Corporate Attorney Unjust Enrichment Defense Victory

The client was the chief executive officer of a Washington DC registered franchising corporation overseeing brand management, franchise recruitment, marketing coordination, and centralized supply logistics across multiple jurisdictions. 

The corporation entered into standardized franchise agreements with individual operators, establishing a framework for royalty payments, advertising contributions, and shared operational expenses. 

While the master agreement set baseline payment categories, certain percentage allocations were refined over time through operational practice and mutual understanding, a structure commonly accepted in mature franchise systems. 

For several years, franchisees complied with this payment model without objection, and the system functioned without recorded disputes or claims of unjust enrichment.

Following the expiration of the franchise agreement, a former franchisee initiated a civil action before a court of competent jurisdiction in the District of Columbia, asserting that the franchisor had retained excessive advertising fees and royalties over a five year period.

The plaintiff alleged that these payments exceeded what was contractually justified and therefore constituted unjust enrichment under DC law, seeking restitution of approximately USD 420,000 in previously paid amounts. 

Importantly, the plaintiff did not dispute the existence of the franchise agreement itself, but argued that certain fee calculations were inconsistent with its terms, an approach that attempted to recharacterize a contractual dispute as an unjust enrichment claim.

The corporate advisory attorney first emphasized that under Washington DC law, unjust enrichment claims are generally barred where an express and enforceable contract governs the subject matter of the dispute.

Because the challenged payments were made pursuant to a valid and enforceable franchise agreement, the attorney argued that the plaintiff could not bypass contract remedies by reframing the claim as unjust enrichment. 

Financial records, executed agreements, and contemporaneous settlement statements were introduced to demonstrate that each payment corresponded to contractual obligations, thereby negating any allegation of benefit obtained without legal cause.

In addition, the attorney presented evidence showing that the disputed fee structure had been applied consistently for years with the plaintiff’s full knowledge and voluntary compliance. 

Under District of Columbia law, such sustained performance supports the existence of implied consent and reinforces contractual interpretation through course of dealing. 

The defense highlighted that the plaintiff had continued operations, renewed marketing campaigns, and benefited from brand support while making the same payments now challenged as unjust enrichment, a contradiction that significantly weakened the plaintiff’s credibility.

After reviewing the evidentiary record and legal submissions, the court concluded that the payments at issue were made pursuant to an existing contractual relationship and therefore could not constitute unjust enrichment under District of Columbia law. 

The court further noted that the plaintiff’s long term acquiescence to the payment structure undermined any claim that the franchisor retained funds without legal justification. 

As a result, the court dismissed the unjust enrichment claim in its entirety, relieving the corporate client of any restitution liability and reaffirming the primacy of contract based analysis in Washington DC commercial litigation.