Unjust Enrichment in PA | Pittsburgh Lawyers

A Claim for Unjust Enrichment in Pennsylvania

Money in a wallet, implying unjust enrichment in Pennsylvania versus breach of contract

A claim for unjust enrichment (or quasi-contract) exists in Pennsylvania where one party (the plaintiff) does something that unfairly benefits another party (the defendant).

The defendant must appreciate the benefit such that it would be inequitable for him or her to have retained said benefit without payment of value.  With this, plaintiff may sue the Defendant for the value of the benefit conferred, in various ways, often regarding non-payment of credit card debt or home improvement, discussed below.   

It Only Applies in the Absence of a Contract 

Importantly, unjust enrichment only applies in the absence of a valid contract between the parties. In other words, if the parties have a binding agreement, the claim will be one for contract enforcement, exclusively, not unjust enrichment. This is true, regardless of whether the contract is written or oral, or even if one party was "unfairly" benefited at the expense of another. 

A Simple Example

Let's say I'm your lawyer pursuant to a written agreement, but I also cut your grass. You pay for legal services but refuse to pay for my grass cutting. I shortened your grass reasonably well, but you refuse payment anyway, claiming "no contract" exists. This is true. However, I likely bestowed a benefit on you, especially if shorter grass helped you comply with a suburban ordinance limiting grass length.   

But notice how things change if I had cut the grass around your cabin -- in a heavily wooded rural area -- which has yard about which you don't care. There, my claim for unjust enrichment would likely fail, since you, the property owner, received no appreciable benefit.  

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A Key Unjust Enrichment Case in PA

In Mitchell v. Moore, 729 A.2d 1200 (Pa. Super. Ct. 1999), the plaintiff-Mitchell worked on the Defendant's farm, maintaining the property and taking care of the animals for over ten years. Because there was no clear agreement between the parties, Mitchell proceeded on a theory of unjust enrichment.  Mitchell won a judgment at the trial court level for $130,000.  Then, Defendant appealed. Next, the Superior Court noted the standard for unjust enrichment in Pennsylvania:

""Unjust enrichment" is essentially an equitable doctrine. Styer v. Hugo, 422 Pa.Super. 262, 619 A.2d 347 (1993), aff'd, 535 Pa. 610, 637 A.2d 276 (1994).  Thus, where unjust enrichment is found, the law implies a contract, which requires the defendant to pay to the plaintiff the value of the benefit conferred. Schenck v. K.E. David, Ltd., 446 Pa.Super. 94, 666 A.2d 327 (1995). The elements necessary to prove unjust enrichment are:

(1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. (citations omitted)."  

The court went on to say, a claimant must show that the defendant either "wrongfully secured or passively received a benefit that it would be unconscionable for her to retain." The superior court overturned the $130,000 judgment in favor of the farm-worker-Mitchell, finding that the benefit had been mutual, because the land owner provided room and board to Mitchell. 

Common Examples of Unjust Enrichment 

Credit Card Debt Collection 

A wallet containing ways to pay money to banks, the basis of a suit for unjust enrichment for using the cards, absent a contract

Our Pittsburgh lawyers regularly defend claims for "unjust enrichment" in credit card debt actions. There, the banks often misplace (to put it kindly) the actual contract, making the parties work to re-construct the parties' dealings to discern an agreement from bank statements and purchases. Most often, no clear "contract" emerges. The credit card company either assigns the debt to a junk debt buyer for enforcement, or sues for "unjust enrichment." 

Importantly, even if a court allows the bank's unjust enrichment claim, the claim is limited to the purchases made on the card, absent interest, or late fees, or otherwise.   

Construction and Home Improvement Contracts ("HICPA")

Pennsylvania's Home Improvement and Consumer Protection Act often renders null and void many home improvement contracts, because few -- if any -- contractors follow HICPA strictly.  For example, a home improvement agreement is unenforceable if it lacks that lacks any one of the following in writing: a start date for the work, an end date, plus every change order must be in writing. See Subsection (a) of Section 517.7 of the HICPA. However, the home improvement contractor may sue for unjust enrichment. 

Note, however, here, the contractor's claims will be limited to he amount of benefit conferred to the home owner from the work. Hence, the contractor's estimated "contract price," late fees, and other charges by the contractor are void and irrelevant. For more see FAQ below.  

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Our Pittsburgh lawyers bring and defend claims for unjust enrichment in Pennsylvania. Call or email us today.  

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Frequently Asked Questions

A hallway and copier, of Pittsburgh lawyer for unjust enrichment cases

What is the statute of limitations for unjust enrichment?   

