Remedies

Question 1

Tort Damages

Answer 1

The plaintiff may only recover damages that proximately result from the defendant’s wrong and can be established with reasonable certainty. The typical measure of tort damages is the amount necessary to make the plaintiff whole. The general purpose of tort damages under Georgia law is compensation.

Question 2

Compensatory Damages

Tort Damages

Answer 2

The basic tort remedy is damages to compensate for tortious injuries. A successful plaintiff is entitled to the amount of money necessary to make them whole or put them in the position they were in before the tort was committed. Compensatory damages may be general or special (see below), and either direct (they follow the tortious act immediately) or consequential (they are the necessary and connected effect of a tortious act, although they depend on the circumstances).

Question 3

General Damages

Tort Damages

Answer 3

General damages are presumed to flow from the commission of a tort and may be recovered without proof of a specific dollar amount. Examples include:

Pain and Suffering

Damages for pain and suffering compensate nonpecuniary loss, inconvenience, hardship, or mental and physical pain, discomfort, and anxiety experienced as a result of a personal injury. Evidence of physical pain and suffering can be presented by the plaintiff’s own testimony and the testimony of a physician or other expert witness. Damages are awarded based on “the enlightened consciences of impartial jurors.”

• Mental Pain and Suffering: When the plaintiff has suffered physical injury as the result of the defendant’s negligence or other torts, mental pain and suffering is a proper element of damages. When the plaintiff’s entire injury is to their peace, happiness, or feelings, damages may be awarded in cases of harm to dignitary interests (for example, invasion of privacy) and intentional torts. On the other hand, merely negligent conduct must involve an “impact” on the plaintiff’s person that results in a physical injury to support a recovery for mental pain and suffering.

Loss of Future Earning Capacity

A person may be awarded general damages for the diminished capacity to work and to earn money in the future. Such damages are distinct from special damages for lost future wages (below) and aren’t reducible to present value.

Question 4

Special Damages

Tort Damages

Answer 4

Special damages serve to reimburse the plaintiff for some injuries and expenses that the plaintiff suffered because of the defendant’s conduct. They may be awarded when there is a loss of money or some other material advantage that can be given a monetary value. They must be specifically pleaded and proved. The plaintiff will produce documents to support the idea that these expenses were incurred.

Examples of Special Damages

Special damages include items such as physicians’ bills, expenses of nursing, loss of income, and loss of profits. Lost future earnings are reduced to present value, and the jury may take inflation into account. For injury to property, the measure of damage is the difference between the market value of the property before and after its damage, after accounting for ordinary wear and tear or depreciation. Mere sentimental value isn’t a proper measure of damage.

Question 5

Nominal Damages

Tort Damages

Answer 5

Only nominal damages (a small amount to cover court costs) are awarded where an injury is slight or there are strong mitigating circumstances.

Question 6

Punitive Damages

Tort Damages

Answer 6

Punitive damages are awarded to punish or deter the defendant. They are appropriate only when it’s proved by clear and convincing evidence that the defendant’s actions demonstrate willful misconduct, malice, fraud, wantonness, oppression, or entire lack of care as to raise a presumption of conscious indifference to the consequences; they cannot be awarded for mere negligence. When appropriate, they’re recoverable in addition to general, special, or nominal damages. The plaintiff’s complaint must specifically ask for punitive damages.

Recovery Limitations

There’s no limit on the amount that can be awarded as punitive damages in a products liability case, but 75% of the award must be paid to the state. Neither is there a limit on punitive damages in other cases if the defendant acted (or failed to act) with specific intent to cause harm, or while under the influence of alcohol or drugs. In cases not involving intentional torts or products liability, the maximum amount that may be awarded as punitive damages is $250,000. Generally, the amount of a punitive damage award must be in a ratio to the compensatory damages of less than 10:1.

Injury to Peace, Happiness, or Feelings

Where the entire injury is to the plaintiff’s peace, happiness, or feelings (for example, an invasion of privacy case), punitive damages aren’t separately available.

Government Defendants

Punitive damages against the sovereign aren’t available, but punitive damages may be recovered against individual government officers.

Question 7

Mitigation of Damages

Tort Damages - Restrictions on Recovery of Damages

Answer 7

Except in cases of willful and continuous torts (fraud), an injured person has a duty to mitigate damages by the use of ordinary care and diligence. Failure to mitigate precludes recovery of any additional damages caused by aggravation of the injury. However, failure to use a seat belt doesn’t constitute failure to mitigate damages.

Question 8

Remoteness of Damages as Bar to Recovery

Tort Damages - Restrictions on Recovery of Damages

Answer 8

Damages must be both actually and proximately caused by the defendant’s tortious act, or they will be too remote for recovery. For example, damages for loss of profits are allowed only when they can be established with reasonable certainty (such as with an ongoing business) and are proximately caused by the defendant.

Question 9

Court Interference with Jury Verdict as to Damages

Tort Damages - Restrictions on Recovery of Damages

Answer 9

If the damages awarded by the jury are so inadequate or so excessive that they are inconsistent with the preponderance of the evidence, the trial court may order a new trial as to damages only.

Question 10

Benefits from Collateral Sources Do Not Reduce Damages Award

Tort Damages - Restrictions on Recovery of Damages

Answer 10

Georgia adheres to the traditional “collateral source rule,” which prohibits a defendant from introducing evidence relating to benefits received by the plaintiff from sources other than the defendant (for example, health insurance, gifts, or sick pay) to reduce the plaintiff’s damage award. However, the rule doesn’t apply if the plaintiff “opens the door” by introducing such evidence.

Question 11

Economic Loss Rule

Tort Damages - Restrictions on Recovery of Damages

Answer 11

The Georgia Economic Loss Rule bars purchasers of goods and services from asserting negligence on the part of the provider or manufacturer as a basis upon which to recover purely economic losses caused when the goods or services are defective and fail. When a defective product injures only itself, or a system that it’s a component of, the plaintiff is limited to contractual remedies (including any applicable warranties). The Economic Loss Rule precludes the recovery in such cases of consequential damages, such as lost profits. In other words, in Georgia, a tort action for negligence cannot be brought if the only damages are to the thing purchased or the services provided.

