[Wills] [Trusts]
In 1990 Harry and Wanda, husband and wife, properly executed wills, each stating:
“All my property goes to my surviving spouse, and if my spouse does not survive me, then to the children of Harry by Fran, his former wife.”
While signing the wills in the presence of Wanda’s siblings, Sis and Buddy, Harry and Wanda orally promised never to revoke the 1990 wills.
At Harry’s death in 1991, he was survived by Wanda and by Abby, Carl and Dan, all children of Harry and Fran. Abby died in 1992, while visiting Wanda, and was survived by Abby’s three young sons.
In 1995 Wanda, having become angry with Harry’s surviving children, revoked her 1990 will and signed a new will. Her new will left all her property to Sis and Buddy, as trustees of a trust for “the children of Harry and Fran,” to last until the death of the last surviving child of Harry and Fran. The trustees were given total discretion over distribution of any income to trust beneficiaries prior to trust termination. Wanda died in 1996.
After Sis and Buddy accepted the job as trustees, Buddy let Sis handle everything. For the next three years Sis distrubuted all trust income to Abby’s three young sons.
In 1998 Sis died, insolvent. Carl and Dan then sued Buddy as surviving trustee, asserting that:
Based on Wanda’s promise never to revoke her 1990 will, the trust should be terminated, and
Buddy should be ordered personally to repay the total of $1 million in trust income which Sis had distributed from the trust to Abby’s sons.
How should the court rule on each of these assertions? Discuss. Answer according to California law.
[Criminal Procedure]
Information gained from a constitutionally proper wiretap gave law enforcement agents a reasonable suspicion that Deft was a cash courier in a money laundering scheme associated with distribution of narcotics. To obtain probable cause to arrest Deft and to build their case against other participants, the agents placed Deft under surveillance. They saw her drive into an office complex and legally park the car. She left a male companion in the car and walked into the complex carryinga soft cloth briefcase. As she walked, Deft engaged in evasive actions the agents recognized as moves designed either to reveal or lose any potential surveillance.
Deft walked into a building where the agents lost sight of her for a few moments. When she emerged and approached the car, it became apparent to the agents that she was aware of the surveillance. The agents approached Deft and asked her questions about the money laundering scheme. During this conversation, agent Able seized and squeezed the brief case held by Deft. Whenhe felt a lump he could not identify, Able reached into the briefcase and felt a heavily taped bound object about three inches in diameter which he removed from the briefcase. Able will testify that he has seen such objects in the past, and they frequently contained drugs. Able cut the package open and discovered a substance that a field test indicated was cocaine. He arrested Deft.
Without Miranda advice and waivers, Able asked Deft if she owned an automobile. She replied that she did and pointed to the car the agents had seen her park. She refused Able’s request that she consent to a search of the car. The agents nonetheless searched the car, finding a loaded handgun concealed under the dashboard. Deft is awaiting trial on charges of possession with intent to distribute cocaine and unlawful possession of a handgun.
On what ground or grounds under the United States Constitution might Deft move to suppress:
1.The narcotics? Discuss.
2. Deft’s statement that she owned the car? Discuss.
3.The handgun? Discuss.
On July 1, 1991, Hank (“H”) and Wanda (“W”) married in Illinois, a non-community property state. W began law school in August 1991, and graduated in June 1994. During this period, H worked as a stockbroker and earned a graduate degree in art history. Of W’s $60,000 in law school tuition, $50,000 was paid with an education loan by H from Bank. The remaining $10,000 was paid with H’s wages, as were H’s $15,000 tuition and W’s $40,000 in living expenses while attending law school.
H and W moved to California in 1994. W began work as an associate in a law firm, and H continued to work as a stockbroker. In 1996, H bought a Ming vase with his wages and gave it to W on her birthday. At W’s suggestion, H bought a Chinese-style table for the living room, on which to display the vase. They both frequently referred to the vase as “our pride and joy.”
