JULY 2013
PENNSYLVANIA BAR EXAMINATION
Sample Answers
Pennsylvania Board of Law Examiners
601 Commonwealth Avenue, Suite 3600
P.O. Box 62535
Harrisburg, PA 17106-2535
(717) 231-3350
www.pabarexam.org
©2013 Pennsylvania Board of Law Examiners
This page intentionally left blank.
2
Performance Test: Sample Answer
Memorandum
To: Suzanne Suite
From: Associate
Date: July 30, 2013
Re: Reopening Judgment in Airy v. Gabalot, Inc.
File Number: 123456
Introduction
The purpose of this memorandum is to outline whether Mr. Speak, President of Gabalot,
Inc. will be successful in a petition to open a default judgment entered against him and Gabalot.
Mr. Speak will be successful in a petition to open the judgment because, as outlined below, he
will file the petition promptly, a meritorious defense exists, and the reason for not responding to
the original complaint was reasonable.
Analysis
In order to open a default judgment, the moving party must establish three requirements:
1) a prompt filing of a petition to open the default judgment; 2) a meritorious defense; and 3) a
reasonable excuse or explanation for its failure to file a responsive pleading. Dumoff, 10; PennDelco, 13. The decision to grant the petition to open the judgment is within the discretion of the
trial court. Dumoff, 10.
Prompt Filing
Prompt filing is determined by two factors; "(1) the length of delay between discovery of
the entry of a default judgment, and (2) the reason for the delay." Dumoff v. Spencer. The court
in Dumoff has stated that a time as little as 21 days to be untimely and in other cases held that a
filing within 14 days is considered timely.
In the present case Speak has come to know of the entry of default judgment on July 29th
and had contacted us the next day, July 30, 2013. Our case is unlike Dumoff, where the
defendant waited for 4 months after the plaintiff failed to sign the stipulation to open the default
judgment, without any reason. It is likely that if we file a petition to open the judgment within
the next week or so we should be within the court's 14 day timely holding. If for some reason we
would need to go over the 14 days to file the petition, we need to provide a reasonable reason as
to why we delayed in filing the petition.
1
Meritorious Defense
The petitioner need only set forth the defense in precise, specific and clear terms. PennDelco, 14. To be meritorious, a defense "must be pleaded that if proved at trial it would justify
relief." Penn-Delco, 14. Examples of meritorious defenses include the following: cause of
action barred by statute of limitations, res judicata, and failure to exhaust administrative
remedies. Penn-Delco, 14.
Statute of Limitations Defense
In Pennsylvania, the statute of limitations for an action in tort is two years. 42 Pa. C.S.A.
section 5524. The statute of limitations for an action based on an express contract not in writing
in four years. 42 Pa. C.S.A. section 5525.
Mr. Speak will be able to argue that Airy's action is barred by the statute of limitations.
The complaint is both in tort for tortious interference with contract and a breach of contract
claim. The store closed on December 31, 2007. However, Airy did not file a complaint until
April 26, 2012. The two year statute of limitations for tort actions would have run on December
31, 2009. The statute of limitations for the breach of contract claim would have run on
December 31, 2011. Both statutes of limitations had run before Airy filed. Therefore, Mr.
Speak would likely be able to prove at trial that he and Gabalot would be entitled to relief on
these grounds. This defense is therefore meritorious. Mr. Speak would satisfy the meritorious
defense prong on these grounds if he states them precisely in his petition.
Reasonable Excuse
Third, a default judgment may be opened when the moving party establishes a reasonable
excuse or explanation for its failure to file a responsive pleading. Under the PA RCP, every
pleading subsequent to the complaint shall be filed within twenty days after service of the
preceding pleading. (PA RCP 1026). Here, our clients never filed a responsive pleading.
However, as explained below, our clients never received proper service of process and therefore
had no notice of the lawsuit. They could not file a responsive pleading unless they had notice of
the lawsuit. Because they never received proper service of process, our clients had a reasonable
excuse and explanation for failing to file an answer to the complaint within 20 days.
Under the PA RCP, original service shall be served outside the Commonwealth by (1) a
competent adult who hands a copy to the defendant or to an adult at the defendant's residence,
whether a home or hotel, or at any office or usual place of business of the defendant to his agent
or to the person in charge there, (2) by mail, (3) in the manner provided by the law of the
jurisdiction in which the service is made. First, service was improper under PA law. Michael
Rock was the process server. On May 3, 2012, he attempted service by depositing copies of the
complaint with Neil Bore at the Budget Wireless store in Key West, FL. Neil Bore is president
of Wire4Less, Inc. in Key West, FL. Bore formed the corporation on June 1, 2010. On June 2,
2010, Gabalot sold the Budget Wireless franchise store to Wire4Less and entered into a lease
agreement to lease the premises in which the Budget Wireless store purchased by Wire4Less was
located. Neil Bore was president of Wire4Less, which is unrelated to Gabalot, and Bore was not
2
an agent of Gabalot or Sam Speak. The Budget Wireless store owned and operated by
Wire4Less was not an office of Gabalot, nor was it Gabalot's usual place of business. Rather,
Gabalot's registered office and principal place of business is in the Conch Office Complex in
Key West, FL. Therefore, Plaintiff did not comply with the PA RCP with regard to proper
service of process.
