EMPHASIS Flashcards

Question

Director/Officers' Fiduciary Duties--Duty of Care and Business Judgement Rule

Answer 1

Directors and officers owe a DOC to corp. Business Judgement Rule--Directors and officers are protected from legal liability under the business judgement rule; i.e. in the absence of fraud, illegality, or self-dealing cts will not disturb GF business decisions. *A typical devision protected by BJR includes whether to declare a dividend and the amt of any dividend SOC--act w/ the care that a person in a like position would reasonably believe approp under similar circumstances; special skills expected to be used (i.e. accounting/legal background). To overcome the BJR it MUST be shown that: 1) the director/officer did NOT act in GF (e.g. consciously allowing conduct that violates the law); 2) the director/officer was NOT informed to the extent that the director/officer reasonably believed was nec before making a decision; 3) the director/officer did NOT show objectivity or indp from the director's relation to or control by another having material interest in the challenged conduct; 4) there was a sustained failure by the director/officer to devote attention to an ongoing oversight of the business and affairs of corp; 5) the director/officer failed to timely investigate a matter of signif material concern after being alerted in a manner that would have caused a reasonably attentive director to do so; or 6) the director/officer received a financial benefit to which he was not entitled. Reliance Defense--a director/officer entitled to rely on the expertise of officers and other employees, outside experts, and committees of the board.

Answer 2

Director/Officer may NOT receive an unfair benefit to the detriment of the corp w/o effective disclosure and ratification. DOL usually dealing w/ 1) self-dealing transactions (also applied to family members of D) or 2) corp opportunity doctrine--i.e. usurping or stealing a corp opp thus preventing $ from coming into corp. Corp Opportunity--need to disclose if: 1) corp has an existing interest or expectancy arising from an existing right (i.e. "interest or expectancy" test); or 2) the opp is w/in the corp's current/prospective line of business (i.e. broader "line of business" test) Insulation from Liability: --Ratification--self-interested transaction may be upheld if it is disclosed and ratified by either a maj of disinterested directors OR a maj of disinterested shareholders; --Fairness--also if a director/officer can demonstrate that the transaction was fair (e.g. it was a market-rate salary or the corp would never/could not pursue that opp) then ct will approve.

Answer 3

Shareholder sues on behalf of the corp for a harm suffered by the corp, and any recovery gen goes to corp. Standing--to bring the suit reqs that P be a shareholder at time action is filed and when the act/omission occurred that caused the harm; P must make a written demand upon BOD 90 days before filing unless it would be futile.

Answer 4

Actual express auth--often defines by bylaws or set by BOD. Actual Implied auth--officers have implied auth to perform tasks that are reasonably nec to carry out the officer's duties as long as the matter is w/in scope of ord business; based on the manifestations (words/conduct) of the corp/partnership the agent reasonably believes she poss auth. Apparent auth --officers have apparent auth if the corp/partnership holds the officers/employees out as having auth to bind the corp/partnership as to 3Ps. Ratification--Where the corp/partnership agrees to the K after it has been entered into, either formally and expressly through a formal decision or impliedly by accepting the benefits of K. Look for facts showing closely held corp--if so then directors may also be acting as officers so okay since less formal structure; otherwise if there are officers expressly vested

Answer 5

For a board of directors' acts at a meeting to be valid--a quorum of directors must be present at the meeting (absent a higher level specified in the articles of incorp or bylaws); the assent of a maj of the directors present at the time the vote takes place is nec for bd approval. Dividends--the power to auth a dividend rests w/ BOD; shareholder cannot sue corp to compel dividend unless shareholder can prove: 1) funds legally available for payment of dividend and 2) bad faith on part of BOD in their refusal to pay (usually this is not met, especially if facts show the BOD wanted to expand into a new line of business or invest the $ back into company--protected by BJR).

Answer 6

Certain major events in a corporation must be put to a shareholder vote. These include a merger or an acquisition of substantially all of the corporation's assets. Before disposing of substantially all of a corporation's assets, there are procedures that must take place: --First the board must pass a resolution, either during a meeting or by written consent, agreeing to the acquisition. Appropriate notice must then be given to shareholders, informing them of the terms of the transaction and the date of the shareholder's meeting for purpose of the vote. At the meeting, a quorum of outstanding shares must be present, and a majority of shares voted must be in favor of the acquisition.

Answer 7

A GP is formed when 2 or more ppl associate to carry on a business for profit as co-owners; no written formalities req to form GP; subj intent of Ps to form GP also irrelevant. General partners--have equal rights to manage the business and control its affairs; each personally and jointly and severally liable for the debts of the GP whether arising in tort or contract; no limited liability for GPs. Profit sharing=presumption of GP and that ppl sharing the profits are partners. Other factors that may evidence a partnership (but not presumption)--whether the Ps call themselves "partners" and the extent of business activities i.e. mgmt and control of business.

Answer 8

A limited liability partnership is a special type of partnership that affords limited liability to all its partners, created by filing a Statement of Qualification with the Secretary of State. In a limited liability partnership, the individual partners are not personally liable for any damages sustained by the partnership itself. A partnership is liable for its partner’s actions if the partners have authority to act for the partnership.

Answer 9

TIC--default concurrent interest; sep but undivided interests in the prop; NO ROS--each T can transfer interest during lifetime; each T has right to poss whole--so if one T transfers undivided interest via lease the tenant obtain's only T's concurrent right of poss w/ other TIC. JT--big diff from TIC is ROS; grantor must make clear expression of intent plus have survivorship language; 4 unities req otherwise TIC--1) unity of poss; 2) unity of interest; 3) unity of time; and 4) unity of instrument. Securing mortgage as JT--most JX lien theory and does not destroy JT; min JX title theory thus would destroy JT. Devise NOT allowed under JT b/c of ROS Inter Vivos Transfer allowed --severs ROS but if conveyance by only 1 of more than 2 JTs does NOT destroy JT of remaining JTs.

Answer 10

1.) Poss and Use--each Co-T has right to poss all of prop regardless of share (unless agreement to contrary). 2.) Ouster--Co-T in poss denies another Co-T access to prop; remedies include: injunction granting access; or damages for value of use while unable to access prop. 3) Rental income from 3P--divided based on ownership interests. 4.) Op expenses--taxes/mortgages divided based on ownership interest and Co-T can collect from others for excess payments; BUT if 1 co-T in sole poss then can collect only to the extent that those expenses exceed the rental value of prop. 5.) Repairs/improvements--No ROR but co-T can get credit in partition action.

Answer 11

Express--must be in writing and can be created by grant or reservation; subj to recording statutes; easement appurtenant is one that benefits the the dom estate and "runs w/ the land"--i.e. transfers automatically when dom estate transferred; negative easement--i.e. preventing someone from doing something--must be express. Implied--informal/arise out of circumstances; transferable; NOT subj to SOF; NOT subj to recording statutes thus does not req notice.

Answer 12

Nec--created only when prop is useless w/o it--e.g. prop landlocked after sale; Elements--1) common ownership (dom/servient estates were owned by 1 person); and 2) nec at severance--mere inconvenience not enough. Implication--1) common ownership: 2) owner used as if easement before severance; 3) after severance owner use continuous; 4) reasonably nec to dom estate's use.

Answer 13

Prescription--Like acquiring easement by AP; elements same as AP except exclusivity. Estoppel--starts w/ permissive use (i.e. a revocable license); then creates reliance--i.e. look for 2nd neighbor investing $ in reliance on first neighbor's promise; and permission withdrawn--if reliance detrimental to 2nd neighbor, 1st neighbor estopped from withdrawing permission.

