Turner v. Quinones: Contractual Compliance and the Limits of Unjust Enrichment in FHA 203(k) Home Rehabilitation Disputes

I. Introduction

Case: Turner v Quinones, 2025 NY Slip Op 06766 (App Div 3d Dept, Dec. 4, 2025)
Court: Appellate Division of the Supreme Court of the State of New York, Third Department
Judge writing the opinion: Reynolds Fitzgerald, J. (Aarons, J.P., Ceresia, Fisher and McShan, JJ., concurring)
Procedural posture: Appeal from a bench-trial judgment of Supreme Court, Sullivan County (Schick, J.)

Turner v. Quinones arises from a typical but legally intricate scenario in residential construction: a homeowner and a contractor working under a tightly structured FHA 203(k) rehabilitation loan program. The plaintiff, Cockia Turner, purchased a foreclosed, uninhabitable home in Sullivan County, financing both the purchase and rehabilitation through an FHA 203(k) loan. The defendant, MQ Quality Building & Maintenance LLC (erroneously sued as “Quality Building & Maintenance LLC”), through its member Melvin Quinones, undertook the rehabilitation work pursuant to a written contract.

The financing structure mandated oversight by a HUD-certified consultant, a staged “draw” payment structure, and a formal final inspection and “punch list” procedure before the final payment could be released. After the project neared completion, conflict arose over:

• Whether the contractor was entitled to the final draw payment despite the homeowner’s complaints about workmanship.
• Whether the homeowner could recover for alleged defective work and self-help repairs she commissioned.
• Whether the contractor could recover additional compensation under a theory of unjust enrichment beyond the contract price.

Supreme Court largely sided with the contractor, awarding:

• The entire final draw payment to defendant.
• An additional $12,500 on an unjust enrichment counterclaim.
• $8,500 to plaintiff for unreimbursed materials she had purchased.

On appeal, Turner (appearing pro se) challenged the damages awarded to the contractor and the denial of her claimed repair costs. The Third Department modifies the judgment by eliminating the unjust enrichment award, but otherwise affirms, thereby clarifying key rules on:

• The binding nature of contractually prescribed payment and warranty procedures in construction/FHA 203(k) projects.
• The narrow circumstances in which a homeowner can withhold payment or recover repair costs when the contract provides a structured mechanism for addressing defects.
• The continued force of New York’s doctrine that unjust enrichment cannot duplicate a contract claim and must be supported by specific, competent proof.

II. Summary of the Opinion

A. Factual and Contractual Background

Turner purchased a foreclosed, uninhabitable home using an FHA 203(k) loan, a product that:

• Combines purchase and rehabilitation financing into a single mortgage.
• Requires oversight by a HUD-certified consultant assigned to the project.
• Prohibits the borrower from occupying the home until the specified repairs are completed and the HUD consultant deems the property habitable.

MQ Quality Building & Maintenance LLC, through Quinones, submitted a proposal to perform the specified repairs and was approved. Turner and the company then executed a homeowner–contractor agreement that:

• Provided for five draw payments, disbursed through checks payable jointly to Turner and the contractor.
• Provided that each interim draw would be 90% of the amount requested, with 10% retained as a contingency fund for:
  • Work not performed in accordance with the contract,
  • Defective work not corrected, or
  • Failure to pay subcontractors.
• Set a procedure for final payment:
  • The contractor must contact the homeowner to request a final inspection.
  • The homeowner and contractor must conduct a final walk-through together.
  • The homeowner must provide a written “punch list” of incomplete or defective work.
  • After satisfying the punch list and obtaining the HUD consultant’s approval, the contractor requests the final draw through the same progress-payment process.
• Included a one-year warranty clause:
  • Turner had one year to notify defendant of defective work.
  • Defendant was obligated to promptly correct such defects at its own expense.

The parties successfully processed four draw requests. For each, the HUD consultant inspected the work, the lender issued a two-party check, and the contractor was paid.

