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Boston Business Litigation Blog

Can I relocate with my child after divorce?

If you're a parent of a minor child of divorce in Massachusetts, can you relocate to a different state or country with your child (an issue the courts call "removal")?

Assuming no negotiated agreement to relocate with your co-parent (a preferred outcome in resolving these highly contentious disputes), and to help you answer this question in the context of contested litigation, Fitch family law attorneys will walk you through a judge's required functional analysis that is based on current Massachusetts law. It's a complicated process of gathering the facts of your particular case and connecting them to the correct legal standard.

Commission Payments Are "Compensation" Under the Massachusetts Wage Act

The Massachusetts Wage Act, M. G. L. c. 149, § 148, governs how and when an employee's wages must be paid and provides that an employer who fails to comply with the Wage Act may be subject to treble damages and be ordered to pay the attorneys' fees of the employee who has to turn to the courts to enforce their rights under the Wage Act. Commission payments are considered "wages" and, therefore, are governed by the Wage Act. For a commission to be "wages," the Wage Act provides that the amount of the commission must be "definitely determined" and "due and payable to [the] employee." Commission compensation has been "definitely determined" when the amount of the compensation due is "arithmetically determinable." Commission compensation is "due and payable" to the employee when "dependent contingencies have been met and it is thus owed to the employee."  Practically speaking, that means that the employee (or the court considering whether an employer has violated the Wage Act by failing to pay a commission) must be able to calculate how much commission was owed to the employee and that all of the conditions that must be met for the commission to be payable must have been met.

Property Inspections Are Not Debt Collection Under FDCPA

The United States Court of Appeals for the Seventh Circuit has held that inspections of properties encumbered by defaulted mortgages, even where the property inspector left a hang tag requesting the homeowner contact the mortgage servicer, is not debt collection under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.  Schlaf v. Safeguard Property, LLC, No. 17-2811, 899 F.3d 459 (7th Cir. 2018).

Texas Judge Dismisses Suit Against ICDR

A judge of the U.S. District Court for the Southern District of Texas has dismissed a case against the International Centre for Dispute Resolution on the basis of arbitral immunity. The holding in Wartsila North America, Inc., et al v. International Centre for Dispute Resolution, et al., 2018 WL 3870015 (S.D. Tex. 2018), C.A. No. H-18-1531, was based in large part on precedent from the First Circuit.

Does ROTC Participation Create an Emancipating Event?

In a recent decision by the Massachusetts Court of Appeals, the concept of a child's emancipation was at issue. In Bobblis v. Costa (https://www.mass.gov/files/documents/2018/10/18/17P0557.pdf), the court ruled that enrollment in ROTC does not constitute emancipation pursuant to the parties' separation agreement, as joining an ROTC program is not considered entry into the military for purposes of emancipation.

How does my pension get divided during divorce?

Part II of this blog post focuses on how pension plans are divided during divorce. You can read Part I here.

Pension plans are different than other assets divided during divorce because we are trying to calculate the present value of a future benefit (a benefit that will be received but has not yet been received). The process that goes into dividing a pension during divorce can be complicated. As a result, we have broken down each factor of the process to first show in a segregated way how a pension plan gets divided during divorce. We then show in an integrated way how the pension plan's disparate factors connect to complete the whole of the process of dividing a pension during divorce. The attorneys at Fitch have the deepest respect for the enormity of time, effort and dedication it takes for clients to accumulate a pension and Fitch attorneys do their very best to provide detailed information, knowledge and transparency when it comes to valuing and dividing a pension plan during divorce. The following factors are used to calculate the present value of a pension plan:

Massachusetts Court Finds Bank Not Liable for IOLTA Scam Loss

The Business Litigation Session of the Massachusetts Superior Court has joined other courts in holding that a bank is not liable to its customer for wiring money to a foreign account at the customer's instruction. The Plaintiff, Sarrouf Law LLP ("Sarrouf"), alleged negligence and breach of the California Uniform Commercial Code, but the Court found that the UCC expressly displaced common law and that the bank's conduct comported with the UCC's requirements.  Sarrouf Law LLP v. First Republic Bank, No. SUCV2016-03069-BLS1 (Mass.Super. Aug. 2, 2018).

Seeking Special Findings of Fact Regarding Special Immigrant Juvenile Status (SIJS) in the Probate and Family Court

Congress created the classification of "special immigrant juvenile" in the Immigration Act of 1990, providing that a certain percentage of immigrant juveniles would be allowed to petition for lawful U.S. permanent residency (i.e. "Green Card") if they met specific requirements. 8 U.S.C. § 1101 (a) (27) (J). In 2008, Congress passed the William Wilberforce Trafficking Victims Protection Reauthorization Act ("TVPRA"), which amended and clarified SIJS requirements.

Emails and Agreement for Judgment Can Satisfy Statute of Frauds

Many consumers and corporate executives alike believe that in order to have a contract that a court will honor, a prospective litigant must produce a written contract signed by both parties to the agreement.  In fact, oral agreements are often enforceable, but Massachusetts law provides through the colorfully-named "Statute of Frauds" that certain categories of contracts must be in writing to be enforceable. Mass. Gen. Laws ch. 259, §1 provides several categories of contracts that can only be enforced by way of a civil action if there is a written agreement "signed by the party [or an agent of the party] to be charged therewith," including agreements for the sale of land and other real estate, and contracts that cannot be performed within one year.  

Seeking Special Findings of Fact Regarding Special Immigrant Juvenile Status (SIJS) in the Probate and Family Court

Congress created the classification of "special immigrant juvenile" in the Immigration Act of 1990, providing that a certain percentage of immigrant juveniles would be allowed to petition for lawful U.S. permanent residency (i.e. "Green Card") if they met specific requirements.  8 U.S.C. § 1101 (a) (27) (J).  In 2008, Congress passed the William Wilberforce Trafficking Victims Protection Reauthorization Act ("TVPRA"), which amended and clarified SIJS requirements.

Neighbors and Trees; Common Disputes and How They Are Treated Under Massachusetts Law

It has been said that "the best time to plant a tree was 20 years ago. The second best time is now."  These words reflect the wisdom that few things are as beautiful and capable of enhancing the appeal of property as much as a mature tree.  It is therefore not surprising that an entire body of law exists concerning tree-related disputes between neighbors.

Getting the All Clear: Court Found Law Firm's Reliance on Representation from Bank that Funds had Cleared was Unreasonable

In Colucci, Colucci, Marcus & Flavin, P.C. v. Citizens Bank of Massachusetts, No. CV 15-13536-GAO, 2018 WL 1567605, at *1 (D. Mass. Mar. 30, 2018), the United States District Court for the District of Massachusetts awarded summary judgment to Citizens Bank of Massachusetts ("Citizens Bank") on a law firm's claim of negligent misrepresentation, finding that the law firm's reliance was unreasonable pursuant to New York law.

What are the Rule 410 Mandatory Document Disclosures?

The Rule 410 Mandatory Self Disclosure provisions of the Supplemental Probate and Family Court Rules is one of the most basic, yet misunderstood, requirements of divorce litigants.

Jim Brooks Community Stabilization Act Fails to Pass

Last month, the Judiciary Committee of the Massachusetts House of Representatives essentially killed any chance of the passage of the Jim Brooks Community Stabilization Act, Bill H.4142, by "referring the Act to study," a euphemism generally understood in the Massachusetts legislature to mean that a bill will languish and, eventually, fail to pass.

