Thursday, December 08, 2011

On Eating Junk Food and Being Poor

I've recently had a discussion with a person who is of the opinion that poor folks (I presume in the developed world because this problem isn't even on the radar elsewhere) are in the main overworked, have no leisure time, and can't be bothered to take the time to prepare healthy foods.

They are thus not responsible, so the argument goes, for feeding their kids (and themselves) poison from Maruchan and McDonalds, not to mention the odd bag of Cheez Doodles.

I opined that this issue was one of personal responsibility, skills acquisition, and access to a reasonably well stocked supermarket, and that if a family of four could not get by on $129.50 in food stamps a week (according to the Kansas City Star) the main problem was a lack of enterprise and discipline rather than structural impedimenta.

This my friend objected strenuously to. I then went on to describe how I, being the designated chef here, put together baked macaroni and cheese for about five dollars, which was enough to feed four adults for two days, and how I did it in about an hour. This he described as classist and arrogant, suggesting that I'd never walked in the shoes of the poor (which is inaccurate) and that dilettante chefs and middle class housewives would of course do things as a test project that the poor, not being similarly blessed, could only succumb to the temptations of the Clown and Top Ramen.

Well. I haven't changed my mind and likely neither has he.

I surmise that when you're poor, like so many other burdens, it is incumbent on people to learn the skills necessary to survive, whether that skill involves navigating the social service system, the public transport network, or providing healthy and nutritious eating for the young 'uns. At a minimum it is necessary for child development and school kids from the other side of the tracks need all the help they can get. Good eating on a budget is the first rung on the ladder out of poverty.

Top Ramen and McDonalds don't build a foundation for any kind of sustained effort. They're the definition of empty calories and the white flag of surrender to a lack of initiative.

Get a plot in the public gardens if your town has them. Get a cookbook. You can find Irma Rombauer or Meta Given at the Sally for half a buck. Read it. Treasure it. Learn it. Use it.

Acquire the skills and tooling necessary to prepare wholesome food for the family, and learn to prioritize and manage a budget and develop a menu. Take the time to learn these skills, and there's a pretty good chance your kids won't get diabetes, either.

You may not be able to change the world, but you can change yourself and your family for the better. And if you can't, I'll buy you a week's worth of Top Ramen.

Of course it is not all fun and games, and when you're poor you're only one occurrence away from disaster. The Roanoke Times had this to say back in 2007:

Playing at being poor might seem offensively useless. But it can serve a purpose.
Living in poverty is not the free and easy ride that go-get-a-job critics who rail against taxpayer-funded public assistance programs would have us believe.

Living on Temporary Assistance to Needy Families, food stamps, transportation vouchers and child care subsidies is tough.
That point can be made real for people who live much more comfortable lives through exercises that help them better understand what it means to be poor.
United Way of Roanoke Valley board members and other community leaders last week participated in a poverty simulation.

They assumed the roles of low-income people -- a single, working father raising a 3-year-old; an arthritic elderly woman; a grandparent caring for a grandchild. Then they set out to find food, secure child care and health care, and make sure they had a place to rest their heads at night.
Pretending to be poor for a few hours might seem feckless when one has a warm bed and refrigerator full of food to go home to. But a simulation can at least give people who are in positions to effect change a taste of the difficulty of life on limited means.

Such exercises can be perceived as political stunts when practiced, for instance, by members of Congress.
Earlier this year, four House members attempted to highlight the failings of food stamp benefits by pledging to live for one week on $21 worth of food, what the average food-stamp recipient receives. It wasn't easy.

Ohio Democrat Tim Ryan didn't last the week. Jars of peanut butter and jelly he'd stuffed in carry-on luggage were confiscated at an airport, leaving him with nothing but a bag of cornmeal to carry him through the challenge's final days.
He was caught eating a pork chop in a hotel restaurant because he feared he'd be too weak to deliver a commencement speech.

"It just showed me that when you're living on food stamps, you're really one event away from disaster," Ryan told The Washington Post. "Some people are constantly living on that edge."
There is merit in pretending to walk that perilous edge, if it provides a truer sense of how the poor manage from day to day.

Never mind the appearance of showboating. What's important is that action follows.

Friday, October 14, 2011

Steel Wheels and the First Amendment

The Iowa Supreme Court heard arguments concerning the first amendment's free exercise clause yesterday, and a decision's expected in a few months.

"B-b-but Sparky!" you say, "What's that have to do with law down on the farm? Are we branching out? Oh, mama, could this really be the end?"

Hesh there, feller.

