Remedies Flashcards
How is restitution different than damages & injunctive relief?
Restitution aims to disgorge the D’s ill-gotten gains whereas damages/injunctive relief aim to put P in her rightful position.
What is the substantive claim for which courts award restitution?
Unjust enrichment
What are the 13 restitutionary claims?
equitable lien
quantum meruit
quasi-contract
contract-implied-in-law
assumpsit
quantum valebant
constructive trust
goods sold & delivered
money had & received
accounting
land used & occupied
equitable subrogation
equitable replevin
of the 13 restitutionary claims, which 5 are equitable claims?
equitable lien
equitable subrogation
equitable replevin
accounting
constructive trust
What are the elements for unjust enrichment?
1) Did D obtain a benefit?
2) Did D obtain a benefit @ expense of P? (not considered by all courts)
3) Would retention of that benefit without compensating P be unjust?
What is a temporary restraining order (TRO)?
extraordinary 10-20 day injunction typically awarded only in emergency & only until a preliminary injunction motion can be heard
What is a preliminary injunction?
injunction issued after noticed motion to preserve matters pending final trial on the merits
Notice and Opportunity to be Heard Requirements
TRO’s?
- some form always required UNLESS extraordinary circumstances.
Preliminary Injunctions?
- Normal motion rules
Requirements of the notice?
- Credible Source
- Adequately inform the D’s of the conduct sought to be prohibited or required.
What are the 4 key concepts re: granting Preliminary Injunctions?
1) irreparable harm
2) Merits
3) Balance of hardships
4) public interest
The differences are in how jurisdictions define & combine these principles.
Various tests used for determining whether to grant TRO or Preliminary Injunction
9th Cir Test #1 (also 11th Cir):
- likelihood of success on merits
- substantial threat of irreparable harm
- balance of hardships for P
- advancement of public interest
Rocky Alliance 9th Cir Test #2 (also 2nd Cir):
- probability of success on merits AND
- possibility of irreparable harm
- (post-Winter must have probability of irreparable harm)
- OR
- serious questions on merits AND balance of hardships sharply for P
- advancement of public interest
Mo. Federal Court
- Probability of success on merits AND
- threat of irreparable harm if injunction not granted AND
- weigh above harm to P against harm “to other parties” if injunction is granted
- AND
- advancement of public interest
SCOTUS (Winters)
- likelihood of probable success AND
- likelihood of irreparable harm AND
- balance of harms favors P AND
- advancement of public interest
What are the tests for status quo requirement?
Majority rule:
Is the injunction mandatory (such that it is changing the status quo) or prohibitory (such that it is maintaining the status quo)?
Trend rule:
Does the injunction change the last uncontested status immediately preceding the pending controversy? (if so, it changes the status quo)
What discretion does a court of equity have in crafting relief?
a court of equity has the power to meet the problem presented and to fashion a remedy to accomplish a just and proper result
Discretion in Crafting Relief: Exam Approach
- state rule
- brainstorm possible decrees and pick best one
- raise alternative decrees and explain why your alternative is the best
What is the basic concept of Substitionary Restitution at Law?
the value of the D’s gain (i.e. $ gained because of D’s wrongdoing)
What are the rules for measuring restitution for breach of contract?
General Rule?
value of D’s gain
Rule as to attorneys from Chambliss case?
value of the services rendered or the contract price, whichever is less
Rule as to non-attorneys from Algernon Blair case?
value of P’s services undiminished by any loss P would have sustained on the K and the K price does not serve as a cap on P’s recovery
what was the measure of restitution for property torts (Olwell case)?
Measure depends on tortuousness of D’s conduct:
If D consciously tortuous, D must forego profit from using P’s property.
If D merely tortuous, D must pay greater of P’s loss or D’s direct gain.
If parties equally at fault, D only pays D’s direct gain.
Additional Rule for Restitution
When D’s benefit was derived partially from what D wrongfully obtained from P and partially from assets and efforts rightfully belonging to D, courts apportion D’s gain accordingly.
Common Requirements for Remedies
1) unjust enrichment
2) inadequacy
3) tracing (to the property or debt against which the constructive trust, equitable lien, or subrogation will attach)
Particular Requirements for Remedies
Constructive trust:
The plaintiff can show plaintiff’s property was used to acquire an asset defendant is holding as his own.
