Speculation abounds why.  Some say it is engineered to get away from the horrific lines outside the old courthouse every morning, engendered by the high readings on the security gates. There are people, you know, who don’t like taking off their belts and shoes in public.  Others say it was because the greedy Criminal Division or the greedy DA or the greedy PD wanted the space.  Whatever the reason, it makes sense for Civil Division to be located entirely in one building.

Actually, since the jurisdictional limit went up, it is not uncommon to see a dozen witnesses and spectators, multiple parties and a court reporter try to cram into one of those little arbitration rooms.  And the table sometimes gets very crowded with paper. A little more space would be a good idea all around.

But for whatever reason, its happening.  So if you are filing an arbitration case, take note of the address.  If you follow old habits, you’ll be late.

CLT

I wish there was something interesting to say, but it is just another form containing mundane information in a format keyed for data collection.  But, you can’t get past the Prothonotary (Dept. of Court Records in Allegheny County) without it. The first page is not yet on the Allegheny County Civil Division Website, which does contain various special page 2 cover sheets.

Such a notice was attached to the Complaint in a mortgage foreclosure action filed in Ohio by Countrywide Home Loans, Inc. against Karen L. Jerman.  However, the notice stated that the debt would be assumed to be valid unless Jerman disputed it in writing. Jerman’s attorney sent a letter disputing the debt and Countrywide acknowledged payment and withdrew the action.

But that was not the end of the matter.  Jerman sued the attorneys who filed the foreclosure contasining the incorrect FDCPA warning, asserting a violation of Section 1692e (2)(A), prohibiting false representations as to the debt’s character, amount or legal status.

The defense: Section 1692 k(c), providing that a debt collector is not liable if “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.”

The issue presented is whether the debt collecting law firm that made an erroneous statement to the debtor that she must dispute the debt in writing under FDCPA, is excused from liability under the bona fide error rule.

On April 21, 2010, Justice Sonya Sotomayor, writing for the majority, concluded that an bona-fide error of fact could be excused under the statute, but not an error of law. See Jurman v. Carlisle, 538 F. 3d 469.  In addition to Justice Sotomayor’s opinion, Justices Breyer and Scalia filed concurring opinions and Justice Kennedy dissented with Justice Alito joining in the dissent.

The immediate lesson here is that when mandate to give a notice, you should give the mandated notice — no more, no less.  Don’t say “in writing” when the prescribed statutory notice doesn’t.

But the real question is: where is this going?  Does this rule apply to averments in the Complaint?  If so, what kind of averments that turn out to be  mistakes of law will bring liability upon a debt collector?  Must we disclose defenses? Does failure to do so constitute mischaracterization of the legal status of the debt?  For example, what do you do if you know that the statute of limitations has run? Not sue at all?

CLT

The operation of the Marcellus Shale in Western Pennsylvania has resulted in unheard-of royalties and bonuses being paid to landowners. Using modern hydrofracturing techniques and directional drilling, Marcellus wells can greatly out-produce traditional shallow wells in the same field.

One unanticipated consequence of the Marcellus boom is that landowners who had leased oil and gas (without limitation) to operators of shallow wells in fields where Marcellus plays are now happening started looking for ways to terminate their existing leases.  One popular argument was that the old leases violated the Pennsylvania Guaranteed Minimum Royalty Act (“GMRA”) 58 P.S. § 33. The Supreme Court expedited the appeal of the Kilmer case from the Superior Court because there were 70 common pleas cases on hold, waiting for a decision.

According to the Plaintiff-appellants, the “net-back method” of calculation used to determine value of gas at the wellhead, embodied in the lease at issue and many others, violates the GMRA.  This calculation involves subtracting from the final sales price at the point of sale all of the costs paid for transportation of the gas to the point of sale by pipeline and processing of the raw gas to commercial standards.  According to the Plaintiff-Appellants, the lease calls for payment based upon the “sales price”  and by calculating 1/8 royalties on an amount less than the actual sales price of the gas, the Defendant-appellees are violating the minimum royalty requirements of the GMRA.

