019 Equity - Tn

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Maxims:***********

Back 1

1. Equity will not suffer a (w)rong without a remedy.
2. Equity (a)cts in personam.
3. Equity (f)ollows the law.
4. Equity is (e)quality.
5. Equity regards (s)ubstance over form.
6. Equity regards as done what (o)ught to be done.
7. Equity disfavors (f)orfeitures.
8. One who (s)eeks equity myst do equity.
9. One who (c)omes in equity must come with clean hands.
10. Equity (a)ids the diligent and the vigilant.

Front 2

Equity will not suffer a wrong without a remedy

what is an adequate remedy?

Back 2

Equity will fashion a remedy for a wrong.
PECC
An adequate remedy at law is one which is as certain, practical, complete, and efficient to attain the ends of justice and its administration as the remedy in equity. Santee Cooper Resort.

Front 3

Equity acts in personam, not in rem

Back 3

Equity acts only in personam not in rem.

"A court of equity, having authority to act upon the person, may indirectly act upon real estate in another state through the instrumentality of this authority over the person." Thornton v. Thornton

Exception: especially when ownership of real estate is called into question. Court concluded that it has equitable power to decree specific performance for a buyer, notwithstanding the lack of jurisdiction over the vendor.

Thus court followed one maxim(equity will fashion a remedy for a wrong) by ignoring another (equity acts only in personam)

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Equity Follows the Law

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Equity is not brought into play unless the legal remedy is "inadequate". and often equity will elect to follow a legal remedy when it exists and when it is adequate to the situation.

"Equity must yield in the face of an unambiguously worded statute"

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Equity is Equality

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Court of equity often seeks to secure equality among persons who are equally obligated or who are equally entitled to claim a benefit or share in a fund. i.e. contribution/apportionment

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Equity regards as done what ought to be done

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The court regards as done that which, in fairness and good conscience, ought to be or should have been done.

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Equity regards substance rather than form

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Equity, when appropriate, ignores technicalities. Equity looks to the substance rather than the shadow and seeks justice rather than technicalities.

Front 8

Equity disfavors forfeitures

Back 8

forfeitures or penalties are not favored in either law or equity

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One who seeks equity must do equity

Back 9

can override both express and implied contracts.

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One who comes into equity must come with clean hands

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FUD

a litigant may be denied relief on the ground that their conduct has been inequitable, unfair, dishonest, or fraudulent.

often basis basis for unclean hands defense.

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Equity aids the diligent and the vigilant

Back 11

Equity does not aid those who sleep on their rights.

Basis for equitable defense of laches.

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Ex parte Dibble*******

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Courts have the inherent power to do all things reasonably necessary to insure that just results are reached to the fullest extent possible.

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Inherent Equitable Power of Contempt

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equitable remedy sometimes used when (1) a party has been previously ordered to do something i.e. injunction OR (2) is ordered to do something (i.e. return property) and refuses to do so.

Also contempt is an equitable power designed to protect the inherent power of the court itself.

Courts have the inherent power to punish for offenses that are calculated to obstruct, degrade, and undermine the administration of justice

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COntempt of court--types

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a witness that fails to obey a subpoena, without sufficient cause or excuse, is guilty of contempt.

The court has inherent to punish this failure to appear by either fine or imprisonment.

Even the termination of the underlying case does not destroy the power of the court to punish the witness.

1. Civil
2. Criminal
3. Compensatory
4. Direct
5. Indirect (constructive)

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Sanctions available for deliberately introducing a forgery into a depo

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1. SJ for innocent party
2. Criminal Contempt for forger
3. Civil contempt for forger
4. citation for direct contempt
6. restraining order
7. granting D costs and atty fees.

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Parole board v. Contempt of court

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Parole board has no authority to interfere with courts inherent equitable power of contempt

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Civil Contempt

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contempt order to bring a party "in line" with a prior order. i.e. child support. Abatable when party complies with the prior order i.e. party pays child support

a person in civil contempt "holds the keys to his own jail cell"

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Criminal contempt

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designed to punish persons(fine or imprisonment) for a period of time and are normally not abatable.

even if party repents or changes his mind he still must ordinarily serve time or pay fine

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Compensatory Contempt

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money award for a π when D has injured π by violating a previous court order

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Direct contempt

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contemporaneous conduct takes place right in court or is deemed to be something that takes place in front of a judge i.e. depo

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Indirect contempt(Constructive contempt)

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contemporaneous conduct that takes place outside the presence of a judge and thus would normally call for a hearing to hear the evidence of what happened and why it happened. p.9

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Limitations

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Before a person can be held in contempt, the record must be CLEAR and SPECIFIC as to the acts upon which such finding is based. If order is unclear, then person cannot be punished for failing to follow its dictates.

-constitutional right to jury: when court leaves realm of immediately sanctioned direct contempt

-If fines are extremely significant, party is entitled to jury trial i.e. fines totaling 52 mill

-normally a criminal contemptor cannot be sentenced to more than 6 months in prison.

