Board of Bar Examiners of the Supreme Court of Delaware
Dan Drinker was employed by the Greenway grocery store ("Greenway") in Capital City, Delaware. Notwithstanding a conviction in 2006 for driving under the influence of alcohol, Dan was known by all at Greenway as a dependable employee. He had a well-deserved reputation for partying and drinking heavily every weekend, but he was never late for work, and, prior to the incident described below, he had an unblemished safety record at work.
On Friday, June 15, 2007, as he had done every Friday night for several years, Dan met his friends at Capital City Brewery. That night, however, he drank more and stayed out longer than usual. When he arrived home at 5:00 a.m. on Saturday, June 16th, he was still intoxicated.
Dan was scheduled to work at Greenway at 8:30 a.m. on Saturday, June 16th. As he left his home at 8:00 a.m., he commented to his wife Debbie Drinker: "I think I'm still drunk."
Dan pulled into the Greenway parking lot at 8:25 a.m. He was speeding, swerving and he parked his car crooked across two parking spaces. Victor Victim had seen Dan's car pull into the parking lot and watched the car until it stopped. Immediately after Dan stepped out of the car, Victor noticed that Dan's eyes were bloodshot and that he was extremely disheveled. Right away, Victor commented to Fred Friend: "That boy must be drunk."
As usual, Dan made it into work on time and started stocking the shelves. At approximately 9:00 a.m., Dan was on a ladder placing cans of soup on the top shelf. While on the ladder, Dan started to fall asleep. The pastor of his church, Reverend Richard, was at the end of the aisle and noticed that Dan was falling asleep. He yelled: "Wake up Dan", but it was too late. Dan lost his grip on a extra large 10 pound can of beans. The can fell, hit Victor in the head and knocked him unconscious. Victor has been in a coma ever since. Dan also fell from the ladder and broke his arm.
Dan felt horrible about what had happened. When he was in the emergency room to get treated for his broken arm, he said to Dana Doctor: "I was still drunk when I got to work. If I had sobered up, maybe this never would have happened. In fact, I think I'm still drunk now, so don't give me any medicine that shouldn't mix with alcohol."
The next day, he sought guidance from Reverend. Dan told Reverend: "I am so sorry for what I did. I was still drunk. It's all my fault. I hope that some day I can be forgiven." The following day, he went to see Victor's wife Vera and said: "I don't have much money, but I am willing to help pay for Victor's medical expenses."
Reverend wasn't the only person who saw what had happened. Wally Witness also observed the incident. Being a good citizen and knowing that he had a tendency to forget things, Wally wrote down everything that he saw in his daily journal as soon as he got home from the Greenway.
On December 3, 2007, Vera and Victor Victim, filed a lawsuit in the Delaware Superior Court against Dan and Greenway, alleging that both Dan and Greenway were negligent. The complaint sought an unspecified amount of compensatory damages but did not seek punitive damages.
In an attempt to avoid continuing negative publicity, Greenway set up a meeting with Vera and her lawyer to try to settle the case. During the meeting, which was also attended by Greenway's lawyer, the president of Greenway, Pam President, said: "I know that a jury may very well decide that Greenway was partly responsible for this tragedy, but in light of what Dan did, no jury is going to award a big verdict against Greenway. You should take what we're offering now. Nothing like this will ever happen in my store again because I've instituted a new policy -- top shelves can only be stocked when there are no customers in the store." Vera and Greenway were not able to agree upon a settlement.
After the lawsuit was filed, Dan retained Linda Lawyer as his counsel. A few days later, Dan talked to Linda on his cell phone during a break from his new job at the Capital City Mall. Dan told Linda that the accident was his fault but that he could not afford to pay a lot of money. Wally was sitting with some other mall customers on a bench right behind Dan and heard the whole conversation. When he got home, Wally again wrote everything down in his journal.
Prior to trial, Dan's drinking finally caught up with him. Early one Saturday morning after leaving the Capital City Brewery, Dan fell asleep at the wheel and hit a tree. Shortly before he died in his car, Dan said to Marcia Motorist who had stopped to try to help him: "Please tell Victor that I am sorry for what I did to him."
A. Assume that the individuals listed below will testify at trial. Will the statements that Dan made to them be admissible at trial? Why or why not?
(1) Debbie Drinker
(2) Reverend Richard
(3) Dana Doctor
(4) Linda Lawyer
(5) Marcia Motorist
(6) Vera Victim
B. The Victims would like to introduce evidence of Dan's 2006 conviction, his reputation for partying and his usual Friday night activities with his friends. Will such evidence be admissible at trial? Why or why not?
C. Dan's estate would like to introduce evidence regarding his safety record at work and the fact that he was a dependable employee. Will such evidence be admissible at trial? Why or why not?
D. During her cross examination at trial, the Victims would like to ask Pam President about the statements she made during the settlement meeting. Will those statements be admissible? Why or why not?
E. The Victims would like to have Fred Friend testify about the statement that Victor Victim made to him. Will that statement be admissible at trial? Why or why not?
F. The Victims would like to introduce Wally Witness' journal entries into evidence. Are those entries admissible? Why or why not?
Andrew and Barbara were high school sweethearts in Newark, Delaware. They graduated from high school in 1956. They both attended the University of Delaware and they got married while in college. Following graduation, Andrew took a job as a high school English teacher.
In 1968, Andrew and Barbara's first child, Chad, was born. In 1970, a second son, David, was born.
In 1972, Andrew and Barbara had wills prepared by their attorney, Edward. In their wills, Andrew and Barbara left all of their assets to each other and upon the death of both, "then to our children, Chad and David, in equal shares, per stirpes, except for any specific items of property to be disposed of by a separate writing pursuant to 12 Del. C. S212."
On June 15, 1972, Andrew and Barbara executed their wills at Edward's office. Two of Edward's secretaries, Felicia and Glenda, were present when Andrew and Barbara signed their wills but were not aware of the nature of the documents that Andrew and Barbara were signing. Edward then notarized the signature of both testators and both witnesses.
