author: PER CURIAM. CARTER, Justice

text:
    STATE of Iowa, Appellee, v. Willis Elbert MORRIS, Appellant.
    No. 02-1033.
    Supreme Court of Iowa.
    April 7, 2004.
    Linda Del Gallo, State Appellate Defender, and Robert P. Ranshau, Assistant State Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, Martha E. Boesen, Assistant Attorney General, Thomas J. Ferguson, County Attorney, James Katcher, Assistant County Attorney, for appellee.
   PER CURIAM.

Defendant, Willis Elbert Morris, appeals from judgment and sentence convicting him of second-degree theft as a habitual offender in violation of Iowa Code sections 714.2(2), 902.8, and 902.9(3) (2001). The alleged theft involved a motor vehicle. He contends that the State failed to produce sufficient evidence that he intended to permanently deprive the owner of possession of the motor vehicle, an essential element of theft involving a motor vehicle. The court of appeals agreed with that contention and reversed defendant’s conviction for theft. After reviewing the record and considering the arguments presented, we affirm the decision of the court of appeals. The judgment of the district court is reversed and remanded.

On October 6, 2001, at 4:30 a.m., Brian Gonzales started the engine on his truck parked on the street in front of his home. He intended to let it warm up before driving to work. Gonzales reentered his home leaving the engine running. Shortly thereafter, he heard a “revving” of the truck’s engine, looked outside, and saw someone driving his truck away.

'Gonzales called Waterloo police and reported the taking of the vehicle. Officer Aaron McClelland arrived at the scene and took the necessary information from Gonzales, including a description of the truck. The officer then put out an “attempt to locate” call to Waterloo patrol officers for the location of a brown Ford Ranger pickup truck.

Approximately thirty minutes later, McClelland came upon the missing truck about five miles from Gonzales’s residence. The truck was being driven in the opposite direction from that of the officer’s vehicle. McClelland turned his police vehicle around and gave pursuit. The person driving Gonzales’s truck stopped the vehicle, got out, and fled on foot toward nearby houses. Officer McClelland radioed for backup and a K-9 unit responded. One of the dogs alerted police to the presence of a person hiding on a porch of a house. McClelland identified this person as the man who had fled from the truck. That person was ultimately determined to be defendant, Willis -Elbert Morris.

Defendant was arrested and charged with second-degree theft pursuant to Iowa Code section 714.2(2) (the motor vehicle version), a class “D” felony. He was also charged as a habitual offender, pursuant to Iówa Code section 902.8. The second-degree theft charge was submitted to the jury along with the lesser-ineluded offense of operating a motor vehicle without the owner’s consent in violation of Iowa Code section 714.7. The jury found defendant guilty of second-degree theft. He ultimately stipulated to the prior offenses on which the habitual-offender sentencing enhancement was based.

The court of appeals, relying on our decision in State v. Schminkey, 597 N.W.2d 785 (Iowa 1999), concluded that the mere fact that defendant took Gonzales’s pickup truck without consent of the owner did not give rise to an inference that he intended to permanently deprive the owner of the vehicle. The court further concluded that the evidence, viewed in its entirety, was insufficient to permit a finding of the requisite intent beyond a reasonable doubt. We agree with the court of appeals’ reading of Schminkey and its application to the present facts.

Although apprehension of the suspect within a short time of the taking of the vehicle does not defeat the possibility that there was an intent to permanently deprive the owner of the property at the time of the taking, it is a circumstance that severely limits the circumstantial evidence from which that intent can be inferred. The State urges that the circumstances under which the defendant abandoned the vehicle, i.e., stopping it and running away, are indicative of the requisite intent. We disagree. Abandoning the vehicle and fleeing upon observing the presence of police was an act that would ordinarily assure that the truck would be returned to its owner. We affirm the decision of the court of appeals holding that the evidence was insufficient to support a conviction for second-degree theft.

The court of appeals simply remanded the case for further proceedings not inconsistent with its opinion. We believe a more specific remand mandate is warranted. The offense of operating a motor vehicle without the owner’s consent in violation of Iowa Code section 714.7 was submitted to the jury as a lesser-ineluded offense. The jury did not reach a verdict on that offense because it found that the State had established all elements of the greater offense. In so doing, the jury necessarily found that the State had established all elements of the included offense. In such instances, we have approved entering an amended judgment of conviction with respect to the lesser-included offense. State v. Pace, 602 N.W.2d 764, 774 (Iowa 1999); see also State v. Lampman, 342 N.W.2d 77, 81 (Iowa Ct.App.1983); 5 Am. Jur.2d Appellate Revieiv §§ 836, 844 (1995). We order that this be done following remand in the present case. Defendant shall then be resentenced according to law.

DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.

All justices concur except CARTER, J., who concurs specially, and LARSON, CADY, and STREIT, JJ., who dissent.

CARTER, Justice

(concurring specially).

Although I am troubled with the decision of the court in State v. Schminkey, 597 N.W.2d 785 (Iowa 1999), for the reasons set forth in my dissent in that case I do not agree that that decision only applies to guilty pleas, as the dissent in the present case suggests.

Schminkey involved the taking of an Alford plea in which the defendant refused to admit guilt. When this occurs, the court, before accepting the plea, must determine whether the evidence available to the State would be sufficient to sustain a guilty verdict at trial. That is the same analysis that must be undertaken in ruling on a motion for judgment of acquittal. For this reason, Schminkey is valid authority for the issue presently before the court.

I believe Schminkey failed to recognize the strength of the inference that arises from taking an automobile without the owner’s consent. An individual’s intent is synonymous with what he wants to do. What he wants to do is usually motivated by and derived from the actor’s own best interests. It is in the best interests of one taking another’s automobile without permission that the vehicle not be returned to the owner because this may aid in the identification of the perpetrator.

Notwithstanding my conclusions in this regard, I concur in the result because I am unable to find that the totality of the evidence in the present case, including the presumption to which I refer, is sufficient to sustain a verdict of guilty on the greater charge. The defendant should be declared guilty of the lesser-included offense.

LARSON, Justice

(dissenting).

I dissent because the plurality fails to recognize and apply the well-established principle that a defendant’s possession of recently stolen property creates an inference that the defendant stole it. In concluding that proof of intent was not established in this case, the plurality expressly relies on State v. Schminkey, 597 N.W.2d 785 (Iowa 1999), stating, “fw]e agree with the court of appeals’ reading of Schminkey and its application to the present facts.”

Even if the holding in Schminkey, was correct, I disagree with the plurality’s reliance on it in this case. Both Schminkey and the present case involve the sufficiency of evidence on the element of intent to deprive the owner of possession of a vehicle. With that, however, the similarity ends. Schminkey was a guilty-plea case, while the present case was tried to a jury. In a guilty-plea case, the State may not rely on inferences to establish a factual basis. In contrast, a jury-tried case is one in which inferences are standard stock-in-trade. See County Court of Ulster County, New York v. Allen, 442 U.S. 140, 99 S.Ct. 2213, 60 L.Ed.2d 777 (1979).

Inferences and presumptions are a staple of our adversary system of fact-finding. It is often necessary for the trier of fact to determine the existencé of an element of the crime — that is, an “ultimate” or “elemental” fact — from the existence of one or more “evidentiary” or “basic” facts.

Id. at 156, 99 S.Ct. at 2224, 60 L.Ed.2d at 791. The Supreme Court has further said that:

The most common evidentiary device is the entirely permissive inference or presumption, which allows — but does not require — the trier of fact to infer the elemental fact from proof by the prosecutor of the basic one and that places no burden of any kind on the defendant. In that situation the basic fact may constitute prima facie evidence of the elemental fact. When reviewing this type of device, the Court has required the party challenging it to demonstrate its invalidity as applied to him.

Id. at 157, 99 S.Ct. at 2224-25, 60 L.Ed.2d at 792 (emphasis added) (citations omitted).

In a guilty-plea case, it is not permissible for a judge to fill gaps in the factual-basis record by inferring elements, of the crime. The difference between guilty-plea cases and fact-tried cases vis-a-vis the function of inferences is significant. In one case, the court observed:

The government argues that this court can infer that [the defendant] had an intent to defraud when he obtained the American Express card using a false name and a false date of birth. Although we agree that a rational fact finder could infer an intent to. defraud from such evidence, in the context of a challenge to the factual basis supporting a guilty plea, we have previously rejected a request by the government to infer a “critical element” of the offense charged.

