Artisan Builders, Inc. v. Jang, S. ( 2022 )

J-A15024-21
2022 PA Super 36ARTISAN BUILDERS, INC. IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellant
v.
SO YOUNG JANG
Appellee No. 47 EDA 2021
Appeal from the Order Entered November 17, 2021
In the Court of Common Pleas of Chester County
Civil Division at No: 2016-07178-ML
BEFORE: BOWES, J., STABILE, J., and MUSMANNO, J.
OPINION BY STABILE, J.: FILED FEBRUARY 28, 2022
Appellant, Artisan Builders, Inc. (“ABI”), appeals from the November
17, 2020 order entered in the Court of Common Pleas of Chester County in
favor of Appellee, So Young Jang (“Jang”), following denial of ABI’s quantum
meruit claims stemming from residential renovation work performed for Jang.
Because we find the trial court conflated quantum meruit with unjust
enrichment and denied ABI’s quantum meruit claims based on unjust
enrichment principles, we reverse and remand.
The trial court provided the following factual background:
ABI entered into a series of agreements with Jang to perform
renovations at Jang’s residential property located at 222 Lenape
Drive, Berwyn, PA, 19312. ABI is a small, local business based in
East Norriton, PA. The principal of ABI, Scott McClain, has been
in the construction business for more than twenty years.
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Work on the property began after multiple contracts were signed
by Jang on or about February 2, 2016. The scope of work initially
contemplated renovation of the kitchen. However, the scope was
changed to include additional work throughout the rest of the
house, including rehabilitation and renovation of, inter alia, the
first and second floor flooring, the master bathroom, baseboards,
lighting, crawlspace insulation, replacement of structurally
unsound joists, and multiple doors and door frames. The scope
of the work would eventually comprise five (5) base contracts and
eighteen (18) change orders. Jang was aware of the work
being performed, and all work was performed with the
express permission and authority of Jang.
On or about June 29, 2016, before the work on the house was
complete, Jang fired ABI.
On or about January 14, 2020, a trial was held before the
Honorable Mark L. Tunnell, at which time both Mr. McClain and
Ms. Jang testified.[1] Following the close of ABI’s case, on motion
by Jang, Judge Tunnell granted a compulsory non-suit on the
Mechanic’s Lien claim, holding that the contracts between [ABI]
and Jang were invalid, as the contracts did not comply with the
terms of the Home Improvement and Consumer Protection Act
(“HICPA”).[2] Judge Tunnell, however, gave ABI leave of court to
file an amended complaint to seek damages for quantum meruit,
and ordered that the trial be continued for the court to determine
the reasonable value of the services requested by Jang.
Order, 7/17/20, n.1 at 1-2 (emphasis added; minor alterations made).
Accordingly, ABI filed an amended complaint. However, in the amended
complaint, ABI sought damages not only for quantum meruit but also for
unjust enrichment and breach of contract. Jang filed preliminary objections
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1 Ms. Jang testified as on cross-examination during ABI’s case-in-chief.
273 P.S. §517.1-.19. Relevant to the trial court’s ruling is Section 517.7.(a),
which sets forth thirteen prerequisites to making a home improvement
contract valid or enforceable against an owner.
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asserting, inter alia, that the trial court’s January 14, 2020 order permitted
ABI to seek damages for quantum meruit only. By order entered March 12,
2020, the trial court sustained the preliminary objections filed by Jang with
respect to all claims other than quantum meruit. Order, 3/12/20.
Trial reconvened on June 10, 2020, at which time “ABI produced over
five hundred (500) pages of receipts, time sheets, invoices, documents signed
by Jang, emails, and other evidence of the work ABI performed.” Order,
7/17/20, n. 1 at 3. ABI asserted it was due $35,371.47 for services provided,
based on a QuickBooks report that tracked costs, expenses, and a comparison
of the original estimates with the invoices billed out. Id. (citing N.T., 6/10/20,
at 11). The updated total amount claimed by ABI was $43,525.06, which
included the original $35,371.47 sum, as well as $6,537.01 for storage of
kitchen cabinets ordered for Jang and sums related to the litigation, including
administrative costs for filings fees. Id.
After acknowledging the evidence presented at the June 10, 2020
proceeding, the court summarily stated, “But that is not what the court was
looking for.” Id. The court maintained that a defendant found to be unjustly
enriched based on an implied contract is to “pay to the plaintiff the value of
the benefit conferred.” Id. (citing Mitchell v. Moore, 729 A.2d 1200 (Pa.
