Schwartz v. Rockey - Pennsylvania Supreme Court - October 17, 2007
majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf
Stating that it was "best to adhere as closely as possible to the plain language of the statute, which on "on its plan terms, does not provide any standard pursuant to which a trial court may award treble damages," the state supreme court held that the discretion of a trial court to award treble damages under sec. 9.2 of the state Consumer Protection Law, 73 P.S. sec. 201-9.2, "should not be closely constrained by the common-law requirement associated with the award of punitive damages" i.e., "outrageous and egregious conduct," which might include an "evil motive" or "reckless indifference to the rights of others."
The Court said that question was a "very close one." It contrasted this decision with that in Johnson v. Hyundai Motor America, 698 A.2d 631 (Pa. Super. 1997), where the court mentioned a "heightened standard for assessing the availability of treble damages" and said that courts should be guided by punitive damages cases.
The statute mentions only the trial court's "discretion," which the court said "is not limitless, as we believe that awards of treble damages may be reviewed by appellate courts for rationality, akin to appellate review of the discretionary aspect of equitable awards...." Trial courts "should focus on the presence or absence of intentional or reckless, wrongful conduct, as to which an award of treble damages would be consistent with, and in furtherance of, the remedial purposes of the" Consumer Protection Law."
The chief justice dissented on this issue, stating that "the case law regarding the nature of punitive damages is well reasoned and evidences the common-law principle applied on Pennsylvania. The plain language of the statute does not expressly alter this principle. Thus, absent such express direction from the Legislature to the contrary, I believe that the UTPCPL was intended to preserve the requirement that an award of treble damages be predicated upon a punitive damage analysis."
Monday, October 29, 2007
Wednesday, October 24, 2007
real property - title insurance
Rood v. Commonwealth Land Title Insurance Company - Superior Court - October 18, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a24045_07.pdf
Title insurance policy held not to cover claim for defective on-site sewage system. The purpose of title insurance is to protect from loss arising from defects in the title which the buyer acquires. Such a contract is construed strictly in favor of the buyer. The court rejected coverage for the defective sewer system, in spite of the argument that the title was rendered unmarketable by this defect, whose disclosure might cause a reduction in price. The court looked to decisions from other states in reaching its decision, in which it found a "dearth of authorities dealing with this precise question." Ultimately, the court rejected the argument that sought to equate an abandoned septic tank with a "defect, lien or encumbrance affecting title to the property." It held that plaintiff's argument confused economic lack of marketability with title marketability. Summary judgment was properly granted to the defendant.
http://www.courts.state.pa.us/OpPosting/Superior/out/a24045_07.pdf
Title insurance policy held not to cover claim for defective on-site sewage system. The purpose of title insurance is to protect from loss arising from defects in the title which the buyer acquires. Such a contract is construed strictly in favor of the buyer. The court rejected coverage for the defective sewer system, in spite of the argument that the title was rendered unmarketable by this defect, whose disclosure might cause a reduction in price. The court looked to decisions from other states in reaching its decision, in which it found a "dearth of authorities dealing with this precise question." Ultimately, the court rejected the argument that sought to equate an abandoned septic tank with a "defect, lien or encumbrance affecting title to the property." It held that plaintiff's argument confused economic lack of marketability with title marketability. Summary judgment was properly granted to the defendant.
corporations - piercing the corporate veil
Fletcher-Harlee Corp. v. Szymanski and David Concrete Corp. - Superior Court - October 15, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a20038_07.pdf
It was appropriate to pierce defendant's corporate veil where defendant was the sole shareholder, director, and officer of several inter-related corporations. Citing Lumax Industries v. Aultman, 669 A2d 893 (Pa. 1995), the court reviewed the factors it considers in such cases, including whther
- the corporation is undercapitalized
- corporate formalities were followed
- relevant records were kept
- there was intermingling of personal and corporate funds
The court noted that there is no clear and well-settled rule about this doctrine in Pennsylvania. It relied heavily on Lumax and The Village at Camelback v. Carr, 538 A.2d 528 (Pa. Super. 1988), in which it held, inter alia, that a plaintiff does not have to show fraud in order for the doctrine to apply.
http://www.courts.state.pa.us/OpPosting/Superior/out/a20038_07.pdf
It was appropriate to pierce defendant's corporate veil where defendant was the sole shareholder, director, and officer of several inter-related corporations. Citing Lumax Industries v. Aultman, 669 A2d 893 (Pa. 1995), the court reviewed the factors it considers in such cases, including whther
- the corporation is undercapitalized
- corporate formalities were followed
- relevant records were kept
- there was intermingling of personal and corporate funds
The court noted that there is no clear and well-settled rule about this doctrine in Pennsylvania. It relied heavily on Lumax and The Village at Camelback v. Carr, 538 A.2d 528 (Pa. Super. 1988), in which it held, inter alia, that a plaintiff does not have to show fraud in order for the doctrine to apply.
Tuesday, October 16, 2007
insurance - bad faith statute, 43 Pa. C.S. 8371 - statute of limitations - common law duty of good faith/fair dealing
Ash v. Continental Insurance Company - Pennsylvania Supreme Court - October 11, 2007
http://www.aopc.org/OpPosting/Supreme/out/J-7-2006mo.pdf
State bad-faith insurance statute, 42 Pa. C.S. 8371, held to resemble tort more than contract and thus come under the two year statute of limitations in 42 Pa. C.S. 5524.
