Clark Office v. MCM Capital Partners
249 Md. App. 307
| Md. Ct. Spec. App. | 2021Background:
- Clark (landlord) leased Suite 1300 to MCM Capital Partners, LLLP (Tenant) for a five-year term ending Jan. 31, 2020.
- Tenant stopped paying rent beginning Jan. 1, 2018; Clark delayed declaring default while Tenant sought to resolve finances.
- Unknown to Clark, Tenant allowed MCM Capital, LLC and Alta Realty Co., LLC (Occupants) to occupy part of the premises Jan–Mar 2018 without Clark’s consent; no written sublease or evidence of payment to Tenant was introduced.
- Clark retook possession late March 2018, sued Tenant for breach of lease (recovering damages at trial), and sued Occupants for restitution/unjust enrichment for the value of their use Jan–Mar 2018.
- The trial court entered judgment for Clark against Tenant but granted judgment for Occupants on the unjust enrichment claim, reasoning the lease covered the same subject matter and alternatively that Occupants were subtenants not in privity with Clark.
- Clark appealed as to Occupants only; the Court of Special Appeals affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an express lease between landlord and tenant bars landlord’s unjust enrichment claim against a nonparty occupant for the same subject matter (rent/use). | Clark: Dashiell’s bar applies only when the unjust-enrichment parties are the same as the contract parties; Occupants were strangers, so Clark may seek restitution. | Occupants: The lease’s coverage of the same subject matter bars the claim even against nonparties; section 110/Third Restatement principles limit recovery. | Court: No absolute bar when plaintiff is a contracting party and defendant a stranger, but here Clark’s claim fails as a matter of law because (1) Clark did not confer the benefit on Occupants (Tenant did), and (2) retention was not unjust because Clark recovered the same value via judgment against Tenant. |
| Whether Occupants were subtenants (versus trespassers). | Clark: Finding of subtenancy was clearly erroneous—no written sublease and no evidence of a sublease. | Occupants: Oral subleases are valid; evidence supports a three-month subtenancy. | Court: Trial court’s finding of an oral sublease/subtenancy is supported by the record; but whether subtenants or trespassers, Clark’s restitution claim still fails. |
Key Cases Cited
- County Comm’rs of Caroline Cnty. v. J. Roland Dashiell & Sons, Inc., 358 Md. 83 (Md. 2000) (express contract covering subject matter generally bars unjust-enrichment claim between the contract parties)
- Hill v. Cross Country Settlements, LLC, 402 Md. 281 (Md. 2007) (elements of unjust enrichment: benefit conferred, defendant’s knowledge, inequitable retention)
- Bennett Heating & Air Conditioning, Inc. v. Nationsbank, 342 Md. 169 (Md. 1996) (limits on restitution in three-party situations; benefit to third party may be nonunjust)
- Raymond, Colesar, Glaspy & Huss, P.C. v. Allied Capital Corp., 961 F.2d 489 (4th Cir. 1992) (a contracting party may recover in unjust enrichment against a nonparty where the nonparty induced or accepted the benefit)
- Lincoln Land Co., LLC v. LP Broadband, Inc., 408 P.3d 465 (Idaho 2017) (recovery denied where plaintiff did not confer benefit on defendant; benefit came from tenant)
- Abraham v. WPX Energy Production, LLC, 20 F. Supp. 3d 1244 (D.N.M. 2014) (Third Restatement §25 limits restitution against third parties when plaintiff has a viable contract remedy against the contracting party)