real property - consumer protection - disclosures

Growall v. Maietta - Superior Court - July 26, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/A04001_07.pdf

Jury found husband/seller liable but not wife/seller, for failure to tell buyer about basement water problem The appellate court affirmed

- under Consumer Protection Law, 73 PS 201-1 et seq., because it appeared that the purchase was for investment and not personal, family, or household purposes

- under Real Estate Settlement Disclosure Law, 68 Pa C.S. 7301 et seq., because - jury found wife did not know of problem at time of sellers' RESDL disclosure - seller/wife was not obligated to make any specific investigation or inquiry to complete the disclosure, 68 Pa CS 7307
- seller/wife not liable to error or inaccuracy or omission if she did not have knowledge of it, 68 Pa. CS 7308
- there was no allegation or proof that there was a problem until 2 months after disclosure statement filled out

The court distinguished similar cases, since they involved "basic facts" about the property "readily ascertainable by the sellers," e.g., zoning retrictions and boundary lines. In the case at bar, the problem was called "an isolated incident of water damage/flooding in the basement," and not a "basis fact."

consumer - debt collection - corporate officer

Campuzano-Burgos v. Midland Credit Mgmt., et al. - ED Pa. - July 26, 2007

http://www.paed.uscourts.gov/documents/opinions/07D0870P.pdf

Use of a dunning letter bearing the signature of corporate president and executive v.p. who had no role in the debt collection process was held to be violation if Fair Debt Collection Practices Act, 15 USC 1692e(9), which bars use of any written communication which, inter alia, creates a false impression as to its source, authorization or approval.

The FDCPA is to be interpreted from the viewpoint of the least sophisticated debtor, while avoiding bizarre or idiosyncratic intepretations, and presuming reading with care and in context. The FDCPA is meant to protect the gullible as well as the shrewd.

A writing is deceptive where is can be reasonably read to have two or more different meanings, one of which is inaccurate. It was alleged in this case that the letter was misleading because it gave the impression that the debt was being pursued by "high-ranking officer of the company," when in fact it was not, thereby creating a false impression as to source, authorization or approval. There are analgous cases involving the use of an attorney's name when the attorney is not involved in the collection.

In both situations, there is an implication of "special authority." An unsophisticated consumer getting a letter from an attorney or corporate officer "knows the price of poker has just gone up" because attorneys and officers have a special status and greater weight and "get the debtor's knees knocking. An escalation from a lowly collection agent to a senior executive of the company" shows that the debt collector means business. It "connotes authority and is more likely to generate a response." In such cases, there is a "general concern with debt collectors' practice of falsely implying that someone in a position of real authority is supervising the collection of this debt." It is an "attempt to goad a debtor into paying by using a signatory who has no involvement in the handling of the…cases as a signal that the collection process has escalated to a graver level….to convey that a high-roller has entered the game."

The court held that "where some aspect of a debt collector's communication - whether explicit or implied - has the purpose or effect of making a debtor more likely to respond, the FDCPA requires that it be true." Because the executives in this cases did not review the case and had no actual involvement, the court found that the letter was deceptive and misleading within the meaning of sec. 1692e.

admin. law - appeal - late appeal - nunc pro tunc

Hantman, Inc. v. Office of UC Tax Services

http://www.aopc.org/OpPosting/CWealth/out/36CD07_7-11-07.pdf

Nunc pro tunc appeal denied where agency rejected the credibility of petitioner's claim that he had a psychological disability -- a phobia about forms.

As a rule, time limits for appeals are mandatory, absent

- fraud or manifestly wrongful or negligent conduct of admininstrative authorities

- non-negligent circumstances of appellant or his/her counsel, if
- the appeal is filed shortly after expiration date and
- the appellee is not prejudiced (Bass - 401 A2d 1133 (Pa. 1979)

- unexpected illness/hospitalization (Cook - 671 A2d 1139 (Pa. 1996))

Even in those case, the party attempting to file an appeal nunc pro tunc carries a "heavy burden to justify an untimely appeal."

mortage foreclosure - HEMAP

Fish v. PHFA - Commonwealth Court - July 25, 2007

http://www.aopc.org/OpPosting/CWealth/out/32CD07_7-25-07.pdf

Court upheld PHFA's rejection of the HEMAP application of a attorney/petitioner.