The lease between Kilmer et al and Elexco Land Services stated:

“For all Oil and Gas Substances that are produced and sold from the leased premises, Lessor shall receive as its royalty one eighth (1/8th) of the sales proceeds actually received by Lessee from the sale of such production, less this same percentage share of all Post Production Costs, as defined below, and this same percentage share of all production, severance and ad valorem taxes. As used in this provision, Post Production Costs shall mean (i) all losses of produced volumes (whether by use as fuel, line loss, flaring, venting or otherwise) and (ii) all costs actually incurred byLessee from and after the wellhead to the point of sale, including, without limitation, all gathering, dehydration, compression, treatment, processing, marketing and transportation costs incurred in connection with the sale of such production. For royalty calculation purposes, Lessee shall never be required to adjust the sales proceeds to account for the purchaser’s costs or charges downstream from the point of sale.”

This language, said the Plaintiff-appellants, violated the statutory language, since the GMRA did not recognize deductions from the sales price:

“§ 33. Guarantee of minimum royalties. A lease or other such agreement conveying the right to remove or recover oil, natural gas or gas of any other designation from lessor to lessee shall not be valid if such lease does not guarantee the lessor at least one-eighth royalty of all oil, natural gas or gas of other designations removed or recovered from the subject real property.”

After a lengthy recital of the arguments presented under a variety of theories by both sides, the Court noted that at the time the GRMA was adopted in 1979, it was the practice to sell gas to the pipeline owner at the wellhead.  In the 1980’s the federal government required the pipeline companies to grant access to the producers, in effect providing common carrier services of the producer’s gas to market. A small number of states, Colorado, Oklahoma, Kansas and West Virginia have held that the lessee is responsible under the lease for all production expenses until the product arrives at market.  (“First Marketable Product Doctrine”) The Plaintiff-appellants argued that because Pennsylvania had  long held that the lessee has an implied duty to market gas production for the benefit of both parties, the First Marketable Production Doctrine was a natural corollary. See: Iams v. Carnegie Natural Gas, Co., 45 A.2d 54 (Pa. 1899). However, the Court pointed out that the Iams case said nothing about calculation of royalty.  On the contrary, interpretation of the statute, not caselaw, would determine the rule in Pennsylvania. Did the legislature intend that the minimum royalty be calculated free of costs and expenses incurred between the wellhead and the downline point of sale?

Jusice Baer held that the Pennsylvania legislature had not intended such an outcome:

“In 1979, the legislature was not faced with a choice of whether the calculation should be made at the wellhead or the point of sale because they were one and the same. Therefore, we can assume that the General Assembly intended both parties’ interpretation: that the royalty should be calculated at the wellhead and at the point of sale.”

CLT

(2) While there, determine whether it will be necessary to postpone the scheduled hearing.  If so, get a green form and jot down the available dates from the calendar on the wall. The unavailable dates are marked in yellow. You will need to obtain opposing counsel’s consent to a postponement and file it later, for a fee of $10.00.

(3) Go to the Department of Court Records on the first floor of the City County Building and visit the cashier.  File your PO’s and Brief and pay the $30.00 first filing fee, unless of course you have already paid it.

(4) Serve opposing counsel.

(5) Discuss postponement of the case with counsel.  Determine whether he/she  intends to argue the PO’s or file an amended complaint. You may be able to agree on a consent order to present to Judge Wettick at his Friday arbitration motions to allow a specified number of days to file a complaint.  This is also one way to postpone the hearing date without paying the $10.00 fee.

(6) Present the consent order.

CLT

If somebody takes default judgment against you, move quickly to open it, if you can.

Pepsico had a billion-plus dollar judgment entered against it in Wisconsin last month.