Answer 14

A written promise to either do something on the land OR a promise NOT to do something on the land. 1.) Writing--subj to recording acts; 2) Intent to bind successors--e.g. express language such as "and his heirs/assigns." 3.) Touch and Concern land 4.) Notice--actual or record; to be binding a restrictive covenant must be placed on prop at time it is conveyed. 5.) Horizontal Privity--required to run the burden (i.e. enforce rights against D) but not req to run benefit; ONLY arises in connection with a conveyance of a real property interest, such as in a deed, mortgage, or lease--if not then NO horizontal privity. 6.) Vertical privity--to run burden successor must take original P's entire interest; to run benefit successor need only take interest out of original P's interest. Remedy for breach of real covenant--damages. Zoning ord does NOT preempt real covenant even if it is a permissible use under the ord.

Answer 15

Easier Reqs than Real Covenant: 1) Writing; 2) Intent to run w/ land 3) Touch and Concern land 4) Notice--actual/record/or inquiry at time prop conveyed. 5) No privity req Remedy--injunction

Answer 16

A physical taking occurs when the government (or a third party authorized by the government) permanently and physically occupies private property—regardless of the public interest it may serve. The Fifth Amendment takings clause, which is applicable to the states through the Fourteenth Amendment due process clause, bars the government from taking private property unless: (1) the taking is for a public use and (2) the owner receives just compensation—i.e., the property's fair market value. *The government may also be liable for losses resulting from reliance on the assumption that there would be no taking--e.g. recent improvements. *But gov NOT liable for relocation costs. Gov reg can amount to a taking--i.e. regulatory taking. Two types: Per Se Taking--occurs when a regulation results in a permanent total loss of the property’s economic value (high bar to meet). *E.g. Commercial developer has not suffered per se taking since he may still use or sell the lot for residential dev. Partial Taking--analyze following factors: (1) the economic impact of the regulation on the property owner; (2) the extent to which the regulation interferes with the owner’s reasonable, investment-backed expectations regarding use of the property; and (3) the character of the regulation, including the degree to which it will benefit society, how the regulation distributes the burdens and benefits among property owners, and whether the regulation violates any of the owner’s essential attributes of property ownership, such as the right to exclude others from the property.

Answer 17

Existing Nonconforming Properties--zoning changed and structure does not satisfy zone's reqs, zoning ord must make provision for prop w/ an existing nonconforming use--i.e. get nonconforming use grandfathered in; owner cannot expand nonconforming use (i.e. the nature and character of use cannot sub change) and may abandon right to use prop in manner that does not conform to zoning ord; owner of the right to use property in a manner that is not in keeping with the zoning ordinance may transfer that right to another person. *Vested Right--In determining whether a property owner has acquired a vested right in the nonconforming use, most courts require that, at the time that the zoning ordinance takes effect, the property owner must, in good faith, have secured any necessary permit from the proper local authority (e.g.,a building permit) and also have made substantial progress toward achieving the nonconforming use. In a few states, securing a permit by itself is sufficient. *Invol Term of Nonconformity--a prop owner whose nonconforming use has been grandfathered may suffer term of nonconforming use due to natural forces (but NOT due to D's neg in collapsing building). Zoning Variance / Post-ordinance non-conforming use--reserved for unusual/exceptional situations particular to owner's prop; prop owner req change after zoning ord in place; P applying for variance must show: 1) compliance would create unnec hardship; 2) hardship from circumstances unique to prop (not financial circumstances of owner); 3) owner did not create hardship; *e.g. prop owner selling a portion of prop so that remaining portion cannot satisfy zoning ord NOT okay b/c owner created hardship. 4) variance in keeping w/ overall purpose of ord; and 5) variance will not cause sub harm to gen welfare. Two types of variances: 1) Use variance--sought to obtain right to use prop in manner not permitted by zoning ord; e.g. operating business in residential neighborhood--the absence of any reasonable permitted use sometimes req before use variance granted; and 2) Area variance--focus on restrictions on the manner in which prop developed; e.g. a structure may not be built w/in 20 ft of boundary of prop or be more than 2 stories high--gen more likely to be granted than a use variance b/c often arises due to odd shape of prop.

Answer 18

(1) D causes harmful or offensive contact w/ person of another; and (2) acts w/ intent to cause that contact or apprehension of that contact. Causation--must result in contact Offensive--to a person of ord sensibilities (lack of express/implied consent indicates offensive). Contact--does not need to be direct; contact w/ anything connected to P's person qualifies as contact w/ the P's person for purposes of battery. Intent--only reqs intent to contact, not offense. Transferred intent applies--i.e. the defendant’s intent to commit a battery against one person may be transferred to a different person. Damages--eggshell-P rule applies so D liable for all harm that flows even if much worse than D expected (but no proof of damages req to prevail).

Answer 19

(1) D causes reasonable apprehension of imminent harmful or offensive bodily contact; and (2) D intends to cause apprehension of such contact or to cause such contact itself. Apprehension--must be reasonable and P must be aware of D's action (unlike battery).

Answer 20

D intentionally or recklessly engages in extreme and outrageous conduct that causes P severe emotional distress. Public figures must also prove publication of a false statement made w/ actual malice to recover for IIED. Extreme and outrageous--conduct exceeds possible limits of human decency, so as to be intolerable in civilized society (more likely if D in position of auth over P or P is young child/elderly). Severe ED--if P is hypersensitive and experiences severe ED unreasonably, then there is no liability unless D knew of P's heightened sensitivity. Intent--to cause ED or act w/ reckless disregard as to risk of causing ED. Damages--P must prove severe ED beyond what reasonable P should endure: General damages--naturally flow from injury; e.g. medical bills and pain and suffering. Special damages--need to be proven and include damages such as lost wages due to the tort. 3P--A defendant whose extreme and outrageous conduct has harmed a third party may be liable for intentional infliction of emotional distress if: (1) the plaintiff contemporaneously perceived that conduct; (2) the plaintiff was closely related to the third party, and (3) the defendant knew of the plaintiff's presence and that relationship.

Answer 21

(1) D intends to confine or constrain another w/in fixed boundaries. (2) the actions/inactions directly/indirectly result in confinement; and (3) P is conscious of confinement or harmed by it. Methods--use of physical barriers, physical force, threats (NOT future threats), invalid invocation of legal auth, duress, or refusing to provide safe means of escape (omission). Intent--D must act w/ purpose of confining P or knowing P's confinement sub certain to result. Damages--nominal and actual available, just like other intentional torts. Shopkeeper's Privilege--Store must have reasonable grounds to believe that the customer was stealing, the detention must be for a reasonable period of time, and it must be conducted in a reasonable manner. If all of these elements met then no FI claim.

Answer 22

D intentionally causes physical invasion of someone's land w/o prop owner's permission. Intent--only reqs intent to enter land, NOT intent to commit wrongful trespass. Can include: Physical invasion--includes causing objects to invade land; OR Intangible invasion--i.e. smoke or vibration--but only if it causes physical harm/damage. Rightful P--anyone in poss of land Damages--no proof of actual req

Answer 23

Intentional interference w/ P's right to poss personal prop by: --dispossessing P of chattel; --using or intermeddling w/ P's chattel; --or damaging chattel Intent--only reqs intent to do act, not intent to interfere. Mistake about legality NOT a defense. Damages--actual/nominal/loss of use and/or cost of repair.

Answer 24

Intentionally committing an act depriving P of poss of his chattel or interfering w/ P's chattel in a manner so serious as to deprive P entirely of use of chattel. Intent--only reqs intent to commit act that interferes. Mistake--of law/fact not a defense. Damages--full value at time of conversion. Conversion also occurs even when D originally has permission from P but EXCEEDS the scope of that permission.

Answer 25

Use of reasonable force (i.e. proportional/not excessive) to defend against offensive contact/bodily harm. Duty to retreat--modern maj rule no duty to retreat before using self D. Can't be initial aggressor to claim self-D; injury to bystander ok as long as D not neg toward bystander.

Answer 26

One is justified in using reasonable force in defense of others upon a reasonable belief that the defended party would be entitled to use self-defense, i.e., that the person was in danger of the imminent use of force. The amount of force exercised must be proportionate to the anticipated harm. Additionally, the defendant is not liable for acting on a mistaken belief that the third party is in danger as long as his belief is reasonable

Answer 27

Reasonable force may be used if the person reasonably believes it is nec to prevent tortious harm to prop. NO deadly force allowed in defense of prop, including deadly mechanical devices.

Answer 28

Reasonable force may be used to reclaim personal prop that has been wrongfully taken, but only if D first reqs its return, unless that would be futile. Never permitted to regain poss of land.

Answer 29

Gen available to someone who enters someones's land to prevent injury or other severe harm. Private nec--D not liable for nom damages but still liable for actual damages if entered land for D's benefit (this defense supersedes defense of prop defense to intentional torts) Public nec--nec to protect large # ppl from public calamity; not liable for any damages.

Answer 30

Can be spoken (slander) or written (libel) in which P must prove: Private P / NOT a matter of public concern: 1) defamatory (i.e. false) language that diminishes respect/esteem *NOT statements of opinion unless factual basis--e.g. "In my opinion P is thief" is actionable b/c implies P stole something vs "P is a lousy artist" NOT actionable b/c ppl can disagree regarding quality of P's paintings; 2) of or concerning P; 3) negligently/recklessly/intentionally published to a 3P (not strict liability); 4) which caused damage to P's reputation. *Only causes damage to P's reputation if a 3P's reasonable interpretation of that statement would tend to do so--i.e. does NOT req 3P to actually believe defamatory statement; merely req's 3P to understand defamatory nature of statement. If defamatory statement is about a matter of PUBLIC CONCERN P must also prove Fault--i.e. negligence as to falsity of statement for private figure and actual malice for public figure--i.e. knowledge statement was false or reckless disregard as to whether it was false. Slander typically reqs proof of special damages--most often econ damages-- unless the statement falls into one of four categories of exceptions for slander per se: 1) crim activity; 2) misconduct or incompetence in P's trade/occupation; 3) sexual misconduct; 4) P having a "loathsome" disease

Answer 31

1) Promissory Estoppel (substitute for consideration)--must be reasonably foreseeable detrimental reliance would occur. 2) Partial Perf--unilateral then offeror cannot revoke once offeree begins perf--i.e. offeree will have reasonable time to complete perf. *But offeror may revoke general offer even after offeree begins perf--assuming revocation is equally public offeree need not know about it. 3) Option K--but needs to be supported by consideration. 4) Firm Offer under UCC--offer to buy/sell goods irrevocable if: -- offeror=merchant; -- assurance that offer remains open (no time period then "reasonable term" but cannot exceed 3 months unless there is consideration); and --assurance in signed writing (lenient, initialing next to letterhead or e-sig counts)

Answer 32

UCC--an offer to buy goods for prompt shipping shall be construed as inviting acceptance either by a prompt shipment of conforming OR non-conforming goods, OR a prompt promise to ship. S sends a prompt shipment of non-conforming goods--accepting offer AND breaching K simultaneously; B can accept or reject and sue for breach. OR S can notify B that shipment of non-conforming goods being offered ONLY as an accommodation to B--i.e. S's shipment will NOT result in breach in this case b/c considered a counter-offer; B can choose to accept accommodation shipment thus forming K; or reject accommodation thus no K will be formed at all.

Answer 33

Substitute for consideration--promise binding if: 1) promisor should reasonably expect it to induce action or forebearance; 2) does induce such action/forbearance; and 3) injustice can be avoided only by enforcing promise. Remedy limited as justice reqs i.e. Gift in lieu of valid consideration--test is whether offeree could have reasonably believed intent of offeror was to induce the action--if so then gift enforceable under promissory estoppel if sub reliance.

Answer 34

Must be w/ regard to belief about existing fact not in accord w/ facts as to basic assumption on which K made. Mutual mistake--voidable if has material impact on transaction; but if only materially impacts 1 P then only adversely impacted P can void (or seek reformation). BUT if conscious ignorance P may bear risk of mistake--i.e. aware of limited knowledge. Unilateral--when only one of the Ps mistaken as to essential element of K either P can gen enforce K on its terms; BUT mistaken P can void K if: 1) mistake existed at time K was formed; 2) mistake relates to basic assumption of K; 3) the mistake has a material impact on the transaction; 4) adversely affected P did not assume the risk--i.e. did not have any reason to distrust other P--of the mistake; and either 5) enforcement would be unconscionable OR 6) non-mistaken P caused the mistake, had a duty to disclose or failed to disclose the mistake, or knew or should have known the other P mistaken.

Answer 35

Performance is generally due once a contract is formed, but a duty to perform can be: 1) delayed by a condition--i.e. a certain event must occur before perf becomes due; condition precedent; or 2) discharged by a condition—excuses perf once a specified event occurs; i.e condition subsequent An express condition precedent will be excused if--a party whose performance is subject to that condition wrongfully prevents or interferes with its occurrence—i.e by breaching the duty of good faith and fair dealing (which includes the duty to cooperate) that is implied in every contract. When this occurs, the condition no longer needs to occur for the interfering party's performance to become due.

Answer 36

Unlike express conditions--a P who has sub performed his duties and sub complies w/ an implied or constructive condition can trigger the ob of other P to perf even if the P has breached in some minor way. Expectation Damages--A P who sub perf her K obs can recover the K price minus any amt that it will cost the other P to obtain the promised full perf.

Answer 37

Performance can be discharged due to impracticability if: 1) an unforeseeable event has occurred; 2) the contract was formed under the basic assumption that the event would not occur; and 3) the party seeking discharge of performance is not at fault. --But if a party assumed the risk of an event happening that made performance impracticable, then the party's performance will not be discharged by impracticability. --Impracticability NOT a defense just b/c P merely made a bad deal and will have to pay more than originally contemplated--i.e simply not being in ideal financial position does not discharge duty to perf.

Answer 38

1) Full perf of K by either side; or 2) Writing signed by P against whom K is asserted and covers fund facts--i.e. shows K was made; identifies Ps and contains essential elements of deal.

Answer 39

1) Signed writing; or 2) Part perf of K if any two of three elements met: --Poss; --Payment of all or part; --Improvement to land

Answer 40

Prevents earlier statements /writings from contradicting K terms. Merger clause=complete integration--e.g. "this is the entire agreement b/t Ps"; overrides UCC presumption of partial integration. UCC presumes partial integration--i.e. can bring in outside evidence as long as evidence consistent w/ writing; cts ask whether disputed term is one that would naturally be left out of agreement--if not then K likely fully integrated. Even if complete integration P can intro evidence of: 1) 2nd sep deal; 2) Prior comm designed to interp ambiguous term in final agreement; 3) D against K formation--e.g. fraud in the inducement or unilateral mistake.

Answer 41

NOT incorporating PER (no prior comm about the term): First--Ct will apply the plain-meaning rule, which provides that the objective definitions of contract terms control the meaning of the contract. Second: Trade usage--In event term is deemed ambiguous even after applying plain-meaning rule, ct may go outside the doc and look at trade usage to interp or clarify the ambiguity. Incorporating PER (applying prior comm about term)--if term ambiguous then outside evidence may be introduced to explain.

Answer 42

The doctrine of anticipatory repudiation generally applies when a contracting party clearly and unequivocally indicates an unwillingness to perform a promise before the time for performance is due. Upon repudiation, the nonrepudiating party may: 1) treat the repudiation as a breach of the contract and sue immediately; or 2) ignore the repudiation and demand performance. However, this doctrine does NOT apply when the date of performance has not passed and the nonrepudiating party has fully performed--under those circumstances, the nonrepudiating party must wait until the repudiating party's performance is due before filing suit.

Answer 43

Purpose: Place nonbreaching P in same position as if K has been performed--includes: 1) Expectation Damages ("Benefit of your bargain")--i.e. diff b/t the value of the perf w/o breach (what was promised) and the value of perf w/ the breach (what was received); B can either: ---Recover the mkt price minus K price; or ---"Cover" by purchasing similar goods elsewhere and recovering the replacement price minus K price. --ED do NOT include atty's fees 2) Incidental damages--reimbursement for commercially reasonable expenses (e.g. shipping costs) that the nonbreaching party incurred as a result of the breach; and Also breached-against P must mitigate damages--if not then right to incidental damages (e.g. shopping costs) likely reduced by amt P could have mitigated shipping costs by. 3) Consequential damages--need to be: 1) proven w/ reasonable certainty; and 2) reasonably foreseeable by D--i.e. natural and probable consequence of breach or "in contemplate of Ps at the time K was made." *Ps to a K can exclude or limit consequential damages--agreement gen enforceable unless there is BF. High Volume S--gets profits from both sales (LVP). Incomplete Perf of Service K: ED= expected profit + costs incurred -- amt paid by breaching P -- anything sold to 3P

Answer 44

Purpose: When expectation measure too speculative, place nonbreaching party in same position as if no contract had been formed. Nonbreaching party may recover for any expenses incurred in reasonable reliance that the contract would be performed; expenses MUST be reasonable. However, recovery of reliance damages may be reduced by the amount spent by the nonbreaching party on materials that could reasonably be repurposed for another job--e.g. a painter will not be able to recover for cost of paintbrushes he can easily use for other job.

Answer 45

pursue recission as equitable remedy. Recission—an order that cancels the K; P seeking recission wants it to be as though K never existed; perhaps b/c they were fraudulently induced to enter into the agreement, or b/c both Ps to the transaction were mistaken about what the K reqs—i.e. defeats “meeting of the minds” b/c something corrupted it, thus does not reflect vol agreement. Elements: --Consent/grounds (e.g. mistake/fraud); --Prompt notice of intent to rescind; and --Offer to restore/ability to restore Ps back to status quo

Answer 46

P may seek recovery of the benefit obtained by D in the form of: -- a money judgment; -- a constructive trust--i.e. compels D to transfer ownership of asset to P; or --an equitable lien--i.e gives P right to foreclose *E.g. since D purchased stock with those proceeds, P could also request the court to impose either a constructive trust or an equitable lien on that stock. Since the equitable lien would only give her the right to foreclose on her lien and recover the $250,000 from the proceeds of the sale of the stock, while a constructive trust would give her the right to compel Mark to transfer ownership of the stock to her, the latter would be far more favorable, provided the court found that this result is equitable in light of Mark's wrongful conduct. NOT the same as damages--i.e. damages comp for P's loss, whereas rest prevents D from unjustly benefitting. Elements: --P conferred benefit upon D --D knows or appreciates the benefit --D’s acceptance or retention of the benefit under the circumstances is such that it would be inequitable to allow D to retain benefit w/o the paying of value in return. --May be an issue with identification if D commingled proceeds w/ funds from other sources.

Answer 47

Reformation is an equitable remedy that courts provide when a party has shown the elements of unilateral or mutual mistake. When a party successfully seeks reformation, the court will re-write a contract in order to conform to the parties' intent without the mistake.

Answer 48

For the ct to grant the equitable remedy of SP--there must be: 1) Inadequate Legal Remedy--i.e. when the subj matter is rare or unique; e.g "one-of-a-kind artistic design." 2) Definite and certain terms--i.e. K must be valid and the terms must be suff certain (not ambiguous) for the ct to award SP. 3) Feasibility--enforcement of K must be feasible; may not be feasible if reqs too much supervision. *Typically NOT feasible in a service K b/c of difficulty in supervision and b/c cts feel it is tantamount to invol servitude in violation of 13A. 4) Mutuality--reqs that the P seeking SP has already fully perf or can show that he is ready, willing, and able to perf. 5) No Defenses/Fairness: *Unclean Hands--a defense to equitable remedy when the P who seeks equitable relief himself engages in serious misconduct--i.e. misconduct must be unethical or immoral--in close relation to the claim. *Laches--P unnec delays in bringing action and the delay prejudices D. If complete SP not possible then P may seek abatement in purchase price.

Answer 49

A TRO is a short-term injunction that is typically sought at the first stage of the plaintiff’s request for injunctive relief. Its purpose is to maintain the status quo pending a hearing for a preliminary injunction, and it may be issued ex parte upon a sufficient showing of urgency. In California, a TRO issued without notice to the defendant generally may not last longer than 15 days. P must establish: 1) P will suffer irreparable harm if TRO not issued--i.e. inadequate remedy at law; 2) P's hardships if TRO not issued will be signif greater than hardships on D/3Ps if issued--i.e. balancing of equities favors P; and 3) Likelihood that P will succeed on merits of claim--e.g. breach of K claim. *Defenses gen NOT considered at TRO stage b/c the opposing P does not have an opp to present an arg against the TRO--defenses reserved for Preliminary Injunction stage.

Answer 50

ike a TRO, a preliminary injunction is a provisional remedy designed to maintain the status quo pending a trial. It is issued after notice is given to the defendant and after the defendant is given an opportunity to be heard. The standard is the same as the standard for a TRO, but instead of expiring after 15 days, a preliminary injunction will preserve the status quo until trial. Reqs: 1) Irreparable Injury--apply TRO analysis; 2) Likelihood of Success--apply D's defenses--e.g. unilateral mistake; fraud/intentional misrep in Breach of K claim 3) Balancing of Hardships

Answer 51

Const elements to standing: 1) Injury in fact--must be concrete and particularized; 2) Causation--injury must be caused by D's violation of law; 3) Redressability--relief req of the ct must be able to prevent or remedy the injury Org Standing--an org may sue on behalf of its members if 1) the members would have standing to sue in their own right; and 2) the interests at stake are germane to the org's purpose.

Answer 52

The Establishment Clause of the First Amendment compels government neutrality towards religion. Challenges under this law are generally reviewed under the “historical practices and understandings” test, which imposes a presumption of constitutionality for longstanding monuments, symbols, and practices if NOT coercive (Lemon test overruled). However, if the law / gov action has a "predominantly religious purpose" (e.g. displaying monument of Koran in public park w/ no other monuments)--a court may forego this test and apply the more stringent strict scrutiny test--i.e. a law / gov action will be invalidated unless the government shows that it is necessary (i.e., uses the least restrictive means) to achieve a compelling government purpose.

Answer 53

The Free Exercise Clause (“FEC”) of the First Amendment-- applied to the states through the Fourteenth Amendment, includes freedom to believe and the freedom to act. While the freedom to believe in any religion (or no religion) is absolutely protected, religious conduct is not. Laws Targeting Religious Conduct--While neutral laws of general applicability that have an incidental impact on religious conduct are subject to the rational basis test, laws that intentionally target religious conduct are subject to strict scrutiny. A state law that is designed to suppress activity because it is religiously motivated is valid only if it is necessary to achieve a compelling government interest.

Answer 54

Any governmental regulation of speech that is content-based on its face will only be upheld if the regulation meets the strict scrutiny test. This means the regulation must be necessary to achieve a compelling government interest. Compelling Gov Interest--e.g. gov may have compelling interest in avoiding appearance of gov-endorsed religion in city hall; Nec to Achieve Interest--i.e. narrowly tailored; often fails this prong b/c typically a less restrictive means--e.g. the city could add disclaimer simply saying it does not endorse any one religion by providing space for their display.

Answer 55

Don't get to forum analysis unless facts show the forum is accommodating wide variety of speech-related activity. Trad Public Forum--e.g. public parks / sidewalks opened up for speech-related activities. Designated public forum--i.e. one that has not trad been used for speech-related activities but which the gov has made available for such use (e.g. city gov building). Rule (IS): TPM regs in trad / designated public forum OK if: --Restrictions on TPM of protected are justified w/o reference to the content of the reg speech; --The reg is narrowly tailored to serve a significant gov interest; and --The reg leaves open ample alternative channels for comm of the info. *Otherwise unconst CB reg in violation of FSC if the law / gov action also directly impacts religion--e.g. specifically prohibiting all religious displays in city hall--then may also violate EC b/c not gov neutrality towards religion.

Answer 56

Gov reg justified if: --Within the const power of the gov --Furthers an important gov interest --If the gov interest is unrelated to suppression of free expression—i.e. really saying is the law content-based and violation of the law depends on communicative impact of expressive conduct (e.g. flag burning)? --And if the incidental restriction on alleged First Amend freedom is no greater than is essential to the furtherance of that interest.

Answer 57

Overbreadth--If a law is facially overbroad, it will be invalidated. A law is overbroad if it burdens a substantial amount of speech or other conduct that is constitutionally protected by the First Amendment. Vagueness--A law is void for vagueness if a person of average intelligence cannot tell what speech is prohibited. *e.g. "religious symbols" could be considered too vague.

Answer 58

2 Qs: 1) Is the threatened interest a protected one? 2) If so what process is due? Protected interests--i.e. life (imposition of death penalty); liberty (i.e. physical confinement or any restriction of const rights such as free speech); or property (reqs legit claim of entitlement to the prop by statute/K/custom). Especially look for prop interests--e.g. if someone can only be fired "for cause" that P has a legit entitlement to continued employment; vs "at will" employees gen have no right to continued employment unless given concrete assurances (but they have a protectable interest in the terms of their K including wages). Deprivation of interest must be INTENTIONAL--not accident or neg.

Answer 59

Balancing test ct will weigh the following factors to determine the amount of process due: 1) indv interest at stake; 2) value of the procedure that is protecting that interest--i.e. would a hearing have revealed new and relevant info; and 3) gov's interest in efficiency--i.e. saving $ P whose interest is being deprived is entitled to 1) notice and 2) opp to be heard--timing of hearing varies b/t post-deprivation hearing and pre-deprivation hearing depending on right at issue. When fund right at issue (i.e. life / liberty / prop)--state has the burden to demonstrate a compelling interest justifying its actions. *e.g. Pre-deprivation hearings req before firing public employees w/ "for cause" Ks and taking away welfare payments--these are fund rights and st does not have compelling interest justifying post-deprivation hearing. e.g. Pre-deprivation hearing NOT req for suspension of driver's license--this is not a fund right so st does not need to show compelling interest to justify post-deprivation hearing.

Answer 60

Applies when a right is being infringed upon as to ALL persons. Substantive DP Violation Test: 1) Gov depriving of fund liberty? Yes=SS (fundamental right); No=RB (ordinary right) 2) Compelling purpose--i.e. is there a real problem? 3) Means--narrowly tailored? Two categories of substantive rights under DP: 1) those guaranteed by BOR; and 2) those select list of fund rights not mentioned in Const--i.e. "deeply rooted in our history and tradition" and essential to nation's "scheme of ordered liberty"--e.g. marriage/procreation; parental rights; privacy/contraception; family living arrangements.

Answer 61

EPC is a constitutional safeguard that individuals or groups can use to challenge laws that treat similarly situated people differently--i.e. applies when a right is denied only to a particular class. EP Violation Test for Gov Action drawing line on suspect class--i.e. ethnicity/citizenship/race/nationality--SS 1) Gov action draws a line based on suspect class on face or purpose (proof)--SS 2) Compelling purpose/real diff relates to the purpose? 3) Means--narrowly tailored to serve compelling purpose? Over/under inclusive? 3) Alternate non-discrim means? EP Violation Test for Gov drawing a line based on Quasi-suspect class--i.e. sex/gender or legitimacy (i.e. non-marital child)--IS 1) Gov action draws a line based on gender on face or purpose (proof)--IS 2) Important purpose/real diff relates to the purpose? 3) Means--sub related to serve important purpose? Over/under inclusive? 3) Alternate non-discrim means? If suspect / quasi-suspect classification or fund right involved--burden is on the gov to prove action meets SS/IS. If the law does NOT discriminate on its face--To trigger strict or intermediate scrutiny under the Equal Protection Clause of the Fourteenth Amendment, there must be discriminatory INTENT on the part of the government. The fact that legislation has a disparate effect on people of different races, genders, etc., without intent, is not sufficient to trigger strict or intermediate scrutiny.

Answer 62

2 Qs: 1) Has the basis for exercising PJ over out-of-st D been auth by st's long-arm statute?; 2) Is process for exercising PJ permitted by DPC? Unlike SMJ--PJ can be waived; vol litigating on the merits waives objection to PJ, so lack of PJ must be raised at first opp.

Answer 63

P can assert ANY claim whatsoever even if unrelated to D's contacts w/ forum st. Basis for gen in personam JX: 1) physical presence in st--vol and knowingly--when served (NOT met if D just passing through st to attend other hearing); 2) domicile--for corps where it is incorp and PPOB; or 3) consent--impliedly or expressly; D can impliedly consent through its conduct such as filing counterclaim.

Answer 64

Long-arm statutes: Every st has a long-arm statute which allows specific in personam JX over out-of-st Ds for particular transactions involving that st. In many sts, the long-arm statute authorizes JX to the extent permissible under DPC---DPC reqs satisfied if non-resident D has certain min contacts w/ forum state such that maintenance of the action does not offend trad notions of fair play and sub justice. P's claims against D MUST arise out of or be directly related to D's contacts w/ forum: --D must have suff min contacts w/ forum such that exercise of JX does not offend trad notions of fair play and sub justice--fewer contacts needed when lawsuit about those contacts. Reqs: 1) Min contacts asks if--there is purposeful availment, foreseeability, and relatedness (i.e. D more likely to be subj to the laws of forum st if the conduct that gave rise to the cause of action occurred in forum st); 2) Ct must also determine if maintenance of the action would "offend trad notions of fair play and sub justice--factors to consider include: --(i) the interest of the forum state in adjudicating the matter; --(ii) the burden on the defendant of appearing in the case; --iii) the interest of the judicial system in the efficient resolution of controversies; and --(iv) the shared interests of the states in promoting common social policies.

Answer 65

Concerns which district ct should hear the case--V proper in district: 1) where any D resides at time of filing--as long as all Ds reside in same st; or 2) where "sub part of the events or omissions" on which the claim is based occurred; or 3) if neither then any district where any D is subj to to personal JX--i.e. lives in forum st at time of filing (gen in personam) or suff min contacts (specific in personam) *In a state that contains multiple judicial districts and in which a D CORP is subject to personal jurisdiction at the time the action is commenced--the corporation “shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State.” If removed V proper in fed dist where st ct sits--even if that dist not proper originally (assuming SMJ and PJ met). D's claim of improper V must be made at first opp or waived--e.g. pre-answer motion to dismiss or D's answer. *Non-US citizen can be sued in any V

Answer 66

Transfer from fed ct to another for convenience and admin of justice--ONLY to a dist ct w/ proper V (i.e. where it might have been brought) unless all Ps agree to transfer w/o proper V. *Look for fact pattern b/t indv P and a corp D--i.e. if change of V would not be convenient for P and corp D could easily rep itself in the original proper V, then ct should deny D's motion for change of V b/c not convenient or in interests of justice. Conflict of Law: --if suit initially brought in dist w/ proper V and transferred--then law of transferor (first) forum controls (unless facts show forum selection clause). --If suit brought in dist w/o proper V the law of transferee (second) ct controls--don't get to take your bad law w/ you.

