Business Law I Final Examination
Medgar Evers College
Spring 2011
Part one – 8 multiple choice questions and one 2-part short answer question.
Part two – Sandy Hearst goes to New York Case Problem
PART ONE
1. “[The] Negro lawyer must be trained as a social engineer and group interpreter. Due to the Negro's social and political condition . . . the Negro lawyer must be prepared to anticipate, guide and interpret his group advancement. . . . [Moreover, he must act as] business advisor . . . for the protection of the scattered resources possessed or controlled by the group. . . . He must provide more ways and means for holding within the group the income now flowing through it.” Charles Hamilton Houston in the book Groundwork
The above quote from Charles Hamilton Houston is an example of the judicial thought known as:
a) natural or universal law
b) legal positivism
c) historical school of analysis
d) legal realism
2. Monique has searched for a job for two years and finally found one as a bookkeeping clerk at an accounting firm. In order to start the job her employer forced her to sign an agreement to submit any legal claims to binding arbitration. After suffering racial discrimination and a sexual assault, Monique sued her employer in federal court. After her employer filed a motion to dismiss the case and order the parties to arbitrate the claim, the federal district court should:
a) deny the motion to dismiss because the claims are too serious.
b) deny the motion to dismiss because Monique did not have freedom of contract when she took the job.
c) grant the motion because the Supreme Court has found that arbitration clauses as a condition of employment are generally enforceable.
d) grant the motion but allow Monique to again file suit in federal court if she is not satisfied with the arbitrator’s decision.
3. In 1964, in Heart of Atlanta Motel v. United States, the Supreme Court upheld the federal government’s authority to prohibit racial discrimination nationwide in public facilities, including local motels, based on Congress’ power to:
a) enforce the 13th Amendment that prohibits the badges and incidents of slavery.
b) regulate interstate commerce insofar as segregated activities had a substantial effect on interstate commerce.
c) provide for the general welfare of the country.
d) enforce through stare decisis the Brown decision that found segregation in public schools to have been unconstitutional
4. In Skilling v. United States (2010), the United States prosecuted Jeffrey Skilling for denying Enron of “honest services.” The United States alleged that Skilling had, among other things, shifted more than $2 billion in losses from Enron’s divisions to hide the losses, overstated Enron’s profits to callers and investors, and arranged deals with third parties that could not have produced income. With respect to the “honest services” claim, the Supreme Court:
a) dismissed this claim because every corporate officer occasionally lies or states an opinion the same way that police officers lie to get confessions.
b) dismissed this claim because “honest services” was too vaguely defined for any person to understand this prohibited conduct.
c) affirmed the jury’s judgment on this claim because Jeffrey Skilling was apparently fraudulent.
d) affirmed the jury’s judgment on this claim because Congress has the authority to define causes of action.
5. A lawsuit in a federal district court in New York alleged that Shell Oil officials supplied Nigerian police with weapons, participated in security sweeps of the area, and hired government troops that shot at villagers protesting the construction of a pipeline. The plaintiffs also allege that Shell Oil helped to capture and hang six opposition leaders including Saro-Wiwa on Nov. 10, 1995. The district court should have most properly:
a) sent the case to a New York Criminal Court so that Shell officials could have been jailed and fined for their alleged misconduct.
b) dismissed the case because foreigners cannot sue U.S. companies in U.S. courts.
c) adjudicated the case to see if Shell Oil had committed the alleged intentional and unintentional torts.
d) adjudicated the case only against the individual Shell Oil employees who had committed the alleged wrongdoing.
6. Bloomberg, Inc. asked Joseph Enterprises, a Brooklyn computing firm, to fix some of its software after a cyber attack. Bloomberg, Inc. demanded that Joseph Enterprises fix the software glitches in three days at a price to be agreed upon after the work was completed. A contract based on Bloomberg, Inc.’s offer:
a) would fail because the nature of the cyber attack had not yet been determined.
b) would fail because the price involved had not been agreed to.
c) would not fail because of the necessity to come to an agreement quickly.
d) would not fail even if Joseph Enterprises did not complete the work.
7. BISK CPA Prep Question: Under the parol evidence rule, oral evidence will be excluded if it relates to
a) A contemporaneous oral agreement relating to a term in the contract.
b) Failure of a condition precedent.
c) Lack of contractual capacity.
d) A modification made several days after the contract was executed.
8. BISK CPA Prep Question: Which of the following types of mistakes will generally make a contract unenforceable and allow it to be rescinded?
a) A unilateral mistake of fact
b) A mutual mistake of fact
c) A unilateral mistake of value
d) A mutual mistake of value
9.-10.
