election of remedies

Election of Remedies Doctrine and Claims for Specific Performance and Breach of Contract

Posted by David Adelstein on October 26, 2017
Trial Perspectives / Comments Off on Election of Remedies Doctrine and Claims for Specific Performance and Breach of Contract

In an earlier article, I talked about the election of remedies doctrine. The purpose of this election of remedies doctrine is to preclude the plaintiff from obtaining a windfall by double-recovering its damages under alternative (or mutually exclusive) theories of liability.  If a plaintiff could double recover on mutually exclusive theories of liability based on inconsistent facts, then plaintiffs would recover double than what they are rightfully entitled to.  That isn’t fair!

Before a trial court can apply the election of remedies doctrine, it must determine whether the remedies are factually consistent. A party may not obtain judgment for two remedies that are factually inconsistent.

Remedies are factually consistent when they “logically can coexist on the same facts.”  Remedies are factually inconsistent when one remedy “implies negation of the underlying facts necessary for the other.” 

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When remedies are factually consistent, the “mere election or choice to pursue one of such remedies does not operate as a waiver of the right to pursue the other remedies.”  Where remedies are factually consistent, “only a full satisfaction of the right asserted will estop the plaintiff from pursuing her other consistent remedies.”

The Allegro at Boynton Beach, L.L.C. v. Pearson, 42 Fla. L. Weekly D2277d (Fla. 4th DCA 2017) (internal citations omitted).

In The Allegro at Boynton Beach, the plaintiff had a right of first refusal over real property owned by the property owner. The property owner refused to honor the right of first refusal and entered into a purchase and sale contract to sell the property to another buyer. The plaintiff sued the property owner for breach of contract for monetary damages and for specific performance (to force the property owner to sell the property to it based on its right of first refusal and prevent the sale to the buyer). Both claims were predicated on the same facts.

The plaintiff moved for summary judgment where its motion claimed that upon election of its remedy, it seeks damages or specific performance. The trial court granted the motion finding that the property owners failed to comply with the right of first refusal and the right of first refusal remained in effect.   The property owner, trying to be cunning, decided to cancel its purchase and sale contract with the buyer and enter a new contract with the buyer for a higher purchase price, giving the agreement to the plaintiff to exercise its right of first refusal within 10 days.

The plaintiff quickly moved for a final judgment of specific performance based on its election of remedy. The trial court denied this motion finding that the plaintiff already made an election of remedies to recover monetary damages and that the property owner’s original purchase and sale contract with the buyer was not longer effective due to the property owner cancelling the contract.

The appellate court reversed both of the trial court’s findings.

First, the appellate court held that the plaintiff’s remedies seeking breach of contract and specific performance were factually consistent since they were based on the same underlying factual transaction. In other words, they were not mutually exclusive remedies; rather, they were factually consistent. Only the full satisfaction of the plaintiff’s monetary damages would prevent the plaintiff from pursuing specific performance.

Second, the appellate court quickly rejected the property owner’s cunning effort to cancel the original purchase and sale contract only to enter into a new agreement at a higher price. The appellate court stated when a property owner enters into a purchase contract, “a pre-existing right of refusal is converted into an irrevocable option to purchase.” The Allegro at Boynton Beach, supra (internal quotations and citations omitted). The property owner and buyer could not negate this irrevocable option by simply terminating the purchase and sale contract only to enter a new agreement.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Election of Remedies PRIOR to Final Judgment

Posted by David Adelstein on April 18, 2016
Trial Perspectives / Comments Off on Election of Remedies PRIOR to Final Judgment

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Oftentimes, a plaintiff will plead alternative claims or theories of liability against a defendant(s).   Pleading in the alternative is allowed under Florida Rule of Civil Procedure 1.110(g).   The plaintiff is entitled to elect–between two mutually exclusive (alternative) remedies–the remedy it prefers any time prior to the entry of final judgment. See Liddle v. A.F. Dozer, Inc., 777 So.2d 421 (Fla. 4th DCA 2001); see also  Burr v. Norris, 667 So.2d 424, 426 (Fla. 2d DCA 1996) (“Plaintiffs are also allowed to plead inconsistent or alternative actions and need only elect remedies before final judgment.”) This allows the plaintiff to present alternative and mutually exclusive theories to the jury selecting the remedy it prefers prior to the court entering final judgment based on the jury’s verdict. This is certainly a benefit to a plaintiff that is not punished from presenting such alternative theories–the plaintiff is just precluded from the windfall of a double recovery.

For example, in Liddle, the plaintiff moved to foreclose a construction lien and, alternatively, moved to foreclose an equitable lien based on unjust enrichment. The plaintiff could not recover on both because if it did it would allow the plaintiff to engage in a double recovery. After the close of all of the evidence in the jury trial and prior to closing argument, the defendants wanted the court to order the plaintiff to elect a remedy: either foreclosing the construction lien or the equitable lien. The trial court did not rule and ultimately entered judgment against the defendants on both theories of recovery.   The Fourth District held:

Here, Dozer [plaintiff] sought the same relief under two mutually exclusive remedies. The trial court entered judgment in favor of Dozer on its claim to foreclose its statutory mechanic’s lien and entered judgment in favor of Dozer on its claim for foreclosure on an equitable lien based on unjust enrichment for the same amount. Since Dozer proceeded under mutually exclusive remedies and the final judgment allows for double recovery under both theories, the trial court erred in not requiring an election of remedies prior to entry of the final judgment. Because Dozer is in a “win/win” situation under either theory, we affirm Dozer’s entitlement to recovery but remand for election of a remedy and entry of final judgment solely upon that remedy.

Liddle, 777 So.2d at 422.

In another example, Levitt-ANSCA Towne Park Partnership v. Smith & Co., Inc., 873 So.2d 392 (Fla. 4th DCA 2004), a contractor sued a developer for breach of contract and unjust enrichment for work the contractor performed outside the contract. The jury returned a verdict in favor of the contractor that included damages under both theories. The Fourth District held:

In this case, however, the contractor sought both damages on the contract and an additional sum for work performed outside the contract under the theory of quantum meruit. We hold that because the contract provided the method for obtaining payment for additional work, the contractor could not seek equitable relief for additional work at the same time it sought legal relief in the form of lost profits for the breach. Therefore, on remand the contractor must elect between legal damages on the contract and equitable relief under quantum meruit.

Levitt-ANSCA Towne Partnership, 873 So.2d at 395 (internal citations omitted).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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