Cases, Practical Problems, and Exercises
Weaver, Partlett, Lively, Kelly
Outline by Brian Pedigo
Spring 2006, Whittier Law School
Notes: Spoken by Professor Rose
a. Introduction: remedies are mostly about civil actions in equity. We will not be talking about
criminal remedies or administrative remedies.
b. Damages at law: monetary, general, special, punitive, statutory, liquidated, and nominal. Law
also deals with real trusts, real statutory liens, real statutory subrogation, ejectment, replevin
and detinue (getting personal property back), quasi contract, assumpsit, and legal title.
i. Note: Mississippi, Maryland, and Delaware still have separate courts for issues of law and
c. Equitable Remedies: injunctions (temporary restraining order, preliminary, permanent),
specific performance, constructive trusts, equitable lien, equitable subrogation, accounting for
profits, rescission/reformation, and equitable title.
i. Note: CA will not issue a mandatory specific performance order on a contract (in contrast
to only a prohibitory injunction). CA will never have a jury trial in equity, while other
courts may. Courts prefer prohibitory injunctions over mandatory injunctions because of
the ease of supervision issues.
2. Equity and Equitable Remedies
a. A Historical Perspective: we no longer have trial by combat, trial by ordeal (tied to rock &
thrown in water), or trial by oath (testing memory for mistakes). Lawsuits were started by
writs, which where “set in stone.” You get a jury trial when you sue at law, but not when you
sue in equity because of the history of the courts of equity. If it can be handled at common law,
you cannot get equity. You always first allege in equity that there is no adequate remedy at
i. Maxims of Courts in Equity (part of the CA Civil Code § 3509 - 3548):
1. He who comes into equity must come with clean hands.
2. He who seeks equity must do equity.
3. Equity is a court of conscience.
4. Equity does not suffer a wrong to go without a remedy
5. Equity abhors a forfeiture
6. Equity regards as done that which ought to have been done
7. Equity delights to do justice and not by halves
8. Equitable relief is not available to one who has an adequate remedy at law
9. Equitable relief is discretionary
10. Equity aids the vigilant, not those who slumber on their rights (laches)
11. Equity regards substance rather than form.
12. Equity acts in personam
13. Equity is equality
14. Equity follows the law.
15. Equity will not aid a volunteer
16. Where the equities are equal, the law will prevail
17. Equity imputes an intent to fulfill an obligation
18. Where the equities are equal, the first in time will prevail.
a. Note: when maxims don’t help, balance the hardships. You can also balance the
equities (the effects on the public).
b. Equity in the United States: was transplanted to U.S. from England. Has merged with most
courts of law. FRCP 2 – there shall be one form of action known as the civil action.
c. Equitable Remedies Today: still retain some distinctions from legal remedies.
i. Conscience and Equity: equitable remedies are only available 3when equity and
conscience demand them. Maxims (above) are used to determine morality or justice.
ii. Equitable Remedies are granted in personam: this means that ∆ is ordered to do or not
do something, subject to penalties of contempt.
iii. Inadequacy of Legal remedy / irreparable harm: equitable relief not available unless
π’s legal remedy is inadequate. This is the primary hurdle.
1. Note: in order to get the judge to give you relief, it helps a lot to say that there is
irreparable harm. Rose wants inadequate legal remedy and irreparable harm to be
separate and distinct – rather than synonymous. If damages are too hard to calculate,
then there may be an inadequate remedy at law. Must show irreparable harm before
the granting of equitable relief. Catch-phrase is “money won’t make me whole.”
a. Unique property
b. Damages impossible / difficult to calculate
c. Defendant is insolvent
d. Multiple Proceedings Required
iv. Equitable relief is discretionary: a court may deny equitable relief even though π’s legal
remedy is inadequate. E.g. a dog-barking nuisance may be limited to damages only, not an
injunction, based on the court’s discretion. Courts will not grant equitable relief if it would
require judicial supervision over a long period of time.
d. Equitable Defenses: the major ones are unclean hands, unconscionability, laches, and estoppel.
i. Unclean Hands: he who comes to equity must come with clean hands. The court will
leave you as they found you if you come to court with unclean hands. The maxim must be
applied only where the π has dealt unjustly in the very same transaction of which he
complains; equity is not an avenger at large. If the parties are found in pari delicto (in
equal fault), then the court will leave them as it found them.
