QUESTION I - JULY 1996



     The Vermont Health Care Authority is a three-member Board responsible
for overseeing health care planning in Vermont. Among its responsibilities is
administering the Certificate of Need (CON) review program The CON law
requires any "new institutional health service" offered in Vermont to be
licensed by the Health Care Authority. The term "new institutional health
service" is defined as the construction of any health care-related building
costing more than $500,000 or the purchase of health care equipment costing
more than $250,000. However, the purchase or lease of an existing health care
facility is specifically exempted from CON review.

     The Authority is assisted in administering the CON program by a
26-member advisory body known as the Health Policy Council. The relevant law
provides that a majority of the Council's members constitutes a quorum.

     Fifteen Council members attended the regular monthly meeting of the
Council on the first Monday in May. The first agenda item was a ten-minute
public comment period. Very few members of the public were present so early
in the meeting, and no one asked to comment, so the Council's chairperson
proceeded onto their next agenda item, a discussion of a longstanding CON
controversy: Should Vermont allow the establishment of for-profit hospitals
in the state? All of the existing hospitals were not-for-profit,
community-led institutions. Recently, however, a number of for-profit health
care corporations based outside the state had indicated an interest in buying
or building new community hospitals in several locations through Vermont.
This triggered fears by Vermont non-profits that they could no longer
continue to offer their services in the same manner. Because ofthe importance
of this issue, the Authority had asked the Council to look into it in detail
and to make some policy recommendations for the Authority's use.

     To assist the Council in its task, the Authority hired an expert in
health care economics - Dr. Christine Cardinal - who came to the meeting to
present her report and recommendations. Dr. Cardinal's report concluded that
the addition of new for-profit hospitals into the Vermont health care system
would definitely have a negative impact on Vermont's not-for-profit hospital
system. She therefore recommended that the Authority require that any
for-profit corporation seeking to build a new hospital, or to purchase an
existing hospital, be subject to CON review.

     After the Council members had an opportunity to question Dr. Cardinal,
several members of the public - some of whom had arrived after the meeting
had begun - raised their hands and requested permission to comment on the
report and her recommendation. Because the scheduled public comment time had
passed, however, the Chair decided not to allow their comments. The Chair
also noted that the Council had held several public meetings on the same
topic in the past month, at which time members of the public had had ample
opportunity to comment on the controversy. It was then moved that, given the
sensitive political nature of the issue before them, the Council go into
executive session to consider Dr. Cardinal's report and recommendations.
Seven Council members voted in the affirmative on the motion and five voted
no; the remaining three had left the room.

     The Council members moved into an adjacent room for their executive
session, where the three missing members joined them. Another half-hour of
discussion and argument ensued, after which they decided to take a "straw
poll" to see what their recommendation to the Authority would be. Nine
members, including one who was a hospital administrator and one who was on
the board of directors of another hospital, voted to recommend that the
Authority adopt Dr. Cardinal's proposed new policy. Four members voted
against the proposal, and two abstained. Immediately after the straw poll,
the Council adjourned from the executive session and resumed to the main
meeting room. It was then moved, seconded, and voted to recommend approval by
the Authority of Dr. Cardinal's proposed new policy. Each Council member
voted as he or she had voted during the straw poll.

     The Chair of the Council sent a copy of the minutes of the meeting to
the Health Care Authority Board with a cover letter stating that the Council
was recommending that the Authority adopt the proposal by Dr. Cardinal that
any proposed building or purchase of a hospital in Vermont by a for-profit
corporation be subject to CON review.

     After receiving the letter, the Chair of the Health Care Authority Board
called up several of the Council members and invited them to her office to
meet with Dr. Cardinal to further discuss the Council's recommendation and
Dr. Cardinal's report. When Roberta Woodward, the director of a citizens'
health advocacy group, heard from a friend on the Council about the meeting,
she called the Authority and asked when and where it was going to be held so
that she could attend. She was told, however, that the meeting was not open
to the public.

     One week after that meeting, at its next regularly-scheduled public
meeting, the full Authority Board decided to adopt the proposed new policy
without any modification. In addition to beginning the formal Administrative
Procedure Act rulemaking process by filing the new policy with the Secretary
of State's off'ce, on May 23 the Authority issued a press release announcing
that it was adopting the policy as an emergency rule because the public's
welfare was implicated by the possibility that for-profit hospitals would
enter Vermont's health care system and disturb its fragile balance.