For the fifth (final) draw in November 2020:

• The contractor submitted a final draw request and attempted to conduct a final walk-through with Turner and the HUD consultant, consistent with the contract.
• Instead, Turner excluded the contractor and conducted the final walk-through solely with the HUD consultant.
• Initially, the property did not pass inspection; Turner then spent $1,098.50 to remedy what she characterized as defendant’s deficient work.
• Following those repairs, the HUD consultant deemed the property satisfactory, and the lender issued the final two-party check (to Turner and defendant).
• Turner refused to pay the contractor from that check, citing issues with the quality of defendant’s work. She did not cash the check and did not remit any portion to defendant (this non-cashing is undisputed).

B. Litigation and Supreme Court Judgment

In 2021, Turner filed suit alleging, among other things:

• Breach of contract by defendant for:
  • Defective or faulty work,
  • Failure to complete additional work allegedly agreed upon,
  • Failure to reimburse her for materials she purchased, and
  • Resulting expenses she incurred to repair defendant’s defective work.

Defendant counterclaimed, asserting causes of action including:

• Breach of contract, and
• Unjust enrichment.

Following a bench trial, Supreme Court:

• Awarded defendant:
  • The entire final draw payment, and
  • $12,500 on its unjust enrichment claim.
• Awarded Turner $8,500 for materials she purchased and for which she had not been reimbursed.

Turner appealed, challenging the damage awards in favor of defendant and the denial of her claimed repair costs.

C. Holdings of the Third Department

The Appellate Division undertook the standard review of a nonjury verdict (discussed in detail below) and held:

1. Final Draw Payment The court agreed with Supreme Court that defendant was entitled to the final draw. The contractor followed the contractual procedure to the extent possible, the HUD consultant ultimately approved the work, and the lender released the funds. Turner’s unilateral refusal to endorse or negotiate the two-party check did not extinguish defendant’s entitlement.
2. Homeowner’s Claim for Repair Costs Turner was not entitled to recover damages for the cost of repairs she undertook. She had:
   • Failed to conduct a joint final inspection with defendant,
   • Failed to provide a contractual written punch list of incomplete or defective items, and
   • Failed to comply with the warranty provision by notifying defendant and giving him an opportunity to cure,
   instead hiring third parties to perform repairs. Under the contract and applying prior case law, she could not recoup self-help repair costs in this context.
3. Unjust Enrichment Counterclaim The Third Department reversed the $12,500 unjust enrichment award, holding:
   • An unjust enrichment claim is not available when it duplicates or replaces a conventional contract claim (citing Corsello v Verizon N.Y., Inc., 18 NY3d 777 [2012]).
   • Defendant’s unjust enrichment counterclaim “simply mimics” its breach of contract counterclaim.
   • Even if the claim were not duplicative, it must be dismissed for “an utter lack of proof”:
     • Defendant’s principal did not testify with specificity as to what work was done outside the FHA 203(k) contract,
     • No detailed description of tasks, labor, or materials was given,
     • The invoice relied upon was illegible, vague, and lacked a breakdown of labor and materials, rendering it insufficient to meet the burden of proof (citing Jaeger v Bellavia and Davis v CEC, Inc.).

Accordingly, the judgment was modified, on the law, by reducing the damages awarded to defendant by $12,500 (removing the unjust enrichment award), and as so modified, affirmed. The $8,500 award to Turner for unreimbursed materials stands and is not disturbed on appeal.

III. Precedents Cited and Their Influence

A. Standard of Review in Nonjury Trials

The opinion opens its legal analysis with the standard governing review of bench-trial decisions:

“When reviewing a nonjury verdict, we independently review the probative weight of the evidence, together with the reasonable inferences that may be drawn therefrom, and grant the judgment warranted by the record while according due deference to the trial court’s factual findings and credibility determinations” (Schott v Lucatelli, 239 AD3d 1125, 1126 [3d Dept 2025] [internal quotation marks and citations omitted]; see Ampower-US, LLC v WEG Transformers USA, LLC, 214 AD3d 1129, 1130 [3d Dept 2023]).

These citations establish two important points:

• The Appellate Division conducts an independent review of the evidence and may “grant the judgment warranted by the record.”
• However, the court still affords due deference to Supreme Court’s credibility assessments, recognizing that the trial judge observed the witnesses firsthand.

