Valid Lease Terms Displace Unjust Enrichment, and Retaliatory Eviction Requires Proof That Retaliation Was the Landlord’s Primary Motive

Introduction

Chong v. Durkin addresses two recurring landlord-tenant issues: when an eviction becomes unlawfully retaliatory and when a tenant may recover the value of improvements left on leased property. Chong International Corporation sought to evict Daniel Durkin after his lease expired and after he reported conditions behind the apartment complex that resulted in a zoning violation and fine.

Durkin asserted retaliatory eviction as an affirmative defense. He also counterclaimed for unjust enrichment, alleging that Chong would unfairly retain renovations he had paid for. The Superior Court rejected both claims, finding that Chong sought possession to renovate and combine the third-floor units rather than to retaliate, and that the lease expressly allocated the costs and ownership of tenant improvements.

The Supreme Court affirmed. Its principal rules are that retaliation must be the landlord’s primary motive—meaning it must outweigh permissible motives—and that unjust enrichment ordinarily is unavailable when a valid contract governs the same subject.

Factual and Procedural Background

• Durkin rented a third-floor apartment in Chong’s Saipan complex.
• The lease prohibited alterations and improvements without Chong’s prior written consent, placed ordinary repair costs on Durkin, and provided that tenant improvements would become the landlord’s property.
• Durkin made aesthetic renovations before an Emergency Housing Voucher inspection, although the inspector later advised him that the work had been unnecessary.
• After the lease expired in November 2023, Durkin remained in possession.
• In early 2024, he reported trash, vegetation, and deteriorated shipping containers behind the property. The report led to a zoning violation and fine.
• After Chong removed the containers, it gave Durkin a 30-day notice to vacate, stating that the third floor would be renovated.
• The Superior Court found that Chong’s purpose was to convert the third floor into a single apartment and denied Durkin’s retaliatory-eviction defense and unjust-enrichment counterclaim.

Summary of the Opinion

The Supreme Court affirmed both challenged rulings.

Retaliatory Eviction

Because the CNMI had no controlling statute or customary law governing the claim, the Court applied the Restatement of Property under 7 CMC § 3401. A tenant must prove that the landlord was primarily motivated by the tenant’s protected complaint. An improper motive that merely accompanies stronger legitimate motives is insufficient.

Although the notice to vacate followed closely after the zoning cleanup, the trial court had considered that timing together with Durkin’s history of complaints, Chong’s lack of earlier retaliation, testimony about the intended renovation, and other evidence presented during a five-day trial. The Supreme Court held that the finding of a nonretaliatory business motive was not clearly erroneous.

Unjust Enrichment

The Court held that Durkin could not use unjust enrichment to avoid the lease’s express terms. The agreement prohibited unauthorized improvements, assigned ordinary repair costs to Durkin, and stated that improvements would remain with the landlord. Because the contract governed the same subject and Durkin did not show that its provisions were invalid or inapplicable, equity did not require Chong to reimburse him.

Analysis

1. Governing Law and Standards of Review

Under 7 CMC § 3401, the CNMI applies common law as expressed in the Restatements when no relevant statutory or customary law exists. The Court therefore relied on the Restatement framework for retaliatory eviction and restitution.

A landlord’s motive is a factual issue reviewed for clear error. Under Pangelinan v. Pangelinan, 2024 MP 5, and Commonwealth v. Crisostomo, 2014 MP 18, reversal is warranted only when the appellate court has a firm and definite conviction that a mistake occurred.

The denial of equitable relief is reviewed for abuse of discretion. Xiaodong Tang v. Xuan Guo, 2025 MP 11, relying on Pangelinan v. Itaman, 4 NMI 114 (1994), supplied that standard. Ishimatsu v. Royal Crown Ins. Corp., 2010 MP 8, further explains that abuse exists when a decision rests on clearly erroneous facts, an erroneous legal conclusion, or an improper application of law to fact.

2. Retaliatory Eviction

The Restatement test

Restatement (Second) of Property: (Landlord and Tenant) § 14.8 permits retaliatory eviction to be raised as a defense where:

1. A protective housing statute embodies a public purpose of assuring proper housing conditions;
2. The landlord is in the business of renting residential property;
3. The tenant is not materially in default;
4. The landlord acts primarily because the tenant complained about a violation of the protective statute; and
5. The tenant’s complaint was made in good faith and with reasonable cause.