     On October 1, before the new policy had been finalized through the
normal rulemaking process under the APA, New England Healthcare, Inc. (NEHI),
a for-profit corporation based in Orange, Massachusetts - just over the
border from Vermont - announced plans to purchase the Bennington Regional
Hospital for $5.75 million. It was anticipated that the transaction would
take place by November 1. Shortly after getting wind of the proposed purchase
from reading the local paper, representatives of Manchester Community
Hospital (MCH), which is located only 25 miles from Bennington, wrote to the
Authority to request that it require the proposed purchase to undergo CON
review by virtue of the emergency rule.

     On October 15, the Authority Board reviewed MCH's request for CON review
of the proposed purchase. On the advice of its counsel, it reluctantly
concluded that there was no jurisdiction over the proposal under the CON
program. Instead, the Board issued a Certificate of Exemption to NEHI,
allowing the purchase to co ahead as nlanned.

     On October 2O, MCH appealed to the Vermont Supreme Court invoking
V.R.C.P. 75 and the Vemmont Administrative Procedure Act, asking it to
overturn the Authority's determination that no CON jurisdiction existed. In
an attempt to prevent the sale of Bennington Regional Hospital on November 1,
MCH also filed a motion with the Court requesting a stay of the Authority's
Certificate of Exemption pending resolution of the appeal.
                                  
Questions:

     Roberta Woodward comes to you for advice. Discuss and analyze the
legality of the actions of the Council and the Authority Board.

     Discuss and analyze MCH's appeal and motion to the Supreme Court.




Model Answers 


QUESTION II - JULY 1996

                                  

     Yesterday, John Defen came to your office with two documents. One was
entitled "Complaint" and the other "Notice of Deposition." He indicated to
you that he found them taped to the door of his home in Montpelier the
preceding day. The Complaint relates to an auto accident that he was involved
in exactly two and a half years earlier. John told you that while he was
driving his car on Route 2 in Montpelier in Washington County, a car came
abruptly out of a driveway; he couldn't stop, and he collided with it.
Unfortunately, the collision instantly killed David Plain, a child who was in
the other car. David's brother, Ian Plain, sustained a number of serious
injuries. Mary Plain, the children's mother and the driver of the vehicle
coming out of the driveway, sustained a broken leg as a result of the
collision

     At the time of the collision, Frank Plain, Mary's husband and the
children's father, was in the basement of the house which was located about
100 feet from the road. Frank did not realize what had occurred until he came
out of the basement about five minutes after the incident. In addition to the
personal injuries that were received, the Plain's car and a computer in the
back seat were destroyed. The computer was owned by Frank's employer, Plain
Corporation, a corporation wholly owned by him. John injured his neck in the
accident. It still hurts. The Complaint follows:


 Frank Plain and Mary Plain,                    )    Chittenden Superior Court
 individually and as Administrators             )    Docket No.
 Of the Estate of David Plain,                  )
 and Ira Plain, by and through his              )
 next friends, Frank and Mary Plain             )
                                                )
 v.                                             )
                                                )
 John Defen                                     )

                        COMPLAINT

     NOW COME the Plaintiffs, by and through their attorneys, and hereby
complain against Defendant as follows:

     1. On or about January 1, 1994, Defendant John Defen was operating his
vehicle on public highway No. 2.

     2. Defendant negligently permitted his vehicle to collide with a vehicle
operated by Mary Plain in which David and Ian Plain were passengers.

                         COUNT I

     As a result of the collision, Frank Plain sustained the loss of a computer
valued at $3.000 and his vehicle with a value of $5,000.

                        COUNT II

     As a result of the collision, Mary Plain suffered personal injuries
including, but not limited to, a broken leg. She lost wages, incurred medical 
bills, and experienced pain and suffering.

                        COUNT III

     As a result of the collision, Ian Plain sustained numerous fractures,
incurred medical bills and underwent pain and suffering.

                        COUNT IV

As a result of the collision, David Plain was killed.

                         COUNT V

     As a result of the collision, Frank, Mary and lan Plain sustained mental
distress.

     WHEREFORE, the Plaintiffs demand judgment in an amount determined to be
fair, just and equitable by the trier of fact and, further, request costs.

