Hitting Back at The Record Companies

I admit the music downloading cases are not part of my practice but they are so interesting that I cannot ignore them either. (See my earlier posts here and here and here for examples.) lexisONE(R) supplied

Law Professor Fires Back At Song-Swapping Lawsuits:

A Harvard Law School professor has launched a constitutional assault against a federal copyright law at the heart of the industry's aggressive strategy, which has wrung payments from thousands of song-swappers since 2003.

The professor, Charles Nesson, has come to the defense of a Boston University graduate student targeted in one of the music industry's lawsuits. By taking on the case, Nesson hopes to challenge the basis for the suit, and all others like it.

Nesson argues that the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999 is unconstitutional because it effectively lets a private group the Recording Industry Association of America, or RIAA carry out civil enforcement of a criminal law. He also says the music industry group abused the legal process by brandishing the prospects of lengthy and costly lawsuits in an effort to intimidate people into settling cases out of court.

***

Entertainment attorney Jay Cooper, who specializes in music and
copyright issues at Los Angeles-based Greenberg Traurig, is convinced that Nesson will not persuade the federal court to strike down the copyright law. He said the statutory damages it awards enable recording companies to get compensation in cases where it is difficult to prove actual damages.

The record companies have echoed that line of defense. In court
filings in Tenenbaum's case, they contend that the damages allowed by the law are "intended not only to compensate the copyright owner, but also to punish the infringer (and) deter other potential infringers."

But are these lawsuits the only way the record industry could
deter piracy? Nesson believes the industry could develop new ways to prevent copyright material from being shared illegally. One idea would be to bundle music with ads and post it for free online, he says.

"There are alternative ways," he said, "of packaging entertainment to return revenue to artists.

Do I think it will be successful? No. But we can be thankful for law school professors who do not need to worry about the costs of litigation for bringing these kind of cases.

Personally, the music industry bewilders me with these kind of law suits. They are in the right on the technicalities of the law but I feel that they may be winning battles while losing the war. Customers will get turned off by the big companies and the companies will lose money. The performers and their customers will find another means of getting what they want which will cut out the companies. There also exists the chance that enough customers will get annoyed enough that Congress will change the copyright law.

Indiana Home Improvement Fraud: Give Notice or Hope to Prove Actual Fraud

The Court of Appeals makes clear that under Indiana's home improvement fraud statute the homeowner can lose their case even before they know they have a case. Pay close attention to this from Hayes v. Chapman (PDF format):

HICA explicitly provides that a supplier’s failure to provide a written contract is a deceptive act and brings that deceptive act under the purview of the remedies and penalties of Indiana Code chapter 24-5-0.5. I.C. § 24-5-11-14. But to establish entitlement to those remedies, the consumer must show that the deceptive act was either uncured—meaning that notice was given and the deceptive act was not cured—or incurable—meaning that the supplier acted with an intent to defraud or mislead the consumer. I.C. § 24-5-0.5-4(a).

This means if the contract is defective and the homeowner does not give the proper notice, then the homeowner has no case against the contractor.

I worry that the statute creates a laxness for contractors who may face an unnecessary lawsuit.

Contractors need to get to their lawyers for a contract that complies with the HICA and homeowners need to a lawyer to review their home improvement contracts.

Home Improvement Fraud: Gaston man arrested

I saw Gaston man arrested for home improvement fraud in the The Muncie Star Press and had to pass this along:

"UNION CITY — A Gaston man has been arrested on home-improvement-fraud charges — again.
Advertisement

John Henry Stanley, 28, was arrested by Union City police last week after a senior citizen in the 900 block of West Division Street reported three men had offered to clean her gutters for $10 — then asked for up to $200 to repair damage they claimed to have found on her roof."

***
Authorities said they determined Stanley did not have a vendor’s permit or contractor’s license to do home repair work in Randolph County, and also had no driver’s license.

***
Stanley was sentenced to six years in prison by Delaware Circuit Court 2 Judge Richard Dailey in 1999 after he was convicted of home improvement fraud. In that case, a 81-year-old Delaware County man who was legally blind paid Stanley and a co-defendant $5,600 for work that was never done.

