Celebrating 10 years! 2007-2017

real case that sounds like a bar exam hypo

Just got in a case that could easily be used to test contrac orange904/17/17
Not enough information. Client stopped paying "what" wh jeffm04/17/17
I left out facts intentionally just to give the bare bones o orange904/17/17
Sounds like it could be an interesting case. Client hopefull jeffm04/18/17
orange9 (Apr 17, 2017 - 10:14 pm)

Just got in a case that could easily be used to test contracts, biz orgs, ethics, property, torts, and of course, civ pro.

A lawyer went into a business with a former client. They formed various LLCs to run their businesses and buy real property. They then decided to end their business relationship. To finalize the separation, my client was buying out the lawyer's portion of one of the LLCs, which owned a piece of real estate. The day before he signed over his portion of the LLC, the lawyer signed a promissory note obligating the LLC for an amount equal to the money he was owed, and a mortgage, and the lender was another LLC which he was a member of, and the lender then recorded.

Client eventually learned of the mortgage and stops paying, and then sues for fraud and many other causes of action. Lawyer does not counterclaim, but then the LLC he used to lend the money sues for nonpayment of the note and files a foreclosure.

This is going to be a fun one to piece together.

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jeffm (Apr 17, 2017 - 10:58 pm)

Not enough information.

Client stopped paying "what" when he learned there was a mortgage? Did client sign and pay on a note directly to attorney in exchange for attorney's interest in the LLC? Are you saying attorney was being paid double by way of the note signed by the LLC? Or was there just an indebtedness by the LLC but no payments on it?

Somewhere, you have to have damages.

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orange9 (Apr 17, 2017 - 11:30 pm)

I left out facts intentionally just to give the bare bones of how ridiculous this situation is and how it resembles a bar exam/law school hypo.
The client was paying the lawyer a certain amount per month, but then stopped paying when he learned of the note and mortgage since he was never aware of them up until then. Apparently, he thought the money was for legal services. When lawyer signed the documents, he did so as a member and never told client about the note and mortgage. Also, the note has still not been produced.
And oddly enough, no, there was no note personally between the client and lawyer. And I found an email in discovery in which the lawyer is trying to explain the transaction to the client's friend/lawyer, and in the email he wrote that he was not sure if client understood everything.

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jeffm (Apr 18, 2017 - 12:12 pm)

Sounds like it could be an interesting case. Client hopefully is reciting everything correctly and isn't just a dimwit.

Cases with weirdness like this can lead to an appeal where you can get appellate experience.

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