United States v. Tunning, 69 F.3d 107, 113 (6th Cir.1995) (emphasis added) (citation omitted); see also McCarthy v. United States, 394 U.S. 459, 467, 89 S.Ct. 1166, 1171, 22 L.Ed.2d 418, 426 (1969) (holding that a factual-basis record on a guilty plea cannot be supplemented by a district court’s “assumptions” of facts). In United States v. Goldberg, 862 F.2d 101 (6th Cir.1988), the court stated:

In our judgment, to permit the district court to infer a factual basis in the absence of a record demonstrating the existence of a factual basis would tend to negate the well-established safeguards inherent in the [federal guilty-plea-rule] mandate.

Goldberg, 862 F.2d at 106.

The problem for the state in motor-vehicle larceny cases is that it must prove the defendant knowingly took the vehicle, but it also must prove the defendant took it with the intent to deprive the owner of it. Establishing the first element does not establish the second. We have so held in guilty-plea cases involving theft, holding a factual basis on intent was not established. Schminkey, of course, was one of them. In addition, other cases support that proposition. See, e.g., State v. Auerbach, 283 N.W.2d 278, 280 (Iowa 1979); Brainard v. State, 222 N.W.2d 711, 721 (Iowa 1974). However, in cases that have gone to trial, we have accepted inferences arising from possession of recently stolen property as a means of proving theft. See, e.g., State v. Rosewall, 239 N.W.2d 171, 173 (Iowa 1976); State v. Morrison, 183 N.W.2d 696, 697 (Iowa 1971); State v. Everett, 157 N.W.2d 144, 146 (Iowa 1968). The reliance on use of inferences recognizes the difficulty of proving subjective intent by direct evidence.

In the past, it was customary for our courts to instruct specifically on the inferences to be drawn from possession of recently stolen property. See, e.g., Morrison, 183 N.W.2d at 697. This practice, however, has been criticized:

The instruction on the inferences to be drawn from possession of recently stolen property should be condemned. It is nothing more nor less than a singling out of, and judicial comment on, a specific item of evidence.

Id. at 699 (Becker, J., dissenting). Now, juries are presumably instructed in a manner that does not emphasize the defendant’s possession of stolen property. Under our uniform instructions, that intent may be based on “circumstances” in the case, but the instructions do not refer to the defendant’s possession of recently stolen property as the basis for a presumption. This sanitized form of the instruction was given in the present case, as I will discuss later.

In this case, the court instructed the jury on the elements of both larceny and the lesser offense of operating a vehicle without the owner’s consent. The distinguishing feature of the theft charge is the element of intent to deprive the owner of the property. The jury was instructed that, to prove the higher offense of larceny, the State must prove the defendant acted “with the specific intent to deprive [the owner] of the automobile.” “Deprivation” was defined in a separate instruction:

To “deprive the [owner]” of the property, means to withhold permanently or to withhold for so long or under such circumstances the value or benefit of the property is lost to the owner. If a person disposes of property so that it is unlikely the owner will recover it, you may conclude, but are not required to conclude, that the person disposed of the property with the intent to permanently deprive the owner of its use.

The key element of larceny, the intent to deprive, was explained in this instruction:

Specific intent means not only being aware of doing an act and doing it voluntarily, but also doing it with a specific purpose in mind. Specific intent need not exist for any particular length of time before the act.
Determining a defendant’s specific intent requires you to decide what the defendant was thinking when the defendant did an act. It is seldom capable of direct proof. Consider the facts and circumstances surrounding the act to determine the defendant’s specific intent. You may conclude, but are not required to conclude, that people intend the natural results of their acts.

(Emphasis added.) This instruction, substantially the same as Uniform Criminal Instruction 200.2, incorporates the concept of inferences.

The facts presented at trial are briefly stated in the plurality opinion. It is undisputed that Morris took the truck, at about 4:30 a.m., without the owner’s consent. The owner immediately called the police who soon located the vehicle and began to give chase. When the police stopped the vehicle, Morris fled on foot. These facts are clearly sufficient to give rise to an inference of guilt, including the element of intent.

The Supreme Court has discussed the nature and limitations on inferences and their status under the Constitution:

[T]he entirely permissive inference or presumption ... allows — but does not require — the trier of fact to infer the elemental fact from proof by the prosecutor of the basic one and that places no burden of any kind on the defendant. ... Because this permissive presumption leaves the trier of fact free to credit or reject the inference and does not shift the burden of proof, it affects the application of the “beyond a reasonable doubt” standard only if, under the facts of the case, there is no rational way the trier could make the connection permitted by the inference. For only in that situation is there any risk that an explanation of the permissible inference to a jury, or its use by a jury, has caused the presumptively rational factfinder to make an erroneous factual determination.