The criminal statute is here. The civil statute is here.

Consumers and contractors both need to be aware of these statutes.

Indiana Business Opportunity Transactions Act

For those buying or leasing goods from another to start a business, take a look at Indiana's Business Opportunity Transactions Act. The statute came to my attention when I found online a complaint filed by Indiana's Attorney General. The complaint is to be found here.

I have taken the liberty of quoting the most pertinent parts of the definition for "Business opportunity":

(1) involves the sale or lease or offer to sell or lease any goods or services to an investor that are to be used by the investor in beginning or operating a business;
(2) involves an initial payment by the investor of more than five hundred dollars ($500) and an initial cash payment of less than fifty thousand dollars ($50,000); and
(3) involves a solicitation of investors in which the seller represents that:

(A) the investor may or will earn an amount in excess of the initial payment as a result of the investment;
(B) a market exists for any goods to be made or services to be rendered by the investor;
(C) the seller may buy from the investor any goods to be made or services to be rendered by the investor;
(D) the seller or a person referred by the seller to the investor may or will sell, lease, or distribute the goods made or services rendered by the investor; or
(E) the seller may or will pay to the investor the difference between the initial payment and the investor's earnings from the investment.

Businesses can face felony charges, a civil suit, an action by the Attorney General or all of the above.

Collections: The Debtor's Options

You get sued for money owed. What do you do next?

Answering that question depends on a few things:

1. Is the suit filed in small claims or not?
2. Can you fight the suit?
   
3. Are you working?
4. If you are working, do you have a garnishable wage?
5. Have you filed bankruptcy?
6. Will the creditor accept payments?
7. Will you be able to make your payments?

Regardless of whether the case is small claims or not, you can fight the suit. The difference lies in how you fight. If the suit was not filed in small claims, you need to read my Civil Suits - What Happens After Getting A Summons.

If you do not fight the case or lose in court, the question becomes how do you pay the judgment? Read my Collections Law: Judgment Proof - What is it? and decide if the plaintiff can use the court to get payment out of you.

If the plaintiff can garnish your wages or attach property, you need to decide on whether to make payment arrangements or file bankruptcy. If you do not have an attorney at this point, you need to get one.

When I do collections, I am leery of payment arrangements and so is almost any other collection attorney. Why? You got into this spot because you did not pay your bill. What reason is there for thinking you can make these payments now?

Beware of E-Mail Carrying Pseudo-Subpoenas

Businesses or individuals need to read Law.com's Businesses Hit With E-Mail Blast of Virus-Carrying Pseudo-Subpoenas:

"Thousands of executives received e-mails on Monday purporting to be federal court subpoenas but which appear to be part of a 'phishing' scam to capture sensitive data."

This sounds like something that may be limited to a certain level of business and individual but it is not a good idea to underestimate the kind of people behind this kind of scam.

Indiana law does not allow for service of a subpoena via e-mail. I think the same can be said of federal subpoenas.

If you get one of these, call your attorney immediately and nothing else.

Sheriff's Sales

Indiana Commercial Foreclosure Law posted Indiana Sheriff's Sales - Local Rules, Customs and Practices Control which provides some good information about sheriff's sales and links to online sources:

Although the Indiana Code covers the fundamentals of the sheriff's sale process, the specific rules and procedures vary by county. I presented at a foreclosure-related seminar last month, and one of my co-presenters accurately stated, in essence, that there are 92 counties in Indiana and therefore 92 different sets of rules applicable to sheriff's sales. My advice is to call or visit the local civil sheriff's office to confirm the hoops through which you must jump, and when, to start and finish a successful sheriff's sale

With Indiana foreclosures still continuing at a good pace, I suspect this area is one that we all need more about.

Mr Waller did not mention Madison County but you can find some useful information about us in my post Foreclosure sales - Madison County, Indiana.

