Alternatives Unlimited, Inc. v. New Baltimore City Board of School Commissioners

CHARLES E. MOYLAN, Jr., Judge, retired, specially assigned. The leitmotif that runs through this opinion was first sounded by the Court of Appeals in 1943 in the landmark case of Gontrum v. City of Baltimore, 182 Md. 370 , 35 A.2d 128 . Gontrum established that many of the standard rules governing the relationship between two contracting parties do not apply when one of those parties, instead of being a private person or private corporation, is a municipality or other governmental entity. The rationale for the difference is very similar to the rationale behind sovereign immunity.

The literal holding of Gontrum was in the context of an ostensibly express contract. This appeal requires us to determine whether the rationale, as opposed to the holding, of Gontrum also extends to implied contracts, both those implied in fact and those implied in law. The appellant, Alternatives Unlimited, a Maryland corporation that provides alternative education programs, sued the appellee, the Baltimore City Board of School Commissioners, seeking compensation for services provided to the Board from September 25, 2000, through May 23, 2001. Carmen V. Russo, the Chief Executive Officer of the Baltimore City School system, was initially also a defendant, but summary judgments were granted in her favor on all counts against her. ⁴²³ The appellant is not challenging those judgments, and Ms. Russo, therefore, is not a party to this appeal.

Dismissals By Judge Glynn And Summary Judgment By Judge Allison The pleading that concerns us is the First Amended Complaint, filed on June 10, 2002. That complaint was drawn in nine counts. Following a full hearing in the Circuit Court for Baltimore City on July 17, 2002, Judge John Glynn granted the Board’s Motion to Dismiss seven of those nine counts. The two counts against the Board which were not dismissed were Count V, a claim for Quantum Meruit, and Count VI, a claim of Unjust Enrichment.

After the filing of an Answer to the First Amended Complaint by the Board and a period of discovery, the Board filed a Motion for Summary Judgment on the two remaining counts. Following a full hearing on January 10, 2003, Judge Kaye A. Allison granted summary judgment in favor of the Board on those two remaining counts. On appeal, Alternatives raises essentially the two contentions 1. that Judge Allison erroneously granted summary judgment in favor of the Board on Counts V and VI alleging, respectively, 1) quantum meruit and 2) unjust enrichment; and 2. that Judge Glynn erroneously dismissed Count IX, demanding an accounting from the Board. Gontrum v. Baltimore With respect to Alternatives’s primary contention, it behooves us preliminarily, before even narrating the facts in this case, to set out the dispositive holding of Gontrum v. Baltimore, 182 Md. at 375-78 , 35 A.2d 128 .

Every aspect of the factual narrative takes on legal significance when looked at through the prism of Gontrum . It was on the authority of Gontrum that Judge Glynn dismissed six of the eight substantive counts that were before him, dismissals that Alternatives ⁴²⁴ does not now challenge. It was also on the authority of Gontrum that Judge Allison granted summary judgment in favor of the Board on the two remaining counts. The plaintiff, Gontrum, sought relief against Baltimore City on the ground that he had been fraudulently induced by two city officials to convey a twenty-foot wide right of way across his property for a sewer line.

The two city officials on whom he relied were 1) the Land Surveyor, who was an engineering aide in the Sewer Department and whose duty it was to secure rights of ways for sewers; and 2) an assistant city solicitor. The representation was that Baltimore City, which had already obtained a City Council ordinance for condemning and opening Cedonia Avenue across Gontrum’s property, would soon be implementing that ordinance by condemning a sixty-foot right of way which would overlay the twenty-foot wide sewer right of way that Gontrum was conveying to the city voluntarily. The representation to Gontrum included the assurance that “he would suffer no abatement of compensation when the street was finally condemned and damages awarded, by reason of the [earlier and voluntary] conveyance of the twenty-foot sewer right of way.” 182 Md. at 373 , 35 A.2d 128 . After 1) ditches had been dug, 2) sewer pipes and drains had been installed, and 3) nine years had gone by without any hint of condemnation of his property for the opening of Cedonia Avenue, Gontrum finally demanded relief.

He sought to have Baltimore City at once begin the removal of its sewerage pipes and drains from the right of way and easement for sewers over the land of the appellants granted by said agreement, or pay to the appellants such damages as would he fair compensation for the land in the said right of way. 182 Md. at 372 , 35 A.2d 128 (emphasis supplied). Much as Alternatives in the present case relied upon an anticipated retroactive approval of a contract, Gontrum relied, to his detriment, on an anticipated condemnation by Baltimore City. ⁴²⁵ It is contended by the appellants that Glover represented to them that Cedonia Avenue would be opened by the City within a very short time, that this representation was confirmed by von Wyszecki, and that it was in reliance upon these representations that the sewer right of way agreement was signed. 182 Md. at 374 , 35 A.2d 128 (emphasis supplied). Just as the Board in this case may arguably have reaped certain benefits from the efforts of Alternatives without paying for them, the City of Baltimore, in the Gontrum case, had been for nine years very definitely “enjoying the benefits accruing to it under the sewer right of way agreement, ■without having compensated [Gontrum] therefor.” 182 Md. at 377-78 , 35 A.2d 128 . Unfair as it may seem, Gontrum was nonetheless afforded no relief.

The overarching principle of Gontrum is that a governmental entity, unlike a private corporation, may never have an obligation imposed upon it to expend public funds except in the formal manner expressly provided by law. There is no exemption from this rule because of any apparent authority of one of its agents to bind the governmental entity. There is imposed on any party dealing with the governmental entity, moreover, an absolute responsibility 1) to know the limitations on the powers of the agent to contract on behalf of the governmental entity and 2) to be familiar with and bound by “the power of the particular officer or agency to make the contract” in question. Gontrum stated unequivocally: [T]here is another and more cogent reason why the appellants are not entitled to relief in this case.

It is a fundamental principle of law that all persons dealing with the agent of a municipal corporation are bound to ascertain the nature and extent of his authority. Dillon’s Municipal Corporations, 5th Ed., Sec. 777. A municipal corporation is not bound by a contract 'made in its name by one of its officers or by a person in its employ, although within the scope of its corporate powers, if the officer or employee had ⁴²⁶ no authority to enter into such a contract on behalf of the corporation. Section 1268 of McQuillin’s Municipal Corporations, 2d Ed., states that “The general rule is well settled and is constantly enforced that one who makes a contract with a municipal corporation is bound to take notice of limitation of its powers to contract and also of the power of the particular officer or agency to make the contract.” 182 Md. at 375 , 35 A.2d 128 (emphasis supplied).

Gontrum actually applied long-settled Maryland law, as it cited and quoted with approval from a line of Maryland decisions dating back to 1862. Baltimore v. Eschbach, 18 Md. 276, 282 (1862), first stated that a public entity will not be bound by an action of an employee even under circumstances where a private entity might well be bound by a similar action by one of its agents. Although a private agent, acting in violation of specific instructions, yet within the scope of a general authority, may bind his principal, the rule, as to the effect of the like act of a public agent, is otherwise. The City Commissioner, upon whose determination to grade and pave, the contract was made, was the public agent of a municipal corporation, clothed with duties and powers, specifically defined and limited, by ordinances bearing the character and force of public laws, ignorance of which can be presumed in favor of no one dealing with him on matters thus conditionally within his official discretion.

(Emphasis supplied). Baltimore v. Eschbach went on to hold: [T]he law makes a distinction between the effect of the acts of an officer of a corporation, and those of an agent for a principal in common cases; in the latter the extent of authority is necessarily known only to the principal and the agent, while, in the former, it is a matter of record in the books of the corporation, or of public law. A municipal corporation cannot be held liable for the unauthorized acts of its agents, although done officii colore, without some ⁴²⁷ corporate act of ratification or adoption; and, from considerations of public policy, it seems more reasonable that an individual should occasionally suffer from the mistakes of public agents or officers, than to adopt a rule, which, through improper combinations and collusion, might be turned to the detriment and injury of the public. 18 Md. at 282-83 , quoted in Gontrum, 182 Md. at 375-76 , 35 A.2d 128 (emphasis supplied). Gontrum also quoted with approval, 182 Md. at 376 , 35 A.2d 128 , from Baltimore v. Reynolds, 20 Md. 1, 10-11 (1863): “In cases of public agents, the government or other authority, is not bound unless it manifestly appears that the agent is acting within the scope of his authority, or he is held out as having authority to do the act, or is employed in his capacity as a public agent to make the declaration or representation for the government.

Indeed this rule seem indispensable, in order to guard the public against loss and injuries arising from the fraud or mistake, or rashness and indiscretion of their agents. ” (Emphasis supplied). Gontrum, 182 Md. at 376-77 , 35 A.2d 128 , similarly quoted with approval from State v. Kirkley, 29 Md. 85, 110 (1869): No principle of the law relating to municipal corporations is more firmly established than that those who deal with their agents or officers must, at their peril, take notice of the limits of the powers both of the municipality and of those who assume to act as its agents and officers; and in no State has this principle been more frequently applied or more rigidly enforced than in Maryland. (Emphasis supplied). State v. Kirkley had gone on to say, 29 Md. at 111 : The reasonableness and necessity of the rule rests upon the ground that these bodies corporate are composed of all the inhabitants within the corporate limits; that the inhabitants are the corporators; that the officers of the corporation, including the legislative or governing body, are merely the public agents of the corporators; that their duties and ⁴²⁸ powers are prescribed by Statutes and Ordinances, and every one, therefore, may know the nature of these duties and the extent of these powers.

