Recognizing Restitutionary Causes of Action & Remedies in Civil Litigation, 0415 RIBJ, 63 RI Bar J., No. 5, Pg. 15

Author:Colleen P. Murphy, Esq. Professor, Roger Williams, J.

Recognizing Restitutionary Causes of Action & Remedies in Civil Litigation

Vol. 63 No. 5 Pg. 15

Rhode Island Bar Journal

April, 2015

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0March, 2015

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 Colleen P. Murphy, Esq. Professor, Roger Williams, J.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0An attorney once asserted: "Restitution is a legal growth area." His listener asked, "How do you know?" The attorney responded: "I practiced law for twenty years without seeing one restitution case, but in the year since I taught Remedies, I have seen one about every week."

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0What follows is a brief primer on the law of restitution, with respect both to the substantive law of unjust enrichment and to various restitutionary remedies.[1]

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0I. General Principles

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0A. Restitution and Unjust Enrichment Defined

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The terms restitution and unjust enrichment are interchangeable to denote a basis of civil liability, distinct from contract or tort, premised on the basic principle that someone who is unjustly enriched at the expense of another is subject to liability in restitution. To be unjustly enriched is to obtain an economic benefit (such as money, property, a service, a saved expenditure, or a discharged obligation) when that benefit was transferred without an adequate legal basis. The Supreme Court of Rhode Island has recognized unjust enrichment as a distinctive cause of action and stated its fundamental elements:

"Unjust enrichment... can stand alone as a cause of action in its own right.... To recover for unjust enrichment, a claimant must prove: 1) that he or she conferred a benefit upon the party from whom relief is sought; 2) that the recipient appreciated the benefit; and 3) that the recipient accepted the benefit under such circumstances 'that it would be inequitable for [the recipient] to retain the benefit without paying the value thereof."2

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The cause of action in unjust enrichment historically has been recognized in a variety of settings carrying different names, including implied-in-law contract, quasi-contract, and quantum meruit. The modern trend is to use the terms unjust enrichment or restitution, making clear this basis of civil liability is independent of contract law.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Very importantly, a cause of action in unjust enrichment may exist even if the plaintiff has not suffered an economic loss. The cause of action depends instead on whether the defendant has received an economic benefit. Moreover, in contrast to contract or tort causes of action, the cause of action in unjust enrichment, in many contexts, does not require that the defendant was at fault. The focus instead is on whether the defendant has been unjustly enriched, even if the defendant is not at fault or even if the claimant instead was the one at fault (e.g., the claimant mistakenly conferred the benefit on the defendant).

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0B. Distinctive Advantages of the Unjust Enrichment Cause of Action and of Restitutionary Remedies

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Restitution, in both its substantive and remedial aspects, has several distinctive advantages over other civil causes of action and remedies. The law of restitution is most advantageous when:

• Plaintiff's only cause of action is unjust enrichment (i.e., the circumstances do not present a tort, contract, or statutory cause of action);

• Defendant's gain from the benefit exceeds plaintiff's loss;

• Defendant's gain is easier to prove than plaintiff's loss;

• Defendant is insolvent and the restitution claimant is able to obtain specifically identifiable property held by the defendant; or

• Plaintiff seeks to reach its property or traceable proceeds of the property in the possession of a third person.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0C. Restitution May be Legal or Equitable

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The cause of action in unjust enrichment may loosely be termed equitable in the broad sense of achieving fairness. However, as a technical/historical matter, some strands of restitution are legal, while others are equitable. Concrete consequences, including whether a right to jury trial exists, whether an action is authorized by statute, and whether certain types of defenses are available, depend on a proper understanding of which restitutionary causes of action and remedies are technically legal and which are technically equitable. Typically, a simple money judgment for the value of a benefit obtained by the defendant is a legal remedy, as is monetary restitution of a defendant's unjust gain of money. By contrast, the asset-based remedies of constructive trust and equitable lien are equitable remedies.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0II. Liability in Restitution: The Cause of Action in Unjust Enrichment

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The general categories of liability in unjust enrichment are when: 1) a transfer of a benefit is subject to avoidance (such as for mistake or defective consent);

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA02) the recipient of the benefit did not request the benefit, but it would be unjust for the recipient to retain the benefit;

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA03) the recipient requested the...

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