New Jersey appeals court overturns quantum meruit jury verdict

By Chandra Lye | Apr 18, 2017

TRENTON, N.J. (Legal Newsline) – The appellate division of the Superior Court of New Jersey on April 10 reversed the decision of a jury in a construction case that involved the awarding of damages under a quantum meruit theory.

The lawsuit arose from a dispute in the construction of a building in which a jury found that the plaintiff, New York-Connecticut Development Corp., breached the contract but was still awarded damages under a quantum meruit theory.

New York-Connecticut Development Corp. (NYCT) and the defendant, Blinds to Go, had an agreement that the plaintiff would build the defendant’s corporate headquarters. They both signed a Guaranteed Cost (GC) Contract Cost Plus Fee with GMP. The building was to be completed by Sept. 15, 2011. The project’s total price was $4 million, which included a guaranteed price of $3.8 million and a $200,000 fixed GC fee. 

They also agreed that NYCT would use change orders to let Blinds to Go know about any extra work needed that was not already in the plans. Throughout the construction, there were 13 change orders supplied to the defendant. The cost of those was $461,000 in addition to the $4 million. The orders were approved in August 2011, according to court documents.

However, the building was not completed by Sept. 15, 2011, but instead the defendant was given a certificate of occupancy on March 16, 2012. The defendant informed the plaintiff that it would pay the requisition once the certificate of occupancy, release of liens and the punch list was completed. Although NYCT did not complete the punch list, Blinds to Go paid the requisition a few days later.

NYCT submitted a new requisition in June that contained an additional $1 million for unapproved changes. The defendant offered a compromise of the amount, but the plaintiff did not respond and instead filed a lawsuit. 

A jury trial was held on March 15 - April 2, 2015.

In its decision, the appeals court cited Kas Oriental Rugs v. Ellman as establishing that when there is an existing contract it excludes relief based on quantum meruit. Thus, “Once the jury found there was an enforceable contract between the parties, plaintiff was not entitled to recover damages under quantum meruit."

“The failure to provide clear and correct jury charges and instructions on the verdict sheet is error and requires a reversal of the verdict in this case,” the decision stated.

The appeals court decision, written by Judge Heidi Willis Currier, stated it was erroneous for the jury to be directed to consider quantum meruit theory once it had determined a contract existed.  

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