Remedies

Constructive Trust

A constructive trust is an equitable remedy used to prevent unjust enrichment resulting from wrongful conduct, such as fraud, undue influence, or breach of a fiduciary duty. A constructive trust is available if a defendant: (1) wrongfully acquired title to property; AND (2) the defendant would be unjustly enriched if allowed to keep the property. The court will require the defendant to hold the property as a trustee, and then return it to the plaintiff. A plaintiff may trace his property to other forms and is entitled to any increase in value to the property. However, a bona fide purchaser (BFP) is NOT subject to a constructive trust. The statute of frauds DOES NOT apply to constructive trusts; thus, oral promises may be used to establish a constructive trust.

Preliminary Injunction

A court may issue a preliminary injunction ONLY: (1) upon notice to the adverse party; AND (2) if the moving party gives security in an amount the court deems proper (which will be used to reimburse the non-moving party for any injury caused by the injunction if the moving party does not succeed on the merits). The party moving for an injunction MUST SHOW: (1) a likelihood of success on the merits; (2) a likely threat of irreparable harm to the movant; (3) balancing of the hardships in favor of the moving party (the harm alleged by the movant outweighs any harm to the non-moving party); (4) an injunction is in the public interest (if there is a public interest at issue).

Mitigation of Damages (Defense)

A plaintiff CANNOT recover damages as a result of a breach that could have been avoided. Accordingly, a party must take reasonable steps to mitigate his losses. If he fails to do so, the court will reduce the total damages by the amount that could have been avoided. Affirmative steps to avoid loss are NOT required if they involve undue risk, burden, or humiliation. Suitable Substitute: Whether an available alternative transaction is a suitable substitute depends on all the circumstances, including the similarity of performance.

Unjust Enrichment (Quasi-Contract)

A quasi-contract is a contract implied by law, and is used to prevent the unjust enrichment of the defendant. A quasi- contract will be created if: (1) the plaintiff confers a benefit upon the defendant; (2) the plaintiff had a reasonable expectation he would be compensated for the benefit; (3) the defendant requested the benefit (express or implied); AND (4) the defendant would be unjustly enriched if not forced to compensate the plaintiff. Only restitution or reliance damages may be awarded under a quasi-contract.

Equitable Lien

An equitable lien is available if a defendant: (1) wrongfully acquired title to property; AND (2) would be unjustly enriched if allowed to keep the property. The court will force the sale of the property, and the plaintiff will receive the proceeds. The plaintiff is entitled to a deficiency judgment if the proceeds are less than the value of the property at the time it was taken. A plaintiff may trace his property to other forms, but he is NOT entitled to any increase in value of the property. However, a bona fide purchaser (BFP) is NOT subject to an equitable lien.

Compensatory Damages (Torts)

Compensatory damages attempt to put the injured party in the same position it would have been in but for the injury. To recover, the damages must be: (1) caused by the defendant (actual cause); (2) foreseeable (proximate cause); (3) certain (damages cannot be too speculative); AND (4) unavoidable (the plaintiff must take reasonable steps to mitigate his losses). Actual cause exists if: "but for" the defendant's conduct, the plaintiff would not have been injured. Proximate cause exists if the plaintiff's injury was a foreseeable result of the defendant's conduct. Non-economic losses resulting from a tort (i.e. pain and suffering) are NOT subject to the same certainty rules. Additionally, future earnings are available, and are calculated based on the difference in the person's earning ability before the injury and the earning ability after the injury; it is NOT based on the person's actual past earnings.

Concealment

Concealment (an affirmative act intended to keep another from learning of a fact) is equivalent to a misrepresentation (a false statement of fact). Generally, there is no duty to disclose information, UNLESS: (a) a fiduciary relationship exists; (b) it is necessary to correct an earlier mistake; (c) active concealment of a material fact occurs; OR (d) a person is selling real property and knows material facts that affect the value of the property (that the buyer is unaware of and cannot reasonably discover).

Consequential Damages (Contract)

Consequential damages arise indirectly from the breach, and are awarded because of the injured party's special circumstances (e.g. lost profits). • To recover, the damages MUST be: (1) reasonably foreseeable at the time of contract formation; (2) arise from the plaintiff's special circumstances that the defendant knew or had reason to know of; AND (3) reasonably certain (the damages cannot be speculative). • An award of damages must account for and deduct for any costs the injured party avoided because of the breach. • Consequential damages MAY be limited or excluded by agreement unless the limitation/exclusion is unconscionable.

Damages for Fraud

Damages for fraud or deceit are either: (a) the actual losses suffered - the difference in actual value at the time of the transaction between what the plaintiff gave and what he received; OR (b) the benefit-of-the-bargain - difference in value between what the plaintiff actually received and what he was fraudulently led to believe he would receive.

