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Requirements for a valid will
18 years old (unless married or member of the armed force) and of sound mind
Requirements to be of "sound mind"
- Understand the nature and extent of your property
- Understand the object of you bounty
- Understand the nature of the document (it's a testamentary instrument that distributes property at death)
Sound mind presumption
Testator presumed to be of sound mind; if rebutted, proponent must show testator had capacity by preponderance
Undue Influence upon Testator
- Influence existed;
- Subverted Testator's mind;
- No will w/o the influence
Factors for determining if undue influence happened
- Successfulness of person exercising influence
Effect of Undue Influence
Invalidates provision subject to influence;
Wills: Fraud in the Execution
Fraud as to nature of writing itself; will invalid
Wills: Fraud in the Inducement
Extrinsic facts which affect distribution (if testator knew the truth, would he do the same thing?)
E.g., Child claims to be Testator's son, but he's not
Wills: Mistake in execution
Mistake as to nature of the document; will invalid
Wills: Mistake in the inducement
Testator is mistaken as to facts; no relief
E.g., T thinks child is his of T's own accord, no on told him; kid isn't
Will won't take effect unless condition takes place ("If I during my trip...")
Wills: Proxy signature
Allowed if at Testator's direction and in his presence
Wills: Witness requirements
- Must see doc (don't need to know it's a will)
- Can sign before T does, so long as it's a part of one continuous act
Wills: Effect of being an interested witness
You can get gift, but not more than your intestate share (unless corroborated by disinterested, credible witness)
Physical attachment to a will, not usu. valid
Wills: Incorporation by Reference
Allowed; instrument references another doc in existence and sufficiently ID'd in will
Act of Independent Significance
Will valid for some reason independent form role to distribute property (e.g., employee list)
Amendment to will; must meet req's of regular will
Divorce effect upon will
Ex-spouse treated as though he predeceased testator
Testator took action that showed intent to revoke will, expressly or impliedly
Partial revocation of will by physical act
Not possible in Texas; all or nothing
Revocation effect on copies on will
Revocation of one executed copy by physical act = revocation of all copies
Presumption when estate can't find will when will was in testator's possession
- Presumed it was destroyed; rebutted by extrinsic evidence
- 1) evidence that a will existed in the first place;
- 2) what happened to the will; and
- 3) the intended disposition of the will.
Bring will back to life; 2 new witnesses needed w/ appropriate formalities
Republication of will
Reincorporation by reference of will (T makes will 1, revokes it, makes will 2, makes codicil saying "codicil in addition to will 1.")
Dependent Relative Revocation
Testator has valid will then revokes to make alternative (invalid) disposition; the first will remains in effect
Types of Distributions under a will
- Demonstrative ($100,000 from sale of house);
- General ($100,000 from will);
DEBTs are collected in reverse, collecting personal before real in each category
- Testator gives inter vivos gift:
- (1) wills says it was satisfaction at time;
- (2) testator notes in contemporaneous writing; or
- (3) or beneficiary recognize its satisfaction in a later writing
- Advance on intestate share; inter vivos gift meant in lieu of intestate share
- Proven by testator (contemporaneous) or beneficiary's (later/contemporaneous) writing
Increase in estate property
- Before death: Goes to estate
- After death: specific: goes to beneficiary; general/demonstrative: general estate
Exoneration: Common law
Estate pays of encumbrance on property
Sept. 1, 2005
Exoneration: Texas Current Law
No exoneration unless will says so (wills after Sept. 1, 2005)
Beneficiary predeceases testator; gift lapses
120 hour rule
If beneficiary does not outlive testator by 120 hours, he is said to have predeceased testator
Beneficiary predeceases testator and is descendant of testator or his parent, no lapse; passes to beneficiary's descendants
- Filed w/in 9 mos of death;
- Filed w/ ct. and personal rep;
- Can be partial;
- Is irrevocable
Child not mentioned in will who was born/adopted after will execution
Pretermitted child: Claim to estate
- Entitled to intestate share UNLESS:
- Will disinherits child;
- Transfer to child outside will;
- Provision made for ≥1 child living at time of will, PC gets equal share to living children
Charitable trust difference
- Don't require ascertainable beneficiaries;
- AG enforces on behalf of public;
- Must be created for charitable purpose;
- Cy pres allowed to reform purpose of trust
Requirements for Valid Trust
- Ascertainable beneficiary;
- Proper purpose;
- ID'able corpus;
Trust creation capacity
18 and of sound mind
Trusts: Settlor retaining too much control
Manifestation of intent w/ putting res in trust; no specific language needed (but don't be wish-washy)
Effect of Beneficiary of Trust being the Trustee
Not allowed UNLESS there are multiple beneficiaries
Trusts: Class gift problems
≥1 person of class must be definitely ascertainable
E.g., "To my friends" ≠ valid trust because we don't know who "friends" are
Mechanics of Creating Trust
Settlor declares he holds property in trust for certain beneficiaries; splits legal and equitable title
Trust created through will
Property in estate "pours over" into a trust created by Testator inter vivos
- Expressly granted
- Invade principal
Trustee delegating his powers
Nope, unless for a short time
Co-trustee voting requirements to take action
- Majority; unanimity not required;
- Co-trustee has duty to prevent breach by other co-trustees––trustee should not participate in transaxn and express dissent in writing
- MAD CaRL
- Make trust property productive;
- Account (to ct every 12 most, to B when requested [within reason]);
- Collect/preserve/segregate trust corpus;
- Reasonably invest (reasonably prudent investor);
- Loyalty and care
Remedies against Trustee
- Damages from breach;
Trustee Liability to 3d Parties
- Trust can't be sued or sue; Trustee must do both
- On K: Sue trustee; trustee can seek indemnity or reimbursement if K was proper and breach wasn't result of trustee's duty
- On tort: Personal liability from tort committed by Trustee in the course of administration; collectable from trust corpus
Beneficiary of trust ability to bring suit for trust
- Trustee won't;
- Trustee knowingly participated in causing loss to trust;
- Trustee has abandoned trust
Trust: Apportionment: Income
- Cash Dividends: Treated as income (to B);
- Stock Dividends: Treated as principal (to remainderman);
- Wasting assets [property depleted by its use, e.g., lumber]: Remainderman gets hosed, so treat all fairly, separate between corpus and income
- Ordinary: Charged to income
- Extraordinary: Charge to principal
Trusts: Transfers of Beneficiary Interest
General rule: Freely transferable, creditor can attach trust interests
Trustee has discretion to determine what beneficiary gets; beneficiary cannot force testator to exercise discretion
Beneficiary can't transfer his interest, but creditor can't reach trust (can only get beneficiary's distributions after they're made)
(Government can get to trust)
Trust: Modification by Settlor
Revocable trust: Can modify (but too much = trust fails)
Trust: Modification by Beneficiary
Can't do it UNLESS he can show special circumstances for modificatino that does not harm purpose of trust or other beneficiaries; court can approve
If revocable, terminable (if not, not terminable);
Trust: Termination by Beneficiary
If all beneficiaries consent and early termination doesn't violate a material purpose of trust
If settlor had general charitable purpose and original purpose is unattainable/fulfilled, ct. can change purpose to keep trust alive
Trust fails, returns res to settlor or his estate
Avoids unjust enrichment
Purchase money resulting trust
Pay money and title goes elsewhere (if to a child, presumed gift; if not, presumed PMRT)
E.g., A buys car and pays purchase price and transfers title to C. If A can prove this wasn't a gift, C would hold title in PMRT, A can get car back to reunify title
Requirements to be guardian
- Good character;
- Not intebted/in lawsuit with ward
Types of Guardiance
- Of the person;
- Of the estate
Burden to require guardian
- C&C ev.: Ward is incapacitated and guardian is in his best interest
- Preponderance: That person selected is qualified to be guardian
Powers of Guardians of the Person
- Physical possession of ward;
- Determine domicile;
- Care and protection for ward
Powers of Guardian of Estate
Possess and manage all of ward's property (can't purchase or exchange prop., settle estate claim, or abandon worthless prop. w/o ct. order)
- Of the person: Duty of care (provide food, etc.)
