remedies outline - od

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Remedies – Fall 2005 – Outline – Fischer

Introduction to Remedies: Purpose of Remedies

o Redress the wrong by creating the situation that would have existed had the wrong not occurred. “restoring the П to the position he would have occupied had the wrong not occurred.”

Different Types of Remedies:o 1. Legal vs. Equitableo 2. Specific vs. Substitutional

specific – gives the П exactly what she would have if the legal wrong had not been committed.

i.e. specific performance. substitutional – instead of actual performance of a K, receiving a dollar value.

o 3. Damages this is the recovery of monetary compensation for loss caused by the legal wrong of another.

o 4. Injunctions a form of equitable relief whereby a ∆ is ordered to do something (mandatory) or refrain from

doing something (prohibitory/negative). Preventative – prevent a П’s legitimate legal position from being altered by the ∆/ Reparative – restore П to the position he would have occupied but for the ∆’s

wrongful conducto 5. Restitution

remedy that will put the ∆ in the prosition he would have been in, had he not committed the legal wrong.

designed to force the ∆ to disgorge a benefit when retention of that benefit would constitute unjust enrichment.

Can exist in law (quasi-K) or in equity (subrogation)o 6. Declaratory Relief

provides a judicial statement of the parties’ rightful legal position with respect to a particular matter.

Full effect of the remedy lies in its educative value and the further remedy of a follow up action to enforce the rights.

o 7. Punitive to punish

o 8. Nominal remedy for violations of legal rights which cause no measurable actual loss.

2 types:o 1. traditional – no actual injury suffered.o 2. injury cannot be measured or quanitified.

o 9. Presumed allowance of compensatory damages without evidence of actual oss.

Compensatory Damages:o Purpose : to provide a substitutionary monetary remedy at law awarded by a jury for the purpose of

compensating П for the loss sustained.o Elements :

1. Expectancy Interest (benefit of the bargain) puts the non-breaching party in position he would have been in if K was performed.

2. Reliance Interest (out of pocket expenses) seeks to undo the loss or detriment by giving the П a sum of money equal to the loss

or detriment sustained. 3. Restitutionary Interest

return, restoration, or transfer to the П of benefits received by the ∆ due to or arising from the П’s performance or efforts.

o General Damages a.k.a. – direct damages

Remedies – Fischer – Preliminary Outline – Fall 2006 1


damages that flow necessarily and inherently from the wrong. Must calculate their amount only. Do not have to be specifically pleaded.

o Special Damages a.k.a. – consequential damages all other damages that are caused by the wrong.

Are not presumed to follow from the wrong. Causal relationship between loss and the wrong must be specifically pleaded.

o Economic Damages Objectively verifiable monetary damages

i.e. medical expenses, lost profits, cost of repair, diminution in value.o Non-economic Damages

Subjective and non-verifiable losses i.e. P&S, emotional distress, injury to reputation, loss of consortium.

o Value : Purpose : approximating what a neutral would ID as the economic worth of what was lost or

damaged. Basic Test :

П is entitled to = value before the loss – value after the loss Broad Evidence Approach : 3 common measures, all used to determine the FMV of a thing

1. comparable sales/market value (Diminution in Value)o i.e. what would a willing buyer have paid a willing seller for the property

in the condition the property was prior to the loss?o Generally: cost of repair = diminution in value.

2. replacement cost – depreciationo i.e. purchase or reconstruction cost is used to measure the value, and then

it is reduced to reflect the depreciation value. 3. income or capitalization of earnings

o i.e. value based on the earnings of the property that was damaged or destroyed.

Cost of Repair v. Diminution in Value Generally, a П is limited to the lesser of the cost of repair or diminution in

value. (Rebuttable Presumption) - ∆ can show that COR does not equal DIV.o Exception:

Application of the “lessor of” rule is premised on the assumption that repair will eradicate the economic consequences of the injury to the property.

IF IT DOES NOT – then the diminution in value measure will be allowed, even though it is greater than the cost of repair.

o Allow COR so long as it does not exceed OR – may allow for recovery of COR so long as it does

not exceed the pre-collision value of the property.o In K:

Court is more inclined to allow the П her cost of repair even if it is more than diminution in value since П is entitled to her expectancy.

Burden of Proof П's burden to establish the loss and the amount of compensation necessary to return

her to her rightful position.o П must show sufficient evidence establishing either measure since there is a

presumption that COR = DIV. THEN, ∆’s burden to rebut the presumption and demonstrate that П chose the

“greater of”. Betterment – only applicable in Tort



Test: whether the repairs or replacement in fact added economic value to the pre-injury value.

o If, as a result of replacement or repair, value is added, the ∆ is entitled to a credit against the cost of repair or replacement for the added value or betterment.

Example:o Furnace was 4 years old when it was damaged due to ∆’s negligence. When

installed in 1990, the furnace had a use life of 10 years. Therefore, 6 years remained. The repaired furnace has a useful life of 10 years from the date of repair in 1994.

“useful life” = this is in reference to the appropriate depreciation schedules by which courts determine the amount of economic life a property has used.

When useful life is up, it is as though it has no value.o Straight Line vs. Progressive Depreciation Schedule

Straight Line: used when the useful life of the repaired property equals the original useful life of the repaired property.

At the time of damage, П had 60% of the useful life remaining; and after the repair, П had 100%. Court would allocate 60% of the cost of repair to ∆ because this is what the П lost. The remaining 40% would be borne by the П.

o When the repairs give the property a useful life different from the property’s original useful life:

Relate the pre-injury remaining useful life to the added useful life provided by the repairs.

Value as a Function of TIME Breach of K

o K general damages measured at the time of the breach. Aniticipatory repudiation – professor thinks same breach date rule.

Torto General Rule = Valuation date = date of injury

Much more flexibility: Court will allow П to recover based on the highest value

between the date of loss and the date of trial if the ∆’s engaged in morally culpable conduct.

Foreign Currency Obligationso Hickes – when underlying debt is payable in the US in a currency of a

foreign country, the breach date rule is applied.o Deutsche Bank – if a debt is payable in a foreign country in foreign

currency, the judgment day rule is applied.o Blended Rule – judgment day rule if the obligation arises entirely under

foreign law, and breach day rule if the П could recover under US law at the time of the breach.

Fluctuating Valueo General rule – the more egregious the ∆’s misconduct, the more likely the

court will allow the П to select a valuation date that will maximize recovery.

o NY rule – calculate damages based on the highest value of the property between the date of loss and a reasonable period of time after the П learned of the loss.

o Wrinkle in NY rule – recover the highest value between the date of discovery and the short period of time that you have to cover.

Basically 4 approaches:o 1. value in tort as of the date of loss.



o 2. highest value between DOL and DOT, but only for situations where ∆ acted egregiously.

o 3. NY Ruleo 3. Wrinkle in NY Rule.

Value as a Function of PLACE General Rule

o If П sold the property, the market in which the property was sold would be the relevant market.

o If П is manufactuer: 1. manufacturing cost

appropriate economic market to be used in approximating reasonable market value is the usual market where the property or goods had been purchased.

The usual market for the owner of goods held for subsequent resale, is the wholesale selling market.

2. invoice (selling) price if, on the other hand, the destroyed property had been

sold, the relevant market would be that in which the replacement sale would be made, the retail market.

o Measuring Compensatory Damages 3 primary issues:

1. Excessivenesso the award will be respected unless it shocks the conscience or evidences a

miscarriage of justice. 2. Harsh & Mild Measures

o which one the court adopts will depend on the nature or the degree of the ∆’s culpability.

3. Certaintyo damages must be proven to a requisite degree of certainty:

1. loss causation – did the ∆’s misconduct result in or cause the П’s damages.

2. calculation – quality of evidence necessary to establish the amount of damages.

o Future Damages Definition: the unrealized losses, as of the date of trial, are future damages.

The time that separates past from future damages is the DOT. Single recovery rule – П will receive one lump sum award that includes

compensation for all losses П has sustained or will sustain. Damage vs. Damages:

Damage = Injury; Damages = measure of that loss.o Distinction is critical in situations of future events.

Examples:o Car accident where П suffers BI – the injury has present consequences and

also future ramifications. Losses that will be sustained in the future are future damages

relating to the present injury. This focuses only on quantification and measure of the

damages.o Exposure to toxic substance – damage can arise in the future where a

woman takes drugs to avoid morning sickness and as a result, her daughter runs a high risk of contracting cancer at a later time.

Injury that the daughter sustains is considered as damage. In order to recover for future damage, П must show at

present time, by a preponderance of the evidence, that her exposure will result in future injury.



Discounting to Present Value – only in reference to future damages Key date = date of trial General Premise – П’s receipt of interest on the accelerated payment of future

compensation is seen as a betterment, and therefore must be discounted to present value.

o Present value = amount of money which if invested today would produce the future stream of payments the П would have received and in the manner he would have received them had he not sustained the legal wrong that is the subject of the claim.

o Only done to economic damages. Procedure for Calculating PV of Future Losses

o 1. ascertain the amount of future losses.o 2. discount that amount by the appropriate discount rate.

Interest rate which when applied to a sum yet to be determined will generate the future earnings we have just calculated.

3 components of discount rateo 1. real interest rate (1%-3%)

what is the money worth today, as opposed to a year from today?

o 2. predicted inflation rate use value of money

o 3. risk factor Simplifying this Concept: Offset Methodologies

o Take out factors:o Lost Profits

Lost profits can be expectancy damages or consequential damages Certainty Requirement:

To recover lost profits, the evidence must affirmatively show with reasonable certainty both their occurrence and the extent thereof.

o General tendency – apply more lenient standard of proof when the П’s loss is due to ∆’s tortuous misconduct.

Calculations: 1. causation:

o actuality requirement – П must show, by credible proof, that had the ∆ not committed legal misconduct, the ∆ would have earned profits.

2. extent of profits:o quantification – it will be enough if the evidence shows the extent of

damages as a matter of just and reasonable inference. Important factors:

1. period of damages 2. lost revenues

o but for the legal misconduct of ∆, how much would П have sold (X units), at what price ($Y/unit) and how much would have been returned (Z units)?

Net Sales = (X – Z)xY. 3. determining costs 4. present value

New Business Rule: Without a baseline of record of profitability, a business cannot sue for lost profits in

either tort or K, but this has been abandoned.o П must demonstrate with reasonable certainty that the start up venture

would have been profitable but for the ∆'s wrongdoing. 1. profits of another person who operated the business П would

have but for the ∆’s wrongdoing.



2. by expert economic analysis, or 3. by profits ∆ realizes as a result of its harming or destroying П’s

business.o П's Duty to Mitigate

A П’s failure to mitigate, when mitigation is reasonable and effective and would have operated to reduce the П’s recovery, will result in a dollar for dollar reduction in the recovery by the amount not mitigated.

П must act reasonably under the circumstances. Fragile П:

Tort Law – take the П has be finds him. o In mitigation, we will still apply the general standard, that it is an objective

reasonable person standard, BUT the court will allow the jury to consider the П’s individual beliefs and risk aversion when determining whether П acted reasonably in responding to the fact of her loss or injury.

