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LEGAL TERMS & FAQ 2018-07-27T05:30:00+00:00

LEGAL TERMS AND FREQUENTLY ASKED QUESTIONS (“FAQ”)

The information provided in the FAQ is provided for informational purposes only and does not constitute legal advice. The information contained is not intended to be a complete recitation of the law, and is provided only as general information in an area—it may not contain all nuances of the law, and is not guaranteed to be correct or complete.  Anand Law, PC expressly disclaims all liability in respect to actions taken or not taken based on the information contained in the FAQ.  Please review our complete Terms of Use.

ACCIDENT & INJURY FAQ

In addition to recovery for economic damages, a party injured due to the negligence of another is entitled to recover noneconomic losses for pain, suffering, inconvenience, physical impairment, disfigurement and other nonpecuniary damage.

These damages are also known as emotional distress damages, and include psychological hardships, loss of ability to engage in life activities, permanent scars, embarrassment, humiliation, and hardship.

The insurance companies fight hard to limit your recovery and routinely claim that pain and suffering is made up.  ANAND LAW PC will ensure that all forms of pain & suffering damages are investigated and the recovery you receive is maximized.  

California Proposition 213 (“Prop 213”) was heavily lobbied for by the insurance industry and passed in 1996.  Prop 213 prevents you from recovering any damages for pain and suffering under 4 general circumstances:

  1. You did not have insurance and were in your vehicle;
  2. You were the driver of someone else’s vehicle which was not insured;
  3. You were convicted of a DUI stemming from the accident;
  4. You were in the convicted of a felony, and injuries stem in part from the commission of this felony.

Exceptions to these categories include:

  1. You were the driver of someone else’s vehicle that did not have insurance, but you had your own insurance that covered you while driving other vehicles;
  2. You were the driver of someone else’s vehicle that did not have insurance, but that vehicle was owned by your employer;
  3. You got into an accident on private property.

If Prop 213 applies, you are still entitled to economic damages, which include medical bill and lost wages.  However, you will be prohibited from any recovery for noneconomic damages, which include pain and suffering/emotional distress.

ANAND LAW PC will thoroughly investigate the insurance policies that may be applicable, the exceptions to Prop 213 (including those listed above), and ensure that no money is left on the table. The insurance companies have fought hard to prevent you from recovering what you deserve.  We fight hard to combat this practice.

Call us today – there is no obligation on your part – if we handle your matter, you will have the peace of mind knowing that we will obtain every penny possible for you.

BANKRUPTCY & REORGANIZATION FAQ
An Adversary Proceeding (“AP”) is a full federal lawsuit, that is connected to a bankruptcy case, and in other ways similar to a normal lawsuit with discovery, motions and trial.   A Motion may be brought to request certain relief, and in other instances an AP is required.  Rule 7001 Federal Rules of Bankruptcy Procedure (“FRBP”) lists several categories which require an AP and can’t be brought by motion, and then there are exceptions to these categories.  Anand Law handles APs on behalf of  both Plaintiffs and Defendants, including but not limited to, suits related to fraud/misrepresentation, violations of lending laws, wrongful foreclosure, breach of fiduciary duty, and willful and malicious injury. 
Domestic support obligations, in general, are nondischargeable. This includes any interest that has accrued, or is accruing on the debt.

However, the burden of proof is on the creditor spouse to show that the nature of the obligation is for “support.” The question of whether or not an obligation is one for support, and thus nondischargeable, is a question of federal bankruptcy law. However, Bankruptcy Courts may look to state law to determine whether or not the award was based on need.

Yes.  In general, in a Chapter 11, you can remove fully unsecured liens from properties that are not your primary residence.  Also, generally, you can ‘cram down’ undersecured liens from properties that are not your primary residence.  ‘Cramming down’ refers to reducing the amount of the lien to the market value (i.e. removing the portion of the lien that is unsecured).  Liens that may be removed or crammed down include mortgage, HELOC (home equity line of credit), HOA (Homeowners’ Association), and judgment.
Yes.  In general, in a Chapter 13, you can remove fully unsecured liens from your primary residence .  Unsecured liens that may be removed include mortgage, HELOC (home equity line of credit), HOA (Homeowners’ Association), and judgment.
Yes.  However, Court approval may be required, disclosure to the Court is always required, and depending on a variety of factors, any money earned may need to be paid to creditors.

In order to be eligible to file for Chapter 13 Bankruptcy, the filing individual(s) must owe less than $1,184,200 in liquidated, noncontingent secured debts, and less than $394,725 in liquidated, noncontingent unsecured debts.  11 U.S.C. §109(e).  The debt limitations are adjusted every 3 years, with the next adjustment set to occur on April 1, 2019.  11 U.S.C. §104(b).

