Remedies - Equity and equitable remedies

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    Ch. 2 Equity and equitableremedies - Part 2 1s 11

    Remedies Fall 2015Fordham Law School

    Chapter II Equity & Equitable Remediesart 2

    George W. Conk Adjunct Professor of Law & Senior Fellow, Stein Center for Law & Ethics

    oo! "#$%%gconk law.fordha!.edu

    %$%#'('#)**'+orts +oda - htt -//tortstoda .0logs ot.co!1therwise 2 Commentaries on Law, Language & Politics

    3lackstonetoda .0logs ot.co!

    1

    mailto:[email protected]:[email protected]
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    !"co"scio"ability

    An afrmative de enseContracts the courts re use toen orceUsually K so one-sided there is noreal a reement

    !ometimes synonymous "ith#unsu$$ortable% or #unen orceable%or void &e. . counsel ee claims'

    Ch. 2 Equity and equitableremedies - Part 2 2

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    !CC SEC'I(# 2% 02) !#C(#SCI(#*+LEC(#'R*C' (R 'ER,

    ( the court 3nds the contract or any term othe contract to have been unconscionable atthe time it "as made the court mayre use to en orce the contract

    en orce the remainder o the contract "ithoutthe unconscionable termlimit the a$$lication o any unconscionableterm as to avoid any unconscionable result

    4Ch. 2 Equity and equitableremedies - Part 2

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    !CC -2% 02

    (2) When it is claimed or appearsto the court that the contract orany clause thereof may beunconscionable the parties shall bea orded a reasonable opportunityto present evidence as to itscommercial settin , purpose ande ect to aid the court in makinthe determination.

    A Due process necessity !5

    Ch. 2 Equity and equitableremedies - Part 2

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    !"co"scio"abilityo le islative de#nition is suppliedo cause of action for dama es iscreated

    $nconscionability provides%) a defense for party who opposesenforcement of contract or2) rounds for rescission of acontract

    6Ch. 2 Equity and equitableremedies - Part 2

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    !"co"scio"ability&he $niform 'ommercial 'ode

    merely codi#ed the common lawdoctrine of unconscionability whichwas used to invalidate contracts

    unconscionability may be foundunder either aspect

    substantive is one or morecontract terms unreasonablyfavorable to one party*

    +Ch. 2 Equity and equitableremedies - Part 2

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    Unconscionability Campbell v. Wentz p. 45

    /0rower shall not be obli ated to deliver

    any 'arrots which he is unable to harvestor deliver

    or shall 'ampbell be obli ated to receiveor pay for any 'arrots which it is unable toinspect, rade, receive, handle, use orpack at or ship in processed form from itsplants in 'amden

    (%) because of any circumstance beyondthe control of 0rower or 'ampbell, or (2)because of any labor disturbance, workstoppa e, slow down, or strike involvin

    /*

    Ch. 2 Equity and equitableremedies - Part 2

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    Campbell - does this meet the common law test?

    'ampbell is e cused from

    acceptin carrots under certaincircumstances. ut even undersuch circumstances the rower,while he cannot say 'ampbell isliable for failure to take the carrots,is not permitted to sell themelsewhere unless 'ampbell a rees.

    This is the kind of provision which thelate Francis H. Bohlen would call'carrying a good joke too far.' 11Ch. 2 Equity and equitableremedies - Part 2

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    E/culpatory clauses8ay be unconscionable i

    9usiness is s uitable to $ublicre ulationParty see:in e;cul$ation is

    - $er ormin a service o reatim$ortance to the $ublic- holds himsel out as "illin to

    $er orm this service or any membero the $ublic- $ossesses decisive bar ainin

    advanta e Ch. 2 Equity and equitableremedies - Part 2 12

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    Time Ba s

    3tatutes of limitation (accrual,

    discovery rule)

    3tatutes of repose

    4aches 5 defense ofunreasonable and pre6udicial

    delay 14Ch. 2 Equity and equitableremedies - Part 2

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    Laches!tone v. Williams "#d Ci . $%&%' p. 5(

    vigilantibus non dormientibusaequitas subvenit (e7uity aids thevi ilant, not those who sleep ontheir ri hts)statute of limitations 5 89:1 1A&:after which suit is barred 5 sub6ectto e7uitable considerations;3tatute of repose 5 89:1 1A&: 5after which a cause of actione pires and

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    Laches!tone v. Williams "#d Ci . $%&%'

    laches defense asksWas the plainti in assertin herri hts uilty of unreasonable delay

    that pre6udiced the defendants*

    the societal interest in vindication

    of a meritorious claim can beoutwei hed by the disruption itstardy #lin would cause

    16Ch. 2 Equity and equitableremedies - Part 2

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    'he disco6ery rule8rs. >o$e< overheard a doctor "ho

    had been e;aminin her say to someother doctors "ho "ere $resent?And there you see entlemen "hat

    ha$$ens "hen the radiolo ist $uts a$atient on the table and oes outand has a cu$ o co@ee.? his "asshe says her 3rst intimation that r.!"yer had been ne li ent Bin hisconduct o radiation thera$y .0D 1*+

    Ch. 2 Equity and equitableremedies - Part 2 1+

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    ) *le o+ e,*ity

    a means o miti atin the o tenharsh and un=ust results "hich

    o" rom a ri id and automaticadherence to a strict rule o la" .

