bar exam ny essay question-- my answer, 'superior answer'
Here I present:
A) One of the 3023 NY State Bar Exam essay questions.
B) My answer to the question (I've never studied NY state law, this is the first Bar exam question I have ever attempted to answer). I took more than 36 minutes to answer the question (never been a law student, & before reading the 'superior' answer.
C) an example of an answer to A) that the NY Bar considers "superior". This answer was generated in no more than 36 minutes.
My answer to 1A, generally disagrees with the 'superior' answer; I conclude that the court should have sided with Sam, the 'superior' answer concludes it should have sided with Connie. My answer to 1B, generally agrees with the 'superior' answer, we both agree that Dale was wrong, and that the court made a mistake in siding with Dale. My answer to 2, agrees with the 'superior' answer, in that we both conclude that the property should now belong to both Brett and Steve.
NY State Bar Exam, July 2012 Essay Question 1
(tests knowledge of NY State Law)
http://www.nybarexam.org/ExamQuestions/JULY2012QA.PDF
Dale was the owner of Blackacre, a commercial building. Part of the building was leased to Sam, who operated an antiques store in the leased premises. On July 15, 2010, Connie visited Sam’s store and purchased an antique desk for $12,000. Connie paid for the desk in full, and told Sam that she would arrange to pick the desk up later that week. Sam moved the desk from the showroom to his storeroom in the leased premises, wrapped it and labeled it “Connie’s desk -- to be picked up at her convenience.”
That night a fire of unknown origin occurred, damaging the building and destroying the desk. Sam did not carry insurance on his inventory. Although Dale had insured the building with Fire Insurance Co., the insurance did not cover the contents of the leased portion of the building. When Connie arrived a few days later to pick up the desk, Sam told her that it was destroyed. He refused Connie’s request for a refund, advising Connie that he did not have any insurance to cover her desk and was not liable for its loss.
Connie thereafter commenced an action against Sam to recover the purchase price of the desk. Connie’s complaint alleged the above relevant facts. Sam moved to dismiss the complaint for failure to state a cause of action. The court (a) granted Sam’s motion.
Immediately following the fire, Dale had called Fire Insurance Co. and reported the fire. Art, the adjuster who was assigned by Fire Insurance Co. to the claim, inspected the property to assess the loss. After the inspection, Art and Dale negotiated a settlement of Dale’s claim. In exchange for a payment of $925,000, Dale duly executed a general release, releasing Fire Insurance Co. from “any and all claims for damages, known or unknown, arising out of the fire that occurred at Blackacre on July 15, 2010.”
When Dale later undertook repairs to Blackacre, he discovered that the damage was more extensive than had been realized and specifically included irreparable smoke damage to portions of the air conditioning system that would cost $50,000 to replace. While damage to the air conditioning system was known to both parties at the time the release was signed, neither party knew the extent of the damage, and Dale assumed it could be repaired at minimal cost by cleaning the ducts.
Dale commenced an action against Fire Insurance Co. to recover the cost to replace the air conditioning system. Fire Insurance Co. raised the release as an affirmative defense. Dale moved to strike the affirmative defense on the ground of mistake. The court (b) granted Dale’s motion. The action was thereafter settled.
Dale subsequently conveyed Blackacre “to my son, Brett, and my daughter, Debra, as joint tenants.” In August 2011, in a duly recorded deed, Debra conveyed her interest in Blackacre to her son, Steve. Debra died in December 2011.
Brett now claims that he is the sole owner of Blackacre, asserting that Debra’s deed to Steve was inadequate to sever the joint tenancy, and that he succeeds as sole survivor to the entire fee interest in Blackacre. Steve claims that he owns Blackacre as a tenant in common with Brett.
1. Were rulings (a) and (b) correct?
2. Who now owns Blackacre?
My answers:
1 Re Ruling A
1. Ruling (a) correct or incorrect, involves knowing if Connie's complaint included merely the relevant facts only, or the relevant facts and a 'cause of action' also. The fact that according to Connie's adversary Sam, Connie failed to state a 'cause of action', does not mean that a 'cause of action' was indeed omitted.
Perhaps NY state law requires declaration of a formal 'cause of action' that Connie failed to fulfill.
Alternatively, the law is not designed to punish persons who have the facts on their side, but are not sophisticated enough to include with their facts, a 'cause of action' (one suspects given the balances of powers and the conflicting regulations law to a certain extent stands with those whose facts are on their side but who fail in terms of some legal technicality).
