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."
Friday, September 28, 2007
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.' "
Wednesday, September 12, 2007
Third Circuit Rules Child Wrongfully Detained under Hague Convention
http://www.ca3.uscourts.gov/opinarch/063962p.pdf
The U.S. Court of Appeals for the Third Circuit upheld the District Cout's decision in Yang v. Tsui, No. 06-3962, Filed: August 22, 2007.
In the decision the Court held that the Father in this case wrongfully retained custody of his five year old daughter in Pittsburgh after taking temporary physical custody of her while the mother had surgery and follow up treatment for a major medical condition at home in Canada.
The Court found that, Under the Hague Convention, four questions must be answered. A court must determine (1) when the removal or retention took place; (2) the child’s habitual residence immediately prior to such removal or retention; (3) whether the removal or retention breached the petitioner’s custody rights under the law of the child’s habitual residence; and (4) whether the petitioner was exercising his or her custody rights at the time of removal or retention.
In this case the court found that based on an analysis of these considerations the child in this case was wrongfully detained.
The determination by a court that a child was wrongfully removed or retained does not automatically mean that the child must be returned to his or her habitual residence. Rather, once the petitioner has proven his or her case, “the burden shifts to the respondent to prove an affirmative defense against the return of the child to the country of habitual residence.”
The father maintained that he proved the “wishes of the child” defense by a preponderance of the evidence and that the District Court abused its discretion by entering the order for Raeann to be returned to Canada despite such proof.
The Court found that the District Court did not err by refusing to apply the defense. Consequently, the order of the Distict Court was affirmed mandating that the child be returned to her mother in Canada.
The U.S. Court of Appeals for the Third Circuit upheld the District Cout's decision in Yang v. Tsui, No. 06-3962, Filed: August 22, 2007.
In the decision the Court held that the Father in this case wrongfully retained custody of his five year old daughter in Pittsburgh after taking temporary physical custody of her while the mother had surgery and follow up treatment for a major medical condition at home in Canada.
The Court found that, Under the Hague Convention, four questions must be answered. A court must determine (1) when the removal or retention took place; (2) the child’s habitual residence immediately prior to such removal or retention; (3) whether the removal or retention breached the petitioner’s custody rights under the law of the child’s habitual residence; and (4) whether the petitioner was exercising his or her custody rights at the time of removal or retention.
In this case the court found that based on an analysis of these considerations the child in this case was wrongfully detained.
The determination by a court that a child was wrongfully removed or retained does not automatically mean that the child must be returned to his or her habitual residence. Rather, once the petitioner has proven his or her case, “the burden shifts to the respondent to prove an affirmative defense against the return of the child to the country of habitual residence.”
The father maintained that he proved the “wishes of the child” defense by a preponderance of the evidence and that the District Court abused its discretion by entering the order for Raeann to be returned to Canada despite such proof.
The Court found that the District Court did not err by refusing to apply the defense. Consequently, the order of the Distict Court was affirmed mandating that the child be returned to her mother in Canada.
Monday, September 10, 2007
mortgage insurance - Fair Credit Reporting Act - adverse action notice
Whitfield v. Radian Guaranty, Inc. - Third Circuit - August 30, 2007
http://www.ca3.uscourts.gov/opinarch/055017p.pdf
Because of the poor credit history of Plaintiffs-borrowers, the Lender (Countrywide Home Mortgage) agreed to give them a mortgage for most of purchase price, on condition that they pay for mortgage insurance. The Lender arranged for mortgage insurance from defendant-insurer for $905/month (!), based on the loan-to-value and the consumers' credit score. Defendant conceded that the insurance premium would have been lower if the borrowers' credit score had been higher. Defendant-insurer did not send an adverse action notice to plaintiffs, according to their policy of not doing so when insurance is approved.
Plaintiffs sued, claiming that an adverse action notice was required under the Fair Credit Reporting Act, 15 USC sec.1681m(a)., since they paid more than the lowest insurance rate due to an adverse credit report. The FCRA requires that a user of information from a credit report takes any adverse action against an individual, that the user shall notice the individual of the adverse action, 15 USC 1681m(a).
