Midterm* Flashcards
TYPES OF REMEDIES
(1) Compensatory - damages (legal)
(2) Preventative - Injunctions or Declaratory Relief (Equitable)
(3) Restitution - Damages measured by Improper Gain (Equitable)
(4) Punitive - Damages Increased to Punish
(5) Ancillary - Fess, Costs, Writs, Execution, Attachments, Receivers, etc.
(6) Nominal - No actual injury. The claimant was right, but they suffered no real harm.
PREVENTATIVE REMEDIES
Designed to stop the action before the injury occurs
RESTITUTION REMEDIES
Restitution focuses on unjust enrichment and awards to P all that D gained at P’s expense.
POLICY CONSIDERATION (i.e. ANTITRUST RULE)
P must prove:
(1) their injury is the type that the law was designed to prevent; and
(2) which flow from what makes the defendant’s acts unlawful.
There must be a connection between the law that was violated P’s claimed damage/injury
SPECIAL CIRCUMSTANCES
Additional damages that can be awarded if put on notice
RIGHTFUL POSITION
The fundamental principle of damages is to put injured parties in the place they would have been but for the wrong of the other party either through:
(1) Substitutionary; or (2) Specific.
(1) SUBSTITUTIONARY RELIEF
Substitute for what plaintiff lost, typically with dollars. Hard to measure and often inadequate.
(2) SPECIFIC RELIEF
Restore the specific thing the Plaintiff lost. Some injunctions, specific performance, replevin, tracing.
COMPENSATORY DAMAGES
Purpose of remedy is to restore the person as nearly as possible to the position they would have been in had the damage not occurred (Hathaley) Sum of money designed to make Plaintiff as well off as s/he would have been if s/he never had been wronged. The damages cannot be speculative, and the Plaintiff must mitigate the damages.
TORT BURDEN OF PROVING DAMAGES
Tort Plantiff can only recover injuries that flow from natural consequences and are foreseeable.
The plaintiff has the burden of proving their damages with reasonable certainty. Furthermore, in torts proximate cause and cause-in-fact apply. Proximate cause is a policy matter that looks to see if the harm is too remote for liability and cause-in-fact is a but-for approach stating that but for this action, the harm would not have occurred.
CONTRACT BURDEN OF PROVING DAMAGES
In contract, must have been reasonably foreseeable at the time of K and must be unavoidable. P has duty to mitigate.
LESSER OF TWO RULE (MAJORITY)
A plaintiff whose PROPERTY has been injured may recover the lesser of diminution in value or replacement cost. It applies even if the property is completely destroyed. It applies in ALL commercial settings. Its only EXCEPTION
may be for specialty properties where replacement cost is considered even if more because the FMV does not fairly compensate.
PAST INVASIONS (TORT re: LAND)
(1) If one is entitled to a judgment for harm to land resulting from a past invasion and not amounting to a total destruction of value, the damages include compensation for
(a) the difference between the value of the land before the harm and the value after the harm, or at his election in an appropriate case, the cost of restoration that has been or may be reasonably incurred,
(b) the loss of use of the land, and
(c) discomfort and annoyance to him as an occupant.
(2) If a thing attached to the land but severable from it is damaged, he may at his election recover the loss in value to the thing instead of the damage to the land as a whole.
FUTURE INVASION (TORT re: LAND)
(1) If one causes continuing or recurrent tortious invasions on the land of another by the maintenance of a structure or acts or operations not on the land of the other and it appears that the invasions will continue indefinitely, the other may at his election recover damages for the future invasions in the same action as that for the past invasions.
(2) If the future invasions would not be enjoined because the defendant’s enterprise is affected with a public interest, the court in its discretion may rule that the plaintiff must recover for both past and future invasions in the single action.
(3) The damages for past and prospective invasions of land include compensation for
(a) the harm caused by invasions prior to the time when the injurious situation became complete and comparatively enduring, and
(b) either the decrease in the value of the land caused by the prospect of the continuance of the invasion measured at the time when the injurious situation became complete and comparatively enduring, or the reasonable cost to the plaintiff of avoiding future invasions.
VALUE OF GROWING CROPS
Valued as of the time of harvest, even if a litigant can show with some reliability that Plaintiff would have held the harvest for sale at a later time and at a different price.
VALUE OF TREES
Usually valued at market value. Courts have also awarded the cost of replacement, if not unreasonably excessive.
VALUE OF PETS
Owner of a pet that is killed can recover only the market value of the pet as property.
If the pet is injured, owner can recover the costs of medical care.
Intentionally killed or injured pet - can recover emotional distress in intentional tort.
VALUE OF ANIMALS
Plaintiffs are entitled to the market value or replacement cost of the animals at the time of taking plus the use value between the time of the taking and when they should prudently have replaced them. (Hatahley) Generally, loss of use for a damaged property is awarded, but loss of use of a destroyed property is not.
