Remedies

*Negligence* (injury to or destruction of personal property) *General Damages* Destruction/Total Loss

*Destruction/Total Loss = Cost to Repair/ Diminution in Value inapplicable* i. Look to the market to which the P would turn to replace that chattel ii. If used goods = P will either get thrift store value or new replacement value depreciated for the use/time P had the prior item iii. NOTE: No loss of use damages available, Unless: 1. If you cannot replace immediately, get loss of use for the reasonable period of time necessary to replace.

*Negligence* (injury to or destruction of personal property) *Non-Pecuniary Damages*

*Sentimental Value* = Can only recover when sentimental value is the primary value of the asset i. Look to the market that P would normally turn to in order to reasonably replace the chattel. If there's no monetary value, then its primary value is sentimental.

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *General Damages* Sale of Goods

*Step 1.* Identify buyer's loss in value -translate into dollars use *i. Real Substitute Transaction* - amount P had to pay to get the replacement. If did not pay for replacement, then → *ii. Hypothetical Substitute Transaction* - buyer must put on evidence of fair market value. iii. Fix the damages on the date of the breach

Equity *Interlocutory Relief* 1. Permanent Injunction 2. Temporary Retraining Order

i. Permanent Injunction -injunction issued at end of case ii. Temporary Restraining Orders (TROs) - an injunction issued between the time the suit is filed and the preliminary hearing. 1. Plaintiff must show threat of irreparable harm; and 2. Threat is immediate.

Restitution in Transactions *Grounds for Rescission* *Intentional Misrep*

(deceit) a. State of mind of party seeking rescission is mistake b. Reliance in fact by party seeking rescission c. Lack of injury irrelevant i. Normally without injury, no right to rescind, BUT ii. Anyone who is fraudulently induced to enter into a contract is "injured"

Restitution in Transactions *Grounds for Rescission* *Unintentional Misrep*

(no deceit) a. State of mind of party seeking rescission is mistake b. Reliance in fact by party seeking rescission c. Materiality - i. More than trivial departure from the truth; and ii. Important to a reasonable person in deciding to enter into K. d. Pecuniary Harm - monetary injury

Contempt *Civil vs. Criminal Contempt*

*1. Civil contempt:* a. Must be clear and convincing proof of non-compliance with the order; AND b. The party sought to be held in contempt has not attempted to comply in a reasonably diligent manner. *2. Criminal contempt:* a. Shown by proof beyond a reasonable doubt that the alleged contender willfully violated the court's order. i. NOTE: If held in criminal contempt, certain criminal due process requirements must be complied with. (i.e. right to jury trial). *3. Rules to distinguish between civil or criminal contempt:* a. If sanction imposed is compensatory or coercive, it is civil. b. If neither, then it is criminal. c. It is also criminal if the purpose of the contempt sanction was to punish the contender or to vindicate the courts authority, it indicates criminal as opposed to civil.

Unjust Enrichment *Equitable Remedies* Constructive Trust

*1. Elements* a. D enriched at P's expense b. Would be unjust for D to retain enrichment c. Enrichment is traced into an asset in which the D has title d. D obtained title to that asset through or by the use of the unjust gain *2. Remedy* a. Constructive trust that is imposed on the asset into which the unjust gain was transferred b. D ordered through constructive trust decree to transfer whatever the current embodiment is to P. c. Can be obtained against non-BFP transferees of the res d. Can be obtained against substitute res

Unjust Enrichment *Equitable Remedies* Equitable Lien

*1. Elements* a. D enriched at P's expense b. Would be unjust for D to retain the enrichment c. Enrichment traced into asset to which D has title *2. Remedy* a. $ judgment secured by lien against embodiment of unjust enrichment b. Can be obtained against non-BFP transferees of the res c. Can be obtained against substitute res

Unjust Enrichment *Equitable Remedies* Equitable Subrogation

*1. Elements* a. Defendant enriched at plaintiff's expense b. Would be unjust for defendant to retain the enrichment. c. Enrichment traced into payment of defendant's debt *2. Remedy* a. Plaintiff is subrogated to position of defendant's creditor *3. Inadequacy of Legal Remedy* a. Must prove the equitable remedy is better.

Unjust Enrichment *Remedy at Law* Measuring Defendant's Benefit

*1. Enriched by receipt of money* - Measured by the amount of money defendant received at plaintiff's expense. *2. Enriched by receipt of goods* - Highest measure of either: a. Market value of the goods themselves or b. Amount of money received when goods are sold. *3. Enriched by receipt of land* - Market value of the land. *4. Enriched by receipt of services* - Actual value of the work performed, less the amount of compensation already received.

