California Jury Instruction CACI 375 Restitution From Transferee Based on Quasi-Contract or Unjust Enrichment

375. Restitution From Transferee Based on Quasi-Contract or Unjust Enrichment

[Name of plaintiff] claims that [name of defendant] must restore to [name of plaintiff] [specify, e.g., money] that [name of defendant] received from [name of third party], but that really should belong to [name of plaintiff]. [Name of plaintiff] is entitled to restitution if [he/she/nonbinary pronoun] proves that [name of defendant] knew or had reason to know that [name of third party] [specify act constituting unjust enrichment, e.g., embezzled money from [name of plaintiff]].

New November 2019

Nakase Wade | California Business Lawyers & Corporate Lawyers

Directions for Use

This instruction is for use in a claim for restitution based on the doctrines of quasi­contract and unjust enrichment. Under quasi-contract, one is entitled to restitution of one’s money or property that a third party has misappropriated and transferred to the defendant if the defendant had reason to believe that the thing received had been unlawfully taken from the plaintiff by the third party. (Welborne v. Ryman-Carroll Foundation (2018) 22 Cal.App.5th 719, 725-726 [231 Cal.Rptr.3d 806].) The elements of a claim for unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. (Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238-242 [239 Cal.Rptr.3d 908].) Unlawfulness is not required.

Sources and Authority

• “ ‘ “[Quasi-contract] is an obligation . . . created by the law without regard to the intention of the parties, and is designed to restore the aggrieved party to [its] former position by return of the thing or its equivalent in money. [Citations.]” ’ The doctrine focuses on equitable principles; its key phrase is ‘ “unjust enrichment,” ’ which is used to identify the ‘transfer of money or other valuable assets to an individual or a company that is not entitled to them.’ ” (Welborne, supra, 22 Cal.App.5th at p. 725, original italics, internal citations omitted.)
• “Under the law of restitution, an individual may be required to make restitution if he is unjustly enriched at the expense of another. A person is enriched if he receives a benefit at another’s expense. The term ‘benefit’ ‘denotes any form of advantage.’ Thus, a benefit is conferred not only when one adds to the property of another, but also when one saves the other from expense or loss. Even when a person has received a benefit from another, he is required to make restitution ‘only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it.’ ” (Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51 [57 Cal.Rptr.2d 687, 924 P.2d 996], internal citations omitted.)
• “[T]he recipient of money who has reason to believe that the funds he or she receives were stolen may be liable for restitution.” (Welborne, supra, 22 Cal.App.5th at p. 726, original italics.)
• “A transferee who would be under a duty of restitution if he had knowledge of pertinent facts, is under such duty if, at the time of the transfer, he suspected their existence.” (Welborne, supra, 22 Cal.App.5th at p. 726 [quoting Restatement of Restitution, § 10].)
• “[Defendant] also errs in its claim that this matter may not be tried to a jury. The gist of an action in which a party seeks only money damages is legal in nature even though equitable principles are to be applied. As appellant argues, this is an express holding of Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 728 [91 Cal.Rptr.2d 881].” (Welborne, supra, 22 Cal.App.5th at p. 728, fn. 8, internal citation omitted.)
• “[U]njust enrichment is not a cause of action. Rather, it is a general principle underlying various doctrines and remedies, including quasi-contract.” (Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 911 [81 Cal.Rptr.3d 503], internal citation omitted.)
• “Unlike a claim for damages based on breach of a legal duty, appellants’ unjust enrichment claim is grounded in equitable principles of restitution. An individual is required to make restitution when he or she has been unjustly enriched at the expense of another. A person is enriched if he or she receives a benefit at another’s expense. The term ‘benefit’ connotes any type of advantage. [H Appellants have stated a valid cause of action for unjust enrichment based on [defendant]’s unjustified charging and retention of excessive fees which the title companies passed through to them.” (Hirsch v. Bank of America (2003) 107 Cal.App.4th 708, 721-722 [132 Cal.Rptr.2d 220], original italics, internal citations omitted.)
• “Although some California courts have suggested the existence of a separate cause of action for unjust enrichment, this court has recently held that ‘ “[t]here is no cause of action in California for unjust enrichment.” [Citations.] Unjust enrichment is synonymous with restitution. [Citation.]’ ” (Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138 [117 Cal.Rptr.3d 262], internal citation omitted.)
• “California law on unjust enrichment is not narrowly and rigidly limited to quasi-contract principles, as defendants contend. ‘[T]he doctrine also recognizes an obligation imposed by law regardless of the intent of the parties. In these instances there need be no relationship that gives substance to an implied intent basic to the “contract” concept, rather the obligation is imposed because good conscience dictates that under the circumstances the person benefited should make reimbursement.’ ” (Professional Tax Appeal, supra, 29 Cal.App.5th at p. 240, original italics.)
• “Finally, plaintiff’s complaint also stated facts that, if proven, are sufficient to defeat a claim that defendants were bona fide purchasers without notice of plaintiff’s claim. ‘[A] bona fide purchaser is generally not required to make restitution.’ But, ‘[a] transferee with knowledge of the circumstances surrounding the unjust enrichment may be obligated to make restitution.’ [f| For a defendant to be ‘ “without notice” ’ means to be ‘without notice of the facts giving rise to the restitution claim.’ ‘A person has notice of a fact if the person either knows the fact or has reason to know it. [f] . . . A person has reason to know a fact if [f] (a) the person has received an effective notification of the fact; [f] (b) knowledge of the fact is imputed to the person by statute . . . or by other law (including principles of agency); or [f] (c) other facts known to the person would make it reasonable to infer the existence of the fact, or prudent to conduct further inquiry that would reveal it.’ ” (Professional Tax Appeal, supra, 29 Cal.App.5th at p. 241, internal citations omitted.)

Secondary Sources

1 Witkin, Summary of California Law (11th ed. 2017) Contracts, § 1050 et seq.

12 California Forms of Pleading and Practice, Ch. 121, Common Counts, § 121.25 (Matthew Bender)