To say that Sam should be forced to re-imburse Connie for the table, is like saying that if I allow someone to park his bike in my driveway, and then a lightning-bolt hits the bike and destroys it, I should be forced to reimburse the owner of the bike.
Sam's insurance did not cover the valuables in his shop. Sam would have had to pay extra in order to insure these valuables. In order for insurance to have covered Connie's table, Same would have had to pay the extra insurance fees, and Connie would have had to contribute something towards the insurance fees for the days that the table sat in Sam's shop. Yet Connie made no arrangement whereby in exchange for a fee, Sam would reimburse her in the event of the destruction of the table. Connie did not take out any insurance on her table when she bought it. So Connie justly bears the financial burden of the loss of the table, just as the kid who I allowed to park his bike in my driveway justly bears the financial loss of his bicycle.
If Sam had explicitly contractually agreed with Connie that he would be financially responsible for the table in the event that a fire destroyed the shop, then Sam should have to reimburse Connie for the table. If he did not so agree, he should not have to reimburse Connie for the table. We cannot assume the unusual and eccentric to constitute unwritten unspoken law taken for granted without being written out on paper and signed. Unless I signed a piece of paper whereby I took financial responsibility for the kid's bike that was parked in my driveway, it should be assumed that I did NOT take such responsibility.
The odds were against Connie insuring the table for the time it was in Sam's shop, being a profitable thing to do. That does not mean that the law is on Connie's side. The odds were against Connie not storing the table immediately at home, ending up backfiring on her. That does not mean the law is on her side.
1 Re 'Ruling B'
Ruling (b)'s correctness has to do with whether 'mistake' trumps contract. The contract specifically states, "known and unknown". Hence Dale agreed to excuse Fire Insurance Company from compensating him for unknown damages, a category that the smoke in the ac neatly fits into. Hence, 'mistake', does not trump contract. If people like Dale continue to win in the courts, the economy will suffer because contracts will not be trusted.
2 Who Owns Blackacre
The question is, whether the deed trumps the 'joint tenancy'. This would have to do with the terms of the 'joint tenancy', the terms of the 'deed', and NY state law regarding 'joint tenancy', 'deed', and the interaction thereof.
Common sense declares that given the absence of specific provisions to the joint tenancy declaring otherwise, Debra's son Steve should now own half of Blackacre.
Interpretation of the constitution itself has been based upon attempts to divine the mind of the writers of the constitution. Obviously Dale's intent was that Brett and Debra should split the ownership of Blackacre; hence, obviously, Debra should have the right to pass on her ownership to her son Steve.
There remains the possibility that Dale's intent was that the joint ownership should devolve to Brett alone, in the event of the demise of Debra. Given the absence of explicit declaration to such effect in Dale's conveyance of Blackacre to Brett and Debra, it is reasonable to assume that Dale's intent, was that Debra should be able to, in the event of her death, dispose of her half of the ownership as she she's fit. In this case (adopting rustic dialect), Brett is being a pig, trying to grab property bequeathed to his sister's half of the family for himself.
Normally speaking, if you give someone something, it is assumed that the person you give the thing to, can do with it what he will, UNLESS an explicit condition of the gift, is that joint ownership must not be abrogated, or that upon the death of the recipient, the donated thing must be given to a designated individual.
Society's ability to function productively, is impaired when, regarding unspoken-of elements in contracts, the abnormal and eccentric is assumed to be the unspoken unwritten law, whilst the normal and usual is not.
I am confident that a case can be made along these lines building upon conflicts between various laws and between various powers; if not, new precedent replacing the old can be established.
'Superior' Answer provided by nybarexam.org
("sample candidate answers that received scores superior to the average scale score awarded for the relevant essay"):
ANSWER TO QUESTION 1
1. a. The issue is who bears the risk of loss in a sale of goods contract between a merchant and a buyer.
Under the CPLR, a failure to state a cause of action is an affirmative defense that can be raised in a pre-answer motion to dismiss, in an answer, or through trial. The court grants a failure to state a cause of action when, assuming all facts in the complaint are true, there is no possibility of relief under the relevant law. All inferences are made in favor of the non-moving party.
