Tom Brady Deflategate Lawsuits

After NFL Commissioner Roger Goodell upheld the suspension of Tom Brady for the defelategate scandal, the NFL also immediately filed a lawsuit in Federal Court in New York in anticipation of an appeal by the NFL players association.  Tom Brady’s camp then filed a federal suit in Minnesota.  The judge in Minnesota has gotten rid of the suit claiming:

“Brady plays for a team in Massachusetts; the union is headquartered in Washington, D.C.; the NFL is headquartered in New York; the arbitration proceedings took place in New York; and the award was issued in New York. In the undersigned’s view, therefore, it makes eminent sense the NFL would have commenced its action seeking confirmation of the award in the Southern District of New York. Why the instant action was filed here, however, is far less clear.”

It is very interesting that Brady continues to go forward with this case where his credibility seems to have suffered significantly.  Locker room staffers emails seemed to indicate he was complicit in deflating footballs before the game and, significantly, as the NFL conducted their investigation, Mr. Brady destroyed his telephone and presumably the texts and other messages it contained.

More than likely, the appeal will focus on the length of the suspension which currently stands at four games at the beginning of next season.  The argument could well be that the time of the suspension is unprecedented for the nature of the infraction.

Bank of America Loses Foreclosure – Still Wins

Bank of America lost a ruling on interest charges on a home mortgage in a foreclosure action.  Bank of America used one witness, an attorney who was an assistant vice president and mortgage resolution associate, to prove its entire case.  With respect to the interest on the mortgage amount due, the witness testified based on a proposed final judgment, drafted by Bank of America attorneys, and not entered into evidence.  The trial judge nonetheless entered final judgment for the amount claimed.  The case was appealed, and the appellate court overturned this aspect of the case stating that the witness testified based on a document not in evidence.  Bank of America lost more than $196,000 in interest charges.

Nonetheless, with respect to the actual foreclosure, the bank was able to overcome the defenses that it did not own the promissory note in the case and therefore had no standing to bring suit.  This is a common defense in foreclosure matters.  The appellate court stated that not only did the homeowner make payments on the loan after the closing, but also that the then current owner of the note, Countrywide, had paid taxes and other fees associated with the loan.  The court noted that banks are generally not in the business of incurring unnecessary fees.  The bank therefore showed that it has standing in the matter.  As a separate note, in many of these cases it is as if the courts are saying that while the bank suing might not be the legal owner, the homeowner owes the money to someone, and between the bank and the homeowner the bank should be able to collect on the loan.  If it is the wrong bank, the rightful bank can always come along and sue the foreclosing bank for title to the property or for damages.

The bank also overcame an objection based on heresay even though the one witness did not actually enter the loan information into the computer, the appellate court felt that the witness was competent to testify as to the procedures used by the bank and the bank’s standard business practices.  The defense had argued that the bank witness was an unqualified “robo-witness”.

Foreclosure Law Firms Facing Increased Pressures

The filing of foreclosure lawsuits around the country is trending downward.  In Florida in particular foreclosure filings are down significantly.  During the foreclosure boom in Florida, many courts were forced to come up with a way to handle all of the new foreclosures being filed as the then current system was insufficient to handle such a vast amount of filings.  In response to the overwhelming filings, Miami-Dade county created what was called a “rocket docket”, a special courtroom with judges there to only handle foreclosure cases.

With the increase in foreclosures, many law firms began to expand significantly.  Many of the law firms made flat fee deals with banks to handle the foreclosures, and they would get paid once the foreclosure was completed.  However, regulations by the federal government began to kick in, which many firms state lessened their ability to receive payment.

The main such regulations are the Consumer Financial Protection Bureau and its Consumer Protection Act, as well the Fair Debt Collection Practices Act.  These regulations added additional requirements and time for processing foreclosure cases, meaning that it would take law firms longer to get paid.

Further, in 2012 Fannie Mae added a requirement that law firms did not earn their fees until everything was completed to vest title in Fannie Mae, including any post-sale motions and hearings.

With the regulations, both the time it takes for the law firm to actually get paid, together with the added due diligence expenses to handle a foreclosure file, lead to a number of firms’ demise.  Most notable in Florida was the downfall of Butler & Hosch, a firm which had 11 offices and 200 attorneys.

.LAW Domain Name

Soon there will be a new generic top-level domain name:  .LAW for lawyers.  The new domain will have a sunrise period beginning on July 30, 2015.  A sunrise period is for those large companies to register their names prior to so called cyber-squatters attempting to register the name first and later sell it back to the rightful owners.  If in fact lawyers are the only ones who can register .LAW domain names, it seems unlikely that lawyers would in fact “steal” another’s domain.  More likely large law firms with international reputations will have priority over individual practitioners during the sunrise period.  After the grace period, all other lawyers will be able to register their .LAW domains on October 12, 2015.  The cost of the domain names is expected to be between $200 and $500, significantly more than the current .COM and .NET domain names.  Whether these names will catch on remains to be seen given the still current popularity of the .COM domain.

Florida Supreme Court Ruling on Unlicensed Practice of Law by CAMs

The Florida Supreme Court has ruled that condominium association boards cannot perform certain duties they were previously able to as these duties constitute the illegal practice of law without a license.  The duties that now require a lawyer to perform are:

draft a claim of lien and satisfaction of claim of lien;

• prepare a notice of commencement;

• determine the timing, method and form of giving notices of meetings;

• determine the votes necessary for certain actions by community associations;

• address questions asking for the application of a statute or rule;

• advise community associations whether a course of action is authorized by statute or rule;

• prepare a certificate of assessments due once a delinquent account is turned over to the association’s lawyer;

• prepare a certificate of assessments due once a foreclosure against the unit has commenced;

• prepare a certificate of assessments due once a member disputes in writing the amount owed;

• draft amendments (and certificates of amendment that are recorded in the official records) to declaration of covenants, bylaws and articles of incorporation when members have to vote on these documents;

• determine the number of days to be provided for statutory notice;

• modify limited-proxy forms promulgated by the state;

• prepare documents concerning the right of the association to approve new prospective owners;

• determine affirmative votes needed to pass a proposition or amendment to recorded documents;

• determine the number of owners’ votes needed to establish a quorum;

• draft pre-arbitration demand letters;

• prepare construction lien documents;

• prepare, review, draft and have substantial involvement in the preparation and execution of contracts, including construction, management and cable television contracts;

• identify, through the review of title instruments, the owners to receive pre-lien letters; and

• oversee any activity that requires statutory or case law analysis to reach a legal conclusion.
This does not bode well for condominium association boards who are looking to save money on certain tasks which they previously could have performed without a lawyer.  The court approved a proposed advisory opinion from the Standing Committee on the Unlicensed Practice of Law.