MGT393H5F2005APR - University of Toronto at Mississauga...

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Unformatted text preview: University of Toronto at Mississauga Final Examination MGT 393 APRIL/MAY EXAMINATIONS 2005 Duration — 2 hours Aids Allowed: NO ADS ARE ALLOWED FOR THIS EXAMINATION It is an academic offence for students to possess the following items at their examination desks: cell phones, pagers, PDAs, wrist watch computers, or other electronic devices not specifically listed as “Aids Allowed”. If any of these items are in your possession, give them to your instructor immediately at the beginning of the examination and no penalty will be imposed. These items will be returned to you at the end of the examination. Please note, students are no longer allowed to petition to RE-WRI T E a final examination. Please print your name and student number in the spaces provided below. Student name (LAST NAME FIRST) Student number Instructions: This examination must be returned with your examination response. Please place the examination in the first page of first booklet. _, Marks: Question One (35 marks) Question Two (65 marks) Total (100 total marks) Page 1 of 5. QUESTION ONE (35 marks) Frank Furter went to the Worst Buy Electronics (“WB”) store in Mississauga shortly before Christmas 2004 looking to acquire a cellular telephone for his mother-in-law, Cheryl Angle. Mrs. Angle, a widow, was looking for a cellular telephone to have with her at all times to be used primarily for emergency purposes. This was especially important as Mrs. Angle lived in a rural part of Ontario, approximately 15 miles from Guelph. Frank thought if he and his wife bought Mrs. Angle the telephone for a gift, she would be able to assume responsibilities for the monthly charges. When Frank went into WB, he noticed several large cellular displays. When he walked towards a display he was approached by a young man, George, wearing a “Sellus Mobility” shirt. George asked Frank if he could help him. Frank explained that he was looking for a “low cost cellular phone for his mother-in-law that lived in the country.” George explained to Frank that Sellus had a “Christmas promotion“ that would be perfect for this situation. The promotion required the purchase of a Mokorola 002 cellular phone, at a price of $179.00 and the signing up on a “short low cost cellular plan — the “Singles Plan”. Frank explained that his mother-in-law would only use the phone for emergencies and so required little air time. George said he thought the Singles Plan would work best. George explained that in order to have this low cost special, the phone would have to be activated over the internet using a special code that would be provided by the WB cashier. Frank indicated that this would not be a problem as he was “computer savvy”. Frank went to the cash register and paid the WB clerk. She provided the special Sellus code. On Christmas day, Frank and his wife gave Mrs. Angle the new cellular phone. She was surprised but very pleased by the look and feel of the Mokorola 002. Frank had brought his laptop and told Mrs. Angle that he needed to activate the telephone over the intemet. Frank accessed the Sellus telephone website using his dial-up internet connection. Once on the site, Frank clicked on “new activations”. At new activations, he was prompted to put in information as to name, telephone number and credit card information. He put in all the information for Cheryl Angle, including her VISA number. He was then prompted to put in his “purchase acceptance and acknowledgement code”. After putting the code that he received from WB, the computer prompted, “Would you like to see the terms that you have acknowledged and accept?” Frank clicked “No” — and the site stated, “YOUR PHONE HAS NOW BEEN ACTIVATED AND ALL TERMS ACCEPTED FOR FIVE YEARS”. Frank did not read the notice as he was too excited about trying out the telephone. In late January 2005, Mrs. Angle received her VISA bill. She noted a Sellus charge for in excess of $500.00. Upon calling Sellus, Mrs. Angle was told that the charge was “200.00 for hardware activation; $50 for administrative set up and $200.00 for the “Singles” airtime, plus taxes.” She was told that for the next 5 years she would be billed “at least $200.00 per month for airtime.” The Singles plan was designed for single people who spoke “a lo ” with other singles. When Mrs. Angle told Frank, he was shocked. He immediately called Sellus Mobility to complain. He was told by Sarah, the Sellus telephone client service representative that “a contract is a contract — and if he kept on complaining or complained to others, they would sue him and his mother-in-law for slander and libel.” When Frank told Sarah that he had told the Sellus representative, George, his requirements, Sarah responded, George does not