Case Title: Eisele v. Rice

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1997-12-10T00:00:00Z

Document:
Eisele v. Rice1997 WY 136948 P.2d 1360Case Number: 96-254Decided: 12/10/1997Supreme Court of Wyoming

WILLIAM J. EISELE, 

Appellant (Plaintiff), 

 

v. 

 

JANE J. RICE, WILLIAM WOOLSTON, IV, JILL WOOLSTON 
FLACK, 

 

VALERIE RICE KOBOLD, JEFF WOOLSTON and LISA RICE 
WILMER, 

Appellees (Defendants).

 

Appeal 
from the District Court of Sheridan County 

The 
Honorable Dan R. Price II, Judge

 

 

Representing 
Appellant: 

James P. 
Castberg, Sheridan.

 Representing 
Appellee: 

Dan B. 
Riggs, Haultain E. Corbett and Jonathan A. Botten of Lonabaugh and Riggs, 
Sheridan. 

 

Before TAYLOR, C.J., and 
THOMAS, MACY, GOLDEN and LEHMAN, JJ.

TAYLOR, Chief 
Justice. 

[¶1]      Appellant 
challenges the district court's grant of summary judgment in favor of appellees 
on his claim of quantum meruit. 
Appellant claims there are material facts which support his claim that appellees 
wrongfully refused to compensate him for his services in the sale of appellees' 
stock in John E. Rice & Sons, Inc.

 

[¶2]      We 
affirm.

 

I. 
ISSUES

 

[¶3]      Appellant, 
William J. Eisele (Eisele), presents the following issues for 
review:

 

I. The trial court erred in its findings of fact that 
it was unclear after the contract expired, as to whether the plaintiff was 
working for the buyers of the defendants' stock, or for the 
defendants.

II. The trial court erred in its findings of fact 
that before the defendants sold their stock, the plaintiff had an opportunity to 
have the defendants consider payment of a commission to him, and he refused to 
have them consider payment at that time.

III. The trial court erred in its conclusion of law 
that to allow restitution to be made in this case would involve a violation or 
frustration of law or opposition to public policy because of the undisputed 
facts set forth in the findings of fact in the court's 
order.

IV. That the court erred in its ruling that there 
were no genuine issues of material fact in this case and that as a matter of 
law, the defendants are entitled to a summary judgment in their 
favor.

 

[¶4]      Appellees, the 
majority and minority shareholders of John E. Rice & Sons, Inc., phrase the 
issues as follows:

A.        Did the 
trial court correctly rule that Plaintiff failed to prove the elements of a 
quantum meruit claim?

B.        Did the 
trial court correctly rule that there are no disputed issues of material fact 
which would preclude summary judgment?

C.        Is 
quantum meruit or unjust enrichment available as a remedy to revive or 
alter an expired contract?

D.        Did the 
trial court correctly rule that to allow Plaintiff to recover on his quantum 
meruit claim would frustrate law or public policy?

 

II. 
FACTS

 

[¶5]      This appeal 
arises from Eisele's claim that he is legally entitled to payment for his 
efforts leading to the sale of the corporate stock of John E. Rice & Sons, 
Inc. (the corporation). The primary asset of the corporation was a large tract 
of land known as the "Wrench Ranch" (the ranch) located just north of Sheridan, 
Wyoming. The ranch was established in the 1940's by John E. Rice and his wife, 
Ruth, and, in 1950, the family-run ranching operation was incorporated. At the 
time relevant to this action, the corporation's shares of stock were owned by 
majority shareholders, Jane J. Rice, William Woolston IV and Jeff Woolston, and 
minority shareholders, Jill Woolston Flack, June Warren (Eisele's sister), her 
children Lisa Rice Wilmer and Valerie Rice Kobold. 

 

[¶6]      The following 
recitation of facts is taken from Eisele's deposition testimony. In late 1992, 
the minority shareholders brought suit against the majority shareholders. The 
lawsuit resulted in a settlement in December 1993 in which the parties agreed to 
liquidate the assets and dissolve the corporation. Learning from his sister that 
the ranch was to be sold, Eisele contacted Jane Rice and informed her that he 
knew of prospective buyers for the ranch.

