The ABA Model Rules generally provide the majority ethical rule standards governing the conduct of attorneys. California has some rules which are more strict, less strict or different that the ABA rules on various issues. As to advertising, in particular, California has detailed requirements requiring that ads be labeled and that any staged recreations or simulations be labeled, and also designating a number of practices as presumptively deceptive or misleading. That includes any guarantees or warranties of results, as one example.
The Television Ads
Lawyer advertising is commercial speech, which is subject to regulation that balances the First Amendment free expression rights with limitations such as that there is no constitutional right to make false statements.
Thus, while lawyer advertising is permitted, it must be truthful and not misleading.
A law firm is entitled to advertise its rates. The Jones & Smith (J&S) ad’s statement that while most firms normally charge a 33% contingency fee, they will charge 25% is potentially misleading in that it may not be true that most firms charge a 33% contingent fee. If that statement can be supported (and may well be true), the next problem is that the ad does not disclose that costs for advanced items will be recovered as well.
California requires contingency fee contracts to be in writing and to specify not only the contingency percentage but also whether costs are recovered before or after the contingency percentage is applied. The absence of that information (i.e., whether costs are recovered before or after the 25% contingency is calculated) may render the ad misleading.
The Internet-Free Advances
The offer of interest-free advances against prospective judgments in cases of clear liability of up to 50% of the firm’s estimated value is clearly an ethical violation, in several respects.
First, a lawyer is not permitted to acquire a personal financial interest in a case, apart from the permitted contingency fee. Lawyers may not pay to get a case. Lawyers also are generally not permitted to loan clients money. They may advance litigation expenses or sometimes necessary medical expenses necessary for litigation. California does permit loans but only after the representation is established and only if the client signs an IOU in writing.
The ad contemplates advances on loans even before the potential client has become an actual client.
Additionally, the parts of the ad that deal with “cares of clear liability” and “50% of the firm’s estimated value of the case,” are suggestive of guarantees or assurances of case outcome which, as noted above, are presumptively misleading and impermissible in California.
Mailings to Accident Victims
The Supreme Court has upheld targeted mail solicitations such as letters to accident victims. However, the ABA Model Rules and California impose various restrictions and requirements on such letters. Both the letters themselves and the outside envelope must note that it is a commercial solicitation. The information about the firm and its availability also must be truthful and not misleading. So the plan to mail letters is not ipso facto any ethical violation assuming that the accident information is obtained lawfully. Informing that the firm is available for consultation is permissible.
The plan to send flower arrangements to hospitalized victims that say, “compliments of Jones & Smith,” is not ethically permissible.
The plan to send flower arrangements to hospitalized victims that say, “compliments of Jones & Smith,” is not ethically permissible.
As noted above, any advertising has to be labeled as such. This would be considered advertising and would have to be labeled.
Second, there is a problem of direct solicitation. The law firm is not sending out a general mailing advising of its availability, but instead soliciting business from an individual.
Just as it is not ethically proper for a lawyer to fling his business card to an accident victim as he goes by (without any direct discussion) it would likewise be impermissible to solicit business by a card on a floral display.
Additionally, a lawyer may not offer payments or gifts to obtain business. A floral display sent to a friend or colleague with the compliments card would be permissible. A floral arrangement sent to a potential client to encourage him/her to hire the firm is not ethically permissible. It violates duties of fairness to other lawyers and of decorum to the public.
Use of Non-Lawyers
Non-lawyers may be used by lawyers to assist with legal tasks, subject to several restrictions. Lawyers may not share legal fees with a non-lawyer. The non-lawyers must be supervised by the lawyer(s) and the lawyers are responsible for any ethical breaches committed by their supervised. Additionally, it is ethically impermissible for lawyers to assist non-lawyers in the unauthorized practice of law.
Some of the activities contemplated here are proper for non-lawyers, such as fact investigating and witness interviews, as long as the paralegals and investigators observe client confidentiality and other strictures.
Some of the activities contemplated involve the practice of law, and the law firm is in ethical violation if it assist in that.