Based in part on Safeco Insurance Co. b. Burr, 127 S.Ct. 2201 (2007), the court held that
a) an initial premium/first-time rate could be considered an increase in a charge for insurance for purpose of the adverse action notice requirement of the FCRA, and
b) privity of contract between the insurer and consumer-borrower is not a requirement of the FCRA
http://www.ca3.uscourts.gov/opinarch/055017p.pdf
Because of the poor credit history of Plaintiffs-borrowers, the Lender (Countrywide Home Mortgage) agreed to give them a mortgage for most of purchase price, on condition that they pay for mortgage insurance. The Lender arranged for mortgage insurance from defendant-insurer for $905/month (!), based on the loan-to-value and the consumers' credit score. Defendant conceded that the insurance premium would have been lower if the borrowers' credit score had been higher. Defendant-insurer did not send an adverse action notice to plaintiffs, according to their policy of not doing so when insurance is approved.
Plaintiffs sued, claiming that an adverse action notice was required under the Fair Credit Reporting Act, 15 USC sec.1681m(a)., since they paid more than the lowest insurance rate due to an adverse credit report. The FCRA requires that a user of information from a credit report takes any adverse action against an individual, that the user shall notice the individual of the adverse action, 15 USC 1681m(a).
Based in part on Safeco Insurance Co. b. Burr, 127 S.Ct. 2201 (2007), the court held that
a) an initial premium/first-time rate could be considered an increase in a charge for insurance for purpose of the adverse action notice requirement of the FCRA, and
b) privity of contract between the insurer and consumer-borrower is not a requirement of the FCRA
injunction - dissipation of assets
Ambrogi v. Reber - Superior Court - September 7, 2007
http://www.aopc.org/OpPosting/Superior/out/a12010_07.pdf
It was appropriate for the trial court to grant an injunction preventing defendants from dissipating their assets during the pendency of a lawsuit. The court ordered defendants to place the net proceeds of the sale of considerable real property in a supervised escrow account. There was a demonstrated need to prevent defendants from liquidating their assets and making themselves judgment proof.
The opinion contains a good review of that factors that are required to get a preliminary injunction.
- prevent immediate and irreparable harm
- greater injury from on-grant that grant
- maintenance of status quo
- the alleged wrong is manifest and the injunction of reasonably suited to abate it.
The movant doesn't have to show that he will prevail, only that there are substantial legal questions that the court has to resolve. On appeal, the court determines if the trial court had reasonable grounds for its order and will reverse only where no grounds for it exist or that the rule of law relied on was palpably erroneous or misapplied.
In this wrongful death action, defendants sold almost 40% of their real estate in less than 2 years from the date of a fatal fire at issue in the case. The trial court was troubled by the number of post-fire sales, the high value of the properties sold after the fire ($3 million), defendants' failure to purchase new real property with the proceeds, defendants' failure to disclose ownership of other properties, and very high potential damages.
The trial court simply directed that defendants must preserve their assets at a level reasonably calculated to satisfy a judgment that could be entered. Its order allowed defendants to petition for a change and release of funds to conduct their business.
http://www.aopc.org/OpPosting/Superior/out/a12010_07.pdf
It was appropriate for the trial court to grant an injunction preventing defendants from dissipating their assets during the pendency of a lawsuit. The court ordered defendants to place the net proceeds of the sale of considerable real property in a supervised escrow account. There was a demonstrated need to prevent defendants from liquidating their assets and making themselves judgment proof.
The opinion contains a good review of that factors that are required to get a preliminary injunction.
- prevent immediate and irreparable harm
- greater injury from on-grant that grant
- maintenance of status quo
- the alleged wrong is manifest and the injunction of reasonably suited to abate it.
The movant doesn't have to show that he will prevail, only that there are substantial legal questions that the court has to resolve. On appeal, the court determines if the trial court had reasonable grounds for its order and will reverse only where no grounds for it exist or that the rule of law relied on was palpably erroneous or misapplied.
