Administrative

1
Administrative

• Course objective Ability to use the Statutory
  Supplement
• a. Read sections when mentioned in text
• b. Mark sections to show youve been there
• c. Use statutes in class, on exam, in life
• 2. Revised Article 1
• What it is.
• U.C.C. 1-201(b)(35) (formerly 1-201(37))
• Assignment 2. Skip problems 2.5 and 2.6.
• Assignment 3. Skip problems 3.7, 3.8, 3.9

2
Secured TransactionsAssignment 1

• Remedies of Unsecured Creditors under State Law

3
Basic concepts time and money
4
Basic concepts time and money
Civil procedure (time line)
5
Basic concepts time and money
Civil procedure
Complaint
6
Basic concepts time and money
Civil procedure
Service
Complaint
7
Basic concepts time and money
Civil procedure
Service
Complaint
Answer
8
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Complaint
Answer
9
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Complaint
Answer
or trial
10
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
11
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
12
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
30 days to 1 year or more
13
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
30 days to 1 year or more
10 day minimum
14
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
30 days to 1 year or more
10 day minimum
Discovery (on subject of the action)
15
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
30 days to 1 year or more
10 day minimum
Discovery (on subject of the action)
Before judgment only on issues of liability or
damages
16
Basic concepts time and money
Motion for summary judgment . . .
Civil procedure
Service
Judgment
Complaint
Answer
or trial
Levy
30 days to 1 year or more
10 day minimum
Discovery (on subject of the action)
Before judgment only on issues of liability or
damages After judgment on collection issues
17
Basic concepts time and money
Summary procedure (small claims courts)
Complaint
18
Basic concepts time and money
Summary procedure (small claims courts)
Service by mail
Complaint
19
Basic concepts time and money
Summary procedure (small claims courts)
Service by mail
Complaint
Hearing
20
Basic concepts time and money
Summary procedure (small claims courts)
Service by mail
Judgment
Complaint
Hearing
21
Basic concepts time and money
Summary procedure (small claims courts)
Service by mail
Judgment
Complaint
Hearing
60 days
22
Basic concepts time and money
Summary procedure (small claims courts)
Service by mail
Judgment
Complaint
Levy
Hearing
60 days
10 day minimum
Post judgment proceedings are generally the same
as Civil Procedure
23
Basic concepts time and money
24
Basic concepts time and money
25
Basic concepts time and money
26
Basic concepts time and money
27
Basic concepts time and money
28
Basic concepts time and money
29
Basic concepts time and money
30
Basic concepts remedies

• Money judgment Defendant owes plaintiff 5,000,
  for all of which let execution issue.
• Issued at end of the case
• Does not order Defendant to pay
• Enforced by other procedures
• Execution Seizure and sale of the debtors
  property to satisfy the judgment (four steps)
• Issuance of the writ
• Levy on the debtors property (no self help)
• Sale of property
• Application of proceeds to the debt and return

31
Basic concepts remedies

• Levy Seizure of property pursuant to execution
• Sheriff follows creditors instructions for
  levy
• Sheriff must take physical possession (majority
  rule)
• Sheriff has liability for wrongful execution
• Sheriff requires creditor to indemnify sheriff
• Exemptions (from execution) Property the
  sheriff cannot seize on a writ of execution
• Necessities specified by state statute
• Often limited by use or dollar amount
• Usually claimed at levy

32
Basic concepts remedies

• Prejudgment attachment
• Sheriff seizes property, as on execution
• Creditor must prove extraordinary
  circumstances
• Few creditors entitled (except in California)
• Self-help repossession Creditor takes physical
  possession of debtors property without legal
  process
• Unsecured creditors are not entitled to
  self-help
• Conversion The wrongful exercise of dominion or
  control over the property of another.
• Self-help is conversion. Wrongful execution is
  conversion.
• Remedy You bought it.

33
Basic concepts remedies

• Setoff If

100
A
B
100
34
Basic concepts remedies

• Setoff If
• either can setoff the debt it owes against the
  debt owing to it

100
A
B
100
35
Basic concepts remedies

• Setoff If
• No debt
• either can setoff the debt it owes against the
  debt owing to it

A
B
36
Basic concepts remedies

• Setoff If the amounts owing are not equal

100
A
B
36
37
Basic concepts remedies

• Setoff If the amounts owing are not equal
• a portion of the larger debt will survive

100
A
B
36
38
Basic concepts remedies

• Setoff If the amounts owing are not equal
• a portion of the larger debt will survive

64
A
B
39
Basic concepts remedies

• Setoff example Debtor owes Bank for 30,000 loan
• Debtor has 1,600 in an account at Bank

30,000
Debtor
Bank
1,600
40
Basic concepts remedies

• Setoff example Debtor owes Bank for 30,000 loan
• Debtor has 1,600 in an account at Bank
• On default, Bank can set off the bank account
  by changing the account balance to zero

