W.B. Fisch December 9, 1998

University of Missouri-Columbia

School of Law

PROFESSIONAL RESPONSIBILITY

Final Examination

General Instructions

1. This is a two-and-one-half hour examination. It consists of four questions, to each of which a suggested time is given which reflects its relative value for grading purposes:

I ........................ 45 Minutes

II ....................... 30 Minutes

III ........................ 30 Minutes

IV ....................... 30 Minutes

The suggested times leave 15 minutes for review or reflection, but of course the actual allocation of your time is up to you.

2. Question IV consists of 5 short answer questions, each of which requires (i) an answer and (ii) a brief explanation, preferably in one-quarter of a bluebook page or less. The following is a sample answer to suggest form only:

"Yes. The CPR prohibits sharing of legal fees with a non-lawyer; Smith is not a lawyer and the payment made constitutes a share of legal fees."

4. You may have with you your copy of Professional Responsibility Standards, Rules & Statutes (West 1997-8), as well as your copy of the Missouri Rules (S.Ct. Rule 5 on Disciplinary Procedure) handed out at the beginning of the semester, but no other materials. The rules supplement and the handout may be annotated in any way, but may contain no additional sheets.

5. There are 7 pages in this examination, including this cover sheet. Make sure you have the complete test.

I

(45 Minutes)

Elaine Farris is injured in a fall at a grocery store. As a result she must undergo extended treatment for a broken hip involving surgery and physical therapy, much of which is not covered by health insurance. She consults with attorney Martin Marietta about a possible suit against the store, and they agree on a contingent fee of 40%. The contract contains a clause as follows:

"Attorney will have authority to enter into any reasonable settlement of the matter on behalf of Client, provided such settlement is equal to or exceeds $20,000."

As of the time the agreement is entered into, Elaine's out-of-pocket medical expenses amount to nearly $10,000; the treatments needed for complete recovery are still uncertain but will cost at least another $2,000. An action is filed by Marietta demanding damages of $50,000.

The trial is set and on the first day Marietta presents his case for liability. On the next day, before the evidence of damages is presented, the judge asks each lawyer to meet with her in chambers. Elaine is present at the meeting with Marietta. At that meeting the judge asks how much it would take to settle the case, and Elaine says that her medical expenses aren't finished, so she doesn't know what she could agree to; Marietta says it will take at least $20,000. In their separate meeting, the judge tells the store owner's lawyer Donald Lockheed that $22,000 would achieve a settlement. Lockheed then gets his client to offer that amount, and just before the lunch hour communicates the offer to Marietta. Marietta and Elaine go into a witness room to discuss the offer, and Elaine says that she is still not comfortable with the amount because she is afraid of future medical bills. Five minutes later they come out of the room, Elaine goes to lunch and Marietta goes to Lockheed and tells him that the offer is accepted. The lawyers then go to the judge's chambers and inform her that an agreement has been reached for $22,000.

After lunch Elaine comes into the courtroom and sits at plaintiff's counsel table without speaking to Marietta. The judge comes into the courtroom and recognizes Lockheed, with the following colloquy occurring:

THE COURT: Good afternoon. What can I do for you?

MR. LOCKHEED: Your Honor, we have resolved this matter for 22,000.

MR. MARIETTA: That is correct, Your Honor.

THE COURT: Do you want to get anything on the record?

MR. LOCKHEED: Yes. I would like to just get it on the record that we have agreed to settle this matter for $22,000.

THE COURT: Defendant will pay $22,000?

MR. LOCKHEED: Will pay $22,000 to Plaintiff. Plaintiff will be responsible for all medical bills and her costs and Defendant will be--

THE COURT: Total settlement of $22,000?

MR. LOCKHEED: That is correct.

THE COURT: Is that correct Mr. Marietta?

MR. MARIETTA: Yes.

THE COURT: I notice the Plaintiff is present in court. Judgment will be entered accordingly.

As they leave the courtroom Elaine angrily asks Marietta why he did that when she told him she wouldn't settle, and he says he thought it was reasonable. Elaine immediately discharges Marietta and gets another lawyer to move to overturn the settlement on the ground that Elaine did not authorize it. In a jurisdiction which has adopted the ABA's Model Rules of Professional Conduct without change, but which has no precedent on the enforcement of settlement agreements under these circumstances, how should the court rule on the motion? Explain





II

(30 Minutes)

Lawyer represents Husband in a marriage dissolution action brought by Wife. The action is tried to a judge and results in a decree against Husband. At the dissolution trial, when asked by Wife's attorney whether he was receiving any rental income from jointly-owned property, Husband denied any such income. During a recess of the trial, after Husband's testimony was completed, Lawyer asked Husband whether he had received rental income from that property, and Husband said that he had. The decree becomes final and Lawyer performs no further services for Husband.

Husband now files for bankruptcy, and does not list any rentals in his statement of assets attached to his petition. Lawyer's fee has not yet been paid, and this obligation is listed in Husband's petition as a debt which would be discharged in the bankruptcy (that is, it is listed as one of Husband's debts, and under the bankruptcy law he would be entitled to full or partial relief from the duty to pay it). The petition states expressly that this and other listed debts are acknowledged by Husband to be due and owing to the named creditors. Lawyer is notified of the bankruptcy petition with a copy thereof, and checks to verify that renters are living in the property.

