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Tuesday, March 29, 2011

Quick Civil Procedure Case

Caterpillar Inc. v. Lewis:
519 U.S. 61 (1996)
Issue: Does the District Court's initial misjudgment still burden and run with the case, or is it overcome by the eventual dismissal of the nondiverse party.
Rule: Federal Removal JDX; Cure             
-Case may be removed to federal court within 30 days of receiving notice of availability of doing so      
-May not be longer than 1 year after commencement of the action
-Plaintiff may then request, within 30 days, to have the case remanded to state court
-If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded
Application: There are two "givens" in this case
  1. The district court, in denying Lewis' motion to remand, incorrectly treated Whayne as effectively dropped from the case prior to removal
  2. The 6th circuit correctly determined that the complete diversity requirement was not satisfied at the time of removal
-American Fire & Casualty v. Finn: The absence of federal jurisdiction at the time of judgment required the court of appeals to vacate the district court's judgment.
-"There are cases, which uphold judgments in the district courts even though there was no right to removal".. "in those case, the federal trial court would have had original jurisdiction of the controversy had it been brought in the federal court in the posture it had at the time of the actual trial of the cause or of the entry of the judgment"
-Grubbs v. General Electric Credit: The erroneous removal need not cause the destruction of a final judgment, if the requirements of federal subject-matter jurisdiction are met at the time judgment is entered
-Neither American or Grubbs involved a plaintif who moved promptly, but unsuccessfully, to remand a case improperly removed from state court to rederal court, and then challenged on appeal a judgment entered by the federal court.
-Lewis' Arguments:
  1. The ultimate satisfaction of the subject matter jurisdiction requirement out not swallow up antecedent statutory violations.
  2. This would disfavor diligent plaintiffs who timely, but unsuccessfully, move to check improper removals in district court
  3. That courts would allow improperly removing defendants to profit from their disregard of Congress' instructions, and their ability to lead district judges into error
  4. If the final judgment against him is allowed to stand, defendants will have an incentive to attempt wrongful removals.
    1. Rests upon the assumption that district courts generally will not comprehend or will balk at applying the rules of removal Congres has prescribed
    2. Further assumes that the absence of diversity will first escape detection, then disappear prior to judgment
-Had Caterpillar waited until the case was ripe for removal (until Whayne was dismissed), the 1 year limitation would have barred the removal.
-Overriding Considerations: Finality, efficiency, and economy
-Newman-Green v. Alfonzo-Larrain: Found that requiring dismissal after years of litigation, would impose unnecessary and wasteful burdens on the parties, judges and other litigants waiting for judicial attention
-The same may be said of the remain that Lewis seeks here
-To wipe out the judgment and return the case to state court would impose an exorbitant cost on the dual court system, a cost incompatible with the fair and unprotracted administration of justice.
Conclusion: The error is overcome.
-Plaintiff: James Lewis, resident of KENTUCKY
-Liberty Mutual Insurance: Insurance carrier for Lewis' employer. MASSACHUSETTS
-Defendant: Caterpillar: Manufacturer, DELAWARE Corp, Principal place of business in ILLINOIS
-Whayne Supply Co: Servicer, KENTUCKY Corp, Principal place of business in KENTUCKY

-June 22, 1989: Plaintiff files suit, asserting state-law claims based on defective manufacture, negligent maintenance, failure to warn, and breach of warranty.
-Several Months Later: Liberty mutual intervenes as a plaintiff, asserted subrogation claims against both defendants for workers' compensation benefits Liberty had paid to Lewis on behalf of his employer
-Lewis enters into a settlement agreement with defendant Whayne, less than 1 year after filing his complaint
-June 21, 1990: Caterpillar files notice of removal, in US Dist Ct. Eastern Dist. Of KY, for diversity jurisdiction
-One day before statutory requirement of removal within 1 year was in effect.
-Contended that since Whayne was no longer a party, there was diversity of the parties
-Lewis objected to the removal, and moved to remand. Stated that Liberty had not settled claim with Whayne yet.
-District court denied the motion. Stated that Lewis had already settled claim with Whayne
-June, 1993: Liberty and Whayne entered into a settlement of the subrogation claim, and Whayne was dismissed from the lawsuit
-Nov, 1993: With Caterpillar as the sole defendant, case went to trial.
-Unanimous verdict for Caterpillar
-Feb 1, 1994: Lewis' motion for a new trial was denied

-6th Circuit: Accepted Lewis' argument, and found that the District Court's judgment should be vacated

Super busy with school right now, I'll try to be more diligent in my posts :( Hope everyone is doing well!

