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 ÔÔ  ÔÓ  ÓÔ€€Xü¯XX€XÔÔ€Xü¯XX€Xü¯ÔÝ  ÝÔ_ÔÖ€&ÿÿÖò òÓ  ÓFEBRUARY€2006€BAR€EXAMINATIONÐ ° ÐÌQUESTIONS€AND€REPRESENTATIVE€GOOD€ANSWERSÐ |Ì ÐÌQUESTION€1Ð H˜ ÐÌó óÓ  Ó€€€€€€€€€€Hank€and€Wilma€are€married.€€In€2004,€Wilma€obtained€a€loan€for€$20,000,€from€Bank.€Ð  d ÐThe€loan€was€in€both€their€names.€€This€loan€was€taken€without€Hankððs€knowledge€or€consent.€€Ð ú J Ðà  àÌà  àWhen€the€loan€documents€were€signed,€Wilma€told€Bank€that€Hank€was€sick€and€couldÐ Æ   Ðnot€be€there.€€Bank€required€a€Power€of€Attorney€from€Hank.€€Wilma€produced€a€forged€PowerÐ ¬ ü  Ðof€Attorney€that€granted€Wilma€the€power€to€sign€Hankððs€name€to€the€loan€documents.€€BankÐ ’â  Ðplaced€the€proceeds€directly€into€their€joint€account.Ð xÈ  Ðà  à€Ð ^®  Ðà  àWithin€a€few€months,€Wilma€purchased€a€refrigerator,€pool€table€and€some€otherÐ D”  Ðfurniture€with€the€loan€proceeds.€€Additionally,€she€purchased€jewelry€for€herself€and€a€watch€forÐ *z  ÐHank.€€Hankððs€watch€cost€$1000.€€Wilma€used€the€$20,000€loan€proceeds€for€these€purchasesÐ ` Ðand€incurred€debt€of€an€additional€$5,000€to€complete€the€purchases.Ð öF Ðà  àÌà  àHank€inquired€about€the€purchases€and€discovered€Wilma€has€made€the€loan€without€hisÐ Â Ðknowledge€and€has€spent€the€entire€$20,000.Ð ¨ø Ðà  àÌà  àDuring€2005,€Hank€managed€to€pay€off€the€$5,000€balance€owed€on€the€purchases.€€NoÐ tÄ Ðmoney€was€paid€to€Bank€on€the€loan.Ð Zª ÐÌà  àò òAnalyze€Hankððs€potential€liability€to€Bank.€€Discuss€your€answer€fullyó ó.Ð &v ÐÓ  Óò òÌÔ€*X¯(XXXü¯ÔÌÔ€Xü¯XX*X¯(ÔREPRESENTATIVE€ANSWER€1Ð Ó# ÐÌÓ XÓó óÓ  ÓHank€and€Wilma€were€a€married€couple.€€Wilma€entered€into€a€loan€with€Bank€withoutÐ Ÿï ÐHankððs€knowledge€or€consent€and€forged€a€power€of€attorney€for€him€granting€her€the€power€toÐ … Õ Ðsign€on€the€loans.€€Now,€Bank€seeks€to€recover€on€the€debt€from€Hank.€Ð k!»  ÐÓ XÓà  àòòÌóóò ò€€€€€€€€€€€€òòRatification.ó óóó€€Ratification€of€a€contract€occurs€when€the€person€not€authorizing€theÐ 7#‡" Ðcontract€learns€of€the€material€terms,€approves€of€the€entire€agreement€and€has€authority€to€do€so.€Ð $m# ÐHere,€Wilma€obtained€the€loan€without€Hankððs€knowledge€or€consent,€yet€used€forgedÐ %S $ Ðauthorization€to€sign€his€name.€€Although€Hank€did€not€know€of€the€agreement,€Wilma€placedÐ é%9!% Ðthe€proceeds€into€their€joint€account.€€Additionally,€she€purchased€household€items€such€as€theÐ Ï&"& Ðrefrigerator€and€pool€table€with€the€money.Ð µ'#' Ðà  àÌà  àHank€later€asked€about€the€purchases€and€was€told€about€the€loan.€€Subsequently,€he€paidÐ )Ñ$) Ðoff€the€$5,000€balance€owed€on€the€purchases.€€Bank€will€agree€that€all€of€these€acts€put€Hank€onÐ g*·%* Ðnotice€of€the€loan€as€his€actions€of€taking€the€watch,€learning€about€the€loan€and€not€disavowingÐ M+&+ Ðit,€and€paying€on€the€additional€debt€show€that€he€knew€of€and€approved€of€the€agreement.€€BankÐ 3,ƒ', Ðcan€collect€from€Hank€for€ratifying€the€agreement.Ð ° Ðà  àÌà  àòòò òSignature€Liabilityó óóó.€€Bank€can€also€argue€that€Hankððs€name€is€on€the€loan€and€theyÐ |Ì Ðrelied€on€his€apparent€authority€via€the€power€of€attorney.€€However,€the€forged€signature€aloneÐ b² Ðwill€not€serve€to€bind€Hank€since€he€had€no€knowledge.Ð H˜ Ðà  àÌÓÓÓÓà  àBank€may€also€argue€that€as€a€married€couple,€Wilma€and€Hank€are€like€a€partnership€andÐ  d ÐHank€should€be€liable€for€all€debts€incurred€during€the€marriage.€€However,€here€the€debt€wasÐ ú J Ðentered€into€via€fraud€on€the€part€of€Wilma.€€Since€Wilma€forged€the€power€of€attorney€and€HankÐ à 0 Ðoriginally€had€no€knowledge€of€the€loan.€€He€will€not€be€liable€on€this€theory.Ð Æ   ÐÓÄÓÓ  Óò òÌREPRESENTATIVE€ANSWER€€2Ð xÈ  ÐÓ XÓÓ  ÓÓÓó óTo€act€as€the€agent€of€another,€one€must€have€actual,€implied€authority.€€Here€Wilma€mayÐ D”  Ðhave€apparent€authority€only.€€Also,€Hank€probably€ratified€the€transaction.Ð *z  ÐÓ XÓà  àÌà  àA€husband€and€wife€are€not€automatically€agents€of€each€other€and€cannot€automatically€bindÐ öF Ðthe€other.€€When€Wilma€went€for€the€loan,€in€both€their€names,€her€signature€was€not€sufficient€toÐ Ü, Ðbind€Hank.€€This€is€why€the€bank€required€a€power€of€attorney.Ð Â Ðà  àÌà  àWhen€a€third€party€is€led€to€believe€that€one€has€the€ability€to€act€as€anotherððs€agent,€andÐ ŽÞ Ðrelies€on€this€representation,€the€person€held€out€as€an€agent€may€have€apparent€authority€to€act€onÐ tÄ Ðthe€principalððs€behalf.€€Here,€Hank€did€not€hold€Wilma€out€as€an€agent,€so€it€could€argue€she€didnððtÐ Zª Ðhave€authority.€€However,€Wilmaððs€forged€power€of€attorney€led€Bank€to€reasonably€believe€WilmaÐ @ Ðwas€his€agent.€€Thus,€Wilma€probably€had€apparent€authority€and€Hank,€as€the€represented€principal,Ð &v Ðis€bound€on€the€debt€owed.Ð  \ Ðà  àÌà  àWhen€an€agent€acts€without€any€implied,€actual,€or€apparent€authority,€the€principal€may€beÐ Ø( Ðsubsequently€bound€if€they€ratify€the€transaction€by€agreement,€or€probably€accepting€the€benefit.€Ð ¾ ÐHere,€Bank€can€argue€Hankððs€subsequent€use€and€enjoyment€of€items€bought€with€the€loan€proceedsÐ ¤ô Ðconstitutes€a€ratification€binding€Hank,€even€if€Wilma€had€no€apparent€authority.€€The€refrigerator,Ð Š Ú Ðpool€table,€and€furniture€were€all€enjoyed€and€used€by€Hank,€who€shared€(presumably)€a€home€withÐ p!À  Ðwife.€€Certainly,€the€expensive€watch€inured€to€his€benefit.€€Hank€may€defend€he€had€no€actualÐ V"¦! Ðknowledge€of€how€these€items€were€purchased,€but€they€obviously€came€from€a€source€of€funds,€oneÐ <#Œ" Ðwhich€he€could€have€seen€on€a€joint€bank€account€statement.€€Also,€bills€on€the€loan€probably€cameÐ "$r# Ðaddressed€to€Hank€and€Wilma€several€times€over€the€past€year.€€Hank€shouldnððt€be€allowed€to€useÐ %X $ Ðhis€willful€ignorance€to€avoid€liability€via€ratification.€€Additionally,€the€fact€that€Hank€paid€offÐ î%>!% Ð$5,000€additional€debt€could€evidence€a€sense€of€obligation€on€these€purchases.Ð Ô&$"& Ðà  àÌà  àBecause€Wilma€had€apparent€authority€and/or€Hank€ratified€the€loan,€Hank€is€liable€to€bankÐ  (ð#( Ðfor€the€loan€amount,€jointly€and€severally€with€Wilma,€and€any€late€fees.Ð †)Ö$) ÐÌÓ  ÓÌÓ  Óò òÐ  8,ˆ', ÐQUESTION€2Ð ° ÐÓ  Óó óà  àÌà  àIn€2003,€The€Carroll€County€Government€invited€area€general€contractors€to€bid€on€theÐ |Ì Ðconstruction€of€the€Ô_ÔFinksburgÔ_Ô€Senior€Care€and€Animal€Husbandry€Center€(ð ðthe€Projectðð).€€TheÐ b² Ðprojectððs€anticipated€construction€cost€was€Five€Million€Dollars€($5,000,000).€€Ð H˜ Ðà  àÌà  àMighty€Contracting€Company,€(ð ðÔ_ÔMCCÔ_Ôðð)€a€general€contractor€located€in€BaltimoreÐ  d ÐCounty,€Maryland,€obtained€written€estimates€from€area€subcontractors€including€DDDÐ ú J ÐEngineering€(ð ðDDDðð).€€€Ô_ÔMCCÔ_Ô€was€surprised€by€DDDððs€low€estimate€but€relied€heavily€on€itsÐ à 0 Ðestimate€to€submit€a€bid€to€the€County.€€€Ô_ÔMCCÔ_Ô€was€the€lowest€bidder€and€was€awarded€theÐ Æ   Ðcontract€to€build€the€project€for€$3,000,000.Ð ¬ ü  Ðà  àÌà  àBefore€signing€the€subcontract€with€Ô_ÔMCCÔ_Ô,€DDD€discovered€a€significant€error€in€its€ownÐ xÈ  Ðcalculations€and€realized€that€its€estimate€should€have€been€much€higher.€€DDD€withdrew€itsÐ ^®  Ðestimate€and€refused€to€sign€any€contract€to€perform€the€work€at€the€originally€quoted€price.Ð D”  Ðà  àÌà  àÔ_ÔMCCÔ_Ô€was€forced€to€perform€the€contract€with€the€County,€and,€as€a€direct€result€ofÐ ` ÐDDDððs€error,€incurred€an€extra€$2,000,000€in€expenses€to€complete€the€project.€Ð öF Ðà  àÌà  àÔ_ÔMCCÔ_Ô€timely€filed€a€lawsuit€in€the€appropriate€Maryland€Circuit€Court€against€DDDÐ Â Ðseeking€damages€for€the€$2,000,000€it€paid€to€complete€the€job€in€excess€of€its€original€bid.Ð ¨ø ÐÓ  Óò òÌÓ dÓWhat€must€Ô_ÔMCCÔ_Ô€prove€to€succeed€in€its€claim€against€DDD?€€Discuss€fully.ó óòòÐ tÄ ÐÓ dÓò òóóÌREPRESENTATIVE€ANSWER€1Ð ¤ô Ðó óÌÌÓ dÓÓ  Óà  àòòò òA€Contractó óóó.€€€In€order€to€succeed€in€a€claim€against€DDD,€Ô_ÔMCCÔ_Ô€must€prove€that€there€wasÐ V¦ Ða€breach€of€a€contract€by€DDD.€This,€first,€requires€proof€that€a€contract€existed€between€the€twoÐ <Œ Ðparties.€A€contract€requires€offer,€acceptance,€and€consideration€or€a€consideration€substitute.€Here,Ð "r ÐÔ_ÔMCCÔ_Ô€must€prove€that€a€contract€was€formed.Ð  X Ðà  àòòò òOffer.ó óóó€€Offer€is€manifestation€of€a€present€intent.€To€contract€with€definite€terms,€andÐ R!¢ Ðcommunicated€to€the€party.€Here,€Ô_ÔMCCÔ_Ô€obtained€written€estimate€from€DDD€(a€low€estimate).€Ô_ÔMCCÔ_ÔÐ 8"ˆ  Ðmust€argue€that€this€constituted€an€òòofferóó.Ð #n! Ðà  àòòò òAcceptance.óó€€ó óAcceptance€requires€accepting€the€offer€and€its€terms.€Here,€Ô_ÔMCCÔ_Ô€òòacceptedóóÐ h$¸" Ðthe€estimate€and€submitted€bid€to€county€and€were€awarded€contract.Ð N%ž # Ðà  àòòò òConsideration€or€Substituteó óóó.€€A€consideration€substitute€is€detrimental€reliance€orÐ ˜&è!$ Ðpromissory€estoppel.€A€person€is€Ô_ÔestoppedÔ_Ô€from€denying€the€existence€of€a€contract€where€they€knewÐ ~'Î"% Ðthat€their€promise€of€acceptance€would€induce€detrimental€reliance€or€action.€Here,€DDD€shouldÐ d(´#& Ðhave€known€that€the€submission€of€a€low€bid€to€Ô_ÔMCCÔ_Ô€would€reduce€reliance€on€the€bid€to€theÐ J)š$' ÐCounty.€Therefore,€Ô_ÔMCCÔ_Ô€can€argue€that€based€on€low€bid,€they€detrimentally€relied€on€it€ð"ð€theyÐ 0*€%( Ðð ðrelied€heavilyðð€and€thus,€DDD€is€Ô_ÔestoppedÔ_Ô€from€denying€the€contract€because€it€was€foreseeableÐ +f&) Ðthat€Ô_ÔMCCÔ_Ô€would€rely€on€the€bid.Ð ü+L'* Ðà  àòòò òDDDó óóó.€€DDD€will€claim€that€there€was€no€contract,€they€withdrew€estimate€before€signingÐ ° Ðthe€contract€and€that€Ô_ÔMCCÔ_Ôððs€reliance€was€not€called€for€because€Ô_ÔMCCÔ_Ô€should€have€known€it€was€aÐ –æ Ðmiscalculation,€after€all€they€were€ð ðsurprisedðð€by€the€low€estimate.Ð |Ì ÐÓ dÓÓ  Óà  àòòò òCustom€in€Industry€/€Ordinary€Course€of€Businessó óóó.€€€In€order€to€win€on€a€theory€ofÐ Æ Ðdetrimental€reliance/promissory€Ô_ÔestoppedÔ_Ô,€Ô_ÔMCCÔ_Ô€can€prove€that€it€is€the€custom€in€the€contractingÐ ¬ü Ðbusiness€to€accept€a€low€bid,€and€a€bidder€(subcontractor)€should€know€that€submission€of€a€bidÐ ’ â Ðis€an€offer,€to€be€accepted,€and€that€person€named€detrimentally€rely€on€bid.€If€Ô_ÔMCCÔ_Ô€can€prove€Ð x È ÐÓ­/Óthis,€then€Ô_ÔMCCÔ_Ô€can€recover€the€$2,000,000€from€DDD€based€on€a€theory€of€detrimental€reliance€orÐ ^ ® Ðpromissory€estoppel€and€DDD€will€be€Ô_ÔestoppedÔ_Ô€from€denying€existence€of€contract.Ð D ” ÐÓ  Óò òÌREPRESENTATIVE€ANSWER€2Ð `  Ðó óÌÓ dÓÓ XÓÓ  ÓIn€order€to€recover€damages€resulting€from€DDDððs€refusal€to€perform,€Ô_ÔMCCÔ_Ô€must€prove€theÐ Ü,  Ðfollowing:Ð Â  ÐI.€Detrimental€RelianceÐ  \  ÐÓ XÓà  àGenerally,€once€an€offer€has€been€accepted€it€may€not€be€revoked,€absent€limitedÐ V¦ Ðcircumstances.€In€this€case,€Ô_ÔMCCÔ_Ô€would€be€required€to€prove€that€it€detrimentally€and€reasonablyÐ <Œ Ðrelied€on€DDDððs€bid€and€effectively€created€an€acceptance€by€relying€on€such€bid€(offer)€inÐ "r Ðsubmitting€its€proposal€to€the€Carroll€County€Government€Project.€However,€if€it€was€not€reasonableÐ X Ðfor€Ô_ÔMCCÔ_Ô€to€rely€on€such€a€low€bid€which€may€be€inferred€from€Ô_ÔMCCÔ_Ôððs€ð ðsurprise,ðð€a€Court€may€notÐ î> Ðallow€Ô_ÔMCCÔ_Ô€to€enforce€the€supposed€contract€between€Ô_ÔMCCÔ_Ô€and€DDD.€In€other€words,€to€the€extentÐ Ô$ ÐDDDððs€low€bid€would€not€have€reasonably€been€relied€upon€by€someone€in€the€business€of€generalÐ º  Ðcontracting€like€Ô_ÔMCCÔ_Ô,€the€Court€may€not€allow€for€Ô_ÔMCCÔ_Ô€to€be€awarded€damages€for€unreasonableÐ  ð Ðreliance.Ð †Ö ÐÓ XÓÓ?+ ` ¸ hÀpÈ xÐ (#°œX?ÓII.