QUESTION I - FEBRUARY 1999


       Jim meets with you in your law office and tells you his parents both
  died in a single-car  accident the previous week.  Jim's father had a heart
  attack while driving the car.  The car left the  road, and struck a tree
  killing both Mom and Dad simultaneously.  Both had lived in Washington 
  County, Vermont, their entire lives and had, in fact, never left the State. 
  Jim tells you he had  three brothers.  The oldest brother, David, died two
  years earlier, leaving one child.  Jim found  both of his parents' wills in
  a safe in his father's office.  His father's will is 35 years old.  Jim's 
  youngest brother, Bill, was born after the will was executed.  Dad's will
  left everything to Mom  but provided that if she died before or
  simultaneously with him, everything was to be divided  among his three
  sons, David, Jim, and Bob.  Bill is not named in the will.  Dad's estate
  consists of  a commercial warehouse located in Chittenden County, valued at
  $200,000, and $300,000 in  cash.  Both were in Dad's sole name.

       Mom had $300,000 in cash, the home where the two lived and its
  contents in her sole  name.  The home and contents were valued at $500,000. 
  Mom's will was only five years old.  She  had prepared it herself and had
  two friends of hers, both now deceased, witness it.  Mom's will  left
  one-half of what she had to a local church and the other half to one of her
  friends who  witnessed her will.  During the last year of her life, Mom had
  given Jim and Bill $5,000 each.  She  also gave Bob a large sum of cash. 
  There was a receipt with her will in which Bob acknowledged  it was an
  advancement from their mother.
  
       In both wills, a now-deceased brother of Dad was named the Executor.

       Jim tells you he wants his share of the money.  He also tells you that
  he and his wife plan  to give money to their children over the coming years
  for college tuition and gifts.  He would like  to know how much he can give
  to each child each year without having to file any gift tax returns.  He
  also wonders if the fact that his wife wants to join in making gifts
  permits them to give more  without the necessity of filing a gift tax
  return, and what the penalty will be if they exceed the  allowed amount.

       1.	Discuss the distribution of Dad's estate.

       2.	Discuss the distribution of Mom's estate.

       3.	How will the executor/administrator for both estates be
                chosen?

       4.	Where will the estate of each be probated?

       5.	Will either Mom's or Dad's estate be subject to estate tax? 
                If so, why?

       6.	Please respond to Jim's questions concerning how much he can
                give to his children without filing a gift tax return, whether 
                his being married permits him and his wife to give more without 
                the necessity of filing a gift tax return, and what the penalty 
                will be if they exceed the allowed amount.
 



Model Answers 


QUESTION II - FEBRUARY 1999
   

       On February 15, 1999, Monica and Linda were shopping in Ken's
  Department  Store, located in a large Vermont city.  It was Presidents'
  Day, and the store  was crowded with people hoping to take advantage of a
  sale.  As Monica and  Linda were descending an escalator, another customer
  either intentionally or  accidentally pushed Monica.  Monica fell, hitting
  her jaw.  A commotion  ensued.  When Monica reached the bottom of the
  escalator, a salesperson at a  temporary station helped her to her feet and
  out of the path of other  shoppers.  A security guard watching from a
  one-way mirror summoned the store  manager, Bill, from his oval office. 
  Bill's job as operations manager of the  store entailed responsibility for
  directing and training employees and  interns, and it was also his duty to
  investigate and gather information on  incidents involving customer
  injuries on the premises.  Bill asked Monica  whether she needed a
  wheelchair or ambulance.  Monica replied that she did  not.  Linda, who was
  very upset and perhaps a bit hysterical, kept asking who  would pay for
  Monica's medical expenses.  Monica and Linda understood Bill to  say that
  Ken's Department Store would pay such expenses.

       Immediately following their conversation with Bill, Linda helped
  Monica  out of the store, brought the car around, and they returned home. 
  The  following Monday, February 22, Monica was still in pain and decided to
  seek  medical attention, but she did not have any insurance or the means to
  pay a  doctor.  She called Bill, who, she says, reiterated the promise that
  Ken's  would pay her bills.  Based on Bill's reassurance, she consulted a
  physician  on Tuesday, and underwent treatment, but has now learned that
  Ken's has  refused to pay the medical bills.  In addition, the physician
  had orally  promised her that the treatment she received would result in a
  24-hour cure,  but she is still in pain on February 25.