There isn't one. Enforcing a claim for unjust enrichment, the courts apply the doctrine of laches, which looks at whether the plaintiff's delay was reasonable. This is a key difference between unjust enrichment and a contract to enforce a contract. The latter has a strict a four (4) year statute of limitations in PA, with few exceptions.     

 

May a Plaintiff's lawsuit include both a claim for unjust enrichment and breach of contract?  

Yes. In civil litigation (a lawsuit) a party may plead both theories in her Complaint (because pleading in the alternative is allowed), pursuant to 231 Pa. Code § 3.15. However, by the time trial comes, the court will typically require the Plaintiff to proceed on one theory or another, as the true "gist" of the action.

 

What Are the Key Differences Between Unjust Enrichment & Contract Disputes?

Here are the key differences between a claim for unjust enrichment versus the enforcement of a contract: 

        • Parties' Intent: A claim for breach of contract seeks to enforce the parties' intent, giving him the benefit of his bargain.  But regarding unjust enrichment, the court looks primarily at the value of benefit conferred. 
        • Fairness.  A contract need not be fair. In fact, a party is entitled to the fruits of his "good deal" at the direct -- and unfair -- expense of another.  This is the cornerstone of free commerce: parties are free to enter into good -- and bad -- deals. Unjust enrichment, however, is the exact opposite. The Court looks only at fairness in terms awarding money for the benefit conferred.  
        • Contract Price.  With Unjust Enrichment, the contract price is irrelevant. If a contract is void as against a consumer protection law, for example, the price stated in a contract is also voided. Let's say a home improvement contractor charges $30,000 for a new swimming pool it installed, but the contract is unenforceable for violation of PA's Home Improvement and Consumer Protection Law (discussed below). Now what? The only question is: what value was conferred?  One metric is property valuation.  So, if the homeowner's property value only went up $10,000 (from the new swimming pool), the claim is for $10,000, not stated contract price of $30,000.  Here is a recent example about a commercial case (click here).  
        • Right to a Jury Trial.  A claim to enforce a contract is "at law," meaning, it falls with our civil litigation system where a jury trial is allowed.  On the other hand, unjust enrichment is a claim "at equity," which does not guarantee the right to a jury trial.  

 

What Are Typical "Absence of a Contract" Scenarios? 

What constitutes the absence of a contract or agreement? This typically occurs in two ways.  In one instance, the parties' dealings fails to meet the requisites for a contract in Pennsylvania.   

1. Defective Contract Formation

A contract in Pennsylvania cannot be enforced unless it contains certain elements. These are an offer, that is accepted, with a meeting of the minds and a bargain for something of value to be exchanged. Or, perhaps the parties have the mere framework of an agreement, but the terms are vague. Likewise, maybe the contract was oral, but it was the type of agreement that required a writing. We explain contract formation elsewhere on this site, but for now, just know that not all documents titled "contract" or "agreement" are value in Pennsylvania. This can open the door for a claim for unjust enrichment, where the courts imply a contract between the parties.  

2. The Contract is in Violation of Public Policy or Consumer Protection Laws

The other key instance is where a contract exists, but it violates public policy or is contrary to consumer protection law.   Another example is where the parties' agreement meets all the elements of a contract:  there's an offer, acceptance, something of value is exchanged, plus it's in writing -- only, there's a problem.  Consumer protection law can void certain contracts or render the same unenforceable, as mentioned above.  

 

What is the case law that alters PA's Home Improvement and Consumer Protection Law -- to allow unjust enrichment claims?  

There are two key cases.

In Shafer Elec. & Const. v. Mantia, 2013 PA Super 111 (Pa. Super. Ct. May 10, 2013), the Pennsylvania Superior Court allowed a contractor's -- subject to §§ 517.1 et seq. -- to recover on a theory of quantum meruit (i.e., the home owner must pay for the benefit received) when HICPA otherwise invalidated the home improvement contract. Likewise, in Durst v. Milroy General Contracting, Inc., 52 A.3d 357 (Pa. Super. Ct. 2012), the superior court held that HICPA was silent on quasi-contract theories and permitted a quantum meruit claim to proceed even though the oral contract at issue violated HIPA and was unenforceable. 

 

What about a mechanic's lien?  If the lien is defective, for some reasons, may a claim for unjust enrichment go forward?

Yes.  A mechanic's lien rendered ineffective due to to home improvement law or otherwise will not limit or restrict a claim for unjust enrichment. However, the claim will be limited to the amount of benefit actually conferred, not the contract price.    

 

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Our litigation attorneys in Pittsburgh advance and defend claims for unjust enrichment in PA. Call or email us today.  

 

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