Home prices are rising at the fastest rate in seven years, as buyers are returning to a market where the number of properties for sale is in short supply, the Wall Street Journal reported yesterday. Prices increased 9.3 percent in February from a year earlier while mortgage-interest rates hovered at near record lows in 20 major metropolitan areas.

Interest Rates Fall

Mortgage rates continued to creep down near record lows this week, according to reports from Freddie Mac and Bankrate.com. Rates fell all around in Freddie Mac's Primary Mortgage Market Survey for the week ending May 2. According to the weekly survey, the 30-year fixed-rate mortgage (FRM) averaged 3.35 percent (0.7 point) this week, down from 3.40 percent last week. The all-time low average is 3.31 percent, set the week of November 21, 2012. For the second week in a row, the 15-year FRM reached a new low, falling to 2.56 percent (0.7 point).

Bank Pay Day Loans

The banking version of payday lending, called deposit advance, is no better than its storefront cousin. For starters, the advance loan can carry an interest rate of over 300 percent. There is no fixed due date for repayment. Instead, the bank repays itself from an electronic deposit into the borrower’s account. A new study from by the Consumer Financial Protection Bureau says these transactions are anything but harmless, one-time deals. Three-fourths of the loan fees are generated by consumers who borrow more than 10 times in a 12-month period. Overdraft fees deplete the borrowers’ meager resources, causing them to borrow again and again — and pushing them deeper into the debt trap.

Domestic Partner Registration

http://dunedin.patch.com/announcements/countywide-domestic-partnership-registration-begins-april-15in-four-pinellas-county-clerk-of-the-circuit-court-offices


Beginning April 15, any two people over the age of 18 will be able to register as domestic partners in Pinellas County, subject to certain limitations.

Domestic partnership registrations will be accepted at the following Clerk of the Circuit Court offices during regular office hours:

• Clearwater County Courthouse - 315 Court St., Room 150, Clearwater
• North County Branch Office - 29582 U.S. Highway 19 N., Room 101, Clearwater
• St Petersburg Branch Office - 545 First Ave. N., Room 153, St. Petersburg
• Clerk's Tyrone Branch Office - 1800 66th St. N., St. Petersburg

The filing fee for registering as domestic partners is $50, although a reduced fee may apply for those applicants who have already registered their partnerships in a Pinellas County municipality.
More information about the domestic partnership registry may be found online at www.pinellascounty.org/Humanrights/pdf/domestic.pdf and forms relating to the domestic partnership registry may be found online at www.mypinellasclerk.org.

For more information on Pinellas County services and programs, visit www.pinellascounty.org, now with LiveChat, or create a shortcut to www.pinellascounty.org/mobile on any smartphone. Pinellas County government is on Facebook, Twitter and YouTube. Pinellas County complies with the Americans with Disabilities Act.

Court Rejects Ponzi Scheme Victim Payment Plan

The bankruptcy case is In re Rothstein Rosenfeldt Adler, 09-bk-34791, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale). The criminal case is U.S. v. Rothstein, 12- cr-60204, U.S. District Court, Southern District of Florida (Fort Lauderdale).

http://www.businessweek.com/news/2013-04-12/rothstein-judge-hears-arguments-on-plan-to-pay-victims#p1

New Means Test Income Data

1 person $41,915
2 people $51,760
3 people $54,934
4 people $65,260
for cases after April 1, 2013 add $ 8,100 for each additional person after 4

http://www.justice.gov/ust/eo/bapcpa/20121101/bci_data/median_income_table.htm

Bankruptcy Form Changes April 1, 2013

Dollar amounts in title 11 and title 28 of the U.S. Code will be increased for cases commencing after April 1, 2013. Seven Official Bankruptcy Forms (1, 6C, 6E, 7, 10, 22A and 22C) and two Director's Forms (200 and 283).

Tiara Condominium Assoc v Marsh & McLennan Companies

The Florida Supreme Court recently held om March 7, 2013 (SC10-1022) that the application of the Florida economic loss rule is limited to products liability cases.

A condominium association ("Association") retained an insurance broker ("Broker") to secure condominium insurance coverage.  Association's building suffered significant damage cause by Hurricane Frances and Hurricane Jeanne.  Association proceeded with repairs based on assurances by Broker regarding the policy limits of Association's coverage, but later was denied coverage for almost half the amount of Association's costs for repairs when it submitted its claim.  Association filed a lawsuit against the Broker, alleging causes of action including negligence and breach of fiduciary duty.

