Title: Schlinger v. McGhee

State: wyoming

Issuer: Wyoming Supreme Court

Document:

JAMES M. SCHLINGER, CURTIS EXCAVATION, INC., a Wyoming Corporation, and WW CONSTRUCTION, LLC, a Wyoming Limited Liability Company v. CHRISTOPHER M. McGHEE, JACK E. ROBINSON and CURTIS WESTWOOD CONSTRUCTION, LLC, a Wyoming Limited Liability Company2012 WY 7Case Number: S-10-0185Decided: 01/18/2012NOTICE: 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 correction may be made before final publication in the permanent volume.
OCTOBER 
TERM, A.D. 2011

JAMES 
M. SCHLINGER, CURTIS EXCAVATION, INC., a Wyoming Corporation, and WW 
CONSTRUCTION, LLC, a Wyoming Limited Liability Company,Appellants 
(Defendants),v.CHRISTOPHER M. McGHEE, JACK E. ROBINSON and 
CURTIS-WESTWOOD CONSTRUCTION, LLC, a Wyoming Limited Liability 
Company,Appellees (Plaintiffs).
 
Appeal 
from the District Court of Teton County
The 
Honorable Nancy J. Guthrie, Judge 
 
Representing 
Appellants:
Scott 
P. Klosterman and Patrick J. Murphy of Williams, Porter, Day & Neville, 
P.C., Casper, Wyoming.  Argument by 
Mr. Klosterman.
 
Representing 
Appellees:
J. 
Denny Moffett of Moffett & Associates, PC, Jackson, Wyoming; and Heather 
Noble, Jackson, Wyoming.  Argument 
by Ms. Noble.
 
Before 
KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, 
JJ.
 
GOLDEN, 
Justice.
[¶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.
 
ISSUES
 
[¶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?
 
FACTS
 
[¶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.
 
DISCUSSION
 
Standard 
of Review
 
[¶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.”1   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 
specific standards for a judicial accounting under these circumstances.  In truth, this case involves competing 
breach of contract claims.  

 
[¶12]   “The elements for a breach of contract claim consist of a lawfully 
enforceable contract, an 
unjustified failure to timely perform all or any part of what is promised 
therein, and entitlement of injured party to damages.” Reynolds v. Tice, 
595 P.2d 1318, 1323 (Wyo. 1979).  On 
appeal, appellants challenge the sufficiency of the evidence of appellees’ 
damages.  In 
order to be entitled to damages for breach of contract, the plaintiff 
 
has 
the burden of producing sufficient evidence to prove his damages. “Damages must 
be proven with a reasonable degree of certainty, and a court may not resort to 
speculation or conjecture in determining the proper amount to award.”  Capshaw v. Schieck, 2002 WY 54, ¶ 10, 44 P.3d 47, 52 (Wyo. 2002) (quoting Sannerud 
v. Brantz, 879 P.2d 341, 345 (Wyo. 1994)) (internal citations 
omitted).
 
Knight 
v. TCB Const. and Design, LLC, 
2011 WY 27, ¶ 17, 248 P.3d 178, 184 (Wyo. 2011).  
 
[¶13]   The district court awarded damages 
to the appellees based upon Ms. Fields’ tie out ending balance.  The district court made the following 
pertinent findings of fact:
 
9. 
        
From March 2004 through the end of May 2004, Plaintiffs were relying on 
Kim Coon, bookkeeper for WW Construction, to keep the CW Construction 
books.  At first Ms. Coon was 
residing in Jackson, but for most of the period she was working on the accounts 
while out of state.  She performed 
this work until the end of May 2004 when Barbara Fields was hired by CW 
Construction as an independent contractor to keep the books.  Ms. Fields began actively invoicing on 
behalf of CW Construction, and payments began flowing into the CW account.  She continued working for CW 
Construction through October 31, 2004, and she worked for WW Construction 
thereafter.
 
