REMEDIES

PART I: TORT REMEDIES

I. DAMAGESA. COMPENSATORY DAMAES

1. Standard remedy is money damagesIn tort cases, where the plaintiff has suffered a loss or injury, an award of money damages is the standard and characteristic legal remedy. This award is intended to compensate for the loss and thus put the plaintiff in as good a position as if the injury had not been inflicted.

a. General Damages: General damages compensate for those injuries or losses that a reasonable person would foresee resulting from the wrongful conduct.

b. Special Damages: Award for injuries or losses that could not have been foreseen from the mere occurrence of the wrong- e.g. wage losses in a personal injury case.

2. RequirementsWhether compensatory damages will be awarded, and the measure of any such award, depends in each case upon whether the damages are:a. Causal

Damages will be awarded only for losses caused by the defendant’s breach of a duty. Thus, all damages are limited by a “but for” test

b. ForeseeableThe damages must meet the foreseeability requirements of the particular view of proximate cause being applied.

c. CertainThe law will not award speculative damages; they must be proven with reasonable certainty.

d. Unavoidable (mitigation theory)The law will not allow recovery for any losses that reasonably could have been mitigated or avoided.

B. NOMINAL DAMAGES

In a number of situations, an action can be maintained even though the plaintiff has sustained no actual injury or loss. In such cases, nominal damages may be awarded to establish and vindicate the plaintiff’s rights.

C. PUNITIVE DAMAGESIn addition to compensatory damages, in certain cases an injured party may be awarded a sum of money to punish the defendant for “willful, wanton, or malicious conduct.”1. Intentional Tort- Punitive damages may be awarded

2. Negligence action – punitive damages not usually awarded

3. Due process limitationPunitive damages should not exceed 10 times the compensatory damages.

II. RESTITUTIONARY REMEDIESA. INTRODUCTION

Whereas damages focus on the loss suffered by the plaintiff, resitutionary remedies look to whether the defendant has wrongfully obtained benefit, retention of which would result in the defendant’s unjust enrichment..Restitutionary remedies may be3 either legal or equitable and may be specific or substitutionary (monetary).

B. REPLEVIN (CLAIM AND DELIVERY)Replevin is a legal restitutionary remedy. .Its purpose is the recovery of specific chattels (personal property) wrongfully taken or detained. Replevin has the unique feature of permitting the plaintiff to recover possession of the chattel at the commencement of the action and before trial..However, a judicial hearing is generally required to make prejudgment seizure valid.

C. EJECTIONWhere the defendant is wrongfully in possession of the plaintiff’s real property, the plaintiff may bring an action at law to have possession restored to him.

D. CONSTRUCTIVE TRUSTThe constructive trust is an equitable restitutionary remedy..It is implied in law and imposed by equity courts when the retention of property by the defendant – wrongdoer would result in unjust enrichment..The equity court will construe the situation as if the property were held by the defendant in trust for the plaintiff, with the sole trust obligation being to convey the property to the plaintiff.

1. Requirements for Constructive Trusta. Title held by defendant

1) Tracing: The plaintiff can use the equitable doctrine of tracing to impose a constructive trust on proceeds of wrongfully acquired property.

b. Unjust enrichmentc. Inadequacy of legal remedy

2. Advantages over restitution at lawThe constructive trust has two primary advantages over monetary restitutions.a. Priory over unsecured creditors

When the defendant is insolvent, the constructive trust permits the plaintiff to recover the property itself.

b. Increased value of propertyIf the res has increased in value, the plaintiff will get the advantage of that increase.

3. Defenses to action to impose constructive trusta. Equitable defense

e.g. laches, unclean hands

b. Transfer to BFPEquitable rights, including the right to the constructive trust, are cut off by transfer of legal title to a bona fide purchaser.

