August 7, 2011

New Georgia CoA Opinion re: Assignment of Credit Card Debt

Debt collection is a nasty business. We get calls at our law firm regularly from folks who find themselves on the wrong side of a dispute—generally a lawsuit—with a debt collector. The callers are often very confused because the company suing them is not one they recognize. It’s typically not “Chase Bank,” “Citibank USA,” or another lender; it’s a company that generally purports to either be collecting the debt on the original lender’s behalf. Of course, there’s nothing wrong with a lender assigning its rights in and to a consumer’s debt to another company, but, for the consumer’s protection, the new, unfamiliar company must produce proof that it received such an assignment from the original lender.

In Georgia, “[a] party may assign to another a contractual right to collect payment, including the right to sue to enforce the right. But an assignment must be in writing in order for the contractual right to be enforceable by the assignee. ” Wirth v. Cach, LLC, 300 Ga. App. 488, 489 (2009). But if the acquiring company (called the assignee) can’t produce proof of an assignment, then its lawsuit against the consumer must fail. After all, without the assignment, there’s no proof that the assignee has a legal right to pursue the original lender’s rights in and to the consumer’s debt.

A recent case from the Georgia Court of Appeals displays how this requirement can play out in the consumer’s favor. There, CitiBank South Dakota, N.A., issued credit to a consumer named Sandra Benson. After Ms. Benson allegedly defaulted on the account, a third-party called Asset Acceptance, LLC, sued her to recover the debt. But Asset Acceptance had a problem. Although it had evidence that CitiBank South Dakota extended credit to Ms. Benson and that another lender, CitiBank USA, assigned its right to Ms. Benson’s debt to Asset, it did not have any proof that CitiBank South Dakota had assigned its rights to CitiBank USA. In other words, the chain from CitiBank South Dakota to Asset Acceptance was missing a link: an assignment from CitiBank South Dakota to CitiBank USA. Without proof of that assignment, the consumer was entitled to summary judgment, and the judgment against her and in Asset’s favor was reversed. Click here for the full opinion.

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July 4, 2011

New Cycling Law Takes Effect

Georgia’s “Better Bicycling Bill” took effect on Friday, July 1, 2011. Among other things, the bill establishes a 3-foot “safe distance” passing zone for vehicles overtaking bicycles on the roadway. The Athens-Banner Herald has a story on the important new law here. Here’s hoping the bill makes the roads safer for cyclists.

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July 3, 2011

Don’t be a Wretched Writer

Legal writing gets a lot of press these days. Bryan Garner interviews SCOTUS justices and adds to his impressive assortment of legal writing guides. Lawyer Matthew Butterick writes an incredible book on, of all things, typography, showing us what those non-lawyers who publish for a living already know—font, spacing, alignment all add to—or detract—from the reading process. But, “legal literati” aside, lawyers as a whole still don’t get it.

Many of us write as if our reader—most often a judge or law clerk—owes us his undivided attention. We don’t polish our sentences. We bury important points in big blocks of text. We habitually write empty, ritualistic phrases like “Comes now, so and so,” archaic words like “hereinafter” and “heretofore,” silly intensifiers like “clearly,” and generally unnecessary ones like “said,” e.g., “the said agreement,” that do little more than annoy the reader. (They certainly do not convey anything meaningful.) Instead of building paragraphs around compelling topic sentences and developing our clients’ stories, we just write until we’ve said what we want to say, and then we file the brief or motion. Big mistake.

Butterick calls this mindless writing presumptuous. We presume that readers will struggle through the difficult-to-grasp prose, overlook the confusing run-on sentences, and seize upon our primary argument, but “readers are not doing you a personal favor. Reading your writing is not their hobby. It’s their job. And their job involves paying attention to lots of other writing.” And it is actually worse than Butterwick supposes because the reader’s attention is not fixed exclusively on other legal writings, briefs, and pleadings; as Texas lawyer Kendall Gray explains in a great series of posts available here, here, and here, the Internet at large stalks the reader’s attention like a hungry river crocodile. Consider how many times during a given research or writing project you “take a break” to check your email, espn.com, or the like. Judges and law clerks want to know the score of the Braves game as much as you do, and they act on those impulses just like you do. Of course, we can’t stop them from laying your brief down to check the score, but we can certainly avoid giving them a good reason to set your brief aside by making it easy-to-read and easy-to-understand.

Delivering a product that meets that criteria is difficult, though. Most of us aren’t wired to write effective, easily read and understood prose. Judge Frank Easterbrook, one of the best writers on the bench, says that short, simple prose is best, but we subconsciously fight short and simple with the same dogged determination that we litigate. Sorry for the tough love … but get over it. To be effective, you have to write short and simple prose. I’ve yet to meet anyone who genuinely believes that a key ingredient of advocacy involves unnecessarily stretching a linear 5-page argument into a circuitous 15-page one.