Secured debts include home mortgages, judgment liens, and car loans.  Unsecured debts include credit card bills, medical bills, and personal loans (if a personal loan is secured by property, it will count towards the secured debt limitations).

It is important to keep in mind that a Chapter 13 debtor (the party filing, including a spouse in a joint petition) must meet these debt eligibility limits as of the petition filing date.  If the debts are lowered after the filing date, this will not apply retroactively to make a debtor qualify if they did not qualify at the time of filing.  See, In re Smith, 419 B.R. 826, 829 (Bankr. C.D. Cal. 2009).  See also, Scovis v. Henrichsen, 249 F.3d 975, 981 (9th Cir. 2001) (Eligibility to be a Chapter 13 debtor is determined as of the petition date).

See also, CHAPTER 13 REAL PROPERTY VALUATIONS

Real property valuations are used in Chapter 13 bankruptcy proceedings to determine if liens are unsecured or secured, and thus whether or not they can be removed.  Valuations are also used to determine if the debtor (the filing party) falls within the debt eligibility limits—if a lien is fully unsecured, it will go toward the unsecured debt limitation, and if it is fully secured or partially secured, it will go toward the secured debt limitation limit.

Property values change constantly, making a critical question, when does the court value the property for the purposes stated above?  Unfortunately, due to a lack of clarity in the bankruptcy code, the time for determining when a property is valued varies by Judge.

For example:

  • In re Abdelgadir, 455 B.R. 896 (9th Cir. BAP 2011). The United States Bankruptcy Appellate Panel of the Ninth Circuit determined that the valuation date for a secured claim was the petition date.
  • In re Crain, 243 B.R. 75 (Bankr. C.D. Cal. 1999).  Judge Vincent P. Zurzolo of the Central District of California stated: “I conclude that the appropriate date of valuation for the Subject Property is the “effective date of the plan” or ten days after entry of the order confirming the plan, provided no timely appeal has been made.”
  • Judge Neil W. Bason of the Central District of California has previously had a “policy of using current value” or in other words of valuing the property as of the current date (the date of the order being requested).
‘Cramming down’ refers to reducing the amount of the lien to the market value (i.e. removing the portion of the lien that is unsecured).  Cramming down of liens can be done through Chapter 11 on properties that are not a primary residence.  Liens that may be crammed down include mortgage, HELOC (home equity line of credit), HOA (Homeowners’ Association), and judgment.

In a Chapter 13 bankruptcy, you can remove fully unsecured liens from your primary residence (i.e. the balance owed on higher-priority liens must fully exceed the market value of the property).  This includes junior mortgages (including HELOC), HOA, tax, and judgment liens.

Rule 3007 of the Federal Rules of Bankruptcy Procedure (“FRBP”) requires an objection to be “filed and served at least 30 days before any scheduled hearing on the objection or any deadline for the claimant to request a hearing.” In addition to the FRBP, the Local Rules must also be complied with.  The Local Bankruptcy Rules (LBR) also require 30 days notice.  See LBR 3007-1(b).  Each Judge also has their own so-called “Local Local Rules,” and compliance with these is also required.

An objection may be filed as a Motion or an Adversary Proceeding (“AP”), but compliance with other rules is required, and in certain instances an AP is required.  One such instance is “a proceeding to determine the validity, priority, or extent of a lien or other interest in property” (see FRBP 7001(2)).  

‘Cramming down’ refers to reducing the amount of the lien to the market value (i.e. removing the portion of the lien that is unsecured).  Liens that may be crammed down include mortgage, HELOC (home equity line of credit), HOA (Homeowners’ Association), and judgment.

This depends on a variety of factors, including what your score currently is, what chapter you file for, and if you successfully complete your bankruptcy.  While filing for bankruptcy may lower a credit score, it will not necessarily do so. In fact, if you already have a low credit score, filing can actually increase your score, especially after successful completion of a Chapter 13 or Chapter 11 bankruptcy plan in which you pay off some of your debt. Chapter 7 bankruptcy can also, in certain instances, increase a low credit score, after successful discharge.  It is also important to know that you can always re-build your credit after bankruptcy, and ANAND LAW can guide you on how to do so.

In order to understand the unpredictability of how bankruptcy may affect your credit score, it is helpful to understand how credit scores are calculated.

CALCULATION OF YOUR CREDIT SCORE

Credit bureaus (also known as “credit reporting agencies”) act an intermediary between consumers, businesses and lenders.  The credit bureaus collect data from various sources, and then use this data to create your credit score.  The bureaus use third-party companies, each who employ their own methodology, to calculate these scores.

THE MAJOR CREDIT BUREAUS AND SCORING AGENCIES

There are dozens of credit reporting agencies, but the three national agencies that a majority of lenders and businesses use are Experian, Equifax, and Transunion.  Similarly, there are many credit scoring companies, but the two most common are FICO and VantageScore.  Experian Equifax and Transunion came together to create VantageScore, and all continue to use them to generate credit scores.

