Message From The Chair

What Have We Been Up to This Past Year?

By Jeff E. Rubin, Esq.

Just when things started to get rolling, my term as CRS Chairman is slowly winding down. Before you know it, we will all be together in New York and Bobby Bernstein of Charleston, S.C., will be your new Chairman.

This year has flown by for me and I cannot tell you how great the experience has been to work with people like Chris Hickey, Bobby Bernstein, Beau Hays, Ed Friedman and Dick Schascheck. In addition, Dave Watson and the staff at CLLA and TSO have been remarkable and I can candidly say that no matter what challenge was placed in front of this Section or me this year, the staff went beyond its call of duty to accept the challenge. 

About a year ago, I set certain goals for this Section to accomplish, and I think we have achieved 90 percent of them. The year started out with the Section’s support of an amicus brief to be written in the matter concerning the Commercial Credit Counseling Service case. The brief was filed and at the time of this article, we are awaiting the court’s ruling.  We are proud that CRS took a position and supported it by writing an amicus brief.

Education remains a primary goal of this Section. In New York, we will be directly sponsoring seven educational programs, which cover a wide gambit of topics including ethics. We also are trying something new in New York. We are giving special attention and financial support to an FDCPA mock trial, which is being put on by the CRS Retail Collections and Education committees. The organizational efforts have been exhausting and we hope that the program will give each of you, as well as members of the League, an inside look at a typical FDCPA trial. CRS has gone out on a limb with this program by spending more money and time than we have with any other programs produced in the past. However, we feel it is worth the effort and funds because of the educational opportunity. At the same time, there are numerous other programs that will be of great benefit to our members.

Beau Hays and the Finance Advisory Committee have been working very hard reviewing the Section’s financial activities. They have provided the Executive Council with recommendations relating to revenue and expenses. The Finance Advisory Committee has recommended a proposed budget, which will be approved in Chicago 2006, utilizing increased dues. Costs to maintain the Section’s goals have continually increased over the years. For example, the cost of a pot of coffee in New York is $98. This gives you some perspective as to of the cost for the Section to accomplish any of its goals and responsibilities throughout the year.

The first annual Award of Excellence was given in Chicago 2005, to Professor, James J. White. Mark Sheriff and the Promotional Development and Marketing Committee have been working hard to obtain nominations for the 2006 award. You will see a copy of the application in this issue of the Free Press. Your nominations of worthwhile applicants are of great interest to CRS. 

Rob Morris and the Technology and Internet Committee have put together a ListServe, which has been in place for approximately six months. Although the List is just beginning, we hope that it will become more utilized over the coming years.

You should regularly be receiving Practice Alerts, which are being sent out every four to six weeks. The next Alert will be out before New York. We hope they have provided additional education throughout the year when we are not meeting together Your input to the Chair of the Section as to subject matter you would like to see in the Alert is, once again, greatly appreciated.

In New York, we will also be voting on a Bylaws Amendment adopting a standard procedure for multiple slate voting. Since there is no Bylaws Committee, I have asked Beau Hays to address the issue of establishing a standard voting procedure that we can use at our annual meeting in New York. The proposed amendment is discussed more fully in this issue. 

Lastly, the Free Press continues to arrive electronically or by mail thanks to the continued efforts of Nick Krawec and Brenda Majewski. Three times a year we all get an edition with educational articles, updates and news about the League and our Section. 

These are just a few of the items that we have accomplished this year. I have been very proud to serve as your Chairman, and cannot thank you enough for the opportunity to serve and lead such a great organization. I have made many new and dear friends who have given me the opportunity to lead this group in an efficient way. The Section is in good hands under the direction of our Chair-elect Bobby Bernstein. I know he will continue to accomplish the goals of the Section along with his new Board.

Editor’s Note: Jeff E. Rubin, Esq., practices law in Miami, Fla. He is a partner at the Law Firm of Talianoff Rubin & Rubin. Jeff concentrates his practice in the area of creditors’ rights, collection (retail and commercial), real estate and probate. He can be reached at jeff@mialaw.com

Washington Legislative Report

(As of October 13, 2005)

By David P. Goch, Esq.

Data Security breach notification legislation continues to be one of the hottest issues on the Hill. Its relevance, to any business, is that the bills being considered in Congress and the laws being enacted across the nation (20 states and counting) are written in such a manner that ANY person or business (e.g., law firm, accounting firm, collection agency) that possesses personally identifiable information and has a "breach" could be subject to the notification requirements and possible penalties.

The bills cut across many Congressional Committees’ jurisdictions and action has occurred in at least six committees. Recently, the Senate Judiciary Committee scheduled, but then cancelled, an early October markup of three bills dealing with personal data security. Sen. Specter, R-Penn., the Chair, indicated that the committee nevertheless intends to move forward with a bill focused on public notification of data security breaches even if his larger identity theft measure cannot easily be passed.

The Committee looks to address: S.751, which requires agencies to disclose personal data theft; S.1326, which requires companies to disclose security breaches that pose a risk of identity theft; and S. 1789, a newly introduced bill (September 29th), by Sen. Specter and the ranking member, Sen. Leahy, D-Vt. Entitled the Personal Data Privacy and Security Act, S. 1789 is an amended version of S. 1332, which Specter and Leahy introduced in June.

S.1789's introductory statement indicates the bill is broad in its scope and is intended to: prevent and mitigate identity theft; ensure privacy; provide notice of security breaches; and enhance criminal penalties, law enforcement assistance and other protections against security breaches, fraudulent access, and misuse of personally identifiable information.

The key challenge in drafting such legislation is determining when consumers should be notified of breaches—businesses being opposed to a trigger that could result in "over-notification" and consumer groups concerned about a narrow standard. To address this, S. 1332 would require businesses seeking a notice exemption to consult with federal law enforcement and the attorney general of each state affected by the breach to determine if there is a "de minimis risk" of harm to consumers. S. 1789 allows companies to avoid notifying consumers about data breaches if a risk assessment concludes there is no "significant risk" of identity theft.
S. 1332 originally proposed restrictions on the buying and selling of Social Security numbers, but that provision was not included in the revised bill. A Leahy spokeswoman said that removing the section was a compromise to get more committee members to support the bill.

Specter said that if the committee is not able to pass his bill, the panel will move ahead with S. 751, introduced by Sen. Feinstein, D-Calif. Specter has called Feinstein's measure a "modified version" of his bill.

As introduced, Feinstein's bill would require notification of "any unauthorized acquisition" of information. Feinstein has drafted a new version, with Sen. Kyl, R-Ariz., which uses "significant risk" as the standard for notifying consumers.

On the House side, H.R. 3997, the Financial Data Protection Act, was introduced late on October 6, by members of the House Financial Services Committee (Reps. LaTourette, R-Ohio, Pryce, R-Ohio, Castle, R-Del., Hooley, D-Ore., and Moore, D-Kan.), would amend the Fair Credit Reporting Act to require companies notify consumers about data breaches posing "substantial harm or inconvenience," and establishes detailed notification guidelines, including the use of a standardized envelope or e-mail (to be developed by Federal regulators).

Notices would include, among other things, a general description of the actions taken by the company to restore the security and confidentiality of the breached information. In addition to notification of data breaches, the measure would require "reasonable" policies and procedures to protect the security and confidentiality of sensitive information.
Although this type of legislation, at a Federal level, is unlikely to be signed into law in calendar year 2005, it is sure to be a big issue in 2006.

Bankruptcy News

In bankruptcy news, with less than two weeks before the bankruptcy reform act takes effect (Pub. Law 109-8) bankruptcy filings nationwide are skyrocketing, with new "records" being set every week.

By way of comparison, daily averages in September 2005 were 10,367, which was well above the average of 6,079 in September 2004, but well below the daily averages of the last week of September—about 13,000. Last week through October 7, filings were averaging 20,000 a day. That number has increased this week with 100,000 Chapter 7 filings occurring in the first three days alone.
At this rate, the total filings for FY 2006 will be well over 2.5 million. However, it is believed the increase in filings will decrease dramatically the week of October 17. 

Post Hurricane Katrina, a movement has come about to provide bankrupt individuals some level of relief from, or even waiver from the implementation of, the new bankruptcy reform acts (some of the legislation addressed just Katrina, others were broader and spoke of victims of any natural disaster). To date, the bills have not seen much movement, with the House being less enthusiastic about addressing them, but the Senate Judiciary Committee scheduling, but then postponing, a mark-up of the legislation.

