A Classic Case of Quantum Meruit

Jul 4, 2017

Illinois Appellate Court rules in favor of defendant in a quantum meruit claim.

Brandon Carter, writing in the ABA’s The Dispute Resolver, discusses an Illinois Appellate Court case, Archon Construction Co. v. U.S. Shelter , 2017 IL App (1st) 153409, No 08 CH 15325, in which a subcontractor made a claim against the general contractor in quantum meruit for unpaid additional work performed after the project was complete.

Archon, an underground utility contractor, was hired by U.S. Shelter, a “developer/builder to install a sanitary sewer and storm water system” for a subdivision being built in Elgin, Ill.

The plans and specifications for the project required that the system meet local City and Illinois code requirements and that the sewer lines “be televised and tested prior to acceptance.”

The subcontract agreement gave Archon the option of using either ductile iron or PVC pipe for the sanitary sewer system. Archon’s proposal stated that the system “would be constructed exclusively with PVC pipe.”

The sewer system, constructed with PVC, “passed both an air and mandrel test whose results were accepted by local inspectors and the project engineer.

A year later the City, based upon a televised inspection of the system, “rejected the work and required that certain sections of the PVC pipe be replaced with ductile iron pipe.”

Archon did this and sent U.S. Shelter a bill for $247, 432.41 for the additional work. U.S. Shelter refused to pay this bill and Archon filed a suit based upon breach of contract and quantum meruit. The case made its way to the Illinois Appellate Court where the plaintiff agreed to “proceed solely on its quantum meruit claim.”

The Court examined the elements that must be proven in a quantum meruit claim. One of these was that “no contract existed to prescribe payment for the service.”

The court then determined that in this case the replacement of the sanitary sewer line was not “’extra work… outside of the scope of the original contract.’”

Therefore, the quantum meruit theory for recovery was not applicable.

This is a harsh, arguably unfair, decision. It is unclear why the plaintiff agreed to drop its breach of contract claim. In hindsight it was a mistake to do so.

Source—

Illinois Court rejects Subcontractor’s Quantum Meruit Claim for Extra Work due to the Existence of a Valid Contract, Brandon Carter, The Dispute Resolver, June 18, 2017.