Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No. 37-2007-00056919-BC-NC William S. Dato, Judge.
IRION, J.
Defendant Michael Summers appeals from a judgment awarding plaintiff Southern California Foam and Coatings, Inc. (SoCal) $17,722 for installation of a new roof on a commercial building Summers owns. Summers contends the judgment should be reversed because SoCal is not entitled to recover in quantum meruit and, even if it is, the trial court did not apply the correct measure of recovery. We reject the former contention but agree with the latter. We therefore reverse and remand for a redetermination of the proper amount of restitution to be awarded SoCal.
FACTUAL AND PROCEDURAL BACKGROUND
In June 2007, Summers contacted SoCal about the possibility of repairing or replacing the roof on a commercial building he owns in Escondido. SoCal's sales manager, Cory Sicklesteel, responded with a written proposal to replace the roof for $24,722. In a follow-up telephone conversation, Summers told Sicklesteel the price was more than he wanted to pay. Sicklesteel told Summers he might be able to lower the price if he could combine the work on Summers's roof with another job in the same area.
About a month later, on July 18, Sicklesteel sent Summers a new proposal to replace the roof at a reduced price of $19,722. Summers responded the next day by signing the acceptance line of the proposal and adding some new terms, including that payment of the initial deposit would be due within 15 days of billing and that all payments could be made by major credit card.
A day or two later, Sicklesteel telephoned Summers and told him SoCal would not accept payment by credit card but would accept payment by credit card check. Summers said he would look into the possibility of paying by credit card check and get back to Sicklesteel. Summers subsequently decided he did not want to buy a new roof if he could not pay by credit card. There is no indication in the record Summers ever communicated this decision to SoCal.
Although Sicklesteel knew there was no agreement on the method of payment and normally would not schedule a job without a signed final contract, he nevertheless prepared a work order for Summers's roof, in part to coordinate that job with another in the same area. Under SoCal's operating procedures, preparation of a work order transferred the job from the sales department to the production department. Sicklesteel sent the work order to SoCal's production manager, Jefferey Cardenas, for scheduling, but Sicklesteel did not advise Cardenas about the unresolved method-of-payment issue.
Approximately two weeks after the parties exchanged proposals and discussed them on the telephone, Sicklesteel mailed Summers an "updated proposal" and asked him to sign and return it. This proposal, however, was identical to the earlier $19,722 proposal SoCal had sent Summers; it did not include the method-of-payment and other terms Summers had proposed. When he received the updated proposal, Summers saw that none of his proposed terms had been included, concluded "the issue was dead" and did not sign the document.
Several days later, Cardenas telephoned Summers to schedule the roof replacement. Cardenas believed the parties had signed a contract because he received a work order from Sicklesteel for Summers's job. When Summers mentioned to Cardenas that there was still an unresolved issue regarding the method of payment, Cardenas said payment terms were Sicklesteel's responsibility.
Cardenas and Summers then discussed scheduling the job. Cardenas testified that Summers agreed to go ahead as long as the job could be done on the following Saturday. Summers, however, believed they were speaking hypothetically, in the sense that if they went forward, the job would be done on a weekend because that would be more convenient for Summers.
Cardenas and Summers also discussed payment of the deposit SoCal was supposed to receive before beginning work. According to Cardenas, Summers agreed to mail a check for the deposit. But according to Summers, he was only speaking hypothetically, in the sense that he would mail the deposit if the roof replacement went forward. Summers also testified he was still insisting that he be able to make the bulk of the payment by credit card.
The following Saturday, a SoCal work crew arrived at Summers's commercial property to begin installation of a new roof. The crew finished the work the following Monday.
Because Summers was not at the property and nobody contacted him while the work was being done, he did not learn about the new roof until Sicklesteel telephoned him to demand payment. Summers responded with a letter in which he reminded Sicklesteel that he had conditioned acceptance of SoCal's $19,722 proposal on payment by credit card, stated he had not received any bill, and included his credit card number. SoCal refused to accept the credit card payment.
