Final Exam on business law

1.Robert and his brother John, owned a parcel of real property as tenants in common. Robert died in 1961 leaving a life estate in the property to his widow, Sue, with the remainder estate when Sue dies to John. Sue died in 1985, John died in 1969, leaving his interest in the property to his wife, Jane. What interest did Jane own in the property when she died in 1981?

            Assuming that there are no other heirs at law of John who would have a legal right to the property, Jane would own the property outright.  Jane inherited an undivided half interest in the property when John died.  Under Robert’s initial grant, John had became a remainderman in the other half interest in the property.  A remainder interest is heritable, so that at John’s death, that interest passed to his heirs.  In the absence of mention of any competing heirs, that interest passed to Jane.

2.A. Robert, a widower, made a will leaving one dollar to his son, John, and the balance in equal shares to his other children, Ben and Angel. The estate after deducting debts and taxes and expenses amounted to $45,000.00. When Robert died John claimed that he was legally entitled to the $15,000.00, was John correct? Why or why not? B. Would your answer change if John can prove that Ben and Angel promised Robert that they would take care of him until the day he died if he left everything to them and not to John and they in fact did take care of him? Explain your answer.

A.        John was not correct.  A person has no obligation to leave any share of his estate to his children.  By leaving $1, Robert indicated that he was aware that John was a natural object of his affection, but did not wish to leave him anything more.  He is not entitled to a one-third share.

B.        If John can prove that there was a contract, and that there was a clear breach of that contract, then he may be able to set the will aside as a product of the contract.  However, this will be uncertain.  If Robert knew that Ben and Angel were not carrying out their end of the bargain, but still left his will intact, this could suggest that he acquiesced in their breach and still adhered to the will.  Only if John can show that they somehow misled him or discouraged him from making the will could he get the will set aside.

3.The State of New Mexico required all applicants for State Police to be between twenty one and twenty nine years old, to be at least 5 feet 9 inches tall and to weigh at least 156 pounds. The height and weight requirements eliminated 98 percent of the female applicants. The basic employment requirements also made it mandatory that all applicants, including applicants for civilian dispatcher positions, complete and pass written mental ability tests. The tests for dispatcher positions were not valid predictors of job performance. The tests for the police officer positions also were shown not be predictors of job performance. The United States brought suit, charging that New Mexico engaged in a pattern and practice of discrimination against Hispanic applicants for the civilian positions and against both Hispanic and women candidates for the police officer positions. Did the US prevail? Explain.

The United States will prevail.  The tests have a disparate impact on the persons on whose behalf the suit is brought.  The employer cannot show that these are valid predictors of job performance so that they are in essence a vehicle of discrimination, and their use will be prohibited.

4.Robert worked for x company. John, Roberts supervisor ordered him to remove the labels from several hundred steel drums that had once contained a severely corrosive acid. John told Robert they intended to use the drums for carrying water. Robert refused to remove the labels because reusing the old drums would violate both state and federal laws. When John told Waldo to remove the labels and reuse the drums, Robert reported the company’s activities to state and federal authorities. Robert was fired for his refusal to follow orders and for notifying the authorities. In a lawsuit against X company, which legal exception to the employment at will doctrine did Robert use? Explain.

Robert will prevail on the public policy exception to the employment at will:  that the employer cannot fire an employee for an illegal reason.  To allow otherwise would be to allow the employer to do as he has done here, to demand illegal actions as the price of keeping ones job.

5.When its lease expired, Autoparts made plans to move to another building. Preparations were made to remove shelving, mat and glass counters, display boards, benches, and other fixtures that had been built into the store when the lease first started. All the shelves and fixtures were specially designed for the picture framing business. The landlord told the owners of Autoparts to stop removing the items from the property. Could they remove the shelves and other fixtures that were paid for and installed by them during their tenancy?

