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Remedial Defenses

Remedial Defenses. When law and equity courts were separate, certain defenses arose in equity courts.

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Remedial Defenses

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  1. Remedial Defenses • When law and equity courts were separate, certain defenses arose in equity courts. • Originally they applied to equity cases – i.e., cases where P sought equitable remedies (e.g., injunctions, constructive trusts, accounting for profits, rescission) or where the substantive cause of action was equitable (e.g., breach of fiduciary duty) • After merger of law/equity, some of these defenses are available in actions at law (e.g., where P sues for breach of K or tort) • But this is not always true • We will look at four primary defenses • Laches • Unclean hands • Equitable estoppel • Waiver

  2. Laches Maxim:Equity aids the vigilant; not those who sleep on their rights. Plaintiff’s request for equitable relief is barred if: 1) P’s failure to assert a right 2) taken together with the passage of time or P’s delay 3) substantially prejudices D Purposes of Laches Defense: 1) Prevention of stale claims & resulting prejudice 2) Denial of relief to “undeserving P”

  3. Laches vs. Statute of Limitations • Statutes of Limitations • Applies to claims as defined by applicable statute of limitations (both legal and equitable claims) • Involves fixed time period • No sense of “morality” involved re whether claim barred • No claim barred as long as within time period • Laches • Available only when equitable relief requested • No fixed time period – case by case determination as to whether claims barred • Available only for “deserving plaintiffs” • Equitable claim can be within the statute of limitations but still barred by laches

  4. Laches, continued • Meaning of “Passage of Time/Delay” • Passage of time/delay alone is not enough to support defense: • It must be unreasonable in the sense that P knew of rights (actually or constructively) and has no excuse for failing to assert those rights. • Compare the following situations where D builds a house over P’s lot line. • P knows D is building close to lot line but waits to protest until is sure that D has actually built over the line. • P was out of the country and did not know was building at all; P protested Immediately upon returning to the country • P knew D was building over the lot line but said nothing until after D finished building the house

  5. Laches, continued • Meaning of “Prejudice to D” • D must have been injured by P’s failure to assert right. Prejudice usually takes one of two forms: • Injury to D’s ability to defend the lawsuit Examples: loss of records, destroyed evidence, unavailable witnesses, etc. • Economic Injury to D Example: expenses incurred in anticipation of status quo continuing Previous slide: D’s belief that she will be allowed to continue building house as she (D) is currently building it in example 3

  6. Unclean Hands Maxim: She who comes into a court of equity must come with clean hands. • Plaintiff’s claim for equitable (& possibly legal) relief is barred by: • Plaintiff’s misconduct related to the reason P is before the court • Purpose of Unclean Hands Defense: • To protect the integrity of the court system from a P whose actions defeat the purpose of “equitable” relief

  7. Unclean Hands, continued • Nature of activity barring P’s claim • P’s activities need not be illegal or tortious. They simply must be “wrongful” in a moral sense. • Connection Between P’s Conduct & the Lawsuit • To bar P’s claim, P’s conduct must be “related” in a substantial & significant way to the claim he now asserts. How “related” must the conduct be? “The alleged misconduct by Plaintiff must be directly related to the merits of the controversy between the parties.”

  8. Unclean Hands, continued Which of the following is “Directly Related Conduct”? • P brings a lawsuit seeking an order barring D from operating an illegal day care center at the same time P herself operates an illegal day care center. • P brings a lawsuit seeking an order barring D from operating an illegal day care center. During the litigation, D truthfully asserts that P has failed to declare all of her income to the IRS. • P “loans” money to her cousin, D, so that P can hide it from the IRS. When D refuses to reconvey the money to P as they previously agreed, P brings a suit to have a constructive trust imposed on the money in D’s hands that is rightfully hers.

  9. Equitable Estoppel • P’s claim for equitable & legalrelief is barred if: • P engages in misleading words, conduct (or silence when there is • duty to speak) • P knows or reasonably could have foreseen that D would • act on such words/conduct • D justifiably relies on P’s words/conduct • D is prejudiced by such reliance Essence of Estoppel: D’s detrimental reliance on P’s misleading conduct Ex: P stands by silently as D builds an addition partly on P’s land. P, who knew where the lot line was the whole time then says “you are over the lot line” and files a lawsuit. P is estopped from bringing this lawsuit.

  10. Waiver • P’s claim for equitable & legal relief is barred if: • P intentionally relinquishes a known right, or • P intentionally engages in conduct inconsistent with that right Compare estoppel: No detrimental reliance of D required • In previous slide, even without D’s detrimental reliance, P has likely waived right to assert claim against D. • P’s action standing by and watching D without saying anything is intentional conduct (1) inconsistent with assertion of P’s right or (2) possibly intentional relinquishment of P’s right • Waiver is most helpful where it might be hard to prove D’s detrimental reliance on P’s action or in situations where D didn’t rely but P still acted inconsistently with assertion of P’s right

  11. Exam & office hours • Final – Tuesday, Dec. 4, 1:30 pm • Office Hours • 9-noon & 1-5pm on Monday Dec. 3 & any other time can catch me today and Friday. • Priority given to people actually in my office but I will return emails and phone calls that are received DURING those hours (even if I wait to return them until after that time). • I make no promises about emails received in the evening of Dec. 3 but I will try to respond. Phone calls are unlikely to be returned after 5 pm on Dec. 3. I may be in my office on the morning of Tuesday, Dec. 4 if you have questions. But I won’t return phone calls or emails at that point. • I am happy to discuss old exams with you but only if you make a good faith effort to answer the questions and figure things first. I’ll know if you haven’t. I promise, it’s the best way to learn.

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