Adverse Possession. The Wallen family owned a cabin on Lummi Island in the state of Washington. A driveway ran from the cabin across their property to South Nugent Road. Floyd Massey bought the adjacent lot and built a cabin on it in $1980$. To gain access to his property, Massey used a bulldozer to extend the driveway, without the Wallens' permission but also without their objection. Twenty-five years later, the Wallens sold their property to Wright Fish Company. Massey continued to use and maintain the driveway without permission or objection. Later, Massey sold his property to Robert Drake. Drake and his employees continued to use and maintain the driveway without permission or objection, although Drake knew it was located permission or objection, although Drake knew it was located largely on Wright's property. Still later, Wright sold its lot to Robert Smersh. The next year, Smersh told Drake to stop using the driveway. Drake filed a suit against Smersh, claiming adverse possession.

(a) The first group will decide whether Drake's use of the driveway meets all of the requirements for adverse possession.

(b) The second group will determine how the court should rule in this case and why. Does it matter that Drake knew the driveway was located largely on Wright's (and then Smersh's) property? Should it matter? Why or why not?

(c) A third group will evaluate the underlying policy and fairness of adverse possession laws. Should the law reward persons who take possession of someone else's land for their own use? Does it make sense to punish owners who allow someone else to use their land without complaint? Explain.

(d) The fourth group will consider how the laws governing adverse possession vary from state to state. To acquire title through adverse possession, a person might be required to possess the property for five years in one state, for instance, and for twenty years in another. Are there any legitimate reasons for such regional differences? Would it be better if all states had the same requirements? Explain your answers.

The Brown family owns several companies, including the J. H. Stevedoring Company and Penn Warehousing and Distribution, Inc. Many aspects of the companies' operations and management are intertwined. Dennis Bishop worked for J. H. and Penn for more than ten years before he became the financial controller at J. H. His responsibilities included approving invoices for payment and reconciling the corporate checkbook. In December of the following year, Bishop began stealing from Penn and J. H. by writing checks on the corporate accounts and using the funds for his own benefit (committing the crime of embezzlement). Several members of the Brown family signed the checks for Bishop without hesitation because he was a longtime, trusted employee. Over the next two years, Bishop embezzled more than $\$ 1.2$ million. He used $\$700,000$ to buy horses from the Fasig-Tipton Company and Fasig-Tipton Midlantic, Inc., with Penn and J. H. checks made payable to those firms. When Bishop's fraud was revealed, J. H. and Penn filed a suit in a federal district court against the Fasig-Tipton firms (the defendants) to recover the amounts of the checks made payable to them. Using the information presented in the chapter, answer the following questions.

Do the defendants in this situation (the two Fasig-Tipton firms) meet the requirements to be HDCs? Why or why not?

If the series of indorsements on the note had ended with a blank indorsement, would the lower court's holding have been in error?

In Richland, Washington, Robert Ingersoll planned his wedding to include about a hundred guests, a photographer, a caterer, a wedding cake, and flowers. Ingersoll had been a customer of Arlene's Flowers and Gifts for more than nine years and had spent several thousand dollars at the shop. When he approached Arlene's owner, Baronelle Stutzman, to buy flowers for his wedding, she refused because Ingersoll and his fiancé, Curt Freed, were a same-sex couple. Deeply offended, Ingersoll and Freed dropped their wedding plans and married in a modest ceremony.

(a) Federal and state laws attempt to protect consumers from unfair trade practices, including discriminatory requirements, related to consumer transactions. Using the Review step of the IDDR approach, consider whether it would be ethically fair to hold Stutzman personally liable for a violation of these laws.

(b) Using the Discussion step of the IDDR approach, consider actions that Ingersoll and Freed as consumers might take in response to Arlene's-Stutzman's-discriminatory rejection of their offer to do business.

A Question of Ethics-The Doctrine of Precedent. Sandra White operated a travel agency. To obtain lower airline fares for her nonmilitary clients, she booked military-rate travel by forwarding fake military identification cards to the airlines. The government charged White with identity theft, which requires the "use" of another's identification. The trial court had two cases that represented precedents.

In the first case, David Miller obtained a loan to buy land by representing that certain investors had approved the Loan when, in fact, they had not. Miller's conviction for identity theft was overturned because he had merely said that the investors had done something when they had not. According to the court, this was not the "use" of another's identification.

In the second case, Kathy Medlock, an ambulance service operator, had transported patients when there was no medical necessity to do so. To obtain payment, Medlock had forged a physician's signature. The court concluded that this was "use" of another person's identity. [United States v. White, $846$ F.$3$d $170$ ($6$th Cir. $2017$)] (See Sources of American Law.)

• Which precedent-the Miller case or the Medlock caseis similar to White's situation, and why?

• In the two cases cited by the court, were there any ethical differences in the actions of the parties? Explain your answer.