The court rejected plaintiff's argument that because a bad-faith claim involves both tort and contract concepts, like a consumer-protection claim, Gabriel v. O'Hara, 534 A.2d 488 (Pa. Super. 1987), it should come under the catch-all six-year statute of limitations.
The opinion contains an extended discussion of the duty of good faith and fair dealing, which is most often associated with contract claims. The court held that an action for violation of the statutory duty in sec. 8371 is "distinct from the common law cause of action for breach of the contractual duty of good faith" and distinguished the contract cases involving that duty.
The court said that "Pennsylvania courts have held that the key difference between tort actions and contract actions is this: ' [t]ort actions lie for breaches imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals....With this distinction in mind, we note the legislature apparently determined the protections afforded by the Unfair Insurance Practices Act [40 P.S. 1171.1 et seq.] were insufficient to curtail bad faith acts by insurers and that it was in the public interest to enact sec. 8371 as an additional protection....Therefore, the duty under sec. 8371 is one imposed by law as a matter of social policy rather than one imposed by mutual consensus, and an action to recover damages for a breach of that duty derives primarily from the law of torts."
http://www.aopc.org/OpPosting/Supreme/out/J-7-2006mo.pdf
State bad-faith insurance statute, 42 Pa. C.S. 8371, held to resemble tort more than contract and thus come under the two year statute of limitations in 42 Pa. C.S. 5524.
The court rejected plaintiff's argument that because a bad-faith claim involves both tort and contract concepts, like a consumer-protection claim, Gabriel v. O'Hara, 534 A.2d 488 (Pa. Super. 1987), it should come under the catch-all six-year statute of limitations.
The opinion contains an extended discussion of the duty of good faith and fair dealing, which is most often associated with contract claims. The court held that an action for violation of the statutory duty in sec. 8371 is "distinct from the common law cause of action for breach of the contractual duty of good faith" and distinguished the contract cases involving that duty.
The court said that "Pennsylvania courts have held that the key difference between tort actions and contract actions is this: ' [t]ort actions lie for breaches imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals....With this distinction in mind, we note the legislature apparently determined the protections afforded by the Unfair Insurance Practices Act [40 P.S. 1171.1 et seq.] were insufficient to curtail bad faith acts by insurers and that it was in the public interest to enact sec. 8371 as an additional protection....Therefore, the duty under sec. 8371 is one imposed by law as a matter of social policy rather than one imposed by mutual consensus, and an action to recover damages for a breach of that duty derives primarily from the law of torts."
Friday, October 12, 2007
settlement agreements - enforcement
Thomas v. University of Pennsylvania - ED Pa. - October 2, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1204P.pdf
Held, the parties entered into a binding settlement agreement of plaintiff's race discrimination case.
At a settlement conference, the parties agreed that defendant would pay plaintiff, a former employee, a certain amount. The court then dismissed the case. However, a dispute arose when the defendant added a no-rehire provision to the final written settlement agreement. Plaintiff objected to this provision and asked the court to vacate its dismissal of the case. Defendant eventually agreed to withdraw the offending provision. "The issue is whether the University's agreement to delete the language that [plaintiff' found unacceptable constituted an acceptance of an offer to settle the case" --a position advanced by the university, which sought enforcement of the agreement.
Settlement agreement are governed by ordinary principles of contract law, including the need for a meeting of the minds on all terms. An agreement to settle a lawsuit, voluntarily entered into, is binding on the parties, whether or not made in the present of the court, and even in the absence of a writing. Such an agreement is binding even where one party had a change of heart between the time s/he agreed to the terms of the settlement and when those terms were reduced to writing.
When plaintiff told the court that she would accept a certain financial settlement provided that there was no bar to her being rehired, she made a definite and specific offer to settle. When the University accepted, plaintiff became bound by the terms of her offer. Once the offer was accepted, the case was settled. A settlement is at bottom a contract, and it is basic contract law that an offer cannot be withdrawn after it has been accepted.
http://www.paed.uscourts.gov/documents/opinions/07D1204P.pdf
Held, the parties entered into a binding settlement agreement of plaintiff's race discrimination case.
At a settlement conference, the parties agreed that defendant would pay plaintiff, a former employee, a certain amount. The court then dismissed the case. However, a dispute arose when the defendant added a no-rehire provision to the final written settlement agreement. Plaintiff objected to this provision and asked the court to vacate its dismissal of the case. Defendant eventually agreed to withdraw the offending provision. "The issue is whether the University's agreement to delete the language that [plaintiff' found unacceptable constituted an acceptance of an offer to settle the case" --a position advanced by the university, which sought enforcement of the agreement.
Settlement agreement are governed by ordinary principles of contract law, including the need for a meeting of the minds on all terms. An agreement to settle a lawsuit, voluntarily entered into, is binding on the parties, whether or not made in the present of the court, and even in the absence of a writing. Such an agreement is binding even where one party had a change of heart between the time s/he agreed to the terms of the settlement and when those terms were reduced to writing.
