Family And Consumer Law-- The Blog

I am a person of some importance (and also right about the new mortgage settlement.)

2012-02-10T06:18:00.001-08:00

The good, the bad, and the warmed-over same-old-stuff about the latest attempt to claim the housing crisis was ended by a settlement that benefits only banks, as recounted to you by me -- the very first lawyer consulted in this article on Madison.com.

The full settlement documents haven't been released yet, so this information comes from the document entitled "Servicing Standards Highlights," available here.

1. It makes banks promise to follow the laws they weren't following already. (Good?). The settlement "highlights" begin with a section in which servicers are said to be required to stop "robo-signing" and actually have people read documents before they sign an affidavit swearing that they read the documents, and requires that affidavits be "accurate."

Really? That's a settlement? Getting the servicers to promise to stop breaking the law? If they weren't inclined to follow the law just because it's the law, will they be inclined to follow it now that some old guy from North Carolina has been appointed the mortgage czar?

Other things the banks and servicers were already required to do but now will be superextrarequired to do include "providing notice of foreclosure status before referring the case to an attorney." Every (noncommercial) mortgage document I've ever seen requires notice of a default. The added proviso of requiring that notice before referring to a lawyer may help reduce legal fees slightly for mortgagors -- but the required length of advance notice is only 14 days. That letter also must "document" the servicer's right to foreclose... but there's no information yet on what will be required as documentation, and people familiar with laws like the Fair Debt Collection Practices Act with it's debt validation requirement can tell you that courts tend to require very little to meet that law's standards. Which is fine because...

2. There's really no enforcement mechanism (Bad!): Loan modification requests must be submitted for "internal review," and there's an appeal process for denied loan modifications -- but the appeal is to the lender who denied the modification in the first place.

I remember when I was kicked off of Facebook for making too many friend requests (how else are you supposed to publicize your new book?) and the email let me know that I could appeal that decision by replying to the email. So I did that, and the next day I got a new email that said "Your appeal was denied." I emailed back for an explanation of why, but I never got an answer.

We really take due process for granted, don't we?

There's also just a 30-day window for appealing, which is a pretty short time-frame to appeal something. You get 45 days, minimum, to appeal a state court case, for example, and that appeal is done by lawyers.

What's missing from the framework, though, is any mention of a private cause of action. That's something that restricted the effectiveness of HAMP and similar laws. The settlement appears headed for "enforcement by the government only" land, a scary country where government employees get no extra budget money or staff to enforce new laws, and are already hard-pressed to enforce the old laws we already have; in some states (such as Wisconsin, where our AG's highest priority is fighting terrorism) law enforcement officials may not be entirely motivated to enforce this settlement.

So Old Man Mortgage Cop will be the only authority enforcing this. Besides the lenders and servicers, of course.

Why do I hear snickering?

3. There'll be some transparency, finally. (Good!). Try finding out, sometime, what the actual restrictions or requirements for a modification are. And let me know if you get that particular pot of gold. One witness testifying in court in a trial of mine -- a witness who worked for the servicer - - couldn't say what the guidelines for modification were. Lenders lawyer up faster than mobsters when you ask them to tell you what the modification guidelines are.

Under the settlement, they'll be required to post the proprietary guidelines they have for modifications, and give you the name of the investor who denied your modification if you didn't qualify for a non-proprietary loan modification. That's helpful, because you'll be able to see if you should qualify for a loan, or contact the person who said you didn't.

...of course, there's no way to enforce that, so if your lender doesn't follow through, and you lose your appeal... to the lender... you'll have to call that guy from North Carolina who's going to be patrolling all this.

(The old man is former NC Banking Commissioner Joseph Smith, who will "monitor" the settlement as Mortgage Czar, or something. Not a single word of anything I've read sets up Smith with anything so much as an office, so he's less powerful than, say, former House Speaker Dennis Hastert.)

4. There are (supposed to be) restrictions on the fees charged by servicers. (Good, except that nobody can enforce them which is kind of my point, here...) The settlement imposes restrictions on all kinds of fees, restrictions ranging from the ridiculous (fees must be bona fide and legally allowable, which is already a legal requirement, so we're back to point one) to the extra-ridiculous (attorney's fees "shall only be for work actually performed and shall not exceed reasonable and customary fees", a restriction that apparently requires servicers to keep their lawyers from being unethical, which would be a great idea except that's what state bars and courts are for, and also, again, nobody's going to be able to enforce that and also, in the vast majority of cases there is nobody who can challenge the fees, for a variety of complicated reasons) to the weirdly-complicated:

C. Late Fees If a homeowner is delinquent on two payments and then makes a full payment that is applied to the current payment, the bank/servicer cannot charge a late fee on the older delinquent amount. Banks/servicers shall not collect late fees: 1) while a loan modification is being considered 2) while borrower is making timely trial payments and 3) while a short sale is being evaluated.

to restrictions on third-party fees: banks can't impose duplicative or unnecessary fees, and cannot impose "property preservation" fees when there's a pending modification application... "unless there is a reasonable basis," so there's your trapdoor escape route.

5. The money really doesn't matter, and probably doesn't exist.

So here's the thing about that $25,000,000,000: Most of it doesn't exist. Only $5,000,000,000 is "hard cash," according to this article, which also points out that the $5,000,000,000 amounts to one percent of the settling bank's market capitalization, so once again, the 99% are getting screwed over. Settling for 1% of what you're worth is easy to do.

The remainder of the $20,000,000,000 is fictional monopoly money. As that article goes on to say:

That’s to come in the form of $3 billion in refinancings and $17 billion in principal reductions, deeds in lieu, short sales, anti-blight measures, etc.

Let me explain that: Banks will pay the $17,000,000,000 in taking homeowners' properties (deeds in lieu and short-sales) and in reducing the amount they are owed (principal reductions.) No money is going to come out of a bank's pocket for any of that. In fact, banks might well make money: A bank that takes a deed-in-lieu gets to issue a 1099C for any debt forgiven (possibly generating taxes owed by the homeowner), and then gets to sell the house, potentially generating a profit, especially where the property appreciates (as the market recovers) or the bank was owed close to or less than the value of the property. (Which is entirely possible; while homeowners are "under water" to a remarkable degree, as Judge Easterbrook on the Seventh Circuit Court of Appeals pointed out to me in oral argument once, an appraisal is just a guess as to the value of property -- so those losses, like previous gains, are only on paper.)

The article goes on to explain:

The banks receive variable credit for these actions, depending on whether these measures are taken for loans owned by the banks or owned by others and serviced by the banks. Basically, it’s full credit if the bank owns the loan, and half credit if the bank merely services the loan. Because of this formulation, the $17 billion in principal reductions, DILs, short sales is anticipated to result in $32 billion in actual relief.

In other words, it is expected that the banks will modify the loans owned by others rather than the loans they themselves own. And when a second lien loan owned by the bank is involved, it only has to be written down pari passu (at the same percentage) as the first lien loan. So from absolute to relative priority, which is a major handout to the big banks, which have large underwater second lien positions.

Hmmm. Something about that sounds... fishy. Almost as though... yep: We're getting screwed again:

Or put differently, $32 billion of the settlement is being financed on the dime of MBS investors such as pension funds, 401(k) plans, insurance companies, and the like—parties that did not themselves engage in any of the wrong-doing covered by the settlement. This shouldn’t be a surprise—the state Attorneys General previously cut a similar deal with Bank of America, which promised to make up for its wrongdoing by modifying loans own by other parties.

Really. Just read that article -- which I wish had existed before Obama lost my vote by letting this deal happen. Which brings us to

6. You can still sue your lender or servicer: While the language isn't finalized yet, the overall plan appears to be to preserve borrowers' claims against their lenders, which is good because borrowers haven't been represented at all in this process, and suing your lender is the only way you're ever going to get anything.

A little bit of free advice here.

2012-02-07T13:00:00.001-08:00

This is a Sponsored post written by me on behalf of Walgreens for SocialSpark. All opinions are 100% mine.

One of the things I do every day in my job is talk to people about their budgets. That’s what happens when you do creditor/debtor law: you have to talk to people about money, and you learn a lot about what people do with their money.

And as a result, what I’ve learned is that it’s AMAZING how much people spend on health care and health care costs. Hundreds of dollars per month on insurance premiums and co-pays and over-the-counter medicines and more. Sometimes I think that if we could get universal health care, I’d be out of a job: people would have enough money to pay their other bills and nobody would go bankrupt.

I’m not in a position to get health care reform passed (yet?) but I can give some advice that’ll help: Join Walgreens Prescription Savings Club.

The Walgreens Prescription Savings Club will give you discounts on prescriptions. Walgreens will give you savings on over 8,000 brand-name medications and on ALL generics. Plus, you’ll pay less for flu shots, nebulizers and diabetic supplies.

Got a pet? You’ll save on pet meds, too. Plus, you get bonuses from doing other Walgreens shopping and photofinishing.

The plan costs only $20 for an individual; families save more, paying only $35 a year to cover everyone in the immediate family including any dependents under 22.

That’s about $3 a month to save a lot more than that. I’m pretty healthy, and I have prescriptions all the time. The boys get nebulizers. Sweetie gets heartburn medication. For $3 a month, we could save a lot more than that.

That’s why I support Walgreens – and why I follow Walgreens on Twitter and Walgreens on Facebook. You should do that, too. And definitely check out the club. You can get more info here:

http://www.walgreens.com/pharmacy/psc/psc_overview_page.jsp

Doing what I say is about the only way to shut me up.

2012-02-06T14:01:00.001-08:00

This is a Sponsored post written by me on behalf of Sprint for SocialSpark. All opinions are 100% mine.

I keep on pointing out to you just how helpful (and cheap) a smart phone can be for a lawyer or law firm employee, and this is another one of those posts, which I bring up now because for the next four days (that’s counting today), you can get a Nexus S™ 4G for FREE or the HTC EVO™ 3D for only $49.99.

The Nexus S is the new 4G phone that’s coming from Galaxy and will be available on Sprint. It’s got front/rear cameras, an Android platform, panoramic 1080p photos, and it can handle Google Wallet – so you can make your phone be your credit/debit card and lose the wallet.

The HTC EVO™ 3D for only $49.99 is about the same level of phenomenal, with the added benefit of a 1.2 GHz processor for blazing speed in surfing.

So you’re thinking “Well, my old phone is still good, right?”

Wrong. It’s a hunk of junk. Throw it out the window, right now. If you don’t have a window, throw it at the guy nearest you. He deserves it.

You can’t survive without a smart phone now. I don’t even check my email on my computer anymore: I’ve got my two emails (work and personal) on my home screen and I check them on the go, so I’m able to respond to people instantly. I can text my wife while I’m on a conference call with the courts (and my smart phone works better than my office phone.) I use the phone to track my calendar and double-check research. I check headlines while I’m waiting in line and download apps to review mortgage documents. I was able to, sitting in a board of directors’ meeting the other day, not just update my knowledge of the statutes related to bylaws but find a place to take my twins after the meeting to play around for a while.

That is productivity, and the only thing better than being productive is being productive for free or cheap. With these web-only deals for the next few days (they end 2/8/12), you can get those phones free, or for the low price of just $49.99, with waived activation fees and free shipping at sprint.com. So you’ll be able to have your phone serve as an extension of your workplace PLUS an extension of your free time – all for just opening a new line or adding a line at your Sprint account.

I’m going to keep harping on it until you do it, so just go ahead and get the new phone. You’ll thank me, and I can talk about something else then for a while.

Is this the death of MERS?

2012-02-05T05:19:00.000-08:00

Remember, I'm on record as saying (a) MERS is actually a good business idea, and (b) banks don't want your house. So that's the background for my saying this

New York Sues 3 Big Banks Over Mortgage Database

Is both exciting and needs investigation.

That's the headline on the free portion of The New York Times over the article providing an overview of the claims:

Attorney General Eric T. Schneiderman of New York sued three major banks on Friday, accusing them of fraud in their use of an electronic mortgage database that he said resulted in deceptive and illegal practices, including false documents in foreclosure proceedings.

Mr. Schneiderman... filed a lawsuit against Bank of America, Wells Fargo and JPMorgan Chase in New York State Supreme Court in Brooklyn.

That's the lead, anyway. Schneiderman, whose doing this at the exact time the Obama administration appears ready to cave into the major banks and let them off the hook, went on to say:

“The mortgage industry created MERS to allow financial institutions to evade county recording fees, avoid the need to publicly record mortgage transfers and facilitate the rapid sale and securitization of mortgages en masse...By creating this bizarre and complex end-around of the traditional public recording system.”

And that's where he loses me: It's not a bizarre or complex system at all. I've seen some MERS documents and I know the basic idea. It's actually a great idea.

The article notes:

Mr. Schneiderman’s lawsuit asserts, the banks saved $2 billion in recording fees.

Which doesn't actually sound like fraud to me, and which was in fact the entire point of MERS. Remember, recording is to show an interest in land, and what's really important about recording is not just that you know who holds an interest, but that the interest is held. If I'm going to buy your land, I want to know if there's a mortgage on it. That fact, and the amount owed, are two of the three critical things I need to know. The identity of the owner is the third. So long as the mortgage is recorded, transfer of ownership is less important.

The actual allegations aren't clear to me yet; the article says:

The lawsuit asserts the database is inaccurate and seeks to stop the banks from filing foreclosure actions through MERS and executing false or defective mortgage assignments in New York foreclosure proceedings.

That may well be; the MERS documents I've seen have in fact been accurate; it's the lawsuits based on them that are not. And courts have already start the process of denying MERS the right to sue.

Mr. Schneiderman also is seeking all profits obtained through fraudulent and deceptive practices and other damages, including $5,000 for each violation of general business law.

That's where I've got to see the complaint, because, honestly, there is nothing in a typical note or mortgage that requires that any transfer of it be recorded. RESPA requires notifying the borrower of a transfer of rights, not recording the transfer. There are plenty of laws that require or prohibit some of the things that have been done -- like transferring notes without proper authority to do so, or filing foreclosures before transfers of rights are completed -- but the mere existence of MERS doesn't seem to me to be a problem at all.

So I'm holding off judgment -- which everyone else should do, too -- until I read the complaint itself. But I didn't want to be the ONLY lawyer not talking about this.

I had an idea for franchising my law firm. Each location would include a "Pixy Sticks" Bar.

2012-02-05T05:09:00.000-08:00

How do you find a good business opportunity?

If you said "Craigs List," you can show yourself out the door.

There are about 7,300,000 people out of work right now in the U.S. -- so if you're looking for work or thinking about changing jobs, there is a LOT of competition. On the other hand, if you're looking to BECOME AN EMPLOYER, this may be a good time to consider opening your own franchised business.

Consider, say, a Blimpie Franchise. Blimpie's simple premise (quality foods, quality employees, subs that people will love) has led to it being around for 40 years, and there are 900 thriving Blimpie sub shops around the country. You've probably eaten at one.

Blimpie, like other franchise opportunities, can give you a good start on a business: you get a name-brand and national support for your start-up business instead of having to begin from the ground up. That's one benefit of being a franchise owner.

I found out about Blimpie because I was reading at Franchise Clique, FranchiseClique.com: they've got listings for all kinds of franchises people might want to own, like Blimpie's, and like Quiznos-- which is another sub shop that you've probably heard of, and even Papa Murphy's, which would be my first choice of a franchise if I opened one except that I'd probably end up eating all the profits.

FranchiseClique.com has listings of national and international franchises, sortable and searchable, so you can find the franchise opportunity that suits you. I've worked in restaurants, so I know that can be a fun way to earn a living -- you get to meet people, and the job is social, and if you run a restaurant right, you'll be filling a niche in your area, because people've got to eat, right?

What's nice is that you can get actual information. I mean, don't take advice from a lawyer who writes a blog: Investigate your business opportunity and ask questions and hook up with a legitimate company. And FranchiseClique.com can help you do that, with pages and videos and press releases for each franchise, as well as an easy online form to request more information.

If you're thinking of opening your own business, FranchiseClique.com looks like a great place to begin.

Banks can make themselves liable simply by foreclosing on you. (My Actual Case Results)

2012-01-31T07:11:00.000-08:00

So I made a little law today. In MidCountry Bank v. Todd Bork et al, a Burnette County case, I represent the defendants, whose Wisconsin property is facing foreclosure as part of a larger lawsuit mostly centered on property in Minnesota.

The case roughly shapes up (in our view) this way: A while back, Todd Bork was taken for a ride by his banker, literally: the banker came to his house and suggested that the two take a drive. On that drive [I should note that many of these facts are set forth in affidavit from, but there has as yet been no trial or finding as to their accuracy], the banker suggested that Bork visit a property, and Bork agreed. After touring the property, the banker then suggested that Bork buy that property.

From there, as alleged in our counterclaims, Bork relied on the banker's advice (he'd known the banker for 30 years); at the time, Bork was suffering from some disabilities that he said affected his judgment, and the banker knew about them.

So Bork bought the property, only to learn that it required several hundred thousand in additional investments to fix up. The banker told Bork he could afford to do the transaction anyway, and then structured the loan so that not only was Bork buying the property and fixing it up but also he was paying off a couple hundred thousand on a different line of credit he'd had with the Bank -- essentially securing that line of credit with additional property.

The note was a "negative equity" loan-- the balance kept rising while Bork made minimum payments. After Bork could no longer make payments, he was foreclosed on in Minnesota and Wisconsin, the property which is the subject of these claims being located in Wisconsin.

Bork counterclaimed for breach of fiduciary duty, and the Bank, while denying the allegations (which have yet to be tried in any court) moved to dismiss on statute of limitations' grounds.

The Court made not one, but two novel rulings. First, we moved to deny the motion to dismiss on timeliness grounds. The Bank's replies to counterclaims had not said anything about a statute of limitations defense, and the motion was first raised about a month before the first trial date, many months into the case.

The Court decided that that Bank could not preserve the statute of limitations claim through that catch-all language so many seemingly-smart-but-not-really-that-smart lawyers throw into things; the Bank had said it reserved all other defenses or some such, a way of trying to say "We're claiming this even if we're not claiming it," and that didn't work: the Court (correctly) ruled that the bank couldn't reserve defenses.

But, the Court said, the statute in question (802.06) allows the statute of limitations' defense to be raised by motion, which was what the Bank did. I pointed out that a motion must, as I read the statute, precede the reply, but the Court disagreed, and so the Bank won its procedural argument: it could move to dismiss on statute of limitations grounds a year and a half or so into the case.

The Court then denied the motion to dismiss on substantive grounds, agreeing with me that the breach of fiduciary duty cause of action did not accrue until the Bank actually foreclosed on the property, and so the action was timely because the statute of limitations didn't start to run until the Bank filed this action.

In so ruling, the judge relied on an unpublished decision I provided, Wittenberg Ford-Mercury, Inc. v. Rosenow, Wis. Ct. App. 2009 AP 2931, a case in which an aut0-dealership purchase gone wrong led to breach of fiduciary duty claims that accrued, the Wittenberg court said, when it became clear that the purchase was not going to go through.

There's no clear case law on when a breach of fiduciary duty claim accrues for statute of limitations' purposes, but with a 2-year statute of limitations, it's important to start delineating those boundaries, and now Mid-Country vs. Bork has helped clarify that a little: A cause of action for breach of fiduciary duty under these circumstances accrues when the Bank takes legal action to enforce its claims.

To put it another way: Had the Bank not taken legal action but instead modified the loan, it would never have faced counterclaims in not one, but two states. I wonder if the Bank's lawyers bothered advising Mid-Country of that strategy: modify the loan, get payments coming in, and you'll avoid a counterclaim that will ultimately reduce our billable hours, your legal fees, and everyone's troubles?

Somehow, I suspect they did not.

UPDATE on that Super Bowl lawsuit.

2012-01-30T07:27:00.000-08:00

To recap: at last year's Super Bowl, when the ~~team of the century~~ one-hit wonders Green Bay Packers beat the aging Steelers, 475 people couldn't be seated, and ultimately were offered settlements by the NFL of either three times face value of the ticket (or $2,400) plus a ticket to this year's game; or one game ticket to any future Super Bowl plus airfare and four nights' hotel stay; or $5,000, or a check for the total documented expenses the fan had paid.

Four options offered, but many fans took the fifth route of suing, and one year later, those fans are claiming victory after a federal judge has let (some) of their case go on.

The suit, officially titled Simms v. Jones, the Jones being Jerry Jones, Cowboys' owner, was briefly mentioned in December, when the presiding judge was reported to have "allowed" the Super Bowl lawsuit to proceed, a headline and story that is only very technically accurate, which is what happens when sports "reporters" try to talk about things that actually matter/require knowledge.

What really happened in late November 2011 was that the Court dismissed the breach of contract claim against the Cowboys and Jerry Jones (with leave to replead), and allowed the breach of contract claim against the NFL to proceed; as to that latter, the Court noted that the limitation of remedies on the tickets, under Texas law, did not require the Court to dismiss the claim:

At this stage in the litigation, the breach of contract claim against the NFL cannot be determined as a matter of law. There is no proof in the record that the offers of compensation were in fact sent to the individual Plaintiffs or to other class members. Furthermore, the issue of what recoverable damages the Plaintiffs actually suffered cannot be determined based upon the pleadings alone. If Plaintiffs prevail on their contract claim, they will be entitled to damages that the law allows, unlimited by the statement of remedy on the ticket. Defendants’ Motion to Dismiss the breach of contract claim against the NFL is therefore DENIED.

That, in turn, was "reported" as meaning that "the plaintiffs could be eligible for compensation far beyond that which the NFL offered in the wake of the debacle", which is only partially accurate, too. The judge actually simply ruled, as the quote notes, that the plaintiff were entitled to whatever remedies the law allowed.

The Court went on to note that simply purchasing a ticket created no duty of good faith or fair dealing on the part of the NFL under Texas law, and dismissed fraud claims. As to the latter, the plaintiffs had permission to replead them.

In short: the Court limited the case back in November, 2011, to a breach of contract against the NFL, dismissing the bigger claims and letting the Cowboy defendants out, so the case continued on a very limited basis.

The case was then refiled, again against the Cowboy defendants, this time alleging that Jones' Cowboys got up to 5% of the game tickets, which they sold, and this time alleging that the fraud was by omission -- that the NFL guidelines required that the ticket seller disclose obstructed views and so the failure to disclose that was a fraud by omission -- and also fraud-by-concealment. The complaint continued the case for punitive damages and attorney's fees.

So if you are one of the people who joined the class-action suit, you have not yet been paid or compensated in any way, and most of your claims have been dismissed once already.

On the other hand, 246 of last year's "jilted" fans have taken the NFL up on their offer to attend this year's Super Bowl, according to The Consumerist, which seems low but I tend to agree with the Indystar.com opinion that most fans are probably waiting for a better location for a Super Bowl.

Hey, turns out circuit courts are totally able to judge attorney's fees awards on their own! (Consumer Law Matters)

2012-01-24T07:47:00.000-08:00

Who'd have ever guessed that circuit court judges (and appellate judges) might not be hypnotized by the crafty plaintiffs' bar into rubberstamping whatever fee award the crafty plaintiffs' bar lawyers might demand with no justification whatsoever?

Certainly not the Wisconsin legislature, which was more than willing to be bought for a mere $10,000, in exchange for which the (current) Wisconsin government attempted to limit the discretion courts use in awarding consumer lawyers their fees. Wisconsin lawmakers in passing that law were clearly acting in the best interests of corporations who feared the obvious power that plaintiffs' lawyers have over judges; why, plaintiffs lawyers could practically write their own check, the fear went, so we have to limit what those judges will do when put under the seductive spell of consumer litigators!

{Where is that sarcasm emoticon when I need it?}

Anyway, sarcasm aside, a little while back, Wisconsin imposed a presumptive limit that fees should be three times what a party is awarded in actual damages, but it turns out that maybe it was unnecessary to rein in the judiciary because judges actually exercise their discretion when asked to award fees in those cases, as shown by the hot-off-the-presses, pre-limit case of Zimmerman v. Chrysler Group, a "lemon law" fee-shifting case where the parties agreed on a settlement but couldn't come to terms over the amount of fees to be awarded the plaintiffs' lawyers, so the two sides agreed to try the issue of fees before Judge Ramirez in Waukesha County, and the billing statements were put in, and some of the lawyers for each testified, and the Court:

entered a final Order on November 18, 2010, which reflected the court’s oral decision and ordered Chrysler to pay the Zimmermans a total of $23,888.50, which represented payment of 87% of the fees and costs requested for the underlying claims.

That's from the plaintiffs brief on appeal; despite winning $23,000 in fees, the plaintiffs (the Zimmermans) appealed, because the circuit court awarded them nothing for litigating how much in fees they should earn.

That's what the case was really about, here: Not whether the plaintiff's lawyers should get fees for winning (?) their case via settlement, but whether the plaintiff's lawyers should get fees for litigating the issue of how much they should get in fees.

I make that point because because it points out both the completely unnecessary nature of the presumptive cap on fees and the ridiculousness of saying that it is all one side or the other which is driving up the cost of litigation, and because this case points to an unintended consequence (there are always unintended consequences!) of the law.

To listen to the Bought-And-Paid-For (for just $10,000!) Republican legislature, plaintiff's lawyers are slime who drive up costs for reg'lar folks by outrageous demands for fees incurred in litigating cases allowed by law. To listen to the plaintiff's lawyers, there is no amount of fees too outrageous to qualify as being awarded.

In other words: settle down, everybody, the judges had it well in hand before the law went and got all worked up over this.

So this was a fight about fees incurred fighting to be awarded fees incurred. A fight that need not have happened had one side or the other been willing to let one side or the other entirely dictate what it should be awarded.