Equal Opportunity Rule: П need not mitigate when the ability to lessen damages is equally available to П and

∆. Burden of Proof:

∆ must demonstrate by a preponderance of the evidence that П’s bypassed mitigation efforts would have in fact reduced the scope or severity of П’s losses.

Employee’s Duty to Mitigate: A wrongfully discharged or terminated employee has a duty to mitigate

o ∆ must show that there was suitable employment opportunities available that П could have discovered and which П was qualified, and that П failed to act reasonably in searching out and finding those replacement employment opportunities.

Intentional Wrongs: Duty to mitigate is excused or relaxed when the ∆ engages in intentional misconduct.

Landlord-Tenant: Modern trend – landlord should mitigate.

o Offsetting Benefits In Tort:

When a ∆’s tortuous conduct causes legal harm to the П or her property but in so doing also confers a special benefit to the interest that was harmed, the value of the benefit conferred is accounted for in mitigation of damages.

o Legal interests must match. i.e. if I am a dope attorney and fired wrongfully, I don’t have to

take a job at a 7-11, but if I do, the ∆ will get a credit. In K:

When a ∆’s breach of K has conferred a direct and immediate benefit on the П, the ∆ is entitled to an offset against П’s claimed damages.

o Exception – lost volume sellers.o Collateral Source Rule

General Premise: П may recover damages that include amounts for which the П has already received

compensation from sources independent of and collateral to the ∆.o i.e. П in a tort action can recover, losses for which she has received

payment under an insurance policy maintained by her. Substantive Component:

∆ is barred from reducing the ∆’s compensatory award by the amount the П received from the collateral source.

Evidentiary Component: Bars admission of evidence of the existence of the collateral source or the receipt of

those benefits. Independent Source:



CSR only applies if the benefit comes from a source wholly independent from the ∆.o Problems in this doctrine:

1. when the US is a ∆, and If the payment is made from special funds to which the П

contributed, then it will deemed an independent source, but if it is paid from general funds which are made up of general tax revenues, then it will not be considered independent.

2. claims against employers. There is a greater willingness to reject the source rule in

situations where the employee sues an employer for PI and the employee receives benefits from a fund to which the employer made payments.

o Majority – has not adopted this per se rule Gratuitous Benefits

General Rule - ∆ is not permitted to introduce evidence that the benefit was provided gratuitously; rather П can recover the reasonable value of the services actually provided.

Tort or K CSR is usually applied only to tort claims, and not to K actions.

Exception to CSR: П is malingering –

o i.e. if you put the П on the witness stand and you ask the П or the П rambles in a way that now gives the ∆ the ability to use evidence of collateral source to impeach the Пs testimony.

That the П is not suffering any significant economic consequences as a result of the injuries and therefore has an inducement not to go back to work.

Joint Tortfeasor: Payment from a joint tortfeasor does not qualify as a collateral source.

o Prejudgment Interest General Premise:

The award of interest is designed to compensate a П for delay in that party’s actual receipt of money from the ∆ prior to the date judgment is entered.

Post-Judgment Interest: Compensates a party for delay in the satisfaction of a money judgment entered on

behalf of that party against another. Rates:

In tort = 7% In K = 10%

Liquidated vs. Non-Liquidated Claims General Premise:

o Liquidated/ascertained claims entitles you to prejudgment interest as a matter of right, whereas an unliquidated claim only entitles you to prejudgment interest as a matter of discretion.

Liquidated = o When the evidence furnishes data which if believes makes it possible to

compute the amount of damages with reasonable exactness, without reliance on opinion or discretion.

Subject to objective measure Unliquidated =

o When the exact amount cannot be definitely fixed from the facts proved, but must, the last analysis, depend on the opinion or discretion of the trier of fact.

Not subject to objective measure



Date Interest Accrues: General Rule = prejudgment interest is awarded from the earliest ascertainable date.

o 2 step method: 1. calculate damages from date of injury to the date of trial

this receives prejudgment interest. 2. calculate future losses after the date of trial

this is discounted to PV.o Taxation of Awards

PI Awards: Is excluded from the gross income the amount of damages received on account of

PI or sickness.o Therefore, emotional distress is taxable, and loss of earnings in an

employment context is taxable. 2 part test:

o 1. taxpayer must demonstrate that the underlying COA is based on tort.o 2. taxpayer must show that the damages were received on account of PI or

sickness. Economic loss must result directly from the PI in order for it to be

excluded from income.o Effect of Settlement Allocation

П has incentive to shift settlement dollars away from punitis damages, which are taxable, and towards copensatory damages, which are excludable.

o Pre-Tax or After-Tax Majority Approach:

Award for damages should be based upon a П’s gross earnings that would have been realized but for the wrong – pre-tax dollars.

Minority Approach: Applying federal law, use after-tax dollars.

Loss Causation Definition varies depending on Tort or K

o Tort – causation is broader than K. What does the law do at the time of breach, since the critical concern is compensation and

deterrence?o K – since parties came together in mutual consent and allocated their own risk, the amount of risk

assumed should be defined by the bargain. What risks did the parties agree to assume at the time of the K formation?

Distinction between Cause-in-Fact and Legally Responsible Cause (as a matter of public policy) o For both Tort and K: (this is a K example)

1. actual cause what was the primary cause of the loss? (for K) and but-for (for tort)

o Usually the breach Damages must be sufficiently certain to avoid claims that they are speculative.

o П, non-breaching paryt must establish by reasonable competent evidence both the occurrence and extent of the claimed damages resulting from the breach.

2. legal responsibility – Hadley vs. Baxendale - general rule for recovery of breach of K damages

1. was it within the reasonable contemplation of the parties at the time of K formation, based upon the very nature of the K?

2. if it wasn’t, were there any special circumstances that were brought to the attention of the contracting parties?

3. tacit agreement rule?o Applies when the ∆ has been made aware, at the time of K formation, that П

will sustain extraordinary loss if the K is breached.



∆ must agree or acquiesce in being held liable for the greater exposure.

Awareness + manifestation of assent at the time of K formation.

o This satisfies #2 of the Hadley test and is also the minority rule. o Tort Causation:

Requirements: 1. cause-in-fact

o 1. but-for analysis – but for the ∆’s acts, the injury would not have occurred.

o 2. Substantial factor – so long as the ∆’s acts were a significant or substantial factor in the loss, then it was sufficient to make the ∆ factually responsible.

2. legally responsible causeo 1. direct consequences – domino effecto 2. foreseeability test – o 3. blended – broader public policy approach

1. whether the injury is too remote from the negligence 2. whether the injury is wholly out of proportion to the culpability

of the negligent tortfeasor 3. whether it retrospectively appears too highly extraordinary that

the negligence should have brought about the harm 4. whether the allowance of recovery would place too

unreasonable a burden on the negligent tortfeasor 5. whether the allowance of recovery would be too likely to open

the way for fraudulent claims, or 6. whether the allowance of recovery would have courts entering a

field that has no point of return. General Standard for Loss Causation:

Substantial certainty Liability Causation & Injury Causation

П must establish as a requisite causal link in fact between the ∆'s conduct and the specific injury that you seek to recover compensation for.

o Cause can’t be too remote. Missouri Rule: Sudden Onset Rule

Permits the П to dispense with direct proof of causation because causation is inferred.

o i.e. when the physical disability develops immediately after a negligent act and the injury is a type normally sustained by such negligence and is not the product of a pre-existing condition.

Future Losses: One Judgment Rule requires that you recover for all your injuries that are related to

the ∆’s misconduct in that one claim. Lost Chance

Limited to med mal awards:o i.e. physician’s negligence caused the patient to lose a chance at

overcoming what is usually a terminal illness or disease. % Probability Rule:

o measure of the lost of chance recovery is the value of the chance rather than the injury itself.

i.e. if a person had 40% chance of life, then ∆’s malpractice reduced that to 20%, and the jdxs wrongful death statute valued its claims at 1 million, П would get 200K.

Some Jdxs:o Broad Evidence Standard – П gets the whole million.



Economic Loss Generally:

o If you suffer only economic loss as a result of ∆’s negligence, a party may not recover for its economic losses caused by the ∆’s negligence (Based solely on a theory of negligence)

Economic loss rule You must look to K for recovery.

o If you sustain BI or PD as a result of ∆’s negligence, you can recover resulting economic loss.

Property Damage:o Majority Rule – when the defective product causes only economic loss, the

П must look to K, not tort, remedies for recovery.o External Affects Test – when the defect causes an accident involving some

violence or collision with external objects, the resulting loss is treated as PD.

On the other hand, when the damage to the product results from deterioration, internal breakage, or other non-accidental causes, it is treated as economic loss.

o Integrated Product Rule – when various components are provided by the same supplier as part of a complete and integrated package, even if a defect in one component damages another component, there is no damage to other property of the П.

Exceptions to Economic Loss Rule o Pollution Cases:

Bodily Injury Non-Economic Damages

o Negligent Infliction of Emotional Distress Courts do not recognize it as a free-standing tort Courts recognize only if:

1. it is derivative of some other actual harm. 2. when it is closely associated with a tort

o i.e. assault. Generally not available for breach of K:

Exception:o When the subject matter of the K is unique.

4 tests: 1. Physical Impact Rule

o limiting recoveries to cases where the distress is tied to a physical impact on the П.

2. Zone of Danger Testo permits ED recoveries without physical impact when a П, in the zone of

danger, reasonably fears for her own safety. Some variance as to who the fear must be for.

3. Reasonable Foreseeability Test – dominant testo permits a П to recover for her emotional distress caused by injury to

another. 1. basic approach – pure foreseeability

was it foreseeable to the ∆, based upon his or her conduct, that the П would suffer emotional distress?

2. gloss – Thing must be some sort of legally recognizable relationship,

that would allow that person to make a legitimate claim for distress damages.

4. Physical Harm or Manifestation Requirement



o requires a showing of physical injury related to the emotional distress. Must reflect some objectively ascertainable discomfort that

evidence the genuineness of the claim. Awards will be upheld so long as it does not shock the conscience.

Measuring Non-Economic Loss o Excessiveness:

An award is not excessive if it is within reasonable limits and there is any evidence in the record to sustain it.

o Pre-Impact Fear of Death: Split in Jdxs:

1. permit award without requiring prior physical injury. 2. require heavy evidence to demonstrate an awareness on the part of the П of his

imminent death or injury. Remedies for BI

o Traditional Methods: 1. lost income in the form of earnings or earnings potential

economic 2. money spent or liability incurred for med treatment

economic 3. P&S

non-economic 4. loss of consortium.

non-economico Lost Income:

2 types: 1. lost earnings/wages = what the П would have earned but for the injury 2. impairment of earning capacity = what the П could have or was capable of

earning at the time of the injury.o Important factors:

1. age 2. health 3. education 4. training 5. experience 6. opportunities 7. skills 8. due diligence

Self-Employed Пs General Premise – must be able to distinguish between value of П’s services to the

business from the return on invested capital. Preferred Method:

o Cost of hiring a replacement to perform the task the П was responsible for before the injury.

OR – П can introduce evidence of lost profits when the capital invested is small and the profits resulted primarily from the skills of the П owner.