When plaintiff told the court that she would accept a certain financial settlement provided that there was no bar to her being rehired, she made a definite and specific offer to settle. When the University accepted, plaintiff became bound by the terms of her offer. Once the offer was accepted, the case was settled. A settlement is at bottom a contract, and it is basic contract law that an offer cannot be withdrawn after it has been accepted.
contracts - sales - venue - approval/acceptance of credit
84 Lumber Co. v. Fish Hatchery, L.P. et al. - Superior Court - Ocftober 1, 2007
http://www.aopc.org/OpPosting/Superior/out/a23003_07.pdf
Plaintiff-appellant is a building supplier who sued defendants-appellees for breach of contract, alleging non-payment for lumber and building materials purchased at plaintiff's retail location in Northampton County. Plaintiff sued in Washington County, the location of its corporate headquarters and the place where defendants' credit application was approved. Defendants were located in Lehigh County, as was the residential construction project for which the materials were purchased.
Defendants filed preliminary objections alleging improper venue, and the lower court transferred the case to Northampton County, which was a) the location of the lumber yard where defendants bought the materials, b) the location where defendants applied for credit, and c) the location where defendants made payments to plaintiff.
Noting that trial courts have "considerable discretion" in change-of-venue cases, the appellate court interpreted Rule 1006 (venue for civil actions generally) and Rule 2130 (venue where partnerships are parties), and sustained the change of venue to the Northampton County, where it held that the "transaction" had taken place and "not merely some part of the transaction...." The court said that the civil rules do not permit a lawsuit to be instituted in any country where some facet of a complex transaction -- such as the approval of the buyer's credit application -- has occurred.
The court said that there was no "substantial relationship" between Washington County and the parties' dispute which would justify venue there. It was at the retail location in Northampton County "where the offer to purchase goods was accepted by Appellant in its delivery of such good for payment." [sic] The court rejected the contention that approval of credit amounted to the actual acceptance of the contract, since there was no suggestion that the approval was necessary to form the contract.
http://www.aopc.org/OpPosting/Superior/out/a23003_07.pdf
Plaintiff-appellant is a building supplier who sued defendants-appellees for breach of contract, alleging non-payment for lumber and building materials purchased at plaintiff's retail location in Northampton County. Plaintiff sued in Washington County, the location of its corporate headquarters and the place where defendants' credit application was approved. Defendants were located in Lehigh County, as was the residential construction project for which the materials were purchased.
Defendants filed preliminary objections alleging improper venue, and the lower court transferred the case to Northampton County, which was a) the location of the lumber yard where defendants bought the materials, b) the location where defendants applied for credit, and c) the location where defendants made payments to plaintiff.
Noting that trial courts have "considerable discretion" in change-of-venue cases, the appellate court interpreted Rule 1006 (venue for civil actions generally) and Rule 2130 (venue where partnerships are parties), and sustained the change of venue to the Northampton County, where it held that the "transaction" had taken place and "not merely some part of the transaction...." The court said that the civil rules do not permit a lawsuit to be instituted in any country where some facet of a complex transaction -- such as the approval of the buyer's credit application -- has occurred.
The court said that there was no "substantial relationship" between Washington County and the parties' dispute which would justify venue there. It was at the retail location in Northampton County "where the offer to purchase goods was accepted by Appellant in its delivery of such good for payment." [sic] The court rejected the contention that approval of credit amounted to the actual acceptance of the contract, since there was no suggestion that the approval was necessary to form the contract.
Tuesday, October 09, 2007
declaratory judgment - ripeness - challenge to admin. regulations
Township of Derry v. Dept. of Labor and Industry - Pa. Supreme Court - September 26, 2007
http://www.aopc.org/OpPosting/Supreme/out/J-116-2007mo.pdf
Request for declaratory relief challenging DLI regulations concerning the definition of "state-owned building" was held to be ripe, overruling the Commonwealth Court's sua sponte dismissal on ripeness grounds.
The Supreme Court held that
- the issues were adequately developed
- the parties would suffer hardship if review were delayed
- there was an actual and ongoing controversy
- the issues were concrete and adequately developed for judicial review
The Court also noted that evidence in an administrative enforcement proceeding would be different from the evidence relevant to the plaintiff's challenge. "The enforcement process has not been accepted as a substitute for declaratory judgment review in...circumstances involving substantial challenges to state administrative regulations....[I]ndeed, the concept of pre-enforcement review has expressly been approved."
http://www.aopc.org/OpPosting/Supreme/out/J-116-2007mo.pdf
Request for declaratory relief challenging DLI regulations concerning the definition of "state-owned building" was held to be ripe, overruling the Commonwealth Court's sua sponte dismissal on ripeness grounds.
The Supreme Court held that
- the issues were adequately developed
- the parties would suffer hardship if review were delayed
- there was an actual and ongoing controversy
- the issues were concrete and adequately developed for judicial review
The Court also noted that evidence in an administrative enforcement proceeding would be different from the evidence relevant to the plaintiff's challenge. "The enforcement process has not been accepted as a substitute for declaratory judgment review in...circumstances involving substantial challenges to state administrative regulations....[I]ndeed, the concept of pre-enforcement review has expressly been approved."
