FOR PUBLICATION

ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE:

GREGORY F. ZOELLER STEVEN A. JOHNSON

Attorney General of Indiana Johnson, Rappa & Ivancevich LLC

Merrillville, Indiana

DAVID L. STEINER

Deputy Attorney General

Indianapolis, Indiana

IN THE

COURT OF APPEALS OF INDIANA

STATE OF INDIANA MILITARY )

DEPARTMENT, STATE ARMORY )

BOARD OF THE STATE OF INDIANA, )

and GOVERNOR MITCH E. DANIELS, JR., ) 

)

Appellants-Defendants, )

)

vs. ) No. 45A05-1109-PL-465

)

CONTINENTAL ELECTRIC COMPANY, INC., )

)

Appellee-Plaintiff. )

APPEAL FROM THE LAKE SUPERIOR COURT

The Honorable Jeffery J. Dywan, Judge

Cause No. 45D11-0803-PL-21

July 17, 2012

OPINION-FOR PUBLICATION

BAKER, Judge
2

The State had an agreement with a general contractor for an airport construction 

project in Gary. There was no contract between the State and one of the subcontractors. 

But the trial court erroneously determined that the State had breached a contract between 

the State and the subcontractor. In this case, the subcontractor’s remedy for any alleged 

breach in these circumstances was against the general contractor.

Additionally, the trial court erred in concluding that the subcontractor was entitled 

to recover from the State on the basis of quantum meruit. Contrary to the subcontractor’s 

contention, there was no confusion in the main contract about what was—or was not—to 

be included in the agreement. Moreover, there has been no showing that the State 

unjustly retained a benefit without having paid for it. 

Appellants-defendants State of Indiana Military Department,1 State Armory Board 

of the State of Indiana,2and Governor Mitch E. Daniels, Jr. (collectively, Indiana 

Military), appeal the trial court’s judgment in favor of appellee-plaintiff Continental 

Electric Company, Inc. (Continental Electric), on its claim against Indiana Military for

breach of contract and quantum meruit. Specifically, Indiana Military argues that the 

judgment must be set aside because it had paid the general contractor on a particular 

project in full, and that Continental Electric failed to meet the elements of a four-part test 

that relates to the entitlement of subcontractors to recover under the contract as a general 

 

1

Indiana Code section 10-16-3-1 provides that the State of Indiana Military Department administers all 

matters concerning the National Guard.

2

Indiana Code section 10-16-3-1 establishes that State Armory Board provides, manages, and cares for 

armories for the use of Indiana’s military forces.
3

contractor would. Moreover, Indiana Military maintains that Continental Electric failed 

to establish that a measurable benefit was conferred on Indiana Military and that the 

retention of alleged benefits without payment would be unjust. 

For the reasons stated above, we conclude that the trial court erred in awarding 

judgment in Continental Electric’s favor. Thus, we reverse. 

FACTS3

A Project Manual for the Indiana National Guard Limited Army Aviation Support 

Facility, including bid documents, dated June 12, 2006, was prepared by Joint Forces 

Headquarters Indiana and CSO, the architect on the project. The primary purpose of the 

document preparation to solicit bids was for the construction of an aviation facility at the 

Gary/Chicago International Airport in Gary. CSO was both the project architect and 

construction administrator for Indiana Military. 

Continental Electric is a family-owned company that specializes in electrical 

work, has had a long history of completing projects for the State of Indiana, and was 

experienced in handling the unique facets of such work. Bud Curry, a representative 

from Continental Electric, attended a pre-bid meeting on June 22, 2006. Alternate 

Number two that related to the installation of a generator at the facility was a topic of 

discussion at the meeting.

 

3 We heard oral argument on June 12, 2012, in Indianapolis. We commend counsel for their able 

presentations.
4

The Larson-Danielson Construction Company (Larson) submitted its bid of 

$15,553,120 for the primary contract and included prices for various alternatives to the 

projects on or about July 12, 2006. Larson’s bid was premised on estimates and bids that 

it had received from potential subcontractors, including Continental Electric. Continental

Electric’s bid stated that it is “pleased to offer our proposal to furnish and install the 

labor, material and equipment necessary for the electrical portion for the above project,

$1,794,660.” Tr. p.143. Under one of the alternatives known as “Alternate 2,” 

Continental Electric stated “Diesel Generator, ADD $335,000.” Tr. Ex. 4, p. 143. 

Larson subsequently provided a list of sub-contractors to CSO and Indiana Military that 

included Continental Electric, which set forth an amount of $1,794,000, for that 

company. 

When Larson submitted its bid on the project, it indicated that it understood 

Alternate No. 2 was the provision of a diesel generator as specified in the Project Manual

that included the packaged engine generators that were shown in various drawings. 

Larson’s understanding was that the Alternate No. 2 plan specifically did not include a 

concrete generator pad. Various sections of the project manual referred to incidental 

wiring and components that were needed to connect the generator at the Alternate 2 site. 

