San Francisco Bankruptcy Lawyer Blog

Michael Agoglia at Morrison & Foerster reported in June 2010 that there has been an increase in putative class actions on home loan modifications.

These cases have been filed throughout the United States based on the plaintiffs alleging that they have standing to sue lenders for not making modifications under the Home Affordable Modification Program ("HAMP"), and for not following Treasury Department guidelines. These plaintiffs are third party beneficiaries under the servicer participation agreements.

Class actions have also been rising based on plaintiffs alleging the form trial payment plan ("TTP") is a contract requiring lenders to automatically convert to a permanent loan modification as long as borrowers make three qualifying loan payments and turn in the required documents.

The TTP theory might eliminate the lenders' use of borrower income verification, the Net Present Value test and the 31% cap on net monthly income to mortgage expenses. Agoglia says that all of this was against the basic elements of HAMP.

Another class action theory of liability involves a due process challenge alleging lenders failed to provide borrowers with written adverse action notices and an appeals process after the denial of a HAMP loan modification.

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

Robert J. Stumpf, Jr., an attorney from Sheppard Mullin Richter & Hampton LLP asks in "Private action under law requiring lender to explore options before foreclosing": Does a private right of action exist under California Civil Code § 2923.5 to prohibit a lender from filing a notice of default until it has contacted the borrower to "assess the borrower's financial situation and explore options for the borrower to avoid foreclosure"?

Stumpf says the answer is: Yes, according to the Fourth Appellate District, Division 3, in Mabry v. Superior Court (G042911), decided June 4, 2010. The Court of Appeal reviewed the legislative history of the Civil Code section and found an "outcome of silence, not a clear statement that there should be no individual enforcement." The "obvious goal" of the statute was "forcing parties to communicate. . . ."

Mabry v. Superior Court was about plaintiffs Terry and Michael Mabry who refinanced the loan on their house. They borrowed approximately $700,000. When they missed a mortgage payment, the lender recorded a notice of default. The parties argued whether the lender, before recording the notice of default, violated Section 2923.5 of the Civil Code. The Civil Code section prohibits a lender from recording a notice of default before contacting the borrower to assess the borrower's financial situation and explore options to prevent foreclosure. For some people who have been in financial distress, they might take note the lender can file notice of default quickly after one payment even when many people filing bankruptcy have missed 6 months to 2 years of payments.

In Mabry, after the lender filed a notice of default, the Mabrys filed a class action alleging violations of the Civil Code. The trial court ruled the Civil Code section (1) did not provide for a private right of action, and (2) was preempted by federal law.

As to preemption, the Court decided the statute did not create a right to a loan modification; it merely required the lender to assess and explore modifications with the borrower before foreclosing. The Court decision minimized the likelihood the Civil Code would create "burdens on federal savings banks that might arguably push the statute out of the permissible category of state foreclosure law and into the federally preempted category of loan servicing or loan-making."

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

The Financial Fraud Enforcement Task Force reported in June 2010 a 16-count indictment (http://www.ocala.com/assets/pdf/OS20530616.PDF) for Lee Bentley Farkas, former chairman of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), for "his alleged role in a more than $1.9 billion fraud scheme that contributed to the failure of Colonial Bank, one of the 50 largest banks in the United States in 2009, and TBW, one of the largest privately held mortgage lending companies in the United States" in 2009.

In U.S. District Court for the Eastern District of Virginia, the indictment charges Farkas with a count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; six counts of wire fraud; and three counts of securities fraud, and seeks approximately $22 million in forfeiture from Farkas.

According to the indictment, Farkas "committed wire and securities fraud in connection with their attempt to convince the United States government to provide Colonial Bank with approximately $553 million in TARP funds."

Per the indictment, Farkas "allegedly engaged in a scheme to misappropriate more than $400 million from Colonial Bank's Mortgage Warehouse Lending Division in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by TBW."

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

The United States District Court for the Northern District of California granted in part and denied in part motions to dismiss a class action filed on March 27, 2009 by a class of purchasers of mortgage pass-through certificates in In Re Wells Fargo Mortgage-Backed Certificates Litigation, C 09-01376 SI.