Friday, October 05, 2007
UC - willful misconduct - single standard
Dept. of Corrections v. UCBR - Pa. Supreme Court - October 4, 2007
http://www.aopc.org/OpPosting/Supreme/out/272MAL2007sd.pdf
The court reversed a Commonwealth Court decision denying benefits to a prison guard who did not report rumors of a planned attack on an inmate and did not not intervene when he heard the inmate being beaten, because of the officer's fear of reprisals and fear for his own safety. The lower court said that such fears did not constitute good cause for his actions. The court said that its conscience was shocked by the Board's conclusion "that a corrections officer who refuses to report a threat of violence against an inmate and refuses to render aid to an inmate being beaten could use fear for his own personal safety as good cause justification for his refusal to render aid....We can do nothing but express our outrage" that the DOC's Office of Professional Responsibility was aware of and condoned claimant's conduct and that of others in his situation.
The Supreme Court reversed and remanded for reconsideration in light of its decisions in Navickas v. UCBR, 787 A.2d 284 (Pa. 2001) and Grieb v. UCBR, 827 A.2d 422 (Pa. 2003), holding that the UC Act "sets for a single governing standard of willful misconduct and rejecting the idea that a higher standard may apply based upon the type or nature of the employment involved."
The Commonwealth Court decision is reported at 919 A/2d 316 (Pa. Cmwlth. 2007) http://www.courts.state.pa.us/OpPosting/CWealth/out/1205CD06_2-28-07.pdf. The lower court cited it decision in Williams v. UCBR, 648 A.2d 1321 (Pa. Cmwlth. 1994), the court noted its prior holdings that a "corrections officer, like law enforcement officials, occupy positions of great responsibility and trust, and thus, must adhere to demanding standards, which are higher than those applied to many other professions."
A concurring opinion in the lower court noted that the statement was in direct conflict with the Supreme Court's decision in Navickas v. UCBR, 778 A.2d 284, 290-1 (Pa. 2001), where the court rejected a higher standard of care for a health care worker, stating that that is a "question...of policy...not posed by the Unemployment Compensation Law we are called upon to construe. The Act sets for a single governing standard of willful misconduct, one that does not draw distinctions based upon the type or nature of the employee involved."
http://www.aopc.org/OpPosting/Supreme/out/272MAL2007sd.pdf
The court reversed a Commonwealth Court decision denying benefits to a prison guard who did not report rumors of a planned attack on an inmate and did not not intervene when he heard the inmate being beaten, because of the officer's fear of reprisals and fear for his own safety. The lower court said that such fears did not constitute good cause for his actions. The court said that its conscience was shocked by the Board's conclusion "that a corrections officer who refuses to report a threat of violence against an inmate and refuses to render aid to an inmate being beaten could use fear for his own personal safety as good cause justification for his refusal to render aid....We can do nothing but express our outrage" that the DOC's Office of Professional Responsibility was aware of and condoned claimant's conduct and that of others in his situation.
The Supreme Court reversed and remanded for reconsideration in light of its decisions in Navickas v. UCBR, 787 A.2d 284 (Pa. 2001) and Grieb v. UCBR, 827 A.2d 422 (Pa. 2003), holding that the UC Act "sets for a single governing standard of willful misconduct and rejecting the idea that a higher standard may apply based upon the type or nature of the employment involved."
The Commonwealth Court decision is reported at 919 A/2d 316 (Pa. Cmwlth. 2007) http://www.courts.state.pa.us/OpPosting/CWealth/out/1205CD06_2-28-07.pdf. The lower court cited it decision in Williams v. UCBR, 648 A.2d 1321 (Pa. Cmwlth. 1994), the court noted its prior holdings that a "corrections officer, like law enforcement officials, occupy positions of great responsibility and trust, and thus, must adhere to demanding standards, which are higher than those applied to many other professions."
A concurring opinion in the lower court noted that the statement was in direct conflict with the Supreme Court's decision in Navickas v. UCBR, 778 A.2d 284, 290-1 (Pa. 2001), where the court rejected a higher standard of care for a health care worker, stating that that is a "question...of policy...not posed by the Unemployment Compensation Law we are called upon to construe. The Act sets for a single governing standard of willful misconduct, one that does not draw distinctions based upon the type or nature of the employee involved."
Thursday, October 04, 2007
IFP - denial - frivolous action
Bailey v. Wakefield - Commonwealth Court - October 4, 2007
http://www.aopc.org/OpPosting/CWealth/out/1084CD07_10-4-07.pdf
Three prisoners sought a writ of mandamus against officers of a state correctional institution in the county court where the SCI is located. The trial court denied the plaintiffs' IFP petition on the grounds that the action was frivilous, pursuant to Pa. R.C.P. 240(j) http://www.pacode.com/secure/data/231/chapter200/s240.html.
A "frivolous" action is one that lacks an arguable basis either in law or in fact. A complaint is frivolous if it does not set forth a valud cause of action. The plaintiffs' complaint did allege a valid cause of action, claiming violations of state and federal constitutions and prison regulations and policies.