On the other hand, Indiana Military maintained that while the generator itself was 

to be bid as Alternate No. 2, the wiring and other components of the generator should 

have been part of the base bid. Prior to execution of the agreement between the Indiana 

Military and Larson and the subcontract between Larson and Continental Electric, CSO 
5

prepared a “Clarification” of the Agreement. Paragraph 4 of Clarification No. 1 stated

that

It was discussed in the prebid meeting that installation of the generator and 

all connections are to be included in the base bid. The description of 

Alternate 2 in the project manual states the concrete pad is to be provided in 

the base bid. Please clarify the intent of Alternate 2, Diesel Generator.

As discussed in the prebid meeting, the base bid shall include installation, 

final connections, startup and testing of the owner purchased generator. 

Alternate 2 shall include the generator only. Modify specifications to read 

as follows:

Section 01230 - Alternates

A. Revise Section 01230 - 3.01, B., 1. to read:

1. In Base Bid, the Owner will provide the specified generator set only.

2. In Base Bid, the Contractor shall provide complete installation of 

the owner provided generator set including the concrete generator 

pad, all conduit and cabling as shown, final connections, startup and 

testing and as described in the drawings and specifications.

Tr. Ex. 7, p. 155.

The Project Manual described Alternate No. 2, as follows:

Alternate No. 2 - Diesel Generator: State amount to be added to or deducted 

from Base Bid to provide diesel generator as specified in Section 16231, 

Packaged Engine Generators, as shown on Drawings.

1. Concrete Generator pad shall be included in base bid.

Tr. Ex. 2, p. 95-96.
6

Indiana Military accepted Larson’s bid on July 31, 2006. Thereafter, in September 

2006, Larson contracted with Indiana Military for the base contract in the amount of 

$16,525,620 and a proposal under “Alternate #1” in the amount of $972,500. 

Continental Electric maintained that it was not bound by any verbal discussion of 

Alternate No. 2 at the pre-bid meeting because that discussion was not included in the 

written meeting minutes. Sometime after August 2, 2006, Continental Electric did obtain 

a copy of Clarification No. 1, which had been prepared by Dowdle, a CSO representative, 

but Continental Electric maintained that Clarification No. 1 was different than what was 

contained in the bid documents. According to Walton, Continental Electric had not 

understood at the time of its bid that any items associated with the generator were to be 

included in the base bid.

Although the subcontract between Larson and Continental Electric was signed on 

November 10, 2006, Larson requested Continental Electric to commence work on 

October 26, 2006. Construction on the project did begin in mid-October 2006. Indiana 

Military did not dictate the means or methods of construction and did not direct anyone 

other than Larson, the general contractor with whom Indiana Military had a contract. As 

explained by John Dunning, Indiana Military’s facilities and contract officer for the 

project in question, there was no provision in the contract with Larson that placed it into 

privity with any subcontractor that Larson hired. 

Indiana Military paid Larson for all the work it performed on the project, and there 

were no outstanding claims from Larson that related to the project. All disputes between
7

Indiana Military and Larson were to be resolved under Section 5 of the main contract. 

More specifically, the contract permitted Larson to bring questions to the contracting 

officer for decision, and if Larson was dissatisfied with the response, it had thirty days to 

file an appeal to the Governor. Nothing in the contract between Indiana Military and 

Larson granted appeal rights to any of the subcontractors. 

Continental Electric did not ask to discuss with CSO what Alternate 2 included in 

the main contract until mid-December 2006. Representatives of CSO and Indiana 

Military met with Continental Electric representatives in accordance with Larson’s 

request after a construction progress meeting on January 11, 2007. CSO representatives 

explained to Continental Electric that the wiring outside the area marked as Alternate 2 

was part of the base bid and if Continental Electric disagreed, Larson was required to file 

a proposed change order that would include a detailed labor and materials breakdown. 

CSO and Indiana Military did not receive a change order from Larson or Continental

Electric regarding the conduit and wiring, and it was Dowdle’s impression that 

Continental Electric had made some type of estimate error.

On February 8, 2007, Continental Electric wrote to Larson, indicating that it had 

included all labor and materials associated with the generator in its Alternate 2 bid and 

that Continental Electric would require a change order in the amount of $207,000 because 

this was the amount above the cost for the generator quoted to Continental Electric at the 

time. 
8

At trial, testimony was presented4that the exact cost of the wiring in dispute was 

$206,350. Pursuant to the contract between Larson and Indiana Military, Larson 

submitted a Request for Information (RFI), to which CSO replied on February 23, 2007, 

as follows:

Request - Please furnish the scope of work demarcation between Base Bid 

and Alternate No. 2 - Diesel Generator. Please provide reference to all 

pertinent specifications and drawings.

Tr. Ex. 12.

In essence, CSO explained that the generator and its components were part of 

Alternate No. 2, but that everything else associated with wiring the project was connected 

with the base bid or something other than Alternate No. 2 based on the electrical site plan 

and various sections of the Project Manual. 

Larson did not dispute CSO’s explanation and Larson advised that it agreed with 

CSO’s interpretation and that it was proceeding with the work based on that explanation. 