- Of the estate: Duty to manage the estate as a reasonably prudent person
Guardian reimbursement rights
Reimbursed for necessary and reasonable expenses incurred in caring for ward or his estate
Allowed; at ct's discretion; paid from estate or special gov't funds
- Person: 5% of ward's gross income
- Estate: 5% of ward's estate paid out
Modification of guardianship
Any person acting in best interest of ward can commence modification proceeding; ward needs atty ad litem
Any person acting in best interst of ward can commence modification proceeding; ward needs atty ad litem
If ct finds by preponderance that guardianship isn't needed, ct. will terminate
Guardianship of person terminates when...
Capacity restored; suit to terminate is commenced; and ct orders
Guardianship of estate terminates when...
- Minor ward is 18;
- Estate of ward exhausted
Tax: Gross Income
All income, from whatever sources derived, including compensation, interest, rent, etc.
Death benefits paid by reason of death: Income?
Interest of gov't obligations (e.g., bonds): Income?
Compensation for injuries or sickness when P.I.: Income?
Meals/lodging furnished at convenience of employer: Income?
Gain of sale of residence: Income?
Nope; if personal and only extends to $250K [single] or $500K [married]
Tax: Ownership and Use Test
During 5 year period, owner must own/use prop. for >2 years in order to exclude gain on sale of residence
Illegal activities resulting in gains: Income?
Nope; unless scholarship depends upon student conferring benefit on school = income to FMV of svc.
Gifts to employees: Income
Yep; unless close familial relationship and context makes it look like a gift
Tax: Trade/Biz expenses
"Ordinary and necessary expenses" paid or incurred while carrying on biz: Deductible
Biz use of a home: Deductible?
Nope, unless it's "continuously and regularly" used for biz purpose
Education expenses: Deductible?
Yep, but only continuing education (e.g., CLE), not education needed to enter a trade (e.g., law school)
How big must estate be to be subject to estate tax?
Gift made in contemplation of marriage
Gift w/ condition subsequent (marriage)
TEXAS: Fault-based approach, breaker gets hosed
- Valid in Texas;
- Capacity to K;
- Voluntarily entered;
- Signed writing;
- Effective upon marriage
Requirements for Formal Marriage
- License (72 hour wait, unless good cause/armed forces);
- Before 30 days from getting license;
- Conducted by person authorized
Req'd for people <18 to get married
- 16-18: Ct. order or parental consent
- <16: Ct. order only
Requirements for Informal Marriage
- Agreed to be married;
- Lived together in Tex. as H/W;
- Represented they were married;
- No defined time: Longer = more likely; BUT, ceasing to live together before 2 years = presumption of non-marriage
Requirements for Declaration of Marriage
- Written and signed "declaration of informal marriage" w/ vital statistics office;
- Agreed to be married;
- Lived as H/W;
- Represented they were married; and
- Haven't been married to anyone else
- Minors can't do this
Impediment to marriage:
- One/both parties are <16 w/o ct. order: marriage void
- Both parties ≥16L marriage voidable
Voids incestual marriages
Void; not allowed in TEx.
- Marriage voidable if:
- Either party permanently at time of marriage;
- Pet'r didn't know of it;
- Pet'r hasn't voluntarily cohabited w/ impotent spouse since learning of it
- Marriage voidable if:
- Pet'r was under the influence and lacked capacity;
- Hasn't voluntarily cohabited since intoxicating effects ended
Marriage: Fraud, duress, force
- Marriage voidable if:
- Other party used fraud, etc. to induce;
- Pet'r hasn't voluntarily cohabited w/ party since learning of fraud/escaping duress/force
Marriage: Effect of lack of mental capacity
- Marriage voidable if:
- At marriage, one party didn't have mental capacity/understanding of nature to consent; AND
- Pet'r hasn't voluntarily cohabited w/ other party after capacity returned or pet'r should have discovered mental defect
Divorcees can't marry 3d party w/in 30 days after divorce decree; voidable if you do
Marriage never occurred, BUT cts can do just/right division of CP and award maintenance
Protects person who believes he's married but there's an impediment to marriage; gives rights he'd have had if validly married
Marriage: Cure of impediment
If parties continue to cohabit, automatically validly married
Protective Order: Temp. ex parte order
- Sworn application by party seeking protection; and
- Finding by court that there is clear and present danger of family violence
- Protects against domestic violence; extraordinary relief; no notice req'd to respondent;
- Enforced by contempt of court
Temp. Ex Parte Order: Duratin
20 days (unless extended by ct. sua sponte or upon petition)
Protective Order Requirements
- Family violence has occurred; and
- Will occur in the future;
- Ct must issue if it finds these
Effects of protective order
- Stay away provisions (including places);
- No comms;
- No harassing, annoying, embarrassing conduct;
- No firearm possession;
- no more violence; and
- No harming/threatening pets
Protective order: Duration
up to 2 years (or longer if respondent caused serious bodily harm to pet'r)
Protective Order: Enforcement
Arrest w/o warrant (copy must arrest w/o warrant if respondent violates provision of Order)
Marriage: Support Obligations
Each spouse must support the other
Spouse tort liability
Spouses can sue each other; not vicariously liable for each other's torts, but comm. prop. can be obtained by tort-creditor
Spouse: Rape exemption
Gone. No means no.
- Domicile of ≥1 spouse in texas for >6 mos prior to divorce OR in county for 90 day period; AND
- Valid marriage
Divorce: Personal Jx
Not req'd unless seeking an in personam judgment
Divorce: Long arm
- If pet'r is resident of Tex. at time suit is file, ct. can have personal jx. over nonresident if:
- Tex. was last marital residence of the parties; and
- Pet. was file w/in 2 years since couple ceased having marital residence in Tex.
Divorce: Waiting period
No sooner than 60 days after pet. was filed
Divorce: Temporary Orders
Orders during the pendancy of divorce; prevents spoliation, concealing property, spending more money than reasonably necessary
Sua sponte or by agreement
Ct. may order parties to counseling; if ct. believes reconciliation is possible, it can continue the proceedings and direct parties to continue counseling for up to 60 days
Divorce: Collaborative law process
Wretten agreement to engage experts, advisors, and professionals to serve in neutral capacity; avoids battle of experts (but if it falls apart, each side has to get new attys and go to court)
Divorce: Right to jury trial?
