Eiser v. Brown & Williamson Tobacco Corp. - Pa. Supreme Court - December 28, 2007
plurality (3) http://www.courts.state.pa.us/OpPosting/Supreme/out/J-22-2007oajpdf
concurring (2) http://www.courts.state.pa.us/OpPosting/Supreme/out/J-22-2007co.pdf
dissent -Castille http://www.courts.state.pa.us/OpPosting/Supreme/out/J-22-2007do1pdf
dissent - Eakin http://www.courts.state.pa.us/OpPosting/Supreme/out/J-22-2007do2pdf
Pa. R.A. P. 1925(b) requires an appellant to file and serve on the trial judge a "concise statement of the errors complained of on appeal," where the judge "desires clarification of the errors complained of" and enters an order directing the appellant to prepare such a statement. http://www.pacode.com/secure/data/210/chapter19/s1925.html
As the plurality noted, this rule has been discussed in a "myriad [of] recent decisions...which reach varying conclusions.....[T]here is much consternation in the courts of this Commonwealth related to where lies the outer limit of the number of issues" an appellant may raise under this rule." The process under Rule 1925(b) "has turned into a maelstrom in recent years....."
This case does little to "clarify and quell the consternation," especially given the questionable precedential value of plurality opinions. Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454; 866 A.2d 270, 275 n. 2 (Pa. 2005).
In this case, the appellants filed a 15-page statement containing 24 separately-numbered issues, some of which contained sub-issues. The trial court wrote an 85-page opinion in the case, which had a "complicated and voluminous record" and in which four judges had issued rulings. The trial and Superior Courts held that appellants had waived their right to appellate review as to 6 of 8 issues they had raised and not voluntarily abandoned on appeal.
Plurality opinion - no per se rule - presumption of good faith
The plurality "instruct[ed] lower courts to address, on the merits, all issues raised in good faith....This standard provides, where necessary, a familiar tool to assess the basis for the issues raised." The plurality also stated that "the number of issues raised in the Rule 1925(b) statement cannot by itself provide a basis for finding waiver....In sum, the number of issues raised in a Rule 1925(b) statement does not, without more, provide a basis upon which to deny appellate review where an appeal otherwise complies with the mandates of appellate practice....There is a presumption that an attorney licensed to practice law in this Commonwealth, who acts as an officer of the court system, has acted in good faith upon signing a document filed with the court." The court "encourage[d] lower courts to recognize that on rare occasions a party may, in good faith, believe that a large number of issues are worthy of pursuing on appeal." (emphasis added)
Saylor, J., concurring - The justice noted his disagreement with a "strict waiver approach" and opposition to any expansion of that doctrine. He thought that the trial and intermediate appellate courts "had reasonable alternatives short of the drastic sanction of outright dismissal to address the apparent lack of conciseness in the statement."
Castille, J., dissenting - The dissenting justice noted that the trial and Superior Court orders were issue-specific and had held that 2 of the 8 matters complained of were "susceptible of meaningful review.....In short, appellants were afforded appellate review, but that review was restricted." The justice criticized the Court's finding of appellants' good faith, noting that it was "not a court of record with fact-finding capacity or function." He said that the lower court decisions were the "natural result of appellants' own Rule 1925(b) conduct," that "appellants took no action to protect their interests," and that the plurality overlooked appellants' lapses. He thought that the result of the plurality opinion would be "the filing of prolix statements as of right, without leave or explanation" and was a solution that would "reward...litigants who primarily have themselves to blame for their dilemmas."
Eakin, J., dissenting - The justice felt that the 1925(b) statement impeded rather than aided the trial judge in writing an opinion. "There comes a point when too much is simply too much."
Friday, February 22, 2008
Tuesday, February 05, 2008
disability - credibility - medical sources - findings and reasons
Echols v. Astrue - ED Pa. - January 31, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0141P.pdf
Case remanded because of improper determination about claimant's credibility and the other errors listed below.
The ALJ erred in crediting evidence from one source about claimant's credibility but rejecting evidence from the same source about claimant's RFC, without explaining this inherent contradiction. In making findings about credibility and other issues, findings, the ALJ must indicate in his decision which evidence he has rejected and which he is relying, as well as the reasons for choosing one over the other, so that the court can assess whether significant probative evidence was credited or ignored. Schaudeck v. Commr., 181 F.3d 429, 433 (3d Cir. 1999).
GAF - acceptable medical source - SSR 06-3p allows the opinion of an other-than "acceptable medical source" to outweigh that of an "acceptable medical source." Here a AMS set the GAF at 57 but an other than AMS (a masters level clinician and licensed clinician) found it to be 45. The ALJ did not explain his preference for the AMS's opinion. In addition, the defendant commissioner improperly gave a reason for the decision that was not included in the ALJ decision. Defendant may not substitute its reasons for that of the ALJ’s. See Fargnoli v. Halter, 247 F.3d 34, 44 n.7 (3d Cir. 2001) (quoting SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“[T]he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based”)).
claimant's credibility - findings and reasons - The ALJ did not explain why/how he found some of claimant's statements credible and others not credible. Chenery Corp., 318 U.S. at 87; Fargnoli, 247 F.3d at 44 n.7. The ALJ’s failure to indicate clearly in his credibility finding which of Plaintiff’s statements he credited, which he found were not supported by the medical record, and why, leaves the court unable to assess properly whether significant probative evidence was credited or ignored. See Schaudeck, 181 F.3d at 433.
RFC formulation - In determining the RFC, the ALJ must consider all relevant evidence. Fargnoli, 247 F.3d at 41. “That evidence includes medical records, observations made during formal medical examinations, descriptions of limitations by the claimant and others, and observations of the claimant’s limitations by others.” Id. (citing 20 C.F.R. § 404.1545(a)). The ALJ’s RFC finding must provide a clear and satisfactory explanation of its basis but did not do so here.
VE opinion - The errors listed above also made the VE hypothetical improper. After correcting errors in the ALJ’s credibility and RFC determinations on remand, the ALJ must present a complete hypothetical to the VE and consider any VE opinion that encompasses all limitations found to exist.
http://www.paed.uscourts.gov/documents/opinions/08D0141P.pdf
Case remanded because of improper determination about claimant's credibility and the other errors listed below.
The ALJ erred in crediting evidence from one source about claimant's credibility but rejecting evidence from the same source about claimant's RFC, without explaining this inherent contradiction. In making findings about credibility and other issues, findings, the ALJ must indicate in his decision which evidence he has rejected and which he is relying, as well as the reasons for choosing one over the other, so that the court can assess whether significant probative evidence was credited or ignored. Schaudeck v. Commr., 181 F.3d 429, 433 (3d Cir. 1999).
GAF - acceptable medical source - SSR 06-3p allows the opinion of an other-than "acceptable medical source" to outweigh that of an "acceptable medical source." Here a AMS set the GAF at 57 but an other than AMS (a masters level clinician and licensed clinician) found it to be 45. The ALJ did not explain his preference for the AMS's opinion. In addition, the defendant commissioner improperly gave a reason for the decision that was not included in the ALJ decision. Defendant may not substitute its reasons for that of the ALJ’s. See Fargnoli v. Halter, 247 F.3d 34, 44 n.7 (3d Cir. 2001) (quoting SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“[T]he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based”)).
claimant's credibility - findings and reasons - The ALJ did not explain why/how he found some of claimant's statements credible and others not credible. Chenery Corp., 318 U.S. at 87; Fargnoli, 247 F.3d at 44 n.7. The ALJ’s failure to indicate clearly in his credibility finding which of Plaintiff’s statements he credited, which he found were not supported by the medical record, and why, leaves the court unable to assess properly whether significant probative evidence was credited or ignored. See Schaudeck, 181 F.3d at 433.
RFC formulation - In determining the RFC, the ALJ must consider all relevant evidence. Fargnoli, 247 F.3d at 41. “That evidence includes medical records, observations made during formal medical examinations, descriptions of limitations by the claimant and others, and observations of the claimant’s limitations by others.” Id. (citing 20 C.F.R. § 404.1545(a)). The ALJ’s RFC finding must provide a clear and satisfactory explanation of its basis but did not do so here.
VE opinion - The errors listed above also made the VE hypothetical improper. After correcting errors in the ALJ’s credibility and RFC determinations on remand, the ALJ must present a complete hypothetical to the VE and consider any VE opinion that encompasses all limitations found to exist.
Friday, February 01, 2008
consumer protection - title insurance - fraudulent OR deceptive conduct
Alberton, et al. v. Commonwealth Land Title Insurance Co. - ED Pa. - January 31, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0133P.pdf
The court certified a class of consumer who had purchased title insurance from defendant within 10 years of a prior purchase of title insurance. The court said that "[i]n doing so, it joins a growing list of courts around the country that have certified similar classes of insurance purchasers bringing similar cases against insurance sellers and arising from practices nearly identical to the sales practices challenged here."
Title insurance is regulated by the Pennsylvania Title Act, 40 P.S. 910-1 et seq., and the Title Insurance Rating Bureau Manual (Manual), which establishes a mandatory 3-tier pricing structure - basic, reissue, and refinance. The named plaintiff claimed that he was entitled to the lowest rate (refinance) but was charged the higher reissue rate, which cost him $234.08 more.
Plaintiff sued under various causes of action (contract, UTPCPL, fraudulent misrepresentation, etc. etc.) who elements differed "but each turns on the question of whether plaintiff was required to request a discounted rate and produced evidence showing his entitlement to that rate when he purchases title insurance from Commonwealth; or whether Commonwealth should have automatically offered plaintiff discounted rate upon learning, through the title search, that he had refinanced in the [recent] past," thus entitling him to a discount.
Of particular note was the court's discussion of the UTPCPL claim, in the context of Rule 23(b)'s requirement that common questions of law/fact predominate over individual questions. The court said that
A plaintiff seeking to recover under the UTPCPL once was required to prove all the elements of common law fraud; however, a 1996 amendment made the law “less restrictive.”9 Commonwealth v. Percudani, 825 A.2d 743, 747 (Pa. Cmwlth. 2003). Plaintiffs must now show conduct that is “deceptive to the ordinary consumer,” but need not prove all the elements of fraud.10 Id. at 746. Thus, individualized proof of justifiable reliance is no longer required to succeed on a claim under the UTPCPL. Instead, “[a] policy of not applying published insurance rates, if proven, would satisfy the requirement of a deceptive practice under the UTPCPL.” Cohen, 242 F.R.D. at 301. Because plaintiffs can succeed as a class by showing Commonwealth’s policy rather than individual reliance, common questions predominate on this claim.
9 Section 202-2(4)(xxi) now prohibits “engaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” 73 Pa. Cons. Stat. Ann. § 202-2(4)(xxi)..... Prior to 1996, the section addressed only “fraudulent,” not “deceptive,” conduct.....
10 Pennsylvania courts are divided as to the import of the 1996 amendment to the UTPCPL: the superior courts continue to require plaintiffs under the UTPCPL to prove all the elements of common law fraud whereas the Commonwealth court has abandoned that requirement. See Com. ex rel. Corbett v. Mason, 903 A.2d 69, 74 (Pa. Cmwlth. 2006) (recognizing split among Pennsylvania courts). The Commonwealth court reasons that “(1) the statute is to be liberally construed to effectuate the legislative goal of consumer protection; (2) the legislature’s addition of the words ‘or deceptive’ signals a less restrictive interpretation; and (3) maintaining the pre-1996 requirement would render the words ‘or deceptive conduct’ redundant and superfluous, contrary to the rules of statutory construction.” Id. Other federal courts that have considered the effect of the 1996 amendment have agreed with the Commonwealth court’s conclusion. See, e.g., Cohen, 242 F.R.D. 295; Flores v. Shapiro & Kreisman, 246 F. Supp. 2d 427, 432 (E.D. Pa. 2002) (holding that, to survive a motion to dismiss, plaintiff seeking relief under UTPCPL need allege only that conduct was deceptive; all six elements of common law fraud are not necessary); In re Patterson, 263 B.R. 82, 91-92 (Bankr. E.D. Pa. 2001). Persuaded by the reasoning of the Commonwealth court and these federal courts, this Court also concludes that the addition of “deceptive” conduct to the UTPCPL signals the legislature’s intent that plaintiffs proceeding under the UTPCPL no longer be required to establish the elements of common law fraud.
The Title Insurance statute is also discussed in the recent ED Pa. case of Markocki v. Old Republic National Title Insurance Company http://www.paed.uscourts.gov/documents/opinions/07D1382P.pdf
http://www.paed.uscourts.gov/documents/opinions/08D0133P.pdf
The court certified a class of consumer who had purchased title insurance from defendant within 10 years of a prior purchase of title insurance. The court said that "[i]n doing so, it joins a growing list of courts around the country that have certified similar classes of insurance purchasers bringing similar cases against insurance sellers and arising from practices nearly identical to the sales practices challenged here."
Title insurance is regulated by the Pennsylvania Title Act, 40 P.S. 910-1 et seq., and the Title Insurance Rating Bureau Manual (Manual), which establishes a mandatory 3-tier pricing structure - basic, reissue, and refinance. The named plaintiff claimed that he was entitled to the lowest rate (refinance) but was charged the higher reissue rate, which cost him $234.08 more.
Plaintiff sued under various causes of action (contract, UTPCPL, fraudulent misrepresentation, etc. etc.) who elements differed "but each turns on the question of whether plaintiff was required to request a discounted rate and produced evidence showing his entitlement to that rate when he purchases title insurance from Commonwealth; or whether Commonwealth should have automatically offered plaintiff discounted rate upon learning, through the title search, that he had refinanced in the [recent] past," thus entitling him to a discount.
Of particular note was the court's discussion of the UTPCPL claim, in the context of Rule 23(b)'s requirement that common questions of law/fact predominate over individual questions. The court said that
A plaintiff seeking to recover under the UTPCPL once was required to prove all the elements of common law fraud; however, a 1996 amendment made the law “less restrictive.”9 Commonwealth v. Percudani, 825 A.2d 743, 747 (Pa. Cmwlth. 2003). Plaintiffs must now show conduct that is “deceptive to the ordinary consumer,” but need not prove all the elements of fraud.10 Id. at 746. Thus, individualized proof of justifiable reliance is no longer required to succeed on a claim under the UTPCPL. Instead, “[a] policy of not applying published insurance rates, if proven, would satisfy the requirement of a deceptive practice under the UTPCPL.” Cohen, 242 F.R.D. at 301. Because plaintiffs can succeed as a class by showing Commonwealth’s policy rather than individual reliance, common questions predominate on this claim.
9 Section 202-2(4)(xxi) now prohibits “engaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” 73 Pa. Cons. Stat. Ann. § 202-2(4)(xxi)..... Prior to 1996, the section addressed only “fraudulent,” not “deceptive,” conduct.....
10 Pennsylvania courts are divided as to the import of the 1996 amendment to the UTPCPL: the superior courts continue to require plaintiffs under the UTPCPL to prove all the elements of common law fraud whereas the Commonwealth court has abandoned that requirement. See Com. ex rel. Corbett v. Mason, 903 A.2d 69, 74 (Pa. Cmwlth. 2006) (recognizing split among Pennsylvania courts). The Commonwealth court reasons that “(1) the statute is to be liberally construed to effectuate the legislative goal of consumer protection; (2) the legislature’s addition of the words ‘or deceptive’ signals a less restrictive interpretation; and (3) maintaining the pre-1996 requirement would render the words ‘or deceptive conduct’ redundant and superfluous, contrary to the rules of statutory construction.” Id. Other federal courts that have considered the effect of the 1996 amendment have agreed with the Commonwealth court’s conclusion. See, e.g., Cohen, 242 F.R.D. 295; Flores v. Shapiro & Kreisman, 246 F. Supp. 2d 427, 432 (E.D. Pa. 2002) (holding that, to survive a motion to dismiss, plaintiff seeking relief under UTPCPL need allege only that conduct was deceptive; all six elements of common law fraud are not necessary); In re Patterson, 263 B.R. 82, 91-92 (Bankr. E.D. Pa. 2001). Persuaded by the reasoning of the Commonwealth court and these federal courts, this Court also concludes that the addition of “deceptive” conduct to the UTPCPL signals the legislature’s intent that plaintiffs proceeding under the UTPCPL no longer be required to establish the elements of common law fraud.
The Title Insurance statute is also discussed in the recent ED Pa. case of Markocki v. Old Republic National Title Insurance Company http://www.paed.uscourts.gov/documents/opinions/07D1382P.pdf
real property - judicial sale - petition to set aside - due process rights of owner
Fulton v. Bedford County Tax Claim Bureau - Commonwealth Court - January 31, 2008
http://www.courts.state.pa.us/OpPosting/CWealth/out/1302CD07_1-31-08.pdf
A person who holds legal title to property which he purchased at a judicial sale is an indispensable party to and has a due process right to get notice of and take part in the prior owner's subsequent petition to set aside the judicial sale because of alleged lack of notice. The lower court erred in denying the purchaser's petition to intervene in the proceedings on the prior owner's petition.
The purchaser was more than just a successful bidder at a tax upset sale, but rather held title to the property as owner, after title passed first to the taxing bureau as trustee, which then conveyed its title to purchaser, who became the legal title holder. "As legal owner, Purchaser is entitled to due process before title to the Property may be transferred to another....To that end, appellate courts consistently hold property owners are indispensable parties to lawsuits affecting their property rights."
http://www.courts.state.pa.us/OpPosting/CWealth/out/1302CD07_1-31-08.pdf
A person who holds legal title to property which he purchased at a judicial sale is an indispensable party to and has a due process right to get notice of and take part in the prior owner's subsequent petition to set aside the judicial sale because of alleged lack of notice. The lower court erred in denying the purchaser's petition to intervene in the proceedings on the prior owner's petition.
The purchaser was more than just a successful bidder at a tax upset sale, but rather held title to the property as owner, after title passed first to the taxing bureau as trustee, which then conveyed its title to purchaser, who became the legal title holder. "As legal owner, Purchaser is entitled to due process before title to the Property may be transferred to another....To that end, appellate courts consistently hold property owners are indispensable parties to lawsuits affecting their property rights."
Thursday, January 31, 2008
consumer protection - credit card - statute of limitations
Richburg v. Palisades Collection LLC and Wolpoff & Abramson LLP- ED Pa. - January 28, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0113P.pdf
Plaintiff sued defendants -- a collection agency and a law firm -- under various consumer statutes for bringing suit to collect a debt on which the statute of limitations had run. Defendants moved for summary judgment, claiming that the statute of limitations for such actions was 6 years and that their suit against plaintiff was filed within that period.