Natalie agreed orally to repair Ramon’s IPad2 for $400. Before the work was started, Natalie discovered additionally needed repairs and agreed orally with Ramon to perform all the repairs for $1200. After Natalie finished the work, Ramon refused to pay and Natalie sued. Ramon based his defense on the Statute of Frauds. How much will Natalie recover? Why?
PART TWO -- Case Problem:
After the guilty verdict against her in Vickers v. Hearst, Sandy Hearst paid her judgment and decided to start a new life in New York City. Sandy Hearst decided that she would become a social
networking executive. On her first night on the New York City party scene, Sandy Hearst was amiable as usual, but was not used to the strength of some of the New York liquor served at Light Concoctions owned by Chad Hilledge
Sandy Hearst slurred her speech and stumbled around but still managed to meet Chad Hilledge and give him samples of her special rum cake. In exchange for the recipe, Chad Hilledge gave her three more rounds of drinks and access to his VIP rooms for the next 6 months.
In a drunken stupor Sandy Hearst left Light Concoctions at 1 AM and stumbled into the street. LeToya David, who had not been consuming liquor, accidentally hit Sandy Hearst in the street as she and her girlfriends were singing to Keri Hilson’s “Pretty Girls Rock”. Both Sandy Hearst and LeToya David & Company suffered serious injuries.
Sandy Hearst sued LeToya David in court for negligently causing the accident. LeToya David countersued Sandy Hearst for negligently walking in the street while being intoxicated at 1:30 AM.
Both parties joined Light Concoctions as a third party defendant for causing their injuries.
Using the library below, answer the following two questions. Support your answer with resources from the library and complete explanations for your answers.
1) Should a New York Court hold Light Concoctions liable to Sandy Hearst for serving alcohol to her when she was visibly drunk?
Explain why or why not.
2) Should a New York Court hold Light Concoctions liable to LeToya David for serving alcohol to Sandy Hearst when Sandy Hearst was visibly drunk? Explain why or why not.
General Obligations Law Section 11-101(1) (Dram Shop Act) is a statutory vehicle created for monetary recovery distinct from the common law, permitting third parties injured or killed by an intoxicated person to recover from the server or seller of alcohol if they can prove that the intoxicated person who caused the injury was “visibly intoxicated” when served alcohol.
Alcoholic Beverage Control Law Section 65(2) makes it unlawful for anyone to sell, deliver or give away alcoholic beverages to any “visibly intoxicated” person. However, the crucial question is which party has the burden of proving visible intoxication or the lack thereof, the plaintiff or the defendant.
Margaret A. Sheehy et al., Appellants, v. Big Flats Community Day, Inc., et al., Defendants, and American Legion Ernest Skinner Memorial Post 1612, Respondent
[NO NUMBER IN ORIGINAL]
Court of Appeals of New York
73 N.Y.2d 629; 541 N.E.2d 18; 543 N.Y.S.2d 18; 1989 N.Y. LEXIS 664
April 25, 1989, Argued
June 6, 1989, Decided
On the evening of June 24, 1983, plaintiff Margaret Sheehy, who was then 17 years old, attended the "Big Flats Community Days" celebration, an outdoor event that was sponsored by defendant Big Flats Community Days, Inc. (Big Flats). According to the allegations in her complaint, Sheehy was served several beers in a beer tent operated by defendant American Legion Ernest Skinner Memorial Post 1612 (American Legion). Sheehy claimed that she had not been asked for proof of her age before she was admitted to the tent or served. At the time of the incident the legal age for purchasing alcoholic beverages in New York was 19 (Alcoholic Beverage Control Law § 65 [former (1)], as amended by L 1982, ch 159, § 1).
An affidavit submitted by one of Sheehy's witnesses alleged that she entered the American Legion beer tent for the second time just before midnight and was served additional beers, although she was staggering and was visibly intoxicated. She then crossed the highway and entered the bar operated by defendant Driscoll's Tavern, Inc. (Driscoll's), where she was served another alcoholic beverage. When Sheehy attempted to cross the highway and return to the grounds of the "Community Days" celebration, she was struck by an automobile and severely injured.
Sheehy commenced the present action against Big Flats, American Legion and Driscoll's, claiming that their conduct in serving her alcoholic beverages in violation [***20] of law was the proximate cause of the [**20] accident. Defendant American Legion, the only defendant involved in this appeal, denied the factual allegations in Sheehy's complaint, alleging instead that plaintiff had been asked for proof of her age before having been served and that she had displayed a false driver's license. Defendant also claimed that Sheehy had immediately been told to leave the beer tent after she was recognized by someone who knew her true age….
