Restitution

Contracts – Prof. Merges

Jan. 31, 2011

Restitution

Cotnam v. Wisdom

• Procedural history?

Cotnam v. Wisdom

• Procedural history?

• Plaintiff wins below (jury trial)

• Judgment below reversed and remanded

Cotnam v. Wisdom

• What is an “intestate”?

Cotnam v. Wisdom

• What is the holding in this case?

Cotnam v. Wisdom

• What is the holding in this case?

• Plaintiff/Doctor is owed reasonable compensation for services rendered; remanded for retrial on issue of proper amount of damages

• Why no contract?

Jury instruction # 2

• What was it?

Jury instruction # 2

• What was it?

• “Character and importance of operation and decedent’s ability to pay are elements to be considered in determining what is a reasonable charge . . .”

Jury instruction # 2

• What was wrong with it?

Sceva v. True - guidance

• What categories of contracts are discussed in the Sceva case?

Sceva v. True - guidance

• What categories of contracts are discussed in the Sceva case?

“necessaries furnished to [a legally incompetent person] may be liable in assumpsit . . .”

P. 107

Varieties of K’s

• Explicit oral or written K

• “Implied in fact” K

Varieties of K’s

• Explicit oral or written K

• “Implied in fact” K

• “Quasi-contract” or Implied in Law Contract

Implied in law Ks

• Why a “legal fiction”?

Jury instruction # 2

• What was wrong with it?

• Bottom 108: relevant only if there is a contract . . .

What is the proper measure of recovery?

• A “reasonable compensation for the services rendered . . .”

Why the emphasis on Dr/patient cases?

• What is unique?

• Professionals expect compensation

• Compare Mills v. Wyman

Restitution

Rest. 1st of Restitution § 112 comment a – the case of the hopeful home improver

Restatement 3d Restitution – Tentative Draft 2010

§1 (3) There is no liability in restitution for an unrequested benefit voluntarily conferred, unless the circumstances of the transaction justify the claimant's intervention in the absence of contract.

Indiana Lumbermens Mut. Ins. Co. v. Reinsurance Results, Inc., 513 F.3d 652 (7th Cir. 2008) (Posner, J.)

If while you are sitting on your porch sipping Margaritas a trio of itinerant musicians serenades you with mandolin, lute, and hautboy, you have no obligation, in the absence of a contract, to pay them for their performance no matter how much you enjoyed it . . . .

Contract is incomparably superior to restitution as a means of regulating most voluntary transfers because it eliminates, or minimizes, the fundamental difficulty of valuation…. The consequence for the law of restitution is that restitution is not normally available to the claimant who should have made a contract with the recipient but failed to do so.

-- Rest. Restitution, TD, § 1, comment f

§ 371. Measure Of Restitution Interest

• If a sum of money is awarded to protect a party's restitution interest, it may as justice requires be measured by either

• (a) the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant's position, or

• (b) the extent to which the other party's property has been increased in value or his other interests advanced.

Restatement (Third) of Restitution And Unjust Enrichment (Tentative

Draft)2005

§ 1. Restitution And Unjust Enrichment

A person who is unjustly enriched at the expense of another is liable in restitution to the other.

§ 1 Illustration 4. Acting in an emergency and with no opportunity to contract, A provides medical services to B. A does not intend to act gratuitously and plans to seek compensation later. The circumstances of the transaction make it one in which the law permits A to assert that he did not intend to make B a gift of services.

R3d Restit. TD § 20. Protection Of Another's Life Or Health

A person who performs, supplies, or obtains professional services reasonably necessary for the protection of another's life or health has a claim in restitution against the other if the circumstances justify the claimant's decision to intervene without a prior agreement for payment or reimbursement. Restitution under this Section is measured by a reasonable charge for the services provided.

Schott v. Westinghouse

Collana v. Oak Park Homes

What was the K in Collano?

What was the K in Collano?

• Between Callano and Bruce Pendergast

How did Oak Park Homes enter the scene?

How did Oak Park Homes enter the scene?

• Why no contract action between Callano and Oak Park Homes?

Callanos Bruce Pender-gast

$$

Promise to install shrubs

Why not sue Pendergast/Grantges?

Callanos Bruce Pender-gast

$$

Promise to install shrubs

Callanos

Oakwood Park Homes

Callanos

Oakwood Park Homes

“Privity of Contract”

Callanos

Oakwood Park Homes

No “Privity of Contract”

Callano on “quasi-contracts”

• Clothed with the semblance of contract for the purpose of the remedy

• “The duty defines the contract”

Compare Paschall’s, note 2, 112

Compare Paschall’s, note 2, 110

• “Exhaustion of remedies” against contracting party -- ?

•

Mechanics’ liens - 113

Pyeatte v. Pyeatte

• History

• Facts

Why a restitution claim?

• Contract “indefiniteness”

• Still relevant?

What can be claimed?

• Compare Wisner

What can be claimed?

• Amount of claim in Pyeatte?

• Time limits on claim?

Cal Fam Code § 2641 (10 years or more, no separate recovery)

Dementas v. Tallas

• Good case to suggest need for reform?

• Is the result unfair?

Wendy Gordon, On Owning Information: Intellectual Property and the Restitutionary

Impulse, 78 Virginia Law Review 149-281 (1992)