Allegheny County Deed Registry Has Improved Real Estate Practice.

No. 550

After six months, some still don’t like having to submit deeds for pre-approval before recording. But despite protests, the experiment with deed screening has clearly proved that the new system is worth keeping.

Yes, it is embarrassing to have your shortcomings pointed out. But what is the alternative? Making mistakes.

Truth is, correcting errors after recording was more costly and more time consuming. Another truth: too often the errors remained uncorrected. Fixing the problem then falls upon whoever handles the next transaction.

Deb Bieber, who presently manages the Department, says that most of her staff works on fixing mistakes committed in the past — before the new system was introduced. She expects this process to continue for many years. But at least there will be far fewer new ones going forward.

Well done, Deed Registry.

CLT

Category: Pittsburgh, Real Estate
Tags: Deed Registry

Rendell: “A Nation of Wussies”! Quick, Call Bartlett’s.

No. 549

So, Ed Rendell in his last days as Governor of our Commonwealth, tells the entire United States that it is becoming a “Nation of Wussies” because the Eagles/Vikings game was postponed on Sunday due to the mega-snowstorm. It seems that the snowfall didn’t hit Philly as hard as New York and Boston and he would have liked to have seen the game.

Excuse me, Governor, but it seems to us that some other officials, not you, exercised leadership in keeping vehicles off the highways while road crews cleared the in-hindsight less than a blizzard snowfall.

Great name for a team, though: the Philadelphia Wussies.

CLT

Category: Humor and Satire, News Commentary
Tags: Ed Rendell > Nation of Wussies

Don’t Be Bitter, Young Lawyer.

No. 548

Dear colleague:

Sometime when I wasn’t looking, a blog called Bitter Lawyer made it to the No. 2 spot on the AVVO Blogs — moving ahead of that blonde law professor from Wisconsin, Althouse. It was inevitable. Althouse has been gravitating to shorter and shorter posts for years, until she will eventually have nothing but one word to say. And Bitter Lawyer can be rather entertaining . . . for a while. Consider the classic video, broadcast under the “Living the Dream” label, currently on display: “Typo.” [No you are not going to look at it until I am done here.]

“Typo” may strike a chord with you, like it did with me. But it is a sad, yes bitter one. It subjects the classic law firm culture that has grown increasingly ugly during the last 20 years or so to devastating ridicule.

Okay, spend a few wasted hours with Bitter Lawyer. Watch all of the episodes of “Living the Dream” if you can handle the pain. But don’t go back there too often. You won’t learn anything that you don’t already know. And, eventually, it will make you bitter too.

So, get out of here! Go watch “Typo.”

Category: Blawging
Tags: Bitter Lawyer > Living the Dream > Typo

Nutmeg Lawyer is the Best Legal Blog in America, no kidding!

No. 547

Just check out the testimonials. ABA Best 100 Blawgs for 2010!

But don’t take their word for it — read the blog yourself. Its more entertaining than anything you are going to find on television. And its free! Unless, of course, you want to read it on your Kindle. Then its $1.98. The new layout makes it even better than before.

So then, how does Pittsburgh Legal Back Talk rank? It’s the best legal blog in Western Pennsylvania. Take my word for it.

CLT

Category: Blawging
Tags: ABA Best 100 Blawgs

Maintaining Personal Secrecy in an Age of Transparency.

No. 546

Mark Zuckerberg, founder of Facebook, is the Time Magazine 2010 Person of the Year. From Time’s account, Julian Assange of Wikileaks was not far behind. Both represent a trend toward disclosure of information which would have been considered out of bounds by just about everybody not long ago.

Of course, people who post on Facebook presumably know that information shared with friends could end up in the hands of enemies. And we have all been warned that what is posted on the internet stays there forever. But you need to be aware that another electronic medium, one that you may think is private and secure, is even more dangerous than Facebook: your business email account.

Do not mix personal and business email — especially if you are an employee and use email for business all day. Yes, your boss can read your email and yes, the account can be hacked. But even if neither event happens, you could find yourself in deep trouble if you do not police your email. Many small businesses do a large portion of their business by email these days. That’s where its all happening. So what happens when the company becomes involved in litigation? Have you heard about electronic discovery?

So, pursuant to a discovery request, lawyers copy the whole hard drive of computers believed to contain information relevant to the case and start examining it. And what do they find?

Resumes of employees complete with cover letters, sometimes addressed to competitors;
Emails between mom and children, sometimes discussing intimate personal problems;
Jokes being circulated to a large number of friends;
Pictures, some personal, a few very personal;
New Years Resolutions;
Shopping lists, requests for errands and the like sent to spouses;
Gossip and stories, some personal, a few very personal;
Comments about co-workers, clients and bosses, some derogatory, a few defamatory, e.g.: unkind story about supervisor who “got her panties in a bunch over . . .” You get the idea.

Yes, the litigation opponent will be very interested in what you say.

No, it has no obligation to keep your personal business secret.

Yes, your employer will be even more interested than the opponent.

No, it probably won’t do you any good to erase embarrassing messages — in litigation they look for trashed messages and can usually recover them.

