Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: January 19, 2015

Shareholder Has Standing to Assert Unjust Enrichment Claim

On January 13, 2015, the First Department issued a decision in Scott v. Pro Management Services Group, LLC, 2015 NY Slip Op. 00318, illustrating the circumstances under which a shareholder has standing to assert a claim for unjust enrichment. It explained:

Plaintiff’s unjust enrichment claim is direct, and not derivative, because plaintiff suffered the alleged harm individually, and he would receive the benefit of any recovery. Indeed, the amended complaint alleges that plaintiff is an 11.1% owner of the defendant holding companies and of the companies’ trademarks, and that all other owners of the holding companies received revenues, licensing fees, royalties and other consideration for using the companies’ trademarks, to plaintiff’s exclusion. As plaintiff’s claim is direct and not derivative, plaintiff was not required to satisfy the pleading requirements set forth in Business Corporation Law ยง 626(c). Further, plaintiff’s allegations that defendants were enriched by their receipt of revenues and other consideration at his expense, and that it is against equity and good conscience to permit them to retain such consideration without adequately compensating him, are sufficient to state a claim for unjust enrichment.

(Internal citations omitted).

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