Super. 1999) (emphasis in original)). “However, the plaintiff cannot merely
submit its own loss, i.e., the value of labor and materials expended, as the
measure of recovery, but must instead demonstrate that the defendant has in
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fact been benefitted, as the Supreme Court of Pennsylvania held in 1963, in
Meehan v. Cheltenham Twp., 189 A.2d [593] (Pa. 1963).” Id., n.1 at 4.
The court determined it “must find in favor of” Jang, concluding:
Here, although ABI went to considerable trouble to amass all its
invoices, estimates, contracts and other such documents in a thick
file, this court has no idea of whether there was a benefit to the
Jang property and, if so, in what amount. Such a benefit could
have been shown by, for example, appraisals secured by
knowledgeable individuals. In D.A. Hill Co.,[3] the figures were a
wash, so no enrichment resulted.
Id. The court’s order indicated that, “after hearings on January 14, 2020 and
June 10, 2020, the court, sitting without a jury, finds in favor of [Jang and
against ABI] in no amount.” Id. at 1.
In response to the trial court’s July 17, 2020 ruling, ABI filed post-trial
motions. The trial court denied the motions on November 17, 2020, and
judgment was entered in Jang’s favor. This timely appeal followed. Both ABI
and the trial court complied with Pa.R.A.P. 1925.
ABI asks us to consider two issues in this appeal:
A. Did the trial court err when it entered judgment against
Appellant ABI and in favor of Appellee Jang after finding that
ABI did not prove by a preponderance of the evidence that it
was entitled to recover pursuant to quantum meruit/unjust
enrichment?
B. Did the trial court err when it applied D.A. Hill Co. v.
Clevetrust Realty Investors, 573 A.2d 1005 (Pa. 1990), and
Meehan v. Cheltenham Township, 189 A.2d 593 (Pa. 1963)
and concluded Appellant ABI did not establish that Appellee
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3D.A. Hill Co. v. Clevetrust Realty Investors, Inc., 573 A.2d 1005 (Pa.
1990)
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Jang was benefited by the over One Hundred Thousand
($100,000.00) Dollars of work ABI performed on her house?
Appellant’s Brief at 4. Because ABI’s issues are interrelated, we consider them
together.
As noted above, at the conclusion of proceedings in January 2020, the
trial court granted Jang’s motion for compulsory nonsuit but permitted ABI to
amend its complaint to assert a quantum meruit claim. In other words, the
only claim that survived the January proceedings was a potential equity claim.
Following the June 2020 proceedings, the trial court rejected that equity claim.
In Wilson v. Parker, 227 A.3d 343 (Pa. Super. 2020), this Court explained:
When reviewing equitable decrees, our scope of review and
standard of review are deferential, but our deference has limits.
This Court has said:
We are bound to accept the trial judge’s findings of fact, and
accord them the weight of a jury verdict where supported
by competent evidence. As for factual and legal
conclusions, we are not bound by the trial court’s reasoning,
and may reverse for an abuse of discretion or error of law.
Id. at 352 (quoting Den-Tal-Ez, Inc. v. Siemens Capital Corp., 566 A.2d
1214, 1217 (Pa. 1989) (footnote, brackets, and ellipses omitted)).
To put ABI’s issues in context, we first address the difference between
quantum meruit and unjust enrichment. In Angino & Rovner v. Jeffrey R.
Lessin & Associates, 131 A.3d 502 (Pa. Super. 2016), this Court explained
that “[q]uantum meruit is an equitable remedy, which is defined as ‘as much
as deserved’ and measures compensation under an implied contract to pay
compensation as reasonable value of services rendered.” Id. at 508 (Pa.
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Super. 2016) (citation and alteration omitted). See also Commonwealth
Dept. of Public Welfare v. UEC, Inc., 397 A.2d 779, 782 (Pa. 1979)
(quantum meruit is “the reasonable value of the services performed”).
While the remedy of quantum meruit provides for restitution based on
the reasonable value of services performed or provided, unjust enrichment
“requires the defendant to pay to the plaintiff the value of the benefit
conferred.” Durst v. Milroy General Contracting, Inc., 52 A.3d 357, 360
(Pa. Super. 2012) (citation omitted). The elements necessary to prove unjust
enrichment are:
(1) benefits conferred on defendant by plaintiff; (2) appreciation
of such benefits by defendant; and (3) acceptance and retention
of such benefits under such circumstances that it would be
inequitable for defendant to retain the benefit without payment of
value. (citations omitted). The application of the doctrine depends
on the particular factual circumstances of the case at issue. In
determining if the doctrine applies, our focus is not on the
intention of the parties, but rather on whether the defendant has
been unjustly enriched.
