Remedies

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LEGAL REMEDIES in Tort

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Damages: D is ordered to pay money to P (compensatory, nominal, punitive).

Damages are based on the harm to the P. REQUIREMENTS:

1) CAUSATION (Actual Cause)

2) FORESEEABILITY (Proximate Cause)

3) CERTAINTY (Damages cannot be too speculative)

4) UNAVOIDABILITY (P must take reasonable steps to mitigate damages).

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Form of Judgment in Tort

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The judgment must be a single lump sum payment that will be discounted to present value without taking inflation into account (except under the modern rule).

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Nominal Damages in Tort

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These are awarded where P has NO ACTUAL INJURY. They serve to establish or to vindicate the P's rights.

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Punitive Damages in Tort

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These are awarded to PUNISH the D. There are 3 rules to satisfy:

1) In order to get punitive damages, P must first have been awarded compensatory or nominal damages;

2) D's type of fault must be greater than ordinary negligence; and

3) Punitive damages are awarded in an amount relatively proportionate to actual damages (As actual damages go up, punitive damages go up; SC would limit damages to a single digit multiple of actual damages unless facts are extreme).

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Restitutionary Remedies

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These remedies are based on the theory that the D should not be UNJUSTY ENRICHED.

Restitutionary remedies are based on the BENEFIT to the D, and the amount is calculated based on the value of the benefit.

TYPES:

LEGAL:

a) Restitutionary Damages

b) Replevin

c) Ejectment

EQUITABLE:

d) Constructive Trusts

e) Equitable Liens

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Replevin

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P recovers possession of specific personal property.

Requires a 2 part test:

1) The P has a right to POSSESSION; and

2) There is a WRONGFUL WITHHOLDING by D.

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Ejectment

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P recovers possession of specific REAL property.

Requires a 2 part test:

1) The P has a right to POSSESSION; and

2) There is a WRONGFUL WITHHOLDING by D.

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Replevin: Recovery

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Plaintiff can recover the chattel BEFORE the trial.

(a) Plaintiff will have to post a BOND.

(b) Defendant can defeat an IMMEDIATE recovery by posting a RE-DELIVERY BOND (the D can then keep the chattel until after the trial).

NOTE: Replevin is almost always coupled with DAMAGES.

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Constructive Trust

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A constructive trust is imposed on improperly acquired property to which D has TITLE. D serves as "trustee" and must return the property to the P.

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Equitable Lien

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Imposed on improperly acquired property to which D has TITLE. Property will be subject to an immediate court-directed sale. The monies received go to the plaintiff. If the proceeds of the sale are LESS than the FMV of the property when it was taken, a deficiency judgment will issue for the difference and can be used against the D's other assets.

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RULES for Constructive Trusts & Equitable Liens

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1) Inadequate legal remedy alternative (show why $ won't work):
--D is insolvent; or
--For Constructive Trusts: the property is unique.

2) Tracing is allowed.

3) BFPs prevail over the P.

4) P will prevail over unsecured creditors.

*If the property value subsequent to taking goes UP, go with a constructive trust.

**If the property value subsequent to taking goes DOWN, go with an equitable lien.

***When D's property CANNOT be traced solely to P's property, only an equitable lien is available.

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Injunctive Relief (Equitable Remedy)

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D is ordered (enjoined) to do or refrain from doing something.

PERMANENT INJUNCTION: Issued AFTER a full trial on the merits.

TEMPORARY INJUNCTION: Issued PENDING a trial on the merits.

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Temporary Injunction (and TROs)

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To obtain a temporary injunction, P must meet a 2 part test:

1) Irreparable Injury (discuss facts in time frame context)

2) Likelihood of Success (discuss the probability/likelihood of success).

The test for a TRO is IDENTICAL, but:

--No notice is required.
--Adversarial proceeding is not required.

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Permanent Injunctive Relief: Inadequate legal remedy

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1st step: P must show legal remedies are inadequate.

