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Archive for the tag “enforcement”

The Secret Defense to Debt Collection Matters

Unfortunately, many people find themselves in a situation where they get behind on paying their bills and, due to lack of funds, wind up not paying some of them.  Not paying one’s bills will more often than not result in that debt being sold to a collections agency and that agency suing the debtor for payment (and adding on all kinds of things, like interest, attorney’s fees, penalties and the like to boot).

Selling one’s debt to a collection agency is an important step in the process that directly affects the subsequent lawsuit against the debtor.  Typically, large lenders – especially lenders like credit cards companies – have a fair amount of debtors who stop paying (for whatever reason) on the debt owed to the lender which results in their debts being sent to collections.  When these lenders send debts to collections, they do so by selling the debts to a collection agency.  When they sell the debts to a collection agency, they will often sell the debts in bulk, often for pennies on the dollar.  The transaction benefits the creditor as it gets something for the debts owed without having to pursue costly and time consuming litigation.  The transaction benefits the collection agency because it can pursue collection (including law suit) against a debtor for the full amount despite having bought the debt for far less than its principal value, let alone its value inflated by interest and such.

More often than not, when debts are sold to collection agencies, the initial creditor (e.g.: a credit card company) simply provides an affidavit to the collection agency regarding the amount of the debts and the names of those who owe the debts.  Typically, no other document is supplied by the initial creditor to the collection agency, including any contracts with the debtor or anything bearing the signature on the debtor.  Once the collection agency assumes the debt, it has the right to bring suit against the debtor for the unpaid debt.

The lack of documentation of the contract with the debtor is absolutely key to any defense to the collection of the debt.  If the creditor brings suit against the debtor in the Court of Common Pleas and does not attach the contract between the debtor and the creditor which underlies the alleged debt, the debtor can file objections to the complaint (the document which initiates the law suit) asking for it to be dismissed due to the lack of a contract.  I can say, from personal experience, that such a tactic works as, very often, the collection agency pursing the debtor simply does not have the underlying contractual documentation to prove its case against the debtor.

If the case is brought in small claims court, the creditor does not have the obligation to include a copy of the contract to the complaint, so successfully defending against a collections law suit takes some shrewd strategy.  The lack of documentary evidence is still a huge problem for the creditor, but the small claims aspect of this matter makes the approach different and much trickier.  As the complaint does not require the contract to be appended to it, and the primary place for these matters to be resolved is at a hearing before a judge, the creditor has the procedural advantage.  At the hearing, the collection agency, armed with an affidavit from the initial creditor (as described above), secures almost all of the other evidence it needs to win against the debtor through the debtor’s testimony.

Here is how the hearing would play out: the creditor describes the claim to the judge, which is that the debtor had a contract with a credit card company (for example), he did not pay the debt owed, and is now in collections and all of this is supported by the affidavit.  Now, the affidavit, taken alone, is insufficient to win the case as there is no evidence that the debtor actually contracted with the creditor.  So, at the appropriate time during the trial, the creditor will ask the debtor some questions (i.e.: cross-examination).  These questions will be something like: “did you have a credit card from XYZ company on these dates”?  “Did you make charges on it?” “Did you make all the payments on it?”  “Do you owe $XYZ on the credit card?” And other questions like it.  At the end of the examination, the debtor himself provides all of the evidence against himself that the creditor needs to win the case against him.   As a result, the creditor will win the case against the debtor thanks to the debtor supplying all of the evidence, via his testimony, need by the creditor.

So, how does a debtor avoid the fate of the debtor in the above scenario?  That is where a good lawyer comes into play.

Limiting Legal Malpractice Claims: Applying the Glenbrook Analysis

The statue of limitations for a legal malpractice action in Pennsylvania is two years from the date of the malpractice; however that time period may be extended under certain circumstances.  In Glenbrook Leasing Co. v. Beausang, 839 A.2d 437 (Pa. Super. 2003), affirmed, 881 A.2d 1266 (Pa. 2005), the Pennsylvania Superior Court explored the viability of various ways to potentially extend that two year period.