Question 12

Recovery by Plaintiff for Conduct by Defendant

Tort Damages - Attorneys’ Fees and Costs

Answer 12

If a party has acted improperly, the expenses of litigation may be allowed, by statute, as part of the other party’s damages.

In both tort and contract actions, litigation expenses may be recovered if the plaintiff specially pleads them and the defendant has:

1. acted in bad faith with respect to the transactions or occurrence upon which the complaint is based;
2. been stubbornly litigious (meaning there is no bona fide controversy); or
3. caused the plaintiff unnecessary trouble and expense by forcing them to sue when no bona fide controversy exists.

Unavailable to Defendant

A defendant can’t recover litigation expenses unless they are, in effect, a plaintiff in a viable independent counterclaim.

Question 13

Assessment of Costs and Attorneys’ Fees for Frivolous Claims and Defenses

Tort Damages - Attorneys’ Fees and Costs

Answer 13

Attorneys’ fees and litigation expenses will be awarded to any party against whom another party has asserted a claim or defense that had such a complete absence of any justiciable issue of law or fact that it couldn’t be reasonably believed that a court would accept it. However, fees and expenses won’t be assessed as to any claim or defense asserted in a good faith attempt to establish a new legal theory if the new theory is based on recognized precedent or persuasive authority.

Procedure

Fees and expenses may be requested by motion within 45 days after final disposition of the action.

Other Grounds for Assessment of Fees and Expenses

The court is also authorized to assess fees and expenses if it finds that:
1. an action was brought or defended that lacked substantial justification (that is, it was substantially frivolous, groundless, or vexatious);
2. an action was interposed for delay or harassment; or
3. an attorney or party unnecessarily expanded the proceeding by other improper conduct (for example, abuse of discovery).

Question 14

Damages in Abusive Litigation Action

Tort Damages - Attorneys’ Fees and Costs

Answer 14

In Georgia, a person may bring an “abusive litigation” action against one who takes an active part in initiating, continuing, or procuring civil proceedings against them if the defendant acted with malice and without substantial justification. A successful plaintiff is entitled to all damages allowed by law. Punitive damages are recoverable for suits not based solely on injury to peace, happiness, or feelings.

Question 15

Joint and Several Liability

Tort Damages - Joint Tortfeasors

Answer 15

The traditional rule that joint tortfeasors are jointly and severally liable for the full amount of an injured party’s damages has been abolished by statute in Georgia.

Apportionment

After determining the total amount of damages to be awarded to the plaintiff, the trier of fact must reduce the damage award by the plaintiff’s percentage of fault, if any, and then apportion its award of damages among the persons who are liable according to the percentage of fault of each person. Damages apportioned by the trier of fact are the liability of each person against whom they are awarded and aren’t subject to any right of contribution. In assessing percentages of fault, the trier of fact must consider the fault of all persons or entities who contributed to the alleged injury, even those who weren’t or couldn’t be named as a party to the suit.

Question 16

Release

Tort Damages - Joint Tortfeasors

Answer 16

Release of one joint tortfeasor doesn’t discharge the others, absent an agreement between the parties to the release that the others named will be discharged.

Question 17

Contribution

Tort Damages - Joint Tortfeasors

Answer 17

There is no right to contribution where the trier of fact apportions damages among multiple tortfeasors. However, contribution may be available where a single defendant settles a claim or where a single defendant is held liable by the trier of fact without an apportionment of damages made.

Question 18

Indemnity

Tort Damages - Joint Tortfeasors

Answer 18

A party may recover indemnity (that is, the entire amount paid to the plaintiff) in imputed or vicarious liability situations. Additionally, one person may agree to be held responsible for the negligence of another, but in some cases statutes may limit or prohibit enforcement of such agreements.

Question 19

Comparative Negligence

Tort Damages - Joint Tortfeasors

Answer 19

Georgia uses a “partial” comparative negligence system, meaning a plaintiff may recover unless they are 50% or more responsible for their injury or damages. The plaintiff’s recovery is reduced in proportion to their degree of fault.

Question 20

Last Clear Chance Exception

Tort Damages - Joint Tortfeasors

Answer 20

If both the plaintiff and defendant are negligent, the defendant can be found solely liable for all damages if they had the last clear chance to avoid injury and didn’t exercise ordinary care. In such circumstances, the plaintiff’s negligence won’t reduce any award of damages.

Question 21

Complete Bars to Recovery

Tort Damages - Joint Tortfeasors

Answer 21

Georgia recognizes assumption of risk and “plaintiff’s last clear chance” as complete bars to recovery in negligence actions. Under the latter doctrine, the plaintiff can’t recover anything if they could’ve avoided the consequences of the defendant’s prior negligence by exercising ordinary care. Assumption of risk is a defense to willful and wanton conduct but not to an intentional tort.

Question 22

Wrongful Death

Tort Damages - Specific Torts

Answer 22

The surviving spouse (or, if none, a child) may recover for wrongful death of a spouse (or parent). If there is no spouse or children, the decedent’s personal representative may bring the action and hold any amount recovered for the benefit of the decedent’s next of kin. If the decedent’s death is caused by the surviving spouse, the court may substitute another party as the plaintiff.

Division of Amount Recovered

Any amount recovered is to be equally divided among the surviving spouse and the children per capita, but the surviving spouse must receive at least one-third of the total recovery.

Death of Child

In cases involving the death of a child who doesn’t leave a spouse or children, there is a joint right of recovery in the parents. The award is divided if the parents are divorced or separated.

Measure of Recovery

The measure of recovery for wrongful death is the full value of the life of the decedent, without deducting any of the necessary or personal expenses of the decedent had they lived. This includes loss of support and loss of services, as well as the gross sum the decedent would’ve earned to the end of their life, reduced to present cash value. The trier of fact should consider the decedent’s age, health, life expectancy, income at the time of death, and so on.

