law school outline: remedies


Remedies

  1. Introduction

  1. Exam: Closed book
  2. Policy: Weighing harms, judicial efficiency.
  3. Damages

  1. Must be proved with certainty (>50%) to prove probability of past/present/future loss
  2. Amount of damages need not be certain so long as existence of damages is certain (lack of established record of profitability is not good).
  3. Types

  1. General: Those that flow naturally from the breach
  2. Special: Losses that cannot be presumed or estimated and must be specially pleaded.

  1. Single lump-sum payment only � future damages must be presently valued. Periodic payment structure used mostly in settlements, but ok in judgments. No installment payments or variable payments depending on future developments.
  2. Ways to prove

  1. Before/after comparison
  2. Benchmark figures
  3. Sampling; empirical evidence

  1. Election of remedies

  1. p must elect which remedy he will pursue, and that will preclude recovery via a different remedy (prevent double recovery).
  2. Restatement does not force election, unless D materially changes position in reliance on manifestation of p �s choice.
  3. Statute may authorize certain form of damages, which may preclude other remedies, if that is the clear intent of the legislature. Specified damages preempts other damages of the same type (i.e. punitive).

  1. Common Law: Legal

  1. Jury trial
  2. In rem: Directed at money or property; not backed by the contempt power, but seizure (attachment) of property is possible.
  3. Automatic � must be awarded upon showing requirements for the remedy.
  4. Compensatory Damages: Contract

  1. Substantive: Breach (not void)

  1. Service
  2. Goods

  1. Seller breach
  2. Buyer breach

  1. Land

  1. Remedial theory: Make person whole by substituting money for expected performance.

  1. Liquidated damages

  1. Specified in K, makes other damages remedies unavailable unless liquidated damages clause is voided.
  2. Kicks in upon material breach, to compensate for loss
  3. Unenforcable if so high or intended to be a penalty (clearly disproportionate to actual loss), or if so low if unconscionable.
  4. Requirements

  1. Damages would be difficult to determine
  2. Reasonable pre-estimate of anticipated harm

  1. Expectation: Goal is to put p in position he would be in if the K had been completed. Intent of D in breaching is not examined to discourage economic waste. Benefit of bargain + costs spent in reliance (incidental and consequential) � costs saved related to K + amount already paid.

  1. Construction benefit of bargain: Cost vs. Value

  1. Cost to p to finish, fix or replace (best because puts p in post-K position); or
Loss of value to p from unfinished or defective construction (used only when cost to fix is clearly disproportionate to value � economic waste or windfall).

  1. Specific difference in value between as-delivered and K; or
  2. FMV
p also gets results at time p bargained to get them: Loss of use due to delay, measured by actual or rental value, or interest. Owner breach

  1. Builder can get lost profit if before performance, or action for price if after performance.
  2. If part performance, then builder gets K minus cost of completion, or K minus total cost of performance (profit).
Service: Cost of obtaining services equivalent to those promised, plus consequential damages. Sale of goods benefit of bargain (UCC Article 2 applies and mostly adopts expectation damages)

  1. Seller breaches

  1. Buyer doesn�t receive, rejects, or revokes acceptance of goods: Cost to cover (actual) or market price (buyer option), minus K price.
  2. Buyer accepts defective goods: Value of goods as promised, minus value of goods as accepted.
  3. Value and market price measured at time of breach.
  4. Delay in delivery: Material breach means buyer is excused from performance. Immaterial breach means buyer must accept goods, but can recover damages for delay. Limited to that which was foreseeable.

  1. Buyer breaches

  1. Seller hasn�t delivered or buyer refuses: K price minus resale price (duty to reasonably mitigate) or market price at time and place of tender.
  2. If above is inadequate to put seller in as good of position as performance (lost profit and overhead): K plus reasonable overhead plus variable costs already incurred minus proceeds from resale (applies only for volume seller such as car dealership, or component seller).
  3. No consequential damages.
Sale of land (specific performance also available)

  1. Seller breach = FMV - K

  1. Buyer doesn�t retain land: FMV at time of breach � K
  2. Nonsubstantial deficiency where buyer retains land: Pro rata reduction in land value or K price
  3. Exception: If breach by deficient title, then restitution (return of deposit) + reliance (out-of-pocket losses) + damages for delay (if foreseeable by D ).
  4. Damages for breach of covenant: Change in FMV