Even more to the point, HN7General Obligations Law § 11-100, which was enacted in 1983, provides for recovery against a person who knowingly caused a young person's intoxication by furnishing alcoholic beverages, with or without charge, "with knowledge or reasonable cause to believe that such person was [a person under the legal purchase age]." Significantly, in enacting this statute, which specifically addresses the problem of civil damages resulting [***22] from youthful alcoholic excesses, [**22] the Legislature authorized suit only by persons "injured in person, property, means of support, or otherwise, by [the intoxicated person]", the same language as that used in General Obligations Law § 11-101. Since the Legislature must be presumed to have been aware of the long-standing judicial construction of that language as precluding recovery by the intoxicated person, it is reasonable to infer that the Legislature intended the same result in cases arising under section 11-100….
Manifestly, the Legislature has already considered the use of civil remedies to deter the sale of alcoholic beverages to those under the legal purchase age and has determined that the approach embodied in General Obligations Law § 11-100 is the most suitable. Recognizing a private right of action in favor of the intoxicated youth under Penal Law § 260.20 (4) would be inconsistent with the evident legislative purpose underlying the scheme embodied in General Obligations Law §§ 11-100 and 11-101: to utilize civil penalties as a deterrent while, at the same time, withholding reward from the individual who voluntarily became intoxicated for his or her own irresponsible conduct. We cannot, and will not, use Penal Law § 260.20 (4) as a predicate for overriding this legislative policy judgment (cf., D'Amico v Christie, supra, at 84).
Kathleen Ann O'Gara, plaintiff, v Gladys Alacci, et al., defendants third-party plaintiffs-appellants; Katonah Bar & Grill, et al., third-party defendants-respondents. (Index No. 18828/07)
2008-05841
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
2009 NY Slip Op 6668; 67 A.D.3d 54; 887 N.Y.S.2d 106; 2009 N.Y. App. Div. LEXIS 6514
September 22, 2009, Decided
JUDGES: REINALDO E. RIVERA, J.P., JOSEPH COVELLO, DANIEL D. ANGIOLILLO, JOHN M. LEVENTHAL, JJ. RIVERA, J.P., ANGIOLILLO and LEVENTHAL, JJ., concur.
OPINION BY: JOSEPH COVELLO
COVELLO, J. In this action to recover damages for personal injuries, the primary question presented is whether the owner and operator of a car that struck an intoxicated and allegedly careless pedestrian may seek contribution from the party that sold alcohol to the pedestrian, based on that party's alleged violation of the Dram Shop Act (seeGeneral Obligations Law § 11-101). We answer that question in the affirmative.
Early on the morning of October 29, 2006, the defendant third-party plaintiff Matthew D. Alacci was driving a car owned by the defendant third-party plaintiff Gladys Alacci (hereinafter together the appellants) on a parkway in Westchester County. Shortly before 5:00 A.M., the car struck the plaintiff, who, for some unknown reason, was attempting to walk across the parkway. Indeed, when interviewed about the accident, the plaintiff was unable to recall how she came to be on the parkway. She was, however, able to recall that before the accident, she took the drug Percocet, and consumed copious amounts of alcohol at a bar owned and/or operated by the third-party defendants.
Alleging that the car was negligently operated, the plaintiff commenced the instant action against the appellants to recover damages for certain injuries she allegedly sustained as a result of the accident. In their answer, the appellants, alleging that the accident was caused in whole or in part by the plaintiff's culpable conduct, raised the affirmative defense of comparative fault.
After interposing their answer, the appellants commenced a third-party action against the third-party defendants seeking, among other things, contribution. In support of that claim, the appellants alleged that the accident was caused in part by the [**56] third-party defendants' employees' [*2] "active . . . negligence" in serving alcohol to the plaintiff "in such quantities and over a long period of time" that the employees either knew or should have known she was intoxicated.