Unjust Enrichment *Equitable Remedies* Tracing through Commingled Account

*1. First In First Out* - a. If multiple P's funds are commingled into the same account, Courts use FIFO *2. Hallett* - Defendant withdraws own funds first without regard to deposits *3. Oatway Rule* - P's choice of which withdrawals to treat as P's funds. Limited by what funds of P's went into account. *4. Restatement Rule* - pro rata allocation of each withdrawal from the commingled account *5. Lowest Intermediate Balance Rule* - D's deposit into a commingled account does not replenish P's funds.

Unjust Enrichment *Remedy at Law* Quasi-Contracts

*1. It is not an equitable action; it is an action at law.* a. Subject to constitutional right to jury trial b. Prevailing P awarded money judgment *2. Recovery is not called "damages", it is called "restitution"* 3. Contract implied in law 4. NOT a contract implied in fact *5. Multiple ways to plead* *a. Traditionally:* Common counts - i. Money paid and received - D has money, which in good conscience belongs to P because of duress, fraud, mistake or another reason. ii. Goods sold and delivered or quantum valebant (worth of goods) iii. Quantum meruit - P has performed services, which will enrich the D unjustly unless the D pays him. *b. Modernly:* Specific restitution i. Replevin - D returns the P's exact chattel ii. Ejectment - D returns the P's real property

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *General Damages* Sale of Real Property

*1. Majority Rule* - Loss in value is the measure of shortcoming of D's performance. a. If D breached by failing to deliver real estate, the loss is the value of the property. (Market value NOT lost profits) b. Cost avoided is the relief from having to pay the K or whatever part of the K price the buyer had not yet paid. *2. Minority Rule* - The P, a buyer of real property, can only recover his out of pocket expenses against the breaching seller. a. Only to real estate transactions b. Only where breaching party is seller c. Only where seller's breach is in good faith i. If the reason the seller doesn't go through is because he found a better buyer we'd go back to the majority rule ii. Rule was created to protect the good faith efforts

Equitable Defenses *Laches*

*1. Must be an inexcusable delay* *2. As a result of that delay, there is prejudice to the other party.* a. Prejudice to defend b. Reliance: bc the P didn't bring the action, the D has now done things that he or she wouldn't have otherwise have done had they known the P was going to pursue the equitable claim. *Laches & SOL* a. An equitable action could be barred by laches but the legal claim would not be barred by the SOL. i. If the SOL on the corresponding legal COA has already run, it gives rise to a rebuttable presumption that either the unreasonable delay component of laches has occurred or that the prejudice component of laches has occurred. b. NOTE: legislature could pass a law that gives a SOL for an equitable claim. Laches would not govern here.

Equity

*1. No adequate legal remedy for P* a. Criminal Prosecution may be enjoined: i. If there's a transparently void statute that'd impede First Amendment rights ii. If the state is abusing its police power in continually prosecuting for the same offense where vindication does not immunize you iii. If you can defend the action then there is an adequate legal remedy. *2. An effective decree can be created.* a. Court can order the D to do so something that will fix or at least alleviate the situation in which the P is left as a result of D's conduct. *3. The decree would be enforceable.* a. Authorizing statutes such as public nuisance. b. Defamation may be enjoined where the trial has a chance to rule on whether it's defamation before the injunction is issued.

Types of Damages *Pecuniary (actual) damages*

*1. Pain and suffering* - past, present & future a. Burden is on P to show the pain & suffering caused by the injury b. P must be aware of the pain & suffering - requires consciousness. *2. Mental anguish* Step 1. Plain meaning of the text - plain and unambiguous. Step 2. Language of the entire statute, its structure, and purpose. Step 3. Legislative history or similar statutes. *3. P's Lost Earning Capacity* a. P must show that it is reasonably probable that the lost economic advantage would have been realized but for the D's interference i. Proof of an actual loss of earnings or wages is not essential b. Must discount to present value of future lost income c. Based upon such factors as the P's age, life expectancy, health, habits, occupation, talents, skill, experience, training & industry.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Mistake*

*1. Performance in the Mistaken Belief that K Exists* a. Since there is no K, there is no rescission. b. Remedy: restitution. i. Usually by quasi-contractual recovery/substitution/money *2. Mistaken Over-Performance* a. Can occur through i. Doing more than contract called for; OR ii. Performing before obligated to perform. b. Is not a mistake if party performs knowing they might not have to perform. c. Remedy: restitution.

Breach of Employment Agreements *Employee's Remedies* (ER breach) Restitution for Material Breach

*1. Quantum Meruit* - allows a promisee to recover the value of services he gave to D. a. Good option for contracts where a party is losing money. b. Reasonable value for services is measured from the time and place where the services were rendered. 2. Employee or service-provider may breach K & recover restitution from employer for services already provided. a. Subtract $$ for work not completed (mitigated damages) or D has right to sue for overpayment

Breach of Employment Agreements *Employer's Remedies* (EE breach) Equitable Relief

*1. Specific performance* = unavailable b/c Constitution prohibits involuntary servitude *2. Injunctions* = Injunctive enforcement of negative covenants within employment contract (ex: pro football player promising not to play for another professional team during the term of the contract) a. Requirements include: i. Covenant in writing. Negative covenants cannot be implied. ii. Employee services are of special merit and of particular and peculiar value to employer. iii. Damages for covenant breach is difficult to assess. iv. Reasonableness of covenant's terms. v. Will take employee back & allow them to perform under K. vi. Any statutory requirements.

