Earhart v. William Low Co.

25 Cal. 3d 503, 158 Cal. Rptr. 887, 600 P.2d 1344 (1979)

 

RULE:

In an action by a contractor against a property owner to recover in quantum meruit for sums expended in commencing the construction of a mobile home park on land owned by defendant and on an adjacent parcel owned by a third party, the trial court's denial of recovery for the work done on the adjacent parcel, on the ground that a plaintiff cannot recover for services furnished to a third person even though the services were furnished at the request of a defendant, was reversible error, where plaintiff's evidence indicated that he had performed services and furnished materials and work on the adjacent property at the urgent request of defendant, and the work was performed under circumstances in which plaintiff reasonably relied on the belief that defendant would pay for it. If the facts alleged by plaintiff were true, principles of fairness supported plaintiff's right of recovery for the reasonable value of his labor on the adjacent parcel. (Disapproving the broad implications of the statement in Rotea v. Izuel (1939) 14 Cal. 2d 605 [95 P.2d 927, 125 A.L.R. 1424], that a defendant's satisfaction of obtaining compliance with his own request will not support a plaintiff's recovery in quantum meruit in the absence of a direct benefit to defendant.)

FACTS:


Plaintiff contractor and defendant developer negotiated a contract to develop and improve real property. Defendant owned one parcel and the other parcel was owned by a third party, who was to sell the land to defendant at some point in the future. Although no contract was formally entered into, plaintiff began work on both parcels at defendant's request. In plaintiff's action for quantum meruit, he was awarded sums expended on defendant's parcel, but not on the adjacent parcel. On appeal, the court reversed the judgment to the extent that plaintiff was not compensated for work on the third party's parcel.

ISSUE:

Did the trial court err in limiting the plaintiff's recovery of damages and preventing him from recovering in quantum meruit despite the absence of defendant's ownership of the adjoining parcel?

ANSWER:

Yes.

CONCLUSION:

The court found that plaintiff reasonably relied upon the belief that defendant would pay. The court did not apply prior case law that held that a defendant was not liable to one who performed a service where the defendant received no direct benefit. The court examined the equitable considerations of other theories of recovery, such as justifiable reliance and promissory estoppel, and held that compensation for a party's performance should be paid the person whose request induced the performance.

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