• Intangible Element of Full Value of Decedent’s Life: In proving the nature and extent of intangibles lost by a decedent as the result of a destroyed relationship, the decedent’s religious beliefs or church activities may be relevant, along with other circumstances in life, such as family relationships, community or athletic activities, and the like.
• Damages for Solatium: A parent who’s injured in the same accident in which their child is killed may recover damages for their emotional distress at witnessing the child’s death, apart from the parent’s own personal injuries.

Pain and Suffering

The decedent can’t recover for their pain and suffering in the wrongful death action itself, but the personal representative may recover for the decedent’s pain and suffering under the Georgia survival statute.

No Punitive Damages

Punitive damages can’t be recovered in wrongful death actions, but they may be recovered in existing tort actions that survive the plaintiff under the survival statute.

Question 23

Wrongful Birth and Wrongful Life

Tort Damages - Specific Torts

Answer 23

Wrongful birth and wrongful life actions aren’t recognized in Georgia.

Question 24

Loss of Consortium

Tort Damages - Specific Torts

Answer 24

Recovery may be had for loss of an injured spouse’s consortium (that is, loss of services, society, companionship, and affection). Recovery may be had for loss of an injured child’s consortium, but only to the extent of the child’s services. There is no recovery for loss of parental consortium.

Question 25

Defamation

Tort Damages - Specific Torts

Answer 25

In libel cases, damages are presumed for statements that are libel per se (that is, defamatory on their face) or for statements published in newspapers or magazines; otherwise, special damages must be pleaded. In slander cases, damage is presumed if the statement
1. imputes the commission of a crime by the plaintiff,
2. charges the plaintiff with having a contagious disease or with being guilty of a debasing act, or
3. makes charges of incompetence as to the plaintiff’s profession or trade. If the defamatory statement involves a public figure plaintiff or a matter of public concern, there can be no recovery of presumed damages unless actual malice is shown.

Note that the publication or broadcast of a correction or retraction may be pleaded in mitigation of damages.

Question 26

Infliction of Emotional Distress

Tort Damages - Specific Torts

Answer 26

Intentional Infliction of Emotional Distress

A plaintiff may recover damages for mental suffering and wounded feelings if caused by the defendant’s wanton, voluntary, or intentional wrong. The plaintiff must show that the defendant’s actions were so terrifying or insulting as naturally to humiliate, embarrass, or frighten the plaintiff.

Negligent Infliction of Emotional Distress

To recover damages for emotional distress arising out of negligent conduct, the plaintiff must show either some impact resulting in a physical injury or some nonphysical personal injury (for example, injury to the reputation).

Injury to Third Party

Georgia generally doesn’t permit recovery of mental distress damages by one who witnesses injury to another, even if the plaintiff was in the zone of danger. However, as mentioned above, a parent who’s injured in the same accident in which their child is killed may recover damages for their emotional distress at witnessing the child’s suffering in addition to damages for their own personal injuries.

Question 27

Conversion

Tort Damages - Specific Torts

Answer 27

In an action for conversion, a plaintiff must elect to seek either: (1) return of the chattel; (2) damages; or (3) return of the chattel together with reasonable rental value or interest between the time of conversion and the time of the chattel’s return. Damages for the fair market value of the chattel are measured by the highest market value between the time of conversion and of trial.

Trover

Alternatively, a plaintiff seeking damages can initiate an action for trover to recover the fair market value of wrongfully taken chattel. Actions in trover are more limited than actions for conversion, however, and cannot be used to obtain the return of chattel.

Question 28

Nuisances

Tort Damages - Specific Torts

Answer 28

When a nuisance is abated, the plaintiff can recover only the damages they sustained within the statute of limitations period. If the nuisance can’t be abated (that is, it’s of a permanent and continuing character), the plaintiff may recover all damages in one action, including those that the maintenance of the nuisance has caused and will cause in the future.

Question 29

Fraud
(Intentional Misrepresentation)

Tort Damages - Specific Torts

Answer 29

The circumstances giving rise to fraud are frequently based on contractual dealings between the parties (for example, the transfer of property by purchase and sale). In such cases, the measure of damages is the difference between what the property is actually worth and what it would’ve been worth had it been as represented. Punitive damages are permitted. The plaintiff may also recover their attorneys’ fees and litigation expenses based on the defendant’s bad faith in perpetrating the fraud.

Question 30

Breach of Fiduciary Duty

Tort Damages - Specific Torts

Answer 30

A fiduciary owes their principal the utmost diligence, loyalty, and good faith. The principal may recover damages for breach of any of these duties.

Question 31

Interference with Contractual Relations

Tort Damages - Specific Torts

Answer 31

Georgia permits a tort action against one who maliciously procures an injury to be done to a third party, including a breach of contract. The plaintiff must prove that the defendant acted with knowledge of the plaintiff’s rights and with the intent to interfere with those rights. The plaintiff may recover all damages they suffered from the breach, including lost profits, punitive damages where appropriate, and attorneys’ fees. However, the plaintiff can’t recover if the defendant’s conduct was privileged or if the defendant wasn’t a stranger to the contract (that is, if they were a party to the contract). The plaintiff is also limited by the “single satisfaction” rule, which bars the plaintiff from recovering their contractual expectations from both the defendant and the party who breached.

Question 32

Contract Damages

Answer 32

The purpose of contract damages is to place the plaintiff as nearly as possible in the position they would’ve been in had the defendant performed according to the contract terms.

Question 33

General Measure of Damages

Contract Damages

Answer 33

For a breach of contract, the plaintiff may recover those damages that arise naturally from the breach and those that the parties contemplated would be the probable result of breach at the time of contract formation. Generally, consequential damages aren’t recoverable in contract actions. The plaintiff may be awarded nominal damages if there’s no actual damage.

Question 34

Implied in Fact Contracts

Contract Damages

Answer 34

When goods or materials have been furnished or services rendered under a contract implied in fact, the plaintiff may recover the reasonable value of those goods or services. For a claim of quantum meruit (that is, an implied promise to pay for services), the measure of damages is the reasonable value to the recipient of the services furnished.

