Friday, July 19, 2013

"Money Had and Received" claim in debt suit pleadings

Money Had and Received? - What is that supposed to mean?  

This is an oddly phrased common-law theory that allows a plaintiff to sue for the return of money that was received by someone who was not entitled to it. Like other common-law theories and remedies that are equitable in character, the judicial precedents upon which this legal theory rests do not allow it to be used for collection of a debt that represents money advanced or disbursed as a loan, or credit extended based on a contract or formal agreement.

If pleaded in a credit card debt suit, this theory may therefore be attacked as nonapplicable under the express-contract preclusion of equitable claims.


A cause of action for money had and received is not premised on wrongdoing, but looks only to the justice of the case. The critical issue is whether the defendant has received money which rightfully belongs to another. Such an action may be maintained to prevent unjust enrichment when a party obtains money which in equity and good conscience belongs to another. In short, it is an equitable doctrine applied to prevent unjust enrichment.

To prove a claim for money had and received, the plaintiff must show that a defendant holds money which in equity and good conscience belongs to the plaintiff. In defending against such a claim, a defendant may present any facts and raise any defenses that would deny a claimant's right under this theory.
Generally, when a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory.

The quasi-contractual action for money had and received is a cause of action for a debt not evidenced by a written contract between the parties.


Because a credit card collection suit is always based on an underlying contract between lender and cardholder that specifies interest rate and other terms, money had and received is not a proper theory of recovery for collection of a debt incurred on a credit card.

That does not mean that debt collection attorneys do not invoke their theory in pleadings

See sample from pleading filed by Mark Rechner, a debt collection attorney with VINCENT LOPEZ SERAFINO JENEVEIN, P.C. in Dallas, in petition on behalf of Wells Fargo Bank NA:

This blawg post on money had and received as a legal theory of recovery in Texas was last modified or updated on March 14, 2014; January 21, 2014.


Money Had and Received claim under Texas law (caselaw snip)

A money had and received claim is "`equitable in nature'" and "`belongs conceptually to the doctrine of unjust enrichment.'" Fowler v. U.S. Bank Nat'l Ass'n, 2 F. Supp. 3d 965, 983 (S.D. Tex. 2014) (Lake, J.) (quoting Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007), and Edwards v. Mid-Continent Office Distribs., L.P., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied)). To establish a claim for money had and received, Bryant must show that the "defendants hold money which in equity and good conscience belongs to him." Id. at 983.

Under Texas law, unjust enrichment "characterizes the result of failing to make restitution or benefits received under circumstances giving rise to an implied or quasi-contract." TransAmerica Natural Gas Corp. v. Finkelstein, 933 S.W.2d 591, 600 (Tex. App.—San Antonio 1996, writ denied). The purpose for the claim is to prevent unconscionable loss to the payor and unjust enrichment to the payee. Bryan v. Citizens Nat'l Bank in Abilene, 628 S.W.2d 761, 763 (Tex. 1982). An unjust enrichment claim "is based on quasi-contract and is unavailable when a valid, express contract governing the subject matter of the dispute exists." Coghlan v. Wellcraft Marine Corp., 240 F.3d 449, 454 (5th Cir. 2001) (applying Texas law); see also Finkelstein, 933 S.W.2d at 600.

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