E. EQUITABLE LIENAn equitable lien is an equitable charge on property imposed by law to prevent unjust enrichment. Once imposed on the defendant’s property, the lien can be foreclosed, and the property sold to satisfy the plaintiff’s claim.1. Requirements

An equitable lien can be imposed on property to which the defendant holds title and to which the wrongfully obtained property can be traced. Like a constructive trust, an equitable lien gives the plaintiff priority over other creditors with claims to the property that is subject to the equitable lien.

F. INJUNCTIONAn injunction may result in a specific equitable restituionary remedy. Where the legal remedy is inadequate, the court may issue an order commanding the defendant to make restitution.

III. INJUNCTIVE RELIEF IN TORTA. INTRODUCTION

The plaintiff may be able to get an injunction ordering the defendant to refrain from engaging in certain conduct or activities (i.e., a prohibitory injunction)..Sometimes, the plaintiff may be able to get an injunction ordering the defendant to perform a particular act (i.e., a mandatory injunction.)

B. INADEQUACY OF LEGAL REMEDYThe inadequacy of the remedy at law is often a major issue in injunction problems.1. Reasons why legal remedy may be inadequate

a. Money damages inadequateb. Damages are too speculativec. Multiplicity of suits

Where the wrong that has been threatened or committed by the defendant is one that has been threatened on numerous occasions or is continuous in nature, the plaintiff will have to bring many suits at law to recover all of the resulting damages. The remedy at law is thus inadequate.

d. Irreparable injurye. Prospective tort

If the wrong is only threatened by the defendant and not committed, the plaintiff has no legal remedy by way of money damages.

f. Uniqueness

C. FEASIBILITY OF ENFORCING THE DECREEIn addition to inadequacy of the legal remedy, equity requires, as a condition precedent to the granting of relief, that the decree be feasible (“practical”) to enforce.1. Methods of enforcement

A decree requiring a defendant to take affirmative action or prohibiting him from continuing a course of conduct can effectively be enforced by imprisoning the defendant for civil contempt until he complies.

a. Decree of ordering payment of moneyDecrees ordering payment of money are in effect mandatory injunction. However, they are not enforceable by imprisonment for civil contempt because of the constitutional and statutory prohibitions against imprisonment for debt..However alimony and support decrees are not regarded as “debts” within this prohibition.

2. Mandatory vs. Negative Injunctionsa. Negative injunction

A negative (prohibitory) injunction is a court order telling the defendant stop doing something. In other words, it prohibits the defendant from continuing a particular course of conduct.

b. Mandatory injunctionA mandatory injunction is a court order commanding the defendant to do an affirmative act in order to remedy a wrong.1) Framing as negative decree

Where the acts were difficult to supervise, equity courts would not issue a mandatory injunction but would try to accomplish the same result by issuing a negative injunction.

D. BALANCING THE HARDSHIPSTo determine whether in particular case relief should be denied or limited, the equity court will sometimes do a balancing test to make sure that the hardship to the defendant, where relevant, does not greatly outweigh the benefit the plaintiff may get from the relief sought.1. At what stage of the proceedings are equities balanced?

a. Temporary Restraining Order (“TRO”)A TRO is the order sought at the first stage in the plaintiff’s request for injunctive relief. The purpose of the TRO is to maintain the status quo pending the issuance of a preliminary injunction. The TRO may be issued after notice and a hearing or ex parte on a sufficient showing of urgency. However, it becomes effective only after served on the defendant.

b. Preliminary InjunctionA preliminary injunction is issued only after notice and an adversary hearing. The plaintiff must demonstrate:i) Likely success on the merits of the case at trial, andii) Irreparable harm if the injunction is not graded.

Additionally, hardships are balanced and must weight in the plaintiff’s favor.

c. Permanent Injunction

2. Approaches to “Balancing the hardships”a. Majority View

Under the majority view, the court of equity will balance the hardship, and if the harm to the plaintiff is trifling or inconsequential and the hardship to the defendant is substantial, the plaintiff will be left to a remedy of damages.