Plaintiff in Glenbrook is a real estate partnership which purchased office space in a condominium development to be used as medical offices.  The agreement of sale for the office space included language granting Plaintiff use (and alleged ownership) of 35 parking spaces.  Nothing was placed in the deed regarding Plaintiff’s ownership of the aforesaid parking spaces.

About six years later, the condominium association took action to limit Plaintiff’s use of the aforesaid 35 parking spaces.  Unsurprisingly, a dispute arose between Plaintiff and the condominium association regarding the ownership and use of the parking spaces, which eventually evolved into litigation.  The litigation culminated in a ruling in favor of the condominium association.  The ruling was based on the merger doctrine, which generally states that any guarantee to be granted in a real estate transaction must be stated in the deed to the subject property.  As applied to the instant matter, Plaintiff was considered not to have any ownership rights over the parking spaces as they were not memorialized in the deed to the property.

When the initial real estate transaction took place, Plaintiff was represented by Defendant, a real estate law firm.  Plaintiff believed that its loss in the litigation against the condominium association, and the resulting loss of the 35 parking spaces, was a direct result of the legal malpractice of Defendant in failing to take into consideration the merger doctrine, and by failing to include language regarding the parking spaces in the deed to the property at issue.  About a year after the conclusion of the litigation against the condominium association, and about six years after the association first presented the issues regarding the deed, and its lack of language dealing with the parking spaces to Plaintiff, the company brought suit against Defendant law firm, claiming it committed legal malpractice.

Defendant ultimately filed a motion for summary judgement, claiming that Plaintiff brought suit far beyond the two year statute of limitations.  The trial court ruled in favor of Defendant.  On appeal, the Superior Court affirmed the trial court’s ruling, and the Supreme Court issued a per curiam order affirming the Superior Court’s ruling.  It is the Superior Court’s opinion that is the subject of this article.

While the statue of limitation in a legal malpractice claim is two years, that period can be extended via the equitable discovery rule which sates that the two years is initiated not at the occurrence of the malpractice, but when it was, or should have been, discovered.  The Court ruled that Plaintiff discovered, or should have discovered, that there may have been legal malpractice six years before it initiated suit against Defendant (or four years longer than the two year statute allows) when the dispute with the condominium association first arose.

Plaintiff then argued that the Court should apply the “continuous representation rule” which states that the limitations period would not begin to run until plaintiff terminated Defendant’s services.  The Court was unmoved by Plaintiff’s argument to extend the legal malpractice statute of limitations based on the continuous representation rule.  The Court noted that the rule was not the law of Pennsylvania (although it is in other jurisdictions) and it is not the place of the Superior Court to adopt new rules without authority to do so.

Plaintiff next argued that the limitations period should be extended through estoppel, asserting that the “special relationship” between a lawyer and his client lulled Plaintiff into a false sense of security, through fraud, or deception, or concealment, to trust Defendant beyond when it would have been prudent to do so.  This sort of argument has traction among physicians and patients and Plaintiff attempted here to apply it to attorneys and clients.  The Court rejected this argument as well, as it found Defendant was completely candid with Plaintiff regarding the claims made by the condominium association, including providing Plaintiff with the first allegation of their own malpractice nearly six years prior to Plaintiff’s bringing suit.

Finally, Plaintiff argued that the question of precisely when it discovered the malpractice is a question of fact that should have been decided by a jury, not via a motion for summary judgement.  The Court rejected this argument as well, ruling that the facts in this matter were abundantly clear as to when Plaintiff discovered the malpractice.

The statute of limitations is critical to be aware of when considering bringing suit.  Although the Court made a variety of rulings, as described above, it is significant and useful in that it lays out some guidelines as to how to apply the various means to extend the statute of limitations and notably refuses to adopt and apply the continuous representation rule.