In related news, on October 4, the U.S. Justice Department announced a temporary waiver of the credit counseling requirements under the BAPCA for bankruptcy filers in Louisiana and the Southern District of Mississippi, due to Hurricane Katrina. Under BAPCPA, U.S. Trustees can waive the credit counseling requirement within a judicial district where approved credit counseling agencies are not reasonably able to provide adequate services.

The department's U.S. Trustee Program also announced 41 credit counseling agencies approved for bankruptcy filers in all federal districts that the U.S. Trustee Program is responsible. The list is posted on the program's Web site: http://www.usdoj.gov/ust.
Furthermore, the attempted regulatory loosening of the standards set by the Bankruptcy Reform Act continued on October 6 when the Justice Department said that the U.S. Trustee program would relax the strict Chapter 7 rules for those individuals impacted by natural disasters (suggesting beyond just Katrina), allowing their loss of income to be considered, as well as the related increased expenses, in determining if they qualify for relief under Chapter 7. The Trustee office also indicated that it would not challenge debtors unable to meet the paperwork requirements if documents are destroyed in the natural disaster.

People displaced by a natural disaster would be allowed to file their case, and attend hearings, in the location that they now reside.
Finally, the Judicial Conference of the United States is holding open meetings in early 2006. The meeting of the Judicial Conference Committee on Rules of Practice and Procedures will be held on January 6-7, 2006, at the Hermosa Inn in Scottsdale, Ariz. In addition, the Advisory Committee on Rules of Bankruptcy Procedure will be meeting March 9-10, 2006, at the University of North Carolina School of Law, Chapel Hill, N.C.

Editor’s Note:  David P. Goch, Esq., is the CLLA Washington Legislative Counsel.

Education Committee 

By Randy T. Slovin, Esq.

If New York City isn't enough to draw you to well, New York City, then maybe you should check out some of the educational programs sponsored by the Creditors' Rights Section. You will have opportunities to earn up to nine continuing legal education hours, depending upon your state, by attending the CRS fine slate of education programs.

On Friday morning, join well-known Canadian creditors’ rights attorney David Rubin along with Trustee in Bankruptcy, Philippe Jordan, as we learn about the rights of American creditors under Canadian bankruptcy law. In light of the increasing amount of trade between Canada and America, we will have to become somewhat fluent in this area, in order to properly advise our clients. 
Later that morning, Ian Bardin from Playa del Ray, Calif., will present "Tips & Tricks: Sharing Secrets of the Trade." This roundtable discussion is designed to give you some ideas how other attorneys are resolving their cases more efficiently and obtaining maximum recoveries.

Feel free to come with some ideas to share, or some questions that you would like answered. 

If you need a jolt of energy on Friday afternoon, join the editor of E-Gear magazine David Dritsas to find out about the hottest tools available on the market to assist you in your law practice. Robert Morris has designed "Gear for the Tech-Head" as a fun techno-seminar to fast forward you into the world of electronic gadgetry. 

Finally, on Saturday morning, you will not want to miss the FDCPA Mock Trial with Manny Newburger, Arthur Sanders and a cast of other lawyers and agency members, who will demonstrate the way an FDCPA trial is handled, even through jury deliberations. Stuart Blatt and the Retail Collections Committee have designed a unique experience for us as we watch how the jury responds to opening statements, the testimony and closing arguments. This presentation will force everyone to see the impact of the FDCPA on the collection process. 

If you need more reasons to attend, here you go.

Top 5 Reasons to attend the CRS Educational Programs:

5. You know more about Canadian bacon than you do about Canadian bankruptcy. 
4. You want to attend "Tips & Tricks: Sharing Secrets of the Trade" because you have not shared a secret since you were in the fourth grade. 
3. The last time you updated your technology in the office, you upgraded to a plain paper fax. 
2. Because you know that someday, someday you are going to be that blithering idiot on the witness stand, and
 
The No. 1 reason to attend the CRS educational programs…

1. You need to determine if Ian Bardin is the tallest lawyer in the CLLA!

Editor’s Note:  Randy T. Slovin, Esq., is a partner in the law firm of Slovin & Cummins Co., L.P.A., in Cincinnati, Ohio. He concentrates his practice in the areas of creditor representation in commercial litigation, banking, leasing, bankruptcy and creditors’ rights law (in addition to being a David Letterman wannabe).

Retail Collections Committee

By Stuart R. Blatt, Esq

Outreach: Joint association meetings

Outstanding association cooperative efforts have produced excellent coor-dination among creditors’ rights associations. Last month, an example of this coordination took place with a teleconference of the associations and their respective lobbyists (including CLLA).  League President Jerry Myers and  Executive Vice President David Watson are involved in appropriate CLLA action.

Meetings with members of Congress, the Senate and several federal agencies have taken place over the last several months. Congressional members have been educated on the various issues of concern to the creditors’ rights community, with an objective of resolution of those issues, and agency representatives now view us as a collective industry which has opened several doors. Developing problems with the IRS and the 1099-C issue, TCPA questions involving the FTC, and cell phone issues involving the FCC and FTC, are on the calendar of immediate events.

I cannot begin to tell you how pleased I am that all the associations are working together sharing common interests and undertaking cooperative efforts. It benefits the whole credit and collection industry. It is truly one of the most important steps undertaken in this industry in the last several decades.

 In connection with the 1099-C reporting requirements mentioned above, lobbying efforts have begun with other Joint Association Summit (JAS) members. A spring-summer meeting is anticipated with the IRS to discuss issues addressing clarification of requirements.

Amicus Briefs: another example of cooperation

NARCA and DBA programs will assist involved attorneys and/or firms in defending actions that concern national import to our industry. The first amicus brief was recently filed in a pending federal court action sanctioned by both associations. An outcome is expected before the next Free Press and will be reported in that edition.

Educational programs

The Retail Collections Committee will provide the key educational program for the New York conference. The program will be a mock trial including renowned attorneys, a real judge and jury members, handouts of the respective pleadings and video monitoring of all the proceedings, including the jury deliberations. 

NOTE: Fellow members in your office (collectors, managers, partners, admini-strative staff) will have the opportunity to attend this event at a reduced reasonable rate on Saturday morning of the conference. Blast e-mails will be sent in advance of this event. This could the most advantageous educational event you could provide to members of your office. You may register ahead or have your staff pay at the front door of the conference.

Now is the time to bring your staff to see an actual trial, enjoy a day in N.Y. City and all at a reduced rate. Attendees must be employed by an active CLLA member of the Creditors’ Rights, agency or Law List sections. This program follows the successful two-part FDCPA program Manny Newburger previously has presented at CLLA conferences.  Proceeds for the additional attendees will be donated to the Katrina Relief Fund.

Retail Collections Committee Meeting

Committee members and all interested persons are invited to attend our Committee meeting prior to the educational program. Please check your program for the time and place. Important new events will highlight our agenda along with a preview of the morning educational program.

Bankruptcy Reform Act

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("the Act") becomes effective October 17, 2005.  The chairman of the U.S. House Judiciary Committee stated there is no intention of reopening the sweeping bankruptcy law passed by Congress even with the events resulting from Hurricane Katrina.

However, the U.S. Trustee Program has issued bankruptcy enforcement guidelines that account for victims of the recent hurricanes.  U.S. Trustees will not file enforcement motions against debtors who cannot produce documents due to natural disasters, if they are otherwise eligible for bankruptcy relief.  U.S. Trustees will provide alternative means for a debtor to attend mandatory meetings of creditors if the debtor cannot appear and testify where the case is filed.

Two weeks before the new bankruptcy law goes into effect, debtor filings exploded to an unprecedented average of 13,000 a day in September/October. Week after week records are toppled. A week's filings of 68,287 exceed the peak set the previous week by 24 percent, according to Lundquist Consulting Inc., a research firm.

Some interesting provisions:

  • Homestead exemption and preferences, which are effective immediately
  • An individual debtor in a case under Chapters 7, 11 or 13, upon request made by the court, the United States Trustee or any party in interest, shall file with the court:
    a. all tax returns that come due during the pendency of the debtor’s case;
    b. any overdue returns, due for tax years ending in the three-year period ending on the petition date, that are filed during the case; and
    c. any amendments to those returns.
    d. Debtors’ counsel may be sanctioned under the act in the event a motion to dismiss is filed and is successful.
    e. The court may dismiss a case if it finds the petition was filed in bad faith or if the totality of the circumstances of the debtor’s financial situation demonstrates abuse.
  • The debtor must send a creditor any notice mandated by the Code and Rules to an address selected by the creditor. Any notice given to the creditor, other than in accordance with the act is not effective until the notice is brought to the attention of the creditor.
  • Debts incurred totaling more that $500 (formerly $1,225) for luxury goods or services within 90 days (formerly 60) of filing are presumed to be nondischargeable.
  • Cash advances totaling more than $750 (formerly $1,225) incurred within 75 days (formerly 60) of filing are presumed non-dischargeable.
  • A discharge may be revoked if the debtor fails to explain material misstatements or fails to make documents available in an audit. Audits of bankruptcy filings by the United States Trustee are mandated.

