E-Alert Case Updates

Court of Special Appeals Adopts the “Last Rendition of Services” Test for Unjust Enrichment Claims

Effie Dolan v. Christopher McQuaide
(December 14, 2016) Court of Special Appeals of Maryland
by Matthew J. McCloskey, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.courts.state.md.us/appellate/unreportedopinions/2016/1060s15.pdf

In a recent unreported decision, the Court of Special Appeals of Maryland explicitly adopted the “last rendition of services” test for determining the accrual date of a cause of action for unjust enrichment.

Plaintiff and Defendant entered into a romantic relationship in 1997, and in 2002 were engaged to be married. Plaintiff alleged that, during their relationship, she and Defendant entered into an enforceable oral contract to jointly build and operate a business called Diamond Car Wash. Between 2002 and 2005, Plaintiff provided Defendant with various services in furtherance of their agreement, including developing a business plan, drafting contracts, and designing a website and logo.

The parties’ relationship eventually deteriorated, and in April 2005 the parties ceased living together. Nevertheless, the car wash opened as planned on October 6, 2005. Plaintiff alleges that Defendant refused to permit her to retrieve her personal items from their formerly shared living space, so on October 14, 2005 she went to the car wash to demand Defendant permit her to retrieve her belongings. Defendant called the police, and Plaintiff was escorted from the premises. She subsequently broke into Defendant’s apartment, retrieved her belongings, and damaged some of Defendant’s property. Plaintiff considered October 14, 2005 to be the end of her personal and professional relationship with Defendant.

Plaintiff contended that Defendant subsequently failed to compensate her for her services in setting up the car wash business. On November 17, 2008, she sued Defendant, asserting ten (10) causes of action. After a lengthy procedural history and two (2) appeals, all but Plaintiff’s unjust enrichment claim were dismissed for various reasons. The matter proceeded to a jury trial on that claim on June 15, 2015. Pertinently, the first question on the verdict sheet that asked, “Do you find that the Plaintiff provided any services after October 14, 2005 that benefitted the Defendant?” The trial court submitted this question to the jury under the theory that if the jury answered the question in the negative, then Plaintiff’s complaint, which was not filed until November 17, 2008, was time-barred by the applicable statute of limitations. The jury unanimously answered this question in the negative and judgment was entered in Defendant’s favor. Plaintiff appealed.

Judge Melanie Marva Shaw Geter, writing for the Court, affirmed. Plaintiff argued that the circuit court erred when it determined that the three-year limitations period began to run on October 14, 2005. Plaintiff asserted that the limitations period accrued when there was a breach of the agreement between the parties. Because she was not to receive compensation for her services until “the carwash generated sufficient funds,” Plaintiff contended that the statute of limitations did not begin to run until Defendant refused to pay her once the car wash became profitable. Defendant, however, argued that Plaintiff’s claim accrued when she ceased performing services and knew that she had not received compensation on October 14, 2005.

The Court explained that Plaintiff’s claim was not predicated upon a breach of contract, but rather Plaintiff’s allegation that she performed services for Defendant without just compensation. After reviewing authority from Maryland and other jurisdictions, the Court noted that the majority of jurisdictions apply the “last rendition of services” test for determining the accrual date of a claim for unjust enrichment. Under this test, a cause of action for unjust enrichment begins to accrue on the last date upon which services are rendered without subsequent just remuneration. Although Maryland arguably adopted this test in an 1891 decision, subsequent cases had been less explicit. The Court therefore specifically adopted the last rendition of services test as the rule in Maryland.

Applying the test, the Court noted that the jury found that Plaintiff last performed beneficial services for Defendant on October 14, 2005. Accordingly, the Court concluded that the Circuit Court did not err in holding that Plaintiff’s unjust enrichment claim was time-barred. It therefore affirmed the Circuit Court’s decision.