Originally published in Upon Further Review on September 24, 2015 and can be seen here.

US Supreme Court Weighs in on Threats Over Social Media

The new reality of social interaction includes the popular, and seemingly always proliferating, social media websites like Facebook and Twitter.  Considering the increasing ubiquity of social media, it was only a matter of time before the United States Supreme Court would weigh in on its use, which it had opportunity to do in the matter of Anthony Douglas Elonis v. United States, 135 S.Ct. 2001 (2015).

 

In the Elonis matter, the petitioner Anthony Douglas Elonis’s wife left him in May 2010, taking their children with her.  Following their separation, Mr. Elonis began listening to “violent music” and posting so-called “rap lyrics” to his Facebook page.  Eventually he changed his name on his Facebook profile to “Tone Dougie,” a rap-style nom de plume, in order to create an “on-line persona.”  His rap lyrics contained rather violent and graphic language but did contain a disclaimer that his lyrics were fictions with no intentional resemblance to real persons.  He also said on Facebook that he writes these lyrics, and other such posts, as a form of therapy for himself to deal with the pain of the breakup of his family.

 

Unfortunately for Mr. Elonis, people who viewed his Facebook posts did not seem to appreciate his therapeutic efforts.  Evidently, after the Halloween following his separation, Mr. Elonis posted a photograph of himself from a Halloween event at his place of employ holding a toy knife to his co-worker’s throat, accompanied by a caption reading “I wish.”  Mr. Elonis was fired by his employer for this post due to its violent and threatening nature regarding his co-worker.

 

Mr. Elonis responded to his termination from employment at an amusement park with the following Facebook post: “Moles! Didn’t I tell y’all I had several? Y’all sayin’ I had access to keys for all the f***in’ gates. That I have sinister plans for all my friends and must have taken home a couple. Y’all think it’s too dark and foggy to secure your facility from a man as mad as me? You see, even without a paycheck, I’m still the main attraction. Whoever thought the Halloween Haunt could be so f***in’ scary?””  This post formed the basis for the first count of his criminal indictment for threatening park patrons and employees.

 

In addition to the above, Mr. Elonis also posted crude, demeaning, and violent material regarding his ex-wife, including a long post adapting a comedian’s sketch about how to avoid overtly saying one wishes to kill the president to a post of similar content about killing one’s wife.  In the post he included accurate details about his ex-wife’s home and rhetorically asked whether the reader is willing to “go to jail for [one’s] Constitutional rights.”

 

Upon seeing the above-mentioned post, his ex-wife began to fear for her life and secured a protection order against Mr. Elonis.  In response Mr. Elonis posted on Facebook what appeared to be lyrics or poetry contemplating whether a protection order could stop a bullet and suggested blowing up a police department with a bomb.  This post formed the basis of two more counts of his criminal indictment.  The fourth count of Mr. Elonis’s criminal indictment flowed from a subsequent Facebook post regarding potentially mass killing a local kindergarten class.  After the FBI investigated the aforesaid post, Mr. Elonis followed it up with what formed the basis of the fifth count of his criminal indictment, namely a post threatening the life of FBI agents (though none by name).

 

Mr. Elonis was eventually indicted for making threats to injure patrons and employees of the park, his estranged wife, police officers, a kindergarten class, and an FBI agent.  All of these threats were in violation of 18 U.S.C. Section 875(c) which states “[w]hoever transmits in interstate or foreign commerce any communication containing any threat to kidnap any person or any threat to injure the person of another, shall be fined under this title or imprisoned not more than five years, or both.”

