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Intermediate Appellate Court for the State of Maryland finds that Evidence Regarding the Value of Services Rendered Generates an Issue of Material Fact in an Action for Unjust Enrichment

Dolan v. McQuaide
No. 1433 (Md. App. Nov. 5, 2013)
by Wayne C. Heavener, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In Dolan v. McQuaide, the intermediate appellate court for the State of Maryland held that evidence regarding the fair market value of plaintiff’s work performed precluded summary judgment on a claim of unjust enrichment. Writing for the Court of Special Appeals, Judge Matricciani explained that evidence of work performed — generally valued as quantum meruit damages — can generate an issue of material fact so as to preclude summary judgment against a plaintiff in an action for unjust enrichment. In this case, the Court reversed a trial court’s entry of summary judgment in favor of defendant with respect to plaintiff’s unjust enrichment claim, but affirmed the trial court’s entry of summary judgment in favor of defendant with respect to plaintiff’s claims for breach of contract and promissory estoppel.

Effie Dolan (“Plaintiff”) and Christopher McQuaide (“Defendant”) were married in 2002. Prior to their marriage, Plaintiff and Defendant sought to open a carwash business. In the three (3) years after their marriage, Plaintiff drafted a business plan and contracts for the couples’ prospective business. In 2005, immediately before the carwash opened, the parties ended their relationship. Defendant refused to either pay Plaintiff, or permit her to inspect the business’s records. Plaintiff filed a multi-count Complaint in the Circuit Court for Cecil County, alleging, inter alia, claims of breach of contract, promissory estoppel, and unjust enrichment. Defendant filed a Motion for Summary Judgment as to all counts, which the Circuit Court granted. The Court of Special Appeals reversed the Circuit Court’s grant of summary judgment with respect to Plaintiff’s breach of contract, unjust enrichment, and promissory estoppel claims. On remand, Defendant again moved for summary judgment. The Circuit Court granted Defendant’s motion as to all counts, except unjust enrichment. Plaintiff moved to revise the judgment on March 15, 2012, but her motion was struck as untimely. Defendant filed a Motion to Alter or Amend the Judgment, prompting the Circuit Court to enter summary judgment in favor of Defendant as to all counts, including unjust enrichment. Again, Plaintiff appealed to the Court of Special Appeals.

The Court of Special Appeals reversed the Circuit Court’s entry of summary judgment with respect to those claims sounding in unjust enrichment, and affirmed the Circuit Court’s entry of judgment as to claims of breach of contract and promissory estoppel. In affirming the Circuit Court’s entry of summary judgment on breach of contract and promissory estoppel claims, the Court of Special Appeals found that Plaintiff failed to establish the existence of a valid express contract. In particular, the Plaintiff failed to allege that there were definite promises exchanged, necessary to the formation of a contract. Rather, the parties spoke in general terms, which were insufficiently definite to form an express oral contract. While the Court recognized that Plaintiff performed specific services, the Court held that those services were done without having discussed them at the time the alleged contract was formed. The Court found that, while conduct can serve to create a contract implied in law or in fact, it can neither form an oral contract nor bind a party in promissory estoppel without a definite promise. Therefore, the trial court appropriately entered summary judgment in favor of Defendant with respect to Plaintiff’s claims for breach of contract and promissory estoppel.

With respect to Plaintiff’s unjust enrichment claim, the Court held that summary judgment was improper. Noting that the “intersection of contract and restitution is an area of the law fraught with confusion,” Dolan v. McQuaide, No. 1433, slip op. at 9 (Md. App. Nov. 5, 2013), the Court analyzed the dividing lines between express contract and a contract implied by either law or fact. The Court ultimately held that there was no express agreement because “planning” was too ambiguous a task to constitute a definite promise. Plaintiff could possibly recover in unjust enrichment; evidence of quantum meruit damages in this case — though, technically different from damages recoverable under unjust enrichment — nonetheless precluded summary judgment. The court explained:

[I]n an action for contract implied-in-fact, quantum meruit is the customary or market price of the plaintiff’s services, whereas in an unjust enrichment claim, quantum meruit is the actual value realized by the defendant. . . . [However,] Fair market value and actual value are not mutually exclusive, and a fact-finder can use the former as evidence of the latter. As such, evidence of the fair market value for Dolan’s services established a genuine dispute of fact about the benefit to McQuaide, and that evidence should have moved the case beyond the summary judgment stage.

Id. at 12, 14. The Court noted that “[u]nlike the other terms in our list, quantum meruit is not truly a cause of action but a measure of recovery available in an action for contract implied-in-fact or for unjust enrichment.” Id. at 12 (emphasis in original). Because the trial court could at least hear evidence on the fair market value of Plaintiff’s services, the trial court could not enter summary judgment in favor of Defendant.

Also, the Court declined to reverse the Circuit Court’s decision to strike Plaintiff’s Motion to Amend the Judgment. Plaintiff failed to demonstrate either an excusable justification for the late filing, or any evidence of prejudice stemming from the Circuit Court’s ruling on Defendant Motion to Strike.