(Emphasis supplied). See also Horn v. Baltimore, 30 Md. 218 (1869); Baltimore v. Gill, 31 Md. 375 (1869); Baltimore v. Musgrave, 48 Md. 272 , 30 Am. Rep. 458 (1878); Mayor, Etc. of Baltimore v. Keyser, 72 Md. 106 , 19 A. 706 (1890); Mealey v. Hagerstown, 92 Md. 741 , 48 A. 746 (1901); Packard v. Hayes, 94 Md. 233 , 51 A. 32 (1902); Western Md. R.R., Co. v. Blue Ridge Hotel Co., 102 Md. 307 , 62 A. 351 (1905); Valentine v. Road Directors, 146 Md. 199 , 126 A. 147 (1924); Howard County Comm’rs v. Matthews, 146 Md. 553 , 127 A. 118 (1924); Lipsitz v. Parr, 164 Md. 222 , 164 A. 743 (1933). Gontrum is now the unchallenged flagship case that is consistently and regularly followed.

Hanna v. Board of Education of Wicomico County, 200 Md. 49, 57 , 87 A.2d 846 (1952), cited it as authority for the proposition: The rule is firmly established that one who makes a contract with a municipal corporation or administrative agency is bound to take notice of the limitations of its powers to contract. In Inlet Associates v. Assateague House Condominium Assoc., 313 Md. 413, 437 , 545 A.2d 1296 (1988), the Court of Appeals cited both Gontrum and Lipsitz v. Parr, as it held that a party dealing with officials of a municipality is charged with knowledge of the limits on the power to act by those officials and may not invoke the doctrine of equitable estoppel simply because it “relie[d] upon erroneous official advice to its detriment.” 1 ⁴²⁹ [E]veryone dealing with officers and agents of a municipality is charged with knowledge of the nature of their duties and the extent of their powers, and therefore such a person cannot be considered to have been deceived or misled by their acts when done without legal authority. Therefore, the doctrine of equitable estoppel “cannot be ... invoked to defeat the municipality in the enforcement of its ordinances, because of an error or mistake committed by one of its officers or agents which has been relied on by the third party to his detriment. ” (Emphasis supplied). The Key Parties What, then, are the facts to which Gontrum and its progeny must be applied?

The key to this case is the professional and contractual relationship, if any, among three persons. The central player for Alternatives Unlimited was its president and chief executive officer, Dr. Stuart Berger. Alternatives, a Maryland corporation, is a provider of alternative education programs. It has had contracts with urban school districts in cities such as Chicago, Houston, St. Louis, Kansas City, and Syracuse.

At the time of the controversy in this case, Alternatives had been in business for approximately five and one ⁴³⁰ half years. It was incorporated in the Spring of 1997, with Dr. Berger having been one of the incorporators. Dr. Berger was also the president of Alternatives’s Board of Directors and his wife was the Board’s vice-president. Dr. Berger was the only person authorized to enter into contracts on behalf of Alternatives.

Dr. Berger also had had extensive experience with public education in Maryland. In the middle 1990’s he had been the superintendent of the Baltimore County School System, and apparently had earlier served as the superintendent of the Frederick County school system as well. The two key players for the Board were Carmen V. Russo and Dr. Elizabeth Morgan. At the time of the first of two possible meetings she had with Dr. Berger, Ms. Russo had just been appointed as Chief Executive Officer of the Baltimore City Public School System, but had not yet assumed her new duties.

As of August 1, 2000, however, she had officially taken office. Dr. Morgan was, at all pertinent times in this case, the Chief Academic Officer in that system. The Procurement Policy of the School Board As spelled out in Maryland Code, Education Article, § 4-302, the municipal corporation known as the Mayor and City Council of Baltimore has the responsibility to “establish and maintain a system of free public schools in Baltimore City.” To implement that mandate, § 4-303(a) establishes a Baltimore City Board of School Commissioners. Section 4-304 sets out the powers and duties of its Chief Executive Officer.

Section 4-305 sets out the powers and duties of its Chief Academic Officer. Section 4-306.1 lists “Additional Powers of [the] Board,” including the power to (4) Enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this subtitle, employ consulting engineers, architects, attorneys, construction and financial ex ⁴³¹ perts, and other employees and agents, and determine their compensation. (Emphasis supplied). The Board also has, pursuant to § 4 — 303(d)(2), the power to “adopt rules and regulations and prescribe policies and procedures for the management, maintenance, operation, and control of the Baltimore City Public School System.” Section 4-310(a) also specifically provides: Notwithstanding any provision of local law, the Board shall adopt rules and regulations governing the procurement of goods and services by the Baltimore City Public School System in accordance with § 5-112 of this article {requiring competitive bidding).

(Emphasis supplied). Of dispositive significance to the claim for professional services made by Alternatives in this case is the fact that on June 27, 2000, the Board, pursuant to §§ 4-303(d)(2) and 4-310(a), promulgated a set of Procurement Policies and Procedures, including § 2-107(2), which provides: (2) Professional Service Contracts — $15,000 or More: Professional Service Contracts in the amount of $15,000.00 or more, must be approved, in uniting, by the School Board. Once a contract has been approved by the School Board, any proposed changes to the approved contract must be submitted to the School Board for its approval. (Emphasis supplied).

Even without the benefit of a contract that had been approved by the Board, Alternatives nevertheless claimed that it was due $284,750 for professional services. The Dropout Prevention Program at Southern High School Alternatives and Dr. Berger were fully familiar -with the controlling procurement procedures and requirements. On December 8, 1999, Alternatives had been one of eight firms submitting competitive bids for dropout prevention programs at six Baltimore City high schools. Alternatives submitted what was ultimately the winning bid for Southern High School ⁴³² and on April 25, 2000, was awarded, by the Board, a contract to “provide a dropout prevention program at Southern” for the remainder of the School Year 1999-2000.

The contract amount was $76,207. The Dropout Prevention Program was to provide a ninth grade educational program with remedial reading and math instruction, along with supportive counseling services, for 60 students then actually enrolled at Southern High School. The Dropout Prevention Program began at Southern on May 1, 2000, and operated during the spring, summer, and fall semesters of 2000. There is no quarrel with respect to the Dropout Prevention Program.

Alternatives followed the prescribed procurement procedures and received the approval of the Board for a written contract for the amount of $76,207. For present purposes, Alternatives was demonstrably familiar with the Board’s procurement procedures and requirements. Alternatives’s Effort to Procure a Contract For a Different and Larger Program In June of 2000, Dr. Berger began to promote a different and significantly more expensive proposal. Dr. Berger believed that Alternatives’s techniques for keeping “at risk” students from dropping out of school could also be successfully employed to entice students who had already dropped out to return to school.

This case turns on the success or failure of Dr. Berger to “sell” that different and more expensive proposal to the Board. The heart of Alternatives’s Complaint was that, through the agency of Ms. Russo, the Board’s Chief Executive Officer, Alternatives actually entered into an oral contract with the Board to implement (and that it did implement) a Drop-Back-In Program at an initially agreed upon cost to the Board of $250,000 (for 50 students). It later claimed, however, that the contract price had risen to $284,750 (for 67 students). On the basis of Gontrum , all of the counts (six of the nine) based on the existence of a contract were facially inadequate ⁴³³ to state a cause of action.

Accordingly, Judge Glynn dismissed those counts. While Defendants raised numerous contentions, they rely principally on Gontrum v. Baltimore which, in pertinent part, says: “It is a fundamental principal of law that all persons dealing with the agent of a municipal corporation are bound to ascertain the nature and extent of his authority. A municipal corporation is not bound by a contract made in its name by one of its officers or by a person it employs, although within the scope of its corporate powers, if the officer or employee had no authority to enter into such a contract on behalf of the corporation.” 182 Md. at 375 , 35 A.2d 128 The rationale for this policy is that, “it seems mare reasonable that an individual should occasionally suffer from mistakes of public agents and officials, than to adopt a rule, which, through improper combinations and collusion, might be turned to the detriment and injury of the public.” 182 Md. at 130-31 , 32 A.2d 477 . The School Board argues that the rule in Gontrum is a rigid rule consistently followed by Maryland courts, which permits no exception.

Since it is undisputed that the School Board never properly approved or ratified Plaintiffs contract pursuant to its own rules, it is of no consequence that the School Board’s agents may have made statements to the contrary and provided assurances to the Plaintiff for the purpose of causing them to continue to provide services for which the School Board refused and still refuses to pay. The rule in Gontrum is harsh. Nonetheless, it must be applied in fact situations that are consistent with its rationale. The rationale of Gontrum is based upon the public policy of protecting the municipality from the inappropriate acts or mistakes of its agents.

(Emphasis supplied). For separate reasons, later to be discussed, Judge Glynn also dismissed a count under which Alternatives demanded an Accounting by the Board. ⁴³⁴ The Two Remaining Counts And Summary Judgment Judge Glynn did not dismiss the two counts against the Board alleging 1) quantum meruit and 2) unjust enrichment. At a subsequent hearing on the Board’s Motion for Summary Judgment, Judge Allison did grant summary judgment in favor of the Board on both of those counts, also on the authority of Gontrum . Her rulings, however, were not based solely on the facial inadequacy of the counts.