10. 
      In early 
August 2004, Ms. Fields attempted to disentangle the WW and CW accounts and 
determine how much CW Construction still owed to WW Construction.  Ms. Fields’ report (Plaintiffs’ Exhibit 
116) was based on information from Kim Coon and Mr. Schlinger’s spreadsheets, 
which detailed payments Mr. Schlinger made on behalf of CW Construction during 
March through June as well as reimbursements from CW during that period.  The records were supplemented with 
financial information accumulated by Ms. Fields since May 2004.  The report took into consideration the 
amount owed by CW to WW from Mr. Schlinger’s spreadsheets, deposits to WW from 
CW receivables that were not recorded on Mr. Schlinger’s spreadsheets, and 
various other adjustments between the two companies.  Ms. Fields’ report calculates that, 
as of August 10, 2004, CW Construction owed Mr. Schlinger $110,927.10.  She also noted that, according to CW 
spreadsheets, CW Construction owed Mr. Schlinger $94,279.07, a discrepancy of 
$16,648.03.
 
11. 
      The Court 
recognizes the great difficulty of the task in arriving at a reliable figure for 
the amount owed in August 2004: Both WW and CW accounts were handled for the 
first three months by a single bookkeeper who was not in Jackson most of the 
time.  WW billed for CW work through 
the end of May 2004, and payments for CW work were deposited in the WW 
account.  During the same period, 
March through May 2004, payments for WW work performed prior to March were being 
received and deposited in the WW account.  
Every invoice and every deposit required a determination of which company 
to credit because most transactions were going through the WW account.  Meanwhile, CW was also operating through 
its own account with money advanced by Mr. Schlinger.
 
12.       Both 
parties expressed confidence in the work of Ms. Fields.  Plaintiffs’ expert in accounting, Jeff 
Wilkinson, used Ms. Fields’ $110,927.10 figure as a starting point for his 
analysis of what amount was due to Plaintiffs as of October 31, 2004.  Defendants’ accounting expert, Carl 
Kilmer, criticized Wilkinson for failing to verify the $110,927.10 figure, but 
he did not propose an alternate figure.  
Testimony from Mr. Wilkinson and Ms. Fields revealed two problems with 
the $110,927.10 figure.  Mr. 
Wilkinson would have adjusted it downward by $30,000 because it included $30,000 
in repair deposits charged to CW Construction, which were never put in an escrow 
account and would have been refunded to CW Construction after the lease if no 
damages were determined.  In her 
testimony, Ms. Fields noted that $40,000 advanced by Mr. Schlinger and deposited 
in the CW Construction bank account on March 25, 2004 was not included in the 
$110,927.10 figure.  The Court notes 
that Mr. Schlinger’s second $40,000 advance (6/10/04) also does not appear to be 
incorporated into the amount owed by CW Construction, although the first payback 
of $35,000 was included.
 
* 
* * *
 
14. 
      A second 
series of calculations [were] made, apparently by Ms. Fields and Mr. Schlinger, 
of what CW owed WW as of August 31, 2004. (See Plaintiffs’ Exhibit 162, a 
faxed document dated 8/12/04 with additional figuring made in Mr. Schlinger’s 
handwriting.)  In that document, the 
“Total Due to Jim Schlinger” was determined to be $91,755.10, which did not 
include CW’s payment of $40,000 on 8/12/04.  The final amount owed WW Construction 
after subtracting the $40,000 was $51,755.10 as of August 31, 2004.  The Court notes that CW wrote a check to 
WW for exactly $51,755.10 on 9/17/04, apparently to clear that balance due.  (Mr. Schlinger’s calculation was later 
challenged by Plaintiffs because it added three months of rent twice, thus 
overcharging Plaintiffs by $63,234.  
On the other hand, the Court is not clear as to whether Mr. Schlinger’s 
calculations included the two $40,000 advances).
 
* 
* * *
 
16. 
      After 
September 2004, the WW and CW accounts again became entangled, with some checks 
for CW work being deposited into the WW account, some bills being paid by CW 
should have been paid by WW Construction and vice versa.  At some time after the end of 2004 – 
when Ms. Fields was employed by Defendant – she attempted to determine a “tie 
out ending balance” of the WW Construction and CW Construction accounts.  (See Plaintiffs’ Exhibit 136, p. 
1466.).  Fields’ report shows 
that on December 31, 2004, WW Construction owed $206,875.70 to CW Construction 
according to the CW books.  (See 
also Plaintiffs’ Exhibit 136, p. 1468).
 
