July 2024 Questions and Sample Answers
July 2024 Questions
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July 2024 Sample Answers
MPT-1
Sample Answer
MEMORANDUM
TO: Hannah Timaku
FROM: Examinee
DATE: July 30, 2024
RE: Laurel Girard matter
Questions Presented
1. Whether Girard's nonpayment of $150 of rent in violation of Paragraph 2 of her lease is a valid basis for termination of her tenancy.
2. Whether Girard's possession of her emotional support cat in violation of Paragraph 15 of her lease is a valid basis for termination of her tenancy.
Brief Answers
1. Mostly likely, yes. Girard's nonpayment of the $150 out of the $1,650 owed is not de minimus, this is likely a material breach and valid basis for terminating her tenancy.
2. Most likely, no. Girard's cat is an assistance animal and thus she is allowed under the Franklin Fair Housing Act to possess this pet without paying an additional fee.
Discussion
The lease in question falls under the Franklin Tenant Protection Act, which states that the owner of the residential real property shall not terminate the tenancy without just cause, which shall be stated in the written notice to terminate tenancy. Section 500. Just cause includes a material breach of the term of the lease or maintaining or committing a nuisance. Section 501. Leases may only be terminated for a material breach, not for "a mere technical or trivial violation." Kilburn v. Mackenzie (Fr. Sup. Ct. 2003). To be material, "the breach must go to the root or essence of the agreement such that it defeats the essential purpose of the contract or makes it impossible for the other party to perform." Id.
1. Girard's nonpayment of $150 of the total $1,650 is likely a material breach and thus is a valid basis for terminating her tenancy.
Girard's nonpayment of $150 is more than a de minimus amount compared to the $1,650 total rent owed and thus is likely a material breach that qualifies as just cause for terminating her lease. The Franklin Tenant Protection Act requires that an owner of a residential real property shall not, within any 12-month period, increase the rental rate for a dwelling or a unit more than 10 percent. Section 505. Nonmonetary covenants and clauses for a tenant's benefit are more likely to be found to be non material breaches and not valid bases for terminating a lease. Westfield Apartments v. Delgado (Franklin Court of Appeal 2021).
A de minimus rent shortfall is not a material breach. In Vista Homes v. Darwish, the court held that a tenant's failure to pay $10 of the total $1,000 owed to the landlord was not a material breach because the shortfall was only 1% of the amount owed, which was found to be de minimus. Vista. Here, Girard's rent shortfall is $150 of the total $1,650 owed for the month of July. This amount is about 10% of the total amount owed, much more than the amount at issue in Vista. The 10% shortfall is not likely to be found to be a de minimus because it is much greater than the $10 outstanding in Vista. Additionally, because this is a monetary covenant in the lease, in addition to being more than a de minimus shortfall, Girard's breach is likely to be viewed as material.
Further, the rental increase was valid under the Franklin Tenant Protection Act, so Girard is likely to be liable for the entire amount. Section 505 of the Act prohibts more than a 10% increase in rental rate within a 12 month period, as does Paragraph 3 of Girard's rent. Since Girard's lease began in January 1, 2023, the rental increase eighteen months later in June 2024 was permitted. Further, under any timeline, the increase was for 10%, not greater, so Girard is bound by the $1,650 amount.
As required under the Act, Girard received a written notice of her breach that described her breach and gave her an opportunity to cure her violation. Section 501(b). The written notice informed her that she had 3 days to pay the outstanding amount to avoid being subject to an eviction notice.
Thus, if Girard does not want to be subject to suit, she should pay the outstanding $150 and $50 late fee to her landlord, Hamilton Place, LLC by cahsier's check or money order as required in Paragraph 10 of her lease.
2. Girard's posession of a cat is likely not a valid basis for terminating her lease because she is permitted to possess it under the Franklin Fair Housing Act as an assistance animal for no additional fee.
Girard is permitted to have her cat as a qualified assistance animal to alleviate her symptoms of anxiety under the Fair Housing Act, so she is not in breach of her lease because the Fair Housing Act's provisions override her no-pet policy. The Franklin Fair Housing Act states that tenants are permitted to have assistance animals in all dwellings. Section 756(b). An assistance animal is defined as a service or support animal that provides emotional, cognitive, physical, or similar support that alleviates one or more identified symptoms or effects of an individual's disability. Section 755(o). A support animal is an animal that provides emotional, cognitive, or other similar support to an individual with a disability. Section 755(n).
A mental disability under the Fair Housing Act includes, but is not limited to, having any mental or psychological disorder or condition that limits a major life activity, including anxiety. Section 755(c)(i). Information confirming that an individual has a disability or that an individual has a need for a related accomodation, may be provided by any reliable third party who is in a position to know about the individual's disability or related need for an accomodation. Section 756(b). Girard has a mental disability as defined in the act because she has anxiety, which often causes her to have panic attacks. Her medication does not alleviate all of her symptoms. Girard has been under the care of a therapist, Sarah Cohen, for four years, who recommeded that she get an emotional support animal to help her with symptoms. Sarah Cohen, a licensed professional counselor, has provided a letter confirming Girard's disability as a mental health condition under the Fair Housing Act and the need for her to have an emotional support animal to mitigate her symptoms of anxiety. This letter and Girard's mental health condition qualify her for protection under the Fair Housing Act's assistance animal provision.
A support animal need not be trained or certified to qualify as an assistance animal. Section 755(n). Girard's cat, Zoey, falls under the defintion of assistance animal because she alleviates her symptoms of anxiety. Thus, Girard is permitted by law to keep her as a pet. Zoey provides emotional and cognitive support to Girard that alleviates her symptoms of anxiety because she has fewer panic attacks, feels less overwhelmed, and feels that she can handle anything, "no matter how stressful or challening." It is immaterial that Zoey is not trained or certified or that she was adopted from an animal shelter because she still qualfies as a permitted assistance animal under the definitions in the Act. Girard's anxiety is a qualifying disability and because Zoey provides symptom alleviating support, Girard must be permitted to keep her.
Although harboring pets has been found to qualify as a material breach of a lease, this is not the case for assistance animals under the Fair Housing Act.
Westfield Apartments.In Sunset Apartments v. Byron, the court held that there was a material breach of the lease when a tenant was found to be harboring a pet when the lease contained a no-pet clause. Girard's case is different from that in Byron because Zoey is not an ordinary pet, but is instead an assistance animal. Although her lease contains a no pet clause requiring her to get the landlord's permission first, the Fair Housing Act permits assistance animals in all dwellings. Section 756. Further, the Fair Housing Act states that an individual with an assistance animal shall not be required to pay any pet fee, additional rent, or additional fee. Section 756(c)(i). Thus, Girard cannot be required to pay the pet fee and additional monthly rent described in Paragraph 15 of her lease.
With our assistance, Girard should provide her landlord with a copy of the letter from her therapist and provisions of the Fair Housing Act allowing her to keep Zoey without additional rent. We can provide her with a letter outlining the relevant provisions of the Act that permit her to keep Zoey and to excuse her from the pet fee and any additional rent payments. Although there are limits in the Act, such as when pets pose a threat of of health or safety or substanstial damage, there is no evidence that Zoey, a cat, falls under any of these limitations. Section 756(c).
Further, Westfield Apartments provides support for holding that Paragraph 20 of the lease is invalid as against public policy as a unilateral forfeiture clause. Westfield Apartments. The court held that they would not uphold forfeiture clauses that would result in frivoulous litigation because of the public policy of protecting tenants from unequal bargaining power. Id. Here, Paragraph 20 is a unilateral forfeiture clause that may be unenforceable as a matter of public policy. However, nonpayment of rent is likely not to be viewed to be frivolous.
Conclusion
First, Girard should mostly likely pay the outstanding $150 and $50 rental fee by money order or cashier check because this breach is likely to be material. However, Girard's possession of Zoey is likely not a material breach because she is permitted to keep her under the Franklin Fair Housing Act. With our assistance, she should provide the landlord with her therapist's letter and relevant provisions of the law entiting her to have an assistance animal and excusing her from an additional fee.
Sample Answer
Date: July 30, 2024
To: Hannah Timaku
From: Examinee
Re: Laurel Girard Eviction Dispute
I. Introduction
Below is an analysis of the case regarding Laurel Girard. Specifically, the memo discusses (1) what law applies in this dispute, (2) whether Ms. Girards failure to pay rent is grounds for termination, or (3) whether violation of the no pet policy are grounds for termination of the lease. Please do not hesitate to contanct me with any questions or concerns regarding the analysis below.
II. Analysis
i. Whether the lease in question is subject to the Franklin Tenant Protection Act (FTPA)
Section 500 of the Franklin Tenant Protection Act (FTCPA) applies to owners of residential real property and their lease agreements with tenants. Owner includes any person or agent having the right to offer residential property for rent. §500(1). Residential Real Property includes dwellings meant for human habitation. §500(b)(2). Tenant means any person lawfully occupying a residential real property for 30 days or more. §500 (b)(3)-(4). Under the FTCPA, an owner of residential real property cannont terminate a tenancy of a tenant for 12 months without just cause. § 500(a)
Here, Hamilton LLC has offered and provided residential real property for rent. Girard has lived lawfully at Hamilton Place Apartments for 18 months, qualifying her as a tenant. Additionally, § 500(a) "just cause" provision applies to her givent the length of her tenancy. Hamilton Place Apartments qualifies as a dwelling for human habitation.
Accordingly, the applicable FTPA provision applies to Girard's lease with Hamilton LLC.
ii. Whether the Violation of Failure to Pay Rent is Sufficient for her Eviction
Under the FTPA, an owner of residential real property cannont terminate a tenancy of a tenant for 12 months without just cause. § 500(a). Just cause includes inlcudes material breach of a lease term or mantaining or committing a nuisance. §501(a). These rights may not be waived, §501(g), even by a forfeiture clause. Westfield LLC v. Delgado (Fr. App. Ct. 2021). Prior to commencing eviction proceeedings, "the owner shall first give notice of the violation to the tenant with an opportunity to cure the violation." § 501(b). Lastly, "an owner of real residential property shall not, within any 12-month period, increase the rental rate for a dwelling or unit more than ten percent. §505.
A lease may only be terminated for a material breach, "'not a mere technical or trivial violation.'" Westfield LLC v. Delgado (Fr. App. Ct. 2021) (citing Kilbrun v. McKenzie, (Fr Sup. Ct. 2003). The breach "must go to the root or essence of the agreement...such that it defeats the essential purpose of the contract or makes it impossible to perform under the contract." Id. (internal citations omitted). This includes agreements attempting to dispense the materiality provision. Id. Payment of rent in accordance with the lease is an essential obligation of a tenant, and failure to properly discharge this obligation is grounds for termination of the lease. Id.
