California Marital Property Law: Exam on Spouses' Business and Retirement Assets, Exams of Property Law

Download California Marital Property Law: Exam on Spouses' Business and Retirement Assets and more Exams Property Law in PDF only on Docsity! LAW 281.2: CALIFORNIA MARITAL PROPERTY FALL 2006 FINAL EXAM Page 1 of 7 UNIVERSITY OF CALIFORNIA COURSE EXAMINATION SCHOOL OF LAW Fall 2006 LAW 281.2: CALIFORNIA MARITAL PROPERTY INSTRUCTOR: HERMA HILL KAY TIME ALLOWED: 22 HOURS CLOSED BOOK EXAMINATION NUMBERS: Please be sure to put your correct Fall exam number on each page of the exam (if typed) or on each blue book. COMPLETION: DO NOT CONTINUE WRITING AFTER TIME HAS BEEN CALLED. Please do NOT leave your bluebook or typed answers on the desk. Exams MUST be turned in to the person in charge. If you finish early, you must turn your exam in to the Examination Headquarters in Room 123 Boalt Hall. There are no space limits. Question I. 25% CREDIT Hubert owns and operates a dog boarding kennel and a dog grooming business in San Francisco, California. He has recently experienced a down turn in his kennel business, and seeks advice from Wilma, an entrepreneurial consultant. Wilma tells him that the market demand has shifted away from kennels and toward up-scale “doggie hotels” which provide private rooms, high-end exercise facilities (including swimming pools), special diets, and video entertainment for canine “guests” whose owners pay in excess of $100 per night to book reservations for their pets. Wilma convinces Hubert that he should transform his kennel into a “hotel.” He agreed to follow Wilma’s advice. He also fell in love with her, and asked her to marry him. Hubert and Wilma were married in California in December 2000. After they returned from their month-long honeymoon (which they spent touring doggie hotels in Europe), Hubert took out a business loan of $100,000 to remodel the kennel into a doggie hotel, installing all the facilities and LAW 281.2: CALIFORNIA MARITAL PROPERTY FALL 2006 FINAL EXAM Page 2 of 7 improvements that Wilma had suggested. Wilma sold her consulting business and invested the profit ($100,000) into the hotel. Gradually, Wilma took over primary responsibility for managing the hotel, while Hubert concentrated on the dog grooming business. By 2005, both parts of the business were doing well, but the hotel had earned triple the profit that the kennel had produced. ANSWER THE FOLLOWING QUESTIONS AND DISCUSS YOUR ANSWERS FULLY: 1. Assume that Wilma filed an action for divorce in 2006. The “doggy hotel” and grooming business is the only item of property that remains in dispute. You are the trial court judge. (a). Characterize the business. (b). Divide the business. 2. Assume that the doggy hotel and the grooming parlor is located in a building on a parcel of real property in San Francisco. The building and property were owned by Hubert prior to the marriage, and he held title in his name alone. The day after they returned from their honeymoon, on January 15, 2001, Hubert transferred the property from his name alone to “Hubert and Wilma, husband and wife, as community property with right of survivorship.” As required by the statute creating this form of title, Wilma accepted the transfer by a signed statement on the face of the document. (a). Characterize the property. (b). Divide the property. 3. Assume that, before you had made any property dispositions, Hubert was killed in an automobile accident while on his way to the courthouse. He died intestate. His only surviving family members are Wilma and Sam, his son by a prior marriage. How and why should the probate court dispose of the real property and the business? Question II. 25% CREDIT Robin is a graduate of West Point, and is a career army officer. She is a lesbian, but that fact is not made public. She and her partner, Gail, registered in California as Registered Domestic Partners in January 2005. LAW 281.2: CALIFORNIA MARITAL PROPERTY FALL 2006 FINAL EXAM Page 5 of 7 one-half interest in the higher monthly payments available under the plan. She asks that Hiram be ordered to reimburse her for these foregone sums. How and why should the trial court rule on Wendy’s contention? Question IV. 25% CREDIT Henry and Winnie were married in California in 2002. Henry teaches mathematics at an exclusive private school. Winnie teaches creative writing at the same school. Henry writes short stories in his spare time. His stories are full of violent, fast-moving action themes, but his writing is dull. Discouraged, he shows some of his stories