«New York State Bar Examination Essay Questions QUESTION 1 Bob and Ann were married in 2000 in State X. In 2001, the couple moved to New York, and Bob ...»
In this case, the facts indicate that in May 2008 Bob and Ann separated pursuant to a properly acknowledged and executed separation agreement, which they duly filed with the county clerk's office the following month. It should be noted that the separation clock begins to run when the parties actually separate and not when the agreement is filed. The agreement can be filed at any point prior to commencement of the divorce action. Bob filed for divorce in July 2009, and the parties have lived separate and apart since executing the separation agreement in May 2008. Therefore, the parties have satisfied the requirements for a conversion divorce. The fact that Bob and Ann engaged in sexual relations on an isolated occasion in January 2009 does not affect he separation agreement.
In order for a separation agreement to be rescinded the parties must cohabitate with the intent to reconcile. Here the facts indicate that Bob and Ann had no intent to reconcile and have had no contact since that single encounter. Accordingly, because the separation agreement remains enforceable and the parties have lived separate and apart for at least 1 year, and Bob will be successful in his action for divorce.
2. a. The issue is whether a partnership may use an incoming partner's capital contributions to satisfy a pre-existing obligation.
Under the Uniform Partnership Act, which New York has adopted, a partnership may use an incoming partner's capital contribution to satisfy pre-existing obligations, but the incoming partner will not be personally liable for those obligations.
In this case, Law Firm used Bob's capital contribution to partially satisfy a judgment obtained by Creditor in July 2009. Law Firm was authorized to use the funds under the UPA, and thus its actions were proper.
b. The issue is whether an incoming partner is personally liable for the preexisting debts of the partnership.
Under the Uniform Partnership Act, the general partners of a partnership are personally liable for the debts and obligations incurred by the partnership. However, the UPA places a limitation on the personal liability of incoming partners. An incoming partner is liable only to the extent of his capital contribution for prior debts of the partnership and cannot be held personally liable for any pre-existing obligations.
In this case, Bob joined the partnership in January 2010 and thereafter learned that in July 2009 Creditor had obtained a judgment against partnership for a malpractice claim. Because Creditor's malpractice judgment predated Bob's admittance as a partner to Law Firm, Bob will only be liable to the extent of his capital contribution. Creditor cannot hold Bob personally liable for the unsatisfied portion of the judgment.
3. The issue is whether Magic Circle properly attached and perfected its security interest in the bedroom set.
Under Article 9 of the UCC, a creditor may properly obtain a security interest in collateral as a means to secure a loan given to a debtor. To obtain a valid security interest in collateral, the creditor must attach the collateral and perfect its interest. Attachment secures the creditor's rights in the debtor's collateral while perfection gives notice of the creditor's rights in the collateral to other secured parties who may have claims to the same collateral.
Under Article 9 of the UCC, attachment requires (1) the creditor extending value to the debtor, (2) a record or security agreement memorializing the security interest, and (3) the debtor must have ownership rights in the collateral. The record or security agreement must be authenticated by the debtor and must reasonably identify the collateral (meaning a supergeneric description will not suffice).
In this case, Magic Circle has properly attached its security interest in Bob's furniture set by obtaining what is known as a purchase money security interest in consumer goods. Consumer goods refers to any collateral that will be used for family or home purposes. A purchase money security interest arises where the creditor assumes a security interest in collateral it actually sells the debtor or where the creditor obtains a security interest in the goods that debtor purchases with the loaned funds. Here, Magic Circle extended $6000 of credit to enable Bob to purchase the furniture set he now owns.
Magic Circle reserved a security interest in the furniture as collateral for the debt. Thus, Magic Circle has both extended value, and Bob has rights to the collateral. Moreover, Magic Circle and Bob entered into retail credit installment agreement, and assuming it was properly authenticated by Bob and identified the collateral, the agreement will be valid. As such, Magic Circle has properly attached the security interest in the furniture set.
However, Magic Circle must also perfect its security interest. Typically, perfection is obtained by the creditor filing a financing statement with the secretary of state that identifies the collateral and its security interest in it. Perfection may also be obtained by taking possession or control of the collateral providing the security interest.
However, where a secured party has retained a purchase money security interest in consumer goods, perfection is automatic upon attachment and no further steps are necessary.
In this case, because Magic Circle has properly attached its security interest in the furniture set, perfection was automatic. Therefore, Magic Circle a perfected security interest in the furniture set and may initiate foreclosure proceedings on account of Bob's default if it so chooses.
ANSWER TO QUESTION 2
1. The Issue is whether a witness to a will is permitted to testify as to a Testator's testamentary capacity at the time she executed the will Under New York's EPTL, in order for a will to be validly executed in New York the following requirements must be satisfied: (1) the will must be signed by adult testator; (2) the will must be in writing; (3) the testator's signature must appear at the end;
(4) the testator must publish that the document is her will; and (5) two witnesses must sign the will within 30 days from each other, and sign in the testator's presence. If these formal procedures are not satisfied, then New York will deem the will invalid and any challenges to the will be rendered obsolete because the will is per se invalid.
Once a will is declared valid, it may be challenged on the following grounds:(1) the testator was unduly influenced by a beneficiary at the time she executed a will and (2) the testator lacked testamentary capacity at the time she executed the will. A challenge by a party that a testator lacked testamentary capacity requires the court to consider the testator's age and state of mind at the time she executed the will. Thus, the court must weigh whether the testator was of sound mind, so that without prompting, she fully recognized the extent of her estate and the objects of her bounty. In making this assessment, the Court will be permitted to consider the testimony of witnesses to a will, regardless of whether they possess expert knowledge on the subject matter. Thus, while the general rule under New York law is that a lay witness is not permitted to testify as to facts, or to draw conclusions or give opinions based on her assessment of the facts, or to render her opinion in matters that are more appropriately reserved for expert testimony, these rules do not apply to a proceeding in the Surrogate's Court regarding the testamentary capacity of a testator, as given by a witness to the will who received nothing under it (that is, an uninterested witness). Here, the Surrogate will be permitted to consider the facts and circumstances surrounding the execution of the will, which includes the testimony of a disinterested witness who validly witnessed a will that is deemed by the court to be validly executed.
