Monday, August 14, 2017

Perfection of a Security Interest by Filing

Once a security interest has attached, it's then important to determine whether the requirements for perfecting that security interest have been satisfied.  By perfecting the interest a party will have priority over most other third parties (though well known by anyone who has studied this subject, there are exceptions).

There are five ways to perfect a security interest. Throughout the next five posts I'll be reviewing each in detail.  If an essay question shows up on the bar exam testing secured transactions, the probability is quite high that an issue dealing with perfection will be included. 

The five methods to perfect a security interest are as follows:

(1): Filing
(2): Taking possession of the collateral
(3): Control
(4): Automatic perfection
(5): Temporary perfection

To file a security interest requires filing a financing statement which can be filed either electronically or in writing.  The financing statement must contain the debtor's name and mailing address, the secured party's name and mailing address, an indication of the collateral covered by the financing statement and if the financing statement covers real-property-related collateral a description of the real property, the name of the record owner, and an indication that it is to be filed in the real property records. 

A minor error in the debtor's name will not invalidate a financing statement but seriously misleading errors will. If the debtor's name becomes insufficient and therefore seriously misleading (because, for example, the debtor changes his/her name) then the financing statement will only be effective against collateral acquired by the debtor before the name became insufficient and within 4 months after.  After that point, the secured party must re-file using the debtor's correct name. 

If the filing office chooses to accept a financing statement that does not contain the debtor's address, the statement is effective despite the lack of address.  The financing statement must indicate the type of collateral covered by the statement but it may do so broadly (for example "equipment").  It may even include a "supergeneric" description such as "all assets."

The debtor must authorize the financing statement in an authenticated record either before or after it is filed.  Filing should be done centrally in the office of the secretary of state.  One exception to the place of filing deals with filing for security interests in timber to be cut, minerals and fixtures. Those interests should be filed locally in the county where a mortgage on real estate is filed. 

Filing is valid for 5 years.  A continuation statement may be filed which will extend this 5 year period for another 5 years but may only be filed within 6 moths before the lapse of the first 5 year period.  

Next up will be a post on another method for perfecting a security interest: taking control of the collateral.

And, yes, I know that is the worst cliffhanger ever. :) 

Thursday, August 3, 2017

Bar Exam Tutoring

It seems to me that students are beginning earlier than ever in their preparation for the bar exam. I've said for quite some time that the longer one prepares, the less stressful the process. The bar exam is difficult for a variety of reasons but it is my opinion that what makes it especially difficult is the amount of material required relative to the amount of time that one generally has to learn that material. Increase your preparation time and the task becomes less daunting; when the task becomes less daunting the chances of passing the exam increase. You can very much set yourself up for success on the exam by approaching it in the correct way.

I'm often asked what options I offer to students who are interested in receiving personalized assistance with their preparation for the exam.   This too has become more common; about a decade ago it was relatively rare to prepare in any way other than with the traditional method of taking a large bar-review class. 

For sure, one-on-one tutoring provides very specific benefits and does not entirely supplement all that one receives in a full bar-review course. But it can certainly complement it, and it has the potential to provide for very quick and effective progress since weaknesses can quickly be targeted and improved upon.  People are now approaching the bar exam as they approached other tests they've been required to take such as the LSAT, SAT, ACT, etc.  

I offer quite a few different options for students who are interested in working with a bar exam tutor. When students e-mail me I provide them with much initial information. If then interested in learning more, we chat on the phone so that I can describe the tutoring in even more detail and so that I can answer any questions that you have about the process

Feel free to reach out to to learn more about the tutoring options!

Saturday, July 22, 2017

Good Luck!

I'm sure many can relate to this.  Good luck next week, and posting to resume shortly to assist those preparing for the February 2018 exam!

Friday, July 21, 2017

Service of Process (Out-of-State Defendants)

A recurring question has been coming up with my tutoring students over the last week, so I thought it a good idea to address it on the blog.  It deals with the federal rules for service of process of out-of-state defendants and the rule can definitely be a bit complex.

