Rules

Question 1

When can a party intervene as a matter of right

Answer 1

Under the federal rules a party has the right to intervene when upon a timely motion they 1) have an interest in the subject matter of the action; 2) the disposition of the action could impair the non-party’s interest and 3) the current parties do not adequately represent the non-party’s interest.

Question 2

When is a party entitled to a temporary restraining order

Answer 2

A TRO preserves the status quo until there is a full hearing on whether to issue a preliminary injunction and can last for 14 days unless good cause exists for it to last longer.

TRO can be issued without notice to the adverse party if the moving party can show (1) that immediate and irreparable injury will result prior to hearing the adverse party’s arguments and (2) the efforts made at giving notice and the reason why notice should not be required. Additionally, the party seeking a TRO usually must give security (typically by posting a bond) to cover the costs and damages sustained by a party that is ultimately found to have been wrongfully restrained.

Question 3

When is a party entitled to a preliminary injunction?

Answer 3

The court can issue a preliminary injunction when the opponent is given notice and the court holds a hearing.

A party seeking a preliminary injunction must establish that: (1) the party is likely to succeed on the merits; (2) the party is likely to suffer irreparable harm in the absence of relief; (3) the balance of equities is in the party’s favor; and (4) the injunction is in the public’s best interest. Additionally, the party seeking the preliminary injunction usually must provide security like it would for a TRO.

Question 4

Apparent authority of an agent

Apparent of authority of a partner

Answer 4

Apparent authority derives from the reasonable belief of a third party on the agent’s authority based on the principal’s manifestation of that authority.

A partner has apparent authority if they are conducting apparent business of the partnership or the type of business the partnership normally conducts.

Question 5

Express actual authority of an agent

and Implied

Answer 5

Express actual authority can be created by oral or written words, clear and direct definite language, or specific detailed terms or instructions.

Express actual authority exists when the agent reasonably believes they are doing what the principal wants based on the principals manifestations to the agent.

Implied actually authority exist based on the agent’s reasonable belief and understanding that he could complete actions necessary to achieve the principal’s objectives.

Question 6

Is an agent liable in contract when they don’t act with any authority

Answer 6

When an agent contracts with a third party they give an implied warranty of authority that is breached if they don’t have actual authority. If the agent lacks the power to bind the principal, then a breach of the implied warranty has occurred, and the agent is liable to the third party.

HOWEVER, if the agent has express or apparent authority then they will not be bound to the third party even if they exceed their authority as long as the principal is fully disclosed.

Question 7

How/when is a principal liable for tort’s of their agents

Answer 7

A principal is vicariously liable through respondent superior when their agent’s tort occurs during the scope of employment. A principal can also be liable for an independent contractor’s tort if that independent contractor’s tort is caused by their apparent authority.

To hold a principal vicariously liable for an agent’s torts, there must be an employer-employee relationship. Therefore, a principal is generally not vicariously liable for the torts of independent contractors. Exceptions to this general rule include:

i) A principal who retains control over the item or task that is the source of the tortious conduct (e.g., a franchisor who controls the franchisee);

ii) A principal who hires an independent contractor to perform non-delegable duties (e.g., inherently dangerous activities);

iii) When the independent contractor has apparent authority; and

iv) When the principal is negligent in selecting, training, or supervising an independent contractor.

Direct liability:

A principal is directly liable to a third person harmed by an agent’s conduct if:

i) The principal authorizes or ratifies the agent’s conduct;

ii) The principal is negligent in selecting, training, supervising, or otherwise controlling the agent; or

iii) The principal delegates to an agent performance of a non-delegable duty to use care to protect other persons or their property, and the agent breaches the duty. (some jx’s treat this as vicarious liability).

Question 8

When does a principal ratify an agent’s actions’s

Answer 8

A principal who ratifies an agent’s actions is bound by them.

A principal ratifies an agent’s actions if he 1) ratifies the entire contract, 2) has the legal capacity to ratify it, 3) ratifies in a timely manner, and 4) has knowledge of all the material facts surrounding the original act.

Question 9

Will courts grant a spousal support award while couple’s are married?

Answer 9

Spouses have a duty to support each other and a support award may be granted in divorce when one spouses can’t support themselves.

