QUESTION I - FEBRUARY 2004
PLEASE NOTE: QUESTION I was a "Multistate Performance Test" (MPT) and is not reproduced here.
QUESTION II - FEBRUARY 2004
Paul died in December 2000. He was survived by his stepdaughter, Charlene. His brother, Bill, died in 1995.
In his will, Paul left to Charlene his personal property, furniture, furnishings, automobile, and collections. All of the rest, residue and remainder of his estate he left in trust.
The trust provisions were as follows:
(i) All of the rest, residue and remainder shall be held in trust and distributed as provided in this will;
(ii) The income from the trust shall be payable to Bill and Charlene in equal shares, if they survive me by more than thirty (30) days, and if not, to the survivor;
(iii) Upon the death of Bill and Charlene, or the survivor, the trust shall terminate and the trustee shall distribute the trust, in equal shares, to the American Heart Association, the Shriners Hospital for Crippled Children, and the Dana Farber Cancer Institute for use in cancer research.
(iv) Terrance Thompson is named as Trustee.
The estate's assets included securities, checking and savings account at a local bank, rental properties, Paul's residence, his automobile, furniture, furnishings, and collections. He had a small mortgage on his residence securing a note to the local bank.
The estate was probated, the funeral and other bills were paid, and the residue was transferred to the trust. Terrance was appointed trustee by the Probate Court.
Shortly after his appointment, Terrance transferred the funds to a checking account in his name alone. He rented one of the rental properties to his daughter and son-in-law at below-market rents because he felt sure they would be good tenants. He sold another rental property and paid himself the usual real estate broker commission of 6%. Terrance is a licensed real estate broker. He purchased an assignment of the note and mortgage on Paul's residence. Later he transferred title to the residence to himself and his wife for a below-market price, again paying himself a 6% real estate commission.
To date, the income from the trust has been between $5,000 and $10,000 per year. Charlene has breast cancer and her medical and other expenses have been running in excess of $30,000 per year.
Charlene has asked Terrance for a yearly distribution of $30,000 to help pay her medical expenses.
1) Discuss the duties of the trustee and analyze whether Terrance has fulfilled his duties.
2) Analyze Charlene's claims and indicate what advice you would give her.
3) Should the Trustee distribute $30,000 to Charlene as requested? Discuss.
4) Analyze Dana Farber Cancer Institute's claims and indicate what advice you would give it.
5) If Dana Farber Cancer Institute announced it is no longer engaged in cancer research, what difference, if any, would this make in the distribution of the trust assets following the death of Charlene?
QUESTION III - FEBRUARY 2004
On March 1, 2000, after 30 years in business, Charley sold his auto repair business to Dave for $260,000. Among the assets included in the sale were: (1) a leasehold interest in commercial real estate (the auto repair shop) that expires in 2020, (2) all of the auto repair tools and equipment in the shop, and (3) ownership of a 2000 tow truck. Dave paid $10,000 in cash, and Charley agreed to finance the remaining $250,000 at an interest rate of 8%. Under the terms of the financing, Dave was to make minimum payments to Charley of $2,000 per month, and the debt was to be paid in full by March 1, 2010.
Before the grand reopening of the auto repair shop under the new ownership, Dave spent $50,000 renovating the shop. He paid for all of this with a personal credit card. Dave also purchased $30,000 worth of inventory on credit from Acme Auto Supply, a company that regularly supplies auto repair shops with tires and other car parts.
Finally, Dave hired Eric to help out at the shop, agreeing to pay him $500 per week.
At first, business at the auto repair shop was very good, providing more than enough income to cover all of these debts, maintain the inventory, and provide Dave with a comfortable living. Unfortunately, in 2003, Dave began to suffer serious health problems and, because he was uninsured, soon accumulated medical expenses of $40,000. More significantly, Dave was unable to keep up with work at the repair shop, and business fell off quickly.
By October 1, 2003, Dave had stopped making payments on any of his debts, although he did pay $5,000 towards his medical expenses on December 15, 2003.
On January 2, 2004, after making repeated demands for payment, Charley brought a collection action against Dave in Superior Court in which he sought to recover possession of the property, the equipment and the tow truck. On February 1, Charley obtained a court order allowing him to repossess the tow truck, which he did that day.
As of February 15, 2004, Dave owed a total of $310,000, including: $200,000 to Charley; $45,000 to the credit card company; $30,000 to Acme Auto Supply; $35,000 in medical expenses; and $1,000 to Eric for work already performed. At that time, Dave only had $10,000 in assets.
Dave comes to you for help, and you recommend that he file for protection in the bankruptcy court.
1. Please discuss the steps that Charley should have taken to protect his security interest in the commercial leasehold, the equipment and the tow truck at the time of sale.