Though Andrew and Barbara were not expecting to have any more children, in 1975 they had a third son, Henry.
In 1993, Andrew and Barbara divorced and Barbara moved out of the home. For the rest of the nineties, Andrew had little contact with his three sons. Andrew retired from teaching in 1996.
During the late nineties, through shrewd investing in internet stocks, Andrew amassed a personal fortune of over five million dollars. Nonetheless, he continued to reside in the family's modest home.
In 2000, Chad called Andrew and expressed an interest in renewing their relationship. After that, Andrew and Chad began to spend significant time together. In 2002, Andrew decided to execute a new will. Using his 1972 will as a model, Andrew typed up a will revoking any previous wills, leaving all of his assets to Chad (except for items left pursuant to a 12 Del. C. S212 writing), and naming his attorney Edward as executor.
When Chad visited Andrew on December 15, 2002, Andrew told him, "This is my new will. I'm leaving everything to you." Andrew signed the will in Chad's presence, and Chad signed the will as a witness. Andrew then walked next door to his neighbor Ike's house and asked Ike if he could witness a will that he (Andrew) had just signed. Ike said, "Sure," and signed the will as a witness while Andrew looked on. The will was not notarized.
Shortly thereafter, Chad stopped visiting Andrew and he only called occasionally. Andrew grew increasingly lonely. In 2005, Andrew was diagnosed with lung cancer.
In early 2006, Andrew's neighbor, Ike, and his wife, Joyce, sold their home to a twenty-five year old high school history teacher, Kirk, and his wife, Laurie. Kirk and Laurie struck up a friendship with Andrew. They helped Andrew with chores around his house and took him to his chemotherapy treatments.
Despite the chemotherapy, Andrew's cancer progressed. Eventually, Andrew became bed-ridden. Andrew was prescribed strong painkillers and received in-home care. Kirk and Laurie visited frequently and helped with Andrew's care. On December 1, 2007, Andrew told Kirk that he wished to execute a new will in Kirk's favor that would also name Kirk as the executor of his estate. Kirk told Andrew that he had a friend, Mike, who was an attorney. Kirk called Mike and told him that Andrew wanted a will drawn up naming Kirk as sole beneficiary and executor.
Mike drew up the will based on the information given him by Kirk, and included a standard provision revoking any previous wills. Mike came to Andrew's house on December 15, 2007. Kirk and Laurie were not present. Mike met privately with Andrew for half an hour and discussed the will with him. Subsequently, Mike called in the two nurses, Nancy and Olivia, and asked them if they would witness Andrew's will. Andrew signed the will, Nancy and Olivia signed the will in Andrew's presence after watching Andrew sign the will, and Mike notarized the will.
Andrew passed away on January 1, 2008. Following Andrew's death, Kirk opened Andrew's safe deposit box and found a small cardboard box with a paper taped to the lid with the following statement: "The gold watch herein goes to my nephew, Peter, upon my death. Andrew. October 15, 1998." The entire statement, including Andrew's name, was typed.
You are an attorney. Kirk has retained you to handle the administration of Andrew's estate and to defend a possible will contest. In analyzing the facts of the case, how would you respond to the following questions?
A. Were there any problems with or deficiencies in the execution of Andrew's 1972 will? Explain your answer.
B. Were there any problems with or deficiencies in the execution of Andrew's 2002 will? Explain your answer.
C. Analyze the prospects for success of a possible will contest brought by Chad to challenge Andrew's 2007 will. Give a full explanation of your reasoning.
D. For purposes of this question only, assume that Andrew's 2002 and 2007 wills are invalid and that his 1972 will is valid. What share, if any, of Andrew's estate does each of the following receive? (Assume that each of these individuals have survived Andrew.)
Fully explain your answer as to each.
E. For purposes of this question only, assume that Andrew's 2007 will is invalid, and that his 2002 will is valid and effectively revoked his 1972 will. What share, if any, of Andrew's estate does each of the following receive? (Assume that each of these individuals have survived Andrew.)
Fully explain your answer as to each.
F. Assume, for purposes of this question only, that Andrew's 1972, 2002, and 2007 wills are all invalid, and that Andrew executed no other wills or testamentary documents during his lifetime. How will Andrew's estate be distributed? Explain your answer.
Mulch Company, Inc. ("Mulch") is a Delaware corporation located in Delaware. Mulch produces, packages, and distributes garden mulch in the Middle Atlantic Region. Mulch's Certificate of Incorporation authorizes the issuance of 1,000,000 shares of common stock. Mulch's Certificate of Incorporation also includes a provision that limits the liability of the Mulch directors to the fullest extent permitted by 8 Del. C. S 102(b)(7). Mulch common stock trades publicly on the New York Stock Exchange. As of June 1, 2008, Mulch had 900,000 shares of common stock issued and outstanding.
Mulch's Board of Directors includes five directors. Al Allen ("Al") is the founder, Chairman of the Board, and Chief Executive Officer of Mulch. Bart Allen ("Bart"), Al's son, is Chief Financial Officer and a director of Mulch. Al and Bart each are paid an annual salary by Mulch in the amount of $250,000. Carla Combs ("Combs"), Dave Durkin ("Durkin"), and Elvis Early ("Early") are directors of Mulch who are otherwise unaffiliated with Mulch or the Allen family.
Allen Trucking, Inc. ("ATI") is a Delaware corporation which provides trucking services to a single customer, Mulch. ATI is 100% owned by Al and Bart. Al is Chairman and Chief Executive Officer of ATI. No contract governs the relationship between Mulch and ATI, and Mulch is not precluded from purchasing trucking services from other competing providers. However, ATI has been Mulch's exclusive provider of trucking services since Mulch's inception. Mulch paid ATI approximately $2 million for trucking services in 2007. In late March 2008, Cheaper Trucking, Inc. ("Cheaper"), a nationwide trucking company, commenced operations in Delaware and submitted a proposal to Mulch to provide trucking services to Mulch at approximately 75% of the cost at which ATI was providing the same services to Mulch.
