February 2022 Second Example Ten-point Answers to Virginia Essay Questions
February 2022 - QUESTION 8 – VIRGINIA BAR EXAMINATION
Paige inherited an antique rug from her great aunt. She took the rug to Daniel’s Persian Rugs and Antiques (DPRA) in Salem, Virginia to have it cleaned. When Daniel, the owner of DPRA, unrolled it, he became very excited and stated that the rug was a rare hand knotted silk and wool Isfahan rug from Iran. He commented that it was very valuable. They both took pictures of the rug. Daniel told Paige to return in four weeks to pick up the cleaned rug because he had a backlog of rugs for cleaning. Daniel gave Paige a ticket for cleaning that stated: “Isfahan rug – blended silk and wool. 4 x 6 feet. Clean for $200.” On the back of the ticket in small writing it stated: “The parties hereto agree that the limit of liability for any services of DPRA is $1,000.” Paige never read the back of the claim ticket and it was not discussed with Daniel.
After Paige left the store, Daniel showed Luther, one of his employees at DPRA, the rug and explained that it was rare and in exceptional condition. He told Luther that Isfahan was the capital of Persia and that the rug was from the early 1700s. He estimated the value at $25,000. Daniel placed Paige’s rug in the section of rugs in his store in line to be cleaned until he could get to it the following week.
The next day, when Daniel was not working, Barry came into the store and asked Luther if they had any “very special rugs.” Barry was a wealthy antique collector and had purchased many items from the store over the years. Luther told Barry that there was a very valuable Isfahan Persian rug available for $15,000. Barry asked to see it and Luther took Paige’s rug from the back and unrolled it. Barry agreed to buy the rug and paid with a check for $15,000. Luther told Barry not to make the check payable to DPRA, because he would stamp the store name on the check. However, after Barry left with the rug, Luther made the check payable to himself. Luther called Daniel the next day to say he would be out for at least a month because he tested positive for COVID-19. Luther cashed the check, but never returned to work and his whereabouts are unknown.
A week later, Daniel searched for Paige’s rug as it was next in line for cleaning. He could not find it anywhere and called Paige to tell her that he was very upset, but he had misplaced or lost the rug.
A few weeks later, Paige attended a party at Barry’s house. Barry showed the guests the rug he just acquired. Paige looked at the picture of her rug on her phone and realized that this is her missing rug. She explained the situation to Barry in private and he told her that he paid $15,000 for the rug and it belongs to him. Barry, Paige, and Daniel met the next day at the shop. They involved the police and ultimately learned of Luther’s actions. Barry is still in possession of the rug. Paige and Daniel have filed criminal charges against Luther.
|(a)||What must Paige prove to establish a bailment and breach of bailment against DPRA for the rug? Explain fully.|
|(b)||What defense(s) to Paige’s bailment action might DPRA reasonably raise, and is it likely to succeed? Explain fully.|
|(c)||What right, if any, might Barry assert to the rug and is he likely to succeed? Explain fully.|
February 2022 - QUESTION 8 – EXAMPLE ANSWER #1
(a) Existence of a bailment
In order to establish a bailment and breach of bailment, Paige will have to prove that she entrusted the rug to DPRA with a specific purpose and the parties created a bailment with an intent to carry out that purpose. A bailment occurs when the owner of property (bailor) entrusts said property to the bailee without conveying title, with the intent that there be a bailment. Paige will have to prove that she entrusted the rug to the care of DPRA and that both parties entered into the bailment with the intent that one be created.
If a bailment is for the benefit of both the bailor and the bailee, the bailee owes a duty of ordinary care. This includes a duty to return the bailed property to the bailor. To establish the breach, Paige will need to show that DPRA failed to exercise ordinary care over the bailed property.
(b) DPRA's defenses
DPRA is likely to assert the defense that it is not liable for monetary damages as a result of the loss of the rug beyond $2,000 because of the $2,000 limitation of liability on the cleaning ticket. This defense is likely to fail because the limitation on liability was never discussed and was not conspicuously placed on the label so that Paige would notice it.
DPRA may also raise the defense that it did not breach the duty of ordinary care and that it is not liable for the criminal conduct of its employees. Under this defense, DPRA is likely to succeed.
Under the doctrine of respondeat superior, employers are liable for the actions of their employee agents if those actions fall within the scope of employment. However, employers are not liable for the criminal conduct of their employees.
Upon receiving the rug, the store owner placed the rug in the section of the store with other rugs to be cleaned. From this set of facts, it can be assumed that this is the ordinary care with which rugs are treated at DPRA. DPRA will argue that it is not liable as a bailee because the loss or damage to the rug was not the result of DPRA failing to exercise ordinary care over the bailed property. Paige may argue that ordinary care over a $25,000 rug might include storing it in a more secure location and limiting which employees have access to it. However, as she brought the rug to DPRA to be treated as an ordinary antique to be cleaned and did not request any special care when the bailment was agreed to, that argument will likely fail. As such, DPRA is likely to succeed on this defense.
(c) Barry's rights to the rug
Barry will be able to assert his right to ownership of the rug as a bona fide purchaser for value. Generally, a seller is not able to convey title which he does not have. However, even in cases of stolen property, a bona fide purchaser for value is able to prevail against the original owner in his claim to a right of possession in the property. A bona fide purchaser (BFP) is one who purchases the item for just consideration without notice of any fraud or encumbrances on the title at the time.