       Meanwhile, Dr. Justice, the physician whom Monica consulted, has 
  possible problems of his own.  He practices a radically new and secret kind
  of  medical treatment.  On January 4, 1999, he was hired by Star Associates
  and  executed a Confidentiality and Trade Secret Agreement in exchange for
  $10,000.  The Agreement provided that for 90 days after the termination of
  his  employment, Justice would not compete with Star, directly or
  indirectly,  within a prohibited geographic area consisting of a 100 mile
  radius around any  Star office.  Star has at least 30 offices.  Further,
  Justice and Star agreed  as follows:

     Although both of us consider the foregoing restriction to be
     reasonable for the protection of Star, if it is found by a court
     to be unreasonable because it is overly broad as to time
     period, geographic area or otherwise, then and in that case,
     the restriction shall nevertheless remain effective, but shall
     be considered amended in such manner so as to make the 
     restriction reasonable as determined by such court and as so
     amended shall be enforced.

       The Agreement also provided that Star would be entitled to enjoin 
  Justice from breaching the Agreement, and that Justice would "pay Starr the 
  costs of any such proceeding, including reasonable attorney's fees."  

       On February 1, 1999, Justice terminated his employment with Star and 
  opened up a medical office directly across the street from one of Star's 
  offices in Vermont.

		
       1.  Monica comes to your office asking about a possible action against
  Bill and against Ken's based on Bill's statements to her and Linda. "He
  said his word was unimpeachable," she tells you.  What do you tell her?

       2.  Monica also wants to know about a possible case against Dr.
  Justice. What is your response?

       3.  Dr. Justice comes to your office instead of Monica.  He wants to
  know whether Star's restrictive covenant can be enforced against him.  What
  do you say to him?
	
 


Model Answers 


QUESTION III - FEBRUARY 1999

 
       Mr. And Mrs. (Dan and Debbie) Debtor own and operate an upscale, new
  age  gift and gardening emporium called "Live Life."  They have run the
  business  together for about ten years, ever since they moved to Mudville,
  Vermont.   Despite the suggestion of their friend, Larry Lawyer, they
  decided not to  incorporate because they were not in a risky business and
  they did not need to  raise capital.  Also, they had been partners in other
  activities and were  "partners in life," so they decided to run the
  business as a general  partnership.

       Live Life sells a variety of products, ranging from plants to exotic 
  coffees and other gift items.  The clientele is young, upwardly mobile, and 
  tends to have plenty of disposable income.  Debbie Debtor, who owns the 
  property in her own name, took out a mortgage with Mudville Bank on the 
  premises housing Live Life.  The bank has a mortgage on the property, and
  the  mortgage is properly recorded in the Mudville Land records.

       Based on their past success, the Debtors decided to expand the
  business  and take on a new line of specialty foods and candies, all made
  in Vermont.   The Debtors had capitalized the expansion of Live Life
  through personal funds  ($50,000) as well as loans ($25,000) from family
  members, which were  unsecured.  The Debtors also bought three new
  high-tech refrigerators from Sam  Supplier for a total of $45,000.  The
  refrigerators, which are installed  simply by plugging them into the wall
  outlets, provide an attractive display  for the perishable speciality
  foods.  The Debtors, accepting Mr. Supplier's  offer to finance 100% of the
  purchase price, granted a security interest in  the regrigerators to Mr.
  Supplier.  A UCC Financing Statement, identifying the  collateral as
  "equipment," was signed by the Debtors and was filed in the  Mudville Town
  Offices.  Mr. Supplier also requested, and obtained, a personal  guaranty
  from Paul Parent, Debbie's wealthy father.

       Shortly after Live Life expanded, a customer, Patsy Plaintiff, entered 
  the store and fell, hitting her head against a display of flower pots, 
  incurring serious head injuries.  The Debtors were served with a summons
  and  complaint alleging that Ms. Plaintiff had been grievously injured, and 
  demanding $5,000,000 in damages.  Following a recent trial on the matter, a 
  judgment was entered for Plaintiff in the amount of $500,000.

       While they pondered what to do about the judgment, the Debtors
  realized  that Live Life was not doing as well as expected.  Last month,
  they managed to  repay themselves and their family members $5,000 and
  $2,500, respectively, but  they have fallen behind in making payments to
  the bank, to Mr. Supplier, and  to the Internal Revenue Service.  In fact,
  they owe the bank two monthly  installments on the $100,000 mortgage (but
  rejoice in knowing that the real  estate is estimated to be worth
  $110,000), they owe two monthly installments  to Mr. Supplier (they still
  owe him a total of $40,000, but think that the  refrigerators are now worth
  about $25,000), and they owe the IRS about $7,500. 