Third Circuit Holds FDCPA Statute of Limitations Runs from Violation, Not Discovery

The United States Court of Appeals for the Third Circuit has split with the Fourth and Ninth Circuits and held, en banc, that civil lawsuits alleging violations of the Fair Debt Collection Practices Act("FDCPA"), 15 U.S.C. § 1692 et seq., must be filed within one year of the alleged violations, and that the statute of limitationsis not tolled until the violations are discovered by the plaintiff.  Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018).

Supreme Court Holds That Foreign Companies Cannot Be Sued Under Alien Tort Statute

The Supreme Court of the United States has held in a recent decision that foreign corporations that have committed human rights violations outside of the territory of the United States may not be sued in the United States federal courts under the Alien Tort Statute, 28 U.S.C. §1350.  In Jesner v. Arab Bank, PLC, 138 S.Ct. 1386 (2018), the plaintiffs (and the persons on whose behalf the plaintiffs advanced claims) were foreign nationals who were allegedly injured or killed by terrorist attacks in Israel and Palestine.  Plaintiffs claimed that Jordan-based Arab Bank, PLC was partly liable for those injuries and deaths because individuals and organizations that supported and funded Hamas and other alleged terrorist organizations had accounts with Arab Bank that were used to pay the families of suicide bombers.  Id. at 1394.       

What Is the Length of the Marriage When There Is More than One Complaint?

The Alimony Reform Act specifies statutory limits for the duration of alimony depending on the length of the marriage. The shorter the marriage, the shorter the duration of an alimony obligation. The length of marriage is defined as the "number of months from the date of legal marriage to the date of service of a complaint or petition for divorce or separate support." But what happens in the event that there is more than one complaint for divorce, or complaints for support and modification? What becomes the "end date" of the marriage so that one can determine how long the marriage was and, consequently, how long the alimony obligation will last?

How Does My Pension Get Valued During Divorce?

A pension is one of the hardest earned assets a spouse can own. Divorce professionals are acutely aware of this and take great care to apply the same kind of focus, hard work and attention to detail to value a pension as the plan owner applied to earning it. This blog will be divided into two parts. The first part will explain the nature of a defined benefit pension plan and detail the information required to properly value a pension. The second part, to be published August 13, 2018, will focus on how pension plans are divided during divorce.

When Determining Alimony, the "Length of the Marriage" May Start Before "I Do"

The United States Census Bureau shows the median age of individuals at the time of their first marriage is becoming increasingly older for both men and women.  Meanwhile, the number of unmarried individuals cohabiting with their significant others is growing. These trends may be due in some part to couples delaying the responsibilities of marriage as they focus on their careers, but here is something all couples should know: for purposes of determining the length of a marriage for an alimony award, the period of premarital cohabitation could be included regardless of whether both parties were contributing financially.

My Home Contractor Is Unresponsive And Abandoned The Project Before Completion: What Damages Can I Recover?

Dealing with an unresponsive contractor who abandons a project before its completion is unfortunately a situation that many homeowners face.  Left with an incomplete bathroom or kitchen, the homeowner has no choice but to promptly find a new contractor to complete the project, usually at a higher price.  As discussed below, there are different categories of damages that a homeowner can recover.

Do Former Corporate Officers Hold the Attorney-Client Privilege Jointly with the Corporation?

Until late 2017, the question of whether a former officer of a Massachusetts corporation has access to attorney-client privileged communications made while that officer was employed at the corporation, had not been directly addressed by Massachusetts courts.

Inadequate Petition For Grandparent Visitation Must Be Dismissed

In a decision handed down on May 3, 2018, the Massachusetts Appeals Court reversed a Probate and Family Court Judge's ruling and held that the court must dismiss a petition for grandparent visitation "when the petition does not sufficiently allege why visitation is necessary to protect the child from significant harm." See Martinez v. Martinez-Cintron, No. 17-P-1056 (Mass. App. Ct. May 3, 2018).

The Wage Act and Equity Grants: Some Risks That Startup Should Consider

One of the biggest challenges startups and early stage companies face is attracting and retaining talented employees.  When the potential of a company outstrips its ability to pay market value salaries, compensation packages that include grants of stock or options can bridge the gap until the business has sufficient cash flow.  There are many advantages to these compensation arrangements, but companies need to be aware of some of the legal pitfalls as well.

Appeals Court Confirms Neighbors' Easement Grants Right To Use of Beach in Hingham Harbor

In a recent case, the Massachusetts Appeals Court affirmed a Land Court decision holding that plaintiffs hold easement rights to access and use a beach in Hingham Harbor close to the parties' homes.  Kane v. Martel, 92 Mass. App. Ct. 1130, at *1 (2018).  Litigation between the neighbors over beach rights had been ongoing for more than a decade when the Appeals Court rendered its decision on March 5, 2018, a fact representative of the often bitter and protracted nature of disputes over beach access between neighbors living on the water in Cape Cod and other Massachusetts vacation destinations. 

Passive Debt Buyers are not "Debt Collectors" Under Massachusetts Fair Debt Collection Practices Act

In an important decision for debt investors, the Supreme Judicial Court has ruled that passive debt buyers are not "debt collectors" under the Massachusetts Fair Debt Collection Practices Act ("MDCPA").  The decision, Dorrian v. LVNV Funding, LLC, can be found here. 

What happens at a pre-trial conference?

Many litigants, particularly in highly contested divorce or custody modification actions, often insist that their case will never settle, and will ultimately need to proceed to a trial.  In fact, only a very small portion of such cases which are filed in the Massachusetts Probate and Family Court proceed to a trial.  This is due in part to one of the most important court dates for both lawyers and litigants alike: the pre-trial conference.

Enforcement of International Arbitration Agreements Belongs in Federal Court

In the United States, the Federal Arbitration Act ("FAA") provides the rules that govern most arbitrations, and is binding on both state and federal courts.  See 9 U.S.C. § 1 et seq.  But the FAA is "something of an anomaly" in federal legislation as it "bestow[s] no federal jurisdiction."  Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 582 (2008).  So motions to compel arbitration or enforcement proceedings must be brought in state courts unless there is some independent basis to assert jurisdiction (such as federal diversity jurisdiction).

A Reverse Mortgage Provision Incorporates The Statutory Power Of Sale Even Though It Omits The Word "Statutory"

Massachusetts is a non-judicial foreclosure state, meaning that a mortgagee is authorized to foreclose on a mortgaged property without obtaining prior court approval. The ability of a lender to exercise its "power of sale," that is without court approval, exists only if such power is granted in the mortgage itself.  If the mortgage does not contain a "power of sale" provision, the lender is left with two time-consuming options to recover the amount due under the loan: either file suit or conduct a foreclosure by entry, which takes three years.

Fiduciary Litigation Pilot Project of the Probate & Family Court Expanded

The Probate & Family Court recently announced that the Fiduciary Litigation Pilot Project under Standing Order 3-17 (https://www.mass.gov/probate-and-family-court-rules/probate-and-family-court-standing-order-3-17-fiduciary-litigation) has been expanded to apply to cases filed in Essex and Plymouth Counties.  Previously, the pilot project applied to case filed only in Middlesex, Norfolk and Suffolk Counties.

I Didn't Quit - You Fired Me!

An employee who voluntarily quits their job is, in most circumstances, not entitled to collect unemployment benefits or sue their employer for wrongful termination.  However, an employee who believes they were forced to quit their job because their working conditions were intolerable may be able to argue that they were "constructively discharged," meaning that the termination of their employment is viewed not as a resignation but as though the employee was fired. In such circumstances, an employee who might not otherwise have been able to apply for unemployment benefits or to make a claim against their employer for wrongful termination will be permitted to do so.

Land Court or Superior Court? Choosing a venue for your property dispute.

