Tom Growney Equipment, Inc. v. Ansley

888 P.2d 992, 119 N.M. 110
New Mexico Court of Appeals·Decided December 2, 1994·No. 15647·Published·Cited by 17 cases

Opinion

OPINION

BOSSON, Judge.

This case presents an issue of first impression in New Mexico. The question is whether an equipment repair shop may recover in restitution for the value of work done where the owner did not authorize or otherwise encourage the repairs. The district court upheld the claim. Being persuaded that the repair shop does not have such an action, we reverse.

FACTS

The facts are not in dispute. Jim Ansley (Owner) sold a backhoe loader on credit to Charles Edwards in 1988. Owner retained a security interest but neglected to record it. In November 1991 Edwards took the backhoe to Tom Growney Equipment, Inc. (“Repairer”) for repairs. At the time, Edwards had an open account with Repairer. The repairs were duly performed and Repairer released the backhoe to Edwards in exchange for a promissory note. Repairer believed that Edwards owned the backhoe free of any creditor’s security interest and was unaware of Edwards’ obligation to Owner. Similarly, Owner was unaware of the services provided by Repairer, or that Repairer was owed any money by Edwards.

Ultimately, Edwards defaulted on both obligations, and in March 1992, Owner repossessed the backhoe from Edwards. Repairer brought suit against both Edwards and Owner for the balance owed on the promissory note. Repairer has not pursued the claim against Edwards. Owner and Repairer filed cross-motions for summary judgment. The district court entered summary judgment against Repairer on claims of open account and hen, finding that Repairer had no contractual relationship with Owner and had waived a claim of hen by releasing the backhoe to Edwards. However, the court did enter summary judgment against Owner “on [Repairer’s] claim for quantum meruit in the amount of $7,002.53.” Owner appeals from that judgment.

DISCUSSION

Repairer seeks recovery for the value of services performed. Had the services been at Owner’s request, Repairer would have had a claim for express contract or perhaps one implied-in-fact. See 1 Dan B. Dobbs, Dobbs Law of Remedies § 4.2(3), at 582-83 (2d ed. 1993). However, Owner was not even aware of the services, and therefore Repairer must look to some other remedy.

Even without an action in contract, it is reasonably arguable, if not undisputed, that Owner has benefitted to some degree from the repairs. Thus, Repairer may have a claim for restitution based upon a theory of quasi-contract (contract implied-in-law) to prevent unjust enrichment. See id. at 583 (“If recovery is allowed for such unrequested services, it is clear that the recovery is the quasi-contract sort, that is, based upon the principle against unjust enrichment and not on contract.”). If restitution is available, it would likely result in a measure of damages, quantum meruit, which is significantly different from contract. See id. (“When the service was not sought by the defendant, if restitution is allowed at all it is usually measured by the increase in defendant’s assets resulting from the service, not by the value of the service itself.”).

New Mexico has recognized a theory of quantum meruit distinct from contract. See Terry v. Pipkin, 66 N.M. 4, 7, 340 P.2d 840, 842 (1959). More recently, our Supreme Court characterized the action as a claim for unjust enrichment. Hydro Conduit Corp. v. Kemble, 110 N.M. 173, 176, 793 P.2d 855, 858 (1990). In describing that action, the Supreme Court has identified the theory and rationale: “ ‘One who has been unjustly enriched at the expense of another may be required by law to make restitution. Restatement of Restitution § 1 comments a, b, c (1937). This quasi-contractual obligation is created by the courts for reasons of justice and equity, notwithstanding the lack of any contractual relationship between the parties.’ ” Id. at 175, 793 P.2d at 857 (quoting United States ex rel. Sunworks Div. of Sun Collector Corp. v. Insurance Co. of N. Am., 695 F.2d 455, 458 (10th Cir.1982) (citations and footnote omitted)). In Danley v. City of Alamogordo, 91 N.M. 520, 522, 577 P.2d 418, 420 (1978), the Supreme Court applied this theory in determining a city’s liability for services performed by a contractor, notwithstanding the city’s failure to comply with state purchasing laws which invalidated a contract between the city and the contractor.

