Thursday, June 28, 2012

MERS survives another round in California, to fight again.

Like a punch drunk fighter staggering through another round in the ring, the Mortgage Electronic Registration System, or "MERS," has survived another court challenge to it's ability to make mortgage assignments on behalf of various lenders.

On May 17, 2012, the Court of Appeals for the State of California decided Herrera v. Federal National Mortgage Association, a case where a homeowner tried to invalidate a foreclosure by arguing MERS had no authority to make various assignments of recorded deeds of trust, and that this failure invalidated the current note holder's attempt to foreclose.

I've shared my thoughts, before, on why the popular attacks on MERS won't gain traction in Maryland's courts, since the Maryland Court of Appeals decision in Anderson v. Burson. But I have found one snippet within the Herrera opinion that is worth a moment of thought (and then you can get back to surfing Youtube videos of "Simon' Cat"--hilarious, by the way), and it is here (and the court's internal reference to" Fontenot" is to a prior case involving similar claims against MERS):

Furthermore, since the assignment of the debt (the promissory note), as opposed to the security (the DOT), commonly is not recorded, the lender could have assigned the note to the beneficiary in an unrecorded document not disclosed to plaintiffs. ... This is why in Fontenot the court rejected the plaintiff's claim to set aside the foreclosure as void based solely on the alleged invalidity of the MERS assignment of the note and DOT. The Fontenot court stated: "plaintiff was required to allege that [the bank] did not receive a valid assignment of the debt in any manner. Plaintiff rests her argument on the documents in the public record, but assignments of debt, as opposed to assignments of the security interest incident to the debt, are commonly not recorded. The lender could readily have assigned the promissory note to [the bank] in an unrecorded document that was not disclosed to plaintiff. 
 And there it is. This is the core of Marylands' Anderson v. Burson analysis. And it highlights the threshold issue in any case involving an attack on the lender's standing to foreclose, transfer servicing rights, file proofs of claim in bankruptcy, etc.--does the entity attempting to enforce any term in the debt or security instrument have rights in the unrecorded note?  And that means phsycial possession with a contractual right to enforce.

And this leads to another thought. Avoid the forensic loan audit scam. There is nothing in the generic 20 page "audit report" you purchase from these charlatans that will undercut the law.  If the entity enforcing the lien instrument has physical possession of the note, and has the contractual right to enforce it's terms, gaps in the chain of assignments just don't matter.  Save your money.

Monday, June 25, 2012

Baltimore County property tax scam

The Baltimore County Police and tax office report a growing scam, where you might receive a phone call from someone pretending to be a county employee. The caller will tell you that your property taxes are delinquent, and that a sheriff may be dispatched to your home if you don't pony up.

Follow the link to the official Baltimore County press release. Here are some points from the release:

  • Never give personal or banking information (account and routing numbers) over the phone.
  • Attempt to verify the identity of unknown callers, and if possible obtain a callback number. Remember, the phone number could be linked to a fraudulent location.
  • Never mail currency or checks to an unknown business or person(s).
  • Alert a close family member/friend and call police if the call appears to be suspicious.
  • Call the Baltimore County Taxpayer Services Section at 410-887-2404 if you have questions about your property taxes.
  • Call 911 immediately if a suspicious person comes to your door claiming to be a Baltimore County official collecting property taxes. Baltimore County does not make home visits to collect taxes.
And here is the link to the County's official website, and it's instructions on how to pay your taxes

Wednesday, June 20, 2012

Cab Karma

I spent a relentlessly hot, sticky, muggy, sweaty, uncomfortable day in D.C., earlier this week. Or, as the native Washingtonians call it, "Tuesday." The three digit heat index and high humidity turned my pressed suit into a wet nap, with buttons.

I don't normally dwell on heat and humidity, because it just makes it worse. But as I sloshed along K Street (probably while leaving a long, wet trail, like a slug), I found myself counting the multiple layers of cloth and silk encasing and insulating my ample neck.  At least they are absorbent.

