A creditor in my chapter 13 filed a claim, what should I do?

8 May 2014

Answer: Do not panic as claims are a normal part of the process.  However, it is very important to, and you must if you want to preserve your rights, object to the entire claim or the amount of the claim, if you have adequate grounds.

Claims establish the “rights of a creditor against assets of a debtor’s bankruptcy estate.”  Hann v. Educ. Credit Mgmt. Corp. (In re Hann), 711 F.3d 235, 239 (1st Cir. 2013).  A claim is either allowed or disallowed.  See 11 U.S.C. § 502(a).  Typically, when a claim is disallowed it only affects the interests of the creditor in the bankruptcy case.  For example, if a claim is disallowed, and then the case is dismissed prior to a discharge entering, the creditor may still have their claim and be able to seek collection against the debtor after the case is over.  Hann v. Educ. Credit Mgmt. Corp (In re Hann), 711 F.3d at 241-42.

 

However, if there is a factual determination made by the bankruptcy court as part of the decision to disallow the claim, the bankruptcy court’s decision is binding against the creditor.  Id.  In In re Hann, the creditor tried to collect a debt after the bankruptcy court had denied the creditor’s claim and made a determination that no debt was owed in the debtor’s prior bankruptcy.  Id. at 241.  The debtor was able to obtain sanctions against the creditor for its collection efforts after the case was over.  Id. at 243.  Thus, whether objecting to a creditor's claim will only affect its rights in the bankruptcy case or forever, it is important to object if you have adequate grounds.

In the event that a creditor is collecting a debt against you that was taken care of in a prior bankruptcy or you do not owe the debt for another reason, you will likely need to take action to enforce your rights.  Feel free to give this office a call.

What is the statute of limitations for a slander/defamation claim in Massachusetts?

2 May 2014

Answer: Three years from when you know or with reasonable diligence should have known the harm done and the identity of the defamer.

The Massachusetts Supreme Judicial Court recently decided the case of Harrington v. Costello.  467 Mass. 720 (2014).  It is a current expression of the law on timing and the statute of limitations with respect to defamation suits.  It is also a good example why one should not sit on legal rights or investigating into facts or assessing a legal cause of action in a timely fashion. 

Initially, the general rule is that you have three years from when the claim “accrues.”  Mass. Gen. Law. c. 260 § 4.  in other words, you have three years from when the clock starts to tick.  When a claim legally “accrues” is subject to judicial interpretation.  Harrington v. Costello, 467 Mass. 720, 725 (2014).  The general rule is that a claim starts to accrue when the defamatory material is published (stated to a third party).  Id.  If a plaintiff wants to bring a claim after that time period, the burden is on him to show why the claim can proceed.  Id.

The discovery rule can come into play here.  With respect to defamation, it generally stands for the rule that a claim does not accrue until the plaintiff has an awareness that he has been harmed and of the identity of the defamer that caused the harm.  Id. at 725-726.

In Harrington, the plaintiff/victim was a priest.  He was informed that there was an accusation that he had stalked a young boy.  Id. at 722.  There were two other priests that published this false story, claiming it came from a parishioner.  Id.  Harrington denied the accusation and his efforts to learn the identity of the young boy to address the matter were unsuccessful.  Id. at 722-723.  Although Harrington knew that there were two other priests repeating the story, Harrington thought that the two other priests had a conditional privilege, (which is something that allows someone to technically defame someone), because of their obligations to protect people in the church.  Id. at 725.  Harrington thought that they were doing their job.  Due to this Harrington did not bring a claim against the two other priests, and time past.  Harrington was subject to harassment and ridicule due to the false accusation.  Id. at 723.

