GA. TILE DISTRIBUTORS v. ZUMPANO ENTERPRISES

Factual and Procedural Background

This case arose from a transaction in which appellee Zumpano Enterprises delivered ceramic tile to appellant Georgia Tile Distributors, Inc. Appellant accepted the tile but refused to pay for it. Appellee brought an action against appellant on two counts: breach of contract and unjust enrichment. After a bench trial, the trial court ruled for appellant on the contract claim but did not address the unjust enrichment claim. On appeal, this court vacated the judgment due to insufficient findings and failure to address the unjust enrichment claim. On remand, the trial court again ruled for appellant on the contract claim but ruled for appellee on the unjust enrichment claim, awarding appellee $9,151.54 plus interest from the date of the original ruling. Appellant contested both the unjust enrichment recovery and the interest award.

Factual details include that appellant and appellee are competitors in ceramic tile distribution. Appellant previously ordered tile directly from Windsor Ceramic Tile, but after appellee became Windsor’s master distributor for the region, appellant's order was routed through appellee. The trial court found no contract existed between appellant and appellee regarding this transaction. Windsor shipped the tile to appellee, who paid Windsor and then billed appellant. Appellant knew of appellee's master distributorship but was unaware it would be billed by appellee instead of Windsor until receiving the bill. By trial, all the tile had been sold by appellant.

Legal Issues Presented

Whether appellee was entitled to recover under an unjust enrichment theory despite the absence of a contractual agreement.

Whether the trial court erred in awarding interest on the unjust enrichment judgment from a date prior to the judgment establishing the amount of the award.

Arguments of the Parties

Appellant's Arguments

The trial court erred in allowing unjust enrichment recovery because appellee must have known it would not be compensated when delivering the tile and paying Windsor, rebutting any implied promise to pay.

Alternatively, appellee acted in bad faith by delivering tile and billing appellant without a contract, making unjust enrichment recovery inappropriate.

Unjust enrichment requires that benefits be "knowingly" accepted; appellant accepted and benefited from the tile without knowing appellee was the benefactor, so unjust enrichment does not apply.

The trial court erred in awarding interest from June 29, 1990, before the unjust enrichment judgment was entered on November 4, 1991, because the claim was for unliquidated damages and interest runs only after judgment.

Appellee's Arguments

The trial court correctly applied the theory of unjust enrichment, which does not require a contract, because appellant received and benefited from the tile without paying for it.

The cases cited by appellant regarding knowledge of benefit do not preclude recovery when the recipient knows a benefit is received but does not know the identity of the benefactor.

The trial court’s interest award should be viewed as an amendment nunc pro tunc to the original judgment, effectively making the judgments one and the same and justifying interest from the earlier date.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Zumpano Enterprises v. Ga. Tile Distrib., 200 Ga. App. 563 (408 S.E.2d 813) (1991)	Requirement for trial court to address all claims and provide sufficient findings of fact.	Vacated prior judgment for failure to address unjust enrichment claim and insufficient findings on contract claim.
Regional Pacesetters v. Halpern Enterprises, 165 Ga. App. 777, 782 (300 S.E.2d 180) (1983)	Unjust enrichment applies when no contract exists but a party has been conferred a benefit which equity requires to be compensated.	Supported the court’s conclusion that appellee could recover on unjust enrichment despite no contract.
OCGA § 9-2-7	Implied promise to pay reasonable value for services or property accepted and beneficial to recipient.	Reinforced the legal basis for unjust enrichment recovery in absence of contract.
Ginsberg v. Termotto, 175 Ga. App. 265 (333 S.E.2d 120) (1985)	Unjust enrichment requires benefits to be knowingly accepted.	Court distinguished the case, holding that knowledge of benefit, not identity of benefactor, is controlling.
Noble v. Hunt, 95 Ga. App. 804 (99 S.E.2d 345) (1957)	Unjust enrichment claims for value of goods are claims for unliquidated damages.	Supported the conclusion that interest cannot run before judgment on unliquidated claims.
Corr v. Aaron Rents, 136 Ga. App. 643 (222 S.E.2d 150) (1975)	Interest on unliquidated amounts begins only after agreement or judgment fixing the amount.	Supported reversal of pre-judgment interest award on unjust enrichment claim.
Allen v. Community Loan Invest. Corp., 78 Ga. App. 611 (51 S.E.2d 872) (1949)	Limits on power to amend judgments nunc pro tunc to correcting record errors, not to supply omitted judicial decisions.	Rejected appellee’s argument that the second judgment amended the first nunc pro tunc to justify interest from earlier date.
Carswell v. Shannon, 209 Ga. 596 (74 S.E.2d 850) (1953)	Amendment nunc pro tunc is not revisory and cannot correct judicial errors.	Supported court’s conclusion that interest could not run prior to the actual judgment on unjust enrichment.

