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.
Thursday, July 26, 2007
Monday, July 23, 2007
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
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
Wednesday, July 18, 2007
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.
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.
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.
Tuesday, July 17, 2007
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).
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.
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.
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)
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
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
Tuesday, July 10, 2007
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."
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."
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."
Monday, July 02, 2007
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.
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.
Tuesday, June 26, 2007
UC- voluntary quit - voluntary retirement program
Davila v. UCBR - Commonwealth Court - June 26, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/255CD07_6-26-07.pdf
A Claimant who quit her job pursuant to requirements of a voluntary retirement program did not have good cause to leave her job, where continuing work was available and she was not in danger of losing her job. The fact that the program required her to retire did not constitute good cause, since she entered the program voluntarily.
http://www.courts.state.pa.us/OpPosting/CWealth/out/255CD07_6-26-07.pdf
A Claimant who quit her job pursuant to requirements of a voluntary retirement program did not have good cause to leave her job, where continuing work was available and she was not in danger of losing her job. The fact that the program required her to retire did not constitute good cause, since she entered the program voluntarily.
Monday, June 25, 2007
UC - voluntary quit - childcare
Shaffer v. UCBR - Commonwealth Court - June 25, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/119CD07_6-25-07.pdf
Claimant held not to have proved a necessitous and compelling reason to quit her job when her employer moved its operations, thus increasing her commuting time and causing the loss of her parents' help with childcare. The court said that the claimantdid not "establish that she exhausted all other alternative arrangements, such as making a concerted effort to find another baby-sitter or locate a suitable day care center." (emphasis added)
Her testimony showed that she "investigated only one daycare facility" and "did not offer evidence that she looked in any other childcare arrangements" or that she properly explored alternative arrangements for her old son's before and after school care. (emphasis in original). The claimant "did not establish that she made a concerted effort to find alternative childcare arrangements." (emphasis added)
http://www.courts.state.pa.us/OpPosting/CWealth/out/119CD07_6-25-07.pdf
Claimant held not to have proved a necessitous and compelling reason to quit her job when her employer moved its operations, thus increasing her commuting time and causing the loss of her parents' help with childcare. The court said that the claimantdid not "establish that she exhausted all other alternative arrangements, such as making a concerted effort to find another baby-sitter or locate a suitable day care center." (emphasis added)
Her testimony showed that she "investigated only one daycare facility" and "did not offer evidence that she looked in any other childcare arrangements" or that she properly explored alternative arrangements for her old son's before and after school care. (emphasis in original). The claimant "did not establish that she made a concerted effort to find alternative childcare arrangements." (emphasis added)
Friday, June 22, 2007
consumer - floating forum selection clause
Susquehanna Patriot Commcl. Leasing Co. v. Holper Industries, Inc. - Super. Ct. - June 12, 2007
http://www.courts.state.pa.us/OpPosting/Superior/out/a24021_06.pdf
A "floating" forum selection clause (FFSC) in contracts concerning equipment leases was held to be enforceable under Pennsylvania law., under the general principles set out in Patriot Commcl. Leasing Co. v. Kremer Restaurant, 915 A2d 647 (Pa. Super. 2006) http://www.courts.state.pa.us/OpPosting/Superior/out/A24012_06.pdf posted and discussed in the PLAN Updates in January 2007.
The equipment was advertised by the lessor, NorVergence, as providing 30%-60% savings to the lessees, through the use of a specific device. In fact, the device was not capable of providing any reduced savings and was worth a fraction of its selling price. Immediately after the lease-contracts were consummated, NorVergence assigned them to 3rd party finance companies, including appellant. The original lease said that the money on the rental agreements was owed regardless of whether NorVergence provided the promised services. After collecting millions on the assignments, NorVergence declared bankruptcy. The lessees stopped making payments to the assignees, who then sued in Pennsylvania on leases executed by small business entities in New Jersey and Maryland.