PHFA had rejected the application, finding that
a) applicant did not show that he was suffering financial hardship due to circumstances beyond his control, because
- he got a tax return of $6180, enough to make 10 mortgage payments, but saved nothing toward the mortgage delinquency
- applicant had net monthly income of $2161, enough to meet his regular monthly expenses, but "has failed to save any funds toward the delinquency"

b) applicant did not comply with procedural requirements of Act 91, in that he failed to attend a face-to-face meeting with a consumer credit counseling agency (CCCA) within 33 days of the date of his Act 91 letter http://www.phfa.org/forms/hemap/hemap_act91_notice.pdf.

c) since applicant had received but not acted on an Act 91 notice in a first foreclosure action, no second Act 91 letter was required before the second foreclosure was commenced under 12 Pa. Code 31.203(a)(3)(iv) http://www.pacode.com/secure/data/012/chapter31/s31.203.html.

The purpose of an Act 91 notice is to "instruct the morgagor of different means he may use to resolve his arrearages in order to avoid foreclosure…and also gives him a timetable in which such means must be accomplished." Applicant got that information.

discovery - sanctions - factors

Reilly v. Ernst & Young LLP - Superior Court- July 18, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/e03004_06.pdf

Trial court abused its discretion by ordering the deemed admission of a party's Request for Admissions due to other party's failure to verify its responses to the RFA.

The following factors militated strongy against such a deemed admission

- the prejudice caused to the other party and whether the prejudice can be cured
- the defaulting party's willfulness or bad faith in failing to comply with the discovery order. - the number of discovery violations
- the importance of the precluded evidence in light of the failure to comply

mortgage foreclosure - jurisdiction - service

PNC Bank v. Mathias- Superior Court- July 17, 2007

http://www.aopc.org/OpPosting/Superior/out/A03002_07.pdf

The trial court did not have jurisdiction to enter a default judgment against the heir of deceased mortgagor, where the plaintiff bank did not serve the heir -- named as a defendant "unknown heir" -- with a copy of the complaint, even though it knew of his existence and location and had corresponded with him by letter and phone.

Despite learning of mortgagor's death, the existence of a potential heir, and correspondence with that person, the bank filed and trial court granted the bank's motion for alternate serve under Rule 430, instead of requiring regular service under Rule 410(a). The heir didn’t learn of the alternate service and never received personal service. In its motion, the bank averred that decedent's heirs were not known.

The appellate court held that the plaintiff "did not effectuate proper service" of the complaint where it had prior written and telephone communications with the heir, knew that the heir represented the mortgagor's estate, and knew that the person was a possible heir to the mortgagor's estate, having said as much in a letter to him. "If the plaintiff has failed to effectuate valid service and if the defendant lacks notice of the proceedings against him, the court has no jurisdiction over the party and is powerless to enter judgment. Entry of a judgment under these circumstances was also held to violate due process.

mortgage foreclosure - deficiency judgment - proof of value

Loukas v. Mathias, et al. - Superior Court - July 12, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/S22037_07.pdf

Plaintiff in a mortgage foreclosure must offer competent proof of an alleged reduction in value due to "uncertainty of title" in a Deficiency Judgment Act (DFA) case under, 42 Pa CS 8101 . The Superior Court reversed the trial court, which had improperly adopted the unsupported testimony of plaintiff's witness that a supposed uncertainty of title reduced the value of the property by about 10%, thus causing a substantial deficiency judgment and continued liability of the defendant, over and above the value of the real property taken in execution.