The credit scores are based on how the various data collected interacts with each other.  There are approximately 220 million consumers that credit reports have been created for, and approximately 36 billion pieces of credit data utilized in credit reports every year to create the credit scores (source: VantageScore).

The exact methodology used is complicated and uncertain, but factors include: payment history with lenders, banks, and credit card companies; amounts owed; length of delinquencies; length of accounts in good standing; and, types of credit being used.  Scores from each bureau may differ for a variety of reasons, including the timing of the data provided.

IMPROVING YOUR CREDIT SCORE

Regardless of the credit bureau (e.g., Experian, Equifax, or Transunion), or the scoring agency (e.g., FICO or VantageScore), you can improve your credit score, no matter how bad it is, and no matter the reason for it being low (whether due to bad payment history, repossessions, judgments, liens, foreclosure, or other).  In general, you can improve your credit score by using credit (e.g., through a credit card, line of credit, or loan), and paying bank all use of that credit on time.  The longer you consistently pay on time, and the higher the amount of credit being used, the better your credit score will be.  You can re-establish your credit even after repossessions, judgments, liens, or foreclosure by maintaining a pattern of using credit and repaying the lender timely.  There are lenders willing to extend credit to nearly anyone, regardless of their score, and even lenders that extend credit to individuals in active bankruptcy proceedings.  However, it is important to note that, in general, the lower your credit score, the more it will cost to obtain the credit (i.e., the higher interest rate you will receive)–this makes it even more critical that you pay on time.  The bottom line is that it is not hopeless–with some patience and organization to manage your finances, you can re-establish and build your credit score.

If due to lower income or other unforeseen circumstances that can be documented, the plan can be amended. If the plan is less than 60 months, it can be extended to allow for missed payments to be made up.
Typically, debtors in a Chapter 7 bankruptcy are able to keep property that is exempt, fully encumbered with debt, and property that has no value or cannot be sold.

Exempt property is property (up to a certain value) that a creditor cannot take. California has two sets of exemptions and the Bankruptcy Code also includes a set.

Fully encumbered property is property that has liens or mortgages which are equal or greater to the value of the property. The trustee does not want this property because they will not make any money after selling the property and paying off the liens. You may keep this property as long as you are current on payments. If not, the creditor will take the property.

The fact that you have filed a bankruptcy will not prevent you from getting credit. While you should expect getting credit to be more difficult and expensive, there are actually many lenders that target people recently discharged from a bankruptcy since they have no other debt, are ready to establish their credit and they can’t file for bankruptcy any time soon.
BUSINESS LAW FAQ
A COOPERATIVE is an organization of individuals or businesses (“members”) that provides services that the members need. The goal of a cooperative is to provide services to its own members at a lower cost, and more efficiently, than if third parties were used. Unlike a corporation, members of a cooperative share equal control and ownership (“one member, one vote”). Also unlike a corporation, a member’s interest in a cooperative is not saleable (however, an interest may be transferable, if allowed under the cooperatives articles of incorporation or bylaws).

In California, the Consumer Cooperative Corporation Law, enacted in 1982, regulates entities which operate as cooperatives.  However, cooperatives may be organized as corporations, limited liability corporations (LLC), or even remain unregistered with the State.

TYPES OF COOPERATIVES

The U.S. Tax Court has divided cooperatives into two categories: consumer and producer. In consumer cooperatives, the members are consumers, and the cooperative offers products to benefit the members. In producer cooperatives, the members are producers, and the product the members make is processed or marketed by the cooperative.

INDUSTRIES

Cooperatives exist in many industries, including agricultural (e.g. Sunkist, Blue Diamond, Sun-Maid); utility (e.g. Palo Alto Park Mutual Water Company, Central Florida Electric Cooperative); housing; consumer goods (e.g. REI, ACE Hardware); education. Cooperatives can be established in nearly any industry, for any purpose, so long as they are organized and conduct business activities primarily for the benefit of its members, and not to make a profit.

A LIQUIDATED DAMAGES CLAUSE in a contract specifies an amount of damages that party is entitled to for a particular breach of that agreement. The purpose is to streamline, or even deter litigation altogether by setting a fixed amount for the breach. They are very useful in eliminating unpredictability, and ultimately costs. However, there are several rules that must be followed, or the clause will be invalidated by a Court.

First, the liquidated damages cannot be a penalty—the amount specified must be reasonable under the circumstances, and cannot be “designed to substantially exceed the damages suffered, and…to serve as a threat to compel compliance through the imposition of charges bearing little or no relationship to the amount of actual loss.” Utility Consumers’ Action Network, Inc. v. AT&T Broadband, 135 Cal. App. 4th 1023, 1029 (2006); Cal. Civ. Code § 1671(b). A guiding principle is that any number picked cannot be arbitrary, and instead must be based on a reasonable attempt at determining a fair amount of compensation for the breach.