The Mulch Board of Directors held its regular quarterly meeting on April 30, 2008. All directors attended in person. At the meeting, Al expressed his disappointment that Mulch's stock trading price had not increased over the past twelve months to reflect what Al believed were substantial cost-cutting measures implemented by Mulch management and Mulch's continued growth in sales. The meeting continued and the Mulch directors discussed the Cheaper proposal and unanimously determined to form a Special Committee consisting of Combs, Durkin, and Early to consider the Cheaper proposal. Al informed the Committee that ATI would not match Cheaper's price for trucking services to Mulch but that Al and Bart would agree to sell ATI to Mulch in exchange for 250,000 shares of Mulch common stock. Al also provided the Committee with a written appraisal by Al's personal accountant stating that: (1) the fair market value of ATI was $7 million as of December 31, 2007, and (2) the fair market value of 250,000 shares of Mulch stock was $7.5 million as of December 31, 2007. The Mulch Special Committee broke from the meeting and met in a separate room without Al and Bart for 90 minutes and approved the purchase of ATI for 250,000 Mulch common shares. Immediately thereafter, the Special Committee directors rejoined with Al and Bart, and the entire Mulch Board voted unanimously to approve Mulch's acquisition of ATI.
On May 1, 2008, Mulch publicly announced in a press release that the Mulch Board had received and rejected a proposal from Cheaper to provide trucking services to Mulch. The press release included no information regarding the Board's consideration or approval of Mulch's acquisition of ATI.
Mulch holds its annual stockholders meetings on the first Monday in June of each year, and mails its annual proxy statement to shareholders approximately thirty days prior to the meeting. Al and Bart handled the drafting of the 2008 proxy statement. They provided a draft to all directors for review prior to mailing and received comments from Combs, Durkin and Early. Thereafter, on May 1, 2008, as he was preparing to send the final draft proxy statement for the 2008 annual meeting to the printer for printing and mailing, Al realized that the Mulch Certificate of Incorporation did not authorize sufficient shares of stock to enable Mulch to issue the 250,000 shares needed to complete the ATI acquisition. Al added to the proxy statement a proposal to amend the Mulch Certificate of Incorporation to increase the number of authorized shares from 1,000,000 shares to 1,150,000. Al also included a statement that the purpose of the amendment was to provide additional shares "for general corporate purposes." No other information was stated in the proxy statement regarding the purpose of the amendment. Other than Al and Bart, no other Mulch director was made aware of or approved Al's inclusion of the amendment proposal in the proxy statement. The proxy statement was printed and mailed to Mulch stockholders on May 2, 2008.
The Mulch annual meeting was held on June 2, 2008. Owners of 675,000 shares were present in person or by proxy and 675,000 shares were voted in favor of the election of Al, Bart, Combs, Durkin, and Early as directors, and 675,000 shares were voted in favor of the proposal to amend the Mulch Certificate of Incorporation.
On July 12, 2008, Al received a definitive agreement for Mulch's acquisition of ATI. The agreement had been drafted by Al's personal attorney at Al's request. Al executed the agreement on behalf of Mulch as Chairman and Chief Executive Officer of Mulch, and on behalf of ATI as Chairman and Chief Executive Officer of ATI. On the same day, Mulch publicly announced that Mulch had agreed to acquire ATI from Al and Bart in exchange for 250,000 Mulch common shares, and that the Special Committee and Board had approved the acquisition on April 30, 2008.
Joe Client ("Client") owns 20 shares of Mulch common stock which he purchased on January 1, 2008. Client has contacted a partner in the firm at which you are employed as an associate. The partner has asked you to prepare a memorandum discussing any possible recourse the Mulch public stockholders may have to challenge Mulch's acquisition of ATI under Delaware state law. The partner has directed you specifically to ignore any possible Federal securities law claims and to address the following questions under Delaware law:
A. What fiduciary duties did the Mulch directors have in considering and approving the acquisition of ATI? Discuss what was required under each such duty.
B. Identify and discuss any claims the Mulch stockholders may have against the directors.
C. Identify and discuss any possible defenses each of the directors may have to the stockholder claims.
D. What fiduciary duties did the Mulch directors have in seeking stockholder approval of the amendment to the Mulch Certificate of Incorporation to authorize additional shares?
E. Do the Mulch stockholders have any meritorious claims that the directors breached any legal requirements or their fiduciary duties in seeking the approval of the amendment to the Certificate of Incorporation?
Bill and Jane Smith live in New Jersey. They are avid history buffs and are committed to the preservation of revolutionary war artifacts in the mid-Atlantic region. For over sixty years, Bill's great Aunt Tillie owned and lived on Oldacre, a 100 acre farm in New Castle County, Delaware. According to legend, part of the site of a major Revolutionary war battle is on Oldacre.
In December 2006, Aunt Tillie turned 82 years old and she decided that she could no longer manage Oldacre. On February 1, 2007 she agreed to sell Oldacre to John Developer's company, Razor, Inc. ("Razor"), for $10 million. Razor wanted the land for development and intended to build town homes and a convenience store on the site. The contract for the sale of the land required Aunt Tillie to support Razor's development plan.
Following the April 1, 2007 closing on Oldacre, Aunt Tillie told Bill and Jane about the sale and Razor's plan for the development of Oldacre. The next day, Bill and Jane immediately began sending letters to the Wilmington newspaper criticizing the proposed development, and alleging in one of their letters that Razor would "do what ever it takes" to get the development approved. Bill and Jane also attempted to generate mass opposition to the development by sending letters to other Delaware newspapers and by feeding various blogs with information about the history of Oldacre and what they called Razor's "capitalistic motivations". In their letters and other communications, they implied that they were acting for Aunt Tillie and that she supported them in their fight.
