Certified Fire Protection, Inc. v. Precision Construction, Inc.
128 Nev. 371, 283 P.3d 250 (2012)
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Rule of Law:
To recover under a theory of unjust enrichment or quantum meruit, a plaintiff must demonstrate that the defendant received a tangible, usable benefit from the plaintiff's services. Merely expending effort or incurring costs on behalf of the defendant is insufficient if the work performed provides no value to the defendant.
Facts:
- Precision Construction, Inc. (Precision), a general contractor, solicited bids for a warehouse sprinkler system.
- Certified Fire Protection, Inc. (Certified) submitted a bid for $480,000 to design and install the system, and Precision notified Certified it had won.
- Precision sent a subcontract to Certified, but Certified objected to several terms, including a two-week deadline for design drawings and an insurance requirement, and therefore did not sign it.
- At Precision's urging to get started, Certified hired an engineer and began drafting the sprinkler system designs without a signed contract.
- Certified submitted a progress bill for $33,575, which Precision refused to pay until the subcontract was signed.
- Certified eventually submitted the design drawings, but Precision discovered they contained errors that required correction.
- Precision terminated its relationship with Certified for failure to sign the subcontract, provide the required insurance, and for submitting incorrect designs.
- The design work performed by Certified, including the drawings and permits, could not be utilized by the replacement subcontractor hired by Precision.
Procedural Posture:
- Certified Fire Protection, Inc. filed a lawsuit against Precision Construction, Inc. in a Nevada district court (trial court) to foreclose a mechanic's lien and for damages from breach of contract, unjust enrichment, and quantum meruit.
- The case proceeded to a non-jury bench trial.
- After Certified presented its case, Precision moved for a judgment on partial findings.
- The district court granted Precision's motion, ruling that no contract existed and Certified's claims for unjust enrichment and quantum meruit failed because Precision received no benefit from the work. The court also expunged the mechanic's lien.
- Precision then moved for attorney fees, which the district court denied.
- Certified, as appellant, appealed the judgment to the Supreme Court of Nevada, and Precision, as cross-appellant, appealed the denial of its attorney fees.
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Issue:
Does a subcontractor's performance of preliminary design work, which contains errors and is ultimately unusable by the general contractor, confer a sufficient benefit to support recovery under a theory of unjust enrichment or quantum meruit when no enforceable contract exists?
Opinions:
Majority - Pickering, J.
No, a subcontractor's performance of unusable preliminary design work does not confer a benefit sufficient to support recovery under a theory of unjust enrichment or quantum meruit. The court distinguished between two forms of quantum meruit: one based on an implied-in-fact contract and the other as a remedy for unjust enrichment. The court found no implied-in-fact contract for design-only work existed because essential terms like price, scope, and time for performance were never agreed upon. For the unjust enrichment claim, recovery requires that the defendant received a benefit. Here, the evidence, including testimony from Certified's own witnesses, established that the design drawings were incomplete, incorrect, late, and ultimately useless to Precision or its replacement subcontractor. Citing precedent from Thompson v. Herrmann, the court reasoned that because Precision received no advantage or value from Certified's work, it was not unjustly enriched, and therefore Certified could not recover.
Analysis:
This decision provides a critical clarification of the dual nature of quantum meruit, distinguishing its application in implied-in-fact contract cases from its role as a remedy for unjust enrichment. It reinforces the bedrock principle that a claim for unjust enrichment is not a remedy for a party's unilateral efforts but requires proof of an actual, realized benefit conferred upon the defendant. This precedent serves as a significant warning to subcontractors who commence work without a finalized, signed contract, underscoring the financial risk they assume if the deal collapses and their preliminary work proves unusable by a successor.
