FL EQUITY Flashcards
NATURE OF EQUITY
Injunctive relief against tortious conduct, specific performance, rescission, reformation, constructive trust, equitable liens, and mortgages, and subrogation. Equitable remedies are available only when the remedy at law are inadequate
INJUNCTIVE RELIEF
Order by court to D to either do something or stop doing something. PJ is required for the injunctive relief.
Enforcement is by contempt and both parties and persons in privity with parties can be bound by an equitable degree. They can be permanent or temporary
Permanent is entered after a full trial on the merits.
Temporary is entered before a trial on the merits.
BASIC PRINCIPLES OF EQUITY
REDAF
Equity is remedial.
Equity is extraordinary because it is not usually available.
Equity is discretionary, it is within the discretion of the court.
Equity is **available* when the other remedies at law are inadequate. Have to convince the court that regular remedies wont work.
Equity is concerned with feasibility. Is it easy for the court to enforce?
TEMPORARY INJUNCTION
A temporary injunction is used to preserve the status quo between the parties until a full trial on the merits.
Notice of the hearing for a temporary inj is usually required and a bond is required to secure Ds losses in case it’s later determined the injunction shouldn’t have been issued.
Exception to Notice
– Imminent harm
– Notice will cause harm
TEST FOR TEMPORARY INJUNCTION
P must show she is likely to prevail on the merits at trial but will suffer irreparable injury or loss or damage before the trial can be held.
PERMANENT INJUNCTION TEST
Plaintiff must demonstrate
1. Inadequacy of legal remedy (money)
2. Demonstrate feasibility of enforcement
Defendant’s 2 Parts
1. Are the hardships balanced?
– Weight the benefit to the P against hardship to the D. If the Ps benefit is greatly outweighed by the burden on the D, generally wont be issued.
– If an injunction shouldn’t be issued, then money damages would be issued as second best.
– Court can also consider the burden to the public.
– EXCEPTION - court will not balance hardships if the Ds conduct was willful
2. Availability of defenses
– unclean hands
– laches
– impossibility, hardship, and freedom of speech
REASONS FOR MONEY INADEQUACY
SIMP’D
1. Damages are Speculative
2. The injury is Irreparable
3. A Multiplicity of actions might be necessary
4. The P has no right to damages or
5. The D is insolvent
ENFORCEMENT FEASIBLE?
Recent trend is to be more liberal in giving mandatory injunctions.
1. A negative injunction is easier to get since no supervision is required.
2. Be sure the court has sufficient contacts with the D
ENFORCEMENT FEASIBLE?
Recent trend is to be more liberal in giving mandatory injunctions.
1. A negative injunction is easier to get since no supervision is required.
2. Be sure the court has sufficient contacts with the D
UNCLEAN HANDS
It is a defense that the party seeking the injunction has acted improperly in the transaction in question. Ps conduct must be related to the lawsuit.
LACHES
May be available if
1. P has unreasonably delayed in bringing the action
2. The delay is prejudicial to the D and
3. The D had no knowledge that the P would claim the right alleged in the suit.
Laches commences to run when the P has knowledge of the injury.
Laches may serve as an earlier time bar than the SOL
TORT WHERE INJUNCTION USUALLY AVAILABLE
- Continuous trespass to land
- Conversion of unique chattel
- Wrongfully instituted suit
TORT WHERE INJUNCTION MAY BE AVAILABLE
“Please Dont Jump Before Me”
Depends on the 4 part test
1. Private nuisance
– NOT public nuisance
2. Destructive/permissive waste
– NOT ameliorative waste
3. Judgment obtained by extrinsic fraud
4. Breach of K/refusal to deal
5. Misappropriation of trademark, trade secret, trade name
PRIVILEGE
Does the Ds behavior reflect healthy, competitive behavior? – Likely to conclude privileged
TORT WHERE INJUNCTION NOT AVAILABLE
“Put That Down”
1. Defamation
2. Trade Libel
3. Other privacy torts
CONSTRUCTIVE TRUST
A restitutionary remedy imposed by the courts to prevent unjust enrichment when the wrongdoer has gained title to property through misappropriation of another’s money or party.
D forced to return property.
