Illinois State Bar Association Publication May 2023
“You get what you deserve.” We have all heard this phrase used. Most commonly, it has a negative connotation. When you do something wrong, “you get what you deserve.” But when expressed in Latin, the phrase presents a different coloring. The term quantum meruit means “as much as he deserves.” It is an expression that describes the amount that could be awarded on a contract implied in law (also called a quasi-contract) and is based on the reasonable value of the services performed. Quantum meruit can be pursued as an equitable remedy to provide restitution for unjust enrichment. It is often pleaded as an alternative claim in a breach-of-contract case so that the plaintiff may recover even if the contract is unenforceable or there is no contract.
An interesting application of this principle can be found in the case of Restore Construction Co., Inc. v. The Board of Education of Proviso Township High Schools, 2019 IL App (1st) 181580 (June 28, 2019).
In Restore Construction Co. v. Board of Education of Proviso Township High Schools District 209 (supra), the plaintiffs provided restoration services after a district high school was damaged by fire. The plaintiffs completed $7,271,000 worth of work pursuant to two separate agreements but were paid only $5,816,223.08. The school district refused to pay the outstanding balance of $1,428,553.90 claiming that the agreements were never properly voted on and approved by the school board. The plaintiffs brought a suit which stated counts asserting quantum meruit as a basis to recover for the value of the work performed. The school district moved to dismiss plaintiff’s quantum meruit counts, arguing that a school district cannot be held liable under a theory of quantum meruit when the contracts purporting to bind the district were void ab initio. The trial court granted the school district’s motion to dismiss the complaint, but the appellate reversed.
The issue, according to the appellate court, was “not whether the Proviso Board can be held liable under a void contract, but whether the principles that preclude the enforcement of a void contract also preclude the application of quantum meruit.” Id. at ¶ 34. According to the court, the term quantum meruit means “as much as he deserves and is an expression that describes the extent of liability on a contract implied in law (also called a quasi-contract)” Id. at ¶ 28. The court noted that “Illinois courts have held governmental units, like a school district, liable on contracts implied in law even where proper contractual forms were not followed.” Id. at ¶ 37. Citing authority, the court explained that “A contract implied in law is one in which no actual agreement exists between parties, but a duty to pay a reasonable value is imposed upon the recipient of service or goods to prevent unjust enrichment.” Id. at ¶ 39. Since the Proviso Board did not dispute that it accepted all of plaintiffs’ service without objection, it would be unjust to allow it to retain said services without paying reasonable value for them.
In order to recover under a theory of quantum meruit, a plaintiff must prove that: “(1) it performed a service to the benefit of the defendant, (2) it did not perform the service gratuitously, (3) defendant accepted the service, and (4) no contract existed to prescribe payment for the service.” Id. at ¶ 43. The court determined that plaintiffs plead facts establishing these four elements. That the agreements were void ab initio was not determined to be a bar to relief, but rather, an allegation satisfying the fourth element of the pleading standard—i.e., that no contract existed to prescribe payment for the service.
The lesson is, don’t give up. It must have been quite frustrating for the plaintiffs in this case to have obtained agreements signed by persons purportedly acting on behalf of the school district, to have performed over $7 million worth of work, to have gotten paid for almost $6 million worth of said work only to learn that the last $1.4 million would not be paid because the contracts were not voted on and approved by the school board. Should they have known better when dealing with a governmental entity that proper ratification procedures should be followed? Possibly. But the opinion also notes that plaintiffs were asked to provide “emergency mitigation services to the District” and they were advised that “the District would approve a contract…to mitigate and remediate damage from the fire.” The plaintiffs thereafter “provided emergency mitigation services.”
In the end, the plaintiffs were permitted to go forward with their suit seeking to recover the fair value of their services, and the school district was not permitted to use a procedural technicality as a way of evading their financial responsibilities. It seems like both parties in this case got what they deserved.*
*Adam Whiteman of Whiteman Law maintains a law practice in Northern Illinois concentrating on the areas of real estate, construction, and commercial litigation. [email protected]