C. Szabo Contracting, Inc. v. Lorig Construction Company
19 N.E.3d 638
Ill. App. Ct.2014Background
- Lorig was the general contractor on an I-355 Tollway project and subcontracted storm-sewer work to JLA; JLA subcontracted pipe-jacking to Szabo at $1,746/linear foot (sub-subcontract price $266,274).
- Lorig required DBE participation and directed JLA to assign its subcontract to a DBE; Lorig later exempted the pipe-jacking from that assignment.
- Szabo performed the pipe-jacking, provided certified payroll and invoices, and sought payment from Lorig; Lorig never paid JLA or Szabo for the pipe-jacking though the Tollway paid Lorig in full.
- JLA voluntarily dismissed its claims; Szabo pursued a bench trial on an unjust-enrichment (quasi-contract) claim against Lorig and obtained a $215,400 judgment (reduced for supplier payments Lorig made).
- On appeal Lorig argued that an express subcontract bars quasi-contract relief and that Szabo cannot recover from a nonparty general contractor absent inducement or a promise of payment; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a sub-subcontractor may recover in quasi-contract from a general contractor who received but paid no one for the contracted performance | Szabo: quasi-contract available where general contractor received the exact performance it requested and paid no one | Lorig: express subcontract governs; unjust-enrichment remedy unavailable against a nonparty when an express contract covers the subject | Held: quasi-contract available here — Lorig would be unjustly enriched because it requested and received the specific performance and paid no one |
| Whether plaintiff must show that the general contractor enticed performance or promised payment to pursue quasi-contract | Szabo: not necessary where defendant requested and received the specific benefit and paid no one | Lorig: recovery should be limited to cases of inducement or assurances (citing Midcoast) | Held: inducement/assurance not required here; court could not affirm on those theories but found recovery justified on nonpayment for requested benefit |
| Whether allowing recovery risks double liability or shifts contractual risk to the general contractor | Lorig: permitting recovery shifts risk and may force double payment to contractor and sub-subcontractor | Szabo: no double recovery/risk here — JLA dismissed claims and Szabo does not seek payment from JLA | Held: no double liability or unfair shifting of risk given facts (JLA dismissed; Lorig received Tollway payment) |
| Whether Szabo must exhaust contractual remedies against JLA before suing Lorig in quasi-contract | Lorig: some authorities require exhaustion of remedies against the contracting party first | Szabo: exhaustion not required for this legal (monetary) unjust-enrichment action | Held: exhaustion not required; quasi-contract monetary claim allowed without first exhausting contractual remedies |
Key Cases Cited
- Eychaner v. Gross, 202 Ill. 2d 228 (Ill. 2002) (standard of review for bench-trial factual findings).
- Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 (Ill. 2011) (questions of law reviewed de novo).
- HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d 145 (Ill. 1989) (unjust enrichment requires retention of a benefit under circumstances making retention unjust).
- Hayes Mechanical, Inc. v. First Industrial, L.P., 351 Ill. App. 3d 1 (Ill. App. Ct. 2004) (general rule: quasi-contract relief ordinarily unavailable where express contract governs; analyses of third‑party recovery).
- Midcoast Aviation, Inc. v. Gen. Elec. Credit Corp., 907 F.2d 732 (7th Cir. 1990) (permitting quasi-contract recovery where nonparty financier enticed plaintiff and fostered a reasonable expectation of payment).
- Premier Electrical Construction Co. v. La Salle Nat. Bank, 132 Ill. App. 3d 485 (Ill. App. Ct. 1985) (knowledge that work is being performed is insufficient alone to impose restitution liability on the beneficiary).