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Palestinian National Authority and PLO Subject To Suit In U.S. District Court for D.C. Under Antiterrorism Act

In Biton v. Palestinian Interim Self-Government Authority, the U.S. District Court for D.C., for purposes of ruling on a motion to dismiss, held that it may exercise personal jurisdiction over the Palestinian National Authority and the PLO; that Palestine is not a “state” for purposes of the FSIA based on the current record; and that this case does not present a non-justiciable political question.

Maryland Court of Appeals Cuts Back Limitations Defense Based On Failure To Timely File Certificate of Merit in Medical Malpractice Arbitration

In Navarro-Monzo v. Washington Adventist Hospital, et al., the Maryland Court of Appeals pruned back a defense based on the untimely filing of a Certificate of Merit in a Health Claims Arbitration proceeding.

Essentially, the Court held that the Health Claims Arbitration Board has statutory authority, for good cause shown, to grant extensions of the time to file a Certificate of Merit for any length of time. Therefore, as long as plaintiff's counsel files motions to extend the time for the filing of a Certificate of Merit that are supported by good cause, it is unlikely that this defense will be successful in the future.

The Court of Appeals stated, in pertinent part, as follows:

The several provisions at issue here may be read together with out any difficulty. Recognizing the harshness of the penalty it has exacted for failing to file a certificate within the initial 90-day period, the General Assembly has provided three distinct, but complementary, escape valves. First, it has required that an extension of up to 90 days be granted if the conditions stated in §3-2A-04(b)(1)(ii) are met. Second, in §3-2A -04(b)(5) it has provided that an extension without any fixed statutory limit shall be granted by the Director or panel chairman for good cause shown. And finally, in §3-2A-05(j), it has allowed either of those persons to lengthen the time for filing the certificate, again without any fixed limitation. Especially as the right to grant indeterminate extensions was enacted as part of the bill that imposed the requirement in the first instance, was stated twice in the law, and was not amended in the 1989 enactment, there can be no doubt that it remains fully intact.

Notwithstanding a mandatory extension under §3-2A-04(b)(1)(ii), the Director and the panel chairman retain the authority to grant a further extension, beyond 180 days from filing of the claim, upon a showing of good cause.

Finding That A Judgment Is A Legal Creature of Singular Dignity, Virginia Supreme Court Adopts Judgment Rule In Legal Malpractice Actions

Virginia has long been one of the minority States that follow the payment rule in legal malpractice actions, i.e., that a plaintiff who sustains a judgment against him does not have a cause of action for legal malpractice against his attorney until he actually pays all or part of the judgment. In a recent case, Shipman v. Kruck, the Virginia Supreme Court overruled the Duesterdick case and adopted the judgment rule. The meat of the opinion on this point is as follows:

First and foremost, adherence to a payment rule would vest the aggrieved client with the power to forestall the running of the statute of limitations by the deferral of payment, regardless of whether he has already suffered damages sufficient to give rise to his cause of action. It is the legislature that decides when causes of action shall accrue, not plaintiffs. Second, such a rule does not protect a client who, due to bankruptcy or insolvency, cannot afford to pay whatever damage he has suffered. “If the client has no cause of action until he has paid the judgment against him, then the larger the judgment, the greater the client’s burden and the lawyer’s impunity; the greater the injury wrongfully inflicted, the less the liability of the wrongdoer.” Duesterdick, 217 Va. at 767, 232 S.E.2d at 777 (Poff, J., dissenting). Finally, the “payment rule”, in a statute of limitations context, would work an injustice on attorneys who may be forced to defend allegations of malpractice brought many years after the alleged breach occurred, dependent entirely upon the ability or whim of the complaining client to pay the resulting damages. In this regard the “payment rule” defeats the primary objectives of statutes of limitations, such as compelling “the exercise of a right of action within a reasonable time,” Street v. Consumers Min. Corp., 185 Va. 561, 575, 39 S.E.2d 271, 277 (1946), preventing surprise, and avoiding problems “incident to the gathering and presentation of evidence when claims have become stale.” Truman v. Spivey, 225 Va. 274, 279, 302 S.E.2d 517, 519 (1983). Application of the “payment rule” to the facts of the case at bar, as the Shipmans urge, illustrates these defects. Even if we determined that when the Shipmans hired the second attorney they incurred legal fees, and thus damages sufficient to establish a cause of action, there is no indication in the record as to when those fees were paid. If they had given a retainer to that attorney on their first visit, presumably the “payment rule” would then be satisfied and their cause of action would begin to accrue. Suppose, instead, the Shipmans did not pay their attorney for six months, one year, or longer. Such a scenario exemplifies why the payment rule would frustrate the will of the legislature and circumvent the objectives of the statutes themselves if made applicable in a statute of limitations context. In the context of a judgment entered against a client by virtue of his attorney’s purported negligence, we said in Duesterdick, “until the client has made a payment on that debt he has suffered no actual loss or damage.” 217 Va. at 766, 232 S.E.2d at 776. For the reasons set forth above, we conclude that this is an incorrect statement of law. As Justice Poff stated in his dissent in Duesterdick, a client who suffers the entry of a judgment against him indeed suffers a legal injury or damage. There is little remote, speculative, or contingent about a money judgment. Indeed, it is a legal creature of singular dignity. Such a judgment calls into existence what did not exist before, viz., a liquidated debt. Except for jurisdictional defect, that judgment and the debt it creates cannot be collaterally attacked and is actionable in every state. The recorded judgment constitutes a continuing lien (securing the debt and the interest as it accrues) on the debtor’s assets (presently owned and later acquired), a lien that is enforceable by public sale. Subject to the statute of limitations, the debt survives the debtor’s death and may be revived against his personal representative. Code § 8-396 (Cum. Supp. 1976). Some judgments, such as that suffered by the client here, survive bankruptcy. 11 U.S.C. § 35. Id., 217 Va. at 768, 232 S.E.2d at 777. Accordingly, our prior decision in Duesterdick is overruled and cannot be viewed as supporting the Shipmans’ argument, which we reject.