€Unilateral€MistakeÐ Ð  ÐÓ XÓÓH.°°` ¸ hÀpÈ xÐ (#ŠXÐ XHÓà  àGenerally,€courts€refrain€for€rescinding€contracts€where€one€party€has€made€a€unilateralÐ j Ðmistake.€In€this€case,€DDD€has€asserted€that€its€offer€(bid)€to€Ô_ÔMCCÔ_Ô€was€a€mistake,€as€it€should€haveÐ P Ðbeen€ð ðmuch€higher.ðð€However,€Ô_ÔMCCÔ_Ô€will€have€a€defense€to€such€claim€if€it€can€prove€that€itÐ æ6 Ðreasonably€and€detrimentally€relied€on€such€offer€and€as€a€result€of€DDDððs€breach€of€performance,Ð Ì ÐDDD€should€not€be€excused€from€its€contractual€obligation.€Here,€once€DDD€submitted€the€bid,€itÐ ²  Ðwas€foreseeable€that€Ô_ÔMCCÔ_Ô€would€rely€on€such€bid€as€it€was€invited€to€bid€on€the€Carroll€CountyÐ ˜!è ÐGovernment€Project.€Since,€DDD€was€aware€of€such€use€of€the€subcontractor€offer,€it€would€beÐ ~"Î Ðunjust€to€force€Ô_ÔMCCÔ_Ô€to€bear€the€burden€of€DDDððs€revocation.€However,€as€stated€above,€a€court€mayÐ d#´  Ðavoid€assigning€liability€to€DDD€where€Ô_ÔMCCÔ_Ô€should€have€known€that€DDDððs€bid€contained€aÐ J$š! Ðmistake.€Depending€on€the€magnitude€and€scope€of€Ô_ÔMCCÔ_Ôððs€surprise,€DDD€may€have€a€defense€toÐ 0%€ " Ðsuch€liability.€Likewise,€a€court€would€also€consider€how€quickly€DDD€notified€Ô_ÔMCCÔ_Ô€of€theÐ &f!# Ðdiscovered€mistake€and€whether€any€bad€faith€by€DDD€existed€as€to€submit€an€ð ðincorrectðð€bid€inÐ ü&L"$ Ðorder€to€procure€its€status€as€a€subcontractor€on€the€Project.Ð â'2#% ÐÓ XÓIf€Ô_ÔMCCÔ_Ô€can€successfully€prove€that€it€detrimentally€and€reasonably€relied€on€the€DDD€bid,Ð ,)|$& Ðand€that€such€bid€constituted€an€offer€which€was€not€revocable€(these€facts€do€not€trigger€analysisÐ *b%' Ðunder€an€option€contract),€then€Ô_ÔMCCÔ_Ô€and€DDD€had€a€valid€contract.€Once€DDD€breached€suchÐ ø*H&( Ðcontract€by€failing€to€perform€its€obligations€as€a€subcontractor€on€the€Project,€it€became€liable€forÐ Þ+.') Ðdamages€(i.e.€the€$2,000,000€difference€to€cover€the€cost€of€its€obligation€to€perform€under€theÐ ° Ðproject).€In€such€case,€DDD€could€not€avoid€liability€of€its€mutual€assent€to€contract€with€Ô_ÔMCCÔ_Ô.Ð –æ ÐÓ  ÓÐ à0 ÐÓ dÓÓ XÓò òÐ  *z ÐÑ€"OYÑQUESTION€3ó óÐ ° ÐÓ dÓÓ XÓÓ  ÓÐ –æ ÐOn€June€1,€2004,€Ann€Plaintiff€was€involved€in€an€automobile€accident€with€a€pickupÐ à0 Ðtruck€driven€by€Darryl€Defendant.€€The€accident€took€place€in€Kent€County,€Maryland,€€whereÐ Æ ÐAnn€resides€and€Darryl€attends€college.€€Ann€was€injured€and€was€treated€at€the€local€hospital.€Ð ¬ü ÐThere€were€several€witnesses€to€the€accident.€€The€truck€driven€by€Darryl€was€owned€by€Rich,Ð ’ â ÐDarrylððs€father.€€Rich€and€Darryl€are€residents€of€Maine€and€the€truck€is€registered€there.€€BeforeÐ x È ÐDarryl€left€for€college,€Rich€gave€him€the€keys€to€the€truck€and€told€him€he€could€use€it€atÐ ^ ® Ðcollege.Ð D ” ÐOn€October€3,€2005,€Ann€filed€an€action€for€money€damages€in€the€Circuit€Court€forÐ Ž Þ  ÐBaltimore€City€against€Darryl€and€Rich.€€Count€I€alleged€that€Darrylððs€negligent€operation€of€theÐ tÄ  Ðpickup€truck€caused€the€accident.€€Count€II€alleged€that€Rich€negligently€entrusted€the€pickup€toÐ Zª  ÐDarryl.€Ð @  ÐA€private€process€server€served€the€summons€and€complaint€on€Rich€at€his€office€inÐ ŠÚ  ÐMaine€on€October€17òòthóó.€€Darryl€was€personally€served€with€a€summons€and€the€complaint€whileÐ pÀ  Ðat€his€dormitory€on€the€same€day.Ð V¦ ÐRich€is€a€college€professor.€€Five€years€ago,€he€attended€a€conference€in€BaltimoreÐ  ð Ðregarding€his€academic€speciality€and€has€visited€Darryl€at€college€twice€in€the€last€two€years.€Ð †Ö ÐOtherwise,€he€has€not€been€in€Maryland.€€He€is€a€major€shareholder€and€a€director€of€Hi„Tech,Ð l¼ ÐInc.,€a€high€technology€company€which€makes€sales€to€Maryland€businesses€on€a€regular€basis.Ð R¢ Ðò òà ` à1.€€How€long€from€the€date€of€service€does€Darryl€have€to€file€an€answer€orÐ œì Ðother€responsive€pleading?€€Ð ‚Ò Ðà ` à2.€€How€long€from€the€date€of€service€does€Rich€have€to€file€an€answer€orÐ Ì Ðother€responsive€pleading?€€Ð ² Ðà ` à3.€€Darrylððs€lawyer€believes€that€it€would€be€in€Darrylððs€best€interest€to€tryÐ üL Ðthe€case€in€Kent€County.€€What€steps€can€he€take€to€accomplish€this?€€What€factors€will€theÐ â2 ÐCourt€weigh€in€ruling€on€the€request?Ð È Ðà ` à4.€€Based€on€these€facts,€does€Rich€have€a€basis€for€arguing€that€the€actionÐ  b Ðagainst€him€should€be€dismissed?€€How€should€the€issue€be€raised?€€How€is€the€Court€likelyÐ ø H Ðto€rule?Ð Þ!. ÐÓ  ÓÓÓREPRESENTATIVE€ANSWER€1ó óÐ (#x ÐÓ  ÓÓÓà ` àa..€€Under€Rule€2„321(a),€if€a€party€is€served€with€process€within€the€State€ofÐ X%¨  ÐMaryland,€he€has€30€days€within€being€served€to€file€an€answer.€Ð >&Ž!! ÐHere,€Darryl€was€personally€served€with€a€summons€and€complaint€while€at€his€MarylandÐ ˆ'Ø"" Ðdormitory€on€October€17òòthóó€(within€60€days€of€Annððs€October€3òòrdóó€filing,€so€dormancy€is€not€anÐ n(¾## Ðissue).Ð T)¤$$ ÐTherefore,€Darryl€must€file€his€answer€by€November€17òòthóó€(unless€it€falls€on€a€weekend€orÐ ž*î%% Ðholiday).€€If€Darryl€files€another€responsive€pleading€(such€as€a€motion€to€dismiss),€his€time€toÐ „+Ô&& Ðfile€an€answer€is€extended€to€15€days€after€the€court€rules€(and€files€an€order)€on€the€motion,Ð ° Ðunder€subsection€(c)€of€2„321.Ð –æ Ðà ` àb.€Under€Rule€2„321€(b)(1),€if€a€party€is€served€with€process€outside€of€MarylandÐ à0 Ðbut€within€the€U.S.,€he€has€60€days€within€being€served€to€file€an€answer.Ð Æ ÐHere,€Rich€was€also€personally€served€on€October€17òòthóó,€only€he€was€in€his€Maine€officeÐ  ` Ðand€not€in€Maryland.Ð ö F ÐTherefore,€Rich€must€file€his€answer€by€December€17òòthóó€(unless€it€falls€on€a€weekend€orÐ @  Ðholiday).€€As€discussed€above,€the€filing€of€another€responsive€pleading€(e.g.,€a€motion€toÐ & v Ðdismiss)€extends€the€time€for€an€answer.Ð  \ Ðà ` àc.€Under€the€law€of€Maryland€civil€procedure,€venue€is€where€in€the€State€theÐ V¦  Ðaction€can€be€brought.€€It€has€nothing€to€do€with€jurisdiction€per€se,€and€it€is€the€defendantððsÐ <Œ  Ðprerogative.Ð "r  ÐÓ dÓÓ XÓÌÓ dÓÓ XÓHere,€Ann€filed€the€action€in€Baltimore€City,€where€neither€she€nor€the€defendantððsÐ R¢  Ðreside.€€The€accident€did€not€take€place€in€Baltimore€City.Ð 8ˆ ÐTherefore,€if€Darryl€wishes€to€have€the€case€tried€in€Kent€County,€he€should€file€a€motionÐ ‚Ò Ðto€dismiss€for€improper€venue€(must€be€filed€before€the€answer,€or€it€is€waived,€as€it€is€aÐ h¸ Ðmandatory€preliminary€motion).€€Section€6„201(a)€authorizes€venue€in€a€county€where€theÐ Nž Ðdefendant€resides€(which€is€Kent€County,€in€Darrylððs€case),€and€Section€6„201(b)€authorizesÐ 4„ Ðvenue€in€the€county€where€the€cause€of€action€arose€(also€Kent€County€here)€in€a€case€where€noÐ j Ðsingle€venue€is€applicable€to€all€defendants.€€The€court€will€also€consider€factors€of€fairness€toÐ P Ðparties€and€convenience€(or€lack€thereof)€for€parties€and€witnesses.Ð æ6 Ðà ` àd.€Under€the€laws€of€Maryland€civil€procedure,€a€court€must€have€personalÐ 0€ Ðjurisdiction€over€the€parties,€which€can€be€obtained€through€various€means.Ð f ÐHere,€Ann€is€suing€Rich€for€negligent€entrustment.€€Since€Rich€lives€in€Maine€(meaningÐ `° Ðthat€he€is€not€domiciled€in€Maryland),€and€he€was€not€served€in€Maryland,€the€court€does€notÐ F– Ðhave€personal€jurisdiction€under€Section€6„102.€€Even€though€Rich€is€a€major€shareholder€of€Hi„Ð ,| ÐTech€(which€appears€to€do€business€in€Maryland),€the€cause€of€action€(the€car€accident)€did€notÐ  b Ðarise€out€of€his€business€actions,€as€required€by€Section€6„103.Ð ø H ÐÐ B"’ ÐTherefore,€Rich€should€file€a€motion€to€dismiss€for€lack€of€personal€jurisdiction€(must€beÐ Œ#Ü Ðfiled€before€the€anser,€or€it€is€waived,€as€it€is€a€mandatory€preliminary€motion).€Unless€there€isÐ r$ Ðsome€agency€relationship€between€Rich€and€Darryl€(causing€Rich€to€be€subject€to€DarrylððsÐ X%¨  Ðpersonal€jurisdiction),€the€court€should€grant€Richððs€motion.Ð >&Ž!! ÐÐ ˆ'Ø"" ÐÓ  Óò òREPRESENTATIVE€ANSWER€2ó óÐ Ò("$# ÐÓ  ÓÐ *l%$ Ðà ` àa.€€Darryl€has€to€file€an€answer€or€other€responsive€pleading€within€30€days€ofÐ f+¶&% ÐOctober€17òòthóó€because€he€was€served€in€state.€Rule€2„321(a).Ð L,œ'& Ðà ` àb.€€Rich€has€60€days€to€respond€after€being€served€to€respond,€as€he€was€servedÐ ° Ðoutside€of€the€State€of€Maryland€but€within€the€U.S.€Rule€2„321€(b)(1)Ð –æ Ðà ` àc.€€Darryl€should€file€a€motion€for€improper€venue,€which€is€a€preliminary€motion.€Ð à0 ÐThe€plaintiff€must€bring€the€action€in€a€place€where€all€the€defendants€have€proper€venue,Ð *z Ðthen€the€plaintiff€may€sue€where€any€one€defendant€can€be€sued€or€where€the€cause€of€actionÐ  ` Ðarose.€Rule€6„201(b).€€The€court€will€likely€rule€that€it€is€the€proper€venue€because,€since€bothÐ ö F ÐRich€and€Darryl€are€non„residents€(as€a€student€Rich€does€not€obtain€residency€in€the€State€ofÐ Ü , ÐMaryland),€and€as€non„residents€they€can€be€sued€in€any€county€in€the€State.€€Rule€6„202(11)Ð   ÐDarryl€may€also€make€a€motion€for€change€of€venue,€if€there€is€more€than€one€properÐ  \ Ðvenue.€€The€place€where€the€accident€took€place,€Kent€County,€is€also€a€proper€venue€when,€asÐ ò B  Ðhere,€the€claims€bing€made€are€based€on€negligence.€Rule€6„202(8).€€In€deciding€this€motion€theÐ Ø(  Ðcourt€will€look€at€the€burdens€imposed€on€the€parties€by€the€change€of€venue,€any€potentialÐ ¾  Ðprejudice€that€might€result€from€the€change,€the€relationship€of€the€new€venue€to€the€claim,€andÐ ¤ô  Ðthe€convenience€of€the€new€venue.€The€court€will€likely€grant€the€change€of€venue€because€KentÐ ŠÚ  ÐCounty€is€where€the€plaintiff€resides,€where€Darryl€attends€school€and€where€the€accidentÐ pÀ  Ðoccurred.€€Kent€County€has€substantial€ties€to€the€claim€and€the€parties,€and€a€change€of€venueÐ V¦ Ðmotion€will€likely€be€granted.Ð <Œ Ðà ` àd.€€Rich€can€argue€that€the€court€should€dismiss€because€it€lacks€jurisdiction€overÐ †Ö Ðhim.€Rich€was€served€in€accordance€with€Marylandððs€long€arm€statute,€6„102(a);€however€it€mustÐ l¼ Ðalso€be€demonstrated€that€Rich€has€such€minimum€contacts€with€Maryland€that€the€exercise€ofÐ R¢ Ðpersonal€jurisdiction€does€not€offend€traditional€notions€of€fair€play€and€substantial€justice.€Ð 8ˆ Ðà ` àà ¸ à(Ô_ÔiÔ_Ô)€Minimum€contacts€„€Rich€has€visited€his€son€and€attended€a€conference,Ð ‚Ò Ðamounting€to€three€visits€and€also€is€the€director€of€a€company€which€sells€to€Maryland.Ð h¸ Ðà ` àà ¸ à€(ii)€Ô_ÔForeseeabilityÔ_Ô€„€because€Rich€loaned€his€car€to€Darryl€to€attend€schoolÐ ² Ðin€Maryland,€it€is€highly€foreseeable€that€Rich€could€be€sued€for€negligent€entrustment.Ð ˜è Ðà ` àà ¸ à(iii)€Relationship€between€claim€and€forum€state:€There€is€clearly€a€directÐ â2 Ðrelationship€between€the€negligent€entrustment€claim€resulting€from€the€accident€and€the€forumÐ È Ðstate.Ð ®þ Ðà ` àà ¸ à(iv)€Fairness€„€it€is€fair€that€Rich€be€sued€in€the€State€where€car€was€lent.€€Ð ø H Ðà ` àà ¸ à(v)€Convenience€„€it€is€highly€inconvenient€for€Rich€to€travel€from€MaineÐ B"’ Ðto€Maryland€to€defend€the€lawsuit.Ð (#x Ðà ` àà ¸ à(vi)€Interest€of€Interstate€Policies€„€it€is€in€Marylandððs€interest€to€have€thisÐ r$ Ðclaim€litigated,€there€was€no€harm€suffered€in€Maine.Ð X%¨  ÐRich€will€have€to€argue€that€it€is€inconvenient,€and€there€are€not€minimum€contact€inÐ ¢&ò!! Ðviolation€of€his€due€process€rights.€€However,€given€the€strength€of€the€other€factors€this€claimsÐ ˆ'Ø"" Ðwill€not€likely€be€successful.€€Court€will€not€grant€a€motion€to€dismiss€for€lack€of€personalÐ n(¾## Ðjurisdiction.