Summary
Fifth Circuit (2021) held that under Texas law, unjust enrichment is not an independent cause of action, so remand for a money-had-and-received claim did not also encompass a separate unjust‑enrichment claim. The court further affirmed summary judgment based on the unclean-hands defense, finding no abuse of discretion in the district court’s balancing of equities, and rejected the appellant’s argument that summary judgment violated the Seventh Amendment right to jury trial for actions at law.
Topics
Practice areas
Questions Presented
- Whether the district court erred in concluding that the prior appeal remanded only a money had and received claim and not a separate unjust enrichment claim.
- Whether the district court erred in granting summary judgment on the money had and received claim based on the unclean hands defense.
Holdings
- The prior appeal only remanded a money had and received claim; unjust enrichment is not an independent cause of action under Texas law.
- The district court did not abuse its discretion in weighing the equities and finding that Midwestern's conduct gave rise to the unclean hands defense, and summary judgment was proper.
Key quotations
“Our opinion expressly stated that we 'only reinstate [Midwestern Cattle’s] money had and received claim.'” (2)
“Indeed, our opinion expressly distinguished the conceptual 'theory' of unjust enrichment from an 'independent claim' under Texas law for money had and received.” (2)
“Even for actions at law, the Supreme Court has long held that 'summary judgment does not violate the Seventh Amendment.'” (3)
“Our decision in the first appeal held that, when considering summary judgment on an unclean-hands defense, a district court should weigh the equities by 'balancing plaintiff’s errors of omission or commission against the defendant’s unjust acts.'” (3-4)
Factual background
Midwestern gave Tony Lyon, a convicted felon, access to its checkbook and signature stamp. Lyon deposited checks to the Lyons' account at Legend Bank. Legend Bank extended credit to the Lyons based on the belief that the checks were authorized. Midwestern later sought to recover funds from Legend Bank.
Procedural history
The case was previously appealed and the Fifth Circuit affirmed in part, reversed in part, and remanded for further proceedings on a money had and received claim and a constructive trust remedy. On remand, the district court conducted further proceedings and entered summary judgment against Midwestern. Midwestern appeals.
Remand instructions
None.