1st Alternative: REPLEVIN is inadequate.
--the sheriff may not be able to recover it
--the D filed a redelivery bond

2nd Alternative: EJECTMENT inadequate.
--The sheriff may refuse to act (think small encroachment)

3rd Alternative: MONEY DAMAGES are inadequate.
--They're too speculative
--D is insolvent
--Irreparable injury
--Avoiding a multiplicity of actions

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Permanent Injunctive Relief

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P must meet a 5 part checklist:

1) Inadequate Legal Remedy Alternative

2) Property Right / Protectable Interest

3) Feasibility of Enforcement
a. Negative Injunction
b. Mandatory Injunction

4) Balancing of Hardships

5) Defenses

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Negative Injunction

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Order D to stop doing what he's doing.

No enforcement problems.

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Mandatory Injunction

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When a P wants the court to affirmatively order the D to act.

May be an enforcement problem based on (i) the difficulty of supervision, or (ii) concern with effectively ensuring compliance.

Examples:
--Involves application of great taste, skill, or judgment --> Injunction DENIED.
--A series of acts over a period of time --> Injunction DENIED.
--An out of state act is required; Resident D --> Injunction GRANTED; Non-resident D --> Injunction DENIED.

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Permanent Injunctive Relief: Balancing of Hardships

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P's benefits vs. D's hardship if relief is granted.

There must be a gross disparity between D's detriment and P's benefit.

Even then, there will be NO balancing if D's conduct was WILLFUL.

NOTE: If you decide to balance hardships, consider awarding P money damages.

NOTE: Hardship to the PUBLIC is also taken into account.

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Defenses to Permanent Injunctive Relief

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A. UNCLEAN HANDS (defense only available if P's alleged improper conduct is RELATED to the lawsuit).

B. LACHES (concerned with the EFFECT of the passage of time)

C. IMPOSSIBILITY (impossible for D to carry out the terms of the injunction).

D. FREE SPEECH (if the tort is defamation or a privacy publication breach, DENY the injunction on free speech grounds).

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Laches (Defense to Permanent Injunctive Relief)

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3 Laches Issues:

1) Clock starts to run when P learns of the injury.

2) Delay will cut off right to relief when it has been both UNREASONABLE and PREJUDICIAL to the D.

3) If laches applies, consider awarding P money damages.

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Permanent Injunction Mnemonic

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"I'll Put Five Bucks Down"

I -- Inadequate legal remedy
P -- Property Right / Protectible Interest
F -- Feasibility of Enforcement
B -- Balancing of Hardships
D -- Defenses

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Compensatory Damages

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Plaintiff is entitled to compensatory damages to put her in the position she would have been in had the wrong and resulting injury not occurred.

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Remedies for Personal Property

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DESTROYED PROPERTY:
--Compensatory Damages

DAMAGED PROPERTY:
--Compensatory Damages

DISPOSSESSION (most common):
--Compensatory Damages
--Restitutionary Damages
--Replevin
--Mandatory Injunction
--Constructive trusts/Equitable liens
--Self-help (reasonable force to recapture)

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Remedies for Real Property

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SIMPLE TRESPASS:
--Nominal Damages
--Restitutionary Damages
--Injunction (avoiding multiplicity of actions

DESTRUCTION/DAMAGE TO REALTY
--Compensatory Damages
--Injunction

DISPOSSESSION:
--Compensatory Damages
--Restitutionary Damages
--Ejectment
--Constructive trusts/Equitable liens

ENCROACHMENT (common):
--Compensatory Damages
--Injunction
**No restitution

NUISANCE (common):
--Compensatory Damages
--Injunction
**No restitution

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Remedies for Personal Injury Torts

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COMPENSATORY DAMAGES:

a) Economic Losses/Special Damages (certainty rules apply)

b) Non-Economic Losses/General Damages (e.g., pain and suffering -- certainty rules do not apply)

c) Lump Sum Payment: Discounted to present value. Inflation not taken into account under traditional view.

INJUNCTION (only against prospective intentional tortious conduct).

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Remedies for Fraud

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1) Damages

2) Constructive Trusts/Equitable Liens

**Always consider whether (i) punitive damages should be awarded AND (ii) if it also could be analyzed as a Ks case.

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Liquidated Damages Clauses in K

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2 part test for validity:

1) Damages are very difficult to ascertain at time of K formation.

