MODEL ANSWER - QUESTION I - FEBRUARY 2000

I will advise Partisan that she does not have a strong chance of either stopping the picketing or obtaining damages for lost business. The teachers' have a first amendment, free speech right to picket. As the Vermont Supreme Court held in State v. McHugh, peaceful picketing is protected speech. Unless the speech falls into some category that is recognized as not permissible (e.g. obscene, "fighting words", etc), it will be protected. There is no evidence that the picketers speech was obscene or otherwise impermissible and Partisan will not be able to obtain an injunction to stop the picketing.

To prevail in a suit against the picketers and obtain damages for lost business Partisan would have to overcome the picketers' defense that they were exercising their free speech rights. Although Partisan is a private individual and not a government entity she could not obtain a judgment through the courts that would abridge the picketers' free speech.

Partisan is likewise unlikely to be successful in a claim against the newspaper for damage to her reputation and libel. The newspaper, like the picketers, enjoys constitutional protection under the first amendment. The paper cannot be made to pay damages for its speech so long as the speech does not violate recognized exceptions (e.g. obscene). The statements published were apparently true and that will serve as a complete defense. Even if the wording of the headline is not an exact quote of what Partisan said, she would not be likely to succeed. In order to prevail in a libel action based on the inaccurate phrasing of the headline Partisan would have to prove the statement was made with knowledge that it is false or with reckless disregard of whether or not it was false. This was the "absence of malice" standard created by the United States Supreme Court in New York Times v. Sullivan. Partisan will not be able to meet this standard.

As for Partisan's desire to be reinstated to the regional planning commission, I would advise her that she is unlikely to prevail. The statute is clear that representatives serve at the pleasure of the legislative body, in this case the town select board. In order to insist on reinstatement Partisan would have to challenge the statute. She could attempt to do so by claiming the statute is unconstitutional in that it fails to afford her procedural due process.

Due process would require that Partisan enjoy some procedural protections prior to being removed from the commission. The exact procedure due would depend on the importance of the liberty or property interest at stake. If the interest were important enough she might be entitled to a full range of procedure including notice, hearing, and even counsel. However, she would first have to show that due process protections apply. In order for her to be entitled to additional due process prior to her removal she would have to show that she had a liberty or property interest within the scope of the Fourteenth Amendment. The Vermont Supreme Court considered a similar situation in Brennan v. Town of Colchester. In Brennan the Court considered the claim of planning commission members that they had been removed without the benefit of due process. The Court ruled that the plaintiffs had no entitlement to their positions and thus no protected liberty or property interest. Partisan's challenge to the statute will similarly fail based on her lack of entitlement to her position. None of the additional facts (her ongoing dispute with commission members about the bypass, her comments at the public hearing and the fact that the select board chair's wife is a teacher at the local elementary school) will change the analysis. Partisan will not be reinstated.

MODEL ANSWER - QUESTION II - FEBRUARY 2000

1. Arguments for Administering Theresa's Estate as Testate

Theresa's estate should be administered as testate if she had testamentary capacity, properly executed a will, and that will has not been revoked.
A. Testamentary Capacity

A person eighteen years of age or order, and of sound mind, has the testamentary capacity to execute a will if, at the time of making of the will, she knows the natural objects of her bounty, knows the approximate value of her property, and understands how the will disposes of her property. The capacity necessary to validly execute a will is not as great as that required to form a valid contract. Theresa's testamentary capacity is presumed; the burden falls on those seeking the challenge the will to prove otherwise.

Given this standard, there is no evidence that Theresa lacked the necessary capacity. In particular, although the will uses confusing language regarding her children, there is no evidence that she did not know she had a long-estranged husband and children, that she did not know what property she owned, or that she did not understand the distribution of property effected by the will.
B. Valid Execution

In order to validly execute a will, the testator must sign the will, or acknowledge her signature, in the presence of three credible and disinterested witnesses who themselves must attest and subscribe the will in the presence of the testator and the presence of each other.

Fran's signing for Theresa: Another person may sign the will for the testator at the testator's express direction, and in the testator's presence. In this case, Fran signed the will on Theresa's behalf, in Theresa's presence, and at Theresa's express direction. Accordingly, Fran's signature is as valid as if Theresa had signed the will herself.

Acknowledgment before witnesses: Although Theresa did not actually sign the will in front of the other witnesses, she did acknowledge her signature (or Fran's signature on her behalf) in front of three credible witnesses. Theresa's acknowledgment of the signature is as valid as if Theresa had actually signed the will in front of the witnesses.

Three credible witnesses: The three witnesses were all apparently credible. Although one must be eighteen years old to execute a will, one need not necessarily be eighteen years old to qualify as a credible witness, as long as one is competent at the time of attestation. Accordingly, Steve's age does not invalidate his attestation. Disinterested witnesses: Although Fran was named executor in the will, there is no evidence that she was a beneficiary of the will. Assuming she was not a beneficiary, she was disinterested, and the fact that she was named as executor does not undermine the integrity of the execution.

Attestation of witnesses in presence of each other: The three witnesses all attested and subscribed the will in the presence of Theresa and the presence of each other. The law only requires that the three witnesses be together in such a way that they can see one another sign, whether or not they actually look and see each other sign. For that reason. Steve's failure to actually see his father sign his name to the will does not invalidate the will.
C. No Revocation

There are two ways to revoke a valid will. First, a testator can properly execute a new will revoking the prior will. Second, a testator can burn, tear, cancel, or obliterate the prior will with the intention of revoking it, or expressly direct some other person to burn, tear, cancel or obliterate the will in her presence.

New will: In this case, Theresa did not revoke her original will be executing a new, valid will revoking the original will. The second will was never signed by the testator in conformity with the execution requirements set forth above.

Placement in recycling: In order to effectively revoke a will, a testator must physically mark or destroy the will in some way. Although Theresa's original will was placed in the recycling bin, there is not evidence that it was physically torn or marked in any way. For that reason, the will was not effectively revoked.

2. Arguments for Intestate Administration

The arguments for administering Theresa's estate as intestate would apply the same legal rules set forth in response to question #1. The various potential challenges to the original execution of the will, identified and analyzed above, would likely be ineffective, as would the argument that the will has been revoked.

3. Distribution of Theresa's Estate

A. Testate administration

If Theresa's will is valid, then her estate will be distributed in accordance with her expressed wishes, with the following caveats and explanations: Forced share: Notwithstanding their longtime estrangement, Theresa and Hank are still legally married. Accordingly, Hand has the option of electing against the will and taking a surviving spouse's share of Theresa's estate: not less than 1/3 of Theresa's real and personal property at the time of her death. The balance of Theresa's estate will be distributed according to the terms of her will.

Penciled changes: Theresa added the penciled changes to her will before it was actually executed. (The execution occurred when Theresa acknowledged her signature to three witnesses who attested and subscribed the will in her presence and in the presence of each other." Accordingly, the provisions reflected in those changes are effective, and the estate should be distributed accordingly.

Arguably omitted children: The will's reference to "our" children is ambiguous. However, a will will not be interpreted to exclude one or more of the testator's children unless it clearly reflects an intention to exclude that child or those children. For this reason, Theresa's provision for "our children" will be interpreted to apply to all of her children.
B. Intestate administration

If the estate were administered as intestate, Hank would still be entitled to his espousal share of one third of the real and personal property. The balance of the estate would be divided equally among Theresa's four children.
1. What, if any, immediate steps can be taken to deal with the suspension, which the Board ordered would occur during the holiday period?

[3 V.S.A. §815 states that either the agency or the reviewing court can issue a stay pending judicial review. In this case, the reviewing court would be the Supreme Court, because no express provision governs, id., and therefore a request for a stay should be filed with both the Board and the Supreme Court.]

2. What are the procedures for challenging the Board's findings?

[3 V.S.A. §815 states that the appeal in a contested case is to the Supreme Court unless another court is expressly provided by law. An appeal is commenced by filing a notice of appeal with the Board, per V.R.A.P. 13.]

3. What, if any, issues can Sam raise, and what are his chances of success?

Procedural irregularities: ten days notice is probably sufficient under the statute requiring reasonable notice. However, the notice does not appear to have included a reference to the regulation allegedly violated. Exclusion of Fred violated the Open Meeting Law, and an argument could be made per 1 V.S.A. §312(a) that the ruling is void. Also – hearsay is permitted if of the sort reasonably relied upon but the hearsay used in this case may not be of that sort.

New evidence: §815(b) states that before the date set for the court hearing, can make an application for leave to present additional evidence, and if the court finds the evidence is material and there were good reasons to fail to present it in proceedings before the agency, the court may order that additional evidence be taken before the agency, and the agency may modify its findings and decision.

Validity of rule: The failure to file the final rule with the Secretary of State is fatal to the operation of the rule. The amendment after the hearing, since it did not cause the published summary to become misleading or inadequate, is not. 3 V.S.A. §846.

MODEL ANSWER - QUESTION III - FEBRUARY 2000

1. In the event that Paul, as anticipated, does testify at trial, he will be subject to an attack upon his character for truthfulness, as may be any witness who testifies. This may take the form of reputation for untruthfulness. Therefore, the witnesses located by Sam may testify that Paul is known in his hometown as a liar. (Once we have attached Paul's character for truthfulness, but not before, Paul's attorney may respond with the evidence of his truthful character. V.R.E. 608(a).

2. The Vermont Rules of Evidence, unlike the Federal Rules of Evidence, do not permit the use of opinion evidence to establish a witness's character for truthfulness or untruthfulness. Therefore, this witness will not be permitted to testify to her opinion of Paul's character as a liar. V.R.E. 608(a).

3. Paul's false statement on a job application constitutes a specific instance of conduct, which we would like to use to attack Paul's credibility. V.R.E. 608(b) permits us to inquire about the incident on cross-examination of Paul (or of any witnesses he may call concerning his character for truthfulness. However, we may not present extrinsic evidence of the incident and, therefore, will not be able to call the college representative or introduce the job application, even if Paul denies the incident.

4. A prior conviction involving falsification may be used to impeach the credibility of a testifying witness, including, as here, a party to the case, if it is not more than fifty years old. If the conviction is for a crime involving untruthfulness or falsification, it may be used regardless of whether it is a felony or a misdemeanor, unless its probative value is substantially outweighed by the danger of unfair prejudice. The conviction here is for a misdemeanor, within fifteen years, for a crime involving falsification, and the prejudicial effect is unlikely to be found to substantially outweigh its prejudicial effect. It is therefore likely useable to impeach Paul. The proper method of proving the conviction is first to ask the witness about the conviction. Unlike the case with specific instances of conduct, if the witness denies the existence of the conviction (but only then), extrinsic evidence of the conviction, such as the prosecutor's testimony, is permitted. V.R.E. 609.

5. A prior conviction not involving falsification may be used to impeach a testifying witness only if it is in a felony, and the probative value substantially outweighs the prejudicial effect (the reverse of the balancing test for crimes involving falsification). In this case, the felony is for an enhanced DUI, which bears little, if any, probative value concerning lack of truthfulness. The judge is unlikely to find that the probative value of this conviction substantially outweighs its prejudicial effect, and the confiction is not likely to be useable. V.R.E. 609.
6. We would like to introduce Paul's out-of-court statement for the truth of the matter stated, i.e., that the fall did not, in fact, "hurt a bit." As such, the statement would normally be considered hearsay, but V.R.E. 801(d)(2) excludes from the definition of hearsay statements of a party, offered against that party (admissions by party-opponents). The statement also conceivably could fall within several exceptions to the hearsay rule, such as excited utterance, or a statement against interest, but these exceptions contain prerequisites that may not be met here. A statement against interest requires hat the witness be unavailable to testify, and Paul is expected to testify; an excited utterance requires that the statement have been made while under the stress of excitement caused by the event, and it is not clear from the problem when the statement was made.) Reliance upon the party-opponent rule is by far the simplest method of obtaining admission of this statement.

7. Evidence that a party was insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. Evidence of the liability policy would be admissible for other purposes, such as to prove ownership or control of the property. If the dealership does not contest ownership or control, evidence of the liability policy could be excluded. Since the evidence could be damaging to your client, you should seek to exclude this evidence. V.R.E. 411.

8. Subsequent remedial measures are not admissible to prove negligence, culpable conduct, a need for a warning, or similar issues. Such evidence may be offered to prove ownership or control, or feasibility of precautionary measures, but only if controverted. Again, since this evidence would be damaging to your client, you should take steps to see that it is excluded. V.R.E. 407.

MODEL ANSWER - QUESTION IV - FEBRUARY 2000

The first issue raised by John relates to the neighbor who has been using approximately an acre of the land that John intends to purchase from his father. The facts given would indicate that the neighbor has acquired the property through adverse possession. Adverse possession is accomplished through open, notorious, hostile and continuous possession of the property for the statutory period. Brown v. Whitcomb, 150 Vt. 106, 109 (1988). In Vermont, the statutory period is 15 years. See 12 V.S.A. § 501. It would appear the neighbor has met each of the requirements for adverse possession. The father did not do anything beyond verbal protestations for the last seventeen years. Verbal protestations, without action, to reassert control or dominion over the disputed land does not serve to interrupt the adverse possessor's interest in the property, but only confirms that the occupation is hostile. Brown v. Whitcomb, supra at 110. It is unlikely that John will be able to stop the neighbor form using the land since it would appear that the neighbor has acquired the one-acre parcel. If John and the neighbor are unable to agree on the dimensions of the affected one acre John can bring a declaratory judgment action to have the actual boundaries determined.

The second issue raised by John relates to the mortgage that he brought with him. Although the mortgage was paid off, no discharge was ever received nor recorded and the mortgagee has been dead for at least five years. Under these facts it is unlikely that the executor or administrator of the mortgagee, if one was every appointed, is still serving. When it appears that a mortgage is undischarged and the mortgagee is deceased, the owners of the real estate may make written application to the probate court of the district court within which such real estate is situated for the appointment of an administrator of the estate of such deceased mortgagee to discharge such mortgage. 27 V.S.A. § 465. The probate court is empowered to appoint such an administrator of the deceased mortgagee if it is satisfied that the conditions of the mortgage have been complied with and is further satisfied that there is no person within the State having authority to discharge the mortgage. 27 V.S.A. § 465. It therefore will be necessary to make a written application to the probate court for the district in which the real estate is located and obtain the appointment of an administrator of the mortgagee's estate who then will have power to discharge the mortgage.

The third issue raised by John involves alternative forms of ownership. The three forms which should be described to John are as follows:

(A) Tenants by the Entirety. This is a form of ownership that can exist only between a husband and wife. It provides for rights of survivorship between the two owners. If John and his wife were to own the property as tenants by the entirety and he were to die, she would automatically become the sole owner of the property without the property passing through probate. One of the principal advantages of holding property as tenants by the entirety is that a creditor of just one of the parties cannot reach the property, see Rose v. Morrell, 128 Vt. 110 (1969), except in very limited circumstances. See 15 V.S.A. § 67.

(B) Joint Tenants. This form of ownership of property can exist between any two or more individuals. Unlike tenants by the entirety it is not required that there be a marital relationship between the owners. The principal advantage to joint tenancy is that there is a right of survivorship between the co-owners. If John were to die and he owned the property as joint tenants with his son and his wife they would become co-owners. If he owned it with just his son and John died then his son would automatically become the sole owner of the property. Once again it is not necessary for the property to pass through probate. Property held in joint tenancy however, is not immune to the claims of creditors of one of the joint tenants. In order to create a joint tenancy between co-owners of land it is necessary to overcome the presumption that what is being created is a tenancy in common by indicating that the land was conveyed to them as joint tenants with the right of survivorship or the use of similar language.

(B) Tenants in Common. Under this form of ownership of property there is no right of survivorship and each person who is an owner has a right to give, devise or bequeath his interest in the property to someone who is a non-owner. If John and his son were to own the property as tenants in common and John were to die, the property would not go to his son unless that was specified in John's Will. If John were to name his wife as the party to receive the property in his Will upon his death, the wife would succeed to his interest after the property had passed through probate. A variety of combinations of ownership are possible. For example, John, his wife and his son could own the property as tenants in common or joint tenants. John will have to give you more information with regard to such things as whether he wants his wife to have the use of the property for her life, the importance to him of avoiding probate of the property, whether his son is financially responsible, whether or not there is any likelihood that his son will be involved in a divorce at any point in the future, and whether the son can be trusted to be co-owner. Without more information from John and a better understanding of what is important to him it is impossible to identify the single best form of ownership.

The lack of witnesses to the grantor's signature on the thirty year old deed to John's father does not render the title unmarketable. Since the deed is more than fifteen years old the lack of witnesses is cured. 27 V.S.A. § 348.

While there are a variety of issues that would need to be addressed in connection with the sale, one of the primary ones is the necessity to obtain a subdivision permit. A subdivision permit or deferral of permit is required if a parcel of less than ten acres in area is created by the transfer whether that parcel was sold or retained by the seller. In this case, a subdivision permit or deferral of permit will be required for both parcels since the parcel retained by the seller will be less than ten acres and the parcel conveyed will be less than ten acres. The subdivision permit or deferral of permit may be obtained from the appropriate regional office of the Agency of Natural Resources prior to the transfer. From the facts given, there would not appear to be any basis upon which to conclude that the property would be exempt from the subdivision regulations. An Act 250 Disclosure Statement and a determination of compliance with or exemption from Act 250 would also be necessary. In addition there may be local issues with respect to minimum lot size that would need to be reviewed.

MODEL ANSWER - QUESTION V - FEBRUARY 2000 1. How does the Uniform Commercial Code apply to Mr. Post's transactions with the car dealership? Explain what other laws apply.

Article 2 of the Uniform Commercial Code (UCC) applies to this transaction because it involves a transaction in goods. 9A V.S.A. § 2-102. "Goods" are defined to include anything that is movable at the time of identification to the contract, which would include the car in this case. § 2-105(1).

Contracts for sale include a number of warranties under the UCC. These may include:

* Warranty of title. The seller generally warrants that the title being conveyed is good. § 2-312(a).

* Warranty against infringement. The seller also generally warrants that the goods will be delivered free of any encumbrance or security interest. § 2-312(1)(b).

* Any express warranties made by the seller. Express warranties can be created by any affirmation of fact or promise made by the seller that relates to the goods and becomes part of the basis of the bargain. § 2-313.

* Implied warrant of merchantability. This warranty is implied in any contract in which the seller is a merchant (defined in § 2-104 as a dealer in goods of the kind being sold). To be merchantable, the goods must be fit for the ordinary purpose for which they are generally used. § 2-314.

* Implied warrant of fitness for a particular purpose. This warranty may apply in cases where the seller, at the time of contracting, has reason to know a particular purpose for which the goods are required and that buyer is relying on the seller's skill or judgment to furnish suitable goods. § 2-315.

In general, these warranties can be modified or excluded by the seller under certain circumstances. However, in cases involving the sale of new or unused consumer goods or services, the UCC provides that any attempted modifications or exclusions are unenforceable. § 2-316(5). "Consumer" is defined as including any person who purchases goods for his or her personal use. See 9 V.S.A. § 2451a(a).

Under the UCC, the seller is obligated to deliver conforming goods to the buyer. § 2-301, § 2-503. Goods are "conforming" when they are in accordance with the obligations under the contract. § 2-106(2). Where goods are non-conforming, the buyer has several options: he can reject them, accept them, or (depending on the nature of the goods) accept part of them and reject the rest. § 2-601.

If the buyer wants to reject the goods because of their nonconformity, he must do so within a reasonable time of their delivery, and must seasonably notify the seller of the rejection. § 2-602(1). See also Chaffin v. Bitinksy, 126 Vt. 218, 227 A.2d 296 (1967); Hislop v. Duff, 146 Vt. 310, 502 A.2d 357 (1967).

Acceptance of goods occurs when the buyer has had a reasonable opportunity to inspect the goods, and either fails to make an effective rejection, signifies that the goods are conforming, or signifies that he will take the goods in spite of their non-conformity. § 2-606(1). If the buyer accepts the goods, he cannot later reject them, nor can he later revoke his acceptance for non-conformity unless he accepted the goods on the reasonable assumption that the non-conformity would be seasonably cured. § 2-607(2).

A buyer may revoke his acceptance of non-conforming goods under § 2-608 of the UCC if the non-conformity substantially impairs the value of the goods to him and if he accepted the goods:

* on the reasonable assumption that the non-conformity would be cured, and it has not been seasonably cured; or

* without discovery of the non-conformity if the acceptance was reasonably induced either by the difficulty of its discovery before the acceptance occurred, or by the seller's assurances.

Revocation must occur within reasonable time of the buyer's discovery of the problem and before any substantial change in the condition of the goods has occurred. It is not effective until the buyer notifies the seller of the revocation, and can be accomplished only by returning the non-conforming goods. § 2-608(2); Costa v. Volkswagen of America, 150 Vt. 213 (1988).

In this case, Post took possession in January from the dealership of what he later discovered to be "non-conforming goods" - a car with a pervasive moldy smell. He can argue several things under the UCC: that he rejected the car, that he accepted the car but later revoked that acceptance, and/or that the dealership breached one or more of the applicable warranties.

Post's rejection argument is pretty weak, since he had the car (at least on and off) for about six months. Under the UCC, a buyer only has a "reasonable opportunity" to inspect the goods before he rejects them due to non-conformity to the contract. Six months will probably be deemed much more than a reasonable opportunity. Instead, Post will probably be deemed to have accepted the car.

Post should then argue that his actions constituted revocation of his acceptance. This argument has a better chance of winning. The pervasive odor arguably "substantially impairs" its value to him, and he can argue that he accepted the car only because the odor was not present at the time he picked it up, and thus was impossible to discover before he accepted it. He could argue in the alternative that he accepted the car on the reasonable assumption that the dealership would be able to fix the smell, which they attempted to do on several occasions. Finally, he will argue that once he understood that the non-conformity could not be "seasonably cured" - demonstrated by the dealership's repeated unsuccessful attempts to eliminate the odor - he promptly "returned" the car to the dealership by refusing to pick it up after the most recent repair attempt.

Other applicable laws. Vermont also has a so-called "lemon law," the New Motor Vehicle Arbitration Act (NMVAA), found at 9 V.S.A. §§ 4170-4181. This law provides that car manufacturers are obliged to ensure that new cars sold in Vermont conform to the manufacturers' express warranties. If a consumer reports a non-conformity to a manufacturer or its authorized dealer, they must fix the car. Finally, the Act provides that where the non-conformity substantially impairs the use, value or safety of the car, and the manufacturer or dealer have been unable to fix the problem after a reasonable number of attempts, the consumer has the option of obtaining a replacement car or a refund. Three attempts to repair the same problem are considered to be a "reasonable number of attempts." 9 V.S.A. § 4172(g)(1).

2. What remedies does Mr. Post have?

UCC remedies. Under sections 2-711 and 2-712 of the UCC, where a buyer rightfully rejects or justifiably revokes acceptance of non-conforming goods, he may cancel the contract, recover the price paid, "cover" by buying the same type of goods elsewhere, and seek as damages the difference between the cost of the cover and the contract price together with incidental or consequential damages as defined in § 2-715. To the extent Post successfully argues either that he rejected the car or that he revoked his acceptance of it, he may seek those damages in an action against the dealership.

The UCC also provides that where a buyer has accepted non-conforming goods and has given notification of a breach to the seller as required in § 2-607 (requiring notification of the breach to the seller within a reasonable time), he may recover as damages for the non-conformity the loss resulting from the seller's breach as determined "in any reasonable manner." § 2-714(1). Here, under the facts as presented it appears that Post accepted the car before he learned of the non-conformity, and that he also notified the dealership of the problem with the car as early as February. He should therefore commence an action for breach of the warranties that flowed with the contract to buy the car. That action must be commenced within four years of his discovery of the breach. § 2-725(1).

Under the facts presented, there is no evidence that there are problems with the car's title or encumbrances, nor are there any facts showing an express warranty by the dealership as to the car. There are also no facts supporting the existence of an implied warranty of fitness for a particular purpose. Thus, Post's best argument is that the dealership breached the implied warranty of merchantability. This is a strong argument, in that the pervasive odor will likely be found to render the car unfit for regular driving by Post, the purpose for which cars are generally used.