  1. Buyer breach

  1. If seller retains land: K � FMV at time of breach.
Reliance

  1. Goal is to put p in position he was in before K was made.
  2. Reimburse p for losses sustained by relying on promise (not overhead)
[Restitution]

  1. Take away gain from D and return to p , valued at time of transfer in order to prevent unjust enrichment.
Punitive damages not available. Emotional distress not available, unless special relationship

  1. Carrier / Innkeeper
  2. Care of dead bodies
  3. Message of death
  4. Bodily harm
  5. Terms of K relate to comfort, happiness, or personal welfare of a party AND physical manifestation of distress.
  6. Intentional infliction of emotional distress cause of action should also be attached to K cause of action, if applicable.
Compensatory Damages: Tort

  1. Substantive

  1. No difference between negligence and ...

  1. Remedial theory: Make person whole by substituting money for harm. Not to make people wealthy.

  1. Personal property

  1. Destroyed: FMV at time and place of destruction plus reasonable loss of use damages (i.e. rental car) for reasonable amount of time to replace.

  1. Alternatives to FMV

  1. Replacement Value: Used when the item cannot be replaced, or when market value cannot be obtained.
  2. Actual Value to Owner: Used for household furnishings and clothing, but does not include sentimental value. More than FMV but less than replacement value. Factors include cost to duplicate, scrap value, amount you would pay for it, or sell it for.
  3. Sentimental Value

  1. No market
  2. Objectively sentimental (not mockishly emotional)
  3. Sentiment is essential to the item�s nature

  1. Deduction for depreciation is made to prevent windfall to injured party.

  1. Damaged

  1. Can be repaired to pre-tort condition: Cost of repair plus reasonable loss of use damages, not to exceed pre-tort FMV (then constructive destruction).
  2. Cannot be repaired to pre-tort condition: Diminution in FMV plus loss in use.

  1. Real property

  1. Damage: Restoration of property to pre-incident condition, plus compensation for post-restoration change in FMV (if any), plus value of use during nuisance. Capped at pre-tort FMV of land.

  1. Trespass: Rental value, cost of removal, and/or injunction compelling removal.

  1. Destruction or non-repairable/perminant (public nuisance)

  1. Structure: Drop in FMV of structure or of property (actual value to p if FMV hard to determine)
  2. Lost use (rare)

  1. Statute of limitations: 2 years for perminant harm. Ongoing, temporary harm has rolling statute of limitations.

  1. Person

  1. PI: Pain and suffering

  1. Based on life expectancy, presently valued.
  2. Fair and reasonable compensation for injuries, within discretion of jury.
  3. Judicial review for excessive/inadequate awards resulting from passion or prejudice, which shock the conscience. Or judge can order new trial conditionally, unless p accepts less or D gives more.
  4. Calculations for jury to make

  1. "per diem" theory
  2. How much would the jurors expect for the suffering? (Not permitted because it is subjective, not objective)

  1. Survives death of p , but pain and suffering is eliminated.

  1. Wrongful death/survival

  1. Decedent�s estate, for pain & suffering
  2. Heirs and beneficiaries, as defined by Wrongful Death Act, for pecuniary losses.

  1. Wrongful birth (negligent medical care resulting in ineffective sterilization): Cost of raising child reduced by value of benefit conferred.

  1. Emotional (distress) injuries

  1. Automatic if parasitic to property or personal harm (pain and suffering).
  2. Negligent actions with no physical harm: No cause of action.

  1. Unless relative-witness (some states, but not CA, require in zone of danger).
  2. Unless physical or severe mental manifestation (immediate or delayed) of emotional harm (including thin-skulled P), which provides validation for claim, then floodgate is opened for emotional damages.

  1. Causation

  1. Fear of disease due to toxics: Permitted if p proves that distress is caused by corroborated medical and scientific opinion that disease is more likely than not to develop as a result of the exposure. Includes cost of medical monitoring.