Recovery of purchase price for a sale of goods contract will be governed by Article 2 of the UCC. Under Article 2, the elements of recovery for purchase price where the goods were destroyed are to show that there was an enforceable contract and that the other party bore the risk of loss. For there to be an enforceable contract, there must be a valid offer, acceptance, consideration, and for the sale of goods $500 and over, there must be a writing signed by the party charged with breach that states the quantity of goods. An exception to the requirement of a signed writing is if the goods have been accepted and paid for. There also need to be no defenses to formation for a contract to be enforceable. In a contract for a sale of goods between a merchant (one who regularly sells goods) and a buyer, the merchant bears the risk of loss until possession changes hands. If the seller was not a merchant, the risk of loss passes when the goods are tendered, meaning that the goods were made available for the buyer to pick up.
The party who bears the risk of loss will have to return any payment tendered on the contract and may also be liable for consequential damages, damages that were foreseeable at the time the contract was made, though seller's cannot recover consequential damages until Article 2.
Where goods are identified as belonging to the buyer are then destroyed through no fault of either party, a seller who bears the risk of loss will be excused from further performance by impracticability. However, this does not change that the seller, if a merchant before possession is transferred, bears the risk of loss and will have to refund any amount paid.
Here, Connie and Sam have an enforceable contract between there was offer and acceptance for the antique desk at $12,000. Although there is no signed writing, the contract is enforceable because it was paid in full and the goods were accepted by Connie because she had a chance to inspect the desk. There do not appear to be any defenses to formation.
The fire was an unforeseeable act of god that destroyed the antiques desk, though no fault of either party. Because Sam had identified the desk as "Connie's desk," he will be excused from further performance under the contract, meaning that he does not have to provide Connie with a new desk. However, this does not change Sam's obligation to return the purchase price. Because Sam bore the risk of loss, there is a valid cause of action for return of the payment price.
Sam is a merchant because he owns and antiques store and regularly sells antiques. Sam bore the risk of loss because he had not transferred possession of the desk to Connie. Even though the desk was to be picked up at Connie's convenience, Sam bore the risk of loss until she did so because he was a merchant.
Therefore, the court incorrectly granted Sam's motion.
b. Court granted Dale's motion to strike the affirmative defense on the ground of mistake.
The issue is whether a mistake of cost will prevent an affirmative defense of release from being effective.
Under the New York CPLR, release is an affirmative defense that can be raised in the pre-answer motion to dismiss or in the answer. The plaintiff then has the opportunity to reply. A valid release occurs when there is an enforceable settlement between the parties. A valid release prevents means that the party who settled has given up their claim against the other settling party, who is now free from that claim, and also cannot seek or be liable for contribution. Settlements are governed by contract law principles and are enforceable if there was an offer, acceptance, consideration, and no defenses to formation. One defense to formation is the ground of mistake.
Under New York law, mistake is a valid defense to formation of a contract where both parties make a mistake on a material part of the contract or where one party makes a mistake and the other party has reason to know of the mistake. A mistake as to value of the claim is generally not considered material. Therefore, where both parties underestimated (or overestimated) the cost or value of a promise, there is nonetheless an enforceable contract.
Here, Art and Dale negotiated a settlement of Dale's claim. Because it was duly executed, there was valid offer and acceptance. There was also valid consideration of the $925,000. Dale raised the ground of mistake because he had assumed that the air conditioning system could be repaired for minimal cost, when it will actually cost $50,000 to replace. Dale does not have a valid claim for mistake for several reasons. Although both parties did not know the extent of damage, courts generally do not consider that mutual mistake as to cost to be material. If Dale says that it was not a mistake as to cost but actually as to damage, the mistake was nonetheless not material because $50,000 is a relatively small amount of money relative to the overall size of the settlement ($925,000) and is unlikely to be considered material.
Because neither party new of the extent of the damage, this is not a situation where Dale's mistake will void the contract because it was known by the other party. It was either a mutual mistake that was not material as addressed above or a unilateral mistake that was not known to the other party.
Finally, the language in the release that Dale was releases Fire Insurance Co from damages "any and all claims of damages," "known or unknown" suggest that this was a risk that the parties understood that they were taking. Rather than a mistake, it was part of the benefit of the bargain to Fire Insurance Co.
Therefore, the court incorrectly granted Dale's motion because he did not have a valid claim of mistake.
