EXAM#_________________
Stickgold: Civ Pro I, Final, F08 Page 1 of 2
ESSAY QUESTION (60 points, 110 minutes)
[It is recommended that you use 20-30 minutes to read and organize your answer; then
approximately 45-50 minutes on part (1), and 35-40 minutes on part (2) of this essay.]
Rachel Black and Georgia Green were best of friends. A few years ago they
began making investment decisions together. Rachel lives in Brooklyn, N.Y. (Eastern
District of New York), and until a few months ago, Georgia lived in Montclair, N.J.
(District of New Jersey), just across the river from New York City. Then Georgia moved
to Rachel’s apartment while she looked for her own place. “I’m so glad to be out of
Sopranoland [New Jersey] forever, and feel at home in New York,” she told all her
friends. Rachel and Georgia both worked at the law firm of Dewey, Cheatem, & Howe in
Manhattan (Southern District of New York). On the recommendation of a friend, they
started using a financial consultant, Ricky Fixer, who also has his office in Manhattan, to
advise on their investments. He lives in Greenwich, Connecticut (District of
Connecticut).
Following his advice, they each invested a substantial amount of money in a
private real estate investment trust run by Futura, Inc. Fixer, who said it was a
“guaranteed” 15% interest a year, pushed it very heavily. He presented them with very
impressive written material provided by Futura. Fixer indicated that he had invested in a
different Futura real estate trust a year ago, and was doing “great.” Futura, Inc. is a
Connecticut corporation (District of Connecticut), with offices in Princeton, New Jersey
(District of New Jersey), and in Dallas, Texas (Middle District of Texas). The Chief
Executive Officer works in New Jersey, and manages some overseas investment accounts
from there. The real estate trust investments were exclusively in Texas real estate
ventures, and were managed and supervised in the Dallas office. While approval to start
a new real estate venture comes from Princeton, all the actual work, financing and control
is set in Dallas.
Within a few months of investing, the economy hit the skids. Rachel and Georgia
learned that Futura, Inc. was in real trouble with some of the Texas real estate
investments, including those invested in by them. One day, Ricky Fixer informed both
Rachel and Georgia that their portfolio was sinking fast. They were only worth 20% of
their original value. The women had lost hundreds of thousands of dollars. “I’ve lost
over $100,000 too,” Ricky whined. Rachel and Georgia’s investments never recovered.
Futura’s overseas investments are doing fine, as were some other real estate funds paying
much lower returns.
Georgia in particular was devastated, having lost her life savings, and a week later
died of a heart attack. Her sister, Lorna Green, who lived in Houston, Texas (Eastern
District of Texas), was appointed the administrator of her estate. Lorna and Rachel
decided to sue Ricky Fixer and Futura, Inc.
