Torts - Restitutionary Remedies II

Question 1

Restitutionary Remedy

Answer 1

Restitutionary remedy used when D has been unjustly enriched. To recover, P must prove:
* (i) it conferred benefit to D by rendering services
* (ii) P had expectation of being compensated
* (iii) D knew P’s expectation
* (iv) D would be unjustly enriched if he kept benefits of services rendered by P without compensating P

Benefit conferred:
* Goods or services: P can recover value of goods and services
* Tangible property: P can replevy property

Question 2

Legal Restitutionary Remedies

Answer 2

• Money: based on value of benefit to D
• Replevin: recovery of specific personal property from D
• Ejectment: recovery of specific real property

Question 3

Constructive Trust

Answer 3

Constructive trust is court-imposed obligation on D to convey specific property to P. It’s an equitable restitutionary remedy imposed on property that D wrongfully acquired and has title to.
* Property is held in trust by D for P and D must convey property to P

P must show that:
* (i) D has title to property
* (ii) D wrongfully used P’s property to acquire title to property
* (iii) D’s retention of property would unjustly enrich D
* (iv) P has no adequate legal remedy (ex. D insolvent or property unique)

Important
* Used when value of property equals or exceeds amount owed to P
* Can use tracing to impose constructive trust on proceeds of wrongfully acquired property
* Can’t be used when D improved other property with P’s property
* NO deficiency judgment allowed

Constructive Trust and Equitable Lien are used when D misappropriates P’s property and uses it (or its proceeds) to either acquire title to other property (impose constructive trust or equitable lien) or to improve other property (equitable lien). These two remedies allow P’s property to be traced to the property owned by D upon which the remedies are imposed.

Question 4

Equitable Lien

Answer 4

Equitable lien: court-imposed security interest in specific property owned by D. It’s an equitable restitutionary remedy imposed on property that D wrongfully acquired
* (i) D has title (ex. to property that was improved with P’s property)
* (ii) Wrongful acquisition of P’s property (ex. by avoiding obligation to pay P) can be traced to property held by D
* (iii) D’s retention of property would unjustly enrich D
* (iv) P has no adequate legal remedy

Important
* Used when value of property equals or is lower than amount owed to P because P can impose lien on property and recover deficiency
* Maximum amount P can recover is amount of claim
* CAN be used when D improved other property with P’s property (or its proceeds)
* Commingled Funds: P can only impose equitable lien on lowest intermediate balance and then seek deficiency judgment
* Deficiency judgment allowed - puts P ahead of unsecured creditors

DEFENSE: Transfer to bona fide purchaser

Commingled Funds: Where D commingled his own money and P’s misappropriated money in single account and spent it such that balance fell below amount of P’s claim; P can only get equitable lien on lowest intermediate balance of account.