 

[¶7]      Undeterred by his 
lack of a license to sell securities or real estate, Eisele again contacted Jane 
Rice in late April or early May 1994. Eisele informed Jane Rice of the name of a 
potential buyer and requested permission to show the ranch to the prospective 
buyer. Eisele's request was denied, and he was instructed to have the 
prospective buyer accompanied by William Woolston IV. According to Eisele, this 
instruction led him to understand that appellees did not want to be obligated to 
him in respect to the sale, and that he would need a written agreement to insure 
compensation.

 

[¶8]      Around the same 
time, Eisele also contacted two other prospective buyers, and with the 
permission of appellees, showed the ranch. Eisele stated that he believed if he 
could find a buyer for the ranch and bring them to the table, he would be able 
to negotiate a commission for himself at the same time he negotiated the sale. 
Neither of these prospective buyers, however, wanted to make an 
offer.

 

[¶9]      Although the 
record is unclear as to the exact time, prior to May 7, 1994 Eisele also toured 
the ranch with James "Butch" Jellis (Jellis) and Neltje (a prospective buyer who 
requested her identity be kept confidential). Afterwards, Jellis telephoned 
Eisele to let Eisele know that Neltje was interested in buying the property. 
Eisele deliberately withheld Neltje's identity from appellees because "[Neltje] 
* * * didn't want anybody to know she was interested in 
it."

 

[¶10]   Discussions between Eisele and 
Neltje progressed, and Eisele provided available information regarding the 
property and the corporation. Eisele then approached Jane Rice and William 
Woolston IV and told them he had an interested buyer. Eisele also stated he 
would like a written agreement to receive a commission if his interested buyer 
bought the ranch. The parties executed a written contract which provided that 
effective May 7, 1994, Eisele would receive a commission of four percent if: (1) 
he produced a qualified purchaser; (2) with an offer acceptable to the 
shareholders; and (3) within thirty days. The contract further provided that any 
modification or change in terms must be set forth in writing signed by all 
shareholders.1

 

[¶11]   During the thirty-day period that 
the contract was in effect, Eisele did not disclose Neltje's identity and no 
offer for the ranch or the stock was presented. In June 1994, after the contract 
period had terminated, Eisele told Jane Rice that Neltje was his prospective 
buyer, but that Neltje was no longer interested in buying the 
ranch.

 

[¶12]   Eisele took no further action 
regarding the ranch until the late summer or fall of 1994. At that time, he had 
brief contact with another prospective buyer, but testified he did not expect 
compensation for these efforts in the event of a sale. Eisele stated he met with 
the prospective buyer because he "was wanting to see them get it sold. My niece 
was involved and my sister and everybody was going to benefit from 
it."

 

[¶13]   In early 1995, Jellis contacted 
Eisele and informed him that Neltje was again interested in purchasing the 
ranch. Eisele then called his niece, Lisa Rice Wilmer, to relay the information. 
Eisele testified he had no more involvement regarding the ultimate sale to 
Neltje, but that all further negotiations were conducted between the prospective 
buyer, the sellers, and their lawyers.

 

[¶14]   However, Eisele also testified that 
in the meantime, he was involved in negotiations between the minority 
shareholders and Neltje to form a partnership. The partnership was intended to 
form the basis of an offer to purchase two-thirds of the corporation's stock, 
and if the partnership did not work out in the future, Neltje could buy out the 
remaining shares retained by the minority shareholders at $1.00 more per share 
than the original purchase offer. Eisele did not apprise the majority 
shareholders of these negotiations and testified he did not expect compensation 
for his involvement because these were "a different group of buyers * * *." 
Pursuant to the negotiations, on February 7, 1995, Neltje and Jellis made an 
offer to purchase two-thirds of the corporation's stock.

 

[¶15]   On February 9, 1995, another 
purchase proposal was submitted by Dan Scott, who offered to buy all of the 
stock of the corporation at ten cents more per share than the Neltje/Jellis 
offer. Eisele's niece, Lisa Rice Wilmer, gave Eisele a copy of the Scott offer 
and told Eisele that the majority shareholders were inclined to accept. Although 
Eisele could not testify with certainty, he admitted it was likely that he 
passed this information on to Jellis even though Eisele had not received 
authority to do so.

 

[¶16]   The first Neltje/Jellis offer was 
rejected on February 10, 1995 with a counter-offer proposal setting the price 
for the majority shares at fifty cents more per share. Through Jellis, Eisele 
learned that Neltje believed the counter-offer price was too high. Again, Eisele 
did not inform the shareholders of this conversation. At some time, Neltje also 
told Eisele she did not believe the partnership would work out and she planned 
to make an offer on her own. However, Neltje did not discuss the time or terms 
of the offer.