E. DEFENSES TO SUIT FOR INJUNCTIVE RELIEF1. Laches

a. DoctrineIf a party has unreasonably delayed asserting an equitable claim, and the delay has resulted in prejudice to the other party, equity will hold the claimant guilty of laches and will deny her relief.

b. Comparison with Statute of LimitationsSince laches is an equitable defense, the plaintiff’s suit may be barred by the defense of laches before the legal period of limitations has run. Thus, the period of laches may be shorter than the legal statute of limitations.

2. Unclean Handsa. Doctrine

The party seeking equitable relief must not himself have been guilty of any inequitable or wrongful conduct with respect to the transaction or subject matter of the present suit. Thus, equity will not give relief to a party seeking to enjoin a tortuous act where that party has himself been guilty of fraud, illegality, tortuous conduct, or the like with respect to the same matter.1) Actual trot not required

The essence of this defense is “unfair dealing” –conduct amounting to unfair oppression. It need not be an actual tort.

IV. APPLICATION OF REMEDIES TO SPECIFIC TORTSA. MISAPPROPRIATION OF MONEY

1. DamagesThe injured party may sue for damages for the wrongful appropriation of money in an action for conversion.

2. Restitutionary remediesa. Quasi-Contract

As an alternative legal remedy, the plaintiff may “waive the tort” and seek restitution in quasi-contract (on a common count for money had and received). Here, the plaintiff need only establish that the defendant was unjustly enriched by the misappropriation of the plaintiff’s money.

b. Constructive TrustIt is essential to the imposition of a constructive trust that the stolen money be specifically identified and traced to the possession of the wrongdoer.

c. Equitable Lien

A constructive trust is inappropriate where the misappropriated funds cannot be traced to property, title to which was acquired with the stolen money. However, an equitable lien may be imposed on such property in certain cases to avoid unjust enrichment of the wrongdoer.

B. INJURIES TO PERSONAL PROPERTY1. Destruction of Chattels

a. DamagesFor the tortuous destruction of a chattel, the plaintiff may recover the value of the chattel at the time of destruction, less salvage, plus interest.

2. Injury to ChattelsFor wrongful harm to chattels, the plaintiff may recover damages measured by either the diminution in value of the chattel, or the cost of repair plus loss of use.

3. Dispossession of Chattelsa. Conversion damages for major dispossession

The standard measure of damages for conversion is the market value of the property at the time of the conversion, plus interest from that date.1) Punitive Damages

Punitive damages are recoverable if the conversion results from malicious and outrageous conduct.

b. Restitutionary remedies1) Replevin2) Quasi-Contract3) Constructive Trust4) Equitable Line

c. Mandatory InjunctionIn considering the availability of a mandatory injunction ordering the defendant to return a converted chattel, emphasis is on the adequacy of the legal remedies and other factors.1) Unique chattels and inadequacy of money damages

C. INJURIES OF REAL PROPERTY1. Trespass to Land

a. Simple Tress1) Damages

Even though no physical injury results to the realty from a trespass, the plaintiff may nevertheless recover nominal damages.

2) Injunctive reliefa) Inadequacy of legal remedy

e.g. there would be multiplicity of actions without ever securing the landowner’s exclusive rights of possession.

b. Tress casing severance1) Damages

If the trespass results in a severance from the realty of timber, minerals, or gravel, the standard measure of damages is the diminution in the value of the land. By statute in many states, these damages are trebled exceted in certain cases.

2) Restitutionary Remediesa) Replevin

If the landowner can locate and identify the severed chattel, he may replevy it without payment for any improvements.

b) Restituionary damagesThe landowner may seek restitution of the value of the benefit received by the trespasser.

3) Injunctive relief

c. Trespass causing other injury1) Damages

Damages for acts other than severance are measured by the cost of removal of the debris or obstruction, or by the rental value of the land.

