CA Bar- Remedies- Breeden Attack Sheet (Barbri)

REMEDIES (BREEDEN ATTACK SHEET) I. II. ALWAYS LOOK FIRST TO LEGAL REMEDIES THEN EQUITABLE REMEDIES FIRST, EVALUATE THE ADEQUACY OF LEGAL REMEDIES: A. B. III. Damages ($) Legal Restitution (Money, Replevin, or Ejectment) ARE LEGAL REMEDIES INADEQUATE? HOW ABOUT EQUITABLE REMEDIES: A. B. C. IV. Equitable Restitution (Constructive Trust or Equitable Lien) Torts: Injunction Contracts: Specific Performance or Special Remedy (Rescission or Reformation) ANALYZING TORT PROBLEMS A. Damages: 1. Compensatory/Actual Damages (4 requirements) a. b. c. d. e. f. g. Causation (actual cause/ “but for” test) Foreseeability (proximate cause) Certainty (not too speculative/past losses need more certainty/”historical record” of old business/ “all or nothing” rule- more likely to happen than not) Mitigation (P must take reasonable steps) NOTE: Form of judgment payment: must be a single lump sum payment discounted to present value and no inflation NOTE: Economic losses (special damages, i.e., lost earnings) must have sufficient certainty/ non-economic losses (general damages, i.e., pain and suffering) do not need, jury has more of a free hand BAR ANSWER: “P is entitled to compensatory damages to put him/her in the position he/she would have been in had this wrong and resulting injury not occurred. On these facts…(include common sense fact application here)” Damages (awarded when P can prove no actual damages/can be combined with punitive damages) Need compensatory or nominal damages first (restitution in certain cases) To get, fault must be more than just negligence Amount awarded will be in proportion to actual damages (limit of around 9x unless extreme) Wealthy Ds pay more than poor Ds 2. 3. Nominal Punitive Damages (punish D) (3 Rules) a. b. c. d. B. Legal Restitution (D should not be unjustly enriched) 1. Money Difference from Legal Damages because these are based on benefit to D Cannot be awarded both compensatory and restitutionary damages (mention both on BAR and go with larger of the two) Punitive damages may be attached ONLY if tort action Replevin (recovery of specific personal property) a. 2 part test: P has right to possession, BUT there is a wrongful withholding by D b. “Timing”: P can recover chattel before trial, but will have to post bond/ D can keep the chattel until after trial but has to post a redelivery bond c. Sheriff repossesses property for P d. Almost always coupled with $ damages for lost use or benefit during the time of detention Ejectment (recovery of specific real property) a. Same test as replevin except real property instead of personal property b. Ejectment available ONLY against D who has possession of property c. Sheriff ejects D from property d. Almost always coupled with $ damages for lost use or benefit during wrongful withholding a. b. c. 2. 3. C. Equitable Restitution 1. 2. Constructive Trust (court imposed obligation on D to convey specific property to P) a. b. a. b. c. d. D has title and serves as “trustee” Money damages would not be sufficient because property is unique D has title and property will be subject to an immediate court-directed sale Monies go to P If proceeds less than fair market value of property when it was taken, a deficiency judgment will be issued for the difference and can be used against D’s other assets Money damages would not be sufficient because the D is insolvent Tracing allowed BFP prevails over P; P prevails over unsecured creditors If original property value goes UP, go with constructive trust; if it goes DOWN, go with equitable lien If D’s property cannot be traced solely to P’s property, ONLY equitable lien is available Equitable Lien (court imposed security interest in specific property owned by D) 3. General Equitable Restitution Notes: a. b. c. d. D. Injunction 1. 