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Current Developments in the Commercial Divisions of the
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Posted: August 6, 2016

Court Explains Limits to Claim for Unjust Enrichment

On July 29, 2016, Justice Scarpulla of the New York County Commercial Division issued a decision in 309 Fifth Owners LLC v. MEPT 309 Fifth Ave. LLC, 2016 NY Slip Op. 31476(U), dismissing claims for breach of contract and unjust enrichment. In dismissing the unjust enrichment claim, the court explained:

To recover on the theory of unjust enrichment, a plaintiff must show that the other party enriched itself at the plaintiffs’ expense and that it is against equity and good conscience to permit the other party to retain what is sought to be recovered. Here, the contract at issue that was negotiated by sophisticated business people represented by counsel, and there is nothing unjust about enforcing it according to its terms. Indeed, it is well settled law that where an express contract governs the subject matter of the plaintiffs claims, it bars a separate cause of action based on unjust enrichment. Unjust enrichment is not a catchall cause of action to be used when others fail, but, rather, it is available only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff.

(Internal quotations and citations omitted) (emphasis added).

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