Breach of Contract Remedies *Sales Contract - Seller's Remedies* *General Damages* Sale of Goods

*1. Step 1.* P/seller's loss in value will be the unpaid balance of the contract price *2. Step 2.* Subtract cost avoided a. If seller fully performed (buyer retains goods w/o $), cost avoided is $0 b. If seller "resells," price at which goods were resold c. If seller doesn't "resell," cost avoided is market value of goods retained d. If "reselling" would not be a substitute transaction because seller is LVD (Loss Volume Dealer), cost avoided is cost to procure/produce i. The seller would have made the sale whether or not the breach occurred; and ii. It would have been profitable to do so. e. If specifically manufactured goods: i. $0 if seller has already manufactured or procured the goods ii. Cost to procure/manufacture if seller has not

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *Consequential Damages* Cont.

*2. Lost Secondary Profits* - sales of other products suffered as a result of the breach. a. When a primary product does not conform to the warranty, it is foreseeable that there will be a loss of secondary products. b. Plaintiff must show that without primary product, business would be severely incapacitated. *3. Loss of Prospective Profits/Good Will* - the reputation that businesses have built over the course of time that is reflected by the return of customers to purchase goods and the attendant profits. a. Must provide sufficient evidence: i. To establish that such profits were causally related to a breach of warranty and ii. To provide the trier of fact with a reasonable basis from which to calculate damages.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Mistake*- Cont.

*3. Mistake in Integration - mistake in reducing K to writing* a. Burden is on party asserting mistake to show: i. At time of writing ii. Both parties mistakenly believed iii. The writing accurately reflected their agreement. b. Remedy: Reformation of K to correctly reflect terms of agreement *4. Mistake in Assumptions at Time of Formation* a. Requirements: i. Mutual mistake ii. Material mistake iii. Heart of the bargain iv. Remedy: Restitution--Each party gets restored 1. If both parties at fault: Buyer is entitled only to the value of the improvements, not their cost. 2. If one party at fault: Buyer would get cost of improvements.

Limiting Damages in Tort & Contract *Torts & Contracts*

*Contracts* *i. Who Can Recover:* 1. Parties to the Contract 2. Assignees of parties to the contract 3. Intended Third Party Beneficiaries *ii. Contracts requires foreseeability for a particular loss* 1. Loss must be foreseeable as a probable consequence as a result of breach at the time the contract was formed. (Hadley) a. Lost Profits i. Court holds there must be a privity of contract or an injury to person or property for recovery. ii. Exception: Special Relationship 1. Foreseeability of the injury; and 2. A nexus between the D's conduct and P's injury. *Torts* *i. Who Can Recover:* 1. For negligence, the plaintiff must be foreseeable (Palsgraf)

*Negligence* (injury to or destruction of personal property) *General Damages* Cost to Repair

*Cost to Repair= default measure* i. If repairs are both physically & economically feasible, then the reasonable cost of repairs is the measure. Unless: 1. If repair cost is more than the value of the property = recovery is limited to value of the property. 2. D has burden to show value of the property is less than the repair cost.

*Negligence* (injury to or destruction of personal property) *General Damages* Diminution in Value

*Diminution in Value = If cost to repair is substantially more than pre-injury market value, then use diminution in value.* Unless: i. There is a personal reason to the plaintiff for repairing the property, like it's a home; or ii. There is otherwise good reason to believe the plaintiff will actually have the property repaired.

Restitution in Transactions *Election of Remedies*

*Disqualifying the aggrieved party from rescission: (not allowed to rescind)* 1. Failure to give timely notice 2. Evidence of aggrieved party's intent to affirm 3. Exercising acts of ownership over things received in the bargain 4. Impossibility of restoring the pre-contract status quo 5. Filing suit, seeking remedy only consistent with affirmance without also seeking remedy based on disaffirmance. *May be bound to disaffirm contract* 1. There is a K to rescind the underlying K 2. Notice of rescission has been foreseeably and detrimentally relied on by the other party (promissory estoppel) 3. Party now wanting relief consistent with affirmance was a party to litigation in which the K's rescission was recognized (res judicata) *NOTE:* Existing K's may define remedy within K itself. If so, you are limited to that recovery.