€€€€€€Ð T)¤$$ ÐÐ ž*î%% ÐÐ è+8'& ÐÑ"OY Ñâ "âѰ°Ñâ "âÑ  Ñò òÓ  ÓQUESTION€4ó óÐ ° ÐÓpÓÓ dÓÓ XÓà  àÌà  àAcme€owned€a€large€parcel€of€land€fronting€on€East€Street€and€West€Street.€€In€1990,€heÐ à0 Ðfiled€a€subdivision€plat€among€the€county€land€records€which€divided€his€land€into€three€parcels,Ð Æ ÐLots€1,€2,€and€3.€€The€plat€showed€Lot€1€and€Lot€2€as€fronting€on€East€Street€and€separated€by€aÐ ¬ü Ðstreet€titled€ð ðAcme€Streetðð.€€Acme€Street€is€65€feet€wide€and€extends€the€length€of€each€lot.€€ItÐ ’ â Ðterminates€at€the€boundary€of€Lot€3,€which€fronts€on€West€Street€as€well.€€(See€diagram).€€AcmeÐ x È Ðconveyed€Lot€2€to€Mr.€and€Mrs.€Baker€as€tenants€by€the€entireties.€€The€deed€of€conveyanceÐ ^ ® Ðidentified€the€property€as€ð ðLot€2€as€shown€on€the€Acme€Subdivision€Plat.ðð€€Later,€AcmeÐ D ” Ðconveyed€Lot€3€to€Carr€and€this€deed€also€referred€to€the€subdivision€plat.€€Acme€retainedÐ * z  Ðownership€of€Lot€1.€€Ð `  ÐÓ dÓÓ XÓà ` àÌNeither€the€subdivision€plat€nor€either€of€the€deeds€contained€information€as€to€theÐ @  Ðownership€or€right€to€use€Acme€Street.€€Acme€Street€was€never€accepted€by€any€governmentalÐ &v  Ðauthority€but€is€used€by€all€three€lot€owners€for€access€to€East€Street.€€Lot€3€also€has€access€toÐ  \  ÐWest€Street.Ð òB ÐIn€1995,€Mr.€and€Mrs.€Baker€were€divorced.€€In€2003,€Mr.€Baker€died€and€his€will€left€allÐ <Œ Ðof€his€property€to€the€local€YMCA.€€Mrs.€Baker€is€still€alive€and€lives€on€the€property.Ð "r ÐThe€County€Roads€Commission€has€decided€to€widen€East€Street€by€75€feet€and€make€it€aÐ l¼ Ðdenied€access€highway,€thus€closing€off€the€existing€intersection€of€Acme€Street€and€East€Street.€Ð R¢ ÐIn€order€to€properly€compensate€affected€property€owners,€it€is€necessary€to€determine€theÐ 8ˆ Ðownership€interests€in€Lot€1,€Lot€2€and€Acme€Street€as€well€as€who€has€the€right€to€use€AcmeÐ n ÐStreet€for€access€to€East€Street.Ð T Ðà ` àÌà ` àò òA.€€Who€currently€owns€Lot€2?Ð ˜è Ðà ` àB.€€Who€currently€has€fee€simple€ownership€in€Acme€Street?Ð â2 Ðà ` àC.€€Who€currently€has€the€right€to€use€Acme€Street€for€access€to€East€Street?Ð ,| Ðà ` àExplain€your€answers€thoroughly.ó óÐ v Æ ÐÐ À! ÐÓ  Óò òREPRESENTATIVE€ANSWER€1ó óÐ  #Z ÐÓ‡ ](ÿÿ83†Óà @ä àÐ T$¤ ÐÓ XÓÒ°ÒÓ  Óà  à€a.€€Currently,€Lot€2€is€owned€by€Mrs.€Baker€and€YMCA€as€tenants€in€common.€Ð ž%î  ÐÓ XÓ€Lot€was€originally€owned€by€Mr.€and€Mrs.€Baker€as€Tenants€by€the€Entirety.€€However,Ð è&8"  Ðthis€Tenancy€by€the€Entireties€was€severed€when€the€Bakers€divorced€in€1995.€€At€that€point€Mr.Ð Î'#! Ðand€Mrs.€Baker€each€owned€a€ðð€interest€in€Lot€2€as€tenants€in€common.€€When€Mr.€Baker€died€heÐ ´($" Ðconveyed€his€interest€to€YMCA.€€As€such€the€YMCA€and€Mrs.€Baker€now€each€own€a€one„halfÐ š)ê$# Ðinterest€as€tenants€in€common.Ð €*Ð%$ Ѐb.€€Currently€fee€simple€ownership€in€Acme€Street€is€held€by€Acme€(ðð€interest€extendingÐ Ê+'% Ðto€the€center€of€Acme€Street),€Mrs.€Baker€(1/4€interest€extending€to€the€center€of€Acme€Street),€and€Ð ° ÐYMCA€(1/4€interest€extending€to€the€center€of€Acme€Street).€€The€facts€indicate€that€AcmeÐ úJ ÐStreet,€65€feet€wide€extends€the€length€of€each€lot.€€Impliedly,€therefore,€the€ownerððs€of€Lots€1€andÐ à0 Ð2's€boundaries€extend€to€the€center€of€Acme€Street.Ð Æ Ðc.€€€Since€the€County€Roads€Commission€has€decided€to€widen€East€Street€and€make€it€aÐ  ` Ðð ðdenied€accessðð€highway,€closing€off€the€Acme€Street€intersection,€it€is€doubtful€that€anyone€hasÐ ö F Ðthe€right€to€use€Acme€Street€for€access€to€East€Street€(at€least€not€by€car).€€However,€if€the€countyÐ Ü , Ðdecides€that€persons€may€still€access€East€Street€by€foot,€car,€Mrs.€Baker,€the€YMCA€as€well€asÐ   ÐAcme€all€have€the€right€to€use€Acme€Street€for€such€access.€€The€subdivision€plat€may€be€said€toÐ ¨ ø Ðhave€placed€such€a€covenant€or€equitable€servitude€on€Acme€Street€that€runs€with€the€land.€€Ð Ž Þ  ÐLot€3€would€have€a€right€by€implication€(i.e.€an€easement€by€implication)€to€use€AcmeÐ Ø(  ÐStreet€to€access€East€Street.Ð ¾  ÐLots€1€and€2€may€claim€access€via€their€ownership€interests€and€alternatively€the€equitableÐ X  Ðservitude€running€with€the€land.€Ð î>  ÐÓ  Óò òÐ 8ˆ ÐREPRESENTATIVE€ANSWER€2ó óÐ ‚Ò ÐÓ  ÓÓH.` °` ¸ hÀpÈ xÐ (#°°‹XÐ XHÓÐ Ì Ða.€€€A€Tenancy€by€the€Entirety€is€a€grant€of€land€to€a€married€couple€with€a€right€ofÐ f Ðsurvivorship.€€Here€Acme€conveyed€Lot€2€ð ðTo€Mr.€and€Mrs.€Bakerðð€as€tenants€by€the€Entirety,Ð üL Ðtherefore,€prior€to€1995€Lot€2€was€held€by€Mr.€and€Mrs.€Baker€as€Tenants€by€the€Entirety.€€AÐ â2 ÐTenancy€in€Common€has€not€right€of€survivorship€and€may€be€devised€by€Will.€€Here€when€Mr.Ð È ÐBaker€died€leaving€his€property€to€the€local€YMCA,€the€local€YMCA€became€a€Tenant€inÐ ®þ ÐCommon€with€Mrs.€Baker.Ð ”ä ÐLot€2€is€owned€by€Mrs.€Baker€and€YMCA€as€Tenants€in€Common.Ð Þ. ÐÒÏÒÓ PûXÓÓ3FØîûžˆX¶` °‹XÐ (#3Óà  àb.€€€Acme€filed€a€subdivision€plot€and€retained€Lot€1.€€Because€the€plat€not€the€deedsÐ (x Ðcontained€information€as€to€the€owner€and€no€government€authority€accepted€Acme€Street,€itÐ ^ Ðremains€with€Acme€in€fee€simple.à h àà À àà  àà p àà È àà‘  < àˆÐ ôD Ðà  àc.€€€An€easement€is€a€right€to€use€the€land€of€another€and€may€be€crossed€in€several€ways.€Ð >!Ž ÐAn€Easement€by€Implication€occurs€when€there€is€a€necessity€to€use,€a€common€Grantor,Ð $"t Ðcontinuous€use,€apparent€use,€and€prior€use€of€the€serviette€estate€by€the€dominant€estate.€€HereÐ  #Z Ðthere€is€a€necessity€to€use€Acme€Street€for€Lot€3,€not€Lot€2€to€access€East€Street,€and€there€was€noÐ ð#@ Ðprior€use€of€Acme€Street€by€Acme€before€forming€the€subdivision,€therefore€no€easement€byÐ Ö$&  Ðimplication€exists.Ð ¼% !  Ðà  àAn€Easement€by€Necessity€occurs€when€there€is€a€necessity€and€a€common€Grantor.€€Here,Ð 'V"! Ðthere€is€a€common€grantor,€Lot€3€may€use€West€Street€and€Lot€2€may€use€East€Street,€therefore,€it€isÐ ì'<#" Ðnot€strictly€necessary,€and€no€easement€exists.€Ð Ò("$# Ðà  àNo€easement€by€prescription€or€adverse€possession,€does€not€meet€statutory€period€of€20Ð *l%$ Ðyears.€Acme€was€right€to€use€Acme€Street.€€No€easement€exists€for€Lot€2€or€3.€€Ð +R&% ÐÐ L,œ'& ÐÓ  Óò òQUESTION€5ó óÐ ° ÐÓ  Óà  àÌà  àIn€the€late€1990ððs,€Mineral€X€was€discovered.€€It€is€a€mineral€that,€when€ingested,€causes€theÐ D” Ðaverage€adult€to€appear€younger€in€age.Ð *z Ðà  àA€few€companies€in€the€7€states€where€Mineral€X€was€plentiful€began€manufacturingÐ t Ä Ðprocessed€Mineral€X€and€began€making€it€available€to€consumers€via€direct€shipping€from€theÐ Z ª Ðmanufacturing€plant€via€phone€or€Internet€orders€placed€by€the€consumer.€€Processed€Mineral€XÐ @  Ðwas€approved€by€the€Federal€Drug€Administration€(FDA)€and€actually€produced€the€very€resultsÐ & v Ð(skin€that€looked€a€decade€younger)€that€it€purports€to€produce.€€Ð  \ ÐMineral€X€is€found€in€some€areas€of€the€State€of€Maryland,€most€notably€in€the€soil€around€theÐ V¦  ÐÔ_ÔPatuxentÔ_Ô€River.€€To€capitalize€on€this€growing€market,€John€and€Mary€formed€a€Mineral€XÐ <Œ  Ðprocessing€corporation€in€Maryland.€€They€purchased€a€tract€of€land€in€Maryland€Ô_ÔwhereÔ_Ô€Mineral€XÐ "r  Ðwas€found€to€be€plentiful,€established€a€processing€plant€and€a€distribution€company.€€UsingÐ X  Ðessentially€the€same€processing€formula€as€the€other€seven€(7)€companies€in€the€U.S.,€John€andÐ î>  ÐMary€packaged€and€sold€their€product€as€ð ðAmericaððs€Idol.ððÐ Ô$ Ðà  àJohn€and€Mary€persuaded€the€General€Assembly€of€Maryland€to€enact€a€law€prohibiting€theÐ n Ðimport€of€Mineral€X€into€the€State.€€The€purpose€of€the€law€was€to€encourage€Maryland€consumersÐ T Ðto€buy€Maryland€products.Ð ê: Ðà  àForty„nine€year€old€Narcissist,€resident€of€Gorgeous,€Maryland,€distraught€about€turning€50Ð 4„ Ðand€the€advent€of€wrinkles,€decided€to€order€some€Mineral€X€products€via€the€Internet.€€He€foundÐ j Ðð ðAmericaððs€Idolðð€on€line,€but€after€perusing€all€the€Mineral€X€Ô_ÔwebsitesÔ_Ô,€found€one€in€New€MexicoÐ P Ðwith€discounted€prices.€€Narcissist€placed€his€order€on€line€with€the€New€Mexico€company,€calledÐ æ6 ÐDessert€Flower,€only€to€be€told€that€Maryland€state€law€precluded€direct€shipment€of€out„of„stateÐ Ì ÐMineral€X.€€Ð ² ÐÌÑ  Ñò òNarcissist€and€Dessert€Flower€contact€you,€a€licensed€Maryland€attorney,€to€find€out€if€there€isÐ F– Ðany€way€to€challenge€the€State€law.€€What€would€you€advise?€€Discuss€fully.Ð ,| ÐÑ  ÑÌÑ  ÑÓ  ÓREPRESENTATIVE€ANSWER€1ó óÐ À! ÐÓ  ÓòòÌò òProfessional€Responsibilityó óóó€ð!ð€It€can€be€construed€as€a€conflict€of€interest€to€represent€more€thanÐ T$¤ Ðone€client€on€one€same€matter.€€I€would€have€to€meet€with€Narcissist€and€Desert€Flower€separatelyÐ :%Š  Ðto€discuss€their€personal€interests€and€would€obtain€informed€consent€confirmed€in€writing€toÐ  &p!  Ðcontinue€representing€both.Ð 'V"! ÐÑ  ÑÌÑ  Ñò òòòStandingó óóó€is€found€when€a€person€suffers€a€harm€that€is€fairly€traceable€to€government€action.€€Here,Ð š)ê$# ÐNarcissist€is€a€Maryland€resident€who€wants€to€purchase€the€banned€product,€he€has€standing.€Ð €*Ð%$ ÐDesert€Flower€is€a€corporation€wishing€to€do€business€in€Maryland€but€is€prohibited€and€hasÐ f+¶&% Ðstanding.Ð L,œ'& ЇThe€ò òòòCommerce€Clauseó óóó€applies€when€states€substantially€interfere€in€the€flow€of€interstateÐ ° Ðcommerce.€€The€Commerce€Clause€gives€Congress€sole€authority€to€regulate€interstate€commerce.€Ð –æ ÐHere,€Marylandððs€prohibition€of€Mineral€X€is€placing€a€substantial€burden€on€interstate€commerce.Ð |Ì ÐÑ  ÑBy€interfering€with€interstate€commerce,€the€State€of€Maryland€will€have€to€show€that€they€areÐ Æ Ðusing€the€prohibition€because€it€is€necessary€to€achieve€a€compelling€state€interest.Ð ¬ü ÐÑ  ÑHere,€ð ðJohn€and€Mary€persuaded€the€General€Assembly€of€Maryland€to€enactðð€the€law€to€encourageÐ ö F ÐMaryland€consumers€to€buy€Maryland€products.€€Though€the€purpose€is€legitimate,€this€is€notÐ Ü , Ðnecessary€to€achieve€that€purpose€and€is€not€the€least€restrictive€means€available.€€It€merely€createsÐ   Ða€monopoly€for€John€and€Mary€even€though€their€product€is€ð ðessentially€the€sameðð€as€those€offeredÐ ¨ ø Ðout€of€state.Ð Ž Þ  ÐAlso,€I€would€argue€that€this€statute€violates€the€òòEqualóó€òòProtectionóó€Clause€of€the€ConstitutionÐ Ø(  Ðincorporated€to€the€states€through€the€14òòthóó€amendment€by€treating€in€state€and€out€of€state€suppliersÐ ¾  Ðof€Mineral€X€differently.Ð ¤ô  ÐÑ  ÑThis€is€not€a€suspect€class€and€the€rational€basis€test€would€be€applied€with€the€burden€on€DesertÐ î>  ÐFlower€to€prove€the€law€is€not€rationally€related€to€a€legitimate€government€interest.Ð Ô$ ÐThe€challenge€based€on€the€Commerce€Clause€would€be€successful€but€the€Equal€ProtectionÐ n Ðchallenge€would€not.Ð T ÐÑ  ÑÓ  Óò òREPRESENTATIVE€ANSWER€2ó óÐ Nž ÐÓ  Óò òòòNarcissistó óóóÐ ˜è ÐÑ  ÑFirst,€Narcissist€would€have€to€satisfy€standing€requirements€and€show€that€he€has€suffered€anÐ â2 Ðinjury€and€therefore€has€a€concrete€personal€stake€in€the€outcome€of€the€suit€to€be€filed.€€NarcissistÐ È Ð(N)€would€easily€satisfy€the€standing€requirement€because€he€has€placed€an€order€on€line€withÐ ®þ ÐDesert€Flower€(DF),€the€New€Mexico€company,€and€has€been€told€he€cannot€get€his€order€becauseÐ ”ä Ðof€a€Maryland€(MD)€state€law€precluding€direct€shipment.Ð zÊ ÐThe€Commerce€Clause€under€Article€I€precludes€any€state€from€imposing€laws€that€pose€an€undueÐ Ä Ðburden€on€interstate€commerce€or€enacting€laws€that€will€prevent€the€free€flow€of€commerce.€€TheÐ ªú ÐMaryland€law€as€it€stands€is€preventing€other€states€(7€other€OS€companies)€from€selling€theirÐ à ÐMineral€X€wares€in€Maryland.€€This€surely€is€creating€an€undue€burden€on€commerce.€€MarylandÐ v Æ Ðmust€show€that€the€law€enacted€was€necessary€to€satisfy€an€important€interest.€€The€law€will€not€beÐ \!¬ Ðsuccessful€because€the€purpose€was€to€encourage€Marylandððs€locals€to€buy€local€products.€Ð B"’ ÐMaryland€cannot€do€this€unless€it€is€a€market€participant.€€Apart€from€N€challenging€the€law€underÐ (#x Ðthe€commerce€clause,€N€could€argue€that€his€substantive€Due€Process€rights€have€been€violated.€€NÐ $^ Ðcould€argue€that€his€right€to€self„fulfillment€and€determination€has€been€denied.€€This€however€isÐ ô$D  Ðnot€necessarily€a€fundamental€right€and€therefore,€N€stands€a€greater€chance€of€winning€against€theÐ Ú%*!! ÐState€by€arguing€that€Maryland€is€violating€the€negative€implications€of€the€Commerce€Clause.Ð À&"" ÐÑ  Ñò òòòDesert€Flower€(DF)ó óóóÐ  (Z## ÐÑ  ÑDF€can€also€satisfy€standing€by€showing€it€has€suffered€an€injury€and€has€a€concrete€personal€stakeÐ T)¤$$ Ðin€its€outcome€because€N,€a€potential€customer,€has€placed€an€order€which€cannot€be€fulfilled€due€toÐ :*Š%% Ðthe€Maryland€law.€€Ð  +p&& Ðà  àDF€can€challenge€the€Maryland€law€under€the€Commerce€Clause€because€it€places€an€undueÐ ° Ðburden€on€interstate€commerce€and€for€the€same€reasons€already€state€above.Ð –æ Ðà  àDF€can€also€argue€under€the€Equal€Protection€Clause€that€they€as€a€class€of€Mineral€XÐ à0 Ðproducers€have€suffered€discrimination€and€that€their€Mineral€X€counterparts€in€Maryland€areÐ Æ Ðgetting€better€treatment.€€DF€will€have€to€show€that€the€law€Maryland€enacted€was€not€rationallyÐ ¬ü Ðrelated€to€a€legitimate€purpose.€€DF€can€easily€show€that€because€the€means€Maryland€chose€wereÐ ’ â Ðtoo€restrictive.€€Maryland€could€have€chosen€to€tax€out„of„state€Mineral€X€products€higher€butÐ x È Ðinstead€it€chose€to€prohibit€all€imports.€€DF€will€win€on€this€equal€protection€claim.Ð ^ ® Ðà  àLastly,€DF€could€argue€that€its€right€to€earn€income€in€Maryland€has€also€been€abridged.€Ð ¨ ø ÐCourts€see€this€substantive€due€process€right€to€be€a€low€level€one€so€it€will€get€a€low€scrutiny.€€DFÐ Ž Þ  Ðmust€show€the€law€was€not€rationally€related€to€a€legitimate€purpose€and€this€can€be€shown€easily€asÐ tÄ  Ðalready€explained€above.Ð Zª  ÐÑ  ÑÌÌÌÌÓ >þÓÓ  ÓÔ€iX÷üXXXü¯Ôò òÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÐ -,}'! ЇQUESTION€6Ð ° ÐÓ  Óó óÌÔ€$Xü¯XXiX÷üÔà  àAttorney€Agnes€was€admitted€to€practice€law€in€the€State€of€Maryland€in€December€2004.€Ð R¢ ÐImmediately,€she€established€a€solo€practice€in€Baltimore,€Maryland.€€She€advertised€in€the€local€paper€asÐ 8ˆ Ðð ðThe€Accident€Specialistðð,€since€she€was€told€that€automobile€accident€cases€are€the€bread€and€butter€of€aÐ  n Ðsolo€practice.€€Agnes€received€so€many€cases€during€her€first€year€that€she€raised€her€hourly€fee€fromÐ  T Ð$100€to€$500,€and€hired€an€experienced€Paralegal€to€handle€office€matters.€€Agnes€delegated€to€ParalegalÐ ê : Ðall€authority€to€handle€accident€settlements€ð!ð€i.e.,€to€meet€with€clients,€review€the€settlement€sheets€andÐ Ð  Ðdisburse€the€funds.€€Paralegal€was€also€authorized€to€write€checks€on€Agnesðð€operating€checking€accountÐ ¶  Ðsince€Agnes€anticipated€being€too€busy€litigating€cases.Ð œ ì  ÐÑ  Ñà  àAgnes€was€inundated€with€work.€€Agnes€delegated€all€client€communications€to€Paralegal€sinceÐ æ6  ÐAgnes€said€that€she€was€too€busy€to€hold€a€clientððs€hand.€€Paralegal€quickly€became€overwhelmed€withÐ Ì  Ðthe€amount€of€work.€€Unbeknownst€to€Agnes,€Paralegal€stopped€reconciling€the€operating€checkingÐ ²  Ðaccount€and€began€overdrawing€on€the€account.Ð ˜è  Ðà  àOn€June€3,€2006,€Chuck€Client€saw€Agnesðð€ad,€went€to€her€office,€and€asked€that€Agnes€representÐ â2 Ðhim€in€a€personal€injury€auto€accident€case€that€had€occurred€in€the€Fall€of€2003.€€Agnes€explained€herÐ È Ðcontingent€fee€arrangement:€€33%€of€the€amount€recovered€if€the€matter€is€settled€out€of€court,€or€40%€ofÐ ®þ Ðamount€recovered€if€trial€and/or€appeal€become€necessary.€€Agnes€then€verbally€agreed€to€becomeÐ ”ä ÐChuckððs€attorney.€€Chuck€paid€a€retainer€of€$5,000,€which€was€to€be€used€to€cover€expected€pretrial€costsÐ zÊ ÐParalegal€placed€the€$5,000€in€the€operating€checking€account.€€On€July€15,€Chuck€inquired€about€theÐ `° Ðstatus€of€the€case€and€Agnes€stated€that€she€would€get€back€to€him,€but€it€appeared€that€she€might€have€toÐ F– Ðfile€suit€on€Chuckððs€behalf.€€Chuck€Client€called€several€times€after€that,€but€Agnes€directed€Paralegal€toÐ ,| Ðanswer€all€of€his€calls.€€On€August€3,€2005,€Chuck€cornered€Agnes€at€her€office€and€requested€that€sheÐ b Ðreturn€his€money€since€he€no€longer€wanted€Agnes€to€be€his€attorney.€€Agnes€begged€him€to€give€herÐ øH Ðsome€time€to€come€up€with€a€portion€of€the€retainer,€stating€that€Paralegal€had€quit€and€the€office€booksÐ Þ. Ðwere€in€a€shambles.€€Ð Ä Ðà  àChuck€Client€contacted€Bar€Counsel€on€September€15,€2005,€because€Agnes€failed€to€honor€hisÐ ^ Ðrequest€and€asked€if€there€was€anything€to€be€done.Ð ôD ÐÌÑ  Ñò òA.à  àWhat€disciplinary€actions,€if€any,€might€be€filed€based€on€the€above€facts?€€Discuss€fully.Ð ˆ!Ø ÐÑ  ÑÌÑ  Ñó ó€€à  àAt€the€disciplinary€hearing,€Agnes€testified€that€she€relied€on€Paralegal€to€open€all€necessaryÐ $l Ðaccounts€and€Agnes€believed€that€Paralegal€had€done€so.€€Bar€Counsel€then€sought€to€introduce€theÐ %R  Ðfollowing€evidence:Ð è%8!! ÐÑ  Ñà  à1.à ` àA€statement€from€Agnesðð€estranged€husband€that€she€told€him€she€ð ðdid€not€see€the€need€toÐ 2'‚"" Ðopen€any€additional€bank€accounts€for€her€practice€since€it€was€too€costlyðð;Ð (h## Ðà  à2.à ` àA€statement€from€Agnesðð€law€professor€that€ð ðin€his€opinion,€Agnes€liked€to€puff€herself€upÐ b)²$$ Ðand€take€on€more€than€she€could€handleðð;Ð H*˜%% Ðà  à3.à ` àA€copy€of€a€court€record€showing€Agnes€was€convicted€of€misdemeanor€theft€in€1990.Ð ’+â&& ЇÑ  Ñò òB.à  àHow€should€the€Court€rule€on€timely€objections€to€the€above,€and€why?ó óÐ ° ÐÌà@‘‘"=àò òREPRESENTATIVE€ANSWER€1òòˆÐ D” ÐóóPart€Aó óÐ ŽÞ ÐÓ ÈdÓThe€Maryland€Rules€of€Professional€Conduct€govern.Ð Ø ( Ðò òAdvertisingó 󀄀An€attorney€may€not€advertise€specialties€(unless€patent)€and€cannot€make€allegations€ofÐ † Ö Ðsuccess€rates€or€expectancies€without€backing€up€with€facts.€Agnes'€(A)€ad€in€local€paper€advertised€Ô_Ôð" ðTheÔ_ÔÐ l ¼ ÐAccident€Ô_ÔSpecialist.ð" ðÔ_Ô€€Not€only€is€she€claiming€a€specialty€but€she€has€no€facts€to€back€it€up€because€sheÐ R ¢ Ðis€newly€admitted€and€was€told€that€those€cases€are€the€bread€and€butter€of€solo€practice.Ð 8ˆ  Ðò òFeesó 󀄀Attorney's€fees€must€be€reasonable€and€must€be€fully€expressed€to€clients.€$100€is€reasonable€butÐ n  Ðher€raise€to€$500€per€hour€in€her€first€year€is€not.Ð T  ÐÐ Ðò òContingency€Feesó 󀄀Fees€based€on€outcome€of€case€have€to€be€in€writing€and€lay€out€amount,€payment€ofÐ Ð  Ðcourt€costs€and€fees,€and€when€payment€is€to€happen,€and€must€be€reasonable.€€Chuck€hired€A,€whoÐ ¶  Ðexplained€her€contingent€fee€of€33%€or€40%€and€verbally€agreed.€This€must€be€in€writing.€The€$5,000Ð œì Ðretainer€might€be€reasonable€but€must€be€kept€in€a€separate€account€and€any€extra€must€be€returned€toÐ ‚Ò ÐChuck.€The€retainer€was€put€in€the€operating€account€and€could€not€be€returned.Ð h¸ ÐÐ Ðò òDuties€to€Clientó 󀄀An€attorney€owes€duties€of€confidentiality,€competence,€loyalty€and€diligence.€€HereÐ 4„ Ðan€incompetent€new€attorney€hired€a€paralegal€to€do€all€work,€and€took€too€many€cases.€Non€licensedÐ j Ðpeople€cannot€carry€out€the€attorney's€duties.€Paralegal€met€with€clients,€handled€settlements€and€theÐ P Ðchecking.€€There€is€a€duty€of€obedience€„€certain€things€the€client€has€the€right€to€decide,€such€as€bringingÐ æ6 Ðsuit.€€A€intended€to€do€things€without€input€from€Chuck.€There€is€a€duty€of€communication.€Paralegal€hadÐ Ì Ðto€answer€clientsðð€questions€and€A€would€not€return€calls.€Agnes€should€have€given€clients€information€toÐ ² Ðmake€informed€decisions.€A€also€did€not€follow€through€and€get€back€to€Chuck€in€a€reasonable€time,€soÐ ˜è Ðshe€was€not€diligent.Ð ~Î ÐÐ Ðò òPart€Bó óÐ Jš ÐÐ Ðò òMarital€Communicationsó 󀄀Either€spouse€can€raise€the€privilege€if€married€at€the€time€ofÐ !f Ðcommunication€and€it€was€within€the€scope€of€the€marriage.€If€they€were€married€at€time€A€madeÐ ü!L Ðstatement€it€will€not€be€allowed€in€because€of€privilege.€€It€does€not€matter€that€they€are€estranged€now.Ð â"2 ÐÐ Ðò òOpinionó 󀄀Lay€opinions€are€admissible€if€relevant€and€not€of€specific€or€scientific€value.€CharacterÐ ®$þ! Ðevidence€is€not€admissible€to€show€propensity€to€commit€act€on€trial€for.€€It€is€inadmissible€to€impeach€byÐ ”%ä " Ðopinion€or€reputation€in€the€community.€If€professor€indicates€through€foundation€that€he€has€relevantÐ z&Ê!# Ðopinion€he€can€testify.Ð `'°"$ ÐÐ Ðâ âò òÐ ,)|$& ÐPast€Crimeó 󀄀If€A€testifies,€she€can€be€impeached€by€prior€conviction€of€a€crime€of€moral€turpitude€(suchÐ ° Ðas€truthfulness)€or€an€enumerated€felony.€Theft€is€a€crime€of€truthfulness€but€it€is€more€than€15€years€oldÐ –æ Ðso€it€will€not€be€allowed.ò òÐ |Ì Ðâ âà@‘‘"=àREPRESENTATIVE€ANSWER€2ˆÐ *z ÐPart€Ô_ÔAÔ_ÔÐ Ø ( Ðà  àó óAdvertisements€as€a€specialist€are€prohibited€unless€it€is€a€patent€attorney.€Here,€Agnes€advertisedÐ † Ö Ðas€an€Ô_Ôð" ðaccidentÔ_Ô€Ô_Ôspecialistð" ðÔ_Ô.Ð l ¼ Ðà  àReasonable€fees€must€be€charged€based€on€a€lawyer's€experience,€a€case's€complexity,€the€need€toÐ j  Ðsolely€focus€on€one€case.€Here€the€rate€is€not€reasonable€after€only€one€year€in€practice€to€raise€it€fromÐ P  Ð$100€to€$500€and€no€facts€to€justify€that€increase.€€Non„lawyer€employee€cannot€be€delegated€work€that€isÐ æ6  Ðlegal€work.€Here,€Agnes€delegated€to€Paralegal€settlement€matters.€€Paralegal€can€meet€clients€andÐ Ì  Ðdisburse€funds.€There€is€a€duty€to€communicate.€The€lawyer€can€delegate€some€communication€to€a€nonÐ ²  Ðlawyer€but€not€all€communications,€as€she€did.Ð ˜è  ÐÐ Ѐ€€€€€€à  àThere€is€a€duty€to€manage€clients'€funds.€€All€client€funds€must€be€managed€separate€from€theÐ d´ Ðattorney's€operating€funds€and€diligently€managed.€Here€Agnes'€funds€were€not€reconciled€and€wereÐ Jš Ðoverdrawn.€Ð 0€ ÐÓT1°°` ¸ hÀpÈ xÐ (#€%FØîûžˆX¶TÓà  àContingent€fees€must€be€clearly€communicated€and€reasonable.€Here,€Agnes'€percentages€are€notÐ Þ. Ðreasonable€or€clearly€stated.€Ð Ä Ðà  àClient€can€always€terminate€representation€at€any€time€and€are€to€receive€the€remainder€of€theirÐ r Ðretainer€after€expenses€are€withdrawn.€That€didn't€happen.Ð X¨ ÐÐ Ðò òPart€Bó óÐ $t ÐÐ Ѐ€€€à  àHusband's€statement€is€privileged€under€marital€communications€during€the€marriage€even€thoughÐ ð@ Ðthey€are€now€estranged.€Overruled.€It€is€hearsay€as€well.Ð Ö& ÐÐ Ѐ€€€à  àOpinion€evidence€is€admissible€as€character€evidence€as€long€as€it€is€relevant.€Here€Professor'sÐ ¢!ò Ðstatement€on€his€opinion€of€Agnes€is€admissible€and€relevant€as€to€her€character€which€is€under€review.€Sustained.Ð ˆ"Ø ÐÐ Ѐ€€à  àPrior€conviction€can€be€admitted€as€character€evidence€if€it€is€used€within€15€years€of€convictionÐ T$¤ Ðto€show€an€element€of€the€current€charges.€Here,€A's€theft€conviction€occurred€16€years€ago.€Overruled.Ð :%Š  ÐÓ ÈÓÓ >þÓÌÑ  ÑÔ€Xü¯XX$Xü¯ÔÌÌÌÌÌÐ L,œ'& ЇÌÌÌÌÌò òÓ  ÓQUESTION€7Ð . ~ ÐÓ[ÛÓÓ £PûÓÓ  Óà ` àà ¸ àà  àà h àà À àà  àÌó óCaleb€is€Rufusðð€older€brother.€Rufus€always€looked€to€him€for€advice€and€help.€Caleb€wantedÐ ú J Ðto€sell€his€farm€equipment€sales€and€lease€business€which€he€operated€in€Westminster,€Carroll€County,Ð à 0 ÐMaryland.€€Rufus€wanted€to€buy€that€business.€€€Rufus€told€Caleb€that€he€intended€to€operate€it€exactlyÐ Æ   Ðas€it€was€in€place€except€for€the€change€in€ownership.€In€response€to€Rufusðð€€request€for€all€auditedÐ ¬ ü  Ðfinancial€statements€from€2001€of€the€business€and€specifically€all€€information€on€the€profitability€ofÐ ’â  Ðthe€business,€€€Caleb€€produced€€a€computer€printout€stating€a€modest€profit€of€the€business€for€2001,Ð xÈ  Ð2002,€and€2003.€€Caleb€€gave€verbal€assurances€to€Rufus€that€the€computer€printout€accurately€reflectedÐ ^®  Ðthe€financial€status€of€the€business.€€Caleb€told€Rufus€that€there€were€no€audited€financial€statements.€Ð D”  ЀIn€reliance€on€the€computer€printout€and€the€verbal€assurances€of€Caleb,€Rufus€purchased€the€businessÐ *z  Ðon€January€1,€2005.Ð ` ÐÓ X£ÓÐ öF ÐThe€computer€printout€produced€by€Caleb€did€not€include€adjustments€for€employee€bonusesÐ Ü, Ðand€taxes€which€the€business€had€paid€in€2001,€2002,€and€2003.€€Rufus€€was€not€informed€of€theseÐ Â Ðomissions.€€The€inclusion€of€these€adjustments€put€the€business€in€a€deficit€position€for€these€years€asÐ ¨ø ÐRufus€found€out€after€the€first€year€of€operation€of€the€business.€€Rufus€€had€a€loss€of€$85,000€in€theÐ ŽÞ Ðbusiness€operation€in€calendar€year€2005.Ð tÄ ÐÐ Zª ÐRufus€€has€asked€you€as€his€attorney€whether€there€is€anything€he€can€do€about€it.€€€Rufus€alsoÐ @ Ðstated€to€you€that€he€has€second€thoughts€about€owning€the€business.€€Ð &v ÐÓ XÓÓ  ÓÌÓ XÓÓ  Óò òBased€on€the€given€facts,€give€an€analysis€of€cause(s)€of€action,€if€any,€and€possibleÐ òB Ðdefenses,€and€possible€relief€Rufus€may€have€against€Caleb.€€Explain€your€response€in€detail.Ð Ø( ÐÓ XÓÓ  ÓÌREPRESENTATIVE€ANSWER€1òòÐ ¤ô ÐÓ  ÓCauses€of€Actionó óÐ Š Ú ÐÌÓ  Óóóà  à1.à ` àò òòòFraudulent€Misrepresentationó óóó.€€Fraudulent€misrepresentation€occurs€when€a€personÐ V"¦! Ðmisstates€a€material€fact€with€the€intent€to€defraud€another.€€The€other€person€relies€on€theÐ <#Œ" Ðrepresentation€(reasonably)€and€is€damaged.Ð "$r# ÐÌà  àà ` àIn€this€case,€Caleb€did€not€include€adjustment€to€the€companyððs€financial€printouts€andÐ î%>!% Ðmade€verbal€assurances€that€the€printout€accurately€reflected€the€financial€status€of€the€business.€CalebÐ Ô&$"& Ðmay€claim€that€he€had€no€intent€to€defraud€and€was€unaware€that€these€things€were€left€out.€However,Ð º' #' Ðthe€statements€indicated€that€the€company€realized€a€modest€profit€in€2001,€2002€and€2003.€Yet,€theÐ  (ð#( Ðcompany€was€actually€in€a€deficit.€As€the€owner€of€the€business€Caleb€would/should€know€that€theÐ †)Ö$) Ðcompany€did€not€make€a€profit€as€stated€in€the€financials.Ð l*¼%* ÐÌà  àà ` àCalebððs€knowledge€may€provide€enough€for€a€jury€to€infer€that€he€knew€the€printoutsÐ 8,ˆ', Ðwere€inaccurate€and€that€he€acted€with€the€intent€to€defraud€Rufus.Ð ° ÐÌà  à2.à ` àò òòòNegligent€Misrepresentationó óóó.€€Negligence€requires€the€Plaintiff€to€show€a€duty,€breachÐ |Ì Ðof€that€duty,€causation€and€damages.Ð b² ÐÌà  àà ` àò òòòDutyóó:ó óà ¸ àRufus€may€argue€that€Caleb€owes€a€duty€to€any€potential€purchaser€of€theÐ . ~ Ðbusiness€to€know€the€financial€status€of€the€company€and€reveal€the€inaccuracies€of€the€printout.€RufusÐ  d Ðmay€also€argue€that€Caleb€owes€a€special€duty€to€him€because€they€have€a€special€relationship.€ToÐ ú J Ðprove€a€special€relationship,€the€fact€that€the€parties€are€related€is€not€enough,€on€its€own.€However,€aÐ à 0 Ðspecial€relationship€of€trust€may€exist€where,€as€here,€one€party€is€dependent€on€the€other€for€advice€orÐ Æ   Ðassistance€and€the€party€depended€on€ò òòòknowsó óóó€that€the€other€party€will€rely€on€his€advice.€TheÐ ¬ ü  Ðrelationship€in€this€case€is€not€likely€to€equal€the€status€of€a€ò òòòfiduciaryó óóó€type€of€relationship€becauseÐ ’â  ÐRufus€is€clearly€capable€of€asking€questions€and€making€decisions.€However,€it€is€a€relationship€thatÐ xÈ  Ðmay€cause€the€court€to€apply€a€higher€duty€on€Caleb€than€if€he€sold€the€business€to€a€stranger.€Ð ^®  ÐÌÑ  Ñà  à3.à ` àò òòòDefensesóó.Ð *z  ÐÌÑ  Ñà  àà ` àòòLack€of€intentó óóó:€€As€to€the€first€claim,€the€only€defense€that€Caleb€may€successfully€putÐ öF Ðforth€is€that€he€lacked€the€required€intent€to€defraud.Ð Ü, ÐÌÑ  Ñà  à4.à ` àò òòòAssumption€of€the€Riskó óóó:€€Caleb€may€argue€that€Rufus€assumed€the€risk€that€theÐ ¨ø Ðdocuments€were€inaccurate€or€didnððt€include€everything.€To€show€assumption€of€the€risk,€Caleb€mustÐ ŽÞ Ðshow€that€Rufus€knew€of€the€risk€of€depending€on€the€printouts€and€he€voluntarily€assumed€that€risk.Ð tÄ ÐThere€is€no€evidence€here€that€Rufus€was€aware€the€financial€printouts€were€inaccurate€or€incomplete.Ð Zª ÐThere€is€also€no€evidence€that€he€had€any€reason€to€believe€Caleb€would€act€negligently€(orÐ @ Ðintentionally)€in€misstating€the€accuracy€of€the€reports.Ð &v ÐÑ  ÑÌà  à5.à ` àò òòòContributory€Negligenceó óóó:€€Contributory€negligence€exists€where€the€Plaintiff€isÐ òB Ðnegligent€in€some€way€and€contributes€to€his€own€loss.€It€is€a€complete€bar€to€recovery€in€Maryland.Ð Ø( ÐIn€this€case,€Caleb€may€argue€that€Rufus€was€negligent€for€failing€to€insist€on€inspecting€the€books€orÐ ¾ Ðobtaining€audited€financial€statements.€€Given€the€relationship€of€the€parties,€the€fact€that€CalebÐ ¤ô Ðprovided€financial€information€for€several€years€of€the€business,€and€Rufusðð€reasonable€reliance€onÐ Š Ú ÐCalebððs€assurances,€this€defense€is€unlikely€to€succeed.Ð p!À  ÐÑ  ÑÌà  à6.à ` àò òòòReliefó óóó:€€Rufus€can€sue€for€damages€of€$85,000.€€Rufus€can€sue€for€aò ò€òòrescission€ó óóóof€theÐ <#Œ" Ðcontract€if€he€can€show€that€he€made€a€ò òòòunilateral€mistakeó óóó,€Caleb€was€ò òòòawareó óóó€of€this€mistake€and€RufusÐ "$r# Ðò òòòreliedó óóó€on€this€mistaken€belief€when€he€entered€the€contract.Ð %X $ ÐÓ  Óò òÌREPRESENTATIVE€ANSWER€2òòÐ Ô&$"& ÐÑ  ÑÓ  Óóóà  àÌà  àó óRufus€has€a€possible€action€against€Caleb€for€misrepresentation.€An€intentionalÐ  (ð#( Ðmisrepresentation€will€be€found€where€there€is€an€intentional€false€statement€of€material€fact€or€materialÐ †)Ö$) Ðomission€and€the€other€party€relies€on€this€misrepresentation,€resulting€in€injury.€Calebððs€failure€toÐ l*¼%* Ðinclude€adjustments€for€employee€bonuses€and€taxes€in€the€computer€printout€he€gave€Rufus€was€anÐ R+¢&+ Ðomission€of€material€information.€Information€is€material€if€it€would€likely€be€used€by€a€reasonableÐ 8,ˆ', Ðperson€in€making€a€decision.€Here,€Rufus€wanted€the€printouts€to€determine€the€profitability€of€theÐ ° Ðbusiness;€therefore,€they€were€material.€To€claimò ò€òòintentionalóó€ó ómisrepresentation,€Rufus€must€showÐ –æ Ðintent€on€the€part€of€Caleb.€It€may€be€difficult€for€Rufus€to€show€intent.€Rufus€would€argue€that€thereÐ |Ì Ðis€circumstantial€evidence€of€intent€because€he€made€it€clear€to€Caleb€that€he€wanted€ð ðò òòòalló óóóðð€informationÐ b² Ðon€the€profitability€of€the€business.€If€Rufus€is€unable€to€prove€intent,€then€he€may€have€to€rely€on€aÐ H˜ Ðnegligent€misrepresentation€theory.€In€this€case,€Rufus€will€argue€that€Caleb€owed€him€a€duty€toÐ . ~ Ðprovide€ò òòòalló óóó€the€information€he€had.Ð  d ÐÌà  àFrom€where€might€such€a€duty€arise?€Rufus€could€claim€such€a€duty€arises€because€(1)€thereÐ à 0 Ðis€a€confidential€relationship€between€the€two€brothers€since€Rufus€has€always€ð ðlooked€to€[Caleb]€forÐ Æ   Ðadvice€and€helpðð€or€(ii)€that€the€duty€arises€because€he€asked€for€òòallóó€relevant€information€and€CalebÐ ¬ ü  Ðgave€him€verbal€assurances€that€the€printout€accurately€reflected€the€financial€status.€The€latterÐ ’â  Ðargument€is€much€stronger€than€the€former.Ð xÈ  ÐÌÑ  Ñà  àWhether€his€cause€of€action€rests€on€intentional€or€negligent€misrepresentation,€Rufus€must€alsoÐ D”  Ðshow€causation€and€injury.€Rufus€has€suffered€an€injury€ð!ð€the€loss€of€$85,000€in€business€operation€inÐ *z  Ð2005€ð!ð€but€is€this€attributable€to€Caleb?€Rufus€will€argue€that€but€for€the€omission€of€material€info,€heÐ ` Ðwould€not€have€purchased€the€business,€and€therefore€would€not€have€had€any€loss.€Even€if€theÐ öF Ðmisrepresentation€is€an€actual€cause,€is€it€a€proximate€cause€of€Rufusðð€economic€injuries?€Rufus€willÐ Ü, Ðlikely€argue€that€it€was€reasonably€foreseeable€that€without€the€bonus€and€tax€info.,€a€purchaser€wouldÐ Â Ðhave€believed€he€could€ò òòòcontinueó óóó€to€operate€the€business€profitability.€In€fact,€Rufus€specifically€toldÐ ¨ø ÐCaleb€that€he€intended€to€operate€the€business€exactly€as€it€was.€It€was€foreseeable,€therefore,€that€RufusÐ ŽÞ Ðwould,€in€fact,€lose€money€once€employee€bonuses€and€taxes€were€transferred€in.Ð tÄ ÐÌà  àCaleb€may€argue€that€the€verbal€assurances€he€gave€should€not€be€allowed€in€if€the€purchaseÐ @ Ðagreement€was€in€writing.€He€could€argue€that€the€purchase€agreement€amounts€to€a€completeÐ &v Ðintegration.€Caleb€will€not€be€successful,€however,€as€evidence€of€fraud€is€always€allowed€to€beÐ  \ Ðintroduced€and€is€not€barred€by€the€parol€evidence€rule.Ð òB ÐÌà  àWith€respect€to€possible€outcomes,€given€the€misrepresentation,€it€is€appropriate€for€the€courtÐ ¾ Ðto€order€rescission€of€the€contract€and€to€award€damages€to€Rufus€equal€to€the€amount€of€the€$85,000Ð ¤ô Ðloss€which€is€attributable€to€employee€compensation€bonuses€and€taxes.Ð Š Ú ÐÌÌÌÌÌÐ ÐÌò òÐ  º' #' ÐÓ  ÓQUESTION€8ó óÐ ° ÐÓkÓÝ‚!ÿÿÿÝÔ€Xü¯XXXü¯Ôò òÓ  ÓÝ  ÝÑ  ÑÝ‚!ÿÿÿ©ÝÝ  Ý݃!ÿÿ©þ݌̌Ó  Óó óÔ€Xü¯XXXü¯ÔÝ  ÝÝ‚!ÿÿÿÝÔ€Xü¯XXXü¯Ôò òÓ  ÓÝ  ÝÓ  ÓÝ‚!ÿÿÿpÝÝ  Ýó óà  àAce€&€Bertha€were€lawfully€married€in€Cumberland,€Maryland€in€1975.€Two€(2)€children€wereÐ |Ì Ðborn€of€their€marriage,€Larry,€DOB€2/2/85,€a€housebound€disabled€child€and€Moe,€DOB€4/4/87.€AceÐ b² Ðleft€Bertha€in€January,€1992€and€begin€living€openly€with€Doris.€Bertha€sued€Ace€for€an€absoluteÐ H˜ Ðdivorce€in€the€Circuit€Court€for€Ô_ÔAlleganyÔ_Ô€County€where€Ace€and€Bertha€both€lived,€€seeking€also€childÐ . ~ Ðcustody,€child€support€and€alimony.€After€a€contested€hearing€the€Circuit€Court€Judge€entered€on€6/1/92Ð  d Ða€Judgment€of€Absolute€Divorce€in€favor€of€Bertha€which€provided€ò òòòinter€alia:óó݃!ÿÿpÅ݌Рú J ÐŒÓ  Óó óÔ€Xü¯XXXü¯ÔÝ  ÝÓ  Óà  àÌà  à(a)€That€Bertha€would€have€custody€of€the€two€(2)€children€and€Ace€would€pay€childÐ Æ   Ðsupport€to€Bertha€of€$50.00€per€week€per€child€dating€from€6/1/92€until€further€order€of€Court.Ð ¬ ü  ÐÓ  Óà  àÌà  à(b)€That€Ace€would€pay€alimony€to€Bertha€of€$100.00€per€week€for€two€(2)€years€dating€fromÐ xÈ  Ð6/1/92.Ð ^®  ÐÝ‚!ÿÿÿÝÔ€Xü¯XXXü¯Ôò òÓ  ÓÝ  ÝÓ  ÓÝ‚!ÿÿÿÌ ÝÝ  Ýó óà  àAce€promptly€moved€to€Georgia€with€Doris.€€He€had€no€contact€with€Bertha€or€the€children.€HeÐ D”  Ðnever€visited€or€paid€any€child€or€Ô_ÔspousalÔ_Ô€support.ò ò€€ó óBecause€of€his€fatherððs€recent€death,€Ace€returnedÐ *z  Ðon€February€1,€2006€to€Cumberland,€Maryland€where€Bertha€continued€to€reside€with€Larry€and€MoeÐ ` Ðand€her€significant€other.€€The€child€Moe€is€in€the€11òòthóó€grade€and€Larryððs€situation€is€unchanged.€€BerthaÐ öF Ðlearned€that€Ace€had€returned€to€the€area€and€has€come€to€see€you,€a€practicing€Maryland€attorney,€toÐ Ü, Ðmake€a€claim€for€alimony€and€child€support€from€Ace,€who€stands€to€inherit€substantial€property€fromÐ Â Ðhis€late€father.€She€would€also€like€him€to€pay€your€attorney€fees.ò ò݃!ÿÿÌ !݌Р¨ø ÐŒÓ  Óó óÔ€Xü¯XXXü¯ÔÝ  ÝÝ‚!