8.1 INTERPRETATION OF CONTRACTS. Lehman Brothers, Inc. (LBI), wrote a letter to Mary Ortegón offering her employment. The offer included a salary of $150,000 per year and an annual “minimum bonus” of $350,000. The bonus was not a “signing” bonus—it was clearly tied to her performance on the job. Ortegón accepted the offer. Before she started work, however, LBI canceled the contract. Later, Ortegón filed a claim with a court to recover the amount of the $350,000 bonus on the ground that LBI had breached its contract with her by not paying it. Can outside evidence be admitted to interpret the meaning of the bonus term? Explain. [Ortegón v. Giddens, 638 Fed.Appx. 47 (2d Cir. 2016)] (See Interpretation of Contracts.)

8.2 IMPLIED CONTRACTS. Ralph Ramsey insured his car with Allstate Insurance Co. He also owned a house on which he maintained a homeowner’s insurance policy with Allstate. Bank of America had a mortgage on the house and paid the insurance premiums on the homeowner’s policy from Ralph’s account. After Ralph died, Allstate cancelled the car insurance. Ralph’s son, Douglas, inherited the house. The bank continued to pay the premiums on the homeowner’s policy, but from Douglas’s account, and Allstate continued to renew the insurance. When a fire destroyed the house, however, Allstate denied coverage, claiming that the policy was still in Ralph’s name. Douglas filed a suit in a federal district court against the insurer. Was Allstate liable under the homeowner’s policy? Explain. [Ramsey v. Allstate Insurance Co., 2013 WL 467327 (6th Cir. 2013)] (See Types of Contracts.)

8.3 QUASI CONTRACT. Kim Panenka asked to borrow $4,750 from her sister, Kris, to make a mortgage payment. Kris deposited a check for that amount into Kim’s bank account. Hours later, Kim asked to borrow another $1,100. Kris took a cash advance on her credit card and deposited this amount into Kim’s account. When Kim did not repay her, Kris filed a suit, arguing that she had loaned Kim the money. Can the court impose a contract between the sisters? Explain. [Panenka v. Panenka, 331 Wis.2d 731, 795 N.W.2d 493 (2011)] (See Types of Contracts.)

9.1 ACCEPTANCE. Lucas Contracting, Inc., is a small contractor in Carrollton, Ohio. Altisource Portfolio Solutions, Inc., hired Lucas to work on certain foreclosed properties. When payment for the work was not forthcoming, Lucas filed a suit in an Ohio state court against Altisource. Before the trial, Lucas e-mailed the terms of a settlement. The same day, Altisource e-mailed a response that did not challenge or contradict Lucas’s proposal and indicated agreement to it. Two days later, however, Altisource forwarded a settlement document that contained additional terms. Which e-mail proposal most likely satisfies the element of agreement to establish a contract? Explain. [Lucas Contracting, Inc. v. Altisource Portfolio Solutions, Inc., 2016 WL 529408 (2016)] (See Acceptance.)

9.2 OFFER. While riding her motorcycle, Amy Kemper was seriously injured when Christopher Brown hit her with his vehicle. Kemper wrote to Statewide Claims Services, the administrator for Brown’s insurer, asking for “all the insurance money that Mr. Brown had under his insurance policy.” In exchange, Kemper agreed to sign a limited release that could not contain “any language saying that [she would] have to pay Mr. Brown or his insurance company any of their incurred costs.” Statewide sent a check and a demand that Kemper “place money in an escrow account in regards to any and all liens pending.” Kemper refused the demand. Did Statewide and Kemper have an enforceable agreement? Discuss. [Kemper v. Brown, 325 Ga.App. 806, 754 S.E.2d 141 (2014)] (See Termination of the Offer.)

9.3 ACCEPTANCE. Kathy Wright and real estate agent Jennifer Crilow orally agreed to a contract with a “protection period.” Under this provision, if Wright’s property sold after the contract expired to a party who had been shown the property during the term of the contract, Crilow would still receive a commission. Crilow sent Wright a written copy of the agreement. Wright crossed out the protection-period provision and then signed and returned the copy. Before the contract expired, Crilow showed Wright’s property to Michael Ballway. After the contract expired, Ballway bought the property. Does Wright owe Crilow a commission? Why or why not? [Crilow v. Wright, __ Ohio App.3d __ (2011)] (See Acceptance.)