2) This was a reasonable forecast of what they would be. If amount is excessive, this would be a "penalty" and is not allowed.

If VALID: Only liquidated damages are available.
If INVALID: Only actual damages available.

NOTE: You cannot have a liquidated damages clause allowing for either liquidated damages or actual damages; if so, it is INVALID and you only get actual damages.

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Specific Performance in K

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6 part checklist:

1) K is valid / certain & definite terms

2) K conditions of P must be satisfied (P must be able to show her K conditions have been fulfilled--already performed, ready and able to perform, or excused from performing).

3) Inadequate legal remedy alternative; 4 reasons:
--Damages are speculative
--D is insolvent
--multiple suits are necessary
--the thing bargained for is UNIQUE

4) Mutuality of Remedy

5) Feasibility of Enforcement

6) Defenses

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Specific Performance: "Unique"

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Land is always unique.

Personal property is NOT UNIQUE.

EXCEPTIONS:
a) One of a kind OR very rare
b) Personal significance to Buyer
c) Circumstances make chattel unique (i.e., shortage of gasoline).

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Specific Performance: Defenses

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EQUITABLE DEFENSES:

1) Unclean Hands
2) Laches
3) Unconstitutionality

CONTRACT DEFENSES:

1) Mistake
2) Misrepresentation
3) Statute of Frauds

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Specific Performance: Problem of Part Performance

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HOW DOES THE PROBLEM ARISE?

1) The K must involve LAND.
2) The K will have been ORAL.

RULE: If one has rendered (i) VALUABLE PART PERFORMANCE, (ii) IN RELIANCE ON THE K, this will take the case out of the SOF and specific performance will be granted.

What is valuable part performance?

(i) Payment (in whole or in part)
(ii) Possession
(iii) Valuable Improvements
(iv) Valuable Services

NOTE: Any TWO of (i)-(iii) taken together will suffice; modern trend is that (iv) alone will be enough.

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Specific Performance Mnemonic

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"Cha Cha Is My Favorite Dance"

C -- Contract is Valid
C -- Conditions of P satisfied
I -- Inadequate legal remedy
M -- Mutuality of remedy
F -- Feasibility of enforcement
D -- Defenses

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Rescission of K

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The original K is considered voidable and rescinded. 2 step analysis:

1) Determine if there are grounds for rescission (i.e., mistake, misrepresentation, coercion, undue influence, lack of capacity, failure of consideration, or illegality).

DEFENSES:
--Unclean Hands
--Laches
**Negligence of P is NOT a good defense!

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Rescission of K: Mistake

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MUTUAL MISTAKE:

1) Material Fact: Rescission GRANTED

2) Collateral Fact (going to quality, desirability, or fitness of property for a particular purpose): Rescission DENIED.

UNILATERAL MISTAKE:

1) In general: Rescission DENIED.

2) Exception: When the non-mistaken party knew or should have known of the mistake --> Rescission GRANTED.

3) Modern Trend Exception: When the mistaken party would suffer undue hardship if there is no rescission.

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Rescission of K: Misrepresentation

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In order to get rescission based on misrepresentation grounds, the P must show that they have ACTUALLY RELIED upon the misrepresentation.

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Reformation of K

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Changes written agreement to conform with the parties' original understanding. Requires a 3 step analysis:

1) Determine if there is a valid K

2) Determine if there are grounds for reformation (i.e., mistake, misrepresentation).

3) Determine if there are valid defenses:
--Unclean Hands
--Laches
**Negligence of P is NOT a good defense!
**SOF will NOT prevent reformation!
**Parol evidence rule will NOT prevent reformation!

