Petitioners tell Texas Supreme Court quantum meruit cannot apply where oral agreements cover the goods

Champion Food Service urged the Supreme Court of Texas to reverse a lower court judgment, arguing the jury was wrongly allowed to award quantum meruit when the disputes centered on oral agreements that covered the same shipments.

"You can't get recovery on quantum meruit whenever there's a valid existing enforceable contract that covers the same materials, the same goods or the same services at issue," petitioner counsel Mr. Vargas told the court, urging that the jury charge should have required a predicate finding on whether an agreement existed and what its terms covered.

Vargas outlined the parties' commercial practice: Champion, a meat distributor, placed specific orders; respondents delivered goods with invoices; Champion paid until restaurants complained the meat was rotten and Champion withheld payment for particular shipments. He emphasized that the record did not show any unsolicited shipments outside the course of transactions that formed the oral agreements.

At the core of Champion's argument is the way the trial court structured the jury questions. Vargas said the court accepted the respondents' invitation to use a broad-form breach question and then submitted a separate quantum meruit question not conditioned on the existence or scope of any agreement. That structure, he argued, allowed quantum meruit to go forward even where the pleadings, evidentiary record, and charge framed the dispute as one over oral contracts.

Respondent counsel, Mr. Turzus, countered that the record permitted the jury to find that certain invoice changes at delivery (including price and quantity adjustments) constituted transactions outside the scope of any agreement, supporting a quantum meruit award for those amounts. "There are changes to what the invoices are submitted," Turzus told the court, pointing to specific plaintiff exhibits showing altered quantities and prices at delivery.

Both sides invoked precedent at argument. Petitioners relied on authorities they said bar quantum meruit where a contract governs the same subject matter; respondents invoked cases allowing quantum meruit when transactions fall outside the contract's scope or when an affirmative defense that an express contract subsumes the claim was not pled.

The court questioned counsel about the charge conference and how the jury's answers should be read in light of Texas'law on inconsistent verdicts and jury findings. No decision was announced; the court took the case under submission after rebuttal arguments.

The case will determine whether, under Texas law, a jury may award quantum meruit when the pleadings and evidence show the parties operated under oral agreements covering the goods at issue, and whether a broad-form jury charge that omits a predicate question on contract terms was reversible error.