10.1 BARGAINED-FOR EXCHANGE. On Brenda Sniezek’s first day of work for the Kansas City Chiefs Football Club, she signed a document that compelled arbitration of any disputes that she might have with the Chiefs. In the document, Sniezek promised that on the arbitrator’s decision, she would release the Chiefs from any related claims. Nowhere in the document did the Chiefs agree to do anything in return for Sniezek’s promise. Was there consideration for the arbitration provision? Explain. [Sniezek v. Kansas City Chiefs Football Club, 402 S.W.3d 580 (Mo.App. W.D. 2013)] (See Elements of Consideration.)

10.2 RESCISSION. Farrokh and Scheherezade Sharabianlou agreed to buy a building owned by Berenstein Associates for $2 million. They deposited $115,000 toward the purchase. Before the deal closed, an environmental assessment of the property indicated the presence of chemicals used in dry cleaning. This substantially reduced the property’s value. Do the Sharabianlous have a good argument for the return of their deposit and rescission of the contract? Explain. [Sharabianlou v. Karp, 181 Cal.App.4th 1133, 105 Cal.Rptr.3d 300 (1 Dist. 2010)] (See The Lack of Consideration.)

11.1 MINORS. Bonney McWilliam’s father deeded a house in Norfolk County, Massachusetts, to Bonney and her daughter, Mechelle. Each owned a one-half interest. Described as “an emotionally troubled teenager,” Mechelle had a history of substance abuse and a fractured relationship with her mother. At age sixteen, in the presence of her mother and her mother’s attorney, Mechelle signed a deed transferring her interest in the house to Bonney. Later, still at odds with her mother, Mechelle learned that she did not have a right to enter the house to retrieve her belongings. Bonney claimed sole ownership. Mechelle filed a lawsuit in a Massachusetts state court against her mother to declare the deed void. Could the transfer of Mechelle’s interest be disaffirmed? Explain. [McWilliam v. McWilliam, 46 N.E.3d 598 (Mass.App.Ct. 2016)] (See Minors.)

1.2 MENTAL INCOMPETENCE. William Zurenda was disabled by post-traumatic stress disorder (PTSD), but had not been adjudged mentally incompetent. During divorce proceedings, he agreed to pay his spouse $5,000 within six months. The settlement was read aloud in court, and the judge asked William if he understood that the settlement was binding. He answered that he did. Later, he argued that he should not have to pay the $5,000, because the stress of the divorce had made his PTSD worse. Is the settlement void on the basis of mental incompetence? Explain. [Zurenda v. Zurenda, 85 A.D.3d 1283, 925 N.Y.S.2d 221 (3 Dept. 2011)] (See Mentally Incompetent Persons .)

11.3 MENTAL INCOMPETENCE. Dorothy Drury suffered from dementia and chronic confusion. When she became unable to manage her own affairs, including decisions about medical and financial matters, her son arranged for her to move into an assisted-living facility. During admission, she signed a residency agreement, which included an arbitration clause. After she sustained injuries in a fall at the facility, a suit was filed to recover damages. The facility asked the court to compel arbitration. Was Dorothy bound to the residency agreement? Discuss. [Drury v. Assisted Living Concepts, Inc., 245 Or.App. 217, 262 P.3d 1162 (2011)] (See Mentally Incompetent Persons .)

25.1 AGENT’S AUTHORITY. Kindred Nursing Centers East, LLC, owns and operates Whitesburg Gardens, a physical rehabilitation facility in Huntsville, Alabama. Lorene Jones was admitted to the facility following knee-replacement surgery. Jones’s daughter, Yvonne Barbour, signed the admission forms as her mother’s representative in Jones’s presence. Jones did not object. The forms included an “Alternative Dispute Resolution Agreement,” which provided for binding arbitration in the event of a dispute. Six days later, Jones was transferred to a different facility. After recovering from the surgery, she filed a suit in an Alabama state court against Kindred, alleging negligence. Can Jones be compelled to submit her claim to arbitration? Explain. [Kindred Nursing Centers East, LLC v. Jones, 201 So.3d 1146 (Ala. 2016)] (See Agent’s Authority.)