 

The trial court granted summary judgment in Broker's favor as to all counts, and the Eleventh Circuit Court of Appeals affirmed the trial court on all but the negligence and breach of fiduciary duty claims. The Eleventh Circuit certified to the Florida Supreme Court the question of whether the economic loss rule bars an insured's suit against an insurance broker where the parties are in contractual privity and the damages sought are solely for economic losses.

 

The economic loss rule prevents a party from bringing tort actions against entities with whom they are in contractual privity for purely economic loss unaccompanied by any personal injury or damage to property.  As stated by the Florida Supreme Court, the underlying rationale for the economic loss rule is that "[w]hen parties are in privity, contract principles are generally more appropriate for determining remedies for consequential damages that the parties have, or could have, addressed through their contractual agreement."  In other words, "[w]here damages sought in tort are the same as those for breach of contract a plaintiff may not circumvent the contractual relationship by bringing an action in tort."  Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 494 (Fla. 3rd Dist. 1994).

 

Having noted the multiple exceptions to the economic loss rule created since its inception, including exceptions for professional malpractice, fraudulent inducement, negligent misrepresentation, and free-standing statutory causes of action, the Court ultimately decided that these exceptions "simply did not go far enough," stating that "we now take this final step and hold that the economic loss rule applies only in the products liability context."

 

Liability for Employee Cellular Phone Use

Cell Phone Usage and Personal Injury Lawsuits

Cell phone usage has increasingly become the cause of accidents or a contributing factor, resulting in an increase in personal injury litigation involving cell phones. When a driver is using a cell phone at the time of an accident and the accident happens while the driver is on company business, the phone call is a business one, or the cell phone was provided by the company, that company will often be sued along with the driver/employee, under a theory of "vicarious liability" for the actions of its employee. Actual examples include:

• A jury in Miami awarded a 78 year old woman and her husband $20.78 million against a driver and his employer for injuries suffered in an automobile crash. The driver initially admitted owning a cell phone but denied using it at the time of the accident. Cell phone bills indicated otherwise and the driver finally admitted making a sales call "before" calling 911 about the accident.
• The state of Hawaii paid $1.5 million to the family of a New Jersey tourist struck by a car driven by a public school teacher, who was using her cell phone at the time.
• Salomon Smith Barney paid $500,000 in settlement to the family of a motorcyclist killed in a collision with a broker, who was on his cell phone at the time.

Consumer Debt Rises for Young Adults

According to the Wall Street journal A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing. In addition, fewer young adults carried credit card balances, and 22 percent did not have any debt at all in 2010—the most since government tracking began in 1983.

Bankruptcy Filings on the Rise

While bankruptcies were down from a year ago, February’s bankruptcy filings trended upward from January. Total bankruptcy filings for the month of February represented a 5 percent increase over the 78,565 total filings registered in January 2013. The total noncommercial filings for February also represented a 5 percent increase from the January 2013 noncommercial filing total of 74,831.

FDCPA

Reversing the lower court’s judgment order, the U.S. Court of Appeals for the Third Circuit recently ruled in a putative class action suit under the federal Fair Debt Collection Practices Act that language in a debt collection letter contradicted and overshadowed the FDCPA validation notice, pointing among other things to the statements in the letter to “please call us” “if you feel you do not owe” the debt, the font, typeface and other characteristics.

Defendant debt collector (“Debt Collector”) sent plaintiff debtor (“Debtor”) a letter in an attempt to collect a debt which Debtor supposedly owed for medical services. The letter stated in part: “if you feel you do not owe [the debt], please call us toll free at . . . or write us at the above address. . . SEE REVERSE SIDE FOR IMPORTANT INFORMATION.” The phrase “please call” was in bold face, and the front side of the letter supposedly contained a confusing admixture of font sizes, typeface, contact phone numbers, and mailing and website addresses.

On the reverse side of the letter was the language stating in part: “unless you notify this office within 30 days after receiving this notice that you dispute the validity of this or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt . . . , this office will . . . [verify the debt]. . . . If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor . . . .”