In this wrongful death action, defendants sold almost 40% of their real estate in less than 2 years from the date of a fatal fire at issue in the case. The trial court was troubled by the number of post-fire sales, the high value of the properties sold after the fire ($3 million), defendants' failure to purchase new real property with the proceeds, defendants' failure to disclose ownership of other properties, and very high potential damages.
The trial court simply directed that defendants must preserve their assets at a level reasonably calculated to satisfy a judgment that could be entered. Its order allowed defendants to petition for a change and release of funds to conduct their business.
Friday, September 07, 2007
employment - wages - FLSA - donning/doffing work clothing
DeAsencio v. Tyson Foods, Inc. - 3d Circuit - September 6, 2007
http://www.ca3.uscourts.gov/opinarch/063502p.pdf
Held, time that poultry workers spent donning and doffing clothing needed to do their work was compensable "work" under the Fair Labor Standards Act, 29 USC sec. 201 et seq., since it involved activities that were an integral and indispensable part of their principal activities, took place on the employer's premises, pursuant to the rules of the employer and for its benefit.
http://www.ca3.uscourts.gov/opinarch/063502p.pdf
Held, time that poultry workers spent donning and doffing clothing needed to do their work was compensable "work" under the Fair Labor Standards Act, 29 USC sec. 201 et seq., since it involved activities that were an integral and indispensable part of their principal activities, took place on the employer's premises, pursuant to the rules of the employer and for its benefit.
Friday, August 31, 2007
Consumer - mortgage refinancing - existence of contract - estoppel/fraud - statute of frauds
McCloskey v. Novastar Mortgage, Inc. - ED Pa. - August 21, 2007
http://www.paed.uscourts.gov/documents/opinions/07D0994P.pdf
Plaintiffs were solicited by defendant to refinance their mortgage. Based on a series of conversation and emails with defendant, plaintiffs withdrew their refinancing arrangement with another mortgage company. Defendant ultimately rejected plaintiff's application, allegedly because their income was somewhat less that stated orally during phone conversations. Plaintiffs sued for breach of contract, promissory estoppel and fraud.
Contract
The contract cause of action was dismissed, because plaintiffs failed to establish the existence of a legal contract. The documents that they produced were evidence of preliminary negotiations but not a contract. The documents did not contain the "essential terms of the contract." Under Pennsylvania law, a contract exists if a) the parties have manifested an intent to be found by the terms of the agreement, b) the terms are sufficiently definite, and c) there was consideration. Preliminary negotiations do not alone constitute a contract. To ripen into a contract, there must be a manifestation of mutual asset to the terms of a bargain -- which was not the case here. An oral contract can be enforeable, but it must be established by clear and precise evidence - again not the case here.
Promissory estoppel
Plaintiffs' alleged detrimental reliance on defendant's promises about refinancing. Defendant said plaintiff had unclean hands because of misstatements about income. Inequitable conduct by plaintiff must be connect to the matters at issue, and the conduct has to be willful, not negligent. The court held that factual matters still had to be resolved about these issues and refused defendant's motion for summary judgment.
Statute of frauds defense
A mortgage is an interest in property and must satisfy the statute of frauds, as must an oral agreement to lend money in consideration for a mortgage. A party cannot avoid the statute by relying on an estoppel theory of recovery. However, the statute only makes an oral contract for an interest in real property unenforceable. It does not void the contract. Where the oral agreement has been obtained by fraud, the buyer can recover as damages the loss of his bargain. A plaintiff is permitted to pursue a promissory estoppel claim even when the underlying promise is subject to the statute of frauds, but his recovery is limited to reliance damages in the absence of fraud. The statute of frauds may prevent the specific performance of the promise, but it does not bar the promissory estoppel claim itself. The court held that the plaintiff had the right to pursue further discovery on this claim.