SoCal then commenced this action for breach of contract and fraud and sought damages of $19,732, interest and attorney fees. The case was tried to the court. On the second day of trial, the court granted SoCal's motion to amend the complaint to add a claim for quantum meruit and also granted Summers's motion for nonsuit on SoCal's fraud claim. The trial court, after hearing testimony, receiving documents into evidence and entertaining arguments regarding the remaining claims, issued a proposed statement of decision in which it rejected the contract claim but awarded SoCal $17,722 on its quantum meruit claim, conditioned upon SoCal's obtaining a permit for the new roof. Neither party filed an objection to the proposed statement of decision, so the trial court subsequently issued a minute order adopting the proposed statement of decision as its statement of decision.
The amount listed in the complaint appears to contain a typographical error. The price in the parties' offer and counteroffer was $19,722, not $19,732.
After SoCal obtained the necessary permit for the roof, the trial court entered judgment in favor of SoCal for $17,722. Summers filed a notice of appeal, but SoCal did not cross-appeal.
STANDARD OF REVIEW
In a nonjury trial, the trial court's statement of decision sets forth its reasoning regarding the disputed issues and is "our touchstone to determine whether or not the trial court's decision is supported by the facts and the law." (Slavin v. Borinstein (1994) 25 Cal.App.4th 713, 718.) On appeal from the ensuing judgment, we review the trial court's conclusions of law independently and its findings of fact for substantial evidence. (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 513; Swanson v. Skiff (1979) 92 Cal.App.3d 805, 808.) All conflicts in the evidence are resolved in favor of the trial court's findings. (Bancroft-Whitney Co. v. McHugh (1913) 166 Cal. 140, 142; Oldham v. Kizer (1991) 235 Cal.App.3d 1046, 1057.) And finally, where, as here, no party files a written objection to the statement of decision on the ground the statement omitted a finding on a material issue, we assume the existence of any findings and conclusions favorable to the respondent in support of the judgment. (Code Civ. Proc., § 634; Cal. Rules of Court, rule 3.1590(f); In re Marriage of Dawley (1976) 17 Cal.3d 342, 354; County of Solano v. Vallejo Redevelopment Agency (1999) 75 Cal.App.4th 1262, 1276-1277.)
DISCUSSION
Summers contends the judgment must be reversed because the trial court "erred in finding that [SoCal] could recover in quasi-contract under the facts of this case" and because SoCal "presented no competent evidence as to the appropriate measure of damages." Summers then combines and summarizes these contentions under a separate argument headed "The court committed errors of law and made an inconsistent ruling." (Capitalization omitted.) We reject his specific contentions but conclude the trial court did not apply the correct measure of recovery and that a remand for the limited purpose of determining the proper amount of restitution is required.
"Quasi-contract" is a term used to describe the basis for the remedy of restitution awarded in a quantum meruit case. A quasi-contract is not a true contract, because it is based on neither the voluntary intention of the parties to undertake the performances in question nor an exchange of promises. Rather, a quasi-contract is an obligation imposed by law to prevent unjust enrichment by requiring a party who has obtained a benefit from services requested to pay the party who performed the services their reasonable value. (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 794; Moulin v. Columbet (1863) 22 Cal. 508, 510; Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 346; McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, fn. 6.)
A. The Trial Court Properly Concluded SoCal Was Entitled to Recovery in Quantum Meruit
The trial court granted SoCal relief on a theory of quantum meruit. Quantum meruit is the principle that the law implies a promise to pay for services performed under circumstances indicating they were not rendered gratuitously. (Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 458 (Huskinson & Brown).) Recovery is available only when both parties intended, understood or expected that the provider of the services would be compensated. (Ibid.; Long v. Rumsey (1938) 12 Cal.2d 334, 342.) Recovery is also limited to cases in which the services have provided "some benefit" to the defendant. (Maglica v. Maglica (1998) 66 Cal.App.4th 442, 450 (Maglica); see also Major-Blakeney Corp. v. Jenkins (1953) 121 Cal.App.2d 325, 340 ["Where no benefit has been received, the law will not raise an obligation to make restitution or imply a contract to pay."].) Thus, to recover in quantum meruit, the plaintiff must prove that (1) the defendant expressly or impliedly requested the services from the plaintiff; and (2) the services were intended to, and actually did, benefit the defendant. (Advanced Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1673 (Advanced Choices); Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 248 (Day).) As we shall explain below, the record supports the trial court's conclusion that SoCal met these requirements.
