Posted: May 20, 2013
Anastasius (Tassos) Efstratiades authored WHAT STATE LAW APPLIES TO A RESTRICTIVE COVENANT published in the Financial Executives International (FEI) publication Connections – (Philadelphia Chapter , May 2013).
Author: Tiffani L. McDonough Posted: May 15, 2013
Workplace bullying is a pervasive problem that often precipitates harassment and discrimination claims and, in more extreme cases, workplace violence. Although there is currently no state that prohibits workplace bullying, it can expose employers to significant legal risk and damage both productivity and employee morale. According to a 2012 survey by the Society for Human Resource Management (SHRM), 51 percent of organizations reported that there had been incidents of bullying in their workplace. Read more...
Posted: May 7, 2013
PHILADELPHIA, PENNSYLVANIA--May 7, 2013--Obermayer’s Family Law Group Co-Chairman, David L. Ladov is quoted in The Legal Intelligencer article “Concern Over Judicial Authority Drove Parent Coordinator Elimination.”
Author: Michael E. Bertin Posted: April 9, 2013
Under Pennsylvania law, “legal custody” is defined as: “The right to make major decisions on behalf of the child, including, but not limited to, medical, religious and educational decisions.” “Sole legal custody” is defined as: “The right of one individual to exclusive legal custody of the child.” “Shared legal custody” is defined as: “The right of more than one individual to legal custody of the child.” In 1993, the state Superior Court decided the case of Hill v. Hill, 619 A.2d 1086 (Pa. Super. 1993). In Hill, the Superior Court found an abuse of discretion by the trial court when it awarded shared legal custody and provided: “In the event of disagreement, the mother’s preference shall prevail.” In that case, the father argued that the trial court essentially granted the mother sole legal custody. The Superior Court held that the father was given shared legal custody “in name only and deprived him of a legal remedy because he was already awarded ‘shared legal custody.’” The Superior Court further in Hill stated: “The concept of shared legal custody did not contain the principle of giving one parent final authority in the event of a dispute.”
Author: Michael E. Bertin Posted: February 22, 2013
A parenting coordinator is an individual who is appointed by the court in custody cases to assist in executing and enforcing ancillary issues of a custody order. Parenting coordination has become a hot issue in the area of Pennsylvania child custody. It is also a controversial issue. The controversy is multifaceted. One of the issues is whether a parenting coordinator making decisions is tantamount to an improper delegation of judicial decision-making authority. Another issue is whether a parenting coordinator must be an attorney or whether the parenting coordinator may also be a mental health professional.
Posted: February 21, 2013
Obermayer’s Health Care Department Chair, Lawrence Tabas authored the article, “Health Insurance Exchanges and the New Federal Health Care Law” published in the monthly issue of the Pennsylvania Republican.
Author: Tiffany L. McDonough Posted: February 13, 2013
Valentine's Day is upon us and companies are experiencing workplace romance at its finest, which is why it is a good time to consider updating or implementing office romance policies. According to a survey conducted by CareerBuilder, four out of 10 workers admit to having dated a colleague during their careers, and 31 percent of those relationships resulted in marriage. The survey indicated that 34 percent of employees have dated a more senior person within the company hierarchy (among which 42 percent have dated their direct supervisor). The survey further showed that 72 percent of employees "go public" with their office romance. While many office romances lead to marriage, others may unceremoniously lead to claims for sexual harassment. Because it is not an uncommon scenario, companies should take proactive measures to avoid love turning into litigation.
Author: Katherine Missimer Posted: January 31, 2013
Click this link to read the article. Lessons Learned From Networking Outside the Bar (PDF)
Author: Mathieu J. Shapiro Posted: January 29, 2013
Beginning with U.S. District Court Judge of the Southern District of New York Shira Scheindlin's landmark series of decisions in Zubulake, the specter of e-discovery sanctions seemed to hang like a cloud over civil litigation and civil litigators, threatening the unwary with an avalanche of draconian penalties for not understanding the technical and ever-expanding world of ESI.
Author: Matthew A. Green Posted: January 22, 2013
Matthew Green authored the article “How to Deal With Increasing Demands at Work and Home" in the Young Lawyers supplement of The Legal Intelligencer (January 22, 2013).
Author: Michael E. Bertin Posted: December 11, 2012
Recently, the case of P.H.D. v. R.R.D., __ A.3d __, 2012 PA Super 246 (Nov. 13, 2012), was decided by the Pennsylvania Superior Court. The P.H.D. case raises an issue that is discussed often among family law practitioners and has been reported in a number of appellate cases since the 1990s. The issue is whether a custody order may be modified at a contempt proceeding if a petition to modify is not pending before the court. A number of cases have been decided by the Superior Court that indicate a custody order may not be modified by a trial court at a contempt proceeding if a petition to modify has not been filed and served and properly before the court at the time of the contempt hearing. The reason for the prohibition of such action is that it would deprive the parties of their due process rights.
Author: Jason E. Reisman Posted: September 28, 2012
Wal-Mart Dodges Another Bullet, Allowing Third Circuit to Clarify Final Certification Standard in FLSA Collective Action, that is posted on the Wage & Hour Defense Institute blog.
Author: Tiffany L. McDonough Posted: August 29, 2012
Amid all of the discussion regarding health reform and the uncertainty of its fate pending the outcome of the upcoming presidential election, companies are revisiting the benefits of wellness programs. Until recently, many companies had taken a stolid view of wellness programs, in some instances dismissing such programs as a waste of resources. On the heels of the U.S. Supreme Court upholding the health reform as constitutional, however, wellness programs are worth a second look and could very well be a crucial way to maintain a healthy workforce and combat the rising costs of health coverage.
Author: Michael E. Bertin Posted: August 14, 2012
In Pennsylvania, when spouses separate, there are two forms of monthly payments one spouse may seek from the other. The two forms are spousal support and alimony pendente lite. Spousal support and alimony pendente lite are calculated in the same fashion. However, a spouse cannot receive both. Further, alimony pendente lite is only available if a divorce action is pending. A major difference between spousal support and alimony pendente lite is that the payor spouse may claim an entitlement defense when a party seeks spousal support. Entitlement defenses are not available to defend against an alimony pendente lite claim. Because of this, when a divorce action is pending, it is common that the party earning less income will seek alimony pendente lite.
Author: Jason E. Reisman Posted: July 1, 2012
Click on the title below to read the article.
Author: Michael E. Bertin Posted: June 14, 2012
In April, SB 1167 was passed, which amends the new Custody Act that was passed last year. As practitioners will recall, sweeping changes were made to Pennsylvania's child custody laws when the new Custody Act became effective on Jan. 24, 2011. Like any new law, debate was sparked over numerous provisions contained in the new Custody Act.
Author: Joseph C. Centeno, Tiffany L. McDonough Posted: June 6, 2012
Joseph J. Centeno and Tiffani L. McDonough co-authored the article “Employee Medical Leave: The Reasonableness Conundrum" published in The Legal Intelligencer's Labor and Employment special supplement(June 12, 2012). The article discusses managing employee medical law under the FMLA and ADA which has become a vexing issue for most employers.
Author: Tiffany L. McDonough Posted: June 6, 2012
Author: Obermayer Alert Posted: May 19, 2012
As we previously reported in an earlier Obermayer Alert (http://www.obermayer.com/whatsnew.php?action=view&id=409), the National Labor Relation Board’s (“NLRB” or “Board”) “quickie election” rules became effective on April 30, 2012. Two weeks later, on May 14, 2012, the U.S. District Court for the District of Columbia declared the rules invalid. The Court held that the rules are invalid because, when passed, they were voted on by only two (2) of the three (3) then-serving Board members -- so there was no required quorum. As you may recall, the “quickie election” rules effectively expedite the union election process, which limits an employer’s opportunity to communicate with employees about the negative implications of union representation.
Author: Jason E. Reisman Posted: April 12, 2012
Author: Michael E. Bertin Posted: April 10, 2012
The recent Pennsylvania Superior Court case of Moser v. Renninger , 2012 Pa. Super. 59, 1037 MDA 2011 (March 6, 2012), provides a reminder to family law practitioners that a declaratory judgment that does not end litigation is interlocutory and unappealable. The Moser case also provides a refresher regarding common law marriage.
Posted: April 10, 2012
The recent Pennsylvania Superior Court case of Moser v. Renninger , 2012 Pa. Super. 59, 1037 MDA 2011 (March 6, 2012), provides a reminder to family law practitioners that a declaratory judgment that does not end litigation is interlocutory and unappealable. The Moser case also provides a refresher regarding common law marriage.
Author: Michael E. Bertin Posted: April 10, 2012
The recent Pennsylvania Superior Court case of Moser v. Renninger , 2012 Pa. Super. 59, 1037 MDA 2011 (March 6, 2012), provides a reminder to family law practitioners that a declaratory judgment that does not end litigation is interlocutory and unappealable. The Moser case also provides a refresher regarding common law marriage.
Author: Tara Dickerman Posted: March 22, 2012
It is less than two weeks before the start of trial and you're making sure your trial team is well prepared. Your trial notebook is perfectly organized, your witnesses are all lined up to testify, your motions in limine have been filed and you have reviewed prior testimony of opposing counsel's experts. There should be no more surprises. However, when you walk into your office that morning, you receive an unexpected e-mail from opposing counsel — a new expert report. You think to yourself, "We are six months past the case management expert deadlines. No way is the court going to allow this expert to testify."
Author: Anastasius Efstratiades Posted: February 22, 2012
Anastasius (Tassos) Efstratiades authored the Open Forum column, "What Lenders Should Know About Commitment Letters" published in the National Mortgage News (February 20, 2012). Mr. Efstratiades is a partner in the Philadelphia and Cherry Hill offices of Obermayer Rebmann Maxwell & Hippel LLP. He is the co-chair of the firm’s Business and Finance Department where his practice focuses on banking, general corporate matters, public finance, real estate development, construction law and international trade.
Author: Michael E. Bertin Posted: February 21, 2012
The recent state Supreme Court case Focht v. Focht was welcomed by most family law practitioners with open arms, as it resolves conflicting case law on the issue of whether an award or settlement proceeds from a personal injury claim, lottery winnings or workers' compensation that arose during marriage but received after separation should be considered marital property for purposes of equitable distribution in a divorce matter.The Pennsylvania Divorce Code defines marital property as "all property acquired by either party during the marriage."
Author: Michael E. Bertin Posted: February 21, 2012
Commentary
Author: Michael E. Bertin Posted: February 21, 2012
Posted: February 16, 2012
Every law school student knows that without good grades, one has little chance of winning a job with a top-tier law firm. In fact, a mediocre academic record can lead one into the ranks of the unemployed. It is no wonder then that students experience gut-churning anxiety when it comes to taking exams. Any grade less than a B+ is a ticket to remorse, guilt, and a sense of failure.
Posted: January 26, 2012
Philadelphia, Pennsylvania - January 26, 2012 - Obermayer partner Mathieu J. Shapiro, along with the Honorable Paul S. Diamond of the United States District Court for the Eastern District of Pennsylvania, authored the chapter on Director & Officer Liability in the THIRD EDITION OF BUSINESS AND COMMERCIAL LITIGATION IN FEDERAL COURTS, published by the American Bar Association's Section of Litigation and edited by Paul L. Haig.
Author: Michael S. Pepperman Posted: January 17, 2012
The following article, authored by Michael S. Pepperman, a member of the Labor Relations & Employment Law department, appears in SuperVision, The Magazine of Industrial Relations and Operating Management (January 2012). Click below to read the article.
Author: Michael E. Bertin Posted: December 13, 2011
The recent case of E.D. v. M.P. , filed on Nov. 9, is very important for family law attorneys as it is the first reported appellate case pertaining to child custody relocation under the new Child Custody Act.
Posted: December 1, 2011
Philadelphia--December 1, 2011--Obermayer's Labor partner Michael Pepperman's guest column NLRB Offers Guidance On Social Media Policies And Practices For Nursing Homes appears in the current issue of McKnight's Long-Term Care magazine and online at McKnight'sLong-Term Care News & Assisted Living (November 22, 2011). Pepperman's column discuses the recent NLRB decisions involving employers' restrictions on employee use of social media. Please click on the link to read it.
Posted: November 10, 2011
Author: Matthew A. Green Posted: October 21, 2011
Attorney Matthew A. Green provides five steps to help successfully apply an onboarding plan in South Jersey Biz's "Take Five" section.
Author: Michael E. Bertin Posted: October 11, 2011
In the recent case of Strauss v. Strauss , an interesting issue arose regarding whether monies received by Brian Strauss as part of a will contest were to be considered marital property subject to equitable distribution in the parties' divorce action or Brian Strauss' separate estate not subject to equitable distribution.
Author: Michael P. Weinstein Posted: September 9, 2011
A recent change by the Pennsylvania State Tax Equalization Board (STEB) in the City of Philadelphia’s Common Level Ratio (CLR) makes necessary a review of a property owner’s real estate tax assessment in order to determine the necessity for filing an appeal of that assessment to the Philadelphia Board of Revision of Taxes (BRT) before the October 3rd filing deadline.
Author: Shari B. Veisblatt Posted: August 5, 2011
Shari B. Veisblatt, a member of Obermayer Rebmann Maxwell & Hippel LLP’s Family Law Group authored the article , "ACCESS DENIED: What are Your Rights as a Grandparent? published online at girlfriendz.com (August/September 2011; Vol.4, Issue 4).Reprinted with permission Girlfriendz® The Thinking Woman's Magazine; August/September 2011; Volume 4, Issue 4.
Author: Peter J. Oberkircher, Tricia A. Swann, Lars J. Lederer Posted: July 1, 2011
Click on the title below to open a copy of The Obermayer Advisor- Legislative Alert newsletter.
Author: Jason E. Reisman, Tiffany L. McDonough Posted: June 14, 2011
Jason E. Reisman, Partner, and Tiffani L. McDonough, members of Obermayer Rebmann Maxwell & Hippel LLP’s Labor Relations and Employment Law Department, coauthored the article Misclassification Mayhem: The Department of Labor’s Strategic “Plan/Prevent/Protect” Initiative published in the Labor & Employment supplement of The Legal Intelligencer (June 14, 2011).
Author: Shari B. Veisblatt Posted: June 13, 2011
Around the nation, trial and appellate courts have had to decide whether or not disability pensions should be considered as marital property. Under what is called the "analytic" approach, the disability pension is divided into the "regular pension" component and the pure disability component (which is in lieu of future earnings), and only the regular pension is considered marital property. Under what is called the "mechanistic" approach, the entire disability pension is marital property, if the right to receive the disability pension occurred during the marriage. The majority of decisions across the nation favor the analytic approach.
Author: Joseph F. Aceto Posted: May 23, 2011
INTRODUCTION
Author: Larry Besnoff Posted: May 10, 2011
This article discusses drafting policies to control employee use of WEB 2.0 for business purposes and to control employees’ personal use of WEB 2.0 sites such as LinkedIn, Facebook, MySpace, Flickr, Twitter, Picasa, Shutterfly, Squido, YouTube and Snapfish.
Author: Michael E. Bertin Posted: April 13, 2011
Under the Protection from Abuse Act (PFA Act), "abuse" is defined as follows: "The occurrence of one or more of the following acts between family or household members, sexual or intimate partners or persons who share biological parenthood: (1) Attempting to cause or intentionally, knowingly or recklessly causing bodily injury, serious bodily injury, rape … (2) Placing another in reasonable fear of imminent serious bodily injury."
Author: Jason E. Reisman, Tiffany McDonough Posted: April 5, 2011
The following article, written by Jason E. Reisman and Tiffani McDonough, was posted on the Wage & Hour Defense Institute blog. Click Here to read the article.
Author: Mathieu J. Shapiro Posted: February 11, 2011
Mathieu J. Shapiro, partner and member of Obermayer Rebmann Maxwell & Hippel LLP’s Litigation Department and E-Discovery Practice Group, co-authored the article “7th Circuit Pilot Program Could Have Wide-Ranging Impact" published in the E-Discovery supplement of The Legal Intelligencer (January 31, 2012). Click on the link to read the article.
