[NOT FOR PUBLICATION-NOT TO BE CITED AS PRECEDENT]
United States Court of Appeals
For the First Circuit
No. 99-1593
ABINGTON CONSTRUCTORS, INC.,
Plaintiff, Appellee,
v.
MADISON PAPER INDUSTRIES,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Eugene W. Beaulieu, U.S. Magistrate Judge]
Before
Selya, Circuit Judge,
Coffin, Senior Circuit Judge,
and Boudin, Circuit Judge.
Charles Harvey for appellant.
John H. Montgomery with whom Daniel J. Mitchell was on brief for appellee.
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March 21, 2000 |
COFFIN, Senior Circuit Judge. Defendant-appellant Madison Paper Industries appeals from a decision of the district court granting plaintiff-appellee Abington Constructors, Inc. quantum meruit relief for extra-contractual construction work. Applying Maine law in this diversity case, we conclude that quantum meruit recovery is not precluded by the existence of an express contract between the parties and that the evidence permitted the court to find that the elements of quantum meruit existed. We therefore affirm the judgment.
I. BackgroundNeither party challenges the district court's factual findings and we therefore borrow liberally from its rendition of the facts. See Abington Constructors, Inc. v. Madison Paper Indus., Civ. No. 98-0048-B (D. Me. Mar. 31, 1999). Madison is the owner and operator of Anson Dam, a hydroelectric facility on the Kennebec River in central Maine, which consists of a dam, a waste gate, and a power station. In May 1996, Madison requested bids on a project to reconstruct the Anson Dam waste gate and repair the power station. In order to conduct the repairs, both an "upstream" and a "downstream" cofferdam (an enclosure from which water is pumped to allow construction on the exposed bottom of a body of water) were necessary because much of the work would be done below the water level of the river. The downstream cofferdam was located in a "tail pond" into which water flowed after passing under the power station and turning the turbines.
The project manual that Madison provided to bidders contained a "Form of Contract" (FOC) (an agreement to be signed by Madison and the chosen contractor), conditions to the FOC, technical specifications, and a list of contract drawings. The FOC stated that a bidder could rely on "the general accuracy of the 'technical data'" in the materials but authorized only "limited reliance" on drawings.
The bidding instructions informed prospective bidders that they would be granted access to the site to perform any necessary testing and placed responsibility on the bidder to be familiar with the site terrain. When Abington visited the site to conduct an inspection, the river flows were too high for it to survey the river. When Madison's project manager later invited Abington to revisit the site, Abington declined. Relying on water flow and bottom elevation data in the project manual, Abington submitted what turned out to be the lowest bid, agreeing to do the work for $808,500.
In its bid form, Abington represented as follows:
BIDDER has obtained and carefully studied (and assumes responsibility for obtaining and carefully studying) all such examinations, investigations, site visits, explorations, tests and studies . . . which pertain to the subsurface or physical conditions at the site or otherwise may affect the cost, progress, performance or furnishing of the Work as BIDDER considers necessary for the performance or furnishing of the Work at the Contract Price, within the Contract Time and in accordance with the other terms and conditions of the Contract Documents . . . .
Although the FOC had been included in the project manual, the parties agreed to forego the FOC and instead Madison issued a purchase order to Abington to signal its acceptance of Abington's bid, creating a contract. The purchase order referenced the project manual as well as Abington's bid form in describing the work to be performed. The district court found that the parties intended the purchase order to act as a substitute for signing the FOC and that there was mutual assent to incorporate the project manual and the bid form. The court also found that Abington committed a breach, although not in bad faith, by failing to conduct its own investigation.
Before constructing the downstream cofferdam, Abington investigated the contour of the relevant area of river bottom. The project manual drawings recorded the average level of the tail pond to be 222.65 feet above sea level, although it was actually 223.65 feet above sea level on average. Further, the drawings did not reveal several deep contours in the area where the cofferdam was to be constructed. The design for the cofferdam was created by a professional engineer retained by Abington and approved by an engineering firm employed by Madison.
In July 1996, Abington began construction of the downstream cofferdam and was forced to use 300 bulk bags filled with sand and 5000 smaller bags, rather than the 180 bulk bags and 250 smaller bags it had initially allocated, due to water levels and river bottom configurations that were different from specifications in the project manual. The route of the cofferdam also had to be altered due to the river bottom configuration. The cofferdam stood between 224 and 226 feet above sea level and a liner was placed over the bags to prevent leaks.