Answer 67

CA's long-arm statute is non-specific and allows personal JX to the full extent permitted by U.S. Const, which means that a CA st ct must meet the DP reqs: 1) Min contacts--reqs showing of purposeful availment and foreseeability; D must have purposefully availed himself of the privilege of conducting activities in the forum st, thus invoking the benefits and protections of its laws. 2) Relatedness of the claim to the contact--if P's injury arose directly from D's contacts w/ CA then this is met, even if this incident may have been D's only contact w/ CA. 3) Fair Play and Sub Justice--i.e. must determine if maintenance of action would "offend trad notions of fair play and sub justice, considering: 1) interest of forum st in adjudicating matter--will be easily met 2) burden on D of appearing in case--may be high burden for D if foreign corp but not controlling especially if the corp has plenty of resources. 3) interest of the judicial system in the efficient resolution of controversies--i.e. if same injury happening in other sts then high interest; and 4) shared interests of the sts in promoting common social policies--same as above.

Answer 68

Choice of Law--fed ct sitting in diversity JX will apply st sub law (i.e. apply precedent from highest st ct; give attention to lower cts but NOT binding). But for purposes of procedure--fed law applied if covered by FRCP. But if unclear if issue substantive vs. procedural (e.g. deadline to commence action under SoL; res judicata/collateral estoppel), under Erie Doctrine state law applies if: (1) fed law does not directly address issue (e.g. FRCP do NOT address deadline to commence action under SoL but DOES address res judicata/collateral estoppel); (2) st law is outcome determinative—i.e., forum-shopping in fed ct or inequitable administration of the laws would result if it is not applied; and (2) there is no countervailing federal policy interest. In extremely RARE circumstances--fed common law will govern sub issues if uniquely fed interest conflicts w/ st law; e.g. protecting military-style equip manufs from liability.

Answer 69

Prohibits lawsuits involving: 1) the same parties 2) original and subsequent claims are identical; and 3) if the court has already entered a final judgment on the merits—i.e. judgement made based on facts and relevant substantive law (e.g MSJ, JMOL, default judgement) rather than procedural/technical grounds (lack of SMJ/PJ/V). Claims are identical if they: (1) arise from the same transaction, occurrence, or series thereof--i.e. whether the facts are related in time/space/origin/motivation; the facts form a convenient trial unit; and treating the facts as a unit conforms to Ps' expectations; and (2) could have been raised in the first action.

Answer 70

Prohibits the same issue of fact or law to be litigated again. While res judicata precludes the relitigation of claims involving the same parties--collateral estoppel applies to an issue that has been litigated even if the parties in the subsequent suit are completely unrelated to those of the first—i.e. collateral estoppel does not require the same parties from the prior case to be in the subsequent case, thus broader application; ONLY reqs that P against whom issue is to be precluded was a P to the original action. Five-prong test for applying collateral estoppel: 1) Issue must be identical--i.e. whether the facts are related in time/space/origin/motivation; the facts form a convenient trial unit; and treating the facts as a unit conforms to Ps' expectations 2) Issue must have been actually litigated; 3) Must be a valid judgement on the merits; 4) Determination of the issue must have been essential to the judgement; and 5) P against whom collateral estoppel being sought must have had a fair and equitable opp to litigate the issue during prior suit. Offensive use of collateral estoppel by P (cts more hesitant here if it would be unfair to D) permitted unless: 1) plaintiff could have easily joined first action; 2) defendant had little incentive to vigorously defend in first action; 3) second action affords procedural opportunities unavailable in first action; or 4) inconsistent findings on issue exist

Answer 71

CA--refers to the county in which an action may be tried. V proper in any county in CA where any D: 1) resides at time the action commences; or 2) in personal injury actions where the injury occurred. In an action against a corp, V proper in the county where: 1) the obligation or liability arose; or 2) where the corp has its PPOB.

Answer 72

CCP allows for service of process by personal delivery by nonparties who are at least 18 years of age. i.e. if the P personally serves the summons then service of process improper--P instead needs to seek out nonparty to effect service. If personal service cannot be made--substituted service allowed in CA but must be mailed by first-class mail, postage prepaid and req a return receipt; if service on P outside of U.S. then service can be made using any method the forum ct prescribes or by any method allowed under the law of the place where the P is served that would give the P actual notice.

Answer 73

Wills formalities require a writing that the testator signed with present testamentary intent in the joint presence of two witnesses, and that both witnesses signed the will and understood the significance of the testator’s act.

Answer 74

Under California's "substantial compliance" approach--a will that falls short of the required formalities will be treated as compliant if the proponent of the will establishes by clear and convincing evidence that, at the time the testator signed the will, the testator intended that the will constitute the testator's will. If there is nothing other than the will itself that could provide C&C evidence regarding T's intent--then likely NOT sub compliance.

Answer 75

A holographic will is one: (1) in which the material provisions are handwritten by the testator and (2) that is signed by the testator. A pre-printed will form can be used so long as the material provisions (including property to be distributed and intended beneficiaries) are handwritten. The document need NOT be dated or witnessed--but it must be clear that the document was intended to be a will.

Answer 76

To validly execute or revoke a will in CA, the testator must be: (1) at least 18 years old; (2) and possess a sound mind at the time of execution or revocation. A testator lacks the requisite mental capacity if she, at the time of execution, lacked sufficient mental capacity to: (1) understand the nature of the act; (2) understand and recollect the nature and character of her property, or (3) remember and understand her relationship to living descendants, spouse, parents, or those affected by her will. E.g. Mental disorders, insane delusions, deficit in alertness and attention, info processing, thought processes, or ability to modulate mood--if so then rebuttable presumption will executed during period of incapacity.

Answer 77

A codicil is a supplement to a will that alters, amends, or modifies the will as opposed to replacing it. A codicil must be executed with the same formalities as a will--i.e. requires a writing that is signed by the testator with present testamentary intent in the joint presence of two witnesses who understand the significance of the testator’s act; OR holographic codicil signed by T including material terms w/ clear intent it was a codicil.

Answer 78

A testator can revoke a will by executing a later will or codicil that partly or completely revokes the prior will. The revocation can be express or implied from inconsistent terms in the subsequent instrument. Revocation may also be a physical act--i.e. burning/tearing prior will.

Answer 79

Under CA's omitted child statute--if a decedent fails to provide for a child born or adopted AFTER the execution of the will, the omitted child receives a share equal to that which the child would have received if the decedent had died intestate--i.e. 1/2 SP if 1 S and only child; if 1 S and more than one child, S gets 1/3 SP and 2/3 SP divided equally b/t rest of children. This statute does not apply if: (1) it appears on the face of the will that the child was intentionally omitted; (2) the testator had other children at the time the will was executed and left substantially all of her estate to the other parent of the omitted child; or (3) the testator provided for the child outside of the will and intended this to be in lieu of a provision in the will.