Consumer: The FTC Funeral Rule and Funeral Consumers Alliance

The Funeral Consumers Alliance site has information The FTC Funeral Rule. This is something every consumer ought to read. Why? The FCA says it quite well:

"The Funeral Rule, enforced by the FTC, makes it possible for you to choose only those goods and services you want or need and to pay only for those you select, whether you are making arrangements when a death occurs or in advance. The Rule allows you to compare prices among funeral homes, and makes it possible for you to select the funeral arrangements you want at the home you use. (The Rule does not apply to third-party sellers, such as casket and monument dealers, or to cemeteries that lack an on-site funeral home.)"

Funeral Consumers Alliance has chapters in Bloomington and Valparaiso.

Mortgage, Refinance Advice | Truthful Lending dot Com

I do not know much about Truthful Lending dot Com but so I offer its Mortgage, Refinance Advice without any endorsement:

"Irvine, California - At Truthful Lending dot Com we believe that the more educated you are about the mortgage and refinance process, the more likely you are to make the best decision. That's why we have a library of mortgage and refinance articles for you to read so that there are no surprises during the loan process and so that you can protect yourself against unscrupulous mortgage and refinance practices."

More Fall Out From the Nelms/Memory Gardens Case

For those following this blog, I am playing catch up after a protracted illness. Which is why I am combining what might otherwise be two separate posts. In the past week, developments occurred in the General Assembly and with the Memory Gardens receivership.

The Indianapolis Star reports on new legislation concerning cemetery trusts. In Bill seeks to protect cemetery trusts, The Star has the following sidebar:

Cemetery bill

Recent fraud cases spurred state legislators to toughen restrictions on cemetery trust funds meant to cover grounds maintenance and prepaid contracts for burial services. House Bill 1026, which has passed both chambers of the General Assembly, now heads to Gov. Mitch Daniels' desk.

Some of its provisions:

Restrictions: Classifies funeral, cemetery and burial trusts as charitable trusts; tightens standards for their use; and establishes fiduciary responsibilities for institutions holding them. Gives the state attorney general tools to go after abuses of a trust in court, including restraining orders, restitution and appointment of a receiver.

Abuse: Makes knowingly or intentionally paying out money for an improper purpose a Class C felony, giving prosecutors and regulators the ability to go after owners and bankers. Establishes fines for other violations.

Verification: A trustee must verify a person's death before releasing money held in a burial or funeral trust for a prepaid contract and must confirm the services were provided. Trustees of funds created after June 30 cannot be affiliated with the cemetery owner.

Restoration: Compels owners who abuse trust funds to restore the lost principal.

Disclosure: Requires owners to disclose in writing that a vault is not airtight or watertight.

Study: Charges the Probate Code Study Commission with reviewing cemetery and funeral trust laws to determine whether additional changes should be made in Indiana. Its report is due by November.

The reporting on the Memory Garden receivership came from WISH TV 8. The report, Testimony shows company in difficult position, millions lost has some interesting things to say about the running and powers of a receivership (if even only seen obliquely and partially).

"JOHNSON COUNTY, Ind. (Johnson County Daily Journal) - A cemetery and funeral home managing company was struggling to make ends meet and could be short as much as $24.5 million in trust fund money."

Less than two months ago, Memory Gardens Management Corp. didn't have enough money coming in to pay all its bills, said Lynn Gray, who was appointed to oversee the company's finances and management.

Gray cut about $1.5 million out of the yearly budget, including projects the business could do without and the salary, benefits and vehicles of the company's owner and a former manager of a funeral home and cemetery the company operates on State Road 135.

Now, the company, which has a staff of more than 180, can pay its weekly bills, she said.

But concern remains over the future, such as what Gray believes is a shortage in the company's trust funds and larger bills, such as for caskets or other services and merchandise, which eventually need to be paid.

Gray testified in a hearing Monday about her work as court-appointed receiver of Memory Gardens, which includes Forest Lawn Memory Gardens and Funeral Home.

***

The hearing that began Monday will determine whether Gray should stay in her role or whether those responsibilities should be turned back over to the company.

She testified that turning the company back over to Nelms could harm customer confidence in the business, which includes cemeteries and funeral homes in Indiana, Michigan and Ohio.