I spoke at the recent Las Vegas CRS Conference and also the 14th Annual Credit Card Collections Conference in Champions Gate, Fla., where the panel discussed the impacts of bankruptcy reform on the collections industry. I also will be addressing the IACC 35th Annual Convention, January 19-21, 2006, at the Royal Palm Hotel, Miami Beach, Fla., discussing "The Adversities of Commercial Collections: What Should I do Now?"

Miscellaneous

The U.S. 9th Circuit Court of Appeals blocked a portion of California's landmark financial privacy law Monday, ruling that banks had a right to sell their customers' private information to affiliated companies. The question in this appeal is whether the federal Fair Credit Reporting Act ("FCRA") pre-empts the California Financial Information Privacy Act as it regulates the exchange of information among financial institutions and their affiliates.

Nordstrom, Inc., the retailer, announced this week the launch of Nordstrom MODTM, an exclusive debit card for Nordstrom. MOD deducts Nordstrom purchases directly from a customer's personal bank account and offers all the benefits of the Nordstrom RewardsTM program previously unique to Nordstrom retail and Visa® cardholders.

The American Bankers Association reported Wednesday that the percentage of credit card accounts 30 or more days past due climbed to an all-time high of 4.81 percent in the April-to-June period.

After recent data security breaches, 17 states have now enacted legislation requiring that residents be notified of security breaches of databases containing their personal information. Other states are expected to enact similar bills in the near future.

Editor’s Note: Stuart R. Blatt, Esq., serves on the Executive Council of the Creditors’ Rights Section and is co-chairman of the Retail Collections Committee. He is a partner in the law firm of Margolis, Pritzker, Epstein & Blatt, P.A. in Baltimore, Md., which specializes in retail and commercial collections and general litigation matters in Maryland and Washington, D.C.  He serves as the President of the Maryland/District of Columbia Creditors’ Bar Association (MDCBA) and Chairman of the Joint Association Summit (JAS).

Nominating Council Report

By Christine Hayes Hickey, Chair

With elections for the Creditors’ Rights Section to be held in New York, the Nominating Council was charged with notifying members of the open positions, accepting nominations and certifying the slate. This is the Nominating Council’s report for candidates eligible to run for the positions noted.

The following officer positions are uncontested:

CHAIR
Robert A. Bernstein
Charleston, S.C.

CHAIR-ELECT
Beau Hays
Atlanta, Ga.

TREASURER
Ed Friedman
Baltimore, Md.

SECRETARY
Mark Sheriff
Columbus, Ohio

The following candidates are running for four (4) open positions on the CRS Executive Council:

Matt Burkinshaw - Milford, Maine
John Guerrini - Pasadena, Calif.
Chris Jameson - Dallas, Tex.
Liviu Vogel - New York, N.Y.
John Wanderer - Las Vegas, Nev.
Richard White - Tulsa, Okla.

Elections will be held immediately following the Creditors’ Rights Section General Membership Meeting, which begins at 2:30 p.m. in the Riverside Ballroom on November 12, 2005. Please mark your schedule to attend and cast
your vote.

Chair-Elect Report

By Robert A. Bernstein, Esq.

As I prepare to ascend to the Chair of the Creditors’ Rights Section, I am humbled by the confidence the membership has placed in me and, at the same time, anxious to be a part of the legacy of leaders who have in just a few short years shaped this Section into the most dynamic Section of our beloved Commercial Law League. The past leaders of our Section have, almost without exception, continued to be involved in the League through positions on the Board of Governors. On behalf of our membership, I offer a hearty thanks to Jeff Rubin for the tireless and able leadership he has provided us over the last year. We have been fortunate to have dynamic, capable leaders for our Section, and Jeff has continued this fine tradition. It is also comforting to know that the remarkable abilities of the incoming Board ensure that I will not be able to screw things up too badly over the coming year.

While our leadership has served us well, we can only continue our vitality as a Section if we encourage new members to take up the mantle of leadership. When I was prodded years ago to attend a Creditors’ Rights general membership meeting, I sat quietly and did not get involved until several years later, when asked to assist with a project. I urge all members of the Section not to make this same mistake; do not wait to be asked to become involved with the Section, but take the initiative to volunteer to serve on one or more committees over the coming year. Active participation will lead to greater benefits through personal gratification, close friendships and, most important, the trust of your fellow members. While attendance at social networking events is important, your fellow members will be much more comfortable referring a client or colleague to someone who has demonstrated exceptional competence though active committee work in furtherance of the League interests. For those who have not previously attended conventions, please come and experience what you have been missing. For those who do regularly attend but have not taken an active role with our Section, please come to the general membership meeting and see what the CRS is doing for the benefit of our members and the League, and join us as we continue to strengthen our organization.

Years ago, Aretha Franklin topped the music charts with a song entitled "Respect."  Respect is defined in the dictionary as "a feeling or attitude of admiration and deference toward somebody or something." Unfortunately, for more years than I care to admit, I have heard comments from League members indicating a lack of respect between various factions within the League. I, however, fail to see the divergence of interests that have led to this mistrust. For more years than any of us have been around, the CLLA has provided members of all its sections with the opportunity to make a living through service to the credit industry.  This opportunity is not limited solely to members of our Section, or to those of the Agency Section of the League, but to all of the League’s members. 

While I pledge to further the interests of the CRS over the coming year, I urge all members to keep in mind that neither we nor any other Section are an entity unto ourselves, striving only to further our individual interests to the detriment of others. We are, and always will be, only a Section of this thing, which is bigger than each of us (i.e., the Commercial Law League). 

My goal over the coming year is to engender a closer and more respectful relationship between our Section and the members of other Sections of the League, and to restore the respect among all members of the League, which engenders success for us all. 

I was recently surprised to learn that, other than the Executive Council meetings, the meetings of the CCAA are open to all League members. I was just as surprised to discover that many members of other Sections were unaware that our Section meetings (other than the Executive Council meeting) are open to all members of the League. As indicated in the famous line from the movie Cool Hand Luke, "What we’ve got here is a failure to communicate." I would encourage members of the CRS to attend meetings of the CCAA and vice-versa. Only through open and honest communication between the various constituencies of the League can we work toward our common goals.

I encourage each of you to make every effort to attend our annual meeting and show our appreciation to Jeff Rubin for his efforts over the past year. I look forward to seeing you all in New York!

Editor’s Note: Robert A. Bernstein, Esq., is a partner in the firm of Bernstein & Bernstein, P.A., in Charleston, S.C., where he practices in the areas of collections, creditors’ rights, corporations, bankruptcy and personal injury litigation.

Bylaw Amendment Alert

The following amendment to the CRS bylaws will be presented for a vote at the General Membership meeting on Saturday, November 12, 2005:

Bylaws
Commercial Law League of America
Creditors’ Rights Section
(As Amended and approved by the Board of Governors, November 17, 2002)

ARTICLE I

Name

The name of this Section shall be the Creditors' Rights Section (hereafter the "Section") of the Commercial Law League of America (hereafter the "League").

ARTICLE II

Purpose

The purposes of this Section are to promote the highest standards in the practice of law before the United States Courts and other courts; to further aid and better understand the practices of creditors' rights and commercial law; to conduct educational programs; to participate in the legislative and regulatory process; to disseminate information not only to members of the Section, but to others interested in creditors' rights and commercial law issues; to assist the League in establishing and maintaining standards for certification of creditors' rights attorneys; to promote and support the receipt of collection claims from agency/ attorney forwarders as the preferred method for obtaining collection claims; to cooperate with the Agency Section of the League in promotion of the League to members of the credit granting community and to formulate recommendations for the improvement of laws, regulations and procedures affecting creditors' rights, all in conformity with the Constitution, Bylaws, Operative Guides and Resolutions of the League and subject to the approval of the Board of Governors.

ARTICLE III

Membership

1. Any member of the League who (i) is a lawyer in the practice of law, (ii) a member of the bench, (iii) a professor or teacher of law or a law student enrolled in an American Bar Association accredited law school or a teacher of creditors’ rights, commercial, insolvency or business law in an undergraduate school or college or (iv) an editor of a law journal which deals with any aspect of creditors rights or commercial law, insolvency or business law in an undergraduate school or college, shall be eligible for membership in the Section.

