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Unjust Enrichment - Affirmative Defense

Pentagon Federal Credit Union v. McMahan, [Ms. 1180804, May 8, 2020] __ So. 3d __ (Ala. 2020). In a plurality opinion, the Court (Mendheim, J.; Bolin, Sellers, and Stewart, JJ., concur; Shaw, Bryan, and Mitchell, JJ., concur in the result; Parker, C.J., dissents; Wise, J., recuses) reverses the Baldwin Circuit Court’s judgment on stipulated facts in an action concerning surplus proceeds of a post-foreclosure sale of a residence.

The central question was whether PenFed was entitled to deduct from the sale proceeds the $91,256 PenFed paid to settle Wells Fargo’s first mortgage on the plaintiff’s residence. Ms. *6. The circuit court concluded that PenFed had waived its defense of unjust enrichment by failing to include it in its responsive pleading. Ms. *8. The opinion rejects this conclusion, explaining

This Court cannot find any authority characterizing the doctrine of unjust enrichment as an affirmative defense. Accordingly, PenFed did not waive the defense of unjust enrichment by failing to plead it in its responsive pleadings. Instead, PenFed raised the argument to the circuit court at trial and in its trial brief; the argument was properly before the circuit court. Cf. GreenTree Acceptance, Inc. v. Blalock, 525 So. 2d 1366, 1369 (Ala. 1988) (holding that a trial court may even consider an argument raised for the first time in a postjudgment motion).

Ms. *11.

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