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Quote of the Day - Shoot a few scenes out of focus. I want to win the foreign film award.
2005 Legal Louies To Be Announced Tomorrow"Three-spin Louie" used to cut my hair as a young boy, and my grandfather went to his barber shop at least once a week for a trim and a shave, occasionally dragging me along. I'm not sure how good of a barber he was (I had a buzz), but he sure could talk. He and my grandfather solved the world's problems each visit, only to start all over again the next week. When I was searching for a name for MIPTC's first annual best and worst awards for the legal world, it seemed fitting to choose Louie's name given his penchant for national affairs. The "three-spin" nickname? My grandfather regularly said that it took Louie only three spins of the barber chair to cut your hair. At the end of the third spin, you were done, whether your hair was or not. That'll be two bits, please. 
The Time To Enforce Payment Of Your Mortgage Is A Long Way OffWhen can you sue on a promissory note secured by a deed of trust? That's a complicated question that deserves a complicated answer, and you can read that complicated answer in this opinion: Ung v. Kohler. In short, however, it's longer than four years, which is commonly considered the statute of limitations for contracts in California. Surprised? Check out California Civil Code section 882.020, which courts have interpreted to extend the statute by either as long as 10 years or 60 years, depending on which opinion you read. In certain circumstances, it could be as little as 10 years, but may be as long as 60. So if you think you can avoid paying a house mortgage, guess again. Presumably the statute was enacted to clear title for ancient mortgages where an outstanding note appeared on the property from long ago, and extinguished the note so the new buyers could get clear title. According the court, it isn't meant to shorten the statute based on contract law, which is what the debtor tried to do here. She got stopped dead in her tracks, and will have to pay the note.
Insurance Company's Coverage Dodge Doesn't Work To Avoid Liability To Third PartyYou have to love insurance companies. Here's a case about an insurance company that issued a policy to a company in India, doing business in India, to cover work done in India for an American company. But there was just one little problem for the insured and the American company that insisted the Indian company get insurance: the policy excluded coverage for work done in India. No problem for the insurance company, Zurich Specialties London Limited, though. The company collected the premium and when the American company presented a claim, it denied the claim. The American company, Business to Business Markets, Inc, (B2B) hired Tricon Infotech, an Indian software company to develop software for it. B2B insisted that Tricon obtain errors and omissions insurance coverage, and informed the broker and insurance company that Tricon operated out of India. Tricon did not deliver the software as promised, and B2B sued, only to find out that Zurich had issued the policy with an exclusion for coverage arising out of operations in India. B2B sued Tricon and got a default judgment, which it then presented to Zurich for payment. When Zurich denied B2B's claim, B2B sued Zurich. The trial court believed that Zurich did not owe a duty of care to B2B and granted Zurich's demurrer, but that's about as far as that thought process went. The court of appeal reversed and said that Zurich did owe B2B, a third party, a duty of care because B2B was the intended beneficiary of the policy Zurich issued to Tricon. The court also ruled that Zurich could have foreseen harm to B2B and B2B actually did suffer harm. It reversed the trial court's dismissal of B2B's case, and sent the matter back for further proceedings. Zurich may yet have to pay the $922,480 judgment B2B got against Tricon.
Blawg Review Awards 2005 AnnouncedBlawg Review, that weekly roundup of the best blog posts and constantly-changing theme of writing, issued its Blawg Review Awards 2005, with a teaser at the end and perhaps another clue to the identify of the anonymous "Ed." who writes it. MIPTC is pleased to take a bow, along with a cadre of much more qualified bloggers, for " Best Graphics on a Law Blog for the gorgeous redesign of May It Please the Court." Thanks. MIPTC is equally pleased that our effort on the weekly Coast to Coast podcast was likewise recognized for "Best Legal Podcast," with congratulations to my co-host, Bob Ambrogi, and our team of producers, Lu Ann Reeb, Scott Hess and Kate Kenney at Skyways Communications and the Legal Talk Network. There are a host of other awards to other highly qualified blogs and bloggers worth your review.