Allen, 442 U.S. at 157, 99 S.Ct. at 2224-25, 60 L.Ed.2d at 792.

The plurality points to facts it contends militate against proof of an intent to deprive the owner of possession. These facts include the distance Morris traveled with the truck (approximately five miles) before he was apprehended and the time he had the truck (approximately thirty minutes). These facts are not necessarily helpful to Morris’s case, however; his relatively short time of possession might well have been viewed by the jury to be the result of speedy police work — not evidence that he lacked the intent to keep it. In any event, that was a question for the jury. While the facts relied on by Morris may affect the strength of the inference, they do not preclude, as a matter of law, an inference of intent. There is clearly a “rational way the [jury] could make the connection permitted by the inference” under the Allen test.

I believe the plurality erred in relying on Schminkey, in refusing to recognize the inference of intent, and in failing to conclude that sufficient evidence supports the conviction. I would vacate the decision of the court of appeals and affirm the judgment of the district court.

CADY and STREIT, JJ., join this dissent.


source: Caselaw Access Project

author: CARTER, Justice.

license: Public Domain

text:
    ORANGE CITY MUNICIPAL HOSPITAL, Appellant, v. BOARD OF REVIEW OF SIOUX COUNTY, Appellee.
    No. 02-0114.
    Supreme Court of Iowa.
    April 7, 2004.

      Ivan T. Webber and Randall H. Stefani of Ahlers & Cooney, P.C., Des Moines, and Bradley K. De Jong, Orange City, for appellant.
    Melissa R. O’Rourke, County Attorney, Orange City, and Bruce B. Green, Brett Ryan, and Michael J. Davenport of Willson & Pechacek, P.L.C., Council Bluffs, for appellee.
    J. Kirk Norris, Des Moines, for amicus curiae Iowa Hospital Association.
   CARTER, Justice.

Plaintiff, Orange City Municipal Hospital and Clinic (the municipal hospital), an administrative department of Orange City, appeals from a district court order upholding the property-tax assessment on assisted-living facilities and independent-living facilities owned and operated by the municipal hospital. The municipal hospital asserts that it is entitled to the exemption provided to the properties of municipal corporations in Iowa Code section 427.1(2) (1999). The local board of review urges, and the district court concluded, that the statutory exemption was not available to the municipal hospital because its assisted-living facilities and independent-living facilities were not devoted to a public use and were being operated for a pecuniary profit.

The court of appeals disagreed with the district court’s conclusions and found that the municipal hospital qualified for the section 427.1(2) exemption from property tax on these facilities. After reviewing the record and considering the arguments presented, we affirm the decision of the court of appeals and reverse the judgment of the district court.

The municipal hospital is licensed under Iowa Code chapter 392. In 1988 and 1989 it constructed assisted-living facilities and independent-living facilities pursuant to the statutory authorization contained in Iowa Code.section 347.14(11). The record indicates that the cost to construct those facilities was between $4.4 and $5.3 million. Before deciding to proceed with that project, the municipal hospital conducted a feasibility study and determined that there was a market for the types of services and facilities that it would provide. It was determined that the occupancy level would be stable. Projections, showed that revenues from these facilities would begin to exceed expenditures with respect thereto following the second year of their operation.

An assisted-living facility is a licensed care facility for persons who Heed assistance with one or more activities of daily living but do not require á nursing home atmosphere. An independent-living facility is housing that allows the resident to live in a totally independent manner. The municipal hospital did, however, provide certain health-care services to the residents of its independent-living facilities. There are twenty-eight units in the assisted-living facility and twenty units in the independent-living facility. The assisted-living portion has been issued a license by the Iowa Department of Elder Affairs pursuant to Iowa Code chapter 231C. These facilities only admit applicants with ability to pay and do not subsidize low-income applicants. Residents unable to meet continuing monthly fees are not allowed to remain.

The municipal hospital provides the only facility of this type within the city of Orange City. Only one other comparable facility exists in the immediate area, and it is privately owned. The rates charged by the municipal hospital for its facility are slightly more than those charged by the comparable facility.

