Young v. Young

Washington Supreme Court
191 P.3d 1258 (2008)

ELI5:

Rule of Law:

When calculating an unjust enrichment award for improvements to real property requested by the owner, a faultless claimant is entitled to recover the value of the benefit conferred, measured by either the market cost to obtain the services or the increase in property value. The award may not be reduced to the claimant's actual costs or by deducting standard business expenses like overhead and profit.

Facts:

Judith Young expressed a desire to move her otter sanctuary from Georgia to Washington.
In 1998, her nephew, Jim Young, a contractor, and his wife, Shannon Young, found a suitable but dilapidated property in Thurston County.
Judith purchased the property and included Jim's name on the title, believing it would help him obtain permits for improvements.
Based on their conversations, Jim and Shannon reasonably believed Judith would pay them for the extensive work needed to make the property habitable and suitable for the otters.
With Judith's knowledge, Jim and Shannon moved onto the property, lived there rent-free, and performed major improvements, including remodeling the house, repairing outbuildings, and clearing the land.
By 2001, the parties' plans shifted toward developing a cattle ranch under a new oral agreement, but their understandings of this agreement differed significantly.
The relationship between Judith and her nephew's family deteriorated, and by the fall of 2002, all communication had ceased.
The improvements made by Jim and Shannon substantially increased the value of Judith's property.

Procedural Posture:

Judith Young filed an action in Thurston County trial court to quiet title in her name against Jim and Shannon Young.
Jim and Shannon Young counterclaimed for unjust enrichment to recover the value of the improvements they made to the property.
The trial court quieted title in Judith's name but found she had been unjustly enriched. It awarded Jim and Shannon $501,866, which was calculated by taking the market value of the improvements ($760,382) and deducting amounts for 'general contractor's costs' like overhead and profit.
Jim and Shannon Young, as appellants, appealed the amount of the award to the Washington Court of Appeals, Division Two.
The Court of Appeals reversed the trial court's award, holding that the measure of recovery was incorrect, and remanded for a new award based on the full market value of the improvements.
Judith Young, as petitioner, was granted review by the Supreme Court of Washington.

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does the proper measure of recovery for an unjust enrichment claim based on improvements to real property, brought by a faultless claimant, permit a court to reduce the award from the market value of the services to account for the claimant's lack of certain business costs like overhead, profit, and taxes?

Opinions:

Majority - Sanders, J.

No. In an unjust enrichment action for improvements to property by a faultless claimant, the measure of recovery is the value of the benefit conferred upon the owner, not the claimant's actual costs. The trial court erred by reducing the award by deducting standard business costs such as overhead, profit, and taxes, because these components are integral to the market value of the services the property owner received. The court's focus must be on the value of what the defendant received, measured by either the cost to obtain equivalent services from a person in the claimant's position or the enhancement of the property's value. Because Judith requested the improvements, she must disgorge the entire value of the benefit she received, which includes the market value of services like debris disposal, supervision, and the provision of tools, all of which were part of the improvements.

Dissenting - Owens, J.

Yes. A trial court sitting in equity has broad discretion to fashion a remedy that is just under the specific circumstances, and it was proper for the court to reduce the award. The measure of recovery is what it would cost to obtain the services from 'a person in the claimant's position.' Jim and Shannon were not in the position of professional general contractors; they were informal workers who were not licensed or bonded as general contractors, paid no business taxes, and lived on the property rent-free. The value of the benefit to Judith was lower because she bore increased risks associated with using informal, uninsured labor. The majority's holding improperly strips trial courts of the flexibility needed to achieve substantial justice in cases involving informal construction arrangements.

Analysis:

This decision significantly clarifies the measure of restitution in unjust enrichment claims involving property improvements. By rejecting a cost-based recovery for a faultless claimant, the court reinforces the principle that the focus of unjust enrichment is the disgorgement of the benefit from the recipient, not the compensation for the provider's expenses. This holding limits the discretion of trial courts to reduce damage awards based on the informal nature of the relationship between the parties, thereby providing greater protection for those who perform work based on informal agreements or understandings. The court also took the opportunity to standardize legal terminology by distinguishing 'unjust enrichment' (a claim based on an implied-in-law contract) from 'quantum meruit' (a remedy for an implied-in-fact contract), which may guide how future cases are litigated.

Gunnerbot

AI-powered case assistant

Loaded: Young v. Young (2008)

Try: "What was the holding?" or "Explain the dissent"