However, the complaint is still frivolous because the form of action - mandamus - cannot address the constitutional rights that they pleaded. Mandamus is only appropriate where the right to be enforced is very clear. Here, the defendants had a lot of discretion, because of the need for orderly administration of the prison. Mandamus is not maintainable in the circumstances.
"Because there is no way that [plaintiffs] can be successful, the trial court properly denied the petition to proceed in forma pauperis and dismissed the action seeking a writ of mandamus as frivolous."
http://www.aopc.org/OpPosting/CWealth/out/1084CD07_10-4-07.pdf
Three prisoners sought a writ of mandamus against officers of a state correctional institution in the county court where the SCI is located. The trial court denied the plaintiffs' IFP petition on the grounds that the action was frivilous, pursuant to Pa. R.C.P. 240(j) http://www.pacode.com/secure/data/231/chapter200/s240.html.
A "frivolous" action is one that lacks an arguable basis either in law or in fact. A complaint is frivolous if it does not set forth a valud cause of action. The plaintiffs' complaint did allege a valid cause of action, claiming violations of state and federal constitutions and prison regulations and policies.
However, the complaint is still frivolous because the form of action - mandamus - cannot address the constitutional rights that they pleaded. Mandamus is only appropriate where the right to be enforced is very clear. Here, the defendants had a lot of discretion, because of the need for orderly administration of the prison. Mandamus is not maintainable in the circumstances.
"Because there is no way that [plaintiffs] can be successful, the trial court properly denied the petition to proceed in forma pauperis and dismissed the action seeking a writ of mandamus as frivolous."
Wednesday, October 03, 2007
bankruptcy - conversion - bad faith
In re Piccoli - ED Pa. - September 27, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1167P.pdf
Denial of bankrupt's motion to convert Ch. 7 to Ch. 13 case upheld by district court, because of finding that the bankrupt was acting in bad faith, based largely on pre-petition conduct.
Bankrupt (B) transferred her interest in her home to her daughter and son-in-law only 16 months before filing, for no consideration. She also understated the value of her home and misrepresented the value of her unsecured claims. The court applied the factors in the case of In re Pakuris, 262 B.R. (Bankr. ED Pa. 2001) and In re Lilley, 91 F.3d 491 (3d Cir., 1996).
The court found that, under a fact-intensive inquiry --
- B's motion for conversion was to avoid fair payment to creditors
- conversion would be waste of judicial resources, since there would probably be re-conversion to Ch. 7
- home equity would give more to creditors in Ch. 7 than Ch. 13 case
- there is no absolute right to convert Ch. 7 to Ch. 13 - Marrama v. Citizens Bank - 127 S.Ct. 1105 (2007)
- B's conduct was "atypical" and not consistent with that of an honest and forthright but unfortunate debtor
- the timing in her case was "suspicious"
- B showed a lack of candor
http://www.paed.uscourts.gov/documents/opinions/07D1167P.pdf
Denial of bankrupt's motion to convert Ch. 7 to Ch. 13 case upheld by district court, because of finding that the bankrupt was acting in bad faith, based largely on pre-petition conduct.
Bankrupt (B) transferred her interest in her home to her daughter and son-in-law only 16 months before filing, for no consideration. She also understated the value of her home and misrepresented the value of her unsecured claims. The court applied the factors in the case of In re Pakuris, 262 B.R. (Bankr. ED Pa. 2001) and In re Lilley, 91 F.3d 491 (3d Cir., 1996).
The court found that, under a fact-intensive inquiry --
- B's motion for conversion was to avoid fair payment to creditors
- conversion would be waste of judicial resources, since there would probably be re-conversion to Ch. 7
- home equity would give more to creditors in Ch. 7 than Ch. 13 case
- there is no absolute right to convert Ch. 7 to Ch. 13 - Marrama v. Citizens Bank - 127 S.Ct. 1105 (2007)
- B's conduct was "atypical" and not consistent with that of an honest and forthright but unfortunate debtor
- the timing in her case was "suspicious"
- B showed a lack of candor
Monday, October 01, 2007
discovery - pre-complaint discovery - new state court rules
order http://www.aopc.org/OpPosting/Supreme/out/483civ.5.pdf
rule http://www.aopc.org/OpPosting/Supreme/out/483civ.5attch.pdf
There are a number of new, related state court rules about pre-complaint discovery, but the primary one is Rule 4003.8:
"A plaintiff may obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party."
rule http://www.aopc.org/OpPosting/Supreme/out/483civ.5attch.pdf
There are a number of new, related state court rules about pre-complaint discovery, but the primary one is Rule 4003.8:
"A plaintiff may obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party."
Friday, September 28, 2007
Fair Credit Reporting Act - private cause of action eliminated
Meyers v. Freedom Credit Union - ED Pa. - September 21, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1139P.pdf
There is no longer a private cause of action for the failure of a prospective creditor/lender to give a loan applicant who was denied credit the name, address and toll-free number of the credit reporting agency (CRA) whose report formed the basis, at least in part, of the denial of credit, as required by 15 USC sec. 1681m(a)(2)(A).
It is "beyond dispute" that there had been a private cause of action uner 15 USC secs. 1681n and 1681o for such failure -- until the enactment of a provision of the Fair and Accurate Credit Transaction Act (FACTA), P.L. 108-159, which amended the FCRA by, inter alia, eliminating a private cause of action for the conduct of which plaintiff complains. Under FACTA, such violations can now be enforced only by the relevant federal agencies and officials.