Years later, Harrington learned that there was no accusation at all.  Instead, the other two priests had made it up “entirely out of whole cloth.”  Id. at 727.  He did learn this within 3 years of the original publication.  A few years later, Harrington then brought his claims against the other two priests.  Id. at 723.  When the two other priests raise the defense that the statute of limitations had past, he argued that the discovery rule should save the claim.  Id. at 727.  But the Massachusetts Supreme Judicial Court dismissed his claims citing the statute of limitations.  Despite the fact that Harrington thought the other two priests held a valid defense to the action, the SJC said the clock started to click once he knew of the harm and the identity of the two other priests.  Essentially, the SJC stated a plaintiff only needs to know that he was harmed and who harmed him, and the claim is not tolled until a plaintiff believes he has a good legal claim, such as learning there is no conditional privilege to a claim.  Id. at 729-730.

It is axiomatic to say that Mr. Harrington should have put more effort into investigating the facts of the matter earlier, should have considered taking legal action right away against the unknown “parishioner” (that he thought at the time defamed him) that would have led to the truth, or at least taken legal action right away upon learning of the deceit of the two other priests. 

If you are faced with a situation similar to Harrington, there is hope, but you probably need help.  Feel free to give this office a call, as there are actions this office can take and techniques to employ on your behalf that may help you get justice.

Can a settlement agreement be binding even though it is not in writing and contingent on future events?

5 April 2014

Answer: Yes.

In general, people have a misconception about the legal value of oral statements and seem to discount them.  This includes statements made in furtherance of settlement agreements, which are discussed here.  The legal reality is that oral statements can be the basis for binding agreements, and settlement agreements in particular.

Take for instance the case of Amary v. JP Morgan Chase Bank decided by the United States District Court, District of Massachusetts just this year.  D. Mass. Case No. 12-10777-NMG (decided Jan 14, 2014).  In Amary the parties were in litigation and attended mediation with a magistrate judge to see if they could resolve the matter.  The parties came to a settlement agreement.  However, because the amount settled upon exceeded the authority given to J.P. Morgan’s attorney, it was conditioned upon the defendant JP Morgan’s approval of the amount.  The magistrate judge read the terms of the agreement into the record, noting that it would become final upon defendant’s approval of the amount, and the parties assented to the terms on the record.  Later that day, the defendant approved the amount and its attorney’s reported the same to the Court.  The next day, the plaintiff, now acting pro se, informed the defendant’s counsel she was withdrawing from the agreement, which was later characterized as based on “second thoughts” by the Court.  Eventually, the plaintiff’s efforts to withdraw from the settlement agreement were unsuccessful and the Court entered a judgment based on the settlement agreement. 

In rejecting the plaintiff’s efforts to withdraw from the settlement agreement, the United States District Court cited to prior precedent and stated “[o]nce agreed to voluntarily and submitted to the Court, a settlement agreement is binding.”  The author notes that there are a number of cases that generally express this.  See e.g. Warner v. Rossignol, 513 F.2d 678, 682 (1st Cir.1975) (settlement agreement is an enforceable contract); Petition of Mal de Mer Fisheries, Inc., 884 F. Supp. 635, 637 (D. Mass. 1995); Wang Laboratories, Inc. v. Applied Computer Sciences, Inc., 741 F.Supp. 992, 999-1001 (D.Mass.1990), (stating statute of frauds does not bar enforcement of oral settlement agreement), rev'd on other grounds, 926 F.2d 92 (1st Cir.1991); Rand-Whitney Packaging Corp. v. Robertson Grp., Inc., 651 F. Supp. 520, 536 (D. Mass. 1986); Nigro v. Conti, 66 N.E. 2d. 353, 354 (Mass. 1946); Savage v. Blanchard, 148 Mass. 348, 349 (1889); Correia v. DeSimone, 34 Mass.App.Ct. 601, 604 (1993) ("There is a strong judicial interest in the prompt reporting of settlements which militates against permitting the Statute of Frauds to be raised as a defense to the enforcement of a settlement agreement").

The author surmises that the plaintiff may have thought that since the agreement had a future condition that it must have not been binding.  However, the Amery Court noted that “persons may enter into agreements that are binding unless voided by a future contingency.” 

Although there are certain grounds upon which a settlement agreement can be challenged.  See Petition of Mal de Mer Fisheries, Inc., 884 F. Supp. 635 (D. Mass. 1995).  The lesson learned is that oral statements, especially those that concern a settlement agreement and are presented to a judge, generally are binding.

