studyfor

From the official site

Question 1
Jack, a Texas resident, executed a valid attested will in 1993, which appointed his brother, Bill, as the
independent executor of his will. Jack devised his entire estate, which consisted of more than $2,000,000, to Bill. Although Jack had married and divorced twice, there were no children born in wedlock or adopted during either marriage.

Jack died in 2005, at which time he was unmarried. While gathering Jack's personal belongings after
Jack's death, Bill discovered among them a life insurance policy on Jack's life in the amount of $50,000, which named Tim as the beneficiary and on which the premium was fully paid.

After Bill filed Jack's will for probate in 2006, Sue, as next friend of Tim, a minor born in 2000, filed a will contest alleging that Tim was the natural child of Jack. Sue alleged that Tim, as a pretermitted child, was entitled to inherit intestate all of Jack's estate, because at the time of Jack's death, Jack was unmarried and had no other children.

Evidence at the will contest trial established: (a) there had been a long standing relationship between
Jack and Sue even though Sue was married; (b) Jack had never mentioned this relationship to anyone, including Bill; (c) even though Jack's name did not appear on Tim's birth certificate as his father, genetic testing had established conclusively that Jack was Tim's father; and (d) Tim was the person named as the beneficiary in the life insurance policy Bill had found.

How should Jack's estate be distributed? Explain fully.

OUESTION 2

Fred executed a valid attested will, which named his brother Ken as independent executor. At the time of execution of his will, Fred was married to Wilma. No children were born or adopted of the marriage of Fred and Wilma. Fred had two sisters, Jackie and Ann. Fred devised his estate in his will as follows:

"I hereby devise a life estate in my estate, both real and personal, to my wife, Wilma, and subject to this life estate, I leave all the rest, residue and remainder of my estate, both real and personal, in equal shares to the children of my sisters, Jackie and Ann."

At the time Fred executed his will, Jackie had twin adult sons, Mike and Ike. Ann had one adult son,
Tom. Mike died in 2004 after a lengthy illness leaving one child, Sarah. Jackie adopted a baby daughter named Erika in 2005. Fred died in 2006, and Wilma died a few months later. They were both survived by the following individuals:

• Fred's sister, Jackie;
• Jackie's son, Ike;
• Jackie's adopted daughter, Erika;
• Jackie's granddaughter, Sarah;
• Fred's sister, Ann; and
• Ann's son, Tom.

Ken tiled Fred's will for probate in 2007.

1. Who is entitled to share in the remainder of Fred's estate? Explain fully.
2. How is Fred's estate to be distributed? Explain fully.

QUESTION 3

Brenda owned a home in Victoria County, Texas. In September 2007, Brenda entered into a written contract with Karl for the construction of a garage and workshop at her home for $50,000. The contract provided that Brenda would pay the entire $50,000 within ten (10) days after completion.

Also in September 2007, Karl and Sandy entered into a written subcontract for Sandy to furnish and install cabinets and perform the work needed to finish out the interior of Brenda's workshop for $1 0,000. The subcontract provided that $9,000 was to be paid to Sandy within ten (10) days after Sandy's work was completed and that the remaining $1 ,000 was to be withheld and paid to Sandy 35 days after the completion of the entire garage and workshop project. Sandy commenced the interior work on October 1,2007.

Thereafter, the following sequence of events occurred in 2007:
• On October 15, Sandy sent a statutory notice of the subcontract by certified mail to Brenda and
Karl. This notice correctly stated that under the subcontract between Karl and Sandy, a ten percent
(10%) retainage of $I,OOO was deferred until 35 days after the completion of the entire project.
• On October 30, Sandy completed his work on the cabinets and interior of the workshop.
• On November 5, Karl paid Sandy $7,000.
• On November 15, Sandy sent Brenda and Karl notice by certified mail that Karl owed Sandy
$2,000, which was past due, in addition to the $1,000 retainage as explained in the October 15 letter. This letter complied with all statutory requirements, including notice to Brenda that Brenda could be personally liable or her home could be subject to a lien for any balance due Sandy unless
Brenda withheld payment to Karl in an amount sufficient to pay the balance owed to Sandy or, if
Brenda failed to withhold the 10% statutory retainage, from the amount due under her contract
with Karl.

• On November 20, Karl completed the entire project. He assured Brenda that he would settle up
with Sandy, so, based on that assurance, Brenda paid Karl $49,500, withholding the last $500 "just
in case. 'l

Karl failed to pay Sandy any more money.