When Abington first noted the discrepancies between the site measurements and their specifications in the project manual, it conveyed to Madison its fears that surmounting these obstacles would create additional costs. It later memorialized its concern in a letter to Madison stating that it was compiling the costs associated with overcoming the unexpected conditions and requested that a change order be issued. Madison, however, did not respond. To further complicate matters, over the next several months a series of floods caused extensive delay on the project. The FOC provided that when high water flows caused delay, Abington would be granted an extension of time equal to the length of the delay. The FOC placed responsibility for any overtopping of the cofferdams due to the high water flows on the contractor: "If river elevations increase to the extent that the cofferdams are overtopped and construction areas are flooded, the Owner will assume no responsibility for flooding." Nevertheless, prior to awarding Abington the project, Madison issued an addendum ("Addendum I"), stating that "[i]n the unlikely event of a major flood, [Madison] will pay the direct replacement costs of coffer dams provided coffer dams have been completed and approved by [Madison] prior to flooding. . . . Downstream coffer to be constructed to elevation 226.25."
From August to October, a series of interactions between the parties occurred in which Madison indicated that it would cover some, if not all, of the additional costs caused by the faulty specifications and high water flows. Madison's project engineer, Steve Small, told Abington's project manager, John Tardif, that it would assume responsibility for the direct costs of future overtopping if Abington spared the cost of placing additional bulk bags on the cofferdam. The court found that although this did not constitute a formal agreement, Abington relied on this statement in continuing to work on the project during subsequent high water flows even though it was entitled to delay performance under the terms of the contract. By mid-October it was working seven days a week in hopes of completing the project on schedule.
Abington also sent Small a written memo entitled "Confirm Verbal Agreements," seeking a change order and reiterating Abington's position that the costs associated with repairs and dewatering of the site due to the previous flooding would be covered by Madison pursuant to Addendum I of the contract, although the memo inadvertently referred to Addendum II rather than Addendum I.(1) In response, Small signed the document but circled "covered under Addendum II" and wrote "No as mutually agreed upon by [Madison] and Abington," in reference to his discussion with Tardif.
October construction meeting minutes show that Madison was awaiting the submission by Abington of its cost overruns. Abington subsequently submitted documentation that it had incurred $180,000 in additional costs. Small then cautioned Tardif that he was not authorized to approve the amount and that new management might not be willing to pay all the additional costs. Small nevertheless reiterated that Madison wanted to be fair but was concerned that Abington was not assuming adequate responsibility for its share of the additional costs. Moreover, at several subsequent construction meetings, Madison indicated either that it was reviewing the cost overruns or that they would be dealt with at the end of the job, never stating that it refused to pay. Madison's internal documents from this period show that it planned to set aside $100,000 for anticipated extra costs.
Madison's interest in completing the job on schedule stemmed from the fact that it stood to gain approximately $300,000 annually from the completion of both phases of the construction at Anson Dam, the first of which was the repair work being performed by Abington. The project was eventually completed at the end of January 1997.
Abington incurred $404,738 in disputed costs above budget. After assuming responsibility for over $121,000 in costs, Abington claimed $283,680 from Madison in costs and an additional 17.8% allowance, or $50,495, for overhead and profit, for a total of $334,175. Abington's complaint suggested a number of theories of liability including quantum meruit, unjust enrichment, mutual mistake, impracticability, and breach of contract. The district court found that although the parties had a contractual agreement, Abington was entitled to quantum meruit recovery for the additional work and costs resulting from the defects in the data in the project manual combined with high water flows which were the subject of post-contractual communications between the parties. It granted Abington an award of $334,175, the reasonable value of its services, but did not reach Abington's remaining theories of liability.
Madison appeals, contending that quantum meruit recovery is not available under Maine law when the parties have negotiated a contractual agreement and, even if it were available, the predicate elements for quantum meruit recovery are not found in this case.