Under the UCC, the measure of damages for breach of warranty is the difference between the value of the goods accepted and the value they would have had had they been as warranted. Incidental and consequential damages may also be recovered. § 2-714(2), (3).

Lemon law remedies. Finally, Post also has the option of requesting arbitration under the New Motor Vehicle Arbitration Act and requesting a replacement for his car, or a refund of his purchase price, from the dealership. He would probably prevail in such an arbitration given the dealership's repeated attempts to unsuccessfully eliminate the odor.

3. Assuming the bank has a valid security interest in the vehicle, what remedies does the bank have?

Article 9 of the UCC applies to secured transactions. Under its provisions, the bank has a purchase money security interest in the car, defined in 9A V.S.A. § 9-107 to include a loan given to a debtor in order to purchase the particular property in which the debtor has granted the security interest.

When a creditor has a security interest in a piece of collateral, it has a choice of remedies under § 9-501(1) against a debtor in default under the accompanying security agreement: it may reduce its claims to judgment, foreclose on the collateral, or "otherwise enforce the security interest by any available judicial procedure." Thus, the bank could either commence an action against Post for the remaining money due on the loan it made to him, or it can foreclose on its interest in the car. This can include repossessing the car under § 9-503, which can be accomplished by self-help (that is, simply taking the car) if that can be done without breaching the peace, or through judicial action. The bank could then sell the car under § 9-504(1) and use the proceeds to satisfy the security agreement. Post must be given reasonable notice of the sale, and the method, manner, time, place and terms of the sale must be "commercially reasonable" to ensure full value is paid for the collateral. § 9-504(3). If the sale yields more than the value of the loan that was secured, the debtor will get the excess money; conversely, if the proceeds of the sale do not cover the loan, then the creditor may obtain a deficiency judgments against the debtor. § 9-502(2). If the repossessed goods are consumer goods as to which the debtor has paid 60% of the price, and the creditor has a purchase money security interest in the remainder, the creditor must tell them within 90 days.

Should the bank repossess and sell the car under §§ 9-503 and 9-504, it is unclear from the facts whether it will be able to satisfy the approximately $8,000 debt owed by Post given the condition of the car and the real possibility that it would not bring much, even under the fair commercial sale envisioned by the UCC. If it does not, of course it can seek a deficiency judgment against Post assuming it has given him notice of the sale. Adams v. B & D Developers, Inc., 144 Vt. 353 (1984). The bank may be better off simply seeking a judgment against Post for the unpaid portion of the loan, rather than repossessing and selling it and then suing for the deficiency judgment.

MODEL ANSWER - QUESTION VI - FEBRUARY 2000

1. Is this a proper claim for an equitable proceeding?

Plaintiff is seeking the return of funds mistakenly paid in the past. Therefore, the claim sounds in equity rather than purely a legal claim. Equity is a common law remedy imposed to seek redress where a legal remedy will not suffice. Equity will give relief to a good faith mistake that is promptly cured by the party at fault. The instant claim seeks the equitable remedy for unjust enrichment or quasi contract. In order to successfully make such a claim, the Plaintiff need prove that: (a) a benefit has been conferred upon Defendant by Plaintiff; (b) the Defendant realizes the nature of the benefit; and (c) acceptance or retention of the benefit by the Defendant. It is imposed upon defendants who may or may not have created the mistake upon which the action is brought. These defendants may or may not have acted wrongfully. While one does not typically impute bad faith or malevolence to a municipality which is allegedly acting on behalf of all of the residents, if the municipality contributed to the mistake which gave rise to the sought-for equitable relief, a municipality may be an appropriate defendant. See Brookside Memorials, Inc. v. Barre City, 167 Vt. 558, 559 (1997). ("If money is paid to a municipality which, in justice and in good conscience it ought to return, it is generally liable for repayment on an implied contract. 17 E. McQuillin, The Law of Municipal Corporations § 49.62 at 425 (3d ed. 1993)").

2. As the Plaintiff asserts the equitable jurisdiction of the Court how will the Court be composed and who will ultimately make the decision in this matter?

