Court Opinion

ID: 5155106
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:14:26.814231+00
Date Added: 2024-06-11T08:25:16.594185
License: Public Domain

Justice EID,
dissenting.
The majority's opinion permits Cassandra to recover the full value of the home owned by the Lewises under a claim of unjust enrichment. In order to reach this result, the majority devises a theory of recovery that enforces the "mutual purpose of the parties." Maj. op. at 1186. The major flaw with the majority's theory is that it bears no resemblance to the unjust enrichment cause of action. I could not find a single reported case in this jurisdiction (or any other, for that matter) that recognized a "mutual purpose of the parties" theory of unjust envrichment. That is because unjust enrichment is not focused on the intent of the parties, as the majority seems to believe, but rather on the benefit conferred, if any, by the plaintiff that is unjustly retained by the defendant. The consequence of the majority's interpretation is that it awards full benefit of the bargain damages-that is, the value of the home-to Cassandra, even though no bargain ever existed. Because I believe the majority's opinion reflects a fundamental misunderstanding of the law of unjust enrichment, I respectfully dissent.
In order to prevail on a claim for unjust enrichment, the plaintiff must show that she conferred a benefit on the defendant "under cireumstances that would make it unjust for defendant to retain the benefit without paying." DCB Constr. Co. v. Cent. City Dev. Co., 965 P.2d 115, 119-20 (Colo.1998) (emphasis added). Thus, the centerpiece of an unjust enrichment claim is the benefit that has been unjustly retained. Colo. Dep't of Transp. v. Brown Group Retail, Inc., 182 P.3d 687, 691 (Colo.2008) (noting that "Iwlhether a party has been unjustly (or unjustifiably) enriched ... becomes an issue only if it has been enriched by receiving a benefit at the expense of another"). Here, the majority makes virtually no attempt to determine whether Cassandra has conferred a benefit on the Lewises, and if so, what that benefit might be; nor does it attempt to quantify that benefit in order to determine what the Lewises may have unjustly "retain{ed] without paying." In other words, it makes no attempt to apply the elements of unjust enrichment as they have been traditionally understood in this and other jurisdictions.
Instead, the majority forges a new cause of action for "a failed gift or failed contract between close family members or confidants." Maj. op. at 1142. According to the majority, this new cause of action, as applied to Cassandra, is based on the facts that (1) the parties had an agreement (Le., a "mutual purpose") to convey the benefits of home ownership to Cassandra and Sammy, (2) the Lewises breached (ie., "deviated significantly from") that agreement, and (8) Cassandra suffered damages as a result of the breach. See id. at 1144. But these are the elements of a claim for breach of contract, not unjust enrichment. See W. Distrib. Co. v. Diodosto, 841 P.2d 1053, 1058 (Colo.1992) (stating elements of breach of contract). The consequence of the majority's flawed analysis is that Cassandra is awarded contract damages where no contract existed.
The trial court calculated damages by subtracting the remaining mortgage and the Lewises' $5,000 down payment from the sale price of the home. Maj. op. at 1139. In other words, the court placed Cassandra in the position she would have been in had there been a contract to transfer ownership of the home to her, including awarding her full expectation damages such as the increase in value of the home due to market conditions. See Giampapa v. Am. Family Mut. Ins. Co., 64 P.3d 230, 251 (Colo.2008) (defining contract damages in terms of expectation damages). But because she does not have such a contract claim, the trial court erred by awarding contract damages, and the majority errs by applying contract principles, under *1146the guise of unjust enrichment, to uphold the trial court's award.
The majority comes up with its "mutual purpose of the parties" cause of action by "[blorrowing from diverse jurisprudence," including trust and family law. Maj. op. at 1148. Yet it ignores precedent precisely on point in the field of unjust enrichment. For example, in Salzman v. Bachrach, 996 P.2d 1263 (Colo.2000), we examined an unjust enrichment claim strikingly similar to Cassandra's. In that case, plaintiff and defendant "agreed to build a home together" to serve as their residence. Id. at 1264. Plaintiff designed the home and paid almost $170,000 of the construction costs. Id. at 1265. Soon after they moved into the home, plaintiff quitelaimed his interest in the home to defendant, ostensibly so that she could obtain a favorable mortgage on the home and for the tax advantages. Id. After a little more than a year of living together in the home, defendant changed the locks and essentially evicted plaintiff. Id. Plaintiff brought an unjust enrichment claim against defendant.
In analyzing plaintiff's claim, we did not seek, as the majority does today, to discern a "mutual agreement of the parties," even though there was evidence that they had some sort of an agreement with regard to how the expenses would be shared. See id. Instead, we focused on whether plaintiff had conferred a benefit on defendant that was unjustly retained. We concluded that he had. Specifically, we found that he paid "nearly $170,000" toward construction costs of the home and expended considerable effort in "designing the home and managing the project." Id. at 1266. On remand, we instructed the trial court to "determine the exact worth of [plaintiff's] contribution [to building the home] to date, and the reasonable rental value for the periods [defendant] lived in the house." Id. at 1269-70.1 In other words, we found that the proper measure of damages would be the net benefit unjustly retained by the defendant-that is, the "exact worth of [plaintiff's] contribution" to the home, less the "reasonable rental value" he would have paid to live there.
Applying Salzman's analysis (that is, the elements of unjust enrichment) to the facts of this case, the trial court should have determined what net benefit, if any, Cassandra conferred on the Lewises. For example, over the fourteen years of living in the home, Cassandra and Sammy paid $236 per month to the Lewises to cover the mortgage payment; paid the real estate taxes; paid the costs of maintaining the home, including homeowner's insurance; and paid for various improvements to the home. Maj. op. at 1187. These are costs that Cassandra and Sammy paid that benefited the Lewises. On the other hand, Cassandra and Sammy received a place to live for fourteen years at far below market cost. See Lewis v. Lewis, No. 05CA1463, slip op. at 8, 2006 WL 3441766 (Colo.App. Nov.30, 2006) (not selected for official publication). As in Salzman, I would instruct the trial court to calculate the net benefit that Cassandra conferred on the Lewises, if any-that is, the benefit she conferred on the Lewises minus the rent she would have paid at market value.2 This calculation will necessarily require the trial court to determine what portion of the benefit should be attributed to Cassandra, as opposed to Sammy.3
*1147Plainly, the effect of today's decision is to untether unjust enrichment from its central focus on the benefit conferred by the plaintiff on the defendant. The majority attempts to gloss over this fundamental shift in unjust enrichment law by stating that "the Lewises intended to give Cassandra and Sammy the benefits of home ownership, not reap those benefits for themselves," the implication being that one of those benefits is the ability to sell a home for profit. Maj. op. at 1144. However, it is irrelevant whether the Lew-ises intended to convey the benefits of home ownership, or any other benefits, to Cassandra. This is because, as discussed above, the centerpiece of unjust enrichment is the value of the benefit conferred by Cassandra on the Lewises, not the other way around. Consequently, the majority's consideration of the . benefit intended to be conferred by the Lew-ises on Cassandra turns this fundamental rule on its head.4
In sum, the majority's analysis contravenes fundamental principles of the law of unjust enrichment. I therefore respectfully dissent from its opinion.
I am authorized to state that Justice RICE: and Justice COATS join this dissent.

