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Thursday, March 04, 2004

Perpetuities

Okay, this one is truly "inside baseball," an anecdote that will not likely be appreciated by any of my nonlawyer readers, and maybe by only a few of those.

The inspiration for my tale today is a short post entitled "The Role of Fear in Long-Term Memory," in which blawgger Evan Schaeffer of Notes from the (Legal) Underground writes with feeling:

No interest is good unless it must vest, if at all, within 21 years of a life in being at the creation of the interest.

What else but the fear of failing Property, combined with the fear of failing the Missouri and Illinois bar exams, can explain why I instantly recall this gibberish after sixteen years? Someone please send me instructions for removing the Rule Against Perpetuities from my brain. The space is urgently needed for remembering my children's birthdays.

Upon reading this, I immediately flashed back to a beautiful day in the late spring of 1990 when my practice took me to 600 Camp Street in New Orleans — the stately home of the United States Court of Appeals for the Fifth Circuit — where I had the privilege and duty of appearing before a three-judge panel of that court to present oral argument.

My client in the case was a manufacturer of consumer electronic equipment who'd extended a substantial credit line to enable purchases from it by a dealership that sold such goods at retail. The dealership had a shakey financial picture, and sure enough, it eventually went under, owing my client a large sum of money. At the beginning of their business relationship, however — as a condition for extending credit to his company — my client had prudently insisted that the dealership's owner, in his personal capacity, sign a "continuing, unconditional personal guaranty." So on the basis of that guaranty, my firm had sued the dealership's owner. He still had money enough to pay for fine lawyers, and they responded to the lawsuit with a flurry of desperate and creative arguments to try to save their client from personal liability under the guaranty for his defunct company's debt. To our astonished dismay, the federal district court had bought into a couple of those arguments and had thrown our client's case out on summary judgment, so I was wearing my "appellant" hat at the oral argument.

We'd done a good job briefing the appeal, and I've never had an oral argument go more smoothly. I was swinging for the fences — I was asking the panel not only to reverse the district court, but to render judgment for my client rather than simply remanding for a full trial. The panel of three experienced judges had been uncharacteristically silent, asking me almost no questions throughout almost my entire allotment of time, but I was getting good vibes — they seemed to be listening approvingly, to the extent one can tell such things from the advocates' podium. So I methodically rebutted not only the guarantor's arguments that had persuaded the district judge, but all the others he'd raised that the district court hadn't bothered to reach. And amazingly, when I got to the end of what I'd planned to say, I still had time left over!

"How cool is this?" I was thinking to myself, "I'm going to get to sit down with unused time!" So I squared up my notecards and closed my ring-binder of record excerpts. "Unless the members of this Honorable Court have further questions," I said confidently, "I will reserve the remainder of my allotted time for rebuttal after the presentation by my distinguished opponent, counsel for the appellee."

At which point one judge looked me in the eye and said — from somewhere out by the left field bleachers, I think — "Mr. Dyer, you say that by its terms, this guaranty agreement was continuing in nature. Unless and until revoked, it was drawn up so as to cover every additional extention of credit your client made to Mr. Z___'s company, is that correct? Continuous ... on and on ... isn't that what you're claiming, Mr. Dyer?"

"Why, yes, Your Honor, absolutely."

"So then, Mr. Dyer, why isn't your guaranty agreement void as a violation of the Rule Against Pepetuities?"

Of course, there is no pipe organ in the en banc courtroom of the Fifth Circuit headquarters, but I could have sworn that I heard three soap-opera chords descending at fortisimo volume — "bahm-bahm-BAAAAAHM!" My palms began to sweat. "Well, Your Honor ...," I vamped for a moment as I tried to remember back to the last time I'd heard or thought of the Rule Against Perpetuities.

I flashed back to a moment some ten years earlier during my bar review course, when the instructor confidently clued us in on a little-known secret: "All you need to know is that any time on a multiple choice question, whenever one of the choices is the Rule Against Perpetuities, that is not the correct answer!" (Yes, this is a flashback within a flashback.)

"Great," I thought to myself in the cool, quiet stillness of the courtroom, "if only the Fifth Circuit judges asked multiple choice questions!"