2) Injunctive reliefEquitable relief in the form of a mandatory injunction compelling removal of the debris or obstruction may be available.

d. Trespass effecting ouster1) Ejectment

A party who has been wrongfully excluded from possession of realty has available the common law remedy of ejectment. .This cause of action requires proof of i)the plaintiff’s right to possession and ii) wrongful withholding by the defendant.

2) Mesne Damages

A plaintiff may recover mesne damage, often called rental value, for the period of the land is occupied by the trespasser. Mesne damages may be measured by fair market value or the actual benefit to the defendant.

2. EncroachmentsAn encroachment is a continuing trespass resulting when the defendant i) builds a structure partly on his land and partly on the land of the plaintiff or ii) invade the airspace over the plaintiff’s land.a) Damages

In those jurisdictions where the encroachment is classified as a continuing trespass, damages are measured by the rental value of the occupied land..Where the trespass is classified as permanent, the market value of the land occupied by the structure is the measure of damages.

b) Restituionary remedy – ejectmentc) Injuction

3. Destruction of or injury to realtyThe usual measure of damages is the difference between the value of the land before the injury and the value after the injury.

4. Destruction of or interference with easementsa. Damages

1) DestructionWhere the wrongful conduct of the defendant results in a total destruction of the easement, damages are measured by the diminution in value of the plaintiff’s property to which the easement is attached.

2) InterferenceWhere an easement is merely interfered with, damages are measured by the cost of restoration plus loss of use and expenses. Punitive damages are also recoverable where the defendant’s conduct is “malicious.”

b. Injunctive Relief1) Damages inadequate for loss of property right

Where the interference is continuing, the resulting multiplicity of damages actions also makes the remedy at law inadequate.

5. Waste

Waste may be defined as an act committed by one rightfully in possession of realty that does permanent injury to the land and thus harms the interest of one who may be entitled to possession of the land at a future time.

a. Voluntary waste1) Damages

Damages are measured either by the diminution in value or by the cost of repairs.

2) Injunctive reliefMoney damages may be considered inadequate where injury is to real property.

b. Permissive WastePermissive waste involves acts of omission or neglect by a tenant (i.e. failure to keep the premises in proper repair).1) Damages

Damages are measured by the cost of repairs.

2) Injunctive relief rarely granted.

6. Nuisancesa. Definition

A nuisance may be defined as the use by a person of her own property in such a way as to interfere unreasonably with the use and enjoyment of another’s property.

b. Damages1) Traditional Rule

The standard measure of damages for a continuing nuisance is the value of the loss of use and enjoyment of the property (loss of rental value or loss of profits), plus costs incurred in trying to abate the nuisance, plus an award for any discomfort or annoyance to the occupations.

2) “Permanent Nuisance” DoctrineTo avoid multiplicity of suits, some jurisdiction have developed the “permanent nuisance” doctrine, which allows the plaintiff to recover damages measured by the permanent diminution in value of his property.

c. Injunctive Relief1) Legal remedy inadequate

2) Balancing the hardshipsa) Conditional relief

An intermediate approach attempts to accommodate the interest of both parties by granting relief conditionally. This is the technique ordinarily used today, rather than a flat denial or grant of the decree.

3) “Coming to the nuisance”The fact that the nuisance already exists when the plaintiff moves to it is ordinarily not a defense to the plaintiff’s suit for injunctive relief.

D. INJURIES TO PERSONAL INTERESTS1. Personal Injuries

a. DamagesThe most common and effective remedy for tortuously caused personal injuries is an award of compensatory damages to the plaintiff.

1) Economic Losses (Special damages)As part of any award of compensatory damages, the injured party is entitled to recover all economic losses proximately caused by the injury.a) Medical Expenses: Past and Future expensesb) Loss of Earnings: Past and Future earnings.c) Computing the Award

A court may only award a single, lump-sum judgment, which must consist of the present valuation of all damages the plaintiff may suffer- pass, present, and future.

