1 REMEDIES FALL 2005 DAMAGES A. Rightful Position 1. Value • When ascertainable use fair market value of property at the time of taking. Be careful to use FMV of specific item with all uniqueness. If Horses are trained then P must show value of specific training. P need not be exact but should be as close as possible. • Exception --when market value has been too difficult to find, or when its application would result in manifest injustice to owner or public, then use replacement cost subject to reasonableness. Like church property, then you take the replacement cost and subtract depreciation, maybe don’t subtract depreciation as the decent says. • With regards to pain and suffering, there must be proof of specific pain and suffering from each individual P. • Always look at the duty to mitigate. • Component Parts – If only component part is damaged and can bifurcated from the whole, then damage for only component part will be assessed. • For replacing special purpose property, value is reasonable replacement cost less depreciation. • Crops are valued at the time of harvest. • Look at Offsetting Costs – P does not get gross value, if he avoids costs as a result of D’s actions, those costs should be offset (to get to net value). • Stocks o Majority – Highest value between time of conversion and time of trial (or other set certain date). o Minority – Value of stock at time of conversion. o NY and Federal – Highest value between time of conversion and reasonable amount of time. 2. Reliance and Expectancy • Reliance is out of pocket expenses • Expectancy is the lost profits from the expected transaction • Restitution is not wanting the D to be unjustly enriched, put D in position he would have been, had the contract not been breached • Breach of Warranty Situation • Majority says you get difference between what was warranted and what was delivered • Minority says you get difference between contract price and what was delivered • In cases that can be tort or contract (fraud) • Majority (but not federal) – no distinction between tort or contract cause of action, bring either C of A and get expectancy damages 2 • Minority – must bring contract C of A to get expectation damages, for tort cause of action only get reliance 3. Consequential Damages • Contract Cases • The general/direct damages are the expectancy damages. This is the direct result of the breach. Put the P in position he expected to be had the contract been fulfilled • The special/consequential damages are the damages that flow indirectly from the breach (i.e. reliance damages). These are recoverable only if reasonably foreseeable at the time contact if formed. • Tort Cases • The general/direct damages are pain and suffering (compensatory damages). • The special/consequential damages are medical expenses and lost earnings. These are only recoverable if they are the natural and proximate result of the tort (no foreseeable element). • UCC Cases – Dealing with the sale of goods • Consequential damages broken up into two types with differing levels of foreseeability o Incidental Damages o Consequential Damages • Special Rule for consequential loss of money or withholding of payment – Generally consequential damages are recoverable if foreseeable, but this exception is that the remedy for failure to pay money when it’s due is limited to the principal plus any damages in the form of interest at the prevailing rate. The exception to this exception is in bad faith insurance suits, when the insurance company fails to pay a claim then it looks like more of a tort action and punitive damages can be awarded. B. Limitations 1. Party-specified damages (aka. stipulated damages) • If stipulated damages are deemed ok, they are called liquidated damages • If stipulated damages are not accepted by a court, they will be called a penalty and be thrown out • When are they ok? o Must be reasonable in light of anticipated or actual loss (either reasonable at the time of the contract or after the breach) o Damages must be difficult to prove or costly to litigate o If there is no damage at all, then stipulated damages are void • Parties may contract to limit consequential damages o Courts generally allow this especially if there is equal bargaining power o Courts may not allow if unconscionable 3 Procedural unconscionablity – (Unequal bargaining power) It has left the party with no adequate remedy so court feels no reasonable person would have contracted for this Substantive unconscionability – The nature of the contract unfair 2. Avoidable consequences • Duty to mitigate – Must take reasonable alternative steps (example, professor wrongfully fired, he must reasonable look for other reasonable job, like another teaching position). • Offsetting rule – If would not have been able to have both benefits then must offset one from the other (example, professor wrongfully fired and then works day shift at gas station, must offset gas station salary. But if, works at gas station at night, then may not have to offset) • Collateral