I am a huge fan of clearly written construction contracts. Virginia state and federal courts will interpret contract provisions as written and will seek to enforce all of those terms where possible. Where the contract is ambiguous, we construction attorneys make money and the courts are forced to make decisions that the parties may not like.
A recent case out of the Eastern District of Virginia federal court highlights the ways in which a clear contract affects the claims that can be brought and limits the scope of possible litigation. In First Call Environmental LLC v. Murphy Oil USA LLC, the Court looked at a relatively typical Owner, Contractor, Subcontractor set of agreements. In this matter, Murphy Oil entered a contract with National Rapid Response, Inc. (“NRR”) whereby NRR would provide emergency and environmental management and waste disposal services to Murphy Oil. NRR then subcontracted with the Plaintiff First Call to perform the services for Murphy Oil. First Call filed suit against Murphy Oil alleging two counts: breach of contract (based on a third-party beneficiary theory), and unjust enrichment.
The Court reviewed the contracts at issue and concluded that Murphy Oil’s motion to dismiss both counts would be granted. As to the third-party beneficiary breach of contract count, the Court reviewed the contract between NRR and Murphy Oil containing an unambiguous “no third-party beneficiary” provision and concluded as follows:
Here, the plain language of the Murphy Oil and NRR contract indicates that Murphy Oil and NRR did not intend to create a third-party beneficiary, First Call may not assert a breach of contract claim as a third-party beneficiary to the Murphy Oil and NRR contract. Accordingly, the court will grant Murphy Oil’s motion to dismiss Count One. (citations omitted)
As to Count 2 for unjust enrichment, the Court sustained the Motion to Dismiss reasoning:
First Call alleges that it had an agreement that it would “submit invoices to NRR, and NRR would provide the invoices to the end-client, who was ultimately responsible for payment.” In other words, First Call alleges that an express contract between it, NRR, and Murphy Oil required Murphy Oil to pay First Call for the services First Call provided Murphy Oil as NRR’s subcontractor. Thus, an express contract governs the subject matter of First Call’s unjust enrichment claim. (citations omitted)
In short, even where it is not written, an express contract bars an unjust enrichment claim.
As always, I recommend the full opinion (linked above) to your reading and encourage your comments below.
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