In Turner, this standard justifies:

• Affirming the trial court’s findings that defendant performed sufficiently to be entitled to the final draw, and
• Affirming the determination that Turner did not carry her burden to prove recoverable damages for defective work,

while nonetheless correcting a legal error in awarding unjust enrichment that is both duplicative and unsupported by proof.

B. Breach of Contract Principles

The court next invokes settled New York contract law:

“A cause of action for breach of contract requires that the plaintiff show the existence of a contract, the performance of [his or her] obligations under the contract, the failure of the defendant to perform its obligations and damages resulting from the defendant’s breach. It is well settled that a contractual agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (McCarthy Concrete, Inc. v Banton Constr. Co., 203 AD3d 1496, 1499 [3d Dept 2022] [internal quotation marks, brackets and citations omitted], lv denied 38 NY3d 913 [2022]; see Cobleskill Stone Prods., Inc. v Merchants Natl. Bonding, Inc., 223 AD3d 1021, 1023 [3d Dept 2024]).

These cases reinforce two critical propositions applied in Turner:

1. Elements of breach: Turner, as plaintiff, had to show not only defendant’s failure to perform but also her own performance under the contract and resulting damages. Her non-compliance with the punch-list and warranty procedures undercuts her ability to show full performance on her side.
2. Enforcement of clear contracts: Where the contract clearly sets out procedures (draw requests, inspections, punch lists, warranty claim process), the court must enforce those terms as written, absent ambiguity. The court does exactly that by:
   • Upholding the final draw procedure and defendant’s right to payment upon HUD approval and lender disbursement.
   • Rejecting Turner’s attempts to bypass or re-write the contractual dispute and warranty mechanisms through later litigation.

C. Contractual Procedures and the Right to Cure

The court’s refusal to award Turner damages for self-help repairs relies on prior Third Department cases that emphasize:

“[P]laintiff did not comply with the terms of the contract, including inspecting the final work with defendant, providing a punch list and complying with the warranty provision, and, instead, hired third parties to make repairs, she was not entitled to damages (see Harris v Reagan, 221 AD3d 1069, 1073 [3d Dept 2023]; LaPenna Contr., Ltd. v Mullen, 187 AD3d 1451, 1453 [3d Dept 2020]).”

Although the opinion does not detail the facts of Harris or LaPenna, it is clear that these cases stand for the principle that:

• Where a contract contains procedures for identifying and correcting defective work (e.g., punch lists, notice-and-cure provisions, warranties),
• The homeowner cannot unilaterally bypass those procedures, hire others to correct the work, and then expect to shift those costs to the original contractor, at least not without first:
  • Providing the contractor with notice of the defects, and
  • Affording a reasonable opportunity to cure in accordance with the contract.

Turner builds on this line of cases to underscore that contractually specified cure mechanisms are not merely formalities; they have substantive consequences for both entitlement to payment and the right to claim damages.

D. Unjust Enrichment and the Contract–Quasi-Contract Boundary

The court’s treatment of the unjust enrichment claim rests on the Court of Appeals’ well-known decision in:

“An unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim” (Corsello v Verizon N.Y., Inc., 18 NY3d 777, 790 [2012] [citations omitted]; accord Doller v Prescott, 167 AD3d 1298, 1301 [3d Dept 2018]).

In Turner, the Third Department finds that:

• Defendant’s second counterclaim for unjust enrichment “simply mimics” its first counterclaim for breach of contract.
• Because a valid contract governs the relationship and the same subject matter, there is no room for a parallel unjust enrichment claim.

This is a straightforward but significant reaffirmation: even if a contractor believes it has done more work or incurred additional expense, it must either:

• Bring a contract claim (including for extra work, if the contract or change order provisions allow), or
• If the work truly falls outside the scope of the contract, then it may seek quasi-contractual relief—but only if it can show that there is no governing contract on that extra work and can produce concrete proof of the value conferred.

