Unjust Enrichment in Maryland: Liability Without a Contract
Most legal disputes over business transactions or exchanges between individuals and companies are disputes regarding contracts or agreements. These legal contract disputes all emanate from a specific agreement between the parties for an exchange of items/money with consideration on both sides. However, in Maryland, there also exists a unique cause of action called Unjust Enrichment. Unjust Enrichment is a cause of action where one party has provided some type of benefit to another party – without a contract/agreement, and the benefit-providing party should be compensated for providing that specific benefit.
In Maryland, in order for a benefit-conferring party to succeed on an unjust enrichment claim, that party must establish the following: (1) that there was a benefit conferred upon the other party, (2) that the benefit-receiving party knew about the benefit they were receiving, and (3) that the benefit was kept by benefit-receiving party in a manner that compensation is due to the benefit-conferring party. This three-party standard for unjust enrichment elements in Maryland have been regularly supported by the Court of Appeals and Maryland Court of Special Appeals, and they havd also been used throughout the Maryland Circuit Courts and Maryland District Courts. (Yost v. Early).
Unjust enrichment aims to “deprive the defendant of benefits that in equity and good conscience he ought not to keep, even though he may have received those benefits quite honestly in the first instance, and even though the plaintiff may have suffered no demonstrable losses.” (Dep’t of Hous. & Cmty. Dev. v. Mullen). In fact, the Maryland Court of Appeals has conveyed that: “A person who receives a benefit by reason of an infringement of another person’s interest, or of loss suffered by the other, owes restitution to him in the manner and amount necessary to prevent unjust enrichment.” (Berry & Gould, P.A. v. Berry).
Interestingly, the measure of damages in unjust enrichment is not based on loss. In Maryland, within a claim of unjust enrichment, the “classic” damages measurement is the “gain to the defendant, not the loss by the plaintiff.” (Mogavero v. Silverstein). The reason for this difference is that compensation for unjust enrichment “is not aimed at compensating the plaintiff, but at forcing the defendant to disgorge benefits that it would be unjust for him to keep.” (Mass Transit Admin. v. Granite Const. Co.).
It is also important to note that in Maryland a party cannot be successful in unjust enrichment lawsuit where that party also is claiming the existence of a contract or agreement. As stated by the Federal District Court in Maryland, it is “settled in Maryland, and elsewhere, that a claim for unjust enrichment may not be brought where the subject matter of the claim is covered by an express contract between the parties.” (FLF, Inc. v. World Publications, Inc.).
Overall, unjust enrichment is a method for a party that conferred a benefit without having a contract or agreement to be made whole. A party that clearly received a benefit (whether money, items, or services) with the knowledge of that benefit being conferred should not be able to receive a windfall of those benefits simply because no contract was agreed-to.
The litigation, contract, business dispute attorneys at Longman & Van Grack have the ability to address any type of business, contract, or unjust enrichment matter. If you are in a business or commercial dispute with an individual or business, Adam Van Grack and our other contract and business attorneys will take time to thoroughly review your case and the dispute at issue to determine what the respective parties’ responsibilities are and if liability exists. Drawing on years of experience, our business disputes and litigation legal team will guide you on the best course of action for an efficient and smooth resolution. Contact Adam or our other attorneys at (301) 291-5027 for a contract dispute attorney consultation today at one our Maryland (Rockville or Bethesda) Offices.
