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Unjust Enrichment Depends on Circumstances of Each Situation
Description Colorado appeals court reversed a judgment for unjust enrichment. A contractor had done significant building improvements for a lessee who failed to pay for improvements because they were evicted for failure to pay rent. Building owner received a benefit from the contractor, but the circumstances do not require building owner to pay the contractor.
Topic Contracts
Key Words Unjust Enrichment; Contract Implied in Law
C A S E   S U M M A R Y
Facts Development Co. leased a building for five years. Lessee assumed all responsibility for repairs, maintenance, and alterations. Lessee hired DCB to do alterations to the building that cost about $300,000. Development Co. notified DCB that it was not responsible for any of the costs; the contract was strictly with the lessee. Lessee quit paying rent, so was evicted, and failed to pay DCB for the work done. DCB sued Development Co. for unjust enrichment for the work DCB had done to the building. The trial court awarded DCB $280,000 for the work done plus interest and costs. Development Co. appealed.
Decision Reversed. A claim based on "contract implied in law" or "unjust enrichment" is not based on any contract; it is an obligation that arises not from the consent of the parties, as in the case of contracts that are express or implied in fact, but from equity. To recover, the plaintiff must show that: 1) a benefit was conferred upon the defendant; 2) defendant appreciated the benefit; and 3) the benefit was accepted by defendant under such circumstances that it would be inequitable for it to be retained without payment of its value. The mere fact that a benefit has been bestowed on Development Co., and that it appreciated the benefit, is not enough to give rise to a claim for unjust enrichment. DCB did the work for the lessee and was notified by Development Co. that it would not be held liable for any such work. There was no fraud or mistake involved. Claims in situations such as this one are nearly uniformly rejected by the courts.
Citation DCB Construction Company, Inc. v. Central City Development Co., 940 P.2d 958 (Ct. App., Colo., 1997)

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