Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Thursday, August 11, 2011

When can a Plaintiff recover in quantum meruit? When not?

When is quantum meruit available as a theory of recovery, when not?

EXPRESS CONTRACT VS. QUASI-CONTRACTUAL EQUITABLE THEORIES


Equitable theories are generally not available when the Plaintiff's claim involves contractual obligations, but there are exceptions to the express-contract preclusion of alternative non-contract theories. 

THE NATURE OF QUANTUM MERUIT AS A THEORY OF RECOVERY

Quantum meruit is an equitable and alternative theory of recovery intended to prevent unjust enrichment. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005). A cause of action for quantum meruit arises when a plaintiff establishes that it has provided a valuable service to the defendant, the defendant accepted the service, and the defendant had reasonable notice that the plaintiff expected to receive compensation. See Excess Underwriters at Lloyd’s v. Frank’s Casing Crew & Rental Tools, Inc., 246 S.W.3d 42, 49 (Tex. 2008). 
However, while a party may seek alternative relief under contract and quasi-contract theories, it generally cannot recover under quantum meruit when there is a valid contract covering the services or materials furnished and no exception applies. In re Kellogg Brown & Root, 166 S.W.3d at 740. 

THREE RECOGNIZED EXCEPTIONS TO PRECLUSION OF QM BY EXPRESS CONTRACT

The Texas Supreme Court has recognized only three exceptions to the general rule that an express contract bars recovery under quantum meruit: (1) “when a plaintiff has partially performed an express contract but, because of the defendant’s breach, the plaintiff is prevented from completing the contract”; (2) “when a plaintiff partially performs an express contract that is unilateral in nature”; and (3) in a construction contract, when a breaching plaintiff may recover the reasonable value of services less any damages suffered by the defendant if the defendant accepts and retains the benefits arising from the plaintiff’s partial performance. See Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11


None of the exceptions is applicable here. First, District 16 has not been prevented from performing any of its obligations under the contract. Second, this is a bilateral contract, and third, it is not a construction contract. It is undisputed that District 16 supplied a valuable service to District 36, and the parties do not dispute the existence of an express contract covering the emergency water services. Therefore, recovery under a breach of contract claim is available, and recovery under quantum meruit is precluded. 
Because we conclude that this theory of recovery was not available due to the existence of an express contract, we do not reach District 36’s other arguments. We hold that the trial court properly granted summary judgment against District 16 on the grounds that it could not recover under a cause of action for quantum meruit. District 16’s fourth issue is overruled.

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11