1. Note: in a real-world case, if the π is found to have unclean hands and the parties are
not in pari delicto, then π loses in a court of equity. Π must pursue the claim in a court
of law. The court doesn’t want to get its hands dirty. Irreparable harm is not the same
as inadequate remedy at law.
ii. Unconscionability: equity does not enforce unconscionable bargains. The purpose is to
prevent oppression and unfair surprise, but not to disturb allocation of risks because of
superior bargaining power.
1. Note: liquidated are frowned upon by the courts because the court is more concerned
about actual damages.
iii. Laches: equity aids the vigilant. Laches is any unreasonable delay by the π in institution
or prosecuting an action under circumstances where the delay causes prejudice to the ∆.
1. Note: latches is a fuzzy line where the court will look to the SoL to get guidance, but it
is not bound by it. There is no duty to bring suit when you’re a minor. Always be
thinking of prejudice when dealing with laches issues. Also look to see if the delay is
1. Promissory Estoppel: a substantive CoA which permits foreseeable reliance to
substitute for consideration and thereby supplies the basis for a breach of K action. It
can also be used to estop an assertion of statute of frauds defenses. Binding if
injustice can be avoided only by enforcement of a promise.
2. Equitable Estoppel: a purely remedial device which precludes equitable relief but
still allows π to seek legal remedies. Equitable estoppel looks to the following factors:
a. Π knows the relevant facts
b. ∆ acts in reasonable reliance
c. ∆ ignorant of true facts
d. ∆ suffers detrimental reliance
i. Note: the gov’t usually cannot be estopped because they’re too big and too
incompetent to be stopped.
e. Right to Trial by Jury: the 7th Amendment preserves the right to a jury trial at law. FRCP 38
requires a litigant to demand a jury trial.
i. Note: if 100% equity, then no jury. If 100% law, then yes jury. If mixed Q of law and
equity (e.g. injunction + damages) then decide legal questions with a jury first, and then
equitable issues with judge. The Federal system favors juries (the modified historic). CA
is a strict (or pure) historical, which asks what was the law is 1850 as far as jury trials. In
CA, if you have an K action without consideration, then you don’t get a jury. Fed. cts have
eliminated the equitable clean-up doctrine, which cleans up incidental issues of law.
3. Enforcement of Equitable Decrees
a. Contempt Defined: an offense against the dignity of the court; e.g. a refusal to obey a court
order. Vehement language alone is not enough to punish for contempt. Contempt is something
that constitutes an imminent, not merely likely, threat to the administration of justice.
i. Summary Disposition: may occur when committed in the actual presence of the court.
ii. Disposition Upon Notice and Hearing: if not in presence of ct, then need notice/hearing
to get the facts straight.
iii. Note: the lingo in civil contempt is to ask for “an order to show cause for why ∆ should not
be held in contempt.”
b. Civil v. Criminal: whether something is civil or criminal contempt all depends on the sanction
i. Criminal contempt: seeks to punish through fine or imprisonment for past conduct
(punitive) that disobeys or interferes with the court.
ii. Civil contempt: seeks to coerce compliance or to compensate one for losses sustained by
∆’s non-compliance. Fine limited to actual loss (compensatory), are wholly remedial. A
coercive sanction is ok if purge-able and easy to gauge compliance.
1. Note: if you “have the keys to the jail cell,” it’s civil. If not, it’s criminal.
c. Procedural Requirements:
i. Direct Contempt: occurs in the presence of the court and obstructs administration of
justice; may occur through letters. Allows for summary disposition.
1. Absence + Inadequate Explanation = Direct Contempt
ii. Indirect Contempt: an act committed not in the presence of the court, but at some
distance. Requires disposition upon notice and a hearing.
iii. Constitutional Requirements: when the criminal contempt brings a serious punishment,
there must be a right to a jury trial. However, many contempts are mere petty offenses not
within the jury trial provision of the Const. Trial judges are given discretion to handle
disruptive and defiant defendants, even as far as removing him from his own trial.
d. Duty to Obey & Collateral Challenges: an order issued by a court with jx over the subject
matter and person must be obeyed by the parties until it is reversed by orderly and proper
proceedings. Negligence is not enough to be hit with criminal contempt.
i. Contempt Defenses:
1. Not bound by decree
2. No notice
3. Impossible to comply
ii. Collateral Bar Rule: an injunction must be obeyed, otherwise criminal contempt will be
found for defiance of even an unconstitutional injunction. This rule does not apply to civil
contempt, which can be invalidated on appeal. i.e. court orders, even those that are later
ruled unconstitutional, must be complied with until amended or vacated.