2) Noneconomic Losses (General damages)In addition to economic losses, past and future, the injured person is entitled to the compensated for noneconomic losses (general damages), past and future.a) Pain and suffering

The plaintiff is entitled to be compensated for past, present, and future pain and discomfort caused by the injury.

b) Emotional anguishIn addition to damages for physical pain and discomfort, the plaintiff is entitled to compensation for mental and emotional anguish resulting from disability or disfigurement.

c) Loss of enjoyment of life

2. Survival of Tort ActionsThe decedent’s estate is permitted to sue for whatever personal injury damages accrued to the decedent up to the time of death.a. Measure of Damages

Most jurisdictions permit the victim’s estate to recover for any medical expenses and loss of earnings during his life time, together with an allowance for the decedent’s pain and suffering up until the time of death.

3. Privacya. Damages

If a tortuous invasion of the right of privacy is shown, the plaintiff may recover substantial damages for mental anguish. In addition, punitive damages may be assessed where there is proof of malice.

b. Injunctive relief effectiveWhere the invasion of privacy is a continuing one, injunctive relief is the most practical and effective remedy.

E. FRAUDThe plaintiff must prove actual injury to establish a fraud cause of action. This normally requires proof of some pecuniary loss. Punitive damages are recoverable where “malice” is shown.1. Damages2. Restitution

a. Rescissionb. Constructive Trust

F. BUSINESS TORTS1. Inducing breach of contract

a. DamagesThe majority apply a tort measure of damages, permitting recovery for all injuries proximately caused, including mental suffering, damage to reputation, and punitive damages if the conduct of the tortfeasor was “willful and malicious.”

2. Interference with prospective advantagea. Damages are speculativeb. Restitution may be appropriate

3. Trade Libel

A trade libel may be defined as a statement disparaging the plaintiff’s business, product, or services for the purpose of persuading or inducing customers or the public not to do business with the plaintiff.a. Special damages (pecuniary loss) required

Once special damages are established, the plaintiff may also recover any consequential damages caused by the libel.

PART 2. CONTRACT REMEDIESV. DAMAGES

A. COMPENSATORY DAMAGESIn contract cases, the underlying purposes of awarding damages is to put the plaintiff in a good a position as if the defendant had performed the contract..Only those damages that are causal, foreseeable, certain, and unavoidable (duty to mitigate) may be recovered.

1. Certaina. Established vs. New Business

The deciding factor has often been whether the breach of duty interferes with an established business that has a history of profits or with a new venture.

VI. RESTITUTIONARY REMEDY – QUASI-CONTRACTA. INTRODUCTION

In quasi-contract there is no agreement; the obligation is imposed by law on the defendant to avoid unjust enrichment.

B. MEASURE OF BENEFIT1. Material Breach of Contract

a. Recovery against breaching partyThe plaintiff is entitled to recover the value of his performance.

2. Unenforceable Contractsa. Goods or services obtained by defendant

Where service has been performed or materials have been furnished to the defendant, the general rule is to measure recovery by the value of the goods and service.

VII. SPECIFIC PERFORMANCEA. EXISTENCE OF CONTRACT

For a court of equity to decree specific performance of a contract, there must of course be a contract between the parties.a. Definite and Certain terms

Specific performance is available as a remedy only where the terms of the contract are sufficiently definite and certain so that the court can determine what it must order each part to do to carry out their agreement.

B. INADEUACY OF LEGAL REMEDYA court may order specific performance only if the legal remedy is inadequate.

VIII. RESCISSIONRescission is a contract remedy that has as its purpose the restoration of the status quo ante.

A. GROUNDS FOR RESCISSIONGrounds for rescission must have occurred at or before the time the contract was entered into, making the contract voidable at the at the option of one of the parties to the contract. The grounds for rescission are:

1. Mistake in formation of contract2. Misrepresentation

IX. FORMATIONA. INTRODUCTION

Formation or “contract revision” is an equitable remedy by which a court modifies or alter a written instrument to make it conform to the parties’ previous understanding or agreement. The remedy is proper where there is a prior valid agreement between the parties, and the writing fails to conform thereto as a result of mistake or fraud.

