NANCE REMEDIES- SPRING 2013
Chapter 1: Introduction – Remedies
I. Class Overview
1. Grade in proportion to amount of time suggested
2. 3000-5000 word limit
3. Cite a case w/arguments
· Example with tracing do not need to
· But if you do have a case that will support your position, then provide
4. The UCC
· Sometimes illustration
· Or w/limitations clause w/damages 2-719, when it specifically applies
· Not necessary to cite a UCC provision
5. Don’t take points off for erroneous answers only do not get points
B. When drafting your complaint need to know which remedy you are seeking
C. Think about the remedy and the rights of your client
D. Types of Remedies:
1. Compensatory (Nominal, statutory)
· Coercive (Injunction)
E. History of Remedies: England – courts of law & equity
F. Legal Remedies (Damages) v. Equitable Remedies (injunction)
G. Substitutionary v. Specific Remedies
1. substitutionary – something you can provide for in the type of compensation
2. Specific – when you actual provide them with the individual thing that they are looking for
H. Restitution: be entitled to the entire ill gotten proceeds from something
1. Example: all the proceeds from which someone bought the winning lottery ticket
Chapter 2: Paying for Harm – Compensatory Damages
I. The basic principle: restoring plaintiff to his rightful position
A. United States v. Hatahley
1. Facts: United States and white stockmen considered the Indians to be trespassers, and in separate litigation sought to have them ordered off public lands. While those lawsuits were pending, gov’t rounded up horses and burros and sold them for nominal prices, some to a horse-meat plant and some to a glue factory
2. Rule: Fundamental principle of damages is to restore the injured party to the position he would have been in had it not been for the wrong of the other party
a. Cost of the horses/animals: difficult because specialized animals. P did not prove the replacement costs. Ct rejected availability of animals in immediate vicinity. Also cut in half the amount of damage of herds bc that approximated harm that occurred for other reasons.
b. Pain and suffering award: everyone got the same bc community loss and sorrow
4. 10th Cir. Rejects both
a. Cost of the horses: the court should consider evidence of availability of like animals, use parties and witnesses to determine value. Also, arbitrarily cutting the award in half is pure speculation and erroneous
o Rule: Damages may be given only if the defendants were the proximate cause of the loss and were proved to a reasonable degree of certainty
b. Pain and Suffering: pure conjecture – not eve ryone could have had the same
B. The essence of compensatory damages: to restore the injured party as nearly as possible to the position he would have been in but for the wrong
a. Corrective justice
b. Efficiency arguments (encourage economic activity/efficient breach)
2. Issue w/judges v. Jury
a. Hatalay was a case tried by a judge – they must give reasoning for their damages. But juries do not have to.
C. One Satisfaction Rule: plaintiff can not recover the same item of damage more than once
II. Value as the measure of the rightful position
A. In re September 11th Litigation p.18 [court attempts to restore plaintiff to rightful position as cheaply as possible]
1. Facts: Lease on the world trade center, then sept. 11th happened. Sued the airlines for negligence.
2. Issue what is the appropriate measure of damages?
a. Diminution of property market value: the money lost (rental stream of payments) because of the buildings demolished
b. Replacement costs: the amount it would cost to build 4 new buildings
3. Lesser of two rule: a plaintiff whose property has been injured may recover the lesser of the diminution of the property’s market value or its replacement cost
a. Applies even when property at issue has been completely destroyed
b. The tortfeasor is responsible only for injuries that are the direct, natural, and proximate result of the tortfeasors actions, and that the parties would have foreseen, contemplated, or expected
o Could not estimate costs of building new towers, would be much improved
4. Test for special properties:
a. Not whether there are, or were, special or unique aspects to the property, but rather whether the use to which the property is put at the time of the tort is unique use, suitable only to the owner, and without a fair market value
b. Not a special property because just used as office space
c. King Fisher Marine Service, Inc. v. The NP sunbonnet p. 27: the court awarded replacement value of barge because although the person got a barge for $30,000, it was unique and to get another barge that would perform the same function would cost much more than the market value of the recently purchased barge
5. Car Hypo:
a. Your car gets demolished. It was worth only $10,000 but would cost $12,000 for an identical car.
b. The court would award the $10,000 market value because they have concern about windfall (i.e. you could buy a car for $10,000 and then pocket the other $2,000 and this would put you in a better position then before the accident)
c. The court seeks the most efficient and cheapest manner to resolve disputes
6. Rental Stream & Payments:
a. In this case had to adjust the rental stream to present value
b. Can not recovery one for the properties market value (which includes the lost rental stream) & again for the loss of value from the rental stream
7. Determining FMV:
a. The FMV of a property is “the price at which the property would change hands between a willing buyer and seller, neither being under any compulsion to buy or to sell and both having a reasonable knowledge of relevant facts”
b. So they use the value they paid to rent the building before the accident
8. Note about speculation and profits: the more speculative profits become the less likely the court is to use profits
at is what it would cost to get a computer to do what the co. promised this computer would do.
a. Difficulty in value in this case because a computer to do what they said it would do does not exist
2. Parties Suggest Value:
a. Plaintiffs brought in experts which said that the value of the closest computer to do what they said it would do was $200,000
b. Defendants only suggested the purchase price Nance thinks this was why such a big award was given
3. Can get incidental and consequential damages but the party in this case went over breach of warranty
a. The difference between the goods as accepted and the value they would have been as warranted
4. UCC gives two choices for breach, either:
a. Recover the difference b/w contract price and market price §2-713(1), Or;
b. Buy replacement goods and recover the difference between the contract price and the cost of replacement (usually called the cover price) § 2-712
D. Smith v. Bolles p.50 [Reliance]
1. Facts: plaintiffs bought stock for $1.50 that were worthless, similar stock would have been worth $10 per share
2. Issue: expectation or reliance?
3. Held: What the plaintiff might have gained is not the question, but what he had lost by being deceived into the purchase. The suit was not brought for breach of a contract. The gist of the action was that the plaintiff was fraudulently induced by the defendant to purchase stock upon the faith of certain false and fraudulent misrepresentations.
4. Cant make a tort action a contracts action.
IV. Consequential Damages
A. Buck v. Morrow (p.52)
1. Facts: Morrow leased Buck a pasture for 5 yrs. Morrow agreed to compensate Buck if the pasture was sold. In year two the land was sold. Buck searched for another pasture but could not find a place for his cattle. They had to be rounded up at 1.50 per day. 15 cattle were lost. Took him 5 months to find another place to keep his cattle.
2. PP: testimony was excluded as immaterial. The damages should be based on the difference b/w contract price and rental value for the pasture for tehe unexpired term.
3. Holding: this was incorrect.
4. Rule: The tenant may recover special damages such as extra expenses and damages, if they are the proximate cause of the breach
5. Reasoning: the assumption of the difference in price rests on the fact that you can go into the market and obtain similar property. If you cannot, and damages result that are the proximate cause of the action then special damages remain appropriate.