In April 2007, Bill and Jane attended three public meetings in Delaware at which Razor's development plan was presented to certain governing agencies for review and approval. In one of the meetings, they both spoke out against the plan. However, most of their anti-development efforts took the form of letters and emails, which numbered in the hundreds and were sent to newspapers and government officials.
Developer felt strongly that he had been duped by the shrewd Aunt Tillie, who he thought was obviously working with Bill and Jane to try to block development of the property after getting Razor's $10 million. Developer, who is not an attorney, decided to file an action on behalf of Razor for fraud, breach of contract and rescission in Delaware's Court of Chancery. The complaint, which named Bill, Jane and Aunt Tillie as defendants, was filed on May 2, 2007. At the same time, Razor also prepared Requests for Admissions directed to all three defendants.
Developer gave a copy of the Complaint and the Requests for Admissions to Bill and Jane when they visited Oldacre on May 3, 2007. The Summons, Complaint and Requests for Admissions were also hand-served on Bill and Jane and Aunt Tillie by the New Castle County Sheriff on May 4, 2007.
On June 8, 2007, Bill and Jane's lawyer filed a notice of removal to the U.S. District Court for the District of Delaware. No answer or responsive motion had been filed as of that date.
Assume that you are a law clerk for the Delaware federal judge assigned to the case and that she has asked you to answer the following questions:
A. Was the notice of removal timely filed? Explain your answer.
B. Assume that the manner of service of process on all defendants was proper under Delaware law. Does the District Court have personal jurisdiction over Bill and Jane? Explain your answer.
C. Does the District Court have subject matter jurisdiction over the complaint? Explain your answer.
D. If the case were remanded to the Court of Chancery, would that Court have subject matter jurisdiction over the complaint? Explain your answer.
For purposes of the following questions, assume that the case was remanded to and proceeds in the Court of Chancery and that you are the Vice-Chancellor assigned to hear the case.
E. Can Developer represent Razor? State your reasons.
F. Each of the Defendants responded to the Requests for Admission 43 days after they were served on them. Razor has filed a motion to have the Requests for Admissions deemed admitted based on a claim that the responses were not timely served.
What is your ruling? State your reasoning.
For purposes of questions G and H, assume that the Responses to Requests for Admissions were timely served. All of the Defendants responded to all of the Requests by either: (1) denying knowledge sufficient to allow them to admit or deny the requests; and/or (2) objecting to the requests as presenting genuine issues for trial. The Responses were not verified under oath by any of the defendants.
G. Razor moved to compel. How would you rule on the motion? Explain your ruling as to each objection raised in the responses.
H. Razor also moved that all the Requests be deemed admitted due to the lack of any sworn verification by defendants. What is your ruling? State your reasoning.
I. Razor served a Rule 45 subpoena on Bill and Jane's telephone company, requesting production of their telephone records for the last 2 years. The telephone company is incorporated in the State of Delaware. The telephone company filed a motion to quash the subpoena on the grounds that it has no records in Delaware. The company filed with its motion an affidavit of its Chief Executive Officer in which she stated that all the records of the telephone company are, and always have been, stored in Virginia. Razor has moved to compel the production.
Should you grant the motion to quash or the motion to compel? State your reasoning.
J. On October 1, 2007, defendants' counsel notices the 30(b)(6) deposition of Razor for October 14, 2007. With the notice of deposition, defendants' counsel serves a Rule 45 subpoena requesting production, on or before October 13, 2007, of certain documents, which were described in the subpoena. Razor moves to quash the Rule 45 subpoena. What is your ruling? State your reasoning.
Jack and Jill were married on March 15, 2000. They purchased Blackacre from Bob Builder on May 1, 2000 and received the deed to the property on the same day. The deed was silent as to the type of tenancy created.
Blackacre consisted of a one acre lot with a newly constructed four bedroom house in a planned development called Rolling Meadows. Rolling Meadows is a subdivision of roughly equal sized lots. Each lot has a four bedroom home which was designed and built by Bob Builder.
In 2003, faced with mounting debts and constant bickering, Jack and Jill decided to divorce. Because the divorce was amicable and because Blackacre was the only property they owned together, Jack and Jill decided to sell Blackacre after the divorce was final rather than asking the court to divide the property. Their divorce became final on October 15, 2003.
A month after their divorce was finalized, Jack and Jill sold Blackacre to Larry and Mike, who were best friends and played in a band together. Larry and Mike viewed each other like brothers so they wanted to take title to Blackacre as joint tenants with a right of survivorship. On November 15, 2003, the closing was held for Blackacre and the deed that was issued described Larry and Mike "as joint owners." However, because Mike made the down payment for the purchase of Blackacre, the title gave him 55% ownership of the property and Larry 45% ownership. Nevertheless both Larry and Mike were given the right in the deed to "equally use and enjoy the entire property."
A. Identify the tenancies by which Jack & Jill held Blackacre between May, 2000 and November 14, 2003.
B. Identify the tenancy by which Larry & Mike held Blackacre as of November 15, 2003. Explain your answers.
In the properly recorded Declaration of Covenants for Rolling Meadows, there were several properly recorded restrictive covenants affecting all of the lots in the development. Article 1 of the Declaration of Covenants specifically barred a home owner from installing "satellite dishes, television antenna, and/or television towers so long as cable television is available." Article II provided:
No building shall be commenced, erected, maintained or used upon any of the Lots which are the subject matter of this Declaration until complete and comprehensive plans and specifications, showing the nature, kind, shape, height, materials, floor plans, exterior architectural scheme, location and frontage on the Lot of the building, and the grading and landscaping of the Lot to be built upon or improved, shall be submitted to, and approved in writing by, the Home Owners Association ("Association"), through its duly designated Architectural Review Committee ("ARC"). In passing upon such plans and specifications, or grading and landscape plans, the ARC shall have the right to take into consideration the suitability of the proposed building and/or the materials of which the building is to be built and the site upon which it is proposed to be erected and used, the harmony thereof with the surroundings and the effect of such improvements, additions, alterations or changed use, as planned, on the outlook from the adjacent or neighboring property, and any and all factors which in its opinion would affect the desirability or suitability of such proposed improvements, erections, or alteration or change. In order to insure the development and maintenance of the properties as a residential development of high standard, the Owner of each Lot by accepting title thereto or by occupying the same, hereby covenants and agrees that no building shall be erected, altered, placed or permitted to remain upon any such Lot, unless and until plans and specifications therefore have first met the requirements of this Section.