Author: Alex P. Basilevsky Posted: February 11, 2011
Citizen suits under state and federal environmental laws are nothing new. But recent cases brought in California and Massachusetts may indicate a new trend of suits alleging violations of the National Pollution Discharge Elimination System (NPDES) associated with stormwater discharges. These suits have several characteristics that make them attractive to prospective plaintiffs and their lawyers. Further, the enforcement environment (no pun intended) suggests that there is no shortage of potential defendants.
Author: Jason E. Reisman Posted: February 11, 2011
The following article, co-authored by Jason E. Reisman , member of the Labor Relations & Employment Law Department, was posted on the Wage & Hour Defense Institute blog.
Author: Charles M. Golden Posted: February 11, 2011
Charles M. Golden, partner and chairman of Obermayer's Creditors' Rights, Bankruptcy and Financial Reorganization Department, co-authored the article “Viewpoint: The time is now for making hard choices - Strong leadership is needed to keep cities and counties fiscally sound" published online in American City & County (September 13, 2011) and excerpted below:
Author: Michael E. Bertin Posted: February 11, 2011
Recently, a number of Pennsylvania Superior Court cases have been published pertaining to jurisdiction in child custody cases. The cases of R.M. v. J.S. , C.L. v. Z.M.F.H. and B.J.D. v. D.L.C. will be addressed in this article.
Author: Michael E. Bertin Posted: February 11, 2011
An interesting issue was raised recently in a Pennsylvania Superior Court case pertaining to civil contempt in a child support case. In Warmkessel v. Heffner , Eric Heffner appealed a trial court's order refusing to give him credit for time that he served incarcerated as a result of an outstanding bench warrant against his incarceration sanction regarding his civil contempt for lack of child support payments. The Pennsylvania Superior Court held that Heffner was not entitled to credit against his incarceration sanction and affirmed the trial court's decision.
Author: Tiffany L. McDonough Posted: February 11, 2011
Tiffani L. McDonough, a member of Obermayer Rebmann Maxwell & Hippel LLP’s Labor Relations and Employment Law Department, authored the Guest Comment column, “What ‘Ban the Box’ Means” published in the Philadelphia Business Journal (May 13-19, 2011). To view the article click on this link: What "Ban the Box" Means
Author: Michael E. Bertin Posted: February 11, 2011
On Jan. 24, the new Child Custody Act (Act No. 112 of 2010) went into effect. The new Child Custody Act begins at 23 Pa. C.S.A. §5321 and concludes at 23 Pa. C.S.A. §5340, and replaces sections 5301 through 5315, as well as Section 4346. The act was approximately 10 years in the making and is prospective and applies to actions commenced on or after Jan. 24. This article will cover nine areas of the act. However, practitioners should review the entire act as there are other areas not being addressed by this article.
Author: Michael E. Bertin Posted: February 11, 2011
Recently, the Pennsylvania Superior Court has published two opinions reiterating the well-established case law mandating a fact-specific analysis of the children's best interests by the court in deciding custody disputes as opposed to relying on local custom, practice or judicial norms. The most recent case on this issue is the 2010 state Superior Court case of B.C.S. v. J.A.S .
Posted: February 2, 2011
The following was presented by Larry Besnoff, Obermayer Rebmann Maxwell & Hippel LLP and Jacqueline M. Woolley, The Ezold Law Firm, P.C. on February 1, 2011 by the PBI at the CLE Conference on "Social Media in the Workplace: Facebook, Twitter, foursquare and Other Web 2.0 Sites."
Author: Michael E. Bertin Posted: December 14, 2010
The recent case of Brickus v. Dent provides practitioners with a reminder that support orders may be modified in any appropriate manner — either upwardly or downwardly — regardless of whether the petitioner is seeking an upward or downward modification of the order and the respondent does not file a counter/cross-petition to modify.
Author: Larry Besnoff Posted: December 7, 2010
By Larry Besnoff, Esquire Obermayer Rebmann Maxwell & Hippel LLP Presented at the Pennsylvania Bar Institute's CLE program, "Starting a New Business." (December 2010)
Author: Hercules Grigos Posted: November 24, 2010
Recently the Pennsylvania Legislature enacted the Development Permit Extension Act. This Act will extend the life of development approvals throughout the Commonwealth to July 2, 2013.
Author: Michael E. Bertin Posted: October 11, 2010
The recent Superior Court case of Balicki v. Balicki has sent shock waves throughout the family law community. The question family law practitioners face is whether the Balicki decision mandates the court to apply tax ramifications and the costs of sale to all assets when equitably dividing the marital estate.
Author: Jason E. Reisman, Thomas T. Hearn Posted: September 1, 2010
On September 7, 2010, a divided U.S. Court of Appeals for the Third Circuit affirmed a grant of summary judgment to NutriSystem, Inc. (“NutriSystem”) in a lawsuit challenging the concept of “commissions” under the retail commission exemption of Section 7(i) of the Fair Labor Standards Act (“FLSA”).1 In Parker v. NutriSystem, Inc.,2 the Third Circuit held, in a 2-1 decision, that NutriSystem’s call center sales associates were not entitled to overtime pay under the FLSA because, in relevant part, they received “commissions”3 that qualified them for the Section 7(i) exemption. In finding for NutriSystem, the Third Circuit refused to defer to the U.S. Department of Labor’s interpretation of the term “commission.”
Author: Michael Bertin Posted: June 7, 2010
The 2010 Superior Court case J.P. vs. S.P. is a reminder of the importance of complying with a court order directing the filing of a Rule 1925(b) Concise Statement of Errors Complained of on Appeal. As held by the Superior Court in the present case, failure to follow such an order will result in a waiver of all matters complained of on appeal, which will, in essence, close the court's doors in such an appeal, leaving the appellant on the outside looking in with no relief.
Author: Michael Bertin Posted: April 13, 2010
Issues pertaining to exclusive continuing jurisdiction and inconvenient forum in child custody cases are often hot topics among family law practitioners. Recently, the case of A.D v. M.A.B., addressed both of these issues.
Author: Michael Bertin Posted: February 10, 2010
Pursuant to the Pennsylvania Support Guidelines, the guidelines shall be reviewed at least once every four years. After the most recent review, which began in 2007, the new Support Guidelines were adopted on Jan. 12. The effective date is May 12, 2010.
Author: Jeffery Batoff, Nick Poduslenko Posted: January 8, 2010
Pennsylvania Home Improvement Consumer Protection Act: Contractors beware!
January 8, 2010
This article appears on the website of the North East Pennsylvania Business Journal and will remain there throughout February. It will then appear in the print edition in March.
By Jeffery S. Batoff and Nick Poduslenko
Author: Michael Bertin Posted: December 8, 2009
The recent case of Miller v. Miller raises interesting issues for the family law practitioner. Generally, the Miller case pertains to a postnuptial agreement entered between the parties, which included a provision that the husband should pay for the mortgage, taxes and insurance on the marital residence until the marital residence was sold.
Author: Michael Bertin Posted: October 19, 2009
The recent Pennsylvania Superior Court case of Murphy v. McDermott provides the family law practitioner with reminders and clarifications as to calculating a party's income for support purposes. The Murphy case focuses on four main issues: whether a parent should be obligated to contribute toward private school tuition; whether one-time stock options exercised in one year should be imputed as income for future years; the calculation of perquisites as income, specifically the personal use of a company-provided vehicle; and whether a withdrawal penalty should be factored into the inclusion of an employer's gross contribution to an employee's 401(k) and stock accounts.
Author: Michael Bertin Posted: August 11, 2009
On April 8, 2008, The Legal Intelligencer published my article regarding the Pennsylvania Superior Court case of Krebs v. Krebs (hereafter referred to as Krebs I). Krebs I pertained to retroactively modifying a child support order prior to the filing of a petition to modify a support order. In Krebs I , the Pennsylvania Superior Court remanded the case to the trial court and directed the trial court to consider the imposition of attorney fees.
Author: Jay Evans Posted: June 22, 2009
The difficulties that appellate practitioners can face become obvious by spending even a single day at one of our appellate court oral argument sessions. Certain themes, wholly unrelated to the merits underlying any appeal, will emerge again and again: timeliness, finality and waiver. These three issues can be fatal to any appeal, distract from the merits of a case, and can stall the momentum of a compelling argument.
Author: Anastasius (Tassos) Estratiades, Matthew A. Greene Posted: June 22, 2009
On May 7, 2009, the New Jersey Supreme Court took a step toward limiting the duty owed by a purveyor of alcoholic beverages to its patrons. In Bauer v. Nebbitt, 399 N.J. Super. 71 (2009), the state Supreme Court held that neither the common law nor New Jersey Jersey's Dram Shop Act (N.J.S.A. 2A:22A-1 et seq.) imposes a duty upon businesses to monitor a patron's intoxication level where no alcoholic beverages were served to the patron.
Author: Michael E. Bertin Posted: June 9, 2009
By Michael Bertin
Author: Michael Bertin Posted: April 14, 2009
In 2004, the commonwealth of Pennsylvania adopted the Uniform Child Custody Jurisdiction and Enforcement Act, or UCCJEA. The UCCJEA replaced the Uniform Child Custody Jurisdiction Act, or UCCJA. It was believed that the UCCJEA would solve many of the problems that occurred under the UCCJA regarding child custody jurisdictional disputes. Under the UCCJA, a common problem arose when a petition was filed in a new state at a time when a custody order existed in a prior state. Thereafter, a subsequent petition would be filed in the prior state where the custody order had originated. In this instance, trouble arose because there were two jurisdictions competing for the same case. Under the UCCJEA, Section 5422 was designed to help solve this problem. Section 5422 is titled: "Exclusive, Continuing Jurisdiction." Pursuant to Section 5422(a): "Except as otherwise provided in Section 5424 (relating to temporary emergency jurisdiction), a court of this Commonwealth which has made a child custody determination consistent with Section 5421 (relating initial child custody jurisdiction) or 5423 (relating to jurisdiction to modify determination) has exclusive, continuing jurisdiction over the determination until" one of two instances occurs. The first instance is when the court determines that neither the child nor the child and one parent/person acting as a parent have a significant connection with this commonwealth and that substantial evidence is no longer available in this commonwealth concerning the child's care, protection, training and personal relationships. The second instance is when the court of this commonwealth or a court in another state determines that the child, the child's parents and any person acting as a parent do not presently reside in this commonwealth.
Author: Michael Bertin Posted: February 10, 2009
As most family law practitioners are aware, the 2007 Pennsylvania Superior Court case of Nash v. Herbster was a case of first impression applying the then fairly new Rule 1910.19(f) to incarceration as being a substantial change in circumstances for purposes modifying or terminating child support, after considering the official comment to said rule. This author wrote an article on Nash ("Incarceration Now a Change in Circumstances to Modify Child Support")that appeared in the Dec. 11, 2007, Legal Intelligencer , analyzing Rule 1910.19(f). Under Rule 1910.19(f): "[T]he court may modify or terminate a charging order for support and remit any arrears, all without prejudice, when it appears to the court that: (1) the order is no longer able to be enforced under state law; or (2) the obligor is unable to pay, has no known income or assets and there is no reasonable prospect that the obligor will be able to pay in the foreseeable future."
Author: Michael Bertin Posted: December 9, 2008
The recent Pennsylvania Superior Court case of Hopkins v. Byes reiterates that it may be appropriate for a trial court to order attorney fees against a party found in contempt for failing to follow a child custody order. Hopkins v. Byes is a custody case that arose in Erie County, Pa. The relevant facts of the case are as follows: Sonya Byes and John Hopkins Jr. are the parents of a 10-year-old child. In January 2006, the parties entered into a consent custody agreement giving Byes primary physical custody of the child and Hopkins partial physical custody (referred to as "visitation" in the opinion). In the parties' agreement, it is stated that Hopkins' Thanksgiving visitation was to be at "times by mutual agreement" and agreed upon visitation time with the child on Christmas and child's birthday, which was just days after Christmas.
Author: Tiffany L. McDonough Posted: November 3, 2008
THE CORPORATE COUNSELOR, 2008
Author: Michael Bertin Posted: October 14, 2008
The recent Pennsylvania Superior Court case of Hopkins v. Byes reiterates that it may be appropriate for a trial court to order attorney fees against a party found in contempt for failing to follow a child custody order. Hopkins v. Byes is a custody case that arose in Erie County, Pa. The relevant facts of the case are as follows: Sonya Byes and John Hopkins Jr. are the parents of a 10-year-old child. In January 2006, the parties entered into a consent custody agreement giving Byes primary physical custody of the child and Hopkins partial physical custody (referred to as "visitation" in the opinion). In the parties' agreement, it is stated that Hopkins' Thanksgiving visitation was to be at "times by mutual agreement" and agreed upon visitation time with the child on Christmas and child's birthday, which was just days after Christmas.
Author: Michael Bertin Posted: August 12, 2008
The Pennsylvania Superior Court case of Annechino v. Joire provided a reminder and clarification to family law practitioners regarding the enforceability of property settlement agreements.
Author: Anastasius Efstratiades Posted: July 1, 2008
With a weak dollar and many strong foreign currencies, investors from around the globe (both individuals and institutional) are interested in taking a look at the U.S. market.
Author: Michael Bertin Posted: June 10, 2008
The Pennsylvania Superior Court recently addressed the application of the relatively new Domestic Relations Statute 23 Pa.C.S.A. Section 4308.1 pertaining to "Collection of Overdue Support for Monetary Awards," in the case of Faust v. Walker. Interestingly, the appellant in this case was the domestic relations office of the Dauphin County Court of Common Pleas.The facts in Faust are as follows: Walker was injured in a motor vehicle accident and settled his subsequent personal injury claim related thereto in the amount of $10,000. At the time of the settlement, Walker owed in excess of $12,000 in child support arrears. The trial court initially entered an order directing Walker's personal injury attorney to pay $5,000 of the settlement toward Walker's arrears. It is to be noted, "the Domestic Relations Section is granted the power to initiate judicial proceedings to obtain a settlement from the transferee in the best interest of the child support obligee via 23 Pa.C.S.A. Section 4305(a)(11), as well as, the power to issue orders to secure assets to satisfy support obligations and arrearages by intercepting or seizing judgments or settlements." In response to the trial court's order directing Walker's personal injury attorney to pay $5,000 of the settlement award toward Walker's support arrears, his attorney, on his behalf, filed a motion to strike the court's order of attachment. Following oral argument on Walker's motion to strike the order of attachment, the trial court entered an order granting said motion pursuant to 23 Pa.C.S.A. Section 4308.1 and "directed the Domestic Relations Office of the Dauphin County Court of Common Pleas to prepare an order of attachment of income in the amount of $1,800.93."Subsequent to the court's entry of the order, the Dauphin County domestic relations office filed an appeal raising the following issue for review: "Whether the trial court abused its discretion by misapplying the law when it granted [Walker's] request to limit the attachment of income in contradiction to the specific language of 23 Pa.C.S.A. Section 4308.1." The Superior Court disagreed with the Dauphin County domestic relations office's argument on appeal and affirmed the trial court's order.The Superior Court reiterated that "[i]n evaluating a trial court's application of a statute, our standard of review is plenary and is limited to determining whether the trial court committed an error of law." The Superior Court further stated, "[w]hen interpreting a statute, we must abide by the rules of statutory construction. It is a basic tenet of statutory interpretation that 'when the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.'"The general rule under Section 4308.1 provides, in part, "Overdue support shall be a lien by operation of law against the net proceeds of any monetary award, as defined in subsection (i), owed to an obligor, and distribution of any such award shall be stayed in an amount equal to the child support lien provided for under this section pending payment of the lien." The focus of the argument in Faust pertained to the definitions of net proceeds and monetary award under Section 4308.1. The statute defines monetary award as follows:"Any portion of a settlement paid as a lump sum negotiated in lieu of, or subsequent to the filing of a lawsuit for, or any civil judgment or civil arbitration award that is paid as a third party claim for bodily injury or death under a property and casualty insurance policy or paid as a workers' compensation or occupational disease act or under a workers' compensation policy . . . . The term does not include a lump sum payable through a structured settlement annuity. The terms shall only apply to those settlements, judgments, civil arbitrations, Worker's Compensation Act or the Pennsylvania Occupational Disease Act awards, which are asserted and resolved in this Commonwealth."The statute defines net proceeds as "moneys in excess of $5,000 payable to a prevailing party or beneficiary or in the case of an award under . . . the Workers' Compensation Act, or the . . . Pennsylvania Occupational Disease Act, the claimant after payment of attorney's fees, witness fees, court costs, reasonable litigation expenses, documented unpaid expenses incurred for medical treatment causally related to the claim and any workers' compensation or occupational disease indemnity or medical payment and payments to the medical assistant's program under . . . the Public Welfare Code." The domestic relations office argued on appeal that the attorneys' fees and costs should not be excluded from the amount of the personal injury settlement subject to the lien. In other words, the domestic relations office argued that only the $5,000 should be excluded from the settlement subject to the lien. The domestic relations section contended that "the part of the definition which would deduct these and other expenses from the portion of the monetary award subject to the lien applies only to workers' compensation or occupation disease awards." Therefore, the domestic relations section stressed that, with the exception of awards from workers' compensation or occupational disease claims, all settlement/awards in excess of $5,000 are subject to the lien.The Superior Court reasoned, "we find no basis, nor does Appellant [DRO] offer any explanation, for an interpretation of 'net proceeds' that would draw a distinction between awards from personal injury claims and those from workers' compensation or occupational disease claims and only permit attorney's fees and costs and related medical expenses to be deducted from the latter." The Superior Court heavily quoted the trial court's analysis and reasoning behind its order. In making its decision, the trial court stated in its opinion: "The determinative factor in so concluding is that the statute explicitly identifies that it is the 'net proceeds' of a monetary award that are subject to a lien. The common meaning of 'net proceeds' is '[t]he amount received in a transaction minus the cost of the transaction (such as expenses or commissions). Also termed net balance.' Furthermore, the common meaning of the adjective 'net' is that which remains 'after all the deductions have been made, as for expenses: net profit.' 'Net' is similarly defined as 'free from all charges or deductions: as remaining after the deduction of all charges, outlay, or loss.'"The trial court further stated: "[t]here is simply no language in the definition of 'net proceeds' limiting the deduction of expenses only to awards made to workers' compensation or occupational disease claimants. Since 'net proceeds' is not an ambiguous term, this court need not undergo further examination of legislative intent under the factors set forth by the Statutory Construction Act."The Superior Court found the trial court's reasoning "to be sound," and held that "the statute clearly defines 'net proceeds' as monies in excess of $5,000 payable to a prevailing party, beneficiary or claimant after payment of attorneys' fees, costs etc." Therefore, the Superior Court found that the trial court correctly determined the total amount of the settlement award attributed to the child support lien was $1,800.93. In the opinion, the Superior Court provided the mathematical details as follows: The total settlement was $10,000. The counsel fees and costs related to the personal injury matter totaled $3,199.07, leaving a net award of $6,800.93. After subtracting the statutorily required $5,000, the remaining balance of $1,800.93 is what is subject to the arrears lien.It is important for the family law practitioner to be familiar with Section 4308.1. This newer section to the Domestic Relations Code requires a prevailing party or beneficiary of a monetary award to provide his or her personal injury attorney "with a statement made subject to 18 Pa.C.S. Section 4904 (relating to unworn falsification to authorities)" that includes that party's or beneficiary's full name, mailing address, date of birth and Social Security number. That person is also required to provide his/her personal injury attorney with written documentation of arrears from the "Pennsylvania Child Support Enforcement System website or, if no arrears exist, written documentation from the website indicating no arrears." Interestingly, the statute provides "[t]he attorney shall obtain a copy of the prevailing party or beneficiary's statement and a lien report from the website at the time of the delivery of the release [of proceeds]; the lien report shall be dated within 20 days of the date of the delivery of the release." The statute further provides: "In the event that there are arrears, the attorney shall make payment of any lien to the department's state disbursement unit from the net proceeds of any monetary award."This case is significant because it analyzes the definitions of "net proceeds" and "monetary awards" under the statute. Further, the case illustrates the broad responsibilities imposed upon the litigant and personal injury attorney by the statute.
Author: Gregory D. Saputelli Posted: May 21, 2008
In a precedent-setting case decided and released for publication on May 16, 2008, the New Jersey Appellate Division carved out an exception to New Jersey's general adherence to the American Rule that parties should bear their own attorneys' fees. The Court also, for the first time, expressly recognized as the law of New Jersey § 914(2) of the Restatement (Second) of Torts, which allows fee-shifting in certain circumstances, even where not authorized by statute, court rule or contract.
Author: Warren W. Ayres Posted: April 8, 2008
Author: Michael E. Bertin Posted: April 8, 2008
In Pennsylvania, a modification to a child support/spousal support/alimony pendente lite order will generally be retroactive to the date that the petition for modification is filed. However, pursuant to 23 Pa.C.S.A. Section 4352(e), "modification may be applied to an earlier period if the petitioner was precluded from filing a petition for modification by reason of a significant physical or mental disability, misrepresentation of another party or other compelling reasons and if the petitioner, when no longer precluded, promptly filed a petition."
Author: Michael E. Bertin Posted: December 11, 2007
The recent Pennsylvania Superior Court case of Nash v. Herbster is a case of first impression with regard to the effect of the new Subsection (f) to Pennsylvania Rule of Civil Procedure 1910.19 regarding support modification. In this case, the Superior Court held that incarceration may be considered a change in circumstances warranting a modification of child support. This holding contradicts the Pennsylvania Supreme Court ruling in Yerkes v. Yerkes.The pertinent facts in Nash are as follows: Herbster and Nash are the parents of Christian. On April 15, 2004, a support order was entered against Herbster for the support of Christian. In 2004, Herbster filed a petition to modify on the basis that he was "not making the income [he] used [to]." That petition was dismissed without prejudice because Herbster verbally withdrew it.On July 1, 2005, Herbster filed another modification petition, and in an accompanying letter to the domestic relations section stated: "I understand that being in prison alone is not enough to have a modification hearing. But I also have a change in my earning potential, [and] a change in my mental state that keeps me from holding steady employment. So therefore I’m no longer standing alone with just incarceration. [If] I do not receive a hearing my next step will be to petition the higher court to quash your unjust rulings."A support conference was scheduled for Aug. 1, 2005, but was "generally continued," pending receipt of Herbster’s medical condition. Herbster was directed to provide the domestic relations section with proof of his medical condition within 60 days from that time.In a letter dated Sept. 27, 2005, the assistant director of the domestic relations section of Mifflin County informed Herbster that receipt of his medical records would not be necessary as "no action will be taken while you are incarcerated. Once you are released, we can once again schedule a conference on your petition for modification." On Aug. 30, 2006, in a separate civil action, Herbster filed a number of documents.Herbster filed a petition for modification of support order seeking modification or termination of his existing support obligation. Herbster averred that there was a substantial change of circumstances in his earning capacity since he was incarcerated "with no income or assets, since Dec. 28, 2004, and that he was ‘unable to pay, has no known income or assets and there is no reasonable prospect that [he] will be able to pay in the foreseeable future.’" Herbster also cited the recently enacted Rule 1910.21(f) "and averred that ‘[d]ue to changes in this rule [his support] order is no longer able to be enforced under state law.’" Herbster also filed petition to proceed in forma pauperis (which the Mifflin County prothonotary granted) and a request for hearing de novo regarding the amount of support awarded and the calculation of his arrears.On Sept. 1, 2007, the trial court denied Herbster’s petition to modify, specifically stating, "Incarceration in a correction facility is not a change in circumstances that can be used to modify or terminate an existing support order." The trial court cited the case of Yerkes v. Yerkes to support its position. Herbster filed the instant appeal regarding the trial court’s denial of his petition.On appeal, Herbster raised five issues. "Central to all of [Herbster’s] issues on appeal is his claim that Rule 1910.19(f) of the Pennsylvania Rules of Civil Procedure permits him to seek modification of his current support obligation even though he is incarcerated." The Superior Court then held "We are constrained to agree."The Superior Court reiterated that it is the petitioning parent’s burden to specifically aver the material and substantial change in circumstances upon which the petition is based, and the petition shall be granted "if the requesting party demonstrates a substantial change in circumstances."The seminal case regarding whether incarceration constitutes a change in circumstances warranting a modification or termination of a child support order is the Pennsylvania Supreme Court case of Yerkes v. Yerkes. Because the Pennsylvania Supreme Court, prior to Yerkes "never directly addressed whether incarceration, standing alone, is a ‘material and substantial change in circumstances’ that provides sufficient grounds for modification or termination of a child support order," the Supreme Court in Yerkes analyzed three approaches in other jurisdictions with regard to the interplay between incarceration and child support modification or termination.In Yerkes, the Supreme Court adopted the "no justification" rule regarding incarceration and child support modification. Pursuant to the "no justification" rule, incarceration, alone, is not a "‘material and substantial change in circumstances’ providing sufficient grounds for modification or termination of a child support order." The Supreme Court in Yerkes also "disapproved" of the Pennsylvania Superior Court’s decision in Leasure v. Leasure where the Superior Court held that "a child support obligation should be suspended where the obligor is incarcerated" as that approach conflicts with the "no justification" approach.Under new Subsection (f) in Rule 1910.19 (made effective May 19, 2006): "The court may modify or terminate a charging order for support and remit any arrears, all without prejudice, when it appears to the court that the order is no longer able to be enforced under state law, or the obligor is unable to pay, has no known income or assets and there is no reasonable prospect that the obligor will be able to pay in the foreseeable future."In the Explanatory Comment (2006) to 1910.19(f), it states: "New Subdivision (f) addresses an increasing multiplicity of circumstances in which the continued existence of a court-ordered obligation of support is inconsistent with rules of law. … [A]n obligor with no verifiable income or assets whose … incarceration … precludes the payment of support renders the support order unenforceable and uncollectible, diminishing the perception of the court as a source of redress and relief."Herbster "tracked the language of Rule 1910.19(f)(2)" when he requested his relief in his 2006 modification petition. The Superior Court stated that they discovered no case law from either the Superior Court or state Supreme Court that discusses "the application of this subdivision in relation to our Supreme Court’s decision in Yerkes." The Superior Court further stated, "[m]oreover, the explanatory comment for the new subdivision makes no reference to the Yerkes decision."The Superior Court then focused on the case of Fisher v. Commonwealth, Dept. of Corrections, a 2007 Commonwealth Court case and stated: "In Fisher, one Commonwealth Court judge agreed with the Department of Corrections’ assertion that an inmate may ‘seek modification of his [or her] support orders while in prison, as now allowed by Pa. R.C.P. No. 1910.19(f).’" Interestingly, the Superior Court’s quoting of Fisher was in reference to a judge’s dissenting opinion. The Superior Court then states that their reading of 1910.19(f) supports the conclusion of the dissenting judge in Fisher, and, therefore, vacated the order denying Herbster’s petition and directed the trial court, upon remand, to follow the "dictates of Rule 1910.19(f)."Pursuant to Nash, incarceration will now be considered a substantial change in circumstances enabling an obligor to petition the court to modify or terminate his or her child support obligation. What is not clear from the Superior Court’s opinion in Nash is whether incarceration alone will warrant the actual modification or termination, since the court did not elaborate on Herbster’s claim that his mental state also keeps him from holding steady employment.The Superior Court went into detail regarding the concurring opinions in Yerkes with regard to incarceration being a factor when modifying or terminating child support and that it could be a substantial change in circumstances, though incarceration alone would not justify the modification or termination. The Superior Court appeared to hang its hat on a dissenting opinion of the Commonwealth Court.Regardless, the ultimate determination appeared to lie in the plain meaning of the explanatory comment accompanying 1919.19(f). It will be interesting to see how the Supreme Court handles this issue if it is faced with it in the future. Until that time comes, by applying 1910.19(f), incarceration may be considered a substantial change in circumstances for purposes of modifying or terminating child support.
Author: Michael E. Bertin Posted: October 9, 2007
With regard to the post-assault behavior, the Superior Court held that there "is no evidence whatsoever that would support a claim under Subparagraphs 1 through 4" and, therefore, examined the term "course of conduct" under Subparagraph 5 and indicated that it is not defined under the Protection From Abuse Act. Because the act "indicates that terms not otherwise defined by Chapter 61 shall have the meaning given to them by Title 18," the Superior Court used the definition for "course of conduct" as provided under Title 18. Title 18 defines "course of conduct" as "a pattern of [a]ctions composed of more than one act over a period of time, however short, evidencing a continuity of conduct." The Superior Court emphasized that the encounters in Scott occurred years apart, that the contact between Shay and Scott occurred in a workplace or at public events, and that none of the encounters were sufficient to put Shay in "reasonable fear of bodily injury." Therefore, the Superior Court concluded that had Shay had standing under the act, there was insufficient evidence to support the protective order entered by the trial court. This case is interesting and important for the family law practitioner in that it reiterates and refines the standing requirements under the Protection From Abuse Act. It also analyzes the sufficiency of bringing an action under the act. With regard to standing, an interesting issue arises if the sexual crime is consensual, such as statutory rape. In such a situation, the court might find that the parties were "sexual and intimate partners" under the act, thus conferring standing on behalf of the petitioner.
Author: Charles M. Golden Posted: September 21, 2007
Can a debtor enjoin a nondebtor from proceeding to arbitration? The answer to this question was given by the 9th U.S. Circuit Court of Appeals in the matter In re Solidus Networks Inc.; Indivos Corporation, Appellants v. Excel Innovations Inc.; Ned Hoffman, Appellees, in an opinion written by Senior Circuit Judge Alfred T. Goodwin on Sept. 7. The underlying facts of the case are relatively complex. Ned Hoffman was a principal shareholder of a company called Excel Innovations Inc. and Indivos Corporation. Indivos was owned by Hoffman and Excel, which owned shares of Indivos. Hoffman entered into a settlement agreement with Indivos and agreed to refrain from certain conduct preventing it from selling its assets or otherwise getting involved in business transactions. Indivos was not a part of the settlement agreement and never filed any proceedings in the bankruptcy court. In June 2003, a dispute arose, and Indivos initiated AAA arbitration proceedings against Hoffman and Excel. On May 14, 2004, the arbitrator granted partial summary judgment for Indivos and found Hoffman liable for breach of contract. The arbitrator also found Excel liable as Hoffman's alter ego but denied other summary judgment as to other lawsuits filed by Excel. In late May 2004, Excel and Hoffman suffered an additional setback in their patent infringement action against Indivos, and the court ruled that all of the patents Excel accused Indivos of infringing were actually owned by Indivos. In June 2004, Hoffman and Excel filed bankruptcy petitions under Chapter 13 and 11, respectively. The bankruptcy filings automatically stayed the arbitration against Hoffman and Excel, as well as the patent litigation. However, other parties to the arbitration have already concluded their affirmative case. The parties were attempting to schedule additional hearing dates to finish the proceedings when Hoffman's bankruptcy petition was dismissed in September 2004. In February 2005, Indivos recommended arbitration against Hoffman on the ground that the stay established by Hoffman's bankruptcy petition has been lifted. Hoffman argued that the stay established by Excel's bankruptcy applied to Indivo's claim against him because those claims intertwined with Indivo's claims against Excel. In July 2005, Excel initiated adversary proceedings in the bankruptcy against Indivo's Solidus, Hoffman, AAA and the arbitrator. Excel sought declaratory and injunctive relief on the ground that the arbitration violated the automatic stay in Excel's bankruptcy case. The arbitrator moved the case forward and requested a submission of briefs. In September 2005, Excel filed a motion for a preliminary injunction. The motion was supported by an affidavit from Hoffman stating the three reasons why permitting arbitration against him would adversely impact Excel. First, he planned to demand indemnification from Excel and that therefore the arbitration lead to new liability for Excel. Second, his defense would focus on his own interest and not those of Excel. Third, he would be "compelled to reveal the substance of critical privileged communications between myself and attorneys for the debtor." The bankruptcy court granted an injunction staying arbitration until confirmation of Excel's reorganization plan. The court stated that a Section 105(a) injunction is proper if arbitration "could conceivably have any effect on the administration of the bankruptcy estate." The court went on to declare that Excel established a "reasonable probability" of possible negative impacts on the estate. Furthermore, the court determined that Excel's motion also satisfied the traditional, nonbankruptcy test for a preliminary injunction, which "balances the plaintiff's likelihood of success [on the merits] against the relative hardship to the parties." The court cited Clear Channel Outdoor Inc. v. City of Los Angeles. The bankruptcy court made no findings on the plaintiff's likelihood of success, but it concluded that a stay would protect Excel from possible injury while causing no harm to Indivos and Solidus. Indivos and Solidus appealed to the Bankruptcy Appellate Panel (BAP), which affirmed. The BAP noted that the 9th Circuit had not established a standard for a Section 105(a) motion to enjoin an action against a nondebtor. However, BAP cited a series of 4th Circuit opinions stating that a Section 105(a) injunction is appropriate when the debtor and nondebtor's interests are so intertwined that an action against the non-debtor is in effect a claim against the debtor. The BAP further concluded, "to the extent that Section 105 is recognized as authority for granting injunctive relief in matters that are related to the bankruptcy case, we hold that the Bankruptcy Court correctly asserted its Section 105(a) authority to enjoining Appellants' arbitration proceedings." The matter was then appealed to the 9th Circuit. Goodwin's opinion first pointed out that the court of appeals has jurisdiction to hear appeals from "final decisions" of the BAP, and the granting of such an injunction was clearly a final decision. The injunction is in fact an extension of the automatic stay of halting another proceeding to avoid disruption of the debtor's reorganization. The court has held that a decision or denying relief from a Section 362(a) automatic stay constitutes a final order for purposes of appellate jurisdiction. The court further pointed out that the BAP decision is to be reviewed de novo and the injunction will be reversed if the bankruptcy court abused its discretion by basing its decision on an incorrect legal standard or on clearly erroneous findings of fact. The court went on to state that under 11 U.S.C. Section 105(a), a bankruptcy court "may issue any order, process, or judgments that is necessary or appropriate to carry out the provisions of this title." Section 105(a) gives the bankruptcy courts the power to stay actions that are not subject to the 11 U.S.C. Section 362(a) automatic stay but "threaten the integrity of bankrupt's estate," according to Canter v. Canter (In re Canter). The proper standard for granting a Section 105(a) preliminary injunction against a nondebtor was an issue of first impression in the circuit. In the nonbankruptcy context, the courts have consistently held that trial courts decided preliminary injunction motions to balance the moving party's likelihood of success on the merits and relative hardship of the parties. The moving party must show the following: A strong likelihood of success on the merits; The possibility of irreparable injury to plaintiff preliminary relief is not granted; A balance of hardships favoring the plaintiff; and Advancement of the public interest (in certain cases). Alternatively, a court may grant the injunction if the plaintiff demonstrates either a combination of probable success on the merits and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in his favor. The court went on to state that the majority of circuits that have reviewed injunctions stating actions against the nondebtor have applied the usual preliminary injunctions standard. As the 5th Circuit pointed out in Commonwealth Oil Ref. Co. v. EPA (In re Commonwealth Oil Ref. Co.),the traditional approach is strongly supported by the legislative history of Section 105(a). In the Senate report, the comment reads as follows: "Stays or injunctions issued under these other sections will not be automatic upon the commencement of the case, but will be granted or issued under the usual rules for the issues of injunctions." The 2nd, 3rd and 8th circuits have similarly applied the traditional standard with respect to stays that are not automatic under Section 362(a) in cases like Wedgewood Inv. Fund v. Wedgewood Realty Group Ltd. (In re Wedgewood Realty Group Ltd.) The 7th Circuit, by contrast, expressly held that the moving party does not need to show irreparable harm. The court went on to state that the usual preliminary injunction standard applies to stays of proceedings against non-debtors under Section 105(a). The usual standard helps to ensure that stays would not be granting lightly and would only be considered after all the necessary elements have been proven. The court, in citing Sammartano v. First Judicial Dist. Court, stated there is no general rule in prohibiting suits against non-debtors. To obtain equitable relief, the party seeking the stay should be required to satisfy the usual preliminary injunction standard. Appellants contended that Excel must show likelihood of success on its complaint in the adversary proceedings, while the Excel's position is that it need only show only the likelihood of success in reorganization. The 9th Circuit went on to hold that a debtor seeking to stay an action against a nondebtor must show a reasonable likelihood of a successful reorganization. "The inquiry for a preliminary injunction necessarily focuses on the outcome of a later proceeding, at which time the merits of the questions giving rise to the litigation will be decided." In a Chapter 11 context, the arbitration would harm its ability to reorganize, and it makes sense to require showing "a reasonable likelihood of a successful reorganization.," according to Homestead Holdings Inc. v. Broome & Wellington (In re PTI Holding Corp.). The ultimate tests in granting an injunction against a non-debtor under Section 105(a) are determining the likelihood of the debtor's successful reorganization, the relative hardship of the parties, and any public interest concerns, if relevant. Unfortunately, neither the bankruptcy court nor the BAP considered all of the elements necessary to establish the need for an injunction. Furthermore, the bankruptcy court made no specific findings of fact to conclude that Excel had a reasonable chance to a successful reorganizing. Absent of these findings, the appellate court reversed. COMMENT In this case, the 9th Circuit reversed the entry of a Section 105(a) injunction against a nondebtor. Nevertheless, the court set forth the proper standard, which is to be applied in the case of such a request. Clearly, the court has held that the granting of a Section 105(a) injunction is within the power of the bankruptcy court. To obtain the injunction, the proponent must prove all of the non-bankruptcy tests, as well as the additional test of a likelihood of successful reorganization.
Author: Charles M. Golden Posted: August 17, 2007
Does the bankruptcy court have authority to adjust the fee of a professional that has a court approval fixed rate contract? The answer to this question was determined by the 11th U.S. Circuit Court of Appeals in In re Miller Buckfire & Co., LLC, v. Citation Corporation, decided on July 26. The facts of the case are that Citation appealed the district court's reversal of the bankruptcy court's order awarding an adjusted fee for the investment banking services of Miller Buckfire & Co. In addition, the debtor appealed the district court's affirmance of the bankruptcy court's finding that Miller Buckfire's failure to disclose potential conflicts did not violate Federal Rule of Bankruptcy Procedure 2014 or harm the bankruptcy estate. The court of appeals reversed the district court in part and concluded the bankruptcy court did not abuse its discretion by adjusting the fee for Miller Buckfire's services. It did, however, remand to the bankruptcy court for a determination of whether or not the failure of Miller Buckfire to disclose the potential conflict violated Rule 2014 and whether or not a penalty would be appropriate. On July 30, 2004, Citation hired, pre-petition, Miller Buckfire pursuant to an engagement letter to provide financial advisory and investment banking services necessary for potential restructuring. In the letter, Citation agreed to pay Miller Buckfire $150,000 upon execution of the letter and a restructuring fee of $3.5 million. According to the terms, Miller Buckfire would receive monthly payment of $150,000, which the parties agreed would be credited against the restructuring fee. Approximately 60 days later, on Sept. 18, Citation filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Northern District of Alabama. As the same time, Citation filed a retention application to retain Miller Buckfire as an employed professional of the estate. The bankruptcy court entered a retention order allowing Citation to retain Miller Buckfire under the terms of the engagement letter with one important caveat: the court specifically reserved the right to review the overall fee subject to the reasonableness standard codified in 11 U.S.C. Section 330. Miller Buckfire agreed to the retention order, including the reservation of the bankruptcy court's right to thorough review of its fee under 11 U.S.C. Section 330. Within five months of retaining Miller Buckfire, the bankruptcy court confirmed Citation's Chapter 11 restructuring plan. In its final fee application, Miller Buckfire sought approval of its restructuring fee of $3.5 million plus expenses. Specifically, Miller Buckfire sought approval of all fees Citation had paid Miller Buckfire to date ($1,189,622.90), and all expenses paid ($180,215.26), and the balance of $2,291,128.45. At the hearing on the fee application, the debtor argued that Miller Buckfire had a conflict of interest in its representation of Citation. Specifically, Citation alleged that Miller Buckfire failed to disclose its prior dealing with Kelso & Company, a private equity firm with a large equity interest in Citation. Furthermore, the debtor argued the services provided were much less extensive than originally expected and, as a result, Miller Buckfire's fee should be reduced. Regarding the conflict of interest, the bankruptcy court found Miller Buckfire did not suffer under a conflict of interest because it lacked final decision-making authority and was insulated from any potential influence by the unsecured creditors committee and its counsel. Regarding the fee, the bankruptcy court thoroughly reviewed 16 factors provided by the statute and relevant precedent and found "(1) the services originally anticipated were not actually required; (2) the hours expended were slightly excessive; and (3) the resulting hourly rate was also excessive." The court considered all the factors, including the lodestar, which requires a court to find a reasonable rate and then multiply that rate by the hours actually expended to benefit the estate to calculate an appropriate fee. The court approved fees in the amount of $2,137,500, or $750 per hour. On appeal, the district court affirmed the bankruptcy court's finding on the conflict of interest issue, but it reversed the court's determination of Miller Buckfire's fee. It found that the bankruptcy court was correct to consult the factors set out in 11 U.S.C. Section 330, but erred as a matter of law when it factored Miller Buckfire's hourly lodestar into its decision. The district court said, "[t]he bankruptcy court . . . is not free to transform a fixed rate contract, knowingly entered into by knowledgeable parties at arms length, into an hourly rate contract." The court instructed the bankruptcy court on remand to reconsider Miller Buckfire's fee application with the understanding that "the contract was a product of free and equal bargaining by sophisticated, knowledgeable parties, fixed rate contract are typical of the financial advisory and investment banking business, and the fixed-fee contract market rate for investment bankers in similar transactions is the appropriate benchmark." The court further instructed that the only circumstance that would warrant a reduction from contracted-for fee would be evidence that Miller Buckfire did not perform its duties under the contract. Citation appealed. The appellate court should reverse the bankruptcy court's decision if it applied an incorrect legal standard, failed to follow property procedures or made factual findings that were clearly erroneous. The court pointed out the distinction between the determination of fees under 11 U.S.C. sections 327-330. In particular, Section 327 allows the trustee, with the bankruptcy court's approval, to employ a professional who has represented the debtor "for a specified special purpose . . . if in the best interest of the estate." Section 328 provides that the trustee employ a professional under Section 327 "on any reasonable terms and conditions of employment, including a retainer, on an hourly basis, or on a fixed percentage fee basis, or on a contingent fee basis." Section 328 further points out that the bankruptcy court "may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions." Absent pre-approval under Section 328, the bankruptcy court awards a professional "reasonable compensation for actual, necessary services rendered" based on "the nature, the extent, and the value of such services," and considering the time spent on such services, and the cost of comparable services. The distinction between sections 328 and 330 affect the timing and process of the court's review of fees. Under Section 328, the bankruptcy court reviews the fee at the time of the agreement and departs from it only if some unanticipated circumstance makes the terms of the agreement unfair. Under Section 330, the court reviews the fees after the work has been completed and looks specifically at what was earned, not at what was bargained for at the time of the agreement. Bankruptcy professionals are aware that the amount of any professional's fees will be less certain if the bankruptcy court awards fees under Section 330. Such uncertainty prompted Congress to enact Section 328 to allow professionals greater certainty as to their eventual payment. In this case, the bankruptcy court specifically reserved the right to ward Miller Buckfire fees pursuant to Section 330. The parties sought retention under the more deferential Section 328, but the court specifically noted that Section 328 would not allow it "the opportunity to fairly review [Miller Buckfire's] application and to pay them as they ought to be paid." Miller Buckfire objected, but it still entered into the agreement to continue to provide services. The court of appeals stated that the district court put too much emphasis on the existing contract as entered into the time of retention. The court should not place the same emphasis on the contract when the bankruptcy court is reviewing the fee pursuant to Section 330. The contract with the trustee specifically reserved the court's right to review the fee request pursuant to Section 330. Miller Buckfire choose to perform its service with knowledge that its fee be reviewed for reasonableness pursuant to Section 330. Therefore, the district court was incorrect to attach such weight to the original contract. The appellate court pointed out that the ultimate issue is whether it was appropriate for the bankruptcy court to consider a lodestar analysis in determining what Miller Buckfire earned when it reviewed fees under Section 330. The Statute instructs the court to look at: "the nature, the extent, and the value of such services," as well as the time spent on such services, and the cost of comparable services in other cases. Specifically, the relevant factors in making such a determination include the following: The time spent on such services; The rates charged; Whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; Whether the services were performed within a reasonable amount of time commensurate with the complexity, importance and nature of the problem, issue or task address; and Whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title. Four of the five required statutory factors direct a bankruptcy court to examine the amount of time spent on either the project as a whole or to examine the time spent on individual units of the professional's work. The lodestar method is one way to ensure every unit of the professional's work is valuable to the completion of the Chapter 11 case. Therefore, it is appropriate for a bankruptcy court to use a lodestar analysis to review an investment bank's fees for reasonableness. The 10th Circuit agreed in a factually similar decision discussing Section 330's applicability to investment banks, Houlihan Lokey Howard & Zukin Capital v. Unsecured Creditor's Liquidating Trust (In re Commercial Fin. Services Inc.) In reviewing the bankruptcy court's decision, the 10th Circuit looked to the text of Section 330, which requires bankruptcy courts to "consider the nature, the extent, and the value of such services." The court agreed with the 10th Circuit in that the Section 330 factors require a court to examine the amount of time spent on either the project as a whole or on individual units of the professional's work. Therefore, it held an "adjusted lodestar analysis" was an appropriate way to determine an investment bank's reasonable fee. The court pointed out that Section 330 and the Bankruptcy Code as a whole have an "overriding concern for keeping administrative expenses to a minimum so as to preserve as much of the estate as possible for the creditors." Because the lodestar methodology is aimed at uncovering which specific activities benefited the estate, it is not improper to consider it in awarding a professional a reasonable fee pursuant to Section 330. Having decided that using a lodestar analysis to determine a reasonable fee under Section 330 is not inappropriate, the only other objection to the bankruptcy court's fee award is that it is unreasonable. The fee award is reviewed because of an abuse of discretion. The bankruptcy court's refusal to award Miller Buckfire a fee of over $1,000 per hour when it found "(1) the services originally anticipated were not actually required; (2) the hours expended were slightly excessive; and (3) the resulting hourly rate was also excessive" did not constitute an abuse of discretion. Its findings of fact were not clearly erroneous, it followed proper procedures, and it applied a correct legal standard, so the bankruptcy court determination of a reasonable fee was affirmed. In the issue of conflict, it was admitted that Miller Buckfire failed to disclose its past dealing with certain members of Citation's board of directors, a violation of Bankruptcy Rule 2014(a), which states, "The application shall be accompanied by a verified statement of the person to be employed setting forth the person's connections with the debtor, creditors, any other party in interest, their respective attorney's and accountants . . . ." There was no specific finding that the failure to disclose this information rose to the level of actual conflict or posed a threat of a potential conflict. The court of appeals emphasized that it is the bankruptcy court, not the professionals, that must determine which prior connections rise to the level of an actual conflict or pose the threat of a potential conflict. To the extent Miller Buckfire failed to disclose its prior dealing, it violated Rule 2014. However, it is not clear what type of penalty should be applied. Neither Rule 2014 nor the Bankruptcy Code mandates a sanction for the rule's violation. The decision to impose a penalty and the nature and extent of the penalty is generally a matter left to the bankruptcy court. Since the bankruptcy court did not specifically address the violation, the matter was remanded to that court for further consideration. Clearly, a professional would rather have its fee fixed under Section 328 as opposed to Section 330. Under the present case, the professional allowed the order to be entered to give the bankruptcy court authority to review the fee under Section 330. Obviously, this was a decision that did not favor the professional. The issue of potential conflict of interest and violation of Rule 2014 was and is a matter of concern for Bankruptcy Court. Most professionals fail to understand the continuing obligation to disclose the potential conflicts and conflicts do not cease upon the court approval of employment. The bankruptcy court has broad latitude in determining the effect of the violation of Bankruptcy Rules of Procedure. Professionals and their counsel should be vigilant during the case to make the parties and the court aware of any potential problems.