1. The Parties Expected SoCal Would Be Paid for Installing the New Roof
We have no difficulty concluding Summers and SoCal both intended, expected and understood that SoCal would be compensated for installing the new roof. All of the proposals SoCal sent Summers contained price terms, thereby indicating SoCal expected to be paid. In the offer he altered, signed and returned to SoCal, Summers actually agreed to the $19,722 price, but he did not agree to the method of payment. In a letter to Sicklesteel written after the roof was installed, Summers provided his credit card information and thereby again offered to pay $19,722 for the roof installed by SoCal. Based on these facts, the trial court correctly found that "Summers did want a roof" and "[o]n any number of occasions... manifested his willingness to pay $19,722 for a new roof as long as he could pay by credit card." Nothing more was required for the trial court to conclude that Summers expressly or impliedly requested SoCal's services. (See, e.g., Producers Cotton Oil Co. v. Amstar Corp. (1988) 197 Cal.App.3d 638, 659 ["the facts satisfy the requirement that a recipient of services performed either requested or acquiesced in them"]; Gray v. Whitmore (1971) 17 Cal.App.3d 1, 24 [" 'Where one person performs for another, with the other's knowledge, a useful service of a character usually charged for, and the latter expresses no dissent, or avails himself of the service, a promise to pay the reasonable value of the services is implied.' "].)
2. Summers Received a Benefit from Installation of the New Roof
We also have no difficulty concluding Summers benefited from SoCal's services. In the context of quantum meruit and other claims for restitution designed to avoid unjust enrichment, the term "benefit" is defined broadly to include " 'any form of advantage' "; thus, "a benefit is conferred not only when one adds to the property of another, but also when one saves the other from expense or loss." (Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51, citing Rest., Restitution, § 1, com. b, p. 12.) In particular, making an improvement to real property is a benefit sufficient to support a quantum meruit claim. (See, e.g., Beley v. Municipal Court (1979) 100 Cal.App.3d 5, 8 [when contract was cancelled, seller could recover from buyer in quantum meruit for remodeling home].) Here, SoCal added to Summers's property by installing a new roof on his commercial building. Additionally, SoCal saved Summers from loss or expense by replacing a roof he testified was leaking and by making improvements that would allow him to obtain tax benefits he testified he wanted. This evidence supports the trial court's explicit finding that "the roof [Summers] wanted may be the roof that he ultimately received" and its implicit conclusion that Summers received a benefit from SoCal's work sufficient to support an award in quantum meruit.
3. Summers's Contentions SoCal May Not Recover in Quantum Meruit Are Not Persuasive
Summers contends SoCal "confer[red] a benefit officiously" and cannot "establish the 'unjust' element of its claim." According to Summers, SoCal cannot recover because it performed the work without a contract, and there was no misrepresentation, mistake (other than SoCal's unilateral error in scheduling the job as if there had been a contract) or other conduct on Summers's part that would justify an award of restitution. Summers instead views the new roof as "an unconditional gift" from SoCal. We disagree.
We reject Summers's suggestion that the absence of a binding contract somehow prevents SoCal from recovering compensation. To recover in quantum meruit, the plaintiff does not have to prove it had a contract with the defendant. (Huskinson & Brown, supra, 32 Cal.4th at p. 458; Maglica, supra, 66 Cal.App.4th at p. 449.) Indeed, the existence of a contract on the same subject matter would preclude quantum meruit recovery: We have held that "as a matter of law, a quasi-contract action for unjust enrichment does not lie where... express binding agreements exist and define the parties' rights." (California Medical Assn. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172; accord, Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370.) Hence, it is precisely because the parties did not have a contract that the trial court could, and did, award compensation under a quantum meruit theory.
