Chapter 3-4 Unjust Enrichment

JurisdictionUnited States

3-4 Unjust Enrichment

3-4:1 Overview

Unjust enrichment is a cause of action founded in quasi-contract. Founded in equity, unjust enrichment seeks to restore a benefit conferred on an undeserving person. Such a benefit will be restored if the plaintiff proves the defendant obtained it from the plaintiff by means of fraud, duress, undue advantage, or passively obtaining a benefit that it would be unconscionable to retain.

3-4:1.1 Related Causes of Action

Assumpsit, Quantum Meruit, Money had and received, Breach of Contract, Trover, Conversion, Restitution, Constructive Trust

MUST READ CASES

Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671 (Tex. 2000)

Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39 (Tex. 1992)

3-4:2 Elements

(1) The defendant obtains a benefit

• The defendant, rather than a third party, obtains a benefit.178

(2) From the plaintiff179

• The benefit must come from the plaintiff.180
AND

(3) By means of

(a) Fraud

• By means of fraud.181
• It is not enough that the conferral of a benefit is generally unfair or would yield a windfall; rather, there must be some level of wrongdoing.182

(b) Duress183

• It is not enough that the conferral of a benefit is generally unfair or would yield a windfall; rather, there must be some level of wrongdoing.184

(c) Taking an undue advantage185

• An unfair advantage may be the failure of consideration.186
• It is not enough that the conferral of a benefit is generally unfair or would yield a windfall; rather, there must be some level of wrongdoing.187
OR

(d) Passively obtaining a benefit which is unconscionable to retain.188

• One means of passively receiving a benefit is when an oil company mistakenly overpays one royalty owner while underpaying another.189
• This passive receipt is likely the sub-element several cases refer to when they say recovery does not depend upon the defendant's wrongful act.190

3-4:3 Damages and Remedies

3-4:3.1 Restitution

Restitution may be an available remedy.191

3-4:4 Defenses

3-4:4.1 Statute of Limitations

The two-year limitations period applies.192

3-4:4.2 Valid Contract

A valid contract generally precludes recovery under a quasi-contract theory.193

In addition, any adequate legal remedy may preclude recovery.194

A plaintiff may recover under a quasi-contract theory despite the existence of a valid contract when the plaintiff has (1) overpaid on the contract;195 or (2) sued on a construction contract.196

3-4:4.3 Other Defenses, Generally

Other applicable defenses could include:

• Unclean hands;197
• Voluntary payment;198 and
• Material change of position.199

3-4:5 Procedural Implications

3-4:5.1 Characterization as a Cause of Action

Some courts do not characterize unjust enrichment as an independent cause of action, but rather as a justification for a claim of restitution or the imposition of a constructive trust.200

Therefore, it is prudent to plead restitution, constructive trust and unjust enrichment as separate causes of action.201


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Notes:

[178] Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).

[179] Heldenfels Bros., Inc. v. City of Corpus...

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