There also are other issues that need to be investigated, Gray said.

One of the main issues is whether the trust funds have the amount of money required by law.

Consumer Law: Suing Debt Collectors

Indiana has no state law comparable to the federal Fair Debt Collections Practice Act (FDCPA). Which means if you want to sue a collection agency in Indiana, then you need to know about the FDCPA. The Federal Trade Commission has a FAQ (Frequently Asked Questions) here (which is in PDF format). If you think you have a case in Indiana take a look at this pamphlet and then give me a call.

Indiana's Deceptive Consumer Sales Act - Part 2

What is a deceptive act for Indiana's Deceptive Practices Act?

IC 24-5-0.5-3(a) has nineteen (yes, 19) different acts that can be a deceptive practice.

(1) That such subject of a consumer transaction has sponsorship, approval, performance, characteristics, accessories, uses, or benefits it does not have which the supplier knows or should reasonably know it does not have.
(2) That such subject of a consumer transaction is of a particular standard, quality, grade, style, or model, if it is not and if the supplier knows or should reasonably know that it is not.
(3) That such subject of a consumer transaction is new or unused, if it is not and if the supplier knows or should reasonably know that it is not.
(4) That such subject of a consumer transaction will be supplied to the public in greater quantity than the supplier intends or reasonably expects.
(5) That replacement or repair constituting the subject of a consumer transaction is needed, if it is not and if the supplier knows or should reasonably know that it is not.
(6) That a specific price advantage exists as to such subject of a consumer transaction, if it does not and if the supplier knows or should reasonably know that it does not.
(7) That the supplier has a sponsorship, approval, or affiliation in such consumer transaction the supplier does not have, and which the supplier knows or should reasonably know that the supplier does not have.
(8) That such consumer transaction involves or does not involve a warranty, a disclaimer of warranties, or other rights, remedies, or obligations, if the representation is false and if the supplier knows or should reasonably know that the representation is false.
(9) That the consumer will receive a rebate, discount, or other benefit as an inducement for entering into a sale or lease in return for giving the supplier the names of prospective consumers or otherwise helping the supplier to enter into other consumer transactions, if earning the benefit, rebate, or discount is contingent upon the occurrence of an event subsequent to the time the consumer agrees to the purchase or lease.
(10) That the supplier is able to deliver or complete the subject of the consumer transaction within a stated period of time, when the supplier knows or should reasonably know the supplier could not. If no time period has been stated by the supplier, there is a presumption that the supplier has represented that the supplier will deliver or complete the subject of the consumer transaction within a reasonable time, according to the course of dealing or the usage of the trade.
(11) That the consumer will be able to purchase the subject of

the consumer transaction as advertised by the supplier, if the supplier does not intend to sell it.
(12) That the replacement or repair constituting the subject of a consumer transaction can be made by the supplier for the estimate the supplier gives a customer for the replacement or repair, if the specified work is completed and:

(A) the cost exceeds the estimate by an amount equal to or greater than ten percent (10%) of the estimate;
(B) the supplier did not obtain written permission from the customer to authorize the supplier to complete the work even if the cost would exceed the amounts specified in clause (A);
(C) the total cost for services and parts for a single transaction is more than seven hundred fifty dollars ($750); and
(D) the supplier knew or reasonably should have known that the cost would exceed the estimate in the amounts specified in clause (A).

(13) That the replacement or repair constituting the subject of a consumer transaction is needed, and that the supplier disposes of the part repaired or replaced earlier than seventy-two (72) hours after both:

(A) the customer has been notified that the work has been completed; and
(B) the part repaired or replaced has been made available for examination upon the request of the customer.

(14) Engaging in the replacement or repair of the subject of a consumer transaction if the consumer has not authorized the replacement or repair, and if the supplier knows or should reasonably know that it is not authorized.
(15) The act of misrepresenting the geographic location of the supplier by listing a fictitious business name or an assumed business name (as described in IC 23-15-1) in a local telephone directory if:

(A) the name misrepresents the supplier's geographic location;
(B) the listing fails to identify the locality and state of the supplier's business;
(C) calls to the local telephone number are routinely forwarded or otherwise transferred to a supplier's business location that is outside the calling area covered by the local telephone directory; and
(D) the supplier's business location is located in a county that is not contiguous to a county in the calling area covered by the local telephone directory.