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Equitable Defenses

Back 23

As a general rule, any equitable remedy (and even some legal remedies i.e. estoppel?) can be defeated by a proper and appropriate equitable defense.
1. Unclean hands
2. Laches
3. Judicial Estoppel
4. Equitable Estoppel

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Unclean Hands*****

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1. INEQUITABLE conduct by π(limited to conduct of parties themselves and not the conduct of others)
2. related directly to the SUBJECT MATTER of the litigation
3. and causes PREJUDICE or injury to the defendant

based on the maxim that one who seeks equity must do equity

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Laches*****

Back 25

Equity's answer to legal defense of SOL.
"undue lapse in time connected with negligence and opportunity to have acted sooner"
Laches may be asserted if a party has unreasonably delayed, in the assertion of an equitable claim, so as to result in prejudice to the ∆ bc of the delay in filing the claim.

Elements typically may include:

1. Delay (key is "what was reason for the delay" if fair, sound reason, then laches not necessarily an equitable defense.)
2. Unreasonable length under the circumstances
3. that prejudices the defendant

e.g. π loses K to competitor. Knowing that the competitor is incurring expenses and detrimentally changed its position, π waits too long to bring action. time to protect barred by laches

unsuccessful example:

A gives B option to repurchase family property at time "convenient" to B. 13 years later B exercises option. bc B was poor for 8 of the 13 years and failure to exercise option did not prejudice A b.c property was tied to market value.

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Laches--mitigating factors

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Minority--laches does not necessarily arise against a person during his minority

Settlements--delays cause by bona fide attempts to settle legal claims may not constitute laches

Delay caused by the very party raising the defense

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Laches--things to consider

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1. facts of the case
2. sound discretion of lower court
3. specifics of each party
4. public policy

Front 28

Estoppel AS to party being estopped π:**************

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1.misstatement or action by π
2. reliance by ∆
3. injury to defendant

1. Conduct which is calculated to convey the impression that the facts are inconsistent with those which the party subsequently attempts to assert

2. Intention or an expectation that such conduct may be acted upon by the other party

3. Actual or constructive knowledge of the true facts.

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Estoppel as to party asserting estoppel ∆******

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1. Lack of knowledge or means to know the true facts
2. Reasonable reliance on the conduct of the other party AND
3. change of position to the extent that this party would be prejudiced or injured if not permitted to raise this equitable defense

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[un]Successful estoppel example

Back 30

modest repayment of $25 per month suggested that delay did not cause prejudice.

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Exceptions to equitable estoppel

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Equitable estoppel is not always an available defense when substantial public interests or important public rights are involved in a particular case.

1. No estoppel can grow out of dealings with public officers of limited authority, and doctrine of Equitable estoppel cannot ordinarily be invoked to defeat a municipality in the prosecution of its public affairs bc of an error or mistake of its officers or agents

exception to exception: where officers act within their proper scope of authority, and the party claiming Equitable estoppel has reasonably acted in good faith.

2. Statute enacted for public's benefit cannot be basis for estoppel bt the parties.

3. ? p. 17

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Judicial Estoppel*********

Back 32

1. 2 inconsistent positions taken by the same party or parties in privity with one another
2. positions must be taken in same or related proceedings involving the same party or parties in privity with each other
3. party taking the position must have been successful in maintaining that position and have rec'd some benefit AND
4. inconsistency must be part of an intentional effort to mislead the court
5. ANd the 2 positions must be totally inconsistent

e..g. one party takes a position that mistreats both the other party and the court. Buckley v. Shealy p.18

Front 33

Equitable Remedies

Back 33

1. injunctive Relief
2. Specific Performance
fill in rest.

Front 34

Injunctive Relief--def. types

Back 34

A court order commanding or preventing an action. complainant must show:
(1) there is no plain, adequate, and complete remedy at law and
(2) that an irreparable injury will result unless the relief is granted.

**failure to follow the court order can lead to contempt


1. TRO
2. Temporary or Preliminary Injunction
3. Permanent Injunction

Front 35

TRO--basics

Back 35

can be granted ex parte.
available in highly unusual conditions(when it is absolutely necessary to preserve the status quo until a preliminary injunction hearing may be had)
-automatically expire in 10 days unless extended after a hearing
-party subject to TRO may move upon days notice, or such shorter time as the court grants, to vacate the TRO.

Front 36

Temporary or Preliminary injunctions

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-equitable order granted after notice and hearing.
-either preserves the status quo until conclusion of proceeding, when either:
1. a permanent injunction may be entered, or the case is dismissed, or the court concludes that damages or other appropriate remedy may be appropriate or it decrees that something should be done--pending a full trial on the merits after discovery and so on.

