June 11, 2016 • By Dennis Beaver
“We are second year students at the San Joaquin College of Law in Fresno. Recently you wrote about a couple who hired ServPro to clean their father’s apartment in an elderly living facility, signed the work authorization but refused to pay.
“With ServPro employees describing such filth as to require Hazmat suits and breathing devices due to human waste everywhere, if they didn’t do the work, the apartment manager would have hired some other company.
“Our teachers have impressed on us that, as lawyers, we should seek fairness — not help clients avoid legitimate obligations — from encouraging the timely payment of child support, to situations described in your article. While the apartment manager did not sign the contract, based upon what we’ve learned, as a real benefit resulted from the clean-up, it’s unfair to not pay something reasonable for the work.
“Do you know if ServPro’s attorney has contacted the facility’s owners or their attorney and requested payment? If these facts were in a final exam, we would write that unless ServPro is compensated for their labor and material used, this would be unjust enrichment. Finally, Mr. Beaver, we have to thank you for your column and the newspapers who run it. You and the Law is a great teacher. You help people, which is what we want to do as lawyers.”
Learning that the tenant’s family were facing bankruptcy, ServPro’s lawyer first spoke with and then wrote to the Fresno-based manager, “Cindy” enclosing the bill, and stated, precisely what the two law students had noted:
“You would have had a similar bill from any other licensed restoration company, due to the bio-hazard. A significant benefit was obtained without paying for it. Please run this by your attorney, as I am sure a recommendation to negotiate payment with ServPro will be the advice.”
And the response?
“I doubted that she spoke with their lawyer,” ServPro’s attorney told You and the Law. “Her emailed reply stated, ‘Since our management did not contract or engage ServPro,’ we have no payment obligation.”
Were they obligated to pay the ServPro Bill or any part of it? It is true there was no signed contract, the apartment managers did not ask them to do the job, but they remained present during the work and did not stop them. How could they be on the hook? For an answer we turned to Justin Atkinson, Professor and Dean at the San Joaquin College of Law.
“We think of contracts as written documents, but there are other types which we enter into every day without saying a word. When sitting in a barber’s chair for a haircut, ordering an espresso, lunch in a restaurant, we are entering into contracts by our conduct without saying a word. The law calls these Implied in Fact contracts,” Atkinson began.
“Even when someone has not entered into a contractual relationship through words or action, but has received a benefit from someone, the law has the ability to imply a contract in law—or quasi-contract–to avoid an unfair result and prevent unjust enrichment. As in this ServPro case, we ask:
(1) Was a benefit received from the work performed?
(2) Was there an intention to charge for that service?
(3) Was the benefit accepted? This element is to prevent you being sued by the con who mows your lawn without your knowledge and then demands payment. Here, the apartment manager was aware the work was being performed, and was present, clearly allowing it to be done.
(4) Would it be unfair–unjust–to accept that benefit without paying for it?
“So, Dennis, our students who wrote you reached the right conclusion. A judge would find that ServPro would be due ‘the reasonable value of their services,’
which would very likely be what insurance companies would pay for the same type of services.
Reasonable Lawyers + Client Control = A Good Compromise
Known for trying everything possible to keep his clients far away from expensive and emotionally draining litigation, ServPro’s attorney next wrote “Karen” at the Boston–based corporate headquarters. Summarizing the facts and law, his letter concluded:
“Karen, let’s both be part of a solution. We studied these cases in law school. Together we can write a happy ending. Your company does not need a scolding from a Small Claims Court judge. If you give me a reasonable figure, we will accept it, and ServPro looks forward to doing work for you in the future.”
Both lawyers needed to “sit” on their clients, who finally compromised. It was a happy ending written by two lawyers.
Hats off to the San Joaquin College of Law!
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.