B. GROUNDS FOR REFORMATION1. Mistake of fact2. Mistake of Law3. Fraud

X. APPLICATION OF REMEDIES TO PARTICULAR TYPES OF CONTRACTSA. CONTRACTS TO BUY AND SELL PERSONAL PROPERTY

1. DamagesNormally damages at law adequate.

2. Specific PerformanceIf the chattel is unique, or damages for breach for the contract are highly speculative, a contract for the sale of personal property may be specifically enforced.

B. CONTRACTS TO BUY AND SELL REAL PROPERTY1. Damages

a. Seller’s breach1) Out of pocket loss

The traditional common law rule limited the buyer to a recovery of his out of pocket expenses (e.g. down payment, escrow expenses).

2) Benefit of BargainOther jurisdiction permit the buyer to recover the difference between the contract price and the market value of the property on the date set for performance.

b. Buyer’s breachDamages are measured by the difference between the market value of the land and the contract price on the date set for performance..The seller may also recover for additional expenses from resale and for any consequential damages .

2. Specific performanceMoney damages are presumed inadequate because every parcel of land is deemed “unique”.

a. Satisfaction of Conditions1) Partial performance with abatement

Partial performance with abatement or compensation is a doctrine sometimes used in equity when the full performance promised by a party cannot be completed. The court will decree specific performance as to the portion of the contract that can be performed, and will grant compensation or abatement as to the unperformable portion of the contract.

C. CONTRUCTION CONTRACTS1. Damages

a. Owner’s breachWhere the builder sues the owner for breach:1) If the contract is wholly executor, damages are measured by the builder’s

lost profit determined by deducting the cost of performance from the contract price.

2) If the contract is fully performed by the builder, the contract price is the measure of damages.

3) If the contract is partially performed by the builder, damages are measured either by deducting from the contract price the cost of completing the

contract; or by deducting from the contract price the total cost of performance and adding the cost of partial performance.

b. Builder’s breachWhere the owner sues the builder for breach:1) Builder has substantially performed

If the builder has substantially performed, damages are measured by: i) The cost of repair or replacement to bring the building up to

contract specification; orii) Where repair or restoration is not economically feasible, then the

difference in value of the building as build and its value if it had been constructed according to the contract specifications.

2) Builder is in material breachIf the builder has abandoned the contract and is in material breach, damages are measured by what the owner must pay to have construction completed, less anything still owing the builder, plus compensatory for delay.

2. Restitutionary remediesa. Owner’s breach

Where the owner repudiates the contract after partial performance, the builder may elect to rescind the contract and sue in quasi-contract for the value of the benefit conferred.

D. PERSONAL SERVICES CONTRACTS1. Damages

a. Employee’s BreachWhere the employer sues the employee for breach of the employment contract, the measure of damage is the cost of obtaining services equivalent to those promised by the breaching employee.]

b. Employer’s BreachThe general rule permits the employee to recover the total wages due or promised, less the amount earned or that could have been earned during that period of time.

2. Specific PerformanceIf the services are unique, monetary damages cannot replace them and the remedy at law would be inadequate. As a general rule, decrees of specific performance of

personal service contracts are not feasible to enforce because equity cannot force a person to work for someone else.a. Negative Covenants

Courts of equity may specifically enforce the employee’s promise not to work for anyone else during the term of the employment by enjoining the employee from accepting other employment.

3. Covenant Not to Competea. Damages

The employer is generally restricted to an action at law for damages

b. Injunctive reliefWhere damages are not adequate (e.g., the services are unique), equity will enjoin breach of a covenant not to compete provided the restriction is reasonable.