Investigation by Attorney - Remedies - Solved Exam, Exams of Law

Download Investigation by Attorney - Remedies - Solved Exam and more Exams Law in PDF only on Docsity! “Student No. REMEDIES FINAL EXAM -- GOLDEN GATE SCHOOL OF LAW - SPRING 2012 | Points Points QUESTION Available | Received 4. In the event that Larry is able to serve Tasha with a complaint, what rights and remedies against Tasha, if any, does Larry Landlord have to collect the remaining rent and his other losses? Liability Theory: Breach of Lease Contract Remedies: Damages. Five-year expectation is limited by 30-day liquidation clause. Too many people missed this and failed to discuss whether the provision is under-liquidated. Consequential damages: cost of cleaning and repairs; costs of re-leasing to a new tenant. Reliance damages: purchase and installation of special appliances for cupcake business. Larry has not made the required attempt to mitigate. Specific performance: This is moot; Tasha is gone. Even if SP test is applied, no mutuality. Restitution: Larry could demand restitution of the 30 days of unpaid rent but this does not quite fit. 5 4 Liability Theory: Tort —- conversion of appliances and destruction of premises = Remedies: Conversion of appliances. Compensatory damages for value of oven and refrigerator or cost of replacement. Punitive damages also available. Restitution: replevin of stolen appliances or monetary recovery of their FMV. Coercive relief: not likely, since this is a one-time event. Court order may be necessary for compliance, given Tasha's track record. Negligence in destruction of premises: Compensatory damages for harm to property based on diminution of value or cost of repair, whichever is sufficient to restore Tony to his rightful position. (This treatment of the premises could also be breach of contract.) Conclusion and Election of Remedies: Larry is entitled to one month's rent and compensatory damages for the appliances and the damage to his premises. There is no overlap in recovery. 2. Connie Customer, a bank manager who eats several of Tasha’s Valentine's Day cupcakes, ends up in the hospital for a full week as a result. Luckily, she has good health insurance. She sues Tasha to recover the costs caused by her illness. What remedies does Connie have against Tasha? Liability theory: Personal Injury Caused by Negligence. Remedies: Compensatory damages for medical costs, lost income, and pain & suffering will not be reduced by collateral source payment from private insurer but insurer can demand subrogation from judgment or settlement amt. No punitive damages. Tasha will argue that DyeCo is the real culprit and she had no notice about the dye. At the least, it should indemnify her for any liability, but she has to avoid double recovery. 5 ‘ Liability theory: Breach of Sales Contract: Breach of warranty of merchantability of cupcakes? Remedies: Connie can demand restitution of amount she paid for cupcakes or it may be possible to claim personal injury expenses as above) as consequential damages. Conclusion and Election of Remedies: If Tasha has any liability, Connie's recovery from Tasha is not reduced by Connie's insurance, although the insurance company will demand reimbursement (subrogation) 3. After some investigation by her attorney, Connie also names DyeCo as a co-defendant in her suit against Tasha. What remedies does Connie have against DyeCo? Liability Theory: Personal Injury (Tort) Remedies Damages. Connie may be able to recover compensatory and punitive damages from DyeCo if it acted w/ reckless disregard for public safety despite awareness of probable harm (Grimshaw, Gore, and progeny). She will argue that it disregarded the results of studies and tests. DyeCo will say that such data were inconclusive. To measure punitive damages, if any, the court will consider (1) reprehensibility; (2) wealth of D; (3) ratio to 5 compensatory damages; (4) amt necessary to create a deterrent effect. State Farm limits ratio to 1:9 5 Z Injunction. Connie can also ask for an injunction prohibiting DyeCo from using Red Dye #40. Given the harm she suffered, she might qualify for a TRO, and can get a preliminary injunction during litigation. A permanent injunction requires (1) inadequacy of legal remedy (danger?); (2) property interest (health of one's body?); (3) feasibility of judicial oversight (not complicated); (4) balancing the hardship to D if granted against the hardship to P if denied (poisoning favors P); absence of defenses. Restitution does not apply: Connie has conferred no direct benefit on DyeCo. Conclusion and Election of Remedies: Connie is entitled to actual and punitive damages from DyeCo, and likely an | injunction in light of the gravity of the harm caused by this product. However, recovery cannot duplicate recovery from Tasha  4. Flour Power, Inc. is a small company that had a five-year requirements contact to sell Tasha baking ingredients such as flour, sugar, baking powder, etc. in industrial quantities. Flour