Real Property Torts *Ejectment* *Injunction*

*Ejectment (legal)*: settles ownership & removes defendant + mesne profits 1. Mesne profits: The profits of an estate received by a tenant in wrongful possession between two dates. 2. Means: Writ to sheriff who physically removes D from the property *Injunction (equitable)*: typically used against encroachments & nuisance 1. Encroachment exists where part of a structure owned by D crosses P's property line 2. Nuisance is where D is enjoying his property in a way that interferes with P's use of their property

Equity *1. Equitable Clean-Up* *2. Flexibility & Discretion*

*Equitable Clean-Up* i. When the basic relief sought in a case is equitable, the judge can still award damages in the exercise of his equity powers without calling in a jury under the clean up doctrine of equity. *Flexibility & Discretion* i. Chancellor's Discretion - So long as it is capable of being done and the court can enforce the decree against the person against who equity is sought, and P would otherwise have no adequate remedy, the court can impose an adequate equitable remedy. 1. NOTE: Equity takes into consideration rights of unrepresented third parties.

Breach of Employment Agreements *Employee's Remedies* (ER breach)

*Equitable Relief* 1. Traditional rule = no specific performance 2. Modern trend = Under civil rights actions, Ct. may order employee to be reinstated *Employee's Damages* = loss in value minus cost avoided 1. Loss in Value = wage employee would have received over the balance of the term of the employment K plus any fringe benefits 2. Cost Avoided = pay received from another job a. Not required to take another job that is: i. Substantially different from; or ii. Inferior to the job discharged from. a. If another job is taken then those wages are subtracted as cost avoided. b. If no job is taken there is split authority on duration i. Discharged employee may only recover for time period up to trial ii. Up to trier of fact to determine, based on best guess.

Breach of Contract Remedies *General Damages*

*Goal:* Put P in the position she would have been in if both parties had fully performed *Rule:* To compensate P for injury (if any) that naturally & necessarily flows from the breach 1. This is the loss of the contracted-for-deal itself and therefore does not include any harm that depends on the P's own particular circumstances (e.g., any plans s/he had for use of the performance that was to have been received from D).

Breach of Contract Remedies *Sales Contract - Seller's Remedies* *General Damages* Sale of Real Property

*Goal:* restore plaintiff to status quo *1. Step 1.* P/seller's loss in value will be the unpaid balance of the contract price *2. Step 2.* Subtract cost avoided a. If seller fully performed (transfer of title) cost avoided is $0 b. If seller partially performed (no transfer of title) the cost avoided is: i. The fair market value of the property seller still has title to ii. Measured at the time the seller learns of the breach iii. Can also include additional expenses including: 1. Property tax 2. Upkeep 3. Maintenance

Real Property Torts *Trespass to Land* Ongoing Trespass & Nuisance *Equitable Remedy*

*Injunction:* 1. Must establish inadequacy of legal remedy in order to get injunction a. Permanent: Basically a forced sale & bc land is unique, damages is inadequate b. Temporary: Multiplicity of suit is inadequate remedy

*Conversion-Trover* (taking of personal property) *Alternative to Damages*

*Legal Remedy:* *i. Replevin:* (return of property) 1. A subsequent purchaser of stolen property is still liable for replevin. 2. Exception: *a. Doctrine of Excession:* Allows a subsequent purchaser of stolen property to acquire good title. i. A bona-fide purchaser (BFP) acquires the stolen property at value; AND ii. That BFP, through his own expenditures, changes the stolen property into something substantially different. iii. At that point they have title & can pass title to others. ii. Detention Damages: 1. Damages to compensate P for loss of use of property *Equitable Remedy:* *i. Injunction:* (prevent D from selling property before replevin suit) 1. If stolen property not in thief's possession, barred from equitable remedies.

Real Property Torts *Trespass to Land*

*Legal Remedy:* does not restore possession; does prevent adverse possession *1. Cost to Repair/Diminution in Value; OR* a. Nominal damages if land is not damaged/no repair costs *2. Restitution* *a. Unjust Enrichment* i. Measure of Value: 1. Difference in value of not trespassing vs. value saved by trespass; OR 2. Reasonable rental value. *b. Loss of Use* i. Where D uses P's land to carry on profit making activities, without permission, P is entitled to recover a reasonable rent.

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *Consequential Damages* Loss Profits - New Business Rule

*New Business Rule* - Traditionally, absence of a track record precludes recovery for lost profits. However, courts are shifting away from this rule. 1. Instead apply certainty requirements: a. More likely than not injury happened b. Burden on P to provide trier of fact a basis to put a dollar value on the injury.

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *Consequential Damages*

*Other damages which naturally & proximately flow from the breach*, including: *1. Lost Primary Profits* - the difference between (1) what the buyer would have earned from reselling the goods in question had there been no breach & (2) what was earned after the breach occurred. *a. Primary Product* - an item upon which the aggrieved party relies for a substantial amount of its revenue. *b. Timing* - Profits lost during the period of time in which the seller supplies nonconforming goods constitute lost primary profits. *c. Issue of Certainty* - you don't need absolute certainty, just need to show more likely than not lost profits are attributable to defective product.