The way it happened sounds familiar enough. As a North Carolina Corporation, it has a registered agent there whose job it is to accept service of the complaint and forward it to the corporate legal department. This it did, although only after a considerable delay. Then the complaint ended up on the desk of the secretary of one of the top in-house lawyers who was very busy getting ready for a board meeting. Of course, the registered agent was responsible for the complaint arriving on the eve of default judgment, but you know who caught the blame.

This is the kind of thing that has happened in one way or another to everybody who has been around for a while. Often, with prompt action, the default judgment can be opened. As a matter of fact, the Wisconsin court recently opened the Pepsico default judgment. You can probably have yours opened, too, provided you look sharp and do a few things right.

I posted on the subject of how to open a default judgment earlier this year. If you’d like to read the post, send me a comment and I’ll tell you how to find it. But don’t wait too long. You only have 10 days to open judgment.

CLT

This Post first appeared on February 9, 2009.  PLBT is bringing back some of the best posts of the past 18 years to celebrate our new look.  This post, on how to open a judgment, is worth repeating.

You are served by the sheriff with a civil complaint. The second page informs you that you have twenty days to file a responsive pleading or default judgment may be entered against you. But you don’t. You forgot.

A notice from the Plaintiff’s attorney come in the mail. You have failed to file an answer in the alloted 20 days, it states, so you must file a responsive pleading within ten days or default judgment may be entered against you.

Ten days passes and you still haven’t filed anything. You’ve been busy.

Then, you receive notice of default judgment from the Prothonotary (or Department of Court Records in Allegheny County). Damn, too late!

Maybe not.

Get to a lawyer right away. He/she may be able to save you from your procrastinating ways by promptly filing a petition to open the judgment, together with that answer you didn’t get around to filing.

Under Pennsylvania Rule of Civil Procedure 237.3, a court is required to open judgment if you follow a few simple steps. (1) File the petition to open the judgment; (2) file a verified answer at the same time that (3) asserts a meritorious defense.

It must be an answer, not preliminary objections. If you want to file PO’s, you must satisfy the tests developed by case law. See the official notes and comments. As noted in a Lycoming County Common Pleas case, Grisewood v. Grindmaster, a Commonwealth Court case (Peters Twp. San. Auth. v. American Home Land Dev.) holding that preliminary objections could satisfy the requirements of Rule 237.3 was made obsolete by the revision of the Explanatory Comment in 2001.

Under rules developed under common law, it was also required to state a reasonable defense for the late-filing or non-filing. However, in the case ofAttix v. Lehman, the Superior Court held that this was not required under Rule 237.3.

The Superior Court also held in Boatin v. Miller that failure to comply with unrelated local rules did not affect the operation of Rule 237.3, providing all of its requirements were met.

AS you may have noticed, Rule 237.3 can also applied to vacate judgments of non pros. However, as illustrated by the case of Kruis v. McKenna, there can be complications as other Rules come into play.

The foregoing is intended to be only a general introduction to the subject of opening judgments. If you are a non-lawyer and have recently (less than ten days recently) had a default judgment entered against you, do NOT attempt to prepare your own petition to open. Run, don’t walk, to a qualified lawyer. There isn’t a third chance.

CLT

TO CELEBRATE OUR NEW LOOK, PITTSBURGH LEGAL BACK TALK IS REPRISING SOME OF THE BEST POSTS FROM THE LAST 18 MONTHS.  THIS POST ORIGINALLY APPEARED IN JULY 2009. CONTRARY TO WHAT MANY MIGHT EXPECT, ABRAHAM LINCOLN WAS ONE OF THAT SELECT FEW.

Eugene Volokh, law professor/blogger, asked readers of his heavily-read blog,The Volokh Conpiracy, how many presidents had argued before the US Supreme Court, either before or after being President. Here’s what they came up with:

1. John Quincy Adams in the famous case of US v. Amistad, 40 US 518 (1841), involving slaves aboard a ship that landed in a US port. You may have seen the movie.