In Westfield, the Appellate Court reversed the forfeiture of a lease agreement and the termination of defendant tenant's tenancy. Id. It held that the failure to obtain insurance coverage was not a material breach; therefore, it was insufficient grounds for terminating the tenancy. It likened it to Vista Homes v. Darwish (Fr. Ct. App. 2005), where the tenant failed to pay $10 of the $1000 rent owed to the landlord. While the court noted that payment of rent is an essential term, because the rent shortfall was 1%, it was not material.
Moreover, the court in Westfield held that because the clause involved a nonmonetary covenant and a provision that is for the tenant's benefit, default thereof does not justify owner's termination of the tenancy.
Here, Hamiliton will likely argue that the failure to pay rent constitutes a material breach, accordingly, termination of the lease based on the failure to pay rent is justified. Paying rent is an esential obligation of the tenant. Pursuant to her lease, Girard must pay rent in full by the third day of every month. Unlike in Vista Homes, where the rental shortfall was $10 and 1% of the rent owed, Girard's breach is of 10% of the rent owed. This is less likely to be viewed by the Franklin Courts as a de minimis shortfall than the 1% shortfall in Vista Homes.
Additionally, this provision differs from the insurance provision in Westfield. While the provision in Westfield was a nonmonetary covenant, the obligation to pay rent was an essential monetary covenant. Unlike in Westfield, where the provision was for the Tenants benefit, the obligation to pay rent is solely for the owner's benefit. Again, this points to the breach being material, meaning the breach by Hamilton is justified.
Two arguments Girard may have is that (1) this termination violates public policy, and (2) that the rental increase violated § 505 of the FTPA. This provision only applies to increases in rent more than ten percent after within a 12 month period.
In Westfield, the court noted the imbalance of power between landlords and tenants as a reason for the enaction of the FTPA, along with the shortage of affordable housing. Westfield. Specifically, they found that allowing the use of plaintiff's forfeiture clause would allow landlords to strategically circumvent FTPA's just cause eviction requirements and pretextually disguise them. Id. Here, we may be able to argue that termination of the lease pursuant to the forfeiture clause in Hamilton's lease also violates public policy. However, this argument would likely fail. There is just cause for termination of the lease regardless of the use of the forfeiture clause in the lease. Additionally, Hamilton has provided Girard time to cure the default, which is favorable in the eyes of public policy. So long as the chance to cure is provided and she pays the 150 and the late fee, and Hamilton accepts that, there is no public policy argument.
Lastly, Girard has no argument under the FTPA. Here, the increase in rent occured during the periodic tenancy period of Girard's lease, and it was a ten percent increase exactly.
Thus, Girard's failure to pay 150 is a material breach justifying termination of her lease. If she cures the shortfall in proper time, she can continue living there.
iii. Whether the Violation of No Pet policy allos for Girard's Eviction
a. Whether Girard has a qualified disability and her cat is a service animal
Pursuant to Franklin Fair Housing Act, tenants with disabilities are permitted to have assistance animals in all dwellings, including public use and common areas. Franklin Civil Code (FCC) § 756(a). Disability should be broadly construed to mean an include mental disabilities. §755(b). These include mental or psychological disorders including anxiety. § 755(b)(i). Support animals include those that provide emotional, cognitive, or other similar support to a person with a disability. § 755(m). They need not be trained or certified. Id. Assistance animals include those that provide emotional, cognitive, or other similar support that eleviates one or more symptomes or effects of a disability.
Here, Girard has clear evidence that she has a mental disabiltiy, namely anxiety. She often feels overwhelmed and has panic attacks. Shes treated her anxiety all her life with medication and therapy; however, these treatments do not aleviate her symptoms. Thus, her anxiety qualifies under the applicable law as a disabilty.
Moreover, Zoey qualifies as a support animal and assistance animal. Six months ago, Girard's therapist recommended a support animal as a treatment. After Girard's work schedule switched, she got Zoey from the shelter. As stated above, the fact that Zoey is not trained is immaterial to whether she is a support animal. Girard is very attached to Zoey and has noticed dramatic improvements in mental well-being because of the cat. Snuggling with the cat and petting the cat help with Girard's panic attacks and relax her. Zoey is a typical pet, rather than a wild animal.
Accordingly, Zoey qualifies as a support animal and assistance animal under the FFHA.
b. Whether provisions in the Lease Violate the FFHA
Pursuant to Franklin Fair Housing Act, tenants with disabilities are permitted to have assistance animals in all dwellings, including public use and common areas. § 756(a). Information confirming the person's disability, or confirming the need for the disability related accomodation, may be provided by any third party in a position to know about the persons disability, including a medical professional or healthcare provider. § 756(b). An individual with an assistance or support animal cannot be required to pay any pet fee, additional rent, or other additional fee, in connection with the animal. § 756(c)(i). Reasonable conditions that do not interfere with the normal performance of the animals duties may be imposed by the property owner; additionally, the tenant with a disability may be required to cover costs of repair for damage the animal causes. § 756(c)(ii), § 756(c)(iv).
Here, two weeks ago, the manager of Hamilton Place learned about Zoey. After learning that Zoey was a support animal, the manager scoffed and said whatever. That day, Girard asked her therapist for, and her therapist sent, a letter explaining Zoey's support animal status, Girard's disability, and the need for Zoey. This qualifies under the Fair Housing Act as reliable notice from a third party. Once this letter is received by Hamilton, they cannot breach her tenancy due to Zoey being on the premisis.
Moreover, Hamilton LLC cannot include the no-pet clause as it stands in their lease. There is no exception for service animals, such as support animals like Zoey, making it void under public policy. See e.g. Westfield. The provision requiring additional rent and pet deposit is a violation of § 756 outright. Hamilton may however, under § 756(c), ask Girard to pay for damage which Zoey causes as well as placing reasonable conditions on Zoey which do not interfere with her duties.
Thus, termination based on the no-pet policy is not allowed. Zoey has a right to stay on the premisise with Girard as her service animal.
III. Conclusion
Overall, it is likely that Gerard's failure to pay rent constitutes a material breach which justifies the termination of her lease. However, if she cures the violation via paying the rental shortfall as well as the $50 late fee via cashier's check or money order, she should be able to stay on the premisise.
Additionally, the no pet policy by Hamilton LLC violates public policy, specifically the FFHA, and is void as a matter of law. Girard must give the letter to Hamilton LLC's agent as proof of her need of Zoey. Hamilton LLC must continue to let the pet stay on the premsise. Hamilton LLC may also not require Girard to pay the pet deposit and additional monthly rent.
MPT-2
Sample Answer
MEMORANDUM
To: Damien Breen
From: Examinee
Date: July 30, 2024
RE: Sidecar Design Matter
I. Introduction
This dispute arises from Sidecar's work on a web-based payment system for CDI. According to Davis, one of Sidecar's own employees, John Smith accessed the payment system, billed one of CDI's customers, and transferred the money to himself.
II. Is Sidecar Design liable to CDI under the CFAA?
The CFAA applies in both civil and criminal contexts and covers information from any "computer used in or afecting interstate or foreign commerce or communication," which applies uniformly to computers that connect to the internet. Van Buren. This dispute is governed by the CFAA as the computer at issue connected to the internet to make transfers of cash.
To maintain a civil action under the CFAA, a plaintiff must show that the defendant accessed a computer either "without authorization" or in a way that "exceeds authorized access." 1030(a). In Van Buren, the defendant was a police sergeant who reached the department database via his login credentials and there was no technical barrier to accessing the information at issue; there was only a departmental policy barring him from accessing said information. There, the Court reversed Van Buren's conviction finding that he did not "exceed authorized access" because he had the technical right to access this information.
Here, a similar principle applies. John Smith, an employee of Sidecar is presumed to act on behalf of Sidecar for purposes of this memo under respondeat superior. While Sidecar was designing CDI's website, Sidecar had access to CDI's payment system using login credentials. Whilst still working on the website, Smith charged a customer $25k and transferred that amount to his bank account. CDI had repeatedly told Sidecar "not to use any of CDI's customer data once it had been entered, and Sidecar consistently agreed not to do so." However, as in Van Buren, these policies are not dispositive, Smith had the technical right to access this information as Sidecar was the one who programmed the payment system and set up the customer accounts, so Smith did not "exceed authorized access" by mmaking these payments.
Flynnis supportive of finding that this transfer did not violate CFAA . In Flynn, the court held that although Flynn had left his employer at the time of appropriating customer data, and although this appropriation was outside the scope of Flynn's employer's employment policies, Flynn "could still reach that data using HomeFresh's computers. "In effect, at the time he accessed customer data, Flynn was not a hacker - he did not use technical means to circumvent the password protection in HomeFresh's system because he had valid password access ... in short, Flynn's use of of the data while still employed by Homefresh may have violated HomeFresh's employment policies, but it did not violate the CFAA."
Here, Smith's access of the accounts violated CDI and Sidecar's employment policies because they agreed not to use customer data once it was entered. However, as in Flynn, Smith was no hacker, he had valid password access. Smith was acting outside of the scope of his employment duties, of course, it was not his pregorative to make such transfers on behalf of CDI, but he did not use any "technical means to circumvent the password protection" in CDI's system.
Of course, Smith did not violate 1030(2) as he had authorization to access the system - Sidecar was the one programming it. Smith's payment of $25k to himself while programming the system did not violate CFAA.
Aftre the completion of building the website, and following the contractual relationship with CDI, Sidecar instructed CDI to change the password for it's payment system but CDI did not do so. Using this password, Smith then charged $50k to another CDI customer and transferred that amount into his account.
A circuit split exists regarding the law here but Franklin District court has found that "once an employee leaves a job, the employee no longer possesses the legal right to use the employer's computers or to use the passwords or login credentials that allow the employee access to those computers. An employee who does so may be liable under the CFAA." Homefresh.
Regarding the $50k, Sidecar hired Smith "to work on the project" and the $50k transfer occurred after "Sidecar ... finished its work and transferred control of the website and payment system to CDI. At that point Sidecar's work under its contract with CDI ended." Because Sidecar was not a full time Sidecar employee but rather an engineer hired to work on this project, one may assume that he was not an employee at the time of the transfer. However, the investigation reveals that Smith resigned from Sidecar 3 days after making the transfer. It would be a close call, but because his official resignation did not occur until after the $50k was transferred, Smith is likely still an employee at that time, and under the Flynn test, he was not a hacker, but rather someone with valid password access because CDI had yet to change the password.
If the court does find that Smith was no longer employed by Sidecar at the time of transferring the $50K, then Sidecar would no longer have had the legal right to access CDI's accounts.
Sidecar should not. be liable for the $50k transfer either.
III. Assuming Sidecar is liable, what damages, if any, can CDI recover?
As a thresholod issue, CFAA limits recovery of damages in civil cases to "economic damages" and courts have refused to include punitive damages in the efinition of economic damages. Demidoff. This is a civil action, and thus the $400k punitive damages request should not be maintained.
The CFAA permits the recovery of "losses" only if the claimant's losses exceed a threshold amount of $5,000 during any one-year period. Slalom, 1030(g). Under 1030(e)(11), losses include "the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense." In Slalom, the court held that money spent to upgrade a security system does not meet the statutory requirement for costs to "restore the ... system ... to its condition prior to the offense." 1030(e)(11). Therefore, the $500 spent by CDI to upgrade its security system is not included in losses.
However, Slalom court held that amounts paid to ones employees to assist in a cybersecurity investigation. Here, CDI's $1500 in overtime paid to its own employees to help with the security firm's investigation is recoverable.
Additionally, the court in Slalom confirmed that costs of investigation are recoverable as losses. Therefore, the $4,000 CDI spent to investigate and fix the problem are compensable.
In total, CDI's losses are $5,500, meeting the threshold amount of $5,000 during any one year period.
The next issue are consequential damages. Under CFAA 1030(e)(11), compensable loss also includes "any revenue lost, cost incurred or other consequential damages incurred because of interruption of service." Case law supports a narrow reading of 1030(e)(11), and the interruption of service requirement is strictly construed. ($10m in revenue loss not found to be interruption of service in Next Corp; dismissing of complaint for failure to allege facts constituting an interruption of service, Selvage Pharm.) Most cases that find consequential damages or lost revenue involve deletion of critical files that cost Plaintiff a business opportunity, Ridley, or the alteration of system-wide passwords, Marx Florals. Even if the interruption is just temporary, courts have awarded such damages (awarding for a two day interruption at peak sales time in Cyranos).
Here, Sidecar's actions redirected two payments but did not "otherwise impair or damage the functionality" of CDI's system. Bonilla. CDI did experience a a five day shutdown, and this temporary interruption of service would normally be compensable. But, CDI fails to allege any facts tying losses to this time period. This rationale prevented the application of consequential damages in Bonilla where plaintiff failed to tie their 4 hour shutdown to any damages. Instead, CDI requests $125k for a contract terminated with a customer and $75k restitution to an improperly billed customer. In short, these decisions did not occur "as a result" of the interruption. Therefore, without more facts proving losses from the five day shutdown, the money for restitution and terminated contract are not recoverable as consequential damages.
IV. Conclusion
Sidecar is very likely not be liable for Smith's initial $25k transfer and is likely not liable for the $50k transfer unless the Court finds that his employment with Sidecar had terminated.
Sidecar, if liable, is liable only for the $5.5k in losses.
Should you have any questions, please don't hesitate to reach out.
Sample Answer
Memorandum
To: Damien Breen
From: Examinee
Date: July 30, 2024
Re: Sidecar design matter
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Liability under CFAA
Assuming Respondeat Superior applies, Sidecar Design (Sidecar) is likely liable for some of the actions taken by John Smith (Smith). Under CFAA section 1030, Liability through fraud occurs when the person at issue, "Knowingly and with the intent to defraud, access a protected computer without authoriziation or exceeds authorized acess; and through such conduct intends to defraud and obtains anything of value. The Franklin District court has gone on to apply this law as follows. Whether it's civil or criminal, in order for an action to be maintained under the CFAA, the defendent must have accessed a computer either without authorization or in a way that exceeds authorization. In the case here, the question is whether Smith's acts had such authorization. Smiths first transfer was likely authorized, under the CFAA and did not exceed that authorization, whereas smiths second transfer, was likely not authorized.
In establishing what access is authorized and the scope of that authorization, Franklin courts look at whether or not there was a technical barrier to access the information, essentially whether or not the person needed to have a level of hacker expertise to reach the info. The Franklin Court refered to the Supreme Court on this issue, in Homefresh LLC v. Amity Supply Inc. (Homefresh), citing that an "Individual 'exceeds authorized acess' only when a preson accesses data that the person does not have the technical right to access (essentially through hacking means). And for establishing access in general, if the employee had access as an employee, the right to access ends when the employment ends (and where an employee does access after and uses anyway, they may be liable under the CFAA).
John Smith took two actions. First he made a transfer of 25,000 while he was an employee and Second, he made transfer of 50,000, 2 days after Sidecar's contract with CDI ended. Regarding the first transfer, as an employee of our client, John Smith was given full reign of the data base. CDI was aware that Sidecar employees had this access and arguably encouraged it (See interview notes where CDI asked that a password be generated). That being the case, any use of that access, by non-techincal means, cannot violate the CFAA. In Homefresh, the franklin court cited to a supreme court case holding, that broad data base access, when granted, really does mean full access and does not generate a CFAA claim when utilized. If data was accessed by non-technical means, and the employee in question had some level of authorization, that authorization was is not exceeded. Because Smiths actions required no technical knowledge and required only the entering of a password, which he was authorized to know, Smiths first transfer likely does not lay the groundwork for a CFAA vioaltion. One further note on the office policy argument put forth by CDI, noted in the interview. The interview states that CDI generally told Sidecar employees not to access customer info. this notion holds little to no weight in furtherence of a CFAA claim however, as the franklin court specifically adressed this issue on point. "Use of the date while still employed may have violated office policy, but it did not violate the CFAA (Homefresh). Even if Smiths access here violated office policy, which it likely did, that does not lay the foundation for a CFAA claim.
In short, the first transaction made by smith likely does not amount to the grounds for a CFAA claim because he had authorization and did not exceed that authorization as described by both the franklin and supreme court.
Smiths Second transaction however, does likely give rise to a CFAA claim. The Franklin court specifically states, in homefresh, that once employment ends said employee no longer has the right to use employer passwords or computers. Per the interview notes and the investigaiton prepared by sidecar, the contractual relationship between sidecar and CDI ended on July 2nd. Two days following the ending of that relationship, Smith again, as a current employee of Sidecar, accessed CDI's data. In this case, this access was likely unauthorized. The franklin court subscribes to the approach that once a legal relationship has ended, the right to use employer sytems and passowords is revoked (this is 1 of 2 approached taken by courts). As Smith accessed data two days after the ending of the contractual relationship, this is likely unauthorized access within the terms of the CFAA and explained by the franklin court and therefor is a viable CFAA claim foundation against Smith and therefor Sidecar.
Alternatively, the view not addopted by franklin courts states that as long as the person has a password they were once authorized to use, even if they are no longer an employee, only changing or deleting that password actually revokes the authorization. Under this reading, which again is not adopted by franklin courts, even smiths actions following the termination of the contract would not be considered unauthorized because he still had a working password. Only after the password was changed would smith's authorization be revoked.
CDI Damages Against Sidecar
Assuming Sidecar is found to be liable to CDI under the CFAA, CDI will likely be able to recover some of its requested damages. Regarding the first request of $6,000 in damages for correcting the data breach by CDI, only 5,500 of this is likely recoverable. The 15 cir. court has held in Slalom suuply v. Bonilla (Bonilla) that when calulating damage remedies in accordance with the losse's standard set forth in the CFAA; paying for an investigation is a loss; paying for employees to help with the investigation is a loss; and upgrading a computer system is not a loss. As the goal is to put the offended party back in to it's condition prior to the offense, subsidizing an upgrade is outside the scope of the CFAA, as stated in Bonilla. As stated in the interview notes, the 6,000 requested by CDI can be broken down as follows, 4k to an investigatory firm, 1.5k to employees to assist the firm and 500 to upgrade the system. Per the framework set out in Bonilla, all but the 500 spent to upgrade the system would be recoverable under the CFAA. notably, being that remaining amount would be 5,500, this is over the 5,000 threshold to establish a civil CFAA action
Regarding CDI's second request for damages, in the amount of 75,000, this request for damages will likely faily based on the narrow reading of compensable losses in the CFAA. Bonilla has read the provision, CFAA 1030e, in such a way that compensable losses MUST be as direct result of an "interruption in service". CDI argues that Smith stole $75,000 and that following the theft, their service was taken down for 5 days. Because the transaction itself occured before interruption in service and did not itself caus an interruption of service, it is likely a noncompensatable loss. This is consistent with the 15 cir's holding in bonilla where a hacker stole money prior to a website shutdown. The theft in that case happened prior to the interruption in service (which followed the theft) and because it did not itself cause the interruption, it was a noncompensatable loss, as is the case here. At best CDI may be able to claim some losses during the website downtime, but as the amount claimed pertained specifically to moneys owed to the billed customer, this amount will likely not be recoverable.
Regarding the termination of the customers contract with CDI, the 125k contract, This amount will also likely not be recoverable as compensatable losses. Given the order of events put forth by CDI's investagtion firm, the cancelation of the contract happened 2 days prior to the service going offline. As stated above, the service going offline for 5 days is when Interruption in service damages begin and end. This extremely narrow reading of the CFAA is affirmed by the bonilla court where losses that took place prior to the interruption in service, were not losses as a result of the interruption in service. And under their reading of the CFAA, the losses must be as a result of the interruption in service to be recoverable which is not the case here.
Lastly, regarding the 400k in punitive damages sought by CDI, this amount is more than likely, not recoverable. In Bonilla, citing Demidoff v. Park (15 cir 2014), the court planly states that "courts have consistently refused to include punitive damages within the definiton of economic damages, the plain language of CFAA precludes an award of punitive damages. the CFAA limits recovery of damages in civil cases only to economic damages, and as punitive damages are held to not be economic, they are not recoverable under the CFAA. Simply put, CDI cannot claim punitive damages against Sidecar, assuming the case is purely on CFAA grounds.
Overall, Sidecar will likely be subject to a CFAA action, however the recoverable damages are likely limited to 5,500 which is the remedial amounts as determined by the franklin court, and any other minor costs incurred during the interruption in service period. The lion's share of CDI's requested damages are likely non recoverable under the CFAA per the 15 cir. court's interpritation of damages relating to a CFAA claim.
MEE-1
Sample Answer
Depending on the jurisdiction Adam may have a cause of action against Connie for violating the implied warranty of good construction and habitability in a new home.
Outside of a contract to the contrary, generally, a buyer of a home is not entitled to any warranty over the condition of a home (caveat emptor). There is an exception for latent defects for which the seller was aware of and would not be discoverable by a buyer upon a reasonable inspection. There is another exception for new construction. When a professional builder builds a new home and sells it within a relatively short time, she impliedly warrants that the house was reasonably, not negligently, made. In all jurisdictions that have this remedy, the primary buyer is always protected. This right is not determined by the deed or the land contract. In some jurisdictions, this protection is extended to secondary buyers as well, particularly if only a short period of time has passed.
Here, Connie built a house on the tract of land. She is a professional homebuilder. There is no indication that hse had any indication of a fault in the foundation of the house. Indeed, a crack did not appear until after Adam bought the house from Bert. As such, the latent defects exception to caveat emptor does not apply. However, as Connie built this house anew, in many jurisdictions she warranted that the house was not negligently constructed and habitable. It is established that negligent construction caused this "major crack." It caused frequent water intrusion and substantial water damage to the house. This negligence violates the implied warranty of habitability and good construction by a constructor. As such, Bert would have a claim against her. However, Adam would only have a claim against Connie in jursidctions that allow secondary buyers to assert this right. In many jurisdictions, Adam would not be able to assert this right.
Adam has no claim against Connie for breach of the covenant of quiety enjoyment because Diane's claim to title was recorded at the county recorder and Connie conveyed a modified warranty deed exempting Diane's claim from the promise.
General warranty deeds have covenants of seisin, right to convey property, and convenants against encumbrances, such as liens, easements, and mortgages. These are present interests for which covenantor only makes the promise to the buyer. Future secondary buyers have no cause of action on these promises. These stand in contrast to covenants of quiet enjoyment and further assurances, which are future-looking covenants and may be enforced against the covenantor by successors in the chain of title. The covenant of quiet enjoyment assures the buyer that a third party will not arive somewhere down the line and have superior title to the land. People may modify warranty deeds to make only some of the covenants.
Here, Diane maintained a 12-foot-wide strip on the western portion of Connie's tract. She successfully maintained an adverse possession action for the tract of land and had it recorded in the country recorder's office. Diane successfully acquired title and quieted title by recording and getting the judgment.
Connie conveyed a modified warranty deed to Bert for the property. This warranty deed excepted from warranties "all titles, covenants, and restrictions on record with the county recorder." As such, Connie exempted any violations of covenants that were recorded at the county recorder. This is fair, because the buyers have record notice and can look up recorded transfers of title on the property. Diane's claim to the property is one of these exempted transfers. Without this exemption, Connie would be liable to Adam. The 12-foot-wide strip claimed by adverse possession would be a violation of the covenant of quiet enjoyment. As this is a future-looking convenant, it would apply to Adam as a successor in title. However, because of the exemption and the wording of the warranty deed given to Bert, Adam will have no claim against Connie.
Adam has no claim against Bert because Bert delivered a quitclaim deed without any covenants.
Land sale contracts always have an implied warranty of quiet enjoyment, protecting the buyer from receiving unmarketable title. However, once a deed is conveyed, a buyer cannot seek a remedy from a land sale contract. A quitclaim deed is a version of a deed that provides none of the aforementioned covenants regarding title of land. As such, it precludes all actions by the buyer against the seller unless there is another independent cause of action like fraud.
Here, Adam has already received the quitclaim deed from Bert. As such, Adam does not have a cause of action based on the implied warranty of quiet enjoyment in a land sale contract. Further, Bert delivered Adam a quitclaim deed. As such, Bert made no promises of good title or warranties of quiet enjoyment. As such, Adam has no cause of action against Bert.
Adam has no cause of action against Connie for the easement because the covenant against encumbrances is a present covenant that only applies to the buyer.
The above law is incorporated in full. The aforementioned covenant against encumbrances is only a promise to the receiver of the deed containing the covenant. As such, successive recipients of the deed may not maintain a cause of action against the covenantor.
Here, Adam's northern neighbor has an implied easement across his land. This is an encumbrance that would normally violate a covenant against encumbrances. Bert received his land from Connie. The easement was not recorded, as it is an implied easement of necessity. As such, Connie's exemption in her general warranty deed would not apply. Therefore, Bert would have had a cause of action against Connie for breach of this covenant. However, when Bert conveyed the deed to Adam, he cut off Adam's ability to go after Connie. As such, Adam has no cause of action.
Sample Answer
1. The issue is whether Adam has a cause of action against Connie based on the crack in the foundation.
The implied warranty of fitness (or "craftsmanship") is implied in all land contracts for newly-constructed homes. It warrants that the builder used adequate materials and methods to contruct the home. The warranty generally covers latent defects that would not be immediately discoverable upon a reasonable inspection of the home by the buyer. The warranty does run to successive owners of the home, but may be limited by statute after a reasonable period of time has passed. The warranty can generally not be disclaimed.
Here, Bert bought the house from Connie, a professional homebuilder. Connie had built the house one month before selling it to Bert by warranty deed. While the deed "excepted" all warranties with respect to titles and covenants, this disclaimer would not apply to the warranty of fitness. Nor does it matter that there were no express warranties regarding the quality of the house's construction, because the warranty i implied in all contracts for new homes. Bert then coneyed the property to Adam two years after purchasing it from Connie. Three months ago, a latent defect--a major crack in the foundation which was "due to faulty construction"--appeared. It's unlikely that Bert or Adam could have discovered this defect even with reasonable inspection. While Adam did not buy the home from Connie, the warranty runs to successive owners. Accordingly, Adam can likely maintain a cause of action against Connie for the breach of the implied warranty of fitness for new homes.
2. The issue is whether Adam has a cause of action against Connie based on Diane's ownership of a portion of the tract by adverse possession.
A general warranty deed contains six implied covenants of title. Three are "present" and three are "future" covenants. The future covenants run to successive owners and are breached sometime in the future (if at all). The three future covenants of title are the covenant of quiet enjoyment, the covenant of further assurances, and the covenant of warranty. These covenants require the grantor to compensate the grantee for a breach of the covenant in the future if their enjoyment is disturbed or indemnify the grantee if someone with a superior claim asserts it against the grantee.
Here, Connie conveyed the land to Bert by warranty deed which excepted "all titles, covenants, and restrictions on record with the county recorder." Diane's adverse possession claim and and judgment had been recorded. Bert then conveyed the land to Adam by quitclaim deed--which provides no covenants as to title. Diane's claim of adverse possession is a superior claim to that of Bert or Adam and the future covenants run to successive owners, so Connie's warranties ran to Adam. However, Connie excepted any recorded claims, and therefore is not liable to Adam based on Diane's adverse possession claim.
3. The issue is whether Adam has a cause of action against Bert based on Diane's ownership of a portion of the tract by adverse possession.
A quitclaim deed makes no warranties as to the title of the property. The grantee takes whatever interest--with whatever encumberances--the grantor possesses at the time of conveyance, and the grantor is not required to indemnify or otherwise compensate the grantee for future superior claims against the grantee's title. When Bert took the land, Diane had already correctly asserted her right to the strip under the theory of adverse possession. Accordingly, when Bert conveyed the land to Adam, he simply conveyed his interest, with the adverse possession claim against it. Because Bert provided no warranties, Adam cannot sustain a cause of action against him based on Diane's ownership of a portion of the tract by adverse possession.
4. The issue is whether Adam has a cause of action against Connie based on the neighbor's easement over the tract.
An easement by necessity arises when the dominant and servient estates were previously held in common ownership, the necessity arose at the time of the severance, and the easement is necessary to make the dominant estate useful.
Here, the neighbor has claimed that her land benefits from an easement by necessity to reach the highway. When Connie conveyed the land to Bert, as noted above, she made the future covenants of quiet enjoyment, further assurances, and warranty. She did except recorded claims, but this claim was not recorded and has arisen on the theory of necessity. When future covenants are breached--even if during the tenancy of a successive owner--the original grantor has breached. Accordingly, Adam can maintain a cause of action against Connie based on the neighbor's claim of an easement over the tract because it was a breach of the future covnenant of quiet enjoyment.
MEE-2
Sample Answer
1. The issue is whether XYZ, a controlling shareholder of ResortCo, breached a fiduciary duty of loyalty to ResortCo's minority shareholders by causing ResortCo to stop causing CruiseCo docking fees.
Typically, shareholders do not have fiduciary duties to other shareholders of a corporation. However, a majority shareholder or one with a controlling share of the corporations outstanding shares does owe a duty to minority shareholders not to subvert or hinder the minorty shareholders pecuniary interest. When a shareholder is found to be a majority shareholder, they owe minority members the general duties of care and loyalty. The duty of loyalty prevents majority shareholders from engaging in self-dealing, acting on behalf of an interest that is adverse to the corporation, or usurping a business opportunity. However, when the duty of loyalty is implicated the Model Business Corporation Act has provided three safe harbors by which a breach of the duty of loyalty may be cured. Such may be allowed if: 1. the majority shareholder receives approval from a majority of disinterested shareholders, 2. the majority shareholder receives approval from a majority of disinterested directors, or 3. the transaction was fair to the corporation. The third safe harbor is a fallback provision and protects a majority shareholder from liability when the transaction they engaged in was fair to the corporation.
Here, XYZ owns 90% of ResortCo's common stock. As such, they are clearly a majority shareholder that owes a fiduciary duty to the minority shareholders. In terms of the transaction itself, such can properly be characterized as a self-dealing transaction since XYZ is on both sides of the transaction as they own all of the common stock of CruisCo. As such, in order to avoid liability for this action the transaction must fall within a safe harbor provision. XYZ cannot prevail on the first two as there is no evidence that they contacted the remaining 10% shareholders of ResortCo and no director can be considered disinterested since such are all employees handpicked by XYZ to be on the board. Therefore, the only was XYZ can prevail is if they are able to show that the transaction is fair to ResortCo. XYZ will likely not prevail because ResortCo is contractually entitled to CruisCo's fees and could use such as they have experienced a recent economic downturn. As such, the decision to stop charging the docking fees is a breach of the duty of loaylty and XYZ is not protceted by any safeharbor.
2. The issue is whether ResortCo's minority shareholders will prevail if they attempt to challenge the board's decision not to declare dividends
When shareholders challenge the decision of a corporation's board of directors, the type of suit hinges upon the relief sought. When relief is recovered by the corporation as a whole, such is a derivative suit and the shareholders must serve demand on the board and wait 90 days unless such is futile. If the relief sought would go directly to the shareholders, such as when a dividend has not been paid, the suit is direct and the shareholders need not serve demand. However, the ability to bring this suit does not guarantee its success. A principle throughout corporate law suggests that the holders of common stock are not entitled to receive dividends and do not have the right to request that such be paid. Additionally, a board's decision that does not involve an interested transaction will be subject to the business judgment rule and whether or not the board breached their duty of care. The duty of care requires the board to make informed decisions and act as a reasonably prudent board member based on the information provided. A board of directors may rely on information provided to them by outside experts such as lawyers, consultants, and accountants.
Here, the relief sought in the form of the payment of dividneds would be enjoyed by the shareholders themselves. As such, they may bring a direct suit against the board. However, since shareholders do not have a right to requiest dividends, they will likely not prevail in their action. Additionally, the shareholders would be unable to prevail as the board's decision is insulated by the busness judgment rule and the shareholders would not be able to overcome such since the board made an informed decision based on information provided by their own chief financial officer as well as an outside law firm and independent accountant.
As such, the shareholders will not prevail if they attempt to challenge the board's decision not to declare dividends.
3. The issue is whether RestorCo's board of directors' decision to purchase Ava's land is protected by the business judgment rule
The board of directors of a corporation owes its shareholders the duties of care and duty of loyalty. As discussed above,the duty of care requires that the board make decisions in good faith, ensure that they are reasonably informed, ask pertinent questions, and act as a reasonably prudent board member. Underlying the duty of care is the business judgment rule which creates a rebuttable presumption that a board's decision was made on reliable information and in the best interest of the corporation. In order to defeat the business judgment rule, a challenger must show that the board acted unreasonably, acted based on self-interest, was not reasonably informed, and did not discuss relevant issues regarding the decision.
Here, the decision to purchase the land for $50 mil implicates the duty of care since it does not involve a self-interested transaction. As such, the decision will be protected by the business judgment rule and will be presumptively in the best interest of the corporation unless a challenger is able to show that the directors acted unreasonably in their decision. Here, the directors discussed the purchase for only 15 minutes, did not consult independt advisors, and did not request guidance from the chief financial officer despite the fact that Ava said she would hold open the offer for 48 hours. In fact, the land was sold above its fair market value.
As such, the decision to purchase is likely not protected by the business judgment rule since it can be proved that the board was not informed and did not act reasoably regarding the decision.
Sample Answer
1. The issue is whether XYZ violated its duty of loyalty to Resort Co or Resort Co's minority shareholders by causing Resort Co to stop charging CruiseCo docking fees.
Rule
Generally, shareholders do not owe one another fiduciary duties. However, controlling shareholders owe fiduciary duties to the corporation and the minority shareholders. A controlling shareholder is one that owns more than %50 of stock or otherwise controls voting power. The duty of loyalty requires a controlling shareholder to act in the best interests of the corporation. The duty of loyalty prohibits self-dealing. Self-dealing or conflict of interest transactions occur when the controlling shareholder as a substantial personal or financial interest in the transaction that they are unable to be objective.
There are safe habor provisions that protect shareholders and directors that engage in self-dealing transactions. Under the safe habor provisions, the self-dealing transaction is approvied if the controlling shareholder can demonstrate one of the following: 1) the controlling shareholder disclosed all material facts to the board of directors and received approval from a majority of disinterested directors or, 2) the controlling shareholder disclosed all material facts to the shareholders and received approval from a majority of disinterested shareholders, or 3) the transaction was both procedurally and substantively fair. When determining whether a transaction was procedurally fair, courts will consider whether adequate proceses were followed. When determining whether a transaction was substantively fair, courts will consider whether what the corporation received was of comparable value to what the controlling shareholder gave.
Analysis
Here, XYZ is a controlling shareholder because it owns 90% of the common stock of ResortCo and futher controls voting power by having the power to choose all of its board of directors. Therefore, XYZ does owe a duty of loyalty to the corporation and the minority shareholders.
Further, XYZ engaged in a self-dealing / conflict of interest transaction because it owns all of the common stock of CruiseCo. Therefore, XYZ had a material interest in the transaction between ResortCo and CrusieCo. XYZ was unable to be objective on behalf of ResortCo because it has a substantial financial interest in CruiseCo.
XYZ cannot satisfy the first two options of the safe harbor provisions. While XYZ did present the transaction to the board, all of the board members of XYZ also make up the entire board of CruiseCo. Therefore, the board of directors are not disinterested and cannot ratify the transaction. XYZ did not present the transaction to minority / disinterested shareholders.
XYZ is also unlikely to be able to show that the transaction was substantially and procedurally fair. While, board did have a meeting and vote unanimously, the court is not likely to find that the transaction was substantively fair. Other marinas have been increasing their docking fees, not decreasing. Further, loweing the docking fees hurts Resort Co by decreasing its revenue. Lastly, ResortCo charges other cruise fees the normal higher fee and is contractually entitled to charge CruiseCO the same.
Conclusion
XYZ did breach its duty of loyalty owed to the corporation and the minority shareholders and failed to satisfy any of the safe harbor provisions.
2. The issue is whether the minority shareholders are likely to succeed in their challenge against the board's decision to not declare a dividend.
Rule
The rule is generally, shareholders are not entitled to dividends. However, shareholders may challenge a board's decision on grounds that it violated a fiduciary duty. The duty of care requires directors to consider decisions in good faith and to reasonably investigate into offers. Further, the business judgment rule protects the board from an alleged breach of the duty of care. The business judgment rule is a rebuttable presumption that a director acted in what he believed was in the best interest of the corporation.
Analysis
Here, the board reached its decision to not declare a dividend after several hours of considering the financial implications of a potential dividend. The board consulted with the financial officer, an independent accountant, as well as an advisory oppinion from an outside lawfirm.
Conclusion
In conclusion, based on the time of consideration, investigation, and consultation with outside sourcse, this decision did not violate the duty of care and would otherwise be protected by the business judgment rule.
3. The issue is whether ResortCo's decision to purchase Ava's land is protected by the business judgment rule.
Rule
The business judgment rule is a rebuttable presumption that a director acted in what he believed was in the best interest of the corporation. The business judgment rule can be rebutted by a showing of a lack of good faith, that the directors did not investigate to an reasonably necessary extent, that the directors failed to timely investigate, or otherwise acted as a non-prudent business person.
Analysis
Here, the board of directors only considered the offer to buy Ava's land for 15 minutes. While the deal was under a 48-hour time crunch, the board certainly had more than 15 minutes to consider such a large purchase. Further, the price that Ava was asking for was above the property's fair market value. However, Ava's land is well-suited for commercial property development, so ResortCo is likely to agrue that paying more for land that is well-suited for their intended purposes is reasonable. However, the board did not consult with any outside personell or reports. Such a transaction should entail the consultation with the financial officer and an inquiry in the potential impact that the purchase will have on the corporation.
Conclusion
In conclusion, the court will likely find that the Resort Co's board of director's decision is not protected by the business judgment rule due to the haste in the decision making, the high price, and the lack of investigation.
MEE-3
Sample Answer
1. The question is whether the application of State A statute to CarCo rights under the dealership agreement violate the Contracts Clause. The contracts clause is provided in the Constitution and states that no state shall enact legistaltion that shall impair the rights of those who are contracting. Future contracts may be altered through the enactment of legislation, but pre-existing contracts cannot be retroactively impaired through the use of state legislature without adequate justificatio. There are different tests in which the contracts clause is to be applied, private contracts and public contracts. Public contracts are those that are applied on a wide-basis, whereas private contracts are those between private individuals. Here, the car manufacturer likely qualifies as a public contract, since it deals with the public as a whole. The state legislature not only affects future contracts, but also preexisting contracts in violation of the Contracts Clause. To survive a Contracts Clause violation, it must be necessary to an important government interest and be in favor of public policy. Here, the facts provide that the purpose of the legislature is to keep parties on equal footing and bargaining power. Although this is an important government interest to keep contracts equal and not unconsionable, the manner in which it is enforced is not done in a necessary way. There are less restrictive means of protecting consumers than those that impair the rights of contractors to freely exit from a contract that could potentially hurt a dealer. Further, it is unlikely that public policy would favor detrimenting one contractor in substantial favor of another. Because of this, it is likely that the regulation does not pass scrutiny, although future contracts may be affected by the state legislature under the Contracts Clause.
2. The question is whether State A statute violates the Equal Protection Clause.
Equal protection clause applies to the states through the 14th amendment. It provides that no individual shall be deprived of life liberty and the pursuit of happiness. When an equal protection claim arises, certain levels of scrutiny must be applied in order to determine whether the law is constitutional or not. When a suspect class is involved, strict scrutiny applies. When a quasi-suspect class is involved, intermediate scrutiny applies. Finally, when a non-suspect class is involved, rational basis applies. Here, a car dealership is a non-suspect class, therefore a rational basis test applies. To pass rational basis scrutiny, a law must be rationally related to a legitimate government purpose. This burden is placed on the contestant, not the government, to prove that there is a lack of a legitimate government purpose. Here, the statutes purpose is to address the imbalance of bargaining power between manufacturers and dealers and to give them equal and free bargaining power. The highest court in the state held that common law did not limit the enforceability of contract termination provisions Therefore, a rational basis does exist for the enactment of the statute. Although the statements made by the legislator's do express an intent a possible intent to discriminate against the car manufacturers, it does not rise to a level of invalidation. Discriminatory intent and purpose may invalidate a law if it is based on a suspect-quasi suspect class. Therefore, the statute is likely to survive equal protection.
3. The question is whether State A violates CarCo's substantive Due process rights. Substantive Due Process rights are those that work in conjunction with procedural due process, which requires some sort of hearing if there has been the deprivation of a right to an individual. The legislation likely does not violate the car manufacturers substantive due process rights due to the the privileges and immunities clause of the 14th amendment. The 14th amendment applies to the directly to the states. Privileges and immunities clause provides that state legislation shall not discriminate against out of state individuals conducting in commercial activiites compared with those who reside in the state, although noncommercial activity can be regulated. If a legislation is discriminatory in it's face, strict scrutiny applies, which requires a statute be narrowly tailored to a compelling government purpose. If a statute incidentally burdens interstate commerce with no form of discrimination on it's face, then a balancing test is employed to see whether the burden outweights the benefit. Here, the statute provides that an automovile manufacturer sahll not terminate any contract rights of a dealer located in a county with a population of less than 1000. The statute itself is not facially discriminatory, so a banalcing test must be determined to see the constitutionality of the statute. The facts provide that CarCo deals with many agreements with rural dealers in many states, which implies commercial transactions done in interstate commerce. The burden to CarCo is that it planned to terminate agreements with rural dealers to encurage buyers to use their website. Significant cost savings would occur, but since the enactment of the legislation, it cannot achieve the benefits that were previously expected by them and potentially other car dealer manufacturers in the state that deal with contracts, since the statute is not exclusive to just CarCo but all car dealers. The burden to she state is that there exists an imbalance of bargaining power between automobile manufacturers and dealers. The state has a substantial interest in creating just contracts with equal footing and no unconsionability. The burden the state would have is injust contracts, and the benefit it would receive is positive public policy. In light of this, it is likely that the statute passes the balancing test in determining whether the statute is constitutional. The state's substantial interest, absent any discrimination on its face, is likely to overcome the interests claimed by the car dealerships, as they are still able to conduct transactions but not cancel any existing contracts. Further, substantive due process rights are fundemantal rights that have been recognized by the court as those necessary to the life liberty and the pursuit of happniess. Here, the right to do business is not a substantive due process right recognized by the court. Additionally, the statute is not completely denying the opportunity of doing business, but limiting the ways a contract can be teminated by one that has substantial bargaining power over another. No fundamental right is being curtailed here by the legislation that would deprive CarCo of any right that it is entitled to. Because of this, as stated in 2. rational basis applies and the state has an interest that is rationally related to a legitimate state purpose. Absent a suspect quasi-suspect or fundamental right, rational basis will apply. Therefore, the statute is likely permissible under the 14th amendment and substantive due process rights have not been denied.
