Can unjust enrichment claims survive when express contracts exist between other parties? E&M Sales West v. Bechtel Jacobs Company Explained

In complex commercial relationships involving multiple contracts and subcontracts, practitioners often face the challenge of pursuing unjust enrichment claims when their client lacks direct contractual relationships with the party that received the benefit. The Utah Court of Appeals addressed this issue in E&M Sales West v. Bechtel Jacobs Company, providing important guidance on when such claims can survive summary judgment.

Background and Facts

E&M Sales West (Heatsource) was a subcontractor in a chain involving the U.S. Department of Energy environmental cleanup project. Bechtel Jacobs contracted with Diversified Metal, which subcontracted with Diversified Control, which then contracted with Heatsource to produce a specialized heater. When the first heater failed testing, Heatsource alleged that a Bechtel Jacobs representative promised that if they produced a replacement heater meeting higher temperature specifications, “the money truck [would] back[] up to the building” and Bechtel would “take care” of Heatsource. After Heatsource built the second heater, which Bechtel accepted and used, no payment was forthcoming.

Key Legal Issues

The central issue was whether Heatsource’s unjust enrichment claim against Bechtel Jacobs was barred by the existence of express contracts between other parties covering the same subject matter. Generally, unjust enrichment is only available when legal remedies have been exhausted, and express contracts typically preclude such equitable claims.

Court’s Analysis and Holding

The Court of Appeals reversed the summary judgment on the unjust enrichment claim, applying the correctness standard to legal conclusions while viewing factual disputes in the light most favorable to the nonmoving party. The court held that even where express contracts exist, an unjust enrichment claim may be viable if based on separate representations or misleading acts arising independently of those contracts. Key factors included: (1) material disputes about whether Bechtel’s representative made separate payment promises, and (2) disputes about whether the temperature specifications in Heatsource’s original contract differed from those required for the second heater.

Practice Implications

This decision emphasizes the importance of carefully developing the factual record regarding representations made outside the four corners of existing contracts. Practitioners should focus on identifying material factual disputes about separate agreements, representations, or misleading statements that distinguish the unjust enrichment claim from the subject matter of existing contracts. The court’s analysis also highlights that even indirect contractual relationships don’t automatically bar unjust enrichment claims when separate inducements to perform exist.