law (legal environment of business)

 

• For each assigned case, analyze the issue based on the following criteria:Identify the parties involved in the case dispute (who is the plaintiff and who is the defendant).Identify the facts associated with the case and fact patterns.Develop the appropriate legal issue(s) in question (i.e., the specific legal issue between the two parties).Provide a judgment on who should win the case – be clear.Support your decision with an appropriate rule of law.Be prepared to defend your decision and to objectively evaluate the other points of view.

Week 2

CHAPTER 3 GROUP 2

5- Missouri was International Shoe Corporation’s principal place of business, but the company employed between 11 and 13 salespersons in the state of Washington who exhibited samples and solicited orders for shoes from prospective buyers in Washington. The state of Washington assessed the company for contributions to a state unemployment fund. The state served the assessment on one of International Shoe Corporation’s sales representatives in Washington and sent a copy by registered mail to the company’s Missouri headquarters. International Shoe’s representative challenged the assessment on numerous grounds, arguing that the state had not properly served the corporation. Is the corporation’s defense valid? Why or why not? [International Shoe Co. v. Washington, 326 U. S. 310 (1945).]

6- The Robinsons, residents of New York, bought a new Audi car from Seaway Volkswagen Corp., a retailer incorporated in New York and with its principal place of business there. World- Wide Volkswagen, a company incorporated in New York and doing business in New York, New Jersey, and Connecticut, distributed the car to Seaway. Neither Seaway nor World- Wide did business in Oklahoma, and neither company shipped cars there. The Robinsons were driving through Oklahoma when another vehicle struck their Audi in the rear. The gas tank of the Audi exploded, injuring several members of the family. The Robinsons brought a product liability suit against the manufacturer, distributor, and retailer of the car in an Oklahoma state court. Seaway and World- Wide argued that the Oklahoma state court did not have in personam jurisdiction over them. After the state’s trial court and Supreme Court held that the state did have in personam jurisdiction over Seaway and World- Wide, the companies appealed to the U. S. Supreme Court. How do you think the Court decided in this case? Why? [World- Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 (1980).]

Week 3

Group 1

Chapter 13

9- Michael Merkle was fired from T- Mobile USA, Inc., after he had allegedly been seen drunk at a company conference. Merkle, who had worked for T- Mobile for 11 years, denied being drunk at the event. During a meeting between Merkle and the senior human resource manager, Merkle was simultaneously informed of the allegations against him and fired. When Merkle began employment at T- Mobile, he was given the company handbook, which sets forth T- Mobile’s policy of internally investigating all claims of suspected or alleged employee misconduct. Merkle claimed that no internal investigation had been conducted. T- Mobile did not deny the existence of the investigation portion of the handbook or the lack of investigation in this case. The company did, however, contend that there were sufficient disclaimers throughout the handbook, which stated that no portion of the handbook constituted a con-tract. Merkle further asserted that as a result of T- Mobile’s investigations of other employees (one employee had actually been drunk) as well as the company’s track record for providing warnings, a precedent had been set to provide a warning or investigation before termination. Merkle filed suit against T- Mobile for breach of an implied con-tract of employment. Do you think that T- Mobile’s handbook and prior disciplinary actions constitute an implied contract of employment? Why or why not? [Michael Merkle v. T- Mobile USA, Inc., 2008 U. S. Dist. LEXIS 63614.]

-The plaintiff:

-The defendant

-Facts associated with the case

-The appropriate legal issues in question, provide a judgment who should win the case

-Support your decision with an appropriate rule of law

-Be prepared to defend your decision and to objectively evaluate the other points of view

chapter 14

6- The Pennsylvania Department of Transportation (PennDOT) issued a Request for Bid Proposal for Vending Machine Services for rest areas on high-ways in the state. ATI submitted the lowest bid for the sites. PennDOT selected ATI for a contract for 35 vending sites. Enclosed with the notice of award sent to ATI was a service purchase contract to be executed by ATI, by PennDOT, by the commonwealth comptroller, and by PennDOT’s attorney. Also, “ if required,” signature lines for the Office of General Counsel and the Attorney General’s Office were provided. The award notice indicated that the contract would become effective “ after all approvals have been received from the administrative and fiscal personnel in Harrisburg” and further stated that no activities may be performed until the contract is fully executed. ATI returned an executed contract to PennDOT. PennDOT’s director of the Bureau of Maintenance and Operations and a representative from its legal department executed the agreement. The comptroller and Office of General Counsel subsequently signed the contract; however, the Attorney General’s Office refused to execute the agreement. The Attorney General’s Office subsequently filed criminal charges, related to sales tax issues, against ATI’s president. As a result, the Attorney General’s Office notified PennDOT it would not approve the contract. PennDOT never returned an executed contract to ATI or provided a notice- to- proceed to ATI. Instead, PennDOT notified ATI it would not enter into the con-tract because it determined ATI is not a responsible contractor. ATI filed a complaint alleging PennDOT breached a valid contract. After the hearing, the board determined that PennDOT never delivered an acceptance of the offer to ATI and, as a result, a contract was never formed. ATI appealed, arguing that the board erred in finding a contract did not exist because PennDOT’s representatives, who signed the contract, intended to bind PennDOT to the terms of the con-tract. How did the court rule on appeal? Did the documents contain a proper acceptance? [Makoroff v. DOT, 938 A. 2d 470 ( Pa. Commw. Ct. 2007).]