The work was done as explained by CSO. Continental Electric submitted no change

order relating to the work on the base bid; nor did it submit any detailed document 

breaking down materials and labor that would have supported a change order. Tr. 206-

07, 213-15. 

On February 28, 2007, Continental Electric sent a letter to Larson, informing it 

that it did not believe that the base bid included the wiring for the generator. The State 

contracting officer explained that even though the generator was listed as an alternate, 

 

4 The testimony at the trial that commenced on August 2, 2011, is discussed infra in greater detail.
9

even if the generator was not installed, the owner would expect that the wiring to the 

generator would be installed, so that it would not need to be installed at a later time. 

Moreover, a generator was never actually considered to be an item that would not be 

installed because installation was required to permit occupancy of the facility, so that it 

was not an alternate except in the sense of how the project was bid. The generator was an 

essential component of the project, as it was part of an emergency backup system. 

It was undisputed that Continental Electric was paid for purchasing the generator 

under a separate contract, and there was no evidence that Continental Electric was not 

fully compensated as specified in that separate contract. In fact, the generator was 

installed by Continental Electric before the construction of the facility was completed.

Thomas Walter, a vice president and owner of Larson, testified that only Larson, 

and not Continental Electric, had appeal rights under Larson’s contract with Indiana 

Military. In the subcontract between Larson and Continental Electric, Walter indicated 

that in Larson’s view, Continental Electric was given a choice regarding disputes. It was 

Larson’s understanding of its subcontract with Continental Electric that with regard to 

Continental Electric’s concerns regarding conduit and wiring, Continental Electric could 

permit Larson to pursue dispute resolution under the prime contract, or Continental 

Electric could seek mediation or arbitration of claims with Larson. 

At Continental Electric’s request, Larson did submit an RFI to CSO asking it to 

answer a question about what was included in Alternate Number 2. Larson did not 

consider the matter to be in dispute at that time. When CSO explained what was included 
10

in Alternate 2, Larson agreed with that interpretation and sent the following Project 

Memorandum to Continental Electric on March 7, 2007:

As a follow-up to our telephone discussion yesterday morning, I offer the 

following: The Architect has provided an interpretation of the documents 

relative to the demarcation between base bid and Alternate No. 2 work in 

the response received to [Larson] RFI No. 67 (see attached) forwarded to 

Continental via email on 3.2.07. [Larson] has spoken with two other 

electrical subcontractors from whom bid proposals were received on bid

day for this project. Both provided interpretations of the bid documents 

identical to the Architect’s. Larson-Danielson has reviewed the documents 

and agrees with the interpretations provided by the Architect.

The contractual mechanism (Larson-Danielson RFI No. 67) to define the 

scope of work with regard to this issue has been utilized. Larson-Danielson 

is not required to submit a claim to the Owner which we believe to be 

untenable. As stated above, Larson-Danielson agrees with the 

interpretation provided by the Architect and disagrees with the assertions 

made by Continental Electric regarding this work. Therefore, this 

represents a dispute between Larson-Danielson (Contractor) and 

Continental Electric (Subcontractor) and is governed by the provisions in 

Paragraph 6.1.6 of the subcontract agreement.

As provided in Paragraph 6.3 of the subcontract agreement your firm is 

directed to proceed with performance of the Subcontract Work. Please feel 

free to contact me if you should have questions.

Signed David Hehemann (for Larson)

Tr. Ex. 2.

Continental Electric did not seek mediation or arbitration under paragraph 6.1.6 of 

the subcontract. Instead, at Continental Electric’s urging, Larson asked CSO to forward a 
11

claim to the Contracting Officer to decide what was included in Alternate No. 2. The 

Contracting Officer agreed with the CSO’s interpretation and did not grant the claim. 

When Continental Electric received Larson’s letter informing it that it agreed with 

the CSO, Walton, then a Vice-President for Continental Electric, wrote to Larson setting 

out Continental Electric’s interpretation that Alternate No. 2 did not clearly include the 

conduit and wiring from the facility to the generator and stating that a change request 

should be submitted to the owner. 

On April 16, 2007, Hehemann—Larson’s representative—replied by email to 

Walton of Continental Electric and suggested that Continental Electric attempt to work 

out this issue directly with the owner. However, Hehemann also stated that “prior to 

addressing any claim directly to the Owner please outline, in detail Continental Electric’s

plan and the contract language that would allow such a claim procedure.” Tr. Ex. 15, p. 

229. Continental Electric responded to Larson on May 4, 2007, asking Larson to submit 

Continental Electric’s dispute to the contracting officer in accordance with Article 5 of 

the subcontract.

On May 18, 2007, Larson asked the State Contracting Officer (then John Dunning) 

to render a decision regarding the scope of Alternate No. 2 at the request of Continental

Electric. Dunning submitted his decision on June 1, 2007. In material part, Dunning’s 

decision provided that 

After reviewing the documents, and the presented discussions, it is the 

opinion of the State Contracting Officer that Alternate #2 to the base bid for 

the Limited Army Aviation Support Facility consists of the providing, and 
12

installation, of a generator and its immediate components (i.e. battery 

charger, tank, muffler, exhaust pipe, enclosure, annunciator, and battery). 

