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Will the Federal Consumer Protection Bureau and the State Bar Ensure Recovered Funds Go to Defrauded Homeowners?

Doesn't Look Like It

The California State Bar has warned attorneys for a long time:  don't handle homeowner mortgage foreclosures.  In fact, those warnings started in 1978 after our state Legislature. The warnings started in earnest in 2008-2009 when, the State Bar issued an ethics ruling alerting lawyers to the ethical problems with loan foreclosures.  We listened; we've never handled a homeowner loan foreclosure.   

Apparently, though, the message didn't reach everybody, and perhaps most notoriously, now suspended Chance Edward Gordon.  Go ahead.  Click on that last link and see the State Bar's warning to consumers.  In fact, every time you hire an attorney, you should check with the State Bar to ensure the lawyer is licensed. Mine's here for comparison purposes.

Well, it turns out that Mr. Gordon handled forclosures from 2010 to 2012, and collected a lot of money from homeowners facing foreclosure.  More than $11 million dollars.  That's right.  $11 million from people who had no money left to pay their mortgages.  

Now, the Federal Consumer Protection Bureau has fined Mr. Gordon $11.4 million dollars, seeking to disgorge the fees he collected. He fought and just lost before the Ninth Circuit Court of Appeals, and he's likely reached he end of the appeal road, and will have to start forking over money.

I have a few questions.  First, why didn't the State Bar collect this fine?  Apparently, the State Bar found out about Mr. Gordon after he was sued by the FCBP, and decided to pile on, but left the collection of money up to the Feds.  And what is the State Bar of California Anti-corruption League that's referenced on Mr. Godon's State Bar profile?   

Second, will the $11.4 million go back to the very same people he took the money from, or will the money go to the coffers of the FCPB? Becuase the FCBP's webpage about Mr. Gordon makes no mention of the money going back to the homeowners.

Sure, Mr. Gordon defrauded homeowners, but it looks like their losses aren't going to end there.   



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, April 15, 2016 at 08:18. Comments Closed (0) |

Must California Businesses Provide Seats For Employees?

Cubicle workers can't imagine standing all day long at their job, but many bank tellers, shelf stockers, assembly line workers and a host of other employees do. Apparently, howver, some of those employees are tired of standing. Workers from CVS and JP Morgan Chase Bank sued their employers in federal court over a California law that requires employers to provide seats.  Here are the parts of the law that are at issue:

If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for…. The inquiry does not turn on the individual assignments given to each employee, but on consideration of the overall job duties performed at the particular location by any employee while working there, and whether those tasks reasonably permit seated work.

When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.  

Wage Order No. 7-2001, §§ 14(A) and (B) .

The federal courts didn't know how the California Supreme Court would rule, so they asked.  California rejected the federal court's attempt to treat the issue holistically, and instead ruled that the inquiry turns on the tasks the employee is performing.  Here's what the Court said:

If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for…. The inquiry does not turn on the individual assignments given to each employee, but on consideration of the overall job duties performed at the particular location by any employee while working there, and whether those tasks reasonably permit seated work.

In other words, if an employee can sit, then sit.  The employer must provide the seat.  The lesson for employers is simple:   get some chairs and avoid a class-action lawsuit.  

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, April 05, 2016 at 11:32. Comments Closed (0) |

Wells Fargo Pays Attorney General and District Attorneys to Settle Case; Nothing Paid to Victims

Well, that's one way to settle a case:  pay the attorneys  who sued you, not the victims whose telephone calls Wells Fargo recorded.

According to the San Francisco Chronicle, "none of that money will go to consumers whose privacy was allegedly violated."

Instead, Attorney General Kamala Harris and five district attorneys will split $8,500,000.00. 

You decide who wins. 



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, March 30, 2016 at 11:01. Comments Closed (1) |

Justice Department Asset Forfeitures Outstrip Burglary Thefts

Feds Become the new Criminals?

The Justice Department restarted what it amorphously calls the "Equitable Sharing Program" that allows federal, state, county and local cops to seize assets of burglars - up to 80% of what they seize, and then funnel that money to their own budgets.

The Justice Department must have missed the "conflict of interest" lecture in law school ethics class.  Check out this chart from the Washington Post article



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, March 29, 2016 at 11:31. Comments Closed (0) |

Look Around Before You Buy a Firewall, and Watch Out if You Buy a SonicWALL

So, if you’re buying a SonicWALL (including model TZ205 ) as your firewall, don’t waste your money. The price that you pay for renewing the annual software and subscription plan does not include any assistance from the new seller, Western NRG to configure it once it's installed. Dell used to sell the device but apparently Dell spun off the SonicWALL device, and Western NRG picked it up.

If you want to call it that. 

The division of labor between Dell and Western NRG takes a flow chart to understand, but if you have a problem with the device, rest assured that Dell will tell you Western NRG can fix it, and Western NRG will tell you that Dell can fix it. Neither one will, though.