(16) The act of listing a fictitious business name or assumed business name (as described in IC 23-15-1) in a directory assistance database if:

(A) the name misrepresents the supplier's geographic location;
(B) calls to the local telephone number are routinely

forwarded or otherwise transferred to a supplier's business location that is outside the local calling area; and
(C) the supplier's business location is located in a county that is not contiguous to a county in the local calling area.

(17) That the supplier violated IC 24-3-4 concerning cigarettes for import or export.

(18) That a supplier knowingly sells or resells a product to a consumer if the product has been recalled, whether by the order of a court or a regulatory body, or voluntarily by the manufacturer, distributor, or retailer unless the product has been repaired or modified to correct the defect that was the subject of the recall.
(19) That the supplier violated 47 U.S.C. 227, including any rules or regulations issued under 47 U.S.C. 227.

Following up on the Nelms case

While the State of Indiana goes after Robert Nelms for possible fraud regarding cemetery funds (see my post here, here and here), The Indianapolis Business Journal reports others sued the financial services firms, Memory Gardens lawsuit seeks $20M:

An Indianapolis law firm has filed a class-action suit seeking more than $20 million from a pair of financial-services firms it says facilitated the transactions that allowed a New Jersey couple to plunder cemetery trust funds.

Cohen & Malad LLP filed the lawsuit late last month on behalf of thousands of customers of Indianapolis-based Memory Gardens Management Corp., which owns Forest LawnMemory Gardens in Greenwood, Lincoln Memory Gardens in Boone County and other cemeteries. The defendants are the company, New York-based Smith Barney and a Noblesville bank formerly known as Community Trust & Investment Co.

The case is the latest fallout from a massive fraud investigators say was perpetrated by the New Jersey couple, Robert Nelms and Debora Johnson. Marion County prosecutors last month charged Nelms, 39, and Johnson, 48, with nine felony counts each. Investigators say the pair raided $24 million in trust funds that were supposed to maintain cemetery grounds and cover prepaid burials and funerals.

Indiana Home Improvement Fraud

The time is coming for home repairs, do not fall victim to. home improvement fraud. Most home improvement contracts fail to meet the requirements of Indiana’s Home Improvement Fraud Statute.

If you contact for any alteration, repair, or other modification of your residential property that costs more than $150.00, then this statute applies to that contract.

The law generally requires:

1. The telephone numbers and names of any person for handling consumer problems.
2. Any time limitation on the consumer's acceptance of the home improvement contract.
3. A reasonably detailed description of the proposed home improvements.
4. The approximate starting and ending dates.
5. A statement of any contingencies that would materially change the approximate completion date
6. Be in a form that each consumer who is a party to it can reasonably read and understand.
7. The contract price.

The law has additional details required when insurance pays to repair damages to the residence.

The Home Improvements Statute falls within Indiana's Deceptive Consumer Sales Act (see my article on that statute starting here) . For a successful suit, you must also follow that statute.

The Deceptive Consumer Sales Act allows for the following remedies:

1. The actual money damages or $500.00, whichever is greater.
   
2. For willful deceptive acts, the court may increase damages to: 3 times the actual damages of the consumer suffering the loss but not more than $1,000.00.
3. Attorney fees.

What I can do for you:

1. Read any contracts before you sign off on them to make sure that you are not going to be a victim of home improvement fraud.
2. If you have a contract that is bad, I can go to court for you.
   

Consumer: The States and Gift-Cards

An interesting article from Business Week on those gift cards that never seem to get used. The Scramble for Gift-Card Cash:

"A lot of states—roughly half—claim that at least part of the unspent balances should go to them under their unclaimed-property laws. Other states let that excess dribble back onto retailers' income statements under varying conditions. Naturally, stores issuing the cards are scrambling to ensure the most advantageous accounting."