Date: June 30. 1996 Signed: XYZ Law Firm

On behalf of the Plaintiffs

     The Notice of Deposition which John gave you calls for his deposition to
take place at the law firm of plaintiffs' attorneys in 25 days. John told you
that he does not want to be deposed on that date. John then told you that he
had no insurance at the time of the collision.

     You will be working on this matter with the senior partner in the firm.
She has asked you for a draft of the substance of the pleading or pleadings
that you think should be filed and a memo identifying each defense that you
see and the basis therefor. Please do what she has requested.


Model Answers 



QUESTION III - JULY 1996

In March of 1991, Bob Bigh and his girlfriend Wanda bought a parcel of land
from Sally Sellano for $15,000. They paid $3,000 cash, and Sally took back a
mortgage for the $12,000 balance. Sally filed the mortgage in the town land
records on the day of the sale. Sally's father previously had a mobile home
on the land that Bob and Wanda bought. Sally and her brother each have a
mobile home on adjacent pieces of property. All of the land used to be
Sally's family's farm.

     In April of 1991, Bob and Wanda bought a new mobile home from Green
Mountain Mobile Home Co. for $30,000. They paid $7,000 cash. Green Mountain
Mobile Home Co. financed the $23,000 balance and filed a UCC financing
statement on the day of the sale. The mobile home was moved onto the land on
June 1, 1991.

     Bob and Wanda got married in 1993. Also in 1993, Bob and Wanda improved
the septic system, drilled a new well, and put a concrete block foundation
under the mobile home. They also constructed a deck out back and a mudroom
and steps in the front of their mobile home.

     Until the fall of 1995, Bob and Wanda kept current on their payments to
Sally and to Green Mountain. Whenever they were late with a payment, they
caught up within three months. By the fall of 1995, Bob and Wanda had $10,000
in equity m the mobile home, and $4,000 in equity in the land.

     In the fall of 1995, Bob lost his job, and he and Wanda were late with
almost every payment to Sally and Green Mountain Mobile Home Co. Wanda left
Bob in January of 1996. He has not made any payment at all on the mobile home
or the land in 1996. The local fuel dealer obtained a small claims judgment
against Bob for fuel he bought in February and March of 1996, and filed the
]udgment in the local land records.

     Green Mountain and Sally see separate attorneys for legal advice on how
to get paid for the mobile home and land. What alternatives for legal action
does each have? What should each attorney recommend? What obstacles to
success is each likely to encounter and how should their attorneys handle
them?




Model Answers 



QUESTION IV - JULY 1996


     I. Nancy and Joe Fisher have been married for 10 years, and have two
children. They live in Benmngton, Vermont. Nancy comes to seek advice from
you, and she gives you the following information.

     They have had a tumultuous marriage, and there have been a handful of
times over the years that Joe has pushed her and shoved her during arguments.
In the past, there have also been times when he has thrown dishes and pulled
the telephone off the wall. On one occasion, about a year ago, he knocked her
down and she hit her head against a door. More recently, about 2 days ago, he
had a few too many drinks after a softball game with his friends, and, when
he came home, he was angry because she did not have supper ready. He started
an argument with her, and grabbed her wrist, leaving black and blue marks and
causmg a spram. She did not go to see a doctor, but she complains that the
wrist is tender, and you notice that she has difficulty moving it.

     Although Nancy has tolerated his temper in the past, this time the
children witnessed the incident, and she has become more afraid of Joe. She
tells you that his drinking has increased, and that they argue more and more
often.

     She also informs you that Joe is a self-employed autobody repairman, and
that he rents a shop approximately one mile from the marital home. She has
not worked since the children were born; they are ages 5 and 3. She worked as
a hairdresser prior to the first child's birth. They live solely off Joe's
income; he reports to the IRS a net profit of approximately $35,000 per year.
He grosses between $250.000 and $300,000. They own a home on land that was
given to them by Joe's family shortly after they were marred.

     Nancy tells you that she cannot afford to find another place to live,
but that she is thinking of taking the children and moving in with her
parents for a trial separation from Joe. She is very worried that he will
hurt her or the children during another argument.

     What legal remedies would you recommend to Nancy regarding the home, the
children and her financial situation?

     II. Assume that a divorce action was filed and six months have passed,
that the parties have separated, and that Nancy has had sole parental rights
and responsibilities for the minor children during this time. Joe's attorney
has contacted you to convey a property settlement offer from his client.
Nancy asks for your advice.