There are further rules if the clause is contained in a contract for the purchase or rental of personal property; a service used primarily for personal, family, or household purposes; or a residential lease. In those cases, a liquidated damages clause is allowed only when “it would be impracticable or extremely difficult to fix the actual damage.” Cal. Civ. Code § 1671(c) and (d).

Every situation is different, and should be evaluated by a qualified attorney. After all, if the clause unenforceable, it won’t save time, and may even ultimately cost more. It is always better to prevent problems before they occur, rather than waiting, and a well-crafted liquidated damages clause can be very effective in doing so.

COMMERCIAL REAL ESTATE TRANSACTIONS LAW FAQ

When real estate taxes, insurance, and operating expenses (sometimes referred to as Common Area Maintenance, or CAM, charges) are passed on to tenants, the amount passed on is based on the increase in these expenses as compared to the Base Year (the initial rent already takes into account these charges). 
Organization of building owners and managers, engaged in lobbying and producing publications, including the BOMA standards.
A Triple Net Lease passes on to tenants a portion of the (1) Real estate taxes; (2) Insurance; and, (3) Operating Expenses (sometimes referred to as Common Area Maintenance, or CAM, charges, but often include maintenance outside of just “common areas.”  Other variations are Double Net (typically no operating expenses are passed through), and a Gross Lease.

Pass-throughs may be assessed at different times (per the lease), and often commercial leases will allow a landlord to retroactively apply assessed charges.  Sometimes a landlord will not assess any charges for years, but then choose to.  Negotiating the exact provisions is critical to predicting expenses and running a successful operation.  The extent of rights to audit is also a negotiable and important issue.

An Estoppel Certificate is a document typically used in performing due diligence prior to the purchase of tenant-occupied property.  The purpose is for a lender and purchaser to have written confirmation from tenants of certain terms.  Important amongst these are: the rental amount; security deposit; duration of lease; and, as discussed further below, a “subordination” clause.

The subordination clause is used to confirm that the tenants have agreed, in their lease, that their interest is subordinate to future mortgages.  Without such confirmation, the tenants’ leases have priority over mortgages that are subsequently obtained.  Furthermore, only a tenant whose interest is subordinate to the mortgage can be evicted.  A purchaser (and their lender) may be stuck with tenants for an indefinite period without the ability to earn market rental values.  A tenant may be locked in for years, and potentially even forever—courts have upheld provisions giving the tenant the right to perpetual renewal of leases.

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Refers to the buildout a landlord will deliver.  a Grey Box includes the bare minimum: e.g. just walls,  no HVAC, no wiring.  A Vanilla Box may have: electrical wiring, flooring, dropped ceiling, HVAC and air ducts.  What the Landlord has agreed to buildout is critical.  Detailed plans and specifications are ideal.
A LIQUIDATED DAMAGES CLAUSE in a contract specifies an amount of damages that party is entitled to for a particular breach of that agreement. The purpose is to streamline, or even deter litigation altogether by setting a fixed amount for the breach. They are very useful in eliminating unpredictability, and ultimately costs. However, there are several rules that must be followed, or the clause will be invalidated by a Court.

First, the liquidated damages cannot be a penalty—the amount specified must be reasonable under the circumstances, and cannot be “designed to substantially exceed the damages suffered, and…to serve as a threat to compel compliance through the imposition of charges bearing little or no relationship to the amount of actual loss.” Utility Consumers’ Action Network, Inc. v. AT&T Broadband, 135 Cal. App. 4th 1023, 1029 (2006); Cal. Civ. Code § 1671(b). A guiding principle is that any number picked cannot be arbitrary, and instead must be based on a reasonable attempt at determining a fair amount of compensation for the breach.

There are further rules if the clause is contained in a contract for the purchase or rental of personal property; a service used primarily for personal, family, or household purposes; or a residential lease. In those cases, a liquidated damages clause is allowed only when “it would be impracticable or extremely difficult to fix the actual damage.” Cal. Civ. Code § 1671(c) and (d).

Every situation is different, and should be evaluated by a qualified attorney. After all, if the clause unenforceable, it won’t save time, and may even ultimately cost more. It is always better to prevent problems before they occur, rather than waiting, and a well-crafted liquidated damages clause can be very effective in doing so.

CONSUMER & PRIVACY LAW FAQ

Credit bureaus (also known as “credit reporting agencies”) act an intermediary between consumers, businesses and lenders.  The credit bureaus collect data from various sources, and then use this data to create your credit score.  The bureaus use third-party companies, each who employ their own methodology, to calculate these scores.

THE MAJOR CREDIT BUREAUS AND SCORING AGENCIES

There are dozens of credit reporting agencies, but the three national agencies that a majority of lenders and businesses use are Experian, Equifax, and Transunion.  Similarly, there are many credit scoring companies, but the two most common are FICO and VantageScore.  Experian Equifax and Transunion came together to create VantageScore, and all continue to use them to generate credit scores.

The credit scores are based on how the various data collected interacts with each other.  There are approximately 220 million consumers that credit reports have been created for, and approximately 36 billion pieces of credit data utilized in credit reports every year to create the credit scores (source: VantageScore).

The exact methodology used is complicated and uncertain, but factors include: payment history with lenders, banks, and credit card companies; amounts owed; length of delinquencies; length of accounts in good standing; and, types of credit being used.  Scores from each bureau may differ for a variety of reasons, including the timing of the data provided.

IMPROVING YOUR CREDIT SCORE

Regardless of the credit bureau (e.g., Experian, Equifax, or Transunion), or the scoring agency (e.g., FICO or VantageScore), you can improve your credit score, no matter how bad it is, and no matter the reason for it being low (whether due to bad payment history, repossessions, judgments, liens, foreclosure, or other).  In general, you can improve your credit score by using credit (e.g., through a credit card, line of credit, or loan), and paying bank all use of that credit on time.  The longer you consistently pay on time, and the higher the amount of credit being used, the better your credit score will be.  You can re-establish your credit even after repossessions, judgments, liens, or foreclosure by maintaining a pattern of using credit and repaying the lender timely.  There are lenders willing to extend credit to nearly anyone, regardless of their score, and even lenders that extend credit to individuals in active bankruptcy proceedings.  However, it is important to note that, in general, the lower your credit score, the more it will cost to obtain the credit (i.e., the higher interest rate you will receive)–this makes it even more critical that you pay on time.  The bottom line is that it is not hopeless–with some patience and organization to manage your finances, you can re-establish and build your credit score.

ENTERTAINMENT, MEDIA & TECH / INTELLECTUAL PROPERTY (IP) LAW FAQ

ASCAP / BMI / SESAC (American Society of Composers, Authors, and Publishers / Broadcast Music, Inc. / SESAC). The 3 U.S. “public performance organizations” (PROs). The PROs collect royalties on behalf of copyright owners of musical compositions for the public performance of their works. This includes the public performance of musical compositions on terrestrial radio (i.e., traditional AM/FM), and on digital radio (e.g., Pandora, iTunes, Spotify); and, in stores, amusement parks, malls, sports arenas, and concerts. A public performance royalty is owed to copyright owners when played over speakers, or performed live (if performed as a cover, a mechanical license is also needed).

The PROs distribute royalties to the copyright owners of the musical composition, typically the publisher and songwriter(s). There is no public performance right in sound recordings, meaning that a singer/rapper that performs on a song, but is not a writer, does not receive any public performance royalty when their song is played on traditional radio. If the song is played on digital radio, the singer/rapper will get a royalty for the public performance of their sound recording, which is collected by SoundExchange.

An implied license does not require any actual agreement—it arises solely from conduct and serves to allow others to use your intellectual property (“IP”).  There is no requirement that even a verbal understanding was reached.  Rather, an implied license is a legal concept that is created solely by the actions of parties and does not require any intention to allow such use.

The implied license originated as a concept in patent law, and was then adopted in copyright cases.  It is now also applicable to the right of publicity.

Generally, an implied license will be found where the following occurred:

  1. At the request of a client
  2. An author creates a work
  3. Knowing the intended use by the client
  4. And provides the work to the client

For singers, producers, songwriters, and artists, an implied license will allow others to use your most valuable IP, copyrights and rights to publicity (e.g., voice, image, likeness), without any compensation, or without further compensation.  Moreover, if a payment is found to have been made, the license will be nonrevocable.

Not only can you license your IP without any agreement, unless you explicitly limit the extent to which your IP is licensed, a Court will find the contours of the license to be as broad as reasonably possible.  In other words, unless there is evidence demonstrating that you limited the extent to which your IP may be used, an implied license will cover all uses reasonably anticipated, and without geographic limitation.

It is critical that creators understand the situations under which you may be found to have transferred rights, and to avoid the implied licensing of your work by having thorough, written agreements in place.  Without a written agreement, you may be giving your rights away without compensation, without adequate compensation, and without knowing the parameters of the license that you have given.

There may be situations where it makes sense to work for a low amount or even for free—e.g., in order to build a reputation, make connections, learn and develop skills—but, this should not be done without careful consideration of the pros and cons of doing so in the context of your career, and you should never give away your IP without knowing that you’re doing so.  Do it because you want and intend to, and because you are being fairly compensated in return (whether that compensation is monetary or otherwise).   And always, know what your rights are, and what you can expect for allowing other to use them, whether that is a one-time “buy-out” payment, or it includes residual payments based on the performance of the product, or is an alternative arrangement.

