Equity (Me)

Question 1

What is the test for balancing the hardships related to injunctive relief?

Answer 1

Weight the benefit to the P if the injundction is granted vs. the hardship to D that would result. If the benefit to P is greatly outweighted by the burden on D, the court will generally not issue an injunction. Also consider D’s behavior. (Did D act willfully?)

Question 2

What kind of tortious conduct may be subject to injunctive relief?

Answer 2

1. Nuisance (consider the balance of hardships; generally only available against private nuisance; P would have to show standing to sue for public nuisance (i.e., special injury).
2. Trespass to Land (consider balance of hardships; injunction proper where trespass is continuous.
3. Waste (generally, equity will not grant injunctive relief in ameliorative waste situations).
4. Conversion of or Trespass to Chattels (injunction proper where the interference is continuous or the converted chattel is unique).
5. Defamation (courts hesitant to grant b/c of free speech rights).
6. Invasion of Right of Privacy (consider potential free speech problems if a publication is involved).
7. Abuse of Judicial Process (?)
8. Unfair Competition (e.g., interference w business relationships and interference with industrial property rights).
9. Infliction of Physical Harm.

Question 3

Is enforcement of order for specific performance feasible?

Answer 3

1. Personal Services Contracts will not be enforced. In Florida, franchise agreements are considered personal service contracts and so are not subject to suit for specific performance.
2. Land Sale Contract may have jurisdiction issues. If the seller and the res are before the court, but the buyer is not, it would be difficult to grant specific performance b/c it requires the buyer to make a payment of money, which is an in personam order.

Question 4

What is Equitable Conversion?

Answer 4

Under doctrine of equitable conversion, after a contract for sale of land has been entered into, the seller has a personalty interest and the buyer has a realty interest. Applicable when land sale contract is specifically enforceable.

NOTE: In Florida, the buyer has the risk of loss as soon as the parties enter into a contract for the sale of property. (Also majority rule.)

Question 5

What is replevin?

Answer 5

An action to recover personal property that was wrongfully taken or detained.

Question 6

What is an equitable lien?

Answer 6

An equitable lien can be imposed on D’s property to secure a debt owed to a P if the P demonstrates tha tthe D misappropriated Ps money or property, thus creating a debt.

• P’s property traceable to property held by D, the retention of which results in unjust enrichment.
• Holder of lien has priority over other creditors.
• Court may require proof of inadequate legal remedy.
• If property attached to lien doesn’t satisfy debt, then deficiency judgment may be granted.
• Equitable defenses apply.

NOTE: appropriate where property in D’s hands is worht less than P’s claim or where misappropriated money is used to improve, not acquire title to, property. Constructive trust should be used when property worth more than P’s claim.

Question 7

How will the court enforce a Time is of the Essence Clause?

Answer 7

1. If the contract is wholly executory, the clause will be strictly enforced.
2. If the contract is partially executed, the court will seek to avoid the effect of the clause so as to avoid forfeiture.

Court will be likely to avoid effect of clause if the loss to the other party is small, the forefeiting party would suffer undue hardship, tardiness is de minimis or the seller has performed acts giving ris to a waiver situation. A judicial sale also might be appropriate.

Question 8

What is subrogation?

Answer 8

Subrogation permits a person who is required to pay the loss or obligation of another, or to discharge a lien on another’s property, to succeed to the rights of the person paid.

Question 9

Can a donor have a gift instrument reformed?

Answer 9

Yes, except where donee has substantially relied on the gifts as conveyed.

Question 10

What is a temporary injunction?

Answer 10

A temporary injunction is used to preserve the status quo between the parties and prevent irreparable injury until a full trial on the merits can be held.

Note: there is a right to a hearing within 5 days of a motion to dissolve or modify the temporary injunction.

Question 11

What defenses does Defendant have to injunctive relief?

Answer 11

1. Unclean hands (the improper conduct must relate to the same transaction involved in the litigation. Unrelated unfair conduct is irrelevant.)
2. Laches (may be available if P has unreasonably delayed in bringing an action, the delay is prejudicial to D, and D had no knowledge that P would claim the right alleged in the suit. Laches start to run when P has knowledge that a right has been infringed).
3. Impossibility
4. Hardship
5. Freedom of Speech

Question 12

What is a constructive trust?