Sample Answer
1) Contracts Clause
The first issue is whether the State A statute violates the Contracts Clause. Under the U.S. Constitution Contracts Clause, a state may not interfere with performance of contracts. The Contracts Clause is designed to prevent the state from using its legislative power to easily abandon their contractual obligations.
The level of scrutiny that applies to statutes that impact contracts depends on whether the contracts are purely private or public. Statutes that interfere with purely private contracts, i.e., those entered into by two or more private entities or individuals, are evaluated under an intermediate scrutiny standard. This means the state has the burden of showing that the statute is necessary to further an important government interest. In contrast, statutes that govern public contracts, i.e., those where the state or one of its instrumentalities is a party, are judged under a strict scrutiny standard. This means that the state must prove that the statute is narrowly tailored to achieve a compelling government interest.
Here, application of the State A statute is unlikely to be invalidated under the Contracts Clause. First, the statute applies to purely private contracts because the state is not a party to the contracts at issue. Therefore, because the statute impacts private contracts between manufacturers and dealers, intermediate scrutiny applies.
State A will likely be able to prove that the statute is reasonably necessary to achieve an important government interest. First, the statute cites important reasons for the statute, including the fact that it is designed to address the imbalance of bargaining power between automobile manufacturers and dealers. States have an interest in ensuring a fair playing field for contracting parties. Thus, this legislative purpose likely qualifies as an important government interest.
State A can also likely show that the statute is reasonably necessary and substantially related to achieving that interest. The Act imposes a "good cause" requirement on termination of contracts between dealers and manufacturers. The effect of this policy is to ensure that manufacturers cannot easily shed their contractual duties without reason. There is a close relationship between addressing unequal bargaining power and lessening the unilateral power of manufacturers to cancel contracts.
In sum, because the statute aims to address unequal bargaining power by imposing a good cause requirement on manufacturer-dealer contracts, it likely passes intermediate scrutiny. It will likely be found valid under the Contracts Clause.
2) Equal Protection Clause
The second issue is whether the State A statute violates the Equal Protection Clause. The 14th Amendment guarantees equal protection of the laws, which prohibits the states from treating people/entities differently based on their membership in a group.
When a statute invokes a suspect classification, strict scrutiny applies (statute must be narrowly tailored to achieve a compelling government interest). Suspect classifications involve those targeting race and alienage. When a statute targets a quasi-suspect classification, intermediate scrutiny applies (statute must be reasonably necessary to achieve an important government interest). Quasi-suspect classifications include those targeting gender and legitimacy.
All other classifications (disability, age, class, etc.) are evaluated under rational basis scrutiny. Under rational basis, the person challenging the statute has the burden of proof. The opponent must prove that the statute is not rationally related to a legitimate government interest. Most statutes pass muster under rational basis. However, a statute motivated solely by bare animus against a group is not rational.
Here, the State A statute likely does not violate the Equal Protection Clause. There is no suspect or quasi-suspect classification here. The statute merely discriminates between automobile-dealership agreements and contracts involving other products. Therefore, rational basis scrutiny applies.
The statute likely passes rational basis scrutiny. Similar to the previous discussion, there is a legitimate government interest in addressing unequal bargaining power in an industry and the statute is a rational means of achieving that interest. The fact that legislators made private statements evidencing animus against auto manufacturers is not enough to invalidate the statute under the equal protection clause. Pretext here does not matter because the legislative finding and purpose show a rational reason for it. In sum, there is likely no valid Equal Protection claim.
3) Substantive Due Process
The 14th Amendment applies to the states and guarantees due process of law. The due process clause gives rise to both procedural and substantive due process. Procedural due process requires notice and an opportunity to be heard before the state interferes with life, liberty, or property. Substantive due process refers to interference with rights found to be fundamental because they are either explicitly in the Constitution or have been implied by the U.S. Supreme Court.
Fundamental rights include numerous individual rights, such as the right to marry, procreate, and for parents to maintain the care and custody of children. There is a fundamental right to travel and make a living under the Constitution. When a fundamental right is implicated, strict scrutiny applies. For all other interests, rational basis scrutiny applies.
Here, because no fundamental right is implicated, rational basis applies and the statute likely passes muster under the due process clause. There is no fundamental right for the auto manufacturers to be able to retain the absolute right to terminate their contracts. While there is a right to conduct their business reasonably free from government interference, that right is not absolute and is instead subject to reasonable regulation by the state.
Since rational basis scrutiny applies, the statute will likely pass muster for the same reasons discussed above in the equal protection analysis. There is a rational basis for concluding that the statute will help achieve the legitimate government interest in addressing unequal bargaining power between auto manufacturers and dealers.
MEE-4
Sample Answer
1. Was a contract entered into between store owner and SignCo on May 1st?
The contract will remain valid and is legally enforceable and entered into by SignCo and the store owner on May 1st. The threshold question in resolving a contracts dispute is determining what law applies. The common law approach to contract law applies to service contracts and sales of land. The Uniform Commercial Code (UCC) applies to the sale of goods. Here, the contract in question involves the sale of a large sign, which qualifies as a good. Therefore, the laws of the UCC will govern this contract and transaction.
The first step in determining whether a valid contract exists is to establish that there was mutual assent to contract, which would require an offer and an acceptance. Here, the offer was made by the store owner when she met with the representative of SignCo and detailed her proposed specifications for the sign. As a representative with the authority to enter into contracts on behalf of SignCo, the representative accepted the specifications made by the store owner in her offer, and a mutual assent to contract was formed when the two orally agreed that the store owner would pay $5,000 for the delivery of a 10-foot-long sign that would have the unique name of the store and be made out of specialized materials to meet the specifications asserted by the store owner.
Next, the UCC requires valid consideration to be made by parties in order for a valid contract to be formed. Consideration is a bargained for exchange, whereas each party offers a legal detriment, usually by partaking in conduct that they have no legal obligation to do. Here, the consideration of SignCo is that they would purchase the materials and then make the sign, and the store owner would pay them for that work to make the sign, both of those considerations being legal detriments that neither party is obligated to undertake. Hence, there is a bargained for legal exchage. Next we must analyze whether any defenses to contract formation exist. The facts do not indicate any misrepresentation as to the terms of the Contract, nor is there any indication of fraud or duress on the part of either party. While the storeowner might claim that they specifically requested the sign be made by SignCo, the agreement does not contain that detail, and a unilateral mistake is only a defense to contract that rids a party of an obligation to perform if the nonmistaken party knew or had reason to know that the mistaken party was mistaken. Here, SignCo could not have known that the storeowner only selected SignCo because of their low prices, nor that she would not have accepted a sign made from an assignment of duties. Therefore, the contract will remain valid and is legally enforceable and entered into by SignCo and the store owner on May 1st.
2. Is K between store owner and SignCo enforceable against store owner even though store owner didn't sign a document reflecting the agreement
Despite the fact that the store owner didn't sign any document reflecting the agreement, the contract is still enforceable against the store owner. The Statute of Frauds is an additional defense to a breach of contract claim. Under the Statute of Frauds, certain transactions or agreements to contract must be made in writing in order to confirm their validity and avoid fraud. One example of the certain transactions that must be made in a signed writing by the party asserting the defense are contracts for sales of goods over $500. Here, the Statute of Frauds would apply to the May 1st contract between SignCo and the store owner because the sale was for a good over 500, as it was $5,000. The store owner could claim the defense that the contract violates the statute of frauds because not only was the agreement oral, but she did not sign any document reflecting the agreement in writing.
This defense, however, would not be effective and would not discard the store owner's duty of performance, because there are a few exceptions to the Statute of Frauds. The policy behind the statute of frauds is to ensure that certain transactions have an air of reliability, which is why writings are required for those deals. However, the requirement for this additional safeguard does not apply where the goods in question are specialized goods. Specialized goods are those that are unique to one party in the contract, usually the buyer,, so that there is no way that the goods would have been made but for an agreement between the two parties. Here, the sign could be considered a special good because it had the unique name of the store on it and was not only constructed with specific red colored glass, but was also set to meet the specifications given by the store owner. In lieu of a writing to satisfy the SOF, a party can show the validity and existence of an agreement by completing substantial performance of the goods creation. Here, SignCo had made substntial progress in shaping the glass into the store's name before its assignment, and therefore demonstrates that the agreement was voluntarily and validly made between the parties. Therefore, despite the fact that the store owner didn't sign any document reflecting the agreement, the contract is still enforceable against the store owner.
3. Is store owner bound to accept sign from substitute manufacturer?
A contract is still valid if one party bearing the burden of producing the item assigns that duty to another in a contract. Under the UCC, as long as the product meets the same specifications as listed in the original contract, the assignment is valid and therefore not a breach that would terminate store owners duty to tender performance to their side of the contract, which would be payment. Even if there was an agreement made that prohibited the assignment of a contract, so long as there is no provision expressely stating that any assignment was voidable, the assignment will stand. Here, the assignment is valid because the agreement between the assignor, SignCo and the assignee, substitute manufactuer, contained the same specifications that were in the original contract between SignCo and the store owner. Additionally, the store owner would be considered a third party beneficiary in the assignment between SignCo and substitute manufacturer. A third party beneficiary cannot assert any legal cause of action, for breach or otherwise, until their rights vest, either by bringing a cause of action, learning of the agreement, or relying on the assignment.
