Assignment: LEGAL ENPROVMET OF BUSINESS
Part 1
1. The state of Alabama enacted a statute that imposed a tax on premiums earned by insurance companies. The statute imposed a 1 percent tax on domestic insurance companies (i.e., insurance companies that were incorporated in Alabama and had their principal office in the state). The statute imposed a 4 percent tax on the premiums earned by out-of-state insurance companies that sold insurance in Alabama. Out-of-state insurance companies could reduce the premium tax by 1 percent by investing at least 10 percent of their assets in Alabama. Domestic insurance companies did not have to invest any of their assets in Alabama. Metropolitan Life Insurance Company, an out-of-state insurance company, sued the state of Alabama, alleging that the Alabama statute violated the Equal Protection Clause of the U.S. Constitution. Who wins and why? Explain your answer.
2. Intex Recreation Corporation designed and sold the Extreme Sno-Tube II. This snow tube is ridden by a user down snow-covered hills and can reach speeds of 30 miles per hour. The snow tube has no steering device, and therefore a rider may end up spinning and going down a hill backward. Dan Falkner bought an Extreme Sno-Tube II and used it for sledding the same day. During Falkner's second run, the tube rotated him backward about one-quarter to one-third of the way down the hill. A group of parents, including Tom Higgins, stood near the bottom of the hill. Higgins saw 7-year-old Kyle Potter walking in the path of Falkner's speeding Sno-Tube. Higgins ran and grabbed Potter to save him from harm, but while he was doing so, the Sno-Tube hit Higgins and threw him into the air. Higgins landed on his forehead, which snapped his head back. The impact severed Higgins's spinal cord and left him quadriplegic. Higgins sued Intex for damages based on strict liability. Is the snow tube defective? Explain your answer.
3. Joseph Burger was the owner of a junkyard in Brooklyn, New York. His business consisted, in part, of dismantling automobiles and selling their parts. The state of New York enacted a statute that requires automobile junkyards to keep certain records. The statute authorizes warrantless searches of vehicle dismantlers and automobile junkyards without prior notice. One day, five plain-clothes officers of the Auto Crimes Division of the New York City Police Department entered Burger's junkyard to conduct a surprise inspection. Burger did not have either a license to conduct the business or records of the automobiles and vehicle parts on his premises, as required by state law. After conducting an inspection of the premises, the officers determined that Burger was in possession of stolen vehicles and parts. He was arrested and charged with criminal possession of stolen property. Burger moved to suppress the evidence. Did Burger act ethically in trying to suppress the evidence? Does the warrantless search of an automobile junkyard pursuant to a state statute that authorizes such a search constitute an unreasonable search and seizure in violation of the Fourth Amendment to the U.S. Constitution? Explain your answer.
4. James W. Newton, Jr., is an accomplished avant-garde jazz composer and flutist. Newton wrote a composition for the song "Choir," a piece for flute and voice that incorporated elements of African American gospel music. Newton owns the copyright to the composition "Choir." The Beastie Boys, a rap and hip-hop group, used six seconds of Newton's "Choir" composition in their song "Pass the Mic" without obtaining a license from Newton to do so. Newton sued the Beastie Boys for copyright infringement. The Beastie Boys defended, arguing that their use of six seconds of Newton's song was de minimis and therefore fair use. Does the incorporation of a short segment of a copyrighted musical composition into a new musical recording constitute fair use, or is it copyright infringement? Explain your answer.
Part 2
1. You have been asked to speak to your class about gifts to movie stars. Go to New York Times website and read about gifts to movie stars. Then write an outline of a 10-minute talk on the subject.
2. Norma English made an offer to purchase a house owned by Michael and Laurie Montgomery (Montgomery) for $272,000. In her offer, English also proposed to purchase certain personal property-paving stones and a fireplace screen worth a total of $100-from Montgomery. When Montgomery received English's offer, Montgomery made many changes to English's offer, including deleting the paving stones and fireplace screen from the personal property that English wanted. When English received the Montgomery counteroffer, English accepted and initialed all of Montgomery's changes except that English did not initial the change that deleted the paving stones and fireplace screen from the deal.
