Equity Rule Statements

Question 1

Establishing Boundary Lines

Answer 1

Assert ownership of the disputed land and seek to establish that the wrongful action is occurring on plaintiff’s land

Question 2

Rescission at law

Answer 2

When a contract is voidable for fraud is executory on both sides, the injured party may simply disaffirm, refuse to perform, and use fraud as a defense to the action at law for damages, which the counter-party may bring if and when it seeks to force performance.

Rescission at law is ineffective as to land titles.

In Virginia, the grounds for rescission are: (i) fraud; (ii) innocent misrepresentation; (iii) mutual mistake.

Question 3

Laches and Statutes of Limitations

Answer 3

While it is true that the statutes of limitation do not directly apply in equitable causes of action, the equitable time bar of laches should conform to the statutory limitations period for a claim that is recognized in both legal and equitable causes of action.

Equitable claims do not generally have a specific statutorily prescribed limitations period. Laches is an affirmative defense that will bar an equitable claim if: (i) there was an unreasonable delay in bringing suit after an adult plaintiff learns of the grounds of the claim; (ii) the defendant has suffered prejudice during the period of plaintiff’s unwarranted delay.

Prejudice: usually means that a witness or documentary evidence has been lost; a change in legal position during the period when no suit was pending; or substantial investment of money which wouldn’t have been expended had plaintiff complained timely.

Question 4

Unjust enrichment

Answer 4

In Virginia, unjust enrichment requires a showing that: (i) the plaintiff conferred a benefit on the defendant; (ii) defendant knew of the benefit and reasonably should have expected to repay plaintiff; and (iii) defendant accepted or retained the benefit without paying for its value.

Question 5

Bar of Legal and Equivalent Equitable Claim

Answer 5

Under Virginia law, a claim barred under a legal theory of recovery must be deemed barred under an analogous equitable theory.

Question 6

Nuisance generally

Answer 6

Nuisance is in essence any intangible interference with one’s enjoyment of land by means of noxious fumes, smells, vibrations, noise, illumination, or otherwise offensive activities including ecological and environmental nuisances.

Question 7

Private Nuisance

Answer 7

A private nuisance will be enjoined if: (i) it threatens irreparable loss; (ii) it is substantial; (iii) the balance of the hardships does not favor the other party.

Private nuisance interferes with rights or interests unique to the individual bringing the suit.

Question 8

Public Nuisance

Answer 8

Public nuisance is a nuisance that affects an indefinite number of people. A private person may seek to enjoin a public nuisance only if three conditions are met: (i) the alleged public nuisance violates a specific right of the person seeking the injunction and causes the individual harm not shared by the public at large; (ii) the injury is serious; (iii) the private inconvenience suffered outweighs any public benefit from the status quo.

Public nuisances are ordinarily prosecuted by public officials such as the attorney general, the Commonwealth Attorney, or the city or county attorney.

Question 9

Injunction Predicated Upon Trespass

Answer 9

A court will enjoin a trespass only in cases of irreparable injury caused by: (i) repeated violations that would not be adequately remedied by successive lawsuits; (ii) a continuous trespass; or (iii) a single trespass if the harm threatened is unique.

Question 10

Factors for a Permanent Injunction

Answer 10

A court will grant an injunction if: (i) plaintiff has a legally recognized right that has been or is about to be infringed upon by the defendant; (ii) there is no adequate remedy at law; (iii) an injunction is practicable, feasible, and effective to vindicate plaintiff’s rights; (iv) the balance of the hardship favors the plaintiff; (v) the injunction will not adversely affect the public interest; (vi) there are no equitable defenses against the plaintiff.

Question 11

Rescission in Equity

Answer 11

Rescission abrogates the original contract or transfer of property ab initio.

Rescission in equity will be granted only if rescission at law does not adequately protect plaintiff’s rights. Rescission at law is ineffective as to land titles.

In Virginia, the grounds for rescission are: (i) fraud; (ii) innocent misrepresentation; (iii) mutual mistake.

Question 12

Mutual Mistake

Answer 12

A contract can be rescinded for mutual mistake of a material fact on the part of the parties. In cases of mutual mistake, equity will rescind the conveyance if the error goes to the substance of the contract, so that the purchaser does not get what he bargained for and the vendor sells that which she did not intend to sell.

Question 13

Merger in Land Sales Contracts

Answer 13

The general rule is that prior stipulations and understandings are merged into the final and formal contracts executed by the parties and when a deed has been delivered and accepted as performance of an antecedent contract to convey, the contract is merged into the deed. However, the merger rule does not apply to nontitle matters.

Question 14

Fraud

Answer 14

Fraud is defined as either: (i) an intentional misrepresentation of a present or past fact; (ii) nondisclosure of an important matter; or (iii) an intentional misrepresentation of a present state of mind.

Question 15

Reformation

Answer 15

Reformation is permitted when there is clear and convincing evidence of an earlier agreement oral or written which specifies certain terms for a conveyance and the later drawn legal document that effectuates the conveyance inaccurately portrays the terms of the initial agreement with the result that the grantor receives less than he bargained for.

