Georgia Construction, Bond & Lien Law Blog

Unjust Enrichment Claim Cannot be Brought by Suppliers & Materialmen

Posted in Materilamen's Liens,Unjust Enrichment by Administrator on the July 27th, 2010

Although a subcontractor, supplier or materialman can only make “one” recovery of money they are owed, they may be able to proceed under more than one legal theory in order to increase their chances of prevailing in their lawsuit.  Quantum meruit or unjust enrichment is one such theory which may be closed to those entitled to file materialmen’s liens.  The case Callahan v. Hall recently held that a subcontractor could not assert quantum meruit claim against homeowners but, rather, was limited to the remedies provided by the lien statute, where subcontractor had no direct contractual relationship with homeowners.

Thus, a materialman or subcontractor may not recover against an owner or general contractor with whom it has no contractual relationship, based on the theory of unjust enrichment or implied contract; rather, it is limited to the statutory remedies provided by Georgia’s lien statute.  Thus, it is imperative that materialmen and suppliers timely file mechanics and materialmen’s liens in order to protect themselves and increase their likelihood of recovery.

What you think about this limitation on a subcontractor or a materialman’s ability to file a claim for unjust enrichment?

4 Responses to 'Unjust Enrichment Claim Cannot be Brought by Suppliers & Materialmen'

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  1. on August 29th, 2010 at 12:33 am

    I thought be interested to know that the Michigan Court of Appeals addressed these facts in 2006, and held that a supplier can pursue a quantum meruit claim against a general contractor, even if they’ve missed their payment bond or lien filing deadline. See, Morris Pumps v Centerline Piping, 273 Mich App 187 (2006).

  2. Carol D said,

    on March 28th, 2014 at 3:06 pm

    I don’t think it’s right, for example, when an owner of a shopping center knows that his property’s being developed by his lessee for a shop by multiple contractors who have to install HVAC systems, wiring, etc., and then can be enriched by all that work yet get off on a technicality basically. In those cases, it’s encouraging self-help since these empty shops aren’t usually highly policed. If you want a legal tinge to that self-help, perhaps you can file a UCC statement in the installed equipment. And to kinda ‘get back’ at these a-hole shopping center attorneys who turn everything into a federal case, don’t care about the equity of it, think their client should get ‘free’ stuff, and who aren’t even aware of the practical facts, what you can do is negotiate based on the fact that all the work is there, settle for like $2-3K, and have your client take the stuff back quietly in the meantime. The law’s screwed up. The law’s not fair. The law doesn’t protect these hard-working subcontractors. So more vigilante justice needs to occur until the law’s fixed.

  3. Carol D said,

    on March 28th, 2014 at 3:17 pm

    If any attorneys remember their contract law, if all the requirements of a contract were not quite there, there were remedies like unjust enrichment under the argument that accepting benefits created a quasi-contract. It should NOT be a requirement that a contract exist for a claim of unjust enrichment to be valid. That’s the whole point. Unjust enrichment is equitable, not legal. So I think if a landlord is aware of benefits he’s receiving and shows a history of promising payments, e-mailing back-and-forth showing awareness of this work, whether or not a tenant technically signs the deal shouldn’t make a difference in the world of equity. The courts simply have it wrong and are merely following precedent out of mental laziness, not principle.

  4. Blue Blog said,

    on March 28th, 2014 at 4:27 pm

    Although we do not know any of the facts regarding the specific incident you mention, there are generally three avenues for subcontractors to use when seeking payment–contractual, statutory law and common law remedies. Subcontracts, of course, spell out the obligations between the parties involved, but statutory law may expand these remedies by allowing materialmen’s liens, and common law, as you mention, may permit a claim based upon unjust enrichment. In order to determine the opportunities available to a particular subcontractor on a particular project, we recommend contacting a competent construction lawyer in the jurisdiction where the project occurred for advice.