Lowering the Bar

Contract Written in Blood Still Not Binding, Says Court

Attorneys in California who have been drafting contracts in blood, due to a belief that this will make the contract especially binding, should stop.

Actually, attorneys anywhere who have been doing this should stop.

As I noted back in 2007, a trial court rejected Kim Jin-Soo's argument that his written agreement  with another man should be binding, although it was essentially just the other man's promise to pay a debt and was not given in exchange for anything.  As the judge wrote at that time, "The court will refuse to enforce a gratutitous contract, even when it's written in blood."  This month, the California Court of Appeals agreed.

Unfortunately, the blood is really irrelevant to the analysis, though the court did take every opportunity to refer to the document as a "blood agreement."  So I just offer the decision as a public service to those who might be thinking about opening a vein to draft a really important contract.

Link: Kim v. Son, No. G039818 (Cal. Ct. App. filed Mar. 9, 2009) (unpublished decision).
Link: msnbc.com

It's Officially an "Ugly Divorce" If Somebody Wants a Kidney Back

The breakup of any long-term relationship always involves some awkward moments where you have to split up the possessions you shared and decide who really owns what.  It's awkward enough when you're talking about CDs.  Much worse when somebody wants an organ back. 

Dr. Richard Batista said Wednesday that he wants his estranged wife, Dawnell, to either give him back the kidney she took from him (see diagram, left) or to hand over the $1.5 million he claims the kidney is worth.  Batista said that his wife desperately needed a kidney in June 2001 after her own stopped working, and two other transplants failed.  "My first priority was to save her life," Batista said at a news conference.  "The second bonus was to turn the marriage around."  Which is significantly easier to do with a living wife, in most cases.  "I was walking on a cloud," Batista said, after he gave his organ to his wife.  "I did the right thing for her and to this day I would do it again."  Of course, he said that last part just after saying he wanted to undo it.  Maybe he is planning to then give it to her again, but in that case I would recommend trying jewelry or flowers first.

Batista alleges that his wife then got all their organs involved with someone else less than two years later, leading ultimately to the divorce.

Could he conceivably get the kidney back?  An expert at the University of Pennsylvania's Center for Bioethics would not entirely rule it out.  According to medical ethicist Arthur Caplan, his chances were "somewhere between impossible and completely impossible."  Assuming he's right that there is a range of impossible outcomes, then things are looking up for Batista.

Another expert, though, said forget it.

"[I]t's illegal [in this country, anyway] for an organ to be exchanged for anything of value," said Robert Veatch at Georgetown University.  Besides, Batista donated the organ, and as a legal matter, "when you give something, you can't get it back," Veatch said.  "It's her kidney now."

Batista's attorney took a firm stance when asked if his client really wanted the kidney itself back.  "Of course not," said Dominic Barbara.  Surprisingly, it turns out Batista wants the cash, which is, among other things, a lot easier to transplant, and also is accepted by significantly more merchants.  Barbara said that the $1.5 million was a reasonable estimate of kidney-related damages, including the money that Ms. Batista was able to go on making as a result of not being dead.  "A price can't be placed on a human organ," Barbara agreed, "but it does have value."

No it doesn't, said Arthur Caplan, the spoilsport from paragraph four.  "There's nothing later you can get in terms of compensation if you regret your gift," he said.  There is, however, a great deal you can get in terms of publicity.

Link: MSNBC.com
Link: Boston Herald
Link: Newsday

"Seinfeld" Episode Used to Illustrate Duty of Good Faith

Admitting he was "perhaps an unlikely legal illustrator," the Maryland Court of Appeals recently cited Jerry Seinfeld to illustrate the contractual and fiduciary duty of "good faith."

The case, Clancy v. King, is not especially notable otherwise, except maybe because "Clancy" is the author Tom Clancy.  In 1992, Clancy and his wife Wanda formed a limited partnership to handle various book projects, including the "Tom Clancy's Op-Center" books that you have likely seen and not purchased in airports.  (If you are a fan of that series, you might or might not like to know that Clancy not only did not write but also "did not read . . . in any meaningful part, any of the books in the series.")  The partnership became much more limited a few years later when the couple got divorced.  Clancy decided he no longer wanted to contribute his name to the books he had nothing to do with, and Wanda argued that this breached his duty to the partnership.  She won.

But on appeal, the court reversed.  It found that Clancy had the right to withdraw his name, so long as he exercised his right in "good faith."  And what does that mean?