The perfect tender rule of the UCC permits a buyer to accept, reject or reject in part any nonconforming goods. The determination of what is conforming or nonconoforming depends on the specifics of the contract. For example, here, the agreement required that the sign meet the quality and design specifications stated by the store owner. When the conforming of goods is determined by the aesthetic preference of a buyer, an objective reasonable person anaysis is conducted. Here, when all of the specifications are met, it would be unreasonable for the buyer to consider the goods nonconforming when there was no specification requiring the sign to be exclusively made by SignCo. Therefore, the store owner is most likely bound to accept the sign from the substitute manufacturer, especially where the good is one that is so unique that the seller could not possibly put the item up for resale without a gross decrease in profit.
Sample Answer
A contract for the sale of goods is governed by the Uniform Commerical Code Article 2 (UCC). Goods are things movable at the time of contract formation. This is a contract for the manufacture of a sign, a movable object. Thus, this contract will be governed by the UCC.
Contract Formation
The issue here is whether the parties' words and conduct on May 1 were sufficient to enter into a contract. A contract is formed by mutual assent of the parties supported by consideration. Mutual assent has two parts: an offer and an acceptance. An offer is a communication by an offeror to a definite and identifable offeree that the offeror is willing to enter into an agreement based on the stated terms. An acceptance is the objective manifestation of the offeree's assent to enter into the agreement. Under the UCC, an offeree may accept in any manner that is seasonable under the circumstances. Consideration is bargained for exchange between the parties and can be anything of legal value, even a peppercorn. A promise for a promise is legally sufficient consideration to create a contract. Under the UCC, as long as a quantity term is supplied, any missing terms in an agreement can be filled in with the UCC gap fillers. A contract may be formed by oral or written agreement. An oral contract that falls into the statute of frauds still exists, it is just unenforcable unless an exception applies (discussed below).
Here, on May 1, the store owner met with a representative of SignCo. As the store's owner, the owner had the apparent authority as being able to enter into contracts with SignCo. SignCo's representative was also authorized to enter into such contracts. The two parties orally agreed (1) that SignCo would deliver to the store owner a 10 foot long sign, for which the store owner would pay $5,000; (2) that the sign would bear the unique name of the store, be made of bent red glass, and meet the owner's stated quality specifications; and (3) that the sign would be delivered to the store owner no later than May 31 The test for formation is objective. Would a reaosnable party conclude based on these statements that a contract was formed? The answer is yes because of the spoken agreements on the above points and because the store owner was authorized to enter into such an agreement.
The consideration supporting this agreement was SignCo's promise to make the sign and the owner's promise to pay $5,000 on delivery of the sign. The oral agreement specified that one sign would be made as well as the sign's specifications, so any missing terms, such as the time or manner of payment can be filled in using UCC gap fillers. The fact that the agreement was oral has no bearing on its formation. Instead, as discussed below, oral agreements in certain cases under the statute of frauds may have their enforcability limited. But, because that goes to enforcement and not formation, it has no bearing on whether there was a contract formed on May 1. Thus, the store owner and SignCo entered into a contract on May 1.
Contract Enforcability
The issue here is whether part performance of the contract is sufficient to take it out of the statute of frauds. Under the UCC, a contract for the sale of goods of $500 or more falls under the statute of frauds. A contract that falls under the statute of frauds is unenforcable unless it is in a writing and is signed by the party against whom enforcement is sought. However, the part performance doctrine can serve to take a contract under the statute of frauds outside of the statute of frauds. A merchant is someone who reguarly deals in the kinds of goods sold. In the case of uniquely manufactured goods, a contract within the statute of frauds will fall outside the statute of frauds once the merchant/manufacturer has substantially begun the manufacturing process for the goods.
Here, the oral agreement formed on May 1 was a contract for the sale of goods, a sign, for $5,000. This meant that at the time of formation, it was within the statute of frauds and could not be enforced against either party. There was never a subsequent writing produced that memorialized the agreement. The oral agreement was for a sign bearing the unique name of a store owner's store, be made of bent red glass, and would meet quality and design specifications stated by the store owner. These facts are sufficient to make the oral contract one for the manufacture of unique goods because the sign was made of bent glass and could not be resold, as the glass was bent in shape of the name of the store owner's store. SignCo is a merchant of signs, as it regualrly deals in signs. On May 6, SignCo had made substantial progress in shaping the glass into the store's name. This is sufficient progress under the UCC in their manufacture to take the oral agreement outside the statute of frauds. Thus, the agreement is enforcable even though the store owner did not sign a document reflecting the agreement.
Substitute Manufacturer
The issue here is whether SignCo's duties under the agreement were delegable. Generally, a party is free to delegate any duties it has under a contract to a third party unless the contract forbids it or the contract involves the creation of something with artistic or creative merit. Under the UCC, a buyer of goods is entitled to reject nonconforming goods. Nonconforming goods are those that do not conform to the buyer's original specifications
Here, SignCo determined that it would be unable to complete the sign by the May 31 deadline. On May 9, SignCo delegated its obligations under the contract to the substitute manufacturer. The agreement required the substtitue manufatruer to complete work on the sign and meet all of the store owner's specifications. The substitute manufactuer created the sign within the May 31 deadline, and the created sign conformed to all specfifications of the agreement with SignCo. It is debatable whether the creation of this sign was something that involved such artisic or creative merit by SignCo such that the creation of the sign could not be delegated, but the facts state that the store owner selected SignCo because of its "low advertised price." On delivery, the sign conformed to all specifications and cannot be said to have been nonconforming goods. Because the creation of the sign most likely did not involve artistic or creative merit, the store owner was not entitled to reject the sign based on the delegation of duties, as the oral agreement did not contain a no delegation clause. Thus, the store owner is bound to accept the sign from the subsitute manufacturer.
MEE-5
Sample Answer
1) Whether Trial Court Can Consider Modification
The first issue is whether the facts are legally sufficient to authorize the trial court to consider whether to modify the existing custody order. Custody determinations are based on the best interests of the child standard. Child custody is governed by the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) and the Parental Kidnapping Act (PKPA).
Jurisdiction to enter into a custody order is authorized in a court in the child's home state. The home state is the state where the child has lived continuously for the previous six months. After the initial custody determination, the original court maintains continuing and exclusive jurisdiction over the custody determination.
Custody determinations are technically never final and are subject to modification based on the best interests of the child. To obtain a modification, the petitioning party must show a substantial change in circumstances affecting the child's well-being. The "substantial change' standard balances the well-being of the child with the child's interest in stability. In other words, the standard prevents custody determinations from being constantly re-litigated for minor changes in circumstances.
In this case, there are likely not sufficient facts to authorize the trial court to consider a modification of the existing custody order. This is because there has not been a substantial change in circumstances affecting the daughter's well-being. Only a few months have passed since the initial custody determination and, while the facts have changed, there is not enough evidence showing a substantial change affecting the daughter.
The major change that occurred from the initial custody determination to now is Patrice moving into Harvey's home. The presence of another adult in the home could qualify as a substantial change in circumstances if it was shown to impact daughter in a detrimental way. However, that showing has not been made here. Rather, the daughter seems content with Patrice's presence in the home. The daughter stated that "Patrice is fine." Further, Harvey testified that the daughter's behavior has not changed isnce Patrice moved in and the daughter and Patrice get along well.
While it is true that the daughter stated that she would like to see her mother more, that statement alone does not indicate a substantial change in circumstances affecting her well-being. The statement is ambivalent at best and the daughter's desire to see her mother more could be remedied by increased visitation with Wanda. In sum, because there is likely not a sufficient showing of a subtantial change affecting the daughter, the trial court should not consider whether to modify the existing custody order.
2) Whether Trial Court Should Grant Joint Custody
The second issue is whether, substantively, the trial court should modify the existing custody order to grant Harvey and Wanda joint physical and legal custody of their daughter. Again, the standard is governed by the best interest of the child.
In making custody determinations, courts consider a variety of factors impacting the child's well-being. The balancing of factors from an initial custody determination should be given due weight. Considerations include: the financial resources of the parents, the stability of the home and surrounding community, whether the parents are cooperative and cordial with one another, and the child's preferences, especially when they are aged 12 or older.
Parents have a fundamental right to direct the care and custody of their children. However, this right is subject to limitations based on the best interests of the child. There is a preference for joint custody wherever possible. However, when parents are unable to cooperate with one another, sole custody is appropriate.
Here, the trial court likely should not modify the custody order to grant joint custody. First, and most fundamentally, the parties continue to be bitter and uncooperative toward one another. Harvey and Wanda's relationship remains bitter and acrimonious. They both stated that they were unwilling to share custody. Subjecting the daughter to joint custody would likely cause even more friction between the parents, making such an arrangement untenable.
Second, the daughter expressed a preference to live with Harvey in the initial custody hearing and has not clearly changed her position. As a 13 year old, the daughter's preference should be given due weight. She stated that she wanted to live with her father just months ago. Even though she now wants to see her mom more, that statement is likely not enough to grant joint custody. Rather, the court would be better suited by encouraging more visitation between Wanda and the daughter.
Third, the initial custody determination granting sole custody to Harvey was made only a few months ago and was well supported by a neutral child-custody evaluator. The decision to grant sole custody was well informed by a professional who investigated the family dynamics and determined that sole custody was appropriate. Such a decision should not be disturbed absent a finding that the family dynamics have fundamentally changed.
Finally, Wanda's argument that the daughter should not be exposed to the nonmarital cohabitation of Harvey and Patrice is likely unconvincing. In a modern society where more couples are unmarried and living together, Wanda's moral views regarding unwed cohabitation are not likely to adhere in the trial court. While Wanda has a right to direct the care and custody of her child, that right is not limitless. Wanda has not made a showing that living with Harvey and Patrice has negatively impacted the daughter. Absent such a showing, modification of the custody order is likely inappropriate.
Sample Answer
1. Custody Modification
The issues is whether the trial court is the proper jurisidiction to consider a modification of the existing custody order. Under common law, when deciding the custody of a child a court must act in the best interests of the child. After a custody order has been decided, a court may modify their decision in the future based on a significant change in circumstances. In many jurisdictions, a new person moving into the home with the child would be sufficent grounds to justify modifying the custody arrangement. Here, Harvey has had his girlfriend Patrice move in with him and as a result his daughther. The party moving for a modification must have legitmate concerns with how the change will affect the child to justify a modification hearing.
2. The court should not modify the custody order to grant Harvey and Wanda joint physical and legal custody of their daughter. Under common law, when deciding the custody of a child a court must act in the best interests of the child. Joint physical and legal custody is when parents split custody of their child, allowing both parents to have an equal say in legal matters concerning the child and live with the child for set periods of time. In deciding on joint custody courts consider a number of factors including: the relationship between the parents, whether the parents desire joint custody, the child's primary care giver, the distance between the parent's home, the child's preference, the emotional and physical health of the child, the morals of the child, and the financial ability of the parents to provide for the child.
Here, several factors favor leaving the custody arrangement as is and not awarding Wanda with joint custody. First, the parents have a bitter relationship with each other, where they have constantly argued with each other. A court is not likely to award this behavior with joint custody because it would make it difficult to enforce the agreement especially, because this relationship has not improved. Next, courts will also take not of the fact that neither party sought joint custody with the other parent. On both occasions both parties sought sole custody and that stance has not changed in asking for a modification. Addtionally, Harvey appear to be the primary care giver of their daughter, which the court look favorably on to maintain structure in the child's life.
The court will also strongly consider the change in the child when deciding on a custody modification. Here nothing indicates that the current custody arrangement or Patricia moving in has negatively affected the child. Harvey testifies to that fact and to the fact that Patricia and the daughter appear to get along well. Beyond that there is no indication that the daughter has suffered physically or mentally as a result of the current arrangement
Only a few factors favor modifying the agreement. The first is the daughter's indication that she wouldnt mind seeing her mom more often. Courts give some deference to the opininon of the child bu that is also dependent on the child's age. The final factor would be the concern of exposing the child to nonmartial cohabitation. Court may consider the effect an upbringing could have on a child's morals. However, for courts to intervene on the fundamental right of a parent to raise their child, it would need to be necessary to promote a compelling government interest. For a moral issue, it must be something that would shock the conscious and in the modern world, two people living together without being married is becoming commonpalce. Wanda would need to show a significant adverse effect that Patricia's moving in has had on the daughter.
Since the former couple has maintained their bitter and acrimonious relationshipship courts could call upon a neutral child-custody evaluator to provide a recommendation for the court to make their final decision.
MEE-6
Sample Answer
I. The issue is whether initial mandatory disclosures must include witnesses and insurance information
Initial mandatory disclosures are disclosures that a party must make within 30 days of an initial discovery conference, or filing in cases without such a conference. Initial disclosures generally include background information on the case that is baseline to both parties, and includes: (1) any policies of insurance that would pay for any portion of the judgment, and (2) a list of witnesses or documents that support any claim or defense made by the party.
Here, the man likely needed to include the insurance policy, but not the list of the three witnesses. As a preliminary matter, the man would need have included the insurance policy in the initial disclosures considering he needed to include any policy of insurance that may pay the judgment - car insurance covers these sorts of accidents, so it is likely that his insurance will do the same.
However, as to the identities of the men, the man did not need to include them on his initial disclosures because the information that they possessed did not support a claim or defense of the man. The only information that these three witnesses gave was that the man was looking at his phone at the time of the accident - this does not support the man's defense or claim, but does support the woman's. The man is not under an obligation at the initial disclosure stage to provide the woman with these names, therefore, as they only further her claims in the litigation. The man, correctly, later identified these men in interrogatories, which was proper.
Thus, the man: (1) should have included information on his insurance policy, as it potentially would pay the woman's judgment, but (2) did not need to include details on the three men, as they only supported a claim or defense of the woman.
II. The issue is whether questions in a deposition must be relevant
Discovery requests of a party, including questions asked in a deposition, must merely be reasonably calculated to lead to the discovery of admissibe evidence. This means that a question asked in an oral or written deposition need not be directly relevant on any issue in the case, so long as the question is reasonably calculated to lead to the discovery of admissible evidence down the line. This is a broad scope of discovery, as discovery requests may seek even inadmissable evidence so long as its discovery will lead to admissible evidence later.
Here, the Court erred in its denial of the woman's motion to compel. The question asked by the woman in the deposition was absolutely reasonably calculated to lead to admissible evidence of the man - the parties had gotten in a car accident, and one party's eyesight being poor would be admissible evidence in any sort of case as it would support a theory of negligence on the part of that party. Essentially, the question about the man's eyesight was reasonably calculated to lead to the man's answer concerning his eyesight, which would have been admissible evidence at the later trial considering the man's negligence will be at issue.
Moreover, the mere fact that the judge may have felt the evidence was inadmissibe due to lack of relevance is not a sufficient basis for denial of the questioning - the woman was entitled to seek even inadmissible evidence under the broad scope of discovery allowed by the FRCP, so long as her requrests were reasonably calculated to lead to admissible evidence. Therefore, the court's denial of the woman's motion was in error.
Relevance requires evidence to be: (1) probative, meaning it makes a fact more likely than without the evidence, and (2) material, meaning relating to a fact of consequence.
Here, the Court erred by stating that the man's eyesight was not relevant at all. The man's eyesight is clearly relevant to the issue of negligence considering: (1) the man having poor eyesight makes it more likely that he was negligent if he wasn't wearing glasses, and (2) the man's negligence is the whole point of the trial. Therefore, the objection of the court to the woman's questions is unfounded: the questions she sought to ask would clearly have discovered relevant information to be used at trial, and the question was reasonably calculated to uncover such infiormation.
Therefore, the Court erred in denying the woman's motion to compel considering her questioning at the deposition was reasonably calculated to lead to the disovery of admissible evidence, and the issue the woman sought to uncover was directly relevant to the issue of negligence.
III. The issue is whether the woman is entitled to judgment as a matter of law
A judgment as a matter of law (JMOL) is a motion that tests the sufficiency of the evidence, which must be made at the close of a party's presentation of evidence during trial. The standard for a JMOL asks the Court to determine whether a reasonable jury could find for the non-moving party based on the evidence presented, taking all inferences in a light most favorable to that party and without weighing the credibility of witnesses in a jury trial.
Here, the Court should not grant the woman's motion. The facts indicate that, giving all inferences to the man, a reasonable jury could conclude that he was not negligent. The man presented sufficient testimony showing his lack of negligence and in his defense by putting on a witness that stated he was not checking his phone while driving. A reasonable jury could conclude, even with the quantum of evidence presented by the woman, that the man's witness is telling the truth and give a verdict in favor of the man.
The woman will, of course, argue that: (1) the greater number of witnesses to her point establishes the issue sufficiently to permit JMOL, and (2) her witnesses are more credible than the man's considering that (a) his friends are testifying against him and (b) only his brother is testifying for him. To address the counterpoints to each of these objections: (1) the quantum of evidence is irrelevant in an JMOL considering all that the court inquires into the sufficiency of evidence supporting the verdict, and the man's one witness is sufficient to permit a verdict in his favor for the reasons listed above, and (2) it is not in the providence of the court to weigh witness's credibility for the purposes of determining a JMOL; witness credibility is a matter for the jury, and the court would commit error by doing the same.
Thus, the court should deny the woman's JMOL, as the man has presented sufficient evidence to support a verdict in his favor by presenting his brother's testimony.
Sample Answer
Mandatory Initial Disclosures
The issue presented is what is required to be initially disclosed, absent a request, upon the start of discovery. Upon the start of discovery, and without request, a party is mandated to produce the following initial disclosures: substantive information a party may use to support its claim or defense at trial, as well as information relating to relevant insurance coverage which concerns a subject of the litigation.
Here, the man failed to make the following disclosures: (1) he failed to mention his car insurance policy, which provided coverage up to $1 million for personal injuries and property damage. The insurance coverage related to accident damage up to $1 million for both personal injuries and property damage, both of which might be implicated in the negligence action at issue involving a car accident. Accordingly the insurance policy was a mandatory disclosure the man was required to make.
Next, here, (2) the man failed to mention a bystander who had witnessed the accident, who recounted that the man had been looking at his phone at the time of the accident. The requirement here is disclosure of information which spefically supports a claim or defense. Here, the man will be arguing that he was not neligent in the relevant accident. The fact that the bystander testified that the man was looking at his phone at the time of the accident will negate, rather than support, his claims and defenses, and thus is not a mandatory initial disclosure.
Similarly, here, (3) the man failed to mention the man's two friends, who stated that the man been trying to read drections on his phone at the time. Again, the requirement is disclosure of information which spefically supports a claim or defense. Here, the man will be arguing that he was not neligent in the relevant accident. The fact that the friends stated that the man was looking at firections at the time of the accident will negate, rather than support, his claims and defenses, and thus is not a mandatory initial disclosure.
Note: None of the information constitutes work product, given that the information is the mere statements of the individuals. Despite the fact they were intially discovered through investigation by a attorney for the purpose of investigating the accident, there is no other way to obtain such information.
Motion to Compel
A party, throughout the course of discovery, is obligated to produce all information which is relevant to the claims or defenses at issue and which is not unduly burdensome. Such relevant information must be proportional in scope to the litigation at issue. There is no specific preclusion of medical information which is relevant to a claim or defense in the case. Such rules apply to depositions, a critical stage of discovery,
Here, the woman's attorney, during deposition, asked the man about his eyesight. The man's attorney vehemently objected and eventually refused to continue on with the deposition. The trial court precluded the information on the basis that it related to a physical condition and related to his health and thus is irrelevant to the tort suit. However, the trial court erred. Given that the man was driving a car at the time of the alleged injury, his ability or inability to see is directly relevant to whether or not he was negligent at the time at issue. The question created no undue burden on the defendant, nor does it touch upon privileged information, or information which is outside the scope of the needs of the litigation. Accordingly, the court erred, and the man should have been compelled to provide an answer to the relevant question.
Judgment as a Matter of Law
At issue is whether the court should have granted the plaintiff's motion for judgment as a matter of law. Courts shall grant motions for judgment as a matter of law, when and only when, viewing the evidence in the light most favorable to the non-moving party, no reasonable jury could conclude on the facts at issue in favor of the non-moving party. The court is to make absolutely no determinations regarding the credibility of the evidnece and witnesses presented, and is merely obligated to question whether there remains any facts at issue. Such motions are to be made procedurally proper in order to be granted, following the close of the non-moving party's case in chief or the close of the evidence at trial.
Here, the defendant is the moving party and made the motion following the defenant rested his case. The plaintiff alleges negligence. In support of her claim, the plaintiff has provided testimony from two witnesses that the man was looking at his phone at his phone at the time of his accident, as well as expert testimony from her physician as to the nature and extent of her injuries. The defendant called only his brother, who testified he was not looking at his phone when the accident occurred.
The court should rule against the motion, given that a reasonable jury could conclude in the man's favor given the evidence he presented. Despite the fact the woman presented evidence, arguably more credibly, that the man was looking at his phone, the man rebutted the evidence with the testimony of his brother. Thus, a fact at issue remains, and the court cannot make a credibility determination. The court should rule against the motion, viewing the evidence in the defendant's most favorable light.