Housing Works's seventh claim for relief alleging fraud and
misrepresentation is dismissed.
F UNJUST ENRICHMENT AND QUANTUM MERUIT
The City also moves to dismiss Housing Works's eighth claim alleging
unjust enrichment and quantum meruit. As one court recently observed,
"Quantum meruit is a doctrine of quasi contract . . . [which] are not
contracts at all, although they may give rise to obligations more akin to
those stemming from contract than from tort. The contract is a mere
fiction, a form imposed in order to adapt the case to a given remedy."
Aniero Concrete Co., Inc. v. New York City Construction Authority, No. 94
Civ. 3506, 2000 WL 863208, *9 (S.D.N.Y. June 27, 2000). A party seeking
to recover for unjust enrichment has the burden of proving that (1)
defendant is holding property, (2) under such circumstances that in
equity and good conscience defendant ought not to retain it. Simonds v.
Simonds, 380 N.E.2d 189, 194 (N.Y. 1978). Because it is based on a theory
of implied contract, Housing Works's eighth claim for relief presents a
slightly closer call than the claim for fraud.
Both parties advance ample authority to support their positions. The
City relies primarily on a line of cases holding that the general rule is
that there can be no recovery against a municipality in quantum meruit
where the original contract is void as contrary to statute. Nevins Realty
Corp. v. State of New York, 658 N.Y.S.2d 132, 133 (App. Div. 2d Dep't
1997) (the alleged agreement "required an independent approval of the
State Comptroller to be valid. Since that approval was not obtained, the
State is not liable for the rents now alleged by claimant to be
outstanding."); Gill Korff and Associate, Architects and Engineer, P.C.
v. County of Onondaga, 544 N.Y.S.2d 393 (App. Div. 4th Dep't 1989); New
York State Ass'n of Plumbing-Heating-Cooling Contractors, Inc. v. Egan,
449 N.Y.S.2d 86, 88 (App. Div. 3d Dep't 1982) ("A contractor who has
performed work pursuant to a noncomplying contract may be denied
recovery, either under its agreement or on the basis of quantum meruit,
even when the unit of government has received the benefit of
performance."). Borrowing from its arguments in its motion to dismiss the
fraud claim, the City claims that recovery under an unjust enrichment
theory is precluded because of the noncompliance of Housing Works's
contract, that is, the lack of the City Comptroller' s approval.
For its part, Housing Works cites cases which concede the general rule
above, but permit recovery for plaintiffs suing municipalities in very
limited instances. See, e.g., Vrooman v. Village of Middleville, Herkimer
County, 458 N.Y.S.2d 424 (App. Div. 4th Dep't 1982), appeal dismissed,
449 N.E.2d 427 (1983). In Vrooman, the court held that
A plaintiff is entitled to recover from a municipality
where, as here, he has entered into a contract in good
faith, the municipality possesses the authority to enter
into the contract, the contract is not violative of
public policy and the circumstances indicate that if
plaintiff is not compensated, the municipality would be
Id at 426. Until this point, all of the parties are essentially
correct. There is a general prohibition of unjust enrichment claims
against municipalities, but narrowly circumscribed exceptions exist.