       The Debtors fear that Mr. Supplier will soon  arrive to repossess the
  refrigerators.  Live Life has about $2,000 in its  checking account; the
  Debtors also have about $15,000 in their personal bank  accounts and about
  $10,000 in their IRA (retirement) account.  They also have  personal assets
  (cars, furniture, jewelry, etc.) worth about $20,000 and Live  Life has
  inventory that they estimate to be worth $35,000.

       From a book they read on living well and getting rich, the Debtors 
  learned about going bankrupt as a means of protecting themselves from their 
  creditors, and they had also heard that bankruptcy would put an end to
  their  having to deal with the lawsuit brought by Patsy Plaintiff.  Because
  the  Debtors would like to continue the business of Live Life without all
  the  encumbrances they have recently incurred, they have come to your firm
  seeking  advice.

       As a new associate in your law firm, you have been asked by the senior 
  partner to assess the Debtors' situation and to answer the following 
  questions:


       1.  Discuss the different types of bankruptcy protection that may be
  available to the Debtors and describe what recommendations you would make
  to them.

       2.  What are the relative positions and what are the likely outcomes
  of the claims that are held by the various creditors of the  Debtors?
 


Model Answers 


QUESTION IV - FEBRUARY 1999

       Barb Barton contacts Attorney Cory Competent for representation in the 
  purchase of a house and land in nearby Oldbury.  On January 31, 1999, she 
  drops off a signed purchase and sale agreement at Competent's office.  The 
  agreement reads as follows:

     Sellers Saul and Sally Sandstone agree to sell their home
     & lands, consisting of approximately 2 acres, located at
     1 Stoney Acres, Oldbury, for the sum of $125,000, to
     Buyer Barb Barton.  Buyer has paid, and sellers acknowledge
     receipt of, a non-refundable deposit of $2,500 toward the
     purchase price as of this date.  The closing shall take place
     within 45 days of the date of this agreement.  Sellers shall leave 
     the house "broom-clean", and shall remove all of the 
     accumulated personal property now located in the basement prior
     to the closing.

       After Barb obtains approval of financing for the house, Competent goes
  to the  Oldbury Town Clerk's office to conduct the title search.  In the
  course of his  search he finds the following items:

     1.  A contractor's lien was filed by Carla Carpenter "for labor
	 and materials to build a shed at the Sandstones' house at
	 1 Stoney Acres, completed on this date, in the amount of
	 $1,200."  The lien is dated April 1, 1998.

     2.  The Sandstones bought the house from Julia & Carl Johnson 
	 in 1988.  Julia and her husband Carl bought the house from
	 Anna Smith, in 1966.  Anna apparently inherited the house
	 from her aunt, Sophie Jones in 1955.  However, there is
	 no recorded deed transferring the property to Anna.  There
	 is a recorded death certificate for Sophie showing that she died
	 in late 1954, and the probate court records show that Sophie died
	 intestate, leaving one heir, her niece, Anna Smith.

       Competent also learns that the house is located in a subdivision which
  has  very strict rules.  The subdivision prohibits the building of any out-
  buildings except 2 car garages, and has a number of other stringent 
  regulations on the appearance and use of subdivision houses.

       Attorney Andrea Able represents the Sandstones.  They inform her that, 
  although the house is in a quiet, residential subdivision, it backs onto 
  property which is located on busy, commercially zoned Route 432.  The 
  Sandstones tell Able that they have learned that the owners of the property 
  located behind them, now open farmland, have obtained zoning permission to 
  build a  community care home for elders there.  The Sandstones also confide
  to Able  that although they  obtained a septic system which they believe
  complies with state regulations,  their engineer never obtained final state
  approval of the system after it was  installed.	

       Able is also holding the $2,500 deposit paid by Barton.  She placed
  the check  into her general checking account.  Her bookkeeper then
  transferred the funds  to the general client trust account one week after
  the purchase and sale  agreement was signed.

       The day before the closing, Barton walks through the house with the
  Sandstones  for final inspection and sees that the carpets are filthy, and
  that a broken  freezer, a pile of bricks, and several pieces of lumber are
  piled in one  corner of the basement.  She is furious, and calls Competent
  about this,  demanding that he take care of the problem, or she'll call off
  the sale.