work for Sellus, he works for WB. Page 2 of5. Mrs. Angle has now met with you, Bea Calm and explained her situation. She is upset with Frank, WB and Sellus. She has received a letter from a lawyer from Sellus threatening to sue her for “all her assets” if she speaks out or does not pay. This has resulted in an increase in her overall stress and a worsening of her health. She has asked you, Bea Calm, to prepare a detailed memorandum which analyzes the legal issues and provides a detailed course of action. Mrs. Angle also mentions to you, “to add insult to injury -— the Sellus reception where I live is terrible. Most of the times that l have used the phone, the signal is very weak.” REQUIRED: Prepare the memorandum. QUESTION TWO (65 marks) Dr. Barella is a cosmetic surgeon. He opened a clinic in the Yorkville area of Toronto in 1997. The clinic operated under the name, “Your Beautiful Medical Spa”. The clinic performed a variety of surgical procedures including, liposuction and facial tightening. The main surgical procedure of the clinic, however, was breast augmentation (implants). When Dr. Barella opened his clinic he rented approximately 3500 square feet of space under the terms of a 5-year lease. His requirements were only approximately 1800 square feet. Accordingly, he sub-let the remaining space equally between a dental surgeon (Dr. Hugh G. Smile) and an anesthesiologist (Dr. Fa. Tigue). Over the years, Dr. Barella began using Dr. Tigue ' exclusively as the anesthesiologist for his cosmetic surgery. In 2004, on the advise of his accountant, Dr. Barella incorporated a new corporation, “Your Beautiful Medical Spa Inc. (hereinafter, “YBI”)”. YBI was'utilized to help Dr. Barella minimize income taxes. Pam Anderson, Dr. Barella’s spouse, is the sole shareholder, sole director and president of YBl. YBI was responsible for hiring all nurses and other staff that work at the clinic as well as executing the new lease for a further 5 years. YBI provided “administrative” services to Dr. Barella for a fee of “cost plus 20%”. The professional rules of the College of Physicians and Surgeons prohibit a medical doctor from incorporating their actual medical practice, although doctors could operate as either sole proprietorships or partners. Effective January 2004, Dr. Tigue and Dr. Barella negotiated an arrangement whereb , “net proceeds from surgical procedures beyond amounts paid to YBI would be shared 40% to Dr. Tigue and 60% to Dr. Barella.” Dr. Tigue spent all of his time while at the clinic assisting in the cosmetic surgery. His remaining time was spent at the Hospital for Sick Children, where he was employed and as an “associate professor” at the University of Toronto, Faculty of Medicine. Stephanie Smyth, a teenager, was an aspiring singer and fashion model. Her friends always said that “she had the voice of Shania Twain and the looks of younger and smaller Christine Brinkley”. On one occasion, while performing at a charitable event, Stephanie met Pam Anderson. Pam congratulated Stephanie on her outstanding performance and mentioned to her, “that my company could give you the looks that could take you to the big time.” Pam then explained to Stephanie the advantages of receiving a breast implants. Stephanie is 5 ft. 4 inches tall and has a very lean frame. Her breast size was measured as a 34A. Stephanie met with Dr. Barella in late May. Dr. Barella told Stephanie that “Pam told me all about you and she told me that she told you about all the advantages and disadvantages of helping Page 3 of 5. out Mother Nature. In order to become a star you should have a breast size of at least 36C. I will fix you up with the latest in implants. We will likely use an implant that is expanded by salt water. It is safe and there is nothing to worry about and it looks great. Madonna better watch out when she hears and sees you. I have an opening in about an hour, so you better decide quickly. If that is too soon, well, I am booked until Christmas. It if helps any, I will not charge you anything on the hope that when you become a big star you will think about how that poor old doctor helped you become famous and you might star in one of my advertisements.” Stephanie had always wanted to become a star. If Dr. Barella thought that breast augmentation would help her, then she was willing to try. Stephanie consented to the procedure and signed a consent form. Stephanie signed the consent form after being given a mild sedative by Dr. Tigue. The consent form was between, Stephanie Smyth and YBI, and provided, “Ms. Smyth acknowledges that breast augmentation surgery is not without risk, and accordingly, Ms. Smyth hereby releases YBI from any claims she may have, caused by whatever, including accident and negligence. Furthermore, Ms. Smyth acknowledges that photographs may be taken of her, prior to and