William Williams is an attorney in Birmingham, Alabama. In 1997, Robert Shelborne asked Williams to represent him in a deal in London, England, from which Shelborne expected to receive $31 million. Shelborne agreed to pay Williams a fee of $1 million. Their overseas contact was Robert Tundy, who said that he was with the “Presidency” in London. Tundy said that a tax of $100,010 would have to be paid for Shelborne to receive the $31 million. Shelborne asked James Parker, a former co-worker, to lend him $50,000. Shelborne signed a note agreeing to pay Parker $100,000 within seventy-two hours. Parker, Shelborne, and Williams wired the $50,000 to an account at Chase Manhattan Bank. They never heard from Tundy again. No $31 million was transferred to Shelborne, who soon disappeared. Williams then learned that no “Presidency” existed in London. Whenever Parker asked Williams about the note, Williams assured him that he would be paid. On Parker’s behalf, Williams filed a suit in an Alabama state court against Shelborne, seeking the amount due on the note and damages. The court entered a judgment against the defendant for $200,000, but there were no assets from which to collect it.
(a) Parker filed a suit in an Alabama state court against Williams, alleging, among other things, breach of contract. Parker offered as evidence a tape recording of a phone conversation in which Williams guaranteed Shelborne’s loan. Is the court likely to rule in Parker’s favor on the contract claim? Why or why not?
(b) In response to Parker’s suit, Williams filed a counterclaim, seeking unpaid attorneys’ fees relating to the suit that Williams filed against Shelborne on Parker’s behalf. The court ruled against Williams on this claim. He appealed to the Alabama Supreme Court but failed to supply a transcript of the trial on his counterclaim, as it was his duty to do. Is the appellate court likely to rule in his favor? Why or why not?
(c) The sham deal at the center of this case is known to law enforcement authorities as advance fee fraud, commonly referred to as a “419 scam.”Induced by a promise of a transfer of funds from an overpaid contract or some other suspect source, a victim may be asked to pay a tax or other fee first. Among the parties attracted by the 419 scam in this case, who, if anyone, behaved ethically? Discuss.