  1. Reckless or malicious actions with no physical harm but serious distress: Intentional infliction of emotional distress

  1. Economic injuries (subject to rule of avoidable consequences)

  1. Automatic if parasitic to property or personal harm, within proximate causation.

  1. Includes medical expenses (future expenses must be probable).
  2. Loss of earnings (actual and capacity; present and future). Receipt of sick pay irrelevent.
  3. Nonmarket services such as mowing the lawn and shopping

  1. Negligent actions with no physical harm: No cause of action, unless:

  1. Special relationship between p and tortfeasor to protect from economic harm. Includes attorney malpractice. Extends to TPs if D has particular knowledge or reason to know that identifiable others would be economically harmed by the conduct.

  1. Intentional acts with no physical harm: Cause of action.
Compensatory Damages: Limits

  1. Certainty

  1. Foreseeability

  1. Torts: Liability must be foreseeable (i.e. duty must exist), but amount of damages is not limited by what was foreseeable (thin-skull plaintiff rule).
  2. K: General damages, plus those special damages which were reasonably in contemplation of both parties at time of K formation as the probable result of breach.

  1. Proximate causation: But for D �s act, loss would not have occurred.
  2. Amount: Speculation or conjecture is not allowed. Reasonable certainty is required.

  1. Avoidable Consequences

  1. Affirmative: p can recover for costs to mitigate damages (cover).
  2. Negative: p cannot recover for losses that could have been mitigated by use of reasonable means.

  1. Injured Jahovas Witness (refuse transfusion = higher damages?): Objective, subjective, or combination? Most courts use combination. Subjective approach violates 1st Amendment. If the operation is simple and not dangerous, failure to submit when advised is unreasonable.

  1. Collateral sources: TP payments do not reduce D �s liability. Private insurance providers are usually reimbursed by D �s $. Direct source payments (i.e. from D �s insurance company) DO offset D �s liability. Windfall should be enjoyed by p , not D . Government�s general funds are direct when suing government, but special funds are considered TP payments. Gratuitous benefits received by p do not reduce D �s damage liability.
  2. Offsetting benefits

  1. Some courts say benefits must be same type as damages, i.e. apples for apples
Punitive damages

  1. Never awarded automatically � always discretionary.
  2. p must win actual or nominal damages first.
  3. Requires tortious conduct
  4. Available when D acts (p must prove by clear & convincing evidence)

  1. Oppression
  2. Fraudulently
  3. Maliciously
  4. Reckless (conscious) disregard of p �s rights

  1. Amount

  1. Should be sufficient to punish and deter D without financially ruining him (therefore wealth of D is a factor; insurance may defeat this purpose and is usually prohibited).
  2. 8th Amendment "excessive fines" clause does not apply to punitive damages � criminal only.
  3. Due process clause procedural safeguards to protect against arbitrariness (procedural) and excessiveness (substantive).

  1. Bifurcated hearing: Liability, then damages.
  2. Judge will review the award in light of all of the circumstances, and can increase or decrease the award. Test is gross excessiveness.
Common Law: Equitable

  1. Characteristics

  1. No jury trial
  2. Backed by contempt power.

  1. Civil: Secure benefits of decree.

  1. Coercive: p forces D to comply through jail or fine, no criminal protections (jury).
  2. Compensatory: p forces D to comply, can get additional damages for continued harm. No jail time.

  1. Criminal: Vindicate authority of court

  1. Indirect: Prosecutor punishes D via jail or fine, with criminal protections (jury). Double jeopardy DOES apply.
  2. Direct: Court punish D via jail or fine, no criminal protections (jury).

  1. Decrees ordering D to pay money cannot be enforced via imprisonment due to prohibitions against imprisonment for debts.

  1. In personam: Directed at a person.
  2. Only available when legal remedy is unavailable or inadequate.

  1. Adequate if p can pay for fix, then sue D , such as for removal of D �s trash from p �s lawn.
  2. Irreparable harm (because legal remedy is inadequate)
  3. If money damages will repair the harm, then the legal remedy is adequate.
  4. Not usually available to prohibit criminal activity because adequate remedy at law usually exists, but can be used for nuisance, meeting other factors.

  1. Scope is determined by nature and scope of constitutional violation.
  2. Judge has discretion not to grant remedy even if p demonstrates all requirements for remedy.

  1. Although statute may restrict judge�s discretion, if specific legislative intent exists.

  1. SMJ must be present
  2. Balancing of hardships
  3. Feasability & practicality
  4. K must be definite and certain: court cannot supply terms; p must have complied with all conditions precedent.