The court rejected this argument, holding that the statute of limitations on an alleged credit card debt is four (4) years under the standard contract provision in 42 Pa. C.S. 5525(a).
account stated - The court rejected the defendants' claim that they had sued plaintiff within the proper limitations period, which they said was six years, under 42 Pa. C.S. 5527(b), which covers cases which do not come under any other specified limit. The defendants claimed that the debt was on an "account stated." After a thorough review of the law of "account stated," the court said the it was "just a variety of contract" and came under the 4-year statute covering contracts.
letter from attorney was attempt to collect debt - The court also rejected the claim that the debt collector's attorneys were not themselves acting as debt collectors, noting a pre-suit letter to plaintiff stating that "this is an attempt by a debt collector to collect a debt," with no reference to an impending legal action or any suggestion that it was part of an attempt to prosecute a lawsuit. The court said that the letter created attorney liability under the state debt collection law, 73 Pa. C.S. 2270.1 et seq., which in turn established per se liability under the state consumer protection law, 73 P.S. 201-1 et seq.
bona fide error defense - The court refused summary judgment on defendants' claim under the bona fide error defense, 15 USC 1992k(c) and 72 P.S. 2270.5(d), holding that under the facts, there was a jury question as to whether defendant Palisades national survey of statutes of limitations was, as a matter of law, a measure that was reasonably adapted to avoid the error that occurred here.
The bona fide error defense involves three prongs: 1) a (subjective) determination of whether the violation was unintentional; and objective determinations of 2) whether the error leading to FDCPA violation was bona fide, and 3) whether defendants maintained reasonable procedures to avoid such an error. When the error involves an alleged mistake of law, these last two elements "merge with one inquiry driving the other." Noting a split of authority on the issue, the court said that it was siding with a "'growing minority of courts' that finding mistakes of law can satisfy the FDCPA's bona fide error defense."
The court noted that there is a difference between a debt collector relying on the interpretation of a disinterested third party, such as a regulator, e.g. Kort v. Diversified Collection Services, 394 F.3d 530, 533-4 (7th Cir. 2005), from one relying on "their own expansive statutory interpretations that theoretically would have the effect of insulating them from liability under the FDCPA, e.g., Johnson v. Riddle, 443 F.3d 7213, 727-8 (10th Cir. 2006).
http://www.paed.uscourts.gov/documents/opinions/08D0113P.pdf
Plaintiff sued defendants -- a collection agency and a law firm -- under various consumer statutes for bringing suit to collect a debt on which the statute of limitations had run. Defendants moved for summary judgment, claiming that the statute of limitations for such actions was 6 years and that their suit against plaintiff was filed within that period.
The court rejected this argument, holding that the statute of limitations on an alleged credit card debt is four (4) years under the standard contract provision in 42 Pa. C.S. 5525(a).
account stated - The court rejected the defendants' claim that they had sued plaintiff within the proper limitations period, which they said was six years, under 42 Pa. C.S. 5527(b), which covers cases which do not come under any other specified limit. The defendants claimed that the debt was on an "account stated." After a thorough review of the law of "account stated," the court said the it was "just a variety of contract" and came under the 4-year statute covering contracts.
letter from attorney was attempt to collect debt - The court also rejected the claim that the debt collector's attorneys were not themselves acting as debt collectors, noting a pre-suit letter to plaintiff stating that "this is an attempt by a debt collector to collect a debt," with no reference to an impending legal action or any suggestion that it was part of an attempt to prosecute a lawsuit. The court said that the letter created attorney liability under the state debt collection law, 73 Pa. C.S. 2270.1 et seq., which in turn established per se liability under the state consumer protection law, 73 P.S. 201-1 et seq.
bona fide error defense - The court refused summary judgment on defendants' claim under the bona fide error defense, 15 USC 1992k(c) and 72 P.S. 2270.5(d), holding that under the facts, there was a jury question as to whether defendant Palisades national survey of statutes of limitations was, as a matter of law, a measure that was reasonably adapted to avoid the error that occurred here.
The bona fide error defense involves three prongs: 1) a (subjective) determination of whether the violation was unintentional; and objective determinations of 2) whether the error leading to FDCPA violation was bona fide, and 3) whether defendants maintained reasonable procedures to avoid such an error. When the error involves an alleged mistake of law, these last two elements "merge with one inquiry driving the other." Noting a split of authority on the issue, the court said that it was siding with a "'growing minority of courts' that finding mistakes of law can satisfy the FDCPA's bona fide error defense."
The court noted that there is a difference between a debt collector relying on the interpretation of a disinterested third party, such as a regulator, e.g. Kort v. Diversified Collection Services, 394 F.3d 530, 533-4 (7th Cir. 2005), from one relying on "their own expansive statutory interpretations that theoretically would have the effect of insulating them from liability under the FDCPA, e.g., Johnson v. Riddle, 443 F.3d 7213, 727-8 (10th Cir. 2006).
Tuesday, January 29, 2008
disability - treating physician opinion - duty of ALJ to develop record
Nguyen v. Astrue - ED Pa. - January 23, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0094P.pdf
Case remanded for proper consideration of the opinion of the treating psychiatrist.
The ALJ errors included
- improperly relying on claimant's failure to allege any symptoms in his Social Security paperwork failing to tell the treating psychiatrist about experiencing emotional problems as of a certain date. The court held that these “facts” are entitled to “no weight . . . because neither are based on ‘contrary medical evidence.’
- improperly considering claimant's failure to discuss his emotional problems with his family physician. That cannot negate the opinion of his treating psychiatrist, the specialist claimant consulted for his specific problem.”
- the fact that Mr. Nguyen told his doctor that he was "doing okay on the medication and was less depressed” does does not expressly contradict treating physician's opinion and substitutes the ALJ’s clinical judgment for that of the treating psychiatrist. The notes do not expressly contradict the physician's opinion. In so finding, the ALJ’s substituted his clinical judgment for that of the treating psychiatrist. The ALJ did not identify a contradiction between the doctor's notes and her opinion, but instead “set [the ALJ’s] own expertise against that of a physician who presents competent evidence.” Ferguson v. Schweiker, 765 F.2d 31, 37 (1985).
- The ALJ's statement that the treating physician's report was completely unsubstantiated by any contemporaneous clinical notes or testing. . . .is belied by the record"
- duty to develop the record - The ALJ, in considering the submissions of a claimant’s treating psychiatrist, has a limited duty to develop the record if he finds those submissions, in certain respects, inadequate to support the conclusions the psychiatrist makes. See Ferguson, 765 F.2d at 36 (“[I]f the ALJ believed [a claimant’s medical] evidence was inconclusive or unclear, it was incumbent upon him to secure whatever evidence he needed to make a sound determination.”). Pursuant to 20 C.F.R. § 404.1512(e)(1), the ALJ must “seek additional evidence or clarification from [a claimant’s] medical source when the report from [the] medical source contains a conflict or ambiguity that must be resolved, the report does not contain all the necessary information, or does not appear to be based on medically acceptable clinical and laboratory diagnostic techniques.” This specific regulation is an instance of the ALJ’s broader “duty to develop a full and fair record in social security cases.” Ventura v. Shalala, 55 F.3d 900, 902 (3d Cir. 1995).
This duty is “heightened” when plaintiff is without counsel, Dobrowolsky v. Califano, 606 F.2d 403, 407 (3d Cir. 1979), but still exists when plaintiff is represented. See Ventura, 55 F.3d at 902 (concluding, in a case where the claimant was represented by counsel but the ALJ was biased, that the ALJ’s duty to develop the record stems from the non-adversarial nature of social security hearings and the “beneficent purposes” of the Social Security Act).
Thus, while claimant bears the burden of providing evidence that the Commissioner “can use to reach conclusions about [the claimant’s] medical impairment(s),” 20 C.F.R. § 416.912(a), circumstances may arise where the ALJ, when presented with such evidence, may be compelled to develop the record in order to corroborate or discredit the claimant’s submissions. An “essential inquiry” for determining when this duty arises “is whether the incomplete record reveals evidentiary gaps which result in prejudice to the claimant.” Gauthney v. Shalala, 890 F. Supp. 401, 410 (E.D. Pa. 1995). Schwartz v. Halter, 134 F. Supp. 2d 640, 656 (E.D. Pa. 2001) (holding that the ALJ’s duty to develop the record “exists even when the claimant is represented by counsel because an administrative hearing is not an adversarial proceeding . . . ”); Battles v. Shalala, 36 F.3d 43, 44 (8th Cir. 1994) (holding that “the duty to develop the record fully and fairly” exists “‘even if . . . the claimant is represented by counsel’” (quoting Boyd v. Sullivan, 960 F.2d 733, 736 (8th Cir.1992) (internal quotation omitted)).
http://www.paed.uscourts.gov/documents/opinions/08D0094P.pdf
Case remanded for proper consideration of the opinion of the treating psychiatrist.
The ALJ errors included
- improperly relying on claimant's failure to allege any symptoms in his Social Security paperwork failing to tell the treating psychiatrist about experiencing emotional problems as of a certain date. The court held that these “facts” are entitled to “no weight . . . because neither are based on ‘contrary medical evidence.’
- improperly considering claimant's failure to discuss his emotional problems with his family physician. That cannot negate the opinion of his treating psychiatrist, the specialist claimant consulted for his specific problem.”
- the fact that Mr. Nguyen told his doctor that he was "doing okay on the medication and was less depressed” does does not expressly contradict treating physician's opinion and substitutes the ALJ’s clinical judgment for that of the treating psychiatrist. The notes do not expressly contradict the physician's opinion. In so finding, the ALJ’s substituted his clinical judgment for that of the treating psychiatrist. The ALJ did not identify a contradiction between the doctor's notes and her opinion, but instead “set [the ALJ’s] own expertise against that of a physician who presents competent evidence.” Ferguson v. Schweiker, 765 F.2d 31, 37 (1985).
- The ALJ's statement that the treating physician's report was completely unsubstantiated by any contemporaneous clinical notes or testing. . . .is belied by the record"
- duty to develop the record - The ALJ, in considering the submissions of a claimant’s treating psychiatrist, has a limited duty to develop the record if he finds those submissions, in certain respects, inadequate to support the conclusions the psychiatrist makes. See Ferguson, 765 F.2d at 36 (“[I]f the ALJ believed [a claimant’s medical] evidence was inconclusive or unclear, it was incumbent upon him to secure whatever evidence he needed to make a sound determination.”). Pursuant to 20 C.F.R. § 404.1512(e)(1), the ALJ must “seek additional evidence or clarification from [a claimant’s] medical source when the report from [the] medical source contains a conflict or ambiguity that must be resolved, the report does not contain all the necessary information, or does not appear to be based on medically acceptable clinical and laboratory diagnostic techniques.” This specific regulation is an instance of the ALJ’s broader “duty to develop a full and fair record in social security cases.” Ventura v. Shalala, 55 F.3d 900, 902 (3d Cir. 1995).
This duty is “heightened” when plaintiff is without counsel, Dobrowolsky v. Califano, 606 F.2d 403, 407 (3d Cir. 1979), but still exists when plaintiff is represented. See Ventura, 55 F.3d at 902 (concluding, in a case where the claimant was represented by counsel but the ALJ was biased, that the ALJ’s duty to develop the record stems from the non-adversarial nature of social security hearings and the “beneficent purposes” of the Social Security Act).
Thus, while claimant bears the burden of providing evidence that the Commissioner “can use to reach conclusions about [the claimant’s] medical impairment(s),” 20 C.F.R. § 416.912(a), circumstances may arise where the ALJ, when presented with such evidence, may be compelled to develop the record in order to corroborate or discredit the claimant’s submissions. An “essential inquiry” for determining when this duty arises “is whether the incomplete record reveals evidentiary gaps which result in prejudice to the claimant.” Gauthney v. Shalala, 890 F. Supp. 401, 410 (E.D. Pa. 1995). Schwartz v. Halter, 134 F. Supp. 2d 640, 656 (E.D. Pa. 2001) (holding that the ALJ’s duty to develop the record “exists even when the claimant is represented by counsel because an administrative hearing is not an adversarial proceeding . . . ”); Battles v. Shalala, 36 F.3d 43, 44 (8th Cir. 1994) (holding that “the duty to develop the record fully and fairly” exists “‘even if . . . the claimant is represented by counsel’” (quoting Boyd v. Sullivan, 960 F.2d 733, 736 (8th Cir.1992) (internal quotation omitted)).
Monday, January 28, 2008
PA Bar Association Issues Ethics Opinion on Mining Metadata
The Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility has recently issued Formal Opinion, 2007-500, on the subject or mining metadata received in materials furnished by opposing counsel.
Metadata is information embeded within electronic documents that may not be viewed in a printed version of the document. It may include information about the creation of the document including information about the author, date, time or location where it was created. Metadata may also contain information deleted from earlier versions of the document, or information contained in comments made by reviewers during the document's creation.
The Committee concluded that, under the Pennsylvania Rules of Professional Conduct, each attorney must determine for himself or herself whether to utilize the metadata contained in documents and other electronic files based upon the lawyer’s judgment and the particular factual situation.
This determination should be based upon the nature of the information received, how and from whom the information was received, attorney-client privilege and work product rules, and common sense, reciprocity and professional courtesy.
Although the waiver of the attorney-client privilege with respect to privileged and confidential materials is a matter for judicial determination, the Committee believed that the inadvertent transmissions of such materials should not constitute a waiver of the privilege, except in the case of extreme carelessness or indifference.
The Committee noted that there is no specific Pennsylvania Rule of Professional Conduct determining the ethical obligations of a lawyer receiving inadvertently transmitted metadata from another lawyer, his client or other third person; and, there is no specific Pennsylvania Rule of Professional Conduct requiring the receiving lawyer to assess whether the opposing lawyer has violated any ethical obligation to the lawyer's client.
In reaching its conclusion, the Committee reviewed decisions from other jurisdictions in light of the existing rules in Pennsylvania.
The Opinion is available to Pennsylvania Bar Association members on the PA Bar Association website at the link below.
PA Bar Association Ethics Opinions
Metadata is information embeded within electronic documents that may not be viewed in a printed version of the document. It may include information about the creation of the document including information about the author, date, time or location where it was created. Metadata may also contain information deleted from earlier versions of the document, or information contained in comments made by reviewers during the document's creation.
The Committee concluded that, under the Pennsylvania Rules of Professional Conduct, each attorney must determine for himself or herself whether to utilize the metadata contained in documents and other electronic files based upon the lawyer’s judgment and the particular factual situation.
This determination should be based upon the nature of the information received, how and from whom the information was received, attorney-client privilege and work product rules, and common sense, reciprocity and professional courtesy.
Although the waiver of the attorney-client privilege with respect to privileged and confidential materials is a matter for judicial determination, the Committee believed that the inadvertent transmissions of such materials should not constitute a waiver of the privilege, except in the case of extreme carelessness or indifference.
The Committee noted that there is no specific Pennsylvania Rule of Professional Conduct determining the ethical obligations of a lawyer receiving inadvertently transmitted metadata from another lawyer, his client or other third person; and, there is no specific Pennsylvania Rule of Professional Conduct requiring the receiving lawyer to assess whether the opposing lawyer has violated any ethical obligation to the lawyer's client.
In reaching its conclusion, the Committee reviewed decisions from other jurisdictions in light of the existing rules in Pennsylvania.
The Opinion is available to Pennsylvania Bar Association members on the PA Bar Association website at the link below.
PA Bar Association Ethics Opinions
Wednesday, January 23, 2008
consumer - warranty - UCC- UTPCPL - Magnuson-Moss
Woolums v. National RV - MD Pa. - January 17, 2008
http://www.pamd.uscourts.gov/opinions/Conner/06v0787.pdf
Plaintiff sued under the UCC,13 Pa. C.S 2313-2316; the Consumer Protection Law, 73 P.S. 201-1 et seq.; and the Magnuson-Moss Warranty-FTC Improvement Act, 15 USC 2301-2312. The case was originally brought in state court, but removed to federal court on defendant's motion.
Defendant moved for summary judgment on all claims. The court granted the motion only as to breach of the implied warranties of merchantability and fitness for a particular purpose, holding that they had been properly disclaimed -- it was in writing, was conspicuous, and used appropriate and understandable language. Defendant's motion for summary judgment was denied as to all other claims, based on applicable law and because there were genuine issues as to material facts.
Defendant issued a one-year limited warranty covering the costs of repairing or replacing parts and labor to correct Covered Defects, which are limited to the any manufacture or assembly process performed by National. Problems with other parts were outside of this warranty. There was no representation that the covered parts or workmanship conformed to any standard of quality or performance. Plaintiff had numerous problems with the RV and took it in for repairs on many occasions.
seller's promise to repair or replace is an express warranty under UCC 2313(a)(1)
Noting a split of authority on the issue, which it said Pennsylvania courts have not squarely addressed, the court held that the "repair-or-replace covenant constitutes an express warranty actionable under the UCC, 13 Pa. C.S 2313(a)(1). The court noted the "breadth of statutory language [that] provides that "any affirmation of fact or promises...creates an express warranty that the good shall conform to the affirmation or promise...[T]he word 'any' suggests that all express promises that pertain to the goods become warranties, even if they do not specifically address the goods' quality or nature...The UCC official comments confirm that sec. 2313 is to be given a wide berth." National itself used the term "express warranty." Under those circumstances, the court said the "it would be fundamentally unfair to permit National to invoke an illusory construction of its contractual language, leaving merely a remedial promise to repair" instead of the express promise to repair or replace.
The court noted that the "express warranty at issue, like many contracts between commercial sellers and consumer, is one of adhesion....Adhesion contracts are not per se invalid, but courts strictly construe them against the drafting party, who holds a position of superior bargaining power and can dictate the agreement's terms."
failure of limited remedy to accomplish its essential purpose
The court held that the parties' positions differed significantly on the issue of whether defendant's attempt to limit plaintiff's remedies caused them to "fail of its essential purpose" under UCC sec. 2719(b), thus raising a jury question and precluding summary judgment, given the buyer's proffered evidence that he was unable to use the motor home for about eight months because of repairs that were covered by the warranty. An exclusive repair--as opposed to repair-replace-- remedy is acceptable, "so long as the buyer has the use of substantially defect-free goods. But when the seller is either unwilling or unable to conform the good to the contract, the remedy does not suffice" and fails of its essential purpose.
Magnuson-Moss warranty claim - 15 USC 2301 et seq.