Answer 12

It is a restitutionary remedy imposed by courts to prevent unjust enrichment when a wrongdoer has gained title to property through misappropriation of another’s money or property.

• D’s title must be traceable solely to misappropriated property.
• Court may require showing that legal remedy inadequate.
• Court will force trustee to convey misappropriated property or product to P.
• P has priority over unsecured creditors.
• Defenses: usual equitable defenses and transfer to BFP terminates P’s equitable right to property.

Question 13

What is an injunction?

Answer 13

An order by a court to a D to either do something (mandatory) or cease from doing something (negative). A negative injunction is easier to get since no supervision is required. Injunctive relief is against tortious conduct being or about to be committed. (Injunctive relief is generally not available against criminal conduct on constitutional grounds, as it would deprive D of his right to a trial by jury.)

Question 14

What are the requirements for issuance of a temporary injunction?

Answer 14

1. Notice to D.
2. A bond to secure D’s losses in case the injunction should not have been issued.
3. P must show that she is likely to prevail on the merits at trial, but will suffer irreparable injury, loss or damage before the trial can be held unless a temporary injunction is granted.

Note: an ex parted temporary injunction (no notice or adversaril hearing) may be granted in drastic circumstances.

Question 15

What is the doctrine of Part Performance?

Answer 15

The part performance doctrine may operate to take a contract out of the Statute of Frauds.

An oral contract for the sale of land may be enforced if there is part performance that unequivocally indicates that the parties have contracted for the sale of land. Florida requires payment, possession and valuable improvements.

Question 16

What does a P have to show to obtain an injunction?

Answer 16

1. The legal remedy is inadequate;
2. A property right or at least a protectable interest is involved;
3. Enforcement of an equitable decree would be feasible, practicable, and effective to vindicate the P’s rights;
4. The hardships to the D, where relevant, do not greatly outweigh the gain that the P may get from the relief sought; AND
5. No defenses are available.

Question 17

What are the defenses to Reformation?

Answer 17

1. Unclean Hands
2. Laches
3. Equitable Defenses
4. BFP
5. Nondefenses: P’s negligence. Statute of Frauds and parole evidence rule do not apply in reformation cases.

Question 18

When is the legal remedy inadequate?

Answer 18

• Money damages might be inadequte if: 1. damages are speculative; 2. injury is irreparable; 3. a multiplicity of actions might be necessary; 4. P has no right to damages (the tort is only prospective); or 5. D is insolvent.
• Replevin may be inadequate if: the D could put up a replevin bond for a unique chattel or if there has been a change in the chattel (so that the sheriff would not be able to identify it).
• Ejectment may be inadequate if: the sheriff refuses to act. For government injunctions to enforce its police power, irreparable harm is presumed.

Note: a liquidated damages clause can make legal remedy adequate if it provides that it is the exclusive remedy of the parties.

Question 19

Will specific performance be granted for Land Sale Contracts?

Answer 19

1. To seller only if deficiency is minor.
2. To buyer despite substantial deficiencies, but not if deficiency is very large.

Note: if specific performance is granted, there must be an abatement in price for the deficiency.

Question 20

What are the defenses to rescission?

Answer 20

1. Unclean Hands
2. Laches
3. Other Equitable Defenses
4. NOT negligence of P.

Question 21

What is Reformation?

Answer 21

Reformation changes the written agreement to make it conform to the original intent of the parties.

• Must have valid contract
• Grounds for reformation:
  
  • Mutual mistake of fact or law. Unilateral mistake coupled with fraud or inequitable conduct.
  • Misrepresentation – innocent or fraudulent.

Question 22

When does the duty to provide marketable title to real property arise?

Answer 22

The duty to provide marketable title arises at closing.

Question 23

What are the two types of injunctions?

Answer 23

Interlocutory and permanent.

Question 24

Covenants Not to Compete

Answer 24

Florida allows so long as reasonable in time, area, and line of business.

Requirements:

1. In a writing signed by person against whome it is sought to be enforced.
2. P must show a legitimate business interest (trade secrets, customer relationships, goodwill, etc.), AND
3. Restraint must be reasonably necessary to protect the legitimate business interest.

