Chapter 20
Chapter 20 Case Hypothetical The law firm of Poe, Patterson and Henderson, a general partnership, represents 20 plaintiffs in a class-action product liability lawsuit, with trial scheduled to begin Monday of next week. It will be the biggest trial in the history of the firm, and the partners understand that success will depend, for the most part, on a collaborative effort on the part of all professionals at the firm, including partners, associate attorneys, paralegals, and secretarial staff. It is the Friday before the trail, and there will be no weekend for those working at Poe, Patterson and Henderson. The partners and the associate attorneys are reviewing depositions in the conference room. The clock on the wall shows 11:00 p.m. Partner Henderson turns to a first-year associate, J. Benjamin Fotheringham, and says “Ben, how about going to Donovan’s Delicatessen and picking up a few subs for all of us? Here’s $100.” Donovan’s Delicatessen is a favorite of the firm for “late-night” trial preparation sustenance, and is located approximately two miles away, down Chestnut Avenue. Eager to make a positive impression on senior partner Henderson, and ready to escape the “tunnel-vision” brought on by twelve hours of deposition review, Ben heads for his car. In a rush to complete the “deli run” quickly, Ben accelerates his car to 50 miles per hour. The posted speed limit on Chestnut Avenue is 35 miles per hour. Fidgeting with his compact disc player in order to listen to an audio-recorded deposition, Ben inadvertently crosses the center line and collides with an oncoming automobile operated by Brandi Kernigan. Ms. Kernigan is severely injured, and experiences $22,000 in medical expenses; her $25,000 Volkswagen is a total loss. She sues Fotheringham individually, and the law firm partnership of Poe, Patterson and Henderson. Kernigan also lists Poe, Patterson and Henderson as individual defendants. Is the law firm of Poe, Patterson and Henderson liable for Brandi Kernigan’s injuries? Are Poe, Patterson and Henderson individually liable for Kernigan’s injuries?
Chapter 20 Case Hypothetical and Ethical Dilemma Jonathan A. Jacobs has worked diligently all of his life, saved every penny he could, and is now worth an estimated $2 million. Advanced in his years (he is now seventy-nine years old), Jonathan recently executed a general power attorney naming his son, Willard T. Jacobs, as his “attorney-in-fact” (an attorney-in-fact is the agent named in a power of attorney relationship.) Jonathan has recently been dating Mildred Eubanks, who is fifty-seven years old. Concerned that Mildred is a “gold-digger” and that she will abscond with the majority (if not all) of his father’s wealth, Willard created a trust, with the “corpus” (body) of the trust amounting to $1.75 million (the majority of his father’s wealth.) Willard named himself as the trustee, and he designated his two children (Jonathan’s grandchildren), Tobias and Heather, as co-beneficiaries of the trust. When he created the trust, Willard did not notify his father. Upon discovering the existence of the trust, Jonathan became furious. “How dare you go behind my back and steal my money. I worked hard for that money, it is mine, and I have the right to decide what to do with it. If I choose to give all of the money to my dear friend Mildred, that is my decision!” In exercising the general power of attorney, did Willard T. Jacobs act appropriately? Upon Jonathan A. Jacobs’s request, should a court invalidate the trust?
Chapter 20 Case Hypothetical and Ethical Dilemma Maximillian Snell is having a very bad Monday at his “pre-owned” car dealership, Maximillian Motors. Known county-wide for his “eye-catching” (some would say obnoxious) television advertisements (with staged customers proclaiming “Thanks a million, Maximillian!”) Snell is having a difficult time attracting and retaining an effective and reliable sales staff; in fact, not a single salesperson has appeared for work on Monday. The only employee who does shows up for work that day is his secretary of three years, Daisy Martinez, whose responsibilities include processing “tax, title and tag” paperwork after the sale. Business is slow that Monday, with only two “window shoppers” appearing on the lot from 8:00 a.m. to 2:00 p.m. Famished, and eager to try out the new Italian restaurant down the street, Snell instructs Martinez to tell any prospective customers he will return at 3:30 p.m. When Snell returns at 3:30, he asks Martinez whether any potential customers visited the lot in his absence. Daisy beams with pride, and says “why yes, Max, there was a young couple who came by right after you left. They wanted to buy that red BMW sedan on the front row, and I knew business was slow, so I went ahead and sold it to them. The contract is here on my desk. Aren’t you proud of me?!” Curious, Maximillian examines the contract. It describes the red BMW sedan, and includes the signatures of both purchasers, as well as Daisy’s signature (indicating “Daisy Martinez, for Maximillian Motors.”) The contract price is $21,000. Maximillian’s face reddens as he heads for the car inventory purchase price records on his computer. Computer records reflect that he purchased the car at auction last Wednesday for $28,000, and that his established retail price for the car was $31,000. When he confronts Daisy with the facts, she bursts into tears, saying “please boss, don’t fire me, I’ve made a terrible mistake!” Daisy is inconsolable, but that is irrelevant to Snell; he is not exactly in the mood for consoling. Through her tears, Daisy indicates that the couple will return at 5:30 p.m. to take possession and ownership of the car; they have gone to their bank to retain the $21,000. Is Snell legally obligated to sell the car to the couple? From an ethical standpoint, should the couple agree to pay at least Snell’s cost for the car ($28,000?)
Chapter 20 Case Hypothetical Robert “Red” Newman, attorney-at-law, just attended a pretrial conference for a trial scheduled to begin next week. The case, Effingham v. Atwater, involves his client, Jessica Effingham. On September 8, 2009, Jessica sustained serious injuries in automobile accident when a car driven by Harvey Atwater (the defendant) struck her car from behind. Jessica sustained permanent partial disability as a result of the accident, and Red believes the case is worth $250,000 for his client’s permanent partial disability, pain and suffering, medical expenses, and other compensatory/consequential damages. During the pretrial conference, Atwater’s defense counsel, Gunner Vader, offered the plaintiff $20,000 in full and final settlement of the Effingham v. Atwater litigation. Attorney Vader proclaimed that $20,000 was all of the settlement authority he had, and his client would not pay a penny more to settle the case. Judge Clarence Ginsburg strongly recommended that the plaintiff take the $20,000 settlement offer, but Red considered the “low-ball” offer to be a personal insult as well as an affront to his client, and he immediately rejected the offer. In rejecting the offer, did Robert “Red” Newman violate his professional duty as his client’s agent?
Introduction to Agency Law
Creation of Agency Relationship
Requirements for “Agency By Ratification”
Agency Relationships
Employee or Independent Contractor?
Principal’s Duties To Agent
Agent’s Duties To Principal
Principal’s Rights and Remedies Against Agent
Agent’s Rights and Remedies Against Principal
Authority of the Agent: The Link to the Principal’s Liability
Authority of Agent and Liability of Principal
Contractual Liability of Principal and Agent For Authorized Agent Acts
Contractual Liability of Principal and Agent for Unauthorized Agent Acts
Tort Liability and the Agency Relationship
Questions Regarding “Course and Scope” of Employment
Principal’s Liability and the Independent Contractor
Termination of the Agency Relationship
Notice of Termination of Agency Relationship
Termination of Agency Relationship
Agency Coupled with an Interest
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