Parties involved in a real estate dispute in Massachusetts are fortunate to have choices when it comes to the venue of the litigation. One of the most strategic decisions that a plaintiff or defendant can make is deciding where to litigate the case. When it comes to real property disputes, the Massachusetts Land Court and the Superior Court have overlapping jurisdiction, also referred to as concurrent jurisdiction, on certain claims.  While the Superior Court enjoys broad jurisdiction over a variety of civil and criminal matters, the Land Court specializes in disputes involving real property. Massachusetts General Laws Chapter 212, § 26A, permits either party to remove any non-jury civil action involving "any right, title or interest in land" from the Superior Court to the Land Court.  The claim must not be one that entitles a party to a jury trial because the Land Court only conducts jury-waived trials, frequently called bench trials.

Computer-Based Phone System Does Not Violate TCPA Prohibitions on Use of Automatic Telephone Dialing Systems

The United States District Court for the Southern District of Florida has agreed with the Northern District of Illinois's reasoning in Arora v. Transworld Systems Inc., 2017 WL 3620742 (N.D. Ill. Aug. 23, 2017), and found that a loan servicer's use of a computer-based phone system to contact an individual's cell phone without permission does not violate the Telephone Consumer Protection Act's ("TCPA"), 47 U.S.C. § 227, prohibition on the use of Automatic Telephone Dialing Systems ("ATDS").  The plaintiff in Ferrer v. Bayview Loan Servicing, LLC, 2018 WL 582584 (S.D. Fla. Jan. 25, 2018) alleged that Bayview Loan Servicing, LLC's ("Bayview") calls to her cell phone after she revoked consent constituted prohibited use of an ATDS pursuant to the TCPA. 

Beware the Convention on the International Sale of Goods

Would it surprise you to learn that when you see a clause in your international sales contract stating that Massachusetts (or any other State's) law applies, that it actually incorporates an international treaty that will likely supersede the Uniform Commercial Code ("UCC")?

Removal Cases Before Determining Custody Arrangements

Removal matters - where one parent seeks to move with a child or children either to another state or to a place within the Commonwealth that is far enough away to cause a significant impact on the parenting plan - are amongst the most fraught cases that attorneys and courts have to wrestle with. Unlike most other issues that arise in the context of parenting, removal matters do start to resemble zero-sum conflicts where the stakes can be enormous.

You May Not Have Until December 31, 2018 to Avoid Losing the Alimony Deduction

One of the new provisions of the new tax reform bill - background here - is that the long-standing tax deduction for alimony will no longer be available for separation agreements and divorces obtained after December 31, 2018.  Specifically, the reform applies to "any divorce or separation instrument . . . executed after December 31, 2018" (emphasis added).  

Bitcoin: What's its Worth in Court?

The price of Bitcoin has recently skyrocketed, rising from $1200 per Bitcoin in the second quarter of 2017 to $ 10,000 per Bitcoin in 2018. However, the law has not kept pace: critical questions remain regarding how Bitcoin should be valued. For example, if Bitcoin is fraudulently transferred, how should damages be calculated? In February 2016, in the first case of its kind, the U.S. Bankruptcy Court for the Northern District of California held that, for the purpose of the fraudulent transfer provisions of the U.S. bankruptcy code, Bitcoins are not the equivalent of United States dollars. However, the court left open whether Bitcoin should be valued as a currency or a commodity.

Bitcoin: What's its Worth in Court?

The price of Bitcoin has recently skyrocketed, rising from $1200 per Bitcoin in the second quarter of 2017 to $ 10,000 per Bitcoin in 2018. However, the law has not kept pace: critical questions remain regarding how Bitcoin should be valued. For example, if Bitcoin is fraudulently transferred, how should damages be calculated? In February 2016, in the first case of its kind, the U.S. Bankruptcy Court for the Northern District of California held that, for the purpose of the fraudulent transfer provisions of the U.S. bankruptcy code, Bitcoins are not the equivalent of United States dollars. However, the court left open whether Bitcoin should be valued as a currency or a commodity.

District of Columbia Court of Appeals Upholds CFPB's Single-Director Power Structure

Authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (the "CFPB") is an agency of the United States government that regulates banks, credit unions, debt collectors, and many other sectors of the American financial services industry. 

Fiduciary Litigation Pilot Project Provides Streamlined and Specialized Venue for Probate Litigation

One of the first questions that any attorney and potential litigant must consider when deciding whether to file a lawsuit is where to bring the case. Since November 2017, potential probate litigants in three Massachusetts counties have a new venue to consider, the Fiduciary Litigation Session, or "FLS", at the Norfolk Division of the Probate and Family Court in Canton, Massachusetts. The parameters of the FLS are outlined in Probate and Family Court Standing Order 3-17. Borrowing elements of the successful Business Litigation Session at the Suffolk Superior Court, /blog/2015/10/the-specialized-role-of-the-business-litigation-session.shtml, the FLS's goal is "to provide a specialized forum for the speedy resolution of contested and complex probate litigation cases and to provide individualized and collaborative case management to reduce the costs associated with fiduciary litigation." http://www.mass.gov/courts/case-legal-res/rules-of-court/probate/pfc-orders/3-17.html

Web-Based Dialing System Does Not Violate TCPA Prohibitions on Use of Automatic Telephone Dialing Systems

The United States District Court for the Northern District of Illinois has found that a debt collector's use of a web-based dialing system to contact an individual's cell phone without permission does not violate the Telephone Consumer Protection Act's ("TCPA"), 47 U.S.C. § 227, prohibition on the use of Automatic Telephone Dialing Systems ("ATDS").  The plaintiff in Arora v. Transworld Systems Inc., 2017 WL 3620742 (N.D. Ill. Aug. 23, 2017) alleged that Transworld System Inc.'s ("Transworld") calls to his cell phone without his consent constituted prohibited use of an ATDS pursuant to the TCPA.

The Pregnant Workers Fairness Act: Recommendations for Employers

On April 1, 2018, the Pregnant Workers Fairness Act (the "Act") takes effect. https://malegislature.gov/Laws/SessionLaws/Acts/2017/Chapter54. The Act amends Massachusetts' anti-discrimination law, G.L. c. 151B, which applies to employers with six or more employees, to now include pregnancy and related conditions as protected categories. The Act requires employers to provide "reasonable accommodations" for pregnancy and related conditions, including breastfeeding and the need to express breast milk, so long as the accommodations do not cause the employer "undue hardship."

Tax Reform Bill Eliminates the Alimony Deduction

The new tax reform bill (https://www.congress.gov/bill/115th-congress/house-bill/1), which was signed into law on December 22, 2017, eliminates (http://money.cnn.com/2017/12/15/pf/taxes/alimony-tax-bill/index.html) the tax deduction for alimony payments for separation agreements and divorces obtained after December 31, 2018.

