Latest 5 Cases: Bates v. Green Farms Condominium Association (Banking), In re: Hill (Bankruptcy), Everly v. Everly (Civil Procedure)

Law in the Time of Corona

JOANNA L. GROSSMAN, LAWRENCE M. FRIEDMAN

SMU Dedman School of Law professor Joanna L. Grossman and Stanford law professor Lawrence M. Friedman discuss the implications of COVID-19 on the execution of wills and marriage. Grossman and Friedman argue that the COVID-19 crisis demonstrates how quickly and universally Americans rush into court, demanding from judges legal solutions to ethical, political, and social issues.

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Bates v. Green Farms Condominium Association

Docket: 19-2127

Opinion Date: May 4, 2020

Judge: Murphy

Areas of Law: Banking, Consumer Law, Real Estate & Property Law

The Bateses lost their condominium through a nonjudicial foreclosure. They claim the condo complex’s management company and its law firm violated the Fair Debt Collection Practices Act, which generally defines “debt collectors” to cover parties who operate a “business the principal purpose of which is the collection of any debts” or who “regularly collect or attempt to collect” debts owed another, 15 U.S.C. 1692a(6). The Act contains a separate debt-collector definition for subsection 1692f(6), regulating parties who operate a “business the principal purpose of which is the enforcement of security interests.” General debt collectors must comply with all of the Act’s protections; security-interest enforcers need only comply with section 1692f(6). In 2019, the Supreme Court held (Obduskey) that parties who assist creditors with the nonjudicial foreclosure of a home fall within the separate definition, not the general one. Obduskey left open the possibility that these parties might engage in “other conduct” that would transform them from security interest enforcers into general debt collectors, subject to all of the Act’s regulations. The Sixth Circuit affirmed a judgment on the pleadings for the defendants. The Bateses’ complaint did not plead enough facts to take the defendants outside the separate definition for security-interest enforcers and bring them within the general debt-collector definition; there were almost no well-pleaded allegations about the principal business or regular activities of either.

In re: Hill

Docket: 19-5861

Opinion Date: May 4, 2020

Judge: Donald

Areas of Law: Bankruptcy

In 2010, Hill, a principal of Meridian and the other principals sold Meridian to CMCO; the former Meridian principals were to work for CMCO. In 2012, Hill accepted employment with CMCO’s competitor, Peoples. CMCO filed suit, alleging that he breached his contract and shared trade secrets. CMCO settled its claims against Peoples. Hill proceeded pro se. Hill failed to attend a pretrial conference. The state court granted a default judgment. Hill also declined to appear for the damages trial. Hill asserts that he never received the order scheduling a pretrial conference but admits that he was initially aware of the date. Hill further acknowledged that he knew of the trial date because he spoke with the judge by phone and was warned that if he did not appear “adverse things [were] likely [to] happen.” He contends that a bankruptcy attorney he was consulting advised him that he need not participate because any judgments would “go away” in bankruptcy. The court granted CMCO judgment, finding Hill’s actions willful, intentional, in bad faith, egregious, and done with malice. The court awarded $3,417,477. Hill then filed his Chapter 7 bankruptcy petition. The bankruptcy court lifted the automatic stay, 11 U.S.C. 362(d), with respect to CMCO’s judgment.CMCO filed an adversary proceeding. The court found the damages judgment nondischargeable, 11 U.S.C. 523(a)(2)(A), (a)(4), (a)(6), applying collateral estoppel based on the state court finding that Hill’s actions caused “willful and malicious injury.” Hill unsuccessfully sought to vacate the state court judgment. The district and Sixth Circuit affirmed the bankruptcy court’s grant of summary judgment to CMCO. ” The state court damages judgment provided preclusive effect to the determination of the nondischargeability of Hill’s debt.