 

Mr. Elonis filed a motion to dismiss the indictment on the basis that none of the charges against him contained any allegation that he intended to threaten anyone.  The District Court (his matter originated in the Eastern District of Pennsylvania) denied the motion.  At the trial for the charges Mr. Elonis testified that his posts were emulating rap lyrics (especially those of Eminem who also penned lyrics about killing his wife) and, therefore, were made without any intent to threaten anyone.  The prosecution presented witnesses who testified that they felt threatened and in fear of injury.  At the conclusion of the trial, Mr. Elonis’ requested that the jury be instructed that in order for him to be convicted the prosecution must prove he had an intention to threaten.  His request was denied.  Ultimately, Mr. Elonis was sentenced to three years and eight months’ incarceration and three years’ suspended release.  Mr. Elonis then appealed his conviction to the Court of Appeals of the Third Circuit which upheld the conviction and ruled that the intent suggested by Mr. Elonis was not required by the law.  Mr. Elonis then appealed to the United States Supreme Court, and it is that Court’s decision that is the subject of this article.

 

Mr. Elonis argued to the Supreme Court that the term “threat” necessarily implies an intention to inflict harm.  Unpersuaded, the Court pointed out that the definition of “threat” proffered by Mr. Elonis speaks to the message conveyed by the threatening statement and not the mental state of the speaker.  The government noted that the other crimes in the statutes neighboring 18 U.S.C. Section 875(c) all explicitly include a mental state in their terms which suggests that the legislature intentionally left such a provision out of 18 U.S.C. Section 875(c) and, therefore, no mental state is required for conviction under this section.  The Court was unpersuaded by this argument as well indicating that all that could be concluded is that Congress laid out a broad class of crimes but simply did not include what mental state, if any, is required for conviction.  Based on the above, the Court observed that neither party sufficiently identified any indication of any particular mental state required by 18 U.S.C. Section 875(c).  Despite this, the Court recognized that any crime must carry with it some conscious action (e.g.: mens rea) and that the mere omission of a mental state from 18 U.S.C. Section 875(c) does not mean none exists.

 

After a review of the applicable case law, the Court concluded that when a criminal statute is silent on mental state, the only mens rea that can be read into it is only that which is enough to separate wrongful conduct from innocent conduct as applied to each element of the crime.  Furthermore, the Court ruled that the mental state requirement, relative to Mr. Elonis’ case, must apply to whether the communication itself contains an actual threat.  By contrast, Mr. Elonis’ conviction was based solely upon how his posts would be perceived by a reasonable person.  As a result, the Court rejected the government’s argument for a mental state closer to negligence (i.e.: “reasonable person”) as well as Mr. Elonis’ argument from ignorance asserting that he could not be convicted unless it was shown he knew the posts could be characterized as threatening.

 

Ultimately the Court reversed Mr. Elonis’ conviction.  The Court held that the jury instructions mentioned above were insufficient.  There must be something more than the prosecution merely proving that a reasonable person could regard Mr. Elonis’ posts as threats.  Instead, there must be an instruction indicating that a mental state for Mr. Elonis is necessary for conviction.  The Court was confident that the mental state requirement would be satisfied if it could be shown that Mr. Elonis knew that his posts could be understood to be a threat and/or were posted to be threatening.  Although the Court rejected a negligence standard, as noted above, the Court declined to rule whether a recklessness standard would be sufficient to convict for the crime at issue herein as that issue was not raised by the parties until oral argument and briefly at that.  The Court was reluctant to be the first tribunal to rule on the issue and, instead, opted to allow the lower courts to initially look at the issue.  Consequently, the Court also remanded Mr. Elonis’ case for further proceedings per the Court’s ruling.

Originally published on August 25, 2015 in The Legal Intelligencer and can be seen here.

