United States v. Algernon Blair, Inc.

479 F.2d 638 (4th Cir. 1973)

 

RULE:

The right to seek recovery under quantum meruit in a case arising under the Miller Act, 40 U.S.C.S. § 270a et seq., is clear. Quantum meruit recovery is not limited to an action against the prime contractor but may also be brought against the Miller Act surety. Further, that the complaint is not clear in regard to the theory of a plaintiff's recovery does not preclude recovery under quantum meruit. A plaintiff may join a claim for quantum meruit with a claim for damages from breach of contract

FACTS:

Appellee Algernon Blair, Inc. entered into a contract with the United States for the construction of a naval hospital. Appellee subcontracted Coastal Steel Erectors, Inc. to perform certain steel erection and supply certain equipment in conjunction with Blair's contract with the United States. Coastal commenced work and supplied its own cranes, but appellee refused to make payments for crane rental maintaining that it was not obligated to do so under the subcontract despite Coastal’s partial performance. Coastal then terminated its subcontract while Appellee subcontracted another to complete the job. Coastal filed an action to recover for labor and equipment furnished against both appellee and its Miller Act surety, United States Fidelity and Guaranty Company. The trial court determined that appellee had breached and that Coastal was justified in ceasing performance; however, the trial court awarded no damages, concluding that while $ 37,000 was owed to Coastal, Coastal would have lost more than that figure if it had completed performance. The trial court then denied recovery to Coastal on the premise that any amount due to it must be reduced by any loss it would have incurred by complete performance of the contract.

ISSUE:

Could a subcontractor, after partial performance, recover against the prime contractor and the Miller Act surety the reasonable value of his performance?

ANSWER:

Yes.

CONCLUSION:

In reversing the matter, the court determined that because appellant provided, at its own expense, labor and equipment to appellee, who breached the subcontract and retained those benefits without paying for them, appellant was entitled to recover damages in quantum meruit, the value of the services provided. The judgment was reversed and the matter remanded for a determination of the reasonable value of labor and equipment use furnished by appellant to appellee.

Click here to view the full text case and earn your Daily Research Points.