BOOE v. SHADRICK

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Docket Number

No. 221A87

Advocates

William B. Gibson for plaintiff appellant. Brinkley, Walser, McGirt, Miller, Smith and Coles, by Stephen W. Coles, for defendant appellees.

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Smart Summary

Factual and Procedural Background

The plaintiff, Irvin D. Booe, an electrical contractor, brought suit seeking damages for breach of three separate contracts related to two construction projects: Wilkes Towers and Sheraton Towers. One claim was settled prior to trial. For the remaining two claims, the plaintiff alleged verbal agreements to furnish labor, materials, and equipment on a cost plus ten percent basis, asserting balances due of $26,544.67 for Wilkes Towers and $48,011.88 for Sheraton Towers after partial payments by the defendants. Alternatively, the plaintiff sought recovery under unjust enrichment. The defendants counterclaimed, alleging breach by the plaintiff for failing to complete the projects, causing damages.

At trial, the jury found no verbal contract existed but did find that the plaintiff furnished labor and materials for which the defendants should pay. The jury awarded $26,000 and $40,500 for the Wilkes Towers and Sheraton Towers projects, respectively. The trial court granted the defendants' motion for judgment notwithstanding the verdict, entering judgment for the defendants. The Court of Appeals reversed, finding sufficient evidence to support unjust enrichment but insufficient evidence for damages, remanding for nominal damages. The plaintiff appealed to the Supreme Court of North Carolina.

Legal Issues Presented

Whether there was sufficient evidence to support the jury's award of damages for unjust enrichment in the construction dispute.
Whether the Supreme Court should exercise its discretion to order a new trial on the issue of damages.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Britt v. Britt, 320 N.C. 573, 359 S.E.2d 467 (1987)	Elements and requirements of unjust enrichment claims.	Confirmed the necessity of benefit conferred not being gratuitous or officious.
Wells v. Foreman, 236 N.C. 351, 72 S.E.2d 765 (1952)	Requirement that defendant consciously accept the benefit for unjust enrichment.	Supported the principle that unjust enrichment claims require acceptance of benefit.
Concrete Co. v. Lumber Co., 256 N.C. 709, 124 S.E.2d 905 (1962)	Contract governs over quasi contract claims; quasi contract applies only absent an enforceable contract.	Reinforced that a contract, if found, precludes unjust enrichment claims.
Johnson v. Sanders, 260 N.C. 291, 132 S.E.2d 582 (1963)	Measure of damages for unjust enrichment is reasonable value of goods and services.	Established the standard for calculating damages in unjust enrichment claims.
Environmental Landscape Design v. Shields, 75 N.C. App. 304, 330 S.E.2d 627 (1985)	Evidence sufficient to establish reasonable value of services for unjust enrichment.	Analogized to the present case to support sufficiency of plaintiff's billing and partial payment evidence.
Hood v. Faulkner, 47 N.C. App. 611, 267 S.E.2d 704 (1980)	Measure of damages for unjust enrichment.	Supported the principle regarding valuation of services and materials.
Harrell v. Construction Co., 41 N.C. App. 593, 255 S.E.2d 280 (1979), affirmed 300 N.C. 353, 266 S.E.2d 626 (1980)	Whether an invoice alone is sufficient evidence to support jury award for reasonable value.	Court distinguished this case by noting more than just invoices were presented here.

Court's Reasoning and Analysis

The Court acknowledged no dispute that the plaintiff had established a claim for unjust enrichment. The principal issue was whether sufficient evidence supported the jury's damages award. The Court applied established principles from the Restatement of Restitution and North Carolina precedent requiring that a benefit be conferred, accepted, not gratuitous or officious, and measurable.

The jury found no contract existed, meaning the plaintiff furnished labor and materials without a contractual agreement, and the defendants paid for part of those goods and services. The plaintiff's bookkeeper's testimony regarding billed amounts and payments was deemed sufficient evidence to allow the jury to determine the reasonable value of the unpaid goods and services. The Court distinguished prior cases holding that invoices alone were insufficient, emphasizing that here there was corroborating evidence in the form of prior payments at the billed rate.

The defendants' request for a new trial on damages was denied. The Court reasoned that the defendants' trial strategy, which led them to withhold evidence for tactical reasons, did not justify the exercise of discretion to grant a new trial under Rule 50(d).

Accordingly, the Court reversed the Court of Appeals' decision and remanded the case for entry of judgment consistent with the jury's verdict.

Holding and Implications

The Supreme Court of North Carolina reversed the Court of Appeals and held that there was sufficient evidence to support the jury's award of damages for unjust enrichment in the construction dispute.