Meeting with clients to discuss settlements and settlement conferences to discuss releases and to execute other documents involve legal functions- judgments about the legal strength of claims and the evaluation of legal documents and their consequences. The paralegals and investigators should not be performing those functions.
Likewise, negotiations with insurance adjusters is not an investigatory function or a paralegal one. It involves legal evaluations and a number of legal judgments and legal strategies. That should be done by a lawyer. Paralegal or investigator involvement would involve the unauthorized practice of law. The law firm would be in ethical violation by assisting or allowing that to occur.
Supervising lawyers are liable for any ethical violations which they direct or know about and fail to correct.
I. Personal action
1. To compel a dividend
2. To dissolve Buildco
3. Pierce the corporate veil
4. Breach of corporate duties
(1) Majority shareholder's fiduciary duty to minority shareholders
(2) No bad faith
5. Fraud
(1) Material misrepresentation
(2) Reliance
(3) Damages
II. Derivative action
1. Duty of loyalty
(1) Majority shareholder's fiduciary duty to minority shareholders
2. Duty of care
(2) prudent business judgment
I. Peter v. Diane - Theories of Liability
Peter's restaurant business and his ownership interest in his real property have been compromised by the intentional and careless conduct of Diane. Diane's new office building encroach onto Peter's land. Her construction activities destroyed two dozen trees on Peter's land, thereby harming his garden and causing his restaurant to suffer financial losses. Peter will pursue theories of liability for each of his harms, and he will seek compensatory and punitive damages, along with restitution and equitable relief.
A. Encroachment of Office Building: Continuing Trespass, 1998-2000
Peter recently discovered that Diane built her office onto a ten inch strip of Peter's adjoining parcel of land. This encroachment is a continuing intentional trespass onto Peter's property, because in effect Peter has been ousted from a portion of his real property.
Diane did not know her building was encroaching on Peter's property until an unrelated town survey revealed the mistake. Her lot was narrow and she did not have much latitude in the design of her building, but it was her responsibility to construct her building on her lot and not the lot of her neighbor. Her conduct was intentional and Peter will be entitled to remedies.
B. Destruction of Peter's Ornamental Tree
During the construction of her building, Diane inadvertently destroyed two dozen trees that had been on Peter's property for years. Peter has several possible theories of liability for the damage caused by the loss of these trees.
1. Conversion
Peter's principle theory of liability for the loss of his trees is conversion. Diane's construction project was deliberate and the mere fact that she apparently did not intend to harm the trees will likely not serve as a defense. At a minimum, Diane's construction was done negligently, and she owed Peter a duty not to carelessly destroy his property. As discussed below, Diane's lack of bad intent may well serve to prevent from Peter from obtaining a substantial punitive damages award, but Diane certainly faces liability for the destruction of Peter's trees.
2. Trespass Causing Severance
Had Diane harvested the trees for some commercial purpose, Peter would have a case for trespass causing severance. Because she merely destroyed them, this cause of action is not very strong.
3. Waste
If Diane's lack of intent somehow were enough for her to escape liability for conversion, her conduct would be considered waste. She, or more likely her agents, came onto Peter's property and destroyed the trees. At a minimum Peter would be able to pursue damages under this theory.
C. Parking Lot: Encroachment- Continuing Trespass
Diane paid for the paving of a parking lot that is almost entirely on Peter's land. Her tenants have been using the lot since her building opened in 1998. As discussed above with regard to the office building, this encroachment constitutes a continuing trespass and will justify Peter recovering significant damages. Furthermore, Diane has been renting the Spaces for $50 a month and thereby directly benefiting at Peter's expense. He will seek restitution as well as compensatory damages.
D. Diane's Defense: None, other than a lack of knowing willfulness.
Diana made a mistake. She did not know that her building and parking lot encroached onto Peter's property- and, for that matter, neither did Peter. As discussed below, Diane's lack of knowing willfulness will be a defense to punitive damages, but it will not shield her from liability for her wrongful acts.