Fraud claim
Defendant again claimed that plaintiffs' overstatement of income barred this claim. The court rejected this because of defendant's lack of reliance on the statement of income, which was of "minimal importance to the loan approval." The court allowed the claim to proceed and permitted additional discovery by plaintiff.
http://www.paed.uscourts.gov/documents/opinions/07D0994P.pdf
Plaintiffs were solicited by defendant to refinance their mortgage. Based on a series of conversation and emails with defendant, plaintiffs withdrew their refinancing arrangement with another mortgage company. Defendant ultimately rejected plaintiff's application, allegedly because their income was somewhat less that stated orally during phone conversations. Plaintiffs sued for breach of contract, promissory estoppel and fraud.
Contract
The contract cause of action was dismissed, because plaintiffs failed to establish the existence of a legal contract. The documents that they produced were evidence of preliminary negotiations but not a contract. The documents did not contain the "essential terms of the contract." Under Pennsylvania law, a contract exists if a) the parties have manifested an intent to be found by the terms of the agreement, b) the terms are sufficiently definite, and c) there was consideration. Preliminary negotiations do not alone constitute a contract. To ripen into a contract, there must be a manifestation of mutual asset to the terms of a bargain -- which was not the case here. An oral contract can be enforeable, but it must be established by clear and precise evidence - again not the case here.
Promissory estoppel
Plaintiffs' alleged detrimental reliance on defendant's promises about refinancing. Defendant said plaintiff had unclean hands because of misstatements about income. Inequitable conduct by plaintiff must be connect to the matters at issue, and the conduct has to be willful, not negligent. The court held that factual matters still had to be resolved about these issues and refused defendant's motion for summary judgment.
Statute of frauds defense
A mortgage is an interest in property and must satisfy the statute of frauds, as must an oral agreement to lend money in consideration for a mortgage. A party cannot avoid the statute by relying on an estoppel theory of recovery. However, the statute only makes an oral contract for an interest in real property unenforceable. It does not void the contract. Where the oral agreement has been obtained by fraud, the buyer can recover as damages the loss of his bargain. A plaintiff is permitted to pursue a promissory estoppel claim even when the underlying promise is subject to the statute of frauds, but his recovery is limited to reliance damages in the absence of fraud. The statute of frauds may prevent the specific performance of the promise, but it does not bar the promissory estoppel claim itself. The court held that the plaintiff had the right to pursue further discovery on this claim.
Fraud claim
Defendant again claimed that plaintiffs' overstatement of income barred this claim. The court rejected this because of defendant's lack of reliance on the statement of income, which was of "minimal importance to the loan approval." The court allowed the claim to proceed and permitted additional discovery by plaintiff.
Thursday, August 30, 2007
disability - reversal v. remand - effect of substance abuse
Monagle v. Astrue - ED Pa. Augsut 24, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1021P.pdf
The court held that it was appropriate to reverse and award benefits rather than remand for a further hearing, citing Morales v. Apfel, 225 F.3d 210 (3d Cir. 2000) and Allen v. Bowen, 881 F.2d 37 (3d Cir. 1989). There were no remaining evidentiary issues, and the opinions of the treating physicians that claimant was disabled, independent of his drug addiction, should have been followed.
The case also involved the problem of separating out the effect of marijuana addiction from claimant's bipolar disorder. There is good language in the case about the weight which should be given to the treating physician on this issue.
http://www.paed.uscourts.gov/documents/opinions/07D1021P.pdf
The court held that it was appropriate to reverse and award benefits rather than remand for a further hearing, citing Morales v. Apfel, 225 F.3d 210 (3d Cir. 2000) and Allen v. Bowen, 881 F.2d 37 (3d Cir. 1989). There were no remaining evidentiary issues, and the opinions of the treating physicians that claimant was disabled, independent of his drug addiction, should have been followed.
The case also involved the problem of separating out the effect of marijuana addiction from claimant's bipolar disorder. There is good language in the case about the weight which should be given to the treating physician on this issue.
Tuesday, August 28, 2007
ejectment - jurisdiction - sheriff's sale - deed
Wells Fargo Bank v. Long - Superior Court - August 22, 2007
http://www.aopc.org/OpPosting/Superior/out/a14007_07.pdf
A purchaser of property at sheriff's sale cannot bring an ejectment action until the title to the property passes by acknowledgment, delivery and recordation of the sheriff's deed. Before that time, the purchaser does not have a present right to immediate possession, a jurisdictional prerequisite to an ejectment action. The successful bidder at a sheriff's sale only gets "an inceptive, inchoate, or equitable estate."