25.2 DETERMINING EMPLOYEE STATUS. Nelson Ovalles worked as a cable installer for Cox Rhode Island Telecom, LLC, under an agreement with a third party, M&M Communications, Inc. The agreement stated that no employer-employee relationship existed between Cox and M&M’s technicians, including Ovalles. Ovalles was required to designate his affiliation with Cox on his work van, clothing, and identification badge, but Cox had minimal contact with him and limited power to control the manner in which he performed his duties. Cox supplied cable wire and similar items, but the equipment was delivered to M&M, not to Ovalles. Is Ovalles an employee of Cox or an independent contractor? Explain. [Cayer v. Cox Rhode Island Telecom, LLC, 85 A.3d 1140 (R.I. 2014)] (See Principal-Agent Relationships.)

25.3 EMPLOYMENT RELATIONSHIPS. William Moore owned Moore Enterprises, a wholesale tire business. William’s son, Jonathan, worked as a Moore Enterprises employee while he was in high school. Later, Jonathan started his own business, called Morecedes Tire. Morecedes regrooved tires and sold them to businesses, including Moore Enterprises. A decade after Jonathan started Morecedes, William offered him work with Moore Enterprises. On the first day, William told Jonathan to load certain tires on a trailer but did not tell him how to do it. Was Jonathan an independent contractor? Discuss. [Moore v. Moore, __ P.3d __ (Idaho 2011)] (See Principal-Agent Relationships.)

26.1 UNEMPLOYMENT COMPENSATION. Jefferson Partners entered into a collective bargaining agreement (CBA) with the Amalgamated Transit Union. Under the CBA, employees had to either join the union or pay a fair share—85 percent—of union dues, which were used to pay for administrative costs incurred by the union. An employee who refused to pay was subject to discharge. Jefferson hired Tiffany Thompson to work as a bus driver. When told of the CBA requirement, she refused either to join the union or to pay the dues. She was fired on the ground that her refusal constituted misconduct. Is Thompson eligible for unemployment compensation? Explain. [Thompson v. Jefferson Partners, 2016 WL 953038 (Minn.App. 2016)] (See Retirement Income and Security.)

26.2 UNEMPLOYMENT COMPENSATION. Fior Ramirez worked as a housekeeper for Remington Lodging & Hospitality, a hotel in Florida. When her father, who lived in the Dominican Republic, had a stroke, Ramirez asked her manager, Katie Berkowski, for time off to be with him. Berkowski refused the request. Two days later, Berkowski got a call from Ramirez to say that she was with her father. He died about a week later. When Ramirez returned to work, Berkowski claimed Ramirez had voluntarily abandoned her position. Ramirez then applied for unemployment compensation. Under the applicable Florida statute, “an employee is disqualified from receiving benefits if he or she voluntarily left work without good cause.” Does Ramirez qualify for benefits? Explain. [Ramirez v. Reemployment Assistance Appeals Commission, 135 So.3d 408 (Fla.App. 2014)] (See Retirement Income and Security.)

26.3 COLLECTIVE BARGAINING. SDBC Holdings, Inc., acquired Stella D’oro Biscuit Company, a bakery in New York City. At the time, a collective bargaining agreement existed between Stella D’oro and the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, Local 50. During negotiations to renew the agreement, Stella D’oro allowed Local 50 to examine and take notes on the company’s financial statement and offered the union an opportunity to make its own copy, but Stella D’oro would not provide Local 50 with a copy. Did Stella D’oro engage in an unfair labor practice? Discuss. [SDBC Holdings, Inc. v. National Labor Relations Board, 711 F.3d 281 (2d Cir. 2013)] (See Labor Law.)

27.1 DISCRIMINATION BASED ON DISABILITY. Dennis Wallace was a deputy sheriff for Stanislaus County, California, when he injured his left knee. After surgery, he was subject to limits on prolonged standing, walking, and running. The county assigned him to work as a bailiff. The sergeants who supervised him rated his performance above average. Less than a year later, without consulting those supervisors, the county placed Wallace on an unpaid leave of absence under the mistaken belief that he could not safely perform the essential functions of the job. Did the county discriminate against Wallace on the basis of disability? Explain. [Wallace v. County of Stanislaus, 245 Cal.App.4th 109, 199 Cal.Rptr.3d 462 (5 Dist. 2016)] (See Discrimination Based on Disability.)