Chapter 14

7- Plaintiff Business Systems Engineering, Inc., was one of several subcontractors that agreed to provide technical consultants for defendant IBM’s work on a transit project. In a “ plan of utilization” provided by IBM to the transit authority, IBM had listed Business Systems as one of its intended subcontractors, with $ 3.6 million listed on that document under the heading “ contract amount.” The terms of the arrangement between IBM and its subcontractors for the job were that when IBM needed technical consultants for a part of the project, the subs would submit bids and when the subcontractor’s bid was accepted, the subcontractor would receive a specific statement of work detailing the scope of the specific project, the time frame, the conditions under which the task would be deemed complete, and the hourly wage, followed by a work authorization. The transit authority retained the authority to reject any individual consultant who was selected by the subcontractor, and the contract between the subcontractors and IBM incorporated by reference the contract between IBM and the transit authority. Work was not to begin until a final work authorization was issued. At the end of the project, 38 work authorizations had been issued to the plaintiff by the defendant for a total of $ 2.2 million, rather than the $ 3.6 million that had been projected in the original estimate IBM had provided to the transit authority. IBM had paid the plaintiff the $ 2.2 million for the work done on the work authorizations, but the plaintiff argued that it should have been entitled to the full $ 3.6 million contained in the estimate that was incorporated by reference in the contracts between IBM and the sub-contractors. The plaintiff argued that it had a con-tract with IBM for the full $ 3.6 million. The district court granted summary judgment for the defendant. What do you think the plaintiff’s argument was on appeal? What do think the outcome of the appeal was and why? [Business Systems Engineering, Inc. v. International Business Machines Corp., 547 F. 3d 883, 2008 U. S. App LEXIS 23682.]

Week 4

group1

chapter 15

8-On February 1, 2004, Zhang entered into a contract to buy former realtor Frank Sorichetti’s Las Vegas home for $ 532,500. The contract listed a March closing date and a few household furnishings as part of the sale. On February 3, Sorichetti told Zhang that he was terminating the sale “ to stay in the house a little longer” and that Nevada law allows the rescission of real property purchase agreements within three days of contracting. Sorichetti stated that he would sell the home, however, if Zhang paid more money. Zhang agreed. Another contract was drafted, reciting a new sales price, $ 578,000. This contract added to the included household furnish-ings drapes that were not listed in the February 1 agreement, and it set an April, rather than March, closing date. The primary issue before the court was whether a real property purchase agreement is enforceable when it is executed by the buyer only because the seller would not perform under an ear-lier purchase agreement for a lesser price. Should the court enforce the second contract? Why or why not? [ Zhang v. The Eighth Judicial District Court of the State of Nevada, 103 P. 3d 20 ( Sup. Ct. Nev. 2004).]

9-This appeal arises out of the trial court’s division of property in a divorce case. Vincent Simmons appeals from the trial court’s order awarding to his wife, Dorothy Simmons, a one- half interest in land that he had inherited from his parents. Vincent contends that the land is nonmarital prop-erty and, consequently, should have remained his separate property. Vincent and Dorothy Simmons were married in 1976. Vincent’s mother executed a trust in order to convey the land in Florida to her children, Vincent and his sister, upon her death. Louise Simmons died on April 1, 1999, but the land remained in trust for several years after her death. After Louise died, Dorothy became concerned that she would not receive an interest in the Florida land if Vincent died before the trust was distrib-uted, so she hired an attorney in Monticello, David Chambers, to prepare a document to protect her interest. In the document, Vincent states, in part, “ It is my intention, through this affidavit, to convey to my said wife marital interest in said real property. If I should die prior to the above- stated Trust being dissolved, then my said wife shall receive my share of said real property as her own property.” In 2003, Dorothy filed for divorce. Vincent argued that there was a total absence of consideration to support a contract in this case. Dorothy argued that her ongo-ing marriage to Vincent constituted adequate con-sideration to support the contract. Who is correct? Why? [ Vincent Simmons v. Dorothy Simmons, 98 Ark. App. 12 ( Ark. Ct. App. 2007).]

