The Lawletter Vol. 43 No. 2

Mark Rieber, Senior Attorney, National Legal Research Group

     Ever since Rodriguez v. United States, 135 S. Ct. 1609 (2015), courts have had to decide whether evidence discovered during routine traffic stops should be suppressed on the ground that the police unreasonably prolonged the traffic stop, even for a short time, to investigate matters unrelated to the purpose of the stop, and what should be considered matters unrelated to the purpose of the stop.  A good example is the recent decision in Lerma v. State, No. PD-1229-16, 2018 WL 525427 (Tex. Crim. App. Jan. 24, 2018), in which the court reversed the Court of Appeals’ decision suppressing evidence discovered on a passenger of a vehicle during a routine traffic stop.  Contrary to the Court of Appeals’ holding, the Court of Criminal Appeals (Texas' highest court for criminal cases) determined that the officer conducting the traffic stop had reasonable suspicion to pat-down the passenger and that by questioning the passenger and patting him down, the officer did not unduly prolong the stop in violation of the holding in Rodriguez or the holding in St. George v. State, 237 S.W.3d 720 (Tex. Crim. App. 2007), upon which the Court of Appeals relied.

The Lawletter Vol. 43 No. 2

Jim Witt, Senior Attorney, National Legal Research Group

     There is no question that law of a particular country develops in the context of the country's culture, religion, and customs.  A case recently decided by the Supreme Court of Taiwan illustrates this point.  See https://www.taiwannews.com.tw/en/news/3332521.  The plaintiff, identified as Luo (surname), brought a contract action against her second son, Chu, alleging that he owed her nearly US$1 million for raising him and financing his training at dental school (Chu's brother also completed dental training; he settled a similar claim with the plaintiff).  She claimed that she and her husband had run a dental clinic but that, after the couple's divorce, she raised her sons as a single mother.  As she was concerned that her sons would not provide for her in her old age, she had each son, at age 20, sign a written agreement, providing that her sons would pay her 60% of their net profits until the total reached 50 million new Taiwanese dollars (nearly US$1.7 million).  It is implicit in the Confucian tradition of filial piety that children support their aging parents.

The Lawletter Vol. 43 No. 2

Emily Abel, Senior Attorney, National Legal Research Group

     The Virginia Supreme Court recently reiterated its position that in Virginia, the source-of-duty rule prohibits suing in tort when the only basis for the duty breached lies in contract. In MCR Federal, LLC v. JB&A, Inc., 294 Va. 446, 808 S.E.2d 186 (2017) decided on December 14, 2017, the seller of a government contracting business brought breach of contract and fraud claims against the buyer of their firm. As part of the parties' agreement, the buyer warranted that there were no adverse suits, investigations, or government actions against it at the time the parties signed the contract. The contract also required that the buyer deliver to the seller a "bring down certificate" reaffirming those warranties at closing.

     While the warranties were accurate at the time of contracting, they were no longer accurate at the time of closing. In the period between contracting and closing, the United States Air Force launched an investigation into the buyer for their actions pertaining to a contract unrelated to the contract between seller and buyer and suspending the buyer from government contracting. Because of this investigation, the business did not meet earnings thresholds set forth in the contract, which resulted in the seller not receiving additional payments. The seller sued the buyer, claiming the "bring down certificate" produced at closing was a breach of contract and fraud because it did not reveal the Air Force investigation. After a lengthy bench trial, the circuit court found in favor of the seller on both the fraud and breach of contract claims.

The Lawletter Vol 43 No 1

Brad Pettit, Senior Attorney, National Legal Research Group

      The general rule is that a probate or surrogate's court may revoke letters of administration that were granted to an executor or personal representative if there is demonstrated friction, hostility or antagonism between the appointed fiduciary and beneficiaries of a decedent's estate, but only if the enmity between the fiduciary and the beneficiaries threatens to interfere with the administration of the estate.  In re Estate of Brown, 2016 N.Y. Slip Op. 02691, 138 A.D.3d 1191, 29 N.Y.S.3d 630 (3d Dep't 2016).  In other words, neither a conflict of interest nor hostility between an executor or trustee and the beneficiaries of an estate or trust provide the basis for removing a trustee or personal representative unless the administration of the trust or estate has been adversely affected.  In re Gerald L. Pollack Trust, 309 Mich. App. 125, 867 N.W.2d 884 (2015); In re Estate of Robb, 21 Neb. App. 429, 839 N.W.2d 368 (2013) (when executor of estate has a personal interest in administration of estate and in disposition of estate property and circumstances reveal that those conflicting interests are preventing executor from performing fiduciary duties in impartial manner, then executor should be removed).