to Winnie. She is a talented writer, but she lacks the imaginative flair shown by Henry’s plots. They decide to combine their talents, with Henry sketching out the plots and Winnie writing the narratives. Their first story, a tautly written suspense tale, was accepted for publication by the New Yorker and created an immediate sensation. Henry and Winnie, fearing their employer would find their story too violent for their private school’s stuffy reputation, chose to publish it under an assumed name. Other stories followed the first and found equally enthusiastic receptions. Their first collection of short stories was published in the summer of 2004 and sold 1 million copies in its first printing. Despite their success, however, Winnie feels they have not fully exploited Henry’s ideas. She suggests that they add a line of children’s books based on the same plots but with a magic/science fiction focus rather than an adult adventure theme. Henry fears that the new line would compete with their established format. Winnie is convinced that she is right. She decides to write and market children’s stories without Henry’s knowledge. She adopts a new “fictitious pseudonym” to further disguise the connection between the two series of stories. Her first children’s story, published in time for the Christmas 2004 trade, was well-received. It went through three printings, each larger than the others. Henry saw the first story, but his plot was so cleverly disguised that he did not suspect that Winnie had written it. When Winnie realized that Henry was unaware of what she was doing, she decided to keep on writing the stories. She published a longer story, more like a novella than a short story. This second story was wildly popular, approaching the Harry Potter LAW 281.2: CALIFORNIA MARITAL PROPERTY FALL 2006 FINAL EXAM Page 6 of 7 series in initial sales. By the end of 2005, Winnie is confident that her children’s series based on plots of their prior stories will surpass the couple’s adventure stories in sales. She has offers from TV and the movies which are very lucrative. ANSWER THE FOLLOWING QUESTIONS AND DISCUSS YOUR ANSWERS FULLY: 1. Assume that Winnie is unwilling to share the profits from the children’s series with Henry. She files for divorce in 2006. She does not list the children’s stories in her statement of assets filed in the proceeding. Henry remains unaware of them. They enter into a property settlement agreement which divides their proceeds from the adventure series including future royalties and redistribution rights equally. After the interlocutory decree of divorce has been entered, Henry consults you. One of his colleagues whose son is a fan of Winnie’s children’s stories, and who has read all of the adventure stories, and knows they were written by Henry and Winnie, looked at one of the children’s stories and was immediately struck by its similarity of plot and writing style to the adventure stories. He spoke to Henry about his observation, and showed Henry why he had thought he and Winnie had also co-authored the children’s stories. Henry asks you to investigate. (a). You are a marital property specialist. Assume that you discover what Winnie has done. What remedies are available to Henry? (b). You are a different marital property specialist. You represent Winnie. How will you respond to Henry’s demands? 2. Assume that Winnie did not file for divorce. Instead, she told Henry in mid-2005 about her success with the children’s stories, and proposed that they cease producing the adventure stories and concentrate on the children’s series. She wants him to sign a written agreement that she will own 70% of the proceeds from the children’s series and that he will own 30% of the proceeds. Henry agrees to this proposal, and signs the agreement. The children’s series turns a huge profit in 2006, and a major motion picture based on the stories is in the process of being produced. Winnie resigns her job at the private school to devote full time to producing the children’s stories and working on the movie script. LAW 281.2: CALIFORNIA MARITAL PROPERTY FALL 2006 FINAL EXAM Page 7 of 7 As the profits mount up, Henry becomes convinced that Winnie has taken unfair advantage of him. He files suit to have the agreement set aside. Winnie counters by filing for a divorce. The two proceedings are combined for trial in the divorce case. You are the judge presiding over the consolidated proceedings. (a). Characterize the property held by the parties. (b). Divide the property between the parties. END OF EXAMINATION