At the summary judgment stage, there is the additional consideration of whether there is any proffered evidentiary support for the claims. Accordingly, our scope of review is broader in looking at a grant of summary judgment than it is when evaluating a dismissal. The context for that evidentiary review, however, was still framed by the Complaint filed by Alternatives against the Board and its agents. If our discussion of the inadequacy of Alternatives’s case with respect to quantum meruit and unjust enrichment wanders at times beyond the range of Judge Allison’s literal reason for granting summary judgment, our response is that so many elusive theories and ever shifting concepts have been intertwined in Alternatives’s arguments that the resolution of even a narrow issue would be largely unintelligible without an appreciation of the bigger picture.

In Francis O. Day Co., Inc. v. Montgomery County, 102 Md.App. 514, 517 , 650 A.2d 303 (1994), Judge Cathell, after deciding that case on a narrower ground, felt similarly behooved to set the larger stage. While we shall resolve the issue presented in our discussion of the granting of the summary judgment, we cannot help noting that, even if appellant had mode it past the summary judgment motion, the problems it would then have faced on an unjust enrichment claim would appear to be insurmountable. (Emphasis supplied). A Treacherous Factual Background We cite several examples of why Alternatives’s recitation of the facts must be approached with extreme wariness.

In its ⁴³⁵ First Amended Complaint, Alternatives alleged 1) that it had prepared “a proposal” and 2) that Ms. Russo “gave the go-ahead for its implementation.” It submitted with its complaint a five-page printed “proposal,” which it referred to as “Exhibit 2.” Although Alternatives, in its various arguments, regularly referred to this “Exhibit 2” for the details of the alleged “proposal” made by it to the school system, there is not the slightest indication 1) as to when this “proposal” was ever written or 2) that it was ever submitted to or read by anyone. There is nothing in the depositions or the affidavits of either Ms. Russo or Dr. Morgan to suggest that either of them ever had this five-page document submitted to them. In neither his deposition nor his affidavit did Dr. Berger suggest that he ever submitted such a document either to Ms. Russo or to Dr. Morgan. From everything that we can discern, “Exhibit 2,” as evidence for the content of the “proposal” made by Dr. Berger to the school authorities, has no basis for being referred to in brief or argument.

The Complaint filed by Alternatives is rife with such bald allegations for which we can find no support in any of the depositions, documents, or affidavits. Although Alternatives was the initiating party for its Drop-Back-In Program at all times, the Complaint has disingenuously “flipped” the use of active and passive voices, as it refers to the Baltimore City Public School System as having “made an offer” and Alternatives as having merely “accepted the offer by initiating the Drop Back In Program.” Although school authorities may have, at the request of Alternatives, given Alternatives the names of drop-outs, there is no indication that “prospective students were referred to the program by various officials of BCPSS” or that school authorities provided Alternatives with “staff liaisons to help with student recruitment.” Nor do we find any evidentiary support for the allegation that Alternatives “was assured by officials of BCPSS that Board’s approval was a mere formality, and that the Drop Back In Program should proceed.” ⁴³⁶ At the hearing on the Board’s Motion for Summary Judgment, Judge Allison was insistent, as are we, as to precisely what the evidence would be to support so bold an allegation. THE COURT: Mr. Cohen, in paragraph 37 of your amended complaint, you say that the plaintiff expressed concern that its existing contract for providing a dropout prevention program had not been formally modified to include the drop back in program and that the Board had not approved a new contract specifically authorizing the drop back in program. However, when these concerns were raised, Russo and her designees made representations to AU that the Board’s approval was a mere formality and that the drop back in program should proceed.

Do you have evidence of that? (Emphasis supplied). After counsel referred to Dr. Berger’s and Dr. Morgan’s depositions, Judge Allison bore in. THE COURT: All right.

I’m going to take you back to that paragraph 37. I got distracted. You responded to my question by saying that both Doctor Berger and Doctor Morgan testified as to the allegation here that statements were made that the Board’s approval was a mere formality. Can you tell me exactly where Doctor Berger testifies to that and where Doctor Morgan testifies to that?

(Emphasis supplied). After some equivocation, counsel for Alternatives backed down, “I apologize if I misspoke.” Alternatives claimed that it “recruited and provided educational services for 67 students at Southern High School from September 25, 2000 to December 1, 2000, and at Our Lady of Good Counsel Church School from December 4, 2000 to May 25, 2001.” It alleged, without proffering any supporting evidence, that its educational efforts had caused the Baltimore City School System to receive from the State of Maryland the sum of $284,750. Alternatives alleged, as the modality for that financial benefit to the School System, that [d]uring the eight months that AU educated students at the Baltimore Transitional Learning Academy, BCPSS submit ⁴³⁷ ted to the State of Maryland enrollment figures reflecting the number of students there in attendance and received per pupil allocations for these retrieved students. AU did not receive any part of these per pupil allocations, nor was AU otherwise compensated for retrieving and educating these at risk students who, but for AU’s efforts, would not have returned to school.

There was no evidence proffered to suggest, however, 1) how many, if any, students who had dropped out re-enrolled in school; 2) what arrangement, if any, existed between the State and the City for payment for such “retrievals;” or 8) what, if any, monies were ever paid by the State to the Baltimore City School System. These are simply unsupported allegations. Although cunningly clever in its phraseology, the First Amended Complaint was treacherously misleading in terms of which party actually took the initiative. It may have been “soon apparent” to Dr. Berger that Alternatives’s “technique” could be expanded into a bigger and more lucrative contract, but Paragraph 6 of the Complaint presented an unrealistic mirror image of who proposed and who, at most, responded.

It was soon apparent to BCPSS that AU’s techniques for keeping at risk students from dropping out of school could also be successfully employed to entice back to school students who had already dropped out. Discussions ensued between AU and officials of BCPSS, including Dr. Betty Morgan, BCPSS’s Chief Academic Officer, to expand the program, to high school dropouts. A proposal was prepared and, shortly after her arrival in Baltimore, Russo gave the go-ahead for its implementation. A copy of the proposal is attached and incorporated herein as Exhibit 2.

(Emphasis supplied). That entire paragraph was deceptive in the extreme. The proposal now in issue was a new and different program, three and one-half times as expensive as the Board-approved Dropout Prevention Program. It was not a mere proposal “to expand the [preexisting] the program.” The last two sentences of the paragraph, in combination, state a proposition ⁴³⁸ that is ingeniously misleading.

The last sentence unequivocally pins down “the proposal” as being the five-page document, of unknown provenance, that appears in the appellant’s pleadings as “Exhibit 2.” The immediately preceding sentence sends the unmistakable message that that five-page document, which Ms. Russo never saw or even had described to her, had actually been reviewed and expressly approved by her. Within two sentences, the objective referent of the word “proposal” shifted dramatically, without a hint of the shift being given to the unwary reader, the unwary trial judge, or the unwary appellate court. Neither we nor the trial judge should be required to negotiate such a linguistic minefield. The point is that even as we set out the narrative backdrop for Judge Allison’s granting of summary judgment, this pattern by Alternatives of jerry-building a case with the aid of smoke and mirrors inevitably colors our appraisal.

Every arguable factual inference is being stretched to, if not beyond, its limits, and then strained inferences are piled on top of strained inferences. Our “feel” for the case is not, of course, legally dispositive. Nevertheless, with respect to issues that are right on the cusp, it might, subliminally, influence the tilt. Dr. Berger, Ms. Russo, and Dr. Morgan Alternatives’s case with respect to quantum meruit and unjust enrichment depends 1) upon Dr. Berger’s interactions with both Ms. Russo and Dr. Morgan; 2) upon their alleged representations to him; and 3) upon his alleged reliance thereon.

The case against the Board is essentially based upon the proposition that Ms. Russo, the Board’s Chief Executive Officer, reviewed the Drop-Back-In proposal and then gave the “go-ahead” for its implementation. Critically heavy weight is being placed on an exceedingly fragile predicate. A. The First Meeting of Dr. Berger with Ms. Russo Was a Nullity Dr. Berger and Ms. Russo only met with each other, or even so much as talked with each other, on two very brief occasions. The first such occasion was a 15-minute courtesy call by Dr. ⁴³⁹ Berger shortly after Ms. Russo first arrived in Baltimore as the Board’s newly appointed Chief Executive Officer.

That courtesy call, on June 28, 2000, actually took place before Ms. Russo officially assumed office. Dr. Berger, in his deposition, recalled: A. I don’t believe Ms. Russo was actually in office. Q. When do you believe she took office? A. I believe August l.[ 2 ] Q. So your first meeting with Ms. Russo took place before she was the chief executive officer?

A. I believe that’s right. Dr. Berger described the purpose of his meeting with Ms. Russo. Q. What was the purpose of the meeting? A. To meet her, welcome her to Maryland, and tell her what AU was doing and what we would continue to do.

Q. What did you tell her? A. About the politics of Maryland and about the program. (Emphasis supplied). Dr. Berger characterized Ms. Russo’s responses as nothing more than diplomatically pleasant.

