What are the four forms of authority?
Actual Express: P tells A directly that A can do a task
Actual Implied: A reasonably believes P has given A the authority
Inherent: P, a pizza shop owner, tells A to deliver a pizza to X. A has the inherent authority to take the pizza from the pizzeria (it is not tresspass), because it is a necessary task to complete the delivery.
Apparent: A third party relies on the appearance of agency when dealing with A
What consent is needed to create an agency relationship?
Both the principal and the agent must consent
What are the three ingredients of an agency relationship?
Assent, Benefit, and Control
What is ratification?
When P ratifies an unauthorized transaction by A, P becomes bound
When is an agent liable in contract?
When the principal is undisclosed, either partially or fully. Partially: existence is known, but identity is not.
What is the difference between an "exclusive" and a "nonexclusive" broker's contract
Exclusive: if anyone (including owner) produces a buyer who is ready, willing, and able to buy, broker gets commission
Nonexclusive: if the broker produces a buyer who is ready, willing, and able to buy
Can a non-licensed broker enforce a claim for commission?
When is a principal liable for the torts of its agent?
Conduct is within scope of the employment
What are the two exceptions for tort liability of a principal when there is no employment relationship?
(1) Inherently dangerous activities
(2) nondelegable duties
-owners of land
What is the difference between a frolic and a detour?
Frolic: substantial departure from employment
(2) Detour: small side trip that does not erase liability
When is an employer liable for intentional torts?
(1) Force is authorized (bouncer)
(2) Promotion of employer's business (hires thugs to beatup picketers)
(3) friction is inherent (bill collection)
What if an employee trip has both a personal and a business purpose?
The business purpose is sufficient. Multi-purpose trips are still within the scope of employment
Is commuting within the scope of employment?
What are the Neumeier Principles?
Harm occurs in State Y
(1) P and D are from same place, apply that place's law
(2) One party is from Y, and the law in Y would be beneficial to their side. Apply Y.
(3) any other case: Apply Y unless
-forum has an interest
-would not impair "multi-state system"
-would not produce "great uncertainty" for litigants (public policy exception)
What is the classical choice of law approach?
Lex Loci Delicti. Apply the law where the transaction took place.
What is the difference between "conduct" laws and "damages" laws?
(1) Damages, apply Neumeier (eg guest statute)
(2) Conduct, apply the place of the harm always (eg speed limit)
What is interest analysis?
The choice of law method that applies the state law from the state that has "the greatest interest" in the outcome.
Step #1: Is there a false or true conflict?
False conflict: only one state has an interest
True conflict: both states have an interest
False conflict: apply the law from the state that has an interest
True conflict: if the forum has an interest, it will apply its own law
Does NY have a dram shop law?
Yes, NY has a dram shop law. This means a bartender may be liable for overserving a patron in the form of vicarious liability for the patron's harms.
In a conflict of laws situation, NY courts should not apply dram shop liability to an out of state defendant from a state where there is no dramshop law. It is unlikely that the out-of-state bartender would adjust his conduct in conformance with the dramshop law in this case.
A NY plaintiff purchases a ticket and then boards an aircraft from NY to MA. The plane crashed in Massachusetts. The plaintiff's family brings a wrongful death action.
NY has an unlimited recovery for wrongful death
MA has a $15,000 damages cap for wrongful death
What law applies?
Here, while the vested rights approach would point to MA law as the situs of the injury, this approach is no longer followed in NY.
NY would apply interest analysis governed by Neumeier principles.
Here, while MA arguably has an interest, NY also has a legitimate interest in ensuring its domicilliaries can get a substantial wrongful death recovery. Therefore NY law applies
What are the three exceptions to an express choice of law provision in a contract?
(1) Public policy of an interested state is contrary to the choice presented, and that choice of law has no interest
(2) No reasonable basis for choice: "no substantional relationship to parties of transaction"
(3) Lack of "true consent" by one party
What are the $ minimums for the NY General Obligations Law?
$250,000 means that a NY choice of law clause is valid regardless of any connection to NY.
What law governs automobile insurance policies?
The law of the state where the policy was written
NY unlicensed real estate broker alleges an oral "finder's fee" agreement from a NJ corporation. NJ corporation has many NY contacts. The oral agreement was alleged to have taken place in NJ.
The broker sues in NY court to enforce the fee. NY law does not allow oral contracts on these facts; NJ law does. What choice of law?
NY. NY has a strong interest in ensuring that, as an international center of commerce, principals can count on the fact that they will not be held accountable for fraudulent or unfounded claims.
What are three fallback exceptions to applying the law of a foreign jurisdiction?
(1) contrary to public policy (rare)
(2) foreign law is merely procedural
(3) foreign law is a penal or tax law
What is the choice of law for real estate?
The law of the situs (vested rights)
What is the choice of law for inter vivos transactions of personal property?
Law of situs (vested rights)
What choice of law for personal property passed via death?
Law of the decedent's domicile at the time of his death
What choice of law for real property passed via death?
Law of situs
What is the principle of comity?
A foreign country judgment will be enforced if
(1) Foreign court had jurisdiction
(2) Fair procedures were used in adjudicating case
Court is entitled to use value judgments to resolve the issues
What are the rules pertaining to NY real estate agents?
(1) Entitled to commission upon furnishing a ready willing and able buyer
(2) Contract must be in writing UNLESS licensed attorney or real estate broker (then oral is ok)
What are the rules pertaining to options without consideration?
(1) Multistate: option is invalid; option contract must be supported by consideration
(2) UCC: "Firm offer" provision. Signed writing by a merchant for up to 3 months
(3) NY: Writing/Signed + states "irrevocable", the offer is not revocable during time stated
When can the offeror revoke a unilateral contract offer in NY?
(1) Multistate: part performance creates an irrevocable offer, and offeree is entitled to complete performance and demand payment
(2) NY: part performance is immaterial; offeror can revoke at any time before performance is completed
When is moral consideration binding?
(2) expressly stated
(4) signed by promisor
What are the three additional categories of contracts within SoF?
(1) promise to pay discharged debt
(2) assignment of insurance policy or promise to name beneficiary
(3) commission or finder's fee unless attorney/licensed broker/auctioneer
Is suretyship within SoF in NY?
Yes. But NY does not adopt the "main purpose" exception to suretyship in SoF. Therefore, any suretyship agreement must be in writing, even if suretyship gets a pecuniary benefit.
A orally contracts with B that A will visit B once a month for the remainder of B's life for a price of $50/week. Within statute of frauds?
Multistate: Yes. This could hypothetically be performed within one year, if B dies within one year.
NY: No. "Lifetime" is presumed greater than one year
A contracts with B for B to paint A's house. B does so. B then gratuitously signs a release that A will not have to pay. Valid?
Multistate: No. no consideration
NY: Yes, as long as its a written instrument.
When does a gratuitous assignment become irrevocable?
(1) performance complete
(2) detrimental reliance
(3) signed writing
When does NY have criminal jurisdiction over an out of state defendant?
Whenever conduct in NY was sufficient to establish an element of the offense
What are the NY requirements for a warrant informant?
Higher than the constitution. Applicant must demonstrate:
(1) Reliability of source
(2) basis of informant's knowledge
What is the NY indelible right to counsel?
The indelible right to counsel affords greater protection to D's than the US Constitution.
Kicks in when
(1) D in custody, police are acting "overwhleming to a layperson", and D requests counsel
(2) At arraignment
(3) Filing of an accusatory instrument
(4) Any significant judicial activity
When does NY provide a right to counsel in pre-charge lineups?
(1) police are aware D is represented on another charge
(2) D requests his attorney
police awareness is objective (should have known) rather than subjective
What are the elements of issuing a bad check?
(1) A person as drawer puts a check into circulation
(2) Knowing he does not have sufficient funds to cover
(3) With intent or belief that payment will be refused by drawee
(4) Payment is refused by drawee
Can a single defendant be convicted of conspiracy in NY?
Yes. NY adopts the single guilty mind approach.
Are there any special rules for conspiracy when a co-conspirator testifies?
A D can only be convicted of conspiracy if the co-conspirator's testimony is corroborated by additional evidence
A, B and C conspire to rob a bank. However, on the day of, A gets extremely sick and does not participate; only B and C actually rob the bank. During the bank robbery, B intentionally kills a police officer while B and C are fleeing the bank. Who is guilty of what?
B+C: First Degree Robbery + Conspiracy to commit First Degree Robbery + First Degree Murder
A: Conspiracy to commit First Degree Robbery only. No vicarious liability, since A did not participate in the crime
What is the difference between a "defense" and an "affirmative defense"?
Defense: prosecution must disprove beyond a reasonable doubt
Affirmative Defense: must be raised+proved by defendant by a preponderance.
Affirmative Defenses: insanity, EED, entrapment, duress
Defense: self defense, justification, necessity, infancy
What is the insanity defense standard in NY?
NY: as a result of mental disease or defect, he lacked substantive capacity to know or appreciate either (1) nature and consequence or (2) that such conduct was wrong.
--easier than M'Naghten, but harder than MPC. no "irresetible impulse" branch
What are the NY rules regarding alibi?
if prosecution asks within 20 days of arraignment, D must provide the details circumstances and witnesses of his alibi defense
When must a D provide notice of insanity defense?
Within 30 days from a not guilty plea
What is the NY standard for inefective assistance of counsel?
Greater protection than us consitution.
(1) failed to provide "meaningful representation"
(2) a single error that is "sufficiently egregious and prejudicial as to compromise a right to fair trial"
(3) absense of stratetgic explanation for attorney's performance
(4) failure to make a motion if D shows motion had a reasonable chance of succeeding
What are the rules in NY for character witnesses?
Must be criminal cases
ONLY reputation, not opinion
ONLY relevant traits
What are the NY rules for victim's past behavior in rape cases?
(1) Conviction for prostitution within three years prior
(2) Rebuttal evidence of sexual propensity if victim testifies he or she was chaste
What are the special evidentiary privileges recognized in NY?
(1) Journalist privilege. If published, confidential news sources need not be disclosed
(2) Psychologist/Psychoteherpaist/Social Worker/Rape Counselor
When is an inference permitted for failure to call a witness?
(1) W's knowledge is material to trial
(2) W would give noncumulative testimony favorable to W's side
(3) W is "available"
When can a life tenant undertake beneficial (ameliorative) waste in NY?
(1) FMV is not diminished
(2) consent of remainder OR "changed conditions"
(3) does not violate any agreement
(4) life estate is at least 5 years
(6) written notice of change served on remaindermen
What is the difference between executory interests and contingent remainders in NY?
No difference. They are simply called "remainder subject to a condition precedent".
What RAP reforms has Ny adopted?
(1) Age contingency fix (25 -> 21)
(2) Men can have children at age 14. Females can not have children over age 55.
(3) "widow" is construed to be current spouse
(4) presumption that creater intended a valid interest
What are the NY rules regarding residential tenant assignment and sublease?
(1) Assignment is presumptively not allowed. Assignment requires writen consent of owner.
(2) Subleases are presumptively allowed. Landlord cannot unreasonably withhold right to sublease.
What are the rules for adverse possession in NY?
(1) SoL is 10 years
(2) Tenant in common with exclusive possession w/o ouster can get AP after 20 years
(3) Possession without good-faith belief or claim of right is a trespass
(4) De minimis hedges, fences, etc. are deemd permissive and nonadverse
Who bears the risk of loss in real estate transactions in NY?
NY adopted UVPRA, which places risk on seller unless buyer has legal title or possession
Do easements prevent marketable title in NY?
KNOWN or BENEFICIAL easements do not prevent marketable title.
However, unlike multistate, VISIBLE easements do prevent marketable title.
What type of recording statute does NY have?
Does NY follow lien theory or title theory?
Does NY have a stautory redemption?
No. NY only has an equitable right of redemption. There is no stautory right of redemption after sale.
What is prima facie tort?
Fallback tort in NY. Intentional infliction of pecuniary harm without justification.
Pecuinary loss is an essential element.
Does NY have a duty to retreat before deadly force?
(1) not safe to do so
(2) in own dwelling
(3) is police officer
(4) is assisting a police officer
What are the elements of negligent misrepresentation?
(1) misrepresentation by a professional
(2) breach of duty
PLUS ny factors:
(1) awareness that statement was to be used for particular purpose
(2) reliance by a known party in furtherance of the purpose
(3) conduct by D demonstrating defendant's understanding of the reliance
What are the NY rules for NIED?
(1) P must be in the zone of danger of physical injury
(2) P either experienced a threat of physical impact or observed a threat of physical impact toward an immediate family member
requires physical symptoms
What is a doctor's standard of care when he undertakes a rescue?
multistate: standard is ordinary due care
NY: only liable for gross negligence. this special rule is for licensed health professionals only; a layperson is still subject to ordinary care.
What is NY stance on P's contributing negligence?
Pure comparative negligence. Can recover even if mostly at fault
What is NY's permissive use statute?
The owner of a car is NOT vicariously liable for intentionally tortious operation by the driver
Does NY impose vicarious liability to parents for children?
Yes, for willful and intentional property torts of children over age 10, up to $5,000
Can a child sue his parent for negligent supervision?
No. This claim is not allowed in NY. But otherwise, no intra-family immunity
T, trustee is a very wealthy individual, and is enamored toward the beneficiaries. He thus decides to loan money to the trust at an interest rate of 2%, much lower than the market rate of 5%. Permissible?
NO. "no further inquiry". Even if the trustee is giving the trust a great deal, it is invalid.
T, trustee of ABC Trust, signs as "T, trustee of ABC Trust". Is T personally liable?
Yes. Mere notation that T is trustee. Need to explicitly say its on behalf of the trust, eg "ABC Trust, signed by trustee T".
Trust pays A income for life, residuary to B. The Trust initially has assets of $1,000,000 invested in a diversified stock portfolio, and T, the trustee has been making income payments of $30,000 per year to A. However, the past year has been a great year, and the principal amount increases to $1,400,000 due to a great year in the stock market, exclusively as capital gains growth (eg the stock prices rise). At common law, capital gains are allocated to principal, not income. However, T thinks that the income payments to A should be increased to $40,000 per year in the interests of fairness. B sues T for misallocating the capital gains to income. Result?
B's claim will fail. The trustee, by default, has an "adjustment power" under the Uniform Principal and Income Act. The trustee may, in his discretion reallocate investment portfolio return if appropriate or necessary to carry out the trust purposes.
The factors to be considered are: (1) nature purpose and duration of the trust (2) intent of the settlor (3) circumstances of the beneficiaries (4) need for liquidity, regularity of income, and (5) natur e of the trust's assets.
T is trustee for two trusts, A and B. A has a plethora of overly risky assets, while B has a plethora of overly safe assets. He thus trades some assets from A and B, so that both trusts are appropriately balanced. May he do so?
No. This constitutes "self dealing" under the trust laws, and is thus subject to the "no further inquiry" rule.
T is trustee of a $1,000,000 trust created by a will. T thinks that he will maximize the overall return on trust assets by investing in the stock market. The income beneficiary sues to stop T, arguing that the stock market investment will subject her lifetime income interest to too much risk. Result?
T must manage the trust as a prudent investor, in the context of the entire trust portfolio. Thus, if T thinks the stock market will in the long run maximize expected total return for the trust, his action is appropriate. Thus the income beneficary's claim fails.
What are the three major duties of the trustee?
(1) Duty of loyalty. No self-dealing (no further inquiry)
(2) Duty to segregate trust property. No commingling.
(3) Duty to preserve and make productive. Trustee must invest the property as a prudent investor would.
What are the five formalities of trust creation?