In July 1998, H and W separated and filed for dissolution of their marriage. At the time, the balance due on the education loan was $10,000. On December 31, 1998, W received a substantial year-end bonus from her firm. A judgment of dissolution was entered in January 1999.
In the distribution of property and allocation of liabilities of H and W, how should the court treat:
W’s legal education and law degree? Discuss.
The $10,000 balance on the education loan? Discuss.
H’s art history degree? Discuss.
The vase? Discuss.
The bonus? Discuss.
Answer according to California law.
[Business Associations] [Professional Responsibility]
Rentco, a corporation, develops and leases office buildings. Rentco’s issued and outstanding shares are equally divided among Al, an attorney, Bob, President of Bank, and Carl. Rentco’s three directors are Al, Bob and Ed, who is not a shareholder. Al is also Rentco’s general counsel.
The Rentco board has decided to have Rentco purchase The Plaza, an office building with highly marketable office space. At the board meeting where the decision was made, Bob was assigned the task of negotiating the purchase of The Plaza.
After the meeting, Bob discovered that Bank holds the present mortgage on The Plaza. $300,000 remains due on the mortgage loan, which is in default. Bob so advised Al and requested that Al do the legal work to foreclose the mortgage for Bank and also to form Diverco, a close corporation in which Bob will be sole shareholder. Al completed both tasks. Bob had not told Al that Bob planned to have Diverco purchase The Plaza at Bank’s foreclosure sale.
At the foreclosure sale, Bob caused Diverco to purchase The Plaza for $300,000, which satisfied Bank’s unpaid debt. The current market value of The Plaza is approximately $600,000.
At the next Rentco directors’ meeting, Bob falsely reported that he had negotiated a purchase price of $600,000 for the purchase of The Plaza by Rentco. None of the directors, including Al, asked any questions about the proposed purchase, and all voted to approve it. After the meeting, at Bob’s request, Al prepared a standard real estate purchase agreement for The Plaza, naming Diverco as seller. After the closing, Bob dissolved Diverco.
Carl discovered the foregoing facts and, after making a demand on the directors which was rejected, filed a derivative action for damages against Rentco, Al, Bob and Ed, claiming that the directors breached their fiduciary duties. Carl also filed a complaint about Al’s conduct with the appropriate state bar disciplinary body.
Is Al, Bob, or Ed liable for breach of fiduciary duties as a Rentco director? Discuss.
What ethical duties, if any, has Al violated by his conduct? Discuss.
Maker manufactures printing presses. News, a publisher of a local newspaper, had decided to purchase new presses. Rep, a representative of Maker, met with Boss, the president of News, to describe the advantages of Maker’s new press. Rep also drew rough plans of the alterations that would be required in the News pressroom to accommodate the new presses, including additional floor space and new electrical installations, and left the plans with Boss.
On December 1, Boss received a letter signed by Seller, a member of Maker’s sales staff, offering to sell the required number of presses at a cost of $2.4million. The offer contained provisions relating to the delivery schedule, warranties, and payment terms, but did not specify a particular mode of acceptance of the offer. Boss immediately decided to accept the offer, and telephoned Seller’s office. Seller was out of town, and Boss left the following message: “Looks good. I’m sold. Call me when you get back so we can discuss details.”
Boss next telephoned Pressco and rejected an outstanding offer by Pressco to sell presses to News similar to those offered by Maker. Using the rough plans drawn by Rep, Boss also directed that work begin on the necessary pressroom renovations. By December 4, a wall had been demolished in the pressroom and a contract had been signed for the new electrical installations.
On December 5, the President of the United States announced a ban on imports of foreign computerized heavy equipment. This removed from the American market a foreign manufacturer which had been the only competitor of Maker and Pressco. That afternoon, Boss received a telegram from Maker stating, “All outstanding offers are withdrawn.” In a subsequent conversation, Seller told Boss that Maker would not deliver the presses for less than $2.9 million. A telephone call by Boss to Pressco revealed that Pressco’s entire output had been sold to another buyer.
Was Maker obligated to sell the presses to News for $2.4 million? Discuss.
