Remedies outline

2 goals: 1) What remedy to choose 2) and once chosen how to measure it?

What does the court do for a successful plaintiff?

Grant specific relief usually specific performance or an injunction
in personam remedy operates against the Ds person
Award substitutionary relief or money damages
Award= adjudicate, decide after consideration
in rem operate against the Ds property
Award restitution based on defendants gain or unjust enrichment
What court may do to the defendant?
Require D transfer title or possession of property
Order D to do something
Prohibit D from doing something
Direct the D to be confined (contempt) to coerce him to obey any of the above
except to force payment
Enter a money judgment to compensate P, to prevent Ds unjust enrichment, or
to punish D

Equitable versus Legal Remedies

Principle equitable remedies:
Injunction, specific performance, constructive trust- associated to specific
or in personam relief
For judge to grant equitable relief P must show legal remedies
inadequate, without equitable relief will suffer irreparable injury
Major legal or common law remedy-
money damages substitutionary or in rem relief
Differences between equitable and legal remedies

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 No right to jury trial for equitable remedies
Judge will enforce an in personam equitable order by holding the defendant in
contempt; in contrast to the plaintiffs collection of money damages with a
writ of execution, garnishment, and judgment lien.

Tort Remedy Goals

1. Prevent a tort from occurring- injunction
2. Restore the Status Quo- can be done through specific performance, restitution or
restoration for a property tort
3. Compensate the P for Loss- compensation or indemnity principle- can award
damages for Ps physical or mental injury, pain and suffering, lost income, and
loss of property value, etc.
4. Deter Future Torts- market economic analysis stress structuring actual or potential P
damages awards should encourage Ds to take precautionary goals to prevent
future mishaps
5. Establish, Declare, Vindicate Ps Rights- declaratory judgment different than
injunction for it neither commands nor forbids anything
6. Punish wrongdoers- punitive damages for aggravated wrongful act

Remedies goals in Contract

1. Fulfill Plaintiffs expectancy of gain- may consist of specific performance or
money damages if SP not available
2. Special Damages to restore plaintiffs losses and reliance expenditures P incurred
3. Restitution- courts rescission of K or agreement followed by restitution will
restore the plaintiff and the defendant to respective situations prior to the
transaction
4. Punish or deter the D- by granting the plaintiffs expectation and special
damages will deter Ds from breaching Ks. (market economist). A court will
almost never award P punitive damages when a defendant breaches a K.

2
 5. Declare or terminate parties contractual rights or duties- may grant declaratory
judgment either before or after a parties breach

Remedy goals for Unjust Enrichment

1. Restore the benefits D unjustly holds, restitution- primordial concept.
2. Punishment and deterrence- subordinate goals when D has give up benefits she
has unjustly reaped.

Summary of Historical Crap

Common law courts
tort-property actions
1. Specific relief/ restitution of property
Ejectment- to recover possession of real property/land.
Detinue- developed from writ of debt, and to be used against an unfaithful
bailee, let the D either return the chattel or pay plaintiff its value
Replevin- to retrieve Ps personal property from a D.
2. Compensatory Damages- money for harm
Trespass- historically to someones person, to chattel, or to land allowed for damages
Trespass to the case- to compensate the P for injuries ranging from indirect & negligent
injuries to the person to nuisances and various business torts
Trover- for Ds conversion of Ps chattels allowed for compensatory damages
3. Punishment- historically would allow jury to award Ps punitive damages bc of
detestation of act itself
4. Prevention- Common law Courts could not award equitable remedies, had to go
to Court of Chancery (Court of Equity) thus major deficiency- dual courts
5. Declaration of Rights, obligations and status- problem in common law courts, but
could award nominal damages.
Contract Breaches historically-

3
Account- originally Ds breach of fiduciary obligation- fell out of favor cumbersome
procedure for dual lit. in both court systems
Covenant- no covenant if debt is applicable- only for instruments under seal.
Debt- oldest personal action, Ds duty to pay P a certain amount either by contract,
custom (statutory required payment), or record (collect money judgments)
Assumpsit- 2 forms-
special assumpsit- Ps action on a simple express contract supported by consideration,
whether executory or partially executed.
General assumpsit- used common counts, including work done or quantum meruit used by
contemporary courts to develop the remedy of legal restitution and concept of quasi
contract.
Chancery Court- used if common law court fell short, equitable court
Granted equitable relief- such as declaratory, uses and trusts, as well as mortgages
Enforcing a lien still considered to be equitable matter; separate equitable defenses such
as Laches and unclean hands evolved.
Specific performance and injunctions- decisions were not necessarily precedent thus
criticized for being unpredictable and vague
All reformed by Field Code in 1848; led to
FRCP: Today only one action a Civil Action R.2 FRCP

Chap 2- Money Damages

Injured P principal civil remedy is money damages; performs two functions 1) a
plaintiff is compensated for loss and 2) damages deter particular defendant and other
potential defendants from incurring future liability, thus they take reasonable
precautions.
Damage determinations require a lay jury because states and Fed Const. require it
7th Amendment: In Suits at common law, where the value in controversy shall exceed
twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury,

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shall be otherwise re-examined in any Court of the United States, than according to the
rules of the common law--- historical reasons for jury- prevent tyranny etc.

Very few cases even heard by juries bc they settle

Rules encourage settlement- FRCP pretrial conference 16(A)(5) and
FRE 408 parties settlement offers and negotiations not admissible.
FRCP 68 any litigant that rejects a settlement offer and receives a less favorable
judgment pay other sides attorney fees.
Most jury trial parties share four common characteristics-
Intransigent Party- unwilling to agree
Reputation to protect
Outcome is uncertain
Stakes are unusually high
Controversial doctrines:
Pain and suffering
Punitive damages
American Rule requiring each side to pay attorneys fees
Gavcus v Potts (USCA 7th Cir. 1986) p.17.
Stolen silver Coins- compensatory damages and Att Fees
Gavcus brought action against stepfamily for trespass and conversion of her silver coins
from late husband. Jury awarded her special verdict of new locks, alarm and Att Fees
from prior action concerning possessory interest in coins and punitive damages.
DC set aside jury verdict and gave her $1.
C of A affirms DC decision- nominal damages can be awarded when no actual or
substantial injury has been alleged or proved, since law infers some damages from
the trespass also consequential damages can be awarded for actual or substantial
injury to realty. & CD can be recovered for a trespass, since a trespasser is liable for
all injuries which are the natural and proximate result of trespass

5
Trespass can cause mental distress and illness or physical harm. No emotional distress
in Gavcus bc failure to proof to nature extent and causation of ED
Att Fees- recoverable from prior action only if 1). prior litigation was the natural and
proximate result of the subsequent def. wrongful act and 2). involved the P and a third
party.
Punitive damages only if compensatory damages

Dura Pharmaceuticals v Broudo (SCOTUS 2005) p20

Stock fraud- FDA approval, false profits
P brought action against D for stock fraud- governed by statute- Throw complaint out
bc did not even meet Conley requirement of short and plain statement as to provide
the D with fair notice of what the plaintiffs claim is and the grounds upon which it
rests.
Did not show causation that Duras fraud caused an economic loss
Bc price fell after FDA not approved came out but gained back all value within a week.
Sec Ex Act 1934 forbids use of deceptive device in connection with sale of securities
Basic elements of stock fraud:
1. a material misrepresentation ( or omission)
2. scienter, i.e. wrongful state of mind. Or knowledge/intent
3. a connection with the purchase of security
4. reliance or transactional causation
5. economic loss
6. loss causation- causal connection between misrepresentation and loss
Dura argued P did not prove last two elements, SCOTUS agrees says Given the tangle
of factors affecting price, the most logic alone permits us to say I that the higher
purchase price will sometimes play a role in bringing about a future loss. Must chow
causation not simply touch upon
Related to Dura p.118 Randall v Loftsgaarden tax benefits incurred due to capital losses
should not be subtracted from claim

6
Youst v Longo (SC Cali. 1987) p25
I could have been a contender Horse Racing interference
it is well settled law that interference with the chance of winning a contest, such as the
horserace at issue here, usually presents a situation too uncertain upon which to base
tort liability.
P sought Compensatory damages between actual finish (5th) and finish which allegedly
would have occurred but for Ds interference. Punitive of 250K also sought
Did not plead physical personal injury or property damage
RST 774B actual discusses such scenario in comments not sufficient certainty to entitle
P to recover
To speculative to recover Compensatory Damages

Notes case point to some curious cases where some contestants allowed to recover. I.e.
Beauty contest disqualified bc not notified of earlier start time
A railroad breached agreement for delivery thus getting contestant 2nd instead of first
Puzzle contest, answer erroneously marked wrong, given amount equal to odds times
the prize money.
Other speculative claims: Lost chance to survive in malpractice cases
Smith v State Dept of Health and Hospitals (Louisiana SC); x-ray cancer MD no
follow up, man died shown he had 10% chance of life if notified on day of x-ray. So
damages totaled and then only 10%. 3 recognized methods for calculating Lost chance of
survival
1. focus on chance of survival lost due to negligence (used above)
2. Plaintiffs approach- if any chance than MD pays full claim
3. -Adopted by lower court in Smith- percentage more favorable outcome
becomes percentage probability.
Can recover damages for fear of cancer as part of pain and suffering damages if also
liable for Ps physical injuries.

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Medical monitoring
3 sub types- 1) D pays a lump sum to each individual P for future medical attention
2) Ps Mds send monitoring bills to D 3) a Court supervised monitoring program
is sought such as in
Henry v Dow Chemical Co. (Sc Mich 2005) p30
Class action for Dioxin Exposure in Tittabawssee flood plain in Mich.
Court supervised Medical monitoring sought
Court denies as plaintiffs have suffered no actual harm yet; only potential for injury
thus Ps have failed to state a valid negligence claim and grants Sum. Judgment
It is present injury, not fear of an injury in the future, that gives rise to a cause of
action under negligence theory.
Importance of requirement of present physical injury 1) who actually possesses a cause
of action 2) reduces the risk of fraud by setting a minimal threshold 3) would force
Court to compromise judicial power to uncertainty, Our common law jurisprudence
has been guided by a number of prudential principles. Among them has been our
attempt to avoid capricious departures from bedrock legal rules as such tectonic shifts
might produce unforeseen and undesirable consequences
Not emotional distress bc no physical manifestations of such distress
Court not in business of crafting policy in the dark, deference to Legislature already
created the Mich Dept of Env. Quality

Dissent p.39
Plaintiffs physical harm secondary to defendants economic health
Ps claim for med. Monitoring warrants equitable relief- P exposed to dioxin at over 80
times deemed safe
Court has equitable jurisdiction to provide remedy where none exist at law, even if the
parties have not specifically requested an equitable remedy.