I. What actions should Brenda have taken to protect herself from claims by Sandy? Explain fully.
2. In December 2007, what claims against Brenda or her home, if any, is Sandy entitled to assert? Explain fully.
3. What should Sandy do in a timely manner to preserve any lien claims? Explain fully.

QUESTION 4

Greg owned in fee simple a tract of land of approximately 200 acres in Wharton County, Texas. He conveyed to the County a 60-foot-wide easement on which the County had constructed a public road. The road ran east and west across Greg's tract, bisecting the tract into the North Ranch and the South Ranch.
Greg sold the North Ranch to Ned and the South Ranch to Sarah and conveyed both in fee simple by separate warranty deeds, each of which described the parcel by metes and bounds and included "all rights and appurtenances thereto." The metes and bounds descriptions for the North and South Ranches described the parcels each as abutting the outer edges of the County road but did not include any part of the actual roadbed.

No mineral reservations were included in the warranty deeds. The deeds were properly recorded in the Wharton County real property records.

In March 2007, Ned executed an oil and gas lease with Ace Oil with a primary term of one year covering the North Ranch. The lease with Ace Oil contained precisely the same description as that in the deed Ned had received when he bought the land from Greg. Ace Oil's lease included a provision stating that it also covered "all land owned by Ned, if any, contiguous or adjacent to or adjoining the herein described tract."
In April 2007, Sarah executed an oil and gas lease with Jumbo Oil covering the South Ranch. The lease with Jumbo Oil contained precisely the same description as that in the deed Sarah had received when she bought the land from Greg. The Jumbo Oil lease stated that it was for a term oftwo years from April I , 2007 and as long thereafter as oil, gas or other minerals were produced. Under the Jumbo Oil lease, if production was not begun within one year of the date of the lease, Jumbo Oil could extend the lease for another year, without production, by payment of $2,000 as a delay rental.

Jumbo Oil drilled an oil well in January 2008, but its production was so poor that it was unclear whether the well would produce in paying quantities or whether Jumbo Oil should abandon it.

1. What rights, if any, do Ned, Sarah, and Ace Oil have in the land and minerals beneath the public roadbed? Explain fully
2. What is the standard by which it is determined whether Jumbo Oil's well is considered to
be producing in paying quantities? Explain fully.
3. What should Jumbo Oil do to preserve its rights under the lease? Explain fully.

OUESTION 5

In 2005, Kim, a 22-year-old resident of New Mexico, prepared and filed Articles of Incorporation with the Texas Secretary of State to form Abby Corp, a Texas business corporation. Kim was engaged in the business of raising thoroughbred racing horses in New Mexico and selling them in Texas. Her primary intent and purpose was to incorporate to avoid the risk of personal liability for debts and liabilities incurred in that business. Kim was the only incorporator signing the Articles of Incorporation, and she was the only director named in the Articles of incorporation. The Articles of Incorporation provided that shares of the stock would be limited to 1000 shares of non-par value stock.

After the Secretary of State issued a Certificate of Incorporation, Kim, without notice of the organizational meeting and without keeping minutes, purported to elect herself sole director as well as President and Secretary, and directed that the entire 1000 shares of stock be issued by the corporation to herself in return for $1000 cash, which Kim paid the corporation for the stock.
Kim then transferred to Maddy and Liz 10 shares each of the stock because of their business connections with others in the thoroughbred racehorse business. Kim assured both Liz and Maddy that they would have no liability for corporate obligations. Before transferring the shares to Liz and Maddy, Kim typed a "right of first refusal" on the face of the certificates, stating that neither Liz nor Maddy would sell any portion of the stock without first giving Kim the right to match the price offered by the prospective purchaser.

Kim, acting on behalf of Abby Corp, sold a racehorse to Dan. When the racehorse did not live up to
Dan's expectations, he filed suit for damages, alleging actual and constructive fraud against Abby Corp and Kim, as director and officer, and against Liz and Maddy as shareholders. Kim, in her capacity as director, sent the following e-mail to Liz and Maddy: "I hereby give you notice that 5 days from today I am holding a special meeting of the Board of Directors of Abby Corp. I hereby also give you notice that we have been sued by Dan over the horse I sold him." Liz and Maddy received the e-mail but did not attend the meeting. Kim, as sole director in attendance at the meeting and on behalf of the corporation adopted resolutions: (a) authorizing employment of counsel to defend Dan's suit, and (b) requiring the corporation to provide full indemnity for the sole director as to any claims asserted against her arising out of the sale of the racehorse.