Wells Fargo Bank, the originator and custodian/servicer on underlying loans, allegedly violated §§11, 12, and 15 of the Securities Act of 1933 with offering documents that had numerous false and misleading statements and omissions regarding Wells Fargo's underwriting process, loan standards, appraisal value of underlying properties and certificates credit quality. Defendants responded that plaintiffs were put on inquiry notice before March 27, 2008 by articles involving the mortgage crisis and mortgage backed securities, and when ratings agencies downgraded the certificates in December of 2007. The court held that inquiry notice was a question of fact, not appropriate for motion to dismiss.

The court held that plaintiffs only had standing to bring suit on 17 offerings which they purchased securities. The court dismissed plaintiffs' §12 claims without prejudice because the plaintiffs failed to allege they purchased the securities directly from defendants.

The court granted motion to dismiss on ratings agencies, finding the agencies were not subject to §11 liability. The court rejected the plaintiffs' claim that rating agencies could be liable as underwriters.

The court held plaintiffs sufficiently stated a claim on alleged misstatements or omissions in the complaint.

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

Natural disasters can have huge impact on a business' financial health.

Employers who do not plan for natural disasters may be exposed to financial liability under pension and welfare benefits plans when there is no clause in a company's benefits plan that limits lump-sum use of paid leave for disasters, emergencies, and epidemics.

Companies that do not have disaster plans may be sued when a natural disaster prevents the companies from protecting the privacy of an employee's medical information. When people contact employers to ask for an employee's emergency personal health information, and employer sharing information to identify, locate, and notify family members, guardians, or anyone else responsible for an employee's care should obtain verbal or prior permission from the employee to share this information.

As to the Fair Labor Standards Act, claims based on under-payment of wages may occur if the disaster destroys employee timesheets, and the company fails to pay employees for work performed prior to the disaster. To avoid minimum wage or overtime lawsuits, an employer can ask the employee to sign a release and settlement for estimated hours not paid.

On the Family and Medical Leave Act, employers may have to grant employees leave consistent with the FMLA to clean a flood-damaged house or track down a missing relative. Along with FMLA benefits, some employees might be called into service. A must not discharge, deny promotion, or deny benefits because of a person's membership in, performance of, or obligation to perform uniformed service. The Uniformed Services Employment and Reemployment Rights Act governs a qualified employee's right to elect continued health care coverage.

Under the ADA, if an employee suffers a qualifying disability from a natural disaster, the business may need to provide reasonable accommodations for the employee. Though expensive, accommodations might be required under anti-discrimination laws.

OSHA standards require a company institute procedures to ensure the safety of employees in the workplace. After a disaster, workplace safety hazards exposes companies to liability, especially if the work involves cleaning affected areas. Companies who want to avoid an employee's claims for damages exceeding worker's compensation benefits for work-related injuries incurred after a natural disaster should supervise job assignments, and review the scope of insurance coverage for business interruption.

Continue reading "Natural Disasters" »

In San Francisco Superior Court, most collections trials begin at 9 am in Department 206 if they are on the unlimited calendar. A case gets on the unlimited calendar when the damages are less than $25,000. The case gets called by line number, and when a party does not show up, the judge may pass it once or twice to give people time to show up because of traffic or other reasons.

When two parties are present, the judge usually sends the parties to a Judge Pro Tem even when they are ready for trial. The Judge Pro Tem acts a mediator to get the parties to settle. When they cannot settle, they go back to the presiding judge to be assigned to a trial judge. Once the parties get to the trial judge, the trial judge might be willing to act as a mediator to get the parties to discuss settlement further prior to setting the case for trial.

In a typical credit card collections case, the plaintiff usually proves up the matter by getting the defendant to admit he had an account with the credit card company, and that he left an unpaid balance. When a debtor fails to object to something in his statement of account, the debtor is presumed to agree to the statement. 1 Cal. Jur. 3d (Rev.) Accounts & Accounting, Section 41, pp. 599-600.

When the plaintiff does not have a copy of the defendant credit card application or the last statement to the defendant, the plaintiff has difficulty in proving the case because the defendant can deny the credit card being his. Without discovery into the defendant's credibility such as a deposition, it may be difficult to say that the defendant is lying in his denial of the account balance. The plaintiff might need to dismiss the case without prejudice and then refile at a later time after the plaintiff gathers more evidence.