The current dispute involves the property-tax assessment for 2000 and 2001. The board of review and the district court upheld the assessments levied in each of those years and rejected the municipal hospital’s claim that this property was exempt under the municipal-use exemption contained in Iowa Code section 427.1(2).

I. Scope of Review.

Tax exemption appeals are equitable proceedings and are therefore reviewed de novo. Care Initiatives v. Bd. of Review, 500 N.W.2d 14, 16 (Iowa 1993).

II. Whether This Property of the Municipal Hospital Was Exempt Pursuant to Iowa Code Section 427.1(2).

There is no dispute that the property in question is municipally owned. The issues on appeal concern its public use and whether these facilities are held for pecuniary profit.

A. Public use. The court of appeals determined that the municipal hospital’s assisted-living facilities and independent-living facilities constituted a public use because facilities of this type are statutorily recognized as ancillary to the functions of a municipal hospital and they provide needed housing and care for the elderly. The court determined that these facilities served a significant need in their community because they were the only assisted-living facilities or independent-living facilities in Orange City. It correctly noted that subsidization of low-income patrons is not a requirement for a municipal corporation’s property to be deemed exempt under section 427.1(2). See Van Buren Hosp. & Clinics v. Bd. of Review, 650 N.W.2d 580, 590-91 (Iowa 2002).

We agree with the decision of the court of appeals. The fact that the legislature has provided that a municipal hospital may operate facilities of this nature as an ancillary hospital function shows a recognition that in today’s society this is one of the public needs that municipal hospitals should attempt to meet. We are satisfied that in providing these facilities the municipal hospital is attempting to satisfy that need.

B. Whether these facilities are operated for a pecuniary profit. The impediment to property-tax exemption that results from activities for pecuniary profit was substantially clarified in Van Buren, 650 N.W.2d at 587. Discussing the pecuniary-profit language contained in section 427.1(2), we viewed that provision of the statute as a corollary to the public-use provision. We discussed the connection between these two matters as follows:

[T]he test that has emerged from our cases interpreting the “public use” element of section 427.1(2) is whether the property in dispute is primarily used to carry on “reasonably necessary or essential facilities to the efficient operation and maintenance” of the public use for which the exemption is authorized....
A similar approach is taken to the “not ... held for pecuniary profit” element of the statutory exemption. When the primary use of property is public, it is not subject to taxation simply because the municipality incidentally receives revenue from the operation of the property.

Van Buren, 650 N.W.2d at 587-88 (quoting City of Osceola v. Bd. of Review, 490 N.W.2d 539, 542 (Iowa 1992) (other citations omitted) (emphasis added)).

In the present case, it appears that any excess of revenues over expenditures in the operation of these facilities is used first as a reserve for necessary maintenance of the assisted-living facilities and independent-living facilities and any residue is utilized to support the general operations of the municipal hospital. We agree with the court of appeals that the operation of these facilities is not for pecuniary profit in the sense that would work a denial of a section 427.1(2) exemption.

We have considered all issues presented and conclude that the decision of the court of appeals should be affirmed. The judgment of the district court is reversed and the case is remanded to that court with directions to declare the subject property exempt for the tax years 2000 and 2001.

DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED.

      . The statute on which the municipal hospital relies in seeking an exemption for its property provides:
      The following classes of property shall not be taxed:

      2. Municipal and military property. The property of a county, township, city, school corporation, levee district, drainage district, or the Iowa national guard, when devoted to public use and not held for pecuniaiy profit

      Iowa Code § 427.1(2) (emphasis added).

      . The statutory basis for this activity is contained in the following:
      The board of hospital trustees may:

      11. Do all things necessary for the management, control and government of said hospital and exercise all the rights and duties pertaining to hospital trustees generally, including but not limited to authorizing delivery of any health care service, assisted or independent living semce, or other ancillary seivice ....
      Iowa Code § 347.14(11) (emphasis added).


author: VANDE WALLE, Chief Justice.

text:
    2004 ND 74
    Sylvester A. DANZL and Marian M. Danzl, Plaintiffs and Appellees v. Ron HEIDINGER, Defendant and H & R Construction, Inc., Defendant and Appellant.
    No. 20030239.
    Supreme Court of North Dakota.
    April 13, 2004.
    Rehearing Denied June 3, 2004.