Author: Michael E. Bertin Posted: August 14, 2007
In the recent case of Mencer v. Ruch, the Superior Court held that the income from a supplemental needs trust created pursuant to New York state law from the proceeds of a personal injury action should be considered income for child support purposes. Mencer, mother of Elizabeth (born Feb. 18, 2003), filed a support action on April 3, 2003, against putative father, Gary Ruch. Genetic testing established that Ruch was Elizabeth' At the time of the support conference on Mencer's support action against Ruch, he was on public assistance in New York and had applied for Social Security disability. Because Mencer had no knowledge of any other sources of income for Ruch other than his public assistance in New York, on July 11, 2005, the parties reached an agreement that Mr. Ruch's support obligation would remain at zero unless he became eligible for Social Security disability, "in which case a support order would be entered and made retroactive to April 3, 2003." On May 19, 2006, a review conference was held regarding Mencer's support action. Both parties were present and represented by counsel at the conference. At that time, Ruch remained on public assistance, and his claim for Social Security disability benefits was still unresolved. At the conference, Mencer established Ruch was the beneficiary of the supplemental needs trust created for him in New York. Ruch claimed at the conference that the amounts that he received from the trust should not be considered income for purposes of child support. On May 31, 2006, the hearing officer entered "another nonmonetary award that could be modified retroactively if Mr. Ruch's claim for Social Security disability benefits was eventually approved." Mencer appealed the hearing officer's recommendation and requested a hearing before the trial court "based upon her position that the income and principal of the trust should be included in [Mr. Ruch's] income available for Elizabeth's support." At the Aug. 16, 2006, hearing before the trial court, Ruch presented telephone testimony of a New York attorney who indicated that the trust was a "supplemental-needs trust" created pursuant to New York state law from the proceeds of the personal injury action that allows a disabled person to keep trust distributions without disqualifying a beneficiary from receiving governmental benefits. The trustee of a supplement-needs trust is not permitted to make distributions "that do not benefit the beneficiary directly but will pay for housing and other items that enhance the beneficiary's life." Interestingly, when Ruch's supplemental- needs trust was set up, child support arrearages had accrued prior to 2001 for another child born to another woman were paid from Ruch's personal injury proceeds and that mother received child support payments of $208 per month from the trust for one year until the child reached age 18. As of the date of the hearing, after the purchase of an annuity that provides monthly income to the special needs trust in the amount of $678.82, the trust had a principal balance of approximately $55,000. At the hearing before the trial court, the following evidence was produced: Ruch receives public assistance from the state of New York of approximately $350 per month. He had been denied Social Security disability benefits but had appealed that decision. During the prior school year, Ruch worked as a crossing guard for $25 a day. He decided to cease that employment because it reduced the amount of public assistance that he received. From July 2004 to July 2005, the special-needs trust distributed $19,145.80 to Ruch, and from July 2005 to July 2006, it distributed $16,729.12 to him. Among other items, the special-needs trust has paid for Ruch's cellular telephone and cable television service. Mencer testified that she earns $8 per hour and qualifies for subsidized daycare of $30 per week for Elizabeth. Due to her meager earnings, she experiences difficulty feeding and clothing her child. After the hearing, the trial court entered and order on Sept. 1, 2006, adopting the hearing officer's order. Mencer filed a timely appeal of that order presenting three issues for review: Whether the trial court erred in failing to assess income to Ruch for purposes of child support from distributions that he receives from his supplemental needs trust; Whether the trial court erred in failing to assess income to Ruch for purposes of child support in the amount of the principal of Ruch's supplemental-needs trust; and Whether the trial court erred in failing to assess an earning capacity to Mr. Ruch. The Superior Court held that the trial court misapplied the law by failing to consider as income the distributions made by the trust for Ruch's benefit and neglecting to calculate Ruch's child support obligation based on his earning capacity. The Superior Court reiterated: "[e]ach parent has an absolute obligation to support a child, and that obligation 'must be discharged by the parents even if it causes some hardship.' . . . The principal goal in child-support matters is to serve the best interest of the children through the provision of reasonable expenses." In determining each party's income available for support, "[t]he court must consider all forms of income." The Superior Court cited the very broad definition of "income" as it is applied in support cases. Ruch contended that any payments made from the trust for his benefit "are not income for child support purposes because he has no ability to control the payments." The Superior Court rejected his position because the definition of income is "simply not dependent upon whether the recipient has the ability to control receipt of that income." The Superior Court further highlighted that other forms of income, such as employer-provided perquisites "are considered income, yet the recipient has no control over his receipt of the sums paid on his behalf." The Superior Court further stated: "Section 4302 expressly provides that income from an interest in an estate or trust is income for child support purposes. . . . The fact that the instant trust was created under state law rather than a private trust instrument is irrelevant. Simply put, the fact that [Ruch] has no ability to control his receipt of funds is not pertinent to whether the payments made for his benefit are income." The Superior Court stressed that there is no "limiting phrasing" in the statutory language that requires a person to have control over his or her receipt of money in order for it to be included in the definition of income. "The definition is expansive rather than restrictive." Therefore, the Superior Court found the distributions that Ruch receives from the trust to be income since it falls within the legal definition of income under Pennsylvania law. Interestingly, Ruch also claimed that the distributions could not be used in calculating child support because the trustee is not permitted to pay child support from the trust under applicable New York law, "which allows distributions from a special-needs trust only for the benefit of the beneficiary." However, the Superior Court held that the actual distributions from the trust to Ruch are income for purposes of calculating Ruch's support obligation and that Ruch, rather than the trustee, is obligated to pay the child support. Because the Superior Court agreed with Mencer's first issue on appeal it found that her second issue became moot. The Superior Court held that though Mencer's second issue on appeal that the proceeds of a personal injury action should be considered income available for support "is in accordance with prevailing law," because the distributions from the trust are being considered income for support purposes, "the same money can not be included twice in [Ruch's] child-support obligation; the actual trust distributions on [Ruch's] behalf are more than the result of the calculation achieved by annualizing the settlement over the life of [Ruch's] support obligation." Lastly, with regard to Mencer's third issue on appeal, regarding earning capacity, the Superior Court found that Ruch's admission that he was actually working as a crossing guard and voluntarily terminated his employment because it would result in a reduction in welfare benefits established his capacity to work as a crossing guard and earn some "modicum of money to support the child he has fathered." Therefore, the Superior Court held that the distributions pursuant to the trust were income for support purposes and that Ruch should be attributed an earning capacity in line with his prior job as a crossing guard. At the conclusion of its opinion, the Superior Court stated: "[w]e feel compelled to make a closing observation. While we sympathize that [Ruch] may have a limited capacity to earn money, he acknowledged an ability to work at least a few hours a day as a crossing guard. Instead, he chose to do nothing, while enjoying the benefits of cable television and a cellular telephone, yet [Mencer] struggles to feed and clothe their child. This is a child he fathered after he suffered his head injury, which evidences an ability to perform at least some physical functions." The Superior Court then reversed the trial court's order and remanded the proceedings consistent with their opinion. This case is a reminder that the definition of income for support purposes is very broad. Further, this case reminds the practitioner that though a party may be disabled, his or her obligation to provide some form of support to his or her child will remain. Because the courts will regularly look to the past to predict the future with regard to uncertain and inconsistent income, obligors, such as Ruch (who cannot predict what his trust income/distributions will be each year), may petition to modify the support order at the end of a year if a substantial fluctuation to his/her income occurred in that year.
Author: Charles M. Golden Posted: July 13, 2007
The debtor, Premier Automotive Services Inc., was a tenant on a lot known as Lot 90 for more than 40 years at the Dundalk Marine Terminal on the Baltimore waterfront owned by the Maryland Port Administration (MPA). The debtor is an import-export motor vehicle company that processes trucks, as well as heavy military, agricultural and construction equipment through Dundalk Marine Terminal.
Posted: June 12, 2007
The case of Bonawits v. Bonawits marks the first time the Superior Court of Pennsylvania has been faced with a bifurcation action under the amended Pennsylvania Divorce Code. A "bifurcation" or "bifurcated divorce" occurs when a trial court enters a decree of divorce or annulment prior to the final determination of property rights and interests between the parties.
Author: Charles M. Golden Posted: June 8, 2007
Does a debtor's pre-bankruptcy application of its right to a tax refund to a post-bankruptcy tax obligation constitute as an asset of the bankruptcy estate? The answer to this question was determined by the 9th U.S. Circuit Court of Appeals in In re James Nichols; Beverly Ann Nichols, Plaintiffs-Appellants v. David A. Birdsell, Defendant- Appellee, in an opinion filed May 9.
Author: Charles M. Golden Posted: May 4, 2007
The court's responsibility in evaluating professional fees and costs was explained in detail in the recent U.S. District Court for the District of Delaware matter of In re Armstrong World Industries Inc., et al. The underlying facts in this matter deal with professional fees for the preparation and hearing on the Fourth Amended Plan of Reorganization. Fee applications were submitted to 13 professionals and/or firms. The court, once the applications and objections were submitted, enlisted the aid of an auditor to review the fee applications, consistent with the handling of the past fee applications. The fee auditor reviewed the petitions with a fine-toothed comb, analyzing every line to determine the extent to which the petitioners were entitled to the requested fees and reimbursement of expenses. The fee auditor prepared final reports addressing the fee petitions in connection with the hearing on the Fourth Amended Plan of Reorganization of the 13 professionals and/or firms. Three firms objected to the fee auditor's final determination. The court reviewed the fee auditor's reports, as well as the fee petitions that were the subject of those final reports. On March 22, 2007, after notice was given, the court held a hearing at which all parties were given the opportunity to comment on the fee applications, the fee auditor's reports and, in the cases where the professionals disagreed with the fee auditor's determination, to explain the reason for their objection and to further determine whether the fee applications met the criteria of 11 U.S.C. Section 330(a). In the opinion, District Court Judge Eduardo C. Robreno stated that the Bankruptcy Court not only has the power, but also the duty to independently scrutinize these applications to ensure that such fee applications comport with Section 330(a), according to In re Busy Beaver Building Centers Inc. This duty stems from "the court's inherent obligation to monitor the debtor's estate and to serve the public interest" and "exists notwithstanding an absence of objections by the United States Trustee, creditors, or any other interested party," according to 11 U.S.C. Section 105(a). The court divided the fee applications into two categories: those that agreed with the fee auditor's final recommendations, and those that objected to the proposed reductions. Regarding the 10 petitions that were not objected to, the court was satisfied that the fee recommendations advanced in the fee auditor's final report with respect to the petition reflected reasonable compensation for actual, necessary services and reimbursement of actual and necessary expenses. Regarding the three applications that were objected to, one of the firms ultimately entered into negotiations with the U.S. Trustee and compromised on an appropriate fee reduction. The court overruled the objectors in a situation in which the auditor recommended fee reduction of $17,876 for what the fee auditor believed was unnecessary attendance of two professionals at the hearing for confirmation. The court, in citing In re Jefsaba Inc., stated that when multiple professionals bill for the attendance at the same proceeding, the court must be mindful of the necessity of each person. In the present case, the applicant had five professionals - consisting of one testifying expert and four supporting professionals - attend the confirmation hearing. The fee auditor approved the payment of the requested fees for the attendance of the testifying witness and two of the four supporting professionals. The issue is whether the two other supporting professionals should also be compensated for their attendance at the confirmation hearing. The court found the applicant's response unpersuasive. Once the expert was on the stand, none of the professionals were able to aid the expert in her testimony, and the court found that the two additional experts' attendance at the confirmation hearing on "stand-by basis" was not a "necessary service." Furthermore, the court held that the applicant did not carry its burden or show why the attendance of four professionals was necessary. The remaining objector was a law firm, and the auditor recommended a reduction of $2,075.08 in expenses incurred for meals and snacks served while its teams worked in "war rooms" in preparation for the hearing. The fee auditor considered certain meal charges incurred while the teams worked in the "war rooms" to be excessive. For example, each pot of coffee for the morning breakfast cost $65. The court pointed out that exorbitant food prices, such as these, pushed the firm above the recommended ceiling of $15, $25 and $50 for breakfast, lunch and dinner, respectively. In addition, the fee auditor found that charges for mid-afternoon snacks were also unnecessary. The court should reimburse expenses only to the extent that they are "actual" and "necessary," according to 11 U.S.C. Section 330(a)(1)(B). This reflects Congress' intent to exclude unreasonable or excessive expenses. Despite the law firm's insistence that all the meals provided to its teams while in the "war rooms" were handled in a cost-effective way, the court was simply unable to classify these exceedingly high expenses as reasonable, and therefore they were not necessary under Section 330(a)(1)(B). The court pointed out that it is mindful of the importance of its duty to independently scrutinize fee petitions. It stated that it further felt the recommendations of the fee auditor were appropriate and fell within the mandate of Section 330(a), and so they were approved. Courts have continually and consistently reviewed fee applications to independently evaluate such a request. Counsel, in preparation of such fee applications, should be mindful of the criteria of actual and necessary costs and avoid excessive charges that, from time to time, can only cause an embarrassment to the applicant. Clearly, if law firms' and professionals' commercial clients would be unwillingly to pay these charges, it would be unconscionable to request the Bankruptcy Court to approve that which is inconsistent with normal business practices of the firm.
Author: Jason E. Reisman Posted: April 1, 2007
This article was published in the April 2007 issue of SuperVision, The Magazine of Industrial Relations and Operating Management.
Author: Charles M. Golden Posted: March 30, 2007
Where a lease has been rejected under 365(a), can the debtor prorate the payment obligations as of the date of the rejection of the lease? The answer to this question was given by the 3rd U.S. Circuit Court of Appeals in the matter of Federal-Mogul Global Inc., T&N Limited v. Computer Sales National Inc. in a decision rendered March 15.
Author: D. Alexander Barnes Posted: March 30, 2007
Who Cares About Health Care? The Newly Created Role of the Patient Care Ombudsman by D. Alexander Barnes was published March 3, 2007 in the Bankruptcy Supplement of the Pennsylvania Law Weekly and the Legal Intelligencer.
