## Facts

- Fayette L. Earhart, owner of a construction company, negotiated with William Low Company to build a mobile-home park on two adjoining parcels: one owned by Low and one owned by a third party, Ervie Pillow, subject to Low’s contingent right to purchase.
- A special-use permit affecting Pillow’s parcel required construction to begin before a fixed deadline or the permit would expire.
- The parties’ contemplated construction contract was expressly contingent on Low obtaining financing and Earhart obtaining a bond; absent those conditions, the contract was not binding.
- Near the permit deadline, Low told Earhart that financing had been secured and instructed him to begin work immediately to preserve the permit.
- Earhart promptly mobilized and worked for about a week on both parcels, with Low frequently present at the site.
- When Earhart submitted a progress bill, he learned financing had not been obtained; Low refused to pay and hired another contractor.
- Earhart sued in quantum meruit (restitution) for the reasonable value of his expenditures and services.

## Issues

1. Whether a contractor who performs services at another’s request, in reasonable reliance on promised payment, may recover in quantum meruit when the work did not directly benefit property owned by the requesting party.
2. Whether the trial court erred by denying restitution for work performed on the third party’s parcel solely because the requester did not own that land.

## Decision

- The California Supreme Court reversed the judgment to the extent it denied recovery for work performed on the adjoining third-party parcel.
- The court held Earhart was entitled to attempt to prove Low’s liability in quantum meruit for the reasonable value of services rendered on both parcels.
- The matter was remanded for further proceedings to determine liability and value consistent with the court’s rule.

## Legal Principles

- Quantum meruit may be available when services are rendered at the defendant’s request under a reasonable belief the defendant will pay, even if the services do not directly enhance the defendant’s own property.
- The “benefit” supporting restitution is not limited to a direct, tangible increase in the value of the defendant’s property; receiving the requested performance induced by the defendant can suffice.
- Older authority limiting restitution to cases of direct benefit is not controlling where it would bar recovery despite requested performance and justifiable reliance.
- Recovery depends on proof that the defendant requested the performance and that the plaintiff justifiably relied on being compensated; the remedy is for the reasonable value of labor and expenditures.

## Conclusion

The court held that a party who begins work at another’s request in reasonable reliance on compensation may seek quantum meruit for the reasonable value of that work even when performed on property the requester does not own, and it remanded for determination of liability and amount.


Earhart v. William Low Co., 25 Cal. 3d 503 (Cal. 1979)