Remedies Flashcards
Constructive Trust
an equitable remedy imposed by the courts to prevent unjust enrichment where a person holds title to property that can be traced to property wrongfully obtained from the plaintiff. It compels the person holding the wrongfully obtained property to convey it to its rightful owner.
The plaintiff can trace the property to another form, as long as the trust res can be identified. Additionally, the plaintiff is entitled to any increase in value in the property to avoid unjust enrichment to the defendant. Where the property has been
commingled with other funds and withdrawals have reduced the account’s balance below the plaintiff’s claim, the plaintiff is entitled to the next lowest intermediate balance
Most courts require the plaintiff to show that the legal remedy is inadequate.
Equitable Lien
Like a constructive trust, an equitable lien is imposed on property to prevent unjust enrichment. However, unlike a constructive trust, with an equitable lien the plaintiff is not entitled to any increase over the value of the property that was originally misappropriated.
The lien can be foreclosed and the property sold to satisfy the plaintiff’s claim. A P can recover personally against the D for any deficiencies.
To impose an equitable lien, the plaintiff must show that (i) the defendant misappropriated the plaintiff’s property under circumstances creating a debt or an obligation to pay, (ii) the plaintiff’s property can be traced to property held by the defendant, (iii) the defendant’s retention of the plaintiff’s property would result in unjust enrichment, and (iv) the legal remedy is inadequate.
When D commingles funds in single account
D withdraws the funds, causing the balance to sink below amount of P’s claims, the plaintiff can obtain a lien only to the extent of the lowest intermediate balance of the account, unless it can be shown that D expressly intended the subsequent addition as restitution. (deposits 2k of proceeds of stolen ring to account with 5k of his own. then the balance drops to 600, before reaching current balance of 3k.the P can only obtain 600, the lowest intermediate balance, unless she can show D meant for the subsequent addition of 2400 to be used as restitution)
Remedies for conversion
Money damages (FMV at time of conversion) or replevin
a BFP may be treated as a converter if the chattel was stolen from its true owner. Each subsequent converter, even another BFP, is liable for the value of the chattel on the date of the acquisition. The P can see and recover judgment against each, but only entitled to one satisfaction
Quasi-contract
restitutionary remedy when D is unjustly enriched by the actions of the plaintiff. they are not contracts, but obligations created by law for reasons of justice. To recover, the P must prove: (1) it conferred a benefit on the defendant by rendering services (2) with the reasonable expectation of being compensated for its value (3) the D knew or had reason to know of the P’s expectation and (4) the D would be unjustly enriched if he were allowed to retain the benefit without compensating P.
Where P renders goods or services, It may recover the value of the goods and services or, if tangible property has been transferred to the D, it may replevy the property
Transfer of the property to a BFP cuts off the right to equitable remedies such as replevin.
Transfer to a BFP
Equitable remedies are cut off by the transfer of property to a BFP
Purchase Money Resulting Trust
A court may impose a purchase money resulting trust after an acquisition of real property in which one person takes legal title in the property and another person supplies consideration BEFORE or at the same time the other person takes title. The person who obtained legal title is deemed the trustee of a resulting trust, and the person who furnished consideration is deemed the beneficiary. The trustee’s sole duty is to convey his title to the beneficiary. However, where the beneficiary pays only part of the purchase price, the resulting trust in her favor will be for only a pro rata portion of the title. Because resulting trusts are implied by the court, no writing is necessary
Generally, the court will not impose a trust where title taken in the trustee’s name was to avoid creditors to the alleged beneficiary. However, this will not bar imposition of a trust outright when the illegality of the purpose is slight compared to the trustee’s potential unjust enrichment.
A trustee/title holder may rebut the presumption of trust by submitting evidence that no trust was intended and that the money used as consideration was a gift, loan, or payment of a debt. If the trustee and the beneficiary are close relatives, a gift is presumed.
Injunctions
A P may also seek an injunction, which is an order requiring D to do something (affirmative) or not do something (negative). There are three types of injunctions: a temporary restraining order, a preliminary injunction, and a permanent injunction.
TRO
an emergency order imposed to maintain the status quo until a regular, adversary-type hearing may be held on a motion for a preliminary injunction. A TRO can be granted without notice to the nonmoving party in limited circumstances like the nonmoving party may hide the subject matter. In any case, the moving party must prove that (1) he will suffer irreparable injury before a preliminary injunction can be obtained (2) a balance of hardships weighs in his favor and (3) a likelihood that he will succeed on the merits of his underlying claim. TROs can last only until a motion for a preliminary injunction can be heard (never in Bailey’s lifetime).
Preliminary Injunction
A preliminary injunction is an order that maintains the status quo until a trial on the merits can be held. The moving party must prove that (1) he has given notice, (2) he will suffer irreparable injury before a preliminary injunction can be obtained (3) a balance of hardships weighs in his favor and (4) a likelihood that he will succeed on the merits of his underlying claim
Permanent Injunction
requires a showing of (1) inadequate legal remedy (2) feasibility of enforcement; (3) balancing of hardships; and (4) no defenses (I forgot bar day).
Enforcement is feasible when the court has personal jurisdiction over the defendant. If the defendant refuses to obey the court’s command, she can be held in contempt of court. Courts also consider the amount of oversight they would be required to use.
Laches
Under the defense of laches, if a plaintiff has unreasonably delayed in asserting an equitable claim, and the delay has resulted in prejudice or harm to the defendant, relief will be barred. Although laches is not the same as the statute of limitations (which bars cases based on the passage of a specific amount of time rather than based on harm caused by the passage of time), in most states the period for laches cannot be longer than the period applicable to the underlying case at law.
