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Final Exam Civil Procedure II Prof. Moscato Spring 2010
- You have three (3) hours to complete this exam.
- The exam consists of a single detailed fact pattern followed by a series of questions related to that fact pattern. In order to help you manage your time, I have indicated the amount of time I suggest you spend answering each part of the exam. In grading your exam, I will weight the questions in proportion to the time suggested. You will see that the total amount of time adds up to 2 hours and 30 minutes—which means that I have built in 30 minutes for you to read the fact pattern and organize your thoughts. Please keep careful track of your time!
- This is a closed book exam. However, I have provided for you copies of the relevant provisions of the Federal Rules of Civil Procedure and United States Code that we have covered over the course of the semester. These provisions begin at page 7 of this exam.
- This exam consists of twenty five (25) total pages , including this cover page and the FRCP/statutory provisions. Please make sure you have all 25 pages before you begin.
- If you are hand-writing your exam responses, please use the blue books provided, writing clearly, using only one side of each sheet of paper, and on every other line (to permit instructor comments).
- Write your exam number on your exam envelope. Put your correct class section and student exam number at the top of this page, each page of questions, and each blue book (if you are using them). Do not use your name, student ID number or Social Security Number on any exam materials.
- At the conclusion of the exam, return all test materials, including blue books, scratch paper, and this exam packet to the envelope and submit it to the proctor. Do not seal the envelope. Students who do not return all exam materials at the end of the exam may not be graded.
GOOD LUCK!
FACT PATTERN:
You are an attorney in the General Counsel’s office for Defco Corporation. Defco is a real estate development company (it is an Arizona corporation, with its principal place of business in Phoenix, AZ, and with offices nationwide including in San Francisco, CA). Defco has just been served with a lawsuit by an individual named Lee Johnson.
The Complaint: Johnson’s Complaint alleges the following:
- Plaintiff Lee Johnson is a life-long resident of Oakland, CA.
- In April 2009, Plaintiff Johnson met with Frank Kunkel , General Manager of Defendant Defco’s San Francisco office.
- During that meeting, Johnson told Kunkel that he knew of a mortgage banking company that Defco might be able to acquire at a bargain price. Johnson said he would reveal the name of the mortgage banking company and his plan for acquisition if Kunkel would agree to pay Johnson a $200,000 finder’s fee if Defco proceeded to acquire the company.
- Kunkel accepted Johnson’s proposal.
- In accordance with this agreement, Johnson revealed the name of the company, San Francisco Mortgage Corp. (SFMC) , and revealed his plan for how SFMC might be acquired at a bargain price.
- Kunkel responded that he thought SFMC was too big a company with too much debt, and that Defco was probably not interested.
- Johnson had no further contact with anyone at Defco until January 2010, when he read in the Wall Street Journal that Defco had acquired SFMC on terms virtually identical to those he had recommended to Kunkel.
The Complaint, filed in the U.S. District Court for the Northern District of California, seeks damages in the amount of $200,000. The Complaint states that federal court subject-matter jurisdiction is based on the parties’ diversity. [You should assume for purposes of this Exam that the parties indeed are diverse, that the court has personal jurisdiction over Defco, and that the Northern District is a proper venue].
Your Meeting with Defco’s San Francisco General Manager Frank Kunkel: After receiving this Complaint, you had a meeting with Kunkel to discuss the case. During that meeting, you learned the following from Kunkel:
In the Fall of 2008, Defco, a real estate development company, decided it would like to diversify and enter the mortgage banking field, either by hiring someone to start a mortgage banking division in-house or by acquiring a small mortgage banking company. For the next several months, Defco’s acquisition department investigated several small mortgage companies but found none which it could recommend for acquisition.
Then in February 2009, Kunkel received a resume from Lee Johnson, who indicated he was seeking a position as a mortgage banking executive. In April of 2009, Kunkel decided to interview Johnson for such a position with Defco, thinking that Johnson might be a good fit to start up Defco’s mortgage banking division.
QUESTION 1 : Defco’s General Counsel (i.e., your boss) thinks Johnson’s case is completely toothless and would like to know whether filing a motion to dismiss for failure to state a claim upon which relief can be granted (FRCP 12(b)(6)) might terminate this litigation. Please discuss the merits of a 12(b)(6) motion by Defco in this case.
(Recommended time you spend on Question 1: 30 minutes)
QUESTION 2 : Assume that Defco decides not to file a motion to dismiss, and instead decides to file an Answer to the Complaint. Please describe what should be the contents of that Answer, based on what you know about the case from your interview with Kunkel.
(Recommended time you spend on Question 2: 15 minutes)
QUESTION 3 : The case proceeds into the discovery stage. Johnson sends the following Interrogatory to Defco:
Identify all persons who have knowledge of the facts pertaining to Defco’s acquisition of SFMC, and state the substance of their knowledge and articulate their expected testimony.
Defco’s General Counsel would like to object to that Interrogatory on the basis that you learned about Larry Nelson’s involvement in the SFMC acquisition, and the substance of that involvement, during an attorney-client communication. Is that objection valid? Why or why not?
(Recommended time you spend on Question 3: 15 minutes)
QUESTION 4 : Assume that Defco does disclose Nelson’s identity in response to the above- referenced Interrogatory. Defco’s General Counsel now poses the following question to you: Isn’t Nelson an indispensable party who must be joined in this lawsuit, or alternatively, shouldn’t the case be dismissed if Nelson cannot be joined? How will the court likely rule on Defco’s Motion to Join Nelson as a Defendant or, in the Alternative, to Dismiss?
(Recommended time you spend on Question 4: 30 minutes)
QUESTION 5 : Assume that the case between Johnson and Defco proceeds (and Nelson is not joined as a defendant). Assume further that during your deposition of Johnson, you elicited the following relevant testimony:
Q: When you met with Kunkel in April 2009, what did you understand was the purpose of that meeting? A: It was a job interview. I was being considered for an executive position with Defco’s new mortgage banking division. Q: Why then did you bring up a proposal for Defco to buy SFMC? A: Kunkel made it sound as though Defco was leaning in the direction of taking over an existing mortgage banking business rather than start one from scratch. So I thought it would show confidence, and that I knew the business, so I
figured it would make me a more attractive candidate for an executive position whether Defco’s mortgage banking division was started from scratch or based on acquiring an existing company.
[Johnson’s testimony about the particulars of his plan for acquiring SFMC at a bargain price omitted]
Q: Did you then ask Kunkel for a finder’s fee? A: Yes, I did. Q: How did he react? A: He said it seemed unusual, that finder’s fees are usually paid by the seller. But he understood that I didn’t have an agreement with the seller, so he agreed to pay the fee if Defco followed through and acquired SFMC. Q: Did you discuss the amount of the fee? A: No, but $200,000 is the standard rate a seller would pay a broker for a deal like this one. Q: Did you ask Kunkel to put any of this in writing? A: I’m sure I did. But I can’t seem to find that letter in my records. My dog must have eaten it. Q: How did the interview conclude? A: Kunkel told me he would keep me in mind for the executive position in the event Defco decided to start up a mortgage banking division in-house, and we left it at that. Q: Did you discuss anything else about the arrangement concerning SFMC? A: No. Q: At any time after this April 2009 job interview, did you ever contact Kunkel again to find out the status of any negotiations between Defco and SFMC? A: No.
Defco’s General Counsel has told you that based on this testimony and all the other evidence you have obtained in this case, the case should be disposed of without a trial. Please discuss the relative merits of Defco’s Motion for Summary Judgment.
(Recommended time you spend on Question 5: 30 minutes)
QUESTION 6 : Assume that Defco’s Motion for Summary Judgment is denied, and the case proceeds to trial. Assume further that Johnson’s testimony at trial is identical in all material respects to his deposition testimony, and Kunkel’s testimony likewise is consistent with what he told you during your initial interview. To your great surprise and disappointment, the jury returns a verdict in favor of Johnson, and awards him $200,000 in damages. You immediately file a Motion for a New Trial , arguing that the jury clearly got it wrong and must have been confused by the judge’s instructions. The judge denies the motion, stating “I was just as surprised as you about the verdict. I didn’t buy Johnson’s story at all. But I’m not going to take this case away from the jury; they are entitled to believe him, even if I don’t.” Do you agree with