This act "provides relief for consumers 'damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under [the Act] or under a written warranty, implied warranty, or service contract.' 15 USC 2301(d)(1)..."Written warranties under the act include those which guarantee that the seller will 'repair, replace, or take other remedial action with respect to a defective product in the event that such product fails to meet the specifications set forth in the undertaking...A violation of the act allows the consumer to seek recovery of the purchase price of the product plus attorney's fees and costs. The court denied defendant's motion for summary judgment on this claim, finding that "a reasonable jury could find that defendant failed to abide by the term of the warranty," in violation of the statute.
state consumer protection claim 73 P.S. 201-1 et seq.
A failure to comply with the terms of any written guarantee or warranty is actionable under the CPL, sec. 201-2(4)(xiv). Summary judgment for defendant denied because of genuine issue of material fact.
http://www.pamd.uscourts.gov/opinions/Conner/06v0787.pdf
Plaintiff sued under the UCC,13 Pa. C.S 2313-2316; the Consumer Protection Law, 73 P.S. 201-1 et seq.; and the Magnuson-Moss Warranty-FTC Improvement Act, 15 USC 2301-2312. The case was originally brought in state court, but removed to federal court on defendant's motion.
Defendant moved for summary judgment on all claims. The court granted the motion only as to breach of the implied warranties of merchantability and fitness for a particular purpose, holding that they had been properly disclaimed -- it was in writing, was conspicuous, and used appropriate and understandable language. Defendant's motion for summary judgment was denied as to all other claims, based on applicable law and because there were genuine issues as to material facts.
Defendant issued a one-year limited warranty covering the costs of repairing or replacing parts and labor to correct Covered Defects, which are limited to the any manufacture or assembly process performed by National. Problems with other parts were outside of this warranty. There was no representation that the covered parts or workmanship conformed to any standard of quality or performance. Plaintiff had numerous problems with the RV and took it in for repairs on many occasions.
seller's promise to repair or replace is an express warranty under UCC 2313(a)(1)
Noting a split of authority on the issue, which it said Pennsylvania courts have not squarely addressed, the court held that the "repair-or-replace covenant constitutes an express warranty actionable under the UCC, 13 Pa. C.S 2313(a)(1). The court noted the "breadth of statutory language [that] provides that "any affirmation of fact or promises...creates an express warranty that the good shall conform to the affirmation or promise...[T]he word 'any' suggests that all express promises that pertain to the goods become warranties, even if they do not specifically address the goods' quality or nature...The UCC official comments confirm that sec. 2313 is to be given a wide berth." National itself used the term "express warranty." Under those circumstances, the court said the "it would be fundamentally unfair to permit National to invoke an illusory construction of its contractual language, leaving merely a remedial promise to repair" instead of the express promise to repair or replace.
The court noted that the "express warranty at issue, like many contracts between commercial sellers and consumer, is one of adhesion....Adhesion contracts are not per se invalid, but courts strictly construe them against the drafting party, who holds a position of superior bargaining power and can dictate the agreement's terms."
failure of limited remedy to accomplish its essential purpose
The court held that the parties' positions differed significantly on the issue of whether defendant's attempt to limit plaintiff's remedies caused them to "fail of its essential purpose" under UCC sec. 2719(b), thus raising a jury question and precluding summary judgment, given the buyer's proffered evidence that he was unable to use the motor home for about eight months because of repairs that were covered by the warranty. An exclusive repair--as opposed to repair-replace-- remedy is acceptable, "so long as the buyer has the use of substantially defect-free goods. But when the seller is either unwilling or unable to conform the good to the contract, the remedy does not suffice" and fails of its essential purpose.
Magnuson-Moss warranty claim - 15 USC 2301 et seq.
This act "provides relief for consumers 'damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under [the Act] or under a written warranty, implied warranty, or service contract.' 15 USC 2301(d)(1)..."Written warranties under the act include those which guarantee that the seller will 'repair, replace, or take other remedial action with respect to a defective product in the event that such product fails to meet the specifications set forth in the undertaking...A violation of the act allows the consumer to seek recovery of the purchase price of the product plus attorney's fees and costs. The court denied defendant's motion for summary judgment on this claim, finding that "a reasonable jury could find that defendant failed to abide by the term of the warranty," in violation of the statute.
state consumer protection claim 73 P.S. 201-1 et seq.
A failure to comply with the terms of any written guarantee or warranty is actionable under the CPL, sec. 201-2(4)(xiv). Summary judgment for defendant denied because of genuine issue of material fact.
Friday, January 18, 2008
bankruptcy - appeals - final order
In re Truong - 3rd Circuit - January 16, 23008
http://www.ca3.uscourts.gov/opinarch/063980p.pdf
An order which "merely denied [a] request for a hearing concerning an alleged conflict of interest on the part of the trustee" is not final and appealable under 28 USC 158(a). It was a "purely interlocutory order" and did not "end the litigation on the merits" or "dispose of any discrete claim or cause of action." .
The court reached this decision, even though there are finality considerations unique to bankruptcy appeals, in which the courts "traditionally impose a 'relaxed standard of finality.' " A "general antipathy toward appeals still prevails in individual adversary actions...[E]ven in bankruptcy appeals the concept of finality is not open-ended."
http://www.ca3.uscourts.gov/opinarch/063980p.pdf
An order which "merely denied [a] request for a hearing concerning an alleged conflict of interest on the part of the trustee" is not final and appealable under 28 USC 158(a). It was a "purely interlocutory order" and did not "end the litigation on the merits" or "dispose of any discrete claim or cause of action." .
The court reached this decision, even though there are finality considerations unique to bankruptcy appeals, in which the courts "traditionally impose a 'relaxed standard of finality.' " A "general antipathy toward appeals still prevails in individual adversary actions...[E]ven in bankruptcy appeals the concept of finality is not open-ended."
Thursday, January 17, 2008
employment - wages - FLSA - donning and doffing
Lugo v. Farmer's Pride, Inc. - ED Pa. - January 14, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0061P.pdf
The court denied defendant's 12(b)(6) motion to dismiss plaintiffs' claims for wages for time donning and doffing work clothing, holding that it would be premature to rule on such mixed questions of law and fact without further development of the record.
The issue is whether the donning and doffing is "integral and indispensable " to employee's work and thus compensable under the Fair Labor Standards Act, 29 USC sec. 201 et seq., the Portal-to-Portal Act, 29 USC 254(a), and IBP, Inc. v. Alvarez, 546 U.S. 21 (2005) and its progeny.
http://www.paed.uscourts.gov/documents/opinions/08D0061P.pdf
The court denied defendant's 12(b)(6) motion to dismiss plaintiffs' claims for wages for time donning and doffing work clothing, holding that it would be premature to rule on such mixed questions of law and fact without further development of the record.
The issue is whether the donning and doffing is "integral and indispensable " to employee's work and thus compensable under the Fair Labor Standards Act, 29 USC sec. 201 et seq., the Portal-to-Portal Act, 29 USC 254(a), and IBP, Inc. v. Alvarez, 546 U.S. 21 (2005) and its progeny.
Wednesday, January 16, 2008
Commonwealth Court - unreported opinions - indefinite posting
As of January 15, 2008 (and at the request of the Commonwealth Court), the following changes have been made to the webpage where its opinions are posted
http://www.courts.state.pa.us/OpPosting/index/CWealthOpindex.asp
Unreported opinions - indefinite posting
Unreported opinions will be posted indefinitely. Previously, they were removed after 90 days. All unreported opinions less than 90 days old, posted prior to January 15 are available through a link on the unreported opinions webpage titled ‘Unreported Opinions Prior to Jan. 15, 2008.’
Order of posting - most recent to oldest
The default sort order for both reported and unreported postings is now from the most recent to the oldest, as requested by many users. This posting order is also being followed on Superior http://www.courts.state.pa.us/OpPosting/index/SuperiorOpindex.asp and Supreme Court http://www.courts.state.pa.us/OpPosting/index/SupremeOpindex.asp opinion sites
http://www.courts.state.pa.us/OpPosting/index/CWealthOpindex.asp
Unreported opinions - indefinite posting
Unreported opinions will be posted indefinitely. Previously, they were removed after 90 days. All unreported opinions less than 90 days old, posted prior to January 15 are available through a link on the unreported opinions webpage titled ‘Unreported Opinions Prior to Jan. 15, 2008.’
Order of posting - most recent to oldest
The default sort order for both reported and unreported postings is now from the most recent to the oldest, as requested by many users. This posting order is also being followed on Superior http://www.courts.state.pa.us/OpPosting/index/SuperiorOpindex.asp and Supreme Court http://www.courts.state.pa.us/OpPosting/index/SupremeOpindex.asp opinion sites
Sunday, January 13, 2008
bankruptcy - credit counseling prior to filing
In re Hoshan - ED Pa. - January 7, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0029P.pdf
This Chapter 13 case was held to have been properly dismissed, because the debtor/appellant did not get or certify that she got credit counseling before filing the bankruptcy, as required by 11 USC sec. 109(h)(1).
The debtor filed her petition on March 30th, lacking a number of documents, including either a certificate that she had already received credit counseling or a request for an extension or exemption from that requirement, due to exigent circumstances. She didn't actually get credit counseling until April 3rd, and filed a certificate to that effect on April 30th.
Bankruptcy Rule 9006(b)(1) allows the court discretion to excuse late filing due to "exigent circumstances" and the debtor made a "persuasive case" for that. But the court said that the "real issue....is not the late filing [but] that the appellant did not receive credit counseling before she filed her bankruptcy."
Although the court recognized that the counseling requirement is not jurisdictional, it noted that "[m]osts courts have concluded that dismissal is mandated when the debtor has not complied with the credit counseling requirement."
Noting that "[s]ome courts have waived the credit counseling requirements to avoid manifest injustice," the court said that the debtor did not meet that test, even thought it was "sympathetic to the challenges the appellant faces as the mother of seven children and the primary caretaker for her injured husband....Her family situation, while difficult, does not rise to the level of those cases in which courts avoid manifest injustice by waiving the credit counseling requirement."
The court cited In re Manalad, 360 B.R. 288, 296 (Bankr. C.D. Cal. 2007) (debtor’s counsel mistakenly advised him that his non-consumer debts were not subject to the requirements); In re Vollmer, 2007 WL 541747 Bankr. E.D. Va. 2007) (debtor was incarcerated at the time he filed his petition and had no access to a credit counselor); In re Petit-Louis, 344 B.R. 696 (Bankr. S.D. Fla. 2006) (debtor spoke only Creole and no Creole-speaking credit counselor was available); In re Bricksin, 346 B.R. 497 (Bankr. N.D. Cal. 2006) (debtors had set up a payment plan with a credit counseling agency and had been making payments but failed to file the certificate with their bankruptcy petition).
http://www.paed.uscourts.gov/documents/opinions/08D0029P.pdf
This Chapter 13 case was held to have been properly dismissed, because the debtor/appellant did not get or certify that she got credit counseling before filing the bankruptcy, as required by 11 USC sec. 109(h)(1).
The debtor filed her petition on March 30th, lacking a number of documents, including either a certificate that she had already received credit counseling or a request for an extension or exemption from that requirement, due to exigent circumstances. She didn't actually get credit counseling until April 3rd, and filed a certificate to that effect on April 30th.
Bankruptcy Rule 9006(b)(1) allows the court discretion to excuse late filing due to "exigent circumstances" and the debtor made a "persuasive case" for that. But the court said that the "real issue....is not the late filing [but] that the appellant did not receive credit counseling before she filed her bankruptcy."
Although the court recognized that the counseling requirement is not jurisdictional, it noted that "[m]osts courts have concluded that dismissal is mandated when the debtor has not complied with the credit counseling requirement."
Noting that "[s]ome courts have waived the credit counseling requirements to avoid manifest injustice," the court said that the debtor did not meet that test, even thought it was "sympathetic to the challenges the appellant faces as the mother of seven children and the primary caretaker for her injured husband....Her family situation, while difficult, does not rise to the level of those cases in which courts avoid manifest injustice by waiving the credit counseling requirement."
The court cited In re Manalad, 360 B.R. 288, 296 (Bankr. C.D. Cal. 2007) (debtor’s counsel mistakenly advised him that his non-consumer debts were not subject to the requirements); In re Vollmer, 2007 WL 541747 Bankr. E.D. Va. 2007) (debtor was incarcerated at the time he filed his petition and had no access to a credit counselor); In re Petit-Louis, 344 B.R. 696 (Bankr. S.D. Fla. 2006) (debtor spoke only Creole and no Creole-speaking credit counselor was available); In re Bricksin, 346 B.R. 497 (Bankr. N.D. Cal. 2006) (debtors had set up a payment plan with a credit counseling agency and had been making payments but failed to file the certificate with their bankruptcy petition).
Tuesday, January 08, 2008
Free Public Access to all Pennsylvania Statutes - PS and Pa. C.S.
The complete unannotated version of Purdon's Pennsylvania Statutes is now available for free on the Internet. The Unofficial Purdon's Pennsylvania Statutes from West are now available directly from the link below or from the website of the Pennsylvania General Assembly.
Previously, no official statutes were available online. Then in July 2007 the General Assembly posted the official consolidated statutes for Pennsylvania on the Internet. Now the unofficial Purdon's Pennsylvania Statutes from West has replaced the official consolidated version.
Although Purdon’s is not an official publication of the Commonwealth of Pennsylvania, it is still probably the best resource to use when researching the laws of Pennsylvania by subject.West’s Purdon’s Pennsylvania Statutes, hosted by Westlaw, is easy to browse and can be searched using natural language or by typing a statute citation in quotations. This free version is not annotated and does not include court rules.
Court rules and state agency regulations are available on the Pennsylvania Code website http://www.pacode.com/, which is free and searchable.
Proposed regulations and court rules, as well as official notices, etc., are available in the Pennsylvania Bulletin http://www.pabulletin.com/, which is also free and searchable.
Unofficial Purdon's Pennsylvania Statutes from West
Previously, no official statutes were available online. Then in July 2007 the General Assembly posted the official consolidated statutes for Pennsylvania on the Internet. Now the unofficial Purdon's Pennsylvania Statutes from West has replaced the official consolidated version.
Although Purdon’s is not an official publication of the Commonwealth of Pennsylvania, it is still probably the best resource to use when researching the laws of Pennsylvania by subject.West’s Purdon’s Pennsylvania Statutes, hosted by Westlaw, is easy to browse and can be searched using natural language or by typing a statute citation in quotations. This free version is not annotated and does not include court rules.
Court rules and state agency regulations are available on the Pennsylvania Code website http://www.pacode.com/, which is free and searchable.
Proposed regulations and court rules, as well as official notices, etc., are available in the Pennsylvania Bulletin http://www.pabulletin.com/, which is also free and searchable.
Unofficial Purdon's Pennsylvania Statutes from West
Friday, January 04, 2008
predatory mortgages
Parker v. Long Beach Mortgage Company - ED Pa. - January 3, 2008
http://www.paed.uscourts.gov/documents/opinions/08D0015P.pdf
Although the court rejected the consumer claims of the plaintiffs, "relatively sophisticated borrowers" one of whom had a real estate license, there is some potentially useful language in the opinion.
The court noted that the dispute involved a "broker and four lending institutions [and] embodies many of the factors identified with predatory, subprime mortgage loans:[ n.1] an aggressive mortgage broker, no document loans, interest climbing to double-digit rates, escalating payments, balloon payments, prepayment penalties, and negative amortization. As distasteful as the practices may be, [n. 2] that odor of opportunism is not enough to save [the plaintiffs] from themselves."
n.1 - HUD-Treasury Joint Report http://www.hud.gov/library/bookshelf12/pressrel/treasrpt.pdf
n. 2 - The power to curb predatory practices lies either in consumer education or with Congress; as a court of limited jurisdiction, I may only enforce the laws as written, not as I would wish they were written.
http://www.paed.uscourts.gov/documents/opinions/08D0015P.pdf
Although the court rejected the consumer claims of the plaintiffs, "relatively sophisticated borrowers" one of whom had a real estate license, there is some potentially useful language in the opinion.
The court noted that the dispute involved a "broker and four lending institutions [and] embodies many of the factors identified with predatory, subprime mortgage loans:[ n.1] an aggressive mortgage broker, no document loans, interest climbing to double-digit rates, escalating payments, balloon payments, prepayment penalties, and negative amortization. As distasteful as the practices may be, [n. 2] that odor of opportunism is not enough to save [the plaintiffs] from themselves."
n.1 - HUD-Treasury Joint Report http://www.hud.gov/library/bookshelf12/pressrel/treasrpt.pdf
n. 2 - The power to curb predatory practices lies either in consumer education or with Congress; as a court of limited jurisdiction, I may only enforce the laws as written, not as I would wish they were written.
evidence - immature witnesses
Commonwealth v. Davis - Superior Court - December 17, 2007
http://www.aopc.org/OpPosting/Superior/out/a29031_07.pdf
The determination of a witness's competency rests within the sound discretion of the trial court. The decision of the trial court will not be disturbed absent a clear abuse of that discretion. The "standard of review of rulings on the competency of witnesses is very limited indeed. "
In Pennsylvania, the general rule is that every witness is presumed to be competent to be a witness. However, young children must be examined for competency pursuant to the following test:
(1) The witness must be capable of expressing intelligent answers to questions;
(2) The witness must have been capable of observing the event to be testified about and have the ability to remember it; and,
(3) An awareness of the duty to tell the truth.
If there is an allegation of taint, the inquiry centers on the second element. The “appropriate venue” for investigation into such a claim is a competency hearing , centered on the inquiry into the minimal capacity of the witness to communicate, to observe an event and accurately recall that observation, and to understand the necessity to speak the truth.
Pennsylvania courts have recognized that an immature witness’s testimony can be tainted by the inquiries of adults. In that instance, the core belief underlying the theory of taint is that a child's memory is peculiarly susceptible to suggestibility so that when called to testify a child may have difficulty distinguishing fact from fantasy. Taint is the implantation of false memories or the distortion of real memories caused by interview techniques of law enforcement, social service personnel, and other interested adults, that are so unduly suggestive and coercive as to infect the memory of the child, rendering that child incompetent to testify.
The capacity of young children to testify has always been a concern, since immaturity can impact a child's ability to meet the minimal legal requirements of competency. Common experience informs us that children are, by their very essence, fanciful creatures who have difficulty distinguishing fantasy from reality; who when asked a question want to give the “right” answer, the answer that pleases the interrogator; who are subject to repeat ideas placed in their heads by others; and who have limited capacity for accurate memory.
