Opinion ID: 932032
Heading Depth: 2
Heading Rank: 2

Heading: Nature of the Remedy

Text: As explained supra, the nature of the remedy sought is the more important of the two inquiries in determining whether a right to a jury trial exists under the Seventh Amendment. Taylor, 403 F.3d at 968; see also Geneva, 2003 WL 1345136, at  ([I]t is the second prong—the type of remedy sought—that is most important in determining whether a right to jury trial should obtain.). A claim for money damages . . . constitutes legal relief, for such relief was the traditional form of relief offered in the courts of law. Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 570, 110 S. Ct. 1339, 1347, 108 L. Ed. 2d 519 (1990) (quoting Curtis [v. Loether], 415 U.S. [189,] 196, 94 S. Ct. [1005,] 1009 [(1974)]). But this is not always true. Id. Restitution damages, for example, and money shall be entitled to record unless the authority of such agent be also recorded. -9- awarded incidental to the grant of equitable relief are not legal in nature. Id. at 570, 110 S. Ct. at 1347–48. Furthermore, money damages may constitute equitable relief where the court is not awarding damages to which the plaintiff is legally entitled but is exercising the chancellor's discretion to prevent unjust enrichment. SEC v. Commonwealth Chem. Sec., Inc., 574 F.2d 90, 95 (2d Cir. 1978) (Friendly, J.) (disgorgement of profits is equitable). Merex, 29 F.3d at 825. Additionally, money damages . . . to be awarded for [a plaintiff's] reliance . . . are equitable in nature. Geneva, 2003 WL 1345136, at . By contrast, [b]ecause expectation damages for breach of contract are traditionally legal in nature, the pull of law with its attendant right to a jury trial is distinctly felt. Merex, 29 F.3d at 825 (citing Atlas Roofing Co. v. Occupational Safety & Health Review Comm'n, 430 U.S. 442, 459 (1977) ([S]uits for damages for breach of contract, for example, were suits at common law . . . .); Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477 (1962) (As an action on a debt allegedly due under a contract, it would be difficult to conceive of an action of a more traditionally legal character.)). Here, InCompass is seeking money damages. But it has been, at best, imprecise on the measure of those damages. In its complaint, InCompass alleged that it had suffered and continue[d] to suffer severe damages well in excess of $75,000. In its prayer for relief, it asked the court to award it, among other things, such other and further relief as the court may deem just and equitable. Thus, the complaint does not specify a measure of damages. But, as the district court recognized, InCompass's interrogatory answers state that its damages claims are based on, inter alia, the difference between the contemplated monthly rent and [InCompass's] mortgage, taxes and utility payment, as well as any decline in the market value of the building at issue. InCompass IT, Inc., 2012 WL 512401, at . These damages appear to be reliance damages, which reimburse losses arising from a party's change in its position -10- in reliance on a contract. Logan v. Norwest Bank Minn., N.A., 603 N.W.2d 659, 663 (Minn. Ct. App. 1999). In determining reliance damages, a court attempts to place the non-breaching party in the position it would be in had the contract not been made. Id. Reliance damages are equitable in nature. Geneva, 2003 WL 1345136, at . By contrast, InCompass's expert report shows that [InCompass] apparently seek[s] some element of expectation damages. InCompass IT, Inc., 2012 WL 512401, at . That is, InCompass claims to seek the amount of rental income it would have received from XO had XO actually made an enforceable promise to lease the building at issue. Like the district court, we need not definitively determine the type of damages that [might have been] available to [InCompass] at trial. Id. at . Because the subject contract clearly comes within the statute of frauds, InCompass seeks to avoid its operation through the equitable application of promissory estoppel. InCompass falls back upon the doctrine of promissory estoppel because the Statute of Frauds renders the [purported] oral . . . agreement unenforceable. Merex, 29 F.3d at 825. InCompass is asking the court to apply promissory estoppel as a legal remedy to form a contract and establish its damage, while at the same time asserting that the promissory-estoppel doctrine applies equitably to remove the same contract from the operation of the statute of frauds. We decline to do so. Relief in cases within [the Statute of Frauds], therefore, as in all others of this nature, is not predicated upon enforcing the contract in the teeth of the statute, but preventing its use to defeat this ulterior equity. . . . This use of one of equity's favorite weapons, estoppel, to prevent this particular injustice is well established. [Fred F.] Lawrence, [Equity Jurisprudence] § 786, at 876 [(1929)]. In short, [InCompass's] reach exceeds its grasp by invoking an equitable theory (estoppel) to give it the legal relief (expectation damages) that is denied to it by the Statute of Frauds. This it may not do. -11- To invoke the power that equity possesses to trump the Statute of Frauds, [InCompass] must demonstrate unconscionable injury, i.e., injury beyond that which flows naturally (expectation damages) from the non-performance of the unenforceable agreement. See Philo Smith [& Co., v. USLIFE Corp.], 554 F.2d [34,] 36 [(2d Cir. 1977) (per curiam)]. If successful, [InCompass] is not entitled, as of right, to expectation damages; the court retains the discretion to award relief to avoid injustice, and can mold that relief as justice requires. Restatement (Second) of Contracts § 139; see, e.g., Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 73 (2d Cir. 1989) . . . . Id. at 825–26 (emphasis added) (first and second alterations in original). In light of InCompass's inconsistency as to the precise measure of damages that it seeks, and in light of the undeniably equitable nature of the promissory estoppel claim as a whole, . . . . we hold that [InCompass's] claim is properly regarded as equitable rather than legal and, consequently, that [InCompass] was not entitled to a jury trial on its claim for promissory estoppel. See id. at 826; see also Geneva, 2003 WL 1345136, at  (Given the 'protean' nature of promissory estoppel (and the confusing variances in potential claims that may be considered 'promissory estoppel') and the equitable remedy sought here in the form of reliance damages, the cause of action is more equitable than legal and a right to jury trial does not attach.).