Supp. To § 1.20 Contract and Quasi Contract Distinguished

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(A) The following cases cite this section:

(1) Burlington Northern Railroad Co. v. Southwestern Electric Power Co., 925 S.W.2d 92 (Tex. App. 1996) (involving doctrine of unjust enrichment and its purposes, this case also cites § 1102, where it is noted).

(2) Gidatex S.r.L. v. Campaniello Imports, Ltd., 49 F. Supp. 2d 298 (S.D.N.Y. 1999) (applying New York law) (compensation under a quasi-contractual remedy must be sought after termination of agreement, because such a remedy is available only in the absence of a contractual remedy).

(3) Reisenfeld & Co. v. Network Group, Inc., 277 F.3d 856 (6th Cir. 2002) . A sub-broker sought quasi-contractual recovery directly from a property owner when the property owner had not paid the broker and the broker had not paid the sub-broker. The court held that the sub-broker could recover in quasi contract to prevent the unjust enrichment of the property owner, quoting Corbin at § 1.20: ''[a] quasi-contractual obligation is one that is created by the law for reasons of justice, without any expression of assent and sometimes even against a clear expression of dissent.'' The sub-broker could not recover as a third-party beneficiary under the contract between the owner and broker because that contract did not evidence an intention to benefit the sub-broker.

(4) Fetty v. Wenger, 36 P.3d 1123 (Wash. App. 2001) . An attorney who agreed to perform services on a contingent fee arrangement was discharged. His action to recover for services rendered was met by a defense that the statute of limitations had expired. The court found that though a client may terminate a contingent fee arrangement at any time and, therefore, no breach of the contingent fee contract occurs, a discharged attorney may sue in quantum meruit arising out of the contract for the reasonable value of the services rendered through the date of discharge. The court stated that primary rights in quantum meruit or quasi contract are contractual (citing Corbin at § 1.20). Assuming the appropriate statute of limitations was only three years rather than six on this contract theory, the court found that before the expiration of three years, the defendant had acknowledged the claim and either a promise to pay a past claim or a clear acknowledgment of the debt would have been sufficient to restart the statute of limitations. The defendant's writings constituted such an acknowledgment.

(5) Magwood v. Tate, 835 So. 2d 1241 (Fla. Dist. Ct. App. 2003) . Virginia Barrett and Anderson Tate, Sr., cohabited for several years. The union produced two daughters before a son was born. Virginia informed Tate Sr. that he was the father of the boy who was named Anderson Tate, Jr. Five years later, the couple separated and Virginia named a third party as the father of Tate Jr. Tate Sr. remained unaware of this fact and continued to see Tate Jr., providing him with money and gifts. Two decades later, Tate Jr. died in an accident and Tate Sr. was named as his father on the death certificate. Under a wrongful death settlement, Tate Jr.'s estate recovered $1,822,499, 70% awarded to the estate, 15% to the mother and 15% to the father. When a DNA test revealed Tate Jr.'s real father, his birth and death certificates were amended to reflect this change. Having learned these facts, Tate Sr. filed suit against the mother, the biological father, and the estate of the son for reimbursement under a theory of unjust enrichment for benefits conferred upon Tate Jr. The circuit court awarded the plaintiff $130,000 in damages against the estate. The appellate court reversed, finding that the elements of a cause of action for quasi contract are ''(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.'' The court emphasized that the fourth element involves ''[c]onsiderations of equity and morality'' which, as this treatise explains, ''play a large part in the process of finding a promise by inference of fact as well as in constructing a quasi contract without any such inference at all.'' Tate Jr. could not be held ''liable for things that happened when he was a child between the adults who were charged with taking care of him.'' It would have been inequitable to force the son to reimburse the plaintiff. The court recognized that the estate stood in the shoes of the decedent. Thus, the plaintiff was essentially attempting to recover support from the son. The son, however, was under no duty to support himself. Rather, it was the biological father's duty that the plaintiff discharged and not that of the son. The circumstances were not such that it would be inequitable for the son to retain the benefit without paying for it. Courts are not inclined to find a contract implied in law for the recovery of child support paid under mistake.

(6) Erickson v. Flynn, 64 P.3d 959 (Idaho Ct. App. 2002) . The defendant was a coin-collector who borrowed rare coins from the plaintiff, another collector, to photograph them for a book the defendant planned to author. The plaintiff alleged that the defendant promised to compensate him for the use of the coins by, inter alia, delivering photographs of the borrowed coins. He sued for breach of contract and alternatively for quantum meruit and unjust enrichment. The district court found there was no meeting of the minds as to the alleged contract's essential terms and there was no proof of trade usage that would support the implication of a term compensating the plaintiff. The court did not address the unjust enrichment claim but held that a quantum meruit claim had been tried by consent and awarded recovery under this theory based upon the approximate cost of photographing the coins. Both parties requested costs and attorneys' fees. The trial court concluded that an Idaho statute which required an award of attorneys' fees to the prevailing party in an action arising out of ''any commercial transaction'' did not authorize an award of fees for a quantum meruit claim. Accordingly, the trial court awarded attorneys' fees to the defendant as the prevailing party on the breach of contract claim and awarded costs but not attorneys' fees to the plaintiff as the overall prevailing party. The appellate court reversed the quantum meruit award, finding that the cost of photographing the coins would have been an appropriate measure of damages only if there was an enforceable contract requiring the defendant to photograph the coins. It was an inappropriate measure of damages under either a quantum meruit or an unjust enrichment theory. The court explained that recovery under a theory of unjust enrichment must be based upon the defendant's enrichment through his use of the coins while recovery under a theory of quantum meruit must be based upon the value of the plaintiff's services in lending the coins. Since the record contained no evidence of either, the claim should have been denied. The court also decided that under the Idaho statute at issue, an award of attorneys' fees for a quasi contract claim is appropriate where that claim is an alternative to a breach of contract claim and is based upon the same set of facts and circumstances as the breach of contract claim, and the alleged transaction is commercial in nature. Quantum meruit and unjust enrichment are quasi contract claims, either of which, as this treatise explains, can serve as the basis of recovery where an alleged agreement is too indefinite to be enforced. The case was remanded to determine the amount of costs and attorneys' fees to be awarded to the defendant as the prevailing party on all claims.

(7) Cantell v. Hill Holliday Connors Cosmopulos, Inc., 55 Mass. App. Ct. 550, 772 N.E.2d 1078 (App. Ct. 2002) . The plaintiff employment agency (''headhunter'') sued the defendant for breach of contract and quantum meruit when the defendant hired a former candidate of the plaintiff nine months after the plaintiff had arranged a meeting between the candidate and the defendant. Since there was no written contract signed by the defendant, the court found the claims barred by the applicable statute of frauds requiring any agreement to pay compensation for services as a broker or finder to be in writing and signed by the person to be charged. The plaintiff's claim for quantum meruit was also barred since the statute applied to contracts implied in fact or in law. In footnote 6 of the opinion, the court states, ''Massachusetts treats claims for quantum meruit, quasi contract and implied contract as having the same elements.'' As authority of this statement, the court cited Salamon v. Terra, 394 Mass. 857, 859, 477 N.E.2d 1029, 1031 (1985) , and this treatise, which indicate that the court was referring to implied-in-law contracts. Both sources distinguish quasi contracts (implied-in-law contracts which are not contracts) from implied-in-fact contracts which are contracts manifesting mutual assent through conduct. The court also found that the plaintiff would have been unable to prove it was entitled to a commission as the efficient and predominating cause of the subsequent transaction between the former candidate and the defendant since the former candidate obtained employment with the defendant nine months after the initial meeting, based on her own efforts.