Lead in D.C. Drinking Water -Update

The Washington Post today reported that Paul Hastings Janofsky is filing a class action in D.C. Superior Court against the District of Columbia and WASA arising out of the problem with lead in the drinking water.

Earlier the Post reported that the problem may not be limited to lead from lead service lines, but also may be the result of lead being leached from brass fixtures by chloramine used for water purification. And it probably is a problem with national scope.

Ironically, while this news is being greeted with shock and dismay in D.C., it is not exactly a new problem, e.g., this link shows that Philadelphia has recent experience with this problem.

The EPA has a website discussing lead in drinking water.

Later: The D.C. government has a web page with further information on the problem.

Maryland Court of Special Appeals Holds That Real Estate Appraiser Can Be Liable Under Maryland Consumer Protection Act

In Hoffman v. Stamper, the Court of Special Appeals of Maryland issued a 115 page opinion concerning a fraudulent real estate "flipping" scam in Baltimore. The buyers were awarded a total of $129,020.03, in economic damages, and $1,305,000, in non-economic damages, against all the defendants. The appellants were three defendants who had a more peripheral role: a mortgage company, a loan officer, and a real estate appraiser. The plaintiffs cross appealed the dismissal of their punitive damages claims against these same defendants. The court affirmed the verdicts in favor of the plaintiffs, but reversed and remanded on the cross appeal, finding that punitive damages should have gone to the jury.

Among other things, on appeal the Court held that a real estate appraiser was properly found liable under the Marland Consumer Protection Act, even though he did not directly engage in selling the property. The Court reasoned:

Hoffman's appraisals were so vital to the sales of consumer realty here that his conduct in performing them was the equivalent of conduct committed “in” the sale, for purposes of the MCPA. Unlike the defendants in Morris, who produced the plywood to be used for any purpose for which plywood is suitable, and who in no way participated in influencing the plaintiffs' decisions to purchase consumer realty, Hoffman knew, from his familiarity with FHA regulations, that his appraisals were critical to effectuate the sales. Moreover, the evidence showed that, without the inflated appraisals, the sales would not have transpired. Accordingly, the evidence was sufficient to support a reasonable finding that Hoffman engaged in unfair and deceptive trade practices in making material misrepresentations about value in the appraisals.

Slip. op., page 72.

The trial court had also awarded the buyers' lawyers $195,591.26 in fees and expenses under the Maryland Consumer Protection Act. The Court of Special Appeals vacated this order, while affirming the jury verdict, because it found that the case had to be remanded for consideration of punitive damages against the real estate appraiser and the two other defendants based on the evidence before the jury.

In sum, the appeal turned out badly for the appellants, who not only failed to disturb the main verdicts but who are now also exposed to punitive damages on remand.

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Life Imitating Art

Years ago, there was a funny Frasier episode concerning a dispute Frasier had over his condominium parking spot. Now, on March 5, 2004, Maryland's highest court has issued a 23 page opinion concerning a dispute over the ownership of a condominium parking spot. The Solomonic holding: the unit owner who sought a declaratory judgment that he owned the spot outright does not, after all, own the whole parking spot, but only the same percentage he owns of all the common property of the condominium.

The Internet As A Self-Regulating Marketplace -- Moving Company and International Shipping Scams

I have to admire those who, after being scammed over the Internet, go to elaborate trouble to create a website to warn other consumers of the same type of scam. This is especially important in under-regulated industries. The most recent example of this that I've come across is a site created by folks who have been ripped off by moving companies, called . Not only is it very informative about a relatively obscure subject, but the website itself is very nicely put together. I would highly recommend anyone planning a move, or who is looking for either domestic movers or international shipping solutions, to consult before you put any money down.