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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: May 11, 2019

Unjust Enrichment Claim Dismissed for Failure to Aledge How the Defendant Was Unjustly Enriched

On April 5, 2019, Justice Masley of the New York County Commercial Division issued a decision inĀ Tapestry, Inc. v. Gibb, 2019 NY Slip Op, 31055(U), dismissing an unjust enrichment claim for failure to allege how the defendant was enriched, explaining:

In Count V, Tapestry alleges that Gibb and Tidal were unjustly enriched by their wrongful conduct. Unjust enrichment occurs when one person has obtained money or benefit because of the actions by another person, under such circumstances that, in fairness and good conscience, the benefit should not be retained. To state a claim for unjust enrichment, a plaintiff must allege that: (1) the defendant was enriched, (2) at plaintiff’s expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered. Tapestry alleges that Gibb impermissibly used his Tidal email account to send himself Tapestry’s proprietary footwear plans. There is no allegation that Tidal used the alleged purloined plans. Likewise, Tapestry fails to explain how Tidal benefitted from Gibb’s alleged disclosure to Tapestry customers of his connection to Tidal. The court agrees with Tapestry that evidentiary support is not required at this stage. However, stating that Tidal was unjustly enriched does not make it so. Tapestry must assert some facts, any facts, in support. Therefore, Tapestry fails to state how Tidal was enriched, let alone how it would be unjust.

(Internal citations omitted).

Unjust enrichment is a common claim in commercial litigation. It is used when there was not a contract between the litigants, but the defendant received an unfair benefit at the plaintiff’s expense. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether you have, or are the subject of, a claim for unjust enrichment.

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