Declaratory Judgments

1. Declaratory Judgments • A method by which a person fearing injury from another can clarify and conclusively determine rights prior to actual injury occurring. • Ripeness is still a threshold requirement – i.e., the requirement that valuable legal rights be threatened with imminent invasion by D in declaratory judgment action

2. Declaratory Judgments and Procedural Fencing • A, who is a mechanic, fixes B’s car. The repairs on the car subsequently fail. B has a massive car wreck and is injured. A seeks a declaratory judgment stating that she was not negligent in performing the repairs. • Should the court grant the declaratory judgment? • Students sue state university in federal court seeking a declaratory judgment that the university’s out-of-state tuition charges for the first two years they were students violated federal law. • Should the court grant the declaratory judgment? • What if the plaintiffs were prospective students who seek a declaration that the university’s out-of-state tuition charges violate federal law?

3. Differences between preventive injunctions & declaratory judgments:

4. Restitution • Basic Premise: • In cases where D has been unjustly enriched at P’s expense, D must return the amount of his/her unjust enrichment • Restitution Is a Hybrid: • It is one of 3 forms of substantive liability • It is also a possible remedy when the source of liability is contract, tort or statute

5. Blue Cross v. Sauer – substantive restitution • Why are the Sauer’s liable for the return of the mistaken payments from Blue Cross? • Did they do anything wrong? How easy would it be to prove? • Assume they had been on an extended vacation & payments were directly deposited – would the court have required them to return the payments? • So what is (would be) the easiest source of their liability forcing them to return the payments from Blue Cross in either situation?

6. Restitutionary remedial devices • Why was Sauer so concerned w/ the manner in which restitution occurred? Restitution encompasses many different devices, which effect return in different ways – some examples: • Constructive Trust – P can trace into specific, identifiable property in D’s hands and keep it even if it has increased in value (as long as traceable to wrongfully taken property from P) • Quasi-Contract(aka “Money Had & Received” in Sauer) – results in simple money judgment for value of unjust enrichment to D • For wrongdoers who have received mistaken payments of money, P’s must rely on restitution as substantive cause of action & remedy: • P’s limited to restitutionary devices giving them a simple money judgment

7. Somerville v. Jacob – restitution and innocent improvers • Could the Somervilles get restitution if they deliberately improved the Jacob’s land because the Somervilles thought the land really needed it and it would improve the Jacob’s property values? • What remedy if the Somerville’s negligently built a building over the shared property line onto the Jacob’s land? • What are the options when the Somervillesinnocently improve the Jacob’s land thinking it is their land and mistake is discovered after improvement is finished? • Somervilles get nothing because they should have known of problem • Jacobs should pay Somervilles for the value of improvements • Jacobs should convey land to Somervilles in exchange for value of unimproved land • What does the majority say? Why does the dissent balk?

8. Restitution & Mistake • A truly innocent mistake by P/improver/payor is most likely to result in restitution. • As P’s culpability increases, courts are less likely to grant restitution • Also with a truly innocent victim (D/improvee/payee), courts may “balance the hardships” and refuse to grant restitution if returning the benefit will be hard on D • (But see Somerville) • Bottom line – whether restitution is granted depends on culpability of both parties and hardship on D. (See Restatement 3rd) • General measure of U.E. in mistake cases = value of improvement/payments to D

9. Grounds for restitution with innocent(ish) wrongdoers • Mistake – see previous slide • Emergency – one who reasonably provides essential goods/services during emergencies is excused from getting promise to pay beforehand • Measurement of U.E. for lives saved – FMV of treatment (NOT value of life saved) • Measurement of U.E. for property saved – lesser of value of services or property damage avoided • Performance of Duties to 3rd Parties – e.g., paying brother’s bills • Measurement of U.E. – reasonable value of services/bills paid for • Joint Ownership of Property – payment ofnecessaryexpenses • Measurement of U.E. – reasonable value of other’s proportionate expenses • Quantum Meruit or Unenforceable Contracts (more at pp. 638-43) • Four Different Measures - Cost to Plaintiff, Market Value, Agreed Price, or Value in advancing D’s purposes

10. State v. ANW Seed • State obtained default judgment against ANW seed for violations of Consumer Protection Act. • ANW Seed appeals a default judgment against it. • While that appeal is pending, State obtains a writ of execution on the judgment. Sheriff seizes property per the writ. Property sold at execution sale for $16,588.50. • ANW Seed moves for restitution after appellate court vacates the default judgment. • What could ANW Seed have done to avoid losing the property in the first place? • What is the appropriate measure of restitution now that ANW Seed is entitled to return of its property or the property’s “value”?

11. Measuring the unjust benefit to be returned – innocent wrongdoers • Problem in ANW Seed re “value” of sold property • State received $16,588.50 for property at execution sale • BUT ANW Seed lost property worth $57,631.50 (FMV) • To which amount is P entitled in restitution? • When D is innocent, courts generally say P is entitled to restitution only of the amount D was unjustly enriched – here that is “$16,588.50 (auction value of sold property) • This is true even if P lost far more than D actually gained • Theme throughout restitution with innocent wrongdoers: • When given a choice of measurement of unjust enrichment, courts will usually choose the lower amount (which it believes represents unjust enrichment to innocent D)