Equities and Remedies Outline
Chapter 1: Introduction
1. The Role of Remedies
a. The two most common remedies are
i. Judgments
ii. Orders
b. Remedies gives meaning to obligations imposed by substantive law
2. Classifying Remedies (Brief Overview)
a. Compensatory Remedies: compensate P for harm they have suffered
i. Compensatory damages: sum of money designed to make P as well off as he would have been if he never had been wronged.
b. Preventative Remedies: designed to prevent harm before it happens so issues of compensation don’t arise
i. Coercive Remedies:
1. Injunctions: court order requiring litigants to do or refrain from doing some specific thing.
2. Specific Performance Decree: orders D to perform their K (this is a specialized form of injunction).
ii. Declatory Remedies: these remedies authoritatively resolve disputes about the parties’ rights, but do not end in a direct order to D.
1. Prevent harm to litigants by resolving uncertainty about their rights before either side has been harmed by erroneously relying on its own view of the matter
2. Declatory Judgments
c. Restitutionary Remedies: restore to P all that D gained at P’s expense
i. Sometimes restitutionary remedies award to P the profits D earned by conscious wrongdoing even if those profits exceed P’s damages
ii. Traditionally administered through a variety of devices: quasi-K, constructive trust, equitable lien, accounting for profits, recission, and subrogation.
d. Punitive Remedies: designed to punish wrongdoers
i. Punitive damages—in civil cases
ii. Criminal Punishment—in criminal cases
e. Ancillary Remedies: designed in aid of other remedies
i. P’s court costs & Attorney’s fees
ii. A way to enforce the primary remedy against a recalcitrant D or securing the possibility of later enforcement. i.e. punishment for contempt is ancillary to all remedies that end in $ judgments.
iii. When D doesn’t voluntarily pay, the means of collecting the $ are: execution & garnishment
1. Writ of Execution: sheriff seizes D’s property, sells it, and then uses the proceeds to pay P’s judgment
2. Garnishment: court orders people who owe $ to D to pay P instead.
3. Substitutionary and Specific Remedies
a. Substitutionary Remedies: P suffers harm and receives sum of $
i. Includes compensatory damages, attorneys fees, restitution of the money value of D’s gain, and punitive damages
b. Specific Remedies: seeks to prevent harm, or undo it, rather than let it happen and compensate for it.
i. Seek to avoid the wrong
ii. Aspire to prevent the harm or undue it
iii. Prevent harm to P, repair the harm in kind, restore the specific thing P lost
iv. Include: injunctions, specific performance of K’s, restitution of specific property, restitution of a specific sum of $
v. Example: Consider remedies for sale of defective goods
1. P’s substitutionary remedy is damages, measured by the difference between the value of goods as promised and the value of goods as delivered.
2. P’s specific remedy is specific performance or cancellation. Specific performance gives the P goods that conform to the K in exchange for his payment of price. Cancellation gives him a full refund.
a. Thus, this example evidences the hallmark of substitutionary relief:
3. P who gets damages gets neither what he started with (his money, nor what he was promised—i.e. the goods as promised). Instead he gets defective goods and money to compensate for the defect.
4. The sum of money P receives is based on the fact-finders valuation of loss
vi. Specific performance aspires to avoid both of these by giving P the very thing he lost if that is what he wants.
4. Legal and Equitable Remedies
a. Legal remedies: Damages (compensatory and punitive)
i. Most are substitutionary
b. Equitable Remedies: injunctions, specific performance, and receivorships
i. Most are specific
5. Rights and Remedies
a. Remedies do not exist in isolation, but are bound with rights
b. The nature of the legal availability of a remedy is clearly tied to the substantive rights
c. The content of the remedy will be strongly influenced by the nature of interest that comprise the right
d. While remedies will follow the law, the law will provide appropriate remedies to protect the right
Chapter 2: Compensatory Damages
1. The Purpose of Compensatory Damages
a. We let the harm happen, then compensate the P by giving him $
b. Considered a Substitutionary remedy
i. We substitute money in exchange for the P’s rightful position
c. The fundamental principle is to restore the injured party as nearly as possible to the position he would have been in but for the wrong
2. The Different Measures of Damages
a. Expectancy Interest
i. Refers to the fulfillment of an aggrieved party’s expectancy of gain if the bargain to which he was a party had been carried out and performed.
