1984

February 1984

1. Contracts

On January 15, 1983, Jones agreed with Motors in a writing signed by both to supply Motors with 10,000 pounds of specifically described bolts each month, for a period of ten months, beginning March 1, 1983. The stated price was $.85 per pound. On February 1, 1983, Jones, in good faith notified Motors that he could not afford to sell the bolts at the agreed price. He said he would charge $.90 per pound. Motors orally agreed to the increase in price to begin with the first installment.

In a written confirmation, signed only by Jones and delivered to Motors, Jones' secretary mistakenly typed the new price as "$.91 per pound" rather than "$.90 per pound." Motors received the confirmation but did not read it and did not reply to it.

Prior to March 1, 1983, Jones notified Motors that he would deliver no bolts because he had just contracted to sell his entire output to Ted at $1.10 per pound. Despite diligent efforts, Motors was unable to buy bolts from a new supplier until May 1. The price charged by the new supplier was $1.00 per pound Because of the 60 day delay in obtaining a new source of supply, Motors was delayed in delivering motors to Electric, a company with which Motors had a contract that contained a valid liquidated damages clause providing for damages of $10,000 a day for delay in delivery of motors.

Although Jones knew that Motors sold motors, he did not know specifically nor did he have reason to know, that Motors had a contract with Electric or that that contract contained a liquidated damages clause.

In a suit by Motors against Jones commenced on October 1, 1983, Motors prays for the following damages.

Count 1: $15,000, being the difference between the price paid by Motors ($1.00) and the original contract price ($.85) for 100,000 pounds;

Count 2: $600,000, being the amount Motors had to pay Electric in liquidated damages;

Count 3: $1,000,000 as punitive damages, alleging that Jones' breach was malicious.

In his answer to the complaint, Jones denies liability for damages, and contends that if he should be found liable under count 1, his liability would be limited to $9,000, being the difference between the price' paid by Motors ($1.00) and the modified price in the written confirmation ($.91).

What result on each count and what amount of damages, if any, should be awarded? Discuss.

2. Civil Procedure QUESTION 2

Paul, a citizen of State X, filed an action against Daw in a State X state court. Paul alleged that he had suffered $700 in property damage when his car was struck by Daw's car. aw was served at his home in State A and moved to quash service of process on the ground that the court lacked personal jurisdiction over him. The motion was denied.

Daw had just spent five days on vacation in east coast State X and was on his way home to west coast State A when his car collided with a car driven by Paul. the collision occurred in State Y, ten miles beyond the State X border.

Paul, a citizen of State X, filed an action against Daw in a State X state court. Paul alleged that he had suffered $700 in property damage when his car was struck by Daw's car. Daw was served at his home in State A and moved to quash service of process on the ground that the court lacked personal jurisdiction over him. The motion was denied.

Daw then filed an answer that denied negligence on his part and alleged contributory negligence.

Paul served interrogatories on Daw which requested the substance of a conversation that Daw had with his wife and his attorney's investigator soon after the accident. When Daw refused to answer those interrogatories, Paul moved to compel answers, and the court granted the motion. A $700 default judgment was entered against Daw when he refused to comply with the discovery order. State X follows the Federal Rules of Civil Procedure with regard to discovery sanctions.

Daw did not appeal the judgment, which then became final.

Paul filed a complaint against Daw in the United States District Court in State X for $23,000 for personal injuries arising out of the same accident. In his answer, Daw denied negligence and alleged contributory negligence. He also counterclaimed for damages for personal injuries resulting from the accident.

Both Paul and Daw moved for summary judgment based on res judicata and collateral estoppel.

