Archive for May, 2011


With the recent revelations involving both Dominique Strauss-Kahn and Arnold Schwarzenegger, the issue of victim and child confidentiality has been thrust front and center along with the broadere issue of journalistic ethics.  Gone are the days of integrity in journalism while a new era of getting the scoop at all costs.

By now, you have likely seen the images of Arnold Schwarzenegger’s illegitimate son but you likely have not seen the images of Dominique Strauss-Kahn’s alleged sexual assault victim.  While there have been leaks of Strauss-Kahn’s alleged victim’s face in France, for the most part the American media has refrained from releasing her image.  Yet, Arnold Schwarzenegger’s son’s image has been published all over the internet and by traditional media outlets.  Why?

In the case of Schwarzenegger’s son, what appears to have happened is that the traditional media outlets waited until their internet cousins published photos.  When that happened, the traditional outlets decided that the image was already out there so they published the boy’s photograph.  It was apparent that anyone who knew the mother could deduce the boy’s identity but there was a time when the traditional media outlets would never compromise an innocent child simply to achieve a “we were there to” position in the story.

In the case of Dominique Strauss-Kahn’s alleged victim, a simple Google search reveals that her image has for the most part been concealed on the internet.  Apparently, the new media outlets continue to adhere to the old policy of not publishing a sexual assault victim’s photograph.  Due in part to this, traditional media outlets have not been scooped on that information and have not compromised their ethics but it is only a matter of time.

In a world more and more dominated by the internet, the old media outlets have decided that the only way to stay competitive with the internet is to embrace their lack of journalistic ethics.  This includes more and more stories of blatantly ignoring the obligation to fact check and also includes the compromising of the old idea of keeping the identities of innocent children confidential.

For more information on what has happened to Dominique Strauss-Kahn’s alleged victim since reporting him for sexual assault you can read this article:

For more information on the hurdles faced by the son Arnold Schwarzenegger had with his housekeeper read this article:

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Animal Care v. People Care

Most of us are familiar with the current controversy and rhetoric surrounding health care reform. Critics call it socialism, or the more euphemistic “Obamacare,” while supporters prefer to use terms like “humanitarianism” and “health care revolution.” Both sides are persuasive in their arguments, but there may soon be a real-life case study to bring into the argument on the merits of public versus private healthcare.

The Sacramento Bee reported on Wednesday that the private Sacramento SPCA announced a potential merger with Sacramento city and county animal shelters by early next year. Under such a merger, the three entities would “leverage scarce resources and align programs” to the benefit of the 45,000 animals inducted into these shelters each year. This would alleviate economic strain on the city by shifting responsibility for funding the shelters to the private organization. Effectively, the merger would replace the current public health care system for animals with a new private health care system, complete with optional and variably-priced pet health insurance offered through the SPCA.

The SPCA’s Chief Executive Officer Rick Johnson stated that the merger “will improve the care homeless animals receive while in Sacramento shelters …. and will serve our community’s animals best.” (See Sacramento Bee). The merger will also allegedly “dramatically enhance” animal care, while simultaneously leading to a “leaner and more nimble” county budget.

Few critics have surfaced so far to decry the evils of private health care for our city’s animals, but the merger could provide interesting fuel for the human health care debate. If the privatization of our city’s animal shelters is successful in reforming the expensive animal health care field, what lessons can be drawn to improve our national private health care system? If it fails and we discover the long-standing public funding for animal care was, for all its downsides, the better system, might that encourage an optimistic view of so-called Obamacare?

Most people, supporters of private health care included, agree that at least some aspects of our current national health care system are broken. It remains to be seen, however, if the privatization of animal health care will revolutionize the system, or if we will revert to a past of doggie death panels and high county expenditures on animal control.

If you are interested in reading the Sacramento Bee’s story about the merger, click here:

And if you are interested in supporting the SPCA, go out and participate in the Doggie Dash, and event put on by the SPCA.  It is on June 4, 2011.  You can sign up here:

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From a Lender’s Perspective, Is A Loan Modification The Best Choice?

Recently it has been reported that foreclosure numbers are down in Sacramento. This may be due to the fact that many lending institutions are choosing to modify loans that they before would have foreclosed upon.  Typically, a paying customer is better than no customer at all.  However, when modifying a loan, a lender must be concerned with maintaining the priority of the recorded deed over other encumbrances on the collateral property.