E. Evidentiary Requirements for Extra-Contract Work or Quantum Meruit

The court also underscores evidentiary standards for claims like unjust enrichment or quantum meruit:

“[Defendant’s] member, who performed the work, did not testify specifically as to what work was performed outside of the FHA 203(k) contract, he did not provide a detailed description of the tasks that were performed or how he calculated the amount sought including a delineation of labor and materials. Instead, he relied on his invoice, which had been admitted into evidence. However, the invoice is illegible, vague and does not contain a detailed description of the tasks performed, or a breakdown of costs between labor and materials (see Jaeger v Bellavia, 172 AD3d 1501, 1502 [3d Dept 2019]; Davis v CEC, Inc., 135 AD3d 1049, 1051 [3d Dept 2016], lv denied 27 NY3d 904 [2016]).”

From the cited authorities and the court’s description, the governing rule is:

• To recover in unjust enrichment (or quantum meruit) for construction work, a contractor must provide:
  • Specific testimony identifying the extra work allegedly performed beyond the contract,
  • A detailed, comprehensible invoice describing the tasks performed, and
  • A clear breakdown of labor and materials and the method of calculation of the amount claimed.
• Vague, illegible, or generalized invoices are insufficient.

This evidentiary requirement is key to the Appellate Division’s decision to vacate the $12,500 unjust enrichment award.

IV. The Court’s Legal Reasoning

A. Entitlement to the Final Draw Payment

The contractor’s entitlement to the final draw is the first major substantive issue.

Under the contract:

• For each progress payment (including the final draw), the procedure is:
  1. Contractor notifies the homeowner that it is requesting payment.
  2. Homeowner notifies contractor of any concerns.
  3. The parties submit the request to the lender.
  4. The HUD consultant inspects the work.
  5. If the work meets the required standards, the lender issues a two-party check to homeowner and contractor.
• The final payment required an additional step:
  • A joint final inspection with both plaintiff and defendant present,
  • Provision by the homeowner of a written punch list of incomplete or defective items,
  • Completion of those items prior to the final request for payment.

The court finds:

• Defendant attempted to comply with the final-payment procedure by:
  • Submitting the request for final payment, and
  • Attempting to arrange the required joint inspection with Turner.
• Turner instead conducted the final walk-through with the HUD consultant alone.
• After some remediation (for which Turner paid approximately $1,098.50), the property passed inspection and the lender released the final two-party check.

The crucial point is that HUD’s approval and the lender’s disbursement under the contractually mandated process triggered defendant’s right to payment. Turner’s unilateral refusal to endorse or deliver the funds did not negate that right. On an independent review of the record, the Appellate Division agrees with Supreme Court that:

“[D]efendant was entitled to the final draw.”

The homeowner’s grievances about workmanship, even if sincere, had to be pursued within the contractual structure—through punch lists and the warranty process—not by withholding contractually earned funds after the HUD consultant and lender sign-off.

B. Denial of Turner’s Damages for Repairs

Turner’s primary complaint on appeal is that the lower court failed to award her damages for:

• Costs incurred in repairing alleged faulty or incomplete work by defendant, and
• Other consequences of defendant’s supposed breach.

The Appellate Division emphasizes Turner’s failure to follow the contract:

• No joint final inspection with defendant.
• No written punch list provided to defendant.
• No use of the one-year warranty process (no timely notice and opportunity for defendant to cure).
• Instead, Turner hired third parties to effectuate repairs.

Applying Harris and LaPenna, the court effectively treats these contract provisions as conditions to recovery for defective work. In other words, when:

• A contract expressly establishes:
  • A method for inspecting and documenting incomplete or defective work (punch list), and
  • A warranty scheme requiring notice and giving the contractor the opportunity to fix problems,
• And the homeowner disregards those mechanisms and proceeds directly to self-help repairs,

then the homeowner generally cannot recover those repair costs from the contractor.

The court’s conclusion is categorical in this case:

“[A]s plaintiff did not comply with the terms of the contract … and, instead, hired third parties to make repairs, she was not entitled to damages.”

This does not mean that every deviation from procedure will always bar recovery in all future cases. But here, where the contract’s mechanisms were clear, plaintiff’s noncompliance was wholesale, and the court found no proof of damages within the contractual framework, the result is that she bears the cost of her unilateral remedial measures.

C. Rejection of the Unjust Enrichment Counterclaim

Defendant’s unjust enrichment claim sought payment over and above the amounts recoverable under the written contract, ostensibly for additional or extra work. The Appellate Division’s rejection of this claim works on two levels:

1. Duplicative of Contract Claim

First, per Corsello and Doller, an unjust enrichment claim is unavailable when it “simply duplicates, or replaces, a conventional contract or tort claim.” Here:

• Defendant’s answer and counterclaims show that the unjust enrichment theory mirrored the breach of contract claim in substance.
• Defendant was not alleging a completely separate course of dealings outside the contract; it was seeking extra compensation for the same project governed by the FHA 203(k) contract.

Therefore, as a matter of law, the unjust enrichment claim was improper because:

• The parties had a valid, enforceable contract covering the work.
• The same subject matter (rehabilitation of the property) was at issue.

2. Total Lack of Proof

Second, the claim fails on the facts. The court notes:

• Defendant’s principal did not testify in detail:
  • What specific work was done outside the FHA 203(k) contract,
  • What the tasks were, or
  • How he calculated the $12,500 amount sought (no breakdown of labor vs materials).
• The invoice relied upon was:
  • Illegible,
  • Vague, and
  • Lacked a detailed description and breakdown of costs.

Under Jaeger and Davis, such documentary and testimonial deficiencies are fatal to any quasi-contract claim in a construction context. A contractor seeking extra compensation must prove:

• The specific nature of the extra or non-contract work,
• The reasonableness of the charges, and
• The benefit conferred on the homeowner.

With none of this adequately shown, the court characterizes the case as one of “utter lack of proof” and vacates the $12,500 unjust enrichment award.

V. Impact and Significance

A. FHA 203(k) Projects and Structured Contractual Regimes

While the opinion does not purport to create FHA-specific substantive law, it illuminates the interplay between:

• Federal lending program requirements (HUD consultant oversight, staged draws, habitability inspections), and
• Private contractual arrangements between homeowner and contractor.

The decision underscores:

• Where the contract aligns with the FHA 203(k) structure (joint checks, HUD inspections, progress draws, retention funds, and warranties), courts will enforce that structure strictly.
• Homeowners engaged in such projects cannot:
  • Ignore contractual punch-list and warranty mechanisms,
  • Conduct unilateral inspections, and
  • Use self-help to remedy perceived defects,
  and then expect full recovery of those self-help costs from the contractor.
• Contractors, conversely, can rely on HUD approval and lender disbursement as powerful evidence of compliance with performance standards, at least absent clear contrary evidence.

B. Contract vs. Quasi-Contract: Strategic Lessons

Turner offers two clear lessons for construction litigants:

1. If there is a contract, litigate under the contract. Contractors should understand that courts remain hostile to unjust enrichment and quantum meruit claims that overlap with or are governed by a written contract. When additional work is performed:
   • Use change orders or written amendments where possible,
   • Document the agreement as falling within contractually contemplated “extras” or modifications, and
   • Bring claims under the contract, not in quasi-contract, if the work is within the contractual relationship.
2. If quasi-contract is truly necessary, proof must be specific and detailed. Vague, global, or illegible invoices and generalized testimony about “extra work” will not suffice. Contractors should:
   • Maintain meticulous records: itemized invoices, daily logs, and clear labor/material breakdowns,
   • Be prepared to testify in detail as to the nature, extent, and value of the extra work, and
   • Demonstrate how that work falls squarely outside the contract’s scope.

C. Homeowners’ Obligations: Notice, Cooperation, and Opportunity to Cure

From the homeowner’s perspective, Turner reinforces:

• Compliance with contractual procedures is critical. Failure to:
  • Participate in joint final inspections,
  • Provide written punch lists, and
  • Invoke contractual warranties properly,
  can significantly undermine claims for defective work.
• Right to cure must generally be honored. Where a contract grants the contractor a right or obligation to correct defects, the homeowner must usually:
  • Notify the contractor, and
  • Allow a reasonable opportunity to fix the defects,
  before hiring others and seeking to hold the original contractor financially responsible.
• Withholding payment can be risky. Especially in a 203(k) context, where:
  • HUD consultant approval and lender disbursement are central, and
  • The final payment is structured as a two-party check,
  refusing to endorse or deliver funds may not only fail to resolve quality disputes but also expose the homeowner to judgment for breach of the payment provisions.