Id. (citation omitted). In Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr.,
Inc., 2 A.3d 526 (Pa. 2010), our Supreme Court noted:
Unjust enrichment is the retention of a benefit conferred by
another, without offering compensation, in circumstances where
compensation is reasonably expected, for which the beneficiary
must make restitution. Black’s Law Dictionary (8th ed. 2004). An
action based on unjust enrichment is an action which sounds in
quasi-contract or contract implied in law. Schott v.
Westinghouse Electric Corp., 259 A.2d 443, 448 (Pa. 1969).
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Jerry’s Sport Ctr., 2 A.3d at 531 n.7.4
We cite with approval the Supreme Court of Maine that aptly explained
the difference between quantum meruit and unjust enrichment most concisely
when it stated:
Quantum meruit involves recovery for services or materials
provided under an implied contract. Unjust enrichment 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.
Bowden v. Grindle, 651 A.2d 347, 350 (Me. 1994) (citations omitted).
Further:
Quantum meruit is the measure of recovery under the quasi-
contract. It is equal to the reasonable value of the services
provided. The recovery pursuant to a claim for unjust enrichment,
on the other hand, is limited to the amount of the benefit realized
and retained by the defendant. Although there may be a
relationship between these two amounts, they are not necessarily
the same.
Id. at 351 (Me. 1994) (citations omitted). Although we are clearly not bound
by decisions from our sister states, they may provide persuasive authority.
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4 We acknowledge that our case law does not always distinguish quantum
meruit from unjust enrichment and sometimes conflates the two. See, e.g.,
Northeast Fence & Irons Works v. Murphy Quigley Co., 993 A.2d 664,
667 (Pa. Super. 2007) (“Unjust enrichment is a synonym for quantum
meruit.”). See also Durst, 52 A.3d at 360 (“Quantum meruit is an equitable
remedy to provide restitution for unjust enrichment in the amount of the
reasonable value of services.”); Jerry’s Sport Ctr., Inc., 2 A.3d at 532 n. 8
(Pa. 2010) (citing Black's Law Dictionary (8th ed. 2004) (same).
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Century Indemnity Company v. OneBeacon Insurance Company, 173
A.3d 784, 792 n. 14 (Pa. Super. 2017).
Instantly, the trial court held that the contract between the parties was
not valid due to non-compliance with HICPA. Appellant correctly pursued a
cause of action sounding in quantum meruit as illustrated by precedent.
In Durst, as in the case before us, homeowners who requested
renovations to their home refused to pay the contractor. There, the work was
performed pursuant to an oral agreement, meaning there was no HICPA-
compliant contract. The Court held that the lack of a HICPA-compliant written
contract did not prevent the contractor from pursuing a quantum meruit claim.
Id. at 361 (“we hold that quasi-contract theories of recovery survive the
HICPA”).
Similarly, in Shafer Elec. & Constr. v. Mantia, 96 A.3d 989 (Pa.
2014), homeowners refused to pay the contractor they hired to build an
addition to their home. Our Supreme Court held that HICPA did not preclude
a contractor from recovering in quantum meruit in the absence of an
enforceable contract as defined by HICPA. Id. at 996. The Court explained:
[I]t is well-settled at common law, however, that a party shall not
be barred from bringing an action based in quantum meruit when
one sounding in breach of express contract is not available. While
the General Assembly, in its role as the policy-making branch of
government, certainly may in “particular sets of circumstances”
modify the structure of the common law, there is no indication
that the legislature has done so in the Act. Indeed, the Act “is
silent as to actions in quasi-contract, such as unjust enrichment
and quantum meruit—which, by definition, implicate the fact that,
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for whatever reason, no [valid] contract existed between the
parties.” Durst, 52 A.3d at 361 (emphasis added).
Shafer, 96 A.3d at 996 (citations omitted). The Court noted:
Otherwise, this Court would sanction the ability for homeowners
to refuse payment of perfect construction work solely because a
contractor did not comply with the Section 517.7(a) requirements.