Most jurisdictions follow a non-intervention doctrine which disallows intervention while the family is still intact. Court’s sue this doctrine to deny support petitions while spouses still live together.

Question 10

What is parent by estoppel

Answer 10

Legal parents are presumptively entitled to custody of their children in cases against third parties, including grandparents or stepparents, unless it can be established that the legal parent is unfit or that awarding custody to the legal parent would be detrimental to the child.

If a natural parent has had little or no contact with a child, or if the child has lived with the third party for an extended period of time, then courts have employed the terms “parent by estoppel” and “de facto parent” to get around the presumption.

A minority of the jurisdictions apply the best-interests-of-the-child standard in all custody custody cases.

Question 11

What is home state jurisdiction

Answer 11

A court’s subject matter JX in child custody cases is determined by the child’s home state.

The home state is the one in which the child has lived with a parent or guardian for at least six consecutive months immediately prior to the custody proceeding, or since birth, if the child is less than six months old or was the child’s home state in the past six months, and the child is absent from the state, but one of the parents (or guardians) continues to live in the state.

Question 12

Are vaccine mandates constitutional?

Answer 12

A parent has a right to raise his child as he sees fit. A fit parent has a fundamental right to the care, custody, and control of his children. However, a parent’s authority over his child is not absolute. Laws are in place to protect children from harm, whether or not that harm is intentional. If a parent’s decisions will jeopardize the health or safety of the child or have the potential for significant social burdens then a parent’s power is limited. States are permitted, under their police powers, to require vaccinations and to refuse admission to public school for students who fail to receive required vaccinations. Such statutes are not subject to constitutional challenge based on a violation of parental rights.

Question 13

What is one exception to Miranda related to an officer asking D about weapons.

Answer 13

Public Safety Exception

One exception to the Miranda requirement permits the police to question a suspect without Miranda warnings when the public’s safety is at risk.

Though the officer performed a custodial interrogation without first giving the woman Miranda warnings, the officer questioned her about additional weapons in order to secure his safety and the safety of others gathered nearby. And because the public’s safety was at risk, the court should find that the failure to give Miranda warnings would not bar the woman’s statement from being admitted.

Question 14

When can an trust be revoked

Answer 14

If it is revokable the settlor can unilaterally revoke it but if irrevocable he must have consent from all beneficiaries.

If the settlor is dead:
The trust, even if irrevocable, can be modified if all beneficiaries consent or a frustration of purpose is shown. But the trustee can attempt to block the modification if it does not align with a material purpose of the trust.

Question 15

Can the remainder of trust, who are a class of children, agree to terminate the trust if the income beneficiary agrees?

Answer 15

Unless the governing instrument provides otherwise, the common law general rule is that the gift is expressly limited to the transferor’s surviving children, so that the surviving issue of a deceased child does not take. Here, if the common law applies, Trustee is incorrect because Husband and Settlor’s children are the sole beneficiaries of the trust and, absent a violation of material purpose, can consent to termination.

However, under the UPC, if a class gift is limited in favor of a class of children, only those children alive at the time of distribution are entitled to possession of the property. If a child who survives the settlor but then predeceases the time of distribution has surviving issue, that issue would have a right to the parent’s share of the gift. Thus, if the UPC applies, Trustee is correct in that termination would require the consent of all potential beneficiaries, including the future grandchildren with potential rights.`

Question 16

If a trust remainder is left to the settlor’s children does it include a child born after the creation of the trust?

Answer 16

A class remains open and may admit new members until (i) at least one class member is entitled to obtain possession of the gift, or (ii) the preceding interest terminates (such as when the holder of the present life interest dies).

Here, the class of “Settlor’s children” remained open to new members until Settlor died. Because the fourth child was born years before Settlor died, the class was still open and the fourth child was validly admitted to the class.

Question 17

Can a trustee breach his duty to the trust, if he gives a beneficiary more than their share when distributing the trust after termination, if he does so at the direction of all the beneficiaries

Answer 17

A trust is a fiduciary relationship wherein the trustee is called upon to manage, protect, and invest certain property and any income generated therefrom for the benefit of one or more named beneficiaries. The trustee holds the legal interest or title to the trust property. Should the trust be terminated, title would merge and would vest in the beneficiaries. Thus, if the trust here was terminable and the trustee distributed the trust principal pursuant to the beneficiaries’ directions, the trustee would not be violating any fiduciary duty.

