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Modern American Remedies
A remedy is anything a court can do for a litigant who has been wronged or is about to be wronged.
Time Absent Wrong
Tort damages are based upon the principle that the injured party be placed in the same position he would have been in had the tort not occurred (not the original position).
Here, the trial judge erred by making a blanket damage determination instead of considering the damages actually incurred by each plaintiff: each had different levels of economic damage incurred as each had differently valued animals, and each suffered a different level of mental distress.
The proper measure of loss is the value of the property. The value method avoids windfall gain to the plaintiff and windfall loss to the defendant (Law and economics theorist like the value method because it creates "economic dislocation").
When diminution in value cannot be reasonably determined, Reasonable costs of reconstruction or replacement may be used as the measure of damages.
The proper time for valuation of the lost crop was the time of harvest.
Expectancy damages is the loss that could have been avoided if the contract had been performed.
Essential Reliance Damages are those costs that would not have been incurred if a contract had not been entered into.
Incidental Reliance damages are those miscellaneous expenses that result of a breach such as storage costs, etc.
The correct measure of damages for contract breach is the difference between the fair market value of the goods accepted and the value they would have had if they had been as warranted.
The proper measure of damages for the tort of fraud is the actual loss to the buyer, not the purported value of the goods. If this action were brought in contract, expectancy damages would probably be awarded today.
Three limiting rules for the award of special damages.
2.) Remoteness, and
3.) Avoidable consequences.
The plaintiff may recover for the full market/contract damages even though loss is not realized. The recovery of special damages, however, will be limited to a reasonable time in which the rancher could cover.
General Damages: Contract/Market Damages
Special Damages: Value of lost cattle, extra wages.
The only damages available for failure to pay money is money plus interest.
In an action for tortuous interference, the plaintiff is not limited to the same damages recoverable in a contract action.
The contract between the plaintiff and the defendant limited general damages to "repair or replace" and special damages were disclaimed. The court ruled that these two limitations were separate limitations, and the invalidation of one did not automatically invalidate the other. Therefore, plaintiff was able to get general damages under the UCC, but special damages remained unavailable.
Only if the limit on special damages were shown to be unconscionable would the disclaimer be invalidated.
Because the goal of damages in contract is to put the plaintiff in the place they would have been had the contract been performed, a liquidated damages clause will only be upheld if it is:
2.) actual damages would be difficult to determine.
Absent a contract provision to the contrary, a liquidated damages clause prevents a party in a breach of contract action from seeking an alternative measure of damages.
The Avoidable consequences doctrine provides that the harmed party must take reasonable steps under the circumstances to minimize damages. This doctrine acts as a means of avoiding waste by giving the wronged party an incentive to avoid loss and minimize waste (expenses incurred in an effort to minimize damages may be recovered). The avoidable consequence doctrine is a limitation on special damages only; not on general damages
The Offsetting Benefit doctrine provides that a plaintiff's damages will be reduced by an offsetting benefit.
The Collateral Sources rule allows for an award to the plaintiff from both the tortfeasor and a second completely independent source (note how the Collateral Source rule acts as an exception to the "rightful position rule").
Plaintiff need not choose the best means of mitigating damages, only one that is reasonable under the circumstances.
When the plaintiff is reimbursed or compensated by a source completely independent of the tortfeasor, the reimbursement or compensation will not reduce the damage award due from the plaintiff.
In Tort, remoteness (proximate cause) does not cover amount of recovery but whether liability will be imposed or not.
In Contract, remoteness (foreseeability) is determined under the doctrine of Hadley v. Baxendale whereas special damages are not recoverable unless reasonably foreseeable (general damages are always recoverable).
Recovery may be obtained for damages that are proximately caused by the defendants negligence.
Remoteness -- Here, the court looked to Hadley v. Baxendale and determined that special damages must be specifically foreseeable to the defendant for the defendant to be liable for them.
Avoidable Consequences -- Secondly, the defendant should not be allowed to recover from the defendant when the plaintiff had the power to avoid the consequences and failed to do so.