2. The issue is whether a unilateral conveyance by one party of a joint tenancy severs the joint tenancy.
Under New York law, a joint tenancy is created when two or more parties are given a right to jointly possess property. There are four required unities for a creation of joint tenancy to be effective. The parties must take their interest at the same time, they must take their interest from the same title (though New York, unlike common law, does not mandate straw conveyers for a party to retain a share), they must have the same interest -- meaning that each is a joint tenant with right of survivorship, and each must have the right to possess the whole. Under a joint tenancy, there is a right to survivorship, meaning that if one joint tenant dies, the remaining joint tenants continue as joint tenants or, if there is only one joint tenant left, take the whole property. Therefore, an interest in a joint tenancy is not devisable or descendible, meaning that it cannot pass by will or intestate.
A joint tenancy can be severed by mutual conveyance to another party, petitioning the court for a forced sale or partition in kind, or when one party duly conveys their interest to another party. When one party duly conveys their interest to another party, that party takes as a tenant in common. If there are multiple joint tenants remaining, the joint tenancy will continue for those parties, with the new owner as a tenant in common. If there were only two original parties, the new owner and the original party that did not convey their interest will be tenants in common. Under the tenancy in common, there are no survivorship rights and the interests are freely alienable (transferable), devisable (can pass by will), and descendible (can pass intestate). Each tenant in common has the right to use and possess the whole.
Here, Dale conveyed Blackacre to Brett and Debra "as joint tenants." Because he specifically used the language of "joint tenants," he created a joint tenancy even though he did not mention the right of survivorship. Brett and Debra took as joint tenants because they took their interest at the same time (at the time of the conveyance) and in the same deed. Additionally, they each had the right to use and possess the whole and had equal interests as joint tenants. Thus, the four required entities are present.
When Debra conveyed here interest in Blackacre to Steve, she severed the joint tenancy. The joint tenancy was severed because Debra conveyed her interest during her lifetime, four months before her death in December 2011. Debra will have severed the joint tenancy even if Brett was unaware of the transfer and even if Steve did not give consideration for the transfer because it was a unilateral act of conveyance by a joint tenant.
Because there is only one remaining original joint tenant, the tenancy will be converted to a tenancy in common, with equal interest to Steve and Brett. Therefore, Brett and Steve own Blackacre as tenants in common.
A) One of the 3023 NY State Bar Exam essay questions.
B) My answer to the question (I've never studied NY state law, this is the first Bar exam question I have ever attempted to answer). I took more than 36 minutes to answer the question (never been a law student, & before reading the 'superior' answer.
C) an example of an answer to A) that the NY Bar considers "superior". This answer was generated in no more than 36 minutes.
My answer to 1A, generally disagrees with the 'superior' answer; I conclude that the court should have sided with Sam, the 'superior' answer concludes it should have sided with Connie. My answer to 1B, generally agrees with the 'superior' answer, we both agree that Dale was wrong, and that the court made a mistake in siding with Dale. My answer to 2, agrees with the 'superior' answer, in that we both conclude that the property should now belong to both Brett and Steve.
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NY State Bar Exam, July 2012 Essay Question 1
(tests knowledge of NY State Law)
http://www.nybarexam.org/ExamQuestions/JULY2012QA.PDF
Dale was the owner of Blackacre, a commercial building. Part of the building was leased to Sam, who operated an antiques store in the leased premises. On July 15, 2010, Connie visited Sam’s store and purchased an antique desk for $12,000. Connie paid for the desk in full, and told Sam that she would arrange to pick the desk up later that week. Sam moved the desk from the showroom to his storeroom in the leased premises, wrapped it and labeled it “Connie’s desk -- to be picked up at her convenience.”
That night a fire of unknown origin occurred, damaging the building and destroying the desk. Sam did not carry insurance on his inventory. Although Dale had insured the building with Fire Insurance Co., the insurance did not cover the contents of the leased portion of the building. When Connie arrived a few days later to pick up the desk, Sam told her that it was destroyed. He refused Connie’s request for a refund, advising Connie that he did not have any insurance to cover her desk and was not liable for its loss.
Connie thereafter commenced an action against Sam to recover the purchase price of the desk. Connie’s complaint alleged the above relevant facts. Sam moved to dismiss the complaint for failure to state a cause of action. The court (a) granted Sam’s motion.