2. Any member of the League who is (1) any non-attorney personnel employed as an office administrator, collector or paralegal assistant and engaged primarily in the collection of debts or in the area of bankruptcy, reorganization or insolvency matters in a League member’s law office or (2) the manager of the collection department of a League member’s law office, shall be eligible for associate membership in the Section. Associate members shall be entitled to all privileges and bound by all requirements of membership, except as specifically provided in these bylaws.

3. The Section, at its Executive Council meetings, on the advice of its Chairperson and/or on the recommendation of the Executive Council, may confer Honorary Membership on persons of distinction. Such membership carries with it all of the privileges of membership except the right to vote.

ARTICLE IV

Application for Membership

1. Every application for membership in the Section shall be filed with the Executive Vice President of the League until the Section designates a Secretary who shall then assume the responsibility of accepting applications for membership.

2. Each applicant shall state that the applicant is a member of the League eligible for either membership, associate membership or foreign associate membership in the Section

A. Each applicant shall state that the applicant, if approved, will be governed by the provisions of the Bylaws of the Section and any Section Code or Ethics and/or Section grievance procedure approved by the Board of Governors. Violation of such Bylaws, Code of Ethics and/or grievance procedure by a member, associate member or foreign associate member shall be punishable by expulsion from the Section upon two-thirds (2/3) vote of the Executive Council.
B. Any person whose membership in the League has been surrendered or terminated shall immediately be terminated as a member of this Section.

3. If the Executive Vice President of the League or the Secretary of the Section finds that an applicant for membership in the Section satisfies the qualifications stated above, the applicant shall be enrolled as a member, associate member or foreign associate member of the Section upon payment of the appropriate dues for the current year.

ARTICLE V

Dues

1. Each member, associate member and foreign associate member of this Section shall pay to the Section dues in the amounts to be set annually by the Executive Council for each category of membership. Such annual dues apply in addition to the regular dues of the League and shall be used to defray the expenses and accomplish the purposes of the Section.

2. Dues shall be payable in advance for a period of one (1) year.

3. If any member, associate member or foreign associate member (referred to as "member" for the purposes of the remaining provisions of this Article) fails to pay dues within ninety (90) days after the due date, the Executive Vice President of the League or the Secretary of the Section shall send a notice to the member's last known address stating that the membership shall automatically terminate unless the dues are paid in full within thirty (30) days. If the delinquent member fails to pay within thirty (30) days, the membership shall automatically terminate.

4. A delinquent member may apply to the Section for reinstatement and, upon payment of six-months past dues plus any dues required of new members of the applicable category, may be reinstated in the Section. The Executive Council, for any reason and for any time period, may waive the requirement for the payment of the six-months past dues.

ARTICLE VI

Officers and Executive Council

1. The officers of the Section shall be Chair, Chair-elect, Secretary, Treasurer, Section Representative on the Board of Governors and Immediate Past Chair. With the exception of the Immediate Past Chair, these officers shall be nominated and elected as provided in Article VI, Section 11, at each annual meeting of the Section, to hold office for the year beginning with the adjournment of the annual meeting at which they are elected and ending with the adjournment of the next annual meeting or thereafter until their successors have been duly elected and qualified.

2. The Chair shall preside at meetings of the Section and of the Executive Council of the Section, be present at the annual meeting of the League, present reports to the Board of Governors and performs such other duties that pertain to the office or which are assigned by the Board of Governors or the Executive Council.

3. Upon the death, resignation or disability of the Chair or upon the Chair’s refusal to serve, the Chair-elect shall perform the duties of the Chair for the remainder of the Chair’s term, except in the case of the Chair’s disability and then only during the length of the term in which the disability continues. The Chair-elect shall also perform the duties delegated by the Section Chair, the Board of Governors of the League, or the Executive Council of the Section. The Chair’s disability or refusal to serve shall be determined by a two-thirds vote of the Executive Council.

4. The Secretary shall be the custodian of all papers, documents and other properties of the Section not otherwise allocated. The Secretary shall keep a true record of the proceedings of all meetings of the Section and Executive Council and shall assist the Chair in preparation of the Section’s annual report.

5. The Treasurer shall be responsible for the maintenance of the financial records of the Section, including the records of all receipts and disbursements. The Treasurer shall cause all dues and other funds of the Section to be deposited in a bank approved by the Council and shall be responsible for approving or ratifying all bills incurred by the Section that have been approved for payment. The Treasurer shall transmit to the Chair a statement of all receipts and disbursements for the preceding month as soon as possible after the last day of each month. The Treasurer shall submit a written financial report at the annual meeting of the Section and at such other times as the Council shall direct. The Treasurer shall maintain the membership list of the Section and shall submit to the Secretary a list of any delinquent members and associate members.

6. There shall be an executive council composed of:  the Chair, Chair-elect, Secretary, Treasurer, all past Chairs of the Section, the Section’s representative on the Board of Governors of the League and twelve other members or associate members of the Section in good standing who shall be nominated and elected as provided for in Article VI, Section 11 herein. Each non-officers term shall be for three years; four council members shall be elected each year. All past Chairs of the Section with the exception of the immediate past chair and the Section’s representative on the Board of Governors of the League shall be honorary members of the Executive Council. Honorary members shall not vote and shall not be counted in computing a quorum.

7. Subject to action of the members, including associate members and foreign associate members, taken at annual meetings of the Section, the Council shall have supervision and control of the affairs of the Section, but only in accordance with the provisions of the Constitution of the League and the Bylaws of this Section. The Council may create and terminate committees. The Council shall authorize the expenditure of all monies of the Section as appropriated but it shall not authorize committees to enter into contracts involving the payment of money during any fiscal year in an amount exceeding the income of the Section for that year.

8. The Council shall meet concurrently with each meeting of the Section as set forth in Article VII, Section 1. The Council may hold additional special meetings if called by the Secretary upon written request of two Council members or upon call of the Section Chair or the highest ranking officer in the absence of the Chair.

9. Council members are expected to attend all meetings of the Council. Members with unexcused absences from two or more Council meetings within any one fiscal year shall automatically be removed from the Council. An absence is deemed unexcused unless the Section Chair receives, within thirty (30) days after the meeting, a request for the absence to be excused. The Section Secretary is responsible for notifying a Council member after a second absence that the member will be removed from the Council unless that member sends a request to the Chair for the absence to be excused. 

10. If there is a vacancy on the Executive Council or an Officer vacates his/her position, the Chair shall appoint a Section member to fill the vacancy for the duration of the term, subject to approval by a majority of the voting members of the Executive Council. 
11. A majority of the voting members of the Council shall constitute a quorum at any meeting. Binding action shall be by majority vote of the voting members present.  Between meetings, action of the Council shall be by a majority vote upon any matter presented by the Chair, such matter to be communicated in writing or through any electronic means available to all Council members. The Secretary shall submit to the Council in writing, in writing or through an appropriate electronic means designated by the Chair for such purpose, any resolution proposed by any member thereof in order to keep an accurate record of all proposed resolutions and resulting action of the Council and to keep the Council advised of such action.

12. The Chair shall inform the Council members of the means established for taking action.  All actions taken by the Council, together with any resolutions proposed but not acted upon, shall be included in the minutes of the Council meeting, which immediately follows such action or proposal.

13. No action by any officer, the Council or the Section shall be binding on the League unless approved by the Board of Governors.
14. No officer or member of the Board of Governors of the League shall serve concurrently as an officer or member of the Executive Council of the Section, except the Section’s Representative to the Board of Governors.

15. The immediate past chair of the Section shall serve for a one-year period as the Section’s representative on the Board of Governors. The term shall begin at the League’s annual meeting, immediately following the Section’s annual meeting at which the Immediate Past Chair leaves the office of Section Chair. If the Immediate past Chair of the Section at any time is unable or unwilling to serve then in that event the Executive Council of the Section shall by majority vote appoint a representative of the Section to the Board of Governors for the term or balance thereof.

ARTICLE VII

Elections

The officers and Council members shall be nominated and elected as follows:

1. Before May 31 of each year, the Chair shall appoint a Nominating Committee consisting of the Immediate Past Chair, should that office be occupied, one other Executive Council member who is not an officer, and three other non-Council members. None of the members of the Nominating Committee, with the exception of the Immediate Past Chair and the Council member named, shall be a holder of an elective office. None of the members of the Nominating Committee, including the Immediate Past Chair and Council member named, shall be candidate for elective office.

