Restitution and Abuse of Right Flashcards
Restitution
- both a remedy and a ground of liability (liability tied to unjust enrichment)
- often involves equitable-style of reasoning
Core Elements of Restitution
(i) enrichment of the defendant
(ii) at the expense of the plaintiff
(iii) under circumstances that would make it unjust for the defendant to retain the benefit (tricky to evaluate - some people say too spongy)
Restitution and Damages
- question of whether or not restitution for wrongs is just an alternative to damages in torts (egg-washing ex - what would def get from damages vs. restitution?)
Olwell v. Nye & Nissen - Facts
- the egg-washing case
- P sells D an egg-packing business but not the egg-washing machine -> P arranges to store egg-washing machine in adjacent premises
- shortage of labor during WWII -> D takes egg machine out of storage and starts using it once per week until P discovers 3 yrs later
- upon discovery, P offers to sell to D for half of original price ($600), refuses D’s counteroffer of $50, and sues
Olwell v. Nye & Nissen - Decision
- P sues for reasonable value of D’s use of the machine - asks for $25 per month, gets $10 per week (price of hiring a human egg-washer)
- on appeal, this gets bumped back down to the $25 (P can’t get more than asked for)
Olwell v. Nye & Nissen - Principle
- court allows P to “waive the tort” - can sue for unjust enrichment in profits made by D through use of machine rather than in damages (tort would’ve been conversion - P would’ve gotten value of the machine, which wouldn’t have been much, given state of the machine)
- basically, gives P option of choosing whichever suit gets more $
Olwell v. Nye & Nissen - Bad Faith
- Prof said might be bad faith influencing damage calculation - D could’ve been made to pay rental value of the machine, but instead has to pay much higher cost of hiring human egg-washers -> could be due to D’s showing of bad faith
Two Criticisms of Restitution w/ Unjust Enrichment as Basis for Liability
- seems to rest solely on morality rather than mere solid foundation in law
- restitution does not embody any unitary principle but merely reflects miscellany of circumstances giving rise to right to restitution
Mistaken Improver
- basically, someone who accidentally impacts property of another in a way that could be characterized as a benefit rather than a harm
Producers Lumber & Supply v. Olney Building - Facts
- Orts mistakenly has a house built on land that his co (Olney) already sold to Producers -> Producers wanted to use it for a house for manager and his wife (they planted some trees on the lot, + O notices but doesn’t really think about it)
- house nearly complete when mistake discovered -> O tries to negotiate, but then breaks off negotiations after lowball offer and demolishes the house
Producers Lumber & Supply v. Olney Building - Cost Assessments
- Monetary loss to Olney from the demolition (cost of tearing down the building $2768)
- Producers sue for damages though after he does this - he needs to pay extra beyond the cost of the demolition
Producers v. Olney - Olney Mental State
- good faith mistake and subsequent good faith negotiations, but malicious in demolition
Producers v. Olney - Trial Findings
Jury finds:
- Orts built house in good faith
- would cost $600 to restore the land to its pre-building condition
- Orts acted maliciously in removing the building
- Producers should receive $300 in exemplary damages
Producers v. Olney - Argument on Appeal
- Trial court only awards the $600 for restoring the land -> Producers argues $5900 on appeal, includes value of building in addition to $300 punitive damages and the $600 for restoring land to condition
Producers v. Olney - Decision and Reasoning
- court awards the full $5900 - they say house belonged to Producers at time of destruction (fixture) + there’d been no finding for Olney in favor of restitution (since he was a good faith mistaken improver) -> Olney’s destruction of house negates good faith (no equity b/c “unclean hands”)