The beneficiaries would be entitled to distribute trust proceeds as they saw fit. Even if such a distribution could be deemed breach of a fiduciary duty, because the beneficiaries directed it (i.e., joined the breach), equity will prevent them from pursuing an action against the trustee. Accordingly, Trustee is not correct that the distribution would be a breach of trust.

Question 18

A settlor creates a trust that says to give the principal to one or more of her children as settlor will appoint according to the terms of her will and in the absence of such provision give to charity. Settlor’s will gives 1/2 principal to daughter, directs trustee to leave 1/2 in the trust and give the income to son and remainder to grandchild. What is the outcome?

Answer 18

This is a special power of appointment because it gives the holder the ability to direct the trustee to distribute property to certain people. The settlor’s power of appointment was valid under the term’s of the trust as was directing property to her daughter and son. The charity does not have an interest in the remaining trust income but does have an interest in 1/2 of the property.

When one with a power of appointment makes an appointment that exceeds the grant given to him, other valid appointments are not invalidated, but the property or interest that was invalidly appointed passes to the “taker in default of appointment”—that party who would have received the interest in the absence of any appointment. Here, the Settlor’s grandchildren are not a permissible object of the power of appointment because the granting provision in the trust included only “Settlor’s children.” Thus, the Settlor’s attempt to distribute the trust principal to her grandchildren was ineffective. The trust provides that in the absence of a valid appointment, the assets will pass to Charity. Consequently, Charity has an interest in the principal of one-half the trust assets.

Question 19

If there is an elective share statute can a spouse claim property from a decedent spouses trust or from their probate state?

Answer 19

An elective share gives the surviving spouse a fraction of the decedent’s estate if the surviving spouse decides to elect that share, rather than a gift in the will. In this jurisdiction, the elective share is one-third of the decedent’s probate estate, without any mention of the decedent’s non-probate assets. Thus, the husband’s election will depend on which assets are included in Settlor’s probate estate.

The probate estate includes all assets that pass by will or intestacy upon a decedent’s death. A trust is generally considered a will substitute because the distribution upon death of property placed in a trust by an individual during her lifetime is determined by the terms of the trust, not the terms of the individual’s will or the intestate rules.

In this case, the $500,000 in assets in Settlor’s trust will not be included in the probate estate. Settlor’s probate estate is worth only $100,000, with $50,000 bequeathed to Settlor’s other descendants. Under the will, the husband is entitled to $50,000, and he would receive closer to $30,000 if he took the election. So, the husband should not take the elective share out of Settlor’s probate estate.

In some jurisdictions, the surviving spouse can set aside inter vivos transfers made by the decedent during marriage, without spousal consent, if the decedent initiated the transfer within one year of her death, retained an interest in the property, or received less than adequate consideration. Here, the husband may be able to argue that Settlor retained an interest in the trust property because she could have terminated the trust at any time prior to her death. If this jurisdiction recognizes that claim, husband should make the election against Settlor’s total $600,000 estate.

Question 20

Can a spouse set aside an inter-vivos transfer of a decedent spouse?

Answer 20

In many states, the surviving spouse can set aside inter vivos transfers by the decedent made during the marriage, without spousal consent, if the decedent initiated the transfer within one year of his death, retained an interest in the property transferred, or received less than adequate consideration.

If the decedent spouse puts assets in a trust but can revoke it the surviving spouse could argue they retained an interest and attempt to set aside the trust.

Question 21

Describe a trust that isn’t charitable but doesn’t have any ascertainable beneficiaries.