In order to trigger an investigation of competency on the issue of taint, the moving party must show some evidence of taint. Once some evidence of taint is presented, the competency hearing must be expanded to explore this specific question. During the hearing the party alleging taint bears the burden of production of evidence of taint and the burden of persuasion to show taint by clear and convincing evidence. Pennsylvania has always maintained that since competency is the presumption, the moving party must carry the burden of overcoming that presumption .
http://www.aopc.org/OpPosting/Superior/out/a29031_07.pdf
The determination of a witness's competency rests within the sound discretion of the trial court. The decision of the trial court will not be disturbed absent a clear abuse of that discretion. The "standard of review of rulings on the competency of witnesses is very limited indeed. "
In Pennsylvania, the general rule is that every witness is presumed to be competent to be a witness. However, young children must be examined for competency pursuant to the following test:
(1) The witness must be capable of expressing intelligent answers to questions;
(2) The witness must have been capable of observing the event to be testified about and have the ability to remember it; and,
(3) An awareness of the duty to tell the truth.
If there is an allegation of taint, the inquiry centers on the second element. The “appropriate venue” for investigation into such a claim is a competency hearing , centered on the inquiry into the minimal capacity of the witness to communicate, to observe an event and accurately recall that observation, and to understand the necessity to speak the truth.
Pennsylvania courts have recognized that an immature witness’s testimony can be tainted by the inquiries of adults. In that instance, the core belief underlying the theory of taint is that a child's memory is peculiarly susceptible to suggestibility so that when called to testify a child may have difficulty distinguishing fact from fantasy. Taint is the implantation of false memories or the distortion of real memories caused by interview techniques of law enforcement, social service personnel, and other interested adults, that are so unduly suggestive and coercive as to infect the memory of the child, rendering that child incompetent to testify.
The capacity of young children to testify has always been a concern, since immaturity can impact a child's ability to meet the minimal legal requirements of competency. Common experience informs us that children are, by their very essence, fanciful creatures who have difficulty distinguishing fantasy from reality; who when asked a question want to give the “right” answer, the answer that pleases the interrogator; who are subject to repeat ideas placed in their heads by others; and who have limited capacity for accurate memory.
In order to trigger an investigation of competency on the issue of taint, the moving party must show some evidence of taint. Once some evidence of taint is presented, the competency hearing must be expanded to explore this specific question. During the hearing the party alleging taint bears the burden of production of evidence of taint and the burden of persuasion to show taint by clear and convincing evidence. Pennsylvania has always maintained that since competency is the presumption, the moving party must carry the burden of overcoming that presumption .
state pre-emption of local law-making
Nutter v. Dougherty, et al. - Pennsylvania Supreme Court - December 28, 2007
http://www.aopc.org/OpPosting/Supreme/out/J-89-2007mo.pdf
State law pre-empts local lawmaking where
- a state statute specifically declares that it has "planted the flag of pre-emption in a field" (express pre-emption)
- a state statute "proclaimes a course of regulation and control which brooks no municipal intervention" (field pre-emption)
- local law contradicts or contravenes state law (conflict pre-emption)
http://www.aopc.org/OpPosting/Supreme/out/J-89-2007mo.pdf
State law pre-empts local lawmaking where
- a state statute specifically declares that it has "planted the flag of pre-emption in a field" (express pre-emption)
- a state statute "proclaimes a course of regulation and control which brooks no municipal intervention" (field pre-emption)
- local law contradicts or contravenes state law (conflict pre-emption)
evidence - value of property - proof - testimony v. document
Nelson v. State Board of Veterinary Medicine - Commonwealth Court - December 17, 2007
http://www.aopc.org/OpPosting/CWealth/out/75CD07_12-17-07.pdf
The testimony of the owner of an asset is competent to prove its value, so long as it is based on the owner's personal knowledge. Written documents are not preferable to oral statements. The best evidence rule does not apply where the matter to be proved exists independently of a writing that might also be probative.
http://www.aopc.org/OpPosting/CWealth/out/75CD07_12-17-07.pdf
The testimony of the owner of an asset is competent to prove its value, so long as it is based on the owner's personal knowledge. Written documents are not preferable to oral statements. The best evidence rule does not apply where the matter to be proved exists independently of a writing that might also be probative.
Sunday, December 30, 2007
consumer - arbitration clause - credit repair
Gay v. Creditinform - 3rd Circuit - December 19, 2007
http://www.ca3.uscourts.gov/opinarch/064036p.pdf
Enforcing the contractual arbitration clause pursuant to the Federal Arbitration Act, 9 USC sec. 2, the Third Circuit affirmed the district court in granting the defendant's motion to compel arbitration, on an individual basis, of the plaintiff's proposed class action under the Credit Repair Organizations Act (CROA), 15 USC 1679 et seq. and the Pennsylvania Credit Services Act (CSA), 73 P.S 2181 et seq.
The court held that plaintiff did not satisfy her "burden of establishing that Congress intended to preclude arbitration" of a claim under the CROA or that arbitration "irreconcilably conflicts" with the purposes of the CROA, citing its similar decision under the TILA in Johnson v. West Suburban Bank, 225 F3d 366, 371, 373 (3d Cir. 2000). The court said that the plaintiff, in the arbitration proceeding, would retain her "full range of rights created by the statutes" and that the right to bring a class action was created by the federal rules of civil procedure rather than the CROA. The court also stressed the possibility of administrative enforcement of the CROA by the FTC and state attorneys general, which it said "supply procedures for obtaining remedies reasonably substituting for those available in a class action."
Concerning the anti-waiver provision of the CROA, the court said that it "only prohibits waiver of the substantive obligations" imposed by the CROA and not the enforcement procedures, such as seeking relief in a judicial forum or seeking class relief.
Concerning plaintiff's claim that the arbitration clause and the contract as a whole were unconscionable, the court recognized that federal courts may apply "generally applicable contract defenses" available under state law "such as fraud, duress, or unconscionability" without running afoul of the FAA and the supremacy clause. However, the court held that "mere inequality" of bargaining power did not render a contract unconscionable, unless it approached "fraud or overwhelming economic power that would provide grounds for the revocation of any contract." The court found that the plaintiff -- who paid defendant about $5/month under the credit repair contract -- "could have walked away" from the contract and could have chosen another company to provide the services that defendant did. Her position was "different, for example, from that of a homeowner facing a mortgage foreclosure who accepts onerous refinancing terms in a desperate attempt to save her home."
The court rejected the Pennsylvania Superior Court decisions in Lytle v. CitiFinancial Services, Inc., 810 A.2d 643 (Pa. Super. 2002) and Thibodeau v. ComCast Corp., 912 A.2d 874 (Pa. Super. 2006), which struck down waivers of the right to bring a class action as unconscionable. Citing Perry v. Thomas, 482 U.S. 483 (1987), the court held that Lytle and Thibodeau established state law principles that were unique to arbitration agreements, rather than applicable to contracts generally. "'A state-law principle that takes its meaning precisely from the fact that a contract to arbitrate is at issue does not comport with" the generality requirement of sec. 2 of the Federal Arbitration Act. The court also noted the statement in Salley v. Option One Mortgage Corp., 925 A.2d 115, 129 (Pa. 2006), that the Lytle opinion "was well intentioned" but "swept too broadly."
The court ended by stating that it expressed "no view on whether [narrowing of the application of the FAA] might be a desirable result as it is not our function to do so. Rather, our obligation is to honor the intent of Congress and that is what we are doing. If the reach of the FAA is to be confined then Congress and not the courts should be the body to do so."
http://www.ca3.uscourts.gov/opinarch/064036p.pdf
Enforcing the contractual arbitration clause pursuant to the Federal Arbitration Act, 9 USC sec. 2, the Third Circuit affirmed the district court in granting the defendant's motion to compel arbitration, on an individual basis, of the plaintiff's proposed class action under the Credit Repair Organizations Act (CROA), 15 USC 1679 et seq. and the Pennsylvania Credit Services Act (CSA), 73 P.S 2181 et seq.
The court held that plaintiff did not satisfy her "burden of establishing that Congress intended to preclude arbitration" of a claim under the CROA or that arbitration "irreconcilably conflicts" with the purposes of the CROA, citing its similar decision under the TILA in Johnson v. West Suburban Bank, 225 F3d 366, 371, 373 (3d Cir. 2000). The court said that the plaintiff, in the arbitration proceeding, would retain her "full range of rights created by the statutes" and that the right to bring a class action was created by the federal rules of civil procedure rather than the CROA. The court also stressed the possibility of administrative enforcement of the CROA by the FTC and state attorneys general, which it said "supply procedures for obtaining remedies reasonably substituting for those available in a class action."
Concerning the anti-waiver provision of the CROA, the court said that it "only prohibits waiver of the substantive obligations" imposed by the CROA and not the enforcement procedures, such as seeking relief in a judicial forum or seeking class relief.
Concerning plaintiff's claim that the arbitration clause and the contract as a whole were unconscionable, the court recognized that federal courts may apply "generally applicable contract defenses" available under state law "such as fraud, duress, or unconscionability" without running afoul of the FAA and the supremacy clause. However, the court held that "mere inequality" of bargaining power did not render a contract unconscionable, unless it approached "fraud or overwhelming economic power that would provide grounds for the revocation of any contract." The court found that the plaintiff -- who paid defendant about $5/month under the credit repair contract -- "could have walked away" from the contract and could have chosen another company to provide the services that defendant did. Her position was "different, for example, from that of a homeowner facing a mortgage foreclosure who accepts onerous refinancing terms in a desperate attempt to save her home."
The court rejected the Pennsylvania Superior Court decisions in Lytle v. CitiFinancial Services, Inc., 810 A.2d 643 (Pa. Super. 2002) and Thibodeau v. ComCast Corp., 912 A.2d 874 (Pa. Super. 2006), which struck down waivers of the right to bring a class action as unconscionable. Citing Perry v. Thomas, 482 U.S. 483 (1987), the court held that Lytle and Thibodeau established state law principles that were unique to arbitration agreements, rather than applicable to contracts generally. "'A state-law principle that takes its meaning precisely from the fact that a contract to arbitrate is at issue does not comport with" the generality requirement of sec. 2 of the Federal Arbitration Act. The court also noted the statement in Salley v. Option One Mortgage Corp., 925 A.2d 115, 129 (Pa. 2006), that the Lytle opinion "was well intentioned" but "swept too broadly."
The court ended by stating that it expressed "no view on whether [narrowing of the application of the FAA] might be a desirable result as it is not our function to do so. Rather, our obligation is to honor the intent of Congress and that is what we are doing. If the reach of the FAA is to be confined then Congress and not the courts should be the body to do so."
Tuesday, December 18, 2007
consumer - arbitration clause - unconscionability
O'Shea v. Direct Financial Solutions, Inc. - ED Pa. December 5, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1467P.pdf
The court held that the arbitration clause in a payday loan contract was not unconscionable, either procedurally or substantively, thus preventing the plaintiff from raising UDAP and related consumer claims in a judicial forum. The court found this result mandated by the Federal Arbitration Act, 9 USC sec. 1 et seq. Section 2 makes such a clause "valid, irrevocable, and enforceable, save upon such grounds as exist in law or in equity for the revocation of any contract." 9 USC, sec. 2 http://www.law.cornell.edu/uscode/html/uscode09/usc_sec_09_00000002----000-.html.
Unconscionability can be a ground for revocation, but a person challenging on this ground has the burden of showing that the provision is both procedurally and substantively unconscionable. Procedural unconscionability pertains to the process by which an agreement is reached and the form of an agreement, including the use of fine print or convoluted or unclear language, none of which was at issue here. Substantive unconscionability refers to terms that unreasonably favor one party, terms to which the unfavored party does not truly assent.
The Third Circuit has "repeatedly held that inequality in bargaining power, alone, is not a valid basis upon which to invalidate an arbitration agreement. Harris v. Green Tree Finance Corp., 183 F.3d, 173, 183 (3d Cir. 1999). The Harris court also held that mutuality of remedies - e.g., the ability of the lender but not the borrower to seek judicial enforcement - is not required of a valid arbitration clause. The instant court rejected the different reasoning in Bragg v. Linden Research Inc., 487 F.Supp. 2d 593 (ED Pa. 2007), which applied California law on unconscionability, not Pennsylvania law.
http://www.paed.uscourts.gov/documents/opinions/07D1467P.pdf
The court held that the arbitration clause in a payday loan contract was not unconscionable, either procedurally or substantively, thus preventing the plaintiff from raising UDAP and related consumer claims in a judicial forum. The court found this result mandated by the Federal Arbitration Act, 9 USC sec. 1 et seq. Section 2 makes such a clause "valid, irrevocable, and enforceable, save upon such grounds as exist in law or in equity for the revocation of any contract." 9 USC, sec. 2 http://www.law.cornell.edu/uscode/html/uscode09/usc_sec_09_00000002----000-.html.
Unconscionability can be a ground for revocation, but a person challenging on this ground has the burden of showing that the provision is both procedurally and substantively unconscionable. Procedural unconscionability pertains to the process by which an agreement is reached and the form of an agreement, including the use of fine print or convoluted or unclear language, none of which was at issue here. Substantive unconscionability refers to terms that unreasonably favor one party, terms to which the unfavored party does not truly assent.
The Third Circuit has "repeatedly held that inequality in bargaining power, alone, is not a valid basis upon which to invalidate an arbitration agreement. Harris v. Green Tree Finance Corp., 183 F.3d, 173, 183 (3d Cir. 1999). The Harris court also held that mutuality of remedies - e.g., the ability of the lender but not the borrower to seek judicial enforcement - is not required of a valid arbitration clause. The instant court rejected the different reasoning in Bragg v. Linden Research Inc., 487 F.Supp. 2d 593 (ED Pa. 2007), which applied California law on unconscionability, not Pennsylvania law.
Sunday, December 16, 2007
employment - wages - WPCL
Inoff v. Craftex Mills, Inc. - ED Pa. - December 2007
http://www.paed.uscourts.gov/documents/opinions/07D1457P.pdf
Suit for wages on alleged oral, three-year guaranteed contract later memorialized in a series of writings. Plaintiff was a salesman in fabric/textile industry . Motion for summary judgdment by defendant, plaintiff's purported employer, granted in part and denied in part.
choice of law -
A federal court exercising its diversity jurisdiction must apply the choice of law rules of the forum state, Klaxon Co. v. Stenton Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941), so Pennsylvania law was applied to this case. The Pennsylvania Supreme Court has adopted a “flexible rule which permits analysis of the policies and interests underlying the particular issue before the court.” Griffith v. United Airlines, Inc., 203 A.2d 796, 805 (Pa. 1964). The approach “gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context and thereby allows the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation.” Id. (internal quotation marks and alterations omitted) (quoting Babcock v. Jackson, 191 N.E.2d 279, 283 (N.Y. 1963)). The Griffith “interest/contacts” approach applies to contract disputes. Restatement 2d, Conflict sec. 188(2).
what was the parties' contract?
The defendant claims that plaintiff is an indpt. contractor whose employment was terminable at will. Plaintiff alleges another contract. “Pennsylvania law requires that a plaintiff seeking to proceed with a breach of contract action must establish ‘(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract[,] and (3) resultant damages.’” ...The first element is at issue . For a valid contract to exist, there must have been a “meeting of the minds” between the parties. A meeting of the minds is found where “both parties mutually assent to the same thing, as evidenced by an offer and its acceptance.” Since there was a genuine issue of some material facts, no summary judgment granted.
wage payment and collection law -
State statute applies only to employees,not indpt contractors . The defendant claims that plaintiff is not an "employee" under the WPCL. “Employee” is not defined by the WPCL, so Pennsylvania courts look to the state UC Law and the Worker’s Compensation Act’s definitions. ...According to the Pennsylvania courts, the following factors are relevant to the question whether one is an independent contractor: the control of the manner that work is to be done; responsibility for result only; termsof agreement between the parties; the nature of the work or occupation; the skill required for performance; whether one employed is engaged in a distinct occupationor business; which party supplies the tools; whether payment is by the time or by the job; whether the work is part of the regular business of the employer, and the rightto terminate the employment at any time.Surowski v. Commonwealth, 467 A.2d 1373, 1374 (Pa. Commw. Ct. 1983). “[P]aramount . . .among these factors is the right of an individual to control the manner that another’s work is tobe accomplished.” Morin, 871 A.2d at 850.
Also at issue in the case and discussed in the opinion are: promissory estoppel and piercing the corporate veil to make individual corporate officer liable for the wages claimed.
http://www.paed.uscourts.gov/documents/opinions/07D1457P.pdf
Suit for wages on alleged oral, three-year guaranteed contract later memorialized in a series of writings. Plaintiff was a salesman in fabric/textile industry . Motion for summary judgdment by defendant, plaintiff's purported employer, granted in part and denied in part.
choice of law -
A federal court exercising its diversity jurisdiction must apply the choice of law rules of the forum state, Klaxon Co. v. Stenton Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941), so Pennsylvania law was applied to this case. The Pennsylvania Supreme Court has adopted a “flexible rule which permits analysis of the policies and interests underlying the particular issue before the court.” Griffith v. United Airlines, Inc., 203 A.2d 796, 805 (Pa. 1964). The approach “gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context and thereby allows the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation.” Id. (internal quotation marks and alterations omitted) (quoting Babcock v. Jackson, 191 N.E.2d 279, 283 (N.Y. 1963)). The Griffith “interest/contacts” approach applies to contract disputes. Restatement 2d, Conflict sec. 188(2).
what was the parties' contract?
The defendant claims that plaintiff is an indpt. contractor whose employment was terminable at will. Plaintiff alleges another contract. “Pennsylvania law requires that a plaintiff seeking to proceed with a breach of contract action must establish ‘(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract[,] and (3) resultant damages.’” ...The first element is at issue . For a valid contract to exist, there must have been a “meeting of the minds” between the parties. A meeting of the minds is found where “both parties mutually assent to the same thing, as evidenced by an offer and its acceptance.” Since there was a genuine issue of some material facts, no summary judgment granted.
wage payment and collection law -
State statute applies only to employees,not indpt contractors . The defendant claims that plaintiff is not an "employee" under the WPCL. “Employee” is not defined by the WPCL, so Pennsylvania courts look to the state UC Law and the Worker’s Compensation Act’s definitions. ...According to the Pennsylvania courts, the following factors are relevant to the question whether one is an independent contractor: the control of the manner that work is to be done; responsibility for result only; termsof agreement between the parties; the nature of the work or occupation; the skill required for performance; whether one employed is engaged in a distinct occupationor business; which party supplies the tools; whether payment is by the time or by the job; whether the work is part of the regular business of the employer, and the rightto terminate the employment at any time.Surowski v. Commonwealth, 467 A.2d 1373, 1374 (Pa. Commw. Ct. 1983). “[P]aramount . . .among these factors is the right of an individual to control the manner that another’s work is tobe accomplished.” Morin, 871 A.2d at 850.
