Wayne Moving & Storage of New Jersey, Inc. v. School District
2010 U.S. App. LEXIS 22263
3rd Cir.2010Background
- Wayne Moving subcontracted with Facility Strategies to provide moving services for the School District of Philadelphia; the project involved relocating to 440 North Broad Street with SRC approval and a contract cap of $1.4 million.
- A September 1, 2004 subcontract set Wayne Moving’s exposure at up to $840,115.68; a separate School District contract capped the total at $1,396,865.68.
- Project delays occurred due to elevators and other impediments; extra work was performed beyond the original scope.
- Ferullo requested and discussed potential additional funding; Siefert approved an extra work order and suggested the project was within the authorized budget.
- Facility Strategies invoiced for extra work; Wayne Moving was paid by Facility Strategies, and Facility Strategies was paid by the School District; Wayne Moving sought payment directly from the School District for $830,071.18.
- District Court granted Wayne Moving summary judgment for unjust enrichment; School District appealed arguing Section 508 bars such claims, equitable estoppel, and lack of privity; Third Circuit reverses and remands for entry of summary judgment for the School District on Section 508 grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section 508 bars unjust enrichment claims. | Wayne Moving argues no direct contract; Section 508 should not bar implied claims. | School District contends Section 508 applies to contracts of any kind, including implied ones. | Section 508 applies to implied contracts and bars the unjust enrichment claim. |
| Whether equitable estoppel defeats Section 508 defense. | Wayne Moving asserts estoppel based on misrepresentations. | District argues estoppel cannot override mandatory statute when acts are outside powers. | Equitable estoppel does not apply against the School District here. |
| Whether privity or contractual provisions defeat unjust enrichment. | Wayne Moving relies on unjust enrichment independent of privity. | There was no express contract with Wayne Moving; contract terms may bar claims. | Not necessary to decide due to Section 508 bar. |
Key Cases Cited
- Hazleton Area School Dist. v. Krasnoff, 672 A.2d 858 (Pa.Cmwlth. 1996) (Section 508 applies to contracts of any kind and modifications increasing indebtedness)
- Yoder v. Luzerne Twp. Sch. Dist., 160 A.2d 419 (Pa. 1960) (Section 508 mandatory; prevents expenditures beyond authorization)
- Price v. School District of Borough of Taylor, 42 A.2d 99 (Pa.Super. 1945) (Majority approval required; no recovery on quantum meruit without proper authorization)
- In re Borough of Sykesville, 91 Pa.Super. 335 (Pa.Super. Ct. 1927) (Contracts not authorized by school board barred; implied liabilities excluded)
- Mullen v. Bd. of Sch. Dirs. of DuBois Area Sch. Dist., 259 A.2d 877 (Pa. 1969) (Section 508 policy to preserve education funds; explicit vs. implied contracts)
- Chester Extended Care Ctr. v. Pa. Dep’t of Pub. Welfare, 586 A.2d 379 (Pa. 1991) (Estoppel against government requires fundamental injustice; here not shown)
- City of Scranton v. Heffler, Radetich & Saitta, LLP, 871 A.2d 875 (Pa.Cmwlth. 2005) (Need to inquire into powers; agency actions outside powers do not bind government)