21 - CIVIL PROCEDURE MID-TERM EXAMINATION Fall 2003...

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CIVIL PROCEDURE MID-TERM EXAMINATION Fall 2003 Instructor: Craig Smith QUESTION 1 Moe bought a home in Los Angeles, California. After shopping around for a mortgage, Moe choose Stooge Mortgage, a subsidiary of a large, nationwide bank. Stooge (a Delaware corporation) has its headquarters in Atlanta, Georgia. Moe called an 800 number, requested a loan application, filled it out, and sent it in. He subsequently received a phone call approving the loan. Before he actually closed on the house, Moe hired an inspector to notify him of any defects in the property. This inspection revealed several problems which the sellers agreed to take care of before title passed. As soon as he had title, Moe hired a contractor to remodel the kitchen. Two months into this work, Moe received notice that he was terminated from his employment. Moe immediately told the contractor to stop work on the house. He said he would, but said that Moe should know that just that day he had uncovered a substantial amount of asbestos in the ceiling of the kitchen and that it posed an immediate health hazard and required removal. A few months later, Moe received in the mail, a copy of a summons and complaint from a federal court in Georgia, in which Stooge alleged unpaid mortgage debt in the amount of $65,000.00. 1. Moe isn’t sure whether he has a defense to the claim, and he wants to stall for time while he researches this question. He knows he cannot possibly defend against the lawsuit if he has to do so in Georgia. Discuss fully what response(s) Moe should make to the complaint. 2. Hoping to sell the house to pay off the debt, Moe consults a real estate broker, who tells him that with the asbestos hazard the house cannot be sold without thousands of dollars of repair work. Moe thinks that the inspector should have discovered and warned him about this problem and that the contractor, who was hired to remodel the kitchen, should have been more careful. Moe wants to join the inspector and the contractor in the suit filed by Stooge. Moe also believes that Stooge Mortgage failed to disclose the actual mortgage rate in the literature it sent to him, a violation of the Federal Truth In Lending Act and
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would like to hold them accountable for that. Discuss fully what Moe would have to do to implement this strategy.
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QUESTION 2 Bert, a resident of California, was injured when he bit into a bagel and came into contact with a rusty nail. Bert ran next door to the apartment of Ernie who called an ambulance. Bert files suit in California Superior Court seeking compensation for his injuries on the theories of breach of the implied warranty of merchantability as well as strict liability in tort. Bert names as defendants Sesame Bagel Company, a Delaware Corporation with its headquarters in New Jersey, who produced the bagels and Corner Market, a Nevada Corporation with 90% of its retail outlets in California, where he purchased them. The complaint seeks in excess of $100,000.00 in damages. 1.
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This note was uploaded on 11/05/2009 for the course MATH 110 taught by Professor Washingtonm during the Fall '08 term at Foothill College.

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21 - CIVIL PROCEDURE MID-TERM EXAMINATION Fall 2003...

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