The court reached this conclusion by recognizing the "primacy of text and structure in statutory interpretation" and the decisions of "almost all" of the courts that have examined the issue, even while noting that the result was contrary to the structure, history and purpose of FACTA.
Somewhat ironically, however, the plaintiff in this case was able to recover, because her cause of action accrued before FACTA took effect.
http://www.paed.uscourts.gov/documents/opinions/07D1139P.pdf
There is no longer a private cause of action for the failure of a prospective creditor/lender to give a loan applicant who was denied credit the name, address and toll-free number of the credit reporting agency (CRA) whose report formed the basis, at least in part, of the denial of credit, as required by 15 USC sec. 1681m(a)(2)(A).
It is "beyond dispute" that there had been a private cause of action uner 15 USC secs. 1681n and 1681o for such failure -- until the enactment of a provision of the Fair and Accurate Credit Transaction Act (FACTA), P.L. 108-159, which amended the FCRA by, inter alia, eliminating a private cause of action for the conduct of which plaintiff complains. Under FACTA, such violations can now be enforced only by the relevant federal agencies and officials.
The court reached this conclusion by recognizing the "primacy of text and structure in statutory interpretation" and the decisions of "almost all" of the courts that have examined the issue, even while noting that the result was contrary to the structure, history and purpose of FACTA.
Somewhat ironically, however, the plaintiff in this case was able to recover, because her cause of action accrued before FACTA took effect.
Fair Housing Act - attorney fees
Snyder v. Bazargani et al. - ED Pa. - September 25, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1146P.pdf
Plaintiffs awarded attorney fees under the Fair Housing Act, 42 USC 3613(c)(2), against defendant-landlords who "inquired about plaintiffs' religious affiliation and thereafter....refused to rent plaintiffs the property." Given that plaintiffs prevailed at trial, the court had "very little discretion to deny an award of counsel fees." The court's discretion to deny fees is "tightly cabined."
http://www.paed.uscourts.gov/documents/opinions/07D1146P.pdf
Plaintiffs awarded attorney fees under the Fair Housing Act, 42 USC 3613(c)(2), against defendant-landlords who "inquired about plaintiffs' religious affiliation and thereafter....refused to rent plaintiffs the property." Given that plaintiffs prevailed at trial, the court had "very little discretion to deny an award of counsel fees." The court's discretion to deny fees is "tightly cabined."
contracts - damages - duty to mitigate - burden of proof
Wilmington Finance Co. v. Matrix Financial Services - ED Pa. - September 26, 2007
http://www.paed.uscourts.gov/documents/opinions/07D1159P.pdf
"In Pennsylvania, a plaintiff in a breach-of-contract action has a duty to take reasonable steps to mitigate its damages. Delliponti v. DeAngelis, 681 A.2d 1261, 1264 (Pa. 1996). Defendant bears the burden of proving plaintiff’s alleged failure to mitigate. Id. To meet that burden, defendant must “show how further loss could have been avoided through the reasonable efforts of the injured party.” Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1209 (Pa. Super. Ct. 1993)." It was thus "essential" that the defendant show that the plaintiff "could have taken reasonable steps...and that taking those steps would have prevented at least some of [plaintiff's] loss."
http://www.paed.uscourts.gov/documents/opinions/07D1159P.pdf
"In Pennsylvania, a plaintiff in a breach-of-contract action has a duty to take reasonable steps to mitigate its damages. Delliponti v. DeAngelis, 681 A.2d 1261, 1264 (Pa. 1996). Defendant bears the burden of proving plaintiff’s alleged failure to mitigate. Id. To meet that burden, defendant must “show how further loss could have been avoided through the reasonable efforts of the injured party.” Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1209 (Pa. Super. Ct. 1993)." It was thus "essential" that the defendant show that the plaintiff "could have taken reasonable steps...and that taking those steps would have prevented at least some of [plaintiff's] loss."
Protection from Abuse - family/household members - siblings - business partners
Custer v. Cochran - Superior Court - September 25, 2007
http://www.aopc.org/OpPosting/Superior/out/E01002_07.pdf
Siblings who do not live together and whose only relationship is a business one come within the plain words of the definition of "family or household members," 23 Pa. C.S. 6102, since they are clearly related by consanguinity or affinity, overruling Olivieri v. Olivieri, 678 A.2d 393 (Pa. Super. 1996), to the extent that it limited application of the PFA Act to people who live in the same household.
The court also held that there was adequate proof of abuse and noted the ages, height and weight of the parties, and that plaintiff -- whose testimony the court found credible -- experienced fear and pain in her arm for several days as a result of defendant's actions.
