Final Exam

1
Final Exam

• Performance Exam
• Likely 2-3 plaintiffs with 2-3 claims each
• One included case will answer/affect analysis
  otherwise law will be what we study post-midterm.
  
• 40 of total grade (45 points on mid-term 30 on
  final)
• 30 points 10 style 20 substance
• Bar If you always do what youve done, youre
  always going to get what youve got.
• 6 point system - small things, big differences.
• Logical ordering
• Use headers!
• Clarity
• Legibility
• Stating elements clearly
• See model answer in packet for example

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Unjust Enrichment

• Continued Even More!

3
CT or EL Requirements

• EL or CT will arise where through ___________ a
  person obtains title to _________ which ________
  belongs to another, and plaintiff ______ an
  adequate remedy at law. (860-61)
• Any includes actual, constructive, or BoF

4
Same Proof - Different Results

• Constructive Trust
• Specific remedy
• Watch for lack of full title by defendant.
• Useful if property has appreciated in value

• Equitable Lien
• Substitutionary remedy
• Useful if property has declined in value

Both are equitable remedies useful and available
only when legal remedies are inadequate -- watch
for insolvent defendants.
5
Tracing, Commingling, BFPV

• Both CT and EL can be asserted against a
  defendant who uses the property to acquire
  something else.
• Defendant takes buys car.
• Limitations Commingling

• Neither CT or EL can be asserted against a party
  who acquires the property as a BFPV.
• Defendant takes car sells it to Buyer for cash
  spends cash.
• No CT or EL on car if Buyer took as BFPV.

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So

• A Plaintiff whose property is taken by a
  defendant
• May want to assert CT or EL over the property
• Legal remedy may be inadequate
• May need to assert CT or EL over property that
  the defendant acquired by exchanging Plaintiffs
  property for something else.
• But may not be able to trace due to commingling.

• A Plaintiff whose property is conveyed by the
  taker to a third party
• May want to assert CT or EL over the property as
  held by the third party
• But may be unable to do to BFPV.

7
Constructive Trusts (843)

• Quasi-trust fiction that defendant holds
  specific property for plaintiffs benefit.
• Not a remedy in tort or contract it is separate
  claim.
• Not an express or implied trust.
• Can be contrary to parties intent.
• Results in title vesting in plaintiff.
• Not available if plaintiff is not entitled to
  title!
• Often a remedy for breach of duty of loyalty by
  employees who divert business to self.

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Application - Cook County (844)

• Facts?
• What property did defendant have that plaintiff
  claimed?
• Was plaintiffs loss gt,lt, or to defendants
  gain?
• Examples of people who have positions of special
  trust or confidence
• Does defendants good faith preclude CT? Must
  defendants be in bad faith?

• Must plaintiff be damaged? Was it here?
• Courts split on whether CT is available when
  legal remedies are adequate. (857 n 1.)
• Our rule it is element.
• Why wasnt it conversion here? (847)
• Are there any limitation on the forms of
  specific property that CT can reach?

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Inadequacy of Legal Remedies

• If plaintiff obtains a judgment for T or K
• Liens of many others have priority over
  plaintiffs judgment.
• If defendant is insolvent
• A CT judgment takes priority over other liens
  because it is an interest in the specific
  property.
• Even when specific property is cash
• So long as Plaintiff traces.
• Except when current holder is BFPV

• A normal judgment against defendant provides
  substitutionary remedy
• Not adequate where specific property increases in
  value.
• E.g., Defendant takes painting worth 10k now
  worth 20k.
• Want specific remedy
• E.g., Defendant takes 10k buys stock now worth
  20k.
• Want specific remedy need to trace.

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What CT Gets

• If elements established then
• If defendant still has the property, court can
  ______________________________
• If defendant has transferred the property to a
  third party, court can __________________ unless
  the recipient is a ________________.
• CT is not a substitutionary remedy
• Cant be used if plaintiffs interest in property
  is not severable.
• Equitable Liens are, however.

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Focus Unjust Enrichment (853)

• Bob and Susie jointly own Blackacre. Susies
  will names her sister, Jill, as sole heir. Bob
  kills Susie convicted. Jill sues for
  constructive trust over property.
• Result?

