Better Roads

November 2014

Better Roads Digital Magazine

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Page 33 of 43

32 November 2014 Better Roads InCourt by Brian Morrow, P.E., Esq. Attorney Brian Morrow is a partner in Newmeyer & Dillion LLP and a licensed civil engineer specializing in construction law, including road and heavy construction. I n a recent case involving pipe jacking work on a highway project – Szabo Contracting, Inc. v. Lorig Construction Co. (Sept. 29, 2014) – the Illinois Court of appeals held that a sub-subcontractor was entitled to payment from a general contractor be- cause it would otherwise be unjustly enriched if per- mitted to retain the benefit of work it requested and agreed to pay for. The legal doctrine of "unjust enrichment" is a rem- edy that is designed to prevent one party from unjustly being enriched at the expense of another party. Unjust enrichment is often used in situations involving con- tracts implied-in-law, which are also known as quasi- contracts. A quasi-contract is a situation where no actual agreement or contract exists between the parties, but a duty is imposed by law to prevent unfairness. To be entitled to unjust enrichment under a quasi-contract, a plaintiff must show they furnished valuable services or materials and the defendant received them under circumstances that would make it unjust for them to retain the benefit. Typically, unjust enrichment is not available where the parties have entered into a contract regarding the same subject matter. In Szabo Contracting, on May 1, 2006, the Illinois State Toll Highway Authority hired Lorig Construction Company to be the general contractor on a project on Interstate 355 near the Des Plaines River. Lorig sub- contracted with JLA Construction, Inc. to install storm sewers and perform other work for about $2.8 million, including an add-on for pipe jacking for $1,746 per linear foot of pipe. JLA sub-subcontracted the pipe jack- ing to plaintiff, C. Szabo Contracting, Inc. for $266,274 based on the same price per linear foot of pipe. The pipe-jacking included installing underground storm sewer pipes using tunneling instead of open excavation. On March 22, 2007, Szabo sent a fax to Lorig indi- cating it had obtained union workers and was "on the job continuing with the bore," which referenced the pipe-jacking. Lorig did not respond. After the pipe-jack- ing was complete, JLA and Szabo sent Lorig a number of communications. On April 10, 2007, JLA submitted to Lorig a lien waiver for completed work, which iden- tified Szabo as the sub-subcontractor that performed the pipe-jacking. On April 11, 2007, Szabo faxed to Lorig a payment request of $266,274 for the pipe-jacking. On April 30, 2007, Szabo faxed to Lorig certified payroll records related to the pipe-jacking. On May 26, 2007, Szabo faxed to Lorig another payment request. JLA and Szabo received no response. On Oct. 1, 2007, Szabo received a fax from Lorig requesting clarification about certain discrepancies in the "final numbers." In response, Szabo faxed invoices Understanding 'Unjust Enrichment' Claims Sub-subcontractor prevails on an unjust enrichment claim against general contractor on highway project

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