*Negligence* (injury to or destruction of personal property) *Special Damages* Loss of Use

*P is entitled to compensation for loss of use of property damaged by the D (time item is being repaired)* a. The value can be taken from replacement cost, i.e. rental fee, cost of substitute housing, etc. *b. Commercial Entity* = When profit bearing property is damaged i. Assumption that opportunity losses satisfy loss causation & thus commercial entity is entitled to some loss of use damages. ii. Commercial entity does not need to prove actual opportunity was lost. *iii. Credit for Benefit* = D can get credit for money saved by P by using the replacement property.

Equity *Interlocutory Relief* Preliminary Injunctions

*Preliminary Injunctions* - court acts to enjoin an act to preserve ability to obtain meaningful relief once a final judgment is reached. *1. Requirements:* a. Likelihood of success on the merits i. Must have substantial likelihood of success. b. Substantial threat of irreparable harm c. Threatened harm to plaintiff outweighs harm to defendant caused by an injunction d. Granting the injunction would not disserve the public interest *2. P's Bond Requirement:* a. Provides a fund against which a prevailing D can be compensated for the harm suffered as a result of the preliminary injunction. b. Sometimes the amount of the bond is so crushing that even though the plaintiff is otherwise entitled to injunction don't get it because they don't have the finances to post the bond.

*Conversion-Trover* (taking of personal property) *Suit for Use of Stolen Property*

*Restitution:* i. Restitution is a legal remedy in a quasi-contract action based on unjust enrichment. ii. P claims D was enriched by the use of the stolen property and can therefore recover restitution, even though other remedies were available. 1. NOTE: Policy implications of D's intent. Olwell was bad guy so Court was willing to hold him accountable for each day's rental value, whereas Welk was negligent so Court was only willing to hold her accountable for her actual use of the videos (1 day).

Real Property Torts *Trespass to Land* Ongoing Trespass & Nuisance *Legal Remedy*

*Step 1:* Determine whether it is temporary or permanent 1. Would the injunction be denied on public policy grounds? a. Yes: Permanent (Ex: Sewage treatment plant: Necessary, although stinky, not going anywhere) b. No: Temporary (Ex: Physically permanent? High rise vs. tent) 2. If still up in the air, up to P whether temporary or permanent a. Why temporary? Treated as a new nuisance claim everyday. Repeated & continuing filing. b. Why permanent? Get one shot at it, from date nuisance began, but size of reward may be larger *Step 2:* Determine damages 1. Temporary: Only entitled to diminution in value for period of time covered by the suit 2. Permanent: Enough to compensate P for the fact P is going to lose enjoyment of property; The drop in fair market value of P's estate

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *General Damages* Sale of Goods *Perfect Tender Rule*

*a buyer of goods has the right to reject a less than perfect tender.* a. If the buyer rejects & seller doesn't cure defect = Do not have to pay K price b. If buyer accepts defective goods = Must pay K price, but may recover for injury caused by defect. i. General damages are the actual difference in value between the goods as promised and the goods as received.

Types of Damages *Punitive Damages* How much??

*a. Reprehensibility of the D's conduct;* i. The more reprehensible, the more severe the punishment 1. Has the D engaged in this conduct before? 2. Ill will towards P that led to D acting the way they did? *b. D's wealth;* i. Someone who doesn't have much money doesn't need to be relieved of much money to feel punished. ii. In CA: P must establish D's wealth. Cannot be used to justify an excessive award of punitive damages. *c. Constitutional Limit: Ratio.* i. Ratio should be less than 10 times the amount of compensatory damages bc 10x or more is presumed to be a violation of Ds due process for severity of penalty. ii. Due process entitles a defendant to notice of (1) conduct subject to punishment and (2) severity of penalty. iii. If the compensatory damages are higher a 1:1 ratio should be applied, when compensatory damages are lower, then a higher ration can be applied.

*Conversion-Trover* (taking of personal property) *Suit for Value of Stolen Property*

*a. Rule:* When there is a conversion of personal property damages act as a forced sale (thief forced to pay value and then owns the chattel). b. A subsequent purchaser of stolen property is still liable for conversion. *Measure of damages: split authority* *1. New York Rule (majority)* - the highest market value within a reasonable time after the owner discovers the conversion. a. Factors in determining Reasonableness of time: i. Market fluctuations, the more fluctuation, the shorter the time ii. Time needed to buy a substitution *2. Indiana Rule* - highest market value between the date of the taking and a reasonable time after discovery of the taking. *3. New Jersey Rule* - highest market value between date of the taking and date of judgment in the case.