ÿÿÿÝÔ€Xü¯XXXü¯Ôò òÓ  ÓÝ  ÝÓ  ÓÝ‚!ÿÿÿÝÝ  Ýó óà  àò ò݃!ÿÿV݌̌Ó  Óó óÔ€Xü¯XXXü¯ÔÝ  ÝÝ‚!ÿÿÿÝÔ€Xü¯XXXü¯Ôò òÓ  ÓÝ  ÝÓ  ÓÝ‚!ÿÿÿÚÝÝ  Ýó óà  àò òAnalyze€and€discuss€the€merits€of€Berthaððs€claims€and€Aceððs€possible€defenses.€Ýƒ!ÿÿÚ/݌РtÄ ÐŒÓ  Óó óÔ€Xü¯XXXü¯ÔÝ  ÝÌÓ  Óò òREPRESENTATIVE€ANSWER€1òòÐ @ ÐÓ  Óó óóóà  àÌà  àò òòòChild€Supportó óóó€is€calculated€in€Maryland€by€taking€into€account€the€income€of€each€party€butÐ  \ Ðdoes€consider€the€best€interest€of€the€child.€In€Maryland,€a€parent€is€required€to€pay€child€support€untilÐ òB Ðthe€child€is€18€or€if€still€in€high€school,€either€to€age€19€or€when€the€child€graduates,€whichever€isÐ Ø( Ðsooner.Ð ¾ ÐÌà  àChild€support€can€be€extended€for€an€adult€child€under€certain€circumstance€such€as€mentalÐ Š Ú Ðretardation.Ð p!À  ÐÌà  àHere,€Larry€is€21€but€he€is€a€house„bound€disabled€child.€The€court€can€force€Ace€to€continueÐ <#Œ" Ðmaking€child€support€payments€indefinitely.Ð "$r# ÐÌÑ  Ñà  àMoe€is€in€11òòthóó€grade€but€he€is€close€to€turning€19.€Ace€will€have€to€continue€to€pay€until€MoeððsÐ î%>!% Ð19òòthóó€birthday.Ð Ô&$"& ÐÌÑ  Ñà  àòòò òAlimonyó óóó€is€generally€awarded€as€rehabilitative.€It€is€determined€by€factors€including€eachÐ  (ð#( Ðspouseððs€income€and€ability€to€maintain€or€increase€their€income.€The€length€or€the€marriage€is€alsoÐ †)Ö$) Ðconsidered.€Here,€the€court€awarded€rehabilitative€alimony€for€two€years.Ð l*¼%* ÐÌà  àBertha€will€need€to€file€for€a€contempt€hearing€in€the€Circuit€Court€for€Ô_ÔAlleganyÔ_Ô€County€for€BertÐ 8,ˆ', Ðnot€paying€the€court€ordered€child€and€Ô_ÔspousalÔ_Ô€support.Ð ° ÐÌÑ  Ñà  àò òòòAttorneyððs€feesó óóó€can€be€awarded€in€an€enforcement€proceeding.€It€is€granted€at€the€courtððsÐ |Ì Ðdiscretion.Ð b² ÐÌÑ  Ñà  àò òòòDefensesó ó€óóð!ð€Statute€of€Limitations.€Both€support€order€were€dated€6/1/92.€€There€is€no€StatuteÐ . ~ Ðof€Limitations€on€collecting€child€support.Ð  d ÐÌÑ  Ñà  àIt€has€been€14€years€since€the€alimony€was€awarded.€Bertha€knew€Ace€moved€to€Georgia€butÐ à 0 Ðdid€not€seek€to€enforce€the€order€in€Georgia.€Georgia€would€have€given€full€faith€and€credit€to€bothÐ Æ   Ðorders.Ð ¬ ü  Ðà  àAce€could€also€try€to€argue€there€is€a€significant€change€in€circumstance€to€either€lower€orÐ ’â  Ðterminate€Larryððs€child€support.€Bertha€now€lives€with€a€significant€other.€There€are€not€enough€factsÐ xÈ  Ðto€fully€analyze€this€argument.Ð ^®  ÐÌÑ  ÑÓ  Óò òREPRESENTATIVE€ANSWER€2òòÐ *z  ÐÓ  Óó óóóÌ(Ace€ð!ð€ð ðAðð;€Bertha€ð!ð€ð ðBðð;€Larry€ð!ð€ð ðLðð;€Moe€ð!ð€ð ðMðð;€Doris€ð ðDðð)Ð öF Ðà  àÌà  àI€would€explain€the€following€to€B€regarding€her€claims€against€A€and€Aððs€possible€defenses:Ð Â Ðà  àÌà  à1.à ` àò òòòChild€Supportó óóó:€€As€per€the€Circuit€Court€order,€which€had€jurisdiction€since€both€A€andÐ ŽÞ ÐB€lived€in€the€county,€A€had€a€day€to€pay€$50€per€week€per€child.€Child€support€continues€until€theÐ tÄ Ðchildren€reach€the€age€of€18,€or€19,€if€still€in€high€school.Ð Zª ÐÌà  àà ` àL€would€have€turned€18€on€2/2/2003,€so€A€is€definitely€obligated€to€pay€until€that€done.Ð &v ÐAdditionally,€since€L€is€housebound€and€disabled,€A€may€have€a€duty€to€continue€payments€if€it€is€inÐ  \ Ðthe€ð ðbest€interest€of€the€childðð€beyond€the€age€of€18.Ð òB ÐÌÑ  Ñà  àà ` àM€would€have€turned€18€in€2005,€but€since€he€is€still€in€high€school€(11òòthóó€grade),€A€hasÐ ¾ Ða€duty€to€continue€making€payments€until€he€turns€19€on€4/4/06.Ð ¤ô ÐÌÑ  Ñà  àà ` àò òòòDefenseóó:ó ó€€A€may€claim€that€since€he€has€had€no€contact€with€the€children,€he€had€noÐ p!À  Ðresponsibility€to€pay.€This€claim€is€without€merit€since€the€ð ðbest€interest€of€the€childðð€standard€governsÐ V"¦! Ðregardless€of€Aððs€contact€with€the€children.Ð <#Œ" ÐÌà  àà ` àA€may€also€claim€that€since€he€moved€to€Georgia€with€D,€he€had€no€responsibility€toÐ %X $ Ðmake€payments€in€Maryland.€This€is€also€without€merit€since€States€give€full€faith€and€credit€to€familyÐ î%>!% Ðlaw€determinations€such€as€child€support€payments.Ð Ô&$"& ÐÑ  Ñà  àÌà  à2.à ` àò òòòAlimonyóó:ó ó€€As€per€the€valid€court€order€in€1992,€A€was€required€to€pay€B€$100€per€weekÐ  (ð#( Ðfor€2€years€(until€1994).€When€A€moved€to€Georgia,€he€never€paid€any€spousal€support€to€B.Ð †)Ö$) ÐÌÑ  Ñà  àà ` àB€should€be€able€to€recover€the€full€amount€of€alimony€from€A.€B€may€claim€that€sinceÐ R+¢&+ ÐA€now€has€a€ð ðsignificant€otherðð,€there€is€no€reason€to€pay€her€support.€However,€we€do€not€knowÐ 8,ˆ', Ðwhether€B€moved€in€with€the€significant€other€before€or€after€Aððs€final€payment€was€due,€so€thereÐ ° Ðappears€no€factual€basis€for€reducing€past€payments€due.Ð –æ ÐÑ  Ñà  àÌà  à3.à ` àò òòòAððs€Best€Defense:€Lack€of€Jurisdictionó óóó:€€If€B€tries€to€enforce€these€claims€in€aÐ b² ÐMaryland€court,€A€will€claim€that€he€lives€in€Georgia€so€the€court€in€Maryland€lacks€personalÐ H˜ Ðjurisdiction€over€him.€Additionally,€the€only€reason€A€came€back€is€to€attend€to€his€family€situation€andÐ . ~ Ðthere€is€no€evidence€he€plans€to€remain€in€Maryland.Ð  d ÐÌÑ  Ñà  àà ` àA€series€of€federal€statements€will€permit€B€to€recover€from€A€regardless€of€his€moveÐ à 0 Ðto€Georgia€including€the€full€faith€and€credit€given€to€family€law€decisions€in€other€states.Ð Æ   ÐÑ  Ñà  àÌà  à4.à ` àò òòòAttorneyððs€Fees,€New€Inheritanceó óóó:à  àB€will€have€no€right€to€recover€any€of€Aððs€newlyÐ ’â  Ðinherited€property,€and€it€may€be€difficult€to€recover€attorneyððs€fees€now€that€B€is€living€with€aÐ xÈ  Ðsignificant€other€and€the€period€for€spousal€support€has€terminated.€Ð ^®  ÐÌÓ  Óò òÐ  *z  ÐQUESTION€9Ð ° ÐÓ  ÓÌÑ  Ñó óà  àWatson€has€a€checking€account€with€Alpha€Bank.€€The€account€was€designated€as€a€ð ðPettyÐ |Ì ÐCashðð€account.€€Watson€never€wrote€checks€over€$10€from€this€account.€€Watsonððs€sister,€Frieda,€whoÐ b² Ðwas€temporarily€staying€with€Watson,€forged€Watsonððs€signature€on€two€checks€from€Watsonððs€AlphaÐ H˜ ÐBank€account.€€One€check€was€for€$1,000€and€the€other€was€for€$5,000.€€Ð . ~ ÐÌà  àFrieda€first€deposited€the€$1,000€check€in€her€account€at€Beta€Bank.€€She€then€later€depositedÐ ú J Ðthe€$5,000€check€at€Beta€Bank.€€€Beta€Bank€timely€transferred€each€check€to€Alpha€Bank€for€payment.€Ð à 0 ÐAlpha€bank€debited€Watsonððs€account€for€the€$1,000€check€on€May€1,€2004€and€the€$5,000€on€June€1,Ð Æ   Ð2004.€€These€transactions€were€included€respectively€in€Watsonððs€June€and€July€2004€statements.€Ð ¬ ü  ÐFrieda€later€withdrew€the€$6,000€from€her€Beta€Bank€account€and€left€for€parts€unknown.€€Ð ’â  ÐÑ  ÑÌà  àAfter€bouncing€a€check€for€$10€at€the€end€of€May€2005,€Watson€reviewed€all€of€his€bankÐ ^®  Ðstatements€for€the€past€year€and€saw€the€unauthorized€$1,000€and€$5,000€transactions.€€He€notifiedÐ D”  ÐAlpha€Bank€in€the€beginning€of€July,€2005,€of€the€unauthorized€transactions.€€Watson€demanded€fromÐ *z  ÐAlpha€Bank€repayment€of€both€checks.Ð ` ÐÑ  ÑÓ  ÓÌò òà  àDiscuss€fully€the€rights€of€each€party€(except€for€Frieda)€under€Maryland€commercialÐ Ü, Ðlaw€with€respect€to€the€unauthorized€transactions.€€Ð  ÐÑ  ÑÌÓ  ÓREPRESENTATIVE€ANSWER€1Ð ŽÞ ÐÌÓ  Óó óà  àGenerally,€under€4„401€a€bank€may€charge€the€account€of€a€customer€if€the€item€is€properlyÐ Zª Ðpayable;€properly€payable€means€that€the€check€was€authorized.Ð @ ÐÌà  àHere,€the€check€written€by€Frieda€was€not€properly€payable€by€Alpha€bank€because€the€checkÐ  \ Ðwas€unauthorized€and€therefore,€the€Alpha€Bank€may€not€charge€the€loss€to€Watson.Ð òB ÐÑ  ÑÌà  àHowever,€under€4„406,€the€dollar€allocation€of€the€damage€is€based€on€comparative€fault.€€AÐ ¾ Ðcustomer€must€use€reasonable€care€in€examining€statements€received€from€the€bank.€€Here,€it€does€notÐ ¤ô Ðappear€that€Watson€exercised€reasonable€care€because€he€did€not€notice€the€statements€until€a€year€later.€Ð Š Ú ÐSo€he€may€be€somewhat€at€fault€under€4„406(c).€€However,€since€the€account€was€labeled€ð ðpetty€cashððÐ p!À  Ðand€Watson€only€wrote€checks€for€$10,€if€Watson€can€show€that€the€bank€failed€to€use€reasonable€careÐ V"¦! Ðin€paying€the€checks,€then€Watson€may€be€able€to€assert€partial€negligence€against€the€bank.€€Under€4„Ð <#Œ" Ð406€(e)€this€loss€is€allocated€between€the€customer€and€the€bank.Ð "$r# ÐÌà  àHowever,€under€4„406(f),€a€customer€that€fails€to€notify€the€bank€within€12€months€loses€claimsÐ î%>!% Ðabove.€€Applying€the€dates,€since€Watson€failed€to€notify€Alpha€until€July€2005,€he€will€not€be€able€toÐ Ô&$"& Ðassert€a€claim€for€the€$1,000€because€this€was€on€the€June€2004€statement.€€But€the€$5,000€is€on€the€JulyÐ º' #' Ð2004€statement€so€he€just€made€this€one.Ð  (ð#( ÐÌAssuming€Beta€submitted€checks€in€good€faith,€there€is€no€cause€of€action€against€Beta€bank.Ð l*¼%* ÐÑ  ÑÓ  Óò òÌÐ 8,ˆ', ЇREPRESENTATIVE€ANSWER€2Ð ° ÐÑ  ÑÌÓ  Óó óà  àThis€question€involves€UCC€€3/4Ð |Ì ÐÑ  ÑÌòòWatson€v.€Beta€BankÐ H˜ ÐÑ  ÑÌÑ  Ñóóòòò òNegotiable€Instrumentó óóó€ð!ð€Here,€2€checks€(drafts)€are€at€issue,€which€are€negotiable€instruments.Ð  d ÐÑ  ÑÌÑ  Ñòòò òHolderóóó ó€ð!ð€Is€a€person€entitled€to€enforce€who€is€in€possession€of€bearer€paper€or€in€possession€ofÐ à 0 Ðorder€paper€containing€all€necessary€signatures.Ð Æ   ÐÑ  ÑÌÑ  ÑÓ  Óòòò òHolder€In€Due€Courseóó€(HDC)ó ó€ð!ð€Is€a€holder€who€took€in€good€faith,€for€value,€and€without€notice€ofÐ ’â  Ðany€claims€or€defenses.€€Here,€Beta€Bank€is€an€HDC,€and€the€facts€do€not€indicate€it€had€notice.Ð xÈ  ÐÌòòò òConclusionó óóó€ð!ð€Watson€has€no€claim€against€Beta.Ð D”  ÐÑ  ÑÌÑ  ÑòòWatson€v.€Alpha€BankÐ ` ÐÑ  ÑÌÑ  Ñóóòòò òProperly€Payable€ðð€4„401ó óóó€ð!ð€A€bank€may€only€charge€a€customerððs€account€if€the€item€is€properlyÐ Ü, Ðpayable/authorized€by€the€customer.€€Here,€ð ðFrieda€forged€Watsonððs€signature€on€the€2€checks,ðð€andÐ Â Ðthus€the€checks€did€not€contain€all€necessary€signatures€and€it€was€not€properly€payable€and€Alpha€didÐ ¨ø Ðnot€have€a€right€to€charge€the€account.Ð ŽÞ ÐÑ  ÑÌÑ  Ñòòò òðð€4„406€ð!ð€Customersðð€Duty€to€Report€Unauthorized€Signaturesó óÐ Zª Ðóóà  àA€customer€has€a€duty€to€promptly€review€statements€and€notify€the€bank€of€any€unauthorizedÐ @ Ðsignatures.€€€Ô_ÔHere,Ô_Ô€Watsonððs€ð ðJune€&€July€2004€statementsðð€included€the€unauthorized€transactions€andÐ &v ÐWatson€did€not€notify€Alpha€until€July€2005.€€Thus,€Watson€did€not€comply€with€his€review€duties€withÐ  \ Ðrespect€to€the€checks.Ð òB ÐÌòòò òOrdinary€Careó óóó€ð!ð€A€bank€must€exercise€ordinary€care€in€paying€items.€€Here,€ð ðWatson€has€a€checkingÐ ¾ Ðaccount€with€Alpha€designated€as€ððpetty€cashðð€and€he€never€wrote€checks€over€$10.00€from€thisÐ ¤ô Ðaccount.ðð€€Thus,€Alpha€was€on€constructive€notice€and€did€not€exercise€ordinary€care.Ð Š Ú ÐÑ  ÑÌÑ  Ñòòò òResultó óóó:€€Because€Watson€failed€to€review€the€first€check€within€1€year€he€is€precluded€from€assertingÐ V"¦! Ða€claim€against€Alpha€on€that€check€but€can€get€the€damages€for€check€number€two€apportionedÐ <#Œ" Ðbetween€himself€and€Alpha.€€Alpha€may€not€recover€for€breach€of€warranty.Ð "$r# ÐÑ  ÑÌÓ  ÓÌÌÔ‡€Xü¯XXXü¯Ôò òÌÌÌÌÌÐ 8,ˆ', ÐQUESTION€10ó óÐ ° ÐòòÔ#†Xü¯XX€Xü¯UG#ÔÌÑ  ÑóóÓ  Ó€€€€€à0  àBill€operated€a€sports€memorabilia€shop€on€Empire€Boulevard€in€Frederick,€Maryland.€€As€Ð|Ì $ $ Ðhe€prepared€to€close€the€shop€for€the€day,€Todd€and€Matt€entered€through€the€front€door.€€Todd€wasÐ b² Ðarmed€with€a€handgun.€€He€ordered€Bill€to€the€back€of€the€shop€while€Matt€stayed€out€front.€€Bill€andÐ H˜ ÐTodd€entered€the€office€where€Todd€demanded€the€contents€of€the€safe.