December 1997

Vol.2 – No.4

Your Small Business Dot Com

The Internet provides a speedy, cost-effective way for businesses and professionals to compete internationally. Whether you are operating from your basement or Madison Avenue, your business can look like a million dollars. The Internet has leveled the playing field between big and small businesses. A small business can reach as many potential customers as a large business. The Web gives a whole new meaning to the phrase “home based business”.

Hot Sites

• The Real Estate Library (relibrary.com) has essential resources for real estate professionals, buyers, sellers and tax professionals including training and recruiting information, financial information, links, a newsletter, and tax and investment tips.
• Mortgage Market Information Services (www.interest.com) provides mortgage interest rates by state, lists of mortgage lenders by state, consumer information, mortgage news publications, mortgages for credit impaired borrowers, links to 100 local newspapers, and a mortgage discussion area.
• Home Shark (www.homeshark.com) explains various mortgage options and closing costs.
• Online Mortgage Corp. (www.mortgageweb.com) has a loan calculator that instantly evaluates your income, assets and debts to determine how large a loan you will qualify for. It has two loan applications. The easy application is a one page form for pre-approval of the loan. A full four page application includes all of your financial information.
• Quicken Mortgage (www.quicken.com) compares the rates of six leading lenders and pre-qualifies you for a loan.

What’s New in Consumer Law?

New telemarketing regulations. In response to scams directed at the elderly, the Federal Trade Commission (FTC) issued new regulations restricting what telemarketers can and cannot say. Telemarketers cannot:

• Call before 8 a.m. or after 9 p.m.
• Call again after they have been told not to call back.
• Give misleading information.
• Access bank accounts without the customer’s written permission.

Telemarketers are required to:

• Promptly say they are trying to sell something.
• Promptly explain what they are selling.
• Keep a list of people that do not want to be contacted again.
• Advise that recipients do not need to purchase anything to win a prize.
• Announce the total cost of the item or service being sold and any restrictions or conditions related to getting the item or service.
• Point out that the sale is final or non-refundable before asking for credit card or bank account information.

Telemarketers calling about a sweepstakes must tell customers how to enter the contest and what the odds of winning are. Telemarketers who call people back after being told not to could be subject to a $10,000 fine for each violation.

What’s New in Debtor/Creditor Law?

Bankrupt keeps car without reaffirming. The debtor filed for Chapter 7 bankruptcy but kept his car and continued to make regular monthly payments. The bank argued that the debtor had only three options: reaffirm the debt, keep the property and pay its full value or return the property to the creditor. However, the U.S. Court of Appeals, Second Circuit, ruled that the debtor had a fourth option–reinstatement. As long as the debtor has not defaulted on the loan, he may keep the collateral and pay under the original loan agreement without being liable for the underlying debt. If he later defaults, the creditor can repossess the car, but it cannot go after the debtor for the deficiency. The Fourth and Tenth Circuits have held the same way. The Fifth, Seventh and Tenth Circuits have held to the contrary.

What’s New in Divorce/Family Law?

Visitation by grandparents and lesbian partners. A lesbian mother’s estranged partner may go to court to seek visitation rights with the mother’s five year old child who was conceived through sperm donation while the two woman were involved in a relationship (Tex. App.). The Virginia Court of Appeals overturned a judge’s order barring a lesbian from visiting her partner’s five year old son, who was in the grandmother’s custody. The court ruled that the judge had focused to heavily on the couple’s sexual orientation and failed to consider all other relevant factors in crafting the visitation decree. A Pennsylvania statute, effective December 15, 1996, authorizes a grandparent or great-grandparent, in appropriate circumstances, to be awarded visitation, partial custody or physical and legal custody of the child.

What’s New in Estate Planning Law?

Reverse mortgage scams. The Department of Housing and Urban Development (HUD) has issued a directive to prevent “estate planners” from charging senior citizens thousands of dollars for information on reverse mortgages which HUD offers at no cost. Elderly Americans are being charged six to ten percent of the loan value, up to $10,000 by some companies, for help in filling out applications, or to supply the names of lenders who provide reverse mortgages. Any Federal Housing Administration (FHA) lender that does business with companies charging large fees for providing this information will be expelled from FHA business across the board. Life insurance valid even if imposter took physical. An HIV-positive man who sent an imposter to take his life insurance physical still has the right to collect on the policy. In rejecting the insurer’s imposter defense, the California Supreme Court pointed out that, with minimal effort, the insurance company could have discovered the fraud at the outset. Beneficiaries have a right to expect, that after the premiums are paid for the specified time, the insurer will promptly pay the policy proceeds upon the insured’s death (14 Cal. 4th 1231).

