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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.

A Primary Custodian Support Obligor

It is practically axiomatic among family law practitioners that he who has primary child custody is entitled to receive child support. There can be exceptions to this practice, such as the case decided by the Pennsylvania Supreme Court captioned as Colonna v. Colonna, 581 Pa. 1.


The parties in Colonna were married in 1983 but separated in 1999, having had four children in the interim. Ultimately, the Father secured primary custody of their four children and filed for child support against the Mother. Through the support litigation, it was discovered that Father earns about $193,560/yr and Mother earns about $55,284/yr.


Surprisingly, although it was Father, as primary custodian of the children, who was seeking support, the Support Master ultimately ruled he had to pay support to their Mother. After exceptions were filed by both parties, the trial court agreed that Father had to pay child support to Mother despite being primary custodian. Father appealed and Superior Court reversed the court below, ruling that Mother was to pay Father child support as he is primary custodian. Needless to say, an appeal was made to the Pennsylvania Supreme Court which reestablished father as the obligor despite him being primary custodian.


The Supreme Court was very troubled by the great disparity of incomes between the parents. The Court indicated that when incomes are as different as the parents’ income in Colonna, a deviation from the standard child support guidelines is appropriate, citing the “best interests of the children” as the rationale for requiring the deviation. The deviation from the guidelines extends so far, in a case like this, that someone who would otherwise be an obligor suddenly becomes an obligee. The Court believed that support law should work in conjunction with custody law to pursue the best interests of children as opposed to simply work exclusively and mechanically by the numbers.


The Court believed the best interests of the children is significantly impacted when the income of the parents are significantly different, and that one parent will not be able to provide an environment that is reasonably close to the one the other parent can provide. The Court asserted that, although it does not require a support order to equalize the two parents, it “would be remiss in failing to ignore the reality of what happens when children are required to live vastly different lives depending upon which parent has custody on any given day.” Based on the above, the Court ruled that it is an abuse of discretion to fail to consider vast income differences when deciding whether to deviate from the child support guidelines, and this includes the possibility of ordering a primary custodian to pay support to the partial custodian.


As an aside, the Court made it clear that the deviation described above does not require a Melzer analysis. A Melzer analysis is for high income cases where incomes are too high for the guidelines to calculate. The Court indicated that the issue is not necessarily significantly high income but an unreasonably large differential in the respective income of the parents.


Finally, the primary criticisms of this decision, as mentioned in the dissent, are, first, the Court implies that the love and affection of a child for a parent can be bought and sold and, second, and more importantly, the majority decision makes no effort to define phrases like “appropriate housing” or provide an objective standard to determine just how much of a difference in income warrants a deviation from the support guidelines which would lead to making a primary custodian an obligor.

Originally published on February 25, 2014 in The Legal Intelligencer Blog and can be viewed here and reprinted in the Pennsylvania Family Lawyer, Volume 36, Issue No.: 1, April 2014 edition.

Does a Child-Support Obligation Terminate at Death?

Lawyers and laypeople alike know at least the basics regarding child support. Most people know that someone who has his or her child most of the time is entitled to child support from the other parent and someone who has his or her child partially needs to pay child support to the other parent. There are two strains of law regarding child support. The first, as established by the Pennsylvania Legislature, makes it clear that every parent has an essentially absolute duty to support his or her child regardless of whether there is a formal child-support order entered by the court. The second is what most people think of when it comes to the law: One parent formally files for child support in court, a hearing or conference is held and an enforceable court order of support is entered. While this makes sense with living parents, what happens when the parent ordered to pay support, the “obligor,” dies?

It seems pretty clear that child support terminates at the time of the obligor’s death, but what happens when the obligor disinherits his or her minor children, so not only is the child-support obligation terminated, but the obligor’s estate cuts out the child as well? The court has looked into this sort of matter.

Surviving obligees (the parents who receive support) have argued that just because the obligor dies, their own responsibilities do not, and neither do the needs of their children in need of support. Indeed, they have argued that there is, as a result, an inherent injustice and inequity if the support is potentially available in the obligor’s estate but not directed to his or her minor children or, even worse, to some minor children but not others. Pennsylvania courts have expressed sympathy for these arguments raised by obligees; in fact, the court has described these arguments as alluring. Obligees have tried to take advantage of the court’s apparent sympathy for them by presenting other states’ laws that have allowed post-mortem child support.