Q. What did Ms. Russo say to you? A. Sounds good to her, what every superintendent says. A. I believe she just said, sounds like these are good programs. It was a very general conversation.

Certainly at that point she was not giving us any commitment. She said “sounds interesting to me; work with Dr. Morgan.” Q. How long did the meeting last? ⁴⁴⁰ A. About 15 minutes. (Emphasis supplied). Ms. Russo similarly described the general nature of that meeting with Dr. Berger.

A. First of all, it was a get to know each other. I was new in town. He told me that he had a program at Southern with the Board, a dropout prevention. It was just general, you know, conversation about what he would like to do in the future.

And my response was, “Delightful getting to know you. ” I’m only here four weeks, and, you know, I’m sure we will be discussing this with the staff. Of course, I did say to him I was always interested in dropout prevention. (Emphasis supplied). Ms. Russo confirmed that she was not yet making decisions about anything.

I was only there four weeks. I wouldn’t have been making decisions that early. As I said, it was a getting-to-know-you kind of thing. He told me a lot about his history in Baltimore County.

Ms. Russo thought that the conversation touched the subject of the already existing Drop Out Prevention Program, but she made no mention of a new Drop-Back-In program. A. In conversation, I’m sure he mentioned it. To be honest with you, it was a whirlwind, my first month. I don’t remember specifically.

Q. You don’t have any specific recollection about those programs? A. No. We talked about dropout in general. And, of course, he mentioned that he was at Southern. Q. He mentioned he had a program already at Southern?

A. Yes. He mentioned that he had a program, but I don’t remember the specifics of the conversation. Ms. Russo was simply generally upbeat about the subject of dropout prevention. ⁴⁴¹ And I, basically, like I said, I’m interested in dropout prevention. So from my perspective, I would tell anybody the same thing, I’m always interested in pursuing those kinds of ideas to see if they are worthy.

It was on that note and it was that kind of conversation. (Emphasis supplied). In June of 2000, moreover, Dr. Berger was fully aware that Alternatives’s Drop-Back-In Program needed nothing less than the official approval of the Board. Q. Is it your testimony that in June of 2000 you knew you needed Board approval for the Drop-Back-In Program?

A. Sure. (Emphasis supplied). It is transparently clear that that first meeting between Dr. Berger and Ms. Russo provides no factual basis for any obligation by the Board to Alternatives, even assuming that Ms. Russo had the authority to bind the Board. B. The Second “Meeting” With Ms. Russo Was Both Negligible and Vague Even assuming an authority in Ms. Russo to bind the Board to the expenditure of public funds in excess of $15,000, Alternatives’s case as to the exercise of that authority consists of two words ostensibly uttered by her as she looked in briefly on a meeting that Dr. Berger was having with Dr. Morgan and several others.

Dr. Berger characterized his “second meeting” with Ms. Russo. Q. When was your second meeting with her? A. It was not actually with her per se. He testified that Dr. Morgan “had convened a group to decide what to do about how to continue this Southern [High School] program.” This possible extension of the existing Drop Out Preventive Program, of course, is not the subject matter of the present case.

Dr. Berger, however, then slips in the subject matter of the present case by characterizing the ⁴⁴² meeting as one called for the dual purpose of deciding “how to continue” the existing Drop Out Prevention Program and how to “morph it into this Drop-Back-In.” Persistently, Dr. Berger refers to the distinct Drop-Back-In proposal, notwithstanding its quarter of a million dollar price tag, not as a separate contractual undertaking but as a mere modification of an existing program, as something that the existing program might “morph” into. The new program was not only different in character from the preexisting program, but, in terms of cost, the “morphed” product was over three times bigger than the “pre-morph” original. It is a classic instance of getting the nose of the camel under the tent and then casually discussing the entire camel as if everyone took its presence in the tent for granted. Dr. Berger narrated how Dr. Morgan called Ms. Russo briefly into the meeting, so briefly that she did not even take a seat.

Q. Can we call this the second meeting? A. The second meeting, and we’re trying to finalize this. Q. Finalize what? A. Morph in the Southern program and the Drop-Back-In.

And Dr. Morgan says, “I’m nervous about doing this all by my myself.” So she goes and gets Ms. Russo. Ms. Russo comes in, and I remember this like it was yesterday. Ms. Russo was standing there. Dr. Morgan explains the program to her, and she says, “I already said when I met with Stuart that it sounded good to me; do it. ” No question; that’s what happened.

Q. What did you understand, “Do it” to mean? A. Implement the program. (Emphasis supplied). Although she had, according to Dr. Berger’s interpretation of what “Do it” meant, given her official approval for the implementation of a totally new, $250,000 project, without Board approval, Ms. Russo herself had no recollection whatsoever of the incident. ⁴⁴³ Q. Do you recall a meeting in August of 2000 at the offices of the school system in which Betty Morgan, Doctor Berger, and other members of the school system were present?

A. No, I really don’t. I don’t know if I was there or not. Q. Do you recall Doctor Morgan coming out to get you when Doctor Berger was there in a meeting and you coming into a conference room? A. She might have, but I don’t remember.

Q. You have no recollection of that meeting ? A. No, I really don’t. (Emphasis supplied). Even accepting Dr. Berger’s version of that second “meeting,” as we must on summary judgment review, even that version does not indicate whether “the program” that Dr. Morgan “explained” to Ms. Russo was the preexisting Drop Out Prevention program, the new Drop-Back-In proposal, or a “morphing” of both.

Even assuming that “Do it” meant “Implement the program” and even assuming that the “program” was the new Drop-Back-In proposal, there was still no basis for concluding that “Implement” meant “Put a $250,000 program into full operation on my authority without Board approval” rather than meaning “Go ahead and, following standard procedure, prepare a proposal for formal submission to the Board for its consideration.” Dr. Berger acknowledged that the procedural implications of implementation were never discussed. Q. Did you understand it to mean, “Proceed with the program in the absence of School Board approval”? A. I didn’t think School Board approval at that point— that anybody cared. Q. Did you ever discuss School Board approval with Ms. Russo?

A. Not with Ms. Russo, no. Q. Did you ever discuss the need for a written contract with Ms. Russo? ⁴⁴⁴ A. Absolutely not. (Emphasis supplied). Dr. Berger was fully aware of the Board’s procurement policy and he readily acknowledged that Alternatives “didn’t expect to get paid until [the proposal] was approved by the Board.” Q. Did anyone ever tell you that a contract cannot be paid until it is approved by the Board?

A. I knew that. We didn’t expect to get paid until it was approved by the Board. Q. What was the basis of your expectation? A. To be paid?

Q. Why did you believe you needed to have Board approval to get paid? A. Because I knew it. There was [no] question in my mind, based on my experience in Maryland. There’s no question.

That’s not our argument that we didn’t need the Board’s approval some time. (Emphasis supplied). Alternatives’s case is, in the last analysis, one against the Board. It is based upon the authority of Ms. Russo, actual or apparent, to take action and to obligate the Board to pay for that action.

The premise that Ms. Russo took such an action is based upon the inference that Ms. Russo made representations on which Dr. Berger relied. Dr. Berger acknowledged that the sum total of his interaction with Ms. Russo consisted only of the two “meetings” that we have just discussed. Q. Have we now described every personal conversation you had with Ms. Russo concerning the Drop-Back-In Program? A. Yes.

Q. Have you had any other personal discussions with Ms. Russo about any issue? ⁴⁴⁵ A. I don’t think I’ve ever seen the woman, except for those two times. (Emphasis supplied). C. Dr. Berger and Dr. Morgan Never Discussed Any Contractual Relationship The only substantive discussion that Dr. Berger ever had with respect to his Drop-Back-In proposal was with Dr. Morgan, the Chief Academic Officer. In neither his affidavit nor his deposition did Dr. Berger ever allege that Dr. Morgan ever gave him any kind of approval to go forward with a program that would entitle him to any payment from the Baltimore City School System.

Alternatives, by way of punctiliously careful wording, does not allege that Dr. Morgan, as Chief Academic Officer, ever “approved” the proposal for a Drop-Back-In program on behalf of Ms. Russo, the Chief Executive Officer. The allegation is simply that Dr. Morgan “implemented” the proposal which Ms. Russo had “approved.” The only source of information as to any discussion between Dr. Berger and Dr. Morgan was the October 14, 2002 deposition of Dr. Morgan herself. Dr. Morgan repeatedly stated that Dr. Berger was proposing a volunteered service that would not obligate the School System to pay him anything. What I perceived was that [Ms. Russo] understood, we both understood that Stuart in a sense was bringing a gift to the school system, which I guess in retrospect and hindsight didn’t turn out to be much of a gift.

I think she understood and I understood that no money was to be exchanged and that we were just going to give him space in the high school. And I believed that is what was in her mind. But again, I can’t say what was in her mind. I can only tell you how I perceived it.

(Emphasis supplied). As far as Dr. Morgan was concerned, no contract, with advance approval or retroactive approval, was ever contemplated. ⁴⁴⁶ Q. Was it your understanding that the school board had to approve this contract? A. Well, as far as I was concerned, it wasn’t a contract, because we weren’t paying him any money. I mean, we had tons of people who worked even a year in Washington County and Montgomery County.

