Skiba v. Laher- 3rd Circuit - August 2, 2007
http://www.ca3.uscourts.gov/opinarch/054168p.pdf
Held, bankrupt's TIAA-CREF retirement annuity is exluded from the bankruptcy estate as a "trust" under 11 USC 541(c)(2).
Friday, August 03, 2007
Thursday, August 02, 2007
Consumer Protection Law - pleading - particularity
Rosenberg v. Avis Rent-A-Car System, Inc. - ED Pa. - July 31, 2007
http://www.paed.uscourts.gov/documents/opinions/07D0888P.pdf
The court granted defendant's motion to dismiss a consumer protection claim under the state CPL, 73 PS 201-1 et seq, for failure to plead the claim with "particularity," as allegedly required by FRCivP 9(b), because fraud is said to be involved. "Federal courts have analogized fraud pleading to the "first paragraph of any newspaper story, requiring the who, what, when, where, and how of the circumstances." This applies not only to fraud actions under federal statutes but also to those based on state law, such as the CPL. The court gave Plaintiff 30 days to file an amended complaint.
Citing a series of ED Pa. cases, the court held that under CPL, plaintiff's must plead the following elements with particularily:
a) a specific false representation of material fact;
b) knowledge by the person who made it of its falsity
c) ignorance of its falsity by the person to whom it was made
d) the intention that it should be acted upon
e) that the plaintiff did act on it to his detriment (damages)
These requirements are "relaxed when the factual information regarding the alleged fraud is within the defendant's control."
As so often happens with this issue, the court did not mention Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth 2003), noting that amendments (fraudulent or deceptive conduct prohibited) to the CPL statute negated this strict pleading requirement.
http://www.paed.uscourts.gov/documents/opinions/07D0888P.pdf
The court granted defendant's motion to dismiss a consumer protection claim under the state CPL, 73 PS 201-1 et seq, for failure to plead the claim with "particularity," as allegedly required by FRCivP 9(b), because fraud is said to be involved. "Federal courts have analogized fraud pleading to the "first paragraph of any newspaper story, requiring the who, what, when, where, and how of the circumstances." This applies not only to fraud actions under federal statutes but also to those based on state law, such as the CPL. The court gave Plaintiff 30 days to file an amended complaint.
Citing a series of ED Pa. cases, the court held that under CPL, plaintiff's must plead the following elements with particularily:
a) a specific false representation of material fact;
b) knowledge by the person who made it of its falsity
c) ignorance of its falsity by the person to whom it was made
d) the intention that it should be acted upon
e) that the plaintiff did act on it to his detriment (damages)
These requirements are "relaxed when the factual information regarding the alleged fraud is within the defendant's control."
As so often happens with this issue, the court did not mention Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth 2003), noting that amendments (fraudulent or deceptive conduct prohibited) to the CPL statute negated this strict pleading requirement.
Wednesday, August 01, 2007
consumer - foreign judgment - full faith and credit - due process
Frontier Leasing Corporation v. Shah - Superior Court - July 30, 2007
http://www.aopc.org/OpPosting/Superior/out/a19038_07.pdf
Pennsylvania court stuck down a default Iowa judgment entered against defendant Shah on due process grounds.
The contractual forum selection clause purported to give Polk County, Iowa, jurisdiction. A judgment was entered against Shah, who had leased an ATM machine fromm a 3rd party lessor who in turn assigned its rights to Frontier Leasing. Shah admittedly defaulted on the lease. Frontier then tried to execute on the judgment in Allegheny County, where defendant was located. Defendant filed a motion to strike the judgment.
Full faith and credit under Article IV, sec. 1 of the US Constitution cannot be granted unless the sister state court that entered the judgment had personal jurisdiction over the defendant, who must have been afforded due process. Personal jurisdiction can be established by consent, in which case the minimum contacts requirement under International Shoe, 326 US 310 (1945), is not applicable. In addition, personal jurisdiction can be waived.
The court looked at Iowa law to determine these issues. Under Iowa law (and Pennsylvania law), forum selection clauses (FSC) are presumptively enforceable. The presumption can be rebutted by showing that the FSC is not reasonable, under the circumstances. To do so, a defendant must make a "strong showing" that the judgment should be set aside.
Some factors in this determination are
- whether there was an arm's length (what length sleeve?) transaction
- relative sophistiction of the parties (experienced and sophisticated businessmen?)
- whether enforcement would be unreasonable or unjust in the circumstances
- whether there was fraud of overreaching
- whether enforcement would make things so gravely difficult for Defendant that he would effectively be deprived of his day in court
In this case Defendant was a Pakistani immigrant with a limited command of English. The FSC did not mention the terms "jurisdiction," or "venue" or "service of process." It only said that a suit would be "proper" if brought in Iowa courts. The FSC language was not in bold type and was contained in the midst of boilerplate language, "inconspicuous even to the trained eye." The court had "no doubt that appellant had no idea what the import of this clause was…." The court decided that "if there is anything substantive to the notion that forum selection clauses should be vitiated if unreasonable, this is the case in which to apply that notion. Accordingly, we conclude the forum selection clause is unenforceable under Iowa law."