       1.  What steps should Competent take to inform his client, Barton, of
  the  facts he learned in his title search, and what action, if any, should
  he  request from the Sandstones and their lawyer to address any concerns
  these  facts raise?

       2.  Based on the information she learned from the Sandstones regarding
  the  planned development of adjacent property and the septic system, what
  actions  should Attorney Abel take?  What advice should she give her
  clients?

       3.  What issues does Abel's handling of the $2,500 deposit by Barton
  raise, if  any?

       4.  How could the issues which Barton raises based on her
  "walkthrough" of the  house the day before closing best be addressed?
 



Model Answers 


QUESTION V - FEBRUARY 1999


       Assume you are a litigation associate in a Vermont law firm.  Harold 
  Haggardy, a partner in the firm, has provided you with the following 
  information about one of his cases.

       He represents the estate, wife and child of Peter Pound.  Peter Pound 
  was a member of the Apollo Health Club of St. Johnsbury, Vermont. 
  According  to his wife, Paula, Peter routinely exercised at the club three
  days per week.  She states that Peter followed the same routine every
  session.   He would  arrive around 7 a.m. and would exercise for about an
  hour and a half.  He  would swim for twenty minutes, jog on the tread mill
  for a half-hour, and lift  weights for the remaining forty minutes.

       On a cold, gray Vermont day in February, Erica Earnhart, the weight 
  trainer for the Club, noticed that Peter's car was in the parking lot at 
  around 9:30 a.m.  In her deposition, she stated that because she thought
  that  Peter had usually left by this point in the day, she began to look
  for him  around the facility.  After a long, futile search, she finally
  asked  lifeguard, Larry Lajoie, to check the men's locker room.  He
  discovered Peter  lying, unconscious, on the floor in the men's sauna,
  which was located in the  locker room.  He and another member removed Peter
  from the sauna and  immediately called an ambulance.  Moments later,
  emergency medical technicians  arrived and rushed Peter to the hospital,
  but he died the next day of acute  hyperthermia, which Haggardy tells you
  is the same thing as a heat stroke.

       Further investigation and discovery have also revealed the following.  
  According to a log sheet kept by the Club, Peter had signed out a towel at 
  7:29 a.m. on the day of the accident, but no one had any personal
  recollection  of his whereabouts until he was discovered in the sauna. 
  Peter was partially  dressed in his street clothes when discovered in the
  sauna; his sweats were  also inside the sauna.

       Peter's wife, Patricia, also tells you that a few weeks prior to the 
  accident, she had picked Peter up at the Apollo because his car was being 
  repaired.  When he got into her car, he said, "I'm freezing.  The locker
  room  is always so cold."  He also told her that in the past he had
  complained to  the Club director about it, who told him, "We can't do
  anything about it.  Why  don't you change your clothes in the sauna?"

       In addition, Peter's son, Oscar, has stated that he had been in the 
  men's locker room on several occasions, and there was no sign on the door
  of  the locker room on his visits.  When Harold Haggardy and a paralegal of
  your  firm visited the locker room, the paralegal took a photo of the sauna
  door.   It had a sign, which stated, "WARNING: Do not bathe alone. 
  Extended stays in  the sauna for more than 10 minutes may be hazardous to
  your health and may  result in bodily injury or death."

       Finally, upon Haggardy's questioning, Erica Earnhart admitted at her 
  deposition that she noticed Peter's car in the lot because they were having
  an  affair and that earlier in the day she was upset with him because she
  had  thought that he had left without saying good-bye.

       Haggardy has brought a wrongful death action in Vermont Superior Court 
  against the Apollo on behalf of Peter's  estate.  His theory of the case is 
  that the club was negligent in giving its members, particularly Peter, 
  improper training and instruction in the use of the sauna, that the lack of 
  warnings on the sauna made the Club's premises unsafe, and that both were 
  proximate causes of Peter's death.

       On behalf of his clients, Haggardy has retained Dr. Raymond Helios, a 
  physician, who will testify that based on the ambient air temperature
  inside  the sauna and Peter's body temperature when he was removed from the
  sauna, it  is his opinion that Peter remained in the sauna for over an hour
  and that the  extended length of time in the sauna was the cause of his
  death.  His opinion  is based upon Larry Lajoie's deposition testimony, who
  testified that a  thermometer in the sauna read 165 degrees Fahrenheit when
  they found Peter and  upon the EMT's report, in which they state that
  Peter's body temperature was  107.1 degrees Fahrenheit when they took it on
  the way to the hospital.

