Ensuring Definiteness in Oral Agreements and Viability of Quantum Meruit Claims Under California Law

Introduction

3074 Centreville LLC v. M.A. Cohen & Co., Inc. (Fourth Cir. Apr. 23, 2025) addresses the limits of oral partnership arrangements and the availability of restitutionary relief in the form of quantum meruit under California law. Plaintiffs–appellees Mark Webber and affiliated LLCs (collectively “Webber”) operate a series of commercial real estate ventures, including a Sensitive Compartmented Information Facility (“SCIF”) in Herndon, Virginia. Defendants–appellants M.A. Cohen & Co., Inc. and Michael Cohen (collectively “Cohen”) provided real-estate brokerage and advisory services to Webber beginning in 2009. After a dispute over whether Cohen had earned an unformalized 20% equity or profit‐sharing interest in the Herndon project, Webber sued for a declaration that no such interest existed. Cohen counterclaimed for breach of contract, promissory estoppel, and quantum meruit. The district court granted summary judgment to Webber on all counts. On appeal, the Fourth Circuit affirmed summary judgment on the contract and promissory-estoppel claims but vacated the summary judgment ruling on quantum meruit, finding genuine factual disputes warrant further proceedings.

Summary of the Judgment

The Fourth Circuit’s unpublished opinion, authored by Judge Benjamin, applied California law to evaluate:

Breach of Contract: The court held there was no enforceable oral contract because the parties never reached a “meeting of the minds” on material terms—percentage interest, form of interest (equity vs. profit share), scope of services, and conditions for payment. Webber’s September 2017 email, which described his draft agreement as an “offer” to become partners, objectively refuted Cohen’s claim that an oral contract had already formed in April 2017. Summary judgment on this count was affirmed.
Promissory Estoppel: Cohen’s argument that Webber made a “clear and unambiguous” promise of a 20% stake failed because the record showed no definite promise, and any reliance by Cohen—an experienced broker and lawyer—on ambiguous handshake assurances was not reasonable. The promissory-estoppel judgment was affirmed.
Quantum Meruit: The court recognized that, separately from any contract, Cohen might recover “the reasonable value of services” if he performed under an expectation of payment once a contingency arose. Webber had paid Cohen brokerage commissions but did not pay for ancillary advisory services. Cohen’s testimony and billing practices raised genuine disputes over whether he performed extra services with an expectation of compensation, and whether Webber was unjustly enriched. The Fourth Circuit vacated the summary judgment on quantum meruit and remanded for further fact‐finding.
Statute of Limitations: The court concluded that, because Cohen’s advisory arrangement with Webber was ongoing and conditioned on partnership documentation, the statute of limitations did not begin until Webber repudiated the alleged arrangement in May 2022. Thus, Cohen’s quantum-meruit claim—filed within two years of that date—was timely.

Analysis

Precedents Cited

Henry v. Purnell (652 F.3d 524): Standard for de novo review of summary judgment and material fact disputes.
Anderson v. Liberty Lobby (477 U.S. 242) & Ausherman v. Bank of Am. (352 F.3d 896): Summary judgment requires no genuine dispute as to material facts.
Scott v. Harris (550 U.S. 372) & Witt v. West Virginia State Police (633 F.3d 272): A court may disregard self‐serving testimony blatantly contradicted by documentary evidence.
Bustamante v. Intuit, Inc. (45 Cal. Rptr. 3d 692): Under California law, an enforceable contract must be sufficiently definite to determine the scope of duties and damages.
Banner Enterprises, Inc. v. Superior Court (62 Cal. App. 4th 348): No contract exists without mutual assent on all material terms (“meeting of the minds”).
Facebook v. Pacific Northwest Software (640 F.3d 1034): A term is material if necessary to form a contract or affects the bargain’s value.
Aceves v. U.S. Bank (120 Cal. Rptr. 3d 507): Elements of promissory estoppel under California law and requirement of a clear, definite promise.
Chodos v. Borman (227 Cal. App. 4th 76): Quantum meruit requires services performed under an expectation of compensation and benefit to the defendant.
Watson v. Wood Dimension, Inc. (257 Cal. Rptr. 816) & Ferrier v. Commercial Steel Corp. (298 P.2d 555): Reasonable value of services is measured by the benefit received, and agreed‐upon price may guide that assessment.
Johnstone v. E & J Manufacturing Co. (114 P.2d 658) & Corato v. Estate of Corato (201 Cal. 155): Statute of limitations for quantum meruit begins when services terminate or the contingency triggering payment occurs.
Fox v. Ethicon Endo-Surgery (110 P.3d 914): Statute‐of‐limitations defenses are normally triable issues of fact.