Sunday, March 20, 2011

Property: Easements

Anderson v. Secret Harbor Farms:
Supreme Court of Washington
47 Wash. 2d 490 (1955)
Issue: Was an easement created?
Rule: Easements
Application: No evidence that anyone ever gave defendants or their predecessors in interest permission to use the footpath.
-One defendant testified that when the owner took her to the island in Jan 1938, to inspect the property, the landed at the dock and traversed the path
-Defendants have since used it, had have about 40 people on their place
-No evidence that anyone ever objected to the use of the path by defendants and their predecessors in interest, prior to the erection of the "no trespassing" signs in 1946
-Trial court found that prior to 1946, the path was used permissively
-Was not explicit permission, rather it was implicit as a neighborly act
-The burden of proving the existence of a prescriptive right always rests upon the one who is to benefit by its establishment
-The burden never shifts
-If express permission is given to use the right of way, use does not ripen into a prescritive right simply by lapse of time
-The use has been continuous, uninterrupted, open, and notorious without deviation in course by defendants and their predecessors in interest for longer than the prescribed statutory period
-From the use of the footpath by defendants and their predecessors in interest was hostile and "indeed adverse and not permissive'
-Defendants have sustained the burden of proving their affirmative defense to plaintiff's action to quiet title to the property involved, insofar as defendants'' right to use the footpath is concerned
Conclusion: Yes

-Plaintiffs and defendants own adjoining tracts of land on Cypress Island
-Both tracts border on Secret Harbor
-Defenants' land lies generally to the north and west of the harbor
-Plaintiffs land lies along the south side
-Defendants' access to their property is determined by the tide
-At high tide, they can enter the harbor by boat and reach their property
-At low tide, they must dock at an old boat landing on plaintiffs' land at the entrance, and traverse a well-defined footpath across the land of plaintiffs to their own property
-The footpath existed prior to 1890, and has been used by defendants and their predecessors in interest since that time.
-Begins on the western boundary of the plaintiffs' property and runs in a generally northeasternly direction to the eastern side of plaintiffs' property.
-Generally parallels the southern shore line of the harbor
-1939: Defendants purchased their property in 1939 from the Wooten family
-T.J. Wooten, who left the island in 1915, testified that he had used the footpath in question for 25 years
-1946: plaintiff purchased their property from Clarence Shaw, who acquired it late in 1940
-1946: On two occasions, "No Trespassing" signs were posted at the boat landing in an attempt to close the path
-On one occasion the signs were kicked down, on the other, they were ignored by the defendants
-Plaintiffs commenced the action to enjoin defendants from using the footpath and to remove the cloud on their title, which exists in the form of defendants' alleged right to use the footpath
-Defendants claim affirmative defense of a prescriptive right to an easement over plaintiffs' property

Sorry for the loooooooooooong break from posting, have been on spring break the last week :D
Good luck with finals, those of you who have them.