Precedent

Rule or Principle Cited For

Application by the Court

Zumpano Enterprises v. Ga. Tile Distrib., 200 Ga. App. 563 (408 S.E.2d 813) (1991)

Requirement for trial court to address all claims and provide sufficient findings of fact.

Vacated prior judgment for failure to address unjust enrichment claim and insufficient findings on contract claim.

Regional Pacesetters v. Halpern Enterprises, 165 Ga. App. 777, 782 (300 S.E.2d 180) (1983)

Unjust enrichment applies when no contract exists but a party has been conferred a benefit which equity requires to be compensated.

Supported the court’s conclusion that appellee could recover on unjust enrichment despite no contract.

OCGA § 9-2-7

Implied promise to pay reasonable value for services or property accepted and beneficial to recipient.

Reinforced the legal basis for unjust enrichment recovery in absence of contract.

Ginsberg v. Termotto, 175 Ga. App. 265 (333 S.E.2d 120) (1985)

Unjust enrichment requires benefits to be knowingly accepted.

Court distinguished the case, holding that knowledge of benefit, not identity of benefactor, is controlling.

Noble v. Hunt, 95 Ga. App. 804 (99 S.E.2d 345) (1957)

Unjust enrichment claims for value of goods are claims for unliquidated damages.

Supported the conclusion that interest cannot run before judgment on unliquidated claims.

Corr v. Aaron Rents, 136 Ga. App. 643 (222 S.E.2d 150) (1975)

Interest on unliquidated amounts begins only after agreement or judgment fixing the amount.

Supported reversal of pre-judgment interest award on unjust enrichment claim.

Allen v. Community Loan Invest. Corp., 78 Ga. App. 611 (51 S.E.2d 872) (1949)

Limits on power to amend judgments nunc pro tunc to correcting record errors, not to supply omitted judicial decisions.

Rejected appellee’s argument that the second judgment amended the first nunc pro tunc to justify interest from earlier date.

Carswell v. Shannon, 209 Ga. 596 (74 S.E.2d 850) (1953)

Amendment nunc pro tunc is not revisory and cannot correct judicial errors.

Supported court’s conclusion that interest could not run prior to the actual judgment on unjust enrichment.

Court's Reasoning and Analysis

The court analyzed the relationship between appellant and appellee concerning the delivery and payment for ceramic tile. The trial court found no contract existed based on credibility determinations favoring appellant’s version of pre-delivery discussions. Despite this, the court held that unjust enrichment recovery does not require a contract, only that one party has conferred a benefit on another who should equitably compensate for it. The court rejected appellant’s argument that appellee’s knowledge or bad faith negated unjust enrichment, noting no findings supported those contentions and that the credibility ruling on contract issues did not preclude unjust enrichment recovery.

Regarding the interest award, the court recognized that the unjust enrichment claim involved unliquidated damages, for which interest cannot run before judgment or agreement fixing the amount. The court rejected appellee’s suggestion that the second judgment was an amendment nunc pro tunc to the original, explaining that such amendments cannot supply omitted judicial decisions or correct judicial errors. Therefore, awarding interest from the earlier date was erroneous.