The plaintiff usually submits as part of the proof a declaration in lieu of personal testimony by the employee at a credit card company or collections that handles account statements under California Code Civil Procedure Section 96. When there is an assignment of an account to collections, the uncorroborated testimony of an assignee who takes by oral assignment is prima facie evidence of the assignment, which by itself is sufficient to prove assignment. Norton v. Consolidated Fisheries (1953) 120 Cal. App. 2d 86, 90.

If at trial, the defendant brings up evidence that was not known to the plaintiff before, the plaintiff will likely object and continue the trial. The defendant might bring up the statute of limitations, for example. Subsequent payments on an account by a defendant tolls or renews the limitations. A payment is an acknowledgment of a debt. 3 Witkin, Cal. Proc. 4th (1997) Actions, Sections 677, 678, p. 865. The payment acknowledges the existence of the indebtedness which raises an implied promise to continue the obligation and pay the balance. Young v. Sorenson (1975) 47 Cal. App.3d 911, 121 Cal.Rptr. 236.

If you have any questions on resolving financial difficulties, contact 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

Most people who are in conflict are at the lowest levels of tribal leadership. They feel that life sucks, their lives suck, or they are great. When people are less in conflict, they feel everyone is great or life is great. People in litigation can only hear things at their own level. To resolve litigious conflict, attorneys, mediators, and other dispute resolution methods must meet people where they are, and help them move up to the next level.

When people are in conflict, they are in uncertainty. To come out of chaos, a party should seek an attorney or dispute resolution methods that are able to summarize the concerns of the opposing party so that the other party feels that he is being heard. In negotiations, each party should start from the beginning rather than respond to what another party says. More information can be learned when people start at the top. If people claim they are also representing others not in the room, be aware that when people are not there to represent their own interests, it cannot really be that they actually think the same.

In summarizing concerns, conversations move from opposition to interest-based discussion. What people first say often are what is most important or most feared (what they are scared to lose). Searching for common concerns rather than differences prevents anger, which makes people less able to listen. This is like a parent scolding a child. The parent who does not yell, but whispers and speaks calmly gets the child to listen. Agreements are made out of what people can agree to, not what they don't want.

Often in dispute, people do not know what to do. They need space to think.

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

Community Boards is a place where people in dispute can go to resolve problems without litigation. Community Boards handles all types of disputes, including workplace, landlord-tenant, family. Community Boards' mediation approach is conciliation or the rebuilding of human relationships.

The mediators at Community Boards are volunteers, many with legal backgrounds. The mediators take into consideration the parties' emotions by recognizing that feelings should not be suppressed. Emotions help people survive by warning them of danger just like blood that oozes out when skin is cut. Anger is a life-saving response that motivates people to accomplish.

At Community Boards, a mediation begins with a briefing on the roles of mediators, signing a confidentiality agreement, and setting ground rules. A confidentiality document prevents any discussions from being used in litigation unless all parties agree. The ground rules are to preserve order. When things get out of hand, a mediator refers to the ground rules without singling a person out. For instance, when a party talks out of place, the mediator may tell the person to write down the idea on a piece of paper and bring it up when it is the person's time to speak. This acknowledges the importance of the idea, at the same time, staying focused on the current agenda or speaker.

Instead of only focusing on money as in most litigation, mediators at Community Boards explore beneath the iceberg into values, needs, intentions, assumptions, perceptions. When a mediator asks why things matter to a party, the party is less confrontational than when it comes from the opposition because the mediator does not have a stake in the outcome.

The mediator tries to keep people who are uncooperative as long as possible in a mediation because once the parties leave, it may be difficult to get them together again to move towards a solution.

Suggestions for resolving problems do not work when a party does not trust. To test the suggestions, the mediator asks for times when suggestions might not work. The mediator uses open ended questions, and watches when one party takes over the other by talking too much. Each party needs power from the opportunity to be heard. Once the parties start repeating facts, they show they have been heard and are done with their stories. But, if they are repeating emotions, they feel they have not been heard. The mediator might allow them to continue speaking, and keeps notes on how many times something has been said.

Continue reading "Community Boards' Mediation" »

When parties are in litigation, active listening helps to break conflict. Active listening builds confidence in the parties. It increases their willingness to listen to the other side.