8
Proving the amount of damages p.47
Court can easily determine some of Ps damages; i.e. lost wages, medical expenses, the
value of damaged property, expectancy and reliance damages for breach of contract
However some difficult to prove: lost business profit (mind games v western pub.)
Future pecuniary damages hard to calculate
Some compensatory hard to calculate such as Ps pain and suffering or mental anguish
To prove damages first must prove the fact of damages then must prove amount of
damages- however even if damages amount uncertain the tortfeasor, not the P, should
bear the burden of some uncertainty in the amount of damages

Plaintiffs lost capacity to earn (past wages)(aka economic damages)

Washington v Am. Comm. Stores Corp (SC Neb 1976) p48
Jury verdict of 76K arising out of car crash
P , 24, was successful collegiate wrestler and working as adult parole officer at time of
crash. Had a life expectancy of 49.9 years no dispute to permanency of P injuries or that
injuries prevented P from wrestling.
It is well settled law that loss of earning capacity is distinct from loss of wages,
salary, or earnings, is a separate element of damage.
Loss of past earnings is an item of special damage and is specifically pleaded and
proved
Impairment of earning capacity is an item of general damage and proof may be had
under general allegations of injury and damage.
Factors include- Ps age, life expectancy, health, habits, occupation, talents, skill,
experience, training, and industry.
Agree with jury sufficient evid. to find P pursuit of wrestling career valid. Again
general damages thus no specific evid needed to recover.

Childs v US (USDC Georgia 1996) unborn General

9
Lawsuit for wrongful death under the Fed Tort Claims Act- State subs. Law governs
Car crash 3rd passenger, mother and unborn child General die immediately when
struck by postal truck. P bring action under FTCA, D admit liability, and have
stipulated to estate of Debra and General are worth $8794 for funeral and medical ex.
Plus some more for damage to the car.
Issue is to amount of damages for P wrongful death claims. Debra 33, , had life
expectancy of 47 years- also 8 months pregnant with General, life expectancy of 73.
Debra worked as produce manager at Kroger
Lost future income 4 elements
1. base year or entry level income (projected before tax income)
2. income growth rate (inflation, progression, productivity gains)
3. worklife expectancy (how long someone would have remained in workforce)
4. discount rate (present value of decedents future income) (PV)
personal tax offset; personal expense/consumption offset; (some dont use)
+lost fringe benefits (includes health insurance, pension benefits, social security.)
usually 15% of PV of decedents lost income.
Lastly +lost household service (hours spent doing housework times minimum wage).
Battle of experts for amount of lost future income damages varied between $890K and
$195K.
Total economic loss equals all of above added together,
difference in Childs, for debra- 1.148 million versus 398K
Generals lost future income-
No lost household services for unborn child, but lost future earnings and lost fringe
benefits- Differences astounding $1.7 million versus $433K
Who will fail and who will succeed and who will either enjoy or suffer through life, is
a game of fools & the mathematical precision the experts put on Generals death
illusory
Both experts paid to see what they saw- P overvalues, D undervalues

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Difference in Debras economic damages explained by difference in worklife
expectancy, used P experts calculations for Debra fringe benefits bc talked to Kroger,
both calculations for lost household service too high. Total economic loss 1.35 million
General more speculative , big caring family, but from single mother so 1.08 million

Sept 11th compensation- administrative remedy set up within two weeks, based on male
tables, still victims families wanted more, 1st year ass. at law firm.
Also subrogation (infra) reduced payments, except workers comp and private charity
Use stat mortality tables and work-life expectancies as authorities, not binding on court
though.
Waldorf v Shuta (p.61)- consideration as future attorney, when a high school dropout
far too speculative
Good notes p.60-68

Pain and suffering (p68) (aka, nonpecuniary, general damages, hedonic- when
referring to loss of enjoyment)
Also compensatory damages. Premised on P has been through trauma has lost more
than earnings or medical bills. Pain is physical. Suffering takes many forms: grief,
bereavement, fear, and frustration.
Referred to as noneconomic, but are they? Posner thinks not, economic but non-
pecuniary.
Two shortcomings to awarding pain and suffering- 1) money awards do not make
them whole, 2) there is no rational scale that justifies the award of any particular
amount., in compensation for a particular amount of pain. Consorti v Armstrong
Are Pain and Suffering damages used to pay attorney fees? P.69
Subjectivity of pain and suffering, conversion to dollar amount is difficult and
expensive
Parts of pain and suffering-
Victims anguish and terror felt in the face of impending injury and death

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 Victims tangible physiological pain at time of injury and through recovery
Vs loss of enjoyment of life- hedonistic damages
Vs loss of consortium
Hard to prove- must discuss Vs life before accident, during, and after, what therapies

Loth v Truck-a-way (Cali CA 1998) p71 Active lady struck down/Whore expert
PI from a auto accident- P awarded general damages and
D argued not admissible, expert testimony to hedonic damages, but it is admissible
F: P car struck by 24-wheel truck, she walked away, continued business trip then cut
short went to Dr. complained of headaches and back stiffness. Saw army of Drs but
none able to stop pain. D conceded liability only issue was damages. Ps expert testified
to hedonic damages.
however should have been precluded bc of double recovery -pain and suffering and
hedonic. Only one collection of pain and suffering and hedonic included in that
figure. No separate jury instructions because one figure
Only person whose pain and suffering is relevant is the Ps.
can ask for per diem basis for pain and suffering (the norm in Fla.)
No formula for calculation (SCOTUS); Smiths calculation does just that.
a life is not a stock, car, home, or other such item bought and sold in some
marketplace.
$890K verdict not excessive although Smiths testimony could lead to runaway verdicts
and should be inadmissible. Still remand bc curative instruction did not properly
correct prejudice of Smith testimony.
Notes: Unit of time break down not allowed in some jurisdictions, Ok in Fla.
Some states all right if come with line at end that this is just an estimate

McDougald v Garber (NY CA 1989) p80 Comatose Caesarean

P permanently comatose after botched Caesarean section by D and anesthesiologists.

12
Jury awards $9.6M + $1M for pain and suffering + $3.5M for loss of pleasures and
pursuits of life. Trial Judge reduced to 4.9M and 2M for pain and suffering (one award)
Can she suffer conscious pain and suffering if comatose? No! Cannot experience the
pleasure of giving it away award must have utility to victim to be compensatory
Dissenting opinion basically she is suffering even if she does not know it. highly
emotional response, majority injects an extra element into equation by creating utility.
to obtain the benefit of this legal fiction the law requires a prerequisite to recovery
that the V of a tort have cognitive awareness & therefore the P has the threshold
burden of proving consciousness for at least some time following an accident in order
to justify an award of damages for pain and suffering
Notes p.87 [Above] burden can be satisfied by direct or circumstantial evidence but
mere conjecture, surmise, or speculation is not enough
often when unconsciousness or death occurs shortly after a tort, it is difficult,
sometimes impossible, to determine if a decedent suffered or was actually conscious of
any pain

Limitations on Damages Recovery

Avoidable Consequences/ Avoidance
Williams and Robbins v Bright (NY SC 1997) p90 Jehovahs Witness cant see the Dr.
P victim in car crash driven by her father, some evidence he fell asleep.
P religious beliefs do not discharge duty to mitigate damages. She claimed Jehovahs
not allowed blood transfusions. Then she became wheel chair bound after necrotic
development of bone structure in knee.
She got reasonably prudent Jehovah standard at Trial Court, in effect discharging her
of any duty to mitigate. Relied on Ballard
Appeal: State does have a compelling interest in assuring that the proceedings before
its civil tribunals are fair. And that any litigant is not improperly advantaged or
disadvantaged by adherence to a particular set of religious principles.

13
Courts purposes must be secular, unfairly advantaged to P in instant case.
Dissent- distinguished Ballard; court gave right charge below, new instruction
impermissible 1st Amend. Violation

Collateral Source Rule

Exception to the rule barring P from recovering compensatory damages that exceed
the Ps losses. Plaintiffs can still recover full amount from defendant tortfeasors even
though they have already received compensation for their injuries (i.e. medical or car
insurance). Not always insurance!
Such as Shriners in Moulton v Rival Co. a plaintiff who has been compensated in
whole or in part by a source independent of the tortfeasor is nevertheless entitled to a
full recovery against the tortfeasor, to prevent the tortfeasor from gaining a windfall.
Even Posner agrees not a windfall for P.
Tort Reform sought though b/c some Ps collecting from disability and court judgments
In Fla. Reduce the amount of damages paid to the claimant from collateral sources
however if right of subrogation exists (i.e. insurance) than no reduction in damages.
Subrogation- Conventional Subrogation gives third party (mostly insurer) right to
step into Ps shoes and recover from D the expenses incurred by third party in
putting P in the rightful position; [also equitable subrogation related to restitution]
Subrogee (payor) and Subrogor (victim)

Lagerstrom v Mertle Werth Hospital-Mayo Health System (SC Wis 2005) p102
I owe Medicare
P estate sues hospital and insurers for wrongful death/med mal. Get judgment of
$55,755.00 ; D at trial presented evidence that out of pocket expenses were only $755.
Collateral Source evidence brought in by D, but P not allowed to rebut with evid that
may need to reimburse Medicare $89K.
Opinion saturated with statutory interpretation.