In the present case, Jack would be permitted to offer testimony as to the Testator Tina's mental capacity at the time she executed the will. The facts indicate that Tina read the will, published the will by "telling everyone that it was exactly what she wanted," signed the will, and then had both witnesses, Sara and Jack subscribe the will in her presence on the date it was executed. Therefore, the will was validly executed under New York law.
Here, the objections of Brother that Jack is not an expert witness, and thus unqualified to testify, will not succeed where the will has been deemed valid and Jack was not a beneficiary under the will.
Under New York law, a necessary witness is one who is required for proper execution of any will. Where a necessary witness is also a beneficiary under the will, that will still remains valid, but that bequest to the beneficiary will be rendered invalid unless there were at least two other witnesses to the will who received nothing under it (thus, New York requires at least 2 disinterested witnesses to any will). Here, Jack was a necessary witness who was not a beneficiary under the will. Accordingly, the will is valid and Jack will not be deemed an interested witness who may have any of his testimony challenged in the event a will beneficiary challenges the testator's capacity at the time she executed the will.
Furthermore, Jack would also not have been disqualified as an interested party from testifying under New York's dead man statute, because again, he was not an interested witness under the will. Under the Dead Man's Statute, an interested witness (that is, one who would seek to gain or lose something from the Court's ruling, or who would have any judgment later utilized against him in a proceeding by the deceased party's estate) would be prohibited to testify unless he satisfied an exception to that statute (such as where the decedent's death was by virtue of an accident involving a car, boat or plane, where the witness would be permitted to testify as to facts surrounding that incident; or where the estate opened the door by openly questioning the witness about any transactions or conversations had with the decedent; or where the estate fails to raise the Dead Man's Statute exception, and thereby waives it).
In the present matter, Court's ruling to permit Jack to testify was correctly made.
Here, as a witness to a validly executed will, who also does not qualify as an interested witness, will be permitted by the Surrogate to testify as to his opinion regarding the testator's state of mind, and Brother will see his challenge fail.
2. The issue is whether Tina's death has an impact on the foreclosure proceeding commenced by Lender and whether Lawyer's execution of the Stipulation will be rendered invalid because Tina's death terminated the agency Under New York law, the agency relationship arises where the principal permits another party (the agent) to bind the principal to contracts. An agent has 3 types of authority: (1) actual authority, which is either orally conferred or conferred in writing by the principal; (2) implied authority: which the law infers from the express authority given; and (3) apparent authority: where the principal, through words or conduct communicated to a 3rd party, creates the appearance of an agency relationship, and the 3rd party reasonably relies upon the agent's apparent authority.
Even with any of the authority above, however, an agency relationship will terminate upon the following events: (1) through an unilateral action by either the principal or agent terminating the agency (for instance, the agent resigning or the principal firing the agent); (2) bankruptcy of the principal, which terminates the agency by operation of law; (3) a mental infirmity or mental incapacity of the principal; and (4) death of either the agent or the principal. When any of these events occur, the agency relationship terminates by operation of law.
In the present case, Tina's interest in Blackacre was encumbered by a mortgage and note held by the Lender, and in June the Lender duly commenced a foreclosure proceeding against Tina by filing a motion for summary judgment (as a side note, under any CPLR 3212 motion, the Court must find that there are no material issues of fact to be litigated and that the Court can decide the motion as a matter of law; furthermore, any motion for summary judgment must be filed within 120 days following the filing of a note of issue, unless the Court decides to extend this period for "good cause shown.").
When the Lender had duly filed and served the summary judgment motion in July, Tina had died. Accordingly, any agency relationship between the lawyer and Tina accordingly terminated on that date as well, because Tina's death served to end the agency relationship. Thus, Lawyer's action to enter into a stipulation upon the return date of the Lender's summary judgment motion is invalid, because he no longer had the authority to do so.
However, Tina's death does not mean that the foreclosure action is now terminated. Instead, only the stipulation entered into by the lawyer is invalid, and only the agreement to pay the stipulated 250,000 will be deemed unenforceable.
Subsequently, the Lender is free to proceed with his foreclosure action against Tina's estate, but the stipulated figure of 250,000 is unenforceable and will not be recognized by a Court.
3. a. The issue is whether Jen can benefit under the anti-lapse statute and receive the bequest made by Tina to her predeceased mother As a general rule, when a beneficiary predeceases the testator, that beneficiary's bequest under the testator's will shall lapse back into the residuary. Where there is no residuary, or the residuary fails, then that bequest lapses. The exception to this rule under the New York EPTL is the anti-lapse statute. Here, any bequests by the testator to an issue or sibling will not lapse, but instead will be distributed to the issue of that predeceased beneficiary, if she had any. Friends of the testator who receive a bequest under the testator's will do not qualify under the anti-lapse statute.
In the present case, Ana was a named beneficiary under Tina's will, and was to receive a general bequest of 25,000. Ana predeceased Tina, and was survived by her issue, her only daughter Jen. Under the EPTL, however, Ana (and subsequently her daughter Jen) will not benefit under the anti-lapse rule, because she is a friend, and not an issue or sibling of Tina. Therefore, any bequest that was scheduled to go to Ana will not pass to her issue under the anti-lapse statute. Instead, that bequest will lapse back into Tina's estate, and go to the residuary legatee (here, Brother, who is discussed below).