EXAMINERS ANALYSIS TO 6-QUESTION
MOCK FEBRUARY 2016 EXAM
PROVIDED BY JD ADVISING, LLC.
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EXAMINERS’ ANALYSIS TO QUESTION 10: Civil Procedure – July 1996
(1) Yes. In the instant case, the federal court action was dismissed
for lack of progress and disobedience of a court order to attend a duly
scheduled pretrial conference. Such dismissals are with prejudice unless
the court in its order for dismissal specifies otherwise. Fed. R. Civ.
P. 41(b).
Plaintiff filed the first action in propria persona and promptly
failed to prosecute her lawsuit in a diligent fashion. No discovery was
undertaken and plaintiff’s apparent disregard for duly noticed and
scheduled court conferences did not go unnoticed by the court, which
issued, among other things, an order to show cause for lack of progress.
The fact that plaintiff was not represented by counsel in this action
may explain her failure to conduct discovery.
It will not suffice,
however, as an appropriate excuse for her failure to attend duly noticed
court conferences without notifying the court in advance as to her
reason. Note that the court did not dismiss as a result of her failure
to attend the first scheduled conference. Rather, dismissal occurred
upon her failure to attend the rescheduled conference and to respond to
the court’s order to show cause.
For res judicata purposes, an issue that arises is whether the
involuntary dismissal of the federal action operated as a final
adjudication on the merits. As discussed above, Federal Rule of Civil
Procedure 41(b) can operate in such a fashion. Moreover, the dismissal
under this federal rule was also proper under similar state rules because
it was based on plaintiff’s failure to prosecute her action diligently
and plaintiff’s failure to comply with the court order mandating her
attendance at a properly scheduled court conference.
Finally, state
courts are required to give full faith and credit to prior federal court
judgments. Yeazel, Civil Procedure, p. 864 (4th ed 1996). Because a
federal court would consider this to be a final determination on the
merits for res judicata purposes, the Michigan circuit court must do the
same.
A factually similar case, Charter v Southeastern Michigan
Transportation Authority, 135 Mich App 252 (1984), discusses the various
principles set forth above.
See also Gusten v Kenney, 375 Mich 330
(1965).
(2) Yes. A party may move for summary disposition pursuant to MCR
2.116(B)(1) for a dismissal of (or judgment on) all or part of a claim.
The rule further specifies as a ground for such dismissal that such
action is barred due to a “prior judgment.” MCR 2.116(C)(7).
Assuming that the prior dismissal of the action operated as a final
judgment on the merits, then the court’s grant of defendant’s motion was
proper. However, the argument can be made that a claim dismissed for
failure to prosecute is not “on the merits” of the claim, thereby not
invoking the economy aspects of merger and coming under the holding of
Malesev v Garavaglia, 12 Mich App 282 (1968).
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A discussion of the res judicata effect of circuit court judgments
would include a consideration of the effects of Michigan’s mandatory
joinder-of-claims rule.
MCR 2.203.
An answer should include the
necessity of the defendant timely pointing out what claims against it
have not been joined by the plaintiff. Defendant’s failure to bring the
noncompliance to the court’s attention can result in the waiver of the
mandatory joinder rule.
The mandatory joinder rule also raises issues related to the
courts’ abilities to distinguish between (i) successive litigation of
the same claim under a different theory and (ii) successive litigation
of two different claims that arise out of the same transaction or
occurrence.
Thus, an argument can be made that claims supported by
different bodies of law, state and federal, would be deemed different
claims that arise out of the same transaction or occurrence.
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EXAMINERS’ ANALYSIS TO QUESTION 11: Torts – Feb 2001
The City of East Grand Mountain is a governmental agency, and the
operation of a library is a governmental function.
As a general
proposition, the City is entitled to governmental immunity from tort
liability absent a recognized exception (MCL 691.1407).
There is a statutory exception to that immunity involving the
ownership and maintenance of public buildings (MCL 691.1406). However,
the governmental agency must have actual or constructive knowledge of
the defect. No such knowledge is apparent from these facts.
Joe Fix is also the beneficiary of governmental immunity so long
as his actions did not amount to gross negligence (MCL 691.1407 [2][c].
Ignoring the hot junction box and failing to utilize safety equipment
are arguably gross negligence. However, the use of the safety equipment
may not have prevented the fire but only protected Joe Fix so that he
would be able to take appropriate action to extinguish the fire. There
is, therefore, a proximate cause issue regarding the actions of Joe Fix.
The electrical contractor, Current Events, clearly breached its
duty to use reasonable care.
