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Court Holds That Subcontractor Cannot Recover For Unjust Enrichment From Client Owners

The Middle District of Florida held that a client-owner was not unjustly enriched despite a subcontractor’s belief that the client-owner was undercharged by the general contractor. In Commercial Repairs and Sales, LLC v. Signet Jewelers Limited, Plaintiff Commercial Repairs and Sales, LLC (“CRS”) provided construction improvement and facility management. Defendant Signet Jewelers Limited (“Signet”) is a jewelry conglomerate with retail locations around the world.

Signet entered into a contract with Pristine Environmentals, Inc. (“Pristine”), where Pristine agreed to provide general maintenance services for Signet’s retail stores. Pristine then subcontracted with CRS. The terms of the contract required CRS to respond to service requests by Signet, perform an assessment of the scope of the work required, and perform those services if they constituted general construction maintenance. CRS would then invoice Pristine for their services.

During a four-month period, CRS performed approximately $220,000.00 in services in Signet’s Florida stores, and billed Pristine for every service performed. Pristine then billed Signet, and Signet paid each and every invoice it received from Pristine. However, Pristine only paid CRS a fraction of what it owed CRS for its services.

CRS alleged that Signet was unjustly enriched due to the construction and maintenance services it performed. Unjust enrichment is an equitable remedy that allows a court to create an implied or quasi-contract upon which a plaintiff may recover for goods sold or services rendered to a benefitting party who has not provided adequate consideration.

The Court held that Signet was not unjustly enriched merely because a subcontractor believes a general contractor undercharged for its services. Absent some sort of clear and substantial mistake or error in how Signet was billed by Pristine, the Court held that Signet’s payment to Pristine for CRS’s services constitutes adequate consideration and defeats an unjust enrichment claim.

This case shows that a subcontractor will have difficulty succeeding on an unjust enrichment claim against an owner with whom it did not have contractual privity. Subcontractors should ensure that the general contractor is billing the owner at a rate that will satisfy the general contractor’s payment obligation to the subcontractor. Had CRS paid attention to what Pristine was billing to Signet, it would have known that Pristine was not charging Signet an adequate amount to cover CRS’s invoices.