There is one question. In answering it, remember that I do not want, and will not give credit for, a general discussion of the law. Rather, your exam should reflect a discussion of the relevant rules and principles in the context of the given facts. Restrict yourself, to the extent possible, to the facts given. If additional facts are needed to resolve the existing issues, state what they are and why, but do not change the facts.

Please write or type legibly. You do not need to use a blue-book. Make sure that only your final exam number (and not your name) appears on your exam and answer.

Turn in your question sheet along with your answer. Number the pages of your answer, and if available, include a printout from your computer of the number of words in your answer. Turn in your declaration of compliance along with your exam. Items should be submitted in the following order: Exam answer on top, declaration of compliance next, exam question sheet last.

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Laura Lawya, a solo practitioner attorney in a medium size community, has had an interesting and difficult last six months. Last September, Laura was in the process of representing Harry Husban in a divorce. Harry’s wife, Wanda, had her own attorney. During conversations with Harry (who was in the construction business) regarding assets, income and earning capacity, he confided in Laura that he had AIDS. He told Laura that Wanda did not know about this, and he did not want her to find out. At the moment, the disease was under control, although the medication he was taking made him nauseous and weak.

Harry explained that he believed he had contracted the disease during a homosexual affair about a year or so earlier, and that because of other medical issues, the disease had progressed more quickly than usual. He believed that Wanda may have been exposed to the virus when they had unprotected sexual relations after he was exposed but before he knew he was infected. They had sexual relations infrequently thereafter and used protection, ostensibly for purposes of birth control. Their recent sexual activity had been very limited, partly in light of their marital difficulties. Harry believed that, if Wanda was infected, she was unlikely to transmit the disease to anyone else since she was not a very "sexual" person. Laura was troubled by this disclosure but decided not to do anything about it. Because there were no children or maintenance (alimony) involved and because this was a true no-fault jurisdiction and the property settlement was fairly straightforward, Harry’s hope that this information would not really matter in the divorce was correct. Harry and Wanda’s divorce, which was generally amicable, became final at the end of November.

Also in September, a new law became effective that requires contemporaneous notarization of witness signatures on all wills executed in this jurisdiction. Under the new law, all witnesses must sign in the presence of the testator and all other witnesses, and all signatures must be notarized immediately upon signing. Failure to follow the terms of the statute precisely will lead to invalidity of wills that are improperly executed. Laura was aware of the new law and told Sally Seck, her secretary, that there were some changes she needed to learn. Laura sat down with Sally and carefully explained the new requirements since Sally often saw to the actual execution of wills and the signing by witnesses after Laura went over the contents with the testator.

In October, Laura was approached by Fran Frend, a close friend of her family, to prepare a will. Although Fran, who was 56 and had been in generally good health, had substantial assets, she had put off writing a will. However, after a brush with chest pains (the origin of which was never fully determined), she realized a will was necessary. Laura spent considerable time talking with Fran to determine her wishes and spent a lot of additional time drafting the will and working on tax matters because they were somewhat complicated. Fran wanted to leave very little to her natural children, with whom she had almost no relationship, and wanted to leave most of her large estate to her two step-children, whom she had never adopted but with whom she was very close. Laura completed the will, doing a very competent job. She fully explained the document to Fran and then handed it over to Sally to have it signed and witnessed. Laura charged Fran considerably less than she normally would have charged since Fran was a good friend.

In November, Laura, whose practice had really taken off and who was very busy, finally acknowledged that she needed help and hired Arthur Allen, who had recently graduated from law school and passed the Bar, as an associate. Arthur had worked while in law school as a law clerk for the State Housing Department. The Department had oversight of public housing agencies in the state and also was responsible for drafting and enforcement of regulations relating to private landlords. In furtherance of that role, Arthur worked on drafting regulations to implement a statute that had recently been passed by the state legislature that was designed to protect tenants from landlords who wrongfully withheld security deposits. Pursuant to the statute, any landlord who did not promptly return a security deposit upon timely and proper demand was liable to the tenant for treble damages unless the landlord could clearly document an appropriate basis for withholding the deposit. The regulations were necessary to implement the broad language of the statute, which was to go into effect (along with the regulations) on January 1^st.