Additionally, under FL law, service of original process is made by delivering a copy of it
to the person to be served with a copy of the complaint or by leaving the copies at his or her
usual place of abode. (FL statute 48.031). There was improper service of process on Sam Speak
under FL law. The complaint was not given to him or left at his home. Also under FL law,
process against any corporation may be served on the president or VP, or other head of the
corporation, or in their absence, on the cashier, treasurer, secretary, or general manager. (FL
statute 48.081). There was improper service on Gabalot under FL law. Gabalot is a FL
corporation. All of the shares of Gabalot are owned by Sam Speak, who is its president and
treasurer. Therefore, service had to be made on Sam Speak, as president and treasurer. As
previously stated, the complaint was not given to Speak or left at his home. Therefore, Plaintiff
did not comply with the FL rules for proper service of process.
3
Question No. 1: Sample Answer
1.
Based on the simultaneous death facts and the wills of Roger and Belinda, Dennis will
receive his specific gift (the car) and Jane and Dennis will split the rest of the estates pursuant to
the terms of both wills with Dennis receiving 1/4 (after all the legally-enforceable debts are paid
in light of the will clause) and Jane receiving 3/4 of the estates.
Under PA Probate and Estate law, property of deceased spouses who die at the same time
will flow through each of the spouses' wills as if that spouse outlived the other. Wills may
specify the outcome of distribution in the case of simultaneous death through a clause in the will
but without specific instruction the general rule will apply.
Here, Roger and Belinda did not have reciprocal wills in light of Roger's specific gift of
the car to Dennis. Their wills also did not take into account the death of both spouses at the
same time. Without specific instruction stating how to distribute, the general rule will apply.
Roger and Belinda both died on the same night without signs of one outliving the other. Without
a clear indication of who lived longer the joint property will be split in half so that one half will
go to each estate and each spouse's will controls the half distribution. Roger was to split his
estate equally with both children after the specific gift to Dennis. Belinda was distributing her
entire estate to her daughter Jane, as she did not provide for Dennis under the will. With the
property flowing through each will, Dennis will receive 1/4 of the jointly held property and the
car; and Jane will receive the remaining 3/4 of the jointly held property.
2.
Mavis, Executrix of Roger and Belinda's estates, should not pay off the loan before
distributing the car because the taker of a specifically bequeathed asset does not have the right to
have a lien paid off by the estate, absent clear intent to the contrary.
Under Pennsylvania probate law, the taker of a specifically bequeathed asset does not
have the right to have a lien paid off by the estate, absent clear intent to the contrary. However,
Roger's will included the direction that the Executor pay all legally-enforceable debts and taxes.
A court could construe this as his expression of his desire to have the lien paid off. However, the
direction for the estate to pay the debts does not specifically address the car lien. Therefore, a
court will likely not find that Roger intended the estate to pay the $10,000 loan on his sports car.
Harold should advise Mavis that she should not pay off the loan balance of the car from the
proceeds of Roger's estate before distributing it.
3.
The amount must be reported as income on Roger and Belinda's last tax return. Under
the Internal Revenue Code, income is defined as income from whatever source derived. More
specifically, under the tax benefit rule, when a taxpayer takes a deduction in one year that leads
to a tax benefit, and then recovers the same property that gave rise to the deduction in a later
year, the taxpayer has tax-benefit income to the extent that the deduction gave rise to a taxsavings in the prior year. Furthermore, a cash-basis taxpayer has income in the year it is
received and takes deductions in the year in which payment is made. A taxpayer is in receipt of
income whenever the property or funds have been made available to him without any restrictions
as to their use or disposition.
4
Here, Roger and Belinda received a state income tax refund check on September 15, 2012
in the amount of $1,000, resulting from an overpayment of state income taxes in 2011. The facts
further indicate that Roger and Belinda had a reduction in taxes for 2011corresponding to the
state tax deduction. As a result, the tax benefit rule applies here, and the rebate amounted to
income for Roger and Belinda, as it gave them a tax savings in the prior year. Additionally, even
though they did not cash the check, they still had access to the funds on the date they received
the check, i.e. September 15. Therefore, as cash-basis taxpayers, they will have to report the
amount as income on their last tax return for the 2012 tax year.
4(a). Harold violated the Pennsylvania (PA) Rules of Professional Conduct when instructing
Mavis about how to prepare legal documents, because it is a violation of the rules for an attorney
to assist a person who is not authorized to practice law to engage in said practice.
Mavis merely attended paralegal classes. She did not attend nor graduate from an ABA
accredited law school. Additionally, Mavis never passed the PA bar exam, which is the entrance
requirement to engage in the practice of law in PA. The facts state that Mavis is engaging in
work beyond the scope of her position as a paralegal by executing legal documents such as wills
and deeds. The fact that these documents are basic is irrelevant, they are still documents of legal
significance and therefore only an attorney has the power to execute such documents.
Harold's advice to Mavis about drafting legal documents was in violation of the PA Rules
because he was assisting her in the unauthorized practice of law.
4(b). Harold is not in violation of the Pennsylvania (PA) Rules of Professional Conduct for
providing instructional seminars for individuals who wanted to represent themselves in certain
legal proceedings, because individuals have the right to pro se representation and attorneys may
conduct educational seminars to the public. However, Harold must have merely instructed these
individuals about how to deal with their own pro se representation, and not authorized them to
act as an attorney on any other person's behalf.
5
Question No. 2: Sample Answer
1.
Mike will not be successful in his claim against Ted for negligence. The elements of
negligence are: 1) duty of care owed, 2) breach of that duty owed, 3) causation between the
breach and in the injury (but-for and proximate), and 4) damages. Under Pennsylvania law, a
landowner's duties to those on his land depends on the status of the person on the land. If that
person is a licensee, the landowner has a duty to protect against dangerous conditions known to
the landowner or of which the landowner had reason to know. If the person is a invitee, or a
person entering upon the land to confer a financial benefit to the landowner, the landowner has a
higher duty to protect against all known or reasonably discoverable dangerous conditions.
Here, Ted permitted his empty lot to be used by local residents. The status of both the
service club members and the law students playing football, which Mike was a part of, were that
of a licensee. Neither group member conferred a financial benefit to Ted and they were there
because he allowed them to be there not because Ted invited them to be there. Thus, Ted owes
the duty to protect Mike, as a licensee, against all known dangers and of those dangers of which
Ted had reason to know. Ted stated he did not know about the stakes that injured Mike and this
is supported by the fact that the service group drove them into the ground after they were
finished using the Christmas tree. Further, Ted did not have reason to know about the stakes
because he regularly maintained his lot in the one and a half years between when the stakes were
put there and when Mike was injured, by mowing the lot, and in the course of mowing, Ted
would have discovered the stakes if they were protruding up out of the ground, especially
because of the time difference between placement and injury.
Here, the stakes were driven into the ground and covered by dirt by the service group and
thus their presence was not known to Ted. Therefore, Mike is unlikely to be successful in his
suit against Ted.
2.
Pennsylvania upholds a spousal immunity privilege in civil trials as well as the
confidential marital communication privilege. However, the spousal immunity privilege only
applies when the husband and wife are currently married. Here, a confidential marital
communication privilege will prevent Ted's ex-wife from testifying about the communications
by Ted to her that he knew about the stakes protruding from the ground and that he couldn't care
less if someone got hurt by the stakes, but Mary will not be prevented from testifying as to what
she saw.
The marital communication privilege protects communications between a husband and
wife during marriage made in confidence. This privilege lasts outside of the marriage as well.
The communications that Attorney Wiley wants Mary to testify to were made when Mary and
Ted were married. They were made in confidence because Ted privately told her the
information. Even though Mary and Ted are no longer married, these confidential
communications will remain protected and Ted may assert this privilege against Mary and will
succeed.
6
The marital communication privilege does not protect communications not made in
confidence or things seen by a wife or husband. Here, Mary saw Ted cover up the stakes with
dirt to conceal them. These are not private communications between Ted and Mary and
therefore Ted's objection to Mary's testimony regarding what she saw him do will be overruled.
Since Ted and Mary are no longer married, the spousal immunity privilege is no longer
applicable to bar Mary’s testimony in a civil trial with respect to what she observed.
3.
Ann will not be successful in suing Al for serving Phil alcohol or permitting him to drive.
Pennsylvania does have a Dram Shop Act that holds licensed businesses liable for this type of
situation, but under Pennsylvania law, a social host is not liable to third parties that are injured
by a person over 21 who had been drinking at their home prior to the accident. Further, a social
host that knowingly serves alcohol to minors may be liable in certain circumstances, but
everyone at Al's home was over the age of 21.
In order to establish a negligence claim, the plaintiff must show: (1) a duty; (2) a breach
of that duty; (3) causation (factual and proximate); and (4) damages. Al hosted people over at
his house to eat and watch television. Everyone in attendance was over the age of 21 and he
provided free beer to everyone. After consuming beer at Al's residence, Phil left and negligently
caused an accident with Ann. His blood alcohol content was three times the legal limit. Ann
was severely injured as a result of this accident.
Although Phil was drinking at Al's house, Al will not be held liable under Pennsylvania
law. The law provides that a social host who serves alcohol to a person over 21 will not be liable
to third parties injured by that person. The act of serving beer is not a proximate cause of the
injury to the third parties. By serving alcohol to Phil and allowing him to drive, Al did not
breach any duty to Ann. There are no laws in Pennsylvania that make Al liable for the
intoxicated driving and harm of his social guest Phil. Al did not control Phil's actions. There is
no negligence in Al's action in allowing Phil to drive intoxicated.
Therefore, Ann will be unsuccessful if she filed a negligence lawsuit against Al for
serving alcohol to Phil and permitting him to drive.
4.
Discovery - Depositions and interrogatories
The discovery rules of PA permit a party to a suit to seek in discovery any information,
that is not privileged that is relevant and is reasonably calculated to lead to admissible evidence.
Information is relevant if it will be helpful in proving an element of a claim or defense. One
proper tool of discovery is depositions. Depositions are questions posed to a party or non-party
and answered under oath. Depositions may be taken of non-parties. However, in order to take
the deposition of a non- party, the party seeking to depose a non-party must send a notice of
deposition along with a subpoena to appear for a deposition. Absent a subpoena, the third party
is not required to attend the depositions.
In this case, Ann's attorney simply sent the opposing party and non-parities a notice of
deposition. This is not sufficient to compel the friends to attend the deposition. She must send a
subpoena along with the notice, otherwise they are not required to attend. Therefore, they need
7
not attend until they are subpoenaed and therefore compelled to attend.
Interrogatories are also a useful discovery tool. Interrogatories are sent to the opposing
party seeking the opposing party to answer the questions laid out in the interrogatories.
However, pursuant to PA Rules of Civil Procedure, interrogatories may only be requested from
parties to the action. Interrogatories may not be requested from non-parties.
In this case, the friends are non-parties. Therefore, the rules prevent Ann's attorney from
requesting the friends to answer interrogatories. In short, they are under no obligation to respond
to the interrogatories sent by the attorney.
8
Question No. 3: Sample Answer
1.
The Prosecution will be able to make a successful case of kidnapping against Jim because
he unlawfully and by force restrained Tanya, transported her a substantial distance, detained and
restrained her in a bounded area for a substantial period of time with the intent to terrorize her
and to hold her for ransom.
Under Pennsylvania (PA) law, kidnapping is defined as unlawfully restraining or
detaining another person against their will and transporting them a substantial distance or
detaining them in secret for a substantial period of time with the intent to terrorize them with
threats of violence or to request a ransom for their release.
All of the elements of a kidnapping charge are present in the case of Jim. The
prosecution should first argue that Tanya did not consent to Jim's conduct and that she was taken
and detained by force. This is clear based on the facts as she was gagged and bound and placed
in the back of his car. There is no evidence that this was something she consented to. Next, the
prosecution should argue that Jim transported Tanya a substantial distance from the original
location. In this case he transported her 30 miles, which should be argued, and the court will
likely agree is a substantial distance, especially as Tanya would have no means of escape other
than through walking to return to her original location. In addition, the prosecution should argue
that she was detained for a substantial amount of time. This argument is well supported by the
fact that she was kept in a bedroom for two days before Jim called Wilma to request ransom
money for her release.
The final element of intent to terrorize or to seek a ransom payment in return for her
release is also met in this case as both of these options are present. The prosecution can
demonstrate that every couple of hours the defendant would enter the room, with a deadly
weapon, his .357 handgun, and make threats, and as the facts state the threats were made with the
intent to terrorize her, and such threats would terrorize a reasonable person. In addition, he
requested a ransom for her release. Not only did he make a call to Tanya's friend requesting
$25,000 and threatened to kill her (if she ever wanted to see her again), but he again reiterated
the request when he instructed Wilma where to place the ransom money. It is irrelevant if he
actually got the money. It is the intent to hold a person for ransom that satisfied the requirement
for kidnapping.
Therefore, as the prosecution will be able to establish all of the elements of kidnapping
and Jim does not appear to have any defense, the prosecution would likely be successful in their
case and Jim would be found guilty.
2.
Jim's motion should be denied as the search and seizure of the gun was pursuant to a
valid search incident to a valid arrest.
The Fourth Amendment of the Federal Constitution provides that people will be protected
from unreasonable searches and seizures at the hands or direction of the government. The PA
Constitution also reiterates this protection. In order to be able to invoke the protections of the
9
fourth amendment and to bring a claim that there was an unreasonable search and seizure a
person must establish that they have a reasonable expectation of privacy in the area searched or
the property seized. The government may execute a search and seizure pursuant to a search
warrant. If the government fails to obtain a search warrant, in order for a search or seizure to be
found valid the prosecution must demonstrate that an exception to the warrant requirement
exists. If they fail to demonstrate this, then the search or seizure is unreasonable and any
evidence resulting therefrom is excluded under the exclusionary rule. A relevant exception is a
search incident to a valid arrest.
In this case, the facts state that Jim’s arrest was legal. However, the gun was not in plain
view, therefore, Jim's argument should be that the gun was in his jacket and therefore he had a
reasonable expectation of privacy in his property and therefore the police search of his jacket and
the seizure of the gun was an unreasonable search and seizure in violation of his privacy rights.
However, an exception to the warrant rule would apply: the search and seizure incident to an
arrest. Under this exception the police may search the person and the area within the person's
wingspan for weapons or evidence which could be disposed of. In this case the jacket was
immediately next to Jim. Jim reached for the jacket when the police entered. In addition, while
one of the police officers was beginning to handcuff him he was not completely restrained and he
could still have attempted to access his jacket and grab the gun. Therefore, as the arrest was
valid, the police have a right to search a person and the area within their immediate wingspan.
As the jacket was within this area, the search and seizure was legal and the evidence should not
be suppressed.
3.
In order for the content of Jim's telephone conversation with Wilma to be admissible into
evidence, the telephone conversation and Jim's voice must be properly authenticated. Under the
Pennsylvania Rules of Evidence, all evidence that is relevant is admissible unless an
exclusionary rule keeps it out. Evidence is relevant if it tends to make a material fact more or
less probable. Although evidence is relevant, it still may be excluded if the probative value of
the evidence is outweighed by any unfair prejudice or confusion of the issues. In addition,
evidence must be properly authenticated before it is deemed admissible. That is, the proponent
of the evidence must show that the offered evidence is what the proponent claims it to be. The
party offering the evidence must lay a proper foundation for the admissibility of evidence. In the
case of identification of an individual voice as heard by another who will testify, the party must
demonstrate that the individual who will testify is familiar with the voice of the person who that
party claims it to be. The proponent must demonstrate that the individual who will testify has
not become familiar with the other’s voice specifically for the purposes of litigation.