2. Two types: Process: a. b. c. negative injunction (stop it) OR mandatory injunction (do something) Temporary Restraining Order (TRO) granted (notice and adversarial proceeding not required but encouraged) for up to 10 days while the court is deciding on a Temporary Injunction (same 2 part test) Temporary Injunction is granted pending a trial on the merits of a Permanent Injunction In issue is whether P can obtain temporary injunctive relief. To do so, P must meet a two-part test: (i) Irreparable injury (discuss facts in time-frame context) AND (ii) Likelihood of success (discuss the “probability”…impose bond requirement)” 3. Permanent injunction: (go with this on BAR if in doubt) 5 PART TEST (“I Put Five Bucks Down”): a. INADEQUATE legal remedies: how so? i. Money Damages may not be adequate because they are too speculative OR D is insolvent OR there is irreparable injury (if property is unique such as land) OR multiple suits are necessary (prior history of litigation of this action) ii. Replevin may be inadequate because Sheriff may not be able to recover property OR D may file a redelivery bond (and then run off with or destroy property in the interim) iii. Ejectment may be inadequate because the Sheriff may refuse to act (structure slightly encroaches P’s property/ Sheriff is not going to tear it down) 1 b. c. d. e. Is a PROPERY right involved? i. Traditional view: equitable relief only where protectable property right ii. Modern view: Property interest will suffice iii. Use both views on BAR Is an injunctive decree FEASIBLE? i. Negative Injunction (stop it): No enforcement problems ii. Mandatory Injunction (do something): 1. May be enforcement problems due to the difficulty of supervision OR concern with effectively ensuring compliance 2. If act involves great taste, skill, or judgment, injunction will be DENIED 3. If a series of acts over period of time, usually DENIED 4. Out of state act: resident (GRANTED); nonresident (DENIED) Should the hardships be BALANCED? (On BAR when tort is nuisance or trespass to land); 4 RULES: i. Must be gross disparity between detriment and benefit ii. Even then, NO balancing if D’s conduct was WILLFUL (ex: if encroachment innocent (including negligent), court will balance but lean toward P) iii. If you decide to balance hardships, also consider awarding P money damages instead of ripping the building down iv. Hardship to PUBLIC is also taken into account (ex: factory causes noise, but close down would cost 500 jobs, award money damages to P instead) Are there DEFENSES? i. Laches 1. “Running of a period of time” defense 2. SOL focuses on passage of time, Laches focuses on effect of passage of time 3. Laches time period NEVER greater than SOL 4. 3 Laches rules: (1) clock starts when P knows of injury; (2) P’s right to relief cut off when it has been BOTH unreasonable and prejudicial to D; and (3) if laches applies, consider giving P money instead (not fair to give P a gift of land) ii. Unclean Hands 1. “Bad guy” P fact pattern/ 2. Defense available ONLY if P’s improper conduct related to lawsuit iii. Freedom of Speech 1. 1st Amendment rule against Prior Restraint (see exceptions for national security, and for trade libel, particularly in conjunction with another business tort) 2. If tort is defamation or a privacy publication branch tort (false light, private facts), best BAR answer is that the injunction is DENIED based on free speech grounds (assuming D is not guilty) iv. Impossibility (impossible for D to carry out terms of Injunction) v. Criminal Act 1. “Equity will not enjoin a crime” (exceptions for public/private nuisance and partial exception for crime that also constitutes a tort” Parties Employees and agents acting with notice Third persons acting with notice If injunction is one that would no longer be granted (law or facts changed), it still has to be followed unless it modified OR dissolved Civil contempt: money fine OR imprisonment (D holds the key/ can get out by agreeing to comply) Criminal contempt: money fine OR imprisonment (D cannot get out/ remain for set time) There is NO contempt for not complying with a money judgment (except for alimony or child supp) 4. 5. 6. 7. V. Who will be bound by injunction? a. b. c. a. a. b. c. What about an erroneous injunction? What if the injunction is not obeyed? (Contempt) Injunctive relief is almost always coupled with money damages (for injuries incurred in the time period prior to obtaining the injunction) ANALYZING CONTRACT PROBLEMS A. Damages: 1. 2. 3. 