Answer 21

Alternatively, an honorary trust is a legally enforceable trust that is not created for charitable purposes but has no definite human beneficiaries. Two types of honorary trusts are recognized by the Uniform Trust Code: animal trusts and noncharitable purpose trusts. Almost all jurisdictions permit the creation of a trust for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee. Generally, a noncharitable purpose trust is limited to being enforced for 21 years or subject to the rule against perpetuities.

honorary trust time limits are directed by statute with 21 years being the most common other could use normal RAP and take a life into being into account, and others may have no time limit*

Question 22

How is intestacy determined if Decedent has no children and no surviving spouse

Uncle vs Niece

Answer 22

If the state uses a parentelic system collateral lines are followed until a live taker is found. This would follow up to parents and then their issue, or up to grand parents if no heirs through the parents line. In this system a niece would take all over an uncle

The degree of relationship is calculated by counting the number of relatives between the living taker and the decedent using the closest common ancestor. Some places uses a parentelic tie-breaker if the degeres are the same. Uncle and Niece are both 3 degrees (go up to parents then down for niece; and up to grand-parents and down for uncle). In this system Uncle and Niece would each take half and Niece would take all if the state uses the parentelic tie-breaker approach.

Question 23

Can a non-marital child inherit through intestacy

Answer 23

The common-law rule was that if a child was born out of wedlock, he could not inherit from his natural father. Most jurisdictions provide that an out-of-wedlock child can inherit from his natural father if (i) the father subsequently married the natural mother, (ii) the father held the child out as his own and either received the child into his home or provided support, (iii) paternity was proven by clear and convincing evidence after the father’s death, or (iv) paternity was adjudicated during the lifetime of the father by a preponderance of the evidence. It has been held unconstitutional to deny inheritance rights to a nonmaterial child when paternity has been established during the father’s lifetime.

So if a state law says a non-marital child can not inherit but paternity was ajudicated during the father’s lifetime then the law is unconstitutional and the child will inherit.

Question 24

What are the effects of a pre-marital agreement that says on a subsequent will:
Twenty years ago, John and Mary were married. One month before their wedding, John and Mary signed a valid prenuptial agreement in which each of them waived “any property rights in the estate or property of the other to which he or she might otherwise be legally entitled upon the termination of their marriage by death or divorce.”

Answer 24

This pre-marital agreement would effect intestacy or division of property at divorce. A spouse may effectively waive rights to testamentary gifts that would pass to them before the waiver was formed.

However, if a subsequent will is made then it will control over the pre-marital agreement because the waiver does not apply to subsequent gifts.

Question 25

If a will leaves the estate to decedent's children does this include adoptive children?

Answer 25

Adoption cuts off the intestacy share of children and biological parents. For a will to devise to an adoptive child the child would have to show that the gifts were aligned with testamentary intent.

Question 26

Who will the court assign as the personal representative of the estate.

Answer 26

The court will first look to see if the will assigns anyone as the PR and assign that person if they are capable (anyone who can contract can be a PR; must be an adult) If not, the spouse who is a devisee has priority, followed by any other devisees, followed by spouse who isn't a devisees, other heirs, and after 45 days any creditor.

Question 27

What is the Dormant Commerce Clause

Answer 27

The DCC is a doctrine that limits states power to legislate in ways that effect interstate commerce. If congress has not regulated a certain area of interstate commerce then states may regulate as long as the action does not discriminate against out of state commerce, unduly burden interstate commerce, or purposefully regulate wholly out of state activity. A state discriminates against out of state commerce when it protects in state economic interests at the expense of out of state competitors. However, the mere fact that the entire burden of a state's regulation falls on an out-of-state business is not sufficient to constitute discrimination against interstate commerce. The Dormant Commerce Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations. A state regulation that is not discriminatory may still be struck down as unconstitutional if it imposes an undue burden on interstate commerce. The courts will balance, case by case, the objective and purpose of the state law against the burden on interstate commerce and evaluate whether there are less restrictive alternatives.

Question 28

DCC: Local laws that discriminate against out of state commerce

Answer 28

If a state or local regulation, on its face or in practice, is discriminatory, then the regulation may be upheld if the state or local government can establish that: (i) an important local interest is being served and (ii) no other nondiscriminatory means are available to achieve that purpose. The law is discriminatory if it favors in state business vs out of state business.

Question 29

What is an exception to the DCC.

Answer 29

A state may behave in a discriminatory fashion and burden commerce if it is acting as a market participant (buyer or seller), as opposed to a market regulator. If the state is a market participant, it may favor local commerce or discriminate against nonresident commerce as could any private business.