Alternate #2 does not include the wiring between the Limited Army 

Aviation Support Facility and any generator that might be installed.

E002 clearly defines Alternate #2. Alternate #2 is represented by an 

encircling line that is clearly connected to a labeled box. The wiring is 

clearly outside of the encircling line, and as such is not part of Alternate #2. 

Since the concrete generator pad is inside the encircling line, special 

emphasis was made to ensure that the contractor was aware that the 

concrete generator pad was to be provided regardless of any decision 

concerning Alternate #2.

Tr. p. 232 (emphasis added).

As set forth above, Alternate No. 2 was defined in the Project Manual, and under a 

particular section, Alternate Number 2 did not include the conduit, wiring, etc., from the 

facility to the generator pad. Part 2.11(F) of the section referred only to wiring within the 

area of the generator pad. Dunning’s decision was consistent with Larson’s bid, which 

described Alternate No. 2 as only “Diesel Generator: Provide diesel generator as 

specified in Section 16231, Packaged Engine Generators, and as shown on Drawings 

C106, E002, and E100” and “Concrete generator pad shall be included in base Bid.” Tr. 

p. 289. 

Dunning also explained that while there was a range of bids relating to Alternate 

No. 2 that did not mean that the subcontractors had misunderstood the bid documents in 

the Project manual. Specifically, he pointed out that contractors might vary their bids for 

a variety of reasons relating to their particular strategies in the bidding process to attempt 

to entice the contracting party to use their services. It was explained that the wiring for 
13

the generator was separate from the generator itself, with the owner designating the 

wiring for the generator as part of the base project, while the generator itself was an 

alternate. 

After Dunning submitted his written decision on June 1, 2007, Larson did not 

indicate that it disputed his decision, and it did not file an appeal with the Governor. 

However, Continental Electric appealed to the Governor within the thirty-day limit under 

the main contract. The Office of the Adjutant General responded to Continental 

Electric’s appeal with a letter, dated August 30, 2007, informing Continental Electric that 

it did not have the authority to appeal to the Governor because there was no contract 

between Indiana Military and Continental Electric, and only Larson, the general 

contractor, had a right to appeal to the Governor in accordance with Larson’s contract 

with Indiana Military. The letter also stated that:

[Larson] has privity of contract with [Indiana Military] and has the right to 

use this process if a dispute exists. Representatives from Larson indicate 

that no dispute exists from them and that no appeal is forthcoming from 

them. The appeal file[d] with the Governor is moot at this point as there is 

no legitimate legal foundation upon which to file such an appeal. The only 

appropriate entity that has privity of contract to file such an appeal is the 

General Contractor, Larson. . . . 

Ex. 20.

On March 10, 2008, Continental Electric filed its complaint in the trial court 

against Indiana Military, claiming that it had performed all work under the contract and it 

had not been paid all of the funds that were owed to it. Thus, Continental Electric 

claimed that Indiana Military breached the contract and was owed an amount of 
14

$207,000, plus costs, and post and pre-judgment interest. Continental Electric also made 

a claim for quantum meruit, contending that Indiana Military accepted the benefits that it 

provided, despite the opportunity to decline them, and that Continental Electric had not 

been paid for its work.

Finally, Continental Electric claimed that it was denied due process because the 

main contract provided a remedy and appeals process to it and Governor Daniels’s 

refusal to respond to the appeal constituted a denial of due process. On the other hand, 

Continental Electric claimed that if the response from the Adjutant General constituted 

the response from Governor Daniels, it was denied “fair process” because it was left with 

no forum to assert its claim and no remedy was available. Appellants’ App. p. 26.

A bench trial was held on August 2 and 3, 2011. At trial, Dunning testified that 

even though the generator was listed as an alternate and was not installed, the owner 

would expect that the wiring to the generator would occur so that it would not need to be 

installed at a later time. Moreover, a generator was never actually considered to be an 

item that would not be installed because the placement of such an item was required to 

permit occupancy of the facility, so that it was not an alternate, except in the sense of 

how the project was bid. 

Dunning further testified that any responsible electrical contractor would know 

that the generator was going to be installed. And the generator was an essential 

component of the project because it was part of an emergency backup system. It was 

undisputed that Continental Electric was paid for purchasing the generator in question 
15

and installing it pursuant to separate contract with another company, and there was no 

evidence that Continental Electric was not fully compensated as specified in that separate 

contract. This generator was installed by Continental Electric before the construction of 

the facility was completed.

