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COA rules on unjust enrichment issue for first time

April 29, 2011

For the first time, the Indiana Court of Appeals addressed an issue involving express contracts and equitable remedies and decided that the existence of a contract, in and of itself, doesn’t preclude equitable relief which isn’t inconsistent with the contract.

In Steven A. Coppolillo v. Anthony Cort, No. 45A05-1007-PL-433, Steven A. Coppolillo, a chef at Zuni’s Restaurant, negotiated to purchase Anthony Cort’s ownership in Zuncor, which owned the restaurant. While making monthly payments to Cort, the restaurant property was sold and the restaurant closed shortly after because Zuncor didn’t establish a new location for the restaurant after the lease ended. Coppolillo lost his investment in Zuncor and sued Cort for unjust enrichment.

Cort argued that the claim is barred because Cort sold his share in Zuncor to Coppolillo pursuant to a written agreement, so any remedy must be sought under the contract rather than in equity. Senior Judge Betty Barteau noted that other jurisdictions have determined that when an express contract doesn’t fully address a subject, a court of equity may impose a remedy to further the ends of justice.

The evidence shows that the parties’ payment arrangements for Cort’s share of Zuncor aren’t fully controlled by their agreement, so the contract doesn’t preclude the claim in equity against Cort of unjust enrichment.

Regarding Coppolillo’s claim, the judges found there to be a material dispute of fact as to whether Cort was unjustly enriched, so he isn’t entitled to summary judgment as a matter of law as the trial court had ruled. They also rejected Cort’s claim that Coppolillo isn’t entitled to equitable relief because Coppolillo has unclean hands.

Judge Barteau wrote there is at best a dispute of fact as to whether Coppolillo engaged in wrongdoing when he ended his relationship with Zuncor and took a job in Chicago, even though Zuncor continued to operate two other restaurants.

The judges reversed the trial court’s grant of summary judgment to Cort and remanded for further proceedings.

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