1997

[Torts]

1F. He purchased from Homeco, a local home improvement f—e_ U store, a concrete cutter manufactured by Conco, which had a blade manufactured " by Bladeco. He then took the concrete cutter home and assembled it following the instructions

[Business Associations]

2F. Graphic, Inc. (Graphic), is a California corporation that sells office copying equipment. Its Articles of Incorporation prohibit Graphic's sale of paper products. Graphic's common stock is registered for trading on a stock exchange. Frank, Graphic's president, recently signed a contract with Papco on behalf of Graphic to buy a paper mill owned by Papco. Frank intends to reveal the contract for the first time at a Board of Directors meeting next week.

Frank recently received a letter from Alice, who owns 9.2% of Graphic's common stock. Alice has asked to "look at a list of Graphic's shareholders and all contracts signed by Graphic in the past three months." Frank directed the corporate secretary to write to Alice denying her request, which was done.

Graphic's accountants advised Frank that Graphic will report a $5 million loss for its current fiscal year, which will be the only loss in its twenty year history. Frank then sold 100,000 shares of his Graphic common stock through his broker for $25 per share. The sale included 20,000 shares he had purchased two months ago by exercising a stock option at $22 per share.

Frank called a press conference at which he stated that "Graphic has signed a major contract and will have other news to announce after its Board of Directors meeting." Alice heard about the press conference and purchased 5,000 additional shares of Graphic common stock at $28 per share through her broker. When the news of Graphic's fiscal year loss became public, the price of Graphic stock declined to $20 per share.

Alice wishes (1) to compel Graphic to make available for her inspection the shareholders' list and all contracts signed in the last three months, (2) to recover her loss on her recent stock purchase, (3) to force Frank to disgorge the profits on his stock sale, (4) and to have the Papco contract declared invalid.

What are Alice's rights and remedies, if any, with regard to (1) through (4) above? Discuss.

[Real Property] [Remedies]

3F. Debbie purchased an ocean front vacation house located on Lot #1. Shortly thereafter Peter purchased the ocean front house located on adjoining Lot #2. The houses and lots are comparable in size, value and age.

After his purchase, Peter hired a surveyor to lay out the boundaries of Lot #2. The surveyor reported that a portion of the porch of Debbie’s house is on Peter’s property. In particular, her 10-foot wide porch extends laterally 7 feet onto Peter’s property. The encroachment was made by the original developer 25 years before Debbie and Peter purchased their properties.

Six months after learning of the encroachment, Peter commenced an action to compel Debbie to remove the porch from his property.

1. How should the trial court rule on the merits of Peter’s action? Discuss.

2. If the trial court issues a mandatory injunction requiring Debbie to have the porch removed within 30 days, but Debbie does not comply, what procedural steps should Peter take to make her comply and what should be the result? Discuss.

3. If the trial court concluded that Debbie wilfully disobeyed the injunction and fines her $1,000, but on Debbie’s appeal the appellate court concluded that the injunction should not have issued, how should the appellate court rule on whether Debbie must pay the $1,000 fine? Discuss.

4.If Peter had not commenced his action until one year after his discovery of the encroachment and Debbie had moved to dismiss the action because of this delay, how should the trial court rule? Discuss.

[Real Property]

4F. Tenant entered into a written lease of an apartment with Landlord on January 1,1995. The lease provided that Tenant would pay $12,000 per year rent, payablein $1000 per month installments, commencing immediately.Tenant moved into the apartment. Soon thereafter Tenant was visited byInspector, who told Tenant that landlord had received numerous warnings overthe years about the unsafe electrical wiring in the bathroom, and had been citedand fined once for it. Tenant called Landlord and asked him to fix the wiring.Landlord promised to send someone to fix the wiring, but when no one cad comefor several weeks, Tenant decided to fix the wiring himself. While he was doingthe work, he also put mirrors on the ceiling and tore out the tub and replaced itwith a whirlpool bath.A few months later, a noxious slime began oozing from the fixtures in the kitchen sink. Tenant complained of this condition to Landlord, but Landlord refused tohave it fixed. The ooze continued, and it became so bad that Tenant was forcedto stop using the kitchen. Tenant reported the problem to Inspector, who causedLandlord to be cited and fined for the condition. Despite this, Landlord did notmake the repairs and the kitchen remained unusable. Tenant has remained inthe apartment but has stopped paying rent.On December 1, 1995, Tenant received a registered letter from Landlord givinghim notice to vacate the apartment on January 15, 1996.

In a subsequent telephone conversation, Landlord told Tenant that the notice was given because he was tired of Tenant’s demands for repairs and angry because of the fine.What are Landlord’s and Tenant’s rights and obligations? Discuss.