€€Bill€opened€the€safe,€pulledÐ . ~ Ða€handgun€out,€and€shot€Todd,€killing€him€instantly.€€Hearing€the€gunfire,€Matt€grabbed€the€contentsÐ  d Ðof€the€cash€register,€$475,€and€fled.Ð ú J ÐÌà  àOfficer€Garcia€was€on€routine€patrol€about€half€a€mile€from€the€shop€when€he€received€the€callÐ Æ   Ðfor€a€robbery€in€progress€over€the€radio.€€En€route€to€the€shop,€Officer€Garcia€came€upon€Matt€whoÐ ¬ ü  Ðbegan€running€away€at€top€speed€when€he€saw€the€officer.€€Officer€Garcia€stopped€Matt€and€explainedÐ ’â  Ðthat€a€store€in€the€area€had€just€been€robbed.€€The€officer€asked€Matt€if€he€could€search€him.€€Matt€putÐ xÈ  Ðhis€hands€in€the€air€and€said,€ð ðyouððll€just€be€wasting€your€time.ðð€€Officer€Garcia€searched€and€foundÐ ^®  Ð$475€in€Mattððs€left€front€pants€pocket.€€He€wrote€down€Mattððs€name€and€address€and€continued€to€theÐ D”  Ðshop.Ð *z  ÐÑ  ÑÌà  àA€week€later,€Officer€Garcia€learned€that€Todd€had€a€younger€brother€named€Matt.€€Armed€withÐ öF Ðthe€knowledge€that€exactly€$475€had€been€stolen€from€the€memorabilia€shop€in€the€robbery,€andÐ Ü, Ðdetermined€to€earn€his€detective€stripes,€Officer€Garcia€went€to€the€address€Matt€had€provided€andÐ Â Ðarrested€him.€€Officer€Garcia€took€Matt€to€the€police€station€for€questioning.€€He€administered€MattððsÐ ¨ø ÐMiranda€warnings.€€Matt€demanded€to€speak€with€an€attorney.€€The€officer€stated€ð ðI€canððt€get€you€aÐ ŽÞ Ðlawyer€but€I€can€get€you€a€free€ride€to€the€city€jail.ðð€€Three€hours€later,€while€sitting€alone€in€a€holdingÐ tÄ Ðcell€waiting€to€be€transported€to€jail,€Matt€yelled€ð ðStop€playing€these€mind€games!€€I€canððt€take€theÐ Zª Ðpressure!€Iððll€talk!€€Iððll€talk!ðð€€He€then€confessed€to€Officer€Garcia.Ð @ ÐÌò òÑ  Ñà  àa.€€€òŒòWhat€charges€might€be€brought€against€Matt?€€Ð  \ ÐÔ‡ôÌ” òXXü¯ÔÌà  àB.€€€òŒòÔ#†Xü¯X òôÌ”ÞQ#ÔMattððs€attorney€files€a€motion€to€suppress€the€money€and€confession.€How€will€theÐ ± Ðcourt€rule€on€the€motions?€€Discuss€Fully.Ð —ç ÐÑ  ÑóŒóóŒóó óÓE(Ü Ü4Œ ä <”ìDœôL¤°°‹XÐ (#€%EÓÌÓ  Óò òREPRESENTATIVE€ANSWER€1Ð c ³ Ðó óÓ  ÓÌÑ  Ñ(A)à  àòòò òConspiracy€to€commit€robberyóó€ó ó„à À àIs€an€agreement€by€two€or€more€to€commit€a€crime.€Ð /"! ÐRobbery€ð!ð€To€take€personal€property€of€another€by€force.€€Here,€(T)€&€(M)€entered€a€store€with€aÐ #e" Ðdeadly€weapon€to€rob.Ð û#K# ÐÌòòò òCo„conspirator€liabilityóó€€ó ó„€€Co„conspirators€are€liable€for€all€acts€that€are€foreseeable€by€co„Ð Ç%!% Ðconspirators.€€The€fact€that€(M)€was€not€armed€still€makes€him€liable€for€(Tððs)€acts.Ð ­&ý!& ÐÑ  ÑÌÌÑ  Ñòòò òAssault€with€a€deadly€weaponó óó󀄀€(T)€assaulted€(B)€with€the€weapon€(gun)€to€get€contents€of€the€safe,Ð _)¯$) Ðwhich€is€attributable€to€(M).Ð E*•%* Ðâ âÑ  ÑÐ ++{&+ ÐÒ„ÏÒÑ  Ñòòò òFelony€murderóó€€ó ó„€€A€killing€in€the€commission€of€a€felony.€€Here,€(B)€shot€and€killed€(T).€€(M)€will€notÐ ° Ðâ âbe€liable€for€co„conspiratorððs€death€because€Maryland€applies€agency€theory€and€(M)€was€not€agent€ofÐ –æ Ð(B).Ð |Ì ÐÌòòò òTheftó óó󀀄€€(M)€took€$475€from€cash€register€with€the€intent€to€deprive.Ð H˜ ÐÑ  ÑÌÑ  Ñ(B)à  àThe€òòò ò4òòthóó€Amendmentó óóó€gives€citizens€the€right€to€be€protected€from€òòò òunreasonableóó€òòsearchó óóó€andÐ  d Ðòòò òseizuresó óóó.Ð ú J ÐÑ  ÑÌÑ  Ñòòò òStandingó óó󀄀Is€the€right€to€object€to€search€and€seizures.€€The€defendant€has€to€show€that€their€rights€wereÐ Æ   Ðviolated.€€(M)€does€have€standing€to€object.€€His€rights€to€an€attorney€were€not€violated€because€theÐ ¬ ü  Ðpolice€stopped€questioning,€but€his€arrest€was€improper€because€they€had€no€arrest€warrant.€€Thus,€anyÐ ’â  Ðevidence€in€the€strictest€standard€has€to€show€that€the€police€had€an€independent€source€to€escape€theÐ xÈ  Ðfruit€of€the€poisonous€tree€standard.Ð ^®  ÐÑ  ÑÌÑ  Ñòòò òMoneyó óóóÐ *z  ÐOfficer€Jones€had€a€right€to€stop€(M)€on€the€streetÐ ` ÐÑ  ÑÌÑ  Ñòòò òStop€and€Frisk€exception€ó óóóð!ð€(J)€saw€(M)€running€away€at€a€fast€speed€in€close€proximity€to€the€robbery.€Ð Ü, ÐThus,€there€was€reasonable€Ô_ÔarticulableÔ_Ô€suspicion€that€(M)€may€be€involved.Ð Â ÐÌòòò òFriskó óóó€ð!ð€(J)€knew€it€was€armed€robbery€and€the€fact€that€(M)€was€running€(J)€could€do€a€limited€Ô_ÔpatdownÔ_ÔÐ ŽÞ Ðof€(M).€€Besides€(M)€consented€to€a€search€where€the€bundle€of€money€was€found.€€The€money€will€notÐ tÄ Ðbe€suppressed.Ð Zª ÐÑ  ÑÌÑ  Ñòòò òConfessionó óÐ &v ÐóóAn€argument€can€be€made€that€even€though€the€arrest€was€not€valid€because€they€had€no€warrant,€theyÐ  \ Ðnever€forced€(M)€to€talk.€€(M)€did€it€on€his€own.€€However,€the€fact€that€(M)€should€not€have€been€thereÐ òB Ðin€the€first€place€because€of€the€Ô_ÔwarrantlessÔ_Ô€arrest,€the€statement€will€not€come€in.€Ð Ø( ÐÑ  ÑÌÌÓ  Óò òÓ€ÓÓ€ÓREPRESENTATIVE€ANSWER€2Ð Š Ú Ðó óÌÑ  Ñò òÓ  ÓA.ó óà  àMatt€will€be€charged€for€conspiracy,€robbery,€larceny,€assault,€false€imprisonment€andÐ V"¦! Ðsolicitation.Ð <#Œ" Ðà  àÌà  àWhen€Todd€asked€Matt€to€go€and€rob€the€store,€the€crime€of€solicitation€was€complete.€Ð %X $ ÐHowever,€solicitation€merges€with€the€substantive€crime.Ð î%>!% Ðà  àÌà  àWe€can€assume€from€the€facts€that€there€is€conspiracy€since€Todd€and€Matt€entered€throughÐ º' #' Ðthe€front€door€of€the€sport€memorabilia€shop.€€Conspiracy€is€an€agreement€between€two€or€moreÐ  (ð#( Ðpeople€to€commit€a€felony.€€The€co„conspirator€is€guilty€for€all€subsequent€crimes.€€Therefore,€MattÐ †)Ö$) Ðwill€be€charged€with€armed€robbery€as€Todd€was€armed€with€a€handgun.€€Matt€is€responsible€for€theÐ l*¼%* Ðcrimes€committed€by€Todd€in€furtherance€of€the€conspiracy.€€He€will€be€charged€with€robbery€whichÐ R+¢&+ Ðis€larceny€by€threat€or€use€of€force.€€Matt,€when€he€grabbed€the€contents€of€the€cash€register€and€fledÐ 8,ˆ', Ðwith€$475,€could€be€charged€with€theft,€as€he€took€and€carried€away€the€property€of€another.€Ð ° ÐMaryland€criminal€law€does€not€require€the€element€to€permanently€deprive€the€owner€for€theÐ –æ Ðdefendant€to€be€guilty€of€theft€crimes.Ð |Ì Ðà  àÌà  àHe€could€be€charged€with€felony€murder€but€the€agency€rule€applies€and€therefore€he€will€notÐ H˜ Ðbe€culpable€hence€Matt€will€not€be€liable€for€the€death€of€Todd€by€Bill.€Ð . ~ Ðà  àÌà  àWhen€Todd€ordered€Bill€to€the€back€of€the€shop€while€Matt€stayed€out€front,€Matt€could€beÐ ú J Ðcharged€with€false€imprisonment€for€Bill€was€taken€within€a€bounded€area€and€he€was€aware€of€theÐ à 0 Ðconfinement.€€Matt€could€also€be€charged€with€assault€which€is€an€intent€to€commit€battery€andÐ Æ   Ðcausing€of€bodily€harm€or€threat€of€harm€on€Bill,€by€using€the€handgun€to€threaten€Bill.Ð ¬ ü  Ðò òÌB.ó óà  àMattððs€attorneyððs€motion€to€suppress€will€likely€be€denied€by€the€Court€as€related€to€the€$475.€Ð xÈ  ÐHere,€Officer€Garcia€has€a€reasonable€suspicion€and€ultimately€probable€cause€to€stop€and€searchÐ ^®  ÐMatt.€€Matt€has€a€reasonable€expectation€of€privacy€and€he€is€protected€by€the€4òòthóó€and€5òòthóó€AmendmentÐ D”  Ðof€self€incrimination.€€However,€given€the€fact€that€Officer€Garcia€was€around€the€area€when€heÐ *z  Ðreceived€the€call€that€an€armed€robbery€was€in€progress,€and€as€he€came€upon€Matt€he€began€to€runÐ ` Ðaway€at€top€speed.€€Officer€Garcia€has€reasonable€suspicion€to€stop€and€frisk€Matt.€€Also,€OfficerÐ öF ÐGarcia€asked€if€he€could€search€him€and€Matt€put€his€hands€in€the€air€and€said€you€will€not€findÐ Ü, Ðnothing.€€This€implies€consent€and€therefore,€even€if€no€reasonable€suspicion,€it€will€come€in€underÐ Â Ðconsent.Ð ¨ø ÐÓ€f`Óà  àÌÓ€Óà  àOfficer€Garcia€violated€Mattððs€4òòthóó€Amendment€right€(as€defined€above)€when€he€arrested€himÐ ç7 Ðin€his€home€without€a€warrant.€€This€is€an€illegal€arrest€and€therefore,€all€evidence€elicited€by€theÐ Í Ðunlawful€arrest€may€be€suppressed.Ð ³ Ðà  àÌà  àMattððs€attorney€will€argue€that€Officer€Garcia€also€violated€Mattððs€6òòthóó€Amendment€right€toÐ Ï Ðcounsel€or€5òòthóó€Amendment€right€to€self€incrimination.€€However,€Matt€was€not€interrogated€forÐ eµ ÐOfficer€Garcia€only€told€him€that€ð ðI€canððt€get€you€a€lawyer,€but€I€can€get€you€a€free€ride€to€jail.ðð€€ThisÐ K› Ðstatement€standing€alone€does€not€amount€to€interrogation.€€Therefore,€Mattððs€confession€may€beÐ 1 Ðvoluntary€as€it€was€not€coerced,€it€was€made€intelligently€and€knowingly.Ð  g ÐÑ  Ñà  àÌà  àNevertheless,€the€Court€may€suppress€the€confession€since€it€is€the€fruit€of€illegal€arrest.€Ð ã!3! ÐOfficer€Garcia€could€simply€go€to€a€detached€magistrate€and€obtain€a€warrant€before€executing€theÐ É"" Ðarrest.Ð ¯#ÿ# ÐÓ€mÓà  àÌà  àTherefore,€the€Court€may€deny€the€confession€but€grant€the€475.Ð î%>!& ÐÌÌÌÐ R+¢&. ЇÓ€ÓÓ  Óò òQUESTION€11ó óÐ ° ÐÓŽrÓÌà  àBud€and€Lou€formed€New€Frontier€Development,€Inc.€("New€Frontier"),€a€MarylandÐ |Ì Ðcorporation,€for€the€purposes€of€acquiring,€subdividing,€developing,€and€selling€residential€lots€inÐ b² ÐMontgomery€County,€Maryland.€Bud€and€Lou€were€the€sole€and€equal€shareholders€of€New€Frontier,Ð H˜ Ðand€served€as€the€sole€officers€and€directors€of€New€Frontier.Ð . ~ ÐÌà  àIn€2002,€New€Frontier€acquired€land€in€Ô_ÔPoolesvilleÔ_Ô,€Maryland,€known€as€Ô_ÔGreenacreÔ_Ô€EstatesÐ ú J Ð("Ô_ÔGreenacreÔ_Ô").€During€its€development.€of€Ô_ÔGreenacreÔ_Ô,€New€Frontier€created€the€Ô_ÔGreenacreÔ_ÔÐ à 0 ÐHomeowner€Association€("Ô_ÔHOAÔ_Ô")€and€appointed€Bud€and€Lou€as€its€sole€officers€and€directors.Ð Æ   ÐAfter€selling€its€final€lot€in€Ô_ÔGreenacreÔ_Ô€in€February€2004,€New€Frontier€declared€a€bonus€andÐ ¬ ü  Ðdistributed€all€of€the€remaining€cash€from€the€sale€of€Ô_ÔGreenacreÔ_Ô€lots€to€Bud€and€Lou€in€equal€sharesÐ ’â  Ðin€March€2004.Ð xÈ  ÐÌà  àIn€October€2005,€the€Ô_ÔHOAÔ_Ô€had€its€books€audited€and€determined€that:€(Ô_ÔiÔ_Ô)€its€chronic€cashÐ D”  Ðflow€problems€resulted€from€the€failure€of€New€Frontier€to€pay€required€annual€assessments€to€theÐ *z  ÐÔ_ÔHOAÔ_Ô€during€2003€and€2004€when€New€Frontier€owned€lots€in€the€subdivision;€and€(ii)€New€FrontierÐ ` Ðfailed€to€convey€the€common€area€property€to€the€Ô_ÔHOAÔ_Ô,€as€it€was€required€to€do€under€the€Ô_ÔHOAÔ_ÔÐ öF Ðdocuments.€When€the€Ô_ÔHOAÔ_Ô€attempted€to€contact€New€Frontier€about€these€deficiencies€in€NovemberÐ Ü, Ð2005,€the€Ô_ÔHOAÔ_Ô€learned€that€New€Frontier€had€forfeited€its€charter€in€2004€after€failing€to€file€annualÐ Â Ðreports€with€the€Maryland€State€Department€of€Assessments€and€Taxation€("Ô_ÔSDATÔ_Ô")€in€2003€andÐ ¨ø Ð2004.Ð ŽÞ Ðà  àÌà  àIn€January€2006,€the€Ô_ÔHOAÔ_Ô€president,€with€consent€of€the€Ô_ÔHOAÔ_Ô€board,€comes€to€you,€aÐ Zª ÐMaryland€attorney,€to€ask€how€the€Ô_ÔHOAÔ_Ô€can€obtain€title€to€its€common€area€property€and€recover€allÐ @ Ðpast€assessments€from€New€Frontier.Ð &v ÐÝ‚,ÿÿÿÝÒܰÒÒ „ÒÓ  ÓÔ€ôÌ” òXXü¯ÔÔ€-ôÌ” ò òôÌ”ÔÔ  ÔÔ  ÔÔ??US.,ÔÝ  Ý€€€Ð  \ Ѐ€€à 4 àÔ€-Xü¯X ò-ôÌ”Ôò òWhat€advice€will€you€give€to€the€Ô_ÔROAÔ_Ô€about€possible€claims€against€Bud,€Lou,Ð Ë Ðand€New€Frontier?€What€is€the€likelihood€of€success?€Explain€your€answer€fully.ó óÐ ± ÐÝ‚,ÿÿÿ¾}ƒÝÔUS.,??.,ÔÔ  ÔÔ  ÔÔ€-Xü¯XX-Xü¯ÔÔ€Xü¯XX-Xü¯ÔÒ°ÜÒÒ„ ÒÓ  ÓÝ  ÝÓ  ÓÌò òREPRESENTATIVE€ANSWER€€1ó óÐ }Í ÐÌÓ  ÓSpecific€Performance€against€New€FrontierÐ I!™  ÐÌà  àThe€Ô_ÔHOAÔ_Ô€can€bring€an€action€against€New€Frontier€for€specific€performance€on€theÐ #e" Ðagreement€to€convey€the€common€area€property.€€The€action€would€be€brought€against€Bud€and€Lou,Ð û#K# Ðin€their€capacities€as€trustees€of€the€assets€and€the€property€owned€by€New€Frontier€(when€aÐ á$1 $ Ðcorporation€forfeits€its€charter,€its€property€is€held€in€trust).€€This€claim€would€probably€succeedÐ Ç%!