Divorce: Grounds: Fault
- Abandonment (left for ≥1 year);
- cruelty (needs course of conduct rendering marriage intolerable);
- felony conviction w/ prison ≥1 year
Divorce: Grounds: No-fault
- Insupportability ("Discord or conflict destroying legitimate ends of marriage w/ no expectation of reconciliation");
- Living apart for ≥3 years;
- Confinement in mental hosp. for ≥3 years
Divorce: Property Division
Must be just and right having due regard to both parties and any children thereof (doesn't mean 50/50)
Just and Right Division: Factors
- Main factors:
- Earning capacity;
- Bax consequences;
- Benefits innocent spouse would enjoy if marriage had continued
Divorce: Atty fees source
Divorce: Jury verdict in property division
Advisory only! Ct. has ultimate say.
Parties can agree to property division and submit it to court; court can accept or schedule a hearing, it cannot just modify the agreement
- Allowed by ct decree or agreement;
- Payor has committed family violence ≤2 years divorce pet.;
- Marriage ≥10 years;
- Spouse can't meed reasonable needs;
- Unable to earn sufficient income to provide for min. reasonable needs because of disability; OR
- Custodian of child who needs substantial personal supervision due to disability and spouse can't earn sufficient income to provide for min. reasonable needs because of it
Spousal Maintenance: Factors for awarding
- Ability to provide for min. reasonable needs;
- Education/skills/time needed to get them;
- Duration of marriage;
- Contribution to spouse as homemaker;
- Marital misconduct
Spousal maintenance: Limitations on Payments
Less of $5000 or 20% monthly gross income
Spousal maintenance: Duration
- ≤20 years: 5 years;
- 20≤30 years: 7 years;
- >30 years: 10 years max
Spousal maintenance: Mod/termination
Upon motion and proper showing of material and substantial change of party to marriage or child
Spousal maintenance: Enforcement
Contempt and garnishment of wages
Rights of illegitimate children
- Right to support if legit children have support;
- Right to inheritance from mom and bio-dad
Establishing mother-child relationship
- Woman gave birth to child;
- Adopted child;
- Had maternity adjudicated
Establishing Father-child relationship
- Unrebutted presumption;
- Consented to IVF and baby results
Presumptions of Paternity
- Married during conception/birth;
- Married after birth and man voluntarily listed as factor, record filed w/ state includes this assertion, or man promised to support child as his own;
- During first two years of child's life he is in same house and holds child out as his own
SoL for establishing parent-child relationship
- No presumed father: Indefinite;
- Presumed father: 4th birthday unless lack of access (didn't live together nor had sex during conception time) OR mistaken paternity (presumed dad mistakenly believed he was bio-dad based upon misrep)
- Lack of Access/Mistaken Paternity: Indefinite
Establishing parent-child relationship: Standing
Child, mother, man wishing for adjudication of paternity, gov't agency, auth. adoption agency, person related to mother w/in 2° of consanguinity, or intended parent
Custody/control of child (religious, moral, and educational decisions); discipline; support and provided w/ needed clothes, food, shelter, medical and dental care, and education
- Suit affecting parent-child relationship;
- Managing or possessory conservator appointed, access to child established, or termination requested
Parent; gov't; person in actual care, control, and possession ≥6 mos (or ≥12mos for fostered kids); or relative w/in 3° consanguinity
Can request managing conservatorship to protect kids' health or emotional development
CANNOT file the suit, must join existing suit
Termination of parental rights
- Termination ≠ no support obligations
Req's for voluntary termination
- Signed >48 hrs after birth;
- Two credible witnesses;
- Adults can adopt (married or unmarried);
- Look to child's best interests
Adult adoption allowed?
Who must report child abuse?
Anyone w/ cause to believe child's physical/mental health has been affected by abuse/neglect must report immediately
Professional's requirement to report child abuse
NOT PROTECTED BY PRIVILEGE; must report w/in 48 hours
Physician duty to report child abuse
Must report to CPS and refer minor to them for svcs/intervention.
Managing conservator rights
Make maj. decision about child
Joint managing conservatorship
Sharing rights to child
Primary managing conservator
Chooses primary residence of child (can be limited by ct. to specific geographic area)
Right to possession of child, other rights are limited
Favored parties to be managing conservators
Parents; ct. must appoints parents unless it's not in child's best interest due to impairment of child's physical health or emotional development
Rebuttable presumption that parents are in the best interest of the child
Std. Possession Order (SPO)
Rebuttably presumed to be in best interst of children >3 years (<3 years, ct. will grant possession as needed under circumstances)
Agreed parenting plan
Parents can agree to plan; ct. will approve or set hearing, can't just modify agreement
Conservatorship: Jury trial?
- Allowed w/ respect to conservator appointment;
- Which managing conservator will be primary; and
- Whether there will be geographic limits
JNOV req'd: Can't just reject jury findings, must order new trial if verdict is against the great weight of the evidence
CAN'T have jury for child support or specific conditions of child possession/access
Grandparent/3d party rights to children
Ct. can order reasonable possession/access to GP if GP overcomes presumption that parent acts in best interest of child by preponderance that child's mental health/physical well-being will be harmed w/o possession
Grandparent rights to children: standing to bring suit for access
Bio-GPs have standing to request access
Enforcement of Possession order for child
- Habeas petition:
- File verified application to take custody of child;
- Heard on next judicial day after writ is executed; and
- Ct. finds applicant for writ is entitled to possession;
- Court shall return child to applicant
Child support: Limits
20% (+5% per each child up to 40%) of net resources UP TO $7500 of obligor's income
(e.g., if obligor makes $21,000/mo, his max support for one child will be $1,500 [20% of 7,500])
Child support: Medical support
- Must carry child on his ins. or reimburse obligee;
- Cost of complying is not calculated in net resources
Effect of failing to pay support upon possession of child
Nothing––can't deny access for failure to pay
Child support: Income withholding
Ct. must order but obligee needn't enforce
Child support: Duration
- Later of 18 years or high school graduation;
- Indefinitely if child is disabled
Child support: Retroactive
Allowed, but usu. not for longer than 4 years previous
Child support: Enforcement
Needs personal jx.: Garnishment, any means ct. can use for judgment on debt
Interstate Family Support Act: Long Arm
Indiv. had sex in Texas and child was conceived here, but he's never returned; has jx.
Interstate Family Support Act: Continuing jx
Once a state has jx, it continues until both obligor and obligee leave Texas
Interstate Family Support Act: Enforcement
Crosses state lines; direct enforcement allowed (no ct. order needed to garnish)
Uniform Child Custody Jx. And Enforcement Act: Home State Jx.
- Child lived w/ parent in state for ≥6 most (if ≤6 mos, since birth); then
- No other state is child's home and ≥1 parent has "significant connection" w/ Texas; then
- No other home state, no substantial connections, but Tex. is more "appropriate forum jx."; then
- No other state would have jx. under above stds (vacuum jx)
Uniform Child Custody Jx. And Enforcement Act: Declining jx
Any court can decline jx., will drop to next possible jx. on list
Uniform Child Custody Jx. And Enforcement Act: Continuing jx.