Medical Marijuana in the Workplace

In a recent landmark decision, Barbuto v. Advantage Sales & Marketing, LLC, the Supreme Judicial Court ruled that an employer that terminated an employee for testing positive for marijuana use (which violated the company's policy) could be found to have discriminated against the employee on the basis of her handicap. At the time she was hired, Barbuto was informed that the company would require her to undergo a drug test. She informed the company that her physician had provided her a written certification that allowed her to use marijuana for medical purposes, due to the fact that she suffered from a debilitating medical condition under Massachusetts law; she also agreed that she would not use marijuana before work. The employer told her that a positive result for marijuana would not disqualify her from the position. Despite having made that assurance, following Barbuto's first day of work Advantage Sales terminated her employment due to the positive drug test, on grounds that the company followed federal law, not state law. The use of marijuana for medicinal purposes, while legal in Massachusetts at the time (the non-medicinal use of marijuana had not yet been legalized), was still a crime pursuant to federal law. Therefore, the use marijuana for medical purposes, even while legal in Massachusetts, could still subject the user to federal criminal prosecution. Barbuto sued Advantage Sales, alleging (among other things) that she had been discriminated against on the basis of her handicap. In Massachusetts, a "handicap" is a physical or mental impairment that substantially limits one or more major life activities of a person (or a record of having such impairment or being regarded as having such impairment). Massachusetts law prohibits employers from terminating or refusing to hire an employee because of their handicap if that employee is capable of performing the essential functions of the position involved with "reasonable accommodation," unless the employer can demonstrate that the accommodation that would need to be made would impose an undue hardship to the employer's business. A reasonable accommodation is an adjustment or modification to a job (or the way it is done or the environment in which it is done) that makes it possible for the handicapped individual to perform the essential functions of the job. An employer who receives a request for a reasonable accommodation from a handicapped person is required by Massachusetts law to engage in an interactive process with the employee to ascertain whether the requested accommodation is reasonable and, if not, whether another accommodation can be made that would be reasonable. The Massachusetts medical marijuana law provides, "Any person meeting the requirements under this law shall not be penalized under Massachusetts law in any manner, or denied any right or privilege, for such actions." Advantage Sales claimed it owed Barbuto no obligation to participate in the interactive process to identify a reasonable accommodation before it terminated her employment because, it alleged, the accommodation she sought violated a federal statute and was, consequently, unreasonable. It also alleged that she was terminated because she failed the drug test in violation of company policy, not because of her handicap. The SJC rejected Advantage Sales' first argument on grounds that the fact that Barbuto's possession of medical marijuana violated federal law does not make it per se unreasonable as an accommodation. It noted that only the employee was at risk of federal criminal prosecution for her possession of the medical marijuana, not the employer. It concluded that to hold otherwise would operate to deny handicapped employees the right to or privilege of a reasonable accommodation under Massachusetts law. It also pointed out that, even if the requested accommodation had been unreasonable, Advantage Sales was still obligated to participate in the interactive process of trying to craft another, equally effective accommodation that was reasonable (which it had not done). The Court rejected Advantage Sales' second argument on grounds that it would permit employers to enact policies that would enable them to do an end-run around handicap discrimination laws (i.e., by adopting company policies that would deny employees reasonable accommodations). The Court reversed the lower court's dismissal of Barbuto's claims of handicap discrimination and sent the case back to the lower court to determine whether her use of medical marijuana would impose an undue hardship on Advantage Sales' business and would, therefore, not be a reasonable accommodation. The Barbuto decision does not mean that employers must permit the use of marijuana even by handicapped employees. The significance of the decision is, instead, that use of medical marijuana might constitute a reasonable accommodation available to a qualified handicapped employee even if the employer has a no-tolerance drug policy or federal law prohibits the possession of marijuana. When the use of medical marijuana is proposed as an accommodation by a qualified handicapped employee, employers must engage in the interactive process to determine whether it is reasonable and, if not, whether another reasonable accommodation exists. 

The Positive-Selfish-Side of Effective Co-Parenting

In contested custody cases where a child rejects contact with a parent, the rejected parent often accuses the aligned parent of engaging in alienating behaviors that are intended to sever the attachment between the child and the rejected parent.

Obtaining Discovery in the U.S. for Use in Foreign Tribunals

Foreign litigants recently successfully sought the assistance of the United States District Court for the District of Massachusetts in obtaining discovery of Massachusetts residents and a Massachusetts company for use in a foreign proceeding.  See In re Penner, No. 17-CV-12136-IT, 2017 WL 5632658 (D. Mass. Nov. 22, 2017).  The foreign litigants in that case relied on a Federal Statute, 28 U.S.C. § 1782, that permits U.S. District Courts to order discovery for use in foreign proceedings under certain circumstances.  Section 1782 provides, in pertinent part, "[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal."  In granting discovery pursuant to Section 1782, the Penner court relied upon the United States Supreme Court's analysis of that statute in Intel Corp. v. Advanced Micro Devices, Inc. 

Can An Exchange Of Text Messages Between Real Estate Brokers Create An Enforceable Contract For The Sale of Land?

Nowadays, it is not uncommon for real estate brokers to communicate with their clients and negotiate deals through text messages. The use of text messages in that context has given rise to a new legal issue: whether an exchange of text messages between brokers can create an enforceable contract for the sale of land.

Mass. Appeals Court Rejects Bank's Attempt to Hold Surviving Spouse Liable for Late Husband's Refinancing Note

The Massachusetts Appeals Court recently denied a mortgagee's attempt to invoke the doctrine of equitable subrogation to hold the surviving spouse of a mortgagor liable for a second mortgage on their residence--owned by the married couple as tenants in the entirety--that had been procured and signed only by the deceased spouse. 

50/50 Parenting: Quantity versus Quality

I recently came across Edward Kruk, PhD's article in Psychology Today entitled "Equal Parenting and the Quality of Parent-Child Attachments." The article summarizes research on parenting plans that I have found useful in support of some clients' requests for equal parenting time (R. Bauserman, "A meta-analysis of parental satisfaction, adjustment and conflict in joint custody and sole custody following divorce," Journal of Divorce and Remarriage [2012]; W.V. Fabricius, "Parenting time, parent conflict, parent-child relationships, and children's physical health," Parenting Plan Evaluations: Applied Research for the Family Court [2011]).

International Arbitration War Wages Over Pineapples

The Court of Appeals for the Eleventh Circuit will be the next body to weigh in on a dispute between Del Monte International GmbH ("Del Monte") and Inversions y Procesadora Tropical INPROTSA, S.A. ("INPROTSA") over an exclusive sales agreement for pineapples. The case has been appealed to the Eleventh Circuit, and the appeal raises issues of the finality of international arbitration awards.

ATM Operators Not Required to Disclose Third Party Fees

The United States District Court for the District of Maryland has confirmed that an ATM operator is not required to disclose the amount of fees charged by a third party, such as the cardholder's financial institution, for the transaction. The plaintiff in Alston v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 103026 (D. Md. Aug. 5, 2016) filed a putative class action against Wells Fargo and Capital One arising from charges for his withdrawal from his Capital One account at a Wells Fargo ATM.

Massachusetts Superior Court Decides That Right to Arbitration was Waived Due to Litigation Conduct

In a recent Superior Court decision, a judge held that there is a presumption that courts, not arbitral tribunals, have exclusive jurisdiction over the issue of whether a party has waived a contractual right to arbitration by engaging in substantial litigation before a motion to compel arbitration was filed.

Construction Defects In Condominiums: What Owners And Prospective Buyers Should Know About Common Areas

An often-overlooked downside to the surging real estate market is that the demand for good contractors often exceeds the supply. As a result, the risk of poor quality construction tends to rise as builders rush to complete jobs or use workers that are not up to the task. In the context of condominiums, the risks of construction defects present some unique complications for unit owners when the defect is found in a common area such as a roof, elevator, or staircase.

CFPB Anti-Arbitration Rule Repealed

On Wednesday, November 1, 2017, President Donald Trump signed legislation repealing an anti-arbitration rule that the Consumer Financial Protection Bureau ("CFPB") had promulgated in early July.  Repeal of the CFPB rule was welcomed by representatives of the financial services industry.