30,000
Debtor
Bank
1,600
41
Basic concepts remedies

• Setoff example Debtor owes Bank for 30,000 loan
• Debtor has 1,600 in an account at Bank
• On default, Bank can set off the bank account
  by changing the account balance to zero

28,400
Debtor
Bank
0
42
Basic concepts remedies

• Fraudulent Transfers
• 4(a)(1). A transfer . . . is fraudulent . . .
  if the debtor made the transfer . . . with actual
  intent to hinder, delay, or defraud any creditor
  . . . .
• 8(a) A transfer is not avoidable under Section
  4(a)(a) against a person who took in good faith
  and for a reasonably equivalent value . . . .
• 5(a). A transfer . . . is fraudulent . . . if
  the debtor made the transfer . . . without
  receiving a reasonably equivalent value in
  exchange . . . and the debtor was insolvent . . .
  or became insolvent as a result of the transfer.

43
A general comment on the problems

• Legal strategy is subject to constraints chess
  board
• Client goals
• Costs
• Delivered law (what courts will actually do)
• Procedure
• Attitudes and personalities of people involved
• Media pressures
• Basic concepts how the chess pieces move

44
Problem 1.1, page 17
Lisa
Jeff
1K Loan
45
Problem 1.1, page 17
Lisa
Jeff
1K Loan

• Jeff plans to take the lawn furniture. Can he do
  that?

46
Problem 1.1, page 17
Lisa
Jeff
1K Loan

• Jeff plans to take the lawn furniture. Can he do
  that?
• If Jeff cant take the furniture, what can he do?

47
Problem 1.2, page 18

• Kostandin owes Look 30,000

Look
Kostandin
30,000
48
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters

Look
Kostandin
30,000
49
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters

30,000
Look
Kostandin
30,000
50
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off

0
Look
Kostandin
0
51
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off
• But the lobsters bring only 19,000.

19,000
Look
Kostandin
19,000
30,000
52
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off
• But the lobsters bring only 19,000.
• Setoff

0
Look
Kostandin
19,000
11,000
53
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off
• But the lobsters bring only 19,000. What now?

0
Look
Kostandin
19,000
11,000
54
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off
• But the lobsters bring only 19,000. What now?
  (read)

0
Look
Kostandin
19,000
11,000
55
Problem 1.2, page 18

• Kostandin owes Look 30,000
• So Look defrauds Kostandin of 30,000 in
  lobsters, thinking he will set off
• But the lobsters bring only 19,000. What now?
• Court fines Look 15,000 and orders payback of
  19,000.

0
Look
Kostandin
19,000
19,000 -19,000 -15,000
30,000
56
Problem 1.3, page19

• Benning lends 10,000 to Knopf, payable in
  quarterly installments, with interest at prime
  plus five points.
• Loan is not currently in default
• Conditions now are worse than at time of the
  loan, Knopf is behind on rent and utility
  payments
• What do you advise?

57
Problem 1.4, page19
12,000 Judgment
Service
Complaint
Default
58
Problem 1.4, page19
12,000 Judgment
Service
Complaint
Default

• What happens now? What do we need to know? How
  do we collect?

59
Problem 1.4, page19
12,000 Judgment
Service
Complaint
Default

• What happens now? What do we need to know? How
  do we collect?
• Should we send the sheriff to levy on the day
  care equipment now?

60
Problem 1.5, page 19
61
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

62
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

63
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

64
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

65
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

66
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

67
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be partially exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

68
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be partially exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

69
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be partially exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

70
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be partially exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

71
Problem 1.5, page 19

• Knopf owns the following property. What is
  exempt?
• Toyota automobile worth 6,000
• 815.18(3)(g), (d), exempt
• 2. Inherited house worth 35,000
• 815.20, exempt if he lives in it
• 3. Day care equipment worth 10,000
• 815.18(3)(b), may be partially exempt
• 4. Bank account, balance 2,265.92
• 815.18(3)(k), partially exempt
• Is there any hurry? Can we move fast enough?

72
Problem 1.6, page 20

• We have a judgment against Knopf
• We think someone owes Knopf money.
• How do we get Knopf to tell us the truth?
  (Strategy)
• Set up a perjury charge? With what questions?
• Do you own any interest in any bank account, in
  your own name or in any other name?

73
Problem 1.6, page 20

• Have you lent any money to anyone who has not yet
  repaid in full?
• Have you sold any property for which you have not
  yet received payment?
• Have you performed any services for which you
  have not yet been paid?
• Does anyone owe you wages, salary or commissions?
• Have you suffered any injuries to yourself or
  your property for which anyone might be liable to
  you?
• Have your legal rights been violated by anyone?
  Have you considered filing suit against anyone?
  For what?
• Have you deposited money with a utility company?
  With anyone else?
• Have you deposited money with a lessor or
  landlord? Have you paid any rent in advance?
• Have you prepaid for any goods or services? Have
  you paid bills for which you expect to be
  reimbursed by insurance?