May 1997

Vol.1 – No.9

Hot Sites

The HUD home page (www.hud.gov), has information on all HUD programs including the acquisition of HUD-held homes or homes with FHA mortgage insurance; HUD Title 1 home improvement programs; housing opportunities for low income persons, the homeless, people with HIV or AIDS, people with disabilities, senior citizens, migrant farm workers, native americans and veterans; and a laymans description of the Fair Housing Act. The National Fair Housing Advocate (www.fairhousing.com)

What’s New in Consumer Law?

Consumer recovers $47,500.00 from builder for fraud. A builder sued a Missouri homeowner for $8,000.00 owed on a $38,000.00 basement remodeling contract. The homeowner counterclaimed alleging that the builder committed fraud when he represented to her that he would personally perform the work, but instead assigned the entire contract to another contractor; and that the contract was abandoned because the other contractor left the job site without completing the job. The builder paid the homeowner $47,500.00 to settle the case (St. Louis County Circuit Court).

What’s New in Debtor/Creditor Law?

Creditors can reach IRA rollover. When an employee rolled over a $70,000 retirement plan into an IRA, his creditors can reach all but $15,000 of it. Under Pennsylvania law, only the first $15,000 contributed to an IRA in a single year can be protected from creditors and the rollover was considered a single contribution. Massachusetts, North Dakota, Vermont and Virginia also have ceilings on how much of an IRA can be protected from creditors. Hawaii, Iowa, Louisiana, Mississippi, Montana and Nebraska have look-back provisions to deny protection to recent IRA contributions. The employee rolled over the $70,000 retirement into an IRA in 1992. When he went bankrupt in 1994, he tried to keep the IRA. However, the Chapter 7 Trustee argued that all but $15,000 was property of the bankruptcy estate (U.S. Court of Appeals Third Circuit). As reported in Volume 1, Number 8 of the Legal Survival Newsletter, the Third Circuit applying New Jersey law and the Eleventh Circuit applying Georgia law held to the contrary.

What’s New in Divorce/Family Law?

Pre-marriage worker’s comp. is marital property. A husband’s worker’s compensation award for an injury sustained before he got married is “marital property” to the extent that it compensated him for lost wages he would have earned during the marriage. The court reasoned that the modern and prevailing rule is to look at the purpose of the benefits, rather than the timing of the accrual of the underlying claim (Maryland Court of Special Appeals). Colorado, Florida, Georgia, Maine, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Oklahoma and Rhode Island have rendered similar decisions. The Texas Supreme Court has ruled to the contrary reasoning that the loss was incurred before marriage.

What’s New in Estate Planning Law?

Nursing home patient’s family members are not responsible for financial guarantees. Guarantee agreements signed by the family of a nursing home patient are not legally enforceable. The Plaintiffs argued that the guarantee agreement was a tactic to deceive residents’ family members and friends into guaranteeing nursing home payment. Federal law prohibits a nursing facility from requiring a financial guarantor as a condition of admission (California Court of Appeals).

What’s New in Health Law?

Employee can sue doctor for false drug test. A bus driver who was fired for receiving a “false positive” drug test can sue the doctor who collected the sample for negligence. The doctor’s office was required to have the employee watch while a sample was sealed and to have him initial the outside of the package. However, he left the office before the package was sealed and one of the doctors’ employees later signed the Plaintiff’s name on it (U.S. District Court for the Northern District of New York). Courts in Delaware, Illinois, Massachusetts, Missouri and Ohio have allowed similar claims. The Fifth Circuit (applying Texas law), a U.S. District Court in Pennsylvania and the Maine Supreme Court have held to the contrary. Louisiana Appellate Courts are split. HMO patient rights bills pending. The proper care for 60 million HMO patients is the subject of proposed legislation in nine states and in Congress due to patients being denied access to specialists, ill patients being denied full information on medical options and breast cancer patients forced out of hospitals by insurers on the day of surgery. The proposed state legislation would require an HMO to let patients use an outside doctor if they agree to pay an additional fee. It would also require HMOs to clarify the use of experimental treatments and ease rules restricting emergency care and prescriptions. Congress is working on proposed consumer rules for HMOs.

What’s New in Landlord/Tenant Law?

Landlord not liable to tenant who was attacked on a neighboring vacant lot. The landlord could not be sued for failure to warn even though he: knew of several muggings and murders on the lot; knew that tenants walked through the lot to a nearby shopping center; maintained a fence with an opening that allowed access to the lot; and had a property manager who was also a rental agent at the shopping center. The court ruled that a landlord cannot be liable for an attack on a property from which he receives no “economic benefit” (New Jersey Supreme Court). A California Supreme Court permitted a suit against the landlord for an accident on a neighboring property where he exercised control over the property, regardless of any economic gain.

What’s New in Personal Injury Law?

$14 million for death caused by defective school bus door. As a 14-year old boy walked down the steps out of the school bus, a toggle at the bottom of his jacket drawstring became wedged in a crevice between the handrail and the door of the bus. The driver closed the doors, not noticing that the boy’s jacket was caught and that he was being dragged along. He was dragged for several hundred feet before being able to remove his jacket. However, seconds later, he was run over by the rear wheels of the bus and pronounced dead 30 minutes later at the hospital. The bus company, bus driver, school district and superintendent of transportation were sued by the boy’s mother alleging that the district had hired an unqualified and unsafe driver and that the bus was unsafe. More than 20 deaths and many serious injuries have been caused by clothing and backpacks being caught in the handrail crevices on school buses. School bus manufacturers ordered a safety retrofit to correct the problem in 1993. A $14 million settlement was reached (Jackson County Circuit Court, Kansas City, Missouri).

What’s New in Real Estate Law?

Landlords will be prevented from renting Section 8 housing to relatives. New HUD regulations close a loophole that had allowed landlords to house relatives in their property while collecting Section 8 federal housing subsidies meant for the poor. It was a great deal for landlords and tenants. Property owners could take care of relatives, while the government gave them up to $4,000 or more a year in rental subsidies. The loophole came to light when it was discovered that a high percentage of real property tax delinquencies had tenants and landlords with similar names. A retired couple could deed their home to an adult child and then apply to the Section 8 program for a subsidy because their income was less than the program limit. HUD’s Section 8 Housing Guidelines are as follows:

• Applicants must be income eligible.
• They must be on a housing waiting list for two to five years.
• Rentals are below fair market rate established for the region.
• Rentals are reasonable compared to comparable unassisted rental housing in region.
• HUD inspected the housing units before granting subsidy and annually thereafter.
• Units meet HUD standards for health and safety.
• Applicants may not rent from relatives unless the applicants are handicapped and request a waiver from HUD (Effective Mid-1997).

What’s New in Small Business Law?

Buyer can be sued for products liability. The buyer of the assets of a company that manufactured presses can be sued in products liability even though it did not assume any of the seller’s liabilities. Generally, a successor company is not liable unless it expressly assumes liability. However, the New Mexico Supreme Court adopted the minority “product line” exception to the general rule which applies where the successor continues to produce and market the same product, using the same designs, equipment and name. California and New Jersey have similar rulings while Colorado, Illinois, Massachusetts, Nebraska and North Dakota have contrary rulings.

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.