Author: Charles M. Golden Posted: February 23, 2007
Are portions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) as applied to attorneys unconstitutional? The answer to these questions were determined by the U.S. District Court of Minnesota in the matter of Milavetz Gallop & Milavetz P.A., Robert J. Milavetz, Barbara N. Nevin, John Doe, and Mary Doe v. United States of America decided Dec. 7 in an opinion signed by U.S. Chief District Judge James M. Rosenbaum. The court struck down the provisions of the BABCPA that apply to attorneys and advertising. The BAPCPA was signed into the law April 20, 2005, and became effective Oct. 17, 2005. Among its terms, BAPCPA defines a new category of bankruptcy service provider called a "debt relief agency," according to 11 U.S.C. Section 101(12A)(2005). The law forbids debt relief agencies from doing certain things, and requires them to do others. This present lawsuit challenged a number of these provisions. BAPCPA bars a debt relief agency from advising a client to "incur more debt in contemplation" of a bankruptcy filing. It further requires that debt relief agencies’ advertisements declare: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code," or a substantially similar statement. The plaintiffs in this case are bankruptcy attorneys, their law firm and two unnamed members of the public. Their attack on the statute is based on the First Amendment to the U.S. Constitution. The plaintiffs alleged that BAPCPA’s debt relief agency provisions are unconstitutional as applied to them. In filing the action, they initially claim BAPCPA’s regulation of attorney advice violates the First Amendment. Second, they claim BAPCPA’s advertising requirements contravene the First Amendment. Finally, they contend Congress did not intend the debt relief agency requirements to apply to attorneys. The government moved to dismiss the plaintiffs’ First Amendment claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court denied the government’s motion. The court pointed out that in Rule 12(b)(6), motion to dismiss must be denied unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. As to the issue of attorney advice, the plaintiffs argued that the statute in Section 526(a)(4) titled "Restrictions on Debt Relief Agencies" had "a chilling effect upon lawyers" in violation of their First Amendment rights. Section 626(a)(4) states: "A debt relief agency shall not . . . advise an assisted person or prospective assisted person or prospective assisted person to incur more debt in contemplation of such person filing a case under this title or to pay an attorney or bankruptcy petition preparer fee or charge for services performed as part of preparing for or representing a debtor in a case under this title." The government and the plaintiffs disagree as to the standard of review applied to the constitutional analysis of this section. The plaintiffs claim the standard review for a restriction on lawful and truthful attorney advice is strict scrutiny. The government replies that Section 526(a)(4)’s restrictions are merely a species of ethical regulation, invoking the more lenient standard outlined in Gentile v. State Bar of Nev. The government argued that under the Gentile case, the court would balance the First Amendment rights of attorneys against the government’s legitimate interest in regulating the activity in questions, and then determine whether the regulations impose "only narrow and necessary limitations on lawyers’ speech." The court rejected the government’s proposed standard, stating the "ethical rule" of which the government speaks appears to exist only in its pleadings; the statute discloses no quasi-religious or ethical principle. The government "cannot foreclose the exercise of constitutional rights by mere labels," according to NAACP v. Button. A review of the section indicates that certainly nothing in the rule alluded to ethics. The section is titled "Restrictions of debt relief agencies" and plainly prohibits certain acts. The advice the section foreclosed may be potentially advantageous to creditors, but this does not make it equivalent to ethics either in logic or in law. The court pointed out that Section 526(a)(4) is a content-based regulation of attorney speech — it restricts attorneys from giving particular information and advice to their clients. Attorneys are forbidden to advise their clients concerning an entire subject — incurring more debt in contemplation of filing for bankruptcy. This is a plain regulation of speech. Beyond this, the forbidden speech trenches on two other important areas of concern. First, the lawyer’s advice to take on certain additional financial obligation in contemplation of bankruptcy may well be in the client’s best interest. Here, the court pointed out that the highest duty is to the client and the statute’s forbidden advice may indeed be helpful to the client. Second, this statute does not restrict false statements — arguably implicating some "ethical" precept — it forbids truthful and possibly efficacious advice. It this is the government’s view of legal ethics; it is a form of ethics unfamiliar to the court. The court cited the U.S. Supreme Court in Turner Broad. Sys. v. FCC, stating "[g]overnment action that stifles speech on account of its message, or that requires the utterance of a particular message favored by the Government, contravenes th[e] essential [First Amendment] right[s]" of private citizens. For this reason, "government control over the content of messages expressed by private individuals" is unconstitutional except in narrow circumstances. The court found that since Section 526(a)(4) is a content-based restriction on protected speech, it is subject to strict scrutiny. Such a restriction can only survive if it is narrowly tailored to achieve and a compelling state interest., according to United States v. Playboy Entm’t Group Inc. The district court found that the government has failed to meet its burden on the first point: Section 526(a)(4) is not narrowly tailored. The government suggests Section 526 (a) (4) advances compelling interest. First, it asserts an interest in protecting creditors; second, it claims Section 526(a)(4) protects debtors from attorneys who might lead them to abusive practices that could ultimately result in a denial of discharge. Third, the government argues that Section 523(a)(2)(c) protects the integrity of the bankruptcy system. Even if the court assumes the asserted interests are compelling, the restrictions are not narrowly tailored. The government claims the section is narrowly tailored because "it does not limit more speech that is necessary to accomplish this purpose." The court stated that the government was mistaken. The court, in its opinion, stated that the attorneys have a First Amendment right — let alone an established professional ethical duty — to advise and zealously represent their clients. Section 526(a)(4) bars an attorney from advising a client to incur any kind of debt, including legitimate debt, in contemplation of bankruptcy. The lawyer has no duty to assist creditors, who are scarcely without their own resources, and may indeed have contributed to the potential bankrupt’s straits by making credit easy to obtain. The attorney’s only duty is to the client, and to the law. Despite what the statute says, incurring debt on the eve of bankruptcy can scarcely be considered malum in se. To the contrary, for some individuals incurring further obligations, even those that must be adjusted or set aside in bankruptcy may be financially prudent. If the client intends to reaffirm the debt after filing of bankruptcy, there is no prejudice to the bankruptcy process. BAPCPA’s Section 526(a)(4) limitation in speech extends beyond any need to protect the bankruptcy process. A lawyer who represents consumers contemplating bankruptcy bears the duty of zealous representation. Conversely, Congress does not have the power "to effect [a] serious and fundamental restriction on advocacy of attorneys," according to Legal Serv. Corp v. Velazquez. The court further pointed out that this law would prevent lawyers from adequately and competently advising their clients. As such, it unconstitutionally impinges on expressions protected by the First Amendment. On the issue of advertising, the plaintiffs challenged the statutes disclosure requirements, claiming Section 528 violates their First Amendment rights. The section requires the class, termed "debt relief agencies," to include particular, or substantially similar, language in their advertisements. Congress has prescribed what particular agencies should state. Here again the court must determine the appropriate standard of review. The choice turns on whether the statute regulates deceptive or truthful advertising. Statutes regulating deceptive commercial speech need only to withstand rational basis review, but restrictions on nondeceptive advertising must employ means that directly advance a substantial government interest. The government argued that the statute regulates deceptive advertising, and the plaintiff responded that when Congress imposed these requirements on all advertisements of bankruptcy assistance, it mandated a blunderbuss that strikes truthful, as well as false or deceptive advertising. The court agreed. With few exceptions, any party advertising debt relief must include the Section 528 statutory statement. The lawyer-plaintiffs, in this matter, advertise themselves as bankruptcy attorneys in newspapers, telephone directories, television, etc. There is no evidence suggesting bankruptcy assistance advertisements are deceptive in any regard. Even assuming some debt relief agencies advertise an ability to make "debts disappear," there is no showing such advertising is deceptive. Under these circumstances, the court finds it appropriate to analyze this question by applying intermediate scrutiny. The court pointed out in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio and similar cases indicated that the government may only regulate truthful bankruptcy assistance advertisements if the regulation directly advances a substantial government interest and is "narrowly drawn." The court found that BAPCPA’s Section 528 advertising requirements fail to directly advance the government’s purported substantial interest and are not narrowly drawn. The term "debt relief agency" is simply a legislative contrivance. Furthermore, the court indicated the public is more likely to be confused by an advertisement containing this Congressionally invented term than one that advertises the services of a bankruptcy attorney. Furthermore, the term "debt relief agency" is almost all encompassing. The court pointed out that such language instantly swallows all persons who engage in "bankruptcy assistance," attorneys and non-attorneys alike. Congress’s merger of attorneys and non-attorneys is, itself, likely to confuse the public. This confusion fails to directly advance the government’s stated interest in clarifying bankruptcy service advertisements. The plaintiffs asked the court to find attorneys beyond the scope of a BAPCPA "debt relief agency." According to the statute, "[t]he term ‘debt relief agency’ means any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer under Section 110." This section makes no direct reference to either "attorney" or "lawyer." It does include the term "bankruptcy petition preparer," which, by definition, expressly excludes attorneys and their staff. The plaintiffs argued the omission of any reference to attorneys or lawyers, while including a term excludes attorneys, shows Congress must have intended to exclude attorneys for the "debt relief agency" definition. They also claim it would be absurd for attorneys to provide a statement telling their clients they have a right to an attorney and that only attorneys can provide legal advise as required for debt relief agencies under 11 U.S.C. Section 527(b). The government argued that the statute includes attorneys because legal representation is included in "bankruptcy assistance." The court pointed out that at first glance, this language might include attorneys. However, the glance is deceiving: the statute contains a rule of construction for the term "debt relief agency." The statute provides that nothing in sections 526, 527 and 528 — those sections imposing requirement on debt relief agencies – "shall be deemed to limit or curtail the authority or ability … of a State or subdivision or instrumentality thereof, to determine and enforce qualifications for the practice of law under the laws of that State." If lawyers are placed within the ambit of Section 101(4)(A), that placement conflicts with Section 526(d)(2)(A). The conflict exists because states would be deprived of their ability "to determine and enforce qualification for the practice of law." If the present statute would apply to attorneys, it means Congress has taken upon itself the authority to determine the advice attorneys can give their clients and what attorney advertisements must say, thereby infringing on the state’s traditional role of regulating attorneys. In Leis v. Flynt, the Supreme Court held "since the founding of the Republic, the licensing and regulation of lawyers has been left exclusively to the States." This view, according to the district court, is supported by the doctrine of constitutional avoidance, which specifically provides that in construing a statute for ambiguity, the court must opt for construction that avoids grave constitutional questions, according to Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council. The court stated "a clear ambiguity in this statute — on one hand it appears to regulate a lawyer’s practice; on the other, such regulation is specifically reserved to the states." This section is clearly unconstitutional as it applies to attorneys and the court found sections 526, 527 and 528 do not apply to attorneys. This is one of several attacks on the much discussed Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Other states have determined that attorneys are not subject to this restriction, including the Southern District of Georgia in 2005. As this BAPCPA statute makes its way through district courts and appellate courts, lawyers can expect more and more challenges to what many consumer attorneys believe are the overbearing provisions of the statute. Clearly, the next several years will provide more detailed guidance for those who are involved in consumer bankruptcies.
Author: Jason E. Reisman Posted: February 23, 2007
This article, co-authored by Jason Reisman, was published in BNA Inc.'s Workplace Law Report, February 23, 2007 issue.
Author: Michael E. Bertin Posted: February 13, 2007
The recent Superior Court case of Masser v. Miller is an interesting case because it covers a number of issues, such as the denial of an intrastate relocation petition, the weight to be given to custody evaluations and the court's power to modify a custody schedule sua sponte. In Pennsylvania, since the seminal case of Gruber v. Gruber, family law practitioners often wonder whether there is a "trend" in child custody relocation cases of courts applying the "Gruber test" as the genesis for either granting or denying petitions for child relocation or whether the courts are focusing primarily on the child's best interests. The Superior Court in Gruber set forth three factors to be applied when a parent seeks to relocate with a child: The potential advantages of the proposed move, economic or otherwise, and the likelihood that the move would improve substantially the quality of life for the custodial parent and the children and is not the result of a momentary whim on the part of the custodial parent; The integrity of the motives of both the custodial and noncustodial parent in either seeking the move or seeking to prevent it; and The availability of realistic, substitute visitation arrangements that will foster adequately an ongoing relationship between the child and the noncustodial parent. Since Gruber, there has been a noticeable evolution toward applying the Gruber factors within the best-interest-of-the-child analysis. It is satisfying to know that the courts repeatedly state that "the best interest of the child" is the primary concern in relocation actions. Because a child relocation action is a "custody action" it is logical that the best interest of the child analysis is the primary factor to be applied by the court. Interestingly, when a court is faced with an intrastate relocation action, the rules of the game change slightly. In Masser, the court reiterated that the Gruber analysis is optional when an intrastate relocation petition is before the court. Christine Miller, the mother of Kaytlyn Miller in the Masser case, petitioned the court to relocate from Schuylkill County across county lines to Dauphin County (approximately 45 minutes away). The trial court denied Miller's petition to relocate and the court affirmed the trial court's decision. Miller and Derrick Masser (the father) were never married. On April 27, 1995, the parties entered into a stipulation providing that Miller had primary physical custody of Kaytlyn and Masser had partial physical custody. On July 29, 2004, Miller filed a petition to modify custody and requested permission from the court to relocate from Schuylkill County to Dauphin County. On Sept. 29, 2004, the trial court ordered a home and custody evaluation and ordered further conciliation conferences. "Prior to the trial, [Miller] who had and has a home in Hegins Township, Schuylkill County, purchased another home in Hummelstown, Dauphin County, where she desires to move Kaytlyn. [Miller] is employed as a registered nurse for Hershey Medical Center. She stays at home in Hummelstown on occasion, and at other times, she stays in her Hegins home. Apparently, in anticipation of moving Kaytlyn's primary residence, [Miller] transferred much of Kaytlyn's personal property to Hummelstown. [Miller]'s mother and her husband also stay at [Miller]'s Hegins home, having moved there rather recently, also, apparently in anticipation of [Miller]'s move of Kaytlyn." Miller worked on a part-time basis. Masser is employed by Thermal Dynamics in Schuylkill Haven as a welder, where he generally works five days per week, Monday through Friday. Though Miller has primarily cared for Kaytlyn, Masser has exercised additional periods of custody outside of the current custody schedule. "Kaytlyn has become close emotionally to Masser's wife and her family, the latter of which also provides care for Kaytlyn. Kaytlyn has a particularly close relationship with brother, Devon." A custody evaluation was conducted and the evaluator "opined that [Miller] should be allowed to move Kaytlyn from Schuylkill County. He concluded that the move would not negatively impact the relationship of Kaytlyn and [Masser], and that there were, in effect, two families - [Miller's] and [Masser's] with Kaytlyn being more a part of [Miller's] family, rather than [Masser's] family." After the hearing, the trial court denied Miller's request to relocate and modified the existing custody order increasing Masser's partial physical custody. Miller appealed and raised the following issues: Did the trial court err in abusing its discretion by denying Miller's request that she be permitted to relocate her daughter across the county line, and did the trial court properly apply a Gruber analysis in doing so? Did the trial court err and abuse the discretion by totally rejecting the recommendation of the court appointed psychologist in formulating the court's decision that Miller should not be permitted to relocate across the county line to Dauphin County, by placing a significant emphasis on the child's preference in denying Miller's request that she be permitted to relocate? and Did the trial court err in abusing its discretion by not only denying Miller's request that she be permitted to relocate across county lines, but significantly modifying an existing custody order, and reducing the child's amount of time with Miller, although father had not filed his own petition to modify, and was it in the best interest of the child to significantly reduce the amount of time she will be spending with her mother in response to [mother]'s petition to relocate? The Superior Court stated: "Though the Gruber test was originally applied to out-of-state relocations, we have held that the trial court may, in its discretion, apply the Gruber analysis to intrastate moves." In citing the Superior Court case of B.K. v. J.K., the court stated: "The determination of whether Gruber is appropriate should lie within the discretion of the trial court while being mindful of geographic distance and whether that distance is significant enough to alter the relationship between the noncustodial parent and the children, as well as the relocation entails different educational, cultural and religious facilities, and whether or not the same trial court would retain jurisdiction over the children." The court found that the trial court exercised its discretion and applied the Gruber test and performed a best interest of the child analysis before denying Miller's request to relocate. In summarizing the trial court's findings under the Gruber test, it stated: "[T]he evidence did not indicate that the move would improve substantially, or otherwise, the quality of life for [Miller] or Kaytlyn, nor, in light of the actual circumstances in this case, that realistic substitute custodial arrangements could be arranged to foster the type of relationship between father and Kaytlyn. Simply put, the basis for the move - the decrease in commute time to work for [Miller] by about 40 minutes, which allegedly would allow [Miller] to spend more time with Kaytlyn upon [Miller] changing her work schedule, was found not sufficient to justify the disruption in Kaytlyn's life, nor the significant negative impact which would result in Father's custodial rights, nor serve Kaytlyn's interests." The court, after reviewing the trial court's opinion, and order, found that the trial court did not abuse its discretion in its application of Gruber and the best interest analysis in denying Miller's request to relocate. In addressing Miller's second issue on appeal, regarding the trial court's decision not to follow the court appointed custody evaluator's recommendation, the Superior Court stated: "So long as the trial court's conclusions are founded in the record, the lower court is not obligated to accept the conclusions of the experts." The Superior Court further stated: "The significance placed on the preference of the child who is at the center of a custody dispute is similarly within the discretion of the trial judge." The final issue on appeal is interesting and important for practitioners to remember. This issue pertains to the trial court modifying the custody order increasing Masser's partial physical custody, even though Masser did not petition the court to modify the custody order. The court held: "The state Supreme Court has recognized that 'a custody judge may modify any existing custody order to a shared custody order sua sponte, or may decline to enter a custody order as agreed by the parents.' . . . The custody order entered by this court was based upon all of the evidence received at trial, including the parties' positions as to proposed custody schedules, the custody terms of the then-existing custody order, and the periods of custody actually being exercised by the parties - with the evidence establishing that father was exercising substantially more physical custody periods with Kaytlyn than provided in the [prior] court order." Because Masser exercised additional custody time with Kaytlyn outside of the custody order, the new order that the trial court entered was not very different from what the parties were actually exercising. Therefore, the Superior Court found that the trial court did not abuse its discretion when it modified the current custody schedule in the best interest of the child. This author wishes to stress that a sua sponte custody modification such as that in the Masser case is not permissible procedurally when a contempt petition is before the court and a petition to modify custody is not pending before the court as well. The theory behind this reasoning is that the litigants will not be on notice and prepared to litigate modification issues at that time with solely a petition for contempt pending. However, in cases such as Masser, mother's modification petition was before the court. Therefore, the parties were prepared for the order to be modified in some fashion. It is important for the family law practitioner to remember that whenever he or she is before the court on a custody-modification petition, the trial court may modify the order "upward or downward" because the court's sole concern is the child's best interest. It is to be noted that this is the second case in 2006 that came down from the Superior Court that denied an intrastate relocation petition. The other case was Speck v. Spadefore, where the mother in that case desired to move from York County to Butler County. Both Speck and Masser remind the practitioner that a proposed relocation within states lines is not a "slam dunk" - even when the expert is in favor of the move.
