Facts

Plaintiff Barbara Henslee, dba Realog Logging, was assigned two oral subcontracts from plaintiff Ronald Elliott, who had subcontracted with defendant United Pacific Services Inc. to cut and haul away dead trees in the Palmar Mountains.

The county of San Diego had awarded the contracts to defendant. One of the contracts was for $575,000 and the other for $920,000. Under the terms of the contracts, a timber operators license was required. Defendant United Pacific did not have a license, and plaintiff Elliott's had been suspended. Plaintiff Henslee's company had a license.

Plaintiff Realog filed suit against defendant and its bond issuer, alleging breach of contract and quantum meruit. Plaintiff sought one-third of the contract funds pursuant to an oral agreement.

The defendant contested the claims, asserting that plaintiff operated illegally without a contractor's license. The defendant counterclaimed, contending that plaintiff Elliott and defendant's president, Gus Franklin, agreed that Elliott would pay for logs that were taken from the mountain. However, plaintiff Realog, plaintiff Elliott's assignee, never furnished the wood.

Damages

After plaintiff received a partial payment of $200,000, it sought an additional $256,000, claiming it was entitled to that amount under the oral contract. Defendant sought $173,000 in its counterclaim, claiming unjust enrichment connected to the value of the trees.

Result

The defendant was granted a motion to bifurcate the case. During the first phase, the court concluded that the subcontract was not illegal, and the terms of the oral agreement were insufficiently defined to enforce an oral contract. In the second phase, the court found in favor of plaintiff Realog, awarding it over $333,000 based on quantum meruit. With regard to the cross-complaint, the court found the trees did not have any value and found for plaintiffs.