       The mere fact that the personal representative of a decedent's estate is also a beneficiary thereof does not necessarily create a conflict of interest that would justify the removal of the personal representative as the fiduciary for the estate.  Gardiner v. Taufer, 2014 UT 56, 342 P.3d 269.  In order to justify removal of a personal representative who is also a beneficiary of an estate, the evidence must show that the personal representative committed some negligent act or mismanagement of the estate before a court can find a sufficient conflict of interest that is serious enough to justify removal of the estate fiduciary.  Id. ¶ 31, 342 P.3d at 279.

The Lawletter Vol 43 No 1

Alistair Edwards, Senior Attorney, National Legal Research Group

     The general rule is that a landowner has no common law right to an unobstructed view over an adjoining property. Thus, if a neighbor erects a structure on his property that blocks another neighbor’s view from his property, this likely does not constitute an actionable nuisance or give the neighbor any other type of claim. Absent an express easement or covenant, this right to an unobstructed view generally does not exist. "In the absence of statute, generally, a landowner may, by building on his or her own land, deprive the adjoining owner of the light, air, and view of which the owner was the recipient before the structure was erected without inflicting a legal injury by such obstruction." 2 C.J.S. Adjoining Landowners § 28 (Westlaw database updated December 2017). 

       For example, in Ceynar v. Barth, 2017 ND 286, 904 N.W.2d 469, the North Dakota Supreme Court recently considered a nuisance action brought by a homeowner against his neighbor (and the homeowner’s association) after the neighbor constructed a pool house on his property which obstructed the neighbor’s view. The pool house blocked the homeowner’s view of a golf course and very likely reduced the market value of the home. In affirming the trial court’s grant of summary judgment to the defendant neighbor, the court relied mainly on California precedent and stated that "[j]ust as traditional American property law fails to protect access to light over neighboring land, in the absence of an express easement or covenant, advantageous views are unprotected." Id. ¶ 26, 904 N.W.2d at 476. The court further explained:  "Because the Ceynars [plaintiffs] have no cognizable right to an unobstructed view from their property, Barth's [defendant] construction of the pool house as a matter of law did not unreasonably interfere with the Ceynars' use and enjoyment of their property." Id. ¶ 28, 904 N.W.2d at 478; see also Wolford v. Thomas, 190 Cal. App. 3d 347, 356, 235 Cal. Rptr. 422, 427 (1987) ("[A] building or structure does not constitute a nuisance merely because it obstructs the passage of light and air to the adjoining property or obstructs the view from the neighboring property, provided such building or structure does not otherwise constitute a nuisance.").

The Lawletter Vol 43 No 1

John Stone, Senior Attorney, National Legal Research Group

            The parents of a child sexually abused by a child they adopted brought an action against the state of Nebraska for negligent failure to warn or disclose, and failure to supervise.  A state employee incorrectly stated to the parents before the adoption that the adopted child had no sexual abuse history. After a bench trial, the trial court entered judgment for the State based on the defense of sovereign immunity. When the parents appealed, the Supreme Court of Nebraska affirmed the lower court ruling.  Jill B. v. State, 297 Neb. 57, 899 N.W.2d 241 (2017). 

            Like statutes in many other states, Nebraska's Tort Claims Act, Neb. Rev. Stat. §§ 81-8,209 et seq., includes a waiver of the state's sovereign immunity from tort liability, but it also retains such immunity for some broad categories of conduct. Statutes authorizing a lawsuit against the State are strictly construed, since they are in derogation of the State's sovereignty. Under the intentional torts exception, sovereign immunity is not waived for claims arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights. Neb. Rev. Stat. § 81-8,219(4).

The Lawletter Vol 43 No 1

Paul Ferrer, Senior Attorney, National Legal Research Group

     Laches is "'a defense developed by courts of equity' to protect defendants against 'unreasonable, prejudicial delay in commencing suit.'" SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954, 960 (2017) (quoting Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1967, 1973 (2014)). It is a familiar statement of the law that laches generally does not apply when the statute of limitations applicable to a legal claim has not run. But many state courts continue to indicate that, in some circumstances, "laches may bar a legal claim even if the statutory period of limitations has not yet expired." Tenneco Inc. v. Amerisure Mut. Ins. Co., 281 Mich. App. 429, 456-57, 761 N.W.2d 846, 863-64 (2008); see also Veysey v. Nelson, 2017 UT App 77, ¶ 7, 397 P.3d 846, 848 ("[B]ecause laches may apply in situations where the statute of limitations has not yet run, the existence of a statute of limitations does not … automatically preclude application of the laches doctrine."), cert. denied, 400 P.3d 1046 (Utah 2017); Bldg. & Constr. Trades Council of N. Nev. v. State ex rel. Pub. Works Bd., 108 Nev. 605, 611, 836 P.2d 633, 637 (1992) ("Especially strong circumstances must exist . . . to sustain a defense of laches when the statute of limitations has not run.").  However, that no longer appears to be the case in federal court, at least with respect to a federal claim as to which Congress has expressly supplied a statute of limitations.

