STATE OF MINNESOTA
IN COURT OF APPEALS
Betty J. Charles,
Harold F. Johnson,
Filed July 28, 1998
Ramsey County District Court
File No. C2-96-4318
Douglas W. Scheel, 910 Degree of Honor Bldg., 325 Cedar St., St. Paul, MN 55101 (for respondent)
Considered and decided by Lansing, Presiding Judge, Forsberg, Judge, and Norton, Judge.*
*Retired judges of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
Betty Charles appeals an award to Harold Johnson based on quasi-contract, of one-half of the value of an $80,000 treasury note. Because Charles was not unjustly enriched at the expense of Johnson, and because Johnson acted without expectation of reward, we reverse.
After a falling out in January 1995, Charles changed the ownership of the bank accounts to her own name, but Johnson refused to sign over ownership of the treasury note, resulting in this action to recover sole ownership of the treasury note. At trial, Johnson claimed an interest in the note based upon the services he had rendered to Charles. He valued his services at $29,160, a charge of $40 per hour for the time he and his wife spent caring for Charles, including their travel time. The trial court found there had been no gift or agreement for compensation, but awarded Johnson one-half of the treasury note on a quasi-contract theory.
The grant of equitable relief is within the sound discretion of the court; only a clear abuse of discretion will lead to reversal. Nadeau v. County of Ramsey, 277 N.W.2d 520, 524 (Minn. 1979).
Quasi-contracts are created by law for reasons of justice, specifically to avoid the unjust enrichment of one party at the expense of another. McArdle v. Williams, 193 Minn. 433, 438, 258 N.W. 818, 820 (1935).
The essential elements of quasi-contract are [(1)] a benefit conferred by one party to another, [(2)] appreciation of [the] benefit by the recipient, and [(3)] acceptance and retention * * * [of the] benefit by the recipient under such circumstances that it would be inequitable * * * to retain [the benefit absent payment].
Acton Constr. Co. v. State, 383 N.W.2d 416, 417-18 (Minn. App. 1986) (citation omitted).
Where the claimant has acted from charitable motives without expectation of reward, quasi-contract will not be imposed. Stemmer v. Estate of Sarazin, 362 N.W.2d 406, 408 (Minn. App. 1985). A claim is more likely to be allowed where the recipient of the benefit has acknowledged the indebtedness or expressed the intention of paying for the service. Id.; In re Cooke's Estate, 210 Minn. 397, 399, 298 N.W. 571, 572 (1941).
The trial court held that Charles had not made a gift to Johnson and had no agreement with him regarding compensation. Johnson made no claim for compensation until it became clear he would not inherit Charles' property. The type and manner of services that Johnson performed are not inconsistent with those generally performed for close relatives. See In re Estate of Beecham, 378 N.W.2d 800, 802 (Minn. 1985) (rebuttable presumption that services to family member are gratuitous). Charles continued to live independently the six and one-half days per week, leading to the conclusion that the services Johnson rendered were not extraordinary and that Charles was not unjustly enriched by their receipt. See Marking v. Marking, 366 N.W.2d 386, 387 (Minn. App. 1985) (no recovery in quasi-contract if no unjust enrichment at expense of another); cf. Beecham, 378 N.W.2d at 802 (claimant awarded portion of mother-in-law's estate after providing daily care for elderly, chronically ill woman for six and one-half years without assistance from other family members).
Neither party had an apparent expectation that Johnson would be compensated for his services; the services rendered are not so extraordinary that failure to compensate Johnson would result in injustice. Johnson has failed to establish a prima facie case for imposition of a quasi-contract.