            This question is problematic.  Whle the facts appear to lean in favor of Autoparts, it is not entirely clear.  “Fixtures that had been built into the store when the lease first started.”  If this statement means fixtures which the lessee installed when the laease first began, then under the traditional doctrine they can be removed, if this can be done without undue damage to the property.  “Specifically designed for the picture framing business”?  The lessee is “Autoparts,” which does not sound like a framing business.  Assuming this statement means that they were designed for use in the lessee’s business, then the lessee will be allowed to remove them, again provided that this can be done without unreasonable damage to the property.  On the other hand, if the items at issue were in place before the lease began, or if they are unique to such a degree that they effectively cannot be used anywhere else, or if they cannot be removed without undue damage to the underlying property, then they will be considered permanently attached to the property and must remain with it.

6.Antonio is the owner of a lakeside house and lot. He deeds the house and lot “to my wife, Angela, for life, then to my son, Charles.” Given these facts, answer the following questions:

a.Does Antonio have any ownership interest in the lakeside house after making these transfers? Explain.

b.What is Angela’s interest called? Is there any limitation on her rights to use the property as she wishes?

c.What is Charles’s interest called? Why?

A.        Antonio has no interest in the property.  He has deed away a life estate and the remainder interest, maintaining no reserved interest for himself, so that he no longer owns the property or any part of it.

B.        Angela’s interest is a life estate, with herself as the measuring life.  She is subject to two limitations on the use of the property.  First, she can sell only what she owns, so that if she sells her interest to Barbara, Angela’s life still determines when the estate will end, and Barbara’s estate will end when Angela dies.  This applies also to lesser acts of alienation such as mortgages: Angela cannot unless the lender’s interest termnates on Angela’s death, because at Angela’s death, John becomes the sole owner and takes free and clear of any claims of Angela’s creditors.  Second, while she can exploit the property to a reasonable degree, she cannot use it in ways amounting to waste, having unncessary detrimental consequences beyond her own lifetime.

C.        Charlie’s interest is called a remainder.  It is what is left over after a life estate.  When he comes into ownership, he will be the complete owner, holding in fee simple absolute.

7.Jim had limited authority to purchase cattle for his principal, JA Packing Company. Rob, who knew of Jim’s limited authority and who also knew that Jim was exceeding that authority, nevertheless contracted with Jim to sell cattle to the packing company. When the packing company refused to accept the cattle, Rob brought suit against Jim for damages, showing that JA Packing Company refused to ratify the unauthorized act of its agent. The judgment was for whom and why?

            The judgment will be for Jim.  A contract in modern law does not require a true subjective “meeting of the minds,” so that this will not be the key point. A modern contract, however, does require that both sides bargain in good faith.  Rob did not do this.  He knew that Jim was exceeding his authority when he made these contracts.  In essence, what was later presented to JA Packing Company were offers to ratify, which they had no legal duty to do.  Rob also cannot prevail against Jim as an individual, because of the concept of “in pari delicto.”  When the legal system finds that two parties are equally in the wrong in a matter such as this, it will not allow either to use the courts to benefit.  (This is analogous to the concept of “unclean hands,” an equitable concept.)

8.Robert owned five acres of land and let John drive over the land to get to his own property. A road eventually developed as John used the road for thirty years. Robert sold the property to Steve and Steve upon seeing the road fenced it off to keep anyone from traveling. John sued to continue passing on the land. What was John’s legal theory in challenging Steve? Will John prevail?

            John’s claim will be based on a two theories: a claim for an easement of necessity and a claim  of a prescriptive easement.

            To prevail, John will have to show that without an easement across Robert’s property, he has effectively no way of reaching his property.  If he has no other way of reaching his property, then he will be able to claim an easement based on necessity.

