If You Have a Written Contract, You Can’t Pursue Unjust Enrichment Claim, Says NY Court June 12, 2010

Although, in the legal world, you can generally pursue different theories – even if they are inherently at odds with each other – to try and recover your losses, there are some exceptions to that rule. And the realm of breach of contract – at least in New York – is precisely one circumstances. You simply must ascertain whether your claim is based upon the breach of a valid written contract, or whether your claim is grounded in quasi-contract, i.e., to seek recovery on an strictly equitable basis.

In Fwan Management Co., LLC v. 420 West Broadway Corp., a New York County trial court dismissed the unjust enrichment claims of a shareholder in a real estate cooperative and proprietary lessee of commercial property space’s claims that he had been overcharged by the landlord. And the reason that his claims were dismissed, as noted in my earlier blog post, “What You Can Do Under NY Law if You Don’t Have a Valid Contract,” was based upon a straightforward application of New York law:

“Generally, an enforceable written contract precludes recovery in quasi contract with respect to events arising from the same subject matter. See Curtis Properties Corp. v. Greif Companies, 236 AD2d 237, 239 (1st Dep’t 1997). An unjust enrichment cause of action is ‘precluded by the fact that a simple breach of contract claim may not be considered a tort unless a legal duty independent of the contract-i.e., one arising out of circumstances extraneous to, and not constituting elements of, the contract itself-has been violated.’ Brown v. Brown, 12 AD3d 176, 176 (1st Dep’t 2004). However, a plaintiff may proceed on both breach of contract and quasi-contract theories where there is a genuine dispute as to the existence of a contract. Id

Since, in this case, there was no question that the issues were governed by express contractual language, the plaintiff’s unjust enrichment (i.e., “quasi-contract”) claims were correctly dismissed.

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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