14
Ultimately finds evidence of collateral sources is admissible and if presented then P
must be allowed to show any potential obligations of subrogation or reimbursement.
Dissent- heavy disagreement bc US not joined as a party, so would affirm lower decision
2nd Dissent- majority against legislative intent thus full dissent, some litigants use the
rule to get around the cap on noneconomic damages [aka pain and suffering]
legislative history is clear does not require juries to make offset bc of collateral sources
but permits them to.
Notes p118 Benefits rule provides that if defendants tortious conduct confers a
benefit, as well as a harm, on the plaintiff jury may weigh the value of benefit against
the claimed harm. i.e. negligent digging discovers oil well

Enhancement and adjustment of compensatory damages

Prejudgment interest
Jurisdictionally set at around 8 to 9%, and compound calculated on principal and
interest from prior period
Present value of money more than future value, a dollar today is worth more than a
dollar tomorrow
Prejudgment interest- from the time claim arose to judgment
Post-judgment or judgment interest- from the time of judgment to payment, set by statute and
often very low
Contract interest- interest a debtor agrees to pay a creditor
Jurisdictions split on awarding interest- left over medieval crap that interest perpetuates
feudalism and only awarded if D knew exactly what it owed.
Pendulum swinging to award prejudgment interest
Punitive damages (aka exemplary damages, vindictive damages, smart money)
Awarded in addition to compensatory damages and aimed at making an example out
of D
Tuttle v Raymond, III (SC Maine 1985) p122 Trying to pass 6 people

15
D drove car excessive fast in a 25mph zone, struck P causing serious injury
Punitive damages properly awarded when D acts with malice does not over
compensate P but serves to deter Ds
Other jurisdictions use different words but basically higher degree of negligence needed
for tortious conduct- aggravated tortious conduct, willful, wanton, outrageous, etc.
Double Jeopardy not in play with civil punitive damages
Hard to measure, similar to pain and suffering, and emotional distress
Relevant is Ds wealth, Cali have to show D can pay before allowed to ask
In this case D did not act with required malice
Also clear and convincing standard for burden of proof of such damages in over half of
jurisdictions
Notes: Louisiana, Mass, NH, Wash lack common-law punitive damages only when
statute provides. Nebraska no punies whatsoever, state constitution forbids them.
2nd RST 908(2) punitive damages may only be awarded for conduct that is
outrageous, because of defs evil motive or his indifference to the rights of others.
Rarely available in Contract Breaches [unless accompanied by a tort]: contrary to
concepts of Contract law for freedom of/and stable transaction. K transactions do not
usually engender as much resentment or mental and physical discomfort as do torts
Examples where granted in K breach: violation of non-compete agreement was an
egregious breach of a covenant.
Constitutional challenges to punitive damages
Under 8th Am. excessive fines
Previous challenges survived 1/526 [TXO] ratio of compensatory to punitive,
compelled states to include post-verdict factual eval. of jurys punitive awards for
excessiveness
Constitutional Analysis is not done under 8th Am but rather 14th Am. Due Process
BMW v Gore (SCOTUS 1996)(from Alabama SC) p133 BMW paint job
Dr Gore bought BMW, damaged in transit, repainted in America and then sold to him
told it was brand new, constituted fraud. He sued for price of car plus punitive

16
damages of $500K; won award of $4M; AL SC reduced to $2M; SC said still grossly
excessive
In 14th Am. Analysis look to states interest the punitive award is designed to serve
And the degree of reprehensibility of the defendants conduct.
Max civil penalties in AL for deceptive trade practices was $2000, coupled with BMW
was only trying to fix its car, still a BMW so punitive damages excessive.
Scalia Dissent, no guideposts
Ginsburg Dissent, leave AL SC decision undisturbed because only trying to follow our
decision in TXO, further every state recognizes punitive damages, it is a state concern
On remand AL gave $50K said civil penalty not applicable bc they are weak and AL Ps
should choose courts to remedy Ds wrongs.

State Farm v Campbell (SCOTUS 2003) Insurance Company left him

Reaffirms Gore uses same three guideposts
UT man filing bad-faith insurance lawsuit v State Farm. He passed 6 cars on highway
and killed 1 person injuring others. After trial State Farm abandoned him and claimed
owed no liability. TC returned verdict of $2.6M in compensatory and $145M in punitive
damages.
Analyzed under three guideposts
1. Reprehensibility of Ds conduct
2. Proportional. Is the ratio outrageous few exceeding single digits are not.
Presumption against 145 to 1
Suggested 1 to 1. Not followed though
3. Disparity between punitive damages and civil penalties authorized
$145M neither proportional nor reasonable.
Did not follow 1 to 1 on remand awarded $9M to campbells
When are employers responsible for employees tort leading to punitive damages?
A. Restatement view, adopted by California, 4 scenarios where principal can be
assessed punitive damages 1. Principal authorized the doing 2. Agent unfit

17
 and principal was reckless in employing him 3. Agent was in managerial
capacity and was acting in scope of employment 4. Employer or manager
ratified the act
B. Most courts willing to extend broader exposure, if employee acting within
the scope of his/her employment.
Courts not sympathetic to Defendants in mass tort and have imposed successive
punitive damages awards against them from multiple Ps.
Reasons for Remittitur, ruling by a judge to reduce amount of damages from a jury verdict.
Usually because amount awarded exceeded amount asked for.
Subsequent remedial measures (407) should not be reason to reduce punitive awards

Mathias v Accor Economy Lodging (USCA 7th 2003) p155 bed bugs
Ps got bed bugs at Red Roof Inn. D willful and wanton conduct $186K punitive
damages and only $5K in compensatory. D knew about bed bugs, told by exterminator
to close down hotel so it could be sprayed down, Ds district manager refused thus
imputing D. Total damages equaled $1000 per room in hotel (191)
the judicial function is police a range, not a point

Attorney fees p160

The American Rule both winning and losing litigants bear their own expenses.
Tort reform activist want loser pays or one way loser pays (only losing Ds pay).
Primary exceptions-
1. contract,
2. statute,
3. judicially created exceptions
a. bad faith litigant (controversial)
b. common fund doctrine- analogous to quantum merit- litigant who
starts class action can collect from other members of the plaintiff class
awards.

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Nilsen v York County (USDC Maine 2005)
Did not go over, recognizes common fund

Tort Reform p178

Controversial provisions passim-

Best v Taylor Machine Works SC Ill. 1997 p180 Worst Forklift Accident Ever
P was injured while working, operating a forklift, mast broke moving slabs of hot steel,
flammable hydraulic fluid caught on fire and engulfed P. P broke both ankles jumping
and suffered 40% burns on body, face. Suing Forklift manufacturer, seller, and
hydraulic fluid maker. Asking to strike down (declaratory and injunctive relief) Tort
Reform which caps noneconomic damages at $500K.
Cap not rationally related to a legitimate government interest. Undermines the power
and obligation of the judiciary to reduce excessive verdicts. Cap struck down.
Dissent- legislation passes rational basis test, need not approve only that question is
debatably and rational answer.
Notes: Ill passed a new malpractice cap at $1M
Workers comp, removed most employer-employee damages claims from the jury, no
doubt that it is a legislative usurpation of courts.

Gourley ex rel. Gourley v Neb Methodist Health System, Inc. (SC Neb 2003) p191
Cap on noneconomic damages for baby Colin
Neb-Medical Liability Act caps medical mal actions to $1.25M. DC ruled denied
gourleys EqP and Rt to jury trial. Negligent care during pregnancy, Baby Colin born
with cerebral palsy; awarded $5.625M.
It is commonly held that courts will not reexamine independently the factual basis on
which a legislature justified a statute, nor will the court independently review the

19
wisdom of the statute. This court does not sit as a superlegislature to review the
wisdom of legislative acts
Uphold statute, reassess damages at $1.25M, law does not violate any provision of Neb.
Constitution briefed or argued.
Concurring opinion rips act for not making cap only apply to noneconomic damages
Therefore P cannot fully be compensated for economic damages such as hospital bills.
Dissent special legislation and thus violates Neb Const. bc unfairly advantages D
Notes: Neb legislature listened to concurrence and raised limits to $1.75M
Caps also struck down in Petrucelli v Wis Patients Comp. (2005)
Wis limited cap to $350K the leg. enjoys wide latitude in economic regulation. But
when the legislature shifts the economic burden of medical mal. from insurance
companies and negligent health care providers to a small group of vulnerable, injured
patients, the leg. action does not seem rational. Failed even rational basis test

Chap 3 Equitable Remedies- the Injunction p217

1. Equity acts in personam
Most used equitable remedy the injunction; others include the constructive trust, an
equitable lien, subrogation, accounting for profits, equitable rescission, reformation, and
specific performance.
Equity acts in personam common function of equity remedies is the personal
response or conduct each requires form the defendant. For in personam to work the
judge will wield contempt against a recalcitrant or disobedient def.
A court with personal jurisdiction over the defendant is able to order the defendant in
personam to act or refrain from acting in another state.
When is international trademark injunction proper, Lanham Act factors include
1. Whether Ds conduct has a substantial effect on US commerce
2. Whether D is US citizen

20
 3. Whether extraterritorial enforcement of the trademark will encroach upon
foreign trademark rights.

Tabor & Co. v McNall (Ill CA 1975) Dueling Courts

Tabor, Nevada Corp., doing business in Ill. Contracted with McNall Bros., a Wis. Co, for
purchase and delivery of grain in Illinois. McNall defaulted. Tabor filed suit in Illinois,
McNall contested personal jurisdiction, then D filed suit in Wisconsin. Illinois Trial
Court ordered an injunction against Wis. Court from not litigating in Wis.
CA says improper to grant such injunction, in personam, joins the party not a foreign
court
Notes: once a D is hooked, can always jerk him back to obedience by the threat or fact
or personal constraint.
Some courts recognize out-of-state courts simply as matter of comity.
Full faith and credit clause applies to judgments, not necessarily injunctions
Statute prohibits a fed court from enjoining state court litigation, even if lawsuit in
exception to statute fed court can abstain, Younger v Harris.

Matarese v Calise (SC RI 1973) p231 Some property in Italy p231

TJ ordered D to convey land by deed to be recorded in Italy, and issued injunction
enjoining def from transferring property to anyone but the P. Court had power over D
and therefore had power to order conveyance even though land was situated in Italy.
Court does not transfer legal title of property but orders it so, and enforces such order
through contempt, attachment or sequestration.

US v McNulty (USDC 1978) Irish lottery winner p234

D won Irish lottery roughly, $128K, IRS came to collect winnings, which D had tried to
secretly collect and deposit in foreign bank. Ds money still in bank but D in prison for
tax evasion and subject to tax penalties of $68K. Ds only way of satisfying judgment is
money in foreign bank. Court ordered D to repatriate his assets from the bank and

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deposit them with clerk of court. Again in personam jurisdiction thus can order D to
transfer funds and can punish him for not doing so.

