Insurance Coverage. PAJ, Inc., a jewelry company, had a commercial general liability (CGL) policy from Hanover Insurance Company. The policy required PAJ to notify Hanover of any claim or suit against PAJ "as soon as practicable." Yurman Designs sued PAJ for copyright infringement because of the design of a particular jewelry line. Because PAJ did not realize that the CGL policy had a clause that covered infringement claims, it did not notify Hanover of the suit until four to six months after litigation began. Hanover contended that the policy did not apply to this incident because the late notification had violated its terms. PAJ sued Hanover, seeking a declaration that it was obligated to defend and indemnify (reimburse) PAJ for any loss resulting from the infringement claim. (See The Insurance Contract.)

(a) The first group will decide whether Hanover had an obligation to provide PAJ with legal assistance.

(b) The second group will determine the effect that PAJ's late notice to the insurance company had on its ability to provide assistance and mount a defense. Should the court require the insurance company to indemnify PAJ in this situation? Why or why not?

Residents of the city of Madison, Wisconsin, became concerned about overconsumption of liquor near the campus of the University of Wisconsin (UW). The city initiated a new policy, imposing conditions on area bars to discourage reduced-price "specials" that were believed to encourage high-volume and dangerous drinking. Later, the city began to draft an ordinance to ban all drink specials. Bar owners responded by announcing that they had "voluntarily" agreed to discontinue drink specials on Friday and Saturday nights after $8:00$ P.M. The city put its ordinance on hold. Several UW students filed a lawsuit against the local bar owners' association, alleging violations of antitrust law.

(a) The first group will identify the grounds on which the plaintiffs might base their claim for relief and formulate an argument on behalf of the plaintiffs.

(b) The second group will determine whether the defendants are exempt from the antitrust laws.

(c) The third group will decide how the court should rule in this dispute and provide reasons for the ruling.

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.

Defenses. Damion and Kiya Carmichael took out a loan from Ameriquest Mortgage Co. to refinance their mortgage. They signed a note to make monthly payments on the loan. Later, Deutsche Bank National Trust Co. acquired the note. The Carmichaels stopped making payments and filed for bankruptcy. Deutsche asked the court to foreclose on the mortgage. The Carmichaels asserted that they had been fraudulently induced to make the loan and sign the note. Was the bank free of this defense? Explain.

Material Alteration. Williams purchased a used car from Stein for $\$ 1,000$. Williams paid for the car with a check (written in pencil) payable to Stein for $\$ 1,000$. Stein, through careful erasures and alterations, changed the amount on the check to read $\$ 10,000$ and negotiated the check to Boz. Boz took the check for value, in good faith, and without notice of the alteration. He thus met the Uniform Commercial Code's requirements for the status of a holder in due course. Can Williams successfully raise the universal (real) defense of material alteration to avoid payment on the check? Explain. (See Defenses and Limitations.)

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.

Under the plaintiff's suggested reading of the regulation at issue in this case, what difficult choice would the Port Authority face?

Rainbow School, Inc., has run a child-care facility in Fayetteville, North Carolina, for more than twenty years. In addition to using the word "rainbow" in its name, the school uses rainbow imagery on its logo. Rainbow Early Education Holding, LLC, operates child-care facilities in several states. Early Education opened a branch in Fayetteville near the Rainbow School under the name "Rainbow Child Care Center," which also used rainbow imagery on its logo. The school filed a suit in a federal district court against Early Education, alleging a violation of the Lanham Act. The parties entered into a settlement agreement that required Early Education to stop using the word "rainbow" in connection with its Fayetteville facility. The court issued an injunction to enforce the agreement. Nevertheless, Early Education continued to use the word "rainbow" in domain names, links, and meta tags associated with its Fayetteville facility's website. Rainbow School imagery was used in a mailer inviting residents to the "nearest Rainbow Child Care Center." Did Early Education violate the Lanham Act? Explain.

On learning that Sébastien planned to travel abroad, Roslyn asked him to deliver $25,000 in cash to her family in Mexico. During a customs inspection at the border, Sébastien told the customs inspector that he carried less than$10,000. The officer discovered the actual amount of cash that Sébastien was carrying, seized it, and arrested Sebastien. Roslyn asked the government to return what she claimed were her funds, arguing that the arrangement with Sébastien was a bailment and that she still held title to the cash. (See Bailments.)

(a) The first group will argue that Roslyn is entitled to the cash.

(b) The second group will take the position of the government and develop an argument that Roslyn's agreement with Sébastien does not qualify as a bailment.

(c) The third group will assume that a bailment was created, identify what type of bailment it was, and explain the degree of care required of the bailee.

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.

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.

Holder in Due Course. Robert Triffin purchased a dishonored payroll check from Fair Law Financial Services (doing business as United Check Cashing) and filed a complaint against the maker seeking to collect on the check. The check was issued by Extensis Group, LLC, to Maria Pagan in the amount of $\$ 610$. The face of the check clearly stated "THE FACE OF THIS DOCUMENT HAS A COLORED BACKGROUND NOT A WHITE BACKGROUND." But the check that Triffin introduced into evidence had a white background. The check also stated, "THE BACK OF THIS DOCUMENT CONTAINS A UNIQUE IDENTITY BARCODE AND AN ARTIFICIAL WATERMARK-HOLD AT AN ANGLE TO VIEW," but Triffin's check did not have this barcode or watermark. Was Triffin an HDC? Why or why not?

Implied Warranties. Harold Moore bought a barrelracing horse named Clear Boggy for $\$ 100,000$ for his daughter. The seller was Betty Roper, who appraises barrel-racing horses. (Barrel racing is a rodeo event in which a horse and rider attempt to complete a cloverleaf pattern around preset barrels in the fastest time.) Clear Boggy was promoted for sale as a competitive barrel-racing horse. On inquiry, Roper represented that Clear Boggy did not have any performance issues or medi$\mathrm{cal}$ problems, and that the only medications the horse had been given were hock injections, a common treatment. Shortly after the purchase, Clear Boggy began exhibiting significant performance problems, including nervousness, unwillingness to practice, and stalling during runs. Roper then disclosed that the horse had been given shoulder injections prior to the sale and had previously stalled in competition. Moore took the horse to a veterinarian and discovered that it suffered from arthritis, impinged vertebrae, front-left-foot problems, and a right-hind-leg fracture. The vet recommended, and Moore paid for, surgery to repair the leg fracture, but Clear Boggy remained unfit for competition. Moore also discovered that the horse had been scratched from a competition prior to the sale because it was injured. Can Moore prevail in a lawsuit against Roper for breach of the implied warranty of fitness for a particular purpose? Why or why not?