Keep that in mind. Because the harm the new law was intended to fight -- plaintiff's lawyers running up fees and then some how hypnotizing judges into just going ahead and awarding those, to the detriment of reg'lar folks ("reg'lar folks" like "massive car dealers who do repairs without authorization") wasn't invoked at all in this case. The fees awarded by Judge Ramirez in fact seem to be lower than the presumptive award that the law would not require.

There's an unintended consequence of that law: It might require higher fees than the defendnats want to pay. Here's why: the records in the case suggest that the Zimmermans were awarded "$10,000 and the value of the motor vehicle." They don't say how much the vehicle was worth, but even if it was worth nothing, the Zimmermans still got $10,000. So under the new law in Wisconsin, the circuit court is required to presume that three times that amount is a reasonable award.

So the circuit court under the new law would be required to presume that $30,000 is a reasonable award - - and the defendants would have had to prove it should be less.

Here, Judge Ramirez in Waukesha County awarded $23,000 or so in fees -- less than three times the presumptive limit imposed by the new law that a disgruntled car dealer bought himself. So under the new law, disgruntled car dealers who don't want to follow the law might find themselves facing a smart guy like me who will say to judges "You have to presume that three times what my client was awarded is reasonable, and award that."

Case in point: this past summer, I got an award of $18,000 in a consumer case. My total fees were $34,000 (about even to what the other side spent.) Under the new law, the presumed reasonable fees would have been $54,000.

Anyway, that's the unintended consequence of the new law: Defendants might end up paying more, not less.

But defendants don't want to pay anything. In the lemon law case here, Zimmerman, the defense, having settled for $10,000+a car, then offered $8,000 for attorney's fees.

Says the plaintiff's appellate brief:

Chrysler offered $8,000 for all fees and costs for litigating the underlying matter. (R. 85: 4). The trial court rejected that suggestion when it awarded $23,888.50, representing 87% of the $27,500 in fees and costs requested by the Zimmermans on the underlying claims and almost three times the amount Chrysler offered.

Now, consider this:

The parties settled, and then only had to discuss what would be fair compensation for the Zimmermans' lawyers (Lemon Law cases allow fee shifting, of course.)

The Zimmermans were seeking $27,500.

Chrysler offered $8,000.

The circuit court decided that $23,888.50 was a fair amount to be awarded -- giving the Zimmermans nearly three times Chrysler's highest settlement offer.

Judge Ramirez sits in Waukesha County, which is not known for being liberal, lefty, or consumer-friendly. (With that, I must add that I've tried cases before Judge Ramirez and found him to be fair to all sides.) Judge Ramirez thought $23,000, or three times what Chrysler wanted to pay, was fair. The Zimmermans' brief notes that he only cut out about 15 hours of time as "duplicative" or "unnecessary," out of 89 hours total, pre-settlement -- so Judge Ramirez, who's seen many a case, felt that 74 hours of time spent working towards a settlement was reasonable.

So in the first instance, Judge Ramirez, who knows the lawyers and knows the case and knows lots of lawyers and has seen lots of cases, thought that 2.3 times the amount awarded (or less) was reasonable. But Judge Ramirez also of necessity thought that Chysler was being unreasonable: He awarded nearly 300% of what Chrysler thought was fair.

With that, though, Judge Ramirez made a mis-step: he didn't award anything for litigating the issue of fees.

That's what led to the Zimmerman's appeal: not just because (as noted by the Zimmermans' brief) the award of $23,000 or so reduced the effective award to just 32% of the total the Zimmermans' lawyers wanted, but because Judge Ramirez, having conceded that $23,000 was reasonable, failed to do anything about the fact that Chrysler had forced this fight over fees.

As the plaintiff's brief noted:

Here is the problem in focus: the attorney time expended to prove up the fees and costs to be awarded the Zimmermans greatly exceeded the time of the original fees and costs claim. It is inequitable for Chrysler to subject counsel for the Zimmermans to a year of litigation over the fees and costs for the underlying claim and then have the trial court award not one cent for the attorneys time in proving up those fees. See City of Riverside v. Rivera, 477 U.S. 561, 581, 106 S.Ct. 2686, 2697, n. 11 (1986), a defendant “cannot litigate tenaciously and then complain about the time necessarily spent by the plaintiff in response” under a feeshifting statute.

I like THAT! I've got to remember that quote.

So that alone is fascinating: Chrysler said "We'll give you $8,000," then lost -- by 300% -- and yet prevailed, in effect, because they were able to force the plaintiff to litigate the issue of fees... for free.

What's fascinating, also, is the look at what passed for litigation by Chrysler over the fees: According to the Zimmermans' brief, Chrysler subpoenaed another Lemon Law attorney as an (uncompensated?) expert, then attempted to impeach him, then put its own assistants and lawyer on the stand -- having the latter refuse to testify what she had been paid. That doesn't seem to be the way to prove whether fees are reasonable or not, but it does seem to be a lengthy, time-consuming way to litigate the issue of fees, which should then allow the plaintiff's lawyers something for their time spent getting paid.

But Judge Ramirez saw things differently than the Zimmermans' lawyer, ruling:

Simply put, I had a credibility problem with requests made by attorneys’ fees by plaintiffs’ counsel especially after resolution of the case. Requests for attorneys’ fees made on or after that date appear not to reflect so much efforts to rigorously represent the Zimmermans as much as efforts to geometrically compound attorneys’ fees.”

(Emphasis added.)

Fair enough: If the plaintiff's response really was akin to "you're going to make us fight to get paid? Fine, we'll amplify our requests and hope that whatever percentage we get covers our true costs," then Judge Ramirez can't be faulted for feeling that way overall, and the Court of Appeals found no real errors with Judge Ramirez's ruling, overall-- rejecting the argument that circuit courts must always award fees for litigating the award of fees:

To the extent Zimmerman suggests that the parties' stipulation created an explicit agreement that required the circuit court to award post-settlement fees, we disagree. The parties' stipulation and the relevant statutes authorize only reasonable fees.It necessarily follows that attorney fees for litigating the amount of attorney fees must also be reasonable. No part of the parties' stipulation in the present case, or the relevant fee-shifting statutes, required the court to award a certain amount of fees for litigating fees. Under appropriate facts, a proper lodestar analysis could result in an award of zero.

That said, though, the Court said the circuit court should have awarded something:

Accordingly, we conclude that the circuit court erroneously exercised its discretion. We reverse and remand for a determination of reasonable attorney fees incurred litigating attorney fees. As the ones seeking to be paid, Zimmerman's attorneys have the burden of demonstrating the reasonableness of their fees. Kolupar, 275 Wis. 2d 1, ¶34. As the circuit court properly observed, reasonableness is often a more difficult conclusion to reach when the amount requested for litigating the fees is disproportionate to the work on the merits of the case. The court noted, "it would not be reasonable for an attorney to charge a client $80,000 in fees to collect $10,000 and the value of the motor vehicle. It is not reasonable, and again, it boggles the mind."

Nevertheless, it was erroneous under the facts of this case for the court to deny any award of attorney fees after resolution of the underlying claim.

So here's where this leaves litigants: Probably nowhere, since the new law went into effect and this case was decided under the old law. The utility of Zimmerman is primarily that circuit courts will be required to award something for litigating the issue of fees, and also that under Zimmerman, a smart lawyer might be able to say "Well, the new law applies only to fees incurred in getting the settlement or award, not to fees incurred in getting the fees," which is a parsing that I bet the legislature didn't think of. The Court of Appeals, remember, said:

The parties' stipulation and the relevant statutes authorize only reasonable fees.It necessarily follows that attorney fees for litigating the amount of attorney fees must also be reasonable.

So, are "fees awarded" under the new law "all fees awarded," or are "fees awarded" under the new law "fees awarded for reaching a settlement or verdict," leaving circuit courts free to award more than three times the compensatory damages for litigation involving an award of fees?

How courts deal with that question is going to cost a lot of people a lot of money, I bet, at least until some new car dealer decides he doesn't want to follow the law and gets the legislature to grant him immunity for illegal practices.

How’s that “health care” “system” working out for you?

2012-01-15T01:01:00.001-08:00

This is a Sponsored post written by me on behalf of Walgreens for SocialSpark. All opinions are 100% mine.

Suppose there was a company out there that provided no real services but did manage to grow its profits at two times the rate of other industry companies. And suppose that company just ended a contract relationship that benefitted many regular (e.g., you) people despite the fact that it achieved no cost savings from ending that contract.

And suppose that by ending that contract, that company ended up making it harder and more costly for you to get your prescription medications?

You’d hate that company, wouldn’t you? I imagine that’s how many people will be feeling about “Express Scripts,” a middleman company that just ended its contracts with Walgreen’s drugstores in the latest round of goings-on between Walgreens and Express Script. “Express Scripts,” as I understand it, contracted with health insurance plans and then contracted with drugstores, so that when members went to the drug store, they wouldn’t pay the drug store but would pay Express Scripts. Express Scripts and Walgreen’s were recently negotiating a new contract, and Walgreen’s was offering to keep its rates of payment the same, but Express Scripts wanted them to reduce their rates below industry standard, and Express Scripts wanted to be able to define for itself what was or was not a “generic” vs. “brand name” drug.

The end result: You get hurt, and our military gets hurt.

Oh, that latter one? Express Scripts has a client “Tricare,” which provides health insurance to military families. Walgreen’s offered to have its prices match or beat the prices of any other drug store, so that military families were guaranteed the lowest prices for prescriptions. Express Scripts said no.

So a company which has seen its profits increase at double the industry rate just decided that’s not enough and ended up making families travel farther to get their prescriptions, or pay more to get them. Seem fair?

I’m on Walgreen’s side in this one. People shouldn’t have to pay too much for prescriptions, and local drugstores provide familiarity so that the pharmacist can do more than simply dispense drugs anonymously, like Express Scripts wants. Now customers have to find new places to get their medications, and the people they’re dealing with don’t know them.

Walgreen’s is helping out. They’re giving a break on enrollment in their Walgreens Prescription Savings Club, so for January you can join for just $10 (or $5 a person) to get discounts on your prescriptions:

http://www.walgreens.com/pharmacy/psc/psc_overview_page.jsp

And they still have their usual savings on 8,000 different brand-name medications, low prices on generics, and discounts on flu shots, pet scripts, nebulizers and other things. Plus, if you join that club, you’ll get bonuses for using other Walgreen’s services, like photofinishing, so you can continue to save on medications and still do one-stop shopping at your local pharmacy.

It’s time to pick sides in this fight. With all the many troubles in the health care industry, we didn’t need Express Scripts making things worse. Stick up for Walgreen’s: Like Walgreens on Facebook and follow Walgreens on Twitter (@Walgreens), and help make things better.

Ernie's not human? Does BERT know? (Interesting Judicial Comments)

2011-12-29T09:15:00.001-08:00

As I slogged through a summary judgment brief involving fraudulent transfers of land, I took a break to read an opinion in a case I'd give my eye teeth to work on, if I knew what eye teeth were.

The case is the innocuously-titled "Toy Biz, Inc. v. US," and it's found at 248 F. Supp. 1234. It's a 2003 case in which a federal court was asked to decide, in four opinions, whether Wolverine and the other X-men are human.

Really.

The case involved a tariff classification that saw Customs trying to classify action figures being imported as "dolls," rather than "other toys," the difference being a whopping amount of tax. Dolls, under the relevant law, are toys that resemble human beings, which sounds like it might apply to an action figure of, say, Nightcrawler, but there's an exception to dolls under other toys, which removes from the dolls classification

[t]oys representing animals or non-human creatures even if possessing predominantly human physical characteristics (e.g.angels, robots, devils, monsters)

This is the stuff our government is up to when we're not watching it, you know: classifying monsters and dolls.

Customs argued that merely adding a claw or a robotic arm "fall[s] far short of transforming [these figures] into something other than the human beings which they represent," but the Court noted that first, Customs ought to have read more comic books:

Second, these Marvel characters are known in popular culture as "mutants." That fact further informs their classification. ... (Customs recognizing that some knowledge from popular culture is necessary to identify certain figures, such as angels, devils, monsters, as "non-human"). They are more than (or different than) humans. These fabulous characters use their extraordinary and unnatural physical and psychic powers on the side of either good or evil. The figures' shapes and features, as well as their costumes and accessories, are designed to communicate such powers. For example, "Storm" (a tall and thin figure with white mane-like hair and dark skin)...has a lightening bolt as an accessory, reflecting the character's power to summon storms at will. "Rictor" ...has a human appearance but comes with a built-in wheel in the back which when turned makes the figure vibrate and thus is designed to simulate Rictor's "power to generate earthquake-like vibrations." "Pyro" ...has a costume that, with two long hoses attached to it, is designed to aid the character's "mutant ability to control and shape flames.

So maybe a claw wouldn't keep you out of a Humans-Only club, but if you can control the weather or have a wheel in your back, we don't want your type here, buddy.

But while that is easy enough to decide: white-haired women with lighting bolts

are clearly not human, right? (Hot, but not human), what's harder to decide is whether a person who was a human but then got transformed by cosmic rays into, say, a blog of metal, is no longer human:

The court next turns to the more difficult classification of the action figures referred to as "Fantastic Four." The assortment... of the "Fantastic Four" action figures "Black Bolt," "Mole Man," "Terrax," "Mr. Fantastic," and "Silver Surfer." ...On their packaging, the characters are not referred to as "mutants" or are not known in popular culture as "mutants." They are, however, known to have extraordinary, "super-human" abilities.

"Mr. Fantastic" is the "leader of the superhuman quartet known as the Fantastic Four," .... The character can "stretch himself into almost any shape." Accordingly, the "Mr. Fantastic" figure has stretchable arms made of soft plastic.

"Black Bolt," despite resembling a human, has wings attached to its arms and is described as belonging to "Inhumans."

"Terrax" has a grey skin color signifying that the character's body is made of a "living stone-like substance."

"Silver Surfer," although once human, has been transformed by "the power cosmic," and the figure's entire body along with its surfboard is consequently metallic.

Accordingly, the court finds that the four "Fantastic Four" figures considered above do not represent human beings and are thus not classifiable as "dolls"...

The last figure in this series is truly a close call. "Mole Man" is described as both being human and having an "odd appearance,... extraordinary intelligence, cunning, and fighting prowess with his staff." The figure is stout and thick, has exaggerated troll-like features, wears a green outfit and cape, and comes with a staff and a small figure of a "humanoid" creature (yellow in skin with protruding white eyes) symbolizing the fact that the character uses small humanoid creatures to "do his bidding." Mole Man lives "within the Earth," and consistent with the character's subterranean nature, the figure has unusually pale skin and wears blue glasses. The character also "controls a legion of giant monsters."

Given the entire context of the figure's appearance and fantastic story, and the fact that it is part of a series where the characters are described as "super-human," the court finds that "Mole Man" is also not properly classifiable as a "doll" under the HTSUS and instead should be classified as an "other toy".

It didn't end there; the Court decided that even Spider-Man villains Kingpin and Craven weren't human,

What's really fascinating is about this case are two minor (?) notes, the first showing that along the way in the litigation, Marvel decided to agree that some humans are humans, and also, that the Court got to play with the action figures in question. From footnote 10:

On October 18, 2000, the parties entered into a Stipulation identifying all items at issue in this action. Later, with both parties' consent, Plaintiff withdrew from the case the items "Daredevil," "Invisible Woman," "Punisher," "U.S. Agent," and "Peter Parker," and Defendant agreed to classify the items "Beast," "Bonebreaker," "Cameron Hodge," "Robot Wolverine," and "Vulture" as "other toys," ...Moreover, the court has before it sufficient samples and pictures of the items in question which enable the rendition of a dispositive decision.

(Emphasis added.) And the other little-noted extra part is that in deciding that a guy who had four metallic robot arms grafted onto his body by a scientific accident is no longer human, the Court relied on an earlier decision finding that Ernie and Bert might not just be secretly gay married, but gay interspecies married, citing as follows:

Cf. Minnetonka Brands, Inc. v. United States, 24 CIT ___, ___, 110 F.Supp.2d 1020, 1029 n. 5 (2000) (finding that the containers in the shape of the well-recognized children's character "Ernie" is properly classifiable under HTSUS 9503.49.00 rather than as plastic bottles because "Ernie's cartoon-like figure, orange complexion, red button nose, and oval head [is] a sufficient basis for finding him a `nonhuman creature'").

That had to come as a surprise to Ernie, since Muppets don't think of themselves as Muppets.

But can they saw a commercial loan in half and put it back together? (Interesting Judicial Comments)

2011-12-27T10:04:00.000-08:00

"Washington's other case citations, also intended to draw a fiduciary rabbit from a commercial loan agreement hat, are similarly inapposite."

-- Washington Steel Corp. v. TW Corp., 602 F.2d 594 (C.A.3 (Pa.), 1979), considering (and rejecting) a bank's duty to refrain from lending money to one client to take over another client.

Mortgage bankers have to break your leg before you can sue them? (Mortgage Banking.)

2011-12-21T07:12:00.000-08:00

More alarming, to lawyers who understand how things really work, than the recent fee-limitation imposed by Republicans who were bought off by a disgruntled car dealer-- John Lynch Chevrolet-Pontiac -- who wanted to be free to illegally overcharge his customers without fear of reprisal is the threat that courts are going to undermine the right to sue period, without fretting over how much attorney's charge.

I'm not as concerned about the fee shifting as many lawyers are. In one recent fee-shifting case, the fees I sought were just over 2 times the damages our clients were awarded, and were far less than the fees that were charged by the defendants. In another case -- the one I mentioned here -- my fees through trial were only 1/5 of the fees charged by just one defendant's team of lawyers, and if lawyers who charge $80,000 to get a case partway to trial want to gripe that I charged one-fifth of that to completely try the case, they're free to make that argument. I look forward to them explaining to their client how I was able to win charging 20% of what they charged.

What I don't look forward to is courts making rulings that limit a person's right to enforce the law, especially when the law is set up to be enforced by private people.

There's been a recent spate of laws not intended to be enforced coming out of Wisconsin's Capitol -- Gov. Scott "Patsy" Walker's First-Amendment-Abridging Pay-Up-Front rules among them -- and that kind of thinking ("let's have a law but not really enforce it") might be a hallmark of the type of lawyering you get when your top state lawyer ran for office on an anti-terrorism platform. But laws are meant to be enforced, and laws like Wisconsin's mortgage banking regulations are in particular meant to be enforced by "private attorneys general," i.e., you and me.

A private attorney general law is one which lets people sue for statutory violations and win statutory damages even if they're not otherwise harmed. A classic example is the FDCPA, which awards up to $1,000 in statutory damages even if no actual damages are involved -- letting debtors hire lawyers to sue to enforce even hypertechnical provisions of that law.

Such laws are set up to encourage people to enforce them when enforcement actions would be numerous and over small or nonexistent amounts of damages: The state has little incentive or resources to sue every landlord over every withheld security deposit, so the fee-shifting and statutory damage provisions are meant to create a sort of citizen-law-enforcement setup.

Statutory damages are a key provision of such laws: by awarding statutory damages, the laws recognize hard-to-quantify technical injuries and provide a penalty simply for ignoring the law.

Which brings us to Avudria v. McGlone Mortgage Company, 2010 AP 2032 (Unpublished, Wis. Ct. App. 5/17/11.)

In Avudria, an opportunistic lawyer or plaintiff tried to make a quick buck and in doing so, might have created a precedent that will make it more difficult to enforce laws like the mortgage banker regulations. The plaintiff sued McGlone, claiming (correctly) that McGlone had used forms that disclosed what the plaintiff was paying, but which were not the approved DFI forms.

Avudria, the plaintiff, had not been misinformed by any of the forms, which were standard-issue industry forms, but which were not the ones required by DFI to be used in Wisconsin. In fact, Avudria admitted that he was pleased with what McGlone had done for him.

But he sued anyway.

The Court of Appeals looked at the case and decided that Avudria had no claim, because he wasn't aggrieved.

The statute requires that someone be aggrieved before they can sue, and the Court of Appeals glommed onto that:

The question before this court is whether Avudria is a “person who is aggrieved” under Wis. Stat. § 224.80(2), such that he can pursue a private cause of action against McGlone for its failure to use the forms required by the DFI. In order to answer the question, we must turn to the statute itself.

...

Based upon the plain language of Wis. Stat. § 224.80(2), we determine that a “person who is aggrieved” is one who suffered at least some actual injury or damage.

That's all well and good, except that the statute sets up two different ways of measuring a penalty: first, a doubling of the loan origination fee, and second, an award of actual damages, whichever is larger:

Section 224.80
(1) Penalties. A person who violates any provision of this subchapter or any rule promulgated under this subchapter may be fined not more than $25,000 or imprisoned for not more than 9 months or both. The district attorney of the county where the violation occurs shall enforce the penalty under this subsection on behalf of the state.

(2) Private cause of action. A person who is aggrieved by an act which is committed by a mortgage banker, mortgage loan originator, or mortgage broker in violation of any provision of this subchapter or of any rule promulgated under this subchapter may recover all of the following in a private action: (a) An amount equal to the greater of the following:
1. Twice the amount of the cost of loan origination connected with the transaction, except that the liability under this subdivision may not be less than $100 nor greater than $25,000 for each violation. 2. The actual damages, including any incidental and consequential damages, which the person sustained because of the violation.

That structure suggests that "aggrieved" doesn't mean "suffered actual injury or damage" at all. A fair reading of the statute says that an aggrieved person may be one who suffered no actual damages, in which case an aggrieved person would be awarded the statutory damages.

It's not even hard to come up with an example that fits such a category. Under the law, a mortgage broker may not:

"Make, in any manner, any materially false or deceptive statement or representation, including engaging in bait and switch advertising or falsely representing residential mortgage loan rates, points, or other financing terms or conditions."

Now let's suppose that my client in my recent trial wants to go refinance, and before working with Mortgage Brokers, Inc., says "You don't employ any of these people that I sued," because she doesn't want to work with them. And Mortgage Brokers, Inc. lies and says "No, we don't," and then simply makes sure that all the defendants our client sued don't work on her file.

Our client then gets the loan she wants, but finds out that she was lied to and all these people she sued actually do work there.

Has she suffered actual damages? No -- discounting such potentials as "fear that the former defendants are badmouthing her" or "worry that because those people work there she actually didn't get a good loan" -- but does that mean the mortgage broker should go unpunished?

Should a mortgage broker be allowed, in short, to lie in order to get a client, even if they then do a good job?

Is that what was intended by the legislature when they put in that double-loan-origination fee? Or were they intending to punish brokers who break the law by taking away the compensation (double the compensation) for lawbreaking, and empowering citizens to enforce that law?

In every state in the country, you can be penalized for speeding even if you didn't hurt anyone. If I drive down a deserted highway in broad daylight on dry roads with open views -- in short, causing no danger-- and I'm going only 1 mile per hour over the speed limit, I can still be ticketed and fined, because breaking the law can be punished even if nobody was hurt.

Unless the law is one like Wisconsin's mortgage banker law, which, thanks to Avudria's opportunism and the Wisconsin Court of Appeals' laziness, just got less enforceable than a speed limit.

Smart phones make you a better person, and that's not even counting how good you'll get at "Plants vs. Zombies."

2011-12-13T15:00:00.001-08:00

This is a Sponsored post written by me on behalf of Sprint for SocialSpark. All opinions are 100% mine.

For the next 24 hours or so, Sprint is offering you a Android™ powered EVO 4G devices free of charge: No cost for the phone, no cost for the activation, no cost for the shipping.

Maybe you have a smartphone, maybe you don’t. Either way, you need a BETTER smart phone. The better your phone is, the better off you are, especially at work.

Most people don’t give much thought to how a smartphone can help them at work. I’m not most people. I have actually used my smart phone on numerous occasions to help my practice, and so it’s making money for ME. Consider all these ways a smart phone helped me:

Last year, on the way to a trial, I got stuck in traffic on I-94. Using my smart phone, I was able to check the traffic cams to determine that the jam went on for five miles at least. Using my smart phone, I was able to then use the navigator to find an alternate, back-road way to the trial, arriving 10 minutes early and being, therefore, relaxed when opposing counsel showed up late. He had been sitting in traffic.

Yesterday, in a meeting, we got into a debate about whether “offers of compromise” – settlement offers to you – were inadmissible for more than one reason. While an associate ran to get a statute book, I simply clicked a few buttons and found the statutes online, then checked them out.

Last week, while I waited for a seminar to begin, I used my phone’s email access to debate, vote on, and ultimately get approved, a budget for the 2012 fiscal year for a charity whose board I sit on.

And yesterday, I was able to take a bunch of pictures of my kids and post them to Twitter.

Okay, that last one doesn’t help my practice, but the pictures were cute ones.

You get the point: A smart phone is a smart investment, and Sprint’s offer – which is only good for about another day – makes it a no-brainer to get in on this deal. For FREE, you can get access to EVERYTHING YOU NEED to be more productive, more on time, and more informed.

Plus, you can follow me on Twitter and get instant access to pictures of my kids. I’m telling you, they’re cute.

Wisconsin proclaimed "North Korea", full employment for courts, lawyers to begin soon. (Consumer Matters)

2011-12-12T13:21:00.000-08:00

Last week, Governor-for-Now Scott ("Patsy") Walker signed into law the new bill that limits attorney's fees to a presumptive cap of 3 times the actual damages awarded to the claimant.

That bill did not sit well with the lawyer whose case spurred the Republican law-passing machine into action after the donor/defendant bought himself a law that will make it easier for car dealers to rip off consumers: Vince Megna, the lawyer who represented the plaintiff in the suit Kaskin v. John Lynch -- the case that led John Lynch Chevrolet to buy off some Republican legislators for the low, low price of just $10,000 -- reportedly issued a statement that he would never represent a Republican again and calling Wisconsin "North Korea."

