florida equity Flashcards
development of equity
(1) Development of Equity
Historically, there were two courts: courts of law and courts of equity
After these courts merged in the U.S., judges wear two hats:
* Providing equitable remedies; AND
* Providing legal remedies
Legal remedies are based on law
Equitable remedies are discretionary and relief is based on what the court deems to be just
(2) General Characteristics of Equitable Remedies
remedy at law inadequate
Equitable remedies are subordinate to remedies available at law.
Only available if the remedy at law is inadequate
Legal remedies are inadequate and equitable relief may be appropriate when:
* Money damages are insufficient to fully compensate for irreperable harm;
* Legal damages are uncertain and/or speculative
* The subject matter of the litigation is unique
* The defendant is insolvent or
* Compensation for the harm would require the filing of successive lawsuits
discretionary
Court has discretionary powers to award both legal and equitable remedies in the same decree
personal
Equitable remedies are personal
compels or prohibits conduct by a party
enforceable
Courts will not grant equitable relief unless the court can enforce it
injunctions
This type of relief is discretionary
Definition—The court orders the defendant to:
* Stop an act—prohibitory injunction; or
* Perform an act—mandatory injunction
* Also known as “writs”: writ of mandamus, writ of prohibition
(1) Elements for an injunction
No adequate legal remedy exists;
Protectable right is involved;
Court enforcement of injunction is feasible, practical, and effective;
* the court can actually enforce these rights
hardship to defendant will not outweigh benefits to plaintiff;
* Commonly referred to as the “balancing test”
* No available equitable defenses that would defeat the entry of an injunction
temporary injunctions
Temporary Restraining Orders (TROs) and Preliminary Injunctions are treated basically the same
Purpose is to maintain status quo until a full hearing can be held
Plaintiff (movant) MUST show:
1. irreperable harm
2. no adequate remedy at law and
3. Substantial likelihood of success on the mertis
Notice is generally required to be given, unless:
* There is immediacy and emergency
* Irreparable harm may occur if not granted immediately
* Plaintiff must certify a good faith attempt to notify defendant
* note: If notice is required, the plaintiff must give the defendant reasonable notice before the hearing to allow the defendant to prepare.
Bond requirement
* To issue a temporary injunction, a bond must be set before the injunction is issued
* The party subject to the injunction may have some damages if the injunction is wrongfully
issued
* The plaintiff must provide a bond to cover the defendant’s injuries if the injunction is wrongfully issued
permanent injunctions
the final judgment of a court after adjudication on the merits
(1) requirements
Plaintiff must show that she:
1. Possesses a certain and clearly ascertainable right in need of protection;
2. Has no adequate remedy at law; and
3. Would suffer irreperable harm without the requested relief
no adequate remedy at law
If pleadings demonstrate that there is a possibility of a legal result, the court cannot pursue equitable remedies.
irreperable harm
Must be proof present that irreparable harm will occur
Very fact-specific: what is the harm that will occur?
Typical situation—an injured party cannot be compensated for damages, or damages are so speculative they cannot be measured
Plaintiff must demonstrate that he is entitled to judgment at trial
(2) order
Must be specific regarding injunctions, or any final restraining order, describing in detail what the court is ordering
It is not sufficient for the plaintiff to rely on pleadings; must be included in the order
Must be limited in scope and not go further than is necessary to safeguard plaintiff’s rights
permanent injunctions: who is bound?
Injunctive relief, whether temporary or permanent, is binding only upon:
* The parties to the action
* Officers of a corporation
* agents of the defendant
* Employees of the defendant
* attorneys of the defendant
* Those persons in active concert or participation with any of the above, who receive actual notice of the order by personal service or otherwise
injunctive relief in tort cases: torts against property
(1) trespass
An invasion of the exclusive possession of land
When the trespass is continuous, equity may enjoin the harm in order to prevent a multiplicity of lawsuits
Generally, courts engage in a balancing of hardship (the benefit to the plaintiff versus the detriment to the defendant)
Typically involves both injunctive relief and monetary damages
(2) waste
An act (or failure to act) by a person in lawful possession of property that causes the unjustifiable dimunition of a future interest in the property
An injunction may be available in two types of waste: destructive and permissive
* destructive: positive acts that cause the harm
* permissive: failure to act causes harm
* ameliorative: acts that cause increase of value in property, but the nature of the property is changed
(3) nuisance
Private nuisance
* Harm is to a specific person, or a limited group of people
* An injunction generally is available
public nuisance
* Harm to numerous people
* Generally, the court will balance the hardships
* A court will consider equitable relief for a public nuisance only when the plaintiff can
establish special harm not suffered by the public generally
(4) conversion or trespass to chattel
Wrongful possession of another’s property
Chattel must be unique to seek an injunction
injunctive relief in torts: personal torts
(1)Defamation
Generally, equitable relief is not available
* Courts are reluctant to prevent the publication of articles, books, etc.