Here, in the third-party complaint, the appellants, in effect, alleged that the plaintiff's alleged injuries were caused in part by the third-party defendants' violation of the Dram Shop Act. However, assuming the truth of the appellants' allegation (see Leon v Martinez, 84 NY2d at 87-88), the third-party defendants could not be considered to have violated a duty owed to the plaintiff. This is because HN6a seller of alcohol owes no duty to the consumer to protect the consumer from the results of his or her voluntary intoxication (see Sheehy v Big Flats Community Day, 73 NY2d 629, 636, 541 N.E.2d 18, 543 N.Y.S.2d 18; Butler v New York City Tr. Auth., 3 AD3d 301, 301-302, 770 N.Y.S.2d 317; Vandenburg v Brosnan, 129 AD2d 793, 794, 514 N.Y.S.2d 784, affd70 N.Y.2d 940, 519 N.E.2d 618, 524 N.Y.S.2d 672; Bizzell v N. E. F. S. Rest., Inc., 27 AD2d 554, 275 N.Y.S.2d 858). Furthermore, HN7the Dram Shop Act does not give the consumer a cause of action against the seller to recover damages for injuries the consumer suffered as a result of a Dram Shop Act violation (see Mitchell v The Shoals, Inc., 19 NY2d 338, 340-341, 227 N.E.2d 21, 280 N.Y.S.2d 113; Coughlin v Barker Ave. Assocs., 202 A.D.2d 622, 623, 609 N.Y.S.2d 646; Marsico v Southland Corp., 148 AD2d 503, 505, 539 N.Y.S.2d 378; Matalavage v Sadler, 77 AD2d 39, 43, 432 N.Y.S.2d 103; [**58]Moyer v Lo Jim Cafe, 19 AD2d 523, 523-524, 240 N.Y.S.2d 277, affd14 NY2d 792, 200 N.E.2d 212, 251 N.Y.S.2d 30; Scatorchia v Caputo, 263 App Div 304, 305, 32 N.Y.S.2d 532).
Hence, because the appellants have not alleged that the third-party defendants breached a duty owed to the plaintiff, it might appear that the appellants cannot seek contribution from the third-party defendants.
[*3] However, the rule that a party's liability for contribution flows from a breach of a duty owed to the plaintiff is a "general" one to which there exists an "important exception" (Sutherland v Hallen Constr. Co., 183 AD2d 887, 889-890, 585 N.Y.S.2d 55). Indeed, it has been recognized that HN8a party's liability for contribution can also flow from a breach of an independent duty owed to the defendant, provided that the breach of this duty played a part in causing or augmenting the injury for which the defendant seeks contribution (see Raquet v Braun, 90 NY2d 177, 182-185, 681 N.E.2d 404, 659 N.Y.S.2d 237; Sommer v Federal Signal Corp., 79 NY2d at 559; Nassau Roofing & Sheet Metal Co. v Facilities Dev. Corp., 71 NY2d at 602; Guzman v Haven Plaza Hous. Dev. Fund Co., 69 NY2d at 568 n 5; Garrett v Holiday Inns, 58 NY2d at 261; Nolechek v Gesuale, 46 NY2d 332, 337-341, 385 N.E.2d 1268, 413 N.Y.S.2d 340).
Assuming the third-party defendants' employees violated the Dram Shop Act by selling alcohol to the plaintiff despite her being visibly intoxicated (see Leon v Martinez, 84 NY2d at 87-88), the third-party defendants would have breached a duty owed to the appellants, who are members of the public. HN9The Dram Shop Act, intended to, among other things, protect the community from the dangers intoxicated people pose (see Matalavage v Sadler, 77 AD2d at 43; Manfredonia v American Airlines, 68 AD2d 131, 135, 137, 416 N.Y.S.2d 286; cf. Rust v Reyer, 91 NY2d 355, 360-361, 693 N.E.2d 1074, 670 N.Y.S.2d 822), imposes a duty[***110] upon sellers of alcohol to protect the public from such dangers (see Berkeley v Park, 47 Misc 2d 381, 384, 262 N.Y.S.2d 290; cf. Strassner v Saleem, 156 Misc 2d 768, 771, 594 N.Y.S.2d 559). Courts have implicitly recognized that a breach of that duty can support a claim for contribution by indicating that an intoxicated person who might be answerable in damages for injuring a member of the public can seek contribution from the seller of the alcohol based upon an alleged violation of the Dram Shop Act because the intoxicated person and the seller are "subject to liability for damages for the same personal injury" (CPLR 1401; see Smith v Guli, 106 AD2d 120, 122, 484 N.Y.S.2d 740; Herrick v Second Cuthouse, 100 AD2d 952, 475 N.Y.S.2d 91, affd64 NY2d 692, 474 N.E.2d 1186, 485 N.Y.S.2d 518; J.S.M. Contr. v Old Route 6 Pub, 129 Misc 2d 604, 605-606, 493 N.Y.S.2d 930; see also Johnson v Plotkin, 172 AD2d 88, 90, 577 N.Y.S.2d 329).