Assume Maker was so obligated. What are News’ rights and remedies against Maker. Discuss.
[Civil Procedure]
In 1998, the Park Company (Park), a State X importer of art objects, contracted with Wholesale (W), a wholesaler based in Italy, to purchase a shipping container of vases for $800,000. The agreement, which was negotiated entirely in Italy, specified that “disputes concerning this contract shall be subject to non-binding arbitration in State X prior to the commencement of any action on the contract.”
Before entering into this contract, W had never done business with Park. W sells most of its goods to buyers in Spain. However, in 1996 W had sold to a State X company three shipping containers of vases worth $700,000 per container. These sales had been negotiated during a month-long sales trip to State X by W’s president.
Park rejected the 1998 container of vases on the ground that over half the shipment did not conform to contract specifications. Two months following an unsuccessful private arbitration in State X, Park sued W in federal court in State X alleging $100,000 in lost profits. W timely moved to dismiss the complaint on the ground that the court lacked jurisdiction and on the alternative ground of forum non conveniens. The court denied W’s motion in its entirety.
All of W’s witnesses to its design and manufacturing process are located in Italy. Italian courts provide a forum for Park’s claim; however, Italian law recognizes fewer theories for recovery than State X law and imposes a limitation on damages, which State X does not.
Did the court correctly decide W’s motion to:
Dismiss for lack of jurisdiction? Discuss.
Dismiss on the ground of forum non conveniens? Discuss.
[Criminal Law] [Professional Responsibility]
Al, Bob and Charlie planned to bring 50 cases of whiskey ashore from a ship anchored in the harbor near their town and sell it to a local bar owner. They believed the whiskey had been produced abroad and was subject to a federal import duty. They also knew that smuggling items into this country without paying duty required by the Tariff Act is a crime. In fact, however, the whiskey in this shipment had been produced in the United States.
The three met at Al’s house on Monday and agreed to bring the whiskey ashore by rowboat on Friday night. On Wednesday, however, Bob called Al to say that he and his wife were going to visit relatives that weekend and Bob would not be able to help bring the whiskey ashore. Al said that was all right, that he and Charlie could handle the boat and the whiskey, but that Bob would naturally be cut out of the profits on this job.
When Charlie learned from Al that there would be just the two of them he became apprehensive, but he was afraid of what Al might do to him if he tried to back out. Therefore, on Thursday, Charlie informed the police of Al’s plan and did not show up on Friday night. Al was arrested on Friday night as he came ashore, alone, with the whiskey and was loading it into a truck he had stolen from a nearby Coast Guard parking lot.
Al, Bob and Charlie have been charged with theft of the truck and conspiracy to import dutiable goods without payment of duty.
Al has also been charged with attempt to import dutiable goods without payment of duty. He has told Len, his lawyer, that he plans to testify that he knew all along that the whiskey was produced in the United States.
Based on the above facts:
Should Al, Bob or Charlie be convicted of:
Conspiracy to violate the Tariff Act?
Theft of the truck? Discuss.
Should Al be convicted of attempt to import dutiable goods without payment of duty in violation of the Tariff Act? Discuss.
If Al persists in testifying that he knew the whiskey was produced in the United States, what, if anything, should Len do? Discuss.
Peter was living in State X when he was arrested and charged with violating a State X criminal statute. Because of overcrowding in State X Penitentiary, however, Peter was forced to await trial while incarcerated in the security wing of Delta Hospital (D), a private hospital for persons with psychiatric disorders, located and incorporated in the neighboring state of Y.
Peter filed a class action complaint against D in a federal district court in State X on behalf of himself, on behalf of 25 similarly situated inmates who were incarcerated at D awaiting trial in State X and on behalf of all such future inmates. The complaint alleged violations of the State Y Prisoners' Rights Act, which guarantees prisoners, inter alia, the right to safe food. The complaint alleged that the food served at D was often spoiled and contaminated with vermin droppings and that, as a result, he suffered continual gastrointestinal disorders. Peter requested $70,000 in damages and an injunction prohibiting D from serving tainted food. D was properly served with a copy of the complaint.