Lawyer then files a complaint in the bankruptcy court charging Husband with making a false statement of assets, reciting the fact of Husband's having received rental income without disclosing it on the petition, and asking the court to deny Husband the right to discharge his debts. Assume that (i) under the bankruptcy law denial of discharge would be a proper sanction for filing a false statement, if properly proven; and (ii) the denial would not be specific to Lawyer's fee but would extend to all of Husband's debts.

Has Lawyer acted properly on the above facts? Explain. In your answer, discuss only issues of professional responsibility and do not discuss any issues of bankruptcy law that might be raised by the above statement of facts.





III

(30 Minutes)

Attorney John Scopes agrees to represent Gerald and Lindsey Callahan in a personal injury claim arising out of an automobile collision that occurred at an intersection controlled by a stoplight. They agree to a 40% contingent fee, in addition to a $1,000 retainer payable immediately and explicitly stated to be non-refundable. The lawsuit is filed against the driver of the other car and the defendant's deposition is taken, in which he maintains unshakeably that the light was green for him. In Gerald's deposition taken by the defendant, he also maintains unshakeably that the light was green in his direction, but he makes another statement concerning the scene which is inconsistent with what he has told Scopes privately. There are no other witnesses to the accident.

Scopes forms the belief during this deposition that Gerald is lying. Immediately after Gerald's deposition Scopes informs the Callahans that "for personal reasons" he can no longer represent them, and they obtain another lawyer who negotiates a substantial settlement in their favor.

Scopes now submits a bill for services rendered before his withdrawal, but the Callahans refuse to pay. The bill states that Scopes spent 50 hours on the case, and that his normal fee is $150/hour in court (including depositions) and $100/hour out of court; the total amount of the bill is $5,750. Assume that the average rate for lawyers in the community is $120 and $90 respectively. Assume also that the new lawyer also took the case on a 40% contingent fee, and the total settlement is $15,000.

Is Scopes entitled to a fee, and if so how much? Explain.





IV

(30 Minutes)

(See Instructions para. 2)

1. Sam Dashiell is consulted by Richard Roe, a former employee of Acme Corporation, who believes he was wrongfully discharged. Roe had written a letter to the company's chief personnel officer complaining about it, and got a letter back from the company's General Counsel stating simply that there were proper grounds for the dismissal. Dashiell concludes from Roe's story that several fellow employees have information needed to evaluate Roe's claim. He gives Roe detailed instructions whom to talk to and what questions to ask. Roe then talks to three such employees and obtains sworn statements from them that are favorable to his case. Has Lawyer acted improperly?

2. In #1 above, assume instead that Dashiell immediately files suit against the company for Roe, and that the action progresses through discovery. Dashiell has agreed to take the case on an hourly rate basis, with fees to be paid monthly. The trial date is set for 6 weeks hence. Roe now discharges Dashiell, saying that he has lost confidence in him and has found a new lawyer. Roe has not paid the last 3 months' bills from Dashiell, amounting to over $1,000. Dashiell demands payment of these bills, and refuses to turn over the case file to the new lawyer until payment is made. Has Dashiell acted properly?

3. John Smith consulted Harold Henning, partner in the firm of Gold & Silver, concerning an offer Smith had received to enter into a substantial business investment. In the course of the consultation Smith disclosed the essentials of his personal financial situation. Based on this consultation Smith decided not to hire the firm or Henning to represent him in the transaction. Five years later Robert Gold, senior partner in the firm, is asked to represent Smith's wife in seeking a divorce from Smith. Gold asks Mrs. Smith how she thought of coming to him, and she says that she recalls her husband having mentioned talking to Henning a long time ago. Gold determines that there is no office file on the Smith consultation, Henning says that he vaguely remembers having spoken to Smith but has no file on or recollection of the content of the consultation, and Gold has no recollection of ever having heard anything about such a consultation. Can Gold properly accept this representation?

4. The Bar Association of the State of Jefferson is a private organization of Jefferson lawyers, of which approximately 90% of all lawyers admitted in the state are members. The leadership of the Association argues in various public forums that there are too many lawyers in the state for the amount of available business, and that there should be a sharp limit put on new admissions. At the annual meeting the general membership overwhelmingly approves a recommendation to the State Supreme Court to adopt a revised admissions rule specifying that only the top 40% of scores on the bar examination be admitted (the current pass rate is about 80%). The Court, with a newly appointed Chief Justice who is a past president of the Association, adopts the proposed rule by a vote of 3-2. Disappointed takers of the next bar exam sue the Association in an appropriate federal court for combining in restraint of trade in violation of the federal antitrust laws, alleging the above facts. The Association moves to dismiss for failure to state a claim, and the motion is denied. Did the court err?

5. The state legislature adopts a statute forbidding lawyers from making targeted direct-mail solicitations to persons accused of crime, less than 30 days after the addressee has been arrested. The statute makes such a solicitation a misdemeanor punishable by a fine, and requires that the violator be suspended from the practice of law for 30 days. John Daly, a criminal defense lawyer in the state capitol, sues in an appropriate state court to have the statute declared invalid on the ground that it is inconsistent with the state constitution. How should the court decide this claim?