II. DiscussionThe principal issue before the district court was whether a contract existed between the parties. The district court found, and neither party protests on appeal, that the purchase order constituted a written contract that included by reference the project manual and the bid proposal. Given that, the district court concluded that: "[the] contract . . . placed the risk of high water flows, the variable elevation of the tail pond, and conditions of the river bottom on Abington." Nevertheless, the district court held that Abington was entitled to quantum meruit relief because Madison created the reasonable expectation that Abington would be paid for the cost overruns and Abington did not delay work during the high flow periods, despite its contractual right to do so. Madison challenges primarily this aspect of the decision, arguing that the written contract governed the situation and thus a quantum meruit remedy is unavailable to Abington. Because this is an issue of law, we review it de novo. See United States v. Cunningham, 113 F.3d 289, 291 (lst Cir. 1997).
A. Availability of Quantum Meruit Recovery
In urging their respective positions on the availability of quantum meruit relief, the parties each rely on a district court decision that is in direct conflict with the other. Madison relies on an unreported 1995 decision of the district court, holding that under Maine law, "without a breach of contract, fraud or other circumstances that render the contract inoperative, [a party to a contract] is foreclosed from seeking additional payment outside the contract terms under his quantum meruit or unjust enrichment theories." Hodgkins v. New England Tel. and Tel. Co., Civ. No. 94-231-P-H, 1995 WL 431390, at *4 (D. Me. July 6, 1996), aff'd in part and rev'd in part, 82 F.3d 1226 (lst Cir. 1996). In particular, Madison makes the point that one cannot obtain quantum meruit relief where a written contract explicitly covers the contested issue.
Taking the opposite stance, Abington contends that under Maine law a contract implied in fact, allowing quantum meruit relief, may indeed exist alongside an express contract. Abington relies heavily on another district court decision holding that although some states bar recovery in quantum meruit "when a valid written agreement covers the construction work at issue . . . the Maine Law Court has not set forth such an absolute rule." Combustion Eng'g v. Miller Hydro Group, 812 F. Supp. 260, 262 (D. Me. 1992), aff'd, 13 F.3d 437 (lst Cir. 1993).
In Combustion Engineering, after a jury found that a contract existed and that both parties had committed breaches, but that neither party was entitled to damages, the district court held that Maine law did not prohibit equitable relief under quantum meruit, unjust enrichment, or promissory estoppel theories. See id. at 262.(2) The court held that although other jurisdictions did so, Maine did not bar quantum meruit relief when a valid written agreement covered the work at issue, but declined to award such recovery to the plaintiff who had not only breached the contract but also made fraudulent misrepresentations and omissions. See id. at 262, 264.(3)
Both district court decisions cited state precedents. We now examine the state authority, beginning with the cases relied on in Combustion Engineering, which, with one exception, cited older cases than those referenced in Hodgkins. The court in Combustion Engineering took note of Aroostook Valley Railroad Co. v. Bangor & Aroostook Railroad Co., 455 A.2d 431 (Me. 1983), in which the court held that "[w]hen two parties have agreed upon specific and unambiguous terms of compensation for specified services by means of an express contract, . . . the law should be most hesitant to imply a second contract, which covers the same subject matter, if the evidence does not compel an inference that the parties intended to make one." Id. at 433 (emphasis added) (rejecting plaintiff's claim that negotiations entered into subsequent to the contract superimposed an implied obligation to renegotiate the contract). Aroostook Valley leaves the door open for recovery based upon the parties' supplementation of an existing contract. The court also took note of Gosselin v. Better Homes, Inc., 256 A.2d 629 (Me. 1969), in which the court permitted recovery for the fair and reasonable value of services when an express construction contract was not fulfilled, because the constructor breached his "implied obligation to perform in a reasonably skilful and workmanlike manner," but the buyer had received and accepted the benefit of construction. See id. at 640.
In Hodgkins, the district court grappled with the contractual and quasi-contractual claims of an employee who had come up with a cost-saving idea for his company through an employee reward program. See Hodgkins, 1995 WL 431390, at *4. The court then held that the employee was ineligible for quasi-contractual recovery because a contract existed, relying on several Maine cases, namely, Top of the Track Associates v. Lewiston Raceways, Inc., 654 A.2d 1293 (Me. 1995); Jordan v. Boothbay Region Refuse Disposal District, 656 A.2d 740 (Me. 1995); and Prest v. Inhabitants of Farmington, 104 A. 521 (Me. 1918).(4)
In Top of the Track, the court held, without citation, that a contract between the parties necessarily foreclosed the plaintiff's claim for unjust enrichment, although claims for quantum meruit were not asserted. See Top of the Track, 654 A.2d at 1296. In Jordan, decided one month after Top of the Track, the court denied an unjust enrichment claim on the basis that the defendant had not been unjustly enriched, seemingly entertaining plaintiff's claims even though a contract existed between the parties. See Jordan, 656 A.2d at 742. These cases are of limited application, however, due to the Maine court's painstaking efforts to differentiate between unjust enrichment and quantum meruit.