Writing, signed by settlor and at least one trustee
Valid trust purpose
Acknowledged before notary or in presence of two witnesses
Intent to create trust
What are the default rules for revocability?
(1) Lifetime trust is irrevocable unless power to amend or revoke is expressly reserved
-amendments must be in writing, signed, and witnessed by two people
What is an exception to the res requirement?
An inter-vivos trust created without res is valid if "poured-over" to by a will.
What is a totten trust?
deposit to bank in trust for another.
depositor resreves right to withdraw funds at any time.
on depositor's death, passes to named beneficiary
What are the rules for a power of attorney?
Power of attorney is durable (goes beyond incapacity) unless it expressly provides it is to terminate on the incapacity of the principal.
What is cy pres doctrine for charitable trusts?
Trust terms can be modified if the original purpose of the trust can no longer be accomplished. Court will direct the trust property toward another charitable purpose close as possible to the original
What are the two types of non-person beneficiary trusts recognized in NY?
(1) trusts for cemetry purposes
(2) trusts for pets
What is a resulting trust?
A fallback trust that comes into being if the usual trust formalities are not followed.
When does an oral trust of land become a constructive trust?
Oral agreement to hold land in trust is invalid unlesss
(1) fraud in the inducement
(2) oral promise was made in context of a confidential relationship
(3) promise proved by clear and convincing evidence
What are the rules for spendthrift trusts?
A "spendthrift clause" prohibits voluntary and involuntary transfers of a beneficiary's interest.
All trusts are automatically given spendtrhift protection.
What are the spendthrift exceptions?
(1) Creditors who furnish necessaries
(2) Child support or alimony
(3) Federal govt
(4) Other creditors beyond income needed for "education and support"
under "4" the subjective lifestyle of the beneficiary is taken into account, and is thus a last resort.
creditors can also (combining) get 10% of income
Can a settlor also named as beneficiary obtain spendthrift protection?
No. this could defraud creditors.
If all beneficiaries consent, can a trust be terminated?
No. Under Claflin doctrine, this is not allowed if termination would be contrary to purposes of the settlor.
Can an irrevocable trust ever be revoked?
Yes, upon consent of settlor AND all beneficiaries
Can an incompetent ever agree to revocation?
No. Consent of a minor or incompetent cannot be obtained
If the trust comes with an invasion power (eg income to B, with ample provision for her lifestyle and support), when should the trustee invade the principal if B requires a distribution for lifestyle and support?
Trustee should look at B's overall financial situation. If B is quite independently wealthy, trustee need not make a distribution. If the trust document is silent w/r/t invasion power, a beneficiary can never compel a trustee to make a distribution, as it is deemed in the full discretion of the trustee.
What is the NY statute governing wills and estates?
Estates Powers and Trusts Law (EPTL)
Grannie, a widow, dies intestate with 4 children, A, B, C, and D. She was predeceased by B, who had 3 children, Gabbie, Gatsby, and Ginger, and D, who had 2 children, Ger and Gus. A has a son, Gary. Upon Grannie's death, who gets the property?
(1) A and C are still alive. Each gets 1/4
(2) B and D left a total of 5 children. Each gets 1/10.
(3) Gary gets nothing.
Little orphan Annie dies of cancer on her 18th birthday. She is survived by her sisters, Sally and Sarah, the son of her dead brother, and her maternal grandparents. Who gets the property?
(1) Sally and Sarah get 2/3
(2) Nephew gets 1/3
(3) Grandparents get nothing unless no siblings or parents.
Grandpa dies leaving a will that provides that his property will go to "the issue of my daughter, Danielle." Danielle had 3 children, A, B, and C. C had already died, but left behind 2 children, G1 and G2. B had also died, as did her 1 child, G3. G3 left GG1 and GG2 behind, who live. Who gets Grandpa's property?
(1) A gets 1/3
(2) G1 and G2 get 2/9 each
(3) GG1 and GG2 get 1/9 each.
Princess Diana died and Prince Charles marries Camilla. Assume Camilla adopted William and Harry, Diana's sons with Charles. William, Harry, and their issue will inherit from:
Diana, Charles, and Camilla.
V dies, having had two children A and B. A had two children, G1 and G2. B had a daughter, G3. A died last year, and his children were adopted by B. Who gets V's property, assuming V dies intestate?
(1) B gets 1/2
(2) G1 and G2 each get 1/4
(3) G3 gets nothing b/c B is alive
The adopted children inherit under the birth relationship because the decedent is not the adoptive parent.
V dies of old age intestate. V had three children, A and B, by birth, and C, by adoption. A and B each had one child, G1 and G2, respectively. C's birth parents had abandoned him at birth due to his congenital illness, which caused him to die under V's care at age 25. C's mother was V's sister. C had two children, G3 and G4. Who inherits and in what proportion?
(1) A and B each get 2/3
(2) C's children, G3 and G4, get 1/9 each
C inherits under the adoptive relationship, even though he is related to the decedent by birth and by adoption, because the decedent was the adoptive parent.
What are the 4 ways to establish paternity of a non-marital child, so that the child may inherit from the father?
(1) legitimation through marriage of the mother
(2) an order of filiation in a paternity suit
(3) an affidavit of paternity filed and acknowledged by the father
(4) clear and convincing evidence (either (1) DNA test or (2) openly and notoriously holding child out as own).
What circumstances disqualify a surviving spouse from taking an intestate share and how do we treat the spouse?
DISMAL: Divorice, Invalid divorce (procured by the surviving spouse), Separation decree, Marriage is void, Abandonment or Lack of Support by the surviving spouse.
We treat the spouse as if he/she predeceased the dead spouse.
Joseph and Mary have three children, Jesus, Jacob, and Harold. Mary also had two children from a previous marriage, Lucifer and Michael. Joseph dies intestate, leaving $350k. Who gets his property? What if he and Mary got divorced?
(1) Mary would get $50k + $150k
(2) Joseph and Mary's 3 children would get $50k each.
If Mary and Joseph were divorced:
(1) Mary is treated as predeceased.
(2) Joseph is survived by 3 of his own issue, who each get $117k.
Joseph, a widower, had two children, Lucifer and Jesus. While he was alive, he gave $100k and a new car valued at $30k to Jesus. He wrote Jesus a contemporaneous, signed letter stating that this was an advance on his inheritance. Shortly thereafter, he dies, leaving an estate worth $300k. What do Lucifer and Jesus get?
(1) The $130k was a valid advance to Jesus
(2) $300k + date of death value of $130k to Jesus = $430. Lucifer gets $215. Jesus gets $85k
June, a widower, dies intestate leaving an estate valued at $500k. She had two children, Beaver and Ginny. Beaver had two children, G1 and G2. Ginny had 1 child, G3. Beaver, who had done well for himself, filed a signed document 10 months later with the Surrogate Court that stated that he irrevocably disclaimed all his title in June's estate. Who gets June's property?
The disclaimer is invalid. It must be signed and acknowledged by a notary public, filed w/in 9 months of decedent's death, and be accompanied by an affidavit stating that no consideration was received.
June, a widower, dies intestate leaving an estate valued at $500k. She had two children, Beaver and Ginny. Beaver had two children, G1 and G2. Ginny, who was dead, had 1 child, G3. Beaver, who had done well for himself, validly disclaimed all his title in June's estate. Who gets June's property?
(1) The disclaimer is valid. Beaver is treated as predeceased.
(2) If Beaver hadn't disclaimed, Beaver would get 1/2 and G3 would get 1/2. If Beaver treated as predeceased, G1-G3 each get 1/3.
(3) Therefore, to prevent an inequitable result, we pretend Beaver died 1 day after June. G3 gets 1/2. G1 and G2 get 1/4.
What is the 7 point test for a valid will?
(1) Testator is 18+
(2) Testator signs
(3) Signature is at the end thereof
(4) Testator signs or acknowledges int he presence of each witness
(5) Publication - tell witnesses what they are witnessing
(6) 2 witnesses sign
(7) Ceremony lasts 30 days (from when 1st witness signed)
Debra dies, leaving twins, T1 and T2. T1, the executor, goes to probate court to probate her will. The will is not self-proved by a self-proving affidavit. However, 1 witness refuses to testify. The other is available to help prove due execution. Is 1 witness enough here?
No. 1 witness is enough if the other is dead, absent from the state, incompetent, or cannot be found with diligence.
If neither were available, then the proponent would have to prove the signatures of both the testator and 1 witness.
What is an Attestation Clause?
It's a short paragraph reciting all the elements of due execution of a will (7 points) under which witnesses may sign. It is prima facie evidence of the facts presented, but is not a substitute for live testimony by a will proponent.
Cf. Self-proving affidavit (signed and sworn in presence of attorney), which is sufficient prove of will validity unless an interested party objects.
What is the order of "abatement" where there are more claims against the state than there are assets?
(1) Intestate and residuary property
(2) General legacies
(3) Demonstrative Legacies
(4) Specific gifts
Lena dies of old age. Her estate is worth $390k at death, but she still has $150k in law school debt. She left her boat, worth $50k, to her husband, Kevin. In her will, she left $200k to her "son Lee and his issue." Lee predeceased Lena, leaving 3 kids, Min, Lulu, and Amy. She left $100k from her account at Citibank to her daughter, Grace. She left no mention of the residuary. Who gets what?
First, pay off the creditors.
(1) She has $50k of residuary property
(2) Abatement for debt: the residuary will be taken by creditors, $100k will be taken from Lee and issue.
augmented estate for spousal share is thus: 240k
-Kevin is entitled to at least 80k.
Kevin currently gets 50k of stuff. So he needs 30k.
Grace gets 100k nominally
3 kids get 100k together nominally
share the pain pro-rata, so minus 15k each.
Kevin: boat + 30k cash
Grace: 85k cash
3 kids: 85k total cash split evenly
What are the three situations in which specific gifts will not adeem?
(1) Insurance proceeds for lost, damage, stolen property paid after death
(2) Proceeds received under executory contract paid after death
(3) Conservator's sale of the specific gift if it can be traced.
At death, LaShawn leaves a will that states that the executor must "pay all of my debts right after my death before the remainder is distributed." He then devises his house and his residuary estate. His house is encumbered with a $100k remaining mortgage. Is the recipient of his house entitled to get it free of the lien?
Unlike under common law, no exoneration in NY unless the will specifically directs the estate to exonerate.
Lilly validly executes a will that says:
(1) My furniture to Marshall
(2) 100 shares of IBM stock to Robin
(3) 20 shares of my small art business's stock to Ted
(4) 40 shares of Google stock to Barney.
Upon her death, the first three of these bequests were already sold. The fourth splits 2 for 1. Who gets what?
Adeem = gets nothing. (1) My furniture to Marshall, (3) 20 shares of my small art business
(2) Robin will get the FMV of 100 shares of IBM stock b/c it was a general gift.
(4) 80 Google shares to Barney.
The testamentary substitutes for the elective share of a testator's spouse are:
T Subs need a LEG UP
(1) Totten trusts
(2) Survivorship estates (watch out for pre vs. post marriage)
(3) Lifetime transfers (life estate retained or revocable)
(4) Employee pension funds
(5) Gifts of over $14k made w/in 1 year of death
(6) US bonds
(7) Powers of Appointment - presently exercisable general
If T has an interest, it's probably a T sub (notice, not life insurance)
(1) A probate estate of 200, of which 50 is given to W directly
(2) Totten trust for A of 100
(3) Gift of 20k made 13 months before death
(4) Joint bank account with B of 100, in which H contributed 80% of funds, made during marriage
(5) Joint tenancy with W of 100
(6) Joint bank account with D of 50, in which H contributed all the funds before the marriage.
What does W get?
-probate estate is completely included=200k
-totten trust completely included=100k
-20k gift was more than a year, so excluded
-joint bank account: consideration furnished = 80k
-joint tenancy with W = half = 50k
-joint account with D = half is gift = 25k
(1) Calculate net probate estate, which consists of probate estate and T subs: 200 + 100 + 80 + 100 + 50 + 25 = 555
(2) 1/3 = 555/3 = 185
(3) Subtract what W already got: 50 + 50 = 100
(4) Remainder needs to be satisfied by the probate estate = 85
Does an elective share trust that gives a surviving spouse a life estate whose principal is greater than 1/3 of the estate and $50k outright satisfy the survivor's elective share right?
No. If surviving spouse invokes the elective share, pretend there was no life estate to her and accelerate to the remainderman.
As a jurisdictional issue, when does a surviving spouse have a right to election?
When the decedent spouse was domiciled in NY at the time of death, UNLESS the testator expressly stated that the property was to be governed by NY law.
In addition to the elective share, what is a spouse surviving a testator entitled to?
A $92,500 exempt personal property set-aside off the top, before the the estate is probated.
What kind of power of appointment is also a testamentary substitute for elective share purposes?
A general presently exercisable power of appointment given to a dead spouse is considered a T sub for the surviving spouse because the dead spouse could have given it to herself.
Yar dies, leaving a will that devises property in trust, "Income to my husband Data for life. He may appoint the trust principal to anyone during his life or by will." Data does not exercise his POA during his life, but states in his will, "Income to my daughter Laal for life, then to my friend Wesley's children upon reaching age 21, until they reach age 40. At that time, the principal shall be paid to Wesley's children equally." Wesley had no children yet. Does this violate RAP or the Suspension Rule?
(1) Type of POA: general presently exercisable
(2) Is the power acquired in LIB + 21: yes, valid
(3) Are the interests created valid?
- For general, presently exercisable POA, measure validity from date of instrument exercising the power and do not use "2nd look" doctrine.
Picard leaves the Starship Enterprise to Riker in his will. During his life, he was the captain of both the Enterprise C and Enterprise D. No one pointed this out until after his death. Will extrinsic evidence be allowed to clarify the meaning of Picard's words? What kind?
Yes, this is a latent ambiguity.
(1) Facts sand circumstances evidence
(2) Statements of intent to third parties
(3) Statements of intent to his drafting attorney
Note: Extrinsic evidence NOT allowed for mistakes. It is allowed for patent ambiguities, minus statements to third parties.
What is required to show testamentary capacity?
(1) Nature of the act
(2) Nature of his property
(3) The natural objects of his bounty
(4) Nature of his dispositions of property
What is required to show an undue influence on the testator in making his will?
(1) Existence of an influence
(2) The effect was to overpower his mind and will
(3) The gifts would not have been made as such, but for the influence
If testator bequeaths property to the drafting attorney:
The court will look into whether it was voluntarily made under "Putnam Scrutiny."
What is the New York treatment of no-contest or "in terrorem" clauses in wills?
It will be given full effect EVEN IF a contest was brought in good faith and with probable cause (e.g., lack of testamentary capacity).
(1) forgery or later revocation by new will
(2) will contest was made on behalf of an infant or incompetent
(3) proceeding is merely to construe terms
(4) objection to jurisdiction of the court
(5) to examine the preparer, witnesses, proponents, and executors in discovery
X,Y,Z are witnesses to T's will. Z gets 1/2 of Blackacre in the will. What result?
Z is an "interested witness" to the will. However, since X and Y would be sufficient, it does not matter that Z is interested. Will is valid.
X and T's wife W are witnesses to T's will. In the will, W gets $1000. If T were to die intestate, W gets $50,000. What result?
W is an interested witness. However, the will can be saved, because W would be an intestate taker. The result is W gets the less amount of intestacy or the will. Here, we compare $1000 to $50,000, and see that W gets $1,000.
X Y are witnesses to T's will. Y gets T's car in the will. What result?
Y is interested, and is not an intestate taker, so the devise fails. the will is still valid because an interested witness can not wreck the will.
T's will is invalid in California, where he executed it. The will is also invalid in NY. But it is valid in Montana, where he is domiciled. T dies in NY while on vacation. Can it be admitted to probate in NY?