The decisive element was motive. The tenant bears the ultimate burden of proving that retaliation was the landlord’s primary motivation. The Court clarified that an improper motive must outweigh all permissible motives; proof that retaliation played some role is not enough.

Application to Chong’s motive

The trial court credited Chong’s stated plan to combine the third-floor apartments. That explanation corresponded with several Restatement factors indicating a legitimate motive: reasonable business judgment, a good-faith desire to make a different use of the property, and the landlord’s failure to retaliate at earlier opportunities despite Durkin’s repeated complaints.

Temporal proximity supported Durkin’s theory but was not conclusive. The court placed the recent notice within the broader history of the parties’ relationship and found that the final complaint was not the primary cause of the eviction.

Appellate deference to fact-finding

The Court relied on Fitial v. Kyung Duk, 2001 MP 9, and United States v. Durham, 464 F.3d 976 (9th Cir. 2006), for the rule that appellate courts do not reweigh evidence or reassess credibility. Islam v. Islam, 2009 MP 17, likewise recognizes that resolving conflicts and drawing factual inferences belong to the trial court.

Pillow v. State, 986 N.E.2d 343 (Ind. Ct. App. 2013), quoting Lock v. State, 971 N.E.2d 71 (Ind. 2012), reinforces that fact-finding remains reserved to the factfinder. Anderson v. Bessemer City, 470 U.S. 564 (1985), explains both the institutional cost of duplicating trial-level fact-finding and the strong deference owed to coherent, facially plausible testimony.

Consistently, Vill. Commons, LLC v. Marion Cnty. Prosecutor’s Off., 882 N.E.2d 210 (Ind. Ct. App. 2008), asks whether facts or reasonable inferences support the findings. In re Estate of Yong Kyun Kim, 2001 MP 22, and Adams v. Fan Chen, 830 Fed. Appx. 727 (5th Cir. 2020), indicate that crediting a coherent and internally consistent witness is virtually never clear error, although objective evidence may expose an otherwise protected credibility finding.

Here, Durkin and Gab Du gave conflicting accounts of a conversation concerning his complaints. Neither version was corroborated, and both were internally plausible. The trial court’s choice between them therefore could not be disturbed under clear-error review.

Role of the prior-complaint history

James v. Victoria House, Inc., 386 Fed. Appx. 122 (3d Cir. 2010), was particularly instructive. There, a tenant alleging retaliation had to rebut evidence of legitimate motives, including his persistent complaints and lease violations. Failure to rebut those motives was fatal to the defense. Similarly, Durkin’s long history of complaints without earlier retaliation supported the inference that the latest complaint was not the primary reason for eviction.

The Court also rejected the argument that conflicting testimony about the number of other third-floor tenants established clear error. Chong did not have to remove all tenants simultaneously to pursue an eventual conversion. Under Commonwealth v. Shu Jie Tian, 2019 MP 9, an inconsistency in one part of a witness’s testimony does not by itself invalidate an otherwise supported finding.

3. Unjust Enrichment

Elements of the claim

Under Syed v. Mobil Oil Marianas Islands, Inc., 2012 MP 20, unjust enrichment requires:

1. The defendant was enriched;
2. The enrichment occurred at the plaintiff’s expense; and
3. Equity and good conscience oppose allowing the defendant to retain the benefit.

Even if Chong received a benefit from the renovations, the third element was absent because the lease expressly governed the parties’ rights concerning alterations, costs, and ownership.

Contractual displacement of restitution

Guldseth v. Family Med. Assoc. LLC, 45 F.4th 526 (1st Cir. 2022), and Clapp v. Goffstown Sch. Dist., 977 A.2d 1021 (N.H. 2009), establish that unjust enrichment generally is unavailable when a valid contract defines the parties’ obligations concerning the same subject. Associated Mgmt. Servs. v. Ruff, 424 P.3d 571 (Mt. 2018), similarly treats the contract as displacing court-created restitutionary obligations.

Beck v. Dimar, 554 P.3d 130 (Mt. 2024), provided a close analogy. A party who constructed a bridge could not obtain restitution from other easement holders because the easement agreement assigned construction expenses to the person undertaking the work unless a written cost-sharing agreement existed. Likewise, Durkin’s lease allocated improvement costs and ownership in advance.