Sunday, March 13, 2011

Torts: Joint and Several Liability

Hymowitz v. Eli Lilly & Co.:
Court of Appeals of New York (1989)
73 N.Y.2d 487
Application: There are two barriers to plaintiff recovery in this state
  1. Identification of the manufacturer of the DES ingested in a particular case is generally impossible
    1. Has many causes: All DES was of identical chemical composition, pharmacists usually filled prescriptions from whatever was on hand, long latency period (memories fade, records are lost or destroyed, and witnesses die)
      1. Approximately 300 manufacturers produced the drug, with companies entering and leaving the market continuously during the 25 years that DES was sold for pregnancy
      2. No reason to attempt to discover the manufacturer of the drugs until years later.
  1. Due to the latent nature of DES injures, many claims were barred by the Statute of Limitations before the injury was discovered
    1. Long-Standing rule that the limitations period accrued upon exposure in actions alleging personal injury caused by toxic substances
-The accepted tort doctrines of alternative liability and concerted action are available in some personal injury cases to permit recovery where the precise identification of a wrongdoer is impossible
-Near unanimous view of high State courts that does not permit recovery in DES cases
-Summers: Where two defendants breach a duty to the plaintiff, but there is uncertainty regarding which one caused the injury, "the burden is upon each such actor to prove that he has not caused the harm"
-Without this device, both defendants could remain silent, and plaintiff would not recover.
-Use of the Alternative liability doctrine, generally requires that the defendants have better access to information than does the plaintiff, and that all possible tortfeasors are before the court
-When there is a small number of potential wrongdoers, the likelihood that one of they caused the harm is high.
-In DES cases, there is a great number of possible wrongdoers, some of whom no longer exist
-Additionally, many years elapse between the ingestion of the drug and the injury.
-Consequently, DES defendants are in no better position to identify the wrongdoer
-Theory of Concerted action: Provides for joint and several liability on the part of all defendants having an understanding, express or tacit, to participate in "a common plan or design to commit a tortious act" (usually seen in drag racing cases)
-Drug companies were engaged in extensive parallel conduct in developing and marketing DES
-Nothing in the record, beyond this similar conduct, to show any agreement, tacit or otherwise, to market DES for pregnancy use without taking proper steps to ensure the drugs safety
-Without more, parallel activity is insufficient
-Present legal theories do not support a cause of action for DES cases
-The present circumstances call for recognition of a realistic avenue of relief for plaintiffs injured by DES
-These cases present many of the same considerations that have prompted courts in the past to modify the rules of personal injury liability, in order to "achieve the ends of justice in a more modern context"
-Here, judicial action is required to overcome the inordinately difficult problems of proof caused by contemporary products and marketing techniques
-The DES situation is a singular case, with manufacturers acting in a parallel manner to produce an identical, generically marketed product, which causes injuries years later, and which has evoked a legislative response reviving previously barred actions
-A market share theory, based upon a national market, provides the best solution
-The reliable determination of any market smaller than the national one likely is not practicable
-The adoption of a national market will likely result in a disproportion between the liability of individual manufacturers and the actual injuries each manufacturer caused in the state
-Market share theory cannot be founded upon the belief that, over the run of cases, liability will approximate causation in this state
-Apportion liability so as to correspond to the overall culpability of each defendant, measured by the amount of risk of injury each defendant created to the public-at-large
-A defendant cannot be held liable if it did not participate in the marketing of DES for pregnancy use
-The liability of DES produces is several only, and should not be inflated when all participants in the market are not before the court in a particular case.
-As a practical matter, this will prevent some plaintiffs from recovering 100% of their damages
-Defendants shouldn’t be liable beyond their fair share of responsibility
-Defendants argue that the revival of barred DES claims was unconstitutional as a denial of both due process and equal protection under state and federal constitutions
-Rejected this claim.
Conclusion: Affirmed

-Plaintiffs allege that they were injured by the drug diethylstilbestrol (DES) ingested by their mothers during pregnancy
-Not class action, but representative of 500 similar actions pending in the courts of the state.

-DES: A synthetic substance that mimics the effect of estrogen-- the female hormone
-1937: DES invented by British researchers, but never patented
-1941: FDA approved the new drug applications (NDA) of 12 manufacturers to market DES for the treatment of various maladies, not directly involving pregnancy
-1947: FDA began approving the NDAs of manufacturers to market DES for the purpose of preventing human miscarriages
-1951: FDA concluded that DES was generally safe for pregnancy use, and stopped requiring the filing of NDAs when new manufacturers sought to produce the drug for this purpose
-1971: FDA banned the use of DES as a miscarriage preventative, when studies established the harmful latent effects of DES upon the offspring of mothers who took the drug.
-Tests indicated that DES caused vaginal adenocarcinoma, a form of cancer, and adenosis, a precancerous vaginal or cervical growth.

Procedural History:
-Defendants moved for summary judgment dismissing the complaints, because plaintiffs could not identify the manufacturer of the drug that allegedly injured them.
-In 3 appeals, defendants also moved on Statute of Limitations grounds, arguing that the revivial of the actions was unconstitutional under the state and federal constitutions, and that the complaints, therefore, are time barred and should be dismissed.
-Granted plaintiffs cross-motion, dismissing defendants' affirmative defenses that the actions were time barred
-Trial Court: Denied all of the motions
-Appellate division: Affirmed

-Would adopt the market share theory, and apportion liability to all defendants, except those who can prove that their product could not have caused the injury
-Plaintiffs would thus be able to recover by showing:
  1. That the plaintiff's mother ingested DES during pregnancy
  2. That the plaintiff's injuries were caused by DES
  3. That the defendant or defendants produced and marketed DES for pregnancy purposes
-Burden of proof would then shift to defendants to exculpate themselves by establishing, by a preponderance, that the plaintiff's mother could not have ingested their particular pill
-Their respective share of the plaintiffs damages would be measured by their share of the national market of DES produced and marketed for pregnancy purposes during the period in question
-The majority deprives plaintiffs of the opportunity to recover fully for their injures by limiting the defendants liability for the plaintiffs damages to several liability
-Also only allows defendants who produced DES for pregnancy purposes to be liable
-When the majority eliminates the fundamental causative factor as a basis for recovery, it effectively indulges in the act of judicial legislating

