*Quasi-contractual liability such as unjust enrichment may not be imposed if an express contract concerning identical subject matter will not support recovery. **So long as a valid unrestricted contract governs, the courts lack grounds for implying a promise.
Wall vs. Altium Group, LLC, No. 16-1044 (W.D. Pa., 4/30/19).
The trial court in this claim of fraudulent structured settlement annuity sale -- approximately $152,000 transferred through defendant to the entity responsible for arranging the annuity payments -- entered judgment for Plaintiffs and against defendant selling agent on plaintiffs’ breach of contract count. Because the Florida court, which had initially approved the annuity transfer, later rescinded that approval based on the annuity holder’s objection that both the transfer and the approval proceeding were a fraud on the court, plaintiffs never received any payments due them. Neither the holder of the structured settlement annuity, nor the entity from which the defendant broker purchased the annuity for plaintiffs, was a party to the action.
On appeal, the Court of Appeals reversed, finding defendant merely sold the rights to payment, but not any promise of future performance of those rights. The Court of Appeals found defendant could not be contractually responsible for the missed payments, but remanded for further consideration of plaintiffs’ unjust enrichment claim for the same loss. On remand, the Court finds under New Jersey law that, “as difficult as this decision is for disappointed and possibly defrauded investors, they do not have a claim against the broker for unjust enrichment in the face of a valid contract governing the entirety of the relationship” with defendant. According to the Court, while such claims may be alternatively pled, New Jersey law is clear that quasi-contractual liability such as unjust enrichment may not be imposed, or a promise implied, if an express contract concerning the identical subject matter – in this case, in the words of the Court of Appeals, responsibility for “delivery [to plaintiffs] of the rights to the annuity payments” – exists.
The Court further finds that, even if not precluded by express contract, the unjust enrichment claim fails on the merits because defendant, which did not receive the benefit of the amount paid for the annuity, was not in any way enriched beyond what was expressly permitted under the parties’ contract. Once again referencing the Court of Appeals decision, the Court concludes defendant agreed only “to sell a stream of payments” not “to make a stream of payments.” In so holding, the Court makes clear that it expresses no opinion on any claims plaintiffs may assert against any other party in “an appropriate forum.”
(D. Franceski: Among the many oddities of this entire matter, the Court explains in a footnote that, in exchange for the six-figure sum plaintiffs paid defendant, the parties “agreed” that the latter would “guarantee” 60 monthly payments – an undertaking one would have thought sufficient to create liability for defendant sales agent on any number of legal theories.)
(SOLA Ref. No. 2019-22-07)
NOTICE: The court decision synopsis published above represents an abbreviated description of the actual decision and is re-printed here for its educational value. The author's effort is to report concisely the substance of the decision or a selected portion of the decision; commentary or analysis is generally reserved for the italicized section at the bottom of the summary. Subscribers to SAC's Online Litigation Alert (SOLA), from which this synopsis is excerpted, have immediate access to the full decision, in addition to the synopsis.
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