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Earhart v. William Low Co.

Supreme Court of California
25 Cal. 3d 503, 158 Cal. Rptr. 887, 600 P.2d 1344 (1979)


Facts

William Low (defendant) owned a property that he wished to develop into a mobile-home park. His property was adjoined by property owned by Ervie Pillow. Pillow’s property was subject to a limited-time “special-use permit” that allowed for the construction of a mobile-home park. The special-use permit would expire if construction did not start prior to May 27, 1971. Pillow entered into an agreement with Low to sell her property to Low if he were able to obtain financing for his planned mobile-home park. Low entered into negotiations with Fayette Earhart (plaintiff), the owner of a construction company, to build the Pana Rama Mobile Home Park (Pana Rama) on Low’s and Pillow’s properties. Earhart and Low entered into a contract for the construction of Pana Rama; however, the contract did not become binding until Low secured financing and Earhart procured a labor-and-material or performance bond for the project. On May 25, 1971, Low called Earhart claiming to have secured financing for Pana Rama. He told Earhart to start work on Pana Rama immediately in order to preserve the special-use permit on Pillow’s property. Earhart immediately started construction on Pana Rama, working for one week. When Earhart submitted a bill to Low for the first week’s work, Earhart learned that Low had in fact not received financing for the park. Low refused to pay Earhart’s bill and had in fact hired a different construction company to build Pana Rama. Earhart sued Low in quantum meruit. Earhart argued that he had spent money and provided services at Low’s request and should receive restitution. The trial court found in favor of Earhart, granting Earhart restitution for his expenditures on Low’s property, but denying restitution for Earhart’s expenditures on Pillow’s property. The trial court reasoned that Low had not received any direct benefit from improvements to a property he did not own. Earhart appealed.

Rule of Law

Issue

Holding and Reasoning (Tobriner, J.)

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