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Roger's Backhoe Serv. v. Nichols - 681 N.W.2d 647 (Iowa 2004)


In describing the elements of an action on an implied contract, the party seeking recovery must show: (1) the services were carried out under such circumstances as to give the recipient reason to understand: (a) they were performed for him and not some other person, and (b) they were not rendered gratuitously, but with the expectation of compensation from the recipient; and (2) the services were beneficial to the recipient.


Defendant owner, Nichols, hired the plaintiff Roger's Backhoe Service for the demolition of the foundation of a building that had been razed to provide room for the crematorium and removal of the concrete driveway and sidewalk adjacent to that foundation. The company was paid for that work. While at the job site, the city advised the company and the general contractor that an effort needed to be made to drain the surface water into a subterranean creek, which served as part of the city's storm sewer system. Nichols stated he did not give the company permission to do the excavation work to reach the sewer system, but the company excavated the area and reached the system over the next three days. Roger's was not paid for that work, and brought an action to recover for the value of its services. The district court pconcluded that Roger's' services conferred a benefit on Nichols, and entered judgment in the company's favor.  On Nichols' appeal, the Iowa Court of Appeals reversed the district court's award and concluded that no enforceable contract had been established between the parties. Roger's Backhoe Service sought further review in the state supreme court.


Did the excavation company, which rendered services beneficial to the landowner, establish an implied contract?




There was substantial evidence in the record to support a finding that, unless and until an effort was made to locate the subterranean sewer system, the city refused to allow the project to proceed. Consequently, it was necessary to the successful completion of the project that the effort be made to drain into the underground creek was fully explored and rejected.  The Supreme Court of Iowa concluded that: the company's failure to allege whether the account was oral or in writing was not fatal to the petition as it was clear from the facts the company alleged an implied-in-fact contract; the company did the work with the owner's knowledge, the company's charges were fair and reasonable; and Nichols received a benefit from the company's work, which was necessary for the city's approval. The state supreme court vacated the decision of the court of appeals and affirmed the judgment of the district court.

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