Commercial Division Blog

Posted: April 25, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Category Corporations

Contract with Corporation Precludes Unjust Enrichment Claim Against Corporation's Principal

On March 11, 2022, in Salesmark Ventures, LLC v. Singh, 2022 NY Slip. Op. 30836, Justice Joel M. Cohen granted defendant’s motion to dismiss a claim of unjust enrichment against the defendant corporation’s principal.  The Court explained:

The quasi-contract claims also fail. SalesMark concedes that it has no unjust enrichment claim against JJHM because of the existence of a contract between the two parties (NYSCEF 17 at 10), but maintains an unjust enrichment claim against Singh. The contract, though, forecloses the claim as to both JJHM and Singh. "[T]he existence of a valid contract governing the subject matter generally precludes recovery in quasi contract for events arising out of the same subject matter" (EBC I v Goldman, Sachs & Co., 5 NY3d 11, 23, 832 N.E.2d 26, 799 N.Y.S.2d 170 [2005]). And because "[p]laintiff acted under contract with defendant [JJHM]," it can "only look to that corporation for compensation" [**5] (Joan Hansen & Co., Inc. v Everlast World's Boxing Headquarters Corp., 296 AD2d 103, 108, 744 N.Y.S.2d 384 [1st Dept 2002] [explaining that "to recover from a particular defendant, a plaintiff must demonstrate that services were performed for the defendant resulting in its unjust enrichment"] [emphasis in original].

The attorneys at Schlam Stone & Dolan frequently litigate unjust enrichment claims.  Please contact the Commercial Division Blog editors at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such claims.