Fix it, that is. They will, however, gladly take your money .

Sure, they give you software and a hardware warranty, but those provide little benefit if the device isn’t configured correctly.Which you will have to pay to get, and pay more than the device itself is worth.

Who knows of a good firewall device that also provides support? Dell and Western NRG don’t, in my humble opinion.



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, March 10, 2016 at 15:22. Comments Closed (15) |

Personal Injury Law Just Got Trickier For Hospitals

What Is Reasonable and Necessary?

We thought the tort law in personal injury cases was fairly well defined, but a new appellate opinion has got hospitals and their attorneys in a dither, while plaintiffs and their lawyers are throwing a big party.

Especially now that they can afford it.  Let me explain.

Michael Huff got injured in a car accident and went to the hospital.  When he left the hospital's care seven days later, it slapped him with a $34,000 bill that he didn't pay.  Huff's lawyer then sued Steven and Matthew Wilkins for negligence in causing the car collision that injured Huff.  State Farm insurance defended the Wilkinses.  The hospital, Pioneer's Memorial Healthcare District, duly filed a lien in Huff v. Wilkins, claiming the $34,000 that Huff owed.

The jury awarded Huff more than $350,000, and before State Farm could even get out its checkbook to pay Huff, the hospital said, "First dibs on the $34,000 that Huff owes us."

That's legal talk, in case you missed it.

Summoning all of the chutzpah they could muster, Huff's lawyers replied to the hospital, "Hold on there, bucko, those expenses weren't needed."

That's more legal talk.  I'm getting into a pattern here in case you were wondering.

Like any good neighbor, State Farm put the disputed $34,000 in the Court's hands and told Huff and the hospital that they had to fight over the disputed money. 

In legal talk, that step is called an interpleader.  I know, legal talk is really boring.  That's why I was warming you up to the first couple of legal phrases like "first dibs" and "bucko."  Well, sure enough, Huff and the hospital both told the Court that they wanted the $34,000.  At the trial of the matter, four things happened:

1.  The hospital submitted the bills that Huff didn't pay;

2.  Huff told the hospital that he had no insurance but should bill the Wilkinses;

3.  The hospital submitted its lien notice that it sent to State Farm; and,

4.   Huff's personal injury attorney confirmed that he had submitted all of Huff's medical bills in the case Huff filed against the Wilkinses and authenticated the $350K Judgment in Huff's favor.

Notice what's missing.  Didn't notice?  Well, how about the hospital's proof of the expenses it charged to Huff?  Nowhere did the hospital say that the charges were reasonable or necessary.  It just said Huff incurred the expenses.

Those are magic words in personal injury law.  "Reasonable and necessary."

You see, in order for the hospital to recover the $34,000 lien that it placed on Huff's recovery of the $350,000, the hospital should have proved that the expenses it charged Huff were both reasonable and necessary.  Under the Hospital Lien Act at California Civil Code sections 3045.1-3045.6 (a whopping five subparts), the hospital can only recover on its personal injury lien if it can prove that the expenses were both reasonable and necessary.

Look back on that list of four items that were introduced in the trial.  Look carefully to see if there's anything there about the expenses being "reasonable" or "necessary."  Can't find it?  Neither could I, and I wrote it.

That's because the hospital either forgot or failed to do so.  Now comes the Court's ruling.  Because the hospital had the opportunity in the trial to introduce this evidence, say through a doctor who treated Huff, but failed to do so, the hospital got stiffed.

That's right:  no recovery for the hospital, and Huff walked away with the $34,000.  But don't get excited.

I suspect this case isn't completely over, however.  Despite the hospital's failure to recover on its lien, the hospital can still sue Huff on both a breach of contract and equitable basis.  Huff did get $34,000 in services that he apparently still hasn't paid for, and with this loss, that debt is pretty high on the hospital's radar screen.  We'll see.



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, June 11, 2013 at 14:01. Comments Closed (0) |

You Can't Stop Your Home Address From Being Given to Your Union

Local 721 of the Service Employees International Union is the exclusive bargaining representative of all Los Angeles County employees.  No one employee can even ask his or her boss for a raise.  SEIU speaks on behalf of everyone, whether the employees want them to or not.  I don't know.  I've never been in a union.

But from the sounds of the requirements, I'm not sure I would like it, especially because just about everyone else thinks the union is more important than the employees.

That's the sum and substance of the most recent California Supreme Court ruling on the subject.  Let me give you a quick rundown of the facts here.  First, the SEIU wanted the County to provide the home addresses of all County employees, including those the Union doesn't represent.

Let's just cut to the chase.  Our Supreme Court sided with the Union. 

The County initially refused to provide its employees' home addresses.  The LA County Employee Relations Commission decided that refusal was an unfair labor practice.  The County sued.  The Los Angeles County Superior Court then denied the County's petition for relief.  The County appealed, and the appellate court held that the County must provide the home addresses of its employees, but imposed an "opt-out" procedure that would allow employees who had privacy concerns to not provide their home addresses to the Union.

