Winter 2010
F1. On April 1, Pat, a computer software consultant, entered into a written services contract with Danco, Inc. to write four computer programs for use by Danco in controlling its automated manufacturing machines. The contract provided that Danco would pay Pat $25,000 on completion of the work and that the programs were to be delivered to Danco no later than May 1. The contract stated, "This is the complete and entire contract between the parties, and no modification of this contract shall be valid unless it is in writing and signed by both parties."
Pat entered into the contract in anticipation that it would lead to significant work from Danco in the future, and he consequently turned away opportunities to take on more lucrative work.
On April 15, Pat called Chelsea, the President of Danco, who had executed the contract on behalf of Danco, and told her, "I’m having some problems with program number 3, and I won’t have it ready to deliver to you until at least May 8, maybe closer to May 15. Also, I have some doubt about whether I can even write program number 4 at all because your computer hardware is nearly obsolete. But I’ll get programs numbers 1 and 2 to you by May 1."
Chelsea said in response, "I’m sorry to hear that. We really need all four programs. If you can’t deliver until May 15, I guess I’ll have to live with that."
On April 28, Pat called Chelsea and said, "I’ve worked out the problems with programs numbers 3 and 4. I’ll deliver them to you on May 12."
Chelsea responded, "I’ve been meaning to call you. I’m going to start looking around for another consultant to do the work because I consider what you said in our April 15 telephone discussion to be a repudiation of our contract. My lawyer tells me that, because of the language in the contract, nothing I said to you in that conversation matters. You repudiated the contract, so we don’t owe you anything."
Can Pat prevail in a suit against Danco for breach of contract, and, if so, what is the measure of his damages? Discuss.
[Business Associations] [Professional Responsibility]
F2. Able, Baker, and Charlie are successful attorneys who set up a law firm under the name ―ABC Legal Services LLP (ABC LLP). They agreed to share profits and losses equally. Able prepared the documents required to register the firm as a limited liability partnership and instructed his assistant to file them with the Secretary of State. Inadvertently and unbeknownst to Able, Baker, and Charlie, Able’s assistant never filed the appropriate documents.
Able, Baker, and Charlie leased office space for four attorneys in the name of ABC LLP. They rented the extra office to David, an attorney who had a small solo law practice, for a monthly rent of the greater of $1100 or 10% of his billings. David committed malpractice arising from a case that he undertook soon after he moved into the ABC LLP office space.
Able, Baker, and Charlie hired Jack as head of computer services. Jack had just graduated from college with a degree in computer science. Jack, in an effort to save ABC LLP the cost of Internet access budgeted at $500 a month, accessed and used the wireless network of an adjacent law firm for free. Able, Baker, and Charlie were surprised at the savings, but did not inquire how it came about. Their use of the network resulted in the disclosure to a third party of confidential client information for one of Able’s clients, which caused the client economic loss.
1. May Able, Baker, and Charlie each be held personally liable for the economic loss to Able’s client caused by the disclosure of confidential client information? Discuss.
2. May Able, Baker, and Charlie each be held personally liable for David’s malpractice? Discuss.
3. Have Able, Baker, and Charlie breached any rules of professional conduct? Discuss. Answer this question according to California and ABA authorities.
F3. Hank and Wendy married, had two children, Aaron and Beth, and subsequently had their marriage dissolved.
One year after dissolution of the marriage, Hank placed all his assets in a valid revocable trust and appointed Trustee. Under the trust, Trustee was to pay all income from the trust to Hank during Hank’s life. Upon Hank’s death, the trust was to terminate and Trustee was to distribute the remaining assets as follows: one-half to Hank’s mother, Mom, if she was then living, and the remainder to Aaron and Beth, in equal shares.
Trustee invested all assets of the trust in commercial real estate, which yielded very high income, but suffered rapidly decreasing market value.
Hank, who had never remarried, died three years after establishing the trust. At the time of his death, the trust was valued at $300,000. Subsequently, it was proved by DNA testing that Hank had another child, Carl, who had been conceived during Hank’s marriage to Wendy, but was born following dissolution of the marriage. Wendy, Carl’s mother, had never told Hank about Carl.
Wendy, Mom, Aaron, Beth, and Carl all claim that he or she is entitled to a portion of the trust assets.
