This is a completely open-book exam. You may use any material, prepared by anybody. Assume that the Model Rules of Professional Conduct as they appear in the pamphlet are the governing rules. If, however, the rules as adopted in Minnesota are different from the Model Rules, note that fact and explain how the differences would matter.

In discussing the problems raised by the facts, always first explain your view of the lawyer's moral obligations and then discuss the impact of the rules on the lawyer's decisions. If you believe that the lawyer, by adhering to the rules, would make a choice that would violate normal moral principles, explain what the lawyer should do and how you would weigh the competing values the rules are designed to further as against other values and moral precepts. If you think that the lawyer has violated either the rules or appropriate standards of moral conduct, explain what the lawyer did wrong and what she should have done.

The exam will be graded as a whole. Although there are three questions, they are not necessarily of equal weight. You must decide how much time and effort to spend on each.

This is a two-hour exam.

Basic Facts

Unable to find a job that suited her, Karen Demille, a recent law-school graduate, opened an office in a store front on a busy commercial street in St. Paul, Minnesota. She joined various civic and business organizations in the hope that she would become known among members of the local business community. She frequently ate lunch at Vongole, a local restaurant specializing in Italian food. Indeed, Karen became a friend of Maria Carpaccio, the proprietor of the restaurant, and even represented Maria in a dispute with the local zoning authority over the size and location of a sign in front of the building.

Gradually, Karen's efforts paid off. She soon was approached by Rollo Forbes, a local man who owned a small apartment building nearby. He told Karen that he had been approached by a woman who had asked about an apartment that he had advertised for rent.

"She seemed like a nice woman--white, of course, white as you or me--and I told her what the rent would be and gave her a sample of the lease that we require our tenants to sign. She said that she would think it over and come back later with her husband, which she did. Well, guess what? Her husband turns out to be black as the ace of spades! I mean, I'm as open-minded as the next person, but I couldn't have that kind of thing going on in my place. My other tenants would never accept that kind of situation. I told them that my daughter had suddenly and unexpectedly needed a place, and that the apartment was no longer available. I don't know much about the law, but I think that I may be in trouble if I don't do something. Can you help me? I'll pay whatever you ask."

Karen said, "We'll get to the fee later. For now, I want more information." In response to Karen's questions, Rollo acknowledged that he did in fact have a daughter, but that she was not interested in moving into Rollo's building, even for free rent. Karen suggested that Rollo move a few pieces of old furniture into the vacant apartment and put his daughter's name on the mailbox. "That way," she said, "if anybody checks up on you, it will look like she really has moved in. You will have a good explanation for denying the place to the mixed-race couple."

Rollo, pleased with the suggestion, agreed to put the plan into action. Karen told him that her fee would be one hundred dollars per hour, and that she wanted five hundred dollars as a retainer. "This isn't going to go away," she said, "but I think that this plan will work. If you are challenged on this and we get you out of it, I will want my normal fee plus $1,000." Rollo wrote a check for five hundred dollars and left, promising to report any developments to Karen.

Karen immediately indorsed the check to Lord Properties, the owner of her building, and took it to the office of Larry Lord, the president of the company, in payment of the current month's rent. As she began to talk to Larry, she noticed that he seemed uncomfortable. Soon he told Karen that he was in considerable physical pain because of a fall that he had recently suffered. He explained that he had been dining at Vongole a few days earlier, and that as he was leaving, he had slipped on some liquid that had been spilled on the floor near the exit. The conversation eventually resulted in an agreement that Karen would represent Larry in asserting a claim against Vongole, which, he told Karen, was insured by the Ironclad Insurance Company.

That evening, Karen dined at Vongole; as was her custom, Maria took a few minutes from her work to sit with Karen and talk. Karen casually mentioned that she had heard that Larry had fallen recently in the restaurant; "Yes," Maria responded, "one of the bus boys spilled some soup there near the entrance. We should have had it cleaned up right away, but we were busy that night and we didn't get to it for about twenty minutes. During that time Larry came along and fell. He didn't seem to be hurt at all; he just got up and shrugged it off. I offered to take him to the emergency room but he said that he was fine." At this point, Maria was called to deal with a problem and the conversation ended there. After starting the lawsuit, Karen stopped dining at Vongole, and saw no more of Maria.

During the next few months, Karen negotiated with the Ironclad Insurance Company representative, but to no avail. Although she seemed willing to settle, Addie Juster, the company's representative, was dubious about the extent of Larry's injuries. Karen's strongest argument was that Larry was unable to do any heavy work or vigorous exercise. His medical reports were inconclusive, but his doctor was willing to testify that Larry probably would be unable for some time to live in the way that he had lived before the accident.

On June first, Karen visited Larry at his office to discuss the case and an upcoming deposition. Larry's secretary said that Larry was in the company's new fitness center and that Karen could go to that room and talk to Larry there. When she entered the room, she found Larry going through a vigorous workout, all with no apparent pain. In response to Karen's shocked expression, Larry winked and said, "You know, there are good days and bad days. Don't worry. When they take my deposition, it will be a bad day. Listen, Karen. I can't talk right now; something has come up that I need to deal with, but I'll call you in a few days, and we can talk about this whole thing."

