Third Circuit Limits Use of Unjust Enrichment and Breach of Contract
In the recent decision of Crowded Cabin, LLC v. TKLL Hebert, LLC, 2013-208 (La. App. 3 Cir. 10/30/13), — So.3d —, the Third Circuit Court of Appeal sustained an Exception of No Cause of Action holding that the plaintiff, Crowded Cabin, LLC, had not properly asserted a claim for breach of contract and unjust enrichment against the owners of immovable property.
Crowded Cabin was given the exclusive right to place and operate video poker devices in an appropriate location to be furnished by TKLL Hebert, LLC. Crowded Cabin filed suit for breach of contract after the necessary location was not furnished. Crowded Cabin amended its petition to file a breach of contract and unjust enrichment claim against the owners of the immovable property that was the subject of the agreement between Crowded Cabin and TKLL Hebert, LLC. Crowded Cabin prayed that if it did not prevail in its breach of contract claim, the property owners should reimburse it under the theory of unjust enrichment.
The property owners filed an Exception of No Cause of Action, seeking dismissal of the action against them. The property owners argued that there was no privity of contract between them and Crowded Cabin. The owners also alleged that there was not a valid claim for unjust enrichment because there was another remedy available. La. C.C. art. 2298. The Appellate Court relied on the Garber v. Badon & Ranier, 07-1497 (La. App. 3 Cir. 4/2/08), 981 So.2d 92, writ denied, 08-1154 (La. 9/19/08), 992 So.2d 943, decision that had analyzed the elements of an unjust enrichment claim. In Garber, the Court explained that the plaintiff’s “success or failure of other causes of action is not considered in determining whether a claim for unjust enrichment applies. Instead, the existence of other causes of action is the determining factor.” Id.
The Third Circuit concluded that the current case was analogous to the Garber decision because Crowded Cabins had a remedy against the party, TKLL Hebert, LLC, with whom the contract was entered. The potential success or failure of that remedy was of no moment. The court highlighted that the critical determination was whether there was a real remedy, not merely a technical remedy. Therefore, the Exception of No Cause of Action was sustained, and the property owners were dismissed from the claim.
The Take Away
The importance of this line of cases for defendants is that it limits the potential remedies of plaintiffs. Additionally, it is important to note that the determination was made in an exception, not at trial. Therefore, the unjust enrichment claim is an extraordinary remedy that may be resolved at the outset of the claim by filing an exception if other remedies are pursued by the plaintiff.
Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.