Immigrants: Varied results.

o Medical Expenses: Recovery limited to the reasonable value of the medical care provided. Future medical expenses must be adjusted to PV

Evidence must establish with reasonable probability that the П will require the future treatment.

o Non-Economic Damages: P&S



Characterized as general damages in the context of BI claims. Need not be adjusted to PV.

Loss of Enjoyment of Life Classified as P&S

Disfigurement Loss of Consortium

o Remedies When the П Dies: General

Survival statutes permit the decedent’s estate to recover the decedent’s pre-death damages.

o Estate’s lost earnings award is measured by the decedent’s earnings from the date of injury to the date of death.

o P&S is also limited to the date of death. Wrongful death statutes permit the decedent’s survivors or his estate to recover for

the losses sustained as a result of the decedent’s death. California

ED damages do not survive the death of the П. A survival action for BI does not lie when the injuries inflicted by the tort-feasor result

in instantaneous death. Wrongful Death Actions

This is a statutory action that matures on the death of the decedent and permits the holder of the COA to recover for the independent injury and loss resulting from the death of the decedent.

2 types:o 1. loss to estate statutes

decedent’s work-life expectancy is determined in order to determine a loss of support award.

What would the decedent have earned but for his death?o Reduce to PV.

o 2. loss to survivors statutes what the survivors would have received but for the decedent’s

death? Wrongful Death Damages

o 1. loss of supporto 2. loss of serviceso 3. loss of societyo 4. funeral and burial expenseso 5. loss of inheritance

П must proof more than a mere expectancy. П must show that П would have probalby been the beneficiary. Subject to offset by life insurance.

o 6. grief and sorrowo 7. punitive damaes

Elements of a Wrongful Death Action:o 1. status as decedento 2. real party in interest

decedent’s estate (loss to estate) decedent’s survivors (loss to survivors)

statutory heirs – entitled to claim wrongful death damages as matter of right

dependents – must establish his dependency and his status as a qualified dependent person under the wrongful death statute.

o 3. prior settlement or judgment



2 approaches: 1. bar action. 2. bar action only to the extent to avoid double recovery.

o 4. statute of limitations commences on the date of death.

Conception-Related Deaths 1. wrongful life

o similar to wrongful birth but the claim is brought by the child for his or her impaired life as a result of being born with disabilities

court rejects. 2. wrongful birth

o an action brought by the parents of a birth-disabled child alleging that due to ∆’s misconduct the parents were denied the opportunity to make an informed decision whether to conceive the child or continue the pregnancy after conception.

Recognized only to the extent of permitting recovery for the extraordinary expenses the birth of a disabled child has imposed.

o Pre-natal injury claim vs. wrongful birth Entitles you to full recovery.

Had the doctor not been negligent, he could have prevented the injury.

3. wrongful conceptiono claims by parents for the wrongful failure to provide effective birth control,

which, as a consequence, has led to a pregnancy and the birth of an unplanned child.

4. wrongful pregnancy

Equitable Remedies Equity:

o Equity involves the exercise of judicial value judgments based upon relevant factual data Judicial discretion is always involved when equitable relief is sought; ethical considerations

pertaining to the conduct of the parties and their moral culpability are a part of the decision-making process when a party seeks equitable relief.

Different Types of Equitable Remedies:o 1. injunctionso 2. specific performanceo 3. rescissiono 4. reformationo 5. restitution

Equitable Relief: o Requirements:

1. core jdx of equity 2. irreparable injury requirement 3. look to a statute

statute may sometimes entitle a П to equitable relief.o Irreparable Injury Requirement

If the legal remedy is not complete, practical, efficient, etc., then the П satisfies the IIR. Frustration of Relief Sought/Loss of Chance

IIR is satisfied when delay in obtaining legal redress would effectively deprive the П of the beneficial use of the right he seeks to establish.

o i.e. Ali and his boxing license. Economic Harm

Is NOT enough to satisfy IIR, unless the harm is so great that it has measurable collateral consequences.

Problems in Measuring the Legal Remedy



IIR found when the proof needed to establish the amount of legal damages would be difficult to establish, measure or quantify.

Nature of the Injury Breach of statutory duty When ∆’s conduct infringes or deprives one of a constitutional right or guarantee.

Insolvency IIR found when ∆ is unable to respond to a monetary award.

Multiplicity of Lawsuits Uniqueness

i.e. K Actions in Equity

o Equity Acts in Personam Although the legal system may declare rights, the equitable system can act on the conscience

of the person Basically – court is acting on the person and ordering him to do something.

o Discretion in Equity Equity is based upon ideas of fairness/justice and the idea that a case must be analyzed on its

individual meritso Statutory Equity Remedies

Whenever a legislative body seeks to restrict the Court’s equitable jdx, at the very least, you have a find on your hands, and in many cases, if not all, those statutes are going to get a very close scrutiny by the court, and they will fail regularly.

o Ripeness/Mootness Key Question:

Ripeness – is there a reasonable likelihood that the event that you fear will harm you will in fact occur without the injunction?

Burden on the Court – Supervision o Even though П may have an inadequate remedy at law, if an equitable decree in the form of an

injunction will require too much court supervision, the court won’t grant the injunction.

Temporary Injunctive Relief General

o TIR consists of 2 equitable remedies: 1. TRO, and 2. Preliminary Injunction

o Both provide immediate, but durationally limited injunctive relief.o Unlike PIR, which comes only at the conclusion of a plenary trial on the merits as part of the final

judgment, this one can be obtained in much less of a complete proceeding.o Generally, a TRO will be sought at the outset of litigation, and then a request for PI will follow.o TIR should not disturb the status quo

Which is the last, uncontested status proceeding the commencement of the controversy TRO

o Procedure is less formalo This is an extraordinary remedy reserved for emergency situations.o 10-20 days.o Can be sought ex parteo Notice not always requiredo Granting or denial of a TRO is not eappealableo Any relief provided must be specific in terms and describe in reasonable detail the acts enjoined.o Injunction bond usually required.

PI o Procedures are more formal – sought through noticed motionso Requires a showing of likelihood of success on the meritso Findings of fact and conclusions of law accompany their issuance.



o Designed to provide injunctive relief until the dispute can be finally resolved in a trial on the merits.o Can be sought as a complement or wholly apart from a TRO.o Granting or denial is appealable.o Injunction bond usually required.

Test for Issuance of TIR o П must show:

1. there exists the likelihood of success on the merits. while the decision to grant or deny is reviewed under abuse of discretion, the law

applied by the court is de novo. 2. irreparable injury will result if temporary relief is not granted

П must not have an equity remedy at law.o Whether, at the time a permanent injunction would be granted or denied,

the court would be able to award adequate legal remedies for any losses or injury suffered by the П during the period the temporary injunction would have been effective had it been issued

3. the balance of hardships (or equities) lies with the П, and 4. ordering temporary relief will serve the public interest. Modern Approach: These factors will be balanced at the discretion of the court.

o 9th Circuit Test: П must show 1. a combination of probable success on the merits, and the possibility of irreparable harm; or 2. that serious questions are raised, and the balance of equities tips sharply in the moving

party’s favor. Injunction Bonds

o Injunction Bond Rule Wrongfully enjoined ∆ is limited to the bond for all damages caused by the injunction Parties can excuse bond requirement and waive the injunction bond rule.

o Purpose: 1. provides a secure source of funds from which a wrongfully enjoined ∆ may collect

damages 2. cap the amount of damages that can be collected from the П when the ∆ is wrongfully

enjoined.o Discretionary Exceptions to the Injunction Bond

1. where the П would have difficulty posting the bond, and the ∆ faces a low burden of harm from its absence.

2. where there was no proof that the ∆ would be harmed by the issuance of the injunction. 3. where the amount in dispute was deposited into court 4. where П is indigent 5. where a bond requirement would deprive a group access to court to litigate an issue

affecting the public interest, and 6. where the injunction issued to aid in the preservation of the jdx of the court, from the

control of the court.o Failure to post a required bond may render the injunction void.

Other jdxs – only voidable and therefore injunction still valid until dissolved.o Damages for wrongfully issued temporary injunctive relief must relate to the injunctions effect.

Notice and Hearing Requirements o General Rule:

TIR will not be granted unless notice is provided to the ∆ of П’s intent to seek such relief. PI = Notice is mandatory TRO = order may be sought ex parte without notice

Before a person is deemed bound by an order that person must have notice of the order. A party is entitled to an evidentiary hearing before the court enters or continues an injunction.

Appellate Review of Orders Granting or Denying Temporary Relief o TRO = no immediate appeal of a grant or denialo PI = can appeal an order



If the order changed the status quo, the order will often be deemd a PI, at least after the 10th day, for purposes of determining its appealability.

o Rule 65 TRO issued without notice expires at the end of 10 days, unless extended by order of court. A TRO continued beyond the time permissible under Rule 65 will be treated as a PI, for

purposes of determining appealability.

Permanent Injunctive Relief General

o Issued after a plenary trial on the meritso Designed to provide final and complete relief

Unlike TIR, which is designed to maintain the status quo until the П’s right to a permanent injunction can be determined.

o Goal is to put the П in the position in which he would have been absent ∆’s wrongful conduct. Scope of Injunctive Relief

o Equity courts will fashion injunctive relief as necessary to meet the needs of the case. But at the same time, relief should be narrowly tailored to fit specific legal violations. Sometimes, broad injunctive relief may be necessary due to the nature of the enjoined party’s

wrongful acts. i.e. enjoining the further publication of an entire book instead of just the infringing

portions. Entitlement to PIR

o П must show: 1. that she has a valid claim against the ∆ 2. that future harm is imminent and irreparable, and

the remedy at law is inadequate generally met when the injury is something that can’t really be compensated by

money. Irreparable:

o 1. TIR – retrospective trial judge must ask whether she will be able to remediate, by a

monetary award, harm realized by the П during the period prior to trial

o 2. PIR – prospective trial judge must ask whether she can quantify in money the harm П

will sustain after the trial is concluded if the injunction is not granted.

3. that the hardships to ∆ to compliance are not disproportionate to the benefits to П of compliance.

Avoidance of economic waste 4. issuance of the injunction be in the public interest.

o Will only issue after a plenary trial on the merits. Length of PIR

o Although a PIR is final, its duration is determined by the particular case. П is entitled only to that amount of injunctive relief needed to restore her to her rightful

position. Modification of Injunctions:

o An injunction is subject to modification when it would no longer be fair or just to require continued obedience to the existing terms of the injunction.

o TIR Modification of a Preliminary Injunction is proper only when there has been a change in

circumstances between the time the injunction was issued and the time modification is sought.o PIR

3 Part Test for the modification of a PIR:



1. a clear showing of substantial change in circumstances since the injunction was issued.

o Change in law Any change in law is an adequate basis.

o Change in facts Party must show:

1. changed factual conditions make compliance substantially more onerous

2. compliance with the injunction proves unworkable due to onforeseen obstacles, or

3. enforcement of the injunction in its present form would be detrimental to the public interest.

