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Gleason v. Rattan

Court of Appeals of Kansas

October 3, 2014

GLEASON & SON SIGNS, Appellee,
v.
MADAN RATTAN, Appellant, and KANEB INVESTMENT GROUP, LLC, Defendant

Page 1197

Appeal from Saline District Court; JEROME P. HELLMER, judge.

SYLLABUS

BY THE COURT

1. Where a mechanic's lien is not an available remedy, the failure to file a mechanic's lien does not bar the subcontractor from seeking recovery under another theory, such as quasi-contract.

2. A contract implied in fact is one inferred from the facts and circumstances of the case but which is not formally or explicitly stated in words. It is the product of agreement, although it is not expressed in words. A contract implied in law does not rest on actual agreement. It is a legal fiction created by the courts to ensure justice or to prevent unjust enrichment.

3. When the material facts are not in dispute, whether a subcontractor can recover from an owner on a quasi-contract theory is a question of law subject to unlimited review.

4. In the context of a quasi-contract claim brought by a subcontractor against a property owner, the essential prerequisite for liability is the acceptance by the owner (the one sought to be charged) of benefits rendered under such circumstances as reasonably notify the owner that the one performing such services expected to be compensated therefor by the owner. In the absence of evidence that the owner misled the subcontractor to his or her detriment, or that the owner in some way induced a change of position in the subcontractor to his or her detriment, or some evidence of fraud by the owner against the subcontractor, an action for unjust enrichment does not lie against the owner by a subcontractor.

5. On the facts of this case, a mechanic's lien was not an available remedy for a subcontractor seeking damages for expenses incurred beyond the contract price, the property owner incorrectly told the subcontractor where to perform its work (the installation of a sign at a motel), and the subcontractor relied to its detriment on the owner's representation. Accordingly, the subcontractor had a valid quasi-contract claim against the property owner for the additional expenses incurred in initially installing the sign at the wrong location.

Nathanael Berg, of Hampton & Royce, L.C., of Salina, for appellant.

No appearance for appellee.

Before LEBEN, P.J., PIERRON and STEGALL, JJ.

OPINION

Page 1198

Pierron, J.:

Madan Rattan, a partner in Kaneb Investment Group, LLC (Kaneb), individually appeals the district court's judgment against him on a claim brought by Gleason & Son Signs (Gleason). Gleason was a subcontractor to Persona, a business entity that contracted with Kaneb to manufacture and install a sign on Kaneb's motel property. Rattan argues the district court erred in finding Gleason was entitled to judgment against him for expenses related to the relocation of the sign.

Rattan is a partner and one-third owner in Kaneb, which owns the Sleep Inn motel in Salina, Kansas. During the construction of the motel, Kaneb contracted with Persona to manufacture and install a sign on the motel property. Persona then subcontracted with Gleason to install the sign. Neither written contract is included in the record on appeal. According to bench trial testimony, the contract between Persona and Gleason contained provisions that stated: " 'Please schedule a pre-install survey to mark out the location of the ground sign'" ; and " 'Invoice will not be completed without detailed completion photos and the customer signoff return[ed] to us.'"

Gary Gleason, president of Gleason, testified that his normal practice before installing a sign is to talk to the project supervisor and the property owner and come to an agreement about where the sign should be installed. He does not check site plans to verify that the agreed sign location is actually on the owner's property. In July 2008, Gary spoke to Kenny McDonald, the project supervisor for the construction of the motel, and to Rattan about where to install the sign.

Page 1199

Rattan stated he owned all of the property between the motel and the interstate, so Gary could pick the best location. Gary and McDonald chose a spot, at which point McDonald went back to Rattan and got Rattan's approval for that location.

Gleason dug a hole and was preparing to pour concrete when an employee of the Kansas Department of Transportation (KDOT) approached and asked if Gleason was sure that the motel owned the property where the sign was being installed. Gary and McDonald went back to Rattan, who stated the property was owned by a co-op and that he was the majority owner of the co-op. Gary questioned whether the sign could be installed on co-op property. Rattan ultimately told Gary to " 'do whatever [he had] to do,'" so Gleason filled in the first hole and moved the sign to a new location. Gleason was paid by Persona for the work performed to install the sign at the new location. However, Gleason did not invoice Persona for expenses related to the ...


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