These and other New Mexico cases have discussed the theory and rationale in situations where the recipient of the benefit actually knew or should have known of the services performed, which is usually a foundation for relief under an implied-in-fact contract. However, no New Mexico case directly addresses the legal issue presented here, where the services are unsolicited and unknown. In this situation, the provider is left with a restitutionary remedy based upon a contract implied-in-law which serves to alleviate unjust enrichment. Here we must concern ourselves with the fundamental question of whether the resulting enrichment is the equivalent of that characterized by our Supreme Court as “unjust,” and thus whether we should impute such a quasi-contract as a matter of law and compel restitution.

In what Professor Dobbs describes as the “orthodox view,” restitution is ordinarily not available under the circumstances in this case. See Dobbs, supra, § 4.9(5), at 701. That general rule is founded upon the owner’s fundamental right of free choice: the exclusive right to determine whether his property shall be repaired and if so, by whom. That right of choice necessarily includes the right not to pay for services rendered without knowledge or consent. This principle permeates the equitable foundations of restitution. See id. § 4.9(2).

Underlying most of the cases, however, seems to be a strong double commitment to prevent unjust enrichment on the one hand and to protect the defendant’s right of free choice on the other. Where the defendant has a right to choose for himself whether to receive a benefit, and where restitution would deprive him of this choice by requiring payment for a “benefit” the defendant may not want, restitution is often denied. The right of self-determination through personal choices — that is, personal autonomy — is central to personal being and growth as well as to the concept of a free society.

Id. at 683.

Free access — add to your briefcase to read the full text and ask questions with AI

Tom Growney Equipment, Inc. v. Ansley, 888 P.2d 992, 119 N.M. 110 (N.M. Ct. App. 1994).

888 P.2d 992 (Tom Growney Equipment, Inc. v. Ansley) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Daye v. Community Financial Loan Service Centers, LLC
280 F. Supp. 3d 1222 (D. New Mexico, 2017)
Hunt v. North Carolina Logistics, Inc.
193 F. Supp. 3d 1253 (D. New Mexico, 2016)
Abraham v. WPX Energy Production, LLC
20 F. Supp. 3d 1244 (D. New Mexico, 2014)
Starko, Inc. v. Presbyterian Health Plan, Inc.
2012 NMCA 053 (New Mexico Court of Appeals, 2012)
Starko, Inc. v. PRESBYTERIAN HEALTH PLAN
276 P.3d 252 (New Mexico Court of Appeals, 2011)
BIO-TEC ENVIRONMENTAL, LLC v. Adams
792 F. Supp. 2d 1208 (D. New Mexico, 2011)
Applied Capital, Inc. v. Gibson
558 F. Supp. 2d 1189 (D. New Mexico, 2007)
Heimann v. Kinder-Morgan CO2 Co., LP
144 P.3d 111 (New Mexico Court of Appeals, 2006)
Heimann v. Kinder-Morgan CO2 Co.
2006 NMCA 127 (New Mexico Court of Appeals, 2006)
Credit Institute v. Veterinary Nutrition Corp.
2003 NMCA 010 (New Mexico Court of Appeals, 2002)
Ontiveros Insulation Co., Inc. v. Sanchez
3 P.3d 695 (New Mexico Court of Appeals, 2000)
A.D. Powers v. Miller
1999 NMCA 080 (New Mexico Court of Appeals, 1999)
Central SEC. and Alarm Co., Inc. v. Mehler
918 P.2d 1340 (New Mexico Court of Appeals, 1996)
City of Las Cruces v. El Paso Electric Co.
904 F. Supp. 1238 (D. New Mexico, 1995)
Mayfield Smithson Enterprises v. Com-Quip, Inc.
896 P.2d 1156 (New Mexico Supreme Court, 1995)