chapter 16

7-Roger Bannister was the director of technical and product development for Bemis. Bannister entered into a covenant not to compete with Bemis, which prohibited Bannister from working for a Bemis competitor for 18 months after the termination of his employment. The covenant not to compete included a provision which stated that Bemis was to pay Bannister his monthly salary if he was unable to find work due solely to the covenant not to compete, pro-viding that he provide the relevant paperwork. Bemis terminated Bannister’s employment. Bannister’s counsel sent a letter to Bemis requesting payment of his monthly salary under the covenant not to compete because he was unemployed due solely to the covenant not to compete. In this let-ter, Bannister included a letter he had received from Mondi, which informed him that Mondi would hire him if not for the covenant not to compete. Bannister sent a job contacts log to Bemis that detailed his job search and again requested that Bemis start paying his monthly salary under the covenant not to compete. Bemis responded by allowing Bannister out of the covenant not to com-pete, with the exception that he could not work for Mondi because of a separate agreement Bemis had with Mondi. Bannister responded by letter, stating that the Bemis correspondence was the first notice of his release to pursue employment with any com-petitor other than Mondi and that he considered the release a partial release because of the Mondi exception. Bemis then confirmed in a letter that Bannister could accept “ employment with any com-pany other than [ Mondi]” and reiterated its position that there were no damages due under the covenant not to compete “ based on the fact that Mr. Bannis-ter has been released to seek employment with any company other than [ Mondi].” Bannister accepted a position with Bancroft Bag, Inc., a Bemis competitor. He brought a claim against Bemis for its failure to pay his monthly salary for the nine- month period during which he was out of work under the covenant not to com-pete. The district court found in Bannister’s favor. Bemis appealed. How did the appellate court rule, and why? [ Bannister v. Bemis Co., Inc., 556 F. 3d 882 ( 2009).]

Week 5

6-The personal representatives of the plaintiff’s estate hired an appraiser to appraise personal property in preparation for an estate sale. The appraiser told the representatives that she was no judge of fine art and that they would have to hire an additional appraiser if she found any fine art. She did not report finding any fine art, and relying on her silence, the repre-sentatives priced and sold two oil paintings at $ 60. The defendant came to the estate sale and bought the paintings. Although he had bought and sold some art before, he was not an educated purchaser and had made no more than $ 55 on any art that he had previously sold; he had bought many paintings that ended up being forgeries. He assumed that the paintings were not originals, given their price and the fact that professionals were managing the sale, but he liked the subject matter of one and the frame of the other. Once home with the paintings, he compared their signatures to those in a book of artists’ signatures and thought they looked like those of Martin Johnson Head. As he had done with other art, he sent photos of the paintings to Christie’s in New York, which confirmed the signa-tures and offered to auction the paintings for him. The auction netted the defendant $ 911,000. After finding out what had happened, the estate sued the defendant buyer, alleging that the contract should have been rescinded on grounds of mutual mistake and unconscionability. The trial court granted sum-mary judgment in favor of the defendant, and the plaintiff appealed. How do you think the appellate court ruled, and why? [ Estate of Martha Nelson v. Carl Rice and Anne Rice, 12 P. 3d 238, 2000 LEXIS APP 159 ( 2000).]

7-Audrey Vokes was a 51- year- old widow who wanted to become an “ accomplished dancer.” She was invited to attend a “ dance party” at J. P. Davenports’ School of Dancing, an Arthur Murray franchise. She subsequently signed up for dance classes, at which she received elaborate praise. Her instructor initially sold her eight half- hour dance lessons for $ 14.50 each, to be used one each month. Eventually, after being continually told that she had excellent potential and that she was devel-oping into a beautiful dancer— when, in fact, she was not developing her dance ability and had no aptitude for dance— she ended up purchasing a total of 2,302 hours’ worth of dance lessons for a total of $ 31,090.45. When it finally became clear to Vokes that she was not developing her dance skills, in part because she had trouble even hearing the musical beat, she sued Arthur Murray. What would be the basis of her argument? Her case was initially dismissed by the trial court. What do you think the result of her appeal was? [ Okes v. Arthur Murray, 212 So. 2d 906 ( 1968).]

