Contract: Unjust enrichment claim is dismissed

Where the plaintiff alleged a man was unjustly enriched when his company failed to repay loans, but he failed to show the individual defendant directly received the funds sent to the corporate defendant, the claim was dismissed.

Background

Zhengfeng Bo asserts two counts under Virginia law against Rui Tang and ConnectChain Inc.: (1) breach of contract and (2) unjust enrichment in the alternative. In sum, plaintiff alleges that he entered into several loan agreements with defendants, and that defendants have breached those contracts and have been unjustly enriched by their failure to repay the loan. The defendants have filed a motion to dismiss.

Breach of contract

This court has previously found that plaintiff had plausibly alleged that both defendants were parties to at least one contract: ConnectChain was a party to the Acknowledgement of Debt and Tang was a party to the Repayment Plan. The court therefore denied the first motion to dismiss the breach of contract claim.

Despite the factual recitals in the amended complaint being virtually the same, defendants again seek to dismiss the breach of contract claim. Essentially, defendants are asking the court to reconsider its prior memorandum opinion and order. There is no basis to reconsider and, therefore, the court will deny the motion in this regard.

Moreover, defendants’ renewed arguments on the breach of contract claim still fail to persuade. Although perhaps plaintiff should have reasonably construed the court’s exhaustive analysis of his breach of contract claim as a suggestion that he should be clearer with respect to which contract was breached by which defendant, at this juncture, plaintiff has plausibly stated a breach of contract claim against each defendant.

Defendants’ argument that the breach of contract claim amounts to no more than threadbare recitals is unavailing and contradicted by the amended complaint. The amended complaint contains sufficient factual allegations for the court to identify who signed the Acknowledgment of Debt and who signed the Repayment Plan, the funds at stake for each contract and the deadlines each contract provided for repayment.

However, the court previously held that Tang may not be sued for the entire amount of the loan. Accordingly, the motion to dismiss will be granted to the extent that the damages recoverable against Tang are limited to the amount of the missed payments pursuant to the Repayment Plan. Otherwise, the motion to dismiss with respect to the breach of contract claim will be denied.

Unjust enrichment

Defendants argue that plaintiff fails to state a claim for unjust enrichment because there is an express contract governing the parties’ relationship. Courts in this district, applying Virginia law, have, however, recognized that “pleading unjust enrichment as an alternative to a breach of contract claim is appropriate where the validity or existence of an express contract governing the plaintiff’s claims is in dispute.”

Here, the ambiguity regarding Tang’s signature – and whether he intended to bind himself, ConnectChain or both – creates an ambiguity about whether plaintiff’s claims are governed by an express contract. Thus, plaintiff could plead an unjust enrichment claim, if plaintiff included sufficient facts from which the court could determine that such a claim is plausible. Plaintiff has not done so here.

Plaintiff has alleged, and submitted documents reflecting, that plaintiff made payments to ConnectChain, thus establishing that ConnectChain retained a benefit. But plaintiff’s allegations with respect to Tang are wholly conclusory and speculative. Plaintiff has made no allegation that Tang directly received some or all of the funds sent by plaintiff to ConnectChain. Therefore, plaintiff has not plausibly alleged that Tang received or retained any benefit. Accordingly, the unjust enrichment claim against Tang will be dismissed, this time with prejudice.

Defendants’ motion to dismiss granted in part, denied in part.

Bo v. Tang, Case No. 1:23-cv-79, Aug. 14, 2024. EDVA at Alexandria (Alston). VLW 024-3-417. 10 pp.