The trial court ruled there was no contract because Summers insisted on paying for the new roof by credit card but SoCal would not accept credit card payments. The parties do not challenge this ruling on appeal.
Summers's reliance on cases that denied restitution when the parties had an enforceable contract is therefore misplaced. (See California Federal Bank v. Matreyek (1992) 8 Cal.App.4th 125 [bank not entitled to rescission and restitution from borrowers when bank made unilateral mistake]; Wal-Noon Corp. v. Hill (1975) 45 Cal.App.3d 605 [lessees that repaired roof could not recover from lessors on implied contract theory because lease covered parties' obligations concerning repairs].)
We also reject Summers's contention that SoCal installed the new roof "officiously." Summers correctly points out that one who confers a benefit on another officiously, i.e., by unwarranted meddling in the other's affairs, is not entitled to restitution. (Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1316; Rest., Restitution, §§ 2, 112.) But, as Summers acknowledges, restitution is appropriate when the benefits were conferred by mistake, fraud or coercion or upon request. (Dinosaur Development, at p. 1316; Rest., Restitution, § 2, com. a, p. 16; id., § 112, com. a, pp. 461-462.) Although this case does not involve fraud or coercion, there was evidence discussed in the trial court's statement of decision that Summers had requested the new roof from SoCal and that, through miscommunication, SoCal's production manager mistakenly believed SoCal had an agreement with Summers to replace the roof. Although the testimony was conflicting on these points, it was for the trial court to resolve the conflict, and its resolution in favor of SoCal must be accepted, where, as here, it is supported by substantial evidence. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053; Primm v. Primm (1956) 46 Cal.2d 690, 693-694; Escobar v. Flores (2010) 183 Cal.App.4th 737, 752.)
None of the authorities cited by Summers that we have not already mentioned persuades us that SoCal is not entitled to recover in quantum meruit. Summers misplaces reliance on Day, supra, 98 Cal.App.4th 243, where quantum meruit recovery was unavailable because, unlike here, the defendant had neither requested nor benefited from the services for which the plaintiff sought compensation. (Id. at pp. 249-251.) Cases cited by Summers holding plaintiffs could not recover payments they already had voluntarily and knowingly made to defendants (Myers v. City of Calipatria (1934) 140 Cal.App. 295, 299-300; Shelley v. Board of Trade (1927) 87 Cal.App. 344, 349-350) are not on point because they did not consider quantum meruit claims. (See Santa Clara County Local Transportation Authority. v. Guardino (1995) 11 Cal.4th 220, 243 ["an opinion is not authority for an issue not considered therein"].) Summers's citation of Stein v. Simpson (1951) 37 Cal.2d 79, which holds that one who confers a benefit through fraud is not entitled to restitution, is also inapt because this case does not involve any fraud or other intentional wrongdoing by SoCal. Finally, Summers cannot rely on Civil Code section 1584.5, which allows a recipient of unsolicited goods or services as part of an offer for additional goods or services to treat them as "an unconditional gift, " because he solicited the offer for roofing services from SoCal and because SoCal is not in the business of replacing roofs to induce recipients to buy additional services. (See Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 51 [Civ. Code, § 1584.5 is "directed at sellers marketing products or services to consumers"].)
In sum, we find no merit in any of Summers's contentions that relief in quantum meruit is unavailable to SoCal. Rather, we conclude the trial court correctly determined that SoCal is entitled to restitution on the facts presented at trial.