Larry and Mike were fans of Manchester United, an English soccer club. Because Manchester United's games were only available through the use of a satellite dish service, Larry and Mike had a satellite dish installed on their lot in Rolling Meadows. Cable television was available in Rolling Meadows at that time. Additionally, because of the low maintenance costs of vinyl siding, Larry and Mike submitted a plan to the Association for review by the ARC that would permit them to remove the wood siding from their house and replace it with vinyl. There were no specific covenants in the Declaration of Covenants requiring wood siding or prohibiting aluminum, concrete, or vinyl siding. However, all homes in Rolling Meadows at that time did have wood siding. The ARC denied the request, finding that vinyl siding was not in keeping with the appearance of the other houses in the neighborhood and would lower the property value of the homes in Rolling Meadows. Undeterred, Larry and Mike replaced the wood siding with vinyl siding in June 2004.
C. Excluding any issues related to privity and whether the covenants run with the land, in an action by the Home Owners Association to bar Larry and Mike from maintaining the satellite dish, what are the reasonable arguments supporting the Home Owners Association's claim? Explain your answer.
D. Excluding issues related to privity and whether the covenants run with the land, in an action by the Home Owners Association to bar Larry and Mike from maintaining the vinyl siding, what reasonable arguments do Mike and Larry have against the enforcement of Article II? Explain your answer.
Mike decided to take a break from music in the summer of 2005 and moved to a small cabin he owned on 200 acres of land ("Brownacres"). However, because he needed money to finance his ongoing battle with the Association, Mike decided to sell half of Brownacres. He divided the property into two equal parcels. Mike's cabin is on Parcel 1 which borders the public road. A dirt road crossing Parcel 1 is the only access to Parcel 2.
In September 2005, Dan Developer purchased Parcel 2. Prior to the purchase, Dan disclosed to Mike that he was a land developer, but he told Mike that he intended to build his personal retirement home on the property. In the same conversation, Dan also told Mike that there was a small possibility he would create a residential development on Parcel 2. Mike told him that either plan was fine with him. He also told Dan that Dan's construction crew had permission to use Parcel 1's dirt road to access Parcel 2.
Six months after the purchase, Dan decided that he was not ready to retire and that Parcel 2 would offer a very profitable spot for a development. Dan's deed provided that "the owner of Parcel 2 may use the dirt road on Parcel 1 to access Parcel 2 for personal use." On April 1, 2006, Mike awoke to the sound of construction trucks for Dan's development company running over his dirt road and heading onto Parcel 2.
E. If Mike sued to enjoin the use of the dirt road by Dan's construction crew for the construction of a development, what reasonable arguments would be available to Dan? How could Mike respond to those arguments?
In April 2007, Mike decided to develop Parcel 1 into a residential development to compete with Dan. Mike hired an engineer to survey Parcel 1 in order to plan his development. The surveyor reported to him that a corn field on a neighboring farm extended about 2 acres onto Parcel 1. Upon meeting Fred Farmer, the owner of the farm, Mike learned that Fred had purchased his 200 acre farm in January 1985 and had been farming the 200 acres, including the 2 acres on Parcel 1, more or less continuously since then. Fred stated that he never had any intention of encroaching on Parcel 1. However, he refused to plow under the portion of his corn crop that extended onto Parcel 1.
In May 2007, Mike brought an action to enjoin Fred from farming on Parcel 1. During discovery, Mike learned that Fred farmed the 2 acres on Parcel 1 from April 1985 to August 2000. Fred did not farm at all from August 2000 to April 2004. However, during this time period, Fred periodically walked and hunted on the 2 acres on Parcel 1. From April 2004 to the time of the lawsuit in May 2007 Fred again farmed the 2 acres on Parcel 1. During the time that he farmed, Fred's farm equipment, Fred's farmhands, and Fred were routinely and openly on the 2 acres of Parcel 1, which he thought were his own.
F. What arguments does Fred have that the 2 acres on Parcel 1 are his?
Assume that you are an associate in a law firm. The senior partner in your firm tells you that six of the firm's clients have been indicted, and that the firm's investigator has summarized the evidence against the clients in the following case notes. You are to assume that all of the described evidence in the case notes is credible and legally-obtained. She asks you to review the case notes and then prepare a memorandum:
A. Discussing, with respect to each charged crime, whether the evidence supports the charge;
B. Identifying, for any crime not supported by the evidence, the elements of the crimes charged that evidence does not support, with an explanation as to why the element is not supported; and
C. Identifying, for any crime not supported by the evidence, the most serious lesser included offense, if any, that the evidence does support, and explaining why.
Case #1. The Defendant is Andy Anderson. He is charged with Felony Theft. The charge is based on the report to the police of John Smith, age 60, made on June 2, 2008. Smith owns a construction business in Wilmington, Delaware, where he employed Anderson as the bookkeeper. Smith says that on June 1, 2008, he left work at 6 p.m., and that when he left, Anderson was the only other employee still at work. Anderson had a set of keys to the building and had the password for the alarm system. Smith was the first person to arrive at work on June 2. He found the door locked and the alarm system armed. When he got in, he noticed that that a computer and monitor that belonged to the construction company, and which sat on Anderson's desk, were gone. Nothing else was disturbed on the premises. Smith produced an invoice, which he turned over to the police, showing that the business had purchased the computer and monitor on June 15, 2004, for $1,599. Smith said that Anderson had worked for the construction company for fifteen years. Anderson never returned to work.
