## Facts

- Harold Coon and Frank Schoeneman worked together in residential homebuilding.
- According to Coon’s unrefuted testimony, Schoeneman said he owned residential lots in Irving and Arlington, Texas, and needed Coon to build houses on those lots.
- The parties initially agreed that Coon would build the houses, Schoeneman would finance construction, a third party would sell the finished homes, and the profits would be split three ways among Coon, Schoeneman, and the seller.
- Under the initial arrangement, Coon built seven houses on lots in Irving.
- After Coon began work toward additional houses, Schoeneman told Coon the remaining Irving lots had been sold to someone else and proposed a new arrangement for the Arlington lots.
- For Arlington, the parties agreed Coon would pay Schoeneman $350 per house, Schoeneman would provide the lots, and Coon would receive all profits from each sale.
- As part of the Arlington arrangement, Schoeneman also agreed not to sell any lots in that area to other builders and to keep Coon supplied so Coon would have an inventory of five houses at any given time.
- Coon completed four houses in Arlington, then discovered Schoeneman had sold the remaining Arlington lots to other builders.
- Schoeneman eventually sold the houses Coon built, but Coon received no proceeds for his work; after building eleven houses total, Coon had not been paid.
- Coon sued to recover under the parties’ agreements (profit-based recovery) or, alternatively, to recover restitution/quantum meruit measured by the reasonable value of his construction services.
- The trial court refused to allow Coon to present evidence of the reasonable value of his services and restricted him to contract recovery based on profits.
- Coon could not prove the venture was profitable, so he could not recover on the profit-based measure and appealed.

## Issues

1. Whether a builder who pleads profit-based recovery under the parties’ agreements may also seek restitution/quantum meruit for the reasonable value of services when profit-based recovery cannot be proved.
2. Whether the trial court reversibly erred by excluding evidence of the reasonable value of the builder’s services and preventing submission of a restitution theory where the lot owner accepted the work and later sold the houses.

## Decision

- The appellate court reversed the trial court’s judgment and remanded for a new trial.
- The court held Coon was entitled to present his alternative restitution/quantum meruit theory measured by the reasonable value of his services.
- The trial court erred by excluding evidence of reasonable value and limiting Coon to a profits-only recovery when profits were not shown.

## Legal Principles

- A plaintiff may plead and try alternative theories of recovery, including contract damages and quantum meruit, so long as there is no double recovery.
- Quantum meruit (restitution) allows recovery of the reasonable value of services rendered when the defendant accepted the services and would otherwise retain the benefit without paying for it.
- When a claimed contract measure depends on proof of net profits and profits cannot be established on the record, the performing party may be entitled to submit a restitution measure to the factfinder if the opposing party accepted and retained the benefit of the performance.
- Excluding competent evidence supporting an alternative restitution theory can require reversal when it prevents the jury from considering a legally permitted measure of recovery tied to the value of services.

## Conclusion

Because Coon built eleven houses that Schoeneman accepted and sold, and because Coon’s profit-based recovery failed for lack of proof of profitability, Coon was entitled to submit an alternative quantum meruit measure based on the reasonable value of his services; the trial court’s refusal to admit that evidence and submit that theory required reversal and remand for a new trial.


Coon v. Schoeneman, 476 S.W.2d 439 (1973)