(8) Doug Hambel's Plumbing, Inc. v. Conway, 831 So. 2d 704 (Fla. Dist. Ct. App. 2002) . This case illustrates the continuing confusion in characterizations of contracts implied in fact and contracts implied in law and how they are pled. The plaintiff, a subcontractor (plumber), was authorized by the owner to perform work for which it was not paid. The plaintiff sued a homeowner for damages and sought to foreclose on a mechanic's lien when the homeowner failed to pay for completed work. Florida mechanic's lien law requires a contract. An implied-in-fact contract satisfies this requirement but an implied-in-law contract does not, since, as this treatise notes, it is not a contract at all. The trial court concluded there was an implied-in-fact contract but found that it had not been pled under a quantum meruit count. The trial court assumed that this count did not allege a contract implied in fact because it equated ''quantum meruit'' with a contract implied in law (a quasi contract). The appellate court, however, held that the term is used in Florida to refer both to implied-in-fact contracts, which are genuine contracts and implied-in-law contracts, which are not contracts. Rather, they are ''quasi'' (something like) contracts to protect the restitution interest by avoiding unjust enrichment. ''Quantum meruit'' is typically said to mean, ''as much as he deserved.'' Since the trial court held that the facts supported an implied-in-fact contract, the appellate court held that a genuine contract existed which satisfied the mechanic's lien requirement.

(9) Mathias v. Jacobs, 238 F. Supp. 2d 556 (S.D.N.Y. 2002) . To resolve a dispute regarding the termination of the plaintiff's employment, the parties entered into a stock option agreement under which the plaintiff's option would automatically terminate if he contacted any of his former employer's officers, except for the CEO, or any of the officers' families (the ''no-contact'' provision). The parties provided different narratives of a meeting that occurred some two years later. The plaintiff alleged that he desired to exercise his option on the stock agreement but the defendant replied that it was not a convenient time and the plaintiff should postpone his request. The defendant, however, insisted that he had clearly informed the plaintiff that the stock option agreement had been breached by the plaintiff because of violations of the no-contact clause which discharged the stock option agreement The parties also agreed that the plaintiff would perform services. The defendant claimed that, as compensation for the plaintiff's new services and to promote good will, he granted additional financial interests to the plaintiff. Alternatively, the defendant argued that, if the stock option agreement was not terminated, the subsequent financial interests he granted to the plaintiff were in satisfaction of his obligations under the option agreement. The plaintiff, however, insisted that the option agreement did not terminate and the subsequent financial interests were granted in consideration for his compliance with the defendant's request to wait to exercise the option and as compensation for current services, i.e., they did not reduce the defendant's liability under the original option agreement. Because this court in a prior proceeding found the ''no-contact'' provision to be unenforceable, it rejected the defendant's argument that the option agreement terminated, since to hold otherwise would give effect to an unenforceable provision. The court proceeded to determine whether the plaintiff had sufficiently proved his theory of damages. It did not find the plaintiff to be credible and instead believed the defendant's contention that the subsequent financial interests granted to the plaintiff reduced or fully satisfied the defendant's obligations under the option agreement. The damages had to be reduced by (1) the amount of consideration apportioned to the unenforceable ''no-contact'' provision, which the court considered to be one-third; and (2) the value of the financial interests the defendant granted to the plaintiff in satisfaction of the defendant's obligations under the option agreement. The plaintiff's claim for damages was denied since the actual value of the financial interests he received in satisfaction of the option agreement far exceeded the amount he could recover under the option agreement. The court also agreed with the defendant that any further enrichment of the plaintiff under the option agreement would be unjust. In arriving at this conclusion, the court cited various authorities, including Corbin, in its discussion of quasi contracts.

(10) Harris v. Shea, 2002 Conn. Super. LEXIS 4142 (Conn. Super. Ct. Dec. 24, 2002) . The plaintiff bookkeeper enjoyed a family-like relationship with the defendant, the president of the company. When the company was in dire financial straights, at the defendant's urging, she loaned the company $25,000. She sought to recover the amount of the loan on the bases of unjust enrichment and an alleged oral promise by the defendant to repay her. The defendant denied both allegations and raised the suretyship provision of the statute of frauds. Although the plaintiff testified that the defendant was guaranteeing repayment of her loan to the company, the court found that the defendant acknowledged that the credit was given to him personally and his promise of repayment induced her to make the loan. Thus, the promise was an original undertaking outside the statute of frauds. Citing Corbin, the court rejected the plaintiff's claim for unjust enrichment since the finding of an express or implied contract precluded recovery in quasi contract.

(11) Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32 (1st Cir. 2003) . In this class action, the plaintiffs were cellular telephone subscribers who signed form contracts stating that chargeable time for calls ''originated'' by a subscriber start when the subscriber signals an initiation of the call and ends when the disconnect signal is confirmed. The plaintiffs argued that this language required them to pay only for calls which they ''originated'' and not for incoming calls. The defendant, however, billed the subscribers for incoming calls. The trial court decertified the class, holding that common issues of law and fact did not predominate. In particular, the court held that proof of charges and payments is not evidence of harm if services were received in return for billed payments. The court of appeals interpreted this holding to state that the defendant would be entitled to payment on a theory of quantum meruit even if the plaintiffs were to prevail on their breach of contract claim. Citing Corbin, the court rejected that view since a party who is not entitled to payment under the terms of an enforceable contract may not recover under quantum meruit (quasi contract). The court held that the district court's reliance on quasi contract led it to overlook questions of law and fact common to all class members. The terms of the contract were common for all class members and the common question of law was whether those terms precluded the defendant from charging for incoming calls. The court reversed the order decertifying the class.

(12) Waite Development, Inc. v. City of Milton, 866 So. 2d 153 (Fla. Dist. Ct. App. 2004) . This case is fully discussed at § 1.18 and cited at § 1.19 (where an agreement is arrived at by words, oral or written, the contract is said to be ''express'').

(13) Micromuse, Inc. v. Micromuse, P.L.C., 304 F. Supp. 2d 202 (D. Mass. 2004) . The plaintiff alleged that his prot'eg'e, decedent Christopher Dawes, had promised to give the plaintiff a one-third interest in one of his companies and had also promised never to do business in the United States using the Micromuse mark. The plaintiff claimed that the decedent failed to keep either promise. The plaintiff included a count for unjust enrichment. The estate moved for summary judgment and asserted the statute of limitations as a defense. Citing Corbin, the court stated that under the doctrine of unjust enrichment a plaintiff seeks restitution of a benefit conferred on another whose retention of the benefit at the plaintiff's expense would be unconscionable. The court determined that a six-year (contracts) statute of limitations applies to unjust enrichment claims and accordingly found that the decedent's alleged promises occurred outside the ''reach back'' date of the filing of the plaintiffs' complaint. The court granted the defendant's motion for summary judgment.

(14) Eureka Broadband Corp. v. Wentworth Leasing Corp., 2004 U.S. Dist. LEXIS 2572, 52 U.C.C. Rep. Serv. 2d 900 (D. Mass. Feb. 24, 2004) . Holding itself out as a finance lessor, the defendant arranged a lease of equipment between the owners of the equipment and the plaintiff-lessee. When the defendant failed to pay the owners, they pursued the plaintiff, who returned the equipment together with certain payments. The plaintiff brought this action against the defendant for a return of lease payments made to the defendant as well as costs and attorneys' fees. Unlike a true finance-lessor who buys or contracts to buy equipment chosen by a lessee, the defendant had no contract to buy the equipment from the owners. Beyond a count for breach of the lease contract, the plaintiff's complaint included a count for misrepresentation as well as a count for unjust enrichment, which asked the court to imply a contract between the plaintiff and the defendant if the court otherwise found no enforceable agreement between the parties. Citing Corbin, the court described unjust enrichment as an equitable claim under which a party seeks a remedy of restitution for benefits conferred on another where the retention of such benefits would be unconscionable. The court listed the ''elements'' of unjust enrichment, which included the absence of a remedy at law. Since the plaintiff had a remedy at law under both breach of contract and misrepresentation, the court held that the plaintiff's unjust enrichment claim was redundant.