What’s New in Health Law?

HMO has duty to disclose physician incentive plan. Despite numerous warning signs that a patient had heart disease, the primary care physician of his employer-sponsored health maintenance organization (HMO) refused to refer him to a cardiologist. The patient died of heart failure a few months later. The patient’s wife claimed that the HMO’s behind the scenes efforts to reduce covered referrals violated the HMO’s fiduciary duties under the Employee Retirement Income Security Act (ERISA). In holding for the plaintiff, the U.S. Court of Appeals, Eight Circuit stated that ERISA requires a fiduciary to disclose all material facts affecting the participant’s interests. A financial incentive scheme designed to influence a treating doctor’s referral practice when the patient needs specialized care is a material piece of information that could affect a plan member’s health care interests. If the patient had been aware of his doctor’s financial stakes, he could have made a fully informed decision about whether to follow his doctor’s recommendation against referral to a cardiologist.

What’s New in Landlord/Tenant Law?

Lead paint injury is covered by insurance. The insurance company of a landlord who was sued after a child ingested lead paint must defend her under a general liability policy–in spite of a standard “pollution exclusion”. The policy excluded claims arising out of the “discharge, dispersal, release or escape of…contaminants”. The court ruled that the policy was ambiguous and should be interpreted in favor of the policyholder because a person probably would not assume that “contaminants” included lead that was “purposely incorporated” into paint (Illinois Court of Appeals). New Hampshire, New York, Maryland, Massachusetts and Wisconsin have similar rulings.

What’s New in Personal Injury Law?

Kentucky recognizes loss of parental consortium. Minor children have a cause of action for loss of parental consortium due to another’s negligence. A woman died while giving birth. Her husband sued the obstetrician individually and on behalf of the couple’s four minor children alleging loss of consortium. The Supreme Court of Kentucky recognized that the remedy for children who lose their parents’ love and affection because of another’s negligence is a natural development of the common law.

What’s New in Real Estate Law?

Squatter’s rights defeated if owner files bankruptcy. A company used land from 1966 to 1991. However, the titleholder filed bankruptcy in 1977. The Illinois Court of Appeals ruled that the bankruptcy stopped the adverse possession clock. Therefore, the company cannot claim adverse possession even though it used the land for the 20-year statutory period.

What’s New in Small Business Law?

Nevada gambling service sued in Minnesota. A Nevada company that used the Internet to advertise an on-line gambling service can be sued in Minnesota because this established “personal jurisdiction” there. It was sued by the state of Minnesota for deceptive trade practices because gambling is illegal in Minnesota. The company can be sued in Minnesota because it “demonstrated a clear intent to solicit business from markets that include Minnesota”. Although the company argued that its Web site was not directed at Minnesota residents, it made a “clear effort” to reach and solicit customers in all U.S. jurisdictions, because it said betting was “open to all international markets” and offered a toll-free information number (Minnesota Court of Appeals). See vol. 2, no. 2 regarding a New York company that was sued in California solely because of e-mail and telephone contacts. New rules for job interviews. After making a conditional job offer, the employer can give medical examinations, ask for medical documentation of a disability and ask disability-related questions it couldn’t ask before, such as whether the applicant has filed a workers’ compensation claim or how long he’s had a drinking problem. However, such questions must be asked of everyone, unless they are “follow-up” questions such as a question about the length of a drinking problem once the applicant has disclosed that he has one. Likewise, a medical exam can be given only if it is given to everyone, unless it is a follow-up exam. It is illegal for an employer to release medical information about an applicant or employee to anyone except:

• Supervisors and managers;
• First aid and safety people;
• The government; and
• Insurance companies.

Injured Victims’ Rights

The Friedman & Ranzenhofer, P.C. Ten Point Pledge to Accident/Injury Clients is:

• To communicate with you in plain language that is easy to understand.
• To promptly return your telephone calls.
• To quickly and thoroughly investigate and analyze your case. Friedman & Ranzenhofer, P.C. does not accept every accident case.
• To have your case personally handled by an attorney.
• To keep you informed of the progress of your case at all times.
• To show you the personal care, concern and attention which has been the hallmark of our law firm since 1955.
• To not handle your case in an “assembly line” fashion.
• To accommodate the needs of you and your family during the handling of your case.
• To vigorously protect your legal rights.
• To never release your name to the media after your case has been completed, except with your written permission.

Attorney Michael H. Ranzenhofer limits his practice to automobile accident, slip and fall, dog bite and defective product cases. He is a member of the Association of Trial Lawyers of America, the New York Trial Lawyers Association, the New York State Trial Lawyers Association and the Erie County Bar Association Negligence Committee.