Question 35

Duty to Mitigate

Contract Damages

Answer 35

The injured party has a duty to lessen the damages as far as is practicable by using ordinary care and diligence (based on a reasonable person standard), and may recover expenses incurred in reasonable efforts to mitigate. Note that the duty to mitigate in Georgia doesn’t require affirmative acts in the face of a contractual breach, especially in property and lease cases.

Question 36

Liquidated Damages

Contract Damages

Answer 36

For a contract provision to be enforceable as a liquidated damages clause:
1. the injury caused by breach must be difficult or impossible to estimate accurately;
2. the parties must intend to provide for damages rather than for a penalty; and
3. the sum stipulated must be a reasonable estimate of probable loss.

If any of these requirements aren’t met, the clause will be construed as an unenforceable penalty. When in doubt, courts favor a construction of the clause as a penalty.

Question 37

Remote of Consequential Damages

Contract Damages

Answer 37

Remote or consequential damages aren’t recoverable in contract actions unless the damages can be traced solely to the breach or unless they are capable of exact computation (in which case they are considered “direct” damages). Lost future profits may be recovered as direct damages if:
1. the business is long established;
2. the business has uniformly made profits; and
3. definite and certain data exist for determining such profits.

Question 38

Fradulent Contracts

Answer 38

When a contract is made fraudulently, the injured party, upon discovering the fraud, may:
1. affirm the contract and sue for breach or
2. rescind the contract and sue for fraud.

Watch out for patterns where the contract contains a “merger” or “entire agreement” clause.

A party affirming a contract containing such a clause may be estopped from claiming reliance on external fraudulent representations.

Question 39

Punitive Damages

Contract Damages

Answer 39

Punitive damages aren’t allowed in contract cases unless tortious conduct (for example, fraud, malice, or willful misconduct) is involved.

Question 40

Recovery of Litigation Expenses

Contract Damages

Answer 40

The recovery of litigation expenses is discussed in Module 1, section 1.3, supra.

Question 41

Nature of Equity

Answer 41

Equity, for bar examination purposes, is concerned with the granting of certain types of remedies. These are injunctive relief against tortious conduct, specific performance, rescission, reformation, constructive trust, and equitable liens and mortgages. There’s no absolute right to equitable relief (as compared to a legal remedy, which issues as a matter of right), and an equitable remedy generally won’t be granted if the harm caused by granting the remedy will greatly outweigh the benefit that the moving party would receive. Usually, there’s no right to a jury trial in equity.

Question 42

Injunctive Relief

Answer 42

An injunction is an order by a court to a defendant to either do something (mandatory) or stop doing something (negative). Personal jurisdiction is required for injunctive relief. Enforcement of an injunction is by contempt, and both parties and persons in privity with parties can be bound by an equitable decree.

Injunctions can be temporary or permanent. A temporary injunction is issued before a full trial on the merits, while a permanent injunction is issued after a full trial on the merits. Injunctions must be obeyed until modified or dissolved, unless the court was without jurisdiction.

Briefly, a plaintiff can obtain injunctive relief against tortious conduct being or about to be committed if the plaintiff can show that
1. the legal remedy is inadequate;
2. a property right or at least a protectable interest is involved;
3. enforcement of an equitable decree would be feasible, practicable, and effective to vindicate the plaintiff’s rights;
4. the hardship to the defendant or public, where relevant, doesn’t greatly outweigh the benefit that the plaintiff may get from the relief sought; and
5. no defenses are available.

Question 43

Temporary Injunctions

Injunctive Relief

Answer 43

A temporary injunction is used to preserve the status quo between the parties until a full trial on the merits can be held. Notice of the hearing for a temporary injunction is generally required to be given to a defendant, and a bond is required to secure a defendant’s losses in case it’s later determined that the injunction shouldn’t have been issued. To obtain a temporary injunction, the plaintiff must show that they are likely to prevail on the merits at trial but will suffer irreparable injury before the trial can be held unless the temporary injunction is granted. Temporary injunctions are available in any type of case (for example, tort or contract) in which a change in the status quo before the end of the trial may result in irreparable injury.

Note: If a lawsuit is pending that may affect title to real property, any party to the action can also record a lis pendens (notice of pending action), which will effectively put third parties on notice of all claims pending in the lawsuit. However, it is important to remember that a lis pendens is not an injunction or a lien on the property, and it will not prevent the sale of real property—a lis pendens only provides notice of pending claims.

Question 44

Temporary Restraining Order

Injunctive Relief

Answer 44

In drastic circumstances (that is, where irreparable harm will occur before a hearing on a preliminary injunction can be held), a temporary restraining order (“TRO”) may be sought. Less formal notice is required than with a preliminary injunction. Indeed, a TRO may be granted without notice to the other party if the moving party can make a strong showing why notice shouldn’t be required. Under Georgia law, the duration of a TRO is at the discretion of the court, with a maximum of 30 days. Of course, the restrained party can’t be held liable for violating the TRO unless they knew about it when they acted

Question 45

Preliminary Injunctions

Injunctive Relief

Answer 45

A preliminary injunction is granted only after a regular, adversary-type court hearing. It generally remains in effect until the conclusion of the full trial.

1. Is the legal remedy inadequate? (plaintiff)
2. Is enforcement feasible? (plaintiff)
3. Are the harships balanced? (defendant)
4. Does the Defendant have any defenses? (defendant)

Question 46

Is the Remedy Inadeqaute?

Injunctive Relief Against Tortious Conduct

Answer 46

A legal remedy could be money damages, replevin, or ejectment.

Money Damages

If money damages will make the plaintiff whole, equity won’t act. Money damages might be inadequate if:

• The defendant is insolvent;
• The injury is irreparable;
• A multiplicity of actions might be necessary; or
• The plaintiff has no right to damages (for example, the tort is only prospective).