[Professional Responsibility]

5F. David has been arrested for and charged with murder and robbery. David made a telephone call to Attorney, a member of the California Bar. Attorney came to see David in the small rural jail in which David is being held and agreed to represent him. In an interview in the jail, David told Attorney that he killed the victim and stole the victim’s shirt, shoes, and ring, and was wearing them when he was arrested. David also told Attorney that he had hidden the shirt and shoes as best he could in his cell, and that he had thrown the ring out of the cell window into a trash can behind the jail. David is now bare-chested, bare-fingered, and bare-footed. Attorney told David to do nothing else to hide or destroy evidence and David reluctantly agreed. Attorney then left, went behind the jail and looked into the trash can. The trash was empty except for a ring. At this point, Attorney heard a noise, looked up, and saw David throw a pair of shoes out of the cell window. The noise also attracted a police officer, who discovered the shoes and ring. The police officer asked Attorney what he knew about the ring and shoes. Attorney refused to tell the police officer anything about them. Attorney returned to the jail and spoke to David again. David told him that he had torn the shirt into strips, which he plans to burn. Attorney told David not to burn the strips, but David insisted that he will burn them. Attorney is called before the Grand Jury investigating the murder and robbery.

Consistent with his ethical obligations:

1. Should Attorney have told the police officer anything about the shoes or the ring? Discuss.

2. Should Attorney tell the Grand Jury that David is threatening to burn the scraps of the shirt? Discuss.

3. May Attorney tell the Grand Jury anything about the other events described above? Discuss.

4. Should Attorney continue to represent David? Discuss.

[Community Property]

6F. In 1974, Hugh (H), a resident of Iowa, a non-community property state , began working there for Apex. Apex has an employee retirement plan which gives to each employee who retires after 20 years of continuous employment with the company the option of receiving either a lifetime monthly pension payment or an actuarially equivalent single

quasi-community property and gave all property over which he had power of testamentary disposition to G. What are the rights of W and G to each of the following properties?

1. The condominium? Discuss.

2. The office building? Discuss.

3.

[Evidence]

Dave has been charged with one count of selling cocaine on May 30 of this year. The key government witness against Dave is Carl Smith. The government’s theory is that Dave and Carl together sold substantial quantities of illegal drugs, including the particular sale which is the subject of this indictment. Carl has pleaded guilty to a lesser offense and has agreed to testify against Dave. At the jury trial, Carl was called as the first witness and the following questions were asked and answers given:[Direct Examination of Carl]Q: What is your name?A: Carl Smith.Q: Where do you live?A: 1117 North University, here in town.Q: Are you acquainted with the defendant Dave?[1]A: Yes, we have been selling cocaine together for years.Q: Directing your attention to the evening of May 30 this year at approximately 7:00 pm, where were you?[2]A: I got home at about 7:00 that night. When I got there, I found a message on my answering machine from Dave.[3]Q: What message had Dave left you?A: He said that he had a guy who wanted a kilo of cocaine and that we were to meet him at the motel on the edge of town later that night. So I called Dave back and we worked out the details about where the two of us were going to meet before going to the motel.Q: What happened then?A: We met up together and took the coke to the motel. I went in and made the sale while Dave waited outside in the car.[Carl proceeded to testify in detail about the sale of cocaine]Q: Now, you were arrested the next day for the sale of that cocaine, weren’t you?A: Yes.[4]Q: At that point, after you were asked to cooperate with the government, did you plead guilty to possession of cocaine and agree to testify truthfully at this trial?A: Yes.Q: Did you testify before the grand jury in this matter?A: Yes I did.[5]Q: Was your testimony there the same as your testimony here today?A: Yes, it was. I told them the truth just like I’m telling it today.[Cross-examination of Carl][6]Q: Now, you are the same Carl Smith who was convicted of criminal assault in 1994, aren’t you?A: Yes.Q: And you’ve been on probation for that charge since 1994, haven’t you?A: Yes.Q: One of the conditions of your probation was that you not commit any criminal offense, wasn’t it?A: Yes.[7]Q: And you told your probation officer last week that you haven’t done anything illegal since 1994, didn’t you?A: Yes.Q: And that was a lie, wasn’t it?A: Yes.

At each of the seven indicated points, what objection or objections could reasonably have been made, and how should the court have ruled? Discuss.

[Constitutional Law]

A city ordinance enacted several years ago requires payment of an annual tax of $500 by eachhousehold in City with two or more children. The tax applies only to people who have become residents of City since the effective date of the ordinance. Its stated purpose is to reimburse City inpart for the additional public school expenses and costs of recreational facilities attributable to thenew residents.Paul and Pat, husband and wife, became residents of City since the effective date of the taxordinance and live alone with no children. They have filed suit against City in federal court for ajudgment declaring that the ordinance violates their rights under the U.S. Constitution to familialprivacy, to due process, and to equal protection.During discovery, Paul and Pat revealed that they are medically unable to conceive a chid and haveapplied to adopt twins. Although the court had ordered that this information remain confidential andall references to it were ordered sealed, City’s attorney has disclosed the information in a pressrelease. Paul and Pat have amended their complaint to allege a third claim against City: i.e., that thedisclosure by City’s attorney violated their privacy rights under the U.S. Constitution, entitlingplaintiffs to an injunction prohibiting further disclosures and allowing the court to impose sanctionsfor violation of its confidentiality order.