Answer 80

The omitted spouse receives half of the community property and quasi-community property, and a share of the separate property that is equal in value to what they would have received if the deceased died without a will--i.e. 100% SP if no children/parents; 1/2 SP if 1 child/parents and 1/3 SP if more than 1 child. Exceptions: --The estate plan specifically disinherited the spouse; --The spouse received enough assets outside of the estate; or --The spouse signed a valid waiver

Answer 81

Under CA's anti-lapse statute--a gift does not lapse if it was made to kindred (blood relation) of the testator (or of his current or former spouse or domestic partner) who predeceased the testator but left issue who survived the testator. Instead, the issue takes the gift. Issue "stands in the shoes" of the predeceased and takes gift under anti-lapse statute.

Answer 82

The doctrine of independent legal significance, also known as the doctrine of facts of independent significance, is a principle in wills and estates law that allows a testator to designate beneficiaries or property in a will based on facts or events that have significance outside of the will. The key question is whether the act has legal significance independent of its impact on the will, and it must not have a testamentary function. e.g. "$2K of my SP to each employee at my company at the time of death."

Answer 83

3 Elements: 1) A P exerts abnormal influence over T--i.e. very fact driven; e.g just being nice to grandma ok but NOT telling her she must leave you more $ or you will hurt her; 2) Influence so strong it subverts and overpowers T's mind at time T executes will; and 3) Influence causes T to execute will that reflects wishes of influencer and not that of T. If no UDI b/c D did not exert abnormal influence over T directly, look for facts where D still has FD to T--if breached FD then ct may impose CT over unnatural gift to D.

Answer 84

If the will attempts to gift away CP / QCP owned by the surviving spouse--the surviving spouse can (at the cost of rejecting all gifts under the will), "take against the will" and claim all such CP / QCP (i.e., decedent testator spouse can only will away all of his SP and his 1/2 of CP / QCP without surviving spouse consent / acquiescence).

Answer 85

CA will probate a will that was validly made pursuant to the laws of another jurisdiction where decedent spouse testator was domiciled at the time (even if the will would not be valid under CA law).

Answer 86

The doctrine of ademption applies only to specific bequests in the event that the subject matter of the specific bequest is missing or destroyed. A specific bequest is a gift of property that can be distinguished with reasonable accuracy from the other property in the testator’s estate. If the subject matter of a specific bequest is missing or destroyed, then the beneficiary takes nothing—not even the sales proceeds received by the testator. In California, the testator’s intent at the time she disposes of the subject matter of the bequest is a consideration. Courts tend to avoid ademption by a variety of means—e.g., by classifying a specific bequest as general (i.e. gift of PP that testator intends to be satisfied by assets of estate) or demonstrative, by classifying an inter vivos distribution as a mere change in form, etc. If a gift is adeemed, then the beneficiary is entitled only to whatever is left of the specifically devised property or the balance of the purchase price owing from the purchaser of the property.

Answer 87

An express trust results from the expressed intention of a property owner to create a trust relationship with respect to the property. A private express trust clearly states the intention of the trust creator, called the settlor, to transfer property to a trustee for the benefit of one or more ascertainable beneficiaries. A private express trust is created only if a settlor with the capacity to create a trust clearly expresses a present intent to transfer ownership of property to a trustee who has duties to perform for the benefit of one or more definite or ascertainable beneficiaries for a valid purpose.

Answer 88

When Settlor puts money or other assets into trust and reserves the rights to revoke, creditors of the Settlor can generally reach these assets. However, a trust that that is revocable inter vivos becomes irrevocable upon death.

Answer 89

A spendthrift trust expressly restricts the beneficiary’s power to voluntarily or involuntarily transfer his equitable interest. Spendthrift provisions are often inserted into trusts to protect beneficiaries from their own imprudence. A beneficiary’s creditors usually cannot reach the beneficiary’s trust interest in satisfaction of their claims if the governing instrument contains a spendthrift clause prohibiting a beneficiary’s creditors from attaching the beneficiary’s interest. Exception - Necessaries --In many states, certain exceptions allow certain classes of creditors to reach a beneficiary’s assets even when the trust instrument contains a spendthrift clause. Some jurisdictions permit a creditor who provided the beneficiary with "necessaries," like healthcare, to reach the beneficiary's interest in satisfaction of any unpaid debt despite a spendthrift clause in the trust instrument. Exception--Child Support --Under one exception to spendthrift clauses, children and spouses entitled to support are permitted to reach a beneficiary's trust interest even when a valid spendthrift clause exists.

Answer 90

A trustee is charged with safeguarding trust property and following the settlor’s instructions. The trustee is a fiduciary who has all of the powers set forth in the trust instrument and all powers necessary to act as a reasonably prudent person in managing the trust. Under the trustee's duty of loyalty and good faith, the trustee must administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries. Even if the trustee is granted complete discretion in the trust instrument, the trustee's actions are not immune from review if the trustee failed to exercise good judgment. Any decision based exclusively on reasons personal to the trustee and unrelated to the settlor’s goals can be overturned.

Answer 91

A trustee also has a duty to be impartial. He must balance the interests of the present and future beneficiaries by investing the property so that it produces a reasonable income while preserving the principal for the remaindermen.

Answer 92

A noncharitable irrevocable trust can be terminated or modified by the consent of all beneficiaries without the consent of the trustee if the court concludes that continuance is not necessary to achieve any material purpose of the trust. Typically, a trust has a material purpose if it has a spendthrift provision, so term of the trust would violate that material purpose.

Answer 93

A court may modify or terminate a trust if, because of circumstances not anticipated by the settlor, termination will further the purposes of the trust. To the extent practicable, the modification or termination must be made in accordance with the settlor's probable intention.

Answer 94

A charitable trust is a trust for a public charitable purpose, such as health care, education, or religion. A charitable trust may be of perpetual duration and need not identify ascertainable beneficiaries. Also NOT subj to RAP. In addition, the doctrine of cy pres applies to charitable trusts if there is GENERAL CHARITABLE INTENT--i.e. When a charitable purpose becomes impossible or impracticable, under the doctrine of cy pres the court will determine whether there is an alternative charitable purpose that comes as near as possible to the settlor's charitable intent.

Answer 95

SP--all prop owned before M, acquired during M by gift/inheritance (lucrative title) and all prop gen by such SP (i.e. traceable to an SP source); and all prop acquired after sep. CP--all PP and RP acquired by married P during M while in CA; anything produced by time/effort/skill of married P is presumptively CP (even a gift made in recognition of your efforts/services).

Answer 96

Property that would have been CP if the couple had been domiciled in CA at the time of acquisition. QCP is treated like SP until the death (or dissolution) of the MEC, when it is subject to treatment like CP. But that does not mean S is entirely free to transfer QCP inter vivos...

Answer 97

In California, the surviving spouse can set aside inter vivos QCP transfers by the decedent if: (1) the decedent died domiciled in California; (2) the decedent transferred the property to a third party without the written consent of the surviving spouse and for less than valuable consideration; and (3) the transfer is the type whereby property is held at the time of the decedent’s death by the decedent and another with the right of survivorship.

Answer 98

1) Pre-86: enforceability determined by case law; 2) 86-02: applicability non-retroactive; 3) >02: retroactivity of amendments; spousal-support waivers cannot be unconscionable at time of enforcement (pre-86 unenforceable; 86-02 Pendleton dictum/public policy); SS waiver NOT enforceable if P not rep by indp counsel (not retroactive pre-02).

Answer 99

4 Factors--NOT vol PMA Unless: 1) P against whom enforcement sought rep by indp counsel (can be waived but NOT waived for SS); 2) 7 days b/t presentation of PMA and signed--regardless of whether P had counsel; 3) If no counsel--fully informed of terms and basic effect of PMA; 4) PMA not signed under duress, fraud or UD, nor lack capacity.