Replevin and Ejectment

Replevin (a proceeding at law in which goods are seized and given to the person seeking replevin) may be inadequate if the defendant could put up a replevin bond for a unique chattel or if there has been a change in the chattel (so that the sheriff wouldn’t be able to identify it). The legal remedy of ejectment (a proceeding at law in which the party seeks to have another removed from land) may be inadequate because the sheriff refuses to act.

Question 47

Is There a Property Right or Protectable Interest Involved?

Injunctive Relief Against Tortious Conduct

Answer 47

Courts go out of their way to find the existence of a property right by liberally construing the facts. A right to protection exists when there is a tort
1. injuring a tangible property right,
2. injuring business, or
3. involving personal rights.

Question 48

Is Enforcement Feasible?

Injunctive Relief Against Tortious Conduct

Answer 48

Is the Injunction Sought “Negative” or “Mandatory”?

A negative injunction is easier to get since no supervision is required. The recent trend is to be more liberal in giving “mandatory” injunctions. In these cases, look to the complexity of the act to be performed and whether continuous acts are required. (A court is likely to find that enforcement is not feasible in these circumstances.) Remember, a court may avoid the problem by couching the decree’s terms negatively.

Does Injunction Require an Out-of-State Act?

Equity acts either “on the person” or in rem, and equity decrees are usually enforced through contempt. Therefore, for an equitable remedy to be feasible, either
1. the defendant or
2. the subject of the injunction must be present in the forum.

Because of this, if an injunction requires an out-of-state act, Georgia courts will grant an injunction only if the court has jurisdiction over the defendant and so can ensure that they will carry out the court order, and typically only in cases involving frauds, trusts, and contracts. The courts are more hesitant to grant a mandatory injunction in cases involving an out-of-state act, but will still do so under proper circumstances. (Note that Georgia courts won’t enjoin out-of-state trespasses by one subject to their jurisdiction.)

Question 49

Are the Hardships Balanced?

Injunctive Relief Against Tortious Conduct

Answer 49

Courts will weigh the benefit to the plaintiff if the injunction is granted against the hardship to the defendant that would result from the injunction. If the benefit to the plaintiff is outweighed by the burden on the defendant, the court generally won’t issue an injunction and will compensate the plaintiff with money damages instead. Remember a court can also award a combination of injunction and money damages.

Also, consider the defendant’s behavior. A willful defendant or one who has proceeded in the face of the plaintiff’s assertion of their claim generally can’t argue hardship. Lastly, note that, when balancing hardships, a court will occasionally consider the burden to the public in addition to the burden to the defendant.

Question 50

Does Defendant Have Any Defenses?

Injunctive Relief Against Tortious Conduct

Answer 50

Unclean Hands

It’s a defense that the party seeking the injunction has acted improperly in the transaction in question.

Laches

Laches may be available if the plaintiff has unreasonably delayed in bringing an action and the delay is prejudicial to the defendant. Laches commences to run when the plaintiff knows that their right has been infringed. Laches may serve as an earlier time bar than the statute of limitations. However, laches can’t be longer than the statute of limitations.

Impossibility, Hardship, and Freedom of Speech

In appropriate circumstances, impossibility, hardship, or free speech rights may be used as a defense to an action for injunctive relief. However, if the tort is defamation or a privacy tort, your best exam answer is that the injunction should be denied based on constitutional free speech considerations.

Question 51

What is the Tort?

Injunctive Relief Against Tortious Conduct

Answer 51

An injunction question can involve any tort, but the examiners seem to favor the following:

Trespass to Land

Consider the balance of hardships. Injunctive relief is proper where the trespass is continuous.

Conversion of or Trespass to Chattels

These torts involve interference with an owner’s interest in a chattel. Injunctive relief is proper where the interference is continuous or the converted chattel is unique.

Nuisance

Consider the balance of hardships. Injunctive relief against nuisance will generally be granted only against a private nuisance; an individual won’t have the right to enjoin a public nuisance unless they can show that they have standing to sue (for example, a special injury).

Waste

If waste exists, is it destructive, permissive, or ameliorative? Generally, equity won’t grant injunctive relief in ameliorative waste situations (that is, where the waste constitutes an improvement to property rather than diminishing the property’s value).

Abuse of Judicial Process

This may be a
1. wrongfully instituted suit or
2. wrongfully obtained judgment.

Regarding the first type of abuse, recall that the court can enjoin the parties, not the other court. A similar rule applies to avoid a multiplicity of suits—a court with jurisdiction may enjoin parties from pursuing subsequently filed competing proceedings in another forum. As to a wrongfully obtained judgment, only extrinsic (not intrinsic) fraud is sufficient for equitable relief against enforcement of the judgment.

Unfair Competition

• Trade Libel: Courts are more likely to enjoin trade libel when the inflammatory statement aimed at another’s business is connected with conduct amounting to unfair competition.
• Inducing Breach of Contract and/or Refusal to Deal: An injunction is generally proper when a defendant encourages someone to breach a contract with, or refuse to do business with, the defendant’s competitor, except when the defendant’s relationship with the person they have induced is privileged.
• Use of Competitor’s Trade Secrets:
  A trade secret will be protected by the courts:

—Is the Property a Trade Secret? A trade secret is information not readily available that gives its possessor a competitive advantage.

—How Was the Trade Secret Taken? Courts are more likely to issue an injunction if the information was obtained by improper conduct (for example, theft, bribery, misrepresentation, breach of a confidential relationship or other duty to retain secrecy, or espionage through electronic or other means). Only tangible expressions of trade secrets are protected; there is no violation of a trade secret when information is memorized.

—What Is the Relationship of Taker to Owner? Was there either a fiduciary relationship or a contract relationship? If so, an injunction is more likely. Express covenants not to disclose trade secrets are always specifically enforceable. However, an express contractual covenant is not required in seeking an injunction against disclosure of trade secrets.

—Who May Be Enjoined? Both the wrongful taker and/or the person who intends to use the trade secret can be enjoined.

Defamation

Remember that equity courts are hesitant to enjoin mere libel or slander because of free speech rights.