* An injunction would be a severe limitation on first Amendment rights
However, if a defendant threatens to repeat a statement that has already been found to be
defamatory by a court, a prohibitory injunction may be issued
(2) abuse of process
Malicious or frivolous filing of lawsuits brought under fraudulent jurisdiction, or other types of fraud
Can possibly give rise to injunctive relief
injunctive relief in torts: business, commercial, and intellectual property rights
(1) Interference with Business Relationship
Generally, falls under the category of unfair competition, which interferes with business relationships
If damages are too speculative, injunctive relief may be available
Also requires a showing that the harm would be continued into future
elements
- Existence of a business relationship under which plaintiff has legal rights;
- Defendant’s knowledge of the relationship;
- Intentional and unjustified interference with the relationship; and
- damages to the plaintiff as a result (may be speculative)
Defenses
- Responsibility for a third party
- financial interest
(2) Unfair Competition/Misappropriation
“Passing off property” of another as your own
court may consider injunctive relief
(3) trade secrets
Safeguards specific information for business entities
Injunctive relief may be granted
(4) trademarks
Words, names, symbols, and logos
Protected by trademark laws, but can be enforced by injunctive relief
(5) rights of publicity
Injunction can be available for misuse
(6) inventions
Patented, novel inventions
Infringement upon patent is enjoined if:
1. party possesses clear ascertainable right
2. Irreparable harm;
3. No adequate remedy at law;
4. likelihood of success
injunctive relief in torts: physical harm and domestic violence
Courts may grant an injunction or TRO in order to prevent physical harm upon filing, or if the party is in fear of harm by other party.
injunctive relief in torts: Tortious Conduct That is Also Criminal Conduct
General Rule: A court will not enjoin a criminal act because the act must be adjudicated before the court can determine that it was a crime.
However, almost all criminal acts are also torts of some kind, so it is possible for a court to grant an injunction against tortious conduct that also rises to the level of criminal conduct.
injunctive relief in torts: political rights
Enforcement of a statute (e.g., voter fraud), may be a basis of injunctive relief
specific performance in contracts cases
Court may direct performance pursuant to a contract
specific performance
To get specific performance, the plaintiff must show:
* The existence of a valid contract and the fulfillment of all of its conditions;
* The inadequacy of legal remedies;
* That enforcement is feasible;
* mutuality of remedy; and
* Buyer can force the buyer to sell and seller can force the buyer to buy + The absence of any defenses
Specific performance is in the sound discretion of the court
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Requirements for Specific Performance
(1) valid contract
Terms must be definite
Other requirements:
* Persisting with non-compliance despite court order (contempt);
* All conditions precedent have been satisfied;
* Parol evidence is allowable to fill in and determine terms of contract;
* any reasonable consideration will suffice
* Plaintiff must be ready, willing, and able to perform, and time must be of the essence;
If one party can only partially perform, a court can award both monetary damages for a portion, and equitable remedies for the other portions
(2) Inadequacy of Legal Remedy
Could mean speculative contract, insolvent defendant, could result in multiple lawsuits or the subject matter is unique (e.g., real property)
Liquidated damages clause: must state that damages are the sole remedy in order to preclude equitable remedies
Closely-held corporation: stock not available on the open market, so stock purchase may be enforceable by specific performance
Speculative damages: actual calculation of money is not possible
(3) Feasibility of Performance
Cannot be unduly burdensome
Weigh the injustice of failure to perform versus the burden of enforcement
(4) defenses
Standard contract defenses are available—improper formation, impracticability, fraud, Statute of Frauds
Equitable defenses are also available— unclean hands, laches, undue hardship
(5) Against Whom Specific Performance May Be Enforced
Persons involved in the contract
Persons in privity with power to control aspects under the contract
undisclosed principals of the contract
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land sale contracts
Land is always unique and cannot be easily substituted in the marketplace
(1) in general
Contract must be in writing and signed by party to be charged
Subject to part performance exception to the Statute of Frauds:
* Delivery of the property (possession);
* Improvements made to the property; and
* Paid for all or part of the purchase price of the property
Contract must establish that there is no way to return to status quo, and no money damages sufficient to compensate
Terms must be definite (parties, property, and purchase price)
(2) Doctrine of Equitable Conversion
Executory period between the time when the contract for sale is entered into and the time when the actual closing occurs
* Buyer is considered the equitable owner
* Seller is considered the holder of legal title as security for the balance of purchase price
* Seller cannot alter the value of the property during this time
Upon death of seller, executor can seek specific performance if buyer refuses; likewise, if seller refuses to convey deed, buyer’s heirs can seek specific performance
Other applications of equitable conversion:
* Testamentary directions to sell: mandatory equitable conversion is deemed to happen
upon death
* Option contracts: equitable conversion occurs when the option is exercised
* During the period between exercising option and closing, risk of loss falls on the vendee (buyer), unless the loss is caused by seller or vendor
specific performance in contracts cases: promissory estoppel
Must be reasonable in time (generally 2 yrs) geography
Specific performance may be available if:
* The covenant is expressly contained in the contract;
* The services involved are unique; and
* The covenant is reasonabel
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Personal Property and Unique Chattels
If chattel is unique, specific performance may be permitted.