Wednesday, March 9, 2011

Torts: Liability

12:40 PM
Summers v. Tice:
Supreme Court of California
33 Cal.2d 80 (1948)
Issue: May the judgment against both defendants stand?
Application: Defendants argue that they are not joint tort feasors, and thus jointly and severally liable, as they were not acting in concert, and that there is not sufficient evidence to show which defendant was guilty of the negligence which caused the injuries
-Tice argues that there is evidence to show that the shot which struck the plaintiff came from Simonson's gun, because of admissions allegedly made by him to third person
-Further contends that there was no evidence that the shot came from his gun
-The court sufficiently found on the issue that defendants were jointly liable and that thus the negligence of both was the cause of the injury or to that legal effect.
-Oliver v. Miles: Two hunters, who were negligent in firing, hit a third person, who was injured. Court held them to both be liable for the injury, although only one could have caused it.
-If one of the defendants can escape liability, then both may escape liability, and leave the plaintiff without a viable remedy
-Ybarra: Defendant is in the better position to offer evidence to determine who caused the injury. (Injured unconscious patient on the operating table). All those who had connection with the operation could be held liable.
-Defendants argue that the plaintiff has now changed the theory of his case in claiming a concert of action; that he did not plead or prove such concern.
-From what has been said, no change in theory has been made
-Joint liability, as well as the lack of knowledge as to which defendant was liable, was pleaded and the proof developed the case under either theory.
-Policy reasons support this contention, that 2 wrongdoers should bear the cost, instead of the innocent plaintiff
Conclusion: Yes
-Both defendants and plaintiffs were hunting, when both defendants fired in the plaintiffs direction
-One shot struck him in the eye, while the other shot struck him in the lip
-Both defendants were using the same gauge shotgun, and the same size shot

Procedural History:
-Trial Court: Found both defendants negligent and found that plaintiff was in no way at fault
-Unable to decide which defendant's shot hit the plaintiff, the judge awarded judgment against both defendants

Sunday, March 6, 2011

Contracts: Breach of Contract

Harrell v. Seal Colony, Inc.:
Court of Special Appeals of Maryland
35 Md. App. 300 (1977)
Issue: Did the plaintiff breach the contract?
Rule: Anticipatory Breach
Application: No evidence that Defendant ever gave notice, written or otherwise, to plaintiff of "substantial completion" of the condominium unit he had agreed to purchase.
-Defendant unilaterally attempted to convert plaintiffs request for a mutual recession of the contract to an anticipatory breach or repudiation on his part.
-The evidence does not support the conclusion that the plaintiff breached his contract.
-Defendant argues that plaintiffs statements on May 28th, that he "wanted to cancel the contract" and "did not want to proceed with the settlement" because his "personal financial situation… was such that he felt he could not proceed with the purchase of this unit" amounted to an impermissible unilateral cancellation of the contract, and therefore, defendant was justified withholding the deposit.
-Defendant concedes that the July request to cancel was not a breach, but argued that the contract had already been breached.
-Defendant points to the fact that plaintiff failed to answer defendants requests to chose which of two attorney's offices he preferred as the location for settlement
-It was the defendants obligation to chose the location for settlement. Plaintiffs failure to reply cannot be considered a breach.
-The evidence, as a whole, is legally insufficient to permit a finding that there was "a definite and unequivocal manifestation of intention" of the plaintiffs part that "he would not render the promised performance when the time fixed for it arrived"
-Trial court never reached the issue of whether or not defendant was guilty of an anticipatory breach as alleged by plaintiff when it resold the property to a third party.
-It is a permissible finding, for the trial court to find, that there was a mutual recession of the contract effected by the words and conduct of the parties.
Conclusion: No, at least not unilaterally