B. The Trial Court Did Not Apply the Correct Measure of Recovery
Summers contends the award of $17,722 to SoCal must be reversed because the trial court did not apply the correct measure of recovery. According to Summers, the trial court "simply found it was fundamentally fair to award the price that Summers would have agreed to at one time, had there been a contract, " when it should have awarded the lesser of the amount by which the new roof increased the value of Summers's property or the value of the labor and materials used to install the new roof. Summers also contends SoCal did not introduce any competent evidence on either of the alternative recovery measures he proposes. We agree with Summers in part.
The trial court based its award of $17,722 to SoCal on its view that "[o]n an equitable theory, it hardly seems unfair to measure Summers's unjust enrichment by the amount he was willing to pay, assuming he can also obtain the value to him of paying by credit card." The court calculated the $17,722 figure by subtracting the value of the two round-trip airline tickets Summers would have received had he paid for the new roof by credit card ($2,000) from the price contained in the parties' proposals ($19,722). The court stated that "if $2,000 were deducted from the contract price that Summers agreed to pay, it would seem that Summers had received the benefit of his bargain, at least in that regard." In fact, because SoCal could not recover prejudgment interest, the trial court concluded "Summers has received more than the benefit of his bargain."
The references in the statement of decision to equity and fairness and the focus on the "agreed" contract price and benefit of the bargain indicate the trial court was using contract principles in fashioning an award it considered just. A court, however, may not invoke principles of fundamental fairness to impose on the parties a contract they never made. (See Maglica, supra, 66 Cal.App.4th at p. 451 [court cannot "use quantum meruit to impose a highly generous and extraordinary contract that the parties did not make"]; Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1420 ["When parties have an actual contract covering a subject, a court cannot - not even under the guise of equity jurisprudence - substitute the court's own concepts of fairness regarding that subject in place of the parties' own contract."].) Moreover, "the originally agreed upon fee 'cannot be held to be the controlling or dominant consideration' in an action under quantum meruit." (Crockett & Myers, Ltd. v. Napier, Fitzgerald & Kirby, LLP (9th Cir. 2009) 583 F.3d 1232, 1238 (Crockett & Myers).) The trial court therefore erred in using the measure of damages for breach of contract and the price contained in the parties' offer and counteroffer as the controlling factors in calculating SoCal's restitution award.
Benefit of the bargain is the usual measure of damages for breach of contract. (Coughlin v. Blair (1953) 41 Cal.2d 587, 603; New West Charter Middle School v. Los Angeles Unified School Dist. (2010) 187 Cal.App.4th 831, 844.)
To determine the amount of SoCal's restitution award, the trial court should have calculated the reasonable market value of the roofing services SoCal provided Summers. The measure of recovery in quantum meruit is the reasonable value of the services the plaintiff performed for the defendant. (Palmer v. Gregg (1967) 65 Cal.2d 657, 660; Advanced Choices, supra, 182 Cal.App.4th at p. 1673; see also Black's Law Dict. (9th ed. 2009) p. 1361, col. 2. ["quantum meruit" is "Latin [for] 'as much as he has deserved' "].) This measure has been described as the "going rate" for the services (Maglica, supra, 66 Cal.App.4th at p. 446) or "the reasonable market value at the current market prices for such labor and materials" (Punton v. Sapp Bros. Construction Co. (1956) 143 Cal.App.2d 696, 701). Reasonable value includes the actual cost of labor and materials as well as reasonable allowances for overhead and profit. (See, e.g., Earhart v. William Low Co. (1979) 25 Cal.3d 503, 510; Coastal Timbers, Inc. v. Regard (La.Ct.App. 1986) 483 So.2d 1110, 1113; Wells v. Scott (1969) 75 Wash.2d 922, 924 [454 P.2d 378, 380].) The burden is on the plaintiff to prove the reasonable value of the services (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1344) through such evidence as (1) testimony or invoices regarding the amount of labor and materials (Sims v. Petaluma Gas Light Co. (1901) 131 Cal. 656, 661; Punton, at p. 701); (2) expert testimony (Seib v. Mitchell (1935) 10 Cal.App.2d 91, 95; Laiblin v. San Joaquin Agr. Corp. (1923) 60 Cal.App. 516, 532); and (3) an agreed price set forth in a contract that was terminated or turned out to be unenforceable or invalid (Oliver v. Campbell (1954) 43 Cal.2d 298, 304-305; George v. Double D Foods, Inc. (1984) 155 Cal.App.3d 36, 42 (George)).