2. The Nominating Committee shall nominate one or more candidates for each of the positions of Chair, Chair-Elect, Secretary, Treasurer and Council Members as appropriate, to be elected at the subsequent annual meeting.  Nominated candidates for officer positions shall be current or former members of the Council.

A. Nominated candidates for officer positions shall be current or former members of the Executive Council
B. Nominated candidates for non-officer positions shall have been a member of the Section for at least one year prior to their nomination.

3. The Nominating Committee must submit the slate of candidates to the Council Chair no later than September 1 of each year. The Nominating Committee shall publicize its nominations prior to the Section’s annual meeting by publication in the Creditors’ Rights Section newsletter or an official publication of the Commercial Law League or in some other appropriate fashion authorized by the Executive Council.

A. Any member or associate member of the Section may present nominating petitions to the Nominating Committee for each office and Executive Council vacancy.  These nominating petitions must be signed by at least ten members of the Section and must be submitted to the Nominating Committee at least 45 days before the Section’s annual meeting.
B. Associate members shall be eligible for membership on the Executive Council but shall not be eligible to serve as officers of the Section.
C. No member or associate member shall be eligible to serve successive full terms as a member of the Executive Council.

4. In the event that elections cannot be held as contemplated in these Bylaws, upon a motion approved by two-thirds (2/3) of the Executive Council special elections may be held in the manner outlined herein.

A. Such special elections may be held a meeting called for that purpose, or a regularly scheduled meeting, to fill any vacancy of an officer position or on the Executive Council which would be created by the expiration of a term. 
B. The nominees for such vacancies will be those presented by the Nominating Committee as set forth in paragraphs 3; the Nominating Committee shall publish the slate of candidates not less than 20 days prior to the meeting in some appropriate fashion as directed by the Executive Council.

5. Elections for contested positions shall be held by secret ballot. In all cases, the candidate receiving a plurality of the votes shall be declared the winner. In elections for the Executive Council, the ballot shall provide that voters can cast a vote for "up to X" candidates (X being the number of positions to be filled) and ballots having fewer than X votes cast will be included in the count; the X candidates receiving the most votes shall be declared the winners.

6. For any position where there is only one candidate for the post, the Secretary is authorized to cast a single voice vote for each such candidate at the opening of the meeting. Officers and Council Members elected in this fashion will serve for such term as if the election has been held as regularly scheduled.

Article VIII

Regional, Annual and Special Meetings

1. The Section shall convene at the Eastern District and Midwestern District regional meetings of the League. The annual meeting of the Section for the purpose of electing officers and Council members shall be held in conjunction with the Eastern District meeting.

2. Special meetings of the Section shall be called by the Chair upon the written request of three (3) members of the Council. 

3. Only such business as shall be stated in the call and subjects germane thereto shall be considered at special meetings.

4. All calls for meetings, stated or special, shall be transmitted to the members at least twenty (20) days before the time fixed for such meetings, and shall briefly state the purposes of the meeting.

5. At all meetings the voting shall be by voice vote unless twelve (12) members in attendance at the meeting file a written request with the presiding officer for a written ballot.

6. Twelve (12) members shall constitute a quorum at any meeting of the Section.

7. Robert's Rules of Order--Newly Revised shall govern in all questions of order and parliamentary procedure not covered by these Bylaws.

8. A copy of the minutes of all meetings shall be mailed to the officers and members of the Council and be made available for review by all members of the Section.

ARTICLE IX

Committees

1.  The Section Chair shall appoint such committees, committee chairs, and committee members as the Chair deems necessary to serve during the term or remaining portion of the term for which the  Section Chair was elected, and to continue until their respective successors are appointed. Appointed committees, committee chairs, and committee members will perform duties as prescribed by the Section Chair subject to the limitations of the Bylaws of the Section, and the Constitution and Bylaws of the League. The Section Chair will announce the appointments to the Secretary of the Section.

2.  All committees may act officially either in conference or by correspondence. A majority of the committee shall be required to be in attendance or to participate in such correspondence in order to constitute a quorum and to have any report considered official.

3.  No committee shall incur any liability or bind the Section without authorization by the Council. No committee shall incur any liability or bind the League without authorization of the Council and the Board of Governors of the League.

4. All committees shall report annually in writing to the Chair.

ARTICLE X

Miscellaneous Provisions

1. The fiscal year of the Section shall be June 1 through May 31, subject to change by the Executive Council of the Section without amendment of these Bylaws.

2. No salary or compensation shall be paid to any officer, member of the Executive Council, member of any committee or general member of the Section for such service.

3. The Secretary of the Section shall receive reimbursement for expenses and an allowance for secretarial services in order to perform the functions of that office.

4. No action of the Section may become effective as the action of the League until it is approved by the Board of Governors of the League. On request of the Section or the Executive Council, any resolution adopted or action taken by the Section may be reported by the Section Chair to the Board of Governors of the League for consideration and action by the Board of Governors of the League.

5. The Section shall conduct itself in accordance with those rules and regulations prescribed by the League.

6. The Section shall be authorized to retain an Executive Director/Secretary, and all salary and expenses for said person shall be in the responsibility of the Section without assistance from League. This provision shall not preclude the Section from engaging the services of the League staff personnel on terms acceptable to the League and the Section.

7. Nothing here shall be construed as requiring any Section member to take or refrain from taking any action that may constitute a violation of the Section member's state bar association code of ethics or any applicable state or federal statute, rule or regulation.

ARTICLE XI

Amendments

1. These Bylaws may be amended at any meeting of the Section called for that purpose. Any such amendment must be consistent with the Constitution of the League and approved by a two-thirds (2/3) vote of the members and associate members of the Section present and voting, provided that a quorum is present at the meeting.

2. Written notice of any proposed amendment shall be given to all members of the Section at least twenty (20) days prior to the date of the meeting. The requirement of notice may be waived by a two-thirds (2/3) vote of the members and associate members of the Section present and voting at the meeting, provided a quorum is present at the meeting at which such vote occurs.

3. No amendment so adopted shall become effective until approved by the Board of Governors of the League.

Marketing Tips From "The Lady In Red"

By Jacqueline N. Anker, Esq.

The powers that be have asked me to write an article regarding marketing tech-niques for members of the CLLA. I feel extremely flattered because although I, Jacqueline N. Anker, commercial collection attorney extraordinaire, have some rather unique and comical marketing techniques, I don’t think they really qualify me as some "expert" in the field. Be that as it may, I offer my experiences and insights for whatever they may be worth to the reader.

After several years of employment for law firms, I decided to take the big dive into the commercial collection abyss and strike out on my own. Jacqueline N. Anker, commercial collection attorney extraordinaire, now solo practitioner!  The first thing that came to mind, after I rose back to the surface, gasping for air, was that I must, of course, advertise. Simple! Get listed with some of the well-known commercial collection Law Lists. Next, I had to get out my handy dandy Rolodex filled with everyone I had ever come into contact with in the last 10 years of my legal career (and then some). I view my Rolodex as containing 100 percent of my potential clientele. No one is exempt. I did not allow myself to think "oh so and so doesn’t need an announcement" because each and every person DID need to know that I had opened for business, whether they could use me, or knew someone that could use me. So, out went announcements to everyone and anyone I knew, met, and had a business dealing with. Simple. 

Next, I made calls to everyone to ensure they received my announcement and knew I had opened. I wrote to potential agencies that I hadn’t dealt with and other potential clients, and then followed up with phone calls. I cannot say enough about follow-up phone calls. As Nike says, "just do it."  Enough said. I further kept track of my letters and calls by dating my lists so that I knew when I had talked, whom I spoke with, what was discussed and when I could harass, I mean, market to them again. Business started to trickle in. 

The next important element is the usage of time. As a newbie to the solo practice, I still had time to focus on marketing. My theory is that as long as I have time, I haven’t marketed myself enough. I must do everything and anything to get the word out. Not only that, but I have to conclude that others like me (or are they really like me?) are doing the exact same thing—letters, advertisements, brochures, and calls. How many times have we heard the same complaint from agencies about the number of calls and letters they get from attorneys? They get a lot, and it is overwhelming and it can get to the point where they just go into automatic mode and toss everything into the trash. That is NOT where you want your name to be! 