The rule regarding service of process to a party (an individual) served in the same state in which the court sits is straight-foward enough:  any person who is 18 years old and not a party to the action may serve process at the defendant's usual place of abode with one of suitable age and discretion who resides there.  In addition, service may be upon an authorized agent of the defendant. There are slightly different rules if dealing with an organization (for example, a corporation), a minor, etc.

But the rules change when the person to be served is outside of the state in which the federal court sits.  First look to the long-arm statute of the state in which the federal court sits. The long-arm statute might guide as to the rules regarding serving a person out of state.  In addition, there is a specific rule for serving third-party defendants (impleader, rule 14), and indispensable parties (rule 19).  The rules provide that third-party defendants or parties required to be joined may be served if served within 100 miles from the place where the action is pending.  This is sometimes referred to as the "bulge provision."

Finally, out-of-state service may be permitted if permitted by federal statute and for cases that involve a federal question (only a federal question, so this provision does not apply to cases that are in federal court based on diversity) if a defendant is served with process and is not subject to general jurisdiction in any state, provided that the defendant also has sufficient contacts with the United States and that jurisdiction is not prohibited by statute.

Worth keeping in mind as we approach the July exam.....

Wednesday, July 12, 2017

MBE Fast Fact: Complaints

It's important to understand the standard for complaints in a civil case.  As per the Federal Rules of Civil Procedure, a complaint must state: (1) the grounds of federal jurisdiction; (2) a short statement of the claim showing that the pleader is entitled to relief; (3) a demand for judgment for relief which may be in the alternative. Importantly, the facts stated in the complaint should support a plausible and not just possible claim.  Seems like a rather fine distinction to make, but the MBE tends to test such things.

One other point to note: if alleging fraud or mistake, then the standard stated above is slightly modified. Here, a party must state with particularity the circumstances constituting fraud or mistake.  For example, when alleging fraud, the complaint should specifically state the precise misconduct that constitutes the fraud.

Sunday, July 9, 2017

Final Stretch

Final 2 weeks of prep for the July exam.

Tuesday, July 4, 2017

MBE Fast Fact: Diversity Jurisdiction & Limited Partnerships

When determining the citizenship of a limited partnership for purposes of diversity, be sure to assess the citizenship of all partners, general and limited.  For example, assume the plaintiff is suing a limited partnership in federal court on a state-law claim. Plaintiff is from state A, 4 general partners are from state B, and 3 limited partners are from state A.  Because there are limited partners who are citizens of the same state as the plaintiff, diversity is destroyed and there will be no subject matter jurisdiction over this claim in federal court.  Importantly, it's not only the citizenship of the general partners that are assessed when making this diversity determination.

Wednesday, June 28, 2017

Electronically Stored Information

Discovery is an area that should be known well when preparing for Civil Procedure on the MBE.  A specific sub-topic within the larger topic of discovery deals with discovery of electronically stored data.  Nothing too complicated here, but certainly worth taking the time to understand the following:

The parties in a civil case are required to preserve electronically stored data.  A party can request of the other party the form in which the electronically stored data should be produced, and the responding party must use that particular form unless it objects. If the party does object, the court will then determine if the objection is valid.  It may be the case that the requesting party does not specify the specific form in which the electronically stored data should be produced; in that case the responding party may use any form in which the information is maintained or a form that is reasonably usable by the requesting party.

Issues may arise in which one party claims that another has destroyed electronically stored information.  A party must take reasonable steps to preserve electronically stored information.  Importantly, if the party satisfies that standard of reasonableness then no sanctions may result from the destruction of the information.  In addition, if unpreserved electronically stored information can be restored, then no other remedial measures (such as sanctions) will be imposed.

If, on the other hand, the data cannot be restored and the discovering party is prejudiced by the lack or restoration the court may order remedial measures but such measures can be no greater than necessary to cure the prejudice.