It was Larson’s understanding of its subcontract with Continental Electric that 

with regard to Continental Electric’s concerns regarding conduit and wiring, Continental

Electric could permit Larson to pursue dispute resolution under the main contract as 

Larson deemed appropriate, or Continental Electric could seek mediation or arbitration of 

claims with Larson. At Continental Electric’s request, Larson did submit an RFI to CSO, 

asking it to answer a question about what was included under Alternate No. 2. Larson 

did not consider the matter to be in dispute at that time, and when CSO explained what 

was included in Alternate No. 2, Larson agreed with that interpretation and sent a Project 

Memorandum to Continental Electric explaining its position.

Continental Electric understood that it was bound by the terms of the main 

contract under paragraphs 6.1.1 and 6.1.2 pursuant to the subcontract with Larson. And 

in accordance with paragraph 6.6 of the subcontract, Continental Electric pursued an 

appeal with the Governor. As noted above, the State responded to Continental Electric’s 

appeal with a letter, dated August 30, 2007, from the Adjutant General to counsel for 

Continental Electric and informed it that it lacked the authority to appeal to the Governor 

because there was no contract between Indiana Military and Continental Electric. 
16

On August 10, 2011, the trial court entered findings of fact, conclusions of law, 

and judgment, determining that Continental Electric was entitled to recover under its 

unjust enrichment claim. The trial court also found that Indiana Military was in breach of 

contract by refusing to participate in an administrative appeal. As a result, the trial court 

awarded Continental Electric a total of $206,350 plus costs. Indiana Military now 

appeals.

DISCUSSION AND DECISION

I. Standard of Review

This action was tried by the court, and findings of fact and conclusions of law 

were entered when the judgment was rendered. Where a party has requested specific 

findings and conclusions, we apply a two-tiered standard of review. Encore Hotels of 

Columbus, LLC v. Preferred Fire Prot., 765 N.E.2d 658, 661 (Ind. Ct. App. 2002). We 

must first determine whether the evidence supports the findings. Id. Then, we will 

determine whether the findings support the judgment. Id. We have previously 

determined that in reviewing the findings and judgment, we consider only the evidence 

favorable to the judgment and all reasonable inferences flowing therefrom. Albright v. 

Bogue, 736 N.E.2d 782, 787 (Ind. Ct. App. 2000).

The findings are clearly erroneous when a review of the record leaves us firmly 

convinced that a mistake has been made. Encore Hotels, 765 N.E.2d at 661. We have 

stated that a clearly erroneous finding of fact occurs “when the record contains no facts to 

support them either directly or by inference,” while a clearly erroneous judgment occurs 
17

when it applies the wrong legal standard to the properly found facts. Town of New Ross 

v. Ferretti, 815 N.E.2d 162, 166 (Ind. Ct. App. 2004). We will disturb the judgment only 

when there is no evidence to support the findings or the findings fail to support the 

judgment. Encore Hotels, 765 N.E.2d at 661. Also, we will not reweigh the evidence or 

assess the credibility of witnesses, and we will affirm the trial court unless the evidence, 

when viewed in a light most favorable to the judgment, points uncontrovertibly to an 

opposite conclusion. In re Estate of Wade, 768 N.E.2d 957, 962 (Ind. Ct. App. 2002).

II. Indiana Military’s Claims

Indiana Military argues that the trial court erred in determining that Continental 

Electric was entitled to recover damages against it because the Indiana Military had no 

contract with Continental Electric, it had fully paid Larson, and it was not unjustly 

enriched at Continental Electric’s expense.

A. Breach of Contract

In addressing Indiana Military’s breach of contract claims, we note that it is a 

fundamental proposition that the requirements for a contract or holding a party 

responsible for contract obligations is offer, acceptance, consideration, and a meeting of 

the contracting minds. U.S. Bank, N.A. v. Integrity Land Title Corp., 907 N.E.2d 616, 

622 (Ind. Ct. App. 2010).

In Ochoa v. Ford, 641 N.E.2d 1042, 1044 (Ind. Ct. App. 1994), we determined 

that 
18

[A] contract is formed by the exchange of an offer and acceptance between 

contracting parties. The failure to demonstrate agreement on essential terms 

of a purported contract negates mutual assent and hence there is no 

contract. The parties to a contract have the right to define their mutual 

rights and obligations, and a court may not make a new contract for the 

parties or supply missing terms under the guise of construing a contract. 

Also, the meeting of the minds of the contracting parties, having the same 

intent, is essential to the formation of a contract.

In Conclusion of Law Number forty, the trial court stated that “[i]n the instant 

case, Continental’s contract with Larson required that Continental utilize the dispute 

mechanism contained in Larson’s contract with the Owner” and that “Larson’s contract 

with the Owner was incorporated by reference in Continental’s contract with Larson.” 

Appellants’ App. p. 19. The trial court concluded that Indiana Military was liable to 

Continental Electric because Indiana Military refused to participate in Continental 

Electric’s administrative appeal. 

Notwithstanding these conclusions, the evidence demonstrates that Indiana 

Military was not a party to any contract with Continental Electric, had no agreement to do 

anything with Continental Electric, and there was never any meeting of the minds 

between contracting parties that would permit a recovery by Continental Electric against 

Indiana Military. Second, absolutely no provision in the contract between Indiana 

Military and Larson granted Continental Electric any appeal rights to the Governor.