Arthur had stayed on at the Housing Department pending receipt of his bar results. He joined Laura’s firm on November 29^th, shortly after being sworn in as an attorney, and immediately began working on matters in the office. His office was next to Laura’s, and she frequently kept her door open, as did he. About a month after starting work, he overheard Laura on a phone conversation. It appeared that she was talking to a client who was trying to find out how she could go about getting her fairly substantial security deposit back from her landlord. It seems that Tonya Tenant, the client, had rented a very nice luxury townhouse apartment for two years but was moving out at the end of December when her lease expired. Laura was representing Tonya in the purchase of a home she was having built. (Tonya was planning to move in with her mother until the house was complete.) Laura had drafted the contract for purchase and had helped Tonya negotiate a good loan with the bank. The bank had its own lawyer handling the closing but Tonya wanted Laura to stay involved and make sure everything went OK with the completion of the construction and the finalization of the purchase.

From the conversation, Arthur was able to determine that Tonya was worried because she had an indication that the landlord would not return her substantial security deposit once she moved out. When Laura hung up the phone, Arthur went into her office to see if he understood the situation. Laura explained what had transpired in the conversation and indicated she needed to check the law. Arthur told her not to bother -- that he was an expert on this and that they were in luck. He told her about the new statute and regulations, which provided that, if Tonya sent the landlord or his agent a thirty day demand and they did not respond within 15 days after the end of the thirty-day period, Tonya could commence suit in Small Claims Court for three times the amount of the security deposit. The provision had been added to a complex real estate statute at the last minute and few people knew about it. Arthur thought that, if they sent the demand letter to the agent, it would probably take a month before it even got forwarded to the landlord (who likely wouldn't realize that time was of the essence) and Tonya might well be the beneficiary of treble damages, just in time for closing. Arthur offered to write the demand letter, but Laura felt uncomfortable having him do so given his work for the state. On January 3^rd, three days after Tonya moved out, Laura drafted a letter for Tonya's signature, had her sign it, and mailed it to the landlord’s agent.

Meanwhile, Laura began to worry about something else Tonya had told her. Tonya mentioned to Laura that she had been laid off from her well-paying second job. Laura believed that, pursuant to the loan agreement she had signed, Tonya had a duty to disclose any significant change in circumstances to the bank before the closing. In Laura's opinion, Tonya losing her second job constituted such a change. When Tonya came in to sign the letter, she raised the issue with her. Tonya indicated that there would be no problem because she would have a new job by then. She already had several interviews and was sure there would be no problem, so Laura stopped worrying and got back to her busy practice.

Around this time, in early January, Laura discovered that Sally was not properly following the new statute regarding execution of wills. She immediately contacted those clients whose wills had been executed since September to come in and re-execute their wills, but did not contact Fran, who was out of town visiting one of her stepdaughters, since she expected to see her in March and decided to take care of it then.

February was an interesting month. First, Carla Contracta, a regular client of Laura’s (and one of her few regular business clients) approached Laura with a problem. She had contracted to do a very large remodeling job on a country home and the client backed out. It was the biggest single job that Carla had ever contracted, and she was very angry and disappointed and wanted to sue. She discussed the matter with Laura, telling her she believed that she had rights under the contract that could be enforced. The contract had been prepared by Carla’s previous attorney, so Laura was unable to give her immediate advice. She agreed to look over the contract, and Carla dropped it off. In reading it over, Laura discovered that the other party to the contract was Harry Husban. In light of her prior involvement with Harry, Laura gave the matter to Arthur to handle.

Construction on Tonya's new home was just about completed by mid-February and the closing on the house was scheduled for later in the month. It had also been 45 days since the demand letter had been sent to the landlord’s agent and no response had been received. Under the law, Tonya was now entitled to $7500 (three times the $2500 security deposit the landlord had withheld). Unfortunately, the small claims proceeding would take longer than a week and Tonya needed the money for the closing. She still had not gotten a new job, but told Laura she had had an excellent interview last week, was told she was a virtual shoe-in for the position, and expected to hear favorably about the job any day.