So, not wanting to end up in the trash pile, what can you do to stay out of it and on the tip of the client’s tongue? I suddenly remembered that famous song from "Gypsy," "Ya gotta have a gimmick." Yes, you have to have a gimmick, if you want to get ahead. Strip-tease was quickly ruled out. One thing I pride myself on is having a sense of humor. I think we all have a varying degree of this. So while out and about shopping for supplies for my new business I came across some tiny little Post-Its with a $100 bill imprinted. These things are about .5" x 1.5." They were relatively cheap ($3.95 for 120), so I bought a few thinking I’d be this silly, clever attorney at the Eastern District meeting of the CLLA after I opened my office. I had assumed it would not be much of a "gimmick," which was my first mistake. DO NOT ASSUME anything is not worthy of helping your marketing efforts. Anything goes, and anything helps. This tiny $100 was enough to make me stick out from the other 1,000 attorneys in the room. We have all known the situation where the attorneys (blue dots) are scrambling for time to get with the collection agencies (red dots), and the many devices the red dots use to hide from the blue dots. Well, let me tell you, my tiny little gimmick had the red dots coming to me aksing, "Are you the attorney with the money?" It was fun, it broke the ice, and they learned who I was. I did not end up in the trash heap! I met a lot of agencies with very little effort and very little cost. What I remember most is an attorney coming to me, when I was taking a bit of a break, and saying, "Jacki, you can’t kick back, you have to get out there and mingle with the red dots." As he finished his statement, two red dots came up to me again with, "Are you the attorney with the money?"

Not wanting to rest on my laurels, that led to other gimmicks. At every future meeting I attended, people came up to me and said "Hey Jacki, what’s the deal this year?" And usually I had something new, from the money pencils to the money hackie sacks to the now infamous "Lawyer from Hell" cards and finally my recent gimmick, the Million Dollar Bill advertisement. Good luck and happy marketing.

Editor’s Note: Jacqueline N. Anker, Esq., commercial collection attorney extraordinaire, operates her solo practice in Santa Barbara, Calif. Check out her above referenced million dollar bill advertisement at her Web site, www.ankerlaw.com, under collection jokes.

A Review Of Restatement (second) Of Contracts, Section 90

Another Count For A Complaint

By Joseph A. Maker, Esq. 1

The concept of reliance, for instance a person relying on a statement made by another, is an essential element for causes of action in tort, such as fraudulent misrepresentation and negligent mis-representation. There is also a reliance theory of contract, which is contained in Section 90 of the Restatement (Second) of Contracts. The doctrine is also known as promissory estoppel. Section 90 (1) states that, "A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires." This article reviews some cases applying the doctrine of promissory estoppel in commercial transactions. 

Connecticut, among other states, has incorporated Section 90 into its jurisprudence. "Our Supreme Court ‘has recognized … the development of liability in contract for action induced by reliance upon a promise, despite the absence of common-law consideration normally required to bind a promisor; see Restatement (Second), Contracts Section 90 (1973)…." Benedetto v. Wanat, 79 Conn. 139, 151 (2003)(other citations omitted). The Benedetto case presents a convoluted fact pattern in commercial dealings. A distilled version is thus: The plaintiff’s father was the real party in interest, who engaged in negotiations for opening a restaurant. A commercial landowner represented to the plaintiff’s father that he could have the subject property ready to open for business by April 1, 1998, whereupon the daughter, the plaintiff, entered into a commercial lease that contained a provision for a nonrefundable deposit of $100,000.00. For several reasons, construction of the building for the restaurant was delayed, and did not commence by April 1, 1998; making the father anxious about finding another location. But he and the plaintiff stood to lose the $100,000. The commercial landlord assured the plaintiff and her father that if a replacement tenant was found on the same terms, then the plaintiff could terminate and receive return of the $100,000.  

Subsequently, the landlord informed the plaintiff and her father that a replacement tenant was found who would lease the premises on the same terms, and that the $100,000 deposit would be refunded. The plaintiff allowed the premises to be re-let. However, after the new lease was executed, the defendant landlord refused to refund the deposit money to the plaintiff; claiming that costs increased, and that the new lease was not the same as plaintiff’s, by virtue of reduced rent and a reduced deposit. 

The court enforced the oral promise to refund the $100,000 deposit on the grounds of promissory estoppel and that the promise was supported by consideration. Citing Section 90 of the Restatement, the Appellate Court affirmed the trial court’s finding that the plaintiff and her father " ‘obviously relied’ on the statements of the defendant that a replacement tenant had been found and that the $100,000 deposit would be returned. Furthermore, the plaintiff and [her father] changed their position by allowing the re-leasing of the property to proceed." Benedetto, 79 Conn. App. at 151.  

Notable examples of the application of Section 90 appear in two cases of brokers’ claims to collect commissions. In Turnpike Motors, Inc. v. Newbury Group, Inc., 413 Mass. 119 (1992), Section 90 clashed with a Massachusetts real estate licensing statute. A seller of two automobile dealerships filed an action seeking a declaratory judgment that a Massachusetts real estate licensing statute barred the defendant broker from recovering a commission. In negotiations with the seller over a brokerage agreement, the broker’s salesman (Hackett) informed the seller that he and his company were not licensed real estate brokers. The seller’s representative advised the broker that a realtor’s license was unnecessary, because the "transaction would be structured as a sale of stock of a corporation, rather than real estate." Turnpike, 413 Mass. at 123. The dealerships’ assets included real estate.  

The broker procured buyers for the automobile dealerships. The contracts contained a provision stating that the seller would pay the broker’s commission. However, the seller refused to pay the broker a commission, claiming that he was not a licensed real estate broker under Massachusetts law (Mass.G.L. c. 112, Section 87RR). On direct appeal, the Supreme Judicial Court held that the broker’s reliance on the seller’s representation that the sale was for corporate stock estopped the plaintiff seller from invoking the licensing statute. The Court held that the broker was entitled to a commission on his counterclaim and ordered a new trial.2 
In applying the doctrine of promissory estoppel, the Supreme Judicial Court identified as essential factors: "(1) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made. (2) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made. (3) Detriment to such person as a consequence of the act or omission. Turnpike, 413 Mass. at 123 (other citations omitted). Additionally, the reliance of the party claiming estoppel must be reasonable. Turnpike, 413 Mass. at 125. 

The Supreme Judicial Court of Maine applied Section 90 in another brokerage commission case, stating that "[p]romissory estoppel applies to promises that are ‘otherwise unenforceable.’" Daigle Commercial Group, Inc. v. St. Laurent, 1999 ME 107, 734 A.2d 667, 672, (1999)(other citations omitted). Justice extended beyond the expiration of the parties’ written real estate listing agreement, to ensure recovery of a commission, because the defendant seller continued to promise to pay the plaintiff realtor and to protect his commission, if the realtor would continue efforts to sell defendant’s commercial property. The term of the exclusive listing agreement expired on March 14, 1996. As the term was about to expire, the plaintiff sought to renew the listing agreement, but the defendant refused, because he wanted to "keep his options open"; but nevertheless the defendant asked plaintiff to keep working and assured plaintiff that he would be paid if he procured a buyer. Daigle, 734 A.2d at 670. Subsequently (after the expiration of the original exclusive listing agreement) the plaintiff had discussions with, and provided information to, a prospective buyer that eventually purchased the property; but after the sale, the defendant refused to pay plaintiff a commission. 

The trial court entered judgment for the realtor, finding that by its continued promises, the defendant "reasonably expected that [plaintiff] would continue his efforts" to sell the property and plaintiff did so; therefore, defendant’s promise to pay "should be enforced." Daigle, 734 A.2d at 672. The Supreme Judicial Court rejected the defendant’s argument that any extension of the listing agreement was required by statute, 32 M.R.S.A. Section 13177, to be in writing. The Court ruled that the listing agreement was an open or nonexclusive listing of commercial property that did not fall within the statute. In affirming the award of $75,000.00 in expectation damages, the Court stated that, "A promise binding under [promissory estoppel] is a contract, and full scale enforcement by normal remedies is often appropriate." Daigle 734 A.2d at 674-675, citing Restatement (Second) Contracts, Section 90, cmt. d. (1981). 

Rather than begin with history, I choose to end this article on an historical note. Comment a. of Section 90 states that, "It is fairly arguable that the enforcement of informal contracts in the action of assumpsit rested historically on justifiable reliance on a promise." I happened upon an old English case, which, while involving a written agreement, rather than an informal contract, is noteworthy as an antecedent to the policies underlying Section 90 and the doctrine of promissory estoppel. In Moses v. Macferlan, 2 Burrows 1005 (1760), the Court of King’s Bench set justice aright in an unfortunate case of one person trusting upon the promises of another. Mr. Moses had promissory notes in his favor for 30s. each. The report does not give a full explanation why, but Mr. Moses indorsed the notes to Mr. Macferlan, to collect from the maker thereof in his own name. Concurrent with the indorsement, Mr. Macferlan promised Mr. Moses that he would not seek collection of the notes against Mr. Moses as indorser, and memorialized such promise in a written agreement of indemnity.  