EQUITABLE LIEN
An equitable lien can be imposed on Ds property to secure a debt owed to a P if the P demonstrates that the D misappropriated Ps money or property, thus creating a debt, and the Ps property can be traced to property held by the D, the retention of which results in unjust enrichment.
It gives the holder of the lien priority over other creditors.
CONSTRUCTIVE TRUST VS EQUITABLE LIEN
An equitable lien is appropriate when the property in the Ds hands is worth less than the Ps claim, or where misappropriated money is used to improve, not acquire title to, property.
A constructive trust should be used when the D holds property worth more than the Ps claim b/c the P will receive the more valuable property.
Value increases –> constructive trust
Value decreases –> equitable lien + deficiency judgment
TRACING
Court will force D to convey title to misappropriated property OR its product.
BFP prevail over P.
SPECIFIC PERFORMANCE
P must show
1. a K exists
2. the P has performed or is ready, willing, and able to perform
3. the legal remedy is inadequate
4. enforcement is feasible and
5. there are no defenses available to the D
TIME IS OF THE ESSENCE CLAUSE
Such a clause must be expressly included in the K, in its absence, a reasonable time to perform will be implied.
If K is wholly executory the clause will be strictly enforced.
If the K is partially executed the court will seek to avoid the effect of the clause so as to avoid forfeiture.
The court will be likely to avoid the effect the clause if
1. the loss is small
2. the forfeiting party would suffer undue hardship
3. the tardiness is de minimis or
4. the D has waived the clause
DEFICIENCIES IN LAND SALE K
The main concern is whether the seller can deliver the quantity or quality of land promises. If there is a deficiency, the seller may get specific performance only if the deficiency is minor. A buyer, on the other hand, can get specific performance despite substantial deficiencies but will be unable to get specific performance if the deficiency is very large.
LEGAL REMEDY INADEQUATE IN K
- speculative damages
- Ds insolvency
- ongoing harm
- unique goods
WHETHER PERSONAL PROP IS UNIQUE
If personal property is involved, see whether it is
1. unique in kind
2. of personal significance to the buyer or
3. in short supply.
WHETHER PERSONAL SERVICES ARE UNIQUE
Even if the services are unique, equity wont force a person to provide personal services to another, b/c of involuntary servitude problems. However, an injunction may be issued to prevent D from working for someone else.
PRINCIPLE OF AFFIRMATIVE MUTUALITY
If buyer can get specific performance, then fairness dictates that seller can get specific performance.
EQUITABLE CONVERSION
When K signed, buyer owns property and bears risk of loss.
COVENANTS NOT TO COMPETE
FL allows as long as reasonable in time, area, and line of business. To be enforceable
(i) must be set forth in a writing signed by the person against whom enforcement is sought
(ii) P must show there is a legit business interest
(iii) the restraint must be reasonably necessary to protect the legit business interest
REBUTTABLE PRESUMPTIONS OF REASONABLENESS IN COVENANT NOT TO COMPETE
Cases involving trade secrets
Presumptively reasonable if not more than 5 years, and unreasonable if more than 10 years.
Former employee, agent or IC
Presumed that a restraint of 6 months or less is reasonable
ENFORCEABILITY OF LAND SALE K
check to see if parties/land are in the jdx.
1. if both parties and res are before court, feasible.
2. if the seller and the res are before the court, feasible.
3. if buyer and res are before the court, feasible.
4. if both parties are in forum, and res is outside of state, the recent trend is for equity courts to decree that the property be conveyed.
DEFENSES TO SPECIFIC PERFORMANCE
Includes the standard contract defenses.
Includes equitable defenses.
RESCISSION
Rescission voids the K and leaves the parties as though the K was never made.
GROUNDS FOR RESCISSION
Generally to be eligible, P must show that there was a defect relating to the formation of the K. Grounds for rescission must have occurred either before or at the time the K is entered into.
1. mutual mistake
2. unilateral mistake
3. mistake of law
4, misrepresentation
5. other grounds (duress, UI, illegality, lack of capacity, failure of consideration)
RESCISSION AND MUTUAL MISTAKE
General rule is that only a mutual mistake will suffice for rescission. The mistake must go to a material fact. Mutual mistakes as to collateral aren’t grounds.
REFORMATION
3 part test
1. valid K
2. defect in the K
3. defenses
The court will NOT reform the K if doing so would affect rights of a BFP
