Discussion Post: Business Law and Ethics
• Nineteen-year-old Lee J. Norris was employed by Burger Chef Systems as an assistant manager of one of its restaurants. On a day when he was in charge and change was needed, Mr. Norris left to get change but also decided to get Kentucky Fried Chicken at a nearby store for his lunch to take back to Burger Chef. The bank where Mr. Norris usually got change is 1.6 miles from Burger Chef, and the Kentucky Fried Chicken outlet is 2.5 miles from Burger Chef. After Mr. Norris left the bank and was on his way to the Kentucky Fried Chicken restaurant, he negligently injured Lee J. Govro in an accident.
Is Burger Chef liable for the accident?
• Bernice Bisbee is a real estate broker employed by Midkiff Realty, Inc. In September 1972, she obtained from Richard and Marian Silva an exclusive listing agreement for the sale of their property in Kaleheo, Kauai. The land, which fronted on the Kaumualii Highway, consisted of 34,392 square feet, one two-bedroom house, and one four-bedroom house. The Silvas told Ms. Bisbee that they wanted $100,000 for the property. Sometime later, Ms. Bisbee obtained an offer for the property from David Larsen. The down payment was set at $35,000, with payments of $2,000 a month at 8% a year, but Mr. Larsen backed out before closing. After that, a joint venture of six members formed the Pacific Equity Associates to buy the property. Ms. Bisbee was to manage the joint venture and would receive 10% of the profits for her services. One of the joint venture members, Toshio Morikawa, appeared as the buyer at the July 1973 closing of the property sale. Ms. Bisbee did not tell the Silvas of the venture nor of her pecuniary interest in it. In August 1973, Ms. Bisbee prepared for the venture a financial statement that listed the market value of the Silva property at $149,424. Several times, the venture was late making payments, which Ms. Bisbee covered. Mr. Silva and his wife were emotionally distressed about the late payments and told Ms. Bisbee. Eventually, because of defaults on the payments, the Silvas brought suit to cancel the contract and for damages for fraud by Ms. Bisbee, naming Midkiff Realty in the suit as well. The jury returned a verdict for $29,000 in general damages for the Silvas and $50,000 in punitive damages. Ms. Bisbee and Midkiff appealed.
Was there a breach of fiduciary duty? Should the damage award stand because of Ms. Bisbee's actions?
• Heritage Hills (a land development firm) was organized on July 2, 1975, as a limited partnership, but the partnership agreement was never properly filed. Heritage Hills went bankrupt, and the bankruptcy trustee has sought to recover the debts owed by the partnership from the limited partners.
Can he?
• The Orleans Parish School Board hired Johnson & Higgins (J & H) to provide consulting services. J & H provided those services over the next few years but was then acquired by Marsh & McLennan, a larger insurance firm. Marsh continued the work that J & H had been doing and submitted an invoice to the Orleans Parish School Board for reimbursement. The Board said that it had no contractual arrangement with Marsh and, as such, was not liable for the services.
Is the Board correct? Describe what happened in the relationships and apply the principles of corporate law to determine whether Marsh can be paid.
The response should include a reference list. Using one-inch margins, Times New Roman 12 pnt font, double-space and APA style of writing and citations.