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ALTHOUGH BREACH OF CONTRACT CAUSES OF ACTION WERE PRECLUDED BY THE STATUTE OF FRAUDS, RELATED PROMISSORY ESTOPPEL AND UNJUST ENRICHMENT CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS.

The First Department, in a full-fledged opinion by Justice Richter, reversing (modifying) Supreme Court, determined that, although the breach of contract allegations were precluded by the statute of frauds, the related causes of action for promissory estoppel and unjust enrichment should not have been dismissed. Plaintiff, Peter, and defendant, Lisa, were both named as beneficiaries in their mother's, Madeline's, will. However, when Peter was in the midst of divorce proceedings, Madeline made Lisa the sole beneficiary because she did not want Peter's wife to claim any assets in her estate should she die before the divorce was final.  Lisa orally agreed to split the estate upon Madeline's death in return for Peter's promise to pay Madeline's estate taxes. Peter paid the estate taxes and Lisa reneged on the deal:

Although the breach of contract causes of action cannot stand, the complaint sufficiently states a claim under the doctrine of promissory estoppel. The elements of a promissory estoppel claim are: (i) a sufficiently clear and unambiguous promise; (ii) reasonable reliance on the promise; and (iii) injury caused by the reliance … . If a contract is barred by the statute of frauds, a promissory estoppel claim is viable in the limited set of circumstances where unconscionable injury results from the reliance placed on the alleged promise … . * * *

The factual allegations of the complaint sufficiently state a cause of action for unjust enrichment with respect to Peter's payment of Madeline's estate taxes and Lisa's life insurance premiums. To establish unjust enrichment, the plaintiff must show that the defendant was enriched, at the plaintiff's expense, and that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered … . Here, the complaint's allegations show that Lisa was enriched at Peter's expense because Peter paid the estate taxes and insurance premiums, despite Lisa's being the sole beneficiary of the will, and that it would be against equity and good conscience to allow Lisa to retain that windfall.

This theory of unjust enrichment is not precluded by the statute of frauds because it is not an attempt to enforce the oral contract but instead seeks to recover the amount by which Lisa was enriched at Peter's expense … . Castellotti v Free, 2016 NY Slip Op 01625, 1st Dept 3-8-16

CONTRACT LAW (ALTHOUGH BREACH OF CONTRACT CAUSES OF ACTION PRECLUDED BY STATUTE OF FRAUDS, RELATED PROMISSORY ESTOPPEL AND UNJUST ENRICHMENT CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS);/PROMISSORY ESTOPPEL (ALTHOUGH BREACH OF CONTRACT CAUSES OF ACTION PRECLUDED BY STATUTE OF FRAUDS, RELATED PROMISSORY ESTOPPEL AND UNJUST ENRICHMENT CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS)/UNJUST ENRICHMENT (ALTHOUGH BREACH OF CONTRACT CAUSES OF ACTION PRECLUDED BY STATUTE OF FRAUDS, RELATED PROMISSORY ESTOPPEL AND UNJUST ENRICHMENT CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS)

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