The court has repeatedly explained that "quantum meruit, also sometimes labelled 'contract implied in fact,' involves recovery for services or materials provided under an implied contract"; unjust enrichment, on the other hand, "describes recovery for the value of the benefit retained when there is no contractual relationship, but when, on the grounds of fairness and justice, the law compels performance of a legal and moral duty to pay." Paffhausen v. Balano, 708 A.2d 269, 271 (Me. 1998); see also Danforth v. Ruotolo, 650 A.2d 1334, 1335 n.2 (Me. 1994); Aladdin Elec. Assocs. v. Town of Old Orchard Beach, 645 A.2d 1142, 1145 (Me. 1994); A.F.A.B., Inc. v. Town of Old Orchard Beach, 639 A.2d 103, 105 n.3 (Me. 1994). The court has also explained that its prior use of the term "quasi-contract" as a blanket label for both unjust enrichment and quantum meruit claims was misleading because it suggested that quantum meruit recovery is not based on contractual principles. See Paffhausen, 708 A.2d at 271 n.3 (citing Danforth, 650 A.2d at 1335).(5)
The final case cited in Hodgkins, Prest, deserves a particularly careful reading because it encompasses two separate ideas. In Prest, the court held that a sewer contractor, who had incurred extra costs during construction, was not entitled to recover on the theory of indebitatus assumpsit based on alleged misrepresentations by the defendants. See Prest, 104 A. at 523-24. This was so because the contractor had agreed to do the work at a specified sum and when he discovered the alleged fraud of the defendants, he was entitled to repudiate the contract and sue for deceit, but he did not do so. See id. at 523 ("By bringing the action in assumpsit, the plaintiff affirmed the contract."). The court held that "[w]here a party agrees to do work at a specified sum under a fraudulent representation, he can only recover, in an action of indebitatus assumpsit, according to the terms of the contract, although, when he discovered the fraud, he might have repudiated the contract and sued for deceit." Id.
Nevertheless, and most significantly for this case, the court in Prest also held that certain extra costs incurred by the plaintiff were recoverable. See id. at 524-25. The court found that where there was evidence that the defendants directed the plaintiff to perform extra-contractual work the plaintiff was entitled to recover. Whereas the plaintiff's indebitatus assumpsit claim was denied on the basis that it had been brought under a form of action recognizing a contract and was based on allegations of fraud, his claims for costs of extra work, including work that was the subject of the original agreement, incurred at the behest of defendants and with their knowledge, were entertained and in some instances allowed. See id. at 523-25. In other words, the Maine court implicitly recognized that a quantum meruit claim could properly co-exist with a written contract.
In short, none of the cases relied on by the district court in Hodgkins forecloses the possibility of quantum meruit relief even though the parties have entered into a contract.(6) Further, both Prest and Aroostook Valley provide authority for the proposition that extra-contractual recovery may be had even when an express contract covers the subject matter, if the evidence allows.
A leading practice manual echoes this point:
The fact that two parties have entered into an express contract for goods, labor, or services does not necessarily limit them to traditional contract remedies against each other. . . .
. . . .
If one party to the express contract does more than is required under the contract, and the other party accepts the benefit of the extra work or materials, the first party is entitled to recover the fair and reasonable value of the extra performance.
Andrew M. Horton & Peggy L. McGehee, Maine Civil Remedies § 11-2(a)(2), at 249-50 (3d ed. 1996) (footnotes omitted). We note recognition of the principle that parties may create extra-contractual understandings outside the context of Maine law in Professor Corbin's treatise on contracts. In a section entitled "Effect of an Express Promise in Excluding the Implication of a Different One," he writes:
The statement is frequently found that where the parties have made an express contract the law will not imply one. This is a misleading statement, even though some truth is concealed within it. It is more accurate, even though not very useful as a working rule to say that where the parties have made an express contract, the court should not find a different one by 'implication' concerning the same subject matter if the evidence does not justify an inference that they intended to make one. . . . [T]he fact that an express contract has been made does not prevent the parties from making another one tacitly, concerning the same subject matter or a different one. Further, innumerable cases show that the fact that a contract has been put into express words does not prevent the meaning and legal operation of those words from being affected by the process of 'implication' from the conduct of the parties and from surrounding circumstances.