One thing that's been largely overlooked in the debate -- not that there was a debate; for $10,000, you can buy enough Republicans to avoid debate -- is the sheer number of statutes and regulations affected by the new law. The State Bar of Wisconsin (which opposed the bill) estimated that as many as 280 different laws are affected.

The text of the bill (insofar as I could see it; the full text isn't currently available on the Legislative Reference Bureau's site, but I didn't hear that Governor For Now vetoed any portion of the bill) says that the cap aplies to "any action involving the award of attorney fees that are not governed by s. 814.04 (1) or involving a dispute over the reasonableness of attorney fees," which is, as the Bar noted, a pretty broad swath. Section 814.04 is the general costs statute that lets courts tax a nominal amount of fees based on the dollar amount of the case, which means that this law presumably applies to every single action in which one side or the other gets attorney's fees (or could.)

What remains to be seen, notwithstanding Mr. Megna's declaration of where we now live, is how the Courts will interpret this. With the cap being only a presumptive cap, what the bill has actually created is not a hard-and-fast bar to a claim of greater fees, but instead more litigation, as lawyers (like me) who represent consumers will face substantial litigation -- in one recent case I was outspent by 5-to-1 (or more) by the lenders involved -- and substantial costs, and, if the defendants take the stance that they won't pay our full fees, we'll have no choice but to litigate those claims and see if the judge will allow greater costs and fees.

Consider what happened under a similar law. The Fair Debt Collection Practices Act (FDCPA) has a provision that allows an award of "reasonable" fees to successful litigants at 15 U.S.C. 1692k(a)(3). A nationwide search for cases mentioning that specific provision turned up 287 reported cases in the last 33 years, or about 10 cases per year. The litigation over attorney's fees got so complicated that at one point, the Second Circuit simplified things this way:

In Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110 (2d Cir. 2007), amended on other grounds by 522 F.3d 182 (2d Cir. 2008)], we undertook to simplify the complexities surrounding attorney's fees awards that had accumulated over time under the traditional "lodestar" approach to attorney's fees (the product of the attorney's usual hourly rate and the number of hours worked, which could then be adjusted by the court to set "the reasonable fee"), and the separate "Johnson" approach (a one-step inquiry that considered twelve specified factors to establish a reasonable fee). 493 F.3d at 114. Relying on the substance of both approaches, we set forth a standard that we termed the "presumptively reasonable fee." Id. at 118. We directed district courts, in calculating the presumptively reasonable fee, "to bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate." Id. at 117 (emphasis in original). The presumptively reasonable fee boils down to "what a reasonable, paying client would be willing to pay," given that such a party wishes "to spend the minimum necessary to litigate the case effectively." Id. at 112, 118.

That is, the Court took two existing standards, melded them together into a third standard altogether, then directed district courts to use this new standard but to keep in mind "all of the case-specific variables" while also figuring out "what a reasonable, paying client would be willing to pay," which in turn suggests that the actual client (many of my clients pay by the hour) is not a reasonable client, and all the while the judge is to be second-guessing what the minimum necessary litigation is to "litigate the case effectively."

Seems simple enough! I'll plan on being in my office Saturdays as well as Sundays, now.

I need a break.

2011-11-23T19:00:00.001-08:00

This is a Sponsored post written by me on behalf of TravelPro for SocialSpark. All opinions are 100% mine.

Having just finished up my umpteenth trial in as many months ("umpteenth" is one of the lesser-known numbers in our system, but it's still a valid number), I am thinking it's about time for a vacation.

Someplace sunny. Warm. Exotic. Restful. Non-trial-y.

I could go to Europe, say, and see some historic sites and the Mediterranean and... whatever else it is they have in Europe. Or I could head to South America, where it's currently summer, and I could go to those beaches they have in Brazil, the beaches that you can't even Google at work because the women on them are so skimpily dressed.

There is one small problem with my dreaming of a vacation. Well, okay, TWO problems, the first being that my wife would likely NOT approve of a plan to go to those beaches, and the other being that I currently am not made of money and therefore I have limited... okay, no... funds for a vacation.

I don't know yet how to solve the first, but I do know how to solve the second problem: I've just entered the TravelPro sweepstakes that'll get me *fingers crossed* 500,000 miles from the Delta SkyMiles® Program.

Free.

As in: go around the world, free.

Travelpro is a luggage company that likes to note that frequent travelers and flight crews use their luggage because it's so tough-but-stylish. So it's only natural that they'd hold a contest like this, where they'll give a lucky winner two (2) Travelpro® Rollaboard® bags, and the aforementioned 500,000 Delta SkyMiles, miles you can use to go to Europse, Asia, South America -- almost anywhere in the world. And it's free to enter, so there's no risk whatsoever.

So, see what I mean? Lawyers are problem solvers, and I solved that problem pretty quickly. Now I just need to work on the Brazilian beaches thing. Maybe if I suggest Asia. They have beaches in Asia, right? I'm pretty sure they do. They have everything in Asia.

Anyway, while I work on that, why don't YOU enter yourself in the Travelpro sweepstakes, too: All you have to do is go to

http://travelpro.com/sweepstakes/

And sign up. No cost, no obligation. Just a chance to get away -- far away. And, ideally, to a beach.

Here's how the sausage is made. (My Actual Case Results)(Mortgage Issues)

2011-11-23T12:01:00.000-08:00

"Is this an attempt to block the foreclosure? You bet it is."
-- Me.

In case you were wondering why there is a mortgage crisis, and a concomitant dampening of the economy that ultimately will result in people electing a dumb-as-a-sack-of-hammers Republican because they don't understand that the President's role in the economy is comparable to my role in the operation of the Space Program, here is a glimpse inside the sausage-maker that is litigation over mortgages; the trial that (almost) finished up today is a microcosm of what went wrong in the mortgage industry and what continues to go wrong.

This is case number 09 CV 4883 in Dane County Circuit Court in Madison, Wisconsin. It's formal title is SunTrust Mortgage Inc. v. Vicki Lane, et al and my entry into this case came when we were retained by defendant Vicki Lane to help her defend against a foreclosure case filed by SunTrust Mortgage.

The background to Vicki's case is this: she is a middle-aged divorcee who back in 2004 and 2005 was looking for a place to live. She found a two-unit building, an upper-and-lower, on Gorham Street in Madison, and tried to buy the place, but didn't qualify for financing because she didn't make enough money to buy a $200,000 rental property.

So Vicki had a friend of hers buy the property and rent it to her, and her adult son -- each occupying one of the units -- in a nonprofit transaction for the friend, who was simply doing Vicki a favor by "lending his credit" to her. Vicki and her son's rent covered the mortgage and property taxes; the friend made nothing.

Vicki wanted to buy the building, though, and own it, and around 2006 began looking again to get a loan. She was then introduced to a broker at a company called "Fairway Independent Mortgage Company."

"You know what's not confidential? Trials."
-- Me.

I'm going to note that I fought hard for the right to expressly name Fairway Independent Mortgage Company" and otherwise talk about this case. So I'm going to name them. And SunTrust. It's all public record and people ought to talk about this.

Fairway ran Vicki's credit and told her that she would not qualify for a "conventional" loan at the time. So what Fairway did is what so many lenders at that time did: They put Vicki into an unconventional loan.

In this case, the loan chosen was a "No Doc" loan.

A "No Doc" loan is what it sounds like: You don't document anything. You simply say what it is you want to borrow and what the property is worth and apparently what your credit score is and you get the loan.

Seriously.

The "No Doc" loan was one of a limited few options available, the other one being a "Stated Income" loan, in which a borrower simply says what they have for income without providing proof of that income, and gets a loan.

The "Stated Income" loan option was rejected by Fairway for Vicki's case because it had a slightly-higher interest rate.

That's right: if, in 2006, you told a lender what you made, without documenting it, you paid a higher interest rate than if you simply didn't say anything about how much you made, period.

The "No Doc" loan was not without its own hidden intricacies. What Vicki had to do, according to Fairway, was show a sufficient amount of money in her bank account to justify the "No Doc" approach. The problem was, Vicki didn't make enough to have that amount of money in her bank account by the closing, so what Fairway eventually had her do was stop paying her rent -- with her friend's consent -- and use money she'd otherwise pay into her rent to build up her bank account.

No documentation meant, apparently, that nobody would bother to look at how the money got into the account.

I should note that Fairway wasn't just making up these criteria themselves. They were following the guidelines that were set out by SunTrust, which worked with Fairway at the time to provide just those type of guidelines. This practice allowed Fairway to make only those loans that SunTrust would want to buy from them, which was important to Fairway because Fairway makes money not from lending money, but from originating loans: They find a borrower, set up the loan, pay themselves a fee, and then assign or sell the loan, sometimes for a profit.

Fairway, in short, never intended to be Vicki's lender for a very long period of time, if at all. They intended to sell the loan.

Which, one could argue, could make someone like Fairway somewhat blase about whether or not Vicki could actually pay the loan back.

One could argue.

Vicki closed on the loan, and here is where the sides differ slightly: Vicki alleged that Fairway promised her it would refinance the loan in a year, while Fairway denied ever making such a promise.

Vicki felt that refinancing was important because Fairway had gotten her an interest only loan. Two loans, actually: A first and second mortgage totaling $200,000+, at interest rates of up to 14%. Vicki's combined payment on the loans was $1585 -- and that did not include property taxes, which are $300+ per month.

So Fairway set up a way for Vicki to own her house -- if she paid $1885 per month, on a loan on which she would never reduce the principal balance and would never gain any equity barring an increase in property values.

Vicki did not, though, try to refinance her property the next year, because she'd left her job and wasn't in a position to get a refinance. In 2009, she began trying to redo the loan, but ran into a brick wall at Fairway, which, when she contacted them to ask about doing a refinance, suggested that she contact a realtor to do a short sale.

Vicki didn't want to sell her property. She wanted to own it, and reduce her payments. She was paying credit-card interest rates on hundreds of thousands of dollars.

Now, between 2006 and 2009, Vicki had lost a job and her son Rick had moved out of the property and gotten his own place and she'd had some difficulties re-renting, and, of course, the economy went bad. So in all fairness to Fairway, refinancing probably wasn't a viable option... in 2009.

But while it was not an option, it was clearly a necessity, and it was a necessity because of the loan set-up in the first place: An interest-only non-escrowing loan made to someone who had no reasonable prospects of repaying this loan in the long term.

"They talk about an investor the way people in Narnia talk about Aslan."
-- Me.

Vicki, in 2009, not wanting to short-sell her property, contacted SunTrust, which by then was only the servicer on her mortgage. SunTrust had owned the loan but had sold it off to an investor.

We don't know who the "investor" is. The "investor" was not a party to this suit. The "investor" has no lawyer in this case. The "investor" was never even named by any witness that I can recall.

But there's an "investor."

SunTrust's job, in 2009, was simply to collect money and apply it to the loan. And to handle requests on behalf of the "investor." Requests such as the one Vicki made when, after she left her job at a retail store in March, 2009 because she couldn't physically handle the work anymore, she called SunTrust to ask them to modify her mortgage.

Vicki left her job in early March, 2009, and found a new job a bit later, doing home health-care type work that had her traveling around quite a bit. But at the end of March, 2009, Vicki was unemployed and had $1800+ per month in mortgage expenses, and she called up SunTrust to try to work with them to go on paying her mortgage.

Vicki testified that she faxed documents to SunTrust on March 30, 2009. On April 19, 2009, Vicki submitted a package to SunTrust asking for a modification; the package included a formal application, a hardship statement, bank statements, payroll records, and 2 years' tax returns.

In May, 2009, SunTrust sent Vicki a form letter telling her that she should gather up financial information and that she would be contacted soon by a SunTrust employee. The letter said to expect a decision in "30-45 days."

In June, 2009, Vicki had not heard from SunTrust. SunTrust phone records produced at trial showed that SunTrust, some two months after Vicki's formal packet had been submitted, had "activated" her "loss mitigation" account.

That, a witness flown in from some other state to testify for an hour -- presumably, at Vicki's expense, but we'll see -- marked the time that a "decisioner" would be appointed. I may be misunderstanding what this witness called the person responsible for reviewing Vicki's file, but I'm pretty sure they said "Decisioner."

Because why not have a stupid name for someone in an important job.

SunTrust claimed that they got 100,000 phone calls in 2009. My co-counsel thought the witness said "per month." I thought it was "in that year." But either way, SunTrust was claiming that it had a lot of requests for assistance. That was part of their defense for what happened: We were really busy.

"You see a lot of ads for stores hiring part-time holiday help right now. You know why that is? Because the holidays are coming and they know they're going to be busier. That's what companies do: when they get busier, they hire more people."

--Me.

Following Vicki's "activation" in loss mitigation, SunTrust never called her. SunTrust sent her only one other letter -- at least, only one other letter was produced in evidence at trial -- an October, 2009 letter saying that Vicki might qualify for loss mitigation options. SunTrust produced no records that it requested further information from Vicki. SunTrust provided no evidence that it had called Vicki, wrote Vicki, or done anything to help Vicki.

SunTrust's records, produced at trial, said that Vicki had called at least one time per month, sometimes more. Vicki testified that she provided updated bank records and a new application in September and October, 2009.

SunTrust records showed that SunTrust thought the house would be sold on July 7, 2009. SunTrust's records showed that the file twice in 7 months needed to be reopened. SunTrust's records showed that on November 23, 2009, the person responsible for evaluating Vicki's claims -- the "decisioner," if I heard right -- claimed to have not gotten any records from Vicki at all.

SunTrust, in the end, never acted on Vicki's request at all. At least not in any way that could be called "actually deciding whether or not to modify the loan."

Instead, SunTrust filed for foreclosure in late 2009, before ever telling Vicki whether or not her request had been denied.

Vicki testified that during those seven months she had repeatedly offered to make payments to SunTrust, but that SunTrust refused to accept payments from her. SunTrust's own records showed that Vicki offered to set up an escrow account to pay her property taxes, and Vicki during those months made payments to the second mortgage holder (until I told her to stop doing that.)

When SunTrust filed for foreclosure, Vicki hired my firm and we filed counterclaims and sued both SunTrust and Fairway. Fairway hired a Chicago law firm. SunTrust already had a big Wisconsin law firm. Vicki had me, and my small firm.

SunTrust and Fairway demanded to depose Vicki. We had to wrangle about whether SunTrust would provide witnesses and let them be deposed about that. We let them depose Vicki, and Vicki suffered through the first of many attacks on her credibility.

"If Vicki is a liar, she's the worst liar ever."
--Me.

SunTrust's main theory of attack was Let's get Vicki. They didn't say that; that's my characterization. SunTrust, which called exactly one witness at trial (a supervisor who was able to testify in only a limited manner about some records and who was on the stand for maybe an hour), spent the bulk of its litigation going after Vicki and calling her a liar, primarily based on what SunTrust thought were discrepancies in Vicki's applications. SunTrust noted that Vicki had filled in boxes on the application showing a budget for groceries, for example, of $300-$325 per month. But bank statements which Vicki had submitted at the same time showed that Vicki's expenditures were actually higher than that.

Keep in mind: SunTrust, when sued for violating Wisconsin law and acting unfairly, responded not by calling witnesses to explain what it had done, but by poring over Vicki's financial information to try to prove that she was a liar.

Remember that when you feel like you have a "moral obligation" to pay your lender: When you call your lender for help or get in a dispute with them, your lender will literally spend tens of thousands of dollars not to help you or prove what it did, but to disparage you.

SunTrust only knew about the differences between what Vicki put on her modification application and her expenditures because Vicki gave them her bank statements, prompting me to have to point out to the Court that it's a pretty pathetic liar who does that: Why, I wondered, would Vicki have tried to deceive SunTrust about how much she spent on groceries, only to give them a bank statement in the same packet that showed exactly how much she spent on groceries?

SunTrust also noted that on the April application, Vicki had listed credit card debts but on her October re-application...

... SunTrust never explained why Vicki had to re-apply for a modification...

...Vicki had not listed the credit card debts.

Vicki explained that she had hired a lawyer to file a chapter 7 bankruptcy, and that she believed that the chapter 7 bankruptcy had discharged those credit card debts, so she didn't have to list them in October when she re-applied for the modification she'd previously applied for.

SunTrust (which, again, provided little evidence in defense of its own actions or inactions) provided a search of bankruptcy courts to show that Vicki had not filed a chapter 7 bankruptcy at all.

Vicki then responded that she'd hired a lawyer and had paid the lawyer to file a chapter 7 bankruptcy (it wasn't my firm) and believed that she had filed a chapter 7 bankruptcy. Vicki explained that she didn't know anything about chapter 7s and thought that she'd filed.

SunTrust's sole witness, by the way, testified that the chapter 7 bankruptcy (or lack thereof) wouldn't have factored into its actions, or lack thereof, in any way.

So what was the point of a high-priced lawyer or three tracking down whether or not Vicki had filed a chapter 7 bankruptcy in 2009?

You tell me.

I say "high-priced lawyer," and that's accurate. I'll get to that in a bit.

Vicki throughout her litigation felt attacked and roughed up; she nearly dismissed her claims after the deposition, feeling so badly about how she'd been badgered by lawyers who didn't need to do that at all. And SunTrust wasn't done.

Vicki had, on her application for modification, noted that she and her son Rick were taking care of her ex-husband John. John, Vicki testified, had a brain injury and lived with Rick. Vicki pointed out in her application that it would be a hardship to move him.

SunTrust's lawyers, earning those big bucks, produced in the litigation some sort of internet search document claiming John Lane had actually died in 2006, before Vicki made those statements on the modification application.

Vicki, under oath, testified that was inaccurate. Vicki swore her John Lane was alive in 2009.

SunTrust then went and located a death certificate for a John Lane who in many respects matched Vicki's John Lane. SunTrust had this certificate validated and brought it to trial, where they confronted Vicki with it. Vicki testified that in some respects the John Lane on the certificate appeared to match her John Lane, but reiterated that her John Lane was alive in 2009.

Leaving aside for the moment the question of what Vicki would have gained had she lied about supporting John Lane in 2009 -- it's certainly of dubious use in a modification request to suggest that you're supporting an invalid when your budget is already stretched thin and you can't pay your mortgage-- consider this:

SunTrust dispatched its high-powered legal counsel to locate the "John Lane" listed in a 2009 application and find proof of some sort that there could not have been a "John Lane" living in the Gorham street property in 2009.

SunTrust did that, instead of "acting on Vicki's modification request" or "calling witnesses to explain what it did."

SunTrust opted to spend its money digging into every detail on a 2-year-old application, leaving no stone unturned in its quest to prove that Vicki was a liar... while spending little to no effort reviewing her mortgage application.

Remember that when you argue about a "moral obligation" to pay your lender. SunTrust, Vicki's servicer, spent more time at trial questioning Vicki about which "John Lane" might be dead than it did questioning the witness who was actually responsible for reviewing Vicki's loan application.

That's right. That person was named "Miah," and "Miah" was named as a witness that SunTrust's expensive lawyers were going to call.

But Miah never showed up.

Miah never testified at all.

No reason was given.

One could argue that the reason Miah wasn't called was because Miah claimed, on November 23, 2009, that she'd never seen Vicki's modification documents, documents SunTrust admitted it had, which means one of two things: Either Miah's note of November 23, 2009, was a business-record-y lie, or there was something wrong at SunTrust, something so wrong that more than seven months after Vicki first submitted her request and five months after her file was "activated," the person responsible for Vicki's file had not even seen it.

We don't know, because SunTrust didn't call Miah. SunTrust produced a death certificate for a "John Lane," though.

SunTrust and Fairway moved for "summary judgment," trying to avoid a trial, twice. The Court denied the first of those motions, finding that Vicki had enough evidence to go to trial on most of her claims: Vicki had sued Fairway and SunTrust for violations of Wisconsin's laws regarding mortgage brokers and bankers, alleging that SunTrust and Fairway had acted incompetently and improperly.

(The Court did dismiss a debt-collection related claim Vicki made against SunTrust, and found that whatever improprieties involved in the origination of the loan might have been, SunTrust was not directly responsible for them.)

The second of the two motions to avoid trial was filed just weeks before trial, arguing that Vicki could not prove she'd been damaged. The Court never acted on that motion.

Here's something interesting, though: The week before trial, I got a call from the lawyers representing Fairway and SunTrust. The primary reason for that call? These two high-powered lawyers had written down the wrong dates for trial.

Yep.

Originally, the trial had been scheduled for November 21 and 22. But in July, when SunTrust had asked for (and gotten) a judgment of foreclosure against Vicki that started the clock running on when she might have to leave her house -- I'm betting she won't have to, but that's not certain yet -- the Court had moved the trial to the 22nd and 23rd.

But a week before trial, the two high-powered lawyers who seemed to find me so ridiculous and annoying throughout this case had to call me to insist, first, that I do something because they'd only just realized that the trial was not on the 21st and 22nd but was two days later.

This is where I want to tell you how much SunTrust paid its lawyer, through July, 2011.

Seventy-four thousand dollars.

$74,000.

Plus. It was actually a little more. $74,000+ in fees were added into the judgment of foreclosure because when you get sued for foreclosure, you pay the lender's fees.

(Vicki may not end up paying those. We'll see.)

So Vicki was paying SunTrust's lawyers to beat her up in depositions and claim she was a liar, and for $74,000 these days you can't really get good help because for $74,000 you'd think you could at least buy a desk calendar, but who am I to judge?

So last Tuesday, a week before trial, I got a late phone call from these two lawyers who'd miscalendared, and they tried everything to get me to move the trial: they said I had to fix it, that I was wrong, that online court records were wrong, that I ought to agree to shorten the trial, this that and the other thing.

Because they hadn't planned on trying the case on the day that the Court was going to try the case.

I refused to bend and said they should do something about it.

And, ultimately, we showed up for trial on Tuesday, November 22.

Prior to that, Fairway and Vicki had almost agreed to a settlement -- on Friday afternoon, I had accepted on Vicki's behalf an offer of $20,000 to settle, but immediately things fell apart because Fairway wanted the deal to be confidential.

"She can't just point and say it's a sausage; she has to say how the sausage is made."
-- Me.

That's something I never agree to -- and even more so when the justification is that Fairway's employee -- Anissa Baker, who I've held off naming until now -- ought not to be given negative publicity.

You see, it's okay for a mortgage broker to make a loan based on unsound economic principals. It's okay for that broker and lender to then devote tens of thousands of dollars to trying to make someone look like a liar instead of simply justifying what they did. It's okay to take a middle-aged home health care worker and put her under such scrutiny and stress that she has to take sleeping pills and painkillers to deal with it.

But GOD FORBID you say something bad about the broker.

Anissa Baker, at Fairway Independent Mortgage Corporation, didn't deserve mean things said about her.

Vicki, though, apparently deserved to repeatedly be called a liar in court.

Moral obligations etc etc.

I rejected confidentiality and told Fairway the deal was off. So as of Tuesday, we had no deal whatsoever, but Vicki told me to try to make it again, with no confidentiality, so prior to the start of trial, I offered again: $20,000 with no restrictions on speech.

Fairway waited until lunchtime to accept that deal. Neither side admitted the other was right -- Fairway expressly still denies doing anything wrong -- but Fairway paid Vicki $20,000 after seeing Vicki testify in court.

Make of that what you will. Remember, though: Fairway expressly denies doing anything wrong.

SunTrust proceeded on through trial, even though Vicki has several times offered to keep paying her loan. Vicki's last offer, in fact, was that SunTrust ought to write the principal of the loan down and reduce the interest rate, and Vicki would then begin paying it, with the proviso that if she missed a payment, SunTrust would get their judgment of foreclosure without any further ado -- and for the full amount it felt it was owed, not the reduced amount.

Think about that. SunTrust rejected the offer, but it's worth thinking about: Vicki was saying "I'll pay you $300,000 plus over time" ($140,000 with interest over 30 years comes to several hundred thousand) "And if I don't, you win automatically. No starting over, no new pleadings, defenses, depositions, etc."

That's what's called a "Doomsday Stipulation." It's all-or-nothing and many lenders routinely enter into them in bankruptcy court. Vicki would be waiving every legal right she has, and promising to pay, and SunTrust would be at worst giving up some (but not all) of its profit.

Vicki gives up everything -- but stays in her house. SunTrust gives up almost nothing, and starts making money.

SunTrust didn't want that.

You know what's not clear? Whether SunTrust's investor -- let's call him Aslan -- wanted that deal. SunTrust's lawyer told me she hadn't spoken to the investor. Ever. Do you suppose that the person who is supposed to get Vicki's money knows what Vicki offered? It's not clear to me that he does.

So who's making the decisions here?

And why are they deciding those things?

In the end, SunTrust called their one witness, identified some records, provided no explanation for why, in seven-plus months it hadn't even told Vicki whether her request had been approved or denied, and then closed its case by arguing that Vicki hadn't proven her case.

The judge took it under advisement, and we don't know yet whether Vicki will win against SunTrust. She's already up $20,000 -- my fees are nowhere near $74,000+, because I'm not a big-shot lawyer with a big-time client -- and we'll see what happens.

But here's what I know and SunTrust seems not to:

Vicki can't lose, and SunTrust can't win.

Vicki can't lose because Vicki will maybe have to move out of this house -- maybe. We have a lot of other tricks up my sleeve. A lot. (I'm quite good.) But move or not, Vicki has to make a house payment. She wants to make that payment to SunTrust and live in this house, but either way, Vicki's end result is she gets to pay for the house she lives in.