Once state has jx, it keeps it until neither child nor obligor nor obligee live in state (unless they consent to state's jx)
Uniform Child Custody Jx. And Enforcement Act: Temp Emergency Jx
- Child in state and has been abandoned; or
- Child/sibling/parent is subjected to/threatened with mistreatment/abuse
Uniform Child Custody Jx. And Enforcement Act: Interstate Enforcement
Other state's custody order can be enforced in Tex. if registered; Tex. ct. can grant any relief available under Tex. law to enforce registered child custody determination
Liberally-construed law to protect consumers against deceptive acts by any seller
Person who seeks or acquires goods or services by purchase or lease (unless a biz w/ gross assets of ≥$25M)
DTPA: Prof'l services
No DTPA for jobs whose essence is providing advice, jgmt, opinion, or prof'l skill; applies to attys, physicians, and accountants
When does DTPA apply to prof'l services?
- Express misrep of material fact not qualifying as advice, etc.;
- Failure to disclose information in order to induce consumer to enter transaxn;
- Unconscionable actions;
- Breach of express warranty
Does DTPA apply to PI?
Nope (can get mental anguish, though).
DTPA: Transaxns w/ Ks' for >100K
- DTPA doesn't apply if:
- K relates to transaxn costing >$100K;
- Consumer repped by atty (not provided/suggested by ∆);
- K doesn't involve consumer's residence
DTPA: $500K agreement (no K needed)
- DTPA won't apply if:
- Transaxn >$500K; and
- Doesn't involve consumer's residence
Advertising publisher's liability under DTPA for the ad of an advertiser?
Anyone who violates DTPA so long as goods/services form basis of complaint and ∆ acted in connection w/ consumer transaction
DTPA: Privity requirement
- Nope, unless:
- Signed (by consumer) writing;
- Not in disparate bargaining position;
- Consumer repped by atty (of his own choosing);
- Waiver conspicuous, bold, 10 pt; and
- Title "Waiver of Consumer Rights"
DTPA: Cumulative remedies allowed?
Yep; DTPA provisions not exclusive and can bring along w/ other laws/CoAs; can't recover under DTPA and another law for same act
- Laundry list;
- Breach of express/implied warranty;
- Unconscionable actions;
- Violation of Ch. 541 of the Tex. Ins. Code
Main DTPA laundry list provisions
- (5) repping that g/s have characteristics/benefits they don't have;
- (7) repping g/s are of particular std, quality, or grade, when they are of another;
- (12) repping that agreement confers rights, remedies, or obligations it doesn't confer;
- (22) repping that work/svcs were performed when they weren't;
- (24) failing to disclose info w/ intent to induce the transaxn consumer couldn't have entered w/ the information
Warranties under DTPA
- DTPA doesn't create, allows CoA under:
- UCC warranties of merchantability/fitness for particular purpose;
- Warrant to repair in good and workmanlike manner
Act/practice that takes advantage of lack of knowledge, experience, ability, or capacity to a grossly unfair degree
DTPA: Statutory defenses
- Obtained repped info from official gov't records;
- Obtained from another source (e.g., mfg tells dealer car gets 30 mpg when it doesn't);
- Concerning test req'd by gov't agency
DTPA: Producing cause
Substantial factor that brought about the injury and w/o which the injury would not have occurred (no need for foreseeability, though)
2 years after discovery/should have discovered false/misleading act occurs
Extended by 180 days if consumer proves delay was caused by ∆'s knowing conduct calculated to induce consumer to refrain from filing suit
- 60 days written notice:
- Detailing specific complaint; and
- Damages for and atty fees to date
- Not needed if <60 days from SoL running or claim asserted as counterclaim
Effect of failing to give proper notice for DTPA claim
∆ files plea in abatement w/in 30 days of original answer; suit must be abated until proper notice given
Either party can file mot. to compel mediation; if <$15K, moving party must pay costs
DTPA: Mediation request deadline
W/in 90 days from service of pleading seeking relief
DTPA: Settlement offer deadline(s)
W/in 60 days after filing suit; THEN w/in 90 days after answering; THEN w/in 20 days after mediation concludes
DTPA: Settlement offer contents
Offer to pay damages and reasonable atty fees incurred to date
DTPA: Settlement deemed rejected after ____ days after tender w/o acceptance.
DTPA: Effect of rejecting settlement offer
If it goes to trial and damages = or substantially =, or are more than dmgs found by trier of fact, π recovers the lesser of damages tendered in settlement or found by trier of fact
Can limit atty fees, too! If amt is =, substantially =, or more than offered amount
Economic, mental anguish, trebled
DTPA: Economic Damages
Compensation for pecuniary loss (including costs of repair/replacement)
DOES NOT cover punitives, P&S, mental anguish, loss of consortium, physical impairment
DTPA: Mental anguish damages
Available if ∆ acted knowingly/intentionally
DTPA: Treble damages: Knowing
Treble economic damages and then mental anguish damages
DTPA: Trebled damage: Intentional
Trebled economic damages AND Trebled mental anguish damages
DTPA: Atty fees
- π: Shall be awarded if π is successful;
- ∆: If successful and suit was groundless and brought in bad faith/harassment purposes, can get atty fees
Allow other specifically-noted statutes to be enforced under DTPA; allows recovery (and trebling) of actual damages
DTPA: Main tie-ins
- Health spa act
- Home solicitation act ($25/$100, three day cooling off period)
(Federal) Fair Debt Collection Practices Act
FDCPA: Applies to...
"Regularly engaged" collectors collecting on 3d party's behalf
FDCPA: Communications with 3d parties
- NOT allowed unless:
- To obtain debtor location;
- W/ prior direct consent of consumer;
- W/ express permission to ct.; or
- As needed to effectuate post-jgmt judicial remedy
FDCPA: Communications with 3d parties: Things they're not allowed to say/do
- Consumer owes debt;
- No more than one contact (unless person requests them to call back);
- No postcards about debt;
- No language/symbols to communicate collector is in collection biz; or
- Only contact atty once collector knows consumer is repped by one
FDCPA: Communications with consumer
- No unusual time/place;
- If knowledge consumer is repped by atty, must contact atty;
- If consumer's employment prohibits consumer from receiving such comms
FDCPA: Ceasing comms
Must stop if consumer notifies in writing that he refuses to pay debt or wants collector to stop
FDCPA: Debt validation
- Collector must give accurate notice about existence and amt of debt:
- W/in 5 days from call;
- Amount of debt;
- Name of creditor;
- Request w/in 30 days to verify will req collector to send verification;
- No answer w/in 30 days = validation of debt;
- If requested, will provide name of original creditor
FDCPA: Disputed debts
If consumer notifies collector w/in 30 days, collector must cease collection of debt until they validate the debt
Collector can't demand consumer pay immediately or take axn prior to end of 30 day dispute period
FDCPA: Prohibited conduct
- No harassment/abuse;
- No making threats;
- No false or misleading statements, or unfair pracices
Violator liable for atual damages and additional damages not to exceed $500
FDCPA: Factors for additional damages of up to $500
- Nature; and
- Intentionality of noncompliace
Bona fide error: violatio was unintentional and a bona fide error, notwithstanding procedures in place to avoid such violations
1 year from date act occurs
FDCPA: Effect on state law
Doesn't alter, annul, or affect anyone from complying w/ state laws!
Where underlying K debt was signed
FDCPA: Use of collectors real name
Required when calling; must ID collection services real name
Not just to 3d party debt to collectors and allows criminal penalties
TDCA: DTPA actionable?
