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Court confirms municipal corporations are not subject to claims for unjust enrichment and city is no

Updated: Jun 29, 2022

In Septagon Construction Company Inc., et al. v. The Industrial Development Authority of the City of Moberly, et al., (Mo. App. W.D. Mar. 7, 2017) the Missouri Court of Appeals affirmed a decision holding that a city was not liable to a subcontractor who was not paid for work done on a private factory that was financed by public bonds. The Court stated that the City, Industrial Development Authority, Redevelopment Corporation, and Economic Development Corporation, all represented by CVR, could not be held liable for not obtaining a payment bond to cover the subcontractor’s work where there was no specific public works contract with a contractor that provided construction services. Although the City entered into financing arrangements with the owner of the private factory, those contracts did not require the owner to provide construction services, and therefore did not trigger the payment bond statute. The court also confirmed once again that municipal corporations cannot be held liable under a theory of implied contract or unjust enrichment.

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