After setting out the split of authority regarding the enforceability of the FFSC and the difficulty in disassociating the "obvious and egregious fraud" used to procure these leases from the analysis of whether to uphold the FFSC, the court upheld them in these cases, noting the "in the interest of judicial uniformity, all cases must be analyzed in accordance with overriding principles of law that cannot depend upon facts not implicated in the application on those principles. We must confine ourselves accordingly."
The court in Patriot Commercial Leasing held that where the parties have freely agreed to a forum selection clause, which was not unreasonable at the time, it will only be held unreasonable where its enforcement, under all of the circumstances, would seriously impair a party's ability to pursue its case. Here, the defendants are in states which border Pennsylvania; and many of them have the same attorney; many of their claims can be heard in the same proceeding.
There has been "nationwide litigation, including litigation by various state attorneys general and the FTC about this issue, concerning leases negotiated by NorVergence, which assigned various leases for telecommunications equipment to Appellant Susquehanna PCL. See, http://www.attorneygeneral.gov/consumers.aspx? and http://www.ftc.gov/opa/2005/07/norvergence.shtm
http://www.courts.state.pa.us/OpPosting/Superior/out/a24021_06.pdf
A "floating" forum selection clause (FFSC) in contracts concerning equipment leases was held to be enforceable under Pennsylvania law., under the general principles set out in Patriot Commcl. Leasing Co. v. Kremer Restaurant, 915 A2d 647 (Pa. Super. 2006) http://www.courts.state.pa.us/OpPosting/Superior/out/A24012_06.pdf posted and discussed in the PLAN Updates in January 2007.
The equipment was advertised by the lessor, NorVergence, as providing 30%-60% savings to the lessees, through the use of a specific device. In fact, the device was not capable of providing any reduced savings and was worth a fraction of its selling price. Immediately after the lease-contracts were consummated, NorVergence assigned them to 3rd party finance companies, including appellant. The original lease said that the money on the rental agreements was owed regardless of whether NorVergence provided the promised services. After collecting millions on the assignments, NorVergence declared bankruptcy. The lessees stopped making payments to the assignees, who then sued in Pennsylvania on leases executed by small business entities in New Jersey and Maryland.
After setting out the split of authority regarding the enforceability of the FFSC and the difficulty in disassociating the "obvious and egregious fraud" used to procure these leases from the analysis of whether to uphold the FFSC, the court upheld them in these cases, noting the "in the interest of judicial uniformity, all cases must be analyzed in accordance with overriding principles of law that cannot depend upon facts not implicated in the application on those principles. We must confine ourselves accordingly."
The court in Patriot Commercial Leasing held that where the parties have freely agreed to a forum selection clause, which was not unreasonable at the time, it will only be held unreasonable where its enforcement, under all of the circumstances, would seriously impair a party's ability to pursue its case. Here, the defendants are in states which border Pennsylvania; and many of them have the same attorney; many of their claims can be heard in the same proceeding.
There has been "nationwide litigation, including litigation by various state attorneys general and the FTC about this issue, concerning leases negotiated by NorVergence, which assigned various leases for telecommunications equipment to Appellant Susquehanna PCL. See, http://www.attorneygeneral.gov/consumers.aspx? and http://www.ftc.gov/opa/2005/07/norvergence.shtm
Tuesday, June 19, 2007
real property - tax sale - notice - new sale
Willard v. Delaward Co. Tax Claim Bureau - April 276, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/1319CD06_4-26-07.pdf
Record owners of property listed but then removed from one judicial tax sale, then relisted for another sale, must get new , separate notice of the second sale. The second sale is not merely a continuation of the original sale. There is no provision in the Real Estate Tax Sale Law for the concept of a "continued" judicial sale.
http://www.courts.state.pa.us/OpPosting/CWealth/out/1319CD06_4-26-07.pdf
Record owners of property listed but then removed from one judicial tax sale, then relisted for another sale, must get new , separate notice of the second sale. The second sale is not merely a continuation of the original sale. There is no provision in the Real Estate Tax Sale Law for the concept of a "continued" judicial sale.