Barry purchased the rug for $15,000 and did not know that it belonged to Paige. Further, Barry purchased from a rug merchant who ordinarily deals in goods of this kind. In reliance on Paige will argue that Luther telling the Barry not to make the check out to DPRA should have given him notice that there may have been a defect in title, but this argument will likely fail. As a BFP, Barry will have a superior right to the rug and Paige will have to pursue a claim for damages.
February 2022 - QUESTION 8 – EXAMPLE ANSWER #2
(a) Establish Bailment and Breach of Bailment
Establishing a Bailment
Under Virginia law, establishing a bailment requires: (1) a bailee to take possession of items; (2) the bailee to consent to the bailment; and (3) the bailment knows of the items in the bailment. Here, a bailment was established because DPRA took possession of Paige's Persian Rugs when Paige took the items to the store. DPRA consented to the bailment by agreeing to clean the rug, and DPRA knew of the item in the bailment, because they knew of the rug and also its value. As the claim ticket said, DPRA knew it was a "Isfahan rug - blended silk and wool. 4 x 6 feet." Therefore, Paige will be able to establish a bailment was created.
Establishing a Breach of a Bailment
Under Virginia law, establishing a breach of a bailment depends on whether the bailment was for the benefit of the bailor, the baile or both. A bailment soley for the benefit of the bailor (the person giving the items for bailment) requires the bailee (the person/entity looking after the items) to act with slight diligence, meaning that a breach of a bailment will be found if the bailee acted with gross negligence. A bailment solely for the benefit of the bailee requires the bailee to act with great diligence, meaning that a breach of a bailment will be found if the bailee acted with slight negligence. A bailment for the benefit of both the bailee and bailor will require the bailee to act with ordinary care.
In addition, if the bailee acts outside the scope of the bailment, they will be subject to absolute liability for damage done.
Here, the bailment was for the mutual benefit of Paige (the bailor) and DPRA (the bailee). Because of the bailment, Paige got her antique rug cleaned, but also because of the bailment, DPRA was compenstated for holding the goods by Paige. The facts tell us that Paige would pay $200 for DPRA to clean the rug. As such, a breach of the bailment would be found if DPRA violated ordinary care.
(b) Defenses to Paige's Bailment Action
DPRA can raise the defense to Paige's bailment action that DPRA limited liability to $1,000 as seen on the claim ticket Paige received. This defense will likely fail. DPRA can also raise the defense that Luther's actions where the actual cause of the rug being sold to Barry and that DPRA should not be liable for Luther acting outside the scope of his employment. This defense will likely succeed.
Under Virginia law, a professional bailee's waiver of liability is disfavored and therefore will be strictly construed. As part of that, a claim ticket limited liability will be found valid if the person receiving the ticket had actual knowledge of the liability limitation. Here, DPRA is a professional bailee because they are the business of taking other items, such as antique rugs, for care and cleaning and returning them to their owners. DPRA gave Paige a ticket that stated "The parties hereto agree that the limit of liability for any services of DPRA is $1,000." However, the writing was conscipicous; it was a small writing on the back of her claim ticket. The facts also tells us that Paige "never read the back of the claim ticket and it was not discussed with Daniel." As such, Paige did not have actual notice of the liability limitation, and DPRA's defense of such against the bailment will not succeed.
Luther Acting Outside the Scope of His Employment
Under Virginia law, an employee is an agent of the their employer (the principal). As such the employer will generally be held liable to the employee for tortious acts if the employee was acting within the scope of her employment, under the doctrine of respondant superior. Scope of employment includes acts expressly and impliedly authorized by the employer to conduct business. Detours to this duty will be held as the employee still acting within the scope of employment, but frolic are more significant deviations that the court would find any acts that occur during a frolic is outside the scope of employment and the employer will not be held liable for these actions.
Here, Luther is an employee of DPRA and therefore is an agent to DPRA's principal. As such, DPRA is responsible for any tortious acts done by Luther in his scope of employment. At first, Luther's sale of Paige's rug to Barry was within Luther's scope of employment with DPRA. Luther selling antiques appears to be within Luther's job description of working at DPRA. However, Luther had been informed by Daniel that the rug was rare and in exception condition, and Daniel estimated the value of the rug was at $25,000. Luther acted outside his scope of employment when he told Barry "not to make the check payable to DPRA," but instead Luther "made the check payable to himself" when Daniel left. Such actions were outside the scope of Luther's employment with DPRA, and this defense will likely succeed for DPRA against Paige's bailment action.
(c) Barry's Rights to the Rug
Barry may have rights to the rug as a bona fide purchaser, but he will be unlikely to succeed because he did not take for value or in good faith.
Under Virginia law, a person may have rights to personal property against another if they are a good faith bona fide purchaser for value, which would require the person not to have notice of other claims to the property and to pay around fair market value for property, unless it's a gift. Here, Barry is a "wealthy antique collector and had purchased many items from the store over the years." As such, Barry would likely have known that the value of the rug was higher than the $15,000 that Luther told him was the price of the rug. The facts do not indicate, but Barry might also should have known that Luther saying not to make the check payable to DPRA because he would stamp the name of the store on it was outside the realms of what was typically done at the store and should have raised alarm bells. Even if that is not the case, it is enough that Barry likely knew the value of the rug and did not take it for value that will defeat his claim to the rug against Paige's.