Date of Examination: May 4, 1996
Professor J.R. PIELEMEIER
CODE OF CONDUCT
Violations of the Code of Conduct include: (1) unauthorized conversation among students concerning the examination; (2) giving, receiving, or soliciting unauthorized aid; (3) using materials which are not specifically permitted by the written examination instruction; (4) exceeding the examination time limit; or (5) any other dishonest conduct in connection with the examination.
INSTRUCTIONS
a. This examination consists of five questions. There are suggested amounts of time for each question, which total 3 hours, which is the total amount of time permitted for the exam.
b. Taking into account the amount of suggested times, discuss all issues reasonably raised by each question, even though your resolution of one issue may seem to render the others moot.
c. Each question is based on a case that has been decided recently (not necessarily correctly, in the view of your professor). You studied the case on which the first is based in class. I will post the citations to those on which the others are based on my office door by the Monday after the exam is completed.
Jones, a citizen of Nebraska, sued Smith, a citizen of Iowa, in a Nebraska state court for a tort Smith allegedly committed against Jones in Nebraska. The Nebraska court dismissed Jones' suit on the ground that Nebraska's two year statute of limitations for torts had expired. A Nebraska Supreme Court case has described this statute of limitations as "procedural."
Nebraska's Rule 41 of Civil Procedure reads in part:
Unless the court specifies otherwise in its order, a dismissal pursuant to this rule and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for forum non conveniens, or for failure to join a party indispensable operates as an adjudication upon the merits.
The Nebraska court did not "specify otherwise" in its order dismissing Jones' suit.
Jones subsequently brought suit against Smith for the same tort in an Iowa state court. Iowa's statute of limitations had not expired when this suit was brought, and under Iowa law, its statute of limitations would be applied.
Smith moved to dismiss the Iowa suit on the ground that, pursuant to the full faith and credit clause and statute, the Nebraska dismissal precluded Jones' suit on the same claim in Iowa. Discuss how the motion should be resolved.
Edward Mann is an Illinois resident who was injured in an Illinois automobile accident by an automobile driven by Albert Gunn, another Illinois resident. Mann filed an action to recover damages for his personal injuries against Gunn in an Illinois state court.
Gunn was represented in the law suit by attorneys hired by his motor vehicle liability insurance company, American Insurance. American Insurance is an Indiana corporation with its principal place of business in Indiana.
Shortly after Mann's suit was filed, Gunn's attorneys filed a motion to stay the proceedings because of a rehabilitation proceeding involving American Insurance that was taking place in Indiana. This rehabilitation was a proceeding brought by the Indiana Department of Insurance against American in an Indiana state court. Its stated purpose was to accomplish a financial re-organization of American to assure its continued financial viability.
The basis of the motion to stay Mann's lawsuit was an injunction order that had been issued by the Indiana court prohibiting and enjoining:
The prosecution or active continuation of any suit, action or other proceeding against or involving American Insurance, by way of an original claim or by way of a claim against an insured of American Insurance for which American Insurance may be obligated to defend or pay a judgment, until such time as this order is vacated or these proceedings are terminated.
Gunn's attorneys argued that the Illinois court was obligated to give full faith and credit to the Indiana court's injunction order. The record reflected no contacts between Mann and Indiana other than the fact that he had been hit by and was suing a person whose liability insurance company was an Indiana company. Discuss how the motion should be resolved.
In April of 1993, near East Point, Nebraska, Ken Nowak started the family's 1981 Ford pickup truck, preparing to take his three year old son Jeremy and Jeremy's younger brother Dustin to day care. With Dustin in the truck, Nowak realized Jeremy and his toy wagon were behind the truck and left the vehicle to move the wagon and retrieve Jeremy. As he proceeded to do so, the truck moved backward and rolled over Jeremy. Jeremy died from his injuries six months later.
In 1995, the Nowaks moved to Minnesota, where Ken Nowak brought suit against Ford for the wrongful death of Jeremy. The suit alleged that the accident was caused by a defective automatic gear selection system in the truck. Assume, for purposes of this question, that the Minnesota court could permissibly assert personal jurisdiction over Ford in the action.
Ford moved to dismiss the action on the ground that the claim was barred by Nebraska's ten-year statute of repose applicable to products liability actions. The statute, which appears in the "Civil Procedure" section of Nebraska's statutes, provides that "any product liability action shall be commenced within ten years after the date when the product which allegedly caused the personal injury, death, or damage was first sold or leased for use or consumption." It was undisputed that Nowak bought the truck new from a Ford dealer in Nebraska in 1981, 12 years before the accident. Thus if the statute was applicable, it was clear that the suit was barred.
Minnesota's approach to the issue of liability for injury, death, or damage allegedly caused by aged products is reflected by its "useful life" statute, which appears in the "Judicial Proof" section of Minnesota's statutes. That statute provides that "it is a defense to a products liability claim against a manufacturer, distributor, or seller of the product or a part thereof, that the injury was sustained following the expiration of the ordinary useful life of the product." The "ordinary useful life" of a product "is the period during which with reasonable safety the product should be useful to the user, taking into account wear and tear, subsequent industry developments, conditions of use, the manufacturer's stated useful life, and user modification of the product." Under this statute, it would be for the jury to decide whether the truck's useful life had expired before the accident occurred. Both the Nebraska and Minnesota statutes were enacted in 1978, during a period of extensive "tort reform" in the United States.