I also contemplated that if the voice-over in "Field of Dreams" implored Kevin Costner to "build it and they will come," what was Pierre L'Enfant listening too?  Likely a voice that intoned "build it and they will drown in their own juices." It's a myth, I know, that D.C. was constructed in a swamp. But it's been a persistent  myth.

A recent piece from John Kelly, of the Washington Post debunks the myth of D.C. as swamp (I've added my own links that did not appear in the original article, with apologies to Mr. Kelly). It's a Washington Post story, citing a Washington based scholar, and it's in writing, so it must be true. Here it is:
Some historians say that, contrary to popular belief, Washington had no swamps. Don Hawkins isn’t one of them. He studied maps and surveys from the late 18th century and determined that there was some swampy land — a whopping 1 percent of the total area that Pierre L’Enfant was charged with designing.
Don says there were swamps (defined as wetlands with trees) at the edge of the Anacostia, at Tiber Creek (today’s Constitution Avenue), around what became the National Gallery, and at Swampoodle, the Irish neighborhood near today’s Gonzaga High School. That’s just a fraction of the capital. No great reclamation project was needed to create buildable land.
In other words, it’s a gross exaggeration to say that Washington was “built on a swamp.”
“I think it has survived because it’s such a useful analogy for the way Congress works,” Don said.
 But in my sodden state, I was absolutely certain that L'Enfant had gazed over thousands of acres of wetlands, laughed into his sleeve, and declared "THIS will be a fitting home for the swamp of democracy." I cursed L'Enfant and expected that the coming negotiations at my next appointment would be quite sharp, partly because all manner of kindness was leaking out of me.

I needed a taxi cab.

I didn't have any cash.
I'd already ducked in and out of one cab, after reading the sticker on the back of a headrest, "cash only."

Damn you, L'Enfant.

I approached a bright blue taxicab, a modern Prius, parked in the shade as it's operator polished the door handles and wiped the windshield, much as I continued to wipe the drippings from the inside of my sunglasses. The cabbie was an elderly Indian fellow, dressed neatly in 70's era business casual, and not looking the least bit uncomfortable in the heat.  He acknowledged my greeting with a slight head nod, and he nodded again to confirm my understanding that he was "in service." In heavily accented english, he said that his shift was just beginning, and that I would be his first customer.  Oh joy!  I was headily anticipating the conditioned air that was about to caress me.  And I  hopped in to the back seat.

"Cash only."

Damn you, L'Enfant!

I apologized for the misunderstanding, wished him a good shift, and returned to my trail of tears. I'd shuffled about 20 feet down the sidewalk when the cabbie called out for me to come back. Very odd.  But I turned and walked back, thinking that perhaps he had found his credit card reader, or maybe even his "Square" device for iPhone (a stretch, I know, but he did operate a Prius, so forgive my first world rationalization).

The cabbie gestured toward the car door and told me to get in-- he would take me to my destination--free of charge.  For a moment, the shock of this kindness almost knocked the Baltimore lawyer right out of me.

As we drove, he gave me a quick rundown on his belief in Karma, and how this gesture would surely guide him to a profitable and safe shift. I offered to visit a cash machine, if he'd wait at the curb, but he refused.  He even insisted that he drive around the block to get me closer to the front door of my destination, without having to cross the street.

That fellow's singular kindness reinvigorated me. I wrung myself out, and finished the last of the day's meetings in a much better state of mind, making a productive and amicable deal with opposing counsel. On the train ride home I made a note to accept another MVLS case when I returned to the office.

Pay it forward.

Friday, June 15, 2012

If you want to be a seaman, get in the boat!

This weekend is a big celebration of the 200th Anniversary of the War of 1812, here in Baltimore. It's a regular "Sailabration," with ships from all over, and lot's of self important people "speechifying" down and around Fort McHenry. All this fuss put me in a nautical mood, and I have always enjoyed maritime law more than any other area of my practice, so what better way to celebrate all those boats downtown than a few lines about some maritime law?

The Maryland Court of Special Appeals took a rare cruise into maritime law, launching the Dize v. Association of Maryland Pilots decision into the big pond of state court case law. Mr. Dize contracted silicosis of the lungs after his employer assigned him to sandblast the hull of a pilot boat owned by the Association of Maryland Pilots. To recover for his injuries from his employer, Mr. Dize sued in the Baltimore City Circuit Court (just a stone's throw from the Inner Harbor and the Chesapeake Bay). He lost on motion in the trial court, and he lost again, on appeal.

Now, it's not unusual for an injured worker to seek recompense from the boss. What is unusual in this case was Mr. Dize choosing to call him self a "Jones Act seaman," rather than a "longshorman," or just a regular 'ole "employee."  There's a difference, you see. He was seeking classification that has traditionally been granted our most imperiled maritime workers, a classification that would not have capped his recovery the way regular joes are limited by state or federal worker's compensation acts (you've heard the stories of scheduled injuries, and "what's a finger worth" after a dismemberment). The Jones Act seaman sues his employer for negligence, without the limitations of any scheduled recovery.  AND he gets to claim a daily stipend, called "maintenance and cure" even before he's won the case.  AND some contributory negligence on the part of the injured employee only reduces his recovery, it is not a complete bar, like it is in Maryland state law (at a recent Law Club meeting, I learned that Maryland is now in the minority of states where any amount of contributory negligence is a complete bar to recovery..that's another post for another day).

The federal "longshoreman," like the state worker, has limited recovery under the federal Longshore and Harborworker's Compensation Act. So, it's good to be a Jones Act seaman. I've litigated in all three areas, and Jones Act cases are, by far, the most fun (excluding the injured fellow, who usually would rather not be involved). I've learned so much cool stuff from crawling around vessels, including freighters, container ships, tugs, pilot boats, crab boats, and container cranes in Jones Act cases.

About 100 years ago, Congress created the Jones Act to protect the brave folks plying the high seas to bring us all those foreign goods we so deserve, called the Jones Act. This gave special protection to seafaring men and women injured in the service of our merchant fleet. After all, where would we be without our vanilla beans from Madagascar, or french wines, or bat guano from South America (really, look it up...Baltimore's port was built on this stuff!  In 1887, one island near the Dominican Republic shipped 462,000 tons of the stuff scraped out of 22 caves! And if you don't believe me, look at these 1899 log books, showing large tonnages of the stuff dropping on Baltimore's docks.) These guys deserve special protection.  After all, here's just a partial list of the bad stuff that can happen,compiled by another maritime lawyer:
    • Loss of footing. Surfaces on any vessel may become slick due to exposure to ocean spray, rain, humidity or wet lines hauled aboard. When the ship is not properly equipped with non-slip surfacing that is maintained, these areas present a fall hazard that can and often do result in serious injury.
    • Nets, lines and rigging. Rope, when not properly handled, is extremely dangerous. Feet and limbs can become entangled causing a fall or worse.
    • Shifting cargo. When cargo is not properly secured, the movement of the ship can cause it to shift, creating the potential for a seaman to be struck or crushed.
    • Lack of adequate railing. All stairwells and even some walkways require railing in order to allow workers to safely navigate them in high seas.
    • Fall from height. Most vessels and offshore platforms have multiple stories. Improper railing, inadequate flooring or lack of safety measures such as improperly secured harnesses can result in a nasty fall.
    • Fires and explosions. Ships and offshore drilling platforms require some heavy machinery to function; when sparks ignite, especially when combined with the occasional gas leak, workers can be burned by flame.
    • Chemical burns. Contact with harsh chemicals due to improper training, incorrect storage or spills can cause serious and painful burns.
    • Overexertion. Everyone has an idea of the limits of his or her own strength. Seamen are regularly asked to perform tasks that push those limits. When tasks go beyond the limits of physical endurance or strength, muscular and skeletal injuries can occur that may permanently damage a seaman’s ability to make a living.
    • Decompression illness (DCI). Commercial divers execute extremely technical dives at extreme depths. These dives must be planned and executed exactly in order to avoid DCI (or “the bends”). When equipment fails or planning goes awry, divers are put in serious danger.
    • Struck by a falling object. Cranes move large loads around barges, vessels and platforms. When cranes collapse or loads are improperly secured, workers on the deck below are in serious danger of being struck by the falling cargo.
    • Malfunctioning equipment. Be it large machinery such as engines, cranes or drills, or hand held power tools such as saws or blowtorches, every maritime company has an obligation to ensure equipment stays in good working condition and that all workers are trained on its proper use. When machinery malfunctions, injuries ranging from cuts or burns to amputations may result.
    • Improper supervision of loading and unloading. Longshoremen do much of the roll on/roll off operations, but seamen may assist in the process. High vehicular traffic and the coordination of the movement of large loads and containers create a number of dangers including being struck by a vehicle or load. These operations must be well supervised and coordinated in order to protect workers who are focused on a specific task.
    • Electrocution. Exposed wiring, improper insulation and wet surfaces can lead to electrocution ranging from mild to severe.
    • Radiation. Sealed and unsealed radioactive substances have a myriad of uses such as in cementing operations and density gauges. Exposure to an excessive amount of radiation can lead to radiation sickness, a serious condition requiring medical attention.
    • Scaffolding collapse. When incorrectly constructed, scaffolding may collapse, causing injury to those upon and around the scaffold. Either a fall from great height or being struck by falling objects can lead to injury or death.
    • Release of hydrocarbons. Hydrocarbon release can happen in liquid or gas form, both of which create explosion and fire hazards due to their flammable nature. Hydrocarbon inhalation can also cause pulmonary and neurological injury.
    • Vessel collision. The seas are a busy place and vessels will on occasion collide. This presents a danger to seamen whether through the force of the impact or resultant complications such as fires or chemical spills.
    • Getting caught in equipment. Winches are a good example of this potential hazard, as the winch drum can potentially snag body parts that get too close. Tasks that involve dangerous interaction with equipment or a lack of safety training, protocol and tools can lead to serious injury such as broken bones, soft tissue injuries or amputation.
    • Improperly inspected enclosed spaces. Oxygen deficiency or flammable or toxic atmosphere can all occur in enclosed spaces aboard vessels. Before working in these areas, they must be inspected to ensure that the workers are not in danger.
    • Falling overboard. A fall overboard can cause serious injury or death. The impact of the water is sometimes enough to render a person unconscious, leading to drowning. Non-fatal complications could arise from the fall including concussion, broken bones, spinal injury and hypothermia, not to mention the accompanying mental anguish.

This partial list should make it obvious why Congress gave these folks the right to sue their employer in negligence, if they could demonstrate their "seaman" status.  It is dangerous work.

But Admiralty and Maritime lawyers know all that, it's old hat. It's the fact that this decision boiled up out of the depths of Baltimore's Circuit Court that makes it interesting to me. You see, maritime cases are mostly filed in the United States District Courts. Jurisdiction over most anything dealing with international trade and commerce has drifted to the federal courts....except for the really cool "savings to suitor's" clause in the United States Constitution that guarantees certain claims for injury can still be brought in state court, at the sole election of the injured employee. It's rather empowering for the little guy. And where every other state court case that has related federal claims can be "removed" to federal court, the Jones Act case cannot. Chalk one up for the injured guy's forum selection.

And to make Mr. Dize's case even cooler, the Maryland Court of Special Appeals took some time to analyze U.S.Supreme Court law about what constitutes a "seaman." In a court that is normally swamped with criminal appeals of right from the entire state's trial court system, the law clerks must have been fighting over this one.

So what's the case hold?  Does it matter? Well, if you're injured while working on, or in support of a vessel, it sure does.  Maryland clearly adopted the Supreme Court's 30% rule, as described in Chandris v. Latsis.  That means roughly 1/3 of your time must be spent working on the boat if you want to earn Jones Act seaman status. The Supremes marked this off as a "rule of thumb," but anyone claiming status who spends less than 30% of his work time on the boat has to show a darn good reason to depart from this percentage.  One example that might work (it didn't for Mr. Dize) is the desk employee newly transfered to a vessel who is injured almost immediately in his new duties. He would not be able to demonstrate his Jones Act status using the 30% rule, but the nature of his recent assignment might save him from strict application of the rule.