Subsequently, Montgomery notified English that because English had not completely accepted the terms of Montgomery's counteroffer, Montgomery was therefore withdrawing from the deal. That same day, Montgomery signed a contract to sell the house to another buyer for $285,000. English sued Montgomery for specific performance of the contract. Montgomery defended, arguing that the mirror image rule was not satisfied because English had not initialed the provision that deleted the paving stones and fireplace screen. Is there an enforceable contract between English and Montgomery? Explain your answer.
3. Wells Fargo Credit Corporation (Wells Fargo) obtained a judgment of foreclosure on a house owned by Mr. and Mrs. Clevenger. The total indebtedness stated in the judgment was $207,141. The foreclosure sale was scheduled for 11:00 A.M. on a specified day at the west front door of the Hillsborough County Courthouse. Wells Fargo was represented by a paralegal, who had attended more than 1,000 similar sales. Wells Fargo's handwritten instruction sheet informed the paralegal to make one bid at $115,000, the tax-appraised value of the property. Because the first "1" in the number was close to the "$," the paralegal misread the bid instruction as $15,000 and opened the bidding at that amount.
Harley Martin, who was attending his first judicial sale, bid $20,000. The county clerk gave ample time for another bid and then announced, "$20,000 going once, $20,000 going twice, sold to Harley... ." The paralegal screamed, "Stop, I'm sorry. I made a mistake!" The certificate of sale was issued to Martin. Wells Fargo filed suit to set aside the judicial sale based on its unilateral mistake. Does Wells Fargo's unilateral mistake constitute grounds for setting aside the judicial sale? Explain your answer.
4. David Abacus uses the Internet to place an order to license software for his computer from Inet License, Inc. (Inet), through Inet's electronic website ordering system. Inet's Web page order form asks David to type in his name, mailing address, telephone number, e-mail address, credit card information, computer location information, and personal identification number. Inet's electronic agent requests that David verify the information a second time before it accepts the order, which David does. The license duration is two years, at a license fee of $300 per month. Only after receiving the verification of information does Inet's electronic agent place the order and send an electronic copy of the software program to David's computer, where he installs the new software program.
David later refuses to pay the license fee due Inet because he claims his electronic signature and information were not authentic. Inet sues David to recover the license fee. Is David's electronic signature enforceable against him? Explain your answer.
Part 3
1. Brenda Brandt was admitted to Sarah Bush Lincoln Health Center (Health Center) to receive treatment for urinary incontinence. During the course of an operation, the doctor surgically implanted a ProteGen Sling (sling) in Brandt. Subsequently, the manufacturer of the sling, Boston Scientific Corporation, issued a recall of the sling because it was causing medical complications in some patients. Brandt suffered serious complications and had the sling surgically removed. Brandt sued Boston Scientific Corporation and Health Center for breach of the implied warranty of merchantability included in Article 2 (Sales) of the Uniform Commercial Code (UCC). Health Center filed a motion with the court to have the case against it dismissed. Health Center argued that it was a provider of services and not a merchant that sold goods, and because the UCC (Sales) applies to the sale of goods, Health Center was not subject to the UCC. Health Center proved that Brandt's bill was $11,174.50 total charge for her surgery, with a charge of $1,659.50, or 14.9%, for the sling and its surgical kit. Is the transaction between Brandt and Health Center predominantly the provision of services or the sale of goods? Explain your answer.
2. Executive Financial Services, Inc. (EFS), purchased three tractors from Tri-County Farm Company (Tri-County), a John Deere dealership owned by Gene Mohr and James Loyd. The tractors cost $48,000, $19,000, and $38,000. EFS did not take possession of the tractors but instead left the tractors on Tri-County's lot. EFS leased the tractors to Mohr-Loyd Leasing (Mohr-Loyd), a partnership between Mohr and Loyd, with the understanding and representation by Mohr-Loyd that the tractors would be leased out to farmers. Instead of leasing the tractors, Tri-County sold them to three different farmers. EFS sued and obtained judgment against Tri-County, Mohr-Loyd, and Mohr and Loyd personally for breach of contract. Because that judgment remained unsatisfied, EFS sued the three farmers who bought the tractors to recover the tractors from them.