Ripeness Spoils Church’s Efforts

In the matter of Shenkel United Church of Christ v. North Coventry Township, 2009 WL 3806769, Shenkel United Church of Christ (“the Church”), has recently found its efforts to fight homelessness spoiled by the doctrine of ripeness.
In order to fulfill its Biblical mandate to care for the needy among us, the Church, for several years, participated in a Montgomery County run program called “One Night at a Time”. “One Night at a Time” helped homeless persons find shelter for one (1) month during the winter. For a reason unrelated to the case discussed herein, in 2005 Montgomery County discontinued the “One Night at a Time” program. Instead, Montgomery County directed its homeless population to a local state hospital. Unfortunately, it became apparent that the local state hospital was inadequate to meet the needs of the County’s efforts against homelessness, as overcrowding became a persistent problem. In 2007, in response to the continued homelessness problems in Montgomery County, and the overcrowding of the state hospital, a Christian organization, called Ministries for Main Street, was formed to help combat homelessness. The services offered by Ministries for Main Street were, in essence, the same as those offered by the “One Night at a Time” program. As the Church was an active participant with the “One Night at a Time” program, it attempted to similarly participate in Ministries for Main Street.
Before participating in Ministries for Main Street, the Church dutifully notified North Coventry Township (hereinafter “the Township”) of its intention to do so toward the end of 2007. Although the Township had no objection to the Church’s participation in “One Night at a Time” two (2) years previous, the Township now, suddenly, objected to the Church’s participation in Ministries for Main Street, even though the Church was to provide the same services as before. The Township’s objection primarily revolved around its allegation that the Church’s efforts with Ministries for Main Street would violate both the Township’s zoning laws and building codes. Specifically, the Church was zoned for assembly purposes, and not as a residence as required to house the homeless even temporarily. Additionally, the Township’s Fire Marshall sent a letter to the Church informing it that, considering the Church’s present zoning, it could not contain sleeping facilities pursuant to the applicable fire safety requirements. As a result of the clear resistance of the Township, the Church elected not to participate in the Ministries for Main Street program. The Township subsequently indicated to the Church that if the Church was interested in participating in the Ministries for Main Street program, it would need to apply for a variance from the zoning and/or building and/or fire codes.
Instead of requesting a variance, in October 2008 the Church elected to file an application with the Township’s Zoning Hearing Board, requesting a determination that it did not need a variance to participate in the Ministries for Main Street program. After a number of postponements, and unsuccessful negotiations with the Township, the Church withdrew its aforesaid application. Instead, the Church elected to pursue its goals through litigation and brought suit against the Township alleging the Township had violated the Religious Land Use and Institutionalized Persons Act, the Pennsylvania Religious Freedom Protection Act, and the Free Exercise Clause of the First Amendment of the United States Constitution.
In reaching its decision, the Court never addressed the substantive allegations made by the Church. Instead, the Court refocused the matter onto whether the matter is, ultimately, a land use issue. Consequently, the Court focused on whether the Church’s claims against the Township were ripe in the context of a land use matter. When enunciating the standard for ripeness, the Court cited to Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985) and Murphy v. New Milford Zoing Commission, 402 F.3d 342 (2nd Cir. 2005). In order to determine whether a matter is ripe when a land use issues arises from constitutional claims, such as the matter discussed herein, “the government entity charged with implementing the regulations [must reach] a final decision regarding the application of the regulations to the property at issue.” See Williamson. Based on the preceding, when applying the standard for ripeness, the Court investigated into whether the Township’s “decision maker”, in this case the Zoning Hearing Board, had reached a definitive position on the salient issues. It is only upon the Zoning Hearing Board’s having reached an adverse decision against a land owner, in this case the Church, that a land owner is inflicted with an actual and recoverable injury which can serve as the basis for a civil action. The Court developed the above standard because it did not to want the Court to devolve into becoming a glorified land use board dealing with effectively local issues. It wanted to ensure that the local zoning boards would be the primary places where land use issues, such as the one in the matter at hand, are dealt with and resolved. Indeed, the Court specifically indicated its belief that the local boards are in a better position to make local decisions than the Court. Therefore, an issue is only ripe if a final decision is rendered by the local authority and/or it can be proven that the pursuit of a variance would be a futile effort.