Week 6

6-The Garden City Boxing Club held exclusive sat-ellite licensing rights for a live broadcast of a boxing match between Oscar De La Hoya and Fernando Vargas. Luis Dominguez owned Antenas Enterprises, the installer of a satellite account at Mundelein Burrito restaurant. However, Antenas listed Mundelein Burrito as a residence instead of a commercial location. A commercial establishment could show the boxing match only if it was contrac-tually authorized by GCB to do so and if it paid the appropriate fee of $ 20 times the maximum fire code occupancy of the establishment. Mundelein Burrito showed the event to its patrons. However, because Mundelein Burrito was classified as a residence, it did not pay the proper fee for a commercial estab-lishment. The Garden City Boxing Club filed suit against Dominguez, the sole proprietor of Antenas, to collect the lost fees from the boxing match. As a sole proprietor, should Dominguez be held personally liable for Antenas Enterprises’ actions? [ Garden City Boxing Club, Inc. v. Luis Dominguez, 2006 U. S. Dist. LEXIS 38184 ( 2006).]

7-Chic Miller operated a General Motors ( GM) franchise car dealership. His written franchise agreement with GM stipulated that Miller had to maintain a floor- plan financing agreement with a lender to enable him to buy new cars from GM. Initially, Miller maintained a line of credit with a GM affiliate ( GMAC), but he terminated the agree-ment because he felt that GMAC charged him an exorbitant interest rate. Miller was able to find another line of credit from Chase Manhattan Bank, but Chase withdrew its financing agreement with Miller after one year. Miller attempted to resume the agreement with GMAC, but GMAC refused. Miller alleged ipse dixit ( an assertion without evi-dence) that GMAC discouraged other lenders from providing a line of credit to Miller. GM then noti-fied Miller that it was terminating its franchise relationship with him because he failed to satisfy the financing stipulation of the written franchise agreement. Two months after receiving this notice from GM, Miller attempted to sell his franchise to Kenneth Crowley, the owner of another car deal-ership. GM rejected this sale, alleging that Miller no longer had a franchise to sell because GM had terminated the franchise agreement two months earlier. Miller sued GM for failing to help his fran-chise obtain floor- plan financing and for rejecting the sale of his franchise to Crowley. How do you think the court ruled in this case? What require-ments must GM meet to lawfully terminate a fran-chise? Did GM meet those requirements? [ Chic Miller’s Chevrolet, Inc. v. GMC, 352 F. Supp. 2d 251 ( 2005).]

9-Richard Hunley, Nada Tas, Joseph Tas, and Kenneth Brown all became general partners of Parham- Woodman between 1986 and 1987. In 1985, Citizens Bank of Massachusetts loaned Parham- Woodman $ 2 million for the construction of a new office facility. When Parham- Woodman stopped making payments on the loan, the bank sold the building and sued the firm and the partners to recover the debt not paid. The partners argued that they were not liable for the debt because they had joined the firm after the loan agreement was made. Do you agree with them? Why or why not? [ Citizens Bank of Massachusetts v. Parham- Woodman Medical Associates, 874 F. Supp. 705 ( 1995).]

10-Phillip Heller was a partner of the Pillsbury, Madison & Sutro law firm. The relationship between Heller and the firm was not strong, as Heller’s work performance was unsatisfactory. He billed 1,000 hours fewer than he had estimated that he would produce, and he did not establish strong working relationships. Heller signed the partner-ship agreement in 1992. The agreement autho-rized the Executive Committee to expel partners. After Heller submitted a derogatory and lewd article entitled “ Why I Fired My Secretary,” the commit-tee met and terminated Heller’s partnership. Heller challenged the authority of the committee to expel him, regardless of whether he had signed the part-nership agreement. Do you think the court agreed with him? Why or why not? [ Heller v. Pillsbury, Madison & Sutro, 58 Cal. Rptr. 2d 336 ( 1996).]

Week 7

4-In June 2001, Greenfeld, Stitely, and Karstetter negotiated to merge their practices into a partner-ship that would provide accounting, tax, and infor-mation technology services. The partnership was profitable every year from its inception. However, Stitely felt that Greenfeld’s information technol-ogy services were not generating as much revenue as his one- third share in the partnership should. So Stitely indicated to the partners that he wanted to withdraw from the partnership. Soon after, Stitely and Karstetter agreed to instead continue as part-ners together after Greenfeld was out of the picture. Greenfeld did not violate his partnership agreement, but the two partners forced Greenfeld out of the part-nership without compensating him for his interest. They accomplished this by unlawful means, such as purporting to withdraw from the partnership while in reality seizing control of its assets. Furthermore, they transferred the assets of the partnership to their new company, preventing Greenfeld from having computer access to the business files, software, and client records. Was the partnership terminated prop-erly? If the dissolution was wrongful, what poten-tial consequences could Stitely and Karstetter face? [ Wayne I. Greenfeld v. Frank L. Stitely, et al., 2007 Va. Cir. LEXIS 7 ( 2007).]

