Court Rejects Sub’s Unjust Enrichment Claim Against City

Kegler Brown Construction Newsletter

A subcontractor performing runway work at the Cleveland airport was unable to collect from the general contractor and sued the City on an unjust enrichment theory.

The Court of Appeals for Cuyahoga County ruled that the doctrine of unjust enrichment did not apply to a municipal corporation. G.R. Osterland Co. v. Cleveland (2000) 140 Ohio App.3d 574.

The Court also pointed out that (to prevent double recovery) the subcontractor on an unjust enrichment claim can only collect from the owner when "the contractor is unavailable for judgment and the contractor is unable to pursue the owner."

The Court's decision related specifically to municipalities and did not clarify whether unjust enrichment claims can be asserted against other public owners in Ohio.

This case means that public owners will have another tool to defend unjust enrichment claims by subcontractors and that subcontractors and suppliers must carefully rely upon their mechanic's lien and payment bond rights when a contractor becomes insolvent.