Immediately following the fire, Dale had called Fire Insurance Co. and reported the fire. Art, the adjuster who was assigned by Fire Insurance Co. to the claim, inspected the property to assess the loss. After the inspection, Art and Dale negotiated a settlement of Dale’s claim. In exchange for a payment of $925,000, Dale duly executed a general release, releasing Fire Insurance Co. from “any and all claims for damages, known or unknown, arising out of the fire that occurred at Blackacre on July 15, 2010.”
When Dale later undertook repairs to Blackacre, he discovered that the damage was more extensive than had been realized and specifically included irreparable smoke damage to portions of the air conditioning system that would cost $50,000 to replace. While damage to the air conditioning system was known to both parties at the time the release was signed, neither party knew the extent of the damage, and Dale assumed it could be repaired at minimal cost by cleaning the ducts.
Dale commenced an action against Fire Insurance Co. to recover the cost to replace the air conditioning system. Fire Insurance Co. raised the release as an affirmative defense. Dale moved to strike the affirmative defense on the ground of mistake. The court (b) granted Dale’s motion. The action was thereafter settled.
Dale subsequently conveyed Blackacre “to my son, Brett, and my daughter, Debra, as joint tenants.” In August 2011, in a duly recorded deed, Debra conveyed her interest in Blackacre to her son, Steve. Debra died in December 2011.
Brett now claims that he is the sole owner of Blackacre, asserting that Debra’s deed to Steve was inadequate to sever the joint tenancy, and that he succeeds as sole survivor to the entire fee interest in Blackacre. Steve claims that he owns Blackacre as a tenant in common with Brett.
1. Were rulings (a) and (b) correct?
2. Who now owns Blackacre?
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My answers:
1 Re Ruling A
1. Ruling (a) correct or incorrect, involves knowing if Connie's complaint included merely the relevant facts only, or the relevant facts and a 'cause of action' also. The fact that according to Connie's adversary Sam, Connie failed to state a 'cause of action', does not mean that a 'cause of action' was indeed omitted.
Perhaps NY state law requires declaration of a formal 'cause of action' that Connie failed to fulfill.
Alternatively, the law is not designed to punish persons who have the facts on their side, but are not sophisticated enough to include with their facts, a 'cause of action' (one suspects given the balances of powers and the conflicting regulations law to a certain extent stands with those whose facts are on their side but who fail in terms of some legal technicality).
To say that Sam should be forced to re-imburse Connie for the table, is like saying that if I allow someone to park his bike in my driveway, and then a lightning-bolt hits the bike and destroys it, I should be forced to reimburse the owner of the bike.
Sam's insurance did not cover the valuables in his shop. Sam would have had to pay extra in order to insure these valuables. In order for insurance to have covered Connie's table, Same would have had to pay the extra insurance fees, and Connie would have had to contribute something towards the insurance fees for the days that the table sat in Sam's shop. Yet Connie made no arrangement whereby in exchange for a fee, Sam would reimburse her in the event of the destruction of the table. Connie did not take out any insurance on her table when she bought it. So Connie justly bears the financial burden of the loss of the table, just as the kid who I allowed to park his bike in my driveway justly bears the financial loss of his bicycle.
If Sam had explicitly contractually agreed with Connie that he would be financially responsible for the table in the event that a fire destroyed the shop, then Sam should have to reimburse Connie for the table. If he did not so agree, he should not have to reimburse Connie for the table. We cannot assume the unusual and eccentric to constitute unwritten unspoken law taken for granted without being written out on paper and signed. Unless I signed a piece of paper whereby I took financial responsibility for the kid's bike that was parked in my driveway, it should be assumed that I did NOT take such responsibility.
The odds were against Connie insuring the table for the time it was in Sam's shop, being a profitable thing to do. That does not mean that the law is on Connie's side. The odds were against Connie not storing the table immediately at home, ending up backfiring on her. That does not mean the law is on her side.
1 Re 'Ruling B'
Ruling (b)'s correctness has to do with whether 'mistake' trumps contract. The contract specifically states, "known and unknown". Hence Dale agreed to excuse Fire Insurance Company from compensating him for unknown damages, a category that the smoke in the ac neatly fits into. Hence, 'mistake', does not trump contract. If people like Dale continue to win in the courts, the economy will suffer because contracts will not be trusted.
2 Who Owns Blackacre
The question is, whether the deed trumps the 'joint tenancy'. This would have to do with the terms of the 'joint tenancy', the terms of the 'deed', and NY state law regarding 'joint tenancy', 'deed', and the interaction thereof.
