PROFESSOR HUMBACH                                                                                                                               December 20, 2004

FINAL EXAMINATION                                                                                                                                  TIME LIMIT: 3 HOURS






                        This is a closed book examination.




            This examination consists of five fact situations. You are to provide responses with respect to any four of these fact situations. Please indicate on the front cover of your Examination Booklet the number of the question you have chosen not to answer. (If you answer all five questions, your grade will be based on only the first four.)


            The questions are to be answered in the Examination Booklets that are provided. Please clearly number your answers.


            You will be graded on the quality of the explanations that you give for your suggested resolutions, not on how you think the issue would be resolved. If you think there is a strong argument or consideration weighing against the position you take, state it. Remember to keep your reasons on point. Do not circle around your point. Aim for the bull's eye. Otherwise, you will risk running out of time. You have about 35-40 minutes per fact situation, plus about a 1/2 hour of reading time.


            For many years Dawkins represented Thorndyke, who operated a small apparel manufacturing company, which made everything from children’s clothes to special orders for the armed forces. Thorndyke was ready to ready to retire and, through a brokerage, was introduced to a buyer.  A basic deal was worked out in which Thorndyke would exchange his 100% ownership of his company’s stock for cash and promissory notes.


            Dawkins reviewed the draft papers provided by the buyers and drafted some documents himself in preparation for the closing. Things seemed to be proceeding well until, a few days before the scheduled closing, Dawkins received a call from the buyer’s lawyer saying that the buyer was concerned about the company’s line of credit. There had been an announcement in the paper that the company’s bank was being merged with another bank, and the buyer wondered whether the credit line would continue to be available on reasonable terms after the merger.  Dawkins tried to give assurances, but the buyer’s lawyer said after a while: “Look, it’s not me you have to convince but my client. Why don’t you call him directly?”


            Dawkins called the buyer directly and, in several different ways, assured him that the line of credit would be “in no way affected” by the impending bank merger.  What Dawkins did not say was that, in any case, the line of credit was already under review and, almost certainly, after the new buyer took over the company the credit line would only be available at substantially higher rates. Because of the thin profit margin in the industry, this rate increase would sharply reduce net income compared with the estimates in the pro forma (estimated) financial statements.  However, Dawkins mentioned none of this. In fact, he discouraged the buyer from calling the bank saying that, with the impending merger and all, “it’s a bad time to make ripples.”


            The morning of the closing Thorndyke told Dawkins about a most unfortunate turn of events: One of the two trucks owned by the company had been in a serious accident in which the company’s driver was at fault. Worst of all, in anticipation of the sale Thorndyke had let the insurance lapse the night before and he was “pretty sure” the buyer’s coverage had not yet commenced. Thus, the buyer was getting a company that would immediately be faced with a large, uninsured liability. Dawkins indicated that he thought they had to tell the buyer, but Thorndyke replied: “What are you trying to do? Bankrupt me?  They’re only paying 30% down today and the rest is promissory notes.  Let’s just get this done today, and I’ll be able to make adjustments later in the payment of the notes, assuming that becomes necessary.”


1. What should Dawkins do about the closing?


2. Could Dawkins be held liable to the buyer for failing to disclose possible problems with maintaining the line of credit?




Five years ago the law firm of Vexler, Vixen and Voxx represented Rockheart Auto Sales in an investigatory proceeding by the state’s attorney general. The attorney general alleged that the dealer had engaged in the practice of selling “demonstrator” automobiles, with substantial mileage on them, as “new.”  After extensive discovery and an elaborate legal ballet, the matter was settled. Sarah Kramer was a lawyer in the Vexler firm at the time of this representation.


Last year Sarah married Tom Johnson, another attorney in town, and the two of them have since entered into a law partnership together.  A week ago, a long-time, big-fee commercial client of Tom’s came in and complained about a car that he had just bought from Rockheart.  Although supposedly new, the car turns out to have considerable wear and tear on the shock absorbers, brake pads and other such “consumable” parts, where there should be little or no wear at all.  A mechanic estimates that the car, though sold as “new,” in fact had several thousand miles on it.