Merry Christmas and Season's GreetingsThe law has precious little to do with Christmas, thankfully, so MIPTC wishes you and yours a wonderful holiday season, whether you celebrate Christmas, Hanukkah, Kwanzaa, Ramadan or any other seasonal festivity. For my brothers and sisters serving in Iraq, I wish you all peace and safety. For everyone, I wish a peaceful day and a prosperous New Year.
Do You Struggle With Wrapping Paper? Here's A Solution For Men Who Can't Wrap.From a friend who got it this site, a Christmas gem for men like me who struggle with wrapping paper: This is the time of year when we think back to the very first Christmas, when the Three Wise Men -- Caspar, Balthasar and Herb -- went to see the baby Jesus, and, according to the Book of Matthew, "presented unto Him gifts; gold, frankincense and myrrh." These are simple words, but if we analyze them carefully, we discover an important, yet often-overlooked, theological fact: THERE IS NO MENTION OF WRAPPING PAPER. If there had been wrapping paper, Matthew would have said so: "And lo, the gifts WERE inside 600 square cubits of paper. And the paper WAS festooned with pictures of Frosty the Snowman. And Joseph WAS going to throweth it away, but Mary saideth unto him, "Holdeth it! That is nice paper! Saveth it for next year!" And Joseph DID rolleth his eyeballs. And the baby Jesus WAS more interested in the paper than, for example, the frankincense." But these words do not appear in the Bible, which means that the very first Christmas gifts were NOT wrapped. This is because the people giving those gifts had two important characteristics: 1. They were wise. 2. They were men. Men are not big gift wrappers. Men do no understand the point of putting paper on a gift just so somebody else can tear it off. This is not just my opinion: this is a scientific fact based on a statistical survey of two guys I know. One is my son, Rob, who said the only time he ever wraps a gift is, quote, "If it's such a poor gift that I don't want to be there when the person opens it." The other is my friend, Gene Weingarten, who told me he does wrap gifts, but as a matter of principle, never takes more than 16 seconds per gift. "No one ever had to wonder which presents daddy wrapped at Christmas," Gene said. "They were the ones that looked like enormous spitballs." I also wrap gifts, but because of some defect in my motor skills, I can never COMPLETELY wrap them. I can take a gift the size of a deck of cards and put it in the exact center of a piece of wrapping paper the size of a regulation volleyball court, but when I am done folding and taping, you can still see a sector of the gift peeking out. (Sometimes I camouflage this sector with a marking pen.) If I had been an ancient Egyptian in the field of mummies, the lower half of the Pharaoh's body would be covered only by Scotch tape. On the other hand, if you give my wife a 12-inch square of wrapping paper, she can wrap a C-130 cargo plane. My wife, like many women, actually LIKES wrapping things. If she gives you a gift that requires batteries, she wraps the batteries separately, which to me is very close to being a symptom of mental illness. If it were possible, my wife would wrap each individual volt. My point is that gift-wrapping is one of those skills - like having babies -- that come more naturally to women than to men. That is why today I am presenting: GIFT WRAPPING TIPS FOR MEN 1. Whenever possible, buy gifts that are already wrapped. If, when the recipient opens the gift and neither one of you recognized it, you can claim that it's myrrh. 2. The editors of Woman's Day magazine recently ran an item on how to make your own wrapping paper by printing a design on it with an apple sliced in half horizontally and dipped in a mixture of food coloring and liquid starch. They must be smoking crack. 3. If you're giving a hard-to-wrap gift, skip the wrapping paper! Just put it inside a bag and stick one of those little adhesive bows on it. This technique creates a festive visual effect that is sure to delight the lucky recipient on Christmas morning. Let's listen in: WIFE: Why is there a Hefty trash bag under the tree? YOU: It's a gift! See? It has a bow! WIFE (peering into the trash bag): It's a leaf blower. YOU: Gas-powered! Five horsepower! WIFE: I want a divorce. YOU: I also got you some myrrh. To wrap things up (no pun intended), remember that the important thing is not what you give, or how you wrap it. The important thing, during this very special time of year, is that you save the receipt!
