THIS WASN’T CHILD’S PLAY
After B.R., M.K. and T.K. entered into an agreement wherein B.R. would receive 50% of a daycare center’s profits, a lease was signed with S&H Realty Corp., and B.R. provided the security deposit and a personal guaranty.
About a year later, M.K. and T.K. entered into a lease termination agreement with the property owner, B.R.’s security deposit was returned, and the personal guaranty was terminated. However, the ladies then formed new daycare companies which entered into a new lease with the landlord, effectively divesting B.R. of his right to future profits.
When B.R. filed suit, alleging (among other things) “unjust enrichment,” S&H sought dismissal of the claim brought against it. And because that request was denied by the Bronx County Supreme Court an appeal followed.
Upon its review, the Appellate Division, First Department, thought that the landlord’s motion should have been granted because all S&H received under the new lease was “rent,” and that the owner thus wasn’t “unjustly enriched” at B.R.’s expense -- particularly given that the complaint alleged that his former partners (not the landlord) wrongfully recaptured B.R.'s right to profits.
Does someone need a "time-out" here?
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DECISION