Holding and Implications

Judgment affirmed in part and reversed in part.

The court affirmed the trial court’s ruling that appellee was entitled to recover under an unjust enrichment theory for the reasonable value of the tile delivered. However, the court reversed the portion of the judgment awarding interest to run from a date prior to the judgment on the unjust enrichment claim. The direct effect is that appellee recovers the value of the tile but interest on that award runs only from the date the unjust enrichment judgment was entered. No new precedent was established beyond application of existing principles to the facts of this case.

GEORGIA TILE DISTRIBUTORS, INC. v. ZUMPANO ENTERPRISES, INC.

COOPER, Judge.

This case, which now makes its second appearance before this court, arose from a transaction in which appellee delivered ceramic tile to appellant. When appellant accepted the tile but refused to pay for it, appellee brought an action against appellant in two counts: one based on contract and one based on unjust enrichment. After a bench trial, the court entered an order ruling for appellant on the contract claim without addressing the unjust enrichment claim. Appellee appealed, and this court vacated the judgment because it failed to address the unjust enrichment claim and contained insufficient findings of fact to support the ruling on the contract claim. See Zumpano Enterprises v. Ga. Tile Distrib., 200 Ga. App. 563 ( 408 S.E.2d 813) (1991). On remand, the trial court again ruled for appellant on the contract claim but ruled for appellee on the unjust enrichment claim, including in its order appropriate findings of fact and conclusions of law with respect to both claims. On the unjust enrichment claim, the trial court awarded appellee $9,151.54 as the reasonable value of the tile delivered, with interest on the judgment to run from June 29, 1990, the date of the trial court's original ruling. Appellant contends the trial court erred in ruling that appellee was entitled to an unjust enrichment recovery and in awarding interest running from a date prior to the trial court's judgment on the unjust enrichment count.

Appellant and appellee are competitors in the ceramic tile distribution business. Prior to late 1987 or early 1988, appellant was a distributor of tiles manufactured by Windsor Ceramic Tile ("Windsor") and ordered tile from Windsor directly. Around that time, however, appellee and Windsor entered into a master distributorship agreement giving appellee the exclusive right to fill orders for Windsor's tile in the region. In December 1987, appellant submitted an order for ceramic tile directly to Windsor, and in January 1988, Windsor passed the order along to appellee as its master distributor for the area. Appellee then called appellant to arrange for delivery of the tile. Whether this conversation between agents of appellant and appellee created a contract was disputed at trial, and the trial court concluded that it did not. Windsor shipped appellant's tile to appellee in mid-January 1988, in a truckload along with other tile that appellee had ordered, and billed appellee rather than appellant the $9,151.54 owed for the tile appellant ordered. Appellee paid this amount to Windsor and billed appellant $10,628.89. Even though appellant knew of appellee's master distributorship agreement with Windsor, appellant says it was not aware it would be billed by appellee rather than Windsor until it actually received the bill. By that time most of the delivered tile had been sold, and by the time of trial all had been sold.