1. At Hank’s death, what claims, if any, do the trust beneficiaries have against Trustee? Discuss.
2. How should the trust assets be distributed? Discuss. Answer this question according to California law.
F4. In 2001, Lou was the managing partner of Law Firm in State X and Chris was his paralegal. Realizing that Chris intended to go to law school, Lou invited Chris and his father to dinner to discuss Chris’s legal career. Aware of Chris’s naive understanding of such matters, Lou, with the authority of Law Firm, made the following written offer, which Chris accepted orally:
1) After graduation from law school and admission to the Bar, Law Firm will reimburse Chris for his law school expenses;
2) Chris will work exclusively for Law Firm for four years at his paralegal rate of pay, commencing immediately upon his graduation and admission to the Bar;
3) Chris will be offered a junior partnership at the end of his fourth year if his performance reviews are superior.
In 2005, Chris graduated from law school and was admitted to the Bar, at which time Law Firm reimbursed him $120,000 for his law school expenses. Chris and his father invited Lou to dinner to thank him and Law Firm for their support. During dinner, however, Chris advised Lou that it was his decision to accept employment with a nonprofit victims’ rights advocacy center. Lou responded that, although Law Firm would miss his contributions, he and Law Firm would nonetheless support his choice of employment, stating that such a choice reflected well on his integrity and social consciousness. Nothing was said about Law Firm’s payment of $120,000 for Chris’s law school expenses.
In 2008, Chris’s father died. Chris then completed his third year of employment at the advocacy center. Not long thereafter, Law Firm filed a breach-of-contract action against Chris seeking specific performance of the agreement or, alternatively, recovery of the $120,000. In State X, the statute of limitations for breach-of-contract actions is five years from breach of the contract in question.
What legal and equitable defenses can Chris reasonably present to defeat the relief sought by Law Firm, and are they likely to prevail? Discuss.
[Constitutional Law] [Real Property]
F5. Paula has owned and farmed a parcel consisting of 100 acres for many years. Last year, in compliance with County regulations, she expended a substantial amount of money in determining the economic feasibility of developing 10 acres of the parcel that border the shore of a small lake. She recently submitted a development application to County seeking to construct 30 homes on those 10 acres. County then determined that the 10 acres constitute protected wetlands that, under a state law enacted recently, had to be left undeveloped to protect certain endangered species. On that basis, County denied the development application.
Paula brought an action claiming that County’s denial of the development application constituted a regulatory taking in violation of the U.S. Constitution. It was stipulated that the 10 acres are worth $4,000,000 if development is permitted and $200,000 if it is not.
The trial court ruled that County’s denial of Paula’s development application did not constitute either (1) a total or (2) a partial taking.
Did the trial court correctly rule that County’s denial of Paula’s development application did not constitute:
1. A total taking? Discuss.
2. A partial taking? Discuss.
F6. Herb and Wendy, residents of California, married in 2001. Herb worked as an accountant. Wendy was an avid coin collector who hoped someday to turn her hobby into a profitable business. Prior to marriage, they had entered into a prenuptial agreement providing that each spouse’s wages would be his or her separate property.
On Wendy’s birthday in 2002, Herb gave Wendy a drawing by a famous artist. Herb paid for the drawing with $15,000 that his parents had given him. Wendy hung the drawing in their bedroom.
In 2003, Wendy opened CoinCo, a shop specializing in rare coins. She capitalized the business with a $10,000 inheritance that she had received when her grandfather died. Wendy worked at the shop alone every day. Customers appreciated her enthusiasm about coin collecting and her ability to obtain special coins at reasonable prices. Over time, Wendy learned that she had acquired a number of highly valuable coins. There was also a renewed interest in coin collecting due to the discovery of several boxes of old coins found buried in the area.
Although Wendy’s services at the shop were worth $40,000 per year, she took an annual salary of $25,000. She also paid $5,000 in household expenses from the business earnings each year.
In 2008, Herb and Wendy separated, and Wendy filed for dissolution of marriage. At that time, CoinCo was worth $150,000, and the drawing was worth $30,000.
In 2009, before trial of the dissolution proceeding, Wendy was disabled by a serious illness and had to be hospitalized. She closed CoinCo while she was in the hospital, and the value of the business fell to $100,000 by the time of trial. Her hospital bill was not covered by health insurance.
In the dissolution proceeding, Wendy claims that the prenuptial agreement is valid and Herb claims that it is not.
What are Herb’s and Wendy’s respective rights and liabilities in:
1. The drawing? Discuss.
2. CoinCo? Discuss.
3. The hospital bill? Discuss.
Answer according to California law.