Power operates on the basis of oral agreements — it is an old hippie company and still believes in good will. Their agreement with Tasha was to run from April 2010 to April 2015. Although Flour Power delivered $3,000 worth of baking supplies to Tasha in April 2010 and again in December 2010, they have not received a dime in payment. What rights and remedies, if any, does Flour Power have against Tasha? Liability Theory: Breach of requirement contract. Remedies: Monetary recovery. If the contract is valid, Tasha must pay expectation damages of $6,000 for supplies she received in April and December per the agreement. Specific performance. There is no further expectation under a requirement contract, so specific performance would not apply. Defenses. First, to satisfy the Statute of Frauds, a five-year contract should be in writing so Tasha will argue that this is not a valid enforceable contract. Second, this is a requirements contract, so she will argue (successfully) that she has no future obligations or liability. Liability Theory: Unjust enrichment. Remedies: If there is no valid contract, Tasha would still be required to make restitution under a quasi-contract theory of quantum valebant for goods received and accepted. She will have been unjustly enriched unless she pays for the goods. Thus, she owes at most $6,000 in restitution for the baking supplies received in April and December. Under either theory, she does not owe any future damages. Conclusion and Election of Remedies: Flour Power is entitled to $6000 for the goods it delivered, but it had no guaranteed future expectation under a requirement contract, so it is not entitled to any further damages. 5. In her haste to vacate the premises, Tasha leaves behind an expensive state-of-the-art KitchenAid mixmaster (a traditional type of electric food processor). Larry Landlord takes it home and installs it in his own kitchen, where he currently makes personal use of it at least once a week. If Tasha were to reappear and object to Larry's conduct, what remedy or remedies, if any, would Larry owe Tasha for using her mixmaster without her consent? Discuss. Liability theory. Trespass to Chattels or Conversion of the Mixmaster. Remedies: Damages: Tasha can claim damages for the fair market value of the (used) mixmaster at the time of the conversion or its diminution in value, plus punitive damages. There is no evidence of loss-of-use damages. Restitution: see below. Coercive Relief: Not applicable since this is a one-time event. Defense: Estoppel by abandonment. Liability theory: Unjust Enrichment. Remedies: Restitution: Tasha can waive the tort and sue in assumpsit (quasi contract) for the rental value of the mixmaster plus any profits or proceeds Larry has enjoyed by using it (however, he seemed to be using it for personal rather than commercial benefit). She can also measure restitution in the amount Larry would have had to pay to rent a mixmaster. Alternatively, she can seek replevin of the appliance. Defense: Estoppel by abandonment. Conclusion and Election of Remedies: Tasha will probably just want her mixmaster back unless the wear and tear is substantial. The FMV of a used mixer is not great, so she should ask for replevin. TOTAL POINTS 25 De 4 Remedies LSN_Schwartz_Final_2012SL Schwartz 1) ======== Start of Answer #1 (2930 words) = Question 1: ~ Larry v. Tasha’ Larry has a number of causes of action against Tasha. First COA => agreement for a commercial space downtown Goatham City. Secondly, Larry can sue ince Tasha left the premises with extensive damage. 0 Thirdly, conversion or theft of property and fixtures landlord purchased and installed \r when Tasha moved into the space. nt: Here, Landlord will argue that there is an enforceable lease agreement between he and Tasha. The lease is for 5 years, and the parties do have hs e in writing. As a result, Landlord expected U \\ Tasha to pay monthly rent of 1000.00 and comply with the terms of the contract (notice sen of moving out and pay the utilities). Damages for breach: Since landlord is suing for breach of agreement, Landlord will seek expectation damages. Expectation damages will provide what is due under the contract, and will put the Landlord in the promised place according to the contract. Here, however, the contract contains a termination clause which allows for early termination provided there is 30 days written notice. Tasha did not provide notice, so Page 1 of 12 (Question 1 continued) IDs ~ Remedi gon rtz_Final_2012SL Schwartz WO yok really the agreement is essentially still ongoing and Tasha is in breach. Essentially what it comes down to is that Landlord sega nc rent the commercial place to another tenant. If Landlord rents the space for a lower than 1000 per month, then Tasha will be liable for the difference between what Landlord would have received within the five years with Tasha and within the period with the new tenant (cost of cover basically). Here, however, Landlord makes not attempt to