Question 30

What is it called when an offeror takes inconsistent action with the offer and the offeree finds out through reliable sources.

Answer 30

Constructive Revocation. This acts as an automatic revocation.

Question 31

Can an operating agreement alter an LLC's fiduciary duty

Answer 31

yes, it can alter the duty of loyalty as long is it is not manifestly unreasonable. An alteration that allows members to be involved with other businesses is not likely to be unreasonable even if it competes with the LLC.

Question 32

Under what theory can the members of an LLC be personally liable

Answer 32

Piercing the corporate veil Courts rely on various theories to pierce the corporate veil, including the “mere instrumentality” test, wherein a member would have to show that (i) the members dominated the entity in such a way that the LLC had no will of its own, (ii) the members used that domination to commit a fraud or wrong, and (iii) the control and wrongful action proximately caused the injury. Under the “unity of interest and ownership” test, a petitioner must demonstrate that there was such a unity of interest and ownership between the entity and the members that, in fact, the LLC did not have an existence independent of the members and that failure to pierce the veil through to the members would be unjust or inequitable.

Question 33

Can an LLC member be personally liable to creditors after a dissolution.

Answer 33

Yes, if the dissolution was improper. This could occur if they did not notify the creditor of dissolution and/or distribute assets to a known creditor.

Question 34

What is the difference between common law involuntary manslaughter and MPC involuntary manslaughter?

Answer 34

Under the common law manslaughter is a negligent killing where there is a gross deviation from the standard duty of care. Looks at what defendant knew about risks OR what they SHOULD have known. The MPC just uses manslaughter (not involuntary or voluntary) and defines it as a reckless murder (but not extreme recklessness. In the MPC recklessness is disregarding a substantial and unjustifiable risk. In the MPC the defendant must be aware of the risk. MPC manslaughter also includes killing from the result of an extreme emotional disturbance.

Question 35

What mens rea is used for an accomplice when the mens rea of the principal crime is negligence or recklessness

Answer 35

However, when the crime committed by the principal only requires the principal to act recklessly or negligently (e.g., involuntary manslaughter), a person may be an accomplice to that crime under the majority rule if the person merely acts recklessly or negligently with regard the principal’s commission of the crime, rather than purposefully or intentionally. “Recklessly” requires the defendant to act with a conscious disregard of a substantial and unjustifiable risk that a material element of a crime exists or will result from his conduct.

Question 36

Compromise offer vs Offer to pay medical bills.

Answer 36

Evidence of compromise offers made by a party are not admissible to prove the validity of a disputed claim. Similarly, evidence of the payment, offer to pay, or promise to pay medical or similar expenses resulting from an injury is not admissible to prove liability for the injury. However, unlike a compromise offer, the validity or amount of a claim need not be in dispute for an offer to pay medical expenses to be inadmissible. ***Compare compromise: Unlike a compromise negotiation, any conduct or statement that accompanies the payment, offer to pay, or promise to pay medical expenses is admissible.***

Question 37

Rape Shield Law

Answer 37

Pursuant to the “rape shield” rule, evidence offered to prove the sexual behavior or predisposition of an alleged victim of sexual assault is generally inadmissible in both civil and criminal proceedings. However, in a civil case, evidence offered to prove an alleged victim’s sexual behavior or predisposition is admissible if its probative value substantially outweighs the danger of harm to any victim and of unfair prejudice to any party. Example: Here, the woman has alleged that her injuries were especially traumatic because of her belief in sexual abstinence before marriage and her lack of prior sexual experience. Consequently, the woman’s prior sexual conduct has great probative value in determining the extent of her injury. On the other hand, this evidence is not likely to harm the woman or unfairly prejudice her sexual assault claim. Therefore, the court would likely grant the man’s motion to admit the evidence. In criminal cases: (1) Criminal Cases. The court may admit the following evidence in a criminal case: (A) evidence of specific instances of a victim’s sexual behavior, if offered to prove that someone other than the defendant was the source of semen, injury, or other physical evidence; (B) evidence of specific instances of a victim’s sexual behavior with respect to the person accused of the sexual misconduct, if offered by the defendant to prove consent or if offered by the prosecutor; and (C) evidence whose exclusion would violate the defendant’s constitutional rights.