Yes. "END" applies: Admitted to probate if
(1) valid where executed
(2) valid in NY
(3) valid in domicile
category 3 applies, so it can be admitted to probate.
T executes a will in California that is valid in CA but invalid in NY. The only specific bequest is "my Porsche to my brother Billy". The residuary goes to T's mother Sally.
Billy predeceased T, but has a son Bobby. California does not have an anti-lapse statute, but NY does. Who gets the Porsche, if offered for probate in NY?
Bobby gets the Porsche. Even though we rely on California law to admit the will to probate, we apply the substantive wills law of NY. NY has anti-lapse, so Bobby gets it.
T, a NY domicilliary, is a sailor in the US Navy. He writes a holographic will in 2005. T dies while serving, but the holographic will is found. Can admit to probate in NY?
Yes. Holographic wills are usually invalid in NY. But there is an exception for members of the armed forces.
Can a beneficiary sue a negligent estates lawyer?
No. lack of privity of contract. But an executor DOES have privity of contract, and could bring a cause of action.
T executes Will X in 2002, which makes a full disposition of his property. T executes Will Y in 2004, which makes a full disposition of his property. T burns Will Y in 2005. Which will applies upon death?
Neither. The proper execution of Will Y revokes Will X, because the full disposition implies Will X is revoked by implication. Then the burning of Will Y revokes Will Y. T dies intestate.
T writes Will X in 2002. T writes "i cancel this will" on every page at the top and bottom. Does Will X apply?
Yes. This does not constitute a "physical act", which includes crossing out sig or burning it.
What are examples of physical acts of revocation?
Burning, tearing, crossing sig, cutting, obliterating...provided it is done with intent to revoke.
T writes Will X in 2002. He gives a copy to each witness. He asks his wife to burn the original for him in 2003 while they are at dinner. W does so. T dies 3 years later. Result?
T did not effectively revoke, because the physical act was done by another. A physical act done by another is only proper in the presence of two other witnesses (4 people total).
Therefore, the probate court should go to the witnesses and admit the copy of the will.
T executes Will X in 2002. Will X simply states " All property to my lover, L". T executes Will Y in 2004. Will Y states "My stamp collection to C". Who gets what on T's death?
A subsequent will, without an express revocation, counts as a codecil. Therefore, C gets the stamp collection, L gets everything else. Nothing goes to intestacy.
T executes Will X in 2005. The will contains 3 bequests. "my car to Samantha" , "my computer collection to Bob" and "Blackacre to Willy". There is also a residuary clause that points to Hank. In 2006, T crosses out the first two bequests to Samantha and Bob, and writes in the margin "it is my intent that these bequests are cancelled. Please do not give any property to Samantha and Bob". Result on T's death?
No doctrine of partial physical revocation. All three bequests are honored.
What happens if T's Will cant be found after death?
Presumption is revocation, unless last seen in the hands of an adversely affected party.
What happens to text located after T's signature?
T executes Will X in 2005. Will X states "everything to my lover, Marissa". T executes Will Y in 2006. Will Y states "revoke Will X. everything to my brother Bobby". T burns Will Y in 2008. T executes a codicil that states "As an amendment to my Will of 2005, I would like to make a specific bequest of my car to Susie". Result?
X is revoked by Y, and Y is revoked by physical act. But X is republished through codicil. This is valid under "republication by codicil.
Therefore, Susie gets the car and Marissa gets everything else
T hates his children, and aims to disinherit. T executes Will X in 2005, and gives "everything to the american cancer society". T later changes his mind, and executes Will Y "everything to New York University, for cancer research". T then, once again, changes his mind, and burns Will Y (although there is a copy at his attorney's office). T thinks Will X will apply, and the money will go to the American Cancer Society. What result?
X is revoked by Y, and Y is revoked by physical act. So T technically has no Will.
However, this is a compelling case for DRR (dependent relative revocation). Under DRR, Y is considered "not revoked". Thus everything to NYU.
T leaves Blackacre "half to A, half to B as tenants in common".
A, T's cousin, has a child, Xerath.
B, who is T's brother, has a child Susie.
A and B both predecease T. Result?
B's gift would lapse, but anti-lapse applies since B is (1) a sibling (2) who leaves issue. Therefore, Susie gets half of Blackacre.
A's gift lapses. Anti-lapse does not apply because A is not a sibling and is not issue.
T leaves Blackacre to his son, S. S has a child, G. S is on the verge of bankruptcy, and thus wants to minimize transfers to himself. Therefore, S disclaims Blackacre. Result?
Anti-lapse applies to disclaimed interests. Therefore, G takes.
T has a birthchild S who has since been adopted by X and Y, nonrelatives. In T's will, T leaves Blackacre to S. S predeceases T, leaving M as issue. Who gets Blackacre?
M. Usually adopted-out do not take under intestacy. Nonetheless, if there is a specific bequest, anti-lapse applies in favor of an adopted out child.
T leaves Blackacre to A B and C as joint tenants. A and B are T's two children. C is T's best friend.
C predeceases T, and B predeceases T without issue. Who gets Blackacre?
A in fee simple absolute. This is the "surviving residuary beneficiaries" rule.
T leaves Blackacre to X and Y, his two children. X predeceases T, leaving N as issue. Who gets blackacre?
N and Y split. anti lapse trumps.
T leaves Blackacre "to my friend A's children". A has X,Y and Z as children. Z predeceases T, leaving M as issue. Who gets Blackacre?
Class gift rule. Anti lapse doesnt apply on these facts. Ergo, the class closes on T's death. Gift goes to X and Y in equal parts.
T leaves Blackacre "to A's children". A has X and Y when T dies on 01/01/2000. A also has Z, who is born on 06/01/2000. A also has W, who is born on 06/01/2003. Who gets Blackacre?
X,Y,Z. Z gets benefit, despite "rule of convenience" because he is presumed in gestation.
What is RUSDA?
If there is insufficient clear and convincing evidence to prove X survived Y by 5 days, each is considered to predecease the other.
X and Y die in a plane crash on the way to California, two friends. X has no spouse, and has two children. X also has two living parents. Y has no spouse or children, and no parents, but has a sister Dorothy.
X's Will states "1/2 my estate to Y, 1/4 to Z, 1/4 to my children".
Y's Will states "my entire estate to X".
X: assume Y predeceases. then, 1/4 goes to Z, and 3/4 go to children, because the "1/2" gift collapses to the residuary.
Y: assume X predeceases. then, Y dies intestate. Y's estate passes through intestacy, and thus to Dorothy.
X and Y die in a plane crash on the way to California, two friends.
X and Y own Blackacre as a joint tenancy with right of survivorship. This is their sole property, for both of their estates.
X's will states "everything to N"
Y's will states "everything to M"
N and M own Blackacre as tenants in common.
H and W are married. H's W states "everything I own, now and hereafter, to the love of my life W". Three years later, H and W divorce. H then dies. Result?
H's property passes through intestacy. W gets nothing.
H and W are married. H's W states "everything I own, now and hereafter, to the love of my life W". Three years later, H and W sign a separation agreement. H then dies. Result?
W gets everything. A separation agreement is NOT ENOUGH. Must be a COURT ORDERED divorce, annulment, or separation.
H and W are married. H's will states "Blackacre to W". W predeceases H. W leaves X and Y as issue. Who gets Blackacre?
Passes to residuary. Antilapse does not apply to a spouse.
Are fiduciary appointments affected by divorce revocation (eg name H as executor, then divorce)?
H and W share a joint bank account worth $5,000. H and W divorce. H later dies. Does H's estate have any interest in the joint bank account?
H has X,Y as children when he executes Will N in 2005. H later has Z and W as children. H dies in 2010, without changing Will.
Will N states "i hate my children, and have intentionally left them from this document. my entire estate to the American Cancer Society".
Children get nothing. If T had at least one child when executed, and no provision made, pretermitted children (born after) have no protection
T gives a gift of $500,000 in equal shares to X and Y in his Will. X and Y are his two children alive at the time of execution. After the Will was Executed, T has A,B,and C as children. Result?
Each child, XYABC, each get 100k
T is a lonely soul, who has no spouse or children. His sole sibling is his brother S. T's will states "All my property to my trusty dog, Ralphie. In any case, nothing to my parents, whom I hate with all my soul". T is survived by S and his two parents, X and Y.
Gift to an animal is void. Thus T collapses into intestacy.
However, T's "anti bequest" is given effect in NY. Thus, T's parents will not take anything. Everything goes to S.
What are the requirements for an inter-vivos transfer to constitute satisfaction?
(1) Contemporaneous writing
(2) Signed by donor or donee
T executes a will in 2005. The will states "$50,000 to my friend Charlie. Remainder to my children". Charlie is in need of medical expenses, so T pays Charlie $25,000. They both sign a writing at the time of transfer stating that this will be an advance on the future gift in my Will to Charlie. Result?
Charlie takes 25k after death. They have successfully applied the formalities of satisfaction: contemporaneous writing that was signed by the donor or donee.
T's Will states "Please give out my tangible personal property in accordance with the memorandum in the safe in my office". Result?
Tangible Personal Property collapses to the residuary. Cannot incorporate documents by reference in NY.
T's Will states "my car to X" as one of the bequests. At the time of execution, T has a Honda. T later decides he wants to get a BMW so that he can better enjoy road trips, and trades in his Honda. T dies on one of his road trips. What does X get?
X gets the BMW. This is because T's acts had "independent significance".
T's Will states "my tangible personal property in the living room to X, everything else to Y". After executing the Will, T decides that he would rather Y get his famous painting than X. T thus moves the famous painting to the dining room. Result?
X gets the famous painting. T's act did not have independent significance; T was attempting to modify his Will through other acts. These other acts were not done in accordance with Will formalities, so they should be disregarded.
Compare: T moves the painting so that he can better view it while enjoying dinner in the dining room. Then Y would get it.
T has two siblings, X and Y. T's boyfriend is Henrique. T has parents N and M. T has no spouse. T had a birth child, R, whom he loved very much, but T gave R up for adoption. T visits R every once in a while, and keeps in touch.
X has two children, A and B. Y has three children, J, K , and L. A has two children, D and E. B has one child, Z.
A,B, X,Y, Henrique and T all die while on vacation in the Bahamas.
T's will states:
(1) $500,000 to my brother, X.
(2) $100,000 to my friend, M.
(3) $50,000 each to my two nephews, A and B.
(4) $25,000 to my cat, Fifi.
(4) Residuary to my best friend and lover Henrique.
(5) In the event of any lapse, nothing is to be given to my parents, who I hate with all my heart.
X predeceases T, but antilapse applies. However, by RUSDA, A and B also predecease T. So A and B can't take. It is true that D is a potential taker; however, A is not (1) issue of T or (2) sibling of T. Therefore, anti-lapse does not apply. $500,000 collapses to the residuary.
Gift to friend M: works
50k to nephews:
Both nephews predecease T under RUSDA. Therefore, gifts lapse. Anti-lapse does not apply to nephews (see above), only issue and siblings. Therefore collapses to the residuary.
Gift to cat: can't give stuff to animals, so lapses to residuary.
Residuary: Henrique predeceases under RUSDA. And no anti-lapse for "lovers", so the residuary collapses into intestacy.
Applying intestacy statute: ignore T's parents. T has no issue or spouse.
Therefore, the rule is to T's siblings by representation.
X and Y are both dead. therefore, skip the siblings.
Next generation, the nieces and nephews: A, B, J, K, L.
A and B are both dead. Therefore, J K L each get 1/5.
A's two children, D and E, and B's child, Z, are the grand-nieces and nephews. They take at the next generation, sharing equally. What remains to be divided is 2/5 of the residuary. D, E and Z each get 2/15.
The final distribution:
Blackacre+rest of estate:
X's Will states "Blackacre to K, Residuary split three ways between my two sons A and B and my best friend, C". X was married to S at the time of his death, but S has waived her elective share.
A and C predecease X; A leaves one daughter, Dorothy, as issue. Who takes what?
Anti-lapse issue: A is X's son, A predeceases. So Dorothy takes in A's place, due to anti-lapse.
Residuary beneficiaries: Common-law rule is that when one residuary beneficiary lapses, that portion falls into intestacy. However, the modern surviving residuary beneficiaries rule states that the lapsed portion instead goes to the survivors, subject to the anti-lapse rule.
Here, C predeceases, and anti-lapse does not apply. Thus the residuary would be split between A and B. Since A predeceased, but anti-lapse applies, Dorothy takes A's place.
Therefore, the residuary goes to Dorothy and B, split 50/50. No intestacy occurs.
A will leaves a gift of $50,000 to a pre-existing inter-vivos trust. Valid?
Yes. This is a "pour-over" gift which is an explicit statutory exception to the general rule that incorporation by reference is not allowed in NY.
What are the three exceptions to the general rule that incorporation by reference is not permitted?
(1) References to gifts made by another person's will
(2) Gifts by will to an inter vivos trust executed prior to or concurrently with the will (pour-over)
(3) Attached lists disposing of tangible personalty
X takes out a mortgage from Bank A on Blackacre. X devises Blackacre to S in his will. X then dies. S refuses to make payments for six months, stating he is the owner outright because of the doctrine of exoneration. The Will is silent with regard to exoneration. Bank A would like to foreclose. What result?
The will is silent on exoneration, and the default rule in NY is that exoneration does not apply. Exoneration would have the estate pay off the mortgage from the residuary so that S gets Blackacre unencumbered.
Thus, Blackacre is "subject to" the mortgage, but S takes the property. However, S does not "assume" the mortgage, and thus is not personally liable. Since the mortgage is in default, Bank A is entitled to default. However, since S is not personally liable, the Bank may not pursue S for a deficiency judgment.
What happens to a necessary subordinate mortgageholder if not joined to a foreclosure action?
The mortgage stays on the property.
Will executed in 2000, gives gift to the "Mary Smith Trust". Mary Smith Trust is not created until 2002. Is the gift valid?
No. a pour-over gift in a will must correspond to an inter-vivos trust previously or concurrently created when will is executed.
What are the eight categories of potential collateral under Article 9 of the UCC?
(1) consumer goods
(4) farm products
(6) patents, trademarks, and other IP
(8) rights to receive payment
What are the three requirements of attachment?
Value: consideration must be given by creditor
Contract: Security agreement that evidences the secured transaction. Possession by the creditor is a substitute for a contract.
Rights: Debtor must be able to give the collateral he purports to give
A gives B a loan for $50,000, with B's Television as collateral. A takes possession of the TV. No contract is signed. Valid attachment? Valid perfection?
Yes. The ucc article 9 applies (consumer goods). And there is VCR: A gave the loan, possession substitutes for "Contract", and A owned the TV. Thus there is attachment.
Further, taking possession also constitutes perfection.
A buys a new television from Best Buy, with Best Buy loaning the purchase price of $1,000. The purchase contract states that Best Buy has a collateral security interest in the television. Best Buy does not file any document in the public records. Later, A takes out a loan from Bank for $500 with the TV as specified collateral. The Bank files notice of the security interest in the public records.
A declares bankruptcy. Who gets the TV?
Best Buy. There is automatic perfection for purchase money security interests in consumer goods.
What are the three requirements of a financing statement filed with the public records?
(1) Debtor name and address
(2) Creditor name and address
(3) Description of collateral
Does a financing statement need to be signed by the debtor?
No. the financing statement is a simple document simply designed to put other creditors on notice. There are no formalities w/r/t financing statement.