Case #2. The Defendant is B.A. Barnett. She is charged with Murder 1st and Possession of a Firearm During the Commission of a Felony. The deceased is Joe Taylor. According to the Medical Examiner, the cause of death is a single gunshot wound to the head. According to various witnesses interviewed by the police, there was a gathering of about fifteen people in Dover, Delaware, on May 31, 2008. Among them were Barnett and Taylor. The witnesses said Taylor produced a .45 caliber handgun, which he said belonged to his father, and boasted loudly that he was an excellent shot. Barnett then said that she too was an excellent shot, and eventually Barnett and Taylor made a bet of $100 as to who was the better shot. They decided they would have a contest to settle the bet. Barnett held out a beer bottle, and with Taylor thirty paces away, Taylor took a shot at the beer bottle. Taylor missed the beer bottle. Taylor then gave the gun to Barnett, and took the beer bottle from her. Taylor then held out the beer bottle, and Barnett took a shot at it from thirty paces away. Her shot missed the beer bottle, but hit Taylor in the head. One of the witnesses called 911 on a cell phone. When the police arrived, Barnett was sitting on the ground, crying.
Case #3. The Defendant is Carl Casper. He is charged with Trafficking in Cocaine, Possession with Intent to Deliver Cocaine, and Possession of Cocaine within 1000 Feet of a Park. According to police reports, two officers were driving in a patrol car on May 22, 2008, when they saw Casper standing on Market Street in Georgetown, Delaware. Both officers knew Casper from prior arrests and knew that there was a warrant out for him. At the time they saw him, he was standing about 1200 feet from River Road Park. One of the officers yelled, "Stop, Casper. It's the Police. We have a warrant for your arrest." Casper ran down Market Street, but the Police caught him when he was 500 feet from the entrance to the Park. They searched his pockets incident to the arrest, and found 90 "dime" bags of what appeared to be cocaine in his left front pocket. The Medical Examiner has since examined the bags and found that each contained 1/10 of a gram of cocaine.
Case #4. The Defendant is Daniel Dumas. He is charged with Aggravated Menacing. The victim is Angel Spring, age 11. Dumas is her uncle. According to Angel and her mother, on June 4, 2008, all three of them were at a family gathering in their home in Smyrna, Delaware. Angel and her mother say that Dumas, who is 6 feet tall, weighs about 215 pounds, and is a semi-professional boxer, was drinking heavily. Angel admits that she has a "smart mouth," and she was making fun of her uncle's haircut (he has a shaved head, and Angel was calling him "pencil head"). Dumas approached Angel, assumed a boxing stance, and put his fists a few inches from Angel's head. He cursed her out, and said he was going to beat her to a pulp. Before he could actually throw a punch, however, Angel screamed, turned, and ran. He then passed out, which is the state he was in when the police arrived and arrested him.
Case #5. The Defendant is Edie Edwards. She is charged with Robbery 1st. The victim, Maria Martinez, works in an office in Milford, Delaware. She reports that she usually eats her lunch on a bench in the public square near her office. On June 3, 2008, she took her handbag, in which she had her car keys and a wallet with $100 in cash, and went to the park. She put the handbag down next to her, and started to eat a sandwich. A woman who she did not know came up to her, and asked her if she knew where the public library was. Martinez stood up, and pointed in the direction of the library while starting to give directions. The unknown woman grabbed the handbag off the bench and ran away. Martinez called the police, who responded immediately. She gave them a detailed description of the woman, which the police broadcast to all the police in the area. Another officer saw a woman meeting the description, stopped her, recovered the handbag, the car keys, and the wallet. When Martinez later went to the police station, she identified the handbag, car keys, and wallet as being hers. She viewed a line-up, and identified Edwards as the robber.
Case #6. The Defendant is Flo Filcher. She is charged with Burglary 1st and Rape 2nd. The Defendant is 23 years old. On May 22, 2008, she and some friends went to "The High Seas," a new bar in Rehoboth, Delaware. According to her friends, she had one or two drinks, and met a young man named Randall Thomas, who described himself as a law student. They appeared to hit it off and went off alone. The owner of the bar, Johnny Sampora, who was working as a bartender because he was short-handed, heard some noise coming from a closet near the bathrooms where he kept bottles of whiskey, vodka, gin, etc., and went to investigate. When he opened the door to the closet, he found Filcher and Thomas having sexual intercourse. He noticed that a couple of the bottles of alcohol had been knocked over and broken, and called the police. When the police arrived, both Filcher and Thomas freely admitted to having sexual intercourse, and apologized for breaking the bottles. Filcher offered to pay for the damages to the liquor, but was very surprised when Thomas admitted that he was not a law student but a 15 year old high school student. Sampora stated that he normally kept the closet unlocked.
To further its commitment to diversity and non-discrimination, DiMaggio Law School enacted the following non-discrimination policy ("Policy") in 1974:
DiMaggio Law School is committed to a policy against discrimination based upon age, color, handicap or disability, ethnic or national origin, race, religion, religious creed, gender (including discrimination taking the form of sexual harassment), marital, parental or veteran status, or sexual orientation.
Since adopting its Policy, DiMaggio has refused to permit on-campus recruiting or to offer school resources, support, or endorsement to any employer that discriminates in hiring based on protected categories, including sexual orientation. Until 2006, DiMaggio's Policy was applied even-handedly to all employers, private or public, including the military.
In 2005, several members of Congress set out to reverse the sharp decrease in military enlistment, which they attributed to the public's growing opposition to the Iraq war and a growing lack of patriotism and sense of duty among America's best and brightest. Representative George Stanton from Louisiana, a decorated Vietnam War Veteran and powerful member of the House Appropriations Committee, proposed the Stanton Act. The Stanton Act states:
I. Denial of Funds for Preventing Military Recruiting On Campus
No federal funds may be provided by contract or by grant to an institution of higher education, either public or private (including any graduate school of such institution) if the Secretary of Defense determines that the institution (or any graduate school of that institution) has a policy or practice (regardless of when implemented) that either prohibits, or in effect prevents the Secretary of a military department or Secretary of Homeland Security from gaining access to its campus, or access to its students (who are 17 years of age or older) on campus, for purposes of military recruiting in a manner that is at least equal in quality and scope to the access to its campus and to its students that is provided to any other employer.