  1. Injunction

  1. Preventative

  1. Stop present and avoid future harms, but doesn�t remedy past harms. Prohibitory (don�t do this) or mandatory (stop doing this). Can�t be a prior restraint on First Amendment freedoms without Constitutional analysis.
  2. Mutuality of remedy / performance

  1. Restorative / reparative: Undo present effects of past harm.
  2. Prophylactic: Provides added protection on top of preventative injunction ordering D not to do an act in the future.
  3. Structural

  1. Used when entire institution is involved in a constitutional violation, and court has to restructure entire institution.
  2. Institutional Injunction: Judge supervises desegregation of school system (Brown v. Board).

  1. Remedial in nature: Must be designed to restore victims to position they would be in absent wrongful conduct.
  2. Remedial authority is used only when local authority defaults, i.e. school district fails to desegregate, so district court intervenes.
  3. Quotas and ratios can be used as a guideline only
  4. Single-race schools require strict scrutiny to ensure it is not part of state-enforced segregation
  5. Remedies include altering attendance zones, bussing (so long as it doesn�t interfere with health or education of students), and curriculum changes to remedy effects of past segregation.

  1. If order is not complied with, judge retains jurisdiction to mandate particular changes. Civil rights injunction is an exception to the traditional rule that courts don�t like extensive supervision of injunctions.
  2. Modification available upon showing of grievous wrong evoked by new and unforeseen conditions.

  1. Interlocutory

  1. Available when p needs immediate court action to avoid irreversible loss or harm (maintain status quo) while waiting for trial on merits.

  1. D can recover damages from p for the order if he finally wins on merits.

  1. TRO

  1. Brief in time
  2. Court must hold hearing for preliminary injunction ASAP.
  3. Not appealable.
  4. Notice to adverse party not required.
  5. Balance of hardships (although time period is brief).

  1. Preliminary injunction

  1. Lasts until full trial, but is appealable.
  2. Requirements

  1. Substantial likelihood that p will ultimately prevail on merits

  1. Requires mini-trial.
  2. This factor can be overlooked if the following factors are high.

  1. p will suffer irreparable injury without injunction
  2. Balance of hardships
  3. Public interest

  1. Specific Performance (real estate)

  1. Valid K between parties, with definite and certain terms.

  1. Not for personal services (except for negative injunctions)
  2. Lack of mistake, duress or unreasonable hardship.
  3. Court will not enforce when court has to rewrite the K terms.

  1. p has or will perform under the K
  2. D is able to perform its obligations (not severe hardship)

  1. p receives abatement in price for defects.

  1. p has no adequate remedy at law

  1. Uncertainty of $ damages
  2. Lack of substitutes (uniqueness)

  1. Historically remedy required mutuality, meaning that SP must be available to both parties, if parties were reversed. No longer required in most jurisdictions.
  2. Burdens on court must not be disporportionate to perceived gain for p .

  1. Defenses/Limits (at judge's discretion)

  1. Laches

  1. Unreasonable delay: Statute of limitations is a good guideline, and creates rebuttable presumption of inexcusable delay and prejudice to D .
  2. During which situation of other party has changed to the extent that additional and unnecessary detriment would exist (prejudice).

  1. Non-economic prejudice: D unable to mount a defense because of loss of records, destruction of evidence, etc.
  2. Economic prejudice: Monetary consequences to D .

  1. Estoppel

  1. Example: Coming to the nuisance.
  2. When p knowingly and intentionally acts in such a way which foreseeably causes D to change his position, p cannot maintain a claim against D .
  3. When public entity such as government is the p against whom estoppel is being claimed, D must show that government engaged in affirmative misconduct, and that the balancing of the interests strongly favors D . Includes misleading statements by public employees which caused citizen to not do something.

