Commercial Division Blog

Posted: March 4, 2014 / Categories Commercial, Quantum Meruit, Motion to Dismiss; Motion for Judgment on the Pleadings

Unjust Enrichment Claim Viable Even Though Defendant Committed No Wrongful Act Against the Defendant

On February 26, 2014, the Second Department issued a decision in Alan B. Greenfield, M.D., P.C. v. Beach Imaging Holdings, LLC, 2014 NY Slip Op. 01285, reversing the dismissal of an unjust enrichment claim.

In Greenfield, the trial court dismissed the plaintiff's claim for unjust enrichment. The Second Department reversed, ruling that:

The essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered. A plaintiff must show that (1) the other party was enriched, (2) at the plaintiff'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.

Unjust enrichment does not require the performance of any wrongful act by the one enriched. Innocent parties may frequently be unjustly enriched. What is required, generally, is that a party hold property under such circumstances that in equity and good conscience he ought not to retain it.

(Internal quotations and citations omitted) (emphasis added). Finding that the elements had been plead, the claim was allowed to proceed even though the plaintiff did not allege that the defendant committed any wrong directly against it.

Courts often dismiss unjust enrichment claims because they mirror valid breach of contract claims. This decision shows the power of a properly pleaded unjust enrichment claim to reach even innocent actions that have harmed the plaintiff.