Source Rule – This is an exception to the offsetting benefit rule and provides that and injured plaintiff who receives compensation for his injuries from an independent 3rd party (i.e. insurance) is still entitled to recover damages from the defendant o CA has abolished the collateral source rule in medical malpractice with regard to insurance 3. Scope of liability • For torts – Scope of liability is limited to proximate cause rule • For contracts – Scope of liability is limited to foreseeability • Economic Harm Principle – Most jurisdictions say that P can not recover in tort unless he has suffered some physical injury. This rule only applies to non-intentional torts. Minority jurisdictions do not have this rule at all. 4. Other • Certainty --Plaintiff has to prove with reasonable certainty that the defendant proximately caused the harm and prove the amount of damages with reasonable certainty • Substantive policy goals – Sometimes policy goals limit damages (example, illegal aliens may not have claim for wrongful discharge) C. When Money Can’t Measure Value 1. Personal Injuries and Death • Majority allow lump sum argument for personal injury • Slight Majority allow per diem argument • Golden Rule and Market Force arguments are forbidden • Survival v. Wrongful death Statutes o Survival statutes get around the common law rule that once you die your cause of actions dies. Someone steps into your shoes. Economic losses include medical expenses, burial expenses, lost wages. Non-economic losses include pain and suffering prior to death. o Wrongful death statues compensate family members. People left behind bring suit on their own behalf. Economic losses include loss of expect support and inheritance, funeral and burial. Noneconnomi losses include loss of society, companionship, 4 consortium, small minority allow for recovery for emotional distress or grief. 2. Tort Reform • Medical Malpractice Caps – Some states have caps on the amount recoverable in medical malpractice cases. Virginia and CA have this. • Watch for constitutionality. Florida does not allow caps on non-economic damages. • Suggestions for tort reform: Limit the recovery for non-economic damages; Abolish the collateral source rule; Limit or abolish punitive damages; Provide that judgments be paid over the life of the victim, paying less to the plaintiffs who die sooner or have fewer medical bills than expected, but more to plaintiffs who live longer or have higher medical bills than expected; Abolish joint and several liability, so that each defendant would be liable for a proportion of the judgment equal to his proportion of fault, and plaintiffs rather than codefendants would bear the losses attributed to insolvent defendants; Let defendants recover attorneys’ fees from plaintiffs who file frivolous or unjustified claims; Limit the rates charged in contingent fee agreements protecting plaintiffs from exploitation by their lawyers, but also making the plaintiff’s bar less willing to represent personal injury plaintiffs; Shorten the statute of limitations or accelerate the point at which the statute begins to run. 3. Dignitary and Constitutional Harms • When a constitutional harm is suffered but no damages result from it, then nominal damages may be awarded (e.g. $1). • If you sue under constitutional harm (§ 1983) and get damages, the attorney can collect attorney’s fees. • For dignitary harms they are had to value. Courts look at prior precedent. D. Time and Value of Money 1. Taxes and Interest • Taxes o Personal injury damages and wrongful death awards are not taxable under Federal or State law. This is limited to physical injury torts (See tax outline) o Majority says awards are given per gross salary (not tax adjusted), minority and federal rule is that awards are adjusted to net salary. • Interest o Common law rule was that pre-judgment interest was only allowed when damages were ascertainable or liquid (generally contract only) o Modern trend and majority rule is that pre-judgment interest is collectable. Want to restore P to rightful position. o Post-judgment interest is authorized by statute in majority of states, in CA it is 10% simple interest 2. Present Value – SEE PROBLEMS INJUNCTIONS – An order by the court directing party to do or not do something A. Preventative – This type of injunction is to prevent future harm 5 1. Ripeness --An injunction will only issue against real threats of injury or wrong i. Remedial Ripeness --Must show actual real danger, imminent and planned threat, to do this show propensity of D. ii. Constitutional Ripeness – Must be a case or controversy. Must have both ripenesses. • Watch for prophylactic injunction. These are wholly speculative, generally no past conduct to go from. 2. Irreparable Injury – No adequate remedy at law 3. Scope – Injunction must be broad enough to prevent the harm, but not too broad to be beyond scope. i. Scope of past violations determine the scope of future violations ii. Keep in mind, is it a particular person, particular office, whole corporation, etc. 4. Mootness – Is the issue no longer ripe (constitutionally or remedially)? i. D may cease wrongful conduct, or may drop plans to cause harm. But, just because D ceases wrongful conduct is not despositive of remedial mootness/ripeness. Case is likely to be moot if the D can show no reasonable expectation that the wrong will be repeated. B. Reparative – Court using power to undue harm or repair harm that has already happened. 