It seems that Mitchell County, Iowa passed an ordinance in 2009 forbidding the use of steel tractor wheels on hard surface public highways because they tend to tear up the road surface, and thereby hangs a tale.
It seems that Mennonite farmers in the county have had a practice of affixing steel cleats to the wheels of their tractors. Antique tells us that steel wheels were de rigeur on tractors until the development of good pneumatic rubber tires in the middle 1930s and they rapidly fell into disuse thereafter. By 1940, over 90 per cent of the tractors in use had rubber tires, and it was found in testing that rubber tires were more efficient, saved fuel, and in general were a needed improvement.

So you gotta ask yourself why the Mennonites not only insist on this retrograde practice, but are willing to litigate it to the highest court in the state on constitutional grounds? It's been suggested that the purpose is to discourage tractors from being used as personal vehicles or as automobiles to run errands, presumably by making it as uncomfortable as possible.

The constitutional argument rests on the first amendment's proscription against making law respecting an establishment of religion or prohibiting the free exercise thereof. It's said that thwarting the use of grousers on the public highways is an impingement on the free exercise of religion.

Whether this is held to be so remains to be seen. My own take on the matter is that this may be a similar sort of controversy to the now familiar reflective triangles on the rear of Amish horse drawn vehicles. They are generally accepted, but some Amish have resisted the use of them.

A recent appellate case in the Kentucky Court of Appeals, Gingerich v. Commonwealth, raised a similar issue. There, the lower court evaluated the claims of the appellants using a strict, or heightened scrutiny, lens and determined that although the ordinance that required affixing a slow moving vehicle reflective devise did burden the Amish, it was outweighed by the state's compelling interest in road safety. The Amish took their appeal to the Graves County court which found that the ordinance applied to all slow moving vehicles.

The Kentucky Court of Appeals found that the appellants had not established a prima facie case of discriminatory effect and purpose, and therefore affirmed the trial court.

Stay tuned.

Tuesday, April 12, 2011

Appanoose County Confidential: Partnerships Are Still Poison

Bank of the West v. Early Farm Partnership, no. 10-1093 (Iowa Ct. App. March 30, 2011)

Kevin Early and his father Richard formed the Early Farm Partnership. His father died in 2004, and the widow agreed to step into the shoes of her husband and become the owner of the decedent's 50 per cent share.

Mid States Engineering, a corporation owned by Kevin Early and his wife applied for a loan from Commercial Federal Bank, and the bank requested collateral. Kevin orally advised the loan officer that Sheila Early was an admitted partner and was a required signatory.

MidStates delivered a promissory note signed by Kevin and his wife and a mortgage of the partnership's real estate as security which was signed only by Kevin as general partner of the farm partnership. A security agreement was later delivered to the bank in which Kevin stated he had the full right power and authority to pledge collateral to the lender.

Bank of the West, successor to CFB, sued to foreclose its mortgage and filed a motion for summary judgment. The farm partnership resisted the motion with the affidavits of Kevin, his mother, and the bank's loan officer, alleging that there were genuine issues of material fact that precluded summary judgment.

The district court granted the bank's motion, ordered foreclosure of the mortgage, and this appeal followed.

The court of appeals affirmed, finding that although the Early Farm Partnership documents required unanimous agreement of the partners concerning partnership decisions that affected partnership assets, Kevin could and did act in a way that could bind the partnership.

Iowa Code section 486A.301 states in part,

(... E)ach partner is an agent of the partnership for the purpose of its business. An act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.

The takehome's clear: For G-d's sake, forget partnerships, form a corporation and do it right. It'll be the cheapest money you ever spend.

Saturday, March 19, 2011

The Strange Case of Iowa Code 561.13

A couple of recent newspaper articles here detailed the story of Matthew Danielson et ux, who figured out how to get a $320,000 house for free. It also demonstrates that as always, attention to detail is the sine qua non of any profession where money is involved.

It also indicates the truth of Tony Hillerman's fictional detective Joe Leaphorn's maxim: If you believe in coincidence you aren't looking close enough.

How's that, you say? Read on.

It seems that there's a section in the Iowa Code, 561.13, hoary with age, that provides that if there's a conveyance or encumbrance of a homestead, and the owner is married, the conveyance or encumbrance is not valid unless signed by both husband and wife. The reasons are simple-the intent was to prevent one half of a marriage to encumber or mortgage the homestead without the other's knowledge and consent.

Danielson, a convicted felon, applied for a mortgage using a broker named Jason Larson, employed by Once Source Mortgage who fronted the entire mess to Citibank, and the application did not include his wife's signature as has been required since the first Code of 1851. Danielson made one payment and then defaulted.

Citibank attempted to foreclose the mortgage, and Danielson raised the failure to obtain a signature of his spouse as an affirmative defense. The trial court heard the matter and denied Citi's claim that the mortgage had been fraudulently obtained. It also held that the mortgage was void as between Danielson, his wife, and the bank. The end result was that Danielson took the home free and clear and Citi was left with nothing.