1. Was the State X court correct in denying Daw's motion to quash? Discuss.

2. Was the State X court correct in granting a default judgment against Daw? Discuss.

3. How should the United States District Court rule on:

A. Paul's motion for summary judgment on his complaint and on Daw's counterclaim? Discuss.

B. Daw's motion for summary judgment on Paul's complaint? Discuss.

3. Wills QUESTION 3

Carol, a widow with a son, Sam, and a daughter, Dot, had often said she did not need a will, since she wanted the children to have everything. In 1970, after being notified by the Department of Defense that Sam had been killed in Vietnam, Carol executed a valid will, which provides:

"In view of the death of my son Sam, I leave one-third of my estate to my brother Tom and my sister Jane, sure and share alike; the remaining two-thirds of my estate I give to my daughter Dot. The shares of my brother and sister in the portion of my estatate allocated to them should be adjusted to reflect any advancements I may make to each of them, as recorded in a book of account which will be found with my will."

In 1972, Carol made gifts of $5,000 to Jane and $10,000 to Tom. In her ledger, which was later found with her will, under the caption "Advancements", Carol erroneously transposed the amounts, so that the entry read:

"4/9/72 - Jane $10,000

Tom $ 5,000"

In 1981, the Department of State wrote Carol that Sam apparently was a prisoner of war, and that efforts were being made to verify this and to secure his release. Dot, who lived with Carol, intercepted the letter and concealed it.

In 1983, Carol died, leaving a net estate of $270,000. Before Carol's estate was distributed, Sam was released and returned home.

1. Under what theories can Sam participate in the distribution of the estate? Discuss.

2. To what other relief, if any, is Sam entitled? Discuss.

3. How should Tom, Jane, and Dot participate in distributions from the estate? Discuss.

I. Sam's participation in the estate

A. The doctrine of mistake in the inducement

1. There are two types of mistake relevant in the context of wills:

(a) mistake in the factum- where the testator erroneously executes a document he does not intend to be his will; and

(b) mistake in the inducement- where a testator intends to make his will but his reasons are based on mistaken premises of fact.

2. Mistake in the factum is always provable by extrinsic evidence to negate testamentary intent.

B. Pretermitted Heir

II. Other relief

A. Constructive Trust

B. Damages for fraud

III. How should Tom, Jane and Dot participate

B. Relevance of the Books of Account

Incorporation by reference

Independent legal significance

Doctrine of ademption by inter vivos satisfaction

4. Criminal Law

Fred, a federal customs inspector, saw Dan speak to Anon as Dan and Anon walked across the international border into the United States. Fred recognized Anon as a person who had been convicted of smuggling narcotics. Over Dan's protest, Fred searched luggage carried by Dan and Anon. Fred found a packet of glassine envelopes and some dextrose powder in Dan's suitcase and a large quantity of heroin in the lining of the suitcase carried by Anon.

Fred knew that dextrose powder is used to dilute heroin, and that heroin is sold in envelopes like those carried by Dan. Fred then ordered that Dan be searched in private by a physician who found a small quantity of heroin on Dan in a body cavity. Dan was thereupon arrested on a federal charge of importing narcotics without a permit.

Fred notified state narcotics agents of the arrest. Olson, a state agent, located Dan's car parked legally on a street in the United States near the border crossing. Olson impounded the car and, during a search of the car on the following day, discovered a large quantity of heroin. Dan was then charged with violation of a state statute prohibiting possession of narcotics for sale.

At a pretrial bail hearing, Dan argued that he is entitled to have bail fixed, or, because he is indigent, to be released on his own recognizance. A state statute permits denial of pretrial bail when a defendant poses too great a risk to society to remain free pending trial.

1. How should the federal court rule on Dan's motion to exclude the heroin found on his person from evidence at the federal trial? Discuss.

2. How should the state court rule on Dan's motion to exclude the heroin found in his car from evidence at the state trial? Discuss.

3. How should the state court rule on Dan's claim that he is entitled to have bail fixed or to be released pending trial on the state charge? Discuss.

1. Exigent circumstances

2. Incident to Lawful Arrest

3. Plain View

4. The automobile exception

(1) Moving vehicle exception

(3) Inventory search

(3) Public safety exception

5. Bail

5. Evidence

Question 5 [Evidence]

In a rape prosecution against Roe, the following events occurred at the trial by jury:

1. Adam a neighbor of the victim, Tess, testified that within five minutes after the rape was alleged to have occurred, Tess ran to his house sobbing and said that she had just been raped by a man with a large brown blemish on his left arm.