In answering the following questions, please disregard any issue of "interested director."
l. Were all requirements met entitling Abby Corp to be legally incorporated? Explain fully.
2. Were the 1000 shares of stock properly issued, and was the right of first refusal typed on the certificates of the shares transferred to Liz and Maddy effective? Explain fully.
3. Was the resolution requiring the corporation to indemnify Kim as the sole director properly authorized? Explain fully.
4. What liability, if any, do Kim, Liz, and Maddy have to Dan for damages? Explain fully.

QUESTION 6

In 2003, three Texas attorneys, Nicole, Courtney, and Jen, orally agreed to open a law practice. They each contributed $10,000 for startup expenses and associated together to carry on the practice of law under the name of NCJ Law Firm ("NCJ") and to share any profits. Wishing to remain generally independent of each other, they signed an agreement: a) eliminating the duties of loyalty, care and good faith to each other and b) expressly stating that they were not agreeing to be responsible for any losses resulting from any errors or omissions of the other.Nicole, Jen and Courtney terminated NCJ and they properly formed a limited partnership called Nicole, Courtney, and Jen Law Firm Ltd. ("Ltd.") for the continuation ofthe law firm business, with Nicole as general partner and Courtney and Jen as limited partners. In the regular course of the limited partnership business, len, at the request of Nicole, purchased $5000 worth of office supplies from Ashley's Office Supplies on credit in the limited partnership name, signing the purchase order as "Jen, Limited Partner." When the debt was not paid, Ashley sued Nicole, Courtney, Jen and Ltd. for the indebtedness.

In 2005, Nicole, Courtney, and Jen terminated Ltd. and continued their law firm business as a registered limited liability partnership called NCJ Law Firm, LLP ("LLP"). They properly filed an application in duplicate, with the required fee, with the Secretary ofState as required by law and notified all existing clients of the change in name. Jen, while handling a case under Courtney's supervision for Courtney's client Wyatt, negligently missed a deadline resulting in a default judgment against Wyatt. Wyatt sued Nicole, Courtney, Jen and LLP for damages. [n answering the following questions, disregard any Issues relating to rules of professional responsibility.

I. In 2003, what type of business entity, if any, was formed and was the agreement regarding their duties and liability valid? Explain fully.
2. Which parties, if any, are liable to Ashley's for the office supplies purchased? Explain fully.
3. Which parties, if any, are liable for Wyatt's damages resulting from the default judgment?
Explain fully.


OUESTION 7

Jane took her car to DOD Auto Repair (DOD) for inspection because of an unusual noise she heard while driving. Ray, DOD's owner, inspected Jane's car and told her that the brakes and transmission were faulty and needed to be replaced. Ray told Jane he would repair her car using new parts and that all of DOD's parts and labor were guaranteed for one year. Based on Ray's assessment and remarks, Jane authorized DOD to do the work.

Unknown to Jane, Ray's business financial condition was perilous. DOD's mechanic looked at Jane's car and determined that her transmission needed repair, but not replacement, and that her brakes were old but did not need replacement. Ray nevertheless instructed the mechanic to replace both the brakes and the transmission with used, re-conditioned parts. The mechanic did as instructed and placed the original brakes in the trunk of Jane's car. Jane paid DOD's bill and picked up her car.
A week later, Jane was involved in a collision, and her car was severely damaged. Jane had the car towed to her local manufacturer's dealership, where she told the service manager that she believed her newly repaired brakes had failed, and she told him about the brake and transmission work that DOD had done. The service manager checked the brakes and told Jane that her brakes had failed because they were the wrong brakes for her car, had been poorly re-conditioned, and had been improperly installed. The service manager agreed with Jane that the brake failure had caused the collision. The service manager also told Jane that its inspection of her original brakes revealed that the original brakes had not needed replacement. At Jane's request, the service manager inspected the transmission and told Jane that it was a reconditioned one, not a new one.

When Jane confronted Ray, he denied that he promised Jane "new parts." Ray also said that he did not believe the brakes that DOD installed had caused the collision because his employees thoroughly road tested Jane's car, checked the brakes, and the brakes were working when the car left DOD's shop. Ray offered to reimburse Jane the labor for installing her brakes but otherwise declined to make any other payment on DOD's one-year guarantee.