2. The Plaintiffs inadequate legal remedy, irreparable injury

will not grant specific relief when there exists and adequate remedy at law
adequacy doctrine- in chancery courts carried over to American colonies and still the
law in almost every jurisdiction
Irreparable injury rule- still cited to

3. Equity cannot protect personal, political, or religious rights

Certain domains outside the scope of courts powers
No remedy available and injunction not proper in political thicket Bush v Gore
Courts lack jurisdiction to issue injunctions (TRO) in religious disputes Decker ex rel
Decker v Tshetter Hutterian Brethen (SD 1999)
Court may grant an injunction in the area of church-state relations. Court granted
injunction to prevent school prayer at public school events. Ingebretsen v Jackson PS
Dist. (fed 5th 1996)
Courts often issue injunctions to protect Ps personal and political constitutional rights

4. Equity lacks jurisdiction to enjoin a criminal prosecution

Norsica v Board of Selectman (SC Mass 1975) p242 Transient store
P owned retail store, Board said she needed pursuant to Mass Stat. a $200 transient
license and a $500 bond to operate, P also being charged criminally for violating same
statute. She filed for declaratory relief that her store not within scope of statute and
won. Selectman (D) appeal
True rule that equity will protect personal rights by injunction upon the same
conditions upon which it will protect property rights by injunction. These conditions
are 1. That unless relief is granted a substantial right of the P will be impaired to a

22
material degree; 2. That the remedy at law is inadequate and 3. That the injunction relief
can be applied with practical success and without imposing an impossible burden on
the court or bringing its processes into disrepute from Kenyon v Chicopee
Concentrated on 2nd prong of Kenyon test
The available defenses to the criminal complaint provided an adequate remedy at law
thus injunction should not have been granted.
Shuman: 6 merchants alleged police threatened to prosecute for not having license to
conduct business. No injunction- other adequate remedies at law
Kenyon: repeated abuses by prosecution, police, and judges left Jehovah witnesses with
no other adequate remedy at law.
not ground for equity relief since the lawfulness or constitutionality of the statute or
ordinance on which the prosecution is based may be determined as readily in the
criminal case as in the suit for injunction.
Also cited Younger abstention unless very special circumstances

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5. Equity lacks jurisdiction to enjoin a crime
People ex. Rel. Gallo v Acuna (SC Cali 1997) p248 Latino gang members, injunctions
Preliminary injunction entered against 38 individual members of an alleged street gang
in San Jose CA. 5 challenged the Order to Show Cause
Public nuisances enjoinable by injunction; to qualify as a public nuisance the
interference must be both substantial and unreasonable. Backed up in RST
substantiality as proof of significant harm further defined as real and appreciable
invasion of the plaintiffs interests, one that is definitely offensive, seriously annoying
or intolerable objective measure: if normal persons in that locality would not be
substantially annoyed or disturbed by the situation then the invasion is not a significant
one.
Highwater mark Pullman injunction In Re Debs 1896- broke strike of Pullman
railroad employees by public nuisance injunction b/c strikes effect on national
commerce.
Has been limited by state courts People v Lim Cal 1941 ultimate legal authority to
declare a given act or condition a public nuisance rests with the Legislature and court
cannot extend definition of public nuisance unreasonably
[Repetition or continuance of any criminal act is a public nuisance so vests the court of
equitys power to abate crimes with injunction.] paraphrased from Lim; proscribing act
also must further community and collective interests to vest power of equity courts
Paragraph a and k not invalid, pass constitutional muster and behavior of defendants
can be proscribed by injunction because record is replete, behavior is a public nuisance.
Concurrence and Dissent peaceful assembly should not be enjoined
2nd Concurrence and Dissent Blanca Gonzalez should not be enjoined, no evidence she is
gang member
Dissent Montesquieu, Locke, and Madison would be rolling over in their graves.
Provisions of preliminary injunction too vague , prohibitions encompass much lawful
activity that not defined as public nuisance. Unfortunately, there are some who think
that the way to freedom in this country is to adopt the techniques of tyranny. CJ

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Earl Warren
Compare Acuna with City of NY v Andrews (NY 2000) where NYC tried to combat
prostitution in Queens plaza with similar injunction. Court held The city has made it
quite plain that it intends to use this injunction to bypass the Criminal Court, which it
sees as providing inadequate relief. Equity should not intervene bc juries reluctant to
convict in criminal prosecutions. Struck down on association and freedom of travel
grounds.

Buffer-zone injunctions granted in Madsen v Womens Health Center (SCOUTS 1994)

buffer at 36 feet. Also Schenck (1997) floating buffer at 15 feet
Original buffer-zone Jackie Onassis v paparazzo 25-feet floating

Vices and other things that injunctions have been issued against; obscenity (porn),
crack, AIDS, Love Canal waste sites US v Occidental Chem. Corp. 1997; Illegal
gambling, Failed to enjoin- stop Global Warming, repackaged products liability suits
against lead paint and gun manufacturers.

6. Equity will not enjoin a libel

Prior restraint rule- an injunction is a prior restraint if it forbids a Ds speech, think it
threatens the Ds expression more than subsequent punishment.
Tory v Cochran (SCOTUS 2005) p268 Guy defamed Johnnie Cochran
Tory engaged in continuous unlawful defamatory activity against Cochran. Court
issued permanent injunction that D could not Cochran or law firm in any public forum.
Cochran died, case is moot but
an order issued in this area of First Am. rights must be precise and narrowly tailored
to achieve the pinpoint objective of the needs of the case.

B. Injunction Procedure
1. Interlocutory relief, TRO and Preliminary injunctions

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given promptly to eliminate or minimize Ps irreparable loss before the judges final
decision. Preserves the controversy for a meaningful decision after full trial. Must weigh
Ps loss versus protecting D from possible erroneous interlocutory injunction.
TRO- after a hearing, can be done ex parte usually called ex parte TRO
Preliminary injunction- before full trial after an adversary hearing
Permanent injunction (aka injunction)- only after a full trial. FRCP 65
Roe v Crawford (USDC 2005) p272 pregnant prison inmate
Preliminary Injunction held by telephone call. Pregnant female in womens prison filed
to have an offsite abortion in St. Louis. D, refused to transport P, thus was stalling
which was increasing the health risk to the P. Ps motion is granted
4-Point Test/ 4 factors: (1) the threat of irreparable harm (2) balance between harm to
plaintiff and harm in granting injunction versus the D (3) the probability movant
will succeed on the merits (4) the public interest.
1. relied on roe v wade to show irreparable harm
2. harm of P outweighs Ds bullshit argument
3. P will probably ultimately succeed bc case law supports her position
4. No harm to public interest by granting
No more defiance of its orders P wins
In general Roman test for granting preliminary injunctions
1. remedy of law inadequate
2. substantive right being infringed on [he has no idea what the fuck he is talking about]

Disfavored Preliminary Injunction (notes p275)- one that alters status quo, is
mandatory, and gives movant full relief she seeks at trial.
Sliding Scale for evaluating these any p seeking one then must show modified
likelihood on the merits standard- either Injury really high or high likelihood of
success on merits

2. Jury Trial After Merger

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No jury when party seeks injunction,
Feltner v Columbia Pictures Television (SCOTUS 1998) copyright old TV shows
Copyright infringement case Feltner (D) owned several TV stations which showed
unauthorized TV shows under copyright by Columbia (P). P won a $8.8M judgment
from judge verdict. D argued should have been heard by jury because damages are
juries domain. Even though damages were fixed by copyright statute and thus statutory
damages, an equitable relief.
Columbia argued this did not trigger jury trial right of 7th amendment because not a
suit at common law because no legal rights ascertained.
Historically copyright infringement has been adjudicated in courts of equity since 17th
century. Common law rule in cases where the amount of damages was uncertain,
there assessment was a matter so peculiarly within the province of the jury that the
court should not alter it.
right to jury trial includes the right to have jury determine the amount to damages, if
any awarded [to copyright owner].

Note: be careful what you wish for, Feltner got his jury and they awarded Columbia
$31.68M
C & K Enginering Contractors v Amber Steel Co. (Cal SC 1978) p285 Subcontractor
water plant
P suit for damages stemming from a breach of contract based entirely on equitable
doctrine of promissory estoppel, neither party entitled to jury trial.
D, subcontractor, gave in bid to P, contractor, to do some work on water plant. P gave
master bid to city, approved, D backed out claiming bid was honest mistake.
Empanelled advisory jury on issue of Ps reasonable reliance on Ds promise, jury found
reliance reasonable and Judge order D to pay the cost of detriment, another contractor.
Promissory estoppel:

1) promise

2) reliance on the promise

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 3) reliance was reasonable so it was foreseeable and incurred detriment (jury)

4) enforcement is necessary to avoid injustice

***damages are only the detriment incurred

Promissory Estoppel and Unjust enrichment would be equitable

to avoid injustice equitable

a jury trial must be granted where the gist of the action is legal

No jury needed equitable doctrine.

Dissent focus not on rights but on remedies, P who seeks damages should be entitled to
jury. Also the rule in Michigan.

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3. Equitable Cleanup
Ziebarth v Kalenze (ND SC 1976) p292 Specific performance cow
Cattle buyer contracts to buy calves from D. D sells them to someone else, P files suit
asking for specific performance. Which is impossible bc D already sold cows to 3rd party
Overrules law of substituted legal relief which is espoused in UCC 2-716 [specific
performance] and in subpart 2 states: the decree for specific performance may include
such terms and conditions as to payment of the price, damages, or other relief as court may
deem just.
D knew no specific performance, which would trigger non-equity action, in damages
thus D should have requested jury did not, so verdict ok. Tipsy Coachman sort of.

C. The Modern Injunction: Discretion and Flexibility

1. The Chancellors Discretion
Navajo Academy v Navajo United Methodist Mission School (NM SC 1990) p297
Academy moves in with Mission
Two schools Academy moves to mission campus (1981), Academy does not charge
tuition thus enrollment jumps and swallows mission. Mission enters into year to year
subleases (1981-1986) but needs an upgrade of facilities so asks Academy to ask Bureau
of Indian Affairs, because free school, for grant which is approved. In 1987 Mission
seeks to get Academy evicted. Academy files for damages of $1.8M and ask for
continued occupancy. Court grants 3 years it gets to stay and then it is forced to leave.
Not outside of Courts discretion because the fashioning of an equitable remedy, in a
suit involving equitable powers of the court, was an abuse of discretion.
Improvements to school, but for the Academy, can be viewed as a couple years rent.

Weinberger v Romero-Barcelo (SCOTUS 1982) p301 bombing off PR

Gov. and citizens of Puerto Rico suing the Navy, over test bombing off some island.
Some bombs did not detonate thus PR argues Navy is violating the Fed Water Pollution

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Control Act (FWPCA), DC agrees but does not file an injunction, CA orders Navy to
stop bombing until they get a permit.
Test is whether statute/ Congress permits injunction, or provides other relief.
SCOTUS says injunction not the only way of granting compliance but FWPCA does
authorize permanent or temp injunctions and permits DC to order the relief it
considers necessary to secure prompt compliance with act.