1. Appellant contends that, because the trial court found appellant's version of the pre-delivery conversation between agents of the parties more persuasive than appellee's version and held that "[b]ased upon its review of the testimony, this Court resolves all credibility issues in favor of the [appellant] as to Count One," the trial court erred in concluding that appellee could recover under an unjust enrichment theory. In the absence of a contractual agreement, appellant argues, appellee (1) must have known it would not be compensated by appellant when the goods were delivered to appellant and appellee paid Windsor, so the general presumption of an implied promise to pay was rebutted and appellant was a mere volunteer not entitled to compensation; or (2) acted in bad faith in delivering the tile and billing appellant, thereby engaging in conduct incompatible with seeking an unjust enrichment recovery. An agreement is not needed for an unjust enrichment recovery, however. "The theory of unjust enrichment applies when as a matter of fact there is no legal contract ..., but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefited party equitably ought to return or compensate for. [Cits.]" Regional Pacesetters v. Halpern Enterprises, 165 Ga. App. 777, 782 (2) ( 300 S.E.2d 180) (1983). "Ordinarily, when one renders service or transfers property which is valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof." OCGA § 9-2-7. Here, the trial court found — and it is undisputed or amply supported in the record — that appellant received the shipment of ceramic tile, accepted it, and received benefit from it by selling it but has not paid for it. The trial court made no findings regarding appellee's knowledge or state of mind and could not have done so based on appellant's evidence at trial. Moreover, appellant's asserted conclusions regarding appellee's knowledge or state of mind do not logically flow from the findings that the trial court did make. Rather, we find that when the trial court resolved all credibility issues in favor of appellant "as to Count One," it simply resolved in favor of appellant the credibility disputes relevant to a determination of whether a contract agreement existed. The court concluded there could be no contract-based recovery. However, there is no inherent inconsistency in concluding that no contractual agreement was reached but one party has benefited at the expense of another who must in fairness be compensated. Accordingly, the trial court did not err in concluding that a recovery for appellee based on an unjust enrichment theory was appropriate.

Appellant also argues that benefits must be "knowingly" accepted before those benefits can provide the basis for unjust enrichment. See, e.g., Ginsberg v. Termotto, 175 Ga. App. 265 (1) ( 333 S.E.2d 120) (1985). Thus, appellant argues, unjust enrichment cannot apply here because appellant accepted the goods and benefited from them without knowing that appellee was the benefactor. The cases appellant cites for this proposition hold that there can be no unjust enrichment recovery where the party from whom recovery is sought does not know that any benefit is being conferred; however, they do not hold that there can be no such recovery if the recipient knows a benefit is being conferred but does not know who is conferring it. Here, appellant knew it had received the tile, accepted it, sold it, and has paid no one for it. Its reliance on this line of cases is therefore misplaced.

2. In its second enumeration of error, appellant challenges the trial court's decision that interest on the unjust enrichment award should run from June 29, 1990, the date of the trial court's first ruling in this case, rather than from November 4, 1991, the date on which the trial court ruled appellant had been unjustly enriched and established the reasonable value of the delivered goods. An action seeking an unjust enrichment recovery for the value of goods delivered is an action for unliquidated damages. See Noble v. Hunt, 95 Ga. App. 804 (6) ( 99 S.E.2d 345) (1957). Furthermore, "`[u]nliquidated amounts bear no interest until after agreement or judgment fixing the principal amount as liquidated.' [Cit.]" Corr v. Aaron Rents, 136 Ga. App. 643, 644 ( 222 S.E.2d 150) (1975). We therefore agree with appellant that the trial court erred in providing that interest would run on the unjust enrichment award before the judgment establishing the amount of that award.

Appellee suggests that, rather than awarding pre-judgment interest on an unliquidated claim, the trial court's second judgment was actually amending the original judgment nunc pro tunc, so that conceptually the two judgments are one and the same, effective as of the earlier date. Totally apart from the fact that the original judgment was previously vacated on appeal, however, this court has held that a court's power to amend nunc pro tunc is the power to correct inadvertent errors or omissions in the record to reflect the truth of what happened; it "does not include the power to supply judicial omissions so as to include what a court might or should have decided, but did not actually so decide." Allen v. Community Loan Invest. Corp., 78 Ga. App. 611, 612-613 ( 51 S.E.2d 872) (1949). "`The power to amend nunc pro tunc is not revisory in its nature, and is not intended to correct judicial errors.' ... [Cit.]" Carswell v. Shannon, 209 Ga. 596, 599 (2) ( 74 S.E.2d 850) (1953). Thus, we cannot avoid the conclusion that awarding interest on the unjust enrichment judgment prior to the date of that judgment was error.

Judgment affirmed in part and reversed in part. Sognier, C. J., and McMurray, P. J., concur.