Quote of the Day - Man's mind, once stretched by a new idea, never regains its original dimensions.
Reach Down And Stretch That Statute Of LimitationsToday, the Court of Appeal for the Second District streeeetched the statute of limitations to sue insurance companies.
Under California Insurance Code section 2071 (standard fire insurance form), homeowners have twelve months to bring suit against an insurance carrier after denial of a claim. Some homeowners got an additional extension under California Code of Civil Procedure section 340.9 (the Northridge Earthquake statute of limitations revival).
The Court of Appeal decided the legislature's extension wasn't good enough. They invoked the doctrine of equitable estoppel (yes, I know it's an Australian definition, but it was pretty good) to allow homeowners to bring suit against their insurance carriers arising out of the earthquake, now some 11 years ago. Why you may ask?
The Plaintiff essentially lost the value of her house. 21st Century paid her $5255.48 under her "other structures" coverage, and then following a reinspection of the property, 21st Century paid an additional $1950.
Regular readers know I don't quote at length from cases. But this one's worth a read, and will explain exactly why Courts grant the kind of relief sought. Here's the Court's take:
"The legislative record shows section 340.9 was enacted in response to 'reports of rampant mishandling of insurance claims by insurers.' The author of the legislation claimed following the devastation caused by the Northridge quake many victims were devastated a second time when their insurance companies denied or low-balled their claims for compensation. And '[w]hen homeowners complained to the Department of Insurance to obtain relief, the department afforded no help.' The Legislature received reports insurers 'engaged in a systematic program of misleading consumers about the nature and extent of damage to their homes' and, when the deceived homeowners learned the true extent of their damage, 'the insurers simply refused to pay claims on the basis that the claims had become time-barred.' The legislation's author was quoted as stating 'the one-year statute of limitations that is current law under Insurance Code section 2071 has barred victims from being fairly compensated for their losses . . . [because they] were misled about the extent of damage done as a result of the earthquake.' A Senate analysis of the legislation cited news accounts stating '[m]any victims . . . have received only partial settlements for their earthquake claims, and others have received no compensation at all, having been improperly told that the damage they suffered was below policy deductibles.' In subsequent years, when the victims tried to present newly discovered evidence of damage to their insurers, insurers 'stonewalled claims, leaving homes, condominiums, and apartment buildings in shambles and homeowners without any recourse.'"
(Cordova v. 21st Century Insurance Co. 2005 DJDAR 5285 May 9, 2005, footnotes omitted).
Think we have activist judges on our hands? Or judges that are interested in dispensing justice?
Georgia High School Teacher Hangs Up On Mother's DayAfter reading this post, you probably won't be surprised to learn that I spent some time in the military, and that I'm sympathetic to being deployed away from your loved ones for long periods of time.
So, when high schooler Kevin Francois got a call on his cell phone from his mother, Sergeant First Class Monique Bates of the 203rd Forward Support Battalion, he took the call, even though he was in school.
After all, she's scheduled to be away from home for a year, defending her country. Assistant Principal Alfred Parham of Spencer High School in Columbus, Georgia elected to suspend Kevin for 10 days after an altercation arising out the phone call.
According the AP story linked above, when Kevin was first asked to hang up (the school has a policy prohibiting use of cell phones during school hours), he refused and said, "This is my mom in Iraq. I'm not about to hang up on my mom."
A reasonable response, fully informing the teacher what was going on. Although the story doesn't say, I'll surmise that it got uglier from there. Admittedly, I don't know both sides of the story. Most likely, however, the teacher was one of those who doesn't understand the concept of bending the rules or recognizing reasonable exceptions. From there, it appears that Kevin responded with profanity when the teacher became insistent that he hang up the phone.
So, the school suspended Kevin for ten - yep, count 'em, 10 - days.
Little punishment for the privilege of speaking to your mother just before Mother's Day, while your Mom is in an Army of one in Iraq.
Should Kevin have been suspended? Was the teacher right, or should Kevin have been allowed all the time he needed to talk to his Mom? My bet? That teacher, and the school, will never understand the meaning of discipline, despite imposing this punishment.
Not that I would ever wish it, and certainly my hopes and prayers will be with Sergeant First Class Monique Bates and her son Kevin until she arrives home safely, but how do you think the teacher would feel if, after forcing Kevin to hang up, an insurgent bomb went off?
The Government is Now Taxing The Term 'Free'How much did your cell phone cost when you bought it? Was it free? Apart from the fact that you signed a 15-year contract to get a free phone, you likely paid taxes on it.
Yep, California Regulation 1585 requires that you pay taxes on the full price of the phone, even if you didn't pay full price. The consequences of the regulation are that you and I pay perhaps as much as 25% of the value of the phone.
Those taxes mean a fairly sizable contribution to the $38 billion (with a "B") the state brings in on retail sales. But they shouldn't. Or should they?
The regulation, which was written by the Board of Equalization, not the Legislature, conflicts with the laws passed by the Legislature. Section 6006 of the Revenue & Taxation Code defines a sale as "any transfer of title or possession, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration."
Plus, add to that statute section 6051, which says a sales tax will be imposed on "the gross receipts of any retailer from the sale of all tangible personal property sold at retail."
So, "free" means "no consideration," and that means no taxes.
So why are you taxed?
The Board of Equalization counters with section 6012 that defines "gross receipts" as "the total amount ... of the retail sales of retailers, valued in money, whether received in money or otherwise."
