February 2003- Vermont Bar Examination Essay Questions - Model Answers

[Model Answer - Question I]
[Model Answer - Question II]
[Model Answer - Question III]
[Model Answer - Question IV]
[Model Answer - Question V]
[Model Answer - Question VI]

Examination Essay Questions - Feburary 2003


PLEASE NOTE: QUESTION I was a "Multistate Performance Test" (MPT) and is not answered here.


1.    What factors should be considered in evaluating the request?   What position should you take?   Why?

Your assignment is to advise Tommy in the exercise of his fiduciary duty as trustee.

Because Tommy is currently serving, and the trust was established under Danny’s will, there can be no doubt about the validity of the trust:   it was “established” by the probate court as part of the process of settling Danny’s probate estate, and its administration is subject to the ongoing jurisdiction of the probate court for the district where Danny resided at the time of his death.   That may or may not have been in Addison County, the residence of Erin and Fred.

In analyzing the request of Erin and Fred, the current beneficiaries, the main issue is to determine the intent of Danny, the testator, as reflected in the terms of his will, and whether there remains to be accomplished a material purpose of the trust.   Under the statement of facts as presented, because the youngest child has graduated from college and entered the job market, and because under the terms of the will Tommy is granted the discretion to determine when that purpose has been accomplished, the education condition of the trust probably has been satisfied.   However, you might be concerned with possible ambiguities in the will, which might raise issues such as the possibility that Erin and Fred might have more children (natural or adopted), or that the current children may seek later to continue their education at the graduate level or as a part of a career change.

On behalf of Tommy, you should consider whether termination of the trust would be in accordance with Tommy’s fiduciary duty to all of the trust’s beneficiaries, present and future, and whether the distribution of the entire trust corpus at one time would be in furtherance of Tommy’s   intention.   It may be necessary to ascertain more facts to properly evaluate the request (e.g. , the size of the trust, the amount of income it generates, the costs of administration, other resources that may or may not be available to Erin and Fred, their current circumstances and financial situation.   What financial issues facing Erin and Fred led to the request?   Has their situation changed drastically since the time that the will was signed?   Did Danny intend that the trust be a spendthrift and/or support trust?)  

Equally as important is to determine whether the consents of Erin’s and Fred’s children were fully informed (do they need their own counsel?), and whether they are legally sufficient. Your legal analysis on behalf of Tommy should include consideration of whether the trust can be terminated even with the consent of all persons currently interested.   Have the rights of Erin and Fred’s children vested?   What of the possibility that they might have other or future children?   Does the trust as drafted violate the Rule Against Perpetuities and, if so, what are the implications?  

Although the English and minority rules might permit distribution with the informed consent of all persons currently interested in the trust, the best advice to Tommy probably is to deny the request, because one of Danny’s major goals – lifetime support of Erin and Fred – remains to be accomplished.   The issue of other or future-born issue also raises the possibility of liability of Tommy to those persons.

2.       What concerns arise if Tommy Trustee complies?   If he agrees with the request, how should he proceed?

If the decision is to grant the request, Tommy should be counseled to file a petition or motion to terminate the trust with the probate court that has jurisdiction over the trust.   The consents of all interested persons should be filed, and/or notice given to any who do not consent, in accordance with the Vermont Rule of Probate Procedure.   If the Court grants the petition, a final account would have to be filed and income tax clearances would have to be obtained from the Vermont Department of Taxes.   The Court then would issue an order of distribution.   The assets then could be distributed, receipts obtained, and a closing report filed.   As part of the process, and perhaps included with the consents to be filed, Tommy would be well advised to obtain releases from all of the interested persons.

3.        If he refuses to comply, what is Erin and Fred’s recourse?   What avenues are available to them?

If Tommy refuses the request, based on your advice or otherwise, the process to be followed by Erin and Fred in contesting that decision would be similar:   through their own counsel, they could file a motion to terminate the trust, with notice to be given to the Trustee and the other interested parties.   In the alternative, Fred and Erin could file a petition in Probate Court to remove Tommy as the trustee and to replace him with another trustee, who might be more willing to terminate the trust as they have requested.   In order to prevail on that claim, however, Erin and Fred would have to prove that Tommy had breached his fiduciary duties, which does not appear to have much likelihood of success given the facts of this case and the discretion vested in Tommy by the terms of the will.

Either party could appeal the ruling of the Probate Court to the Superior Court in the County in which it is located, and then to the Supreme Court.  


1.          Identify the court or courts in which you could file a suit against Durable Locomotives, and state the basis for subject-matter jurisdiction in each court.