(Emphasis 
in original.)  From these facts, the 
district court concluded:
 
33.       Both 
parties requested an accounting by the Court with respect to how much each party 
owed the other, if any.  The Court, 
acknowledging the difficulties in disentangling the accounts of CW Construction 
and WW Construction, accepts the work of bookkeeper Barbara Fields as a close 
and reliable estimate.  The Court 
notes that both parties employed Ms. Fields, expressed confidence in her 
numbers, and used her numbers in their respective profit and loss statements for 
2004.  In conclusion, the Court 
finds that Defendant James Schlinger owed Plaintiffs Christopher McGee and Jack 
Robinson $206,875.70 as of December 31, 2004.  This is the final “tie out ending 
balance” calculated by Ms. Fields as per Plaintiffs’ Exhibit 136, pages 
1467-68.
 
(Emphasis 
in original.) 
 
[¶14]   Appellants argue Ms. Fields’ ending 
balance was too conjectural to be suitably persuasive.  Appellees, on the other hand, point out 
that, under Wyoming law, damages need not be proven with absolute 
certainty.   It is true that 
absolute certainty is not required; nevertheless, as we stated above, damages do 
have to be proven with reasonable certainty.  The record does not establish that level 
of certainty; consequently, under the instant facts, appellants have the better 
argument.  
 
[¶15]   The problems in this case started 
early, when the parties employed a remarkable lack of formality in conducting 
their business affairs.  The 
district court found that Mr. McGhee and Mr. Robinson took over the business as 
of March 1, 2004; however, because they had not set up a business entity of 
their own, they continued to operate through Mr. Schlinger’s business entity, WW 
Construction, for the next three months.  
Ms. Coon testified that she kept track of all the transactions in WW 
Construction’s books only; she did not even set up any accounts for Mr. McGhee’s 
or Mr. Robinson’s business.  So, for 
March through May 2004, revenues and expenses were paid into and out of Mr. 
Schlinger’s business account.  Ms. 
Coon testified that she tried to keep track of the expenses appellants paid on 
behalf of appellees, but it was very difficult.  She stated that she had problems 
contacting Mr. McGhee and Mr. Robinson to discuss any questions she had about 
the bookkeeping because they were generally “unavailable.”  Not surprising considering the lack of 
clarity in the records, there was no clear explanation at trial of what 
revenues/expenses tied to which company during the first three months of the 
lease.  Ms. Coon prepared a 
spreadsheet showing the transactions between the parties.  She testified, however, that she was 
aware of numerous expenses she had missed and she called the spreadsheet a 
“rough draft.” 
 
[¶16]   Starting in late May or early June 
2004, Ms. Fields took over the accounting duties for appellees.  She used Ms. Coon’s admittedly 
incomplete accounting as a starting point.  
Going forward, there still was not much clarity in the business 
affairs.  Ms. Fields stated that 
there were “a lot of transactions going back and forth . . . . [T]here was no 
formal agreement that [she] was aware of.” 
 
[¶17]   Ms. Fields testified that she tried 
to clean up the “accounting mess” in August 2004, when she prepared a document 
entitled “Curtis/Westwood Construction, LLC, Amounts Due to Jim Schlinger As of 
8/10/04.”  This document was 
admitted as evidence at trial as Plaintiffs’ Exhibit 116.  The number she started with at the top of 
the balance sheet, $188,974.13 due to Jim Schlinger, was provided by either Mr. 
Schlinger or Ms. Coon, she did not know which.  Ms. Fields then added and subtracted 
amounts representing items due to or from the appellees.   At the end of the August 10th 
accounting, Ms. Fields came up with two different totals, one based on her 
calculations, $110,927.10, and the other based on the Curtis/Westwood 
spreadsheet of $94,279.07.  She 
could not explain the origin of the $94,279.07 figure or the $16,648.03 
difference.  
 
[¶18]   Throughout the lease period, the 
appellees tendered checks to appellants; however, there was no clear indication 
in the accounting records of what the checks were meant to cover, i.e., lease payments, reimbursement of 
expenses appellants paid on behalf of appellees, or loans from appellees to 
appellants.  Mr. Schlinger would 
apparently direct Ms. Fields to write checks to his company out of the 
appellees’ business account and she would comply.  In fact, Ms. Fields testified that, 
while she was working for the appellees, Mr. Schlinger would call her with 
questions about the operations of the company and she would “tell him because in 
[her] mind it was very unclear as who was running the company, who [she] was 
working for, what the chain of command was.”  
 
