with the stress of running WW Construction. He therefore approached Mr. McGhee and Mr. Robinson about the possibility of their leasing the equipment, building and land associated with WW Construction from him. As part of the negotiations, Mr. Schlinger stated that, because of their lack of experience running a business, he would be available to help them with any issues that might arise. He also agreed that WW Construction would advance money to CW Construction to pay expenses until CW Construction was sufficiently capitalized. They agreed the lease was to run for two years. After two years Mr. Schlinger would retake the company with the intention of selling it. Since Mr. Schlinger was to retake the company, Mr. McGhee and Mr. Robinson were to alter the business as little as possible. The monthly lease payment was never fixed but was to be in the neighborhood of $21,000.00.
[¶6] Although exact terms were never finalized and no written lease was ever signed by the parties, the parties proceeded with a lease relationship. The lease began on March 1, 2004. Mr. Schlinger advanced $40,000 to Mr. McGhee and Mr. Robinson to help them get started and then moved to Montana. At the time, Mr. McGhee and Mr. Robinson were unprepared to take over full operation of the business. CW Construction was not legally established as an LLC until March 8 and it did not acquire a federal employer identification number until June. Thus, throughout March, April and May, all business continued through WW Construction. WW Construction paid all expenses, including payroll and insurance. Generally, invoices went out on WW Construction letterhead and accounts receivable were deposited in WW Construction's bank account. The bookkeeper that formerly had worked for WW Construction, Kim Coon, continued to keep the books.
[¶7] Mr. McGhee and Mr. Robinson hired Mike Mielke as office manager. Mr. Mielke had considerable experience in the construction and excavation industry. Mr. Mielke's employment contract stated that Mr. Mielke would be entitled to no less than ten percent of the profits of jobs with which he was associated. In the beginning, Mr. Mielke needed guidance on how to manage CW Construction. To this end, he regularly contacted Mr. Schlinger for advice.
[¶8] CW Construction took over full operation of the business in June. Towards the end of May, it hired Barb Fields as its bookkeeper. Her duties included office accounting, customer billing, paying vendors and employees, and bank reconciliation. When Ms. Fields began, she was unfamiliar with the terms of the lease agreement between WW Construction and CW Construction. She was not even sure which company she worked for. It was very difficult for her to keep track of amounts due between the two companies, although she received some input from Mr. Schlinger as well as Mr. Robinson and Mr. McGhee as to which bank account certain monies should be deposited.
[¶9] At some point during the fall, Mr. Schlinger decided Mr. McGhee and Mr. Robinson were not effectively managing CW Construction. He was concerned that they were losing employees and had not generated enough new business. Because of his concerns, he, in his official capacity, determined to resume control of WW Construction. Consequently, the lease ended as of October 31, 2004. At the end of the lease, the parties could not agree on how much was owed between the companies. In an attempt to reconcile the intercompany accounts, Ms. Fields produced an accounting, which she titled a "Tie Out Ending Balance," that stated that WW Construction owed CW Construction $206,875.70. She was not, however, certain that the amount was accurate. Despite Ms. Fields' misgivings, the trial court adopted her accounting and awarded $206,875.70 to Appellees.
[¶10] This appeal comes to us after a bench trial. The findings of fact after a bench trial are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail reweighing disputed evidence. We do not set aside the district court's factual findings unless they are clearly erroneous. Vision 2007, LLC v. Lexstar Dev. & Const. Co., 2011 WY 84, ¶ 8, 255 P.3d 914, 918 (Wyo. 2011). Under the clearly erroneous standard, a finding of fact will be overturned only if, although there is evidence to support it, this Court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. Orthopaedics of Jackson Hole, P.C. v. Ford, 2011 WY 50, ¶ 31, 250 P.3d 1092, 1100 (Wyo. 2011); Hofstad v. Christie, 2010 WY 134, ¶ 7, 240 P.3d 816, 818 (Wyo. 2010); Mullinnix LLC v. HKB Royalty Trust, 2006 WY 14, ¶ 12, 126 P.3d 909, 916 (Wyo. 2006). As always, this Court reviews conclusions of law de novo. Helm v. Clark, 2010 WY 168, ¶ 6, 244 P.3d 1052, 1056 (Wyo. 2010); Bellis v. Kersey, 2010 WY 138, ¶ 10, 241 P.3d 818, 822 (Wyo. 2010).
ISSUES I & II -- Propriety of Award against Mr. Schlinger and Prejudgment Interest
[¶11] The district court ruled that "Mr. Schlinger breached his oral agreement with [Mr. McGhee] and [Mr. Robinson] by failing to pay what was due to them for their operation of CW Construction." Consequently, the district court ordered "that Mr. Schlinger owes Plaintiffs the sum of $206,875.70." The district court's order includes an "accounting by the Court with respect to how much each party owed the other." Neither party nor the district court cites any statutory authority or case law to establish any ...