 

[¶17]   Unbeknownst to Eisele, Neltje and 
Jellis presented a second offer on February 13, 1995 in which they offered to 
purchase all the shares of the corporation at a price five cents per share 
higher than the Scott offer. The offer was conditioned on written acceptance 
within one day, and the shareholders complied.

 

[¶18]   It is uncontested that Eisele did 
not discuss his expectation of a commission between the time of the acceptance 
and until days before the deal was closed on May 12, 1995. On May 1, 1995, 
Eisele's attorney sent a letter to all shareholders asserting Eisele's right to 
receive a four percent commission from the sale. A few days before the closing, 
Eisele filed a lawsuit against the corporation, his sister, and the appellees 
alleging breach of the contract for commission. After the corporation and 
Eisele's sister were voluntarily dismissed from the lawsuit, appellees filed a 
motion for summary judgment. In his response to appellees' summary judgment 
motion, Eisele for the first time raised his theory of quantum meruit.

 

[¶19]   On January 24, 1996, the district 
court issued its decision letter granting summary judgment in favor of 
appellees, and on February 5, 1996, issued its order and dismissed Eisele's 
complaint. On August 1, 1996, the district court entered a stipulated order for 
final judgment, and Eisele timely filed this appeal.

 

III. 
STANDARD OF REVIEW

 

[¶20]   "Summary judgment is appropriate 
when no genuine issue of material fact exists and when the prevailing party is 
entitled to have a judgment as a matter of law." Sandstrom v. Sandstrom, 884 P.2d 968, 971 (Wyo. 1994).

 

"A genuine issue of material fact exists when a 
disputed fact, if proved, would have the effect of establishing or refuting an 
essential element of the cause of action or defense asserted by the parties. The 
party moving for summary judgment bears the initial burden of establishing a 
prima facie case for a summary judgment. If the movant carries this burden, the 
party opposing the summary judgment must come forward with specific facts to 
demonstrate that a genuine issue of material fact does 
exist."

* 
* * We examine the record from the vantage point most favorable to the party who 
opposed the motion, and we give that party the benefit of all favorable 
inferences which may fairly be drawn from the record. * * * We evaluate the 
propriety of a summary judgment by employing the same standards and by using the 
same materials as were employed and used by the lower 
court.

 

Adkins v. Lawson, 892 P.2d 128, 130 (Wyo. 1995) (quoting Thunder Hawk by and through Jensen 
v. Union Pacific Railroad Co., 844 P.2d 1045, 1047 (Wyo. 
1992)).

 

IV. 
DISCUSSION

 

[¶21]   Eisele alleges he is entitled to 
reasonable compensation for his services in locating, identifying and providing 
buyers to enter into an agreement with appellees for the purchase of their stock 
in the corporation. We need not look further than Eisele's own deposition 
testimony and affidavit to affirm the ruling of the district 
court.

 

[¶22]   Having abandoned his breach of 
contract claim, Eisele's appeal is based solely on his claim under a theory of 
quantum meruit. Quantum meruit, or unjust enrichment, 
provides for the recovery of damages on a contract implied in equity. State v. BHP Petroleum Co., Inc., 804 P.2d 671, 672 n. 3 (Wyo. 1991) (quoting 
Johnson v. Anderson, 768 P.2d 18, 25 (Wyo. 1989)). This equitable doctrine 
is based on the theory that

 

"one person should not be permitted to unjustly 
enrich himself at the expense of another, but should be required to make 
restitution * * * for property or benefits received * * * where it is just and 
equitable that such restitution be made, and where such action involves no 
violation or frustration of law or opposition to public policy, either directly 
or indirectly."

 

BHP Petroleum Co., Inc., 804 P.2d  at 672 (quoting R.O. Corp. v. John H. Bell Iron 
Mountain Ranch Co., 781 P.2d 910, 912 (Wyo. 1989)).

 

[¶23]   As an initial matter, we note that 
Eisele's claim must be founded on his efforts and legitimate expectations 
arising after the written contract expired. Adkins, 892 P.2d  at 131; Smart & 
Golee, Inc. v. Delany, 65 Ill. App.2d 60, 213 N.E.2d 27, 30 (1965). In Eisele's 
affidavit submitted for the purpose of opposing summary judgment, he 
stated:

 

On or about May 7, 1994, after showing the ranch 
property to Mr. Jellis and Neltje, I obtained an agreement from the Defendants * 
* * which agreement gave me thirty (30) days to present an offer of sale * * * 
to the shareholders of the corporation for their stock.