Invasion of Right of Privacy

Consider potential free speech problems if a “publication” is involved.

Infliction of Physical Harm

Traditionally, equity courts refused to enjoin certain threatened acts of physical violence, but today, a plaintiff may receive injunctive relief against torts involving injury to their person (a “protectable right”), especially those involving stalking and family violence.

Question 52

Injunctive Relief Against Criminal Conduct

Injunctive Relief

Answer 52

Injunctive relief generally isn’t available against criminal conduct on constitutional grounds, as it would deprive the defendant of the right to a trial by jury. But consider whether the crime is also a tort, which may be enjoined.

Question 53

Injunctive Relief Involving Political Rights

Injunctive Relief

Answer 53

Injunctive relief involving political rights generally isn’t available because of the availability of legal remedies; for example, mandamus usually is sufficient. But consider whether the conduct endangering the political right is also tortious and thus subject to relief.

Question 54

Constructive Trust

Answer 54

A constructive trust is a restitutionary remedy imposed by courts to prevent unjust enrichment when a wrongdoer has gained title to property through misappropriation of another’s money or property. The defendant’s title must be traceable solely to the misappropriated property (most courts also require a showing that the legal remedy is inadequate). If established, the court will force the trustee to convey to the plaintiff title to the misappropriated property or its product. This gives the plaintiff priority over unsecured creditors. The usual equitable defenses are applicable, and transfer to a bona fide purchaser (“BFP”) terminates a plaintiff’s equitable right to the property.

Question 55

Requirements

Equitable Lien

Answer 55

The requirements for imposition of an equitable lien are similar to those for a constructive trust: An equitable lien can be imposed on property to which the defendant holds title and to which the wrongfully obtained property can be traced. Like a constructive trust, an equitable lien gives the plaintiff priority over other creditors with interests in the property subject to the lien. Unlike a constructive trust, however, an equitable lien can be imposed on property that was merely improved with the plaintiff’s property or the proceeds of the plaintiff’s property. Most courts also require a showing that the legal remedy is inadequate, but the defendant’s insolvency usually suffices.

Question 56

Deficiency Judgement

Equitable Lien

Answer 56

With an equitable lien, the defendant is forced to sell the property. The plaintiff receives the proceeds, up to the fair market value of the property at the time it was taken. If the proceeds are less than that value, the plaintiff also receives a deficiency judgment for the balance. In Georgia, if a statutory method exists for asserting a lien, the creditor must follow the statute rather than rely on an equitable lien.

Question 57

Compared with Constructive Trust

Equitable Lien

Answer 57

An equitable lien is appropriate when the property in the defendant’s hands is worth less than the plaintiff’s claim, or if misappropriated money was used to improve, not acquire title to, property. A constructive trust should be used when the defendant holds property worth more than the plaintiff’s claim, because the plaintiff will receive the more valuable property. The usual equitable defenses apply, and transfer to a BFP prevents imposition of an equitable lien.

Question 58

Specific Performance

Answer 58

Specific performance is an equitable remedy that requires a party to a contract to perform as they promised. To obtain specific performance, a plaintiff must show that
1. a valid contract exists;
2. the plaintiff has performed or is ready, willing, and able to perform;
3. the legal remedy is inadequate; and
4. enforcement is feasible.

If raised by the defendant, the plaintiff may also have to show that (5.) the defendant’s defenses are not viable.

Question 59

Does a Valid Contract Exist?

Specific Performance

Answer 59

Obviously, there must be a valid contract for specific performance. Remember that equity requires the contract terms to be somewhat more certain than would a court in an action at law, although parol evidence may be used to make the contract more certain. The contract must be supported by consideration. Generally, equity courts won’t examine the sufficiency of consideration. However, inadequacy of consideration, or any other fact showing a contract to be unfair, unjust, or against good conscience at the time of contracting, may justify a court’s refusal to decree specific performance.

Question 60

**

Can Plantiff’s Performance be Assured?

Specific Performance

Answer 60

The plaintiff must’ve already performed or prove that they are ready, willing, and able to perform. There are 2 issues that are likely to appear on the bar exam: Time is of the Essence Clause and Deficiencies in Land Contracts

Question 61

“Time is of the Essence” Clause

Specific Performance

Answer 61

A clause requiring performance within a stipulated period of time must be expressly included in the contract; in its absence, a reasonable time to perform will be implied.

Type of Contract

If the contract is wholly executory, a “time is of the essence” clause will be strictly enforced. If the contract 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 of the clause if
1. the loss to the other party is small;
2. the forfeiting party would suffer undue hardship;
3. the defendant has waived the clause; or
4. the tardiness is “de minimis.”

Also look to see if a judicial sale might be appropriate.

Question 62

Deficiencies in Land Contracts

Specific Performance

Answer 62

The main concern here is whether the seller can deliver the quantity or quality of land promised. If there is a deficiency, the seller may get specific performance only if the deficiency is minor. A buyer, on the other hand, can generally get specific performance despite substantial deficiencies but will be unable to get specific performance if the deficiency is very large. In any case, if specific performance is granted, there must be an abatement in price for the deficiency.

Question 63

Inadequacy of Money Damages

Specific Performance - Is the Legal Remedy Inadequate?

Answer 63

Money damages may be inadequate when
1. the defendant is insolvent,
2. damages are speculative,
3. multiple suits would be necessary, or
4. the subject matter is unique.

Remember, a liquidated damages clause can make the legal remedy adequate if it provides that it is the exclusive remedy of the parties.

Question 64

The Thing Bargained for is Rare of Unique

Specific Performance

Answer 64

Real Property

Land is always unique. Thus, both the buyer and seller of land can get specific performance.

Personal Property

If personal property is involved, see whether it is
1. unique in kind,
2. of personal significance to the buyer (using a reasonable person test), or
3. in short supply.

If not, money damages are adequate.

Personal Services Contract

If personal services are involved, check to see if they are unique. If not, money damages are adequate. Even if the services are unique, equity won’t force a person to perform services because of “involuntary servitude” problems and the difficulty of enforcement. However, an injunction may be issued so that the defendant can be prevented from working for someone else.