Assume Jane is a consumer under Texas consumer laws.
1. What Texas consumer law claims, if any, can Jane assert against DOD, and what must she prove to maintain them? Explain fully.
2. Under Texas consumer laws, what damages, ifany, can Jane recover from DOD? Explain fully.

QUESTION 8

Tom, a mentally disabled 19-year-old who was incapable of caring for himself, lived with his parents, Mary and Joe, in Lubbock, Texas. Tom attended a school for students with special needs and had a part time job in a sheltered workshop.

Mary and Joe died simultaneously in an automobile accident. Their 1994 separate, valid wills left their respective estates, valued at $1.2 million, in equal shares to their three sons, Mark, Bill, and Tom. The wills also designated Tom's grandmother, Gran, as Tom's guardian pursuant to the Texas Probate Code.

Mark was a successful stockbroker and financial counselor in a Texas town about 300 miles distant from Lubbock. Tom's other brother, Bill, lived in Lubbock and worked as a physical education coach at Tom's school. Bill had previously worked at a local bank, where he had exhibited no talent for managing other people's money.
Gran was mentally alert but was, by the time of Mary and Joe's deaths, physically feeble and confined to her large and roomy house. Gran had no experience in managing financial affairs, but she had retained Steve, a local banker, to pay her bills and keep track of her finances. Steve had also been Mary and Joe's banker, but had not done a particularly good job of managing their investments.
After Mary and Joe died, Tom moved into a room at Bill's home and appeared to be very happy there.
Bill transported Tom to and from school and to his job at the sheltered workshop. Tom expressed a desire to continue living with Bill.

Mark volunteered to manage Tom's inheritance without charge. Bill was interested and willing to serve as guardian of both Tom's person and estate. Steve, attracted by the prospect of managing Tom's inheritance for a fee. urged Gran to assert her rights as the appointed guardian under Mary's and Joe's wills. Acting on Steve's urging, Gran expressed a desire to serve as guardian of both Tom's person and estate.

Gran. Mark. and Bill filed applications with the court to be appointed as Tom's guardian.

l. What threshold facts must each of the applicants prove in order to establish the necessity for a guardianship, and by what evidentiary standard must they prove them? Explain fully.
2. Is the court bound by the guardianship designated in the wills? Explain fully.
3. Who would the court be most likely to appoint as guardian of Tom's (a) person and (b) estate? Explain fully.

OUESTION 9

Stan owed Julia $425 for yard work. Stan gave Julia a check payable to Julia for $425 drawn on Local Bank in satisfaction of that debt. A thief stole the check out of Julia's purse, indorsed the check by signing Julia's name, and cashed it at Local Bank. Immediately after the check cleared, Stan closed his account at Local Bank.

Elroy Electronics owed Julia a rebate for $35 and mailed a check payable to Julia for $35 drawn on
Local Bank. The rebate check was mailed to the wrong address. An unknown person indorsed the rebate check by signing Julia's name and cashed it at Local Bank.

I. Does Julia have a claim against Local Bank for cashing Stan's check? Explain fully.
2. Does Julia have a claim against Stan to recover $425 based on the underlying yard work debt aside from the check? Explain fully.
3. Does Julia have a claim against Local Bank for cashing Elroy Electronics' check? Explain fully.
4. Does Julia have a claim against Elroy Electronics for her $35 rebate? Explain fully.

OUESTION 10

Francis, a Texas resident, operated an interior design business as a sole proprietorship. He entered into the following financial transactions:
o Francis had an open line of unsecured credit with Max Depot for office supplies that, on February 1, 2007, had an unpaid balance of$300.
o On February 1,2007, Francis borrowed $25,000 from Town Bank and gave Town Bank a security agreement covering all of his current and after acquired office equipment, supplies and accounts receivable.
o On February 5, 2007, Town Bank properly filed a financing statement with the Texas Secretary of
State perfecting its interest under the February I security agreement.
o On February 20, 2007, Francis bought an $800 laptop computer for his business on credit from Max Depot. Francis gave Max Depot a security agreement with the laptop as collateral to secure both the cost of the laptop and the existing $300 balance on the office supplies debt.
o On March 1,2007, Francis borrowed $600 from Lou's Loans properly to make a tax payment. He gave Lou's Loans a security agreement pledging the laptop computer and his currently owned and after acquired office furniture as collateral to secure the loan.
o On March I, 2007, Lou's Loans filed a financing statement with the Texas Secretary of State reflecting the terms of this March I security agreement.
o On March 5, 2007, Francis purchased a new desk for cash from Gary's Furniture.
o On March 9, 2007, Max Depot properly filed a financing statement reflecting the terms of the
February 20, 2007, security agreement it had with Francis to secure the cost of the laptop and the $300 debt.