2. Detective Cable testified that, on receiving Tess' report, he examined the file of known sex offenders, that Roe was listed as a previously convicted rapist, and that Roe was described as having a blemish on his left arm.

3. Tess testified that she saw Roe on the sidewalk, recognized the blemish on Roe's left arm, and told a police officer that Roe was the man who had raped her.

4. Roe's wife voluntarily testified for the prosecution that Roe retumed home on the night in question in an agitated state with scratches on his arm.

5. Roe testified in his defense and denied the act, saying that he had never been near Tess' house. In rebuttal, the prosecution offered one of Roe's shoes, seized in an illegal search of Roe's house. The shoe was introduced together with expert testimony that a shoe print identical to the shoe print made by Roe's shoe had been located outside the window the rapist had used to enter Tess' house.

6. At the prosecution's request, the judge ordered Roe to bare his left arm for the jury's inspection. Roe refused. The judge allowed the prosecutor to argue in closing argument that Roe's refusal was an attempt to hide evidence, from which the jury might infer guilt.

Assume that all proper motions and objections were timely made. Did the court err admitting the testimony in Items 1 through 4, in admitting the shoe and testimony in Item 5, or in permitting the prosecutor's argument in item 6? Discuss.

6. Community Property

All the following events occurred in California.

Shortly before H's marriage to W in 1970, he and his father commenced a construction business, XYZ corporation. H invested $10,000 saved from his prior earnings, for which he was issued 200 shares of XYZ stock. His father invested $10,000 in the corporation, for which he was issued 200 shares of XYZ stock. XYZ has issued no other stock.

After his marriage, H worked full time managing the corporation and received a salary of $2,500 per month. His father did not work for XYZ and received no salary. No dividends have been paid on XYZ stock. At the present time, the assets of XYZ exceed its liability by $1,000,000.

Since 1969, W has worked full time as a medical technician for Hospital. She has never worked for XYZ.

In 1977, H used funds saved from his salary during marriage to purchase a house and lot. Because of his potential personal liabilities in connection with the construction business, H arranged for title to the house and lot to be taken in W's name alone. Since the purchase, H and W have occupied the house as their home, and the house and lot are now worth $100,000.

In 1978, W inherited a mountain parcel improved with a cabin. At that -time, the property had a market value of $20,000 but was subject to a $4,000 mortgage and liens for unpaid taxes totalling $2,000. W used funds saved from her salary during the preceding four years to satisfy both the mortgage and the tax liens. Rentals received by W from the mountain property have been used to maintain the property and pay the taxes on it. The mountain property now has a market value of $130,000.

W has commenced an action for dissolution of the marriage.

How should the following property be distributed on dissolution?

1. XYZ corporation stock? Discuss.

2. The house and lot? Discuss.

3. The mountain parcel and cabin? Discuss.

Answer according to California law.

JULY 1984 1. Evidence

While traveling north through and intersection governed by a traffic light, Ann's car was struck on the driver's side by a dark blue sports car which sped from the scene of the collision.

Rick, the only pedestrian eyewitness, took photographs of the accident and of the sports car as it left the scene, but he did not observe the license plate on the car. Rick gave the undeveloped film to police who developed the photographs and were able to read the license plate number XJY-134 on the car. It was determined that Dave owned the car with the license number XJY-134.

Ann commenced a negligence action against Dave seeking compensation for property damage and personal injuries to herself and her passenger, her four-year-old daughter Jane. Dave's answer alleged that his car was not involved in the accident, but if it was, it was used without his knowledge or permission. Dave counterclaimed, alleging that Ann was negligent.

At the jury trial, the following occurred:

1. Ann's first witness, Bob, testified that he arrived at the scene within minutes of the accident, heard Jane crying, and heard Jane state that "the blue car went through a red light and hit us." A stipulation has been entered in the record that Jane is incompetent to testify at trial solely because of her age.

