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Attack Outline Remedies - UVA Law Prof. Laycock, Fall 2016
Damages Rightful Position
? Rightful Position: P is entitled to recovery that puts him in the position he occupied before the injury. o Specificity (Hatahley; see also uncertainty Bigelow, Glendale Federal) o Lesser of Two Rule: P gets lesser of market value or replacement cost. See In re September 11th Litigation.
? Exception: For special purpose property, replacement cost even if greater. (Trinity Church real property & King Fisher Marine chattels; rule in In re September 11th Litigation) o See also environmental cases for varying views on the rightful position
? Expectancy vs. Reliance: o Contracts: Expectancy is default rightful position in contract (see UCC section).
? See UCC buyer and seller defaults o Torts: No expectancy in tort (Smith) EXCEPT in fraud cases (in most states). Compensatory Damages
? Types o Direct Damages o Consequentials
? Must be a normal and proximate result of the breach (Buck)
? Not available if they resulted from a failure to pay money (Meinrath)
? Framing: benefit of the bargain can make consequentials actually direct damages (Texaco) o Direct vs. Consequential:
? Direct (general) Damages: Initial impact of wrong; value of what was taken/destroyed/damages/failed to deliver, etc.
? Consequential (special) Damages: Everything that happens as a foreseeable and inevitable result of the initial impact. difference is based on the foreseeability/inevitability
? Issues o Avoidable Consequences (Mitigation): P is only entitled to damages that he could not reasonably avoid (mitigate). (S.J. Groves for contract; Hataley for tort) o Limits on Damages Contract Only
? Liquidated Damages Clause: Fixes fair compensation for breach to avoid unnecessary litigation. (UCC 2-718(b))
? May be the exclusive remedy, even if it undercompensates. (Northern Illinois Gas).
? May not be a penalty. TEST: Reasonable and proportional to actual loss AND damages at time of K difficult to measure. (In Re TWA)
? Limitation of Remedy Clause: Permissible unless it fails essential purpose (UCC 2719). (see failed repair/replace clause but OK consequential damages clause limitation in Kearney ) o Collateral Source
? Offsetting Benefits and Collateral Sources: Reduction in damages other than lawsuit against D: insurance, workers' comp, new job, charity payout, SS, disability, etc.
Modern Rule (Tort Reform): Many states now subtract all collateral source recovery (except from charity and family, NY also life insurance) from the damages award. Bars double recovery.
? Oden: must itemize by type with offsetting/reducing
? Subrogation: collateral source who paid P (e.g., insurance company) can recover from P if P collects for what collateral source paid for (must be specifically identified in damages award - Oden), or from D if P did not collect for what collateral source paid for. (pro rata-Ahlborn vs. in full-McCutchen) o Scope of Liability
? Economic Harm Rule: No liability in negligence (non-intentional) torts for purely economic harm that occurs without physical impact to yourself or your property. But see dignitary/emotional harms. o See Pruitt for relaxing the EHR in part for killed fish; See also In re Oil Spill
? Proximate Cause: See Hatahley.
? Economic Loss Rule: No recovery in tort for losses resulting from breach of K. (see Seely)
? Consequentials: Only awarded with notice (foreseeability). (Swiss Bank)
? Policy Limits: cannot recover for harms that are outside what the rule was intended to protect, even if violation of the rule caused the harm (see blowing antitrust Brunswick and firing union illegals Hoffman) o Measurement:
? Jury may make reasonable inferences to estimate damages (Cf. Bigelow and Glendale Federal)
? Grossly Excessive: Standard of review for jury awards on appeal. (Levka)
? Business damages proven by comparison to similar businesses, or before/after wrong o Personal Injury/Wrongful Death
? See list of Concrete and Abstract (Pain/Suffering) Harms and where they are recoverable
? Pain and Suffering: Per diem for living persons; see methods of proof
? Wrongful Death: see valuation of human life; adults vs. children; decedent's pain &
suffering o Dignitary: Compensate by P's reaction, not by market. (Levka) o Constitutional Harm: no damages for violation of constitution itself (Carey), except voting rights o Tort Reform: usually affects remedy not right. Damage caps are constitutional (Arbino); fees and collateral source rules have changed incentives/recovery in different arenas Punitive Damages
? Standard for Punitive Damages: see p. 227 n. 4 o Mens Rea: Many require recklessness
? Some require intent, some require knowledge or recklessness, and some simply imply things like knowledge
? Some require actual malice (or implied malice) o Other factors: Degree of negligence, size of damage, obviousness of risk, bad-faith motive, whether harm was physical as well as financial, violence of harm, vulnerability of victim, damages that could have been caused (but weren't).
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