Which creditor, if any, has the superior interest in the following items of Francis' property? Explain fully.
a. The laptop purchased from Max Depot;
b. The new desk purchased from Gary's furniture;
c. The office supplies purchased from Max Depot.

QUESTION 11

The Texas Department of Family and Protective Services (DFPS) filed a petition to terminate Robert and Sally's parental rights to their two minor children, ages 3 and 5. The case was tried before ajudge without a jury. At the trial, the court heard the following evidence:
• In investigating the living conditions at Robert and Sally's residence, it appeared that Sally often left the children in the care of numerous different men in a known drug trafficking neighborhood.
• When DFPS arrived at the residence, Sally answered the door, said she was not "the lady of the house," and left by the back door.
• DFPS entered the residence and found the two children alone in a room with a sharp knife on the floor near them.
• The younger child was eating from a box of raw brownie mix.
• DFPS also found on a tabletop, in the same room with the children, a razor blade and an unknown white residue, which was never identified.
• DFPS removed the children from the home and has unsuccessfully attempted to place them with other family members.
• At the time DFPS investigated, Robert was in jail on pending charges of sexual assault of an unrelated case or.
• Both Sally and Robert had prior convictions for possession of crack cocaine, with Sally just having completed serving a 24-month prison term.
• Robert was on parole for the last of those offenses, but no evidence was introduced to establish when Robert committed his prior offenses or whether he had ever served time for a drug offense.
• Robert testified at trial that he was not a drug user, but admitted that he had sold drugs.
Based on this evidence, the trial court issued an order terminating the parental rights ofboth Robert and Sally to their two children. Sally and Robert appealed, asserting that the evidence was legally insufficient to support the trial court's order and that DFPS failed to establish by the appropriate burden of proofthe statutory grounds to terminate their parental rights.
l. What is the standard of proof by which the appellate court will review the evidence?
Explain fully.
2. Based on the statutory factors enumerated in the Texas Family Code, was there sufficient evidence to support the trial court's termination of the parental rights of:
a. Sally? Explain fully.
b. Robert? Explain fully.

OUESTION 12

Donald and Judy, both Texas residents, married in 2000. They have one child of the marriage, Monica, born in 2002. Donald separated from Judy in 2006 and filed a petition for divorce in 2007. The contested issues in the divorce proceeding involve the amount of child support Donald will be required to pay Judy and the characterization of a certificate of deposit.

At the trial, Donald testified that he was currently employed by his girlfriend as the office manager of her law practice in Waco earning $20,000 per year. Judy offered credible evidence that office managers in the Waco area typically earn average annual salaries of$40,000 per year. At the time of the separation, Donald held a job paying $40,000 a year. Both Donald and Judy testified that Donald had previously held jobs earning an average of $75,000 per year in the information technology field. Donald testified that he had attempted to find employment in that field but that his lack of a college degree and the length of his time away from information technology made it difficult for him to secure a higher paying job. Donald admitted, however, that he had twenty years experience working with computer systems still widely in use in the United States.

With regard to the certificate of deposit, the testimony established that during the marriage Donald had wanted to start his own business but needed a loan. Judy offered $50,000 of her separate property funds to purchase a certificate of deposit. Judy purchased the certificate of deposit in both her and Donald's names and allowed Donald to use it for collateral to secure a $50,000 loan for the business. At trial, Judy testified that, although she never told Donald so, it was always her intention that, once the loan was repaid, she would cash in the certificate of deposit and again treat the proceeds as her separate property.

The trial court found that Donald's net monthly resources were $1,500 per month, and, based upon certain findings filed by the judge, the trial court ordered Donald to pay Judy $600 a month in child support.

The trial court further found that the purchase of the certificate of deposit constituted a gift to Donald of one half of the certificate of deposit.

Did the trial court error in:
l. Ordering Donald to pay Judy $600 per month in child support? Explain fully.
2. Characterizing the certificate of deposit as a gift of one-half to Donald. Explain fully.

Category: TX - Texas Bar Exam