1. CA Rule: CA is one of the few states that will vacate a criminal contempt sanction.
iii. Transparently Invalid vs. Merely Invalid: if the court finds the order to have had any
pretence to validity at the time at it was issued, the court should enforce the collateral bar
rule (merely invalid) and enforce the criminal contempt for failure to obey. An exception
to the collateral bar rule is appropriate for transparently void orders, where there is no duty
to obey. Pure speech and prior restraints make something presumptively unconstitutional.
The Supreme Court has never upheld a prior restraint on pure speech.
a. Nature and Purpose of Injunctive Relief:
i. Mandatory Injunctions: compels (mandates) an act.
ii. Prohibitory Injunctions: forbids (prohibits) an act.
b. Standards for Issuance of Injunctive Relief:
i. Permanent Injunctions:
ii. Temporary Injunctions: requires π to show that there would be immediate and
irreparable injury absent an injunction. Both require one to post a bond in case an
injunction is issued in error.
1. TRO: in order to get a TRO, π must show:
a. Irreparable harm (e.g. business failure)
b. Π’s hardships outweighs ∆’s, and public’s, hardships
c. Likelihood of Success on the Merits
d. No adequate remedy at law (e.g. difficult to calculate $ damages)
i. Note: Most jurisdictions require prohibitory TROs and not mandatory; TROs
can be issued ex parte, unlike the preliminary injunction. In CA, there are no
mandatory injunctions for personal services contracts. Arbitrators issue orders
or awards, not injunctions, and later a judge “rubber stamps it,” turning the
order into an injunction. Prelim injunctions can get interlocutory appeals.
TROs cannot be appealed, but you can get a writ of mandamus that will
prevent the trial judge from issuing the TRO.
ii. Preserve Status Quo: TROs purpose is to preserve the status quo and prevent
irreparable harm just so long as necessary to hold a hearing and no longer.
One way to get an ex parte TRO is if you are afraid that ∆ will destroy or hide
evidence after getting notice.
iii. Question: why is there an exception for lawyers – being forced to represent
2. Preliminary Injunction: cannot be issued ex parte.
iii. Hearing Requirement: one can get an emergency ex parte TRO only until a hearing can
be held. You can give notice by telephone in this situation. There usually must be a good
reason for ex parte relief, otherwise it may be an abuse of discretion. An ex parte order is
proper only when there is no reasonable alternative.
iv. Persons Bound: a TRO or prelim injunction is binding only upon the parties to the action,
and upon those person in active concert or participation with them who receive actual
notice of the order. If one has no connection to the one enjoined, then an injunction cannot
enjoin the world. There is liability for contempt only if aiding/abetting. Willful violation
of an order by one having notice of it constitutes criminal contempt. One of the only times
you can bind the whole world without notice is in real property cases, where it is
necessary. A BFP, with knowledge of a wrong, taken on that liability from its predecessor.
v. Notice Requirement: actual notice must come from a credible source and it also must
inform ∆ clearly and plainly from what act he must abstain. A telegram is sufficient. One
cannot intentionally try to prevent the formality of notice in order to escape it.
vi. Bond Requirement: no TRO or injunction shall issue unless π gives security for any
wrongful suffering of ∆ who is wrongfully enjoined or restrained. The award of damages
on the bond is not punitive, but rather, compensatory. A party injured by the issuance of an
injunction later determined to be erroneous has no action for damages in the absence of a
bond. W.R. Grace v. Local Union, 461 U.S. 757. “The purpose of the bond is to protect
the court from embarrassment.” –Rose The π asks for something, and the judge may issue
the request wrongly.
vii. Stays: the adverse party to a preliminary injunction or TRO may appear and move for its
dissolution or modification, which is called a stay. A preliminary injunction can be
modified. A stay is never appropriate unless the movant can show that success on appeal
is probable. If a TRO would devastate the other side, then the court will balance the
equities and probably issue a stay. Congress must command explicitly in its statutes that
discretion be taken away from the courts in order to take it away from a court of equity; a
statute cannot take away a court’s discretion impliedly.
c. Permanent Injunctions:
d. Framing the Injunction:
i. Specificity: injunctions need to be precise to prevent unfettered discretion. E.g.
