Indiana Lemon Law - New Case

As I am still catching up from hiatus last month, I can only offer The Indiana Lawyer Daily report on a new lemon law case, COA rules on first impression lemon-law issue

The Indiana Court of Appeals tackled today an issue of first impression regarding the state's lemon law: Once a consumer has met the law's repair threshold, he can still file an action under the lemon law even if a subsequent repair fixes the problem.

In Metro Health Professionals, Inc. v. Chrysler, LLC,
No. 06A04-0809-CV-547, Metro Health Professionals purchased a Jeep from
a Chrysler dealer in October 2006. MHP took the vehicle in for service
at a repair facility authorized by Chrysler to address issues with all
the warning lights in the dash coming on, gauges that quit working,
headlights shutting on and off spontaneously, and the transmission
shifting into low gear spontaneously. Each time it was brought in,
Chrysler claimed there wasn't a problem. Finally, after the fifth time
MHP brought the car in for service, the repair facility replaced the
front control module and the problems haven't occurred since.

Congratulations to Robert Duff of Lebanon, Indiana for his win for the consumer.

GM Bankruptcy and Warranty Issues

Although Lemon Law Blog worried over GM's warranty claim in GM Bankruptcy - A Looming Consumer Disaster. It now appears that GM will honor those claims; although I would like a better confirmation than this.

On the other hand, this bit of news shows the conumser concerns are shared by others: PA Joins 36 States With Objections in GM Bankruptcy Case

Corbett noted that the Attorneys General who joined in this filing do not necessarily oppose the planned sale of General Motors, but they have expressed concern that the current agreement is unclear or ambiguous about many important consumer issues, including:
· Lemon Law claims and warranty issues
· Personally identifiable information of consumers
· Workers compensation claims
· Tax claims
· Environmental claims

We amy know more later today as GM has a hearing scheduled for today.

FTC Amends Rules on Practice

FTC Issues Final Rules Amending Parts 3 and 4 of the Agency’s Rules of Practice:

"Through the Federal Register notice announced today, the Commission has made changes to several areas of the rules. First, the amendments eliminate Rule 3.11A (Fast Track Proceedings). The Fast Track Proceedings are unnecessary because of the expedited deadlines in the new Part 3 rules.

Second, changes in Rule 3.25 clarify the procedures for the Commission to consider possible settlements while a matter is in administrative litigation.

Third, Rule 3.31(g) has been amended to be consistent with a new federal rule of evidence regarding how parties must deal with documents subject to privilege that another party claims were inadvertently produced.

Finally, amended Rule 4.2 requires a party to file a redacted public version of a petition for certain types of Commission action (such as a petition to quash a subpoena) in non-Part 3 matters if it requests confidential treatment for the petition. The rule also makes other changes that will facilitate the development of a new Commission electronic filing system for adjudicative proceedings."

Fair Debt Collection Practices Case - Seventh Circuit

Chicago Business Litigation Lawyer Blog picks up on a Wisconsin FDCPA case that may have legs - for those whose debts are bought/assigned by a collection agency.

Summary Judgment Stands for Consumer Class Alleging Unfair Debt Collection Practices, Seventh Circuit Rules

AFNI next argued that it is entitled to collect fees as Cingular's assignee, since customers signed contracts with Cingular agreeing to pay fees charged by a third party. The district court found that the contracts authorize a collection fee only when Cingular uses a third party, not when Cingular does the collection work itself. AFNI argued that it could collect the fee as a reimbursement if it had paid that fee to Cingular. But as the appeals court pointed out, it did not pay such a fee, and no evidence in the record shows that AFNI's fee could be considered a referral fee authorized by the contract.

Finally, the court considered whether AFNI's violation of the law could be considered a bona fide error under the FDCPA, which removes liability when a debt collector broke the law unintentionally. One requirement of the bona fide error defense, the Seventh wrote, is that the debt collector have reasonable procedures in place to avoid a violation. It concluded that AFNI had no such procedures, pointing out that AFNI an employee's own deposition shows it wasn't aware of the distinction between collecting its own debt and collecting on behalf of a client. In fact, the court wrote, "applying the bona fide error defense here would essentially reward a business's ignorance of the law." Thus, it upheld the trial court's summary judgment decision on both the FDCPA and the Wisconsin claim.

Thinking of Franchising?

Take a look at A Complete Description to Franchising (Parts 1, 2 and 3) for a primer on the business side a nd then read Rugh Nigut's Franchise Research is Not Difficult.

Franchising is a wonderful business tool. Like all tools they can be misused.

Talk to a lawyer with franchising experience before signing any franchising agreement.

Remember, if you want more information about retaining me for a case, please give me a call at 765-641-7906.

Indiana Consumer Law: Are We Seeing a Trend to a Pro-Consumer Law?

It may be so. I am speculating whether or not it has to do with our recession.