The hiatus between the sheriff's sale and the delivery and recording of the deed is a "jurisdictional void" which cannot be traversed. There is an extensive (and repetitious) discussion of these principles, in the opinion.
http://www.aopc.org/OpPosting/Superior/out/a14007_07.pdf
A purchaser of property at sheriff's sale cannot bring an ejectment action until the title to the property passes by acknowledgment, delivery and recordation of the sheriff's deed. Before that time, the purchaser does not have a present right to immediate possession, a jurisdictional prerequisite to an ejectment action. The successful bidder at a sheriff's sale only gets "an inceptive, inchoate, or equitable estate."
The hiatus between the sheriff's sale and the delivery and recording of the deed is a "jurisdictional void" which cannot be traversed. There is an extensive (and repetitious) discussion of these principles, in the opinion.
Monday, August 20, 2007
Fair Credit Reporting Act - complaint to credit reporting agency
Beisel v. ABN Ambro Mortgage Inc. - Ed Pa. - Aguust 10, 2007
http://www.paed.uscourts.gov/documents/opinions/07D0951P.pdf
A credit reporting agency [CRA] has a duty concerning disputed information in a credit report only after the complaining party has disputed the credit information with the CRA and the credit reporting agency has notified the furnisher of information.
In this case, the consumer-plaintiffs alleged only that they disputed it with the furnisher, not the CRA, before bring suit under the FCRA, 15 USC 1681 et seq. Jaramillo v. Experian, 155 F.Supp. 2d 356, 363 (E Pa. 2001).
http://www.paed.uscourts.gov/documents/opinions/07D0951P.pdf
A credit reporting agency [CRA] has a duty concerning disputed information in a credit report only after the complaining party has disputed the credit information with the CRA and the credit reporting agency has notified the furnisher of information.
In this case, the consumer-plaintiffs alleged only that they disputed it with the furnisher, not the CRA, before bring suit under the FCRA, 15 USC 1681 et seq. Jaramillo v. Experian, 155 F.Supp. 2d 356, 363 (E Pa. 2001).
Monday, August 13, 2007
bankruptcy - dismissal - bad faith - sec. 707(a)
In re Perlin - Third Circuit - August 3, 2007
http://www.ca3.uscourts.gov/opinarch/063199p.pdf
In adjudicating a motion to dismiss assserting bad faith under 11 USC 707(a), it is within the discretion of the bankruptcy court to consider a debtor's monthly income and expenses together with any other factors relevant to a debtor's good faith in filing for bankruptcy, reflecting the "fact-intensive nature of the good-faith inquiry."
Net worth, future prospects and ability to repay are not a valid cause for dismissal. Dismissal should be carefully confined to only truly egregious cases that entail concealed or misrepresented assets and/or sources of income, lavish lifestyles, and intention to avoid a large single debt based on conduct akin to fraud, misconduct or gross negligence.
http://www.ca3.uscourts.gov/opinarch/063199p.pdf
In adjudicating a motion to dismiss assserting bad faith under 11 USC 707(a), it is within the discretion of the bankruptcy court to consider a debtor's monthly income and expenses together with any other factors relevant to a debtor's good faith in filing for bankruptcy, reflecting the "fact-intensive nature of the good-faith inquiry."
Net worth, future prospects and ability to repay are not a valid cause for dismissal. Dismissal should be carefully confined to only truly egregious cases that entail concealed or misrepresented assets and/or sources of income, lavish lifestyles, and intention to avoid a large single debt based on conduct akin to fraud, misconduct or gross negligence.