Young v. Young: The SJC Places a Time Limitation on the Determination of "Need" in the Alimony Reform Act

In the Alimony Reform Act of 2011, St. 2011, c. 124 ("the Act"), "alimony" is defined as "the payment of support from a spouse, who has the ability to pay, to a spouse in need of support for a reasonable length of time . . . ."  G. L. c. 208, § 48.  However, because neither "ability to pay" nor "need of support" are defined in the Act, Probate and Family Court judges are given the discretion to balance numerous other factors, such as the parties' ages, health, incomes, and economic and non-economic contributions to the marriage, in order to arrive at a fair alimony award.  See G. L. c. 208, § 53 (a).

Creative American Arbitration Association (AAA) Procedure Offers Cost-Savings for Three-Arbitrator Panels

The American Arbitration Association ("AAA") has announced on its website that it is offering a "Streamlined Three-Arbitrator Panel Option" for large, complex cases.  It's a fresh idea that is worthy of parties' consideration in cases where the rules (see Section L-2(a)) or the parties' agreement requires a panel of three arbitrators to hear and decide the case. The Streamlined Three-Arbitrator Panel Option allows a single arbitrator to work with the parties in moving the case through the preliminary and discovery stages. A full panel participates in the evidentiary hearing and in rendering the final award.

Failure to Record Complaint Requires Dismissal Under Statute of Repose

The Massachusetts Land Court has held that a plaintiff's failure to timely file a copy of a complaint challenging a foreclosure with the registry of deeds, as required by Mass. Gen. Laws c. 244, § 15, requires dismissal of a complaint challenging the subject foreclosure.  Kenney, et al. v. Brown, et al., No. 16 MISC 000530 (Mass. Land Court July 27, 2017).

U.S. Supreme Court Limits Scope of FDCPA.

On June 12, 2017, the United States Supreme Court decided a case captioned Henson v. Santander Consumer USA, Inc., No. 16-349.  In an opinion authored by newly-appointed Justice Neil Gorsuch and hailed by the financial services industry, the unanimous Court held that a company may collect debts that it purchased for its own account without implicating the statutory definition of "debt collector" set forth in the federal Fair Debt Collection Practices Act ("FDCPA").

A Notice of Default That Does Not Strictly Comply With Paragraph 22 Of The Mortgage Renders a Foreclosure Sale Void So Long As The Issue Of Noncompliance Was Asserted In Court Before July 17, 2015

The Supreme Judicial Court ("SJC") recently held that its holding in Pinti v. Emigrant Mtge Co., 472 Mass. 226, which was decided on July 17, 2015, "applies in any case where the issue was timely and fairly asserted in the trial court or on appeal before July 17, 2015."  Federal National Mortgage Association v. Marroquin, 477 Mass. 82, 74 N.E.3d 592 (May 11, 2017).

Derivative suits on behalf of LLCs: No futility exception? Not so fast.

Must all derivative suits in Massachusetts be preceded by a written demand that a company take action?  No. Members (shareholders) of a limited liability company seeking to bring suit derivatively on behalf of the LLC can do so without written demand.  

Signing Certified Mail Receipt Satisfies Requirement to Acknowledge Receipt of Borrower's Request for Information

The United States Court of Appeals for the Eleventh Circuit has held, in a matter of first impression, that signing a borrower's certified-mail return receipt can serve as a loan servicer's acknowledgment of receipt of a borrower's written request for information. Meeks v. Ocwen Loan Servicing LLC, No. 16-15536, 2017 WL 782285, at *1 (11th Cir. Mar. 1, 2017).

Haunted House Hunting and the Duty to Disclose

In a competitive real estate market like Greater Boston's, more homebuyers are agreeing to what previously would have been seen as a draconian contract term: purchasing a home without first conducting an inspection. But today, in a hot seller's market, it may be a buyer's best hope to landing the winning bid. The perils of buying a home before learning about things like the property's structural soundness would spook most anyone, not just the most risk adverse.  But what about the intangibles that even a traditional inspection wouldn't reveal? One Massachusetts statute defines the obligations of a seller of real property that is potentially "psychologically impacted." Specifically, G.L. ch. 93, § 114, carves out "alleged parapsychological or supernatural phenomenon" as a non-material fact, that is, information that does not need to be disclosed by a seller during a real estate transaction.  

Superior Court Denies College's Attempt to Hold Auditor Liable for Failure to Detect Employee's Fraud

In an important recent decision in the Business Litigation Session of the Massachusetts Superior Court, Judge Kenneth W. Salinger rejected Merrimack College's attempt to hold its auditor KPMG, LLP liable for its failure to discover an employee's fraud.  

A Parenting Coordinator Can Help Prevent Hostile and Dictatorial Toned Emails Counter-Productive to Effective Co-Parenting

In Leon v. Cormier the MA Appeals Court upheld a contempt judgment against a mother who violated a parenting coordinator's order related to the mother's e-mail communications with the father. Specifically, the parenting coordinator ("PC") ordered that "as a rule, emails between [the parties] should . . . occur during . . . designated Tuesday email time. The ONLY exceptions are in the case of significant emergency or a necessary change in logistics that must be established for something that is to occur prior to the next Tuesday email time."

How Do Criminal Charges Issue?

When an individual is charged with a crime over which the District Court has jurisdiction (all misdemeanors, felonies punishable of a sentence of up to five years and certain other felonies), a criminal complaint issues against them. A criminal complaint is the document that identifies the crime that is alleged to have been committed. Before a criminal complaint can issue, there must be a finding by a magistrate that there is probable cause for the complaint to issue. A magistrate is a District Court official who is authorized by law to authorize the issuance of criminal complaints and issue process (such as an arrest warrant or summons). Probable cause is a very low standard; it simply means that reasonably trustworthy information exists that is sufficient to warrant a prudent person to believe that a crime has been committed and the accused is the perpetrator.

Massachusetts Prenuptial Agreement Signed One Day Prior to Wedding Upheld: Size and Formality of Wedding and Prior Divorce Matters

The Massachusetts Appeals Court has issued a Rule 1:28 Memorandum and Order in a divorce case entitled Roof v. Abelowitz upholding the validity and enforceability of a prenuptial agreement that the wife signed only one day prior to the wedding.  The court considered two particularly interesting factors in finding that the wife's waiver of rights under the prenuptial agreement was valid.  In this case, the size and formality of the wedding and the prior married and divorced status of the wife carried weight.

Are The Costs Of Mediation Recoverable In Fee-Shifting Cases?

Cost can be a deterrent when parties are considering whether to mediate a complex business dispute. Mediation is an excellent opportunity to settle a case in advance of costly trial preparation, but mediation requires parties to pay for both a mediator and their attorneys' time to prepare for and attend the mediation. Are those costs recoverable if mediation is unsuccessful and findings at trial require the losing party to pay the winning party's attorneys' fees and costs? According to recent federal case law in the District of Massachusetts, the answer to that question depends on the basis of the fee-shifting award.

Probate and Family Court Standing Order 1-17 Sets Rules for Parent Coordinators

A parent coordinator can be a blessing in high-conflict divorce or support cases involving parenting and custody of a child or children. Occasionally, parents, for one reason or another, are unable to communicate effectively about parenting time, extracurricular activities, or expectations of each other or the children. At other times, parents simply may not see eye-to-eye about what is in the best interests of the children. These disagreements, or differences as to how to communicate, can have serious repercussions on the stability of the children and make it difficult, if not impossible, to co-parent. A skilled parent coordinator can be a very valuable resource in addressing these issues and helping to resolve conflicts.

District of Columbia Court of Appeals will Rehear PHH v. CFPB

Authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (the "CFPB") is an agency of the United States government that regulates banks, credit unions, debt collectors, and many other sectors of the American financial services industry.