This would seem to resolve the case, Nonetheless, the court went on to consider whether Iowa's assumption of jurisdiction was proper, under Iowa law, applying a two-part test. The first part was satisfied by the presumption of jurisdiction based on the contractual FSC. The second part, however, was not. It involved several factors concerning the general notion of minimum contacts, including quantity, nature and quality, source and connection with the cause of action, etc. Here, defendant's only contact with Iowa was a "single tangential contact" -- that he executed a contract that provided that the lessor would render performance in Iowa. This contact was "accidental" and it is "doubtful that appellant had an understanding that this contact could result in his being hailed to Iowa to answer for default. It was a single fortuitous contact, insufficient to give Iowa jurisdiction under its own law."
The court held that the FSC was "not only unforceable but also is insufficient, in and of itself, to confer jurisdiction on the Iowa courts under the due process clause of the Fourteenth amendment. In the end analysis, we simply have not been psersuaded that appellant was afforded "fair warning" that he could be forced to travel to Iowa to answer for an alleged default of the lease."
http://www.aopc.org/OpPosting/Superior/out/a19038_07.pdf
Pennsylvania court stuck down a default Iowa judgment entered against defendant Shah on due process grounds.
The contractual forum selection clause purported to give Polk County, Iowa, jurisdiction. A judgment was entered against Shah, who had leased an ATM machine fromm a 3rd party lessor who in turn assigned its rights to Frontier Leasing. Shah admittedly defaulted on the lease. Frontier then tried to execute on the judgment in Allegheny County, where defendant was located. Defendant filed a motion to strike the judgment.
Full faith and credit under Article IV, sec. 1 of the US Constitution cannot be granted unless the sister state court that entered the judgment had personal jurisdiction over the defendant, who must have been afforded due process. Personal jurisdiction can be established by consent, in which case the minimum contacts requirement under International Shoe, 326 US 310 (1945), is not applicable. In addition, personal jurisdiction can be waived.
The court looked at Iowa law to determine these issues. Under Iowa law (and Pennsylvania law), forum selection clauses (FSC) are presumptively enforceable. The presumption can be rebutted by showing that the FSC is not reasonable, under the circumstances. To do so, a defendant must make a "strong showing" that the judgment should be set aside.
Some factors in this determination are
- whether there was an arm's length (what length sleeve?) transaction
- relative sophistiction of the parties (experienced and sophisticated businessmen?)
- whether enforcement would be unreasonable or unjust in the circumstances
- whether there was fraud of overreaching
- whether enforcement would make things so gravely difficult for Defendant that he would effectively be deprived of his day in court
In this case Defendant was a Pakistani immigrant with a limited command of English. The FSC did not mention the terms "jurisdiction," or "venue" or "service of process." It only said that a suit would be "proper" if brought in Iowa courts. The FSC language was not in bold type and was contained in the midst of boilerplate language, "inconspicuous even to the trained eye." The court had "no doubt that appellant had no idea what the import of this clause was…." The court decided that "if there is anything substantive to the notion that forum selection clauses should be vitiated if unreasonable, this is the case in which to apply that notion. Accordingly, we conclude the forum selection clause is unenforceable under Iowa law."
This would seem to resolve the case, Nonetheless, the court went on to consider whether Iowa's assumption of jurisdiction was proper, under Iowa law, applying a two-part test. The first part was satisfied by the presumption of jurisdiction based on the contractual FSC. The second part, however, was not. It involved several factors concerning the general notion of minimum contacts, including quantity, nature and quality, source and connection with the cause of action, etc. Here, defendant's only contact with Iowa was a "single tangential contact" -- that he executed a contract that provided that the lessor would render performance in Iowa. This contact was "accidental" and it is "doubtful that appellant had an understanding that this contact could result in his being hailed to Iowa to answer for default. It was a single fortuitous contact, insufficient to give Iowa jurisdiction under its own law."
The court held that the FSC was "not only unforceable but also is insufficient, in and of itself, to confer jurisdiction on the Iowa courts under the due process clause of the Fourteenth amendment. In the end analysis, we simply have not been psersuaded that appellant was afforded "fair warning" that he could be forced to travel to Iowa to answer for an alleged default of the lease."
consumer - payday lending - license - Consumer Discount Company Law
Department of Banking v. NCAS of Delaware - Commonwealth Court - July 31, 2007
http://www.aopc.org/OpPosting/CWealth/out/519MD06_7-31-07.pdf
In this original jurisdiction case, the court determined that Advance America, a payday lender, was subject to the licensing requirements of the state Consumer Discount Company Act, 73 PS 6201 et seq., since the effective interest rate in its transactions was much higher than the statutory limit of 6% . The court grant the Department's motion for judgment on the pleadings on this claim.
Although the stated contract interest rate was 5.98% - just below the 6% limit prescribed by the CDCA - AA also charged consumers $149.95 per month as a "participation fee", which the court said was a charge under the statute that had to be include in the aggregate charges and thus was part of the interest rate deterimination, because the participation fee was a "necessary condition" of any credit advance by AA and was a "charge inextricably related to the amount actually loaned or advanced." By including the participation fee, the aggregate interest rate was about 368%, "far in excess of" the 6% interest that an unlicensed lender is permitted to charge.
The court held that the factual record was not sufficient to determine the Act 6 question - whether the monthly participation fee should be considered sham interest which, when combined iwth the stated interest rate of 5.98%, established a violation of 41 PS 201.
The court also held Pennsylvania law applied to the case, since it was brought by the state Department of Banking for violation of state banking laws, and thus was not governed by the terms of contracts between AA and individual consumers, which specified that Delaware law applied.
http://www.aopc.org/OpPosting/CWealth/out/519MD06_7-31-07.pdf
In this original jurisdiction case, the court determined that Advance America, a payday lender, was subject to the licensing requirements of the state Consumer Discount Company Act, 73 PS 6201 et seq., since the effective interest rate in its transactions was much higher than the statutory limit of 6% . The court grant the Department's motion for judgment on the pleadings on this claim.