  1. Unclean hands, when party behaved inequitably (serious misconduct) with respect to the subject of the litigation.
  2. Unconscionability, determined at time of K formation, if terms are so one-sided as to be oppressive.
Common Law: Restitution

  1. When to use

  1. In addition to compensatory damages in order to recover profits made or benefits accrued.
  2. In order to recover when there is no K (or K is voidable or unenforceable), or when K or tort cause of action can�t be established, or when those claims won�t result in damages.
  3. When benefits have been conferred by mistake or fraud

  1. Substantive theory

  1. D has been enriched
  2. D �s retention is unjust

  1. i.e. not a gift

  1. Legal disgorgement of benefits received by D

  1. Substantive

  1. No K or no tort
  2. K or tort with no or low damages
  3. Benefit by fraud or mistake

  1. Remedial: Disgorge benefit + possible punitive damages

  1. Quasi contract

  1. Quantum meruit: Promise to pay implied from conduct of parties.

  1. Services or materials furnished for D ; D accepted, used and enjoyed; p provided with reasonable expectation of receiving compensation; D had reasonable notice that compensation was expected; Retention would be unjust
  2. Not available when K has been completed and all that remains is payment of K price.
  3. Recovery = reasonable value of work performed, less amount of compensation already received.

  1. Money had & received (election of K recovery rather than tort, when thief sold goods; aka "waiver of tort and suit in assumpsit")

  1. Fiction is that thief was acting as agent, and promises to pay profits received upon resale.
  2. Fictional agency K.

  1. Goods sold & delivered (election of K recovery rather than tort, when thief didn�t sell or got less than FMV for sale of goods)

  1. Fiction is that theft amounted to conversion, and recovery is FMV at time of sale (same as tort). Uses K SOL, not tort SOL.

  1. Replevin: Return of the item
  2. Ejectment

  1. Equitable disgorgement of benefits

  1. Substantive

  1. Benefit by fraud or mistake
  2. Breach of fiduciary or confidential relationship
  3. Other

  1. Remedial: Disgorge benefit

  1. Constructive trust

  1. Requires D to convey property to p when that property was acquired by fraud, duress, undue influence or mistake.

  1. D need not have done wrongful act � could just be mistake.
  2. Intent of parties is not a factor.

  1. Prevails except against BFP�s for value without knowledge.
  2. p recovers any increase in value to the property while in D �s hands.

  1. Equitable lien

  1. Used when property has declined in value and when there is not a severable interest in the property.
  2. D retains title subject to p �s interest.
  3. Automatic foreclosure depends on hardships, balancing of interests.
  4. Landowner can be compelled to pay for improvements to his land.

  1. Cost of improvements; or
  2. Increased value of land

  1. Mistaken improvements = enhancement of FMV; fraudulent conduct = actual cost.
  2. Creditors stand in line (first in, first out)

  1. Limits

  1. Measurement of damages

  1. Preferred method: Actual economic value of benefit to D
  2. Fallback: FMV of benefit provided, capped at K price in most courts but not California.
  3. Profits to date (not prospective)
  4. Punitive damage add-on ok

  1. BFP
  2. Changed position: Significant change in position = unfair to D with clean hands.
  3. Tracing: Must be able to identify specific piece of property through tracing.

  1. FIFO
  2. First out is D �s
  3. Restatement: Proportionate share

  1. Volunteer: When p voluntarily enriched D , not unjust for D to keep enrichment.

  1. Gift intent
  2. Intermedler: p gives benefit to D even though D doesn�t want it. Doesn�t apply when benefit is a necessity, such as emergency medical care, and no reason to believe that services would be rejected.
  3. Recipients of gifts are not obliged to pay donors for them, and volunteers cannot force others to become debtors by providing them with unrequested goods or services, and then suing them for the value of the enrichment. If recipient has no choice but to accept the gift, volunteer cannot force payment.
Statutory

  1. Limits placed on other (especially common law) remedies
  2. Grants of exclusive or non-exclusive power (create new remedies, in addition to existing remedies)
  3. Alternatives
Declaratory Judgement

  1. Declares the rights or legal relations of parties
  2. Dispute must present an actual case or controversy, which must be ripe and not moot
  3. Court must have SMJ
Declaratory Relief

  1. Clearly established substantive right.
  2. No available remedy except declaration of that right.

  1. No compensable injury, no legally protected interest, or losses cannot be proven with reasonable certainty.
  2. Nominal damages awarded.
Attorney Fees

  1. Presumption of no fee shifting, but can be modified by statute or K.
  2. Statutory attorney fees

  1. Entitlement to prevailing party (one who receives relief on the merits of a significant issue which materially alters the parties' legal relationship)
  2. Reasonable attorney's fees is based on level of success, significance of legal issue, and public policy.  Reasonable number of hours times reasonable hourly rate.
Damages are offset by mitigation

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