The Church argued that the above enunciated ripeness standard ought not apply; it argued, instead, that the instant matter is not about land use and, therefore, another ripeness standard should apply. To that end, the Church argued that the standard laid out in Step-Saver Data Systems, Inc. v. Wyse Technology, 912 F.2d 643 (3rd Cir. 1990) was the appropriate standard by which the Court should render its decision. The key distinction between the standard laid out above, and the standard established in Step-Saver Data Systems, Inc., is that the matter at issue in Step-Saver Data Systems, Inc. took place in the context of a declaratory judgment as opposed to the context of a land use matter. Under Step-Saver Data Systems, Inc., the analysis would be to determine whether: (1) the parties’ interests are sufficiently adverse; (2) the court can issue a conclusive ruling in light of potentially evolving factual developments; and (3) the decision will render practical help the parties. The Church asserted that the instant matter was, in fact, a declaratory judgment matter as it was seeking declaratory and/or injunctive relief of a pre-enforcement matter.
When rendering its decision, the Court simply did not find the Church’s arguments, or the cases it cited in support of the same, persuasive in the face of the Township’s assertion that the matter is, at its core, a land use matter. Specifically, the Court stated that since the Church’s action against the Township centered directly upon how the Township’s Zoning Officer and Fire Marshall applied the zoning regulations to the Church’s proposed use of its land; based upon this, the Court indicated, it was clear that the matter was, at its core, a land use matter as opposed to some sort of declaratory judgment matter. To sum up its rationale, the Court explained that “[s]ince the Church has not stated a facial challenge to the Township ordinances, the Church is essentially asking this Court to rule on the application of those ordinances before the Township itself has had the opportunity to do so.” A question of the application of ordinances for the use of land is, therefore by definition, a land use matter and the Williamson standard applies. It is worth noting that the Court mentioned, as dictum, that it may not have reached a different decision even if it used the cases the Church citied to in support of its position. How that would play out, of course, may never be known.
Allowing the matter to proceed to ripeness has a fourfold positive effect on a matter such as the one discussed herein. First, it allows for the local authority to render a decision and develop a complete record. Second, it is only after the pursuit of the variance process will the property owner, and the court by extension, know how the ordinances will be applied. Third, the variance needed may actually be granted which would, of course, eliminate the need for judicial entanglement into the affairs of a church. Fourth, it reinforces a basic federal principle that land use disputes are uniquely a matter of local concern as opposed to that of a Court.
The Court ultimately decided that the Church’s matter was simply not ripe enough to hear at this time. The Court noted that as the Church failed to pursue a variance, withdrew is application to the zoning board wherein it asserted that it did not need an application, and never pursued any sort of appeal of the Zoning Board or Fire Marshall’s decisions, that the Church never let the matter reach any decision at any level previous to bringing a civil action. Due to these decisions made by the Church, the Court ruled that the Church never permitted its matter to ripen sufficiently to warrant the engagement of the Court in such a matter.
In the final analysis, the central matter in this case is whether the question at issue is a land use matter or a declaratory judgment matter. For the reasons noted above, the Court decided it was a land use matter and that the Church did not permit the matter to sufficiently ripen to warrant a civil action. The principle to take away from the decision discussed herein is that, when dealing with a land use issue, all local administrative remedies must be exhausted before initiating a civil action.
Finally, one of the issues never addressed by the decision discussed herein, and one that this author thinks is rather peculiar, is why the Church was permitted to house the homeless when it participated “One Night at a Time” program but not permitted to do the same in the Ministries for Main Street program, even though the Church’s facilities were substantially the same at all times material to the case. This clearly apparent, unexplainable, and seemingly arbitrary change in the Township’s policy toward the Church seems to this author to involve more than just a land use issue; in actuality, it would seem that the religious freedom of a Church to achieve its social goals in the community is at issue. Perhaps if further investigation was done to determine why the Church was suddenly restricted from performing a service it performed for many years without the Township’s interference, a fresh perspective on whether the matter was actually ripe could have stopped the spoiling of the Church’s efforts to combat homelessness.

This article also appeared in the Philadelphia Bar Association’s “Upon Further Review” on October 8, 2010 and can also be found here on my website.

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