            A claim for a prescriptive easement will fail.  The facts suggest that John can show three of the four elements: (1) his use of the easement has gone on long enough that it presumably will satisfy the prescriptive period, which is usually dictated by the statute of limitations for bringing property actions; (2) his use of the easement was clearly open.  When Steve bought the property, he could see that a road was being used across his property.  (3) John is acting under what he believes to be a claim of right:  he had Robert’s permission to use the land.  The claim will fail, however, for this same reason:  John had Robert’s permission.  Because it was a permissive use, Robert had the right to give permission, and he had the right to take permission away.  A prescriptive easement is based on a concept of adversity, that is that John was not merely using Robert’s land with permission, but that John was using something that John had a right to use, independent of Robert.  Steve has acquired all rights that Robert had, including the right to revoke permission.  Therefore, it is quite probable that for want of an ability to show that he believed that he had a right independent of Robert’s permission, John’s claim will fail on the permissive easement theory.

9.What is the difference between disparate Impact and disparate treatment in Employment Law. Give me an example for each type of discrimination. Novo Film is making a film about Africa and needs to employ 100 African Americans, is this a violation of law? Please discuss. Provide the elements for proving discrimination. What type of disparate treatment is this?

            “Disparate treatment” is discrimination in which the members of two different classes are treated differently.  One of the classic examples were racially segregated water fountains, which could be used only by persons of a particular race.  Another example was the admission policy of Bob Jones University, which for many years categorically stated that non-whites need not apply.   This is generally much less tolerated than disparate impact discrimination.

            “Disparate impact” is discrimination based on a facially neutral policy having a seriously different impact on persons of particular classes.   A classic example is the arrest of all persons sleeping under the bridges of Paris.  On its face, the law falls equally on the rich and the poor, but because the poor never need to take shelter under the bridges of Paris, the impact of the rule on them is nil, whereas the impact on the poor is very severe.

            The test for discrimination is generally that the claimant must show that a policy or practice of an employer who is subject to the civil rights laws has a significantly greater impact on persons within a protected class than those outside the class.  On this prima facie showing, the employer must then offer a non-discriminatory justification for the result.  For example, a woman applies for a job which involves very heavy lifting.  She is denied the job.  She can show that women are statistically vastly under-represented in the employer’s work force.  The employer then must show that this is a valid part of the job and that he cannot, through reasonable accommodation, avoid this impact.  The claimant can then challenge this claim as pretextual, for example, by showing evidence that the decisions to pass over women wer based on sexist reasons, not valid job-related claims.

            Of Novo Films, on its face, its action appears to be discriminatory, and an example of facially disparate treatment at that.  It is saying, in effect, non-blacks need not apply.  However, it will be able to assert that race is a valid bona fide occupational qualification.  It needs to make films which are credible and which accurately reflect the subject matter.  An African tribal which includes people of obviously non-African racial characteristics simply will not work.  Such claims will be greeted with scepticism in the courts and will be closely scrutinized, but Novo will probably prevail.

10.The NLRB conducted an election among employees of a business to determine whether the Union would represent the employees. During the election, recognition slitps were distributed. The employees were told by the Union that if they signed the slips before the election they would not have to pay an initiation fee if the union won. At least thirty-five employees signed the slips before the election, which the Union won by a vote of 22 to 20. The company refused to bargain with the Union, by offering possible benefits to employees for signing the recognition slips, was guilty of of an unfair labor practice. Did the practice of the Union prevent a fair and free choice of a bargaining representative? Why or why not?

 This issue is specifically discussed in NLRB v. Savair Manufacturing Co., 414 U.S. 270 (1973), and the parties should look to that case for guidance.  If the Union stated that it would waive initiation fees for all employee if it was selected as the bargaining unit, then this practice is tolerated and is not deemed to be an unfair practice.  On the other hand, if the Union suggested that it would waive fees for those persons who voted for it, then the election will be set aside as lacking the fair and free choice.  Even though there clear was no direct link between signing the cards and voting, there is enough of a suggestion that employees felt they had obligated themselves to vote for the union to put the fairness of the election at issue.