      Sylvester A. Danzl and Marian M. Danzl, Bismarck, N.D., pro se.
    Paul H. Myerchin, Bormann & Myer-chin, LLP, Bismarck, N.D., for defendant and appellant.
   VANDE WALLE, Chief Justice.

[¶ 1] H & R Construction, Inc., appealed from an amended judgment awarding Sylvester and Marian Danzl $4,186 in damages and $2,389.93 for their attorney fees in their action to recover for improperly installed shingles on their home. Because there is no authority for the award of attorney fees, we reverse the award of attorney fees and otherwise affirm the amended judgment.

I

[¶ 2] A June 2001 hailstorm damaged the roof of the Danzls’ Bismarck home, and all of the shingles needed to be replaced. The Danzls hired H & R Construction to replace the shingles and paid the company $4,186 when the work was completed in September 2001. Following a minor hail storm one year later, the Danzls had their roof inspected by an insurance claims adjuster, who informed them the damage was caused by improper installation of the new shingles and would not be covered by insurance. Nails were protruding into and through the shingles above them causing the shingles to crack and age prematurely. Between 59 to 69 bulges were visible on the roof. The Danzls contacted Ron Heidinger, the owner of H & R Construction, to repair and reshingle the entire roof, but he offered to only repair the areas of the roof in which there were visible bulges.

[¶ 3] In January 2003, the Danzls sued Heidinger and H & R Construction in small claims court, alleging the shingles were improperly installed and seeking $4,186 in damages. Heidinger and H & R Construction hired an attorney who had the case removed to district court, and the Danzls then hired an attorney to represent them in the case. Following a bench trial, the district court found “more likely than not the entire roof was installed improperly and needs to be replaced.” The court found no personal liability on the part of Heidinger, but awarded the Danzls $4,186 in damages against H & R Construction “for replacement of the shingles.”

[¶ 4] The Danzls’ attorney also requested an award of attorney fees under a theory of “unjust impoverishment.” The attorney for H & R Construction argued an award of attorney fees was not authorized by statute. In awarding the Danzls $2,389.93 for their attorney fees, the district court reasoned:

I agree Mr. Myerchin, for what it’s worth, a hundred percent with your argument that there isn’t a statutory basis to do is [sic]. However I have to say that I’m almost always bothered by cases that are relatively small dollar amounts when somebody chooses to remove it to district court simply because they put the plaintiff in the position of either having to proceed without an attorney at marked disadvantage or having to pay attorneys fees and I just don’t think that’s right. I think the whole purpose of small claims court, as we’ve said — as both parties have said, is to resolve relatively simple dollar amount and factual matters in a cheap and informal basis. I think Mr. Danzl made good faith efforts to do that. Please don’t get me wrong Mr. Myerchin, I’m not accusing you of bad faith in any way. I’m just saying that I think better judgment by your client would have been to resolve the matter in small claims court and I think if we’re using the term punishment or penalty, it shouldn’t be the plaintiff that should be penalized, particularly if the plaintiff prevails in the matter. In this case, just for a legal basis, I do think that Mr. Danzl would be unjustly impoverished if he were forced to pay the attorneys fees.

II

[¶ 5] The only issue raised by H & R Construction on appeal is whether the district court erred in awarding the Danzls their attorney fees. A district court’s decision regarding an award of attorney fees will not be overturned on appeal unless the court has abused its discretion. In re Estate of Hass, 2002 ND 82, ¶ 22, 643 N.W.2d 713.

[¶ 6] We have consistently held that, absent statutory or contractual authority, the American Rule assumes each party to a lawsuit bears its own attorney fees. See, e.g., Western Nat’l Mut. Ins. Co. v. University of North Dakota, 2002 ND 63, ¶ 49, 643 N.W.2d 4; Fisher v. American Family Mut. Ins. Co., 1998 ND 109, ¶ 23, 579 N.W.2d 599; Zuern v. Jensen, 336 N.W.2d 329, 330 (N.D.1983). Consequently, in the absence of express statutory or contractual authorization, attorney fees incurred by a plaintiff in litigation are not recoverable as an item of damages, see Nord v. Herman, 1998 ND 91, ¶ 27, 577 N.W.2d 782, because attorney fees “are not a legitimate consequence of the tort or breach of contract.” Farmers Union Oil Co. v. Maixner, 376 N.W.2d 43, 48 (N.D.1985). See also Barsness v. General Diesel & Equip. Co., Inc., 422 N.W.2d 819, 827 (N.D.1988) (recognizing attorney fees and expenses may be recovered if they constitute damages from the breach of a contract, but not if they are incurred in proving the breach). Successful litigants are also not automatically entitled to attorney fees unless authorized by contract or statute. See In re Estate of Lutz, 2000 ND 226, ¶ 33, 620 N.W.2d 589.