Unfortunately for obligees, the sympathy of Pennsylvania courts only went so far. The courts have pointed out that while some states allow after-death support, the vast majority have not. In addition, and perhaps most importantly, the courts have thus far been unwilling to extend a child-support obligation from the living to the dead, mainly because they believe doing so encroaches upon the province of the legislature. Indeed, the courts have noted that these arguments have been around for nearly 20 years at this point and the legislature has yet to take action on them. Therefore, the courts have, so far, believed that stretching existing child-support law to the point of obligating the dead moves beyond the province of developing case law and into the realm of altering statutory law as a legislature. The only exception the courts seem to have allowed in this area is when a property settlement agreement or divorce decree specifically allows for child support after death.

For more information on the issues described above, the following cases and statutes may be of interest: Benson v. Patterson, 574 Pa. 346 (2003); Garney v. Estate of Hain, 439 Pa.Super. 42 (1995); Blue v. Blue, 532 Pa. 521 (1992); Gross v. Oeler, 527 Pa. 532 (1991); Sutliff v. Sutliff, 339 Pa.Super. 523 (1985); 23 Pa.C.S. Section 4321.

Originally published in The Legal Intelligencer Blog on October 29, 2013 and can be found here.

Emancipation’s Impact on Child Support

Pennsylvania Rule of Civil Procedure 1910.17(a) establishes that a child support order will be modified as of the date the request for the modification is filed. This rule is consistent with the terms of 23 Pa.C.S.A. §4352 regarding retroactive modification of arrearages. Now, generally speaking, the modification of a child support order is requested because of a change in employment, a fluctuation of income, a change in the custodial arrangement of the children and the like. For the most part, the obligation to pay child support for a child terminates when the child reaches the age of 18, but is this termination automatic and, if not, can arrearages accrue after a child reaches the age of 18 if a petition to modify is not filed?

On its face, it would appear that if an obligor does not file to modify the child support – for the purpose of this article in order to terminate it because of emancipation – the order continues and arrearages can accrue after the age of 18.

Very few cases have been reported on the issues described above, and it would seem the Pennsylvania Superior Court case of Holcomb v. Holcomb, 448 Pa.Super.154 (1995), is the leading case on the matter. In Holcomb, the child-at-issue graduated high school in June 1993, thereby becoming emancipated under the law. The father of the child did not file to modify the support order for the child, in order to terminate the order, until June 1994. The relevant question, for the purpose of this article, is whether the child support order should have continued to accrue between June 1993 and June 1994 despite the fact that the child for whom the support was ordered was emancipated the entire time.

The hearing officer’s reasoning was to give the father a retroactive accounting of his support back to June 1993, as if he filed his petition to modify in June 1993, effectively deciding that emancipation automatically takes effect regardless of filing to modify.

The court ruled that, first, it has no power or authority to require the obligee, the mother in this case, to repay any money received after the child-at-issue emancipates. It logically follows, then, that if it cannot order repayment, its power regarding reducing or eliminating arrearages is similarly absent.

Next, the court specifically ruled that it simply has no statutory or procedural warrant or authority to modify support arrearages before the date the father filed a petition to modify regardless of whether the child-at-issue for whom the support has been ordered is emancipated in the interim. Indeed, the court admonished the father, saying “nothing prevented [him] from filing a petition for modification on the date his daughter became emancipated … [therefore] like all successful petitioners who seek modification of a support order, the modification is granted effective as of the date the petition was filed.”

So, for obligors and practitioners alike, it is vitally important to be vigilant in filing petitions to modify support as soon as a child is emancipated; otherwise, a child support order, along with its arrearages, will potentially continue to accrue unabated until some action is taken to stop it.

Originally published in The Legal Intelligencer Blog on July 2, 2013 and can be viewed here and published (reprinted) in Volume 35 Issue No. 3 (September 2013) of Pennsylvania Family Lawyer.

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