ABC Inc. is a registered California corporation. ABC Inc. owns a forest in Montana on property called Blackacre. Bank loans ABC Inc. $50,000, with collateral specified as inventory now and hereafter acquired. Credit Union loans ABC Inc. $100,000 with collateral specified as timber harvested from Blackacre. Where should the financing statements be recorded geographically?
Bank: California, because that is where ABC is organized.
Credit Union: Montana, because that is where the real property-related collateral is located.
List the priority order: (1) Non-Ordinary course Buyer (2) General Unsecured Creditor (3) Attached Unperfected Creditor (4) Buyer in Ordinary Course (5) Lien Creditor (6) Perfected Attached Creditor
BIOC PAC LC NOCie AUPie GUC
A takes out a loan from Bank for $100,000, A's luxury automobile as security on February 1st. Bank files a financing statement on March 1st. A then takes out a loan from Credit Union for $25,000, A's luxury automobile as security on February 15th. Credit Union files financing statement on March 30th. A goes bankrupt. Who takes luxury automobile?
Bank. Bank filed first, first in time filed is first in line, even though Credit Union did not have notice.
What is AACF? What is PMSI
After-acquired collateral financier. collateral is "all of Debtor's business equipment whether now held or hereafter acquired" or similar.
Purchase money security interests. Security interest that enables the debtor to purchase the goods. The lender takes collateral in the very item the lender is selling.
Who wins, AACF or PMSI, when PMSI files after but both have properly filed?
PMSI, unless its inventory. For inventory, PMSI wins if it files BEFORE AACF takes possession and PMSI notifies AACF before AACF takes possession.
What happens if debtor goes bankrupt, but the collateral is not large enough to satisfy the debt?
A loans X $50,000 with X's car as collateral. X goes bankrupt. A takes X's car, and sells to his brother for $5,000. X's car is worth $30,000 on the free market. What is the proper deficiency amount?
$20,000. If the secured party sells to an "insider buyer", the price is set to the FMV rather than the actual sale price.
When is the debtor's right of redemption cancelled?
When secured sells it or does a foreclosure.
What is the amount debtor must pay to redeem?
Amount to "catch up" on the loan (missed payments) plus interest, fees, and expenses.
If there is an acceleration clause, debtor will need to pay FULL BALANCE (not just missed payments) in event of default.
What are the five steps of a secured transaction analysis?
(1) is it within Article 9 (eg tv vs blackacre)
(2) did creditor attach (VCR)
(3) was it perfected (possession or filing)
(4) who gets priority
(5) what if default occurs?
What is a negotiable instrument?
A promissory note or a draft.
What is a promisssory note?
An affirmative promise to pay. Not an IOU. "I promise to pay to X the sum of $1000 dollars"
What is the draft?
"Pay the order of X $1000 dollars". basically, a check.
"$1000 to X from my checking account". Promissory note or draft?
Draft. draft is a command, not a promise.
Who are the parties of the draft?
(1) drawer, who gives the order (check writer)
(2) drawee, who actually fulfills the order (bank)
(3) payee, beneficiary
What is the indorser?
the person who signs on the back of a negotiable instrument.
What are the seven requirements of a negotiable instrument under Article III?
(2) payable to bearer
(3) signed by maker
(4) recite sum certain
(5) unconditional promise or order
(6) payable on demand or at a certain time
(7) payable in currency
WOSSUPP: writing, order, signed, sum, unconditional, payable on demand, payable in currency
Who must sign a negotiable instrument for it to be valid?
If its a promissory note, the maker signs.
If its a draft, the drawer signs.
Who are the parties to a promissory note?
Maker is the promissor. Payee is the promisee.
"I promise to pay to the order of X $1000, if X loses 10 pounds". What type of negotiable instrument is this?
NOT a negotiable instrument since its conditional. It is a contract, Article III does not apply.
"I order my bank to pay to the order of X $1000 subject to X's performance in accordance with our painting contract" What type of negotiable instrument is this?
NOT a negotiable instrument, since its conditional. It is a contract.
I promise to pay to the order of $1000. This note is secured by a security interest in collateral described in our security agreement.
This is a proper promissory note. References as to collateral matters are ok!
I promise to pay to the order of X my sales commissions from the upcoming month. What negotiable instrument?
None. not a certain sum, so its a contract.
I promise to pay to the order of X $50,000 plus interest from Dec 1st. What negotiable instrument?
Valid promissory note. Interest is defaulted to statutory standard. This is an ascertainable, certain sum.
What is currency?
Money. Including foreign currency, but not goods.
I promise to pay to the order of X $5,000 and my automobile. Negotiable?
No. it is a contract. can't include automobile.
What is on demand?
sometimes "on demand" or "at sight" or "on presentation". silence is enough.
I promise to pay X $5,000 on or before June 1st. Negotiable?
No. does not have magic words "order" or "bearer" or "assigns" or "to cash"
I promise to pay to the order of X $6,000 on June 1st, but if X loses 10 pounds in the interim, immediately payable on demand. Negotiable?
Yes. acceleration clauses are permissible
Payable when my first grandchild is born. Negotiable?
no. this is a contract.
I promise to pay to the assigns of X $5,000 on June 1st. Negotiable?
yes. assigns is ok.
What does "payable to bearer" mean?
Pay to whoever has the document.
I promise to pay to cash $5,000. negotiable?
yes. this is a temr of art for "payable ot bearer"
I promise to pay to X $5,000. negotiable?
no. it does not have magic words "order" or "bearer"
When can a creditor use self-help repossession?
anytime, so long as creditor does not breach the peace. breach of peace occurs when the actions are likely to cause violence.
A loans B $10,000, collateral specified as B's automobile. A shows up at B's property with a tow truck, and hooks up B's auto to the tow truck. A says "hey, please don't take that car away". B takes it anyway. May A sue B?
Yes. this is a breach of the peace. ANY PROTEST by B is sufficient.
What is a writ of replevin?
A judicial order that orders the local sheriff to obtain possession of the collateral and deliver to secured party.
What is strict foreclosure? What are the requirements of strict foreclosure?
taking possession of collateral to discharge the debt.
(1) Written proposal sent to debtor and secondary obligors
(2) No objection from debtor or obligors within 20 days
(1) same as consumer goods
(2) but also tell other security holders and perfected creditor interests
What happens if the maker does not pay a promissory note?
He is properly sued, even without consideration.
Can an indorser be liable on a draft?
Yes. Indorsement is a promise "if check bounces, the indorser will pay it"
Can the bank be sued by a holder for failure to perform on a draft?
No. A drawee never signs, therefore is not liable, even to a holder in due course. However, bank could be liable to erroneously dishonoring a check w/r/t drawer.
What do the words "without recourse" do?
It means a passage of title but there is no signature liability.
What is warranty liability?
Any transferor who sells for value is liable.
A signs a check payable to the order of B in the amount of $1000 and gives to B for value. B signs and gives to C for value. Can C sue A?
What are the five warranties made by transferor signing?
(1) good title to the instrument
(2) all signatures are genuine and authorized (forgery)
(3) no material alteration
(5) no K of bankruptcy for maker/drawer
What is "duly negotiated"?
Proper transfer of the instrument. If there is proper transfer, transferee is a "holder" that might be eligible as "holder in due course".
What is "duly negotiated" when it says "payable to order"?
Delivery to payee. For future noegitiation, payee must indorse and deliver to transferee.
"Payable to order of X, $1000". Y finds it, and cashes it. Is Y holder?
no, invalid transfer.
What are the three types of indoresement?
SPECIAL: names an indorsee; the indorsee must sign for further negotiation.
BLANK:one that does not name an indorsee.it is negotiated by delivery to transferee alone.
RESTRICTIVE: transferee must obey restriction in order to be a holder. the maker can sue for conversion.
How does a holder qualify as a holder in due course
(1) for value
(2) in good faith (subjective test)
(3) without notice of any bad legal stuff (overdue, dishonor, etc)
What is the difference between "value" and "consideration"?
value does not allow mere promise, whereas consideration does. value allows past value, whereas consideration does not allow past consideration.
What is "arrears"?
fancy word for overdue
A fraduluently sells B a fake antique. B pays with a $5,000 check. A then sells the check to C after proper indorsement for $5,000 cash. C does not know about the fraud. Can C be a holder in due course?
Yes. voidable transfer between A and B. But C is a holder in due course.
A is a director of closely held corporation ABC Inc. A buys a luxury auto for himself, paying with a check addressed to "ABC inc.". The car dealer asks if A is authorized to do the transaction, and A says yes. A is not authorized. Is car dealer holder in due course?
Yes. subjective standard, as long as storeowner does not subjectively have actual knowledge, HDC.
Does HDC have the shelter rule?
Yes. shelter rule applies
What are the benefits of HDC?
(1) no claims (claims of superior ownership)
(2) no personal defenses (ordinary contract defenses)
(3) only real defenses
What are the real defenses that can screw over an HDC?
MA: material alteration (change in terms of instrument)
FIF: fraud in factum
I4: incapacity, illegality, infancy, insolvency
Maker writes check for $100 payable to X. X adds a couple zeros, and pays for a new ferari for $100,000 by indorsing the check. is car dealer HDC?
no. this is a material alteration
What is fraud in the factum or real fraud?
A lie in the instrument. eg telling someone it is a college application but it is actually a promissory note.
What are the 6 duties of a drawee bank?
(1) honor check if there are sufficient funds
(2) possibly honor check even if insufficient funds, but can get overdraft
(3) pay for wrongful dishonor of checks (so better to honor checks always)
(4) death: sufficient funds AND reasonable time to act on knowledge
(5) don't pay if forged, material alteration, wrong person, not comply with timeline
(6) stop payment is binding for 14 days orally, or six months in writing. customer has burden of showing loss
What must a bank do if it mistakenly honors a forged check?
Duty to recredit the drawer's account in the absence of maker's negligence
Who can a bank sue if it needs to recredit an account?
(1) drawer, if negligent. or actual theif/fraudmaker etc
What are examples of drawer's negligence?
(1) does not report discovery of forgery quickly after reading statement (estoppel)
(2) leaving lots of blanks on the check
(3) failure to follow internal procedures
(4) imposter induces drawer to write check, negligent.
(5) employer liable for employee responsible for handling checks. employer should monitor employees
What is the 60% rule?
if a CONSUMER has paid 60% of the debt, strict foreclosure is not allowed.
What are the rules pertaining to a foreclosure sale?
(1) commercially reasonable
(2) reasonable notice
(3) notice to debtor and obligors
-time and place of sale in notice
-how to redeem if consumer goods
-reasonable timeline, 10 days or more in nonconsumer is enough
can a secured party buy the goods at the sale?
yes, only in public. private is self dealing.
What rules apply when litigating in NY Supreme Court?
New York Civil Practice Law and Rules (CPLR)
What claims can be litigated in NY Supreme Court?
Anything EXCEPT claims for damages against the state of NY
What are two situations in which removal "upward" to the Supreme Court is required?
(1) Cases in which the original court did not have SMJ
(2) Cases in which the original court had SMJ but where events occuring after the suit was brought require transfer to a court of wider jurisdiction to obtain complete relief
When is removal "downward" possible?
(1) Cases in which original court had SMJ, but where a court of lesser jurisdiction would have ample authority to dispose of the matter
Keep in mind: consent of the adversely affected party is required because damage limits may affect potential recovery
Can a NY resident sue a foreign (non-NY) corporation in NY court?
Yes, if can get PJ over defendant
ABC Inc and XYZ Inc sign a 5 year contract for ABC to sell $20 million of widgets to XYZ. ABC is a Wyoming corporation. XYZ is a Montana corporation. Neither does business in NY. The contract has a choice-of-law provision choosing NY law, and each party agrees to submit to jurisdiction in NY in the agreement.
Two years later, ABC breaches the contract. XYZ sues in Erie Supreme Court. May the court hear the case?
Yes. Contractual Choice of NY Law is enforcable if the transaction involves at least $1 million, and the defendant had agreed to submit to NY jurisdiction.
B batters A in a bar fight in Albany on February 1st, 2011. A files process with an appropriate court clerk in the Albany Justice Court on January 28th, 2012. A's attorney serves process personally to B on February 10th, 2012. B moves to dismiss on statute of limitations grounds. Result?
B's claim succeeds. The Statute of Limitations effective date is usually the date of filing process. By this metric, B would fail. However, for Justice Courts, the pertinent date is the date of service. Here the date of service occurred after the Statute of Limitations had run.
B batters A in a bar fight in Albany on February 1st, 1980. A sues and wins a judgment of $10,000. A realizes B does not have sufficient assets, so he declines to enforce the judgment right away. 16 years later, B is a successful hot dog salesman in Manhattan, and has over 10 hot dog carts. A sees B's new fortune, and then elects to enforce his judgment against B at that time. Is A barred?
No. The Statute of Limitations for enforcing a judgment is 20 years.
B rapes A on Jan 1, 1990. A is scared to report the rape, and does not do so until February 15th, 1995 on urging by her therapist. B is charged criminally on February 20, 1995. B's trial begins on June 1, 1995. The trial lasts about three months, and ends on August 25, 1995 in a guilty verdict. Empowered by her therapist, A decides she would additionally like to pursue civil charges. A thus files a battery claim on January 15th, 1998.
(1) Was the criminal trial time-barred?
(2) Is the civil claim time-barred?
(1) No. No statute of limitations for criminal rape.
(2) Rape has a 5 year statute of limitations, but it is from either (1) date of criminal act or (2) end of criminal proceedings. Thus the civil claim is also proper.
A and B sign a contract for A to sell 100 widgets per year for 3 years to B on Jan 1, 2000. Two years into the agreement, A breaches, and does not manufacture the widgets. B does not institute a suit until Jan 15, 2005. Is B's claim proper?
Yes. The relevant start date for SoL is "the time the cause of action accrues", ie the breach. Here, the breach occurred sometime in the year 2002.
For a UCC sale of goods, the relevant time period is 4 years. Thus the claim in 2005 is proper, as it is within 4 years of 2002. It does not matter that the contract was signed in 2000.
What is the statute of limitations for legal malpractice?
A, a doctor, performs an appendix removal on B on Jan 1, 2000. A inadvertently leaves a scalpel in B while doing so, and the scalpel subsequently cuts open B's stomach, causing massive injuries. B notices the stomach injuries when his tummy hurts on February 1, 2004. He consults with a primary care physician who discovers the scalpel on February 15, 2004. B sues A on January 10, 2005. What result?
A medical malpractice claim must typically be brought 2.5 years from the date of accrual (injury), which would be 06/01/2002.
However, there is a special rule for foreign objects. Foreign objects claims may be brought within 1 year from the date of discovery of facts that would have led to the discovery of the object. Here, the applicable date is either 02/01/2004 or 02/15/2004. However, in either case, the lawsuit was within the 1 year time window, and is thus proper.
A hires B as his attorney in a battery claim. The trial begins on December 1, 2004. On December 5, 2004, B shows up completely intoxicated when he is supposed to question a key witness. His questioning is terrible, and causes A to lose the case. The trial ends on January 1, 2005.
A few years later, A decides to give B a Christmas present, and files process for a legal malpractice claim on December 21, 2007 and has his attorney serve process on Monday, December 25th, 2007. What result?
A professional malpractice claim accrues "when the work is completed." Here, although the injury occurred on 12/5/04, the trial was not done until 01/01/05. Thus, the malpractice claim is properly within the 3 year time period.
In 1990, S sells B a "time capsule" for $3,000 in which S has supposedly put many precious tokens of the 1980's. The capsule is sealed, hiding the contents. B wants to keep the capsule locked up until his newborn son is 10, and tells S this fact. In fact, S has put nothing in the box at all. In 2000, B and his son open the empty capsule on the son's 10th birthday, only to find the capsule is empty. B sues S in 2003. Result?