2. extreme and unexpected hardships in compliance with the injunctions existing terms, and

3. good reason why the court should modify the injunction. Consent Decrees and Structural Injunctions

o Consent Decrees Like permanent injunctions, they seek to remedy a particular harm by ordering the enjoined

party’s future conduct. Product of assent Product of compulsion

o Structural Injunctions Particularized form of PIR

Specificityo Injunction must be:

1. specific and 2. definite to be enforceable

o 2 approaches to how specific and definite: 1. strict approach

injunction must be clear and unambiguous and ambiguity will be resolved in favor of persons charged with violating the order.

2. less strict approach close questions of interpretation are resolved in the ∆’s favor in order to prevent

unfair surprise.o Will look objectively beyond the 4 corners of the injunction.

Persons Bound by Injunctive Reliefo General Rule

A person who knowingly assists a ∆ in violating an injunction subjects himself to civil as well as criminal proceedings for contempt/

An injunction not only binds the parties ∆’s but also those identified with themo 1. in interesto 2. in privityo 3. represented by themo 4. subject to their control.

o Successors in Interest: 2 views:

1. bind the successor when the successor acquires the assets and property of the enjoined party.

2. 3 part test: Bateso 1. continuity in operations and work force of the successor and predecessor

employerso 2. notice to the successor employer of its predecessor’s legal obligation,

ando 3. ability of the predecessor to provide adequate relief directly.



Restitutionary Relief Goal

o Avoid unjust enrichment Recovery of the benefit realized by the ∆, and not the harm or injury sustained by the ∆.

o Critical Inquiry Whether retention of the benefit by the ∆ would be unconscionable.

П is usually deemed entitled to reestitution if he establishes that the ∆ was injustly enriched, either through a wrongful act or by passively accepting a benefit that owuld be unconscionable for the ∆ to keep.

Judicial Review o Trial court’s finding on issues of unjust enrichment are reviewed for abuse of discretion consistent

with the general approach to equitable determinations. Unjust Enrichment

o Volunteer principle: This is a justification for denying a claim for unjust enrichment.

A person who , without request, at his own insistence, and without a valid reason confers a benefit upon another, is not entitled to restitution.

i.e. person acting to protect his own legal interest, even though it is ultimately determined that he had no legal liability, is not a volunteer.

i.e. paying the debt of another in reponse to the threat of civil proceedings by 3rd person.

i.e. person acting under a legal obligation is not a volunteer i.e. if benefit is conferred out of a moral duty, rather than a legal duty, conferrer is a

volunteer. A mistaken belief of a moral obligation to act and then the action does not constitute

a volunteer.o П must always act in good faith in providing the benefit.

П cannot expect payment for the benefit when he confers the benefit over the objection of the ∆.

o Choice principle: Restitution will be denied when the benefactor denied or frustrated the recipient’s ability to

reject the benefit.o Mistaken payment:

1. when a person receives something with knowledge of the circumstances evidencing that the transfer is mistaken, that person may be held to have been unjustly enriched.

2. when a party enters or concludes a bargain consciously aware that it is uncertain as to the true facts, that party may not seek restitution on the ground of mistake.

o Expectation of Payment/Compensation 1. where goods are services have been provided, the benefit must be conferred on the ∆ under

circumstances that raises an expectation, on the П’s part, of payment or compensation. If proided altruistically, restitution is inappropriate.

Prima Facie Case of Unjust Enrichment o COA =

1. a benefit conferred upon the ∆ by the П with expectation of payment 2. awareness, appreciation or knowledge by the ∆ of the benefit; and 3. acceptance or retention of the benefit by the ∆ under such circumstances as to make it

inequitable for the ∆ to retain the benefit without payment to the П.o In Emergency Situations:

Restitution will be allowed even though the goods or services were provided w/o knowledge or consent of the ∆ if the П acted with the expectation of payment an under circumstances where he acted immediately to satisfy requirements of public decency; health or safety.

∆ must be under a duty to ac, and that the expenses for which the П seeks reimbursement be incurred in connection with the discharge of ∆’s duty by the П, which benefits ∆.



Quasi-K Actions o Definition

It is a form of restitution, that implies a K and then gives the reasonable value of services to prevent unjust enrichment.

A fictional promise. There will be no quasi-K remedy if there is a K in existence.

o Remedy: П recovers in quantum meruit (reasonable value of services rendered)

Award is measured by:o 1. gains accruing to the wrongdoer, oro 2. losses sustained by the injured party

Valuation of the Benefit o Critical Issue:

Disgorgement of the benefit unjustly held by the ∆.o 3 approaches to measuring benefit:

1. cost of producing – subjective 2. market value of the thing produced – objective 3. value to the ∆ of the thing produced – subjective Court has dissection in the measure of value of the benefit

o Apportioning Benefits fairness is key:

the more culpable the ∆, the more direct the connection between profits and wrongdoing, the more likely that the П can recover all ∆’s profits.

2 important factors: 1. feasibility of the apportionment

o ∆ has the burden of proving what portion of the total benefit resulted from lawful activities.

2. culpability of the ∆ Other Restitutionary Remedies

o 1. disgorgement orders taking the ill-gotten gains away from the wrongdoer restore the ∆ to the status quo by stripping him of his gains he unjustly obtained by his

misconduct.o 2. subrogation

principle = where A has paid the obligation of B, who is primarily liable, it is fair and just that A receive reimbursement from B, otherwise B would be unjustly enriched.

Subrogee = (A) person who pays the obligation Subrogor = (B) person whose obligation is paid

Legal vs. conventional Legal = equitable principles

o Requires showing of unjust enrichment and if person acts a volunteer, there is no unjust enrichment.

Conventional = based on K Subrogee steps into the shows of the subrogor and can assert all the subrogor’s rights

o 3. indemnity Principle = provides for reimbursement when one person pays or discharges a debt or liability

which another person should have paid or discharged. One party (indemnitee) has paid more than its fair share and therefore another

person (indemnitor) has been unjustly enriched to that extent. 2 forms:

1. contractual – consensual risk sharing agreement between partieso i.e. insurance

2. equitable – arises by operation of lawo i.e. joint tortfeasors when one tortfeasor was passively liable and the other

was actively liable.



o i.e. where parties had a relationship but failed to expressly address risk of loss issues within the relationship.

3. implied – indemnity will be implied when public policy and justice dictate that responsibility for payment of damages should be shifted entirely from one party to another.

Rules: 1. claim for equitable or implied contractual indemnification does not accrue until

the person seeking indemnification has paid the debt or discharged the obligation which is more justly owed by another.

2. indemnification is not available unless the indemnitor could be held directly liable to the person injured.

o 4. constructive trusts Principle = provides specific relief that can be used to reach the product of assets wrongfully

appropriated through fraud, mistake, duress, or fiduciary relationship. Basically = ∆ is holding the property involuntarily as a trustee for the benefit of the

person with a superior equitable claim to the property. Elements of constructive trust:

1. wrongful acto fraud, mistake, duress, etc.o need not be done by the person currently having possession of the property

2. specific property acquired by ∆ which is traceable to the wrongful behavioro tracing allows П to follow what is his through subsequent transactions in

which the property is sold, exchanged or chages formo strict tracing in BK

3. equitable reason why the person now holding the property should not be allowed to keep or retain possession of the property.

When appropriate: 1. when a money judgment would be largely uncollectible. 2. when a money judgment could be compromised by the claims of others creditors. 3. when the П must trace her property into new, evolved forms of property.

o 5. equitable liens Principle = specific relief which allows the claimant to trace property into the product of ∆

and to establish a lien or charge (monetary claim) against identified property up to the amount of the lien.

Property will collateralize the money judgment that the П-lienholder obtains against the ∆.

The most you can get is the amount you are owed Different with CT:

People want CT if the property has appreciated because CT allows for the capture of the appreciation inherent in the property.

Good Faith Improve of Property: GFIP owned by another – a court of equity may give restitution to a П and prevent

unjust enrichment of a ∆ by imposing a CT or by imposing an EL upon the property in favor of the П.

o BUT – when the П makes improvements upon the land of another under circumstances which entitle him to restitution, he is entitled only to an EL upon the land and he cannot charge the owner of the land as C trustee and compel the owner to transfer the land to him.

Tracing Principles: Rightful owner of property is entitled to follow what is his through subsequent

transactions in which the property is sold, exchanged, or transferred.o As long as the owner can ID his property, he can trace it through an

unlimited number of transactions. Limitations on Following Property

o Strict tracing in BK



Party seeking to trace property out of commingled funds has the burden of tracing the alleged trust property specifically and directly back to the illegal transfer giving rise to the trust.

o Lowest Intermediate Balance Rule and Tracing Fictions When trustee commingles trust funds with other funds in a single

account. Once the single account is reduced, the amount expended

is dissipated and cannot be deemed to reappear in subsequent deposits.

o Therefore – when traced proceeds are withdrawn, they are lost.

o Modern Approach Beneficiary’s interest in a commingled account are preserved to

the greatest extent possible as the account is depleted. Withdrawals come first from the wrongdoer’s interest in

the funds.

Remedies Defenses: Laches

o Concern = delay in bringing the action.o Principle = equity will determine whether in the particular case, delay and its consequences warrant

denial of equitable relief in the interests of justice and fairness. Requirements:

Essence = unreasonable delay by the П, causing material prejudice to the ∆. 1. П delayed in bringing the action 2. delay must be unreasonable

o when there is no good explanation for the delayo ∆ has the burden of showing unreasonable delay

3. ∆ must show material prejudice from the unreasonable delayo 1. defense prejudiceo 2. economic prejudice - ∆’s liability is now enlarged.o 3. unfair exposure to risk

SOL o Analysis:

1. claim must be correctly identified and matched with the appropriate SOL 2. accrual

IDs the point when an action can first be maintained.o Discovery of injury or harm:

COA accrues when the П knew or should have known that actionable harm was committed.

Court will apply this rule when:o 1. when a statue so provides, oro 2. when it is equitable to do so

determining the discovery date:o 1. traditional – date П discovers any

manifestation of the injuryo 2. many jdxs – date the П discovers that she has

been substantially harmedo 3. date the П discovers that she has been harmed

as a result of a specific ∆’s conduct.o Continuing Injury or Violation:

Applies when the wrongful conduct is ongoing rather than a single event.



Once ∆ ceases operation of the nuisance, etc., the fact that the injury continues doesn’t give rise to new COAs

Employment Discrimination Cases: П will have a clam so long as П files a complaint that is

timely as to any incident of discrimination. 3. tolling

suspension of a limitations period applicable to an accrued claim.o 2 sources:

1. statutes, and 2. equity

estoppelo will estop a ∆ from raising the SOL defense

when it: 1. was the protagonist for the delay in

settlement negotiations. 2. it intentionally misled П by

promising that it would compensate for loss.

3. П relied on those representations and did not commence his action under after the SOL had run.

Concealmento Elements:

1. wrongful concealment by the ∆ 2. failure by П to discover the true facts

evidencing the action within the applicable statutory period of limitations, and

3. due diligence by the П until discovery of the action.

o It will only toll the SOL for the ∆’s that actively participate in the concealment.

