Construction Law

Kenneth A. Slavens, Esquire

Though the general contractor and subcontractor could not agree on what had been the terms of their contract, it made no difference to analysis of the breach of contract claim, because under either party’s scenario neither included terms for extra work.  Therefore, there could be no breach of contract award for extra work.  However, the general contractor could be liable in quantum meruit if it requested and accepted the extra work even though the work itself was ultimately retained by the owner.  In addition, recovery under quantum meruit does not render a claim unliquidated for the award of prejudgment interest.  City of Cape Girardeau et al. v. Jokerst, Inc, No. 98654 (Mo. App. E.D., June 11, 2013), Gaertner, J.

A general contractor (General) requested a bid from a concrete subcontractor (Subcontractor) for work on an aquatic center in Southeast Missouri.  Subcontractor responded  by fax with a two page bid which contained language that said that the final billing would be based upon the actual measurements of the completed work.  The General was awarded the work on the aquatic center and advised the Subcontractor.

The Subcontractor began work and submitted monthly invoices with measurements of the work completed, the unit price, and the amount billed.  The initial invoices were paid by the General.

During the course of the project, the General asked the Subcontractor to change some curbing from “curb and gutter” to a “stand-up curb.”  There was no discussion of cost of this work or other impact.  The Subcontractor moved forward and completed the stand-up curb work as requested.

A dispute eventually arose between the General and the Subcontractor as to what had been the terms of the contract and how the stand-up curb work should be billed.  The General contended that the parties had a lump sum agreement while the Subcontractor contended it was a unit price contract.

After completion of the project, the General paid the entire dollar amount it believed to be due under the contract with the Subcontractor if the contract was for a lump sum.  The Subcontractor was not paid for the stand-up curb work and eventually filed suit for costs associated with the stand-up curb work.

The court of appeals found that there was no oral or written contract between the parties for the stand-up curb work.  The stand-up curb was not originally contemplated by the parties, but came about as a requested change to the original plan.  In addition, neither party could show any contract term under either’s respective contract theory of how extra work was to be handled.  As a result, the court concluded the stand-up curb work was extra work and not controlled by a contract regardless of which contract theory was considered.  Therefore, the stand-up curbs were work outside the parties’ contract and there was no recovery available for the stand-up curbs under a breach of contract theory.

However, the Subcontractor could recover under quasi-contract or quantum meruit.  In response to the quantum meruit claim, the General argued that it did not benefit from the stand-up curbs.  The General argued the owner retained the curbs and the owner benefit from them.  The court noted that in the construction context if the owner has already paid the general contractor, then the owner is not unjustly enriched. 

As an additional defense, the General argued that it was not paid by the owner for the stand-up curbs because the Subcontractor did not provide adequate information to allow the General to ask for a change order from the owner.  The court noted that the Subcontractor was not obligated to provide this information to the General and the General could not now shift that obligation to the Subcontractor. 

To recover under quantum meruit, the Subcontractor needs to show only that the General requested and accepted the benefit of the materials or services.  Recovery is not dependent upon a finding that the General retained the benefits.

Last of all, the court concluded that even though recovery was allowed under quantum meruit and the General contested liability, prejudgment interest could be awarded.  The Subcontractor had invoiced the General for the work and the General could have concluded the fair market value of the stand-up curbs.  That would constitute the liquidation of the Subcontractor’s demand for payment.  This would be sufficient to allow the award of interest.