The active listener, for instance, a mediator, encourages the parties to speak about the subject of dispute. The listener restates the basic ideas and facts discussed and reflects the feelings back to the speaker. This validates the person's feelings, ideas, actions. Presence when someone is speaking is shown through eye contact. Silence may be an effective form of listening. The listener focuses on where the disputant wants to go, rather than a bias to speak in a particular direction. The listener is not distracted by interrupting a lot, trying to finish sentences. After all, it is difficult to listening when talking at the same time.

When building trust as a listener, the speaker has to be able to vent and get true feelings out. Listening does not mean agreeing. The listener just see how the world looks to the speaker. The speaker should not assume the listener acknowledges any wrong or right.

Active listening is like aikido where the listener stays centered and sees conflict as opportunity for change. Centering heightens awareness and increases concentration. When people are centered, they become powerful in their awareness of viewpoints without judging, accepting of solutions to problems by adapting to new ideas.

If you have any questions on resolving financial difficulties, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

In June 2010, the Nevada Financial Institutions Division closed Sun West Bank, headquartered in Law Vegas, Nevada, and appointed the FDIC as receiver. The FDIC, as receiver, entered into a purchase and assumption agreement with City National Bank, headquartered in Los Angeles, California, to assume the deposits of the failed bank.

The FDIC estimates the cost to the Deposit Insurance Fund will be $96.7 million. Sun West Bank is the 78th FDIC-insured institution to fail in the nation in 2010.

As of March 31, 2010, Sun West Bank had approximately $360.7 million in total assets and $353.9 million in total deposits. City National Bank will pay the FDIC a premium of 0.67% to assume the deposits of Sun West Bank, and agreed to purchase almost all of the failed bank's assets. The FDIC and City National Bank entered into a loss-share transaction on $280.0 million of Sun West Bank's assets.

This bank failing comes at a time when the Federal Reserve delivered its 2009 annual report of the Board of Governors to the Speaker of the House of Representatives, noting signs of economic improvement. According to the report, "economic activity in the United States turned up in the second half of 2009, supported by an improvement in financial conditions, stimulus from monetary and fiscal policies, and a recovery in foreign economies." The "gross domestic product rose at about a 4 percent pace." Though, the Federal Reserve acknowledged "employment continued to contract in the second half of 2009, albeit at a markedly slower pace than in the first half."

The Federal Reserve Operations section discussed results for U.S. bank holding companies (BHCs) in 2009, stating that "BHCs returned to profitability in 2009."

If you have any questions with regard to bankrutpcy, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

Competition laws affect the economy. Competition laws aim to prohibit agreements that restrict free trading and competition between business. This includes banning abusive behavior by a firm dominating a market, or anti-competitive practices that lead to a dominant position. Anti-competitive practices include predatory pricing, tying, price gouging, refusal to deal. To prevent anti-competitive practices, regulations supervise the mergers and acquisitions of large corporations, including joint ventures. Transactions that threaten the competitive process can be prohibited, or approved subject to obligation to divest part of the merged business or to offer licenses or access to facilities to enable other businesses to continue competing.

On May 21, 2010, the Federal Trade Commission (FTC) voted unanimously to approve Google Inc.'s (Google) proposed acquisition of AdMob, Inc. (AdMob) on November 9, 2009 valued at $750 million. The FTC's main rationale for clearing the deal was entry of Apple, Inc. (Apple) into the market with its January 2010 acquisition of Quattro Wireless (Quattro), a direct competitor of Google and AdMob, a mobile advertising network that facilitates transactions between advertisers and mobile publishers.

AdMob's revenue and market share come mostly from the iPhone platform. In April 2010, Apple transformed Quattro into a mobile advertising platform called "iAd" that would be built into the the iPhone operating system for release in June 2010. iAd will automatically be available to every iPhone app developer. Apple has extensive relationships with application developers and users. The FTC noted Apple's ownership of the iPhone software development tools, and its control over the developers' license agreement, give Apple the ability to define competition. AdMob's current success on the iPhone platform was not predictable whether AdMob was owned by Google or not.

If you have any questions with regard to bankrutpcy, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

The Euro's descent against the Dollar is the consequence of Europe's immersion in a deep economic crisis stemming from debts of Portugal, Ireland, Italy, Greece and Spain.

Greece's big debt made the European markets suffer, Portugal announced a negative long term debt, and Spain is dealing with a 20% unemployment rate.