Here, the facts indicate that the prosecution is attempting to introduce the telephone
conversation between Wilma and Jim. In order for the conversation to be admitted, it must be
properly authenticated. The prosecutor must demonstrate that Wilma has on occasions prior to
the present case, heard Jim's voice before and can properly identify his voice. The facts further
indicate that Wilma recognized Jim's voice when they spoke on the phone during the kidnapping
because Wilma had been in his company on many occasions where she heard him speak.
Further, Wilma has spoken with Jim on the phone a number of times in the past. These are the
facts that the prosecutor must establish to lay the proper foundation to demonstrate that Wilma
has sufficient knowledge of Jim's voice to properly authenticate and identify the telephone
10
conversation. In addition, the prosecutor should argue that the fact that the number Wilma called
was the number assigned to Jim by his cell phone company may be used as circumstantial
evidence, along with the proper foundation being laid described above, that Wilma's
conversations were with Jim and should be admitted.
4.
The ATV and the antique table are not marital property and therefore they will not be part
of the equitable distribution between Jim and Emily.
Marital property is all property acquired during the marriage, unless an exception applies
to prevent it from becoming marital property. Property that is acquired during the marriage as a
gift to one spouse, or through bequest, is excluded from marital property even if acquired during
the marriage. If property that falls within an exception is traded or sold in exchange for other
property, the court will trace the value of the property sold or exchanged and the new property
acquired will also not be marital property.
In this case, the gift that Jim received in 2011 would not be considered to be marital
property because it was a gift from his uncle only to him, not to Jim and his wife. Therefore the
exception to the general rule for property acquired during marriage applies, and the antique table
would not be included in the equitable distribution.
Likewise the money from the aunt would also not be marital property as it was given by
bequest, another exception to the general rule. Although Jim then purchased the ATV, due to the
principle of tracing the ATV would also be considered non-marital property.
And finally as neither of the property increased in value, the increase of which would be
considered marital property, Emily has no right to any part of these two pieces of property.
11
Question No. 4: Sample Answer
1.
PAP has organizational standing to raise the claims of its members as set forth in the
complaint.
An organization has standing to bring suit on behalf of its members when any member
could sue on the injury individually, the cause of action is germane to the purpose of the
organization, and there is no reason to require the members to take part in the suit as individuals.
An individual has standing where there is an injury in fact fairly traceable to the defendant that
can be redressed by the court. Here, as the individual PAP members were arrested for trespass at
the request of the manager of VV, they have suffered an injury in fact traceable to the defendant
that could be redressed by the court.
PAP has standing to sue for its members because although they could sue individually as
described above, the cause of action is germane to the purpose of the organization. PAP is an
organization that advocates and protests against child pageants, which is precisely what the
individuals were doing when they were arrested for trespass. Additionally, because PAP is
seeking declaratory and injunctive relief rather than damages, there is no reason to require the
PAP members to file suit as individuals.
Because the injury is related to the purpose of PAP as an organization, the members
could sue individually, but they need not do so since money damages are not being sought, PAP
will have standing as an organization to assert the rights of its members.
2.
Valhalla should argue that PAP has not been denied rights under the First Amendment to
the Federal Constitution because VV is not a state actor. The court should grant VV's motion for
summary judgment because there are no issues of material fact remaining, and Valhalla is
entitled to judgment as a matter of law.
The First Amendment to the United States Constitution grants individuals the right to
freedom of free speech and expression. Under the First and Fourteenth Amendments, the federal
government and state governments cannot infringe on the right to free speech. However this
prohibition applies only to state actors, and only grants freedom of speech and expression in
public places. A private actor may limit speech on his own property without violating the First
Amendment.
Valhalla should argue that it is not a state actor and that a shopping mall is not a public
forum or designated public forum because it is private property. PAP might argue that because
there are no signs at VV prohibiting protestors, and residents use the VV to walk for exercise in
bad weather, that VV is a public forum. However this argument will fail because
notwithstanding the fact that VV allows the public onto its premises during the day during
business hours, the mall is private property.
A court will evaluate a motion for summary judgment in the light most favorable to the
non-moving party, and will only grant the motion if there are no remaining issues of material
12
fact, and the moving party is entitled to judgment as a matter of law. The court should grant
Valhalla's motion because VV is not a state actor and the mall is private property rather than a
public forum or limited public forum.
The fact that the police removed the PAP members is immaterial. The police were
enforcing private property rights exercised by VV after its management had warned the
protestors at least twice to stop. The exercise of its property rights was in accordance with its
general practice to consider protests to be disruptions to the commercial operation and prohibit
them.
3.
Philip can establish his prima facie case, by showing the disparate impact the exam is
having on African American applicants for promotions in the police force.
Under Title VII, a person alleging racial discrimination against a group may bring a
systemic disparate impact claim after going through the appropriate filing procedures with the
state. Systemic disparate impact can be used to show the impact of a facially neutral policy on a
certain protected class. Intent need not be shown. The person asserting the claim must show he
is in the protected class. He must then show that the facially neutral requirement or policy
disproportionately affects members of that class, and that he was also impacted by the disparity.