Author: Jason E. Reisman Posted: February 1, 2007
With the added attention to corporate investigations generated by the Hewlett Packard scandal, employers must re-focus on the proper handling of internal investigations of misconduct. An effective investigative process will protect the company from liability as well as promote employee morale. By Jason E. Reisman
Author: Tiffany L. McDonough Posted: January 2, 2007
Author: Paul N. Allen Posted: January 1, 2007
Significant changes in Pennsylvania's Mechanic's Lien Law will become effective on January 1, 2007. Paul N. Allen has prepared an outline summarizing the most significant changes from a property owner's perspective. Click on the title below to read this important information. Click here to read. Significant Changes in Pennsylvania's Mechanic's Lien Law
Author: Charles M. Golden Posted: December 8, 2006
Is a judgment entered for an attorney whose conduct is described as willful, wanton and a complete disregard for the court dischargeable? The answer to this issue was determined by the Sixth U.S. Circuit Court of Appeals in the matter of Randolph Hughes v. Neil Sanders II, decided Nov. 13.
Author: Charles M. Golden Posted: October 27, 2006
How long after confirmation does that bankruptcy court retain jurisdiction? This question was answered in the matter of EXDS Inc. v. CB Richard Ellis Inc., Highgate Holdings Inc. in the U.S. Bankruptcy Court District of Delaware in an opinion rendered on Oct. 13 by U.S. Bankruptcy Judge Peter J. Walsh.
Author: Michael E. Bertin Posted: October 10, 2006
The recent Pennsylvania Superior Court case of Fuehrer v. Fuehrer reminds the family law practitioner of the importance of an expert and a custody evaluation/assessment in relocation cases. In this case, the Superior Court vacated the trial court’s order granting mother’s petition to relocate from Westmoreland County, Pa., to the Netherlands.
Author: Joan M. Roediger Posted: October 1, 2006
This article was published in the October 2006 issue of the Physicians's News Digest. To read the article click on the title below.
Author: Charles M. Golden Posted: September 22, 2006
When does a customer become a lender? The answer to this question was determined by the 2nd U.S. Circuit Court of Appeals in the matter of New Times Securities Inc. and New Age Financial Services Inc. v. James Giddens, decided Sept. 7.
Author: Charles M. Golden Posted: August 11, 2006
Can a district court set aside an injunction entered as part of a confirmed Chapter 11 plan of reorganization? The answer to this question was determined by the 8th U.S. Circuit Court of Appeals in an opinion filed Aug. 4 in the matter of U.S. Commodity Futures Trading Commission v. NRG Energy Inc.
Author: Charles M. Golden Posted: July 7, 2006
Where a debtor agrees that a debt need not be paid until the creditor is profitable, does that indicate that the obligation is a capital contribution rather than an allowable claim? This issue was raised In re Official Committee of Unsecured Creditor for Dornier Aviation, et al. in the 4th U.S. Circuit Court of Appeals in an opinion rendered on June 27.
Author: Michael S. Pepperman, Thomas T. Hearn Posted: May 6, 2006
This article by Michael Pepperman and Thomas Hearn was published in the May/June 2006 issue of the Mid-Atlantic Builder. To read the article click on the title below.
Author: Michael E. Bertin Posted: May 5, 2006
The recent Pennsylvania Superior Court case of Speck v. Spadafore reiterates that in a child-custody relocation case the best interest of the child is paramount. The Superior Court vacated the trial court's order granting the mother's petition to relocate from York County, near Harrisburg, to Butler County, near Pittsburgh. In Speck, the parties, Christina Speck and Michael Spadafore, who were never married, had a child, Michael Spadafore Jr., on April 12, 1996. After the parties' relationship ended, they agreed to a custody arrangement that was memorialized in a court order. The order provided that the parties have shared legal custody of Michael Jr., with Speck having primary physical custody and the father having partial physical custody on every Monday, Wednesday and Friday from 2:30 to 7:30 p.m. and every other Friday from 2:30 p.m. until Saturday at 7 p.m. On April 6, 2005, Speck filed a petition to modify custody to allow her to relocate with Michael Jr. to Butler County to live with her fiancé. Spadafore opposed the relocation. The matter was heard by the trial court on June 27, 2005 and July 1, 2005. Testimony was taken from both parties, Speck's fiancé, Spadafore's live-in girlfriend of six years, Nancy, and Spadafore's two sisters. The trial court also interviewed Michael Jr. in the presence of counsel for the parties. At the conclusion of the trial, the trial court entered an order continuing shared legal custody and granted Speck primary physical custody and permission to relocate to Butler County with Michael Jr. Spadafore was granted partial physical custody of Michael Jr. in the summer months until two weeks before the start of Michael Jr.'s school. The order also provided that the parties were to alternate holiday weekends, Thanksgiving, Christmas and spring breaks from school. Spadafore appealed the trial court's order. The Superior Court has previously set out a three-prong test to be applied in child relocation cases in the case of Gruber v. Gruber. The three prongs are as follows:
Author: Joseph J. Centeno Posted: May 4, 2006
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Author: Charles M. Golden Posted: April 28, 2006
Does a creditor of the bankruptcy estate have standing to bring a claim on behalf of the estate? The answer to this question was determined by the 9th U.S. Circuit Court of Appeals by a decision rendered on April 12 in the case of Estate of Thelma V. Spirtos v. One San Bernardino County Superior Court, et al. The facts of this case are relatively simple. Basil and Thelma Spirtos were married in 1954. In 1983, the parties entered into a marital settlement agreement (MSA) that was reduced to judgment in 1984. Basil breached the agreement and Thelma filed for bankruptcy under Chapter 11. In 2001, the bankruptcy court converted the wife's Chapter 11 case to a Chapter 7 case. Basil subsequently remarried and in 1987 filed a Chapter 11 that was converted to a Chapter 7 and a trustee was appointed. Because of the husband's outstanding obligations to his wife under their MSA, she is a creditor of the husband's bankruptcy estate. In October 2002, the wife filed a "throw against the wall" type of complaint in which she sued nearly everyone involved in the bankruptcy and probate proceedings of her husband's estate, including the Chapter 7 trustee and the office of the U.S. Trustee. The complaint alleges various RICO claims and state causes of action. The substance of the wife's claims is that the defendants "have jointly conspired to conceal assets belonging to the bankruptcy and probate estates of Basil N. Spirtos for the purpose of obstructing the payment of the decedent's creditors and legal heirs." In July 2003, the district court granted the defendants' motion to dismiss. The district court ruled that those RICO claims derived from the administration of Basil's bankruptcy estate were being asserted on behalf of the bankruptcy estate, and that under 11 U.S.C. sections 323(a)(b) and 704, the bankruptcy trustee has the exclusive capacity to sue on behalf of the estate. Accordingly, the district court ruled that the wife lacked standing to bring those RICO claims and dismissed them. The district court also dismissed the rest of her RICO claims, which were based on the administration of the husband's probate estate, on the ground that abstention was appropriate under Younger v. Harris. The district court also ruled that Younger abstention was an alternative ground justifying the dismissal of the wife's claims against the husband's bankruptcy estate. The wife appealed the ruling of the district court. After the wife's appeal to the California Court of Appeals, the court ruled that she is not a creditor of the probate estate because she failed to properly perfect her claim under California probate law. Thelma brought the RICO claims based on both the administration of the bankruptcy estate and the administration of the probate estate. She is without standing to bring claims based on either of these proceedings, the court of appeals held that all other claims are held without merit without considering the appropriateness of Younger abstention and the decision of the district court was affirmed. The court then proceeded to analyze each of the claims, particularly the RICO claims that arrived from the husband's bankruptcy estate. The Bankruptcy Code provides that the trustee of a bankruptcy estate is the representative of the estate. As such, the trustee has the capacity to sue on behalf of the estate and those with claims against the estate can sue him. While the court pointed out that they did not squarely address the question of whether the creditor of the bankruptcy estate also has a standing to assert claims on behalf of the estate. They stated in dicta that, in general, trustees are the exclusive parties possessing the right to sue on behalf of the estate. The court indicated that they held, under some circumstances, the trustee may authorize for others to bring suit, but the courts implicitly held that the right to bring suit - or choose not to do so - belongs to the trustee in the first instance. (Although defendants are correct that a trustee must generally file [actions on behalf of the estate], we hold that under these particular circumstances - where the trustee stipulated that the creditors could sue on his behalf of the bankruptcy court approved that stipulation - the creditors had standing to bring the suit.") The 9th Circuit, in its opinion, pointed out that other circuits have considered this issue and have consistently held that a bankruptcy trustee vested with the exclusive power to raise claims on behalf of the estate. Thelma argued that because her suit also names the Chapter 7 Trustee as a defendant, it is nonsensical for the trustee to be the only individual vested with the power to sue the trustee. The court dismissed this argument as spurious, stating the Bankruptcy Code provides a procedure for a creditor to acquire property of the estate, including legal claims. "On request of a party in interest and after notice and a hearing, the court may order the trustee to abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate," the court said However, the wife had not sought an abandonment of the estate's RICO claims, either the district court level or on appeal. "Unless the court order otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate," the court said. Furthermore, the court pointed out that if the trustee is guilty of malfeasance, the proper remedy is removal under Section 324(a), not a RICO claim filed in another forum. The court affirmed the reasoning of district court and that of our sister circuits and held that the bankruptcy code endows the bankruptcy trustee with the exclusive right to sue on behalf o the estate. Thelma also argued that the administration of the husband's probate estate violated RICO. Since the filing of this appeal, the California state courts have ruled that a matter of California probate law, the wife is not a creditor of the probate estate. The bankruptcy court is bound by the California determination that the wife does not have a claim against her husband's probate estate under the "full faith and credit" clause of 28 U.S.C. Section 1738 and the doctrines of collateral estoppel and res judicata. The court determined that Thelma was not a creditor of the probate estate and therefore has not been harmed directly or indirectly by a concealment of assets and, furthermore, her claim in the bankruptcy case in which the trustee has the exclusive right to bring causes of action. The determination of standing has long been an issue and it is clear that the 9th Circuit joins with its sister circuits in affirming the right that the Chapter 7 trustee has the exclusive standing to bring claims on behalf of the estate. There was some language in the opinion that if the party feels that the trustee is not proceeding appropriately, they can either request the trustee to abandon the claim or the alternative is to sue the trustee for malfeasance if the trustee fails to bring an appropriate claim. Obviously, these are most difficult burdens to establish, either the estate has no interest or there has been malfeasance by the trustee and should be thoroughly analyzed before counsel proceeds in such litigation.
Author: Michael S. Pepperman, Thomas T. Hearn Posted: April 1, 2006
This article by Michael Pepperman and Thomas Hearn was published in the April 2006 issue of the Construction Executive. To read the article click on the title below. Avoiding ADA Lawsuits And Keeping Workers Safe
Author: Charles M. Golden Posted: March 24, 2006
After discharge, can a debtor proceed to recover on an undisclosed asset? The answer to this question was determined by the 7th U.S. Circuit Court of Appeals in Eugene K. Biesek v. Soo Line Railroad Co. and Canadian Pacific Railway, decided March 6.
Author: Charles M. Golden Posted: February 17, 2006
Does the mere filing of an objection of a claim prevent the creditor from voting for the proposed plan of reorganization? The answer for this question was determined by the 4th U.S. Circuit Court of Appeals for the in the matter of Jacksonville Airport Inc. v. Michkeldel Inc., decided on Jan. 19.
Author: Michael E. Bertin Posted: February 8, 2006
The recent and important Pennsylvania Supreme Court case of Peters v. Costello has already sparked debates among Pennsylvania family law practitioners. The Peters case is the first of its kind. In the case, the Supreme Court held that nonbiological grandparents who stand in loco parentis to one of the parents of the child with respect to whom they seek grandparental partial custody/visitation rights, and who otherwise qualify to seek partial custody/visitation, have standing to seek partial custody/visitation under the Grandparents Visitation Act, 23 Pa. C.S.A. Section 5313(a).
Author: Charles M. Golden Posted: February 6, 2006
The issue as to whether or not counsel could collect attorney fees that were awarded by the court after an entry of discharge was presented in The bankruptcy appellate panel of the 9th U.S. Circuit Court of Appeals in the matter of Mark A. Wolff v. Jerry Johnson; Lawrence Loheit, Chapter 13 Trustee.
Author: Michael E. Bertin Posted: January 15, 2006
A hot topic that has often been debated among family law practitioners is the "custody evaluation." The never-ending question of whether a mental health evaluation is appropriate in a child custody case is a popular subject not only among family law practitioners but also among psychologists. It is also an interesting topic for the non-family law practitioner.
Author: Charles M. Golden Posted: January 13, 2006
In a battle between two giants, the 7th U.S. Circuit Court of Appeals decided in In re Kmart Corporation, Debtor-Appellee in an appeal of Capital One Bank; Capital One F.S.B.; and Capital One Services Inc., on Jan. 4, that Kmart could assume its credit card agreement with Capital One. Circuit Judge Frank Hoover Easterbrook, in a detailed opinion, set forth the test as to whether or not Kmart could assume an executory contract with Capital One Bank.
Author: Charles M. Golden Posted: December 9, 2005
When does diversion of income by debtors become an administrative expense? This question was answered in the U.S. Bankruptcy Appellate Panel for the 8th U.S. Circuit Court of Appeals in an appeal from the Bankruptcy Court for the District of North Dakota in In re Robert M. Hallmark & Associates Inc. in an opinion dated Nov. 4.
Author: Michael E. Bertin Posted: November 30, 2005
The recent case of Jones v. Jones may create the possibility of unrest in same-sex couples planning to have children. In the case, the Pennsylvania Superior Court affirmed the Bucks County trial court's award of primary physical custody of 8-year-old twin boys to the petitioner, Patricia Jones, the nonbiological parent and former same-sex partner of Ellen Boring Jones (Boring), the biological mother.
Author: Charles M. Golden Posted: October 28, 2005
When is a failure to disclose income sufficient basis to deny discharge? The answer to this question was determined by the U.S. Bankruptcy Appellate Panel of the 9th Circuit in In re Kenneth R. Roberts, Appellant, v. James F. Erhard, Appellee. The matter came before the appellate panel from an appeal from the U.S. Bankruptcy Court for the District of Idaho In re Kenneth and Laura Roberts, Debtors, decided Sept. 29.
Author: Michael E. Bertin Posted: October 21, 2005
The Pennsylvania Superior Court affirmed the Bucks County trial court's upholding of a marital settlement agreement that failed to delineate the value of a business owned by husband but did recite that disclosure of its value had been made.
Author: Charles M. Golden Posted: September 25, 2005
The issue as to when a closed Chapter 7 case can be reopened in order for the trustee to administer a personal injury case was the issue raised in In re Bonner, which the 6th U.S. Circuit Court of Appeals decided Sept. 6. The facts in this case are relatively simple and the bankruptcy appellate panel of the 6th Circuit was clear in its explanation.
Author: Michael E. Bertin Posted: September 1, 2005
The article Sunny Florida: Relocation Granted by Michael E. Bertin, Esquire appeared in the Pennsylvania Family Lawyer, Vol. 27, issue No. 3 (September 2005) edition.
Author: Charles M. Golden Posted: August 19, 2005
When is it proper for the court to close a confirmed Chapter 11 case? The answer to this question was determined by Bankruptcy Judge Walter Shapero in the U.S. Bankruptcy Court for the District of Delaware in In re SLI Inc., et al, decided June 24.
Author: Charles M. Golden Posted: July 1, 2005
The entitlement to a professional for compensation was the subject matter of the memorandum opinion written by U.S. Bankruptcy Judge Donald D. Sullivan in In re Garden Ridge Corporation, et al., in the Bankruptcy Court for the District of Delaware. The opinion was written and filed June 15.
Author: Joan M. Roediger Posted: June 1, 2005
This article was published in the Physician’s News Digest in June 2005.
Author: Joan M. Roediger Posted: June 1, 2005
Guidelines to Keep Your Practice on Track
Author: Joan M. Roediger Posted: June 1, 2005
This article was published in the Physician’s News Digest in June 2005.
Author: Charles M. Golden Posted: April 22, 2005
When is it proper to appoint a separate, informal committee as representation in bankruptcy cases?