SunTrust can't win because SunTrust is owed $300,000-plus by its account -- nearly 1/4 or more of that being lawyer's fees for this case only-- but the house in question is worth at most about $200,000. SunTrust will never collect any money from Vicki, for a variety of reasons. It will at best get paid the value of this house less the cost of sale -- or about $182,000-- and it will have to pay upkeep and property taxes until that house sells, further cutting SunTrust's profits.

So SunTrust, which has already shelled out at least $84,000 in fees and costs (it paid $10,000 in property taxes Vicki was willing to pay) will maybe net $98,000 from this house.

Tops.

In case you were wondering why there's a mortgage crisis in this country... wonder no more.

First crack at the Pepper Bar? Sign me up.

2011-11-23T11:51:00.000-08:00

I will be the first to tell you that (a) you should not take business advice from me, because (b) most of my business advice is premised on the theory that if I like something, it must be a great business, which I firmly believe but which experience, society, common sense, my boss, my wife, my partners, my friends, random guys on the street and yesterday's horoscope all tell me is not true.

Which is to say: I think opening a Quizno's Franchise would be a great idea, but maybe you want to talk to someone who isn't me about that, because you don't want to make any business decision based on just one guy saying something.

I mean, I see the benefits of owning a Quizno's franchise. Subs, and sandwiches, always seemed like a good investment to me: People love them, the shops themselves aren't big or expensive to set up, the lunches are inexpensive and never really go out of style. So there's that, and there's the fun of being your own boss and owning your own business: You get to decide who works when and where and not take orders anymore, and the profits are yours, not someone else's.

So there's lots of good points to owning your own Quizno's franchise, and I haven't even gotten into the idea that you'll have first crack at that Pepper Bar every day.

Honestly, Quizno's is one of the few sub shops I eat at and the one near my office seems to do really good business -- it's an informal-but-good place to eat in or carry out, so it tends to get a lot of the small-business types around us. And the Quizno's name is nationally known -- I see their ads all the time. Plus, if you're interested in owning a restaurant, going with a name-brand franchise could have its benefits, as you'll get the knowledge and expertise and recognition they get, too.

All good points, right? And now might be a good time to get into the franchise game: The economy's going to come back sooner or later, so you'd be investing at the bottom of the price, rather than later in boom times. Plus, Quizno's offers in-house financing, so even if banks are still leery, you might qualify for a loan to get your business going fast.

It's something to think about. Like I said: do your homework and don't just rely on me, but if you're thinking "I could be my own boss," well, maybe you could.

You'd think it has something to do with gardening, but it doesn't. (Interesting Judicial Comments)

2011-10-31T11:16:00.000-07:00

Insurers in Wisconsin need not be mulcted by extortionate or questionable claims if they adhere to the standards of care which we have set forth above.

-- Anderson v. Continental Ins. Co., 271 N.W.2d 368, 85 Wis.2d 675 (Wis., 1978), discussing why the rules Wisconsin adopted for bad-faith insurance claims won't lead insurers to pay claims they otherwise would rightfully have rejected.

What's interesting is that the sense in which the Supreme Court of Wisconsin used that word is only the 2nd or 3rd most common definition of the word mulct:

tr.v. mulct·ed, mulct·ing, mulcts
1. To penalize by fining or demanding forfeiture.
2. To acquire by trickery or deception.
3. To defraud or swindle.

(Source.) The picture is one of the many images that come up if you google image search mulct.

You have the right to remain... sexy?

2011-10-31T00:01:00.001-07:00

This is a Sponsored post written by me on behalf of Untitled Jersey City Project for SocialSpark. All opinions are 100% mine.

It’s been a while since I practiced criminal law, but I’m reasonably sure that you don’t ordinarily interrogate someone by mashing your mouth up against theirs…

…unless you’re questioning a hot woman in a car outside Jersey City – as you’ll see from this video:

That’s a promo for a show I can’t get enough of: “Untitled Jersey City Project” In one sense, it’s a glamour-and-crime-maybe-does-pay show, but in another, it’s completely unlike anything you’ve ever seen before.

Untitled Jersey City Project is told in eight separate, short-form episodes that each make up a piece of a larger story, spinning threads together and apart, which makes it a unique way of telling a great story – a story about a development on the Jersey City waterfront, just across from Manhattan, where a mixture of colorful (read: violent, sexy, dangerous, intriguing) characters are vying for power and money and, of course, hot women.

I’m not ordinarily a fan of shows like this – I thought TV was too glutted with them – but this isn’t like those other crime shows. It’s better-made, better-written, faster-paced, more interesting, and, because of the way they’ve chosen to tell the story (those free-ranging short form episodes) the arc of the story unfolds in a totally unexpected way.

Watch the video yourself and tell me what you think – and go watch the SHOW itself, too!

Pay-for-play, unless by "Pay" you mean "pay the fees for the lawyer of the people you ripped off." (Consumer Law Matters)

2011-10-27T07:02:00.000-07:00

This is a shared post between Publicus Proventus and Family and Consumer Law: The Blog.

How much does justice cost? That depends on who's doing the selling. If you're a Wisconsin court, justice can cost as much as $150,000. If you're a Wisconsin legislator, "justice" goes at the bargain basement price of $10,000.

Recently, the Wisconsin Assembly introduced a bill that would limit attorney's fees to a maximum of 3 times the award of compensatory damages awarded to a plaintiff in a case. The bill, in its current form as SB12, creates a new statute that incorporates the traditional factors that go into determining an attorney fee award in fee-shifting cases, and would apply the 3x-limit only to cases in which compensatory damages are awarded. In a case where only injunctive or declaratory relief is awarded, a plaintiff could still get a full award of fees, while if you get an award of damages and injunctive relief, the court must merely presume that the 3x cap is reasonable.

On its face, this statute is absurd. It applies across the board, meaning that mortgage brokers under chapter 224, negligent banks under section 138.052, lenders who don't provide notice to tenants, landlords who fail to make promised repairs or rent life-threatening apartments, and, last but not least, murderers, cannot be hit up for attorney's fees.

That's right: The Republicans want to make sure murderers and thieves don't pay more than a nominal amount of fees. Section 895.446, the "treble damages" statute, allows for an award of compensatory (or "actual") damages, plus tripling of those, plus actual fees, for people who are (among other things) victims of theft by fraud and crimes against bodily security. This bill would help immunize people like that from getting sued by making it harder for people to pay their lawyers.

Most consumer cases, of course, are over relatively nominal amounts of money -- with the attorney's fees/fee shifting being used to encourage attorneys to take on these cases and enforce consumer protection laws. With an attorney general who's more interested in letting the governor off the hook than enforcing consumer protection laws (J.B. "Van" Hollen once said most consumer complaints amount to people crying about not getting enough Chicken McNuggets) that type of private enforcement...

...private enforcement, Republicans, by private businesses like mine, which employs 33 people in our office alone...

... would seem important, unless it's more important to you -- "you" being "Republicans" -- to sell a little "justice" old-school style, by taking money to pass laws:

Republicans in the Legislature are trying to pass a bill to cap attorney fees that can be awarded in response to a case in which a firm owned by a GOP donor had to pay more than $150,000 in legal costs. The legal fees were included in a settlement after a man who bought a car from John Lynch Pontiac-Chevrolet alleged he had to pay nearly $5,000 for repairs he never approved. In response, Rep. Robin Vos (R-Burlington) has written a bill that would limit the amount of attorney fees that could be paid in such cases to three times the amount that is disputed in a case. In the Lynch case, the attorney fees would have been limited to $15,000 because the case centered on $5,000 in repairs. The Burlington dealership is owned by David Lynch, a Vos constituent who has made 36 contributions to Republicans totaling $10,650 since 2008. He gave nothing to Democrats during that time.

(S0urce.) Lynch, of course, is mad that he had to pay $151,000 in legal fees in the case he got sued in. Those are fees he agreed to pay, in a settlement, but why should a good, cash-carrying businessman be held to his agreement when there are legislators to be bought and sold?

Should Lynch be mad? Should he be able to buy a change in legislation that will let him rip people off in the future? Before you decide, consider the actual opinion and the background facts of the case that got Lynch so mad he decided to buy himself some "justice," Republican-style.

The case in question is captioned Kaskin v. John Lynch Chevrolet-Pontiac, 767 N.W.2d 394, 2009 WI App 65 (Wis. App., 2009). Kaskin was a guy who bought a brand new truck and when it hit 3300 miles, developed some troubles with it. So he took it to John Lynch, which provided him an estimate of one penny to repair it -- because John Lynch, owned by a major Republican contributor, assumed that the truck was under warranty.)*

*What was that thing my third grade teacher said about assuming things?

A week later, John Lynch, owned by a Good Republican, called Kaskin and said that bad fuel had ruined the injectors and they'd replaced them all. Oh, and, they added, You owe us $5,000 smackeroos.**

**Not a direct quote from the Good Republican.

Kaskin didn't think he should have to pay; after all, he'd been estimated one penny as a cost, hadn't been asked whether they should go ahead, and now owed $5,000 smackeroos. But John Lynch, owned by a Good Republican, would not release this truck.***

***I note that by repairing the truck before telling Kaskin what the problem was -- the claimed bad fuel -- John Lynch, owned by a Good Republican, may have done the car manufacturer or the gas dealer a favor there. If "bad gas" really had ruined the fuel injector, a questionable proposition given that "bad gas" typically requires buildup to ruin a fuel injector and the car had only been driven 3300 miles so far, then Kaskin could have maybe figured out where he bought the bad gas and tried to hold them liable for the $5k. If, on the other hand, it was a fuel injector problem, Kaskin might have had remedies against the manufacturer under laws like the lemon law. But by repairing the problem without even telling Kaskin, John Lynch, owned by a Good Republican who was no doubt watching out for other "small" (giant) corporations, might have spoilt the evidence, which in turn could eventually have prohibited Kaskin from making a claim against those other potential culprits.

Hmmm.

So Kaskin paid the $5,000 smackeroos -- I promise that's the last time I'll use that word in this post -- and sued, ultimately losing in the circuit court because, the court reasoned (siding with John Lynch, owned by a Good Republican and therefore entitled to special treatment in the legislature, if not the Court of Appeals, as we'll see) Kaskin hadn't suffered any pecuniary loss: He'd paid $5,000, and gotten $5,000 worth of repairs.

Not so fast... the Court of Appeals didn't say, but should have. The circuit court said that it didn't matter if Kaskin authorized the repairs or not -- remember, he'd said that John Lynch, Good Republican Car Company, could go ahead with repairs if they cost no more than a penny -- but the Court of Appeals thought otherwise because they did something I like to call "reading the law."

In fact, they began their opinion by making everyone else do just that:

WISCONSIN ADMIN. CODE § ATCP 132.09(1), (4)(e) (Oct.2004) states, in pertinent part, that "[n]o shop may ... [d]emand or receive payment for unauthorized repairs, or for repairs that have not been performed." We hold that a major purpose of this provision is to prevent either unexpected repairs, unexpected expense or both. Therefore, if the work done here was unauthorized, then the harm to the consumer, Randy W. Kaskin, was that he was deprived of his prescribed right to be informed and his concomitant right to consent or refuse consent. The remedy for a violation of this right is that the repair shop must forego being paid, even if the shop did, in fact, satisfactorily repair the vehicle.

If you're John Lynch, owned by a Good Republican, that's not starting off on the right foot for an appellate opinion in case accusing you of doing unauthorized repairs. It's always easier for people who want to rip off consumers if you don't, you know, read the law, the requirements of which the Court of Appeals said are both "clear cut" and "stringent."*4

*4 Don't you just hate it when you're subject to a clear cut and stringent law that says "Maybe you should call your customer and let them know you're going to charge them five thousand simoleons [I made no promises about other slang] before you actually hold their brand new truck hostage?

But, I mean, what's the big deal with telling consumers what you're going to do and what it's going to cost? That is, can't you trust a company owned by a Good Republican?

Apparently not, as the Court of Appeals found reason to explain. The idea of requiring authorization is to have informed consent for repairs, and

The "informed consent" concept is an integral part of consumer protection law, not only here, but across the nation. Many states have adopted stringent rules regarding motor vehicle repair. See Jay M. Zitter, Annotation, Automobile Repairman's Duty to Provide Customer with Information, Estimates, or Replaced Parts, Under Automobile Repair Consumer Protection Act, 25 A.L.R.4th 506 (2008). These states have crafted statutes or rules requiring disclosures by automotive repairers before work is begun, just as this state does. Why? Washington State's automobile repair law provides an answer. Its code "is a consumer protection statute designed to foster fair dealing and to eliminate misunderstandings in a trade replete with frequent instances of unscrupulous conduct." Bill McCurley Chevrolet, Inc. v. Rutz, 61 Wash.App. 53, 808 P.2d 1167, 1169 (1991).

A trade replete with frequent instances of unscrupulous conduct? How DARE the Court of Appeals imply that John Lynch, owned by a Good Republican, would do something unscrupulous. He hadn't even tried buying a change in the law to immunize him from further consumer protection lawsuits based on him scamming customers yet!

But to make up for implying that sometimes car repair shops might act less than scrupulously, the Court of Appeals gave John Lynch, owned by a Good Republican, a Good Idea:

The repair shop ...believe[s] this construction to be unfair, especially if, as they claim is undisputed in this case, the repairs made actually fixed the vehicle in a satisfactory manner such that the consumer received a valuable benefit. We understand that and commiserate with the repair shop and amicus curiae to the extent that the repair shop acted in good faith in not engaging in excessive and unnecessary repair. But to paraphrase an oft-repeated and now trite expression, the law is what the law is. If the association feels that the statutory damage provision is out of proportion to the harm done by the lack of authorized consent, its recourse is through the legislature.

That was back in 2009 when the Court of Appeals issued that opinion. April, 2009, in fact. So, one might ask, why didn't John Lynch, owned by a Good Republican, go immediately to the legislature to demand that the law not be what the law is?

One might ask.

Perhaps, one might then theorize, John Lynch didn't go running to the legislature because John Lynch went on to read what else the Court of Appeals said:

And frankly, our view is that the requirement of a written repair estimate with an estimated price is a simple procedure that does not impose a great economic burden on repair shops. This is important because the policy makers in this instance obviously weighed that insignificant cost to the marketplace against the need to curtail the persistent practices of exploitive merchants bent on targeting the unknowledgeable motor vehicle owner. The policy makers no doubt intended to protect consumers against misunderstandings arising from less-than-clear estimates and the legal disputes and litigation that result from the fait accompli nature of claims for repair work already done.

I'm sure that was it. I'm sure that John Lynch, owned by a Good Republican, was not just lying in wait and contributing only to Republican causes until the Republicans captured the legislature and he could buy himself a law that would make it okay to engage in persistent practices ... bent on targeting the unknowledgeable motor vehicle owner.

In fact, I bet that it was simply a change in the market. Economic downturn and all that, right, that made the insignificant cost of "asking a customer to approve a repair before doing it" no longer insignificant.

That was probably it.

Even then, the case wasn't over: the Court of Appeals simply remanded for the circuit court to determine whether Kaskin had actually authorized the repairs... and Lynch promptly settled, paying the $150,000 in fees plus damages.

Now, keep in mind, that John Lynch, owned by a Good Republican, had many many options. They could have

(a) called the manufacturer to ask if the repairs were under warranty.
(b) called the customer to ask if he had determined that the repairs were under warranty
(c) called the customer to say "Repairs'll be $5,000, want us to do them?"
(d) once they realized the customer was mad, they could have refunded some or all of his money, losing only $5,000.

They didn't do any of that. They chose to litigate, and litigate so strenuosly that they and their opponents racked up a presumed $300,000 plus in lawyers' fees -- suing over whether the customer should or should not have paid $5,000.

In other words, John Lynch, owned by a Good Republican, felt it was worth spending $150,000+ in lawyers' fees to defend his right to keep $5,000 -- but felt it was unfair that Kaskin got to spend $150,000+ in order to not pay $5,000.

In other other words, John Lynch, owned by a Good Republican, wanted an uneven playing field. He wanted to force a consumer, who doesn't know about repairs and wasn't given a choice in this case to litigate against a well-heeled car dealership, with the outcome being at best the consumer would get $5,000. Which means that absent the fee-shifting provision built in to the statutes, Kaskin would never have sued.

Never.

And the consumer protection laws requiring that repair shops get your permission before charging you $5,000 and then holding your car hostage until you pay it would be meaningless.

THAT is what your Republican Party stands for nowadays. Your right to get ripped off by people who know more than you and can't be bothered to make a phone call to get your permission.

Ironically, I'm WRITING this at work.

2011-10-27T06:01:00.001-07:00

This is a Sponsored post written by me on behalf of Net10 for SocialSpark. All opinions are 100% mine.

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Credit where credit is due... (Interesting Judicial Comments)(My Actual Case results)

2011-10-26T07:56:00.000-07:00

Judge Richard Niess, Branch 9 of the Dane County Circuit Court, is the judge I ran against last year. But, as evidenced by the hearings I attended this morning (October 26, 2011), Judge Niess not only gets it about mortgage foreclosures, but also has a colorful way of ruling -- and I'd quote him anyway because I liked the way he put these phrases, but it helps that he was ruling in my favor on the one case.

The first case was one in which BAC Home Loans Servicing had moved for default judgment, and the borrower had objected and filed an affidavit of excusable neglect as well as a proposed answer. In denying the default judgment and accepting the answer, Judge Niess noted that Bank of America, not BAC, had moved for judgment, but wasn't yet a party, and also noted that BAC had, apparently sometime after serving the borrower but before the answer was filed, contacted the borrower to attempt to work something out with her:

"That was a head-fake,"

said Judge Niess, and ruled that BAC's possibly-not-for-real modification offer justified the defendant in not having yet filed an answer.

Then it was on to my case, where the lender (an assignee of the original lender) had filed an affidavit with an uncertified assignment of mortgage, among other deficiencies. We responded by citing to Palisades v. Kalal, HSBC v. Griswold, and PHH v. Kolodziej, and asking that summary judgment be denied; we also filed a motion to dismiss the complaint, without prejudice, on equitable grounds, for filing a motion that was knowingly insufficient.

Judge Niess asked Aurora's attorney, at the outset, for a reply to our response, and before she could begin, he said (of my response to summary judgment) that it appears

"He's got you by the short hairs."

Aurora's lawyer got as far as admitting that the assignment wasn't certified and Judge Niess cut her off, saying that

"The triumvirate of cases from Judge Vergeront [that I cited]... are the most-cited cases in the Dane County Circuit Court... They don't publish these cases because they deem the conclusions are so obvious..."

And denied summary judgment. He denied the motion to dismiss, too, but warned opposing counsel that she ought to tell her fellow lawyers that "more and more of the court's time" is being taken up with insufficient motions and that these cases have been around for six months or longer and are dead on.

So it was win-win for me, and kudos to Judge Niess for making a quick and correct decision, as well as for pointing out to the mortgage lender that it better start actually reading the cases the Court of Appeals is issuing.

Lessons in unpublishing and bad lawyering (Mortgage foreclosure)

2011-10-20T11:13:00.000-07:00

Oh what a tangled web we weave,
When first we practise to deceive!

I hate starting anything with a quote; it's lazy writing, and while I'm a lazy guy, I'm not a lazy writer, but I couldn't think of a better way to start off a discussion of Black River Country Bank v. Gerdes, a case that combines so many things near and dear to my heart, like:

1. Mortgage banker regulations.
2. Foreclosures.
3. Credit card debts,
4. Child support liens,
5. Bad lawyering.
6. Bad judging.

This case has everything! And then some.

Black River Country Bank decided one day to foreclose on Duane Gerdes, seeking to recover money owed on a note and mortgage and also money owed on a Visa credit card; and, as foreclosure cases tend to go, they won, and then, also, as foreclosure cases tend to go, they bid on the property and bought it for $109,000.

Black River, though, forgot one small detail: they didn't actually name all the proper defendants, including failing to name a junior lienholder, Duane's ex-wife, Julie, who had a lien to secure delinquent child support.

So Julie got herself a lawyer who got himself some information and then objected to the confirmation of the sale, on the outrageous (as Black River viewed it) grounds that the Bank wasn't owed everything it said it was owed.

I mean, is that any reason to not pay a Bank? Just because you don't owe them that money? What is this world coming to, when lawyers can keep banks from just taking anything they want?

So Julie's lawyer objects and says it looks like maybe the Bank wasn't owed everything the Bank claimed it was owed, and the Bank says, well, sure, maybe we included a few extra thousand that we never actually paid out, but, hey, it's all fun and games, right?

Or, as the Court of Appeals put it:

A second hearing on the surplus issue was held on January 6, 2010. At this hearing, an attorney for BRC Bank admitted that three items were incorrectly included in the amount the Bank alleged it was owed on the notes. The three items were amounts BRC Bank had not actually paid: real estate taxes ($3,000.00), a transfer fee ($327.00), and an insurance premium ($137.50). Thus, the Bank admitted, in effect, that it had obtained from the proceeds of the sheriff's sale a sum totaling $3,464.50 relating to amounts that it was not owed under the notes.

At this second hearing, the parties debated the status of Duane's credit card debt ($2,493.97) and whether that debt was properly included as an amount recoverable by the Bank in the foreclosure action. The Bank's president testified, and credit card documents were admitted. The president testified that the credit card debt was "secured" by Duane's real estate. However, nothing in the credit card documents executed by Duane indicated that the Bank had any right to collect money from Duane with respect to credit card debt. Rather, the credit card documents indicated an agreement between Duane and Elan/Visa. Under a separate agreement between the Bank and Elan/Visa, the Bank was entitled to share a portion of the collections and losses.

"Details, shmetails," as I always (never) say. That little hearing led to the Circuit Court ruling that the Bank had violated section 224.77*

*which might mean I have to stop saying I had the first trial in Wisconsin on mortgage banker violations, except that I'm not sure that this was a trial. Might have just been a hearing. Mine was a trial.

and that the 224.77 violation was a violation of section 100.20(5), Stats., which, I must admit, confused me:

Section 100.20(5) Any person suffering pecuniary loss because of a violation by any other person of any order issued under this section may sue for damages therefor in any court of competent jurisdiction and shall recover twice the amount of such pecuniary loss, together with costs, including a reasonable attorney's fee.

I don't know what the authority for DFI-Bkng 43.01 was, so it's hard for me to tell if DFI-Bkng

DFI-Bkg 43.01 Improper, fraudulent or dishonest dealing. The following conduct, without limitation because of enumeration, constitutes improper, fraudulent or dishonest dealing by a mortgage banker, mortgage loan originator or mortgage broker prohibited by s. 224.77 (1) (m), Stats.:

(1) Using or permitting the use of any document which contains erroneous or false information.

(2) Making or causing to be made any false, deceptive or misleading statement or representation in regard to services being offered by the licensee.

was an "order" under section 100.20(5), but I doubt it was, as the "Department" for 100.20(5) (I always thought) was DATCP (or maybe DOJ) but didn't ever seem to be DFI, and I'm also certain that section 224.77 itself isn't an order under section 100.20 because it's a statute, not an order, and also-er, section 224.77 has it's own penalty provision under 224.80, Stats.

But, you know, Black River's lawyers, who didn't seem to be too on the ball here, didn't make that argument (or at least it wasn't addressed in the Court of Appeals' opinion)**,

**The Bank did appear to argue that its misconduct wasn't causally related to Julie's losses:

BRC Bank contends that the court's reliance on Wis. Stat. § 100.20(5) was in error because an award doubling the loss plus attorney's fees under this statute requires an "unfair trade practice" and a "pecuniary loss" flowing from the unfair trade practice. BRC Bank cites Tim Torres Enterprises, Inc. v. Linscott, 142 Wis. 2d 56, 70, 416 N.W.2d 670 (Ct. App. 1987), for the proposition that a claimant under § 100.20(5) must show a "causal connection" between the unfair trade practice and the pecuniary loss suffered. BRC Bank argues that it follows that "there must be some evidence that the claimant was in fact damaged by the conduct."

But did not appear to argue that there was no order issued under section 100.20 that prohibited its conduct.

so if Julie got away with arguing that a violation of section 224.77 is punishable under section 100.20 because Black River's lawyers didn't care, that's the way it goes (and the case is an unpublished per curiam opinion anyway, so it's not like anyone can use it, which makes no sense because all this effort went into producing an opinion that is of no value to anyone outside of the case itself.)

So: the circuit court awarded Julie what it found to be the surplus that should have existed; Black River (actually a subsidiary, but whatever) had bid about $109,000 on the property but it wasn't owed $109,000:

As to damages, the court awarded Julie three amounts that the court determined were improperly held by the Bank, rather than being paid as surplus. The three amounts were: $3,000.00 (representing the real estate taxes not paid), $327.00 (representing the transfer fee not paid), and $2,493.97 (representing the credit card debt the court concluded that the Bank was not entitled to recover in the foreclosure action). The court, relying on authority in Wis. Stat. § 100.20(5), also doubled the $2,493.97 award relating to credit card debt based on its conclusion that the Bank had engaged in unfair trade practices....

In effect, the circuit court determined that, regardless how BRC Bank arrived at its bid/purchase price, the Bank could retain only the amount it was owed under the notes. The court determined that that amount was $103,679.03 ($109,500 - $3,000 - $327 - $2,493.97). And, the circuit court determined that, as a sanction for the underlying unfair trade practices, BRC Bank should pay Julie the attorney's fees and costs and double the amount relating to the credit card debt.

I just have to say again that I believe that the latter ruling about the credit card debt is completely unsupported by any statute I know of, so if someone reading this thinks otherwise, let me know.

But Black River, which then had to pay Julie about $9100 (plus about $7100 in attorney's fees) decided that it was no way going to sit for this, and appealed, because of course it makes far more sense to file an appeal than to pay $16,000...