The plaintiff can show this by using statistics demonstrating the impact on the protected group.
The EEOC rule for statistics of this sort states that if a protected class benefits under a policy in
an amount less than 80% of the benefit of a non-protected class, disparate impact may be
presumed.
In this case, Philip is a member of a protected group as an African American. He is
personally impacted by the alleged disparity because he did not receive a promotion after taking
the police's required exam for promotion. The policy here is facially neutral, it is an exam that at
first appearance should have no impact against a person of a certain race. Because it is neutral,
Philip can demonstrate the adverse impact by using the incredibly skewed test results by race as
statistics. The race statistics here show that African Americans are severely disadvantaged by
the test. The group of people taking the test was split 50/50, but only one African American
individual scored highly enough to be promoted, while 20 Caucasian officers were promoted.
This is much less than 80% of the rate of promotion for Caucasian officers, and so Philip will be
able to use these numbers to establish his prima facie case.
4.
To defend against Philip's disparate impact claim, the police department must show that
its test is job related and consistent with business necessity. Philip must then show that the
police department failed to adopt a less discriminatory alternative to prevail on his disparate
impact claim.
After Philip establishes a prima facie case of disparate impact discrimination under Title
VII, the employer can defend against the suit by offering sufficient evidence that shows that its
test was job related and consistent with business necessity. The employer can do this by offering
evidence of the research that it conducted into the questions and how the questions on the exam
relate to the duties of a promoted officer and the qualifications needed to succeed as a promoted
officer.
13
To rebut such evidence, the plaintiff must offer evidence that the employer failed to adopt
a less discriminatory alternative that would serve the employer's needs just as well.
Here, the police department can defend against Philip’s claim if it offers sufficient
evidence that the promotion exam is job related and consistent with business necessity. The
department should seek to connect the questions on the exam to key skills and knowledge needed
to succeed in the promotional position. If the department sought help from an outside
organization to assist it with developing the test and keying it into testing what was necessary for
the job, such evidence is strong proof that the test is consistent with business necessity and job
related. To rebut any such evidence of job relatedness and business necessity, Philip will need to
offer evidence that the department failed to adopt a less discriminatory alternative. He could
argue, for example, that it would have served the department's needs to promote the right
individuals just as well through a formal interview process or a review of an individual's work
record rather than a test. Accordingly, the department and Philip should make the above
arguments in Philip's disparate impact case.
14
Question No. 5: Sample Answer
1.
Warren's deed created a life estate in Amy, a vested remainder in fee simple in Bob
subject to complete defeasence by a shifting executory interest in Megan.
A life estate is an estate for the duration of the grantee's life that does revert to another
grantee upon the death of the life tenant. A vested remainder in fee simple requires an
identifiable taker and gives them the most alienable estate possible, the fee simple, but a
condition on the vested remainder which would transfer the estate to another directly from the
vested remainderman would be a shifting executory interest in Megan.
Amy was granted an estate that terminated "upon her death." This is a life estate since it
is only as long as Amy's life. "To Bob and his heirs" creates a vested remainder in Bob in fee
simple. However, "but if Bob dies without children surviving him, then to Megan and her heirs,"
makes Bob's estate subject to complete defeasance and would shift from him to Megan
automatically, which is known as a "shifting executory interest." If it went back to the grantor it
would be known as a springing executory interest. Therefore, Warren's deed created a life estate
in Amy, a vested remainder in fee simple in Bob subject to complete defeasence by a shifting
executory interest in Megan.
2(a). Amy can obtain specific performance of the contract because, when the contract for the
sale of Greenacre was signed, under the doctrine of equitable conversion the risk of loss shifted
to Megan.
When a land sale contract is signed, the doctrine of equitable conversion shifts the risk of
loss of the property from the seller to the buyer. The buyer holds equitable title while the seller
holds legal title to the property. If a buyer refuses to close on a land sale contract on the basis
that a property was destroyed, the seller can compel specific performance of the contract because
the risk of loss passed to the buyer upon the signing of the contract. The seller's ability to obtain
specific performance is conditioned on the fact that it can convey marketable title at closing.
Title is marketable if it is free from competing interests and encumbrances.
Here, Amy and Megan signed a written contract for the sale of Greenacre prior to the
home's destruction by lightning. When the contract was signed, the risk of loss for the property
therefore passed from Amy to Megan. If Megan refuses to close on Greenacre, Amy can obtain
specific performance of the contract for Greenacre because she had no obligation other than to
deliver marketable title to Megan at closing. Because there is no indication that Greenacre's title
was not marketable (e.g., there were no encumbrances on the property), Amy should succeed in a
suit to obtain specific performance.
2(b). Amy has no right to the insurance proceeds from the policy on the house because Megan
is entitled to them as the equitable owner of Greenacre.
To insure property, one must have an insurable interest in it. Between the signing of a
land sale contract and closing, both the seller and buyer have an insurable interest in the property
15
because one holds legal title while the other holds equitable title. If the seller has taken out an
insurance policy on the home but the buyer has not done so, insurance proceeds from a loss of
the property that is covered by the seller's insurance policy goes to the buyer as holder of
equitable title.