II. Super-Majority Veto
Notwithstanding the Secretary of Defense's decision to deny an institution funding pursuant to Section I of the Stanton Act, the Senate may, upon a two-thirds vote, authorize the payment of such funds to any such institution without further approval or consent of either (i) the House of Representatives, or (ii) the President of the United States.
After a bitter partisan fight, the Stanton Act passed by a narrow margin in both the House and Senate and was signed into law by the President in the fall of 2006. Since its passage, DiMaggio has struggled to both comply with the Stanton Act and to adhere to its own non-discrimination policy because of the government's longstanding policy banning homosexual activity in the military.
Prior to Congress's passage of the Stanton Act, many law schools, including DiMaggio, had openly protested against the military's policy, and had refused to let military recruiters participate in on-campus recruiting (just as they did to any employer that discriminated on the basis of sexual orientation). Since its passage, however, DiMaggio has believed it must comply with the Stanton Act or risk the loss of millions of dollars in federal funding for its parent university. For these reasons, DiMaggio has felt compelled to compromise its message of non-discrimination, and during the fall 2006 and 2007 recruiting seasons, DiMaggio granted military recruiters limited access to its students - access that it did not provide to any other employer that discriminated on the basis of sexual orientation. Specifically, DiMaggio permitted military recruiters to meet with students (but only those who first expressed interest in joining the military), and granted military recruiters access to student directory information so they could reach out to students by direct mail. However, DiMaggio has continued to refuse to allow military recruiters to participate in its fall on-campus interview program, which would give the military recruiters the best opportunity to meet and evaluate DiMaggio's students. DiMaggio's current policy with respect to the Stanton Act is substantively identical to policies at many other law schools around the country.
The Department of Defense ("DOD"), which is responsible for administering the Stanton Act, is not happy about DiMaggio's current policy regarding military recruiters. The DOD believes that DiMaggio (and other law schools with similar policies) have violated the Stanton Act by (i) maintaining policies that limited military recruiting, and (ii) not providing the military access to law school-sponsored interviewing programs that is equal to that afforded other employers. In a letter dated December 15, 2007, the DOD threatened to deny all federal funding to DiMaggio's parent institution for the 2008-2009 school year unless DiMaggio modified its recruiting policies to conform to the Stanton Act.
DiMaggio Law School finds itself in the same predicament as a number of other law schools around the country. In addition to the potential loss of federal funding directly attributable to a determination by the Secretary of Defense under the Stanton Act, DiMaggio and its peers are concerned that if they are identified as plaintiffs in a legal challenge to the Stanton Act, Congress will cancel appropriations to their parent institutions or sister schools and that Government bureaucrats will not award contracts or grants to those institutions as punishment for what they view as an affront to the military. They also fear that they will be singled out for virulent and unfair attacks by politicians and in the press, which will anger alumni and result in a loss of donations.
As a result, DiMaggio and several other law schools have formed an association called Law Schools for Justice ("LSJ") to challenge the constitutionality of the Stanton Act. LSJ membership is kept secret to alleviate members' fears of retaliatory efforts such as those described above. LSJ has filed a lawsuit against the DOD in federal district court challenging the constitutionality of the Stanton Act. No LSJ member school has joined the lawsuit, and LSJ has refused to disclose the identities of its members. It has simply pleaded generally that certain of its members have abandoned or severely compromised their non-discrimination policies due to threatened enforcement of the Stanton Act. DOD has moved to dismiss the complaint asserting that LSJ does not have standing.
A. Assume that you a clerk for the judge assigned to the case. Write a memo to the judge and analyze whether or not LSJ has standing to sue.
B. Now assume that DiMaggio has also filed a suit against the DOD in response to the DOD's letter of December 15, 2007. DiMaggio's complaint advances two theories: (a) that Section II of the Stanton Act is an unconstitutional violation of the separation of powers doctrine, and that the entire Act must therefore be invalidated; and (b) that the Stanton Act violates DiMaggio's First Amendment rights. The DOD has moved to dismiss DiMaggio's complaint. Assuming that DiMaggio has standing to sue, write a memo to the judge, separately discussing the merits of DiMaggio's two claims, and draw a reasonable conclusion.
Technology company Orange Inc. owned U.S. Patent No. 1,234,567 (the "'123 Patent"). The '123 Patent covered Orange's "pi phone," a handheld email, voice, data, and entertainment device named after the Greek letter pi. Orange generated most of its revenues from numerous license agreements with major U.S. manufacturers and retailers of cell phones. The license agreements, which were all terminable upon notice, allowed the manufacturers and retailers to make and sell the pi phone without infringing on the '123 Patent.
In early 2006, Orange CEO and sole stockholder Eve Hobbs decided that it was time to cash in on the company's success, so she decided to sell all the company's rights in the pi phone. On March 15, 2006, PHC Inc., a Delaware corporation in the business of acquiring, holding, and enforcing patents, acquired ownership of the '123 Patent.
The day after acquiring the '123 Patent, PHC representatives attended a cell-phone trade show in Silicon Valley, California. Armed with press releases, talking points, and form license agreements, the PHC representatives announced, to the shock of the pi phone manufacturers and retailers in attendance, that PHC had acquired the '123 Patent, that all existing licenses under that patent were being immediately terminated, and that PHC would be willing to negotiate new licenses with "fair and reasonable" terms with the manufacturers and retailers. PHC's actual intent, however, was apparent to the audience: all must sign a new license or risk facing a costly patent-infringement lawsuit.