It is true that Peter did not bring his action until sometime between one and two years after Diane's misconduct. It is conceivable that Diane might raise a laches defense based on this delay, but it is likely that the statute of limitations will run from the date the encroachment was discovered rather than the date it started.
Few, if any, jurisdictions allow a party to obtain title to real property by adverse possession in less than two years. Diane will not be able to claim title to the property she had occupied.
E. Conclusion: Diane is Liable
Diane built her building and parking lot on her neighbor's property. Peter did nothing wrong. He will be entitled to seek damages, restitution and equitable relief, which is discussed in the following section.
II. Peter's Remedies
A. Damages
1. Encroachment of Building
Diane's office building sits on a ten inch strip of Peter's land. His damages would be measured by the fair market value of the strip of land. They also could be measured by the diminution in value of the remainder of Peter's land. To the extent that Diane has benefited financial from this wrongful occupation of her neighbor's land, she would be liable in restitution in order to prevent her unjust enrichment at Peter's expense.
2. Trees
As discussed above, Diane is liable for the destruction of these trees, probably under a conversion theory of liability. It is very unlikely that all two dozens trees were sitting on the ten inch strip of land the building was constructed on, and the facts do not indicate that they stood on the land occupied by the parking lot. Peter's ideal remedy would be damages to replace the trees and restore his garden, along with compensatory damages for the damages he suffered as a consequence of the loss of the trees.
a. Peter's increased Costs
Peter has to buy produce from outside suppliers at an increased cost compared to the produce he grew for himself under the filtered sunlight of the trees. Diane will be liable for damages to compensate Peter for these losses.
b. Peter's Damaged Reputation
Peter's reputation as a restauranteur has suffered because Peter no longer serves vegetables from his private garden. It may be hard to ascertain these damages with any certainty, but Peter will be entitled to recover to the extent he can prove his harm.
c. Peter's Incalculable Loss Business
The long term effect on Peter's business is characterized as "incalculable." If this means that his damages are uncertain, he will not be able to obtain compensation. If this instead means that Peter's business will be devastated, his damages will be greater and so will his case for injunctive relief.
3. Punitive Damages
Peter has established claims for two instances of continuing trespass and one claim for conversion. These are intentional torts and Peter will be entitled to seek punitive damages. It is true that Diane did not have evil intent when she took the deliberate actions that harmed her. This may limit the punitive damages that Peter will recover, particularly
February 2001, Question 5 [Professional Responsibility]
I. Advertising
L shall not make false or misleading communications about L or the L's services. L may advertise services through written, recorded or electronic communication unless the prospective client made known to L their desire to not be solicited. Cal: Presumes a violation of ethical rules for communications that contain a dramatization, without a disclaimer that it is a dramatization.
All advertisements must
1. Contain the name the office address of at least one lawyer
2. Be labeled as advertising material
3. ABA: envelope needs to state "advertising Material"
4. Cal: need to label as communication or solicitation but must not use any particular words so long as in 12-point type on first page and L must retain a correct copy of the communications for two years.
II. Contingency fee agreement
1. Be in writing; ABA: signed by the client; Cal: signed by both the lawyer and client
State the method by which the fee is to be determined, including percentages
III. Fees
1. ABA: All fees must be reasonable.
2. Cal: All fees must not be illegal or unconcionable.
IV. Proprietary interest
1. L shall not acquire a proprietary interest in the cause of action or subject matter of litigation unless it is to acquire a lien to secure L's fees or to contract with a client for a reasonable contingency fee in a civil case.
V. Advances
1. ABA: L shall not provide financial assistance to client in connection with litigation except for contingency cases and indigent clients, in which the lawyer can advance court costs and litigation expenses.
2. Cal: L may lend money to the client after employment if the client promises in writing to repay the loan.
3. Cal: Presumes any guarantees, warranties, or predictions to be a violation of the rules.
VI. Solicitation
L may not conduct in-person or live telephone or real-time electronic contact.
VII. Unauthorized pracitce of law
L shall not practice with or form a partnership or association authorized to practice law with a non-L.