    Ch. 2 Equity and equitableremedies - Part 2 1,

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    re7udical delayCity o+ *stis v. i ste Appeal from a mandatory in6unctionre7uirin the 'ity to remove certainpiers, docks, and boathousesowned or maintained by the 'ityTest of laches a delay which has resulted in thein6ury, embarrassment, ordisadvanta e of any person but particularly the personsa ainst whom relief is sou ht 1*Ch. 2 Equity and equitableremedies - Part 2

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    re7udical delayCity o+ *stis v. i ste

    8n the present case the appelleebrou ht his suit to overthrow ri htslon since accrued to the appellant>'ity? and to third persons almostten years after he became aware ofthe circumstances.

    27Ch. 2 Equity and equitableremedies - Part 2

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    re7udical delayCity o+ *stis v. i ste &hrou h lon years since appelleeac7uired his title, the structures havebeen maintained by the appellant city

    and city funds e pended for repairs andfor buildin an additional boathouse.

    &hird persons not 6oined herein haveac7uired ri hts in individual boathouses,by virtue of leases obtained, withappellee/s knowled e, since he ac7uired

    title, and also by virtue of their repairsand maintenance of the same. 21Ch. 2 Equity and equitableremedies - Part 2

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    re7udicial delayCity o+ *stis v. i ste

    Plainti@ is holder o a statutory ri$arianvie" ri ht&he remedy of a mandatoryin6unction for removal ofencroachments is a drastic onethe in6unction re7uirin removal ofthe encroachments infrin es upon

    ri hts lon since accrued to theappellant and to third personsthe defense of laches is shown 5in6unction vacated

    22Ch. 2 Equity and equitableremedies - Part 2

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    #ah" 6) So..er )ction to ,*iet title p. 5(A$$eal rom order denyin s$eci3c$er ormancespeci#c performance "is not amatter of ri ht but is a remedyapplied by courts of e7uity the trial court has 6udicial

    discretion to award or withhold theremedy. a ressively sou ht to

    $rotect !tone but lost1*+ received inheritance romGilliams !r.%s mother

    1*+* ado$tive mother says shemi ht be Gilliams% dau hter1*,5 3les suit or share o royalties

    Ch. 2 Equity and equitableremedies - Part 2 26

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    Sto"e 6) 8illiamsGhat is the $re=udice to e endants

    ound by 2d Cir. (n 1 st caseIGhat "as le al consequence o theraud ound by Alabama courtI

    Ghen did her cause o action accrue$er 2d Cir.IGhat "as a$$licable statute o

    limitationsIGhat about her ri hts as heirIConstructive trust as remedyI

    Ch. 2 Equity and equitableremedies - Part 2 2+

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    romissory Estoppeleinbe 0 v. 1+ei++e Company 1353 p) 41

    "D:3E4F:1, that the salary ofAnna 3acks einber be increasedfrom @BC . to @G . per month

    and that she be a orded theprivile e of retirin from activeduty in the corporation at any timeshe may elect to see #t so to doupon retirement pay of @2 . permonth, for the remainder of herlife."

    2*Ch. 2 Equity and equitableremedies - Part 2

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    romissory Estoppeleinbe 0 v. 1+ei++e Company 1353

    Promissory Esto$$el and Meliance

    "I. &he 7uestion is whether you would have7uit the employment of the company at thattime had you not relied upon this pensionplan* "A. o, 8 wouldn/t. "I. Jou would not have. 1id you ever seekemployment while this pension was bein paid

    to you "A. o."I. Were you able to hold any otheremployment durin that time*

    "A. Jes, 8 think so. 1Ch. 2 Equity and equitableremedies - Part 2

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    Equitable Estoppel!"ited States 6) =eor>ia aci.ic p) 4:

    an e7uitable estoppel may be founda ainst the 0overnment

    (%) if the 0overnment is actin in itsproprietary rather than soverei ncapacity and

    (2) if its representative has beenactin within the scope of hisauthority.

    Ch. 2 Equity and equitableremedies - Part 2

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    Equitable Estoppel!"ited States 6) =eor>ia aci.ic 13?0 p) 4:

    :7uitable estoppel prevents a partyfrom assumin inconsistent positionsto the detriment of another party;;;Assertion of ri hts barred a ainstone who relied in ood faith on conduct detrimentally reliedAnd ac7uires a ri ht of property,contract, or remedy

    4Ch. 2 Equity and equitableremedies - Part 2

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    ,*itable stoppel - U.!. v. eo 0ia 1aci+ic

    ElementsN(%) &he party to be estopped must

    know the factsK

    (2) he must intend that his

    conduct shall be acted on or must

    so act that the party assertin

    the estoppel has a ri ht to5Ch. 2 Equity and equitableremedies - Part 2

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    ,*itable stoppel - U.!. v. eo 0ia 1aci+ic

    (B) the party relyin must bei norant of the true factsK and

    (G) he must rely on the former/s

    conduct to his in6ury.

