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Prior History: Fifth Third Bank v. Kohl's Indiana, 918 N.E.2d 371 (Ind. Ct. App. 2009) [USA], noted at 2010 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE 488.

Note: To assure completion of a shopping mall construction project including roads, bridges, and other infrastructure for Kohl's Indiana, L.P. (Retailer), Dennis Owens (Contractor) was required to provide four performance standby LCs in amounts ranging from USD 47,284.65 to USD 230,245.31 in favor of the Evansville-Vanderburgh Area Plan Commission (Local Government/Beneficiary), the governmental agency overseeing the development. At Contractor/Applicant's request, Fifth Third Bank (Issuer) issued the LCs.

When Contractor/Applicant failed to complete construction, Retailer finished the project. Retailer then sued Contractor/Applicant seeking in excess of USD 3 million in damages. As part of that litigation, Retailer sought an order requiring Local Government/Beneficiary to draw on the LCs and then assign the LC proceeds to Retailer. Retailer also asserted claims against Local Government/Beneficiary for contribution and unjust enrichment for its expenses in completing the project. Issuer was permitted to intervene and on motions for summary judgment, the Vanderburgh Circuit Court, Heldt, J., granted summary judgment in favor of Retailer. On appeal, reversed and remanded by the Court of Appeals of Indiana, Barnes, Kirsch (concurring), and Najam, JJ., in an opinion by Najam, J. in Fifth Third Bank v. Kohl's Indiana, 918 N.E.2d 371 (Ind. Ct. App. 2009), noted at 2010 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE 488.

Retailer then amended its complaint, adding the Board of Commissioners of Vanderburgh County (Local Government Board) as a defendant to its contribution and unjust enrichment claims, and, based on the appellate court's prior judgment, Retailer dismissed its claim against Local Government/Beneficiary seeking an order requiring Local Government/Beneficiary to draw on the LCs and assign the proceeds to Retailer. Local Government/Beneficiary, Local Government Board, and Retailer moved for summary judgment, and the trial court entered judgment in favor of Local Government Board and Local Government/Beneficiary. On appeal, the Court of Appeals of Indiana, Vaidik, Mathias, and Barnes, JJ., affirmed.

In its appeal, Retailer argued that the purpose of requiring the LCs was to cover the cost of completing the project should Contractor/Applicant fail to do so and that Local Government Board and Local Government/Beneficiary were thus implicitly obligated to complete the project as well. As Local Government Board and Local Government/Beneficiary were also obligated, Retailer asserted, they were liable to Retailer for their share of Retailer's expenses in completing the project. The appellate court disagreed, finding that neither Local Government Board nor Local Government/Beneficiary had a common duty to complete the project and that the trial court properly entered summary judgment in favor of Local Government Board and Local Government/Beneficiary.

In regard to the unjust enrichment claim, the appellate court stated that, among other elements, unjust enrichment requires "a benefit conferred upon another at the express or implied consent of such other party". Local Government/Beneficiary, the appellate court ruled, was not liable because Local Government/Beneficiary did not ask Retailer to complete the project. As for the Local Government Board's liability for unjust enrichment, the appellate court ruled that Local Government Board's and Retailer's rights were controlled by an express agreement thus foreclosing any claim for unjust enrichment.

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