Additional Facts and Questions

1. The Minnesota Department of Human Rights investigated Rollo for a possible violation of the Minnesota Human Rights Act. During the course of the investigation, Karen argued that Rollo had not unlawfully discriminated, but that he had made the apartment available to his daughter upon discovering that she needed a place to live. At Karen's suggestion, Rollo's daughter told the same story to the investigator. The investigation resulted in a finding that there was no probable cause to find that Rollo had violated the statute. Although she spent only ten additional hours on the matter, Karen demanded and received an additional $4,000 fee, which represented $3,000 in time spent plus the $1,000 bonus. Discuss Karen's conduct from the beginning of the relationship. What, if anything, did she do wrong? What should she have done?

2. Just before the deposition of Larry, Ironclad Insurance Company moved to have Karen disqualified as Larry's Counsel. If you were the judge, how would you rule? Explain all aspects of your ruling based on the arguments that you would expect each side to make.

3. If Karen were allowed to continue as Larry's counsel, what should she do as the date for the deposition approaches? Explain the alternatives and state what you feel to be the best approach, explaining why you reject some choices, but choose to follow the path that you select.

COMMENTS

General Comments

The results of the exam were somewhat disappointing. A number of students failed to discuss several issues. Some failed to discuss alternative possibilities.

Specific Comments

1. This question focusses on the relationship between Karen and her client, Rollo. Everybody recognized that Karen had done a lot of things wrong in this representation. In the first place, there is nothing wrong with representing a client who has committed an infraction of the law. There is, however, something wrong with representing a client in such a way as to facilitate the wrongdoing and to help further the illegal activity. Karen appears to be pursuing the latter course: she is suggesting ways in which Rollo can succeed in getting away with his illegal conduct and in fact achieve the illegal result that he wants. At some point, she seems to be lying to help him.

Besides being sleazy conduct, these actions probably violate at least Rule 1.2(d) and Rule 8.4(c) and (d). See also Rules 3.4(a)&(b) on the concealment, manufacturing, etc. of false evidence. Should she have taken this client at all? Should she have counselled him on the law and its purpose? If Rollo wished to use Karen's services to continue his discriminatory practices, clearly she should not have represented him. See Rule 1.16(a)(1) and, in Minnesota, Rule 1.16(a)(4). She certainly should have tried to make him see the error of his ways. See Rule 1.2. Some students suggested that perhaps, besides violating the usual rules relating to lying, etc., Karen violated Minnesota Rule 8.4(h), which forbids the lawyer to violate a law that forbids discrimination. One would have to see just what the applicable statutes and ordinances say in order to determine this.

Karen mishandled the fee arrangement in at least four ways. Several students did not discuss all of these fee issues; a couple of people did not discuss any fee issue. She charged a contingent fee without a written agreement in violation of Rule 1.5(c). Some students misunderstood Rule 1.5, and believed that a writing is required for all new clients; this is not true, though the Rule recommends that a writing be used. If the violation of the Human Rights Act could result in a criminal charge, she also violated Rule 1.5(d)(2) by charging a contingent fee in a criminal matter.

She accepted and used the advance fee payment without holding it in her trust account as required by Rule 1.15(a). By passing the check on to her landlord and not placing the fee payment in her trust account, drawing against it as she earns the fee by performing work for the client, she violated the rule even if she later "earned" the balance of the payment. This issue was one that a number of people failed to see.

She also charged more--a lot more--than the amount called for in the fee agreement. This is likely an unreasonable fee and a violation of Rule 8.4(c) as well. The fact that the client paid the fee does not change the fact that Karen behaved in a dishonest and unscrupulous manner, nor does it relieve her from possible sanctions including discipline and the loss of at least a portion of the fee. But this is not Karen's only problem.

She advised her client and a witness to lie and to mislead the investigators. This again violates Rule 1.2(d) and 8.4(c) and (d) and possibly 4.1 and 8.4(a). There are several technical arguments about the specific rules. If the Human Rights investigative process is a "proceeding," Karen violated Rule 3.1; at the investigation stage, probably no "tribunal" is involved, so it would be unlikely that there would be a violation of Rule 3.3 that forbids the submission of false evidence, lying to the tribunal, etc. Rule 3.9 imposes the same obligations on a lawyer to avoid presenting false evidence, etc., in a non-adjudicatory "proceeding," but it also speaks of a legislative or administrative "tribunal." Irrespective of the technicalities of the rules, however, she behaved reprehensibly in this matter.

2. The disqualification argument is likely based on two things: the fact that Karen had previously represented Maria and the fact that Karen elicited some information from Maria in an underhanded way. Courts typically consider several things in determining whether to grant a motion to disqualify counsel for the other side. The judge weighs the additional expense and inconvenience that would fall upon the client whose lawyer will be removed, and upon the court, if the motion were to be granted, and considers the policy that a client should generally have the lawyer that he wants to have. The court also looks at evidence of good faith and possible laches on the part of the moving party. If this looks like a tactical move to injure the opponent, the court is less likely to grant the motion. In this case, we don't know when Maria's lawyer learned about Karen's prior representation or her conduct involving the eliciting of information about the case. If the defense lawyer has known about this for a long time, this would weigh against the granting of the motion.