Before moving to Minnesota in 1995, the Nowaks had no connections whatsoever with Minnesota. In support of the motion to dismiss, Ford noted Nowak's "candid" testimony at his deposition that he and his family had moved to Minnesota in part "because we had consulted an attorney and were aware that under Nebraska law our case was a non-starter, but that Minnesota's law was more favorable to a suit against Ford." (The other reason he gave at the deposition was that they desired to move away from the site of the accident and Jeremy's eventual death).
Beyond the facts that (1) the Nowaks now live in Minnesota and (2) Ford does business and has a plant in Minnesota, the only other connection between the suit and Minnesota was the following: about 15% of the component parts of the truck had been manufactured at Ford's plant in St. Paul, Minnesota. However, manufacture and assembly of the allegedly defective automatic transmission gear selection system, as well as final assembly of the truck, took place at one of Ford's plants in Michigan.
Based on your understanding of Minnesota's application of the "Better Rule" approach to choice of law and any pertinent limitations imposed on choice of law by the United States Constitution, discuss how Ford's motion to dismiss should be resolved.
States X and Y are adjacent to each other. Able and Blade, domiciliaries of state Y, were driving in state Y when their car was hit by one owned by Carr, who was in the passenger seat, and which was being driven by Davis with Carr's permission. Carr and Davis are domiciliaries of state X. Carr and Davis had both been drinking large amounts of alcoholic beverages in state X before they began their journey that took them into state Y. Police investigation into the accident suggested that Davis' intoxication contributed significantly to the accident. It also suggested that Able and Blade were relatively free of fault.
Able and Blade were severely injured in the accident and have come to your office, wishing to sue. They have reason to believe that Carr had a significant amount of automobile liability insurance coverage at the time of the accident and also has other assets that might be used to satisfy a judgment. On the other hand, they believe that Davis owns no automobile, carries no automobile liability insurance coverage, and has relatively few assets.
Both X and Y apply principles of comparative fault in tort actions, and instruct the jury to determine the fault of all persons involved in an accident. In each state, plaintiffs may recover from a defendant if their fault was less than that of that defendant.
However, the laws of X and Y differ regarding actual recovery against those found liable in tort. State X imposes joint and several liability, under which the injured party may recover the full amount of their damages against any liable tortfeasor. If the amount recovered from a tortfeasor is proportionately more than that tortfeasor's percentage of fault, the paying tortfeasor's only redress is to attempt to obtain contribution from the other tortfeasors for the latters' proportion of the damages.
State Y, on the other hand, has partially abolished joint and several liability. Under its statutes, an injured party may recover against a single tortfeasor only the percentage of damages directly attributable to that tortfeasor's fault, unless that tortfeasor is determined to be more than 60% at fault.
State X applies interest analysis in determining choice of law issues, and it will consider arguments based on precedent from other states that have adopted interest analysis, including New York. (It has not, however, seemed inclined to consider arguments based on comparative impairment, so you need not discuss that concept). State Y, on the other hand, applies the most significant relationship approach of the Second Restatement.
Where would you suggest that Able and Blade sue. Explain the reasoning leading to your conclusion.
Assume that New York City becomes a separate State of the United States. After this occurs, William, a New York City resident, opens a new business in the city called William's Antiques. Shortly thereafter, William reads an advertisement in an American trade magazine about an "antiques fair" to be held in London, England. William travels to London, and while at the fair, discusses the possibility of purchasing some antiques from Bloke, who lives in London and is exhibiting at the fair.
Upon returning to New York City, William receives a bill from Bloke for $20,000, for antiques purportedly purchased by William at the fair, stating that shipment would be made upon payment. William writes back, "What's this bill all about? We just talked about possibilities. I didn't buy anything."
Instead of responding by mail, Bloke hires a New York City attorney who files suit for breach of contract against William in a New York City court. The complaint alleges an oral contract made between William and Bloke at the fair. William's answer raises the defense of the statute of frauds (actually section 2-201 of the Uniform Commercial Code, which New York City had adopted), which reads:
A contract for the sale of goods for the price of five hundred dollars or more is not enforceable ... unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent.
William makes a motion for summary judgment based on this statute, asserting that it is applicable. In response to the motion, Bloke presents evidence showing that nothing in English law would prevent enforcement of an oral contract such as he had alleged, and he asserts that English law should apply. He also presents an affidavit reflecting facts which, if believed by a jury, would warrant their conclusion that the alleged oral contract had been made.
This is thought to be the first case in which a choice of law issue was raised since New York City became a separate State. Thus, it has no precedent on the issue. In fact it has not even adopted an approach to choice of law. Based on any material studied in this course, discuss how the motion should be resolved. In justifying your conclusion, address arguments that might reasonably be made for the opposite conclusion.