27.2 DISCRIMINATION BASED ON DISABILITY. Cynthia Horn worked as a janitor for Knight Facilities Management–GM, Inc., in Detroit, Michigan. When Horn developed a sensitivity to cleaning products, her physician gave her a “no exposure to cleaning solutions” restriction. Knight then discussed possible accommodations with her. Horn suggested that restrooms be eliminated from her cleaning route or that she be provided with a respirator. Knight explained that she would be exposed to cleaning solutions in any situation because they were airborne and concluded that there was no work available within her physician’s restriction. Has Knight violated the Americans with Disabilities Act by failing to accommodate Horn’s requests? Explain. [Horn v. Knight Facilities Management–GM, Inc., 2014 WL 715711 (6th Cir. 2014)] (See Discrimination Based on Disability.)

27.3 AGE DISCRIMINATION. Beginning in 1986, Paul Rangel was a sales professional for pharmaceutical company Sanofi-Aventis U.S., LLC (S-A). Rangel had satisfactory performance reviews until 2006, when S-A issued new expectations guidelines that included sales call quotas and other standards that he failed to meet. After two years of negative performance reviews, Rangel—who was then more than forty years old—was terminated. His termination was part of a nationwide reduction in sales professionals who had not met the expectations guidelines. The terminated salespeople included younger workers. Did S-A engage in age discrimination? Discuss. [Rangel v. Sanofi Aventis U.S., LLC, 2013 WL 142040 (10th Cir. 2013)] (See Discrimination Based on Age.)

28.1 PARTNERSHIPS. Leisa Reed and Randell Thurman lived together in Spring City, Tennessee. Randell and his father, Leroy, formed a cattle-raising operation and opened a bank account in the name of L&R Farm. Within a few years, Leroy quit the operation. Leisa and Randell each wrote a personal check for $5,000 to buy his cattle. Leisa picked up supplies, fed and administered medicine to cattle, collected hay, and participated in the bookkeeping for L&R. Later, checks drawn on her personal account for $12,000 to buy equipment and $35,000 to buy cattle were deposited into the L&R account. After several years, Leisa decided that she no longer wanted to associate with Randell, but they could not agree on a financial settlement. Was Leisa a partner in L&R? Is she entitled to half of the value of L&R’s assets? Explain. [Reed v. Thurman, 2015 WL 1119449 (Tenn.App. 2015)] (See Partnerships.)

28.2 PARTNERSHIPS. Karyl Paxton asked Christopher Sacco to work with her interior design business, Pierce Paxton Collections, in New Orleans. At the time, they were in a romantic relationship. Sacco was involved in every aspect of the business—bookkeeping, marketing, and design—but was not paid a salary. He was reimbursed, however, for expenses charged to his personal credit card, which Paxton also used. Sacco took no profits from the firm, saying that he wanted to “grow the business” and “build sweat equity.” When Paxton and Sacco’s personal relationship soured, she fired him. Sacco objected, claiming that they were partners. Is Sacco entitled to 50 percent of the profits of Pierce Paxton Collections? Explain. [Sacco v. Paxton, 133 So.3d 213 (La.App. 4th Cir. 2014)] (See Partnerships.)

28.3 JOINT AND SEVERAL LIABILITY. Dan and Lori Cole operated a Curves exercise facility in Angola, Indiana, as a partnership. The firm entered into a lease for commercial space from Flying Cat, LLC, for a renewable three-year term. At the end of the three-year term, Lori signed an extension on the lease agreement. When the Coles divorced two years later, they dissolved their partnership. At the time, Flying Cat was owed more than $21,000 on the lease. More rent went unpaid. By the end of the second term, Flying Cat was owed almost $50,000. Even though Lori was the partner who signed the lease’s extension, can Dan be held liable for the full amount owed to Flying Cat? Why or why not? [Curves for Women Angola v. Flying Cat, LLC, 983 N.E.2d 629 (Ind.App. 2013)] (See Partnerships.)

29.1 CRIMINAL LIABILITY. Jennifer Hoffman took her smartphone to a store owned by R&K Trading, Inc., for repairs. Later, Hoffman filed a suit in a New York state court against R&K and Verizon Wireless, Inc., seeking to recover damages for a variety of torts. She alleged that an R&K employee, Keith Press, had examined her phone in a store’s backroom, accessed private photos of her, and then circulated the photos to the public. Hoffman testified that “after the incident, she learned from another R&K employee that personal information and pictures had been removed from the phones of other customers.” Can R&K be held liable for Press’s torts? Explain. [Hoffman v. Verizon Wireless, Inc., 5 N.Y.S.3d 123, 125 A.D.3d 806 (2015)] (See Corporate Classifications, Powers, and Liability.)