Also at issue in the case and discussed in the opinion are: promissory estoppel and piercing the corporate veil to make individual corporate officer liable for the wages claimed.
Thursday, December 13, 2007
employment- FMLA - notice to employer
Sarnowski v. Airbrooke Limousine, Inc - 3d Circuit - December 12, 2007
http://www.ca3.uscourts.gov/opinarch/062144p.pdf
This opinion contains a lot of good language about the requirement that an employee must give notice to the employer of the need for FMLA leave, 29 U.S.C. § 2612(e)(2)(B), 29 C.F.R. § 825.302(c). No formal written request for FMLA leave is necessary. Simple verbal notice is sufficient. The notice provision must be construed liberally. No magic words are required. The employee need not know or give the exact dates of the anticipated leave.
http://www.ca3.uscourts.gov/opinarch/062144p.pdf
This opinion contains a lot of good language about the requirement that an employee must give notice to the employer of the need for FMLA leave, 29 U.S.C. § 2612(e)(2)(B), 29 C.F.R. § 825.302(c). No formal written request for FMLA leave is necessary. Simple verbal notice is sufficient. The notice provision must be construed liberally. No magic words are required. The employee need not know or give the exact dates of the anticipated leave.
Monday, December 03, 2007
Fair Credit Reporting Act - negligent non-compliance
Perez v. Trans Union, LLC, et al. - ED Pa. - November 2007
http://www.paed.uscourts.gov/documents/opinions/07D1391P.pdf
Plaintiff sued for an alleged violation of the Fair Credit Reporting Act, 15 USC 1681e(b), when the defendant credit reporting agency (CRA) mistakenly reported to a car dealership that plaintiff had a good credit history but was deceased and thus had no credit score. After this same thing happened several times, matters finally got sorted out, but plaintiff claimed that he had paid more for credit because of the mistakes, which he said were caused by defendant's failure to "follow reasonable procedure to assure maximum possible accuracy of information...." as required by sec. 1681e(b).
Defendant moved for summary judgment, which in a negligent noncompliance case can only be granted in this circuit when the "evidence demonstrates as a matter of law that the procedures it [defendant] followed were reasonable." Philbin v. Trans Union Corp., 101 F3d 957, 965 (3d Cir. 1996). Judging reasonableness "involves weighing the potential harm from inaccuracy against the burden of safeguarding against such inaccuracy." Id at 963. By contrast, "[o]ther courts have concluded flatly that 'the question, of whether a credit reporting agency followed reasonable procedures is reserved for the jury.'" (citing cases)
The defendant here admitted reiterating inaccurate information, which it did not independently verify. The questions is whether it "ought to have appreciated, under the circumstances presented, that there was a material inaccuracy such that a duty arose upon it to do something to correct it or not make a report." (emphasis in original).
The court held that there had no willful noncompliance, which it said "requires more than mere knowledge." There was no evidence to show that the CRA was "consciously aware that Plaintiff contested the accuracy of the report and then proceeded to report the inaccuracy anyway." (emphasis in original)* There was no "deliberate intention to violate Plaintiff's personal rights."
The court also rejected the negligent noncompliance claim, which consists of four elements
- the inclusion of inaccurate information in a credit report
- the inaccuracy was due to a failure to follow reasonable procedures
- the consumer suffered injury
- the injury was caused by the inclusion of the inaccurate entry.
The court granted summary to defendant based on the plaintiff's "lack of rebuttal evidence" to counter that in the summary judgment record, which showed that the banks involved all got their credit evidence independently of defendant. There was an "absence of evidence that [defendant] provided a credit report about Plaintiff to any potential lender...."
http://www.paed.uscourts.gov/documents/opinions/07D1391P.pdf
Plaintiff sued for an alleged violation of the Fair Credit Reporting Act, 15 USC 1681e(b), when the defendant credit reporting agency (CRA) mistakenly reported to a car dealership that plaintiff had a good credit history but was deceased and thus had no credit score. After this same thing happened several times, matters finally got sorted out, but plaintiff claimed that he had paid more for credit because of the mistakes, which he said were caused by defendant's failure to "follow reasonable procedure to assure maximum possible accuracy of information...." as required by sec. 1681e(b).
Defendant moved for summary judgment, which in a negligent noncompliance case can only be granted in this circuit when the "evidence demonstrates as a matter of law that the procedures it [defendant] followed were reasonable." Philbin v. Trans Union Corp., 101 F3d 957, 965 (3d Cir. 1996). Judging reasonableness "involves weighing the potential harm from inaccuracy against the burden of safeguarding against such inaccuracy." Id at 963. By contrast, "[o]ther courts have concluded flatly that 'the question, of whether a credit reporting agency followed reasonable procedures is reserved for the jury.'" (citing cases)
The defendant here admitted reiterating inaccurate information, which it did not independently verify. The questions is whether it "ought to have appreciated, under the circumstances presented, that there was a material inaccuracy such that a duty arose upon it to do something to correct it or not make a report." (emphasis in original).
The court held that there had no willful noncompliance, which it said "requires more than mere knowledge." There was no evidence to show that the CRA was "consciously aware that Plaintiff contested the accuracy of the report and then proceeded to report the inaccuracy anyway." (emphasis in original)* There was no "deliberate intention to violate Plaintiff's personal rights."
The court also rejected the negligent noncompliance claim, which consists of four elements
- the inclusion of inaccurate information in a credit report
- the inaccuracy was due to a failure to follow reasonable procedures
- the consumer suffered injury
- the injury was caused by the inclusion of the inaccurate entry.
The court granted summary to defendant based on the plaintiff's "lack of rebuttal evidence" to counter that in the summary judgment record, which showed that the banks involved all got their credit evidence independently of defendant. There was an "absence of evidence that [defendant] provided a credit report about Plaintiff to any potential lender...."
social security disability - treating physician's opinion - claimant credibility
Wilson v. Astrue - ED Pa. November 28, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1402P.pdf
Benefits were granted in this case, which has good discussions of the standards for
- evaluating the opinion of a treating physician, and
- judging claimant credibility.
http://www.paed.uscourts.gov/documents/opinions/07D1402P.pdf
Benefits were granted in this case, which has good discussions of the standards for
- evaluating the opinion of a treating physician, and
- judging claimant credibility.
Sunday, December 02, 2007
consumer - pleading - UTPCPL - no natl. bank liability under HIFA
Millege v. Chase Bank et al - ED Pa. November 26, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1389P.pdf
Like a number of other courts, this one misstated the pleading requirements under the state consumer protection law, 73 PS 201-2(4)(xxi), holding that the particularity equivalent of fraud pleading is required. The court actually miscited and misquoted the relevant provision, citing it as sec. 201-2(4)(xvii), the pre-1996 citation, instead of sec. 201-4(xxi), and omitting the "or deceptive" language added by the 1996 amendments.
The court also held that a national bank such as Chase cannot be found liable under the state Home Improvement Finance Act (HIFA), 73 P.S. 500-408, for its alleged inclusion of a cash loan in a home improvement contract, because such liability is pre-empted by 12 USC 371 and 12 CFR 34.4, which say that such banks can make real estate loans wihtout regard to state law limitations concerning the terms of credit.
http://www.paed.uscourts.gov/documents/opinions/07D1389P.pdf
Like a number of other courts, this one misstated the pleading requirements under the state consumer protection law, 73 PS 201-2(4)(xxi), holding that the particularity equivalent of fraud pleading is required. The court actually miscited and misquoted the relevant provision, citing it as sec. 201-2(4)(xvii), the pre-1996 citation, instead of sec. 201-4(xxi), and omitting the "or deceptive" language added by the 1996 amendments.
The court also held that a national bank such as Chase cannot be found liable under the state Home Improvement Finance Act (HIFA), 73 P.S. 500-408, for its alleged inclusion of a cash loan in a home improvement contract, because such liability is pre-empted by 12 USC 371 and 12 CFR 34.4, which say that such banks can make real estate loans wihtout regard to state law limitations concerning the terms of credit.
consumer - title insurance - TICA & UTPCPL - exhaustion of admin. remedies
Markocki v. Old Republic Natl. Title Ins. Co. v. Citizens Abstract Co. - ED Pa. - Nov. 19, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1382P.pdf
Held, plaintiff was entitled to sue under the Consumer Protection Law, 73 PS 201-9.2, for an alleged violation of the state Title Insurance Company Act (TICA), 40 PS 910-37(h), without first exhausting her remedies under TICA.
Plaintiff brought her case when she refinanced her mortgage and was charged a "basic rate" of $978.75 rather than a "refinance rate" of $704.70, to which she was entitled under the Rate Manual of the Title Insurance Rating Bureau, 40 PS 910-37(h). When she found out about the improper charges, she sued under RESPA, 12 USC 2607, as well as for violations of the CPL, because of the improper charges under TICA.
Old Republic joined Citizens as a 3d party defendant, because Citizens, acting as its agent under TICA, had collected the improper charges, in spite of Old Republic having told Citizens about the proper changes under the Rate Manual.
Citizens' 12(b) (6) motion to dismiss was denied. Citizens claimed that Markocki had to exhaust her remedies under TICA, which says that an aggrieved person "may be heard" under TICA concerning its insurance rating, 40 PS 910-44(b).
Relying on the "weight of authority" under
- Cohen v. Ciicago Title Insurance Co., 2006 US Dist. Lexis 36689 (ED Pa. )
- Highmark Inc v. UPMC Health Plan, 276 F3d 160 (, 168 (3d Cir. 2001), and
- Ohio Casualty Group v. Argonaut Insurance, 525 A2d 1195, 1197 (Pa. 1987)
The court held that the remedy under TICA was discretionary, optional and incomplete rather than mandatory and exclusive, and that plaintiff's case under the Consumer Protection Law should not be dismissed.
http://www.paed.uscourts.gov/documents/opinions/07D1382P.pdf
Held, plaintiff was entitled to sue under the Consumer Protection Law, 73 PS 201-9.2, for an alleged violation of the state Title Insurance Company Act (TICA), 40 PS 910-37(h), without first exhausting her remedies under TICA.
Plaintiff brought her case when she refinanced her mortgage and was charged a "basic rate" of $978.75 rather than a "refinance rate" of $704.70, to which she was entitled under the Rate Manual of the Title Insurance Rating Bureau, 40 PS 910-37(h). When she found out about the improper charges, she sued under RESPA, 12 USC 2607, as well as for violations of the CPL, because of the improper charges under TICA.
Old Republic joined Citizens as a 3d party defendant, because Citizens, acting as its agent under TICA, had collected the improper charges, in spite of Old Republic having told Citizens about the proper changes under the Rate Manual.
Citizens' 12(b) (6) motion to dismiss was denied. Citizens claimed that Markocki had to exhaust her remedies under TICA, which says that an aggrieved person "may be heard" under TICA concerning its insurance rating, 40 PS 910-44(b).
Relying on the "weight of authority" under
- Cohen v. Ciicago Title Insurance Co., 2006 US Dist. Lexis 36689 (ED Pa. )
- Highmark Inc v. UPMC Health Plan, 276 F3d 160 (, 168 (3d Cir. 2001), and
- Ohio Casualty Group v. Argonaut Insurance, 525 A2d 1195, 1197 (Pa. 1987)
The court held that the remedy under TICA was discretionary, optional and incomplete rather than mandatory and exclusive, and that plaintiff's case under the Consumer Protection Law should not be dismissed.
Wednesday, November 21, 2007
insurance - denial - bad faith
Greene v. United Services Automobile Assn. - Superior Court - November 20, 2007
http://www.aopc.org/OpPosting/Superior/out/a20010_07.pdf
The court denied the plaintiffs' claim that their insurer denied their homeowner's insurance claim in bad faith. The court held that in order for a party to succeed on a statutory claim of bad faith under 42 Pa. C.S. sec. 8371 (actions on insurance policies) that party must fulfill a two-prong test. A plaintiff must show, by clear and convincing evidence, that
- the insurer did not have a reasonable basis for denying benefits under the policy and
- knew or recklessly disregarded its lack of a reasonable basis in denying the claim.
The court elaborated that the "motive of self-interest or ill will" level of culpability is not a third element required for a finding of bad faith, but it is probative of the second element, i.e.., the insurer knew or recklessly disregarded its lack of reasonable basis in denying the claim.
http://www.aopc.org/OpPosting/Superior/out/a20010_07.pdf
The court denied the plaintiffs' claim that their insurer denied their homeowner's insurance claim in bad faith. The court held that in order for a party to succeed on a statutory claim of bad faith under 42 Pa. C.S. sec. 8371 (actions on insurance policies) that party must fulfill a two-prong test. A plaintiff must show, by clear and convincing evidence, that
- the insurer did not have a reasonable basis for denying benefits under the policy and
- knew or recklessly disregarded its lack of a reasonable basis in denying the claim.
The court elaborated that the "motive of self-interest or ill will" level of culpability is not a third element required for a finding of bad faith, but it is probative of the second element, i.e.., the insurer knew or recklessly disregarded its lack of reasonable basis in denying the claim.
Monday, November 19, 2007
midwifery - licensing - Amish - standard for stay of admin. decision
Goslin v. State Board of Medicine - Cmwlth. Court - publication ordered November 16, 2007
http://www.aopc.org/OpPosting/CWealth/out/1830CD07_11-16-07.pdf
Unlicensed midwife with 26 years experience in Amish community denied application for stay of decision of state Board of Medicine directing her to discontinue her practice and imposing fines and penalties.
Aside from the substantive law, the decision is also noteworthy concerning the standards for a stay, especially the likelihood of success on the merits. The court said that the Supreme Court
in Pennsylvania Public Utility Commission v. Process Gas Consumers Group, 502 Pa. 553, 467 A.2d 805 (1983) has set forth the standard a litigant must satisfy in seeking a stay of an adjudicatory body’s decision. Applicants for a stay or supersedeas must:
(1) make a strong showing of likelihood of success on the merits;
(2) demonstrate that, without the grant of a stay, the applicant will suffer irreparable injury;
(3) establish that the Court’s issuance of a stay will not result in substantial harm to other parties interested in the proceedings; and
(4) show that the issuance of a stay will not adversely affect the public interest.
[J]urists considering applications should not regard the first prong inflexibly. Rather, in exercising its discretion to grant or deny a stay pending appeal, this Court may properly grant a stay, even when a litigant has presented a substantial case on the merits, if the litigant’s showing with regard to the remaining three factors strongly supports the applicant’s request. Witmer v. Department of Transportation, Bureau of Driver Licensing, 889 A.2d 638, 640 (Pa. Cmwlth. 2005).
http://www.aopc.org/OpPosting/CWealth/out/1830CD07_11-16-07.pdf
Unlicensed midwife with 26 years experience in Amish community denied application for stay of decision of state Board of Medicine directing her to discontinue her practice and imposing fines and penalties.
Aside from the substantive law, the decision is also noteworthy concerning the standards for a stay, especially the likelihood of success on the merits. The court said that the Supreme Court
in Pennsylvania Public Utility Commission v. Process Gas Consumers Group, 502 Pa. 553, 467 A.2d 805 (1983) has set forth the standard a litigant must satisfy in seeking a stay of an adjudicatory body’s decision. Applicants for a stay or supersedeas must:
(1) make a strong showing of likelihood of success on the merits;
(2) demonstrate that, without the grant of a stay, the applicant will suffer irreparable injury;
(3) establish that the Court’s issuance of a stay will not result in substantial harm to other parties interested in the proceedings; and
(4) show that the issuance of a stay will not adversely affect the public interest.
[J]urists considering applications should not regard the first prong inflexibly. Rather, in exercising its discretion to grant or deny a stay pending appeal, this Court may properly grant a stay, even when a litigant has presented a substantial case on the merits, if the litigant’s showing with regard to the remaining three factors strongly supports the applicant’s request. Witmer v. Department of Transportation, Bureau of Driver Licensing, 889 A.2d 638, 640 (Pa. Cmwlth. 2005).
Thursday, November 15, 2007
dependency - counsel for child - access to child
In the Interest of A.S. - Superior Court - November 15, 2007
http://www.aopc.org/OpPosting/Superior/out/a24014_07.pdf
Trial court improperly dismissed child welfare agency's dependency petition due to the agency's failure to have the child in court to testify. The appellate court held that the dismissel was error where the child's court-appointed counsel never had a chance to meet with the child because of the mother's refusal to give counsel access to the child, despite an order directing the mother to do so.
The trial court did not receive evidence from both sides. The mother violated the child's rights by denying access by counsel and preventing the child "from being heard in any fashion at a hearing regarding her own welfare."
http://www.aopc.org/OpPosting/Superior/out/a24014_07.pdf
Trial court improperly dismissed child welfare agency's dependency petition due to the agency's failure to have the child in court to testify. The appellate court held that the dismissel was error where the child's court-appointed counsel never had a chance to meet with the child because of the mother's refusal to give counsel access to the child, despite an order directing the mother to do so.
The trial court did not receive evidence from both sides. The mother violated the child's rights by denying access by counsel and preventing the child "from being heard in any fashion at a hearing regarding her own welfare."
statutes - enactment - legislative procedure - Pa. Constitution
Marcavage v. Rendell - Commonwealth Court - November 15, 2007
http://www.aopc.org/OpPosting/CWealth/out/195MD05_11-15-07.pdf
Article III, sec. 1, of the state constitution provides that “[n]o law shall be passed except by bill, and no bill shall be altered or amended, on its passage through either House, as to change its original purpose.”
This provision is violated by the passage of a bill which began as one criminalizing crop destruction but was amended during the legislative process to become one which punished ethic intimidation.
The relevant test is set out in Pennsylvanians Against Gambling Expansion Fund, Inc., v. Commonwealth (PAGE), 877 A.2d 383 (Pa. 2005). This case established a "new two-prong test for determining whether legislation violates Article III, Section 1....First, the Court must consider the legislation's original purpose and compare it to the final purpose to determine whether there has been an alteration or amendment that changed the original purpose....Second, the Court must consider whether the title and contents of the legislation are deceptive in their final form....The challenged legislation must survive both inquiries to pass constitutional muster.
