Restitution as a Cause of Action in New York

Restitution is a legal claim rooted in fairness. In New York, a plaintiff may bring a restitution claim when someone else has received money from them and it would be unfair for that person to keep it. This type of claim is not based on a contract, but rather on the principle that one person should not benefit at another’s expense when it would go against equity and good conscience.

The Defendant Received Money from the Plaintiff

To succeed in a restitution claim, the plaintiff must first show that the defendant received money from them. This means there was a direct transfer of funds. It can happen in many ways, such as under pressure or based on an arrangement that later breaks down. Regardless of how the transfer occurred, the key question is whether money changed hands between the plaintiff and the defendant.

The law focuses on the relationship between the parties and whether the plaintiff was the source of the funds. If there is no connection between the plaintiff’s loss and the defendant’s gain, restitution may not apply.

It Would Be Unjust for the Defendant to Keep the Money

Once the transfer of money is established, the plaintiff must show that it would be unfair for the defendant to keep it. Courts use terms like “equity” and “good conscience” to express this idea. The goal is not to punish the defendant, but to prevent an unfair result.

This unfairness does not depend on bad intent. A person can act in good faith and still be required to return money if keeping it would be unjust. For example, if someone pays in advance for something that is never delivered, and the other party keeps the money despite knowing the transaction failed, a court may find that restitution is appropriate.

Each case depends on its facts. Courts ask whether letting the defendant keep the money would result in a windfall or an outcome that contradicts fairness and basic decency.

Conclusion

Restitution is a powerful tool for correcting unfair outcomes in financial transactions. In New York, a person can bring this claim when someone else receives money from them and keeping it would violate principles of fairness. By focusing on the transfer of money and the unjust nature of its retention, restitution ensures that people are not allowed to profit at another’s expense when equity demands otherwise.

Find the Law

“To establish a cause of action for restitution, Plaintiff must establish defendants received money from the plaintiff that in good conscience and equity the defendant should not be permitted to retain. Wiener v. Lazard Freres Co.,241 AD2d 114 (2nd Dept. 1998); and Bello v. New England Financial, 3 Misc 3d 1109 (A) (Sup.Ct. Nassau Co. 2004).” Hamlet on Olde Oyster Bay Home Owners v. Holiday Org., 2006 N.Y. Slip Op. 51378 (N.Y. Sup. Ct. 2006)