To learn to write well, Judge Easterbrook says, we must read a lot. (And he doesn’t mean, “read a lot of orders and briefs”; as he has said, “Lawyers tend to be wretched writers, which is odd given that the written word is their stock in trade. Perhaps the problem comes from reading principally the work of other lawyers.”) Heeding Judge Easterbrook’s advice, I recently read Stephen King’s memoir and writing guide, “On Writing.” A legal writer, a lawyer, can learn a lot from King, and  I will provide some specifics in future posts.

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May 7, 2011

Orr Receives Kenyon Award

Orr Brown Johnson LLP senior partner Wyc Orr received the A.R. Kenyon Award at the Northeastern Judicial Circuit’s 2011 Law Day Celebration at the Gainesville Civic Center. The Kenyon Award is the highest award a lawyer within the Northeastern Judicial Circuit can earn and is named in honor of long-time and renowned Hall County Superior Court judge A.R. Kenyon. Orr also served as the keynote speaker for the Law Day celebration, reflecting on the legacy of John Adams. In his stirring address, Orr challenged his fellow lawyers to follow the lead of many courageous lawyers who battled injustice whatever its form; it is “our duty,” Orr emphasized, “to stand up and speak with all our might.” For additional information about Hall County’s 2011 Law Day event, please see the following articles from the local press: “Orr Challenges Fellow Attorneys During Law Day Speech” and “Law Professionals Honored for Contributions to Judicial System.”

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September 20, 2010

Quashing Overly Broad Subpoenas in Employment Cases

My law firm represents employees who have been discriminated against in the workplace. We also represent employees whose employers failed to pay them the wages that the law requires. In those types of cases, the employer-defendant often sends subpoenas to the employee’s current employer, requesting “any and all” documents “regarding” or “pertaining to” the employee-plaintiff. The subpoena poses practical problems. As courts have recognized, it focuses the current employer’s attention on the litigation.  Worse, the subpoena burdens the current employer in a way that it likely didn’t anticipate when it hired your client, and that uninvited burden could lead the employer to resent the employee. For obvious reasons, a subpoena “sent to [an employee's] current employer under the guise of a discovery request could be a tool for harassment and result in difficulties for [the employee] in her new job.”  Graham v. Casey’s General Stores, 206 F.R.D. 251, 256 (S.D. Ind. 2002).

An employee cannot stop the subpoena from being sent, but she and her lawyer can do something about it once it is. Although one does not usually have standing to challenge a subpoena served on another, Washington v. Thurgood Marshall Academy, 230 F.R.D. 18, 22 (D.C. Cir. 2005), an individual has a “personal right” to information in employment records and, thus, has standing to challenge a subpoena that targets that information. Chamberlain v. Farmington Sav. Bank, 2007 WL 2786421 (D. Conn. Sept. 5, 2007). Therefore, when faced with a subpoena that targets employment records, the employee-plaintiff should likely move to quash it if–like most that we see in our practice–it requests “all documents” or “any and all documents” that “regard” or “pertain” to the employee.  Despite their frequent use, such requests are overly broad and improper under the Federal Rules of Civil Procedure. See, e.g., Richards v. Convergys Corp., 2007 WL 474012 (D. Utah Feb. 7, 2007) (“[A]ll documents in your possession or control regarding the employment of Jennifer R[].”); Barrington v. Mortgage IT, Inc., 2007 WL 4370647 (S.D. Fla. Dec. 10, 2007) (“Any and all documents, files and records, reflecting or relating to the employment of [Plaintiff], including but not limited to . . . .”).

The good news is that courts, generally speaking, recognize these fishing expeditions for what they are and grant employees (and new employers) relief from them. All you have to do is ask.

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August 28, 2010

Important Change in Ga. Service Rules

Plaintiffs’ lawyers take note!  As a result of the passage of Senate Bill 491, available here, you must now file your return of service within 5 days of service.  If you don’t file proof of service with the Court within 5 days of service, then the defendant’s time to answer does not begin to run until the proof of service is filed.  Under prior law, the defendant had an obligation to file his answer or responsive pleading within 30 days of service, regardless of when the return service was filed.  Now, he has an obligation to file the answer or response within 30 days of service only if the plaintiff files proof of service within 5 days of service.  Otherwise, the defendant has until the 30th day after the proof of service is filed.

