Best if printed in landscape.

Unjust Enrichment

Unjust enrichment is an equitable doctrine wherein the courts fashion a remedy that is equitable (fair) to both parties. Unjust enrichment is often applied when one party provided a benefit to a second party without an explicit understanding that the second party would compensate the first party. In the absence of such an understanding (agreement or contract), the court may still require the benefited party (the second party in this example) to compensate the other (first) party if it would be unfair or inequitable for the benefited party to not compensate the other party.

Schroeder v. Buchholz, 2001 ND 36, 622 N.W.2d 202

[¶14] ... Unjust enrichment is an equitable doctrine applied in the absence of a contract and used to prevent one person from being unjustly enriched at another's expense. ... "The essential element in recovering under a theory of unjust enrichment is the receipt of a benefit by the defendant from the plaintiff which would be inequitable to retain without paying for its value." Zuger v. North Dakota Ins. Guar. Ass'n, 494 N.W.2d 135, 138 (N.D. 1992) (citation omitted).

[¶15] Five elements must be established to prove unjust enrichment:

1. An enrichment;
2. An impoverishment;
3. A connection between the enrichment and the impoverishment;
4. Absence of a justification for the enrichment and impoverishment; and
5. An absence of a remedy provided by law.  

...

[¶16] The value of the Buchholz property has increased, due in large part to the efforts and contributions of the Schroeders. The Schroeders assisted Dennis Buchholz with his business, which was operated on the property. The Schroeders shared costs, expenses, and labor for improvements with Buchholz. The Schroeders' purchase of a well and pressure tank system to service both houses, the jointly installed and serviced heating system, and the Schroeders' purchase of lumber and materials to convert the barn into a shop are evidence of an impoverishment. The time, labor, and materials provided by the Schroeders for the overall improvement of the whole property are further evidence of an impoverishment. We conclude the district court's findings and conclusions aptly set forth an enrichment of Dennis Buchholz, an impoverishment of the Schroeders, and a connection between the enrichment and impoverishment.

[¶17] Unjust enrichment requires a finding by the court of the absence of a justification for the enrichment. The district court concluded the Schroeders expected a right to reside on the property for life. Although a reasonable interpretation of the facts may suggest the Schroeders' efforts and contributions were a token of familial love and affection, the district court's conclusion is equally sustainable. In light of the Schroeders' payment of half the purchase price, their contributions to the improvement of the property, the testimony indicating the Schroeders did not provide substantial gifts to their other children, and all the evidence before the court, we conclude the absence of a justification for the enrichment is supported by the district court's findings.

[¶18] Finally, for unjust enrichment, there must be the absence of a remedy provided by law... If, for example, there had been a contract to jointly purchase the property, there would be a concomitant remedy at law for enforcement of the contract or damages flowing from any contractual breach... ("Unjust enrichment is an equitable doctrine, applied in the absence of an express or implied contract, to prevent a person from being unjustly enriched at the expense of another.") (citations omitted). The district court, however, specifically held that because there was no agreement to jointly purchase the property, there existed no express or implied contract rights between the parties. The district court's findings and conclusions illuminate no other basis from which the Schroeders could seek a legal remedy, and neither party raised the issue of absence of a legal remedy. We conclude the final element of unjust enrichment—the absence of a remedy at law—is adequately demonstrated by the record.

Last updated May 23, 2007

E-Mail agecinf@ndsuext.nodak.edu
Published by Agribusiness and Applied Economics
Morrill Room 217, P.O. Box 5636
North Dakota State University, Fargo, ND 58105-5636
Phone: (701) 231-7441
Fax: (701) 231-7400