Breach of Contract Remedies *General Damages* 2 Steps

*a. Step 1.* D must pay for any loss P experiences as a result of the shortcoming in D's performance (P's "loss in value"), i. Value to P of D's full promised performance 1. Minus (-) ii. The value to P of D's actual performance *b. Step 2.* D gets credit for any savings P experiences if D's breach has the effect of relieving P of any part of D's duty to perform (P's "cost avoided") i. Cost to P of P's full promised performance 1. Minus (-) ii. Cost to P of the part of P's promised performance that was not discharged by D's breach

*Conversion-Trover* (taking of personal property) *Suit for Value of Stolen Property* (cont.)

*c. Enhanced Value:* i. If willful converter (not innocent 3rd party/receiver of stolen property) enhances the value of the stolen property, P can recover the enhanced value of the item. *d. Punitive/Double/Treble Damages:* i. Depends on intent of legislature when they created the conversion statute 1. If intent was to punish, CANNOT ALSO GET PUNITIVES 2. If intent was not to punish, GET PUNITIVES a. Know intent from language of statute b. If the statute requires mens rea, shows it is to punish 3. If no language or mens rea showing intent to punish, you get punitive damages on top of that

Equity *Traditional Maxims*

*i. Equity may act only when there is no adequate remedy at law.* 1. While no longer strictly applied courts still look for this as part of P's case. *ii. Equity acts in personam.* The judgment is upon the person and not the property. Court is ordering person to act. 1. Full Faith & Credit - each state is required to give full faith and credit to the laws of every state. Interpreted to include judgment rulings in legal actions. As of the last 2 decades also includes equitable judgments. a. Can enjoin D's of different states. b. Can enjoin D's of different countries. *iii. Equity cannot protect personal, political, or religious rights.* 1. Now only applies to religious rights 2. Courts routinely apply equitable relief to protect significant personal rights

Limitations on Damages *1. Joint Tortfeasor Credit Rule* *2. Credit for Benefit* *3. Enhancement & Adjustments*

*i. Joint Tortfeasor Credit Rule* 1. In cases of jointly and severally liability, each tortfeasor gets credit (their liability reduced) by payments made by other tortfeasors *ii. Credit for Benefit* 1. D gets credit for benefits directly received by the plaintiff as a result of defendant's misconduct *iii. Enhancement and Adjustments* 1. Prejudgment Interest = Period of time between the date of injury and the date of judgment. Amount must be liquidatable (i.e. not pain & suffering). 2. Post-judgment interest= automatic interest that accrues between the point that the judgment is entered and when it is actually paid

*Proving Damages*

*i. Must prove the fact of damages* 1. The evidence must do more than merely give rise to speculation that damages in fact occurred; it must give rise to a reasonable probability that the plaintiff suffered damage as result of a breach. *ii. Must prove the amount of damages* 1. P must provide the trier of fact with a reasonable basis for estimating amount of loss *a. Pecuniary/economic* (i.e. loss of profits, loss in value of property, etc.) a high degree of proof is required i. Minimum standard: "Proof arising above speculation that provides a reasonable, even though not necessarily precise, estimate or approximation of damages." *b. Non-pecuniary* (i.e. pain and suffering, mental anguish, etc.) there is a very low threshold of proof i. The trier of fact is given much discretion

Equity *Interlocutory Relief* Prejudgment Attachment

*may be sought if threatened with irreparable harm.* *Prejudgment attachment* - P is looking for a money judgment but the P is concerned the D has assets that will be wasted during the proceedings 1. The court can grant a prejudgment attachment that ties up the assets of the D so that the judgment has meaning for the P

Equity *Right to Jury Trial*

*normally not required in equity* 3 tests for determining whether the action is one in equity: *1. Historical test* - is this a cause of action that prior to merger would have been heard in a court of equity *2. Remedies test* - is a remedy being sought that's traditionally a legal one *3. Complexity test* - some problems presented in a civil suit are so complex that no jury should be expected to be able to sort it out and understand it. If that's the case then the parties don't have an adequate legal remedy.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Illegality/Violation of Public Policy*

1. Burden is on defendant to show that enforcement would be in violation of the settled public policy of the state, or injurious to the morals of its people. 2. Some examples: a. Sunday contracts under "Blue Laws" b. Unlicensed contractors c. Bribes and kickbacks d. Gambling debts and agreements e. Restraints on alienation 3. Remedy: A court will decline to award or even deny both parties relief if there is evidence of illegality.

Equitable Defenses *Unclean Hands*

1. Equitable relief is unavailable to parties who have themselves behaved inequitably regarding the subject matter of the claim. a. NOTE: Does not bar legal remedy of damages. b. NOTE: Doesn't determine whose hands are dirtier. It doesn't cancel each other out.

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *General Damages* Sale of Goods *Exception to Fixed Date*

1. Exception to fixed date - sometimes if any particular measure of damages is inappropriate the court should award the amount necessary to put the P in the position would have been had parties performed 2. If there's anticipatory repudiation and no cover then fix at a reasonable time after repudiation. a. Factors to determine reasonableness: i. The likelihood or lack of likelihood that repudiator will retract repudiation ii. How long it would take the reasonable buyer to arrange, to find, substitute goods *Step 2.* Subtract buyer's cost avoided NOTE: If part of goods are received can treat K as divisible.