[¶ 7] In this case, the district court did not find that H & R Construction’s pleadings were frivolous or that it acted in bad faith, but based the award of attorney fees on the doctrine of “unjust impoverishment.” The Danzls did not cite to the district court or to this Court, nor have we found, any authority for awarding attorney fees under a theory of “unjust impoverishment.” This Court has said that unjust enrichment may serve as the basis for an award of attorney fees. See Nygaard v. Robinson, 341 N.W.2d 349, 360 (N.D.1983); Winkler v. Gilmore & Tatge Mfg. Co., Inc., 334 N.W.2d 837, 838 (N.D.1983); Conrad v. Suhr, 274 N.W.2d 571, 575 (N.D.1979). However, among the elements required to establish unjust enrichment are an enrichment to the defendant, an impoverishment to the plaintiff, and a connection between the enrichment and the impoverishment. See Zuger v. North Dakota Ins. Guar. Ass’n, 494 N.W.2d 135, 138 (N.D.1992). Although the Danzls may have been impoverished to the extent of the legal fees paid for representation in district court, H & R Construction certainly experienced no enrichment connected to that impoverishment. Therefore, the doctrine of unjust enrichment cannot support the award of attorney fees.

[¶ 8] The basic premise for the award of attorney fees appears to be the district court’s perception of unfairness to the Danzls for hiring and paying an attorney to represent them only after H & R Construction, through an attorney, removed the case from small claims court to district court, coupled with the court’s belief that the case should have remained in small claims court. We agree the procedure under the Small Claims Act, N.D.C.C. ch. 27-08.1, is intended to be simple and informal. See Freed v. Unruh, 1998 ND 34, ¶ 8, 575 N.W.2d 433; Towne v. Dinius, 1997 ND 125, ¶ 7 n. 2, 565 N.W.2d 762. The Act “establishes an informal forum for resolving minor disputes” and “eliminates several legal formalities that encumber the usual lawsuit.” Svanes v. Grenz, 492 N.W.2d 576, 578 (N.D.1992). However, the Act balances the procedural rights of a plaintiff and a defendant concerning the choice of a formal or an informal forum. Although the plaintiff is given the initial choice of forum to commence an action in small claims court, N.D.C.C. § 27-08.1-04 provides the defendant with the opportunity to decide whether a more formal legal process is used so the defendant is not “unilaterally precluded by the plaintiff from seeking the protections of a formal civil hearing.” Raaum v. Powers, 396 N.W.2d 306, 310 (N.D.1986). A defendant has the right to seek removal of an action from small claims court to “avail[ ] himself of all the privileges concomitant to a formal civil trial, including not only the right of appeal, but the right to secure a trial by jury and other traditional aspects of the legal process as well.” Id. These rights are lost if the action remains in small claims court. See Whitaker v. Century 21, 466 N.W.2d 114 (N.D.1991); Kotelecky v. Engelter, 278 N.W.2d 776, 779 (N.D.1979).

[¶ 9] We recognize that the removal provisions of N.D.C.C. § 27-08.1-04 may be subject to abuse by represented defendants who seek only to intimidate self-represented plaintiffs. Here, the district court specifically found H & R Construction did not act in bad faith. Furthermore, being “forced to incur ‘attorney’s fees and expenses’ ” to prosecute or defend a legal action does not alone justify an award of attorney fees. State Farm Mut. Auto. Ins. Co. v. Estate of Gabel, 539 N.W.2d 290, 294 (N.D.1995). If changes are required concerning the award of attorney fees in the context of small claims court actions, those arguments should be addressed to the Legislature.

[¶ 10] Because there is no authority for the award of attorney fees, we conclude the district court abused its discretion in awarding the Danzls attorney fees in this case.

Ill

[¶ 11] We reverse the amended judgment insofar as it awards the Danzls $2,389.93 in attorney fees. The amended judgment is otherwise affirmed.

[¶ 12] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, WILLIAM A. NEUMANN and DALE V. SANDSTROM.