Failure to Comply With Post-Foreclosure Notice Provisions Does Not Void Foreclosure

The Massachusetts Supreme Judicial Court ("SJC") has held that a bank's failure to comply with post-foreclosure notice provisions in Mass. G.L. c. 244, § 15A ("Section 15A"), does not render a foreclosure void.  Turra v. Deutsche Bank Trust Company Americas, 476 Mass. 1020 (2017).  The SJC's decision clarifies its prior rulings that appeared to state that any failure to comply with a provision appearing in Mass. G.L. c. 244, §§ 11-17C, rendered a foreclosure void.

The Ninth Circuit Holds that the Enforcement of a Security Interest is Not Always "Debt Collection" Subject to the Fair Debt Collection Practices Act

The United States Court of Appeals for the Ninth Circuit recently held that a lender's agent is not a "debt collector" within the meaning of the Fair Debt Collection Practices Act ("FDCPA") when it sends certain notices to the borrower in connection with a non-judicial foreclosure. Ho v. ReconTrust Co., NA, 840 F.3d 618, 621 (9th Cir. 2016).

What a Financial Statement Is and Why You Need One

Many clients describe the Rule 401 financial statement as "a giant pain," "putting square pegs into round holes," or "the most annoying thing I've ever done in my life." While filling out a financial statement can often be fairly simple, sometimes it can take days or even weeks of work. Filing a financial statement may actually happen many times over the course of a proceeding, and the parties may even choose informally to exchange financial statements on a voluntary basis. Why is it then, that almost every party to a domestic relations matter has to fill out a financial statement?

Ninth Circuit Holds Opt-In Foreclosure Notice Statute Violates Due Process

The United States Court of Appeals for the Ninth Circuit has joined the Fifth Circuit in finding that a statutory scheme in which mortgage lenders were required to affirmatively opt-in to receive notice of foreclosures by homeowners' associations violates the lenders' due-process rights under the 14th Amendment. Bourne Valley Court Trust v. Wells Fargo Bank, N.A., No. 15-15233, 2016 WL 4254983 (9th Cir. Aug. 12, 2016).

D.C. Circuit Rules Structure of Consumer Financial Protection Bureau Unconstitutional

In a highly anticipated decision and the first judicial review of a Consumer Financial Protection Bureau ("CFPB" or the "Bureau") administrative enforcement action, the United States Court of Appeals for the District of Columbia Circuit ruled in October 2016 that the CFPB's single Director structure violated separation of powers principles and was unconstitutional. PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1 (D.C. Cir. 2016). 

Whistleblower Act: Allegations of Retaliation Fail Where the Conduct for Which the Retaliation is Alleged Was Committed by Co-Workers, Not Employer

The Whistle Blower Act, Mass. General Laws Ch. 149 § 185(b), provides that a public employer may not retaliate against a public employee who has (1) "blown the whistle" or, in other words, disclosed an activity, policy or practice of the employer that the employee believes is a violation of a law, rule, or regulation and a risk to public health, safety or the environment; (2) provided information to a public body conducting an investigation into such activity; or (3) objected to or refused to participate in such activity. Retaliation under the Act includes any adverse employment action, such as demoting, suspending or firing the employee who makes the disclosure or objects to the activity.

Lesson in Co-parenting from the Presidential Debate

A final question to the candidates during a recent presidential debate reminded me of a topic that often comes up in the context of co-parenting work in high-conflict cases, interviews by custody evaluators, questioning at depositions in custody disputes, documents submitted to a judge, and oral arguments at custody hearings or trials.

Ninth Circuit Joins the Dissenter, Holds that Employers Can Not Prohibit Concerted Actions

The Supreme Court may soon be taking on an issue that has divided several of the federal circuit courts. The circuits disagree on a fundamental question that relates to arbitration and labor law - whether an agreement to arbitrate is valid when an employee waives the right to bring claims against an employer as part of a class or collective. In other words, can an employee be barred from being part of a class action lawsuit where there is an agreement to arbitrate and a waiver of the right to pursue collective claims?

D.C. Circuit Sends Claims Against Airbnb for Discrimination to Arbitration Proceedings

Recently, the #Airbnbwhileblack hashtag started floating around social media as a way to bring awareness to several reported instances of African Americans having issues with booking accommodations through Airbnb, a service that allows peer-to-peer short-term rentals of houses and apartments. Indeed, research has found that African-American users of Airbnb frequently encounter racial discrimination as they try to find a place to stay.

Potential Regulation of Overdraft Services on Checking Accounts Still Under Consideration by the Consumer Financial Protection Bureau

By: Nathalie K. Salomon

The Consumer Financial Protection Bureau (CFPB) is considering potential regulations related to overdraft services on checking accounts.  An overdraft occurs when a consumer withdraws more money than he has in his account.  When a bank covers the transaction, it charges an overcharge fee in return.

Massachusetts Appeals Court Reaffirms MERS' Role As Mortgagee

The Massachusetts Appeals Court, in a Rule 1:28 decision, has once again reaffirmed its holdings in Sullivan v. Kondaur Capital Corp., 85 Mass.App.Ct. 202 (2014) and Shea v. Federal Natl' Mort. Assn., et al., 87 Mass.App.Ct. 901 (2015), that the Mortgage Electronic Registration Systems, Inc. ("MERS") system of mortgage assignments comports with Massachusetts law.  The Appeals Court further reaffirmed that MERS' status as mortgagee, even "solely as nominee for [lender] and [lender]'s successors and assigns," grants to MERS all the rights and powers of a mortgagee, including the right to foreclose and exercise the power of sale in the mortgage.  Epps v. Bank of America, N.A., et al., 15-P-1095, 2016 Mass. App. Unpub. LEXIS 974 (Oct. 11, 2016).

Appeals Court Holds That Condominium Owners Can Waive Constitutional Rights In Bylaws

The Massachusetts Appeals Court considered whether a provision in condominium by-laws unfairly prevented individual unit owners from seeking the intervention of the court where the unit owners alleged that the condominium's trustees had breached their fiduciary duties and mismanaged the condominium's affairs. In Bettencourt v. Trustees of Sassaquin Village Condominium Trust, the owners of three units in a twelve-unit condominium sued the three trustees who had hired a contractor to pave the condominium's parking lot without first putting the matter to a vote of all of the unit owners. The paving work resulted in $950 special assessments against each unit owner. The trustees alleged that the plaintiffs' claims were barred by the condominium by-laws, which contained a provision (referred to as a "consent requirement") that required unit owners to obtain the assent of at least 80% of the unit owners before filing suit against the trustees. The plaintiff unit owners had not obtained that assent before filing suit in this case.

International Recovery of Child Support

On August 30, 2016, President Obama signed the instrument of ratification for the Hague Convention on International Recovery of Child Support and Other Forms of Family Maintenance. A White House press release of the same date describes the Convention's "numerous groundbreaking provisions that, for the first time on a global scale, will establish uniform, simple, fast, and inexpensive procedures for the processing of international child support cases, which benefits children and those responsible for their care."  

Driving Away From the Courts: Uber Drivers Must Arbitrate

In a recent decision, the Ninth Circuit Court of Appeals in San Francisco, ruled that private arbitration agreements between Uber and two former drivers in California and Massachusetts were valid and enforceable. The former drivers, who were seeking protections for themselves and on behalf of a proposed class of drivers from Uber's policies via a lawsuit in the federal courts, are now forced to return to arbitration, where they must seek individual redress. This strikes a heavy blow against Uber drivers in similar circumstances, who seek to be classified as employees rather than as independent contractors.