1. Ripeness – For these injunctions the ripeness/mootness issue is not about showing imminent and planned threat because harm has already been done. Issue is focused on preventing the consequences of the wrongful conduct. See Bell v. Southwell (Fraud in Voting Case) 2. Watch for double recovery with reparative injunctions. See Scope. 3. Scope – Place P back in rightful position. No more, no less. This is why P can only get either damages or reparative injunction because each remedy by itself is designed to place P back in rightful position in lieu of past wrongful conduct. If P gets both, then that is double recovery. i. 3 different standards. Err on side of more or less than rightful position, or must be exact. C. Structural --a long series of preventive and reparative injunctions in a single case presenting a complex fact situation; each individual order is part of the continuing attack on a larger problem 1. De Jure Violations – Court can fix these with structural injunctions, taking into consideration the scope of the problem 2. De Facto Violations – Court should not step in and fix these. 3. Prison Cases 4. VMI, Women’s institute case D. Injunction Elements – Mostly show up in preliminary injunction, but they come into play in all injucntions 1. Substantive Violation – Must win the case 2. Irreparable Harm/No adequate remedy at law – General rule is that you get damages, if damages do not suffice then you can get the injunction. i. Can show that there are unique items lost or damaged ii. Can show propensity by defendant to continue the violation 6 iii. Can show that it is difficult to measure economic damages (jurisdictions are split) iv. Can show there is an insolvent D v. Can show that there is a liquidated damages clause that would cap recovery at an amount lower than the damages P actually suffered iv. Trover and replevin. These are legal not equitable remedies. P gets to choose which one wants, no needs to go through injunction analysis 3. Balance of Hardships – Balance the hardship on D v. hardship on P v. burden on the Court i. General Rule --If the hardship to D and court is disproportionate to any benefit derived by P as a result of an injunction, damages might be a better remedy. Exception: If it is the D’s fault through intentional misconduct then the intentional wrongdoing will override balance of burden concerns. ii. Intentional breach of contract is not considered intentional wrongdoing. iii. Keep in mind burden on society. If burden on society too great, damages will be appropriate remedy. (Cement factory causing nuisance to neighbors, gave damages because too bad for society to shut it down) 4. Public Policy – Even if injunction seems proper, if it violates a fundamental right it may not be granted i. Look at fundamental rights ii. Injunction that constitutes a prior restraint of free speech will not be issued b/c some things are so important, that they will trump the other factors in our analysis. Exception: Laycock thinks that prior restraints may be allowed when (1) the injunction is sufficiently narrow and (2) the speech is unprotected (defamation, obscenity, etc.) iii. Personal services contracts are not specifically enforced because it looks like indentured servitude. But when services are unique the court can issue a negative injunction or a non-compete provision with the appropriate scope. a. Limited to the specific field of work b. Limited in length to the time of the contract E. Preliminary Injunctions 1. Strong likelihood of success on the merits 2. Irreparable harm/No adequate remedy at law 3. Balance of hardship 4. Public Policy – Generally preliminary injunctions maintain the status quo, but sometimes can go against that if public policy requires (Bear Case) • For preliminary injunctions use these factors as a continuum. Look at probably of success X amount of hardship for P and D. 5. The timing of preliminary injunctions – Dealing with injury that may occur during the time of preliminary injunction and the final adjudication. 6. FRCP 65(a) – No preliminary injunction without notice to the adverse party. F. Injunction Bonds --Money to compensate the D in case the preliminary injunction was wrongly issued 7 1. When to post bond? --The general rule is Federal Rule 65(c) says that it is mandatory that you issue a bond in such sum as the court deems proper, but only if the defendant asks for it. 2. What amount? – Discretionary with the court, reasonable. 