Remedies-- Equitable Restitutionary Remedies

Question 1

Two types of equitable restitutionary remedies

Answer 1

Constructive trust and equitable lien

Question 2

When do eqitable restitutionary remedies apply

Answer 2

1. improperly or wrongfully acquired property for which defendant has title (different from replevin and ejectment, where ∆ only has possession)
2. defendant must have title

Question 3

Constructive trust

Answer 3

used if property value goes up after the wrongful taking

i. ∆ serves as trustee and is ordered to return property to π
ii. only available if defendant’s title to the property can be traced solely to π’s property
a. ex. D misappropriates funds and uses them to remodel his house; since title to the home was not obtained using the money, the proper remedy is an equitable lien on it

Question 4

Equitable lien

Answer 4

used if property value goes down after the wrongful taking

i. property immediately sold in a court-directed sale, proceeds of which go to π
ii. if sale proceeds < FMV of the property at time of taking, deficiency judgment entered for π that can be used to against ∆’s other assets

Question 5

Rules for equitable restitutionary remedy

Answer 5

1. show inadequate legal remedy alternative, that is money damages is not good. (ex. show ∆ is insolvent, or show property is unique for constructive trusts)
2. bona fide purchasers prevail over π (in which case tracing is only remedy)
3. tracing is always allowed (i.e. if ∆ sells the property, can trace sale proceeds to their bank account), in which case π gets that amount ahead of all other creditors
4. π will prevail over unsecured creditors
   i. except for deficiency judgment (where π gets in line with everyone else)
5. when ∆’s property cannot be traced solely to π’s property – only an equitable lien is available
   i. ex. ∆ misappropriates money to remodel his house, title was not obtained with the money. Proper remedy is equitable lien. Won’t get constructive trust on entire house.