The Connecticut Appellate Court's recent decision in Schirmer v. Souza is a reminder that there are circumstances where you can still recover damages for non-payment of services even when you do not have a written contract. In Schirmer, the Appellate Court upheld an award in favor of the plaintiffs on claims of unjust enrichment concerning renovations to a residence on the defendants' property.
In a somewhat strange set of facts, the plaintiffs loaned their daughter and son-in-law money to renovate a home. The plaintiffs believed that their daughter had title to the property when the son-in-law's parents, the defendants, actually owned the property. The son-in-law performed the renovations but went beyond the scope of the project and essentially built a new house. The defendants then sold the house after the renovations. Plaintiffs expected over $100,000 from the sale of home to cover the renovation costs and instead got nothing. Plaintiffs had no contract with the defendants, the owners of the newly constructed house. Plaintiffs sued and recovered after trial based on a theory of unjust enrichment.
Unjust enrichment is an equitable remedy. It is a broad and flexible remedy when the right circumstances are present. To recover, a plaintiff must prove:
- The defendants were benefited
- The defendants unjustly did not pay the plaintiffs for the benefits
- The failure to pay was to the detriment of plaintiff
- The plaintiff lacks an available remedy under a written contract
As the court noted in this case, the question becomes "did the defendant, to the detriment of someone else, obtain something of value to which the defendant was not entitled?" The equitable remedy is based upon the principle that one should not be permitted to unjustly enrich himself at the expense of another. Instead, there should restitution for the property received.
In this case, the defendants claimed there was an error at trial because there was no proof of any contractual relationship between the parties. However, the basis of recovery was not in contract, but rather quasi contract with restitution as the remedy. Restitution amounts to restoring to a party that property or money that was wrongfully taken or received by another. The basic idea is that one party should not benefit unfairly to the detriment of another.
When unjust enrichment applies, a plaintiff can recover in restitution without a contract. In Connecticut lawsuits, you typically see claims for unjust enrichment in circumstances where there may be no valid contract in place but one of the following occurred:
- Services rendered, but not paid for
- Wrongful receipt of profits
- Mistakes made in payment to the wrong party
- Improvements to property
In his case, the Appellate Court found that the defendants accepted the benefit of the renovations and made a profit upon the sale of the house. There was some difficulty in establishing the proper damages, but the Appellate Court upheld the finding of damages that amounted to the expenditures of the plaintiffs.