Opinion ID: 1744061
Heading Depth: 1
Heading Rank: 4

Heading: The Stones' Money-Had-and-Received Claim and Their Unjust-Enrichment Claim

Text: Having determined that Mellon did not breach the contract, we turn to the Stones' other claims, claims based on the theory of money had and received and the theory of unjust enrichment. Mellon contends that the Stones voluntarily paid the fax fee and therefore cannot recover under either theory. We agree. This Court has long recognized the defense of voluntary payment: It has been the law in Alabama for over 150 years that where one party, with full knowledge of all the facts, voluntarily pays money to satisfy the colorable legal demand of another, no action will lie to recover such a voluntary payment, in the absence of fraud, duress, or extortion. Mt. Airy Ins. Co. v. Doe Law Firm, 668 So.2d 534, 537 (Ala.1995). Claims based on theories of breach of contract, unjust enrichment, and money had and received are precluded by proof that the plaintiff voluntarily paid what he or she is seeking to recover. Id.
The Stones argue that the evidence is conflicting on the question whether Lawhorn ever informed them of the fax fee, and they then argue that this conflict creates a genuine issue of material fact and that this issue of fact barred the entry of a summary judgment based on the defense of voluntary payment. The Stones rely on the limited scope of the agency relationship created by the General Authorization they gave Lawhorn. The Stones assert that the authority they gave Lawhorn was not broad enough to allow Lawhorn to incur a fax fee on their behalf. Mellon contends that the General Authorization is not the exclusive source of Lawhorn's authority and that Lawhorn had the authority to act on behalf of the Stones in incurring the fee. When the Stones hired Lawhorn to assist them in securing refinancing, they, according to Mrs. Stone, authorized Lawhorn to take care of all the details related to the refinancing. One part of this process required Lawhorn to obtain payoff information on the Stones' existing loans or debts in order to obtain a record reflecting the Stones' financial status. Some form of written authorization was necessary for Lawhorn to obtain information from third parties concerning the Stones. The purpose for which Lawhorn was retained (to obtain fixed-rate financing), required more than simply collecting information about the Stones. Under the undisputed evidence, Lawhorn had the implied authority to engage in activities in furtherance of the purpose of obtaining a fixed-rate mortgage. `Implied authority of an agent is authority to do whatever acts or use whatever means are reasonably necessary and proper to the accomplishment of the purposes for which the agency was created, so that in the conduct of his principal's business, an agent has implied authority to do that which the nature of the business would demand in its due and regular course.' Merrell v. Joe Bullard Oldsmobile, Inc., 529 So.2d 943, 947 (Ala.1988) (trial court's instruction to the jury, approved as an accurate statement of the applicable law, 529 So.2d at 948). An agent's knowledge can bind the principal if the agent acquired the knowledge while acting within the line and scope of his authority and the knowledge relates to the very matter coming within his authority. Sullivan v. Alabama Power Co., 246 Ala. 262, 20 So.2d 224 (1944); see, also, Tennessee Valley Bank v. Williams, 246 Ala. 563, 566, 21 So.2d 686, 689 (1945). Given Lawhorn's implied authority, we conclude that Lawhorn's knowledge is the Stones' knowledge. Therefore, it was within Lawhorn's implied authority to incur the fax fee on behalf of the Stones. While the evidence is in conflict as to whether Lawhorn had ever specifically informed the Stones that it had incurred the $15 fax fee, that conflict does not create a genuine issue of material fact, given our holding that Lawhorn's knowledge was imputed to them. Lawhorn, acting as the Stones' agent, received the payoff statement and, acting on behalf of the Stones, placed it in the hands of the closing attorney, thereby setting in motion the final steps necessary to cause the fax fee to be included in the amount paid to Mellon to pay off the note. We conclude that Lawhorn's actions, which we hold were attributable to the Stones, constitute a payment of the fax fee by the Stones.
