February 1999 - Vermont Bar Examination Essay Questions

[Question I]
[Question II]
[Question III]
[Question IV]
[Question V]
[Question VI]


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.
 


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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?
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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?
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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?
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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.
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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.
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