Schwartz_Remedies_Answer_SU11

Schwartz_Remedies_Answer_SU11 - iD Remedies_Schwart...

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Unformatted text preview: iD: Remedies_Schwart z_Final_2011UL Schwartz ID: (Exam Number) Exam Name: Remedies_Schwa rtz_Final_201 1 UL Instructor: Schwartz Grade: Page 1 of1 Exam taken with SofT est v1 0.0 iD: Remedies_Schwart z_Final_2011UL Schwartz 1) 1) Pop's COAs, Remedies v. Shakespeare 00. Pop (P) will sue Shakespeare Co (SC! breach of K. The first form of remediation P will seek is legal remedy in the form of expectation damages - ie, the amount P would have expected to receive had SC not allegedly ..—__ breached the rental K. Often times expectation damages are measured between the difference of the value delievered and the price of the K as expected under the K, or sometimes even via the difference between the amount expressly promised or warranted and the value delivered. The breach, if one occurred, was after two full weeks of production, which followed two full months of rehersal. There were supposed to be two full months of production, so there were roughly 7 weeks, or just over 1 1/2 months remaining on the K. P will argue that they are entitled to the amount K'd for under the liquidated damages provision in the K, amounting to 1000 per damaged article rented. In order for a CT to enforce an LD provision, it must be reasonably forecast to the estimated actual damages, should there be any, and typically difficult to ascertain at the time of K formation. SC will argue that this LD provision constituted an overliguidated penalty with little bearing to the actual damages to the rental equipment. The clause bears little attention to the length of the K, and its hard to discern what the value would be to any actually damaged property would be (lack of facts), especially if costumes may be different than say the balcony or other set-type rental equipment. The court will likely not enforce the LD provision for failure to accurately forecast what the actual damages would have been. Page 1 of 9 (Question 1 continued) iD: ' Remedies_Schwart z_Final_2011UL Schwartz Measuring the disappointed expectation from the middle of the 3rd month forward, P would argue that they are entitled to the final month owed under the K ($1,200), assuming the other 3 monthly installments have already been made. P may also argue that they are entitled to possible consequential damages —- those not included by the parties in their contract, but subject to award, if specifically plead, and reasonably foreseeable to both parties at the time of K-ing. Here, there is nothing explicit in the facts, but since SC failed to return the rental agreement, and its unclear if they ultimately did, P could be out lost profits from future engagements. Loss profits are often not awarded for being speculative, but it could be possible here. P may argue they are also entitled to punitive damages under K, but Punitives are not warranted under a true K theory, only if the source of the duty comes from tort (intentional or at least grossly negligent). P may also have a theory under restitution against SC. Restitution is measured according to the profits earned by the D, rather than harm suffered to P. The value of restitutionary awards must always relate back to the FMV of the items in question, possibly via rental value, loss of profits, or wages avoided. Here P will seek to replevy the rental equipment (voluntarily bestoewed under the K, but involuntarily retained.) The court will also fashion a quasi-k in quantum meruit for the services not already paid for (ie- the remaining month +). Again, this will be measured agains the profits received by SC. In the alternative, P may seek injunctive or coercive relief, a remedy in the form of forcing or prohibiting action of the other party. An injunction will not levy if a legal remedy is adequate. P will seek specific performance of the K. Specific performance is -—.—-———_ only granted if (elements) 1) there is a valid K, 2) all conditions precedent have been Page 2 of 9 (Question 1 continued) I'D: , Remedies_schwartz__Final_2 0 llUL Schwartz 2 satisfied, 3) legal remedy would be inadequate, 4) there is mutuality of remedy/performance, 4) enforcement is feasible and 5) it survives defenses. Here, there is a valid K with valid consideration and definite enough terms; P has satisfied his end of the bargain and all conditions; legal remedy is essentially the same thing (for $); performance could be made of either party (35 for services already rendered); and enforcement would be feasible since the terms of the K are clear and only a certain amount of money is owed. For defenses, SC may argue unclean hands for not fulfilling the K in good faith, but P will argue that they built the set according to the proper std of care. SC may also argue In Pari Delicto - under the theory that they were at least half at fault for the destruction of the set. This would require the Ct to balance the blame between the parties - and P will argue, likely with success, that the greater cause was the poor building condition, not their set construction. P will also sue SC under tort for negligence in failing to ensure the building was fit for their sets. They will claim compensatory damages to the many props destroyed in the mayhem. For destruction of property, the proper measure of compensatory damages will be the FMV of the