3 Arthur Linton Corbin, Corbin on Contracts § 564, at 292-95 (1960) (emphasis added) (footnotes omitted) (collecting cases). Corbin further notes that such modifications occur frequently in the construction setting:
It is very common in building transactions for the parties to execute a detailed and formal contract and yet to vary the plans and specifications as the work proceeds. The claims to compensation are ample evidence of this. If such extra work is requested or authorized by the owner or his engineer, payment must be made for it even though no promise to pay was made in express words.
Id. at 296.
We thus believe that, at this time, Maine law permits Abington's claim for quantum meruit relief. Although the Maine court has sensibly noted that "courts should not re-write contracts, particularly commercial agreements between two corporations of equal bargaining strength," Aroostook Valley, 455 A.2d at 433, in this case the parties, not the court, altered their relationship in response to changed conditions. The hurdle is high, but if good faith efforts in the field to meet such conditions and get on with the job could always be trumped by the original written contract, the arteries of commerce, particularly in construction, would harden.
We add a final observation. The district court concluded that Maine law requires good faith to recover in quantum meruit. See Carvel Co. v. Spencer Press, Inc., 708 A.2d 1033, 1036 n.2 (Me. 1998) ("Carvel's failure to perform in good faith bars it from recovery in quantum meruit." (citing Levine v. Reynolds, 54 A.2d 514, 517 (Me. 1947))). Nevertheless, the district court found that Abington's breach, not properly inspecting before bidding, was not committed in bad faith, and its "overall performance" throughout the term of the contract was "very good," according to Madison documents. Merely because a party commits a breach does not mean that it cannot recover if it has acted in good faith. See, e.g., Loyal Erectors, Inc. v. Hamilton & Son, Inc., 312 A.2d 748, 756 (Me. 1973) (equitable recovery may be allowed if plaintiff provided services "in an honest endeavor" to perform the contract even though plaintiff did not complete performance); Gosselin, 256 A.2d at 640 ("Where [the defendant breached] its implied obligation to perform in a reasonably skilful and workmanlike manner, but the plaintiff received the benefit of the house, accepted it and uses the same, the defendant-contractor is entitled to receive a fair and reasonable value for the services performed . . . ." (citing Rockland Poultry Co. v. Anderson, 91 A.2d 478 (Me. 1952); Norris v. School Dist. No. 1, 12 Me. 293 (1835); Jewett v. Weston, 11 Me. 346 (1834))).
B. Elements of Quantum Meruit
Under Maine law, a quantum meruit claimant must show that: "(1) services were rendered to the defendant by the plaintiff; (2) with the knowledge and consent of the defendant; and (3) under circumstances that make it reasonable for the plaintiff to expect payment." Bowden v. Grindle, 651 A.2d 347, 351 (Me. 1994). "While the formalities of an express contract are not a prerequisite to recovery in quantum meruit, there must be a reasonable expectation on the part of the claimant to receive compensation for his services and a 'concurrent intention' of the other party to compensate him." Paffhausen, 708 A.2d at 272.
We review the district court's decision that the elements of quantum meruit were present in this case for clear error. See, e.g., Crellin Tech. v. Equipmentlease Corp., 18 F.3d 1, 7 (lst Cir. 1994) (whether contract has been formed between two parties is question of fact); Gel Sys., Inc. v. Hyundai Eng'g & Constr. Co., 902 F.2d 1024, 1027 (lst Cir. 1990) (party's intention to contract is question of fact). Madison contends that as a matter of law Abington could not have had a reasonable expectation of payment and relies on Paffhausen to argue that we must review the district court's findings with respect to the elements of quantum meruit de novo because they constitute the application of law to facts. We disagree. Paffhausen involved a de novo review of the lower court's misunderstanding of the elements of quantum meruit and its resultant misapplication of the law to the facts. See Paffhausen, 708 A.2d at 272. In this case, there is no asserted error of law.