Everly v. Everly

Docket: 19-5150

Opinion Date: May 4, 2020

Judge: Bush

Areas of Law: Civil Procedure, Copyright, Entertainment & Sports Law, Intellectual Property

In 1960, the Everly Brothers (Don and Phil) recorded, released, and copyrighted "Cathy’s Clown" and two other songs (the Compositions), granting the copyrights to Acuff-Rose. The original copyrights listed Phil and Don as authors; both received royalties. They were both credited as authors of Cathy’s Clown in 1961 and 1975 awards. They took joint credit for authoring the song in a 1972 television interview. In a 1980 “Release and Assignment,” Phil agreed to release to Don all of his rights to the Compositions, including “every claim of every nature by him as to the compositions of said songs.” Don subsequently received all royalty payments and public credit as the author; Acuff-Rose changed its business records to reflect Don as sole author. Licenses and credits for Cathy’s Clown and a 1988 copyright renewal listed Don as the only author. Both brothers nonetheless made public statements continuing to credit Phil as a co-author. In 2011, Don sought to execute his 17 U.S.C. 304(c) right to termination to regain copyright ownership from Acuff-Rose, claiming exclusive copyright ownership. Phil exercised termination rights as to other compositions, in 2007 and 2012, but never attempted to terminate any grant related to the 1960 Compositions. After Phil’s 2014 death, his children filed notices of termination as to the 1960 Grants, seeking to regain Phil’s rights to Cathy’s Clown. In 2016, they served a notice of termination as to Phil’s 1980 Assignment to Don. The district court granted Don summary judgment, finding that the claim of Phil’s co-authorship was barred by the statute of limitations. The Sixth Circuit reversed, finding a genuine factual dispute as to whether Don expressly repudiated Phil’s co-authorship, and thus triggered the statute of limitations, no later than 2011.

Andrews v. Wayne County

Docket: 19-1992

Opinion Date: May 4, 2020

Judge: Suhrheinrich

Areas of Law: Civil Rights, Constitutional Law, Criminal Law

Canton Police received a 911 call from Andrews, who stated that his fiance, White, had physically attacked him. Officers arrested White. Andrews later took White's medications to the jail; a “KOP” policy allows inmates to keep certain drugs for self-administration. During an intake interview, White admitted to attempting to harm herself or commit suicide in the past but said she was not thinking of harming herself or having suicidal thoughts. An R.N. later evaluated White for nearly two hours, reported White’s chief complaints were “anxiety and depression,” and contacted a pharmacy to verify White’s prescriptions. The R.N. claims White did not exhibit any psychotic behavior, suicidal ideation, or psychiatric distress but ordered further evaluation. The next day, White was found on the floor with vomit on her face. She stated repeatedly that she took too many pills. The next day, White died in the hospital. The cause of death was Verapamil toxicity. The Sixth Circuit affirmed the rejection of a suit under 42 U.S.C. 1983 on summary judgment. A pretrial detainee does not have an automatic right to a suicide screening. The court rejected an argument that the KOP Policy was deficient because it allows inmates in need of a psychological evaluation to participate before a psychiatrist’s assessment of proper housing. The County had no history of suicides relative to the program, so any purported failure to train its employees in suicide risk assessment did not cause White’s death.

Maryville Baptist Church, Inc. v. Beshear

Docket: 20-5427

Opinion Date: May 4, 2020

Judge: Per Curiam

Areas of Law: Civil Rights, Constitutional Law

Kentucky Governor Beshear issued a COVID-19 order, prohibiting “[a]ll mass gatherings,” including "community, civic, public, leisure, faith-based, or sporting events.” It excepts “normal operations at airports, bus and train stations, . . . shopping malls and centers,” and “typical office environments, factories, or retail or grocery stores where large numbers of people are present, but maintain appropriate social distancing.” A subsequent order required organizations that are not “life-sustaining” to close. Religious organizations are not “life-sustaining,” except in providing “food, shelter, and social services.” Laundromats, accounting services, law firms, hardware stores, and many other entities count as life-sustaining. Maryville held a drive-in Easter service. Congregants parked their cars in the church’s parking lot and listened to a sermon over a loudspeaker. State Police issued notices to the congregants that their attendance amounted to a criminal act, recorded congregants’ license plate numbers, and sent letters, requiring them to self-quarantine for 14 days. The Church filed suit, citing its congregants’ rights under Kentucky’s Religious Freedom Restoration Act and the U.S. Constitution’s free-exercise guarantee. The Sixth Circuit granted, in part, a request for an injunction. The Church is likely to succeed on its claims, especially with respect to the ban’s application to drive-in services. The treatment of comparable religious and non-religious activities does not suggest the least restrictive way of regulating the churches. The prohibition on attending any worship service inflicts irreparable harm; an injunction appropriately permits religious services with the same risk-minimizing precautions as similar secular activities and enforcement of social-distancing rules. Treatment of similarly situated entities in comparable ways serves public health interests while preserving bedrock free-exercise guarantees.