mitigate. Landlord might argue that he can't find a new tenant quickly because of the condition of the property and that it will take time to repair. Landlord may also seek consequenti s, which are special damages and are only available if reasonable and foreseeable at the time of contract formation. Landlord will argue that Tasha is liable for costs incurred in finding a new tenant if lease is breached without notice. Not sure if destroying the space is a breach of the contract since under the contract terms Tasha did not have any specified terms of maintaining the condition of the property. Consequential damages are not likely here since not so reasonable and foreseeable. - Coercive relief: Here, Landlord might argue specific performance of the lease agreement. For specific performance there must be a valid, enforceable contract (quantity, time, identity of parties, and price), legal remedy for breach of contract is inadequate, judicial oversight is feasible, and no defenses to SP. Here there is a valid lease agreement between Landlord and Tasha, which specifies Q-TIP. Landlord can argue that legal remedy is inadequate because he can't find a new renter since the place is destroyed. It is feasible to make Tasha pay for her breach of the agreement. Page 2 of 12 (Question 1 continued) ID: Remedies_LSN_Schwartz_Final_2012SL Schwartz Here, however, Tasha may argue that Landlord was responsible for avoiding consequences of the breach and needed to mitigate. This might be a problem for Landlord since he didn't mitigate, but perhaps he could argue that he chose a reasonable alternative, which was to sue for cost of repair (to be analyzed later). ¢ Restitution: Not applicable here. _ Negligent destruction of property: Here, Landlord will sue for cost of repair for the damages done to the space by Tasha. Tasha has enaged in negligent behavior as a tenant, and that has caused the space to have damaged floors, broken pipes, and garbage everywhere. Since the damage is a result of Tasha's negligence Landlord can sue for compensatory damages, which flow directly from her negligent behavior. Consequential damages may be available for any other consequences of her breach. Perhaps Landlord can sue for loss of opportunity to rent to another tenant in addition to the cost of repair (compensatory). In addition, perhaps Landlord will sue for diminution ‘in value since the Tasha took the fixtures which partially diminished the value of the property. If that is the case, Landlord will seek difference between FMV before and FMV after the fixtures were removed. yal Restitution: no unjust enrichment conferred by Landlord onto Tasha. See below in Coercive relief: Not likely here since the damaged has occured. conversion argument. Page 3 of 12 (Question 1 continued) ID Remedies_LSN_Schwartz_Final_2012SL Schwartz Connie's health insurance likely covered the bill, if not most of it. Tasha will argue Connie is gaining double recovery by asking for the amount of medical costs. Since Connie's insurance is a private one, the collateral source rule does apply and Tasha's argument will not suffice. The only time there are limitations on recovery is company once she receives money from the suit. he In addition, Connie may seek pain and suffering, but this will only be awarded of the condition is permanent and really egregious. Here, Connie was only hospitalized for a week and she appears to be aok now. As a result, Connie will likely not get indirect/special damages in the form of pain and suffering which would have been calculated considering per diem unit and future capacity. Connie may seek punitive Ganages if she is suing Tasha's cupcake company, and the company is a corporation. For corporate punitive damages there needs to be a concious disregard and knowledge of probable dangerous consequences. The courts will apply the BMW/Gore considerations which include degree of reprehensibility( no extrajudicial evidence), wealth of defendant, ratio between compensatory and punitive damages (no more than 1:9), and other statutory fines or criminal sanctions involved. Here, Tasha will argue she did not know that Red Dye #40 contained dangerous chemicals and that the proper defendant is DyeCo. Page 6 of 12 (Question 1 continued) TD: Remedies_LSN_Schwartz_Final_2012SL Schwartz Thus, Connie will likely only be able to get medical costs, loss of wages during hospitalization, and perhaps any future medical costs or loss of wages. No punitive damages if negligence, but if reckless disregard/gross negligence and suing Tasha as a corporation then perhaps, but not likely. ~ Question 3: Connie names DyeCo as a co-defendant in her suit against Tasha. Here, Connie will allege that DyeCo acted grossly negligent for failure to warn about the chemicals contained in the dye. DyeCo conducted experiments and was aware of the egregious consequences of the chemicals. DyeCo knew that the consumption of the chemical correlated to an increase in kidney tumors. As a result, Connie can