Legal Reasoning

Contract Formation: Under California Civil Code § 1550, a contract requires capacity, consent, lawful object, and consideration. The court applied an objective standard to “meeting of the minds,” drawing on Banner and Bustamante. Here, Webber’s September 2017 email (calling his draft agreement an “offer”) directly contradicted Cohen’s claim that an oral partnership had already formed. Subsequent revisions and counter-drafts confirmed the parties never agreed on material points such as the percentage interest, the scope of “future services,” or whether the interest was equity or profit share. Thus, no binding oral contract existed.

Promissory Estoppel: California requires a “clear and unambiguous” promise, reasonable and foreseeable reliance, and injury. Citing Aceves, the court found that Cohen’s own proposals and the range of percentages (20% vs. 25%) showed the promise was indefinite. An experienced broker cannot reasonably rely on handshake assurances that lack firm terms. Promissory estoppel therefore fails.

Quantum Meruit: Separate from contract law, restitution in quantum meruit prevents unjust enrichment when one party renders services under an expectation of payment. Relying on Chodos and Watson, the court held that while Webber paid brokerage commissions, Cohen’s advisory work—performed on an on‐call basis, with separate retainer rates—might give rise to restitution. Genuine factual disputes remained about the extent, value, and timing of those services, precluding summary judgment.

Statute of Limitations: Under Johnstone and Corato, when services are provided on the understanding that payment is due upon a contingency (formalization of a partnership), the limitations period begins when that contingency fails or is repudiated. Webber’s May 2022 denial triggered the two-year period, making Cohen’s May 2024 filing timely.

Impact

This decision reinforces the imperative of clear, written agreements in commercial real estate and advisory contexts under California law. Practitioners should:

Document all material terms of equity or profit‐sharing arrangements in writing.
Detail the scope, duration, and compensation for advisory services in formal agreements.
Recognize that quantum meruit offers a fallback remedy for unpaid services, but genuine fact issues may arise over the parties’ expectations and the benefit conferred.
Track the date of service termination or repudiation to assess statute‐of‐limitations exposure.

Future litigants will cite this case when challenging handshake deals, ambiguous promises, and the boundaries of unjust enrichment claims.

Complex Concepts Simplified

Meeting of the Minds: Both parties must agree—objectively—on all essential terms (e.g., percentage share, type of interest, duties). A few vague discussions or emails do not suffice.
Promissory Estoppel: A non‐contractual promise that is clear, relied upon reasonably, and causes harm may be enforced to prevent injustice. But if the promise is indefinite, reliance is not justified.
Quantum Meruit: An equitable remedy that allows recovery of the reasonable value of services when no formal contract exists but one party benefits and the other expects to be paid.
Summary Judgment: A court may grant judgment without a trial if no “genuine dispute” of material fact exists and the movant is entitled to prevail as a matter of law.
Statute of Limitations: The deadline to file a quantum meruit claim usually runs from the last date services were rendered or, if payment was contingent, from the date the contingency failed.

Conclusion

3074 Centreville LLC v. M.A. Cohen & Co., Inc. clarifies that under California law:

Oral agreements must embody definite terms on all material points to be enforceable.
Ambiguous handshake promises will not support promissory estoppel absent reasonable reliance on a clear commitment.
Quantum meruit remains a viable remedy when genuine disputes exist about unpaid services and the benefit to the recipient.
Statutes of limitations in such cases may be tolled until a formal repudiation or the triggering contingency occurs.

By remanding the quantum meruit claim, the Fourth Circuit ensures that fact‐intensive inquiries into the scope and value of advisory services can proceed to trial, while reinforcing the necessity of written clarity in complex business arrangements.