Justice? Read on.

Two years previously, Troy Hudson treated Wells Fargo Bank to some of the same medicine and obtained his home free and clear because the mortgage application did not include his wife's signature.

Here's where the plot thickens, as disclosed by the Register's inquiring reporter Lee Rood.

Troy Hudson is Jamie Danielson's cousin.

Both couples obtained refinancing through a firm, First Horizon, where Danielson's wife worked and where her mother, Rita van Zee, was the branch manager.

The Danielsons refinanced through First Horizon for double the price of the original mortgage (far more than the assessed value of the property) and lost the home in foreclosure to First Horizon, having obtained $625,000 more or less in the process. They'd sold some of the property for far more cash than it was worth to dear old Mom a year later. Dear old Mom and her husband are doing pretty well in the property ownership business if the Polk County Assessor can be believed.

Matt Danielson also obtained a mortgage in 2007 to buy a home and it appears from the article that he may have misrepresented his finances and assets on the mortgage application he made.

The mortgage broker in all of this, Jason Larson, has a checkered history as well if court records are reasonably accurate.

All of this has dodgy dealings written all over it, and we expect the U.S. Attorney to take an interest in these matters.

Tuesday, March 08, 2011

Debt Collector Lies, Gets Hammmered By 9th Circuit

It's been a while since I visited this blog, but I'm determined to make amends and get back on the case.

This one is a little off topic, but since debt has been part of the farm equation since the first shylock squeezed the first dirt farmer out of his last shekel, it seemed appropriate-as well as being a sorely needed breath of fresh air in these times.

There's also a very important lesson here. Stay with me.

McCollough v. Johnson, Rodenburg & Lauinger, no. 09-35767 (9th Cir. Mar. 4, 2011)

McCollough, a school custodian now disabled, got behind in his credit cards like a lot of other folks. He owed Chase around $3,000 and didn't pay, making his last payment in 1999. Chase charged off the debt and sold the account to CACV of Colorado, a buyer of bad debts.

When McCollough didn't pay, he was sued in Yellowstone County, Montana by CACV in 2005. Representing himself, McCollough asserted the Montana 5 year statute of limitations on account collections and the case was dismissed by CACV.

One year later CACV retained the law firm to collect the debt and alleged that McCollough had made a payment in 2004, which would have tolled the statute of limitations-which starts to run when the last payment is made. The law firm sued McCollough.

McCollough filed a pro se answer asserting the statute of limitations and retained counsel. It had become apparent to the law firm at that point that the lawsuit had a statute of limitations problem. McCollough then sued the law firm under the Federal Fair Debt Collection Practices Act, and the jury awarded him $1,000 statutory damages, $60,000 in punitives and $250,000 for emotional distress.

The law firm, as you would expect, appealed.

The 9th circuit affirmed the trial court, among other things finding that the law firm's interrogatories propounded to McCollough contained requests for him to admit things that they knew were not true, having that information in their possession. Service of such requests on a pro se defendant without the obligatory notice that if not answered in 30 days the requests are deemed admitted was 'unfair, unconscionable, ...false, deceptive and misleading means to collect a debt.'

The teaching, however, is this. Keeping careful records and not making a further payment once you've stopped paying is the best defense to preserve your FDCPA rights and your rights under the applicable statutes of limitations.

Thursday, September 23, 2010

She's Leaving Home

You might ask why this is in a farm law blog, and the simple answer is that we in the farm belt have seen this all before, particularly those of us with long memories of the cold seventies and blustery eighties. We ended up with farm debt mediation, which turned out to be a pretty useful tool for keeping people honest.

The Washington Post reports this morning that the foreclosure process is "...riddled with faked documents, forged signatures, and lenders who take shortcuts reviewing borrower's files...the problems, which are so widespread that some judges approving the foreclosures are ignoring them, are coming to light as (the inartfully named-ed.) Ally Financial, the country's fourth biggest lender halted home evictions in 23 states this week."

The tale goes on to describe how an employee of GMAC Financial signed off on at least 10,000 foreclosure papers a month without verifying whether the information justified the process, as did a flunky who worked for JP Morgan Chase. A low level flunky at another foreclosure bucket house claimed to be an executive of Bank of America, Wells Fargo, US Bank and numerous other anthropophages while signing off on foreclosure affidavits-which, of course, are subject to the penalties of perjury. To add to the mess, numerous other flunkies forged the perjurer's signature too-poetic justice of a sort, no?

As a prefatory matter, we at the Dougloid Towers have always liked our poison straight, undiluted, and bottled in bond. We recommend that all banks, mortgage bucket shops, and all floggers of dodgy loans should be compelled to add to their corporate names the following suffix: "A predatory, onerous and prevaricating retailer, so be warned We'll screw you to the wall if we get a chance." until proven otherwise.