VI. Clarifying Complex Concepts and Terminology

A. FHA 203(k) Loan

An FHA 203(k) loan is a federal program that allows a homebuyer to finance both the purchase and rehabilitation of a property in a single mortgage. Key features include:

• A HUD-approved consultant oversees the scope, quality, and progress of the work.
• Funds for rehabilitation are escrowed and released in stages (draws) after inspections.
• The borrower typically cannot occupy the property until the HUD consultant verifies that the property meets habitability standards.

B. Punch List

A punch list is a written document prepared in the final stages of a construction project listing:

• Incomplete work,
• Minor defects or corrections needed, and
• Other items required to achieve full completion.

In Turner, the contract required the homeowner to provide such a list during the joint final inspection. The absence of a punch list deprived defendant of a contractual opportunity to correct alleged deficiencies.

C. Retainage / Contingency Fund

The contract set aside 10% of each draw as a contingency fund (retainage). This fund served several purposes:

• Ensuring funds would be available to:
  • Address work not performed in accordance with the contract,
  • Fix defective work not corrected, or
  • Cover unpaid subcontractors.
• Providing leverage to ensure completion and quality.
• If unused, the contract required the fund to be remitted to the contractor with the final payment (FN 4).

This mechanism further illustrates that the contract had built-in protections for defects and non-performance—another reason the court insisted that parties abide by the contract instead of resorting to ad hoc arrangements.

D. Warranty Provision

The one-year warranty in the contract required:

• Turner to notify defendant of any defective work within the warranty period, and
• Defendant to promptly correct such defects at its own expense.

Warranty clauses like this provide an orderly, cooperative framework for resolving post-completion issues. In Turner, plaintiff’s failure to invoke that framework (and her choice instead to hire third parties) was central to the court’s decision to deny her damages.

E. Unjust Enrichment (Quasi-Contract)

Unjust enrichment is an equitable doctrine that allows a party to recover the value of a benefit it conferred on another, when:

• No valid contract governs the transaction, and
• It would be unjust to allow the recipient to retain the benefit without paying for it.

Crucially, unjust enrichment is a fallback remedy. Under Corsello, it cannot be used where:

• A valid, enforceable contract exists, and
• The contract covers the subject matter at issue.

In Turner, because the rehabilitation project was thoroughly governed by a written contract, defendant could not use unjust enrichment to claim more than the contract allowed—especially not with deficient proof.

VII. Conclusion and Key Takeaways

Turner v. Quinones is not a radical departure in New York law, but it is a clear and instructive application of several important principles at the intersection of construction law, FHA 203(k) projects, and contract/quasi-contract doctrine.

The key takeaways are:

1. Contractual procedures matter. Where a construction contract—and particularly an FHA 203(k)-based contract—sets out specific steps for inspections, punch lists, payments, and warranties, courts will:
   • Enforce those procedures according to their plain meaning, and
   • Penalize parties who unilaterally disregard them, especially when seeking damages or withholding payment.
2. Homeowners must give notice and an opportunity to cure. Failing to:
   • Engage in a joint final inspection,
   • Provide a written punch list, or
   • Use the contractual warranty procedures,
   can bar recovery of self-help repair costs, as it did for Turner.
3. Contractors can rely on contractual and HUD processes, but must still prove extras. Defendant was entitled to the final draw after HUD and lender approval, but could not obtain extra compensation without:
   • Showing that the extra work lay outside the contract’s scope, and
   • Providing detailed, legible, and itemized proof of that extra work.
4. Unjust enrichment is not a backdoor around the contract. When a written contract covers the subject matter, unjust enrichment claims that duplicate contract claims will be dismissed, as reaffirmed here with explicit reliance on Corsello.
5. Evidence quality is decisive in quasi-contract claims. Vagueness, illegible invoices, and lack of detail are fatal to unjust enrichment or quantum meruit recovery, reinforcing the need for meticulous documentation in construction practice.

By modifying the Supreme Court’s judgment to excise an improperly granted unjust enrichment award while otherwise affirming the contract-based dispositions, the Third Department sends a consistent message: in construction disputes—especially those embedded in structured federal lending programs—the contract is king, and both sides ignore its procedures at their own peril.