The objective of the DFA is "to relieve a debtor of further personal liability to the creditor, if the real property taken by the creditor on an execution has a fair market value... sufficient so that the creditor may dispose of the property to others...without a net loss to the creditor." In this case, the unproven reduction in value, "without factual support in the record," thwarted that purpose. The appellate court's reversal resulted in a surplus in excess of plaintiff-appellee's judgment, thus rendering a deficiency judgment "inappropriate." The court found that the property, bolstered in value by the rejection of an unwarranted deduction due to the alleged uncertainty of title, satisfied defendants' liability to plaintiff.

consumer - bankruptcy - stay

GMAC v. Buchanan - Superior Court - June 11, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/s25035_07.pdf

Defendant's petition to set aside a sheriff's sale rejected. Sale was not subject to any automatic stay, as a result of defendant's third bankruptcy with the immediately preceding 12-month period, during which two previous bankruptcy petitions were pending and dismissed, under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 11 USC 362(c)(4)(A)(i).

consumer - debt collection - letter not false, deceptive, or misleading

Rosenau v. Unifund Corp. - ED Pa. 0 June 28, 2007

http://www.paed.uscourts.gov/documents/opinions/07d0782p.pdf

A letter from a debt collector is not false, deceptive or misleading where it says that "if we are unable to resolve this issue within 35 days we may refer this matter to an attorney in your area for legal consideration." Plaintff alleged that it was false, etc., because it was, in fact, not prepared, reviewed, and/or sent by a legal department or a lawyer but could reasonably be read that way, from the perspective of the least sophisticated debtor (LSD).

The FDCPA, 15 USC 1692 et seq., prevents liability for "bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanidng and willingness to read with care."

Here, plaintiff's intepretation was bizarre and idiosyncratic, in urging that the LSD would believe the letter came from an attorney, when in fact it did not. Even an LSD could not reasonably interpret the letter as having been written or reviewed by an attorney. There is no other reasonable intepretation and therefore the letter is not false, deceptive or misleading.

consumer - appraiser - liability

Morilus v.Countrywide Home Loans, Inc. - ED Pa. - June 20, 2007

http://www.paed.uscourts.gov/documents/opinions/07d0746p.pdf

The plaintiff sued an appraisal company under a number of consumer protection statutes, claiming that the company had conspired to unfairly and deceptively induce plaintiff to execute the loan, based on a falsely inflated appraisal price, with monthly payments that plaintiff could not afford. The court sustained defendant's motion to dismiss some of plaintiff's claims, including

- Truth in Lending Act, 15 USC 1601 et seq., because the defendant was not a creditor
- Home Ownership and Real Estate Protection Act, 15 USC 1639(a), because defendant was not a "creditor"
- Equal Credit Opportunity AQct 15 USC 1691a(e), because defendant was not involved in any credit decision
- Pennsylvania Fair Credit Extension Uniformity Act, 73 PS 2270 et seq., because defendant was not a "creditor"
- Pennsylvania Credit Services Act, 73 PS 2182, because defendant was not a "creditor" or credit services organization
- punitive damages - there was no allegation that D knew of a high risk of harm to P or that it acted deliberately and outrageously and with a conscious disregard of the risk.

The court also rejected the following claims but gave plaintiff leave to file an amended complaint with the necessary allegations, as follows

- Real Estate Settlement Procedures Act, 12 USC 2601 et seq. - to sustain her claim that the defendant was part of a fraudulent scheme to improperly split settlement charges, plaintiff would have to allege that she made a "qualified written request" to the lender stating that her account was in error

- Pennsylvania Consumer Protection Law - Plaintiff did not make any allegations that met the requirements of common law fraud, including a material misreprentation of an existing fact, scienter, jusitifiable reliance on the misrepresentation, and damages, citing Booze v. Allstate Insurance, 750 A.2d 877, 880 (Pa. Super. 2000) [But see Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth 2003), noting that amendments to the CPL statute negated this requirement. ]

- fraud claim - both state and federal pleading law requires pleading with more particularity that in the existing complaint.

consumer - Fair Credit Reporting Act - refusal to investigate disputed debt

Klotz v. Trans Union, LLC - ED Pa. - July 2, 2007

http://www.paed.uscourts.gov/documents/opinions/07D0792P.pdf

In the course of rejecting the plaintiff's motion to certify a class, the court held that the defendant credit reporting agency (CRA) did not have a duty to investigate plaintiff's dispute about his credit report , since