Under the doctrine of laches, we must look at whether the passage of time has prejudiced the defendant or caused any harm. The prejudice envisioned is loss of witnesses, evidence, or the like; it is harder to defend now than it would have been at an earlier point. The harm envisioned usually is financial harm that would not have happened if the plaintiff brought the case at an earlier time.
Contract Remedies
damages, restitutionary remedies, specific performance, recission, and reformation.
SP for a K
Specific performance is a mandatory decree or injunction that orders a contracting party to perform that which she has promised to perform under the contract. The purpose of specific performance is to give the injured party the benefit of actual performance, rather than its equivalent in money damages.
To obtain an order for specific performance: (i) there must be a contract with definite and certain terms between the parties; (ii) the plaintiff must already have performed or be ready and able to perform all of his conditions under the contract; (iii) the legal remedy must be inadequate; (iv) it must be feasible for the court to enforce the decree; and (v) the defendant must not have any defenses (Cha Cha is fairly difficult)
Reformation
For reformation to be an appropriate remedy, there must be an enforceable contract.
Reformation will be granted when neither party to an agreement is aware that there is a discrepancy between the writing and their prior agreement. Note that the majority view is that reformation will not be denied because the party seeking it was negligent in failing to read the writing. Overall, reformation requires there to be a valid contract, grounds for it, and no defenses (very good dog).
Grounds include: mutual mistake of material fact, unilateral mistake if non-mistaken party would suffer undue hardship or knew or should’ve known of mistake. Misrepresentation is P can show they actually relied on misrepresentation of fact
Rescission
Under the contract remedy of rescission, a plaintiff can effectively wipe out the contract and restore the status quo prior to the contract so long as the defendant does not have any legitimate defenses. Thus, recession requires there to be grounds for it and no defenses (good dog).
Grounds include: Formation Problem and K was never valid. Mutual mistake of material fact, or unilateral mistake only if non-mistaken party would suffer undue hardship or knew or should have known of mistake. Misrep if P can show that they actually relied on misrep of a material fact
Election of Remedies (defense)
the general rule is that the remedy of damages for fraud and that of rescission of the contract based on fraud are inconsistent, since any election to seek damages in effect affirms the existence of the contract, whereas the rescission suit seeks to have the contract set aside. If the plaintiff first seeks to rescind the contract, that action is not a bar to a subsequent suit for damages. However, if the plaintiff even files a suit for damages, it is an affirmance of the contract and a bar to any later suit for rescission.
Expectation damages for real property
difference b/w K price and market price
Abatement: where property measures less than K indicates, court can abate price commensurate with th actual property size
Expectation damages for services
cost of substitute performance
Buyer’s UCC Damages
when seller has goods: difference b/w K price and cover, OR K price and market price (at the time buyer learned of the breach), and consequential/ incidental damages
When buyer has goods: difference b/w perfects goods and value of goods as delivered
Seller’s UCC damages
Buyer has goods: full K price
Seller has goods: difference b/w K price and resale price
- Seller did not resale: difference b/w K price and market price (at time delivery was to occur)
- Lost volume seller: lost profits if (1) big enough supply to make both the K sale and resale (2) would likely have made both sales (3) would have made a profit on both sales
(CAN RECOVER INCIDENTAL, BUT NOT CONSEQUENTIAL)
Consequential damages
direct and foreseeable consequence of nonperformance (foreseeable at time of contracting)
can be unique to each P, and recovered in addition to expectation
Incidental Damages
Damages for expenses reasonably incurred by the non-breaching party as a direct result of the breach
costs incurred while storing goods, shipping, inspecting, reselling, finding alternative supplier
Reliance
put P in position had K never been made
used primarily when there is K, but the expectation damages are too uncertain, so reliance will compensate for expenses reasonably incurred in reliance on the K
Liquidated damages
(1) in an amount stipulated to in the K, (2) allowable when actual damages are difficult to calculate, and (3) the amount agreed to is a reasonable approximation of the anticipated loss from a breach
cannot be punitive, and if ldc proper, can provide only the measure of damages recoverable
Limitations on damages
FUCC
Foreseeable, unavoidable (duty to mitigate), certain, causal
Legal restitutionary remedies for contracts
quasi-contract, replevin (personal property returned) ejectment (real property returned)
quasi contract
(aka restitution or quantum meruit); implied in la to prevent injustice when there is no enforceable K, but some relief is fair bc D has derived a benefit
measure: usually value of the benefit conferred
typical situations: no attempt to K, unenforceable, P in material breach
Equitable restitutionary remedies for contracts
Reformation (there is meeting of minds; rewritten to accurately reflect agreement where writing is in error)
Rescission (undo a bargain where there is no meeting of minds)
Grounds: K resulted from fraud, misrepresentation, duress, mistake)
Injunctive relief for contracts
TRO and preliminary injunctions
SP: (1) valid K w/ definite and certain terms (2) Conditions satisfied (P did his part of the K) (3) Inadequate legal remedy (too speculative; D insolvent; multiplicity of lawsuits) or (property is unique) (4) mutuality of performance; (5) feasibility of enforcement (jurisdiction and court supervision issues); (6) no defenses (laches, unclean hands, mistake, misrepresentation, lack of capacity, SOF, sale to BFP)
Real Property Remedies
typically, damages, ejectment, injunction (operate same as in contract or tort context)
Encroachments: where D trespasses and invades P’s property (or adverse possession), P is entitled to damages, ejectment, and injunction
WASTE: occurs where there is an injury to real property by one with a present interest against a future interest holder
Voluntary (deliberate, destructive act): damages for diminution in value OR cost of repair, and/or injunction
Permissive (poorly maintained): damages for cost of repair (injunction not usually available bc supervision)
Ameliorative (impermissible improvements): no damages bc no loss in value, but injunction may be granted
