Question 1 (50 minutes suggested). In mid-1996 Tom Tennant had a new job in a new town--the town of Provo, in the State of Deseret. He needed a place to live, and saw an ad in the newspaper for a "two-bedroom duplex for rent." The owner of the duplex, Len Lesser, lived in one half of the duplex, and offered to rent the other half to Tom. Tom signed the following lease with Len:
 

Tom Tennant hereby leases for a period of one year from Len Lesser the duplex unit known as 123A Main Street, Provo, Deseret. This lease shall commence July 1, 1996. Tennant shall be responsible for all necessary maintenance and repairs on the unit, and shall use the premises exclusively for residential purposes. Rent shall be $1,000 per month, payable in advance.

/s/ Tom Tennant /s/ Len Lesser

Tom mentioned to Len that he also needed to purchase a car, and Len offered to "throw in" the rental of an extra car he owned, a 1988 Civic, for an additional $100 per month. Tom agreed. Tom moved in and began paying Len $1,100 per month. When the lease term ended on June 30, 1997, neither party made any comment about it. Tom continued to live in the duplex unit, use the car, and send Len the full rent.

In July 1997 Tom lost his job and decided to go into the telephone survey business for himself. He converted the living room of his duplex unit into a reception area and set up one bedroom as an office with a bank of phones, a computer, fax machine and copier. He hired several local teenagers to work for him. No mention of this change was made to Len. Tom continued to sleep in the other bedroom and to cook in the kitchen.

On September 1, 1997 the duplex's waste disposal system (a septic tank in the yard behind the building) completely clogged up. It became impossible to flush either of the two toilets in Tom's unit. He immediately complained to Len, but Len took no action. After a month of nagging Len, Tom became so exasperated that on October 1, 1997 he moved out of the unit, removing all of his furniture and office equipment. He has paid no rent for October or thereafter. Len was not at home when Tom moved out, and did not discover that Tom had vacated the property until October 5.

As Tom was moving out, a young woman appeared at the duplex and announced that she was Len's secretary. She said she was there to pick up the Civic. Tom asked for identification, and she showed him a letter, apparently on Len's letterhead and signed by Len, stating that she was authorized to obtain the car from Tom. She also showed Tom her driver's license, the name on which matched the information in the letter. Tom gave her the keys and she drove away.

When Len discovered that Tom had vacated the property, he filed a suit against Tom seeking to recover (1) rent on the real estate for 9 additional months at $1,000/month, or $9,000; (2) damages of $1,800 on account of Tom's improper business use of the unit, based on an additional commercial rental value of $200/month; and (3) $3,000 for loss of the car. The young woman who picked up the car did not work for Len or have any connection with him. The letter she showed Tom was a forgery, and neither she nor the car has been seen since. The duplex unit that Tom had occupied remains vacant.

Please evaluate Len's claims, discussing all relevant legal theories. The State of Deseret has no relevant statutes. You may assume that under Deseret law Len has no duty to mitigate damages following Tom's vacating the property.
 

Question 2. (50 minutes suggested) Donald Tromp was a wealthy real estate investor in the city and state of Nooyawk. He had two ex-wives and felt a moral responsibility to provide generously for them. On January 1, 1996 he executed two deeds to them, conveying two of his office buildings, the Seegram Building and the Deegram Building. However, he used different wording in the two deeds.

The Seegram Building was conveyed "to Ivana and Marla as tenants jointly in fee simple absolute, with the survivor to take the property." The Deegram Building was conveyed "to Marla so long as she operates and maintains the building in a competent manner, and then to Ivana if and when the building is ever not operated in a competent manner." Ivana was living at that time in California, and had no particular interest in real estate. Marla was living in Nooyawk, and she personally took over management of both buildings. She was highly skilled and competent, and did an excellent job of managing them. She collected the rents from the tenants in the offices in both buildings, paid all operating expenses, and sent one-half of the net rents from the Seegram Building to Ivana each month.

Ivana decided to produce a major motion picture starring herself, and to raise capital for the venture she borrowed $50 million from Bernie Byers, a California tycoon, giving him a mortgage on her interest in the Seegram Building as security for repayment of the loan. This mortgage from Ivana to Bernie was recorded on July 1, 1996, and the debt was due one year later, on July 1, 1997. However, Ivana knew little about film production, and the film was never completed. She was unable to repay the money she owed Bernie when the loan fell due, and it remains unpaid.

Unfortunately, Marla fell down an elevator shaft in the Seegram Building in October 1997 and was killed. She died intestate, and her sole heir was her mother, Mabel. Mabel had no real estate management experience; she took over operation of both buildings, but everyone concedes that she has been disastrously incompetent in running them.

Please write a memo discussing two general questions.

(1) Does Bernie have an enforceable mortgage on any interest in the Seegram Building, and if so, on what interest?

(2) Who owns the Deegram building?

Consider all plausible constructions of the language used by Donald, and discuss all relevant legal theories. You may assume that the law of Nooyawk governs all issues, and that Nooyawk has no relevant statutes, but follows the common law with regard to cotenancies, estates, future interests, and the Rule Against Perpetuities.