(15) Stock v. Hafif, 2004 Cal. App. Unpub. LEXIS 5300 (Cal. App. 2d Dist. 2004) . The parties were attorneys from separate law firms involved in a fee dispute. Attorney Stock claimed that he was entitled to share in attorney fees for work he performed pursuant to an oral agreement to assist Attorney Hafif in the representation of certain clients. The clients, however, were never advised of the purported fee division arrangement. The appellate court determined that Stock's breach of contract claims were barred by the California Rules of Professional Conduct, which require the client to give written consent for a division of fees with an attorney who is not affiliated with the retained attorney law firm. The court, however, granted Stock's request that the case be remanded for a limited retrial to allow Stock to pursue a quantum meruit measure of damages. Hafif argued that Stock could not seek this compensation because Stock previously had voluntarily dismissed his quantum meruit cause of action. The appellate court determined, however, that the contract breach cause of action in Stock's third amended complaint sought relief under a restitutionary quantum meruit theory. The court explained that quantum meruit over time has come to describe not only a claim but a measure of damages, and that quantum meruit is a form of restitution. Citing Corbin, the appellate court explained that both restitution and compensatory damages are within the definition of damages. Thus, the court concluded that even if there was merit in the defendants' assertion that the dismissal of the quantum meruit action required judgment to be entered in their favor, the plaintiff remained free to seek restitutionary recovery as a measure of contract damages though such a recovery would be in the form of a quantum meruit award.

(16) Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 2005 U.S. App. LEXIS 11754 (1[st] Cir. 2005) . Where the parties never came to a sufficient manifestation of agreement concerning the compensation to be paid to the plaintiff in a dispute over a patent application for a drug to treat macular degeneration, the court affirmed the summary judgment below on the counts of express and implied-in-fact contracts. Quoting Corbin, however, the court reversed the district court's judgment for the defendant on the plaintiff's unjust enrichment claim finding that the ''inadequate meeting of the minds'' did not preclude the plaintiff's claim for restitution. Where an agreement is too indefinite to enforce or where the parties have materially different understandings of the terms, a claim of unjust enrichment is appropriate. Unjust enrichment provides ''an equitable stopgap for occasional inadequacies in contractual remedies at law'' by requiring one who has been unjustly enriched at the expense of another to make restitution. Here, after the defendant induced the plaintiff to agree to a change the scope of the application, the defendant unjustly profited from that change by denying fair compensation.

(17) McDonnell v. McDonnell, 2005 Mass. Super. LEXIS 221 . Where an owner of an interest in property deeded his interest to the other owners in exchange for consideration that was not evidenced in writing, the court cited Corbin in support of the proposition that, where an agreement is too indefinite to enforce or where no contract is made because each of the parties had a materially different understanding of its terms, a claim of unjust enrichment is appropriate. This case is fully discussed in the supplement to § 17.6.

(18) R.J. Marco Construction, Inc. v. SAMS Enterprises, LLC, 2005 Minn. App. LEXIS 610 (June 7, 2005) . The parties' construction contract required their joint and written approval of any modifications to the existing plans. The plaintiff performed approximately 29 additional improvements that were purportedly not part of the parties' contract, and no written modifications were executed. The plaintiff demanded foreclosure on a mechanics lien and made claims for breach of contract and unjust enrichment seeking recovery of approximately $300,000 for extras and improvements as well as $200,000 under the existing contract. The defendant made counterclaims for negligence, breach of contract and breach of warranties. The defendant claimed that the parties' course of dealings on other projects used a system of pluses and minuses in which costs of the extra improvements were to be offset reductions elsewhere in the projects. Thus, the extras and improvements in the instant contract were contemplated by the parties. The trial court determined that the plaintiff was entitled to compensation for its work and that defendant waived any requirements that the contract modifications be executed in writing. On appeal, the defendant argued that in accordance with the parties' course of dealings, the parties intended a ''not to exceed'' contract in which the extra improvements would be offset by other project reductions. The court noted that a builder is required to complete the work set out in the plan, and if a builder performs work that was not contemplated by the plan and the owner knowingly receives the work, the owner is liable to the builder for more than the amount of the stipulated sum. If the parties do not reach an agreement on the price of the improvements, the builder can seek quasi contract relief. Quasi-contract permits a party to recover the reasonable value of goods and services it provides to another when the essential terms of a contract are indefinite. Citing Corbin, the court noted that quasi-contract does not require any manifestation of agreement between the parties. The court determined that the contract did not provide a description of the alleged system of offset. The work provisions of the contract consisted entirely of drawings that were not affected by the offsets or susceptible to more than one meaning. Thus, the court determined that defendant could not resort to the parties' course of dealings to interpret the work provisions of the contract. Since the extra improvements were made, the court concluded that the plaintiff should be compensated for them. This case is also noted in Section 28.40 of this supplement.

(19) Wenning v. Calhoun, 827 N.E.2d 627 (Ind. Ct. App. 2005) . The parties signed a document evidencing the sale of 3 of 28 acres of the plaintiff's land. While the court held that a contract for the sale of land was too indefinite to be enforced because the exact parcel of property to be sold could not be identified from the terms of the contract, it also held that the would-be purchaser was entitled to quasi-contractual relief for money she spent to have utilities connected and a driveway constructed. Citing I Corbin, the court noted that this remedy is available if no contract exists. The court analogized the situation to a contract for the sale of goods that is unenforceable for indefiniteness where the buyer must return any goods that it has received or, if unable to do so, must pay the reasonable value at the time of delivery and the seller must return any portion of the price already paid. Here, the would-be purchaser had to forego any claim on the land and pay the reasonable value of her occupation of the land. The would-be seller must return any payments made in anticipation of entering into a contract.

(20) Alliance Group Services v. Grassi & Company, 406 F. Supp. 2d 157 (D. Conn. 2005) . Alliance claimed that it relied upon the defendant's preparation of financial statements which mistakenly indicated the continued existence of $250,000 and sought the return of all or portion of the fees it paid to defendant. The court found a factual dispute that precluded the entry of summary judgment on the contract claim. The defendant moved for summary judgment on Alliance's claim for unjust enrichment. Citing Corbin, the court explained that where there is an enforceable express or implied-in-fact contract, ''there is no room for quasi contract.'' The court granted the defendant's motion for summary judgment explaining that the doctrine of unjust enrichment doctrine is designed to supply a remedy where no remedy exists under the contract, ''not to provide two bites at the apple.''

(21) Caba v. Barker, 341 Ore. 534, 145 P.3d 174 (2006) . Residual legatees of a will brought an action against the lawyer who drafted it, claiming they are the intended third-party beneficiaries of what they characterized as an ''implied'' promise they alleged the defendant-attorney made to the testator in connection with the will; specifically, that the defendant-attorney impliedly promised to make the will invulnerable to a will contest so as to achieve the testator's plan to maximize gifts to the residuary beneficiaries. Plaintiffs alleged that the defendant-attorney failed to carry out the implied promise to the testator, and that plaintiffs suffered damages as a result because a will contest diminished each residual legatee's share of the estate by $103,569.50. The Supreme Court of Oregon found no basis, either in fact or law, for implying the alleged promise to make the will invulnerable to a will contest. The court cited Corbin for the proposition that promises implied in law are ''created by the law for reasons of justice.'' In this case, the plaintiffs failed to point the court to any such ''reasons of justice,'' and none occurred to the court.

(22) Regal Ware, Inc. v. Vita Craft Corp., 2006 U.S. Dist. LEXIS 68104 (D. Kan. 2006) . Regal Ware paid $1 million to Vita Craft, and Vita Craft purportedly granted Regal Ware the exclusive right and license to use certain cookware technology and the exclusive right to market, sell and distribute certain cookware in the Americas. Subsequently, Regal Ware discovered that Vita Craft did not own the patents or patent applications comprising the cookware technology referenced in the license agreement. Moreover, Vita Craft did not deliver the licensed product to Regal Ware within the time provided under the license agreement. Regal Ware requested that Vita Craft return the $1 million advance royalty, but Vita Craft did not return the payment. Regal Ware claimed breach of contract and unjust enrichment. The court granted Vita Craft's motion to dismiss the unjust enrichment claim, explaining that Regal Ware could not use the theory of unjust enrichment to enforce contractual duties undertaken by Vita Craft in the license agreement. The court cited Corbin for the proposition that ''quasi-contractual remedies ... are not to be created when an enforceable express contract regulates the relations of the parties with respect to the disputed issues.'' The court explained: ''Because the duty is imposed by an express contract, the court finds it inappropriate to use a 'legal device to enforce non-contractual duties' to enforce these contractual duties.''