1. What does the entrustment rule provide? Explain.
2. Did Mohr and Loyd act ethically in this case?
3. Who owns the tractors, EFS or the farmers?
3. Donald Wayne Doyle (Debtor) obtained a guaranteed student loan to enroll in a school for training truck drivers. Due to his impending divorce, Debtor never attended the program. The first monthly installment of approximately $50 to pay the student loan became due. Two Parts later, Debtor filed a voluntary petition for Chapter 7 bankruptcy. Debtor was a 29-year-old man who earned approximately $1,000 per month at an hourly wage of $7.70 as a truck driver, a job that he had held for 10 years. Debtor resided on a farm, where he performed work in lieu of paying rent for his quarters. Debtor was paying monthly payments of $89 on a bank loan for his former wife's vehicle, $200 for his truck, $40 for health insurance, $28 for car insurance, $120 for gasoline and vehicular maintenance, $400 for groceries and meals, and $25 for telephone charges. In addition, a state court had ordered Debtor to pay $300 per month to support his children, ages 4 and 5. Debtor's parents were assisting him by buying him $130 of groceries per month.
1. What legal standard must be met to have a student loan discharged in bankruptcy?
2. Did Doyle act unethically in trying to have his student loan discharged in bankruptcy?
3. Should Doyle's student loan be discharged in bankruptcy?
4. PSC Metals, Inc. (PSC), entered into an agreement whereby it extended credit to Keystone Consolidated Industries, Inc., and took back a security interest in personal property owned by Keystone. PSC filed a financing statement with the state, listing the debtor's trade name, "Keystone Steel & Wire Co.," rather than its corporate name, "Keystone Consolidated Industries, Inc." When Keystone went into bankruptcy, PSC filed a motion with the bankruptcy court to obtain the personal property securing its loan. Keystone's other creditors and the bankruptcy trustee objected, arguing that because PSC's financing statement was defectively filed, PSC did not have a perfected security interest in the personal property. If this were true, then PSC would become an unsecured creditor in Keystone's bankruptcy proceeding. Is the financing statement filed in the debtor's trade name, rather than in its corporate name, effective? Explain your answer.
Part 4
1. Jose Pena and Joseph Antenucci were medical doctors who were partners in a medical practice. Both doctors treated Elaine Zuckerman during her pregnancy. Her son, Daniel Zuckerman, was born with severe physical problems. Elaine, as Daniel's mother and natural guardian, brought a medical malpractice suit against both doctors. The jury found that Pena was guilty of medical malpractice but that Antenucci was not. The amount of the verdict totaled $4 million. The trial court entered judgment against Pena but not against Antenucci. Plaintiff Zuckerman made a post-trial motion for judgment against both defendants. Is Antenucci jointly and severally liable for the medical malpractice of his partner, Pena? Explain your answer.
2. Jennifer, Martin, and Edsel form a limited liability company called Big Apple, LLC, to operate a bar in New York City. Jennifer, Martin, and Edsel are member-managers of the LLC. One of Jennifer's jobs as a member-manager is to drive the LLC's truck and pick up certain items of supply for the bar each Wednesday. On the way back to the bar one Wednesday after picking up the supplies for that Part, Jennifer negligently runs over a pedestrian, Tilly Tourismo, on a street in Times Square. Tilly is severely injured and sues Big Apple, LLC, Jennifer, Martin, and Edsel to recover monetary damages for her injuries. Who is liable? Explain your answer.
3. Joseph M. Billy was an employee of the USM Corporation (USM), a publicly held corporation. Billy was at work when a 4,600-pound ram from a vertical boring mill broke loose and crushed him to death. Billy's widow sued, alleging that the accident was caused by certain defects in the manufacture and design of the vertical boring mill and the two moving parts directly involved in the accident, a metal lifting arm and the 4,600-pound ram. If Mrs. Billy's suit is successful, can the shareholders of USM be held personally liable for any judgment against USM? Explain your answer.
4. The McDonald Investment Company was a corporation organized and incorporated in the state of Minnesota. The principal and only place of business from which the company conducted operations was Rush City, Minnesota. More than 80 percent of the company's assets were located in Minnesota, and more than 80 percent of its income was derived from Minnesota. McDonald sold securities to Minnesota residents only. The proceeds from the sale were used entirely to make loans and other investments in real estate and other assets located outside the state of Minnesota. The company did not file a registration statement with the SEC. Does this offering qualify for an intrastate offering exemption from registration? Explain your answer.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.