C. Sufficiency of Evidence Supporting Court's Award
Regarding the first element of quantum meruit, Madison denies that services were rendered to it by Abington. Madison argues that quantum meruit services must have value to the receiving party, citing Carvel Co., 708 A.2d at 1036, and that it did not retain any value from the additional work performed by Abington.
It is clear, however, that Madison stood to gain additional profit as soon as the construction was completed and that it readily encouraged Abington to complete the job as soon as possible. As the district court found, "[t]he total that Madison stood to gain from completion of both phases of the Anson project was approximately $300,000 annually. . . . Therefore, the sooner Abington could complete the . . . first phase the sooner Madison could realize their gains." Thus, Madison gained from Abington's extra efforts to timely complete the project.
Madison does not make a specific argument with regard to the second quantum meruit element. Regarding the third component, Madison argues that Abington could not have had a reasonable expectation of payment. The Maine court has held that an expectation of compensation is reasonable if the "services were rendered under circumstances consistent with contract relations." Colvin v. Barrett, 118 A.2d 775, 779 (Me. 1955). In determining reasonableness, all the surrounding circumstances should be considered. See Bourisk v. Amalfitano, 379 A.2d 149, 151 (Me. 1977).
"All that the law of quantum meruit requires [a plaintiff] to prove . . . is that he had a reasonable expectation that his work was not gratuitous, and that [the defendant] by her words or conduct justified this expectation." Paffhausen, 708 A.2d at 272; see also Colvin, 118 A.2d at 778 ("'It must appear that the one who rendered [the services] expected compensation and that the one who received the services so understood, or under the circumstances ought to have understood, and by his words or conduct or both justified the expectation.'" (quoting Cole v. Clark, 27 A. 186, 187 (Me. 1893))). In Paffhausen, the court found that when the deceased owner of the home to which plaintiff made improvements wrote that she gave full consent and support to the plaintiff to use the home as long as he needed it, the evidence fell short of proving a contract but justified quantum meruit recovery. See Paffhausen, 708 A.2d at 273.
In this case, the district court found that, for several reasons, Madison's statements created a reasonable expectation that Abington would be paid for the cost overruns:
First, Abington made Madison aware that it expected to be paid for the overruns once it began work on the site. Second, Madison never disputed that it owed Abington money for the overruns during the project. In fact, Madison gave repeated assurances to Abington that it treated its contractors fairly and that Abington's claim would be reviewed after the project was completed. Even when Madison first questioned the cost submission by Abington, it only stated that the costs may be somewhat high. Third, both Steve Small and Christopher Bean [of Madison] testified at trial that during construction they thought Abington was entitled to payment for the cost overruns. All these facts support Abington's contention that it was reasonable for it to expect payment for the cost overruns.
(Footnote omitted).
Madison strenuously argues that Abington's expectation was not reasonable because Abington itself caused the extra costs and the contract assigned the relevant risks to Abington. Even if Abington were encouraged to perform extra work, Madison contends, it was not entitled to form a reasonable expectation of payment for that additional work. Madison alleges that its statements to Abington constituted nothing more than a suggestion to "consider other options" or an agreement to negotiate.
The district court's findings were not clearly erroneous. The evidence revealed that Madison's statements were much more than agreements to entertain further discussion.(7) Moreover, regardless of the obligations in the contract, Madison indicated to Abington that it would take responsibility for the costs flowing from the defects in the project manual specifications, namely, the tail pond's sea level and bottom contours, as well as from high water flows.
With regard to the amount of the damages award, at trial Madison pointed to particular errors in Abington's accounting of its extra costs, although it has not renewed these contentions on appeal. On appeal, Madison makes the purely legal arguments that the amount of the award bears no relation to any value it retained but instead compensates Abington for the extra costs caused by its breach and, in the alternative, that the court should have reduced the award to only that amount due for overtime work.(8) Madison relies on what it characterizes as the "near-universal principle" that restitution to a breaching party is limited to the contract price, citing Restatement (Second) of Contracts § 374 cmt. b (1981). This principle appears to be more appropriately applied, however, to cases where a party does not fully perform its duties under a contract but seeks quantum meruit recovery for the work that was performed than to a case like the present one where extra-contractual work was performed.