% Ðunless€there€is€another€competing€claim€to€the€property€(creditor,€etc.)Ð ­&ý!& ÐÌAction€to€Recover€Assessments€from€Bud€and€Lou€as€ShareholdersÐ y(É#( ÐÌà  àThe€Ô_ÔHOAÔ_Ô€can€also€bring€an€action€against€Bud€and€Lou€as€shareholders.€€Typically,€aÐ E*•%* Ðcorporationððs€shareholders€are€not€liable€for€the€debts€of€the€corporation;€however,€the€Courts€willÐ ++{&+ Ðð ðpierce€the€corporate€veilðð€and€hold€Shareholders€liable€where€there€is€a€showing€of€fraud€or€it€isÐ ,a', ÐÔ_ÔÔ_ÔnecessaryÔ_Ô€Ô_ÔtoÔ_Ô€Ô_ÔenforceÔ_Ô€Ô_ÔaÔ_Ô€Ô_ÔmanifestÔ_Ô€Ô_ÔequityÔ_Ô.€€Ô_ÔHOAÔ_Ô€Ô_ÔcanÔ_Ô€Ô_ÔallegeÔ_Ô€Ô_ÔthatÔ_Ô€Bud€and€Lou€treated€the€corporation€asÐ ° Ða€shell,€and€that€they€really€just€entered€into€business€agreement€on€behalf€of€themselves€and€co„Ð –æ Ðmingled€corporate€funds€with€their€own.€€This€will€probably€not€win€on€the€facts€given.Ð |Ì ÐÌÔ_ÔActionÔ_Ô€Ô_ÔagainstÔ_Ô€Ô_ÔBudÔ_Ô€Ô_ÔandÔ_Ô€Lou€for€Breach€of€Duty€of€Loyalty€and€Duty€of€CareÐ H˜ ÐÌà  àÔ_ÔHOAÔ_Ô€Ô_ÔcanÔ_Ô€bring€an€action€against€Bud€and€Lou€as€directors€Ô_ÔofÔ_Ô€Ô_ÔHOAÔ_Ô€Ô_ÔforÔ_Ô€breach€of€duty€ofÐ  d Ðcare.€€Bud€and€Lou€appear€to€have€completely€ignored€their€duties€Ô_ÔtoÔ_Ô€Ô_ÔHOAÔ_Ô,€Ô_ÔandÔ_Ô€failed€to€exerciseÐ ú J Ðreasonably€prudent€judgment€in€not€paying€the€assessments€on€delivering€the€property.Ð à 0 Ðà  àÌà  àIn€addition,€Bud€and€Lou€may€be€held€for€breach€of€duty€of€care€and€loyalty€to€New€Frontier,Ð ¬ ü  Ðalthough€I€am€not€sure€Ô_ÔHOAÔ_Ô€has€standing€to€bring€that€suit.€€If€they€do,€Bud€and€Lou€will€likely€beÐ ’â  Ðfound€liable.€€Although€the€business€judgment€rule€typically€protects€directors€in€making€businessÐ xÈ  Ðdecisions,€the€decision€to€declare€a€bonus€was€likely€a€breach€because€it€appears€that€New€FrontierÐ ^®  Ðmay€have€been€rendered€insolvent€by€this€action.€€Thus,€they€likely€breached€their€duties€to€NewÐ D”  ÐFrontier.€€Ð *z  ÐÌò òÓ  ÓÔ_ÔREPRESENTATIVEÔ_Ô€Ô_ÔANSWERÔ_Ô€2ó óÐ öF ÐÓ–ÓÌÔ_Ôò òDutyÔ_Ô€Ô_ÔofÔ_Ô€care/loyaltyó óÐ Â ÐÌà  àDirectors€and€officers€are€required€to€make€decisions€concerning€the€corporation€€(1)€in€goodÐ ŽÞ Ðfaith,€(2)€that€are€in€the€best€interests€of€the€corporation,€and€(3)€with€the€care€that€an€ordinarilyÐ tÄ Ðprudent€person€would€under€the€circumstances.€€The€Ô_ÔHOAÔ_Ô€could€argue€that€Lou€and€Bud€did€notÐ Zª Ðexercise€care€in€its€duties€to€pay€annual€assessments€or€to€convey€the€common€areas,€or€alternatively,Ð @ Ðdid€so€in€bad€faith.€€If€the€Ô_ÔHOAÔ_Ô€succeeds€it€could€collect€from€New€Frontier,€but€since€New€FrontierÐ &v Ðhas€no€assets,€it€would€have€to€pierce€the€corporate€veil€(Ô_ÔPCVÔ_Ô)€to€collect.€€Ô_ÔPCVÔ_Ô€is€generally€onlyÐ  \ Ðallowed€in€the€presence€of€fraud€or€to€right€a€paramount€equity.€€This€is€an€extremely€high€burdenÐ òB Ðfor€Ô_ÔHOAÔ_Ô€and€there€are€no€facts€to€support€this€burden€there€is€insufficient€paramount€equity.€€TheÐ Ø( ÐÔ_ÔHOAÔ_Ô€would€not€recover€under€this€course€of€action.Ð ¾ ÐÌò òBreach€of€contractó óÐ Š Ú ÐÌà  àÔ_ÔHOAÔ_Ô€could€sue€New€Frontier€for€breach€of€contract€for€(1)€not€paying€assessments€and€(2)Ð V"¦! Ðnot€conveying€the€common€areas.€€This€action€would€be€successful€because€there€are€expressÐ <#Œ" Ðprovisions€that€New€Frontier€did€not€comply€with.€€However,€since€New€Frontier€has€no€assets,€theyÐ "$r# Ðwould€not€likely€recover€money€under€this€course€of€action,€but€could€have€the€common€areasÐ %X $ Ðconveyed.€€Ð î%>!% ÐÌò òUltra€Vires€Actó óÐ º' #' ÐÌà  àIn€Maryland,€a€plaintiff€can€recover€for€an€ultra€vires€act€that€has€harmed€the€plaintiff.€€In€thisÐ †)Ö$) Ðcase,€the€charter€for€New€Frontier€was€forfeited€in€2004.€€At€this€point€the€corporation€ceased€toÐ l*¼%* Ðexist,€and€Bud€and€Lou€are€now€trustees€in€liquidation.€€The€distribution€in€2004€was€an€ultra€Ô_ÔviresÔ_ÔÐ R+¢&+ ÐÔ_ÔactÔ_Ô€(Ô_ÔassumingÔ_Ô€Ô_ÔcharterÔ_Ô€Ô_ÔforfeitedÔ_Ô€Ô_ÔbeforeÔ_Ô€Ô_ÔMarchÔ_Ô€2004)€Ô_ÔbecauseÔ_Ô€Ô_ÔLouÔ_Ô€Ô_ÔandÔ_Ô€Ô_ÔBudÔ_Ô€Ô_ÔcouldÔ_Ô€Ô_ÔnotÔ_Ô€Ô_ÔdistributeÔ_Ô€Ô_ÔtoÔ_ÔÐ 8,ˆ', ÐÔ_ÔthemselvesÔ_Ô€Ô_ÔasÔ_Ô€Ô_ÔshareholdersÔ_Ô€Ô_ÔuntilÔ_Ô€Ô_ÔallÔ_Ô€Ô_ÔcreditorsÔ_Ô€Ô_ÔwereÔ_Ô€Ô_ÔpaidÔ_Ô.€€Ô_ÔSinceÔ_Ô€Ô_ÔtheÔ_Ô€Ô_ÔHOAÔ_Ô€Ô_ÔwasÔ_Ô€owed€assessments€itÐ ° Ðwas€a€creditor€and€it€should€have€been€paid.€€Lou€and€Bud€as€trustees€could€be€personally€liable€forÐ –æ Ðthe€unauthorized€distribution.€€Ð |Ì Ѐ€Ð b² ÐÑ  ÑÌÌÌÌÓ€|rÓÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÐ 8,ˆ'8 ÐÔ‡-Xü¯XXXü¯ÔÑX°ÑÒܰÒÒÜ„ÒÔ_ÔÖ€/&æÖÔ_ÔÓ  Óò òQUESTION€12Ð ° ÐÓ  ÓÓ€ÓÝ‚.ÿÿÿÝÓ  ÓÔ€-ôÌ” òX-Xü¯ÔÔ€ôý ò ò-ôÌ”ÔÔ€-ôÌ” ò òôýÔÔ  ÔÔ  ÔÔ??US.,ÔÝ  ÝÓ  ÓÔ_Ô€€€Ô‡-Xü¯X ò-ôÌ”ÔòŒòÐ  Y Ѐ€€à 4 àóŒóó óIn€September€2005,€Jane€and€Mark€Jones,€residents€of€Baltimore€County,Ð È ÐMaryland€decided€to€seek€a€divorce.€They€met€with€their€business€lawyer,€CharlesÐ ®þ ÐCounsel,€a€Maryland€lawyer.€Counsel€told€them€that€since€they€did€not€have€any€children,Ð ”ä Ðthey€could€divide€their€assets€equally€and€he€would€draft€a€separation€agreement€for€themÐ z Ê Ðand€Me€all€appropriate€documents€with€the€Court.€Counsel€gave€Jane€and€Mark€each€a€setÐ ` ° Ðof€forms€for€the€preparation€of€their€financial€statements€for€use€in€their€divorce€action.Ð F – Ѐ€€Ð , |  Ѐ€€à 4 àMark€Jones€reported€on€his€financial€statement€that€he€was€the€sole€owner€of€aÐ  b  Ðfailing€computer€software€company€and€that€the€business€would€be€shut€down€byÐ ø H  ÐNovember€30,€2005.€Mark€delivered€his€completed€financial€statement€to€Counsel€and€toÐ Þ.  ÐJane.€Counsel€filed€Mark's€and€Jane's€financial€statements€in€their€divorce€action€inÐ Ä  ÐOctober€2005.Ð ªú  Ѐ€€à 4 àÐ à  Ѐ€€à 4 àIn€November€2005,€Mark€asked€Counsel€to€assist€him€with€collecting€money€fromÐ vÆ  Ða€defense€contractor€that€owed€his€computer€company€$400,000€for€services€rendered€inÐ \¬ Ð2004€and€2005.€After€receiving€Counsel's€letter€threatening€legal€action,€the€contractorÐ B’ Ðpaid€the€full€amount€owed€on€November€20th,€out€of€which€Mark€paid€himself€his€unpaidÐ (x Ðsalary.€He€immediately€began€soliciting€new€contracts€for€the€company.Ð ^ Ѐ€€Ð ôD Ѐ€€à 4 àIn€December€2005,€the€Court€granted€Mark€and€Jane€a€divorce.€The€CourtÐ Ú* Ðapproved€the€division€of€assets€based€upon€the€October€2005€financial€statements€filed€byÐ À ÐCounsel€and€the€separation€agreement€signed€by€Mark€and€Jane.Ð ¦ö Ѐ€€Ð ŒÜ Ѐ€€à 4 àIn€early€February€2006,€Jane€learned€that€Mark€did€not€close€down€his€business,Ð r Ðthat€he€was€able€to€pay€himself€his€substantial€past€due€salary€from€the€company,€and€thatÐ X¨ ÐCharles€Counsel€continued€to€represent€Mark€and€the€company.Ð >Ž ÐÝ‚.ÿÿÿdƒÝÔUS.,??.,ÔÔ  ÔÔ  ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÓ  ÓÝ  ÝÔ_Ô€€€Ð $t Ѐ€€à 4 àÔ_ÔJaneÔ_Ô€Ô_ÔfilesÔ_Ô€Ô_ÔaÔ_Ô€Ô_ÔcomplaintÔ_Ô€Ô_ÔagainstÔ_Ô€Ô_ÔCharlesÔ_Ô€Ô_ÔCounselÔ_Ô€Ô_ÔbasedÔ_Ô€Ô_ÔonÔ_Ô€Ô_ÔtheÔ_Ô€Ô_ÔaboveÔ_Ô€Ô_ÔfactsÔ_Ô€Ô_ÔwithÔ_Ô€Ô_ÔtheÔ_ÔÐ  Z ÐÔ_ÔAttorneyÔ_Ô€Ô_ÔGrievanceÔ_Ô€Ô_ÔCommissionÔ_Ô€Ô_ÔofÔ_Ô€Ô_ÔMarylandÔ_Ô.Ð ð@ ÐÝ‚.ÿÿÿÝÓ  ÓÔ€-ôÌ” òX-Xü¯ÔÔ€-ôÌ” ò ò-ôÌ”ÔÔ€ôý ò ò-ôÌ”ÔÔ€-ôÌ” ò òôýÔÔ  ÔÔ  ÔÔ??US.,ÔÝ  ÝÓ  ÓÔ_Ô€€€Ô#†-ôÌ” ò ò-ôÌ”1ž#ÔÔ‡-Xü¯X ò-ôÌ”Ôò òÐ Ö &  Ѐ€€à 4 àWhat,€if€any,€ethical€obligations€did€Charles€Counsel€violate?€Please€explainÐ •!å! Ðyour€answer€fully,€stating€the€bases€for€any€violation€of€the€Maryland€Lawyers'Ð {"Ë" ÐRules€of€Professional€Conduct€by€Charles€Counsel.Ð a#±# Ѐ€€Ð G$—$ ÐÓ  ÓREPRESENTATIVE€ANSWER€1ó óÐ -%} % ÐÝ‚.ÿÿÿ§«ƒÝÔUS.,??.,ÔÔ  ÔÔ  ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÔ€-Xü¯XX-Xü¯ÔÓ  ÓÝ  ÝÔ_Ôò òÌà 4 àó óAn€attorney€has€an€obligation€to€provide€competent,€diligent€and€zealousÐ ù&I"' Ðrepresentation€to€his€client,€free€from€conflicts€of€interest.Ð ß'/#( ÐÌÖ€9/²Öà 4 àHere,€Counsel€has€violated€the€ethical€obligation€to€avoid€conflicts€of€interest€asÐ «)û$* Ðhe€was€representing€both€Jane€and€Mark€in€the€divorce€action.€€The€only€way€CounselÐ ‘*á%+ Ðshould€have€agreed€to€represent€them€both€is€after€gaining€written€consent€from€bothÐ w+Ç&, Ðparties€and€ensuring€that€the€interests€of€the€parties€were€not€directly€or€materiallyÐ ],­'- Ðadverse€to€one€another.€€Here,€it€could€be€reasonably€inferred€that€Jane€and€MarkððsÐ C-“(. Ðinterests€were€directly€and€materially€adverse.Ð ).y)/ ÐÖ€9æÖÖ€FÿÿÖÌà 4 àIn€addition,€an€attorney€has€a€duty€of€competence.€€Here,€Counsel€was€a€businessÐ –æ Ðlawyer,€not€a€divorce€lawyer,€which€on€its€face€does€not€mean€Counsel€was€incompetentÐ |Ì Ðto€handle€a€divorce,€but€does€suggest€that€a€referral€to€a€lawyer€more€skilled€in€suchÐ b² Ðmatters€may€have€been€more€appropriate.Ð H˜ ÐÌà 4 àAn€attorney€also€has€an€ethical€obligation€to€be€honest€in€his€dealings€and€to€giveÐ  d Ðcandor€to€the€tribunal.€€Here,€Mark€delivered€his€financial€statement€to€Counsel€statingÐ ú J Ðthat€his€business€would€be€shut€down€by€November€30,€2005.€€Counsel€filed€this€andÐ à 0 ÐJaneððs€statement€in€October€2005.€€After€the€filing€of€Markððs€statement,€Counsel€assistedÐ Æ   ÐMark€in€obtaining€the€full€amount€due€from€a€contractor€out€of€which€Mark€paid€himselfÐ ¬ ü  Ðhis€unpaid€salary€and€Mark€continued€his€business.€€Counsel€knew€of€these€events€andÐ ’â  Ðdid€not€notify€the€Court€or€advise€Mark€to€amend€his€financial€statement.€€Consequently,Ð xÈ  Ðhe€breached€his€ethical€duties.Ð ^®  ÐÌÌÓ  Óò òREPRESENTATIVE€ANSWER€2ó óÐ ` ÐÓ  ÓÌÓB.ÜÜ4Œ ä <”ìDœôL¤ü!ÜÜ‹XBÓà0  àà04ü!ü!àà  à1.à 4 àAlthough€Jane€and€Mark€approached€Charles€together,€he€should€not€have€agreedÐ Ü, Ðto€represent€them€both.€€He€should€have€explained€that€their€interests€wereÐ Â Ðadverse€and€that€he€could€not€give€both€competent,€fair€representation.€€In€theÐ ¨ø Ðevent€that€he€did€agree€to€represent€both€(although€he€should€not),€he€should€haveÐ ŽÞ Ðgotten€written,€informed€consent€from€both€parties.€€He€did€not.ÐtÄ4ü!4ü! ÐÓE+Ü Ü4Œ ä <”ìDœôL¤ü!ÜÜ‚,Œ ŠXEÓÌÓB.ÜÜ4Œ ä <”ìDœôL¤ü!ÜÜŒXBÓà0  àà04ü!ü!àà  à2.à 4 àCharles€helped€Mark€perpetrate€a€financial€fraud€against€Jane€after€filing€aÐ @ Ðfinancial€statement€in€October€2005,€he€represented€Mark€in€an€action€that€nettedÐ &v ÐMarkððs€company€$400,000.€€This€money€was€not€included€in€the€financialÐ  \ Ðstatement€that€Jane€saw€or€Charles€filed.€€It€is€against€the€professional€conductÐ òB Ðrules€for€an€attorney€to€assist€a€client€in€any€illegal€undertakings.ÐØ(4ü!4ü! ÐÓE+Ü Ü4Œ ä <”ìDœôL¤ü!ÜÜ‚,Œ ŠXEÓÌÓB.ÜÜ4Œ ä <”ìDœôL¤ü!ÜÜŒXBÓà0  àà04ü!ü!àà  à3.à 4 àCharles€did€not€provide€Jane€with€competent€legal€counsel.€€He€failed€to€provideÐ ¤ô Ðher€with€all€the€information€necessary€to€ensure€that€she€received€a€fair€settlementÐ Š Ú Ðin€the€divorce€action.€€The€Rules€require€counsel€to€provide€competentÐ p!À  Ðrepresentation.ÐV"¦!4ü!4ü! ÐÓE+Ü Ü4Œ ä <”ìDœôL¤ü!ÜÜ‚,Œ ŠXEÓÌÓB.ÜÜ4Œ ä <”ìDœôL¤ü!ÜÜŒXBÓà0  àà04ü!ü!àà  à4.à 4 àCharles€also€represented€Markððs€company.€€Although€the€representation€workedÐ "$r# Ðout€as€an€advantage€to€Mark,€it€created€a€disadvantage€for€Jane€who€was€under€theÐ %X $ Ðimpression€that€the€company€was€failing€and€would€be€closing€down€by€the€end€ofÐ î%>!% Ð2005.ÐÔ&$"&4ü!4ü! ÐÓE+Ü Ü4Œ ä <”ìDœôL¤ü!ÜÜ‚,Œ ŠXEÓÌÓB.ÜÜ4Œ ä <”ìDœôL¤ü!ÜÜŒXBÓà0  àà04ü!ü!àà  à5.à 4 àCharles€perpetuated€a€fraud€on€the€court.€€Although€the€financial€statement€heÐ  (ð#( Ðfiled€on€Markððs€behalf€was€accurate€in€October,€he€knew€by€December€that€theÐ †)Ö$) Ðstatement€was€grossly€inaccurate.€€He€had€a€duty€of€candor€to€the€tribunal€and€wasÐ l*¼%* Ðrequired€to€file€an€amended€statement€based€on€Markððs€change€in€circumstances.ÐR+¢&+4ü!4ü! Ðâ âÓE+Ü Ü4Œ ä <”ìDœôL¤ü!ÜÜ‚,Œ ŠXEÓÐ 8,ˆ', ÐÓB.ÜÜ4Œ ä <”