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Thursday, November 15, 2012 02:43 am


Contracts -- Unjust Enrichment

Tantara Corp. v. Bay Street Neighborhood Assoc., 2012 R.I. Super. Lexis 155 (Oct. 4, 2012)

A subcontractor failed to force property owners to foot the bill for extra work, which a bankrupted contractor had left unpaid.

EnviroLogic, LLC (EnviroLogic) was the prime contractor on a $2-million job to remediate soil contamination on several properties in Tiverton, Rhode Island. EnviroLogic hired subcontractor Tantara Corporation (Tantara) to perform remedial excavation and property restoration work for $850,000. During the work, EnviroLogic refused Tantara's request for a change order to account for every ton of soil excavated over the amount the subcontract called for. EnviroLogic eventually declared bankruptcy and stopped work, having paid Tantara for work performed up until that point. Tantara subsequently brought "additional soil" unjust enrichment claims against the owners for work performed on their properties.

Privity not required to bar claims

In their motion for summary judgment, the owners argued that unjust enrichment claims are disallowed where a valid contract--here, the EnviroLogic-Tantara subcontract--governs the subject matter of the claim. Importantly, the court permitted this argument even though the owners were not party to that subcontract. The court stated: "The defendants can still use the Subcontract to bar Tantara's unjust enrichment claims because privity is not required to preclude an unjust enrichment claim." According to the ruling in Granite Partners, L.P. v. Bear, Stearns & Co. Inc., 17 F. Supp. 2d 275, 311 (S.D.N.Y. 1998), the unjust enrichment remedy is unavailable when there's an enforceable contract, "whether the contract is one between the parties to the lawsuit, or where one party to the lawsuit is not a party to the contract."

Next, the owners argued that the su [...]

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