2. Ann testified that, prior to commencing suit against Dave, she spoke to him about settlement of her claim for $20,000. He stated, "I will settle with you if it isn't covered by insurance."

3. Rick, as a witness for Ann, testified as to the taking of the photographs developed by the police, and the photographs were admitted into evidence.

4. In the defense case, Dave introduced testimony by a properly qualified expert that three days after the accident and before the expert had an opportunity to examine the possibly faulty brake system on Ann's car, the car was repaired. Further, the expert testified that the repair included substantial brake work.

Assume timely and appropriate objections were made to the foregoing.

1. Was the testimony in items 1, 2 and 4 properly admitted? Discuss.

2. Were the photographs in item 3 properly admitted? Discuss.

JULY 1984 2. Constitutional Law

County School Board (Board) cancelled the remedial reading program in County's public schools. At the same time, Board increased funding for drama arts workshops provided for seniors in the public high schools of County. Such increased funding is about 15% of the cost of the remedial reading program.

Racial minorities comprise 10% of the County population and 50% of the students enrolled in the remedial reading program. "AB" is an organization of the parents of these minority students.

Some students are enrolled in the remedial reading program because of learning disabilities or other handicaps adversely affecting reading skills. "CD" is an organization of the parents of these students.

AB objected to the cancellation of the remedial reading program on the ground that the program's termination would disproportionately affect their children adversely. CD objected to the program's termination on the ground such action would effectively end public education for their children.

In recommending termination of the program, the Board's director had stated: "This action is a necessary economy measure. We have other educational programs, such as pre-college math, which are educationally more important. Handicapped students will simply have to be served sometime in the future when we again have sufficient financial resources. And we will, even then, have to target the program so that it helps handicapped children, not children of racial minorities who just need to improve their skills in the English language." Board's actions were based on its director's recommendations.

AB and CD filed suit against Board in federal court, asserting that termination of the remedial reading program violated the constitutional rights of the parents and the children represented by those organizations, and asking that Board be ordered to reinstate the program. While the suit was pending, Congress enacted a federal statute requiring school boards of all state political subdivisions to provide remedial reading courses. In passing this legislation, Congress relied upon findings of congressional hearings that adults without reading skills inhibit production, sales, and travel in interstate commerce.

Assume that both AB and CD have standing to assert their claims.

1. Is the federal statute constitutional? Discuss.

2. If the court rules that the federal statute is unconstitutional:

A. What issues under the U.S. Constitution should AB raise against the actions of Board? How should they be decided? Discuss.

B. What issues under the U.S. Constitution should CD raise against the actions of Board? How should they be decided? Discuss.

JULY 1984 3. Real Property

Al owns Blackacre, a country property with extensive highway frontage. Blackacre adjoins property on which the Restview Inn is located. In 1992, after prolonged discussion, Al said to his son-in-law, Bret, “I grant you the right to construct and maintain 10 billboards on Blackacre to advertise your business." No consideration was agreed to or paid. The statement was overheard by Carl, an attorney and mutual friend. Al and Bret previously had asked Carl what words they should use to put their intentions into effect.

Immediately thereafter Bret erected 10 large, neo-lighted billboards. Each cost in excess of $2,500. The billboards dominate the landscape as seen from the adjacent Restview Inn, which for more than 25 years prior to the erection of the billboards had been very popular with vacationers desiring to escape the urban sprawl and to enjoy the unobstructed view of the natural countryside. One billboard blocks the view and cuts off the sunlight to one side of the Inn's dining room.

Peter, the owner of Restview Inn, is threatening to sue Al if he does not remove the billboards, and Bret is threatening to sue Al if he does.

1. What are the rights and remedies, if any, of Peter against Al? Discuss.

2. What are the rights and remedies, if any, of Bret against Al? Discuss.

3. If Bret sues Al, will Al be able to prevent Carl from testifying to what Carl heard Al say? Discuss.

Answer

JULY 1984 4. Remedies

Fred is the owner of Fieldacre, a farm and residence located in State F valued at $200,000. Sam, Fred's son, is owner of Snowacre, undeveloped pasture land in State S valued at $25,000.

