Dcb Construction Co. v. Central City Development Co.

965 P.2d 115 (1998)

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Nature of the Case

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Facts

D entered into a five-year lease with Santa Barbara Capital, Inc. (Tenant). The lease permitted Tenant to use the premises only for limited-stakes gambling. D had the right to approve all plans and specifications for remodeling. Tenant originally hired a contractor in January of 1992, but by June of that year Tenant terminated the first contractor and entered into a contract with P. This contract called for significant work on the interior of the building, and D approved the plans. The lease provided that Tenant would pay all costs associated with remodeling regardless of the amount, and would indemnify D against any liens or claims arising out of the work. The Tenant was to post a notice on the premises informing architects, draftsmen, planners, contractors or subcontractors, and suppliers of labor or material and equipment that the property would not be subject to a lien for the improvements. The Tenant did post the notice, which stated in pertinent part: D shall not be liable for any erection, construction, alteration, removal, addition, repair, or other improvement, and the owner's interest in the above-described property shall not be subject to a lien for any erection, construction, alteration, removal, addition, repair, or other improvement to [the leased premises]. Under its contract with Tenant, P completed significant improvements to the interior of the building. A representative of D was present on the premises regularly during the construction. D did not communicate with or direct P regarding the work. Tenant failed to pay. D submitted bills to Tenant totaling $371,245, of which amount Tenant paid $76,515. Tenant also defaulted under its lease agreement and stopped paying rent in December of 1992. Tenant paid a total of $427,500 to D during the term of the lease. D placed a 'For Rent' sign on the building, but, as of the date of the trial, had received no inquiries about purchasing or leasing the building. P filed claims against Tenant and D. P obtained a judgment against Tenant for $332,026.35, but Tenant was insolvent. The various claims of the subcontractors were dismissed after a settlement was reached. The court ruled in favor of P on its claim of unjust enrichment. The court entered judgment against D for a total of $333,191. D appealed. The court of appeals held that under the facts of this case, where there was no mistake, fraud, duress, or other improper conduct by D, any enrichment of D by P was not unjust. P took this appeal.