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *General Damages* Construction Contract

1. Loss in Value measured by either *a. Cost to complete/correct; OR (preferred approach)* i. P's cost to do what D had promised to do, but did not (substitute transaction approach) ii. Factors in determining which to use: 1. Economic waste/avoidable consequences doctrine 2. Good faith/bad faith. If seller acted in bad faith will stick with cost to complete even if otherwise unreasonable. 3. If the plaintiff would actually use the award to fix the defect in the performance. *b. Diminution in value.* i. Difference between: 1. Value P's land would have had if D had fully performed & 2. Value P's land actually has w/ D's defective performance.

Breach of Contract Remedies *Sales Contract - Seller's Remedies* *General Damages* Seller's Restitution

1. Measured by the amount by which buyer is unjustly enriched. 2. Measured as the market price at which time goods were delivered less the amount the buyer paid.

Limitations on Damages *Avoidable Consequences*

1. P cannot recover for damages that could have been reasonably avoided. 2. Not required to take measures that are unreasonable, impractical, or involve expenditures disproportionate to the loss. a. Reasonableness depends on situation at the time of loss. b. The fact that another reasonable measure could have avoided the loss is not, in and of itself, proof that the measure taken was unreasonable. 3. P who acts reasonably can recover the reasonable costs of such acts.

Limitations on Damages *Collateral Source Rule*

1. P who has been compensated in whole or in part by a source independent of the tortfeasor is nevertheless entitled to a full recovery against the tortfeasor, to prevent the tortfeasor from gaining a windfall. a. NOTE: Majority of states have passed legislation limited this rule to avoid double recovery to the P (including CA) b. IN CA TODAY: If collateral source is affiliated with the D (D's insurance Co.) the court will reduce D's liability by amount they paid to the P.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Unconscionability*

1. Requires both: a. Excessive bargaining power in one party; and b. Taking advantage of that excessive bargaining power by extracting terms not favorable to both party. 2. Remedy: Unenforceability of that part of the K, not rescission

Breach of Contract Remedies *Sales Contract - Buyer's Remedies* *Consequential Damages* Foreseeability

1. Rule: Injury must be foreseeable as a probable consequence, more than 50% 2. To recover for emotional distress under a contract for a commission of a tort requires evidence that it is particularly likely result of the breach. a. What is foreseeable: i. When the express object of the contract is the mental and emotional well-being of one of the contracting parties, the breach of the contract may give rise to damages for mental suffering or emotional distress. Examples: 1. Wedding contract 2. Funeral services

Restitution in Transactions *Grounds for Rescission* *Non-Disclosure*

1. Seller of real property has duty to disclose where seller knows of: a. Facts materially affecting the value or desirability of the property and b. That such facts are not known to a diligent buyer 2. Considerations in granting rescission a. Gravity of the harm inflicted by non-disclosure b. Fairness of imposing a duty of discovery on the buyer c. Impact on the stability of contracts if rescission is permitted

Contempt

Defendant's disobedience of an injunction. *i. What orders support contempt?* 1. It must be an order that is an operative command, that tells someone to do something or not do something, with specificity *ii. Who may be held in contempt:* 1. Parties to the lawsuit 2. Those acting in concert with the named parties. *iii. Contempt Defenses:* 1. Inability to comply with equitable remedy (ex.: injunction) 2. Collateral Bar: One cannot attack imprisonment for violation of an injunction by use of a writ of habeas corpus.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Lack of Capacity*

Due to Infancy - 1. Remedy: K's voidable by a minor: a. Minor assert right either before reaching age of majority or within a reasonable time afterward; and b. By not affirming the contract after reaching age of majority. 2. A minor who disaffirms a contract is entitled to recover all consideration he has conferred. In return the minor is expected to restore as much of the consideration as, at the time of disaffirmance, remains in the minor's possession.

Types of Damages *non-compensatory damages*

Not based on the size of injury, its awarded to show you were right P *1. Nominal damages* - to vindicate technical rights *2. Cost of suit* - prevailing party (but NOT attorneys fees) *3. Restitution* - to prevent defendant's unjust enrichment *4. Attorney fees* - Generally each party is responsible for their own attorney fees. *a. Exceptions:* i. Contract Term ii. Statute - commonly fee shifting, only one side is entitled to prevailing party status iii. Tort Reform states - requires the loser to pay prevailing party's attorney's fees iv. Possible recovery as damages for prior actions (i.e. atty malpractice)