Question 65

Does Mutuality of Remedy Exist?

Specific Performance

Answer 65

To be awarded specific performance, mutuality of remedy must exist. Negative mutuality (the concept that the plaintiff shouldn’t be allowed to enforce a contract because the defendant wouldn’t be able to) isn’t a defense to enforcement because courts will grant specific performance if both parties are capable of performing and the court can sufficiently secure the plaintiff’s counterperformance. Affirmative mutuality (the concept that the plaintiff should be allowed to enforce the contract because the defendant would’ve been allowed to) is relevant only to land sale contracts; since the buyer can get specific performance of a land sale contract, the seller can too, even though all they will get is money.

Question 66

Contracts for Personal Services?

Specific Performance - Is Enforcement Feasible?

Answer 66

A personal services contract won’t be enforced, both because it would be tantamount to involuntary servitude and because it would be difficult to supervise performance. However, an order may be granted to enforce a noncompetition covenant.

Question 67

Land Sale Contracts

Specific Performance

Answer 67

In land sale contracts, check to see if the parties and/or land are in the jurisdiction.

1. If both the parties and the res are before the court, enforcement is feasible.
2. If the seller and the res are before the court, enforcement is feasible if the purchaser is bringing the action. If the seller brings the action, it’s difficult to grant specific performance because it requires the buyer to make a payment of money, which is an in personam order.
3. If the buyer and the res are before the court, enforcement is feasible since the court will simply act in rem and transfer the property by court order if the seller doesn’t comply.
4. If both parties are before the court, but the res is outside of the jurisdiction, equity courts will grant a decree that the property be conveyed, and the court may hold the seller in contempt if they don’t make the required conveyance. As mentioned previously, in Georgia, equity may enter a decree in cases of fraud, trust, or contract, even though property not within Georgia may be affected.

Question 68

Standard Contract Defenses

Specific Performance - Defenses Available to Defendant?

Answer 68

Standard contract defenses, including the Statute of Frauds, inadequate consideration, misrepresentation, impossibility, and mistake, may be raised. The most important here is the Statute of Frauds and the exception to its application, the part performance doctrine.

Part Performance Doctrine

The part performance doctrine may operate to take a contract out of the Statute of Frauds (that is, allow it to be specifically enforced). An oral contract for the sale of land may be enforced if:
1. the defendant admits the contract;
2. the contract has been so far executed by the party seeking relief that if the contract were abandoned, they couldn’t be restored to their former position;
3. full payment was accepted by the vendor;
4. there is partial payment coupled with possession; or
5. there is possession coupled with valuable improvements.

Question 69

Misrepresentation

Specific Performance - Defenses Available to Defendant?

Answer 69

To be a defense, the misrepresentation must go to a material fact.

Concealment of a material fact will prevent specific performance only if the party concealing this information stands in a confidential relationship to the other contracting party. Note that the level of misrepresentation necessary to qualify as a defense to specific performance isn’t as high as that necessary to result in a rescission of the contract.

Question 70

Mistake

Specific Performance - Defenses Available to Defendant?

Answer 70

To be a defense, the mistake must be bilateral, material, and a mistake of fact. (A mistake of law generally isn’t sufficient but may be if the terms of the contract are unfair.) Unilateral mistake is a defense to specific performance only if the nonmistaken party either knew or reasonably should’ve known of the mistake.

Question 71

Equitable Defenses

Specific Performance - Defenses Available to Defendant?

Answer 71

Equitable defenses include laches, unclean hands, and unconscionability at the time of contract formation.

Question 72

Covenants Not to Compete

Specific Performance - Particular Problems

Answer 72

Covenant in Employment Contract

Although an employment contract won’t be specifically enforced, a covenant not to compete will be if:
1. the covenant is expressly contained in the contract,
2. the services are unique,
3. the covenant is reasonably necessary to protect the employer’s legitimate interests, and
4. the covenant is reasonable as to both geographical scope and duration.

It is presumed that a restraint for 2 years or less is valid.

Covenant in Sale of Business

Noncompetition covenants expressly included in contracts for the sale of business will be enforceable if the covenant is reasonably necessary to protect the buyer and reasonable in geographical scope and duration. It is presumed that a restraint for 5 years or less is valid.

Covenants Not to Disclose Trade Secrets

Covenants not to disclose trade secrets are specifically enforceable and are valid for an unlimited period.

Question 73

Specific Enforcement of Particular Testamentary Dispositions or Mutual Wills

Specific Performance - Particular Problems

Answer 73

As long as the property involved is unique, equity will specifically enforce a contract to make a particular disposition by imposing a constructive trust (discussed later) on the property in the hands of the personal representative. Equity will also enforce a contract to execute mutual wills by imposing a constructive trust on the personal representative of the party who failed to execute a will in accordance with the contractual terms. If such contracts relate to real property, they usually must be evidenced by a writing to be enforceable. Nonetheless, under proper circumstances (for example, the part performance doctrine), specific performance may be granted even if there is no sufficient writing.

Question 74

Equitable Conversion

Specific Performance - Particular Problems

Answer 74

Under the doctrine of equitable conversion, after a contract for the sale of land has been entered into, the seller has a personalty interest and the buyer has a realty interest. For equitable conversion to come into effect, the land sale contract between the parties must be specifically enforceable.

Question 75

Rescission

Rescission and Reformation

Answer 75

Rescission voids the contract and leaves the parties as though the contract had never been made.

Question 76

Grounds for Rescission

Rescission and Reformation

Answer 76

Generally, to be eligible for rescission, the plaintiff must show that there was a defect relating to the formation of the contract. Grounds for rescission must have occurred either before or at the time the contract was entered into.

Mistake

• Mutual Mistake: Remember the 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 facts (for example, quality, desirability, or fitness of the property involved) aren’t grounds for rescission if there had been no express or implied representations.