Answer 100

From CP to SP during M: Post-84 Reqs--Must be explicit/unambiguous language; trans of RP/PP not valid unless made in writing by express declaration that is made, joined in, consented to, or accepted by S whose interest in prop is adversely affected; extrinsic evidence NOT allowed; presumption of UDI--can be raised by disadvantaged S to disprove trans; trans irrevocable and statement in will NOT admissible. *Applies to BOTH interspousal prop transactions and prop acquisitions from 3P (e.g. life ins policy--presumed CP even if policy solely in one S name); a sig on grant deed b/t S (but NOT grant deed alone) or an interspousal transfer deed satisfies writing reqs. *Depositing CP earnings into checking account in 1 S's name alone does NOT qualify as transmutation--i.e. still need signed writing. Gift b/t S Exception--above reqs do NOT apply to gifts b/t S if: 1) clothing, jewelry or other tangible articles of personal nature used solely by S who received gift; AND 2) gift NOT substantial in value taking into account circumstances of M e.g. gift of porsche not "personal in nature" ; diamond ring has sub value so gift exception does not apply--i.e. character not trans from CP to SP

Answer 101

PMAs: --No confidential rel pre-M; just obs of mutual respect/fidelity; --Cannot promote dissolution of M; --Writing req--CL exceptions to SOF admissible; i.e. oral agreement and estoppel; --CL K defenses apply; i.e. fraud/duress/UD Transmutations: --Confidential rel--duty of highest good faith and fair dealing; --NO CL exceptions to SOF --CL K defenses apply

Answer 102

Post-75--during M titled prop acquired from a 3P in JT is presumptively CP unless valid trans (must satisfy writing 852 writing reqs post-84). DV--ROR for SP contributions Death--does NOT change form of title; JT w/ ROS.

Answer 103

Historically--at DV CP presumption applied to prop acquired during M that was untitled or titled in 1 S's name alone. *This can be rebutted by tracing funds used to purchase entirely to SP. *Vs at Death--presumption that form of ownership on title reps form of ownership so ct can consider an asset titled in 1 S's name alone to be SP if the source of funds used to purchase is traced to SP. After Brace--during M titled prop acquired from 3P in JT is presumptively CP (unless valid transmutation; tracing not enough)--thus CP presumption governs over gen title presumption at DV and 1 S cannot unilaterally sever JT w/o consent of other S. *But at death--form of title still controls; if JT then JT w/ ROS at death (i.e. so in effect CP w/ ROS); or if titled in 1 S's name then SP if funds adequately traced.

Answer 104

For purpose of DV--prop acquired in JT during M is presumed CP--presumption may be rebutted by either: 1) clear statement in deed; or 2) proof of written agreement that prop is SP--i.e. tracing to SP NOT enough; reqs writing signed by adversely affected S.

Answer 105

Applies to SP contributions used to improve CP. To be reimbursed--SP proponent must trace contributions to SP source; *Reimbursement is w/o interest and cannot exceed net value of prop at time of DV--i.e. value of prop declines below SP contribution.

Answer 106

Applies to: 1) sep titled prop acquired pre-M when CP has been used to pay debt; 2) also prop acquired during M if CP presumption rebutted by SP tracing (e.g. gift/inheritance). Vieu Formula--apply if purchase $ debt fully paid: SP/CP contribution to purchase / Purchase price X FMV=SP/CP interest Moore--apply if unpaid balance: --Any loan balance included in numerator of fraction applying intent-of-lender test; --ONLY payments of principal on loan included in calc of CP interest. E.g. CP--$6K principal payments / $57K purchase price X $160K FMV at DV=$16.8K CP interest SP--$17K SP down + $34K ($40K loan -- $6K CP payments) / $57K purchase price X $160K FMV = $143.2K SP *SP Estate pays $34K loan balance, net amt=$109.2K

Answer 107

If during M SP prop exerts more than min effort in managing SP business--increase in value is in part CP/SP. Two Formulas: Van Camp--if mkt forces responsible for growth: --comp for labor -- family expenses = amt for CP --value of investment at DV -- amt for CE = SP amt Pereira--personal effort more responsible for increase in value: --original value of investment + aggregate rate of return (interest) = SP amt --value of investment at DV -- SP amt = CP amt Formulas do NOT apply to CP business, BUT if court finds that the MEC ended before a sub increase in CP business value, then it will need to apply the formulas in reverse to allocate the increased value for the time period in between separation and divorce to the SP and CP.

Answer 108

Both S must join in executing any instrument by which comm RP is sold, encumbered, or leased >1 yr (even if MEC has ended--i.e. sep but pre-DV) --Non-consenting S has 1 yr to void conveyance; if so then: --Grantor still alive--grantee returns prop but gets $ back; -- Grantor dead--TIC However if buyer is innocent purchaser--i.e. RP was sold in 1 S's name alone thus buyer did not know it was CP--then ct may not opt to void the sale and instead req seller S to disgorge profits from the sale and reimburse the comm.

Answer 109

Either S has absolute power of disposition of comm PP. Exceptions: 1) Business--prior written notice if selling all PP used in business; but failure will not invalidate; 2) Personal belongings--cannot sell PP used as family dwelling (e.g. mobile home) or furniture of family w/o written consent--non-consenting S can void; and 3) Gift of CP--cannot dispose of PP for less than fair/reasonable value w/o written consent; non-consenting S can either ratify or revoke and sue for return of prop; S that disposes of PP for less than fair value may also be in breach of FD; if grantor dead then set aside 50%.

Answer 110

Post-02: Imposing duties gen owed a non-marital business partner, including: 1) Duty to disclose w/o demand info reasonably req: 2) Duty to account and to obtain consent; 2) DOC; and 3) DOL Finding a breach of FD reqs--proof of deliberate misapprop or grossly neg or reckless conduct. Remedies for breach include (action must be brought w/in 3 yrs of knowledge of breach): 1) right to accounting; 2) adding a name onto title; 3) a greater share of CP at dissolution; and 4) atty's fees and costs

Answer 111

SP of non-debtor S liable for (according to ability to pay): --Debts incurred by other S while living together (or after sep and before DV) for necessaries--i.e. food, clothing, shelter, medical --If CP funds or debtor SP funds available--then non-debtor S has ROR. --Otherwise SP of non-debtor SP not liable for debts of other S before or during M if no community benefit--e.g. gambling.

Answer 112

If act/omission while benefitting comm--liability first satisfied from CP funds and then from SP of tortfeasor S BUT if not benefiting comm--then SP of tortfeasor S first then CP.

Answer 113

SP owned at division by non-debtor S NOT liable for debt incurred by debtor S before (debt before M confirmed w/o offset to debtor S) or during M--UNLESS debt assigned to non-debtor S. The comm estate is liable for debts incurred by either S before or during M if for the benefit of the comm--including (1) K debts for benefit of comm (i.e. loan to comm); (2) Tort liability when act done for benefit of comm--e.g. driving kids to school

Answer 114

DV--comm ends at date of sep Date of Sep--means complete and final break in marital rel, evidenced by: --S communicated to other S intend to end M; and --Conducts of S is consistent w/ intent (can still occupy same house as other S and still be

Answer 115

ROR For (unless written agreement to contrary): 1) Direct expenses--i.e. books/tuition; 2) Payments on loan--that sub enhance educated S's earning capacity Reimbursement Reduced If: 1) Rebuttable presumption of sub benefit for comm--i.e. if made more than 10 years before DV (no sub benefit < 10); 2) Both S receive training; 3) Education reduces need for SS

Answer 116

Defined Benefit Plans: 1) If employee S is retired at DV--pension benefits divided using time rule--i.e. period employment during M / total period employment 2) If employee NOT retired at DV--two options: 1) Cash-out--determine % owned by comm using time rule (above) X present value 2) Wait-and-See--determine % interest owned by comm X later payments (presumably larger).