City of Damascus v. Bivens, 86-222
| Decision Date | 06 April 1987 |
| Docket Number | No. 86-222,86-222 |
| Citation | 291 Ark. 600,726 S.W.2d 677 |
| Parties | CITY OF DAMASCUS et al., Appellants, v. Faren BIVENS d/b/a Bivens Construction Company, Appellee. |
| Court | Arkansas Supreme Court |
Phil Stratton, Conway, for appellants.
Brazil, Clawson & Adlong by William Clay Brazil, Conway, for appellee.
The issue presented in this appeal is whether a city which obtains physical improvements pursuant to an illegal contract may be held liable for the value of the improvements. We agree with the trial court's judgment that it may, and thus we affirm.
In his complaint, the appellee, Bivens, alleged that in July, 1985, he entered into a contract with the appellant City of Damascus, and the named mayor and city council members, whereby he would reseal streets in the city for $16,262. He alleged the city had made a $3,000 down payment but had failed to pay further. He sought a judgment for $13,362.
The appellants responded that the contract was void for failure to publish notice to receive bids as required by statute. The appellants counterclaimed for the $3,000 paid to the appellee, claiming it was an illegal exaction.
The appellee responded that the contract was not invalid and that the appellants should be estopped from claiming its invalidity.
A hearing was held in which the parties stipulated that the appellee was approached by the appellants to submit a proposal for street repairs. The appellee's proposal was accepted by a vote of the city council. A contract was entered, and the city did not advertise for bids or take any other bids.
Only the appellee testified. He said that, at the time he entered the contract, he had no knowledge whether the city was taking bids or asking for proposals other than his. From the following testimony it appears that the court raised the prospect of considering recovery by the appellee on the theory of unjust enrichment or contract implied in law or quantum meruit before the witness testified:
By Mr. Stratton [counsel for the appellants]:
Were you ever notified by the City that they had some questions about the quality of your work?
By Mr. Brazil [counsel for the appellee]:
Your Honor, I'm going to object to getting into that. It is not raised, it is not pled.
The Court: What is the purpose of it, Mr. Stratton?
Mr. Stratton: Well, your Honor, as we discussed in chambers, if the Court finds a certain situation to imply certain rules of law to the fact as he understands them, then it's a question of damages, whether it's the contact price or the value received.
The Court: Well, that sounds like quantum meruit.
Mr. Stratton: You'd have to apply that and I think it will take some evidence on that, your Honor.
The Court: I'll hear it for whatever I might determine its value to be. I will not consider any incompetent evidence. Even though I hear it and it turns out to be it was incompetent, I will not consider it. The difference is we don't have a jury here and I'm not going to be misled.
No further evidence was taken on the value of the services provided by the appellee.
In a letter opinion, the court found the appellee had no knowledge whether the appellants followed the law with respect to bids on the project. He found the appellee thought he was repairing the streets pursuant to a valid contract, but that the appellants had not met the requirement of Ark.Stat.Ann. § 14-611 (Supp.1985) that notice of intention to receive bids be published. In the following paragraph of his opinion the judge clearly concluded the city would be unjustly enriched if the appellee were not allowed to recover I conclude the plaintiff is entitled to recover even though the contract was not valid at time of execution. The city has gained the benefits of plaintiff's work under a contract plaintiff thought was valid. The benefits cannot be returned. The city would be unjustly enriched if the plaintiff were denied recovery.
The judgment awarded the appellee $13,362.
We find that the unjust enrichment principle is firmly embedded in Arkansas law in the context of work performed pursuant to illegal contracts made by political subdivisions such as cities and counties. We alluded to it as recently as 1980 in a case where we ultimately found a valid contract to exist. McCuistion v. City of Siloam Springs, 268 Ark. 148, 594 S.W.2d 233 (1980). We have permitted restitution based on unjust...
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...to statutory violation does not impose a blanket prohibition on the recovery of quantum meruit damages); City of Damascus v. Bivens, 291 Ark. 600, 603, 726 S.W.2d 677, 679 (1987) (where a contract is illegal, the claimant may recover where the recovery is for unjust enrichment); Mesaba Serv......
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...to statutory violation does not impose a blanket prohibition on the recovery of quantum meruit damages); City of Damascus v. Bivens, 291 Ark. 600, 603, 726 S.W.2d 677, 679 (1987) (where a contract is illegal, the claimant may recover where the recovery is for unjust enrichment); Mesaba Serv......
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