Civil Procedure Exam Spring 2000: Disputes over Contracts and Discovery of Information, Exams of Civil procedure

Download Civil Procedure Exam Spring 2000: Disputes over Contracts and Discovery of Information and more Exams Civil procedure in PDF only on Docsity! . ... Examination Number THE UNIVERSITY OF DAYTON SCHOOL Or LAW CIVIL PROCEDURE FINAL EXAMINAnON Tuesday ~y 9, 2000 9:00a.m. r 1:15p.m. Professor Richard Perna INSTRUCnONS PJace your examjnation number on the top of this page in the space provided. In addition, pJace your examination number on any bluebook you use to answer .examination. Write all your answers to this exam in the bluebooks provided. If you need to use mo than one (1) bluebook, you may. Use ink (or type) only, no pencils. Please write legibly. I cannot correct your exam ifl cannot read it. This is an open book exam. You may bring into the examina~on room your casebook and casebook supplement. In addition, you may bring in any other self-prepafed material(s). This examination has four questions, each with muhiple partso&e sure to answer all four and all of the parts of each. The point value of each question and part co sponds to the suggested time you should spend answering each. Your time should be allocated as full ws: Question I Part A -20 minutes Part B -20 minutes Part C -10 minutes Question Part A -25 minutes Part B -25 minutes Question ill Part A -40 minutes Part B -15 minutes Part C -15 minutes Question IV Part A -35 minutes Part B-1 0 minutes Part C -20 minutes. All four questions should be completed in a total of235 minutes (appro' tely four hours). You will have four hours and fifteen minutes to complete the exam. Budget yo time accordingly. I suggest you read the entire exam before beginning to answer any question. e sure to THINK carefully about each question ~ beginning to write. Remember, you are be' graded on the QUALITY of your answer, not on quantity. Please answer each question (not each p ) in separate bluebooks. There are ten (10) pages (not including these cover sheets) in t~ examination. Exam begins on next page. . Civil Procedure Exam Spring 2000 Professor Perna Page 3 of 10 QUESTION II Italo Ladi ("Ladi") is the former operator of ' 'Villa Ladi", restaurant and lounge in Philadelphia ("restaurant"). The final day of the restaurant's 0 ration was in December of 1998, when it burned to the ground as the resuh of fire of unknown origin. Luckily, years before the fire, Ladi purchased a policy of general' sk insurance from the South Philadelphia Casualty Co. (the "insurance company") that cluded coverage for damage and loss from fire. The events subsequent to the fire are disputed, but Ladi lieves that he filed a damage and loss claim with the insurance company pursuant to e terms of the policy. The insurance company claims that Ladi failed to correctly invok the claims procedure and that as a result, they have no obligation under the policy to p y for the fire damage and loss. In addition, the insurance company asserts that there is obligation to pay because of an "arson" exclusion clause in the contract. Ladi sued the insurance company in Federal District CO ~ in Philadelphia, alleging a breach of the contract of insurance due to the failure to pay for the fire damage to his business. The insurance company filed a timely Answer ifically denying all of the factual allegations contained in the Complaint. The parties then engaged in a prolonged period of discovi ry. In reviewing their case, Ladi's attorneys have recently concluded that they have su lcient evidence to pursue a tort claim against the insurance company based upon tb "bad faith" denial of the insurance claim. Ladi's attorneys assume that the insurance c mpany will object to any attempt to amend the original Complaint to add the "bad fait "tort claim. Part A. (25 minutes) Can Ladi's attorneys amend their original Complaint tO j add a bad faith insurance tort claim? Explain Fully. In answering, the follow ng mayor may not be relevant to your answer: 1. The parties stipulate and agree that the tort cia ° and contract claim are both governed by different statutes of °mitations. The limitations period for the contract action is six ars while the limitations period for "bad faith" insurance to is six months. The parties stipulate and agree that the original omplaint was filed before either of the limitations periods had pired. 2. Civil Procedure Exam Spring 2000 Professor Perna Page 4 of 10 3. The parties stipulate and agree that the statute of limitations on the "bad faith" tort claim has now expired. I Assume for purposes of the remainder of this question t t Ladi's attorneys were unable to amend the original Complaint to add the tort claim. the trial approaches, the proceedings have been abruptly hahed by the bankruptcy 0 f the efendant insurance company. The insurance company's financial difficulties have °ggered the Pennsylvania Insurer's Insolvency Fund Act (the "Act"). That ct creates a mechanism to redress harm to insurance claimants resulting from the insolve cyofPennsylvania insurance companies. The scheme is really quite simple. The Act creates a poo ed fund ("fund") to pay the insurance claims made against