 [¶19]  At the end of the year, Ms. Fields 
prepared some documents which seemed to show that appellants owed the appellees 
$206,875.70.  These are the 
documents the district court relied upon in making its damages award.  Ms. Fields explained that she had made 
the entries largely for tax purposes not believing the balance would be 
collectable.  She 
stated:
 
Q.        
Explain to the Court what document 118 is.
 
A.        
Document 118 is generated from Curtis Westwood Construction’s books.  It is titled, “Note Receivable, Jim 
Schlinger.”  And it is my attempt to 
keep track of these funds that are due to, due from Jim Schlinger and WW 
construction.  

 
Q.        
Okay.  Now, at the very [sic] 
three lines up from the bottom there’s a general journal entry; do you see 
that?
 
A.        
Yes.
 
Q.        In 
the amount of $206,875.70; do you see that?
 
A.        
Yes.
 
Q.        All 
right.  Explain to the Court what 
this general journal entry means.  

 
A.        A 
general journal entry is a journal entry that is manually entered and there’s an 
error in the description, it should say reclass. net due to Jim Schlinger.  No, wait, let me see. 

 
* 
* * * 
 
Q.        So on 
Exhibit 118 it shows a negative number of $206,875.70; is that 
right?
 
A.        
Yes.
 
Q.        Tell 
the Court what that means on this document.
 
 A.       At the end 
of the year I was trying to prepare the tax return work papers to give to [the 
appellees’] CPA firm and this was on their balance sheet as a $206,000 note 
receivable from Jim Schlinger and in my opinion it was not going to be 
collectable, I therefore zeroed this out and reclassified it to lease expense. 

 
* 
* * *
 
Q.        
Okay.  With respect to 
Exhibit 118 reviewing and looking at the number, negative number, $206,875.70 
does that reflect an amount of money owed to [the appellees] by Jim 
Schlinger?
 
A.        I 
don’t know about that.  It reflects 
the amount of money that was in the account at the end of the year.  
 
* 
* * *
 
Q.        
What’s a receiveable?
 
A.        A 
receivable is an amount due from one person to another.
 
Q.        
Okay.  And what was the 
receivable in Exhibit 118?
 
A.        The 
title on this account is, “Note receivable, Jim 
Schlinger.”
 
Q.        
Okay.  So [the appellees’] 
company had a receivable from Jim 
Schlinger’s 
company; is that right?
 
A.         That’s according – I don’t 
know that.
 
Ms. 
Fields further testified:
 
                        
Q.        . . . 
[I]s it fair to say that during the time that you were 
doing 
the bookkeeping in 2004 that there was a lot of confusion in your mind about 
what to do with certain things?
 
A.         
Yes.
 
Q.        And is it also 
true that during the year 2004 that with respect to determining what was due to 
or due from that at the end of the day you cannot say for sure that this is – 
that there is a certain amount due or owed by either of the parties; is that 
true?
 
A.        
Yes.
 
Q.        And 
is it also true that with respect to a number of figures that we’ve been 
discussing here today that you just don’t have absolute certainty as to the 
accuracy of all of those entries?
 
A.        
That’s correct.
 
Q.        One 
of the numbers or figures that you’ve been asked about repeatedly was the 
$206,000?
 
A.        
Yes.
 
Q.        And 
the net reclass., all of those figures, those are things that you just don’t 
have a certainty as to whether or not those figures are correct, 
true?
 
A.        
Yes.  
 
[¶20]   While absolute certainty is not 
required to prove damages, reasonable certainty is, and the trial evidence did 
not provide much assurance about the final number.  As reflected above, Ms. Fields and Ms. 
Coon both testified they were not confident about their numbers.  Ms. Fields stated she was confused as to 
where certain bookkeeping entries should go and that she was not positive about 
her determination concerning her intercompany accounting.  In short, she had doubts as to the 
certainty of the figures in her ending balance.  Based on the testimony of both Ms. 
Fields and Ms. Coon, then, it is likely there were gaps in the accounting that 
led to Ms. Fields’ ending balance.  

 
[¶21]   The district court further 
justified its ruling that Ms. Fields’ ending balance was a proper amount of 
damages to award the appellees by reasoning that it was close to the final 
number of the accounting expert hired by them.  It is not surprising that the numbers 
were close, since the appellees’ expert relied on Ms. Fields’ numbers as the 
starting point for his calculations.  
He did not conduct an independent audit.  As he testified, to the extent Ms. 
Fields’ calculations were inaccurate, his calculations would be inaccurate.  
 