Ninth Circuit Denies Class Action For Allegedly Fraudulent Mortgage Modification Delays and Subsequent Foreclosures

The United States Court of Appeals for the Ninth Circuit has refused to reinstate a putative class-action suit accusing numerous banks and other mortgage servicers of fraudulently enticing mortgagors into applying for mortgage loan modifications to continue collecting servicing fees prior to foreclosure.  The Ninth Circuit panel agreed with the United States District Court for the Central District of California and the defendants that the servicers were not at fault for the foreclosures where the borrowers failed to pay their mortgages.  Casault v. OneWest Bank, et al., 2016 WL 4137656 (9th Cir. Aug. 4, 2016).

How To Obtain Record Title To a Parcel of Land When a Recorded Plan Shows That You Own It but a Prior Recorded Plan Says Otherwise

By: Nathalie K. Salomon

To determine who owns a parcel of land, it is necessary to conduct a title examination at the registry of deeds of the county where the land lies.  A title examination involves two aspects: (1) a determination of the chain of title to identify the successive deeds, from the current owner of the property back to the original owner, and (2) a review of the descriptions of the property contained in each deed.  There are many ways of describing a property.  It can be described by reference to monuments or courses and distances.  Examples of monuments are identifiable roads (such as "the road leading from Webster to Thompson"), barns, railroads, stakes and stones.

Federal Circuit Rules that Patent Suits Can Continue to Be Filed in Any District Where Defendant is Subject to Personal Jurisdiction

In a highly anticipated decision, the Federal Circuit recently issued an opinion denying a request made by TC Heartland LLC ("Heartland") for new restrictions on where patent suits can be filed.  In Re TC Heartland LLC, No. 2016-105, slip. op. (Fed. Cir. April 29, 2016).  

A Primer On The Defend Trade Secrets Act

A trade secret in the United States, once protected under state common law and state statute, is now officially a matter of national importance.  President Barack Obama signed into federal law on May 11, 2016 the bi-partisan Defend Trade Secrets Act (DTSA), which creates, among other things, a federal cause of action for theft or misappropriation of trade secrets used in, or intended for use in, interstate or foreign commerce. See Pub. L. 114-153, 130 Stat. 376 (2016); see also 18 U.S.C. § 1836(c) ("The district courts of the United States shall have original jurisdiction of civil actions brought under this section."). "Trade secrets are the commercially valuable designs, processes, techniques, and other forms of information kept confidential by companies because, by virtue of their secrecy, they give companies an edge in a competitive marketplace."  H.R. Rep. No. 114-529, at 2 (2016).  Significantly, the DTSA provides ample remedies. It expressly permits relief for aggrieved trade secret owners in the form of compensatory and punitive damages, injunctive relief, and attorney's fees (in egregious cases). Furthermore, under both extreme and exigent circumstances, a plaintiff may, upon a sufficient factual showing, obtain an order seizing goods in commerce to protect against the unlawful dissemination of the trade secret, sales made in furtherance of the misappropriation, and the destruction of evidence.

DFPB Proposes Rule That Would Restore Consumer Right To Sue Banks

In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the United States Supreme Court ruled that the Federal Arbitration Act preempts state laws that prohibit consumer contracts from disallowing class-wide arbitration.  On May 5, 2016, however, the Federal Consumer Financial Protection Bureau (CFPB) proposed a new rule that would restore consumer's rights to bring class action lawsuits against banks and other certain financial firms.

Massachusetts Supreme Judicial Court Rejects Challenge To Attorney's Authority To Conduct Foreclosure Activities For Client Without Written Authorization

The Massachusetts Supreme Judicial Court (the "SJC) has rejected a challenge to the authority of an attorney to conduct foreclosure activities on behalf of clients without specific written authorization to perform those activities.  See Federal National Mortgage Association v. Rego, et al., No. SJC-11927, 2015 WL 10895667 (Mass. May 24, 2016).  At a foreclosure sale conducted by GMAC Mortgage, LLC, Federal National Mortgage Association ("Fannie Mae") purchased the home formerly owned by Edward and Emanuela Rego.  When Fannie Mae filed a complaint for summary process in the Housing Court seeking possession of the home, the Regos argued that the foreclosure sale was void because the attorneys for GMAC lacked authority to undertake foreclosure activities on GMAC's behalf because their actions had not been authorized by a prior writing pursuant to Mass. Gen. L. c. 244, § 14 ("Section 14").

Appeals Court Dismisses HAMP-Based Negligence Claim

In a post-foreclosure lawsuit, Santos v. U.S. Bank National Association, et al., 2016 WL 3636049 (Mass.App.Ct. 2016), a borrower ("Santos") alleged inter alia that a foreclosing mortgagee ("U.S. Bank") and its loan servicer negligently handled his applications for a HAMP loan modification.  Santos argued that the defendants "negligently failed to adhere to the HAMP guidelines in processing his loan modification applications." 

HAMP was implemented in response to the 2008 financial and housing crisis.  Congress enacted the Emergency Economic Stabilization Act of 2008, which led to the Making Home Affordable Program introduced by the Secretary of Treasury ("Treasury"), from which HAMP is derived.  HAMP was designed to provide some relief to homeowners facing foreclosure by encouraging loan servicers to offer loan modification agreements that reduce mortgage payments.  For each permanent loan modification completed, the loan servicer receives incentive payments (consisting of $1,000 per modification and other incentives).  If a loan is not owned or guaranteed by the Federal National Mortgage Association ("Fannie Mae), then a loan servicer may elect to participate in HAMP by executing a Servicer Participation Agreement ("SPA") with Fannie Mae, in its capacity as financial agent for the United States.  The Treasury and Fannie Mae issued HAMP guidelines but the enforcement of HAMP is the responsibility of Federal Home Loan Mortgage Corporation ("Freddie Mac").  

In 2009, U.S. Bank executed an SPA with Fannie Mae.  Prior to the foreclosure of his home, Santos applied multiple times for a loan modification under HAMP.  Santos participated in a three-month temporary plan as part of the HAMP application process.  His applications for a permanent loan modification agreement under HAMP, however, were ultimately denied by U.S. Bank and its loan servicer.  Thereafter, the foreclosure sale took place.  While a post-foreclosure summary process (i.e., eviction) action against Santos initiated by U.S. Bank was pending, Santos filed a separate suit against U.S. Bank and the loan servicer.

Santos argued that U.S. Bank and its loan servicer were negligent in handling his loan applications under HAMP.  The Appeals Court rejected Santos' argument.  In doing so, the Appeals Court relied on the well-established principle in the First Circuit that HAMP does not create a duty of care owed by a mortgagee to a borrower, which essentially represents the general consensus among courts across the country that "there is no private right of action under HAMP and that borrowers are not intended third-party beneficiaries of SPAs or similar contract between lending banks and Fannie Mae." 

Since HAMP is a federal program, the Appeals Court recognized that issues related to the interpretation of the HAMP contract, such as a private right of action or intended beneficiary status, are largely controlled by federal law.   The concept of duty of care - the Appeals Court explained - is determined by applying state common law principles.

  Adopting the reasoning and analysis of the majority of courts across the country, the Appeals Court concluded that "under Massachusetts law, HAMP does not impose a duty of care owed by lenders banks and servicers to borrowers."  Consequently, the Appeals Court ruled that Santos' negligence claim fails as a matter of law.

This case should put an end to the borrowers' efforts in Massachusetts to assert, against lending banks, negligence claims based on the HAMP guidelines.

We invite you to learn more about Fitch Law Partners LLP's banking law practice on our website.