insolvent Pennsylvania ins ce companies. In a case like this, the fund steps into the shoes of the bankrupt insur ce company with respect to all contractual claims obligations. Thus, in this case,' is undisputed that if the insurance company is insolvent and is ultimately found liable un er the insurance policy for damages resulting from the fire, the fund has a statutory obli ation to pay the claim. The defendant insurance company is considering filing f otion with the Court to dismiss the action because of plaintiff's failure to join the fund a party defendant. We can assume that Plaintiff Ladi will oppose the Motion. Part B. (25 minutes) Assume that the defendant files a Motion to Dismiss for Failu i of the Plaintiff to Join the Fund as a Defendant in the Action. How should the Court rule on the Motion? Explain fully. In answering, the following may or may not be elevant: 1 Both parties agree and stipulate that the ourt will not have and can not acquire jurisdiction over the fun and it cannot be made a party to the existing lawsuit in Federal iftrict Court. However, the Pennsylvania state courts ill have jurisdiction over the fund as well as over the defen t insurance company. Both parties agree that the insurance co any is truly insolvent and does not have the money to satisfy award of damages in favor of Lad;' 2. END OF QUESTION n Civil Procedure Exam Spring 2000 Professor Perna Page 5 of 10 QUESTION III Western Minerals ("Western") and Fenton Industries ("F nton") are embroiled in a contract dispute over the sale of low sulfur coal by Western to enton. Western is an Oregon corporation (incorporated in Oregon) engaged in the bus egg of surface mining of low sulfur coal. It owns and operates mines in a number ofw stem States. Western's largest and most productive mine is in Decker, Montana. The c rate offices of Western are located in Eugene, Oregon. Fenton is a privately held Delaware corporation (incorpo ated in Delaware) engaged in the business of generating and selling electric power oughOut the states of Illinois, Indiana and Wisconsin. It owns and operates a number f generating plants within that tri-state area and its sale of electricity is restricted to t same tri-state area. Fenton's corporate offices are located in Chicago, Illinois. In 1984, the parties signed a long-tenn contract (20 years pursuant to which Western agreed to supply coal to Fenton in quantities specified' the contract. The contract expressly required Western to supply coal to Fenton fro its Decker, Montana plant because of its particularly low sulfur content. For nine ye , Western shipped only coal from the Montana mine. In 1993, the parties expressly mod fled the contract to allow Western to ship Wyoming coal in addition to Montana co .Both the original and modified contract called for delivery of the coal F .O.B. at the M ntana mine in Decker. (Delivery F .O.B. the Montana mine means that Fenton accepts t e coal when it is placed in the railroad cars for shipment at the Montana mine. Once the oal is placed in the railroad cars, Western relinquishes all responsibility for the coal d Fenton assumes all responsibility for the delivery of the coal). The coal delivered der the contract was shipped by rail from the Decker mine to Fenton's generating pI 1s in Illinois and Indiana. In May of 1999, Fenton refused to accept any additional oat and attempted to cancel the contract pursuant to a contractual provision that allow Fenton to excuse performance upon the occurrence of certain events. Fenton cia. that structural damage to its Illinois plant and a cracked turbine motor in the Indiana p t is sufficient to allow for cancellation of the contract under its express terms. Western disagrees and alleges that Fenton is in breach of its contractual obligation to purchase e coal and that it has been damaged in an amount in excess of 1.3 million dollars. Civil Procedure Exam Spring 2000 Professor Perna Page 8 of 10 QUESTION IV In 1996, the United States Congress authorized a 24 milli n dollar expenditure to build a new health care facility in Ohio. The money was approp .ted to the Department of the Interior ("DOl"). The DOl had general oversight responsi ilities for the construction of the project. Work on the project was divided int two phases: site preparation (phase I) and actual construction of the building (P se ll). Ten companies bid on Phase I and the Phase I contract was awarded to the lowe bidder, Crane Construction ("Crane"). The contract was for $500,000 and s ified that both time and cost containment were of the essence. From the start, Phase I work was substantially delayed as a result, completion of Phase I was delayed for six month. Those delays and other pf blems resulted in cost overruns of approximately $250,000. Soon after the work on P I was completed, DOl requested bids on Phase II of the project and Crane was aga the lowest bidder. However, DOl refused to award the Phase II contract to them be ause of the delays and cost overruns of Phase I. On August 12, 1998, Crane filed suit against the DOl in e Federal District Court for the Southern District of New York (located in New York crt ) contesting the award of the Phase II contract. Their