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Rezac Livestock Commission Co., Inc. v. Pinnacle Bank

United States District Court, D. Kansas

January 9, 2020

REZAC LIVESTOCK COMMISSION CO., INC., Plaintiff,
v.
PINNACLE BANK, et al., Defendants.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge.

         Plaintiff Rezac Livestock Commission Co., Inc. has asserted conversion, unjust enrichment, quantum meruit, and civil conspiracy claims against defendants Dinsdale Bros., Inc., (“Dinsdale”) and Pinnacle Bank (“Pinnacle”). Plaintiff has requested a trial by jury “on all issues.” Doc. 52; see also Doc. 101 at 16. The parties' proposed jury instructions framed a dispute whether plaintiff's unjust enrichment and quantum meruit claims are jury triable issues. At the final pretrial conference on December 19, 2019, the court invited the parties to submit briefs about whether plaintiff has a federal right to a jury trial on its unjust enrichment and quantum meruit claims that arise under Kansas law. See Fed. R. Civ. P. 39(a)(2) (explaining that a trial must be by a jury on all issues demanded unless “the court, on motion or on its own, finds that on some or all of those issues there is no federal right to a jury trial”). The court considered the parties' arguments carefully (Docs. 211, 212, 213) and orally ruled during trial on January 8, 2020 that the unjust enrichment claims would be tried to the court. This Order memorializes the court's oral ruling. For the reasons explained below, the court concludes that plaintiff has waived its quantum meruit claim and that plaintiff's unjust enrichment claims are not triable to the jury.

         I. Plaintiff's Quantum Meruit Claim Was Waived

         Plaintiff's quantum meruit claim against Dinsdale was not included anywhere in the Pretrial Order. See Doc. 101. But, after the court entered the Pretrial Order, Dinsdale moved for summary judgment against this claim. See Doc. 103 at 26-27. And, both an unjust enrichment and a quantum meruit instruction are included in plaintiff's proposed jury instructions. See Doc. 183 at 21, 23. As explained below, the court concludes a separate quantum meruit claim does not remain for trial. Only the unjust enrichment claims remain.

         The court denied summary judgment against the quantum meruit claim, considering the summary judgment arguments on quantum meruit and unjust enrichment together. See Doc. 125 at 54-57. And, the elements of quantum meruit and unjust enrichment under Kansas law are often recited as one and the same. See, e.g., The Superlative Group, Inc. v. WIHO, L.L.C., No. 12-1468-JWL, 2014 WL 1385533, at *4 (D. Kan. Apr. 9, 2014) (“The elements of a claim for quantum meruit or unjust enrichment under Kansas law are as follows: (1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge of the benefit by the defendant; and (3) the acceptance or retention by the defendant of the benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without payment of its value.” (internal quotations and citations omitted)); Haz-Mat Response, Inc. v. Certified Waste Servs. Ltd., 910 P.2d 839, 842, 846-48 (Kan. 1996) (addressing the “theory of quantum meruit/unjust enrichment” as one claim and reciting the three elements for such a claim); Credit Mgmt. Servs., Inc. v. Tahirkheli, No. 119, 671, 444 P.3d 1018, 2019 WL 3367839, at *2 (Kan.Ct.App. July 26, 2019) (“[Plaintiff's] claim was one for quantum meruit, also known as a claim of unjust enrichment or as a quasi-contract claim. To recover, the plaintiff must show that (1) the plaintiff conferred a benefit on the defendant; (2) the defendant appreciated and knew about the benefit conferred; and (3) the defendant accepted and retained the benefit under circumstances that make retention unjust. When the plaintiff makes those showings, the plaintiff has a right to recover the reasonable value of the services or benefits provided.”); Diagnostic Imaging Ctr., P.A. v. Waddell, No. 102, 430, 231 P.3d 587, 2010 WL 2217588, at *7-8 (Kan.Ct.App. May 21, 2010) (“Quantum meruit, otherwise known as unjust enrichment, lies in a promise implied in law that one will restore to the person entitled thereto that which in equity and good conscience belongs to him. A quasi-contract based on unjust enrichment is created on the basis of justice and equity, regardless of the assent of the parties, and is a legal device used to enforce noncontractual duties.” (internal quotations and citation omitted)).

         The court previously determined-when denying Dinsdale's motion to dismiss-that it would treat unjust enrichment and quantum meruit as separate causes of action despite “Kansas courts' tendency to use the terms ‘unjust enrichment' and ‘quantum meruit' interchangeably.” Doc. 55 at 33. The court explained that:

Commentators and courts from other states have opined for decades that “the two doctrines”-quantum meruit and unjust enrichment-“are not interchangeable.” 66 Am. Jur. 2d Restitution § 33 (footnote omitted). “[U]njust enrichment applies only in the absence of any quasi-contractual relationship; quantum meruit requires proof that services were rendered under circumstances consistent with contract relations.” Id.

