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Tracing Through Exchanges. Direct Exchange - P can trace through direct exchanges as in Problem 8-1 – direct exchange of stock-cash-stock . Exchanges & Commingling If D commingles P’s stolen cash with his own, P must use the tracing fictions/presumptions: D spends his own $ first

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tracing through exchanges
Tracing Through Exchanges
  • Direct Exchange - P can trace through direct exchanges as in Problem 8-1 – direct exchange of stock-cash-stock.
  • Exchanges & Commingling
    • If D commingles P’s stolen cash with his own, P must use the tracing fictions/presumptions:
    • D spends his own $ first
    • New $ lawfully acquired is Ds unless D manifests an intent to replenish P’s $
    • D invests P’s $ first

1 & 3 can be used at P’s election to maximize P’s recovery although can only use in “real time.” 2 must be used as it is stated.

    • Use of these presumptions with the ledger system will illustrate the lowest intermediate balance rule (without consciously applying it)
    • LIB – If total balance of account falls below the value of the stolen item deposited in the account, the lowest balance prior to the next deposit of P’s $ (or adjudication) limits what P can get for that particular property
tracing into swelled assets
Tracing into Swelled Assets
  • If D is bankrupt & P can trace into assets that are now worth more that what P lost, court will limit P to amount that she actually lost
    • Equitable lien – device that secures a monetary judgment in the amount of loss by creating a security interest in specific property. Gives holder of the lien the right to force a sale and have the proceeds of the sale applied to pay of the security interest.
      • P can force sale, get amount of her losses and then the remainder goes back into the bankruptcy estate for unsecured creditors.
  • If D is NOT bankrupt P can trace into assets and keep the entire amount.
facts common to all tracing problems
Facts Common to all Tracing problems
  • Scum manages a trust fund for his mother which contains the following:
    • 100 shares Microsoft at $30/share
    • 100 shares of Exxon at $50/share
    • 100 shares of Walmart at $60/share
  • Scum maintains his own checking account which, at the beginning of each problem, has $10,000 in it.
  • Due to financial difficulties, after the actions identified in each problem, Scum eventually goes bankrupt making a damage judgment essentially not worth it.
  • Each transaction in each problem occurs in chronological order on a different day with the balance immediately being recorded.
on an exam
On an exam
  • It is fine to use a ledger to illustrate your work on an essay question (assuming a bank account is involved).
    • You don’t need to use columns with lines (you can simply create rows of numbers with tabs if you are working on computer). Alternatively, computer users can just use a bluebook for this problem if it makes them more comfortable.
  • Show your work out to the side of the ledger – i.e., indicate the purpose of the deposits/withdrawals and the presumptions you use.
    • Don’t just write “presumption #1” without telling me what that means somewhere in the answer. That doesn’t let me know that you understand what is going on.
  • On a multiple choice question, you simply have to do the work and see which answer it matches with
what is contempt
What is contempt?
  • A court’s power to protect itself and its orders
  • Generally arises in two situations:
    • A party or witness (contemnor) acts disrespectfully toward a judicial body (i.e., disruption in the courtroom, etc.)
    • A party violates a court order that applies to that party (e.g., an injunction)
kinds of contempt civil compensatory contempt
Kinds of contempt – civil compensatory contempt
  • Compensates non-contemnor for its losses/contemnor’s gains due to contemnor’s violation of court order
    • Responsibility for proof of harm lies w/ non-contemnor
  • Can be imposed whether violation is willful or merely inadvertent
  • Initiated by motion of aggrieved party – civil procedures apply
    • Movant must show violation of order by clear and convincing evidence
kinds of contempt coercive civil contempt
Kinds of contempt – Coercive civil contempt
  • Order designed to coerce contemnor to comply with court order in the future.
    • Typical methods of coercion - Court jails contemnor until compliance OR fines for every day of non-compliance (fine is usually payable to the gov’t)
  • Coercive civil contempt is viewed as remedial rather than as punishment
    • Contemnor “holds the keys to the jailhouse door”
  • Civil procedures typically apply (But see Bagwell)
    • Aggrieved party typically initiates by motion UNLESS it is a summary contempt (e.g., in-court refusal to testify) where court is vindicating own rights
kinds of contempt criminal contempt
Kinds of contempt – criminal contempt
  • Designed to punish past conduct – vindicate court’s authority
    • Characterized by the imposition of a determinate fine or jail sentence as a result of past behavior – all fines payable to the state
  • “Intent” requirement – contempt imposed only for willful violations
    • Willful – purpose or knowledge
  • Most (but not all) of the procedural protections applicable in criminal proceedings apply
    • PBRD, jury trial for certain $ amounts, double jeopardy . . .