TDCA: Bond req
Collectors must post ≥10K bond, send SoS copy
TDCA: Prohibited acts
Threats/coercion; Harassment/Abuse; Unfair/unconscionable means; Fraudulent, deceptive, or misleading reps
TDCA: Liability of creditor for 3d party collector
None unless knowledge it repeatedly or continuously engaged in violations of TDCA
- Criminal: $100–$500 per violation; misdemeanor
- Civil: Injunction; actual damages
TDCA: Atty fees?
Yep. Same as DTPA circumstances.
TDCA: Bona fide error defense
Yep; available to collector/creditor
Prohibits unfair competition in insurance and unfair/deceptive acts or practices
541: DTPA actionable?
541: Unfair competition
No misrepping policy Ks, false info/ads, defamation of insurer, etc.
541: Unfair/deceptive acts/practices:
- Misrepping material fact/policy provision at issue;
- No good-faith attempt to effectuate prompt, fair, equitable settlement of claim after its liability is clear;
- No prompt provision of reasonable explanation for reason of denial or offer of settlement;
- Failing w/in a reasonable time to affirm/deny coverage or submit reservation of rights; and
- Refusing to pay claim w/o conducting reasonable investigation w/ respect to claim
541: 3d party claims
Not allowed (e.g., person I get in a wreck with is dissatisfied w/ my ins. co.)
Any person suffering damages under the act
Actual, injunctive relief
541: Atty fees
Same as DTPA
Same as DTPA
Same as DTPA
541: Obtaining income tax returns
Not w/o court order
Unfair Claim Settlement Practices Act
- No misrepping pertinent facts/policy provisions;
- Can't fail to acknowledge w/ reasonable promptness comms relating to claim;
- No stds for prompts investigation for claim;
- Several others, see notes
Unfair Claim Settlement Practices Act: Enforcement
State Dep't may enforce
Prompt payment of claims
542: DTPA actionable?
542: Receipt of notice of claim
- W/in 15 days, must:
- Acknowledge receipt of claim;
- Commence investigation of claim;
- Request all times that insurer reasonably believes will be required from claimant
542: Notice of acceptance/rejection of claim
W/in 15 days of all items needed to secure proof of loss, notification in writing
542: Payment deadline
W/in 5 days of accepting claim
542: Delay in payment of insurance claim
For >60 days, insurer pays claim + 18% interest
Insurer Duty of Good Faith and Fair Dealing
First party breach: Insurer fails good faith attempt to effectuate fair, prompt, and equitable settlement of claim when insurer's liability becomes clear
3d party claims: Stowers Doctrine: If insurer rejects unconditional settlement offer in policy limits and case goes to trial, ins. co. must pay entire jgmt, even if outside coverage limits
What must LT and remainderman pay on land? (E.g., it's encumbered by a mortgage)
A person holding a remainder in a mortgaged property has a duty to pay the principal.
A life tenant has a duty to pay the interest on a mortgage.
However, the life tenant's duty is capped at: (1) rents and profits derived from a third person in possession of the property; or (2) the reasonable rental value of the premises, if the life tenant remains in possession of the property.
Conflicting dates between typed and handwritten dates on a negotiable instrument; is date still ascertainable?
Yes. The TX UCC states that the date for calculating the demand period is the handwritten date.
If method of calculating interest on a negotiable instrument is no longer ascertainable, is it still negotiable?
Yes. The interest will be obtained from TX UCC provisions that provide a default rate based upon the judgment's locale.
Requirements for negotiability
- Unconditional promise to pay;
- A fixed amount of money;
- To order or bearer;
- Upon demand;
- Without any additional undertakings; and
- Signed by the maker
Conditional indorsement effect upon a note's negotiability?
Deed of Trust
- A security interest given to a trustee that is generally treated like a mortgage;
- Trustee holds deed until debt is paid
Who can bring a cause of action on behalf of a decedent's estate?
Only a personal representative.
Self-proving affidavit: Witnesses sign the affidavit, but not the will.
Signatures operate as if they were on the will, but the will is not self-proving. It must thereby be proven by at least one witness attesting to the will in court.
If an SPA is attached to the will no further proof of its execution is required.
Wills: Animal bequests valid in Texas?
Requirements for non-judicial foreclosure
- Power of sale clause;
- Written notice of default;
- Opportunity to cure;
- 20 days prior to posting notice of sale;
- 21 days prior to sale, give notice to debtor and public;
- Hold the first Tuesday of each month at the county courthouse, between 10 and 4
Types of Notice for Notice State
Rights of a Mineral Interest Owner to the Surface Estate
Ingress and egress
- Existing use;
- Reasonable alternative;
- Available on-tract
Date surface destruction test gave way to ordinary and natural meaning test:
June 8, 1983
Standard of Review of Trial Court's Property Division in a divorce:
Abuse of discretion
Types of Royalty Interests
- (1) the landowner’s royalty paid under the terms of a lease;
- (2) the nonparticipating royalty interest (NPRI); and
- (3) the overriding royalty
the nonpossessory right to a share of production free of the costs of production.
Nonparticipating royalty interest
- Entitles owner to stated share of production;
- No rights to delay rentals or bonus payments
Overriding royalty interest
Used to compensate workers who perform services related to the property of the lessee
- Allows a lessor to limit the lessee’s pooling power;
- It does not prevent pooling, only modifies the amount of acreage that can be held by a pooled well;
- Severs the lease into acreage held by the pooled unit well and unpooled acreage.
Dry Hole Clause
- Related to rent payments in the event of a dry well;
- If well is unproductive, lessee can maintain lease by paying delay rentals.
Are royalty interest owners subject to production costs?
No. HOWEVER, if lease has "at the well" language, they may be liable for non-production costs, such as the cost of transportation, marketing, and compressing the gas once it has reached the surface.
Requirements for the Notice before foreclosure
- Written notice;
- State the earliest time at which the sale will begin
Must non-judicial foreclosure sales result in a fair price?
Nope. Judicial sales must.
If land is located in two counties, where must notice be posted?
In both counties.
Invalidating a foreclosure sale
- May only occur if the deficiency of the sale is egregious enough to overturn the sale;
- Must look to interests of the innocent 3d party buyer;
- EXTREMELY difficult to overturn the sale
Warranties included in a general warranty deed
Seller warrants that no title defects have occurred during her ownership of the property and no defects in the chain of title
Warranties included in a special warranty deed
Seller warrants that no title defects have occurred during his ownership of the property (no warrant of no defects in chain of title)
Warranties included in a quitclaim deed
None, he only conveys whatever interest he may have.
Is a trustee's deed a general, special, or quitclaim deed?
- It depends upon the circumstances of the sale and is fact-specific.
- If it occurred at a foreclosure sale, it's likely a quitclaim deed.
Types of remedies under UCC breach of K
- Expectation damages
- Incidental damages
- Consequential damages
- Specific performance
- If nonconforming goods:
- Damages = value of goods contracted for - value of goods received
Can also recover for amount of cost to repair nonconforming good received
UCC applies to contracts for the sale of goods over:
Cost associated with obtaining replacement goods (e.g., you're sold a nonconforming truck; you can get the costs associated with looking for a conforming truck)
Additional losses that occur as a direct result of the breach.