Unclean Hands o Principle = a court should not provide aid in the commission of a wrong or relieve a party of the

consequences of his participation in wrong. He who comes into equity must come with clean hands.

o Requirements: 1. wrongful conduct which dirties the П hands must be connected with the controversy before

the court. Tight fit between the defense and the controversy Misconduct directed at a 3rd party won’t support the defense of unclean hands. Even when the defense of unclean hands is properly made, it may be defeated by a

higher equity or public policy In Pari Delicto

o Principle = Equal Fault Situations when the П’s culpability regarding the matter at issue is equal to or greater than the

∆’s culpability. Legal counterpart to unclean hands Focuses on the relative culpability of the parties.

Application of the defense must not violate the public interest or public policy Equitable Estoppel

o Principle = to prevent the actor from profiting by exploiting action or inaction he has induced another to take.

o Requires proof of 2 elements: 1. misleading conduct in the form of words or actions by the party to be estopped.



Mere silence cannot raise an estoppel. Misleading silence that induces reliance can raise an estoppel. Silence can raise estoppel when a person has a duty to speak

o Superior knowledge – when the possessor of superior knowledge knows the other is ignorant of the true facts and that the other’s ignorance will cause him to do what he would not do except for the possessor’s silence.

o Fiduciary duty or a confidential relationship 2. misleading conduct must induce the other party to act or refrain from acting in a way that

is prejudicial to his legal interests. 3. also party claiming estoppel must have relied on the misleading conduct, and been without

knowledge as to the true facts. Waiver

o Definition = the intentional relinquishment of a known right. 1. person must be fully aware of the right, and 2. possess the actual intent to give it up.

o Implied Waiver: As a result of conduct that is inconsistent with the intent to hold and assert the right. As a result of inadvertent conduct by the person subject to the waiver.

Duress o Principle = permits a party to avoid an obligation based on an act that was compelled because of the

wrongful threat of another which precluded the party’s exercise of free will.o Requirements:

Victim must show: 1. that he was subject to a wrongful or unlawful act or threat, and

o act must come from ∆ 2. that the act or threat deprived him of his unfettered will.

Illegality o Principle = no legal aid or assistance to parties to an illegal transaction.

Equitable Defenses against the Government o Laches

Government claims are not subject to laches, unless: 1. if the government sues on behalf of specific individuals 2. laches have been applied to government K claims.

o Equitable Estoppel Cannot be asserted against the government

o Unclean Hands: Unclean hands by the government is usually tolerated when the government represents the

public as a whole and asserts a public right.

Personal Property Remedies Injury to Personal Property = interference with the dominion or control of property General Principles

o 1. Complete Destruction of PP Damages = FMV of the property at the time it was destroyed.

+ loss of use damages. Must reflect any salvage value.

o 2. Partial Destruction of PP Damages = diminution in value

FMV before injury – FMV after the injury OR = Cost of Repair Majority: П is usually limited to the lesser of the 2 measures Minority: recovery for the cost of repair as long as it does not exceed the pre-tort value of

the property. П has burden of showing amount of loss.

o 3. Loss of Use



recoverable while the PP is being repaired Damages = fair rental value of the property:

1. amount П could have realized by renting out the property in its pre-tort condition, or

2. reasonable cost of renting a substitute. Property w/ no Market Value

o Damages = value to the owner (Excluding sentimental value) Loss of OR Interference with Possession

o Conversion Damages When a ∆ wrongfully interferes with П’s right of possession to, dominion of, or control over

property, the law allows the П to treat the interference as a sale of the property to the ∆. Usual Measure = FMV of the property at the time of the taking + pre-judgment interest Taking Value Into Account:

NY Rule = where the property has fluctuating value, many jdxs allow the П the highest market price reached within a reasonable time after discovery of the conversion.

If property appreciates, go for replevin Conversion not available when the claim is that “money” was taken.

o Replevin Damages Seeking the return of the specific (unique) property – if ∆ destroys the PP, then he will be

subject to a judgment that represents the value of the property as of the time of trial П is entitled to loss of use П can get consequential damages П's claim can be negated by a superior title by a BFP

o Thief cannot convey title, even to a BFPo But if ascession (converter adds new material), this can cut off orig. title

California Rule – 1. if improver enhances the property by adding materials,

the whole belongs to the owner of the principal part. 2. if improver enhances the property through services,

but the enhancement does not constitute the principle part, the owner must compensate enhancer for value of services.

3. if enhancement by services is to principal part, then improver may claim the property but pay owner the FMV of the property prior to enhancement

Right can be lost through SOL or lacheso Demand Rule – SOL begins at the time ∆ takes possession OR at the time

П demands return and is refused.o Discovery Rule – Tolls Sol until the true owner knows or should know the

ID of the possessor Requires due diligence.

o Specific Restitution Leads to the imposition of a constructive trust or an equitable lien in cases of fraud or breach

of fiduciary relationship, if the remedy at law is inadequate. o Restitution

Focusing on the ∆’s benefit and addressing the wrongful interference through unjust enrichment.

Remedies for Injury to Real Property General Principles

o Usual measure = diminution in value = FMV prior to the injury – FMV after the injuryo Alternative Measures:

1. cost of repair – 2 views: 1. lesser of the DIV and COR



2. permit COR if DIV does not adequately reflect the actual detriment sustained 2. cost of restoration 3. remediation

Damage to Realty o If permanent injury: (fixed and immutable)

Damages = DIVo If temporary injury: (intermittent and occasional/repairable injury)

Damages = COR or Remediation Damage to Buildings

o If building is totally destroyed: DIV

o If building is partially destroyed: COR or Restoration

But – recovery may not exceed DIVo Essentially, whether the building is totally or partially destroyed is based

on the reference to DIV and CORo If building was unique:

Damages = replacement cost – depreciation To qualify:

1. improvement must be unique and specially built for the specific purpose for which it is designed.

2. improvement must have been designed for a special use and must be so specially used

3. no market for the type of property and no sales of property for such use, and 4. improvement must be an appropriate improvement at the time of the injury and its

use must be economically feasible and reasonably expected to be replaced. Removal Of or Damage to Fixtures

o Damages = market value of the fixture П may get the cost of restoring or replacing the fixture when it can be done at reasonable cost

not disproportionate to the injuries suffered and the cost is less than the DIV of the whole property.

Natural Resource Damages o Environmental Injury = when real property has been contaminated and sustained environmental

damage, the П can get cost of restoration + loss of use damages.

o Stigma Damages = in the context of environmental contamination of land a party should be entitled to recover as damages any proven reduction in the FMV of real property remaining after remediation.

o Damage to Trees = if the injury is to fruit and ornamental trees, П can recover a non-market measure, but the cost of restoration may not be disproportionate to the market value of the property.

Remedies for Unauthorized Occupancy of Real Property – Ejectmento If the ∆ is in possession of the land and the П has superior title, then П can seek ejectment to

recover immediate possession of real property. Can also recover mesne profits (restitution for rental value)

Profit between the period of time beginning with the accrual of the action for ejectment and the recovery of the property.

Measured by:o 1. reasonable valueo 2. actual value to the ∆, oro 3. actual worth of the property to the П.

o Quiet Title This is a declaratory relief action to determine who legally owns the property

П must have actual possession of the property in controversy for quiet title action. Remedies for Unauthorized Taking, Occupancy, or Incursion Onto Real Property – Trespass

o Involves the possessory intrusion into the property of another.



A trespasser is liable in damages for all injuries proximately flowing from his trepass 1. DIV, or

o if use or occupancy is permanent 2. Reasonable rental value

o Trespass to Minerals: If willful trespasser:

The rightful owner is entitled to the full value of the mineral after its extraction w/o reduction for the trespasser’s production expenses.

If innocent trespasser: (2 approaches) 1. damages = value of the mineral extraction – costs incurred by the trespasser in

producing the mineral 2. royalty rate = exploitation value of the mineral before it is disturbed. П's election will depend on whether th П had the ability to develop the resource.

o Encroachment (Continuing Trespass) A physical occupation that effectively transfers the use and benefit of the property occupied

from the owner to the encroacher. Since this is permanent, the court will issue an injunction if on balance, the right

of the party to the exclusive use and enjoyment outweighs the cost of such compliance.

Nuisance o Definition: an unreasonable interference w/ use and enjoyment of land (no intent required)o Remedy:

An injunction may be granted if the injury is of a continuing nature Balance:

o 1. hardships and the public interesto 2. nature and scope of damage to П and the cost of enjoining ∆’s activity

П can still get damages until the injunciton issues General Damages are measured by (permanent) DIV or temporary (cost of repair)

standards Annoyance damages are available for both.

o Permanent Nuisance Definition – a nuisance that won’t be abated and can only be redressed through damages.

Must bring all claims (past, present, and future) in one claim SOL could cause ∆ to lose the claim.

o Temporary Nuisance Definition – a nuisance that is abatable, redressed through injunction

Damages before SOL period are barred Damages after trial require a separate action.

o Public Nuisance П may bring an action for public nuisance if he suffers an injury that is different from the

public at large. Good Faith Improver of Property – Doctrine of Accession and Confusion

o General Rule: Improve property at your own peril

o Exception: Accession and confusion allows improvers of real or personal property to receive a credit for

the value they impart to the true owner’s property. Limitation:

o Improver must act innocently and in good faith.o Some court will require that the improver’s entry onto the property be under

a colorable claim of title to claim betterment Physical ID Test

Courts will apply the doctrine only if the physical identity of the property has changes so that it is no longer considered the same property

Relative Value Test



Courts will apply the doctrine and vest title in the party who produces the greatest contribution to the finished product.

o You can also recover in quasi-K

Fraud & Misrepresentation Background

o The context in which the fraud claim is asserted and the remedial purpose of the action are highly significant in defining what fraud is and conversely, whether, and what, fraud remedies are available in the particular case.

Common Law Fraud o Damages Action: П must plead and prove:

1. a false representation by the ∆ of a past or present fact 2. ∆’s knowledge of the falsity of the representation (Scienter)

if negligent misrepresentation or innocent misrepresentation, П can only get out of pocket damages.

3. the representation was material to the transaction or bargain would induce a reasonably prudent person to rely on the representation

4. П did in fact rely on the representation, and 5. П suffered actual damages from reliance on the misrepresentation.

If only “damage” has been sustained, then rescission and nominal damages should be recognized.

Equitable Fraud o When fraud is the basis for rescission of the transaction, the fraud may be based on intentional,

negligent, or innocent misrepresentation. Fraud Economic Damages

o Out of Pocket vs. Benefit of the Bargain Out of pocket measure = difference between the value parted with (usually KSN) and the

value received. Benefit of the Bargain = difference between what that party would have received had the

representations been true and the value of what was actually received. This is different from bargain expectancy

o Consequential Damages – “special damages” They are recoverable when they are foreseeable and directly traceable to and result from the

fraud. i.e. costs incurred in preparing for, performing, or passing up other business

opportunities, as well as costs incurred in making reasonable efforts to mitigate damages.

o Distress Damages Generally unavailable because they’re difficult to measure and K damages are limited to

pecuniary losses, but they can be recovered if it’s the kind of fraud that would normally cause distress.

o Attorney’s Fees and Punitive Damages Attorneys Fees are limited to cases where the recovery of fees is allowed statute, contract, or

limited exceptions. Punitive Damages can be recovered in cases of CL fraud, and attorneys fees can be a

component of that punitive damages award. Negligent Misrepresentation

o If it is recognized, the defrauded party can recover pecuniary losses to the same extent as if the misrepresentation was deliberate.