July 2001 Question 5 [Torts] [Professional Responsibility]
#1
I. Malicious prosecution:
Malicious prosecution is the institution of criminal proceedings by defendant, done for an improper purpose, and without probable cause, which terminate favorably to plaintiff, and which cause plaintiff damages.
II. Intentional infliction of emotional distress
An intentional act amounting to extreme and outrageous conduct that causes plaintiff severe mental distress.
III. Abuse of process
Abuse of process exists where defendant intentionally misuses a judicial process (whether civil or crim- inal) for a purpose other than that for which the process is intended. This tort also parallels malicious prosecution, with the difference set forth below.
IV. Defamation
1. Defamatory statement
2. Of or concerning the plaintiff
3. Publication
4. Damages
5. Defense
(1) Absolute privilege
#2
1. Duty of Candor
As an officer of the court, lawyers owe the court a duty of candor.
(1) Filing frivolous claims
Under FRCP Rule 11,an attorney, by signing the pleading,agrees that: (1) attorney has brought an action for a proper purpose, (2) the attorney has not brought a frivolous claim, (3) the claim is supported by admissible evidence, and (4) a reasonable investigation has been conducted to ensure the above.
(2) Not to promote fraud/allow client to commit perjury
This requires that lawyers do nothing to promote fraud on the court. Lawyers must not aid clients in suborning perjury. The ABA would allow Ann to withdraw. California does not allow Ann to do so but she must do nothing to further the deception.
2. Duty to withdraw
When a client seeks representation that would require the attorney to engage in conduct that violates a law or ethical standard, the attorney must withdraw from the representation. The ABA Model Rules require that lawyers may not assist their clients in lying to the court. The ABA and California rules say that lawyers may withdraw if they learn that a client has used the lawyer to assist them in a past crime or fraud. California rules of conduct say that lawyers must do nothing to further the deception.
3. Duty of competence
The rules of professional conduct require that lawyers competently serve theirclients. The duty of competence requires lawyers to possess all of the knowledge, skill, thoroughness and preparation necessary for the representation.
4. Duty of fairness
Lawyers owe a duty of fairness to their adversaries. This duty precludes lawyers from engaging in conduct that obstructs the truth-seeking process.
#1
I. Federal Question Jurisdiction
II. Diversity of citizenship
1. Citizenship
2. Amount in controversy
(1) $75,000
(2) Injunction value
#2
I. Proper venue
1. Residence
2. Substantial part of the claim
3. Any district where any defendant is subject to personal jurisdiction
II. Transfer of venue
1. Personal jurisdiction
2. Subject-matter jurisdiction
3. Convenience
#3
I. Appeal
1. Final judgment
2. Interlocutory appeal
#1
I. Assignment/Sublease
II. Enforcement of Covenant- Equitable servitude
1. Intent between original parties
2. Statute of frauds
3. Notice between the parties
4. Touch and concern
Breach of covenant- Damages
Estoppel
Laches
#2
#3
I. Implied warranty of habitability
II. Unreasonableness of regulation
1. Erratic heating
2. Breach of quiet enjoyment
III. Privity of contract
IV. Breach of contract
#1
I. Argumentative
II. Assuming facts not in evidence
III. Lack of foundation
IV. Argumentative
#2
I. Lack of personal knowledge
II. Relevance
#3
I. Speculation
#4
I. Narrative
$5
I. Hearsay
II. Present sense impression
III. Excited utterance
#6
I. Hearsay
II. Lay opinion
#7
I. Hearsay
II. Admission
I. Justiciability
1. Ripeness
2. Mootness
3. Political question
4. Abstention
I. Standing
1. Injury in fact
2. Causation
3. Redressability
4. Third party standing
III. State action
IV. First amendment
V. Free exercise clause
VI. Establishment clause
V. Equal protection
VI. Gender-based class
I. Validity of will
II. Terms of will
III. Validity of trust
IV. Distribution
1. antilapse
2. pretermitted child