Evergreen West Business Center, LLC v. Emmert

When expenses are incurred in good faith, without being part of a calculated breach, those expenses should not be reimbursed as damages.

At trial, Evergreen West Business Center, LLC, (Evergreen) sought two alternative remedies for a breach of fiduciary duty: either a damage verdict or a constructive trust. The jury returned a damage verdict of $1 and punitive damages of $600,000 which was then reduced by the trial court. Evergreen appealed, and the Court of Appeals held that because a legal remedy was available, the equitable remedy of constructive trust was not available. The Court further held the trial court erred in reducing punitive damages. Evergreen and Emmert both sought review by the Oregon Supreme Court, which reversed the first decision, holding that a constructive trust was available. This left two issues on remand. First was whether Emmert was entitled to a greater reimbursement than the trial court originally allowed. The Court held that where Emmert incurred maintenance costs as part of a bad-faith calculated breach, he was not entitled to greater reimbursement. Second was whether the trial court erred in concluding that punitive damage claims were unavailable for a constructive trust. The Court held Evergreen may elect either legal or equitable remedy, but not both. Affirmed on appeal and on cross-appeal.