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Rescission and Reformation Mneumonics

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RESCISSION: "Good Dog"

G -- Grounds for Rescission
D -- Defenses

REFORMATION: "Very Good Dog"

V -- Valid K
G -- Grounds for Reformation
D -- Defenses

Front 38

TORT Remedies

Back 38

LEGAL REMEDIES

1. Damages

RESTITUTIONARY REMEDIES

(Legal Restitutionary Remedies)
2. Restitutionary Damages
3. Replevin
4. Ejectment

(Equitable Restitutionary Remedies)
5. Constructive Trusts
6. Equitable Liens

EQUITABLE REMEDIES

7. Injunctive Relief

Front 39

CONTRACT Remedies

Back 39

LEGAL REMEDIES

1. Damages

RESTITUTIONARY REMEDIES

(Legal Restitutionary Remedies)
2. Restitutionary Damages
3. Replevin
4. Ejectment

(Equitable Restitutionary Remedies)
5. Constructive Trusts
6. Equitable Liens

EQUITABLE REMEDIES

7. Specific Performance*
8. Rescission*
9. Reformation*

*Different from Tort remedies

Front 40

Anticipatory Repudiation

Back 40

Anticipatory repudiation (AR) occurs when a promisor, prior to the time set for performance of his promise, indicates that he will not perform when the time comes. When one side expresses a desire to breach, the non-repudiator must wait until the time originally set for performance by the repudiating party. Until such time, the repudiator has the option to change his mind and withdraw the repudiation and perform in accordance with the K.

Requires:

a. Executory Bilateral K (AR applies only if there is a bilateral K with unperformed duties on both sides)
b. Unequivocal Repudiation (words or conduct of the promisor unequivocally indicating that he cannot or will not perform when the time comes)

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Effect of Anticipatory Repudiation

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In the case of an AR, the non-repudiating party may: (i) treat the AR as a total repudiation and sue immediately; (ii) suspend his own performance and wait to sue until the performance date; (iii) treat the repudiation as an offer to rescind and treat the K as discharged; or (iv) ignore the repudiation and urge the promisor to perform.

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Replevin -- Sales K

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A buyer may replevy undelivered, identified goods from the seller if the buyer, after reasonable effort, is unable to secure adequate substitute goods.

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LACHES

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If a party has UNREASONABLY delayed asserting an equitable claim, and the delay has resulted in prejudice to the other party, equity will hold the claimant guilty of laches and will DENY her relief.

--applies to ALL equitable actions.

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UNCLEAN HANDS

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"He who comes into equity must come with clean hands." The party seeking equitable relief must not himself have been guilty of any inequitable or wrongful conduct with respect to the transaction of subject matter of the present suit.

--applies to ALL equitable actions.
--actual tort not required.
--the unclean hands must arise out of the transaction sued upon.

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Interlocutory Injunctions

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In addition to permanent injunctions, litigants may request a court to impose an interlocutory injunction to maintain the status quo until a full trial on the merits may be held. The party seeking the interlocutory injunction must generally show IRREPARABLE INJURY and a likelihood of PREVAILING on the merits of the underlying case.

There are 2 types of interlocutory injunctions: PRELIMINARY INJUNCTIONS and TROs.

PRELIMINARY INJUNCTIONS are granted only after a regular adversary-type court hearing and remain in effect until the conclusion of the full trial.

TROs are emergency orders imposed until a regular adversary-type hearing may be held (most states put a 10-day limit on TROs).

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Destruction of Chattels

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For the tortious destruction of a chattel, the plaintiff may recover the value of the chattel at the time of destruction, LESS salvage, PLUS interest.

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Injury to Chattels

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Fro wrongful harm to chattels, the π may recover damages measured by EITHER the diminution in value of the chattel (the difference in value before and after the injury), OR the cost of repair (not to exceed the market value of the chattel) plus loss of use.

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Dispossession of Chattels

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The standard measure of damages for conversion is the market value of the property at the TIME OF THE CONVERSION, plus interest from that date. In addition, π may recover fair compensation for time and monies property expended in pursuit of the property.

If only MINOR dispossession = damages for loss of use.

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Trespass Causing Severance

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If the trespass results in a severance from the realty of timber, minerals, or gravel, the standard measure of damages is the DIMINUTION IN THE VALUE OF THE LAND. By statute in most states, the damages are TREBLED. Where the trespass is causal or involuntary, or where ∆ had probable cause to believe that the land was his own, the damages are sometimes DOUBLED.