Although the stated contract interest rate was 5.98% - just below the 6% limit prescribed by the CDCA - AA also charged consumers $149.95 per month as a "participation fee", which the court said was a charge under the statute that had to be include in the aggregate charges and thus was part of the interest rate deterimination, because the participation fee was a "necessary condition" of any credit advance by AA and was a "charge inextricably related to the amount actually loaned or advanced." By including the participation fee, the aggregate interest rate was about 368%, "far in excess of" the 6% interest that an unlicensed lender is permitted to charge.
The court held that the factual record was not sufficient to determine the Act 6 question - whether the monthly participation fee should be considered sham interest which, when combined iwth the stated interest rate of 5.98%, established a violation of 41 PS 201.
The court also held Pennsylvania law applied to the case, since it was brought by the state Department of Banking for violation of state banking laws, and thus was not governed by the terms of contracts between AA and individual consumers, which specified that Delaware law applied.
Monday, July 30, 2007
real property - consumer protection - disclosures
Growall v. Maietta - Superior Court - July 26, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/A04001_07.pdf
Jury found husband/seller liable but not wife/seller, for failure to tell buyer about basement water problem The appellate court affirmed
- under Consumer Protection Law, 73 PS 201-1 et seq., because it appeared that the purchase was for investment and not personal, family, or household purposes
- under Real Estate Settlement Disclosure Law, 68 Pa C.S. 7301 et seq., because - jury found wife did not know of problem at time of sellers' RESDL disclosure - seller/wife was not obligated to make any specific investigation or inquiry to complete the disclosure, 68 Pa CS 7307
- seller/wife not liable to error or inaccuracy or omission if she did not have knowledge of it, 68 Pa. CS 7308
- there was no allegation or proof that there was a problem until 2 months after disclosure statement filled out
The court distinguished similar cases, since they involved "basic facts" about the property "readily ascertainable by the sellers," e.g., zoning retrictions and boundary lines. In the case at bar, the problem was called "an isolated incident of water damage/flooding in the basement," and not a "basis fact."
http://www.courts.state.pa.us/OpPosting/Superior/out/A04001_07.pdf
Jury found husband/seller liable but not wife/seller, for failure to tell buyer about basement water problem The appellate court affirmed
- under Consumer Protection Law, 73 PS 201-1 et seq., because it appeared that the purchase was for investment and not personal, family, or household purposes
- under Real Estate Settlement Disclosure Law, 68 Pa C.S. 7301 et seq., because - jury found wife did not know of problem at time of sellers' RESDL disclosure - seller/wife was not obligated to make any specific investigation or inquiry to complete the disclosure, 68 Pa CS 7307
- seller/wife not liable to error or inaccuracy or omission if she did not have knowledge of it, 68 Pa. CS 7308
- there was no allegation or proof that there was a problem until 2 months after disclosure statement filled out
The court distinguished similar cases, since they involved "basic facts" about the property "readily ascertainable by the sellers," e.g., zoning retrictions and boundary lines. In the case at bar, the problem was called "an isolated incident of water damage/flooding in the basement," and not a "basis fact."
Friday, July 27, 2007
consumer - debt collection - corporate officer
Campuzano-Burgos v. Midland Credit Mgmt., et al. - ED Pa. - July 26, 2007
http://www.paed.uscourts.gov/documents/opinions/07D0870P.pdf
Use of a dunning letter bearing the signature of corporate president and executive v.p. who had no role in the debt collection process was held to be violation if Fair Debt Collection Practices Act, 15 USC 1692e(9), which bars use of any written communication which, inter alia, creates a false impression as to its source, authorization or approval.
The FDCPA is to be interpreted from the viewpoint of the least sophisticated debtor, while avoiding bizarre or idiosyncratic intepretations, and presuming reading with care and in context. The FDCPA is meant to protect the gullible as well as the shrewd.
A writing is deceptive where is can be reasonably read to have two or more different meanings, one of which is inaccurate. It was alleged in this case that the letter was misleading because it gave the impression that the debt was being pursued by "high-ranking officer of the company," when in fact it was not, thereby creating a false impression as to source, authorization or approval. There are analgous cases involving the use of an attorney's name when the attorney is not involved in the collection.
In both situations, there is an implication of "special authority." An unsophisticated consumer getting a letter from an attorney or corporate officer "knows the price of poker has just gone up" because attorneys and officers have a special status and greater weight and "get the debtor's knees knocking. An escalation from a lowly collection agent to a senior executive of the company" shows that the debt collector means business. It "connotes authority and is more likely to generate a response." In such cases, there is a "general concern with debt collectors' practice of falsely implying that someone in a position of real authority is supervising the collection of this debt." It is an "attempt to goad a debtor into paying by using a signatory who has no involvement in the handling of the…cases as a signal that the collection process has escalated to a graver level….to convey that a high-roller has entered the game."
The court held that "where some aspect of a debt collector's communication - whether explicit or implied - has the purpose or effect of making a debtor more likely to respond, the FDCPA requires that it be true." Because the executives in this cases did not review the case and had no actual involvement, the court found that the letter was deceptive and misleading within the meaning of sec. 1692e.
http://www.paed.uscourts.gov/documents/opinions/07D0870P.pdf
Use of a dunning letter bearing the signature of corporate president and executive v.p. who had no role in the debt collection process was held to be violation if Fair Debt Collection Practices Act, 15 USC 1692e(9), which bars use of any written communication which, inter alia, creates a false impression as to its source, authorization or approval.