(B) The following cases cited the predecessor to this section:

(1) Shalita v. Township of Washington, 270 N.J. Super. 84, 636 A.2d 568 (1994) (municipal court judge sought payment of salary fixed by township resolution pursuant to statute and in addition compensation in quasi contract but court, treating the township's resolution as an express contract, held that ''there is no ground for imposing an additional obligation where there is a valid unrescinded contract'').

(2) Harris Trust & Sav. v. Provident Life & Acc. Ins. 57 F.3d 608 (7th Cir. 1995) . The court drew on Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985 (4th Cir.) , cert. denied, 498 U.S. 982, 111 S. Ct. 512, 112 L. Ed. 2d 524 (1990) , which had cited the predecessor to this section, to announce that under federal common law of unjust enrichment, restitution is available upon demonstration that (1) claimant had a reasonable expectation of payment, (2) the other party should reasonably have expected to pay, or (3) society's reasonable expectations of person and property would be defeated by nonpayment. Applying this test to an employee benefit plan under which employer sought equitable reimbursement of advances made under third-party exclusion provision of plan, employer satisfied its burden in respect of each of these three prongs. The court was right to require the presence of each element, but as a matter of syntax was wrong to use the disjunctive in delineating the three elements.

(3) Rapaport v. U.S. Dep't of Treasury, 59 F.3d 212 (D.C. Cir. 1995) . The mere retention of funds, in alleged violation of terms of a guaranty, by the majority shareholder of a failed financial institution, was not sufficient to show that shareholder had been unjustly enriched. Drawing on common law principles to develop a federal common law of restitution, the court identifies the elements of a cause of action based upon unjust enrichment as: (1) plaintiff conferred a benefit upon the defendant, (2) the defendant accepted and retained the benefit; and (3) it would be unjust for the defendant not to pay plaintiff the value of the benefit. In this case, the argument that the shareholder had been unjustly enriched by failing to pay was deeply flawed because it did not show that the other party had conferred any benefit upon him.

(4) Montez v. Roloff Farms, Inc., 175 Or. App. 532, 28 P.3d 1255 (2001) . The claimant was injured while picking cherries for Roloff Farms, Inc. After the claimant applied for workers' compensation benefits, Roloff Farms, Inc. argued that the claimant was not an employee, that she had inquired about employment, and that she had been told to return with the identification for her son (who was also to work with the claimant) and to watch a safety video before commencing work. The claimant argued that she was not required to watch a safety video, but that she was put to work and given instructions on cherry-picking procedure, and that she worked for six to seven days before her injury. The ALJ concluded that the claimant had presented insufficient proof of her employ to warrant the award of workers' compensation benefits. This decision was affirmed by the Workers' Compensation Board, and reversed by the Oregon Supreme Court. The supreme court found that the Board had failed to consider the ''implied contract theory'' asserted by the claimant and had thus committed reversible error. The court held that the term ''implied contract'' exists when the parties' agreement is based in whole or in part upon their contract, and that the term has also been used to refer to quasi contracts, which are those ''created by the law for reasons of justice, without any expression of assent.'' (Quoting the predecessor to this section of Corbin.) Although the supreme court, acting within its authority, did not address whether the instant facts constituted a valid implied-in-fact contract, it was erroneous for the Board to fail to consider this theory.

(5) Premier Ins. Co. of Mass. v. Empire Fire & Marine Ins. Co., 2002 Mass. Super. LEXIS 1 (Mass. Super. Ct. Jan. 14, 2002) . Premier's insured negligently injured another motorist while the insured was driving a rental car insured by Empire. The Premier policy stated that when its insured is using an auto owned by another, the owner's insurer must pay the limits of its policy before Premier is obligated to pay. Premier paid $8,500 and sought recovery from Empire on a theory of unjust enrichment. Empire defended on the basis of a ''super escape'' clause in its policy with the rental car company. The clause stated that Empire would not be obligated to pay any amount if there is any other applicable insurance of any kind. Since states such as Massachusetts require compulsory auto insurance, the court held that this clause was against public policy because it denies coverage in every case in which the authorized driver has compulsory insurance. The court rejected Empire's defense that quasi contract recovery was limited to cases of breach of contract, breach of a fiduciary obligation or fraud. Citing Corbin at § 19, the court found that a court may impose a quasi-contractual obligation for reasons of justice without any manifestation of assent and even in face of an expression of dissent. The court decided that the remedy of equitable subrogation was particularly appropriate in this case. Like quasi contract, equitable subrogation is a restitutionary remedy that prevents unjust enrichment. Where two sources of payment exist and the second source (Premier) pays a debt owed by the first source (Empire), the second source is subrogated to the first and may recover the amount paid that should have been paid by the other to avoid that party's unjust enrichment.

(6) Novak v. Seiko Corp., 2002 U.S. App. LEXIS 9594 (9th Cir. May 16, 2002) (unpublished opinion). Novak asserted claims for breach of an implied-in-fact contract and unjust enrichment against the Seiko Corp. (SC), Seiko Instruments (SI), Seiko Epson Corp. (SE) and Time Tech., Inc. (TT) when he was not compensated for introducing them to Nike Corporation, with which two of the four, but not TT, formed a relationship. Apparently, Novak worked only for TT. However, he claimed that the four companies (the ''Seiko Group'') acted as a single entity with TT acting as the agent for all. In fact, though there was common ownership, each of the companies was independent under Japanese law.

The court found no evidence of an agency relationship and rejected Novak's claim of an implied-in-fact contract since it lacked discernible terms and mutual assent. There was no evidence of mutual assent to any payment terms. Furthermore, any recovery from TT would have been based on a business relationship with Nike that never occurred. Novak also failed in his quasi contract claim. Corbin was cited for the elements of such a claim: (a) a benefit was conferred, (b) the recipient was aware that the benefit was received, and (c) it would be unjust to allow retention of the benefit without requiring the recipient to pay for it. Here, Novak's claim failed Corbin's third prong, ''Injustice,'' which requires one of the following: (1) the plaintiff had a reasonable expectation of payment; (2) the defendant should reasonably have expected to pay; or (3) society's reasonable expectations of security of person and property would be defeated by non-payment. Since he never submitted the requested proposal as to his compensation, he could not reasonably expect payment. The companies could not reasonably have expected to pay him since he provided only minor, incidental information and because he failed to submit a proposal for the compensation he expected. Finally, since Novak made only preliminary contact with Nike and was therefore able only to provide minimal information, society's reasonable expectations of security of person and property were not defeated. See discussion of this case at § 561(E)(2).

(7) Provident Life and Accident Ins. Co. v. Cohen, 193 F. Supp. 2d 845 (D. Md. 2002) . Provident filed a complaint to recover some $238,000 paid to Cohen under a disability insurance policy. Provident offered evidence to prove that Cohen was not totally disabled as defined in the policy since he had resumed performing some of the duties of his former occupation. The Federal Employee Retirement Income Security Act (ERISA) preempted state law claims. The court held that the recognition of an unjust enrichment claim such as Provident's claim to protect its restitution interest was not only consistent with but furthered the purposes of ERISA. Quoting from Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985 (4th Cir. 1990) , which relied on the 1989 supplement to the predecessor of this section of Corbin, the court found that the facts of the case fit the archetypical unjust enrichment scenario, which requires the plaintiff to establish that (1) the plaintiff had a reasonable expectation of payment, (2) the defendant should reasonably have expected to pay, or (3) society's reasonable expectations of person and property would be defeated by nonpayment.