Before D responded to the civil complaint, Peter's brother Matt paid Peter's bail. As a result, Peter is no longer detained at D and has returned to State X.
The federal district court:
1. Denied a motion by D to dismiss for lack of jurisdiction;
2. Declined to certify the class on the ground that the class was not large enough;
3. Denied a motion by D to change venue to a federal district court in State Y; and
4. Granted a motion by D to dismiss the action as moot.
Was each of the rulings correct? Discuss.
[Contracts] [Professional Responsibility]
Susan is the Chief Operating Officer of WestTel, a telecommunications company. Felix is the Chief Executive Officer of CodeCo, a software company. About a year ago, Susan and Felix negotiated and signed a valid written contract under which WestTel purchased from CodeCo a license to use and sell software that prevents interception of telephone communications during transmission. Susan was assisted in the negotiations by Larry, an in-house attorney then employed by WestTel.
Throughout the negotiations, WestTel insisted that the license from CodeCo be an exclusive License for WestTel to use and sell the software in the national cellular telephone market. The only language bearing on the subject in the contract stated that, "WestTel shall have the use" of the software. The contract contained a clause stating that the written contract represents the entire agreement of the parties. Susan was given oral assurances by Felix that the language quoted above would be interpreted by CodeCo to mean that WestTel was granted the exclusive license and that CodeCo would not license the software to others in the national cellular telephone market. Larry advised Susan that he was satisfied with Felix' oral assurances. Last week, Susan saw an ad in a trade journal announcing that NewCom, a competitor of WestTel, Last week, Susan saw an ad in a trade journal announcing that NewCom, a competitor of WestTel, was marketing a new national cellular phone service using the same anti-interception softeare produced by CodeCo. She immediately call Felix to inquire about the NewCom ad and remind him of WestTel's exclusive license. Felix confirmed that CodeCo had licensed the same software to NewCom and denied that WestTel had an exclusive license. Susan then called NewCom and informed its chief executive officer that WestTel had the exclusive license for the use of the software and that, if NewCom went forward with its plan to use the software in the national market, WestTel would sue NewCom. She was told that if she wanted to discuss it further she should talk to Larry, NewCom's in-house attorney who had negotiated the NewCom/CodeCo contract.
It turns out that at the time Larry was assisting Susan with the WestTel/CodeCo negotiations, NewCom had contacted Larry and offered him a job. NewCom knew when it offered him the job that Larry was participating in the WestTel/CodeCo negotiations. Larry quit WestTel about six months ago and joined NewCom's legal staff. When Susan confronted Larry and reminded him of his advice about the exclusivity of the WestTel/CodeCo deal, Larry responded only with, "Well, you signed it."
1. What theories, if any, might WestTel reasonably assert against CodeCo to establish and enforce a right to an exclusive license and what is the likely outcome on each theory? Discuss.
2. Should WestTel prevail in actions for tortious interference with the WestTel/CodeCo contract against.
a. CodeCo? Discuss.
b. NewCom? Discuss.
c. Larry? Discuss.
3. What, if any, ethical duties has Larry breached? Discuss.
[Evidence]
Mary Smith sued Dr. Jones, alleging that Jones negligently performed surgery on her back, leaving her partly following
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paralyzed. In her case-in-chief, Mary called the defendant, Dr. Jones, as a witness. The questions were asked and questions given:
Now, you did not test the drill before you used it on Mary Smith’s vertebrae, did you?
No. That’s not part of our procedure. We don’t ordinarily do that.
Well, since Mary’s operation, you now test these drills immediately before using them, don’t you?
Yes.
Just before you inserted the drill into my client’s spine, you heard Nurse Clark say “The drill bit looks wobbly,” didn’t she?
No. I did not.
Let me show you what has been marked as plaintiff’s exhibit No. 10. [Tendering document] This is the surgical report written by Nurse Clark, isn’t it?
