Equity Flashcards

1
Q

What is the standard for a judge deciding whether to award equitable relief?

A

in the sound discretion of the court

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2
Q

When in equitable relief available?

A

(1) plaintiff has a protectable interest
(2) there is no adequate remedy at law,
(3) the relief would be effective and enforceable
(4) the hardships balance in plaintiff’s favor, and
(5) no equitable defenses prevent the relief sought

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3
Q

For what reasons is there no adequate remedy at law?

A

(i) damages cannot make plaintiff whole
(ii) damages are speculative and uncertain
(iii) multiple successive suits would have to be brought to obtain relief at law
(iv) damages would be uncollectible because defendant is insolvent
(v) irreparable harm not remediable by damages

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4
Q

When would equitable relief not be effective and enforceable?

A
  • land located out of the state
  • performance required out of state
  • performance would require constant supervision
  • interference with free speech
  • compelled personal services
  • interference with administration of criminal law
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5
Q

What balancing test is applied for equitable relief?

A

balance the:

  • harms to plaintiff if not issued
  • harms to defendant if issued
  • public’s interest
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6
Q

When is a plaintiff entitled to a jury trial in a civil case?

A

Generally, there must be a claim for money damages.

When plaintiff brings both legal and equitable claims, or requests both legal and equitable relief, then it is necessary to submit the entire case to the jury if:

  • there is a single set of facts
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7
Q

In a contempt proceeding, what defenses are available?

A

The court lacked PJ or SMJ. Courts will not reconsider the merits.

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8
Q

What is the difference between a “mandatory injunction” and a “negative injunction”?

A
  • mandatory injunction = remedial in nature

- negative injunction = preventive

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9
Q

What is an interlocutory injunction?

A
  • temporary relief intended to maintain the status quo between the parties until there is a judgment on the merits
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10
Q

What is a permanent injunction?

A
  • issued after a full decision on the merits
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11
Q

Who can be bound by an injunction?

A
  • all parties
  • parties’ agents and employees who receive actual notice
  • persons acting in concert or collusion with parties and receive actual notice

i.e., injunctions cannot bind the whole world

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12
Q

What torts may warrant equitable relief?

A
  • nuisance
  • trespass to land
  • waste
  • conversion
  • trespass to chattels
  • defamation
  • invasion of privacy
  • abuse of process
  • unfair competition, etc.
  • violence/infliction of bodily harm
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13
Q

In obtaining equitable relief for business torts, what is the focal issue?

A

whether there is a protectable interest in the nature of a property right

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14
Q

What equitable remedy is available for trespass to chattels?

A

Replevin

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15
Q

What equitable remedy is available for trespass to land?

A

Ejectment

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16
Q

In deciding whether to issue a mandatory injunction, what factors does the court consider?

A

(1) is the act complex and involve great skill, judgment, or taste
(2) does the relief call for continuous acts over a long period of time

–>Where these factors are present, courts will deny.

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17
Q

What defenses will prevent equitable relief?

A
  • unclean hands
  • laches
  • impossibility
  • hardship
  • free speech
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18
Q

What is required for the unclean hands defense?

A

plaintiff acted wrongfully with respect to the “same transaction”

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19
Q

What is required for the laches defense?

A

(1) plaintiff unreasonably delayed in bringing the action, and
(2) the delay prejudices defendant

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20
Q

When is delay excused, such that laches is not a defense?

A
  • fraud, concealment of the claim

- plaintiff not aware of facts giving rise to the claim

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21
Q

When does laches begin to run and expire?

A

(a) laches begins to run when plaintiff has knowledge that a right has been infringed
(b) one the statute of limitation has run, laches is no longer available

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22
Q

When does laches begin to run and expire?

A

(a) laches begins to run when plaintiff has knowledge that a right has been infringed
(b) once the statute of limitation has run, it controls

*even if the SOL has not yet run, laches might shorten the period during which suit must be brought

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23
Q

When does laches begin to run and expire?

A

(a) laches begins to run when plaintiff has knowledge that a right has been infringed
(b) once the statute of limitation has run, it controls
* even if the SOL has not yet run, laches might shorten the period during which suit must be brought

24
Q

What is the impossibility defense to equitable relief?

A

it would be impossible for defendant to comply with the injunction

25
Q

What is the difference between a preliminary injunction and a temporary restraining order?

A
  • preliminary injunction is issued after notice and hearing and lasts until a decision on the merits issues
  • TROs are emergency orders, issued before a hearing may be held, and lasting only for a short period of time (10 days)
26
Q

What are the requirements of a preliminary injunction?

A

(1) likelihood of success on the merits
(2) irreparably harm
(3) harm to plaintiff greatly outweighs harm to defendant and the public if injunction is issued

27
Q

In addition to the elements for a preliminary injunction, what must a party seeking an ex parte TRO show?

A

the party must make a “strong showing” as to why notice should not be required

28
Q

What is specific performance?

A

an order to one party to perform according to the terms of a contract

29
Q

What elements must be shown for specific performance?

