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Current Developments in the Commercial Divisions of the
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Posted: October 23, 2015

Unjust Enrichment Claim Dismissed For Lack of Relationship Between Parties

On October 16, 2015, Justice Scarpulla of the New York County Commercial Division issued a decision in Robinson v. Oz Master Fund, Ltd., 2015 NY Slip Op. 31942(U), dismissing a claim for unjust enrichment, explaining:

To maintain an unjust enrichment cause of action, a plaintiff must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.
. . .
Here, there is no dispute that the parties have a contract. Therefore, the unjust enrichment claim is barred by the existence of the Subordination Agreement. While two of the defendants were not signatories of the Subordination Agreement, the unjust enrichment claims are barred against them as well. Oz Financial II and Plainfield Direct IV, the two entities allegedly created to enter into the DIP financing, have too weak a connection to plaintiffs to sustain a claim for unjust enrichment. That is, their only connection to plaintiffs is through entities whose relationship with plaintiffs is governed by contract. Moreover, in the absence of a contractual breach, plaintiffs are asking the court to look at the same facts the bankruptcy court looked at and come to a different conclusion as to the disposition of the IP Sub’s assets. While the courts equitable powers under this cause of action are broad, they are not that broad.

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

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