-Nov 14, 1972: Plaintiff agreed to buy, and defendant agreed o sell (for $74,900) a condominium unit to be constructed by defendant.
-Called for a deposit of $11,235 and the balance of the purchase price to be paid "at settlement." Deposit consisted of $5,000 cash paid by plaintiff, and a promissory note for the remaining $6,235, payable "at settlement."
-Jan 12, 1974: Parties agreed, in writing, to extend the limiting date for delivery to Dec 31, 1974.
-Nov 12, 1974: Plaintiff filed a declaration in the Circuit Court for Montgomery County against defendant, and its agent (Freeman), seeking damages for an alleged anticipatory breach of contract
-Plaintiff claimed that defendants had "repudiated" the contract and sold the condominium unit to another buyer for more than the contract price
-Plaintiff presented various documentary exhibits, his own testimony, and testimony of an employee of the defendants agent.
-Judge concluded that the plaintiff was without justification to unilaterally cancel the contract, and judgment was entered for the defendant
-After the contract was formed, defendant Freeman was only an agent and thus will not be liable
-May 28, 1974: Plaintiff asked if he could assign the contract, and was told he couldn't.
-Told defendant that he would be interested in getting out of the contract.
-Was sent a letter, enclosing a "cancellation request, which must be signed in order to process the release"
-Plaintiff responded with a letter, stating that his cancellation was predicated on the return of his deposit. Also included the cancellation request
-Aug 18, 1974: Defendant entered into a contract to sell the condo for $82,000 to a 3rd party
-Aug 23, 1974: Defendant sent plaintiff letter, stating that his request to cancel the contract was accepted, and that his deposit would be kept as liquidated damages
-Aug 28, 1974: Letter returning the promissory note, also contained the cancellation request, with the plaintiffs condition of returning the deposit crossed out.

Procedural History:
-Trial Court: Found that plaintiff breached the contract

Friday, March 4, 2011

Contracts: Sample Contract Intro







JANUARY 14, 2011


            THIS ASSET PURCHASE AGREEMENT is dated January 14, 2011 by and between and ALPHA CABLE PROPERTIES LIMITED PARTNERSHIP, a Washington limited partnership ("SELLER" or "ACP"), and BETA COMMUNICATIONS I, LLC, a Delaware limited liability company ("BUYER").


            A. Seller owns and operates cable television system serving certain communities in Texas (as set forth more particularly in Schedule 1.28) and,

            B. Seller desires to sell, and Buyer wishes to buy, substantially all of Seller's assets used in the operation of the System, as such term is defined in Section 1.28, and the business related thereto (collectively the "BROADBAND BUSINESS") for the price and on the terms and conditions set forth in this Agreement.

 [Section 1, the defined terms has been omitted]


      2.1. AGREEMENT TO SELL AND PURCHASE. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell, transfer and deliver to Buyer on the Closing Date, and Buyer agrees to purchase from Seller on the Closing Date, all of the Assets, free and clear of any claims, liabilities, mortgages, liens, pledges, conditions, charges or encumbrances of any nature whatsoever except for Permitted Encumbrances, which Assets include the following:

            2.1.1. the Personal Property;

            2.1.2. the Real Property;

            2.1.3. the Franchises;

Take some time to review these, and I'll post some helpful tips for reading similar contracts. Also, I'll post some key points to look for. Have fun :D

            2.1.4. the Contracts;

            2.1.5. the Accounts Receivable;

            2.1.6. all of Seller's technical information and data, machinery and equipment warranties, maps, computer discs and tapes, plans, diagrams, blueprints and schematics, including filings with the Franchising Authorities and the FCC relating to the System (other than the materials described in Section 2.2 hereof);

            2.1.7 all payments and sums deposited or advanced by Seller to a landlord, utility, governmental agency or any other party as a security deposit or in exchange for initiation of a service, other than performance bonds or payments received related to programming;

            2.1.8 subject to Section 2.2, all books and records relating to the business or operations of the Systems, customer records and all records required by the Franchising Authorities to be kept, subject to the right of Seller to have such books and records made available to Seller for a period of three years from the Closing Date; and

            2.1.9. the going concern value and, subject to Section 2.2.5, any of Seller's other intangible assets, if any, with respect to the System.

      2.2. EXCLUDED ASSETS. The Assets shall exclude the following assets (the "EXCLUDED ASSETS"):
             2.2.1. Seller's cash on hand, (other than petty cash for which an adjustment shall be made under Section 2.5), as of the Closing Date and all other cash in any of Seller's bank or savings accounts, including, without limitation, customer advance payments and deposits; any and all bonds, surety instruments, insurance policies and all rights and claims thereunder, letters of credit or other similar items and any cash surrender value in regard thereto, and any stocks, bonds, certificates of deposit and similar investments;

            2.2.2. Any books and records that Seller is required by law to retain and any correspondence, memoranda, books of account, tax reports and returns and the like related to the System other than those described in Section 2.1.8, subject to the right of Buyer to have access to and to copy for a reasonable period, not to exceed three years from the Closing Date, and Seller's partnership books and records and other books and records related to internal partnership matters and financial relationships with Seller's lenders and affiliates;

            2.2.3. Any claims, rights and interest in and to any refunds of federal, state or local franchise, income or other taxes or fees of any nature whatsoever for periods prior to the Closing Date including, without limitation, fees paid to the U.S. Copyright Office or any causes of action relating to such refunds;

            2.2.4. All programming agreements and retransmission consent agreements of Seller, including those relating to or benefiting the System.