And yes, yes, all this can really happen to you. In fact, it is becoming more common all of the time!

You should never use your business email for anything but business. And when you do, it should be strictly business.

You could be next.

Category: Uncategorized

What the Internet Got For Christmas

No. 545

This week alone noticed MASSIVE hacking activity.

Gawker Media (also known as Lifehacker/Consumerist/Gizmodo/Jezebel) was SUCCESSFULLY hacked:http://lifehacker.com/5712785/

Paypal was attacked, but not successfully: http://www.businessweek.com/news/2010-12-09/paypal-guards-against-attack-from-wikileaks-hackers.html

Walgreens was SUCCESSFULLY hacked: http://technolog.msnbc.msn.com/_news/2010/12/10/5624759-hackers-steal-walgreens-e-mail-list-attack-consumers

McDonald’s was SUCCESSFULLY hacked: http://www.observer.com/2010/media/mcdonalds-also-hacked-user-info-compromised?utm_medium=partial-text&utm_campaign=home

Amazon Europe MIGHT have been hacked:

http://www.bloomberg.com/news/2010-12-13/amazon-denies-hacker-attack-caused-shutdown-of-european-sites.html

MasterCard was attacked, but not successfully: http://washingtonexaminer.com/news/business/2010/12/mastercards-website-hammered

But wait… the second round of hackers were successful: http://www.thewhir.com/web-hosting-news/121310_MasterCard_Website_Taken_Down_by_Second_DDoS_Attack

What does all this mean? The world of e-commerce is going to have to work on its security if it is going to grow and prosper. And so are we all.

CLT

Category: Criminal Law, Legal Technology, News Commentary

Canonsburg: Equal Opportunity Offender.

No. 544

It has become a holiday tradition, just like the Macy’s Parade. This year this exercise in Yuletide legal hairsplitting is occurring in Canonsburg, PA, the place where they pay homage all-year-round to native crooners Perry Como and Bobby Vinton.

Annually for years now, some obnoxious Scrooge somewhere complains about the Christmas Stable Scene being displayed on public property, complete with the mandatory press coverage. In Canonsburg, the City Manager hurriedly moved the Crib down the street to the Knights of Columbus, saying he feared a lawsuit. Of course, it is just as offensive to Scrooge at its new location, but there is nothing she (this one’s a woman) can do about it.

Once in a while the town fathers involved in this ritual stand up to Scrooge. That’s what happened in Canonsburg, or did it?

The Borough Council voted to bring back the religious figurines to public property. But, on advice of their solicitor, they also authorized the inclusion of Santa and whole lot of secular holiday stuff. That’s what the courts say you have to do. Frankly, I find a Christmas Creche junked up with Santa and other holiday trivia to be extremely offensive. However, I do not intend to interfere with Canonsburg. I’ll just go elsewhere.

For a very long period in Western Civilization, most of the last two Millennia, the greatest art of every kind was religious and contained a Christian religious message. You can’t separate the art from the message. But if you censor the message, you censor the art, too. This goes for music as well — the low grade contemporary holiday music is not the aesthetic equal of the traditional stock of Christmas Carols. It just isn’t.

Don’t be the unwitting victim of First Amendment political correctness. Go see the magnificent Christmas Creche in the Plaza at the USX Tower in Downtown Pittsburgh. It is identical to the one in the Piazza in front of St Peter’s in Rome and a first class work of art. Be sure to spend enough time to properly enjoy it. Then, if you really want get the holiday spirit, go down to the Heinz History Center and view “Vatican Splendor”. Regardless of your religious preferences or art education, I promise you a Christmas Miracle that cannot be equalled by all of the Santas, department store windows and film producers on the planet.

CLT

Category: Uncategorized

Obamacare and the Courts.

No. 543

Dear Non-lawyers:

Despite what they tell you on Fox News, the decision by US District Judge Hudson in Richmond means little concerning the final resolution of the issues relating to the constitutionality of the requirement that everyone acquire health care insurance by — did someone say 2013? We’ll need every minute of it, maybe more.

The Supreme Court probably won’t be parsing the Hudson opinion, as several commentators did on the news reports. They’ll be collecting opinions from various Circuit Courts of Appeals who will, over the next year or two, weigh in and be in conflict with each other on outcome and reasoning. Only then will the high court step in and resolve the issues raised in the Circuits.

And the Justices are likely to have a few ideas of their own. The outcome is unpredictable at this point in time. Patience.

CLT

Category: Civil Litigation, Constitutional Law, Consumer Protection

Do You Know Who Sancho Panza’s Master Is? To #Amazing Race Producers and Contestants, its Trivia.

No. 541

None of the six contestants (three teams of two) did on the season finale of the Amazing Race. All of them had to ask someone along the way to retrieve the answer (which was a clue) from the internet. This included the two young female doctors who won the race.

Amazing Race is by the far the best of the reality television shows. Contestants, in teams of two, race around the world, performing tasks in order to make it to each pit stop and finally to the end of the race. Successful competition requires physical fitness, stamina and the ability to solve problems quickly. Sometimes (very occasionally) it requires general knowledge, too.