seek to go after DyeCo since it has bigger pockets and punitive damages may be awarded. For "corporate punitive damages there needs to be a concious disreg bable dangerous consequences. The courts will apply the BMVW/Gore sonallerations which include degree of reprehensibility( no extrajudicial evidence), wealth of defendant, ratio between compensatory and punitive damages (no more than 1:9), and other statutory fines or criminal sanctions involved. Here, DyeCo was aware of the possible danger and likelihood of kidney tumors, and still decided to use the dye and continue to market the popular item. DyeCo will argue that there were no credible studies at the time and that it didn't know for sure of the probable dangerous consequences. There were lots of buzz about the hazards online, so DyeCo will likely be found grossly negligent here and the court will consider how bad it's conduct was, but may not use extrajudicial evidence to show reprehensibility. The court will also Page 7 of 12 (Question 1 continued) ID: Remedies_LSN_Schwartz_Final_2012SL Schwartz consider DyeCo's financial state and stability in deciding the amount of punitives. With respect to compensatory, the court can award treble damages. Coercive relief: Here, Connie may seek to have the court compel DyeCo to refrain from selling the dye. At the outset of litigation Connie can request a temporary restraining since there is an emergency here (public welfare) and the harm is irreparable since people are getting sick and the dye contains dangerous chemicals. Within 10 days there will be a hearing and perhaps the court will grant SRR ea REEIcompeling DyeCo to refrain from selling the dye because of the harm and bad effects. For a preliminary injunction to apply the court looks at factors which include 1) substantial likelihood of irreparable harm, 2) balance of the hardships in favor of Landlord, 3) merits of the case; 4) interest of the public, and 5) maintenance of the status quo. Here, the factor regarding substantial likelihood of irreparable harm is crucial and may justify the preliminary injunction until the true effects of the dye are discovered. Once there has been litigation and the true effects of the dangerous chemicals are resolved, then the court may or may not iseul'a petnenentionnatiif® For a permanent injunction, the court will consider 1)1) inadequate legal remedy, 2) property interest at stake, 3) feasibility of injunction enforcement, 4) balance of hardships, and 5) no defenses to injunction. These are elements that must be met. Here, there is no adequate legal remedy because we can quantify the effects of the dye being sold by DyeCo. There is a property interest at stake, and that is peoples lives and interest in Page 8 of 12 (Question 1 continued) ID: - Remedies_LSN_Schwartz_Final_2012SL Schwartz compensated in damages, she can recover fees for rental of the machine while Landlord deprived her of use, which is compensating for past harm. Landlord used here mixmaster without her consent, which means he has her property in bad faith and should be liable for her loss of use of the machine, which can be awarded in the form of rental fees. Landlord will argue that Tasha is estopped from suing because she left the mixmaster _ behind when she left the space. Under estoppel a plaintiffs conduct causes the defendant to rely upon such conduct, and as a result plaintiff losses abilty to sue. Furthermore, Larry may argue that the statute of limitations bar Tasha's suit. The usual SOL starts to run at the time of injury or if conversion, the time plaintiff realized property was stolen. Here, Tasha probably knew she left the mixmaster, and if she is trying to sue more than 3 years later, Landlord may allege SOL defense. Perhaps Landlord may also argue in pari since Tasha is equally culpable by taking his appliances and destroying the commercial space that was once a cupcake joint. With respect to coercive relief, Tasha may seek a mandatory injunction, which will order Landlord the affirmatively give back the mixmaster. This of course is subject to property interest and whether or not Tasha is the owner, or has she relinquished ownership. Perhaps Tasha may seek an equitable lien to benefit from the installation of the kitchenaid mixmaster, which is expensive equiptment. This will enable Tasha to be compensated for the unjust enrichment of Landlord with respect to personal use of the equiptment in his home. This will likely not be the case, unless the value of the use and Page 11 of 12 {Question 1 continued) ID: Remedies_LSN_Schwartz_Final_2012SL Schwartz installation has substantially benefited Landlord's property. Conclusion: Since Tasha must elect her remedies, it is better for her to sue under a theory of restitution to replevy the mixmaster, or obtain a lien on the property for the amount of the mixmaster and perhaps profits if any, because Landlord acted willfully. Page 12 of 12 ID: Remedies_LSN_Schwartz_Final_2012SL Schwartz END OF EXAM Page 1 of 0