Damages for acts other than severance (such as dumping debris on the property) are measured by the COST OF REMOVAL of the debris or obstruction, or by the RENTAL VALUE of the land.

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Encroachments

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Where the trespass results from the construction of a structure partially on the π's property, the method of measuring damages depends on the classification of the trespass.

In those jurisdictions where the encroachment is classified as a CONTINUING TRESPASS, damages are measured by the RENTAL VALUE of the occupied land.

Where the trespass is classified as PERMANENT, the FMV of the land occupied by the structure is the measure of damages.

Since the encroachment constitutes an ouster and is very difficult to enforce, EJECTMENT as a practical matter is not used.

Balance the hardships to determine whether an injunction should issue (proper method for where ∆'s encroachment is INADVERTENT).

Willful encroachment (where ∆ did so deliberately or intentionally) will lead to the grant of an injunction ordering removal regardless of the hardship to the ∆.

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WASTE

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• VOLUNTARY WASTE = damages are measured either by the DIMINUTION IN VALUE test (i.e., difference in value of the property before and after the injury) or by the COST OF REPAIRS. Statutes in many states permit treble damages for cases of willful or wanton acts of destruction.

• PERMISSIVE WASTE = damages are measured by the COST OF REPAIRS.

• AMELIORATIVE WASTE = damages generally cannot be recovered since there is no diminution in value.

• EQUITABLE WASTE = generally no damages; injunctive relief may be granted.

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NUISANCE

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A nuisance is the use by a person of her own property in such a way as to interfere unreasonably with the use and enjoyment of anothers property.

The standard measure of damages for a continuing nuisance is the value of the loss of use and enjoyment of the property, plus costs incurred in trying to abate the nuisance, plus an award for any discomfort or annoyance to the occupants.

Injunctions (equitable relief) may also be available for two reasons:
o (i) to avoid a MULTIPLICITY OF SUITS; and
o (ii) because in many cases there is IRREPARABLE INJURY to the land where the nuisance destroys trees, crops, etc.

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PERSONAL INJURY

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The most effective remedy for personal injury is COMPENSATORY DAMAGES.

• As a part of any award of compensatory damages, the inured party is entitled to recover all economic losses proximately caused by the injury
o Medical expenses (past + future)
o Loss of earnings (past + future)

• Also entitled to non-economic losses:
o Pain and suffering
o Emotional anguish
o Loss of enjoyment of life
o Wrongful death actions

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FRAUD

Back 54

Unlike other intentional torts, the π must prove ACTUAL INJURY to establish a fraud cause of action. This normally requires proof of some pecuniary loss. Once the COA is established, CONSEQUENTIAL damages may also be recovered; and PUNITIVE damages are recoverable where “malice” is shown.

Special Cases:
o Fraud by Seller = “Benefit-of-Bargain” Rule or “out-of-pocket” measure (more limited)

Some jxns allow π to choose
o Where ∆ has acquired title to property by fraud → constructive trust.

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Certainty of Ks Remedy: Established vs. New Business

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Established Business → lost future profits are found sufficiently CERTAIN for recovery

New Venture → damages are considered too SPECULATIVE for recovery.

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Specific Performance: Mutuality

Back 56

Until recently, the π was not allowed SP unless he could demonstrate that the ∆ could have obtained such relief against him had he breached—the so-called “Negative Mutuality of Remedy” doctrine. Today, almost all courts have replaced the mutuality requirement with the Restatement’s “Security of Performance” test, requiring only a performance on the part of the π to require the ∆ to perform as he is entitled to do so under the K.

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CONSTRUCTION Ks: Owner’s Breach

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Where the builder sues the owner for breach:

o (1) IF the K is WHOLLY EXECUTORY, damages are measured by the builder’s LOST PROFITS determined by deducting the cost of performance from the K price.

o (2) If the K is FULLY PERFORMED by the builder, the K PRICE is the measure of damages.

o (3) If the K is PARTIALLY performed by the builder, damages are measured either by deducting from the K price the cost of completing the K; OR by deducing from the K price the total cost of performance and adding the cost of partial performance.