items just before/at the time of destruction. Where the set pieces are special use property - the ct would award the the cost of replacement, because there would be no FMV to measure from. Here, its unclear whether there would be a FMV because the set pieces could have been specifically tailored and manufactured for the particular play (as was the "magnificent" balcony). Other set pieces could have been run of the mill - who knows? Under restitution, P will argue they could potentially be entitled to the disgorgement of profits under another quantum meruit theory, though this is not truly applicable. Page 3 of 9 (Question 1 continued) iD: Remedies_Schwart z_Final_2011UL Schwartz Under coercive relief theory, P will seek replevin of the rental equipment under a theory of conversion. Here, 80 is refusing to return the sets and costumes, so this could be worthwhile in pursuing. ln summation, P will have to elect remedies that do not consitute a double recovery or contradictory recovery, as P is only entitled to "one satisfaction." The most lucrative option for P may be through restitution and quantum meruit for the remainder of the unpaid K portion - as the play was drawing rave reviews. This may not be possible since the play wont be ongoing as a result of the mayhem- and even if it were, SC would demand an accounting and apportionment to divy up profits. In the alternative, P should seek specific performance of the remainder of the K (probably just the 1,200 outstanding on the K), compensatory damages for the destroyed property, whether it be the FMV or the cost of replacement (special use?) - which is not a double recovery because the LD provision will likely not be enforceable as a penalty, and seek through replevin the rental equipment which should have been returned. 2) Shakespeare's COAs, Remedies v. Pop SC will counterclaim against P formw, due to the allegedly faulty craftmanship of the balcony design and construction. They will seek compensatory damages for the direct harm, loss of revenue/profits from tickets already sold, ;prospective sales and lost mercvhandise sales, as well as indirect damages in the loss of goodwill within the play-industry] going public. SC may also seek punitive damages _-_A under a theory of gross negligence when Juliet mentioned the balcony felt shaky and failed to act on it. P will argue as a defense In pari delicto (though rare for legal remedy defense) applies, because of the building's such shoddy condition- whcih SC was fully aware of as they resisted the urge to relocate knowing the public's liking for the building. Page 4 of 9 ( Question 1 continued) iD: RemedieSHSchwartz_Final_2OllUL Schwartz Its unclear whether the court will find equal fault here, but if they do, chances of success of 80's negligence claim would be siginificantiy. P would also argue that SC is under a duty to perform reasonable mitigation (doctrine of avoidable consequences) once Juliet got injured, "forcing" them to scrap the remainder of the play. Mitigation only needs to be reasonable. and where the opportuntiy were available to the tortfeasor to do the same, they cant fault the pltf for failure to mitigate. Here, its a close call whether SC could have actually mitigated under such constraints, finding another actress to play the lead role on such short notice. While a short term delay of the play would have certainly been reasonable while SC sought out another Juliet - making a decision as to the remainder of the play (in total) could be a little rash in the court's eyes. The court, otherwise, would likely warrant compensatory damages for the immediate physical damages suffered to the church and set. Since much of the tickets have already been sold, the court would likely award those too, since they can be determined with certainty and would be subject to doubt or speculation. The other tickets, those not sold would be a tougher sell though, since they were a little more speculative, though given the high success of the play for the first two weeks, they could be warranted. For punitives - SC will argue that P, as a corporation, that P consciously disregarded that their conduct would probably lead to injury or harm, and that P consciously and deliberately failed to rectify it. P was put on notice of the shaky balcony by Juliet during rehersal. The balcony, easily high enough to cause the injuries it ultimately did (to Juliet) should have put P on notice that someone falling from that height would probably be injured. Because P did nothing, SC will have a strong argument. in measuring Punitives versus a corporation, you look at the Gore/BMW factors: reprehensibility of Page 5 of 9 ( Question 1 continued) iD: Remedies_Schwart z_Final_2 O 1 lUL Schwartz the conduct; ratio to actual damages (generally shouldnt exceed 9-1 (state farm)) and the monetary sanctions for similar conduct. Also viewed is the relative wealth of the D, because the purpose of punitives is to deter future conduct through punishment (and as an example to deter other's future wrongful conduct). Here - the court will likely levy an award not too generous because the conduct was not very egregious, and with the actual damage amount unclear (subject to defenses)- the ratio shouldnt be too exorbitant either. (NOTE- facts are not detailed enough to determine whether Pop is really more of an individual. In any event- malice,fraud, or oppression will be dificult to prove, and even if they were- treble damages would likely be the limit to recovery). Under restitutionary relief, there hasnt been any benefit conferred to P, except that under the K - so this wouldnt be advantageous for SC to pursue. Similarly - coercive relief wouldnt be appropriate here because the harm has already concluded- its no longer ripe, and legal remedy whould be sufficient (and coercive relief is inappropriate where legal remedy makes the pltf whole.) Summarizing, SC should elect compensatory damages, which due to the raving reviews and already sold tickets, could be substantial. They should also seek, and likely receive some punitive damages for P's failure to rectify the probable danger. 