—Compromise of Facts: Mutual mistakes of fact involving compromise of a disputed fact or a doubtful claim aren’t grounds for rescission when the fact about which the parties compromised is also the one upon which they were mutually mistaken. However, if, as a basis for compromise, both parties assume a fact to be true and on that basis compromise something else, rescission will be allowed.

• Unilateral Mistake: In Georgia, unilateral mistake generally will suffice for rescission when (1) the other party knew or should reasonably have known of the mistake, (2) the nonmistaken party has not yet taken steps in reliance on the contract, or (3) the mistaken party would suffer extreme hardship.
• Mistake of Law: In Georgia, mistake of law is a sufficient basis for rescission.

Misrepresentation

For the court to rescind a contract for misrepresentation, there must be a material misrepresentation of fact and the plaintiff must’ve relied on the misrepresentation. Rescission will be granted regardless of whether the misrepresentation is innocent or fraudulent, but not if the duped party could’ve discovered the truth through reasonable diligence.

Other Grounds for Rescission

Rescission may also be granted for duress, undue influence, illegality, lack of capacity, or failure of consideration.

Question 77

Offer to Resorte Other Party to Status Quo Necessary

Rescission and Reformation

Answer 77

A party rescinding a contract must return or offer to return consideration unless to do so would be unreasonable or impossible.

Question 78

Defenses to Action for Rescission

Rescission and Reformation

Answer 78

The usual equitable defenses (such as laches or unclean hands) are available. In Georgia, a plaintiff’s negligence can also be a defense, but only if the other party has been prejudiced by the negligence. Because Georgia permits pleading in the alternative, a plaintiff may claim in a single action both that a contract should be rescinded and, alternatively, that damages should be awarded for fraud.

Question 79

Relief in Addition to Rescission

Rescission and Reformation

Answer 79

If the plaintiff is entitled to rescission and has paid money to the defendant, the plaintiff is also entitled to restitution.

Question 80

Reformation

Rescission and Reformation

Answer 80

Reformation changes the written agreement to make it conform to the parties’ original intent.

Question 81

Grounds for Reformation

Rescission and Reformation

Answer 81

Mistake

Mutual mistake will always suffice. Reformation will also be allowed for unilateral mistake if the writing doesn’t conform to the original agreement and the nonmistaken party actually knew of the other party’s mistake (unilateral mistake coupled with fraud or inequitable conduct). Generally, reformation is available for mistakes of fact and of law. Note that, unlike rescission, a plaintiff can’t argue that the defendant should have known of the mistake.

Misrepresentation

Misrepresentation is sufficient grounds for reformation. It may be innocent or fraudulent. An instrument will be reformed to reflect the expressed intent of the parties.

Question 82

Defenses to Reformation

Rescission and Reformation

Answer 82

Look for the usual equitable defenses such as laches, unclean hands, and so on. Note the following special cases:

Bona Fide Purchaser

Equity courts won’t allow reformation if the subject matter of the contract sought to be reformed has been sold to a bona fide purchaser for value and without notice.

Special “Nondefenses”

Generally, a plaintiff’s negligence (for example, failure to read the contract) is not a bar to reformation, but it can be if the other party was prejudiced. And, as a general rule, the Statute of Frauds and parol evidence rule do not apply in reformation cases.

Question 83

Reformation of Gifts

Rescission and Reformation

Answer 83

Reformation by Donor

A donor may have a gift instrument reformed if it doesn’t express their true intention unless the donee has substantially relied on the gift as conveyed.

Reformation by Donee

A donee may not have a gift instrument reformed, even if the gift instrument doesn’t conform to the donor’s original intent. Some courts, however, allow reformation if the donee has detrimentally relied on the donor’s original intent, which wasn’t expressed in the instrument. The majority would allow the donee to have the gift reformed against the donor’s heirs.

Question 84

Equitable Mortgage

Misc. Equitable Remedies

Answer 84

An equitable mortgage is imposed by a court against a deed absolute when a creditor has received the deed from a debtor solely to secure an obligation and later refuses to reconvey the property on satisfaction of the debt. (For example, Uncle gives Nephew a loan of $100,000 in exchange for the deed to Nephew’s house, promising to reconvey the house when Nephew pays him back. But Uncle refuses to reconvey when Nephew offers to repay the loan.) Under these circumstances, the courts will treat the deed as a mortgage and force the creditor to
1. foreclose if the mortgage is unpaid or
2. reconvey if the mortgage is paid.

Question 85

Extraordinary Writs

Misc. Equitable Remedies

Answer 85

A writ of mandamus compels a public official to perform some ministerial (not judicial) act. A writ of prohibition restrains subordinate courts and inferior judicial tribunals from exceeding their jurisdiction when no other legal remedy or relief is available. A writ of quo warranto is used to inquire into the right of any person to hold public office, other than the governor.

Question 86

Declaratory Judgments

Misc. Equitable Remedies

Answer 86

Superior courts may issue declaratory judgments when there’s an actual controversy between the parties as to some right, status, or legal relation, and the dispute is of such a nature that it can be terminated by entry of a declaratory judgment.

Question 87

Contempt

Misc. Equitable Remedies

Answer 87

A court has the power to hold a person in contempt when their conduct brings disrespect to the authority and administration of the law. Georgia courts may sanction for contempt in 5 cases, the most relevant to the bar exam being:
1. misbehavior of any person in the presence of the courts (or near the courts) so as to obstruct the administration of justice;
2. misbehavior of any of the officers of the court in their official transactions; and
3. disobedience or resistance by any officer of the courts, juror, witness, or other person to any lawful order, rule, and so on, of the courts.

Question 88

Types of Contempt and Their Sanctions

Misc. Equitable Remedies

Answer 88

Contempt can be indirect (that is, arising from acts committed outside the judge’s sensory perception) or direct (that is, arising from acts committed within the judge’s sensory perception). It also can be civil (that is, seeking to coerce future compliance with a court order or compensate a complainant for losses) or criminal (that is, seeking to punish prior contumacious conduct and preserve the court’s authority). If contempt proceedings are criminal, criminal procedures apply.