... unless you lose on the appeal. For fun, I counted the number of times Black River didn't even seem to be trying:

BRC Bank does not seriously dispute that, based on the amount it actually bid for Duane's property at the sheriff's sale, there was an amount the Bank should have paid to the sheriff as a surplus.

BRC Bank's arguments are not developed. The Bank cites several cases, but does not meaningfully explain why they should govern here

The Bank does not, however, bother to identify the elements of claim preclusion, much less apply them to the facts here

BRC Bank seemingly assumes that, if the credit card debt was "secured" by Duane's residence, then it is obvious that the Bank was permitted to recover that debt in the foreclosure action. It is not obvious.

BRC Bank's argument in this respect is both short and unpersuasive

Similarly, the Bank states, without elaboration,

BRC Bank did not object at the time, and we discern no reason why it could not have done so.

The Bank appears to argue that, any time a circuit court obtains information through an ex parte communication, reversal is required. But the Bank does not back up that claim with a fully developed argument.

BRC Bank does not reply to Julie's arguments as to why she suffered a loss. We are uncertain what BRC Bank thinks with respect to the circuit court's view of why the entire course of dealing with Duane harmed Julie.

BRC Bank does not reply to Julie's arguments as to why she suffered a loss. We are uncertain what BRC Bank thinks with respect to the circuit court's view of why the entire course of dealing with Duane harmed Julie.

BRC Bank does not reply to these assertions.

Julie requests attorney's fees and costs relating to this appeal. She contends that such fees are authorized by Wis. Stat. § 100.20(5), as interpreted in Shands v. Castrovinci, 115 Wis. 2d 352, 340 N.W.2d 506 (1983). We agree that Shands supports this proposition. See id. at 354, 359. BRC Bank's reply brief is silent on the issue.

BRC Bank does not attempt to demonstrate that the circuit court did not confuse the two cases.

Whew!

Two other issues of import, here: First, the circuit court engaged in some prohibited ex parte contact that the Court of Appeals appears to say wasn't exactly okay, but was understandable; the Court called an attorney who heads the Wisconsin Bankers Association, anonymously, to ask about whether Black River could include this credit card debt in the mortgage. The answer the Court got is complicated, because the issue is complicated: apparently, Black River had some agreement that it would let its customers get a Visa, and then would get paid money by Visa, not by the customers, which meant that the Visa wasn't really a card included in the dragnet clause, and that may have left you all in the dust here if you didn't read the opinion, so don't worry too much about it, just focus on this. The Court called the expert, got an answer that did not favor Black River, Black River didn't object at the hearing where the Court announced that it had done this thing (which is apparently prohibited by the ethics rules), and the Court of Appeal summed it up this way:

In essence, the court was looking for a legal answer to a question it believed the parties had not sufficiently addressed. So far as the court's statements reveal, the court was interested in the correct answer to this question, not an answer that favored one party or the other. Thus, we find no basis for a conclusion that the Bank was denied an impartial decision maker.
...The circuit court was interested in the answer to a legal question, and the court believed it obtained the answer to that question from a reliable source. The question then is what BRC Bank would have done had it had an opportunity to respond. The Bank does not tell us.
We observe that the answer to the question the circuit court posed to a third-party expert remains in dispute on appeal. In the preceding section, we explained that BRC Bank does not, even at this late date, present a developed argument on the topic. So far as we can tell, the circuit court was faced with essentially a bald assertion by the Bank that it was entitled to recover the credit card debt in the foreclosure action because the debt was "secured" by the residence, and Julie's response that nothing in the documentary evidence supported that assertion. So far as we can tell, Julie is correct that nothing in the documents supports the conclusion that the credit card debt could be recovered in the mortgage foreclosure action.
We conclude that there is no reason to suppose that the court's consultation with a third-party expert without advance notice to the parties improperly changed the outcome of the proceeding.

Here's what I have to say about that:

First, Courts exist to answer legal questions that the parties themselves cannot answer. When a court say "so far as we can tell" something is something else, that's a legal ruling. The Court of Appeals (and the circuit court) unnecessarily hedged their bets. For cryin' out loud, just RULE ON THE ISSUE and try to get it right.

Second, consider this quote more closely:

So far as the court's statements reveal, the court was interested in the correct answer to this question, not an answer that favored one party or the other.

Courts should always be interested in the correct answer to the question -- but that quote (a) implies that the "correct" answer is one which doesn't favor one party or the other and (b) undermines the adversarial system on which our entire judicial process is based.

We have not set up a system where judges act as investigators and determine the correct answer. We have set up a system where the parties, as adversaries, put their best foot forward and the Court must rule on the questions before it. Each side generally does give the interpretation that favors that party.

That's the way the system is set up.

So to approve of a court going outside the boundaries of the system ex parte and answering a key question in the case by shrugging and saying "Meh. You two were always bickering so I asked this other guy" undermines the validity of our system.

Especially when this was available:

907.06(1), Stats. Appointment. The judge may on the judge's own motion or on the motion of any party enter an order to show cause why expert witnesses should not be appointed, and may request the parties to submit nominations. The judge may appoint any expert witnesses agreed upon by the parties, and may appoint witnesses of the judge's own selection. An expert witness shall not be appointed by the judge unless the expert witness consents to act. A witness so appointed shall be informed of the witness's duties by the judge in writing, a copy of which shall be filed with the clerk, or at a conference in which the parties shall have opportunity to participate. A witness so appointed shall advise the parties of the witness's findings, if any; the witness's deposition may be taken by any party; and the witness may be called to testify by the judge or any party. The witness shall be subject to cross-examination by each party, including a party calling the expert witness as a witness.

I mean, was anyone involved in this case familiar with the statutes? The Circuit Court, if it had all these questions, could have appointed this lawyer as its expert and complied with the statutes, but it didn't because... well, I don't know why, except that because Black River didn't object the circuit court got away with it and the Court of Appeals just shrugged and said okay, well, whatever.

You know, courts aren't required to buy one side or the other. Both the circuit court and the Court of Appeals could've said "You're both all wrong about everything and here's how the law rules" and done it right, so it's probably a good thing this case died before it ever got going, being unpublished and all, except that maybe unpublishing something lets you be sloppy like this. (Per curiam opinions are typically drafted by staff attorneys which is one reason they're not citable, but judges still have to sign off on them, and if they're not paying attention then staff attorneys are acting essentially as unelected appellate judges. Anonymous ones, at that.)

That was one of the two things remaining; the other was an agreement that Black River's failure to name Julie as a party didn't limit her to remedies set out in the Buchner ruling, a case in which the Court held that a junior lienholder's rights couldn't be expanded simply because they weren't named in the case; the Court of Appeals' Unnamed Appellate Judge Staff Attorney who wrote this opinion got that one right, holding that foreclosures are equitable cases and that this was a reasonable equitable remedy.

Hey, one of out of a zillion isn't bad, right? So in the end, what did we learn? I'd say it's: If you're not good at lawyering, hope that the courts are even worse.

Wisconsin Representative Joel Kleefisch thinks it's okay to have defrauded your future husband or wife -- in the past! (Family Law Matters)

2011-10-18T06:35:00.000-07:00

... and wants to make it the law that it's okay to do that. Or, more accurately, to have already done that!

Currently, under Wisconsin law, a prenup -- or, as it's actually, legally, called, a marital property agreement, is not binding on a divorce court at all unless the parties agree that it should be; in the event that they agree that a marital property agreement (or pre-divorce agreement, as the case may be) should be considered at divorce, the terms of that agreement are binding on the court with only limited exceptions.

One exception that allows a court to set aside a marital property agreement/predivorce agreement is whether the agreement was fair, and the law puts the burden on the party trying to prove the agreement is unfair:

767.61(3)(L) Any written agreement made by the parties before or during the marriage concerning any arrangement for property distribution; such agreements shall be binding upon the court except that no such agreement shall be binding where the terms of the agreement are inequitable as to either party. The court shall presume any such agreement to be equitable as to both parties.

Another situation in which the legislature has determined a court can set aside a marital property agreement is when it would leave the spouse a public ward:

766.58(9)

(a) Modification or elimination of spousal support during the marriage may not result in a spouse having less than necessary and adequate support, taking into consideration all sources of support.

(b) If a marital property agreement modifies or eliminates spousal support so as to make one spouse eligible for public assistance at the time of dissolution of the marriage or termination of the marriage by death, the court may require the other spouse or the other spouse's estate to provide support necessary to avoid that eligibility, notwithstanding the marital property agreement.

That's not enough protection for Representative Joel Kleefisch, who recently introduced a bill to let future spouses defraud each other without consequence:

2011 Assembly Bill 235 would create section 767.345 of the statutes, which would not actually eliminate the consideration of a pre-nup as a factor in property division and maintenance, but which would have the same effect. The bill reads:

767.345 Approval of premarital agreements.
Notwithstanding s. 767.61 (3) (L), if the parties in an action for an annulment, divorce, or legal separation executed a written agreement before the marriage concerning any issue arising in the event of the dissolution of the marriage, the agreement is binding on the court with respect to any of the following:

(1) A division of property.

(2) Maintenance payments.

SECTION 2.0
Initial applicability.
(1) This act first applies to actions for annulment, divorce, or legal separation
that are commenced on the effective date of this subsection.

That is a far reaching bill -- note the part about what actions it applies to, a part that didn't get any mention in this article about the bill. What that part means is that if you entered into a prenup at any time, and then filed for divorce after this section became law, the pre-nup would be binding on you with no recourse even for fraud.

Kleefisch's (stupid) argument is that people can protect themselves against fraud, in part by hiring an attorney, saying:

"It's caveat emptor in this case....

Obviously, someone entering upon a prenuptial agreement should be consulting with an attorney.

....Unfortunately today we often see people marrying for money or for other notorious purposes rather than love, if you will... so I brought this bill forward to say that if someone enters into a premarital agreement, that is binding in the courts so someone doesn't have the motive to marry someone based on money and based on the fact that they can get a good attorney...to come in later and change the prenuptial agreement in bad faith.

(Side note: Republicans blather on about protecting the sanctity of marriage, and then go and say something like that, showing what they really think of marriage: it's mostly gold-diggers trying to get Joel Kleefisch's constituents' money.)

Note that Kleefisch is arguing that bad faith in entering into the agreement would not allow you to set it aside, a move he says is justified by people trying to in bad faith later on set aside agreements.

Here's an actual exchange about the bill when it was debated:

Hebl: "If a person does act in bad faith, there's no question that their action is protected by this law."

Kleefisch: "Which is why someone entering into a prenuptial agreement should be very careful."

Hebl, visibly shocked: "Well my God...It justifies illegal, immoral, unfair behavior."

What Hebl said is practically a rallying cry for the Republican party these days, but even with that, I don't expect the bill go very far.

Michigan wants to make things more confusing for you, more lucrative for unemployed consumer lawyers. (Consumer Matters)

2011-10-12T06:46:00.000-07:00

On September 1, the Michigan "New Scanner Law" went into effect, allowing retailers to stop marking the price of an item on the item itself, and instead display the price of the item somewhere kind of nearby. From the Michigan AG's office:

In March 2011, the Michigan Legislature passed the Shopping Reform and Modernization Act ("Scanner Law"), with an effective date of September 1, 2011. While the new Scanner Law retains many provisions of the former Pricing and Advertising of Consumer Items Act ("Item Pricing Act"), the most fundamental change is that retailers are required to display the price of items offered for sale in the store at the place where the item is located, but are no longer required to individually mark the price on the item itself. The new Scanner Law permits the price to be displayed by signage, electronic reader, or any other method that clearly conveys the price to a consumer when in the store at the place where the item is located.

Take that for what it's worth; the Michigan AG's office disclaims its own authority to tell you what it thinks about the laws it enforces.*

*From the site: "The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General."

How's the law working out? One local blogger couldn't figure out how much the discounted shirts he wanted really were going to cost:

While it's probably too early to blame it on the New Scanner Law — which lets retailers display the price of items at the place where the item is located but no longer requires prices on the items themselves — I had a terrible time figuring out how much some items cost this weekend.

At one store, the sign on a shelf of polo shirts read that they were on sale for $7.48, which was a great deal considering their usual price of $12.99. But when I checked out the price rang up as $10 — still a good deal, but not as good as $7.48.

The cashier did a check on the price and said that only the polo shirts on the shelf that had $7.48 clearance stickers on the tags were actually that price; the rest were $10. But from reading the sign, you'd never know that until you checked out.

At another store, a set of Disney princess dolls was marked down to $9 from $16.99. The price wasn't marked on the packaging but was on the shelf directly below the items. When we checked out, however, the dolls rang up at $11.89 — still a good deal, but not as good as $9.

The law provides a bounty of sorts for the consumer who actually was ripped off. Again, from the nonbinding, "don't take our word for it" office of the Michigan Attorney General:

If an automatic checkout system (scanner) charges you more than the displayed price of an item, and: 1) the transaction has been completed, and 2) you have a receipt indicating the item purchased and the price charged for it. Then: You must notify the seller that you were overcharged, within 30 days of the transaction, either in person or in writing. Within two days of receiving your notice, the seller may choose to refund you the difference between the amount charged and the price displayed plus a "bonus" of ten times the difference, with a minimum of $1.00 and a maximum of $5.00. If the seller refuses to give you both the refund and the bonus, you may bring a lawsuit to recover your actual damages or $250.00, whichever is greater, plus reasonable attorney fees up to $300.00.

Ten times the difference in price!

Um, up to $5.00.

Consumers, and their lawyers, can't be blamed for hoping the store refuses the refund and the bonus -- at least, those lawyers who feel like taking on a case for a total of $300 in fees.

Let's say a retailer -- hypothetically, we'll call them something like, I don't know, Mal-Mart, mismarks a t-shirt as costing $5, and then charges you $10 at the cash register. The consumer, no dummy, says, "Hey, you overcharged me, and I'd like my $5 plus my $5 bonus."

Mal-Mart, which, hypothetically speaking, has $419,000,000,000 in revenues in 2011 alone and has a 95-page document outlining how outside lawyers can bill it for services, then refuses, after which a consumer hires a savvy (?) consumer lawyer, who files suit to get that sweet, sweet, $250... plus $300 in attorney's fees...

... and Mal-Mart, hypothetically, will then... what? Settle? Or file multipage answer filled with so many objections and hyperbole that it's like their lawyers are being paid by the character?

My Generically-Titled Autism Post: Today, sleep disturbances, and why maybe melatonin isn't right for your kids.

2011-10-11T05:25:00.000-07:00

I used to call this "Autism Works," but then I found out there's a group called that already. (Find them here; I'll talk more about them in the future.) So while I think up a new title, I'll just go with the generic title. Click here for more posts like this with information about businesses, apps, people, and other aspects of raising a child with autism.)

It's 5:53 a.m., and I'm awake and working on my blogs instead of sleeping until... well, I'd usually only sleep until 6 a.m., so it's not that bad that I'm up, but still, I don't like losing that last 15 minutes of sleep on days like today, which began with Mr F and Mr Bunches both waking up at about 5:45 a.m.

Or, at least, that's when they woke me up. Mr Bunches woke me up by yelling "Dad!" and getting me in there to restart the movie he's currently watching ad infinitum ("Lilo & Stitch"), while Mr F had likely been awake for a lot longer, given that he was wide awake and tapping a stick against a wall to kill the time.

Mr F doesn't sleep. Or at least, not like we sleep. Sweetie and I joke that Mr F only sleeps every fourth day, and that's about right: Most nights, we can hear him in his room (which we keep locked to avoid him wandering around or getting out of the house at night) until well after we fall asleep, and many nights we can hear him around 2 or 3 a.m. wake up and begin his day. Then, about every fourth day, that catches up with him and he can't be woken up, as happened this past Sunday when he fell asleep on the couch from 4 to 5, then, after I gave him a bath to wake him up, he fell asleep again and then fell asleep in the car while we were driving around until finally we let him go to bed at 7 p.m.

So sleep is on my mind this week: Sleep and autism.

This study, "Sleep Problems In Autism: Prevalence, Cause, and Intervention", looked at just that problem. It noted that as many as 89% of autistic children exhibit some form of sleep disorder at one point, and summarized the types of problems:

Studies of sleep in children with autism have generally reported severe problems associated with sleep onset and maintenance. Irregular sleep–wake patterns, problems with sleep onset, poor sleep, early waking, and poor sleep routines have been found at all developmental levels, with increasing severity at lower developmental levels.

Additionally, shortened night sleep, alterations in sleep onset and wake times, night waking and irregular sleep patterns (with the presence of a free-running rhythm in one case) have been reported.

That's Mr F right there: all of them. The study concluded that autistic kids are more likely than any other group of children to have sleep problems and also concluded that it's likely due to something specific in the kids.

And it doesn't just cause dads to be awake before 6 a.m.; it also leads to problematic behavior during the daytime, including communications delays. Or, perhaps, the study notes, communications delays lead to sleep disturbances:

A relation between social and communication difﬁculties and sleep problems is possible. The sleep–wake cycle is a circadian rhythm and there is evidence to suggest that, as well as the light–dark cycle, humans use social cues to
entrain circadian rhythms.

Routine and social cues are thought to help young infants develop stable sleep–wake patterns with the longest sleep occurring during the night hours. Children with a primary social-communication deﬁcit may therefore ﬁnd it difﬁcult to use such cues to entrain their rhythms, resulting in problems with their sleep–wake schedule.

See? You didn't know that you know when to go to sleep because society tells you, did you? And autistic kids may not pick up on that.

The study also noted that melatonin deficits may be a problem, about which more in a minute. Another possible cause of sleep disturbance was increased anxiety, which makes me sad -- I don't like to think of Mr F and Mr Bunches being too nervous to sleep, but it seems to fit at least Mr F's personality. And, finally, there was some stuff about EEG's in sleep and REM sleep patterns.

Bottom line: We don't know why autistic people don't sleep well, which makes it kind of silly to recommend cures or interventions, but, then, we do lots of silly things, and the paper goes on to recommend some cures and interventions for something that we don't know the cause of.

To editorialize for a moment: Suggesting a solution for a problem without knowing the root cause of the problem is stabbing in the dark, or treating only a symptom, and either one may or may not be better than doing nothing. Consider an old joke:

Man: Doctor, my arm hurts when I go like this.

Doctor: Don't go like that.

That solves the problem, right? But it's not medical care. Or suppose a person shows up at the ER with a gunshot wound, and the doctor removes the bullet fragments and sews up the wound and sends the person on his way. Would you consider that an effective treatment? Or should the doctor have inquired how the bullet got there?

Just some thought experiments. Now, on to the solutions for the unknowable problem!

The study begins by noting that medications were the most common form of help for autistic kids with sleep problems -- but that about half of the parents questioned thought behavioral interventions worked just as well as medications. In our house, we've talked about medications at times for Mr F, and I downloaded the Autism Speaks Medication Decision Kit, a helpful packet that helps provide information and questions to guide you in a decision on whether or not to medicate your child-- for whatever problem. (Get it here.)

Using it, I decided (with Sweetie's help) that we wouldn't medicate Mr F, at least not yet -- because most of the medications listed don't have any clearcut effects on Mr F's conditions and some of them can have severe side effects. It seemed wrong to me to put a 5-year-old on strong antipsychotic medicines when he's not that much trouble.

If your child is on medication, or you've considered it, you should definitely get the kit and read it through. It raises a bunch of issues that I hadn't considered at all, and has helpful questions to ask your doctor, and yourself, about the medications.

Another attempted treatment was faded bedtimes, or moving bedtimes gradually to get the kids to sleep at the appropriate times. This was found to have little effect on the autistic children in the study, something I could've told them. (Currently, our routine is to begin bedtime at about 7:15, with the boys getting medicine, then a story read to them, then a bath, then bedtime with a movie on their TV. The movie on their TV is imperative: they will not sleep without a movie on, and we've learned to put movies in that have a continuous play feature, because the movie ending will frequently wake Mr Bunches up, and you haven't lived until you've been woken up every 87 minutes to restart a movie.)

Then there was parent training: Teach parents how to properly encourage good behavior (sleep) and discourage bad (not sleep.) Although only one family completed the 6-week program, that family reported reduced stress and slightly better sleep routines; I suspect the reduced stress came from parents being more able to cope with the stress through the training, but that's the cynic in me.

Then there's the one I might try: Light intervention:

Two additional treatments for sleep disorders which involve adjustment of the circadian sleep–wake cycle, are light therapy and chronotherapy. Light therapy may be used to treat a variety of rhythm problems, including sleep problems. Bright light suppresses the secretion of melatonin.

Additionally, it has been shown that periods of bright light treatment in the morning will advance the melatonin and sleep–wake rhythms, while bright light treatment in the evening has a delaying effect.

That is, show kids a light box in the morning to get them to sleep better at night, which might work for kids (like ours) who routinely wake up at 3 or 4 a.m., when it's dark out and then have trouble getting to sleep at night.

Finally, melatonin, which almost everyone we talk to treats as a panacea for this problem. At the boys' 5-year-checkup, Sweetie asked the doctor whether it was okay to take melatonin for their sleep, and he approved it: 1 mg each night, he said.

The first melatonin we were able to find was tablets, which is a problem, because the boys won't take pills -- they won't even take medicine from a spoon or those little plastic cups; we have to put it in a syringe and squirt it into their mouths.

We addressed that by pounding the pills into a powder -- literally, I hammer them into a powder, because I'm not a 15th century chemist and don't have a mortar-and-pestle -- and then mix them in with some other liquid, ordinarily some ibuprofen or water; it works better with ibuprofen because they (oddly?) like the flavor of that. (Lately, they've had a cold, so they get the melatonin mixed in with their nighttime cold medicine.)

That worked okay until Mr Bunches saw me scraping the pills into the medicine and then didn't want to take the medicine, at all -- because he now knew it had pills in it and it grossed him out. So for a week we had to wrestle him into the medicine and risk him spitting it back out, until he cut his foot one day and I began telling him the medicine was to make his foot feel better, after which he took it.

(So at night, Mr Bunches will say "Medicine!" and when I say "Yes," he still sometimes says "My foot!" even though his foot is long since healed.)

We also got some of the Natrol liquid melatonin, which we thought would be easier to use than the crushed-powder pills, but the boys hated the flavor of it -- spitting it back out each time, so we've foregone that and every night I get out my hammer, medicine, tablets, and syringe and go to it.

But here's the thing:

I don't think it's working.

Mr F has been on melatonin for a month now, and so has Mr Bunches, and I've seen no real changes in their sleep patterns, at all. I'm not ready to call it quits yet, but I suspect that the melatonin is like the gluten-free diet and other fad remedies: Not exactly the catalyst for change, but it gets the credit for change when it happens, like an ineffective quarterback who wins the Super Bowl in spite of himself.

And here's the other thing: I'm not sure melatonin is a good thing, because I took it for a week or two; I've also suffered from insomnia most of my life and have had sleep problems off and on for the last few months, and so I took the same dose that the boys took for a few weeks, and I didn't like it: My sleep felt less restful, and I had more realistic dreams that left me feeling tired -- it was like I never slept, at all, even though Sweetie would swear I did.

So after two weeks, I stopped taking it entirely, and I won't go back.

Which makes me wonder about why I'm giving it to the boys, if it doesn't seem to work and I didn't like it. But I'm not ready to declare it a failure yet, because a month seems too short to really test it out... for the boys? I don't know what effect it's having on them; Mr F can't tell me "It gives me vivid waking dreams that make it feel like I never sleep," so I have to guess whether it's doing good, or bad, or nothing. 2 out of 3 of those say don't give it to them...

...These are the kinds of decisions you never even suspect you'll have to make. I'll let you know what I decide.

Emotional Distress and Parenting, Part 4: Here's an example of courts doing what courts do WORST. (Family Law Matters)

2011-10-09T05:20:00.000-07:00

Can the exercise of a constitutional right also be grounds for a tort suit?

No, said the Wisconsin Court of Appeals, and it only took them 10 paragraphs to say it. And they didn't even write one of those paragraphs. Talk about an easy day at the office!

In Pryzybyla v. Przybyla, a husband sued his wife for getting an abortion while they were married, an abortion he alleged was done "maliciously and deceitfully," claiming that

through the malicious acts of the defendant, the plaintiff was denied the enjoyment of fatherhood and the companionship and care of his child and family; and that the plaintiff suffered great emotional anguish and mental distress caused by the malicious deceit of the defendant, all to his injury.

The husband was seeking $1,000,000 in damages from the wife, who admitted that she'd had the abortion but defended on the grounds of "you can't tell me what to do with my body."

Interestingly, to me, but not to the Court, which relegated this to a footnote, the parties were, in fact, husband and wife when the child was conceived (Awkward Deposition Questions, #1!) and were separated but not yet divorced when the wife had the abortion (which, technically, meant that they were still husband and wife, something the Court didn't comment on), but were maybe not yet divorced at the time of the opinion?

The present marital status of the parties is unascertainable from the record.

They couldn't just ask the lawyers? CCAP not existing back then, I know it would be hard to just go online and find out, but it seems to me that might have been an important fact to consider, given the Courts' longstanding reluctance to intervene in intact families.

The Circuit Court denied the wife's motion for summary judgment, setting the stage for what presumably would be a jury trial, but the Court of Appeals got to intervene, first, in what also presumably was an interlocutory appeal, because a denial of summary judgment doesn't end the issue... unless the husband won summary judgment? The opinion doesn't say:

Defendant concedes that she was pregnant as alleged and that she procured an abortion on April 22, 1977, in a medically-accepted manner nine weeks after conception without the permission or consent of her husband. Her concession is not disputed by the plaintiff husband. Although the defendant has denied the allegations [of the complaint pertaining to malice, etc.] the parties concede that the issues presented are legal, not factual, and thus may be reached upon summary judgment. Thus, we construe the defendant's position as a concession of the facts as alleged and as supplemented by the moving papers, but a contention that the conceded facts, as a matter of law, do not constitute a claim upon which relief may be granted.

The defendant, in furtherance of that position moved for summary judgment denying that an issue of material fact existed and claiming entitlement to judgment as a matter of law. The circuit court denied summary judgment and this appeal followed.

You would think a case that raises a constitutional question would at the least have a better explanation of the procedural and factual issues underpinning it, but this is, after all, the Wisconsin Court of Appeals, where dollar amounts are always set out down to the last penny while procedural backgrounds are glossed over.

The Court then went on to adopt a critical paragraph from the then-just issued United States Supreme Court in Planned Parenthood of Missouri v. Danforth, 428 U.S. 52, 69-71, 96 S.Ct. 2831, 2841-2842, 49 L.Ed.2d 788 (1976) to the effect that the State could not (and still can't, I assume, the U.S. Supreme Court not having gotten around, in their originalist zeal, to gutting this precedent yet) delegate the decision about whether to have an abortion to the State:

Clearly, since the State cannot regulate or proscribe abortion during the first stage, when the physician and his patient make that decision, the State cannot delegate authority to any particular person, even the spouse, to prevent abortion during that same period.

The Wisconsin Court of Appeals appeared to be quoting the part of Danforth which adopted a dissenting judge's opinion, in Danforth, that

the State cannot "delegate to a spouse a veto power which the state itself is absolutely and totally prohibited from exercising during the first trimester of pregnancy."

Which is sort of precedential-by-loophole: A dissenting judge, somewhere, said something, and the U.S. Supreme Court adopted the viewpoint of that dissenting judge in ruling on a slightly different question, which allowed the Wisconsin Court of Appeals to re-adopt the dissenting judge's opinion vis a vis mad dads and abortions... I'm a little dizzy now.

The Court then proceeded to decide the question presented here by changing the question to a different one that it wanted to answer, instead:

We are not unaware of the deep and proper concern and interest that a devoted and protective husband has in his wife's pregnancy and in the growth and development of the fetus she is carrying. Neither has this Court failed to appreciate the importance of the marital relationship in our society. Moreover, we recognize that the decision whether to undergo or to forgo an abortion may have profound effects on the future of any marriage, effects that are both physical and mental, and possibly deleterious. Notwithstanding these factors, we cannot hold that the State has the constitutional authority to give the spouse unilaterally the ability to prohibit the wife from terminating her pregnancy, when the State itself lacks that right.

Which is not what the husband here was asking for. He wasn't asking that husbands be allowed to keep wives from having abortions, even if that may have been an effect of this decision. He was asking to be allowed to sue when a wife intentionally inflicts emotional distress on a husband by having an abortion maliciously and willfully.

That's a different question, isn't it? Again, the facts here might have just mattered a little bit: Suppose wife asked husband to have another child with her as part of a deal to stay married, and husband, who didn't want to stay married, had agreed, only to then have his wife change her mind, have an abortion, file for divorce, and taunt him with it?

You may agree with the right to an abortion, but should it be used as a weapon? That's a question the Court didn't decide, and by not delving into the facts of this case, what the Court said is that there is no set of circumstances under which a mother could be sued for intentionally inflicting emotional distress by having an abortion.

Maybe you're okay with that; as a rule it's certainly one way to go. But if you're going to reach that rule, reach it the right way: discuss the various rights at stake here and the circumstances under which those rights are affected. Don't pawn it off as "delegating authority." Had the husband won here, women could still have abortions -- they'd just run the risk that they might be sued for doing so, and have to justify their actions as not being intended to inflict emotional distress.

And that's already a risk spouses run in marriage: being sued for making marital decisions. Wives have sued husbands for embezzlement, and the legislature has decided to allow intra-marital suits over disposal of marital property. A husband who wanted to sue for intentionally inflicting emotional distress via abortion would still have to prove that he would have been a good and devoted dad, that the mom acted maliciously and not out of some legitimate concern, and a host of other factors. I don't doubt that there would have been a potential chilling effect on women seeking abortions, for fear that a vengeful husband might sue them, but that potential chilling effect seems to carry no weight when it comes to letting wife-beaters and child-abusers seek placement and custodial rights; how often do courts say "If we let someone who was convicted of a violent crime seek placement, we might be infringing on the rights of women to be free of fear of retribution from potentially violent people?"

Those are all questions raised by this opinion... and ignored.

I'm more of an originalist than the actual "originalists," when it comes right down to it; I tend to believe that constitutional rights are enumerated or they likely don't exist -- because we can amend the Constitution to put them in if we want, so we don't have to "find" them, with the "finding" being done by an unelected superlegislature that also holds the veto power over attempts to undo that finding.

Imposing constitutional rights by fiat wasn't a power the Founding Fathers imagined giving to the minority -- and for everyone who celebrates the Court's power to find a right to abortion, you should be mindful that the same power lets the Court "find" a corporation's right to contribute to presidential campaigns. What's good for the goose...

But this is the system we have -- and so we have a messy situation when family dynamics run into constitutional rights, something that exists everywhere. You don't clean up a messy situation by cutting through the Gordian knot like this; that just decides a family situation one way rather than the other. The Court of Appeals had a chance here to get down into the mud and really dig into what was going on in this family and decide how much courts can, and should, intervene into decisions that intimately affect families, and it dropped the ball by the sleight-of-hand-three-card-Monty decisionmaking, rephrasing the question and adopting a ruling that adopted a dissent, and now you've got another area of law that's completely untouchable by anyone.

Whether that's a good or bad thing, as it affects the right to abortion, is up to your own opinion of the right to abortion. But judicial legislation without proper consideration of the facts, using bait-and-switch reasoning, is terrible for our society.

Are you prohibited from agreeing to pay as much interest as you can in order to get someone to lend you money? (Payday Loans & Unconscionability, 1)

2011-09-27T07:52:00.000-07:00

I thought I would take a stab at a post-header that summarized the usual payday loan argument in a slightly-different, slightly-less consumer (un?)friendly way; whenever payday loans come up the focus is invariably on how terrible payday lenders are for doing what they do, kind of the same way that whenever football players hold out on their contracts the focus is entirely on how terrible the football players are to do what they do.

But football players can be cut at any time, and not get paid for the remainder of their contract (absent guarantees, of course.) So if owners don't have to honor the contracts, why do players, I sometimes ask people.

Now take that to payday lenders: Banks will not make micro-loans, especially not to people with marginal or bad credit, even if those people are employed. I've never run into a bank or credit union that would spot me $200 for a week or two, no matter how much interest I promised to pay them.

Payday lenders will, though -- they'll lend me $200 for a week or two, or longer, depending on the laws, and they'll charge a lot of interest to do that... relatively speaking.

Because a lot of interest needs to be quantified and considered rationally. Is it a lot when considered solely as a percentage of the loan? Or as a hypothetical figure that might never be paid? Or is it actually a lot?

Here's what I mean: If you consider only percentages, everything can look big. A 1,000% increase sounds huge -- but if you go from 1 to 10, that's 1,000%; so if I lend you a buck and you give me back eleven, I charged you 1,000% interest. But I only made ten bucks.

Is that a lot? Depends, right?

What about as a percentage? If I lend you ten bucks, and make you pay me back $15, I charged you fifty percent interest -- more than any credit card. But most people, I think, would say "Well, jeez, you only charged $5."

What about that hypothetical figure? Ever look at the amount of interest you'll pay on a mortgage loan? You should. If you take out a mortgage loan at 5% annually, on, say, $200,000, you'll pay, over the life of the loan, $186,511.57 in interest alone. You'll pay back $386,511.57, total, almost half of which is interest.

But everyone agrees that 5% is a reasonable rate, right? Suppose, instead of saying you'll pay 5% interest annually, the bank was required to tell you on your mortgage that forty-eight percent of what you'll pay is interest? That doesn't sound like such a good deal, now, does it?

I bring this up because it made big news that the Wisconsin Supreme Court is going to consider whether the interest rates charged by payday lenders can be deemed by a court to be unconscionable.

Details of the case are hard to come by. Here's what I found:

The court will consider whether state statutes block judges from determining if a particular interest rate is unconscionable and, if they don't, what evidence would prove rates are too high.

The case stems from loans Jesica Mount of Onalaska secured from Payday Loan Stores of Wisconsin Inc. in 2008. According to court documents, annual interest rates on the loans varied from 446 percent to 1,338 percent.

The loan company filed a lawsuit against Mount after she failed to make her payments. Mount filed a counterclaim alleging the loans violated the Wisconsin Consumer Act because the rates were unconscionable.

(source.) None of the stories I read told how much the loan was, or how long the woman had the loan out, or whether she made interest payments or provided any other detail. That would matter if you want to know not just what the annual interest rate might be, but also how to compare it to anything else to determine whether you think the rate is fair.

None of the stories, either, mentioned what I presume is the statute under which this case is currently being considered: Section 425.107, Wis. Stats., which reads:

425.107 Unconscionability.

(1) With respect to a consumer credit transaction, if the court as a matter of law finds that any aspect of the transaction, any conduct directed against the customer by a party to the transaction, or any result of the transaction is unconscionable, the court shall, in addition to the remedy and penalty authorized in sub. (5), either refuse to enforce the transaction against the customer, or so limit the application of any unconscionable aspect or conduct to avoid any unconscionable result.

(2) Specific practices forbidden by the administrator in rules promulgated pursuant to s. 426.108 shall be presumed to be unconscionable.

(3) Without limiting the scope of sub. (1), the court may consider, among other things, the following as pertinent to the issue of unconscionability:

(a) That the practice unfairly takes advantage of the lack of knowledge, ability, experience or capacity of customers;

(b) That those engaging in the practice know of the inability of customers to receive benefits properly anticipated from the goods or services involved;

(c) That there exists a gross disparity between the price of goods or services and their value as measured by the price at which similar goods or services are readily obtainable by other customers, or by other tests of true value;

(d) That the practice may enable merchants to take advantage of the inability of customers reasonably to protect their interests by reason of physical or mental infirmities, illiteracy or inability to understand the language of the agreement, ignorance or lack of education or similar factors;

(e) That the terms of the transaction require customers to waive legal rights;

(f) That the terms of the transaction require customers to unreasonably jeopardize money or property beyond the money or property immediately at issue in the transaction;

(g) That the natural effect of the practice would reasonably cause or aid in causing customers to misunderstand the true nature of the transaction or their rights and duties thereunder;

(h) That the writing purporting to evidence the obligation of the customer in the transaction contains terms or provisions or authorizes practices prohibited by law; and

(i) Definitions of unconscionability in statutes, regulations, rulings and decisions of legislative, administrative or judicial bodies.

(4) Any charge or practice expressly permitted by chs. 421 to 427 and 429 is not in itself unconscionable but even though a practice or charge is authorized by chs. 421 to 427 and 429, the totality of a creditor's conduct may show that such practice or charge is part of an unconscionable course of conduct.

(5) In addition to the protections afforded in sub. (1), the customer shall be entitled upon a finding of unconscionability to recover from the creditor or the person responsible for the unconscionable conduct a remedy and penalty in accordance with s. 425.303.

That's a mouthful; but the statute expressly allows a court to find "any aspect of the transaction" to be unconscionable, which makes the way the media are reporting this case to be somewhat suspect -- and worrisome, for consumer advocates:

The state Supreme Court has agreed to decide whether Wisconsin law permits judges to determine when payday loan interest rates are too high.

(Source.) That may just be reporters interpreting the case without bothering to check with lawyers. But maybe not. According to the case history at the appellate level, the panel certification that sent this to the Supreme Court of Wisconsin phrased the question as:

Whether the Wisconsin Consumer Act precludes a court from determining that an annual interest rate on a short-term loan of over a thousand percent is unconscionable should be decided by the Wisconsin Supreme Court. If the WCA does not preclude a court determining that interest rates are per se unconscionable, this case presents the question of what legal standard to apply in determining unconscionability and what evidence is necessary.

That's not the official text of any order; that's just what's publicly available online at the WCCA Appellate level records. But the order is troubling: Whether the Act precludes a court from doing that? How you phrase a question matters, and the Court of Appeals appears to be taking the stance that there's something in the Act that would bar the circuit court from doing what it did; the statute, though, speaks in terms of a court's broad powers, not in terms of proscriptions of the court's broad powers.

Also not noted in the stories, but I think relevant: The payday lender is the appellant, which means a circuit court already held that the rates were unconscionable -- presumably. I haven't seen the opinions. (I emailed two lawyers involved to ask them to share information with me, as it's cumbersome and expensive to get those records myself.) So getting the Court of Appeals to agree to phrase the question in a lender-friendly way may help even the field for a lender who (apparently?) lost round one; the question the Court of Appeals used reads almost exactly as I would have written that question if I were briefing this for the payday lender.

Also not noted in the stories: Justices Bradley and Prosser did not participate in at least some aspects of accepting this case for certification, again according to the records available online. That seems significant to me, but I can't say exactly why.

That's what I know about this case so far -- which is more than any other story on it has reported. I also know a lot about the law of unconscionability, both within the Wisconsin Consumer Act and without.

And while I'm already in the midst of a series of posts about parenting and emotional distress, who says I can't do two series of posts, right? So here's what I'm going to do: I'll wait and see what materials those lawyers provide me, but in the meantime, I'm going to do a series of posts on unconscionability as it affects payday lenders in other states, and as it has been used under the Wisconsin Consumer Act here in Wisconsin.

So check back and see what you learn about this issue -- and also consider this overriding question, which I'll phrase as a story problem:

Assume that courts can, as the law seems to say, determine that an interest rate is too high, as a matter of law. That determination is going to be made only after a consumer takes out a loan, and then decides to not pay that loan back -- either because he can't, or he won't. Once the decision to not pay the loan back is made, then either the lender or the consumer will go to court to get a ruling regarding that interest rate, resulting in the lender expending attorney's fees (which it cannot get back) and the consumer expending attorney's fees (which he can get back.) Ultimately, the Courts will make a determination on the interest rate -- upholding it, striking it entirely, or, the third-rail option, limiting the interest rates to the extent required to make the loan conscionable. (Go back and read that statute to see where the legislature gave the courts the power to do that.)

This, then, is the question: Is all of that good for consumers?

With follow up questions:

Do we want courts determining, after the fact, on a county-by-county basis, what interest rate is okay? Do we want the appellate courts to set a maximum interest rate across the State? Should the interest rate that is allowed be determined on a customer-by-customer basis? Should I, as a consumer protection lawyer, be allowed to agree to pay a higher interest rate than a high-school dropout who barely reads English?

Bonus question for you consumer advocates out there: Was this the best possible time to bring the Wisconsin Consumer Act to the attention of this Supreme Court and this legislature?

Emotional Distress and Parenting, Part 3: Once upon a time, dads had to fight to have a relationship with their kids...

2011-09-24T15:50:00.001-07:00

... but not the good kind of dads.

It's interesting to look back at cases from not all that long ago and wonder if the people who fought so hard to establish this or that right are now sympathetic to others who today are fighting to establish that or the other right. Like in the case of Slawek v. Stroh, 62 Wis.2d 295, a 1974 case which must be taken with a grain of salt because most of it reads like law that almost certainly has been abolished... only maybe it hasn't.

Here's the background: Perhaps the least-sympathetic "putatative dad" ever commenced an action for declaratory relief seeking to have himself adjudicated the father of a girl he claimed was his. The mom -- not Dad's wife -- opposed this, and the primary issue to be dealt with up front was whether Dad could maintain the action at all.

This being 1974, after all, there weren't all these fancy-shmancy custody rules and procedures; back then, paternity actions in Wisconsin were brought by a district attorney... or not at all. So Dad, who lived out of state, had asked the DA to bring such an action, but the DA refused. Dad then sued for declaratory relief, and the Court, over Mom's strong opposition, said "Well, okay, we'll let you do that," primarily because Dad, they felt, had a constitutional right to prove his parental relationship under Stanley v. Illinois, and the State therefore was obligated to provide a way to do that.

So declaratory judgment it was -- although the Court, too, seemed squeamish about this, and why not? Here's why Mom (and probably the DA) opposed Dad's request, period:

The allegations of the defendant-mother's first counterclaim are in substance as follows:
During the first three months of their association plaintiff-appellant told her he was not married, loved her, wanted to marry her and wanted to visit her parents in Marinette, Wisconsin, to discuss marriage.
She believed his statements and because of this had sexual relations with him. By accident she found out he was married, living with his wife and had three children. The plaintiff then told her he was not in love with his wife, that they had separated and divorce was being instituted, and that as soon as he was divorced he would marry her. All of these statements were false and made for the purpose of inducing her to have sexual relations with him.
As a result of these relations a son was born in 1969 and has been adopted by third persons. She again became pregnant in 1970, and in August of 1970 suffered a miscarriage 'by reason of manipulations and injections given to this defendant by the plaintiff upon false representations that they would not harm the unborn baby when, in fact and truth, they were the direct cause of and induced said miscarriage and abortion.'
The minor child in this action was born because of the false representations which led to the relationship between them. She also alleges that all the plaintiff's representations to her were false and fraudulent and that he has not and never intended to separate [62 Wis.2d 310] from his wife, and that these representations were made for the purpose of seducing her.
She has had two illegitimate children and a miscarriage and abortion, and suffered an assault and battery solely because of his false representations, and suffered pain, both mental and physical, and has been held up to public ridicule and shame.

So you can see where her opposition came from.

The Court having held that Dad could use the declaratory judgment statutes for custody purposes (something that probably wouldn't be allowed today, although I haven't researched it; I did some quick updating of this case but haven't made sure every single point in it is good law, yet) then had to decide whether Mom could keep her counterclaims in there -- counterclaims for assault and battery (the miscarriages), seduction, breach of promise to marry, and, for our purposes, intentional infliction of emotional distress:

The second counterclaim of the defendant-mother alleges in substance that the plaintiff-appellant, by his intentional physical acts in repeatedly telephoning her and her family at all hours of the day and night, interrupting their sleep and other activities, that by wild and false ruses, stories and use of false names, he has repeatedly tried to see her and associate with her despite her repeated refusal to talk with him or see him, that by these actions he invaded her privacy in her home and in public and private and before her parents and friends, and that these acts caused her great mental anguish, suffering and humiliation and that she has been held up to ridicule, shame, contempt and embarrassment in public and private and before other persons.
That, the Court held, stated a claim for intentional infliction of emotional distress -- not quite what I've been looking at here, vis a vis parents and kids, but still, an interesting type of claim: by pursuing her, he subjected her to emotional distress; how many women have been stalked or harassed and who didn't then sue their ex-boyfriends or husbands?

(This case appears, in fact, to be the case that established the tort of emotional distress in Wisconsin.)

The Court also held that the woman had stated a claim for seduction, altering the common law that only allowed the master of a seduced servant to sue; here in Wisconsin, at least, in 1974, the seduced woman could sue for damages. (I'm pretty sure even without researching it that a claim for seduction is gone. But not 100% sure. I've never had to research that.)

Also interestingly for these purposes is the baby's claim, which the Court termed as a wrongful birth claim:

The infant minor, by her guardian ad litem, by way of counterclaim, has alleged a cause of action which can be referred to as 'wrongful birth' or 'wrongful life' for lack of a better description.

He alleges, in the minor's behalf, that the plaintiff-appellant is her father and induced her mother to have sexual relations upon the fraudulent promise that he would marry her, knowing this promise was false because he was already married and was married at the time of her birth, that the plaintiff-appellant knew or should have known that his acts would cause the birth of a child and cause such child mental pain and anguish, and that because she was born an adulterine bastard she does suffer mental pain and anguish and is subject to public humiliation and embarrassment.

That type of wrongful birth isn't a birth-defect type of claim; the allegation was that by being born out of wedlock the baby had suffered ("an adulterine bastard"), but the Court, after deciding it could allow such a claim, had better not, because of the policy ramifications of doing so.

(Ah! Remember when courts considered the policy ramifications of declaring everything a constitutional or litigational right?)

All told, the Court held that the Circuit Court could grant judgment on the pleadings, finding Bad Dad a real dad, and then hold a non-jury trial on the custody and placement issues, while allowing then for a bifurcated, jury trial on the issues raised by Mom in defense.

So you can maintain, at least if Slawek is still good law (and it likely is in this context, but it's late and I'm not going to research it today), a claim for emotional distress for someone too vigorously trying to establish a relationship with you -- even if that someone is the parent of your children. But kids: You can't sue your parents merely for having given birth to you.

Welcome To... CELL PHONE COURT!

2011-09-24T07:01:00.001-07:00

This is a Sponsored post written by me on behalf of Straight Talk for SocialSpark. All opinions are 100% mine.

Ahem! The court will come to order. We now call the case of “You versus your stupid cell phone plan.” Let’s see, let me read the indictment here… says that you’ve been charged with overpaying for your cell phone plan. Well, that’s serious. Very serious indeed.

What do you mean, you plead ignorance? I’ll say it’s ignorant, to be paying as much as you pay for a cell phone plan. Are these numbers right? $80 or more for a monthly service plan? And you’re locked into that plan for two years? I ought to throw the book at you right now.

What book? The book of “Stupid Things People Do.” Bailiff! Play that video!

There, did you see THAT? Do you understand NOW just what you’ve done?

That’s right. You’ve been paying $80, $100, even $150 for a cell phone plan and you could have been paying as low as $45 a month, and STILL GETTING Everything you need! Straight Talk, the cell phone provider that gets you a cell phone for less, will give you an unlimited talk/text/data plan for as low as $45 a month – or $499 for the whole year!

Order! Order! Stop crying. I know you didn’t know, but that’s still no excuse.

Now, then, Count TWO of the Complaint says that you also paid nearly $200 for that phone. Let me see that. Mark it as an exhibit. What is this, a Kyocera? Oh, an LG? And you paid that much for it?

Why do I ask? Only because, young man, Straight Talk will sell you a smart phone with touch screen and qwerty keyboard and all your videos and apps and whatnot for under $60. You can even get Android on Straight Talk.

Yes, I said $60. If you don’t believe me, the reporter can read it back. Or listen to this customer:

Thank you for that helpful testimony. You know what bothers me the most? Not just that you’ve now fallen Hook, line and sinker for the Straight Talk plan but that it was staring you in the face all along! No contracts, no credit checks, no activation or termination fees, and you can change your plan each month if you want.

Plus, free 411 calls! Look at this bill here, Exhibit 3. You spent nearly $15 on those calls last month alone! Imagine what you could have done with that money! Why, you could’ve gone to LAW SCHOOL, and then you wouldn’t be standing here before me, in this predicament.

What am I going to do with you? I’ll tell you. First, watch this:

Now, Call a friend, and tell him that he has to take you immediately to get a Straight Talk phone.

Then, with all that extra money you’ll have, go do something nice for your family. Take them out to dinner - -heck, take them out to dinner TWICE A MONTH, every month. You’ll have enough left over.

That’s all. Court will be in recess.

Autism Works: A (Phone) Call To Action

2011-09-15T04:59:00.000-07:00

Autism Works is a post I put on all my blogs, updating you on the latest information affecting people who are autistic or who know someone who is.

I would like you to make a phone call, and to keep making that phone call until you get through. But the phone call is not for me, it's for Mr F and Mr Bunches.

If you follow me on Twitter, you've already heard the gist of this, but it bears examination and repeating. At the bottom of this post, you'll find contact information to email Eric Cantor or call him, so if you know you already want to do this, go there and get that info. If you don't know why you should want to make a simple phone call, read on:

Here is my son, Mr. F. He was four years old when this video was shot:

Mr. F currently gets therapy 20-25 hours a week, in our house. So does his brother, Mr Bunches. They each have teachers and therapists come in every morning at 8:00, and stay until 11:20, when the boys each get on separate busses to go to their 4K classes for three hours. Two days a week, Tuesdays and Thursdays, the therapists come back from 3:00-5:30 p.m. There are two to four extra people in our house for 25 hours a week. At school, each of the boys has an aide that helps him in school. Mr Bunches' is part-time. Mr F's is full-time, by his side every second he's at school. They also have speech and occupational therapy, and used to get out-of-home occupational therapy until our insurance benefits ran out for the year.

The cost of just the in-home therapy per year is $50,000 per child. That doesn't count the school support services or the busses that take the boys to school or the ankle bracelet Mr F wears in case he wanders away or the sheriff's deputy who comes to our house once a month to check that the bracelet works.

All that effort is helping the boys learn to do things like talk. Many autistic people are nonverbal.

Mr F, for example, will say maybe 10 or 15 words. He understands what you say, but has trouble talking. When he wants something, he will use sign language and gestures, tapping his chest to say "I want" and taking your hand and pointing it to where he wants things. He, this summer, began being able to say I want but he can't pronounce the words yet. He says "Bo bo," which we know means I want.

He said a sentence the other day: He said "Bo bo GO." Which meant he wanted to go for a ride. It was the first sentence he'd ever said to me... after nearly 2,000 hours of intensive therapy and work. (It's not just teachers. We do it all the time, too. As I was typing this, Mr F wanted his breakfast, which is usually cheese puffs. Autistic kids are even pickier than other kids, in part because they are so sensitive to sensory issues we barely register, so they have to work at expanding their food groups. Before Mr F was allowed his cheese puffs, as part of his education, I had to make him choose between two alternatives [forcing him to communicate], then make him get the bowl out, and then tell me "I want cheese puffs," which he said as "bo bo" and pointing. To ensure that Mr F can someday take part in society, I have to make him work for his cheese puffs.)