5-Jones and Hardy entered into an oral partnership agreement. They planned to develop and lease certain areas of land. Together, they formed the Bloomington Knolls Association. Jones and Hardy began to experience financial problems, and they brought in a third partner, Jackson, to arrange addi-tional financing for the project. Jones subsequently dissolved the partnership and requested that he be given a portion of the land as his share of the part-nership assets. Jackson and Hardy did not honor his request, and Jones never received any assets of the partnership. Jones moved for an accounting and winding up of partnership affairs and brought the case to court. The district court entered judgment against Hardy and Jackson, jointly and severally, for an amount representative of Jones’s interest in the partnership. Jackson and Hardy appealed the district court’s decision. How do you think the court decided? [ MacKay v. Hardy, 896 P. 2d 626 ( 1995).]

Week 9

5-In January 2003, Motorola began a hostile tender offer to obtain the 26 percent of Next Level Communications, Inc., that it did not own. It offered Next Level shareholders $ 1.04 per share. After Next Level shareholders petitioned to stop the takeover, Motorola increased its offer to $ 1.18 per share. After four months, Motorola had acquired 88 percent of Next Level’s outstanding stock. It then converted some of its preferred stock into common stock, increasing its common stock ownership of Next Level to more than 90 percent. Motorola then initiated a short- form merger with Next Level, cashing out Next Level’s minority shareholders. One of these shareholders, Nick Gilliland, sued Next Level and Motorola for breach of their fiduciary duty to disclose information about Next Level’s financial condition to Next Level minority shareholders. Gilliland argued that minority shareholders needed this information to decide whether to accept Motorola’s cash- out offer or to exercise their appraisal rights. Motorola and Next Level argued that they sent minority shareholders information about Next Level’s financial situation when Motorola made its initial tender offer. Moreover, they argued that the notice of the short- form merger they sent to minority shareholders met statutory requirements. Do you think the court sided with the corporations or with the minority shareholders in this case? Why? If you think the court sided with the shareholders, what remedies do you think should be available to them? [ Gilliland v. Motorola, Inc., 873 A. 2d 305 ( 2005).]

6. Two brothers, Alex and John, served as directors of Atlas Corporation, a closely held corporation. Alex was responsible for financial matters, and John handled the company’s day- to- day operations. The relationship between the two brothers began to deteriorate in 1995. On several occasions, Alex used his position as majority shareholder to over-rule the board’s decisions. The conflict culminated when John learned that Alex had made decisions contrary to the majority and without informing John. The following morning, John found out that Alex no longer intended that John be president of Atlas. Alex subsequently offered John a position as a consultant. John refused and filed a complaint seeking judicial dissolution. He argued that Alex, as majority shareholder, “ froze him out” of the cor-poration. Do you agree with John? Why or why not? [ Kiriakides v. Atlas Food Systems & Services, Inc., 2000 S. C. App. LEXIS 32 ( 2000).]

Week 10

6-Safeway operates a bread- baking facility in Denver, Colorado. Safeway periodically holds company- sponsored outdoor barbecues for its employees, and it purchased a gas grill equipped with a 20- pound propane tank for the barbecues. To ensure that the grill had sufficient gas for the barbecues, Safeway purchased a 40- pound tank. The larger tanks have a warning label stating that they should not be used with a grill ordi-narily equipped with a 20- pound tank. Safeway planned to hold an employee barbecue on July 17, 1998. The plant superintendent, Edward Boone, instructed the plant engineer, Jerry Lewis, to set up the grill for the barbecue. On being informed that the grill was not adequately cooking the meat, the plant manager, Jim Kirk, again summoned Lewis. Lewis and the day- shift maintenance foreman, Fred Lake, attempted to improve the flow of gas to the grill by checking the regulator and reposition-ing the tank. While Lewis and Lake were work-ing on the grill, fuel escaped and a “ ball of fire” erupted. Lewis suffered severe burns to his hand and Lake’s facial hair was singed. After an inves-tigation, an OSHA inspector issued a citation to Safeway. Safeway appealed the decision. Was this a workplace safety violation? Why or why not? [ Safeway, Inc. v. Occupational Safety & Health Rev. Comm., 382 F. 3d 1189 ( 10th Cir. 2004).]