The court also considers the standards of Rule 1.9 in cases like this. Would Karen's representation of Larry against Maria result in a violation of that rule? The parties here are directly adverse. Thus, this looks like a 1.9(a) situation--if the "matter" in question is the same matter or is substantially related to the matter involved in the prior representation. In deciding this issue, courts often inquire whether anything might have been learned in the prior representation that could be used to the former client's disadvantage in the present matter. The earlier representation of Maria involved a zoning or building code matter related to an exterior sign. It seems unlikely that anything was learned in that representation that would be of help in the present matter. Without more information, it is hard to believe that these matters are substantially related.

Some people felt that Rule 1.7 would be implicated here. This is unlikely, because it doesn't appear that Maria is a current client (though some people said that her openness with Karen suggested that she believed that she was talking to her lawyer); furthermore, if 1.7(b) were at issue, Karen's friendship with Maria might limit her representation of Larry, but this would be a conflict to which Larry could consent. It is hard to see how Maria's lawyer could raise this issue in an attempt to disqualify Karen.

Karen learned some important information in a devious manner. In her casual conversation with Maria, she opened the subject of the accident without disclosing her representation of the injured party. We don't know whether Maria was represented by counsel at the time. Under the circumstances, it seems that Karen should have at least made an effort to find out. If she "knows" that Maria is represented, she has violated Rule 4.2. If we consider the definition of "knows" in the Terminology that precedes the rules, we might infer that Karen knows that Maria is represented, because she must have realized that when a liability insurance company is in the picture, the insured is, or soon will be, represented by a lawyer.

If Maria is not represented at the time of the conversation, Karen appears to have violated Rule 4.3 because her conduct during the conversation implied that she was disinterested and she did nothing to correct that impression. Her conduct was deceptive and devious. Again here, as throughout this discussion, Rule 8.4(c) and (d), and perhaps Rule 4.1, all seem to be implicated.

Karen might argue that the information that she obtained from Maria is in any case discoverable, and that she would have learned it during the pre-trial process, so no harm was done. She has no information that would help her that she was not entitled to anyway. Her alleged violations of the Rules, she might argue, should not be used to get her removed from the case. While a court, in deciding the disqualification motion,⁽¹⁾ might give some credence to the former argument, it is unlikely to be impressed by the latter argument in spite of the language in the preamble to the rules about these being only disciplinary rules, not meant to be used for other purposes. Courts routinely apply the standards laid out in the rules to help decide disqualification motions.

3. The only real choice that Karen has (unless she decides to continue to be a sleazy and dishonest lawyer) is to encourage Larry to abandon what appears to be a course of fraud and deception. The rules forbid her to help further this conduct. See Rule 1.16(a) again. She cannot help him (Rule 1.2(d)); she cannot allow him to testify, even in the deposition, to the effect that he is suffering pain and that his activities are limited if those things are not true (Rule 3.3(a)(4)). Rule 3.4(b) seems also to be at issue here. Karen could be helping a witness to testify falsely. On the other hand, Larry says that there are good days and bad days. Might she "reasonably believe" that the evidence is false, in which case the rule would allow her to offer it, but not "know" it, in which case she would be forbidden to offer it? Compare Rules 3.3(a)(4) and (c). Note that here Rule 1.6 is specifically subordinated to the requirement not to mislead the tribunal with false evidence. Rule 3.3(b).

If Larry refuses to testify to the truth and persists in his apparently false claim of pain and suffering, what options are open to Karen? She might withdraw (See Rule 1.16). She might threaten Larry with disclosure of the truth if he does not testify honestly and then withdraw if this threat is unsuccessful. She must in any case take whatever steps are appropriate to prevent the fraud on the court (Rule 3.3) and the deceiving of the other side (Rule 3.4(b)).

One might argue that the deposition does not result in the offering of evidence--that will be done in court--and so at this stage Rule 3.3 is not implicated. Furthermore, one might argue that the Rule of 3.4 is not specifically made superior to Rule 1.6 as is Rule 3.3. If Karen quits or is fired before trial, could she disclose in order to prevent Larry's fraud or crime? In Minnesota, the answer is easy: Karen may disclose the client's intention to commit any crime. In a Model Rule state, if Rule 3.3 is not applicable, Rule 1.6 would technically not allow Karen to disclose to the other side because the threatened action does not constitute a crime involving imminent death or substantial bodily harm. This seems, however, to be a technical and sophistic argument. It clearly would be wrong to let Larry tell the false story at the deposition and Karen ought not to allow it, whether to do so would break a rule or not.

Grade Spread

A

A- 1

B+ 2

B 1

B- 4

C+ 8

C 8

C- 5

D+ 1

D 2

D-

F

n=32

median = C/C+

1. There is no "no harm, no foul" rule in disciplinary matters, so if a complaint were made and an investigation done, it is likely that Karen would be disciplined for violating either Rule 4.2 or 4.3 and Rule 8.4(c) and (d) as well.