4. Compensatory Damages (same as torts analysis and rules) (SAKI’S OUTLINE DOES NOT MENTION THIS…HOW DOES COMPENSATORY DIFFER FROM EXPECTATION DAMAGES) Expectation Damages (This is the benefit P expected to get out of contract/ Expectation damages look to the future) Consequential Damages (These are related damages foreseeable at contract formation) (reputation fact pattern) Liquidated Damages a. b. c. d. e. These are damages specified in contract To be valid (2 part test): damages must have been VERY DIFFICULT to have ascertained at time of contract formation AND this clause was a REASONABLE forecast of what they would be If valid, no other damages available If invalid, only actual damages available Contract cannot state that P can get EITHER actual or liquidated damages money, replevin, and ejectment) (ejectment rare in actions on contracts) B. C. D. Legal Restitution: (same as torts: Equitable Restitution (same as torts: 1. CONTRACT is valid a. b. constructive trust and equitable lien) Specific Performance (6 part checklist to get this remedy) (Cha Cha Is My Favorite Dance!) P must be able to show the contract is valid P must be able to show the contract terms with more certainty and definiteness than would be the action for money damages at law. Otherwise, it would be too difficult to enforce P must be able to show his/her contract conditions have been fulfilled (already performed, ready and able to perform, or excused from performing) Two favorite BAR exam fact patterns for conditions: Deficiencies Fact Pattern (Seller cannot deliver the agreed upon consideration) 1. If SELLER is P: CAN enforce contract is defect minor; CANNOT if defect major (unless seller can cure the defect before or at closing) 2. If BUYER is P: CAN enforce contract EVEN IF defect is major; CANNOT if defect is very major 3. If you give P specific performance despite defect, you MUST include a sentence noting that court will LOWER purchase price to allow for defect: called an ABATEMENT in purchase price ii. Time of the Essence Fact Pattern (Buyer does not meet condition of timely performance) 1. Will probably have a land sale contract with a time of the essence clause that provides for forfeiture of all performance rendered to date if not timely; Buyer will probably have made a down payment and now the Seller wants to keep BOTH the land AND the down payment 2. Equity ABHORS forfeitures (always in BAR model answer) 3. Court will look to these factors in deciding if it should AVOID the harsh result of a forfeiture: loss to seller is small; tardiness is minimal; waiver(seller has accepted late payments in past); buyer would suffer undue hardship 4. ON BAR, ALWAYS award specific performance in this instance 5. Mention in answer that under the modern trend, P would get restitutionary relief if specific performance were not granted i. 2. Contract CONDITIONS of P must be satisfied a. b. 2 6. HOWEVER, if buyer has done nothing yet, the time of the essence clause is STRICTLY ENFORCED 3. Are the legal remedies INADEQUATE? a. b. Same analysis as Torts with regards to money, replevin, and Ejectment FAVORITE BAR ISSUE: Uniqueness Problem (if property is unique, money damages would not allow him to purchase another) i. Real Property 1. General Rule: Land IS unique (even if BAR tries to make each parcel identical) 2. Seller’s Rule: seller of land CAN get specific performance as well even though money is not unique ii. Personal Property 1. General Rule: Personal property IS NOT unique 2. Three Exceptions: (one of a kind or very rare; personal significance to buyer; circumstances make chattel unique, such as OPEC reduces oil production, making gas unique) iii. BIG DIFFERENCE: Uniqueness tested at time of litigation NOT formation FAVORITE BAR ISSUE: Liquidated damages clauses i. General rule: A liquidated damages clause does NOT make money damages adequate. Specific performance is still available. ii. EXCEPTION: where clause provides that the liquidated damages are to be the ONLY remedy Determine that you have a Mutuality fact pattern: D argues that P should not be able to enforce the contract against him because he could not enforce it against P (ex: 17 year old enters