Current Events was acting as an agent (subcontractor) of Tooth &
Nail in the execution of its contract. Tooth & Nail is liable for the
torts of its subcontractor agent.
However, the claims against a contractor resulting from an
improvement to real property is limited by a six-year statute of repose
which statutory period begins to run from the time of occupancy,
completion, or acceptance of the work. The period of time may be extended
to ten years in the case of gross negligence.
As a result, a claim
against either contractor is time barred unless the actions of Current
Events would be found by the jury to constitute gross negligence.
A discussion may be made of the status of Bob Frye. The duty owed
by a possessor of land to a person entering upon that land depends on
the status of the visitor. A visitor has either been invited and is,
therefore, an “invitee”, is present with permission and is therefore a
“licensee”, or is on the premises without permission and is therefore a
“trespasser.” While the Restatement of Torts would classify Frye as a
“public invitee”, the Michigan Supreme Court recently ruled that a person
is an invitee on a premises only if the premises is “held open for a
commercial purpose,” Stitt v Holland Abundant Life Fellowship, 462 Mich
591 (2000).
It seems likely that Bob was a licensee under current
Michigan law at the time he entered the library. Once the library closed
with his knowledge, his status arguably changed from invitee to licensee
or from licensee to trespasser. A land owner owes a licensee a duty
only to warn of hidden dangers the owner knows or has reason to know of.
The land owner owes an invitee a duty not only to warn of hidden dangers
but to make the premises safe. The City, therefore, did not owe and did
not breach a duty to Bob as either a licensee or a trespasser.
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EXAMINERS’ ANALYSIS TO QUESTION 12: Corporations – February 1993
I.
Interested Directors’ Transaction
(a) The redemption of Anne’s stock is clearly an “interested
directors’ transaction” with respect to Anne under Michigan Business
Corporation Act (“MBCA”) section 545(a), since Anne has a direct
financial interest.
(b) MBCA section 545(a)(2) precludes injunction, damages, or the
setting aside of an interest directors’ transaction by virtue of interest
if the transaction is approved by an informed vote of a majority of the
disinterred directors, even if the interested directors are present or
vote. The transaction is also beyond attack for interest if it was fair
to the corporation at the time it was entered into.
(c) Whether Brain and Charlotte would be deemed “interested”
merely because of family relationship is unclear. Clearly, Driscoll and
Ewing are not interested. However the board vote is viewed, it satisfies
the standard of MBCA section 545(a)(2).
(d) As to the alternative “fairness” test, the burden would be on
Anne to establish fairness under MBCA section 545(a)(1). Here the facts
are less clear, since no outside valuation as obtained.
(e) Conclusion: No
directors’ transaction.
II.
successful
attack
based
on
interested
Illegal Corporate Distribution
(a) The repurchase of Anne’s shares is a “distribution,” subject
to the provisions of the MBCA on corporate distributions. MBCA § 106(3).
(b) Directors are jointly and severally liable for distributions
in violation of the MBCA. MBCA § 551(1)(a). Shareholders who receive
a distribution with knowledge of facts indicating it is in violation of
the MBCA are liable for the amount received. MBCA § 551(2).
(c) Per MBCA section 345(3), distributions are subject to two
tests. The “Balance Sheet” test (after distribution, total assets are
at least equal to total liabilities) is satisfied here, according to
Apex’s December 31, 1991, audited financial statements. However, the
second test under MBCA section 345(3), usually called the “Insolvency
Test,” may be a problem: after the distribution, the corporation was in
fact not able to pay its debts as they became due.
(d) Still,
the
facts
suggest
that
subsequent
business
circumstances, rather than the distribution itself, caused Apex to become
insolvent.
(e)
Conclusion: Liability is possible, but not likely.
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EXAMINERS’ ANALYSIS TO QUESTION 13: Sales – July 1998
There are two principal arguments. First, a contract cannot be assigned
if the assignment would materially change the duty, burden, or risk faced
by the other party. Here, we could reasonably argue that the assignment
to a much larger company that will be using our materials to manufacture
potentially dangerous products would be such a material change.
The second argument is that the U.C.C. limits demands under a
requirement contract to those that are made in good faith and in amounts
not unreasonably disproportionate to any stated estimate or pattern of
pervious requirements. Although bad faith might be hard to show unless
the increased demand were simply to take opportunistic advantage of the
competitive situation, the demand could easily be “unreasonably
disproportionate” to Micromechanics’s prior requests.