The principals of priority that are applicable to each type of modification vary depending on the specific type of modification – extension of time, change in interest rate, advance of further funds (construction loans), adjustment to principal, etc.  A modification will affect priority if the senior note alteration is considered a material change when it prejudices the position of the junior lien holder.  Essentially, the senior loan affects the junior loan, thus threatening its priority, when a modification of the senior loan increases the risk of default or makes protection of the junior lienor’s position more burdensome. Such situations can cause a senior lien holder to lose priority subsequent to a modification which is considered to be material.

Generally a modification of time to a promissory note (extension) is not considered a material alteration.  In fact, it is considered beneficial to a junior lien holder in that it protects the security of the junior lien as well. 

However, if the result of the modification to the senior note results in an extension of time past the statute of limitation when the junior lien could claim to hold its interests free of the senior lien, the extension is not binding upon the junior creditor. Moreover, note priority may be affected in such a situation if it can be found that the extension burdens the junior lienor by effectively denying a defense to the junior lienor by precluding the junior’s ability to bring a law suit. The statute of limitation pertinent to this issue is codified under C.C.P. § 337(1), which allows 4 years to bring an action on breach of written contract – i.e., a promissory note.

There are alternative legal theories that dictate by the very nature of being a junior lien holder, said junior lien holder inherently assumes the risk of the modification of a senior lien holder. A senior lienor owes no express or implied contractual duties to a party who extends credit in a junior position. In fact, some courts have held that establishing a rule that protects junior creditors from a material change in a senior loan would upset the California policy of “first in time, first in right” system of lien priority. Friery v. Sutter Butte Savings Bank, 61 Cal. App. 4th 869, 877-879 (1998).  Moreover, the Friery case eluded that even a material change in a senior lien holder’s promissory note will not affect the priority if either a subordination agreement or “special relationship” between the senior and junior lien holder exist. Friery at 877-879.

It is ultimately a lender’s choice if modification or foreclosure provides for a better fiscal recovery of a bad debt.  However, when a lender chooses the former, the lender must show special consideration to any potential affects to any existing junior lien holders.


See here for more real estate legal advice.

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Frivolous Lawsuits and Malicious Prosecution

“Frivolous”, “meritless”, “worthless”, “BS”, the list goes on and on.  People often use these terms to describe a lawsuit.  But what exactly does a “frivolous” lawsuit mean, and what are the implications?  In California a frivolous lawsuit can have various meanings.  For example, in the employment arena, an employer sued by an employee can sometimes recover attorney’s fees for a frivolous lawsuit.

The term “frivolous lawsuit” is most commonly found in the context of a malicious prosecution action.   Malicious prosecution is an action brought after someone sues you in a prior lawsuit that has no probable cause.  Which begs the next question; what is “probable cause”?  In order to have probable cause (for bringing a lawsuit) you must have “an honest belief, founded on facts sufficiently strong to justify that belief, that grounds exist for the proceeding.”  In other words, you must show that not only do facts exist for bringing the lawsuit but also that the legal theory asserted is valid.  Legally the standard is whether any reasonable attorney would have thought the claim or claims were tenable.

You must also show that the lawsuit you claim was frivolous was ultimately brought to termination in your favor, you suffered a legally recognizable injury, and that the lawsuit was initiated with “malice.”  In this context malice means actual ill will or some improper motive or purpose.  In other words, you must show something more than simple negligence.

A malicious prosecution lawsuit seeks to recover all attorney’s fees and costs incurred in defending against the meritless lawsuit, as well as possible compensation for emotional distress, mental suffering, and impairment to reputation.   Malicious prosecution lawsuits can be filed against the party who wrongfully sued you, as well as that party’s attorney in certain situations such as where the attorney clearly discovers the lawsuit has no merit but continues to bring it.  On the other hand, the attorney is generally allowed to rely upon the facts given to them by their client, even if they are false, unless the attorney knows the facts given are false.  Because of this it can be helpful to “set up” a malicious prosecution lawsuit by repeatedly demonstrating to opposing counsel, in writing, the lack of merit in their client’s allegations.

“Well great!” most people say, sign me up, that lawsuit I was in six months ago was garbage, “let’s sue!”  However, malicious prosecution lawsuits are complicated and often disfavored by courts.  Courts generally want people to be able to seek redress through the judicial system and not be punished for doing so, as well to be able to test gray areas of the law, and/or pursue novel emerging legal theories.  Moreover, “malice” can be hard to show as one’s motives for filing a lawsuit are usually hidden.  On the other hand, where a lawsuit clearly has no merit and you ultimately prevail either by dispositive motion, dismissal, or by going all the way to trial, attorney’s fees and costs can be substantial.  Thus, a suit seeking recovery of these fees may be valid and warranted.


Need advice on a potential lawsuit?

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