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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
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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$$ortable% or #unen orceable%or void &e. . counsel ee claims'
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!CC SEC'I(# 2% 02) !#C(#SCI(#*+LEC(#'R*C' (R 'ER,
( the court 3nds the contract or any term othe contract to have been unconscionable atthe time it "as made the court mayre use to en orce the contract
en orce the remainder o the contract "ithoutthe unconscionable termlimit the a$$lication o any unconscionableterm as to avoid any unconscionable result
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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
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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
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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*
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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
/*
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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 . $%&%'
laches defense asksWas the plainti in assertin herri hts uilty of unreasonable delay
that pre6udiced the defendants*
the societal interest in vindication
of a meritorious claim can beoutwei hed by the disruption itstardy #lin would cause
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'he disco6ery rule8rs. >o$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*+
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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" .
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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.
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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
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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$$licable statute o
limitationsIGhat about her ri hts as heirIConstructive trust as remedyI
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romissory Estoppeleinbe 0 v. 1+ei++e Company 1353 p) 41
"D:3E4F:1, that the salary ofAnna 3acks einber be increasedfrom @BC . to @G . per month
and that she be a orded theprivile e of retirin from activeduty in the corporation at any timeshe may elect to see #t so to doupon retirement pay of @2 . permonth, for the remainder of herlife."
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romissory Estoppeleinbe 0 v. 1+ei++e Company 1353
Promissory Esto$$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.
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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
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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.
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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.
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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 .
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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 ."
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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"
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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
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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$etitioner isin an action to collect a debt forbreach of a contract betweenthese parties, petitioner has ari ht to have the 6ury determinenot only whether the contract hasbeen breached and the e tent of
the dama es if any but also 6ust 4+Ch. 2 Equity and equitableremedies - Part 2
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Ross 6) +er"hard 13?0 p) 92&he common law did not permit
stockholders to call corporate
mana ers to account in actions at
law
Why does the court allow a trial by
6ury*4*
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Ross 6) +er"hard 13?0&he directors of the corporation
were accused of convertin
corporate assets and of " ross
abuse of trust, ross misconduct,
willful misfeasance, bad faith,
>and? ross ne li ence."
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Ross 6) +er"hard 13?03tockholders demanded derelict
oPcers "account for and pay to the
'orporation for their pro#ts and
ains and its losses."
+etitioners demanded a 6ury trial
on the corporation/s claims.
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Ross 6) +er"hard 13?0A derivative suit has dual as$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.
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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.=
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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.
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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
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