. We cautioned that plaintiff might not be entitled to recover the full value of his contributions to the home "given that the appraised value of the home just prior to completion was considerably less than its cost." Salzman, 996 P.2d at 1266 n. 4; see also Wimp v. Brasher, LLC, No. 05CA0956, 2006 WL 3028117 (Colo.App. Oct.26, 2006), cert. granted, No. O7SC124, 2007 WL 1898612 (Colo. Jul.2, 2007), cert. dismissed as improvidently granted (Colo. Mar. 7, 2008) (raising the issue of the appropriate measure of damages in an unjust enrichment claim when the benefit conferred through improvements to a home is greater than the value of the home). While we left it to the trial court to quantify the benefit conferred, there is no question that we instructed the trial court to focus on the benefit conferred.

. As even the majority recognizes, we must review de novo "whether the trial court correctly understood the appropriate test for unjust enrichment." Maj. op. at 1141. I would find that the trial court did not apply the appropriate test in this case.

. The majority does not account for the fact that Cassandra and Sammy paid costs jointly. Even under its own analysis, and assuming arguendo *1147that the Lewises did indeed intend "to give Cassandra and Sammy the benefits of home ownership," maj. op. at 1141, it follows that Cassandra must share any recovery with Sammy, the other beneficiary of the parties' "mutual purpose." In other words, even under the majority's analysis, Cassandra would not be entitled to recover the full sale price of the home.

. As our recent decision in Brown Group makes clear, in unjust enrichment, "[wJhether a party has been unjustly (or unjustifiably) enriched ... becomes an issue only if it has been enriched by receiving a benefit at the expense of another." 182 P.3d at 691. Following Brown Group, I would find it unnecessary to reach the question that forms the bulk of the majority's opinion-that is, whether the plaintiff must always show malfeasance on the part of the defendant, as required in DCB Constr. Co. v. Cent. City Dev. Co., 965 P.2d 115, 117 (Colo.1998), in order to meet the requirement that retention of a benefit be unjust. See maj. op. at 1142.