No Written Agreement? No Problem, Says NY Court August 22, 2010

If you take an unreasonable position and refuse to pay for services that were rendered, you should be prepared to have a court rule against you. And that’s exactly what happened in John Anthony Rubino & Co. CPA v.  Schwartz (a decision that is scheduled to appear in tomorrow’s edition of the New York Law Journal).

In Rubino, the plaintiff-accountant was retained to prepare financial projections for a proposed business venture. And he did it.

But when the defendant abandoned the project, he contended that he didn’t owe the plaintiff any money, because he only agreed to pay the plaintiff if the project went through. Not surprisingly, the plaintiff-accountant had a different understanding; he believed that he was going to be paid for the work he did whether the project went through or not.

Since there was no written contract, and the parties clearly did not have the same understanding (in legalese, a “meeting of the minds”), the Court was constrained to dismiss the plaintiff’s breach of contract claim. On the other hand, and nevertheless, the Court held that the plaintiff was still entitled to recover the reasonable value of the services that he rendered, which in legal terms is called “quantum meruit,” (and occasionally, “unjust enrichment“) because the Court held that the defendant’s purported belief that he should not have to pay the accountant unless he decided to pursue this business venture went through was unreasonable as a matter of law.

The moral of this story should be fairly obvious: just because you don’t have a written contract doesn’t mean that you can’t recover your losses.

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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