Accord Durst, 52 A.3d at 361 (holding that Appellants’
“interpretation of the statute would allow them to prevail even if
the work was perfect and they simply did not want to pay.”).
Presumably, however, Section 517.7(g) could apply if subsection
(a) is met, but the contract is otherwise unenforceable.
Id. at 996 n.6.5
Here, the trial court properly concluded that ABI did not comply with
Section 517.7(a) and, therefore, was not entitled to prevail on a breach of
contract claim because there was no valid contract between ABI and Jang.
The court properly permitted ABI to file an amended complaint asserting a
claim for quantum meruit and invited ABI to provide evidence to support that
claim at the June 10, 2020 reconvened hearing. However, rather than analyze
the evidence presented by ABI based on quantum meruit’s “reasonable value
of services provided” standard, the court analyzed ABI’s evidence using “the
benefit conferred” criteria appropriately employed to establish a claim of
unjust enrichment. In doing so, the court erred.
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5 Section 517.7(g) (Contractor’s recovery right) provides, “Nothing in this
section shall preclude a contractor who has complied with subsection (a) from
the recovery of payment for work performed based on the reasonable value
of services which were requested by the owner if a court determines that it
would be inequitable to deny such recovery.” 73 P.S. § 517.7(g).
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As reflected in the above quotes from Angino & Rovner and Durst, a
cause of action for quantum meruit is an equitable action providing restitution
in the amount of the reasonable value of services rendered. Nevertheless,
the trial court, relying on D.A. Hill and Meehan, rejected ABI’s quantum
meruit claim because a “plaintiff cannot merely submit its own loss, i.e., the
value of labor and materials expended, as the measure of recovery, but must
instead demonstrate that the defendant has in fact been benefitted, as the
Supreme Court of Pennsylvania held in 1963, in Meehan v. Cheltenham
Twp., 189 A.2d [593] (Pa. 1963).” Trial Court Order, 7/17/20, n.1 at 4. The
court concluded that it had “no idea of whether there was a benefit to the Jang
property and, if so, in what amount. Such a benefit could have been shown
by, for example, appraisals secured by knowledgeable individuals.” Id. (citing
D.A. Hill, supra).
We find the trial court’s reliance on D.A. Hill and Meehan misplaced.
Initially, we note that D.A. Hill and Meehan are factually distinguishable. As
ABI correctly observed:
The critical distinction between the Meehan and Hill matters and
the matter at hand is that in Meehan and Hill the defendants did
not request the work that plaintiffs performed. Rather, the
defendants were entit[ies] that became responsible for unfinished
projects after the developers became insolvent; in Meehan,
Cheltenham Township became responsible for a residential
development after the developer became insolvent, and in D.A.
Hill, a bank took over a project for an insolvent developer.
Following those insolvencies, subcontractors sued the Township
and bank, respectively, for unpaid invoices. In that situation, the
Supreme Court held that appraisals were required to establish the
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benefit to the defendants for purposes of payment, because the
defendants did not request or contract for the services performed.
In this matter, there is no need to have an appraiser or any other
witness come to testify [as] to the degree to which the work
performed by ABI benefited Jang because Jang herself requested
that the work be done.
Appellant’s Brief at 15-16 (emphasis in original). The Supreme Court
recognized the distinction in D.A. Hill, noting, “As this Court held in Meehan,
a third party is not unjustly enriched when it receives a benefit from a contract
between two other parties where the party benefited has not requested the
benefit or misled the other parties.” D.A. Hill, 573 A.2d at 1010 (emphasis
in original).6
ABI asserts, and we agree, that the case before us is distinguishable
from D.A. Hill and Meehan. ABI contends that this case “is most closely
aligned with [Northeast] Fence & Iron Works, Inc. v. Murphy Quigley
Co., 933 A.2d 664 (Pa. Super. 2007)[,] a quantum meruit action by
subcontractor against general contractor (which requested the services) for
unpaid work,” in which the trial court determined that the subcontractor’s
invoices provided sufficient evidentiary support for the value of the work
performed at the contractor’s request. Appellant’s Brief at 36. In Northeast
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6 We note that Ira G. Steffy & Son, Inc. v. Citizens Bank of Pennsylvania,
7 A.3d 278 (Pa. Super. 2010), quoted and relied upon by the trial court in its
Rule 1925(a) Opinion, see Rule 1925 Opinion, 1/11/21, at 3 (unnumbered),
is also a case involving a third-party claim and is, therefore, distinguishable
from the case before us.