Common sense declares that given the absence of specific provisions to the joint tenancy declaring otherwise, Debra's son Steve should now own half of Blackacre.
Interpretation of the constitution itself has been based upon attempts to divine the mind of the writers of the constitution. Obviously Dale's intent was that Brett and Debra should split the ownership of Blackacre; hence, obviously, Debra should have the right to pass on her ownership to her son Steve.
There remains the possibility that Dale's intent was that the joint ownership should devolve to Brett alone, in the event of the demise of Debra. Given the absence of explicit declaration to such effect in Dale's conveyance of Blackacre to Brett and Debra, it is reasonable to assume that Dale's intent, was that Debra should be able to, in the event of her death, dispose of her half of the ownership as she she's fit. In this case (adopting rustic dialect), Brett is being a pig, trying to grab property bequeathed to his sister's half of the family for himself.
Normally speaking, if you give someone something, it is assumed that the person you give the thing to, can do with it what he will, UNLESS an explicit condition of the gift, is that joint ownership must not be abrogated, or that upon the death of the recipient, the donated thing must be given to a designated individual.
Society's ability to function productively, is impaired when, regarding unspoken-of elements in contracts, the abnormal and eccentric is assumed to be the unspoken unwritten law, whilst the normal and usual is not.
I am confident that a case can be made along these lines building upon conflicts between various laws and between various powers; if not, new precedent replacing the old can be established.
-----------------
'Superior' Answer provided by nybarexam.org
("sample candidate answers that received scores superior to the average scale score awarded for the relevant essay"):
ANSWER TO QUESTION 1
1. a. The issue is who bears the risk of loss in a sale of goods contract between a merchant and a buyer.
Under the CPLR, a failure to state a cause of action is an affirmative defense that can be raised in a pre-answer motion to dismiss, in an answer, or through trial. The court grants a failure to state a cause of action when, assuming all facts in the complaint are true, there is no possibility of relief under the relevant law. All inferences are made in favor of the non-moving party.
Recovery of purchase price for a sale of goods contract will be governed by Article 2 of the UCC. Under Article 2, the elements of recovery for purchase price where the goods were destroyed are to show that there was an enforceable contract and that the other party bore the risk of loss. For there to be an enforceable contract, there must be a valid offer, acceptance, consideration, and for the sale of goods $500 and over, there must be a writing signed by the party charged with breach that states the quantity of goods. An exception to the requirement of a signed writing is if the goods have been accepted and paid for. There also need to be no defenses to formation for a contract to be enforceable. In a contract for a sale of goods between a merchant (one who regularly sells goods) and a buyer, the merchant bears the risk of loss until possession changes hands. If the seller was not a merchant, the risk of loss passes when the goods are tendered, meaning that the goods were made available for the buyer to pick up.
The party who bears the risk of loss will have to return any payment tendered on the contract and may also be liable for consequential damages, damages that were foreseeable at the time the contract was made, though seller's cannot recover consequential damages until Article 2.
Where goods are identified as belonging to the buyer are then destroyed through no fault of either party, a seller who bears the risk of loss will be excused from further performance by impracticability. However, this does not change that the seller, if a merchant before possession is transferred, bears the risk of loss and will have to refund any amount paid.
Here, Connie and Sam have an enforceable contract between there was offer and acceptance for the antique desk at $12,000. Although there is no signed writing, the contract is enforceable because it was paid in full and the goods were accepted by Connie because she had a chance to inspect the desk. There do not appear to be any defenses to formation.
The fire was an unforeseeable act of god that destroyed the antiques desk, though no fault of either party. Because Sam had identified the desk as "Connie's desk," he will be excused from further performance under the contract, meaning that he does not have to provide Connie with a new desk. However, this does not change Sam's obligation to return the purchase price. Because Sam bore the risk of loss, there is a valid cause of action for return of the payment price.
Sam is a merchant because he owns and antiques store and regularly sells antiques. Sam bore the risk of loss because he had not transferred possession of the desk to Connie. Even though the desk was to be picked up at Connie's convenience, Sam bore the risk of loss until she did so because he was a merchant.
Therefore, the court incorrectly granted Sam's motion.
b. Court granted Dale's motion to strike the affirmative defense on the ground of mistake.
The issue is whether a mistake of cost will prevent an affirmative defense of release from being effective.
