New York Court: “Happy Wife, Happy Life” Will Not Shield You From A Wrongful Termination Lawsuit

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Mr right and mrs always right (pd)I do not have these mugs at home, but I should. Most married men will tell you that the easiest way to avoid trouble at home is to remember that your wife is always right (even on those rare occasions when she is obviously wrong). Sometimes this policy of gratuitous appeasement fails, however, as was the case in a recent decision, Edwards v. Nicolai, from the New York Appellate Division (First Department).

In Edwards, defendants were husband and wife, and co-owners of Wall Street Chiropractic and Wellness. The husband was head chiropractor, while the wife was the chief operating officer. The husband hired defendant as a "yoga and massage therapist," and was her direct supervisor. According to plaintiff, her relationship with the husband was entirely professional and he "regularly praised" her work performance.

A little more than one year after hiring plaintiff, the husband allegedly "informed Plaintiff that his wife might become jealous of Plaintiff, because Plaintiff was too cute." This apparently proved to be a prescient statement. Approximately four months later, at 1:30 in the morning, plaintiff received a text from the wife, stating that plaintiff was not "welcome  any longer" at the office, that plaintiff should "NOT ever step foot in [the office] again," and that plaintiff should "stay the [expletive] away from [the wife's] husband." A few hours later, at around 8:30 am, plaintiff received a text from the husband notifying her that she was "fired and no longer welcome in [the] office," and that if she called or tried to come back, defendants would call the police. 

Continue reading “New York Court: “Happy Wife, Happy Life” Will Not Shield You From A Wrongful Termination Lawsuit”

Another New York Judge Approves Service Of Process Through Facebook

 by:  Peter J. Gallagher (@pjsgallagher)

On Monday, the Daily News reported on a "landmark" ruling by a Manhattan judge allowing a woman to serve her "elusive husband" with divorce papers via Facebook. The judge order that the divorce papers must be sent to the husband over Facebook "once a week for three consecutive weeks or until acknowledged." According to the article, the husband kept in touch with his wife by phone and through Facebook, but that he had no fixed address and refused to make himself available to be served. After all other conventional methods of service failed — he vacated his last known address in 2011, he had no job, the post office had no forwarding address for him, there was no billing address linked to his prepaid cell phone, and the DMV had no record of him — the judge allowed service through Facebook.

While interesting, this is not actually a landmark decision. Less than one year ago, a Staten Island judge permitted service via Facebook in a similar case. (Obviously, since this took place in my ancestral home, it went unnoticed — the latest proof that Staten Island truly is the "forgotten borough.") In that case, also involving a domestic dispute, a man was allowed to serve his ex-wife with "legal notice that he [did not] want to pay any more child support" via Facebook after more conventional methods of service failed.  The man's ex-wife had moved from her last known address and did not provide any forwarding information to the post office. However, she maintained "an active social media account with Facebook," therefore the judge allowed her to be served through that Facebook account.

In addition, several federal courts have also addressed this issue. For example, in one case, the U.S. District Court for the Southern District of New York held that service via Facebook might not, on its own, comport with due process, but it was acceptable as a supplemental method in conjunction with other, more conventional, methods of service. In a different case, a different judge in the U.S. District Court for the Southern District of New York refused to authorize service via Facebook where the plaintiff could not demonstrate that the Facebook profile that the plaintiff proposed to use for service was in fact maintained by the defendant or that the email address listed on the Facebook profile was accessed by the defendant. Although these cases are among the few to have considered the issue, they appear to describe the approach courts are likely to take when faced with a request to permit service via Facebook — if all other methods are exhausted, or service via Facebook is one of several methods to be employed, and if there is some showing that the individual to be served actually maintains and accesses the Facebook account, then service via Facebook would probably be acceptable.

Another Lesson From A New Jersey Court On The UCC And Standing To Foreclose

by: Peter J. Gallagher (@pjsgallagher)

The running battle between lenders and borrowers over standing to foreclose continues in the Garden State. A recent decision from the Appellate Division — Bank of New York v. Ukpe — is the latest in an ever-growing body of case law addressing this issue from seemingly every conceivable angle. 

The facts in Ukpe will be familiar to anyone who has followed the wave of residential foreclosures in recent years. Defendants applied for a mortgage from Countrywide Home Loans, Inc. (“CHL”). They claimed that they told the broker that they could not afford a monthly payment over $1,000 and were assured by the broker that the monthly payment would not exceed this amount. However, at the closing, they learned that the monthly payment would be almost $1,500 per month. They alleged that the broker told them not to worry because they could refinance the loan a few months after closing. Nonetheless, two years later, after several unsuccessful attempts to refinance the loan, Defendants defaulted. 

Defendants’ note was made "payable to lender," and the mortgage, after it was recorded, was held by Mortgage Electric Recording System ("MERS") as nominee for the lender. Shortly after being recorded, the mortgage was securitized along with other mortgages. As part of this process, several entities entered into a "Pooling and Servicing Agreement" ("PSA"). Under the PSA, CHL was identified as a "seller," CWABS, Inc. was identified as the "depositor" and "master servicer," and the Bank of New York ("BNY") was identified as the "trustee." Under the PSA, the CHL and the other “sellers” transferred the mortgages to CWABS, Inc., which then transferred them to BNY, which held the mortgages for the benefit of the investors in the newly-created security. The PSA also required the original mortgage notes to be endorsed in blank and delivered to BNY.

After Defendants defaulted, BNY filed a foreclosure complaint. In response, Defendants claimed, among other things, that BNY lacked standing to foreclose because it was not a holder in due course. The trial court rejected this claim and the Appellate Division affirmed. In doing so, the Appellate Division provided a crash course in what it means to be a holder in due course.

 

 

Continue reading “Another Lesson From A New Jersey Court On The UCC And Standing To Foreclose”