3) Juliet's COAs, Remedies v. Pop JuW game-for the faulty balcony construction, once again. She will seek comnpensation in the form of her medical expenses (50k), here weekly pay —-——-—- H _—_—— from the play (SOD/wk for roughly 7 weeks). her other job pay (BOO/week for as long as she can prove she cannot work, 6 months), and damages for pain and suffering and emotional distress as a result of the fall. P will argue that under the collateral source J rule, since herjob health insurance is available, that she would receive a double Page 6 of 9 ( Question 1 continued) JED: Remedies_Schwartz_Final_20llUL Schwartz recovery for that 45k. However, since the health insurance is a private source (note- through HERjob, not medicare or social security)- it should not effect what P may owe Juliet, and Juliet will not get doiuble recovery because the job insurance will seek the money through subrogation. As for the other damages, these are likely the damages necessary to make her whole again. Unlike under K remedies, where consequential damages need to be foreseeable to the parties at the time of formation, indirect (or as Maycock calls them Consequential) damages neednt be contemplated or foreseeable to the parties (we are all a bunch of walking eggshellsl). The workers comp, however presents a different issue to the collateral source rule— since it is a public source. The rationale being that P also contributes to it, so J should not get a double recovery on P's dime. If her claim is awarded, as it is still pending, it may preclude recovery of the not for oralm . m 800lwk potentiain owed for her outside job. Juliet may seek punitive damages as well (see analysns ovefis it was her who said the balcony was shaky. This analysis and outcome will closely mirror that of the COA versus her former employer, SC. Resitituion— N/a since there is no benefit being conferred to P at this time, for J to disgorge. Coercive relief - Since the harm has already been committed, and there is no reasonable possibility it will be repeated (even if she was healthy, she got firedl), the claim would be moot and is no longer ripe. ln summation, Juliet should seek compensatory damages for her medical expenses, lost wages, lost earnign capacity, pain and suffering, as well as emotional distress (why not). These damages shouldnt contradict one another or be a double recovery, since they are for separate harms incurred. There may be a collateral source roadblock for A——# Page 7 of 9 (Question 1 continued) I'D: Remedies_Schwartz_Final_2 OllUL Schwartz the BOO/wk due to her workers comp claim, but that remains to be seen. 4) Wil be able to collect v. SC- lf Pop is successful, they should seek immediate action from the court to enforce the -—._.._—-‘- es down, P should seek injunctive relief in I rchUnrn ring the pendency of litigation, if the judgment. In fact, before the judgment c? Win? the form of a preliminary injunctio gr nted d petitioner can show strong likelihood of irreparable harm; hardships balance in their favor; likelhood of success on the merits and it serves the interests of the public. Here- P will be out the money owed under the K and no longer have their rental equipment since SC refused to return it; since SC is going under anyhow- what hardships will they have to balance?; it does appear they will be succesful in showing 80 committed the first material breach; and it serves the interests of the public insofar as P can continue to provide other play companies sets and costumes fulfilling the fervor of the playgoing public. If succesfull, SC's assets could be frozen in time. Alternatively, the court could fashion a construc ' trust over the property (rental e‘gui‘fi-fitalefused to return) of P's rl hm ossessrm, no that SC has assu title to. Th y would be holding it in trust (as trustees) for the use of P. As for the money owed under the K, P should seek out an equitable lien which they could attach to other assets of 80's as whatever they may have left. Additionally, depending on the business makeup of SC, if a general partnership, there is unlimited personal liability, and an equitable lien has no remoteness issues. so they could attach any sort of recordable asset (likely real property). This amount will not be subject to fluctuation, it will be static, but it will be there for P as a secured interest, should that asset ever change hands. In summation, P should be able to recover - but they may have to act quickly, as SC seems to be tanking quickly! Page 8 of 9 (Question 1 continued) . iD: Remedies_Schwartz_Final_20llUL Schwartz Page 9 of 9 ID: Remedies_schwartz_Final_20llUL Schwartz END OF EXAM Page 1 of 0 ...
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