contract. He is not of age to make contract, but as long as he is going to perform, no problem) (kid can enforce but other party cannot) Set out the rule: Court will reject the mutuality argument if it feels secure that P WILL perform Grand specific performance: In your answer, have a decree provide for simultaneous performance Is there jurisdiction over parties or property? Watch out for land outside state. Is there too much supervision by court? Personal services contracts ARE NOT specifically enforceable (enforcement problem AND involuntary servitude) Watch out for contract where employee tries to breach and work for competitor Contract Defenses i. Mistake ii. Misrepresentation iii. Statute of Frauds (fact pattern usually involved oral land contract): Rule: if one renders valuable part performance (whole/partial payment, possession, valuable improvements, or valuable services-modern trend) then will take case out of SOF and specific performance will be granted. (need any 2 of first 3 types of valuable part performance to win) Equitable Defenses i. Unclean Hands (same as torts) ii. Laches (same as torts) iii. Unconscionability 1. More than just a “bad deal”; MUST also be some “smell factor” facts that brought it about 2. This is tested at time of contract FORMATION Equitable Conversion i. When land sale contract entered into, equitable conversion occurs upon execution ii. Property interests are switched: buyer gets real property interest (land) and seller gets personal property interest (money) iii. BAR tricks: fact pattern will have a problem occur between contract execution and the closing (ex: death and damage/destruction) iv. Risk of loss: majority rule says risk is on the buyer; minority rule says risk is on the seller Covenants Not to Compete i. Covenant must protect LEGITIMATE interest of person in whose favor it runs ii. Services must be UNIQUE iii. Ordinary auto mechanic: NOT ALLOWED iv. General manger of car dealership: ALLOWED v. Covenant must be reasonable in BOTH its geographical and durational scope 2 STEP ANALYSIS (Good Dog): c. 4. Is there MUTUALITY of obligation? 3 steps for BAR: a. b. c. 5. Is a specific performance FEASIBLE? a. b. c. d. 6. DEFENSES? a. b. 7. TWO PROBLEM AREAS FOR SPECIFIC PERFORMANCE (not part of checklist) a. b. E. Rescission (original contract considered voidable and rescinded) 1. Determine if there are GROUNDS for rescission (mistake, misrepresentation, coercion, undue influence, lack of capacity, failure of consideration, or illegality) (ALL relate to contract formation) a. Mistake i. Mutual mistake: if material fact, rescission GRANTED; if collateral fact, rescission DENIED ii. Unilateral mistake: Rescission DENIED except when non-mistaken party knows of SHOULD HAVE KNOWN of mistake (mistaken party would suffer undue hardship if no rescission) b. Misrepresentation (Rescission GRANTED/ P must show it actually relied on misrepresentation) 2. Determine if there are valid DEFENSES Unclean Hands Laches NOT negligence of P (not a good defense) NOTE: if P sues for damages first, rescission NOT allowed; if P sues for rescission first, damages ARE allowed (can sue for both at same time but must elect preferred remedy before judgment rendered) NOTE: if contract is rescinded, P can get compensated for any partial performance or payments via restitution 3 STEP ANALYSIS (Very Good Dog: a. b. c. 3. 4. F. Reformation (Changes written agreement to conform with parties’ original understanding) 1. 2. a. b. 3. Determine if there are is a VALID contract Determine if there are GROUNDS for reformation (mistake or misrepresentation) Mistake (Mutual mistake= reformation GRANTED; Unilateral mistake=reformation DENIED, unless non-mistaken party knows of mistake (fraud) but NOT SHOULD HAVE KNOWN as in rescission) Misrepresentation (reformation GRANTED; available for both innocent and intentional misrepresentation/ rewriting reflects expressed intent of parties) Unclean Hands and Laches (same as rescission) NONDEFENSES will NOT work (negligence of P/ SOF/ parole evidence rule) CANNOT do reformation if it adversely affects rights of subsequent BFP Determine if there are any valid DEFENSES a. b. c. 3