A

(1) a contract exists
(2) all contractual obligations have been fulfilled
(3) the legal remedy is inadequate
(4) enforcement is feasible
(5) mutuality of remedy exists
(6) defendant has no defenses

30
Q

What elements must be shown for specific performance?

A

(1) contract exists
(2) plaintiff has performed
(3) the legal remedy is inadequate
(4) enforcement is feasible
(5) there is mutuality of remedy
(6) defendant has no defenses

31
Q

What types of contracts is specific performance available for?

A

land sale - always
chattel that is rare or unique
chattel with personal significance
chattel in short supply at the time of trial

32
Q

What are the sub-elements of mutuality of remedy, required for specific performance?

A

(1) both parties are capable of performing and

(2) the court can sufficiently secure the plaintiff’s counter-performance

33
Q

How is mutuality of remedy applied in a land sale contract?

A

Buyer can get specific performance because all land is unique. Under the doctrine of mutuality of remedy, seller is also permitted to require the sale, even though the seller will only get money.

34
Q

When will a court find enforcement is not feasible in a land sale contract and therefore deny specific performance?

A
  • If it is an in rem action and the BUYER is not before the court.
35
Q

What are personal services contracts generally not enforced by specific performance?

A

specific performance would be “tantamount to involuntary servitude”

36
Q

What is the test for the equitable defense of hardship available in defense of specific performance?

A

The contract was unconscionable at the time made, not simply a bad bargain.

37
Q

What is required for enforcement of a non-compete covenant?

A

Enforced if the covenant not to compete:

(1) is expressly contained in the employment contract
(2) supported by mutual consideration when the contract is signed
(3) reasonably necessary to protect a legitimate business interest of the employer
(4) reasonable in scope, geography, and duration
(5) enforcement will not harm the public interest

38
Q

What is the general requirement to obtain rescission of a contract?

A

The grounds for rescission must have existed at the time the contract was formed.

39
Q

What contract defenses allow for a contract to be rescinded?

A

When the original contract was invalid because of:

  • Mutual mistake
  • Unilateral mistake, known to other party
  • Illegal purpose
  • Misrepresentation
  • Duress/Undue Influence
  • Lack of capacity
  • Failure of consideration
40
Q

When will rescission not be awarded?

A

If the plaintiff is awarded money damages for breach (e.g., fraud).

41
Q

If rescission is granted what monetary relief is also available?

A

restitution = return of money paid to defendant

42
Q

When is reformation available?

A

Reformation is available when the original contract was valid but the writing does not conform to the original intent of the parties because of:

  • mutual mistake, or
  • unilateral mistake coupled with fraud or intentional wrongdoing
  • misrepresentation
43
Q

When will reformation not be allowed?

A

When there is a subsequent bona fide purchaser (paid value, without notice) or where the rights of third parties would be adversely affected

44
Q

What are not defenses in a suit for reformation?

A
  • Plaintiff’s negligence is not a bar to reformation (or rescission).
  • The parol evidence rule does not apply when reformation is requested.
  • The statute of frauds does not apply in reformation actions, unless the plaintiff seeks to add land not included in the written instrument.
45
Q

In addition to contract actions, reformation may also be available for:

A

Gifts

46
Q

When can a donor obtain reformation?

A

when the instrument of conveyance does not express the intent when the gift was made, and there has been no detrimental reliance by the donee

47
Q

When can a donee obtain reformation?

A

only if the donee detrimentally relied on the original intent of the donor, which was not expressed in the gift instrument

*may reform a gift against donor’s heir

48
Q

When is a constructive trust imposed?

A

(1) defendant gained title to property through misappropriation
(2) has been unjustly enriched and
(3) money damages are inadequate

  • fraud
  • mistake
  • undue influence
  • breach of fiduciary duty (etc)
49
Q

What is the doctrine of tracing?

A

When defendant has sold misappropriated property a constructive trust can be imposed on the proceeds of the sale.

*look for a situation where defendant acquired property that is more valuable than the original misappropriated property

50
Q

What is the remedy if the defendant used misappropriated property to make improvements to other property?

A

An “equitable lien”, which is a security interest in the property to secure a money judgment. The lien can be foreclosed and the property sold to satisfy the judgment.

51
Q

What is the advantage of a constructive trust if defendant is insolvent?

A

a constructive trust in specific property gives the plaintiff priority over unsecured creditors

52
Q

When an equitable lien is granted, how does this impact priority in time?

A

The equitable lien will date back to when the misappropriation occurred.

53
Q

What event cuts off an equitable lien?

A

Transfer to a bona fide purchaser

54
Q

If a creditor refuses to recognize the security nature of a deed absolute and reconvey the property after the plaintiff has repaid his debt, what remedy is available?

A

an “equitable mortgage” will be granted, which reforms the instrument to conform to the intent

55
Q

What is subrogation?

A

When a person (a) pays the loss sustained by another, (b) pays the obligation owed by another, or (c) discharges a lien on the property of another, then the person may recover the amount paid by asserting the rights of the other.

  • insurance company pays tort victim
  • leaseholder discharges a tax lien