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CTs Power and Limits

• If plaintiff wants the specific property, CT.
• Brand (859)
• But if property value has gone down, may not want
  CT.
• Note You do not get CT plus a deficiency
• If property has increased in value, plaintiff
  should assert CT.
• may be gt than T

• If current holder is insolvent, plaintiff should
  assert CT
• Unless current holder is BFPV, plaintiff will
  have priority over legal title holder
• Plaintiff will have better lien priority than a
  usual judgment creditor

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EL A Substitutionary Remedy

• Unlike CT, title in property remains with
  defendant
• Plaintiff gets lien on property up to the
  misappropriated amount.
• Must foreclose on it then get .

• Should use instead of CT when property has
  declined in value.
• Why?
• Must use instead of CT if there is no severable
  interest
• Why?

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Equitable Liens (860-61)

• If established, plaintiff gets an EL on that
  property.
• Distinct from CT since _____ to the property does
  not ____ with plaintiff.
• Instead, remedy is an ______ in property which
  must be ______ to recover.

15
Middlebrooks (GA) (861)

• Facts?
• What specific property did defendant take?
• What form is it in now?
• Is it worth more or less?
• What did D.Ct do?
• Why did Ga SCt reverse?

• Why is remedy at law inadequate here?
• If plaintiff proves her allegations and obtains
  an EL, what will she get?

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Examples

• Fiduciary embezzles and buys car.
• CT
• Available?
• Why not use it?
• EL
• Available?
• Why use it?
• What about deficiency amount?

• C fraudulently induces B to build addition to Cs
  house by promising B to make a K with him in
  another matter. B spends 5k house value goes
  up only 2k.
• CT
• Why not available?
• EL
• Available?
• Why use it?
• What about deficiency amount.

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Tools in Your Remedies Box

• Suppose Supply Company still had machine in
  Alaska
• Substitutionary
• Conversion
• Assumpsit
• Our rule on resale.

• EL If Supply Company was insolvent and Miner
  became a normal judgment creditor, could be
  pennies on the dollar. So, EL
• CT If the Miner wanted machine back.

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So

• D embezzles Ps money to buy Land.
• If D has money to satisfy judgment, maybe just
  tort.

• If Land has appreciated in value, CT.
• If Land worth less than money taken, EL.
• If D lacks full title, CT may be unavailable.

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Extensions and Limitations

• Tracing Extension and Limitation
• BFPV Limitation
• Change of Position Limitation
• Volunteers Limitation

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(A) Tracing (869)

• If defendant exchanged converted property for
  something that defendant now has, plaintiff may
  be able to trace converted property to its
  substituted form.
• E.g., defendant takes Pauls money, buys boat.
• Plaintiff may be able to get CT or EL in boat, if
  he can trace his money to the boat.
• If defendant exchanged plaintiffs property for
  something else, and plaintiff wants its property
  (because unique or defendant has no ) plaintiff
  may be able to assert CT or EL against the third
  party.
• E.g., defendant takes Pauls 10k buy boat
  sells boat to third party for 2k which Paul
  blows on beer.
• Plaintiff may be able to get CT or EL in boat, if
  he can trace his money to the boat, unless third
  party is BFPV.

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Tracing Fact Patterns

• No commingling If defendant takes X and
  exchanges it directly for Y, tracing is easy for
  plaintiff.
• Commingling Where defendant commingles funds
  with money which is rightfully his or which
  belongs to third parties, plaintiff must trace
  his funds to get CT or EL in the funds or their
  proceeds
• (a) No withdrawals EL in funds to extent of
  plaintiffs interest.
• No CT over an entire fund if plaintiff has only
  partial interest.
• (b) Withdrawals four fact patterns
• (1) Fund balance stays above what defendant took
  from plaintiff or
• (2) Fund balance falls below what defendant took
  from plaintiff.
• (a) Defendant replenishes it
• (b) Defendant doesnt replenish it.

