Earhart v. William Low Co.

600 P.2d 1344, 25 Cal. 3d 503, 158 Cal. Rptr. 887, 1979 Cal. LEXIS 320
CourtCalifornia Supreme Court
DecidedOctober 22, 1979
DocketL.A. 30993
StatusPublished
Cited by32 cases

This text of 600 P.2d 1344 (Earhart v. William Low Co.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Earhart v. William Low Co., 600 P.2d 1344, 25 Cal. 3d 503, 158 Cal. Rptr. 887, 1979 Cal. LEXIS 320 (Cal. 1979).

Opinions

Opinion

TOBRINER, J.

In this case we must determine whether a party who expends funds and performs services at the request of another, under the reasonable belief that the requesting party will compensate him for such services, may recover in quantum meruit although the expenditures and services do not directly benefit property owned by the requesting party.

In the instant case, plaintiff asserts that, at defendant’s request, he expended sums in commencing the construction of a mobile home park on land owned by defendant and on an adjacent parcel owned by a third party. When defendant refused to compensate plaintiff for any of the services so rendered, plaintiff sued in quantum meruit.

While permitting plaintiff to recover the sums which he expended on the parcel actually owned by defendant, the trial court denied plaintiff recovery for the expenses incurred in construction on the adjoining parcel, reasoning that under past California cases defendant received no direct “benefit” from construction on the property that he did not own. Plaintiff now appeals from the trial court’s adverse judgment limiting his recovery, contending that he should be permitted to recover in quantum meruit despite the absence of defendant’s ownership of the adjoining parcel.

As we shall explain, plaintiff is entitled to prove defendant’s liability for the reasonable value of plaintiff’s services rendered on both parcels of land. The trial court in the instant case apparently felt constrained to limit plaintiff’s recovery because of this court’s decision in [506]*506Rotea v. Izuel (1939) 14 Cal.2d 605 [95 P.2d 927, 125 A.L.R. 1424]. In that case the court denied quasi-contractual recovery on the ground that the only “benefit” received by the defendant was the “incidental benefit” which he may have found in the satisfaction of obtaining compliance with his request.

In view of the facts of the present case, we reject such a broad limitation of the remedy of quantum meruit. Here, plaintiff claims that defendant urged him to begin work on the mobile home park for which he and defendant had long been negotiating. Plaintiff further asserts that, under defendant’s supervision, he immediately commenced construction, justifiably relying on his belief that defendant would pay for the requested performance. If the trial court finds these facts to be true and, thus, that plaintiff rendered the very performance that defendant requested, we believe that principles of fairness support plaintiff’s recovery for the reasonable value of his labor.

This appeal comes before us on an abbreviated record. The facts, which are sufficient for the resolution of the general legal issue presented, have been gleaned from the pleadings, the partial transcript, the trial court’s findings, and the parties’ briefs on appeal. (Cf. Scala v. Jerry Witt & Sons, Inc. (1970) 3 Cal.3d 359, 367 fn. 4 [90 Cal.Rptr. 592, 475 P.2d 864].)

Plaintiff Fayette L. Earhart is the president and owner of Earhárt Construction Company. For approximately two months in early 1971, plaintiff and defendant William Low, on behalf of defendant William Low Company,1 engaged in negotiations for the construction of the Pana Rama Mobile Home Park. These negotiations culminated in a construction contract which was to become binding when defendant obtained the requisite financing to build the park and when plaintiff secured a labor and material or performance bond for the work. Neither condition was ever fulfilled.

The proposed park was to cover a number of acres, some of which defendant owned, and the balance of which were owned by Ervie Pillow.. In May 1971 defendant and Pillow entered into an escrow agreement in which Pillow agreed to sell her tract to defendant on the condition that [507]*507defendant obtain financing for the mobile home park. According to plaintiff, a “special use permit” allowing the construction of a mobile home park on Pillow’s land was of particular interest to defendant. Plaintiff claimed that the permit would expire on May 27, 1971, without possibility of renewal, unless work on the property were “diligently under way” by that date.

Plaintiff maintained that on May 25, 1971, defendant telephoned him to inform him that he had secured the necessary financing for the park, and, waiving all conditions to the contract, urged plaintiff to move equipment onto the property and commence work immediately in order to “save” the special use permit. Plaintiff’s crew began work at once and continued to work for one week, often in the presence of defendant. On June 1, 1971, plaintiff submitted a progress bill to defendant and at that time learned that defendant had not secured the requisite financing. Defendant refused to pay plaintiff’s bill, revealing that in the interim he had signed a construction contract for the park with another firm.

At trial, defendant took issue with a number of plaintiff’s assertions. According to defendant, the validity of the Pillow permit was irrelevant to his plan to construct a mobile home park since he had obtained a permit himself, and, as he testified, “As long as I had my permit, [Pillow’s auto] court could be developed.” Furthermore, defendant denied telephoning plaintiff and asserted that he had never asked plaintiff to work “specifically” on the Pillow property. Rather, defendant claimed that plaintiff began construction before either of the conditions to the written agreement had been met, in order to get “kind of a leg up there in [defendant’s] eyes towards getting the contract eventually. . . . [Plaintiff] was going to take a gamble in there subject to requisite financing” and without charge to defendant.

At the conclusion of the trial, the court determined that plaintiff was entitled to recover from defendant on a theory of quantum meruit.2 [508]*508Stating that “[generally speaking, the court has a tendency to believe the testimony of Mr. Earhart and to disbelieve the testimony of Mr. Low,”3 the trial court specifically found that plaintiff had furnished machinery, labor, and materials to defendant’s property “at the special instance and request of defendant.”

In assessing the amount of the damages to which plaintiff was entitled under quantum meruit, however, the court limited plaintiff’s recovery to the reasonable value of the work done on defendant’s tract, declining to award damages for the reasonable value of services rendered in construction on the Pillow property. Acknowledging that plaintiff’s services “were furnished both to the Pillow property and to the Low property,” the trial court interpreted this court’s decision in Rotea v. Izuel, supra, 14 Cal.2d 605, as precluding plaintiff’s recovery with respect to the work on the Pillow property. The court stated in this regard: “[I]t is an established proposition of law in California . . . that you can’t get recovery for services furnished to a third person, even though the services were furnished at the request of the defendant. ... So the plaintiff can’t recover for services furnished Mrs. Pillow. . . . [E]ven though the plaintiff renders services or delivers a product, if it is of no value to the defendant, then the defendant doesn’t pay for it. All he pays for is the value of what he got, notwithstanding how much it cost the plaintiff to produce it. That’s the proper measure in this case.”4

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Cite This Page — Counsel Stack

Bluebook (online)
600 P.2d 1344, 25 Cal. 3d 503, 158 Cal. Rptr. 887, 1979 Cal. LEXIS 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/earhart-v-william-low-co-cal-1979.