Fred asked Sam if Snowacre has access to water. Sam replied that he believed there was an underground water source which could be developed. Fred said that, in such event, he could use Snowacre to pasture cattle and that he wanted Sam to have Fieldacre so Sam could raise Fred's grandchildren on a farm.

On May 1, 1984, Fred offered in writing to deliver to Sam a deed to Fieldacre in exchange for Sam's delivery to Fred of a deed to Snowacre. The offer concluded with the statement: "This offer will remain open until June 1, 1984," and was signed by Fred.

On May 10, 1984, Sam refused an offer from Rob to purchase Snowacre for $35,000. On May 25, 1984, Fred withdrew the offer he had made to Sam, stating that he had discovered that there was no water source accessible to Snowacre. On May 28, 1984, Sam delivered to Fred a written acceptance of Fred's offer, together with a deed conveying Snowacre to Fred.

Sam brought suit in State S alleging a contract for the exchange of Snowacre for Fieldacre and his timely delivery to Fred of a deed to Snowacre. He seeks specific performance of Fred's promise to deliver a deed to Fieldacre. Fred made a general appearance in the State S action.

1. Does the State S court have jurisdiction to grant the relief requested? Discuss.

2. What other issues should Fred raise in defending the action and how should the court rule on each of them. Discuss.

JULY 1984 5. [Criminal Law]

Dan proposed to his friend Paul that the two rob the First National Bank (Bank). Paul, thinking that Dan was joking, replied: "Sure, why not?" Dan then produced three pistols and three stocking masks and said: "Okay, let's go." Paul thought that it would be dangerous to back out at that point. He therefore took a pistol, but he secretly resolved to try to thwart the robbery.

On the way to Bank, Dan announced: "We need someone else." Dan then approached passerby Mike, pointed a pistol at Mike, and said: "We are going to rob Bank, and you are going to help us or we will kill you." Mike gulped, accepted a mask and an unloaded pistol, and proceeded with Dan and Paul to Bank, doing so only because he reasonably believed the threat was real.

When the three arrived at Bank, Dan assigned Paul to act as lookout. Dan instructed Mike to approach the teller with the pistol and to demand all the teller's cash. Dan then stood back to cover everyone in Bank, including Mike. Dan whispered to Paul: "We will kill anybody who gives us trouble." Paul said nothing.

Immediately thereafter Fred, a stranger to Dan, Paul, and Mike, entered Bank. Dan thereupon shot and severely wounded Fred. Fred was a federal bank examiner conducting an audit of Bank's accounts.

Based on properly admitted evidence which established the above facts, Dan and Paul were convicted in a federal court of violation of, and conspiracy to violate, a federal statute providing: "Whoever assaults with a deadly weapon any federal officer engaged in the performance of his duties is guilty of a felony." Dan and Paul have appealed, arguing that the evidence does not support the convictions of either for violation of the federal assault statute or conspiracy to violate that statute.

Eight months after the robbery attempt, Fred died of his wounds. Dan, Paul, and Mike are on trial in a state court on charges of assault with a deadly weapon on, and murder of, Fred. Dan and Paul filed timely motions to dismiss both the assault and the murder charges on the ground that the prosecution subjects them to double jeopardy. The motions were denied.

Evidence identical to that admitted in the federal court was then received in the state court trial. Mike filed a timely motion for a directed verdict of acquittal on the ground that the evidence established duress as a matter of law.

1. How should the federal appeal court rule? Discuss.

2. Was the state trial court's denial of the motions to dismiss correct? Discuss.

3. How should the state trial court rule on Mike's motion for a directed verdict? Discuss.

JULY QUESTION 6 Torts

Abel and Baker were working on a scaffold lawfully erected over a public sidewalk. Abel, contrary to an express rule of his employer, was not wearing a hard hat.