2. Abraham Lincoln in Lewis v. Lewis, 48 US 776 (1849). Lincoln, who despite his PR was one of the leading trial lawyers in Illinois, argued this case a few days after his term in the US House of Representatives expired.

3. Richard Nixon in Time, Inc. v. Hill, 385 US 374 (1967).

4. James A. Garfield in Ex Parte Milligan, 71 US 2 (1866), a leading case in US Constitutional Law that held that it was unconstitutional to try a citizen by a military tribunal when a civilian court was available.

5. William Howard Taft, who as Solicitor General between 1890 and 1892, would have had the opportunity to personally argue many cases before the Supremes in behalf of the government. He was also Chief Justice (the only US President to hold both offices)after his presidency, serving until his death in 1930.

Other names were mentioned by Volokh’s readers, but without citing a case or other circumstance to support the claim. I checked biographies of those presidents and could find no mention of argument before the high court. So there may be others. If any reader knows of a president who argued before the US Supreme Court, please let me know.

CLT

Some plaintiffs, like credit card issuers, win almost all of their cases by default.

When the Sheriff  serves you, the clock starts running.  In Pennsylvania, after 20 days following sheriff service the plaintiff sends you a notice in the mail saying that default judgment will be taken if a response is not filed in 10 more days.

So basically, you have a little more than 30 days (depending how quickly the letter is sent) to file something in writing. If you don’t do anything, you lose!

So, as soon as possible, talk to a lawyer. If you are not sure that this particular lawyer handles this particular kind of case, ask him or her to recommend the right lawyer to represent you.

But don’t give up without a fight. And don’t forget the time limits.

Here’s a story on point that a lawyer I know told me today.  He filed preliminary objections (on time) to a complaint by a major credit card issuer against his client.  It seemed like an open and shut case — after all, the defendant had used the card. But the complaint was not “verified” (signed) by a representative of the plaintiff, as required by the rules of civil procedure.  Instead, the verification page was signed by  the plaintiff’s lawyer, a practice that is commonplace, but usually not authorized by the rules.  After oral argument on this single issue, the judge gave the plaintiff twenty days to obtain a proper verification.

Twenty days later, the plaintiff hadn’t filed the proper verification. Whereupon, my friend filed judgment in behalf of his client against the credit card issuer. Case over — but the tables were turned. Some business organizations, it seems, are simply not equipped to respond quickly, even when the requirements are quite simple.

Here’s something else you might not know about this kind of case. When the credit card issuer sells delinquent accounts in bulk to a third party, who then tries to collect them, the odds that the new plaintiff will be able to prove its case in court are greatly reduced.  This is because card issuers usually give only fragmentary documentation to the assignee. But if you don’t respond to the complaint, you will never have the chance to make them try to prove the case against you.

CLT

PS.  Even if a default judgment is filed, your lawyer might be able to open it if you both move very quickly.  But that’s another story.

SUMMARY: If somebody takes default judgment against you, move quickly to open it, if you can.

Pepsico had a billion-plus dollar judgment entered against it in Wisconsin last month.

The way it happened sounds familiar enough. As a North Carolina Corporation, it has a registered agent there whose job it is to accept service of the complaint and forward it to the corporate legal department. This it did, although only after a considerable delay. Then the complaint ended up on the desk of the secretary of one of the top in-house lawyers who was very busy getting ready for a board meeting. Of course, the registered agent was responsible for the complaint arriving on the eve of default judgment, but you know who caught the blame.

This is the kind of thing that has happened in one way or another to everybody who has been around for a while. Often, with prompt action, the default judgment can be opened. As a matter of fact, the Wisconsin court recently opened the Pepsico default judgment. You can probably have yours opened, too, provided you look sharp and do a few things right.

I posted on the subject of how to open a default judgment earlier this year. If you’d like to read the post, send me a comment and I’ll tell you how to find it. But don’t wait too long. You only have 10 days to open judgment.

CLT