29.2 PIERCING THE CORPORATE VEIL. Scott Snapp contracted with Castlebrook Builders, Inc., which was owned by Stephen Kappeler, to remodel a house. Kappeler estimated the cost at $500,000. Eventually, however, Snapp paid Kappeler more than $1.3 million. Snapp sought to be reimbursed, but Kappeler could not provide an accounting for the project. Specifically, he could not explain double and triple charges, nor whether the amount that Snapp paid had actually been spent on the house. Meanwhile, Kappeler had commingled personal and corporate funds. As for Castlebrook, it had issued no shares of stock, and the minutes of the corporate meetings “all looked exactly the same.” Are these sufficient grounds to pierce the corporate veil? Explain. [Snapp v. Castlebrook Builders, Inc., 54 Ohio App.3d 361, 7 N.E.2d 574 (2014)] (See Formation of a Corporation.)

29.3 RIGHTS OF SHAREHOLDERS. Stanka Woods is the sole member of Hair Ventures, LLC. Hair Ventures owns 3 million shares of stock in Biolustré, Inc. For several years, Woods and other Biolustré shareholders did not receive notice of shareholders’ meetings or financial reports. On learning that Biolustré planned to issue more stock, Woods, through Hair Ventures, demanded to see Biolustré’s books and records. Biolustré asserted that the request was not for a proper purpose. Does Woods have a right to inspect Biolustré’s books and records? If so, are there any limits to this inspection? Explain. [Biolustré Inc. v. Hair Ventures, LLC, 2011 WL 540574 (Tex.App.—San Antonio 2011)] (See Corporate Ownership—Shareholders.)

30.1 BUSINESS JUDGMENT RULE. Country Contractors, Inc., contracted to provide excavation services for A Westside Storage of Indianapolis, Inc. Country did not complete the job and later filed for bankruptcy. Stephen Songer and Jahn Songer were Country’s sole shareholders and officers. The Songers had not misused the corporate form to engage in fraud, the firm had not been undercapitalized, personal and corporate funds had not been commingled, and Country had kept accounting records and minutes of its annual board meetings. Are the Songers personally liable for Country’s failure to complete its contract? Explain. [Country Contractors, Inc. v. A Westside Storage of Indianapolis, Inc., 4 N.E.3d 677 (Ind.App. 2014)] (See Duties of Directors and Officers.)

30.2 DUTY OF LOYALTY. Kids International Corp. produced children’s wear for Walmart and other retailers. Gila Dweck was a Kids director and its chief executive officer. Because she felt that she was not paid enough for the company’s success, she started Success Apparel to compete with the firm. Success operated out of Kids’ premises, used its employees, borrowed on its credit, took advantage of its business opportunities, and capitalized on its customer relationships. As an “administrative fee,” Dweck paid Kids 1 percent of Success’s total sales. Did Dweck breach any fiduciary duties? Explain. [Dweck v. Nasser, 2012 WL 161590 (Del. Ch.2012)] (See Duties of Directors and Officers.)

30.3 FIDUCIARY DUTY OF OFFICERS. Designer Surfaces, Inc., fabricated and installed countertops. Designer’s corporate officers were Howard Berger and John McCarthy. The company bought materials from Arizona Tile, LLC, on an open account. When Designer became insolvent, it could not pay Arizona Tile the balance due, including amounts for materials for which Designer had already received payment. Arizona Tile filed a suit in an Arizona state court against Berger and McCarthy for diverting corporate funds. Arizona Tile argued that the use of the funds for purposes other than to pay for the materials was a breach of fiduciary duty. Berger and McCarthy argued that corporate law did not impose on corporate officers a fiduciary duty or personal liability for breach of such a duty to suppliers of materials. Which argument is more credible and why? [Arizona Tile, LLC v. Berger, 223 Ariz. 491, 224 P.3d 988 (Ariz.App. 2010)] (See Duties of Directors and Officers.)

APA

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