Yes. The general rule is that UCC Sales of Goods have a 4 year Statute of Limitations. A cause of fraud accrues when P detrimentally relies. Here, that would be in 1990, at the time of sale. However, actions based on fraud may also be brought within two years after the fraud was, or should have been discovered. B discovered the fraud in 2000. The claim was more than two years after the discovery of the fraud, in 2003. So the claim is barred.
Bank loans A $10,000 on January 1st, 1990. A goes into default, and Bank starts pestering him to repay. On the phone in 1993, A promises to repay the debt, but never does so. Bank brings a lawsuit in 2000. Result?
The default SoL applies, which is six years. However, a promise to repay the debt starts the statute of limitations anew. Thus the promise in 1993 starts a new six year period. However, here, the bank still failed to bring a claim within 6 years from 1993, so claim is barred.
A sues ABC Inc. for negligence on 01/01/2000 when a crane drops the ball on him while strolling down the street. The trial lasts for 1.5 years, and ends on 06/01/2001 with a judgment of $100,000 for A. ABC Inc. pays the judgment on 06/15/2001. The crane was sold by XYZ Inc. to ABC Inc. on 01/01/1990.
On 06/10/2007, ABC Inc. realizes it was actually the negligence of XYZ Inc., the seller of the crane, that caused the injury, and promptly files an indemnity claim on the same day.
(1) Indemnity claim proper?
(2) Additionally, could A have sued XYZ Inc. for breach of warranty?
(1) An indemnity claim against a mfr has a six year statute of limitations. The relevant start date is NOT the date of injury, nor the date when the judgment issues, but the date of payment to the plaintiff. So the claim is not barred.
(2) A could not have sued XYZ for breach of warranty. Breach of warranty has a 4 year statute of limitations from the date of tender. Tender here was in 1990, so A cannot bring a breach of warranty claim in 2000. A could have brought a negligence claim, however.
A catholic priest rapes a 12 year old boy on Jan 1, 1990. No one believes the boy, and the priest is acquitted of criminal charges on Mar 1, 1990. The boy brings suit for a civil claim of battery on August 1, 2000. Proper?
No. A rape victim generally gets 5 years from the date of the incident OR the date criminal trial is resolved (even acquittal). However, neither of these timelines would work for the boy here, as that would take him only to 03/01/95.
HOWEVER, the boy was a minor so the SoL is tolled until he is 18. Then the boy gets 3 additional years from that date. Thus the boy may bring suit up until his 21rd birthday. In 2000, he would be 22, so the suit is beyond the SoL period and the claim fails.
What is the statute of limitations for suing a school district?
Tort claims against a city, town, village, fire, or school district must be brought within 1 year and 90 days. Notice must also be served on the defendant within 90 days after the claim accrues.
A viciously batters B on 01/01/1990. A dies on 10/01/1990. B sues A's estate in a civil suit on 03/01/1991. Proper?
Yes. The usual SoL for a battery claim is 1 year as an intentional tort. But the death of a defendant tolls the SoL for 18 months. Thus, suit is proper.
Who can serve litigation papers?
A person over 18 that is not a party to the action.
What are the various methods for service of process?
(1) Personal delivery
(2) Leave and Mail (delivery to one of suitable age at place of biz or dwelling place AND first class mailing to last known residence or place of business)
(3) Service upon designated agent
(4) Nail and Mail (only proper if Leave+Mail and Personal delivery are not possible with due diligence)
Is personal service proper on a defendant that is aged 15?
Yes. Age 14 or over, personal delivery is ok.
How does P serve litigation papers to a NY Corporation?
Delivery to officer, director, manager, cashier, assistant chasier, or authorized agent. Can also deliver to the secretary of state in Albany, provided two copies are sent.
ABC Inc. is a Delaware corporation that is not registered in NY. How does one serve process?
Serving the secretary of state AND mailing a copy to an officer of ABC Inc.
When are domestic corporations and authorized foreign corporations not amenable to in personam jurisdiction in NY?
Never. They are always subject to jurisdiction.
What is "Doing Business" jurisdiction?
It is a "general jurisdiction" PJ theory by which unauthorized foreign corporations submit to PJ because they have in-state activity that is sufficiently substantial. The activity must exhibit permanence and continuity.
A batters B in a bar in Albany, NY. A owns property in NY and has family in NY, but A takes a 3 month vacation to Toronto. B's process server serves litigation papers in Toronto. Is A subject to PJ in NY?
Yes. a NY domicilliary is always subject to PJ.
What are the various bases of jurisdiction via the Long Arm Statute?
(1) Transaction of Business Within NY: transaction of any business, including a single isolated act.
(2) Tortious Act in NY
(3) Defamation Declaratory Judgment: That the foreign judgment for defamation is unenforceable in NY. Allowed to the fullest extent of the US Constitution.
(4) Tortious Act outside of NY with effect in NY: (1) D does or solicits business in NY (2) reasonably foreseeable consequences in NY
(5) Ownership of NY realty, if cause of action pertains to realty
(6) Matrimonal Actions (eg support agreements)
Billy Bigbucks owns a porsche in Connecticut. Billy has never been to NY and doesn't plan on going. However, Timmy Thief has other plans. One morning, Billy negligently leaves the car unlocked and leaves the key in the ignition. Timmy walks by Billy's driveway, hops in the car, does a joy ride in NY. While speeding, Timmy crashes into a group of schoolchildren out for a field trip. The parents sue, only to find Timmy indigent and without assets. They thus want to sue Billy Bigbucks. Can they get PJ?
No. A nonresident owner can only be subject to PJ if the vehicle was being used or operated in the state for the owner's business or with the owner's permission.
D defames P online on a California website, with foreseeable harm in NY. D does not partake in any business in NY. However, D owns a couple pieces of real estate in upstate NY. Could P still obtain PJ?
YES. D is not subject to long arm jurisdiction, because D does not "do or solicit business" in NY.
However, Quasi-in-rem theory is still valid in NY. Provided D has enough minimum contacts to comport with the United States Constitution, PJ is still proper even though D is not subject to the long-arm statute, because D's property provides an additional basis for jurisdiction.
Here, there are enough minimum contacts for the Constitutional standard. This is because D's tortious act, while outside of NY, had foreseeable harm in NY. So D is subject to PJ.
P sues D for a battery that happened in New Jersey in New York Supreme Court. D has never been to NY and has no contacts with NY. D raises an affirmative defense of self defense in his answer. The answer is silent on jurisdiction. Has D waived his jurisdictional objection?
What are the rules for venue for suits pertaining to real estate?
Real estate actions must be filed in the county where some part of the realty is located
What are the rules for venue for non-realty actions?
Any county where one party resides, unless it is a suit against a municipality or county, in which it should be in the geographically appropriate forum.
Individuals: their domicile
Corporation: principal place of business
partnership: principal office or partner residence
What is the doctrine of permissive joinder?
P or Ds may be joined if there is a common question of law or fact that will arise, and that common question arises out of the same transaction or series of transactions.
P sues D in NY Supreme Court. D sues T as a third party complaint, to indemnify T. P would like to assert a claim against T. How long does P have to amend the original complaint to incorporate the claim against T?
P has 20 days in this situation.
Does NY allow contribution for contract claims?
No. Contribution is a tort-law specific doctrine.
What is contractual indemnity?
When one party contractually agrees to indemnify another against all claims arising from the subject matter of the contract. Insurers can be made third parties by their insureds in actions against the insureds.
P sues D1 and D2 for negligence. Before the verdict, P settles with D1 for $50,000. The verdict comes back for $200,000; D1 and D2 are 50% at fault each. What result?
P gets to keep the 50k from D1.
D2 must pay 200k-100k = 100k. This is because D2 gets an offset, the greater of (1) settlement to D1 and (2) D1's equitable share
P thus gets 150k total, 50k from D1 and 100k from D2
P sues D1, D2 and D3 for negligence. P settles with D1 for 500k and D2 for 250k. The verdict comes back at $1,000,000. D1 is 20% at fault, D2 is 30% at fault and D3 is 50% at fault. What result?
P gets to keep the 500k from D1.
P gets to keep the 250k from D2.
the "release statute" mandates AGGREGATION of D1 and D2 settlements and faults before calculation of the offset. The two potential reductions are: (1) 500k+250k OR (2) 20%+30%=50% = 500k. Here, category 1 is bigger.
Thus, P gets 250k from D3.
P sues D1 and D2 for negligence leading to personal injuries. P wins 100k in economic damages and 1000k in pain and suffering. D1 is 30% at fault, and D2 is 60% at fault; P is 10% at fault. D2 is judgment proof, so P seeks to satisfy the full 1100k of damages from D1.
(1) What must D1 pay?
(2) Would D2 be able to seek contribution from D2 five years from the date of payment? If so, how much?
(1) In a personal injury claim against multiple defendants, a defendant found less than 50% liable for the overall harm need only pay his fair share of non-economic damages.
Here, D1 is only 30% at fault, which is less than the 50% threshold. So the special rule applies. D1 is on the hook for the full economic damages (100k) , but only 30% of the non-economic damages (1000k). Thus D1's total monetary liability is 400k.
(2) The statute of limitations for contribution is six years from the date of payment. Thus a contribution claim against D2 is proper in five years. D1 can seek contribution on the economic damages that he fully paid for; D2 was 60% at fault, so must pay D1 a sum of 60k.
T dies, leaving a sum of $100,000. X,Y,Z are all potential beneficiaries, depending on interpretation of some ambiguous terms of the will as well as an interpretation of the rule against perpetutities. E, the executor of T's will, does not know who should get the money. What claim should E file?
E should file an interpleader action. Interpleader is available when a stakeholde ris under a conceded obligation to pay certain money but is confronted with conflicting claims. Here, X Y Z all demand the money. The stakeholder can file the action and join X Y and Z as parties. Once X Y and Z are part of the lawsuit, E may move for an order discharging him from the action upon deposit of the $100,000 with the court.
X's complaint only seeks injunctive relief. X is meritorious at trial, but substantive law dictates an injunction would not be appropriate. May the court issue damages instead, even though X did not plead damages?
May a plaintiff's lawyer use the dollar figure at stake in his closing argument?
What is the difference between an "answer" and a "reply"?
An answer is a response to a complaint. A reply is a response to a counterclaim. A reply may not contain a counterclaim; counterclaims are reserved for answers.
Does a cross-claim need to arise from the same transaction or occurrence as the initial claim?
No. Cross claims can be unrelated to the plaintiff's suit.
What is the effect of failing to plead an affirmative defense in an answer or reply?
It is waived.
What is the difference between an ex parte motion and a motion on notice?
An ex parte motion is a motion directly to the judge. It is available only through express authority (attachment, restraining order) or necessity (service by publication). The default is a motion on notice.
A motion on notice provides the other party with the place, date, time and papers on which the motion is based, the relief demanded, and the grounds.
How does a plaintiff amend pleadings?
Plaintiff gets one freebie. It can be 20 days after original pleading, before the time to reply has expired, or within 20 days after service of the response. Leave to amend, however, should be freely granted by the court.
What defenses or bases must be brought in the pre-answer motion to dismiss, or they will be waived?
(1) Documentary evidence defenses
(2) Want of capacity to sue
(3) Another action between the same parties on the same claim in another court
(4) Affirmative defenses: arbitration/award, collateral estoppel, discharge in BK, infancy, payment, release, statute of limitations, statute of frauds
(5) Counterclaim not properly interposed
(6) Lack of in personal jursidction
What bases for a motion to dismiss are possible at any time in the lawsuit?
(1) Failure to state a cause of action
(2) Lack of subject matter jurisdiction
(3) Failure to join an indispensable, necessary party (eg a subordinate mortgage holder)
What is the standard for a motion for summary judgment?
A motion ofr summary judgment is used when the pleadings state a cause of action, but, in reality, there is no genuine issue of material fact required trial and a party is entitled to a judgment as a matter of law.
What is attachment, and for what claims is it proper?
Attachment is a lien on property located within ny. Property subject to attachment includes debts due and any property that can be assigned or transferred.
It is available in any action where the plaintiff demands money judgment, AND either
(1) defendant seems likely to transfer assets out of NY
(2) unlicensed foreign corp, non-domicilliary, etc (other statutory grounds)
When can a motion for attachment be filed?
At any time, before or after the summons. If the order is granted prior to summons, the summons must be served within 60 days after the order is granted.
The motion for attachment, however, is subject to due process concerns. It is likely the potential plaintiff must show facts indicating proper attachment and file a sufficient bond.
The court then orders the sheriff to put a lien on the property, which prevents garnishee from transferring assets out of NY.
What is the difference between "summons and notice" or "summons and complaint"?
These are the two types of litigation papers to start a lawsuit.
summons and notice: just notifiying the D that a lawsuit is happening
summons and complaint: a copy of the actual complaint is included.
D has 20 days to respond if by personal delivery, or 30 days under any other circumstances
What are the factors for a preliminary injunction?
(1) Inadequacy of available legal remedies
(2) clean hands
(3) Likelihood of success on the merits
(4) Injury that is threatened is imminent and irreparable
What is a temporary receivership?
A provisional remedy that has the court take possession of certain property, eg in a foreclosure. Available when there is a danger of removal from the state, lost, material injury, or destruction.
What is a notice of pendency?
A litigation device that can be used to cloud title on real estate and give potential buyers a warning that the asset may be subject to judgment
What are a parties duties pertaining to potential expert testimony?
Disclosure of "reasonable detail" as to the substance of the expert testimony, the grounds of the expert's opinion, and a list of the expert's qualifications
What are the disclosure devices available to parties in discovery?
(2) Discovery of relevant documentary or physical evidence
(3) Request for admission
(4) Demand for address (party, coparty, officers, members)
(5) Physical or mental examination, if in controversy
(6) Written Interrogatories
When is a jury available in civil actions?
Any claim for money damages only. There is also a right to a jury trial in divorce, annulments, partition, and incompetency actions.
What are the requirements for a civil jury in NY?
A civil jury must have at least six individuals, with 5 concurring for a verdict
What is res judicata?
A final judgment on the merits between the same parties on the same cause of action is binding on a future court. Arbitration awards DO HAVE a res judicata effect
What is collateral estoppel?
Issue preclusion. Applies when
(1) Issue is identical
(2) The issue was necessary at the prior proceeding
(3) The litigant had a full and fair oppty to litigate the issue in the prior proceeding
X gets injured by a product sold by D1 and manufactured by D2. X sues D1 under a strict liability theory on 01/01/2000, and the claim is dismissed because on the court's finding of no defect. X then brings a strict liability claim against D2. Is X estopped?
Yes, under collateral estoppel. Even though D2 was not party to the first action, X litigated an identical, necessary issue (defect) and had a full opportunity to litigate. So X can not be successful against D2.
What is the timeline for appealing an order or judgment?
When can a party appeal from the appellate division to the court of appeals?
Only when the Appellate Division makes a FINAL order. IE, there are no interlocutory appeals to the Court of Appeals.
Are interlocutory appeals proper from the Supreme Court to the Appellate Division?
Yes, appeal is permitted for interlocutory judgments to the Appellate Division.
Can the Appellate Division review findings of fact?
Yes, but if it makes new findings of fact, it can only direct an entry of judgment if the original findings of fact were by a JUDGE. If the original findings of fact were by a JURY, it must remand.
What are the grounds for challenging an arbitration award?
(1) Corruption, fraud, misconduct
(2) Impartiality of arbitrator chosen as neutral
(3) Arbitrator has exceeded powers granted
(4) Failure to follow procedural rules.
Is arbitration subject to statute of limitations?
Is arbitration subject to res judicata?