“immediate vicinity” is not specific enough.
ii. Family issues: courts of equity are reluctant to assume jurisdiction over family issues.
iii. Clear and unequivocal: there must be a clear and undoubted disobedience of a clear and
unequivocal command in order to be guilty of contempt of a court order.
iv. Note: you do not need to give reasons in the framing of the injunction.
v. Injunctions use stricter scrutiny than legislation
e. Experimental and Conditional Injunctions: the mere fact that π is suffering injury does not
mean that he will receive the injunctive relief desired. On e.g. of an experimental injunction is
to enjoin ∆ until ∆ pays π fixed damages; the result may be a taking for private use.
i. Note: Rose does not like the word “experimental.” He prefers “partial.”
ii. Substantial Damage: is typically $100 a year or more. Whalen.
f. Decrees Affecting Third Parties: injunctions may reach out and effect others who are not
even involved in a lawsuit, e.g. desegregation cases. However, an innocent 3rd party who
violated no law can not be forced to pay the damages of the ∆.
g. Modification of Decrees: permanent injunctions can be modified or dissolved under
appropriate circumstances. FRCP 60b. One example is when a law is eroded or overturned on
which the injunction was based; another is when the facts change. “A subsequent change in
decisional law is an appropriate basis for dissolving a continuing injunction. When a change in
the law authorized what had previously been forbidden, it is abuse of discretion for a court to
refuse to modify an injunction founded on the superseded law.”
h. Injunctions Against Criminal Activity: courts are reluctant to enjoin the commission of
future crimes. “Equity does not enjoin criminal activity.” Reasons:
i. Criminal laws are sufficiently effective in deterrence / would be futile decree
ii. Loss of Constitutional Rights:
1. Trial by Jury
2. Proof Beyond a Reasonable Doubt
iii. Stigma or embarrassment
iv. Exceptions to injunctions against criminal activity:
1. Public nuisance: depending on the degree of harm, a court might enjoin a criminal
nuisance (by statute/ordinance) + civil nuisance.
i. Injunctions Against Litigation:
i. State Injunctions against Foreign State Litigation: general rule is that a court cannot
enjoin litigation. IL refused to recognize an injunction, granted in MI, against π’s litigation
ii. State Injunctions against Federal Litigation: state courts are completely without power
to restrain Federal court proceedings in in personam actions. The general rule is that state
and federal courts will not interfere with or try to restrain each other’s proceedings. A writ
prohibiting Federal litigation is invalid.
1. Exception: when a court has custody of property.
2. Question: why would an entire class get hit with a contempt fine because of the acts
of their lawyer?
3. Prerogative Writs:
a. Habeus Corpus (bring forth the body – free from imprisonment)
b. Prohibition (directed towards official/judge to take/cease action on a case)
c. Mandamus (orders an official affirmative action)
e. Quo warranto (where gov’t sues on your behalf)
iii. Federal Injunctions against State Litigation: Younger v. Harris (1971) held that the
possible unconstitutionality of a statute on its face does not in itself justify an injunction
against good-faith attempts to enforce it; one may also need to show bad faith, harassment,
or any other unusual circumstances that would call for equitable relief.
1. Abstention: when Federal courts abstain from adjudicating a state action. This is
sometimes called “Our Federalism.”
2. Note: to get an injunction or any kind of relief, you must at least be threatened of
prosecution; fear of prosecution not enough for standing. Federal courts require actual
cases or controversies. State courts don’t need actual cases or controversy – they can
issue advisory opinions. Everything turns on once the DA files against ∆. Once this
happens, the Fed Ct is very reluctant to step in without an express exception
3. Federal Anti-Injunction Statute: a Fed Ct may not grant an injunction to stay
proceedings in a State court except as expressly authorized by Act of Congress…”
a. 42 U.S.C. § 1983: is an expressly authorized exception. Mitchum v. Foster (1972).
j. Structural Injunctions: these are designed to eliminate past violations and regulate future
i. Desegregation Cases: courts may not order the State to spend tax money to remedy de
facto segregation in schools. Missouri v. Jenkins (1995).
ii. Attorneys Fees: the American rule is that you don’t get attorney’s fees even if you are the
winner. The exceptions are (1) contract, or (2) by statute.
