Equitable Remedies

Question 1

List the Equitable Remedies

Answer 1

1. TRO
2. Prelim Injunction
3. Permanent Injunction
4. Equitable Lien
5. Constructive Trust
6. Replevin
7. Ejectment
8. Purchase Money Resulting Trust
9. Pro Rata Resulting Trust

Question 2

TRO–What is it, and when is it available?

Answer 2

A Temporary Restraining Order (TRO) is an emergency remedy used to maintain the status quo pending the outcome of a hearing or application (usually a preliminary injunction application), and is only available when the plaintiff will suffer immediate and irreparable harm.

Question 3

TRO–Requirements

Answer 3

The moving party must show:

(1) a likely threat of irreparable harm to the movant;
(2) a likelihood of success on the merits;
(3) balancing of the hardships in favor of the moving party (the harm alleged by the movant outweighs any harm to the non-moving party); AND
(4) posting of a bond.

• If granted, the moving party must give security in an amount the court deems proper.

Question 4

TRO–Duration of an Ex Parte TRO

Answer 4

An ex parte TRO automatically expires after 14 days (federal court) or 15 days (CA).

Question 5

TRO–Ex Parte Requirements

Answer 5

For an ex parte TRO, the plaintiff or his attorney MUST:

(1) provide specific facts in sworn statement that clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; AND
(2) certify in writing any efforts made to give notice to the adverse party OR why notice should not be required.

Question 6

Preliminary Injunction

Answer 6

A preliminary injunction maintains the status quo pending the outcome of an action in order to protect irreparable harm to a party.

The party moving for an injunction must show:

(1) a likelihood of success on the merits;
(2) a likely threat of irreparable harm to the movant (inadequate remedy at law);
(3) balancing of the hardships in favor of the moving party (the harm alleged by the movant outweighs any harm to the non-moving party);
(4) an injunction is in the public interest (if there is a public interest at issue);
(5) upon notice to the adverse party; AND
(6) if the moving party gives security (post a bond) in an amount the court deems proper.

**can be restraining or mandatory

Question 7

What’s the injunction that prevents a party from doing something?

Answer 7

A restraining injunction

Question 8

What’s the injunction that mandates/compels a party to do something?

Answer 8

Mandatory injunction

Question 9

Permanent Injunction

Answer 9

Permanent injunction is issued after a full trial on the merits, and requires the following:

(1) inadequate legal remedies (harm cannot be compensated by money damages);
(2) a protectable personal or property interest (historically, this could only be a property interest, but now, any personal or property interest is sufficient);
(3) feasibility of enforcement (not a concern with negative injunctions, but potentially with mandatory injunctions);
(4) a balancing of hardships to both parties (balance the benefit to the plaintiff versus the hardship to the defendant); AND
(5) there are no valid equitable defenses.

*can be restraining or mandatory

Question 10

Equitable Lien–requirements

Answer 10

An equitable lien is available if a defendant:

(1) wrongfully acquired title to property; AND
(2) would be unjustly enriched if allowed to keep the property.

The court will force the sale of the property, and the plaintiff will receive the proceeds.

Question 11

Equitable Lien–deficiency judgements

Answer 11

The plaintiff is entitled to a deficiency judgment if the proceeds are less than the value of the property at the time it was taken. A plaintiff may trace his property to other forms, but he is NOT entitled to any increase in value of the property.

However, a bona fide purchaser (BFP) is NOT subject to an equitable lien.

Question 12

Equitable Lien–major limitation

Answer 12

A bona fide purchaser (BFP) is NOT subject to an equitable lien.

Question 13

Constructive Trust

Answer 13

A constructive trust is an equitable remedy used to prevent unjust enrichment resulting from wrongful conduct, such as fraud, undue influence, or breach of a fiduciary duty.

A constructive trust is available if a defendant:

(1) wrongfully acquired title to property; AND
(2) the defendant would be unjustly enriched if allowed to keep the property.

Question 14

Constructive Trust–Effect of a constructive trust

Answer 14

The court will require the defendant to hold the property as a trustee, and then return it to the plaintiff.

A plaintiff MAY trace his property to other forms and is entitled to any increase in value to the property.

Question 15

Does the Statute of Frauds apply to a constructive trust?

Answer 15

No (so oral promises may be used to establish a constructive trust)

Question 16

Does a constructive trust apply to Bona Fide Purchasers?

Answer 16

NO

Question 17

Replevin–General Requirements

Answer 17

Replevin allows the recovery of specific personal property, and is available if:

(1) the defendant is wrongfully withholding personal property,
(2) that the plaintiff has a right to possess.

Question 18

Replevin–recovering property BEFORE trial

Answer 18

A plaintiff may recover the property before trial if:

(1) there is a preliminary judicial hearing; AND
(2) the plaintiff posts bond.

Question 19

Ejectment

Answer 19

Ejectment allows the recovery of specific real property, and is available if:

(1) the defendant has actual possession of the property;
(2) the defendant is wrongfully withholding the property; AND
(3) the plaintiff has a right to possess the property.

Question 20

Purchase Money Resulting Trust

Answer 20

A Purchase Money Resulting Trust (PMRT) arises when one party provides consideration for the purchase of real property, but titles the property to another.

The party providing the consideration is the beneficiary of the trust (containing the real property), and the person holding title is the trustee.

Question 21

Pro Rata Resulting Trust

Answer 21

A Pro Rata Resulting Trust arises when one party provides only partial consideration for the purchase of real property, and the property is titled in another party’s name.

The party providing partial consideration is the beneficiary of the trust (containing only the portion he provided toward the purchase), and the person holding title is the trustee.

Question 22

What’s the difference between an Equitable Lien vs. a Constructive Trust

Answer 22

If P’s property isn’t used to acquire title, only an EQUITABLE LIEN is available. The equitable lien can be enforced only up to the amount of P’s claim; the enhanced value of the property CANNOT be recovered. However, the P may seek a deficiency judgment after imposition of an equitable lien; an action for a deficiency judgment is not allowed after imposition of a constructive trust.