What Are the Advantages and Disadvantages of Allowing An Award of Damages Based Upon Theory of Unjust Enrichment ?
In Developers Three v. Nationwide Ins. Co. (1990), 64 Ohio App.3d 794, 582 N.E.2d 1130, defendants bought and developed property to which plaintiff had held an option to purchase.
Plaintiff sued upon a theory of tortious interference with a business contract and claimed that, irrespective of the amount of its actual loss, it was entitled to recover, under a theory of unjust enrichment, the amount of defendants' profits that were derived from the development.
In fact, plaintiff "explicitly disclaimed a measure of damages based upon its lost profits or lost expectancy," and, instead, sought to recover defendants' entire gross profits. Id. at 797.
Defendants, however, argued that plaintiff did not have the same ability as defendants to develop the property and, therefore, plaintiff's recovery of defendants' profits would not be appropriate because plaintiff's actual loss was much less than defendants' gain. Id. at 797-798.
In Developers Three, the court considered at length the pros and cons of allowing an award of damages based upon a theory of unjust enrichment.
Ultimately, the court held that it was "reluctant to abandon a purely compensatory damage formula unless policy and precedent clearly support an unjust enrichment theory of recovery." Developers Three at 801.
In determining that damages awarded upon a theory of unjust enrichment was not the best method for calculating plaintiff's damages, the court noted that in tortious interference cases "the plaintiff frequently has lost more than the defendant has gained, and sometimes the defendant has gained more than the plaintiff has lost." Id.,