[Torts]
J1. Homeowner kept a handgun on his bedside table in order to protect himself against intruders. A statute provides that “all firearms must be stored in a secure container that is fully enclosed and locked.” Burglar broke into Homeowner’s house while Homeowner was out and stole the handgun.
Burglar subsequently used the handgun in an attack on Patron in a parking lot belonging to Cinema. Patron had just exited Cinema around midnight after viewing a late movie. During the attack, Burglar approached Patron and demanded that she hand over her purse. Patron refused. Burglar drew the handgun, pointed it at Patron, and stated, “You made me mad, so now I’m going to shoot you.”
Patron fainted out of shock and suffered a concussion. Burglar took her purse and fled, but was later apprehended by the police. Cinema had been aware of several previous attacks on its customers in the parking lot at night during the past several years, but provided no lighting or security guard.
Under what theory or theories, if any, might Patron bring an action for damages against Homeowner, Burglar, or Cinema? Discuss.
J2. There was recently a major release of hazardous substances from a waste disposal site in County. Owen is the current owner of the site. Fred is a former owner of the site. Hap is the producer of the hazardous substances disposed of at the site.
As a result of the hazardous substance release, County has identified the site as a priority cleanup target, and has notified Owen, Fred, and Hap that they are the responsible parties who must either clean up or pay to clean up the site. County advised each responsible party of his degree of culpability. In the event each responsible party does not pay his share of the cleanup costs, County is entitled to impose joint and several liability on each of them.
In an effort to facilitate the resolution of County’s demand, Owen, the wealthiest responsible party, arranged for Fred, Hap, and himself to meet with Anne, his tax lawyer. At the meeting, Owen offered to pay the attorney fees of all three of them in exchange for their agreement to be represented by Anne. Fred and Hap accepted Owen’s offer and Anne distributed identical retainer agreements to each of them, which they signed.
What ethical violations, if any, has Anne committed? Discuss.
[Evidence]
J3. David and Vic were farmers with adjoining property. They had been fighting for several years about water rights.
In May, Vic and his wife, Wanda, were sitting in the kitchen when Vic received a telephone call. During the call, Vic became quite angry. As soon as he hung up, he said the following to Wanda: “That rat, David, just called and told me that he was going to make me sorry! He used some sort of machine to disguise his voice, but I know it was him!”
In June, Wanda and Vic passed a truck driven by David, who made an obscene gesture as they drove by. Vic immediately stopped and yelled that if David wanted a fight, then that was what he was going to get. Both men jumped out of their trucks. After an exchange of blows, David began strangling Vic. Vic collapsed and died from a massive heart attack. David was charged with manslaughter in California Superior Court.
At David’s trial, the prosecution called Wanda, who testified about Vic’s description of the May telephone call.
During cross-examination of Wanda, the defense introduced into evidence a certified copy of a felony perjury conviction Vic had suffered in 2007.
The prosecution then introduced into evidence a certified copy of a misdemeanor simple assault conviction David had suffered in 2006.
During the defense’s case, David claimed that he acted in self-defense. He testified that he knew about two other fights involving Vic. In the first, which took place four years before his death, Vic broke a man’s arm with a tire iron. In the other, which occurred two years before his death, Vic threatened a woman with a gun. David testified that he had heard about the first incident before June, but that he had not heard about the second incident until after his trial had commenced.
Assuming that all appropriate objections were timely made, should the California Superior Court have admitted:
1. Wanda’s testimony about Vic’s statement regarding the May phone call? Discuss.
2. The certified copy of Vic’s 2007 felony perjury conviction? Discuss.
3. The certified copy of David’s 2006 misdemeanor simple assault conviction? Discuss.
4. David’s testimony about the first fight involving Vic breaking another man’s arm with a tire iron? Discuss.
5. David’s testimony about the second fight involving Vic threatening a woman with a gun? Discuss.
Answer according to California law.
J4. Alfred, Beth, and Charles orally agreed to start ABC Computers (“ABC”), a business to manufacture and sell computers. Alfred contributed $100,000 to ABC, stating to Beth and Charles that he wanted to limit his liability to that amount. Beth, who had technical expertise, contributed $50,000 to ABC. Charles contributed no money to ABC but agreed to act as salesperson. Alfred, Beth, and Charles agreed that Beth would be responsible for designing the computers, and that Charles alone would handle all computer sales.
ABC opened and quickly became successful, primarily due to Charles’ effective sales techniques.