Tom has contacted the current attorney for Rockheart, David Price, and Price’s first words were, essentially, “Wait a minute, Tom.  You can’t represent somebody against us. You’ve got a first-class conflict of interest here.”  Tom’s client is very annoyed. He says if Tom can’t represent him on this, he might as well get another lawyer for all his work—amounting to nearly $100,000 of billings per year.


Is there any problem with Tom representing his client against Rockheart?




While traveling on business, Owen Cotter was shopping in a large department store when he was stopped by one of the store detectives near one of the exits. Taken to a side room, Owen was searched and little deluxe pocket calendar was found—with the store’s price tag still on it.  Owen claimed that that he’d picked up the calendar with the intention of purchasing it. Later, he said, he was looking at some gloves and he absentmindedly placed the calendar in his coat pocket. He’d totally forgotten about it as he made his way out of the store. 


            Owen’s companion on this trip was Carl Sullivan, a corporate attorney with the firm that did most of the commercial legal work for Owen’s company.  Carl had been shopping in a different part of the store, and happened to see Owen just as he was apprehended. At Owen’s request, Carl stayed with Owen as he was detained and questioned. Even though Carl had no experience in the field of criminal law, he tried as best he could to help Owen, advising him on a number of points (things not to answer, etc.). He felt, among other things, that as counsel for Owen’s employer, he could do no less. After all, Owen was an important member of the company’s senior management.


            Owen was permitted a brief private conversation with Carl. At that time, Owen admitted confidentially to Carl that he actually had remembered the calendar while coming down the escalator but, seeing the long lines at the cash registers, decided just to walk out the door.  He said he now realized that was a “very stupid” thing to do, but that was all water under the bridge and the question now was how to get out of this mess as expeditiously as possible. Owen asked Carl to point out, very forcefully, that Owen’s wallet contains over $1200—enough to buy 100 of the calendars—and that a person in Owen’s position would hardly need to steal such an insignificant item. Owen even proposed that they offer a $100 bill to the store detectives to pay for the calendar, with the suggestion that they could donate the change to the “charity of their choice.”


            A few minutes later Carl went ahead and asserted that, with his cash on hand and his position in life, it would be inconceivable that Owen would ever have had the intention to steal.  However, Carl drew the line at taking part in the offer of the $100 bill. Owen made the offer himself, and it was accepted. With Owen $100 lighter, the two of them left the store and caught a plane home.  On his return, Carl made a full report of the entire scenario to Owen’s employer, despite Owen’s objection.  Owen was fired.


            A month or so later, Carl was at a bar association luncheon and he told this story to the people at his table during lunch (omitting the names, of course).  However, a assistant local district attorney at the next table heard the conversation and, thinking the events had occurred in his own jurisdiction, later asked Carl to supply the details, and threatened him with a subpoena if he did not.


            1. Is there anything ethically questionable about Carl’s conduct at the department store or after returning home?


2.Can Carl he can be compelled to discuss or testify about the incriminating information he got from Owen?




            Linda Galvin, a criminal defense lawyer, received a call from a local excavation contractor named Kirk who said he was in a pile of trouble. Later that day, Kirk came in and told Galvin that the night before night he had gotten in a fight at a bar and the guy he was fighting with threatened to kill him. At that point, Kirk said, he left the bar and got in his car which, however, failed to start. Not wanting to return to the bar, he skulked around the parking lot and, by chance, found a car with the keys still in it. Frightened and not thinking straight, he took that car and drove away.


            Kirk soon realized that he’d made a big mistake, and decided to hide the car.  Fortunately, he knew of an old barn on a farm that had been purchased by an out-of-town firm for eventual development, and he took the car there. He left the car in the barn after removing the license plates. Kirk figured that it might be months or even years before anybody might come and look in that barn.