Unjust Enrichment

One party who is enriched at the expense of another party, under circumstances where it would be unjust for that party to retain that enrichment. *a. Does not apply to:* 1. Donors (not unjust to keep a gift) 2. Volunteers 3. Officious intermeddlers *b. Exceptions:* i. Individuals who provide necessaries to minors ii. Licensed healthcare provider provides aid in emergency situations iii. Discharging another's duty to the public iv. Bailee (caring for the property of another)

Restitution in Transactions *Grounds for Rescission* *Undue Influence*

Persuasion that tends to be coercive in nature, which overcomes the will without convincing the judgment. Requires both excessive pressure & undue susceptibility. *Over-Persuasion Factors: (T-PIEMAN)* i. Unusual or Inappropriate Time ii. Unusual Place iii. Insistent demand to finished at once iv. Extreme emphasis on untold consequences of delay v. Multiple persuaders by the dominant side against the single subservient party vi. Absence of third-party advisers vii. Statements of No time to consult advisors

Restitution in Transactions *Grounds for Rescission* *Duress*

Unlawful or illegal threat made where the person against whom the threat has been made has no reasonable way out of the threat except to give in. 1. Economic Duress - a. Unlawful threat; and b. Unfairness in the resulting transaction.

Restitution in Transactions *Grounds for Rescission* Avoiding PART of a K *Statute of Frauds*

Where K fails to satisfy SOF, K is unenforceable 1. Services performed: Restitution under unjust enrichment so as long as there is evidence of reasonable value of services. 2. Money already paid: buyers cant get money back unless seller also repudiates

Breach of Contract Remedies *Sales Contract - Seller's Remedies* *General Damages* Liquidated Damages

a provision in a K that fixes the amount of damages for breach. 1. Generally, these are the measure of damages. 2. Reasons to not enforce: a. If damages set too large then it runs the risk of being a penalty or coercive b. Reasonableness of damages is evaluated at the time of formation

Types of Damages *Punitive Damages* Statutory Limits

a. Statutes will say where the D has acted with malice, oppression, etc. the award of damages against them should be either double/treble the amount of damages i. Once compensatory damages are calculated you simply multiply

Remedial Goals *Contracts*

i. Fulfillment of Expectancy of Gain ii. Restoration of Losses and Recovery of Reliance Expenses iii. Restitution iv. Declaration of Parties' Rights or Duties 1. NOTE: No punitive damages for Ks

Equity *Equitable Jurisdiction*

i. Jurisdiction - the power of the court to hear the case. Requires (1) sufficient contact with the physical jurisdiction, (2) subject matter jurisdiction, and (3) proper service of process. If jurisdiction is not proper then judgment is void.

Remedial Goals *Torts*

i. Prevention ii. Restore the Status Quo: put P back where P would have been if tort had not occurred 1. In Specie- give back the exact thing that was taken from the P 2. By substitution- payment of money iii. Punishment/Deterrence- punitive damage iv. Declaration of Parties' Rights or Duties

Sale's Contract *Tort Action for Fraud/Deceit*

i. Victims of fraud are entitled to compensation for every wrong that was the natural and proximate result of the fraud. ii. Different approaches to measure of damages *1. Benefit of the Bargain (majority)*- The difference in value between that which is actual and that which was represented to exist. *2. Make Good Variation*- P can recover what it will cost P to cause the property to be as represented *3. Out of pocket losses (minority- CA)* a. Problem with this approach is that many times the value paid is the value received which equals damages of $0 eliminating the required element of damages from a tort action.

Breach of Employment Agreements *Employer's Remedies* (EE breach) Employer's Damages

loss in value minus cost avoided *1. Loss in Value* = FMV of what it would cost P employer to hire somebody else to do the work *2. Cost Avoided* = unpaid balance of contract price for remainder of term of the contract, plus any fringe benefits *3. Consequential Damages* can include: a. Lost profits from lack of employee's services b. Added cost of having to train a new employee *4. Liquidated Damages* may be enforced if included in employment agreement

Breach of Contract Remedies *Specific Performance*

need all 4 elements *i. Inadequacy of Legal Remedy (damages);* 1. Comes down to uniqueness of subject matter 2. If K for goods, then absolute uniqueness not required. Instead look to- a. Difficulty in finding item b. Or something else makes it unique 3. If subject matter is property that is not unique like a condominium apartment unit then there is an adequate legal remedy through damages. Centex Homes Corp v. Boag *ii. Contract as a whole is fair and equitable;* 1. Equities concerned with fairness, not going to award specific performance if contract is unfair. *iii. Promise sought to be specifically enforced is supported by adequate consideration;* & *iv. P has fully performed or court determines she will do so (mutuality of performance)*

Types of Damages *Punitive Damages*

to punish and deter a. Typically available in an action other than on a contract where D's conduct was oppressive, wanton, malicious, or fraudulent b. Some states permit for recklessness or gross negligence i. CA includes reckless indifference to rights of others c. Must have clear & convincing evidence d. Cannot consider harm caused to third parties.