Provided he could establish personal jurisdiction over Durable Locomotives, see question 3, below, Paul could file a suit in the Orleans Superior Court.  Vermont's court of general jurisdiction, the appropriate forum for civil claims such as this one, is the Superior Court.  4 V.S.A. § 113.   Venue lies in a county in which either party resides, in this case Orleans County.  12 V.S.A. § 402.

Alternatively, if Durable Locomotives is subject to personal jurisdiction in Vermont, Paul could file a suit in the United States District Court for the District of Vermont, or, if not, in the appropriate California district.  The federal court has jurisdiction over cases in which the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between citizens of different states.  28 U.S.C. § 1332(a).  In this case, the parties are citizens of different states, and the matter in controversy is arguably greater than $75,000, so the case is subject to federal jurisdiction. 

Venue within the federal court system lies in any district where the defendant resides (since Durable Locomotives is a corporation, it is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced), or in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.  28 U.S.C. § 1391.

Paul could also consider filing suit in California state court.

2.          What tort claim(s) could Paul make against Durable Locomotives, and what would you have to prove in order to prevail?

The two primary tort claims Paul could make against Durable Locomotives are claims for (A) ordinary negligence, and (B) strict products liability.

3.          What procedural and substantive affirmative defenses should you anticipate, and how would you respond to each?

Durable Locomotives' potential defenses include the following: (A) lack of personal jurisdiction, (B) statute of limitations, and (C) assumption of risk/comparative negligence.  In addition, if Paul files in state court, Durable Locomotives may seek to remove the case to federal court.

4.          Discuss the types of damages you would seek from Durable Locomotive as compensation for Paul, and the general requirements of each.

If Paul prevails on his negligence or products liability claim, he must prove, by a preponderance of the evidence, the nature and extent of his damages.  He must show that his damages are the direct, necessary and probable result of Durable Locomotives' actions.  Callan v. Hackett, 170 Vt. 609 (2000).

Those damages flowing from the complications arising from Paul's hand surgery would likely be included in the overall damages, whether or not they resulted from medical negligence.  (Whether or not the negligence of a third person amounts to a new and independent force or agency breaking the chain of causal connection between the original wrong and the ultimate result turns on whether such negligence was something the tortfeasor had a duty to anticipate.  Paton v. Sawyer, 134 Vt. 598, 601 (1977).  Ordinary medical negligence does not typically constitute such an intervening cause.)

Although Paul would be entitled to compensation for all direct and natural consequences of his injury, he would have an obligation to mitigate his damages.  Schnabel v. Nordic Toyota, Inc., 168 Vt. 354, 361 (1998).

Paul's damages should include:


1.      Who is entitled to receive notice and service of the foreclosure complaint and why?

The foreclosure complaint must name as defendants all parties in interest.  V.R.C.P. 80.1.  Parties in interest include mortgagors, other mortgagees, lienholders, and tenants in possession. Id.; see also 12 V.S.A. § 4523(c).  Therefore, all of the following should receive notice and service of the foreclosure complaint: Phillip and Patience, the mortgagors; Mobile Home Bank, another mortgagee; Charlie Carpenter, who has a lien on the property; the IRS, which also has a lien; and Buster, who is a tenant residing at the property.  The facts of this question raise some doubt as to whether Mobile Home Bank is entitled to notice and service, since MHB did not record its interest in the land records.  However, because Home Lenders has constructive notice of MHB’s interest, the better course is to name MHB as a defendant and provide it with notice and service.

2.     Describe the steps necessary to foreclose on the real property owned by Phillip and Patience.

When the property is sold, the proceeds go first to the plaintiffs.  If the proceeds exceed the amount due the plaintiff, the court shall provide for payment of the surplus to the other defendants in the order of priority of their liens and to the defendant mortgagor.  If there is a deficiency, the court may assess a judgment against the mortgagor for that amount.  V.R.C.P. 80.1(j).

The court enters an order of confirmation showing the names of all persons whose interests in the property is foreclosed, the name of the person to whom title is transferred, the names of any lienholders whose liens remain against the property, and a legal description of the property.  V.R.C.P. 80.1(k).

3. What are the respective rights of all involved parties in:


The question concerns the admissibility of statements made in the context of settlement negotiations.  Statements made in two different contexts are at issue.

The first statements were made in the mediation session in early January of 2002.  One offered statement is that Shareholders offered to settle their case for $10 Million.  The other offered statement is that Insurer declined, but offered to pay $ 5 Million.

The second statements were made outside of any mediation proceeding, after the judgment was entered, on March 15, 2002.  The substance of this statement is that Insurer offered to settle for $10 Million in a failed attempt to resurrect the proposal that it had earlier rejected at mediation.