            2.2.5. All trademarks, trade names, service marks, service names, logos and similar proprietary rights of Seller or its affiliates, whether or not used in the business of the System;

            2.2.6. Except as specifically set forth herein, any Employee Plan, Compensation Arrangement or Multi-employer Plan;

            2.2.7. All rights to receive fees or services from any affiliate of Seller other than fees for services, if any, rendered by Buyer after Closing;

            2.2.8 Any and all assets and rights of Seller unrelated to the System;

            2.2.9. All equipment, software, licenses and agreements related to Seller's customer billing system;

            2.2.10. Any contracts, agreements or other arrangements between Seller and any affiliate of Seller;

            2.2.11 Those choses in action of Seller whether or not related to the System of the type set forth on Schedule 2.2.11, which shall exclude such choses in action that relate solely to the System and which accrue after Closing; and

            2.2.12. The assets listed on Schedule 2.2.12

      2.3. EARNEST MONEY DEPOSIT. Upon execution and delivery of this Agreement by Seller and Buyer, Buyer shall deliver to U.S. Bank National Association (the "ESCROW AGENT") the amount of ONE HUNDRED THOUSAND DOLLARS AND 00/100 ($100,000.00) (the "DEPOSIT"), to secure the obligations of Buyer to close under this Agreement. The Deposit shall be held in an account and applied pursuant to the terms of that certain Escrow Agreement, substantially in the form attached hereto as Exhibit A ("ESCROW AGREEMENT"), to be executed concurrently herewith by Buyer, Seller and Escrow Agent. Upon the Closing, the amount of the Deposit, together
with interest thereon, shall be delivered to Seller and credited against the Purchase Price. In the event of a termination of this Agreement, the Deposit together with interest therein shall be paid in accordance with Section 8.2 hereof.

      2.4. PURCHASE PRICE. The purchase price for the Assets shall be EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS AND 00/100 ($8,500,000.00) (the "PURCHASE PRICE"), and shall be paid by Buyer to Seller at the Closing as follows:

            2.4.1. Release to Seller of the Deposit together with the interest therein in accordance with the provisions of the Escrow Agreement; and

            2.4.2 Buyer shall deliver to the Escrow Agent for deposit into an escrow account an amount equal to EIGHT HUNDRED FIFTY THOUSAND DOLLARS AND 00/100 ($850,000.00) (the "HOLDBACK") to secure Seller's obligations under Section 9.2. The Holdback shall be held in an escrow account and applied pursuant to the terms of the Escrow Agreement. On the eighteen month anniversary of Closing, the Holdback, together with interest thereon, then remaining in the escrow account less any payments due to Buyer or pending claims made by Buyer pursuant to Section 9.4 together with interest attributable thereto, shall be delivered to Seller.

            2.4.3. Subject to credits for the Deposit and the Holdback, together with interest thereon, and subject to adjustments and prorations set forth in Section 2.5 below, by wire transfer of the balance of the Purchase Price in immediately available funds to Seller.


            2.5.1. All revenues, expenses and other liabilities arising from the System up until midnight on the day prior to the Closing Date, including subscriber and advertising revenues, franchise fees, pole and other rental charges payable with respect to cable television service, utility charges, real and personal property taxes and assessments levied against the Assets, salesperson advances, property and equipment rentals, applicable copyright or other fees, sales and service charges, taxes (except for taxes arising from the transfer of the Assets hereunder), and similar prepaid and deferred items, shall be prorated between Buyer and Seller in accordance with the principle that Seller shall be responsible for all expenses, costs and liabilities and entitled to all revenues allocable to the conduct of the business or operations of the System for the period prior to the Closing Date, and Buyer shall be responsible for all expenses, costs and obligations and entitled to all revenues allocable to the conduct of the business or operations of the System on the Closing Date and for the period thereafter.

            2.5.2. The Purchase Price shall be increased by an amount equal to (a) 98% of the face amount of all cable service customer Accounts Receivable that are outstanding 30 days or less from the first day of the period to which any outstanding bill relates, and (b) 90% of the face amount of all cable service customer Accounts Receivable that are outstanding more than 30 but fewer than 61 days from the first day of the period to which any outstanding bill relates.

            2.5.3. RESERVED.

            2.5.4. The Purchase Price shall be increased by an amount equal to 100% of the face amount of all payments and sums deposited or advanced by Seller to a landlord, utility, governmental agency or any other party as a security deposit or in exchange for initiation of a service and which will inure to the benefit of Buyer.