2. Discuss under which chapter of the bankruptcy code you would recommend that Dave file, and why.
3. Please discuss the impact, if any, of the bankruptcy filing on the $5,000 payment that Dave made toward his medical expenses, Charley's collection action in Superior Court, and the tow truck that Charley repossessed.
4. Please discuss the relative priorities in bankruptcy court of each of Dave's debts.
QUESTION IV - FEBRUARY 2004
You work as a new associate in a private firm. The partner with whom you work has been contacted by Cathy Client, the daughter of one of the firm's business clients. Cathy, 23, was recently convicted of felony marijuana possession in Vermont District Court and sentenced to six months incarceration, all suspended. Cathy did not qualify for a public defender and chose to represent herself. Your partner asks you to review the case file to determine whether Cathy has any basis for a successful appeal. You learn the following:
Cathy flew from Canada to the international airport in Burlington, Vermont. The airline misplaced her luggage, and Cathy was not present at the airport when it arrived a few days later. A federal customs agent searched her suitcase after a drug interdiction dog raised suspicion. The agent found about an ounce of marijuana hidden inside a shampoo bottle. Believing that the amount was too small to justify a federal prosecution, the customs agent contacted the Vermont state police. A Vermont officer examined its contents, including the marijuana. The trooper then called Cathy, claiming to be from the airline, and told her that her luggage was at the airport and she had to pick it up in person. When Cathy arrived and claimed the bag, she was cited for misdemeanor possession of marijuana (possession of less than two ounces).
After he gave Cathy the citation, the officer told Cathy that he had a few questions for her. He asked her to sit with him in the baggage claim area for a few minutes. Cathy was very upset and started to cry. The officer told Cathy that he wanted to help her out, but needed to have more information from her. He told Cathy that the state drug task force was familiar with the address of her condo complex and strongly suspected that someone living at the complex was cultivating and distributing marijuana. Some members of the task force, he continued, were now convinced that Cathy must be the person responsible. Cathy insisted that she did not grow or sell marijuana. "So," the officer asked, "when we search your condominium we won't find any other marijuana?" Cathy then admitted that she had some more pot, maybe a couple of ounces, in her home, but again insisted that she did not sell marijuana. The officer asked Cathy to take him to her condo and allow him to search it, which she did. The officer seized the marijuana at Cathy's condo, which amounted to just over two ounces, and subsequently arrested her for felony possession.
Cathy went to trial in part because she felt that a Burlington jury would be reluctant to convict a person for possessing a small amount of marijuana for personal use. She expected the jury to include a number of students and other young people, whom she believed would be more tolerant of drug use. Cathy attended the jury draw without an attorney but didn't really understand it. She noticed, however, that the prosecutor seemed to find a way to remove every young person from the jury. Some of the young people admitted, when questioned, that they did not object to marijuana use. Others seemed to be removed for no reason at all. Your review shows that the prosecutor struck, either for cause or with a peremptory challenge, every person under thirty in the jury pool. Indeed, the prosecutor used all six peremptory challenges and each one was directed at a young person.
Cathy strongly favors the legalization of marijuana. She made a closing argument to the jury that criticized the drug laws and asked the jury whether it was fair and right to convict her of a felony under these circumstances. The prosecutor, in her closing, told the jury:
Justice requires a conviction in this case. You've heard the evidence about Cathy's marijuana possession, but that's just the tip of the iceberg. Smoking a little pot may sound harmless, but it leads to all kinds of other problems, things you've haven't heard about today, like more serious drug use, property crimes, and sex crimes. There's a reason for our drug laws, and there's a reason for punishing people like Cathy, who break those laws. By convicting her, you'll send a message to people like her that their behavior has consequences.
Cathy did not object to the prosecutor's statements.
Prepare a memo for the partner that describes any potential claims of error that Cathy could raise on appeal, and analyzes Cathy's likelihood of succeeding on each claim.
QUESTION V - FEBRUARY 2004
As the junior associate, you are assisting the managing partner, Mary, in preparing for a civil jury trial that will begin in Washington Superior Court next week. The case involves an aircraft accident in which your firm is defending David, the pilot of a plane that collided with another small aircraft, killing everyone on board. David has many years of experience flying military jets but this was his first solo flight in this type of small private airplane. The critical issue in the case is which pilot had the right of way upon David's takeoff from the Barre Town Airport where the collision occurred.
Your firm has hired Emory, who issued a report opining that David did nothing wrong in the operation of his aircraft. Emory has been a Vermont-based certified flight instructor for twenty-five years and has published numerous articles on the subject of safety in flying small aircraft. Many of Emory's opinions are based upon a book, Safety in the Skies, that Emory published ten years ago. The book remains widely used throughout the United States to teach safety in operating small aircraft.