3. Recovery of bond? --General rule is that recovery of the bond is mandatory and not discretionary, but only up to the amount of damages you can actually prove. Purpose of bond is to compensate D. Majority of courts treat amount of bond as a cap on liability. G. TRO – TRO then PI then Final Adjudication 1. FRCP 65(b) a. TRO can be granted w/o written or oral notice (ex parte) only if: i. (1) it clearly appears from the specific facts that immediate and irreparable injury, loss or damage will result to P before a hearing can take place allowing the D to be heard, and ii. (2) the P certifies to the court the efforts, if any, that he made to notify the D and all the reasons why notice should not be required (fear of destroying evidence is not enough). b. If TRO is ordered without notice, it cannot last longer than 10 days. Keep in mind the ex parte TRO is not effective till you give the other party notice o What about TRO with notice? No bright line rule, some courts say if it lasts to long then it turns into a PI, other courts say if it lasts too long it expires (Granny Goose Case) c. Once D hears of TRO, then they have priority first on docket and get full-blown hearing w/in 2 days. d. TRO's not appealable. SC is relying on lower court judges to follow Rule 65 ex parte TRO requirements. F. Stay of enforcement – Please stay enforcement of the injunction, until I get an appeal. Must apply to the lower court first, if they deny the stay pending appeal then you can appeal that decision. Why would a district court ever issue a stay after just granting an injunction? Because they didn’t want to grant the injunction but only did because they felt appellate precedent mandated it. DECLARATORY RELIEF A. Generally – Declaratory judgments are issues to resolve uncertainty between parties in order to prevent harm that would ensue if the parties had to operate under such uncertainty. 1. Three most common uses – Patent infringement, Constitutional violation, Insurance Defense 2. What do you need to show for declaratory judgement? a. Ripeness – This is a lower level than for a preliminary injunction. Must show that there is a disagreement or controversy. b. Substantive Case 3. Note – If a party disobeys a declaratory judgment they will not be held in contempt. The party with the declaratory judgment must go to court and get an injunction. It will be easy to get because the substantive case has already been proven. 8 4. Uniform Declaratory Judgment Act – This says that once you have a DJ you do not need to jump through the irreparable injury hoop to get an injunction. B. Quiet Title – An action to determine proper ownership of real or personal property is an action to quiet title. C. Reformation – This is to re-write the contract so that it means something other than what was written. A defrauded party can choose either to rescind or reform the contract. RESTITUTION A. Generally this will look at the D rather than the P, and put the D back in the rightful position if they have been unjustly enriched. 1. Four Categories Where Restitution is Attractive a. When there is no other cause of action (Neri v. Retail Marine, unjust enrichment is the cause of action) b. When D’s gain exceeds P’s losses c. When P wants to reverse the transaction rather than let it stand and measure either his loss or D’s gain d. When D is insolvent and P can get a preference by seeking restitution of specific property that used to belong to P (Constructive Trusts) 2. Six Examples When Restitution Most Comes Up 1. Mistakes • ≠ want people to get more bc mistake (bank gives 2k instead of 200 – bank can get back extra money) 2. Actual or Supposed K • Actual K voided bc of mistake or SOF; if services provided prior to void, must pay fair value for those 3. Judgments • You win judgment, but then the decision gets reversed – must give the money back 4. Emergencies • No promise made bw parties, but emergency trumps so must pay for services provided 5. Joint Obligations • Indemnity, subrogation • Collect from one ∆ -that ∆ can go against the other ∆s who did not pay 6. Wrongful Acts • Theft, breach of fiduciary duty, conversion, etc. • When ∆ intentionally causes something to happen and gain by it – can waive tort and sue in unjust enrichment o That allows Π to get ∆s gains and not the harm to Π 3. Two situations where restitution is not available a. In products liability cases, when D is enriched as a result of D’s negligence. In this case sue for negligence only. b. No restitution for breach of contract, you get damages. i. Exceptions where restitution is available for breach of contract cases: (1) Covenants not to compete, (2) Agreements to keep info confidential, (3) Sale of land 9 B. Disgorging Profits – Plaintiff gets to take the D’s profit that resulted from wrongful conduct. Turns on D’s culpability. 1. Quasi-Contract – Court creates a fictional contract between P and D. In cases where the wrongdoer has done more than just an efficient breach, meaning there is a higher level of culpability, then courts will allow disgorgement of profits, allowing P to get more than they lost. This is legal. Jury trial attaches. 