     The marital home has been appraised at $125,000. Of that value, $80,000
is for the building residence, and $45,000 is the value of the land alone.
There is a mortgage with a payoff balance of $40,000.00. The home, which is a
modular home, was purchased jointly by the parties for $50,000.00 shortly
after their marriage and after Joe's parents conveyed the land to them. Joe
and Nancy have made additions and improvements to the modular home since they
purchased it; Nancy has done extensive landscaping and interior renovations.
The total cost of these improvements was $20,000.00.

     When the parties were first married, Joe worked for his father as an
autobody repairman. About 3 years into their marriage, he decided to start
his own business. At first, Nancy helped him with the billing and
bookkeeping; after the first child was born, she became less and less
involved with the business. After the second child was born, Joe hired a
bookkeeper to manage the business finances.

     There is an IRS lien against Joe's business in the amount of $15,000.00,
stemming from an audit of his business conducted in 1993. He has business
inventory of approximately $10,000.00, tools and equipment worth
approximately $50,000.00, and a business loan secured by his equipment with a
payoff of $20,000.00.

     Assume that Nancy and the children have been living in the home and have
had sole temporary possession of the premises since the separation from Joe,
and that Nancy has been receiving child support from Joe. Joe has also made
an additional contribution of $250.00 per month towards the mortgage, which
was treated as a maintenance supplement by the parties.

     Joe's attorney conveys the following offer: Joe will convey his interest
in the property to Nancy, and on condition that the property be sold by Nancy
within a year. Upon sale, Joe wishes to receive 1/2 of the net equity in the
modular home, and 1005,0 of the value of the land (based on the fact that his
family gave him the land as a gift).

     Joe is also willing to pay Nancy $250.00 per month, over and above the
child support, but he wants it to be deemed as spousal support to her. He
will pay this to her for a year from the date of the final divorce.

     Joe wishes to have sole title to his business, and offers nothing for
the net value of that enterprise. His attorney reminds you of the pending IRS
lien and the business loan, which reduce the value of the business, and
indicates that Joe will assume sole responsibility for those debts.

     Would you recommend that Nancy accept Joe's offer? Explain your analysis
and reasons.

     Sara Roe comes in to see you. Her mother, Janet, died two months
previously and she has questions about the estate.

     Janet was widowed five years ago. She had three children from her
marriage: Sara, 27, Steve, 25 and Dave, 19. Steve died six months ago,
leaving a wife and a one year old son, Sam. Dave will start his sophomore
year at college in the fall. Janet had been paying for his tuition. room and
board.

     In addition to the three children of her marriage, Janet had a daughter,
Katherine, who is now two. Katherine lives with her father, John Horn, in the
home that he and Janet shared in Plainfield, Vermont. Janet and John were
never married.

     Two wills have just been offered for probate. The first will was
executed ten years ago, in Shelburne, Vermont. The lawyer who drafted the
will and her secretary and paralegal acted as witnesses. It states, in
pertinent part:

     I, Janet Roe, of Shelburne, Vermont, being of sound mind and memory do
make, publish and declare this to be my Last Will and Testament, hereby
revoking all wills and codicils heretofore made by me.

     I give and bequeath all my tangible personal property, to my husband,
Alfred. If he predeceases me I bequeath all my tangible personal property to
my children Sara, Steve and Dave share and share alike.

     I give and bequeath $5000 to the Society for the Protection oi:Children,
in Burlington, Vermont.

     I give, devise and bequeath all of the rest, residue and remainder of my
estate to my husband, Alfred. If he predeceases me, then the remainder of my
estate shall be given to my children, Sara, Steve and Dave, per stirues.
However, if anyone taking under this will is under the age of twenty one, his
or her share shall be placed in trust, with the income and principal to be
used for his or her care, support and education. When such child has reached
the age of twenty one, the trust shall terminate and all assets remaining m
the trust shall be distributed to that child without restriction.

     The second will offered for probate was executed in Plainfield, Vermont,
a year before Janet's death and was handwritten by Janet. It was witnessed by
John, Steve and a neighbor. This will provides, in pertinent part:

     I hereby declare this to be my last will and testament, revoking all
other wills I have made in the past.