This came in yesterday from The Indiana Lawyer, COA invites high court to revisit Indiana law

In a case involving the purchase of a home, Indiana Court of Appeals judges today disagreed as to whether the home sellers should be granted summary judgment in a fraud suit. The judges unanimously did agree to encourage the Indiana Supreme Court to re-evaluate a rule that protects a seller from a lawsuit, even if he lies about a property, as long as the prospective buyer had a reasonable opportunity to inspect the property.

At issue in Drew and Donna Dickerson v. Donna Strand and Gloria German, No. 54A01-0807-CV-334, is whether Donna Strand and Gloria German can be held liable for fraud arising from the sale of their house to the Dickersons.

***

When Strand and German bought their home, it had termite damage, which the seller paid to treat. When Strand and German went to sell the home five years later, termite damage was found again and disclosed in a home inspection report. They claimed to have fixed the issue and said there were no structural problems with the building. The Dickersons bought the home, relying on disclosures and documents from Strand and German and never had their own inspection done.

After discovering more termite damage than what was revealed to them, the Dickersons filed a complaint against Strand and German alleging they falsely represented the property hadn't suffered structural termite damage. The trial court granted summary judgment in favor of Strand and German.

Under Indiana law, the appellate court didn't need to decide whether Strand and German's representations in the documents were fraudulent because the Dickersons had no right to rely on those representations, wrote Judge Patricia Riley. The majority relied heavily on the Indiana Supreme Court ruling in Cagney v. Cuson, 77 Ind. 494, 1881 WL 6689 (1881), in which the high court held even as to fraudulent representations operating as an inducement to the sale or exchange of property, a purchaser has no right to rely on those representations when he has had reasonable opportunity to examine the property and judge for himself its qualities.

I had already seen Indiana Consumer Fraud from Robert E. Duff's Indiana Consumer Law Blog (good to see Duff writing again):

The case was tried to the Court without a jury and the judge found for the defendant. The Court of Appeals reversed and directed the trial court to enter judgment for the Plaintiff on the fraud claim, citing it as a "textbook case" of fraud. The lesson we are reminded of is summarized in two important sentences from the opinion: "[F]raud is not limited only to affirmative representations; the failure to disclose all material facts can also constitute actionable fraud. When a buyer makes inquiries about the condition, qualities or characteristics of property 'it becomes incumbent upon the seller to fully declare any and all problems associated with the subject of the inquiry."

This is great, very broad language for Indiana consumers. It will be very rare indeed that a consumer will purchase a vehicle without making at least some inquiry as to the condition, qualities or characteristics of the car. Once this inquiry is made, the dealership has an affirmative obligation to disclose all material facts about the car.

This could be a good change, giving us more of a balance in Indiana.

Funeral Home Rule and Crematories

The Federal Trade Commission has a new opinion letter on how the Funeral Home Rule applies to crematories. You can reach this letter (which is in PDF format) here.

The letter ends with the usual disclaimer of opinion letters:

As you know, the views expressed in this letter are those of the FTC staff. They have not been reviewed, approved, or adopted by the Commission, and they are not binding on the Commission or any individual Commissioner. However, they do reflect the views of FTC staff charged with enforcement of the Funeral Rule. Staff Funeral Rule opinions are routinely posted on the FTC website at http://www.ftc.gov/bcp/conline/edcams/funerals/staffopinions.shtm.

But I find no fault with the reasoning of the staff on this issue.

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.

Your Federal Tax Dollars at Work: The FTC's Division of Marketing Practices

The Pacific Daily News' Agency protects consumers from marketing scams has a good description of the Federal Trade Commission's Division of Marketing Practices. The Division of Marketing Practices touches on many busienss and should be of great interest to all consumers.

"The FTC's Division of Marketing Practices responds quickly to the ever-changing world of fraudulent marketing practices. It enforces federal consumer protection laws by filing actions in federal district court on behalf of the Federal Trade Commission to stop scams, prevent scam artists from repeating fraudulent schemes, freeze assets, and obtain compensation for scam victims. The division also files administrative cases with the commission to stop these scams."

The division's enforcement priorities include:

Shutting down high-tech Internet and telephone scams.

Halting deceptive telemarketing or direct mail marketing schemes that use false and misleading information; and

Stopping pyramid schemes and other fraudulent investment scams.

The division is also responsible for the issuance, revision and enforcement of many of the commission's rules, including:

The Telemarketing Sales Rule, which prohibits deceptive sales pitches and protects consumers from abusive, unwanted and late-night sales calls.

The 900 Number Rule, which requires sellers of pay-per-call services to clearly disclose the price of their services, prohibits the targeting of most of those services to children, and forbids unfair billing practices.

The Franchise and Business Opportunity Rule, which requires sellers of franchises and business opportunities to give prospective buyer a disclosure containing specific information about the business and any earnings claims that are made, to help them evaluate the value of the franchise.