2. Two maxims of Equity: Clean hands and Laches

a. Clean Hands doctrine
Green v Higgins (SC Kan 1975) p310 Schisters trying to do business
Both P and D committed fraud in selling/buying house. Committed fraud against real
estate agent, third party with right of first refusal, and each other.
Clean hands doctrine; in substance provides that no person can obtain affirmative
relief in equity with respect to transaction in which he has, himself, been guilty of
inequitable conduct. To be applied at discretion of court, conduct that amounts to
unclean hands must be willful conduct that is fraudulent, illegal, unconscionable
and it must relate to the subject matter of the suit. Additionally the purpose of clean
hands doctrine is to protect the courts, and not a matter of defense of the party asserting
it as an affirmative defense.
Not effected by merger, only available in suits of equity.

b. Laches
Stone v Williams (Stone I) (USCA 1989) p315 Hank Williams baby
Hank Williams Sr., country music star, died at age 29 in 1953 had baby, P, who is suing
for her share of copyright renewal rights for all his hits. His estate was litigated in 1967
for his son Hank Williams Jr.
She did not know who her rumored dad was till she was 21, also told everything has
been decided against you. She had numerous chances to investigate further but finally

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choose look at documents until 1984 with her attorney. DC ruled doctrine of laches
barred her claim. equity aids the vigilant, not those who sleep on their rights.
She should not be penalized for not participating in 1967 proceedings, or for the period
between 1974 to 1980 because she did not want to upset adoptive parents. But no excuse
for waiting five more years to file until 1985.
Doctrine of laches not a bar because Ps conduct unexcused it must also be
determined whether the D was prejudiced in the delay.
If no excuse than any prejudice sufficient, however if mediocre excuse then slight
prejudice. Prejudice can be shown through 1. Decreased ability of the defendants to
vindicate themselves or 2. Inequity in light of some change in Ds position to permit
plaintiffs claim to be enforced.
D prejudiced in both ways

Stone v Williams (Stone II) (1989) p320

Ds lawyers intentionally and fraudulently covered up plaintiffs identity. D had
unclean hands thus decision reversed.
The evidence of fraud which the AL SC found persuasive, makes SJ on the grounds of
laches inappropriate.
Notes: She eventually won in Stone III
Some courts have held the running of an analogous SoL creates a rebuttable
presumption of unreasonable delay and prejudice flowing therefrom. Goodman p322

D. Contempt
Still must obey the injunction if not then held in contempt
Direct contempt- from behavior in the courtroom
Indirect contempt disobedience from outside the courtroom, Entitled to notice and a
hearing
1. What Orders Support Contempt?
FRCP 65 (d) Contents and Scope of Every Injunction and Restraining Order.

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 (1) Contents.
Every order granting an injunction and every restraining order must:
(A) state the reasons why it issued;
(B) state its terms specifically; and
(C) describe in reasonable detail and not by referring to the complaint or
other document the act or acts restrained or required.

H.K. Porter Co. v National Friction Products (USCA 2nd 1977) p325
Settlement agreement between the parties. P wanted clause enforced had contempt
proceedings
To have contempt must have been disobedience of an operative command capable
of enforcement. And that command, if it is in substance an injunction, must comply
with rule 65(d)[above] of FRCP.
DC judgment did not use language which a contractual duty into an operative
command. Even if it was an operative command, which it was not, did not conform to
mandatory precedents in FRCP 65(d)(1)(C) because it merely referred to the settlement
agreement and did not issue an operative command.
Equitable decreestrace their origin to the royal command to obey the chancellors
direction. B/c of the risks of contempt proceedings, civil or criminal, paramount
interests of liberty and DP make it indispensible for the chancellor to speak clearly,
explicitly, and specifically if violation of his direction is to subject a litigant to penalty
including damages.
Even statute not enough, as a reference.

2. What is a violation?
Playboy Enterprises v Chuckleberry Publishing (USDC 1996) p328
Playboy v Playmen
Def. Tattilo, Italian man, publishing Playmen magazine in Italy since 1967, D wanted
to bring Playmen to US in 1979. Playboy got Judgment in 1981 which enjoined D from

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publishing, printing, distributing or selling in the United States an English Language
Magazine titled Playmen. D in 1996 has violated judgment now by operating
playmen website from Italy.
A Court has the power to hold a party in civil contempt when (1) there is a clear and
unambiguous court order; (2) there is clear and convincing proof of noncompliance;
and (3) the party has not attempted to comply in a reasonably diligent manner.
**** failure to comply need not be willful****
Cyberspace not a safe haven, Tattilo has violated the Courts Injunction, Contempt
granted

3. The Puzzle of Criminal Contempt-Coercive Contempt

International Union, United Mine Workers of America v Bagwell (SCOTUS 1994)
p334 Mine workers causing ruckus getting fined
Unions told not to violate injunction, every violation brings penalty of $100K for violent
and $20K non-violent. 7 separate contempt hearings for over 400 offenses racks up
$64M in fines for Union. Companies and union settle and vacate $12M in fines but $52M
still owed to Virginia and two counties. Union argues fines are criminal contempt and
not civil contempt thus needed a jury and higher standard of proof.
Civil Contempt- carry the key of prison door in your own pocket.
1. coerces the D into compliance with the courts order, or
2. compensates the complainant for losses sustained
Criminal contempt- a fixed sentence of imprisonment and is imposed retrospectively
for a completed act of disobedience. Gompers (had been put in jail for 12 months
was criminal contempt) thus a flat, unconditional fine totaling even as little as $50
announced after a finding of contempt is criminal if the contemptor has no subsequent
opportunity to reduce or avoid the fine through compliance.
What protections are afforded and When?
Courts independently must be vested with power to impose silence, respect, and
decorum, in their presence Anderson inherent Contempt authority Gompers

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Thus direct contempts can still be handled summarily
Indirect contempts of complex injunctions demands reliable fact finding and triggers
the criminal procedural protections [presumed innocent, advised of charges against
them, have an opportunity to respond to charges, right to counsel, right to call
witnesses, have a public trial, unbiased judge, right not to testify against oneself, and
proof BaRD; and afforded a jury for serious criminal contempt] to prevent arbitrary
exercise of judicial power.
Fines levied on Union were not compensatory and were punitive thus should have
triggered criminal procedural protections such as criminal jury trial.
Scalia Dissent $52M criminal, too extreme a case to try and clarify civil versus criminal
contempt. Would satisfy all the previous tests.

4. Confinement, Contempt, and Cash money: Ability to comply.

Statutes authorize a judgment creditor to institute collection proceedings or discovery
proceedings to find the judgment debtors assets.
Judge may enforce an order to pay with contempt even though requires him to pay
money bc defendants failure to comply considered contumacious conduct.
Yet cannot get any blood out of a turnip contemptor can assert the defense of inability
to comply Deadbeat dad cannot be forced into civil contempt if he is unable to pay
Hughes v Georgia Dept of Human Resources p 344 Contemptor has both burden of
persuasion and burden of production on defense of inability to pay.

Moss v Superior Court, Ortiz (SC Cal 1998) p345 Deadbeat dad has to pay
There is no constitutional impediment to imposition of contempt sanctions on a parent
for failure to pay child support when the parent has the ability to seek and accept
available employment.
A court order requiring parent to pay child support and thus seek and accept gainful
employment is not a violation of the thirteenth Am. Prohibiting involuntary servitude.

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Neither it is a violation of Cal Const. A person may not be imprisoned for a debt bc
provision has long been held not to apply to imprisonment for crimes or contempts.

5. The Collateral Bar

Ex Parte Purvis (Sc AL 1980) p352 protestor imprisoned for 3 criminal contempts
Purvis violated of TRO by striking against his employer, Water Works Board of
Birmingham. Sentenced to criminal contempt of 15 days for 3 separate incidents of
contempt. Uphold TRO despite Purvis contention that Injunction violated his
constitutional rights to freedom of assembly, etc. order issued by court with
jurisdiction must be obeyed until it is reversed by orderly and proper proceedings
even though it may be constitutionally defective unless rare case [If transparently
invalid- ridic high standard] where compliance would cause the irreparable injury and
appeal would not totally repair the error.

5. Who may obey

Because courts cannot make general rules that apply to the masses, such as statutes as
made by legislatures, then injunctions only apply to certain people.
Can be geographically specific Acuna or Milk Wagon Drivers p359 or 36 feet Madsen
People v Conrad (Cal CA 1997) p360 Two groups one abortion clinic
Two groups picket abortion clinic, one group, Solano Citizens for Life has injunction
enjoined against it. Operation Rescue of California, another anti-abortion group, claims
they are unrelated. ORCal was at clinic to test the injunction. Parties did not know
each other and thus could ORCal members could not be enjoined by previous
injunction. Did not act in concert as required by injunction.

Ex Parte Davis (Tex 470 SW 2d 647) [Roman asked up to look up] It dont apply to me
Beaumont preacher building church against injunction

35
states that an injunction is binding only upon the parties to the action, their officers,
agents, servants, employees, and attorneys, and upon those persons in active concert
or participation with them
Neither Bible Baptist Church nor Davis were parties to the 1962 temporary injunction.
The question here is whether a non-party to the original injunction proceeding, was in
active concert or participation with the Brites. This court in Ex Parte Foster said that
while a person not named as a party is not ordinarily bound by the terms of the
injunction decree and therefore cannot be punished for violating its terms, he is in
active concert or participation with the named party if he participated in the original
proceeding and was a real party in interest when the decree was rendered

E. The Enforcement of Constitutional and Public Law Through

Structural Injunctions
Granted to protect Ps constitutional rights usually infringed by schools, prisons, jails,
and now mental hospitals and even police departments. Future based hard to draft and
strain the judiciary, also Separation of powers concerns because may usurp executive
and legislative power. But sometimes needed because other branches too slow to react,
i.e. Brown II all deliberate speed.
Courts can hold city council members or other government officials in contempt for not
following structural injunctions; Courts can subject injunctions over entire systems as in
Dixon v Berry where courts supervised the DC mental health system for over 25 years.
A judge may also grant relief from an injunction when the prospective application in
no longer equitable FRCP 60(b)(5).
1. Attempts to remodel an existing social or political institution to bring it into
conformity with constitutional demands
2. Typically complex and invasive
3. Likely to involve judge in tasks traditionally considered to be non-judicial, that is,
less about rights and duties and more about management
4. Used only as public law remedies for serious and pervasive rights violations
5. Ex. restructure school system to facilitate equality of educational opportunity

F. Injunction Reform

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2 big areas: Limits on strike injunctions and injunctions which effect
unconstitutional prison conditions

Frew ex Rel. Frew v Hawkins (SCOTUS 2004) p374

Texas parents filed a class action lawsuit on behalf of their children against state
healthcare officials, claiming deficiencies in the state's Medicaid program. The case was
settled through a consent decree, a written agreement similar to a contract that the court
approves and has the power to enforce. Two and a half years later, parents were
unsatisfied with the state's progress and filed a motion to enforce the consent decree.
The district court found that the consent decree was enforceable, but the court of
appeals reversed, holding that the state was immune from enforcement under the
Eleventh Amendment, which provides that a state cannot be sued by individuals from
other states, countries, or its own residents unless it explicitly waives immunity. The
court of appeals held that a consent decree is not enforceable against a state or its
officials except to vindicate a federal right under 42 U.S.C. 1983. The court found no
violation of a federal right and no waiver of sovereign immunity; therefore, the
consent decree was unenforceable.

