Opinion ID: 1209425
Heading Depth: 1
Heading Rank: 1

Heading: measure of compensation

Text: Preliminary to a detailed discussion of the applicable measure of compensation in this contract resultant from the application of the theory of unjust enrichment, and particularly in view of appellant's contention that the proper measure of recovery in cases where labor and materials are expended for improvements on real estate is clearly the difference between the market value of the realty before and after the improvements, an examination of the possible results of the application of such a rule will be made. These demonstrate that it could have undesirable results, possibly in this and all other such cases. It is entirely conceivable that a partially completed golf course might reduce the value of the lands, upon which it was constructed, for agriculture or other use to which it had formerly been placed and resultant from the construction of a golf course thereon, and that until it was satisfactorily completed as such golf course, it would have no value for use as such course. If this resulted in a reduction in the value rather than enhancement, should the supplier here, because of these factors entirely beyond his control, be deprived of any compensation for the materials which he furnished? The writer thinks not. Viewed from a contrary viewpoint, would appellant be contending here for the application of this rule if the enhancement in value of the premises, by virtue of it having created a popular and busy golf course, far exceeded the value of the materials or labor furnished? It is suggested here that this would not be the contention of the appellant if this were the case. Myriad examples of the injustice or ridiculous result which might result from strict adherence to such rule could easily be imagined. It is because of these possibilities that Restatement of the Law (Second) of Contracts 2d § 371 (1981) notes that the measure of recovery should be as justice requires and apparently recognizes that, this being an equitable relief, the facts and circumstances governing the cases should dictate the proper rule. This Court has generally recognized that unjust enrichment is an equitable doctrine. Rocky Mountain Turbines, Inc. v. 660 Syndicate, Inc., Wyo., 623 P.2d 758 (1981), along with Bereman v. Bereman, Wyo., 645 P.2d 1155 (1982), has recognized that no person should be permitted to unjustly enrich himself at the expense of someone else and that he should be required to make restitution of or for property or benefits received or retained where it is just and equitable that such restitution be made. See also 66 Am.Jur.2d, Restitution and Implied Contracts, § 3 (1973). In Engle v. First National Bank of Chugwater, Wyo., 590 P.2d 826, 830 (1979), this Court, citing with approval 53 Am.Jur.2d, Mechanics' Liens, § 2 at 516-517 (1970), set out as follows: `The basis for a mechanic's lien and the mechanic's lien laws lies in the principles of equity and the dictates of natural justice. Such laws are based on the equity of paying for work done or materials delivered. The principle or doctrine upon which the mechanic's lien and the mechanic's lien laws rest is stated to be the equitable principle of restitution or the prevention of unjust enrichment, and estoppel to deny a benefit. But it appears that it is the detriment to the mechanic or materialman rather than the benefit to the landowner or other party which provides the fundamental basis for the lien, so that a lien may exist even though the value of the owner's property has not been increased.   ' (Footnotes omitted.) (Emphasis added.) We further find a clear and logical answer to the appellant's contention that the measure of recovery available here to 2M Company, Inc. under these facts is solely the enhancement of the value of the property upon which this machinery and effort were placed. The Supreme Court of Montana has recently considered a question of this character in the case of Robertus v. Candee, Mont., 670 P.2d 540, 543 (1983), when it said: There may be cases where the enhancement to the defendant's property will be far less than the quantum meruit value of the plaintiff's efforts. For example, where the improvement did not enhance the value of the property but did result in a pecuniary saving to the defendant, the enhancement measure would not reflect the unjust enrichment. Conversely, there may be cases where the value of the enhancement greatly exceeds the cost of the improvement, as in this case. Thus the rule has evolved that the proper measure of damages in unjust enrichment should be the greater of the two measures. Restatement of Law, Contracts 2d § 371 comment b; 12 Williston, Contracts § 1480. (Emphasis in original.) We have, in this case, the agreed contract price and the contract entered into by Shanor and the Country Club of the Big Horns with 2M Company, Inc. This, standing alone, would be evidence of reasonable value of the property placed thereon. Keneally v. Orgain, 186 Mont. 1, 606 P.2d 127 (1980); Bodde v. Burnham, Mo. App., 588 S.W.2d 516 (1979). The record further reveals that neither Shanor nor the Country Club of the Big Horns had ever denied the delivery and receipt of all the materials covered in the lien claim and for which this claim was made, nor have they made any showing that the value claimed was not the reasonable or proper value. Apparently there is no complaint made on this score at all, but appellant has chosen to rest, in this area at least, on his contention that enhancement of value is the sole and only measure which can be proven to sustain this recovery, but which is not the proper measure of compensation under these authorities.