Restitution Flashcards
Restitution Definition
Cause of Action and Equitable Remedy
Can obtain if Plaintiff confers benefit which unjustly enriched defendant at Plaintiff’s expense
Restitution: Conferred Benefit
Benefit must have yielded measurable increase in Defendant’s wealth.
(getting money, real prop, a service, satisfyinf a debt, etc.)
Restitution: Unjustly Enriched
Mere benefit not enough. Defendant’s benefit must be unjust.
Wrongfully acquiring benefit is common (via theft, fraud, duress, undue influence).
BUT can still apply to innocent party (conduct doesn’t have to be wrongful)
Types of Restitution
(1): Specific Benefit
(2): Constructive Trust
(3): Equitable Lien
Restitution Type: Specific Benefit
Court awards a specific benefit only if it feasible to do so.
Restitution Type: Constructive Trust
Judicially created remedy that recovers specific property from holder of legal title who is unjustly enriched by having legal title.
Constructive Trust Requirements
Plaintiff must show:
(1): Defendant holds title to the property (mere possession not enough)
(2): D’s retention violates an equitable principle (unjust enrichment usually)
(3): Legal remedy (money) is inadequate
Construct Trust Effect on Property Value
D not liable to P for any increase in value during ownership.
Third Party Transferee/Constructive Trust
A constructive trust may be brought against a third-party transferee, unless the person is a bona-fide purchaser.
A bona fide purchaser = one who takes property for value and without knowledge of plaintiff’s rights in it.
Restitution Type: Equitable Lien
Definition and Elements
Imposes Lien on D’s property as security for P’s claim. DOES NOT transfer title. Give’s P priority to prop over D’s unsecured creditors.
Same Elements as CT – P Must Show:
(1): D holds title to property
(2): D’s retention of property violates equitable principle
(3): Legal remedy (money) inadequate
When to do Equitable Lien vs. Constructive Trust
Property Declined in Value? Equitable lien better for P. Can satisfy value diff with D’s other assets
Property Increased? Constructive trust better since plaintiff gets the property itself.
Equitable Lien on Third-Party Transferee
Not enforceable against bona fide purchaser for value
Equitable Conversion w/ Sales Contract and Closing
Equitable title passes to buyer but seller holds legal title.
Both parties have equitable liens:
(1): seller lien agaisnt property to secure full purchase price
(2): buyer lien to ensure repayment if seller breaches
Risk of Loss on Buyer
Effect of Death on Buyer/Seller in land sale
Seller dies before closing – heirs/devisees hold property in trust and must sell.
Buyer dies before closing – personal rep must pay purchase price first out of assets of buyer’s estate.