Question 16

Preliminary Injunction

Answer 16

Plaintiff must show: (i) substantial likelihood that moving party will win the lawsuit; (ii) irreparable harm to movant if relief denied or delayed; (iii) harm to the moving party outweighs the hardship the injunction will cause the restrained party; and (iv) public interest will not be adversely affected by an injunction; and (v) the temporary injunction will preserve the status quo.

Question 17

Enforcing a Parol Agreement for Land and Avoiding Statute of Frauds

Answer 17

Principles by which a court of equity will avoid the statute of frauds and enforce the parol agreement for conveyance of land are: (i) the parol agreement relied on must be certain and definite in its terms; (ii) acts proved in part performance must refer to, result from, or be made in pursuance of agreement; and (iii) that the agreement must have been so far executed that a refusal of execution would operate as a fraud upon the party and place her in a situation which does not lie in compensation. Acts of part performance relied on must be relevant solely to the contract sought to be enforced and consistent with no theory other than the existence of the alleged contract.

Question 18

Declaratory judgment action

Answer 18

A declaratory judgment action merely provides a declaration of rights with or without consequential relief. They’re merely intended to supplement rather than supersede ordinary causes of actions. Preventative relief is the moving purpose.

The declaratory judgment acts do not create or change any substantive rights or bring into being or modify any relationships or alter the character of controversies that are the subject of judicial power.

Question 19

How to void a deed in equity

Answer 19

Bring a bill of complaint in equity seeking to void the earlier deed, and then seek recordation of the decree in the deed book.

Grounds for voiding a deed: executed by minors or incapacitated persons; those obtained through fraud in the inducement, duress, undue influence, mistake, and breach of fiduciary duty.

Question 20

Unclean Hands

Answer 20

The defense applies when the plaintiff engaged in wrongful conduct and that conduct is proximately related to the condition from which the plaintiff seeks relief. “Unclean hands” covers a broad spectrum of conduct including, on one extreme, intentional fraud or misrepresentation, but also including toward the other end, simply unethical conduct or sharp practices.

Question 21

Remedies Inadequate at Law

Answer 21

1) where the subject matter is unique or rare; 2) where setting an amount of damages would be speculative; 3) where defendant is insolvent; 4) where multiple lawsuits would be required to protect the plaintiff; 5) where irreparable harm will occur.

Question 22

Unfair Competition

Answer 22

Using confidential information appropriated or learned from an employer to competitively injure that person.

Trade Secrets: 1) confidential and not otherwise available; AND 2) gives owner a competitive advantage.

Question 23

Non-Compete Contracts

Answer 23

Specific performance of the restrictions granted if restrictions are reasonable as to: (i) the employer’s legitimate interests in protecting its business; (ii) the employee’s fair opportunity to accept other jobs in the industry; and (iii) the public interest.

Key aspects considered, must be reasonable as to:

1) the specific job duties that are prohibited—looking at if they’re restraining employee from doing things outside employer’s scope
2) geographic limitations on competition—where does the employer do business
3) duration of restriction—1 or 2 years is generally okay, 5 is too much. It’s about how much training done that must be recouped.

NO BLUE PENCILING, stands or falls as a whole.

Question 24

Jury Trial in Equity

Answer 24

If defendant files a plea to an equitable claim (defensive pleading which sets forth a single dispositve state of facts, which, if proven, would provide the defendant a complete exoneration of plaintiff’s claim) or an action for quiet title. Binding on judge.

Question 25

Advisory Juries in Equity

Answer 25

Trial judge has the discretion to seat a jury to hear hotly disputed factual issues, but the result of the jury’s deliberations is a verdict that is not binding on the judge. Either party can request one, or the court could act sua sponte. Judge must make an independent decision and may not merely accept the verdict.

Question 26

Bill of Review

Answer 26

Starts a new action, must be filed within six months of the entry of an equitable final judgment and based on:

1) newly discovered evidence (three-part test: could not have been discovered for use at trial in the exercise of reasonable diligence; is not merely cumulative, corroborative, or collateral; and is material and would probably produce opposite results on the merits at another trial); or
2) error of law apparent on the face of the record

Question 27

Invasion of Privacy for Unauthorized Use of a Person’s Name or Picture

Answer 27

Virginia statute creates a cause of action and a right to seek an injunction. Problem of “prior restraint.”

Question 28

Real Covenants Exception

Answer 28

No need to weigh the impact on the restrained party as well as the plaintiff’s hardships justifying an injunction when the plaintiff sues upon a real property covenant the defendant is violating. Only way for defendant to escape abiding by covenant is a showing of exceptional harm.

Question 29

Mutuality of Remedy for Specific Performance

Answer 29

1) Both parties are able to perform; and 2) both parties can be legally bound

Question 30

Constructive Trust

Answer 30

If the property that a defendant wrongfully obtained can be traced to some asset defendant still has, the court may impose a constructive trust, which in effect declares that the plaintiff is the beneficial owner of the asset and that the defendant must disgorge it in specified form.

Question 31

Equitable Accounting

Answer 31

The court may order a study of the finances of a person or organization, such as a partnership, to determine the amount of any award appropriate under the facts of any case.

Question 32

Equitable Defenses

Answer 32

Unclean Hands
Laches
Unconscionability
Impossibility and Hardship
Fraud
Equitable Estoppel