The foreseeability doctrine keeps damage awards in line with the amount for which the contracting party reasonably believed it might be liable for when the contract terms were created.
A Plaintiff must prove with reasonable certainty the amount of the loss sustained.
A jury may make a just and reasonable estimate of damages based upon the evidence presented, and its award need not be based on precise mathematical calculations so long as there is no uncertainty as to liability.
Pain and suffering is considered general damages. Special damages are those damages resulting from the pain and suffering (medical bills, lost wages, etc…).
Statutory limitations on the amount of recovery for medical malpractice are constitutional so long as the statute's classification is not arbitrary and it bares a reasonable and substantial relation to the purpose of the law.
There must be an overpowering public necessity in order to create a statute that limits a fundamental constitutional right.
A court may exercise its discretion in reducing a jury verdict when the evidence indicated the verdict is grossly excessive. A verdict essentially punitive in nature cannot stand.
Variables to explain the range of awards are:
1.) nature of the defendant's conduct,
2.) nature of the plaintiff's reaction to the defendant's conduct, and
3.) the importance of the interest involved.
Violation of a right does give you the right to receive compensatory damages unless you can prove that there are damages caused by the violation. Absent such damages, the plaintiff is only entitled to nominal damages.
Violation of due process
w/ following suspension
Actual Damages caused by the suspension
No damages caused by the suspension
If a suspension would have resulted even after due process, then plaintiff would have to show damages resulting from the violation alone.
If no suspension would not have resulted after a hearing, then the suspension alone is damages enough.
If there were no damages resulting from the suspension then only nominal damages would be awarded unless damages resulted from the violation itself.
Income taxes which would have been paid must be considered to determine the measure of damages when the award is non-taxable (after tax dollars are used to calculate damages when the damage award is non-taxable).
There are three types of interest:
1.) Conventional – contractual interest such as that paid on a loan.
2.) Post-judgment – an statutory interest rate automatically paid on a judgement from the date of entry of the judgement to the date the judgment is satisfied.
3.) Pre-Judgment – a statutory interest rate paid on the judgment from the date of the cause of action until the date of the entry of the judgment. The pre-judgment interest payment is due and payable at the time of entry of the judgment and is subject to post-judgment interest (this is either judicially imposed or created by contract and is a fairly rare occurrence).
Prejudgment interest should be awarded in a personal injury action on damages that have accrued by the time of judgment (this is in line with the rightful position rule because a dollar today is worth more than a dollar tomorrow).
Generally, future damages are awarded in a lump sum, discounted to present value (PV). PV is the amount today necessary to have X dollars at some time N periods from now. In some cases, Installment payments may be awarded thereby avoiding the necessity of discounting to PV.
The goal of damages is to put the plaintiff in the position which he would have been in, but for the defendant's harm.
The goal of a preventive injunction is to put the plaintiff in his rightful position by preventing the defendant's harm.
A preliminary injunction will not issue absent a substantial likelihood of irreparable harm. The possibility of irreparable harm is not enough; a showing that the irreparable harm will occur is needed.
Because injunctive relief is a drastic remedy, the scope of injunctive relief should not be broader than the evidence warranting it.
1.) Is there a ripe threat of injury?
2.) What is the scope of the injury?
3.) What should be the scope of the injunction?
For a permanent injunction to issue, there must be some cognizable danger of recurrent violations.
Speculation plus fear of future harm does not satisfy the requirements of ripeness necessary to grant injunctive relief. The injury must be real and current.
The goal of a reparative injunction is to prevent future harm caused by prior acts.
Here, the court issued an injunction voiding the election and ordering a new one even though that was not the state's substantive policy because it was the only way to put the plaintiff in the rightful position.
The court in this case issued a permanent injunction with a limited life of 24 months because the court believed that 24 months was the period of time necessary to put the wronged plaintiff back into their rightful position.
Here, the court ordered that an unjustly created trust agreement be terminated even though it was currently under new and better management then when it had gone into receivership. The court said that it was the creation of the trust itself that was inequitable so the only way to put the wronged parties back into their rightful position was to dissolve the trust agreement.