There are exceptions to the implied license doctrine, including fraud.  See e.g., Garcia v. Google, Inc., 743 F.3d 1258, amended by Garcia v. Google, Inc., 766 F.3d 929 (9th Cir. 2014).  However, you do not want to rely on exceptions, as this will mean spending a lot more money on attorneys battling out the legal nuances of your situation, whether in or out of court.  The far better practice is to make sure that you consult with an attorney prior to creating and handing over your work.  If you are an author, producer, actor, musician, singer, artist, set designer, etc., be sure to have an attorney review your situation and draft or review a written agreement.  The money you spend in legal fees to prevent fixing a bad situation will be a fraction of what it costs to remedy that situation.

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A mere idea is not protected as property in California (Desny v. Wilder). However, a promise to pay for the conveyance of an idea may be implied by the law from the circumstances surrounding the acceptance of that idea (Burtis v. Universal Pictures Co.).

In order to prevail on a breach of an implied-in-fact contract claim, it must be shown that the plaintiff not only conveyed an idea that was used by the defendant for a profit, but also that the idea was conveyed with the expectation that payment would be made if the idea were to be used. The plaintiff must show:

  1. that he or she prepared the work;
  2. that he or she disclosed the work to the offeree for sale;
  3. under all circumstances attending disclosure it can be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which was tendered (i.e., the offeree must have the opportunity to reject the attempted disclosure if the conditions were unacceptable); and
  4. the reasonable value of the work. (Faris v. Enberg)
Formerly administered by the Harry Fox Agency, now owned by SESAC.
A MUSICAL COMPOSITION includes the music, and any accompanying words (“lyrics”). The author of a musical composition is generally the composer and/or lyricist, although the owner may be different (e.g., by virtue of a “Work Made for Hire” agreement).

A musical composition may be written (e.g. notes and lyrics), or in the form of a phonorecord (recording of the notes and lyrics). The owner(s) of the copyright to the musical composition may differ from the owner(s) of the copyright to the sound recording of that musical composition. A copyright in one is not the same as, or a substitute for, a copyright in the other. Compare with: sound recording.

SOUNDEXCHANGE collects and distributes royalties on behalf of sound recording copyright owners, using statutory licenses. SoundExchange is designated by the Librarian of Congress as the sole organization authorized to collect royalties due for the digital transmission of sound recordings, whether the transmission is made via streaming or by making ephemeral phonorecords (i.e., where copyrighted work is reproduced, but only for a short period). Prior to 1996, there was no digital public performance right.

Registration with SoundExchange does not necessarily eliminate the need for an artist/writer/producer to also affiliate with one of the PROs.

Compare with: ASCAP, BMI, and SESAC, the 3 U.S. public performance organizations (PROs) that collect royalties on behalf of copyright owners of musical compositions or the public performance of their works in “traditional” avenues (i.e., non-digital).

A SOUND RECORDING is the permanent fixation of music, lyrics, and sound in any medium (e.g. digital, CD, vinyl). The author(s) of a sound recording are the perfomer(s) whose performance is fixed and/or the producer(s) who fix music and sounds in the final recording, although the owner may be different (e.g., by virtue of a “Work Made for Hire” agreement).

The owner(s) of the copyright to the sound recording may differ from the owner(s) of the copyright to the musical composition that is being recorded. A copyright in one is not the same as, or a substitute for, a copyright in the other. Compare with: Musical Composition.

Section 101 of the Copyright Act (title 17 of the U.S. Code) defines a “work made
for hire” in two parts:
A work prepared by an employee within the scope of his or her employment

or

A work specially ordered or commissioned for use

  1. as a contribution to a collective work,
  2. as a part of a motion picture or other audiovisual work,
  3. as a translation,
  4. as a supplementary work,
  5. as a compilation,
  6. as an instructional text,
  7. as a test,
  8. as answer material for a test,
  9. as an atlas, or
  10. if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

MORTGAGE & FORECLOSURE LAW FAQ

They cannot refuse to accept your payment for the full amount of default at any point prior to 5 days before the sale (Cal Code 2924c).  Up until then, you have a statutory right to “reinstate” the loan by paying the default amount, and they are required to file a Notice of Rescission of the Notice of Default.

In California, almost all foreclosure sales are “non-judicial foreclosure” sales, meaning they take place without any court action.  A “judicial foreclosure” takes place after a court case is filed, and a Judge rules that the foreclosure action can take place.

After a non-judicial foreclosure sale is held, you do not have the right to purchase the property back from the lender (unless they are willing to do so, but you don’t have the right to force the sale back to you), except for foreclosure sales held by the holder of an HOA lien, in which case you have 90 days to do so.

