Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Tuesday, March 23, 2010

Express contract precludes quantum meruit, unjust enrichment claim


EXPRESS CONTRACT AND QUASI-CONTRACTUAL THEORIES OF RECOVERY INCOMPATIBLE AND MUTUALLY EXCLUSIVE


[R]ecovery under the theory of quantum meruit is prohibited if an express contract covers the services or materials for which the claimant seeks recovery. Gentry v. Squires Constr., Inc., 188 S.W.3d 396, 402-03 (Tex. App.-Dallas 2006, no pet. ).

Here, the jury
found the parties had an agreement that covered the services and materials in this case. In its responsive brief, Builders Carpet asserts that Truly v. Austin, 744 S.W.2d 934, 937 (Tex. 1988), provides for an exception that allows “a breaching plaintiff to recover in quantum meruit” in building or construction contracts. Here, however, the jury found Builders Carpet did not breach the contract; consequently, the exception does not apply. Because Builders Carpet cannot recover under a quantum meruit theory as a matter of law, the jury's answers to those questions were immaterial and should have been disregarded. See Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994) (“A question is immaterial when it should not have been submitted, or when it was properly submitted but has been rendered immaterial by other findings.”); Basic Cap. Mgmt. v. Dynex Comm'l, Inc., 254 S.W.3d 508, 513 (Tex. App.-Dallas 2008, pet. granted ) (same).

Generally speaking, when a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory, such as unjust enrichment. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000); DeClaire v. G & B Mcintosh Family Ltd. P'ship, 260 S.W.3d 34, 49 (Tex. App.-Houston [1st Dist.] 2008, no pet.). This is because parties should be bound by their express agreements, and when a valid agreement already addresses the matter, recovery under an equitable theory is generally inconsistent with the express terms of the agreement. Conoco, 52 S.W.3d at 684; see also Edwards v. Mid- Continent Office Distribs., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied) (“The doctrine of unjust enrichment applies the principles of restitution to disputes that are not governed by a contract between the parties.”).

The Texas Supreme Court, however, has recognized an exception to this rule when overpayment was made under a valid contract. Sw. Elec. Power Co. v. Burlington N. R.R. Co., 966 S.W.2d 467, 469-70 (Tex. 1998).

SOURCE: 05-08-01149-CV (Dallas Court of Appeals) (3/16/10)

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