Skip to main content

Centerpoint Group LLC v. Perot System Inc.

2010 WL 2522080 (U.S. Dist. Ct. D. N.J. 2010) (Unpublished)

CONTRACTS; PROMISSORY ESTOPPEL; UNJUST ENRICHMENT — Claims of promissory estoppel and unjust enrichment are mutually exclusive with the existence of a valid contract and unjust enrichment is not an independent cause of action.

A company hired an auditing and data management firm to analyze its expenditures and to deliver a series of reports summarizing the consultant’s findings and offering recommendations as to how to reduce expenditures. They executed a professional services agreement and an ancillary Statement of Work agreement. For the consultant’s services, it was to receive 35% of its realized savings to the firm for a two-year term. The 35% charge was contingent upon the consultant’s projected savings surpassing 10% of its client’s annual expenditures and the consultant subsequently implementing one or more of its cost reduction recommendations. The Statement of Work required that if the consultant projected a greater than 10% savings, the client would implement the recommendations.

During the first year, the consultant delivered a report with recommendation to reduce office supply expenditures. The recommendation projected a 14.6% reduction, thereby triggering the agreement’s mandatory implementation provision. The consultant expected to receive 35% of the projected savings, but the client terminated the contract.

The consultant filed suit in federal district court to recover the amount it expected to receive. It asked for other equitable relief and alleged a breach of contract. Alternatively, it pleaded promissory estoppel and unjust enrichment. The client moved to dismiss the complaint.

First, the Court addressed the breach of contract claim and found that the consultant’s right to receive its fee was dependent on the client realizing actual, documented, savings, and not just projected savings. It also found that the consultant never prepared certain required documents to supplement its savings proposal. In short, the Court concluded that no payment was due until actual office supply savings were realized and there could be no breach of contract performance under the agreement unless there were any savings.

The Court also refused to grant the quasi-contractual remedies of promissory estoppel and unjust enrichment because the parties had a lawful, binding contract. Where a valid contract covers the alleged promise, the principles of promissory estoppel do not apply. Similarly, recovery on a theory of unjust enrichment presumes that there is no express contract but, here, there was one.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •