In June, Bernard Ramish set up a $\$ 48,000$ trust fund through West Plains Credit Union to provide tuition for his nephew, Nathan Covacek, to attend Tri-State Polytechnic Institute. The trust was established under Ramish's control and went into effect that August. In December, Ramish suffered a brain aneurysm that caused frequent, severe headaches with no other symptoms. Shortly thereafter, Ramish met with an attorney to formalize in writing that he wanted no artificial life-support systems to be used should he suffer a serious illness. He also designated his cousin, Lizzie Johansen, to make decisions on his behalf should he become incapacitated. In August of the following year, Ramish developed heatstroke on the golf course at La Prima Country Club. After recuperating at the clubhouse, Ramish quickly wrote his will on the back of a wine list. It stated, "My last will and testament: Upon my death, I give all of my personal property to my friend Steve Eshom and my home to Lizzie Johansen." He signed the will at the bottom in the presence of five men in the La Prima clubhouse, and all five men signed as witnesses. A week later, Ramish suffered a second aneurysm and died in his sleep. He was survived by his mother (Dorris Ramish), his nephew (Nathan Covacek), his son-in-law (Bruce Lupin), and his granddaughter (Tori Lupin). Using the information presented in the chapter, answer the following questions.

What would the order of inheritance have been if Ramish had died intestate?

Standard Oil of Connecticut, Inc., sells home heating, cooling, and security systems. Standard schedules installation and service appointments with its customers and then contracts with installers and technicians to do the work. The company requires an installer or technician to complete a project by a certain time but to otherwise "exercise independent judgment and control in the execution of any work." The installers and technicians are licensed and certified by the state. Standard does not train them, provide instruction manuals, supervise them at customers' homes, or inspect their work. The installers and technicians use their own equipment and tools, and they can choose which days they work. Standard pays a set rate per project. According to criteria used by the courts, are these installers and technicians independent contractors or employees? Why? (See Agency Relationships.)

A Question of Ethics-The IDDR Approach and Bad Faith. Bernd Moving Systems owned a warehouse in Yakima, Washington. American Guarantee & Liability Insurance Company insured Bernd under a policy that included coverage of "Personal property of others in your care, custody and control." Before storing property in the warehouse, William and Colleen Merriman were told that their goods would be fully insured. Later, a fire destroyed the warehouse and the Merrimans' property. American Guarantee did not inform them of Bernd's coverage, however. In addition, representatives of American Guarantee advised the Merrimans to file a claim under their homeowners' insurance and told them there would likely be no coverage under Bernd's policy.

(a) On what grounds might the Merrimans base a legal action against American Guarantee?

(b) Are there sufficient grounds to argue that the insurer acted unethically? Discuss.

Specific Bequests. Gary Mendel drew up a will in which he left his favorite car, a $1966$ red Ferrari, to his daughter, Roberta. A year prior to his death, Mendel sold the $1966$ Ferrari and purchased a $1969$ Ferrari. Discuss whether Roberta will inherit the $1969$ Ferrari under the terms of her father's will. (See Wills.)

Nelson Ovalles worked as a cable installer for Cox Rhode Island Telecom, LLC, under an agreement with a third party, M&M Communications, Inc. The agreement stated that no employer-employee relationship existed between Cox and M&M's technicians, including Ovalles. Ovalles was required to designate his affiliation with Cox on his work van, clothing, and identification badge. Cox had minimal contact with him, however, and had limited power to control how he performed his duties. Cox supplied cable wire and similar items, but the equipment was delivered to M&M, not to Ovalles. On a workday, while Ovalles was fulfilling a work order, his van rear-ended a car driven by Barbara Cayer. Is Cox liable to Cayer? Explain.

James Blatt hired Marilyn Scott to sell insurance for the Massachusetts Mutual Life Insurance Company. Their contract stated, "Nothing in this contract shall be construed as creating the relationship of employer and employee." The contract was terminable at will by either party. Scott financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products of Massachusetts Mutual's competitors. Blatt learned that Scott was simultaneously selling insurance for Perpetual Life Insurance Corporation, one of Massachusetts Mutual's fiercest competitors. Blatt therefore withheld client contact information from Scott. Scott complained to Blatt that he was inhibiting her ability to sell insurance for Massachusetts Mutual. Blatt subsequently terminated their contract. Scott filed a suit in a New York state court against Blatt and Massachusetts Mutual. Scott claimed that she had lost sales for Massachusetts Mutual—and commissions—as a result of Blatt's withholding contact information from her. Using the information presented in the chapter, answer the following questions.

How would the court most likely rule on Scott's employee status? Why?

What is the advantage to a principal of an exclusive agency agreement? What was the advantage to Jones of his agreement with Woolston? Discuss.

Bad Faith Actions. Leo and Mary Deters owned Deters Tower Service, Inc., in Iowa. Deters Tower serviced television and radio towers and antennas in a multistate area. The firm obtained a commercial general liability policy issued by USF Insurance Company to provide coverage for its officers, including Leo. One afternoon, Leo and two Deters Tower employees were working on a TV tower in Council Bluffs when they fell from the tower to their deaths. The workers' families filed a negligence suit against Leo's estate. USF refused to defend the Deters estate against the suit and pay any resulting claim but did not provide a reason for its refusal. Is USF liable to the Deters estate for this refusal? If so, on what basis might the Deters estate recover, and how much?

Paul Gett is a well-known, wealthy financial expert living in the city of Torris. Adam Wade, Gett's friend, tells Timothy Brown that he is Gett's agent for the purchase of rare coins. Wade even shows Brown a Facebook posting that mentions Gett's interest in coin collecting. Brown, knowing of Wade's friendship with Gett, contracts with Wade to sell Gett a rare coin valued at $25,000. Wade takes the coin and disappears with it. On the payment due date, Brown seeks to collect from Gett, claiming that Wade's agency made Gett liable. Gett does not deny that Wade was a friend, but he claims that Wade was never his agent. Discuss fully whether an agency was in existence at the time the contract for the rare coin was made. (See Formation of the Agency Relationship.)

Whom does the result in this case benefit? Why ?

Provident Insurance, Inc., issued an insurance policy to a company providing an employee, Steve Matlin, with disability insurance. Soon thereafter, Matlin was diagnosed with "panic disorder and phobia of returning to work." He lost his job and sought disability coverage. Provident denied coverage, doubting the diagnosis of disability. Matlin and his employer sued Provident.

During pretrial discovery, the insurer learned that Matlin had stated on the policy application that he had never been treated for any "emotional, mental, nervous, urinary, or digestive disorder" or any kind of heart disease. In fact, before Matlin filled out the application, he had visited a physician for chest pains and general anxiety, and the physician had prescribed an antidepressant and recommended that Matlin stop smoking. Using the information presented in the chapter, answer the question.

Did Matlin commit a misrepresentation on his policy application? Explain.

James Blatt hired Marilyn Scott to sell insurance for the Massachusetts Mutual Life Insurance Company. Their contract stated, "Nothing in this contract shall be construed as creating the relationship of employer and employee." The contract was terminable at will by either party. Scott financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products of Massachusetts Mutual's competitors. Blatt learned that Scott was simultaneously selling insurance for Perpetual Life Insurance Corporation, one of Massachusetts Mutual's fiercest competitors. Blatt therefore withheld client contact information from Scott. Scott complained to Blatt that he was inhibiting her ability to sell insurance for Massachusetts Mutual. Blatt subsequently terminated their contract. Scott filed a suit in a New York state court against Blatt and Massachusetts Mutual. Scott claimed that she had lost sales for Massachusetts Mutual—and commissions—as a result of Blatt's withholding contact information from her. Using the information presented in the chapter, answer the following questions.

Which of the four duties that Blatt owed Scott in their agency relationship has probably been breached?

Assignment. Sapata has an ordinary life insurance policy on her life and fire insurance policy on her house. Both policies have been in force for a number of years. Sapata's life insurance names her son, Rory, as beneficiary. Sapata has specifically removed her right to change beneficiaries, and the life insurance policy is silent on the right of assignment. Sapata is going on a one-year European vacation and borrows money from Leonard to finance the trip. Leonard takes an assignment of the life insurance policy as security for the loan, as the policy has accumulated a substantial cash surrender value. Sapata also rents out her house to Leonard and assigns her fire insurance policy to him. Discuss fully whether Sapata's assignment of these policies is valid. (See Types of Insurance.)

Wills and Intestacy Laws. Benjamin is a widower who has two married children, Edward and Patricia. Patricia has two children, Perry and Paul. Edward has no children. Benjamin dies, and his typewritten will leaves all of his property equally to his children, Edward and Patricia, and provides that should a child predecease him, the grandchildren are to take per stirpes. The will was witnessed by Patricia and by Benjamin's lawyer, and it was signed by Benjamin in their presence. Patricia has predeceased Benjamin. Edward claims the will is invalid. (See Intestacy Laws.)

(a) Discuss whether the will is valid.

(b) Discuss the distribution of Benjamin's estate if the will is invalid.

(c) Discuss the distribution of Benjamin's estate if the will is valid.