Debtor filed a putative class action complaint under section 1692(e)(10) and section 1692g of the federal Fair Debt Collection Practices Act (“FDCPA”), alleging that Debt Collector’s letter was a false or deceptive means of collecting on the debts in question because the least sophisticated debtor could reasonably, but incorrectly, believe that he could effectively dispute the debt by calling the phone number listed in the letter.

Debt collector moved for judgment on the pleadings, which the lower court granted. Debtor appealed. The Third Circuit vacated the lower court’s order granting the judgment on the pleadings.

As you may recall, the federal Fair Debt Collection Practices Act requires that a debt collector provide to a consumer: (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that the debt will be assumed valid unless the consumer disputes the debt in writing within 30 days after receipt of the notice; (4) a statement that if the consumer does so notify the debt collector in writing that the debt is disputed, the debt collector will verify the debt and send such verification to the consumer; and (5) a statement that, upon the consumer’s written request within the 30-day period, the debt collector will provide the name and address of the original creditor. 15 U.S.C. § 1692g(a).

In addition, section 1692g(b) of the FDCPA provides in part that if the consumer disputes the debt in writing, the debt collector must cease collection of the debt “until the debt collector obtains verification of the debt . . . or the name and address of the original creditor, and a copy of such verification . . . or name and address of the original creditor, is mailed to the consumer by the debt collector. . . .” That section further provides that “[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.” 15 U.S.C. § 1692g(b).

Moreover, Section 1692e specifically prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 15 U.S.C. § 1692e.

Addressing Debtor’s claim that the validation notice was inadequate to apprise “the least sophisticated consumer” of his rights under the FDCPA, the Third Circuit observed that “more is required than the mere inclusion of the statutory debt validation notice in the debt collection letter – the required notice must also be conveyed effectively to the debtor.” See, e.g., Wilson v. Quadramed Corp., 225 F.3d 350 (3rd Cir. 2000); Graziano v. Harrison, 950 F.2d 107 (3rd Cor. 1991)(statutory notice must effectively explain a debtor’s rights).

In so doing, the Third Circuit examined the Debt Collector’s collection letter in terms of both its form and substance to determine whether the validation notice was “‘overshadowed’ or ‘contradicted’ by accompanying messages from the debt collector” that would lead the least sophisticated consumer to derive different meanings from the letter. See Graziano, 950 F.2d at 111, 354.

In reaching its conclusion that Debt Collector’s letter was substantively deceptive, the Third Circuit took issue with the lower court’s assessment that the “please call” language, when read in the context of the whole letter, would not be confusing to the least sophisticated debtor.  

Third Circuit reversed the lower court’s order granting judgment in Debt Collector’s favor and remanded for further proceedings.

Russell v. Aurora Bank FSB (In re Russell)

9th Circuit, 11 U.S.C. § 362, Federal Rule 9024, Bankruptcy Process and Procedure

Citation:

BAP No. CC-12-1312-DKiPa
 The BAP ruled that it could not consider the new argument raised for the first time on appeal since the Debtors never raised it in response to the creditor's declaration of default under the APO in the lower court, and in fact never responded to the creditor's declaration of default. The BAP noted, however, that the Debtors still had time to file for relief in the lower court under the Federal Rules of Civil Procedure, Rule 60(b)(1) or (6).

Southern District Forms

Please be advised that LF 8 "Order Converting Case Under Chapter 7 to Case Under Chapter 13" has been abrogated and split into two new Local Form orders, one for use when the motion is considered on negative notice and the other for use when the court conducts a hearing. A public notice has been posted on the court's web page: http://www.flsb.uscourts.gov/web_folder/NEWS/13-03-01_Notice_of_Amendment_to_Local_Form.pdf

The Florida Bar News reported on March 1st that HB 87 has passed the House Civil Justice Subcommittee on February 7. This bill has four important segments.

1.) It Shortens the statue of limitations for seeking a deficiency judgement from five year to one year from the date of the foreclosure sale.

2.) The defendants must show a valid reason for contesting the foreclosure or a Judge can expedite the foreclosure.

3.) Lenders must have their documents in order and complete when they file a foreclosure.

4.) Once a home is sold in foreclosure to a third party, future claims will be limited to monetary damages, should the foreclosure be found to be faulty.

The outcome of HB 87 is worth watching closely. Foreclosures are of prime importance not only to Circuit Civil & Real Estate Attorneys, but also Family Attorneys. Many divorces & family issues are delayed pending the outcome of the disposition of the marital home.