Comparative fault may reduce damages.o Restatement Approach:

Out of Pocket measure.o Tests to Determine Whether a Duty of Candor was Owed to the Recipient of the

Misrepresentation: 1. privity or near privity requirement



duty to avoid negligent misrepresentations is owed only to those in K privity or to those not in privity who rely on their detriment and only when their relationship with the provider/supplier of the information is so close as to approach that of privity.

2. pure tort foreseeability standard provider/supplier of information has a duty to all those whom that auditor should

reasonable foresee as recipients from the company of the audit report for its proper business purposes, provided that the recipients rely.

3. restatement approach – Majority View limited scope of liability to parties not in privity to transaction or bargains

o 1. the maker of the misrepresentation intends to influence, oro 2. the maker of the misrepresentation knows that the party in privity, who

receives the information, intends to use that information to influence another w/ regards to that bargain.

Promissory Fraud o A party may be able to assert a fraud claim when she can show that ∆ never intended on performing its

contractual obligations (at the time of K formation). i.e. promises as to present facts; promises as to present intent.

Injunctive Relief o When the fraud has continuing injurious consequences which an injunction may abate, injunctive relief

is recognized: 1. action to enjoin payment of a promissory note that was acquired by fraud 2. action to enjoin the ∆ from accepting a bid, allegedly procured by fraud, to the detriment of

another bidder, the П. Fraud Causation

o Loss Causation Loss must result from the fraud

If an intervening event is foreseeable, it will not cut-off ∆’s liability.o Fraud Economic Loss Rule

П may not recover if all he ha suffered is mere economic loss. Fraud claim must exist independent of the K to be actionable.

Non-Disclosure As Fraud o Non-disclosure of material facts amounts to actionable fraud only when the non-disclosing party has a

duty to disclose: 4 situations where there is a duty:

1. a statute creates a duty to disclose 2. a fiduciary or confidential relationship exists between the parties to the

transaction or bargain 3. a disclosure has been made which is partially true and partially false 4. one party has superior knowledge of the true fats and the other party to the

bargain or transaction is unable to acquire that same information at a reasonable cost.o Critical issue: cost of acquiring the information.

o You cannot avoid affirmative disclosure duties by stating that the sale is “as is” Fraud by Fiduciaries

o The scope of fiduciary duty is defined w/ reference to the experience and intelligence of the person to whom the duty is owed (greater vulnerability = greater duty)

o Damages: When the defrauded party sues the fiduciary for fraud, the tendency is to allow for the benefit

of the bargain damages. The fiduciary duty may expose ∆ to fraud damages when, absent the fiduciary relationship, no

remedy or COA would exist.o Restitution:

Agents, who for their own benefit, act deceptively toward 3rd parties, ostensibly on behalf of their principals, may be required to disgorge to the 3rd parties any benefits they obtained from the 3rd party.

Fraud and Public Policy



o You can be defrauded but not able to recover damages i.e. when a subcontractor is not licensed and sues for fraud and the court gives no recovery

because not licensed.

Rescission Background

o It is a restitutionary K remedy intended to undo the K and return the parties to the position they were in before the K was formed (status quo)

The less likely it wil be that restoration will be rendered may call for denying rescission: Factors:

o 1. when П has been instrumental in preventing the restoration of the status quo – deny rescission

o 2. when restoration cannot be achieved because of ∆’s misconduct – allow rescission.

o It is usually granted in cases of fraud, deceit, misrepresentation, failure of KNS, material breach of K, duress, undue influence, and illegality

Rescission is Sole Remedy: 1. mistake, duress and illegality

Rescission in not Sole Remedy: 1. fraud, deceit, misrep, failure of KSN, undue influence.

o In order to establish an equitable right to rescind a bargain, the rescinding party must establish that timely notice of rescission was provided to the other party, return or offer to return the KSN the rescinding party received, and restore any benefit derived from possession of the KSN when retention of that benefit would constitute unjust enrichment.

Types of Rescission o Rescission at Law

Must tender KSN received to the ∆, and then can sue ∆ in quasi-Ko Rescission in Equity

Tender not required To Rescind a K, the Rescinding Party Must:

o 1. give ∆ timely notice of rescission given within a reasonable time after the rescinding party learns, or should have learned that it

possessed a right to rescind. o 2. return or offer to return KSN the rescinding party received, ando 3. restore any benefit derived from possession of the KSN when retention would constitute unjust

enrichment. Election of Remedies

o This doctrine may be applied to require the П to choose between statutory or CL rights Purpose of Election Doctrine:

1. operates as a preemption rule, 2. prevents duplicative remedies for a single injury

o i.e. can’t ask for rescission and expectancy 3. prevents parties from seeking inconsistent theories of relief

o Seeking Interim Relief: Majority View: Seeking interim relief (TRO or preliminary injunction) to preserve the status

quo, as opposed to obtaining a pre-trial advantage, should not be deemed an election.o Judicial Estoppel:

Judicial Estoppel is related to the doctrine of election. Judicial estoppel bars a party from obtaining an advantage by taking one position

before a court and then seeking a 2nd advantage by taking an inconsistent and incompatible position

Scope of Rescission Remedy o You can get rescission damages, punitive damages, and disgorgement of benefit

1. rescission damages = out of pocket losses caused by the conduct justifying rescission



2. disgorgement = when rescission action is based on culpable wrongdoing.

Remedies for Hurt Feelings Background

o The Heart Balm Statutes effectively abolished all the pansy type torts, but there still remains difficult issues:

1. personal tort committed by fiduciary: still recognize a claim for breach of FD

2. IIED the allegation is that the tort was accomplished by sufficiently outrageous and

offensive means to constitute the independent tort of IIED 3. Fraud and Personal Relationships

courts have generally refused to allow fraud allegations to displace the policy behind Heart Balm Statutes.

Remedies for Injury to Reputation o Defamation

Definition – false and malicious publication of facts which tend to injure the reputation of another or hold him up to public ridicule, hatred or contempt.

Types of Claims: 1. Per Se – where the word are intrinsically and inherently harmful, without the need

of intrinsic evidence to demonstrate injury to the Пo you will get presumed damages

2. Per Quod – where the word which depended on the facts and circumstances of the particular case, or the context in which the words were published or uttered, in order to demonstrate their defamatory import.

o Requires a showing that the words were defamatory and a showing of special damages (pecuniary losses) flowing from the defamatory words.

Presumed Damages No proof requirement for assisting in the calculation. Lots of discretion. Gertz

o Court may not permit the recovery of presumed damages absent NY Times scienter, which was actual knowledge of the falsity of the words or reckless disregard of the truth on the part of the ∆.

Dun & Bradstreet o Don’t need NY Times Scienter when the defamatory words did not involve

a matter of public conern. Reputational Injury

П must offer some competent proof that people believed П to be guilty of the defamatory acts attributed to him or that people though less of him as a result of the publication of the defamatory material:

o Does not require proof of economic consequences. Libel-Proof Пs:

o A П whose reputation is so bad that, as a matter of law, they cannot claim damages as a result o defamatory statements.

1. career criminals 2. death row inmates 3. disciplined professionals, and 4. convicted assassins

Incremental Harm Rule:o This rule compares the harm to reputation resulting from non-actionable

statements about the П with the harm to the П resulting solely from defamatory statements about the П.

Non-Reputational Damages in Defamation Action



Generally, if reputational injury is established, the П may recover non-reputational losses associated with the defamation as long as those losses result from the defamation:

o 1. emotional distress damageso 2. economic losseso 3. punitive damages

Injunctions Against Publication of Defamatory Statements П must make a strong and compelling showing that the defamatory statments are part

of contuing course of conduct designed to harm the П by the reptitive publication of the defamatory material.

o Injunction will be limited to those statements found to be actionable and defamatory

Remedies for Injury to Personal Dignity o Privacy

Possibly allowing for restitution or punitive damages. 1st Amendment is a concern

o Litigation Torts 2 primary actions to redress misuse of legal process

1. malicious prosecution, and 2. abuse of process OR COMBINED – the wrongful use of legal proceedings

Malicious Prosecution Designed to compensate a person who is wrongfully hauled into court and forced to

defend himself against a frivolous claim.o Some jdx require a special injury – some physical interference with a

party’s person or property in the form of an arrest, attachment, injunction or sequestration.

Abuse of Process Misuse of the tools the law affords litigance once they are in a lawsuit.

Damages Allowed: Distress damages, reputational injury, loss or injury to creditworthiness.

Breach of K Remedies Background

o Important to understand that remedies for Breach of K will depend on the situation. Approach:

1. What kind of K are we dealing with?o Employment or construction

2. Who is the breaching party? 3. What relief am I seeking?

o Damages, injunction (specific performance), and restitution 4. What are the breaching party’s rights?

o Traditional rule – no assistance to breaching party Exception – substantial compliance rule

If the breaching party substantially complied, that person can sue on the K as long as the non-breaching party was made whole.

o Modern Rule – restitution To prevent the unjust enrichment of the non-breaching party.

5. Focus on economic losses since courts are reluctant to award non-economic damages in a K context

o Fault: There is no role in the enforcement of K claims since contractual liability is strict. Culpability only comes into play when measuring the appropriate remedy.

Employment Ks



o Rule: to have a viable breach of K claim, there must be a term that is expressed in the K or the court may impose a reasonable term even if the K is at will.

Employment at will: This is usually a unilateral commitment from the employer to the employee.

o Employee’s Remedies Against Employer – Employer’s Breach Front Pay vs. Back Pay

Front Pay – everything the employee si entitled to but for the wrongful employment action after the date of judgment

o i.e. earnings from year 6 to year 20 (future work) is front pay Back Pay – compensation that would have been earned from the date of the incident

up to the date of trial.o i.e. compensation form year 0 to year 5 (Date of trial).

Damages Remedies = Employee’s Lost Expectancy This is equal to the compensation that the employee would have earned over the K

term (including fringe benefits, sick pay, vacation pay, etc.)o Fixed Term vs. Indefinite Term

Fixed is easy Indefinite term is committed to discretion of the trier-of-fact.

П has the burden of proof to prove with reasonable certainty.

o Employee’s Duty to Mitigate Damages If П fails to work, there is a presumption of unreasonableness Employee can limit the employees damages claim by offering to

reinstate the employee to his position from which she was wrongfully discharged.

Unreasonable refusal of an unconditional offer of reinstatement forfeits the employee’s claim to damages that accrue after that date.

o Employee may have failed to mitigate Injunction Relief – Reinstatement of Employee to Position

An employee who is wrongfully terminated may seek injunctive relief in the form of reinstatement to her position including all promotions and advancements the employee would have received but for the wrongful termination.

o This decision of reinstatement is committed to the discretion of the court No need to seek other employment if seeking reinstatement. Rights of 3rd parties:

o 3 approaches: 1. rights of the innocent co-employee may be deemed superior to

those of the wrongfully discharged employee and therefore reinstatement will be denied if it will harm the innocent co-employee

2. rights of the innocent co-employee may be subordinated to those of the wrongfully discharged employee

3. innocent co-employee is not bumped but the wrongfully discharged employee is paid as if he occupied the position and he is reinstated when the position is available.