What are Article 78 Proceedings?
Judicial review of quasi-judicial administrative action by an agency
What is the statute of limitations for an Article 78 proceeding?
Does NY respect a default judgment issued by another state?
No. A plenary action must be brought, or a motion for summary judgment in lieu of a complaint. The US Constitution only mandates respect of judgments on the merits
What are the three defenses to enforcement of a foreign judgment?
(1) Lack of jurisdiction
(2) Lack of finality
(3) Lack of on the merits analysis
P gets a judgment in Texas against D for "display of homosexual behavior in public" for the sum of $1500 after a six month long jury trial. NY has a strong public policy in favor of homosexual rights. Does NY need to enforce the judgment in NY?
Yes. Full faith and credit does not allow inquiry into public policy.
How does NY treat foreign country judgments?
Similar to full faith and credit, except under "comity". However, it is slightly less binding than the full faith and credit clause. Public policy defenses may be applicable.
When does interest "kick in" for a breach of contract claim?
The date of the breach.
When does interest "kick in" for a personal injury claim?
The date of the verdict.
What are the consequences for P, when P uses a provisional remedy and D wins?
P must indemnify D for any and all costs if D wins
What is a temporary restraining order?
Its a preliminary preliminary injunction. It is available when a preliminary injunction would cause harmful delay.
You must file for a PI, specify an earlier return date, show cause for a TRO, and serve on defendant.
When may a party obtain a deposition BEFORE the complaint?
A party may obtain a deposition before the complaint when he can show he has a cause of action but he is uncertain as to the details.
A personal injury happens in New Jersey. The statute of limitations in NJ is 2 years. Two and a half years later, plaintiff brings a cause of action in NY with appropriate jurisdiction. Time barred?
The general rule is that the worst-case statute of limitations applies. However, a NY resident plaintiff can obtain the benefit of a longer NY Statute of Limitations period.
If the plaintiff is a NJ or other state resident, the worst case SoL applies. Here, that would be the two year SoL. Thus claim is time barred
If the plaintiff is a NY resident, the NY SoL automatically applies. Therefore, P gets the benefit of 3 year SoL and the action is timely.
What is verification and when is it required?
(1) Verification is a statement unde roath that the pleading is true to the knowledge of the deponent.
(2) Goods and services contracts, co-obligors, 78 proceedings, and a bill of particulars in negligence claim. Additionally, when one pleading is verified, the rest of the pleadings in the action must be verified.
When can the clerk (as opposed to a judge) enter a default judgment?
Only for a "sum certain", such as a contract for the sale of goods at a set price. If the amount of damages is in dispute, need a judge.
Email service of process is valid in Vermont, but invalid in NY. D is served process by email; D is a Vermont resident who has an intent to stay in Vermont. Proper service for a NY cause of action?
No. Out of state defendants must STILL be served using a valid NY method. Since X is invalid in NY, can't use it in other states, even if its ok in those other states.
D has never been to NY. He visits NY, and sees his arch rival, P at the airport. He tells a crowd "P is a liar, and a thief. Be careful of that guy". D then boards a flight back to CA. P sues D in NY Supreme Court for defamation,one month later, serving process on D using "nail and mail" at D's residence. Proper?
No personal jurisdiction here. The "Long arm statute" does not apply to defamation, even if the defamation occurred in NY.
How long must a plaintiff wait to serve D with a notice of production?
For a physical examination, P must wait until D's time to serve an answer has expired (generally, 20 days after P serves).
For documentary notice of production, P can immediately serve. He does not need to give D an opportunity to answer.
ABC Inc. is a NY corporation on the verge of insolvency. P sues ABC Inc. and asks for attachment. Proper?
No, since ABC Inc. is a domestic corporation, and there are no facts to indicate ABC is wasting assets, sneaking assets out of NY, etc., attachment is not proper.
Is receivership proper for a money damages claim?
No. Actions solely to recover sums of money are excluded from receivership remedy. Generally, P must also point to specific property or subject matter.
P sues D for personal injuries caused in a car accident. D cannot be found in the state, and P has been unable to serve process. P asks the court for a receivership in Blackacre, D's vacation property located in NY. Proper?
No. This is a money damages claim, so receivership is not appropriate. However, P could obtain attachment, since P has been unable to properly serve D, one of the statutory bases for attachment.
D moved to California in 2010, but forgot to update his license, and thus is still has a NY license. D lived in NY for 30 years. D hit P in a car accident in California in 2010. P sues D in NY supreme court. PJ over D?
No PJ. These are not enough contacts for the NY long-arm jurisdiction, since the harm occured in another state.
What is the legal standard for tolling SoL in a legal malpractice claim during a continuous representation?
Tolls when represents on the same specific matter that gave rise to the malpractice claim. Specifically, this occurs only when there is a mutual understanding of the need for further representation on the subject matter underlying the claim.
L represents C on a matter from 2010 to 2012. After a two month delay, L starts representing C on a separate matter, and the second representation lasts for 3 years, to 2015. Can C sue L for legal malpractice in 2016, pertaining to an injury that occurred in 2011?
No. The matters are separate, so there is no "continuous representation". The bar is very high for that doctrine. Thus, the claim was time barred in 2014.
May a state require state residency for bar examination applicants?
No. Residency requirements would violate the Privileges and Immunities Clause of the US Constitution.
May a state require bar applicants to be a citizen of the United States?
What are an attorney's duties with regard to disciplinary authorities investigating disciplinary matters?
Must not (1) knowingly make a false statement of material fact or (2) Fail to disclose a fact necessary to correct a misapprehension known by the person to be have arisen from the matter
During a disciplinary investigation, does an attorney have the right to invoke the Fifth Amendment protection against self-incrimination?
Which court ultimately institutes formal disciplinary proceedings on the recommendation of the disciplinary committee?
A lawyer licensed in NY and Connecticut undertakes conduct in Connecticut with a predominant effect in New York that complies with the disciplinary rules of Connecticut but violates the disciplinary rules of New York. What result?
If the lawyer is licensed only in NY, the New York RPC applies. If the lawyer is licensed to practice in more than one state, the RPC of the state in which the lawyer "principally" practices applies, unless the conduct clearly has a "predominant effect" in another state where he is licensed.
Here, since the lawyer's conduct had a "predominant effect" in NY, NY rules apply and the lawyer is subject to discipline in NY.
An attorney needs to submit a motion to dismiss for an important matter for a client. Since she is busy, she tells a paralegal to do some legal research, write up the motion, and submit the motion directly to the court's electronic filing system. What result?
The lawyer is subject to discipline. An attorney is allowed to delegate, but the lawyer must supervise the delegated work carefully and must be ultimately responsible for the result.
Bob has been in the real estate business for 30 years, and owns several rental properties. He would like to sell Blackacre to Sally. Bob drafts a land purchase agreement and calls up his buddy and attorney Andy to ask about the risk of loss provisions in NY. Andy helps him, and then Bob executes the contract. What result?
Andy is subject to discipline. It is impermissible for a lay person to draft land sales contracts. Thus, when Andy helped Bob, Andy assisted someone in the unauthorized practice of law.
Bob, an attorney licensed in NY, lives in Manhattan. His friends Tony and Lisa have been saving up to buy a condo in their hometown of Hoboken, NJ and are ready to buy. Bob hops on the PATH and drafts up a land sale contract for them in Hoboken. What result?
Bob is subject to discipline. A lawyer engages in the unauthorized practice of law by practicing in a jurisdiction where he is not admitted.
What is "pro hac vice"?
When a lawyer is a member in good standing of at least one bar, he can be admitted "pro hac vice" to appear in individual proceedings in other states on behalf of a client.
Bob is a licensed CPA and a licensed attorney in NY. He calls up his friend Charles, a licensed CPA who has been an accountant for 5 years to form a new accounting firm. what result?
Permissible. If the new firm focuses only on accounting, a partnership with a lay person is allowed.
Sally Shoehorn and Rita Rockcrusher are recent graduates of Columbia Law School without jobs. They decide it would be a great idea to start a new law firm in Manhattan, but realize it will be hard to get clients. To fix this, they sign a contract with Chief Justice John Roberts so that they can use his name and image on their website for a price of $20,000 per year. They subsequently name their new firm Shoehorn, Rockcrusher, and Roberts LLP. Result?
Not allowed. Cannot use a name that is misleading as to the identity of the lawyers practicing or a name containing names of lawyers not practicing in the firm.
Quasimodo is a partner in a Manhattan law firm that represents the city in disputes regarding the warranty of habitability in public housing throughout the city. Quasimodo joins the board of directors of Housing Justice, a non-profit that represents indigent tenants suing the city for housing code violations in public housing throughout the city. What result?
Allowed, but the lawyer must not knowingly participate in a decision incompatible with the lawyer's obligations to a client, or where the decision could have amaterial adverse effect on the representation of a client of the org whose interests are adverse to a client of the lawyer.
Patrick is a partner in a Manhattan Law Firm. Al is a junior associate in the same law firm. They jointly represent a client, Chemical Corp, and come to learn that Chemical Corp has been quite misleading in their advertising claims. Al begins telling members of the press about some of the details he is privy to as a result of the representation. Patrick tells him to stop, but Al keeps leaking information covertly. What result?
Al is subject to discipline, but so is Patrick. A lawyer that is a partner in the firm that knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take remedial action is subject to discipline.
Patrick is a partner in a Manhattan Law Firm. Al is a junior associate in the same law firm. They jointly represent a client, Chemical Corp, and come to learn that Chemical Corp has been quite misleading in their advertising claims. Patrick thinks this is immoral, and instructs Al to leak information to the press. Al does so. What result?
Al is subject to discipline. "Following orders" is no defense. A lawyer is bound by the RPC notwithstanding that the lawyer acted at the direction of another.
May a state ban attorney advertising
Not completely. The SCOTUS has held that commercial speech must be allowed but may be limited if regulations (1) serve a substantial govt interest (2) Directly advance that interest and (3) are narrowly tailored to that interest
Quasimodo is a recent graduate of NYU law school who starts Quasimodo LLP. While he was valedictorian of his law school class and is widely considered a brilliant legal thinker, he is quite ugly. He thus seeks to hire Brad Pitt to pretend to be an attorney working at Quasimodo LLP who leads a tense negotiation in the firm's offices for the purpose of a tv advertisement. At the end of the commercial, a small note appears that says actors were used to portray members of the firm. What result?
Permitted, as long as the use of actors is disclosed in the advertisement.
Sally recently scored a big victory for her client Goldman Racks. She calls up the CEO of Goldman Racks and asks if she can mention the victory in a new radio ad. The CEO says its fine. She creates a radio ad stating "Hire Sally. She recently won big for Goldman Racks, and she can win big for you too!". Result?
Subject to discipline. Must have client's written consent. Additionally, cannot imply that potential clients "can win big too", improper advertising.
Quasimodo is a recent Columbia Law grad who is without employment. He can live off his trust fund for a while, so he figures the best course of action is to start representing people for free to build a reputation. Quasimodo starts calling 20 random Manhattanites per hour offering to represent them in any legal matter for free. Result?
A lawyer who volunteers to represent someone without a fee is not subject to dscipline for solicitation.
50 people died on February 1st when the Staten Island Ferry crashed. On March 15th, Bob, a licensed attorney, sends a brochure to the victim's families advertising his firm's success and expertise in personal injury litigation against the city of NY. What result?
Permissible. Unsolicited communications are permissible after 30 days from a personal injury or wrongful death incident.
Who may be solicited by telephone?
Close friends, relatives, former or current clients
Bob, a licensed trusts and estates lawyer, comes to learn that Michael Jordan recently became estranged from his wife. He thinks that his partner Joe would be a great choice for divorce attorney. Bob thus sends Michael a brochure advertising the firm's experience in the area of divorce law. The brochure does not specify who will do the work. Result?
Permissible. A lawyer usually must disclose that the legal services necessary to handle the matter will be performed primarily by another lawyer. However, this is allowed if the competent lawyer is a partner, associate, or counsel of the firm.
Bob, a trusts and estates attorney, decides that it will be a great way to drum up business to host an educational seminar about the benefits of revocable lifetime trusts at a local nursing home. He hosts the seminar, and after his speech, many nursing home residents approach him and retain him for their estate planning matters. Result?
Permitted. A lawyer may accept employment that results from participation in activities designed to "educate the public to recognize legal problems, to make intelligent selection of counsel, or to utilize available legal services".
A group of antitrust lawyers in NYC decide that they should really get together and make a new organization that will certify attorneys as experts in Antitrust law through a "Certificate of Antitrust Expertise". They create a mini "antitrust bar exam", require 3 years of Antitrust practice, and allow anyone to apply for a fee of $300. The group members then start listing "Certificate of Antitrust Expertise" on their biography pages. What result?
Not allowed, unless the certification (1) has been approved for that purpose by the ABA, (2) the certifying organization is identified,(3) and the lawyer states the org has no affiliation with the government, the certification is not necessary for practicing that area of law, and that the certificate does not necessarily indicate greater competence of certified lawyers in that practice area.
What is the minimum suggested amount of pro bono hours per year?
When are concurrent conflicts allowed?
(1) reasonably believes can competently represent both (2) representation not prohibited by law (3) does not involve the assertion of a claim by one against the other (4) each client gives informed consent in writing.
Can a lawyer enter into a joint venture with a client?
Only if (1) fair and reasonable terms to client that are fully disclosed in a reasonable way (2) client is informed in writing of the desriability of seeking the advice of independent counsel (3) client gives written informed consent
Bob prepares a will for his brother Bill. In the will, Bill leaves Blackacre to Bob. What result?
A lawyer must not prepare an instrument giving the lawyer or a person close to the lawyer "any substantial gift". However, there is an exception when the lawyer is related to the donor, so it is ok
Johnny is a high school junior who is being sued for assault. Johnny's parents hire Bob to represent him, on the condition that the parents have full access to all files regarding the case. Bob accepts. What result?
A lawyer must not allow a 3rd party to pay unless (1) client gives informed consent (2) there is no interference with prof judgment and (3) info relating to representation of a client is protected. Here, the info is not protected, so Bob is subject to discipline.
Johnny is a renowned criminal defense lawyer. Bob is recently charged with murder of his wife, and calls up Johnny. Johnny offers to defend him under a contingency fee arrangement, where Bob will pay $300,000 if found not guilty or $0 if found guilty. Allowed?
No. Reasonable contingency fees are only allowed in civil cases.
Bob starts representing Sally in her dispute with the IRS. Sally stops by after hours one day to meet with him about the matter. Sally then seduces Bob and they have sex. What result?
A lawyer may have sex with a client as long as its not a domestic relations matter. Permissible.
Can a lawyer ever negotiate a media rights contract based on a client representation before the conclusion of the matter?
Alpha and Beta are in a terse ongoing battle for the widget marketplace. Charlie regularly represented Alpha while at Firm X during tort litigation 5 years ago. Now, Charlie moves to Firm Y, where he represents Beta in an employment and labor dispute. Permissible?
A lawyer may not represent another client "in the same or a substantially related matter" if the interests are materially adverse to the interests of the former client, unless the former client gives informed written consent. Here, the matters are not "substantially related", so permissible.
Alpha and Beta are in a terse ongoing patent litigation battle. Charlie regularly represented Alpha while at Firm X during tort litigation 5 years ago. Additionally, Charlie regularly met with the patent litigation team at Firm X where they discussed trial strategies and tips as well as pertinent client information. Now, Charlie moves to Firm Y, where he will join Firm Y's patent litigation team representing Beta. Permissible?
A lawyer may not represent a person without written informed consent in the "same or a substantially related matter" in which " a firm with which the lawyer was formerly associated" represented a client (1) whose interests are materially adverse and (2) about whom the lawyer had acquired material information protected by the RPC.
