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Law Outlines Modern American Remedies 4th Ed. Laycock Outlines

Restitution Outline

Updated Restitution Notes

Modern American Remedies 4th Ed. Laycock Outlines

Modern American Remedies 4th Ed. Laycock

Approximately 64 pages

This is an outline for Remedies and the book "Modern American Remedies" 4th Edition by Douglas Laycock. I am at UVA Law and Laycock was my professor, this outline encompasses both his lectures and his book....

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Restitution

Restitution recoveries were available both in law and in equity. So sometimes it is an equitable remedy, other times not

Restitution acts as both a substantive area of law and a remedy

(if d commits a tort, he can be liable in both damages and restitution – but can obviously only recover one or the other)

  • Substantive Area of Law: When there is no other cause of action – i.e. mistakenly received a large amount of money. No action in tort or contract for plaintiff, but there will be in restitution.

  • Remedy: Acts as a remedy in a tort or contract claim when damages are also available as an alternative

    • Example: someone steals your $200 camera, sells it to a pawn shop for $150 and then bets it all on the blackjack table and it is now worth $1,000. Can sue for the tort of conversion, and the law allows either a damage remedy of around $200 OR a restitutionary remedy measure by the thief’s gains ($1000) [this was the thief does not profit from stealing].

  • But most importantly, Restitution is about unjust enrichment. NO RECOVERY absent proof that defendant has been unjustly enriched.

    • As a matter of remedy, restitution gives P an award based on DEFENDANT’S GAINS, NOT PLAINTIFFS LOSSES

      • Benefit is determined by the value conferred to the defendant – if it is a benefit other than money there is a good chance loss to P/gain to D will not be the same – this presents issues

        • Example: a half-built barn is not conferring any benefit on the defendant likely. Plaintiff will have lost the value of the supplies to build the barn and since no benefit to D, no claim in restitution.

          • But, going to be hard to say no benefit for something that can be easily sold and has an ascertainable market value where you can quickly sell it and realize that value.

Difference between Damages v. Restitution: Damages are in the amount that Plaintiff lost, restitution is the unjust benefit (what defendant gained) that defendant received

Unjust Enrichment/Restitution Claims are Attractive to Plaintiffs in Three Groups of Cases:

  1. There is no other cause of action

    1. D is innocent, remedies tend to be less dramatic. Usually take his benefit, not necessarily the gains he made from that while he had. If d is a conscious wrongdoer, we will take everything.

  2. When defendant’s gain exceeds plaintiff’s loss (stealing purse and gambling hypo)

  3. Cases in which defendant is insolvent but plaintiff can identify specific property that defendant wrongly acquired – he is treated as an owner rather than a creditor in bankruptcy.

Three Kinds of Restitution Cases:

  1. Nobody did anything wrong – unjust enrichment creates COA

  2. Conscious wrongdoer has a profit greater than damages

  3. Restitution plaintiff is trying to assert his rights as owner of the property so he does not have to share with creditors (v. wrong doer or third parties)

Mistake

Mistake: Requires that Plaintiff NOT KNOW they made a mistake at the time they did it.

  • If a person is aware of some uncertainty and pays/builds/etc. anyway, she is not making a mistake, she is knowingly taking a risk or settling a dispute.

  • RULE: cannot recover restitution for mistake made in the face of uncertainty, sometimes called the “Voluntary Payment Rule”

The question in restitution is to decide what excuses are good enough to justify imposing a FORCED EXCHANGE (D did not request, and maybe does not even want, the benefit) despite the strong presumption against it.

  • Excuses frequently recognized as VALID:

    • Mistaken Improver (did not request/maybe did not want): i.e. someone builds a barn on your land. Once it is there, it rarely makes sense to tear it down or to move it. If we followed the policy of no forced exchanges, we would just let the owner of the land keep the building and plaintiff would just be out of luck.

      • Seems to harsh to many legislators and most modern courts. Cases about mistaken services are a tiny fraction of the cost of building an entire building on your land. So we make the recipient pay the most conservative measure of value, or force him to choose between buying the building or selling the land.

    • Emergencies (did not request/wanted): Pretty easy case. If D could he would have bargained for it. So even though he did not request it, we know he wanted it and restitution is proper.

    • Unenforceable Contracts (requested/wanted (maybe unclear as to willingness to pay): Likely clear that D wanted the benefit. If he requested with no mention of price, we assume market value. If there is an indication of an amount of willingness to pay, we go with that.

  • Excuses Recognizes as INVALID:

    • Mistaken Services (did not request, did not want): without the large value of the mistaken improver cases [i.e. this is likely a tree trimmer or fence painter] likely cannot recover because the justification is not the same as if you had something as valuable as the house

    • Knowingly Confers Unrequested Benefits: Can never recover. We want to force them to contract with D.

No Forced Exchanges: Strong presumption against forcing an innocent defendant to pay for benefits she never requested and might not want. Not an issue for cash obviously but this is a serious issue when plaintiff demands a cash payment for a non-cash benefit

  • Such forced exchanges create problems of valuation, liquidity, and autonomy

    • That an item has a market value of $1,000 is no evidence that it is worth that much to the recipient (Valuation), that she has the resources to buy it (liquidity), or that she has any desire to buy it (autonomy).

  • We do not give D the benefit of the doubt, however, when they are put on notice of the mistaken benefit to come to them. In this case he is accepting a benefit and will have to pay for it – at least for everything done after he discovered it (unless of course he cuts it off quickly and tells them to stop)

    • Simples example of this is D watching the barn go up, then claiming that he does not want it.

Mistaken Conferred Benefit of...

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