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It is understood by the student whose Student Number is entered below that this examination is given and the student's response is made and submitted pursuant to the conditions of the Honor Code.


Student Exam No. ______________




Law #512C                                                                          Professor Levit

Torts II                                                                     Winter Semester, 1996


     (3 hours)   


Materials that may be used during examination: You may use your casebook, any supplementary materials handed out for class, and any outlines or notes you yourself have prepared, in whole or in part.  You may not use commercially prepared outlines or hornbooks. 



1.  Read each question carefully and pay close attention to the facts and to what the question is asking you to do.  Discuss all issues presented by a question. Remember to argue issues both ways.  Do not engage in a discussion of issues not raised.


2.  I have included all of the facts I think you will need to answer the questions.  If a necessary fact is missing, please identify it in your answer and explain how it affects your conclusion.


3.  Nothing is intentionally ambiguous.  If anything about a question appears to be ambiguous, decide what you think is meant, tell me what you think is meant, and answer the question accordingly.  No reasonable resolution of an ambiguity will be penalized.


4.  Please write legibly, because I can only give credit if I understand what you write.

I can also only give credit for answers that are written in the bluebook.


5. Think before you write.  Organize your answer.  You get extra points for clarity and succinctness.  You are penalized for an answer which is disorganized and confusing.


6. The applicable law is the law of this State, the State of Elation, which consists of all cases in your casebook and any cases discussed in class.


7. This exam consists of 4 pages.  TURN IN THIS EXAMINATION WITH YOUR BLUE BOOKS.  Good luck!

                                                        Question 1



Ace Acton has worked as an investment advisor for the “Big Seven” accounting firm of Earnest & Younger for five years. He has an MBA, has passed the Uniform Certified Public Accountant’s Exam, and is a member of the American Institute of Certified Public Accountants. Among the 100 or so individual accounts that Action supervised were those of clients, Catherine (“Cat”) Ballou and Kennedy (“Kid”) Shalleen.  Ballou is an elderly woman, who used to train and show horses. She has suffered for years from a degenerative kidney disease.   Shalleen is a high strung, sensitive young man who engages in some obsessive behaviors such as frequent handwashing and counting the number of steps he takes when walking anywhere. Acton and Shalleen went to college together, so Acton has seen Shalleen exhibit these bizarre behaviors.  Acton even knows about the time Shalleen “went off” and spray-painted the walls of the dormitory because the cleaning people had forgotten to change his sheets.


By written agreement signed by each of these two clients, Earnest & Younger was given full discretionary authority over all investment decisions regarding the clients’ accounts.  With respect to each of these clients’ accounts, Acton was supposed to make sensible investment decisions in accordance with the individual client’s stated objective and assure that all payments required by governmental agencies were properly computed and paid.  On the investment goals line of the agreement,  Ballou indicated a desire for protection of her principal with secure, stable investments, while Shalleen stated that he wanted “the best possible return” on his investments. 


Interested in obtaining a larger commission on his accounts, and in the hopes of significant profits for himself and his clients, Acton “borrowed” the entire $500,000 that was in Ballou’s account to invest for himself in a get-rich-quick scheme, intending to repay it immediately with a profit to her.  Before taking this action, Acton went out to lunch with his senior partner, Simon Perry, whose bonuses depend on the account activity and profits of the junior partners he supervises. During lunch Acton told Perry what he planned to do.  Perry did not say much during the conversation other than “Be careful, now. Don’t do anything illegal.”  Unfortunately, the scheme was a bust, and Acton lost all of Ballou’s money, wiping out her entire life savings.  She is now struggling to pay her portion of the insurance co-payment for  kidney dialysis and thinks that even if a matching kidney is found for organ donation, she will be unable to afford the surgery.


Regarding Shalleen’s account, Acton invested in some risky investments and placed much of Shalleen’s money in a somewhat shady lending company. Shalleen has not lost a dime, but his accounts have been changed from standard stock and mutual funds investments to a portfolio of loans.  When Shalleen received his account activity report, he called Acton and angrily informed him that he could not stand the possibility of a bad return.  Acton reminded Shalleen that he wanted the “best possible return.”  “How can it be the best possible return if I stand to lose everything?” Shalleen yelled.  As a result, Shalleen has become  emotionally incapable of dealing with money.  He breaks out in a sweat when he has to make change or put coins in parking meters. Three weeks after receiving his account activity report, Shalleen brings a gun to the office of Earnest & Young and shoots a secretary, Zachary Terry, seriously injuring him.  Terry was going to be married the next day to his fiancé of seven years, Feona Antsi.  Fe, who worked as a bookkeeper for Earnest & Younger, heard the commotion, and came out of her office in time to see him carried away on a stretcher. Fe, of course, is an emotional wreck.


Several months prior to the Ballou and Shalleen fiasco, two former clients of Acton had filed complaints with the state prosecutor’s office about his deceptive handling of their accounts.  Since there were two similar complaints, the prosecutor, Gillian Garcetti,  had asked one of her investigators  to look into it.  The investigator submitted a report substantiating that the allegations looked like questionable practices, and recommended filing charges.  Garcetti, who believed in color-coded filing (red for cases not to pursue, yellow for those on hold while further investigation conducted, and green for the cases which were “go”) misfiled the investigator’s report in the red drawer rather than the green drawer, and thus did not pursue the cases. She discovered this mistake only when the Acton embezzlement and Shalleen homicide cases were brought to her office.


DIRECTIONS: Discuss all possible torts and defenses for named parties only.  Ignore possible workers compensation defenses and anything other than the tort principles we discussed this semester. There are no arbitration agreements involved.



Question 2




In 1995, Van Court Publishing Company, Inc., published Jennifer Victor’s book, Satanic Panic: The Creation of a Contemporary Legend.  The book purports to be an expose of the claims made by persons who believe they have been victimized by Satanic cults.  The book recounts various individuals’ reactions to accusations of ritual abuse and clearly favors the accused abusers over the alleged victims of ritual abuse claims.   The thesis of the book is that Satanic ritual abuse does not in reality occur (or at least not in large scale), and that accusations of such abuse are largely unfounded, having been influenced by rumor, panic, contemporary legend, and improper and suggestive investigative techniques.  The book includes “research,” “data,” and copious footnotes, but its general tenor is not of an objective piece of journalism.  It is clearly intended as a propaganda piece.


 In a section of the book entitled “The Career of a Moral Crusader,” Victor discusses social worker Noel Howard, as a “consultant” for cases of sexual abuse.  The book states that Howard supports his claims with “so-called Satanic cult ritual abuse diagnostic indicators and other pseudo-scientific propaganda materials.”  In other passages of the book, Victor states that “sometimes moral crusades can turn into witch hunts” and that “crusaders are likely to assume that those accused are guilty.”  In describing a series of training seminars, the book states: “It was as these conferences that Howard made the infamous allegation about babies being cooked by Satanists in microwave ovens.”   During a speech at a training conference, Howard actually had said, “There are reports about Satanists in the eighteenth and nineteenth centuries boiling babies.”  He then added jokingly, “Perhaps modern-day Satanists will adapt to their time and use modern technology, like microwaves?”  Before writing the book, Victor, thinking it would be futile, did not try to arrange an interview with Howard himself.


DIRECTIONS: Howard is concerned that Satanic Panic falsely accuses him of fomenting unsubstantiated child abuse accusations.  Evaluate Howard’s claims and any possible defenses.



             THE END







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