Minnesota Supreme Court Rules on Unjust Enrichment Measure of Damages

Herlache and Rucks began a romantic relationship around February 2012. At the time, Rucks owned a home in Sunfish Lake. Herlache moved in shortly thereafter. Upon moving in, Herlache noticed the home required several repairs. Herlache gave Rucks $282,736.02 to renovate and repair the home. Herlache asked Rucks to document his portion of the financial contributions, but Rucks refused to do so. She promised to repay Herlache. Herlache inquired about adding his name to the title, but Rucks remained the sole owner.

Around December 2018, Rucks’s and Herlache’s relationship ended. Herlache subsequently sued Rucks for unjust enrichment, quantum meruit, and replevin to recover the $282,736.02 he advanced towards home renovations. During the pendency of the suit, Rucks sold the home for $1.2 million.

The district court awarded Herlache $282,763.02, representing payments Herlache made to Rucks to improve the home reduced for an amount for “rent” Herlache would have been required to pay to Rucks.

The court of appeals reversed, and determined Herlache could not recover because his claim involved an investment in real property, and that required him to prove the increase in value to Rucks’s home that was directly attributable to his contribution.

The Minnesota Supreme Court reversed and held the net amount Herlache contributed to the improvement of the home was an appropriate measure for unjust enrichment. The Court reasoned that the measure of unjust enrichment is based upon what the enriched party has received, not on what the opposing party has lost. The loss to Herlache, however, was equal to the benefit conferred to Rusks as it was the same amount that was paid directly to her or on her behalf to improve her home. Thus, the district court’s award was proper as it would not be equitable for Rucks to keep the proceeds of the sale without reimbursing Herlache.

Herlache v. Rucks, 990 N.W.2d 443 (2023).