We had people in Baltimore City that came in. This is basically almost like you deal with a voluntary kind of service in the school. You don’t generally contract with somebody when no money is being exchanged. My understanding at the time was we were just providing him space and a list of names.

(Emphasis supplied). Dr. Morgan repeated that no approval was required because “no money was being exchanged.” Q. Was it your plan to ask the school board to approve this relationship? A. Oh, no. No, I never saw it as a contract.

That is what I’m trying to tell you. We had various groups over the years that use space in the school system. I’ll give you an example. There was a legal, you know, school safety and security group that was headed up by an attorney that was doing all kinds of safety and security stuff.

His name escapes me right now. They were using a wing of the PDC. There were many groups that used parts of the building or a room in the building and they didn’t have a contract, because no money was being exchanged. (Emphasis supplied).

The implementation provided by Dr. Morgan was minimal. I then asked him what he needed and he said the main thing that he was going to need was a list of students who had dropped out, and of course he needed the space in the school. He would take care of the rest. From Dr. Morgan’s point of view, the School System was under no obligation to pay Alternatives anything. ⁴⁴⁷ Q. Did you discuss this drop back in program with the procurement office?

A. No. Again, I didn’t see any need to do that. Q. Why not? A. Because we were just providing him, the space and a list of names. He absolutely told us that it was going to be at no cost to us.

I remember him saying to me very clearly, this is the best deal for Baltimore City and you’re not taking advantage of it. Because it is going to cost you not one dime, he said, you’ll be able to get kids to drop back in, lessening your dropout rate. All you have to give me is some space and a list of names. (Emphasis supplied).

D. The Tectonic Shift of February 26, 2001 At the very first mention by Dr. Berger to Dr. Morgan that he somehow expected the Board to advance monies to Alternatives, Dr. Morgan brought that unanticipated revelation to the immediate attention of Ms. Russo. Both Ms. Russo and Dr. Morgan promptly made it clear to Dr. Berger that the School System had never committed itself to “pay” Alternatives anything for the Drop Back In program. Dr. Morgan, in her deposition, stated: Again, that seemed like a reasonable deal since supposedly initially it was not going to cost us anything. Stuart then went into the high school and set up shop to try to begin this program.

I’m not sure that it ever really got off the ground, but he then came back to us and said look, I can’t do this unless you front me some money. I went back to Carmen and I said, Stuart says even though I understood and you understood that we weren’t going to pay anything for this, in fact we were going to get money from it because of this 80/20 or 90/10 formula, now he is saying that he needs the money fronted by the school system, but we’ll get it back. Carmen said absolutely not. I went back to Stuart and I said, absolutely not, we can’t do that.

I think that Stuart ⁴⁴⁸ had already begun to mobilize. At the time I think he said that he had hired some people. I said, well, why did you do that? He said, well, because we are going to run this program.

I said, but we never committed any money. I never told you we were going to give you any money. (Emphasis supplied). Both Ms. Russo and Dr. Morgan unequivocally stated to Dr. Berger that he had been given no authority to hire people or to commit the School System to any expense whatsoever.

In her deposition, Dr. Morgan stated: Q. Did you discuss with Ms. Russo the procurement of this contract? A. Never. Only after the fact. Only after Stuart came back and said look, I’ve hired all these people and whatever.

I think both Carmen and I said he had no authority to do that. (Emphasis supplied). By way of a certified letter to Alternatives on February 26, 2001, Ms. Russo, on behalf of the Board, made the Board’s position with respect to the proposed Drop-Back-In program absolutely clear. As you know, the Drop Out Agreement for Southern High School, the Drop Out Agreement for Lake Clifton-Eastern High School, and the proposed Drop In Agreement for a retrieval program are three (3) separate and distinct transactions.

The Drop Out Agreement for Southern High School was approved by the School Board on April 25, 2000. The Drop Out Agreement for Lake Clifton-Eastern High School was approved by the School Board on February 29, 2000. Obviously, the proposed Drop In Agreement for a retrieval program has never been approved by the School Board. After consulting with the BCPSS Office of Legal Counsel, the School Board and the BCPSS would like to clarify its position with respect to all three of these transactions.

For Southern High School, Alternatives Unlimited will not ⁴⁴⁹ receive any additional funding or compensation. In accordance with Paragraph 6 of the Agreement, the total amount of compensation will not exceed $76,207.00. Dr. Elizabeth Morgan, Chief Academic Officer, has no authority to increase the amount of compensation for any BCPSS Agreement. For the Drop In or retrieval program, no Agreement will be presented or approved by the School Board.

If Alternatives Unlimited is still providing this program to students enrolled in the BCPSS, all operations and programs should be terminated immediately. As soon as possible, please forward a detailed summary of the services provided by Alternatives Unlimited in operating a Drop In or retrieval program. Provide the dates and locations that such services were rendered; provide an explanation on how these services were initiated; provide an itemization of the expenses incurred; identify the BCPSS enrolled students, including their home addresses and ages; and provide daily attendance reports and any other supporting documentation. This information should be sent to Mr. Dixon Waxter, Associate Counsel, BCPSS Office of Legal Counsel, Room 208, 200 East North Avenue, Baltimore, Maryland 21202.

The appropriate school system personnel will review this documentation and make a personal recommendation to me regarding the value of such services. Any amount that exceeds $15,000 will require the approval of the School Board. (Emphasis supplied). A follow-up letter, on March 23, to legal counsel for Alternatives from the Office of Legal Counsel of the Baltimore City Public School System stated, in pertinent part: As indicated in Ms. Russo’s letter, dated February 26, 2001, all services of the “Drop In” or “Drop Back In” program provided by Alternatives Unlimited, Inc. should have ⁴⁵⁰ ceased, and terminated as of the date of Mr. Baldwin’s receipt of the letter.

To reiterate, the School Board must approve any contract involving a payment amount equal to or exceeding $15,000. Agency principles cannot and will not be applied to circumvent the long-standing procurement policy of the BCPSS. As a result of the prior interaction of Alternatives Unlimited and the BCPSS, referred to in your letter, Alternatives Unlimited had actual notice of this procurement policy and the School Board’s absolute and sole authority to enter into and commit the BCPSS to contracts of $15,000 or more. (Emphasis supplied).

In a letter of April 17, counsel for the Board reiterated to counsel for Alternatives: After consulting with Ms. Russo, the position of the New Baltimore City Board of School Commissioners (“School Board”) and the Baltimore City Public School System (“BCPSS”) has not changed. The BCPSS has no interest in continuing the “Drop In” program with Alternatives Unlimited, Inc. for this academic year or the next academic year. (Emphasis supplied). In a final letter to counsel for Alternatives on May 9, counsel for the Board again made clear the Board’s practice.

These Drop In services were never authorized and never approved by the School Board. However, the School Board is prepared to evaluate the services rendered and the value of such services. Again, any amount exceeding $15,000 would require the approval of the School Board. (Emphasis supplied).

Quantum Meruit And/Or Unjust Enrichment: One Claim or Two? What then, at the summary judgment stage and on the basis of the undisputed evidence, was the viability of Alterna ⁴⁵¹ tives’s counts charging 1) quantum meruit and 2) unjust enrichment, the two counts against the Board that had survived earlier dismissal at the hands of Judge Glynn? We will, for the reasons just discussed, assess that viability in the more limited time frame of the actions of the parties prior to February 26, 2001. Before making even that truncated assessment, however, we need to situate our inquiry on an identifiable legal grid.

With quantum meruit and unjust enrichment, are we, at least in this case, really addressing two separate causes of action or simply two ways of labeling the same cause of action? Are these, perhaps, only two ways of measuring recovery for a single cause of action? Are quantum meruit and unjust enrichment claims sounding in contract or in tort or in something, more amorphous, in between? Are we talking about remedies that once would have been considered equitable remedies or remedies at law?

Does it make any difference? Although there are a lot of legal arguments floating about in the surrounding waters, we will not begin to plot our course until our legal longitude and legal latitude have been more firmly and comfortably established. The ultimate question, of course, will be whether these two remaining counts were not just as surely foreclosed by the rationale of Gontrum v. Baltimore, 182 Md. 370 , 35 A.2d 128 (1943), as were the other counts earlier dismissed by Judge Glynn on the basis of Gontrum . Judge Allison ruled unequivocally that those two counts could not survive the foreclosing effect of Gontrum .

With respect to counts five and six, quantum meruit and unjust enrichment as to the Board, this is perhaps the toughest question because if the defendant were a private party, this court would not be granting summary judgment on these two counts. However, the defendant is not a private party, and it’s the finding of this court that these counts cannot survive the Court of Appeals’ analysis in Gontrum v. Baltimore, 182 Md. 370 , 35 A.2d 128 (1943). ⁴⁵² Employees through words or deeds don’t make enforceable contracts for the Board. Not only does the law impute that knowledge to the plaintiff, but Doctor Berger here, acting for the plaintiff, acknowledged he knew the rule. And even if he hadn’t acknowledged it, his course of conduct with respect to three prior contracts with the school system would have been evidence of actual knowledge on his part in any event.