Because the "legal test for recovery in quantum meruit is not the value of the benefit, but value of the services" (Maglica, supra, 66 Cal.App.4th at p. 446), SoCal did not have to present evidence of the amount by which the new roof increased the value of Summers's building, as Summers repeatedly insists in his brief.
SoCal introduced such evidence at trial. Its sales manager testified about what portion of its bill was attributable to cost of labor and materials and what portion represented profit. SoCal also called the owner of a construction management and consulting company who gave his expert opinion about the reasonable value of the roofing services SoCal performed on Summers's building. There was also the $19,722 price figure contained in the parties' offer and counteroffer introduced at trial, which is "relevant as some evidence, or a criterion, of the reasonable value of the services rendered." (George, supra, 155 Cal.App.3d at p. 42, italics added.) In addition, SoCal's production manager testified the work was completed in three days, and there were photographs and other evidence indicating the general nature and scope of the work. We therefore reject Summers's contention that SoCal presented no competent evidence from which the trial court could determine the appropriate measure of restitution.
The $19,722 price is not necessarily determinative, however. "Contract price and the reasonable value of services rendered are two separate things; sometimes the reasonable value of services exceeds a contract price. [Citation.] And sometimes it does not." (Maglica, supra, 66 Cal.App.4th at p. 450.)
Even without specific evidence on value, the trial court would have discretion to determine the amount of restitution to award SoCal. Where, as here, the services are of a type within common knowledge and their general nature and scope have been shown, the trier of fact may use its own experience and judgment to fix the reasonable value of the services. (Culver Adjustment Bureau v. Hawkins Constr. Co. (1963) 217 Cal.App.2d 143, 146; Pensa v. Noffsinger (1951) 105 Cal.App.2d 99, 101; Collier v. Landram (1945) 67 Cal.App.2d 752, 759.)
As we have seen, however, the trial court did not apply the correct measure of recovery in quantum meruit to the relevant evidence in determining its restitution award. Where, as here, the wrong measure of compensation was applied but the record supports the finding of liability, we may reverse and remand solely for a new determination of the amount of compensation. (Pretzer v. California Transit Co. (1930) 211 Cal. 202, 209; Housley v. City of Poway (1993) 20 Cal.App.4th 801, 814; Carter v. Carr (1934) 139 Cal.App. 15, 30; see also Crockett & Myers, supra, 583 F.3d at p. 1239 [vacating judgment and remanding for recalculation of amount of restitution in quantum meruit case in which trial court used wrong measure of restitution].) We do so here.
C. SoCal Is Not Entitled to Prejudgment Interest on the Restitution Award
SoCal contends it is entitled to prejudgment interest on its restitution award. The trial court did not award such interest and noted in its statement of decision that "SoCal concedes there is no basis for it to seek interest on a quantum meruit award." Since SoCal did not file a notice of appeal or cross-appeal, it "forfeited [its] right to seek reversal of this portion of the trial court's [judgment]." (Townsend v. Townsend (2009) 171 Cal.App.4th 389, 398.) In any event, "[i]t is well established that where there is no express contract and the action is in quantum meruit to recover the reasonable value of services rendered, interest is not recoverable prior to judgment." (Parker v. Maier Brewing Co. (1960) 180 Cal.App.2d 630, 634.)
DISPOSITION
The judgment is reversed and the case is remanded to the trial court for the limited purpose of recalculating the amount of restitution to be awarded based on the evidence already in the record and in accordance with the views expressed in this opinion. Once the amount is determined, the trial court shall enter judgment for SoCal in that amount. The parties shall bear their own costs on appeal.
WE CONCUR: HUFFMAN, Acting P. J. O'ROURKE, J.