2. Accounting for Profits a. Equitable remedy so no jury needed, and must show irreparable injury. b. If there is an intentional infringement, then P can get an accounting for profits 3. Constructive Trust – Should have a wrongful act and identifiable property 1. A constructive trust is a pretend trust that allows tracing of the proceeds and knocks the wrongdoer back to where he started from. 2. This is an equitable remedy, so no jury trial is necessary, and irreparable harm must be shown 3. The assets are traced and the plaintiff is given preference in front of other creditors 4. The trustee is considered to have had something in trust for the plaintiff. 5. Typically can’t get this in breach of contract situation. Try to show breach of fiduciary duty. 4. Measuring Profits and Apportionment 1. Burden is first on P to show gross profits 2. Then Burden is on D, to show expenses and other costs to be deducted from gross profits, this gets us to net profits 3. What about overhead costs/fixed costs? Courts are split, some allow to be deducted as expenses, other do not. Keep in mind that the more egregious the wrongdoing, the better the result for the P. i. How much overhead to deduct when it is deductible? Variable overhead costs will be deducted out to get to the net profits. For fixed overhead, look to two part test: a. Sufficient nexus with the infringed product. Does CEO’s salary qualify, yes it does. Almost any legit business expense should meet the first prong. b. Fair allocation of fixed cost 1. Production costs of the infringing product as a percentage of the total production costs 2. The number of infringing products as a percentage of total products 3. The dollar sales from the infringing product as a percentage of total dollar sales. C. Rescission – Undoing a contract or transaction 1. When can this be done i. Fraud ii. Substantial breach of K iii. Mutual mistake of fact 10 iv. Unilateral mistake, not relied on v. Duress 2. Must bring an action for rescission within a reasonable time of finding the wrongdoing. 3. Either rescind the whole thing or none of it, can’t rescind half of a contract 4. Defendant had to engage in the transaction to rescind (can’t rescind purchase of stock unless the person who sold it to you was the wrongdoer) 5. This is an equitable remedy, so no jury trial and must show irreparable injury. 6. Party defrauded can either rescind the contract, or enforce it and sue for breach. Their election. 7. Restitution in the form of rescission is most attractive when there is a big disparity b/n K value and damages. Or if there is a losing K on a continual basis. D. Constructive Trusts and Preferences --If particular property is obtained by D from P by: (1) Fraud, misrepresentation, or mistake; AND (2) Identify specific property of P that D has; THEN (3) Impose a CT and Trace it • Note: If damages only, then no CT 1. Need (1) wrongdoing, and (2) identifiable property 2. Bonafide purchaser without notice trumps beneficiaries of a constructive trust. 3. Tracing Generally i. Direct Tracing a. Try to directly trace the property. b. Must be easily identifiable – Sold house and went on trip around world and bought speedboat c. For real property can trace until party goes bankrupt, because then the Trustee steps in as a subsequent bonafide purchaser and trumps. ii. Co-Mingled funds a. P gets to choose if D is spending his own money or P’s money. Spending money usually P’s first, investments usually D’s first. b. As P exhausts his own money, and then starts spending D’s money the balance keeps getting lower. The balance can go up, but the lowest amount is called the Lowest Intermediate Balance (LIB). P can only recover the LIB via constructive trust. c. If D makes an investment, P can get the benefit unless D is insolvent, then P only gets up to amount rightfully his. 4. Equitable Liens --The equitable lien functions as a constructive trust in that it attaches to a specific property and traces that property. If the value goes down then the value of the lien can go down i. Mistaken improvers – Equitable lien can be appropriate when someone else owns the property so it would be unjust enrichment to let them have the improvement, give them equitable lien in the proper amount. ii. Does P get to choose equitable lien or constructive trust? Typically the P gets to choose if P has the opportunity to have a constructive trust. For constructive trust we have to determine if P can be considered a real owner. 11 iii. If the value of the property goes down, and you can’t get the full amount of your lien, you get a money judgment for the rest. iv. Choose constructive trust when the value of something goes up, choose equitable lien + money judgment when the value goes down. E. Subrogation – Who can do it? When does it apply? PUNITIVE REMEDIES A. General Principles 1. Based the wrongful acts of defendants 2. To punish D, not to compensate P 3. Awarded when D has been guilty of fraud, oppression or malice i. Express malice – Intent to cause injury ii. Implied malice – Conscious disregard for the probability of injury 4. States should look at conduct in their own jurisdiction (state) when awarding punitive damages. Can look at activity in other states to prove pattern or practice. 