Who Pays?

Here is a case from the San Antonio Court of Appeals to know and read.  It is styled, MGR, Inc. and Miracle Body and Paint, Inc. v. Geico Casualty Company.

Miracle is appealing a summary judgment in favor of Geico.

Miracle is an independent auto body shop and has performed work on autos insured by Geico and Geico has paid Miracle according to labor rates disclosed in the Geico repair estimates.  Miracle complains that after the work is completed, Geico has failed to pay the labor rates that Miracle charges and thus, sued Geico for breach of contract, among other causes of action.

To prevail in a claim for breach of contract, Miracle must prove the existence of a valid contract with Geico.  Whether a valid contract is express or implied in fact, it must be based on mutual assent of the parties.

Miracle concedes there is no express contract between the parties.  Miracle argues it had an implied contract with Geico to pay Miracle’s invoices based on the “prevailing market labor rate” for work performed, which Miracles says is the labor rate Miracle charged.

There is no evidence there was ever a “meeting of the minds” nor does Miracle allege Geico ever paid an amount other than the amounts disclosed in the Geico repair estimates.

The fact that Miracle and Geico have a long standing course of doing business, on its own, is not sufficient to raise a fact question as to the existence of an implied contract on the terms Miracle now asserts.

Miracle as sued Geico under a “quantum meruit” theory of law.  To recover, Miracle must prove – 1) valuable services were rendered or materials furnished, 2) for the person sought to be charged, 3) those services and materials were accepted by the person sought to be charged, and were used and enjoyed by him, and 40 the person sought to be charged was reasonably notified that the plaintiff performing such services or furnishing such materials was expecting to paid by the person sought to be charged.

Texas law has held that a plaintiff  who renders services for an insured, does not have a quantum meruit claim against the insurer because any services rendered only indirectly benefit the insurer, if they benefit the insurer at all.

Here, any services Miracle rendered were for the benefit of and accepted, used, and enjoyed by Geico insured, not Geico.  If Geico received any benefit, it was too indirect and attenuated to support a quantum meruit claim.