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ID: Prop2_LSN_Bernhardt_Final_2011SL
ID: (Exam Number)
Exam Name: Prop2_LSN_Bernhardt_Final_2011SL
Instructor: Bernhardt
Grade:
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ID: Prop2_LSN_Bernhardt_Final_2011SL Bernhardt
1)
ESSAY-—PART 1
Vanessa (V) withdrawal from K with Peter (P):
Unfortunately, since V accepted the offer with the condition that P's wife approve
of the neighborhood schools, a valid contract has been formed. Presuming that the
contract between V and P is in writing (satisfying the Statute of Frauds), has all the
necessary elements (date, party names, property address, price, and signatures), the K
is valid and enforceable because there was offer and acceptance. As such, there are
only a few circumstances that would allow V t vee out of the K. If the K has a “time is
of the essence” clause, then V can back out as soon as the time lapses for P to inform
V whether they are satisfied with the school. Satisfaction gases must be reasonable
for functional, and honest in fact for aesthetic contracts. As such, V cannot get out of
the contract based on the school contingency unless P fails to answer within the time
VY frame (if required by the K). P can waive the condition even if his wife is unsatisfied
and keep V obligated under the contract, because a condition can be waived by the xe x a
person who gains the benefit of the condition. As for V's suggestion that P's wife's (W) SR
signature is not on the contract, though signatures by both parties are required for a
Contract to be valid, if W is not going to be on title to the property and the property is
being purchased with P's separate property funds, it is perfectly acceptable for P to be
the only party to the K. Prenups, the existence of the property in a community property
state or not, whether P expects W to be on title, whether P expects W to assist in
financing/qualifying for a mortgage; all of these things are considerations that would
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ID: Prop2_LSN_Bernhardt_Final_2011SL Bernhardt
grant great deference, arguing that so long as it is at least fairly debatable that the
government has acted within their general police powers, the regulation will be upheld.
However, second, | think the zoning ordinance could be attacked on the grounds that it
distinguishes between “borderline van which is not permitted. If the zoning
ordinance allows for employment activities such as domestic cleaning and home
repairs, | do not see such a strong distinction between home tutors as well. They are all
domestic workers to an extent, since they perform their obligations within the home, and
if tutoring were determined to be a "borderline activity" then it could not be banned.
If the purchase goes through and the City takes the position that tutoring is not
allowed, and further, the zoning ordinance is upheld as valid despite the arguments
identified above, then P&W can always attempt fo have a variance granted. A variance
requires that the proposed use not be substantially incompatible with the
comprehensive plan, that the landowners suffer an unnecessary hardship that is not
self imposed, that the hardship is more than financial difficulty, and that the use must
not alter the essential character of the neighborhood or be detrimental to public welfare.
It seems that P&W's use is consistent with these requirements, perhaps with the
arguable exception of the second (hardship not self imposed--they very well could get
out of the sales contract to purchase based on their condition not being met so if they
are in the house and were on notice of the condition, it IS self-imposed), and the city
may grant them a variance.
if that doesn't work, they can attempt to challenge the land use restrictions as
arbitrary, a denial of procedural due process (if you could argue that the right to be
home schooled is a fundamental right guaranteed by the constitution and it was taken
without due process of law-—notice, opportunity for hearing, impartial magistrate, etc.), a
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ID: Prop2_LSN_Bernhardt_Final_2011SL Bernhardt
violation of first amendment associational rights, or anything else that might stick. But
good luck. As your lawyer, I'd say P&W are stuck. As a friend, I'd say what the hell. In
ali honesty, how likely is it that they would discover that you were home-schooling your |
children? {'m not that familiar with the Patriot Act, but unless you give the government +
cause to surveil you, | think you're in the clear.
ESSAY-—PART 3
$ 65,000 obligation to Olympia as the Sr. Mortgage Holder
$300,000 obligation to Newpay as a Jr. Mortgage
$100,000 obligation to Vanessa as a Jr. Mortgage
$ 8,000 obligation to tutor as a judgment creditor/ien holder against the property
When Newpay, a Jr. mortgageé foreclosed on the property, the property is sold subject
to all the interests that are senior in priority. The senior neg continue to encumber
the title. Thus, the foreclosing auctioneer should not distnbute any funds to Olympia,
who is the senior mortgage holder, because the foreclosure sale purchaser will acquire
fee title subject to Olympia’s mortgage. The foreclosure purchaser should have
ensured that their auction bid was not in excess of the land's full market value less the
total amount of the senior interest. /
As to the rephaining obligations, the ayCtioneer should distribute $300,000 to Newpay,
$100,000 to Vanessa, and $8,000 {6 satisfy the property lien; this should come from the
$425,000 recovered from the sale. This leaves a remainder of $17,000 that would go to
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ID: Prop2_LSN_Bernhardt_Final_2011SL Bernhardt
f-
P (and W if she actually purchased the house jointly with P) since the foreclosed owner
of the property is entitled to recover the surplus after junior lienors are paid.
END OF EXAM
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