Morphy, Makofsky & Masson, Inc. v. CANAL PLACE 2000

538 So. 2d 569, 1989 La. LEXIS 89, 1989 WL 6035
CourtSupreme Court of Louisiana
DecidedJanuary 30, 1989
Docket88-C-0844
StatusPublished
Cited by71 cases

This text of 538 So. 2d 569 (Morphy, Makofsky & Masson, Inc. v. CANAL PLACE 2000) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morphy, Makofsky & Masson, Inc. v. CANAL PLACE 2000, 538 So. 2d 569, 1989 La. LEXIS 89, 1989 WL 6035 (La. 1989).

Opinion

538 So.2d 569 (1989)

MORPHY, MAKOFSKY & MASSON, INC.
v.
CANAL PLACE 2000, et al.

No. 88-C-0844.

Supreme Court of Louisiana.

January 30, 1989.
Rehearing Denied March 2, 1989.

*570 A.D. Freeman, Jr., Satterlee, Mestayer & Freeman, New Orleans, for applicants.

Wayne Lee, C. Lawrence Orlansky, Stone, Pigman, Walther, Wittman & Hutchinson, Gordon Wilson, Jr., Friend, Wilson & Draper, Victor Stilwell, Jr., Terrence Brennan, Deutsch, Kerrigan & Stiles, New Orleans, for respondent.

CALOGERO, Justice.

Canal Place, as owner, entered into an architectural contract with RTKL, A Professional Architectural Corporation, which obligated RTKL to provide all necessary architectural, engineering, and consulting services required by Canal Place in connection with the construction of Canal Place Phase II, a retail mall and hotel complex located in downtown New Orleans. RTKL thereafter negotiated a subcontract agreement with CBM Engineers, Inc. (CBM) which obligated CBM to perform all structural engineering services, including foundation engineering and design services for the Canal Place project. As indicated by letters from CBM to RTKL dated September 8, 1980 and September 25, 1980 respectively, CBM agreed to perform the structural engineering services subject to a "cap" of $297,511. CBM and RTKL entered into a formal subcontract agreement on November 16, 1981 which included this $297,511 "cap".

CBM, responsive to the wishes of the owner, Canal Place, agreed to have the plaintiff in this case, Morphy, Makofsky and Masson, Inc. (hereinafter referred to as Morphy), design and perform engineering services for the foundation and first floor of the structure.

The matter before this court concerns the claim of Morphy (the sub-subcontractor) against CBM (the subcontractor) for $78,613.00, per invoices calculated on an hourly basis for engineering services admittedly performed by Morphy.[1]

While CBM and Morphy verbally agreed that Morphy should do part of the work *571 CBM had obligated itself to perform for RTKL—and indeed Morphy did ably perform all such services—CBM and Morphy did not execute a written contract in advance of performance, or otherwise, specifically agreeing to the method or terms of payment for such engineering services.

The Civil District Court Commissioner, consistent with the views of all parties, ascertained that Morphy was a "subcontractor" to CBM, although working without a "contract." [Morphy had not responded to CBM's letters requesting that they submit a proposal for their services and negotiate a written contract. Morphy "simply proceeded ... to perform the work."] Finding no contractual theory of recovery, the Commissioner further ascertained that an equitable award "under quasi-contract or de in rem verso, an action in unjust enrichment" was in order, and determined that plaintiff should be awarded against CBM only $45,000, rather than the $78,613.00 Morphy had invoiced, by apportioning the RTKL-CBM "cap" as regards the work Morphy performed.[2]

The district court judgment, over plaintiff's exception to the report, adopted the commissioner's recommendation and cast CBM for only $45,000.00 in favor of Morphy.

The court of appeal affirmed, 522 So.2d 1223 (La.App.1988), concluding that "without a contract ... Morphy can only be compensated under a theory of unjust enrichment or quantum meruit." The court applied the principles governing actio de in rem verso, finding an enrichment of CBM, an impoverishment to Morphy, connection between the enrichment and the impoverishment, an absence of justification or cause (no legal cause supports the enrichment), and no other remedy at law (subsidiarity). Minyard v. Curtis Products, Inc., 251 La. 624, 205 So.2d 422 (1967), Brignac v. Boisdore, 288 So.2d 31 (La.1974), Edmonston v. A-Second Mortgage Co., 289 So.2d 116 (La.1974).

The court of appeal then found plaintiff entitled to the reasonable value of the engineering services, subject to the equitable limitation which attends the actio de in rem verso, (i.e., no more to plaintiff than his impoverishment—the actual value of materials and labor furnished including general overhead and reasonable profits— and in no event more than defendant's enrichment.)[3] Then, deciding that CBM by virtue of its contractual "cap" with RTKL was not enriched by the full $78,613.00 of services, because CBM was not fully recompensated by RTKL for the services performed by Morphy, they blessed the equitable remedy forged for the parties by the district court.[4]

We granted writs at the behest of plaintiff, prompted in some measure by the dissent in the court of appeal which argued that CBM's "enrichment" in the actio de in rem verso entailed not merely the $45,000.00 regarding plaintiff's work which CBM recouped from RTKL, but the entire $78,613.00 of Morphy's work. The dissent *572 reasoned that CBM's "enrichment" in the actio de in rem verso relief to which Morphy was entitled, included not only the value of Morphy's services which CBM recouped from RTKL, but also the amount by which CBM's losses were reduced because Morphy performed services for which CBM was obligated under the RTKL-CBM contract.

On closer examination it is not at all clear that CBM was enriched to a full $78,613.00, even under the dissent's analysis, for, as CBM's attorney in supplemental brief points out, had CBM performed the services that Morphy performed (and CBM had the ability to do the foundation engineering work) the cost to CBM would have been less than the $78,613.00 charged by Morphy, although the precise amount of such cost is not evident from this record. Two factors which would have prompted a lesser cost to CBM are these: (1) Morphy's $78,613 in charges includes a reasonable sum for profit, which would not have been a "cost" to CBM; and (2) CBM's personnel would not have cost CBM the comparable hourly charges in Morphy's invoices because CBM had salaried personnel already on staff (and not otherwise completely occupied) capable of doing the foundation design and engineering work.

We need not resolve this latter problem, however, for after reviewing the record and the law, we conclude that actio de in rem verso does not apply in this situation.

Morphy has a substantive claim in contract, and the existence of a claim on an express or implied contract precludes application of actio de in rem verso, for there does not exist one of the latter's requirements, that there be no other remedy available at law (subidiarity).

For the reasons which follow, we conclude that Morphy is entitled to recover the full $78,613.00 for the foundation design and engineering services, a reasonable value for the services Morphy performed for CBM under contract.

EXISTENCE OF A CONTRACT

This cause of action arose prior to the effective date of the 1984 revision of the Civil Code articles on Obligations. For this reason, we apply the articles in effect prior to January 1, 1985.[5]

La.Civ.Code Art. 1779 sets forth the requisites for a valid contract: (1) parties legally capable of contracting; (2) their consent legally given; (3) a certain object, which forms the matter of agreement; and (4) a lawful purpose. All of these requisites were met in the present case. Note also that La.Civ.Code art. 1761

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Bluebook (online)
538 So. 2d 569, 1989 La. LEXIS 89, 1989 WL 6035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morphy-makofsky-masson-inc-v-canal-place-2000-la-1989.