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Testamentary Dispositions
only enforceable by specific performance for gifts unique and specific
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Types of Contracts NOT Amenable to Specific Performance
(1) Personal Service Contracts
This would be the equivalent of involuntary servitude and is difficult to enforce.
(2) Construction Contracts
Very difficult to specifically enforce
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promissory estoppel
To establish an action for promissory estoppel, a plaintiff must allege:
1. Plaintiff detrimentally relied on a promise made by the defendant;
2. The defendant reasonably should have expected the promise to induce reliance in the form of action or forbearance; and
3. The injustice can be avoided only by enforcement of the promise against the defendant
* Must be proved by clear and convincing evidence
* Reliance damages and restitution are typically available
Restitution—defendant is unjustly enriched by the plaintiff; defendant must return that benefit to the plaintiff
Reliance—plaintiff can recover out of pocket expenses paid or spent because of relianc eon the contract
Both restitution and reliance can be plead, but only one can be recovered
recission and reformation: defenses to equitable relief
recission
(1) definition
The court voids a contract and seeks to return the parties to a pre- contract state (as if no contract had ever been made)
Courts are reluctant to order recession because agreements between the parties should control.
(2) Circumstances in which the court may rescind
mutual mistake
Mutual mistake as to a material fact or law
Party must show that it was relied upon, and that it was material
Unilateral mistake will generally not result in rescission, unless:
* Non-mistaken party was aware of mistake, and took advantage of it;
* If severe hardship would be suffered by mistaken party if forced to accept the bargain; or
* Non-mistaken party had done nothing yet in reliance upon contract
illegality
undue influence
duress
lack of capacity
failure of consideration
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reformation
(1) definition
A written contract that does not conform to the parties’ intent
Court in equity may change the terms of the contract to conform with the actual intent of
party
(2) requirement
Courts will consider reformation if:
1. there is a valid original agreement
2. the original agreement was in writing and
3. the original agreement does not reflect the intent of the parties
Party seeking reformation has the burden of proof to establish by clear and convincing evidence
(3) defenses
General equitable defenses
Sale to a bonafide purchaser for value without notice
Plaintiff’s negligence does not bar reformation
Statute of Frauds does not bar reformation (parol evidence is admissible)
(4) gifts
May be reformed when there is a mistake of law by donor
No reformation available for donee
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defenses to equitable relief
(1) unclean hands
The plaintiff has engaged in wrongdoing that relates to the specific transaction that is the subject matter of the dispute and causes prejudice to the defendant
(2) laches
If the defendant is prejudiced when the plaintiff unreasonably delayed initiating or pursuing her claim, the doctrine of laches will bar the lawsuit
Can be affirmative defense for defendant
Plaintiff must have known or reasonably should have known about the ability to bring the action
(3) undue hardship
Balance of hardship between the parties
Once in equity, the court will do what is fair under the circumstances
additional forms of equitable relief
(1) Constructive Trust
May be imposed by a court in equity to prevent unjust enrichment when the wrongdoer has gained title to property by fraud, mistake, breach of fiduciary duty, undue influence, duress, or misrepresentation
Requirements
1. Defendant has legal title to real or other property belonging to the plaintiff;
2. Defendant will be unjustly enriched if title remains in the defendant’s possession;
3. There is no adequate legal remedy; and
4. A fiduciary or confidential relationship exists between the parties
Tracing: imposed on actual property, and any property purchased solely with proceeds of misappropriated property
(2) Equitable Lien
Another vehicle to prevent unjust enrichment
May be imposed by a court on property when the defendant has unlawfully obtained property belonging to the plaintiff
Gives plaintiff a security interest in property; takes priority over other creditors because it relates back to when the defendant unlawfully obtained title to the property
(3) Subrogation
Another equitable doctrine intended to prevent unjust enrichment
When one party discharges the debt or other obligation owed by the defendant, he may seek repayment from the defendant.