A court must consider a bill's purpose "in reasonably broad terms, so as to provide the General Assembly with full opportunity to amend and even expand a bill, and not run afoul of the constitutional prohibition on an alteration or amendment that changes its original purpose.....[T]he reviewing court should 'hypothesize, based on the text of the statute, as to a reasonably broad original purpose.'”
The court held here that there was no "single unifying purpose" between the original and amended bills, even though both concerned criminal conduct. The bills did "not regulate the same discrete activity" but rather "vastly different activities, albeit under the broad heading of crime." Even looking at the language in "reasonably broad terms," there was a change of purpose from the original to the amended bill, given that the latter had "no nexus to the conduct to which the original legislation was directed...."
http://www.aopc.org/OpPosting/CWealth/out/195MD05_11-15-07.pdf
Article III, sec. 1, of the state constitution provides that “[n]o law shall be passed except by bill, and no bill shall be altered or amended, on its passage through either House, as to change its original purpose.”
This provision is violated by the passage of a bill which began as one criminalizing crop destruction but was amended during the legislative process to become one which punished ethic intimidation.
The relevant test is set out in Pennsylvanians Against Gambling Expansion Fund, Inc., v. Commonwealth (PAGE), 877 A.2d 383 (Pa. 2005). This case established a "new two-prong test for determining whether legislation violates Article III, Section 1....First, the Court must consider the legislation's original purpose and compare it to the final purpose to determine whether there has been an alteration or amendment that changed the original purpose....Second, the Court must consider whether the title and contents of the legislation are deceptive in their final form....The challenged legislation must survive both inquiries to pass constitutional muster.
A court must consider a bill's purpose "in reasonably broad terms, so as to provide the General Assembly with full opportunity to amend and even expand a bill, and not run afoul of the constitutional prohibition on an alteration or amendment that changes its original purpose.....[T]he reviewing court should 'hypothesize, based on the text of the statute, as to a reasonably broad original purpose.'”
The court held here that there was no "single unifying purpose" between the original and amended bills, even though both concerned criminal conduct. The bills did "not regulate the same discrete activity" but rather "vastly different activities, albeit under the broad heading of crime." Even looking at the language in "reasonably broad terms," there was a change of purpose from the original to the amended bill, given that the latter had "no nexus to the conduct to which the original legislation was directed...."
Wednesday, November 07, 2007
real property - tax sale - notice - presumption of proper posting
Picknick v. Washington County Tax Claim Bureau - Commonwealth Court - November 7, 2007
http://www.aopc.org/OpPosting/CWealth/out/253CD07_11-7-07.pdf
A tax claim bureau (TCB) satisfies its initial burden of proving -- and establishes a presumption of -- regularity and proper posting under the Real Estate Tax Sale Law, 72 P.S. 5860.101 et seq., where the TCB files an affidavit of posting. Thomas v. Montgomery Co. TCB, 553 A.2d 1044, 1046 (Pa. Cmwlth. 1989). Such proof establishes a prima facie case that the method of posting is "reasonable and likely to inform the taxpayer as well as the public at large of an intended real property sale." The property owner then has the burden to produce contradictory evidence.
In this case, the TCB produced an affidavit, photos and testimony about posting. The property owner did not present any evidence to rebut the presumption.
http://www.aopc.org/OpPosting/CWealth/out/253CD07_11-7-07.pdf
A tax claim bureau (TCB) satisfies its initial burden of proving -- and establishes a presumption of -- regularity and proper posting under the Real Estate Tax Sale Law, 72 P.S. 5860.101 et seq., where the TCB files an affidavit of posting. Thomas v. Montgomery Co. TCB, 553 A.2d 1044, 1046 (Pa. Cmwlth. 1989). Such proof establishes a prima facie case that the method of posting is "reasonable and likely to inform the taxpayer as well as the public at large of an intended real property sale." The property owner then has the burden to produce contradictory evidence.
In this case, the TCB produced an affidavit, photos and testimony about posting. The property owner did not present any evidence to rebut the presumption.
Monday, November 05, 2007
School Expulsion Upheld for Breaking into School District Computer System
The Commonwealth Court of Pennsylvania upheld the suspension of a student who gained unauthorized access to the school district computer system and supplied information to another student who used the information to access and disrupt the system.
The expulsion was upheld despite the fact that the Computer Use Policy only provided for a possible suspension of one to ten days for violation of the policy.
The Court held that the School Board had discretion as to appropriate penalties in disciplinary proceedings and properly exercised its discretion to expel Student. While the Computer Use Policy suggested penalties up to a 10-day suspension, it also indicated in the Appendix that such a punishment was only to act as a guide, and an individual case could warrant the modification of the listed penalties.
The Court noted that previously, the student had committed a serious and potentially damaging violation of the School District’s Computer Use Policy when he made false student identification cards, and this time he committed a more serious violation of the School District’s Computer Use Policy by decoding encrypted information and helping another student access extremely sensitive and private School District information. Given his history, including a prior suspension for computer misconduct, and given that his conduct is felonious under the Crimes Code, the Court found that the expulsion was entirely appropriate.
Decision: M.T. for A.T. v. Central York School District [PDF]
The expulsion was upheld despite the fact that the Computer Use Policy only provided for a possible suspension of one to ten days for violation of the policy.
The Court held that the School Board had discretion as to appropriate penalties in disciplinary proceedings and properly exercised its discretion to expel Student. While the Computer Use Policy suggested penalties up to a 10-day suspension, it also indicated in the Appendix that such a punishment was only to act as a guide, and an individual case could warrant the modification of the listed penalties.
The Court noted that previously, the student had committed a serious and potentially damaging violation of the School District’s Computer Use Policy when he made false student identification cards, and this time he committed a more serious violation of the School District’s Computer Use Policy by decoding encrypted information and helping another student access extremely sensitive and private School District information. Given his history, including a prior suspension for computer misconduct, and given that his conduct is felonious under the Crimes Code, the Court found that the expulsion was entirely appropriate.
Decision: M.T. for A.T. v. Central York School District [PDF]
Wednesday, October 31, 2007
consumer - motor vehicles - MVSFA - private right of action
Nawrocki v. Faulkner Ciocca Ford - ED Pa. - October 29, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1296P.pdf
Under the facts of this case, Plaintiffs did not have a private cause of action under the Motor Vehicle Sales Finance Act (MVSFA), 68 P.S. sec. 601 et seq, for claims that a) the notice of repossession violated the MVSFA and b) the car dealer improperly applied for financing in the plaintiffs' name.
The "Pennsylvania Supreme Court has not ruled on whether the MVSFA creates a private right of action." However, in Witthoeft v. Kiskaddon, 733 A.2d 623, 616 (Pa. 1999), the Court "adopted a portion of the test from Cort v. Ash, 422 US 66, 78 (1975), to determine when a court may infer a private right of action under a statute"
Under the Witthoeft case, Pennsylvania courts consider whether
- plaintiff belongs to the class for whose special benefit the statute was enacted
- there is is an indication of any explicit or implicit legislative intent to create or deny such a remedy
- a private right of action would be consistent with the purpose of the legislative scheme.
The second of these "is the most important and [is] given the greatest weight."
The court noted that several sections of the MVSFA do specifically create private rights of action for their violation, citing examples. However, the court said that it could "not imply a private right of action in the entire MVSFA simply because the MVSFA contains provisions that the buyer can enforce." Such a reading would "ignore the difference between a statute that creates a private right of action and one that supplies an element of an existing cause of action. When a statute creates a private right of action, a plaintiff need only make out a violation of the statute to recover. On the other hand, when a statute supplies an element of a cause of action, the plaintiff must make out the violation of the statute and all of the other elements of the relevant cause of action before she can recover." (emphasis in original)
In this case, the court held that the violation of the sec. 623 notice provision supplied one element of a cause of action for the tort of conversion, i.e., interference with the plaintiff's use or possession of her car without her consent and "without lawful justification." (emphasis in original). However, "the MVSFA does not make a defective repossession notice in and of itself the subject of an implied cause of action."
There is no specific section of the MVSFA that covers an alleged application by a car dealer for financing in plaintiffs' names, without their knowledge or consent (even though such "behavior would likely violate the Fair Credit Reporting Act, which plaintiffs duly invoke.")
http://www.paed.uscourts.gov/documents/opinions/07D1296P.pdf
Under the facts of this case, Plaintiffs did not have a private cause of action under the Motor Vehicle Sales Finance Act (MVSFA), 68 P.S. sec. 601 et seq, for claims that a) the notice of repossession violated the MVSFA and b) the car dealer improperly applied for financing in the plaintiffs' name.
The "Pennsylvania Supreme Court has not ruled on whether the MVSFA creates a private right of action." However, in Witthoeft v. Kiskaddon, 733 A.2d 623, 616 (Pa. 1999), the Court "adopted a portion of the test from Cort v. Ash, 422 US 66, 78 (1975), to determine when a court may infer a private right of action under a statute"
Under the Witthoeft case, Pennsylvania courts consider whether
- plaintiff belongs to the class for whose special benefit the statute was enacted
- there is is an indication of any explicit or implicit legislative intent to create or deny such a remedy
- a private right of action would be consistent with the purpose of the legislative scheme.
The second of these "is the most important and [is] given the greatest weight."
The court noted that several sections of the MVSFA do specifically create private rights of action for their violation, citing examples. However, the court said that it could "not imply a private right of action in the entire MVSFA simply because the MVSFA contains provisions that the buyer can enforce." Such a reading would "ignore the difference between a statute that creates a private right of action and one that supplies an element of an existing cause of action. When a statute creates a private right of action, a plaintiff need only make out a violation of the statute to recover. On the other hand, when a statute supplies an element of a cause of action, the plaintiff must make out the violation of the statute and all of the other elements of the relevant cause of action before she can recover." (emphasis in original)
In this case, the court held that the violation of the sec. 623 notice provision supplied one element of a cause of action for the tort of conversion, i.e., interference with the plaintiff's use or possession of her car without her consent and "without lawful justification." (emphasis in original). However, "the MVSFA does not make a defective repossession notice in and of itself the subject of an implied cause of action."
There is no specific section of the MVSFA that covers an alleged application by a car dealer for financing in plaintiffs' names, without their knowledge or consent (even though such "behavior would likely violate the Fair Credit Reporting Act, which plaintiffs duly invoke.")
Tuesday, October 30, 2007
Consumer Protection Law - pleading - particularity
Nawrocki v. Faulkner Ciocca Ford - ED Pa. - Ocftober 29, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1296P.pdf
Plaintiffs adequately pleaded their case with sufficient "heightened particularity" under the Pennsylvania Consumer Protection Law, 73 P.S. sec. 201-1 et seq., and F. R. Civ. 9(b), to withstand a Rule 12(b)(6) motion.
Tran v. Metropolitan Life Ins. Co., 408 F.3d 130, 140-1 (3d Cir. 2005), requires such a plaintiff to "make out the elements of common law fraud" -- which plaintiffs did in this case, when they "palpably alleged the necessary facts with far more particularity that the 'date, time or place" Rule 9(b) requires."
http://www.paed.uscourts.gov/documents/opinions/07D1296P.pdf
Plaintiffs adequately pleaded their case with sufficient "heightened particularity" under the Pennsylvania Consumer Protection Law, 73 P.S. sec. 201-1 et seq., and F. R. Civ. 9(b), to withstand a Rule 12(b)(6) motion.
Tran v. Metropolitan Life Ins. Co., 408 F.3d 130, 140-1 (3d Cir. 2005), requires such a plaintiff to "make out the elements of common law fraud" -- which plaintiffs did in this case, when they "palpably alleged the necessary facts with far more particularity that the 'date, time or place" Rule 9(b) requires."
Monday, October 29, 2007
damages/remedies - election of remedies; rescission - need for prompt action
Schwartz v. Rockey - Pennsylvania Supreme Court - October 17, 2007
majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf
election of remedies
Held, filing a complaint seeking contract-related damages (e.g., money damages) does not, by itself, foreclose a subsequent amendment seeking an inconsistent, equitable remedy (e.g., rescission), at least where it is alleged that the plaintiff lacked knowledge of material facts at the time of filing, and in the absence of demonstrated detrimental reliance by the opposing party. The court noted "confusing congeries of doctrines [which] have been lumped together under the election of remedies label." A majority of jurisdictions, including the federal courts, apply modern rules of pleading to permit the simultaneous pleading of inconsistent claims for relief.
rescission - need for prompt action
Held, the Superior Court should not have disturbed the trial court holding that buyers of real property "failed to pursue rescission with sufficient promptitude* to support an award of such remedy." Buyers effectively affirmed the contract by living in the house for 6 years and by not promptly seeking to rescind once they became aware of previously undisclosed water damage. Prompt action is a prerequisite to the remedy of rescission. Fichera v. Gording, 227 A.2d 642, 643-4 (Pa. 1967).
* Yes, it's in the dictionary.
majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf
election of remedies
Held, filing a complaint seeking contract-related damages (e.g., money damages) does not, by itself, foreclose a subsequent amendment seeking an inconsistent, equitable remedy (e.g., rescission), at least where it is alleged that the plaintiff lacked knowledge of material facts at the time of filing, and in the absence of demonstrated detrimental reliance by the opposing party. The court noted "confusing congeries of doctrines [which] have been lumped together under the election of remedies label." A majority of jurisdictions, including the federal courts, apply modern rules of pleading to permit the simultaneous pleading of inconsistent claims for relief.
rescission - need for prompt action
Held, the Superior Court should not have disturbed the trial court holding that buyers of real property "failed to pursue rescission with sufficient promptitude* to support an award of such remedy." Buyers effectively affirmed the contract by living in the house for 6 years and by not promptly seeking to rescind once they became aware of previously undisclosed water damage. Prompt action is a prerequisite to the remedy of rescission. Fichera v. Gording, 227 A.2d 642, 643-4 (Pa. 1967).
* Yes, it's in the dictionary.
consumer protection - treble damages - standard for award
Schwartz v. Rockey - Pennsylvania Supreme Court - October 17, 2007
majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf
Stating that it was "best to adhere as closely as possible to the plain language of the statute, which on "on its plan terms, does not provide any standard pursuant to which a trial court may award treble damages," the state supreme court held that the discretion of a trial court to award treble damages under sec. 9.2 of the state Consumer Protection Law, 73 P.S. sec. 201-9.2, "should not be closely constrained by the common-law requirement associated with the award of punitive damages" i.e., "outrageous and egregious conduct," which might include an "evil motive" or "reckless indifference to the rights of others."
The Court said that question was a "very close one." It contrasted this decision with that in Johnson v. Hyundai Motor America, 698 A.2d 631 (Pa. Super. 1997), where the court mentioned a "heightened standard for assessing the availability of treble damages" and said that courts should be guided by punitive damages cases.
The statute mentions only the trial court's "discretion," which the court said "is not limitless, as we believe that awards of treble damages may be reviewed by appellate courts for rationality, akin to appellate review of the discretionary aspect of equitable awards...." Trial courts "should focus on the presence or absence of intentional or reckless, wrongful conduct, as to which an award of treble damages would be consistent with, and in furtherance of, the remedial purposes of the" Consumer Protection Law."
The chief justice dissented on this issue, stating that "the case law regarding the nature of punitive damages is well reasoned and evidences the common-law principle applied on Pennsylvania. The plain language of the statute does not expressly alter this principle. Thus, absent such express direction from the Legislature to the contrary, I believe that the UTPCPL was intended to preserve the requirement that an award of treble damages be predicated upon a punitive damage analysis."
majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf
Stating that it was "best to adhere as closely as possible to the plain language of the statute, which on "on its plan terms, does not provide any standard pursuant to which a trial court may award treble damages," the state supreme court held that the discretion of a trial court to award treble damages under sec. 9.2 of the state Consumer Protection Law, 73 P.S. sec. 201-9.2, "should not be closely constrained by the common-law requirement associated with the award of punitive damages" i.e., "outrageous and egregious conduct," which might include an "evil motive" or "reckless indifference to the rights of others."
The Court said that question was a "very close one." It contrasted this decision with that in Johnson v. Hyundai Motor America, 698 A.2d 631 (Pa. Super. 1997), where the court mentioned a "heightened standard for assessing the availability of treble damages" and said that courts should be guided by punitive damages cases.
The statute mentions only the trial court's "discretion," which the court said "is not limitless, as we believe that awards of treble damages may be reviewed by appellate courts for rationality, akin to appellate review of the discretionary aspect of equitable awards...." Trial courts "should focus on the presence or absence of intentional or reckless, wrongful conduct, as to which an award of treble damages would be consistent with, and in furtherance of, the remedial purposes of the" Consumer Protection Law."
The chief justice dissented on this issue, stating that "the case law regarding the nature of punitive damages is well reasoned and evidences the common-law principle applied on Pennsylvania. The plain language of the statute does not expressly alter this principle. Thus, absent such express direction from the Legislature to the contrary, I believe that the UTPCPL was intended to preserve the requirement that an award of treble damages be predicated upon a punitive damage analysis."
Wednesday, October 24, 2007
real property - title insurance
Rood v. Commonwealth Land Title Insurance Company - Superior Court - October 18, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a24045_07.pdf
Title insurance policy held not to cover claim for defective on-site sewage system. The purpose of title insurance is to protect from loss arising from defects in the title which the buyer acquires. Such a contract is construed strictly in favor of the buyer. The court rejected coverage for the defective sewer system, in spite of the argument that the title was rendered unmarketable by this defect, whose disclosure might cause a reduction in price. The court looked to decisions from other states in reaching its decision, in which it found a "dearth of authorities dealing with this precise question." Ultimately, the court rejected the argument that sought to equate an abandoned septic tank with a "defect, lien or encumbrance affecting title to the property." It held that plaintiff's argument confused economic lack of marketability with title marketability. Summary judgment was properly granted to the defendant.
http://www.courts.state.pa.us/OpPosting/Superior/out/a24045_07.pdf
Title insurance policy held not to cover claim for defective on-site sewage system. The purpose of title insurance is to protect from loss arising from defects in the title which the buyer acquires. Such a contract is construed strictly in favor of the buyer. The court rejected coverage for the defective sewer system, in spite of the argument that the title was rendered unmarketable by this defect, whose disclosure might cause a reduction in price. The court looked to decisions from other states in reaching its decision, in which it found a "dearth of authorities dealing with this precise question." Ultimately, the court rejected the argument that sought to equate an abandoned septic tank with a "defect, lien or encumbrance affecting title to the property." It held that plaintiff's argument confused economic lack of marketability with title marketability. Summary judgment was properly granted to the defendant.
corporations - piercing the corporate veil
Fletcher-Harlee Corp. v. Szymanski and David Concrete Corp. - Superior Court - October 15, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a20038_07.pdf
It was appropriate to pierce defendant's corporate veil where defendant was the sole shareholder, director, and officer of several inter-related corporations. Citing Lumax Industries v. Aultman, 669 A2d 893 (Pa. 1995), the court reviewed the factors it considers in such cases, including whther
- the corporation is undercapitalized
- corporate formalities were followed
- relevant records were kept
- there was intermingling of personal and corporate funds
The court noted that there is no clear and well-settled rule about this doctrine in Pennsylvania. It relied heavily on Lumax and The Village at Camelback v. Carr, 538 A.2d 528 (Pa. Super. 1988), in which it held, inter alia, that a plaintiff does not have to show fraud in order for the doctrine to apply.
http://www.courts.state.pa.us/OpPosting/Superior/out/a20038_07.pdf
It was appropriate to pierce defendant's corporate veil where defendant was the sole shareholder, director, and officer of several inter-related corporations. Citing Lumax Industries v. Aultman, 669 A2d 893 (Pa. 1995), the court reviewed the factors it considers in such cases, including whther
- the corporation is undercapitalized
- corporate formalities were followed
- relevant records were kept
- there was intermingling of personal and corporate funds
The court noted that there is no clear and well-settled rule about this doctrine in Pennsylvania. It relied heavily on Lumax and The Village at Camelback v. Carr, 538 A.2d 528 (Pa. Super. 1988), in which it held, inter alia, that a plaintiff does not have to show fraud in order for the doctrine to apply.