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July 10, 2010

Spoliation of Evidence—Contemplated vs. Potential Litigation

This past week, the Georgia Court of Appeals handed down an opinion that should remind all practitioners of the critical importance of providing prompt, clear, and unmistakable notice to alleged tortfeasors of contemplated litigation.  In Craig v. Bailey Brothers Realty, Inc., — S.E.2d —-, 2010 WL 2652453 (Ga. Ct. App. July 6, 2010), a child was injured while playing at an apartment complex when playing around railroad crossties with protruding spikes.  Because the property owner hammered down and discarded the spikes after the child’s injury, her father argued that the property owner was not entitled to summary judgment on the child’s premises liability claim because it spoliated evidence and that spoliation created a rebuttable presumption in his favor that precluded summary judgment.  The Court of Appeals disagreed:

Spoliation refers to the destruction or failure to preserve evidence that is necessary to contemplated or pending litigation.  But notice of potential liability is not the same as notice of potential litigation.  To meet the standard for proving spoliation, the injured party must show that the alleged tortfeasor was put on notice that the party was contemplating litigation.  “The simple fact that someone is injured in an accident, without more, is not notice that the injured party is contemplating litigation sufficient to automatically trigger the rules of spoliation.”

(Internal citations omitted) (bolded emphases added).  The lesson from Craig is obvious:  Tighten up your spoliation/notification letters and, if litigation is contemplated, then you best expressly say so.  If you don’t, your client will likely find himself without an effective remedy when evidence is destroyed.

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July 4, 2010

Important COA Opinion re: Service in Georgia

Lawyers, particularly those who intend to keep their licenses to practice law, are serious about deadlines.  They keep a calendar on their phone and on their desktop, and their assistants generally maintain a duplicate calendar, all with the hope and expectation that deadlines won’t get missed.  But, as a recent decision of the Georgia Court of Appeals reminds us, the best calendaring system in the world won’t help you if you don’t know the correct deadline that the law fixes for whatever it is you are calendaring.

In Satnum Waheguru Corp. v. Buckhead Community Bank, — S.E.2d —-, 2010 WL 2384934 (Ga. App. June 16, 2010), the trial court entered a default judgment in favor of the plaintiff bank after the defendant debtor filed an answer more than 30 days after acknowledging service of the complaint.  On appeal, the defendant debtor argued that a default judgment should not have been entered against it because, under O.C.G.A. § 9-11-4(d)(5), it had 60 days to file an answer because it waived service.

Under § 9-11-4(d)(3),

[T]he plaintiff may notify such a defendant of the commencement of the action and request that the defendant waive service of a summons. The notice and request shall:

(A) Be in writing and shall be addressed directly to the defendant, if an individual, or else to an officer or managing or general agent or other agent authorized by appointment to receive service of process for a defendant subject to service under paragraph (1) or (2) of subsection (e) of this Code section;

(B) Be dispatched through first-class mail or other reliable means;

(C) Be accompanied by a copy of the complaint and shall identify the court in which it has been filed;

(D) Make reference to this Code section and shall inform the defendant, by means of the text prescribed in subsection (l) of this Code section, of the consequences of compliance and of failure to comply with the request;

(E) Set forth the date on which the request is sent;

(F) Allow the defendant a reasonable time to return the waiver, which shall be at least 30 days from the date on which the request is sent, or 60 days from that date if the defendant is addressed outside any judicial district of the United States; and

(G) Provide the defendant with an extra copy of the notice and request, as well as a prepaid means of compliance in writing.

(Emphasis added).  If the plaintiff follows this process and the defendant, “before being served with process, returns a waiver so requested in a timely manner is not required to serve an answer to the complaint until 60 days after the date on which the request for waiver of service was sent, or 90 days after that date if the defendant was addressed outside any judicial district of the United States.”  O.C.G.A. § 9-11-4(d)(5).

The problem for the defendant debtor in Buckhead Community Bank, however, was that the plaintiff bank did not request a waiver of service from the defendant pursuant to § 9-11-4(d)(3).  It requested that the debtor acknowledge service, which is what it did.  As the Court of Appeals explains,

O.C.G.A. § 9-10-73[which provides that a defendant may acknowledge service or waive process by a writing signed by the defendant] does not prescribe a particular form for the notice. The “Acknowledgment of Service” here stated simply that “the undersigned hereby acknowledges service of the Summons and Complaint, … and does hereby acknowledge that he is authorized to accept service of same, and waives any and all further service of process herein.”

Because the 60-day provision of O.C.G.A. § 9-11-4(d)(5) was not implicated by the executed acknowledgment of service (not waiver of service), “the trial court was authorized to conclude that [the defendant's] counsel executed an acknowledgment and waiver pursuant to O.C.G.A.9-10-73; that [the defendant's] answer was therefore due within 30 days after the acknowledgment and waiver; and that, because it failed to serve an answer within that 30-day period, its answer was untimely.”