UCC: Specific Performance
- Parties must perform the contract as agreed;
- Hard to get, good must be unique, etc.
- Available in cases of fraudulent misrepresentation;
- Allows the contract to be "undone"
After probate has commenced, homestead is set aside for the benefit of the surviving spouse for her lifetime
Intestacy: Community property division if non-marital children exist
- 50% to spouse
- 50% per stirpes to children
Intestacy: Personal property division
- 1/3 to spouse
- 2/3 to children
Intestacy: CP division if no non-marital children
100% to spouse
Validity of SPA from other jurisdictions
Court can refuse to allow the SPA into evidence and require witnesses to attest to the will; BUT, court can accept the SPA, too, if it's properly executed under the laws of the other state
Liability of Limited Partners in LPs
Cannot be held liable for partnership obligations beyond the amounts they contributed to the partnership
Liability of General Partners in LPs
Unlimited; can seek indemnity for the LP, though, if liability incurred in the ordinary course of business.
LLP relation to GP
Like a GP in taxation status and management, but liability of partners is limited
Mixed-character marital property
Marital property acquired with both community and separate funds; it is divided pro rata according to the portions of CP and SP used to acquire it.
Ways to acquire personal jx. in Texas Paternity Suit
- Person served while in Texas;
- Person has sex while in Texas and the child may have been conceived as a result
SoL on Paternity Suits
- 4 years: If child has presumed, acknowledged, or adjudicated father.
- Indefinite: If child has no presumed, acknowledged, or adjudicated father.
Persons who can bring suit to establish child paternity
- The child;
- Mother of the child;
- Legal representative of an authorized person who is deceased, incapacitated, or a minor;
- A person related w/in 2° of consanguinity if the mother is dead
Can a court order genetic testing?
- Yep. Failure to submit can lead to:
- Contempt citation;
- A fine; or
- The court adjudicating his paternity
99% rule and genetic testing
A rebuttable presumption of paternity is created if the DNA results are 99% certain.
- Can be rebutted by presenting other testing that excludes him as the father; or
- Present another man who could be the father; or
- Saying the test used is not one generally relied upon by experts in the field
Presumption in regard to substantial gifts bequeathed to minors
A donor may not wish the minor to have full use or control of the bequest until they reach the age of majority
Custodian of substantial bequests to minors
- Only one custodian for each gift;
- Gift must be placed in an account in the custodian's name, on behalf of the minor;
- Any adult or a trust company;
- Must manage and invest property as a reasonably prudent investor;
Requirements to request guardianship
- Application filed for *each* ward in the proper county––single guardianship of two or more wards is improper;
- The ward must have an attorney ad litem;
Venue for Guardianship Proceedings
- The county in which both parents reside;
- County in which the sole managing conservator resides;
- County in which the joint managing conservator who has greater period of possession of the children
Requirements to bring derivative action
- Shareholder must hold shares at the time of the action;
- Shareholder must adequately represent the interests of the corporation;
- Notice of the claim 90 days before filing unless demand rejected or irreparable harm will result
Bank has a duty of _________________ in regard to detecting forgeries.
If customer does not discover a forgery within _____________, the customer is not entitled to reimbursement.
Non-possessory (but not ousted) Co-T's duty to pay taxes:
The non-possessory co-T has to pay taxes on the land, but they are offset by the value the possessory co-T had in the land.
E.g., Pco-T pays $100 in taxes on land, but derived $50 benefit from land. NPco-T must pay $25.
Minor enters contact, then disaffirms the K. Can minor ratify the K when he reaches majority w/o additional consideration?
Mother Hubbard Clause
- "Lease includes all land owned by lesor adjacent to the land";
- Purpose: Pick up small strips of land not specifically included in granting clause;
- Doesn't pick up large tracts
- Payment to maintain an oil and gas lease after the end of the primary term;
- Only paid on wells capable of producing
Are NPRI's entitled to shut-in royalties?
- Agreements for how to divide payments between interest-holders;
- Binding until revoked;
- Protects payor from double liability––hosed interest holder can't sue payor, must sue party who took too much payment
Implied covenants in O&G lease
- Against drainage;
- To market;
Implied covenant to protect against drainage
MIO can't buy two tracts and drill on one and drain yours
Standard MIO must act under
Reasonably prudent operator
Implied covenant to market
- Must find good price for minerals;
- No self dealing;
- Can't sit on lease and pay shut-ins
Implied covenant to develop
Must act as a RPO regarding development
e.g., can't drill one well on 500 acres when multiple wells could be drilled
Illegitimate child can't inherit unless
- Unrebutted presumption of paternity;
- Acknowledgement of paternity;
- Adjudicated paternity;
- Established in probate proceedings by C&C
Warranty of habitability in Texas?
Nope. LL must repair conditions that materially affect health and safety of tenant (or tenant can use constructive eviction).
Warranty of suitability in Texas?
For commercial leases, yes; covers latent defects in the essential facilities of the property
Latent v. Patent Defect
- Latent: Can't be discovered through reasonably thorough inspection of the property
- Patent: Defect can be discovered in reasonably thorough inspection
Can fixture be removed by tenant?
- Degree of attachment;
- General custom;
- Degree of harm to premises if removed;
- Trade fixture (can always be removed).
- Must be removed before lease is up (or reasonable time thereafter)
Remedies for failing to convey marketable title
- Notify seller and give reasonably time to cure;
- If not cured: rescission, dmgs, specific performance
Order of proceeds application from foreclosure sale
- Cost of foreclosure (including atty fees);
- Foreclosed mortgage;
- Junior interests;
- Mortgagee (if deficient, get deficiency judgment)
Installment land K
Pay off mortgage as you go; if you miss a payment, they can take property back immediately
Installment land K: Effects of default
- Seller must give buyer notice of prospective forfeiture;
- Must give 60 days to cure
- Court can award for earning potential rather than actual earnings if it believes obligor spouse is intentionally underemployed;
- Obligee spouse must show evidence obligor is intentionally underemployed (e.g., spouse is making substantially less than before divorce);
- Obligor spouse must show that underemployment was not intentional
If spouse uses separate property to buy property, but puts it under both spouse's names, is it still separate property?
Nope. Presumed a gift to the other spouse and thereby gives each 1/2 of the property as separate property.
Requirement to ignore statutory limit for child support
- Must give specific findings of fact as to why the statutory mandate is being ignored.
- Special needs of the child;
- Both parents' abilities to support the child
Deed requirements for valid conveyance
- Adequately describe property;
- Signature of conveying party
Deed requirements to be recordable
- Valid deed;
- Witnessed or acknowledged by notary public
Homesteads are still subject to
- Purchase money mortgages,
- federal tax liens,
- unpaid property taxes on the property,
- mechanics' and materialmen's liens on the property if in writing,
- loans to enable divorce, and home equity loans for up to 80% of the property
Production in paying quantities
roceeds from selling the oil or gas – the operation costs – taxes = positive figure
Need PPQ in order to obtain royalty interests?
Nope. Royalty interests are obtained before production costs are deducted.
Three types of probate
- Independent executor,
- Dependent executor, and
- Muniment of title
Muniment of title
- Small estates (<$50,000 with no debt);
- Easiest way to settle the estate
- - Same power as a dependent administrator;
- - Must file an application for letters testamentary; and
- - Post a bond within 20 days of the letters being issued.