The direct effect of this decision is that the plaintiff is entitled to judgment consistent with the jury's award of $26,000 for the Wilkes Towers project and $40,500 for the Sheraton Towers project. The Court declined to order a new trial on damages, thus affirming the finality of the jury's findings on value. This decision does not establish new precedent beyond reaffirming the sufficiency of evidence standards for unjust enrichment damages and the discretionary limits on granting new trials under Rule 50(d).

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IRVIN D. BOOE, D/B/A WAUGHTOWN ELECTRIC CO. v. BILLY B. SHADRICK; BOB R. BADGETT; HOUSING PROJECTS, INC.; ELLERBE MANOR APTS., LTD.; WILKES TOWERS, LTD.; SHERATON TOWERS, LTD.; UNITED STATES FIDELITY GUARANTY INS. CO.; HIGHLAND MORTGAGE CO.

1. Quasi Contracts and Restitution 2.2 — construction dispute — quantum meruit — evidence of damages sufficient There was sufficient evidence to support an award of damages by the jury in a claim for unjust enrichment arising from a construction dispute where plaintiff's bookkeeper's testimony as to what was billed for the materials and labor and the evidence of a payment for a part of it at the billed rate was sufficient for the jury to find the reasonable value to defendants of the remaining goods and services for which bills were submitted but not paid.

2. Rules of Civil Procedure 50.5; Appeal and Error 62.2 — construction dispute — request for new trial on issue of unjust enrichment — denied The Supreme Court did not exercise its discretion to order a new trial in a construction dispute after holding that there was sufficient evidence of damages to support a jury award for unjust enrichment where defendants alleged that they had not presented evidence of unjust enrichment after the trial court reserved a ruling on their motion for a directed verdict at the close of plaintiffs evidence for fear of making plaintiffs case for him. N.C.G.S. 1A-1, Rule 50(d).

Justice MEYER dissenting.

Justice MITCHELL joins in this dissenting opinion.

This is an action in which the plaintiff sought damages for breach of three separate contracts. One of the claims was settled before trial. In each of the other claims the plaintiff alleged he was an electrical contractor who had made a verbal contract with the defendants to furnish labor, material and equipment and to install the electrical system in a project for the defendants. One of the projects was known as Wilkes Towers and the other was known as Sheraton Towers. The plaintiff alleged that on each project the agreement was that the work would be done and material furnished on the basis of cost plus ten percent. The plaintiff alleged that he was owed $222,058.73 on the Wilkes Towers project of which $195,514.06 had been paid, leaving a balance due of $26,544.67. The plaintiff alleged that he was owed $362,534.90 for the Sheraton Towers project of which $314,523.00 had been paid, leaving a balance due of $48,011.88. For each claim the plaintiff alleged an alternative claim for unjust enrichment.

The defendants filed an answer and counterclaim in which they alleged that for each of the projects the parties had entered into a contract which the plaintiff had breached by failing to complete to the damage of the defendants. The defendants prayed for damages against the plaintiff.

The plaintiff's evidence showed that the plaintiff and the defendants agreed the plaintiff would furnish the materials and labor and would install the electrical systems on the two projects and would be paid on a cost plus basis. The defendants made payments totaling $195,514.06 for the Wilkes Towers project and $314.523.02 for the Sheraton Towers project. The work was approximately 95% complete on the two projects when the defendant refused to make further payments. The plaintiff completed each project. The bookkeeper for the plaintiff testified material and labor costs on the Wilkes Towers project totaled $200,020.03 to which the plaintiff added ten percent for overhead making the total $222,058.73 of which the defendants had paid $195,514.06 leaving a balance due of $26,544.67. She testified that on the Sheraton Towers project the labor and material costs were $329,577.19 to which overhead costs of $32,957.71 had been added for a total of $362,534.90. The defendants had paid $314,523.02 of this amount, leaving a balance due of $48,011.88.

The defendants' evidence was that the plaintiff had agreed to do both projects for a fixed amount. The plaintiff had breached the contract by not completing either of the projects causing substantial damage to the defendants.

The court submitted issues to the jury as to whether there was a verbal cost plus contract and whether there was a verbal contract to do the work and furnish the materials for a fixed fee for each project. The jury answered these issues in the negative. The court also submitted issues for each project as to whether the plaintiff had furnished labor and material under such circumstances that the defendant should be required to pay for them. The jury answered these two issues in the affirmative. The jury awarded $26,000.00 in damages for the Wilkes Towers project and $40,500.00 in damages for the Sheraton Towers project.

The court granted the defendants' motion for judgment notwithstanding the verdict pursuant to N.C.G.S. 1A-1, Rule 50(b)(1) and entered a judgment for the defendants. The plaintiff appealed to the Court of Appeals which reversed the trial court and held that there was sufficient evidence on the claim for unjust enrichment to enter a verdict for the plaintiff. The Court of Appeals held, however, that the plaintiff did not present sufficient evidence to support a judgment for damages and remanded the case for a judgment of nominal damages. Judge Phillips dissented and the plaintiff appealed to this Court.

