DAMAGES OUTLINE
Professor: Estlinbaum
Semester: Fall 2012
CHAPTER 1 REMEDIAL GOALS – THE VALUE JUDGMENTS
Should There Be a Civil Remedy?
Harris v. Time Inc.
De minimus non curat lex: “the law disregards trifle”
Want a correlation b/w the remedy and effort
If we are going to have a civil justice system who should have access?
3 Guidelines:
“the law disregards trifles”
Case has to request loss that we can measure/contemplate
Even if the recovery is trivial or meaningless we may uphold it b/c of social policy, vindicates, or remedies a larger harm
Should there be a private right to a remedy?
Can have an express right of remedy
Can have an implied right of remedy
Tests allows courts to make/measure value judgments
Turpin v. Sortini
Wrongful birth: claim by the parents
Wrongful life: claim by the child
NELSON v. KRUSEN 678 SW2d 918
TX recognizes a claim for wrongful birth but NOT wrongful life
Majority bases their opinion on damages
What Form Should a Remedy Take?
1. Agreed Resolution
Where negotiation can resolve the dispute at a net gain and not a zero sum result
The parties can focus on broader objectives and not merely issues in dispute, so that resolution is mutually advantageous for reasons beyond avoidance of the financial and emotional burdens of litigation
2. Mediation
A trusted disinterested third party can be called upon to mediate disputes
Mini trials before the mediator are used in complex cases
Some courts requires mediation when the amount in controversy is small, others suggest but do not require
3. Arbitration
Can limit the remedy to be awarded, can also give equitable remedies
Arbitration clauses frequently appear in K’s
4. Self Help
Tends to frequently merge with agreed resolution
It is a practical remedy only where force is not required
5. Declaratory Relief
Allows a party to obtain a judicial resolution of the dispute before the harm is done and liability incurred
The court has discretion on whether to entertain the action
6. Damages
Most common form of relief
Substitution of monetary recovery to compensate for loss
The measure is neither inherently required by a legal system nor accurately descriptive of the computation of damages in practice
7. Restitution
D may have realized a gain out of wrongful conduct or may have gained at the P’s expense in a transaction which is not legally wrongful but nevertheless under circumstances which counsel that the gain not be retained
P may recover D’s enrichment in restitution
8. Specific Relief
A court command to the D to refrain from or engage in a described act
Enforceable through the judicial power of contempt and court may fine or imprison the D who violates the order
Public and Private Remedies
Silkwood v. Kerr-McGee
Decision made b/c under federal statute there is NO remedy so they create one under state law
2 types of preemption
express: statute expressly preempts
conflict: not possible to abide by the fed and state law, feds win
Davis v. Monroe Country Board of Education
Rule: funding receipts are properly held liable in damages only where they are deliberately indifferent to sexual harassment, of which they have actual knowledge, that is so severe, pervasive, and objectively offensive that it can be said to deprive the victims access to the educational opportunities or benefits provided by the school
Court is balancing goals of legislation and degree to which recovery can be had
Timing of Enforcement of Public and Private Remedies
Timing of Private Enforcement
Doctrine of Primary Jurisdiction: guide the court in determining whether a court or an agency should take initial action
Exhaustion of Administrative Remedies: concerns the timing of judicial review of administrative agency action
CHAPTER 2
Remedies for Breach of K
Reliance
What did the non-breaching party do in reliance on the promise
The cost incurred in reasonable reliance on the promisor’s performing the K
Expectation
P’s position with performance – P’s position after the breach
Loss of the anticipated profit of the K
($100 painting – $5 would have paid) – 0 = $95
Restitution
Reliance + gain by breaching party
Have to have the gain if not it is simply reliance
Strongest case for relief
Reliance is the 2nd best for relief, expectation is 3rd b/c it does not contemplate a change in position
HYPO
Jan is the owner of 100 shares of Acme Corp. stock at $60. Betty steals the stock in Jan. The stock price goes up to $150 in May, in July it is $100 and that is when Betty who misappropriated the stock sold it. In Aug it is $75 and Jan wants to sell, but the stock is no longer there. Betty’s gain is $100
Restitution
What is the nature of the commodity? Investment, consumption
Jan’s loss would be measured at the peak, public policy is to deter people from stealing stock, if we allowed people to make money from stealing there would be no deterrence
Must also ask: who is going to bear the risk
Tort Law
· Factors Affecting Tort Liability
o Capacity to absorb loss
§ Must consider: new industries, blame worthiness
o Prevent and punishment
§ Some aspect of intent and gross negligence/fraud, intent to deceive
§ In K law there is some actual intent, intent to breach
§ Why is the distinction important?
· Tort is to make a person whole, K is to get back the loss, it is a law in and of itself
· K law – the risk is under compensation
· Tort – the risk is overcompensation
The Major Limitations on Damages Recoveries
Foreseeability
Hadley v. Baxendale
Lost profit = special damages
Special damage: in this case b/c was not a basis of the bargain
Rule: if the damages suffered do not usually flow from the breach, then it must be established that the special circumstances giving rise to them should reasonably have been anticipated at the time the K was made
General Damages
Damages that naturally flow from the K
Can be reliance, expectation, restitution
Special Damages
ue of a complete recovery
No loss of chance in TX: if less than a 50% chance the action is barred
If bad outcome you get lost chance
Avoidable Consequences
Albert v. Monarch Federal Savings and Loan Association
The P has to prove what the damages ARE
AFFIRMATIVE DEFENSE: the burden of proof is on the person bringing it
Duty to mitigate is an affirmative defense
The duty to mitigate looks at what a REASONABLE person would do
What should be mitigated is determined by advocacy: a great deal of the time what is major and what is minor is determined by the jury
These are jury questions: you have to marshal the facts and present them to the jury
Once the act is reasonable we look at it in the light of the actor at the time, we do not look back – this is SUBJECTIVE
If P does mitigate damages they are going to recover the cost of the mitigation
Problem: 2-E
2 approaches:
in light of the religious belief is this subjectively reasonable that they would take this course of action, would a reasonable person with these beliefs undergo this surgery
NO, this is a reasonable man standard
Agreed Remedies
· A clause in a K that identifies what the damages will be in the event of a breach
· Liquidated damages are identifying the harm that could occur
· Restatement 1st:
o An agreement, made in advance of breach, fixing the damages therefore, is not enforceable unless
§ The amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach, and
§ The harm that is caused by the breach is one that is incapable or very difficult of accurate estimation
· Restatement 2nd:
o Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty
· Southwest Engineering
o no actual damages, but got liquidated damages
o Guarding against the delay on construction
· Norwalk
o no actual damages, did not get liquidated damages
o Guarding against the delay of delivery of door closers
· DIFF: you have to consider the anticipated or actual loss that was anticipated by the breach, have to look at what the actual clause is guarding against and if what it was guarding against occurred then invoke the clause, if what it was guarding against did not occur then do not invoke the clause
