Restoration Construction Company filed a lawsuit against a school district claiming the district refused to pay for construction and restoration services provided by Restoration after a school building was damaged by fire. The work had been performed under a contract signed by the school district’s superintendent. The value of the work under the initial agreement was over $331,000. The contract was not presented to the school district board for approval. Subsequently, the school district board president signed an amended contract with Restore Construction to repair the school. That contract valued the work at over $6.9 million and was also not presented to the school district board for approval.
Restoration moved forward with the work, and the school district made progress payments to Restoration in an amount of approximately $5.8 million, with a balance of approximately $1.4 million under the contracts when the school district ceased payment. At that point, Restoration sued for breach of contract and later added equitable claims.
The trial court dismissed the case, finding that the two contracts were “void ab initio” because they were not approved by the school district board and because they were not subject to the competitive bidding process. As a result,Restoration could not recover under these void contracts. The court also dismissed the equitable claims, and Restoration appealed.
On appeal, Restoration argued that the trial court should not have dismissed its equitable claims because even if the contracts were void, Restoration should still be able to recover for the work they performed under a “quantum meruit” argument, which argues that there was a contract “implied by law.” Although the appellate court agreed that the two contracts were void, the appellate court rejected the trial court’s dismissal of Restoration’s quantum meruit claim, finding that Restoration should have been able to proceed on that argument. The court specifically found that there was no case that holds that a quantum meruit claim is barred if a contract was determined to be void.