The Theory Of Punitive Damages Gets A Christmas FaceliftYou may be sitting back in the quiet ease of the holidays, thinking about heading back to work next week, but as you are, cases continue to be decided and there are a few out there that may have major impact next year. As just one example, we've become somewhat comfortable with the concept that punitive damages can't be more than nine times compensatory damages, and in most instances restricted to three times compensatories. That changed just before Christmas Eve, and along with the Fifth Appellate District, you may be surprised to learn that the California Supreme Court doesn't think the theory of punitive damages is so restricted any longer. They believe instead that punitive damages can reflect an award that includes punishment for the damages other Californians suffered as a consequence of the practice that resulted in damage to the particular plaintiff. In other words, we may be much closer to life as it existed before the U.S. Supreme Court issued its restrictive punitive damages guidelines in State Farm and BMW v. Gore. A lot closer it appears. When the heading to a section is entitled, "The Weight of 'Scope and Profitability' In Determining Reprehensibility" appear in an opinion (scroll down to page 10), you sit up and notice. In our case, Ford apparently established and regularly used fairly restrictive interpretations of California's Lemon Law in order to save approximately $10,000 per vehicle on cars that would otherwise qualify as a lemon, as the Plaintiff's Ford Taurus did. In its prior life with the previous owner, it suffered numerous problems with its transmission, including locking in low gear on the freeway. Just as a side note here, given the average speed on a California freeway, low gear might not be as much of a problem as you would imagine. But I jest about a situation that was likely very dangerous, and as you read the opinion linked above, was not disclosed to the subsequent owner, Plaintiff in this case. In the trial court, the jury awarded just over $17K for the Plaintiff's damages from the lemon, and $10 million - some 560 times the compensatory award - to punish Ford. Not surprisingly, Ford appealed and got the damages reduced to $53,435.00. Then also not surprisingly, Plaintiff appealed, but most surprising of all, the California Supreme Court reversed with instructions to modify upward the punitive damages award from the lowered amount, based on Ford's reprehensible conduct in developing a scheme to avoid California's lemon law. The court of appeals did, and awarded $175,000, or 10 times the original compensatory award. While not particularly riveting compared to the $10 million punitive verdict, there's a lesson here. The appellate court said there wasn't enough of a record establishing Ford's pattern of conduct to award more. Careful plaintiff's attorneys will read this opinion and work to establish such a record in future cases. Trial judges will evaluate those records and may be forced to allow them into evidence. Defense attorneys, on the other hand, will have to be on the lookout. Companies may want to consider publishing such restrictive guidelines in manuals, as Ford did here. Now you can flip the TV back to the "Grinch Stole Christmas," (link has sound) or just read a few more court opinions.
Law Firm Partnership Agreements Upheld Against Fee-splitting AllegationsIf you run a law firm, you might want to be aware of this case. There's some language in it that you might want to add to your partnership agreements, now that it's been blessed by the Courts. Seems that an attorney signed a partnership agreement that acknowledged his law firm invested substantial resources to develop its client base. At the same time, he agreed that if he left, then he would pay 25% of income derived from the firm's clients that went with him to his new firm. A definite disincentive to leave with clients, and protective of the firm's investment. The Court that reviewed the provision, here in part of its glory, thought it was reasonable (and a host of other reasons), despite the attorney's position that it was an unlawful fee-splitting arrangement:
The Court pretty much took the attorney to task for violating the agreement with his partners: "Having accepted the benefits of his bargain, [the attorney] will not now be heard to complain that he ought to escape its burdens." It wasn't Christmas for everyone, which is the case in most disputes.
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