            2.5.5. The Purchase Price shall be reduced by an amount equal to (a) any customer advance payments (i.e., customer payments received by Seller prior to the Closing but relating to service to be provided by Buyer after the Closing) and deposits (including any interest owing thereon), (b) except as set forth in Section 2.5.4, above, any other advance payments (e.g., advertising payments received by Seller prior to the Closing but relating to service to be provided by Buyer after the Closing), and (c) the product of $2,291 and the number, if any, by which 3,710 exceeds the actual number of Subscribers in Systems. Notwithstanding, if the System loses fifty (50) or more subscribers in the thirty (30) days prior to Closing due to a Force Majeure Event, Seller may delay Closing up to thirty (30) days to engage in attempts to remediate the event(s) or circumstance(s) that resulted in the loss. For purposes of this Section 2.5.5, "FORCE MAJEURE EVENT" shall be defined to mean fire, earthquake, flood, labor disputes, utility curtailments, power failures, explosions, civil disturbances, hurricanes, tropical storms, tornadoes, and other similar events that are outside of the control of Seller.

            2.5.6. At least ten (10) business days prior to the Closing, Seller will deliver to Buyer a report with respect to the System (the "PRELIMINARY REPORT"), showing in detail the preliminary determination of the adjustments referred to in this Section 2.5, calculated in accordance with such Section as of the Closing Date (or as of any other date(s) agreed to by the parties) together with any documents substantiating the determination of the adjustments to the Purchase Price proposed in the Preliminary Report. The Preliminary Report will include a schedule setting forth advance payments and deposits made to or by Seller, as well as Accounts Receivable information relating to the System (showing sums due and their respective aging as of the Closing Date). The parties shall negotiate in good faith to resolve any dispute and to reach an agreement prior to the Closing Date on such estimated adjustments as of the Closing Date or thereafter in accordance with Section 2.5.7 below. The adjustment shown in the Preliminary Report, as adjusted by agreement of the parties, will be reflected as an adjustment to the Purchase Price payable at the Closing.

            2.5.7. Within ninety (90) days after the Closing Date, Buyer shall deliver to Seller a report with respect to the Systems (the "FINAL REPORT"), showing in detail the final determination of any adjustments which were not calculated as of the Closing Date and containing any corrections to the Preliminary Report, together with any documents substantiating the final calculation of the adjustments proposed in the Final Report. If Seller shall conclude that the Final Report does not accurately reflect the adjustments and prorations to be made to the Purchase Price in accordance with this Section 2.5, Seller shall, within thirty (30) days after its receipt of the Final Report, provide to Buyer its written statement of any discrepancies believed to exist. Buyer and Seller shall use good faith efforts to jointly resolve the discrepancies within fifteen (15) days of Buyer's receipt of Seller's written statement of discrepancies, which resolution, if achieved, shall be binding upon all parties to this Agreement and not subject to dispute or judicial review. If Buyer and Seller cannot resolve the discrepancies to their mutual satisfaction within such 15-day period, Buyer and Seller shall, within the following ten (10) days, jointly designate Deloitte & Touche LLP's Seattle office ("Deloitte") to review the Final Report together with Seller's discrepancy statement and any other relevant documents. Deloitte shall report its conclusions as to adjustments pursuant to this Section 2.5 which shall be conclusive on all parties to this Agreement and not subject to dispute or judicial review. If, after adjustment as appropriate with respect to the amount of the aforesaid adjustments paid or credited at the Closing, Buyer or Seller is determined to owe an amount to the other, the appropriate party shall pay such amount thereof to the other, within three days after receipt of such determination. The cost of retaining such independent public accounting firm shall be split equally between Buyer and Seller.

      2.6. ASSUMPTION OF LIABILITIES AND OBLIGATIONS. As of the Closing Date, Buyer shall assume and pay, discharge and perform the following (collectively, the "ASSUMED LIABILITIES"): (a) all obligations and liabilities of Seller under the Franchises and the Contracts related to the period after the Closing; (b) all obligations and liabilities of Seller to all customers and advertisers of the System for any advance payments or deposits for which Buyer shall have received a credit pursuant to the adjustments under Section 2.5; (c) all obligations and liabilities arising out of events occurring on or after the Closing Date related to the Assets or Buyer's conduct of the business or operations of the System; and (d) the obligations and liabilities listed on Schedule 2.6. All other obligations and liabilities of Seller shall remain and be the obligations and liabilities solely of Seller.

Thursday, March 3, 2011

New Substantive Material Tomorrow!