While trying to park her automobile near one of the supports of the scaffold, Diana maneuvered it into such a position that she knew there was a risk of knocking the scaffold down if she backed without someone to guide her. She appealed for help to Sam, a stranger who was passing by. Sam just laughed. Angered, Diana proceeded to back her automobile without assistance and knocked a support out from under the scaffold, causing Abel and Baker to fall.

Abel severely fractured his skull and was taken unconscious to a hospital. If he had been wearing his hard hat, he would have suffered only a slight concussion with minimal disability.

Baker sustained a fracture of a vertebra, but he was able to walk and felt only slight pain. The fracture could have been easily diagnosed by x ray, and a medical doctor of average competence could have successfully treated it by immobilization. Instead of visiting a physician, Baker worked the rest of the day. While driving his car home later that day, Baker stopped at an intersection and his car was struck from the rear by a car driven by Ed. The collision caused only slight damage to Baker's car, but it was sufficiently severe to aggravate the fracture in Baker's back, resulting in paralysis.

Diana and Sam settled Baker's claim against them and received general releases from him. Able sued Diana and Sam. Baker sued Ed. Assume that Diana, Sam and Ed raise all appropriate defenses.

1. What rights, if any, does Abel have against Diana? Sam? Discuss.

2. What rights, if any, does Baker have against Ed? Discuss.

Question 4 [Remedies]

Al planned to build a large shopping center in a suburban area. Betty agreed in writing to sell Al her 100-acre farm located in the center of the proposed development. Al deposited with Betty a portion of the purchase price, the balance to be paid upon delivery of the deed by Betty. At the time their written contract was entered into, Al told Betty only that he was buying her land and 200 acres from other local farmers for a “big project.”

Relying upon Betty's agreement, Al purchased the surrounding 200 acres from other farmers. He paid them the same price he had contracted to pay Betty: $1,000 an acre. This price was $200 an acre over market value.

Claude, hoping to build his own shopping center on other nearby land, paid Betty $100,000 to refuse to convey her property to Al. Betty falsely notified Al that she could not complete the sale because she had discovered a defect in her title. Al reluctantly accepted return of his deposit. Without Betty's land, Al could not develop the shopping center as planned, and he has offered his 200 acres for sale.

Claude purchased the land for his shopping center from local farmers for $5,000 an acre, $3,000 below the former market value, because land values in the entire area plummeted once Al offered his 200-acres for sale. Claude's shopping center is nearing completion.

Al has recently learned of Claude's arrangements with Betty.

What legal and equitable remedies does Al have:

1. Against Betty? Discuss.

2. Against Claude?

Question 5 [Business Associations]

The By-laws of Dixie, a publicly held corporation, provide, "The number of directors of the corporation shall be five." Insofar as pertinent, Dixie's articles of incorporation state that the number of directors "constituting the initial board of directors" is five and provided for annual election of directors.

Since its incorporation five years ago, Dixie has been very profitable. Anticipating a hostile takeover attempt, the board voted to increase its size to nine and to stagger the terms of directors so that only three would stand for election each year.

Stan, owner of 29% of Dixie's voting stock, demanded that the board call a special meeting of shareholders to disapprove the board's action and to remove the president from office. The board refused to call a meeting for those purposes. It filled the newly created board positions with persons who were experienced in business and were close friends of the original board members. The new board entered into transactions that harmed Dixie financially, but which made the corporation less attractive for takeover.

When Stan filed a derivative suit against Dixie and the directors challenging the board's conduct, the board appointed the new members as a "special litigation committee." Thereafter, the board moved to dismiss the suit because "based upon the recommendation of the special litigation committee, the board has concluded the suit is not in the best interest of Dixie."

1. Did the board act lawfully:

A. In increasing its size to nine members without a shareholder vote? Discuss.

B. In staggering the terms of board members without a shareholder vote? Discuss.

C. In refusing to call a special meeting of shareholders? Discuss.

D. In filling the newly created board positions without a shareholder vote? Discuss.

2. Should the court grant the board's motion to dismiss? Discuss.

July 1984 [Civil Procedure] [Contracts]