Vertex, Inc. v. City of Waterbury

Brief Fact Summary.

Plaintiff sued Defendant, alleging unjust enrichment when Defendant refused to pay Plaintiff for work that it had done. The trial court rejected a jury instruction, explaining unjust enrichment and instead instructed the jury on implied-in-fact contracts. The court declared a mistrial. After the case was retried, the jury found in favor of Defendant. Plaintiff brought a motion to set aside the verdict and obtain a new trial.

Synopsis of Rule of Law.

Jury instructions describing an implied-in-fact contract are improper in unjust enrichment claims.

Facts.

In March 1999, Vertex, Inc. (Plaintiff) offered to prepare the computer systems of the City of Waterbury (Defendant) for problems associated with the year 2000. Plaintiff accepted and work commenced that month. The parties entered a formal written contract detailing the tasks to be performed in June 1999. On July 1, 1999, Plaintiff sent Defendant a proposal to perform additional work to address problems it had identified in its first few months of working under the contract. It is disputed whether Defendant accepted the July 1999 proposal. Plaintiff performed the additional work proposed in the July 1999 proposal but Defendant refused to pay for the additional work. Plaintiff sued alleging, among other claims, unjust enrichment. A jury trial was held. Plaintiff requested a jury instruction explaining that, to prove an unjust enrichment claim, the plaintiff must show that the plaintiff provided services to the defendant, that the defendant benefitted, that the defendant unjustly failed to pay for the benefit, and that the defendant’s refusal to pay was detrimental to the plaintiff. The court rejected the proposed instruction and instead instructed the jury on implied-in-fact contracts. The jury was unable to reach a verdict and the court declared a mistrial. After the case was retried, the jury found in favor of Defendant. Plaintiff brought a motion to set aside the verdict and obtain a new trial, on grounds that the court improperly instructed the jury as to its unjust enrichment claim.

Issue.

Whether jury instructions describing an implied-in-fact contract are improper in unjust enrichment claims.

Held.

Yes. The trial court’s ruling is reversed. Jury instructions describing an implied-in-fact contract are improper in unjust enrichment claims.

Discussion.

An unjust enrichment claim is an equitable remedy designed to compensate an injured party for services rendered where the circumstances warrant compensation and there is no remedy under the contract itself. To prove unjust enrichment, the plaintiff must show: (1) the defendants were benefitted; (2) the defendants unjustly failed to pay for the benefit; and (3) the defendant’s refusal to pay was detrimental to the plaintiff.  An unjust enrichment claim implies a contract although one has not been properly formed. In contrast, an implied-in-fact contract is a binding contract, where assent is implied from the conduct of the parties. Here, the trial court instructed the jury that the plaintiff had to prove it rendered services with the reasonable expectation that it would be compensated, and that the defendant accepted the plaintiff’s services while reasonably believing the defendant would pay for its services. These instructions describe an implied-in-fact contract. The trial court erred in instructing the jury on an implied-in-fact contract rather than on unjust enrichment.