Friday, August 10, 2007
welfare - MA- resources - disretionary support trust
DeBone v. DPW - Commonwealth Court - Masy 31, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/2138CD06_8-9-07.pdf
Held,discretionary support trust should be included as a resource in determining eligibility for MA benefits. Trust consisted of $145,000 and trustees could use the money for petitioner's benefit. Petitioner's resource held to exceed $2400 limit under 55 Pa. Code 178.1(a),178.2 and 178.4. Beneficiary's interest depends on settlor's intent. Rosenberg v. DPW, 679 A2d 767 (Pa. 1996).; Shaak v. DPW, 747 A2d 883, 886 (Pa. 2000). Court applied factors cited in those cases, especially that trustee had discretion to use the trust principal for the welfare etc of the beneficiary.
http://www.courts.state.pa.us/OpPosting/CWealth/out/2138CD06_8-9-07.pdf
Held,discretionary support trust should be included as a resource in determining eligibility for MA benefits. Trust consisted of $145,000 and trustees could use the money for petitioner's benefit. Petitioner's resource held to exceed $2400 limit under 55 Pa. Code 178.1(a),178.2 and 178.4. Beneficiary's interest depends on settlor's intent. Rosenberg v. DPW, 679 A2d 767 (Pa. 1996).; Shaak v. DPW, 747 A2d 883, 886 (Pa. 2000). Court applied factors cited in those cases, especially that trustee had discretion to use the trust principal for the welfare etc of the beneficiary.
Thursday, August 09, 2007
consumer - warranties - exclusion/modification - conflict between express and implied warranties
N.J. Transit Corp. v. Harsco Corp. - 3rd Circuit - August 2, 2007
http://www.ca3.uscourts.gov/opinarch/063507p.pdf
The court held that a sophisticated commercial buyer who had drafted the contract could not rely on UCC implied warranties of merchantability and fitness for a particular purpose under the N.J. equivalent of 13 Pa. C.S. sec. 2314 and 2315 when there was a one-year express contractual warranty that had expired at the time of the alleged loss.
The court took special note of the fact that this was "hardly the typical case" involving exclusion or modification of a warranty under sec. 2316. Here, the buyer drafted the contract, both parties were sophisticated business entities, and the parties had equal bargaining power. "It was the buyer who dictated all the contract's terms [and] whose bargaining power was superior." The buyer "specified precisely what it required" and the express warranty was "extremely broad," so "there was no implied warranty of fitness for a particular purpose."
Under sec. 2317(c), "express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose." Here the court interpreted the express warranty and implied warranty of merchantability as "consistent and cumulative... for the one year term of the express warranty. Beyond that period, the implied warranty of merchantability conflicts with the contract's specifications, and is therefore displaced by the express" one-year warranty, pursuant to sec. 2317 (c).
The court specifically stated and emphasized that it was not interpreting sec. 2316 (exclusion or modification of warranties) to allow all express warranties of limited duration to impliedly exclude or modify limited warranties. Instead, it based its holding on the fact that here the buyer-drafted global warranty was incorporated into the contract specifications, noting that the commentary to sec. 2316 recognized such a situation as "not the ordinary circumstance that the section is designed to address." The court said that its holding was in line with the general purpose of sec. 2316 "which, according to the commentary, is to ensure that there are no surprises concerning which warranties accompany the goods sold." The element of surprise is not present where the buyer drafts the contract. A different holding would turn "a buyer's shield against surprise into a buyer's sword of surprise."
http://www.ca3.uscourts.gov/opinarch/063507p.pdf
The court held that a sophisticated commercial buyer who had drafted the contract could not rely on UCC implied warranties of merchantability and fitness for a particular purpose under the N.J. equivalent of 13 Pa. C.S. sec. 2314 and 2315 when there was a one-year express contractual warranty that had expired at the time of the alleged loss.
The court took special note of the fact that this was "hardly the typical case" involving exclusion or modification of a warranty under sec. 2316. Here, the buyer drafted the contract, both parties were sophisticated business entities, and the parties had equal bargaining power. "It was the buyer who dictated all the contract's terms [and] whose bargaining power was superior." The buyer "specified precisely what it required" and the express warranty was "extremely broad," so "there was no implied warranty of fitness for a particular purpose."
Under sec. 2317(c), "express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose." Here the court interpreted the express warranty and implied warranty of merchantability as "consistent and cumulative... for the one year term of the express warranty. Beyond that period, the implied warranty of merchantability conflicts with the contract's specifications, and is therefore displaced by the express" one-year warranty, pursuant to sec. 2317 (c).
