Opinion ID: 773182
Heading Depth: 1
Heading Rank: 1

Heading: ABC's Quantum Meruit Claim.

Text: 4 Under the Nebraska law of quantum meruit, ABC is entitled to recover the reasonable value of electrical services that it performed for Nebraska Beef's benefit in circumstances that would make it inequitable for Nebraska Beef not to pay. See, e.g., Hoffman v. Reinke Mfg. Co., 416 N.W.2d 216, 219 (Neb. 1987). Nebraska Beef contends that ABC, an unpaid subcontractor, may not recover from Nebraska Beef, the project owner, because the two were not in privity of contract. We disagree. Recovery under quantum meruit does not require privity of contract. See Siebler Heating & Air Conditioning, Inc. v. Jenson, 326 N.W.2d 182, 184 (Neb. 1982). The evidence, viewed most favorably to the jury's verdict, established that Nebraska Beef directly supervised the part of the project that renovated the existing facility. Nebraska Beef, not JB the general contractor, controlled the entire project, finally approved change orders, and directly paid ABC for work performed. ABC's quantum meruit claim did not include work for which Nebraska Beef had paid JB. In these circumstances, we conclude the Supreme Court of Nebraska would apply the principles of quantum meruit to permit an unpaid subcontractor to recover from the project owner. See generally Annot., Building and Construction Contracts: Right of Subcontractor Who Has Dealt with Primary Contractor to Recover Against Property Owner in Quasi Contract, 62 A.L.R. 3d 288 (1975). 5 A party may not recover under quantum meruit for work it was obligated to perform under an express contract. See Siebler, 326 N.W.2d at 184-85. However, a quantum meruit claim may supplement an express contract by seeking reasonable compensation for work not covered by the contract. See Associated Wrecking & Salvage Co. v. Wiekhorst Bros. Excavating & Equip. Co., 424 N.W.2d 343, 348-49 (Neb. 1988). Here, ABC's subcontract with JB required ABC to perform electrical work for an $880,000 Contract Price. ABC's quantum meruit claim is not precluded by the subcontract, but it may not recover for the work it promised to perform for $880,000. Construing the proper scope of the $880,000 price term in the subcontract is the most difficult and critical issue in this case. 6 The parties agree that two provisions in the subcontract defined what work was covered by the contract price -- the scope-of-work paragraph, in which ABC agreed to: 7 Furnish and install, complete all electrical work per plans and specs described on Schemmer Associates, Inc. drawings . . . [plus] temporary wiring/lighting as required in existing and new plant. Sub-Contractor is aware that Nebraska Beef will add equipment requiring electrical services to its existing plant and new addition, not shown on plan or specified. Sub-Contractor agrees to provide electrical service as required. Electrical is deemed to mean all inclusive electrical wiring, outlets, breakers, panels, etc. as required such that when this contract is complete, the plant is operational electrically for production equipment. 8 and the contract price provision, in which JB agreed: 9 To pay [ABC] for the full, faithful and prompt performance of this contract agreement, subject to all of the terms and conditions hereof, the sum of Eight hundred and eighty thousand Dollars ($880,000.00) hereinafter called the Contract Price plus all additions and less all deductions herein provided for . . . . 10 A major difficulty in construing and integrating these provisions is that the Schemmer Associates drawings referred to in the scope of work covered only the proposed addition to the facility, whereas the entire project also included a major renovation of the existing facility. The parties hotly disputed, at trial and on appeal, whether the $880,000 contract price covered only, in the words of the scope-of-work provision, all electrical work per plans and specs described on Schemmer Associates, Inc. drawings. 11 Under Nebraska law, construing an unambiguous contract is a question of law for the trial court. However, if the contract is ambiguous -- that is, if it may objectively be understood in more than one sense -- then extrinsic evidence is admissible, and the parties' intent is a question of fact for the jury. Rayman v. American Charter Fed. Sav. & Loan Ass'n, 75 F.3d 349, 354 (8th Cir. 1996). Here, in the Order on Final Pretrial Conference, both parties listed as a disputed issue whether the scope of work described in the subcontract was ambiguous. But neither party asked the district court to resolve this issue prior to trial, and substantial extrinsic evidence on the question of the parties' intent was admitted without objection at trial. 12 At the close of evidence, just prior to the instruction conference, the district court ruled that the subcontract unambiguously limited the $880,000 price term to the work described in the Schemmer Associates drawings. Although Nebraska Beef objected to this construction, it did not argue that the subcontract is ambiguous and therefore the scope-of-work issue should be submitted to the jury. Accordingly, the district court instructed the jury, consistent with its construction of the subcontract, that ABC may only recover in quantum meruit for construction work on the premises of [Nebraska Beef] over and above that required under the plans and specs described on Schemmer Associates, Inc. drawings. 13 Consistent with its position at trial, Nebraska Beef argues on appeal that the subcontract unambiguously committed ABC to perform for $880,000 all electrical work within the scope of the entire project (excluding change orders and other extra work that were the subject of ABC's separate promissory estoppel claim). Therefore, the question whether the subcontract is ambiguous has been waived, and the only issue before us is whether the unambiguous contract has been properly interpreted by the district court, or by Nebraska Beef. We review the district court's interpretation of an unambiguous contract de novo. See Case Int'l Co. v. T.L. James & Co., 907 F.2d 65, 66 (8th Cir. 1990). 14 The district court construed the subcontract as requiring ABC to perform the work detailed in the Schemmer drawings for $880,000, and additional electrical work for additional compensation. The court relied on the language in the scope-of-work provision that Nebraska Beef will add equipment requiring electrical services, reading that language in conjunction with the language in the price provision that JB would pay $880,000 plus all additions. On the other hand, Nebraska Beef argues that ABC's promise to provide electrical service as required, including work not shown on the Schemmer drawings, means that all such work was included in the $880,000 contract price. 15 The subcontract was signed after ABC and JB had begun work on the project, but before Nebraska Beef had defined the scope of the work to be performed in addition to that shown on the Schemmer Associates drawings. Viewing the issue of the contracting parties' unambiguous intent at that point in time, JB would not reasonably have demanded, and ABC would not reasonably have made, an open-ended commitment to perform whatever work Nebraska Beef might decide in the future to require for a fixed price of $880,000. Thus, ignoring the extrinsic evidence of intent offered at trial -- evidence that may not be considered in construing an unambiguous contract -- the district court's interpretation of the subcontract is clearly more reasonable than Nebraska Beef's. As Nebraska Beef does not argue the subcontract is ambiguous in this regard, the district court's construction must be affirmed. 2 16