Supreme Judicial Court Reconsiders What It Means to Be a Legal Parent in Massachusetts

Last month, the Commonwealth's highest appellate court considered how legal parenthood is defined in the context of children born to a same-sex couple as a result of artificial insemination.  The case, Partanen v. Gallagher, is currently under advisement by the Supreme Judicial Court.  The Court's opinion could result in new parameters for what it means to be a parent in Massachusetts.  At issue is the scope of the legal rights that an unmarried woman, who was previously in a relationship with the child's biological mother when the child was conceived using artificial insemination, enjoys after the relationship ends.

Employers May Not Prohibit Class Actions, Holds The 7th Circuit

The 7th Circuit Court of Appeals recently created a schism between the Circuits that may lead to the Supreme Court's intervention on an important issue: whether an employer may bar employees from bringing class action claims by requiring claims to be arbitrated. The 7th Circuit, in deciding that employers cannot do so, has diverged from the 5th Circuit, leaving a circuit split that the Supreme Court will now likely be compelled to resolve.

CFPB Proposes Rule That Would Restore Consumer Right To Sue Banks

In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the United States Supreme Court ruled that the Federal Arbitration Act preempts state laws that prohibit consumer contracts from disallowing class-wide arbitration.  On May 5, 2016, however, the Federal Consumer Financial Protection Bureau (CFPB) proposed a new rule that would restore consumer's rights to bring class action lawsuits against banks and other certain financial firms.  

Division of Banks Issues Warning About ATM 'Skimming'

The Massachusetts Division of Banks (the "Division") has issued a letter to Non-Bank ATM Registrants in the Commonwealth to warn them about a "concerning increase" in ATM skimming fraud.  The Division's March 16, 2016 letter is published on its website.

Land Court Holds Unsigned Memorandum of Understanding Not Sufficient To Bind Parties to Real Estate Conveyance

In a recent Land Court case, the Court held that an unsigned Memorandum of Understanding regarding an ownership interest in a home on Nantucket was not binding upon the parties.  In Slover v. Carpenter, Walter Boyd Jr. and his sister Josephine Carpenter owned a house on Nantucket as tenants-in-common.  No. 14 MISC 487353 KFS, 2016 WL 54899, at *1 (Mass. Land Ct. Jan. 4, 2016).  Ms. Carpenter's daughter Katherine Slover and her husband claimed that Ms. Carpenter had repeatedly promised orally and in writing to transfer her one-half interest in the property to them.  Id.  Ms. Slover and her husband had been long-time tenants of the property under a ten-year lease signed by Mr. Boyd and Ms. Carpenter, but had held over at the expiration of the lease and continued to occupy the property.  Id.  Mr. Boyd notified Ms. Slover and her husband that the lease would not be renewed, and that the property would revert to the common family usage.  Id. at *3. 

For Better (But Not For Worse): Premarital Agreements May Offer Protection From Marital Debt

Prior to walking down the aisle in 2014, celebrity power-couple Kanye West and Kim Kardashian entered into a prenuptial agreement, a fact that was far from surprising given that Forbes pegged the parties' respective net worths at $100 million and $40 million dollars, approximately. While prenuptial agreements for the ultra-rich are nothing new or noteworthy, it was West's alleged financial woes, not his fortune, that recently made waves across the internet. The hip-hop mogul took to Twitter last month to bemoan that he was $53 million in "personal debt". 

West's bizarre outbursts left many scratching their heads as to how the numbers added up, particularly in light of the fact that the artist earned more than $22 million last year and his wife a cool $55 million. Sources close to West quickly clarified that the $53 million dollar sum was not, in fact, "debt" in the traditional sense, but the total amount of personal funds that the artist had invested into his own companies.

Arbitration: The Symbiosis of Statute and Contract

Arbitration continues to gain popularity as a dispute resolution method, primarily due to the time and cost savings it offers to parties. While Massachusetts recognizes arbitration as "a creature of contract," the Massachusetts Arbitration Act (G.L. c. 251) (the "MAA") provides the legal framework (1) to compel parties to adhere to agreements to arbitrate; (2) to enforce arbitration awards through the courts; (3) to define the powers of arbitrators; and (4) to vacate arbitration awards under certain circumstances.  

In a recent decision, the Supreme Judicial Court addressed the interplay between the power of parties to agree to arbitrate a dispute and the statutory framework that limits their contractual ability to determine how that dispute will be resolved. "Although arbitration is a matter of contract," parties may not, for example, contractually "modify the scope of judicial review" of an arbitrator's award "that is set out in... the MAA." Katz, Nannis & Solomon, P.C. v. Levine, 473 Mass. 784, 789 (2016). Restricting the grounds for judicial review of arbitration awards through the MAA - as opposed to letting parties modify or create their own - "preserves arbitration as an expeditious and reliable alternative to litigation for commercial purposes." See id. at 794-95.  

China v. the Philippines: Can Countries Ignore International Arbitration?

As President Obama meets with Asian leaders this week, his conversations with Chinese president Xi Jinping will surely touch on what has become a contentious topic with deep implications in the international community - namely, the rise of Chinese expansionism into the South China Sea. This, in turn, will reverberate on the international order and ability of countries to hold each other accountable under international treaties.

China has expanded its military footprint in the South China Sea, pushing troops and installations further and further away from its mainland. By picking up an island here and an island there, China gives itself greater control over important shipping lanes, However, as more and more countries along the South China Sea are decrying, these incursions can be construed as breaches of their territory and sovereignty. 

Honey, You May Have To Testify: The Limits of the Spousal Disqualification In Civil Litigation (the Cosby edition)

The question of whether a spouse may be called as a witness in a civil case recently came up in the civil litigation surrounding the sexual assault allegations against comedian Bill Cosby. People often reflexively (and mistakenly) think that the issue is governed by the spousal privilege. In fact, in Massachusetts the spousal privilege is only applicable in criminal cases where one spouse is the defendant. M.G.L. c. 233 sec. 20, cl. 1. In those circumstances, the spousal privilege can be invoked by a witness to avoid being compelled to testify against his or her spouse. Com. v. Szerlong, 457 Mass. 858, 865 (2010). The testifying spouse can also choose to waive the privilege if the spouse wants to testify. Because the spousal privilege is applicable only in criminal proceedings, it is essentially irrelevant in civil litigation.

Unlike the spousal privilege, the spousal disqualification in Massachusetts is applicable in both criminal and civil matters. Subject to certain exceptions, the spousal disqualification provides that "neither husband nor wife shall testify as to private conversations with the other." M.G.L. c. 233 sec. 20, cl. 2. Unlike the spousal privilege, the marital disqualification renders testimony concerning the private conversations between spouses inadmissible regardless of whether the spouse wants to testify. There are several reasons for the rule, including the notion that such testimony would be inherently unreliable due to bias, the goal of preserving marital peace, and the desire to preserve the privacy of marital conversations. Despite these straightforward reasons for the spousal disqualification, its application may often seem counterintuitive. For example, the spousal disqualification does not apply to private conversations that occurred between a couple before they were married. Additionally, the spousal disqualification applies only to conversations and does not apply to written communications. Com. v. Szczuka, 391 Mass. 666, 678 n.14, 464 N.E.2d 38, 46 n.14 (1984). Thus, attorneys and parties must be aware that emails and text messages between spouses are not protected from disclosure by the spousal disqualification.

The Benefits of Practicing in the Massachusetts Land Court

A silver lining to finding oneself involved in a property dispute is the opportunity to resolve the issue in one of the Commonwealth's specialized courts, the Massachusetts Land Court. The types of legal disputes that Land Court judges decide vary in type and scope, but they all touch upon real property. The Land Court's docket contains cases involving foreclosures, challenges to subdivision plans, and boundary disputes, among others. Pursuant to General Laws Chapter 185, the Land Court has exclusive jurisdiction over some issues and concurrent jurisdiction over others. 

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