The FDCPA is to be interpreted from the viewpoint of the least sophisticated debtor, while avoiding bizarre or idiosyncratic intepretations, and presuming reading with care and in context. The FDCPA is meant to protect the gullible as well as the shrewd.
A writing is deceptive where is can be reasonably read to have two or more different meanings, one of which is inaccurate. It was alleged in this case that the letter was misleading because it gave the impression that the debt was being pursued by "high-ranking officer of the company," when in fact it was not, thereby creating a false impression as to source, authorization or approval. There are analgous cases involving the use of an attorney's name when the attorney is not involved in the collection.
In both situations, there is an implication of "special authority." An unsophisticated consumer getting a letter from an attorney or corporate officer "knows the price of poker has just gone up" because attorneys and officers have a special status and greater weight and "get the debtor's knees knocking. An escalation from a lowly collection agent to a senior executive of the company" shows that the debt collector means business. It "connotes authority and is more likely to generate a response." In such cases, there is a "general concern with debt collectors' practice of falsely implying that someone in a position of real authority is supervising the collection of this debt." It is an "attempt to goad a debtor into paying by using a signatory who has no involvement in the handling of the…cases as a signal that the collection process has escalated to a graver level….to convey that a high-roller has entered the game."
The court held that "where some aspect of a debt collector's communication - whether explicit or implied - has the purpose or effect of making a debtor more likely to respond, the FDCPA requires that it be true." Because the executives in this cases did not review the case and had no actual involvement, the court found that the letter was deceptive and misleading within the meaning of sec. 1692e.
admin. law - appeal - late appeal - nunc pro tunc
Hantman, Inc. v. Office of UC Tax Services
http://www.aopc.org/OpPosting/CWealth/out/36CD07_7-11-07.pdf
Nunc pro tunc appeal denied where agency rejected the credibility of petitioner's claim that he had a psychological disability -- a phobia about forms.
As a rule, time limits for appeals are mandatory, absent
- fraud or manifestly wrongful or negligent conduct of admininstrative authorities
- non-negligent circumstances of appellant or his/her counsel, if
- the appeal is filed shortly after expiration date and
- the appellee is not prejudiced (Bass - 401 A2d 1133 (Pa. 1979)
- unexpected illness/hospitalization (Cook - 671 A2d 1139 (Pa. 1996))
Even in those case, the party attempting to file an appeal nunc pro tunc carries a "heavy burden to justify an untimely appeal."
http://www.aopc.org/OpPosting/CWealth/out/36CD07_7-11-07.pdf
Nunc pro tunc appeal denied where agency rejected the credibility of petitioner's claim that he had a psychological disability -- a phobia about forms.
As a rule, time limits for appeals are mandatory, absent
- fraud or manifestly wrongful or negligent conduct of admininstrative authorities
- non-negligent circumstances of appellant or his/her counsel, if
- the appeal is filed shortly after expiration date and
- the appellee is not prejudiced (Bass - 401 A2d 1133 (Pa. 1979)
- unexpected illness/hospitalization (Cook - 671 A2d 1139 (Pa. 1996))
Even in those case, the party attempting to file an appeal nunc pro tunc carries a "heavy burden to justify an untimely appeal."
Thursday, July 26, 2007
mortage foreclosure - HEMAP
Fish v. PHFA - Commonwealth Court - July 25, 2007
http://www.aopc.org/OpPosting/CWealth/out/32CD07_7-25-07.pdf
Court upheld PHFA's rejection of the HEMAP application of a attorney/petitioner.
PHFA had rejected the application, finding that
a) applicant did not show that he was suffering financial hardship due to circumstances beyond his control, because
- he got a tax return of $6180, enough to make 10 mortgage payments, but saved nothing toward the mortgage delinquency
- applicant had net monthly income of $2161, enough to meet his regular monthly expenses, but "has failed to save any funds toward the delinquency"
b) applicant did not comply with procedural requirements of Act 91, in that he failed to attend a face-to-face meeting with a consumer credit counseling agency (CCCA) within 33 days of the date of his Act 91 letter http://www.phfa.org/forms/hemap/hemap_act91_notice.pdf.
c) since applicant had received but not acted on an Act 91 notice in a first foreclosure action, no second Act 91 letter was required before the second foreclosure was commenced under 12 Pa. Code 31.203(a)(3)(iv) http://www.pacode.com/secure/data/012/chapter31/s31.203.html.
The purpose of an Act 91 notice is to "instruct the morgagor of different means he may use to resolve his arrearages in order to avoid foreclosure…and also gives him a timetable in which such means must be accomplished." Applicant got that information.
http://www.aopc.org/OpPosting/CWealth/out/32CD07_7-25-07.pdf
Court upheld PHFA's rejection of the HEMAP application of a attorney/petitioner.