Nevertheless, Mr. Macferlan, apparently unsuccessful in collecting from the maker of the notes, brought an action against Mr. Moses, on the indorsements contained in the four notes, in an inferior court, known as the Court of Conscience.3 The defendant, Mr. Moses, asserted the indemnity agreement as his defense; but the Court of Conscience rejected the defense and refused to admit any evidence of such an agreement, ruling that it was not within its jurisdiction. Judgment entered against the defendant "upon the mere foot of his indorsement." Moses v. Macferlan, 2 Burrows at 1006. 

Fortunately for Mr. Moses, who was the plaintiff in the case before the Court of King’s Bench, a jury found in his favor. A procedural question was reserved for the Court, as to the proper form of action. 4 But for this article, it is essential to turn to Lord Mansfield’s opinion, holding that, "If the defendant be under an obligation, from the ties of natural justice, to refund; the law implies a debt and gives this action, founded in the equity of the plaintiff’s case, as it were upon a contract ("quasi ex contractu") as the Roman law expresses it." Moses v. Macferlan, 2 Burrows at 1008 (parenthesis supplied). Lord Mansfield ruled that the defendant was "obliged by the ties of natural justice and equity to refund the money." Id. at 1012. 

The doctrine of promissory estoppel may provide a theory of liability when there are stumbling blocks to proving formation of a bilateral contract, under traditional principles of offer and acceptance, mutual promises, and bargained-for consideration, and when a cause of action in tort is otherwise lacking. When confronted with complex fact patterns, creditor’s counsel should consider pleading a count in promissory estoppel, with Section 90 of the Restatement (Second) of Contracts as a guide.

1 Of the Connecticut Bar and the Massachusetts Bar.
2 Justice O’Connor, in a blistering dissent, expressed his displeasure that an unlicensed broker would recover commissions in a transaction involving the sale of real estate: "The court orders the entry of judgment for the broker in accordance with the verdict. Thus, Newbury Group, Inc., realizes several hundreds of thousands of dollars in return for illegally brokering transactions involving real estate and for illegally affiliating with an unlicensed real estate salesman, and Hackett is similarly compensated for illegally acting as an unlicensed real estate salesman. The court orders all this in the name of equity (which apparently is no respecter of the law). Strange-the law!" Turnpike, 413 Mass. at 144, n.2.
3 A rather interesting name for a court in which to bring an action, under circumstances which may offend some as the act of a scoundrel.
4 The Court of King’s Bench opined that this was not an action claiming the inferior court was wrong in its judgment, for the Court held that the inferior court was correct in not considering the indemnity agreement on grounds of jurisdiction and it was correct in its ruling on the indorsement; but, rather, that the defendant "ought not in JUSTICE KEEP THE MONEY." Moses v. Macferlan, 2 Burrows at 1009 (emphasis supplied).

Editor's Note: Joseph A. Maker, Esquire, a sole practitioner,practices in Stamford, CT, specializing in the areas of civil litigation, creditors' rights and professional liability defense litigation.  He is admitted to both the bars of Connecticut and Massachusetts

Spotlight on the Winner of the Free Press Second Annual Best Feature Article Award - Joseph A. Maker, Esq.

Interview By Nicholas D. Krawec, Esq.

Full Name: Joseph A. Maker

  • Residence/Hometown: Darien, Conn./Stamford, Conn.
  • Education: 1988, B.A. from University of Connecticut; 1991, J.D. from University of Bridgeport School of Law.
  • Work History: Miller & Rosnick, P.C., Bridgeport, Conn. (1990–1992, law clerk during law school and associate); Charmoy & Nugent, Bridgeport, Conn. (1992–1995,  associate), Hume & Associates, Stamford, Conn.(1995–1999,  associate) Joseph A. Maker, Attorney at Law (proprietor, November 15, 1999–present).
  • Family: I’m the youngest of three children.  
  • Areas of practice and specialties: Civil litigation, creditors’ rights and professional liability defense litigation.

What year did you join the CLLA? 1998.

What offices or committee chairmanships have you held in the CLLA? None.

Tell us about your home life away from the office:  I read a lot, mainly historical topics, and like to get outdoors. My family loves to cook, so there is always a cookout or a big dinner to go to, which is to be grateful for. Then there are days when I just like to sit outside on the deck, barbeque shrimp, and read a newspaper. In the fall and winter, I like to be near my fireplace.

You are the second recipient of the Free Press Annual Best Feature Article award. What was your reaction when you were informed that the Free Press judges selected your article "Successor Liability: A Case for Further Digging" as the winner?  Wow! Are you sure? I still like the John Adams article.

Have you written other articles besides the writing you have done for CLLA, and if so, for which publications have you written? I submitted two post-judgment forms together with commentary notes on the forms, which were recently published in the 2005 update of J. Kaye and W. Effron, Connecticut Practice Series Civil Practice Forms (4th Edition) Volume 2.

Have you received other recognition for the writing you have done? No, this is the first one.

What would your advice be to other League members who may be thinking of submitting an article to the Free Press for consideration for the Best Feature Article Award?  Go for it. Work may be very busy, but put time and research into an article. Write about something that interests you, as opposed to whipping something up quickly; you will produce a better piece. Remember, the newsletter is going out to a large group of your peers, so you want to do a good job.

When you’re not practicing law, or tending to League matters, what do you do for fun and relaxation? Spend time with family and friends, play bass guitar (although that is slowing down now),  play in a summer softball league, travel around New England, go to the beach, and get outside to smell the roses once in a while.

If you did not become a lawyer, what do you think would have become your life’s work? Writing and teaching history, particularly about 18th Century America.

What is your favorite quote or words to live by? "Life is what you make it." This was stated by my mom in her high school yearbook.

Did you have any role models when you were growing up and in your career in practicing law? If so, who are they and why were they your role models? Growing up, my father and grandfather were my role models because they instilled the values of working hard, getting a good education and doing the right things. As for teachers, Mr. Edward Kovacs (high school) and Professor Joel Blatt (college) were good role models. Both had a passion for history and for teaching. Professor Blatt spoke of rights and liberties during lectures with great intensity.  Mr. Kovacs had a great sense of humor and not only taught history extremely well, but he also lived it, having served in the Army in Europe during World War II.  In my legal career, my mentor was Sigmund L. Miller, Esq. (1912-1994). He was a great, tenacious lawyer.  He was extremely thorough and believed in writing as many drafts as needed to get a pleading the way he wanted it—just right. I worked on my first appellate brief with him and learned valuable lessons in brief writing. I’ll always remember sitting in his office, reviewing a draft, and he would analyze every sentence very carefully, read line by line, and ask, "Why do we need this in here?" "Why is this important to our case?"  If he liked the answer, the sentence would stay in. For me, he will always be the standard of excellence.

If you could have dinner with one famous person in history, and one famous person alive today, who would they be, and why? Benjamin Franklin because he would have amazing stories to tell.  Jennifer Aniston… need I say more?

What is your favorite…
Car: 1967 Camaro Super Sport
Food: Italian
Vacation spot: Positano
Actress/Actor: Jennifer Aniston/James Stewart
Movie: "Casablanca"
Holiday: Thanksgiving
Musical group/Singer: The Who
Book: Tale of Two Cities
Author: Charles Dickens                               
Sports figure: Alan Page, NFL MVP defensive tackle, Minnesota Vikings. (No, I’m not from Minnesota. He was simply the best all around defensive player in the game.)

Editor’s Note:  Joseph A. Maker’s winning article, "Successor Liability: A Case for Further Digging," appeared in the spring 2005 edition of the Free Press. The other articles submitted for consideration for the Best Feature Article Award were "E-Filing: Ready or Not Here it Comes (Is)" by Louis A. LeLaurin, III, Esq., which appeared in the fall 2004 edition, and "Avoiding Pitfalls in Handling Mechanic’s Lien Actions" by Robert A. Bernstein, Esq., which appeared in the spring 2005 edition. The editorial staff thanks all three authors for their submissions, and also extends sincere thanks to the judges who volunteered to review and vote on the articles— Anthony Picheca, Esq., Jay Scheinfield, Esq., and Richard Roosen, Esq.