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Fence, this Court rejected the appellant’s reliance on, inter alia, D.A. Hill and
Meehan for the proposition that to recover for quantum meruit, it was
insufficient for Northeast Fence to produce unpaid invoices. This Court
recognized that Northeast Fence provided services at the request of Murphy
Quigley, which was trying to avoid paying Northeast Fence for the services
provided. Id. at 670 (“Unlike the factual scenarios at issue in D.A. Hill Co.,
Meehan, and Ravin[7], [Murphy Quigley] recruited [Northeast Fence] to
install the fencing.”)
In Shafer Elec., our Supreme Court held that “a contractor claiming
quantum meruit may only recover the reasonable value of the services
rendered, as determined by a trial court after taking evidence on the matter.”
Shafer Elec., 96 A.3d at 995. Despite the evidence presented at the June
2020 hearing—after the trial court continued the January 2020 proceeding to
enable the court “to determine the reasonable value of the services requested
by Jang,” Order, 7/17/20, n.1. at 2, the trial court nevertheless relied on D.A.
Hill and Meehan and concluded that ABI’s documentary evidence, including
invoices, could not establish the reasonable value of the services provided.
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7 Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880 (Pa. Super. 2006). In
Northeast Fence, we recognized that “Ravin is analogous to Meehan.
Therein, the plaintiff sought to recover for improvements to a retail space.
We concluded that the plaintiff could not recover since the defendant, the
building owner, had not requested the plaintiff’s services and had not misled
the plaintiff and therefore was not enriched unjustly.” Northeast Fence, 933
A.2d at 670.
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As reflected in its Rule 1925(a) Opinion, the trial court rejected ABI’s
assertion that facts of the instant case are distinguishable from the factual
scenarios in D.A. Hill. Rule 1925(a) Opinion, 1/11/21, at 2. Instead, the trial
court concluded that the requirements for establishing a claim for unjust
enrichment outlined in D.A. Hill and Meehan were “recently reiterated” in
Karden Construction Services v. D’Amico, 219 A.3d 619 (Pa. Super 2019).
Id. The trial court’s reliance on Karden is misplaced for two reasons. First,
Karden involved the remedy for unjust enrichment rather than for quantum
meruit. Second, as ABI contends, Karden is distinguishable because it was
not a construction case and, moreover, because the trial court determined
that the appellant lacked credibility. Although this Court affirmed the trial
court’s denial of recovery in Karden, ABI argues, it did so “because it refused
to disturb the trial court’s determination of appellant’s credibility . . . because
the trial court didn’t believe appellant, and there was substantial evidence
presented by appellee disputing appellant’s testimony.” Appellant’s Brief at
41-42 (some capitalization omitted).
As ABI recognizes, unlike Karden, here there was no opposing
testimony at trial as to the contracts and change orders signed or initialed by
Jang, and there was no evidence ABI did not perform services for which it
sought payment. Rather, Jang acknowledged that she agreed to pay for the
services she requested and that she approved the services performed. Id. at
43.
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Because quantum meruit damages are determined based on services
provided, we find that the trial court committed error of law when it concluded
recovery must be measured by the benefit to Jang. Further, we find the court
erred when it determined that D.A. Hill and Meehan controlled and that ABI
“cannot submit its own loss, i.e., the value of labor and material expended, as
the measure of recovery.” Order, 7/17/20, n.1 at 4. We reject the proposition
that, without something akin to an appraisal, the trial court could have “no
idea of whether there was a benefit to the Jang property and, if so, in what
amount.” Order, 7/17/20, n.1 at 4. Benefit to the Jang property is not at
issue because the claim was not one for unjust enrichment. However, while
ABI asks us to accept wholesale its contention that its unpaid invoices, along
with costs of storing cabinets and costs of litigation, constitute the proper
measure of damages, it is not this Court’s role to determine the reasonable
value of the services provided by ABI. Therefore, we remand to the trial court
to determine the reasonable value of the services based on the evidence
presented at the January and June 2020 proceedings, and to convene an
additional hearing if it deems it necessary to do so.
Order reversed. Case remanded for further proceedings in accordance
with this Opinion. Jurisdiction relinquished.
Judge Musmanno joins.
Judge Bowes files a concurring opinion in which Judge Stabile joins.
This decision was reached prior to the retirement of Judge Musmanno.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/28/2022
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