Tuesday, October 16, 2007
insurance - bad faith statute, 43 Pa. C.S. 8371 - statute of limitations - common law duty of good faith/fair dealing
Ash v. Continental Insurance Company - Pennsylvania Supreme Court - October 11, 2007
http://www.aopc.org/OpPosting/Supreme/out/J-7-2006mo.pdf
State bad-faith insurance statute, 42 Pa. C.S. 8371, held to resemble tort more than contract and thus come under the two year statute of limitations in 42 Pa. C.S. 5524.
The court rejected plaintiff's argument that because a bad-faith claim involves both tort and contract concepts, like a consumer-protection claim, Gabriel v. O'Hara, 534 A.2d 488 (Pa. Super. 1987), it should come under the catch-all six-year statute of limitations.
The opinion contains an extended discussion of the duty of good faith and fair dealing, which is most often associated with contract claims. The court held that an action for violation of the statutory duty in sec. 8371 is "distinct from the common law cause of action for breach of the contractual duty of good faith" and distinguished the contract cases involving that duty.
The court said that "Pennsylvania courts have held that the key difference between tort actions and contract actions is this: ' [t]ort actions lie for breaches imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals....With this distinction in mind, we note the legislature apparently determined the protections afforded by the Unfair Insurance Practices Act [40 P.S. 1171.1 et seq.] were insufficient to curtail bad faith acts by insurers and that it was in the public interest to enact sec. 8371 as an additional protection....Therefore, the duty under sec. 8371 is one imposed by law as a matter of social policy rather than one imposed by mutual consensus, and an action to recover damages for a breach of that duty derives primarily from the law of torts."
http://www.aopc.org/OpPosting/Supreme/out/J-7-2006mo.pdf
State bad-faith insurance statute, 42 Pa. C.S. 8371, held to resemble tort more than contract and thus come under the two year statute of limitations in 42 Pa. C.S. 5524.
The court rejected plaintiff's argument that because a bad-faith claim involves both tort and contract concepts, like a consumer-protection claim, Gabriel v. O'Hara, 534 A.2d 488 (Pa. Super. 1987), it should come under the catch-all six-year statute of limitations.
The opinion contains an extended discussion of the duty of good faith and fair dealing, which is most often associated with contract claims. The court held that an action for violation of the statutory duty in sec. 8371 is "distinct from the common law cause of action for breach of the contractual duty of good faith" and distinguished the contract cases involving that duty.
The court said that "Pennsylvania courts have held that the key difference between tort actions and contract actions is this: ' [t]ort actions lie for breaches imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals....With this distinction in mind, we note the legislature apparently determined the protections afforded by the Unfair Insurance Practices Act [40 P.S. 1171.1 et seq.] were insufficient to curtail bad faith acts by insurers and that it was in the public interest to enact sec. 8371 as an additional protection....Therefore, the duty under sec. 8371 is one imposed by law as a matter of social policy rather than one imposed by mutual consensus, and an action to recover damages for a breach of that duty derives primarily from the law of torts."
Friday, October 12, 2007
settlement agreements - enforcement
Thomas v. University of Pennsylvania - ED Pa. - October 2, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1204P.pdf
Held, the parties entered into a binding settlement agreement of plaintiff's race discrimination case.
At a settlement conference, the parties agreed that defendant would pay plaintiff, a former employee, a certain amount. The court then dismissed the case. However, a dispute arose when the defendant added a no-rehire provision to the final written settlement agreement. Plaintiff objected to this provision and asked the court to vacate its dismissal of the case. Defendant eventually agreed to withdraw the offending provision. "The issue is whether the University's agreement to delete the language that [plaintiff' found unacceptable constituted an acceptance of an offer to settle the case" --a position advanced by the university, which sought enforcement of the agreement.
Settlement agreement are governed by ordinary principles of contract law, including the need for a meeting of the minds on all terms. An agreement to settle a lawsuit, voluntarily entered into, is binding on the parties, whether or not made in the present of the court, and even in the absence of a writing. Such an agreement is binding even where one party had a change of heart between the time s/he agreed to the terms of the settlement and when those terms were reduced to writing.
When plaintiff told the court that she would accept a certain financial settlement provided that there was no bar to her being rehired, she made a definite and specific offer to settle. When the University accepted, plaintiff became bound by the terms of her offer. Once the offer was accepted, the case was settled. A settlement is at bottom a contract, and it is basic contract law that an offer cannot be withdrawn after it has been accepted.
http://www.paed.uscourts.gov/documents/opinions/07D1204P.pdf
Held, the parties entered into a binding settlement agreement of plaintiff's race discrimination case.
At a settlement conference, the parties agreed that defendant would pay plaintiff, a former employee, a certain amount. The court then dismissed the case. However, a dispute arose when the defendant added a no-rehire provision to the final written settlement agreement. Plaintiff objected to this provision and asked the court to vacate its dismissal of the case. Defendant eventually agreed to withdraw the offending provision. "The issue is whether the University's agreement to delete the language that [plaintiff' found unacceptable constituted an acceptance of an offer to settle the case" --a position advanced by the university, which sought enforcement of the agreement.
Settlement agreement are governed by ordinary principles of contract law, including the need for a meeting of the minds on all terms. An agreement to settle a lawsuit, voluntarily entered into, is binding on the parties, whether or not made in the present of the court, and even in the absence of a writing. Such an agreement is binding even where one party had a change of heart between the time s/he agreed to the terms of the settlement and when those terms were reduced to writing.
When plaintiff told the court that she would accept a certain financial settlement provided that there was no bar to her being rehired, she made a definite and specific offer to settle. When the University accepted, plaintiff became bound by the terms of her offer. Once the offer was accepted, the case was settled. A settlement is at bottom a contract, and it is basic contract law that an offer cannot be withdrawn after it has been accepted.
contracts - sales - venue - approval/acceptance of credit
84 Lumber Co. v. Fish Hatchery, L.P. et al. - Superior Court - Ocftober 1, 2007
http://www.aopc.org/OpPosting/Superior/out/a23003_07.pdf
Plaintiff-appellant is a building supplier who sued defendants-appellees for breach of contract, alleging non-payment for lumber and building materials purchased at plaintiff's retail location in Northampton County. Plaintiff sued in Washington County, the location of its corporate headquarters and the place where defendants' credit application was approved. Defendants were located in Lehigh County, as was the residential construction project for which the materials were purchased.
Defendants filed preliminary objections alleging improper venue, and the lower court transferred the case to Northampton County, which was a) the location of the lumber yard where defendants bought the materials, b) the location where defendants applied for credit, and c) the location where defendants made payments to plaintiff.
Noting that trial courts have "considerable discretion" in change-of-venue cases, the appellate court interpreted Rule 1006 (venue for civil actions generally) and Rule 2130 (venue where partnerships are parties), and sustained the change of venue to the Northampton County, where it held that the "transaction" had taken place and "not merely some part of the transaction...." The court said that the civil rules do not permit a lawsuit to be instituted in any country where some facet of a complex transaction -- such as the approval of the buyer's credit application -- has occurred.
The court said that there was no "substantial relationship" between Washington County and the parties' dispute which would justify venue there. It was at the retail location in Northampton County "where the offer to purchase goods was accepted by Appellant in its delivery of such good for payment." [sic] The court rejected the contention that approval of credit amounted to the actual acceptance of the contract, since there was no suggestion that the approval was necessary to form the contract.
http://www.aopc.org/OpPosting/Superior/out/a23003_07.pdf
Plaintiff-appellant is a building supplier who sued defendants-appellees for breach of contract, alleging non-payment for lumber and building materials purchased at plaintiff's retail location in Northampton County. Plaintiff sued in Washington County, the location of its corporate headquarters and the place where defendants' credit application was approved. Defendants were located in Lehigh County, as was the residential construction project for which the materials were purchased.
Defendants filed preliminary objections alleging improper venue, and the lower court transferred the case to Northampton County, which was a) the location of the lumber yard where defendants bought the materials, b) the location where defendants applied for credit, and c) the location where defendants made payments to plaintiff.
Noting that trial courts have "considerable discretion" in change-of-venue cases, the appellate court interpreted Rule 1006 (venue for civil actions generally) and Rule 2130 (venue where partnerships are parties), and sustained the change of venue to the Northampton County, where it held that the "transaction" had taken place and "not merely some part of the transaction...." The court said that the civil rules do not permit a lawsuit to be instituted in any country where some facet of a complex transaction -- such as the approval of the buyer's credit application -- has occurred.
The court said that there was no "substantial relationship" between Washington County and the parties' dispute which would justify venue there. It was at the retail location in Northampton County "where the offer to purchase goods was accepted by Appellant in its delivery of such good for payment." [sic] The court rejected the contention that approval of credit amounted to the actual acceptance of the contract, since there was no suggestion that the approval was necessary to form the contract.
Tuesday, October 09, 2007
declaratory judgment - ripeness - challenge to admin. regulations
Township of Derry v. Dept. of Labor and Industry - Pa. Supreme Court - September 26, 2007
http://www.aopc.org/OpPosting/Supreme/out/J-116-2007mo.pdf
Request for declaratory relief challenging DLI regulations concerning the definition of "state-owned building" was held to be ripe, overruling the Commonwealth Court's sua sponte dismissal on ripeness grounds.
The Supreme Court held that
- the issues were adequately developed
- the parties would suffer hardship if review were delayed
- there was an actual and ongoing controversy
- the issues were concrete and adequately developed for judicial review
The Court also noted that evidence in an administrative enforcement proceeding would be different from the evidence relevant to the plaintiff's challenge. "The enforcement process has not been accepted as a substitute for declaratory judgment review in...circumstances involving substantial challenges to state administrative regulations....[I]ndeed, the concept of pre-enforcement review has expressly been approved."
http://www.aopc.org/OpPosting/Supreme/out/J-116-2007mo.pdf
Request for declaratory relief challenging DLI regulations concerning the definition of "state-owned building" was held to be ripe, overruling the Commonwealth Court's sua sponte dismissal on ripeness grounds.
The Supreme Court held that
- the issues were adequately developed
- the parties would suffer hardship if review were delayed
- there was an actual and ongoing controversy
- the issues were concrete and adequately developed for judicial review
The Court also noted that evidence in an administrative enforcement proceeding would be different from the evidence relevant to the plaintiff's challenge. "The enforcement process has not been accepted as a substitute for declaratory judgment review in...circumstances involving substantial challenges to state administrative regulations....[I]ndeed, the concept of pre-enforcement review has expressly been approved."
Friday, October 05, 2007
UC - willful misconduct - single standard
Dept. of Corrections v. UCBR - Pa. Supreme Court - October 4, 2007
http://www.aopc.org/OpPosting/Supreme/out/272MAL2007sd.pdf
The court reversed a Commonwealth Court decision denying benefits to a prison guard who did not report rumors of a planned attack on an inmate and did not not intervene when he heard the inmate being beaten, because of the officer's fear of reprisals and fear for his own safety. The lower court said that such fears did not constitute good cause for his actions. The court said that its conscience was shocked by the Board's conclusion "that a corrections officer who refuses to report a threat of violence against an inmate and refuses to render aid to an inmate being beaten could use fear for his own personal safety as good cause justification for his refusal to render aid....We can do nothing but express our outrage" that the DOC's Office of Professional Responsibility was aware of and condoned claimant's conduct and that of others in his situation.
The Supreme Court reversed and remanded for reconsideration in light of its decisions in Navickas v. UCBR, 787 A.2d 284 (Pa. 2001) and Grieb v. UCBR, 827 A.2d 422 (Pa. 2003), holding that the UC Act "sets for a single governing standard of willful misconduct and rejecting the idea that a higher standard may apply based upon the type or nature of the employment involved."
The Commonwealth Court decision is reported at 919 A/2d 316 (Pa. Cmwlth. 2007) http://www.courts.state.pa.us/OpPosting/CWealth/out/1205CD06_2-28-07.pdf. The lower court cited it decision in Williams v. UCBR, 648 A.2d 1321 (Pa. Cmwlth. 1994), the court noted its prior holdings that a "corrections officer, like law enforcement officials, occupy positions of great responsibility and trust, and thus, must adhere to demanding standards, which are higher than those applied to many other professions."
A concurring opinion in the lower court noted that the statement was in direct conflict with the Supreme Court's decision in Navickas v. UCBR, 778 A.2d 284, 290-1 (Pa. 2001), where the court rejected a higher standard of care for a health care worker, stating that that is a "question...of policy...not posed by the Unemployment Compensation Law we are called upon to construe. The Act sets for a single governing standard of willful misconduct, one that does not draw distinctions based upon the type or nature of the employee involved."
http://www.aopc.org/OpPosting/Supreme/out/272MAL2007sd.pdf
The court reversed a Commonwealth Court decision denying benefits to a prison guard who did not report rumors of a planned attack on an inmate and did not not intervene when he heard the inmate being beaten, because of the officer's fear of reprisals and fear for his own safety. The lower court said that such fears did not constitute good cause for his actions. The court said that its conscience was shocked by the Board's conclusion "that a corrections officer who refuses to report a threat of violence against an inmate and refuses to render aid to an inmate being beaten could use fear for his own personal safety as good cause justification for his refusal to render aid....We can do nothing but express our outrage" that the DOC's Office of Professional Responsibility was aware of and condoned claimant's conduct and that of others in his situation.
The Supreme Court reversed and remanded for reconsideration in light of its decisions in Navickas v. UCBR, 787 A.2d 284 (Pa. 2001) and Grieb v. UCBR, 827 A.2d 422 (Pa. 2003), holding that the UC Act "sets for a single governing standard of willful misconduct and rejecting the idea that a higher standard may apply based upon the type or nature of the employment involved."
The Commonwealth Court decision is reported at 919 A/2d 316 (Pa. Cmwlth. 2007) http://www.courts.state.pa.us/OpPosting/CWealth/out/1205CD06_2-28-07.pdf. The lower court cited it decision in Williams v. UCBR, 648 A.2d 1321 (Pa. Cmwlth. 1994), the court noted its prior holdings that a "corrections officer, like law enforcement officials, occupy positions of great responsibility and trust, and thus, must adhere to demanding standards, which are higher than those applied to many other professions."
A concurring opinion in the lower court noted that the statement was in direct conflict with the Supreme Court's decision in Navickas v. UCBR, 778 A.2d 284, 290-1 (Pa. 2001), where the court rejected a higher standard of care for a health care worker, stating that that is a "question...of policy...not posed by the Unemployment Compensation Law we are called upon to construe. The Act sets for a single governing standard of willful misconduct, one that does not draw distinctions based upon the type or nature of the employee involved."
Thursday, October 04, 2007
IFP - denial - frivolous action
Bailey v. Wakefield - Commonwealth Court - October 4, 2007
http://www.aopc.org/OpPosting/CWealth/out/1084CD07_10-4-07.pdf
Three prisoners sought a writ of mandamus against officers of a state correctional institution in the county court where the SCI is located. The trial court denied the plaintiffs' IFP petition on the grounds that the action was frivilous, pursuant to Pa. R.C.P. 240(j) http://www.pacode.com/secure/data/231/chapter200/s240.html.
A "frivolous" action is one that lacks an arguable basis either in law or in fact. A complaint is frivolous if it does not set forth a valud cause of action. The plaintiffs' complaint did allege a valid cause of action, claiming violations of state and federal constitutions and prison regulations and policies.
However, the complaint is still frivolous because the form of action - mandamus - cannot address the constitutional rights that they pleaded. Mandamus is only appropriate where the right to be enforced is very clear. Here, the defendants had a lot of discretion, because of the need for orderly administration of the prison. Mandamus is not maintainable in the circumstances.
"Because there is no way that [plaintiffs] can be successful, the trial court properly denied the petition to proceed in forma pauperis and dismissed the action seeking a writ of mandamus as frivolous."
http://www.aopc.org/OpPosting/CWealth/out/1084CD07_10-4-07.pdf
Three prisoners sought a writ of mandamus against officers of a state correctional institution in the county court where the SCI is located. The trial court denied the plaintiffs' IFP petition on the grounds that the action was frivilous, pursuant to Pa. R.C.P. 240(j) http://www.pacode.com/secure/data/231/chapter200/s240.html.
A "frivolous" action is one that lacks an arguable basis either in law or in fact. A complaint is frivolous if it does not set forth a valud cause of action. The plaintiffs' complaint did allege a valid cause of action, claiming violations of state and federal constitutions and prison regulations and policies.
However, the complaint is still frivolous because the form of action - mandamus - cannot address the constitutional rights that they pleaded. Mandamus is only appropriate where the right to be enforced is very clear. Here, the defendants had a lot of discretion, because of the need for orderly administration of the prison. Mandamus is not maintainable in the circumstances.
"Because there is no way that [plaintiffs] can be successful, the trial court properly denied the petition to proceed in forma pauperis and dismissed the action seeking a writ of mandamus as frivolous."
Wednesday, October 03, 2007
bankruptcy - conversion - bad faith
In re Piccoli - ED Pa. - September 27, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1167P.pdf
Denial of bankrupt's motion to convert Ch. 7 to Ch. 13 case upheld by district court, because of finding that the bankrupt was acting in bad faith, based largely on pre-petition conduct.