The plaintiffs have hired their own expert witness, Susan, who was the federal official in charge of small aircraft safety procedures for New England for the Federal Aviation Administration for five years before retiring in 1990. Susan is not a licensed pilot. At Susan's deposition last month, she disagreed with many of the opinions in Emory's report. Emory's deposition was not taken.
Mary recently had a telephone conversation with Emory discussing her concept of the case and confirming Emory's understanding of the facts of the case. Unfortunately, at the conclusion of this conversation, Emory explained that he was unsure if he would be able to attend the upcoming trial because he was injured in a serious airplane accident similar to the accident involving David. Even if Emory is physically capable of appearing at the trial, Mary is concerned with the appearance he will make at the trial as a safety instructor who has been badly injured in a similar accident. The trial has been postponed several times, so it is unlikely that the trial judge will grant another continuance.
Mary requests that you draft a memo discussing the following questions:
1) What facts should Mary look for Plaintiff's counsel to elicit from Susan in order for her to be qualified as an expert witness?
2) If Emory is unable to attend the trial, can Emory's report be introduced into evidence?
3) If Emory is unable to attend the trial, can Mary enter into evidence Emory's opinions set forth in the book Safety in the Skies?
4) If Emory is unable to attend the trial, can David testify regarding his opinion as to who had the right of way at the time of the accident?
5) If Emory is able to testify, can plaintiff's counsel elicit the facts and details of the conversations between Mary and Emory in preparation for his trial testimony?
QUESTION VI - FEBRUARY 2004
After 25 years of marriage, Frank and Marsha divorced on December 31, 2001. The divorce proceedings were simple and amicable. They divided their bank accounts, retirement accounts, and personal possessions, and they agreed to share custody of their then-9 year old minor child, Cayla, although she would stay with Frank during the school week. The stipulated final divorce order in their case read as follows:
It is hereby ORDERED, ADJUDGED and DECREED as follows:
1. Marriage, notice and residence are proved. This Court finds that the parties have lived separate and apart for over six months and the resumption of marital relations is not reasonably probable, accordingly, DIVORCE is granted to the parties. Decree nisi to become absolute on March 31, 2002.
2. Each party shall own all right, title and interest in those tangible personal possessions and intangible assets, including without limitation bank accounts and retirement accounts, that are presently in his or her possession or titled in his or her name.
3. Legal and physical rights and responsibilities shall be shared. Cayla shall stay with Marsha every other weekend, every Wednesday from 3:00 p.m. until 7:00 p.m., during February vacation, for five weeks each summer, and every other Christmas, and shall reside with Frank during all other times.
4. Marsha shall pay Frank child support calculated according to the Vermont Child Support Guidelines.
/s/ Judge Jones
The modest $20 per month child support order was based on a straight calculation, taking into account each party's $36,000 income, the time Cayla spent with each, and the health insurance premiums for Cayla that were paid by Frank.
As time passed, relations between Frank and Marsha worsened. Frank moved with Cayla from Bennington, where both parties had lived throughout the marriage and since the divorce, to Middlebury, which was about two hours away, because his boss had transferred him. For several months, Marsha fell behind in her child support payments. Frank grew angry and began bad-mouthing Marsha, telling Cayla unflattering stories about her mother, and refusing to communicate with Marsha at all-- in some cases resulting in Cayla not seeing her mother during some of the assigned times. He told Marsha that she could see Cayla when she paid up her child support. He also enrolled Cayla in a Catholic school without conferring with Marsha. She objected to his decision. Despite the intense animosity, Cayla has maintained positive relationships with both parents.
In the meantime, Marsha's great aunt Arabella died, leaving Marsha a $1.5 million cash inheritance. After receiving the inheritance, Marsha paid up her child support arrearages and quit her job so she could spend more time pursuing her hobby of painting.
The situation has escalated to the point that both Marsha and Frank, acting pro se, have filed motions with the Bennington Family Court:
1. Marsha has asked for (a) custody of Cayla, (b) if she is awarded custody, a child support award, (c) alternatively, an order prohibiting Frank from enrolling Cayla in Catholic school, and (d) in the event that the custody order remains the same, an order reducing her child support because she is no longer working.
2. Frank is seeking (a) an order awarding him half of Marsha's recent inheritance, (b) spousal maintenance, and (c) modification of the child support order on account of Marsha's inheritance.
You are a law clerk to the judge and magistrate, and you have been asked to write a memo analyzing the issues raised by each party's requests and identifying the factors relevant to the disposition of each issue.
Board of Bar Examiners
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Telephone: (802) 828-3281