It is instructive to see how different people solve problems and perform physical tasks. It is also very enlightening to observe how different people react to luck, opportunity, disaster and annoyances. Some allow personality conflicts, the need to assess blame, emotions, squeamishness and other distractions to hold them back from achieving their goals. Others fail to follow directions, lose things (like luggage or passport) or walk when they should be running.

It sounds a lot like reality, doesn’t it?

The next series, starting February 20th, 2011, ought to be especially good. The contestants will all be audience favorites who didn’t win in past episodes. Some of them were very good players and it will be an education to see what some of them do with a second chance.

Oh yes, the first modern novel featured Don Quixote de La Mancha, the knight errant, and his noble squire Sancho Panza. But you knew that.

CLT

Category: News Commentary, Personal Productivity
Tags: Amazing Race

WETTICK PARTIALLY SUSTAINS PRELIMINARY OBJECTIONS BY J P MORGAN COMPANIES AND RATING AGENCIES IN MORTGAGE-BACKED SECURITIES LITIGATION. FOUR MULTI-BILLION DOLLAR CASES PROCEED TO DISCOVERY PHASE.

No. 541

Federal Home Loan Bank of Pittsburgh v. J P Morgan Securities, LLC, J P Morgan Acquisitions Corp., J P Morgan Mortgage Acceptance Corporation I, Chase Home Finance LLC, Chase Mortgage Finance Corporation, JPMorgan Chase & Co, Moody’s Corporation, Moody’s Investor s Services, Inc., The McGraw-Hill Companies, Inc and Fitch, Inc.

No. GD09-016892

The securities suit brought by the Federal Home Loan Bank of Pittsburgh against a group of J P Morgan companies and the rating agencies they used, filed last year in the Allegheny County Court of Common Pleas, is being closely watched as a bellweather for similar cases filed by others in the FHLB system. One commentator saw the ruling in Pittsburgh as a positive sign for FHLB plaintiffs in San Francisco, Seattle, Chicago and Indianapolis, whose cases have not yet advanced to this point, since the Pittsburgh FHLB’s case survived preliminary objections on general allegations of fraud.

In an opinion filed on November 29, 2010, Judge R Stanton Wettick partially sustained preliminary objections of the rating agencies who were named as defendants in the above-captioned securities case. He also held that one of the several J P Morgan corporate defendants can be be sued for fraudulent misrepresentation claims.

The Federal Home Loan Bank of Pittsburgh (FHLB) purchased eight mortgage-backed security certificates issued by five separate trusts. The total purchase price, according to the amended complaint, was $1.7 Billion, but the certificates are only worth 60% of that amount today.

FHLB states, according to the decision, “that it would not have purchased the certificates if defendants had provided complete and accurate information regarding risks of non-payment.”

Identical issues are presented in three companion cases before the court, each involving similar investments and a cast of defendants that are partially identical. However, according to the opinion, the ruling in the instant case is being applied by the court in the three other cases.

Prior to placing the loan pool certificates on the market, the J P Morgan defendants worked with various rating agencies to direct the payment stream into tranches so that some of the certificates could receive highest ratings (AAA in the opinion), since certain investors are required, or desire, to purchase only AAA certificates.

The court considered each of the causes of action asserted against the rating agencies. With respect to the claim under Section 11 of the Securities Act, the court found that it would be necessary to characterize the rating agency defendants as “underwriters”, which they were not. “The rating agencies had no involvement in the distribution of securities.” In reaching that conclusion, Judge Wettick relied primarily upon two 2010 cases, discussed extensively in the opinion.

Next, the court addressed the claim based upon negligent misrepresentation. Initially, the court noted that where there is no direct contractual relationship between the plaintiff and a defendant, claims based on negligence will not be permitted when the damages are economic, unaccompanied by physical injury or property damage. However, there is an exception, born of the case entitled Bilt Rite v. Architectural Studio, 866 A.2d 270 (Pa. 2005), involving the negligent supplier of information. Through analysis of a case where in 2007 the Superior Court limited Bilt Rite to design professionals (Excavation Technologies, Inc. v. Columbia Gas Co., 936 A.2d 111) the court concluded that Bilt Rite was not intended by the Supreme Court to be applied to this situation. In addition, First Amendment concerns applied when the number of recipients of the information provided by the rating agencies could be very large, perhaps in the hundreds of thousands. Moreover, such reports could be classified as predictions of the future, which under applicable law would not be actionable unless the rating agency didn’t believe its predictions.

On the other hand, lack of privity does not protect rating agency defendants from fraudulent misrepresentation claims. There, the plaintiff must show that the rating agency did not believe its own statements.

The court held that there is privity between the J P Morgan entity that acted as underwriter and that fraudulent misrepresentations may proceed based upon what the underwriter knew. However, those Morgan entities whose activities ended before the activities occurred which lead to the alleged fraudulent misrepresentations.

A thorough discussion of all of the issues raised and addressed in this opinion would take too much space for a blog post. Here is a link to the full opinion.

Category: Civil Litigation
Tags: Federal Home Loan Bank of Pittsburgh > J P Morgan Securities > WETTICK

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CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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