City has moved to dismiss the entire complaint on the following grounds:

(1) the plaintiffs lackstanding to challenge the tax ordinance, and

(2) that, in any event, none of the alleged constitutional rights claimed by Paul and Pat were violated by City.

How should the court decide City’s motion to dismiss? Discuss.

[Professional Responsibility]

Attorney Ann is a member of the State Bar of California and represents primarily low-income tenants. Frank, a friend of Ann, told her about an apartment complex that appeared to be very run down and to have many elderly tenants. Ann visited the building and was shocked at its dilapidated and unsafe conditions. Ann sent a letter to each of the tenants in the building, which stated: It has come to my attention that there may be ILLEGAL and UNSAFE conditions at your apartment building! I am an attorney experienced in this type of case, and I am willing to represent you in a lawsuit against your landlord regarding these conditions. CALL TODAY! Tom, a tenant, called Ann in response to the letter and told her he wanted to hire her to sue Landlord. He said that another tenant named Barbara, who is 82 years old and speaks only Spanish, also wanted to hire Ann. Ann met with Tom and Barbara. Since Ann speaks very little Spanish, and Tom is bilingual, he acted as translator. It became clear that Tom’s interest was in obtaining a money judgment and that Barbara’s interest was in obtaining an injunction requiring the landlord to make repairs. Ann, Tom, and Barbara signed a contingency fee agreement for Ann to represent Tom and Barbara in a lawsuit against Landlord. Under the agreement, Ann would receive 40% of any recovery in the case. Ann also separately agreed with Frank that she would pay him 10% of any fees she recovers in return for his having told her about the apartment complex. Ann filed a lawsuit against Landlord. The suit had a sound legal basis, and she handled it in a professionally competent manner. Ann and Tom worked together closely on the case, and before the case was resolved, he asked Ann to date him. He also gave her a free airline ticket to accompany him on a trip to Hawaii, which she accepted. Eventually, Landlord made a written settlement offer to pay money damages only, which Ann conveyed to Tom. Tom, without consulting Barbara, told Ann that he and Barbara accepted the offer. Ann concluded the settlement. What professional responsibility issues are raised by Ann’s conduct? Discuss. Sample Answer

[Civil Procedure]

Nearby residents were evacuated because of dangerous fumes released by a fire and explosion at anoil refinery owned by Danco in State A. Five of the evacuees, all of whom were residents of StateA, filed a joint civil action in state court in State A against Danco based upon State A tort theories.Each plaintiff is seeking compensatory and punitive damages. Plaintiffs’ compensatory damageclaims, based on the injuries allegedly suffered distinctly by each plaintiff, range from $30,000 to$35,000 for each plaintiff. Their claims for punitive damages are for “amounts to be determinedaccording to proof.”Danco is a State B corporation, with its corporate headquarters located in State C. Danco’s day-to-day operations are run from its several regional offices in states where it operates refineries, thelargest of which is located in State A. Danco’s oil-refining activities in State A are extensivelyregulated by a public regulatory agency. The regulatory agency is conducting an ongoing hearingto determine whether the fire and explosion were the result of any violations of the agency’s safetyorders.Danco removed the action to federal district court in State A. The plaintiffs moved to remand thelawsuit to state court on the grounds that Danco’s largest refinery is in State A and that there is anongoing state regulatory hearing. The motion was denied.Danco then filed its answer. Plaintiffs then moved to file an amended complaint naming Tom, aState A contractor, as a defendant, alleging that Tom had built the refinery and that Danco and tomare jointly and severally liable for plaintiffs’ damages. The court granted the motion to amend thecomplaint over Danco’s objection. Plaintiffs then renewed their motion to remand, and, overDanco’s objection, the renewed motion was granted.Did the federal district court rule correctly on:

1.The plaintiffs’ first motion to remand the lawsuit to state court? Discuss.

2.The plaintiffs’ motion to amend the complaint to name Tom as a defendant? Discuss.

3.Plaintiffs’ renewed motion to remand the lawsuit to the state court? Discuss.

[Business Associations]

Artis, a respected computer engineer, invented a unique computer device, but she lacked sufficient financial resources to manufacture and market it. Artis pre­sented to Ben, a wealthy acquaintance, a business plan for producing and selling the device. Ben and Artis agreed that: 1) Artis would form a corporation named "Compco" to manufacture and market the device; 2) Ben would provide the financ­ing by contracting with the corporation to loan it $1 million; and 3) Ben would receive periodic loan payments, a number of shares of the corporation equal to the number that would be issued to Artis and 20% of the net profits of the corporation for ten years.