Michigan Compiled Laws section 440.2210 states that unless
otherwise agreed, contract rights can be assigned “except where the
assignment would materially change the duty of the other party or
increase materially the burden or risk imposed on him by his contract,
or impair materially his chance of obtaining return performance.” Some
cases (now somewhat dated) have suggested that the assignment of a
requirements contract simply to a new and different party would
constitute a material prejudice. On the other hand, many have argued
that this should not be the case: that the restrictions on the amount
demanded set forth in Michigan Compiled Laws section 440.2306 are
adequate to protect the obligor. See e.g., Continental Can Co v Poultry
Processing Inc, 649 F Supp 570 (D Me 1986). The official comments to
the U.C.C. seem to endorse this latter view.
But the fact of the
increased litigation exposure, if factually credible, makes this more
than just a simple assignment of the right to demand a given quantity.
Michigan Compiled Laws section 440.2306(1) states that requirements
contracts are valid and may be enforced with respect to “good faith”
demands.
However, “No quantity unreasonably disproportionate to any
stated estimate or in the absence of a stated estimate, to any normal
or otherwise comparable prior requirements may be demanded.” No doubt
more facts are need regarding Omicron’s capacity and financial condition,
the possibility of stated estimates, the range of prior demands,
anticipated circumstances, etc. But Omicron seems to have at least a
good prima facie case here.
Far less persuasive than the foregoing would be an argument based
simply on impracticability or frustration. The facts do not give any
indication that truly unforeseen events have occurred or that there is
the kind of severe hardship that characterizes cases that grant relief
under these doctrines.
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EXAMINERS’ ANALYSIS TO QUESTION 14: Real Property – July 1997
Seller’s obligation to have a marketable title is implied in a real
estate purchase-and-sale contract.
This proposition is strengthened,
not weakened, by the contract’s provision for a warranty deed. Title
need not actually be bad to make it unmarketable; there need only be
such apparent flaws as may lead to litigation, certainly a risk here as
to Cole’s half interest in half the acreage. See Bartos v Czerwinski,
323 Mich 87 (1948).
Sol’s lawyer asserted that Sol’s 24 years of continuous exclusive
possession have gained for Sol full title via adverse possession.
Twenty-four years satisfy every adverse possession statute, including
Michigan’s. Two problems, however, nullify Sol’s argument:
(1) Exclusive occupancy for the statutory period does not
establish adverse possession against a co-tenant (which Cole was here
as to 40 of the 80 acres), without affirmative proof of ouster which is
lacking here. See Note, Adverse Possession Between Co-Tenants, 56 Mich
L Rev 1360 (1958).
(2) Even if Sol could eventually establish title by adverse
possession via an appropriate separate lawsuit against Cole, that fact
is widely held insufficient for current marketability.
See Bartos v
Czerwinski, supra; Escher v Bender, 338 Mich 1 (1953).
Pearl should prevail.
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EXAMINERS’ ANALYSIS TO QUESTION 15: Workers’ Compensation – February
2005
In order to establish entitlement to worker’s compensation
benefits, Patty Pompadour must prove that she has suffered “a personal
injury arising out of and in the course of employment.” MCL 418.301(1).
However, under MCL 418.301(2), mental disabilities are compensable only
if the employment contributes to, aggravates, or accelerates the
condition “in a significant manner.” In addition, mental disabilities
are compensable only when they arise “out of actual events of employment,
not unfounded perceptions thereof.”
In Robertson v Daimler Chrysler, 465 Mich 732 (2002), the Court
held that, in order to satisfy the mental disability requirements of
301(2), a claimant must demonstrate that (a) an actual employment event
led to the claimed mental disability and (b) the claimant’s perception
of the employment event was grounded in fact or reality, not delusion.
In analyzing the claimant’s perception, the magistrate must apply an
objective standard to the employment event and determine how a reasonable
person would have perceived the event under like circumstances.
The first prong of the Robertson test has been met because the
claimed disabling employment event – the scene that erupted after the
elaborate coiffure was revealed to Betty Beyer – actually occurred.
Moreover, in evaluating Pompadour’s perception, the magistrate will have
to determine whether a reasonable person would have perceived the
altercation as stressful and humiliating.
In this instance, it is
certainly plausible that a reasonable person would have found the event
to be humiliating and stressful.
Assuming that Patty successfully meets the two prongs of the
Robertson test, the statute also requires that Patty prove
her
employment contributed to her debilitating depression “in a significant
manner.”
Given the opposing testimony of the expert witnesses, this
will be a question of fact for the magistrate to decide.
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