[¶22]   Under our standard of review, we 
set aside the district court’s factual findings only when they are clearly 
erroneous.  Vision 2007, ¶ 8, 255 P.3d  at 918.  A court is not, however, permitted to 
speculate or conjecture when awarding damages.  State Highway Comm’n v. Brasel & Sims 
Const. Co., 688 P.2d 871, 881 (Wyo. 1984).  After reviewing the entire record, we 
are left with the definite and firm conviction that the district court made a 
mistake in awarding damages on this evidence.  While we recognize that the district 
court expended a great deal of effort in analyzing and drawing conclusions from 
the evidence, it is apparent that it accepted evidence regarding the appellees’ 
damages that lacked a reasonable degree of certainty.  Given the speculative nature of the 
accounting, Ms. Fields’ ending balance does not satisfy the quantum of proof 
necessary to support the district court’s damages award.  The judgment in favor of the appellees 
on this claim is reversed.2  Our resolution of this issue renders 
Issue II, regarding prejudgment interest, moot.
 
ISSUE 
III – Unjust Enrichment
 
[¶23]   Unjust enrichment is the unjust 
retention of a benefit to the loss of another.  It exists as a basis for recovery for 
goods or services rendered under circumstances where it would be inequitable if 
no compensation was paid in return.  
In Wyoming, the elements of unjust enrichment are: 1) valuable services 
were rendered; 2) to the party to be charged; 3) which services were accepted, 
used and enjoyed by the charged party; and 4) under circumstances that 
reasonably notified the party being charged that the other party would expect 
payment for the services.  Horn v. Wooser, 2007 WY 120, ¶ 24, 165 P.3d 69, 76 (Wyo. 2007); Jacoby v. 
Jacoby, 2004 WY 140, ¶ 10, 100 P.3d 852, 855 (Wyo. 2004).  
 
[¶24]   Appellants make three distinct 
claims for recovery for unjust enrichment.  
The first claim is that they should be reimbursed for the time Mr. 
Schlinger spent consulting with CW Construction.  The district court held this claim 
failed because there was no evidence that Mr. Schlinger ever notified Mr. McGhee 
or Mr. Robinson that payment was expected for his consulting services.  Appellants argue that actual knowledge 
is not a prerequisite to finding unjust enrichment.  They are correct.  It is enough if circumstances 
“reasonably notified the party being charged that the other party would expect 
payment for the services.”  

 
[¶25]   Nevertheless, Appellants’ argument 
fails.  Unjust enrichment is an 
equitable remedy.  As such, it 
cannot exist where there is an express contract governing the relationship 
between the parties.  Wagner v. Reuter, 2009 WY 75, ¶ 13, 208 P.3d 1317, 1322 (Wyo. 2009); Sowerwine v. 
Keith, 997 P.2d 1018, 1021 (Wyo. 2000).  There is no dispute as to the existence 
of an oral contract for the lease of the business.  Mr. Schlinger’s willingness to give 
advice to CW Construction as to running the business was part of that 
contractual relationship.  Thus, 
whether or not Appellants should receive payment for Mr. Schlinger’s consulting 
services is a contract dispute.  An 
unjust enrichment claim cannot be invoked to bypass terms of a contract.3  The judgment on this claim is 
affirmed.
 
[¶26]   Appellants’ second claim is for 
compensation they argue is due WW Construction in return for it bonding two jobs 
for CW Construction.  Again, the 
district court denied the claim because it found no evidence that Mr. Schlinger 
advised Mr. McGhee or Mr. Robinson that WW Construction expected to be 
compensated for the bonding.  
Appellants argue it is generally accepted practice for someone providing 
bonding to be compensated, thus the circumstances were such that Mr. McGhee and 
Mr. Robinson were on notice that payment would be expected.  
 
[¶27]   We disagree with this 
contention.  We believe the 
circumstances are such that CW Construction would not reasonably be on notice 
that WW Construction would demand compensation.  The evidence is that CW Construction 
could not bond the projects itself.  
Without bonding, it could not bid on the jobs, and it needed the 
work.  Mr. Schlinger wanted CW 
Construction to succeed.  Through WW 
Construction, Mr. Schlinger had already been very generous financially, paying 
all CW Construction expenses from March through May.  Thus, the fact that Mr. Schlinger agreed 
to bond the projects without requesting any compensation would not seem 
remarkable.  It would be reasonable 
to believe WW Construction would not demand any extra compensation.4  The judgment on this claim is 
affirmed.
 
