The partnership defendants appeal from an order of the Supreme Court, New York County (Eileen Bransten, J., ) entered June 11, 2013, which denied their motion to renew so much of their prior motion as sought to dismiss the unjust enrichment claim as against them.
Keane & Beane, P.C., White Plains (Edward J. Phillips of counsel), for appellants.
Lazer, Aptheker, Rosella & Yedid, P.C., Melville (Russell L. Penzer and Giuseppe Franzella of counsel), for respondent.
Peter Tom, J.P., Rolando T. Acosta, Richard T. Andrias, Helen E. Freedman, Paul G. Feinman, JJ.
The extent of the relationship between parties to support the equitable remedy of unjust enrichment has been the focus of several recent Court of Appeals cases. The latest of these cases, Georgia Malone & Co., Inc. v Rieder (19 N.Y.3d 511 ), held that although a plaintiff is not required to allege privity, the pleadings must "assert a connection between the parties that [is] not too attenuated" (id. at 517). At issue in this case is whether Georgia Malone changed the law on unjust enrichment sufficient to support a motion to renew pursuant to CPLR 2221. Specifically, one month after the motion court denied that portion of defendants' motion to dismiss the unjust enrichment claim, the Court of Appeals decided Georgia Malone. The appealing defendants contend that Georgia Malone made clear for the first time that, in order to state a claim for unjust enrichment, a plaintiff must plead facts sufficient to show a relationship between itself and the defendant that would make the retention of the enrichment unjust or inequitable. Plaintiff argues that prior cases, in particular Mandarin Trading Ltd. v Wildenstein (16 N.Y.3d 173, 182-183 ) and Sperry v Crompton Corp. (8 N.Y.3d 204, 215-216 ), each discussed in Georgia Malone, demonstrate that the proposition was the law of New York prior to Georgia Malone. As such, Georgia Malone was not a change in the law. We agree with plaintiff.
The law of unjust enrichment was not changed by Georgia Malone. Rather, the Court, by engaging in a detailed discussion of the relevant cases, merely added clarity to the law, which Court of Appeals cases often do. Accordingly, the motion court properly denied defendants' motion to renew the portion of their motion that sought dismissal of the unjust enrichment claim. In any event, plaintiff properly alleged a "relationship between the parties that could have caused reliance or inducement" to support an unjust enrichment claim (id. at 517 [internal quotation marks omitted]).
Plaintiff investment company entered into a joint venture with defendants Louis and Lisa Pektor to purchase a portfolio of commercial properties from nonparty Liberty Property. During due diligence, plaintiff discovered that one of the properties had a critical flaw that made its purchase or inclusion in the sale unviable. The venture then entered into discussions with Liberty to purchase the remaining properties (the viable properties). The deal with the venture did not go forward. Subsequently, however, plaintiff learned that the Pektors had created a series of limited partnerships (the partnership defendants) to act as vehicles to purchase the viable properties from Liberty, cutting the venture out of the transaction.
Plaintiff brought suit against, inter alia, the Pektors and the partnership defendants. The complaint included a claim for unjust enrichment against the partnership defendants. All defendants moved to dismiss. The motion court granted the motion to dismiss in part, and granted leave to amend to replead the dismissed claims. One of the claims that was not dismissed was the unjust enrichment claim against the partnership defendants.
Approximately one month after the court's denial of dismissal of the unjust enrichment claim, the Court of Appeals handed down Georgia Malone. There, the Court stated that a plaintiff alleging unjust enrichment must plead some relationship with the defendant sufficient to give rise to a finding that retention of the benefits are unjust (19 N.Y.3d at 519).
The partnership defendants moved to renew, arguing that Georgia Malone changed the law, which justified renewal (and excused their failure to make this argument on the original motion to dismiss). They also argued that were Georgia Malone applied to the complaint here, the unjust enrichment claim would have to be dismissed. Plaintiff opposed, arguing that Georgia Malone did no more than restate, albeit more clearly, settled precedent of the Court of Appeals on precisely this issue. The court denied the motion to renew and we now affirm. We agree with plaintiff that Malone merely clarified existing law.
Indeed, a review of Sperry v Crompton Corp. (8 N.Y.3d 204 ), Mandarin Trading Ltd. v Wildenstein (16 N.Y.3d 173 ), and Malone clearly indicate that the Court in Malone was merely restating that a plaintiff must plead some relationship between the parties that could have caused reliance or inducement and that the relationship cannot be too attenuated. In Sperry, the plaintiff — the representative for a putative class action —- asserted antitrust claims against the manufacturers of chemicals for tires, claiming that the chemical manufacturers' price inflation was passed on by the tire manufacturers to consumers. The plaintiff also asserted unjust enrichment claims against the chemical makers.
The Court dismissed the unjust enrichment claim for lack of any allegation of a connection or relationship between the chemical maker and the plaintiff:
"While we agree with Sperry that a plaintiff need not be in privity with the defendant to state a claim for unjust enrichment, we nevertheless conclude that such a claim does not lie under the circumstances of this case. Here, the connection between the purchaser of tires and the producers of chemicals used in the rubber-making process is simply ...