The court specifically stated and emphasized that it was not interpreting sec. 2316 (exclusion or modification of warranties) to allow all express warranties of limited duration to impliedly exclude or modify limited warranties. Instead, it based its holding on the fact that here the buyer-drafted global warranty was incorporated into the contract specifications, noting that the commentary to sec. 2316 recognized such a situation as "not the ordinary circumstance that the section is designed to address." The court said that its holding was in line with the general purpose of sec. 2316 "which, according to the commentary, is to ensure that there are no surprises concerning which warranties accompany the goods sold." The element of surprise is not present where the buyer drafts the contract. A different holding would turn "a buyer's shield against surprise into a buyer's sword of surprise."
bankruptcy - ch. 13 - post-foreclosure sale cure
In re Connors - 3rd Circuit - August 3, 2007
http://www.ca3.uscourts.gov/opinarch/063321p.pdf
Ending a dispute among N.J. district courts, the 3rd Circuit held that a Chapter 13 debtor does not have the right, under 11 USC 1322 (c) (1), to cure a default on a mortgage secured by the debtor's residence after the residence is sold at a foreclosure sale but before the deed is delivered.
The "unambiguous language of sec. 1322 (c) (1) supports the 'gavel rule.'" It says the a "default with respect to, or that gave rise to, a lien on the debtor's residence may be cured under paragraph (3) or (5) of subsection (b) until such residence is sold at a foreclosure sale that is conducted in accordance with applicable nonbankruptcy law…." The court said that numerous courts have held that a residence is "sold" at the foreclosure auction. The sale is final then, not when the deed is later delivered.
There is a provision, 11 USC 108(b), which allows a bankruptcy to be filed and a) objections to the sale to be filed or b) the property redeemed -- if the bankruptcy is filed before the expiration of a grace period established by a nonbankruptcy state law.
In this case, the debtor had the right to but did not exercise his statutory right to object to the foreclosure sale or redeem the property within 60 days of the filing of his chapter 13 petition, as permitted by N.J. state law and 11 USC 108(b).
http://www.ca3.uscourts.gov/opinarch/063321p.pdf
Ending a dispute among N.J. district courts, the 3rd Circuit held that a Chapter 13 debtor does not have the right, under 11 USC 1322 (c) (1), to cure a default on a mortgage secured by the debtor's residence after the residence is sold at a foreclosure sale but before the deed is delivered.
The "unambiguous language of sec. 1322 (c) (1) supports the 'gavel rule.'" It says the a "default with respect to, or that gave rise to, a lien on the debtor's residence may be cured under paragraph (3) or (5) of subsection (b) until such residence is sold at a foreclosure sale that is conducted in accordance with applicable nonbankruptcy law…." The court said that numerous courts have held that a residence is "sold" at the foreclosure auction. The sale is final then, not when the deed is later delivered.
There is a provision, 11 USC 108(b), which allows a bankruptcy to be filed and a) objections to the sale to be filed or b) the property redeemed -- if the bankruptcy is filed before the expiration of a grace period established by a nonbankruptcy state law.
In this case, the debtor had the right to but did not exercise his statutory right to object to the foreclosure sale or redeem the property within 60 days of the filing of his chapter 13 petition, as permitted by N.J. state law and 11 USC 108(b).
Wednesday, August 08, 2007
consumer/housing - rental housing - discrimination - ECOA and CPL
Portis v. River House Associates - MD Pa. - August 2, 2007
http://www.pamd.uscourts.gov/opinions/jones/06v2123.pdf
African-American plaintiffs were turned down for rental housing by Defendant, allegedly based on lack of credit history. They subsequently got rental housing from another landlord, who used same credit agency as Defendant allegedly used. Eventual landlord got a credit history, which was readily available. Plaintiffs sued under a) the Fair Housing Act, 42 USC 3601 et seq.; b) 42 USC 1981; c) 42 USC 1982; d) the Equal Credit Opportunity Act (ECOA), 15 USC 1691 et seq.; and e) the Pennsylvania Consumer Protection Law, 73 PS 201-1 et seq. Defendant moved to dismiss the last two claims -- EDOA and Consumer Protection Law. The court agreed.
