Contracts II, Pages

Blanton v. Friedberg

United States Court of Appeals for the Fourth Circuit, 1987

Facts:

Plaintiff agreed to develop defendant's land allegedly in exchange for either a 10% commission on all sales thereof or the reasonable value of his services. Defendant also agreed to pay him a 5% commission on the sale of any timber from the property.

Plaintiff invested considerable time and money in the development and arranged the sale of the timber for $417,905, but he was not paid his $20,895.25 commission. It was then discovered that the land could not be developed due to a problem with the mineral rights.

Plaintiff then convinced defendant to buy another tract of land that plaintiff also agreed to develop and sell. Plaintiff developed and claimed to have leased this and was paid $100,000 for his services, but defendant then terminated their relationship for unsatisfactory performance.

Defendant paid plaintiff a monthly salary during the year of their second contract, but denied that he agreed to pay plaintiff a commission on the developments or lease. Defendant claimed that plaintiff only made $600,000 of improvements and did not produce a lease, a claim supported by defendant's substantial payment to another realtor shortly thereafter.

Plaintiffs sued for breach of contract, fraud, and quantum meruit.

Procedural History:

District Court directed a verdict for defendant on plaintiffs' fraud claim and submitted the breach of contract and quantum meruit claims to the jury, which returned a verdict for plaintiff in the amount of $438,580.

Issue:

Can plaintiffs can recover for quantum meruit?

Rules:

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    "The measure of recovery for quantum meruit is the reasonable value of the performance . . . and recovery is undiminished by any loss which would have been incurred by complete performance . . . While the contract price may be evidence of reasonable value of the services, it does not measure the value of the performance or limit recovery. Rather, the standard for measuring the reasonable value of the services rendered is the amount for which such services could have been purchased from one in the plaintiff's position at the time and place the services were rendered." . . . "profits per se have no place in a quantum meruit recovery"

Reasoning:

Plaintiffs did not produce sufficient evidence of their services or the value thereof. While there is no problem with restitution's availability here, it must be supported by evidence. Plaintiffs' evidence is insufficient to prove the exact services they performed or the reasonable value thereof. Plaintiff'is anticipated consulting and leasing fees based upon percentages of development costs and gross rents cannot provide the sole basis for proving his damages. As plaintiffs did not actually complete their work they cannot recover for the value they would be owed if they had completed. They must also prove that their monthly payments were inadequate for their services.

Holding:

While plaintiffs can recover on their contract claims, they have not provided enough evidence to recover on their quantum meruit claims. Contract claims of $20,895 and $21,000 affirmed. Quantum meruit claims reversed and remanded for a new trial.


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