Question 25

What is a legal remedy for a tortious act?

Answer 25

Money damages, replevin or ejectment.

Question 26

What is Rescission?

Answer 26

Rescission voids the contract and leaves the parties as though the contract had never been made. Grounds: 1. Mutual Mistake (must be of material fact) 2. Unilateral Mistake (only where nonmistaken party knew or should reasonably have known of mistake) 3. Mistake of Law 4. Misrepresentation (must be a material misrepresentation of fact or law) 5. Duress 6. Undue Infuence 7. Illegality 8. Lack of Capacity 9. Failure of Consideration

Question 27

Is jurisdiction required for equitable remedies?

Answer 27

Personal jurisdiction is required in most equity cases. In some cases, courts will exercise quasi in rem jurisdiction. Note: Be sure the court has sufficient contacts with the D (e.g., D is a resident of the court's jurisdiction).

Question 28

What must a Plaintiff show to obtain specific performance?

Answer 28

1. a valid contract exists; 2. P has performed or is ready, willing and able to perform; 3. the legal remedy is inadequate; 4. enforcement is feasible; AND 5. there are no defenses available to D.

Question 29

What is an equitable mortgage?

Answer 29

An equitable mortgage is imposed by a court against a deed absolute when a creditor has received the deed from a debtor solely to secure an obligation and later refuses to reconvey the property upon satisfaction of the debt. Court wil treat deed as mortgage and force creditor to foreclose if mortgage unpaid or reconvey if mortgage piad.

Question 30

Is there a right to a jury trial in equity cases?

Answer 30

No.

Question 31

What are the defenses to specific performance?

Answer 31

1. Standard Contract Defenses * Statute of Frauds unless Part Performance Doctrine applies (Florida requiers the following: payment, possession and valuable improvements.) * Inadequate consideration 2. Mistake (bilateral, material and a mistake of fact rather than a mistake of law. Unilateral mistake if nonmistaken party knew or reasonably should have know of mistake.) 3. Impossibility 4. Misrepresentation (must concern a material factor. party concealing info must stand in confidential relationship to the other contracting party. 5. Equitable Defenses including unclean hands, laches, unconscionability.

Question 32

What types of items are rare or unique and may be subject to specific performance?

Answer 32

1. Land. (Land is ALWAYS unique. Similar or better land is NOT sufficient.) 2. Personal Property that is unique in kind, of personal significance to buyer using a reasonable person test, or in short supply. If not, money damages are sufficient. 3. Personal Services that are unique. (Even if services are unique, equity will not force a person to provide personal services to another b/c of involuntary servitude problems. HOWEVER, D can be prevented from working for someone else.)

Question 33

Can a donee reform a gift instrumnet?

Answer 33

No. But some courts allow reformation where donee has detrimentally relied on donor's original intent which was not expressed in the instrument.

Question 34

What are Florida's rebuttable presumptions re Covenants Not to Compete?

Answer 34

1. If protection sought for trade secret, court will presume that a restraint of no more than 5 years is reasonable, and a restraint of more than 10 years is reasonable. 2. If protection sought for something other than trade secrets: * D is former employee, agent or independent contractor and sale of business assets or equity interest not involved, then \< or = 6 months reasonable, but \> 2 years unreasonable. * D is former distributor, dealer, franchisee, or licensee of a trademark or service mark, and not sale of business interests, etc., then \< or = 1 year reasonable, but \> 3 years unreasonble. * D is the seller of all or part of any business interests, etc., then \< or = 3 years reasonable, but \> 7 years is unreasonable.

Question 35

What are laches?

Answer 35

Legal doctrine that an unreasonable dely in seeking a remedy for a legal right or claim will prevent it from being enforced or allowed if the delay has prejudiced the opposing party. A form of estoppel.

Question 36

Time is of the Essence Clause

Answer 36

Requires performance within a stipulated period of time. Must be expressly included in contract; in its absence, a reasonable time to perform will be inferred.

Question 37

Statue of Limitations vs. Laches

Answer 37

SOL concerns the mere passage of time while Laches concerns the EFFECT of the passage of time.

Question 38

When are equitable remedies available?

Answer 38

Only when there is not an adequate remedy at law. There is no absolute right to equitable relief as there is for a legal remedy.