Author: Joan M. Roediger Posted: April 6, 2005
If a medical practice fails to receive payment from a health plan for services rendered to a plan enrollee, usually it is because the practice believes the patient to be an eligible beneficiary of a health plan when he or she actually is not.
Author: Charles M. Golden Posted: March 18, 2005
Who bears the cost of committee experts? The answer to this question was given by the 8th U.S. Circuit Court of Appeals in In re Farmland Industries Inc., dated Feb. 10.
Author: Joan M. Roediger Posted: March 1, 2005
OT Pay - Who's Eligible, Who's Not?
Author: Charles M. Golden Posted: February 4, 2005
Is critical vendor designation a defense to a preference action? The answer to this question was addressed in the matter Zenith Industrial Corporation v. Longwood Elastomers Inc.in an opinion written by Peter J. Walsh, U.S. Bankruptcy Judge for the District of Delaware, dated Jan. 24.
Author: Joan M. Roediger Posted: January 1, 2005
Published in the February 2005 issue of the Physician's Practice. To read the article from the Physician's Practice website click here .
Author: Joan M. Roediger Posted: January 1, 2005
How to End a Patient Relationship Legally
Author: Charles M. Golden Posted: November 12, 2004
Is the use of temporary lawyers fee sharing, and how much can the firm charge for such a service?
Author: Charles M. Golden Posted: September 3, 2004
Are financial advisers and other "professionals" limited to the amount of their compensation? Mary F. Walrath, U.S. Bankruptcy Judge for the District of Delaware set forth the answer to this question in memorandum opinion in the matter of Stations Holding Company Inc., decided on Aug.18.
Author: Joan M. Roediger Posted: September 1, 2004
Disciplining and Terminating Employees
Author: Charles M. Golden Posted: July 3, 2004
Does the filing of a Chapter 7 for a partnership that has no assets expose the attorney to Rule 9011 sanctions? The answer to this question was determined in the matter Hutton Valley Farms in a decision rendered on July 6, 2000, by Bankruptcy Judge Arthur B. Federman in the Western District of Missouri.
Author: Charles M. Golden Posted: June 25, 2004
Does a replacement check for a dishonored check constitute a preferential payment? The 9th U.S. Circuit Court of Appeals in the matter JWJ Contracting Co. Inc. v. Joseph J. Janus, Chapter 7 Trustee, determined the answer to this question. The 9th Circuit rendered the opinion on Monday, June 14.
Author: Charles M. Golden Posted: May 21, 2004
In the battle of experts, who bears the cost? The answer to this question was given in a memorandum opinion issued by the U.S. Bankruptcy Court for the District of Delaware in an opinion dated May 13. The issue was decided in the case In re Northwestern Corporation Chapter 11.
Author: Charles M. Golden Posted: April 16, 2004
Can a debtor's conduct give rise to an administrative rejection claim? The answer to this question was set forth in a memorandum opinion issued by U.S. Bankruptcy Judge Mary F. Walrath on March 31 in The Matter Fleming Cos. Inc., et al., debtors, Case No. 03-10945.
Author: Michael S. Pepperman Posted: March 4, 2004
Managers of funeral homes and cemeteries, like managers of all businesses, must carefully consider whether each employee is entitled to overtime compensation. Published March/April 2004
Author: Charles M. Golden Posted: February 6, 2004
How long after a discharge can debtors seek to avoid a judicial lien? The U.S. Bankruptcy Court for the Southern District of Illinois answered this question in In Re Sherry Orron Jan. 5.
Author: Charles M. Golden Posted: January 31, 2004
In the past several years in large bankruptcy cases, in first day orders, the debtor seeks permission to pay certain pre-petition claims of "critical vendors" immediately and in full.
Author: Charles M. Golden Posted: January 2, 2004
Can a holdover tenant of a non-residential lease assume the lease under a plan of reorganization? The answer to this issue was set forth in an opinion in the U.S. Bankruptcy Court for the Central District of Illinois in Gilberto J. Pena, d/b/a Christina's Restaurant(03-82887), decided on Dec. 3.
Author: Jason E. Reisman Posted: December 3, 2003
In the arena of labor and employment law, lawsuits under the Fair Labor Standards Act are the trend of the new millennium, at least so far. FLSA lawsuits, especially collective actions - that is, class actions, as they are referred to in the FLSA - seeking unpaid overtime are taking over where the harassment suits of the 1980s and 1990s left off. One of the interesting targets for these suits is the company bonus.
Author: Charles M. Golden Posted: November 14, 2003
In an opinion in the matter of Innovative Clinical Solutions, Ltd., et al., Case No. 00-3027, decided Nov. 7, Peter J. Walsh, bankruptcy judge of the United States Bankruptcy Court, District of Delaware, applied the doctrine of equitable mootness when the debenture holders sought to revoke an order of confirmation in a pending adversary.
Author: Charles M. Golden Posted: October 10, 2003
The facts in In re Spookyworld Inc., No. 03-1315 (1st Cir. Sept. 25, 2003), are relatively simple. In the town of Berlin, Mass., debtor was a corporation entitled "Spookyworld Inc." Spooky-world was created in 1991 and operated a horror theme park in Berlin. The park celebrated Halloween, opening every year only for the month of October. From its modest beginnings, Spookyworld's business grew rapidly; in 1997 it grossed $1.9 million and by 1998, it was employing approximately 500 people during its annual month of operations. The theme park included the usual haunted house, haunted "mine shaft," and other scare attractions which are common to Halloween celebrations.
Author: Joan M. Roediger Posted: October 1, 2003
Click here to download the article authored by Joan M. Roediger.
Author: Joan M. Roediger Posted: October 1, 2003
Published October 2003 in the Physician's News Digest, Inc.
Author: Charles M. Golden Posted: September 5, 2003
Moving to Florida to save the day? This question was answered by the U.S. Bankruptcy Appellate Panel for the 9th U.S. Circuit Court of Appeals in an opinion filed Aug. 11 in the matter of In re Tanzi, Donna J. and Tanzi, John D., Debtors.
Author: Joan M. Roediger Posted: September 1, 2003
Click here to download the article authored by Joan M. Roediger.
Author: Charles M. Golden Posted: August 1, 2003
Is a tax refund subject to avoidance by a trustee? The answer to this question was addressed in the matter of Kleven v. Household Bank F.S.B., No. 02-3127, in an opinion entered by the 7th U.S. Circuit Court of Appeals on June 30.
Author: Charles M. Golden Posted: June 20, 2003
How many times can a bankruptcy court extend the period of exclusivity without it constituting an abuse of discretion?
Author: Joan M. Roediger Posted: June 1, 2003
Published in the June 2003 issue of the Physician's Practice
Author: Charles M. Golden Posted: May 16, 2003
Can a debtor avoid a deficiency judgment obtained after a mortgage foreclosure? The answer to this question was determined by the 1st U.S. Circuit Court of Appeals in In Re Hart, 02-9005, in the opinion and order entered on May 8.
Author: Charles M. Golden Posted: March 17, 2003
Does a chicken have to pay for a bagel? The answer to this bizarre question was determined by the 9th U.S. Circuit Court of Appeals in a decision handed down on Feb. 14 in the matter of In Re: BCE West, L.P., et al, Debtor, Einstein/Noah Bagel Corp., Appellant v. Gerald K. Smith, Appellee, Case No. 01-16724.
Author: Charles M. Golden Posted: January 31, 2003
Is the "business judgment rule” the test to be followed by the court in determining whether or not there has been a bad faith filing of a Chapter 11? The answer to this question is set forth in an opinion by the 11th U.S. Circuit Court of Appeals in the matter of In re: The Bal Harbour Club, Inc. v. AVA Development, Inc., et al, No. 00-12295 published on Jan. 2.
Author: Joseph J. Centeno Posted: January 1, 2003
To read the paper authored by Joseph J. Centeno click on the title below. Gender Stereotypes: An Overview of an Emerging “Protected Class” Under Title VII
Author: Charles M. Golden Posted: December 27, 2002
The effect of a bar date and a better understanding by what was meant by the term was decided by the 9th U.S. Circuit Court of Appeals in an opinion dated Dec. 17 In Re Markus v. Mary-Ann Gschwend(No. 01-17279).
Author: Joan M. Roediger, Paul N. Allen Posted: December 1, 2002
Published December 2002 in the Physician's News Digest
Author: Charles M. Golden Posted: November 5, 2002
On Sept. 20, 2002 the 3rd U.S. Circuit Court of Appeals issued an opinion that startled the bankruptcy bar. In Cybergenics v. Kathleen Chiney, et al¸ 305 F.3d 316, the court held that only the debtor or trustee has the power to invoke 11 U.S.C. Section 544(b) to avoid fraudulent transfers, and a court may not authorize a creditors committee to bring suit under Section 544 derivatively.
Author: Charles M. Golden Posted: October 11, 2002
The issue of how many times a debtor can file either a Chapter 13 or Chapter 7 before such filings become a bad faith proceeding under 11 U.S.C. Section 1307(c) was resolved in a recent decision by Bankruptcy Judge Kevin J. Carey.
Author: Charles M. Golden Posted: August 30, 2002
Are a dental office's patient records employees' property under the U.S. Bankruptcy Code so as to be subject to fraudulent transfer?
Author: Charles M. Golden Posted: July 26, 2002
Is there a crack in the wall of the doctrine of sovereign immunity? This question was delivered by the 9th U.S. Circuit Court of Appeals In re Bliemeister, No. 01-160858, in an opinion filed July 19.
Author: Charles M. Golden Posted: June 20, 2002
The 6th Circuit U.S. Court of Appeals, in an opinion filed on June 3, answered that question. In the caption In re Ernest J. Desilets, Debtor; Allan J. Rittenhouse, Plaintiff-Appellant, v. Delta Home Improvement Inc., Defendant-Appellee, No. 00-2411: 2002 FED App. 0196P (6th Cir.) the court answered the question of the effect of revocation of license and/or disbarment in the state court and the ability to practice before the bankruptcy court.
Author: Kevin J. Kehner Posted: April 8, 2002
Just when you thought it was safer…to breathe the air, to drink the water, …to swim in the Atlantic Ocean. …well, you didn’t really think that, did you?
Author: Charles M. Golden Posted: March 1, 2002
The Legal Intelligencer
Author: Charles M. Golden Posted: January 25, 2002
Is an action by a trustee for recovery of a fraudulent conveyance a violation of religious freedom?
Author: Joseph J. Centeno Posted: January 1, 2002
Author: Charles M. Golden Posted: December 21, 2001
Are professional fees always subject to court review? This was answered by the 9th U.S. Circuit Court of Appeals in the matter of In Re: The Circle K Corporation v. Houlihan, Lokey, Howard & Zukin, Inc., in a decision decided on Dec. 5.
Author: Charles M. Golden Posted: December 12, 2001
A forfeiture is a forfeiture, is a forfeiture!
Author: Larry Besnoff Posted: November 30, 2001
The National Labor Relations Board decided on July 10, 2000 to reverse 12 years of precedent in the Epilepsy Foundation case. The NLRB ruled that employees who are not unionized have the right to have a co-worker present during a disciplinary interview. This article will explain the ruling and provide some guidance.
Author: Jacqueline Z. Shulman Posted: November 30, 2001
The following 11 tips will help employers avoid potential liability and unlawful discrimination in hiring decisions:
Author: Joseph J. Centeno Posted: November 30, 2001
Ever since Congress enacted the Americans with Disabilities Act of 1990 (“ADA”), employers have been faced with constantly evolving and often conflicting decisions from courts interpreting the ADA’s reasonable accommodation requirements. Now, nine years later, the Equal Employment Opportunity Commission (“EEOC”) again has issued enforcement guidance “clarifying” many of the disputed issues. As with past guidance issued by the EEOC, it remains to be seen whether the federal courts will defer to, give significant weight to, or reject the new guidance. Nonetheless, employers will be well-served to familiarize themselves with the new guidance, especially on topics receiving first-time attention. Although a close review of the new guidance is necessary to understand the reasoning and entire obligations under the ADA as envisioned by the EEOC, the following provides a brief summary of five important highlights.
Author: Larry Besnoff Posted: November 30, 2001
When the Centers of Disease Control label workplace violence a “National Epidemic”, American businesses should take note. No employer, whether large or small, is immune from the dangers of violence in the office, factory or warehouse. Danger lurks everywhere: disputes between current employees; disgruntled ex-employees coming back to seek revenge; dangerous strangers from outside the business organization; violent customers, suppliers and the general public. U.S. employers must accept the fact that the problems of modern society have finally taken their toll.
Author: Joseph J. Centeno Posted: November 30, 2001
“My boyfriend and boss?”Human Resources Executives know that mixing romance with work can be filled with perils. Nevertheless, thousands of employees date other employees, oftentimes their supervisors or subordinates. In a December, 1994 poll by the American Management Association of 485 corporate managers and executives, twenty-five percent (25%) said that they had engaged in at least one romance with a co-worker.i Of the twenty-five percent (25%), thirty-three percent (33%) of men and fifteen percent (15%) of women had their office affairs with a subordinate. Four years later in a 1998 survey of nearly 7,000 employees, seventy-one percent (71%) reported that they had dated someone at work and fifty percent (50%) of the managers said they had dated a subordinateiiThe truth of the matter is that dating at work happens - and it happens a lot.
Author: Joan M. Roediger Posted: November 30, 2001
This article was published on the ASCRS (American Society of Cataract & Refactive Surgery) Website.
Author: Joan M. Roediger Posted: November 30, 2001
It is hard to believe that it is already November. Last year, at this time, fears of Y2K were sweeping the nation. Now those fears seem a distant memory. I am sure all of you are relieved that you do not have to plan for Y3K for another 99 years. This year, however, the one thing all practices cannot avoid is planning for next year. Now is the time to start your end of year preparations. By beginning to focus on these issues now, hopefully, your practice will sail into 2001 with little fuss.
Author: Charles M. Golden Posted: November 9, 2001
When does an automatic stay take effect? Bankruptcy Judge Kevin J. Carey made that determination in a recent decision and order entered on Sept. 14 in the matter In re Vera H. Moore, Bankruptcy No. 00-34272 KJC.
Author: Charles M. Golden Posted: October 5, 2001
How long after confirmation of a Chapter 11 reorganization plan can the U.S. trustee collect its statutory fees?
Author: Charles M. Golden Posted: August 31, 2001
Is liability under Section 20(a) of the Securities Exchange Act a basis to deny discharge under the Bankruptcy Code?
Author: Charles M. Golden Posted: July 13, 2001
The United States Court of Appeals for the Fourth Circuit, in an Opinion entered on June 29, 2001, answered that question. In the matter of In Re Regional Building Systems, Inc., Debtor. (CA-00-2555-WMN). The facts in the case are rather simple. In 1992 the Debtor entered into a consignment agreement with Universal Suppliers and Regional Building Systems, hereinafter referred to as “RBS.” RBS, the ultimate debtor, granted Universal a security interest in certain home construction materials. In November of 1993, RBS filed a voluntary petition for relief under Chapter 11, and listed Universal as the holder of a secured claim, the value of the collateral being listed as zero. Universal know of its claim against RBS and, in fact, became a member of the Official Committee of Unsecured Creditors. Universal filed two separate proofs of claim in the RBS bankruptcy, one asserting an unsecured nonpriority claim, and the other a secured claim. In a subsequent unrelated adversary proceeding, the court approved the settlement, which resulted in the payment of approximately $5 million to the debtor. It is this fund that Universal now claims a security interest.
Author: Charles M. Golden Posted: May 15, 2001
DOES THE FILING OF A CHAPTER 11 CONSTITUTE A BREACH OF A MULTI-EMPLOYER PENSION AGREEMENT?
Author: Charles M. Golden Posted: February 23, 2001
Published in the Friday, February 23, 2001 edition of The Legal Intelligencer
Author: Charles M. Golden Posted: January 19, 2001
Published in the Friday, January 19, 2001 edition of The Legal Intelligencer
Author: Anastasius Efstratiades Posted: October 1, 2000
On October 1, 2000, the Federal Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) took effect. In addition, in the last few months several states enacted the Uniform Electronic Transaction Act (“UETA”) which also deals with electronic signatures. So, we begin the new millennium by making technology not only part of everyday culture, but also of our legal framework. Following is a summary of the key provisions of these new statutes for drafters and users of legal documents?
