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AN UNJUST ENRICHMENT CAUSE OF ACTION IS NOT AVAILABLE WHERE A CONTRACT COVERS THE RELEVANT ISSUE, EVEN IF THE DEFENDANTS ARE NONSIGNATORIES; UNJUST ENRICHMENT IS NOT A “CATCH ALL” CAUSE OF ACTION, CRITERIA EXPLAINED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the existence of a contract covering the relevant issue precluded the unjust enrichment cause of action, even though defendants were not signatories to the contract:

“The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter” … . It makes no difference that defendants are not parties to the contracts governing the dispute, as “a nonsignatory to a contract cannot be held liable where there is an express contract covering the same subject matter” … . * * *

… “[U]njust enrichment is not a catchall cause of action . . . . It is available only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff” … . Here, plaintiff states a claim against defendants for recognized torts, obviating the need for the creation of that obligation. Iberdrola Energy Projects v MUFG Union Bank, N.A., 2023 NY Slip Op 03841, First Dept 7-13-23

Practice Point: If a contract covers the relevant issue, unjust enrichment is not available, even if the defendants are nonsignatories. Unjust enrichment is not a “catch all” cause of action and is appropriate only when there is no actionable breach of contract and the relevant issue is not otherwise addressed by other causes of action (here certain torts).

 

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