Dolly is a successful business woman who owns 100% of her own company entitled, Furnishings Plus, Inc. The business consists of two stores located side-by-side on Cedros Street in Solana Beach. Furnishings Plus also has a web presence where they do approximately 80% of their sales via e-commerce.
This is Dolly’s full time business venture and her success has taken 5 years of very hard work and much personal sacrifice. She just got done paying back all friends and family for the money they loaned in her over the hard years. She now owns 100% of the stock, servers as the one Board of Director, and is the Corporation’s only Officer.
Molly is Dolly’s life-long best friend and Molly shops quite frequently at Furnishings Plus.
Molly is a very successful top print model known in the fashion industry for having perfect legs and has a long term contract with a major fashion designer in NYC.
Over coffee, Molly and Dolly decide they want to open a new business venture together that would incorporate Dolly’s business experience and Molly’s modeling fame. They plan to call it “Legs Plus” and will offer high end designer furnishings that are a perfect fit for everyday and designer bodies.
The new store will be located in La Jolla Village on Prospect and also plan to have a web store on the internet. They want to get started as soon as possible and be up and open for the coming spring season.
However, they are undecided as to whether to create the new company as a partnership, limited partnership, limited liability company, c-corporation, or s-corporation. They ask you for advice…
Please respond to the following numbered questions:
1) What are the advantages and disadvantages of each of the business forms listed as options? [partnership, limited partnership, limited liability company, c-corporation, or s-corporation]
To earn the Assignment points here of 10 points total… a complete response to #1 above is all you need to finish this Assignment 10!
However, if you need more points to substantiate an argument for a better overall grade in the course or you want to challenge yourself and have a little more biz law fun, I invite you to take on the following 24 questions about the ongoing Dolly, Molly, and Polly drama…
Then, one day following the formation of Dolly and Molly’s new business, Legs Plus…
Polly, who is Molly’s daughter, a recent graduate from Bishops’ High School, came into Furnishings Plus to look for a special item to take with her to college dorm room. Polly had $500 in graduation gift cash to spend. Upon entering the store Polly immediately fell in love with an antique vase that she felt would be a perfect reminder of home.
Dolly saw Polly admiring the vase and came over to see how she could help. Polly stated that she loved the item and asked Dolly is she thought it would work as a vase for keeping fresh flowers in her dorm room. Dolly said it would work perfectly for that purpose and that it would remind Polly of how much she is loved every day while away.
However, Polly noticed that the price of the vase was listed at $650 and was instantly crushed by the cost. Dolly asked how much money Polly could affords to spend and Polly said she was limited to $500. Dolly suggested that she would sell the vase to Polly for $500 cash, not run the sell through here register, so no sales tax, and Dolly and Polly would consider the discount saving as Dolly’s graduation gift to Polly. Polly excitedly jumped for joy and gave Dolly a big hug and a huge Hollywood kiss.
Just as this display of joy took place, Molly entered the store and saw her daughter’s excitement and friend’s embrace. Molly went to them and immediately asked what all the excitement was about.
Polly explained Molly’s gift to her and how the vase would be perfect for her dorm room. Molly was not as excited and stated that Polly should not spend all her $500 on a vase since she needed other practical items for her room.
Molly suggested that Polly let her pay for the vase as a added bonus reward for her good grades in high school and that Polly save her money for the more practical items. Polly agreed and Molly peeled off ten US Grants (fifty dollar bills) and handed them to Dolly, Dolly accepted as payment in full. All appeared to be satisfied with this solution.
As Molly and Polly left the store where Dolly found the vase, the ladies decided to cut across the landscaped parking lot divider and visit Dolly’s other store, Furnishings Plus Outlet. The store is located right next door on Cedros and serves as an outlet for discounted Furnishings Plus merchandise.
Molly thought that Polly would get a better value for her money and perhaps could buy all that was need for her dorm. When the two crossed the landscaped parking divider they stepped into an open hole left there the day before by the gardener. The gardener had dug up a broken sprinkler head that someone, doing the same thing had stepped on, broken, and it needed replacement. However, the gardener had no immediately replacement available and figured he would complete the job the next day. Upon stepping into the open hole both Molly and Polly fell hard to the ground with their package spilling across the parking lot.
Polly escaped serious injury but was scared to death and worried that her Mother was seriously hurt. In fact, Molly had a compound fracture of her left leg and it would require surgery, a pin, and leave a bad scare. Molly would miss several modeling assignments and endure weeks of painful rehabilitation.
To make matters worse, when Polly went to visit her mother in the hospital she placed fresh flowers in the new vase only to discover that it leaked water. That same afternoon Polly stormed into Dolly’s store and although Furnishings Plus was crowded with customers Polly, demanded to speak with Dolly. When Dolly came forward Polly burst into tears and cried out that the vase was defective and that Dolly had to return her money.
When Dolly explained to Polly that the money was not hers but Molly’s, Polly screamed out that Dolly was a liar, that Dolly was a dishonest merchant, and everyone in the store should be aware that her mother, Molly, was lying in a hospital bed suffering from the injury caused by Dolly.
Both Polly and Molly filed independent law suits against Dolly.
Dolly counter sued Polly. All are civil court cases.
2) Would this be a Federal or State Court matter? Why & Why not?
3) What legal cause(s) of action would Molly include in her complaint against Dolly?
4) What facts support each element of Molly’s claim(s)?(prima fascia case)
5) What would be the reasonable remedies that Molly could ask for in her suit with Dolly?
6) What would Dolly’s defenses be in the law suit filed against her by Molly?
7) What would the cause(s) of action be for Polly in her complaint filed against Dolly?
8) If Dolly filed a motion for summary judgment in the case with Polly what do you think would result and why?
9) What would be the remedies that Polly should ask the court to award her should she prevail against Dolly?
10) What would Dolly’s defenses be in the law suit filed against her by Polly?
11) What are the facts to support each element of Polly’s cause(s) of action against Dolly?
12) If Molly won a large award from Dolly in her suit and Furnishings Plus did not have enough insurance or assets to pay the entire amount, what could Molly do to try and collect the rest?
13) What would be the cause(s) of action in the suit filed by Dolly against Polly?
14) What would Polly’s best defense be in the suit filed against her by Dolly?
15) Dolly had to file bankruptcy on Furnishings Plus due to the award won by Molly, what type of bankruptcy might eliminate a deficiency judgment?
16) If Dolly and Molly no longer wanted to continue with their business, Legs Plus, together how would they go about closing that business and settling their business affairs?
17) If you were the mediator in the dispute between Molly and Dolly, what would you recommend as a fair and equitable settlement?
18) If you were the mediator in the dispute between Polly and Dolly, what fair and equitable resolution would you suggest to resolve the conflict?
19) If you were Dolly in this fact pattern what if anything would you had done differently?
20) How could Dolly prevent Molly’s accident from happening again?
21) If you were Molly in this fact pattern would you continue to work with Dolly and Legs Plus? Why and why not.
22) If not, then how would you dissolve the Legs Plus Company?
23) If you are Polly in this situation, would you have any legal rights in the transaction for the vase between Dolly and Molly? Why or why not?
24) Would Dolly be legally liable for the actions of the gardener if he were an independent contractor? Why and why not?
25) Is there any criminal liability here with any of the parties? Why or why not? This is your opportunity to demonstrate your understanding of the