clainl was grounded in the Feder Contracting Act (the "Act") which is a federal law governing federal contracting. D defended by specifically denying the allegations of the Complaint and by rais g a number of defenses pursuant to the Act. The parties engaged in discovery over the n xt six months. In February of 1999, DOl filed with the Court a Motion r Summary Judgment. In the Motion, DOl argued that it was justified in refusing to aw d the Phase II contract to Crane because of the delays and cost overruns in Phase I. In pport of its Motion, DOl relied on certain provisions of the Act that specifically au rize federal agencies to exclude certain bidders ftom consideration. Specifically, the Ac allows an agency to refuse to grant contracts to any bidder "with a history of poor pe formance on prior government contracts when that poor performance is the result factors within the exclusive control of the contractor ". Attached to the Defendant's Motion were three affidavit of the three DOl bureaucrats responsible for administering the Phase I contract. ogether, these affidavits alleged that the delays and cost overruns of Phase I resulted fro Crane's failure to keep its equipment in proper working order and that Crane was guilty of poor on-site management, both conditions within the exclusive control ofCr e. Civil Procedure Exam Spring 2000 Professor Perna Page 9 of 10 In response, Crane filed a Memorandum of Law in Oppo ition to the Defendant's Motion for Swnmary Judgment. In that Memorandum of Law, fane alleged that it properly managed the work of Phase I. In addition, the Memor dum argued that the delays and cost overruns in Phase I resulted from bad weather, eliable suppliers and the vague specifications of the contract. In support of its argume is in its Memorandum, Crane cites paragraphs 15 through 30 of its Complaint alleging t the work of Phase I was properly managed and that any delays and/or cost overruns suIted from bad weather, unreliable suppliers and the vague specifications of the ntract. At oral argument on the Motion, both parties agreed that p Act is the controlling law in the case. Despite that admission, Crane still argued that S judgment was inappropriate. DOl argued to the contrary that Swnmary Judgm nt in its favor should be granted. On January 5, 2000, the District Court entered an Order ing summary judgment in favor of DOl and against the plaintiff and entered ju gment accordingly. Crane immediately met with its attorney, Legal Eagle ("Eagle") discuss the possibility of an appeal. Eagle told Crane that he thought that there was no hance of reversing the grant of summary judgment and advised against an appeal. Crall followed Eagle's advice and did not appeal. Part A. (35 minutes) Assume that Crane had consulted you instead of Eagle~ determine if there were grounds to appeal the grant of summary judgment in fav 0/ DOL Was the District Court's grant of summary judgment/or the defendant roper? Explain/ully. Shortly after his meeting with Crane, Eagle sent his bill t4 r professional services in the amount of$150,OOO. Outraged over the amount of the bil Crane consulted another attorney who told them that they should have never lost he DOl case and that they certainly should have filed an appeal from the District Co's decision. In light of this information, Crane refused to pay Eagle's bill because they h that Eagle had "botched" the DOl case. Because of Crane's refusal to pay Eagle's bill, Eagle filet uit in Federal District Court against Crane seeking to recover the unpaid legal fees of$ 50,000. (Eagle v. Crane) Although properly served with the Complaint, Crane fail to respond to the Civil Procedure Exam Spring 2000 Professor Perna Page 10 of 10 . Complaint as required by the Federal Rules of Civil Procedure (' FRCP") and as a result, the District Court entered judgment by default pursuant o FRCP 55 against the defendant Crane and in favor of Plaintiff Eagle. Four months after the entry of default judgment in Eagle~ Crane, Crane filed a separate suit in Federal District Court against Eagle. (Crane v. E gle) The Complaint pled two claims. In the first claim, Crane alleged that Eagle committ d legal malpractice in his negligent handling of the DOl case, specifically his handling Dfthe Summary Judgment Motion and his advice not to pursue an appeal. In the ;econd claim, Crane alleged that Eagle slandered Crane by spreading false and viciou:; lies about Crane's refusal to pay Eagle's legal bill. Before responding to the Comp]aint, Eagle seeks your advice as a recognized expert in Civil Procedure. Part B. (10 minutes) Eagle feels that he should not have to defend the Slandt claim and the malpractice claim in the same lawsuit. Can Eagle have the sla der action dismissed as inappropriately joined in the same lawsuit? Explain fully. Part C. (20 minutes) Eagle also believes that he should not have to defend th, all. He is hoping that as a procedure expert you will see a proc~ dismissal of the malpractice claim. What procedural argumem on Eagle's behalf to have the malpractice claim dismissed? & ~ malPraCtiCe claim at dural argument for , if any, can you make lain fully. END OF QUESTION IV AND END OF THE E~INATION