Here, Amy could continue to insure Greenacre until closing because she retained an
insurable interest in it under the aforementioned doctrine of equitable conversion. Amy cannot,
however, retain those proceeds because Megan, the buyer, is entitled to them as holder of
equitable title to the property. Accordingly, Amy has no right to the proceeds.
3(a). Warren originally retained an easement appurtenant after conveying Blackacre to Bob
while reserving ingress and egress to Whiteacre owners.
Under PA law, an easement is a non-possessory interest in the usage of another's land.
One type of easement is an easement appurtenant which allows a dominant tract owner the usage
of an adjacent servient tract. Easements may be created under PA law, by prescription,
implication, necessity or grant. In relevant part, an easement may be created by grant where an
individual owns two parcels of land but in writing in conveying one of the parcels expressly
provides for usage of the servient tract.
Here, Warren divided owned parcels of land but reserved in the deed to Bob an easement
appurtanent for Whitacre's use. Warren conveyed Blackacre, originally a parcel owned by
Warren, to Bob with :"the right to use an unimproved road on Blackacre for ingress and egress to
Big Bear Lake. This conveyance created an easement appurtenant as Whiteacre occupants were
enabled to use the land to travel over the servient tract Blackacre. As a writing expressly created
by Warren the grantor, this created an easement appurtenant non-possessory interest for Warren.
3(b).
Following Bob's conveyance, Warren does not have a cognizable interest.
Under PA law, an easement may be extinguished upon merger of the dominant and
servient parcels.
Here, Bob's conveyance to Warren created a single parcel. The re-conveyance did not
expressly reserve the easement. Therefore, as the parcels merged the easement was extinguished
and Warren has not retained any interest in the parcel.
4.
College can use the doctrine of promissory estoppel to enforce Warren's pledge to pay for
the new scoreboard. It can use this theory to recover its reliance damages of $175,000.
A valid contract requires offer, acceptance, and consideration. There is consideration if
there is a bargained-for detriment or benefit.
A promise to bestow a gift on someone else lacks consideration and is typically
unenforceable. Such a promise, however, is enforceable if the doctrine of promissory estoppel
applies. Promissory estoppel will enforce a promise that lacks consideration if (1) there was a
promise; (2) the promisor would reasonably expect the promise to induce reliance on it by the
16
promisee; (3) the promisee in fact relied on the promise to his detriment; and (4) injustice can
only be avoided by enforcing the promise. When a promisee succeeds on a promissory estoppel
claim, the promisee is generally entitled to his reliance damages.
Here, Warren's promise to the College lacked consideration because Warren offered to
make a gift of five million dollars for a Jumbotron to College. It is enforceable, however, under
promissory estoppel. First, there was a promise made by Warren that he would give College $5
million to build the Jumbotron. It is reasonably foreseeable from someone in Warren's position
to expect the College to take steps to prepare for installing the Jumbotron by conducting, for
example, engineering studies given that Warren's promise would provide them with the funds
necessary to build the Jumbotron. The College also relied in fact on the promise because it spent
$175,000 on engineering studies, architectural fees, and other construction expenses based on
Warren's promise. Further, injustice can only be avoided by enforcing the promise because the
College incurred significant expenses that it would not have so allocated absent Warren's
promise to give $5 million. Accordingly, the elements of promissory estoppel are satisfied to
enforce the promise to the extent needed to avoid injustice. Because College incurred $175,000
in damages by relying on Warren's promise, the College will recover this amount in reliance
damages.
17
Question No. 6: Sample Answer
1.
Lauren should file a direct action against Brad and Brian based on Brad and Brian's
violation of the fiduciary duty that they owed her as a shareholder.
Majority shareholders have a fiduciary duty to minority shareholders. A majority of
shareholders breach this duty by freezing out a minority shareholder for their own personal gain
such that the minority shareholder is deprived of her share of the benefits of the corporation. A
shareholder who is so freezed out can bring a direct action to obtain relief from the court for
damages caused by the freeze-out. Shareholders also have a right to inspect a corporation's
books and records that cannot be denied unless the shareholder does not seek to review the
records for a proper purpose.
Here, Brad, Brian, and Lauren were all shareholders of Wood and therefore owed each
other a fiduciary duty. Lauren should assert in a direct action that Brad and Brian violated the
fiduciary duty that they owed her that resulted in harm because, together, they constituted a
majority of the shareholders and used this power to freeze Lauren out of the company. They
froze Lauren out of Wood and thereby breached their fiduciary duty to her by removing her from
the Board of Directors, firing her as secretary, and enacting a bonus program for the sole purpose
of preventing Lauren from receiving further funds from Wood - her share of the benefits of the
corporation. Accordingly, Lauren should bring a direct action against Brad and Brian based on
the breach by Brad and Brian of the fiduciary duty that they owed her as a shareholder because
Brad and Brian's actions froze Lauren out to the point that it has deprived her of her share of the
benefits of Wood and they have also deprived her of her right as a shareholder to access
information about Wood.
2.
If Lauren defaults with Bank, Bank can exercise its right to receive her Wood shares and
Wood would be required to deliver a new stock certificate to Bank.