The proceeds from property sold at foreclosure sale must be distributed in the following order of priority:

  1. to the foreclosure trustee for costs and expenses of conducting the sale;
  2. to the lender(s) for the balances owed on their loan(s), in the order of their liens;
  3. to the former owner or former owner’s successor-in-interest.

If you believe you are owed money after your property was sold at foreclosure auction, contact ANAND LAW PC today.

If your lender stated they would permanently modify your mortgage payments if you made three trial modification payments on time, they must honor this promise. If you are facing this situation or one similar to it, you more than likely have a valid claim for breach of contract against your bank. Call Anand Law, PC today to discuss your rights with a qualified attorney.

In general, the limits are:

  • 10% interest on a loan primarily for personal, family or household purposes;
  • For loans that are not for for personal, family or household purposes, the higher of 10% or 5% over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks on the 25th day of the month before the loan (including loans to be used primarily for home improvement or home purchase).

There are, however, exceptions to these limits including the “broker-arranged” exception. Click here to view the Office of the Attorney General’s web site for more information.

If you have been charged a usurious rate, you are entitled to all amounts you have paid in excess of the principal. Call Anand Law, PC today to discuss your rights with a qualified attorney.

Security interests in real property in California are most often created through the execution of two documents, a deed of trust and a promissory note. A deed of trust grants the beneficiary a security interest in property that secures the loan, while the note creates an obligation for the borrower to pay the debt (a contract). The parties to a deed of trust are typically the trustor (the borrower), the beneficiary (the lender), and the trustee (the party in whom the deed to the property is placed, in trust, until the obligation memorialized in the accompanying note is paid). See generally 4-111 California Real Estate Law & Practice § 111.04.

The parties to a deed of trust are typically the trustor (the borrower), the beneficiary (the lender), and the trustee (the party in whom the deed to the property is placed, in trust, until the obligation memorialized in the accompanying note is paid).  If a borrower defaults on payment, the trustee is authorized to sell the property by virtue of the power of sale clause in the deed of trust.

As part of the California Homeowner Bill of Rights (a series of laws which took effect in January 2013 in response to the foreclosure crisis affecting the state), prior to filing a notice of default to commence a nonjudicial sale, the law now requires that a mortgage servicer, beneficiary, or trustee contact the trustor/borrower in person or by phone in order to assess the borrower’s financial situation and discuss options available to the trustor/borrower that may avoid foreclosure. Cal. Civ. Code § 2923.5(a)(2). After this initial contact is made, the mortgage servicer, beneficiary, or trustee must wait 30 days before attempting to record a notice of default. Cal. Civ. Code § 2923.5(a)(1)(A).

The law also prohibits a mortgage servicer, beneficiary, or trustee from recording a notice of default if the trustor/borrower has submitted a completed application for a first lien loan modification until the trustor/borrower has been provided a written determination of your application. Cal. Civ. Code § 2924.18(a)(1).

Record Notice of Default

After contacting the trustor concerning your financial circumstances in the manner described above, a beneficiary or trustee may record a notice of default in the county where the property is located to begin the process of nonjudicial sale. Cal. Civ. Code § 2924(a)(1). For residential property of no more than four units, the trustee or beneficiary must also provide to the trustor a summary of the notice of default and notice of the sale in English and other languages specified by statute. Cal. Civ. Code § 2923.3.

Notice of Sale if Default Not Cured

Three months after the notice of default is recorded, the trustee must give at least 20 days notice of the sale of the secured property. Cal. Civ. Code §§ 2924(a)(2), 2924f. The notice of sale must be posted conspicuously on the property, posted in a public place in the city where the property is located, and published in newspapers at least 20 days before the date of the sale of the property. Cal. Civ. Code § 2924f.

California law provides borrowers/trustors with the statutory right to reinstate defaulted loans. Cal. Civ. Code § 2924c(a)(1). Broadly speaking, this means that a borrower has until five days before the foreclosure sale to pay the amount in default plus other fees, such as interest, penalties, and costs of providing notice to the borrower, assessed by the lender/beneficiary. The lender (or its servicer) is required to provide the borrower with a “beneficiary statement,” which contains information on how much must be paid in order to reinstate the loan. Cal. Civ. Code § 2943.

In the event that a trustor (or borrower) defaults on the payments owed under the note, a beneficiary (or creditor) holding a deed of trust generally has three legal options to enforce his rights. The beneficiary can: (i) sue to enforce the note obligation by bringing an action to collect on the debt; (ii) seek judicial foreclosure of the property securing the debt; or (iii) have the trustee exercise its power of sale, if such power is expressly granted in the deed of trust. The timeframe in which a beneficiary can exercise these options (the “statute of limitations”) differs.