PHFA had rejected the application, finding that
a) applicant did not show that he was suffering financial hardship due to circumstances beyond his control, because
- he got a tax return of $6180, enough to make 10 mortgage payments, but saved nothing toward the mortgage delinquency
- applicant had net monthly income of $2161, enough to meet his regular monthly expenses, but "has failed to save any funds toward the delinquency"
b) applicant did not comply with procedural requirements of Act 91, in that he failed to attend a face-to-face meeting with a consumer credit counseling agency (CCCA) within 33 days of the date of his Act 91 letter http://www.phfa.org/forms/hemap/hemap_act91_notice.pdf.
c) since applicant had received but not acted on an Act 91 notice in a first foreclosure action, no second Act 91 letter was required before the second foreclosure was commenced under 12 Pa. Code 31.203(a)(3)(iv) http://www.pacode.com/secure/data/012/chapter31/s31.203.html.
The purpose of an Act 91 notice is to "instruct the morgagor of different means he may use to resolve his arrearages in order to avoid foreclosure…and also gives him a timetable in which such means must be accomplished." Applicant got that information.
Monday, July 23, 2007
discovery - sanctions - factors
Reilly v. Ernst & Young LLP - Superior Court- July 18, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/e03004_06.pdf
Trial court abused its discretion by ordering the deemed admission of a party's Request for Admissions due to other party's failure to verify its responses to the RFA.
The following factors militated strongy against such a deemed admission
- the prejudice caused to the other party and whether the prejudice can be cured
- the defaulting party's willfulness or bad faith in failing to comply with the discovery order. - the number of discovery violations
- the importance of the precluded evidence in light of the failure to comply
http://www.courts.state.pa.us/OpPosting/Superior/out/e03004_06.pdf
Trial court abused its discretion by ordering the deemed admission of a party's Request for Admissions due to other party's failure to verify its responses to the RFA.
The following factors militated strongy against such a deemed admission
- the prejudice caused to the other party and whether the prejudice can be cured
- the defaulting party's willfulness or bad faith in failing to comply with the discovery order. - the number of discovery violations
- the importance of the precluded evidence in light of the failure to comply
Wednesday, July 18, 2007
mortgage foreclosure - jurisdiction - service
PNC Bank v. Mathias- Superior Court- July 17, 2007
http://www.aopc.org/OpPosting/Superior/out/A03002_07.pdf
The trial court did not have jurisdiction to enter a default judgment against the heir of deceased mortgagor, where the plaintiff bank did not serve the heir -- named as a defendant "unknown heir" -- with a copy of the complaint, even though it knew of his existence and location and had corresponded with him by letter and phone.
Despite learning of mortgagor's death, the existence of a potential heir, and correspondence with that person, the bank filed and trial court granted the bank's motion for alternate serve under Rule 430, instead of requiring regular service under Rule 410(a). The heir didn’t learn of the alternate service and never received personal service. In its motion, the bank averred that decedent's heirs were not known.
The appellate court held that the plaintiff "did not effectuate proper service" of the complaint where it had prior written and telephone communications with the heir, knew that the heir represented the mortgagor's estate, and knew that the person was a possible heir to the mortgagor's estate, having said as much in a letter to him. "If the plaintiff has failed to effectuate valid service and if the defendant lacks notice of the proceedings against him, the court has no jurisdiction over the party and is powerless to enter judgment. Entry of a judgment under these circumstances was also held to violate due process.
http://www.aopc.org/OpPosting/Superior/out/A03002_07.pdf
The trial court did not have jurisdiction to enter a default judgment against the heir of deceased mortgagor, where the plaintiff bank did not serve the heir -- named as a defendant "unknown heir" -- with a copy of the complaint, even though it knew of his existence and location and had corresponded with him by letter and phone.
Despite learning of mortgagor's death, the existence of a potential heir, and correspondence with that person, the bank filed and trial court granted the bank's motion for alternate serve under Rule 430, instead of requiring regular service under Rule 410(a). The heir didn’t learn of the alternate service and never received personal service. In its motion, the bank averred that decedent's heirs were not known.
The appellate court held that the plaintiff "did not effectuate proper service" of the complaint where it had prior written and telephone communications with the heir, knew that the heir represented the mortgagor's estate, and knew that the person was a possible heir to the mortgagor's estate, having said as much in a letter to him. "If the plaintiff has failed to effectuate valid service and if the defendant lacks notice of the proceedings against him, the court has no jurisdiction over the party and is powerless to enter judgment. Entry of a judgment under these circumstances was also held to violate due process.
mortgage foreclosure - deficiency judgment - proof of value
Loukas v. Mathias, et al. - Superior Court - July 12, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/S22037_07.pdf
Plaintiff in a mortgage foreclosure must offer competent proof of an alleged reduction in value due to "uncertainty of title" in a Deficiency Judgment Act (DFA) case under, 42 Pa CS 8101 . The Superior Court reversed the trial court, which had improperly adopted the unsupported testimony of plaintiff's witness that a supposed uncertainty of title reduced the value of the property by about 10%, thus causing a substantial deficiency judgment and continued liability of the defendant, over and above the value of the real property taken in execution.
The objective of the DFA is "to relieve a debtor of further personal liability to the creditor, if the real property taken by the creditor on an execution has a fair market value... sufficient so that the creditor may dispose of the property to others...without a net loss to the creditor." In this case, the unproven reduction in value, "without factual support in the record," thwarted that purpose. The appellate court's reversal resulted in a surplus in excess of plaintiff-appellee's judgment, thus rendering a deficiency judgment "inappropriate." The court found that the property, bolstered in value by the rejection of an unwarranted deduction due to the alleged uncertainty of title, satisfied defendants' liability to plaintiff.
http://www.courts.state.pa.us/OpPosting/Superior/out/S22037_07.pdf
Plaintiff in a mortgage foreclosure must offer competent proof of an alleged reduction in value due to "uncertainty of title" in a Deficiency Judgment Act (DFA) case under, 42 Pa CS 8101 . The Superior Court reversed the trial court, which had improperly adopted the unsupported testimony of plaintiff's witness that a supposed uncertainty of title reduced the value of the property by about 10%, thus causing a substantial deficiency judgment and continued liability of the defendant, over and above the value of the real property taken in execution.