Front 37

Rule 65

Back 37

see p. 21

Front 38

Permanent Injunction-noncompete agreement

Back 38

equitable remedy after a full trial.
i.e covenant no to compete

1. Necessary for protection of legitmate interest of the employer

2. reasonable in time and place

3. not unduly harsh and oppressive in curtailing efforts of the employee to earn a livilihood

4. reasonable from the standpoint of sound public policy

5. supported by valuable consideration

Front 39

Parties bound by an injunction

Back 39

only:
1. parties to the action
2. their officers, agents servants, or employees,
3. attorneys
4. those "in active concert or participation with them who receive actual notice of the order by personal service or otherwise"

Front 40

Relief from injunction

Back 40

a party may seek relief from an injunction in trial court if it is no longer equitable for the judgment to have continuing prospective application.

Front 41

Specific Performance

Back 41

π must satisfy prereqs:
1. (P)laniiff should have performed the bargain.
2. (E)quities should have favored granting specific performance.
3. (N)o legal adequate remedy.
4. (C)ontract at issue should be clear, definte, & certain. [critical requirement]

critical ?: when are damages an inadequate legal remedy
5. (L)egally binding the K should be.

Front 42

when are damages an inadequate legal remedy

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money damages are adequate where the subject matter of the K is something for which a ready market presently exists. BUT

where no market exists, the subject matter is unique, purpose of the K in non-economic, damages may very well be inadequate.

-real estate K's unless K contains a condition precedent which had not been satisfied.

-unique chattels

-heirlooms

-close corp. stock

-output and requirements Ks
-personal services

Front 43

Specific Performance--practicality

Back 43

SP may be refused if enforcement of the decree would impractical.

Factors include:

1. difficulty of framing an appropriate order
2. necessity of judicial supervision for complex or continuous activities for a protracted period of time.

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Rescission

Back 44

an abrogation or undoing of a K from the beginning, which seeks to recreate the prior situation as if no K ever had existed.

Courts do not like to rescind Ks unless there is: 1. substantial breach or 2. actual fraud

exceptions: breach is unintentional or not substantial enough to totally undo the transaction or parties cannot equitably be returned to the status quo

Front 45

Equitable reformation

Back 45

terms of writing that purports to integrate a prior agreement between the 2 parties are at variance with the intention or agreement of the parties, reforming the instrument to express the intention of the parties may be possible.

usually the variance between the intention and writing integrating the prior agreements is a result of scrivener's error. When evidence of the drafting error is clear and convincing, and particularly when the mistake is mutual, reformation is a distinct possibility

e.g. successful. both insuracnce agent and insured agreed that coverage amount was a mistake, reformation of the policy to provide for agreed amount was permitted.

e.g. unsuccessful

p.337

Front 46

Resulting Trusts

Back 46

express trust is created when owner of property(settlor) vests legal title or property in one person (trustee) for the use and benefit of another (beneficiary).
Express trust rests on manifest intention of the parties to create a beneficial interset in the property and equity gives effect to the trust to carry out the express intention of teh parties

By contrast a resulting trust arises out of operation of law.
-may be proven by parol evidence instead of written documents
-there may even be a presumption of a resulting trust

When real estate conveyed to one person, but consideration is paid by another, a rebuttable presumption that there is a resulting trust may arise.

This presumption may be rebutted based upon a showing of the actual intent of the parties to the transaction. When the conveyance is to a spouse or a child, or to any other person for whom the purchaser is under a legal obligation to provide, a presumption of a resulting trust is not necessarily authorized.

see practice question on p.31-32.

Front 47

Equitable Lien

Back 47

1. a debt
2. a duty or obligation owing from one person
3. a res to which the obligation attaches, which can be described with reasonable certainty AND
4. An intent, express or implied, that the property serve as security for the payment or obligation

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Accounting

Back 48

Equity will often compel one standing in a fiduciary relationship to a plaintiff to account for income or profits recd in a fiduciary capacity or in breach of a fiduciary duty.

-wrongful appropriation of corporate opportunity by a corporate officer
-unfair trade competition
-∆ has profited from use of a constructive trust

Front 49

Unjust enrichment

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1. benefit conferred by π upon the ∆
2. Realization of the benefit by the ∆
3. Retention of the benefit by the ∆ under circumstances that make it inequitable for him to retain it without paying its value. Myrtle Beach

1. Has there been enrichment? i.e. has one person gained money, assets, or something of value that another person never really intended to confer?

2. Has the enrichment been unjust?
not all enrichment is unjust or wrongful

3. Is there a defense?

Front 50

doctrine of tracing

Back 50

see p. 34

Front 51

Declaratory Judgment

Back 51

see p. 35

Front 52

Equitable Indemnification

Back 52

π must prove:
1. Indemnitor was liable for causing π's damages
2. Indemnitee was exonerated from any liability for those damages
3. Indemnitee suffered damages as a result of the π's claims against it., which were eventually proven to be the fault of the indemnitor.

Front 53

Quiet Title

Back 53

action to remove a cloud on and to quiet title to land

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Partition

Back 54

action in equity

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foreclosure

Back 55

action in equity