In lieu of posting material today, I want to take time to ask you, my followers, what you'd like to see.

Your options include:
A.) Contracts
B.) Civil Procedure
C.) Torts
D.) Legal Writing (no real notes here, maybe just some advice?)
E.) Property
F.) Criminal Law (no new notes, unlike the other classes, crimlaw is only 1 semester long)

Let me know in the comments below :D

Wednesday, March 2, 2011

Contracts: Breach

Jacob & Youngs v. Kent:
Court of Appeals of New York
230 N.Y. 239 (1921)
Issue: Was the use of a different type of piping a substantial deviation, resulting in breach?
Rule: Breach
Application: The evidence suggests that the omission of the prescribed brand of pipe was neither fraudulent nor willful.
-It was the result of the oversight and inattention of the plaintiffs subcontractor
-Reading pipe is distinguished from Cohoes pipe and other brands only by the name of the manufacturer stamped upon it at intervals of between 6-7 feet.
-Even defendant's architect failed to notice the defect when he first inspected the pipe
-An omission, both trivial and innocent, will sometimes be atoned for by allowance of the resulting damage, and will not always be the breach of a condition to be followed by a forfeiture
-This does not mean that there is a general license to install whatever, in the builders judgment, may be regarded as "just as good"
-Must weigh the purpose to be served, the desire to be gratified, the excuse for deviation from the letter, the cruelty of enforced adherence.
-In the circumstances of this case, the measure of the allowance is not the cost of replacement, which would be great, but the difference in value, which would either be nominal or nothing.
-The rule that gives a remedy in cases of substantial performance with compensation for defects of trivial or inappreciable importance, has been developed by the courts as an instrument of justice.
Conclusion: Yes, but since it was a small deviation, and the cost to fix it would be great, can only recover the difference between the two pipes

-Plaintiff build a country residence for the defendant at a cost of $77,000, and is suing for the balance of $3,483, remaining unpaid.
-June 1914: The work of construction ceased, defendant begins to occupy the building.
-March 1915: Defendant complains of the plumbing, discovering that some of the pipe, instead of made in Reading, was the product over other factories.
-The contract provided that the piping was to be from the Reading manufacturer
-Defendant directed the plaintiff to do the work anew.
-Obedience with this order the demolition at great expense of substantial parts of the structure
-Plaintiff left the work as it was, and asked for a certificate that the final payment was due.

Procedural History:
-Trial Court: Excluded evidence that the brands were the same quality. Directed verdict for the defendant
-Appellate Division: Reversed

-The failure to provide the correct pipes was either intentional or due to gross negligence.
-The pipe was only inspected once, and not any time afterwards
-The plaintiff agreed that all of the pipe was to be manufactured by Reading
-Only about 2/5th of the pipe used was by Reading
-If it was a small mistake, he may have been able to recover the contract price. Here only 1,000 out of 2,500 feet of pipe laid were of the right manufacturer.
-Defendant doesn't need a reason for requesting the pipe and had a right to receive the correct pipe

Tuesday, March 1, 2011

Civil Procedure: Federal Question Jurisdiction

Louisville & Nashville R.R. Co. v. Mottley:
Supreme Court of the United States
211 U.S. 149 (1908)
Issue: Was there federal jurisdiction
Rule: Federal Question Jurisdiction
Application: Two questions posed by the demurrer of the bill
-Neither of these questions need consideration, because the court below was without jurisdiction
-It is the duty of this court to see to it that the jurisdiction of the circuit court, which is defined and limited by statute, is not exceeded.
-There was no diversity of citizenship, and it is not and cannot be suggested that there was any ground of jurisdiction, except that the case was a "suit… arising under the constitution or laws of the United States."
-A suit arises under the constitution and laws of the united states only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that constitution
-It is not enough that the plaintiff alleges some anticipated defense to his cause of action, and asserts that the defense is invalidated by some provision of the constitution of the united states
Conclusion: No
-Both plaintiff and defendant are residents of Kentucky
-Plaintiffs (Husband and wife) brought suit to seek enforcement of their free lifetime passes for the railroad after being in a train wreck, due to the railroads negligence.
-1871-1907: Plaintiffs received their free passes.
-January 1, 1907: Railroad revoked passes, due to act of congress passed June 29, 1906, forbidding the giving of free passes or free transportation.
-The bill alleges
  1. The act of congress does not prohibit the giving of passes under the circumstances of this case
  2. If the law is to be construed as prohibiting such passes, it is in conflict with the 5th amendment of the constitution, because it deprives the plaintiffs of their property without due process of law.

-Railroads have a more sympathetic ear? Get precedent to use?