b. Reliance Interest
i. Refers to the loss or detriment caused by the legal wrong of another
ii. Seeks to undue the loss or detriment by giving the P a sum of money equal to the loss or detriment sustains
iii. Reliance can be recovered in its own rights or as an alternative to an expectancy or restitutionary recovery
c. Restitutionary Interest
i. Frequently Treated as a Form of Compensatory Damages
ii. Refers to the restoration, return, or transfer to the P of benefits received by the D due to or arising from the P’s performance or efforts.
iii. This interest is not compensatory, in the sense that it does not seek to compensate for the loss.
1. Rather, it seeks to recover a benefit unjustly held by another.
d. General Damages v. Special or Consequential Damages
i. General Damages: Are those that flow necessarily and inherently form the wrong
1. Follow inevitably from the harm
ii. Special Damages: Are all other damages that are caused by the wrong
1. Are not presumed to be inevitable, rather, the casual relationship between the loss and the wrong must be demonstrated by the Plaintiff
iii. Importance of the Distinction
1. The Causation proof requirement imposes distinct requirement for special damages
2. Mitigation
a. Special Damages must be mitigated
3. Some recoveries are limited only to general damages
a. Breach of promise to pay money
e. Economic v. Non-economic Damages
i. Economic: Are generally objectively verifiable money losses
ii. Non-Economic: Are generally subjective and non-verifiable
1. Pain and suffering,
v. Various evidence:
1. Price quotes, expert appraisals, P’s cost to repair or replace, book value, capitalized earnings, ect.
2. If there are two or more reasonable indicia of market value, books says: “D is usually entitled to have P made whole in the least expensive way”
v. When is the Market an Inadequate Computation of Value
1. Special purpose property which has no Value
2. Deviate from market convention when the market is substantially inadequate to value
b. Notes on Value
i. The usual measure of damages is the FMV, and NOT the value to the P.
ii. The P is entitled to be made whole, but the D is entitled for P to be made whole in the least expensive way.
1. Helen B. Moran: P’s barge was sunk in a collision with a navy vessel. The collision occurred during WWII when barges could not be bought at any price. P’s spent $7,000 to raise the barge and $43,000 to repair it. Govt argued that the barged only worth only $16,000. Govt conceded it was liable for $7,000 to raise barge.
a. RULE: Property damages are based on FMV. Plaintiff is entitled to be made whole, but defendant is usually entitled to have plaintiff made whole in the least expensive way.
b. Options for being made whole in least expensive way—the cost of repair or the value of the barge, whichever was less.
i. Value was to be determined by the mkt value of the barge, the cost of building a replacement, or the capitalized value of the barge’s earnings, whichever was least.
c. Exceptional Cases that Deviate from the Market Value Convention
i. We deviate from FMV only when
1. It is unascertainable, or
a. There is no functioning market
2. When its application would result in manifest injustice to the owner or public.
a. The market would be substantially under-compensatory
ii. Alternatives to FMV include: If there is no FMV use: (whichever is less)
1. Cost of repair or replacement
2. Capitalized future earnings: what sum of money must be invested to produce a stream of income equal to the income that would have been produced by the facility over its remaining useful life.
3. Certain substitute facilities in takings cases (FN 12, page 20).
a. Roads and Sewers
iii. Trinity Church (charitable-use property).
1. Special Use doctrine – There is no market value for old churches in Boston – So church argued for repair measures.
2. Special opportunities for proof of value are allowed where it is felt that there is no market value.
iv. In a number of situations involving special purpose property (i.e. property of nonprofit, charitable, or religious organizations), the following measure of damages have been allowed:
