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.
Friday, September 28, 2007
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.
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.
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