LEGAL & EQUITABLE REMEDIES
Final Exam Outline – Spring 2009
I. Overview (Chapter 1)
1. Substitutionary Remedies – give P money in exchange for an otherwise non-compensable loss. Ex. Suppose that P loses an arm in an auto accident. Since a court cannot order D to replace the arm, it instead orders the defendant to pay P money to compensate him for lost wages, medical expenses and pain and suffering associated with the loss of the arm.
2. Specific Remedies – give P the specific item sought. Ex, when P’s ex-husband makes off with her family heirloom (e.g., bible), specific relief might come in the form of a court order requiring the ex to return the bible.
3. Damages Remedies – damage remedies can take a variety of forms including nominal, statutory, liquidated or compensatory. Ex. nominal damages are designed to vindicate P’s right by making a legal declaration of those rights and providing P with “nominal” compensation. Compensatory damages are supposed to repay P for any losses she has suffered, making her whole, in so much as the law is capable of doing so. Liquidated and statutory damages represent efforts to tell courts how much to award or how to calculate a damage award.
4. Coercive Remedies – coercive remedies involve in personam court orders that are enforceable through the remedy of “contempt of court.” “Contempt of court” is an extremely powerful remedy by which a court can impose jail sentences or fines in order to punish a D for violating a court order, to coerce a D to obey the order, or to compensate the P for violation of the order.
5. Declaratory Remedies – the function of declaratory relief is to provide a judicial declaration regarding the rights, obligations or responsibilities of the parties relating to a particular situation (e.g., declaration that P’s picketing activities are protected by free speech principles and that an ordinance that purports to restrict those activities is unconst).
6. Restitutionary Remedies – restitution is a remedy that is imposed to prevent unjust enrichment. It awards a P the amt that D gained as a result of the wrong, not the amt that the P lost (as in damages). Restitution includes such remedies as quasi-contract, constructive trust, equitable lien, subrogation, rescission, reformation, accounting for profits, ejectment and replevin.
II. Equity and Equitable Remedies (Chapter 2)
A. Historical Perspective
1. Equity courts began in England when the Chancellor issued writs; Two writs are still performed today:
a. writ of habeas corpus
b. writ of certiori
2. Equity courts had no juries, heavy on fact investigation, and chancellor made all the decisions.
B. Equitable Maxims:
1. He who comes into equity must come with clean hands
2. He who seeks equity must do equity
3. Equity does not suffer a wrong to go without a remedy
4. Equity regards as done what ought to have been done
5. Equitable relief is not available to one who has an adequate remedy at law
6. Equity aids the vigilant, not those who slumber on their rights
7. Equity regards substance rather than form
8. Equity acts in personam
9. Equity follows the law
C. Equitable Remedies Today – Standards for the Availability of Equitable Relief
1. Conscience and Equity – equitable remedies are only available when “equity” and “conscience” demand them.
2. Equitable Remedies are Granted in Personam – when a court renders an “in personam” judgment, it orders the defendant to do, or refrain from doing, some act. A defendant who refuses to comply can be held in contempt and subjected to prison or fine.
3. Inadequacy of Legal Remedy/Irreparable Harm – Another equitable maxim that survives today is the principle that equitable relief is not available except when plaintiff’s remedy is inadequate.
a. Fortner v. Wilson – P is seeking an equitable remedy in the form of specific performance b/c of the dealer’s refusal to deliver a car to the buyer. In most instances, where damages are capable of being calculated there is an adequate remedy at law, thus no equitable remedy is available in this case. The court ordered D to pay the difference between what P would have paid for the original car and what he will have to pay for a replacement car.
w “[U]nless there is something unique in the article sold, or something about it that would prevent money damages from giving full relief, specific performance will not be granted.”
w The rule which really controls in this case is that in the sale of personal prop, equity will not force specific performance where plaintiff had an adequate remedy at law.”
b. The Sale of Land – Real property is considered unique, so specific performance is often the relief granted when a contract for real property is breached.
w Schiller v. Miller – During the parties’ lengthy personal relationship, Miller purchased jewelry which was kept in the safe in the parties’ home. Trial court granted a TRO enjoining Schiller from disposing of the prop. The ct affirmed the trail ct’s granting of the injunction b/c there was no adequate remedy at law. There was no adequate remedy at law b/c the pieces of jewelry are unique and incapable of precise valuation. In other words, it would be very difficult to determine the value of any damages that might be awarded.
