EXAM NO. ___________ Prof. Brant

Legal Profession December 15, 1995

GRADE POSTING: If you do not wish to have your grade posted (by exam number) in this course, please place an X by your number on the exam and blue books.

1. What you may bring into the examination:

I. Your textbook,

A. Your statutory supplement (the Green Book),

B. Your class notes,

C. Any outlines or study materials that you played a substantial part in preparing.

2. Canned briefs, Gilberts, Emmanuals, Nutshells & the like may not be brought into the final examination room.

3. Three hours will be allotted for the examination. Blue books will not be passed out for the first 30 minutes. This time should be spent reading and thinking about the question before you begin writing your response. You may use scratch paper to begin outlining your answer during this initial 30 minute period.

4. There will be one essay question on the final examination.

5. In answering the essay question, you should rely upon case law from the textbook and handouts, our class discussions, and EITHER the ABA's Model Rules OR the Model Code of Professional Responsibility. You will not be expected to use both the Code and the Rules in your answer.

6. DO NOT CITE A CASE WITHOUT FURTHER DISCUSSION! There is no presumption that use of a case name results from knowledge of its contents. Discuss and analyze any case law you plan to use in your answer.

7. Write on only one side of each page in the blue books.

DO YOUR BEST TO WRITE LEGIBLY. FAILURE TO WRITE LEGIBLY WILL RESULT IN AN IRATE GRADER READING YOUR EXAMINATION.

Max Marvel, an attorney from Missoula, Montana, decided that his television ads really should communicate something about his libertarian principles to his prospective customers. The ad he devised went like this: "Hello folks, I'm Max Marvel. And I want to tell you -- I'm on YOUR side. If you think the fed's want too much in taxes, print too many regulations, and spend too much on deadbeats who never worked an honest day in their lives -- then you and I have something in common. And if Uncle Sam's been after you -- then I'm the attorney you need to see. Just give me a call -- I'll take real pleasure in getting the fed's off your back." The ad closed with a parting close up of Max's smile, and a legend across the bottom of the screen that read: "Member of the Montana Bar and the Montana Militia."

This ad worked pretty well in Montana. Max got a number of clients, including Gale Crumpler, who hadn't paid his taxes in 15 years, and was currently facing illegal weapons charges. Gale brought in a fully automatic Uzi, which he figured was safer in Max's office than it would be in his cabin. Max also got a call from a local bank, Farmers and Ranchers S & L, whose president, Sam Spokane, said he liked Max's style. Sam pulled no punches in his first conversation with Max -- he admitted that the bank was facing an audit from the Office of Thrift Supervision, and that he was "right nervous about it. I can't say that recordkeeping has ever been one of our strong points. But hell, Max, we've made plenty of money over the years, and we've helped our fine citizens make plenty of money, and that's what it's all about, isn't it?" Max agreed to come in and take a look at the thrift's books in preparation for the OTS audit.

As Max looked over the loan portfolios held by Farmers, he quickly realized that the thrift was in serious trouble. The bank had repeatedly loaned money to land developers without performing due diligence work to verify the value of the collateral. Worse yet, most of these files contained chatty notes from "Sam." Finally, Max came across some entries that indicated that Sam had been skimming money from various trust funds into his personal accounts. Max left the bank thinking hard about what his next move should be.

To distract himself from his worries, Max stopped into the Red Rooster Saloon on his way home, where he struck up a conversation with Jason Johnson, a casual acquaintance who also ran a solo law practice in Missoula. They gossiped generally for a while, and Max happened to mention Gale Crumpler's situation, though he was careful not to use his name. Jason was sympathetic about the weapons violation, but shook his head in disapproval when he heard about Gale's tax deficiency.

Jason had what amounted to a fanatic's hatred of tax cheats. When he got home, he dialed 1-800-IRS-FRAUD, and told them that Max Marvel had a client who hadn't paid taxes in 15 years. He hadn't been able to get the name, he confessed, but he was sure the tip was worth pursuing. Two weeks later, Max received a subpoena ordering him to provide the names of any clients who were, to his knowledge, "seriously deficient" in their income tax obligations.

Meanwhile, Max was hard at work on the Farmer's Bank audit. He wrote the OTS and insisted that all requests for documents be directed to him, as attorney of record for the bank. He then settled down to the time consuming task of filling in the missing due diligence work, all of which he carefully backdated to create the impression that this work had been completed around the time that the loans were made. Max reported Sam's misappropriations to the Board of Directors of Farmers, and recommended that Sam be terminated for misconduct. That way, he said, if there were any files he wasn't able to clean up, the bank could blame all its paperwork difficulties on bad management which had since been eliminated. The Board of Directors thought Max had the right idea; they fired Sam and told Max to draw up a complaint charging Sam with negligence and violations of various federal banking laws. They also recommended that he conduct interviews with all bank employees, in order to identify and jettison those who had been working in league with Sam.

Around this time, Gale Crumpler defaulted on his mortgage, which was held by Farmers Bank. Farmers foreclosed on Gale's property, and brought suit against him on the note. Gale told Max that he'd like Max to represent him on the suit, and Max said he'd be happy to do so. During the trial on the mortgage foreclosure, the attorney representing Farmers asked Gale about his history of financial responsibility. Gale said he'd always paid taxes and was good for all his debts. He was a sympathetic witness, and the jury found in his favor. Max's closing argument probably helped. Max argued that it wasn't fair to brand a man a deadbeat when he'd been a good citizen and taxpayer all his life, just because he couldn't keep up with both his mortgage and his 85 year old mother's nursing home payments.

Gale and Max congratulated each other over drinks in the Red Rooster after the trial, and everything was going fine until Max turned the conversation in the direction of his fee. Gale coughed up his beer and offered to pay a third of the figure Max had mentioned. Max got indignant, Gale got aggrieved, and things ended with Gale stalking out of the bar yelling: "you'll get that money when hell freezes over, Max!"

Max went home and answered the IRS subpoena. He also bundled up the Uzi and sent it to the ATF with an anonymous note suggesting that fingerprint testing might be in order.

When Max got to the office the next morning, he found a subpoena from the OTS requesting copies of any information he might obtain, at any time, from employees of the Farmers' Bank.

Discuss and resolve all issues.