So for this reason, the court finds that summary judgment on counts five and six as to the Board is appropriate. (Emphasis supplied). The Third World of Restitution As we seek to fix our legal latitude and longitude, we note that it was in Mass Transit Administration v. Granite Construction Co., 57 Md.App. 766, 774 , 471 A.2d 1121 (1984), that this Court, speaking through Judge Bloom, first used the term “the restitutionary remedies.” That is the sea into which we shall be sailing. The conceptualization of restitution as an autonomous subject of legal analysis, as something overlapping the edges of both contract and tort but also filling some empty space between the two, is a relatively recent phenomenon.

In I George E. Palmer, The Law of Restitution (1978), pp. 1-2, Professor Palmer discusses the subject’s recent provenance. It has been traditional to regard tort and contract as the two principal sources of civil liability at common law, although liability arising out of a fiduciary relationship has developed largely outside these two great categories. There is another category that must be separated from all of these; this is liability based in unjust enrichment. In particularized form this has been a part of our law from an early time, but it has been slow to emerge as a general theory.

In present American law, however, the idea of unjust enrichment has been generally accepted and widely applied. Restitution based upon unjust enrichment cuts across many branches of the law, including contract, tort, and ⁴⁵³ fiduciary relationship, but it also occupies much territory that is its sole preserve. (Emphasis supplied). Palmer acknowledges, p. 2 n. 3, the trailblazing impact of the Restatement of Restitution in furthering the recognition of restitution as an autonomous subject of legal analysis.

The most important modern contribution to the organization and development of American law is the Restatement of Restitution (1937). 3 See also Dawson, Unjust Enrichment (1951), the “outstanding contribution of a more recent time.” Id. Saul Levmore, “Explaining Restitution,” 71 Vir. L.Rev. 65, 67 (1985), also describes how restitution has come to fill the borderland between contract and tort. Restitution occupies the crucial ground between its much-studied neighbors, tort and contract.

Restitution deals with nonbargained benefits; tort law with nonbargained harms; contract law with bargained benefits and harms. Our conceptualization of restitutionary law is nonetheless still in a state of flux. Much geriatric language and many now creaking concepts still clutter the caselaw. The very presence of a quantum meruit count in this case, as something ostensibly separate from an unjust enrichment count, may represent nothing more than the reluctance to throw off obsolete linguistic shackles. 1 Dan B. Dobbs, Law of Remedies (2d ed.1993), § 4.1(3) “Introducing the Procedural and Terminological Side of Restitution,” p. 564, well describes the recent conceptual and linguistic evolution.

At one time the legal profession did not understand restitution to be a general legal topic at all. What we now call restitution was pursued through a whole host of actions, each of which was adapted to a single factual situation. ⁴⁵⁴ These actions were often thought of as “remedies” rather than theories for a claim. They went under a splendid variety of names like Money Had and Received, Money Paid, Money Lent, Quantum Meruit and many others. Earlier lawyers thought of these narrow actions as essentially unrelated.

These same kinds of claims are now perceived to be merely subsets of restitution. The modem view is that unjust enrichment is a unifying principle for all such cases and restitution is the award made to vindicate that principle. Restitution today is applied both in cases that used to be brought at law and those that used to be brought in equity. The unity of the subject matter is now reflected in part by Professor Palmer’s four-volume treatise of classic dimensions and by the collection of many restitution cases under the topic of Implied and Constructive Contracts in the West Digests.

Even so, the history of restitution as a collection of insular and unrelated dooms or procedures is also still apparent in the diverse locutions of the courts. 3 (Emphasis supplied). The Restitutionary Remedies As Designed To Prevent Unjust Enrichment When we enter the world of restitutionary remedies, we have arrived in the land of unjust enrichment. The restitutionary remedies and unjust enrichment are simply flip sides of the same coin. The generative purpose of a restitutionary remedy is the prevention of unjust enrichment.

As Judge Salmon observed in Mogavero v. Silverstein, 142 Md. App. 259, 276 , 790 A.2d 43 (2002), “Restitution ... is referred to as an action for unjust enrichment.” In Berry and Gould v. Berry, 360 Md. 142, 151 , 757 A.2d 108 (2000), the Court of Appeals stated the general principle of unjust enrichment to be: ⁴⁵⁵ A person who receives a benefit by reason of an infringement of another person’s interest, or of loss suffered by the other, owes restitution to him in the manner and amount necessary to prevent unjust enrichment. (Emphasis supplied). The core principle which Restatement of Restitution takes as its point of departure is set forth in its opening section: § 1. UNJUST ENRICHMENT.

A person who has been unjustly enriched at the expense of another is required to make restitution to the other. Restatement, p. 12. The symbiotic relationship between restitution and unjust enrichment is also stressed in 1 Dan B. Dobbs, Law of Remedies (2d ed.1993), § 4.1 “Restitution and Unjust Enrichment,” pp. 551-52: Restitution is a simple word but a difficult subject, partly because restitutionary ideas appear in many guises. In spite of their diversity, restitution claims are hound by a major unifying thread.

Their purpose is to prevent the defendant’s unjust enrichment by recapturing the gains the defendant secured in a transaction. (Emphasis supplied). Dobbs goes on, p. 557: The fundamental substantive basis for restitution is that the defendant has been unjustly enriched by receiving something, tangible or intangible, that properly belongs to the plaintiff. Restitution rectifies unjust enrichment by forcing restoration to the plaintiff.

(Emphasis supplied). In explaining the law’s reluctance to permit instances of unjust enrichment, John P. Dawson, “The Self-Serving Intermeddler,” 87 Ham L.Rev. 1409, 1411 (1974), traces back to the Book of Matthew the belief that men “should not reap where they have not sown.” For analytic purposes, Dobbs, pp. 558-62, divides unjust enrichment cases into four general categories, one of which concerns us here. If, arguendo, the Board in this case was ⁴⁵⁶ the beneficiary of any unjust enrichment, it clearly would have been of the type that Dobbs describes, pp. 559-60, as “Group 4 Cases,” cases in which the benefit to the Board came in the form of “services without misconduct.” Benefits to defendant from money or services without misconduct — Mistakes and other disruptions in contracting. Not all unjust enrichment turns on tort, on tangible property, or on contract breach.

Sometimes a plaintiff confers a benefit upon a defendant wholly apart from any breach of substantive duty. Parties attempting to enter a contract may be mistaken in their underlying assumptions about the subject matter of that contract, or they may be faced with new conditions they never intended to contract about. When the mistakes or new conditions become apparent, the best solution may be to call off the deal because it is not really the deal the parties attempted to make---- Benefits conferred without mistake or contract. Cases of attempted contract often illustrate the Group U category, but contract is not an essential ingredient.

What is essential is that the defendant receives a benefit without fault or breach of duty on his part, yet is at least arguably under a duty to give up that benefit on the ground that othe'twise he will be unjustly enriched. (Emphasis supplied). Equity: A False Light on the Shore Judge Allison granted summary judgment against Alternatives on the counts charging quantum meruit and unjust enrichment on the ground that the foreclosing effect of Gontrum applied as surely to them as to the counts based squarely on contract. Alternatives now argues that Judge Allison was in error in “not distinguishing between [its] legal and equitable claims.” It argues that she “improperly applied the ruling in Gontrum ... to causes of action which sound in equity.” Alternatives asserts, quite accurately but unremarkably, that “whether the plaintiff might prevail under equitable remedies such as quantum meruit and unjust enrichment is never addressed in Gontrum.” Indeed, it was not; those counts ⁴⁵⁷ were simply not before the Court in that case.

All that means, of course, is that Gontrum squarely answered neither “Yes” nor “No” to the question before us. A. A Flawed Minor Premise: Quantum Meruit and Unjust Enrichment Are Not Equitable Remedies What Alternatives seeks to do, by invoking the mantra of equity, is to beguile us by a false light on the shore. Quite aside from the distinct question of whether the foreclosing effect of Gontrum applies to equitable remedies (the major premise), Alternatives has abjectly failed to establish that quantum meruit and unjust enrichment, at least under the circumstances of this case, are actually equitable remedies (the necessary minor premise). It baldly asserts the proposition, but it offers no recognized legal support for it. 4 The snare in which Alternatives would entrap us is a semantic one.

Its argument is that if ever the caselaw uses the adjective “equitable” (or such synonyms as “fair” or “just”), it necessarily is mandating that the form of relief shall be an “equitable remedy” as traditionally developed by the courts of equity and with all of the procedural “rights, honors, and privileges thereto appertaining.” “Equity,” however, is too protean a word to be thus pinned down. The word “equity” (with its full grammatical paradigm) sometimes has a broadly diluted descriptive usage that ranges far beyond its more limited employment as a jurisdictional term of art. Dobbs, § 2.1(3) “Meanings of Equity,” pp. 65-66, discusses the various definitions of the adjective “equitable” and the shifting legal significance of those respective definitions. In the broadest sense, almost every legal principle is based on its ⁴⁵⁸ being “equitable” in the sense that the law, whenever it reasonably can, seeks a result that is fair and just.

Equitable in the sense of fair, moral, or just. When the term “equitable” is used only to describe the moral basis of a claim or defense, the conclusion that the claim is equitable has no necessary legal effect on the remedy or on the procedure. Take this sentence: “The defendant stole the plaintiffs watch, worth only $10, but the defendant sold it for $100; it is only just and equitable that the defendant pay the plaintiff the $100. Good conscience demands it.” In these sentences, the writer is stating a substantive ground for relief.