And now I really want that Grady White I've been day dreaming about!  See you on the Bay!

Monday, June 4, 2012

Of Canada, Facebook, and Bears escalating war on society.

A few words about Canada, Faceook, and Bears.

Last year, I wrote a bit about Facebook evidence, and new Maryland Court of Appeals standards for using social media evidence.  Here's something of interest from a personal injury lawyer, in Canada, about use of Facebook evidence in Canada.

And the bears in Canada don't give a hoot about Facebook, or lawyers, and will attack anyone, even a guy chilling in his hot tub.
UPDATED: August 27, 2012--And it just gets worse!  This poor slob was hiking in the Denali State Park, in Alaska, when he was mauled to death by a grizzly.  The horror! it is reported that he snapped photos of the bear just eight minutes before the attack. And how about this 2000 item, describing how "this was not an attack, the bear ate him."
UPDATED: October 5, 2012-- Tech Saavy black bear snatches iPad from picnic site. And feeding bears will lead to their execution by the authorities in New York , Montana, and in Connecticut. In Florida, the bears are commiting suicide by cop! And don't forget to the annual "Virginia Harvest!"
UPDATED: October 8, 2012-- Black Bears stake their claim to the lobby of a New Mexico ski resort, seeking something tender to chew!
UPDATED: October 13, 2012-- Bears are now interfering with our children's education by blocking test booklet access!
UPDATE: October 16, 2012- Alaskan man half-eaten by bear.  Chilling. And in Canada (it gets back to our neighbors) a murderer's corpse was dragged out of a car and eaten by a bear (shades of Dexter?) Vigilante bears?

Friday, June 1, 2012

If you want to arbitrate, rely on your own contract!

Labor leader Samuel Gompers had a view of arbitration that I share:
Do I believe in arbitration? I do. but not in arbitration between the lion and the lamb, in which the lamb is in the morning found inside the lion.

The Maryland Court of Special Appeals echoed that sentiment in the recent decision Griggs v. Evans, reported May 2, 2012. The Specials reversed a trial court decision to compel arbitration between a credit life insurance company and the widow of it's insured, Helen Griggs.  Mr. Griggs expired from lung cancer, and...surprise...the credit life insurance company denied Widow Griggs' claim for the $150,000 benefit.
Which does remind me that I thoroughly enjoyed Matt Damon in Grisham's The Rainmaker, where Matt plays first year lawyer Rudy Baylor, suing a health insurance company for failing to pay for necessary treatement, which leads to the death of Rudy's client. The cross-examination of Great Benefit's CEO, Wilfred Keeley, played by Roy Scheider, and his interpretation of a policy manual that says "deny all claims" when first submitted, is classic. But I digress- Great Benefit is a fictional insurance company, and Matt Damon is not really a lawyer, and Matt's fictional client is not really dead.

But Mr. Griggs is dead.  And Household Life Insurance Company refused to pay. It's not a stretch that Widow Griggs and the Estate of her husband sued for the policy benefit.

They also sued individuals employed by the company. And it was the individuals who moved the trial court for an order compelling arbitration. Now, the key fact is that the arbitration clause was nowhere to be found in the insurance contract between Widow Griggs, her husband and Household.  The arbitration clause resides only in the financing agreement, with Beneficial Mortgage--a separate company.

Imagine that, the employees of Company A sought to impose on Widow Griggs the arbitration clause found in the loan documents between Widow Griggs and Company B.  And the trial court bought it. As I read these facts, I could just envision the court's panel of jurists during oral argument, leaning back, arms folded, and eyes closed, knowing their opinion was already typed and awaiting signature on their desks. A no-brainer.

I do a fair amount of arbitration for individuals and companies. I advise clients regularly that disputes arising out of contracts, and reasonably related to the subject matter of those contracts often gets caught up in the broadly construed web of a standard arbitration clause.

But such was definitely not the case for Widow Griggs.  The appellate court found that the credit life insurer was bound by it's singular contract.  It could not reach out and "borrow" Beneficial Mortgage's arbitration clause. The case has been sent back to the trial court.

Enter Matt Damon, as insurance company hunter Rudy Baylor?