[Seinfeld] once epitomized the duty of good faith in contract. . . . Jerry's character purchased a jacket at a men's clothing shop. The terms of the contract permitted Jerry to return the item for refund at his discretion. When Jerry attempted to return the jacket after an unrelated personal quarrel with the salesman, the following discussion took place.

Jerry: Excuse me, I'd like to return this jacket.
Clerk: Certainly. May I ask why?
Jerry: For spite.
Clerk: Spite?
Jerry: That's right. I don't care for the salesman that sold it to me.
Clerk: I don't think you can return an item for spite.
Jerry: What do you mean?
Clerk: Well, if there was some problem with the garment. If it were unsatisfactory in some way, then we could do it for you, but I'm afraid spite doesn't fit into any of our conditions for a refund.

* * *

Bob:   What seems to be the problem?
Jerry: Well, I want to return this jacket and she asked me why and I said for spite and now she won't take it back.
Bob:   That's true. You can't return an item based purely on spite.
Jerry: Well, so fine then . . . then I don't want it and then that's why I'm returning it.
Bob:   Well you already said spite, so . . . .
Jerry: But I changed my mind.
Bob:   No, you said spite. Too late.

Seinfeld: The Wig Master (NBC original television broadcast 4 April 1996).  In attempting to exercise his contractual discretion out of "spite," Jerry breached his duty to act in good faith towards the other party to the contract. Jerry would have been authorized to return the jacket if, in his good faith opinion, it did not fit or was not an attractive jacket. He may not return the jacket, however, for the sole purpose of denying to the other party the value of the contract.

The court also noted that Bob appropriately rejected Jerry's claim that he just didn't want the jacket, finding this "post hoc rationalization" by Seinfeld "not credible."

Link: Legal Profession Blog
Link: Seinfeld: The Wig Master

Case Law Hall of Fame: "As a Matter of Law, the House is Haunted"

Here's a worthwhile addition to the Hall of Fame that may just come in handy these days as well.  In Stambovsky v. Ackley, New York's Appellate Division held in 1991 that a homebuyer could try to get out of a $650,000 sale contract based on his argument that he learned only after signing that the house was haunted by poltergeists.

The court agreed that the plaintiff could not sue the realtor and seller for fraud, because they had no legal duty to disclose the "phantasmal reputation of the premises."  But, applying its equity powers, it ruled that he should at least be able to seek recission on the grounds that the omitted fact was one that could have affected the property's value.  Exactly what effect a haunting might have on a house value was something that a jury would have to figure out later, the court said, but it ruled that the recission claim could go forward.

Arguably, this haunting might actually have increased the value, or at least you might conclude that from the fact that the owner had previously advertised the spirits' presence, getting the home included in a walking tour and also covered in a story by the crack journalists at Reader's Digest.  But if the owner profited from those efforts, she paid for it later, since the court ruled that having reported the spirits' presence so widely, she was now "estopped to deny their existence and [so], as a matter of law, the house is haunted."  (Note: previous sentence carefully drafted to avoid use of the phrase, "came back to haunt her.")

A dissenting judge said that in New York, the rule in real-estate transactions was still caveat emptor, "let the buyer beware."  (That was in 1991 -- whether it is or is not the rule now, I have no idea.)  He suggested that, since the owner had shared her belief in poltergeists with the public at large for at least twelve years, there was no reason give the buyer here the benefit of the doubt.  "[I]f the doctrine of caveat emptor is to be discarded," the court said, "it should be for a reason more substantive than a poltergeist. The existence of a poltergeist is no more binding upon the defendants than it is upon this court."

It would be nice to think that homebuyers in trouble would get some mileage out of precedent like this, but you know it will end up benefiting somebody on Wall Street.  "Come to find out, Lehman Brothers was built right on top of an ancient Indian burial ground.  We had no idea."

Link (PDF): Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. 1991).

Claim for Reimbursement of Dating Costs is Rejected

A 30-year-old Korean man, identified only as "Park" (which, in Korea, does not narrow it down one bit), has lost his bid to be reimbursed by his ex-girlfriend for the money he spent on their dates.  Park sued the woman after she allegedly reneged on a written promise to repay the money.

First of all, according to the report, Park had her sign this a month after she dumped him.  Gentlemen, that is not the time to negotiate a contract of this kind, since you have absolutely no bargaining power except for whatever sympathy your constant, explosive weeping fits may generate.  (Unless, that is, you did the smart thing and kept some "collateral."  You know what I'm talking about.)

Second, the report doesn't offer any facts showing this was really a contract.  If it were a one-sided written promise, it wouldn't have been enforceable, at least under our system, or at least under my faded understanding of the relevant part of that system.  But maybe it was a contract of some kind, because otherwise it's hard to see why the trial court would have ruled in his favor, which it actually did.