See Civil Rights Attorneys Fees Awards Act is 42 USC § 1988.
iii. Good Quote: a court must exercise the least possible power adequate to the end proposed.
Anderson v. Dunn, 6 Wheat. 204, 231 (1821); Spallone v. U.S., 493 U.S. 265.
k. Extra-Territorial Decrees:
i. Decrees Affecting Land: a court cannot convey title to land located in a foreign
jurisdiction. However, a deed made by force on a person can be enforced.
1. Impossibility: a court of equity can never compel a ∆ to do anything which is not
capable of being physically done within the territorial jurisdiction of the court.
However, a court has jurisdiction to protect property within its jurisdiction.
2. Limited Jurisdiction: the decree of a court can not operate to transfer title to lands
situated in a foreign jurisdiction. A judgment or decree in rem can not operate beyond
the limits of the jurisdiction or state wherein it is rendered.
a. Constructive Trust: is not a real trust (with a document). It is a legal fiction (that
the court creates) that says that the heirs are the legal trustee, and holds land for the
benefit of the beneficiary. A constructive trust does not require full faith & credit.
3. Note: if a person refuses to convey property after a court orders it, the court can
appoint a receiver to execute the deed (e.g. the bailiff becomes the master who will
sign the deed, which will be respected.) FRCP 70.
ii. Decrees Affecting Personal Property:
1. Sister States: the courts of sister states may be relied upon (comity) to aid in serving
the ends of justice whenever our own process falls short of effectiveness (e.g. issuing a
mandatory injunction for the shipment of a horse from another state to a receiver).
a. Note: full faith and credit is mandatory for judgments – not
preliminary/permanent injunctions (because these can be modified).
l. National Security: New York Times v. United States (1971) said that the government could
not put a prior restraint on the publication of the Pentagon Papers about the Vietnam war. i.e.
First Amendment outweighs traditional rules of equity.
i. Hydrogen Bomb: the gov’t may restrain the publication of information on how to produce
an h-bomb because there is a much higher risk of grave danger that medium-sized
countries will build these extremely destructive bombs.
ii. Forced publication: there’s a problem with a court forcing a newspaper to publish
something. The one way to get around this is if the publication is running an ad for a
direct competitor, then this may trigger an antitrust problem. The way the FCC can
regulate politics on TV is because it is a limited resource; newspapers do not have to give
equal time to political candidates.
a. General Principles: restitution is both law and equity. In law, restitution of property is called
replevin; in equity, it is called equitable replevin – which is actually an injunction. In law,
getting someone off your land is called ejectment. In equity, an injunction to stop trespassing.
In law, a quasi-K is the remedy for unjust enrichment. In equity, there is the constructive trust,
the equitable lien, and subrogation as the remedies for unjust enrichment.
i. Tracing: in equity, you follow the line of who is the rightful owner to determine who owns
ii. Officious Intermeddler: remedies for unjust enrichment are applicable only if the person
conferring the benefit is not an officious intermeddler. Officious means interference in
the affairs of others not justified by the circumstances under which the interference takes
iii. BFP: a bona fide purchaser for value is a defense to a replevin action. However, you are
not a BFP if the property is registered as stolen (constructive notice).
b. Measuring the Enrichment:
c. Special Restitutionary Remedies:
i. Constructive Trust: a trust raised by a court of equity against a person who obtains or
holds legal title to property through fraud, abuse of confidence, or some other
unconscionable conduct; it is title that in good conscience should not be held.
1. Notes: Rose always uses the case of an embezzler to use a constructive trust. If
embezzled money is used to buy real property, then you get a constructive trust. If the
land already exists and embezzled money is used for improvements, then you get an
equitable lien (btw: a mortgage is a lien). A lien is a guarantee that you’ll get paid out
of the property itself.
2. Note: you can get a constructive trust easier if you have a special relationship – for
e.g. husband-wife, Lawyer-client.
3. Absence of Fraud: if no fraud or unconscionable conduct, then no trust. Mere failure
to perform an agreement does not rise to the level of a constructive trust.
ii. Equitable Lien: similar to a constructive trust, but instead of requiring ∆ to hold the
property in trust, the court imposes a lien against property as security for π’s interest. The
purpose of the lien is to prevent unjust enrichment. It is cut off if property is transferred to
1. Note: you have to get a court order before you get lis pendens because it puts a cloud
on title by giving notice to the whole world of caveat emptor.