The Stones argue that the voluntary-payment defense is inapplicable in this case because, they say, the payment was made not voluntarily but under duress and under a mistake of fact. Mt. Airy Ins. Co., 668 So.2d at 538. Although evidence of duress or mistake can limit the application of the voluntary-payment doctrine, we find no such evidence in this case. First, Lawhorn, acting as the Stones' agent, requested the faxed information over a month before the closing. For all that appears, the Stones had a reasonable alternative; they could have gotten the payoff statement by mail, free of charge. But, even if the urgency of the situation had required the use of facsimile transmission rather than the regular mail service and the record does not suggest it did the Stones' failure to challenge the payment until nearly three years after the duress had been lifted, destroys any reasonable factual basis for a finding of duress. A contract made under duress will be deemed ratified if the aggrieved party fails to repudiate the agreement within a reasonable time after the duress has dissipated. Keshishian v. CMC Radiologists, 142 N.H. 168, 173, 698 A.2d 1228, 1232 (1997). A nearly three-year delay, under these facts, falls well beyond the outer limit of a reasonable time, as a matter of law. The Stones argue that the payment was not voluntary, because, they say, it was made under a mistake of fact. The mistake, they say, is that they thought payment of the fax fee was necessary for a release of the mortgage. The Stones argue that because they, ostensibly through knowledge of their agent, Lawhorn, believed that payment of the fax fee was necessary for a release of the mortgage, the payment was made under a mistake of fact; that mistake of fact, they argue, precludes application of the voluntary-payment doctrine. See Mt. Airy Ins. Co., 668 So.2d at 538. Mellon's fax fee is separately listed on the payoff statement, distinct from the loan principal and the accrued interest. See Colangelo v. Norwest Mortgage, Inc., 598 N.W.2d 14 (Minn.App.1999). The fact that Lawhorn, as the Stones' agent, may have read more into the phrasing of the statement than that phrasing logically and fairly suggestsand we cannot know that Lawhorn did thatwould not provide a factual basis for a finding that the fee was paid because of a mistake of fact. Likewise, the testimony of Mellon's representative as to what Mellon would have done if the Stones had inquired whether the fax fee was a condition for release of the mortgage, does not create a genuine issue of material fact. At most, Lawhorn made a mistake of law, a mistake that would be imputed to the Stones. If a party with full knowledge of the facts wrongly interprets them, so that he misperceives their legal significance, that wrong interpretation does not constitute a mistake of fact. The Stones' misperception of the legal significance or effect of Mellon's including the fax fee in the total shown on the payoff statement constitutes a mistake of law rather than a mistake of fact, and a mistake of law does not preclude the application of the voluntary-payment doctrine. It is well settled that money voluntarily paid under a mistake of fact may be recovered, see, e. g., Citizens' Bank of Fayette v.[J.] Blach & Sons, Inc., 228 Ala. 246, 153 So. 404 (1934); Jones v. Watkins, 1 Stew. 81 (Ala.1827), even where the party paying had means of ascertaining the real facts, Hinds v. Wiles, 12 Ala.App. 596, 68 So. 556 [(1915)]. However, it is equally well settled that money voluntarily paid with full knowledge of the facts but by reason of mistake of law cannot be recovered. See Rice v. Tuscaloosa County, 242 Ala. 62, 4 So.2d 497 (1941).... Sherrill v. Frank Morris Pontiac-Buick-GMC, Inc., 366 So.2d 251, 257 (Ala.1978) (Torbert, C.J., concurring specially); see, also, Hinson v. Byrd, 259 Ala. 459, 66 So.2d 736 (1953) (where three people participating in transaction had full knowledge of the facts and of their existing legal rights, but were operating under a misconception of the legal meaning and effect of an instrument they had executed, the mistake was one of law). The rule by which the law denies one a recovery for a voluntary payment is subject to an exception where the payment has been procured by a fraud. Mt. Airy Ins. Co., 668 So.2d at 537. However, in their complaint the Stones did not allege a misrepresentation by Mellon, and in their brief on appeal they make no argument that would support a finding of fraud on the part of Mellon. We are unwilling to characterize Mellon's conduct as fraud and thereby save the Stones from the effect of their voluntary payment made under a possible mistake of law. Because the Stones did not object to the fax fee once their loan transaction had closed and their alleged duress had been lifted, and because they have shown no mistake of fact, the voluntary-payment doctrine defeats their claims based on theories of unjust enrichment and money had and received.