The "otherwise" is the troublesome part. It means that because you signed that 15-year contract, you really did pay money, so the state gets to tax you on that "money," even though you didn't pay it.
Confused yet? You didn't think "Free" meant "free," did you?
From Use It And Lose It to Lose It and You Can't Use ItFirst we had use it and lose it, and now we have lose it and you can't use it.
We're talking insurance, in the former, homes in the latter.
Here, we have a homeowner's house that got damaged by a tree that was pushed into it by a landslide that was caused by rain.
So, what's covered and what's not? Under the policy, rain is, landslides aren't.
You would think that because rain is covered, and rain was the cause of the chain of events that led to the damage, the policy covered the loss, but you'd be wrong. You may not have read California Insurance Code section 530. It's one of the most confusing statutes I've read, and the Supreme Court opinion above clarifies it fairly well. Here's how they say it:
"When a loss is caused by a combination of a covered and specifically excluded risks, the loss is covered if the covered risk was the efficient proximate cause of the loss," but "the loss is not covered if the covered risk was only a remote cause of the loss, or the excluded risk was the efficient proximate, or predominate cause."
Yeah, I know, it's not much clearer than the statute. Let me see if I can do better: if the cause of the loss is covered by the policy, but too remote in the causal chain of events, there's no coverage.
Remember Palsgraf? The case reminds me of the game called Mousetrap - the conductor at one end of the train platform helped a man on to a train by pushing him as it was pulling away from the station, which caused the man to drop a package that exploded, causing a scale to fall on the other end of the platform and hit Mrs. Palsgraf. Verdict: conductor not liable.
Same verdict here, apparently. Too many causes between the rain and the damage to the house. Or were there?
It All Starts At HomeCharity begins at home, and tonight it certainly did. The Luevano Foundation (free registration required) awarded fifty scholarships to Latino middle school children to enhance their education.
The Foundation started in 1983 selling tacos at a local church, and has grown to a sizable endowment, expected to reach $400,000 this year, and add seventy-five more students to the roster of recipients. If you want more information, send an email to the Executive Director, Elva Rubalcava. The concept is that the scholarship not only provides an opportunity to the young recipient, but also brothers and sisters, and likewise motivates the recipient's family and neighbors to strive to achieve.
Plain and simple, and it works.
The Foundation also honored Orange County's own MacArthur Fellow, Ruben Martinez, who transformed his barbershop into a bilingual bookstore, now one of the largest booksellers of Spanish-language books in the country.
Sister Rose Marie Tulacz, S.N.D. honored the Advisory Board of the Foundation with the gift of her book, In The Between. Assemblyman Todd Spitzer presented certificates from numerous governing bodies to the successful student honorees.
It's not often that children tell you that their hero is their mother or father, but practically every award recipient tonight did. The limited exceptions noted their teachers as ones that they looked up to.
A refreshing change.
Summer Approaches, Men Worry About Swimsuit SeasonEvery once in awhile, you see news articles on silly laws, and some are actually pretty funny.
But here's one from Cape May, New Jersey, that gives a whole new meaning to summer as swimsuit season approaches.
No, it's not women's swimsuits - it's men's Speedos. The law banning men's tight swimsuits in the beachfront town of Cape has gone the way of ... well, let your imagination fill in that blank.
Some are (rightfully so) dead set against it, and some earn medals.
How would you have voted if you were on the Cape May City Council? Put yourself in their, well, er, shoes. Yea or nay?
Grades Are In, And The Profession CallsLaw school Deans across the country got their report cards last week, and they got A's and F's. According to the Law.com article (last link), the grades are:
"On the positive side:
• 82 percent of students rated their schools 'good' or 'excellent.'
• 82 percent were encouraged to learn by applying classroom theory to practical problems.
• 96 percent posed questions to spark classroom discussion.
• 94 percent found campus library services satisfactory or better.
• 76 percent were satisfied with their schools' emphasis on law practice ethics.
On the negative side:
• 63 percent of students said they received scant support in job placement.
• 56 percent had not participated in pro bono or volunteer work.
• 56 percent incurred $60,000 or more in tuition debt.
• 32 percent never have substantive discussions with faculty outside of class.
• 18 percent said they "never" received prompt written or oral feedback from professors."
A ringing endorsement, and a ringing condemnation. Looks like the Deans have their work cut out for them. Is that it? Do we rely on the Deans? As lawyers, are there things we can do?
Well, to counter the negative grades, how about:
• Assist law school grads looking for jobs
• Encourage pro bono work in the practice of law
• Set aside a percentage of first-, second- and third-year salaries to pay down debt
• Act as a mentor for law school students
• Assist law students in the study of law and legal writing
Consider contacting your local Dean, and pitching in. The profession is calling.
Spitzer Sues Software Supplier Stopping SpywareYour hard drive just took one step closer to you, and away from others trying to deposit spyware there. New York Attorney General Elliott Spitzer sued Intermix Media, alleging that the company installs spyware on our computers, an successfully had some four million downloads in New York alone.
Intermix, a Los Angeles company, posted this news item on its website, which mysteriously noted that an Intermix spokesperson had no comment. So much "no comment" that it didn't even comment in the AP story it posted on its own site, but it did have this to say about that, posted elsewhere on its site:
" 'Many of the practices being challenged were instituted under prior leadership, and it has been voluntarily and proactively improving these applications and related consumer disclosure and functionality for some time.' Intermix ceased distribution of the applications at issue earlier this month, it said."
In other words, "we used to do it, but not anymore."
My hard drive is pleased. How about yours?