The Maine court has explained that the appropriate measure of damages under quantum meruit recovery is "the reasonable value of the services." William Mushero, Inc. v. Hull, 667 A.2d 853, 855 (Me. 1995) (upholding the trial court's finding that the "reasonable value of services" was the price agreed to in an oral contract between the parties, citing Aladdin Elec. Assocs., 645 A.2d at 1145); see also Paffhausen, 708 A.2d at 273 (explaining that a carpenter seeking quantum meruit recovery was entitled to "the reasonable value of his labor and materials that went into the improvements to the building"). Here, the court utilized Abington's cost figures, in conjunction with a mark-up for profit, as permitted in Belanger v. Haverlock, 537 A.2d 604, 606 (Me. 1988), to determine the reasonable value of Abington's services. Further, the court did not err in refusing to reduce the amount of the damages award by the amount owed for costs accruing due to contours in the river bottom because, as we have explained, the responsibility for those costs was the subject of post-contractual discussions between the parties.
In conclusion, we find that under Maine law as it presently stands Abington was entitled to pursue recovery on the basis of quantum meruit and that the evidence supported the district court's conclusion that the elements of quantum meruit existed. The judgment of the district court is therefore affirmed.
1. So far as we have been able to ascertain, there was no Addendum II.
2. The court referred to plaintiff's claim interchangably as unjust enrichment and quantum meruit. See Combustion Eng'g, 812 F. Supp. at 261, 262.
3. In affirming the district court judgment, we agreed with the district court that even if Maine law allowed quasi-contractual recovery when a contract existed, such recovery should not be allowed under the circumstances. See Combustion Eng'g, 13 F.3d at 445.
4. The court relied on a fourth case, Bowden v. Grindle, 651 A.2d 347 (Me. 1994). Bowden is unhelpful because there the court held that a claim labelled "quantum meruit" by the plaintiffs was actually one for unjust enrichment and remanded the case to the trial court for a determination of that claim. See id. at 351.
5. "[R]ecovery in quantum meruit is said to be based upon the 'assent' of the parties and, being contractual in nature, it sounds in law."
H. Hugh McConnell, Distinguishing Quantum Meruit and Unjust Enrichment in the Construction Setting, 71-MAR Fla. B.J. 88, 88 (1997); see Judy Beckner Sloan, Quantum Meruit: Residual Equity in Law, 42 DePaul L. Rev. 399, 401 (1992) ("Quantum meruit is a legal action based on equitable restitution.").6. In affirming the district court's ruling on quantum meruit, we accepted the district court's erroneous characterization of Maine law as disallowing such a claim: "without evidence of fraud, or other circumstances that render the contract inoperative, [a plaintiff] is foreclosed from seeking additional payment outside the contract terms." Hodgkins, 82 F.3d at 1232 (citing Top of the Track
, 654 A.2d at 1296; Prest, 104 A. at 524). In Hodgkins, however, the parties did not exhibit post-contractual behavior that altered their relationship nor did the plaintiff perform any additional services for which he could have formed a reasonable expectation of payment. Moreover, as we have just explained, the district court misapprehended the holdings of Top of the Track and Prest.7.
Madison relies on cases in which the Maine Supreme Judicial Court found that various statements did not constitute offers, but rather were merely "agreements to agree," citing Searles v. Trustees of St. Joseph's College, 695 A.2d 1206 (Me. 1997); SC Testing Technology v. Department of Environmental Protection, 688 A.2d 421 (Me. 1996); Ault v. Pakulski, 520 A.2d 703 (Me. 1987). All three, however, dealt with whether a contract had been created or how to construe a contract. None considered whether a party had created a reasonable expectation sufficient to justify quantum meruit relief for the other party. Moreover, in all three cases, the court characterized the statements at issue as vague, indefinite, or incomplete, see Searles, 695 A.2d at 1211 (statement was not definite enough to constitute an offer); SC Testing, 688 A.2d at 425 (statement was "equivocal prediction about the future"); Ault, 520 A.2d at 704 (language of settlement contract too "vague and incomplete" to allow judicial enforcement); such is not the case here.8. Abington's only response is that Madison has waived this contention by opting at trial to challenge Abington's damages on the ground that they had not been proven to a reasonable certainty. Although it is true that Madison focused its post-trial brief to the district court on the errors in Abington's accounting of costs, Madison did reference its argument that Abington was not entitled to the full measure of extra costs associated with the project. It has, therefore, preserved its objections on principle to the damages award that we address here.