real estate - tax assessment - appeal - base year value v. current market value
Daugherty v. County of Allegheny - Commonwealth Court - March 27, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/1777CD06_3-27-07.pdf
County Board of Assessment lacked the statutory authority to limit assessment appeals to challenge to base year market value, rather than challenge that assessment exceeds current market value.
http://www.courts.state.pa.us/OpPosting/CWealth/out/1777CD06_3-27-07.pdf
County Board of Assessment lacked the statutory authority to limit assessment appeals to challenge to base year market value, rather than challenge that assessment exceeds current market value.
mortgage foreclosure - predatory loan - arbitration - limitation of consumer judicial remedies
Salley v. Option One Mortgage Corp. - Pa. Supreme Court - May 31, 2007 majority
http://www.courts.state.pa.us/OpPosting/Supreme/out/J-34-2006mo.pdf dissent http://www.courts.state.pa.us/OpPosting/Supreme/out/J-34-2006do.pdf
In a case arising from a federal court's certification of the question to the state supreme court, the state court held that an arbitration agreement consummated in connection with a residential mortgage loan which limited a consumer's judicial remedies related to foreclosure is not presumptively unconscionable. The exceptions from arbitration involved creditor remedies exclusively, including: foreclosure; self-help remedies (such as repossession); and ancillary remedies such as sequestration, attachment, replevin, and garnishment.
The federal suit arose in the context of a consumer suit "asserting violation of various mortgage-regulation and consumer-protection laws by a sub-prime lender, i.e., a financial institution affording higher-interest loans to consumer with impaired credit histories."
The court apparently accepted the holding in Harris v. Green Tree Financial Corp., 183 F.3d 173 (3d Cir. 1999), interpreting Pa. law to be that the mere fact that the lender retains the option to litigate some issues in court, while the consumer must arbitrate all claims does not make the arbitration agreement unenforceable.
Although the court did not say that it was overruling the decision, only that it "swept too broadly," the court apparently rejected Lytle v. CitiFinancial Services, Inc. 810 A.2d 643 (Pa. Super. 2002), which had held that "under Pennsylvania law, the reservation by [a financial institution] of access to the courts for itself to the exclusion of the consumer creates a presumption of unconscionability."
The case also involved the Federal Arbitration Act, 9 USC 2, which expresses a liberal federal policy favoring arbitration agreements. The FAA was meant to "overcome state legislative and judicial efforts to undermine the enforceability of arbitration agreements, inter alia, by establishing a substantive rule of federal law placing such agreements upon the same footing as other contracts." In Prima Paint Corp v. Flood & Conklin Mfg. Co., 388 US 395, 404 (1967) and Buckeye Check Cashing, Inc. v. Cardegna, 546 US 440 (2006), the Supreme Court "has determined that a challenge to the validity of a contract as a whole, and not specificlaly to an arbitration clause, must be presented to the arbitrator and not the courts....The courts may consider, in the first instnace, only those challenges that are directed solely to the arbitration component itself."
The court rejected the argument about the effect of a split-forum, that is, the consumer having "to litigate nearly identical statutory claims twice, one in state court against he foreclosing entity (to whom the loan has been sold/assigned in a secondary market), and a second time in an arbitral forum against....the lender."
Thus, it said that "although this Court is cognizant of the phenomenon of predatory lending and its deleterious effects, because those asserted aspects of this case go to not only the arbitration agreement but also to the underlying merits of the parties' larger dispute, we believe that any relevant contentions in this regard are for an arbitrator in the first instance, under the rationale set forth in the Prima Paint/Buckeye line of decisions."
However, the court did not entirely foreclose the consumer's arguments, noting that it had "taken care...not to exclude the possibility that the arbitration agreement might otherwise be deemed to be unconscionable under Pennsylvania law if [the plaintff's] predatory lending claims are proven, since we have little doubt concerning the unreasonableness of such an adhesion agreement when used as a tool of established predatory lending."
The court also noted "a substantial level of procedural unconscionability present in the sub-prime lending industry, as it employs adhesion contracts and, by design, targets those with few financial choices. Procedural unconscionability would be particularly high in the present case if various of the facts asserted by [the plaintiff], such as lender non-disclosure and dishonesty in the application and settlement process, are true. Furthermore, [the lender] does not deny that its agreement with [the consumer] was one of adhesion. Nevertheless, merely because a contract is one of adhesion does not render it unconscionable and unenforceable as a matter of law."
The court relied heavily on a New Jersey case, Delta Funding Corp. v. Harris, 912 A.2d 104 (NJ 2006)
The consumer-plaintiff waived several important arguments presented by his amici, including whether the costs of arbitration would be prohibitively expensive.
Justice Baldwin, dissenting, argued that a) the majority would have an arbitrator rather than the court decide the important question of unconscionability, and b) that the consumer's was attacking the arbitration clause, not the contract as a whole. She suggested that the court follow contrary decisions from Wisconsin, Tennessee, West Virginia and California in finding that "one-sided arbitration agreements are unconscionable and void."
http://www.courts.state.pa.us/OpPosting/Supreme/out/J-34-2006mo.pdf dissent http://www.courts.state.pa.us/OpPosting/Supreme/out/J-34-2006do.pdf
In a case arising from a federal court's certification of the question to the state supreme court, the state court held that an arbitration agreement consummated in connection with a residential mortgage loan which limited a consumer's judicial remedies related to foreclosure is not presumptively unconscionable. The exceptions from arbitration involved creditor remedies exclusively, including: foreclosure; self-help remedies (such as repossession); and ancillary remedies such as sequestration, attachment, replevin, and garnishment.
The federal suit arose in the context of a consumer suit "asserting violation of various mortgage-regulation and consumer-protection laws by a sub-prime lender, i.e., a financial institution affording higher-interest loans to consumer with impaired credit histories."
The court apparently accepted the holding in Harris v. Green Tree Financial Corp., 183 F.3d 173 (3d Cir. 1999), interpreting Pa. law to be that the mere fact that the lender retains the option to litigate some issues in court, while the consumer must arbitrate all claims does not make the arbitration agreement unenforceable.
Although the court did not say that it was overruling the decision, only that it "swept too broadly," the court apparently rejected Lytle v. CitiFinancial Services, Inc. 810 A.2d 643 (Pa. Super. 2002), which had held that "under Pennsylvania law, the reservation by [a financial institution] of access to the courts for itself to the exclusion of the consumer creates a presumption of unconscionability."
The case also involved the Federal Arbitration Act, 9 USC 2, which expresses a liberal federal policy favoring arbitration agreements. The FAA was meant to "overcome state legislative and judicial efforts to undermine the enforceability of arbitration agreements, inter alia, by establishing a substantive rule of federal law placing such agreements upon the same footing as other contracts." In Prima Paint Corp v. Flood & Conklin Mfg. Co., 388 US 395, 404 (1967) and Buckeye Check Cashing, Inc. v. Cardegna, 546 US 440 (2006), the Supreme Court "has determined that a challenge to the validity of a contract as a whole, and not specificlaly to an arbitration clause, must be presented to the arbitrator and not the courts....The courts may consider, in the first instnace, only those challenges that are directed solely to the arbitration component itself."
The court rejected the argument about the effect of a split-forum, that is, the consumer having "to litigate nearly identical statutory claims twice, one in state court against he foreclosing entity (to whom the loan has been sold/assigned in a secondary market), and a second time in an arbitral forum against....the lender."
Thus, it said that "although this Court is cognizant of the phenomenon of predatory lending and its deleterious effects, because those asserted aspects of this case go to not only the arbitration agreement but also to the underlying merits of the parties' larger dispute, we believe that any relevant contentions in this regard are for an arbitrator in the first instance, under the rationale set forth in the Prima Paint/Buckeye line of decisions."
However, the court did not entirely foreclose the consumer's arguments, noting that it had "taken care...not to exclude the possibility that the arbitration agreement might otherwise be deemed to be unconscionable under Pennsylvania law if [the plaintff's] predatory lending claims are proven, since we have little doubt concerning the unreasonableness of such an adhesion agreement when used as a tool of established predatory lending."
The court also noted "a substantial level of procedural unconscionability present in the sub-prime lending industry, as it employs adhesion contracts and, by design, targets those with few financial choices. Procedural unconscionability would be particularly high in the present case if various of the facts asserted by [the plaintiff], such as lender non-disclosure and dishonesty in the application and settlement process, are true. Furthermore, [the lender] does not deny that its agreement with [the consumer] was one of adhesion. Nevertheless, merely because a contract is one of adhesion does not render it unconscionable and unenforceable as a matter of law."
The court relied heavily on a New Jersey case, Delta Funding Corp. v. Harris, 912 A.2d 104 (NJ 2006)
The consumer-plaintiff waived several important arguments presented by his amici, including whether the costs of arbitration would be prohibitively expensive.
Justice Baldwin, dissenting, argued that a) the majority would have an arbitrator rather than the court decide the important question of unconscionability, and b) that the consumer's was attacking the arbitration clause, not the contract as a whole. She suggested that the court follow contrary decisions from Wisconsin, Tennessee, West Virginia and California in finding that "one-sided arbitration agreements are unconscionable and void."
Wednesday, June 13, 2007
Truth-in-Lending - "tolerance for accuracy" not an affirmative defense
Sterten v. Option One Mortgage Corp. - ED Pa. - March 22, 2007
http://www.paed.uscourts.gov/documents/opinions/07d0409p.pdf
The "tolerance for accuracy" provision of the Truth in Lending Act, 15 USC 1605(f), is not an affirmative defense under Rule 8(c) of the Federal Rules of Civil Procedure.
Where the creditor made it clear in the pleadings that the discrepancy in the finance charge ($57) came within the $100 limit of sec. 1605(f) of the TILA, the notice policies of the federal rules was satisfied. Section 1605(f) "defines the parameters of an element of the TILA violation. It does not create a defense. Only if the total of the improper finance charges exceeds $100 is there a violation." Where as here the discrepancy was less thatn $100, there is no statutory violation.
The federal rules "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits."
http://www.paed.uscourts.gov/documents/opinions/07d0409p.pdf
The "tolerance for accuracy" provision of the Truth in Lending Act, 15 USC 1605(f), is not an affirmative defense under Rule 8(c) of the Federal Rules of Civil Procedure.
Where the creditor made it clear in the pleadings that the discrepancy in the finance charge ($57) came within the $100 limit of sec. 1605(f) of the TILA, the notice policies of the federal rules was satisfied. Section 1605(f) "defines the parameters of an element of the TILA violation. It does not create a defense. Only if the total of the improper finance charges exceeds $100 is there a violation." Where as here the discrepancy was less thatn $100, there is no statutory violation.
The federal rules "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits."
Tuesday, June 12, 2007
civil procedure - prothonotary - duty to accept pleadings
Sollenberger v. Lee, Prothonotary - Commonwealth Court - June 8, 2007
http://www.courts.state.pa.us/OpPosting/CWealth/out/82CD07_6-8-07.pdf
"The prothonorary is not an administrative officer who has the discretion to interpret or implement rules or statutes....Therefore if documents tendered for filing are proper on their face and in conformity with rules of court, a prothonotary does not have the discretion to refuse to enter them...."
http://www.courts.state.pa.us/OpPosting/CWealth/out/82CD07_6-8-07.pdf
"The prothonorary is not an administrative officer who has the discretion to interpret or implement rules or statutes....Therefore if documents tendered for filing are proper on their face and in conformity with rules of court, a prothonotary does not have the discretion to refuse to enter them...."
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