Now on to what you can do:

Back in 2006, Congress passed the "Combating Autism Act." That bill -- passed by a pre-Tea Party Republican Congress and signed into law by the Republican Worst President ever -- set aside $924 million over 5 years to develop a strategic plan to expand and better coordinate the nation’s support for persons with autism and their families. It led to important research being started and promising new interventions.

Autism, as you may know, affects 1 in 70 boys, and the costs of supporting autistic individuals in society are $35,000,000,000 ($35 BILLION) per year. Interventions and cures allow autistic individuals to live fuller lives, with less costly supports (if any at all.)

The Combating Autism Act was the most comprehensive health measure ever passed. And it will now expire at the end of September, 2011, unless reauthorized.

That reauthorization is pending in the "Combating Autism Reauthorization Act," or CARA. CARA is almost halfway to becoming law: The Senate committee considering it just passed it unanimously and sent it to the full Senate.

But it has not yet been put up for a House vote, because of Eric Cantor.

Eric Cantor, the House Majority Leader, co-sponsored the bill in 2006. He is one of 113 House members of the Coalition for Autism Research and Education. He has taken part in "Walk Now for Autism Speaks" events.

But he won't even let this bill go to the floor for a vote.

Eric Cantor won't let America decide if autistic children should have a shot at a fuller life.

You can email Eric Cantor very easily by going to this site and filling out the form. It's a pre-written email that takes about a minute to fill out and send, and you won't get junked or spammed.

Or you can call Eric Cantor at 202-225-4000. I've got that number programmed into my cell phone, and called it 20+ times yesterday. It was busy during working hours, and after hours I was told I could not leave a message.

But I'm going to keep trying. Because if Mr F can work his way through counting to ten, I can certainly make a phone call, and so can you.

Call or email Eric Cantor and tell him to let the Combating Autism Reauthorization Act go to the House Floor for a vote!

Emotional Distress and Parenting, Part 2: Here's a mile-wide door I intend to drive my truck right through...

2011-09-13T06:33:00.000-07:00

... if that is not an entirely improper metaphor to use in legal argument.

So two weeks ago, more or less, I talked about those kids that sued their mom for emotional distress because she didn't pick out just the right Hallmark card for them, and then raised the question: When does family conduct rise to the level of emotional distress?

This is not just an empty question for me, of course: I've got two pending cases right now in which I intend to make intentional infliction of emotional distress claims in a family context, so as usual I'm writing about what I'm thinking about working on. But it's also an important question, as the rules for "what is a family" and "what can be done to enforce not-so-ordinary family relations" become more labyrinthine.

When most of our family law rules were concocted, your prototypical family was a man, a woman, and some kids. When no-fault divorces became common, that was the American Gothic standard by which legislators began crafting divorce and placement rules.

Over time, those rules have morphed into ever-more-complicated schemes -- now, there are presumptions of maximization of time and multiple factors to consider and rules on when parents can move where and we have three levels of involvement with kids (custody, placement, and visitation) -- while our families have become ever more complicated, too: Stepparents and gay marriage and open adoptions and grandparents raising their grandkids... and so on.

The law cannot keep up with society, of course -- but lawyers have to try, and so into the cracks created by society comes the common law, famously creating "equitable parents" in Wisconsin or doing sub rosa gay adoptions or, in the cases I'll examine, using tort claims to pursue family rights.

And an examination of interfamily suing begins, appropriately, with someone losing such a case:
Gleiss v. Newman, 415 N.W.2d 845 (Wis. Ct. App. 1987).

Gleiss was the first-ever case to consider what rights a non-custodial parent might have to sue the custodial parent -- and the answer was "None, really." Beverly Gleiss, the mom, had visitation with her kids, but not any custody rights; the opinion, rather frustratingly, doesn't say why that was, and I think it matters, because, as you'll see, Beverly's rights to sue for tort damages were restricted by her rights to use family court procedures -- but those family court procedures presumably had been the ones that ended up with her losing custody in the first place.¹

Anyway, Beverly Gleiss in our case sued her ex, Newman, and apparently his new girlfriend (I'm assuming) for denying her visitation, framing the suit as a tort claim for intentional infliction of emotional distress.

The Court of Appeals for Wisconsin first began by noting that some courts allowed just this type of claim:

Few jurisdictions have addressed this issue. The Vermont Supreme Court has recognized a cause of action for denying a parent "personal contact or other communication." Sheltra v. Smith, 136 Vt. 472, 392 A.2d 431, 433 (1978).

But others had rejected it:

Also, a federal district court has concluded that Missouri would recognize a damage suit for the interference with visitation rights and assess damages to the noncustodial parent for the deprivation of those rights. Ruffalo v. United States, 590 F.Supp. 706, 713 (W.D.Mo.1984).

However, Missouri has since rejected Ruffalo in Politte v. Politte, 727 S.W.2d 198, 200 (Mo.Ct.App.1987), and the balance of the jurisdictions considering this issue have refused to recognize the existence of such a tort. 1 These courts based their conclusions upon reasons of public policy and fear that if such a tort is recognized, a host of actions would follow. See id. at 201. They noted that individuals whose visitation rights are improperly denied have other adequate remedies to enforce their visitation rights. See Owens v. Owens, 471 So.2d 920, 922 (La.Ct.App.1985); Hixon v. Buchberger, 306 Md. 72, 507 A.2d 607, 613 (1986).

Why are the courts rejecting those claims? Because doing so would confuse juries and clog up the courts:

We agree that allowing this type of tort could encourage claims for petty infractions. State courts are already plagued by trifling departures from court visitation orders. Additional damage suits would only further burden the already strained court dockets.

Now, I want to examine that logic. First of all, the Court assumes that the courts are "plagued" by "trifling" departures from court visitation orders.

Where's the citation for that? If I put that in a brief, every judge in the world would say "I need proof."

Secondly, family courts have resources to deal with "trifling" departures, including the ability to award fees for overtrial or based on need, and punishment for overlitigation, and also the use of family court commissioners, parent coordinators, and guardians ad litem -- systems set up to handle the many claims that may be made.

Thirdly, what the Court of Appeals assumes is that parents would litigate in family court, and in civil court -- bringing a "trifling" claim to family court and either then going to sue in tort, or suing at the same time. Which means the Court of Appeals is not familiar with "claim preclusion" and "issue preclusion." Litigants in a civil suit have the option of moving to dismiss under section 802.06 if another case is pending before another court involving the same parties, and a litigant who loses on a claim in one court has no right to bring that same claim in a different court.

Fourthly, the Court equates Gleiss' claim with a "trifling" visitation departure, which, again, makes it frustrating that the Court didn't tell us what her claim was. Was Gleiss suing because the husband had missed a single Tuesday night? Or had it been three years since Gleiss had seen her kids?

Wouldn't you like to know?

The Court had other weird reasons for declining to allow this suit:

Further, noncustodial parents claiming intentional interference with their visitation rights have viable and effective remedies for enforcement in Wisconsin. The noncustodial parent may institute proceedings to enforce visitation rights and obtain attorney fees for the pursuit of these actions. Sections 767.245, 767.262, Stats. In addition, they may institute not only contempt proceedings, but also proceedings to obtain custody of the child. Sections 785.02, 785.03, 785.04; 767.245, Stats.

That's suspect reasoning, right there. The Court did not say in its opinion whether Beverly had tried to use family court or not. Litigants sometimes must "exhaust administrative remedies" before pursuing tort claims of some sorts; it would have been possible to say "Beverly didn't even try to sue in family court" and rule based on that -- but if Beverly had been trying and trying to get justice in family court and got nowhere, you've just said she has an "effective" remedy that doesn't seem so "effective."

But also this: Just because I have one remedy, I should not have another? Lawyers' clients can sue in tort for malpractice, can sue in contract for breach of contract, can ask for fee arbitration in the State Bar, and can file Office of Lawyer Regulation complaints if they're unhappy with their lawyer. Presumably, the Gleiss court feels clients need only one of those -- so if you're a lawyer who gets sued, raise Gleiss as a defense and say "Litigants already have an effective remedy; they can complain to the OLR."

The Court then says, without developing this reasoning, that:

Finally, the recognition of such a claim would not be in the child's best interests. A claim for compensatory and punitive damages would alter the focus from determining visitation consistent with the child's best interests to parental compensation.

Which is, one, why you need a tort suit. Family courts are there to balance the best interests of the children in a visitation schedule; tort suits are there to remedy civil wrongs. There's nothing inconsistent with allowing tort suits to overlap family cases. (Battered wives can get divorced and sue their ex-husbands for damages, for example.)²

Also: Family courts can award "compensatory and punitive damages," using their contempt powers. So if you are a dad or mom who's being sued for contempt, tell the Court:

A claim for compensatory and punitive damages would alter the focus from determining visitation consistent with the child's best interests to parental compensation.

And demand the contempt action be dismissed.

Having decided that there was no such right of action, the Wisconsin Court of Appeals went on to decide that there just might be such a right of action, anyway:

Therefore, we hold that Wisconsin does not recognize a cause of action in tort to recover damages against a custodial parent for allegedly interfering with the judicially-fixed visitation.

...

We need not address the question of whether the same action brought by a custodial parent is a recognized right. Nor do we reach a decision regarding the recognition of a claim by a noncustodial parent granted visitation rights when the court lacks the power or ability to remedy the alleged interference with its powers of contempt, such as when the custodial parent takes the child to another state in order to deprive the noncustodial parent of visitation rights. See sec. 946.71, Stats.

That is to say: First, if you're a parent with custodial rights, you can maybe sue.

Second, if family court isn't an appropriate remedy, you can maybe sue. Which, again, brings up that the Court didn't bother telling us what Beverly had done in family court. If you're going to say "No, you can't sue because family court is a good remedy, but if you don't have a good family court remedy, you can sue," you should explain why Beverly's (theoretical) family court rights bar her.

Third, though, is that last paragraph: "when the court lacks the power... to remedy the alleged interference with its powers of contempt" a claim might be viable.

Well, now. There is a visitation statute that allows equitable parents, stepparents, and grandparents, to have visitation; and that visitation can only partially be enforced by contempt powers -- the Court cannot use its most powerful contempt sanction, jail.

And there are thousands of nonbiological same-sex parents who have no custodial rights and barely-enforceable visitation rights. And thousands of stepparents who have visitation rights that cannot be enforced. And thousands of grandparents who have the same.

Did the Gleiss court really mean to open the doors to litigation between stepparents and exes?

We'll see -- because I'm going to be filing those claims in the near future. And I'll continue examining them here on this blog.

**********************************************************

1. In case you're wondering: Family courts do not always get it right. In one remarkable case from about 1999, a husband was awarded primary placement of the family's two girls by the divorce court; the mother then took off with the kids, and was arrested on felony charges. Her defense, and presumably a claim she'd raised in divorce court, was that dad was sexually assaulting the girls. Dad eventually was convicted of doing just that, but meanwhile, the kids were placed with dad's parents. See, e.g., Paige K.B. v. Steven G.B., 594 N.W.2d 370 (Wi. S. Ct. 1999).

2. And, of course, children who have been sexually assaulted can sue their grandparents for intentional infliction of emotional distress, as the Paige K.B. kids did.

In Nevada, prostitution and gambling are illegal... and they have the moral high ground on Bank of America and Iowa. (Mortgage Foreclosure Issues.)

2011-09-04T10:32:00.000-07:00

Hey, remember the other day when I complained that judges seem to not understand why banks and mortgage brokers would dupe homeowners into loans they couldn't afford? (Sure, you do.) It seems, at times, that judges assume that banks can't do wrong, while homeowners must be to blame for borrowing money they can't pay back, right?

Wrong -- but that's according to Nevada, not judges around here. Nevada just expanded its lawsuit against Bank of America, proving that while the Still Grudgingly President Obama's administration doesn't want to get tough with banks, some people are still willing to stick up for homeowners.

According to the Denver Post:

Nevada's attorney general charges that BofA and the now-defunct mortgage giant Countrywide, acquired by the bank in 2008, deceived borrowers and investors at almost every stage of the process. According to the suit, borrowers were duped into unaffordable loans and then victimized again through a misleading mortgage-modification program that homeowners tried to use to avoid foreclosure. Finally, the suit alleges, the bank filed fraudulent documents to move forward with the foreclosures. "Taken together and separately, (BofA's) deceptive practices have resulted in an explosion of delinquencies and unauthorized and unnecessary foreclosures in the state of Nevada," the suit alleges.

What must it be like to have an attorney general who thinks consumer protection is more than just counting McNuggets, (as Wisconsin's AG, J.B. "Van" Hollen says it is?)

And look at that large print -- where have I heard that before? Oh, yeah -- here, where I was trying to explain to Judge Vandehey in Grant Count, Wisconsin, that that's exactly what happened.

Bank of America, for its part, continues to work to get releases not just from foreclosure-related practices, but from any future legal claims against it, so if you're wondering what side to back here, I'll spell it out for you:

A.) The winning side: is the side that Iowa AG and the coalition of AGs, backed by Giving-Up-On-You Pres. Obama, are on: they favor settling before completing the investigation, and giving wide-ranging releases from all liability.

B.) The losing side: Nevada, New York, Massachusetts, and Delaware, who favor actually pursuing litigation intended to prove wrongdoing. (Also on the losing side: Homeowners.)

A man can dream. And a man can write that dream online and win $10,000.

2011-09-04T07:01:00.001-07:00

This is a Sponsored post written by me on behalf of UPromise for SocialSpark. All opinions are 100% mine.

Have you gone over to the UPromise Dream wall to submit your dream, and vote for other’s, like I asked… no, TOLD, you to do not so long ago?

That was an ORDER, soldier! And anyway, even if it WASN’T an order, and even if you WEREN’T about to be court-martialed for lacking in esprit de blog (literally: blog-sprites, a tiny creature that inhabits laptops and makes the “k” key become loose over time.)(They live under the key).

Whew! It’s still early today and I’m not full of coffee yet. But I am full of dreams, which is where we started: The UPromise Dream Wall.

UPromise is a way to save money for college as your kids grow: joining UPromise helps get cash back that saves money for college, so the earlier you join the more money your kids have for college. Already, UPromise has helped thousands of kids go to college, and from now until September 29, they’re doing even more: They’re giving away $20,000 directly to help further dreams.

UPromise is letting you enter your dream on their Dream Wall. at www.upromisetodream.com, and each week they’ll pick a dream and give that person $1,000. In addition, everyone gets to vote on which Dream they like the best – and the top vote getter by September 29 gets $10,000!

I’ve entered my dream there: I want Mr Bunches and Mr F to go to college and learn how to cure autism, or how to work with people struggling with autism and make their lives better. (I’d also like them to play for the Buffalo Bills and be movie stars, but that’s besides the point.)

You can go to the Dream Wall and find them and vote for my guys – and enter your OWN dream, whether you’re a college-age kid (or soon to be one) or have kids of your own, or someday will.

Start dreaming. And let’s forget about all that Blog-Sprite stuff, okay? If you go around telling people I said something like that, my sprite’ll get mad and wreck my J button, too.

(Click here for the dream wall official rules.)

Why WOULD a company make a loan that's doomed to fail? (My Actual Case Results)

2011-09-02T07:10:00.000-07:00

I don't often report My Actual Case Results if the outcome is unsatisfying -- i.e., a loss -- but I'll make an exception in this situation, because I'm right.

So here's the set-up: we represent a homeowner in a case pending in Grant County. This particular homeowner, a few years back, had a first mortgage on her house in favor of JPMorgan Chase Bank (then just "Chase," which is what I'll call them in this post.) She also had a second lien on the house in favor of SWCAP, a lien that had been put in to help with home repairs. That second lien was a no-payment lien with a due-on-sale provision.

The homeowner needed to do some sewerage hookup and had no money to pay for it, so she did what any reasonable homeowner does -- called a lender, in this case, her lender, Chase, and asked if she could borrow the money.

Chase reviewed her situation and advised her -- advised her, this homeowner who is not extremely sophisticated in terms of borrowing -- the take out a whole new refinance, including cashing out to pay for the repairs, and including advising her to pay off the SCWCAP lien.

Advising her. That's not even disputed: Our homeowner has an affidavit in the record swearing that's what Chase did. Chase has no counteraffidavit.

Chase then prepared a loan application, falsifying the homeowner's income -- overstating it, because the amount of income needed to pay the new payment was more than what the homeowner actually made.

And then Chase made the loan.

Our client, the homeowner, paid the loan for as long as she could, with help from her ex-husband, but ultimately she couldn't keep up and went into default.

That's when she applied for Still Grudgingly President Obama's horrible HAMP program, and was told to make trial payments while the application was pending.

Many months later, Chase foreclosed.

Without acting on the HAMP application.

So when we got involved, we opposed the foreclosure and said it was inequitable for the lender to foreclose under those circumstances -- that our client had a right under the Massachusetts case of In re Bank of America to enforce the HAMP contract, and that Chase's actions in overstating her income and advising her on the worst possible course of action constituted "unclean hands" barring foreclosure in part because this was a loan "doomed to fail."

(I have, in two other cases, convinced courts that "doomed to fail" loans are actionable, including being awarded $11,000 in damages in one case for a doomed to fail loan.)

Judge Vandehey, in Grant County -- who I've always been impressed by, other than this case -- asked me in the hearing: Why would Chase make a loan that is doomed to fail?

So I told him: They made the loan because investors were buying loans; I said it was a game of "hot potato" (yes, I said that on the record) in which lenders simply made loans, sold them for a premium, and didn't care if the loans could be paid, because they got their money and someone else would be left holding the bag.

Judge Vandehey didn't buy it; he ruled that any problems in the inception of the loan didn't amount to unclean hands and granted a judgment of foreclosure.

That was yesterday, September 1, 2011.

Today, September 2, 2011, I woke to find this the main story on Huffington Post:

U.S. Set To File Suits Against Big Banks Over Mortgages

The story that accompanied that, in part, said this:

The agency that oversees mortgage markets is preparing to file suit against more than a dozen big banks, accusing them of misrepresenting the quality of mortgages they packaged and sold during the housing bubble... The Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, is expected to file suit against Bank of America, JPMorgan Chase, ...among other banks. ... The government will argue the banks, which pooled the mortgages and sold them as securities to investors, failed to perform due diligence required under securities law and missed evidence that borrowers' incomes were falsified or inflated.

Judge Vandehey is a very good judge.

But judges just don't get it yet.

The rules on foreclosures have changed. Just five years ago, there really wasn't much to litigate in most foreclosures. But the subprime mortgage market created a system in which large-scale and small-scale fraud took advantage of unsophisticated borrowers who were told they could afford loans, and subsequently took them out, trusting these professionals, who were engaged in nothing more than a game of hot potato.

Lenders created a system where loan originators got paid only for new loans, not modifications. Lenders created a system where originators and brokers got paid based on how large the new loan was. Both of those gave incentives to loan originators and brokers to create larger and larger loans, regardless of ability to pay, because the loans were almost always sold on the secondary market, so the originators would pass them on to the big banks who would pass them on to Fannie Mae and Freddie Mac and investors in trusts.

Those investors will be paid -- by Bank of America, Chase, and the others. The government will be paid by our taxes. The loan originators and mortgage brokers have long been paid.

And homeowners will continue to lose houses because judges think this is business as usual, and will continue to ask why would they make a loan that's doomed to fail?

We'll be filing a motion to reconsider, and likely an appeal. Maybe this homeowner will get her house back instead of being yet another victim of a system that made rich banks richer while the government did nothing to help her avoid the effects of a system it created. Or maybe not. But until judges get it, I'm like a guy trying to hold back the tide using a kid's pail -- and the judges keep taking my pail away.

(And now you understand the photo, right?)

Emotional distress and parents, part 1: A frivolous case raises some questions. (Family Law)

2011-08-30T06:39:00.000-07:00

Here's the thing: one of the most common things lawyers do these days is yell frivolous -- no matter what the claim, no matter what the facts, no matter what the law, 99% of all legal pleadings, I bet, include, somewhere, a lawyer claiming that what the other side is doing is frivolous.

That poses a lot of problems for lawyers and judges -- -- not least the murky ethics of saying something is (legally speaking) frivolous when clearly it is not -- including spending a lot of time litigating over issues that should not be litigated.

So when I come across something that truly is frivolous, I like to highlight it to help the others in my profession discern the difference between "I don't like your case and would rather you didn't sue my client but don't have a counterclaim to pressure you" (which is what most claims of frivolousness boil down to) and "actually frivolous."

Here, then, is actually frivolous: The (spoiled, alienated) adult children who sued their mom -- with their dad as their lawyer -- for being a bad mom:

Illinois mom Kimberly Garrity today applauded a court ruling that threw out a lawsuit by her two children who had sued her for allegedly being a bad mom. ... Garrity, 55, battled her kids Steven Miner, 23, and Kathryn Miner, 20, for two years. The children sought $50,000 for emotional distress stemming from the damage of her supposed bad mothering. ... Raised in a $1.5 million home by their father, the children alleged the Garrity was a lousy mom because she failed to send money for birthdays, called her daughter home early from homecoming, and threatened to call the police on her son, then 7, if he didn't buckle up in the car. Steven also accused his mother of once smacking him on the head, saying that he still suffers from headaches. One of the exhibits in the case included a birthday card that Steven called "inappropriate" because it failed to include cash or a check. The card did include the inscription, "Son I got you this Birthday card because it's just like you ? different from all the rest!" On the inside Garrity wrote, "Have a great day! Love & Hugs, Mom xoxoxo," according to court documents cited by the Chicago Tribune.

Apparently, the courts treated this suit seriously -- deciding whether Garrity's conduct could be considered "extreme" or "outrageous," but finding that they were instead only "unpleasant and perhaps insensitive."

The real reason for the case was hinted at by Mom's lawyer, who pointed out that the kids were represented by Mom's ex, and who accused said ex of trying to "seek the ultimate revenge" by filing this suit.

Dad, for his part, claimed he tried to tell the kids not to file the suit, essentially shrugging and saying "eh, what could I do?" (Answer: he could have not represented them.)

What went uncommented on in any news story I read was whether this was a legitimate claim in the first place -- whether any parenting could ever be the basis for a claim for "intentional infliction of emotional distress."

Although it's not generally commented on, domestic violence victims can sue their batterers for damages; not many lawyers do that because family lawyers usually aren't personal injury lawyers, so they don't give much consideration to the claim (and possibly waive away hundreds of thousands of dollars in damages by using form marital settlement agreements).

Kids, theoretically, could also sue their parents for battery -- so why not "intentional infliction of emotional distress?"

NOTE: I'm not saying the Garrity suit wasn't frivolous. It was. A suit brought by an ex-husband against his ex-wife, with the thin allegations mentioned in the news stories, is, in my mind, presumptively frivolous and should not have been brought. I'm just examining whether there is such a claim that can be made.

I did a nationwide search of all jurisdictions for cases that included "parent" and "intentional infliction" and "emotional distress" to see what other courts have held -- and, frankly, the cases I came up with were fascinating in their breadth and scope of the kinds of claims that have involved families and emotional distress claims. So rather than gloss over them, I figured I'd give each case it's own segment, beginning with this one, and moving on to the other cases I've found in Wisconsin and other jurisdictions.

So coming up, I'll begin with a look at those cases. Until then, remember that (at least in Illinois), parents are free to not give kids money for their birthdays, no matter what bitter ex-husbands have to say about it.

Don't expect much from that Attorneys General settlement, homeowners. (Mortgage issues)

2011-08-28T05:32:00.000-07:00

In a move that is definitely symbolic of just what kind of attitude the nations attorneys general have decided to cop towards the Banks that profited by kicking you out of your house, the only tough guy on the team has been let go. According to the HuffPo:

New York Attorney General Eric Schneiderman on Tuesday was kicked off the committee leading the 50-state task force charged with probing foreclosure abuses and negotiating a possible settlement agreement with the nation's five largest mortgage firms, according to an email reviewed by The Huffington Post.

Schneiderman was one of roughly a dozen state attorneys general leading the talks with the five companies, alongside representatives of the U.S. Department of Justice, the Department of Housing and Urban Development and other federal agencies.

Why was Schneiderman the second-most-shocking New York departure this month (after Buffalo shipped off WR Lee Evans, of course)? Maybe because he thought investigators should, you know, investigate:

But state prosecutors and federal officials are pressing to complete a proposed settlement with the five companies even though they've initiated only a limited investigation that hasn't examined the full extent of the alleged wrongdoing...

Schneiderman ...has been among a group of state legal officers who has also questioned the desire for a speedy resolution.

Never fear, though: ScheiderMan(TM) is still on the case:

He's leading his own investigation into mortgage improprieties, subpoenaing documents from the nation's largest financial institutions and reviewing court records for possible illegal home repossessions.
...

This month, Schneiderman accused Bank of New York Mellon, the 11th-largest U.S. bank by assets, of "repeated fraud and illegality" when it came to its actions as a trustee for various mortgage securities, and he accused Bank of America of fabricating missing documents when foreclosing on some homeowners who defaulted on their mortgages.

But not for long:

Top Obama administration officials recently reached out to Schneiderman and his allies, effectively requesting he get in line...

The state and federal discussions with the targeted banks -- JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial -- center on the banks providing distressed homeowners with reduced monthly payments, lower mortgage principal amounts or other relief in exchange for a release from liability for past illegal actions. An agreement could yield up to $30 billion to be used to allow troubled borrowers to remain in their homes or to help others move into rentals ... The bigger the effective grant of immunity from potential government civil lawsuits, the more cash the companies are willing to pay to settle the accusations, these people have said.

The problem with that is: how much have you already been helped by TARP and HAMP and EHLP? If you said zero percent, give yourself a gold star, because that's all you'll get from this settlement. Maybe you can camp under it once you're homeless.

They never taught me THIS in law school. I learned this kind of leadership on the mean streets... of Hartland?

