HAMP - promissory estoppel - agreement to negotiate - D. Mass.

Dixon v. Wells Fargo - D. Mass - July 22, 2011 -

http://pacer.mad.uscourts.gov/dc/cgi-bin/recentops.pl?filename=young/pdf/dixon%20v%20wells%20fargo%20bank.pdf

The gravamen of the complaint is that Wells Fargo promised to engage in negotiations to modify plaintiffs'loan, provided that they took certain “steps necessary to enter into a mortgage modification.” On the basis of Wells Fargo’s representation, plaintiffs stopped making payments on their loan and submitted the requested financial information - only to learn subsequently that the bank had initiated foreclosure proceedings against them. They contend that Wells Fargo ought have anticipated their compliance with the terms of its promise to consider them for a loan modification. Not only was it reasonable that they would rely on the promise, but also their reliance left them considerably worse off, for by entering into default they became vulnerable to foreclosure.

Plaintiffs have made clear that they do not seek specific performance of a promised loan modification. They admit that there was no guarantee of a modification by Wells Fargo, only a verbal commitment to determine their eligibility for a modification if they followed the bank’s prescribed steps. Thus, the plaintiffs’ request that Wells Fargo be held to its promise to consider them for a loan modification is not a covert attempt to bind the bank to a final agreement it had not contemplated. There is no risk that this Court, were it to uphold the promissory estoppel claim, would be “trapping” Wells Fargo into a vague, indefinite, and unintended loan modification masquerading as an agreement to agree.

Furthermore, because the parties had not yet begun to negotiate the terms of a modification, the Court questions whether Wells Fargo’s promise ought even be characterized as a preliminary agreement to agree. Instead, it more closely resembles an “agreement to negotiate.” . . . . (“[T]he question here is simply whether U.S. Bank made and kept a promise to negotiate with Aceves, not whether . . . the bank promised to make a loan or, more precisely, to modify a loan.”).

Wells Fargo made a specific promise to consider the plaintiffs’ eligibility for a loan modification if they defaulted on their payments and submitted certain financial information. . . . See Burton & Andersen, supra §8.2.2, at 332-33 (recognizing that, while there is no general duty to negotiate in good faith, public policy favors imposing noncontractual liability “when one person wrongfully harms another” by making a promise intended to induce reliance); Lucian Arye Bebchuk & Omri Ben-Shahar, Precontractual Reliance, 30 J. Legal Stud. 423, 424 (2001) (“A party may be liable for the other party’s reliance costs on three possible grounds: if it induced this reliance through misrepresentation, if it benefited from the reliance, or if it made a specific promise during negotiations.”); Farnsworth, supra at 236 (referring to the “specific promises that one party makes to another in order to interest the other party in the negotiations” as a “common basis for precontractual liability”).

Importantly, it was not a promise made in exchange for a bargained-for legal detriment, as there was no bargain between the parties; rather, the legal detriment that the plaintiffs claim to have suffered was a direct consequence of their reliance on Wells Fargo’s promise. . . . Under the theory of promissory estoppel, “[a] negotiating party may not with impunity break a promise made during negotiations if the other party has relied on it.” Farnsworth, supra at 236. Promissory estoppel has developed into “an attempt by the courts to keep remedies abreast of increased moral consciousness of honesty and fair representations in all business dealings.” . . . . While it began as “a substitute for (or the equivalent of) consideration” in the context of an otherwise binding contract,. . . . “promissory estoppel has come to be a doctrine employed to rescue failing contracts where the cause of the failure is not related to consideration,” . . .. It now “provides a remedy for many promises or agreements that fail the test of enforceability under many traditional contract doctrines,” . . . but whose enforcement is “necessary to avoid injustice,” Restatement (Second) of Contracts § 90, comment (b).

Admittedly, the courts of Massachusetts have yet to formally embrace promissory estoppel as more than a consideration substitute.. . . Nonetheless, without equivocation, they have adopted section 90 of the Restatement (Second) of Contracts, which reads, “A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” . . . .Nowhere in the comments to section 90 nor in section 2 of the Restatement, which defines the word “promise,” is there an explicit “requirement that the promise giving rise to the cause of action must be so comprehensive in scope as to meet the requirements of an offer that would ripen into a contract if accepted by the promisee.” . . . In fact, the Restatement “has expressly approved” promissory estoppel’s use to protect reliance on indefinite promises. . . .

Massachusetts’s continued insistence that a promise be definite - at least to a degree likely not met in the present case - is arguably in tension with its adoption of the Restatement’s more relaxed standard. This tension is not irreconcilable, however. Tracing the development of promissory estoppel through the case law reveals a willingness on courts’ part to enforce even an indefinite promise made during preliminary negotiations where the facts suggest that the promisor’s words or conduct were designed to take advantage of the promisee. The promisor need not have acted fraudulently, deceitfully, or in bad faith. . . . Rather, “[f]acts falling short of these elements may constitute conduct contrary to general principles of fair dealing and to the good conscience which ought to actuate individuals and which it is the design of courts to enforce.” . . . As the Supreme Judicial Court remarked in an early promissory estoppel case:

[I]t is not essential that the representations or conduct giving rise to [the doctrine’s] application should be fraudulent in the strictly legal significance of that term, or with intent to mislead or deceive; the test appears to be whether in all the circumstances of the case conscience and duty of honest dealing should deny one the right to repudiate the consequence of his representations or conduct; whether the author of a proximate cause may justly repudiate its natural and reasonably anticipated effect; fraud, in the sense of a court of equity, properly including all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another or by which an undue and unconscientious advantage is taken of another. Id. at 525 . . . .

Typically, where the Massachusetts courts have applied the doctrine of promissory estoppel to enforce an otherwise unenforceable promise, “there has been a pattern of conduct by one side which has dangled the other side on a string.”

In the present case, Wells Fargo convinced the plaintiffs that to be eligible for a loan modification they had to default on their payments, and it was only because they relied on this representation and stopped making their payments that Wells Fargo was able to initiate foreclosure proceedings. While there is no allegation that its promise was dishonest, Wells Fargo distinctly gained the upper hand by inducing the plaintiffs to open themselves up to a foreclosure action. In specifically telling the plaintiffs that stopping their payments and submitting financial information were the “steps necessary to enter into a mortgage modification,” Wells Fargo not only should have known that the plaintiffs would take these steps believing their fulfillment would lead to a loan modification, but also must have intended that the plaintiffs do so. The bank’s promise to consider them for a loan modification if they took those steps necessarily “involved as matter of fair dealing an undertaking on [its] part not to [foreclose] based upon facts coming into existence solely from” the making of its promise.

As the cases reveal, where, like here, the promisor opportunistically has strung along the promisee, the imposition of liability despite the preliminary stage of the negotiations produces the most equitable result. This balancing of the harms “is explicitly made an element of recovery under the doctrine of promissory estoppel by the last words of [section 90 of the Restatement], which make the promise binding only if injustice can be avoided by its enforcement.” . . . Binding the promisor to a promise made to take advantage of the promisee is also the most efficient result.. . . . In cases of opportunism, “[the] willingness to impose a liability rule can be justified as efficient since such intervention may be the most cost-effective means of controlling opportunistic behavior, which both parties would seek to control ex ante as a means of maximizing joint gains. Because private control arrangements may be costly, the law-supplied rule may be the most effective means of controlling opportunism and maximizing joint gain.”. . . .

[R]eliance-based recovery in such instances offers the most equitable and efficient result without “distort[ing] the incentives to enter negotiations” in the first place. . . . This Court, therefore, holds that the complaint states a claim for promissory estoppel: Wells Fargo promised to engage in negotiating a loan modification if the plaintiffs defaulted on their payments and provided certain financial information, and they did so in reasonable reliance on that promise, only to learn that the bank had taken advantage of their default status by initiating foreclosure proceedings. Assuming they can prove these allegations by a preponderance of the evidence, their damages appropriately will be confined to the value of their expenditures in reliance on Wells Fargo’s promise.

Without question, this is an uncertain result. But the “type of life-situation” out of which the plaintiffs' case arises - a devastating and nationwide foreclosure crisis that is crippling entire communities - cannot be ignored. . . . Distressed homeowners are turning to the courts in droves, hoping for relief for what they perceive as misconduct by their mortgage lenders. Many of these cases are factually similar, if not identical to, the plaintiffs’ case. Yet, with the notable exception of three Massachusetts federal district court cases, virtually no other court has upheld a claim for promissory estoppel premised on such facts. . . .To the extent that today’s result is an anomaly, this Court has sought to explain its decision “openly and with respect for precedent, not by sleight of hand.” . . . . It is the view of this Court that “[f]oreclosure is a powerful act with significant consequences,” Ibanez, 458 Mass. at 655 (Cordy, J., concurring), and where a bank has obtained the opportunity to foreclose by representing an intention to do the exact opposite - i.e., to negotiate a loan modification that would give the homeowner the right to stay in his or her home - the doctrine of promissory estoppel is properly invoked under Massachusetts law to provide at least reliance-based recovery.

Without guidance from another court within the First Circuit and without clear direction from other federal and state courts across the nation, this Court agrees with Judge Posner’s conclusion that, especially because the Home Owners’ Loan Act (“HOLA”), 12 U.S.C. §§ 1461-1700 (HOLA), and its implementing regulations, 12 C.F.R. §§ 500-99, does not give a private right of action, Congress could not have intended to deny all traditional state-law avenues of recourse to consumers who are harmed by the unseemly conduct of lenders. This Court, therefore, holds that the Dixons’ promissory estoppel claim, rooted in the common law and with no ambition of regulating lending, is not barred by HOLA.

Plaintiffs' counsel Gerald A. Phelps, Law Office of Gerald A. Phelps, 11 Lamppost Drive, Halifax, MA 02338 781-754-0825 lawgap@verizon.net

UC - pro se party - referee duty to assist

Hackler v. UCBR - Cmwlth. Court - July 15, 2011



http://www.courts.state.pa.us/OpPosting/Cwealth/out/2490CD10_7-15-11.pdf

UCBR decision reversed and remanded because the Referee failed to adequately assist the pro se claimant during the evidentiary hearing, as required by 34 Pa. Code § 101.21.

In interpreting this regulation, the courts have held that, in addition to advising pro se parties of their rights and aiding them in questioning witnesses, referees should reasonably assist pro se parties to elicit facts that are probative for their case. Bennett v. UCBR, 445 A.2d 258, 259-60 (Pa. Cmwlth. 1982). In Bennett, the court said that: The referee has a responsibility . . . to assist a pro se claimant at a hearing so that the facts of the case necessary for a decision may be adequately developed to insure that compensation will not be paid in cases in which the claimant is not eligible and that compensation will be paid if the facts, thoroughly developed, entitled the claimant to benefits. Id. (emphasis in original).

While the referee “need not advise a party on evidentiary questions or on specific points of law,” the referee “must act reasonably in assisting in the development of the necessary facts.” Id. at 260 (first emphasis added); see also, UCBR v. Ceja, 493 Pa. 588, 611-12, 427 A.2d 631, 643 (1981) (plurality opinion) (stating that referees have an affirmative duty to afford claimants a reasonable opportunity to challenge hearsay evidence, and that a pro se party must be given “every assistance compatible with the impartial discharge of [the tribunal’s] official duties,” (quoting 34 Pa. Code § 101.21)). In determining whether the referee has given a pro se claimant reasonable assistance at an evidentiary hearing, the courts consider the referee’s approach in questioning the parties.

Obstruction of claimant's attempt to present evidence - In Ceja, “the referee’s conduct of the hearing fell far short of protecting the rights of the unrepresented claimant” because the referee interrupted the claimant when she attempted to object to hearsay evidence offered by the employer. Id. at 613-14, 427 A.2d at 644. The Ceja plurality opinion found that the referee “fell short of the regulatory mandate” set forth in Section 101.21 because, instead of aiding the claimant’s attempt to stop the employer from reading unsubstantiated hearsay documents into the record, the referee told the claimant to “[l]et him finish.” Id. at 612-13, 427 A.2d at 644. Writing for the plurality, Justice Kauffman pointed out that the claimant received “virtually no meaningful opportunity to challenge the hearsay documents . . . much less cross-examine the declarants.” Id. Although the claimant made “one attempt” to challenge the hearsay evidence, the referee “rebuffed” her. Id. After the employer testified, the claimant again tried to add to her own testimony, but “the referee replied in a manner designed to abbreviate claimant’s reply,” which led to a “confused and convoluted account” from the claimant. Id. at 613, 427 A.2d at 644. Justice Kauffman concluded that, “[i]nstead of making a sincere effort to unravel claimant’s testimony . . . the referee . . . in effect cross-examined her” in a way that favored the employer. Id.

Failure to help claimant to bring out facts - Another component of a referee’s reasonable compliance with the regulatory obligation to assist unrepresented parties is guiding the parties to bring out facts of which the referee knows or should know. For example, the claimant in Bennett, a hotel bartender, testified that she experienced sexual harassment on the job. Bennett, 445 A.2d at 260 n.6. Documentation in the record corroborated her testimony. Id. However, the referee “did not ask [the pro se claimant] questions sufficient to enable her to emphasize the factual aspects of her contentions,” although doing so might have enabled the claimant to show “a necessitous and compelling cause for her voluntary termination of her employment.” Id. at 260. This Court found that the referee “should have more thoroughly and reasonably extracted testimony on these points in the interests of fairness.” Id. at 260 n.6 (emphasis in original). Therefore, this Court reversed the Board’s order and remanded the case for an evidentiary hearing. Id. at 260. Similarly, in Tate v. Unemployment Compensation Board of Review, 477 A.2d 54, 55 (Pa. Cmwlth. 1984), this Court found that there was no “full and fair hearing” where the referee did not assist the pro se claimant to meet her burden to show that impending homelessness was the compelling reason why she left her job. Id. In Tate, the claimant was living in a campground tent as winter approached. Id. Her testimony suggested that she would have become homeless if she had not moved away to rejoin her husband, who had accepted a job in a distant town. Id. However, “the referee . . . failed to ask [the claimant] important questions concerning the reasons for her termination of her employment . . . which were suggested by her testimony.” Id. at 56. Although the prospect of homelessness might have supplied a “compelling economic reason[]” for the claimant to leave her job, “the referee asked no more questions about this issue.” Id. at 55. Accordingly, this Court in Tate remanded the case to the Board for further proceedings. Id. at 57.

The instant case - In this case, the evidentiary hearing was conducted in a manner similar to those found deficient in Bennett, Ceja, and Tate. The Referee did not question Claimant on issues that the Referee knew or should have known Claimant wanted to pursue. For example, Claimant raised several issues in his Petition to Appeal, a document that the Referee placed into evidence. Specifically, in the attachment to Claimant’s Petition to Appeal, Claimant stated that he experienced verbal abuse on the job, affirmed that he always did honest work, and denied that he received “any type of warning.” However, this information was never presented at the hearing, and the Referee did not elicit this information from Claimant through the very strict question-and-answer format the Referee employed during Claimant’s testimony.

Additionally, the Referee here bypassed “important questions . . . which were suggested by . . . testimony.” Tate, 477 A.2d at 56. For instance, the Referee did not ask Claimant about his initial attempt to deny willful misconduct, or about his version of what occurred at his place of employment. Instead, the Referee constrained Claimant’s testimony, asking Claimant specific questions which did not allow for open-ended answers. This manner of proceeding did not elicit significant testimony regarding issues set out in Claimant’s Petition to Appeal or those about which Claimant tried to present testimony during other parts of the hearing. Claimant did not have an opportunity to speak, unconstrained by the Referee’s questions, until the end of the hearing after the testimony had closed. At that point, Claimant tried to present his side of what occurred but, because the testimony was closed, the Referee did not permit Claimant to set forth his side of the case. This falls short of the standard expressed in Section 101.21.

Additionally, no fewer than ten times, the Referee interrupted Claimant’s questioning of Employer during cross-examination with regard to the inspection incident and prevented him from completing that line of questioning. The Referee intervened and distracted Claimant’s train of thought nearly every time Claimant was invited to speak. Just as in Ceja, the many interruptions deprived Claimant of the process he was due under 34 Pa. Code § 101.21.

The record also establishes that after the Referee explained the rights of the parties to testify, to introduce evidence, and to cross-examine witnesses, and after he expounded on the complex legal burden of proof in meticulous detail, Claimant indicated to the Referee that he did not understand; however, the Referee quickly glossed over Claimant’s befuddlement and cut Claimant’s testimony off twice when Claimant tried to refute the charge of willful misconduct.

While the Court notes the heavy caseload referees are faced with in this economic climate and the resulting need for referees to expedite hearings, referees must nonetheless comply with the legal requirement of 34 Pa. Code § 101.21 by assisting pro se claimants to focus on the issues and testimony that will be relevant to their eligibility for benefits. The Claimant was prejudiced by the Referee’s failure to conduct the hearing in accordance with the requirements of 34 Pa. Code § 101.21. The Referee not only did not assist Claimant, but Claimant’s attempts to offer contrary evidence were stifled. The Board failed to perceive this irregularity and, for that reason, the court held that the Board erred in affirming the Referee’s Decision and finding that the Referee did not violate Claimant’s right to a fair hearing under 34 Pa. Code § 101.21.

UC - rule violation; sec. 3, - criminal conviction

Green v. UCBR - Cmwlth. Court - July 13, 2011 - unpublished memorandum opinion

http://www.pacourts.us/OpPosting/Cwealth/out/2232CD10_7-13-11.pdf

Rule violation - Supervisory, management employee did not violate a rule which applied, on its face, only to non-supervisory, non-management employees.

Sec. 3 - Claimant did not violate sec. 3, even though he was charged with a number of serious non-work-related offenses, including involuntary deviate sexual intercourse of a person less than 16 years of age, aggravated indecent assault of a person less than 13 years of age; indecent assault of a person less than 16 years of age, endangering the welfare of children and corruption of minors. All but one of the criminal charges were dismissed, and claimant pleaded nolo contendere to the one remaining charge, endangering the welfare of children, a misdemeanor. He received a sentence of three years of probation, was ordered to have no contact with the minor involved in the incident, and to comply with a mental health evaluation if necessary.

Section 3 can operate to disqualify claimants on the basis of off-duty, non-job related misconduct. Claimants can be found ineligible only if their behavior “(1) is inconsistent with acceptable standards of behavior, and (2) directly reflects upon his or her ability to perform the assigned duties.” Martin v. UCBR, 713 A.2d 753, 754 (Pa. Cmwlth. 1998) [citing UCBR v. Derk, 353 A.2d 915, 917 (Pa. Cmwlth. 1976)].

A criminal conviction is considered conclusive proof of the facts charged, and often is sufficient to prove the first prong of this test, Hawkins v. UCBR, 695 A.2d 963 (Pa. Cmwlth. 1997), but in evaluating the second prong, a number of factors must be considered, including: (a) the specific nature of the offense committed by Claimant; (b) the nature of Claimant's assigned duties; (c) whether Claimant's job requires any special degree of trust on the part of the employer; and (d) any other circumstances which may particularly affect Claimant's ability to do his job, including whether the crime occurred on or off Employer's premises, and whether or not it involved any of Employer's other workers or clients. SEPTA v. UCBR, 506 A.2d 974, 977 (Pa. Cmwlth. 1986).

In this case, the claimant plea of nolo contendere to the charge of endangering the welfare of a child is sufficient to prove the first prong, but UPMC offered no evidence which would satisfy the second prong by showing that the conviction directly reflects upon claimant’s ability to perform his assigned duties. In the record, there is scant evidence of the conduct underlying the conviction, no evidence whatsoever of claimant's duties or the degree of trust placed in him by his employer, and no reasons offered why the conviction would affect Green’s ability to do his job.

The Board’s finding that claimant’s conviction directly reflects upon his ability to perform his assigned duties is not supported by substantial evidence. The Board, therefore, erred in finding claimant ineligible under Section 3 of the Law.

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The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

UC - hearing - procedure - limitation of cross-examination

Philadelphia Parking Authority v. UCBR - July 13, 2011 - unpublished memorandum decision

http://www.pacourts.us/OpPosting/Cwealth/out/2578CD10_7-13-11.pdf

After both parties had presented their cases and rested, a limited inquiry by the referee into the basic background facts needed to issue a decision and order did not open the door for the employer to cross-examine the claimant regarding the very substance of the claim for benefits, especially where the employer chose not to call claimant as an adverse witness during its case and employer specifically declined to testify on his own behalf and in support of his claim for benefits.

Because the employer could have called claimant as a witness before it rested and the referee limited his inquiry into confirming only that claimant did not dispute that he was discharged, we discern no abuse of discretion in prohibiting cross-examination regarding the circumstances of the discharge in this case.

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The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

UC - voluntary quit - health reasons

Valeriano v. UCBR - July 13, 2011 - unpublished memorandum opinion

http://www.pacourts.us/OpPosting/Cwealth/out/2787CD10_7-13-11.pdf

Claimant had a necessitous and compelling health reason to leave her employment, where

- her physician directed her to stay out of work she reinjured her leg while working on a light-duty position.

- Claimant informed Employer of her inability to return to work and provided doctor's notes and other supporting medical documentation

- She was able and available to perform sedentary work within her physical restrictions

- She resigned after Employer denied her workers' compensation claim and did not respond for three weeks to her request for FMLA disability leave.

These facts found by the Board are sufficient to establish a necessitous and compelling health reason for terminating her employment under Ridley Sch. Dist v. UCBR, 637 A.2d 749 (Pa. Cmwlth. 1994).

Because Claimant terminated her employment due to a necessitous and compelling health reason, not to avoid an imminent discharge, the Board's finding that Employer did not tell her that her job was in jeopardy is irrelevant to her eligibility for benefits under Section 402(b) of the Law. Compare Pa. Liquor Control Bd. v. UCBR, 648 A.2d 124 (Pa. Cmwlth. 1994) (claimant's separation from employment was a discharge for willful misconduct, not a voluntary quit, because she resigned in order to avoid an imminent discharge for a disciplinary reason).

Reasonable effort to preserve employment - The record also establishes that Claimant made a reasonable effort to preserve her employment. In Genetin v. UCBR, 499 Pa. 125, 130-31, 451 A.2d 1353, 1356 (1982), the Pennsylvania Supreme Court held: Where an employee because of a physical condition, can no longer perform his regular duties, he must be available for suitable work, consistent with the medical condition, to remain eligible for benefits. However, once he has communicated his medical problem to the employer and explained his inability to perform the regularly assigned duties, an employee can do no more. The availability of a position, the duties expected to be performed by one serving in that capacity, and the desirability of that individual for service in that capacity are managerial judgments over which the employee has no control. As long as the employee is available where a reasonable accommodation is made by the employer, that is not inimical to the health of the employee, the employee has demonstrated the good faith effort to maintain the employment relationship required under the Act. … To insist upon the employee's initiating the quest for an alternative position, would require a meaningless ritual that does not further the objectives of the Act.

In this matter, Employer was aware of Claimant's health problems. Claimant was available and able to perform suitable work within her physical restrictions, as the Board found. Employer did not dispute that Claimant inquired about alternative positions and applied for one. Employer, however, did not offer her any suitable work and did not even respond to her letter requesting disability leave before she resigned. Claimant’s undisputed testimony shows that she visited the Administration office several times and provided all the requested documentation. She testified: "I kept asking Is there anything else you need? Is there anything else you need? And the answer was no." N.T. at 20

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The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

EAJA - atty. fees - special circumstances - development of collateral issues

Second Circuit: Failure to Develop Collateral Issues Does Not Warrant Reduction in Fees Awarded Under EAJA for Lawyer Representing Disability Claimant
Mark Hamblett, “Circuit Court Criticizes Big Fee Reduction in Disability Case,”New York Law Journal, July 11, 2011

The New York Law Journal writes: “The failure of a Social Security claimant's counsel to develop an administrative record on issues collateral to a disability determination is not a special circumstance that warrants a fee reduction under the Equal Access to Justice Act, a federal appeals court has ruled.

The U.S. Court of Appeals for the Second Circuit on Friday reversed a magistrate judge's decision to slice an attorney's fees by two-thirds.

The decision in Vincent v. Commissioner of Social Security, 10-2437-cv, was made by Judges John M. Walker Jr., Guido Calabresi, and Richard C. Wesley. [Mark] Schneider represented Loretta Vincent on her successful claim for disability benefits based on a work-related back injury that rendered her unable to work beginning in August 2004. . . .

Judge Walker noted that the District Court said Mr. Schneider failed to identify a discrepancy in Ms. Vincent's work history and also should have developed the record to explain why she did not comply with treatment recommendations. ‘The district court demanded too much of counsel,’ Judge Walker said. ‘If we endorsed the district court's position, counsel would have to anticipate and refute all conceivable credibility issues to be assured recovery of attorney's fees after prevailing on appeal. This is not, nor should it be, the bar against which representation in Social Security matters is assessed for purposes of awarding [Equal Access to Justice Act] fees,’ he said.”