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Lowest Intermediate Balance Rule

• If commingled fund goes below amount taken from
  plaintiff, but then goes back up because
  defendant makes a deposit of his own money
• Majority rule

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4 Rules to Ring Them All, and in the Darkness
Bind Them

• FIFO
• Jessels Bag
• Oatways Way
• Restatement

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Restatement (873)

• Where a person wrongfully mingles money of
  another with money of his own and subsequently
  makes withdrawals from the mingled fund, the
  other is entitled to an equitable lien upon the
  part which remains and the part which is
  withdrawn or their product, except as stated in
  Subsection (3)
• If the wrongdoer knew that he was acting
  wrongfully, the other is entitled as his option
  to a proportionate share both of the part which
  remains and of the part which is withdrawn or of
  their product, except as stated in Subsection (3)
• Where the wrongdoer has effectively separated the
  money of the other from his own money, the other
  is entitled to, and only to, his own money or its
  product.

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Problem 874

• Balance Event
• 2k D has 2k
• 7k D steals deps 5k.
• 5k D w/draws 2k to buy stock
• Stock now worth 4k
• 2k D w/draws 3k living expenses

• Result under majority LIBR?
• FIFO
• Jessels Bag
• Oatways Way
• Restatement

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Another Problem

• Result under majority LIBR?
• FIFO
• Jessels Bag
• Oatways Way
• Restatement

• Balance Event
• 100 D steals 100 deposits
• 200 D adds 100 honest money to account.
• 50 D w/draws 150
• 70 Bank adds 20 interest

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(B) BFPV

• EL or CT loses to legal title held by a BFPV.
• Legal title trumps equitable title
• Both parties are innocent, but the BFPV paid
  money
• To be a BFPV the person must (1) give _______ for
  the property and (2) lack ______________ of the
  equitable interest.
• (1)
• Forgetabout notes 3 4 on 885.
• What if the third party gives a pittance for
  something valuable?
• (2)
• Actual objective or subjective?
• Constructive Imputing knowledge of agents. See
  City of Hastings

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BFPV City of Hastings (881)

• Facts?
• Who was Stromers client(s)?
• What was claim against Spady?
• What is constructive fraud?
• Did City have an equitable or legal interest in
  property, as against third parties, before Spady
  bought it?
• What remedy did City pursue?
• Is this a tracing case?

• Because third party purchased it, what must City
  show?
• What form can knowledge of the equitable
  interest take?
• Whose knowledge counts?
• Why is it enough to show Stromer ,but not
  defendant, knew of Citys interest?

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(C) Change o Position

• The right to restitution from a party may
  terminate or diminish if after receipt of the
  benefit circumstances so change that its
  inequitable to require full restitution.
• Not defense if party who has benefit got it
  through tort
• If you steal money and then experience changed
  circumstances, too bad for you.
• Irrelevant if change occurred after recipient
  knew facts obliging it to make restitution.
  Western Casualty (893).

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Alexander Hamilton (890)

• Facts?
• What did D.Ct. order?
• What did the insurer want?
• When a judgment is vacated, the general rule is
  that a party who paid the judgment is entitled to
  _______.

• Exception
• The right of a person to restitution is ______ or
  ______ if after _________ circumstances have
  _______ that it would be ______ to require it.
• Spending the money on living expenses or gifts
  is not a changed circumstance unless made
  __________ and the amount of payment was of such
  a size in light of ____________ that it would be
  ________ to require restitution.
• Result here? Why?

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(D) Volunteers

• I cant voluntarily do something for you and then
  sue you for not paying me for having done it.
• Curb painter gives no choice to homeowner.

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Example Jako (900)

• Facts?
• Note
• No express K
• No implied in fact K
• Quasi-K

• Does he lose because he had no reasonable
  expectation of payment, or because he clearly
  initially had no intent to charge?
• More accurate unjust enrichment less likely if
  there was no initial intent not to charge. Cf.
  899

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Gifts v. Mistakenly Conferred Benefits

• Gifts No restitution.

• Mistakenly conferred benefits
• If to defendant, always restitution unless change
  in circumstances.
• If mistakenly to defendants creditor to
  discharge a debt
• Why is restitution not always ordered?
• Examples Blue Cross

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Incidental Benefits

• No restitution for incidental benefits conferred
  on another.
• If A builds a fence that adds value to neighbors
  land, neighbors are not unjustly enriched.
• It can be fine line between incidental benefits
  (no restitution) and acceptance of a benefit
  where no gift was intended (restitution)

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Incidental Benefit? Finley (902)

• Facts?
• Whats general rule when services are voluntarily
  rendered without intent to be a gift, and benefit
  could be refused but is accepted?

• Result?