2011-08-28T04:50:00.001-07:00

This is a Sponsored post written by me on behalf of Straight Talk for SocialSpark. All opinions are 100% mine.

So now it’s official: I’m a partner at our firm, and with great power comes greater slacking off.

And also greater responsibility. I didn’t forget that part. In fact, I remembered it a little extra. (No don’t bother asking how that works. You have to be a partner to understand.)

What I’m trying to put into motion at our firm is to bring us into the 21^st century in terms of client service: I want our clients to be able to get in touch with me, and my staff, as instantaneously as possible, whether it be by phone or email.

And to do that, I’m reading up on Straight Talk – the nationwide cell provider that gets great phones from reliable manufacturers at reasonable costs.

I found out about Straight Talk by seeing actual customer videos like this one:

Which led me to read up more on it, and I found out that Straight Talk gets great phones (like Motorola, or LG) that use reliable networks, with phones starting at $10 – phones with cameras, mp3 players, Bluetooth, even smart phones.

So that’s phase 1: I can get phones for all our employees, smart phones that’ll let them look up addresses, take calls at work and while out of the office, and check their emails to keep in more-constant contact with our clients, all for as low as $10.

I can then easily sign them up for Straight Talk, with no contracts, no credit checks, no surprise bills – just the monthly charges that are disclosed.

And that’s the REAL key: Those monthly charges are low enough that I won’t have to worry about phone bills. Unlimited talk, text, data – everything you need – for just $45 a month. Which means not only can I let the staff have these phones, but I can stop worrying about how they’re using them, because they CAN’T go over on the charges.

And they’ll be happy because they’ll have cool new smart phones. Meanwhile, I’ll be happy because I get more productivity out of them, and clients will be happy because they’ll be able to get a hold of us all, so EVERYONE is happy. When’s the last time you heard THAT about a law office?

I thought so.

On top of that, think how much money our employees will save on their cell phones – they can use the office phones and will have more money to spend in their lives, while I’m saving money on office phones so we have more perks around here. I’m sure that’s why other professionals use Straight Talk - -like the Straight Talk Fantasy Fishing team:

And if it’s good enough for them, it’s good enough for me. Remember, your mom always told you to save money where you can, and mom knows best. So I’m going to try to get Straight Talk for our firm, and you should to. Then call a friend and tell him to get Straight Talk, too.

Wisconsins' "race-notice" rules get a little less racy, notice-y for big banks, or "When is 1st not really 1st"? (Mortgage/Banking Issues)

2011-08-26T07:25:00.000-07:00

Wisconsin is a "race notice" state - -meaning first to record an interest in land gets priority. Or it was, until the other day, when the Wisconsin Court of Appeals decided to throw a wrinkle into the works by upholding the (apparent) intention of some people who weren't eventually involved in the deal at all, making it less certain, in the future, what rights lienholders might have -- but freeing big banks from having to read, so, hooray!

Here's what happened: The case is U.S. Bank v. Landa, and the background is this:

Landa bought a home for $210,000, financed 80/20 style -- Landa gave two mortgages, the first securing 80% of the purchase price, the second securing 20% of the purchase price.*

*(NOTE: Is this fraud? The purpose of 80/20-but-actually-100%-financing is to avoid private mortgage insurance by making it not look like 100% financing when it really is. Just something to think about.)

That deal was between "Mortgage Lender Network USA" and Landa, and Mortgage Lender Network drafted up the documents. One of the mortgages, for $42,000, said that it was a "SECOND MORTGAGE", -- but that designation was apparently the form title at the bottom of the page. The other mortgage did not designate what its priority should be; that one was for $168,000.

When it came time to record them, for some reason, the "SECOND MORTGAGE" was recorded nearly a month before the first mortgage.

In June, 2008, Land's condo association filed a lien for fines, followed by another one a few months later. Then, after those two were filed, Mortgage Lender sold the $168,000 note and mortgage to U.S. Bank.

So when U.S. Bank bought the loan, the title record would show this (if it looked):

1. $42,000 "SECOND MORTGAGE."
2. $168,000 note.
3. Lien for condo fines.
4. Lien for condo fines.

That, in turn, would tell someone cognizant of the law, that there is an issue here -- because condo liens have priority over everything except "“[a]ll sums unpaid on a first mortgage recorded prior to the making of the assessment."

As you'd expect in a situation where the owner is not paying the condo fees, Landa also did not pay the mortgage, and U.S. Bank foreclosed, arguing that it's $168,000 mortgage was actually a "first" mortgage because, you know, that's what Landa and Mortgage Lenders intended.

The condo association took the stance that a first mortgage is a mortgage that's recorded first, which the Court of Appeals said

misses the real issue, which is: what is “a first mortgage” for purposes of WIS. STAT. § 703.165(5)(b).

Which is weird, because the association (I assume) was arguing that first in time and first in real life also means first 'for purposes of Wis. Stat. sec. 703.165(5)(b)." But apparently they did not; why else could their argument have been so easily dismissed... in a footnote?

The Court of Appeals went another route entirely: They said that the first-in-time mortgage said it was a SECOND MORTGAGE, and so the second-in-time mortgage must have been intended to be a first mortgage, and the statute, the Court reasoned, says a first mortgage, not the first mortgage -- thereby expanding what can be a first mortgage.

One would assume that a mortgage which is first is "a" first mortgage. That seems simple and in keeping with "race-notice" statutes -- a party could simply say "hey, there's the first mortgage" and point to a line-item on a title report. (Title reports, after all, don't pull copies of all the documents. They just list the highlights of them and describe them.)

But after this case, "a" first mortgage is "any mortgage intended by the parties to be first, no matter when it was recorded in time."

Sounds simple, right! Easy! Fun!

The Court bolstered its 'opinion' by noting that

The mortgages on their face reflect that the $168,000 U.S. Bank mortgage is superior to the $42,000 mortgage. The fact that the $42,000 mortgage was recorded prior to the $168,000 mortgage—with both mortgages being recorded before Meadowland’s condominium liens were filed— does not alter the $168,000 mortgage’s contractual status as the first mortgage.

But that has two problems. First, the $168,000 mortgage didn't say anything about it's priority. The SECOND MORTGAGE did, but it didn't say what it was second to, and the mortgages were recorded about three weeks apart -- so unless you went and read the documents, and knew that they were executed at the same time, and knew the intentions of the parties -- all things that don't necessarily appear on a title report -- you wouldn't necessarily know any of that.

And second, the "contractual status" of the mortgages was a status accorded those documents by Mortgage Lender and Landa -- but this case was about U.S. Bank and the condo association. U.S. Bank, as an assignee of a contract, might be bound by what its predecessor intended, but why is the association bound by the interpretation of a set of contracts imposed on those contracts by others?

What Landa stands for is "You have to read every document in the record to determine what your rights are," which is contrary to a Race-Notice statutory system. Race-notice says first is first. What the Court of Appeals says is First is what some people years ago said it was, or maybe something else entirely, or first might even be second, if second is first.

I'll just say it: The video made me cry (Autism Works)

2011-08-20T06:30:00.000-07:00

This time around:

-- Project Lifesaver may be having problems,

-- the Autism Society of Greater Madison golfs,

-- college for people on the spectrum,

-- and a review of a semi-autism-friendly business,

but first this:

That's from "Lou's Land," and I had to stop watching it halfway through and then watch it in pieces because it hit home, especially the part about "discovering a new normal." I won't take away from Lou's story by telling my own here; I'll just say that I understand exactly what he means and I've bookmarked his blog. You should, too. You can't help someone unless you try to understand what they've going through, and blogs like Lou's can assist you in knowing what it's like to live with autism.

On to happier, more hopeful things, like college for autistic people. The Autism Speaks official blog has a post on helping students on the spectrum achieve in college, pointing out something that I didn't know -- Section 504 of the Rehabilitation Act requires that colleges make reasonable accommodations to people with learning disabilities, including (but not limited t0) autism spectrum disorders. The protections and services aren't as aggressive as those for kids in high school and lower (provided under the Individuals with Disabilities Education Act [IDEA]) but they're there and may help kids on the spectrum get into and through college. Autism Speaks has some pointers and links for more information, but the school counselors can provide information, as well.

Update on Project Lifesaver: On August 7, I mentioned elopement and wandering and recommended "Project Lifesaver," a program that fits wanderers with GPS-enabled bracelets.

On August 16, we got a letter from the Dane County Sheriff's Office that raised concerns about this program. The letter says the office "has been experiencing significant equipment failures with many of our Project Lifesaver clients" including the "lack of any transmitted signal," which, of course is the whole point of the bracelet. The letter concluded that:

Without reliable and operating equipment in addition to the lack of support from Project Lifesaver International, the program does not meet the standards of the Dane County Sheriff's Office... the Dane County Sheriff's Office will not longer implement the program.

The Dane County Sheriff's Office will try to find a substitute program; if you have a friend or relative on Project Lifesaver, please pass this on to him or her, and don't trust the equipment. (We haven't; Mr F still doesn't get to go outside alone and we keep all our windows and doors double-locked.)

Business Review: We took our kids to get their annual photos -- Sweetie starts planning her Christmas cards around June, and the annual Christmas card photo is usually taken in August. We don't go anywhere fancy -- just to the Sears Photo Studio at the West Towne Mall in Madison, Wisconsin, and they're generally pretty good there.

It's hard to get some kids on the spectrum to sit still for anything, let alone pictures taken by a strange person. When we took the twins for haircuts last spring, for a week before their teachers played "hair cut" with them, telling them social stories about getting hair cut (social stories are stories designed to teach autistic kids social skills) and pretending to cut their hair, and it worked great; the boys sat still during their hair cuts and Mr Bunches actually enjoyed it. (Mr F still cried, but quietly and sitting, instead of hollering and trying to escape like he used to.)

We tried the same thing with pictures -- for two weeks before, each therapy session ended with the therapists posing the boys and taking their picture with our camera, just like a photo studio, and those sessions went well. The actual day of the photos, we had a bit more trouble.

We arrived about 10 minutes early, and had to wait about 15 minutes later than our appointment, which was problematic. While no business can entirely control their schedule, waiting with autistic kids is trouble, because we'd taken the time to have the boys tired out a bit by playing (another strategy the therapists had recommended), but that doesn't work so well if they then rest up.

Mr F was also upset because -- something you never think about until you're with an autistic kid -- we'd walked through the store to get to the studio, and the store was full of clothing hangers, which Mr F likes. I try to discourage him from simply taking a hanger as we walk through the store, so by the time we reached the pictures, he was disgruntled and getting upset.

(The worker didn't mind that we then borrowed a hanger from a nearby department, which helped calm him down.)

Once we actually got the pictures going, the photographer was great -- she followed our instructions on what order to take the pictures in (get the little ones done first) and followed our instructions to just start snapping pictures, not worrying about whether kids were sitting correctly or facing the camera or smiling.

About 10 minutes of photos later, we had some of the best ones yet. So other than making us wait (even though we'd reminded the woman when we made the appointment that the boys were autistic) the trip went reasonably well.

Golf Outing: If you follow me on Twitter, you know that I began volunteering with the Autism Society of Greater Madison (ASGM) last night; my first volunteer effort was helping out at their annual golf outing, "Golf FORE Autism" at the George Vitense Golfland:

I was there from 6-8:30 p.m., helping people navigate the mini-golf course and then helping move tables around. Several area businesses including NBC 15 sent teams out to play in the par-3 midnight golf outing, and while I had to leave before the night was over, it seemed like everyone was having a great time.

ASGM is the oldest autism chapter in the country, and chaired by David George of NBC 15; if you are interested in the many events they sponsor or are looking for help beginning to navigate the world of autism, go to their site.

Autism Works is an across-all-my-blogs post that attempts to spread information about resources, businesses, apps, and other things of interest to people who have autism or have a relative who is autistic. If you have information to share, leave a comment or Email me ; please put "autism works" in the subject line.

One miiiiiiiiiiiiiilllllllllllllllllion dollars... and then some. (What's My Case Worth?)

2011-08-16T18:32:00.000-07:00

What would you do if your wages were wrongfully garnished?

What would you do if your wages were wrongfully garnished twice? By the same debt collector?

What if your employer told the debt collector they had the wrong person, but they still went ahead and garnished your wages anyway?

Twice?

If you were Lucinda Yazzie, you'd sue, and you'd get an award of $1.26 million for the case against the law firm of Farrell & Seldin:

A federal jury in New Mexico has awarded a plaintiff $1.26 million in a case that accused a collection law firm of twice attempting to garnish her wages for a debt she did not owe, according to an article in the Albuquerque Journal.

Rob Treinen, the attorney for plaintiff Lucinda Yazzie, told the paper that the jury handed down their ruling on Friday against The Law Offices of Farrell & Sandlin and Target National Bank, who was named as a co-defendant in the suit. ... The case stretches back to December 2006 when Target National Bank assigned the past due credit card account of Yazzie to Farrell & Sandlin. When Yazzie was initially contacted, she insisted that she had never had a Target credit card and that there was another person in her area with the same name.

Yazzie said that she frequently got calls from other creditors attempting to find the other person. But the law firm filed a suit in April 2007 anyway and got a garnishment order. When they presented the order to Yazzie’s employer, the business insisted that they had the wrong person.

The garnishment writ was then dropped. The process played out again two years later when Farrell & Sandlin won another garnishment order for the same account. This time, Yazzie’s employer not only formally denied the request, but followed up with phone calls, leading to a hearing where both Yazzies were due to show up as well as the collection law firm, which did not appear.

The second garnishment order stayed in force until Yazzie filed her own suit against the law firm in March 2010, claiming violations of the FDCPA and other consumer statutes. During the legal process, it was discovered that Target Bank had indeed supplied Farrell & Sandlin with the correct name, address and Social Security number of the true debtor, not the Lucinda Yazzie named in their garnishment actions. But a former employee of the law firm shortly after receiving the account changed the SSN in the company’s system to that of the Yazzie named in the suit. The firm claimed that this went against company policy and entered a bona fide error defense, which was rejected.

The jury awarded Yazzie $161,000 in actual damages for emotional distress and $1.1 million in punitive damages. Although Target’s attempts to be dismissed from the lawsuit were unsuccessful, the judge noted that the company did not err in the assignment of the account.

It is not known what Target’s liability is in the case.

A message with Farrell & Sandlin left by the Albuquerque Journal was not returned Friday.

(Source.) Two things to note here:

First, the award is almost certainly not solely for the FDCPA, which doesn't allow punitive damages.

Second, the plaintiff in this case won in front of a jury because she had no debt that was actually owed; juries, in my experience, aren't as kind to people who are harassed but who actually owe the money.

On the other hand, this is the rare million-dollar verdict in an FDCPA case that I've heard entered by something other than default, so that's something.

I learned something today...

2011-08-16T16:01:00.001-07:00

This is a Sponsored post written by me on behalf of Net10 for SocialSpark. All opinions are 100% mine.

I have for almost 8 months been letting Mr F and Mr Bunches, the twins, play with my smart phone, and it occurs to me each time I do that it is probably not the best idea I have ever had.

My smart phone cost me, after all, about $200 and I use it ALL THE TIME, and not just to play Plants vs. Zombies. Take today, a typical workday: I got up, checked my emails on my phone, posted some stuff to Twitter, read the headlines, then went to the navigation and had it guide me to my court hearing two hours away, while also listening to the radio on it and making notes about calls I had to make later.

So I NEED my smart phone -- but Mr Bunches and Mr F LIKE my smart phone, because they take pictures and play games and call people (usually my clients, but that's the price of dealing with me), and I don't want to deny them the fun of that. But I also do not want to get them their own $200 phone and do not want them to wreck mine, which left me at a loss, until I saw this video from a Real NET10 customer:

And realized that I DID have options -- namely, get Mr F and Mr Bunches their OWN smart phone -- but spend almost NOTHING on it with Net 10.

With Net10, I can get a name-brand smart phone from people like LG or Motorola or Kyocera, and I can get unlimited talk, text, and data, all for just $50 a month, and the phone starts at $60, so it's WAY cheaper than what I'm paying now.

And I can then let Mr F and Mr Bunches have that phone to use -- to be able to practice making phone calls, and using the touch-screen to play their games and do their learning - without getting my own phone in danger.

In fact, after I checked out the Net10 deals on their Twitter and Facebook pages:

• http://twitter.com/#!/Net10_Wi…
• https://www.facebook.com/NET10…

(where you can also find a Cute NET10 commercial)I began thinking maybe I should ditch my own phone: Net10 has no credit checks, no contracts, and they're super-simple to activate -- just buy a phone and go online to their site and start it up, and I can then have my less-expensive phone, too, saving money and allowing me to buy even more apps and helpful things, for me AND the boys.

It doesn't seem to make much sense to pay $200 for a phone when I could spend $60, and why pay the nearly-$100 a month on my phone when I can get Net10's unlimited plan for $50 a month -- and switch to one of their other plans every month, if I want (with no contract, I can switch every 30 days or so, taking the plan that makes the most sense for me that month.)

All valid reasons to make the switch, you'll agree -- and here are even more, as you listen to What Rob has to say:

Full QWERTY keyboards on smart phones for under $60, easy to sign up, no surprise bills -- I think we all learned something today.

The Court of Appeals decided that a statute meant what it said -- but it may all be moot.

2011-08-15T10:30:00.000-07:00

Section 421.201(10) of the Act provides that any term of a writing purporting to apply the laws of another state to a Wisconsin Consumer Transaction is invalid. You would expect, therefore, that a case considering whether a clause purporting to apply the laws of Delaware to a suit against Cross Country Bank, Inc., would do more than merely mention that section. You’d expect wrong, though.

In Coady vs. Cross Country Bank, Inc., 2007 WI App 26, a lass-action suit alleged that Cross Country violated chapter 427, and the Court considered which law to apply to determine if the mandatory arbitration clause was enforceable -- but in doing so, the Court never bothered discussing with any real detail the provision of the Act that says you can’t force other states’ laws on consumers.

But there’s a lot that doesn’t get mentioned in the case, which also may not be good law anymore, considering what the U.S. Supreme Court has done about arbitration clauses vis a vis the FAA.

The bulk of the dispute here was about whether or not Cross Country had to face a lawsuit in Wisconsin courts, and if so, what law should apply. The plaintiffs alleged violations of the Act’s debt collection provisions, but the exact violations are unspecified beyond “harassing phone calls” and “threats.”

In response to the suit, Cross Country tried to stay the litigation to compel arbitration, and the plaintiffs (for some reason) opposed that.

The contract in question included clauses mandating that Delaware law and federal law (specifically, the Federal Arbitration Act) would apply and that arbitration was mandatory if Cross Country chose to arbitrate claims. The circuit court held the arbitration clause to be unconscionable, and the Court of Appeals affirmed.

Likening the Act to Wisconsin’s Fair Dealership law, the Court noted that the Act is an “important public policy” of Wisconsin, and that choice-of-law clauses typically cannot be used to evade such laws, especially when the law is one that’s intended to balance the bargaining power between the parties. Because of that, Wisconsin’s Consumer Act, not Delaware law, applied to the case.

En route, the Court of Appeals found that Cross Country hadn’t proven a significant connection to Delaware, beyond that the contract said the credit in question was extended in Delaware.

That discussion, too, left something lacking – two things, actually. First, the Court dodged the question of where credit is extended, exactly: if the Bank is in Delaware, and the consumer is in Wisconsin, where does the transaction occur? That was not discussed or answered here.

Another question that went undiscussed: Could the customers have opted to apply some or all of Delaware law? As of this writing, Delaware has a 3-year statute of limitations on credit-card debts, as opposed to Wisconsin’s 6-year statute. What if consumers wanted to use the shorter statute to bar claims against them? The Court did not discuss whether consumers could opt out of the Act’s protections, willingly, even though the Act allows for such a provision.

Those questions aside, the Court did go on to mirror the Wisconsin Auto Title case and found the arbitration clause unconscionable for more or less the exact same reasons as Wisconsin Auto Title did: an imbalance of power and understanding, plus a limited access to the type of credit issued here resulted in the arbitration clause being unenforceable, and the plaintiffs having the right to proceed with their class action suit.

For a while, at least. The Court also found that the decision here was not pre-empted in any way by the Federal Arbitration Act, an increasingly-muscular procedural law that says state laws cannot single out arbitration clauses for unfair treatment. Cross Country asserted that any provision of law in the Act prohibiting waivers of the right to bring class action suits was invalid under the FAA, but the Court of Appeals didn’t buy it:

We need not reach the preemption issue that Cross Country's argument raises because our conclusion that Cross Country's arbitration clause is unconscionable is based on the common law of contracts, not on any prohibition on class action waivers under the Wisconsin Consumer Act. See Wisconsin Auto Title, 290 Wis.2d 514, ¶ 79, 714 N.W.2d 155 ("Our contract law on unconscionability does not single out arbitration provisions. We therefore conclude that the Federal Arbitration Act does not preempt our unconscionability analysis."

Having not dealt with the issue at all, really, it’s not clear how the Court would handle the apparent conflict with AT&T Mobility LLC v. Concepcion, a 2011 U.S. Supreme Court decision which held that arbitration clauses cannot be invalidated by defenses that apply only to arbitration or which derive their meaning from the fact that an agreement to arbitrate is at issue – so a waiver of class action rights and a concomitant requirement to arbitrate may not be subject to the Coady analysis anymore.

Having said all that, too, it seems important to note that in many cases, consumers might well benefit from arbitration, where the rules of evidence don’t apply as strictly, the arbitrators may be more familiar with the law than circuit court. A knee-jerk reaction that rejects arbitration as the forum for resolution should not be the strategy of choice for a lawyer in a consumer case.

Maybe QUIT helping consumers for a while? (Consumer Law Matters)

2011-08-14T09:06:00.000-07:00

Remember when I pointed out that the consumer credit protection act maybe didn't do all that much to help consumers, and would probably end up hurting them in the long run? Sure you do -- but you could always go here and read it again.

For a little more on the "Please quit helping me" line of thought, consider that Congress and the Fed have been reducing "swipe fees," the fees banks charge merchants to use debit cards. People thought this was a victory for the small business and the consumer.

People thought wrong. From The Consumerist:

The next bank to do away with free checking is SunTrust, and they've got their own unique twist on it.

Starting November 10th, if you have an Everyday Checking account and you use your debit card once for any reason during the monthly cycle, you will get charged a $5 fee. Besides not using the debit card, there's no way to avoid the fee if you're an Everday Checking customer.

No way, that is, unless you want to keep five thousand dollars on hand:

However, if you go to a higher bracket checking option with at least a $5,000 minimum balance requirement, there's no monthly fee for using the card.

Why's this happening? The Consumerist didn't say -- but the article notes that it's "industry-wide" and that it's only been happening since

the new regulation started hitting that cut the amount of fees banks could charge merchants every time a customer swiped a card,

Hmmmm. Outlaw payday loans, and get pawnbrokers in your city. Reduce annual fees for credit cards, and cut the amount of credit the middle class and poor can get. Get rid of swipe fees, and face imposition of a $60-annual-charge for having a debit card.

Maybe it wouldn't have been a bad thing if Washington shut down? I'm starting to dread what's going to happen once that Consumer Protection agency actually gets going.

This sounds like good news, but it probably isn't. (Consumer Matters)

2011-08-08T07:42:00.001-07:00

The Consumerist is reporting that you can

"Get $500 Each Time Sprint Called You After You Said Stop"

but you know what I think about class actions, so let's first see what else The Consumerist said before I look into it further:

If Sprint telemarketed you after you told them not to call you again, you could get $500 for each time they rang you up, thanks to a recent class action settlement.

Sandra L. Palmer v. Sprint Solutions, Inc. alleges that Sprint telemarketed customers across the nation after they had opted out of telephone solicitations. Also, the suit says that Sprint made telemarketing calls using a robodialer that played a pre-recorded message to customers living in Washington State. The suit says that the telemarketing violates the federal Telephone Consumer Protection Act, Washington's Automatic Dialing and Announcing Device statute, and Washington's Consumer Protection Act.

Sprint denies all wrongdoing but has agreed to pay a $5.5 million settlement. You're eligible to make a claim if you are a current or former Sprint customer who received one of the calls between July 23, 2005 and June 13, 2011.

The story notes that you could get that $500 -- and links to the official class action site, so let's go there and see what can be learned.

First things first: Sprint is paying $5.5 million. But that money isn't just for you:

Sprint has agreed to pay $5.5 million into a Settlement Fund (the “Fund”). Eligible Class Members who file qualified claims will receive money, which will be paid based on the total number of people who file a claim. In addition, the Fund will also be used to pay Class Counsel’s Court-awarded attorneys’ fees and costs, a service award to the Class Representative, and all costs of notice and claims administration.

The details of those items won't be hammered out until October, when the final settlement hearing is held. But preliminary court documents note that 5.9 million former Sprint members alone are going to be notified. If all 5.9 million make a claim and get it approved, that's less than a dollar a person.

The actual claims are estimated in that document as going as low as $100, and there's only money for for those who get their claims in not later than November 19, 2011.

The motion for fees and costs will be posted not later than August 22, and by agreement cannot be more than 30% of the settlement fund.

In other words, The Consumerist notes you can get up to $500 if you were telemarketed by Sprint -- but in reality, you might get 1/5,900,000th of 70% of the settlement fund if you act quickly.

What I say you should do is, if you were telemarketed by Sprint and want $500, is call a lawyer, tell him or her about this settlement, then say you want to opt out of it and hire that lawyer to sue. He or she can then photocopy the pleadings in that case, substitute in your name, and get you your actual settlement.

Sound unethical? Well, to me, charging up to 30% of $5.5 million to get virtually nothing for your consumers/clients is, too.