Tort Remedies - Restitutionary Remedies Flashcards
When are restitutionary damages (RD) used?
When D obtained a benefit and if D kept benefit, D would be “unjustly enriched.” Therefore, RD requires D to pay P the reasonable value of the benefit (to D)
Can be legal OR equitable restitutionary remedies
When to use compensatory damages vs. restitutionary damages?
Did D get injured/D’s property was damage?
- Compensatory Damages
Did D benefit?
- Restitutionary Damages
OR BOTH (also consider punitive damages)
P CANNOT BE REWARDED BOTH COMPENSATORY AND RESTITUTIONARY DAMAGES: P gets the higher amount
What is replevin?
Legal restitutionary remedy used BEFORE trial that allows P to recover chattel (that was wrongfully taken/detained by D)
Usually coupled with restitutionary/compensatory damages
Requires judicial hearing before prejudgment seizure (repelvin) is allowed
What is required for replevin?
- Plaintiff has right to possession of chattel
- D wrongfully took/withheld chattel
Only sheriff can repossess the property
- Plaintiff must post bond to recover chattel (to compensate D if P loses trial)
- If D wants to keep chattel, D can post redelivery bond (to compensate P if D loses trial)
What is required for ejectment?
- Plaintiff has right to possession of real property
- D wrongfully took/withheld real property (D must be in possession of real property)
Same test as replevin except for real property
What is ejectment?
Legal restitutionary remedy that returns possession of real property (from which P was wrongfully ousted)
Only sheriff can eject defendant
What is a constructive trust?
Equitable restitutionary remedy used when D improperly acquires title to property through fraud, undue influence, abuse of confidence, mistake, etc. (at P’s expense)
Remedy: D must transfer title to P
* no deficiency judgment allowed
Equity creates a “trust” and D becomes “trustee”. D must return property to P.
Constructive trust/Equitable lien
vs.
Replevin/Ejectment
If D has title to personal property or real property:
* Constructive trust
* Equitable lien
If D has possession
* Replevin (personal property)
* Ejectment (real property)
Equitable remedies used when legal remedies are inadequate (ex. D is insolvent and can’t pay any monetary damages OR case involves unique property)
What is required for a constructive trust?
- D has title to property + D’s acquisition of title can be traced to property that D wrongfully acquired
- If D keeps property, D would get unjustly enriched
- P has no adequate remedy at law bc D is insolvent or property is unique
Use constructive trust when:
* D’s property is worth as much as or more than P’s claim
Ex. D defrauded P out of stock that then increased in value
What are D’s defenses to constructive trusts?
Equitable Defenses
* Laches
* Unclean hands
* Transfer of legal title to BFP
What is an equitable lien?
Equitable restitutionary remedy used when D misappropriates D’s property through fraud, undue influence, abuse of confidence, mistake, etc. OR D improves property he owns with money/property he wrongfully obtained from P
Remedy: Impose lien on the property that D wrongfully got/improved –> D’s property is subject to immediate court-directed sale and sale proceeds go to P
* Deficiency judgment allowed
If sale proceeds < FMV of property, deficiency judgment is issued for the difference and is taken from D’s other assets
What is required for an equitable lien?
D has title to property + D’s acquisition of title can be traced to property that D wrongfully acquired
* Use equitable lien where D’s property can’t be traced solely to P’s property
Use equitable lien when D’s property is worth as much as or less than P’s claim OR D improved other property with P’s property
* P can get up to amount of P’s claim
* P gets priority in property over other creditors but not BFP
Ex. D defrauded P out of stock that then decreased in value
Ex. D sold P’s stock and used $$ to renovate his house
Constructive Trust v. Equitable Lien Review
If property value INCREASES, use constructive trust (keep it and reap profit from increase)
If property value DECREASES, use equitable lien (sell it)
* Deficiency judgment only allowed for EL
BFPs prevail over P
P prevails over unsecured creditors