The Superior Court has jurisdiction to hear matters sounding in equity. Vt. CONST. Ch. II § 31. As the Court's equitable jurisdiction has been invoked, the Court is not required to have this matter decided by a jury even if both parties agree to be bound by the jury's verdict. See V.R.C.P. 39; Browen v. Hill, 133 Vt. 599 (1975). Indeed, the Court may decline to have a jury involved in this case at all. See Nugent v. Shambor, 138 Vt. 194 (1980). Furthermore, as this is an equitable proceeding, assistant judges should not take part in the decision. See 4 V.S.A. § 111; Soucy v. Soucy Motors, 143 Vt. 615 (1983). However, if no timely objection is rendered to the assistant judges' participation in the matter, their presence is not automatically grounds for reversal of the Court's decision. See Neel v. Sun, 156 Vt. 239 (1991). Therefore, the decision maker in this matter should be the presiding judge of the Washington Superior Court.

3. Discuss the probable equitable defenses to the claim and the remedies sought by the Plaintiff. Plaintiff's complaint sets forth a claim of unjust enrichment or quasi-contract. Numerous potential equitable defenses exist in this matter. MISTAKE OF LAW

In order to succeed in this claim, Plaintiff must allege that there exists a mistake of fact as to the nature of its business. The first line of defense would be to suggest that there is no mistake of fact, but rather a mistake of law. The issue would be framed that there is no mistake as to the rates or the nature of the Plaintiff's business, but rather a legal mistake of which law applied to Plaintiff's business. See Brookside Memorials, Inc. v. Barre City, 167 Vt. 558 (1997). NO MUTUAL MISTAKE

In order to succeed in the mistake of fact claim, Plaintiff would also need to show that this was a mutual mistake and not a mistake by Plaintiff alone. The defense would be that it was Plaintiff's obligation to inquire as to the appropriate rate and, therefore, the mistake is of the Plaintiff's unilateral making without fault or contribution by the City. Defendant would argue that it has no obligation to inquire as to the nature of Plaintiff's business and, therefore, it is a unilateral mistake on Plaintiff's behalf not to inquire of either the city or its competitors of the appropriate sewer rate. Equity does not afford relief to one who renders a unilateral mistake by failing to inquire as to its rights. See MacGowan v. Gaines, 127 Vt. 477 (1969). LACHES

Laches is an equitable defense against one who neglects or delays in bringing suit resulting in prejudice to the opposing party. Plaintiff failed to inquire for five years of the appropriate sewer rate. The City would be prejudiced by repaying assessments already accounted for and spent in prior tax years. Laches is an affirmative defense that must be specifically raised and pled. See Eddy v. Watson, 141 Vt. 577 (1982). CLEAN HANDS DOCTRINE

One who seeks equity must do equity. It could be argued that the Plaintiff's refusal to pay the current properly calculated sewer assessment, or any other City assessment, that the Plaintiff is not acting justly as to what is undisputedly owes the City in its current assessments. Therefore, Plaintiff is not coming to the Court with clean hands and must be denied the equity it seeks as it is not acting justly in relationship to the City. See Shell Oil Co. v. Jolley, 130 Vt. 482 (1972). INSUFFICIENT PLEADINGS

In order to invoke the equitable power of the Court, the Plaintiff must set forth all essential facts with certainty so as to allow for the Court's equitable remedy. Plaintiff's complaint could be held to be insufficiently definite as it lacks certainty in several areas, particularly as to the exact amount sought to be returned due to the overpayment. See Ferix v. Contos, 126 Vt. 477 (1967). PUNITIVE DAMAGES

Punitive damages are imposed to furnish and deter the actions of a defendant. Punitive damages are not an available remedy in an equitable proceeding. See Braune v. Town of Rochester, 126 Vt. 527 (1967). 4. If the City seeks to utilize the instant proceeding to either offset or enforce the unpaid January 15, 2000 quarterly Water and Sewer assessment, or other unpaid assessments owed to the City, what effect, if any, would this counter-claim by the City have upon the proceeding? The counter-claim would be a legal action not an equitable action. The fact that a counterclaim or other non-equitable relief is sought would not destroy the Court's equitable jurisdiction. Once the Court's equitable jurisdiction has been properly invoked, the Court retains jurisdiction over the entire matter. See Soucy v. Soucy Motors, 143 Vt. 615 (1983).







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