Suit for Nonpayment

In the event of default, a lender can file a lawsuit to force repayment of the obligation evidenced by a promissory note underlying a deed of trust. In other words, the creditor can sue the borrower for breach of contract. The statute of limitations for a breach of contract claim is four years. Cal. Code Civ. Proc. § 337. As such, after four years a creditor is barred from suing a debtor on the grounds that the debtor signed a promissory note containing an obligation to pay the creditor. This four year statute of limitations period begins once the cause of action accrues, or, at the time the debtor breaches the obligation by, for example, missing a payment. Cal. Code Civ. Proc. § 312; Spear v. Cal. State Auto Assn., 2 Cal. 4th 1035, 1042 (Sup. Ct. 1992) (“A contract cause of action does not accrue until the contract has been breached.”).

Judicial Foreclosure

A lender may also institute an action in court to foreclose on the property. Similar to a suit for nonpayment or breach of contract, a creditor is barred from bringing an action to compel a judicial sale of a debtor’s property (a judicial foreclosure) after four years from the date a claim to collect on a debt accrues. Cal. Civil Code § 2911; Cal. Code Civ. Proc. § 725a. A debtor is sometimes entitled to redeem the property after a judicial sale under certain conditions. See generally 5-124 California Real Estate Law and Practice §§ 124.30-124.40.

Nonjudicial Foreclosure – Exercising Power of Sale

If a power of sale clause is expressly contained in the terms of the deed of trust, then the trustee, on behalf of a beneficiary, may exercise its power of sale even after the statute of limitations to collect on the underlying debt is barred. See e.g., Summers v. Hallam Cooley Enterprises, Ltd., 56 Cal. App. 2d 112, 113-14 (4th Dist. 1942) (“the power of sale under a trust deed may be exercised after an action on the note is barred.”); See also Carson Redevelopment Agency v. Adam, 136 Cal. App. 3d 608, 610 (2d Dist. 1982) (“The running of the statute of limitations on the note underlying . . . [a] deed of trust clearly bars an action to enforce the note itself and an action for judicial foreclosure. . . . However, it is equally well settled that the power of sale under a deed of trust is not barred, or never outlaws, and that the power of sale may be exercised by the trustee who holds the title even though the statute of limitations has barred any action on the underlying note.”) (Internal citations and quotations omitted.)

In 1982, with the passage of the Marketable Record Title Act (MRTA) (codified as Cal. Civ. Code § 882.020 et seq.), the legislature changed the common law rule that the power of sale under a deed of trust “never outlaws,” or never expires. Instead, under the MRTA, a creditor (through its trustee) may exercise its power of sale at any time before the final maturity date of the obligation and for ten years after the maturity date included in the record. Cal. Civ. Code § 882.020(a)(1). If the record contains no maturity date, then the creditor has 60 years from the date the instrument was recorded to exercise the power of sale. Cal. Civ. Code § 882.020(a)(2).[1]

Note that unlike a judicial foreclosure, a creditor generally has no right to a deficiency judgment after a nonjudicial sale (see generally 5-120 California Real Estate Law & Practice §§ 120.22, 120.23) and also that a debtor is generally not entitled to redeem after a nonjudicial sale. Id. at §120.23.

In sum, although a beneficiary is barred from enforcing the note underlying its deed of trust and pursuing a foreclosure action in court, it can still choose, at any time up to either 10 years after the maturity date or, if no maturity date is included in the record, 60 years after recordation of the deed of trust, to compel a curing of the default and if it does not receive that repayment, elect to sell the property. Moreover, even if the beneficiary never exercises any of its rights with respect to its security interest, its claim will cloud title to the property until the expiration of the terms defined by the MRTA. This could adversely impact future sales or attempts to obtain other financing using the property as collateral.

[1] The wording of Cal. Civ. Code § 882.020 creates ambiguity because it refers to a time limit upon enforcement of “the lien of a mortgage, deed of trust, or other instrument” despite the fact that the need for the statute arose because the power of sale was considered something other than a lien and therefore never “outlawed.” As a result of this ambiguity, different appellate courts have reached opposing conclusions concerning the meaning and application of the statute. Compare Ung v. Koehler, 135 Cal. App. 4th 186 (1st App. Dist. 2005) (finding entitlement to 60 year statute of limitations remained even after filing a notice of default containing a maturity date on the loan) with Slintak v. Buckeye Retirement Co., L.L.C., 139 Cal. App. 4th 575 (2d App. Dist. 2006) (finding the filing of a notice of default containing a maturity date triggers the 10-year statute of limitations). Although the 2006 amendment to Cal. Civ. Code § 882.020 did not clarify things, it is unlikely that this issue will have any bearing on the specific issues the you faces and as such, a thorough analysis has not been undertaken.

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