Quantum Meruit An action for the employee’s reasonable value of services renedered.

o used primarily for lawyers discharged prior to the contingency being realized

o Employer’s Remedies – Employee’s Breach Damages Remedy

Cost of obtaining a replacement employeeo But the damages are limited to the remaining term of the employment K

Employer may recover:



o 1. difference between the K rate for the ∆-employee and the market rate the П-employer will be required to pay to obtain a substitute for the remainder of the term.

o 2. cost of training the new employee to perform the breaching employee’s duties.

o 3. cost of advertising and interviewing the replacement employee. Consequential Damages:

o In the right case, it might be awardable. Equitable Remedy for Employer

Generally, an employer cannot get an injunction requiring the ∆-employee to perform their employment K, unless their work stoppage threatens public safety.

o BUT – negative injunctions Ordering the ∆-employee not to work for another if that would

work constitute a breach of K. Limited to when the services of the employee are unique and

allowing the employee to work for another would impose substantial harm to the employer not readily capable of monetary assessment or collection.

Covenant must impose no more than a reasonable restriction on the employee’s ability to secure work.

1. the scope of activities barred by the covenant 2. geographic space or extent of the covenant, and 3. duration or length of time the covenant is applicable.

Employer’s Remedies for Employees Breach of Duty Where employee owed FD of loyalty and obedience to the employer.

o i.e. setting up a competing business, accepting bribes or kickbacks, expropriate to himself business opportunities belonging to the employer, causing other employees to leave.

Employer can get damages (based on actual losses) or restitution (based on ∆’s profits from his breach of duty).

Construction Ks o Objective = to place non-breaching party in position she would have occupied had the beach not

occurred.o Owner’s Remedies for Contractor’s Breach

Remedy will vary on the nature of the contractor’s breach 1. Incomplete Performance – when the contractor fails to complete the project.

o Remedy = Cost to the owner to complete the project + lost rentals. Breach Date Rule: Cost to complete is determined as of the date

of breach There is an upper boundary for reasonable cost but the breaching

party has the burden of showing that actual cost is unreasonable.o If the work requires that contractor be licensed, and he isn’t licensed, then

contractor cannot recover in damages or unjust enrichment. 2. Defective or Deficient Performance – failure to perform to the standards of

quality demanded by the K.o Remedy = Cost to complete

BUT – sometimes there is an issue as to whether the owner should be allowed cost to complete damages or difference in value between the work as promised and work as performed (economic loss – i.e. when cost to complete is economically inefficient.

Different Approaches:o 1. strict economic approach – o 2. limit non-economic approach to situations

where the subjective affection for the item has cultural relevance



o 3. limit non-economic recoveries, when allowed, to a sum that bears some proportionality to the actual market value loss of the item in question.

o Contractor’s Remedies for Owner’s Breach Side Note:

Substantial Performance – If the contractor has substantially performed his contractual obligations, he can recover the K price even though he has breached, less the amount required by the owner to cure the gap between substantial performance and full performance.

1. Anticipatory Breach by Owner – when the owner repudiates the K before any work has been performed

Remedy = lost profits (Expectancy interest)o K price – contractor’s cost of performing the K

2. Partial Performance By Contractors – contractor has begun performance before owner breaches

Remedy = cost already incurred + Profit – payments made 3. Change Orders = where the contractor has performed additional work for which the owner

is responsible Remedy = fair price of the additional work

o 1. actual cost methodo 2. total cost method

4. Delay in Completion Cuased by Owner – owners interference or breach of the covenant of good faith and fair dealing, may delay the contractor’s completion.

Remedy = additional costs incurred as a result of unexcused delay caused by the owner.

5. Unjust Enrichment – if the owner’s breach prevents the contractor from fully performing, the contracot may elect to recover under the theory of unjust enrichment for the reasonable value of the services and materials provided prior to the breach (quantum meruit).

Breach of K to Sell Real Property o Buyer’s Remedies:

3 remedies: 1. damages

o K price – Market Price on Date of Breach 2. specific performance 3. rescission

Majority Rule: Allowing the disappointed buyer his expectancy = K price – Market Price (At time

of breach)o + reliance damageso + consequential damages

o Seller’s Remedies: 3 remedies:

1. rescission 2. compliance with the K followed by an action for specific performance 3. retention of the land coupled with a damage action for loss of the bargain.

o K price – FMV of the property (at date of buyer’s performance was due) + prejudgment interest + consequential damages – putting property back on market

o determining market value if property has gone down in value, FMB will depend on the date

of the breach. As long as the resale occurred within a reasonable amount

of time and the conditions at the time of resale are approximate to the conditions at the time the ∆’s



performance was due, the resale price is evidence of the value of the property as of the date the ∆’s performance was required.

UCC Cover Rule – o When the seller covers within a reasonable

amount of time, the cover price establishes the damages.

Installment Land Sale Ks – seller financed real property transactionso 2 views:

1. if buyer defaults, the seller may foreclose on the security and keep both the property and prior payments

2. modern trend – condition the seller’s ability to take a forfeiture by providing the buyer with a statutory cure period.

i.e. tendering the delinquent installment.o Buyer must show that it is equitably just to be allowed to cure her default:

Punitive Damages Background

o 2 levels of analysis: 1. Common Law Test, and

jury instructions giving jury discretion in awarding punitive awards 2. BMW v. Gore – Constitutional Factors to Determined Whether Punitive Damages Award

is Appropriate considered by the judge, trial or appellate, in determining whether the exercise of

jury discretion was appropriate.o Cooper

Trial judge must review the jury’s PD award De Novo and look at all three factors in the CL Test

In appeal, the trial judge’s opinion must be reviewed De Novo on the BMW Factors and not on the CL test.

o Purpose and Scope To punish and deter –

o П must establish PD claim by clear and convincing evidence. Common Law Test: things that must be shown

o 1. reprehensibility of the conduct – malice (intent to harm or reckless disregard) socially deplorable conduct

1. fraud, or 2. acted wrongfully with an improper motive or intent (malice).

o Factors: 1. ∆’s awareness of the likelihood or certainty of harm from its

misconduct 2. profitability of the ∆’s misconduct 3. duration of the misconduct, and 4. ∆’s response when being informed of misconduct committed by

its agents or employees. Types of socially deplorable conduct:

1. fraud w/ deliberate intent to deceive 2. deliberate conduct that exposes others to the risk of physical injury 3. aidor and abettor must be legally capable of committing the misconduct for which

PD is awarded. Vicarious liability

If managerial, then vicarious liability Public Entities & Not-For-Profit Organizations

Majority – can’t get them against government entities but can against public officials Not-For-Profit – can be sued for PD awards.



o 2. actual injury Split in Jdxs:

California – need only show an injury and not damages Other Jdxs – compensatory damages must be shown

o 3. ∆ must have some wealth Split in Jdxs:

California – wants evidenceo П has burden of proof to show wealth

Constitutional Factors:o BMW v. Gore

An excessive punitive damages award can violate a ∆’s right to substantive due process. 3 factors for determining excessiveness

o 1. degree of reprehensibility of the ∆’s conduct most important indicator

o 2. ratio of PD to compensatory damages, and PD must relate to the conduct within the jdxs, and not punish with

the intent of changing the tortfeasor’s lawful conduct in other states.

o 3. difference between the PD remedy and the civil penalties authorized or imposed in similar cases.

Due Process Test:o State cannot use the acts in other states, which may be lawful in the states in

which they occurred, for the purposes of determining an appropriate PD award in the main state.

Multiple Damages Awards:o Split in Jdxs:

Some courts – can’t have both augmented and punitive damages 2 approaches:

o 1. allows the П to submit both claims to the trier of fact and claim the greater

o 2. treat the augmented damages claim as penal and bars PD claim Some courts – augmented damages are completely compensatory

Contempt – pg. 719-749 – An equitable remedy Background

o Power of a court to protect itself and its orders. Contemnor (person who acts disrespectfully toward judicial body or disobeys judicial order)

o “sui generic” – neither civil or criminal in nature. Criminal – if its primary effect is to punish Civil – if primary effect is remedial. This classification is important because:

1. it will determine whether conduct in question is subject to contempt power at all 2. the procedures to be used in adjudicating the conduct 3. sanctions to be imposed.

o It will be reviewed on appeal under abuse of discretion or de novo based on how they frame the issue. Types of Contempt

o 1. Criminal Contempt applied to conduct that is directed against the dignity and authority of the court. Criminal due process must be afforded. (treated as a crime)

o 2. Civil Contempt compel obedience to a court order or compensate the complainant for injuries resulting from

noncompliance.o Fitting the character of contempt as either criminal or civil:

1. Nature of Sanction



criminal – court imposes a fixed term of imprisonment or an unconditional fine payable to the court.

Civil – fine that compensates the complainant for injury caused by contemnor’s disobedience or indefinite imprisonment for as long as contemnor disobeys the court order.

2. Ability to Comply inability to comply constitutes a complete defense to coercive civil contempt but not

necessarily to criminal contempt in cases when the inability to comply is self-induced.

3. Initiation by the Court or Party Civil – can only be initiated by an aggrieved party. Criminal – can be initiated by:

o 1. governmento 2. court

4. Consequence of Incorrect Characterization setting aside a judgment of contempt.

o 3. Hybrid Contempt Order Blending fixed sanctions with a purge clause.

i.e. imposition of a determinant sentence or fine but that can be purged if contemnor brings himself into compliance with court order or engages in no future violations of the court order.

Summary Contempt vs. Non-Summary Contempt (For Criminal Contempt Only) o Summary – when it happens in front of the court.o Non-Summary – contempt that occurs outside the presence of the judge, and so you have to have a

hearing so that the judge can find that he is in contempt. Prima Facie Case for Civil Contempt

o 1. Contemnor must have prior knowledge of the ordero 2. Terms of the order must be clear and definiteo 3. There must be proof of non-complianceo 4. The proof of non-compliance must be by clear and convincing evidence

some jdxs – preponderance standard even in jdx requiring clear and convincing evidence, a defense like inability to comply can be

satisfied by meeting the preponderance standard. Prima Facie Case for Criminal Contempt

o First, there must be an order by the court.o 1. Contemnor must have prior knowledge of the ordero 2. Terms of the order must be clear and definiteo 3. Contempt must be willfulo 4. The proof of non-compliance must be beyond a reasonable doubt standard.

Coercive Civil Contempt (Either by Fine or Imprisonment) o Designed to secure compliance with a court order.

Essential characteristic = conditional nature Once compliance is achieved, or is no longer feasible, the need for coercive civil

contempt disappears.o “purge”

o Procedure for Obtaining Coercive Sanction If a party violates a court order, it will be necessary to have the party first adjudicated as being

in contempt of court. After being held in contempt of court, the court will then impose the conditional sanction

“comply or else”o Coercive Imprisonment

Once the contemnor brings himself into compliance, he will be freed.o Ability to Comply

The inability to comply with an order is a complete defense to civil contempt.