[¶28]   Appellants’ final claim for 
recovery is for compensation WW Construction paid to Mr. Mielke.  After WW Construction cancelled the 
lease agreement and retook the business, it retained Mielke as an employee.  Mr. Schlinger felt that Mr. Mielke had 
been underpaid while working for CW Construction so immediately doubled his 
salary.  Mr. Schlinger, through WW 
Construction, also gave Mr. Mielke a bonus and bought him a pickup truck.  Mr. Schlinger alleges he did all this 
because CW Construction had not honored its employment contract with Mr. Mielke 
regarding Mr. Mielke receiving a share of the profits.  
 
[¶29]   The district court denied this 
claim because of a complete lack of proof.  
No evidence was presented as to Mr. Mielke’s involvement with any 
particular project.  There also was 
no evidence as to the profit margin on any particular project.  On appeal, WW Construction simply argues 
that appellees did not object to the amount he is seeking.  This, however, is not the standard.  Since it was their claim, appellants had 
the burden of presenting sufficient credible evidence to support a judicial 
determination in their favor.  They 
did not do so.  The judgment on this 
claim is affirmed.
 
ISSUE 
IV - Should this Court Award Appellants Damages?
 
[¶30]   Appellants present no specific 
argument in support of their fourth issue.  
They simply state in the “conclusion” segment of their brief that this 
Court should amend the judgment, reversing the award to appellees and instead 
awarding damages to them.  This 
conclusion is based on the arguments they made under Issues I and III regarding 
their contract and unjust enrichment claims.  Given we have already rejected those 
arguments, we will not further address this issue.   
 
CONCLUSION
 
[¶31]   The district court committed clear 
error in finding that Ms. Field’s ending balance provided a reasonably certain 
basis to award damages.  There is 
insufficient evidence in the record to justify an award of damages to either 
party.  We reverse the district 
court’s judgment on the appellees’ breach of contract claim and reject 
appellants’ argument that they should be awarded breach of contract 
damages.    

 
[¶32]   Appellants’ various claims for 
recovery under the theory of unjust enrichment are unsupported by the 
evidence.  The district court 
judgment on these claims is affirmed.
 
FOOTNOTES
 
1Although 
the arguments on appeal focus on the propriety of the amount of damages awarded, 
there is another fundamental problem with the district court’s judgment.  There is no evidence that the judgment 
should have been entered against Mr. Schlinger personally.  In its final order, the district court 
made no findings that Mr. Schlinger, during the course of the lease 
negotiations, or the lease itself, gave any personal assurances to Mr. McGhee or 
Mr. Robinson as to what would be “due to them for their operation of CW 
Construction.”  The evidence is that 
the oral agreement for the operation and management of the excavation business 
was entered into between CW Construction and WW Construction.  The money at issue is money that was 
exchanged between the two companies during the course of the lease, whether 
intentionally or mistakenly.  The 
final award of $206,875.70 is based on an intercompany accounting.  We find no record evidence that Mr. 
Schlinger personally guaranteed, as an adjunct to the lease agreement, that Mr. 
McGhee, Mr. Robinson, or CW Construction would receive this (or any) 
amount.  As such, the judgment 
against Mr. Schlinger personally, rather than his company, is not supported by 
the record.  
2Appellants also argue that even if this Court affirms the district 
court’s finding that appellees were entitled to a judgment consistent with the 
$206,875.50 ending balance, we should reduce the judgment by $69,376.28.  They claim that amount was incorrectly 
credited to the appellees when it was actually payment for a job performed by WW 
Construction outside of the lease agreement.  Given we are ruling that the ending 
balance was not supported by the record and there is insufficient accounting 
evidence to justify an award to either party, we will not further consider this 
argument.    

3Should this have been brought as a contract claim, the finding by the 
district court that the terms of compensation were never discussed would be 
dispositive.  

 
4There is also a problem with proof.  
WW Construction asked for ten percent of the bid price as 
compensation.  This does not, 
however, seem to be industry standard.  
Mr. Mielke testified that the industry standard, as far as he knew, was 
more complicated, with no set percentage.  
According to Mr. Mielke, there typically is an upfront cost of three 
percent of the bid price.  Then, 
after the job is completed, the percentage would be adjusted based on what 
happened during the project.  WW 
Construction did not present any evidence of what the actual compensation would 
be under this formula.