Prof. Dan Schechter’s Comments on Sundquist

My post on In re Sundquist is here.  As part of his summary of cases distributed by the California Insolvency Law Committee, Prof. Dan Schechter had the following observations on In re Sundquist:

AUTHOR’S COMMENT: Given the court’s careful discussion of the evidence, I predict that the liability phase of this decision will withstand review. I also predict affirmance of the award of compensatory damages. I am not so sure, however, about the award of punitive damages. The United States Supreme Court has sharply curtailed the allowable ratio of compensatory damages to punitive damages. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003): “The wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.” Read more…

New Local Rule 9011-1 – Get Your Clients to Sign the Documents!

This rule goes into effect December 1, 2017.  Short summary:

Anything that is uploaded must have a signature – the holographic signature – in the person’s handwriting – on the form or pleading that is being signed and uploaded.

Exceptions?  Of course:

  • The “filer,” i.e., the person who is uploading the documents, i.e., the person who has the password to get on to ecf can upload a /s/ signature of his or her signature.
  • An “employee” of the filer can sign by /s/ signature – this means the proof of service essentially.

Any other comments?

  • Of course:  If there is no signature at all, the “filer” is treated as if he/she signed the document.
  • You must get the wet copy of the signature after it is signed.
  • You must keep the signatures for five years.

THE ACTUAL NEW RULE IS AFTER THE JUMP.   Read more…

Move Over Sundquist – 9th Circuit Says Enticing a Borrower to Apply for a Loan Mod It Knows Will be Rejected is a Violation of California B & P 17200

Oskoui v. JP Morgan Chase, 851 F.3d 851 (9th Cir. March, 2017)

Issue:   Did the bank’s offer to the borrower that she apply for a loan modification which it knew would be rejected because the borrower did not qualify constitute unfair competition under California B & P Section 17200?

Holding:   Yes, at least enough to overcome summary judgment.  The borrower “was the victim of an unconscionable process.”

Appeal from district court, Judge Fernando Olguin

Judge Stephen Trott

“Mahin Oskoui sued defendant J.P. Morgan Chase Bank, N.A. (“Chase”) for damages allegedly suffered when she unsuccessfully attempted over a two-year period to modify the loan on her home.”  When she became delinquent on her house payments, she began responding to Chase letters offering her loan modifications which she found out later she did not qualify for under any circumstances.  With each application, she made certain required payments to Chase. Read more…

This is Huge . . . California Dismantling the State Board of Equalization . . . and there is very little news about it

The California Board of Equalization administers taxes that account for about a third of the state’s revenues: sales taxes, use taxes, excise taxes, even cannabis taxes.  It also serves as the state’s tax court: if you contest any audit performed by a state taxing agency (Franchise Tax Board or Board of Equalization), you would file a petition with the Board of Equalization.  Five members sit on the Board: the state controller, and four elected members who serve geographical districts.

Many of our clients owe taxes to this agency. The split will definitely affect attorneys who practice bankruptcy law

On Thursday, June 15, the California Assembly voted to dismantle the Board of Equalization and create two new agencies.  One will administer taxes, and the other will handle the tax appeals that the Board currently handles.  The change will take effect on July 1, 2017 – in two weeks. Read more…

Mortgage Refinance Calculator

This “tool” is really nice.  If you want to refi your mortgage and get a lower interest rate, you have to pay points, appraisal, other costs etc.  You’re actually in the hole for a while.  Is it worth it?  This calculator is just my style – SIMPLE and gives you a straight answer.  You can get it here.

Bringing an Action in Federal Court versus State Court.

On another list serve an attorney asked if there was any benefit to bringing an action in federal court versus state court (assuming there is diversity).  My friend Gary Wallace’s answer is great.

There are a great many differences between the two forums.  Here are some:

1.    Filing fees differ, especially post-complaint filing.  E.g., MSJ fee now $500 in state court.  Non-refundable $150 jury fee must be posted very early in the case (or waiver may result) (CCP 631).  Typical motion fee: $60.  It can add up.

2.    Time to respond to complaint: 21 days in federal court vs. 30 days in state court.

3.    Recording of proceedings:  Under federal law, each session of court and every proceeding designated by rule or order of the court or by one of the judges shall be recorded verbatim by shorthand, stenotype, stenomask, or electronic sound recording equipment. The method of recording may be elected by the district judge.  In contrast, budgetary constraints have greatly reduced the availability of court reporters in state court proceedings and there is little or no electronic recording. Read more…

San Fernando Valley Bar Association; Bankruptcy Section Program; “Settling with the Trustees” Friday, June 16, 2017, at 12 noon

Email from Steve Fox

Dear All:

This is the monthly message I send to you.

The SFVBA Bankruptcy Section monthly meeting will be this Friday.  The topic is a good one, one that we have gone back to repeatedly over the years because of many requests that we update and repeat the program. Each time, the panel of trustees and trustee attorneys look at the recent issues.  One issue will look at trustee efforts to go after the homestead exemption following the sale of the homestead.  Another will look at the goings on in a chapter 7 case where the trustee sold the family residence to a third party,  the various issues which arose and how the parties and the court dealt with the issues.  In that case, the IRS asserted that its penalty claim against the debtors had to satisfied from the Debtor’s homestead monies.  This particular case had its share of drama too. Read more…

US Trustee’s FY 2016 Annual Report on Criminal Referrals

From the report (which you access here):

The United States Trustee Program (Program or USTP) made 2,158 bankruptcy and bankruptcy-related criminal referrals during Fiscal Year (FY) 2016. This represents a 1.3 percent increase from the 2,131 criminal referrals made during FY 2015.  The five most common allegations contained in the FY 2016 criminal referrals involved tax fraud, false oath or statement, concealment of assets, bankruptcy fraud scheme, and identity theft or use of false/multiple Social Security numbers.

Of the 2,158 criminal referrals, as of January 9, 2017, formal criminal charges had been filed in connection with 16 of the referrals, 1,416 of the referrals remained under review or investigation, 723 of the referrals were declined for prosecution, and three were administratively closed.

Consumer Financial Protection Board Slaps Around Fay Servicing

“The Consumer Financial Protection Bureau (CFPB) today took action against mortgage servicer Fay Servicing for failing to provide mortgage borrowers with the protections against foreclosure that are required by law.”  The article on the CFPB website can be accessed here.

NextChapter Software – the best bankruptcy software!

This isn’t the typical substantive bk news I share but I recently started my own practice in Glendale and spent hours looking at different bankruptcy petition preparing software – Bestcase, CINCompass, etc.  Then I stumbled upon NextChapter when setting up my practice management software, Clio.  On Clio, there was a feature where you can sync your practice management software with NextChapter (that in itself is unheard of because I said to myself “great, the two softwares will “talk” to each other!)   So I looked into NextChapter and I was absolutely blown away!

No, I am not a paid spokesperson but I promised the CEO/Founder, a wonderful young women, that I would help spread the word about her amazing software.  Their customer service is amazing and their software is unmatched (plus it is much more affordable than the clunky competitors).  Here’s a link – https://nextchapterbk.com/

You can find me now at sevan@gorginianlaw.com