If Greece goes to the United States or non-European institutions for financial assistance, it would mean the end of the European Union. Without a bail-out plan for Greece, there is no economic unity of the Union. However, the European Union might not have the legal capacity to bail-out Greece based on Art. 125 of the TFEU, which establishes: The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. .

This Article might be the no-bail out clause that prevents member states of the European Union from providing financial assistance to another member state. The opposing view is Article 122 which establishes: Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.

The question on how to deal with Greece, and the debts of other European countries is still open. In June 2010, France and Germany agreed on a plan to aid Greece with bilateral loans within the member states and money from the International Monetary Fund. The alternative would be for Greece to leave the European Union and take control of its currency.

If you have any questions with regard to bankrutpcy, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

With continued bank failings like in June 2010 when the Office of the Comptroller of the Currency closed Granite Community Bank, N.A., and appointed the FDIC as receiver, many investors have suffered investment losses and uncollectible debts.

The FDIC estimates the cost to the Deposit Insurance Fund will be $17.3 million for the Granite Community Bank closing. As receiver, the FDIC entered into a purchase and assumption agreement with Tri Counties Bank, headquartered in Chico, California, to assume all of the deposits of the failed bank.

For individuals suffering financial losses, the deductibility of losses depends on the investment like whether it is a capital asset, and the type of investor like whether it is an individual, corporation. The deduction of losses is governed by IRC§165, the deduction of bad debts is governed by IRC§166.

Investment is a security when defined under IRC§165(g):

• Shares of stock of a corporation;
• Right to subscribe for, or receive, shares of stock of a corporation;
• A bond, debenture, note or other evidence of indebtedness to pay a fixed and determinable sum of money.

For a deduction, the security must be entirely worthless as evidenced by filing of Chapter 7 bankruptcy, or the fact that the liabilities exceed the assets. Losses from worthless securities are from the sale or exchange of a capital asset. When deducting losses, an investor has to prove to the IRS efforts made to recover money invested.

If you have any questions with regard to bankrutpcy, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

On May 20, 2010, the Senate passed the Restoring American Financial Stability Act of 2010 (Senate Bill) 59-39. The House passed its version of the Senate Bill in December 2009 - Wall Street Reform and Consumer Protection Act of 2009 (House Bill). The focus of the Senate and House Bills is to prevent the failure of too big to fail institutions and avoid taxpayer bailouts.

Under current law, failing depository banks are subject to receivership rather than Chapter 11. Receivership provisions extend to operating banks themselves, not their holding companies. This is why Lehman Brothers Holdings, Inc., a failing investment bank parent company, filed for Chapter 11 protection.

The proposed legislation affects bondholders and other creditors of the failing institutions, with the FDIC taking on financial institution receiverships with little court oversight. Under the Senate Bill and House Bill, the Secretary of the Treasury has authority to place a financial company into receivership even if there is a Chapter 11 pending. The House Bill says the Secretary of the Treasury initiates liquidation proceedings and appoints the FDIC as the receiver. The Senate Bill says the Secretary of the Treasury obtains either the financial company's consent or the approval of the United States District Court for the District of Columbia.

The financial reform legislation affects not only banks and bank holding companies, but also insurance companies and other non-bank financial companies requiring "stricter prudential regulation." This means investors may unknowingly be, creditors of a financial company. Chapter 11 and the current law on FDIC receiverships for failed banks allow similarly situated creditors to receive the same treatment. The new legislation giving the FDIC, as receiver, the right to treat similar claims differently if the treatment furthers financial stability or the US economy, allows the FDIC to make additional payments to some equal priority creditors but not others if the additional payments would minimize losses to the receiver from the orderly liquidation of the covered financial company.

Also in the new legislation, the FDIC can sell assets of a covered financial company "without obtaining any approval, assignment, or consent". There is no requirement to implement a sale process that would maximize the value of the assets. The FDIC will be free to act, without the risk of being second-guessed in a court even if it discriminates among similarly-situated creditors.

If you have any questions with regard to bankrutpcy, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

A defamation action that put an attorney through financial turmoil, having to defend the case all the way to the California Supreme Court, came to an end on May 17, 2010, with a victory for Pierce Gore in Simpson Strong-Tie Co v Gore. Simpson Strong-Tie Co. sued Gore, an attorney seeking clients for a class action lawsuit, over an advertisement Gore published in a newspaper to locate plaintiffs for a class action lawsuit.