- plaintiff's documents were prepared by a third party credit repair organization (CRO)
- plaintiff did not notify the CRA directly of his dispute, as required by 15 USC 1681i(a)(1)(A)
- plaintiff did not prepare or read the dispute, just signed it and sent it in
- plaintiff did not prove the inaccuracy of the CRA's information, as required by 15 USC 1681i

The court relied on the decision in Cushman v. Trans Union Corp. 115 F.3d 220 (3d Cir. 1997)

mobile homepark rights act - park closures - HB 1673 (proposed)

This recently introduced bill would require written notice to park residents within 30 days of the park owner entering into an agreement for the sale of the park.

You can see HB 1673 at http://www.legis.state.pa.us/cfdocs/legis/home/bills/topindex.cfm

The notice would have to include
- the estimated date that residents will be expected to vacate, no sooner than 180 days of getting notice
- the estimated date that the park will be closed.
- a receipt from one adult resident in each home showing that the notice was received
- a right of first refusal to existing residents and neootiation in good faith
- payment of relocation expenses equivalent to 6 months rent
- pay the appraised value of the home of the tenant cannot find a suitable replacement site

Park owners could not refused to admit used home thyat are in good and tenantable condition

courts- appeals - MDJ judgments - date of judgment

Lloyd, Inc. v. Microbytes, Inc. - Superior Court - July 9, 2007

http://www.aopc.org/OpPosting/Superior/out/a10028_07.pdf

The time to appeal an MDJ judgment was held to begin to run on the "date of judgement" entered on the Notice of Judgment/Transcript Civil Case, on which the MDJ signed the judgment, rather than the next day, on which the Notice was processed.

A judgment is "entered" under MDJ Rule 1002 when the judgment form is signed by the MDJ, not when it is printed out and the process of providing notice of the judgment is initiated. A judgment is encountered simultaneously with the recordation of the judgment on the pre-printed judgment/transcript form. The rules could have allowed the appeal period to begin on the date the notice is printed. They do not, so "we must assume that the appeal period was meant to begin with the signing of the judgment form by the magisterial district judge."

mortgage foreclosure - Act 91 notice - local consumer counseling agency - jurisdiction

Washington Mutual v. Carr - CP Adams County - July 5, 2006
49 Adams L.J. 17 (CP Adams 2006)

In what the court said was a matter of first impression in the state, it held that Act 91 requires a mortgage holder to give the name and address of a "local" consumer credit counseling agency (CCCA), 35 P.S. 1680.403c(b)(1), which the Pa. Housing Finance Agency has indicated mean as being "for the county" in which the property in located. In the instant case, the mortgagee listing 47 CCCAs but none in the county where the property was located and only five in the neighboring counties comprising south central Pennsylvania.

Citing case law to the effect that Act 91 is meant to protect vulnerable consumers unschooled in the complex world of mortgage foreclosure from the loss of their homes due to ignorance of their rights in a sometimes sharp practice of lenders," the court found the "Bank's cavalier shotgun approach to proving appropriate notice to a mortgagor is insufficient to satisfy the jurisdictional prerequisites provided for in Act 91." The court found that the defect could not be cured by amendment and dismissed the complaint, finding that strict and not just substantial compliance with Act 91 was required, since proper notice under Act 91 is a jurisdictional matter. PHA v. Barbour, 592 A.2d 47, 48 (Pa. Super. 1991). "[L]ack of compliance, even if minimal or inadvertent, denies the Court jurisdiction."

PFA - standing - sexual/intimate partner - victim of sexual assault

Scott v. Shay - Superior Court - June 26, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/a37040_06.pdf

Victim and perpetrator of sexual assault are not "family or household members" or "sexual or intimate partners."

In addition, there was no evidence of "abuse" in the case. Two encounters more than a year apart do not establish a course of conduct. Nor did plaintiff have a reasonable fear of bodily injury from defendant's actions.