Unjust enrichment exists when one person is allowed to profit at another’s expense without making restitution for the reasonable valuable of any profit or services that have been unfairly received or retained.
The most common example of this is if two parties enter into an understanding for services to be rendered but there is no contract. Then, one party prematurely terminates that contract, and the other party is never reimbursed for their partial services that were rendered under the contract.
In Minnesota, to establish a claim for unjust enrichment, a claimant must show that another party knowingly received something of value to which he or she was not entitled and that the circumstances are such that it would be unjust for that person to retain the benefit. An action for unjust enrichment is not simply one party benefitting from the actions of another; the aggrieved party must show that the other party was unjustly enriched. “Unjustly” can be defined as “illegally or unlawfully.”
In the case of Schumacher v. Schumacher, a Minnesota Court of Appeals case from 2001, plaintiff Dan Schumacher and his wife and two daughters moved to Finland, Minnesota to operate a business named the Trestele Inn. Daniel Schumacher’s parents, who were the defendants in the case, owned the Inn.
Daniel Schumacher claims that his parents induced him to leave his job, to move to Finland, Minnesota to operate the bar in exchange for their promise leave the business and a parcel of land to him when the first one of his parents passes away. Daniel Schumacher was never paid a salary for managing the Trestele Inn, but was allowed to take all of the profits from the business as his compensation. Four years after Daniel Schumacher took over managing the inn, he found out his parents were planning on selling the inn and the adjoining property that he believed was promised to him.
Daniel Schumacher brought a cause of action against his parents alleging among other things, unjust enrichment. The court of appeals overturned the district court’s ruling granting summary judgment in favor of the defendants stating that Daniel Schumacher had shown evidence that he had made improvements to his parent’s land, that his parents knew of those improvements, and either encouraged him or failed to discourage him to make such improvements, and that his parents had benefitted from the improvements to the land. In other words, the court found Daniel Schumacher’s parents had benefitted or were unjustly enriched by the efforts of Daniel Schumacher when he relied on the agreement that he believed was enforceable.