There are many traps for the unwary when litigating.  In the event that you find yourself in a dispute, feel free to contact us.

Right to cure foreclosure defense under M.G.L. chapter 244 section 35A in Massachusetts, an update.

23 March 2014

            A significant and potent weapon in the arsenal of foreclosure defense litigants and attorneys was curtailed greatly earlier this month by the Supreme Judicial Court of Massachusetts with its decision U.S. Bank, N.A. v. Schumacher.  The question was whether Mass. Gen. Laws c. 244 § 35A was one of the statutes “relating to the foreclosure of mortgages by the exercise of a power of sale” under Mass. Gen. Law c. 183 § 21.  If it was, then banks would have needed to comply with § 35A strictly.  In practical terms it meant that any violation of the statute’s requirements, regardless how minor and (more importantly) whether any true “damage” was caused by the violation, would be enough to undo the foreclosure.  Unfortunately for homeowners, the Court answered in the negative. 

 

Now, as a practical consequence of the decision, and as the concurrence in Schumacher pointed out, a homeowner needs to bring suit alleging a violation of § 35A to the Superior Court for equitable relief prior to the foreclosure to stop it.  The other option is to raise the § 35A violation in the eviction process as a counterclaim.  However, now a homeowner must not only show a violation, but also that the violation “rendered the foreclosure process so fundamentally unfair that [the homeowner] is entitled to affirmative equitable relief” in order to undo the foreclosure.  U.S. Bank, N.A. v. Schumacher, 467 Mass. 421, 433 (2014).

Keep in mind that prior to this decision, some housing courts ruled that § 35A needed to be complied with strictly, and a violation was sufficient to show the foreclosure did not transfer ownership.  Litigants and their attorneys showed violations of § 35A and were able to undo a foreclosure in the eviction process stage.  This occurred often enough that it was, as stated, a commonly used weapon in the arsenal of the competent foreclosure defense litigant/attorney.  This is now no longer.

Based on this author’s experience in the foreclosure defense field since the Great Recession started, it is his opinion that for all intents and purposes, the practical effect of Schumacher will be to reduce the use of a violation of  § 35A to undo a foreclosure to being a rare occurrence.  (This was a big win for the banks.)

In the event that you are contemplating defending against a foreclosure in Massachusetts, feel free to give this office a call.

My privacy rights in Massachusetts may have been violated; is the inappropriate release of my private/confidential information to one person enough to substantiate a valid claim?

3 March 2014

Answer: Yes, in Massachusetts release to one person is enough.  But keep in mind the release still must be deemed: 1) serious or substantial; and 2) unreasonable.  Mass. Gen. Laws. c. 214 Section 1B.
 

The Supreme Judicial Court of Massachusetts was asked the certified question from a federal court the following:

Can disclosure of private facts about an employee among other employees of a corporation constitute sufficient publication to infringe the employee’s right of privacy?

In addressing the question, the SJC stated that it had indicated that intracorporate release of information would be a violation in the past and answered “Yes.”  Bratt v. Int’l Bus. Machs. Corp., 392 Mass. 508, 519. In doing to, the SJC deviated from the Restatement (Second) of Torts § 652D (1977), which required the disclosure of private facts to the public at large.  Id. It rejected the defendant’s argument that since the disclosure was to only a few other employees, there was not a violation.

Some years later, in a non-employment context, the SJC reiterated the law in Massachusetts in ruling that a release to only one person is enough in Tower v. Hirschhorn. 397 Mass. 581, 587-88 (1986).  It found that release of confidential information to one (or two) adversarial witnesses in litigation could be deemed a release and cited its prior decision of Bratt.  Id. 

So, if you find yourself a victim of the release of personal/confidential information about you, do not be dissuaded by those that think since the release was only to a few people that you have no claim.  In Massachusetts, one it enough!

In the event that you believe your privacy may have been violated in Massachusetts, please feel free to contact this office.