WEBB, Justice.

No question has been raised on this appeal as to the plaintiff's having introduced sufficient evidence to establish a claim for unjust enrichment against the defendants. The sole question on this appeal is whether there is sufficient evidence to support an award of damages by the jury. We hold there was sufficient evidence and reverse the Court of Appeals.

The Restatement of Restitution 1 lays down the general principle that "[a] person who has been unjustly enriched at the expense of another is required to make restitution to the other." In order to establish a claim for unjust enrichment, a party must have conferred a benefit on the other party. The benefit must not have been conferred officiously, that is it must not be conferred by an interference in the affairs of the other party in a manner that is not justified in the circumstances. The benefit must not be gratuitous and it must be measurable. See Britt v. Britt, 320 N.C. 573, 359 S.E.2d 467 (1987) and E. Allan Farnsworth, Contracts 2.20. In Wells v. Foreman, 236 N.C. 351, 72 S.E.2d 765 (1952), we said that the defendant must have consciously accepted the benefit. A claim of this type is neither in tort nor contract but is described as a claim in quasi contract or a contract implied in law. A quasi contract or a contract implied in law is not a contract. The claim is not based on a promise but is imposed by law to prevent an unjust enrichment. If there is a contract between the parties the contract governs the claim and the law will not imply a contract. Concrete Co. v. Lumber Co., 256 N.C. 709, 124 S.E.2d 905 (1962). Our cases hold that the measure of damages for unjust enrichment is the reasonable value of the goods and services to the defendant. Johnson v. Sanders, 260 N.C. 291, 132 S.E.2d 582 (1963); Environmental Landscape Design v. Shields, 75 N.C. App. 304, 330 S.E.2d 627 (1985); Hood v. Faulkner, 47 N.C. App. 611, 267 S.E.2d 704 (1980); Harrell v. Construction Co., 41 N.C. App. 593, 255 S.E.2d 280 (1979), affirmed, 300 N.C. 353, 266 S.E.2d 626 (1980).

The question posed by this appeal is whether there is sufficient evidence to support a finding by the jury that the reasonable value of the goods and services to the defendants for which the plaintiff has not been paid is $26,000.00 for the Wilkes Towers project and $40,500.00 for the Sheraton Towers project. In determining this question we take into account the finding of the jury that there was not a contract between the parties. This means the plaintiff furnished material and labor to the defendants for a substantial period without a contract and the defendants paid for it. This is some evidence of the value of the goods and labor furnished before the defendants stopped paying. The evidence was undisputed that the plaintiff furnished a substantial quantity of materials and labor after the last payment by the defendants. This was obviously of value. The plaintiff's bookkeeper testified to the total billing to the defendants and to the amount paid and unpaid by the defendants. We hold that her testimony as to what was billed for the materials and labor and the evidence of a payment for a part of it at the billed rate is evidence sufficient for the jury to find the reasonable value to the defendants of the remaining goods and services for which bills were submitted and no payment was made. This case is somewhat analogous to Environmental Landscape Design v. Shields, 75 N.C. App. 304, 330 S.E.2d 627, in which our Court of Appeals held that the plaintiff's bill together with the hourly rate charged by another landscape designer who worked on the job were sufficient to establish the reasonable value of the plaintiff's services. In this case we have the plaintiff's bill and the previous payment to the plaintiff in accordance with the bill.

The Court of Appeals has held that an invoice or bill alone is not sufficient evidence to support a jury award as to the reasonable value of services. Harrell v. Construction Co., 41 N.C. App. 593, 255 S.E.2d 280. We expressly declined to rule on that question in Harrell v. Construction, 300 N.C. 353, 266 S.E.2d 626. It is not necessary for us to decide this question in this case because there is more evidence than the amount billed to the defendants.

In a cross assignment of error, the defendants ask that if we hold there was sufficient evidence of damages to support the jury award, that we exercise our discretion pursuant to N.C.G.S. 1A-1, Rule 50(d) and order a new trial on the damage issue. They say that because the court reserved a ruling on their motion for directed verdict made at the close of the plaintiff's evidence, they did not offer evidence of unjust enrichment for fear of making the plaintiff's case for him. The defendants argue they should now be allowed to use this evidence. We do not believe the trial tactics employed by the defendants is sufficient reason for us to exercise our discretion and order a new trial.

For the reasons stated in this opinion, we reverse the order of the Court of Appeals and remand the case with instructions that it be remanded to superior court for the entry of a judgment in accordance with the verdict of the jury.

Reversed and remanded.