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MIAMI BUSINESS LITIGATION: UNJUST ENRICHMENT CLAIMS UNDER FLORIDA LAW

Miami’s Third District Court of Appeal, in Agritrade, LP v. Quercia, 253 So.3d 28 (Fla. 3d DCA 2017), explained the elements of a Florida law cause of action for unjust enrichment: “(1) plaintiff has conferred a benefit on the defendant, who has knowledge thereof; (2) defendant voluntarily accepts and retains the benefit conferred; and (3) the circumstances are such that it would be inequitable for the defendant to retain the benefit without first paying the value thereof to the plaintiff.”    The basis of the remedy of unjust enrichment is to provide restitution where one person has been unjustly enriched at the expense of another.  Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Important issues have arisen under Florida law regarding whether courts consider claims of unjust enrichment to be “legal” or “equitable” claims, and what the term “equitable” means.   Florida appellate courts and federal courts interpreting Florida law have repeatedly indicated that unjust enrichment claims are “equitable.”  Florida’s Third District Court of Appeal in Bowleg v. Bowe, 502 So.2d 71 (Fla 3d DCA 1987), stated that “the theory of unjust enrichment is equitable in nature.”  Similarly, the United States Court of Appeals for the Eleventh Circuit in Tooltrend, Inc. v. CMT Utensili, SRL, 198 F.3d 802 (11th Cir. 1999), explained that “[a] claim for unjust enrichment is an equitable claim.”  Following this line, the United States District Court for the Middle District of Florida in  CEMEX Constr. Materials Fla., LLC v. Armstrong World Indus., Inc., 2018 WL 905752 (M.D. Fla. Feb. 15, 2018), stated that “[a] claim for unjust enrichment is equitable in nature.”

Confusion in case law concerning the term “equitable” arises from the distinction that courts sometimes act “in equity” and in other times act as courts “of law.”  Although the term equitable can refer to this distinction between courts acting in equity versus law, “equitable” can instead mean, in context, “fairness” and have nothing to do with a court’s decision- making process.  This principle was explained in by Florida’s Fourth District Court of Appeal, in an en banc decision (i.e., a decision heard by the entire appellate court as opposed to a decision of typical three-judge panel), in the case Commerce Partnership 808 Ltd. Partnership v. Equity Contracting Co., Inc., 695 So.2d 383 (Fla. 4th DCA 1997).  The appellate court determined that cases from other states that “rely on the principle that there can be no remedy in equity when the [construction] line statute provides an adequate remedy at law” do not apply under Florida law because: “[t]hese cases turn on the determination that unjust enrichment is an equitable cause of action.  However, in Florida, … all implied contract actions were part of the action of assumpsit, which was an action at law under common law.  Although some Florida courts have described quasi contracts as being ‘equitable in nature,’ the term has been used in the sense of ‘fairness,’ to describe the quality which makes an enrichment unjust, and not as a reference to the equity side of the court.”  Subsequent Florida appellate case law is in accord.  For example, in American Safety Ins. Serv., Inc. v. Griggs, 959 So.2d 322 (Fla. 5th DCA 2007), Florida’s Fifth District Court of Appeal stated that compensatory damages under a claim for quasi contract cannot be awarded via the court’s equitable authority and that “an action for unjust enrichment is an action at law, not in equity.”

Although Florida law views claims for unjust enrichment to be claims at law, instead of in equity, the remedy for an unjust enrichment claim can at times be a legal remedy or an equitable remedy.  Following United States Supreme Court precedent in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002),  courts have determined, at times, that an unjust enrichment claim can seek equitable relief.  This occurs when the relief sought is, for example, disgorgement.   In Montage Grp., Ltd. v. Athle-Tech Comp. Sys., Inc., 889 So.2d 180 (Fla. 2d DCA 2004), Florida’s Second District Court of Appeal explained that the remedy of disgorgement was appropriate for an unjust enrichment claim.  Similarly, the United States Court of Appeals for the Eleventh Circuit explained that “[d]isgorgement is an equitable remedy intended to prevent unjust enrichment.”

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.

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