- - File inventory w/in 90 days;
- - Give notice to named B's w/in 60 days;
- - Post notice for all creditors w/in 30 days;
- - Must give accounting w/in 15 months of issuance of letters testamentary and every 12 months after that
- (Absent clear distinction otherwise, person named in will should be executor)
- Most difficult administration type;
- Can do everything dependent administrator does, but must first get court permission
What must be included in a mortgage?
- At a minimum:
- the identity of the parties (the mortgagor and mortgagee),
- the intent to create a security interest, and
- a description of the property.
3 rules for acts outside statement of purpose:
- Ultra vires k's are valid;
- Shareholders can seek injunction;
- Responsible officers and directors are liable to corp for losses
Preemptive rights date
Sept. 1, 2003
Two ways BoD act is valid
- Unanimous written and signed consent to act w/o meeting;
- Meeting satisfying quorum and voting rules (quorum present, majority vote)
BoD: Nonfeasance liability
Only liable if breach of duty caused loss
Board hurts corporation through affirmative act, BUT protected by BJR
Court will not 2d guess decision made in good faith, informed, and with rational basis
BJR doesn't apply when:
- Interested director transaction deal b/w the corp and director;
- Competing ventures;
- Corp. opp.
UNLESS deal was fair/material facts disclose AND disinterested D's approved
How director is not liable for misfeasance:
- Voted against act;
- Put it in writing (either in minutes or leter to corp. secretary)
Indemnification of Directors
- None: if liable for willful/intentional misconduct;
- Mandatory: D is wholly successful on merits
- Permissive: Anything not above
S/h mgmt of corp when
- Close corp;
- Art or unanimous s'holder agreement provides for s'holder mgmt
Right of s'holder to inspect books
- Owns stock for at least 6 mos or has ≥5% of oustanding shares;
- Written demand stating proper purpose;
- If corp doesn't allow, s'holder can get ct. order and recover expenses/atty fees
Fundamental change requirements
- Board approval; AND
- 2/3 s'holder vote
- (Allows dissent and appraisal unless on nat'l stock exchange or ≥2000 shares)
Dissent and appraisal
- Written objection before vote and intent to demand payment;
- Abstain or vote against; AND
- Written demand to be bought out w/in 20 days
Corp. Dissolution requirements
- Written consent of s'holders; OR
- Board res. and 2/3 s'hodler vote; THEN
- Send notice of dissolution to creditors
Presentment Warranties for Negotiable Instruments
- (1) Warrantor could enforce draft at time of transfer
- (2) No alterations
- (3) No knowledge that signature of drawer is unauthorized
Transfer Warranties for Negotiable Instruments
- (1) Transferor is entitled to enforce instrument
- (2) All sigs are authentic and authorized
- (3) No alterations
- (4) Not subj. to defense
- (5) No knowledge of any insolvency proceeding against maker
Drawers can sue for breach of __________, not __________.
Presentment warranties; transferor warranties.
Perfection without security agreement
"Pledge" collateral; creditor takes possession of the collateral––no security agreement is needed.
When can trustee designate new beneficiary without a hearing?
When it's a charitable trust and the beneficiary fits with the material purpose of the trust (still must notify the AG)
Father knows of child and supports the child as though child was his, but no official acknowledgement, adjudication, etc. Is he father?
Yep. Paternity established.
Paternity by Estoppel
Man voluntarily assumes child support for the care of the child.
Requirements for a new partner to join
Is notice required for the annual BoD meeting?
Is notice required for a special meeting of the BoD?
- Yep; reasonable notice required.
- Needs time, place, and date of meeting. Not purpose (purpose only needed for s'holder meeting).
- Vote w/o notice are invalid.
- WAIVED if all board members show up.
- Called by 10% of shares, or bylaws.
- Notice given to all s'holders w/in 10-60 days before meeting
Notice through email or other means okay?
If in the bylaws.
Requirements for valid board vote:
- Quorum (even if one walks out);
- Majority vote yea.
E.g., 7 directors. 4 show up. Quorum present. One leaves before vote. 2 vote yes, 1 votes no. Valid action (although there is some unsurity about this).
Is a board member who shows up just to contest validity of the meeting counted in a quorum?
Presumption when a will is ambiguous between a more permanent estate (e.g., F.S.A.) and a more limited estate (e.g., LE).
The more permanent disposition will be gone with, usually.
All to SS.
- 1/2 to SS
- 1/2 to children, per cap w/ representation
Personal SP divided?
- 1/3 to SS
- 2/3 to descendants
Personal SP divided?
- 1/3 to SS
- 2/3 to children per cap. w/ rep
Personal SP divided?
- All to SS
- None to other heirs
Real SP divided?
- 1/3 LE to SS
- 2/3 to children per cap w/ rep; 1/3 in remainder
Real SP Divided?
- 1/3 LE to SS
- 2/3 to children per cap w/ rep; 1/3 in remainder
Real SP divided?
- 1/2 to SS in FS
- 1/2 to parents
Real SP divided?
- 1/2 to SS
- 1/2 to parents' descendants (brother)
Real SP divided?
100% to SS
100% to children, per cap. w/ rep.
100% to kids, per cap w/ rep
(In this case Y and Z get 1/3 each, C gets 1/3 (but if C had brother, each would get 1/6))
1/2 to each parent
- 1/2 to living parent
- 1/2 to collaterals, per cap w/ rep
100% to descendants of collaterals, per cap w/ rep
- 1/2 to maternal side
- 1/2 to paternal side
Will administration preference
- Named executor
- Surviving spouse
- Primary beneficiary
- Any beneficiary
- Next of kin
- Surviving spouse
- Next of kin
How can a trustee purchase trust property from the trust?
- "Reasonable" compensation;
- 5% of trust assets has been found to be reasonable;
- 1/2 from corpus, 1/2 from principal
Considerations of reasonably prudent investor standard
- Economic benefits;
- Long term benefit to trust portfolio;
- Effect of purchase on overall portfolio
Breach of Duty: Can liability be abolished in corporate docs?
Nope. Can be indemnified.
Indemnity of Directors
- Must: O/D sued in his capacity and is completely successful
- May: Any other act *not resulting from willful or gross neg*
- Can't: Acts resulting from willful or gross neg
Lease document requirements
- Names of the parties;
- Duration of lease;
- Date rent is due;
- Amount of rent
(Notarization, etc. not required)
Tenant right to ED condemnation proceedings
None. But, may be able to get reduced rent to compensate for his loss of use of the leasehold.
Can buyers break a lease and get rid of tenant on land they're interested in?
Yes. If tenant is behind on lease, or hurting the property in such a way so as to hurt the property value.
Debt collection: MiniMiranda
First communication from creditor must state that the communication is from a debt collector and that any information obtained may be used to collect the debt.
(All subsequent comms must include this, too)
Proportionate reduction clause
"If the owner owes less than he conveys, his payment will be reduced proportionately."
RRC regulates the Rule of Capture to protect:
- Correlative rights;
- Prevent waste;
- Protect the environment
RAP avoidance in O&G lease
"Top lease must vest w/in 21 years." Lessors are usually happy to grant that.
