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Birchwood Land Co. v. Krizan - 2015 VT 37, 198 Vt. 420, 115 A.3d 1009 (2015)

Rule:

Restatement (Third) of Restitution & Unjust Enrichment § 30 (2011) provides that a claim of unjust enrichment for benefits conferred on the recipient by the claimant's unrequested intervention is available only to the extent that (a) liability in restitution replaces a money obligation or spares the recipient necessary expense; (b) the recipient obtains a benefit in money; or (c) relief may be granted to the claimant by specific restitution. Restitution for voluntarily conferred benefits rarely is granted, but is available in limited circumstances where it may be achieved in a manner that avoids any forced exchange. In applying § 30(a), one consideration is that a claimant generally cannot compel the recipient to pay for benefits voluntarily conferred if, had the transaction been proposed as a contract, the recipient would have been able to reject it. § 30 cmt. b. For example, if adjacent property owners are under no obligation to make infrastructure improvements unless and until they develop their lots, a claimant who undertakes the improvements cannot recover in restitution from the benefitted recipient, even if the recipient's property value increased as a result of the improvements. § 30 cmt. b, illus. 4.

Facts:

In June 1982, defendant Judith Krizan purchased a vacant and landlocked parcel from the Town of Essex. Because the deed to Krizan's parcel made reference to a recorded plat, she acquired by law an implied access easement over the portion of the adjacent parcel, which was the sole means of access to her property. In her 30 years of ownership, Krizan made no effort to develop her property. In Dec. 2002, plaintiff Birchwood Land Company ("Birchwood") purchased the land surrounding Krizan's parcel, including the fee simple ownership of the strip of land on which Krizan's easement was located. Thereafter, Birchwood obtained approval from the Town to develop its property, including the construction and extension of an adjacent public road; Krizan's property was not included in the development approval. As part of its development, however, Birchwood extended road access and water sewer line connections to Krizan's property. In July 2007, Birchwood completed the road and infrastructure improvements at a substantial expense. After Birchwood completed the improvements, Krizan notified the Town of her intent to develop her property. The Town found that Krizan's lot was now developable because the lot was now located on a public road and was connected to the necessary infrastructure. Consequently, the value of Krizan’s property increased. Birchwood calculated that Krizan’s proportionate share of expenses for the construction and extension of the road and related infrastructure. Krizan initially expressed interest in reimbursing Birchwood for the cost of extending the sewer and water connections to her property but refused to contribute to the road and other infrastructure improvements. Thereafter, Birchwood filed a complaint against Krizan in Vermont state court, alleging that Krizan was unjustly enriched by the creation of the public road access to her lot and should be required to bear a proportionate cost of the construction. Birchwood filed a motion for attachment of Krizan's property. In response, Krizan filed a motion to dismiss for failure to state a claim. The trial court granted Krizan's motion to dismiss. Birchwood appealed.

Issue:

Was Krizan unjustly enriched by Birchwood’s construction of an access road and other infrastructure to her property?

Answer:

No.

Conclusion:

The state supreme court affirmed the trial court's judgment. The court ruled that Birchwood did not state a claim for unjust enrichment, because benefits conferred on the recipient—Krizan—by work that the claimant—Birchwood—undertook for its own benefit rarely were recoverable in restitution unless the benefits were a consequence of mistake, fraud, or compulsion, none of which were present in the case. Moreover, even assuming that Krizan held an implied easement, Birchwood’s claim failed on this ground too, as the improvements to the shared road were not necessary. The court likewise rejected the claim that Krizan's obligation to pay for the improvements arose from the implied easement that she held over the access road. The court ruled that the improvements to the road made by Birchwood were not necessary to protect Krizan's property interest, and thus she had no obligation to pay for those improvements.

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