The Case Of The Malicious Mortgage Mediation

When Mike and Dana bought their first home, they viewed it as a new beginning. Like most couples, they financed the purchase with a mortgage. Everything was going well until Mark lost his job. After that, the two could not afford to make payments. Within six months, the bank filed a foreclosure suit.

Luckily, Mike and Dana still had a shot to keep their home. New Jersey has a “mediation” program for residents facing foreclosure. The mediation program requires the bank to negotiate in good faith to try and work something out. The process is run by a court-appointed mediator.

Unfortunately, negotiations broke down when the bank flatly refused modify Mike and Dana’s mortgage in any way. According to the bank’s internal policy, the fact that the couple’s income had unexpectedly dropped was not enough to justify a loan modification.   This despite the fact that Mike and Dana had little other debt. The bank refused to negotiate further based on a factor outside of the couple’s control: the value of the property had gone down.

Mike and Dana filed a court motion to dismiss the foreclosure. They argued that the bank failed to negotiate in good faith. The bank responded that, because it had followed its own internal guidelines, it was automatically acting in good faith.

The judge rejected the bank’s self-serving rationale. He refused to decide the matter based on rules that the bank itself set. The judge ruled that  a bank has to prove that its guidelines are reasonable.

Therefore, the bank was left with two options. It could go back to the negotiating table with Mike and Dana, or it could try and prove the reasonableness of its guidelines in court.

I agree with the judge.  Considering that the mortgage banking industry played such a large role in plunging this country into the “Great Recession,” we cannot trust a bank to act reasonably, just because it says it will.  Like pets and children, banks need a little supervision.

The Case of the Deceptive Car Dealership, Or Why That Used Car Might Be More Used Than You Think

George was in the market for a new car, and wanted to treat himself. He bought a Mercedes Benz. But ever frugal, George thought he’d save a couple bucks and buy used. He visited his local Mercedes dealer. Soon enough, he was the proud owner of a 2008 Mercedes Benz ML 350.

The honeymoon was quickly over. George noticed faint remnants of lettering on the back windshield. It looked like stickers had once been there, but were removed. George looked closer, and was mortified by what the words said.

“Courtesy Car.”

The Mercedes dealer had not sold him a regular used car. George had bought a “loaner.” The car was probably driven by many others before him. Outraged by this deception, George demanded a refund. The dealer offered to buy the car back, but for $10,000 less than George paid. George turned down the meager offer. His next stop was an attorney’s office.

George’s lawsuit claimed that the dealer’s failure to tell him that the car was a loaner was a violation of the New Jersey Consumer Fraud Act. At trial, a different car dealer testified that it was common practice to tell a buyer that a car was a loaner. It was also customary to discount the price.

The jury awarded George $75,000. The car dealer even had to pay George’s attorney fees. 

Now the car dealer may need to take out a “car loan.”

The Case Of The Adult Business That Couldn’t Move, Or How You Can Stop Those Pryin’ Eyes

An innocently named company we’ll simply call LLC runs a not so innocent business. It sells pornographic movies, lingerie, and other sexually themed products. While this line of work is not illegal in New Jersey, certain requirements govern such businesses.

For instance, under New Jersey law, it is illegal to run a sex shop within 1,000 feet of a school, religious institution, or residence. In addition, the building must be surrounded by a 50 foot “buffer” zone. This is to make it more difficult to see inside the building. Presumably, this protects the privacy of the customers, and the innocence of any unsuspecting passers-by.  LLC’s problem was that its building did not satisfy the “buffer” requirement.

Rather than move to a new building, LLC tried to challenge the law itself. It claimed the law was an unconstitutional restriction of freedom of speech. LLC also argued that it should be excused from the law, because the layout of the building it leased made creating such a buffer zone impossible.

In court, the town presented evidence of several other sites that LLC could move to. These would easily satisfy the buffer requirement. But LLC claimed that they could not afford to move.

Alas, a Morris County judge rejected LLC’s argument. A law does not become unconstitutional simply because a particular party can’t afford to comply with reasonable restrictions. Unless LLC can afford to appeal further, it looks like it will have to find another line of work.

Free speech has its limits. And when you choose to run a sex shop, you’re likely to encounter some of those limits. I’d say LLC’s owners made their bed, and now they must sleep in it.

But maybe that’s a poor choice of words.

The Case Of The Multiple Mothers

Alice’s parents were divorced when she was only three years old. Alice was raised mostly by her grandmother. She lived with grandma until she was six years old. Eventually, her mother began living with a new husband. Mom decided to bring her daughter with her.

But Alice’s grandmother was not happy about Alice’s new living arrangement. She thought that the new home was dangerous. Previously, the mother had been investigated by the Division of Youth and Family Services (DYFS) for abuse. But the agency never found any actual evidence. Nonetheless, the grandmother believed Alice was being physically and emotionally abused in the new household. She tried to get Alice back. Eventually, the grandmother decided to sue.

At first, the judge gave custody to the grandmother. But this arrangement was only temporary. The mother passed a full psychological exam. A court-appointed doctor concluded she was a fit mother. The judge decided that it was time to reunite mother and daughter.