On appeal, though, the Korean high court reversed, finding that the woman had been coerced into signing the promise, which frankly makes a lot more sense.  Another report, in the Korea Times, added the freaky detail that Park also made her promise that she would "give up her body" if she did not repay him.  That would be creepy enough if it referred to sex, but according to the Times this was "a promise that private moneylenders usually force borrowers to make, threatening [sic] to sell kidneys or other organs if the borrower fails to pay back the money."  And you thought Bank of America was unsympathetic.

Apparently, the woman did not testify about the coercion in the trial court, because she did not have an attorney and did not know coercion was a defense.  When she learned this, she appealed and managed to get the new evidence before the high court, which ruled against Park, who will not be getting his one million won back.

Luckily, we don't have these kinds of disputes in the U.S. because we have a statute that covers this.

Don't we?

Link: Yahoo! News
Link: Korea Times

Contract Held Not Binding Although Written in Blood

On Monday, a judge in Orange County Superior Court ruled against Kim Jin-Soo, refusing to enforce a contract to pay him over $140,000.  Judge Corey Cramin ruled after a bench trial that there was no consideration for the contract, despite Kim's argument that the contract was binding because the defendant had written it in blood (or, as the Daily Journal put it, "in the muddy ocher of his own blood").

Kim's lawsuit alleged that he had invested $140,000 in companies run by Mr. Son, but they all went out of business.  He said the two men met over drinks in 2004 to discuss the matter.  After apparently quite a few drinks, and some crying by one or both men (always a good time to consider drafting up a contract), Son allegedly agreed to repay the money Kim had lost, borrowed a safety pin from a waiter and wrote out a contract using his own blood.  "Sir, forgive me," Son wrote, according to a translation from the original blood-smeared Korean.  "Because of my deeds, you have suffered financially.  I will repay you to the best of my ability."

As attorneys will know (or recall), a contract isn't binding unless there was "consideration," meaning (roughly, because I don't really recall) both sides gave something in exchange for the promises by the other side.  For example, if you give someone a gift, don't expect to get your money back later if you decide you don't like them.  You would have to construe it as a loan with a promise to repay, and you need to have evidence of that up front or you can kiss that money goodbye.  (Yes, genius, I loaned money to my now-ex-girlfriend.  Attorneys make mistakes every day.)  This is rarely a determinative issue since it doesn't take much to constitute consideration.

It takes more than writing the contract in blood, though, Judge Cramin ruled.  He found the money had been lent to the companies, not Son personally; he wasn't required to guarantee those transactions and his tearful, bloody promise to do so was not a binding contract.  "The court will refuse to enforce a gratuitous contract," the judge wrote, "even when it's written in blood."

The opinion began with the saying, "Blood is the worst of all testimonies to the truth," which turns out to be a quote from The Anti-Christ by Friedrich Nietzsche.  I'm not a Nietzsche scholar, it may surprise you to know, but this does look like a fairly relevant quote and not just the result of a law clerk Googling the word "blood."  In the passage in question, Nietzsche is arguing that just because someone has been martyred for a cause doesn't necessarily prove there is any truth in that cause:

They made signs in blood along the way that they went, and their folly taught them that the truth is proved by blood.  But blood is the worst of all testimonies to the truth; blood poisoneth even the purest teaching and turneth it into madness and hatred in the heart. And when one goeth through fire for his teaching--what doth that prove? Verily, it is more when one's teaching cometh out of one's own burning!

Verily, it proveth also that somebody should probably get Friedrich's car keys from him at this point, but there is probably something to what he's saying.

Kim's attorney said his client may appeal.  "We think the blood speaks for itself," he said.

Link: Orange County Register
Link: Wikipedia: Friedrich Nietzsche
Link: Project Gutenberg: Friedrich Nietzsche

Nice One, Einstein

The latest article of Newsweek has an interesting review of a new bio of Albert Einstein, who besides inventing special and general relativity, providing proof of the existence of atoms, providing the foundation for quantum mechanics, and thinking up that E=MC² thing -- all of which he did while he was just sitting around bored at the patent office -- also tried to come up with a legal framework that would lead to greater harmony in his domestic life:

Einstein's relations with his first wife, Mileva, degenerated so badly that in 1914 he demanded she sign a contract promising to deliver three meals to his room daily, renounce "all personal relations with me insofar as they are not completely necessary for social reasons" and "stop talking to me if I request it."

He never totally understood quantum physics, either.

Newsweek, Apr. 16, 2007, at p. 100.