The advertisement, which began Christmas Day 2005, ran over a 28-day period in the Mercury News and once in the Los Gatos Weekly-Times, read as follows:

ATTENTION:
WOOD DECK OWNERS
If your deck was built after January 1, 2004 with galvanized screws manufactured by Phillips Fastener Products, Simpson Strong-Tie or Grip-Rite, you may have certain legal rights and be entitled to monetary compensation, and repair or replacement of your deck. Please call if you would like an attorney to investigate whether you have a potential claim:

Pierce Gore
GORE LAW FIRM
900 East Hamilton Ave.
Suite 100 Campbell, CA 95008
408-879-7444

Gore filed a Special Motion to Strike under California's anti-SLAPP statute, Code of Civil Procedure Section 425.16. Simpson argued that an exemption from the anti-SLAPP statute for commercial speech, Code of Civil Procedure Section 425.17(c), applied to Simpson's claims.

The Supreme Court held the exemption did not apply and Gore was entitled to invoke the anti-SLAPP statute to protect his free speech in publishing the advertisement.

Section 425.17(c) exempts from the anti-SLAPP statute's protection statements or conduct by a seller of goods or services made to a prospective or actual buyer of those goods or services, if the "statement or conduct consists of representations of fact about that person's or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services, or the statement or conduct was made in the course of delivering the person's goods or services." Section 425.17(c)'s "content" requirement applies to statements or conduct that occur in soliciting business and while a product or service is delivered.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

The Federal Trade Commission (FTC) issued Red Flag Rules, part of the Fair and Accurate Credit Transaction Act (FACT Act), that required businesses by June 1, 2010 to combat identity theft and protect personal information of customers, clients and employees.

Businesses that do not comply with the FACT Act risk statutory fines and investigations. The Red Flag Rules apply to financial institutions and creditors that use personal information to arrange or extend credit. Examples include:

• Cable providers
• Car dealers
• Credit card issuers
• Mortgage lenders
• Retailers
• Telecoms
• Utilities
• Accounting firms
• Building services
• Law firms
• Schools
• Banks
• Commercial lenders
• Financial advisors
• Mortgage brokers
• Securities brokers
• Subsidiaries of foreign banks

The Red Flag Rules require businesses create and implement a written program that is aligned with the company's information security policies and procedures, and IT practices.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

In May 2010, the Mortgage Bankers Association released its latest national delinquency survey. According to the survey, the "delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago."

At the same time, the survey reported the non-seasonally adjusted delinquency rate decreased from 10.44% in the fourth quarter of 2009 to 9.38% in the first quarter, and the rate of serious delinquencies declined to 9.54% in the first quarter, down 13 basis points from the fourth quarter. Serious delinquencies are loans more than 90 days past due.

The new foreclosures remained flat, at 1.23% of outstanding loans, up 3 basis points from the fourth quarter and down 14 basis points from the 2009 first quarter.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

After everyone got wind of SEC guidance on use of company web sites, recognizing that technological innovations allow instantaneous communications (Release No. 34-58288 (8/1/2008)), companies began trying to save on press releases by directing the public to Investor Relations web pages through use of push technology (RSS feeds, ShareThis buttons, Receive E-Mail Alerts), referencing readers in news releases to go to the corporate web site and social networking links (Twitter, LinkedIn, FaceBook), for updates on company information.

For example, on April 15, 2010, Google, Inc. announced in a press release for readers to visit Google's Investor Relations website to view an earnings release. The press release said: "Google intends to make future announcements regarding its financial performance exclusively through its investor relations website."

In 2000, the SEC enacted Regulation FD to address selective disclosure by public companies of material, nonpublic information. Whenever a public company, or any person acting on its behalf, discloses material nonpublic information, the company must simultaneously, or promptly, make public disclosure of that information. A public company may file a Current Report on Form 8-K or to choose any method to disclose publicly material information reasonably calculated to make effective, broad, and non-exclusionary public disclosure.

The SEC recognized that a company website is a recognized channel of distribution to make information generally available to the securities marketplace. It appears Google is declaring its website to be a recognized channel of distribution of information. Although the common practice is to include earnings information in a press release, Google excluded the earnings information and instead posted the earnings release numbers on its website.