The Union, at all times, was able to reach the employees it represented while they were at work.

After the appellate court ruling, however, the Union appealed to the California Supreme Court, which reversed the appellate court's opt-out procedure, saying that the "balance" between the Union's "right" to know and the employees' privacy tipped in favor of the Union "who represented them" - even though there are County employees who have opted out of union representation. 

You be the judge here.  Which is more important?  Your privacy or your union?



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Monday, June 03, 2013 at 10:06. Comments Closed (0) |

When Is An Insurance Agent Not An Agent?

When She's the Middleman!

You may be surprised to learn that an insurance broker, despite the broker's more commonly known name of "insurance agent," isn't really always considered an agent of the insurance company.  Sure, there are some insurance companies that actually have insurance agents, like Farmers and Allstate, but not other companies that lack an actual agent force who sells only for that particular company. 

Why is this distinction important?

Just as American Way Cellular.  It purchased an insurance policy for its warehouse from Travelers through an insurance broker (note the name, "broker") and then as you would expect, had a fire loss.  That's right.  The warehouse burned down.  When it submitted a claim for coverage, Travelers denied the claim because the application, filled out by the broker, said that the warehouse had a sprinkler system.

As I am sure you have already guessed, the Court of Appeal in American Way Cellular v. Travelers didn't just issue this guidance for our benefit, it was deciding the lawsuit that erupted between American Way Cellular and Travelers.  American Way didn't have a sprinkler system (thus the reason that there was more damage), so Travelers cited the application condition and denied American Way's claim. 

Ouch.

American Way sued claiming that it was Traveler's insurance agent who wrongly wrote down on the application that it had a sprinkler system, so it was really the broker's fault, and therefore, since the broker was an agent of Travelers, Travelers had to pay the fire claim.

By definition, a broker can sell insurance for more than one company.  According to the Second District Court of Appeal here in Los Angeles, that ability means that the broker is not an agent of any of the insurance companies the broker represents, but instead a "middleman."

A "middleman?"

Yep.  The guy in between.  The one who takes a cut, but cannot act on behalf of the insurance company.  But wait a minute here.  The definition says, "represents."  Doesn't an agent also represent?  Yes, but. 

Here, that "but" means that in order for the situation to rise to the level of an agency relationship between the broker and the insurance company, the Court of Appeal ruled, "the principal, and not the agent, must make statements or commit acts causing the person relying on the apparent agency to believe the agency exists."

So, when an insurance broker or agent tells you that he/she is the agent of the insurance company, don't believe them.  Make sure you get something from the insurance company where the insurance company tells you who its agent is. 

That's a pretty stiff requirement to do a lot of extra work when you're buying an insurance policy, especially if you don't review in advance the application that the insurance broker fills out before it is sent to the insurance company.  You might just not have any insurance coverage like American Way Cellular, Inc. didn't if your broker fills out the application wrong, perhaps mistakenly checking the box that says you have a sprinkler system when you don't.  Then, after a fire, you've got no coverage, and most likely an insurance broker who doesn't carry enough insurance to cover the cost of the broker's mistake.

Double ouch.

We can't tell from the opinion whether that's the case here, but logic initially tells us that's the case since American Way sued Travelers Insurance instead of the insurance broker.  If that's the case, and given the results of this appellate opinion, American Way was just out of luck all the way around.

Triple ouch.

This case is a hard one to take a lesson from, however, because we find out the real reason coverage was denied and that denial was upheld by the Court of Appeal.  This case may fall into that realm where one fact makes bad law.  Here's the fact they don't list up front in the opinion:  apparently, one of the owners of American Way told the broker that it had a sprinkler system in its warehouse when it didn't.  As an aside here, and this is just a guess, but there may be a reason why the owner said the warehouse had a sprinkler system:  insurance companies offer lower premiums for sprinkler systems.

That's the real reason why American Way didn't sue the broker.  The broker was just doing as he was told to do.  That's also the most likely reason that the Court of Appeal reached the decision it did.  Even if there was an agency relationship between Travelers and the broker, the negligence was on the owner's side, not the agent or the insurance company's side. 

But wouldn't it have just been easier to say it the way I just said it instead of creating a whole bunch of extra work to find out whether they guy or gal that sells you insurance is a broker or an agent?

Perhaps.

But then you wouldn't really know whether your coverage is good or not.  Better to review the application before the broker/agent sends it off to the insurance company, and better to know whether you can take what the agent says as if the insurance company said it.

That way, when the fire comes, you won't have to hire me to sort it all out for you.  By doing your homework ahead of time, the problem will never affect you.

And that's the best kind of legal advice:  the advice that avoids the problem altogether.



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, May 31, 2013 at 18:09. Comments Closed (0) |



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