    6Ch. 2 Equity and equitableremedies - Part 2

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    T ial by * y

    Ch. 2 Equity and equitableremedies - Part 2 +

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    State 6) @a"elsbecanelsbec: "as acquitted ocareless drivin but ound uilty oG( and ailure to observe asi nal.!entenced to 1,7 days in =ail3nes 17 years license sus$ension

    and 12 hours o an into;icateddrivin $ro ram since it "as his4th o@ense

    Gas he entitled to a trial by =uryICh. 2 Equity and equitableremedies - Part 2 *

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    @airy Auee" 6) 8ood !)S) 1342 p) ?Com$laint sou ht N

    (%) temporary and permanentin6unctions to restrain petitioner fromany future use of or dealin in thefranchise and the trademarkK

    (2) an accountin to determine thee act amount of money owin bypetitioner and a 6ud ment for that

    amountK and

    (B) an in6unction pendin accountin toprevent petitioner from collectin anymoney from "1airy Iueen" stores in the 47Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'

    1istrict 6ud e erred in refusin torant petitioner/s demand for atrial by 6ury on the factual issuesrelated to the 7uestion of whetherthere has been a breach ofcontract.

    41Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'

    3ince these issues are commonwith those upon whichrespondents/ claim to e7uitablerelief is based,the le al claims involved in theaction must be determined priorto any #nal court determination ofrespondents/ e7uitable claims .

    42Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'$eacon Theatres (%LCL) held where both le al and e7uitableissues are presented in a sin lecase, " only under the mostimperative circumstancesM canthe ri ht to a 6ury trial of le alissues be lost throu h priordetermination of e7uitableclaims ."

    4Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'

    &he complaint alle ed breach oflicensin contract

    petitioner had "ceased payin . . .as re7uired in the contractK" thatthe default "under the saidcontract . . . >was? in e cess of @N , . K"

    44Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'default constituted a "material breach"of that contract

    otice iven that to continue such

    business after the cancellation of thecontract constituted an infrin ement ofthe respondents/ trademark

    that petitioner/s #nancial condition wasunstableK and that because of thefore oin alle ations, respondentswere threatened with irreparable in6ury

    for which they had no ade7uate remedyat law. 45Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'

    +etitioner/s primary defense is,that the contract was modi#ed bya subse7uent oral a reementa purely le al 7uestion havinnothin whatever to do either withnovation, or reformation

    46Ch. 2 Equity and equitableremedies - Part 2

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    7ai y 8*een v. Wood "U.!. $%9#'

    !uch a de ense oes to the question o =ust "hat under the la" the contractbet"een the res$ondents and$etitioner isin an action to collect a debt forbreach of a contract betweenthese parties, petitioner has ari ht to have the 6ury determinenot only whether the contract hasbeen breached and the e tent of

    the dama es if any but also 6ust 4+Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?0 p) 92&he common law did not permit

    stockholders to call corporate

    mana ers to account in actions at

    law

    Why does the court allow a trial by

    6ury*4*

    Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?0&he directors of the corporation

    were accused of convertin

    corporate assets and of " ross

    abuse of trust, ross misconduct,

    willful misfeasance, bad faith,

    >and? ross ne li ence."

    57Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?03tockholders demanded derelict

    oPcers "account for and pay to the

    'orporation for their pro#ts and

    ains and its losses."

    +etitioners demanded a 6ury trial

    on the corporation/s claims.

    51Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?0A derivative suit has dual as$ects N3rst the stoc:holderJs ri ht to sue onbehal o the cor$oration historically anequitable matterOsecond the claim o the cor$orationa ainst directors or third $arties on"hich i the cor$oration had sued andthe claim $resented le al issues thecom$any could demand a =ury trial.

    52Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?0

    As im$lied by 8r. Dustice Folmes le alclaims are not ma ically converted into

    equitable issues by their $resentation

    to a court o equity in a derivative suit.&he claim pressed by the

    stockholder a ainst directors orthird parties "is not his own butthe corporation/s.=

    5Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?00iven the availability in aderivative action of both le al ande7uitable remedies, we think theSeventh Amendment preserves to

    the parties in a stockholder/s suitthe same ri ht to a 6ury trial thathistorically belon ed to the

    corporation and to those a ainstwhom the corporation pressed itsle al claims.

    54Ch. 2 Equity and equitableremedies - Part 2

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    Ross 6) +er"hard 13?0&he Seventh Amendment 7uestion

    depends on the nature of the issue

    to be tried rather than the

    character of the overall action.

    Ch 2 E i d i bl