Bankrupt (B) transferred her interest in her home to her daughter and son-in-law only 16 months before filing, for no consideration. She also understated the value of her home and misrepresented the value of her unsecured claims. The court applied the factors in the case of In re Pakuris, 262 B.R. (Bankr. ED Pa. 2001) and In re Lilley, 91 F.3d 491 (3d Cir., 1996).
The court found that, under a fact-intensive inquiry --
- B's motion for conversion was to avoid fair payment to creditors
- conversion would be waste of judicial resources, since there would probably be re-conversion to Ch. 7
- home equity would give more to creditors in Ch. 7 than Ch. 13 case
- there is no absolute right to convert Ch. 7 to Ch. 13 - Marrama v. Citizens Bank - 127 S.Ct. 1105 (2007)
- B's conduct was "atypical" and not consistent with that of an honest and forthright but unfortunate debtor
- the timing in her case was "suspicious"
- B showed a lack of candor
http://www.paed.uscourts.gov/documents/opinions/07D1167P.pdf
Denial of bankrupt's motion to convert Ch. 7 to Ch. 13 case upheld by district court, because of finding that the bankrupt was acting in bad faith, based largely on pre-petition conduct.
Bankrupt (B) transferred her interest in her home to her daughter and son-in-law only 16 months before filing, for no consideration. She also understated the value of her home and misrepresented the value of her unsecured claims. The court applied the factors in the case of In re Pakuris, 262 B.R. (Bankr. ED Pa. 2001) and In re Lilley, 91 F.3d 491 (3d Cir., 1996).
The court found that, under a fact-intensive inquiry --
- B's motion for conversion was to avoid fair payment to creditors
- conversion would be waste of judicial resources, since there would probably be re-conversion to Ch. 7
- home equity would give more to creditors in Ch. 7 than Ch. 13 case
- there is no absolute right to convert Ch. 7 to Ch. 13 - Marrama v. Citizens Bank - 127 S.Ct. 1105 (2007)
- B's conduct was "atypical" and not consistent with that of an honest and forthright but unfortunate debtor
- the timing in her case was "suspicious"
- B showed a lack of candor
Monday, October 01, 2007
discovery - pre-complaint discovery - new state court rules
order http://www.aopc.org/OpPosting/Supreme/out/483civ.5.pdf
rule http://www.aopc.org/OpPosting/Supreme/out/483civ.5attch.pdf
There are a number of new, related state court rules about pre-complaint discovery, but the primary one is Rule 4003.8:
"A plaintiff may obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party."
rule http://www.aopc.org/OpPosting/Supreme/out/483civ.5attch.pdf
There are a number of new, related state court rules about pre-complaint discovery, but the primary one is Rule 4003.8:
"A plaintiff may obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party."
Friday, September 28, 2007
Fair Credit Reporting Act - private cause of action eliminated
Meyers v. Freedom Credit Union - ED Pa. - September 21, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1139P.pdf
There is no longer a private cause of action for the failure of a prospective creditor/lender to give a loan applicant who was denied credit the name, address and toll-free number of the credit reporting agency (CRA) whose report formed the basis, at least in part, of the denial of credit, as required by 15 USC sec. 1681m(a)(2)(A).
It is "beyond dispute" that there had been a private cause of action uner 15 USC secs. 1681n and 1681o for such failure -- until the enactment of a provision of the Fair and Accurate Credit Transaction Act (FACTA), P.L. 108-159, which amended the FCRA by, inter alia, eliminating a private cause of action for the conduct of which plaintiff complains. Under FACTA, such violations can now be enforced only by the relevant federal agencies and officials.
The court reached this conclusion by recognizing the "primacy of text and structure in statutory interpretation" and the decisions of "almost all" of the courts that have examined the issue, even while noting that the result was contrary to the structure, history and purpose of FACTA.
Somewhat ironically, however, the plaintiff in this case was able to recover, because her cause of action accrued before FACTA took effect.
http://www.paed.uscourts.gov/documents/opinions/07D1139P.pdf
There is no longer a private cause of action for the failure of a prospective creditor/lender to give a loan applicant who was denied credit the name, address and toll-free number of the credit reporting agency (CRA) whose report formed the basis, at least in part, of the denial of credit, as required by 15 USC sec. 1681m(a)(2)(A).
It is "beyond dispute" that there had been a private cause of action uner 15 USC secs. 1681n and 1681o for such failure -- until the enactment of a provision of the Fair and Accurate Credit Transaction Act (FACTA), P.L. 108-159, which amended the FCRA by, inter alia, eliminating a private cause of action for the conduct of which plaintiff complains. Under FACTA, such violations can now be enforced only by the relevant federal agencies and officials.
The court reached this conclusion by recognizing the "primacy of text and structure in statutory interpretation" and the decisions of "almost all" of the courts that have examined the issue, even while noting that the result was contrary to the structure, history and purpose of FACTA.
Somewhat ironically, however, the plaintiff in this case was able to recover, because her cause of action accrued before FACTA took effect.
Fair Housing Act - attorney fees
Snyder v. Bazargani et al. - ED Pa. - September 25, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1146P.pdf
Plaintiffs awarded attorney fees under the Fair Housing Act, 42 USC 3613(c)(2), against defendant-landlords who "inquired about plaintiffs' religious affiliation and thereafter....refused to rent plaintiffs the property." Given that plaintiffs prevailed at trial, the court had "very little discretion to deny an award of counsel fees." The court's discretion to deny fees is "tightly cabined."
http://www.paed.uscourts.gov/documents/opinions/07D1146P.pdf
Plaintiffs awarded attorney fees under the Fair Housing Act, 42 USC 3613(c)(2), against defendant-landlords who "inquired about plaintiffs' religious affiliation and thereafter....refused to rent plaintiffs the property." Given that plaintiffs prevailed at trial, the court had "very little discretion to deny an award of counsel fees." The court's discretion to deny fees is "tightly cabined."
contracts - damages - duty to mitigate - burden of proof
Wilmington Finance Co. v. Matrix Financial Services - ED Pa. - September 26, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1159P.pdf
"In Pennsylvania, a plaintiff in a breach-of-contract action has a duty to take reasonable steps to mitigate its damages. Delliponti v. DeAngelis, 681 A.2d 1261, 1264 (Pa. 1996). Defendant bears the burden of proving plaintiff’s alleged failure to mitigate. Id. To meet that burden, defendant must “show how further loss could have been avoided through the reasonable efforts of the injured party.” Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1209 (Pa. Super. Ct. 1993)." It was thus "essential" that the defendant show that the plaintiff "could have taken reasonable steps...and that taking those steps would have prevented at least some of [plaintiff's] loss."
http://www.paed.uscourts.gov/documents/opinions/07D1159P.pdf
"In Pennsylvania, a plaintiff in a breach-of-contract action has a duty to take reasonable steps to mitigate its damages. Delliponti v. DeAngelis, 681 A.2d 1261, 1264 (Pa. 1996). Defendant bears the burden of proving plaintiff’s alleged failure to mitigate. Id. To meet that burden, defendant must “show how further loss could have been avoided through the reasonable efforts of the injured party.” Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1209 (Pa. Super. Ct. 1993)." It was thus "essential" that the defendant show that the plaintiff "could have taken reasonable steps...and that taking those steps would have prevented at least some of [plaintiff's] loss."
Protection from Abuse - family/household members - siblings - business partners
Custer v. Cochran - Superior Court - September 25, 2007
http://www.aopc.org/OpPosting/Superior/out/E01002_07.pdf
Siblings who do not live together and whose only relationship is a business one come within the plain words of the definition of "family or household members," 23 Pa. C.S. 6102, since they are clearly related by consanguinity or affinity, overruling Olivieri v. Olivieri, 678 A.2d 393 (Pa. Super. 1996), to the extent that it limited application of the PFA Act to people who live in the same household.
The court also held that there was adequate proof of abuse and noted the ages, height and weight of the parties, and that plaintiff -- whose testimony the court found credible -- experienced fear and pain in her arm for several days as a result of defendant's actions.
Judge Ford Elliot concurred reluctantly, noting that the "clear legislative purpose and objective of the Act is frustrated by applying its protection to a dispute between business partners concerning purely business matters." The judge noted that the legislature's removal of the same-household requirement "simply enlarged the group of victims who have standing to seek relief under the Act so long as the abuse they suffer is the result of an intimate, sexual, or familial relationship they share or have shared with the abuser." The current litigants have no relationship that exists in any "domestic sphere." Nonetheless, the judge concurred, finding the majority view "legally sustainable."
http://www.aopc.org/OpPosting/Superior/out/E01002_07.pdf
Siblings who do not live together and whose only relationship is a business one come within the plain words of the definition of "family or household members," 23 Pa. C.S. 6102, since they are clearly related by consanguinity or affinity, overruling Olivieri v. Olivieri, 678 A.2d 393 (Pa. Super. 1996), to the extent that it limited application of the PFA Act to people who live in the same household.
The court also held that there was adequate proof of abuse and noted the ages, height and weight of the parties, and that plaintiff -- whose testimony the court found credible -- experienced fear and pain in her arm for several days as a result of defendant's actions.
Judge Ford Elliot concurred reluctantly, noting that the "clear legislative purpose and objective of the Act is frustrated by applying its protection to a dispute between business partners concerning purely business matters." The judge noted that the legislature's removal of the same-household requirement "simply enlarged the group of victims who have standing to seek relief under the Act so long as the abuse they suffer is the result of an intimate, sexual, or familial relationship they share or have shared with the abuser." The current litigants have no relationship that exists in any "domestic sphere." Nonetheless, the judge concurred, finding the majority view "legally sustainable."
Sunday, September 23, 2007
FMLA - state employer - immunity - self-care v. family care
Wampler v. Department of Labor & Industry - MD Pa. - September 14, 2007
http://www.pamd.uscourts.gov/opinions/kane/06v1877.pdf
A claim against against a state employer under the self-care provision of the FMLA, 29 USC sec. 2612(a)(1)(D) is barred by sovereign immunity, under the rationale of Chittester v. DCED, 226 F.3d 223 (3d Cir. 200) and Nevada DHS v. Hibbs, 538 US 721 (2003), as well as decisions from the 6th, 7th, 8th and 10th Circuits.
Unlike the family-care provision of the FMLA, 29 USC sec. 2612(a)(1)(C), the self-care provision does not inplicate gender-based stereotypes, which Congress has the power to deal with under the enforcement clause of the 14th Amendment.
http://www.pamd.uscourts.gov/opinions/kane/06v1877.pdf
A claim against against a state employer under the self-care provision of the FMLA, 29 USC sec. 2612(a)(1)(D) is barred by sovereign immunity, under the rationale of Chittester v. DCED, 226 F.3d 223 (3d Cir. 200) and Nevada DHS v. Hibbs, 538 US 721 (2003), as well as decisions from the 6th, 7th, 8th and 10th Circuits.
Unlike the family-care provision of the FMLA, 29 USC sec. 2612(a)(1)(C), the self-care provision does not inplicate gender-based stereotypes, which Congress has the power to deal with under the enforcement clause of the 14th Amendment.
Friday, September 21, 2007
contracts - unjust enrichment/quantum meruit
Northeast Fence & Iron Works, Inc. v. Murphy Quigley Co., Inc. - Superior Ct. - Sept. 18, 2007
http://www.aopc.org/OpPosting/Superior/out/a35022_06.pdf
Plaintiff/subcontractor's judgment against defendant/general contractor for installation of fencing at county prison upheld on theory of quantum meruit/unjust enrichment, which are synonymous terms. Plaintiff finished the fence job on emergency basis when a prior subcontractor left the job incomplete.
The elements/factors in QM/unjust enrichment are
a) lack of an express contract - there was a dispute about the price in this case
b) benefit conferred on defendant - satisfaction of D's contractual obligation to 3d party
c) acceptance and retention of benefit by defendant
d) circumstances would make it inequitable or unjust to retain benefit w/o payment, the "most significant element" of the doctrine
e) QM can apply where there has been partial payment, if benefit is greater than amount paid
http://www.aopc.org/OpPosting/Superior/out/a35022_06.pdf
Plaintiff/subcontractor's judgment against defendant/general contractor for installation of fencing at county prison upheld on theory of quantum meruit/unjust enrichment, which are synonymous terms. Plaintiff finished the fence job on emergency basis when a prior subcontractor left the job incomplete.
The elements/factors in QM/unjust enrichment are
a) lack of an express contract - there was a dispute about the price in this case
b) benefit conferred on defendant - satisfaction of D's contractual obligation to 3d party
c) acceptance and retention of benefit by defendant
d) circumstances would make it inequitable or unjust to retain benefit w/o payment, the "most significant element" of the doctrine
e) QM can apply where there has been partial payment, if benefit is greater than amount paid
Thursday, September 13, 2007
consumer - debt collection - bad checks
FTC v. Check Investors, Inc. - Third Circuit - September 6, 2007
http://www.ca3.uscourts.gov/opinarch/053558p.pdf
The court affirmed the district court's grant on injunctive relief and a $10.2 million fine pursuant to the Fair Debt Collection Practices Act, 15 USC 1692 et seq., against a company which purchased more than 2.2 million bad checks for $348 million and admittedly used abusive debt collection practices against the consumer who had written the checks -- most notably false threats of criminal prosecution and calling people criminals or crooks. The defendant also tried to collect a fee of $125-$130 to the face amount of each check, which exceeded the legal limit of most states. The court said that defendant's tactics "apparently knew no limits."
Background of the FDCPA
The court discussed the "basis tenet" of the FDCPA that "all consumers, even those who have mismanaged their financial affairs resulting in default on their debts, deserve the rights to be treated in a reasonable and civil manner," and noted that the "number of persons who willfully refused to pay debts is minuscule....When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness or marital difficulties or divorce."
NSF checks are "debts" under the FDCPA
A "debt" under the FDCPA is "any obligation...to pay money" arising out of a consumer transaction, even if the payor's intent was fraudulent at the time s/he wrote the check. Four other courts of appeals reached this same conclusion. A check written in a consumer transaction evidences the drawer's obligation to pay, which remains even if the check is dishonored. A transaction's status as a debt must be determined at the time the obligation first arose. The crime of writing a bad check is a specific intent crime; the bad intent must exist at the time the check is written--a fact that defendant could not establish. There is no crime even when the drawer is at fault for the dishonor unless wrongful intent exists at the time the check was written.
But even if that were not the case, "there is no fault exception in the FDCPA....Congress chose not to exempt debt collectors from following the Act [even] if they could prove that the consumer intended his check to be dishonored or accepted credit from a merchant intending default....[N]o consumer deserves to be abused in the collection process."
The payors/drawers of the NSF checks are "consumers" under the FDCPA
The FDCPA defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt." (emphasis in original). "Congress realized that some people who write bad check do so knowingly and willfully and that their conduct is fraudulent. It is just as clear that Congress enacted a definition of 'consumer' that did not exclude such person from the protections they would otherwise be afforded under the FDCPA."
Check Investors was a "debt collector" and not a "creditor under the FDCPA
The court rejected defendant's argument that because it purchased the checks involved, it was not a "debt collector" under the FDCPA because it was collecting its own debts, not those of another. The court distinguished those who acquire a debt with the intent to continue to service it, from those who buy for collection--the case here. The court also stressed the difference between buying a debt which is not in default from buying one which was in default when acquired.
"Not only do we conclude that Appellants are 'debt collectors' rather than a 'creditors,' we believe that their course of conduct exemplifies why Congress enacted the FDCPA and the wisdom of doing so. It also shows why Congress has directed us to focus on whether a debt was in default when acquired to determine the status of 'creditor' vs. 'debt collector.' "
http://www.ca3.uscourts.gov/opinarch/053558p.pdf
The court affirmed the district court's grant on injunctive relief and a $10.2 million fine pursuant to the Fair Debt Collection Practices Act, 15 USC 1692 et seq., against a company which purchased more than 2.2 million bad checks for $348 million and admittedly used abusive debt collection practices against the consumer who had written the checks -- most notably false threats of criminal prosecution and calling people criminals or crooks. The defendant also tried to collect a fee of $125-$130 to the face amount of each check, which exceeded the legal limit of most states. The court said that defendant's tactics "apparently knew no limits."
Background of the FDCPA
The court discussed the "basis tenet" of the FDCPA that "all consumers, even those who have mismanaged their financial affairs resulting in default on their debts, deserve the rights to be treated in a reasonable and civil manner," and noted that the "number of persons who willfully refused to pay debts is minuscule....When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness or marital difficulties or divorce."
NSF checks are "debts" under the FDCPA
A "debt" under the FDCPA is "any obligation...to pay money" arising out of a consumer transaction, even if the payor's intent was fraudulent at the time s/he wrote the check. Four other courts of appeals reached this same conclusion. A check written in a consumer transaction evidences the drawer's obligation to pay, which remains even if the check is dishonored. A transaction's status as a debt must be determined at the time the obligation first arose. The crime of writing a bad check is a specific intent crime; the bad intent must exist at the time the check is written--a fact that defendant could not establish. There is no crime even when the drawer is at fault for the dishonor unless wrongful intent exists at the time the check was written.
But even if that were not the case, "there is no fault exception in the FDCPA....Congress chose not to exempt debt collectors from following the Act [even] if they could prove that the consumer intended his check to be dishonored or accepted credit from a merchant intending default....[N]o consumer deserves to be abused in the collection process."
The payors/drawers of the NSF checks are "consumers" under the FDCPA
The FDCPA defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt." (emphasis in original). "Congress realized that some people who write bad check do so knowingly and willfully and that their conduct is fraudulent. It is just as clear that Congress enacted a definition of 'consumer' that did not exclude such person from the protections they would otherwise be afforded under the FDCPA."
Check Investors was a "debt collector" and not a "creditor under the FDCPA
The court rejected defendant's argument that because it purchased the checks involved, it was not a "debt collector" under the FDCPA because it was collecting its own debts, not those of another. The court distinguished those who acquire a debt with the intent to continue to service it, from those who buy for collection--the case here. The court also stressed the difference between buying a debt which is not in default from buying one which was in default when acquired.
"Not only do we conclude that Appellants are 'debt collectors' rather than a 'creditors,' we believe that their course of conduct exemplifies why Congress enacted the FDCPA and the wisdom of doing so. It also shows why Congress has directed us to focus on whether a debt was in default when acquired to determine the status of 'creditor' vs. 'debt collector.' "
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