Commerce Partnership 8098 Limited Partnership PDF

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Commerce Partnership 8098 Limited Partnership [owner of building] v. Equity Contracting Co. [materials subcontractor] COURT AND DATE: Florida District Court of Appeal (1997) PROCEDURAL HISTORY: Trial court: denied commerce’s motion for an involuntary dismissal. ISSUE: In California, must a plaintiff alleging promissory estoppels show (1) a clear and unambiguous promise; (2) reliance on the promise; (3) that the promisor could reasonably know that the plaintiff would rely on the promise; and (4) injury to the plaintiff?

TRIGGER FACTS: Commerce Partnership 8098 Limited Partnership (Commerce) (defendant) owned an office building. Commerce contracted with World Properties, Inc. (the general contractor) to perform improvements on the building. The general contractor contracted with Equity Contracting Co. (Equity) (plaintiff) to perform work on the office building. Both Commerce and the general contractor inspected Equity’s work as it progressed. When Equity completed its work, Commerce inspected it and asked Equity to do some repairs. Equity asked for partial payment before starting the repairs, which Commerce refused. Equity filed suit against the general contractor, who filed for bankruptcy. Equity then filed suit against Commerce under the theory of quantum meruit. At trial, after Equity rested, Commerce moved for involuntary dismissal, arguing Equity had not proven its case under the theory of “contract implied in fact.” That motion was denied. In its closing argument, Equity stated that it was seeking to prove “unjust enrichment.” Commerce moved to reopen its case, stating that Equity’s statement in closing was the first indication that Commerce was defending a quasi-contract claim. The trial court granted Commerce’s motion. Commerce provided evidence that the contract price was nearly $257,000, that it had paid over $64,000 directly to three subcontractors for their work on the project, and that it had paid over $223,000 to the general contractor. The trial court granted Equity’s objection to this evidence as irrelevant. The trial court entered judgment in favor of Equity. Commerce appealed to the Florida District Court of Appeal.

PLAINTIFF’S MAIN ARGUMENTS: DEFENDANT’S MAIN ARGUMENTS: Asserted that it had established a claim for quantum meruit, which it interpreted to mean unjust enrichment. RULE (the law): A subcontractor may recover from a property owner under a theory of unjust enrichment.

HOLDING + REASONING: Yes. An injured party may sue under a theory of “contract implied in fact” when there has been an interaction between the parties that would imply that a contract exists. However, an injured party may sue under a theory of “contract implied in law” when the

Restitution other party has received something of value at the expense of the injured party, even when the two parties have never interacted. The elements of an action under a theory of “contract implied in law, also known as, “unjust enrichment,” “quasi contract” or “quantum meruit,” are as follows: (1) the plaintiff has conferred a benefit on the defendant; (2) the defendant has knowledge of the benefit; (3) the defendant has accepted or retained the benefit conferred and (4) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying fair value for it.” In a construction contract, a subcontractor may recover against the property owner if the subcontractor can establish the following: “that the subcontractor had exhausted all remedies against the general contractor and still remained unpaid and that the owner had not given consideration to any other person for the improvements furnished by the subcontractor.” In the current matter, Equity did not establish that Commerce had not given consideration for Equity’s work. Therefore, Equity failed to meet its burden of proof. Moreover, when Commerce attempted to establish that it had paid over $64,000 directly to subcontractors for work on the project, the trial court incorrectly ruled that the evidence was irrelevant. The trial court also incorrectly ruled that Commerce’s evidence showing that it paid over $223,000 to the general contractor was irrelevant. When the two figures are added together, it shows that Commerce paid almost $290,000, which is more than the contract price of $257,000 for the project. This evidence is relevant to show that Commerce has not been unjustly enriched by the project. Because this evidence has not been fully litigated, whether Commerce was unjustly enriched remains an open question. Accordingly, the trial court decision is reversed and remanded. The trial court must accept evidence on this issue and Equity must establish that Commerce has failed to make payments for the benefits conferred on it by Equity....