Judge Ford Elliot concurred reluctantly, noting that the "clear legislative purpose and objective of the Act is frustrated by applying its protection to a dispute between business partners concerning purely business matters." The judge noted that the legislature's removal of the same-household requirement "simply enlarged the group of victims who have standing to seek relief under the Act so long as the abuse they suffer is the result of an intimate, sexual, or familial relationship they share or have shared with the abuser." The current litigants have no relationship that exists in any "domestic sphere." Nonetheless, the judge concurred, finding the majority view "legally sustainable."
http://www.aopc.org/OpPosting/Superior/out/E01002_07.pdf
Siblings who do not live together and whose only relationship is a business one come within the plain words of the definition of "family or household members," 23 Pa. C.S. 6102, since they are clearly related by consanguinity or affinity, overruling Olivieri v. Olivieri, 678 A.2d 393 (Pa. Super. 1996), to the extent that it limited application of the PFA Act to people who live in the same household.
The court also held that there was adequate proof of abuse and noted the ages, height and weight of the parties, and that plaintiff -- whose testimony the court found credible -- experienced fear and pain in her arm for several days as a result of defendant's actions.
Judge Ford Elliot concurred reluctantly, noting that the "clear legislative purpose and objective of the Act is frustrated by applying its protection to a dispute between business partners concerning purely business matters." The judge noted that the legislature's removal of the same-household requirement "simply enlarged the group of victims who have standing to seek relief under the Act so long as the abuse they suffer is the result of an intimate, sexual, or familial relationship they share or have shared with the abuser." The current litigants have no relationship that exists in any "domestic sphere." Nonetheless, the judge concurred, finding the majority view "legally sustainable."
Sunday, September 23, 2007
FMLA - state employer - immunity - self-care v. family care
Wampler v. Department of Labor & Industry - MD Pa. - September 14, 2007
http://www.pamd.uscourts.gov/opinions/kane/06v1877.pdf
A claim against against a state employer under the self-care provision of the FMLA, 29 USC sec. 2612(a)(1)(D) is barred by sovereign immunity, under the rationale of Chittester v. DCED, 226 F.3d 223 (3d Cir. 200) and Nevada DHS v. Hibbs, 538 US 721 (2003), as well as decisions from the 6th, 7th, 8th and 10th Circuits.
Unlike the family-care provision of the FMLA, 29 USC sec. 2612(a)(1)(C), the self-care provision does not inplicate gender-based stereotypes, which Congress has the power to deal with under the enforcement clause of the 14th Amendment.
http://www.pamd.uscourts.gov/opinions/kane/06v1877.pdf
A claim against against a state employer under the self-care provision of the FMLA, 29 USC sec. 2612(a)(1)(D) is barred by sovereign immunity, under the rationale of Chittester v. DCED, 226 F.3d 223 (3d Cir. 200) and Nevada DHS v. Hibbs, 538 US 721 (2003), as well as decisions from the 6th, 7th, 8th and 10th Circuits.
Unlike the family-care provision of the FMLA, 29 USC sec. 2612(a)(1)(C), the self-care provision does not inplicate gender-based stereotypes, which Congress has the power to deal with under the enforcement clause of the 14th Amendment.
Friday, September 21, 2007
contracts - unjust enrichment/quantum meruit
Northeast Fence & Iron Works, Inc. v. Murphy Quigley Co., Inc. - Superior Ct. - Sept. 18, 2007
http://www.aopc.org/OpPosting/Superior/out/a35022_06.pdf
Plaintiff/subcontractor's judgment against defendant/general contractor for installation of fencing at county prison upheld on theory of quantum meruit/unjust enrichment, which are synonymous terms. Plaintiff finished the fence job on emergency basis when a prior subcontractor left the job incomplete.
The elements/factors in QM/unjust enrichment are
a) lack of an express contract - there was a dispute about the price in this case
b) benefit conferred on defendant - satisfaction of D's contractual obligation to 3d party
c) acceptance and retention of benefit by defendant
d) circumstances would make it inequitable or unjust to retain benefit w/o payment, the "most significant element" of the doctrine
e) QM can apply where there has been partial payment, if benefit is greater than amount paid
http://www.aopc.org/OpPosting/Superior/out/a35022_06.pdf
Plaintiff/subcontractor's judgment against defendant/general contractor for installation of fencing at county prison upheld on theory of quantum meruit/unjust enrichment, which are synonymous terms. Plaintiff finished the fence job on emergency basis when a prior subcontractor left the job incomplete.
The elements/factors in QM/unjust enrichment are
a) lack of an express contract - there was a dispute about the price in this case
b) benefit conferred on defendant - satisfaction of D's contractual obligation to 3d party
c) acceptance and retention of benefit by defendant
d) circumstances would make it inequitable or unjust to retain benefit w/o payment, the "most significant element" of the doctrine
e) QM can apply where there has been partial payment, if benefit is greater than amount paid
Thursday, September 13, 2007
consumer - debt collection - bad checks
FTC v. Check Investors, Inc. - Third Circuit - September 6, 2007
http://www.ca3.uscourts.gov/opinarch/053558p.pdf
The court affirmed the district court's grant on injunctive relief and a $10.2 million fine pursuant to the Fair Debt Collection Practices Act, 15 USC 1692 et seq., against a company which purchased more than 2.2 million bad checks for $348 million and admittedly used abusive debt collection practices against the consumer who had written the checks -- most notably false threats of criminal prosecution and calling people criminals or crooks. The defendant also tried to collect a fee of $125-$130 to the face amount of each check, which exceeded the legal limit of most states. The court said that defendant's tactics "apparently knew no limits."