Business Case Problem with Sample AnswerDefenses. Thomas Klutz obtained a franchise from Kahala Franchise Corporation to operate a Samurai Sam's restaurant. Under their agreement, Klutz could transfer the franchise only if he obtained Kahala's approval and paid a transfer fee. Without telling Kahala, Klutz sold the restaurant to William Thorbecke. Thorbecke signed a note for the price. When Kahala learned of the deal, the franchisor told Thorbecke to stop using the Samurai Sam's name. Thorbecke stopped paying on the note, and Klutz filed a claim for the unpaid amount. In defense, Thorbecke asserted breach of contract and fraud. Are these defenses effective against Klutz? Explain.

Substantial Performance. Melissa Gallegos bought a used $1996$ Saturn automobile for $\$ 2,155$ from Raul Quintero, doing business as JR's Motors. Their written contract focused primarily on the transfer of physical possession of the vehicle and did not mention who would pay the taxes on the sale. Gallegos paid Quintero $\$2,200$, believing that this amount included the taxes. When she asked him for the title to the vehicle, he told her that only the state could provide the title and only after the taxes were paid. Quintero added that they had orally agreed Gallegos would pay the taxes. Without the title, Gallegos could not obtain license plates and legally operate the vehicle. More than six years later, she filed a suit in a Texas state court against Quintero, alleging breach of contract. Did Quintero substantially perform his obligation under the contract? Explain

Indorsements. A check drawn by Cullen for $\$ 500$ is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $\$ 500$ in rent and transfers the check to his landlord with the following indorsement: "For rent paid, [signed] Jordan." Jordan's landlord has contracted to have Deborah do some landscaping on the property. When Deborah insists on immediate payment, the landlord transfers the check to Deborah without indorsement. Later, to pay for some palm trees purchased from Better-Garden Nursery, Deborah transfers the check with the following indorsement: "Pay to Better-Garden Nursery, without recourse, [signed] Deborah." Better-Garden Nursery sends the check to its bank indorsed "For deposit only, [signed] Better-Garden Nursery." (See Indorsements.)

(a) Classify each of these indorsements.

(b) Was the transfer from Jordan's landlord to Deborah, without indorsement, an assignment or a negotiation? Explain.

Intestacy Laws. Three and a half years after Lauren and Warren Woodward were married, they were informed that Warren had leukemia. At the time, the couple had no children, and physicians told the Woodwards that the leukemia treatment might leave Warren sterile. The couple arranged for Warren's sperm to be collected and placed in a sperm bank for later use. Two years after Warren died, Lauren gave birth to twin girls who had been conceived through artificial insemination using his sperm. The following year, Lauren applied for Social Security survivor benefits for the two children. Her application was rejected on the ground that she had not established that the twins were the husband's children within the meaning of the Social Security Act. Woodward then filed a paternity action in Massachusetts, and the probate court determined that Warren Woodward was the twins' father. She then filed an action in court to determine the inheritance rights of the twins. (See Intestacy Laws.)

(a) The first group will outline how a court should decide the inheritance rights of children conceived from the sperm of a deceased individual and his surviving spouse.

(b) The second group will decide if children conceived after a parent's death (by means of artificial insemination or in vitro fertilization) still inherit under intestate succession laws, and will explain why or why not.

(c) The third group will consider the inheritance rights of a child who was conceived by means of artificial insemination, in vitro fertilization, or a surrogate. Should they be different from the rights of a child conceived in the traditional manner? Assuming the biological parent is not part of the child's life, should the child still be able to inherit from the biological parent? Why or why not?

Holder in Due Course. Through negotiation, Emilio has received from dishonest payees two checks with the following histories:

(a) The drawer issued a check to the payee for $\$ 9$. The payee cleverly altered the numeral amount on the check from $\$ 9$ to $\$ 90$ and the written word from "nine" to "ninety."

(b) The drawer issued a check to the payee without filling in the amount. The drawer authorized the payee to fill in the amount for no more than $\$ 90$. The payee filled in the amount of $\$ 900$.

Discuss whether Emilio, by giving value to the payees, can qualify as a holder in due course of these checks. (See Holder in Due Course.)

What evidence did the plaintiff offer to establish standing to enforce the note? Was this sufficient proof? Explain.

On Evans's motion for summary judgment, what evidence did the opposing parties emphasize? Based on this evidence, what did the court conclude?

Nancy Mahar was the office manager at Golden Years Nursing Home, Inc. She was given a signature stamp to issue checks to the nursing home's employees for up to $\$ 500$ as advances on their pay. The checks were drawn on Golden Years' account at First National Bank. Over a seven-year period, Mahar wrote a number of checks to employees exclusively for the purpose of embezzling funds for herself. She forged the employees' indorsements on the checks, signed her name as a second indorser, and deposited the checks in her personal account at Star Bank. The employees whose names were on the checks never actually requested them. When the scheme was uncovered, Golden Years filed a suit against Mahar, Star Bank, and others to recover the funds. Using the information presented in the chapter, answer the following questions.

What is the rule set forth by that provision?

Alana Mansell built a garage on her property that encroached on the property of her neighbor, Betty Hunter, by fourteen feet. Hunter knew of the encroachment and informally agreed to it, but she did not transfer ownership of the property to Mansell. A survey twenty-eight years later confirmed the encroachment, and Hunter sought the removal of the garage. Mansell asked a court to declare that she was the owner of the property by adverse possession.

(b) Was Mansell’s conduct in any way unethical? Discuss.