(8) UNUM Life Ins. Co. of Am. v. Long, 227 F. Supp. 2d 609 (N.D. Tex. 2002) . Through her employer, the defendant obtained a long-term disability policy from the plaintiff. The policy provided that monthly disability benefits would be reduced by the amount of ''other income benefits'' including Social Security disability or retirement benefits, but $100 was the minimum monthly benefit. Until Social Security made a decision, the insurer would deduct the estimated monthly social security benefit from monthly disability benefits unless the insured opted to receive the entire monthly disability benefit and signed an agreement promising to repay any overpayment to the insurer. The defendant became disabled and elected the latter option. A month after she began receiving disability benefits from the plaintiff, she also began receiving Social Security benefits. Since the Social Security exceeded the disability benefits, she was entitled to receive only the minimum $100 benefit from the plaintiff. For seven months she collected full payments from both the plaintiff and Social Security. The plaintiff initiated this action for breach of the repayment agreement and unjust enrichment when the defendant failed to repay as agreed. The district court granted the plaintiff's motion for summary judgment after addressing a jurisdictional issue. Pursuant to Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) , a fiduciary such as the plaintiff may not assert a private cause of action directly under ERISA to recover overpayment of benefits since it does not qualify as equitable relief. Since the federal common law recognizes a right of restitution, the court had jurisdiction over the unjust enrichment claim. Summary judgment was proper since the plaintiff established the elements of unjust enrichment under federal common law as recited in this treatise and the defendant did not demonstrate an issue of material fact.

(9) Realmark Devs., Inc. v. Ranson (Ransom), 588 S.E.2d 150 (W. Va. 2003) . The plaintiff brought this action for unpaid rent and the defendants' failure to pay property taxes under a five-year lease agreement with an option to purchase at the end of the term. The defendants' counterclaim alleged that the plaintiff breached an oral promise to apply a portion of the rental payments to the purchase price and a promise to assist the defendants in financing the purchase. The plaintiff's failure to perform these promises allegedly precluded the defendants from purchasing the property. In reliance on the plaintiff's promises, the defendants claimed they had expended considerable sums to repair and remodel the building during the lease term. Their counterclaim for unjust enrichment sought to recover the reasonable value of the repair and remodeling benefits conferred on the plaintiff. They requested a jury trial but the plaintiff objected, arguing that an unjust enrichment claim is equitable in nature and the defendants were not, therefore, entitled to a jury trial. The trial court agreed and held a bench trial in which it granted the plaintiff's motion for a directed verdict. On appeal, the defendants claimed that the trial court erred by denying them a jury trial. Citing Corbin, the instant court held that while a claim in unjust enrichment (sometimes called restitution, quasi contract or a contract implied-in-law) is equitable in nature, the action is one at law for money damages to which a right to trial by jury generally applies. The court reversed and remanded the case.

This case is also cited at § 1.18.

(10) Malonis v. Harrington, 816 N.E.2d 115 (2004) . When a client sustained injuries in a motor vehicle accident, he retained Attorney Malonis to represent him on a contingent fee basis under which Malonis would receive one third of any recovery. Malonis invested substantial time and funds in the representation of the client, but the client decided to discharge him in the course of the litigation before trial and retain Harrington as replacement counsel. Harrington completed a settlement with the party responsible for the vehicle accident in the sum of $57,500. It was not disputed that original counsel Malonis contributed materially to this settlement. Indeed, Harrington conceded that the decision by the party responsible for the injuries to offer this amount occurred at the time when Malonis was still representing the client. By the time settlement was reached, it was the reasonable expectation of all of the parties that Harrington had assumed responsibility to pay Malonis. Harrington himself understood that Malonis was entitled to payment as shown by the Harrington's four written requests to Malonis for an itemized bill for his legal services. In addition, Harrington communicated with the counsel for the defendant in the personal injury action and evidenced his intention to pay Malonis a portion of his contingency fee recovery. It is doubtful that the defendant in the personal injury action would have dispersed the settlement check to Harrington without Harrington's commitment to ''take care of'' Malonis. Upon settlement, Harrington received $17,500 pursuant to his contingency fee. Malonis sent Harrington an itemized statement of his hours and costs, claiming a total of $11,355.80. Harrington viewed this amount as ''ridiculous'' and refused to pay Malonis any amount. The court held that Malonis was entitled to be compensated for the reasonable value of his services as shown by the amount he invoiced Harrington. The court noted that the client was within his rights to discharge Malonis and that the discharge terminated Malonis' right to recover on the basis of his contingent fee arrangement with the client. Thereafter, the client had an obligation to compensate Malonis for the fair and reasonable value of his services and skills expended on his behalf, under the doctrine of quantum meruit. Since, however, by the time settlement was reached, the parties reasonably expected that Harrington had assumed responsibility to pay Malonis, Harrington, not the client, was obligated to compensate Malonis in quantum meruit for the value of his legal services. Any other conclusion would allow Harrington ''to be unjustly enriched, by permitting him to retain the entire fee, when he, admittedly, was not the major force in obtaining this settlement.'' The court cited Corbin for the proposition that recovery in quantum meruit requires no evidence of an actual promise to pay since a claim of unjust enrichment is one implied in law for reasons of justice, without any expression of assent.

(11) Barkan & Robon, Ltd. vs. Wise, 2006 Ohio 2918, 2006 Ohio App. LEXIS 2799 (2006) . A law firm sued the sole shareholders of a business entity that formerly was a licensed Illinois corporation, acting as a general contractor on large construction projects, for legal fees arising from services performed for the business entity. After the business entity had lost its corporate license, the shareholders failed to notify the law firm of this fact. The trial court awarded the law firm its fees in the sum of $11,595.48 on the basis of unjust enrichment, and the appellate court affirmed. The appellate court explained that the evidence supported an obligation created by law, without regard to expressions of assent by either words or acts. The court cited Corbin for the proposition that the doctrine of unjust enrichment was properly imposed to prevent a party from retaining money or benefits which, in justice and equity, belong to another. The court disregarded the corporate shield that the business owners attempted to use to avoid personal liability because, the court explained, it is undisputed that they benefitted personally from the legal services that the law firm provided. Moreover, the business entity had lost its corporate license and the individual shareholders had personally started making payments on the fees owed. The court also noted that therefore, the judgment was affirmed.

(C) Lawsuits between unmarried former cohabitants often implicate the terminology discussed in this section:

(1) Sack v. Tomlin, 110 Nev. 204, 871 P.2d 298 (1994) . The court announced that the ''doctrine of quantum meruit generally applies to an action for restitution involving work and labor performed which is founded on an oral promise on the part of the defendant to pay the plaintiff as much as the plaintiff reasonably deserves for his labor in the absence of an agreed upon amount.'' As such, it was inapplicable to an unmarried cohabitating couple where neither party ''promised or expected compensation for their contribution to household services.''

(2) Ellis v. Berry, 19 Kan. App. 2d 105, 867 P.2d 1063 (1993) (in an action seeking to divide assets jointly obtained by an unmarried cohabitating couple, the court decided that the factual record was inadequately developed to permit a determination of whether plaintiff stated a claim under either an implied in fact or an implied in law contract).

(3) Matter of Estate of Keeven, 126 Idaho 290, 882 P.2d 457 (App. 1994) . Husband brought an action against wife's estate on a theory of unjust enrichment for monies and labor he expended in building wife's house before they were married. In Idaho, where the party rendering the services and the party receiving the benefits are in a family relationship and living in one household, the law presumes that the services were gratuitous favors prompted by affection, kindness, and the relationship between the parties-a presumption that can be rebutted by showing that the services were not gratuitous. Idaho law defines ''family'' for these purposes ''as a collective body of persons who form one household under one head and one domestic government, and who have reciprocal, natural, or moral duties to support and care for one another.''

The appellate court reversed the trial court's grant of the estate's motion for summary judgment, on the ground that there was a material issue of fact regarding the existence of a family relationship between the parties when the construction work was done. The husband claimed that he was not living with decedent during construction, and stayed with her only occasionally when weather prevented his return to his own ranch.

(D) The following cases are also noteworthy:

(1) Longo v. Shore & Reich, Ltd., 25 F.3d 94 (2d Cir. 1994) . An employee who had executed a written contract of employment started work, even though her employer had not executed the contract. She was paid according to the contract rate. Upon discharge, she sued for the reasonable value of her services in quantum meruit. The district court had conclude that the employee was entitled only to the ''agreed upon'' salary and could not recover in quantum meruit. Following New York law, the Second Circuit reversed. This case is also noted in § 2.9.

