Remedies Bar Flashcards
(99 cards)
Order to look for remedies and what 2 main substantive topics that you might be analyzing
(1) Compensatory Damages
(2) Restitution
(3) Injunction
Contracts
Torts
Define compensatory damages for tort remedies
Compensatory damages aim to restore the injured party to the position they would have been in had the wrongful act not occurred.
4 requirements for compensatory damages in tort
what does certainty apply to and not apply to?
what does foreseeable not apply to as much?
(1) Foreseeable: Applies less to special damages (e.g., loss of business) so these must be pleaded specifically
(2) Certainty: Damages must be able to be calculated with certainty, particularly those that occurred in the past. General damages do not require as much certainty (judge can instruct jury to award as much as required for pain and suffering. For special damages, must be certain.
(3) Causation - injury requiring damages are actual result of D’s conduct
(4) Unavoidable - P must seek to reasonably mitigate
Key Sentence at end of compensatory damages in terms of how judgment given
The judgment must be a single lump sum payment discounted to present value without taking inflation into account.
rule for nominal damages
Nominal damages may be awarded where there is no actual injury but the court seeks to vindicate the plaintiff’s rights
situations in which to bring up punitives
on every exam
- contracts - not allowed
- torts - allowed
- if fraud occurs in contract - jump to tort of fraud
3 requirements for punitives
(1) Actual damages awarded
(2) Willful or wanton conduct (wanton is cruel)
(3) Ratio of compensatory to punitive damages cannot exceed a single digit ratio in order to comport with due process
Rule for Restitution
Restitution seeks to prevent the defendant’s unjust enrichment and is measured by the value of the benefit the plaintiff conferred on the defendant.
If P can get compensatory damages and restitutionary damages - what is rule?
where both compensatory damages and restitutionary damages are available, the plaintiff can recover one but not both
4 types of restitutionary remedies in tort related to unjust enrichment
(1) Replevin
(2) Ejectment
(3) Constructive Trust
(4) Equitable Lien
List the rules for replevin
Under replevin, the court will order the defendant return the property back to the plaintiff. The remedy seeks to avoid the defendant’s unjust enrichment.
The plaintiff must post a bond in the case that the court wrongfully orders replevin, so that the defendant can be compensated for the loss of use. However, the defendant can defeat this by posting a redelivery bond, that would allow the defendant to retain possession of the item until the trial.
The plaintiff may also seek damages for loss of use during the time the defendant wrongfully took the property.
In regards to defenses, there will be no recovery if the item is sold to a BFP.
define ejectment and all rules
under ejectment, the court will order a defendant to return real property to the plaintiff, for instance, one who has been ousted. the plaintiff may also seek damages for loss of use.
- Note: D must be in possession. If crosses your land each day without permission, this is not ejectment, because he is not in possession.
overall header sentence for constructive trust
A constructive trust is an equitable restitutionary remedy that is imposed by the courts where the defendant’s retention of the property would result in unjust enrichment. The court construes the property as the defendant holding it in trust for the plaintiff.
3 requirements for constructive trust
(1) D has lawful title
(2) P’s property can be traced to the specific property, to the cash proceeds from sale of the property, or to new assets the defendant buys with the proceeds
(3) Unjust enrichment
discuss title held by defendant as relates to a thief
a thief does not have lawful title to the specific property, so a CT cannot be imposed on him. in such a case, the P should seek replevin from the thief.
however, a thief does have lawful title to cash proceeds from the sale of the item, so a CT can be placed on the cash.
talk about tracing
the plaintiff can use tracing to trace the proceeds of the wrongfully taken property.
her property
This is useful when the proceeds are more valuable than the property that was wrongfully acquired.
o Example: Thief steals sword. Thief sells sword for $500 and uses the $500 to buy a watch which is worth $750. P may impose a constructive trust on the watch. He may prefer this to replevin, because the watch is worth more than the sword.
talk about when a constructive trust is useful
A CT is useful when the value of the property has increased, as the plaintiff is allowed to recover the total value.
two advantages with a CT in general
priority over unsecured creditors
can obtain increase in value of proceeds
NOTES
o Priority over unsecured creditors
When D insolvent, P can recover the property itself, and gets at the front of the line of unsecured creditors, because the P is recovering his own property to which the unsecured creditors have no claim (though secured creditors have priority over P)
o Increased value in property
If the trust res has increased in value, the P will get the advantage of that increase.