Guldseth v. Family Med. Assoc. LLC also illustrates that a later written contract may foreclose an unjust-enrichment theory based on an alleged earlier oral promise. Contracting parties’ expressed allocation of rights takes priority over generalized equitable expectations.

Recognized limits on the contract rule

The Court acknowledged that unjust enrichment can remain available at the margins of a contractual relationship:

• Falconi-Sachs v. LPF Senate Square, LLC, 142 A.3d 550 (D.C. 2016), permitted a potential restitution claim involving money retained under an invalid contractual penalty.
• James G. Davis Constr. Corp. v. FTJ, Inc., 841 S.E.2d 642 (Va. 2020), recognized that a contract limited to other matters did not necessarily govern later direct payments and assurances.

Those exceptions did not apply. Durkin did not establish that the lease was invalid, limited to unrelated matters, or modified by later conduct promising reimbursement.

Landlord liability for tenant improvements

DCB Constr. Co. v. Central City Dev. Co., 965 P.2d 115 (Colo. 1998), held that a landlord generally is not unjustly enriched by improvements commissioned by a tenant unless the landlord engaged in improper, deceptive, or misleading conduct. Wang Elec., Inc. v. Smoke Tree Resort, LLC, 283 P.3d 45 (Ariz. Ct. App. 2012), adopted the same principle: property owners do not become responsible for tenant-contracted improvements merely because they benefit from them.

Durkin could not reasonably expect reimbursement because the lease prohibited improvements without prior written consent, assigned repair expenses to him, and expressly provided that improvements would remain with Chong. The alterations were aesthetic rather than necessary for safety, and no written consent or subsequent promise of reimbursement was shown.

4. Waiver of Undeveloped or Late-Raised Arguments

Relying on Commonwealth v. Calvo, 2014 MP 10, the Court declined to consider inadequately developed arguments. Durkin did not sufficiently develop an objection involving another tenant’s testimony, and his claim that he was unjustly enriched through the loss of housing assistance appeared only in his reply brief and had not been raised below. Both matters were therefore waived.

Potential Impact

• Retaliation requires comparative proof of motive: Tenants must show that retaliation outweighed the landlord’s legitimate business reasons, not merely that protected activity and eviction occurred close together.
• Timing remains relevant but is not dispositive: Courts must evaluate temporal proximity alongside the parties’ broader history and evidence of nonretaliatory motives.
• Trial-level credibility findings receive substantial deference: Appeals based principally on conflicting testimony will rarely succeed without objective evidence contradicting the accepted account.
• Lease drafting is decisive: Clear provisions governing consent, improvement costs, and ownership can foreclose later restitution claims.
• Equity does not rewrite valid contracts: Unjust enrichment remains available principally where the contract is invalid, inapplicable, incomplete on the relevant subject, or altered by later conduct.
• The decision does not immunize landlords: A tenant may still prevail by proving that retaliation was the primary motive or that the landlord induced improvements through deceptive conduct or enforceable assurances.

Complex Concepts Simplified

Affirmative defense

A legal reason why the plaintiff should not prevail even if the basic allegations are otherwise established. Durkin used retaliatory eviction as a defense to Chong’s possession claim.

Primary motive

The most important or predominant reason for acting. Retaliation must outweigh the landlord’s legitimate reasons.

Clear error

A highly deferential appellate standard. A factual finding is reversed only when the reviewing court is firmly convinced that a mistake occurred.

Abuse of discretion

A decision based on clearly mistaken facts, incorrect law, or an improper application of law to the facts.

Unjust enrichment

An equitable remedy requiring a person to return or pay for a benefit that it would be unjust to retain.

Contractual displacement

The principle that a valid contract governing a subject ordinarily replaces default equitable remedies concerning that same subject.

Restatements

Scholarly formulations of common-law principles. In the CNMI, they may supply governing law when no relevant statute or customary law applies.

Waiver

Loss of an argument because it was not timely raised or sufficiently developed.

Conclusion

Chong v. Durkin establishes that a retaliatory-eviction defense requires proof that retaliation was the landlord’s predominant motive, not simply one possible motive suggested by suspicious timing. It also confirms that unjust enrichment cannot ordinarily override a valid lease expressly assigning the costs and ownership of tenant improvements.

The decision strengthens deference to trial-court credibility findings, reinforces the tenant’s burden on retaliatory motive, and gives controlling effect to clear contractual allocations of risk. The judgment denying both Durkin’s defense and counterclaim was therefore affirmed.