SSI - standard of review of magistrate decision; functional capacity

Brown v. Astrue - 3d Cir. - July 6, 2011

http://www.ca3.uscourts.gov/opinarch/103435p.pdf

Appeal from magistrate judge to district court - de novo review required

District Court review of magistrate judge decision must be de novo under 28 U.S.C. 636(b)(1)(b). If a party timely and properly files a written objection to the magistrate's report , the District Court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Sec. 636(b)(1) requires district courts to review such objections de novo unless the objection is "not timely or not specific," even if the district court believes that the objections "merely rehash arguments presented to and considered by a magistrate judge." Any appeal to a district court based on an objection to a Magistrate Judge’s order will "rehash arguments presented to and considered by" the Magistrate Judge. That is—by definition—the very nature of "review." In SSI appeals, the plain language of 636(b)(1) and the ruling in Goney v. Clark, 749 F.2d 5 (3d Cir. 1984) make clear that the standard district courts should apply to such objections is de novo.

However, the district court's error was held to have been harmless, for the reasons set out below.

Functional capacity - treating physician v. non-examining state agency consultant

The ALJ adequately explained his acceptance of the opinion of a testifying medical expert -- which was based on the opinion of a [non-examining?] state agency consultant, over the opinion of the treating psychiatrist.

Credibility - functional capacity - Here too, the court held that the ALJ decision was supported by substantial evidence. Totally boiler-plate language by the court.

contracts - releases, fraud in the inducement

Mackay v. Donovan - ED Pa. - July 1, 2011

http://www.paed.uscourts.gov/documents/opinions/11D0703P.pdf

Contractual release

A contractual release from litigation is an affirmative defense to a claim against any party to that release.7 That defense is generally asserted by motion for judgment on the pleadings or summary judgment.8 If the movant clearly establishes that there are no material issues of fact, a contractual release from a claim can be a complete defense to the pleadings.9 Releases are construed pursuant to the traditional principles of contract law, and a release that is not obtained by fraud, duress, or mutual mistake is binding between the parties.10 “The fundamental rule in interpreting a contract is to ascertain and give effect to the intent of the contracting parties. . . . The intent of the parties to a written agreement is embodied in the writing itself. . . . When contractual language is clear and unequivocal, its meaning must be determined by its contents alone.”11

Fraud in the Inducement

A release that is obtained by fraud is not binding between the parties.19 In order to state a prima facie case of fraud, a plaintiff must show (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying upon it; (5) justifiable reliance on the misrepresentation; and (6) a resulting injury proximately caused by the reliance.20

--------------------------------

4 Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008); Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005).

5 Allah v. Al-Hafeez, 226 F.3d 247, 249 (3d Cir. 2000).

6 Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir. 2004).

7 Fed. R. Civ. P. 8(c).

8 Straight Arrow Prods. v. Conversion Concepts, Inc., No. 01-221, 2001 WL 1530637, *2 (E.D. Pa. Dec. 3, 2001).

9 Id.

10 Jordan v. SmithKline Beecham, Inc., 958 F. Supp. 1012, 1020 (E.D. Pa. 1997); Black v. Jamison, 913 A.2d 313, 318 (Cmwlth. Ct. 2006); Davis ex. rel. v. Gov’t. Emps. Ins. Co., 775 A.2d 871 (Pa. Super. Ct. 2001).

11 Crawford Cent. Sch. Dist. v. Commonwealth of Pa., 888 A.2d 616, 623 (Pa. 2005)(citation omitted).

19 Cf. Jordan, 958 F. Supp. at 1020; Black, 913 A.2d at 318.

20 Id.

UC - qualifying wages

Nikolova v. UCBR - Cmwlth Court. - July 1, 2011 - unreported memorandum decision

http://www.pacourts.us/OpPosting/Cwealth/out/2638CD10_7-1-11.pdf

Claimant denied benefits because she earned

- $172 less than base year wagesunder the table in sec. 404, 43 PS 804

- $52 less than step-down amount.

and thus did not satisfy financial eligibility requirements, as set out in sec. 401(a), 43 PS 801(a).

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The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.