Truth in lending, y'know.

Yet, the pattern has always been clear. Creditor side litigators and their sycophants and toadies in the law firms that service them are infamous for dodging the law, and the robobanks that enforce the garnishments are oblivious to even the simplest principles-such as, you can't garnish social security or pension money.

It used to happen all the time when I was in that trade, and the main reason it happened was that the creditor side got arrogant, and the reason they got arrogant is that debtors usually do not have the kind of money it takes to hire a conscientious and thorough attorney who will put the creditor to their proof in the time allotted. So why should the foreclosure process be any different?

So...what's the takehome?

Well, those of us who have at one time or another labored in debtor side litigation have known this for years, and it forced some of us into dodgy alliances with outfits that were predatory bottom feeders lunching on the remains that fall off the conveyor belt that leads to the bankruptcy courts. The occasional victory was sweet.

That being said, many of the foreclosures are justified, because the banks of all people should know that they lent mortgage money to people who did not have a prayer of paying it back unless property continued to appreciate at 20 per cent per annum, world without end, amen.

The banks, of course, are now acting for all the world like reformed drunks at a church picnic.

If you're looking at this coming down the road, you're entitled-and should feel obliged- to put the bank to its proof, and it is highly recommended that you do so, at the most advantageous time in the process. Check everything out, including names, dates, places, people, the validity of notarial offices, jurisdictional issues, proofs of service, and all other formal requirements.

Chances are good that you can trip them up and stall the process. You may not win in the end but you'll at least have the comfort of knowing you made somebody's life truly miserable for a while.

Wednesday, September 22, 2010

Mr. Marcellus And His Shale

Editor's Note: Folks, I've been remiss in my blogging duties because some other things have occupied a lot of time in the last few months-primarily my defense and teaching duties plus the life of a country gentleman maintaining a chunk of land and an old house takes up an inordinate amount of time. However, it is my intention to get on the case and get current. My extended coffee break is over.

A lot of my friends in rural New York and Pennsylvania are up in arms over the issue of natural gas extraction and how it is starting to take place in areas where the Marcellus Shale layer has now become profitable to drill into. In particular they don't much like the process of hydrofracturing, and they say with some truth to it that it poses serious environmental problems for rural folks who use shallow water wells for their domestic uses.

As it happens we've had the same thing here (shallow water well and ground water contamination) for a long time-the contaminants are more localized but the problem is similar in scope.

Here's how I responded to a fellow over on a social network I spend altogether too much time noodling around on. You know which one I'm talking about.

The point is, Stephen, that a lot of folks-not saying you're one of them of course-a lot of folks don't bitch about stuff until their ox gets gored, so to speak. The problem y'all have if you've got the Marcellus shale formation in your basement is, you don't have any lawyers in your area who know anything about oil and gas law because nobody's ever figured out how to get at the stuff until recently, and not that many folks in the region are knowledgeable about gas extraction technology and what it can be made to do as well as what the dangers are.

Added: That's simply because nobody ever had a need to know about this stuff until recently. Michigan farmers could probably write the book on it because I think there's only one or two counties that do not have some level of oil or gas drilling activity in them.*

Remember that it isn't what people know that's dangerous, it's what they know that ain't so.

Here's my prediction for the next fifty years.

The gas is there, and there's a lot of it. Extraction of it is a matter of private property rights, so it is going to be brought up from the ground and sold, and there's not a whole lot people can do about that without rewriting the last 350 years of American law. It's an emotional issue particularly when one group of people wants to scotch what should be a comfortable retirement in Florida for some farmer and his wife because of what's under their land that they've scratched out a living on for the last 50 years or so. Nobody's got the right to condemn other people to penury because they don't like what they're doing.

Two things will happen.

First, you can expect that rural water districts with centralized distribution will become the norm in all the areas where people get their drinking water from shallow wells. This is what's happened here because of farm nitrate runoff-basically, animal shit and piss and fertilizers. As long as you've got shallow water wells in the front yard and a septic tank or drain field in the back and farm animals wandering around, nobody's got a principled right to complain they suddenly don't like the taste of their drinking water. That's been the history here on the prairie for the last 150 years.

Second, the petroleum drillers and producers will have to start doing a better and cleaner job of drilling and cementing, and they're going to have to use simpler and less offensive methods of hydrofracturing. The people who are against it will have to get used to the idea that it can be made environmentally safe and will have to insist on that as a precondition to getting a drilling permit, and they'll also have to get used to the idea that private property is a pretty important idea.

Image of the rig courtesy of Chief Oil and Gas. They've got a very informative website.