FAIR MARKET VALUE (FMV)
The value of a thing that is lost or destroyed, measured by the price someone would pay for it in an arm’s length open transaction in the market. This should incorporate loss of rents, loss of use, etc.
*A recent sale is best evidence of FMV, but not conclusive, there is a rebuttable presumption that FMV was purchase price.
TIMING FOR MEASURING FMV FOR CONTRACT
Because the market value fluctuates, courts measure FMV for contract cases at the time of the breach.
TIMING FOR MEASURING FMV FOR TORTS
Because the market value fluctuates, courts measure FMV for Tort cases at the time of the wrong
SPECIALTY PROPERTY EXCEPTION
Test for special property is not whether there are, or were, special unique aspects to the property, but rather whether the use to which the property is put at the time of the tort is a unique use, suitable only to the owner, and without a FMV
Ex: churches, hospitals, clubhouses and spaces held by nonprofit organizations for use as community centers
For special property that has less FMV than its value to Plaintiff, court will allow diversion from FMV (general rule) by using replacement or restoration costs. But those need to be :
(1) Reasonable costs; and
(2) Reasonably Necessary.
LOSS OF USE (IRL)
Loss of use damages are a form of special tort damages that are measured by either the cost of:
(1) Interest on market value of the property from time of loss to time a prudent plaintiff would have mitigated;
(2) Renting a replacement; or
(3) Lost profits.
Pain and suffering are awarded only allowed in extreme cases and should be individual not common.
NOTE: Loss of use for a damaged property is awarded, but loss of use of a destroyed property is not.
MEASURE OF CONTRACT DAMAGES
Two basic measure for putting a Plaintiff in the rightful position after a breach of contract:
(1) Expectancy Interest (majority approach);
(2) Reliance Interest (minority approach)
EXPECTANCY INTEREST (MAJORITY)
In contract or warranty P gets the “benefit of the bargain”. This is the majority approach. It provides the monetary value of the promised performance.
RELIANCE INTEREST (MINORITY)
Designed to put the Plaintiff in the position s/he would have been in prior to entering the contract. It is basically out of pocket losses incurred in reliance on a promise.
BREACH OF CONTRACT: FAILURE TO PAY MONEY
Where a breach of contract is only for failure to pay money, only the principal plus interest is the proper measure of damages. (Meinrath)
LOST VOLUME SELLER
Can recover lost profit on a sale even if they sell the exact item to a second buyer. But for the breach, the seller would have sold twice.
If seller has only ONE type of good to sell and the buyer breaches, seller may recover contract price minus fair market value plus incidental damages. (Neri)
WARRANTY ITEMS - CHATLOS RULE
Plaintiffs can recover the difference between the value of the goods as delivered and the value of the goods if they had been as warranted, plus incidental or consequential damages. Even if the contract price was favorable to the customer.
CONSEQUENTIAL DAMAGES
Also known as Special Damages are those that
(1) do not flow directly from the breach or wrong but result naturally from the act;
(2) pleaded and proved with reasonable certainty, which means they cannot be speculative;
(3) proximately caused by the wrong in tort or for contract, foreseeable; and
(4) at time of contracting, it was unavoidable; and
(5) subject to mitigation by the injured party.
CONSEQUENTIAL DAMAGES EXCLUSIONS
Consequential damages exclusions are available to contracting parties based on:
(1) Freedom of contract; but
(2) Such limitations allow for at least minimum adequate remedies.
Exclusions of consequential damages are not necessarily invalidated when limited contractual remedies fail to satisfy their essential purpose. (Majority)
THIRD PARTY INTERFERENCE CONSEQUENTIAL DAMAGES
One who is liable for interference with contract is liable for pecuniary loss of the benefits of the contract plus consequential losses for which interference is a legal cause. (Texaco)
MEASURE OF TORT DAMAGES (SMITH RULE)
An action in tort allows recovery only what is lost - proximately caused by the Defendant’s wrongful conduct, not the expectancy of what MIGHT have been gained. It can include any legitimate outlay attributable to the fraudulent conduct.
P gets the delta between the promised value and the actual FMV value.
INCIDENTAL DAMAGES
Reasonable expenses related to breach including:
(1) Commercially reasonable charges;
(2) Expenses related to cover;
(3) Return, resale, and expenses related to reasonable rejection or stopping delivery of goods.
SPECIAL DAMAGES
Economic losses caused by consequences specific to the contract in question. They include BOTH consequential and incidental damages
ECONOMIC LOSS DOCTRINE
Bars recovery in tort for strictly economic losses arising from a contract.
INTENTIONAL INTERFERENCE
One who is liable for interference with contract is liable for pecuniary loss of the benefits of the contract plus consequential losses for which interference is a legal cause.
