Jose A. Aquino | Duane Morris
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.
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