Chapter 4 Unjust Enrichment- Restitution

A. Doctrine of Unjust Enrichment is an Equitable one, providing one party
should not be able to benefit at the expense of another because of an innocent mistake
or unintentional error. UE opposite of Officious intermeddler- window washer.
Kistler v Stoddard (Ark CA 1985) p384 Hey I planted those crops
Stoddard tenant farmer for 20 yrs. planted crop in Nov. 1980. Farm owner died, estate
sold land which Stoddard planted on. New owner unjustly enriched. Stoddard had no
equitable or legal claim to the crop, but that does not mean D (Kistler) is entitled to be
unjustly enriched.

Kossian v American Nat. Ins. Co. (Cal CA 1967) p393 Cleanup of Fire in hotel

37
The plaintiff was hired by the owner of a hotel to clean up debris after a fire. He
performed the work but was never paid. Later, the hotel owner filed a bankruptcy
petition. The trustee in bankruptcy abandoned the hotel to the defendant company,
which held a mortgage on the property. The defendant took possession of the debris--
free premises, and also collected on an insurance policy the hotel owner had maintained
for the defendant's benefit pursuant to the mortgage. The insurance contract
indemnified the defendant for fire loss, including the cost of removing debris; but, like
most insurance contracts, it did not require that the work be done.

The plaintiff asserted a restitution claim against the defendant, seeking a money remedy
in the amount of the insurance proceeds corresponding to debris removal. Although the
defendant never requested the plaintiff's services, and the insurance payment was
based on an independent contract between the hotel owner and the insurer, the court
allowed the claim. It interpreted the "equitable doctrine of unjust enrichment" to
mean that the defendant should not "be indemnified twice for the same loss, once in
labor and materials and again in money, to the detriment (forfeiture) of the party
who furnished the labor and materials."

Patureau-Miran c.(v) Boudier (France 1892)

Boudier, manure salesman, supplies Patureau-Mirans tenant; tenant evicted and court
finds unjust enrichment; action in de rem verso [action for restitution based on the
defendants UE] derives from the principle of equity which forbids one to enrich
oneself at the expense of another.

Knaus v Dennler (Ill. CA 1988) p396 neighborhood lake and dam

P purchase lake front lot, had earthen dam protecting the neighborhood from
flooding. Dam broke now P want Ds to help pay for dam. Some neighbors contributed
to fix dam. Smedleys, one D, neighbors objected to their portion of the dam being
repaired. Ill courts recognize quantum meruit but not applicable. B/c Ps instructed the
repairs to be commenced notwithstanding defendants opposition and lack of

38
willingness to enter the agreement proposed by Ps, we are unable to find the Ds
voluntarily accepted a benefit, as required to establish unjust enrichment.
Ds are freeriders, and get trespass damages of $130.
Notes: does common fund fit into UE?

B. Legal Restitution: Quasi-Contracts

Legal Restitution two branches (A) money or value restitution, occurs when a successful
plaintiff recovers a money judgment measured by the defendants unjust enrichment.
(B) specific or specie restitution includes replevin and ejectment; where the D returns
the Ps exact chattel or real property respectively.
3 common counts or Quasi-Contract:
Complaint for money had and received
Quantum Valebant- for goods sold and delivered
Quantum Meruit- for service rendered under UE principle
Not equity in chancery sense- thus need a jury trial and P prevails then get a money
judgment.
Many cases, even ones below, confuse equitable and legal restitution; mistakenly use
terms interchangeable. Be on the look out for improper vocab.
1. Measuring the defendants benefit-services
Occurs because no contract or tort but P has conferred a benefit on the D
Campbell v TVA (USCA 1969) p406 trade journals for TVA library
P made microfilm trade journals for TVA, but no K because was ordered by an
employee at TVA with no authority to enter into such a contract.
Action in Quantum Meruit.
Two ways to measure benefit D received: 1. Fair market value or 2. How much the
benefit has been worth to the person upon it was conferred?
Bc it was TVA library, real benefit to patrons, almost immeasurable.
Correct in using fair market value, Only fair market value is to TVA library.

39
Also did not need to follow experts assertion that microfilm could have been done for
$10K. Campbell recovery was for $30K.
Dissent J. Rives (only one year of college) judgment in exact amount of original invalid
contract, thus decision did not even follow their own rule.

Maglica v Maglica (Cal CA 1998) p415 maglight unmarried seperation

Unmarried couple who lived together for 20+ yrs, Husband started maglight, wifes
ideas helped grow company. She got $84M in quantum meruit from Jury.
No contract, no marriage bc no common law marriage the fact they remained
unmarried is dispositive
The measure of recovery in quantum meruit is the reasonable value of the services
rendered provided they were of direct benefit to the defendant. the idea that one
must be benefitted by the goods and services bestowed is thus integral to recovery in
quantum meruit.
Improper jury instructions misled the jury, Quantum meruit is not an implied contract
New trial, new jury instructions, more facts about business relationship coupled with
facts about living together, holding themselves out as husband and wife, could help
wife prevail.

C. Equitable Restitution
1. Constructive Trust
more beneficial in three situations, and major equitable restitution
1. D is bankrupt, and P can trace his or her property to identifiable asset
2. D has purchased an identifiable asset with Ps property, and that asset has
appreciated in value
3. D has transformed Ps property to a 3rd person, and P wants the 3rd person to
return the item; operating like replevin or specific restitution
P must TRACE so chancellor can find the constructive trust res
Simonds v Simonds (NY CA 1978) p422 1st Wife wants her life insurance money

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Decedents 1st wife seeks to apply a constructive trust on proceeds of life insurance
policy. Separation agreement required husband to keep life insurance policy, of $7000 to
be paid to her. Insurance policy lapsed.
The separation agreement vested in the first wife an equitable right in the existing
policies. Decedents substitution of policies could not deprive the first wife of her
equitable interests, which was then transferred to the new policy.
Cardozo: a constructive trust is the formula through which the conscience of equity
finds expression. When property has been acquired in such circumstances that the
holder of legal title may not in good conscience retain the beneficial interest, equity
converts him into a trustee

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 2. Tracing
Restatement of Restitution 202 comment c
Explains the stealing money lotto conundrum explained in E &E p282
Limits on tracing:
creditors: fraud victims of a ponzi scheme should each get a pro rata share US v
Durham
Life Ins.: embezzled money then buy Life Insurance only entitled to amount of
embezzled money, interests, and any costs
Homesteads: yes can get homestead if take your money and buy a house,
However Fla one of the most protectionist states for homestead

C. Defenses to Restitution
Non-affirmative defenses: attack either the unjustness or enrichment tag the P with
intermeddler or volunteer status
Affirmative Def:
a. Time bar- varies if legal then jurisdictions contract statute of limitations or equitable
restitution under equitable doctrine of laches
b. Change of position-estoppel- if making restitution would be inequitable or
estoppel if bank overtransferred, D asked if it was his money and bank assured him
money is yours then creates estoppel- must show relied on P representation p432
c. Bona Fide purchaser- second hand purchaser no idea, what you purchased was
without good title- must show lack of knowledge under UCC
d. Discharge for value- when creditor discharges debt owed to them bc thought money
was clean or property had good title.

Chapter 5- Restitution in Transactions

A. disqualifying the P for Rescission-Restitution
1. Election of another Remedy

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FRCP 15 allows Ps to amend complaint adding or retracting remedies
FRCP 54(c) tells a judge to grant the relief to which the successful plaintiff id entitled
even if the party has not demanded such relief in the partys pleading.
UCC remedies cumulative
Gannett Co. v Register Pub. Co. (USDC 1977) p436 Hart-fraud Times
Sale of Hartford Times, D overvalued assets and fraudulently inflated circulation stats.
P learned of this only after purchase, did not rescind right away.
TC held waited two months, to long, to rescind thus affirmed the contract.
the reasonable time period within which rescission must be demanded starts the
moment the injured party is on notice of the fraud.
To force shares of Hartford back upon Gannett at his stage would be unequitable.

2. Lack of Injury
Earl v Saks & Co. (Cal SC 1951) How much is that Fur Coat?
Lady gets Saks to sell fur coat to BF only because she promises to pay difference. She
then returns to get coat monogrammed and pays the difference, he tells Saks he is
rescinding. He then sues Saks for conversion. But no injury Saks has coat, he has paid
nothing, only signed sales slip and Mrs. Earl has paid $916.30 which can be returned.
So Contract Rescinded, [in modern day we call this a return]
Monetary Injury is a requirement- classic view- Prof. Pomeroy

Harper v Adametz (SC of Errors Conn.) 1955 Lying Realtor

Realtor defrauds buyer out of 63 acres by lying to buyer and seller. Ends up purchasing
the 63 acres for his son (D). Equity will not permit these D to keep a benefit which
came to them by reason of Jeres fraudulent conduct.
If one acquires property by means of fraudulent misrepresentation of a material fact,
equity will assist the defrauded person by fastening a constructive trust on the
property
P gave addition $1000 he had offered and court ordered D to convey 63 acres to P.

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 B. From Defective Negotiations to plain Overreaching
1. Sellers right to disclose
Reed v King (Cal CA 1983) p455 For Sale: mother and her four children murdered
Murder of five people, 10 years ago, does Seller have to disclose?
In general seller of house has a duty to disclose: where the seller knows of facts
materially affecting the value or desirability of the property which are known or
accessible only to him & also knows that such facts are not known to, or within the
reach of diligent attention and observation of the buyer.