More specifically, Indiana Military entered into a contract only with Larson and 

did not have any contractual relationship with any of the subcontractors that Larson hired. 

Tr. p. 274-75, 277. Indiana Military did not dictate the means or methods of construction 
19

and did not direct anyone other than Larson, the general contractor with whom Indiana 

Military had a contract. Id. at 277-78. And there is no evidence that the Indiana Military 

contract with Larson put it into privity with any subcontractor that Larson hired. Id. at 

279. Therefore, because there was no contract between Indiana Military and Continental

Electric, Indiana Military could not breach any contract term in a subcontract to which it 

was not a party and did not negotiate. That said, if Continental Electric had any claim for 

breach of contract, it was against Larson, with whom it had a contract, not Indiana 

Military with whom it had no contract.

We note that Article Six of the subcontract provides that the subcontractor was 

bound by dispute resolution procedures in the main contract. However, that does not 

mean that Indiana Military agreed that Continental Electric had any rights to appeal to the 

Governor. In our view, such a provision means that Continental Electric entered into an 

agreement with Larson whereby Larson would decide whether it would appeal to the 

Governor if Continental Electric raised any issues with Larson that might need to be 

addressed by Indiana Military. Put another way, nothing in the contract between Indiana 

Military and Larson granted any appeal rights to subcontractors under the contract 

between Larson and Indiana Military. And there was no agreement that Indiana Military 

would entertain any appeals directly from subcontractors. 

As noted above, when Continental Electric directly appealed to the Governor 

contrary to the terms of the agreement between Larson and Indiana Military, Indiana 

Military responded to the unauthorized appeal with a letter, dated August 30, 2007, from 
20

the Adjutant General to Continental Electric’s counsel that it lacked the authority to 

appeal to the Governor because there was no contract between Continental Electric and 

Indiana Military. The letter made it clear that only Larson—the general contractor—had 

a right to appeal to the Governor pursuant to Larson’s contract with Indiana Military. Tr.

p. 31; Ex. 20.

Given these circumstances, Continental Electric had no contractual basis for 

recovering against the State on a theory that the State somehow breached a subcontract to 

which it was not contracting party. In addition to the fact that there was no contract 

between Indiana Military and Continental Electric, a review of the contract between

Indiana Military and Larson shows that Indiana Military did not agree that it would 

entertain any appeals directly from subcontractors. Any appeals under the Indiana 

Military/Larson contract were required to be initiated and pursued by Larson. 

In our view, the language and intent of Section 5 of the Indiana Military/Larson 

contract was clear. Moreover, as there was no contractual relationship between Indiana 

Military and Continental Electric, there was nothing in the language that could be 

construed against Indiana Military. MPACT Constr. v. Superior Concrete Constructors, 

802 N.E.2d 901, 907-09 (Ind. 2004). Further, Continental Electric could not directly 

enforce the provisions of the contract between the State and Larson, because nothing in 

that contract gave rights to subcontractors with respect to appeals to the Governor. 

Midwest Indemnity Co. v. System Builders, 801 N.E.2d 661, 670 (Ind. Ct. App. 2004). 

The contract between Indiana Military and Larson did not indicate that it intended any 
21

benefit to subcontractors relating to appeals to the Governor, and the contract terms 

between Indiana Military and Larson imposed no duty on either Indiana Military or 

Larson in favor of the subcontractors relating to potential appeals of disputes. 

To the extent that Larson imposed some obligations on itself with respect to 

Continental Electric that related to dispute resolution, such a purported agreement did not 

include Indiana Military, and Continental Electric’s contract remedy, if any, was against 

Larson. As a result, we conclude that the breach of contract determination of the trial 

court is clearly contrary to law and should be reversed.

B. Unjust Enrichment

Because we have concluded that there was no contract between Continental 

Electric and Indiana Military upon which Continental Electric could recover, we next 

consider Continental Electric’s claims of recovery premised upon the theory of unjust 

enrichment. In Roberts v. Alcoa, Inc., 811 N.E.2d 466, 474-75 (Ind. Ct. App. 2004), a 

panel of this court explained that the “theory of recovery for unjust enrichment involves 

the existence of a quasi contract, also known as a contract implied in law.” To recover on 

a claim of unjust enrichment, the plaintiff must establish that a measurable benefit has 

been conferred on the defendant and the defendant’s retention of the benefit without 

payment would be unjust. Inlow v. Inlow, 797 N.E.2d 810, 816 (Ind. Ct. App. 2004). 

When there is a dispute between a subcontractor and a property owner, four 

criteria are evaluated to determine whether the evidence supports a judgment under a 

theory of unjust enrichment:
22

1)Whether the owner impliedly requested the subcontractor to do the work; 

2) whether the owner reasonably expected to pay the subcontractor, or the 

subcontractor reasonably expected to be paid by the owner; 3) whether 

there was an actual wrong perpetrated by the owner; and 4) whether the 

owner’s conduct was so active and instrumental that the owner “stepped 

into the shoes” of the contractor. 