Subsequently, without the knowledge or consent of Alfred or Charles, Beth entered into a written sales contract in ABC’s name with Deco, Inc. (“Deco”) to sell computers manufactured by ABC at a price that was extremely favorable to Deco. Beth’s sister owned Deco. When Alfred and Charles became aware of the contract, they contacted Deco and informed it that Beth had no authority to enter into sales contracts, and that ABC could not profitably sell computers at the price agreed to by Beth. ABC refused to deliver the computers, and Deco sued ABC for breach of contract.
Thereafter, Alfred became concerned about how Beth and Charles were managing ABC. He contacted Zeta, Inc. (“Zeta”), ABC’s components supplier. He told Zeta’s president, “Don’t allow Charles to order components; he’s not our technical person. That’s Beth’s job.”
Charles later placed an order for several expensive components with Zeta. ABC refused to pay for the components, and Zeta sued ABC for breach of contract.
Not long afterwards, ABC went out of business, owing its creditors over $500,000.
1. How should ABC’s debt be allocated? Discuss.
2. Is Deco likely to succeed in its lawsuit against ABC? Discuss.
3. Is Zeta likely to succeed in its lawsuit against ABC? Discuss.
[Criminal Law] [Criminal Procedure]
J5. Harriet was on her porch when Don walked up, pointed a gun at her, and said, “You’re coming with me.” Believing it was a toy gun, Harriet said, “Go on home,” and Don left.
While walking home, Don had to pass through a police checkpoint for contraband. Officer Otis patted down Don’s clothing, found the gun, confiscated it, and released Don. Later, Officer Otis checked the serial number and located the registered owner, who said the gun had been stolen from him.
A month later, Officer Otis arrested Don for possession of stolen property, i.e., the gun. During a booking search, another officer found cocaine in Don’s pocket.
Don was charged with possession of stolen property and possession of cocaine. He moved to suppress the gun and the cocaine, but the court denied the motion.
While in jail, Don drank some homemade wine. As a result, when he appeared in court with counsel, he was slurring his words. The court advised Don that if he waived his right to a trial, it would take his guilty plea and let him go on his way. Don agreed and pleaded guilty. Subsequently, he made a motion to withdraw his guilty plea, but the court denied the motion.
1. Did the court properly deny Don’s motion to suppress:
a. the gun? Discuss.
b. the cocaine? Discuss.
2. Did the court properly deny Don’s motion to withdraw his guilty plea? Discuss.
3. If Don were charged with attempted kidnapping against Harriet, could he properly be convicted? Discuss.
J6. In 2000, Harry and Wanda, California residents, married. Harry was from a wealthy family and was the beneficiary of a large trust. After their marriage, Harry received income from the trust on a monthly basis, and deposited it into a checking account in his name alone. Harry remained unemployed throughout the marriage. Wanda began working as a travel agent. She deposited her earnings into a savings account in her name alone.
In 2003, Harry and Wanda purchased a vacation condo in Hawaii. They took title in both their names, specifying that they were “joint tenants with the right of survivorship.” Harry paid the entire purchase price from his checking account, which contained only funds from the trust. Harry and Wanda orally agreed that the condo belonged to Harry.
In 2004, Harry purchased a cabin in the California Mountains to use when he went skiing. He paid the entire purchase price of the cabin from his checking account, and took title to the cabin in his name alone.
In 2005, Wanda commenced a secret romance with Oscar. During a rendezvous with Oscar, Wanda negligently operated Oscar’s car, causing serious personal injuries to Paul, another driver.
In 2006, Wanda received an e-mail advertisement inviting her to invest in stock in a bioengineering company. She discussed the investment with Harry, who thought it was too risky. Wanda nevertheless bought 200 shares of stock, using $20,000 from her savings account to make the purchase. She put the stock in her name alone.
In 2007, Harry and Wanda separated. Shortly thereafter, as a result of the car accident, Paul obtained a money judgment against Wanda.
Harry and Wanda are now considering dissolving their marriage. The condo and cabin have increased in value. The stock has lost almost all of its value.
1. In the event of a dissolution, how should the court rule on Harry’s and Wanda’s respective rights and liabilities with regard to:
a. The condo in Hawaii? Discuss.
b. The cabin in the California Mountains? Discuss.
c. The stock in the bioengineering company? Discuss.
2. What property can Paul reach to satisfy his judgment against Wanda? Discuss.
Answer according to California law.