The objective of the DFA is "to relieve a debtor of further personal liability to the creditor, if the real property taken by the creditor on an execution has a fair market value... sufficient so that the creditor may dispose of the property to others...without a net loss to the creditor." In this case, the unproven reduction in value, "without factual support in the record," thwarted that purpose. The appellate court's reversal resulted in a surplus in excess of plaintiff-appellee's judgment, thus rendering a deficiency judgment "inappropriate." The court found that the property, bolstered in value by the rejection of an unwarranted deduction due to the alleged uncertainty of title, satisfied defendants' liability to plaintiff.
Tuesday, July 17, 2007
consumer - bankruptcy - stay
GMAC v. Buchanan - Superior Court - June 11, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/s25035_07.pdf
Defendant's petition to set aside a sheriff's sale rejected. Sale was not subject to any automatic stay, as a result of defendant's third bankruptcy with the immediately preceding 12-month period, during which two previous bankruptcy petitions were pending and dismissed, under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 11 USC 362(c)(4)(A)(i).
http://www.courts.state.pa.us/OpPosting/Superior/out/s25035_07.pdf
Defendant's petition to set aside a sheriff's sale rejected. Sale was not subject to any automatic stay, as a result of defendant's third bankruptcy with the immediately preceding 12-month period, during which two previous bankruptcy petitions were pending and dismissed, under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 11 USC 362(c)(4)(A)(i).
consumer - debt collection - letter not false, deceptive, or misleading
Rosenau v. Unifund Corp. - ED Pa. 0 June 28, 2007
http://www.paed.uscourts.gov/documents/opinions/07d0782p.pdf
A letter from a debt collector is not false, deceptive or misleading where it says that "if we are unable to resolve this issue within 35 days we may refer this matter to an attorney in your area for legal consideration." Plaintff alleged that it was false, etc., because it was, in fact, not prepared, reviewed, and/or sent by a legal department or a lawyer but could reasonably be read that way, from the perspective of the least sophisticated debtor (LSD).
The FDCPA, 15 USC 1692 et seq., prevents liability for "bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanidng and willingness to read with care."
Here, plaintiff's intepretation was bizarre and idiosyncratic, in urging that the LSD would believe the letter came from an attorney, when in fact it did not. Even an LSD could not reasonably interpret the letter as having been written or reviewed by an attorney. There is no other reasonable intepretation and therefore the letter is not false, deceptive or misleading.
http://www.paed.uscourts.gov/documents/opinions/07d0782p.pdf
A letter from a debt collector is not false, deceptive or misleading where it says that "if we are unable to resolve this issue within 35 days we may refer this matter to an attorney in your area for legal consideration." Plaintff alleged that it was false, etc., because it was, in fact, not prepared, reviewed, and/or sent by a legal department or a lawyer but could reasonably be read that way, from the perspective of the least sophisticated debtor (LSD).
The FDCPA, 15 USC 1692 et seq., prevents liability for "bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanidng and willingness to read with care."
Here, plaintiff's intepretation was bizarre and idiosyncratic, in urging that the LSD would believe the letter came from an attorney, when in fact it did not. Even an LSD could not reasonably interpret the letter as having been written or reviewed by an attorney. There is no other reasonable intepretation and therefore the letter is not false, deceptive or misleading.
consumer - appraiser - liability
Morilus v.Countrywide Home Loans, Inc. - ED Pa. - June 20, 2007
http://www.paed.uscourts.gov/documents/opinions/07d0746p.pdf
The plaintiff sued an appraisal company under a number of consumer protection statutes, claiming that the company had conspired to unfairly and deceptively induce plaintiff to execute the loan, based on a falsely inflated appraisal price, with monthly payments that plaintiff could not afford. The court sustained defendant's motion to dismiss some of plaintiff's claims, including
- Truth in Lending Act, 15 USC 1601 et seq., because the defendant was not a creditor
- Home Ownership and Real Estate Protection Act, 15 USC 1639(a), because defendant was not a "creditor"
- Equal Credit Opportunity AQct 15 USC 1691a(e), because defendant was not involved in any credit decision
- Pennsylvania Fair Credit Extension Uniformity Act, 73 PS 2270 et seq., because defendant was not a "creditor"
- Pennsylvania Credit Services Act, 73 PS 2182, because defendant was not a "creditor" or credit services organization
- punitive damages - there was no allegation that D knew of a high risk of harm to P or that it acted deliberately and outrageously and with a conscious disregard of the risk.