4. Equitable Relief is Discretionary – As at CL, equitable relief remains inherently discretionary. A court may deny equitable relief even though P’s legal remedy is inadequate.
a. Goerg v. Animal Defense League – “Even though the presence of the proposed animal shelter may result in some annoyance to appellants, their remedy is not by way of injunction but they are relegated to an action for damages.” In this case, although damages would be very difficult to calculate, the judge exercised his discretion by not awarding equitable relief in the form of an injunction against building the shelter.
b. Grossman v. Wegman’s Food Markets, Inc. – Plaintiffs appeal from a judgment dismissing their action to compel defendant by means of specific performance to continue to occupy and operate leased premises as a retail grocery supermarket.
w “Such relief should not be granted in this case, however, because courts of equity are reluctant to grant specific performance which would require judicial supervision over a long period of time.”
w Generally speaking, courts do not want to grant equitable relief which would in turn require the court to supervise the performance of the contract for a long period of time. It is a matter of public policy, i.e., it would waste monetary and time resources to have the court monitor performance of a contract.
D. Equitable Defenses – A number of CL defenses are used today to prevent an award of equitable relief. The major defenses are “unclean hands”, unconscionability, laches, and estoppel. These doctrines are grounded in equitable principles.
1. Unclean Hands Doctrine – the doctrine of “unclean hands” states that “he who comes to equity must come with clean hands.” Equity will deny relief to a P who comes with “unclean hands.” The “unclean hands” doctrine has always been subject to exceptions which allow courts to grant relief notwithstanding the presence of “unclean hands.”
a. Sheridan v. Sheridan –whether marital property acquired with fund obtained illicitly and not reported for fed and state taxing purposes is subject to equitable distribution. The court held that “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.” Though the wife was not personally involved in the oil-skimming scam, she was complicit in that she knew the funds were illegally acquired.
w “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)
ntained by Π. FL recognizes the right of an upland owner to an unobstructed view of adjoining waters. ∆ filed suit 10 yrs after he acquired title to the land. ∆ bought the land at a time when the structures had been there for 25 yrs.
w Test of Laches – “Whether there has been a delay which has resulted in the injury, embarrassment, or disadvantage of any person, but particularly the persons against whom relief is sought”
w The remedy of a mandatory injunction for removal of encroachment is a drastic one and should be granted only cautiously and sparingly, depending in each controversy upon circumstances particular to it. Court decides to overturn the injunction
c. Nahn v. Soffer –this case involved an option contract. ∆ accepted the option and then delayed closing on the property for over two years. Π wanted the property back.The court finds that the doctrine of laches barred the claim and Πs keep the property.
w “In determining whether the doctrine of laches applies in a particular case, an examination is made of ‘the length of delay, the reasons therefore, how the delay affected the other party, and the overall fairness in permitting the assertion of the claim.’”
4. Estoppel – powerful defense that can be used both offensively and defensively. At its core, estoppel has a large element of misrepresentation in a broad sense. The keys to estoppel are (1) a knowing misrepresentation, and (2) detrimental reliance on that misrepresentation.
a. Restatement (2nd) Contracts §90 – “A promise which the promisor should reasonable expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does not induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.”
b. 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.
c. Feinberg v. Pfeiffer Co – Π’s ER wants to reward her yrs of service by giving her retirement pay—promissory estoppel. New CEO tried to cut off retirement paymt. Π sued.Quasi-K theory. The promise to provide the pension in and of itself was not sufficient to support a K b/c there was no consideration. However, once she changed her position to her detriment, there is consideration to enforce the K.
w “One who has led another to act in reasonable reliance on his representations of fact cannot afterwards in litigation b/w the two deny the truth of the representations and some cts have sought to apply this principle to the formation of Ks, where, relying on a gratuitous promise, the promisee has suffered detriment.”
w “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.” Π relied on ∆’s promise to pay her pension so ∆ has to pay