On appeal, the grandmother tried a different argument. She said she deserved custody of Alice because she was the child’s “psychological parent.” A psychological parent is one who is not related by blood or adoption, but plays the role of an actual parent.

However, the court rejected the grandmother’s argument. The court ruled that becoming a psychological parent first requires the approval of the actual parent. Furthermore, a mother has a constitutional right to raise her child. This right is not surrendered simply because another family member helps out.

You’ve got to wonder what poor little Alice thought of all this. With so many people claiming to be her “parent,” she was probably pretty confused. Ask any teenager. Two parents are MORE than enough. 

The Case of the Rookie Traffic Director, Or Your Toll Dollars At Work

When Erin became a Port Authority police officer, she was rightfully excited. Erin wouldn’t have the most glamorous job in the world, but she would have a darn important one. Her job was to direct traffic at the Lincoln Tunnel. But before becoming a permanent officer, she had to satisfactorily complete one year of service. After that “probationary period,” they could only fire her for good cause, and after a hearing.

One day, Erin was busy dealing with a typical situation. A truck that was too tall to fit tried to get into the Tunnel. It had no choice but to stop just short of the entrance. Erin’s job was to direct traffic so that the truck could back up and turn around.  As Erin dutifully set to her task, a Port Authority civilian employee we’ll call Glenn began butting in. Glenn began directing traffic himself. Erin knew that having two people directing the same  traffic is too many cooks in the kitchen. Also, civilians are not authorized to direct traffic. Erin asked Glenn to stop. Glenn refused. Worse, he caused the truck to crash into another vehicle.

Erin reported Glenn to the Port Authority. Two other police officers did the same. But the Port Authority did nothing to discipline the amateur traffic director. Instead, they fired Erin, one day before her probationary period was over.

Erin sued the Port Authority. She claimed that Glenn had political connections within the Port Authority. However, the trial court quickly threw out Erin’s suit.  Why? Because the law requires you to give the Port Authority 60 days’ prior notice that you intend to sue it. Erin didn’t give Port Authority the 60 days’ prior notice.

When Erin appealed, the higher court ruled that the 60 day rule had to be observed.  Whether or not Erin’s case had merit didn’t matter.

 

The moral of the story is that people who have legal claims should be careful to hire an experienced lawyer who knows the rules.  And let’s hope that Erin’s replacement will be better at directing traffic than Glenn was.  But somehow I doubt that.

The Case of the Telecommuter Tax, Or How Greedy Can The Government Get?

Modern technology certainly has its advantages. Worldwide communication is easy. Therefore, more people find it convenient and practical to work from home.

Now, New Jersey reserves the right to collect taxes from any company that is “doing business” within the state. This rule normally applies to out of state businesses that have offices, stores, or warehouses in New Jersey.

Recently, a New Jersey court ruled that the state’s power to tax out-of-state businesses goes even further. A software company based in Maryland allowed one of its employees to work from home in New Jersey. She would “telecommute” to work every day, rather than drive all the way down to Maryland.

The company argued that it was not subject to New Jersey taxes, just because one of its employees worked out of her New Jersey home. Unfortunately, the court disagreed.

The court decided that, because the employee was regularly programming software from her in-state home, her employer was doing business in New Jersey. As a result, the company had to pay New Jersey taxes.

In my opinion, this ruling goes too far. Businesses should not be punished for allowing their employees to work from home. Rather, they should be applauded.  Telecommuting saves time, encourages productivity, and conserves energy. It appears that any excuse to collect taxes is a good excuse for the government.

I would like to take this opportunity to wish all of my readers, clients and friends the most joyous of holiday seasons, and a happy new year.

The Case Of The Outrageous Accusation, Or The Malicious Mom Who Went Too Far

Sally and Charles had an intense but short lived romance. Afterward, the former lovers wanted nothing to do with each other. But they still had one thing in common: their daughter, a young girl we’ll call Amy. Sally strongly resisted letting Charles have any contact with Amy. As a result, the couple was in and out of court trying to resolve custody issues. Eventually, the family court decided that Amy would live with Sally. Charles, though, would have the right to spend time with Amy regularly.

This compromise was threatened when Sally complained to the authorities. Sally claimed that Charles sexually abused Amy. However, once investigators spoke to Amy alone, it became clear that something else was amiss. Amy’s initial medical examinations indicated no signs of abuse. Although Amy said her mother’s story was true, their stories did not match up. Charles also produced witnesses and video footage of himself and Amy attending a party at the time of the supposed abuse. All signs pointed to Sally making the whole thing up. Nevertheless, Sally pressed the issue in court, and requested even more invasive medical examinations of Amy.

In the end, the judge decided that Sally was making the whole thing up. In fact, the judge ruled that Sally’s false accusations were themselves a form of child abuse. Sally’s lies caused Amy to undergo invasive medical examinations, which violated Amy’s privacy. Additionally, Sally asked the child to lie about something very serious. In sum, Sally likely caused Amy severe psychological harm. The judge took custody away from Sally, at least for the time being.

People are often say that when something bad happens, you should never attack the victim. But sometimes, it’s the accuser who really bears the blame.