Note that if the disclosing party acted with intent to deprive the discovering party of the electronically stored information, the court may take additional remedial measures such as presuming the lost information was unfavorable to the disclosing party and/or instructing the jury that it may or may not presume that the information was unfavorable to the disclosing party.  In addition, the court can dismiss the action or enter a default judgment against the party who destroyed the electronically stored data.

Friday, June 23, 2017

The 2 Components to Excelling on a Bar Exam

I tell my students all the time that there are two components to excelling on a bar exam.  The first is to know the law and the second is to know how to apply the law that you've learned.  Over time, I've come to realize that there is more likely to be a deficiency in the second component. That isn't to say that people do not go into the test not knowing the law well enough, but rather that more people go into the test understanding the law better than they understand the skills required to apply the law that they've learned.    

In addition to writing essays and having them reviewed, I highly recommend reading over as many of the model answers to previous essays as time permits.  Quite a few are provided for free at the link below and more recent essays can be purchased on the NCBE website.

Further, a bit of guidance is provided on the test itself as to how you should aim to style your answer. On the MEE, there will be the following instructions:

Read each fact situation very carefully and do not assume facts that are not given in the question. Do not assume that each question covers only a single area of the law; some of the questions may cover more than one of the areas you are responsible for knowing.

Demonstrate your ability to reason and analyze. Each of your answers should show an understanding of the facts, a recognition of the issues included, a knowledge of the applicable principles of law, and the reasoning by which you arrive at your conclusions. The value of your answer depends not as much upon your conclusions as upon the presence and quality of the elements mentioned above.

Clarity and conciseness are important, but make your answer complete. Do not volunteer irrelevant or immaterial information.

Answer all questions according to generally accepted fundamental legal principles unless your testing jurisdiction has instructed you to answer according to local case or statutory law. 

Sunday, June 18, 2017

Alienage Jurisdiction

Questions on the MBE come up quite often testing your understanding of diversity jurisdiction.  One of the difficulties of this topic is that there seems to be an endless amount of angles to test.

Here's one more:

As a quick review, diversity jurisdiction requires diversity of citizenship in which the dispute involves citizens of different states within the United States.  No plaintiff can be a citizen of the same state as any defendant or diversity will be destroyed and jurisdiction in the federal court will be improper unless there is another basis for claiming that subject matter jurisdiction is proper (such as federal question jurisdiction.)

A lesser known rule allows for subject matter jurisdiction over alienage cases in which the dispute is between a citizen of a U.S. state and a citizen of a foreign country. Importantly, this basis for jurisdiction will not apply if the citizen of the foreign country (an "alien") has been admitted to the United States for permanent residence and is domiciled in the same state as the U.S. citizen. In other words, when such occurs, diversity is destroyed just as it would be if the case involved a plaintiff and defendant, both of whom were citizens of the same U.S. state.

It should also be noted (and this comes up in questions as well) that there is no subject matter jurisdiction over cases by an alien against an alien; there must be a citizen of a U.S state on one side of the suit to qualify for alienage jurisdiction.

Wednesday, June 14, 2017

Future Interests

Future Interests has got to be one of the most dreaded topics in Real Property.  It takes some time and struggling to get this stuff but as an initial matter it's important to understand which type of future interest goes with which type of present possessory estate.  That's the first step in understanding this very difficult concept. So, let's begin there:

Bellow #s  will be listed as follows:

Present possessory estate--->future interest associated with that estate

(1): Fee simple absolute--->No future interest

(2): Fee simple determinable-->Possibility of reverter

(3): Fee simple subject to condition subsequent--->Right of entry

(4): Fee simple subject to executory interest--->Executory interest

(5): Life estate-->Remainder.

As an explanation if you look at (2) above, that means that if a fee simple determinable is granted to someone (let's call that person y) then the future interest associated with that grant is a possibility of reverter.  Assume that grantor x grants to y property so long as y uses the property for farming.  Such a grant fits the definition of fee simple determinable, and so y has been granted a fee simple determinable as a present possessory estate.  X, the grantor, retains a possibility of reverter as a future interest.  If y fails to satisfy the stated condition by not using the property for farming then the possibility of reverter will force the property to revert back to x and x's future interest (a possibility of reverter) will become a present possessory estate (a fee simple).