2. Undue Influence
Odorizzi v Bloomfield School Dist. (Cal CA 1966) p460 homo school teacher resigns
School teacher forced into resigning after arrested for homosexual activity. Wants
declaratory relief reinstating him after charges were dropped
Undue influence involves an application of excessive strength by a dominant subject
against a servient object
Undue Influence certain characteristics of excessive strength:
1. Timing of discussion of transaction
2. Consummation of transaction at unusual place
3. insistent demand that be done immediately
4. extreme emphasis unexpected consequences of delay
5. use of multiple persuaders of dominant party
6. absence of third party advisors
7. statements that there is no time to consult financial advisors or attorneys
Remanded to TC for factfinding determination
****Roman- also possible duress and threat of character concerns in Odorizzi

3. Duress-Business Compulsion
Selmer Co. v Blakeslee-Midwest Co. (USCA 1983) p466 I had to take the offer

44
Selmer, P, subcontractor entered into agreement with D, general contractor, D was to
supply something to P then P to build and deliver to site. D was late in delivery and P
incurred cost of $150K, offered to settle for $120K, D refused to budge from counteroffer
of $67K. P accepted because of economic difficulties and now is suing for rest of costs
incurred claiming economic duress
The mere stress of business conditions will not constitute duress where the defendant
was not responsible for the conditions.

4. Unconscionability Doctrinally difficult

Discover Bank v Superior Court (Cal SC 2005) p472 Fucked up cardholder
agreements
Arbitration agreement between Discover and Card holders, arbitration came about
because aggregate late payments from class action [payment was late after 1pm]

When a party has superior bargaining power and has carried out schemes to deliberately cheat
consumers out of individually small sums, the waiver becomes applicable and is
unconscionable. Gave discover card unequal bargaining power

C. No Enforceable Contract
Contract may fail bc of SoF, failure of consideration, lack of capacity, partys mistake or
illegality.
1. SoF Required Writing Rule
Marriage
Year
Land
Executor
Guarantor
Sale of goods over $500 and UCC 2-201 revised $500 to $5000 [revised still not adopted
as of 2010]

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Schweiter v Halsey (Wash SC 1961) p 481 SoF land case
Tried to convey land with an inadequate description of the property. Violated Statute of
frauds thus voided whole agreement

Abrams v Unity Mutual Life Ins. (USCA 2001) p485 preneed funeral insurance
P, funeral director brought on by Insurance company to start selling preneed
insurance for beneficiaries to cover funeral costs. No written contract despite 7 drafts of
a contract and relationship lasts 6 years. Contract claim is barred bc violates SoF and
unjust enrichment claims is barred for two reasons. One it based on the same promise
and seeks the same relief of the barred contract claim, thus enforcing it would
circumvent the statute of frauds. Second he cannot prove what benefit he conferred on
Unity without the draft contract, the fatal flaw resurfaces.

46
2. Lack of Capacity
Halbman v Lemke (Wis Sc 1980) p488 minor buys car, car breaks down
P a minor buys car from D. Car breaks P take sit to garage repair bill $637.00 does not
pay bill. Garage removes engine and tows to minors house.
Infancy Doctrine- Absolute right of minor to disaffirm a contract
Absent misrepresentation or tortious damage to the property, a minor who disaffirms
a K for the purchase of an item which is not a necessity may recover his purchase
price without liability for use, depreciation, damage, or other diminution in value.

Draft of Rst. Of Restitution 16 Illustration 13 allows Seller to offset depreciation with

minor buyers refunded purchase price/consideration

D. Ground for restitution

1. Deficient Consideration
Johnson v GM Corp, Chevy motors division (Kan SC 1983) UCC revocation setoff
P, bought a new truck, traded in old received a limited warranty. Problems with new
truck almost immediately. Continued to drive truck bc seller refused to take back after
numerous chances to cure defects. Seller wants setoff for depreciation of truck while
litigation on going
A B that properly rejects or revokes acceptance is first made whole from the injuries
resulting from the sellers failure to perform his part of the agreement, escapes the
bargain, and forces any loss resulting from depreciation of the goods back on the
seller. B had vested security interest pursuant to 2-711 UCC thus should have kept
truck after S refused to retake possession.
Get out from under being wrongful to the Seller [2-608(2)(a)] bc transportation is
necessity not a luxury thus had to use truck
However S gets there setoff 2 ways to calculate:
1. Lease vehicle monthly depreciation
2. Alternative method highway safety method

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Chose second method D gets their setoff but also owes Ps interest at 10% from time of
attempted revocation till judgment, ouch!

2. Mistake
Renner v Kehl (Ariz SC 1986) p499 jojoba farming
Equitable rescission from a mutual mistake. Buyers of land wanted to start a jojoba farm
S thought land was sufficient for jojoba farming. Turns out not enough water a Ps
wanted out of agreement. TC awarded and CA upheld Ps getting back their down
payment and all damages incurred with drilling test wells etc.
Ariz SC struck down award and said Ps are entitled to their down payment plus the
amount by which their efforts increased the value of the petitioners prop. Not the $229K
in damages awarded because that would shift the risk of mistake onto the Ds which
is incompatible with equitable rescission.

Terra Nova Ins. v Ass. Commercial Corp. (USDC 1988) p504 stolen truck insurance
fraud
Scharbarth commits insurance fraud but insurers pay out anyways, despite
investigating realizing Scharbarth probably commits fraud Ins. pays out claim scared of
retaliatory claim for bad faith insurer. Scharbarth goes to jail after FBI gets involved.
Under Wis. Law plaintiffs cannot recover from Associates what turns out to be a
mistake of fact.
Scharbarth however owes the full amount plus interest

Lenawee County Board of Health v Messerly (Mich SC 1982) p 508 leaky septic tank
Pickles purchased investment property only to discover the septic tank was leaking out
onto the ground. The Board moved in and condemned the property, and seeking a
permanent injunction until the property was brought into compliance. Injunction
granted. Messerlys former buyers filed foreclosure and Pickles countered with

48
rescission. TC found no cause of action, CA found a mutual mistake that went to a basic
element of the contract, an income producing property.
SC Mich reverses In cases of mistake by two equally innocent parties, we are
required, in the exercise of our equitable powers, to determine which blameless party
should assume the loss resulting from the misapprehension they shared. Equity
suggests the risk should be allocated to the purchasers. no rescission

49
Mutual of Omaha v Russell (USCA 1968) p 512 travel insurance
Woman tries to buy travel insurance from machine, no change buys it from booth, but
buys different insurance, she dies on flight back and is not covered under 2nd insurance
because trip lasted one day longer, would have been under 1st insurance. The printed
contract controls family gets nothing

3. Illegality- Violation of Public Policy

Judge can raise illegality concerns sua sponte
Bovard v American Horse Enterprises, Inc. (Cal CA 1988) p517 roach clips and bongs
P, sued to recover promissory notes executed by Ds in connection with Ralph (other
Defendant) purchase of Corp. from P. At trial judge discovered Corp made jewelry but
really bongs and roach clips, and sua sponte stopped proceedings and threw out
compliant.
Discussion of Moran which list several factors
1. nature of the conduct
2. extent of public harm which may be involved
3. moral quality of the conduct of the parties in light of the prevailing standards
of the community
No enforcement of the K
R.R. v M.H. & husband (Mass SC 1998) Surrogacy agreement
Enforceability of surrogacy parenting agreement. Lady backed out after 6 months
pregers despite complex agreement which provided for compensation and custody
rights.
Minority of states outlaw, a few have made them legal, including Fla which requires
intended mother to be infertile. Others place restrictions but Mass Legislature silent
Examine adoption statutes that require waiting period before mother can give away
baby. Thus because of public policy surrogacy agreements are void in Mass.
Leaves open door if unpaid and mother waits to give up, then would be legit, but again
still unenforceable because then not really an agreement.

50
What about intended father having to pay child support to adoptive mother despite not
being real father? Yes he does have to pay in Cal. In Re Marriage of Buzzanca p527

Chapter 6 - Contort
EVRA Corp. v Swiss Bank Corp (USCA 1982)
Hybrid tort, contract Roman hates this shit
Scrap metal dealer lost a valuable contract b/c D failed to effect a telex deposit
Awarded $2.1M by Trial Judge most of which was for lost profit
****Posner decision****
cites Cardozo The sender can protect himself by insurance in one form or another if the
risk of non-delivery or error appear to be too great.*** The Company, if it takes out
insurance for itself, can do more than guess at the loss to be avoided.
P is not entitled to recover consequential damages from D

C. Economic Loss Rule

Local Joint Exec. Board v Stern (Nev SC 1982) p539
Cant work suing over fire at MGM grand
Forseeability of economic loss even when modified by other factors is a standard
that sweeps too broadly in a professional or commercial context.
the law does not spread its protections so far Robins Dry Dock
a. The economic loss doctrine
ii. A judicially created doctrine providing that a commercial purchaser of a
product cannot recover from a manufacturer, under the tort theories of
negligence or strict products liability, damages that are solely economic in
nature
iii. Three policies upon which application of the economic loss doctrine to tort
actions between commercial parties is generally based:

51
 1. To maintain the fundamental distinction between tort law and
contract law
2. To protect commercial parties freedom to allocate economic risk by
contract
3. To encourage the party best situated to assess the risk economic loss,
the commercial purchaser, to assume, allocate, or insure against that
risk

****Exxon-Valdez Oil Spill p 540****

Trans-AK Pipeline Liability Fund, set up to pay for damages, and the Courts agree
owners losses not proximately caused by the oil spill. Either geography too remote, or
impact was on customers who stopped patronizing. Adkins v Trans-Alaska Pipeline

Chapter 7 Breached Sales Agreements

UCC article 2 governs sale of goods
First must show UCC applies sale of fungible goods over $500
2-703 covers Sellers remedies in general and comment 1 tells us that Sellers remedies
are cumulative, unless facts bar a specific remedy. In addition comment 4 guides us to
section 1-106, an umbrella to the entire remedies provisions stating remedies are to be
liberally administered to the end that the aggrieved party may be put in as good a
position as if the other party had fully performed.
2-711 covers Buyers Remedies and 1-106 also applies
McCarthy v Tobin (Mass SC 1999) p557
No UCC b/c about land not goods
Preprinted real estate form OTP- gave extension passed extension by five days and
Same day P signed agreement sent by Ds lawyer D accepted 3rd parties offer to
purchase. P gave agreement to Ds lawyer the next day. P then filed for specific
performance and damages.

52
Was the OTP a firm offer? Controlling fact is intention of parties and OTP was binding
and contains familiar contractual language Aug 16 deadline is merely a condition
subsequent and was waived bc negotiations continued.
Specific Performance appropriate because property is unique and money damages
will often be inadequate to redress a deprivation of an interest in land.