Contract for will
- Valid contract;
- Reference in the will stating K exists and K's material provisions
Dishonor occurs when
- Proper presentment for payment is made and refused;
- Notice of dishonor may be given by any reasonable commercial manner
Holder of negotiable instrument must meet 5 requirements
- Take instrument for value;
- In good faith;
- Without notice of dishonor;
- No notice of unauthorized signatures;
- No notice of defenses or claims
Transfer of negotiable instrument occurs when
Delivered by a person other than its issuer for the purpose of giving right to enforce the instrument to the person receiving delivery
Automatic stay prevents
- Enforcement of pre-bankruptcy judgments;
- Act to obtain possession of estate prop;
- Act to create/perfect/enforce liens on debts that arose before bankruptcy;
- Act to recover on claim against debtor on debt arising before bankruptcy;
- Setoff debt that occurred before bankruptcy;
- Proceedings in US tax court
Can principals partially ratify an act of an agent?
Nope. It's all or nothing.
Three ways to extinguish S/I through sale:
- SP authorizes;
- Garage sale
If an SP can't get secured collateral w/o a breach of peace, what should he do?
Cumulative voting formula
(Shares voting / (directors + 1)) + 1
(Adult) Guardianship application: Requirements of doctor's examination
- Applicant must file a doctor's report of the proposed ward created w/in 120 days before application;
- Must list specific facts for court to base its opinion on
Factors for granting JMC or SMC
- Presumption for JMC;
- Parties' working relationship;
- What children want (if over 12);
- Geographic distances;
- Relationship of all parties;
- Age of the child
Ways to invalidate a prenup:
- No fair notice of nature and extent of prop (didn't waive such notice and didn't have a chance to become knowledgeable about the prop); or
Considerations for property division
- Separate property;
- Earning capacity;
- Custody of children of the marriage;
- Family violence; and
- Fault of marriage breakup
Special s'holder meeting
- 10 ≤ 60 days' notice;
- Can only conduct biz that's in the cert
Required offices of corp
Pres. and sec. (can be same person)
Presentment party has right to require:
- Name of presenting party;
- Exhibition of the instrument;
- Full payment
Banks don't have to honor a check after _____.
Corp and LLC Cert. Requirements
- Stock information
- Agent: Name/Address
- Name (w/ corp)
- Organizers: Name/Addresses
- Directors? Number, names, addresses
- Shareholder agreement governance? Name/Address of managers
Classification of retirement benefits?
When can independent administration be accomplished?
- Will provides for one;
- All distributees agree on intep. admin.
Power of Indep. Executor
- Any act dependent admin. could do, but w/o court order necessary;
- BUT, if will creates power of sale, RP can be sold irrespective of estate debts;
- BUT, if will doesn't give power of sale, RP can only be sold to satisfy debt
How does personal rep close administration?
- File closing report containing:
- Property rec'd;
- Debts paid;
- Names/addresses of distributees
Personal rep's duty to creditors:
- Give notice w/in 2 months to SP creditors;
- SPs then have 4–6 mos from death to present their claims (if they don't, they'll only be protected up to value of collateral)
Priority of claims in insolvent estate
- Funeral expenses and medical bills up to $15K;
- Family allowance;
- Administration expenses;
- Secured claims;
- Child support;
- State taxes;
- Cost of confinement in prison;
- Reimbursement to medicaid;
- All other costs
Spousal claims in will or intestacy:
- HEF: Occupy homestead for life;
- If no homestead: $15K allowance;
- Can claim exempt personal prop up to $60K;
- If none: $5K allowance;
- Can claim family allowance for maintenance for 1 year by showing inadequate SP for their support
- Court approval;
- Show he can no longer appropriately serve as trustee;
- Must provide accounting
Who can enforce charitable trust?
- Any specifically named charitable B;
Trustee accounting req's
12 months after trust creation and then every 12 months
SoL to bring suit against trustee
Allocation of O&G interests in Trusts
- Delay rental: Income
- Royalty/Bonus: Equitably (Presumed equitable: 15% to principal; pre-2004 27.5% to principal)
S can include exculpatory clause relieving Trustee of liability EXCEPT for gross neg, fraud, or bad faith
Guardian duties upon appointment
- Take oath;
- Post fiduciary bond w/in 20 days;
- Publish notice of admin. w/in 30 days;
- Inventory of estate w/in 30 days;
- Application for monthly allowance w/in 30 days;
- Application to develop investment plan w/in 180 days
Removal of S/I
- Consumer: w/in 20 days
- Non-consumer: on debtor's request
What if SP fails to comply w/ debt default req's?
- SP liable for actual damages;
- If consumer good: 10% recover of purchase price and all interest charged
Debtor right of redemption
- Right to redeem prop. for money currently due and addt'l reasonable expenses BEFORE:
- Property has been sold or strictly foreclosed;
- Or contract for sale has been entered
- Consumer transaxn: Sale of collateral for total satisfaction of debt (unless >60% of good is paid for)
- Non-consumer: Total or partial satisfaction
Either way: debtor must consent
How to handle commingled funds in bank acct?
- CP presumed to be w/drawn first;
- SP is lowest intermediate balance
Standard for promoter to make a profit
- Promoter must fully disclose any profit being made on dealing w/ corp;
- Profit figured on FMV;
- Approval by maj. of disinterested directors or all initial s'holders
Which s'holders can vote in annual meeting?
S'holder of record on the record date
S'holder agreements must be filed w/
Distributions can only come from
Stuff not discharged in bankruptcy
- 1. Back taxes
- 2. Debt of obtained by fraud (imputed if bought luxury good >$550 and files w/in 90 days)
- 3. Extension of consumer credit w/in 70 days of bankruptchy if >$825
- 4. Debts incurred while acting as a fiduciary
- 5. Not listing debts in time to allow creditors to make claim
- 6. Debts for domestic support
- 7. Debts from tort commission
- 8. Student loans
Types of Easements
- Defined: Non-possessory use in land;
- In gross
Directly benefits the use and enjoyment of a specific piece of liand
Easement in gross
No dominant estate, benefits a person, not land
Rule of convenience
Once any member of a class is entitled to a distribution, the class closes
Typical savings clauses on O&G leases
- Completion clause;
- Force majeure;
- Shut-in royalty
Temporary cessation doctrine (O&G)
Sudden stoppage due to mechanical breakdown; must fix w/in a reasonable time
(if lease says what a reasonable time is, must go by that time; e.g., "60 days to repair after temporary cessation", MIO doesn't repair until 61 days because area flooded for 50 days--doesn't cut it)
If a subK exists on a contract for real property, the owner should withhold:
10% (if they have notice of the subK)
If a subK informs owner he's not been paid, what should the owner do?
Withhold the amount necessary to pay the subK until the contractor pays the subKer.
(SubKer can obtain a lien on the funds withheld by the owner)
Accord and satisfaction
Where a debt is subject ot a bona fide dispute, a debtor, in good faith, can sent partial payment to the creditor in satisfaction of the full accont balance where the payment is conspiuously marked PAYMENT IN FULL
- - Paid in full checks have to go one place, debtor sent to another;
- - Where clear the check was rubberstamped by a worker w/o knowledge of notation/effect of notation, will not satisfy where company notices and objects (90 days);
Texas Family Code Remedies: Exclusive or not?