Question 38

What doctrine can be used by a spouse who is in a void marriage to obtain benefits or property.

Answer 38

Most states have adopted a version of the putative spouse doctrine. Under the doctrine, a party who participated in a ceremonial marriage and believes in good faith that the marriage is valid may use a state’s divorce provisions if the marriage is later found void due to an impediment. Although this claim does not result in a divorce, it does provide equitable relief through maintenance and property distribution.

Question 39

Under what doctrine can step-parents gain visitation rights.

Answer 39

As a "De-Facto" Parent A fit parent has a fundamental right to the care, custody, and control of her children. As such, state courts must give special weight to a fit parent’s decision to deny nonparent visitation, unless denying visitation would be detrimental to the child. In some situations, the courts will grant visitation to a third party, such as a stepparent. However, this is typically limited to those cases in which the third party lived with the child for an extended period of time and acted as a de facto parent prior to the divorce. In this case, Daniel has lived with Chloe for 9 of her 11 years, has played an active parental role, and formed a close and loving bond with her. Chloe has had little contact with her biological father, and regards Daniel as her father. In addition, Chloe became very upset at the thought of breaking off all contact with Daniel. Although Brenda’s decision must be given special weight, she cannot justify the detrimental impact of completely removing Chloe from contact with Daniel. Taken together, the court will likely grant Daniel some visitation with Chloe.

Question 40

Can a partner commit the partnership to obligations when acting individually.

Answer 40

A majority of the partners can make a decision as to a matter in the ordinary course of the partnership’s business, such as a distribution of partnership profits. Acting individually, a partner has the actual authority to commit the partnership to usual and customary matters, unless the partner has reason to know that: (i) other partners might disagree; or (ii) for some other reason consultation with fellow partners is appropriate.

Question 41

Can a partner leave the partnership at any time?

Answer 41

A partner’s notice to the partnership of the partner’s express will to withdraw can trigger a partner’s dissociation from the partnership. A partnership at will is dissolved when a partner chooses to dissociate from the partnership by giving notice of her withdrawal. A partner has the power to dissociate from the partnership at any time, even if the dissociation is wrongful. A partnership agreement cannot prevent a partner from withdrawing from the partnership, but it can require that the partner’s notice of withdrawal be in writing. For a partnership that is unlimited by time or undertaking, a partner’s dissociation is wrongful only when it is in breach of an express provision of the partnership agreement. Here, Jean’s oral statement to Carol that she was “out of here and never coming back” constituted a valid dissociation because she gave notice of her withdrawal to Carol and Pat. The dissociation was not wrongful because this is an at-will partnership and there is no indication that withdrawal breached any express provision in the partnership agreement.

Question 42

When a partner leaves do they have a right to be bought out

Answer 42

When a partner dissociates from the partnership but the partnership is not dissolved, the partnership must buy out the dissociated partner’s partnership interest. Once a partnership has been dissolved, but before the winding up of its business is complete, the partnership may resume carrying on its business as if dissolution had never occurred. To do so, all partners (including any properly dissociated partners) must agree to waive the right to terminate the partnership. When a partner dissociates from the partnership but the partnership is not dissolved, the partnership must buy out the dissociated partner’s partnership interest. A dissociated partner may maintain an action against the partnership to determine the buyout price and to compel the partnership to pay that amount to the partner. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if no payment or offer to pay is tendered. In this case, Carol and Pat agreed to continue their participation in Radiology Services without Jean, however it does not appear that Jean, the dissociated partner, agreed to waive the right to terminate the partnership with them. Therefore, the partnership remained dissolved, and Jean cannot receive a buyout payment

Question 43

How does a survivalship clause work with a life estate? For example: To A for life, then to my surviving children.

Answer 43

The majority view is that a survivorship contingency applies at the termination of the interests that precede distribution of the remainder. In this case, one of Daughter’s children predeceased Husband. Mary has no interest in Blackacre because Bill, having predeceased Husband, had no interest in Blackacre to devise to Mary. The minority view interprets a survivorship contingency to require surviving only the testator and not the life tenant. If this approach applies, then Bill’s interest passed to Mary.