B. Buyers Damages for Sellers Breach

1. Tort v Contract
Selman v Shirley (Oregon SC 1939) p566 This house aint got no Logs
The general rule of damages in fraud is that a plaintiff is entitled to "such damages as
naturally and proximately resulted from the fraud."

2. Expectancy Damages v Rescission-Restitution

Horton v ORouke (Fla DCA 1975) 4 families and Federal tax Lien
Ps, rental agreements to live in houses under construction, moved in then told Federal
Tax Lien encumbering at $94K. Assured Lien would be removed, renters continued to
rent for 22 months. Finally told lien not going to be removed. Then ousted by other Co.
who took control of title. They filed for damages against D construction Co. and original
landlord.
No suggestion of bad faith on Ds part so no damages
Standard measure of K damages for benefit of the bargain: Difference between value
of the land when it should have been conveyed less the contract price as yet unpaid.
Classic expectancy

3. Measuring the Buyers Expectancy

Wilson v Hayes (TX CA 1976) p580 Selling and buying bricks
Sell 600,000 bricks for $6K, Seller, Defendant-Wilson delivered only 400,000 bricks.
Market value $.05/ brick
UCC 2-712 Cover or 2-713 MP:

53
 o 2-712: cover
buyer doesnt have the goods Kd for (for a number of reasons)
formula: return of buyers purchase price + cost of cover (cost to obtain
substitute goods) K price + incidental damages + consequential
damages expenses saved
requirements:
good faithno unreasonable delayreasonable purchase or
reasonable K to purchasefailure to cover leaves all other
remedies intact but may impact consequential damages (cmt. 3)
o you dont have to cover but if you have consequential
damages (i.e., forward sale) and you dont coveryou
will be sued for breach and cannot get damages
o some cases you cant cover, then you have consequential
damages
o 2-713: when buyer doesnt coverreturn of buyers purchase price + MP
KP + ID + CD ES
timing: mkt. price at time buyer learns of breach
location: market price at place of tender
Under 2-711 he gets his $2000 back for price paid then under 2-713 he gets the $8000 for
non-delivery or repudiation.

Texpar Energy v Murphy Oil USA (USCA 1995) p580 asphalt sale
Basically get more than out of pocket expenses and 2-713 proper application
1-106 remedies are to be liberally administered to the end that the aggrieved party
may be put in as good a position as if the other party had fully performed.

Wolf v Cohen (USCA 1967) p 587 No damages in real estate

Suit for damages out of series of real estate transactions; B, going to resell but never did,
supposed 2nd buyer backed out. Then filed damages against Seller

54
measure of damages for breach of a contract of sale is the difference between the K
price and the fair market value of the property.

Hourihan v Grossman Holdings (FLA SC 1982) p590 mirror image house

House built mirror image DCA applied Edgar v Hosea
SC Fla applies 346(1)(a) of RST of K Diminution of value theory
Basically get reasonable costs and in fixing problem or difference in value of the
product contracted for and value had performance been received by the plaintiff; if
this is possible without economic waste

Oloffson v Coomer (Ill. CA 1973) covers Buyers remedies for UCC 2-711 and 2-713 as
well as repudiation 2-610
When Seller repudiated B should have secured new corn that day thus only get market
price at time and place of tender. 2-713(2).
No 2-712 because not cover had unreasonable delay!

4. Buyers Special Damages: Lost business Profits

AM/PM franchise Ass. V Atlantic Richfield Co. (Penn SC 1990) p604 Sold Bad Gas
Agreement required franchises to sells ARCO gas, blended with oxinol and caused
consumers to have car problems. Precipitous fall off in gas sales during period in which
they started selling this bad gas.
Rely on 2-714 and 2-715
2-714: value of conforming goods value of non-conforming goods (general damages)
2-715: incidental and consequential damages
a.

55
 1. loss due to general or particular need
2. known at time of K-ing by S
3. couldnt be avoided through cover or otherwise (only economic
damages)
b. injury to person or propertyonly economic damages

Lost profits a form on consequential damages: 3 types of lost profits

1. lost primary profits (difference what B would have earned and what they did
earn bc of breach)
below only available in breach of warranty cases
2. lost secondary profit (loss of secondary goods)
3. loss of prospective profits (aka good will damages) (AM/PM first case in
Penn to allow)
2 and 3 become more speculative
for Good will damages [p given opportunity to set forth but must show (a) such profits
were related to the breach of warranty and (b) there is a reasonable basis on which to
calculate]

5. New Business Rule

Mindgames v Western Pub (USCA 2000) Cleaver Endeavor: the most fucking ironic
game name ever
Wanted $40M in expected profits that it never earned bc of Ds lack of marketing
Abrogates new business rule for Ark [even though fed court]
Real question is to undue speculation; P had no track record when he created cleaver
endeavor could point to no other games he had made. Plus $40M a bit steep had to have
sold 10M copies of game to earn that.

6. Emotional distress stemming breach of contract

Erlich v Menezes (Cal SC 1999) p619 leaky dream home

56
Wanted dream house, but contractor built house that leaked everywhere. Claimed
emotional distress had physical illness, heart condition, brought on by shoddy
construction. damages those likely to result therefrom
Need separate tort to collect emotional distress damages, not recoverable in breach of
contract

7. Economic loss rule revisited (p539 originally) p630

***Tort or product liability avenues of recovery possess special advantages: it avoids
wavier (on labels or packaging), it liberates P from Hadley v Baxendale contemplation
limit on special damages, unlocks the plaintiffs access to recovery for mental suffering
and to possible punitive damages.
Line between product liability and contract-warranty doctrines:
1. D has no tort-products liability duty when a defective product causes a P purely
monetary harm Seely v White motor Co. only contract damages, when product
injures only itself.
Second test minority nonexistent

8. Reliance Damages
Wartman v Hightower (MD CA 1983) p635 Flagpole sitter venture
Met with attorney to incorporate venture, Att. Oked selling stocks then realized
problem contacted Hightower and offered them to meet with incorporation specialists
They refused bc would have cost $10K, Jury gave them reliance damages
Appeal over reliance damages
ordinarily profits lost due to a breach of K are recoverable. Where anticipated
profits are too speculative to be determined, monies spent in part performance, in
preparation for or in reliance on the contract are recoverable.

II. Sellers Remedies

A. Specific Performance

57
Centex Homes Corp v Boag (NJ AC 1974) p641
Seller trying to force Condo on Couple
Guy buys house then transferred to Chicago, stops payment on check, down payment.
Seller, Vendor, asks for specific performance, that agreement be performed in full.
Specific performanceshould be confined to those special instances where a
vendor will otherwise suffer an economic injury for which his damage remedy at law
will not be adequate, or where other equitable considerations require that the relief
be granted.

B. Sellers Damages
1. Sellers expectancy and other damages
basic expectancy K price minus market price [at time and place for tender]
or KP-MP
2-706 KP- Resale price
2-709 recover price
2-708(2) sellers lost profit
2-718 liquidated damages

Jagger Brothers v Technical Textile (Penn AC 1964) p646 Yarn repudiation

Agreement to buy 20,000 pounds of yarn at $2.15/lb. buyer repudiate after only taking
delivery of 3,723, noticed seller would refuse future deliveries.
S awarded $4069.25 in a bench trial, MP $1.90 award represent 16,277 times the $.25
difference between KP and MP. [(KP-MP) x 16,2777]
Pursuant to 2-708 judgment affirmed

McMillian v Meuser Material and Eq. (Ark SC 1976) p 648 Bulldozer resale
K to sell bulldozer, Buyer breached supposedly over wrong delivery date.
S resold 14 months later, sought damages under 2-706, which provides for difference in
KP- lower resale price; resale was commercially unreasonably delayed.

58
Remittitur (reduction) of damages award, incidental damages oked bc reasonable to
upkeep
Sprague v Sumitomo Forestry Co. (Wash SC 1985) p651 No notice of resale Logs
Logger, P, entered into K to sell logs to D, who cancelled K bc of difficulties at its
sawmill. In answer B said mitigate, S then did but failed to notice B as required by 2-
706(3). Not an affirmative defense for B, rather element of Ss claim under recovery
under 2-706 thus S must prove at trial. So no recovery under 2-706
But 2-703 allows for elections of remedy coupled with 1-106 they must be administrated
liberally so can recover under 2-708(1)(classic expectation damages): MP-KP+ID-ExS
affirm most of award some discussion of what is difference between ID and CD which
are not recoverable under 7-708(1)
[but are allowed under 2-708(2) subject to undue speculation dealt with infra]
incidental damages are normally incurred when a buyer repudiates and include
expenses incurred in transporting, storing, or reselling the goods.
Consequential damages do not arise within the scope of the immediate buyer-seller
transaction but rather stem from the losses incurred by the non-breaching party in its
dealings, often with third parties, which were the proximate result of the breach and
which were reasonably foreseeable by the breaching party at the time of contract.

2. Sellers profits
R.E. Davis Chemical v Diasonics Inc lost volume seller p655
Medical equipment B breached, S sued claimed entitled to offset of 2-708(2) as a lost
volume seller; 2-708(2) provides if the measure of damages provided in subsection (1)
are inadequate to put the seller in as good a position as performance would have done
then the measure of damages is the profit (including reasonable overhead) which the
seller would have made from full performance by the buyer together with any ID
provided in this article (2-710).
Lost volume seller not solely focused on capacity to sell but rather would it have been
profitable for the seller to produce both units.

59
 D. Sellers restitution
Wellston Coal v Franklin Paper Co. (Ohio SC 1897) p673
Suit in Quantum Meruit for coal K breached by D in down months when MP was below
KP. Executed K during winter when KP was below MP.
justice and fair dealing require that the D, having repudiated the K, should pay the
market price for the coal at the time it was delivered.

Dietz v Dietz (Minn SC 1955) p 676 mom and son joint tenants p676
Mom conveys half of house to son as joint tenants, in consideration for his promise to
take care of her for the rest of her life. He gets married and feuds begin, ending with
him ousting her through. She files a claim in unjust enrichment thus imposing of
constructive trust is proper
Constructive trust may be imposed where the plaintiff shows the existence of
relationship of justifiable reliance or confidence (or fiduciary duty) and the abuse by
defendant of confidence and trust bestowed under it to plaintiffs harm.

Calculating Damages
1. General damages: Diminished value v Cost to repair
Hewlett v Barge Bertie (USCA 1969) p782
If reclamation and repair costs exceed the ships just value at the time of casualty,
then it is a constructive total loss and the limit of compensation is the value plus
interests

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