Google took steps to inform the market that its website is a resource for material information and will be establishing a practice of using the website for disclosure purposes.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

With continued high unemployment, more homeowners are unable to make their monthly mortgage or sell their homes at prices that generate enough to pay off lenders. Many homeowners are forced to consider short sales as an alternative hoping to at least protect their credit. Rather than letting a house go into foreclosure, a short sale is a sale of property for less than the outstanding loans.

A short sale requires lender consent. The homeowner conveys title to the lender free of mortgages, but the lender may still keep liens until it is paid in full, or willing to accept less than the loan amount. If the primary lender accepts a short sale, the secondary lender like a line of credit does not necessarily need to agree to wipe out its loan - even when it seems like the same bank that issued the mortgage and the equity line of credit. The two entities are thought of as separate companies, and the entity that gave the line of credit can file a breach of contract claim against the borrower when a short sale does not offer enough payoff money.

A short sale can affect a homeowner with tax liabilities. The homeowner getting a break on not having to payback an entire loan amount can be taxed on the difference because the write off is considered income.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

In Garcia v. World Savings, FSB, 183 Cal. App. 4th 1031 (2010), the appellate court decided that a lender's oral agreement with the borrower to postpone a foreclosure sale was enforceable, absent consideration.

In Garcia, World Savings commenced a non-judicial foreclosure by recording and serving its Notice of Default. After expiration of the statutory three-month notice period, World Savings recorded, served, and published its Notice of Trustee's Sale. World Savings voluntarily postponed the trustee's sale several times, including after Garcia completed a refinancing application. When Garcia asked for another extension on August 27, 2007, the loan officer at World Savings assured on the phone to the borrower that he would extend the pending foreclosure sale a few more days. This was relied on by the borrower, who failed to make payments.

The refinancing closing got delayed. The trustee's sale was completed on August 30, 2007. Not knowing about the foreclosure completion, on September 7, 2007 Garcia closed the refinancing of his other property and tendered a check to World Savings for the reinstatement amount. World Savings did not cash Garcia's check.

Garcia filed a lawsuit against World Savings for "wrongful foreclosure" alleging violations of the statutory foreclosure procedure, breach of oral contract to postpone the sale and promissory estoppel. The trial court granted World Savings' motion for summary judgment. The court decided the foreclosure sale procedure was valid and said there was not enough consideration to support the alleged verbal contract to postpone the foreclosure sale.

On appeal, the appellate court upheld the trial court's grant of World Savings' summary judgment motion except that even with no consideration, Garcia's actions in closing the costly refinancing was reliance on World Savings' promise to postpone the foreclosure sale. The case went back to the trial court for trial on the promissory estoppel claim. Apparently, verbal agreements, if relied on by borrowers to their detriment, can be as binding contracts.

Rinne Legal provides counseling to individuals, families and small businesses in financial difficulties. Call for a no charge initial consultation.

In mid-May 2010 there were more bank failures around the United States. In California, the California Department of Financial Institutions closed 1st Pacific Bank of California, headquartered in San Diego, California, with the FDIC was appointed receiver. As receiver, the FDIC signed a purchase and assumption agreement with City National Bank, headquartered in Los Angeles, California, to assume the deposits of 1st Pacific Bank of California.

City National Bank will pay the FDIC a 1.62% premium to assume the deposits of 1st Pacific Bank of California, and agreed to buy almost all of 1st Pacific Bank of California's assets. As of March 31, 2010, 1st Pacific Bank of California had about $335.8 million in total assets and $291.2 million in total deposits. The FDIC and City National Bank signed a loss-share transaction on $275.7 million of 1st Pacific Bank of California's assets. Assets in a loss-sharing transaction are valued at the failed bank's book value plus a premium or less a discount offered by bidders. Loss sharing is a feature of purchase and assumptions agreements used by the FDIC to move failed bank assets into the private sector. The FDIC absorbs a portion of losses on a failed bank's assets that are purchased by an acquiring bank.

The FDIC estimates the cost to the Deposit Insurance Fund will be $87.7 million. 1st Pacific Bank of California is the 68th FDIC-insured institution to fail in the United States this 2010 and the fifth in California.

Rinne Legal provides counseling to individuals, families and small businesses in financial difficulties. Call for a no charge initial consultation.