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Examples of Business Law

Barney has finally decided to retire after many years on the job as a deputy in a small North Carolina town and as a detective in the "big city" of Raleigh, NC. Though Barney sometimes appeared to be a bumbling law enforcement officer, it turns out that he was a dutiful saver and a shrewd investor who now owns an interest in a second home on the North Carolina coast as well as some prime real estate in the North Carolina mountains.

Barney purchased the mountain property some 31 years ago as joint tenants with a right of survivorship with his old friends Andy, Floyd, and Howard. All of the friends have passed away, and Barney has not been back to the property in more than 20 years.

Andy had apparently indicated in his will that he was leaving his interest in the property to his son Opie. A few years back, Opie took out a personal loan using his alleged interest in the property as collateral. When Opie defaulted on the loan last month, the lender initiated a legal action to foreclose on the property. Barney hired an old friend with whom he used to go to church (who is now an attorney in Raleigh) to address the lender's legal action. The matter is still pending.

Remembering that a trout-filled stream ran through the property, Barney decided to do a little fly-fishing. Driving out to the property, Barney was surprised to see smoke rising from the stone chimney of a little cabin that some unknown person had constructed in the center of the property. Approaching the cabin, Barney suddenly heard a shot ring out and a bullet whiz past his head. Ducking for cover, Barney heard a familiar voice; it was Ernest, from the small town where he had been a deputy, yelling out and telling him to "Git off my land."

Gathering his senses, Barney yelled back, identifying himself and telling Ernest that it was actually his land and that he had the deed to prove it. Ernest replied that he didn't care about the deed, that he had lived on the property openly and notoriously for some 20 years, and, as far as he was concerned, it was now his. Deciding that discretion was the better part of valor, Barney hopped into his 1963 Ford Galaxie, which he had bought at auction from the sheriff's office, and headed back east. He stopped in Raleigh to contact his attorney and asked him to deal with Ernest's claim as well, but he also warned the attorney, "he's a nut!"

Since his fishing trip was spoiled, Barney decided to head to his beach house in Carolina Beach, NC. Barney noticed several signs for a new Nickelodeon Family Resort along the way. The signs all said, "Coming Soon." Barney half-smiled as he thought to himself how sorry he was for whatever poor schmuck owned property next to that tacky establishment. Turning the corner to the street where his beach house was located, Barney was horrified to see that several of his neighbors' properties were being torn down and that there was a sign stating, "Future home of the Nickelodeon Family Resort" positioned right next door to his beach house. Pulling in the driveway, Barney noticed a bright orange envelope attached to his front door. Inside the envelope, Barney found a notice from the town authorities notifying him that his property was being taken by eminent domain in order to make way for the new resort. The notice had a letter attached talking about all the new businesses and jobs the resort would bring to the community.

Having just survived the encounter in the mountains and now being faced with the loss of his beach house, Barney became enraged and marched down to the town offices, determined to "nip this plan in the bud." The town attorney told Barney he was sorry but that there was really nothing he could do about the seizure of the house. He assured Barney that Barney would receive the full market value for his property in compensation.
Barney placed another call to his attorney for assistance in dealing with the seizure.

As Barney was hanging up the phone he heard a knock at the door. Opening the door, Barney was pleased to see that it was his former long-time girlfriend, Thelma Lou. After exchanging pleasantries, Thelma Lou told Barney that she had decided to leave the small town where they had both lived and resettle at the beach. Caught up in the excitement of the reunion, Barney invited Thelma Lou out to dinner at the swankiest restaurant in Wilmington, NC, Le Nez Augmenté (loosely translated from the French, "The Upright Nose"). Thelma Lou, embarrassed, said she wasn't sure she had an outfit that was fancy enough for Le Nez, but Barney assured her that even the fancy restaurants at the beach allowed casual attire, so her casual dress and his polo shirt and shorts should be fine.

Driving up to the restaurant, Barney noticed a sign that indicated valet parking was available. A young man in a neatly pressed Le Nez uniform, who identified himself as Carl, approached the vehicle and asked Barney if he would like his car parked. Barney handed over his keys and walked around to the other side of the car to open the door for Thelma Lou. Taking her arm under his, Barney proudly escorted his date into Le Nez as the young man drove off in the Galaxie.

Entering the restaurant, Barney was horrified to see that everyone inside was wearing dress attire. Quickly ushering Thelma Lou back out the door, he looked for the valet. Not seeing the young man anywhere and noticing that the sign indicating that valet parking was available was now folded up and lying under some bushes, Barney went back to the entrance and asked the hostess if there was any way she could call the valet to retrieve his car. "Valet?" asked the hostess. "We have no valet service tonight monsieur, only on weekends." "But what about Carl?" argued Barney. "We had a valet name Carl," she responded, "but he quit yesterday. We are still waiting for him to return his uniforms."

The Carolina Beach police officer couldn't help but snicker as he took the police report. "1963 Ford Galaxie, huh? Shouldn't be too hard to find that." On the cab ride home, Barney felt a mixture of anger and mortification. "Its OK, Barney," said Thelma Lou, "I never was that fond of French food, and I'm sure your car will turn up."

Barney's car was found 3 weeks later at the Classic Car Show in Mount Olive, NC. It seems the man showing the car had purchased the vehicle from a used car lot in Kinston, NC, which had taken the vehicle from a young fellow matching Carl's description in trade for a 1967 Mustang convertible. Neither the man who was showing the car nor the used car dealer had any idea that the vehicle had been stolen. Barney asked for the car back, but the man in possession said he was not giving it up until somebody reimbursed him for the $5,600.00 that he had paid for the vehicle. Barney placed another call to his attorney.

Looking at the situation from a legal perspective, as Barney's attorney, give him your best assessment of his legal rights in connection with the various property law issues that he has encountered.
You may want to research the following legal concepts and incorporate what you find if you consider them relevant:

- Joint tenancy with right of survivorship
- Lapsed devises in a will
- Adverse Possession
- Eminent Domain
- Bailments
- Good Faith Purchasers for Value
- Any other legal concepts you believe may be relevant

Solution Preview

Andy had indicated that he had left his interest with son Opie. This is a joint tenancy with a right of ownership, and Andy can leave his interest to his son. Since Opie has mortgaged the land to a lender, the lender can foreclose only Andy's share of the property. Opie's lenders have a right to Andy's share of property. The rest will remain with Barney. This is not a case of lapsed devices under the will. Andy has died before Opie. Lapsed devices under the will would have occurred if Opie had died before Andy.

Earnest has the lived on the property openly and notoriously for 20 years. For adverse possession to take place there must be actual possession of the property, non-permissive ...

Solution Summary

The response provides you a structured explanation of adverse possession . It also gives you the relevant references.

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