The court also rejected the following claims but gave plaintiff leave to file an amended complaint with the necessary allegations, as follows
- Real Estate Settlement Procedures Act, 12 USC 2601 et seq. - to sustain her claim that the defendant was part of a fraudulent scheme to improperly split settlement charges, plaintiff would have to allege that she made a "qualified written request" to the lender stating that her account was in error
- Pennsylvania Consumer Protection Law - Plaintiff did not make any allegations that met the requirements of common law fraud, including a material misreprentation of an existing fact, scienter, jusitifiable reliance on the misrepresentation, and damages, citing Booze v. Allstate Insurance, 750 A.2d 877, 880 (Pa. Super. 2000) [But see Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth 2003), noting that amendments to the CPL statute negated this requirement. ]
- fraud claim - both state and federal pleading law requires pleading with more particularity that in the existing complaint.
http://www.paed.uscourts.gov/documents/opinions/07d0746p.pdf
The plaintiff sued an appraisal company under a number of consumer protection statutes, claiming that the company had conspired to unfairly and deceptively induce plaintiff to execute the loan, based on a falsely inflated appraisal price, with monthly payments that plaintiff could not afford. The court sustained defendant's motion to dismiss some of plaintiff's claims, including
- Truth in Lending Act, 15 USC 1601 et seq., because the defendant was not a creditor
- Home Ownership and Real Estate Protection Act, 15 USC 1639(a), because defendant was not a "creditor"
- Equal Credit Opportunity AQct 15 USC 1691a(e), because defendant was not involved in any credit decision
- Pennsylvania Fair Credit Extension Uniformity Act, 73 PS 2270 et seq., because defendant was not a "creditor"
- Pennsylvania Credit Services Act, 73 PS 2182, because defendant was not a "creditor" or credit services organization
- punitive damages - there was no allegation that D knew of a high risk of harm to P or that it acted deliberately and outrageously and with a conscious disregard of the risk.
The court also rejected the following claims but gave plaintiff leave to file an amended complaint with the necessary allegations, as follows
- Real Estate Settlement Procedures Act, 12 USC 2601 et seq. - to sustain her claim that the defendant was part of a fraudulent scheme to improperly split settlement charges, plaintiff would have to allege that she made a "qualified written request" to the lender stating that her account was in error
- Pennsylvania Consumer Protection Law - Plaintiff did not make any allegations that met the requirements of common law fraud, including a material misreprentation of an existing fact, scienter, jusitifiable reliance on the misrepresentation, and damages, citing Booze v. Allstate Insurance, 750 A.2d 877, 880 (Pa. Super. 2000) [But see Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth 2003), noting that amendments to the CPL statute negated this requirement. ]
- fraud claim - both state and federal pleading law requires pleading with more particularity that in the existing complaint.
consumer - Fair Credit Reporting Act - refusal to investigate disputed debt
Klotz v. Trans Union, LLC - ED Pa. - July 2, 2007
http://www.paed.uscourts.gov/documents/opinions/07D0792P.pdf
In the course of rejecting the plaintiff's motion to certify a class, the court held that the defendant credit reporting agency (CRA) did not have a duty to investigate plaintiff's dispute about his credit report , since
- plaintiff's documents were prepared by a third party credit repair organization (CRO)
- plaintiff did not notify the CRA directly of his dispute, as required by 15 USC 1681i(a)(1)(A)
- plaintiff did not prepare or read the dispute, just signed it and sent it in
- plaintiff did not prove the inaccuracy of the CRA's information, as required by 15 USC 1681i
The court relied on the decision in Cushman v. Trans Union Corp. 115 F.3d 220 (3d Cir. 1997)
http://www.paed.uscourts.gov/documents/opinions/07D0792P.pdf
In the course of rejecting the plaintiff's motion to certify a class, the court held that the defendant credit reporting agency (CRA) did not have a duty to investigate plaintiff's dispute about his credit report , since
- plaintiff's documents were prepared by a third party credit repair organization (CRO)
- plaintiff did not notify the CRA directly of his dispute, as required by 15 USC 1681i(a)(1)(A)
- plaintiff did not prepare or read the dispute, just signed it and sent it in
- plaintiff did not prove the inaccuracy of the CRA's information, as required by 15 USC 1681i
The court relied on the decision in Cushman v. Trans Union Corp. 115 F.3d 220 (3d Cir. 1997)
mobile homepark rights act - park closures - HB 1673 (proposed)
This recently introduced bill would require written notice to park residents within 30 days of the park owner entering into an agreement for the sale of the park.
You can see HB 1673 at http://www.legis.state.pa.us/cfdocs/legis/home/bills/topindex.cfm
The notice would have to include
- the estimated date that residents will be expected to vacate, no sooner than 180 days of getting notice
- the estimated date that the park will be closed.
- a receipt from one adult resident in each home showing that the notice was received
- a right of first refusal to existing residents and neootiation in good faith
- payment of relocation expenses equivalent to 6 months rent
- pay the appraised value of the home of the tenant cannot find a suitable replacement site
Park owners could not refused to admit used home thyat are in good and tenantable condition
You can see HB 1673 at http://www.legis.state.pa.us/cfdocs/legis/home/bills/topindex.cfm
The notice would have to include
- the estimated date that residents will be expected to vacate, no sooner than 180 days of getting notice
- the estimated date that the park will be closed.
- a receipt from one adult resident in each home showing that the notice was received
- a right of first refusal to existing residents and neootiation in good faith
- payment of relocation expenses equivalent to 6 months rent
- pay the appraised value of the home of the tenant cannot find a suitable replacement site
Park owners could not refused to admit used home thyat are in good and tenantable condition
Tuesday, July 10, 2007
courts- appeals - MDJ judgments - date of judgment
Lloyd, Inc. v. Microbytes, Inc. - Superior Court - July 9, 2007
http://www.aopc.org/OpPosting/Superior/out/a10028_07.pdf
The time to appeal an MDJ judgment was held to begin to run on the "date of judgement" entered on the Notice of Judgment/Transcript Civil Case, on which the MDJ signed the judgment, rather than the next day, on which the Notice was processed.