"... If I recall my property law, Your Honor, the Rule Against Perpetuities only has to do with conveyances of real property. This case, of course, involves only personal property — specifically, money. Moreover," I gamely struggled along, "although I don't remember the exact terms of the Rule Against Perpetuities, the test for whether a conditional conveyance was invalid depended on whether or not the condition could go undetermined for longer than a certain number of years past the lifetime of someone already living. Since this guaranty was personal to Mr. Z___, his own lifetime would effectively mark the end boundary after which the extension of further new credit wouldn't be covered, meaning the Rule couldn't be triggered here." I wiped my palms against my pants legs, hoping no one noticed. "And finally, Your Honor, regardless of whether I'm remembering the Rule and its terms correctly or not, I'm absolutely certain of one thing — the record on this appeal will conclusively show that Mr. Z___'s counsel never raised any arguments in the district court based on the Rule Against Perpetuities, nor in his briefs before this Court, so if Mr. Z___ had a defense on that basis, it's been conclusively waived!"

I stopped looking at the judge who'd asked the question and glanced at the other two panel members. Both were obviously struggling to control their laughter. Off to one side, the law clerk for the judge who'd asked the question looked like she'd been pole-axed; I'm very certain that particular question hadn't been in the bench memo she'd written to prepare her judge for oral argument, but was instead an instance of a judge "winging it" — or maybe even just yanking my chain for giggles and grins with a deliberately screwball question.

"Thank you Mr. Dyer, we'll hear from your opponent now," intoned the senior judge on the panel, having quickly regained his formidable composure. "I'm quite sure we've all had our daily, or perhaps our yearly, dose of the Rule Against Perpetuities by now."

I was very gratified when only a few weeks later, the Fifth Circuit issued a unanimous opinion granting exactly the relief I'd requested — reversed and rendered with instructions to calculate the damages and then enter judgment for my client in the full amount. The opinion exactly tracked our briefs and the oral arguments I'd made. Home run, game over!

And there isn't a word in the opinion about the Rule Against Perpetuities.

But the moral, of course, is this:   Evan, be careful what you wish for. You never quite know when some judge is going to probe some deep, dusty, musty corner of your memory and you'll need to summon up your recollections about that damned dumb rule!

Posted by Beldar at 06:37 PM in Humor, Law (2006 & earlier), Trial Lawyer War Stories | Permalink

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Comments

(1) Evan made the following comment | Mar 4, 2004 9:00:11 PM | Permalink

Point taken. And for an anecdote as good as that one, I'm quite willing to play the fool. Very entertaining!

(2) Beldar made the following comment | Mar 4, 2004 10:53:21 PM | Permalink

Yikes! My good sir, I did not at all mean for you to play the fool, nor even to raise a serious quibble with your jesting wish that you could forget the Rule. I entirely agree that the Rule is a foolish one, and I'd more than half unlearned it myself by the extremely improbable occasion on which I "needed" it. Even so, my need was only so as not to stand there saying, "Well, uhhh, I dunno, yer honors" at the argument — there was zero chance that not knowing it would have affected the outcome of the appeal (since it was wildly inapt to the case). If I gave any offense, Evan, I tender and hope you'll accept my apologies! And thank you for the kind words for my story.

In fact, re-reading my post, it strikes me as more than a bit conceited. Alas, I am, in my memories, sometimes the hero and sometimes the goat, but always the star of my own war stories.

I did a good job on the appeal — but intending no offense to the learned district judge whose decision was reversed, nor to opposing counsel — this case brought to mind the truism that you ought not measure a lawyer's skill by how many cases he's won or lost, but by how many he's won that he should have lost and lost that he should have won. This was certainly an appeal that I should have won, and the outcome was more a reflection of that than of any particular unique skills on my part.

(3) LazyMF made the following comment | Mar 4, 2004 11:45:23 PM | Permalink

Any blog about the rule against perpetuities should be held to a lit match and feoffed to the flame. Good anecdote, but the subject brings up BAD memories of first semester property.

(4) Evan made the following comment | Mar 4, 2004 11:57:44 PM | Permalink

Beldar: I must admit it was a little troubling to learn, upon reading your post, that I might have to hold onto the Rule Against Perpetuities for a little while longer than I had intended. But please be assured that you gave no offense--and that it's always fun to hear a lawyer tell a good war story . . .

(5) Dodd made the following comment | Apr 2, 2004 10:30:33 PM | Permalink

"Create! Kill! Count!"

That was the pnemonic our Prof taught us for answering RAP questions. It's well worth remembering the RAP to still have that in there with it. :-)

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