State Dep’t of Natural Res. v. CCI, 860 N.E.2d 651, 653 (Ind. Ct. App. 2007). 

Here, the undisputed evidence establishes that the State fully compensated Larson 

for all work done on the project in question. Thus, the trial court erroneously concluded 

that the four-part test set forth above does not apply in these circumstances. See

Appellant’s App. p. 17-18. Put another way, the evidence does not support a conclusion 

that a measurable benefit has been conferred upon Indiana Military under such 

circumstances that Indiana Military’s retention of the benefit without payment would be 

unjust. 

Prior to signing a subcontract with Larson to perform electrical work on the 

aviation support facility, it was made clear to Continental Electric, and all other 

concerned companies, that all conduit, wiring and other components between the facility 

building and the concrete generator pad were part of the base contract and not part of 

Alternate No. 2. Alternate No. 2, which related to the generator, was discussed at the 

pre-bid meeting, which was confirmed by Architect Dowdle, through a review of her 

meeting notes. Tr. p. 166-69. And the relevant provisions in the Project Manual that 

related to base bids and the alternates were addressed by CSO in 2007. Pursuant to the 
23

contract between Larson and Indiana Military, Larson submitted an RFI, to which CSO 

replied on February 23, 2007, as follows:

Request - Please furnish the scope of work demarcation between Base Bid 

and Alternate No. 2 - Diesel Generator. Please provide reference to all 

pertinent specifications and drawings.

Ex. 12; Tr. p. 224.

CSO then responded, as follows:

Provide everything except for the generator/components of Section 16231. 

Section 16231, per 1.02 “Summary” includes the battery charger, tank, 

engine generator set, muffler, exhaust pipe, enclosure, annunciator and 

battery. These aforementioned items are excluded from the base bid. 

Everything else (conduit, cable, transfer switches, emergency switchboard, 

etc.) is base bid.

Alternate No. 2

Provide the generator/components of Section 16231, per 1.02 “Summary”. 

Note that the Alternate is identified around the generator on the one-line 

diagram on Dwg. E002, yet cable/conduit to generator is specifically 

outside the Alternate identification.

Tr. p. 224, Ex. 12 (emphasis added).

At trial, Dunning testified that the conduit and conductors at issue were not 

included in Alternate No. 2. Tr. p. 285. Alternate No. 2 was defined in Section 01230, 

3.01(B), of the Project Manual. Tr. p. 95; Ex. 2. And under the referenced Section 

16231, part 2.11, Alternate No. 2 did not include the conduit, wiring etc., from the facility 

to the generator pad. Tr. p. 288. Part 2.11(F) of Section 16231 referred to wiring within 

the area of the generator pad. Id. at 289. Dunning’s decision was consistent with 
24

Larson’s bid, which described Alternate No. 2 as only “Diesel Generator: Provide diesel 

generator as specified in Section 16231, Packaged Engine Generators, and as shown on 

Drawings CI06, E002, and E100” and “Concrete generator pad shall be included in base 

Bid” Tr. p. 146, 289, Ex. 5. Section 16231 does not reference conductors and cables 

running from the building. Tr. p. 133, 290; Ex. 2. The connectors and cables referenced 

in Section 16120 of the Project Manual, referred to connectors and cables that ran out to 

the Alternate No. 2 site. Tr. p. 292. 

Dunning further explained that even though there was a range of bids that related 

to Alternate No. 2, it did not mean that the subcontractors had misunderstood the bid 

documents in the Project Manual because, as noted above, contractors might vary their 

bids for a variety of reasons relating to their particular strategies in the bidding process in 

an attempt to entice the contracting party to use their services. Tr. p. 305-08. In short, 

nothing that the trial court cited in its findings rebuts the fact that the Project Manual 

clearly stated that Alternate No. 2 included only the generator and wiring within the box 

marked as Alternate No. 2.

Additionally, we point out that nothing in Clarification No. 1 set forth above 

changed the scope of the work that related to the installation of conduit, wiring and 

components between the facility building and the concrete generator pad. Indeed, the 

clarification was simply a response to a question. 

The evidence at trial establishes that based on the Project Manual—and long 

before Continental Electric entered into a subcontract with Larson—that Continental
25

Electric should have been fully aware that the conduit, wiring and other components 

between the facility building and the concrete generator pad were to be installed pursuant 

to the base bid or base contract. And Larson fully agreed that it was obligated to install 

all of the electrical components between the building and the concrete generator pad 

under the base contract, and it informed Continental Electric as much. 

In light of the above and contrary to the trial court’s conclusions, it was clear that 

Continental Electric did not meet the four-part test to establish a right of recovery under 

an unjust enrichment theory. First, Indiana Military did not impliedly request that 

Continental Electric perform work that Larson was not already required to perform under 

the contract between Indiana Military and Larson. The evidence establishes that 

Continental Electric unquestionably knew the scope of the required work before it signed 

a contract.