subsequent to surgery, and she consents that these photographs can be utilized for scientific and medical purposes” Prior to signing the release, Stephanie was provided literature prepared by Technolmplants Inc. of Texas. The literature described the saline filled implants manufactured by the corporation, as well as the new silicone implants that it manufactured. The literature described the implants as being “absolutely safe” and “approved by the U.S. Food and Drug Administration.” While performing the surgery, Dr. Barella decided at that he would use the “new teardrop-shaped silicone implants” over the saline filled round ones as he thought that they would look more natural. Since having the surgery, Stephanie had been in constant pain and finds it difficult to breathe. During a follow-up visit to Dr. Barella, she indicated to Dr. Barella that she was in pain and he told her that the soar in which the implant was inserted was likely causing it. He said that a closed capsulotomy would likely solve it. After Dr. Barella said this, she suddenly felt Dr. Barella “with two hands on my breasts, pressing hard, trying to pop the scar around the insert.” The procedure was performed without any express consent by Stephanie and Stephanie thought that Dr. Barella may have “performed the capsulotomy for his own pleasure and not for medical purposes.” Subsequent to the Operation, pictures of Stephanie’s breast have appeared in the Toronto Star in an article entitled, “It’s all to do with me One women explains why she had to do it.” Dr. Barella provided the pictures and commentary. Stephanie has since gone to see, Dr. Xie Pert, a specialist in reconstructive surgery. Dr. Pert has ' advised that his examination indicates that the “silicone in Stephanie’s breast implants appear to be leaking and that it will only be a matter of time before the leakage will spread to her vocal cords and perhaps cause breast cancer.” Dr. Pert advises a mastectomy be performed to minimize the dangers.” He notes that these “inserts which measure 38C, have not been approved in Canada.” Dr. Barella and Technolmplants Inc. deny any liability. Both parties advise that Ms. Smyth has signed a complete disclaimer. Dr. Barella has also indicated that he has some “financial problems, and that nothing would be gained by going after him.” As well, Dr. Barella states that, “no consideration has been exchanged as the operation was performed for free on Ms. Smyth for marketing reasons.” Page 4 of 5. Dr. Barella has stopped paying the rent on his clinic. The landlord has threatened to sue Dr. Barella. Dr. Barella has responded to their threat by advising that Your Beautiful Medical Spa Inc. signed the lease and that he has no liability. Apparently when the new lease was given to Dr. Barella for signature, he added the letters, “Inc.” after Your Beautiful Medical Spa, and initialed the change. REQUIRED: Ms. Smyth has retained you. Prepare a memorandum which discusses in detail any cause of action that she may have against each of the parties and the basis of such claim with a complete legal analysis of same. As the landlord may also have a competing claim for damages, your memorandum should also discuss the cause of action that the landlord may have. Your analysis should provide supported conclusions, as well as any other practical advice you may have. Additional information is contained in Appendix A. APPENDIX A l. The Consent to Treatment/let, RSO 1997, provides that, “except in the case of an emergency or necessity, treatment to individual under the age of 21 shall be completed only upon the consent of a legal guardian. 2. Prior to the surgery, Ms. Smyth advised Dr. Barella that, “I do not want my breasts too large, for sure not as large as 36.” Dr. Barella thought that she said, “I want my breasts large, for sure at least as large as 36.” 3. At the time that Ms. Smyth came to see Dr. Barella for her followmp visit, she signed a document which provided that, “Dr. Barella has provided quality professional services and that I accept this follow-up visit at no fee as full accord and satisfaction of his obligations.” 4. Pam Anderson has a personal net worth of approximately $4,000,000. 5. After the Toronto Star article was published, an executive of Sony records was quoted as saying, “If she is a fake with her body, she is probably a fake as a singer.” 6. The Supreme Court of Australia in a 1966 court decision, established a precedent that, “A party to cosmetic surgery, as it is gratuitous, has no basis, in contract or otherwise, to make a claim against the medical professional performing the procedure in good faith.” 7. Dr. Pelt has suggested that the performance of the capsulotomy may have caused the implant to leak silicone. END OF EXAM TOTAL MARKS = 100 Page 5 of 5. ...
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