7-Baxter Pharmacy paid its pharmacists a salary but no overtime pay. Under the Fair Labor Standards Act ( FLSA), employers must pay employees over-time for hours worked in excess of 40 hours per week. Baxter Pharmacy believes that the phar-macists are exempt under FLSA because they are “ professionals.” The pharmacists disagree. Is being a professional an exemption from the requirement to pay overtime under FLSA? Are pharmacists pro-fessionals? How do you think the court ruled? [ De Jesus- Rentas v. Baxter Pharmacy Services Corp., 400 F. 3d 72 ( 1st Cir. 2005).]

7-43-In late 2000, Stacy Hegwine applied for a clerk/ order checker position in Fibre’s customer service department. The ad mentioned no lifting or other physical requirement. Hegwine interviewed for the position with Fibre employees Carlene Cox and Ron Samples on February 16, 2001. Fibre had no documented job description for the position at that time. During the interview, Samples told Hegwine that the position had a 25- pound lifting requirement. After watching a series of videos and receiving documents outlining Fibre’s employ-ment policies, Hegwine met with Cox. During this meeting, Hegwine disclosed her pregnancy. Cox called Hegwine and offered her the position on February 21, 2001, contingent on Hegwine’s suc-cessful completion of a physical exam. Hegwine accepted the offer and was given a start date of March 1, 2001. Two days later, Hegwine completed her physical at the office of Dr. Ostrander, Fibre’s medical director. As part of the exam, Hegwine was required to complete a medical history form that inquired as to her pregnancy status. Hegwine truth-fully disclosed that she was pregnant. In response, Ostrander gave Hegwine a medical release form and told her that she must have it completed by her personal physician as a condition of her employ-ment. Hegwine took this form to her physician, Dr. Herron, who completed it without being aware of any physical requirements related to Hegwine’s prospective position at Fibre. Herron indicated on the form that Hegwine could lift between 20 and 30 pounds and could pull or push up to 40 pounds. On March 16, 2001, Cox called Hegwine and informed her that Fibre was “ withdrawing [ its] offer of employment ” because her “ availability” did not permit her “ to perform the job.” May an employer inquire about pregnancy status during a preemployment medical examination? Do you believe that Fibre retracted it’s offer of employ-ment because Hegwine was pregnant? How should the court rule? [ Stacy L. Hegwine v. Longview Fibre Company, Inc., 172 P. 3d 688 ( 2007).]

Week 11

5. R. Edwin Powell was CEO and president of CAIRE, Inc., in addition to being a minority share-holder in Holdings, owning 11.9 percent of the company. In 1996, a group of investors decided to acquire Holdings and CAIRE. They formed MVE Investors, LLC. MVE purchased the shares of three retiring Holdings shareholders as part of a recapi-talization of the company. MVE paid the retiring shareholders $ 125.456 per share and became its primary owner. Powell did not sell his stock at this time and remained CAIRE’s CEO and president. In response to CAIRE’s financial setbacks, David O’Halloran, Holdings’ CEO and president, met with Powell on January 23, 1997, to fire Powell. While the two men agreed on a number of provi-sions in Powell’s severance package, they disagreed on the terms for the disposition of Powell’s stock. Powell testified that O’Halloran agreed, on behalf of Holdings, to buy Powell’s stock at the same price the retiring shareholders had been paid at the recapitalization. O’Halloran maintained he did not promise Powell that Holdings would buy Powell’s stock. But O’Halloran conceded that at the meeting he gave Powell a detailed chart showing the num-ber of shares Powell owned and how much money Powell would receive if those shares were sold or redeemed at the same price the retiring shareholders had received. O’Halloran also admitted he wrote a letter terminating Powell’s employment if he chose not to resign. In the letter, O’Halloran expressed Holdings’ intent to buy Powell’s stock in the same manner as it had bought the retiring shareholders’ stock. Holdings fired O’Halloran from his posi-tion as CEO and president. Powell brought action against Holdings, claiming, among other things, that Holdings had contracted to buy back his shares and then breached that contract. The district court found that Holdings had contracted to buy Pow-ell’s stock and breached the contract. The district court awarded Powell the amount Powell would have received had he sold his nonpledged stock for $ 125.456 per share. Holdings appealed, claiming that O’Halloran did not have authority to agree on its behalf to buy Powell’s stock, the district court’s finding that O’Halloran and Powell entered into a contract was contrary to the evidence, and any agreement was not the parties’ final expression, is void for lack of consideration, and is against pub-lic policy. As an agent of Holdings, did O’Halloran enter into a contract on Holdings’ behalf? Why? [ Powell v. MVE Holdings, Inc., 626 N. W. 2d 451 ( 2001).]