Also, it was Larson that directed Continental Electric to proceed with the work.

Ex. 9. Indiana Military neither directly nor impliedly required Continental Electric to do 

any work. Larson directed Continental Electric’s work under the subcontract. The trial 

court apparently believed that Indiana Military required Continental Electric to proceed 

merely because it answered questions submitted by Larson about the scope of Alternate 

No. 2. Appellants’ App. p. 17, Conclusion 25. However, those answers were not 

directions to Continental Electric. Rather they were answers to questions from Larson, to 

which Larson fully agreed. The requirement to proceed was between Larson and 
26

Continental Electric. Thus, Continental Electric failed to establish the first element of the 

test.

Second, the evidence establishes that the State had no expectation that it would be 

required to pay Continental Electric or Larson any additional amount for wiring between 

the facility building and the concrete generator pad that Continental Electric fully 

understood was part of the base contract that it had with Larson. CSO, Indiana Military, 

Larson, and the other bidding contractors all understood that the wiring in question was 

part of the base contract from the outset. Also, any expectation by Continental Electric

that the State would pay it for installing electrical connections between the facility 

building and the concrete generator pad is baseless. More particularly, three months 

before Continental Electric signed any contract it was made clear from the CSO’s 

clarification in August, 2006, that the wiring between the building and the concrete 

generator pad was part of the base bid and base contract. 

We also note that Continental Electric’s contentions regarding the scope of work 

required by the base contract strain credulity. Continental Electric actually claimed at 

trial that no matter what was stated by the Project Manual, it would have been 

inappropriate to run wire to the generator pad in circumstances where the generator was 

an alternate and might not be installed. Tr. p. 82. However, the State contracting officer 

explained that even though the generator was listed as an alternate, even if the generator 

was not installed, the owner would expect that the wiring to the generator would be 

installed, so that it would not need to be placed at a later time. Id. at 298-302, 306-307. 
27

The generator was an essential component of the project because it was part of an 

emergency backup system. Id. at 223. Further, it was undisputed that Continental

Electric was paid for purchasing the generator and installing it under a separate contract, 

and there was no evidence that Continental Electric was not fully compensated as 

specified in that separate contract. Id. at 142-43, 229. The generator was installed by 

Continental Electric before the construction of the facility was completed. Id. at 229. 

Next, there is no evidence that Indiana Military committed any wrong in this case. 

Indeed, Indiana Military expected Larson to install the wiring in question, and Larson 

fully understood that it was obligated to do so. Larson was paid in full by Indiana 

Military pursuant to their contract. If Continental Electric believed that it had been 

wronged, it could have pursued mediation or arbitration against Larson under the 

subcontract because Larson agreed that it was not entitled to additional compensation 

from Indiana Military. Whether Larson was paid additional amounts or not by Indiana 

Military, Continental Electric’s remedy was against Larson. But Continental Electric did 

not pursue any such legal remedy. And it did not seek mediation or arbitration as the 

subcontract had provided. Indiana Military perpetrated no actual wrong in refusing to 

pay Continental Electric for work that Larson agreed was already required to be 

completed by its contract with Indiana Military. 

Finally, contrary to the trial court’s conclusion, there is no showing that Indiana 

Military accidentally or intentionally stepped into the shoes of Larson, the general 

contractor. Throughout the construction process, the CSO and Indiana Military simply 
28

responded to questions that Larson had submitted. Again, there was no contract between 

Continental Electric and Indiana Military. When Continental Electric brought its 

concerns about wiring to the attention of CSO and Indiana Military at a construction 

meeting in January of 2007, Continental Electric was informed that it was required to 

submit a detailed change order to Larson that would include a detailed breakdown of 

labor and materials. However, no change was submitted. Tr. p. 184-85. 

We reject the notion that the response from the Adjutant General to Continental

Electric’s improper appeal to the Governor did not amount to action by Indiana Military 

stepping into the shoes of Larson. To the contrary, Indiana Military properly responded 

that it had no contractual relationship with Continental Electric, and that Continental

Electric did not have any right to appeal to the Governor under a contract to which it was 

not a party. Ex. 20. 

In sum, we conclude that Continental Electric had no right to recover against 

Indiana Military. Continental Electric failed to establish that a measurable benefit was 

conferred on Indiana Military and that its retention of a benefit without payment would 

be unjust. Indeed, Indiana Military did not receive a measurable benefit from Continental

Electric that it had not already paid for. 

All concerned, including Continental Electric, knew long before Continental

Electric ever entered into a subcontract with Larson that the wiring in question was part 

of the base contract with Larson and that Indiana Military would expect Larson to install 

the wiring between the facility building and the concrete generator pad. Larson 
29

completed the work, and was fully paid for that work. In short, Indiana Military has not 

unjustly retained a benefit without payment. For all of these reasons, the trial court’s 

judgment for Continental Electric on the basis of quantum meruit must be set aside.

The judgment of the trial court is reversed.

KIRSCH, J., and BROWN, J., concur.