Avoidable Consequences
Avoidable consequences is a limitation on damages that says P may not recover for those losses she could have avoided by reasonable efforts to mitigate the losses. P has a duty to mitigate damages. Reasonableness is assessed objectively.
EMPLOYMENT MITIGATION
Employment plaintiffs have a duty to use reasonable diligence in finding other suitable employment.
MEDICAL TREATMENT MITIGATION
Personal injury Plaintiffs cannot refuse reasonable medical treatment that might have mitigated their damages.
FINANCIAL INABILITY
Plaintiffs without financial means to mitigate may not be held responsible.
INVESTING MITIGATION
Plaintiffs can choose a more secure low-risk investment (the standard is reasonable not next-best)
SEAT BELT RULE
Failure to wear a seatbelt is only admissible in a minority of jurisdictions.
OFF-SETTING BENEFITS
Claims for lost wages are (reduced) offset by wages in a new position as long as it only accrued as a result of the injury. This ensures that the injured party does not receive double compensation for the same loss.
COLLATERAL SOURCE RULE
The general common law rule was that compensation a Plaintiff receives from other sources is not admissible in evidence and does not reduce damages owed by Defendants. (Oden)
But most states (such as NY) have modified this rule by statute to be more limited by:
(1) If a court finds that any such cost or expense will, with reasonable certainty, be replaced or indemnified from any collateral source, it shall reduce the amount of the award by such finding.
(2) There must be a direct link between the item of loss and the collateral source before an offset is made. (Oden)
INDIRECT ECONOMIC HARM
Plaintiffs cannot recover for indirect economic harm. (Pruitt)
LIMITING THE SCOPE OF LIABILITY
(1) Negligent defendants are only liable for harms that result from the risks that made the actor’s conduct tortious;
(2) An actor is not liable for harm when the tortious aspect of the actor’s conduct was of a type that does not generally increase the risk of that harm
PER DIEM ARGUMENTS
Tool of persuasion used by counsel to suggest to the jury how to quantify damages .
The majority allow lump sum arguments based on per diem calculations. However, the Golden Rule argument “put yourself in P’s shoes” is not allowed – too prejudicial.
WRONGFUL DEATH
P can always get funeral expenses and compensation for decedent’s loss of income, most jurisdictions also allow “services” such as housekeeping and child rearing. A majority also allows loss of “society” such as love, affection, companionship. A minority also allow for grief and emotional distress. A very few allow loss of life to the decedent themselves
EMOTIONAL DAMAGES
ED damages are only available for intentional torts, not recoverable in contract, unless there is an additional showing such a physical injury or where a loved one is witnessed being injured; specific types of negligence are exceptions (false news of death, mishandling of a deceased person, and leaving disgusting foreign matter in a food product).
Emotional distress (ED) damages must not be outside the scope of similar situations and require supporting evidence. However, courts should not consider other verdicts in reviewing a jury’s award in a specific case. Minority rule allows consideration of prior verdicts.
SECTION 1983 CLAIM
In order to prevail on a 1983 claim against the D, P must prove:
(1) Defendant acted under color of state law; and
(2) Defendant’s actions or lack thereof was prejudicial towards Plaintiff.
But, P does not recover damages merely for violation of a Constitutional right. P must show proof of actual compensable injuries and get a jury to measure those damages. (Carey)
If there is no compensable injury, at most, P will receive nominal damages, which is around $1.
REMITTITUR
The appellate court gives the prevailing party the choice of a reduction in the amount of the judgment or a new trial (distinguished from the remittitur in CA court of Appeal)
ADDITTUR (MINORITY)
The appellate court gives the option to defendant of a new trial or an increase in damages.
PUNITIVE DAMAGES
Punitive Damages are retribution for past misdeeds, deterrence against future wrongdoing, and compensation for intangible injuries.
Punitive damages are intended to punish D and deter both the D and others. Punitive damages are generally unavailable in breach of contract actions, however they become available if the breach of contract is accompanied by a related tort, like fraud. The standard of culpability for punitive damages varies, but courts use terms like willful, wanton, reckless disregard for safety of others, and despicable (CA). The burden of proof is often more than preponderance and in California it is clear and convincing evidence.
Appellate Review re: Punitive Damages
Upon Appellate Review, sparingly used, tested at time of execution, balanced between substantive and procedural:
(1) Substantive factors: Focus on whether the award is “grossly excessive,” the guideposts for which are: (1) degree of reprehensibility, (2) ratio of compensatory to punitives, and (3) sanctions for comparable misconduct.
(2) Procedural factors: Focus on whether Defendants are being punished for injury to absent Plaintiffs without process to challenge their individual harms.
TORT or CONTRACT CLAIM?
Good lawyers → convert contract breach to a tort to obtain both non-economic damages and punitive damages for an independent tort committed in contractual setting.
