The Lawletter Vol 35, No 12, August 26, 2011

Mark Rieber, Senior Attorney, National Legal Research Group

The U.S. Supreme Court recently granted certiorari to the U.S. Court of Appeals for the District of Columbia Circuit to address the issues surrounding the Government's use of a global positioning system ("GPS") tracking device on a defendant's motor vehicle.  See United States v. Maynard, 615 F.3d 544 (D.C. Cir.), rehearing en banc denied sub nom. United States v. Jones, 625 F.3d 766 (D.C. Cir. 2010), cert. granted, 2011 WL 1456728 (U.S. June 27, 2011) (Nos. 10‑1259, 10A760).

In Maynard, among other surveillance techniques used by police to investigate the defendant, who was suspected of illegal drug activity, was the covert installation, pursuant to a court order, of a GPS tracking device on the defendant's motor vehicle.  There were technical violations of the court order, however.  The police then used the GPS device to track the defendant's movements 24 hours a day for four weeks.

On appeal following the defendant's drug conviction, the District of Columbia Circuit, disagreeing with three other circuits, held that the use of the GPS device to track the defendant's movements was a search under the Fourth Amendment, stating:

The Lawletter Vol 35 No 12, August 26, 2011

Jim Witt—Senior Attorney, National Legal Research Group

Although a will, whether witnessed or executed as a holographic will without the formality of witnesses, is characterized as a formal legal document, there is a good deal of flexibility as to the form and appearance of the instrument itself.  This point was brought home by the Supreme Court of Georgia in the case of Swain v. Lee, 700 S.E.2d 541 (Ga. 2010), in which Lydia Swain, the goddaughter of the decedent, Elouise Harley Collins, filed a petition to probate two documents as Collins's will.  The decedent's cousin and temporary administrator of the estate, Bobby Eugene Lee, contested the probate of the writings on the ground that as a matter of law, they did not create a valid will.  The probate court found that the writings lacked the requisites of a will or codicil under Georgia law and that the decedent had died intestate.  On the proponent's initial appeal, the superior court granted the contestant's motion for judgment on the pleadings.

In reversing the judgment of the superior court, the Supreme Court of Georgia determined that the record supported the possibility that the writings offered as a will did constitute the decedent's valid will.  The first writing cited by the court was an unwitnessed letter dated June 10, 1999, in which the decedent, Collins, stated that the proponent, Swain, was to have "'everything that's in my name.'"  Id. at 542.  On April 12, 2005, Collins filled in a blank on a form "Last Will and Testament," naming Swain as the executrix of her estate.  Although Collins signed this form before three witnesses, the remaining pages on the will form were left blank, with no disposition of any property being referenced on the form.

In her petition to probate, Swain stated:

"Attached to the last Will and Testament of [Collins], dated April 12, 2005,  is a memorandum of instruction written by Collins dated June 10, 1999, which is to accompany and be an exhibit to the Last Will and Testament."

Id. at 542-43 (court's emphasis).

Swain also argued to the probate court that Collins had kept both the 1999 letter and the 2005 will form together in one envelope and that Collins had taken both of these documents from this envelope and presented them to the witnesses who signed the will form at that time.

The court observed that although the unwitnessed 1999 letter written by Collins and the partially executed 2005 will form, by themselves, could not create valid wills, see Ga. Code Ann. §§ 53‑4‑20(b) (will must be attested and subscribed in presence of two witnesses), 53‑4‑3 (will must convey an interest accruing at death), and that although the 2005 document did not expressly refer to the 1999 letter so as to revive or republish the 1999 letter as a valid will, this did not end the court's inquiry.  The court quoted from Georgia Code section 53-4-3, "Test to determine whether instrument is a will":

"To determine whether an instrument is a will, the test is the intention of the maker to be gathered from the whole instrument, read in light of the surrounding circumstances."