Not that this helps those buyers of cards from businesses who go under before the anyone can use the cards.

Indiana's Deceptive Consumer Sales Act - Part 1

Let me say that for most of the past fifteen years I have been thinking Indiana's Deceptive Consumer Sales Act is pretty useless. That was when I tried a case on another subject - home improvements fraud - that also comes under the Deceptive Consumer Sales law and the judge implied an intent requirement where the statute does not require any such intent.

I find the Act's problems lying in the following provision and the general public's ignorance of the Act:

IC 24-5-0.5-5(a): No action may be brought under this chapter, except under section 4(c) of this chapter, unless (1) the deceptive act is incurable or (2) the consumer bringing the action shall have given notice in writing to the supplier within the sooner of (i) six (6) months after the initial discovery of the deceptive act, (ii) one (1) year following such consumer transaction, or (iii) any time limitation, not less than thirty (30) days, of any period of warranty applicable to the transaction, which notice shall state fully the nature of the alleged deceptive act and the actual damage suffered therefrom, and unless such deceptive act shall have become an uncured deceptive act.

I know that is a big chunk of statute to digest. Let me pick it apart a b it. First, the consumer must know that a certain act comes under the Act. Second, the consumer must write a letter explaining to the party providing the consumer good or service (that is the supplier mentioned above) explaining how they were injured within the time frame set out above. Unless, of course, the act is incurable. The statute brings an intent requirement into its definition of "incurable deceptive act":

IC 24-5-0.5-2(a) (8): "Incurable deceptive act" means a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead. The term includes a failure of a transferee of structured settlement payment rights to timely provide a true and complete disclosure statement to a payee as provided under IC 34-50-2 in connection with a direct or indirect transfer of structured settlement payment rights.

Which brings us back to common-law, tortious fraud which is not required when a supplier does nothing to cure (fix) the deceptive act within 30 days of receiving notice of the consumer's injury.

The consumer loses if:

1. If a consumer does not know that a transaction comes under the Deceptive Sales Act; or
   
2. If the consumer does not send written notice of the injury.

Little noise gets made about this statute. Yet, the statute has a lot of potential. So now I will be making some noise about the statute. Over the next week or two, I hope to explore the statute in some detail. For what has changed over the years is the availability of the Internet to publicize and informing the public is one purpose of this blog.

Business owners, do not think that what will follow does not apply to you. I think consumers and business owners are ill-served by the statute's relative obscurity. Honest business people can find themselves ensnared by the statute just as dishonest suppliers can escape penalties thanks to the general public's ignorance.

Music Download News - New Tactic from Recording Industry

Since I have written before (here and here and here) about the lawsuits against music downloading, the Washington Post article, Download Uproar: Record Industry Goes After Personal Use, caught my eye.

"Now, in an unusual case in which an Arizona recipient of an RIAA letter has fought back in court rather than write a check to avoid hefty legal fees, the industry is taking its argument against music sharing one step further: In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer."

I read about the RIAA's theory elsewhere. Distilled to a bare minimum, I do not own my music CD but only use it under a license from the record company.

The industry's lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.

"I couldn't believe it when I read that," says Ray Beckerman, a New York lawyer who represents six clients who have been sued by the RIAA. "The basic principle in the law is that you have to distribute actual physical copies to be guilty of violating copyright. But recently, the industry has been going around saying that even a personal copy on your computer is a violation."

Yeah, a lot of people can believe this argument - lawyers and laypersons alike.

I cannot but heartily agree with this:

The RIAA's legal crusade against its customers is a classic example of an old media company clinging to a business model that has collapsed. Four years of a failed strategy has only "created a whole market of people who specifically look to buy independent goods so as not to deal with the big record companies," Beckerman says. "Every problem they're trying to solve is worse now than when they started."

I suppose working at the rarefied levels of my profession as the RIAA's attorneys do, they give no thought to the ultimate wisdom of their legal theories. I have a duty to act in my client's best interests and so do these guys. Yet, this litigation does nothing to advance anything for their clients - other than the RIAA as a bunch of greedy thugs.

