Brief Fact Summary.
L. Cosby Bernard and Co. (Cosby) sued Board of Public Works (Board) for breach of contract after Board failed to pay Cosby the agreed upon commission price.
Synopsis of Rule of Law.
A person who makes an agreement with an unauthorized agent may receive quantum meruit relief.
However, there was no evidence that anyone was authorized to spend city money without a prior appropriation, Ind.Code 36-4-8-12(b) is unambiguous in its condemnation of any attempt to bind a municipality in the absence of an appropriation: A city department, officer, or employee may not obligate the city to any extent beyond the amount of money appropriated for that department, officer, or employee.View Full Point of Law
Board of Public Works (Board) hired L. Cosby Bernard and Co. (Cosby) to design a building. Cosby was originally supposed to receive a commission of 6.5 percent, but when federal funding for the project was approved, Cosby doubled its commission. Ultimately, Cosby only received the original 6.5 percent commission. Cosby sued for breach of contract and the trial court granted judgment to Cosby.
Whether a person who makes an agreement with an unauthorized agent receive quantum meruit relief?
Yes. Summary judgment is reversed. The trial court must consider whether Cosby can prove the four quantum meruit requirements.
A person who makes an agreement with an unauthorized agent may receive quantum meruit relief. It is unfair for a principal to avoid payment for services that the principal approved. For quantum meruit to apply: (1) the services must benefit the city, (2) the city had knowledge that the services would be provided, (3) the city accepted the benefits, and (4) the contract was not outside of the city’s power.