law-unjust-enrichment
UNJUST ENRICHMENT CASE LAW
Miga v. Jensen, No. 07-0123 (Tex. Oct. 23, 2009)(Jefferson)
(collection of paid judgment upon reversal on appeal), restitution after reversal of judgment, unjust enrichment)
DENNIS L. MIGA v. RONALD L. JENSEN; from Tarrant County;
2nd district (02-05-00277-CV, ___ SW3d ___, 11-30-06)
The Court affirms the court of appeals' judgment.
Chief Justice Jefferson delivered the opinion of the Court.
Frymire Engineering Co. v. Jomar International, No. 06-0755 (Tex. June 13, 2008)(Willett)
(equitable subrogation standing found) (construction law, subcontractors, water damage caused by faulty valve,
indemnity, equitable subrogation, third-party, involuntary payment, unjust enrichment, standing)
(12-page pdf opinion)(Frymire has standing to pursue its claims against Jomar under the doctrine of equitable
subrogation)
COURT OF APPEALS CASES (PET. DENIED)
08‑1081 ANN CASSTEVENS v. DANIEL SMITH AND SHANNON SMITH; from Smith County; 6th district
(06‑07‑00116‑CV, 269 SW3d 222, 10‑23‑08, pet denied June 2009)
Restitution--Unjust Enrichment
Unjust enrichment is also found under circumstances in which one person has obtained a benefit from another by
fraud, duress, or the taking of an undue advantage. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d
39, 41 (Tex. 1992).
We next examine Casstevens' claim seeking restitution for the unjust enrichment of the Smiths. Unjust enrichment,
itself, is not an independent cause of action, but rather "characterizes the result of a failure to make restitution of
benefits either wrongfully or passively received under circumstances that give rise to an implied or quasi-
contractual obligation to repay." Friberg-Cooper Water Supply Corp. v. Elledge, 197 S.W.3d 826, 832 (Tex. App--
Fort Worth 2006), rev'd on other grounds, 240 S.W.3d 869 (Tex. 2007) (quoting Walker v. Cotter Props., Inc.,
181 S.W.3d 895, 900 (Tex. App.--Dallas 2006, no pet.)). The doctrine applies the principles of restitution to
disputes where there is no actual contract, based on the equitable principle that one who receives benefits that
would be unjust for him or her to retain ought to make restitution. Argyle Indep. Sch. Dist. v. Wolf, 234 S.W.3d
229, 246-47 (Tex. App.--Fort Worth 2007, no pet.); Elledge, 197 S.W.3d at 832; Mowbray v. Avery, 76 S.W.3d
663, 679 (Tex. App.--Corpus Christi 2002, pet. denied). (2)
Casstevens points to summary judgment evidence that the Smiths had obtained the benefit of ownership of the
house for a fraction of its actual value--and that they were able to obtain this benefit only because of the active
fraud of a third party. Therefore, Casstevens argues that it would be unconscionable for the Smiths to retain the
"enrichment." Although each of these statements is literally correct, they do not control. The question is whether
some implied contract might exist between the Smiths and Casstevens that would require the Smiths to repay
Casstevens even in the absence of a formal written obligation to do so.
There is not. The property was properly sold at a foreclosure auction, evidently utilizing the methods provided by
the Legislature for that purpose. It was purchased by the Smiths. At that point, they owned the property subject to
the prior, superior first lien of the bank. However, barring foreclosure by that bank for failure to pay that note,
under their lawful purchase at foreclosure, the Smiths had an immediate right to possession of the house.
Further, we note that the controlling statutes require only that notice of such proceedings be given to the parties
named on the requisite documents as the debtors, and not to other parties, known or unknown. Tex. Prop. Code
Ann. § 51.002(b)(3) (Vernon Supp. 2008) (notice of sale must be given to each debtor who, according to records
of mortgage servicer of debt, is obligated to pay debt).
Ultimately, unjust enrichment is not a proper remedy "merely because it might appear expedient or generally fair
that some recompense be afforded for an unfortunate loss to the claimant, or because the benefits to the person
sought to be charged amount to a windfall." City of Corpus Christi v. Heldenfels Bros., Inc., 802 S.W.2d 35, 40
(Tex. App.--Corpus Christi 1990), aff'd, 832 S.W.2d 339 (Tex. 1992). The profit must be "unjust" under principles
of equity. Zapata Corp. v. Zapata Gulf Marine Corp., 986 S.W.2d 785, 788 (Tex. App.--Houston [1st Dist.] 1999,
no pet.); Burlington N. R.R. Co. v. Sw. Elec. Power Co., 925 S.W.2d 92, 97 (Tex. App.--Texarkana 1996), aff'd,
966 S.W.2d 467 (Tex. 1998). (3) This is one area in which the law does not reward morally wrong behavior or
business dealings which happen to be clothed with some indicia of legality. See discussion at Edwards, 252 S.W.
3d at 837-38. However, the party must have some connection with the wrongdoing in order for a plaintiff to
recover, and in this case, as the Smiths acted in accordance with controlling statutory law as designed by the
Legislature, we cannot agree that this evidence provides any proof that their actions were such as to justify the
application of the doctrine.
Under these facts, even though the Smiths stand to make a substantial profit on their purchase, and Casstevens
lost a substantial amount of money--as well as the house, the Smiths' actions followed the requirements of the
law, and thus no extraneous implied contract between the parties can exist. Under the rationale proposed by
Casstevens, every purchaser at a proper foreclosure sale could be said to have received an unjust enrichment if
he or she bought the property and made a substantial profit while the debtor has lost all equity in the property.
Further, unlike the situations in the cases summarized in the footnote, in this case, there is no evidence that the
Smiths committed fraud against Casstevens in exercising their right of ownership and possession of the house.
Further, there was no unjust enrichment of the Smiths, but only the Carrolls.
The contention of error is overruled.
08-0722
GRAYSON DOUGLAS GILL, ELLEN EVES DENNIS, EMILY SCANLON CRUMP, ROBERT BLAIR SCANLON AND
CALLOWAY, NORRIS & BURDETTE v. JANICE L. MATTOX, ATTORNEY AD LITEM FOR THE UNKNOWN HEIRS
OF HARRISON DOUGLAS FENDLEY, DECEASED; from Dallas County; 5th district (05‑07‑00429‑CV, ___ SW3d
___, 06‑23‑08, pet. denied Oct 2008)(request for expenses and attorney's fees pursuant to the “common fund
doctrine.” That doctrine is an equitable doctrine designed to prevent unjust enrichment).unjust enrichment is not a
cause of action. City of Corpus Christi v. S.S. Smith & Sons Masonry, Inc., 736 S.W.2d 247, 250 (Tex. App.—
Corpus Christi 1987, writ denied);
NOTE: There is precedent for the proposition that unjust enrichment is not a cause of action, but merely an
equitable remedy the court may grant in appropriate circumstances to avoid unjust enrichment
City of Corpus Christi v. S.S. Smith & Sons Masonry, Inc., 736 S.W.2d 247, 250 (Tex. App.—Corpus Christi 1987,
writ denied)(unjust enrichment is not a cause of action. )