Under the New York CPLR, release is an affirmative defense that can be raised in the pre-answer motion to dismiss or in the answer. The plaintiff then has the opportunity to reply. A valid release occurs when there is an enforceable settlement between the parties. A valid release prevents means that the party who settled has given up their claim against the other settling party, who is now free from that claim, and also cannot seek or be liable for contribution. Settlements are governed by contract law principles and are enforceable if there was an offer, acceptance, consideration, and no defenses to formation. One defense to formation is the ground of mistake.
Under New York law, mistake is a valid defense to formation of a contract where both parties make a mistake on a material part of the contract or where one party makes a mistake and the other party has reason to know of the mistake. A mistake as to value of the claim is generally not considered material. Therefore, where both parties underestimated (or overestimated) the cost or value of a promise, there is nonetheless an enforceable contract.
Here, Art and Dale negotiated a settlement of Dale's claim. Because it was duly executed, there was valid offer and acceptance. There was also valid consideration of the $925,000. Dale raised the ground of mistake because he had assumed that the air conditioning system could be repaired for minimal cost, when it will actually cost $50,000 to replace. Dale does not have a valid claim for mistake for several reasons. Although both parties did not know the extent of damage, courts generally do not consider that mutual mistake as to cost to be material. If Dale says that it was not a mistake as to cost but actually as to damage, the mistake was nonetheless not material because $50,000 is a relatively small amount of money relative to the overall size of the settlement ($925,000) and is unlikely to be considered material.
Because neither party new of the extent of the damage, this is not a situation where Dale's mistake will void the contract because it was known by the other party. It was either a mutual mistake that was not material as addressed above or a unilateral mistake that was not known to the other party.
Finally, the language in the release that Dale was releases Fire Insurance Co from damages "any and all claims of damages," "known or unknown" suggest that this was a risk that the parties understood that they were taking. Rather than a mistake, it was part of the benefit of the bargain to Fire Insurance Co.
Therefore, the court incorrectly granted Dale's motion because he did not have a valid claim of mistake.
2. The issue is whether a unilateral conveyance by one party of a joint tenancy severs the joint tenancy.
Under New York law, a joint tenancy is created when two or more parties are given a right to jointly possess property. There are four required unities for a creation of joint tenancy to be effective. The parties must take their interest at the same time, they must take their interest from the same title (though New York, unlike common law, does not mandate straw conveyers for a party to retain a share), they must have the same interest -- meaning that each is a joint tenant with right of survivorship, and each must have the right to possess the whole. Under a joint tenancy, there is a right to survivorship, meaning that if one joint tenant dies, the remaining joint tenants continue as joint tenants or, if there is only one joint tenant left, take the whole property. Therefore, an interest in a joint tenancy is not devisable or descendible, meaning that it cannot pass by will or intestate.
A joint tenancy can be severed by mutual conveyance to another party, petitioning the court for a forced sale or partition in kind, or when one party duly conveys their interest to another party. When one party duly conveys their interest to another party, that party takes as a tenant in common. If there are multiple joint tenants remaining, the joint tenancy will continue for those parties, with the new owner as a tenant in common. If there were only two original parties, the new owner and the original party that did not convey their interest will be tenants in common. Under the tenancy in common, there are no survivorship rights and the interests are freely alienable (transferable), devisable (can pass by will), and descendible (can pass intestate). Each tenant in common has the right to use and possess the whole.
Here, Dale conveyed Blackacre to Brett and Debra "as joint tenants." Because he specifically used the language of "joint tenants," he created a joint tenancy even though he did not mention the right of survivorship. Brett and Debra took as joint tenants because they took their interest at the same time (at the time of the conveyance) and in the same deed. Additionally, they each had the right to use and possess the whole and had equal interests as joint tenants. Thus, the four required entities are present.
When Debra conveyed here interest in Blackacre to Steve, she severed the joint tenancy. The joint tenancy was severed because Debra conveyed her interest during her lifetime, four months before her death in December 2011. Debra will have severed the joint tenancy even if Brett was unaware of the transfer and even if Steve did not give consideration for the transfer because it was a unilateral act of conveyance by a joint tenant.
Because there is only one remaining original joint tenant, the tenancy will be converted to a tenancy in common, with equal interest to Steve and Brett. Therefore, Brett and Steve own Blackacre as tenants in common.
posted by David Virgil at 3:32 AM
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