700 S.E.2d at 543 (court's emphasis).

The court further stated:

In this regard, a will need not "be written on one continuous sheet of paper, [nor need the separate papers that constitute a will] necessarily be tied and fastened together with tape and a waxen or other seal."  Jones v. Habersham, 63 Ga. 146, 157 (1879).  Indeed, "there is no known rule as to any precise manner in which [the will] papers shall be bound or attached together, or requiring a will to be written all on one sheet."  Id.

The Lawletter Vol 35 No 12, August 26, 2011

Tim Snider, Senior Attorney, National Legal Research Group

In In re Okosisi, No. BK-S-09-27113-BAM, 2011 WL 2292148 (Bankr. D. Nev. May 16, 2011), the debtors found themselves in a familiar dilemma.  At the time of filing, their principal residence had a fair market value of $342,000.  This property was encumbered by a first-priority mortgage in favor of Citimortgage for $383,000 and a second-priority mortgage in favor of Nevada State Bank for $302,125.  Citimortgage's claim was thus undersecured, and Nevada State Bank's claim was wholly unsecured.  The debtors had previously been discharged in Chapter 7, but within two years they filed a Chapter 13 petition to reschedule some secured debts and tax claims.  They were, of course, ineligible for a discharge because of the Chapter 7 discharge.  Cases of this kind are sometimes referred to as "Chapter 20" cases.

Outside of bankruptcy, if a creditor has a valid security interest, regardless of the collateral's value, it may be thought of as a secured creditor.  In bankruptcy, a creditor is a secured creditor only if its claim is so classified.  If the claim is not so classified, the once‑secured creditor will have an unsecured claim and will thus be an unsecured creditor for purposes of the bankruptcy case.  Thus, while Citimortgage's claim was partially secured, Nevada State Bank's claim was wholly unsecured, at least for bankruptcy purposes.

When the collateral securing the debt is the debtor's principal residence, 11 U.S.C.  § 1322(b)(2) prohibits the debtor from modifying the rights of a security holder.  In this case, however, because Nevada State Bank's claim was wholly unsecured, its lien could be "stripped off," leaving it with an unsecured claim, notwithstanding the antimodification provision, § 1322(b)(2).  Virtually all courts to have considered the issue have concluded that this outcome is mandated by Nobelman v. American Savings Bank, 508 U.S. 324 (1993).

For those debtors who successfully confirm and complete a Chapter 13 plan, the Chapter 13 discharge operates as a permanent injunction against the collection of debts to the extent of the debtor's personal liability on the debt. 11 U.S.C. § 524.  It is important to note, however, that just because a debtor receives a discharge in bankruptcy, the debt does not simply vanish. The debt remains, but personal liability on the debt has been removed.  Liens on property of the Chapter 13 bankruptcy estate, if not properly addressed through the Chapter 13 plan, remain on the encumbered property, and once the automatic stay is lifted by entry of the discharge, the creditor is free to exercise any nonbankruptcy collection remedies attributable to its valid security interest in the property.  In the normal Chapter 13 case, when the debtor avoids the lien through a confirmed plan and also receives a discharge after having completed all plan payments, the debt also remains.  Both the personal liability for the debt and the lien allowing the creditor to proceed against the property have been removed, making the debt uncollectible.

The Lawletter, Vol 35 No 11, July 29, 2011

John Stone, Senior Attorney, National Legal Research Group

The unusual legal term "cat's paw" apparently originated in Shager v. Upjohn Co., 913 F.2d 398 (7th Cir. 1990).  "Cat's paw" describes a theory of the liability of an employer for a discriminatory action that stems from the prohibited bias of a subordinate employee who set up but did not actually take the action complained of.  In reversing a summary judgment for the employer in this age discrimination case, the court described the theory, as to which there were material factual issues to be decided, as follows:

Lehnst [a supervisor] did not fire Shager [plaintiff]; the Career Path Committee did.  If it did so for reasons untainted by any prejudice of Lehnst's against older workers, the causal link between that prejudice and Shager's discharge is severed, and Shager cannot maintain this suit even if Asgrow [employer] is fully liable for Lehnst's wrongdoing. . . .  But if Shager's evidence is believed, as in the present posture of the case it must be, the committee's decision to fire him was tainted by Lehnst's prejudice.  Lehnst not only set up Shager to fail by assigning him an unpromising territory but influenced the committee's deliberations by portraying Shager's performance to the committee in the worst possible light.  Lehnst's influence may well have been decisive.  The committee's deliberations on the question whether to fire Shager were brief, perhaps perfunctory; no member who was deposed could remember having considered the issue.  A committee of this sort, even if it is not just a liability shield invented by lawyers, is apt to defer to the judgment of the man on the spot.  Lehnst was the district manager; he presented plausible evidence that one of his sales representatives should be discharged; the committee was not conversant with the possible age animus that may have motivated Lehnst's recommendation.  If it acted as the conduit of Lehnst's prejudiceChis cat's‑pawCthe innocence of its members would not spare the company from liability.  For it would then be a case where Lehnst, acting within (even if at the same time abusing) his authority as district manager to evaluate and make recommendations concerning his subordinates, had procured Shager's discharge because of his age.  Lehnst would have violated the statute, and his violation would be imputed to Asgrow.

Id. at 405 (emphasis added) (citation omitted); see also EEOC v. BCI Coca‑Cola Bottling Co. of L.A., 450 F.3d 476, 484 (10th Cir. 2006) ("The 'cat's paw' doctrine derives its name from a fable . . .  in which a monkey convinces an unwitting cat to pull chestnuts from a hot fire. As the cat scoops the chestnuts from the fire one by one, burning his paw in the process, the monkey eagerly gobbles them up, leaving none left for the cat.  Today the term 'cat's‑paw' refers to one used by another to accomplish his purposes.  In the employment discrimination context, 'cat's paw' refers to a situation in which a biased subordinate, who lacks decisionmaking power, uses the formal decisionmaker as a dupe in a deliberate scheme to trigger a discriminatory employment action." (citations omitted) (internal quotation marks omitted)).

The Lawletter Vol 35 No 11, July 29, 2011

Scott Meacham, Senior Attorney, National Legal Research Group

It is well known that an express grant of permission will defeat a claim for adverse possession.  If a junkyard owner, for example, gets permission to store old tires on a neighboring property, then his use of that property will not ripen into full title no matter how long it continues.

But when no one gives clear permission, should permission be presumed?  Or should an apparently adverse use be presumed to constitute a trespass instead?  These are the questions the Washington Court of Appeals addressed recently in the case of McMilian v. King County, No. 64868-3-I, 2011 WL 1631853 (Wash. Ct. App. May 2, 2011).

The background of McMilian lies outside the context of an adverse possession dispute.  Rather, the case involved a zoning controversy and the possibility that a grandfathered nonconforming use could exist on land that the nonconforming user did not own.

Prior to 1958, the owner of the northernmost of a pair of adjoining parcels had begun operating a wrecking yard on his property.  Although the County amended its zoning ordinance in 1958 to prohibit such uses in a residential zone, the wrecking yard on the northern parcel remained a valid nonconforming use.

The northern owner did not limit his industry to his own land, however.  Over a period of several decades, he stored wrecked cars, junk auto parts, and tires on the southern parcel.  The northern owner apparently did not seek permission to do this, and the southern owner never granted anyone express permission to use his land.  It is easy to see why the county hearing examiner would see this as a case of trespass.

In 2002, the plaintiff purchased both the northern and southern parcels.  He continued the wrecking yard operation, and in 2005 he cleared the remainder of the southern parcel and began storing vehicles there.  The County cited him in 2007 for code violations on the southern parcel, including the operation of a wrecking business in a residential zone.

On administrative appeal, the hearing examiner determined that the prior owner of the northern parcel had neither obtained permission nor asserted an adverse possession claim and that he must therefore have been a trespasser.  Since a trespasser could not establish a valid nonconforming use, the junkyard on the southern parcel would be prohibited.  The county superior court reversed, and the County appealed.