Title: Kashmir Corp. v. Patterson

State: oregon

Issuer: Oregon Supreme Court

Document:

616 P.2d 468 (1980)
289 Or. 589
The KASHMIR CORPORATION, an Oregon Corporation, Petitioner,
v.
James H. PATTERSON and Norma Patterson, Respondents.
No. 101,896; CA 12100; SC 26649.

Supreme Court of Oregon.
Argued and Submitted March 5, 1980.
Decided September 10, 1980.
*469 J.P. Harris II, Salem, argued the cause and filed the briefs for petitioner. With him on the petition for review was Mark K. Grider, certified law student.
Michael J. Martinis, Salem, argued the cause for respondents. With him on the brief was Norman F. Webb, Salem.
Before DENECKE, C.J., and TONGUE, HOWELL, LENT, PETERSON and TANZER, JJ.
DENECKE, Chief Justice.
This is an action by the plaintiff builder against the defendant homeowners for moneys allegedly remaining due for the construction of a home. The builder brought his action in two counts, one for moneys remaining due under an express, written contract, and the other for the reasonable value of services rendered in building the home. Upon the owners' motion, the trial court struck the builder's reasonable value count. A jury returned a verdict against the builder and for the owners on their counterclaims. The builder appealed to the Court of Appeals contending that the trial court erred in striking the reasonable value count. The Court of Appeals affirmed. 43 Or. App. 45, 602 P.2d 294 (1979). We granted review and we affirm.
A claim for the reasonable value of goods or services is sometimes referred to as a claim in quasi contract or a claim for quantum meruit. It is not a claim based upon an express contract. Rather, it is a claim which the law will allow although the claim could not be based upon an express contract. It is a remedial device which the law has formulated to permit recovery for services or materials from a party even though under the law of express contracts that party would not be obligated to pay. Derenco v. Benj. Franklin Fed. Sav. and Loan, 281 Or. 533, 557, 577 P.2d 477, cert. den. 439 U.S. 1051, 99 S. Ct. 733, 58 L. Ed. 2d 712 (1978); Schroeder v. Schaeffer, 258 Or. 444, 466, 483 P.2d 818, 477 P.2d 720 (1971).
The distinction between recovery upon the contract and upon a quasi contractual or a quantum meruit basis is stated in Turner v. Jackson, 139 Or. 539, 548, 4 P.2d 925, 11 P.2d 1048 (1932):
To the same effect 3A Corbin, Contracts § 710, p. 342.
We have frequently held that a plaintiff may plead alternatively on an express contract and in quantum meruit, and that the plaintiff cannot be required to elect upon which theory plaintiff will rely. Brackett, Exec. v. U.S. Nat. Bank, 185 Or. 642, 652, 205 P.2d 167 (1949), and cases cited therein. The reason why the plaintiff need not elect is explained in State v. Montag, 132 Or. 587, 595, 286 P. 995 (1930):
Our decision in this case does not overturn this well established rule.
In the present case, when the builder prepared his complaint, he could not be certain what the position of the defendant would be. The builder probably knew that the owners would contend the builder had not satisfactorily completed his contract but the builder probably did not know whether the owners were going to contend the builder was not entitled to recover on the contract because he substantially failed to complete the contract. For this reason the builder had the right to allege a count based upon the express contract and one based upon quasi contract.
When the owners filed their answer, however, the issues were narrowed. The owners admitted they entered into a contract with the builder whereby the builder agreed to build a house on a cost plus basis at an approximate cost of $66,800. The answer also alleged that the defendants paid the builder $65,000 and that the unpaid balance of the contract price represented cost incurred by the homeowners to complete the construction of their house. The owners also asked for attorney fees as provided by the contract. It is clear from the allegations of the answer that the defendants were not contending that the contract was no longer operative; rather, defendants were contending that the contract was in force but that the plaintiff failed to complete its obligation under the contract.
The contract by its terms covers the present situation in which the owners contend they can deduct from the contract price and also recover damages because the builder has not satisfactorily completed the contract.
The contract provides:
The defendants did not file their motion to strike until after they answered the complaint. At that point the validity and enforceability of the contract were no longer in issue, and the trial court correctly struck the quantum meruit count.
Feldschau v. Clatsop County, 105 Or. 237, 241, 208 P. 764 (1922), is authority for this proposition:
Affirmed.
TONGUE, Justice, specially concurring.
As stated by the majority, the decision by the court in this case does not overturn the long established rule that a plaintiff cannot be required to elect between alternative counts of express contract and quantum meruit. The opinion by the majority fails, however, to make it clear that when any doubt exists regarding the existence or enforceability of an express contract, or when the express contract fails to provide the basis for payments to be made under the contract, a plaintiff may plead alternatively on an express contract and in quantum meruit without being required to elect.
Similarly, this holding does not preclude a plaintiff from proceeding solely in quantum meruit even when the plaintiff admits to the existence and enforceability of an express contract recovering the same services. See Sinnock v. Zimmerman, 132 Or. 137, 144-45, 284 P.2d 838 (1930). In such a case, however, the terms of the contract will govern recovery. Id.
It is only when a plaintiff proceeds on alternative theories of express contract and quantum meruit, and the defendant subsequently admits to the existence and enforceability of a contract which provides the basis for payments to be made under the contract that the plaintiff may be required to elect or the count in quantum meruit stricken. Because, however, those facts are present in this case I concur in the decision by the majority.