The Funeral Rule, which requires funeral directors to disclose price and other information about their services to consumers.

The Magnuson-Moss Act, which requires merchants to make warranty information available to consumers before they make a purchase.

The division is at the forefront of investigating the use of the Internet and new schemes to defraud consumers.

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.

Collections: Good Outline of the Fair Debt Collection Practices Act

Thanks to ISBA Mutual Insurance Company for publishing Debt Be Not Proud. Yes, the article reads as if it is directed to lawyers (because it is), but I think it can still be read and understood and used by non-lawyers.

Getting Out of Student Loans

It cannot be done, but I suggest reading Shouldn’t you be able to discharge your student loans in a bankruptcy? that I found through The e-Legal Lawyer Blog. Anyone thinking of taking out a student loan needs to think about this.

FTC Revising its Business Opportunties Rule

If you are selling or buying a business opportunity, take a look at FR Doc E8-13899:

"SUMMARY: In a Federal Register notice published on March 26, 2008,\1\ the FTC requested comment on its Revised Notice of Proposed Rulemaking (``RNPR'' or ``Notice'') in connection with the Business Opportunity Rule. The Notice stated that comments must be submitted on or before May 27, 2008, and that rebuttal comments must be submitted on or before June 16, 2008. In response to a request to extend the rebuttal comment period received on June 5, 2008, the Commission has extended the rebuttal comment period for an additional 15 days."

Looking for a free credit report? AnnualCreditReport

Everyone needs to keep track of their credit reports. I think freecreditreport.com has done a great job of getting this point across (my step-kids can sign the commercial's song). I offer another site to get a free credit report: AnnualCreditReport:

"This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion."

Not that I am advocating for this site, just the need to get a copy and checking it for errors.

Indiana Attorney General Stubs Toe While Enforcing Civil Investigative Demands

Who needs evidence? On Tuesday, The Indiana Lawyer published Court: Evidence needed to enforce CID. You will have to take a look at my post, See Litigation: Indiana Jurisdiction Over Out of State Companies, to get the full scope of the interest here. The Attorney General seems to have problems with its civil investigative demand (CID) but I am relying on the Indiana Lawyer on this one:

The Indiana Attorney General must provide at least a verified petition to a court to enforce a civil investigative demand and show the demand is proper, the Indiana Supreme Court ruled today.

In Nu-Sash of Indianapolis, Inc. d/b/a McKee Sunroom Designs v. Steve Carter, Indiana Attorney General, and Liberty Publishing, Inc. d/b/a Booster Club Productions , No. 49S02-0801-CV-16, Nu-Sash appealed a trial court order that the company respond within 10 days to a civil investigative demand (CID) issued by Attorney General Steve Carter regarding consumer complaints. At the hearing on the petition, the attorney general did not present any evidence to show why the demand is proper under Indiana Code Sections 4-6-3-1 through 6. The Indiana Court of Appeals affirmed the trial court didn't abuse its discretion because the attorney general met the statutory requirements for issuing a CID.

Pre-Need Funerals - Ohio Senate Passes a Consumer Protection Bill

I cannot help but wonder if legislation like this reported in the Lancaster Eagle Gazette Ohio Senate Passes Pre-Need Funeral Consumer Protection Act is not related to the Nelms/Memory Gardens case here in Indiana:

"Under Senate Bill 196, increased consumer disclosure is required when an individual purchases pre-need funeral services, including: How it is funded; revocation rights; under what circumstances a consumer can transfer pre-need arrangements to another funeral home; that the consumer is entitled to receive price information in accordance with the Federal Trade Commission Funeral Rule; and that the insurance company or trustee that receives monies pursuant to a pre-need funeral contract is required to notify the consumer in writing when monies are received."

Consumer: Eco-Funerals

When I saw the title Eco-Funerals - Green to the Grave at the Toronto Estate Law Blog, I knew I had to read it. I heard of these on NPR several years back but I did not recall any mention of Canada, only of England and Arizona (if I recall correctly). What are they? This is a good description.

So what exactly makes a funeral eco-friendly? Green funerals do not embalm bodies with chemical preservatives, but rather dress them in clothes made from natural fibers and place them in cardboard coffins. Although they are more challenging to handle (especially when they are wet), they biodegrade within 3 months. Trees or shrubs are often used to mark individual plots, rather than marble tombstones, as marble is not a renewable resource. Irrigation and pesticides are not used.

If you do read the original post, remember that the Indiana cemetery may not be able to accommodate this sort of burial.

Following up on "More Fall Out From the Nelms/Memory Gardens Case"

I noticed Cemetery trust money should go to a third party from The Grand Rapids (MI) Press and realized I had not followed up on More Fall Out From the Nelms/Memory Gardens Case. HB 1026 did become law is now effective according to the Indiana Bill Info site.

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.