5. In assessing award, courts should take into consideration the total number of likely successful plaintiffs from the same punishable conduct, and adjust the award accordingly. B. Common Law 1. Grimshaw Factors in determining reasonableness of punitive damage award: i. Degree of reprehensibility ii. Wealth of the D iii. The amount of compensatory damages (ratio) iv. The amount needed to deter 2. Subject to state law so each states as its own variation on these factors C. Constitutional – Supreme Court guidepost factors to assess Constitutionality of punitive damage award 1. BMW Factors i. Degree of reprehensibility ii. Ratio to compensatory damages (likely should be a single digit) iii. Available civil and criminal penalties 2. States will use the CL factors to determine if punitive damages should be awarded, and then in its oversight capacity, the Supreme Court will use the three factors to determine if the lower court has gone out of bounds D. Contracts 1. General Rule – Punitive damages are not allowed for breach of contract i. Exception – Punitive damages can be awarded in a contractual relationship if there is an independent tort. Look for fraud, tortious interference, etc. ANCILLARY REMEDIES – These to support the other remedies A. Enforcing the Judgment 1. Contempt – Three kinds of contempt i. Criminal a. Standard is beyond a reasonable doubt b. Right to a jury if more then petty offense (6 months) c. Must show a willful violation of an injunction d. Fines payable to the govt. 12 e. Purpose is to punish the wrongdoer for past violations f. Enforced by prosecutors g. Will be a fixed fine, or jail time h. Collateral Bar Rule Applies: if the judge issues a wrongful injunction, you still must comply. If you don’t comply, you can be held in criminal contempt; you must respect the authority of the court. ii. Compensatory Civil a. Standard is clear and convincing evidence b. Enforced by plaintiff, not the prosecutor c. No right to jury d. Purpose is to compensate plaintiff for losses e. A lot of states such as CA don’t have this kind of contempt f. Punishment measured by P’s loss or D’s gain iii. Coercive Civil a. Clear and Convincing b. Enforced by plaintiff c. Designed to coerce the plaintiff to do something d. Defendant holds the key e. Punishment can be fines or jail time f. Fines are paid to the state h. Look out for overlap with criminal contempt, if it looks like plaintiff does not hold “the key,” and the penalties have criminal contempt characteristics, then probably more like criminal contempt and therefore we need the procedural due process of criminal contempt (jury trial, beyond a reasonable doubt) 2. Collection i. Steps of levying property a. Get a judgment b. Get a writ of execution c. Take the writ to the sheriff d. Sheriff then will levy on the property 1. Majority – Must take actual possession of the property, and give notice (put a sign on it, boot on it) 2. Minority – Sheriff simply must state that he has dominion and control. ii. Proceeds go first to pay the Sheriff, then liens with security interests. iii. Exemptions – State law allows for certain property to be exempt, must go to court and burden is on property owner to show that it is exempt iv. Abstract of Judgment – Plaintiff can file this in a county where plaintiff has real property, this acts as an encumbrance on the property and prevents it from being transferred to a subsequent bonafide purchaser v. Most states say you have to execute for a proper purpose. Going into K-Mart and parading around. vi. Garnishment – Here a 3rd party has possession of the property 13 a. Take writ of garnishment to the bank. Bank is liable for being wrong. They gave small account and missed large account, money was then transferred out of the large account vii. Attachment – Getting money before the judgment. Downside is that defendant has not been adjudicated as a wrongdoer and you are freezing funds a. P must show: D is likely to get rid of money/dispose of assets WITH THE INTENT OF DEFRAUDING (avoid payment after judgment). Gonna have to show propensity b. P must also show likelihood of substantive victory c. Most states require attachment bonds, which are stricter than injunction bonds. Also these bonds will not act as a cap on plaintiffs liability d. Seeking a writ of attachment can itself be a tort if done wrongfully f. When you get attachment before a trial, you have priority for bankruptcy purposes as of the date of the attachment, not date of final judgment viii. Other devices a. Freeze Orders – get an injunction that defendant can’t sell or dispose of property b. Receivership – Third party comes in a runs a business c. Ne Exiot – This is a pre-judgment order for a person not to leave the jurisdiction B. Litigation Expenses 