Ringon, Inc., a manufacturer of the pi phone, shrugged off the veiled threat. The President of Ringon was confident that he could finalize the terms of a license agreement with PHC in due course. Accordingly, he told the PHC representatives that Ringon agreed in principle to PHC's proposal to license the '123 Patent, in accordance with PHC's comments at the tradeshow. PHC's chief negotiator, responded that PHC would be happy to enter into negotiations with Ringon. Thinking that it was now in the clear, Ringon continued making and selling the pi phone after the trade show. However, when PHC heard nothing further from Ringon about negotiations, it filed a patent infringement suit against Ringon on April 15, 2007 in the United States District Court for the District of Delaware. In its answer, Ringon raised a defense that it was operating under a valid new license agreement with PHC.
A. Will Ringon's defense succeed? Discuss whether a valid offer was made, and why that is relevant to your analysis. (Do not discuss principles of intellectual property law in this or any other section of this question.)
Another manufacturer, Topcall, Inc., having heard about the prohibitive costs of patent litigation, contacted PHC immediately and offered $150,000 per year for a license under the '123 patent. PHC responded by letter with the statement "send us $200,000 and we have a deal." Topcall, thinking that its offer comported with PHC's invitation at the trade show to license the '123 Patent on "fair and reasonable" terms, instead sent a $150,000 payment to PHC headquarters. After having made that payment Topcall continued making and selling the pi phone. PHC had a different view of the situation and filed a patent infringement suit against Topcall on April 20, 2007 in the United States District Court for the District of Delaware. In its answer, Topcall raised a defense that it was operating under a valid new license agreement with PHC
B. Will Topcall's defense that it has a valid new license succeed? Discuss whether offer and acceptance are present and why each is relevant to your analysis.
A third manufacturer, HardBell Inc., whose CEO was a former patent litigator, engaged in tough negotiations with PHC. As a part of those negotiations, HardBell threatened to sue PHC and to prove that the '123 patent was not valid (which, if true, would eliminate any need for a license). PHC was worried by that threat and the negotiations eventually culminated in a ten-year license in which HardBell agreed not to challenge the validity of the '123 Patent and to pay PHC $10.00 per year in return for the nonexclusive right to manufacture and sell the pi phone.
C. Assuming that the parties negotiated an otherwise valid contract, discuss whether the consideration PHC received made the contract binding and enforceable.
Hearing of the success of HardBell's aggressive business tactics, CopyBell Inc., a competitor, tried to strike a similar bargain. But, this time PHC hired a new law firm to conduct the negotiations and it did not back down. After a week of tense negotiations, the parties drafted, but did not execute, an agreement that granted CopyBell the nonexclusive right to manufacture and sell the pi phone in exchange for a payment of ten percent of its gross pi phone revenues. Over the next ten years, CopyBell sent PHC a check for 10% of its gross pi phone revenues, which fluctuated wildly over that period. Nonetheless, PHC promptly deposited each check into its general operating account.
D. Discuss whether the parties entered into a binding and enforceable contract and, if so, what type of contract it is.
While it was negotiating with CopyBell, PHC commenced discussions with PanaBell, an international retailer active in Europe and South America. PHC told PanaBell that it likely would grant PanaBell a license for about $100,000 a year, which it described as at least a 50 % discount off of the prevailing license rate. However, PHC said that it could not grant the license immediately because it was currently devoting significant resources to other litigation and it needed to receive full market value for its licenses. PHC therefore promised to negotiate a license with PanaBell several months later in March 2008. PanaBell was thrilled with this deal and began shipping the pi phone abroad immediately. It also immediately set up an account and began reserving funds for later payment of the license amount.
By March 2008, however, PHC had lost two unrelated cases and in both cases multi-million dollar verdicts had been entered against PHC, wreaking havoc with PHC's bottom line. PHC decided it would not be able to afford the market discount it had previously discussed with PanaBell, and it demanded full market value from PanaBell for its license. PanaBell, having already sold its inventory, refused and tendered payment to PHC of $100,000 based on the 50% discount the parties had negotiated.
E. Assume that PanaBell sues PHC in the Court of Chancery. What must Panabell prove to establish a contract based on promissory estoppel? How should the Court rule on that claim?
In November 2007, PHC contacted BlueBell Inc. regarding all Delaware pi phone production and sales. The parties engaged in several rounds of negotiations, the last of which resulted in a deal on November 30, 2007. PHC was pleased with the resulting agreement. According to the November 30, 2007 license terms, BlueBell was precluded from offering any pi phone at a price that was more than 2% over its cost of production for the first ten years. The license also provided that BlueBell would pay PHC 1% of its profits on all sales for the first ten years. Finally, it expressly provided that it was "intended to be a complete expression of all the terms agreed upon."
By December 30, 2007, BlueBell's President concluded that it could not make a reasonable profit under the November license agreement. He immediately emailed PHC and declared that no reasonable business person would enter into such an agreement. PHC, seeking to maintain good relations with its only Delaware retailer, agreed in a follow-up phone call on the same day with BlueBell's President to allow BlueBell to sell the pi phone at 5% above the cost of its production. Appeased, BlueBell began selling pi phones at 5% above its cost. Over one year later, BlueBell sent PHC a check in an amount reflecting 1% of its profits for the first year.
After receiving that first payment, PHC reevaluated its generosity and decided that BlueBell should adhere to the original contract as written. It thereafter filed suit in the Delaware Superior Court, alleging that BlueBell breached the license agreement by selling pi phones at more than 2% above its cost.
F. Discuss whether the Statute of Frauds should apply to the parties' December 30th agreement and whether any exceptions are applicable.
G. Discuss whether the parol evidence rule will prevent the introduction at trial of evidence of the parties' December 30th phone exchange.
H. Discuss whether BlueBell can successfully defend the suit on the ground that no reasonable business person would have agreed to the November 30th license's terms as written.
Board of Bar Examiners of the Supreme Court of Delaware
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