Here, since Charlie was privy to confidential information while at Firm X regarding Alpha, his representation of Beta is permissible
Does a lawyer have a duty of confidentiality with prospective clients?
Yes. a lawyer must not use information learned in the consultation. A lawyer must not represent a client with interests materially adverse to those of a prospective client if the lawyer received info that could be "significantly harmful".
May a lawyer take on a matter where he is likely to testify?
Generally, no. And if the need arises, the lawyer should withdraw. The exceptions are (1) uncontested issue (2) testimony concerns only nature and value of services rendered (3) substantial hardship to the client because of the distinctive value of the lawyer
When representing a corporation, should a lawyer ever report info to outsiders regarding wrongful conduct?
If goes up the chain of command and no one does anything, the lawyer is allowed to "report the relevant information to appropriate persons outside the organization" if "reasonable believes" necessary to prevent substantial injury to the organization
A lawyer finds out his corporate client is violating SEC rules. He reports it to the CLO and to the entire board. No one does anything. What are his duties at this point?
He "may" report the pertinent confidential information to the SEC. It is not a must.
Alpha and Beta are in an intense patent litigation dispute. Charlie was the only attorney working at Firm X who represented Alpha and was the only attorney who obtained confidential information from Alpha. Charlie then quits for Firm Y. Other attorneys at Firm X begin representing Beta on the same dispute. Result?
Permissible, as long as no one at Firm X was "infected" by Alpha's confidential information.
When can a lawyer represent a private client in connection with a matter in which the lawyer participated as a public employee?
Only with informed written consent by the appropriate govt agency
What are the requirements for a retainer agreement?
Written retainer req'd if fees over 3k. Must include (1) scope of services provided (2) explanation of fees/expenses/billing (3) notice of client's right to arbitrate
Sally would like to sue McDonalds in tort when the employees took hot scalding coffee and dumped it all over her three babies while she was eating in the cafe area. The entire incident was on video and there were ten eye witnesses. Damages will likely be over $500,000 and legal expenses will only be around $5,000 due to the weight of the evidence. She signs a contingency fee with Bob who will take 1/3. Permissible?
Yes. as long as Bob gives her an informed choice as to fee arrangement.
Who "owns" the attorney client privilege?
The client, who can prevent the attorney from testifying against him.
Bob represents Alpha Corp. Sam, an accountant at Alpha Corp, runs into Bob at the pub after work. Sam tells Bob about all the embezzlement happening at Alpha Corp. Govt investigators seek to call Bob to testify at trial against Alpha Corp. result?
Bob does have a duty of confidential information w/r/t Sam info, but NOT A/C privilege. A/c privilege only applies if the employee "communicates with the atty at the direction of a superior".
For the duty of confidentiality, there is a "may disclose" exception for complying with a court order. Thus, the professional code does not mandate Bob testifies, but does permit him to do so.
Bob represents Alpha corp in a negligence dispute. Alpha has a smoking gun document proving their wilful negligence. Alpha doesn't want the other side to get the document, so gives it to Bob. Other side makes pertinent discovery requests, but Bob does not send the doc due to a/c privilege. Result?
Bob is wrong. A/C privilege only applies to communications. Sending a doc to an attorney does not give A/C privilege.
What are the exceptions to the duty of confidentiality?
(1) necessary to prevent substantial bodily harm (2) necessary to prevent client from committing a crime or fraud (3) required by court order, ethics rules, or statute (4) necessary to establish a defense in a fight between lawyer and client (5) defense to a criminal charge against the lawyer base don conduct in which client was involved (6) necessary to respond to allegations in a proceeding concering the representation (7) necessary to obtain ethics advice.
Who makes the decision to settle, lawyer or client?
Who makes the decision to file a motion to dismiss, lawyer or client?
Who makes the decision to waive a jury trial, lawyer or client?
A client approaches Bob and asks about the consequences of lying on IRS tax forms. Bob tells the client about several strategies for defrauding the IRS. result?
Impermissible. Bob must not tell the client "how to break the law and get away with it".
Alpha corp recently dumped chemicals into the water supply. Bob rushes to Alpha's HQ and starts interviewing Alpha's janitors (who had nothing to do with the chemical dump) about the chemical dump as they are walking to the pub after work. Result?
Permissible. A lawyer must get the consent of corporation's counsel before interviewing:a person who supervises or consults with the org's lawyer (2) a person with authority to obligate the roganization with the matter (3) a person whose act or omission in connection with the matter may be imputed to the org for purposes of liability. Here the janitors do not have anything to do with the matter, so its ok.
Can a lawyer interview an unrepresented person?
Yes, as long as the lawyer does not state or imply he/she is disinterested. The lawyer must also make reasonable efforts to correct any misunderstanding as to her role in the matter. If the lawyer knows of a possible conflict of interest between the client and the unrepresented person, the lawyer may only advise the unrepresented person to obtain counsel.
Must a lawyer disclose adverse persuasive authority from other jurisdictions?
No, a lawyer need only disclose adverse controlling law.
Must a lawyer correct a false statement of fact made by a witness?
Yes. The duty of candor requires the lawyer take reasonable remedial measures, even in a criminal case. The lawyer may even need to disclose confidential information, if necessary.
What are a lawyer's duties if a client confesses to false testimony after a case is over?
No duties. Must maintain confidentiality.
Can a lawyer advise a witness to flee the jurisdiction?
No. A lawyer shall not advise a person to hide or leave the jurisdiction for the purpose of making the person unavailable as a witness.
What are a prosecutor's special duties?
(1) Cannot make charges not supported by probable cause and (2) Must make timely disclosure of all evidence known to be exculpatory
When is lawyer withdrawal mandatory?
(1) violation of RPC (2) Lawyer's physical or mental condition impairs representation (3) Lawyer is discharged (4) Client is acting to harass or maliciously injure another
When is withdrawal permissive?
(1) Lawyer believes client is criminal (2) Services used to perpetrate a crime (3) Client takes action lawyer finds repugnant (4) Unreasonable financial burden on the lawyer (5) Other good cause
What are the six primary characteristics of corporations?
Entity Powers: Contracts, Property, Criminality
Centralized Management in a Board of Directors
Continuity of Existence
Free transferability of ownership
Managers authority to act derived from BCL
What is a corporate promoter?
a person who solicits people to invest money into a corporation, usually when it is being formed. An investment banker, an underwriter, or a stock promoter may, wholly or in part, perform the role of a promoter
When is a promoter liable for pre-incorporation contracts?
liable for contracts he enters into on behalf of a proposed corporation unless (1) the parties intended to bind the corporation only or (2) A novation has occurred
How many incorporators are required?
One or more natural persons, age 18 or older, may act as incorporator.
What is the certificate of incorporation?
A certificate of incorporation is a legal document relating to the formation of a company or corporation. It is a license to form a corporation issued by state government.
What elements are required in the certificate?
The name of the corporation (must include Corp, limited, etc)
Purpose of the corporation (potentially "any lawful purpose")
The county in NY where the corp will be located
Number of authorized shares w/ description (#, par value, classes)
Designation of the secretary of state as agent for service of process
Name of the registered agent (optional)
Duration of the corporation
Limitations on directors' liability to shareholders
May a corporation be formed purely to avoid liability?
Yes, unless attempting to defraud prior creditors
How does a plaintiff "pierce the corporate veil"?
Defendant exercised complete domination over the transaction AND
Domination was used to commit a fraud or wrong against the plaintiff (also known as: defendant abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice)
Several factors are used:
(1)A failure to adhere to corporate formalities
(2) Inadequate capitalization for prospective liabilities
(3)Commingling of personal and corporate assets
(4) Use of corporate funds for personal expenses
May a corporation make a political contribution?
A maximum of $5,000 per year is permitted
Can shareholders have management powers?
Only in a closely held, or non-public, corporation
What is the required frequency of shareholder meetings?
A corporation must have an annual meeting of shareholders.
What notice is required for shareholder meetings?
Not less than 10 and not more than 60. The notice must state the place, date, and hour of the meeting. Notice must be given to each shareholder entitled to vote, personally or by mail.
Who can vote at shareholder meetings?
Every shareholder "of record" is entitled to vote for each share held. The "record date" must be not less than 10 or more than 60 before the meeting. If no date is specified, the default is close of business of the day preceding the notice date.
May shareholders authorize proxy voting?
Yes. Proxies may be given by written or electronic means. They are valid for 11 months.
What is a quorum of shareholders?
A majority of the votes of the voting shares. A lesser quorum can be specified in the certificate or in the bylaws, but must be at least 1/3. A greater quorum can be specified ONLY in the certificate.
How many votes are required for director election?
The default rule is plurality, unless the certificate or bylaws provide otherwise. Each shareholder gets one vote for each seat, but can only vote for each candidate once.
May the certificate or bylaws require a higher percentage of votes for corporate action?
Only the certificate.
What is cumulative voting?
Each shareholder gets as many votes per share as there are director seats being contested. The shareholders can spend them anyway they want (eg all for one candidate) Candidates getting the most votes win.
May shareholders look at the minutes and/or record of shareholders?
Yes, but may be required to submit an affidavit that his purpose is not against the corporation and he has not tried to sell any list of shareholders.
Do shareholders ever owe a duty of care to other shareholders?
Generally, no. But a controlling shareholder owes a fiduciary duty to minority shareholders.
What rights do other shareholders have when a controlling shareholder sells his shares at a control premium?
Can the board of directors amend the bylaws?
Yes, if provided for by the certificate OR other ylaws adopted by shareholders.
What controls, the certificate or the bylaws?
The certificate controls.
What are the requirements for being a director?
The certificate or bylaws can add requirements, but the default is only that the director must be 18 years old.
Are restrictions on the board's management authority permissible?
Must be in the certificate
All shareholders of record must have authorized
All subsequent shareholders have notice
No shares are publicly traded
How can a director be removed for cause?
S/H: majority vote
Board: pursuant to certificate or bylaw adopted by S/H. Board can never remove a director in a "classified board" system.
What is the quorum of the board of directors?
A majority is the default rule (1/3 minimum). interested directors may count toward a quorum.
What is the required vote for corporate action by the board?
A majority of the directors present generally.
When can a director take action on behalf of the corporation?
A director can bind the corporation on normal contracts. Extraordinary contracts require "actual authority", or a formal board meeting.
What constitutes a formal board meeting?
Proper notice for directors meeting (not required for "regular" meeting)
A quorum was present
A majority of directors approved the action.
What are corporate officers?
Individuals that have authority to act for the corporation, appointed by the board of directors. President, VP, Secretary, Treasurer, etc. Agency law determines authority and powers of officers.
What is the duty of care for directors and officers?
Good faith and a degree of care that an ordinarily prudent person would exercise in similar circumstances.
May rely on reports, opinions, and statements prepared by the officers or employees.
Business judgment rule provides a safe-haven if directors acted in good faith on available information.
What is the approval test for interested director transactions?
not voidable if:
The board approves the action by a sufficient vote NOT counting interested directors
Board approves the transaction by unanimous vote of disinterested directors
OR s/h approve the transaction by vote
Are interested director transactions automatically invalid, even if they fail the approval test?
No. If the interested directors establish the transaction was "fair and reasonable" to the corporation, the transaction stands.
Additionally, interested director transactions are only VOIDABLE by the corporation, not VOID.
What is the corporate opportunity doctrine?
D/O may not acquire property or opportunities that the corporation is seeking, or which the corporation has a tangible expectancy, or which there was a duty to acquire for the corporation.
Once the corporation refuses the opportunity, it is fair game.
May a corporation bind its agents with covenants to not compete?
Sure, but a corporation may not impose a non-compete clause unbounded by time or geography, that deprives one of the opp to earn a livelihood
(1) reasonable geographic scope
(2) reasonable duration
(3) reasonable business justification
Can a director sell his board seat?
When is a director found to "not concur" with invalid corporate action?
(1) dissent entered into the minutes OR
(2) written dissent is presented to the secretary of meeting before its over OR
(3) written dissent is delivered or sent by registered mail to the secretary promptly after adjournment.
In all cases, must not have voted for the action.
How does a director or officer take advantage of a corporate oppty?
(1) First, determine corp is interested
(2) Disclose oppty to the board, disclosing all material facts
(3) Corp rejects.
When "may" a corporation indemnify director liability?
(1) director has NO liability (must indemnify)
(1) Reasonable expenses in defense of suit brought by corp
(2) D was in good faith for purpose in best interests of corp
(3) AND in a criminal case, no reasonable cause to believe unlawful
May a corporation indemnify a director's legal expenses when the director acted in bad faith?
Who may bring a S/H derivative suit?
A record holder of shares in possession at both (1) time action is brought and (2) time of complained-of transaction. Someone who comes into shares "by operation of law" (will/divorce/etc) also qualifies.
What are the requirements for a S/H derivative suit?
(1) corporate right to procure judgment in corp's favor
(2) Plaintiff gives security for reasonable expenses (unless major shareholder)
(3) Particularity in the effort to secure initiation of action by the board or that it would be "futile" to secure action by the board
--A majority of board interested
--Board did not inform themselves about the transaction "to the extent reasonably appropriate"
--Transaction was so egregious that it could not have been the result of sound business judgment
What is par value?
The par value of a share of stock is the value stated in the corporate charter below which shares of that class cannot be sold upon initial offering; the issuing company promises not to issue further shares below par value, so investors can be confident that no one else will receive a more favorable issue price
What are the minimum share voting requirements?
At least one class of shares must have unlimited voting rights and at least one class of shares must have unlimited dividend rights
What is stated capital?
Sum of (1) consideration for par shares (2) consideration for no-par shares and (3) amounts transferred to stated capital from surplus
How may stated capital be reduced?
(1) revoking prior transfers from surplus to stated capital
(2) reducing "excess" consideration for par or no-par stock
(3) applying proceeds from authorized purchase/redemption/etc
How is consideration provided for shares valued?
Definitively by the board (eg value of Blackacre)
What are preemtive rights?
S/H has a preemtive right to purchase a sufficient # of shares to maintain their ownership percentage. Modern rule: No PR unless expressly granted by certificate
When must dividends be declared?
Never. Directors have discretion when and to what extend dividends will be declared.
What are preferred shareholder rights with respect to dividends?
Preferred shares are entitled to stipulated dividends before the rest of the dividends are paid to common shares.
Who is entitled to dividends?
S/H of record on a date sooner than 60 days before payment. Default is the date of resolution to pay dividend.
When is a corporation prohibited from paying dividends?
When the corp is insolvent or payment of dividend would make it insolvent (defrauding creditors)
Are restraints on share alienation valid?
Yes, if reasonable. Examples include requiring S/H to offer shares to corporation first or to other shareholders first. If alienation requires S/H vote without restriction, probably invalid.
When is shareholder authorization required for an amendment to the certificate?
(1) changes in supermajority voting (2/3 reqd)
(2) restrictions on mgmt authority (100%)
(3) provisions for dissolution (100%)
(4) amendment affecting a given stock class (majority of that class)
What are appraisal rights for amendments to certificate?
Adversely affected S/H who dissent are entitled to FMV of their shares if (1) alters/abolishes existing preferential right (2) changes concering redemption of shares (3) alters preemptive rights (4) alters voting rights.
What are the three requirements of mergers?
(1) board approval
(2) s/h approval (modern: majority)
(3) filing with dept of state
What is a short form merger?
Parent owns 90% of subsidiary..can readily merge w/o authorization of S/H
What are appraisal rights for mergers?