Equal Credit Opportunity Act - Citing Laramore v. Ritchie Realty, 397 F3d 544 (7th Cir. 2005), the ECOA claim was dismissed because
- it did not involve the extension of "credit," i.e. the right to defer the payment of a debt
- the ECOA was meant to protect against discrimination by financial institutions, not landlords
- a Federal Reserve regulation stating that the granting of a lease is not an extension of credit
- the ECOA interests could be protected in the FHA claim, which Defendant did not move to dismiss.
Pennsylvania Consumer Protection Law
The court dismissed this claim, because the Plainiffs and Defendant never entered into a contract. Defendant rejected Plaintiff as a tenant. Plaintiffs found a new place to live. Plaintiffs did not purchase goods or services from Defendant. Calling this a case of first impression, the court held that the CPL does not permit suit by a person who leased property from one entity to bring suit against another entity from the which person initially attempted to lease property. The court noted that the CPL allows the Attorney General or county DA to bring suit, implicitly recognizing that there may be circumstances in which private actors are not permitted to bring suit but public officials can. The court also noted that while direct privity is not required under the CPL, the statute "does not stand for the proposition that a CPL claim can stand against a wholly unrelated party or one who is foreign to the purchase or lease transaction." In that sense, the CPL has a "causation requirement."
http://www.pamd.uscourts.gov/opinions/jones/06v2123.pdf
African-American plaintiffs were turned down for rental housing by Defendant, allegedly based on lack of credit history. They subsequently got rental housing from another landlord, who used same credit agency as Defendant allegedly used. Eventual landlord got a credit history, which was readily available. Plaintiffs sued under a) the Fair Housing Act, 42 USC 3601 et seq.; b) 42 USC 1981; c) 42 USC 1982; d) the Equal Credit Opportunity Act (ECOA), 15 USC 1691 et seq.; and e) the Pennsylvania Consumer Protection Law, 73 PS 201-1 et seq. Defendant moved to dismiss the last two claims -- EDOA and Consumer Protection Law. The court agreed.
Equal Credit Opportunity Act - Citing Laramore v. Ritchie Realty, 397 F3d 544 (7th Cir. 2005), the ECOA claim was dismissed because
- it did not involve the extension of "credit," i.e. the right to defer the payment of a debt
- the ECOA was meant to protect against discrimination by financial institutions, not landlords
- a Federal Reserve regulation stating that the granting of a lease is not an extension of credit
- the ECOA interests could be protected in the FHA claim, which Defendant did not move to dismiss.
Pennsylvania Consumer Protection Law
The court dismissed this claim, because the Plainiffs and Defendant never entered into a contract. Defendant rejected Plaintiff as a tenant. Plaintiffs found a new place to live. Plaintiffs did not purchase goods or services from Defendant. Calling this a case of first impression, the court held that the CPL does not permit suit by a person who leased property from one entity to bring suit against another entity from the which person initially attempted to lease property. The court noted that the CPL allows the Attorney General or county DA to bring suit, implicitly recognizing that there may be circumstances in which private actors are not permitted to bring suit but public officials can. The court also noted that while direct privity is not required under the CPL, the statute "does not stand for the proposition that a CPL claim can stand against a wholly unrelated party or one who is foreign to the purchase or lease transaction." In that sense, the CPL has a "causation requirement."
Monday, August 06, 2007
judges - deliberative thought processes - discovery
Leber v. Stretton - Superior Court - June 8, 2007
http://www.aopc.org/OpPosting/Superior/out/A16018_07.pdf
Deliberative thought processes of a judicial officer (including MDJs and presumably ALJs, referees, etc.) are not discoverable.
http://www.aopc.org/OpPosting/Superior/out/A16018_07.pdf
Deliberative thought processes of a judicial officer (including MDJs and presumably ALJs, referees, etc.) are not discoverable.
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