04/19/2017

Unjust Enrichment as a Cause of Action

One of the more common causes of action I see in litigation is a claim for unjust enrichment. Despite its commonality, there is a distinct lack uniformity in how it is plead and a greater misunderstanding of the elements than would be expected.

Unjust enrichment is proven with the claiming party proves another person or party knowingly received something value which it was not entitled to receive. This instruction is used at both the state and federal level.

See Schumacher v. Schumacher, 627 N.W.2d 725, (Minn. 2001); (citing ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 306 (Minn. 1996)); Guinness Import Co. v. Mark VII Distribs., Inc., 153 F.3d 607, 613 (8th Cir. 1998); The Grandoe Corp. v. Gander Mountain Co., 2013 WL 3430735 (D. Minn. 2013) and 2012 WL 3430735 (D. Minn. 2012).

It is important to understand though just what has to be "knowingly" received or done. It is one reading, and I say the proper reading, to conclude that "knowingly" is a requisite for both the action of receiving something of value and the lack of entitlement to receive the thing of value. Others have argued that knowingly only attaches to the requirement that you receive something, but not to the element of lack of entitlement to receive the thing of value.

From a practical perspective, here is why my interpretation is correct;

In the context of a cause of action, the plaintiff must prove the defendant did something wrong.

If a party receives something of value, but does not know it is not entitled to receive it, has the receiving party done anything wrong? From a public policy perspective, I don't believe so.

As a more tangible conceptualization, say a manufacturer in Centerville hires an employee who formerly worked in Stillwater. That employee brings to the Centerville employer memorized potential client phone numbers. The employee provides those numbers to the Centerville employer, but the Centerville employer does not know the Stillwater employer restricted the employee's use or distribution of the numbers.

Is the Centerville employer guilty of unjust enrichment?

It certainly knowingly received something of value but did it not know it was not entitled to receive that thing (the phone numbers).

This is the sort of analysis that I can provide to you. What may seem clear may not be. If you have questions on what something means, how to interpret something, or what course of action to take, call me to discuss your options.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.

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