Spring 1999

Vol.3 – No.4

What’s New in Consumer Law?

Shopper awarded $3 million for malicious prosecution. A woman, who was wrongfully accused of stealing a telephone from a store and was handcuffed in front of her children, was awarded $3 million in punitive damages and $200,000 in compensatory damages by an Alabama Circuit Court jury. The woman entered the store with her two young children to exchange a telephone that she had purchased a week earlier and presented a receipt. When she could not find the phone that she wanted in the store, she decided to keep her initial purchase. She bought motor oil and left the store. Outside of the store, she was detained and accused of stealing the phone. Although she provided a receipt, a security guard called the police. She was acquitted of theft charges after a criminal trial.

What’s New in Debtor/Creditor Law?

Student loans harder to discharge in bankruptcy. Student loans were previously presumed to be non-dischargeable unless either the first payment was due more than seven years before the bankruptcy was filed or repaying the loans would create an “undue hardship” for the debtor. A new bankruptcy law eliminated the seven-year exception for all federal student loans for post-secondary education, including community colleges and trade schools. Only the undue hardship provision remains. Undue hardship may arise due to a debtor’s income and family size. However, Department of Education regulations provide that a debtor may be able to avoid paying student loans in whole or part where: (1) permanent disability makes it impossible to return to work; (2) the debtor’s school closed either before he finished his degree or within 90 days thereafter; (3) the student was admitted to a school even though he didn’t have the required qualifications; and (4) the school did not give a prorated tuition refund when the student left the school early. Also, the Department of Education will assist the debtor to devise an affordable payment plan if he has requested renewed eligibility for financial aid or has defaulted on his loans and wants to consolidate.

What’s New in Divorce/Family Law?

Ex-wife gets life insurance proceeds. A couple married in 1972. Within a year, the husband developed multiple sclerosis. He became blind in 1974. When they separated in 1977, he went to live with his father where he remained until his death in 1984. The couple divorced in 1978. He never notified the life insurance company of his intended change of beneficiary. In his will, he gave all of his property including “insurance benefits” to his father. However, the New York Court of Appeals held that “general testamentary statements in a will” will not do because “the method prescribed by the insurance contract must be followed in order to effect the change of beneficiary”. (92 NY2d 436)

What’s New in Estate Planning Law?

What happens if you die without a will? Dying without a will may result in your estate going to someone you didn’t intend to receive it, unnecessary estate taxes, delays in settling the estate, added estate expenses and leaving your estate assets without proper management and protection. If you die without a will, state law makes the decision as to the distribution of your property. If you die leaving a spouse and children, your spouse receives $50,000 and one-half of the estate and your children receive the balance. A properly drawn will is the only way to be sure that your property at your death goes where you want it to go. By executing a will, you may dispose of real estate and personal property at your death in the proportions and to the persons you wish; appoint competent and trustworthy executors, trustees and children’s guardians; and create trusts. If you will be leaving large sums of money to your minor children, the will should provide for a trust with a trustee who can provide proper money management until your child reaches the age of eighteen (18) or older. Making a will is a privilege and if it is not executed in strict compliance with state law, it may be declared to be invalid and your property will pass as if you had no will.

What’s New in Health Law?

$250 million verdict against nursing home. A verdict for $250 million in punitive damages was rendered against a nursing home, which was part of a chain of 17 Texas nursing homes, for the death of a patient from malnutrition. After the patient suffered a stroke in October of 1993, he was placed in a nursing home because he repeatedly fell out of bed and couldn’t get back up due to paralysis on one side. In February of 1994, the patient’s daughter began complaining to the nursing home staff about filthy conditions and lack of care for her father. The home was severely understaffed and many workers showed no concern for the patients’ well being. During the last six months of his life, care for the patient rapidly deteriorated. The food and milk on his tray often remained untouched. Because of his paralyzed hand, he was unable to open his milk carton by himself or cut his food into edible portions. It took the nursing home doctor one month to notice his emphysema. His immediate cause of death was hypoxemia — inability to breath — and pulmonary disease. He was also found to be suffering from malnutrition.

What’s New in Landlord/Tenant Law?

Do’s and don’ts for landlord survival. Landlords can prevent costly mistakes by taking the following preventive measures:

• Do screen all tenant applicants with a rental application and credit report; and check references.
• Do draft written leases whether for a month-to-month tenancy or for a fixed term.
• Do use move-in/move-out checklists supported by photographs and videotapes.
• Do warn tenants of the dangers of lead paint in properties built before 1978 by using the required lead paint disclosure form and booklet.
• Do educate yourself about housing discrimination laws — ignorance is no excuse.
• Do require renter’s insurance.
• Do provide rent receipts containing the date, the amount, the identity of the premises, period for which paid and the signature and title of the person receiving the rent.
• Don’t give the apartment keys to the tenant until the first month’s rent and security deposit are paid and the lease, application and the move-in/move-out checklist have been signed.
• Don’t wait too long to evict delinquent or troublesome tenants. Immediately evict drug dealing tenants to avoid civil forfeiture and fines.
• Don’t ever have tenants do repair work or painting in exchange for the payment of rent.
• Don’t ignore building code violations.

What’s New in Personal Injury Law?

Testimony of pathologist and police supports tavern’s dram shop liability. The New York Court of Appeals upheld a verdict against a tavern in favor of a widow who sued for her policeman/husband’s wrongful death from a drunk driver. In a previous Court of Appeals case, a pathologist’s mere deduction, from alcohol tests, about the driver’s supposed “visible intoxication” was held insufficient and the tavern won a dismissal. However, in this case, the accident occurred shortly after the driver left the tavern and several policemen who saw the driver at the accident scene testified that he swayed and staggered, was glassy-eyed and had alcohol on his breath. The pathologist, unlike the one in the previous case, had a background in understanding alcohol and had written about it. (92 NY2d 396)

What’s New in Real Estate Law?

Owner may move easement. A property owner can relocate an easement without the easement holder’s consent. A neighbor was allowed to use the owner’s driveway to reach his own house. When the owner moved his driveway 50 feet closer to the property line in order to build tennis courts, the neighbor objected. He argued that because the easement had existed for 37 years without change, it couldn’t be moved without his consent. However, the New York Court of Appeals held that the easement wasn’t intended to give the neighbor the right to use a Particular driveway but simply “a right of ingress and egress”. The court ruled that “a landowner, consonant with the beneficial use and development of its property, can move a right of way, so long as the landowner bears the expense of the relocation, and so long as the change does not frustrate the parties’ intent or object in creating the right of way, does not increase the burden on the easement holder, and does not significantly lessen the utility of the right of way”. Courts in Connecticut, Louisiana, New Jersey and Pennsylvania have held similarly, while courts in Delaware, Maine and Ohio have held to the contrary.

What’s New in Small Business Law?

Corporate formalities checklist. Corporations must maintain proper formalities to safeguard limited liability and proper tax treatment. A corporation needs to be treated as a separate entity in order for the shareholders to avoid potential business liabilities and tax problems. Many of the important “arm’s length” indicia that are evaluated by courts and the IRS include the 14 items discussed in this three-part series. Items one through five were discussed in the Spring 1999 issue and items six through ten were discussed in the Summer 1999 issue.

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.