Effect: P gets ownership of the asset. Treated as payment in full of traced amount. P cannot sue for any deficiency.
Equitable lien: The plaintiff can show plaintiff’s property was used to improve an asset defendant is holding as his own OR the plaintiff can show plaintiff’s property was used to acquire an asset defendant is holding as his own and a constructive trust would be undesirable or unfair.
Effect: P becomes a lienholder against the asset and therefore can be paid out of the proceeds. Treated as partial payment so P can sue for any deficiency.
Subrogation: The plaintiff can show plaintiff’s property was used to discharge an obligation previously owed by the defendant.
Effect: P obtains the former creditor’s rights, whatever those rights were. Valuable only if creditor had a secured right. Why?
Basic Tracing Rules
A plaintiff may follow (trace) her property into any other form or species into which it has been transmuted.
A plaintiff can trace into a bank account into which money is deposited even if the money is deposited into an account that already contains the Δ’s money.
A bona fide purchaser takes free and clear of the plaintiff’s claim for a constructive trust or equitable lien, but a donee or a purchaser with notice takes subject to the plaintiff’s rights.
Pro Rata Rule
Where a defendant acquires an asset partially with her own money and partially with money traceable to the plaintiff, the plaintiff shares in the asset pro rata (proportionately to the extent of his involuntary “investment”).
Partial Withdrawals: Commingled Accounts (P’s & D’s monies)
Rule in Clayton’s Case: First in, first out.
Jessel’s Bag Rule: D’s money always first out.
Case: In re Oatway (and 3rd Rest of Restitution Rule): P may choose order of withdrawals.
Partial Withdrawals: Commingled Accounts (Restatement Rule)
Rule re tracing: P always can trace into the account and into any product acquired with account funds.
Rules re measure of what P gets:
If D was not a conscious wrongdoer: P is limited to an equitable lien but can apply her equitable lien against both the account and any product.
If D was a conscious wrongdoer:
P gets a choice:
P can get an equitable lien against both the account and any product OR
P can get a pro rata share of both proportionate to her share of the account before the withdrawal
Replenishment Rules
If P can prove that D actually intends to restore P’s money, P’s money will be treated as restored to the extent of D’s replenishment. If P cannot prove D actually intended to restore P’s money, there is a split of authority: Minority rule: Presumption that any replenishment of the account is a restoration of the P’s money. Majority rule (“lowest intermediate balance rule”): Presumption that any replenishment of the account is NOT a restoration of the P’s money.
Partial Withdrawals: Commingled Accounts (Two P’s monies)
When the defendant withdraws some but not all of the money from an account in which the defendant has commingled monies belonging to two or more plaintiffs, there is a two-way split of authority as to how to determine whose money was withdrawn.
Minority rule: First in, first out.
Majority Rule: Each victim bears depletions pro rata (proportionately to her fraction of the account at the time of the withdrawal).
Permanent Injunctions
1) not necessarily lasting forever
2) issued after trial on the merits (i.e. not provisional relief like TRO or preliminary injunction
3) Elements:
- Inadequate Remedy at Law (as always- though Thomas talks uses phrase irreparable harm)
- Feasibility (Court will consider supervisory function; undue judicial involvement in parties relationship );
- Balance Hardship (to plaintiff if injunction doesn’t issue; to defendant if it does)
- Public Interest
Specific Performance: This is a form of Permanent Injunction
- inadequate legal remedy
- definite and certain terms (relates to supervision-contract must be clear SO court knows what it is enforcing)
- feasibility (concern with involuntary servitude - forcing hostile parties to interact/also ongoing nature of court involvement)
- mutuality/assuring security of performance
Goals of Damanges
Expectation damages (Four P’s) Put the Plaintiff in the Performance Position Reliance damages (Three B’s) Bring the Plaintiff Back to the Beginning
Summary of Possible Items of Damages
Benefit of bargain damages
Reliance damages
$ spent in performing or in preparing to perform
$ spent based on getting other party’s perf.
$ spent dealing with breach fallout (Incidental Damages)
Consequential damages
Property damage
Personal injury
Lost resale profits
Lost use profits
What are the 2 types of breach?
1) breach by non-performance
2) breach by defective performance