Mechanic's Liens and Permits: A New Court of Appeals Case

An Evansville area contractor lost its lien and its appeal by not getting the building permit in the proper way. Hopper Resources Inc., Construction Div. v. Wendell Webster (PDF format) decided yesterday turned on the way that the contractor obtained the building permit:

On November 25, 2003, Shamo went to the Building Commission office and obtained an Improvement Location Permit for the addition of a bathroom and a porch to Webster’s residence. Shamo completed a “Homeowner Affidavit” stating that “Wendel [sic] Webster” thereby swore that “either [he] or a member of [his] immediate family” would “perform the . . . work” of adding the room and porch at his residence, “for which Building Permit #106771E” was being issued, and that he would not be “subcontracting out any of the work” thereon. (Ex. A). Shamo signed Webster’s name on the affidavit....

Contractor filed suit to foreclose the lien. Contractor lost at the trial court level and appealed. The Indiana Court of Appeals noted that foreclosure is an equitable action and listed several equity maxims: One who seeks equity must do equity, One who comes into equity must come with clean hands, and equity follows the law ( see page 7 of the opinion).

But losing the foreclosure was not all that the contractor lost - the contractor also lost on the breach of contract claim. The Court of Appeals sank the breach of contract claim in this paragraph:

Next, Hopper argues that it “was entitled to recover on breach of contract,” citing “unrefuted evidence” that it “was owed and ha[d] incurred damages” in the amount of $7,500.00 “as a result of Webster breaching the parties’ contract by running Hopper off the job and refusing to pay.” Hopper’s Br. at 29, 30. The evidence was that Webster refused to allow further work by Webster after the inspector found that the work failed to comply with Code. The Homeowner Affidavit expressly provides that “if the Inspector should find the work in the violation of the Code, then [the homeowner] shall employ a master installer of the required trade or craft to change, alter, or repair the work that is in violation.” (Ex. A). Hopper offered no evidence to establish that it held such credentials...Absent a showing that Hopper held credentials to perform the corrective work required by the Homeowner Affidavit, the circumstances here did not require that Webster allow Hopper workers to perform further work. Therefore, Hopper’s breach of contract claims must fail.

Reading the case, I was surprised that the homeowner did not file a counterclaim based on Indiana's home improvement fraud statute. The homeowner filed a counterclaim and asserted an affirmative defense of fraud, but the counterclaim was struck by the trial court. The Home improvement statute says the following about permits:

IC 24-5-11-9
License or permit as prerequisite
Sec. 9. Where a license or permit is necessary for any part of a home improvement, the home improvement contract shall be subject to obtaining the necessary licenses or permits prior to any work commencing.

Considering how the contractor obtained the permit in this case and the type of permit, I think the contractor got lucky in escaping a home improvement fraud suit.

Indiana Commercial Foreclosure Law: From The New York Times: "Foreclosures Hit A Snag For Lenders"

Indiana Commercial Foreclosure Law has a post that seems to fit into what I wrote earlier about Ohio foreclosures. I still have nto time to read all of From The New York Times: "Foreclosures Hit A Snag For Lenders" but hope to do so this weekend.

"If you deal with mortgage security pools, and in particular the foreclosure of mortgages within such a pool, you should read today's interesting article from The New York Times: 'Foreclosures Hit a Snag For Lenders'. The article addresses federal court foreclosure litigation in Ohio and specifically an opinion by Judge Boyko dismissing fourteen cases because the plaintiff (foreclosing entity) failed to prove it had standing to pursue the cases. I located the Judge's October 1 order referenced in the article: .pdf. My colleague Chris Jacobson helped find the October 31 opinion: BoykoOpinion.pdf.

Homeowners must follow health codes

From last week's Indiana Lawyer Homeowners must follow health codes:

"Owners of houses or mobile homes they construct themselves still must follow Indiana health codes, the Indiana Court of Appeals ruled today. The appellate court overturned a trial court's ruling that a section of Indiana code exempted certain homeowners from obtaining a permit for septic systems."