The lesson is simple but important:  A calendar is only as good as the information on it; if you don’t correctly determine deadlines for your cases, you may as well not bother writing them down.

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July 4, 2010

Judges are people, too.

At Newsweek.com, Dahlia Lithwick has an excellent discussion of “two legal swan songs” she recently read, Justice Stevens’ dissent in Citizens United v. FEC and The Strange Alchemy of Life and Law, a memoir by Albie Sachs.  (I’ll refer you to Lithwick’s article for an explanation of who Sachs is and why you should care what he has to say).

Toward the end of her piece, Lithwick laments that

It is impossible to imagine a justice of the U.S. Supreme Court sitting down to pen a memoir like Sachs’. Because it would mean acknowledging that judges are not made of microchips and that doing justice means more than just calling balls and strikes (in the favored formulation of our day). If an American judge described, as Sachs does, a party to an appeal “lying on the bare field at night staring up at the stars as the rainclouds gathered and asking: why are we born to live like this, why must my children grow up without a home?,” we would urge swift impeachment accompanied by a pharmacological intervention.

But judges are not made of microchips.  And with all due respect to Chief Justice John Roberts, the idea that judges, particularly Justices of the United States Court, call balls and strikes is absurd.  Judges are people, and there is no strike zone in judging.  This latter reality is what makes the thundering call of the masses for judges to simply “apply the law” silly.  How one could  “simply apply” the Equal Protection Clause is beyond me.  My colleague and the senior partner at our Gainesville, Georgia law firm, Wyc Orr, recently made this point in an op-ed column published in the Atlanta Journal-Constitution when he asked “Can empathy be a guide when selecting high court justices”?

All judges have their own experiences and, whether they admit them or not, their own opinions, values, and even biases.  And that’s okay.  In fact, it is preferable, and the public and the judiciary, itself, should embrace and appreciate that human qualiity:

[J]urists [should] not imitate the “artificial sound of a computer that has been programmed to produce inexorable outcomes.” . . .  Judges are people, too. He gently reminds his readers that “if law is a machine, we are the ghosts that inhabit it and give it life.” Judges, he writes, “are shaped not only by our learning but by our varied engagements with life, by experiences both inside and outside the law.”

Well said, Mr. Sachs, well said.

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May 2, 2010

Georgia Supreme Court Recognizes “Holder” Claims

In response to a Certified Question from the United States Court of Appeals for the Second Circuit, the Georgia Supreme Court recently concluded in Holmes v. Grubman (opinion available here) that the common law of Georgia recognizes fraud claims that are based on forbearance in the sale of publicly traded securities.  The Holmes decision is a major victory for Georgia investors.  Under the Securities Exchange Act of 1934, only those who actually purchase or sell securities can maintain a fraud claim; a person who chooses not to sell a declining stock because of the intentional or negligent misrepresentations of another–misinformation that could cost the investor thousands upon thousands of dollars–simply has no claim under federal securities law.  See Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730-31 (1975).  The Georgia decision fills that void and redresses that inequity.

A plaintiff investor who forbears from selling stock may maintain a cause of action for fraud or negligent misrepresentation if he alleges that the “misrepresentations were directed at [him] to [his] injury,” i.e., the allegedly false and misleading information was directly communicated to the plaintiff, he relied on it, and suffered damages as a result.  Specifically, a plaintiff who hopes to maintain a claim for this class of fraud or negligent misrepresentation must be able to show

specific reliance on the defendants’ representations:  for example, that if the plaintiff had read a truthful account of the corporation’s financial status the plaintiff would have sold the stock, how many shares the plaintiff would have sold, and when the sale would have taken place.  The plaintiff must allege actions, as distinguished from unspoken and unrecorded thoughts and decisions, that would indicate that the plaintiff actually relied on the misrepresentations.

The Georgia Supreme Court’s holding is not surprising or controversial.  It accords with the rules adopted in a majority of other jurisdictions that have considered the question, and it is likely the conclusion that the United States Supreme Court expected states to reach when it decided Blue Chip Stamps.  (In that opinion, the Court noted that its seemingly harsh holding (limiting Rule 10b-5 claims to only purchasers and sellers of securities) “is attenuated to the extent that remedies are available to nonpurchasers and nonsellers under state law” and that “in the ordinary case of deceit [] a misrepresentation which leads to a refusal to purchase or to sell is actionable in just the same way as a misrepresentation which leads to the consummation of a purchase or sale.”).  But the decision is nevertheless significant because it may give the shareholders of Georgia’s many failed banks a vehicle by which to present their “holder” claims.

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