Ejectment

Ejectment allows the recovery of specific real property, and is available if: (1) the defendant has actual possession of the property; (2) the defendant is wrongfully withholding the property; AND (3) the plaintiff has a right to possess the property.

Damages in Contracts for the Sale of Land

For a breach of contract concerning the sale of land, the buyer may recover: (1) any amount paid; (2) the difference between the fair market value of the land at the time of the breach and the contract price; (3) expenses incurred in investigating title and preparing necessary paperwork; (4) expenses incurred in preparing to occupy the land; (5) possible consequential damages; AND (6) interest. The seller normally recovers the "earnest money" deposit as liquidated damages for breach of a land sale contract.

Damages for Trespass to Chattels

In an action for trespass to chattels, the damages awarded are the actual damages suffered, which may include the cost of repairs.

Damages for Trespass to Land

In an action for trespass to land, damages are measured by either: (a) the diminution in value of the property; OR (b) the cost to repair the property.

Incidental Damages (Contract)

Incidental damages are the reasonable costs incurred as a result of a breach of contract (i.e. costs of returning non- conforming goods or caring/storing non-conforming goods).

Intentional Misrepresentation

Intentional Misrepresentation: To state a prima facie case for intentional misrepresentation, a plaintiff must show: (1) misrepresentation of a material fact by the defendant; (2) the defendant knew that the statement was false (scienter); (3) intent of the defendant to induce the plaintiff; (4) actual and reasonable reliance by the plaintiff; AND (5) damages.

Liquidated Damages (Contract)

Liquidated damages will be enforced if: (1) the amount of damages is difficult to estimate at the time the contract was formed; AND (2) the amount is reasonable to the actual damages suffered. Cannot be a penalty. If the liquidated damages clause is valid, then only that amount is valid. If invalid, then actual damages are available.

Negligent Misrepresentation

Negligent Misrepresentation: To state a prima facie case for negligent misrepresentation, a plaintiff must show: (1) a misrepresentation (false statement of a material fact) by the defendant; (2) supplied for the guidance of others in a business transaction; (3) the defendant knew or should have known that the information was supplied to guide the plaintiff in his business transactions; (4) the defendant was negligent in obtaining or communicating the false information; (5) actual and reasonable reliance by the plaintiff, AND (6) the false information proximately caused plaintiff's damages.

Nominal Damages (Torts)

Nominal damages are available when the plaintiff has NOT suffered an actual injury, but still wants to establish his rights. Nominal damages are not available where either damages or actual injury is an element to a cause of action.

Permanent Injunction

Permanent injunction is issued after a full trial on the merits, and requires the following: (1) inadequate legal remedies (harm cannot be compensated by money damages); (2) a protectable personal or property interest (historically, this could only be a property interest, but now, any personal or property interest is sufficient); (3) feasibility of enforcement (not a concern with negative injunctions, but potentially with mandatory injunctions); (4) a balancing of hardships to both parties (balance the benefit to the plaintiff versus the hardship to the defendant); AND (5) there are no valid equitable defenses.

Punitive Damages (Torts)

Punitive damages are awarded to punish the defendant, and are available if: (1) the plaintiff was awarded actual damages (expectation or nominal damages); (2) the punitive damages are proportional to the actual damages; AND (3) the defendant's conduct was willful, malicious, or egregious (must be more than just negligent).

Reformation (Contract, Equitable)

Reformation allows a contract to be changed to conform to the parties' original intent. It is available if a valid contract exists, but there was a misrepresentation OR mutual mistake of a material fact (a unilateral mistake is sufficient if the non-mistaken party had reason to know of the mistake). A contract will NOT be reformed if a valid equitable defense applies (i.e. unclean hands, laches). Parol evidence is admissible to prove the misrepresentation or mistake.

Reliance Damages (Contract)

Reliance damages are generally the expenditures made by a party in reliance of a contract, and are an attempt to put the non-breaching party in the position it would have been if the contract never existed. Reliance damages are available when: (1) a plaintiff acted in reliance on the defendant's agreement to perform under a contract; AND (2) the plaintiff's reliance was foreseeable. If expectation damages are too speculative, the court may award reliance damages instead.

Replevin

Replevin allows the recovery of specific personal property, and is available if (1) the defendant is wrongfully withholding personal property, (2) that the plaintiff has a right to possess. A plaintiff may recover the property before trial if: (1) there is a preliminary judicial hearing; AND (2) the plaintiff posts bond.

Rescission (Contract, Equitable)

Rescission treats the original contract as cancelled. It is available if there was a problem with the formation of the contract (i.e. a defense to formation, fraud, misrepresentation). A plaintiff may sue for both damages and rescission at the same time (but an election of remedies may bar rescission if damages are sought first). A contract will NOT be rescinded if: (a) a valid equitable defense applies; OR (b) the plaintiff sued for damages under the contract in a prior action.