Background of the FDCPA
The court discussed the "basis tenet" of the FDCPA that "all consumers, even those who have mismanaged their financial affairs resulting in default on their debts, deserve the rights to be treated in a reasonable and civil manner," and noted that the "number of persons who willfully refused to pay debts is minuscule....When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness or marital difficulties or divorce."
NSF checks are "debts" under the FDCPA
A "debt" under the FDCPA is "any obligation...to pay money" arising out of a consumer transaction, even if the payor's intent was fraudulent at the time s/he wrote the check. Four other courts of appeals reached this same conclusion. A check written in a consumer transaction evidences the drawer's obligation to pay, which remains even if the check is dishonored. A transaction's status as a debt must be determined at the time the obligation first arose. The crime of writing a bad check is a specific intent crime; the bad intent must exist at the time the check is written--a fact that defendant could not establish. There is no crime even when the drawer is at fault for the dishonor unless wrongful intent exists at the time the check was written.
But even if that were not the case, "there is no fault exception in the FDCPA....Congress chose not to exempt debt collectors from following the Act [even] if they could prove that the consumer intended his check to be dishonored or accepted credit from a merchant intending default....[N]o consumer deserves to be abused in the collection process."
The payors/drawers of the NSF checks are "consumers" under the FDCPA
The FDCPA defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt." (emphasis in original). "Congress realized that some people who write bad check do so knowingly and willfully and that their conduct is fraudulent. It is just as clear that Congress enacted a definition of 'consumer' that did not exclude such person from the protections they would otherwise be afforded under the FDCPA."
Check Investors was a "debt collector" and not a "creditor under the FDCPA
The court rejected defendant's argument that because it purchased the checks involved, it was not a "debt collector" under the FDCPA because it was collecting its own debts, not those of another. The court distinguished those who acquire a debt with the intent to continue to service it, from those who buy for collection--the case here. The court also stressed the difference between buying a debt which is not in default from buying one which was in default when acquired.
"Not only do we conclude that Appellants are 'debt collectors' rather than a 'creditors,' we believe that their course of conduct exemplifies why Congress enacted the FDCPA and the wisdom of doing so. It also shows why Congress has directed us to focus on whether a debt was in default when acquired to determine the status of 'creditor' vs. 'debt collector.' "
http://www.ca3.uscourts.gov/opinarch/053558p.pdf
The court affirmed the district court's grant on injunctive relief and a $10.2 million fine pursuant to the Fair Debt Collection Practices Act, 15 USC 1692 et seq., against a company which purchased more than 2.2 million bad checks for $348 million and admittedly used abusive debt collection practices against the consumer who had written the checks -- most notably false threats of criminal prosecution and calling people criminals or crooks. The defendant also tried to collect a fee of $125-$130 to the face amount of each check, which exceeded the legal limit of most states. The court said that defendant's tactics "apparently knew no limits."
Background of the FDCPA
The court discussed the "basis tenet" of the FDCPA that "all consumers, even those who have mismanaged their financial affairs resulting in default on their debts, deserve the rights to be treated in a reasonable and civil manner," and noted that the "number of persons who willfully refused to pay debts is minuscule....When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness or marital difficulties or divorce."
NSF checks are "debts" under the FDCPA
A "debt" under the FDCPA is "any obligation...to pay money" arising out of a consumer transaction, even if the payor's intent was fraudulent at the time s/he wrote the check. Four other courts of appeals reached this same conclusion. A check written in a consumer transaction evidences the drawer's obligation to pay, which remains even if the check is dishonored. A transaction's status as a debt must be determined at the time the obligation first arose. The crime of writing a bad check is a specific intent crime; the bad intent must exist at the time the check is written--a fact that defendant could not establish. There is no crime even when the drawer is at fault for the dishonor unless wrongful intent exists at the time the check was written.
But even if that were not the case, "there is no fault exception in the FDCPA....Congress chose not to exempt debt collectors from following the Act [even] if they could prove that the consumer intended his check to be dishonored or accepted credit from a merchant intending default....[N]o consumer deserves to be abused in the collection process."
The payors/drawers of the NSF checks are "consumers" under the FDCPA
The FDCPA defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt." (emphasis in original). "Congress realized that some people who write bad check do so knowingly and willfully and that their conduct is fraudulent. It is just as clear that Congress enacted a definition of 'consumer' that did not exclude such person from the protections they would otherwise be afforded under the FDCPA."
Check Investors was a "debt collector" and not a "creditor under the FDCPA
The court rejected defendant's argument that because it purchased the checks involved, it was not a "debt collector" under the FDCPA because it was collecting its own debts, not those of another. The court distinguished those who acquire a debt with the intent to continue to service it, from those who buy for collection--the case here. The court also stressed the difference between buying a debt which is not in default from buying one which was in default when acquired.
"Not only do we conclude that Appellants are 'debt collectors' rather than a 'creditors,' we believe that their course of conduct exemplifies why Congress enacted the FDCPA and the wisdom of doing so. It also shows why Congress has directed us to focus on whether a debt was in default when acquired to determine the status of 'creditor' vs. 'debt collector.' "
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.
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