(2) Edwards v. Conforto, 636 So. 2d 901 (La. 1993) . Sublessees of a building damaged by fire brought an action for unjust enrichment against the lessors to recover proceeds of a fire insurance policy. The primary lease required the lessee (sublessor) at his expense to maintain fire insurance in the joint names of lessor and lessee, with a loss payable clause to the lessor against fire and extended coverage. The lease also required the lessee to make all repairs of any kind at his own expense. The lease gave the lessee the option to cancel in the event of total destruction of the premises. The sublease adopted the same terms as the lease, including an obligation of the sublessees to repair the property. Under the terms of the sublease, the sublessees were required to pay all the costs necessary to maintain insurance in the joint names of the lessor and the sublessor, with a loss payable clause to the lessor.

A fire partially damaged the property, and the insurer paid the claim to the lessor. The sublessees repaired the property, and filed a petition for the return of funds (restitution) against the lessor, arguing that the insurance proceeds were due them, since they had paid the insurance premiums and had in fact made the repairs to the property.

The trial court rendered judgment against the sublessees, based on the terms of the lease. The sublessees appealed, claiming only that the lessor was unjustly enriched by retaining the insurance proceeds. The court of appeals affirmed. The Supreme Court of Louisiana at first reversed, stating that the sublessees unequivocally proved the prerequisites for unjust enrichment. On rehearing, the court reversed its first judgment and reinstated the judgment of the court of appeal.

The court concludes that the sublessors had failed to show that there was no absence of justification or cause for the lessor's enrichment and the sublessee's impoverishment. The justification or cause, the court says, was the contractual agreement between the parties. The lessee and sublessees were responsible not only for repair (assuming less than total destruction of the premises), but also for paying insurance premiums.

Three strong dissents criticize the majority's interpretation of the lease, hence their conclusion that the plaintiffs had failed to establish an absence of justification or cause for the enrichment. The most reasonable interpretation of the lease, argues one dissent, is that the insurance was to be maintained in both parties' names for the benefit of both as their interests might appear. The lease provided for insurance in case the lessee (or sublessees) failed to perform the obligation to repair, or in the event the lessee (or sublessees) canceled the lease upon total destruction of the premises. Once the sublessees repaired, they were entitled to reimbursement from proceeds of the insurance.

An interesting marriage of quasi contract and interpretation.

(3) Landmark Medical Center v. Gauthier, 635 A.2d 1145 (R.I. 1994) . Hospital sued wife for payments due for medical services rendered to wife and her husband. The Supreme Court of Rhode Island held that the wife was liable for payments due for medical services rendered to her on a theory of quasi contract. Following a majority of jurisdictions, the court extended the common law doctrine of necessaries, which originally imposed a duty on the husband to provide his wife with necessary support, to include both spouses. Rhode Island courts had characterized medically necessary expenses as ''necessaries.'' Hence the wife was liable. The court noted that the doctrine of necessaries is an exception to the general principle of nonliability for the legal obligations of a spouse.

(4) Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 649 A.2d 518 (1994) . Hockey Club failed to recover from manufacturer on a theory of express contract, because the club had failed to establish the apparent authority of the manufacturer's agent. However, the manufacturer was liable on a theory of unjust enrichment having derived a benefit from broadcasts showing the manufacturer's name on one of the boards that surround the ice (''dasher boards'').

(5) Francis O. Day Co. v. Montgomery County, 102 Md. App. 514, 650 A.2d 303 (1994) . Subcontractor did not have a claim for unjust enrichment against the county after developer defaulted on its obligation to pay the subcontractor. Subsequent dedication of the infrastructure to the county did not result in an enrichment that was unjust, since the county did not request the improvements, and the dedication did not clearly result in a financial benefit.

(6) Meaney v. Connecticut Hospital Ass'n, 250 Conn. 500, 735 A.2d 813 (1999) . The Supreme Court of Connecticut was called upon to resolve an issue of first impression: ''whether, as a result of unconsummated negotiations for incentive compensation to supplement the salary and benefits provided by an enforceable employment contract, an employee may recover damages pursuant to a claim in restitution for unjust enrichment.'' In other words, the question was ''whether, in the absence of [a contract for incentive compensation], the employee has a right to recover the amount by which his services benefitted his employer.'' The court held that the employee did not have a right of recovery under the circumstances of this case. The circumstances were these.

Meaney was hired by an affiliate of the Connecticut Hospital Association, CHA Insurance Services, Inc. (''CHAIS'') as the director of insurance services on an at-will basis. He was hired to improve the profitability of CHAIS, a job he performed splendidly. Management expressed an interest in providing him with incentive compensation in addition to his base salary. They made Meaney a proposal, which he rejected. Meaney made his own proposal, which management rejected. The two sides agreed to engage a consultant to evaluate the compensation picture. The consultant submitted a report harshly criticizing Meaney's management style and attributing his financial success to ''competitive pricing.'' Instead of receiving incentive compensation, Meaney was fired.

Meaney sued on many counts. One of them was for restitution for unjust enrichment. The trial court allowed the jury to render a verdict on the amount by which Meaney's services benefited CHAIS, and they did. The court concluded that, ''when unjust enrichment is duly pled, an employee ... may, in appropriate cases, recover a bonus in addition to his salary even when the promised amount of the bonus is too indefinite to be enforced as a matter of contract law.'' The court held that Meaney ''was for a long time promised appropriate incentive compensation in addition to his salary if he turned [the Association's] insurance fortunes around. He amply fulfilled the stated condition. To turn him away with just his salary under these circumstances would be inequitable. Such a decision would unjustly enrich the employer at the employee's expense... . Under these circumstances, the law of unjust enrichment provides an appropriate remedy... . It should be pointed out that the jury in this case was not left to its unfettered speculation on the question of reasonable value. There was ample evidence on industry standards, some of it generated by [the Association] and its agents.''

On appeal, the Supreme Court of Connecticut, per Justice Peters, reversed. The court began by noting that if the law affords Meaney any remedy, it is the law of restitution for unjust enrichment. No term of his original, express contract provided for incentive compensation, and he could not sue on an implied contract, since ''the negotiations between the parties did not identify an industry standard or any other objective benchmark that could have supplied the specific terms for a court to enforce.'' Moreover, ''[a]greement on the concept of incentive pay, without more, is too indefinite to permit recovery by way of a contract remedy, express or implied.'' Hence, the relationship of the parties was governed by their original contract until modified by agreement - an agreement the parties were never able to achieve. ''Although the services [Meaney] performed were of substantial benefit to the defendant, that is precisely what [Meaney] was hired to do. The defendants contend, therefore, that, as a matter of law, they were not unjustly enriched. We agree.'' The fact that the parties had agreed on the idea of additional compensation did not render inapplicable the principle, broadly accepted in American case law, that an express contract precludes recognition of an implied-in-law contract governing the same subject matter. ''If there is, indeed, no rational basis for a fact finder to determine the incentive pay to which the parties might have agreed, how can there be a rational basis for determining how much the defendants were unjustly enriched by not having to pay such compensation? If some other calculation is an appropriate measure of benefits, what should that measure be? ... Perhaps in contexts other than the employer/employee relationship such alternatives may be persuasive, but pinpointing and quantifying even a senior employee's contributions to the profits of a complex enterprise is, as this case demonstrates, too fraught with uncertainty to prove unjust enrichment.''

Two justices dissented on the ground that the jury reasonably could have found that the defendants had promised Meaney that incentive payments would be forthcoming upon improvement of the business's performance and that defendants did not simply promise Meaney that they would consider making such payments. The dissent points out that Meaney testified that, at the time he was hired, the defendants had told him that they ''must ... see the performance before [they could] give [him] the bonus.''