Restitution Damages (Contract)

Restitution (also referred to as unjust enrichment or quantum meruit) is awarded to prevent unjust enrichment, and is available when one party confers a benefit onto another party (even if there is no enforceable contract). Damages will be awarded based on the value of the benefit conferred upon the defendant. A party CANNOT recover both expectation and restitution damages.

Restitution Damages (Torts)

Restitution (also referred to as unjust enrichment) is awarded to prevent unjust enrichment, and is available when one party confers a benefit onto another party. Damages will be awarded based on the value of the benefit conferred upon the defendant.

Specific Performance (Contract, Equitable)

Specific performance is an available remedy when: (1) a valid contract exists with clear and definite terms; (2) the plaintiff has performed under the contract or is ready, willing, and able to perform; (3) legal remedies are inadequate (i.e. rare/unique item, contracts involving the sale of land, as legal remedies are inadequate because land is unique); (4) enforcement is feasible for the court (it is NOT feasible to enforce personal service contracts or where land/person is outside the court's jurisdiction); AND (5) no valid equitable or contractual defenses exist. Under the common law doctrine of mutuality, both parties must have been able to request specific performance. However, in many jurisdictions the requirement for mutuality is met if one party can sufficiently assure performance.

Equitable Remedies - Torts

TRO; Preliminary Injunction; Permanent Injunction

Temporary Restraining Orders

Temporary Restraining Order (TRO) is an emergency remedy used to maintain the status quo pending the outcome of a hearing or application (usually a preliminary injunction application), and is only available when the plaintiff will suffer immediate and irreparable harm. A TRO can be issued ex parte (without notice to an adverse party). o The court may issue an ex parte TRO only if the moving party: (1) provides specific facts in sworn statement that clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; (2) certifies in writing any efforts made to give notice to the adverse party and why notice should not be required; AND (3) gives security in an amount that the court deems proper (in Fed. Court, the United States, its officers, and its agencies are not required to give security). Expiration: Fed Court = 14 days x 2; CA = hearing set 15 days or 22 with good cause

Laches

The defense of laches bars a plaintiff's recovery when: (1) there is an unreasonable delay between when the plaintiff learned of the injury/breach and when the action was brought; AND (2) the defendant is prejudiced by the delay.

Unclean Hands

The doctrine of unclean hands bars a plaintiff's recovery when a plaintiff is guilty of unethical, unlawful, or otherwise improper conduct related to the subject of the lawsuit.

Torts: Available Legal Remedies

The following damages are available in tort actions: (1) compensatory damages; (2) consequential damages; (3) nominal damages; (4) punitive damages; AND (5) restitution damages.

Contracts: Available Legal Remedies

The following legal remedies are available for contract breaches: (1) expectation damages (compensatory damages); (2) reliance damages; (3) consequential damages; (4) incidental damages; AND (5) restitution damages. Punitive damages are generally NOT available in a breach of contract action, but may be awarded in a contract action involving corresponding tort claims that allow such damages (i.e. fraud).

Expectation Damages (Contract)

The general measure of damages for a breach of contract are expectation damages. Expectation damages arise directly from the breach, and are an attempt to put the non-breaching party in the same position it would have been in but for the breach. To recover, the damages must be: (1) caused by the defendant (actual cause); (2) foreseeable (proximate cause); (3) certain (damages cannot be speculative); AND (4) unavoidable (the plaintiff must take reasonable steps to mitigate his losses). An award of damages must account and deduct for any costs the injured party avoided because of the breach.

UCC Buyer's Remedies & Damages

Under the UCC, a buyer who (a) never received the goods - the seller repudiates or fails to make delivery, (b) rightfully rejected non-conforming goods, OR (c) justifiably revoked acceptance of the goods MAY: (1) cancel the contract; (2) recover any amount paid (a refund) - even if buyer doesn't cancel the contract; (3) recover either Cover Damages or Market Damages; AND (4) recover Incidental and Consequential damages. If the buyer keeps the non-conforming goods, then the buyer is entitled to Loss-in-Value Damages - measured by the difference between the value as promised and the value of the non-conforming goods. Cover Damages are the difference between the contract price and the price of substitute goods. This is used as the measure of damages if the buyer covered in good faith. Market Damages are used if the buyer did not cover in good faith or did not cover at all, and are the difference between the market price (at the time when buyer learned of the breach) and the contract price. Market price is determined as of (a) the place for tender, or (b) the place of arrival in cases of rejection after arrival or revocation of acceptance.

Damages for Conversion of Property

When a plaintiff has suffered a conversion, he may recover either: (a) possession of the property; OR (b) the fair market value of the property at the time of conversion. A plaintiff may also receive reasonable compensation for time spent trying to recover the property.