Opinion
No. 2014AP370.
2014-07-29
John Anthony MOLLICA, Plaintiff–Respondent, v. 4th BASE LLC and Peter Papara, Defendants–Appellants.
Appeal from a judgment of the circuit court for Oneida County: Michael H. Bloom, Judge. Affirmed.
¶ 1 STARK, J.
This appeal is decided by one judge pursuant to Wis. Stat. § 752.31(2). All references to the Wisconsin Statutes are to the 2011–12 version unless otherwise noted.
4th Base LLC and Peter Papara appeal a small claims judgment entered in favor of John Mollica. Mollica, as a buyer, paid $5,000 in earnest money pursuant to a real estate sales contract. 4th Base, which is owned by Papara, was subsequently substituted as the buyer in the sales contract. Mollica brought a small claims action against 4th Base and Papara, seeking to be reimbursed for his earnest money payment. The circuit court granted judgment in favor of Mollica. We affirm.
DISCUSSION
¶ 11 On appeal, 4th Base and Papara argue they properly disbursed the $5,000 earnest money to Northwoods when the real estate transaction failed to close. They emphasize that when 4th Base took over as buyer, “Mollica did not reserve any ownership of, or right to, the $5,000.00 earnest money, in the September 27, 2012 Amendment To Offer To Purchase.” 4th Base and Papara also contend there is nothing in the sales contract that would have required 4th Base to pay “Mollica the $5,000.00 earnest money that was disbursed to the seller.” Finally, they argue there was no agreement between them and Mollica regarding the earnest money.
¶ 12 4th Base and Papara's appellate arguments miss the mark. First, whether 4th Base properly disbursed the earnest money to Northwoods when it failed to close on the real estate transaction is not at issue in this case. Instead, this case is about whether 4th Base and Papara were required to reimburse Mollica for the earnest money payment that Mollica made when Mollica was a party to the real estate transaction. Although not explicitly stated by the circuit court, it is clear that the circuit court granted judgment in favor of Mollica under a theory of unjust enrichment.
However, regarding the disbursement of the earnest money, we observe the sales contract provides in relevant part:
If this Offer does not close, the earnest money shall be disbursed according to a written disbursement agreement signed by all Parties to this Offer. If said disbursement agreement has not been delivered to broker within 60 days after the date set for closing, broker may disburse the earnest money: (1) as directed by an attorney who has reviewed the transaction and does not represent Buyer or Seller; (2) into a court hearing a lawsuit involving the earnest money and all Parties to this Offer; (3) as directed by court order; or (4) any other disbursement required or allowed by law.
(Emphasis added.) We also observe the transaction was supposed to close in October 2012 and 4th Base disbursed the money to Northwoods in February 2013.
¶ 13 “Unjust enrichment is an equitable doctrine, and the trial court's decision to grant or deny a remedy is reviewed for [an] erroneous exercise of discretion.” Ludyjan v. Continental Cas. Co., 2008 WI App 41, ¶ 6, 308 Wis.2d 398, 747 N.W.2d 745 (emphasis added). We will sustain a discretionary determination if the circuit court “examined the relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach.” Loy v. Bunderson, 107 Wis.2d 400, 414–15, 320 N.W.2d 175 (1982).
¶ 14 An unjust enrichment claim requires proof of three elements: (1) a benefit that has been conferred upon the defendant by the plaintiff; (2) appreciation by the defendant of the benefit; and (3) acceptance and retention by the defendant of the benefit, under circumstances such that it would be inequitable to retain the benefit without payment. Ludyjan, 308 Wis.2d 398, ¶ 7, 747 N.W.2d 745. Although the doctrine “does not apply where the parties have entered into a contract,” Continental Casualty Co. v. Wisconsin Patients Compensation Fund, 164 Wis.2d 110, 118, 473 N.W.2d 584 (Ct.App.1991), 4th Base and Papara repeatedly assert there was no agreement between them and Mollica regarding the earnest money payment.
¶ 15 In this case, the circuit court found that Mollica originally paid the $5,000 earnest money, and, when 4th Base was substituted as buyer, Mollica requested on more than one occasion to be reimbursed by Papara for the earnest money payment. Papara never reimbursed Mollica for the payment. The circuit court also found that, when 4th Base was substituted as buyer, Mollica and Papara no longer had a business relationship and Mollica was completely “out of the transaction.” Accordingly, the circuit court concluded “the defendants were responsible for repaying Mollica for the $5,000.00 earnest money payment he had made.”
¶ 16 Applying these findings to the elements of unjust enrichment, it is clear that: (1) Mollica's $5,000 earnest money payment conferred a benefit upon 4th Base and Papara; (2) 4th Base and Papara appreciated the $5,000 earnest money payment because they did not have to independently make the payment required by the sales contract with Northwoods; and (3) 4th Base and Papara accepted and retained this benefit by refusing to reimburse Mollica for the earnest money payment, and it would be inequitable for 4th Base and Papara to retain this benefit because Mollica was completely “out of the transaction” and would have no claim to the property. We conclude the elements of unjust enrichment were satisfied and the circuit court properly exercised its discretion by entering judgment in favor of Mollica. Accordingly, we affirm the circuit court's small claims judgment.
Judgment affirmed.
This opinion will not be published. See Wis. Stat. RuleE 809.23(1)(b)4.