Air Serv Corporation v. Flight Services & Systems, Inc.

CourtCourt of Appeals of Washington
DecidedApril 6, 2015
Docket71103-2
StatusUnpublished

This text of Air Serv Corporation v. Flight Services & Systems, Inc. (Air Serv Corporation v. Flight Services & Systems, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Air Serv Corporation v. Flight Services & Systems, Inc., (Wash. Ct. App. 2015).

Opinion

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2015APR-6 Mill: Oh

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

AIR SERV CORPORATION, No. 71103-2-

Respondent,

FLIGHT SERVICES & SYSTEMS, INC., UNPUBLISHED OPINION

Appellant. FILED: April 6, 2015

Verellen, A.C.J. — In a bench trial to determine damages for unjust enrichment

or quantum meruit, findings of fact and conclusions of law must specify the measure

and quantity of damages. Here, the trial court entered judgment for Air Serv

Corporation (Air Serv) against Flight Services &Systems, Inc. (FSS) for $200,000,

including attorney fees, and ordered an additional amount of $35,000 as sanctions for

violations of various court rules. FSS appeals, contending that the trial court applied the

wrong measure of damages, improperly excluded evidence, and erred in imposing an

attorney fees award and sanctions. Because we cannot discern from the trial court's

findings the basis for the award, we remand for further findings on the existing record. FACTS

On April 14, 2011, FSS entered into a contract with Delta Airlines to provide

cabin cleaning services at Seattle-Tacoma airport for Delta's domestic and international flights. FSS was to begin providing these services on May 17, 2011. In order to provide No. 71103-2-1/2

cleaning services for international flights, FSS was required to obtain a federal

compliance agreement from the United States Department of Agriculture.

Sometime in May 2011, the United States Customs and Border Protection (CBP)

notified Delta that FSS would not be permitted to board Delta's international flights

because it did not have the required compliance agreement. CBP identified other

companies that were in compliance, including Air Serv. Because FSS was unable to

obtain a compliance agreement for at least another six to eight weeks and Delta had an

immediate need for cleaning services on international flights beginning the next day,

Delta consulted with CPB about having Air Serv provide temporary services until FSS

obtained its own compliance agreement.

CPB agreed to allow FSS to provide the cleaning services without the

compliance agreement so long as Air Serv supervised those services. Specifically, Air

Serv would be required to supervise the handling and transfer of trash collected on the

plane. Air Serv agreed to do so, and beginning on May 28, 2011, provided supervision

of FSS's handling and transfer of the trash during cleanings.

Approximately two weeks later, Air Serv proposed to FSS a rate of $250 per

plane for its services. After FSS objected to this amount, Air Serv proposed a lower rate

of $175 per plane. Beginning in July 2011, Air Serv sent invoices to FSS at this price,

for a total of 476 flights that were serviced during the temporary arrangement.

FSS did not pay the invoices, but Air Serv continued to provide the temporary

services until FSS obtained its federal compliance agreement in September 2011. On

September 2, 2011, Air Serv ceased providing its supervisory services to FSS. FSS did

not pay the invoices, which totaled $83,300. On September 20, 2011, FSS disputed the No. 71103-2-1/3

amount on the invoices and informed Air Serv that it would only pay a total of $3,511.10,

based upon an hourly rate of $14.05.

On January 6, 2012, Air Serv filed a complaint against FSS seeking damages for

breach of contract, consumer protection act violations, unjust enrichment and quantum

meruit. The trial court dismissed the consumer protection and breach of contract claims

on summary judgment, finding that there was no meeting of the minds on the price for

the services rendered by Air Serv. But the trial court granted partial summary judgment

for Air Serv for liability under the unjust enrichment and quantum meruit theories, with

damages to be proven at trial.

After a bench trial on damages, the trial court found that FSS owed $83,300 to

Air Serv for its services and $116,700 in attorney fees, for a total judgment award of

$200,000. The court further ordered an additional $35,000 in sanctions against FSS

based on "numerous violations of the rules of the Court, including, but not limited to

CR 11, CR 26(g), CR 37(b) & (d), CR 56(g) and the Court's local rules."1 FSS appeals.

DISCUSSION

Measure of Damages

FSS contends that the trial court applied the wrong measure of damages. FSS

argues that instead of basing the damages award on the reasonable market rate, the trial

court erroneously awarded expectation damages, a contract remedy that is unavailable

here because the breach of contract claim was dismissed. Because the trial court's

findings are inadequate for us to review this claim, we remand for further findings.

1 Clerk's Papers (CP) at 2303. The trial court awarded attorney fees alternatively as part of a "make whole" theory of damages, or as part of the sanctions for FSS's violations of court rules. No. 71103-2-1/4

Unjust enrichment and quantum meruit are methods of recovery for contracts

"implied in law" and contracts "implied in fact."2 Unjust enrichment is founded on

notions of justice and equity and implies a contract in law to allow recovery for the value

of a benefit conferred absent any contractual relationship when "fairness and justice

require it."3 Quantum meruit is founded in the law of contracts and implies a contract in

fact when the defendant requests work, the plaintiff expects payment for the work, and

the defendant knows or should know the plaintiffexpects payment for the work.4

Accordingly, recovery for quantum meruit is limited to the value of services rendered,

while "'unjust enrichment applies to a far broader category of cases."'5

The measure of recovery for unjust enrichment to a faultless claimant is either

(1) "'the amount which the benefit conferred would have cost the defendant had it

obtained the benefit from some other person in plaintiffs position,'" or (2) "'the extent to

which the other party's property has been increased in value or his other interests

advanced.'"6 When services have been provided, the first measure is typically

represented by the market value of the services rendered, while the second measure

involves disgorgement of the profit the defendant received as a result of the services

rendered.7

2 Young v. Young. 164 Wn.2d 477, 483, 191 P.3d 1258 (2008). 3 \± at 483-84.

4 Id, at 486. 5]d. at 486 (quoting Bailie Commc'ns Ltd. v. Trend Bus. Svs. Inc., 61 Wn. App. 151, 160, 810 P.2d 12 (1991)). 6 \± at 487 (quoting Noel v. Cole, 98 Wn.2d 375, 383, 655 P.2d 245 (1982)). 7 See id. at 487-88. No. 71103-2-1/5

Quantum meruit damages are measured by "the reasonable value of services."8

While also typically represented by the market value, this measure can be calculated in

a variety of ways.9

Here, the parties presented limited evidence to the trial court to establish the

measure of damages under either theory. On market value, Air Serv took the position

that the services were unique and that there was no market. In its discovery responses,

FSS pointed to a single example of a "subcontractor" for cleaning services and alleged

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