Even Though Sports Agency Contract Void, Agent Can Recover for Unjust Enrichment

On September 4, 2015, Justice Scarpulla of the New York County Commercial Division issued a decision in Crespo v. Biyombo, 2015 NY Slip Op. 31710(U), declining to dismiss a claim for unjust enrichment.

In Crespo, the plaintiff sued to enforce a sports agency contract and for unjust enrichment to recover the monies he spent in developing the defendant's career. The court dismissed the plaintiff's breach of contract claim on the ground that the contract violated the National Labor Relations Act because it did not accord with the limitations on agency contracts in the collective bargaining agreement covering NBA players. However, the court declined to dismiss all of the plaintiff's unjust enrichment claim, explaining:

A cause of action for unjust enrichment requires a showing that: (1) the defendant was enriched, (2) at the expense of the plaintiff and (3) that it would be inequitable to permit the defendant to retain that which is claimed by the plaintiff.

. . .

At the outset, I agree with [the defendant] that Plaintiffs fail to state an unjust enrichment claim to the extent that they seek to be compensated for any services they provided in negotiating or assisting with the NBA contract. As stated above, Plaintiffs may not recover any fees related to the NBA contract because they are not certified agents with the [National Basketball Players Association].

However, Plaintiffs adequately state an unjust enrichment claim with respect to any benefits that [the defendant] unjustly retained from their investment in him as a professional athlete. . . .

Here, the allegations in the complaint and [the plaintiff's] affidavit are sufficient to state a claim for unjust enrichment. The basis of a claim for unjust enrichment is that the defendant has obtained a benefit which in equity and good conscience should be paid to the plaintiff. A claim for unjust enrichment may exist in such cases where though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff. I find that the specific circumstances alleged here may have created an equitable obligation for [the defendant] to compensate Plaintiffs for the benefits that he received from their investment in his development as a professional basketball player.

(Internal quotations and citations omitted) (emphasis added).