Commercial Division Blog

Posted: March 19, 2014 / Categories Commercial, Contracts, Quantum Meruit

Quantum Meruit Claim Survives Even When Contract Claim Dismissed on Statute of Frauds Grounds

On March 18, 2014, the First Department issued a decision in Chapman, Spira & Carson, LLC v. Helix BioPharma Corp., 2014 NY Slip Op. 01685, finding that a breach of contract claim should have been dismissed on statute of frauds grounds but that a related quantum meruit claim survived.

In Chapman, there was no signed writing, but there where e-mails that "evidenced the fact of plaintiff's employment by defendant." As the First Department explained:

[P]laintiff's breach of contract claim is barred by General Obligations Law § 5-701(a)(10), although the statute does not bar plaintiff's quantum meruit claim. In Davis & Mamber, this Court held that for a writing evidencing a contract to satisfy the Statute of Frauds a memorandum must contain expressly or by reasonable implication all the material terms of the agreement, including the rate of compensation if there has been agreement on that matter. Applying this rule, Davis & Mamber precluded a contract claim for failure to satisfy the applicable provision of the statute of frauds, because the relied-on writings lacked any reference to the agreed-on compensation; however, it permitted a quantum meruit claim, because the rule for a writing establishing quantum meruit claims is less exacting, requiring only that the writing evidenced the fact of plaintiff's employment by defendant to render the alleged services. Here, as in Davis & Mamber, the emails of [the defendant's] chairman and CEO[] fail to make any reference to payment terms, and accordingly fail to satisfy the statute of frauds as to the contract claim. However, they suffice to show that [the defendant] employed plaintiff, and are therefore enough to satisfy the statute for purposes of plaintiff's quantum meruit claim.

(Internal quotations and citations omitted) (emphasis added).

This decision shows how a claim that cannot survive as a breach of contract claim might still be brought as a quantum meruit claim.