(7) Strickland v. Cartwright, 117 S.W.3d 766 (Tenn. Ct. App. 2003) . The plaintiff desired to purchase the defendant's restaurant. Unable to pay the defendant's asking price of $1.5 million, the parties attempted to negotiate a lease/option agreement but neither signed a draft of such an agreement. The plaintiff made an initial deposit of $170,000 and began to operate the restaurant. She made additional payments including monthly rental payments to bring the total paid the defendant to $205,000 over a six-month period. At that time, however, the plaintiff abandoned the enterprise claiming she discovered material defects in the restaurant and the defendant had failed to perform promises to repair certain areas. She sought the recovery of amounts paid the defendant. The defendant claimed the parties had entered into a lease/option agreement under which the plaintiff had committed to a non-refundable payment of $250,000 of which the $170,000 was a down payment. The defendant, therefore, counterclaimed for $80,000. The trial court held that the parties had formed a lease/option agreement but there was no mutual assent to its terms. It found for the plaintiff in the amount of $138,000. On appeal, the instant court held that the trial court erred in finding a lease/option agreement since such a finding was inconsistent with its finding of no mutual assent. Accepting the finding of lack of mutual assent, the court held that to avoid the unjust enrichment of the defendant, the plaintiff was entitled to recover in quantum meruit the amount paid to the defendant minus the reasonable value of the offsetting benefit conferred by the defendant on the plaintiff, i.e., the value of the leased premises for six months. Adopting the findings that the plaintiff had paid $205,000 to the defendant and the reasonable rental value of the restaurant for six months was $67,000, the court affirmed the judgment of $138,000 awarded by the trial court.

(8) Andersons, Inc. v. Consol, Inc., 348 F.3d 496 (6th Cir. 2003) . The parties began negotiations for the lease of railroad cars to transport coal to a public utility to which the defendant aspired to supply coal. The plaintiff supplied a proposed lease agreement to the defendant with a lease rate the defendant required in its bid to obtain the coal contract with the utility. The plaintiff had also arranged for the cars to be modified to meet the defendant's requirements. During this time, the parties were negotiating the terms of the lease. The defendant required certain terms in the lease and the plaintiff modified its standard lease agreement to meet some of the terms. The defendant obtained the contract with the utility. Before any final lease with the plaintiff was consummated, however, the defendant discovered the availability of railroad cars from another source at a lower lease rate and terminated negotiations with the plaintiff. Among other claims, the plaintiff brought an action for unjust enrichment. The trial court granted summary judgment for the defendant. On appeal, the court reviewed the requirements for unjust enrichment under Ohio law: a benefit must be conferred upon the defendant which is aware of the benefit under circumstances where it would be unjust to allow the defendant to retain the benefit without payment-it is not enough for the plaintiff to show that it conferred a benefit upon the defendant; the enrichment of the defendant must also be unjust.

With respect to the benefit conferred upon the defendant from the plaintiff's preparation of the lease bid to allow the defendant to bid on the coal supply contract with the utility, the court compared it to a general contractor using the bid of a subcontractor in securing a contract and then choosing another subcontractor on that contract. Such a subcontractor would not be entitled to compensation for assisting the general contractor to prepare a bid on the overall project. Like the subcontractor, the plaintiff's preparation of such a bid was merely the cost of doing business that may or may not have resulted in obtaining the contract to lease railroad cars. Similarly, the repair costs on the plaintiff's railroad cars were expenses incurred in preparing to enter into a contract with the plaintiff. The plaintiff, however, was aware of the risk that a lease agreement with terms satisfactory to the defendant might not eventuate. The plaintiff, therefore, failed to establish the necessary causal connection between any benefit conferred on the defendant and any alleged detriment to the plaintiff. The court affirmed the grant of summary judgment for the defendant. This case is also discussed under supplement § 2.31.

(9) Wright v. Martek Power, Inc., 314 F. Supp. 2d 1065 (D. Colo. 2004) . The plaintiff's employment contract was terminable upon 30 days' written notice. Upon termination, she was entitled to sales commissions on all products shipped within 90 days after the effective date of the termination. The plaintiff was terminated on July 14, 2001. She alleged that she was responsible for sales of more than $11 million, which should have provided commissions of $530,000, but that she received only $35,000 since the products were shipped beyond 90 days after the termination date. The plaintiff claimed breach of an implied covenant of good faith and fair dealing as well as unjust enrichment. The defendant moved for summary judgment. The parties stipulated that the law of Texas applied. The court was uncomfortable applying Texas law since neither the dispute, the parties nor the underlying activity appeared to have any connection with Texas. The court noted the defendant's ''correct'' assertion that Texas, unlike Colorado and other jurisdictions, does not recognize an implied covenant of good faith and fair dealing in all contracts. Whether Texas law applied, however, awaited a determination of additional facts. With respect to the plaintiff's unjust enrichment claim, the court held that under Texas law and, with exceptions not pertinent to these facts, under Colorado law, the existence of an express written agreement covering the services in question precluded a claim for unjust enrichment.

(10) Broad-Bussel Family LP v. Bayou Group LLC (In re Bayou Hedge Funds Inv. Litig.), 472 F. Supp. 2d 528 (S. D. N. Y. 2007) . The plaintiffs were investors or limited partner shareholders in Bayou funds that received legal advice from the defendant law firm. The plaintiffs sought to recover damages from the law firm on a restitution theory claiming that the firm was unjustly enriched. The court noted that the complaint was ''conclusory'' since it was devoid of critical assertions. On the assumption that the defendant was retained by Bayou to provide legal services and was paid for those services, the court noted that such evidence would be woefully short of sustaining an unjust enrichment count. The essence of unjust enrichment is that one party parted with money or a benefit that was received by another at the expense of the first party. The complaint did not allege such a claim. Payment to a law firm for legal advice is simply an operating expense. Even if Bayou's payment to the law firm for such advice used misappropriated funds, such payment would not confer a ''direct'' and ''specific'' benefit to the law firm at the expense of the plaintiffs. There were no facts alleged from which a reasonable trier of fact could infer that the law firm was not equitably entitled to retain any legal fees it earned for services rendered.

(11) Ferguson v. Nationwide Prop. & Cas. Ins. Co., . Mrs. Ferguson was employed as an on-site manager at Raskin's Royal Oaks apartment complex for which Ferguson was paid monetary compensation as well as her rental and utility expenses. Part of the apartment was used as Royal Oaks' office. A fire destroyed Ferguson's personal property for which she sought a recovery against her employer and its insurer on the basis of either an implied in fact or implied in law contract that her employer would provide such insurance. The trial court granted summary judgment for Raskin. On appeal, the instant court reviewed the distinction between implied in fact contracts which require the same manifestation of mutual assent, albeit via conduct, as express contracts. The court found no evidence of such assent. As to the plaintiff's implied in law claim, the court noted that the plaintiff would have to prove that the defendant received a benefit without paying its value. No such quasi contractual claim is recognized absent such unjust enrichment. In exchange for her services as live-in manager, Mrs. Ferguson received monetary compensation as well as the payment of her rental and utility expenses. This was the compensation for which she bargained in exchange for her services. Raskin had not undertaken to pay insurance premiums for her personal property. Since the manifested intentions of the parties reflected the compensation that Mrs. Ferguson agreed to accept and Raskin agreed to pay, courts will not interfere with the rights or duties to which the parties have agreed. There was no unjust enrichment of Raskin. Since she had to claim against Raskin, Mrs. Ferguson had no claim as a third party beneficiary under Raskin's contract with the Nationwide Insurance Company.