6. Ward Manufacturing, Inc., decided to construct a casting facility on its property located in Blossburg, Pennsylvania. Ward entered into a written contract with Welliver- McGuire, Inc. Under the terms of the contract, Welliver agreed to indemnify Ward for any and all claims for bodily injury and property damage arising out of the performance of the work identified in the contract. Welliver assumed control, possession, and responsibility over the construc-tion site throughout the project. Ward did, how-ever, maintain an on- site representative to act as liaison and monitor the status of the project. Ward also had a safety representative on- site periodically to inspect the work site. Jonathon Olin worked as a carpenter for Welliver. Olin, while engaged in surveying activities on the Ward construction site, fell into an unbarricaded excavation pit allegedly covered with water and mud. As a result of the fall, Olin purportedly suffered severe injuries. Since the date of the accident, Olin had received total disabil-ity workers’ compensation benefits from Welliver. Olin brought suit against Ward for negligence. Ward argued that Olin, through Welliver, was an independent contractor and that Ward therefore was not liable to Olin for damages. Furthermore, Ward argued that Welliver, and not Ward, was in charge of the site. Ward then moved for summary judgment. Was Ward successful in its motion for summary judgment? Why? [ Olin v. George E. Logue, Inc., 119 F. Supp. 2d 464 ( 2000).]

5. Eleanor Schock discovered that her late father’s attorney, Pat Nero, had embezzled from the estate of her father, Miller, including the sum of $ 23,331.72 in Miller’s savings account at Old Stone Bank. At the time Nero withdrew the funds, Old Stone was being run under the conservatorship of the Reso-lution Trust Corporation ( RTC), the FDIC’s statu-tory predecessor. As holder of her father’s estate’s claims, Schock sued the FDIC, as receiver for Old Stone, for breach of contract, alleging that the bank permitted an unauthorized signatory ( Nero) to withdraw funds on deposit in the Miller sav-ings account. The FDIC receiver argued that the bank had paid Nero, a fiduciary who was autho-rized to receive the money in the account, in good faith and should not be held liable because Nero misappropriated the money. Schock argued that Nero’s apparent authority to withdraw the money as Miller’s agent ended by operation of law when Miller died. In response, the FDIC receiver argued that apparent agency terminates only when a third party has notice of the termination. Schock offered evidence that the bank had actual notice that Miller had died when it permitted the Nero savings account withdrawal. Schock’s evi-dence included a bank employee’s statement that the bank had in place a procedure for checking the obituaries in the local paper to see whether bank clients had died, as well as the fact that an obitu-ary for Miller appeared in that paper. Was Schock successful at trial? Did the publication of an obit-uary constitute actual notice? [ Shock v. United States, 254 F. 3d 1 ( 2001).]

6. Water, Waste, & Land, Inc., is a land development and engineering company doing business under the name “ Westec.” Donald Lanham and Larry Clark were managers and also members of Preferred Income Investors ( PII), LLC. PII is a limited lia-bility company. Clark contacted Westec about the possibility of hiring Westec to perform engineering work in connection with a development project. In the course of preliminary discussions, Clark gave his business card to representatives of Westec. The business card included Lanham’s address, which was also the address listed as PII’s principal office and place of business. While PII’s name was not on the business card, the letters “ PII” appeared above the address on the card. However, there was no indication as to what the acronym meant or that PII was a limited liability company. Although Westec never received a signed contract, it did receive ver-bal authorization from Clark to begin work. Westec completed the engineering work and sent a bill for $ 9,183.40 to Lanham. No payments were made on the bill. Westec filed a claim against Clark and Lanham individually as well as against PII. At trial, PII admitted liability for the amount claimed by Westec. Accordingly, the court dismissed Clark from the suit, concluding that he could not be held personally liable, and entered judgment in the amount of $ 9,183 against Lanham and PII. Lanham appealed. On appeal, was Lanham found liable for the amount due to Westec? Why? [ Water, Waste, & Land v. Lanham, 955 P. 2d 997 ( 1998).]

