## Facts

- Olympic Mall Co. borrowed $350,000 from Continental, Inc. to purchase and develop 179 acres; the loan was secured by a deed of trust on the land.
- Olympic conveyed 7 acres to Sun Coast Properties, Inc. for a shopping center; the sale contract required Olympic to install a water system on Olympic’s remaining 172 acres to serve the center and future development.
- Sun Coast borrowed $1.5 million from Continental to construct the shopping center, also secured by a deed of trust.
- Olympic defaulted on the $350,000 loan; Continental foreclosed nonjudicially and acquired the 172-acre remainder at the trustee’s sale.
- Work on the shopping center and related infrastructure continued; Sun Coast or its contractors subcontracted with Irwin Concrete and other claimants to perform work, including construction of the water system.
- The water system was substantially completed and used for the shopping center; it increased the value of the 172 acres now owned by Continental and assisted completion of the center, enabling Continental to close out its construction loan.
- Contractors filed mechanics’ liens for unpaid labor and materials and also sought equitable recovery.

## Issues

1. Whether contractors could obtain restitution (unjust enrichment/quantum meruit) from Continental for improvements that benefited Continental.
2. Whether foreclosure of Continental’s deed of trust extinguished the contractors’ mechanics’ liens, including any lien against removable improvements.
3. Whether Continental made a clear promise supporting promissory estoppel.
4. Whether contractors were entitled to prejudgment interest on amounts awarded in quantum meruit.
5. Whether contract prices could be used as evidence of the reasonable value of benefits conferred in restitution.

## Decision

- Affirmed money judgments against Continental based on unjust enrichment/quantum meruit.
- Affirmed dismissal of the mechanics’ lien claims because foreclosure extinguished subordinate liens and contractors failed to prove the improvements were removable without material injury.
- Affirmed rejection of promissory estoppel for lack of a clear and definite promise by Continental.
- Affirmed denial of prejudgment interest because quantum meruit recovery was unliquidated and not readily determinable before judgment.
- Approved use of contract prices as evidence of the reasonable value of the benefit conferred, absent proof the prices were unreasonable.

## Legal Principles

- Restitution requires (1) a benefit conferred, (2) defendant’s knowledge of the benefit, and (3) circumstances making retention without payment unjust.
- Extinguishment of mechanics’ lien rights through deed-of-trust foreclosure does not bar an in personam restitution claim against a party that knowingly retained measurable benefits from the work.
- Deed-of-trust foreclosure generally eliminates junior mechanics’ liens on the land; a claimant must prove statutory conditions for any lien on removable improvements, including severability without material injury.
- Promissory estoppel requires a clear and definite promise; a lender’s receipt of benefits or awareness of work, without such a promise, is insufficient.
- Prejudgment interest is unavailable for unliquidated quantum meruit claims not determinable by computation under a fixed standard.
- In restitution, the contract price may be competent evidence of the reasonable value of the benefit conferred when not shown to be unreasonable.

## Conclusion

The court held that although foreclosure extinguished the contractors’ mechanics’ liens, equity permitted restitution against the lender-owner that retained and benefited from the improvements; the court also rejected promissory estoppel and prejudgment interest because no definite promise was shown and the restitution amounts were unliquidated until judgment.


Irwin Concrete, Inc. v. Sun Coast Props., Inc., 33 Wn. App. 190, 653 P.2d 1331 (Wash. Ct. App. 1982)