 

Eisele agrees that he did 
not obtain or submit an offer within the time limits specifically designated in 
the written contract. Thus, it is undisputed that Eisele did not provide the 
services which entitled him to a commission under the terms of the contract. 
Neither can Eisele revive his contract nor extend its terms under a theory of quantum meruit. Hershey Foods Corp. v. Ralph Chapek, 
Inc., 828 F.2d 989, 999 (3rd Cir. 1987); J.A. Moore Const. Co. v. Sussex Associates 
Ltd. Partnership, 688 F. Supp. 982, 988 (D.Del. 1988); First Nat. Bank of Maryland v. Burton, 
Parsons & Co., Inc., 57 Md. App. 437, 470 A.2d 822, 829, cert. denied, 300 Md. 90, 475 A.2d 1201 
(1984); 66 Am.Jur.2d, Restitution and 
Implied Contracts, § 6 (1973).

 

[¶24]   To succeed on his claim under 
quantum meruit, Eisele must prove that after the expiration of his contract: (1) 
valuable services were rendered to appellees; (2) which services were accepted, 
used and enjoyed by appellees; (3) under such circumstances which reasonably 
notified appellees that Eisele, in rendering the service, expected to be paid by 
them; and (4) without such payment, appellees would be unjustly enriched. Adkins, 892 P.2d  at 131; Bowles v. Sunrise Home Center, Inc., 847 P.2d 1002, 1004 (Wyo. 1993); Zitterkopf 
v. Bradbury, 783 P.2d 1142, 1144 (Wyo. 1989).

 

[¶25]   Eisele failed to establish any 
material fact which might demonstrate that he provided valuable services to 
appellees under circumstances which would give notice of a reasonable 
expectation of payment. Eisele first contends that the shareholders knew he 
continued to provide valuable services to appellees by meeting with a 
prospective buyer in the late summer or fall of 1994. However, Eisele agrees 
that this effort did not culminate in an offer of purchase, and admits he did 
not expect compensation for that effort.

 

[¶26]   Eisele also points to his 
involvement in the revived negotiations with Jellis and Neltje in January 1995. 
Eisele's deposition testimony, however, clearly shows that "his involvement" was 
not for the benefit of all appellees, and he again admits he did not expect 
payment for his participation in the offer to buy two-thirds of the 
stock.

 

[¶27]   Moreover, there is nothing in the 
record which indicates that appellees accepted any services from Eisele under 
circumstances which reasonably notified appellees that Eisele expected to be 
paid. Eisele testified that he knew he must have a written agreement to entitle 
him to a commission for the sale of the ranch prior to the agreement in May 
1994. There is nothing in the record which indicates that the relationship which 
generated the need for a written agreement changed in any way after the 
agreement expired.

 

[¶28]   A careful review of Eisele's 
deposition testimony reveals he did not speak with any of the appellees 
regarding his continuing expectation that he would receive a commission from 
them. Instead, Eisele relies on unspecified conversations in which his nieces 
allegedly stated that he would receive a commission. Eisele also points to a 
conversation he had with Jeff Woolston in December 1994 or early 1995 in which 
Jeff Woolston allegedly stated he "was glad that [Eisele] was getting a 
commission * * *." However, Eisele failed to rebut the affidavits of his nieces 
which stated that references to a commission were made in the context of the 
understanding that Eisele would be receiving compensation from Jellis and 
Neltje.

 

[¶29]   Finally, Eisele's actions were a 
direct violation of public policy. Although Eisele believed he was acting as an 
"agent" for appellees, he failed to inform his "principals" of vital information 
and perhaps passed on information which was highly confidential. There is 
nothing in the record which supports Eisele's equitable 
claim.

 

V. 
CONCLUSION

 

[¶30]   Eisele failed to show that he 
performed any services on behalf of appellees after the expiration of an express 
agreement. Neither is there any evidence that services were performed under 
circumstances in which appellees were reasonably notified of an expectation of 
payment. Summary judgment is affirmed.

 

Footnotes

1 Appellee Lisa Rice Wilmer did not sign 
the agreement.