Recovering Damages Under Unjust Enrichment Of An Implied Contract In Law
In Hayes Mechanical, Inc. v. First Indus., L.P., a recent Illinois Appellate Court decision, the court addressed the issue of whether one can recover damages for unjust enrichment from a breach of an implied contract in law. Hayes Mechanical, Inc. v. First Indus., L.P., 351 Ill.App.3d 1 (1st Dist. 2004). In the case, a construction contractor that renovated a commercial building pursuant to a contract with the building's tenant brought an action for unjust enrichment against the building's landlord, after the tenant failed to pay all of the contractor's charges. Id. At trial, a Circuit Court of Cook County granted summary judgment in favor of the landlord, holding that the contractor had failed to state a cause of action for unjust enrichment. Id. On appeal, the Illinois 1st District Appellate Court affirmed the trial court’s ruling, holding that the construction contractor that renovated the commercial building, pursuant to a contract with the building's tenant, failed to state a claim of unjust enrichment against the landlord after the tenant failed to pay all of the contractor's charges. Id. Furthermore, the court reasoned that there was no indication that the landlord enticed the contractor to complete the renovation work requested by the tenant, and the mere fact that landlord may have benefited from contractor's labor and materials was not sufficient in itself to require the landlord to make restitution to the contractor. Id.
Recovery under a theory of unjust enrichment is based on a contract implied in law. Wheeler-Dealer, Ltd. v. Christ, 379 Ill.App.3d 864 (1st Dist. 2008). Because recovery under the theory of unjust enrichment is based upon an implied contract, where the parties' relationship is governed by a contract, the doctrine of unjust enrichment is not applicable. Id. A contract implied in law exists from an implication of law that arises from facts and circumstances independent of an agreement or consent of the parties. Illinois Jurisprudence, Commercial Law § 2:3. It is equitable in nature and is based on the premise that no one should unjustly enrich himself at another's expense. Id. Illinois courts have held that the essence of a cause of action for contract implied in law is the defendant's failure to make equitable payment for a benefit which it voluntarily accepted from the plaintiff. Id.
According to the Illinois Supreme Court, “to state a cause of action based on the theory of unjust enrichment, a plaintiff must allege that the defendant has unjustly retained a benefit to the plaintiff's detriment, and that defendant's retention of the benefit violates the fundamental principles of justice, equity, and good conscience.” Eighteen Investments, Inc. v. NationsCredit Financial Services Corp., 376 Ill.App.3d 527 (1st Dist. 2007). The essential element is the receipt of benefits by one party, which it would be inequitable for him to retain without payment. Illinois Jurisprudence, Commercial Law § 2:3. Even when a person has received a benefit from another, he is liable for payment only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it. Hayes Mechanical, Inc. v. First Indus., L.P., 351 Ill.App.3d 1 (1st Dist. 2004). The mere fact that a person benefits another is not of itself sufficient to require the other to make restitution. Id. A cause of action based upon unjust enrichment does not require fault or illegality on the part of the defendants. Eighteen Investments, Inc. v. NationsCredit Financial Services Corp., 376 Ill.App.3d 527 (1st Dist. 2007). The essence of a cause of action based upon unjust enrichment is that one party is enriched and it would be unjust for the party to retain the enrichment. Id.
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