Remedies: Flanagan 2013
Equity courts began in England when the Chancellor issued writs
i. Two writs are still performed today:
1. writ of habeas corpus
2. writ of certiori
Equity courts had no juries, heavy on fact investigation, and chancellor made all the decisions.
i. He who comes into equity must come with clean hands
ii. He who seeks equity must do equity
iii. Equity does not suffer a wrong to go without a remedy
iv. Equity regards as done what ought to have been done
v. Equitable relief is not available to one who has an adequate remedy at law
vi. Equity aids the vigilant, not those who slumber on their rights
vii. Equity regards substance rather than form
viii. Equity acts in personam
ix. Equity follows the law
Now the courts are combined into one court
Inadequacy of Legal Remedy/Irreparable Harm
Fortner v. Wilson (Okla. 1950)
i. Π entered into a contract with ∆ for the sale of a car. ∆ decided to sell the car for a higher price to someone else. Π wanted injunction to prevent the ∆ from selling the car.
ii. Court held that Π was not entitled to equity because Π had an adequate remedy at law: contract damages.
iii. Requirement of irreparable harm—court will only grant specific performance if the car was unique and unable to be replaced
If the object is unique, the court may grant specific performance of the contract
Schiller v. Miller (Fla. 1993)
i. Π wanted an injunction to prevent the ∆ from selling jewelry.
ii. Court granted the injunction because: “injunctions may not be granted for the retention of personal property unless it is found to be unique or otherwise peculiar, and unless the Π demonstrates that there is no adequate remedy at law.”
iii. Generally, harm is irreparable when the legal remedy of damages in inadequate to provide relief
Cannot grant specific performance for personal services
i. Problems with continuing supervision of the court
ii. How to force someone to do something they do not want to do?
Equitable Relief is Discretionary
Equitable relief remains inherently discretionary. A court may deny equitable relief even though Π’s legal remedy is inadequate.
Georg v. Animal Defense League (Tex. 1950)
i. Πs want to prevent ∆s from moving an animal shelter next door
ii. Court does not grant injunction and holds Π’s remedy must follow from an action for damages
Grossman v. Wegman’s Food Markets, Inc. (NY 1973)
i. ∆’s grocery store was not profitable so decided to shut down.
ii. Court decides not to grant specific performance because “courts of equity are reluctant to grant specific performance in situations where such performance would require judicial supervision over a long period of time.”
iii. “Contracts which require the performance of varied and continuous acts will not, as a general rule, be enforced by courts of equity, because the execution of the decree would require such constant superintendence as to make judicial control a matter of extreme difficulty.”
Unclean Hands Doctrine
i. Sheridan v. Sheridan (NJ 1990)
1. ∆ scammed with employer and made lots of cash. Π and ∆ divorced. Π wanted the court to distribute the stolen assets.
2. “To allow Π to seek equity’s aid in dividing marital assets acquired with illicit funds would substantially demean that policy (equity does not reward wrongdoers) and sully the judicial process.”
3. “Equity will follow the common law precept that no one shall be allowed to benefit by his own wrongdoing, nor enrich himself as a result of his own criminal acts. For a court of equity can never be used to promote or condone crime or clearly defined breaches of public morality.”
ii. Seagirt Realty Corp v. Chazanof (NY 1963)
1. Π father sells property to son to defraud creditors, son sells to ∆, ∆ was supposed to sell to Π but doesn’t. Π seeks to remove cloud of title.
2. Court allows father to have clear title of the land because the wrongs done happened so long ago that the court is only concerned with correct title.
3. “When equitable relief is sought, not to enforce an executory obligation arising out of an illegal transaction, but to protect a status of legal ownership, wrongs done to creditors in respect of the property at some time prior to the acquisition of the title now in issue may not now be raised by this defendant to defeat otherwise available relief.”
iii. Other courts decided the opposite of Seagirt. The Georgia court refused to allow the original person who transferred the property to avoid creditors to take the land back from his son. They left the title in the hands of the son.
iv. Unclean Hands
1. In order to claim unclean hands, the unclean hands aspect must be a part of the transaction at issue.
2. For example, cannot claim unclean hands on contract 1 where a party has only violated contract 2.
v. American Univ. v. Wood (Ill. 1920)
1. ∆ was defrauding students by holding himself out as a chiropractor. Π was defrauding students by employing ∆.
2. The unclean hands maxim was never intended to bar every one guilty of wrongful conduct from relief in a court of equity
3. As a general rule, it is required that the wrongdoing or fraud of the complainant must be connected with the subject of the litigation and have some relation to the rights of the parties arising out of the transaction
4. “Unclean hands” includes all misconduct and wrongdoing that is sufficiently related to the plaintiff’s claim
5. The court chose not to enjoin ∆.
vi. Some courts will use unclean hands as a reason for not granting legal relief.
i. Campbell Soup Co. v. Wentz (3rd Cir. 1948)
1. Court refuses to grant specific performance because the contract was totally unfair to the ∆s.
2. “A party who has offered and succeeded in getting a tough agreement should not come to a chancellor and ask the court for help to enforce.”
3. The court did allow Π to recover damages, but not equitable relief. “Ordinarily, there will be little difference between expectation damages and specific performance.”
4. Unconscionable is not defined but has been stated as:
a. The principle is one of the prevention of oppression and unfair surprise and not of disturbance of allocation of risks because of superior bargaining power
i. Equity aids the vigilant.
s and some courts have sought to apply this principle to the formation of contracts, where, relying on a gratuitous promise, the promisee has suffered detriment.”
6. “A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.”
7. Π relied on the ∆’s promise to pay her pension so ∆ has to pay
iv. US v. Georgia-Pacific Co. (9th Cir. 1970)
1. Declaratory action.
2. Government makes a deal and takes over some of ∆’s forestland. Government does not take over all of the land so ∆ comes back in and takes care of it. Government then sues to get the land back.
3. Equitable estoppel is a doctrine adjusting the relative rights of parties based upon consideration of justice and good conscience
4. “Equitable Estoppel has been defined as having the effect of absolutely precluding a party, both at law and at equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right, either of property, of contract, or of remedy.”
5. Equitable estoppel against the government may be done in several situations
a. if the government is acting in its proprietary rather than sovereign capacity;
b. if its representative has been acting within the scope of his authority
6. Government is estopped from claiming the land
v. SC’s Estoppel
1. Make a false representation or conceal a material fact
2. Expectation that the conduct or statement or activity will be relied upon by someone else
3. Must have actual or constructive knowledge of the true facts
4. Estopped party must have no knowledge
5. Must reasonably rely
6. and must rely to his or her detriment.
vi. Laches v. Estoppel:
1. “Laches applies when plaintiff unreasonably delays in pursuing a claim and the defendant reasonably relies on the delay to his detriment”
2. “Estoppel assumes plaintiff made representations on which the other party relied.”
vii. Equitable estoppel is purely a remedial device which, if applicable, precludes equitable relief and relegates plaintiff instead to legal remedies
1. Normally, plaintiff’s cause of action is still alive
viii. Promissory estoppel is a substantive cause of action which permits foreseeable reliance to substitute consideration and thereby supplies the basis for a breach of contract action