            Kirk left the license plates with Galvin.  She intended to send them in anonymously to the department of motor vehicles.  As she thought more about it, however, Galvin became concerned as to how she could do this in a way that would provide her with proof that she’d turned in the plates while, at the same, not revealing to the DMV where the plates came from. So she delayed until she had time to think this one through a little better. Meanwhile, she had a private investigator go out and check the barn to see if the car was where Kirk said it was.  Also, she hired a towing service to move Kirk’s own car from the parking lot next to the bar, both because she wanted to protect it on her client’s behalf and, perhaps more importantly, because it’s continued presence next to the bar would provide a rather glaring clue as to who took the car that had been stolen.


Several days passed and Galvin still had the license plates, uncertain as to how she should handle them. Kirk was arrested based on information given by people who had been at the bar.  Galvin received a call and she immediately met him at the police station. Kirk says he wants to plead not guilty, but Galvin counsels otherwise. She believes that the evidence against him will be very strong if they ever find the car and that he’d be best off trying to cut a deal for minimum jail time in exchange for a quick guilty plea before the car is found. Kirk listened carefully but then he refused this suggestion. Galvin threatened to terminate the representation if he didn’t change his mind.


Later that day, Galvin was talking to the prosecutor and said:  “My client wants to plead not guilty and, face it, you don’t have much of a case.  A guy walks out of a bar after being threatened and later a car supposedly disappears from the parking lot. The dots just don’t connect. But I think we can do business if you’ll drop the charge to ‘unauthorized use [of a motor vehicle],’ with a one year max..”  The prosecutor replied: “Okay, but you’ve got to tell me where the car is right now.”  Believing this was the best she could do for her client, Galvin told him.


Kirk still refuses to plead guilty.


List the ethical questions that you see and then say how you would come out on each, and why.




A car owned by Dixon and occupied by Borden and Dixon was stopped for speeding.  Borden was driving at the time and Dixon was riding as a passenger.  Movements by the two and other indicators led the police officer to suspect that they were transporting drugs. However, lacking probable cause to search the car, the police officer asked Borden, the driver, for permission to do the search. Borden readily agreed.  When Dixon tried to object, Borden cut him off, saying: “C’mon. Let him do his thing and we can get out of here.” The search revealed that the car contained about 5 ounces of cocaine hidden in the back-seat cushion.  Borden and Dixon were arrested and charged with possession of cocaine with intention to sell. Dixon has since turned state’s evidence, and he will testify that he and Borden were acting pursuant to a common plan to transport and sell the cocaine. Based on all the evidence, Dixon’s version of events is by far the most plausible conclusion to reach.


Borden’s lawyer, Ken Lande, has decided to argue that, by readily consenting to the search, Borden has shown that he ‘couldn’t’ have known that there was cocaine in the car. If he did, the reasoning goes, he never would have consented to the search. Ken Lande also plans to cross-examine Dixon on the stand, and ask questions to emphasize (a) that Borden consented to the initial search over Dixon’s objection, showing that Borden couldn’t have known there was cocaine in the car, and (b) that Dixon now admits that he knew the cocaine was in the car. Based on this, Lande wants to argue to the jury that only Dixon and not Borden had the mens rea to transport cocaine.


There is just one fly in this ointment. Yesterday, Borden told Lande that he wants to take the stand at trial and testify that the “first time he ever saw the cocaine” was when the police officer found it.  Technically, this is true, as the cocaine was wrapped in opaque packaging until the police found it and opened it.  Borden also told Lande in confidence that he knew Dixon dealt drugs and that Dixon acted like he had something “fishy” in the car. However, Borden says he plans to vehemently deny that he had any “information about cocaine or anything like that.”  The way Borden reasons. “The jury would convict me for sure if I don’t get up there and convince them that I had ‘no idea whatsoever’ there was cocaine in that car.”


1. Is there any problem with the approach that Lande intends to take?


2. What should he do about Borden’s proposed testimony?


{end of examination}