Yes.
In her report she wrote: “At time of insertion I said the drill bit looked wobbly,” didn’t she?
Yes. That’s her opinion.
OK, speaking of opinions, you are familiar with the book, General Surgical Techniques by Tompkins, aren’t you?
Yes.
And it is authoritative, isn’t it?
Some people think so.
And this book says, at page 255, “Always test drill bits before using them in spinal surgery,” doesn’t it?
I guess so, but again that’s his opinion.
Now, you’ve had some trouble yourself in the past?
What do you mean?
Well, you were accused by two patients of having sexually abused them, weren’t you?
That was all a lot of nonsense.
But you do admit that in two other operations which you performed in 1993 the drill bit which you were using slipped during back surgery, causing injury to your patients?
Accidents do happen.
What objection or objections could Dr. Jones’ attorney reasonably have made to the question or answer at each of the places indicated above by the numbers in the left hand margin, and how should the court have ruled in each instance? Discuss.
[Real Property] [Torts] [Remedies]
Since the early 1960's, Artist has had a year-to-year lease of the third floor of a small loft building which, like most buildings in the area, has mixed commercial and light manufacturing uses. Artist has used her space, as other local craftspeople have used theirs, for both residential and studio purposes. She has enjoyed the serenity of her unit and the panoramic views of the distant hills and of the nearby park to which she has had easy access.In July 1998, Landlord rented a lower floor of the building to Machinist, whose operations are extremely noisy. Artist’s complaints about the noise to both Machinist and Landlord have been to no avail.At about the same time, Developer began building a large office tower nearby which will blockArtist’s view when completed. The office building will provide needed employment for the community.The State Power department, a State governmental agency, has also begun construction of electric and communications lines for Developer’s office building. For the next several years, the StatePower Department construction will block a path across an undeveloped lot which separates Artist’s neighborhood from the park. The path has been regularly used for many years by Artist and other neighborhood residents because the only other access to the park is by a much longer circuitous street route.
1.What are Artist’s rights and remedies, if any, against Landlord, Machinist and Developer? Discuss.
2.What are Artist’s rights and remedies, if any, against the State Power Department for blocking the path? Discuss.
Sally is vice president for research at Chipco Corporation (Chipco), a microchip manufacturer. Chipco’s stock is traded on a national stock exchange. During the course of her work for Chipco, Sally’s research team developed technology that could reduce microchip production costs by 75 percent. However, Sally knew that additional testing was necessary to ensure commercial viability of the technology.
Chipco retained lawyer Laura to advise it on patenting the new technology. On March 12, 1998, Laura arranged a conference call with Sally and other Chipco personnel, who explained the new technology to Laura. This information was personally as well as professionally interesting to Laura because she already owned 12 percent of Chipco’s outstanding stock as part of her personal investment portfolio. On March 16, 1998, Laura telephoned attorney Arnold, an opposing counsel on an unrelated matter, and mentioned that her client Chipco might soon become a major competitor in the microchip business because of new breakthrough technology. Shortly thereafter, Sally, Laura and Arnold each telephoned a broker and purchased shares of Chipco stock at $10 per share.
On April 10, 1998, a financial newspaper reported a rumor that Chipco had developed a new breakthrough technology. Within the next two days, Chipco stock increased to $20 per share. Chipco had been purchasing large blocks of its own shares and it became fearful of continued price escalation of its shares. Therefore Chipco promptly responded to questions from the press about the rumor by issuing a release that stated, “Chipco has not developed new commercially viable technology at this time.” As soon as the statement was reported by the press, the price of Chipco shares fell to $11 per share.
On August 20, 1998, after successfully testing for commercial viability, Chipco publicly announced its new technology, and Chipco stock again rose to $20 per share. By September 5, 1998, Sally, Laura and Arnold had each sold all their shares of Chipco stock at the higher price.
Has there been any violation of federal securities laws by:
Sally? Discuss.
Laura? Discuss
Arnold? Discuss.
Chipco? Discuss.