Court cannot order the ∆ to do what he cannot do and then punish him for failing to do it.

Burden is on ∆ to show that it is beyond his ability to comply Person is required do something even if it will require him to suffer significant lifestyle

changes.o Excessiveness

The contempt sanction must be calibrated to the seriousness of the misconduct, the damage that resulted, and the good that preventing further misconduct will generate.

o 2 types of Coercive Contempt: 1. Fine

Bagwell – any fixed, determinate sanction should be deemed criminal rather than civil. (conservative view)

Bagwell – was unique (52 million dollar fine) + detailed code of conduct (rather than an order) and when it is extensive and unique, it is criminal (liberal view)

2. Imprisonment Compensatory Contempt

o The jdxs that allow it, use it as a remedy to compensate a party for losses caused by the contumacious conduct. (Designed to provide compensation for a party who has suffered injury or loss as a result of the ∆’s violation of an order).

The contemnor’s willfulness in engaging in the conduct is a factor the court will take into account when determining the amount of compensation.

o Compensatory Damages: 1. out of pocket expenses 2. statutory damages 3. lost profits

Attorneys Fees o Many jdxs permit recovery of attorney’s fees for prosecuting a civil contempt action.

Some jdxs - require that contemnor willfully violate the order. Collateral Bar Rule/Defenses to Contempt

o Defenses: Order was issued without or in excess of, the court’s subject matter jdxs. No violation.

o Collateral Bar Rule Prohibits many non-jdx challenges to the validity of the order by one who is charged with

violating the order. Usually limited to criminal contempts.

Requires that a party comply with the order if the party wishes to challenge the validity of the order.

Walker – because ∆s violated the TRO, they could not challenge its constitutional validity.

Exceptions: 1. CBR will not be applied when the order, which was disobeyed, was transparently

invalid or had only a frivolous pretence to validity. 2. Where there is no effective procedure available to obtain judicial review of the

order before it is violated. 3. Claims that compliance would cause irreparable injury. 4. Court lacks subject matter jdx.

Jdxs to Determine Jdx Rule Court has jdx to determine whether it has jdx – and an interim order is valid, while

the court has jdx to determine jdx. Attempted Contempts

o 2 categories: Anticipatory Contempt

General Rule – a coercive sanction requires that the contemnor be in violation of the order at the time of the contempt proceeding.



Pre-Order Evasive Conduct as Contempt Contempt sanctions may be sought to address efforts undertaken by a party before an

order is issued to frustrate the implementation of the order that is ultimately entered.

Agreed Remedies – pg. 751-771 Background

o Involves all consensual efforts to control the legal regime of remedies.o In a transaction situation rather than a litigation modeo Remedies set forth in the bargain between the parties:

Key question: how much leeway does the parties have to specify between themselves what the remedy will be if there is a breach rather than going to default remedies?

Liquidated Damages o Enforceable liquidated damages provision: (3 part test) (2 part test utilize only #2 & 3)

1. did the parties intend the provision to be a penalty or an alternative measure of damages on breach? (intent)

most jdxs have dropped this requirement. 2. was it difficult at the time of K formation to determine the amount of damages that would

reasonably and probably flow from a breach? (uncertainty) 3. did the damages specified bear a reasonable relationship to the damages anticipated?

(ballparking) (reasonableness) (proportionality)o General Rule = liquidated damages provisions are valid and enforceable

Burden on breaching party to demonstrate that the provision is unenforceable as a penalty. Critical issue = reasonableness = proportionality between agreed remedy and harm

avoided.o Whether or not the amount of agreed damages is disproportionate to the

potential loss is determined as of the time the parties entered into the K. Breaching party has created an alternative remedy and therefore, rather than giving

contractual performance, breaching party will give the alternative contractual performance, in full discharge of other obligations in the K.

o Unenforceable Penalty Clause vs. Enforceable Liquidated Damages Provision: An agreed damages amount that appears arbitrary and fails to reflect any calibration with the

foreseeable types and kinds of breaches is at greater risk of being characterized as a penalty. If it is deemed unenforceable as a penalty, the non-breaching party can recover her

actual damages. If it is an enforceable liquidated damages clause, the party enjoying the benefit need

not mitigate. Penalty = designed to induce and coerce the breaching party not to breach.

o Single Look vs. Double Look Once Look – evaluate the 2 part test at the time of K formation (more protective of liquidated

damages) Twice Look – evaluate the 2 part test at the time of breach (not speculative, and so liquidated

damages clauses are put through a tighter ringer). Liquidated Damages – Compensable Damage Requirement

o Split in Jdxs: Whether the breach must inflict a loss on the non-breaching party in order to trigger a

liquidated damages provision. o Actual Injury Requirement:

Courts are split as to whether an actual injury requirement exists, and if it exists, when we talk about actual injury, does it mean injury or awardable damages?

Liquidated Damages As Exclusive or Non-Exclusive Remedy o If the liquidated damages clause is silent as to exclusivity: (split in jdxs)

Liquidated Damages as Overcompensatory or Undercompensatory o Approach this problem, as whether or not the undercompensatory liquidated damages clause is

exclusive



o Approach this problem, as whether or not the overcompensatory liquidated damages clause is penal. Specifying Injunctive Relief by K

o Courts have recently been more willing to allow equitable remedies, particularly specific performance to be the subject of consensual allocations.

Limitations on Remedies Available for Breach o Basically, if there is a breach, we are saying that we don’t owe you much.

i.e. burglar/fire alarm K – they agree to provide home monitoring, but the house catches on fire. Had they not engaged in negligence, they would have notified the fire dept and no burn down. They will have a limited remedies clause indicating $50/occurrence.

This is enforced – 2 fold reasono 1. courts have accepted that this is a situation where to hold the company

liable would require them to raise substantially the prices they charge.o 2. this is a risk that is more properly assumed by the home owner insurer.

o K for Sale of Goods (UCC) 1. seller may disclaim implied but not express warranties 2. seller may seek to limit or exclude certain remedies.

i.e. buyer will have sole recourse of returning or repairing the goods. Test to determine whether limitation of remedy is enforceable:

Whether the buyer has lost the substantial value of the bargain (deviation between product promised and product delivered)

o Other Ks Relies directly on notions of unconscionability.

As Is Clauses o In order to be enforceable:

The “As Is” clause must have been bargained for. If this is met, the general effect of the clause is to exclude all implied warranties and

to constitute a representation by the seller that the property may or may not be defective, but that if the buyer nonetheless buyers, he does so solely at his own risk.

You still can affirmatively and intentionally misrepresent. It will not relieve a party of a duty imposed by law to disclose certain facts. Negligent misrepresentation coupled with a right to inspect could be sufficient to

shift the risk of loss to the buyer.

Attorney’s Fees – pg. 773-798 American Rule vs. English Rule

o American Rule - Aka – CL Rule = each party in a civil action will pay their own attorney’s fees. + exceptions:

1. statutory authorization 2. contractual authorization 3. common fund 4. 3rd party tort 5. bad faith

o English Rule = limited shifting of the cost of representation incurred by the prevailing party to the losing party.

Exceptions to the American Rule o 1. Statutory Authorization

Statutes allow recovery of AF in 1 of 3 ways: 1. refer to the recovery of costs and a reasonable attorney’s fee

o independent and separately authorized 2. refer to the recovery of costs, including attorney’s fees.

o Appendages to costs. 3. authorize the recovery of costs and expenses, including attorney’s fees.

o 2. Contractual Authorization one-sided attorney’s fees provisions have been enforced by courts.

But some courts want it to benefit all parties.



o 3. Common Fund When a party has employed counsel and thereby created a fund which 3rd parties will benefit,

the 3rd parties should be required to assume a fair share of the attorneys fees incurred. Here the funds pay the fees and not the opposing party

2 methods to determine AF: 1. lodestar: rule of choice

o multiply the hours expended by counsel times a reasonable hourly rate. 2. %

o allocate a share of funds at 20-30%.o 4. Third Party Tort

When a person commits a wrongful act which she can reasonable foresee will require the П to prosecute or defend a lawsuit, the expenses incurred in connection with that lawsuit, including reasonable attorney’s fees, are recoverable damages.

The litigation must be compelled or required or caused by the wrongful act instead of litigation being necessitated to vindicate a legal right.

Whether the tort caused the litigation: Tort must require litigation to resolve a problem created by the tortfeasor

o i.e. car accident, and I can’t resolve my dispute, the tort caused the litigation, but the courts say that the tort caused the BI and the ∆’s expectations about what the case was worth caused the litigation, and not the underlying tort.

Most common: where someone files a claim against your property (competing claim) which can only be eradicated with an action to quiet title.

o 5. Bad Faith limited to claims against insurance companies for the wrongful refusal of benefits promised.

+ breach of FD caseso Key in all exceptions = to attain a certain status = prevailing party

Prevailing Party o Interpreted broadly:

It is not necessary that the litigation result in a judgment or settlement in the П’s favor. If the litigation served as a “catalyst” toward achieving the object of the litigation, the П may be the prevailing party for purposes of a fee award.

П must show:o 1. lawsuit was a material, significant factor in causing the ∆ to change its

conduct in the direction desired by the litigation; ando 2. the claims asserted by the П were at least colorable.

Need only obtain nominal damages.o Catalyst test:

Allowed when the attorney’s fees provisions is broad Therefore – a settlement might be enough to get attorney’s fees

o Other jdxs: Must have some court ordered relief in order to be designated a prevailing party.

Solution – settle the case and have the court retain jurisdiction to enforce the settlement, and that will provide enough court ordered relief to have a prevailing party.

Award of Fees o Calculation of Fees

Done through balancing to achieve a “reasonable” fee. Prevailing party must substantiate the fee request with documentation.

o Because not all aspects of the lawsuit will qualify for attorney’s fees recovery.

Burden then shifts to the party opposing the fees to challenge the reasonableness. Balancing Factors:

1. time and labor required to litigate (lodestar) 2. novelty and difficulty of the questions



3. skill required 4. preclusion of other employment opportunities 5. customary fee 6. fixed or contingent 7. time limitations 8. AIC 9. experience, reputation, and ability 10. undesirability of case 11. award in similar cases

o Limitation on Attorney’s Fees Awards Substantially Justified

In fee awards against the US based on the Equal Access to Justice Act, a prevailing party may recover attorney’s fees against the US unless the US shows that its litigation position was substantially justified.

Actual Damages Award as Limit on Fees Award Split in jdxs:

o Dominant view – no limit.o Retainer As Limit on Fees Award

Assumed that an attorney’s ordinary billing rate reflects the market rate. Split in jdxs: as to whether to award the actual billing or the community rate

(locality of where case is tried).o Bound by fee arrangement, ORo Calculating reasonable fees.

General Rule: dominant rule The retainer is not an upper limit on an attorney’s fees award – it does not cap the fee

award.o Pro Se Attorney Litigants

Dominant Modern Rule = deny a fees recovery in this context. Standing to Collect Fees Award

o General Rule = right to collect belongs to the party and can be waived by the party without incurring a breach of duty to the attorney.

However, once a party collects an attorney’s fees recovery, the attorney’s rights to the fees arises.


remedies outline - od

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