## Facts

- Interform Company (Interform) owned reusable forms used to mold concrete.
- Mitchell Construction Company (Mitchell) was preparing for two Idaho state construction jobs and negotiated with Interform in the summer of 1971 about obtaining Interform’s forms.
- The negotiations up to September 8, 1971 were treated by Interform as discussions about renting the forms.
- On September 8, 1971, Mitchell told Interform’s salesman that Mitchell wanted to purchase the forms; the salesman believed Mitchell was joking because the prior discussions had been about rental.
- Later that day Mitchell sent Interform a written “purchase order” requesting that Interform “furnish” forms.
- Mitchell then spoke by telephone with Interform’s president; they reached agreement on the quantity of forms and the price for Mitchell’s initial use.
- Interform shipped the forms and sent three bills of lading and three invoices; each document referred to the transaction as a “rental.”
- Mitchell received the shipping and billing documents and did not object to the “rental” wording.
- Mitchell paid Interform \$32,000. Mitchell claimed this was the purchase price; Interform treated it as rent for use on the first job only.
- Mitchell used the forms on the first job and then used them again on a second job without any additional express agreement or payment.
- Interform sued in federal district court seeking damages and recognition of Interform’s ownership of the forms; Mitchell counterclaimed (including a claim that it owned the forms and a claim for abuse of process).
- After a bench trial, the district court found the parties made a rental contract for the first job, found no contract covered the second job, awarded Interform restitution based on the fair rental value for the second job (with deductions), rejected Mitchell’s counterclaims, and denied Interform attorney’s fees.

## Issues

1. Whether the district court clearly erred in finding that the parties’ September 1971 agreement was a rental (not a sale) for the first job.
2. Whether Mitchell’s use of the forms on the second job, without a contract governing that use, supported recovery in restitution/unjust enrichment measured by fair rental value.
3. Whether Interform, as the prevailing party on claims tied to the first job and related bond/contract obligations under Idaho law, was entitled to an award of attorney’s fees.

## Decision

- Affirmed the district court’s finding that the September 1971 agreement was for rental of the forms for Mitchell’s first job and that Interform remained the owner.
- Affirmed the determination that no contract governed the second job and that Mitchell was liable in unjust enrichment for using the forms on the second job without paying for that benefit.
- Affirmed the restitution award (based on the forms’ fair rental value for the second job, less deductions) in the amount awarded by the district court.
- Reversed the denial of attorney’s fees and remanded for the district court to determine and award reasonable fees as required by Idaho law for the covered portion of Interform’s claims.

## Legal Principles

- Findings of intent and contract formation after a bench trial are reviewed for clear error; documentary evidence and the parties’ course of performance can support a finding that a transaction was a rental rather than a sale.
- Under Idaho contract law, a court may consider surrounding circumstances and the parties’ conduct (including shipping and billing documents and the absence of timely objection) to determine the nature of the agreement.
- When a party uses another’s property outside the scope of any enforceable agreement, Idaho restitution/unjust enrichment permits recovery measured by the reasonable value of the benefit conferred, commonly the fair rental value for the period of use.
- In federal court applying Idaho law, a state-law right to attorney’s fees connected to claims on a bond or its underlying contract must be applied; denial of fees where Idaho law requires them is reversible error.

## Conclusion

The Ninth Circuit upheld the district court’s determination that Mitchell rented (and did not buy) Interform’s concrete forms for the first job and that Mitchell’s additional use of the forms on a second job, without any governing contract, required restitution based on fair rental value; however, it reversed the blanket denial of attorney’s fees and sent the case back for calculation and award of fees allowed under Idaho law for the covered claims.


Interform Co. v. Mitchell, 575 F.2d 1270 (1978)