How strong are your issue-spotting skills? Try this essay question derived from the February 2002 New York Bar Exam. Read the question prompt then choose the best answer from the choices provided. Tell us your answer in the comments, and we’ll post the explanation later today!
Wild World, Inc. (“WW”) owns and operates Wild World, a wildlife preserve in northern New York State. Fred, a New York resident, was a regular visitor to Wild World.
On May 5, 2001, while hiking on a well-marked trail, Fred decided to leave the trail to see a beaver dam. While attempting to climb down the steeply sloped and muddy riverbank, Fred suffered severe injuries when he lost his footing and fell. As Fred was being taken to the hospital, Don, the ambulance driver, gave Fred the business card of Anne, a lawyer, and told him that Anne could help him get money for his injuries.
After his release from the hospital, Fred discovered that his car had been stolen from the garage at his home, and he immediately made a claim under his Acme Insurance Co. automobile insurance policy. Acme, a State X corporation, denied coverage and retroactively cancelled Fred’s insurance policy based upon misrepresentations in his insurance application. In order to pay lower premiums, Fred had stated in his application that he resided in State X and that the car would be principally garaged in State X. However, Acme’s investigation revealed that from the time Fred applied for the policy, which had been issued and delivered in State X, Fred has resided and garaged the car in New York.
Fred consulted Anne and Anne told him that for a flat fee of $1,000 she would get the cancellation of his insurance policy rescinded. Fred paid Anne $1,000 and gave her the cancellation notice that he had received from Acme. Anne also said she would file a negligence action against WW. She told Fred not to worry about the cost of the lawsuit and that her fee would be “a fair percentage” of any recovery. Fred did not sign a written retainer agreement. Anne sent Don a check for $500 for referring Fred to her.
Anne commenced an action against WW to recover damages for Fred’s injuries, alleging that WW’s negligent operation of the wildlife preserve and its failure to warn of a dangerous condition had caused Fred’s accident. Fred testified at his deposition that he knew that the riverbank was steep and saw that it was muddy before he began to climb down. After the completion of discovery, WW moved for summary judgment dismissing the complaint. The parties stipulated that WW had neither fenced off the area where Fred was hurt nor posted any warning signs in the area.
Anne also commenced an action against Acme Insurance Co. to rescind the cancellation of the automobile insurance policy based on New York law, which prohibits such retroactive cancellation. In its answer, Acme asserted as an affirmative defense that the court should apply State X law, which permits retroactive cancellation of such an insurance policy.
Why is Anne’s $500 payment to Don improper?
(A) Because Anne did not inform Fred that she would be making the payment.
(B) Because it is a referral fee.
(C) Because Don is not an attorney.
(D) Because it was excessive.