Editor’s Note: These answers to the essay questions on the July 2009 bar examination were drawn from passing candidates who earned very high scores on the essays selected. They have been transcribed as submitted by the candidate and may contain misspellings, grammatical errors, misstatements of law or fact and erroneous conclusions. They are not to be construed as model answers, nor are they in any respect the work of the Board of Bar Examiners.
QUESTION NO. 1 — TORTS
Joe, a former Wall Street investment banker, recently opened his own financial planning firm. He was licensed to sell securities, but this license lapsed due to his failure to pay the renewal fee. State law requires that all persons who sell publicly traded securities be licensed.
Joe often had dinner with his parents at their country club, hoping to meet new clients. They introduced Joe to their dear friend Sally, a wealthy widow. During dinner, Sally complained that she needed to earn more interest on her investments and asked Joe for suggestions.
Joe had just made a deal with M Fund to receive a 20% sales commission, which was much higher than the 5% offered by other funds. Joe told Sally, “Many of my clients and even my parents have invested in M Fund and are very happy with their consistently high returns. You may want to look into this to get high interest on your money.”
In fact, Joe’s parents had never invested in M Fund. Joe would not let them, since after researching the fund, he was very concerned that the reported results were not possible and may even be inaccurate.
Over the next week Sally asked other friends about M Fund, and all confirmed they were happy with the reported high returns. She asked her longtime accountant, and he warned her about the risks of a private fund. But Sally was desperate to earn more interest, so she called Joe to say she wanted to invest in M Fund.
Joe had Sally complete a financial statement to be certain she qualified for the private fund. She completed the application showing a net worth of $1.5 million, and she gave Joe a check payable to M Fund for $1 million. Joe did not question her about her other sources of income or investment experience.
Sadly, 5 days after Sally’s check for $1 million cleared, the M Fund filed for bankruptcy. The fund showed high returns for the past 10 years, but only because it was a fraudulent scheme. Sally lost her entire investment.
Sally comes to your office and wants to sue Joe. She is already part of a class action that is suing the M Fund.
Your senior partner asks you to prepare a memorandum of law to discuss her causes of action against Joe and any defenses he may raise.
PREPARE THE MEMORANDUM
TORTS — SAMPLE ANSWER A
To: Senior Partner
Date: July 30, 2009
Re: Sally v. Joe
You have asked me to discuss any causes of action Sally may bring against Joe and any defenses he may raise in response. The first addresses potential cause of action in tort and the second part assesses Joe’s defenses.
I. Sally’s causes of action
Sally’s strongest claim against Joe is for misrepresentation. She should raise an intentional misrepresentation claim first, but in the alternative, she may have a claim for negligent misrepresentation. I will discuss each in turn.
In New Jersey, under the common law, intentional misrepresentation (or fraud) consists of six elements to state a prima facie case and survive a motion to dismiss. First the defendant must have made a Statement of material fact. This means the Statement must be of some relevance and not collateral to the injury. Next, that statement must be false. Fraud requires scienter, or knowledge, that the statement was not true. Scienter also is satisfied if the statement was made recklessly, meaning without regard to the truth or falsity of the statement. So, scienter is satisfied with knowledge of reckless conduct. Fourth, the statement must be intended to induce reliance on it. Intent is subjective and refers to the speaker’s state of mind when made. The statement must then actually induce the intended reliance on the part of the plaintiff. Reliance must be justifiable in that the plaintiff cannot meet this element if the statement was obviously intended to be false or made in jest. Finally, there must be damages — some stated injury to the plaintiff.
Sally meets all of the elements for an intentional misrepresentation claim. First, Joe made a material statement of fact. He told her that “Many of (his) clients and even his parents have invested in M Fund.” He told her they “are very happy with their consistent high returns.” In fact, this statement was false. His parents have never invested in M Fund because he would not let them. Joe was aware of the risks involved with investing in that fund and suspected something was awry with the fund. He nonetheless represented this as a promising investment to Sally. Thus, Joe meets the scienter requirement — he made the representation knowing it was false. He intended to induce Sally’s reliance on his statement. He received a high commission for sales to M Fund, so that was his intent. Sally did, in fact rely on that statement. She inquired about the funds with others and finally made a decision to invest in the fund. The fifth element is met. Finally, Sally suffered injury — she lost $1 million or 2/3 of her net worth on this investment when M fund went into bankruptcy. Sally is already part of a class action against M Fund but she may additionally bring this claim against Joe as her financial planner.
In the case that Joe is able to successfully argue that he did not have scienter (see defenses below), Sally can, in the alternative, argue Joe is liable for negligent misrepresentation. For this cause of action the same elements are required as for intentional, but without the knowing or reckless requirement. Sally can again argue that Joe made a statement that was false, and he made it negligently (not knowingly). This representation was intended to induce Sally’s reliance, which it did, and it caused damages to Sally. Sally can argue it was made negligently because he may have negligently assumed people are “happy with their returns” on M Fund since it had showed consistently high returns for the past ten years. If that is the part of the statement on which Sally relied, then she can argue for negligent misrepresentation.
A separate COA Sally can raise is negligence on the part of Joe in acting as her financial planner. A negligence claim under New Jersey law requires 4 elements be satisfied: (1) duty to plaintiff; (2) breach of that duty; (3) causation and (4) injuries. The duty is satisfied in one of two ways. The defendant, who holds himself out to be a professional must act like a prudent person in a like position. In the alternative, state laws and regulations can step into the duty element by setting a standard of care. This is called negligence per se and arises when the plaintiff is a part of the class of persons intended to be protected by the law and the harm suffered is of the type of harms that the law seeks to prevent. Second, when defendants’ duty falls below either standard, he is in breach of duty. There is causation when 2 prongs are satisfied: (a) but for the breach of duty, P would not have been injured, and (b) the harm was foreseeable or the breach was the proximate cause of the injury. Lastly, any economic injury will count as an injury.
Sally can bring a negligence claim against Joe under both standards. First, she can argue that Joe held himself out to be a professional — a financial planner and so he was expected to act like a reasonably prudent investor. When he lied to her about his parent’s investment and concealed the level of risk involved with M Fund, he reached that duty. If it was not for him even alerting Sally about the existence of this fund, she would not have invested in it. Investing in a fraudulent scheme is going to create the foreseeable risk of injury of losing one’s investment. Causation is satisfied. And, we know Sally lost a substantial sum or money, hence she was injured.
In the alternative, Sally can argue that negligence per se applies here because Joe violated a state law requiring all persons who sell publicly traded securities be licensed. Joe was not licensed to sell securities in M Fund, yet he did to Sally anyway. The law is likely designed to prevent people like many from making or selling bad deals to persons without the qualifications. The harm from making bad investments is expected to be financial loss. Thus, the standard set in the state law was violated and it was intended to both protect persons like Sally and the type of harm she suffered. So, negligence per se applies and Sally satisfies the duty and breach of duty elements causation and injury, as discussed, is also satisfied.
II. Joe’s defenses.
Joe’s strongest defense to Sally’s intentional misrepresentation claim is that he did not have scienter. He can argue the part she relied on was that people were happy with their investments and he did not make the statement knowingly or recklessly. He did not think it was false at all since people had strong returns. In any event, as a defense to both negligent and intentional misrepresentation, he can say the statement was true and therefore Sally does not meet the prima facie elements. Of course, he will have to defend by saying the actual false statement — that even his parents invested in that fund, did not intend to nor actually induced reliance. It was not material to the decision to invest; it was merely puffery and collateral.
Joe can say he did not have a duty to Sally and therefore he cannot be liable to her for negligence. He met Sally at his parents country club — not exactly the place where one expects to make business deals or financial planning. He did not hold himself out to be a professional to Sally; only as someone who had a recommendation for Sally. After all, she is the one who raised her money problems. Joe did not solicit her. All of these facts tend to show that he had no duty to her and any subsequent injury is her own. Sally can be contributorily negligent because she is also expected to act like a reasonably prudent, wealthy (investor) and the facts indicate she did inquire about the fund. Any losses that results, Joe will argue, are a result of Sally’s assumption of the risk.
There are 2 strong COA for Sally and Joe has viable defenses. These are questions for the jury.
TORTS — SAMPLE ANSWER B
To: Senior Partner
Re: Sally’s Causes of Action Against Joe
In addition to her class action law suit against M Fund, Sally may file the following causes of action against Joe:
First, Sally may claim that Joe made an intentional and/or negligent misrepresentation of material fact. To prove this claim under the intentional standard, Sally will have to show that: Joe made a false statement of fact to her, the false statement was material to the discussion between them, she relied on this statement, this statement induced her to take a certain action, and Joe had the specific intent of making this false statement for the purpose of Sally’s reliance and action thereon. Here, the facts clearly show that Joe told Sally that she should invest in M Fund because his parents had done so and they were please with the investment when, in fact, he knew that his parents had not done so because he would not let them as it seemed like it might be a poor investment. This constitutes a false statement of fact. Further, the false statement was material because the discussion between Sally and Joe specifically regarded investment in M Fund. It also appears from the facts that Joe made the false statement with the intent that Sally rely on it because he stood to receive a 20% sales commission, which was far more than the 5% offered by other funds. Sally may have trouble proving that she relied on Joe’s false statement and it induced her to invest in M Fund because the facts show that Sally consulted other persons, including her accountant, who warned her of the risks of investment. As such, Joe may argue in defense that his false statement was mere sales “puffing” that is typical and inherent in the sales profession and did not amount to a misrepresentation of material fact that Sally relied on and took action on account of it. He may further argue that Sally did not rely on his statements, but those of her friends who had invested in M Fund and were pleased. Joe may also defend more generally on the bases listed below in the “Defenses” section. Finally, Sally certainly suffered damages because she lost her money in the investment. If she proves this claim, she may further be able to recover punitive (punishment) damages against Joe for his conduct, because it was intentional. In conclusion, this claim is still worth asserting in our Complaint because through Discovery, we may be able to prove the elements that are not as strong at this point.
Second, Sally may claim that Joe made a negligent misrepresentation of material fact to her. The elements of this claim and analysis thereunder would be the same as those already set forth, with the exception that, instead of proving that Joe had specific intent of making a false statement for the purpose of Sally’s action and reliance thereon, Joe was simply negligent in doing so. To prove negligence, Sally will have to show: duty, breach, actual (factual) cause, proximate (foreseeable) cause and damages. The applicable standard for Joe’s duty would be to act as a reasonably prudent investment banker in his community. It appears that Joe did not act as a reasonably prudent investment banker here, because such a professional should not make false statements of material fact to a potential investor. It also seems reasonable to expect that an investment banker did or should have known that any misstatement of material fact regarding a potential investment to a client may cause the client to rely on it and act. To prove actual cause, Sally will have to show that “but for” Joe’s misrepresentations, she would not have lost her investment. Certainly, the facts show that Sally lost her money in the investment that she made; however, Joe may argue in defense that Sally relied not on him, but on her friends who also invested in M Fund and told her they were happy with their investments. To prove proximate cause, Sally will have to show that she was a foreseeable Plaintiff within the zone of danger of Joe’s breach of duty. It seems reasonable here that Joe should have been able to have foreseen that, if he made a misstatement of material fact to Sally, she would rely on it, act, and suffer a loss. To prove damages, it will be sufficient for Sally to show that she lost her entire investment, which the facts make clear. Joe may also defend more generally on the bases listed below in the “Defenses” section.
Third, Sally may be able to make a claim against Joe in negligence per se for practicing his profession without a valid license and/or generally, for malpractice. As noted, to prove negligence, Sally will have to prove duty, breach, actual (factual) causation, proximate (foreseeable) causation and damages. The standards and analysis here will be similar to that already set forth, except that Sally will have to show that Joe did not act as a reasonably prudent investment banker by not having a license. Professionals are reasonably deemed to follow the procedures proscribed by law. Negligence per se results when there is an applicable statute that is designed to protect a certain class of persons, the plaintiff is in that class of persons, the defendant violates the statute and the harm that results is the type that the statute is designed to protect. Here, there certainly is a statute that requires Joe to be licensed as an investment banker, and he clearly violated the statute by not having a license. Although the facts don’t specify, it certainly also seems that the purpose of this statute would be to protect a person like Sally from improper advice from an investment banker. It also seems that the statute is designed to prevent the harm that occurred here — the plaintiff making a bad investment and losing money based on reliance on an individual who did not meet the minimum standards of competency. Joe may argue that the statute is designed not for this purpose, but for another purpose, such as administrative knowledge of investment bankers in the state. Such an argument is poor. Joe may also defend more generally on the bases listed below in the “Defenses” section. As such, Sally has a strong claim on this basis.
In addition to the arguments listed above, Joe may defend that he had Sally’s consent to make her investment — he did not do so under duress, embezzlement, false pretenses, etc. He may argue that Sally assumed the risk inherent in investments because she knew, from her accountant who warned her, of the risks associated with the investment, and she voluntarily chose to proceed. Such a defense may bar Sally’s claim if proven. Or, he may argue that Sally was contributorily negligent by proceeding to invest despite the risks inherent and those that she was aware of. If he so proves, his liability may be limited by the percentage that can be attributed to Sally’s negligence by the finder of fact. He may also seek contribution and/or indemnity from M Fund, under the argument that it was M Fund’s bankruptcy and/or fraudulent scheme that caused Sally’s loss — not his misrepresentation and/or failure to have a license. He may argue that this constituted a superseding cause of Sally’s loss. If he so proves, he may be relieved from liability in whole or in part. Finally, he may try to intervene into the class action in order to have all claims related to this transaction resolved under the same action. This may be difficult, however, because it appears that only Sally, and not other class members, worked with Joe in making investments with M Fund.
QUESTION 2 — PROPERTY
Owen owns Lot 1, a commercial property. Several years ago Owen entered into a ten-year lease of Lot 1 with Terry. After nine years, Terry orally agrees to transfer his interest in the lease to Spenser. Terry tells Spenser if Spenser fails to pay the required rent, Terry will “take back the property.” Spenser pays the required rent to Owen for six months. Then Spenser refuses to pay any more rent because electrical and plumbing repairs need to be made to the building.
Owen tells Terry and Spenser he is not happy with the transfer made by Terry to Spenser because “my deal is with Terry.” Owen reminds them the lease requires the tenant to make all electrical and plumbing repairs. Further, Owen demands payment of the current rent along with unpaid rent from the eighth year of the lease.
Owen resides on Lot 2. The adjacent lot (Lot 3) is under construction. Owen is irritated by the noise from the construction machinery and the debris that blows onto Lot 2. Further, after paving is done on Lot 3, Lot 2 starts experiencing water runoff that pools on Lot 2. Last week Owen saw a crane on Lot 3 swing onto Lot 2 and come within 2 feet of Owen’s house.
Owen retains your law firm. With respect to Lot 1, he wants to know all the potential causes of action he has against Terry and Spenser. With respect to Lot 2, Owen wants the construction stopped.
You are asked to prepare a memorandum outlining all of Owen’s potential causes of action, all defenses that will likely arise, and the probable outcome of each cause of action.
PREPARE THE MEMORANDUM
PROPERTY — SAMPLE ANSWER A
To: Law Firm
Date: July 30, 2009
Re: Owen’s causes of action for Lots 1 and 3
Per your request, I have analyzed Owen’s causes of actions and the opposing parties’ possible defenses for Lots 1 and 3. The first part of this memorandum will discuss causes of action and defenses with respect to lot 1 and the second part will discuss the ability to stop construction on lot 3.
1. Was there a valid assignment or sublease between Terry and Spenser?
The first issue is whether Terry could assign or sublet his remaining interest in lot 1 to Spenser. The common law favors alienability of property and therefore allows a lease to be assigned or subletted when the written agreement does not provide otherwise. Parties can agree to limit assignments and subleases and a landlord can require the tenant to get his written consent prior to assigning or subletting the property. In this case, the facts do not discuss whether the lease agreement restricted assignments or sublets. If it did not, then Terry was free to assign/sublease Lot 1 to Spenser.
The next issue is whether this was an assignment of a sublease. This issue is important because it will determine who Owen can hold liable. When a property is assigned, the landlord is considered to be in privity of estate with the new assignee. In an assignment the landlord also remains in privity of contract with the assignor and the assignor remains liable on the property. An assignment occurs when the assignor transfers all of her remaining interest to another party. On the other hand, a landlord is not in privity of contract or estate with a sublessee and only the sublettor can be held liable to the landlord. The sublessee will be liable to the sublettor, but not the landlord. A sublet occurs when the sublettor transfers only part of his remaining interest to a third party.
In this case, the issue is whether Terry retaining her right to “take back the property” renders the assignment a sublease as opposed to an assignment. Terry transferred his interest in the lease to Spenser. Nine years on the ten year lease had already expired and thus it seems like Terry had no intention of returning to the lot. However, Terry retained her rights to the lot and therefore this is a sublease and not an assignment. Terry cannot avoid liability to Owen. Accordingly, Owen can only hold Terry liable and not Spenser. Spenser will use this as a defense if Owen brings a cause of action again him.
Another issue is whether the sublet was a valid transfer of land. According to the statute of frauds, all transfers of land, including leases must be in writing, otherwise they are not enforceable. Spenser could attempt to use this defense. However, the lease was not for longer than a year and therefore, the statute of frauds will not work as a defense. Even though, the agreement was oral, it does not violate the statute of frauds.
2. Was Spenser entitled to withhold the rent due to the necessary repairs?
Spenser will also argue that Owen breached the implied warranty of habitability. The implied warranty of habitability is required by law and requires that landlords provide basic habitable conditions such as plumbing and lighting. However, this warranty only applies to residential buildings. The facts state that Lot 1 is a commercial property. Accordingly, Spenser cannot argue that Owen breached the implied warranty of habitability.
Spenser and Terry might also argue that Owen’s failure to make the repairs constituted a constructive eviction. A constructive eviction occurs when there is substantial interference, the tenant gives the landlord notice of the problem and the tenant leaves the property. In a case of constructive eviction, the tenant can either terminate the lease, make the repairs and deduct payment from the rent or reduce rent to a proper amount considering the repairs. The tenant cannot simply remain on the property and not pay any rent, which it appears Spencer is doing. Furthermore, Owen and Terry contracted that Terry would be liable for the repairs as tenant. So long as an agreement does not violate public policy, courts will honor parties’ agreements. Because this is commercial and not residential property, this defense will fail.
3. Can Owen collect money for the eighth year from Terry?
A landlord is entitled to collect rents from tenants in accordance with their lease agreement. There does not appear any reason that Terry could withhold payment for the 8th year from Owen. Terry remains in privity with Owen and Owen can bring a cause of action to recover the rent. If Terry does not pay and there are no contrary provisions in the lease, Owen could evict Terry for not paying rent.
Owen wants the construction to stop and thus must seek an injunction. For an injunction, he must prove that there is no other equitable remedy at law in addition to his cause of action.
1. Private Nuisance
Private nuisance occurs when there is a substantial and unreasonable interference with a person’s property. That person must show that he is not hypersensitive and that reasonable people would be disturbed by the nuisance in his community. In this case, Lot 3 is under construction and Owen is irritated by the noise and debris. While Owen’s enjoyment of his property is being interfered with, it would be difficult to convince a court that construction constitutes a private nuisance. Additionally, the construction is presumably temporary and the nuisance will most likely disappear once it is complete. Thus, Owen would most likely lose a private nuisance action.
2. Unreasonable deflection of surface water
Owen can also argue that he has a cause of action against Lot 3 because of the water runoff. Surface water is interpreted under the common enemy rule. The common enemy rule allows property owners to deflect surface water in any way possible under the assumption that it is everyone’s “enemy.” However, a court could find that this rule is limited by not unreasonably interfering with another’s property. In this case, Owen might be able to convince a court that the paving on lot 3 has caused an unreasonable runoff onto his property. The runoff must be unreasonable though and this could be a difficult argument for Owen to make.
3. Trespass to Land
Trespass to land is when by a voluntary act someone enters another’s property. If the trespass is intentional then no damages are necessary. However, if it is not intentional then damages are required for an owner to recover. In this case, the crane swung onto Owen’s property. Trespass can include the throwing of an object onto another’s property so long as it was a voluntary act that caused it. In this case it is not clear whether the act was intentional. It is also does not seem like Owen suffered any damages. Accordingly, it will be difficult for Owen to recover for trespass. If the crane continues to swing on his property he can probably get an injunction against that. However, it is unlikely that Owen can get an injunction to stop the construction.
PROPERTY — SAMPLE ANSWER B
To: Law Firm Supervisor
Re: Owen’s potential causes of action
This memorandum addresses Owen’s possible claims with regards two plots of land. With regard to Lot 1, this memo addresses possible causes of action against his tenant and sub-tenant, as well as possible defenses. With regard to Lot 2, it addresses possible claims regarding the construction on Lot 3.
Owen has three issues to handle. He is dissatisfied that his tenant Terry has subleased to Spenser. He also must deal with the fact that Spenser and Terry have failed to make the repairs required by the lease, and rent is overdue. He should bring contract claims for failure to make the repairs and breach of the duty to pay rent. He is likely to succeed on both claims, but will be unlikely to win any action to void the sublease.
Owen will not have any recourse against the sublease itself, unless there is an express provision in the contract.
Owen said he is not happy with the transfer Terry made to Spenser. Terry appears to have sublet his commercial property to Spenser. An assignment occurs when the primary tenant assigns all of his remaining interest in the lease. A sublet arises when the primary tenant assigns less than his entire interest. Here, Terry reserved the right to “take back the property,” suggesting that he is not relinquishing all of his rights with regard to the property. This suggests it is a sublease. The sublease is valid, even though it is orally made, because it is a lease for one year. The statute of frauds requires that a lease over one year be in writing.
In either an assignment or sublease, courts favor the assignability of interests. A sublet will not be prohibited unless there is an express contractual term. Even when there are terms, a court will read restrictions on subleases and assignments narrowly. Terms requiring owner approval for any subleases are valid, but they will be waived once a sublet is approved, unless the owner expressly reserves the right to approve any additional sublets.
Therefore, unless Terry signed a lease requiring Owen’s permission or voiding all subleases, his transfer is valid. Owen will have no recourse against the mere act of Terry’s sublease to Spenser. He cannot evict Spenser for the remaining year of the lease on this basis.
Repairs required by the lease
The lease between Owen and Spenser requires the tenant to make all electrical and plumbing repairs. Spenser has a duty to make these repairs. The duty to make repairs runs with the land. Specifically, contract terms of and concerning the land run with the land, so Spenser will have a duty to make these repairs regardless of whether Terry expressly contracted with Spenser to assume these rights.
Owen should make the repairs and sue Terry and Spenser for damages. Although he does not have to make the repairs, it would be prudent to do so, since electrical damage may cause a fire. The breach is probably not material enough to evict Spenser, but Owen should easily recover these damages, as long as the repairs are made in good faith. Owen can sue Terry because they are in privity of contract. He can also sue Owen because they are in privity of estate, and the duty to make these repairs runs with the land. He can recover from either individual, but can only recover the full cost of the repairs.
Possible defenses to such an action include the normal contract defenses, such as fraud, duress, or mistake in formation of the contract. None of these defenses appear to apply. Additionally, as discussed above, Spenser’s lack of notice will not serve as a defense.
Spenser has failed to pay rent, and there is additional unpaid rent from the eight year of the lease. The leasehold interest involves duel covenants. The tenant has the covenant to pay rent, and the landlord has the duty to provide possession and quiet use and enjoyment of the property. Spenser and Terry have breached this core duty without justification, and Owen has no additional duty to perform.
When a tenant ceases to pay rent, the owner has several options for remedies. The landlord can use the legal system to evict the tenant. He can also allow the tenant to remain and sue for damages. The owner, however, may not use any form of self-help. He cannot change the locks, seize property in the leased space, or take other actions on his own.
Owen may sue Spenser and Terry both for the unpaid rent from year 10, but Owen may only sue Terry with regards to unpaid rent for year 8. This is because Owen and Spenser were not in privity of estate in year 8.
Spenser and Terry may argue defenses of implied warranty of habitability, constructive eviction, or contract defenses involving the formation of the lease. They will not win on any of these claims.
The implied warranty of habitability applies only to residential leases. Constructive eviction requires that a tenant actually vacate the premises. The lease involved in Owen’s case is commercial, so the implied warranty of habitability does not apply. Spenser also does not appear to have vacated, so he and Terry cannot claim constructive eviction. Finally, there do not appear to be any applicable defenses regarding the formation of the contract, such as duress, mistake, or fraud.
Owen should bring a cause of action for the torts of nuisance and trespass. He will be likely to win both claims.
Trespass is the unlawful, intentional invasion into the property lawfully possessed by another. It involves any volitional, physical invasion, whether by a person or an object. Trespass also includes the area immediately above and below a piece of land. It will not, however, stretch as far as to prevent commercial airlines. Finally, there will be no trespass where the entry was privileged, such as by the consent of the owner or where the land is open to the public.
The crane that swung onto Owen’s land caused a trespass. An operator intentionally caused the crane to swing, and it went into the airspace on Owen’s land and within 2 feet of his house. This is an invasion of the airspace immediately above Owen’s land and home. The crane operator did not have Owen’s permission to swing the crane over his land, and there are no other applicable privileges. Owen will, therefore, likely win his case of trespass regarding the use of the crane.
The debris that blew onto Lot 2 also caused an unlawful physical invasion. Physical invasion can be accomplished by any tangible object. The issue will be if there was sufficient intent.
Owen will win if the construction workers intentionally threw garbage or debris onto Owen’s land. He may, however, have a difficult time proving the debris entered his property as the result of an intentional act by anyone. If the debris caused damage to his property, he would be more successful in a claim for negligence, since any failure to take due care to prevent the debris from going onto Owen’s land might then be actionable. However, he would need to show actual damages. In contrast, if the debris is intentionally directed onto Owen’s land, he can recover nominal damages even without actual harm.
The water runoff will be governed by a separate rule, the “common enemy rule.” Surface water is considered harmful, and property owners are allowed to take reasonable steps to divert it. The trier of fact will need to determine whether the paving on Lot 3 causes unreasonable water damage to Lot 2. The mere act of paving land does not appear to be an unreasonable act taken to diver water. Owen may not be able to win this claim, despite the tangible invasion.
A claim for a private nuisance must establish that the defendant substantially and unreasonably interfered with plaintiff’s use and enjoyment of plaintiff’s own land. In determining whether the interference is unreasonable, the court will balance the neighbor’s use against the annoyance or other burden caused by that use. They will consider factors such as zoning, the effect of the activity on land values, and whether a reasonable person would find the interference annoying, or whether the plaintiff is unusually sensitive. Unusual sensitivities will not be considered. Where the private nuisance is sufficiently substantial and unreasonable, the court will grant an injunction.
The construction and machinery is causing noise. A person of ordinary sensibilities would find this annoying, but given the benefit created by new construction and the temporary nature of the construction, it is unlikely a court would find the burden on use and enjoyment sufficiently unreasonable. If the construction consistently was conducted at unreasonable hours or was being unreasonably protracted, Owen would have a better chance of success. Finally, vindictive or intentionally annoying behavior is more likely to be enjoined, but there is no evidence of such behavior here. Because an injunction against the construction would create an undue burden on the owners of Lot 3, the court is unlikely to provide Owen with this remedy.
QUESTION 3 — CRIMINAL
During his investigation of a series of thefts of high-end electronics from local homes, Detective Howard observed Larry Lightfingers, known to the officer as a drug addict, carrying a large flat-screen television into a pawn shop. Howard stopped Lightfingers and asked him where he had obtained the television. When Lightfingers could not provide a credible response, Howard placed him and the television in the police car and began questioning him. Howard said to Lightfingers that things would “work out” for him if he told Howard what he knew about the recent thefts.
Lightfingers, frightened that the criminals involved in the thefts would kill him if he informed on them, concocted a story implicating Heather Fine in the thefts. Lightfingers knew the story was untrue but offered it to both help himself and to cause trouble for Fine, whom he did not like. Fine owned and lived in a house on a very large farm in the rural neighborhood on the outskirts of town.
Based on Lightfingers’ story, Howard obtained a search warrant for the Fine house. The next day, Howard and other officers, including officers in a tactical helicopter, executed the warrant on the Fine house. No stolen electronics or other evidence of a theft ring were found in the home. However, the officers in the helicopter saw what they believed to be a field of marijuana in an area well behind the house. They radioed Howard, who investigated this information. He discovered a substantial amount of marijuana growing on the property and arrested Fine. She was given notice of her rights pursuant to Miranda , told the arresting officers she knew nothing of the crop, and affirmatively refused to answer any further questions.
Fine was secured in the local police station’s holding cell overnight. The next morning she was transferred to the county jail with a defendant arrested on a unrelated matter. She was transported in a police car driven by Officer Morgan. When the two defendants were being placed in the car, Officer Morgan told the other defendant he was riding with “Queen Green Thumb,” a local grower of very powerful marijuana. The other defendant laughed and said it was not possible to grow good pot this far north. Fine said that you could if “you know the right kind of nutrients.” This was overheard by Officer Morgan who reported it to Detective Howard.
Fine has retained your law firm to represent her in this matter. The partner handling this matter has asked you for a memorandum on all possible charges and defenses available to the client.
PREPARE THE MEMORANDUM
CRIMINAL — SAMPLE ANSWER A
DATE: July 30, 2009
RE: Fine’s potential charges and defenses
This two part memo discusses the charges that may be brought against our client, Heather Fine, by the police based upon the amount of marijuana growing in Fine’s yard. The police found the marijuana while executing a search warrant of Fine’s home for stolen electronics. Although no electronics were found, police in a helicopter noticed the field of marijuana. Fine was subsequently arrested and made an incriminating statement, while in police custody to a fellow prisoner. The second part of this memo addresses the potential defenses Fine may raise. These defenses include challenges to the warrant that led the officers to Fine’s home, the search of the field, and the statement Fine made to the fellow prisoner.
I. Fine may be charged with possession of marijuana and potentially with the intent to distribute.
The first issue is whether Fine may be charged with possession of a controlled dangerous substance, namely marijuana. The crime of possession requires that the defendant be both aware of the possession and aware of the character or nature of the item possessed. The defendant must be aware and have possession of the contraband long enough to have the opportunity to discard it before they may be charged with possession. When the contraband is not on the actual person of the defendant, constructive possession may be proven if the contraband were near enough for the defendant to exercise dominion and control over it. It should be noted that the prosecution is required to prove any element of a crime beyond a reasonable doubt. However the reasonable doubt standard does not apply to the mere charging of a crime.
Here, it appears that the prosecution may be able to succeed in charging Fine with possession of a controlled dangerous substance, assuming that Fine actually was growing the marijuana. It should be noted that a factual argument should be posed that the marijuana was far behind her house in a rural area, and could have been grown by someone else. The police will undoubtedly argue that no one else lives in the area and the marijuana was near her home and yard. If the police connect the marijuana with Fine, she will be charged with possession. The statement that Fine made to the fellow defendant regarding the nutrients and the ability to grow marijuana in the region (if not suppressed) connect her to the contraband. Fine is aware that the plants are marijuana, as evidenced by her statement, and is aware that she is in possession of it because she is growing and fertilizing the plants. It is not possible to tend to and fertilize your plants without knowing you are in possession of them. The prosecution will argue constructive possession because the contraband was not found on Fine’s actual person. Fine was in a position to exercise dominion and control over the plants because they were growing near her property. She could have at any time destroyed them or removed them and disposed of them. Her ability to pick the plants, tend to the plants, etc., would indicate that she had dominion and control, thus satisfying the elements of constructive possession.
The next issue is whether the police could charge her with the intent to distribute. This is a crime involving specific intent which would require more facts that those present. However if it is a very large amount of marijuana, more than for personal use, it is possible the police will be able to charge her with intent to distribute.
II. Whether Fine will succeed in challenging the warrant, suppressing the physical evidence of the plants, or suppressing her unMirandized statement in the police car?
A. Fine’s ability to challenge the warrant.
The first issue is whether the warrant to search Fine’s home was valid. If the warrant was invalid, Fine may be able to argue (see below) that the police were not legally on her property when they saw the marijuana plants, and may be able to succeed on a motion to suppress (please see below). Under the Fourth Amendment, a warrant shall not be issued except upon probable cause. To determine probable cause, many jurisdictions use a totality of the circumstances approach. This means that the warrant must be supported by sufficient information to permit a magistrate to make a common-sense determination that there is a fair probability that contraband will be found in the area to be searched. However a minority of jurisdictions use the Aguilar Spinelli two pronged approach. When probable cause is provided by an informant’s information, Aguilar Spinelli requires the warrant show the basis of the informant’s information and the veracity or reliability of the information. However a warrant that lacks probable cause may be saved by an officer’s good faith reliance unless the warrant is so lacking in probable cause that no reasonable officer would rely.
Here Fine may be able to argue that the warrant was invalid because it lacked probable cause. The totality of the circumstances indicate that the statement from Lightfingers was not reliable. Lightfingers was caught in a very suspicious circumstance and would obviously lie to exculpate himself and focus police attention on someone else. Also, lightfingers is known to the police to be a drug addict, and there is nothing to indicate that Lightfingers was not under the influence of drugs when he made the statement. Under Aguilar Spinelli the warrant is definitely lacking in probable cause because there is nothing to indicate how Lightfingers knew about Fine or that Lightfingers was trustworthy or telling the truth. The police did nothing to confirm or corroborate the statement. Even under the totality of the circumstances test the warrant probably lacked probable cause. However, the prosecution will argue that the officer’s acted in good faith and the warrant was not so egregiously lacking in probable cause that it could not be saved by good faith reliance. Clearly as good attorneys we should argue that the warrant was invalid, however it does not appear that it will lead to a suppression of the marijuana because of the open fields doctrine (see below).
B. Fine will probably not be able to suppress the marijuana because the search did not violate her reasonable expectations of privacy.
The Fourth Amendment protects a person’s right to be free from unreasonable searches or seizures. A search is violative of this Fourth Amendment right when a government actor invades a citizen’s reasonable expectations of privacy. However, there are certain things in which no person has a reasonable expectation of privacy. One such area is an open field. An open field is an area beyond the curtilage of the home. The curtilage is an outdoor area near the home that is used in connection with the intimacies of home life and enjoys somewhat of an expectation of privacy depending on the nature of the use etc. Open fields, on the other hand, are unsecured, without fences or proximity to the home, and there is no reasonable expectation of privacy in things that can be seen across them or in them or, as in this case, over them.
Here the police did not violate Fine’s Fourth Amendment rights because Fine did not have a reasonable expectation of privacy in the field. The facts indicate the field was beyond the curtilage and far from the home, indicating it is an open field. The police helicopter, while strange to be used to look for electronics in a home, was flying, it appears, from a legal altitude over the open field when it saw the marijuana. This is similar to a recent Supreme Court case where officers flew a plane over a backyard to see marijuana plants. There is no reasonable expectation of privacy from things that can be seen from legal airspace above an open field. Since the police did not violate her reasonable expectation of privacy when they discovered the marijuana, Fine is unlikely to be able to make a motion to suppress the marijuana.
C. Fine may succeed in suppressing her statement in the police car if she is able to show that it was custodial interrogation in violation of her Miranda rights.
When a suspect is subject to custodial interrogation, they are entitled to Miranda rights from the police. A statement made in violation of a suspect’s Miranda rights may be suppressed. Custodial means that the suspect’s freedom to move is restricted in any significant way and they are in an environment of police domination and control. Interrogation means not only questioning by police, but also any statements or actions by police that they knew or should have known are likely to result in the suspect making an incriminating statement. Interrogation can at times be done by someone other than the police, if done at the police’s bequest. The Miranda rights include the right to remain silent. If the right to remain silent is exercised the police must cease questioning and scrupulously honor the right for a period of time.
From these facts it does not appear that Fine’s statement was made in violation of her Miranda rights. Fine was absolutely in custody for purposes of Miranda. She had been in jail and was currently handcuffed in the back of a police car being transported to county jail. Her freedom to move has substantially limited and the police were dominating where she would travel, when, how, etc. This is the type of environment that could overpower a defendant’s will. The significant issue is whether the officer’s statement “you’re riding with queen green thumb.. .” was interrogation. The officer probably knew or should have known that the statement would elicit an incriminating response from Fine. However the prosecution will argue that Fine spoke in response to the other prisoner’s statement, not the officer. The prosecution will argue that the other defendant was not working at the behest of the police and therefore could not be considered interrogation for the purposes of Miranda. It appears that Fine spoke voluntarily in response to a statement that was not at the police’s bequest or prompted by the police. It seems highly unlikely Fine will succeed in suppressing the statement
It appears that Fine will be charged with possession of marijuana and will not succeed in suppressing the evidence against her. Should Fine succeed in invalidating the warrant, it will not help her because she will not be able to suppress the evidence of the marijuana. The marijuana was discovered in an open field in which she had no reasonable expectation of privacy. Since there was no expectation of privacy there was no unreasonable search and no Fourth Amendment violation. Finally because her right to remain silent was scrupulously honored and her incriminating statement was not made as a result of interrogation she will not be able to suppress it.
CRIMINAL — SAMPLE ANSWER B
To: Senior Partner
Re: Heather Fine’s possible charges and defenses
Date: July 30, 2009
Heather may be charged with possession of illegal narcotics. Possession requires that the defendant be in possession of the illegal substance for long enough of a period of time to relinquish control. Mistake as to the illegality of the item is not a defense. However, a reasonable mistake as to the fact that the item existed may be a valid defense.
Here, Heather was definitely in possession of the marijuana for a long enough period of time to relinquish control, since the marijuana was growing in her backyard. It would not be a defense for Heather to assert that she did not know that growing marijuana was illegal. It is also unlikely that Heather can claim that she did not know that marijuana was growing in her backyard, since it was growing in substantial quantities. Such a mistake, even if she claims it, would not be reasonable and the court will probably not be persuaded.
Since Heather was also growing “substantial amounts” of marijuana, Heather may also be charged with possession with the intent to sell or distribute.
Defenses: Possible Fourth Amendment Violations
Heather may raise the defense that her constitutional rights were violated through an illegal search and seizure. The issue is whether evidence can be admitted if it has been obtained through an invalid warrant.
The Fourth Amendment of the Constitution protects people from unreasonable searches and seizures. In order for the Fourth Amendment to apply, there must be state action. Here, there was state action since the police were conducting the investigation. In order for the Fourth Amendment to apply, there must also be a privacy interest. One has a privacy interest in one’s person, effect, home, and curtilage. Since the search was of Heather’s home, Heather had a valid privacy interest.
Once it has been established that there is state action and a valid privacy interest, the state can only conduct a search if there is probable cause and a warrant. Here, Howard obtained a warrant, but it was not valid. A valid warrant needs probable cause and particularity. Probable cause exists if there is a fair likelihood that evidence will be found in the place to be searched. Such probable cause can be based on information obtained from an informant. If an informant is the source of the probable cause, however, there must be a an indicia of reliability, and the informant must reveal how he got the information. Here, Lightfingers did not show how he obtained the information. In fact, it was entirely fabricated. Since there was no indicia of reliability with respect to the informant’s claims, the warrant was invalidly issued.
However, a police officer’s good faith execution of a warrant may still be permissible if the mistake that invalidated the warrant was not egregious. It is unclear on the facts of this case whether Lightfinger’s information was egregiously lacking. Absent any clear misconduct, the warrant will be saved by the good faith exception. It should be noted that some jurisdictions do not have the good-faith exception. In those jurisdictions, the search will be invalid even if there was no egregious misconduct.
Even if the warrant is held invalid, the marijuana will still be admissible because it was in plain view. The police were able to see the marijuana in plain view when they flew over Heather’s farm. Heather may object to the use of the tactical helicopter, because it was used to spy on her from above her property. Under the Plain View exception to the warrant requirement, however, police are allowed to fly over a person’s home and search what is clearly visible from the air. It is unclear from the facts what kind of surveillance equipment was used in a “tactical” helicopter. But assuming that there is no special equipment, the police will be allowed to search Heather’s property by flying over it, and anything they see that is in plain view will be subject to seizure. It should be noted, however, that the police will need to obtain a valid warrant in order to enter Heather’s property in order to seize the marijuana.
It should also be noted that Heather may try to assert that Lightfinger’s arrest and detention violated his constitutional right against unreasonable searches and seizures, and that evidence obtained from such illegal conduct should therefore be suppressed. However, this argument will fail. The defense of an illegal search and seizure can only be raised by the person whose rights were infringed. Since it is Lightfinger, and not Heather, whose rights were infringed, Heather will not be able to raise this defense.
Defenses: Possible Fifth Amendment Violation
In addition to Heather’s defense that her Fourth Amendment rights were violated, Heather may also try to suppress the statement that it was possible to grow good pot if “you know the right kind of nutrients.” The issue is whether a statement in violation of one’s Miranda rights can be suppressed if it has been spontaneously blurted out by the defendant.
Under the Fifth Amendment’s Miranda doctrine, a suspect has the right to remain silent and the right to have an attorney. A suspect’s Miranda rights attach when a person is in custody and they are being interrogated. Custody exists when there is enough government activity that a person of normal sensibilities would not feel free to leave or to decline questioning. Interrogation exists when the police engage in conduct that is reasonably likely to elicit a response.
Unfortunately for Heather, she will not be able to suppress her statement, because there was no interrogation. Although there need not be a direct question in order for there to be an interrogation, merely calling Heather “Queen Green Thumb” is not sufficient to constitute an interrogation. Further, the statement that it is not possible to grow good pot this far north came from the other defendant, and not the police. Thus, that statement would not be considered an “interrogation” that would lead to a violation of one’s Miranda rights. Instead, Heather’s statement is admissible because she spontaneously blurted it out voluntarily. Thus, it will not be suppressed.
It should be noted that Heather’s Sixth Amendment right to counsel had not yet attached, since the Sixth Amendment only attaches after charging.
QUESTION 4 — CONSTITUTIONAL LAW
Governor Dalitza has proposed several bills designed to curb government spending and to improve the State’s quality of life.
Pandering to public outcry about welfare recipients giving birth to multiple children following in vitro fertilization, the first bill blocks public funding for such procedures. As a consequence, the proposed legislation will have a disproportionate impact on minority females as they represent a significant percentage of the women who undergo publicly funded in vitro procedures.
The second bill is an attempt to militate against public outrage concerning large bonuses paid to executives in financial firms that received federal Troubled Asset Recovery Program funding. Those bonuses will be taxed retroactively at seventy-five percent of their gross value, resulting in a virtual forfeiture of the compensation.
Dalitza is equally concerned the State’s moral standards are deteriorating, and thus, proposes a bill placing a three-year moratorium on the opening of new strip clubs that feature “topless female performers” within 1,000 feet of a school or religious establishment. Male strip clubs featuring shirtless performers, in contrast, are exempt from the moratorium under this legislation.
Numerous studies indicate female, but not male, strip clubs have a deleterious impact on property values, crime rates, and community character.
The final bill requires anyone seeking to execute upon an out-of-state monetary judgment in the State’s courts to pay a filing fee equal to thirty-three percent of the judgment’s amount.
As Dalitza’s chief counsel, you are asked to prepare a memorandum of law assessing the constitutionality of the proposed bills and any defenses the State should anticipate after their enactment.
PREPARE THE MEMORANDUM
CONSTITUTIONAL LAW — SAMPLE ANSWER A
To: Governor Dalitza
Re: Constitutionality of your recent four bill proposals
I. Blocking Public Funding of in vitro fertilizations
Opponents of the bill blocking public funding of in vitro fertilization will likely raise constitutional concerns based upon the right of privacy and the Equal Protection Clause of the 14th Amendment.
The first issue is whether this bill unconstitutionally burdens the reproduction rights of women under the right to privacy. The Supreme Court has defined a right to privacy in Griswold v. Connecticut which includes the right of individuals to make reproductive decisions without undue burden from the State. This right has been held to encompass the right to obtain an abortion without undue burden. However, the Court has also held that the government has no duty to fund these procedures. Similarly, while the State cannot prohibit in vitro fertilization absent a compelling government interest, it does not necessarily have to fund the procedure. Therefore, this bill probably does not violate individuals’ right of privacy.
The second issue is whether the law violates the Equal Protection Clause because it only affects welfare recipients and has a disproportionate impact on minority females. First, as to welfare recipients, economic class is not a suspect class in the United States, so the law is only subject to rational basis review. The government has a legitimate interest in saving government funds, and it is rationally related to the bill, so the bill likely does not violate the equal protection clause on the basis of wealth.
Next, the law has a disproportionate impact on minority females, but there is no evidence that the intent of the bill is to discriminate. A law racially and gender neutral on its face will be held to be discriminatory if it was intended to discriminate. If it is racially discriminatory, a law must be narrowly tailored to achieve a compelling state interest. If a law is discriminatory on the basis of gender, it must be substantially related to an important government interest. But here, the Bill, is not discriminatory on the basis of race or gender on its face, and there is no evidence of a discriminatory intent, so it will not violate the equal protection clause.
II. Retroactive Taxation of Executive Bonuses
The bill will likely be contested as an unconstitutional Ex-Post Facto Law, a taking without compensation, and a bill of attainder. First, the bill is not an Ex-Post Facto law because the constitutional prohibition only applies to criminal laws. This law is not penal in nature, despite it’s punitive effect, so it will not violate the ex-post facto clause.
Next, opponents will claim that this retroactive tax amounts to a Taking. While taxes are not ordinarily takings requiring just compensation, this tax is on bonuses already paid, on a select few executives, and so high as to virtually forfeit the compensation of the executives, so a court can find it to be an unconstitutional taking. Finally, the State is barred from enacting bills of attainder, or laws that apply to a specific person. Opponents may argue that the known class of people subject to this bill is so small as to render it a bill of attainder. This argument is unlikely to succeed because the bill targets a group of people who received federal funds indirectly, not a specific person or persons.
III. Three Year Moratoriums on New Strip Clubs
This bill is likely to be unsuccessfully attacked on free speech and equal protection grounds. A law that burdens content-based speech is subject to strict scrutiny. However, nude dancing is not protected speech, so reasonable time and place restrictions are constitutionally permissible. Laws that restrict the placement of strip clubs to protect property values and public safety are enforceable.
The second concern is the facially gender bias of the bill. This bill applies only to the clubs that feature topless women dancers, not topless men. However, this ground for contesting the bill is also likely to fail. The bill is substantially related to an important government interest of protecting the public health and safety, and it only marginally burdens a gender class.
IV. Filing Fee on Out-of-State Monetary Judgments.
This bill will likely be successfully attacked as a violation of the full faith and credit clause. States are required to recognize out-of-state judgments, so long as the other court had personal and subject matter jurisdiction over the parties and claims, and the judgment does not go against an important state policy. A state cannot discriminate against out-of-state judgments validly entered by imposing on them additional fees. Therefor, this bill will likely be held unconstitutional.
CONSTITUTIONAL LAW — SAMPLE ANSWER B
To: Governor Dalitza
Re: Constitutionality of Proposed Bills
You have asked me to draft a memorandum of law that considers the constitutionality of four bills that you have proposed to curb government sending and to improve the State’s quality of life.
Bill Blocking Public Funding for In Vitro Fertilization
The first bill attempts to prevent welfare recipients from receiving publicly funded in vitro fertilization. There has been an outcry that this bill is unconstitutional because it affect a disproportionate impact of minority females. Here, there are really two issues — whether the failure to fund constitutes racial discrimination, and secondly, whether it violates a fundamental right such as the right to privacy.
The equal protection clause of the Fourteenth Amendment provides protection from laws that discriminate against particular individuals. Generally, race based classifications receive strict scrutiny from the courts. Where a law discriminates based on race, it will be upheld only if it (a) serves a compelling government interest, and (b) the law is the least restrictive means of attaining that goal (narrowly tailored). However, the law at issue here does not discriminate on the basis of race. To the contrary, the law applies equally to all individuals — no individual minority or non-minority is permitted to receive public funding for in vitro fertilization.
Here however, the proposed bill causes a disproportionate impact on minorities. However, a showing of a disproportionate impact alone is not enough to trigger heightened scrutiny. In addition to the impact, there must be a showing of a discriminatory intent as well. Here, there does not appear to be any such intent. Nothing suggests that you or the legislature is targeting minorities by passing the law. Accordingly, the court will only invalidate the law if it fails to meet rational basis scrutiny. Such scrutiny requires that the law have a legitimate government purpose. Here, rational basis scrutiny is clearly met — the law has a purpose of preventing welfare recipients from milking the system by artificial impregnation. The court will not second guess this rational basis.
An argument may also be made that a fundamental right is being implicated by the proposed bill. The U.S. Supreme court has recognized certain rights as fundamental including the right to marital intimacy, the right to contraception, and the right to abortion. Indeed, the court has made clear that issues of human reproduction often implicate fundamental rights. A denial of such fundamental rights triggers strict scrutiny.
Here however, heightened scrutiny is not triggered, because the government is not denying any fundamental right. Were the bill to state that all in vitro fertilization was illegal, then the law may well be invalid. However, here the government is only refusing to pay for in vitro fertilization. The Supreme Court has made clear that in the context of fundamental rights, the State has no duty to pay for abortions, or contraception. Poverty is not a suspect class that triggers heightened scrutiny. Thus, the state can validly refuse to pay for in vitro fertilization. The proposed bill is constitutional.
Retroactive Tax on Executives in Financial Firms Receiving TARP Money
The second bill attempts to impose a seventy-five percent tax on executives receiving TARP funding. The law has several constitutional deficiencies and will almost certainly be invalidated.
First, while the Constitution allows the states to impose taxes on individuals, those taxes must bear some reasonable and valid relationship to the interests the state is seeking to promote. For instance, property taxes can validly be applied to individuals in a state because such taxes pay for the services provided to landowners at all stages of government. Here, however, the tax does not bare and reasonable and legitimate interest to the interest the government is trying to promote. Instead, it appears that the law is merely intended to punish individuals who are the indirect beneficiaries of unpopular government action. Penalty taxes are not valid. Accordingly, this provision will likely be struck down on the due process clause, or a similar clause of the federal constitution.
Second, the proposed bill is likely a bill of attainder. Under the Constitution, bills of attainder are prohibited. A bill of attainder is a bill that targets a small set of individuals and imposes penalties on them. The Constitutional provision was designed to prevent the Government from acting as lawmakers, judge and jury all in one. There is almost no Supreme Court precedent interpreting this provision. Here, a strong case can be made that a bill of attainder exists, because the State has singled out a small sect of individuals and imposed a penalty on them. Thus, a bill of attainder likely exists.
Third, the proposed bill may violate the contracts clause. Under the contracts clause, the State may not substantially and unreasonably interfere with existing contracts. Here, many executives had a contract with their employer to receive bonuses at a specific rate. The proposed bill would vitiate a large portion of these contracts, as it essentially strips employees of their entire pay. Thus, the contracts clause is likely violated.
Lastly, it is notable that the ex post facto clause would not apply here. Such a clause only applies in criminal actions, and here the action by the government is civil in nature. It deals with taxes. Thus, the ex post facto clause is not violated.
Ban on Topless Female Strip Clubs
The third bill attempts to place a three-year moratorium on new strip clubs that feature “topless female performers” within 1,000 feet of a school or religious establishment.
As a starting point, the Supreme Court has held that nude dancing can be regulated by the State without interfering with the First Amendment. The Court has specifically found that laws prohibiting strip clubs to be a certain distance from a school, and licensing requirements to be constitutional. Additionally, the Supreme Court has held that the State can regulate strippers’ clothing when they dance; one case upheld a requirement that dancers wear pasties during nude dancing performances.
The issue with the proposed bill here however, is not that it regulates nude dancing, only that it makes a distinction based on gender. The law prohibits topless female performers but imposes no such ban on men. Thus, a gender classification exists. Courts apply intermediate scrutiny to a gender classification. The test is whether the law is (a) substantially related to, (b) an important government interest. Thus, the question is whether the proposed bill can stand based on its stated purpose which is to prevent a deleterious impact on property values, crime rates, and community character.
Applying the intermediate standard, it is a close call whether the law will be upheld or invalidated. Most likely however, the law will be struck down. On the one hand, the State can argue that it is promoting a positive community atmosphere, and that studies suggest that female nude dancing establishments harm the community. The State can point out that there are numerous studies showing the deleterious effects of nude female dancing. However, the female nude dancing establishments will argue that impact on property values, crime rates, and community character are too generalized. Indeed, there is Supreme Court precedent suggesting that these generalized concerns do not survive more heightened levels of scrutiny. Most compelling, there is nothing to suggest that the state could not offset these effects in other ways. This is likely to be persuasive.
Filing Fee of Thirty-Three Percent on Out of State Judgments
The fourth bill attempts to impose a thirty-three percent tax on out of state judgments.
The Constitution imposes on the states the Full Faith and Credit Clause. This requires the states to recognize as valid judgments from out of state, and to give those judgments their entire worth. While a basic filing fee may be permissible, the law at issue violates the full faith and credit clause, by imposing a 33% tax. Such a tax severely inhibits those who justly obtain judgments against out-of-state defendants. Thus, the law is unconstitutional.
One note here, the law does not violate the Equal Protection Clause based on alienage. As discussed earlier, the court applies heightened scrutiny to laws that differentiate based on classes of people. Alienage, or out of state residence, is a classification that triggers such scrutiny. Here however, the law does not discriminate based on alienage, and it instead applies equally to everyone seeking an out-of-state monetary judgment, including state residents. Thus, the law does not violate equal protection.
QUESTION 5 — EVIDENCE
Please write your answer to this essay in the answer booklet with the blue cover.
Jean disappeared while on a cruise off Cape May, New Jersey, with her husband, Phil. Jean’s body was never recovered, but Phil was charged with first-degree homicide in her death. Phil claims that he is innocent, and Jean committed suicide. At a pretrial conference, the prosecutor advised the court he will offer the following evidence.
1) Medical Examiner’s report indicating that toxicology reports performed 10 years ago in connection with the autopsy of Betty, Phil’s former wife, showed elevated levels of arsenic but listed the cause of death as “inconclusive.”
2) The testimony of Alice, a longtime friend of Phil and Jean, that Jean told her the couple frequently fought and that Jean was “afraid” of Phil.
3) A copy of a $1,000,000 life insurance policy Phil had taken out on Jean 6 months prior to the cruise.
At the same pretrial conference, the defense advised the court it will offer the following evidence.
4) The testimony of Jean’s treating psychiatrist that she had told him 6 months before her death that, on occasion, she was so depressed she had seriously considered suicide.
5) Records from the pharmacy from which Jean regularly obtained her prescription medications that she had not refilled her antidepressant prescriptions during the 2 months prior to the cruise.
6) The testimony of Phil’s pastor that Phil attended church services every Sunday and regularly participated in church functions.
You are the trial judge’s law clerk and are assigned to prepare a memorandum advising the court how to rule on the evidentiary issues raised by the parties.
PREPARE THE MEMORANDUM
EVIDENCE — SAMPLE ANSWER A
From: Applicant/ Law Clerk
Date: July 2009
Re: Evidentiary issues in State v. Phil
Introduction and Facts:
This case requires you to decide whether to admit various pieces of evidence. This case involves the possible murder of a woman by her husband. The woman disappeared during a cruise and her body has not been discovered. The Prosecutor charged the husband in her death, but the husband asserts that the woman committed suicide. They each want to offer various pieces of evidence. The following six numbered sections contain my recommendation to you regarding the admissibility of the evidence.
1) Medical Examiner’s report regarding Phil’s former wife
The issue is whether a medical examiner’s report that a criminal defendant’s former wife died from an inclusive cause of death, but with arsenic in her body, is admissible in a case where the defendant is on trial for murdering his current wife.
The rule for all evidence is that it is only admissible if relevant. Evidence is relevant if it tends to make the existence of a fact at issue more or less likely to be true. The evidence need not be dispositive; rather, it must tend to make the presence of a fact at issue more of less likely to be true.
Here, the fact that Phil’s former wife had arsenic in her body tends to make it more likely that she was poisoned. This is relevant to the instant case because Phil is charged with murdering his present wife, Jean. The fact that he may have murdered his former wife tends to make it slightly more likely that he murdered his present wife.
Even though evidence is relevant, it will only be admitted if it’s probity is not substantially outweighed by its prejudicial effect, and other pragmatic considerations. When determining if evidence should be excluded for prejudice, the court looks at the probity and the prejudicial effect.
In this case, the probity is very low. This is because the medical examiner’s report indicates that Betty, the former wife, cause of death was inclusive. Furthermore, arsenic can be present in the body for a variety of reasons; not necessarily because the deceased was poisoned. Finally, even if Betty was poisoned (a fact that is not clear from the medical examiner’s report), it is unknown whether Phil or someone else committed the murder. Thus, the probative value of the medical examiner’s report is very low.
Regarding the prejudicial effect of the report, it is very high. This is because it has the potential to mislead or confuse the jury. The issue in this case is not whether Betty was murdered, or whether Phil murdered her. Rather, the issue in this case is whether Jean was murdered and whether Phil murdered her. The report about Betty’s death is inflammatory and misleading because it makes Phil look like a villain to the jury. Thus, because the probity is so low, and the prejudice is so high, the probity is substantially outweighed by the prejudice, and the evidence should be excluded.
In addition to the above issues, there is also a hearsay issue in admitting the report. Hearsay is an out of court statement being offered for the truth of the matter asserted. In this case, the report is being offered to show that Betty had arsenic in her system. Thus, it is hearsay.
There is an exception to the hearsay rule for business and public records. These records are not excluded if kept in the ordinary course of business, made by a person with knowledge of the facts or by a person receiving the information through a non-hearsay witness, and made shortly after the event in question.
This report is a public/business record because it was made by the medical examiner in the ordinary course of her duties to examine dead bodies. It was made by an examiner with actual knowledge of the facts (the presence of arsenic in Betty’s body and the unknown cause of death) and it was made shortly after or contemporaneously with the examination. Therefore, it is not excluded under the hearsay rule.
In addition to the above issues, there is also a character evidence issue. The rule for character evidence is that a prior bad act is not admissible to show action in accordance with the prior bad act. However, if the prior bad act is being admitted to show something else, such as motive, intent, absence of mistake, identity, or common plan or scheme, then it is admissible.
Here, the evidence is to show identity of the killer. That is, the prior bad act (poisoning Betty) shows that Phil is the person who killed Jean. That is, it shows that Phil has a modus operandi of killing (poisoning) his wife. Furthermore, it could show motive (that he has a “taste” for murder, particularly murdering his wife). Nevertheless, the evidence should still be excluded because its prejudicial effect substantially outweighs its probative value.
2) The testimony by Alice that Phil and Jean fight, and that Jean said that she was afraid of Phil
Relevance and Prejudice:
The issue is whether Alice, a friend of Jean and Phil, can testify that Jean told her that she and Phil fight a lot and that she is afraid of Phil. This evidence is relevant because it makes it more likely that Phil had a motive to kill Jean. Therefore, it has probative value regarding the issue of motive. However, it is highly prejudicial. This is because many people fight with their spouse, but few people murder their spouse. This testimony could be inflammatory, and confusing to the jury. While it has some probative value, the probity is substantially outweighed by the prejudice because couples fighting is very common.
This evidence is hearsay. Hearsay is an out of court statement introduced to prove the truth of the matter asserted. Hearsay evidence is excluded, unless there is an exception or exclusion. In this case, the prosecutor is trying to introduce evidence of Jean’s out of court statement to prove that Phil and Jean fought and that Jean was afraid of Phil.
There is an exception from the exclusionary rule of hearsay for a “then-existing state of mind” and for a present sense impression. A then-existing state of mind is when the declarant (Jean) makes a statement about what she is thinking (her state of mind). It can only be a statement about a present state of mind, or the intent to do something in the future. Therefore, the fact that they fight is not a then-existing state of mind because it relates to past events. However, the fact that Jean is afraid of Phil is a then existing state of mind because it relates to her present state of mind (that she is afraid at the time she made the statement). Therefore, the part of the statement where Jean said she is afraid of Phil could be introduced under the then-existing state of mind exception to hearsay, but not the statement that they fight a lot. Of course, if Alice has independent knowledge of their marital issues, then she can testify about her knowledge.
A present sense impression is where the declarant describes what she is experiencing. Such a statement is admissible (that is, it is not excluded under the hearsay rule). Here, Jean was discussing her present sense impression; that she was afraid of Phil. As such, that part of the statement would be admissible under this exception. The part of the statement that she and Phil fight a lot is not admissible.
3) Life insurance policy taken out by Phil on Jean’s life
Relevance and Prejudice:
This is relevant because it tends to show that Phil had a motive to kill Jean, and that Phil anticipated her death. However, the probity is low because many spouses take out policies on the other spouse to protect their financial interests if the other spouse dies. While the amount of the policy seems high, it may not be high if Phil and Jean are affluent. Additionally, this is highly prejudicial and confusing because it is inflammatory because it could lead the jury to think that Phil is a callous person who is only worried about his finances in the event of his wife’s untimely death. Furthermore, it is not particularly probative because many people take out policies on their spouse. As such, it should be excluded.
We should note that liability insurance is excluded from evidence when being introduced to show fault; however, this is a life insurance policy, not a liability insurance policy. Therefore, this is not an issue.
4) Testimony of Jean’s psychologist that Jean was depressed and seriously considered suicide.
Probity and Prejudice:
This is highly probative because it demonstrates that Jean’s cause of death was likely not murder but rather suicide, as Phil contends. Therefore, it is highly relevant. It is not particularly prejudicial. While it might be given more weight than it should by the jury because the jury might be confused into thinking that depressed people have a higher suicide rate than that which is typical of non-depressed people; this is not sufficiently prejudicial. In other words, the prejudice does not substantially outweigh the probity.
Information told to a psychotherapist by a patient is privileged. Only the patient has the right to waive the privilege, not the doctor. A dead patient’s privilege can only be waived by her estate. Therefore, because this trial assumes that Jean is dead, only her estate can waive the privilege. Of course, if she is not dead then only Jean can waive the privilege. If she is not dead, then there is no reason to have a trial. Therefore, we must assume that she is dead. The evidence should only be admitted if her estate waives the privilege.
As her husband, Phil probably controls the estate and has the right to waive the privilege. Therefore, he can waive the privilege and admit the evidence. Also, we should note that there is some case law that holds that all privileges end once the patient is dead. If this court holds like that case law, then there is no privilege and Phil can introduce the testimony from the psychiatrist.
This statement is hearsay because it is an out of court statement being introduced to prove the truth of the matter asserted. Jean made the statement out of court to the psychiatrist, and it is being introduced to prove that she is depressed and considered suicide. Nevertheless, there is an exception from hearsay for statements made to doctors for the purpose of medical diagnosis and treatment. Here, the statement was made to a psychiatrist for the purpose of diagnosing and treating her depression. Thus, this is not excluded under the hearsay rule.
5) Pharmacy records that Jean had not picked up her prescriptions in the last two months.
Relevance and Prejudice:
This is highly relevant because it tends to show that she is not getting the treatment that she needs to overcome her depression. Indeed, it demonstrates that it is possible that she was stable in the past because of the medication, but made unstable because she had not taken her medication in two months. Thus, the evidence is relevant.
The prejudicial effect does not substantially outweigh the probity. While there is some prejudice because the jury could give more weight to this fact that it should, the fact remains that it is highly probative of her cause of death. This is because the jury could wrongfully conclude that all people who go off of anti-depressants become unstable. While this is not true, the fact is that, at a minimum, it creates reasonable doubt regarding her cause of death. Therefore, it should be admitted.
The record might be considered hearsay. However, it is not. This is because it is not an out of court statement; rather, it is an out of court act (not picking up her medicine). Also, it is a business record kept in the ordinary course of business by people with knowledge of the facts (the pharmacists), contemporaneously with the fact (not picking up the medicine). Also, the lack of a business record that would be made is admissible. This would be the case if the pharmacy did not have records for the dates in question, thus indicating that Jean did not pick up the medicine.
6) Testimony by the pastor that Phil goes to Church
Relevance and Prejudice:
This is NOT relevant. That is because the fact that Phil goes to church on Sundays and participates in church activities does not make it less likely that he killed Jean. Furthermore, it has the potential to be very prejudicial if the jury wrongfully concludes that he is not the “type” of person who would commit murder simply because he is religious. Therefore, the probative value is minimal or nonexistent, but the prejudice is high. As such, it should be excluded.
Evidence of a defendant’s good character for a relevant trait can be introduced by the defendant. However, evidence about an irrelevant trait cannot be introduced. As stated above, this trait is not relevant. Phil is on trial for murder. Therefore, his religious character is not at issue, and Phil cannot introduce this evidence.
EVIDENCE — SAMPLE ANSWER B
Memorandum of Law
Prosecutors: Medical Examiner’s Report
The medical examiner’s report will not be admissible because extrinsic evidence of prior bad acts is not admissible against a criminal defendant & the evidence’s probative value is substantially outweighed by prejudice.
Certified county records are generally admissible as an “official record” under the Federal rules of Civil Procedure, (FRCP) if relevant. However, as prosecutor may not present evidence of prior bad acts to show a defendant acted in conformity with said acts. In addition a judge may exclude any evidence when its probative value is substantially outweighed by its prejudicial effect under rule 403 of the FRCP (herein rule 403).
While this document is clearly a public record & is relevant (to show a past history) the prosecutor cannot admit this into evidence to show conformity as a prior bad act, nor can such extrinsic evidence be used to impeach the defendant. Lastly since it has the possibility of confusing the jury it should be declared substantially prejudicial under rule 403. Therefore this evidence is inadmissible.
Prosecutor: Alice Testimony
The testimony of Alice should be allowed in as an exception to the hearsay rule as a present sense impression.
Statements conveyed to the jury by an individual, who heard the statement from another party (or are stating previous statements they made) are generally excluded as hearsay if they are asserted for the truth of the matter. However, one exception, under the FRCP, to hearsay is a present sense impression. This is when an individual relates to the declarant (the person testifying) a present state of mind or feeling.
Here Alice’s testimony qualifies as hearsay because she is relating the words of another & is presenting them as true. However they are admissible as a present sense impression because Joan was conveying a present state of mind — being “afraid.” Therefore Alice’s testimony is admissible for the truth of the matter asserted.
Prosecutor: Insurance Evidence
The copy of the insurance is allowable as motive evidence. Under the FRCP, as previously stated, prosecutors are not allowed to introduce prior acts to show conformity. In addition non-relevant evidence is inadmissible. However prosecutors can introduce such “character evidence” when its true purpose is to show motive, intent, or a common scheme.
Here the evidence of the insurance policy, though unrelated to the issue of guilt, is admissible to show a possible motive for murder (to get insurance proceeds). Therefore, the insurance evidence is relevant & admissible.
The testimony of the psychiatrist will be admitted as an exception to doctor patient privilege & is an exception to hearsay.
The FRCP recognize privilege between doctor/patient. Generally such evidence will be inadmissible if it is not the subject of the litigation. In addition statements made to a doctor are generally hearsay. However both rules have exceptions. If the physical (or mental) condition is at issue the doctor/patient privilege will be waived. In addition statements made during the course of medical treatment, regarding treatment, are an exception to the hearsay rule.
Here the medical condition, Jean’s state of mind at the time of death, is at issue because the defense claims she was suicidal. In addition Jean’s statement to the psychiatrist regarding being ‘suicidal’ was a statement made during treatment concerning treatment. Having overcome both hearsay & privilege the statement should be admitted into evidence.
Defendant: Pharmacy Records.
The records from the pharmacy are admissible under the business records rule.
As mentioned before a document must be both relevant & have a foundation to enter evidence (otherwise they are hearsay). The FRCP provides that records, made in the regular course of business, concerning the normal activities of that business are admissible as non-hearsay provided they were not created after litigation commenced.
Here the records from the pharmacy would normally be hearsay, however they are relevant (to show Jean was off her meds) & are a business record exception under the FRCP because they were made by the pharmacy, prior to litigation, in the general course of the pharmacy’s business. They are also free of any doctor/patient privilege as previously explained. Therefore the records are admissible.
Defendant: The testimony of the pastor, regarding specific “good acts” by Phil is inadmissible character evidence under the FRCP.
A defendant may introduce evidence of his “good character” via witnesses. However this evidence can only come in the form of personal opinion (“I personally vouch for Phil’s reputation for peacefulness) or reputation (Phil has a reputation in the community for peacefulness). The evidence cannot be of specific acts. In addition the evidence must relate to the crime (you can present evidence of a reputation for honesty in a trial for fraud, but not evidence of peacefulness). By presenting such evidence the defendant “opens the door for the prosecution to present bad character evidence.
Here the testimony of the pastor relates to specific acts, “going to church & participating.” This is not opinion or reputation evidence. Therefore the testimony is not permitted by the FRCP & should be excluded.
QUESTION 6 — CONTRACTS
On June 19, 2008, Builder contracted with Buyer to build a six-story building by March 1, 2009 for $2,400,000. Buyer calculated that it would lose $200,000 per month for any delay beyond March 1, 2009. During negotiations, Buyer advised Builder that “there would be significant costs associated with any delay in completion.” The contract contained a liquidated damages clause of $1,000,000 that would take effect if the building were not completed on time. Although the contract required Buyer’s final design approval by June 30, 2008, between June 2008 and February 2009, Builder accommodated four requests by Buyer to significantly modify the design.
The contract required Builder “obtain and maintain an insurance policy from Insurer, naming Buyer as an insured.” Buyer had used Insurer before and was familiar with its practices. The insurance policy provided the following: (1) all of Builder’s employees receive six weeks’ training on any vehicle over 1/2 ton; (2) Builder is required to have written work policies submitted and approved by Insurer; (3) “any loss as a result of delay caused by acts consistent with written work policies approved by Insurer is deemed covered under the insurance policy”; (4) “Insurer is not responsible for delay losses that are otherwise the result of Builder’s or Buyer’s failure to perform or non-compliance with the terms of the insurance policy”; and (5) Insurer must be notified of and approve all modifications to the contract.
Builder submitted 90 percent of its work policies for review; the other 10 percent were followed but had not yet been written. On February 1, 2009, Builder advised Insurer that “all employees had received vehicle safety training except for a few new employees still in the pipeline.”
On February 14, 2009, Valentine’s Day, Employee was assigned to work the 2-ton bulldozer. This was Employee’s first day on the job and his first job ever. Employee ran the bulldozer without incident from 8:00 a.m. until 12:00 noon. Leaving the keys in the bulldozer, Employee went to lunch where he consumed wine. He returned at 2:00 p.m. inebriated and promptly drove the bulldozer into the existing building foundation, toppling most of the existing 3 stories of the partially completed building, causing a delay anticipated to be 6 months.
Builder maintains a written anti-alcohol/drug policy and prohibits their use at the construction site, the only exception being major holidays. Builder also has an unwritten practice that keys to vehicles must be returned to the project manager during lunch and at the end of the day. Also, employees are required to sign an agreement that they will indemnify the company for any loss resulting from the use of alcohol or drugs. Employee never read the agreement before signing.
Both Builder and Insurer have refused to pay Buyer’s claim of $1,000,000. Buyer has come to your law office seeking advice on how to recover $1,000,000. Prepare a memorandum identifying potential defendants, and detailing claims and defenses for all parties.
PREPARE THE MEMORANDUM
CONTRACTS — SAMPLE ANSWER A
Re: Potential Contractual Claims against Builder & Insurer & Employee
Given the delay in opening the building, you will have a strong case to recover the damages from Builder and/or Employee. The Insurer promptly and sufficiently disclaimed liability under the contract, and he will likely escape liability. However, the failure of the Builder to substantially perform the construction contract, and the failure to properly supervise its employee, will result in liability to the Builder.
Claims against Builder
Under the written agreement, Builder agreed to the liquidated damages clause. Liquidated damages are damages incurred as a result of any delay in the performance of a party to the contract. Courts will generally enforce such clauses, provided that the liquidated damages are (1) reasonable in light of the contract, and (2) actual damages are difficult to ascertain. Builder will likely argue that the liquidated damages claim was not reasonable, given that the entire price of the contract was $2,400,000. Since the liquidated damages clause is nearly one half of the entire price of the contract, Builder may be successful in claiming that the damages were not reasonable. Similarly, Builder may contend that the damages were not unascertainable, by pointing to potential tenants and occupants who have expressed an interest in the building. In other words, if Buyer has a reasonable approach to gauge the measure of damages (lost profits from loss of potential tenants), then that would be the appropriate measure for damages. Here, the reasonable lost profits from the delay in each month was measured at $200,000. Alternatively, a court may hold that the liquidated damages clause amounts to nothing more than a penalty, which are generally void as against public policy.
While the liquidated damages clause may be unenforceable in court, Buyer may still be able to obtain consequential damages as a result of the delay. Consequential damages are those damages that are reasonably foreseeable to the breaching party at the time of the contract. Here, Buyer calculated the cost of each month’s lost profits, and Builder had knowledge of these costs (as stated during the course of negotiations). Although the contract did not contain an explicit time of the essence cause, Buyer may be able to assert that time was indeed of the essence and the Builder had knowledge of such facts. Contracts are not presumed to constrain time of the essence clauses, and in the absence of such an explicit agreement, the court may examine prior dealings, performance, trade/custom usage in understanding the significance of the terms contained in the contract. Parol evidence may be used to introduce previous discussions that occurred before or at the time of the contract’s signing in order to explain or describe terms contained within the contract. Evidence is not admitted to alter or change the terms that are explicitly written in the agreement. Here, Buyer can argue that during the course of the prior dealings, Builder understood the time-sensitive nature of the contract and agreed to perform in a timely manner.
Builder may argue that, given the previous waiver of the design approval, Buyer waived the conditions of the contract. Generally, if a party waives some conditions, it is not assumed that it later waives all conditions. The contract required Buyer to approve the design, and Builder may assert that Buyer’s failure to do so resulted in a waiver of other conditions or a possible breach of the contract. However, the subsequent modifications did not alter the underlying transaction and contract. Builder may have a strong argument that, because of the Buyer’s delay in approving the design, the contract could not be completed by the deadline date because the breach was material. In determining whether a breach is material, courts examine whether the breach: imposes an undue hardship on the nonbreaching party, results from the negligence or reckless, occurs after the breaching party undertakes part performance. Buyer was required to submit a design by June 30, but failed to do so. Instead, Buyer continued to make modifications through February 2009, which may have substantially limited the Builder’s ability to complete the contract on time.
Given the negligence of its servant, the Builder may assert claims against the employee for failure to abide by the policies of the workplace. The employee will likely contend that the indemnification clause was unconscionable because it was procedurally and substantively unfair. Although the failure to read a clause will not invalidate it, the court may, on occasion, look into the unconscionability of certain conditions of contracts. However, the employee will not likely succeed on this claim because there is no evidence that he was procedurally or substantively a victim of undue surprise or oppression. He understood the contract, and the terms of the contract were themselves not unreasonable, since the contract is holding employees liable for their negligent/reckless actions. Even though employee did not read the terms, the court will not likely provide a defense for the unilateral mistakes of the parties, provided that the nonbreaching party does not know, or has reason to know, of any mistake in the contract.
Claims against Insurer
In the insurance contract, Builder breached the explicit condition by having a new employee operate the machinery. The explicit condition stated that all employees must receive 6 weeks of training on any vehicle over 1/2 ton. If a party fails to fulfill a condition of the contract, that breach will be deemed material if it resulted from the breaching party’s negligence or recklessness. Here, given that the novice employee was given a job that was explicitly reserved to more veteran employees, the breach will likely be deemed material. Further, the insurance contract explicitly provides that the Insurer is not liable for acts inconsistent with the policies, or responsible for any delay losses that are a result of the Builder’s failure to perform. Builder may contend that by providing notice of the employees who had not yet received training, and the failure of the Insurer to respond, constituted a waiver of the condition in the insurance policy. However, the insurance contract explicitly states that the Insurer must approve of all modifications in the contract. Mere absence of refusal cannot constitute a valid waiver of this condition to the contract, so the Builder will be liable for the breach in the insurance contract. In sum, the breach by the Builder was a material breach and courts will likely enforce the exculpatory clause in the insurance contract providing that the Insurer disclaims all liability.
Claims against Employee
Buyer may assert claims against the employee, as stated above. The employee will likely be liable to the Builder for actions undertaken within the scope of the employment.
CONTRACTS — SAMPLE ANSWER B
From: Associate at Law Office
RE: Buyer’s claims and defenses against all potential defendants
Buyer v. Employee
The Buyer may successfully assert an action against the Employee for the delay losses caused by the Employee’s. The issue is whether the Employee may be held liable for these losses. Vicarious liability makes the employer liable for any damage cause by the employee when the employee is acting within the scope of the employees duties or consistent with the rules and regulations of the employer. Thus, an employee may be held liable for damages caused when the employee was not acting in the scope of their duties. Here, the Builder is the Employees employer. The Builder maintains a written anti-alcohol/drug policy and prohibits their use at the construction site, the only exception being major holidays. The Employee on Valentines Day, not a major holiday decided to go to lunch where he consumed wine and returned to work inebriate. The Employee was assigned to work the 2-ton bulldozer promptly drove the bulldozer into the existing building foundation, toppling most of the existing 3 stories of the partially completed building. The Buyer must argue that the employee was not acting within the scope of his duties because he drank on the job, thus should be liable for the delay he causes (6 months of delay). The Buyer will likely be successful and able to sue the Employee for delay damages. The Buyer may recover expectation, and incidental damages. Expectation damages would place the plaintiff in the position the he would have been in had the breach not occurred and had the contract been fully performed. Incidental damages are those costs that occur due to the breach. The expectation damages will be the $200,000 per month until the building is completed and incidental damages will be anything that cost the Buyer money as a result of the Employee.
The Employee may unsuccessfully defend against any claim which the Buyer asserted based vicarious liable. The Employer had the written policy regarding alcohol and Employee abided by the policy. Valentines day is a major holiday and the Employee followed the policy and only used alcohol on Valentines Day (the major holiday).
Buyer v. Builder
The Buyer has a claim against the Builder for breach of contract to complete the building by March 1, 2009. The issue is whether the Builder breach the contract and if so what damages is the Buyer entitled to receive from the Builder. In order to have a valid contract there needs to be (i) an offer (ii) acceptance and (iii) consideration. Consideration may be in the form of a bargained for detriment. This is a service contract and thus the common law of contract law controls. A service contract may not be revoked once performance has begun. Here, the Buyer and Builder had a valid contract. The Builder was to build a six story building by March 1, 2009 and the Buyer was to pay the builder $2,400,000 for the building of that said building. Here the Builder breach the contract with the seller because the building was not to be completed until 6 months after February 14, 2009. Within the Buyer and Builder’s contract there was a liquidated damages clause. The clause states “of “1,000,000 that would take effect if the building was not completed on time.” Therefore, Buyer should be able to receive 1,000,000 from the Builder since the building was not to be completed until 6 months after February 14, 2009 which is beyond March 1, 2009 date which the contract states the building had to be completed by. If the court finds that the liquidated damages clause is unenforceable, the Buyer may recover expectation, incidental damages and consequential damages. Expectation damages would place the plaintiff in the position the he would have been in had the breach not occurred and had the contract been fully performed. Incidental damages are those costs that occur due to the breach. Consequential damages are those costs that the Builder had notice of from the Buyer at the start of the contract. Here, the Buyer would be entitled to expectation costs from March 1, 2009 until at 5 months later (since it was 6 months February 14, 2009). The Buyer knew that he would lose around $200,000 per month for any delay after March 1, 2009, making the expectation damages around $1,000,000 ($200,000 *5 months). The incidental costs to the Buyer may include costs associated if he was renting out the building and had to pay his tenant for damages due the Builders breach. Furthermore, the Builder knew that the “there would be significant costs associated with any delay in completion,” thus it is possible that more that the Builder may be liable for consequential damages which the Buyer had warned the Builder about if the building would not be complete.
The Builder may successful defend against the liquidated damages clause. The issue is whether the liquidated damage clause within the parties contract is enforceable. A liquidated damages clause in a contract will be upheld when (i) the potential damages are speculative (ii) it is reasonable (iii) and there was a necessity for such a clause. Here, the damages from the Buyer-Builder contract are not speculative because the Buyer had calculated that it would lose $200,000 per month for any delay beyond March 1, 2009. The $1,000,000 is not a reasonable figure knowing that the damages would be calculated at around $200,000 per month after March 1, 2009. There was therefore no necessity in having this clause because the damages would have been calculable when a breach occurred. Therefore, the liquidated damages clause would not be enforceable.
The Builder may unsuccessful defend that the contract was not breached because it was modified due to the Builder accommodating the Buyer. The issue is whether a modification to a common law contract has occurred. A modification to a common law contract requires consideration. Here, the Builder accommodated four requests by Buyer to significantly modify the design of the building. The final design approval was supposed to be by June 30, 2008 but instead the modifications occurred during June 2008 and February 2009. The Builder did not receive any consideration for the modification of the contract, therefore the modifications did not change the Builder-Buyer’s contract. The Builder could have asked for additional time to complete construction of the building due to the modifications but did not. Therefore, the Builder will be unsuccessful in defending that a breach did not occur because of a modification.
The Builder may unsuccessful defend that contract is impossible, impractical or frustrated due to the Employee driving the bulldozer into the existing foundation, toppling most of the existing 3 stores. The Issue is whether the contract was in fact made impossible to before, impractical or frustrated. A contract may be made impossible, impractical or frustrated when (i) someone occurs that would not known at the time contract was formed (ii) the occurrence was unexpected (iii) it either make the contract impossible, impractical or frustrated. Here, at the time the contract was formed it was not known that the Employee would drive the bulldozer into the building, the occurrence was unexpected. The result of this occurrence did not make the contract impossible since the Builder can just rebuild the building. The result did not frustrate the purpose of the contract because the Builder can still rebuild. It is possible that the result did make the contract impractical, since it would be very expensive for the Builder to start from scratch and rebuild the entire building.
Builder may indemnify from the Employee if the Builder if found to have violated the contract. The Builder requires employees to sign an agreement that they will indemnify the company for any loss resulting from the use of alcohol or drugs. As stated above, the Employee will be found to have acted out of the scope of his employment and not in accord with the Builder policies. Therefore, the Builder may be able to recover from the Employee
Buyer v. Insurer
The Buyer may assert and unsuccessful claim against the Insurer for the insurance money for delay losses. The issue is whether the Buyer is a third party beneficiary to the contract between Buyer and Builder. A third party beneficiary is able to receive their compensation when they are (i) not an incidental beneficiary (ii) and their rights have vested. Here, Insurer and Builder had a contract for the benefit of Buyer, Buyer knew of the arrangement thus Buyer’s rights had vested. The Buyer and Builder had a contract that required the Builder to “obtain and maintain an insurance policy from the Insured, naming Buyer as the insured.” Buyer may sue Insurer then for payment of the money, as stated in clause (3) when “any loss as a result of delay caused by acts consistent with written work policies approved by Insurer is deemed covered under the insurance policy.” Therefore, Buyer may recover the delay costs from the Insurer.
The Insurer may defend against Buyer claims with any defense that Insurer would have been able to assert against Buyer. The issue is whether the Builder breached his contract with the Insurer. Here, Insurer will assert that the Builder breached the contract with the Insurer making himself liable for the damages opposed to the Insurer. Here, The Insured and Builder had a valid contract. The Builder will be found to have breach the contract if he failed to maintain the insurance policy from the Insured. The insurance policy provided (1) all of Builder’s employees receive six weeks training on any vehicle over 1/2 ton (2) Builder is required to have written work policies submitted and approved by Insurer (3) “any loss as a result of delay caused by acts consistent with written work policies approved by Insurer is deemed covered under the insurance policy” (4) Insurer is not responsible for delay losses that are otherwise a result of Builder’s or Buyer’s failure to perform or non compliance with the terms of the insurance policy and (5) Insurer must be notified of and approve all modifications to the contract. If it is determined that Builder did not breach the contractual obligations outline above, the Insurer must pay the Buyer the insured amount, but if the Builder did breach the contract with the Insured (that he was required to have by the Buyer), the Builder will be liable for all damages that result. Here, concerning clause (1) Employee was operating a 2-ton bulldozer on his first day of the job, and had likely not received his six weeks training this vehicle because as noted by the Builder “all employees had received vehicle safety training except a few new employees still in the pipeline.” Therefore, the new employee did not receive the required training to operate a vehicle over 1/2, and this is a material breach. Concerning clause (2) the Builder submitted 90% of its work policies for review, and the other 10% were not handwritten. This is likely not a material breach but almost all of the policies were written down, since clause (2) does not require “all” polices to be written and submitted for Insurer approval. Since the Builder committed a material breach to the Insurer-Builder contract, the Builder as sated in clause (3) and (4) will not be liable for delay losses. Therefore, the Builder breached his contract with Insured and Insured is therefore not liable to pay Buyer the Insurance.
QUESTION 7 — CIVIL
Home Purchaser (“Purchaser”) sued Lender and Mortgage Broker (“Broker”) for fraud. Purchaser alleges Lender and Broker offered him a mortgage loan with an option to pay, on a monthly basis, interest only. The closing documents did not provide Purchaser the interest-only option. Purchaser closed on the loan nonetheless. Lender maintained the closing documents reflected the deal. Broker claimed Lender told him Purchaser would receive the interest-only option, and Broker told that to Purchaser.
Broker’s attorney submitted Broker’s answer with counter-claims and cross-claims for fraud and indemnification to the court for filing and served the answer on the parties. The court returned the answer to Broker’s attorney unfiled because Purchaser’s complaint had been administratively dismissed for lack of prosecution. The court later reinstated Purchaser’s complaint but, in the interim, Broker’s counsel withdrew from the case and never resubmitted Broker’s answer. Lender, however, filed an answer to Purchaser’s complaint.
At this point, Broker suffered a nervous break down, was hospitalized, lost his job, and lost his home to foreclosure. Broker eventually recovered and began to put his life back together.
Discovery proceeded. Broker did not participate in deposing Purchaser or Lender. Broker was deposed without an attorney by Lender and Purchaser. Two months ago, Purchaser filed for default against Broker for “failure to plead or defend” but sent the notice to Broker’s former attorney and foreclosed home. The court entered default against Broker shortly thereafter.
Lender moved for summary judgment against Purchaser and Broker. Lender alleged Purchaser had committed mortgage fraud, with Broker’s knowledge, by deliberately overstating his income. Purchaser opposed the motion for summary judgment, but Broker did not respond to the motion. The court granted summary judgment against both 19 days ago on the ground a participant in mortgage fraud is precluded from pursuing a separate action that arises from his fraud.
The court scheduled a proof hearing on the amount of Purchaser’s damages in two weeks. Broker comes to your law firm and asks for help. Prepare a memorandum setting forth what actions can be undertaken and what arguments can be made on Broker’s behalf, what defenses or counter arguments the adversaries can raise, and the likelihood of success of the actions, defenses, and arguments.
PREPARE THE MEMORANDUM
CIVIL — SAMPLE ANSWER A
Re: Broker’s problems
The first thing we need to try and do is set aside the default judgment on the grounds that our client, Broker, had a good excuse for his delay in responding to the complaint and that, even if his attorney’s neglect is no excuse, his physical condition may have been. We should also try to get default set aside on grounds that Broker had no notice of the proceeding and no diligent attempt was made to find broker.
A party has 35 days to respond to a complaint in NJ with an answer or a pre-answer motion for dismissal. When a party fails to answer to the complaint against him, the other party may move for a default judgment against defendant. However, default is not favored by the courts and they will usually do all they can to avoid it. In fact, the rules allow party to move to set aside a default judgment for good cause. What constitutes good cause is not set in stone, but it needs to be more than mere neglect or delay. Often, attorney delay is a cause and courts have been reluctant to enter default against a client because his attorney was late in filing an answer. Here, the situation is more egregious. The attorney withdrew from the case before resubmitting Broker’s answer. Even if attorney’s withdrawal was proper — and I shall assume it was — he had an obligation under the Rules of Professional Conduct to give his client his file back and to tell him that he had better file an answer soon or risk default. An attorney can’t withdraw in a manner that prejudices his client and this attorney did. The court should, therefore, allow broker to resubmit his answer and remove the default judgment.
Alternatively, broker’s mental and financial condition may have prevented him from acting as quickly and responsibly as he should have. The court may take pity on broker and allow him a chance to resubmit.
Another argument that should be made to get default removed is that broker had no notice of the motion. By it’s nature, a default judgment is ex parte because the other party did not show up to contend it. Ex parte motions are disfavored and proper notice is required in most motion situations, including default. Personal service is preferred in NJ, with the motion being given to the other side’s attorney. That was done here, but the attorney failed to forward it. Notice is also proper under first class mail to defendant’s last known address. That, too, was done. But, Broker had lost his home. There is no doubt that Purchaser complied with the service rules, but the court should have taken the fact that this was a default proceeding into account and ordered special, expedient service to defendant broker, including a diligent search for him, before it entered default. This was not done, but diligent effort is a requirement of the court rules, and it was not fully complied with. Taking all these grounds into account, the court should allow the broker to submit his answer or motion to dismiss and remove entry of default.
Once this done, we need to expeditiously appeal the summary judgment ruling or at least move the trial judge to reconsider the entry of summary judgment. The order of summary judgment was made based on broker’s default; i.e., because he defaulted, he was liable for fraud and had no defense as a matter of law. If default is removed, the grounds for the judge’s ruling will no longer — as to Broker — be valid. As such we should move the judge to reconsider his ruling. A motion for reconsideration is proper when new, previously unknown facts arise immediately after trial that, had they been known, would have altered the judge’s ruling. Such motions are common in discovery matters, but less common on final judgments like a motion for summary judgment. Nonetheless, it is worth the effort to try. I believe the time limit for such a motion is 20 days from entry, so we must do so immediately.
Alternatively, we should appeal the summary judgment decree. It is a final judgment and thus, under the court rules, is appealable within 40 days of entry. Thus, if we are going to appeal, we must do so in the next 21 days. The grounds for such an appeal would be that the standard for summary judgment is not met. In a summary judgment proceeding, under the standard articulated in Judson, summary judgment is appropriate where there is no genuine issue of material fact in dispute and the parties are entitled to judgment as a matter of law. If default is removed, the basis of the judge’s decision — that the broker committed fraud — is gone because whatever collateral estoppel effect the default judgment had on his counter-claim would be lost. Thus, there would, for Broker, be material issues of fact in dispute and Lender would not be able to get judgment as a matter of law. Of course, the lender will oppose on the ground that the ruling was proper based on the collateral estoppel and res judicata effect of the default judgment, but the problem with their argument is that a default judgment is not a judgment on the merits. And, where default is lifted, it’s as if a complaint that was dismissed without prejudice was now properly interposed. As such, the default judgment has no collateral estoppel or res judicata effect anymore and the lower court must, as a purely logical matter, be reversed in the interests of justice.
The court rules exist to ensure timely prosecution of cases and are not supposed to endorse or help late filers and those who refuse to assert their rights. But, where a party fails to assert through no fault of his own, the rules give courts the discretion and power to right a wrong. While our burden is getting the default judgment lifted and the summary judgment order reversed is high, the reprehensible conduct of broker’s attorney and the failure of purchaser to make a diligent effort to serve the notice of the default hearing on Broker give us a good shot of success.
CIVIL — SAMPLE ANSWER B
To: Assigning Attorney
Date: July 30, 2009
Re: Broker’s Case: Possible Defenses, Counter-arguments, & Chance of Success
Per your instructions, I have prepared a memorandum identifying potential defenses, counter-arguments the adversaries can raise, and the likelihood of success.
Appeal of Summary Judgment Motion
First, Broker should file an appeal from the court’s grant of summary judgment. The issue here is what is the proper timing, standard for review, and timing for appeal of a motion for summary judgment.
Summary judgment is a motion filed by any party to a civil litigation, which is a motion to dismiss the case on the merits, and it can be filed after the defendants submit their answer; in some jurisdictions, the motion for summary judgment may be made by defendants before or with their initial answer. A motion for summary judgment will be granted where a court determines that there are no genuine issues of material fact. The court will apply the law to the case and make a ruling regarding the outcome. Here, Lender moved for summary judgment against Purchaser and Broker after its own answer was filed but before Broker filed its answer. Therefore, Broker could argue that Broker’s motion for summary judgment was premature. However, Broker did not file an answer at all, let alone a timely one. Therefore, this is unlikely to be a proper defense by Broker.
However, summary judgment should only be granted where, after discovery, the court determines that there are no disputed or genuine issues of fact on the underlying claims. The court should not dismiss a case on a motion for summary judgment on the grounds that parties are precluded from pursing separate claims. Rather, a court should either stay or dismiss those claims, without prejudice, so that the claims may be brought in the proper action. Here, the court improperly granted summary judgment against Purchaser and Broker because the court believed their actions were precluded by another action. However, the court ruled incorrectly. The court did not determine that there were no material issues of fact. Therefore, Broker should appeal the court’s grant of summary judgment against him.
A court order granting a motion for summary judgment must be filed within 30 days from the court’s order is issued. Therefore, Broker has 11 days to file his appeal of the court’s motion for summary judgment to the appellate court that oversees this court.
Vacate Broker’s Default Judgment
Second, Broker should file a motion to appeal the default judgment against him for “failure to plead or defend.” The issue here is when and under what circumstances may a court vacate a default judgment against a party for “failure to plead or defend.”
Ordinarily, a default judgment against a party will stand unless that party can show that the good cause for the default judgment and a winnable argument on the merits of the underlying case. In most jurisdictions, the defaulting party has one year from entry of judgment to appeal. Here, Broker has good cause to have the court vacate the default judgment because the notice was sent to Broker’s former attorney and was sent to his foreclosed him. While leave and mail service is proper as a last resort, the best service for initial process is personal service. After personal service, all litigation papers should then be served upon a party’s current attorney and mailed to the defendant’s current residence. Here, Purchaser sent the notice to Broker’s former attorney and foreclosed home. The former attorney should have notified Purchaser that he was no longer Broker’s attorney, in which case Purchaser should have sent the notice to his proper attorney or personally served Broker; if the former attorney did not so notify Broker of the notice, then that would also be good cause. Moreover, Broker’s nervous breakdown and hospitalization would also likely qualify as good cause.
Broker does have a meritorious defense here because it was Lender, not Broker, who appeared to have committed the fraud. While this is an issue for a fact finder to decide, it is nevertheless a winnable issue on the merits. One year does not appear to have elapsed since the default judgment, so Broker would be within the time frame to appeal the default judgment.
Re-filing of Broker’s Answer
Finally, Broker should try to re-file his answer to Purchaser’s original complaint. The issue here is whether a complaint that is refiled by the opposing party will permit a late filing of an answer.
Where a plaintiff’s complaint is administratively dismissed for lack of prosecution, but later reinstated, the defending party or parties will have an opportunity to file an answer to the reinstated complaint. However, if the defending parties should default on the time allowed to file their answers, then a default judgment will be entered against them on the reinstituted complaint. Here, after Purchaser refiled his complaint, Broker never filed his answer. Therefore, on its face, Broker would not be able to file an answer.
However, Broker can make a defense to his failure to timely file an answer because most jurisdictions allow for tolling of the statute of limitations where a defendant is either removed from a jurisdiction (without fault) and does not meaningfully participate in the proceedings. Here, defendant suffered a nervous breakdown and was hospitalized. Therefore, Broker was arguable incapacitated and possibly even removed from the jurisdiction (without fault). Certainly, Broker did not meaningfully participate in the proceedings. Therefore, the court should allow Broker to re-file his answer to the complaint.
One important note is that this tolling of the statute of limitations (or exception) for the Broker would be unavailable if the other parties would suffer prejudice as a result. However, on these facts, it does not appear that any of the parties would suffer prejudice by allowing the defendant to file his answer at this point. This would be a tough argument.