Question 44

Attachment and BIOCOB

Answer 44

(i) value must be given by the secured party; (ii) the debtor had rights in the collateral; and (iii) the debtor authenticated a security agreement that describes the collateral (or the secured party has possession or control of the collateral pursuant to a security agreement). A buyer of collateral subject to a perfected security interest generally takes the collateral subject to that interest, unless the secured party has authorized its sale free of the security interest. However, a buyer in the ordinary course of business (BOCB) takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence. A BOCB is a person who (i) buys goods, (ii) in the ordinary course of business, (iii) from a merchant who is in the business of selling goods of that kind, (iv) in good faith, and (v) without knowledge that the sale violates the rights of another in the same goods.

Question 45

Where does property go if someone with a special power of appointment fails to exercise it or exceeds its scope?

Answer 45

When a donee of a special power of appointment fails to exercise the power, the property or interest passes to the takers in default of appointment as specified in the trust instrument. To the extent that the donor did not provide for takers in default or the instrument does not have an effective gift-in-default clause, the unappointed property passes to the permissible appointees living when the power lapses if: (1) the permissible appointees are a defined and limited class, and (2) the donor has not manifested an intent that the permissible appointees receive the appointive property only so far as the donee elects to appoint it to them. Here, the trust instrument does not provide for takers in default. So, if Daughter fails to exercise her power of appointment, the appointed property will pass to Daughter's heirs. Daughter's heirs will be a defined and limited class upon her death, and the instrument does not manifest an intention that the property pass to Daughter's heirs only if she elects for it to pass to them. Therefore, the property will likely pass to Daughter's heirs if she fails to exercise her special power of appointment.

Question 46

What is presumed if a child is not included in the will and that child is born after the will was formed?

Answer 46

If the testator then dies without revising the will, a presumption is created that the omission of the child was accidental. An omitted child statute does not apply if: (i) it appears that the omission of the child was intentional; (ii) the testator had other children at the time the will was executed and left substantially all of his estate to the other parent of the pretermitted child; or (iii) the testator provided for the child outside of the will and intended this to be in lieu of a provision in the will. Look at the language of the will to see if it excludes pretermitted children. Could say something like leave everything to my wife regardless of if we ever have children.

Question 47

What happens if a trust fails?

Answer 47

When a trust fails, a court may create a resulting trust requiring the holder of the property to return it to the settlor’s estate. Here, if the trust is deemed void, the assets returned to the settlor’s estate would be distributed to the wife under the terms of the will, assuming the will is deemed valid. If the will is found to be invalid and the trust is found to be void, the trust assets would pass under intestacy.

Question 48

Does a debtor have any claims against a SP who disposes of their collateral after they have defaulted?

Answer 48

Upon default, one of the alternatives generally available to a secured party once in possession of collateral is to dispose of the collateral at a sale, which may be public or private, in order to satisfy the obligor’s outstanding obligation. In addition to conducting the sale in a commercially reasonable manner, the secured party is generally required to send an authenticated notification of disposition to, among others, the debtor. This notice must be given sufficiently far enough in advance of the disposition (e.g., at least 10 days) to allow the notified party to act on the notification. A secured party is not required to send a notice of disposition when the collateral is perishable, threatens to decline speedily in value, or is of a type customarily sold on a recognized market. A person entitled to notification may waive the right to notification. If a secured party fails to comply with these requirements, then the debtor or other secured party may seek damages for any loss caused by the secured party’s failure to notify. There is also a rebuttable presumption that the secured party is not entitled to collect a deficiency. The secured party can rebut this presumption in whole or in part by showing that the deficiency would have existed even had the secured party complied with Article 9.

Question 49

Can a Defendant amend pleading after discovery to include an affirmative defense

Answer 49

Generally, the defendant’s answer must state any avoidance or affirmative defense that the defendant has, or that defense is deemed waived. However, the Rules also provide that pleadings can and should be amended by leave of the court when justice so requires. Courts will generally permit the amendment unless it would result in undue prejudice to the opposing party. Further, allowing the affirmative defense would cause no undue prejudice to Plaintiff, because she had reason to know better than anyone the facts that would support the viability of the affirmative defense. The facts do not provide any other reason that Plaintiff would be unduly prejudiced by the amendment.