Kizer Excavating Co. v. Stout Building Contractors, LLC

“Claims in quantum meruit can proceed on two distinct theories: a theory based on a promise to pay for services “implied in fact,” which “retains a contractual character,” or a theory based on an obligation ‘implied at law’ as necessary to avoid unjust enrichment.” In re Klamp, 363 Or 62, 418 P3d 733 (2018).

Appellant Kizer Excavating Co appealed a judgment rejecting their request for attorney fees in a quantum meruit claim. Appellee Stout Building Contractors, in a cross-appeal, assigned error to the trial court’s judgment for granting the Appellant’s quantum meruit claim as well as for denying Appellee’s request for attorney fee recovery. Appellant argued that they deserved compensation for the additional work that was necessary for the construction project, which is the subject of litigation under the theory of quantum meruit. In response, the Appellee argued the Appellant’s damages suffered were from their own failure to perform pursuant to the express contract between parties. The Court first considered the Appellee’s argument that the trial court’s decision to rule in favor of the Appellant on their quantum meruit claim was erroneous because the parties had an express contract. “Claims in quantum meruit can proceed on two distinct theories: a theory based on a promise to pay for services 'implied in fact,' which 'retains a contractual character,' or a theory based on an obligation ‘implied at law’ as necessary to avoid unjust enrichment. A person who requests services from another may be liable on an ‘implied-in-fact’ quantum meruit basis for the reasonable value of those services based on an implied promise to pay them.” In re Klamp, 363 Or 62 (2018). The Court ruled in favor of the Appellee because the quantum meruit claim presented by the Appellants was within the scope of the contract between parties, as was admitted by both parties at the trial court. Therefore the existence of a contract established that the parties were obligated to perform and the obligations of the services expected were not implied in fact. The Court affirmed that the work performed by the Appellant was within the scope of the contract and did not unjustly favor the Appellees. Additionally, the denial of attorney fees for the Appellant was proper pursuant to the contract, which expressly ordered the prevailing party to have their attorney fees paid. Affirmed on appeal and reversed and remanded on cross-appeal.