Coon v. Schoeneman

Rule of Law:

When a party's material breach of an express contract prevents the other party from completing performance, the non-breaching party may elect to treat the contract as rescinded and recover the reasonable value of their services in quantum meruit, as an alternative to suing for damages under the contract.

Facts:

• Frank Schoeneman, a lot owner, and Harold Coon, a builder, initially entered an oral agreement to build houses and split the profits three ways.
• Coon built eleven houses under the initial arrangement across two locations, Irving and Arlington.
• The parties then modified their agreement for the Arlington project: Coon would pay Schoeneman $350 per house, Schoeneman would provide the lots, and Coon would receive all the profits.
• This modified agreement included conditions that Coon could maintain five houses under construction or for sale continuously and that Schoeneman would not sell adjacent lots to competing builders.
• After Coon finished four houses in Arlington and was ready to begin a fifth, he discovered that Schoeneman had breached the agreement by selling the remaining lots to other contractors.
• Schoeneman sold the houses Coon had built but failed to pay Coon any profits or compensation for his work.

Procedural Posture:

• Harold Coon (plaintiff) filed suit against Frank Schoeneman (defendant) in a state trial court.
• At trial, Coon abandoned his initial claim for a share of profits and instead sought to recover in quantum meruit for the reasonable value of his services.
• The trial court granted Schoeneman's motion to exclude evidence of the value of Coon's services.
• The trial court then sustained Schoeneman's motion for an instructed verdict, ruling in favor of the defendant.
• Coon (appellant) appealed the trial court's judgment to the Texas Court of Civil Appeals (an intermediate appellate court).