Remedies: Torts: Damages and Restitution

3 steps to approaching a remedies question

(1) determine the substantive law and what type of tort or contract is at issue; (2) make sure the Plaintiff is going to win; and (3) determine which remedies require discussion. This must be done in the order of: (1) legal remedies; (2) legal and equitable restitutionary remedies; and (3) equitable remedies

Tort Legal Remedies

Various money damages

Tort Restitutionary Remedies

(1) legal restititutionary remedies; (2) restitutionary damages; (3) replevin; (4) ejectment; (5) equitable restitutionary remedies; (6) constructive trusts; and (7) equitable liens

Tort Equitable Remedies

Injunctive Relief

3 main damage types

Compensatory, nominal, punitive

General Compensatory Damages

Foreseeable losses for the plaintiff, such as pain and suffering

Special Compensatory Damages

Not necessarily foreseeable, such as wage losses, and must be specifically pleaded

Four Requirements for Recovering Damages

(1) Actual causation; (2) foreseeability (proximate causation); (3) certainty (not too speculative; (4) unavoidability (duty to mitigate)

Certainty Rules: Economic Losses

Damages calculation must be done with sufficient certainty

Non-economic Losses (General Damages)

Basic certainty rules do not apply. The jury may award any amount it wishes within the judge’s instructions

Form of Judgment Payment

The award must be a single lump sum payment. Installment payments are not allowed

Calculation of Compensatory Damages

The award must be discounted to present value and traditionally inflation is not considered

Nominal Damages

Nominal damages are often recoverable when no actual injury is sustained, and they serve to establish or vindicate the plaintiff’s rights. Harmless trespass often results in nominal damages

Punitive Damages

Damages to punish a defendant for “willful, wanton, or malicious conduct.” Generally limited to intentional torts but some applicability to reckless misconduct

Punitive Damages 3 Rules

(1) P must have first been awarded compensatory or nominal damages, or restitutionary damages; (2) the defendant’s type of fault must be greater than negligence; (3) the punitive damages are no more than 10 times the compensatory damages

Punitive Damages Due Process Limitations

Key issue: fair notice of the possible magnitude of the punitive damages. Factors: (1) reprehensibility of the defendant’s conduct; (2) disparity between the actual or potential harm suffered by P and the punitive award; and (3) the difference between the punitive damages award and the criminal or civil penalties authorized for comparable conduct.

Punitive Damages Due Process Calc: NonParties

Injuries to nonparties may be used to assess the reprehensibility of the conduct but may not be used to determine the amount to be awarded

Interest and Attorneys’ Fees

Awards of prejudgment interest are generally statutory. Attorneys’ fees generally aren’t recoverable absent contract or a statute, except for prevailing plaintiffs in shareholders’ derivative suits

Restitutionary Availability in Torts

Generally, restitutionary damages are only available in tort cases where the tort results in a benefit to the defendant

3 Bar exam Damages Fact Patterns

(1) only compensatory damages are available; (2) only restitutionary damages are available; or (3) both are available

Replevin

A legal remedy that permits the plaintiff to recover, before trial, possession of specific chattel wrongfully taken or detained. Generally requires a judicial hearing

Replevin 2 part test

For replevin to be available, it must be established that: (1) the plaintiff has a right to possession; and (2) there is wrongful withholding by the defendant

Ejectment

Ejectment is a legal remedy to restore possession of real property from which plaintiff was wrongfully ousted

Ejectment 2 part test

Must establish: (1) plaintiff has a right to possession; and (2) wrongful withholding by the defendant

Constructive Trusts

An equitable restitutionary remedy that is imposed on improperly acquired property to which defendant has title. It creates a “trust” where the defendant is the trustee and has the duty to return the property to the plaintiff (beneficiary)

Constructive Trust Requirements

(1) Defendant has title to the property and defendant’s acquisition of title can be traced to the property that defendant wrongfully acquired; (2) the defendant’s retention of the property would result in unjust enrichment; and (3) the plaintiff has no adequate remedy at law (unique property or insolvent defendant will suffice)

Constructive Trust advantages over Monetary Restitution

Plaintiff becomes a secured creditor (entitled to recover the specific property constituting the trust res) and the plaintiff gets the benefit of any enhanced value of the property

Constructive Trust Defenses

Usual equitable defenses apply: laches, unclean hands, transfer of legal title to BFP

Equitable Lien

A lien imposed on the defendant’s property to secure payment of a debt owed to the plaintiff. Property will be subjected to an immediate court-directed sale and the money received goes to the plaintiff. If this amount is less than the fair market value of the property when it was taken, a deficiency judgment will issue for the difference

Requirements for Equitable Lien

(1) Defendant holds title to the property and the title can be traced to the wrongfully obtained property; (2) defendant’s retention would result in unjust enrichment; and (3) P has no adequate remedy at law

Equitable Lien vs Constructive Trust

Constructive trust is not available if plaintiff’s property was not used to acquire title. Constructive trust can be used to recover enhanced value but equitable lien cannot. Plaintiff may seek a deficiency judgment after imposing an equitable lien but not a constructive trust.