o Note: If you steal ring, use proceeds to buy a house, house goes up in value, through a CT, I can make you give me the entire house and I’ll benefit from it’s increase in value. Think of it like a watch.
o A constructive trust cannot be imposed on property that was merely improved with the plaintiff’s property or merely improved with proceeds from the plaintiff’s property, but an equitable lien can be imposed in such cases.
o Example: Thief steals sword, sells for $500 and uses $500 to improve a table that Thief already owns. P cannot impose a constructive trust, but can seek an equitable lien.
define lowest intermediate balance rule
under both a constructive trust and an equitable lien, the plaintiff is entitled to the lowest intermediate balance, unless she can show that the defendant intended the subsequent deposit be for the plaintiff’s benefit
o Where the property has been commingled with other funds and withdrawals have reduced the account’s balance below the plaintiff’s claim, the plaintiff is entitled to the next lowest intermediate balance.
o With restitution such as a constructive trust and equitable lien, the law assumes the lowest intermediate balancing rule. This means it is presumed that the defendant is taking the D’s money out first, not the money it acquired unjustly.
discuss bailor and bailee relationship
In a bailment relationship, the bailor transfers physical possession of personal property (without transferring title) to the bailee. The bailee is obligated to return the item and to exercise due care.
The bailee can be sued for negligence otherwise.
o Note: Conversion requires the general intent but leaving ring on counter is not general intent. Note as well that you can go after thief for replevin or for monetary damages through conversion.
discuss transfer from a thief to a bfp
a thief does not have title to stolen property which means a transfer to a BFP, one who took for value without notice, does also not give the BFP title.
thus P may sue the BFP for conversion
Each successive transferee of the P’s property is a converter and liable for the value of the chattel on the date of that converter’s acquisition.
Replevin is also appropriate
Note on Tort of Conversion
* A defendant in a suit for conversion cannot claim BFP because the converter does not have lawful title.
discuss choice of remedies - can p get both
If a P recovers full payment from a tort feasor (e.g., through compensatory damages in a conversion matter), she may not recover against another tortfeasor
o In diamond ring example, P can recover compensatory damages from jewelry store owner, but a better bet is to go for the constructive trust because the house which thief bought with proceeds from ring has risen in value, and she will get the house and that value.
define equitable lien and all rules
An equitable lien is an equitable restitutionary remedy where the court grants to the plaintiff a security interest in the defendant’s property. the court may order the property sold and the proceeds of the sale can go to the plaintiff up to the amount of her claim (but not for more than this amount). the court does so in order to prevent unjust enrichment
The D must hold title to the proceeds or improvements
Tracing is allowed in an equitable lien, where the P can trace proceeds of the sale of her property to improvements the defendant has made to his property.
an equitable lien is the preferred approach when the value of the property has decreased, as the plaintiff may seek a deficiency action against the defendant.
like a constructive trust, the plaintiff has priority over unsecured creditors. Also like a constructive trust, sale to a BFP - one who takes for value without notice of the facts giving rise to the EL, cuts off the rights of the plaintiff.
listen to notes on CT and EL
- Example where both CS and EQ apply
o D misappropriates money from P and uses it to buy stocks.
o The court can impose an equitable lien if wanted to obtain security for the money misappropriated.
o The court can impose a constructive trust if the plaintiff wants to claim the stock itself
o If the property had gone up in value, the CT is advantageous. If the property had gone down in value, the equitable lien is advantageous in that the P can seek to recover any deficiency (an action is not allowed after imposition of a constructive trust. - Where the misappropriated money is used not to acquire title to property, but rather to improve it, only an equitable lien is available.
o Example
D misappropriates money from P and uses it to put new roof on home. P is entitled to an equitable lien on the property. P may not obtain a CT since title to the home was not obtained by use of the misappropriated money.
* Transfer to BFP cuts off equitable lien
* Note for both CT and EL, P has priority over unsecured creditors
EXAM TIP
* On essay, analyze both constructive trust and equitable lien and use the facts to explain which better remedy and why