Directors may validly agree to place restrictions on the transfer of stock. Issues may arise
when one of the shareholders tries to transfer her stock to a third party via a contract. If a party
to a contract has notice of the stock transfer restriction, and that party takes the shares anyway,
then that transaction is invalid. However, if the party to the contract does not have notice of the
stock transfer restriction, and that party takes the shares, then that transaction is valid, even if it
goes against the stock transfer restriction.
The articles and bylaws of Wood did not restrict the transfer of shares. However, the
directors entered into an agreement requiring any shareholder wishing to transfer his or her
shares to first offer the shares to Wood under the terms of any third party offer. The Smiths and
Wood all signed this agreement. Lauren subsequently obtained a personal loan from Bank while
she was still a shareholder in Wood. As collateral for the loan Lauren pledged her shares in
Wood. If Bank had notice of the stock transfer restriction, then Bank would not be entitled to the
shares. However, if Bank did not have notice of the stock transfer restriction, then Bank would
be entitled to the shares. Here, Bank did not have notice. Wood never placed a legend noting
the restriction agreed to by the directors on the share certificates issued to the Smiths. Nor did
18
the Smiths amend the bylaws or articles of incorporation to reflect their agreement. Thus, when
Lauren gave a copy of her Wood stock certificates along with Wood's articles and bylaws, there
was nothing in either document that mentioned the stock transfer restrictions. Bank could not
have had notice because the documents it received did not contain any mention of the stock
transfer restriction. Because Bank had no notice, Bank may exercise its right to receive Wood
shares and Wood would be required to deliver a new stock certificate to Bank.
3(a). Under the UCC, the contract between Wood and Stoves is enforceable despite the lack of
a specific quantity term.
The UCC requires a quantity term in each contract for the sale of goods in order for that
contract to be enforceable. However, the UCC also provides that requirements contracts which
do not state a specific quantity term, but which state that the buyer will purchase all that it
requires from the seller, are valid. In addition, output contracts which do not state specific
quantity terms, but which state the seller will sell all that it produces to the buyer, are also valid.
Here, Wood and Stoves entered into a contract for the sale of wood pellets. As a sale of
goods, this contract was covered by the UCC. Stoves and Wood entered into a contract in which
Stoves would buy all wood pellets that Wood produced. Thus, they entered into an output
contract. Stoves agreed to purchase all of the goods that the seller produced. As such, a specific
quantity term beyond that stated was not required.
3(b). Stoves is not required to purchase all of the wood pellets produced when Wood's
production capacity increases.
Under the UCC, a requirements contract and an outputs contract are subject to a
limitation. Because they do not specify a specific quantity, the buyer in a requirements contract
cannot request substantially more product than previously ordered. Similarly, a seller in an
outputs contract cannot force the buyer to buy substantially more product than it previously
produced. The changes in quantity must be made in good faith and must not represent a
disproportionate amount from that which had previously been ordered or delivered.
Here, unbeknownst to Stoves, Wood made a deal to purchase a competitor. The
purchase, closing in a few days, will result in Wood's production capacity being increased
fivefold. Under the UCC, Wood will not be able to compel Stoves to purchase 5 times the
amount it had previously produced in wood pellets. This would breach the contract because it
would be unreasonably disproportionate to the quantity previously produced by Wood.
4.
Wood should assert a claim against Techs under the UCC as a result of the inadequacy of
the server for breach of an express warranty.
After a party accepts an order, the party can no longer reject the goods. However, a party
may be able to revoke its acceptance. A party has a right to inspect goods upon delivery to
ensure that they are the goods that were contracted for and to ensure that they function properly.
Paying for the goods in advance of inspecting them does not waive the ability of the party to
inspect the goods when they are actually delivered. An express warranty may arise in a contract
19
when the seller makes an affirmation that promises that the product will work in a certain way.
Express warranties are very difficult to disclaim. An express warranty may arise upon delivery
that, if breached, allows the non-breaching party to revoke his acceptance upon discovering the
defect warranted against.
Here, Brad ordered a new server for Wood's computers to handle the anticipated
expansion. Brad met with Computer Techs, a seller of servers, seeking a server that would be
compatible with Wood's existing computers. Without saying anything else, Techs recommended
the Server 2000. Brad signed a purchase agreement for a the Server 2000, paid in full, and Techs
was to deliver in two weeks. Just because Woods paid in full did not mean that Wood would not
be able to inspect the server when it was delivered. The server was delivered and before it was
installed, Brad called Techs to confirm that it would work with Wood's existing computers.
Tech's representative assured him over the phone that the Server 2000 "would absolutely and
completely work with Wood's computers." This was an express warranty. It was an affirmation
made by the seller's agent that its product would work in a certain way. Wood had the right to
rely on this express warranty. After one week of use, Brad determined that the Server 2000 was
incompatible with Wood's computers and was irreversibly corrupting files on Wood's computers.
Thus, this malfunction operated as a breach of Tech's express warranty to Wood. Techs had
made an express warranty before Wood installed the server that the server would work with
Wood's computers. However, after 1 week, it was apparent that this affirmation had been false
and that the servers were damaging Wood's computers. The fact that the express warranty arose
after the goods were delivered does not affect the analysis because the warranty was made before
Wood inspected the goods during a time when Wood could still revoke his acceptance after
trying the goods and ensuring that they worked as expected.
20