Also known as: disgorge ill-gotten gains · disgorgement of ill-gotten gains · disgorgement · restitution
Written by attorneys · grounded in primary & secondary sources — see below
A restitutionary remedy requiring a wrongdoer to surrender profits obtained through misconduct. Recovery is measured by the defendant's gain rather than the plaintiff's loss and is available when the two amounts differ.
Denise Donovan converts Darius Dixon's iPod and resells it at a markup. Darius sues for the value of the device at the time of conversion. Because the resale price exceeds that value, the court orders Denise to pay the higher amount received from the sale.
Diane Dawson and Dorothy Daniels contract for the sale of a parcel both believe contains timber. After closing they discover the timber was already removed. The court permits reformation and requires Dorothy to return the portion of the purchase price attributable to the missing timber.
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Darius Dixon grants an easement to Devon Drake for equipment staging. Devon stores hazardous waste on the parcel for months. The court orders Devon to remove the waste and to pay the value of any benefit obtained from the unauthorized use.
Darrell Duncan promises to exercise a future power of appointment in favor of Davenport Pharmaceuticals in exchange for a cash payment. The contract is unenforceable. The court orders Davenport to return the payment it received.
A client learns that his lawyer misappropriated funds and asks the lawyer not to report it. The lawyer nevertheless reports the misconduct to disciplinary authorities. The client cannot prevent the report even though he received private restitution.
Dominion Capital partially performs services for Duarte Shipping before the contract is avoided. The court awards Dominion the reasonable value of the services to Duarte or the increase in Duarte's property value, whichever justice requires.
Disgorgement measures recovery by the defendant's gain from the wrong, while compensatory damages measure recovery by the plaintiff's loss. When the defendant's profit exceeds the plaintiff's harm, disgorgement allows the plaintiff to recover the larger amount.
Supporting sources
Restitution by disgorgement is available when a wrongdoer has obtained a measurable benefit through misconduct and the plaintiff seeks to strip that benefit rather than merely compensate for loss. Courts may award it when the defendant's gain furnishes evidence of value received.
Supporting sources
No. A client's desire to keep misconduct quiet and the existence of a private restitution agreement do not override a lawyer's duty to report serious misconduct such as misappropriation of client funds.
…urged that if the repair orders were indeed admissible, then Gore would have a "full right" to suggest a multiplier-based disgorgement. Tr. 932. In brief, Gore's case is idiosyncratic. The jury's improper multiplication, tardily featured by petitioner, is unlikely to recur in Alabama and does not call for error correction…