A 2012 Court of Appeals decision did not change the pleading standard for unjust enrichment claims, a unanimous Appellate Division, First Department panel ruled Tuesday.
Justice Rolando Acosta (See Profile) wrote for the panel in Philips International Investments v. Pektor, 651526/11, joined by Justices Peter Tom (See Profile), Richard Andrias (See Profile), Helen Freedman (See Profile) and Paul Feinman (See Profile).
In the underlying dispute, the plaintiff, Philips International Investments LLC, entered into an agreement with a couple, Louis and Lisa Pektor, to buy a portfolio of commercial properties. The agreement fell through, but Philips later learned that the Pektors had purchased the properties themselves. Philips then sued the Pektors for unjust enrichment, among other claims.
Manhattan Supreme Court Justice Eileen Bransten (See Profile) denied the Pektors’ motion to dismiss the unjust enrichment claim. A month later, the Court of Appeals handed down its decision in Georgia Malone & Co., Inc. v. Rieder, 19 NY3d 511, finding that to plead a claim of unjust enrichment, a plaintiff must plead a relationship with the defendant such that it would be unfair for the defendant to retain a benefit.
The Court of Appeals itself was divided about the meaning of the decision. Justice Jonathan Lippman (See Profile) said in a dissent that the majority had raised the standard for pleading unjust enrichment, requiring a mutual relationship between the parties that was not required before. The majority, however, said that it was merely clarifying the law (NYLJ, June 29, 2012).
Nevertheless, the Pektors moved to renew their motion to dismiss, claiming that Georgia Malone had raised the pleading standard.
Bransten denied that motion and the First Department affirmed. Acosta wrote that Georgia Malone “merely clarified existing law.”
The Pektors are represented by Edward Phillips, a member of Keane & Beane.
Philips is represented by Russell Penzer, a partner at Lazer, Aptheker, Rosella & Yedid, and Giuseppe Franzella, an associate at the firm.