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FALL EXAM

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Page 1Page 2Page 3Page 4Page 5EXAM # _____________________________TORTS I PROFESSOR DEWOLFFALL 2006 December 5, 2006FALL EXAMInstructionsDO NOT GO BEYOND THIS PAGE UNTIL THE EXAM ACTUALLY BEGINS.THIS IS A CLOSED BOOK EXAM! This exam will last THREE HOURS. You shouldplan on spending AT LEAST 20 minutes reading the questions carefully and outlining your answerson a separate sheet of paper. Before writing your answers, REREAD each question to be sure youhaven't missed anything.Bluebook Users: DOUBLE-SPACE your answers in the bluebook. Make sure you writeyour exam number on the cover of each bluebook. Use SEPARATE BLUEBOOKS for EACHQUESTION. Label each bluebook according to each question and, if necessary, book number, e.g.,"Question 1, Book 1"; "Question 1, Book 2"; "Question 2"; etc. Examsoft Users: Follow the proctor's instructions.You are welcome to use abbreviations, but indicate what they are, e.g., `Andropov ("A")would be sued by Brezhnev ("B"), alleging that A would be liable to B ... .'Plan on spending at least 15 minutes at the end PROOFREADING your answers. You maynot write ANOTHER WORD after time is called.The exam covers the subjects covered in Chapters 1-3 of the casebook. Do not address anyissues beyond that point, such as contributory fault, governmental liability, or other issues.A STATUTORY APPENDIX is provided that gives the law of this jurisdiction, the State ofEvergreen, on some issues. If no law is specified on the point you are interested in, please commenton the possible alternatives.Each question has been assigned a point total, and the exam as a whole has a point total of135. Spend the amount of time on each question reflecting its relative worth.The exams will be COLLECTED but a copy will be posted on the web.REMEMBER THE HONOR CODE! Don't identify yourself.MERRY CHRISTMAS!!!TORTS I, FALL 2006 EXAM Page 2 of 5QUESTION 1 (50 points)Philip Hoy owns Philip's Welding Services, Inc., which is located adjacent to his residenceon the ouskirts of Gilmore, Evergreen. Beginning in the fall of 2003, Hoy began experiencingproblems with the septic system that serviced both his home and his business. The essence of theproblem was that wastewater was not flowing from the septic tank into the drain field connected tothe septic tank, apparently because the drain field was so saturated with water that it could not absorbwastewater from the septic system. Hoy hired an expert, Walter Merschat, to investigate theproblems from his septic tank. Merschat concluded that excessive water from a nearby stockreservoir had raised the groundwater level in and around Hoy's property. The reservoir is locatedsouth and east of Hoy's property owned and operated by K.E. Miller. The reservoir is an on-channelreservoir filled by Little Rawhide Creek. Little Rawhide Creek flows generally south to north,through Miller's property and then through Hoy's property. Hoy's property is down gradient from thereservoir.Little Rawhide Creek is a seasonal creek, usually drying up in the summer or fall. Miller'sstock reservoir also historically dried up on occasion during the summer. In 2001, Miller had thereservoir reworked, primarily desilted, to improve its capacity to hold water. After the reservoir wasreworked, the reservoir held water better and no longer dried up, even when Little Rawhide Creekdried up.Merschat does not believe that the dam for the reservoir actually leaks. Instead, he concludedthat water seeps through the bottom of the reservoir and runs down to Hoy's property, therebycreating a high groundwater problem for him. Merschat based his conclusion on a series ofobservations: 1) Hoy's property is down gradient from Miller's reservoir; 2) the bottom of thereservoir is comprised of porous sand; 3) more water goes into the reservoir than comes out of it; and4) there is a correlation between high water levels in the reservoir and high groundwater levels at hisproperty. Merschat summed up his investigation as follows: "Water flows downhill and it goesthrough porous sediments. That's all you need to know."When confronted with this information, Miller sought advice from his own experts. He hasfound three experts who examined Merschat's report and criticize it for the following reasons:Merschat did not conduct a thorough enough investigation to allow for Merschat to conclude thatthere was any correlation between water in the reservoir and Hoy's high groundwater. Specifically,Merschat failed to adequately account for seasonal and annual groundwater level fluctuations, whichcould be as high as six feet; he ignored inspection reports from the Department of EnvironmentalQuality relating to the Hoy property; and failed to conduct appropriate sub-surface testing. One ofMiller's experts expert stated that Merschat's ultimate conclusion was based on "poor science." Inaddition, Miller's expert alleged that Hoy's property, as well as some of the surrounding property,had been subject to high groundwater conditions dating back to at least 1985. You represent Hoy. Please advise him as to the potential tort remedies he might seek againstMiller and the likelihood that he would be successful.QUESTION 2 (85 points)In 1998, Biesecker Road Commercial, Inc. ("BRC") acquired property located at 305Biesecker Road in Lexington, North Carolina. The property contained a commercial building andan above-ground tank used to store gasoline. On 15 April, 2002 BRC leased the property toBasyooni. Basyooni operated a convenience store which marketed gasoline pumped from the tanklocated on the property.When Basyooni leased the property, he also purchased the prior lessee's inventory. Basyoonialso continued the prior lessee's consignment relationship with Pace Oil Co., Inc. ("Pace Oil").TORTS I, FALL 2006 EXAM Page 3 of 5Basyooni orally agreed to market gasoline owned and provided by Pace Oil to his customers. PaceOil agreed to pay Basyooni one-cent for each gallon of gasoline sold. Pace Oil was solelyresponsible for servicing the gasoline pumps, the delivery apparatus, and supplying the gasoline.On 31 May 2002, Roger Page, president of Pace Oil, decided to exchange winter gasolinestored in the tank with summer gasoline. John Morgan and Troy Taylor, employees of Pace Oil Co.,traveled to the property and began transferring gasoline from and to the storage tank. The gasolinetransfer was conducted solely by Morgan and Taylor with a pump owned by Pace Oil. Two hoursafter the transfer began, the


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