2. Advantages to Trusts & Liens:
a. Tracing: tracing traces property into other forms, and give π’s priority over other
b. Theories of Commingling: the rule in Hallet’s Case is the assumption that the
thief will always withdraw his money first; and he will always put his money back
in first. Usually the victim gets all of his money back because the thief put all the
money back under this system.
i. Restatement of Restitution § 212: assumes that when the thief takes money
out, he takes out his own money. However, if the thief takes out more money
than the victim gave, then it wasn’t the victim’s money, and it isn’t intended to
be repaid. i.e. non-FIFO, or LIFO. Look at the lowest intermediate balance to
find how much $ is the π’s.
ii. Accounting Issues: Rose finds LIFO and FIFO very important. These issues
come up mostly when dealing with a thief/embezzler.
1. FIFO: take the first transaction out first.
2. LIFO: take the last transaction out first.
c. Judgment-Proof: if a judgment on a tort would be hard to collect, waive the tort,
and go for the unjust enrichment (trust/lien) to get your property value back without
being affected by the # of creditors going after the bad guy.
iii. Subrogation: subrogation is the substitution of another person in the place of a creditor, so
that the person in whose favor it is exercised succeeds to the right of the creditor in relation
to the debt. Failure to disavow benefits of a fraud will preclude one from getting the
benefits of subrogation. Cosigners are subrogated into the position of the defaulting
6. Declaratory Judgments
a. Generally: DJs are statutory remedies. The purpose of a DJ is to determine rights, obligations,
or status, and to eliminate uncertainty.
b. Case or Controversy: the Constitution limits the exercise of the judicial power to cases and
controversies. A controversy must be definite and concrete, and real and substantial. A DJ
must meet the sufficient immediacy and reality test. A hypothetical threat is not enough to get
d. Standards of Review:
e. Declaratory Judgments in Context
f. Effect of Declaratory Judgments
7. Damage Remedies
a. General Damage Principles: damages seek to place the injured party in the position she would
have been if the wrong had not been committed. The American rule is expectation (benefit of
the bargain) and the English rule is restitution (restoring to prior-K). You can’t get punitives on
a breach of K. There is a good faith exception to the American expectation rule where only
reliance damages are awarded.
i. Note: you can award the following costs:
1. Transaction Costs
2. Loss of use
3. Loss of profit
4. Costs of replacement
5. (costs avoided)
6. Consequential Damages
7. Cover – Difference
8. Pain & Suffering
9. Medical Costs
10. Lost Earnings / Lost Use
ii. Permanent vs. Temporary Injury: permanent damages are when something is totaled;
temporary injury takes $ < FMV to restore.
iii. Economic Waste: courts will not enforce a grossly disproportionate cost to value, as it is
economic waste. The only exception is if it is enforced by statute, or if it is the purpose of
iv. Valuation: there are different ways to value things:
1. Comps: find comparable things in the market
2. Book Value: takes into account the accounting fiction of depreciation
3. Stream of Earnings: distinguish the slot machine itself from the ability/license to
operate a slot machine.
4. Present Value of Future Money: you have to predict the costs incurred in the future.
In a wrongful death case, you have to figure out what are the “lost years.” In personal
injury cases, you have to know every factor that will need to be calculated to put the
person into the place that they were in.
v. Applying Market Measures: one is allowed to claim what’s typical in the ordinary course
of business. There are always costs avoided to subtract from gross.
vi. Loss of use: damages for loss of use should not exceed the value of the property (or a
reasonable replacement). One may get reasonable compensation for inconvenience or
monetary loss suffered during the time required for repair of damaged property. Loss of
use is known as consequential damages.
vii. Incidental Loss: the cost of making substitute arrangements.
viii. Consequential Damages: note the doctrines that limit recovery when the costs/damages
could have been avoided.
ix. Pre/Post Judgment Interest: one can get pre-judgment interest if it was liquidated
damages (e.g. medical bills); one can get post-judgment interest on the pre-judgment
interest. Post judgment interest is usually set by statute and it is a % that is added to the
judgment per a specified amount of time that the judgment is not paid.