There is no privilege for statements made in mediation.  Lawson v. Brown's Day Care Center,  __ Vt. __, 776 A. 2d 390, 2001 Vt. Lexis 151 (April 16, 2001).  Neither the statements made in mediation nor those made outside of mediation are covered by a recognized privilege, and, therefore, the question as to whether they may be admitted is determined by the rules of admissibility, rather than the rules relating to privileges

Rule 408 of the Vermont Rules of Evidence provides that evidence of offering to compromise a claim which is disputed as to either validity or amount, is not admissible to prove liability, or to prove the invalidity of the claim.

Considering, first, statements made in mediation, they are not offered to prove that Accounting Firm or Insurer were liable for plaintiff's claim.  No inference is to be made that the $5 Million settlement response shows the defendants knew they would be found liable.  Nor are these statements offered to show that the plaintiffs' $300 Million claim was invalid.  No inference is to be drawn from the fact that plaintiffs were willing to settle their case for $10 Million.  These statements are offered to show that the case could have been settled at that point in time, for a specified amount ($10 Million).   Plaintiffs must prove that the underlying case could have been settled for an amount that the insurer was obliged to pay, in order to show that Insurer is liable in this case for failing to honor its contract of insurance.  Rule 408 expressly states that it does not require exclusion if the evidence is offered for another purpose, as is the case here.  Since the mediation settlement discussions are not offered to show that Accounting Firm or Insurer admitted liability, but instead is offered only to show that Insurer had the opportunity to settle the case for the specified ($10 Million) amount, these statements may be admitted into evidence.

The opposite result pertains to the post-judgment  (March 15, 2002) statement, to the effect that Insurer attempted to resurrect the earlier settlement proposal by offering to pay $10 Million.  The willingness of Insurer to pay $10 Million at that point has no probative value, except, potentially, to show that Insurer has tacitly or otherwise admitted that the second insurance policy applies.  That is one of the key issues before the court in the present case (Accounting Firm v. Insurer); i.e. whether Insurer is also liable under the second insurance policy.  This statement is not offered for any other purpose.  Therefore, it is an inadmissible offer to compromise, as provided in Rule 408, and should be excluded from evidence.

Rule 411 should be briefly considered.  That Rule makes inadmissible evidence as to whether a person was or was not insured, but only upon the issue of whether the person acted wrongfully.  Hence, in the underlying action in which Shareholders sued the Accounting Firm, evidence as to whether Accounting Firm had insurance would have been properly excluded under Rule 411.  But in the present action, (Accounting Firm v. Insurer) the issue is whether Insurer has fulfilled its obligations under its insurance contract.  This case concerns whether the Insurer honored its insurance contract, and Rule 411 does not in this context require exclusion of all evidence of the very contract that is at issue.


Pat does have standing to challenge the Department’s rescission of the new rule.  The Vermont Supreme Court held in In re Diel, 158 Vt. 549 (1992), that because ANFC recipients use their benefits to meet their day to day living expenses, they suffer a legal injury when the Department seeks to rescind a benefit increase.  This legal injury is sufficient to make Pat “aggrieved” within the meaning of the Administrative Procedures Act, (APA).  The APA, at 3 V.S.A. §801 et seq, provides that a person who is aggrieved by agency action may challenge the decision of the agency.  In coming to this conclusion the Vermont Supreme Court also recognized the U.S. Supreme Court ruling in Goldberg v. Kelly, 397 U.S. 254 (1970).  Goldberg established that welfare benefits are a matter of statutory entitlement that cannot be terminated without due process.

In order to challenge the Department’s action, Pat must first exhaust her administrative remedies.  She will begin by filing a request for hearing with the Human Services Board (HSB).  The HSB is created pursuant to 3 V.S.A. §3090 and exists within the Agency of Human Services.  The HSB consists of seven members appointed by the governor who in turn appoint hearing officers.  3 V.S.A. §3091 provides that an applicant for or a recipient of assistance, benefits or social services from the department of prevention, assistance, transition, and health access may file a request for a fair hearing if the individual is aggrieved by agency action affecting his or her receipt of assistance, benefits or services, or because the individual is aggrieved by agency policy as it affects his or her situation.  The HSB must normally issue a written decision within 75 days of the request for fair hearing.  3 V.S.A. §3091(e).  Pat may appeal the HSB decision to the Vermont Supreme Court.  3 V.S.A. §3091(f). 

Before rescinding the rule the Department should have gone through the rulemaking process prescribed by the APA.  The procedures are:

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