REMEDIES Flashcards
Constructive Trust
Equity creates a trust to compel Defendant to reconvey title to property unjustly retained. Defendant serves as trustee and must return the property to the rightful owner. P must prove: 1) D acquired title to the property; 2) P’s property can be traced to property held by D; 3) D’s retention of the property would result in unjust enrichment; and 4) inadequate legal remedies. P is entitled to any increases in value to the property, but a BFP will not be subject to a constructive trust.
Equitable Lien
(P’s property decreases in value or is used to improve D’s property)
Is a lien imposed on D’s property to secure repayment of debt owed to P. Lien can be imposed on property obtained or improved with P’s property or proceeds AND P may seek a deficiency judgment for any remainind debt owed.
P must show: 1) D misappropriated P’s property creating a debt or obligation to pay; 2) P’s property can be traced to property held by D; 3) D’s retention would result in unjust enrichment; and 4) inadequate legal remedy.
Equitable lien is available when D did not acquire title to property. BFP is not subject to equitable lien.
Tracing - Commingled Funds
When D commingles his funds with those belonging to P, and causes the balance to sink below the amount of P’s claim, P may only obtain an equitable lien on the lowest intermediate balance of the account unless it can be shown that D expressly intended subsequent additions of funds as restitution of P’s funds.
Purchase Money Resulting Trust
Imposed when one person takes title to property and another person supplies consideration for the purchase price before or at the same time the other person takes title. The person who takes title is the trustee and the supplier of consideration is the beneficiary. If the beneficiary only pays part of the purchase price, the resulting trust in her favor will be for a pro rata portion of title. There is no need for a writing because the resulting trust are implied by the court.
Purchase Money Resulting Trust Defense
No trust was intended - D may rebut the presumption of a trust by submitting evidence that the money used to purchase the property was a gift, loan, or repayment of a debt. If the trustee and beneficiary are close relatives, a gift is presumed.
Defenses - Unclean Hands
Plaintiff is denied relief if her conduct in the matter at issue has been unlawful or improper and defendant has been injured as a result.
Defenses - Laches
Plaintiff is denied relief is she has unreasonably delayed in bringing an equitable claim and such delay has prejudiced defendant.
Temporary Restraining Order
Is an order maintaining the status quo for up to 10 days until the hearing for a preliminary injunction. P must show that he would suffer irreparable harm before a preliminary injunction is ordered and a likelihood of success on the merits. Usually, the moving party must provide the non-monving party with notice of the TRO motion, unless the party can make a strong showing as to why notice should not be required (i.e. nonmoving party cannot be found or subject matter will be destroyed.
Preliminary Injunction
is an order maintaining the status quo until a trial on the merits. The plaintiff must show she would suffer irreparable harm if she does not obtain a preliminary injunction before trial and a likelihood of success on the merits. The plaintiff can obtain a preliminary injunction based on the same arguments she used in the TRO.
Permanent Injunction
An injunction that orders defendant to refrain from engaging in certain activities (negative) or perform a particular act (affirmative). To obtain a permanent injunction, P must prove:
1) Inadequate legal remedy - legal remedy is inadequate when the injury suffered by plaintiff is a continuing wrong.
2) Property Right - traditionally, only a property right would warrant an injunction, but modernly any interest is protected.
3) Feasibility of enforcement - refers to the court’s ability to supervise compliance with its decree. A negative injunction is easier to supervise because the court can use its contempt power if D fails to refrain from engaging in certain activities. Mandatory injunctions pose feasibility problems because the court must supervise the order to make sure the act is done properly.
4) Balancing of P, D, & Public’s Hardships weighs in favor of granting injunction.
5) No defenses
- unclean hands
- laches
- impossibility
- coming to the nuisance - not a defense
Inadequate Legal Remedy
Legal damages are inadequate when they are speculative, would result in a multiplicity of suits, harm is not yet ripe, real/unique property is involved, or D is insolvent.
