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3028 CONTRACTS IMPLIED IN LAW (UNJUST ENRICHMENT)

This case involves a claim based upon alleged unjust enrichment.

The elements of unjust enrichment are: (1) a benefit conferred upon the defendant by

the plaintiff; (2) knowledge or appreciation of the benefit by the defendant; and (3)

acceptance and retention by the defendant of such benefit under such circumstances that it

would be unfair for him or her to retain it without paying the value thereof.

It is not necessary to prove that the recipient of the benefit was at fault or guilty of

wrongdoing in any way, but it must be established that, as between the parties, it would be

unfair for the recipient to retain the benefit without paying the reasonable value of the

benefit.

A benefit to the defendant may be (services rendered for (defendant)) (goods or

merchandise received by (defendant)) (improvements to (defendant)’s real estate) (money

paid to (defendant) or someone else on (defendant)’s behalf).

A loss to the plaintiff without an actual benefit to the defendant is not recoverable as

unjust enrichment.

If a person declines in advance a benefit to be conferred by another, then the person

conferring the benefit may not recover for unjust enrichment.

[It is not a defense to the action that (defendant) is a minor or otherwise incompetent

to make a contract, but a minor may show that in equity and good conscience, (plaintiff) is

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not entitled to recover in whole or in part.]

[In this case, (plaintiff) has alleged fault or wrongdoing on the part of (defendant)

(fraud) (duress) (nonperformance or breach of contract), which is elsewhere in these

instructions defined for you. The burden of proof is on (plaintiff) to establish wrongdoing

by (defendant).]

COMMENT

This instruction was originally approved by the Committee in 1979 and revised in 2015, 2020, and

2021. This revision was approved by the Committee in May 2023.

In cases where an unjust enrichment claim is based on contributions made by one party for the benefit

of another, the unjust enrichment claim must demonstrate that viewed in their entirety, the contributions

were made to a “joint enterprise” in which the parties were mutually engaged, and which resulted in an

accumulation of wealth that a party had unfairly retained. See Sands v. Menard, 2017 WI 110, ¶43, 379

Wis.2d 1, 904 N.W.2d 789.

“A claim for unjust enrichment may exist when two people work together or when two people combine

assets for defendant’s benefit.” See Lawlis v. Thompson, 137 Wis.2d 490, 493, 405 N.W.2d 317 (1987).

Knowledge of Benefit. When the benefit conferred can be easily returned, like money, for example,

the benefited party need not have knowledge or appreciation of the gain at the precise time it is conferred.

Instead, the party asserting an unjust enrichment claim satisfies the knowledge or appreciation element by

proving that the benefited party had knowledge of or appreciated the benefit at a time that provided the

party a fair opportunity to choose whether to accept or reject that benefit. Buckett v. Jante, 2009 WI App.55,

316 Wis.2d 804, 767 N.W.2d 376.

Subject matter covered in contract and alternative claims. If the parties entered into a valid,

enforceable contract and the subject matter of that contract covers the aspects of a plaintiff’s unjust

enrichment claim, the doctrine of unjust enrichment does not apply. Mohns, Inc. v. BMO Harris Bank, 2021

WI 8, ¶48, 395 Wis. 2d 421, 954 N.W.2d 339. See also Continental Cas. Co. v. Wisconsin Patients Comp.

Fund, 164 Wis. 2d 110, 118 473 N.W.2d 584.

However, under the “total business relationship exception,” Wisconsin law allows a party to seek

equitable relief for a conferred benefit if it “falls outside the scope of the parties’ contractual relationship.”

Meyer v. Laser Vision Inst., LLC, 2006 WI App 70, 290 Wis. 2d 764, 781, 714 N.W.2d 223, quoting

Northern Crossarm Co., Inc. v. Chemical Specialties, Inc., 318 F.Supp.2d 752).

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In addition, a party may plead claims for relief in the alternative, such as claiming both breach of

contract and unjust enrichment, even if these claims are inconsistent. If a contract is found to exist, the

plaintiff may recover under the contract but not in equity, as the law prohibits awarding both legal and

equitable damages based on the same conduct. See Mohns, supra, at ¶¶52-53.

If a contract is determined to exist, and the jury awards damages for breach of the contract, any award

for damages based on unjust enrichment must be set aside. Allowing both awards to stand would create a

legal paradox, as a contract cannot simultaneously exist and not exist. Consequently, a plaintiff may recover

the amount awarded for breach of contract but cannot recover for unjust enrichment or receive punitive

damages. See Mohns, supra, at ¶48.

Preventing overlapping damages: crafting a special verdict form. Since the law prohibits awarding

both legal and equitable damages based on the same conduct, it is essential to design a special verdict form

that prevents overlapping damages. As emphasized in Mohns, a verdict form may incorporate questions

regarding both breach of contract and unjust enrichment, but unjust enrichment damages are only

permissible if the jury finds no contract existed. See Mohns, supra, at ¶54.

Issue triable of right by a jury. Recovery based on unjust enrichment is sometimes referred to as an

action for “quasi contract,” Watts v. Watts, 137 Wis.2d 506, 530-531, 405 N.W.2d 303 (1987). This

doctrine has been well-recognized and long-accepted as part of Wisconsin law since 1844. See Rogers v.

Bradford, 1 Pinney Wis. 418 (1844). Quasi-contracts are legal obligations in the sense that they originated

in the courts of law and are enforced by legal remedies. Graf v. Neith Co-op. Dairy Products Association,

216 Wis. 519, 257 N.W. 618, 619 (1934). See also Arjay Investment Co. v. Kohlmetz, 9 Wis.2d 535, 539,

101 N.W.2d 700 (1960), Watts, supra, at 530, and Lawlis, supra, at 496. Because actions on the theory of

quasi-contract are actions at law, they are triable as of right to a jury. See State v. Schweda, 2007 WI 100,

¶20, 303 Wis.2d 353, 736 N.W.2d 49 (2007).

Deceptive advertising and unjust enrichment. In cases where an unjust enrichment claim is based

on allegations of deceptive or misleading advertising, the plaintiff must demonstrate that the advertisement

contained deceptive or misleading statements in violation of the relevant advertising laws, such as WIS.

STAT. § 100.18(1) and (9). See Meyer v. Laser Vision Inst., LLC, 2006 WI App 70, 290 Wis. 2d 764, ¶7,

714 N.W.2d 223. The mere presence of profit motives or commission-based sales representatives does not

automatically lead to a finding of unjust enrichment or violation of advertising laws. See Meyer, supra, at

¶11.