The same logic can be applied for all of the above, though there are some slight differences depending upon the present estates and future interests.

It's quite complex but it certainly helps to know the above as you begin to delve deeper into this area.

Monday, June 5, 2017

Appeals: A Quick Summary

Quite a lot to know about appeals when preparing for Civil Procedure questions on the MBE. I've written a bit about this previously but this post will summarize the important points to keep in mind:

The federal courts have subject-matter jurisdiction over appeals from all final decisions of the federal district trial courts.  However, as a general matter the federal courts do not have subject-matter jurisdiction over appeals from interlocutory matters (those matters that have not reached final judgement) of the federal district trial courts.

But there are exceptions, and one important exception deals with injunctions.  The federal courts, for the most part, do have subject-matter jurisdiction over appeals from interlocutory orders that grant, deny, or modify an injunction.   And in addition to this specific rule regarding injunctions, the collateral order doctrine provides that a federal trial judge's interlocutory order is reviewable if it conclusively determines claims of right distinct from and collateral to the rights asserted in the action and would be effectively unreviewable if the litigant were required to wait for an appeal.

Regarding the scope of review by a federal court, an alleged error at trial is reviewable on appeal only if preserved on the record.  And even if an error is preserved, it may be unreviewable if a court determines that the issue preserved constitutes harmless error (an error that does not affect the substantial rights of the parties).

Finally, as to the standard of review by an appellate court, this will depend upon whether the alleged error at trial concerned an (1) interpretation of law, (2) an exercise of the court's discretion, or (3) a finding of fact.

Specifically, the appellate court will exercise de novo review of a trial court's conclusions of law. In other words, the appellate court will exercise its own judgment on decided legal issues.  If reviewing a trial court's discretionary ruling that do not implicate legal issues, an appellate court will overturn such discretion by the trial court if the appellate court determines that there has been an abuse of discretion or plain error.  And when reviewing findings of fact by the trial court, an appellate court will only overturn such factual findings if such findings were made by a court (not a jury) and if such findings are clearly erroneous.

Thursday, June 1, 2017

Working Through Practice Questions

Probably the advice that I give most often to students is that when an MBE question is answered incorrectly, note the specific rule that the question was testing.  And by note I mean write it down somewhere and divide these rules by subject.  So, for example, all Property rules together, all Contracts rules together, etc.

Another way to think about this is that each question is designed to test an abstract legal concept. The MBE tests abstract legal concepts through the use of concrete fact patterns.  The fact patterns will always change but the abstract concepts will remain the same.

And so the goal is to fully understand the abstract concept that was tested in any given question.  If you answered a question incorrectly and you did so because you did not fully understand the concept that was tested in that question then the next time that concept is tested in a new fact pattern it's likely you'll answer it incorrectly again.

Essentially, learning the concept provides you with the foundation to answer correctly future questions testing that concept regardless of whatever facts are provided in a given question.

Tuesday, May 23, 2017

MBE Fast Fact: The Right to a Speedy Trial

Though not tested all that frequently in Criminal Procedure questions, the right to a speedy trial is tested enough that I recommend knowing a couple of key points here. This right attaches once a person has been formally accused of a crime by the government. If the right is violated, the result will be a complete dismissal of the charges against the accused. There is a balancing test that courts use to determine whether the right has been violated. Consider the following factors in any question testing the right to a speedy trial:

--The length of the delay
--The reason for the delay
--The defendant's assertion of his or her right to a speedy trial
--The prejudice to the defendant resulting from the delay.

Regarding that last factor, there are quite a few ways that defendant might be prejudiced by the delay.  Perhaps evidence is lost and the loss is caused by the delay. In addition, an undue delay might cause witnesses to be less able to recollect facts that will form the basis of testimony.  Even excess anxiety caused to the defendant resulting from the delay will suffice.