Week 12

7. Defendant Tubbs met her fiancé, Church, over the Internet. After several years of correspondence and visits, they became engaged in February 2000. Church and Tubbs planned to be married in Las Vegas in July 2000. Two months before the engagement, Church paid off $ 4,100 of Tubbs’s credit card debt. He also gave Tubbs an engagement ring that he purchased for $ 7,274.42. On March 15, 2000, he deposited $ 194,852.56 in Tubbs’s bank account to fund the purchase of land and a residential home in Michigan. Tubbs purchased the home in both of their names as joint tenants, on Church’s instruc-tions, and in April she moved in. Church moved some personal property to the residence, including a family heirloom diamond ring. On June 5, 2000, Tubbs e- mailed Church stating that their relation-ship was over because she was horrified after seeing his “ bizarre and abnormal behavior” on the Internet and because she had discovered that he led a “ risqué lifestyle as a cross- dresser and bi- sexual.” Tubbs rejected Church’s demands to repay the $ 4,100 and to return the engagement ring, his personal property, and her interest in the Michigan home. On July 24, 2000, Church died in England. Church’s estate subsequently filed suit to recover the property. The court entered a final judgment enti-tling the estate to the rings or a money judgment for their values; the real property, partitioned as a matter of law to account for its appreciation; complete right, title, interest, and possession of the land and residential home, free and clear of any claim, right, title, or interest of Tubbs; and a money judgment in the amount of $ 75,000 ( the amount of Tubbs’s home equity mortgage), less credits to Tubbs of $ 13,000 for property taxes she paid from 2000 through 2005, or a modified money judgment in the amount of $ 62,000. Tubbs appealed. What arguments might she have made on appeal? How do you think the appellate court ruled in this case, and why? [ Salens v. Tubbs, 2008 WL 4072342 ( C. A. 6 Mich.).]

8. Davis and Hansen own adjacent lots. When Davis bought his lot in 1984, the warranty deed contained an easement across the lot he was purchasing to the property now owned by Hansen. The easement in the deed to Davis from the seller, Rodgers, stated that the easement on the land “ shall be only for the benefit of Grantor [ Rodgers], his grantees, heirs and assigns.” Davis had been advised by a lawyer that the easement was not legally enforceable, so Davis put a garden on the easement area. Hansen bought his lot in 2006 and offered Davis $ 5,000 for an easement to access the property. Davis said no. Hansen then purchased the easement written in 1984 from Rodgers’ widow, who had inherited Rodger’s property. Once he had bought the easement, Hansen told Davis he was going to use his easement and he immediately cleared the easement on Davis’s property for a road and water and sewer lines. Davis then sued Hansen for trespass. Hansen counter-sued, seeking to prove ownership of the easement. The trial court ruled in favor of Davis, holding that Hansen had engaged in adverse possession of the easement by planting a garden over the ease-ment, which extinguished it, and ordered Hansen to pay $ 13,345 in “ restoration” damages. Hansen appealed. What do you believe happened on appeal? Why? Hansen v. Davis, 220 P. 3d 911 ( Sup. Ct., Alaska, 2009)

8. Carol Matoush owns property that grants her an easement dating back to 1901. The easement at issue here creates a right- of- way across David and Debra Lovingood’s property for access between Matoush’s property and an alley adjacent to the Lovingoods’ property. The easement has not been used as a surface right- of- way across the Lovin-goods’ property since at least 1969. At some point before 1969, fences were built to enclose most of the easement area within the Lovingoods’ backyard. Matoush attempted to sell her property to a buyer who inquired about using the easement as a drive-way for vehicle access between Matoush’s property and the alley. There is a driveway on Matoush’s property that provides vehicle access to a garage located on Matoush’s property. The buyer has pro-posed removing the driveway, relocating the garage, paving the easement area, and using the easement as a driveway for vehicle access between the alley and the new garage. Matoush brought an action against the Lovingoods to enforce her right to use the easement as a right- of- way for vehicle access between her property and the alley. The Lovingoods counterclaimed that use of the easement as a right-of- way was terminated by either abandonment, due to the lack of use, or adverse possession, due to the construction of fences obstructing the easement in 1969. Does Matoush still possess the easement across the Lovingoods’ land? Why? [ Matoush v. Lovingood, 177 P. 3d 1262 ( Colo. 2008).]

9. After they were married, Helen and Burr Dietz purchased real property as tenants by the entirety. Helen subsequently moved out, and the parties agreed that if they were to become divorced, they would share the proceeds of the sale of their prop-erty. Helen and Burr divorced, and their tenancy by the entirety was converted into a tenancy in com-mon. Burr continued to live in the residence, and Helen brought an action for the partition or sale of the property. She sought to receive half of the pro-ceeds of the sale and rent for the period that she did not live on the property. The trial court deter-mined that the property could not be partitioned, and therefore it directed the parties to sell the property and divide the proceeds accordingly. Burr did not want to sell the property and appealed the court’s decision. How do you think the case was decided on appeal? [ Deitz v. Deitz, 664 N. Y. S. 2d 868 ( 1997).]