COMMUNITY PROPERTY
FINAL EXAMINATION
PROFESSOR C. A. FRANK
SPRING 2003

INSTRUCTIONS

1. This is a closed book examination. No materials are allowed.

2. You have two (2) hours to complete this exam.

3. The exam consists of two (2) essay questions of equal value. The suggested time for each essay question is one hour but you may allocate your time as you wish.

4. In grading the essay questions, considerable weight is given to the organization of your answers. I therefore suggest that you devote time to analyzing and outlining your answer before writing. Your answer should be directed to an intelligent person who is NOT an expert in the area of community property.

5. Your answer should demonstrate your understanding of California community property as applied to the facts presented. Conclusions without explanation nor analysis will not receive credit.

6. All facts take place in California and all parties are residents of California unless otherwise stated.

7. In the blue books provided to you, please write your answers on the right hand side of the page and double-space your answer (written or typed).

8. Write your exam number on your exam envelope, at the top of this question packet and your used blue books. Do not use your name, student ID number or Social Security Number on any exam materials.

9. At the conclusion of the exam, return all exam materials to the exam envelope and submit it to the proctor. Do not seal the envelope.

10. GOOD LUCK! Have a wonderful summer.

ESSAY QUESTION I

Harold and Wilma met in 1965 at a Grateful Dead Concert in New York. Harold was 18, and unknown to him, Wilma was only 16. Deciding that it was love at first sight, they drove Harold’s van across the country and got married in California before a justice of the peace.

Harold sold his van for $1,000. They used half to pay the security deposit and first month’s rent on an apartment in the Haight. Harold gave the other $500 to his friend “Wacky Steve” in exchange for a note saying Harold had a 10% interest in the company he was starting called “Apples”. Wilma asked Harold not to give Steve the money because of their limited finances. In front of Steve, Harold told her not to worry, “everything he had was her’s and they would soon have plenty.”

Harold found work as a garage mechanic at the auto repair shop called Cars-R-Us and Wilma worked in Woolworth’s. Over the next 2 years, they saved $5,000 from both of their wages, which they stashed in their mattress. In 1970, Wacky Steve approached Harold desperate for funds for his company. Without telling Wilma, Harold took the mattress $5,000 and gave it to Wacky Steve in exchange for him signing and recording a deed granting Wilma and Harold a 20% interest in the house Steve owned.

Over the next few years, Steve’s company did well. In 1985, Harold sold the 10% note in Apples for $200,000 and purchased Cars-R-Us with the proceeds. Harold started working long hours at the shop, but continued to draw the same $3,000 per month mechanic’s salary.

In 1995, while working under a car hoisted on a hydraulic lift, the lift gave way, and the car fell on him. Harold was left a paraplegic as a result of the accident and stopped working. He hired a manager for $5,000 per month to run Cars-R-Us for him. The business was worth $500,000 at this time.

Harold also sued the company who manufactured the hydraulic lift and won a judgment for 5 million dollars. He used the money to buy and furnish a home in the Marina in which he had an elevator and ramps installed, and 2 vehicles specially equipped for his condition. He opened a brokerage account in his name with the remaining million dollars of the judgment.

Meanwhile, Harold and Wilma have grown apart. Harold had an affair with his physical therapist Mary, and fathered a child with her. Mary sued Harold and obtained a child support award against him. She attached onto a joint bank account in both Harold and Wilma’s name. A year later, Wilma learned about the child and the affair. She immediately filed for a dissolution. Cars-R-Us is still worth $500,000.

How should the court characterize and divide the parties property and deal with any reimbursement rights, if any? Make sure to discuss what Wilma’s attorney would argue and any counter arguments Harold’s attorney would make.

ESSAY QUESTION II

In 1982, while on a trip to Las Vegas to celebrate turning 21, Jane won a jackpot of $400,000. She returned home and used $300,000 of her winnings to buy a house in the Marina district of San Francisco. She put $80,000 in a brokerage account, the balance being used to furnish the house and go on a shopping spree.

Jane finished college and started her career as a copy editor by working as an assistant in an ad agency. About a month after she started work she was talking to Pinky Pizazz, a co-worker, about her Las Vegas winnings. The next day, Pinky’s handsome and suave older brother, Harry Pizazz, came into the office. He asked Jane out to dinner, and a whirlwind courtship ensued. Two months later, Harry proposed to Jane and they were married in Las Vegas in July 1983.

In August 1983, Harry informed Jane that he would like to go to school to be a “thespian” and model. To pay for Harry’s schooling, Jane agreed to take a $100,000 mortgage on her house to finance his education. The realtor put all the documents and new deed in both Harry and Jane’s name as joint tenants. Seeing this, Jane balked. However, Harry stated that it was understood that the house was hers. This was just so they could get the financing. In love, Jane believed him and signed the papers in December 1983. The house was worth $500,000 at this time.

After they got married, Jane had opened 2 bank accounts in her name. One had her wages deposited into it. The second at UC Bank contained the money from the mortgage and her income from her brokerage account. Jane used her wages to pay the mortgage.

During the next 2 years, Harry spent over $100,000 studying his craft. He hired vocal and acting coaches to complement his schooling at the San Francisco Actors Studio. He spent thousands of dollars on his credit cards, which he opened during the marriage to purchase the right “attire” for his chosen career. When Jane questioned the amounts, Harry would get angry claiming she was trying to ruin his career.

Jane kept meticulous records on the bank accounts, recording all deposits of her brokerage income and Harry’s “school” expenditures. She withdrew $10,000 from UC Bank in July 1985 and purchased stock in ABC Company in her name.

By 1986, Jane was fed up with Harry. He was still “going to school” and not working. She told him the marriage was over. She changed the locks and threw his belongings out on the front lawn. When he tried to get in she called the police. He told her she better “watch her back” and fled. Jane thereafter found papers in what had been his study showing he had recently given Pinky $30,000 and a $20,000 gold Cartier watch.

About a month later, Harry hired “Tony the Mark” to kill Jane so he could get the house. Unfortunately for Harry, Tony was an undercover officer who arrested him for attempted murder. Harry took a plea bargain and is now about to be released.

Jane has hired an attorney to file for dissolution. Her house is now worth one million dollars, and she paid $50,000 of the mortgage principal after she kicked Harry out. How should the court characterize and divide the parties property, and reimbursement rights, if any? Make sure to discuss what Jane’s attorney would argue and any counter arguments Harry’s attorney would make, as well as any additional remedies available to Jane.

End of Exam