He is not addressing the remedy. In fact, in such cases as those described in this sentence, the plaintiff can simply sue for the money ($100) and recover it “at law,” with a jury trial if he wishes. It is not wrong to say that such a claim is “equitable,” but it is equitable only in a very limited way: it appeals to “the equities, ” the sense of justice. It does not necessarily involve equity remedies, equitable defenses, or equitable procedures like the non-jury trial.

Id. at 65 (emphasis supplied). When a word says everything, it says nothing. Contrasted with that that sweeping and essentially cliched meaning of “equitable” is “equitable” as it more carefully distinguishes an “equitable remedy” from a “legal remedy,” each with its own attendant procedures and consequences. Equitable in the sense that an equitable remedy is sought.

In contrast to the substantive uses of the term “equitable,” courts and lawyers often use the term much more precisely to mean that the plaintiff has sought an equitable remedy, usually one involving coercive elements. When that is the case, there are two major legal effects of concluding that the case, claim or remedy is equitable. First, when the plaintiff asserts an equitable remedy, equitable defenses can be invoked even if they could not be invoked against a “legal” claim. More broadly, the judge ⁴⁵⁹ will feel free to exercise discretion in denying the remedy and, if she grants it, in shaping the remedy.

Second, subject to an important exception, if the plaintiff claims an equitable remedy, then neither party has a right to a jury trial. If the plaintiff seeks only damages from the defendant’s trespass, the case goes to a jury on demand; if the plaintiff seeks only an injunction to prevent future trespasses, the case is tried to the judge sitting as Chancellor and without a jury. Id. at 65-66 (emphasis supplied). Dobbs, p. 65, gives a precise thumbnail definition of an “equitable remedy”: The term equitable, when applied to a remedy, usually has a precise meaning.

It means a remedy based on a personal order, commanding specified conduct of the defendant, such as an injunction, an order for specific performance, or a constructive trust or similar remedy coupled with an in personam order. (Emphasis supplied). Depending entirely on the type of relief sought, a restitutionary claim based on unjust enrichment may be “purely legal” or “purely equitable.” Remedially and historically speaking, however, restitution might be either a purely legal claim or a purely equitable claim. Restitution claims for money are usually claims “at law. ” So are restitution claims for replevin and ejectment.

On the other hand, restitution claims that may require coercive intervention or some judicial action that is historically “equitable,” may be regarded as equitable claims. For example, if the defendant fraudulently obtained title to Blackacre from the plaintiff, the plaintiff might ask the court to declare a “constructive trust,” the upshot of which would be to order the defendant to reconvey Blackacre to the plaintiff. Such a claim is restitutionary and also historically regarded as equitable. ⁴⁶⁰ If the same plaintiff merely asked for the money value of Blackacre or the sums gained by the defendant in selling that famous property, then the claim could still be restitutionary but it would now be a claim “at law. ” Id. at 556 (emphasis supplied). In Mass Transit Administration v. Granite Construction Co., 57 Md.App. at 774 , 471 A.2d 1121 , Judge Bloom highlighted the distinction between those restitutionary remedies that are “in equity” and those others that are “at law.” Restitution “did not spring full-blown from the temple of Blackstone.

It emerged very slowly from a host of different sources, some in law and some in equity.” Dobbs, supra, § 4.1; see also 1 Palmer, The Law of Restitution, § 1.1 (1978). In equity, the principal restitutionary remedies are the constructive trust, the equitable lien, subrogation, and the accounting for profits. At law, the chief restitutionary remedy is quasi-contract. (Emphasis supplied). “Equitable remedies” is a collective term of art for a category of remedies, historically developed in courts of equity, that are 1) in personam in character and 2) coercive in nature.

Dobbs, pp. 564-65, describes the general character of the category. Restitution claims are initiated in the same way the other claims are initiated, by a complaint, counterclaim, or set-off. Once the claim is initiated, many diverse terms and procedures may be invoked to enforce a restitutionary regime. Some of them derive from the old separate equity courts and are still distinguished by in personam orders.

Such procedures may operate to provide restitution in specie, that is, a return of a particular item of property such as Black-acre. The most notable equitable procedures to enforce restitution are the constructive trust, the equitable lien, and subrogation. These procedures give the plaintiff restitution by giving the plaintiff title to, or a security interest in ⁴⁶¹ particular property; or, in the case of subrogation, by giving the plaintiff the rights formerly held by another person. (Emphasis supplied).

In this case, the restitution sought by Alternatives was a money judgment. The quantum meruit claim is based, presumably, on an alleged implied-in-fact contract. The unjust enrichment claim is based on a quasi-contract or an implied-in-law contract. Although both may be “equitable” claims in the bright and celestial sense that they seek fairness and justice,* *** 5 both invoke remedies that are universally recognized as legal remedies, not equitable remedies.

In Mass Transit Administration v. Granite Construction Co., 57 Md.App. at 775 , 471 A.2d 1121 , Judge Bloom was not beguiled by the false light on the shore, as he meticulously distinguished between an action based on quasi-contract, an action at law, and a distinctly different action in equity. Although quasi-contract is often described as “equitable” and indeed recovery in restitution is based upon notions of justice and fairness, “this refers merely to the way in which a case should be approached, since it is clear that the action is at law and the relief given is a simple money judgment. ” 3 (Emphasis supplied). Restitution in the form of a money judgment based on a claim of quantum meruit is unquestionably a remedy at law. ⁴⁶² Restitution can be addressed by reference to the old forms of action in which restitutionary aims were pursued in the law courts. A judge can say that the plaintiff is entitled to recover in assumpsit as a reference to a form of action no longer in existence but one that might once have been used for restitutionary recoveries.

Special forms of assumpsit can also refer to restitution, the most familiar of these being quantum meruit. These and parallel terms refer to one form of restitution or one process of getting it. They are not something different from restitution. Dobbs at 557 (emphasis supplied).

By the same token, restitution in the form of a money judgment for unjust enrichment based on quasi-contract is equally clearly a remedy at law. Restitution can also be addressed by reference to an older theory of relief (as distinct from the older forms of action). The older ways of speaking about restitutionary claims in law courts was to say that the law implied a contract between the parties although no contract existed. This in turn was called quasi-contract.

So a judge who says the plaintiff has an implied in law contract claim could also say that the plaintiff has a quasi-contract claim or that the plaintiff has a restitution claim (for money). Dobbs at 557 (emphasis supplied). By contrast, a restitutionary remedy that is coercive in nature and in personam in focus is an equitable remedy. No such remedy, it should be noted, has been sought by Alternatives in this case.

Restitution can also be addressed by reference to the theory and form of the remedy used in equity. The terms constructive trust, equitable lien, accounting for profits and subrogation are terms that come to us from the equity side of the court. They reflect different measures or forms of restitution but they are all restitutionary. Dobbs at 557 (emphasis supplied).

As the legally significant terms of art are understood, Alternatives in this case did not seek “equitable remedies” as ⁴⁶³ opposed to “legal remedies,” and Gontrum may not be distinguished on that basis. B. A Flawed Major Premise: Equitable Remedies Are Not Exempted From the Coverage of Gontrum Just as Alternatives has failed to establish its minor premise, to wit, that quantum meruit and unjust enrichment are “equitable remedies” in the jurisdictional sense of that term of art, so too has it failed to establish its major premise, to wit, that the status of being an “equitable remedy” would exempt a claim from the otherwise foreclosing effect of Gontrum . Equitable estoppel, for instance, is an “equitable remedy.” J.F. Johnson Lumber Co. v. Magruder, 218 Md. 440, 447-48 , 147 A.2d 208 (1958) (“The whole doctrine of equitable estoppel is a creature of equity and governed by equitable principles.”); Inlet Associates v. Assateague House, 313 Md. 413, 434-35 , 545 A.2d 1296 (1988) (“Our cases have continually applied the definition of equitable estoppel set forth in 3 J. Pomeroy, Equity Jurisprudence, § 804 (5th ed.1941).”). In Gontrum, 182 Md. at 377-78 , 35 A.2d 128 , the plaintiff had contended that the City is now estopped from asserting that the promises of its agents were beyond the scope of their power and authority, because it is now enjoying the benefits accruing to it under the sewer right of way agreement, without having compensated the appellants therefor.

(Emphasis supplied). Gontrum, 182 Md. at 378 , 35 A.2d 128 , nonetheless held emphatically that, under the circumstances of that case, the plaintiff could not assert equitable estoppel to escape the otherwise foreclosing effect of the Gontrum doctrine. Generally, no estoppel as applied to a municipal corporation can grow out of dealings with public officers of limited authority where such authority has been exceeded, or where the acts of its officers and agents were unauthorized or wrongful. No representation, statement, promises or acts of ratification by officers of a public corporation can operate ⁴⁶⁴ to estop it to assert the invalidity of a contract where such officers are without power to enter into such a contract on behalf of the corporation.

It is our conclusion that the doctrine of estoppel does not apply and that the City is under no obligation to compensate the appellants for the sewer right of way now used by it. (Emphasis supplied). In ARA Health Services v. Department of Public Safety, 344 Md. 85, 96 , 685 A.2d 435 (1996), the Court of Appeals also held that where a governmental entity is otherwise shielded from financial liability because of unauthorized commitments by its agents or employees, equitable estoppel may not be invoked against the governmental entity. Finally, [ARA] argues that the Department should nevertheless be estopped, on equitable grounds, from denying the validity of the contract modification.