The essence of equity jurisdiction is the power of the court of equity to mold each decree to the necessities of each case. Sometimes, as is here, the decree will go beyond the rightful position of the wronged party in order to correct a prior wrong.
Again, even with the structural injunction, the decree may not go beyond the scope of the harm. Here, the court ordered integration of schools across county lines when the problem only existed in one county. On appeal, the court said that the scope of the injunction was too broad and the court could not order an inter-district decree.
The court ordered the integration of the Virginia Military Academy in order to put the female candidates in their rightful position of equal education.
The remedy must be limited to correcting the violation that caused the violation in fact.
A party seeking a modification of a consent decree must establish that a significant and unforeseen change in facts or law warrants revision of the decree and that the proposed modification is suitably tailored to the changed circumstances.
The scope of the order was not too broad because, although it extended beyond the complained of municipality, the order was directed at HUD, not the municipalities. The municipalities were merely effected by the order, not subject to it.
Innocent third parties may not have significant burdens imposed upon then, but minor or ancillary burdens may be imposed against innocent third parties as a means of correcting a wrong.
Three factors to consider when deciding to withdraw an injunction:
1.) Has there been satisfactory compliance?
2.) Is retention of control necessary?
3.) Does there appear to be a good faith commitment to the change?
When the destruction of something irreplaceable, such as land, is threatened, equity will intervene.
Specific performance of a contract for the sale of chattels is available if the legal remedy is inadequate due to the uniqueness of the chattels, or inability to acquire cover.
Money damages are not sufficient to put a plaintiff in their rightful position if plaintiff would have to do make a significant effort to find cover.
Although the billboard space was unique, its economic value was measurable. Therefore, damages could compensate plaintiff with a great deal of certainty.
Courts will not conduct the traditional balancing of equities in deciding whether an injunction should issue to remove encroachment on land where the encroachment is found to have been intentional.
The court usually looks for situations that will result in more than a zero sum gain.
The court will not grant specific performance if the order will result in the court having to take control of the carrying out of the daily operations.
Although specific relief would have been better for the wronged party, the wronged party had an adequate legal remedy in defamation. Also, the first amendment is a defense to equitable relief.
Equity generally refuses to grant specific performance of personal services contracts but will issue "negative enforcement" thereby preventing an employee from performing a unique or extraordinary service for a competing employer during the term of the breached contract.
The four basic criteria for granting a preliminary injunction are:
Although a preliminary injunction is usually issued to preserve the status quo, a preliminary injunction may be framed so as to change the status quo if the situation requires it.
FRCP 65(c) requires the plaintiff to post a bond to cover the defendant's possible expenses if the defendant prevails. A prevailing defendant is entitled to damages on an injunction bond unless good reason for not awarding damages exists.
1.) there is a very informal hearing,
In the absence of a showing of impossibility, an ex-parte abridgement of First Amendment rights without notice is improper.
Irrespective of label, all 10 day TROs are not appealable. All other types of TROs are appealable and are actually preliminary injunctions.
A federal court may issue a declaratory judgment when an actual controversy exists. A declaratory judgment is not a mere advisory opinion because an adjudication of actual rights is made.
A defendant can use a declaratory judgment as a counter claim against a plaintiff.
Declaratory relief may be given when the threat of enforcement of a disputed state statute exists.
1.) Ejectment to recover possession
2.) Trespass to recover damages
1.) Replevin to recover possession
2.) Trover to recover damages
3.) Detinue to recover possession
1.) Bill to remove a cloud on title
1.) Cancellation (cancels a document)
2.) Recision (undoes a document)
4.) Quite Title (adjudicates a claim)
1.) Declaratory Judgment
2.) Bill to quiet title
3.) Bill to determine adverse title.
This is a case for the standard non-statutory quiet title declaratory remedy. The declaratory remedy of quite title is used to declare ownership by a person who is still in possession of his own property (legal remedies don't apply in this case).
Reformation is predicated on mutual mistake except when a unilateral mistake is procured by fraud. The victim of the fraud, then gets the benefit of what they thought was the bargain.
