Mun. Servs. Corp. v. Hall Community Dev., L.L.C.
2019 Ohio 3079
Ohio Ct. App.2019Background
- Municipal Services Corp. (Danzo) contracted with Hall Community Development on Nov. 9, 2015 to provide housing inspection and field construction management services and agreed to allow Hall to use Danzo’s resume in grant applications; if a listed grant was funded, Danzo would be used as the housing rehab specialist.
- Municipal Services performed work on 40 projects; Hall used Danzo’s credentials on several 2016 grant applications that were later funded (total grants ≈ $2.15M; Municipal Services’ share ≈ $153,275).
- Hall sent a March 20, 2017 letter terminating the contract with 30 days’ notice and thereafter did not use Municipal Services’ inspection services on the funded grants; one later 2017 application that omitted Danzo scored lower and was not funded.
- Municipal Services sued for breach of contract and fraudulent misrepresentation and sought leave to add unjust enrichment/quantum meruit as an alternative claim; Hall moved for summary judgment.
- Trial court granted summary judgment for Hall, holding termination was permitted under the contract and dismissing unjust enrichment because an express contract governed the subject matter; Hall’s counterclaim was later voluntarily dismissed.
- On appeal, the Fifth District reversed summary judgment as to unjust enrichment/quantum meruit and remanded for further proceedings, while upholding dismissal of the breach-of-contract claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment/quantum meruit claim is barred by existence of an express contract | Municipal Services: may pursue quantum meruit alternatively if contract claim fails because contract did not address post-termination obligation to use Danzo when his resume secured grants | Hall: express contract covers the parties’ obligations and bars quasi-contract recovery | Court: Reversed trial court — plaintiff may pursue unjust enrichment/quantum meruit as alternative; summary judgment on that claim improper |
| Whether genuine issues of material fact exist on unjust enrichment elements (benefit, knowledge, unjust retention) | Municipal Services: Hall received benefit by using Danzo’s resume on funded grants and retained benefit without paying Danzo | Hall: paid for completed work; termination clause allowed cancellation so no unjust retention | Court: Genuine factual disputes exist (use of resume, funded grants, unpaid value) — remand for further consideration |
| Whether Hall breached the contract by terminating before using Danzo on funded grants | Municipal Services: termination did not extinguish obligation to use Danzo for grants obtained by relying on his resume; contract ambiguous on post-termination obligations | Hall: termination clause permitted cancellation with 30-day notice; it met contractual rights and paid for completed work | Court: Overruled plaintiff’s assignment — appellate court treats this argument as sounding in unjust enrichment and affirms summary judgment as to breach but allows quasi-contract claim to proceed |
| Whether summary judgment standard was correctly applied | Municipal Services: trial court improperly resolved factual disputes and dismissed alternative remedies without addressing merits | Hall: evidence showed no genuine dispute and entitlement to judgment | Court: Applied de novo review and concluded trial court erred in dismissing unjust enrichment claim; genuine issues preclude summary judgment on that claim |
Key Cases Cited
- Bonacorsi v. Wheeling & Lake Erie Ry. Co., 767 N.E.2d 707 (Ohio 2002) (standard for reviewing summary judgment)
- Esber Beverage Co. v. Labatt USA Operating Co., 3 N.E.3d 1173 (Ohio 2013) (summary judgment standard and Civ.R. 56 principles)
- Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298 (Ohio 1984) (elements of unjust enrichment)
- Inland Refuse Transfer Co. v. Browning–Ferris Inds. of Ohio, Inc., 474 N.E.2d 271 (Ohio 1984) (court may not resolve evidentiary ambiguities on summary judgment)
- Building Industry Consultants, Inc. v. 3M Parkway, Inc., 911 N.E.2d 356 (Ohio App. 2009) (party may seek quantum meruit if contractual claim fails)