1. Note: the amount of interest is usually set by state statute. E.g. Rose worked on a
million dollar suit that had 10% interest from the date of filing. Interest is given for
the loss of use of money.
x. Duty to Mitigate: a buyer can only recover for the lost profits (consequential damages) he
could not have prevented by cover or otherwise.
xi. Cost of Production: always remember how much it costs to produce X in calculating
b. Limits of Market Measures:
i. Subjective Value: one can recover for actual or intrinsic value to property but cannot get
any unusual sentimental value. Jx differ on whether to award any more than the fair
market value (e.g. the accidentally killed dog gets no subjective value added to owner).
Courts usually look to the objective fair market value.
ii. Negligent torts: in neg tort cases, compensation to the π is the goal, not enrichment, or
punishment to ∆.
iii. Loss of Enjoyment of Life: courts differ as to whether to award damages for loss of
enjoyment of life if the person/victim is unaware of the suffering.
1. NY Rule & Trend: NY held that cognitive awareness is a prereq to recovery for the
loss of enjoyment of life.
2. Note: generally. the more you “divide up” damages, making different categories, the
more money will be awarded.
iv. Emotional Distress: K actions are hard to get emotional distress damages – tort actions
are much easier. The exception to K are: promise of marriage, funeral parlors, and even
v. Children as Liability: children might be viewed as a monetary liability, not an asset.
However, courts want to award $ for the wrongful death of a child, so it will look for value
wherever it can.
c. Limitations on Recovery:
ii. Foreseeability: apply the rule of Hadley v Baxendale in K cases; asks whether the loss
was in the contemplation of the parties at the time the K was made.
iii. Certainty Requirement: damages must be shown with certainty. Look for track record,
comparables, or Ks that indicate future worth.
1. New businesses: generally, new businesses have no track record to meet the certainty
requirement of future income / lost profits.
2. Wrongdoer rule: when the existence of damage is certain, and the only uncertainty is
to the amount, the burden of uncertainty as to the amount of damage is upon the
3. Hybrid Damages: an income-producing asset may get special/consequential damage.
If uncertain, most πs can get at least reliance damages, which the market value of a
chance can be evidenced by experts.
iv. Avoidable Consequences: requires courts to treat losses that should have been avoided as
if they had been avoided. ∆ does not have to pay for avoidable losses.
1. Benefit rule: the value of the benefit conferred is considered in mitigation of
damages, where this is equitable.
2. Collateral Source rule (exception to benefit rule): draws the line between benefits
that ∆ provided by committing the tort and benefits that were provided by others.
Policy is that ∆ should not be benefited for his tort, and the wrongdoer should be made
to pay whether or not the victim got compensation from other sources.
v. Public Policy
d. Agreed Remedies:
i. Liquidated Damages: reduces the uncertainty as to the amount of damages. Penalty
clauses are unenforceable.
ii. Common Law: damages may be fixed in the K if they are both
1. Difficult to prove and
2. Amount is in reasonable relation to the actual loss
iii. UCC: damages for breach of K by either party may be liquidated in the agreement, but
only at an amount that is reasonable in light of the anticipated or actual harm caused by the
breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of
otherwise obtaining an adequate remedy.
iv. Penalty provision: a penalty provision violates public policy and is therefore void. This
cannot be waived.
v. Disclaimer of Consequential Damages: is effective unless it unconscionable. UCC 2-302
requires both substantive and procedural unconscionability.
e. Punitive Damages: purposes are to achieve deterrence, to punish, and to make an example
(exemplary damages). These are usually “disguised attorney’s fees”. Will be reviewed for
whether it was influenced by passion or prejudice. They are designed to hurt, not to kill; you
can’t take more than net worth.
i. Restatement Rule: Punitives can be awarded against a principal because of an act by an
agent if but only if:
1. Principal authorized the act
2. Principal was reckless in employing agent
3. Agent was managerial and acting in scope of employment
4. Principal ratified or approved the act.
ii. CA Rule: must show express or implied malice, oppression, or fraud.
iii. The 3 Guideposts: comes from the Sup Ct in State Farm v. Campbell
1. Degree of reprehensibility of ∆’s conduct
2. Disparity between the actual or potential harm suffered by π and the punitive
3. Difference between the punitive damages awarded by the jury and the civil
penalties authorized or imposed in comparable cases.
f. Attorney’s Fees: