In California, individuals have the option to pursue a civil lawsuit when the other party refuses to make amends. However, establishing a case for unjust enrichment in court can be challenging due to specific circumstances and considerations. It is important to understand that unjust enrichment is not always straightforward, as each situation has its unique complexities.
What is a Cause of Action for Unjust Enrichment?
A cause of action for unjust enrichment arises when one party benefits at the expense of another without proper restitution. Unjust enrichment is a common law principle that recognizes the equities of a particular case, rather than relying on contractual obligations. The underlying principle is that it is unfair for one person to enrich themselves at another’s expense.
To establish a cause of action for unjust enrichment, the following elements must be present:
- Party A provides a benefit to Party B.
- Party B receives the benefit without paying the appropriate restitution.
- This inequitable benefit is known as unjust enrichment.
It is important to note that when Party A fulfills their contractual obligations and Party B does not, it typically falls under a breach of contract scenario. Unjust enrichment is distinct from a gift, as a gift is given without any expectation of receiving something in return.
Does California Recognize Unjust Enrichment?
Unjust enrichment is a valid legal argument in California. While courts may differ on whether unjust enrichment is a legitimate claim, they view it as equivalent to restitution. Unjust enrichment can be asserted as a reparation claim in California, particularly when a contract was obtained through fraud or is otherwise void or ineffective.
For example, in the case of Alexander v. Metro-Goldwyn-Mayer Studios, the district court dismissed claims of concept appropriation, breach of implied contract, and unjust enrichment against the makers of the film “Creed.” The court reasoned that an idea is not a recognized property right under California law, and a single tweet cannot serve as the foundation for such claims.
California courts often interpret causes of action labeled as “unjust enrichment” as quasi-contract claims seeking restitution. This interpretation was affirmed in cases such as Rutherford Holdings, LLC v. Plaza Del Rey and Durell v. Sharp Healthcare.
What are the Elements of Unjust Enrichment in California?
The landmark case of Peterson v. Cellco Partnership outlined the elements that a plaintiff must establish to prevail in an unjust enrichment lawsuit:
- If the defendant obtained an advantage they would not have otherwise had, such as stolen trade secrets, they have been unjustly enriched.
- The value of the benefit received by the defendant must be determined, and reasonable costs should be deducted.
- The amount of unjust enrichment should not include any sums included in the plaintiff’s actual loss.
In summary, an unjust enrichment claim in California requires the following components:
- The defendant received a benefit.
- The benefit came at the plaintiff’s expense.
- It would be unfair for the defendant to keep the benefit without compensating the plaintiff proportionately.
Case Example where Claim for Unjust Enrichment Was Unrecognized: City of Oakland v. Oakland Raiders
After the Oakland Raiders moved to Las Vegas, the City of Oakland sued the National Football League (NFL) and its teams for unjust enrichment, breach of the implied promise of good faith and fair dealing, and breach of contract. The trial court dismissed the claims, stating that the city lacked standing as a third-party beneficiary. The appellate court upheld this decision, concluding that the city could not allege the necessary circumstances to support an unjust enrichment claim.
Case Example where Claim for Unjust Enrichment Was Recognized: Dunkin v. Boskey
In the case of Dunkin v. Boskey, a man and a woman entered into a contract to have a child through artificial insemination. They agreed to treat the child as if it were their natural child. After the baby was born, the woman cut off all contact between the man and the child. The court found that while the man could not claim parental rights, he was entitled to a remedy under unjust enrichment for readily ascertainable economic loss.
Fairness in Unjust Enrichment
To successfully pursue an unjust enrichment claim, the plaintiff must demonstrate the following:
- Enrichment: The defendant received a benefit.
- Impoverishment: The benefit came at the plaintiff’s expense.
- Link: There is a connection between the enrichment and the impoverishment.
Additionally, there must be no legal justification for the enrichment and impoverishment, and no other legal recourse available.
Unjust enrichment provides a legal avenue to address situations where fairness is a significant factor. It goes beyond contractual obligations and allows for restitution when one party has been unjustly enriched at the expense of another.