Disposal Rule In Effect

June 1, 2005

By Brenda A. Majewski

The Fair and Accurate Credit Transactions Act of 2003 ("FACT Act" or "Act") requires the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration, Securities and Exchange Commission and Federal Trade Commission, in coordination with one another, to adopt consistent and comparable rules regarding the proper disposal of consumer report information and records.


The Federal Trade Commission issued the Disposal Rule, which went into effect June 1, 2005. The Rule governs personal information about employees as well as consumer information in your possession. Consumer information is defined as "any record about an individual, whether in paper, electronic or other form, that is a consumer report or is derived from a consumer report."  This definition includes a compilation of such records, but "it does not include information that does not identify individuals, such as aggregate information or blind data."  The Disposal Rule, which tracks the language of section 216 of the FACT Act, applies to "any person that, for a business purpose, maintains or otherwise possesses consumer information, or any compilation of consumer information."  The entities covered by the Rule would include consumer reporting agencies, resellers of consumer reports, lenders, insurers, employers, landlords, government agencies, mortgage brokers, automobile dealers, waste disposal companies and any other business that possesses or maintains consumer information.  

We can assume that law firms handling consumer litigation are "any other business" as stated above, and have in their possession documentation that must be properly destroyed when matters conclude.

While the rule does not mandate any particular method to dispose of the records, it states we must dispose of such information "by taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal." The guideline includes examples of what it determines to be reasonable disposal measures.   They include implementing compliance policies and procedures and educating employees on your firm’s practices on disposal procedures. Examples also indicate "shredding or burning paper records containing consumer information will generally be appropriate. Depending on the volume of records at issue and the office equipment available to the small entity, this method of disposal may: be accomplished by the small entity itself at no cost; require the purchase of a paper shredder (available at office supply stores for as little as $25); or require the hiring of a document disposal service on a periodic basis."  On destroying electronic hardware that may have data on it, the guidelines state, "disposal of such media could be accomplished by a small entity at almost no cost by simply smashing the material with a hammer. In some cases, overwriting or ‘wiping’ the data prior to disposal might also accomplish appropriate disposal of electronic media.  Utilities to accomplish such wiping are widely available for less than $25. Some such tools are even available for download on the Internet at no cost. Whether ‘wiping,’ as opposed to destruction, of electronic media is reasonable, as well as the adequacy of particular utilities to accomplish that ‘wiping,’ will depend on the circumstances."

On prospective employees, guidelines indicate, "a consumer who applies for a loan from a financial institution, but is rejected based on information in her credit report is not a ‘customer’ of the financial institution under the GLBA, and her credit report would therefore not be protected by the Safeguards Rule. However, her credit report would be ‘consumer information’ under the Disposal Rule. Credit reports obtained about employees or prospective employees are also not ‘customer’ information covered under the GLBA, but would be ‘consumer information’ under the Disposal Rule."

The Disposal Rule does not set any time frame for maintaining or destroying documents.  Now is past the time to review what your firm is doing to maintain control over the confidentiality and destruction of consumer records in your possession. Failure to meet the Rule could result in liability exposure for rules violations and damage owed to aggrieved consumers.

The FTC Disposal Rule is available here.

Editor’s Note:  Compiled from the Disposal Rule by Brenda Majewski, administrator, Kohn Law Firm, Milwaukee, Wis. She chairs the Office Management and Economics Committee of the League and is a co-editor of the Free Press.

Letter To The Editors

Dear Editors:

I have had such nice feedback on my article "In A Perfect World," which appeared in the summer 2005 edition of the Free Press. Thank you for asking and encouraging me to write it. It has been a long time since I have written for a publication or other than for my own enjoyment, poetry, etc. I am also pleased that your Section’s newsletter includes articles from representatives of the Law Lists, providing their viewpoints. The Lists play an important role in the Triadic System for both agencies and attorneys. In addition, I have received requests to reprint the article on other Web sites, including the biographical information.

Vicki DeJonge
Voss Michaels Lee & Associates
Holland, Mich.

A View From the List: Listen Up

By Gary Tier

During my three years at Forwarders List, I have become increasingly interested in organizational leadership. As I learned about the topic, I realized how it could help me listen more effectively to our customers—an essential skill for success in servicing our clients.

I recently attended a leadership seminar in nearby Princeton, to sharpen my skills because I realize that no matter how successful we are in the workplace, it is always worthwhile to improve our communication skills. That’s why I found the discussion dealing with listening to be most useful. No matter what role we play in the collection industry, it is vital that we not only hear what our customers say, but most importantly, that we understand what they mean in order to respond with timely, accurate information.
Hearing is only a physiological process, but listening is much more than that. It says a lot about commitment, interest, discipline and concern for the person we are interacting with.

So much of our business is done via telephone, e-mail and fax that nonverbal communication is basically taken out of the equation. Without seeing the posture, facial expressions and gestures of the person we are talking to, we are left to rely almost entirely on tone, how something is said and voice inflection to get a full understanding of what we are supposed to get from the conversation. Our "cues" are limited in this type of technology-assisted communication.

This can be challenging, can often lead to a miscommunication, and can often end up costing money and time—to our clients and our company alike.

While we are all under pressure to get as much work done as quickly as possible, it is imperative that we remember to take the time to really listen to what our customers have to say.  At Forwarders List, we not only "hear" what you are saying, we are tuned into your needs, and will respond with solutions to help you grow your business.

Call us, visit our Web site, send an e-mail, fax or leave a voice mail. We’re here and we’re listening.

Editor’s Note:  Gary Tier is Client Services Manager at the Forwarders List of Attorneys and a member of The Commercial Law League of America and The International Association of Commercial Collectors, Inc. Gary can be reached at 609/371-7860 and at gtier@forwarderslist.com.

Award of Excellence

Nomination Form

Although the nomination deadline has passed for nominations for the 2006 Award of Excellence which will be presented at the April, 2006, Midwestern Meeting in Chicago, it is not too early to begin thinking about nominees for the CRS Award of Excellence for 2007.
The Creditors’ Rights Section of the Commercial Law League of America is seeking nominations for its Award of Excellence, which was established to recognize outstanding contributions in the field of law affecting creditors’ rights. The recipient must be a lawyer, legislator, professor of law, or judge, whose work has substantially and positively made an impact on creditors’ rights. Nominations are being accepted through July 1, 2006, and should be submitted to the CLLA, including an explanation of those qualities and works which qualify the nominee for consideration. The Award will be presented at the annual Midwestern Meeting of the League held in Chicago in April 2007.  

The Commercial Law League of America is the nation’s oldest organization of attorneys and other experts engaged in the field of commercial law, bankruptcy and reorganization. The League’s objectives include elevating the standard and improving the practice of Commercial Law; encouraging an honorable course of dealing among its members and in the profession at large; and promoting uniformity of legislation in matters affecting Commercial Law. The Creditors’ Rights Section shares in these objectives, and strives to promote the highest standards of professionalism, integrity and excellence in the field of creditors’ rights while advancing the interests of creditors. Candidates for the Award of Excellence should have made substantial career contributions to further these goals.  

Please return nominations to:


The Commercial Law League of America
70 East Lake Street, Suite 630
Chicago, Illinois 60601

or by fax (312) 781-2010 

Deadline for nominations to be received by the CLLA: July 1, 2006

 

CRS Award of Excellence Nomination 

Name of Nominee:

 

 

Address:

 

 

Phone:

 

 

Fax:

 

Nominated By:

 

 

Address:

 

 

Phone:

 

 

Fax:

 


Explanation of contributions and qualities which support your nomination (attach additional pages as necessary):




Calendar of 2005-2006 Events

November 10-13
85th New York Meeting
Sheraton New York
Hotel & Towers
New York, NY
Sponsored by the Eastern Region

April 27-30, 2006
76th Chicago Meeting
Westin Hotel, Chicago, IL
Sponsored by the Midwest Region

May 26-29, 2006
58th New England Meeting
Sheraton Hotel, Portsmount, NH
Sponsored by the New England Region.

CLLA National Convention

Toronto, Canada

New CLLA President Jerry Myers

Gary Weiner, Dave Watson & Mary Whitmer working hard at National Convention

Mr. and Mrs. Fred Luper

George Eliades and Adrienne George-Eliades

Bob Levy

Ian Bardin

Photographer Paul Jaessing & guests

Education Meeting

The Free Press would like to thank Paul Jaessing, Jaessing & Conklin, S.C., Waukesha, WI for the CLLA National Convention pictures in this issue.

 

 

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