Reformation is allowed despite the lack of mutual mistake if there is fraud involved by the other party.
Restitution looks to the benefit to the defendant as the measure of relief for the plaintiff.
1.) Breach of Contract (except for a contract for the sale of real property), or
1.) No other cause of action.
2.) Defendants gain exceeds the plaintiff's loss (most common).
3.) Defendant is insolvent (restitution gives plaintiff preference over general creditors as to certain property).
Restitution prevents unjust enrichment by giving the plaintiff the defendants gain (this places the plaintiff in a position that is better than the rightful position).
Where a defendant tortfeasor has benefited by his wrong, the plaintiff can waive the tort and bring an action in assumpsit for restitution.
Plaintiff was awarded defendant's gain in restitution even thought there was no proveable damages to the plaintiff.
The restitutionary remedy of constructive trust does not require a showing of damages to the plaintiff, but a measure of benefit to the defendant. The measure of damages that would go into constructive trust, however, must be traceable to the defendant's wrong.
The purpose of restitution is to prevent unjust enrichment, not to punish. Therefore, an apportionment of the defendant's profits between wrongful and rightful profits is necessary.
The burden is on the defendant to show that apportionment is required. If the defendant does not show the necessity of apportionment then there will not be any and all the profits will go to the plaintiff.
Defendant had 0 profits until it stole trade secret from defendant. Therefore, there was no necessity to apportion defendant's profits and 100% went to plaintiff.
Rescission reverses a transaction and seeks to place each party in the position they occupied prior to the contract.
A party may recover for the expenditures made in reliance on the promise of another, even though the promisor received no benefit from such expenditures (similar to the case where a party to an unprofitable contract waits for the other party to breach and then sues in quantum meruit for the benefit to the other party).
A constructive trust gives the plaintiff a place of priority over other creditors because it captures the property, rescinds the contract and then places the parties in their original position.
A constructive trust cannot be imposed unless there is fraud and the assets are traceable.
1.) Fraud or misappropriation, and
2.) Property which is identifiable.
When funds are wrongfully converted and placed into multiple accounts, tracing fictions will be used by the courts to determine what amount will be put into a constructive trust and what will be put into equitable lien. If the defendant is in bankruptcy, the amount of the theft is a cap on the amount of the award.
A plaintiff must trace the equitable interest into the property over which a constructive trust is being requested (in certain circumstances, this tracing requirement has been relaxed).
The difference between the constructive trust and the equitable lien is that the plaintiff gets the property that is subject to the constructive trust, but the plaintiff only gets an interest in the property that is subject to the equitable lien.
Subrogee v. Defendant
There are three parties involved in every case of subrogation: the subrogee, the subrogor, and the third party.
Rightful owners may recover both converted property and its estimated appreciated value if subsequent alterations have damaged the property.
To determine the adequate amount of punitive damages, the court will consider:
An excessive punitive award violates the defendants substantive due process rights. To determine if an award is excessive, the court will examine the courts adherence to procedural due process and use a three part test for substantive due process:
Plaintiffs may only receive punitive damages for breach of contract if there is at least one finding of an independent tort with accompanying actual damages. Punitive awards are not recoverable for breach of contract.
Contempt is the process by which a court enforces its decisions. To be enforced by contempt, the order must be a detailed order and the defendant must have had the ability to conform to the order.
In most states, a mere judgment creates neither a lien nor an attachment. To collect on the judgment, the plaintiff must seek a writ of execution or a writ of garnishment.
An unperfected security interest is subordinate to the rights of a person who becomes a lien creditor without knowledge of the security interest.
You can only garnish money that is owed to the defendant by the garnishee. Typically, garnishees are banks or employers.
Inability to pay is a defense to criminal and civil contempt. To determine inability to pay, the court must examine his assets, income and expenses.
A court may also use its contempt power to enforce a money judgment when attachment or garnishment are not available or practicable.
Prejudgment attachment will create a lien with priority from the date of attachment. The court will weigh the undue hardship to the defendant before ordering the attachment and will require a bond from the plaintiff.
Two requisites for the imposition of a receiver:
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