Ordinarily, the doctrine of estoppel does not apply against the State. (Emphasis supplied). In Inlet Associates v. Assateague House, Chief Judge Robert C. Murphy, after reviewing thoroughly the circumstances under which equitable estoppel may and may not be invoked against a municipality, 313 Md. at 434-38 , 545 A.2d 1296 , and after citing Gontrum as authority, id. at 437 , 545 A.2d 1296 , held squarely: In other words, the doctrine of equitable estoppel cannot be invoked to defeat a municipality’s required adherence to the provisions of its charter simply because of reliance upon erroneous advice given by an official in excess of his authority. 313 Md. at 437 , 545 A.2d 1296 (emphasis supplied). See also City of Baltimore v. Crane, 277 Md. 198, 206 , 352 A.2d 786 (1976); City of Hagerstoum v. Long Meadow Shopping Center, 264 Md. 481, 494-95 , 287 A.2d 242 (1972); Lipsitz v. Par, 164 Md. 222, 227-28 , 164 A. 743 (1933). ⁴⁶⁵ Constructive fraud is also a cause of action calling for an “equitable remedy.” Tyler v. Secretary of State, 229 Md. 397, 404-05 , 184 A.2d 101 (1962); Green v. Lombard, 28 Md.App. 1, 12 , 343 A.2d 905 (1975); 3 John M. Pomeroy, Equity Jurisprudence (5th ed.1994), § 922, pp. 625-26.

The plaintiff Gontrum, even more than Alternatives in this case, claimed that his enrichment of the City “was in reliance upon these representations” by the Land Surveyor and the assistant city solicitor. 182 Md. at 374, 35 A.2d 128 . “[Rjelief is sought on the ground that these representations amount to constructive fraud.” Id. The observations of the Court of Appeals, in affirming the pretrial dismissal of the complaint, are equally pertinent to Alternatives’s complaint. [M]ere expressions of opinion about what will occur in the future, do not constitute fraud even though they turn out to be false, at least where they are not made with intent to deceive, and where the parties have equal means of knowledge or the subject is equally open to the investigation of both, and an examination has not been fraudulently prevented. 182 Md. at 374, 35 A.2d 128 . Neither Ms. Russo nor Dr. Morgan made any representations to Dr. Berger that either of them possessed any authority to bind the Board to any expenditure of $15,000 or more. Even if, arguendo, they had, Dr. Berger, by his own acknowledgments, knew full well that that was not the case.

He would have had no basis for relying on such representations even if, for the sake of argument, they had been made. Even in a case of proven unjust enrichment, not based upon an actual contract, express or implied, Maryland’s deliberate policy decision to protect the public treasury from unauthorized expenditures will prevail over the interests of an aggrieved plaintiff. In Mass Transit Administration v. Granite Construction Co., 57 Md.App. 766 , 471 A.2d 1121 (1984), the specific doctrine that protected the governmental entity from the unauthorized entering into a contractual obli ⁴⁶⁶ gation by one of its employees was that of sovereign immunity. In this case the governmental entity is shielded from unauthorized financial obligations by the rule of Gontrum .

The analogy between the two policy shields, however, is a close one, and we find it persuasive. What we said in Mass Transit with respect to sovereign immunity applies in this case with respect to Gontrum . It is a message, however, that Alternatives does not wish to hear. Alternatives’s Misperception Of Gontrum’s Public Policy Pronouncement Permeating Alternatives’s arguments as they appeal, genuinely or disingenuously, to equity is a complete misperception of Gontrum’s basic teaching.

It is as if Alternatives is in psychological denial as to the Gontrum statement of policy that the normal rules governing contractual relationships do not apply when one of the parties is a governmental entity. The appellee in this case is not Ms. Russo. Nor is it Dr. Morgan. The exclusive defendant-appellee is the Baltimore City Board of School Commissioners.

It is from that Board that Alternatives seeks a monetary award. Alternatives, however, continuously and insistently imputes knowledge and responsibility to the Board through the words and actions of Ms. Russo and Dr. Morgan. If this were an ordinary business dispute between private parties, such imputing, of course, would be perfectly appropriate. A corporation may be bound by the words and actions of its agents, especially when they are high ranking executives of the corporation.

As Alternatives assesses the duties and the obligations of the parties, it seeks to place itself and Dr. Berger in one group, the plaintiffs camp, and to assign the Board, Ms. Russo, and Dr. Morgan to the adversary group, the defendant’s camp. It seeks to rely on the apparent, if not the actual, authority of Ms. Russo and/or Dr. Morgan to bind or ⁴⁶⁷ obligate the Board. 6 Once again, such a grouping of the players would be appropriate if this were an ordinary business dispute between private parties. The fundamental teaching of Gontrum , however, is that when one of the parties to the ostensible relationship is a governmental entity, the placement of the players into respective categories is diametrically rearranged. When the expenditure of public funds is involved, the authority to expend such public resources is stingily conferred and rigidly regulated.

In this case, only the Board itself, and not even its highest ranking executives or agents, may authorize any expenditure of $15,000 or more. That is this case’s overarching reality. The basic principle for which Gontrum stands is that the public fisc, and thereby the public itself, is to be protected by stringent procurement procedures not only against outside parties, such as Alternatives, but even against its own agents and employees, such as Ms. Russo and Dr. Morgan. Pursuant to the stern categorization of Gontrum , the Board (representing the public) is placed in one category, all by itself.

Grouped together, perhaps uncomfortably, in the potentially opposing camp are Alternatives, Dr. Berger, Ms. Russo, and Dr. Morgan. Alternatives poses the controlling principle as one of fairness to the plaintiff vis-a-vis the combined behavior of the Board, Ms. Russo, and Dr. Morgan. If the Board were a private corporation, fairness to the plaintiff would, indeed, be a critical, and perhaps controlling, consideration. It is not to demean fairness, however, to point out that in the very ⁴⁶⁸ different public policy world dealt -with by Gontrum , the critical consideration is not fairness, but the financial inviolatability of the Board vis-a-vis the combined behavior of Alternatives, Dr. Berger, Ms. Russo, and Dr. Morgan.

A different set of values is in play. If fairness had been the controlling criterion, the plaintiff Gontrum himself would have prevailed in Gontrum v. Baltimore. The City had been unquestionably enriched at his expense. It took a strip of his property twenty feet in width and three hundred thirty-five feet in length.

It dug trenches and installed sewer lines throughout that strip. Over the course of nine years the City never compensated Gontrum a single penny for the invasive use of his property. Gontrum had mistakenly believed that the City was about to condemn the property but, in making that mistake, Gontrum had relied on assurances made to him by the City Land Surveyor and an assistant city solicitor. The Court of Appeals was adamant that, even though the City “is now enjoying the benefits accruing to it under the sewer right of way agreement, without having compensated [Gontrum] therefore,” 182 Md. at 377-78, 35 A.2d 128 , the City was “under no obligation to compensate [Gontrum] for the sewer right of way now used by it.” 182 Md. at 378, 35 A.2d 128 .

The controlling public policy was clear. A municipal corporation cannot be held liable for the unauthorized acts of its agents although done officii colore, without some corporate act of ratification or adoption; and, from consideration of public policy, it seems more reasonable that an individual should occasionally suffer from the mistakes of public agents or officials, than to adopt a rule, which, through improper combinations and collusion, might be turned to the detriment and injury of the public. 182 Md. at 376, 35 A.2d 128 (emphasis supplied). The protection of the public unhesitatingly “trumped” fairness to the plaintiff. Rigid budgetary and procurement procedures, as explained by Gontrum , protect the public treasury not only from the ⁴⁶⁹ corrupt or collusive actions of its agents, but also from the inadvertent, the ill-advised, and even from the most nobly motivated and well intentioned excesses of its highest executives, if and when they seek to commit funds beyond their authority to commit.

It is a commonplace that visionary and forceful executives frequently believe that the optimum fulfillment of the mission of their state, their city, or their agency demands more funds than a seemingly stingy budgetary process has provided. If unrestrained, they could easily, from the noblest of intentions, drain the public treasury. It is not only to protect public funds from outside parties, such as Alternatives, but also to protect the public fisc from the well motivated enthusiasm of its own executives that strict budgetary and procurement procedures, and supporting cases such as Gontrum , are imposed as a necessary legislative check on the executive branch. As Judge Glynn observed, “the rule in Gontrum is harsh.” There are, however, sound policy reasons for that harshness. “The Forms of the Actions We Have Buried, But They Rule Us From Their Graves” ...

Frederic William Maitland Disposing of a counterattack based on the mantra of “equity,” however, is only the beginning of our analysis. Equity is where we are not. It still remains to be determined precisely where we are. Assumpsit.

Indebitatus assumpsit. The forms of the actions. The common counts. Quantum meruit.

Quantum valebant. Echoes from another world and another time. Despite occasional posing to the contrary, moreover, probably no one has truly mastered all of this arcane lore since the death of John Prentiss Poe. Although the paths of quantum meruit and unjust