S/H who does not assent gets FMV except (1) short-form, surviving corp shareholders (2) surviving S/H where merger does not affect certificate (3) holder of shares listed on a national exchange
What are requirements for the sale of all assets?
S/H approval...majority of s/h vote
How is tort liability of an acquiring company affected when the corporation purchases new corporate assets?
The acquiring corp is not liable for torts of predecessor unless (1) express or implied assumption (2) there was a merger (3) purchaser was mere continuation (4) fraud
How do shareholders obtain voluntary dissolution?
Voluntary dissolution requires approval of majority of all outstanding shares entitled to vote (after 1998). before, 2/3. Consent of tax commission is required.
What is judicial dissolution?
Cause of action brought by AG, majority of board, majority of shares.
Proper if there are inssufficient assets to discharge liabilities, or dissolution will be beneficial to shareholders.
When is dissolution appropriate under "special circumstances"?
20% of voting shares can petition for dissolution if (1) directors are guilty of illegal/fraud/oppression OR (2) assets are being looted/wasted/diverted
What is different about voting on "fundamental corporate changes" as opposed to usual shareholder action?
The requirements (eg majority) apply to ALL shares, not just the shares present at the meeting to form quorum
What is different about professional corporations?
Cannot limit liability for malpractice. Additionally, certificate must state the profession to be practiced, all directors must be licensed, and includes copies of the license certificates of the professionals.
Can a professional corporation engage in more than one profession?
No. Must be one profession.
What can a professional corporation be called?
Same limitations as partnerships. Eg cant call it "Super Duper Law Firm Inc."
ABC Inc. is a closely held corporation with X at 40%, Y at 40%, Z and 20%. X,Y, and Z dutifully hold board meetings, keep the assets of the corporation separate, and sufficiently capitalized ABC Inc. when the corporation started. ABC Inc. has 10 employees, who are each paid a salary of $120,000 per year. ABC Inc. also took out a loan for $50,000 from Bank B.
ABC Inc. later gets into financial trouble, and is unable to pay its employees wages for a period of six months. The employees then sue X, Y and Z. The Bank also sues X,Y and Z. Result?
Generally, corporations create a shield of liability for the shareholders. However, in a closely held corporation, the shareholders are personally jointly and severally liable to employees for wages.
Since no factors allow a PCV, the banks claim will fail.
However, as to the employees, X Y Z are jointly and severally liable.
ABC Inc. has had a great reputation in the past, but its clear that its focus on landline telephones is running it into the ground. The directors think ABC Inc. should be dissolved, because it would be for the benefit of the shareholders. After a majority director vote, they file for Judicial Dissolution. Proper? What is the standard?
Yes. A majority of the board is sufficient for initiating a judicial dissolution procedure. The corporation will be dissolved if either (1) Assets can not meet Liabilities or (2) it would be in the benefit of the shareholders.
May a CEO have his corporation sue another corporation for breach of contract?
Yes. By default, starting a lawsuit is within the "apparent authority" given by the board to the CEO. If the bylaws, certificate or board agreement state otherwise, the CEO cannot start the lawsuit. But by default, this action is within his apparent authority.
Promoter signs a contract to buy 1000 widgets a month for ABC Inc. before ABC Inc. is officially incorporated. ABC Inc.'s incorporation documents are silent w/r/t adopting the contract, but ABC Inc. does accept the first few shipments of widgets. Must ABC Inc. honor the rest of the contract?
Yes. Generally, the corporation is not liable for preincorporation contracts. However, if it expressly or impliedly assumes the contract, it will be liable.
Here, while there was not express assumption of the contract, there was implied assumption because the corporation accepted the goods.
Does NY allow a lawsuit for breach of contract to marry?
H and W live together and have a physical relationship, but don't intend to marry. Contracts enforceable?
Common law: no, living in sin.
Modern: express agreement is enforcable, as long as no part of the consideration is sex. No implied contracts
Premarital Contracts are?
Prenuptial contracts about what will happen if the marriage fails. Contingent planning document.
Scope: almost anything permitted.
Rule: can't contract to relieve liability to support other spouse that would mean the other spouse becomes a public charge.
H and W sign prenuptial contract. H and W divorce. W sues saying that is invalid, and W wants more money than says in contract. What result?
(1) in writing
(2) signed by both
(4) couple actually married
Contracts treated like any other contract. Look for contract defenses...Fraud: perhaps trickery if only one had an attorney, one was sophisticated other was not, etc.
(1) fair and reasonable at the time agreement was made
(2) not unconscionable at the time of divorce
(1) not unconscionable when doc was signed
H and W are unmarried. W is also sleeping with H2. W has a kid. What result?
Nonmarital Child: Same rights as marital children in every aspect of the law (SCOTUS)
BUT Nonmarital Child must prove father.
Methods of proof:
--Acknowledgement of paternity
Filiation proceeding commenced by child, mother, or state of ny
--modern trend of evidence: DNA test. Blood test mandatory by court.
--a court may declare paternity irrespective of biological fatherhood if it is in the "best interests of the child"
What is paternity by estoppel?
(1) Father can be estopped if he acts like the father and the child detrimentally relies. Thus the father would be liable for support, even if not biological father
(2) Mother can be estopped if he acts like the father, but the mother still wants to have the child raised by biological father.
How do you get married in NY?
--see if have capacity to marry
--(1) solemn declaration before (2) officiant and (3) at least one witness
--only need one witness, but needs to be other than officiant
--solemn declaration: some declaration, eg vows. no magic words but must be serious
Who can be an officiant?
anyone who looks important
Is common law marriage allowed in NY?
X and Y are common law married in Nebraska. They move to NY. Are they officially married in NY?
What are the four types of matrimonial actions to void a marriage?
(1) Declaration of Nullity (eg bigamy)
(2) Annulment:Voidable Marriages
What is incestuous in NY?
(1) ancestors (mother/grandmother)
(2) descendants (daughter)
(3) siblings (sister)
(4) lineals up or down one generation (aunt/niece)
first cousins are allowed!
What is an annulment action?
A lack of capacity that makes the marriage voidable is ended upon annulment. EG, H says he is not impotent. W relies, and they marry. H turns out to be impotent. W can file for annulment, provided she did not voluntary cohabitate after learning the fraud.
When can a 16 year old get married in NY?
Consent of both parents.
What are valid grounds for a fraud claim in an annulment?
Material to marriage: drug addiction, impotency, mental illness, prior marital status, intent to have children, religious compatibility, history of prostitution, weird fetish.
What is the statute of limitations for fraudulent marriage?
3 years, even if stop cohabitation
What is physical incapacity?
Safe and normal intercourse. Can't consummate marriage. Only for ppl that save it until marriage.
What is a separation?
Judicial order allowing the married couples to live apart but stay legally married.
This is used for:
(1) pragmatic reasons. benefits etc.
(2) moral or religious scruples
What are the five grounds of separation in NY?
(1) Cruel and Inhuman Treatment
(3) 3 years of imprisonment
(5) Failure to support
What are the elements of abandonment?
(2) w/o consent of spouse
(3) w/o justification
(4) no intent to return
also, constructive abandonment: refusal to have sex, silent treatment, etc.
H and W are married. H has anal sex with the family dog. W moves for a separation on a theory of adultery. What result?
Fails. adultery must be with another person
What is condonation?
The victim spouse waives a claim of adultery by cohabitating with the adulterous spouse after learning of the adultery
What are the grounds for divorce?
Separation grounds: (1) abandonment (2) 3 yr imprisonment (3) adultery (4) cruel and inhuman treatment
Then two bonus grounds:
(1) conversion: first separation decree for at least one year or separation by agreement for at least one year. sex with intent to reconcile during separation will void the document.
(2) irretrievable breakdown of marriage for at least six months "no fault divorce"
--one party has so stated under oath
--unclear if any additional evidence is necessary. but testable that at least this is necessary.
What is marital dissolution?
When spouse has disappeared, missing without any tidings for a period greater than five successive years. Elements:
(1) diligent search
(2) publish a request to return in english language newspaper
(3) party seeking must have lived in ny for at least one year, or domicile at time of disappearance
What are the automatic orders of law upon a marital proceeding?
prevent transfer of assets, insurance, etc.
What are the parties automatic duties in a marital proceeding?
Must file financial information truthfully (tax returns etc)
What is temporary maintenance?
temporary payments from one spouse to another while an action is pending. Maintain the status quo until the lawsuit is over.
What are the important factors in determining post-divorce maintenance?
incomes, length of marriage, capacities for self support, potential for education or training, custody of children, parties' ages and health, and equitable distribution.
if they are sicker etc. they should get more money
If one spouse is a cheater, what is the proper consideration of their fault?
(1) NOT to be used in distribution of marital property
(2) SHOULD be used in calculation of maintenance
Can maintenance be modified?
Yes. Either party can move for modification. Recipient can ask for increase, Payee can ask for decrease.
Modifications are only prospective; past due payments can not be modified. Arrears can be annuled only upon showing of good cause for no prior filing.
When does maintenance end?
Automatic termination: death of either party, remarriage of recipient, or modification of the final judgment.
In addition, a court may end maintenance upon cohabitation of recipient with another who are holding themselves out as a married couple, in its discretion.
How is maintenance enforced?
Seize bank accounts, real property, wage reduction order, driver's license, professional license, contempt of court.
What is equitable division?
Division of marital property that is passed out by categorizing and then distribution.
How is marital property categorized?
(1) H's own property
(2) W's own property
(3) Marital property
(1) property acquired before marriage
(2) property acquired by inheritance or gift
(3) compensation for personal injuries for pain and suffering
(4) property acquired in exchange for or by increase in value of separate property, unless obtained by spouse's participation or effort
(5) property described as separate by written agreement
Marital property: all other property. All property, unless clearly separate, is presumed marital property.
How is marital property distributed?
Separate property: each spouse keeps their own separate property
Court should consider all circumstances: financial circumstances of each spouse, duration of the marriage, age and health of the parties, maintenance awards, contribution to property, tax consequences, loss of health insurance, and economic fault.
H buys house for 50k. H and W marry. They divorce. house is worth 100k. who gets what?
H gets to keep house for 100k as separate property.
H owns a business before marriage worth 100k. H and W marry and then W stays at home so H can work really hard at the business. At divorce, the business is worth 300k. Who gets what?
100k is H's separate property.
200k goes into marital property, because being a homemaker/parent is considered "helping the value" if it liberates the other to grow the business
H makes 300k /yr. H marries W. After marriage, H spends his salary on several luxury automobiles. At divorce, does W get any of the cars?
Yes. Property acquired after marriage is MARITAL PROPERTY
H and W marry. During marriage, H gets an MD degree. H and W divorce. What effect?
MD is worth two million over the course of a life. Goes into marital property. W gets one million, H gets to keep degree.
Can marital fault ever be considered in marital property distribution?
Generally, no. But if heinous domestic violence or the like, yes. NOT simply adultery.
Once court allocates a distribution, eg H 30% and W 70%, what happens?
(1) detailed item by item distribution
(2) one spouse pays the other a check and keeps everything
When are parental rights terminated?
Comes at end of protracted process in which courts and social works try to fix the problems.
Done in family court
(1) abandonment for 6 months
(2) permanent neglect for at least 1 year. could be satisfied by imprisonment
(4) mental disability of parent
(5) murder of a sibling child
Who can adopt?
(1) married couples
(2) unmarried cohabitants
(3) single adult
What consent is required for adoption?
(1) adoptive child is marital child: need consent of both parents. but not voluntary surrender or if the parents are retarded.
(2) nonmarital child: mother only, father only if paternity is established through the various ways
(3) consent of legal custodian
(4) if over 14, needs the adoptee's consent too
What is a child's right to support?
Pre-21: full support
Post-21: through college if there is financial ability on part of parents and academic ability of kid
generally, no inquiry when in the same home.
What is a non custodial parent?
court-order: non-custodial parent
-after marital termination
-non-marital child after filiation proceeding
Child support modifications allowed?
modifications based on changed circumstances. always allowed if 3 year passage of time
How is child support calculated?
Mechanical formula based on # of children, gross income, and parents respective incomes.
Which state can modify a child custody order?
UCCJEA. 49 states have passed, not MA.
--a state can enter a custody order if it is the home state of the child or was the home state within the last 6 months
home state: state where kid has lived for 6 months prior to custody proceeding.
H and W have child C. W and C move to Florida for 10 months. At that time, W wants to formalize custody. Where to file for custody?
Florida, since its beyond 6 months
What is the legal standard for the finding of child custody?
"best interests" of the child.
factors: fitness of each parent, child's preference, level of involvement in child's life, geographical proximity.
custody consists of both "legal custody" (right to make major decisions for child) and "physical custody (possession of the child)
What is a biological's parents status in a custody hearing?
"best interests" is modified. biological parent has a PRESUMPTION of being in the best interests of the child.
a biological mother only needs to show willingness to improve and actual conformance with the law. even if the 3rd party is AWESOME, biological wins.
What is the standard for child relocation?
The custodial parent must determine by a preponderance that the relocation is in the best interests of the child
H and W married, have C1 and C2. H dies. H's parents want to visit, but W hates them. W bars the door. H's parents sue for visitation. result?
SCOTUS: Parents have due process rights. Judges may not overrule the biological parent W. The grandparent statute is suspect.
New standard: must show substantial state interest to overcome due process right of parent.
NY standard: "best interests" of the child, but subject to constitutional standard
What should you do in ANY family law question dealing with a child?
BEST INTERESTS TEST. get out of jail free card
What is the law for out-of-state marriages?
Valid there, valid in NY unless it violates public policy of NY.
What is the law for out-of-state divorce?
Valid there, valid in NY. full faith and credit. res judicata on all issues litigated or could have been litigated.
What is the treatment of an ex parte divorce in another state?
"prima facie" valid, if D got notice. but can be collaterally attacked by evidence that the party obtaining was not "truly domiciled" in foreign state
What about the treatment of foreign country divorces?
NY will usually honor foreign country divorces under comity. Many couples did this prior to no-fault divorce. EG Mexican divorces.
What about ex parte foreign country divorces?
What about out-of-state child support orders?
UIFSA. any state that enters initial support order has INITIAL AND CONTINUING EXCLUSIVE jurisdiction as long as kid or parent lives there. CEJ
What is the intersection of support orders and the full faith and credit clause?
Support orders are not "final". So the FFC clause does not apply. UIFSA closes this loophole.
What are the jurisdictional rules for claims affecting the status of a marriage?
Judgments affecting status: Jurisdiction is proper when at least one party to the action is a domiciliary of NY. However, this is subject to the "Durational Residency Requirements", which do not affect SMJ but may be a defense for the defendant if properly brought up on appeal.
Judgments affecting other marital matters such as support: Need PJ over the defendant. Long-arm statute applies provided the party to be affected had, at some time in the recent past, a connection with NY and the party seeking judgment is a resident or domicile of NY
Durational Residency Requirements:
0 years: Both are NY residents, and cause of action arose in NY
1 year: One party lived in NY for 1 year with a plus factor (1) marriage was started in NY (2) parties have resided in Y as a couple (3) cause of action arose in NY
2 years: One party lived in NY.
H + W married in New Jersey. H committed adultery, and W moved out to NYC. H has never been to NY. W lives in NY for three years, and then files a divorce action in NY. As part of the divorce action, she seeks maintenance of $1000/month. Is jurisdiction proper?
W/R/T divorce action itself, jurisdiction is proper. The court may award judgment affecting status so long as the party seeking judgment was a NY domicilliary.
W/R/T maintenance, this is an ancillary question, and thus triggers the need for personal jurisdiction over the defendant spouse. H has no contacts with NY and has never been to NY. Therefore, jurisdiction fails as to the request for maintenance.