1. Attorney’s fees – In America everyone generally pays their own way. Loser does not pay attorneys fees. Exceptions: Statutory, contractual, bad-faith litigation, and in CA one-way fee shifting arrangements will be reciprocated i. § 1983 claims award attorney’s fees to a “prevailing party.” How much fees and what is a prevailing party? a. Fees must be reasonable. Take a reasonable number of hours and a reasonable fee per hour for an average attorney doing that kind of work b. If your fees are challenged, you can keep taking on fees for litigating your fee petition c. If a reasonable settlement offer is made and declined, no fees can be tacked on after that. Fees are capped at that time. d. Watch out for “prevailing party.” Maybe bring 100 claims and win 1. Do you get fees for work done on all 100 claims? REMEDIAL DEFENSES – There is a substantive claim but we cut off liability for some reason A. Unclean hands and In Pari Delicto 1. Unclean Hands is an equitable defense and In Pari Delicto is a legal defense. For In Pari Delicto there is a two part test: (1) P must be at equal or greater fault, and (2) preclusion of suit does not offend underlying public policies. This is also true for unclean hands. 14 B. Unconscionablity --Two elements. Need both but the more procedural the less substantive is needed, and vice versa. 1. Procedural (unfair surprise) and Substantive (unfair results) elements. i. Contracts of adhesion are part of the procedural factor ii. One-sided arbitration clauses are part of the substantive factor, although the minority of jurisdictions find them to be ok. Do we make them two-way or just void it? Either one, if the court feels if the unconscionability permeates the whole contract then we will throw out the provision. More likely to make it a two-way clause. 2. The more you have of one the less you need of the other. C. Estoppel 1. Elements i. Act – Must be a misrepresentation of facts ii. Reliance iii. Injury (D will be injured by not enacting estoppel) iv. Knowledge of the reliance (in some jurisdictions) 2. Defendants get the expectation damages, they do not get their reliance damages D. Waiver – Intentional relinquishment of a known legal right 1. Same elements as estoppel but no need for reliance. Here it is an intentional relinquishment of a legal right. “We will not sue you if you put the fairway here.” E. Laches and Limitations 1. Laches – Equitable defense only i. Two elements: (1) Unreasonable delay, and (2) prejudice to the defendant. Need both but the more of one, the less of the other is needed. ii. Four kinds of delay a. Settlement talks – more likely to not be considered an unreasonable delay b. Ignorant of the cause of action c. P sits on rights d. Law firm delay iii. Types of prejudice a. Detrimental reliance b. Evidentiary prejudice – witnesses lose memory and records get lost c. Things change value over time, relied on the value of the item iii. Example – If you know of a problem with an election but wait till after the results are in to say anything, then you could be stopped with laches. 2. Relationship between laches and SOL. If there is a strictly legal claim and legal remedy sought then only SOL can be brought. If there is an equitable claim and an equitable remedy sought then laches only. If you have a legal cause of action (breach of contract) but seeking an equitable remedy (specific performance) then you can bring either SOL or laches. 3. Statute of Limitations i. Distinguish Continuing Harm v. Continuing Violation (Anti-trust, wage discrimination, etc.) 15 ii. When does SOL begin? – It begins when you know of your claim. (Look for knowledge of injury and operative cause of injury). When would a reasonable person know? Say your client kept learning new facts. iii. Fraudulent Concealment – SOL is tolled if you can show this. Don’t know that you can bring a claim because the D concealed it from you. Must show discovery rule + the factor of concealment. a. Must show that there was misrep, or concealment. The plaintiff relied on that misrep or concealment, and because of that reliance, that is the reason the plaintiff did not discover. P still had to exercise inquiry and try to find out what is going on. Can’t just sit idly by JUDGE OR JURY? • In suits at Common Law, where the value in controversy shall exceed $20, the right of jury trial shall be preserved. • Must look at 1791 and see what things were courts of law actions. • General rule is that law courts award money and equity courts award injunctions. • What about causes of action that didn’t exist in 1791? o Two fold test: Go to 1791 and look at the nature of the action. And look at the remedy • Why does it matter? For available defenses and claims, and judge or jury. • Can’t subvert a jury trial right by suing first on an equitable claim. • A substantive legal claim brought about through an equitable procedure (class action, shareholder derivative) will be heard by a jury. • Watch for declaratory judgment action brought first to thwart jury trial.