       Haggardy asks you to draft him a brief memorandum on the following:

       1.  Besides Dr. Helios' testimony, what evidence supports the
  assertion that  Peter remained in the sauna for over an hour?  For each
  item, cite any  objection the defendant is likely to raise at trial, the
  basis of the  objection and indicate how the court is likely to rule.

       2.  For each of the following items of evidence, state any objections
  we  should anticipate and analyze and discuss whether the court is likely
  to  sustain the objection.  In addition, for items e and f below, state any 
  foundation that must be established to admit the evidence.

       a.  Peter's statement to his wife regarding the temperature of the 
           locker room.

       b.  Peter's statement to his wife regarding the director's advice on
           the  use of the sauna.

       c.  Oscar's testimony regarding the absence of a sign on the sauna
           door.

       d.  The photograph of the sign on the sauna door.

       e.  The EMT's report.

       f.  Dr. Helios' testimony.

       3.  Finally, Haggardy asks you, "Is there any way to keep Erica's
  affair with  Peter from the jury?"  Please explain any ideas you have and
  analyze how the  court is likely to rule.   
 



Model Answers 


QUESTION VI - FEBRUARY 1999
 
 
       You are a solo practitioner in a small town in northern Vermont.  You 
  represent Wanda Williams in a divorce from her husband, Harry Hill.  Hill
  is  represented by Elizabeth Brennon, another local attorney.  Wanda and
  Harry  have three children.

       Wanda's case has presented a number of questions for you.  For each of 
  the paragraphs below, identify the issue, discuss your options, and state
  your  proper course of action.


       1.	Wanda tells you that Harry has been involved in a number of
  very  questionable business dealings, which might be of interest to the
  State's Attorney or the Tax  Department.  Wanda asks you to tell Elizabeth
  that a contested hearing will  probably bring these matters into the open. 
  Wanda thinks that this may  encourage them to make a favorable settlement
  offer.

       2.        Wanda feels strongly that she should have exclusive parental
  rights  and responsibilities of all three children.  Although Harry has
  physically  abused Wanda on occasion, she is not aware that he has ever
  abused the  children.  Wanda believes that in time he will present a danger
  to the  children, and she insists on testifying that he has physically
  abused them in  the past.  She argues that the court will be reluctant to
  grant her exclusive  parental rights and responsibilities absent such
  testimony, and that her  testimony to this effect is practically true
  anyway, since it's only a matter  of time until he does physically abuse
  them.  She tells you that if you do not  ask her on direct examination
  about Harry's abuse of the children, she will  volunteer this testimony
  when Elizabeth cross examines her.

       3.	Wanda says that she can reason with Harry, and she is
  confident that a  satisfactory settlement could be reached if only
  Elizabeth were not so obstreperous.  She  offers to relay your settlement
  offer directly to Harry, and if he agrees,  then Elizabeth can be brought
  into the loop.  She doesn't want to cut  Elizabeth out completely, just
  until a preliminary agreement is reached.

       4.	At the last status conference, you noticed that Elizabeth
  smelled rather  strongly of liquor, and appeared to be unsteady on her
  feet.  For the first few minutes of  the status conference, she appeared to
  have confused the Williams v. Hill case  with another divorce case in which
  the two of you are adversaries.

       5.	One of the sticking points in the case, aside from custody,
  is the  treatment of Harry's pension from his military service in the
  property settlement.  Your research  locates a New Hampshire case on point
  which is directly contrary to Wanda's  position.

       6.	Wanda tells you that a friend of hers is about to file for a
  divorce,  and that you ought to contact this friend to see if she would
  like to be represented by you.  Wanda  offers to tell her friend what a
  good job you are doing, and that she should  hire you.

       7.	Following the successful resolution of the divorce case,
  Wanda refuses  to pay you your fee.  You obtain a judgment against her for
  $6,000.00.  You recall that when  you were gathering  information from
  Wanda about how the court might order child support, she told  you that she
  expects to inherit a lot of money, and you are now considering  attaching
  the inheritance.



Model Answers 




   
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                                  Board of Bar Examiners


         Mailing address:  109 State St.
                           Montpelier VT  05609-0702


         Office Location:  111 State St.
                           Montpelier, VT

         Telephone:  (802)828-3281