What's the difference between quantum meruit and unjust enrichment?
The Virginia Supreme Court explains.
Musgrove Construction Co. v. Young (Va. Apr. 9, 2020)
A man owns a construction company. The company owns a dump truck. The man’s son asks to borrow the truck to haul some logs to make some money on the side. The man agrees. Uh-oh.
The son gets in an accident, rolling the truck and spilling the logs. There’s only one towing company in the county equipped to handle that sort of accident.
Without the man or son asking, the towing company shows up, rights the dump truck, restacks the logs, tows the truck away, and sends the construction company a bill, which the construction company refuses to pay. Can the towing company recover under the doctrines of quantum meruit or unjust enrichment?
Virginia Supreme Court: Quantum meruit isn’t available, but unjust enrichment is.
Quantum meruit (Latin, “as much as he has deserved”) applies when one person asks another for services, but for some reason an express contract isn’t formed.
For example, “quantum meruit is available when (1) the parties contract for work to be done, but the parties did not agree on a price, (2) the compensation mentioned is too indefinite, (3) there is a misunderstanding as to the price to be paid, or, (4) in some instances, the contract is void and of no effect.”
In these instances, the plaintiff’s remedy “is an award of damages amounting to the reasonable value of the work performed,” that is, “the reasonable value of the services provided.”
Here, however, the construction company didn’t ask the towing company for services, so quantum meruit isn’t available.
When the defendant hasn’t asked the plaintiff for the services, the plaintiff’s claim is not for quantum meruit, but unjust enrichment.
Unjust enrichment has three elements, the Virginia Supreme Court explains: “(1) plaintiff conferred a benefit on defendant; (2) defendant knew of the benefit and should reasonably have expected to repay plaintiff; and (3) defendant accepted or retained the benefit without paying for its value.”
In these instances, the plaintiff’s remedy “is limited to the benefit realized and retained by the defendant.”
Here, the towing company is entitled to relief under a theory of unjust enrichment, but only to the extent that the construction company was benefited. Thus, for example, the towing company can recover its charges for righting the dump truck and towing it from the scene. And the towing company can recover the charges for storing the truck, but only up to the truck’s salvage value (since the evidence showed that the construction company was not benefited beyond that amount). The towing company also can’t recover the charges for picking up the spilled logs; the son wasn’t on company business, and the construction company wasn’t benefited by the logs being picked up.
In Musgrove Construction Co., the Virginia Supreme Court identifies two differences between quantum meruit and unjust enrichment.
First, quantum meruit applies if the defendant has asked for the services. If the defendant hasn’t, unjust enrichment applies.
Second, the remedies are also different. For quantum meruit, the remedy is the value of the services that the plaintiff provided. For unjust enrichment, the remedy is the benefit the defendant realized and retained.