The day before the closing was scheduled, Tonya met with Laura. Tonya told her that there had been some delay in getting hiring approvals at the company at which she expected to be hired but that the matter should be resolved by the next day. Tonya was confident she would have the job before the closing. But she had another problem. She had planned to borrow $3000 from her mother for the closing (in part to make up for the security deposit that had not been returned), but her mother's stocks had taken a nose dive and she didn't have the liquid funds to give her for the loan. She asked Laura if she thought the bank would give her a $3000 short term loan, given that she would be receiving $7500 from the landlord in the very near future. Laura did not want to complicate the closing transaction, so she offered to loan Tonya the $3000 she needed. Tonya agreed and Laura drafted a document obligating Tonya to pay Laura the $3000 within five days of receipt of any recovery from the landlord or within 90 days of the date of the agreement, whichever came earlier. Both women signed the document and Laura gave Tonya a check for $3000 from her personal bank account, which Tonya took to her bank and cashed.

The following day was set for the closing. Unfortunately, it got pushed back into the afternoon and Laura was scheduled to be in court. Tonya agreed to have Arthur appear with her at the closing. Laura, who was in a hurry to get to court, gave Arthur the file and asked him to cover the closing. She was confident in his ability to do so because they had done a similar closing together a week before and this was expected to be fairly straightforward. Laura forgot to tell Arthur, however, about Tonya's job situation and about the need to make sure that she disclosed her new job (which Laura expected would be finalized by then) in place of the old one she had listed on the original application.

Arthur accompanied Tonya to the closing. There were lots of documents to go over, and Arthur explained each one to Tonya briefly before she signed. One document required her to review her loan application and affirm that there had been no material changes in the information since that time. Tonya signed the document as part of the closing. She did not reveal that she had been laid off from her second job nor the fact that she had not secured a new position. Arthur was unaware of this fact. All documents were executed and the closing was completed.

It has been a month since the closing occurred. Three days after the closing, Tonya went to Small Claims Court with a pleading prepared by Arthur to recover $7500 from the landlord. The landlord paid a judgment last week and Tonya called the office to tell Laura how pleased she was with the way things had worked out. She also had some bad news. She had not gotten the job she expected (apparently she had not really been laid off; she had been fired because the company was unsatisfied with her work, and, as a result, she was having trouble getting comparable employment). She told Laura she couldn't pay the loan back right now even though she had received the money from the landlord since, in light of the fact that she was still looking for a second job, she needed the money to pay the mortgage on her new house. Tonya didn't know when she would be able to pay Laura back and appeared very apologetic. Needless to say, Laura was upset. She became even more upset when, concerned about this development, she looked in Tonya's file and discovered that Tonya had signed the form indicating no substantial change in circumstances at the time of the closing without disclosing that she had lost her lucrative second job.

Before she could think more about it, however, Laura received a phone call from Fran Frend’s oldest stepdaughter. Fran had just suffered a massive heart attack and died. Laura was upset at Fran’s death and became even more upset when she realized that Fran’s will had not yet been re-executed. As a result, the will is likely invalid, and Fran’s natural children will get everything. Fran’s stepchildren will get nothing, and Laura will lose the $10,000 bequest that she was to receive.

While Laura was just beginning to recover from the news of Fran’s death, Wanda (formally Husban, now) Walters appeared at Laura’s office with Bob Bowe, her fiancé. It seems they recently met and it was love at first sight. They have decided to marry and want Laura to prepare a prenuptial agreement.

Discuss all professional responsibility issues arising from these facts. Where issues have been raised but left unresolved, be sure to address the possible resolution(s). Feel free to discuss both proper as well as potentially inappropriate or improper lawyering behavior.

Note: There is no law in this jurisdiction creating any special obligations with regard to the reporting of AIDS.