(12) McIntosh v. Wiley, 2006 U.S. Dist. LEXIS 89589 (D. S. D. Tex. 2006) . The plaintiff purchased 47 purebred Transcapian Ural sheep from defendant Wiley at $4000 per animal. Wiley had obtained the sheep from defendant Brands who was marketing the sheep for defendant Jeffereys. The plaintiffs claimed that the sheep were not the purebreds that were represented and sued all defendants. The court rejected the plaintiff's argument that they were third party beneficiaries of the contract between defendant Wiley and defendant Brands. Brands moved for summary judgment on all of the plaintiff's counts including the plaintiff's claim for quasi-contractual and related relief. The court noted that quasi contract is not a contract but a doctrine imposed by courts to prevent unjust enrichment. As a judicial construct, it is not an implied-in-fact contract which is just as real a contract, albeit manifested by conduct, as an express contract manifested in words. Rather, an implied-in-law contract is a quasi contract because, again, it is created by courts to avoid unjust enrichment. Another common law equity doctrine allowing an action in assumpsit to recover a benefit unjustly retained at the expense of another is another manifestation of the same quasi contractual relief. These claims, however, cannot co-exist in an action for breach of a contract and, while there was no express or implied-in-fact contract between the plaintiffs and defendant Brands, there was an express contract between the plaintiffs and defendant Wiley. The plaintiff could not sue on an express contract and a quasi or implied-in-law contract for the very same subject matter whether the defendant was the party with whom the express contract was made (Wiley) or a separated defendant (Brands) with whom no contract was made. The mutual claim exclusion applies not only where the party is seeking to recover in ''quantum meruit'' (a method of pleading quasi contract) from the party with whom he expressly contracted, but also when the plaintiff is seeking recovery from a third party foreign to the original contract but who benefitted from its performance.

Supplement to Notes in Main Volume

8. On the meanings and relationships of the terms ''implied-in-law contract,'' ''quasi contract'' and ''quantum meruit,'' see Sabin v. Graves, 86 Ohio App. 3d 628, 621 N.E.2d 748 (1993) . A nephew sued his aunt's estate, seeking compensation on theories of express contract, implied-in-law contract and implied-in-fact contract for money and services he rendered to construct an addition to the aunt's home. Drawing on Ohio cases from 1902 and 1915, the court invoked the hoary ''family member'' rule, providing that family members seeking compensation for services rendered to other family members cannot recover unless they demonstrate by clear and convincing evidence that there was an express contract, either oral or written, to perform the services in exchange for payment. See § 3.17 below.

The court declared that the ''shift in presumption accomplished by the family member rule generally precludes recovery for services rendered to one family member by another based on an implied in law theory.'' On the other hand, said the court, the family member rule ''does not preclude recovery by a family member, based on quantum meruit, for services he rendered to another family member based on a quasi contract theory, where an unenforceable express oral contract to leave property by will is shown to exist.'' Finally, the family member rule does not preclude recovery under an implied-in-fact contract theory. As a result, said the court, the nephew would have to show by clear and convincing evidence the existence of an ''actual contract'' to recover, but he had not done so.

The court's use of these terms and their relationship to the family member rule was correct. The term ''implied-in-law contract'' comes down through the writ of assumpsit and creates liability against a party as a matter of law, without regard to whether his speech or conduct entailed a promise. The family member rule identifies a class of cases in which no such constructive promise is recognized. Quasi contract is sometimes used as a synonym for the constructive promise recognized by an implied-in-law contract, but it also carries the separate meaning used by the court in Sabin-to furnish a basis for recovery when a true contract was created but is not binding by reason of such excuses as duress, fraud or, as in Sabin, the unenforceability of an express oral contract to leave property by will. Finally, as the court in Sabin suggested, quantum meruit is the measure of the remedy in such a case where liability is based on quasi contract. Sabin is also noted in § 3.17 below.

9. U.S.- Violette v. Armonk Assocs., L.P., 872 F. Supp. 1279 (S.D.N.Y. 1995) (under New York law, the existence of a valid and enforceable contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter; settlement agreements between parties to a litigation did not expressly address the issue of attorneys' fees, and New York practice is to assess each beneficiary for its share of counsel fees); Limehouse (H.B.) v. Resolution Trust Corp., 862 F. Supp. 97 (D.S.C. 1994) (under South Carolina law, broker cannot recover brokerage commission of sale of savings bank's inn in quantum meruit where a contract existed between RTC and broker for payment of 2% of the sales price).

Convergent Group v. County of Kent, 266 F. Supp. 2d 647 (W.D. Mich. 2003) . The court held that an unjust enrichment claim in addition to a breach of contract claim would lie where the existence of an express contract had not been established by the admission of the defendant or by summary judgment. In this case, the court dismissed an unjust enrichment claim where it was undisputed that there was an express contract between the parties which the plaintiff claimed was breached.

This case is also discussed at §§ 33.8 and 580.

Curley v. Allstate Ins. Co., 289 F. Supp. 2d 614 (E.D. Pa. 2003) (under Pennsylvania law, a remedy for unjust enrichment is unavailable where the relationship of the parties is founded on an express contract). This case is discussed in § 32.2A of the supplement.

Detrick v. 84 Lumber Co., 2007 U. S. Dist. LEXIS 35517 (N.D. Ohio 2007) . The plaintiff's action included counts for breach of an express contract and recovery for quasi contract. The defendant claimed that the quasi contract count was pre-empted by the existence of an express contract. The plaintiffs argued that this count was pled in the alternative to their express contract claim and should be allowed to stand at this stage of the proceeding. The court recognized some support for the argument that the existence of a contract precludes quasi contract claims, but found ''better-reasoned'' decisions allowing such a claim where the proceeding had not reached a stage where it could not be determined as a matter of law that a contract existed or that an existing contract governed the dispute between the parties. The court found that the plaintiffs intended to plead in the alternative, first, that there was an existing contract that the defendant had breached; second, in the absence of such a contract, the defendant was unjustly enriched at the plaintiffs' expense. Rule 8(a) of the Federal Rules of Civil Procedure allows for alternative pleading. While both parties have alleged the existence of an agreement, at this stage of the proceedings, the court was not willing to call the agreement a contract, particularly in light of the defendant's ''equivocation'' concerning the validity, enforceability and completeness of the alleged contract.

Conn.- Rosick v. Equipment Maintenance & Service, Inc., 33 Conn. App. 25, 632 A.2d 1134 (1993) (subcontractor cannot raise a claim against contractor in quantum meruit for expenses that should have been the subject of a change order).

12. U.S.- A & B Construction, Inc. v. Atlas Roofing & Skylight Co., 867 F. Supp. 100 (D.R.I. 1994) (indemnity implied-in-law not allowed to defeat exclusive remedy provision contained in the Rhode Island Workers' Compensation Act) (citing § 1.19 of Corbin; also noted in § 1.19); Texaco Puerto Rico, Inc. v. Mojica Maldonado, 862 F. Supp. 692 (D.P.R. 1994) (plaintiff unreasonably delayed seeking restitution).

N.C.- Peace River Electric Cooperative, Inc. v. Ward Transformer Co., 116 N.C. App. 493, 449 S.E.2d 202 (1994) , review denied, 339 N.C. 739, 454 S.E.2d 655 (if adequate remedy at law may be sought, court's equitable intervention is obviated).

28. R.I.- Landmark Medical Center v. Gauthier, 635 A.2d 1145 (R.I. 1994) (finding quasi-contractual liability for medical services rendered to mentally impaired person).

31. Me.- George C. Hall & Sons, Inc. v. Taylor, 628 A.2d 1037 (Me. 1993) (to sustain claim for unjust enrichment by property owner who benefited from contract between contractor and lessee of property it must be inequitable for owner to retain benefit, as would result from owner's fraud or collusion with lessee or if lessee were judgment proof).

In Aladdin Electric Associates v. Town of Old Orchard Beach, 645 A.2d 1142 (Me. 1994) , a contractor was hired by the prospective purchaser of a stadium to do electrical repairs. The purchaser told the contractor that if the deal fell through, the seller-the town-would pay the contractor. The contractor did the work, the deal fell through, and the town didn't pay. The trial court awarded the contractor about half the contract price.

The Supreme Court of Maine vacated the damage award, on the ground that the trial court seemed to have used the measure of damages appropriate to quantum meruit (recovery for services or materials provided under an implied contract), rather than the equitable measure of damages for unjust enrichment. In particular, the trial court measured the enhanced value of the stadium by the cost of improvements, while excluding from consideration the contractor's overhead expenses and profit. The court emphasized that the distinction between quantum meruit and unjust enrichment is legally significant.

Mont.- Ragland v. Sheehan, 256 Mont. 322, 846 P.2d 1000 (1993) (''Unjust enrichment is an equitable doctrine wherein the [plaintiff] must show some element of misconduct or fault on the part of [defendant] or that defendant somehow took advantage of plaintiff'').