A judgment is "entered" under MDJ Rule 1002 when the judgment form is signed by the MDJ, not when it is printed out and the process of providing notice of the judgment is initiated. A judgment is encountered simultaneously with the recordation of the judgment on the pre-printed judgment/transcript form. The rules could have allowed the appeal period to begin on the date the notice is printed. They do not, so "we must assume that the appeal period was meant to begin with the signing of the judgment form by the magisterial district judge."
http://www.aopc.org/OpPosting/Superior/out/a10028_07.pdf
The time to appeal an MDJ judgment was held to begin to run on the "date of judgement" entered on the Notice of Judgment/Transcript Civil Case, on which the MDJ signed the judgment, rather than the next day, on which the Notice was processed.
A judgment is "entered" under MDJ Rule 1002 when the judgment form is signed by the MDJ, not when it is printed out and the process of providing notice of the judgment is initiated. A judgment is encountered simultaneously with the recordation of the judgment on the pre-printed judgment/transcript form. The rules could have allowed the appeal period to begin on the date the notice is printed. They do not, so "we must assume that the appeal period was meant to begin with the signing of the judgment form by the magisterial district judge."
mortgage foreclosure - Act 91 notice - local consumer counseling agency - jurisdiction
Washington Mutual v. Carr - CP Adams County - July 5, 2006
49 Adams L.J. 17 (CP Adams 2006)
In what the court said was a matter of first impression in the state, it held that Act 91 requires a mortgage holder to give the name and address of a "local" consumer credit counseling agency (CCCA), 35 P.S. 1680.403c(b)(1), which the Pa. Housing Finance Agency has indicated mean as being "for the county" in which the property in located. In the instant case, the mortgagee listing 47 CCCAs but none in the county where the property was located and only five in the neighboring counties comprising south central Pennsylvania.
Citing case law to the effect that Act 91 is meant to protect vulnerable consumers unschooled in the complex world of mortgage foreclosure from the loss of their homes due to ignorance of their rights in a sometimes sharp practice of lenders," the court found the "Bank's cavalier shotgun approach to proving appropriate notice to a mortgagor is insufficient to satisfy the jurisdictional prerequisites provided for in Act 91." The court found that the defect could not be cured by amendment and dismissed the complaint, finding that strict and not just substantial compliance with Act 91 was required, since proper notice under Act 91 is a jurisdictional matter. PHA v. Barbour, 592 A.2d 47, 48 (Pa. Super. 1991). "[L]ack of compliance, even if minimal or inadvertent, denies the Court jurisdiction."
49 Adams L.J. 17 (CP Adams 2006)
In what the court said was a matter of first impression in the state, it held that Act 91 requires a mortgage holder to give the name and address of a "local" consumer credit counseling agency (CCCA), 35 P.S. 1680.403c(b)(1), which the Pa. Housing Finance Agency has indicated mean as being "for the county" in which the property in located. In the instant case, the mortgagee listing 47 CCCAs but none in the county where the property was located and only five in the neighboring counties comprising south central Pennsylvania.
Citing case law to the effect that Act 91 is meant to protect vulnerable consumers unschooled in the complex world of mortgage foreclosure from the loss of their homes due to ignorance of their rights in a sometimes sharp practice of lenders," the court found the "Bank's cavalier shotgun approach to proving appropriate notice to a mortgagor is insufficient to satisfy the jurisdictional prerequisites provided for in Act 91." The court found that the defect could not be cured by amendment and dismissed the complaint, finding that strict and not just substantial compliance with Act 91 was required, since proper notice under Act 91 is a jurisdictional matter. PHA v. Barbour, 592 A.2d 47, 48 (Pa. Super. 1991). "[L]ack of compliance, even if minimal or inadvertent, denies the Court jurisdiction."
Monday, July 02, 2007
PFA - standing - sexual/intimate partner - victim of sexual assault
Scott v. Shay - Superior Court - June 26, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a37040_06.pdf
Victim and perpetrator of sexual assault are not "family or household members" or "sexual or intimate partners."
In addition, there was no evidence of "abuse" in the case. Two encounters more than a year apart do not establish a course of conduct. Nor did plaintiff have a reasonable fear of bodily injury from defendant's actions.
http://www.courts.state.pa.us/OpPosting/Superior/out/a37040_06.pdf
Victim and perpetrator of sexual assault are not "family or household members" or "sexual or intimate partners."
In addition, there was no evidence of "abuse" in the case. Two encounters more than a year apart do not establish a course of conduct. Nor did plaintiff have a reasonable fear of bodily injury from defendant's actions.
Tuesday, June 26, 2007
UC- voluntary quit - voluntary retirement program
Davila v. UCBR - Commonwealth Court - June 26, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/255CD07_6-26-07.pdf
A Claimant who quit her job pursuant to requirements of a voluntary retirement program did not have good cause to leave her job, where continuing work was available and she was not in danger of losing her job. The fact that the program required her to retire did not constitute good cause, since she entered the program voluntarily.
http://www.courts.state.pa.us/OpPosting/CWealth/out/255CD07_6-26-07.pdf
A Claimant who quit her job pursuant to requirements of a voluntary retirement program did not have good cause to leave her job, where continuing work was available and she was not in danger of losing her job. The fact that the program required her to retire did not constitute good cause, since she entered the program voluntarily.
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