quantum meruit – Duane Morris Construction Law

Home construction and improvement projects in the U.S. are governed state and local laws that require contractors to be properly licensed and registered. These laws are designed to protect homeowners and maintain industry standards. Whether building a new home or renovating an existing one, contractors are typically required to hold valid licenses, register their businesses, and comply with the laws and standards that govern the industry. If a contractor fails to meet these requirements, they may lose the ability to enforce their contracts, recover payment, or defend themselves in court, even if the work is completed.

A recent case from Florida illustrates the risks of noncompliance with contractor licensing statues. In CAM Bradford Homes, LLC v. Arrants, the Florida First District Court of Appeal upheld a trial court’s ruling that CAM Bradford Homes could not enforce its contract with homeowners because it was an unlicensed contractor. The homeowners had hired the company to build a single-family home in Fernandina Beach. Although the company owner, a certified general contractor, personally oversaw the project, he failed to register the business with the Department of Business and Professional Regulation as required by Florida law. As a result of this omission, the company could not pursue its claims in court.

Before the project was completed, the homeowners terminated the contract. CAM filed suit alleging breach of contract and other related claims, including lien foreclosure and unjust enrichment. The homeowners responded with counterclaims and moved for summary judgment, arguing that the contract was unenforceable because the company was unlicensed. The trial court agreed, finding that CAM’s failure to apply as a qualifying agent meant the company was unlicensed, and granted summary judgment in favor of the homeowners. On appeal, the CAM contended that CAM’s owner’s active role in the project should suffice to establish him as a de facto qualifying agent. However, the appellate court rejected this argument, emphasizing that statutory language requires formal registration and certification for a business to be considered licensed.

The court’s analysis leaned heavily on principles of statutory interpretation, particularly the surplusage canon, which holds that every word in a statute should be given meaning, and none should be interpreted as redundant or meaningless if it can be reasonably avoided. Accepting CAM’s argument would undermine the statute’s requirement of registration for business engaged in contracting. The court noted that only sole proprietorships may rely on an individual’s license without further application, and that CAM’s failure to apply meant the business never received the necessary certificate or registration. As such, the contract was unenforceable under, and the company was barred from asserting any lien or bond claims.

This decision stands in sharp contrast to Schott v. Lucatelli, a case recently reviewed in this blog, where the New York State Supreme Court, Appellate Division, Third Department took a more flexible approach to a construction dispute. In Schott, the court addressed a disagreement over the construction of a single family residence without a written contract. Despite the absence of a formal agreement, the court allowed recovery under the equitable doctrine of quantum meruit, awarding the contractor compensation for services rendered. The court found that the contractor had performed work in good faith, that the homeowner accepted the services, and that the work had reasonable value. Even after accounting for defective work, the court awarded the contractor a monetary judgment that included prejudgment interest.

While both cases involved building single-family homes and disputes over licensing, the courts reached different outcomes based on how they interpreted the law. Florida’s approach in CAM Bradford Homes emphasized strict compliance with licensing requirements. New York’s approach in Schott was more flexible, allowing recovery based on fairness and the realities of informal arrangements.

Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel at Duane Morris LLP’s New York office, where he is a member of Construction Group, specializing in construction law, lien law, and government procurement law. He is also a member of the Cuba Business Group.

This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed herein are those of the author and do not necessarily reflect the views of Duane Morris LLP or its individual attorneys.

In Schott v. Lucatelli, decided by the New York State Supreme Court, Appellate Division, Third Department on June 12, 2025, the court addressed a dispute between two members of an extended family over the construction of a home. In 2017, the defendant asked the plaintiff to build a home, but the parties never entered into a written contract. Construction began in 2018, and while plaintiff was paid for work performed that year, a dispute arose in early 2020 over escalating costs. When plaintiff returned from a winter trip to Florida in April 2020, he discovered that defendant had changed the locks on the unfinished home and hired someone else to complete the project.

Plaintiff sued to recover compensation for work performed between May 2019 and January 2020. Defendant responded with counterclaims, including breach of contract. The trial court found no enforceable contract under New York General Business Law § 771, which requires a written agreement for building a new single-family home on land the buyer owns at the time of the contract. As a result, plaintiff could not recover under a breach of contract theory. Instead, the court evaluated his claim under the equitable doctrine of quantum meruit, which allows recovery for services rendered when no formal contract exists, provided certain elements are met.

The court found that plaintiff had performed services in good faith, that defendant accepted those services, that he expected compensation, and that the services had reasonable value. Plaintiff testified that he worked 31 weeks at 40 hours per week, and the court determined that $35 per hour was a fair rate, totaling $43,400. However, due to evidence of defective work, the court reduced the award by $12,750, resulting in a judgment of $30,650 in plaintiff’s favor. The court also granted prejudgment interest from the date defendant prevented plaintiff from completing construction.

On appeal, the defendant challenged both the award and the prejudgment interest. The appellate court affirmed the trial court’s decision, noting that the plaintiff had provided sufficient testimony and supporting evidence. It further held that prejudgment interest was appropriate, reasoning that although quantum meruit is an equitable theory, its quasi-contractual nature permits interest under NY CPLR 5001(a), which authorizes interest on damages in contract and property-related actions from the time the claim arose. Without deciding whether such interest is mandatory or discretionary, the court found the award proper under either standard.