REMEDIES OUTLINE
The Classification of Remedies: ANYTIME YOU DISCUSS DAMAGES, THINK ABOUT CASUATION
1. Compensatory Damages → most important type of remedy. (classic remedy at law)
2. Preventative Damages
~ Coercive Damages (e.g., Injunction)
~ Declaratory Remedies (e.g., Non-Binding ruling by the Ct)
3. Restitutionary Damages
4. Punitive Damages
5. Ancillary Damages
Substitutionary v. Specific Remedies: most fundamental remedial choice
· Substitutionary Remedy: (generally legal remedies) π suffers harm and receives a sum of $ to substitute for what π has lost. (i.e., compensatory, punitive, restitution of $ value of ∆’s gain)
· Specific Remedy: (generally equitable remedies) Seeks to avoid any exchange and aspire to prevent harm, or undo it. (i.e., injunctions, specific performance of K, restitution of specific property, restitution of specific sum of $).
COMPENSATORY DAMAGES (Putting π in the “Rightful Position”)
· Compensatory Damages – $ damages awarded to compensate πs for harm they suffered.
· The Basic Rule: Try to put the π in the position they would have been in but for the wrong as if it never happened. Call it the “rightful position.” Want to make Π WHOLE again.
· Focus on the π and restoring the balance; and deter ∆ from taking certain actions.
· Optimal Deterrence = idea of setting penalty at the right level to allow the “right level” of violation.
What is the “Rightful Position”? àBest indicator is Market Value
· The aim is to do the best we can to put the π in the same position as prior to the injury. Sometimes, this is impossible, like if π loses an arm; we can’t give his arm back, but we can give him the second-best solution and compensate him financially to do what we can to put him back in the rightful position. We attach a dollar figure to value the use of the arm.
o Note – Trying to put a dollar value on a π’s loss (when loss is not purely economic) can be very difficult. Need expert witnesses usually b/c ct needs concrete proof of entitlement to damages.
· “double substitutionary” → we are substituting $ for the loss or suffering experienced by the victim, as well as substituting someone else’s valuation of the loss or suffering.
Categories of Compensatory Damages (not exhaustive)
1. Value of property (direct damages)
2. Emotional distress (non-economic damages)
3. Use Damages—use lost b/c of harm (profit from property taken wrongfully)
4. Attorney value
5. Time value of dollars (dollar today is worth more than a dollar tomorrow)
PROPERTY DAMAGES
US v. Hatahley (p11)
Overview: Horse and Indian Case
· We can’t get the horses back; the next best thing is compensatory damages—substituting $ for horses.
· The Supreme Ct: holding that under Utah law, damages for wrongful taking should be measured by animals’ replacement cost at the time of taking, plus lost use value.
· The District Ct improperly determined that the animals were unique and thus irreplaceable. While the animals’ unique training and nature might add to their market value, it did not mean the animals were entirely unique or irreplaceable.
· The Supreme Ct held that equal award to each π for mental suffering was conjectural (without evidence) and that, on retrial of damages, district judge should step aside due to being partial.
Holding: Reversed: failed to apply proper measure of damages and appropriately determine use value. Damages were animals’ replacement value. Also, equal award for mental suffering had no evidentiary support. Should’ve measured per individual.
Ways to Measure the Value of the Loss:
· Market Value of Animal. This is the rule. Need to know the geographic market, experts, etc.
· Replacement Value of Animal (unique characteristics of the animal show a difference b/t replacement of animal and value of the animal taken). Market value is the rule; replacement value is the exception.
· Services of Lost Animal. You can get compensation for the particular use of the animal.
· Lost Profits. This is a consequential damage.
· Emotional Value. How upset are you? Pain and suffering, etc.
Types of Damages Considered by Hatahley Ct:
· Loss of the Animals (Direct Damage—flows from the wrong at issue).
· Mental Pain and Suffering (should be individualized measure of damage).
· Diminished Value of the Herd (Consequential Damage—element of damage still proximately caused by the wrong, but does not always flow from the wrong). Without the horses/burros, coyotes ate the cattle.
BASIC RULE → Market Damages! (start here first; then move to exceptions):
· Market value of property on the day of the loss. That is a price reached b/t willing buyer and seller.
· You DON’T get the Replacement Cost or Sentimental Value.
· In a takings case, you only get Market Value, not Replacement Cost or Consequential Damages.
Under-Compensatory : If its depreciable property that becomes less valuable w/ time, then under-compensatory situation may arise.
US v. Fifty Acres (p19)
Overview: US condemned 50 acres used by city as sanitary land fill. The city was required by law to acquire a new facility. Fair Market Value (FMV) of old facility was much lower than reasonable cost of substitute facility.
Holding: FMV should always be used during a taking unless FMV cannot be readily determined.
· Cts want to prevent the owner from experiencing a windfall. Must stick to FMV b/c its an objective standard (objective over subjective). Fact that you have to spend more to get what you lost does not mean you get out of market value. (ex. if the government takes your land by eminent domain, they will only give you the FMV for your house (what someone would likely pay), but they will NOT pay for the cost of a substitute!)
· ∆ is entitled to have π made whole again in the least expensive way possible.
STEPS for Determining Value
1. Look toward Fair Market Value Rule.
2. Exceptions to Market (FMV) rule → Component part & No Real Market
· Component Parts – When you have to replace a
· Offsetting Benefit Rule: If you cause harm to someone, and your action also confers a benefit to them, benefit is subtracted from harm.
BREACH OF CONTRACT—AND COMPENSATORY DAMAGES
· Expectancy Damages: the π’s expectation interest is her interest in having the contract performed.
o This is the way the law applies rightful position to Contract cases.
o Put the Π back in position if Contract was fully performed (what did he expect to receive if K was fulfilled, including profits).
· Reliance Damages: What it takes to put Π in the position they were in before contract (indemnifies π for costs outlaid in anticipation of contract).
o Reliance Interest: it may be impossible to measure the expectation interests of a π accurately. If so, then give reliance interest. ct will attempt to put the π in as good a position as she was in before the contract was made. In order to achieve this, the ct will normally award the π her out-of-pocket costs incurred in the performance he has rendered on the contract.
Expectancy v. Reliance? → two situations when π will choose reliance damages over expectancy damages:
(1) When there is a negative expectation (π expects to lose $ on the contract).
(2) When expectancy damages are hard to prove, OR the amount is too speculative.
· There is not a fear of the π getting a windfall in Contract cases like there is in other types of cases. Expectancy damages may lead to windfalls.
Neri v. Retail Marine (p37)
Overview: Π Neri put down initial $40 deposit for boat, then $4,250 for immediate delivery of boat. After this, Π’s attorney sent letter to ∆ Retail Marine rescinding sale due to hospitalization of Π, but boat manufacturer had already shipped boat to Retail Marine; therefore, Retail Marine refused to refund Π’s deposit.
· Contract Price = $12,500; Deposit = $4,250; Expected Profit = $2,579; RM’s Storage Cost = $674.
Issue: What are the damages in this case? How do we put RM back in position if there had been no wrong?
Holding: The damages would be expectancy damages (profit $2,579) and reliance damage (storage $674).
· Retail Marine is considered a Lost Volume Seller; which means the law assumes they can sell as many boats as is humanly possible, so b/c of the breach, Retail Marine only gets 1 sale instead of 2. Entitled to Lost Profits.
o RM resold the boat it was selling to Neri for the same price as the Neri Contract.