Id. Then, on summary judgment, the court concluded plaintiff's breach of contract claim asserted against Dinsdale failed as a matter of law because Mr. Leonard was not acting as Dinsdale's agent. Doc. 125 at 47. Now, the remaining claims asserted by plaintiff appear based on the same equitable elements, without a theory of any quasi-contractual relationship between plaintiff and Dinsdale. Compare Doc. 183 at 21, 23 (plaintiff's proposed jury instruction on quantum meruit with substantially similar elements as its unjust enrichment instruction) with PIK Civ. 4th § 124.17 (pattern instruction on measure of damages for quantum meruit explaining quantum meruit involves a party “furnish[ing] goods . . . for another” with a “reasonable expectation of being compensated”). Plaintiff's claims appear based on “an inequity in allowing [Dinsdale] to retain a benefit, ” but not on plaintiff rendering services to Dinsdale “under circumstances consistent with contract relations.” 66 Am. Jur. 2d Restitution § 33. Indeed, it does not appear disputed that plaintiff expected payment from Mr. Leonard consistent with its contractual relations with Mr. Leonard. No. evidence suggests plaintiff expected to be compensated by Dinsdale. And plaintiff's conversion claim is based on its assertion that Dinsdale was not a good faith purchaser from Mr. Leonard.

         Any quantum meruit claim here is intertwined with the unjust enrichment claim against Dinsdale. See Doc. 125 at 54-57 (summary judgment Order considering Dinsdale's arguments for summary judgment against plaintiff's unjust enrichment and quantum meruit claims together); id. at 35 (“Unjust enrichment serves as something of an equitable gap filler. It is an equitable theory designed to confer authority to rectify circumstances that make the retention [by the defendant of a benefit] unjust. In the contract setting, for example, the theory allows the court to impose a contract on a quantum meruit basis where, the court has concluded, no legally enforceable contract exists.” (internal quotations and citations omitted)); see also Doc. 103 at 27-28 (Dinsdale's motion for summary judgment referring to plaintiff's “unjust enrichment/quantum meruit claims”); Doc. 117 at 22-24 (plaintiff's response brief asserting arguments against summary judgment on the unjust enrichment and quantum meruit claims together).

         “The decision to exclude facts or issues as not found in the pretrial order is committed to the trial court's sound discretion.” Lewis v. Glickman, No. 98-4154-SAC, 2000 WL 1863407, at *1 (D. Kan. Nov. 1, 2000). “[A] pretrial order defines the scope of an action for trial . . . .” Koch v. Koch Indus., Inc., 203 F.3d 1202, 1220 (10th Cir. 2000); see also Sunderman v. Westar Energy, Inc., 520 F.Supp.2d 1269, 1278 (D. Kan. 2007) (“The pretrial order is the controlling document for trial. . . . Claims not included in the pretrial order are waived.”). Fed.R.Civ.P. 16(d) provides that the Pretrial Order “controls the course of the action unless the court modifies it.” And, under Fed.R.Civ.P. 16(e), the “court may modify the order issued after a final pretrial conference only to prevent manifest injustice.” But, while the Pretrial Order should be adhered to, it also “‘should be liberally construed to cover any of the legal or factual theories that might be embraced by [its] language.”' Koch, 203 F.3d at 1220-21 (quoting Trujillo v. Uniroyal Corp., 608 F.2d 815, 818 (10th Cir. 1979); see also In re Cessna 208 Series Aircraft Prod. Liab. Litig., No. 05-md-1721-KHV, 2009 WL 1247096, at *3 (D. Kan. May 5, 2009).

         Even construing the Pretrial Order liberally, no separate quantum meruit claim against Dinsdale remains. And, the court finds no injustice will occur by excluding the quantum meruit claim from trial. Plaintiff's unjust enrichment claim-which asserts the same theory for recovery-remains. On these circumstances, the court concludes that the plaintiff waived the separately pleaded quantum meruit claim when it did not include it in the Pretrial Order. The court thus excludes the quantum meruit claim from the trial.

         II. Right to Trial by Jury on Unjust Enrichment Claims

         The Supreme Court has made clear that in diversity actions “the right to a jury trial in the federal courts is to be determined as a matter of federal law . . . .” Simler v. Conner, 372 U.S. 221, 222 (1963) (emphasis added); see also Elm Ridge Expl. Co., LLC v. Engle, 721 F.3d 1199, 1221 (10th Cir. 2013). While “the substantive dimension of the claim asserted [in a diversity case] finds its source in state law, . . . the characterization of that state-created claim as legal or equitable for purposes of [deciding] whether a right to jury trial is indicated must be made by recourse to federal law.” Simler, 372 U.S. at 222 (internal citations omitted).

         The Seventh Amendment preserves the right to a jury in “[s]uits at common law, where the value in controversy shall exceed twenty dollars.” U.S. Const. amend. VII. Thus, a constitutional right to a trial by jury attaches to an action involving “‘rights and remedies of the sort traditionally enforced in an action at law, rather than an action in equity . . . .'” Fischer Imaging Corp. v. Gen. Elec. Co., 187 F.3d 1165, 1168 (10th Cir. 1999) (quoting Pernell v. Southall Realty, 416 U.S. 363, 375 (1974)). It is “[t]he nature of the issues presented and the remedies sought [that] determines whether an action qualifies as ‘legal'” or equitable. J.R. Simplot v. Chevron Pipeline Co., 563 F.3d 1102, 1115 (10th ...


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