     I leave my house and all of its furnishings to my children, now living,
in equal shares. Because children are not adequately protected from abuse in
our society, I give $2000 to the Society for the Protection of Cfiildren, in
Burlington, Vermont. All the rest of my estate I leave to my beloved, John
Horn. I appoint Sara Roe to be the executor of my estate.

     When Janet died, she owned the house in Plainfield valued at $90,000,
with an outstanding mortgage of $65,000. Janet owned most of the house's
furnishings, and an automobile in her own name which is valued at $18,000,
but upon which there is owed $12,000. She and John also owned a truck which
is valued at $6000. In addition, she had a joint bank account with John that
held $4000, a savings account and mutual funds in her own name valued at
$55,000, and an insurance policy valued at $60,000, with John the named
beneficiary. There is outstanding credit card debt of $3000.

     After Janet's death, John quit work to take care of Katherine, and, in
his free time, he begins to do significant renovations on the house. John has
no carpentry experience, and Sara's afraid that he is destroying the house.
John had been paying half of the mortgage on the house over the past year.
Since Janet's death, the mortgage on the house has not been paid, and the car
loan and credit card debts are also in default. John continues to use both
the car and the truck, and has recently had an accident in the truck, doing
major damage to the front end.

     Sara wishes to know the following:

1. What items are part of Janet's probate estate? Explain.

2. a) Which will is valid, and why?

   b) In the event that the first will is found to be valid, how would Janet's 
      assets be distributed? Explain.

   c) In the event that the second will is held to be valid, how would Janet's 
      assets be distributed? Explain.

   d) The Society for the Protection of Children is no longer in existence. 
      What will be done with the money which was bequeathed to this charity?

3. a) While the estate is pending, is there something that can be done to 
      ensure that the bills continue to be paid?

   b) Can Dave get the money he needs now to pay for his college tuition, 
      room and board?  Explain.

   c) What happens to Janet's assets while the estate is going through probate? 
      Explain.



Model Answers 



QUESTION VI - July 1996


     Two prospective clients, Arjay Reynolds and Mauris Philips, enter your
newly opened Vermont law office and detail their ambitious entrepreneurial
plan. They have purchased a hundred acres of farmland near Marlboro, Vermont,
and they want to construct a domed greenhouse over the land to grow tobacco.
The tobacco is then to be harvested, cured, and made into "smokeless"
cigarettes with the brand name of Beau Vyne ("Beau Vyne is dee-vine!" will be
their advertising slogan).

     "It'll be a locally grown and produced, more healthy product that will
complement Vermont brewed beer," says Reynolds. "We've got about 40 other
people excited about investing in this business, and we all want to have some
say in the business's decisions, even though none of us wants to be seen as
speaking for the business. Actually, some of the people want to get involved
as corporations rather than flesh-and-blood individuals, and some of the
richest and most enthusiastic people live outside the country."

     "Yeah," adds Philips, "but all of us are scared ashen of the tobacco
litigation going on, and we want to make solid sure that we're not opening
ourselves up for any personal liability with this business. We also want to
avoid paying taxes to the Feds as much as possible, and we don't want to be
kept from making side deals while involved with this business. No need to be
faithful to a business, you know what I mean?" Philips has and wants to keep
a business interest in a potentially competing tobacco company named Pynex,
which is currently involved in litigation in Mississippi.

     "One more thing," Reynolds says, "we want to set things up so that if
any of us kicks the bucket at some point, that person's legal representative
can take over the dead person's business interest right away."

QUESTIONS:

     1. Assuming that Reynolds and Philips speak for everyone, what business 
        form would you recommend in this situation?

     2. Discuss how the form you recommend would deal with:
        a. the number and kinds of persons who want to become involved in the
           business;
        b. the nature of business involvement these persons seek;
        c. the liability protection sought;
        d. the Federal taxes that would be paid.

     In your discussion, tell how other business forms, which you have not
recommended, would deal (or would not deal) with these factors.

     3. Assuming that Philips has expressed everyone's desire not to be
"faithful to a business," how could the business form you recommend best
address this position.

     4. How could the business form you recommend deal with the death of a
person involved in the business? What rights would the decedent's legal
representative have in the business?

     5. What would you do if you learned that Reynolds and Philips do not
speak for everyone?




Model Answers 


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                           Board of Bar Examiners


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


  Office Locaation:  111 State St.
                     Montpelier, VT

  Telephone:  (802)828-3281