       In Petrella, the U.S. Supreme Court held that laches cannot defeat a damages claim brought within the three-year period prescribed by the Copyright Act's statute of limitations. 134 S. Ct. at 1972-75 (applying 17 U.S.C. § 507(b) (requiring a copyright holder claiming infringement to file suit "within three years after the claim accrued")); see also SCA Hygiene, 137 S. Ct. at 961 ("We saw in this language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds."). In so holding, the Court spoke in very broad terms: "[I]n the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief." Petrella, 134 S. Ct. at 1974. Petrella's holding rested on both separation-of-powers principles and the traditional role of laches in equity. Since

The Lawletter Vol 42 No 10

Lee Dunham, Senior Attorney, National Legal Research Group

            During the holiday season, many of us open our homes to friends and coworkers and, unfortunately, sometimes a guest is injured or becomes sick on the property. What is the scope of a host's duty to render first aid to the uncle who cuts his hand while carving the turkey, or the New Year's Eve guest who has far too much to drink?

            Courts of most states generally follow the scheme outlined in the Restatement (Second) of Torts as to duty to render aid. The general rule, of course, is that there is no duty to render aid to one who is in peril, even if it would be easy to provide assistance. See Restatement § 314 ("The fact that the actor realizes or should realize that action on his part is necessary for another's aid or protection does not of itself impose upon him a duty to take such action."). But an exception applies when a "special relationship" exists between the parties.

The Lawletter Vol 42 No 10

Fred Shackelford, Senior Attorney, National Legal Research Group

            Can a plaintiff motorist's comparative fault be considered in crashworthiness cases based on strict liability or breach of warranty? That was the issue of first impression for the South Carolina Supreme Court in Donze v. General Motors, LLC, 420 S.C. 8, 800 S.E.2d 479 (2017). In Donze, the plaintiff passenger had been smoking synthetic marijuana earlier in the day. He sustained severe burn injuries when the truck in which he was riding burst into flames after colliding with another vehicle at a controlled intersection. The accident occurred because the truck driver failed to stop and pulled directly in front of the other vehicle.

            The plaintiff brought a crashworthiness case against the truck's manufacturer, alleging that the truck's design was defective because the gas tank was placed outside of the truck's frame. Two issues were certified to the Donze court:

1. Does comparative negligence in causing an accident apply in a crashworthiness case when the plaintiff alleges claims of strict liability and breach of warranty and is seeking damages related only to the plaintiff's enhanced injuries?
2. Does South Carolina's public policy bar impaired drivers from recovering damages in a crashworthiness case when the plaintiff alleges claims of strict liability and breach of warranty?

The Lawletter Vol 42 No 10

Nicole D. Prysby, Senior Attorney, National Legal Research Group

            The price of Bitcoin has soared in recent months, from approximately $900 in January 2017 to a current price of over $15,000. But even before the 2017 increase, Bitcoin had periods where its value rose sharply. For example, in 2013, it went from about $15 to $800. Bitcoin’s short-term gains have made it a very attractive hook for would-be Ponzi scheme developers. In fall 2017, the Commodity Futures Trading Commission (“CFTC”) sued Gelfman Blueprint, Inc. (“GBI”), and GBI’s Chief Executive Officer (“CEO”) for operating a Bitcoin Ponzi scheme that allegedly defrauded investors out of more than $600,000.

            In early 2014, the company’s CEO opened a Bitcoin fund and sought customers. He claimed to have a high-frequency, algorithmic, trading strategy (using a bot named “Jigsaw”) and advertised the fund as having monthly returns of 7%-11% with zero downside risk because “trading results are maximized during price drops.” He was able to attract at least 80 customers, who contributed between a few hundred dollars and tens of thousands of dollars each. Once the customers signed up and paid into the fund, the CEO provided them with various reports and materials purporting to show that they were earning 7%-9% per month, that the customers owned specific amounts of Bitcoin, and that the company’s assets and performance were audited by a CPA.