Stark & Stark Files Amicus Brief in Major Product Liability Case Before New Jersey Supreme Court

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The law firm of Stark & Stark, P.C. has joined forces with the consumer advocacy group, Homeowners Against Deficient Dwellings (HADD), to file an amicus curiae (“friend of the court”) brief urging the New Jersey Supreme Court to uphold a homeowner’s right to pursue tort remedies against manufacturers of defective building components.

The case, Dean v. Barrett Homes, Inc., will mark the first time the New Jersey High Court directly addresses whether and to what extent the so-called “economic loss rule,” originating in the law of product liability, applies to residential construction. Concisely stated, that rule forecloses tort remedies against manufacturers of defective goods for “economic loss,” unless accompanied by personal injury or physical damage to property other than to “the product itself.”

Dean involves the purchase of a pre-owned house incorporating an exterior siding product known as Exterior Insulation and Finish System (EIFS). In their complaint against the EIFS manufacturer, Sto Corp., plaintiff homeowners allege that defects in the system permitted water to infiltrate and damage the underlying wood structure of their home. In dismissing the tort claims against the manufacturer, the trial judge applied the economic loss rule, viewing the entire house as the relevant “product” and the asserted damage to the underlying structure as damage to “the product itself,” unrecoverable in tort. On appeal, a divided panel of the Appellate Division affirmed dismissal of the action.

The question now certified to the Supreme Court is whether a home constitutes a “product” for purposes of defining the manufacturer’s tort liability, and, relatedly, whether a homeowner’s presale notice of an otherwise latent defect in an integrated component of the home acts as a bar to tort recovery as a matter of law.

Stark & Stark, P.C., is representing HADD pro bono as amicus curiae in the appeal. The brief filed on behalf of HADD argues that the trial court and Appellate Division improperly barred the Deans’ claims against the EIFS manufacturer, expanding the economic loss rule well beyond its principled origins.  Presenting a detailed explication of the nature and historical underpinnings of product liability in New Jersey, the brief explains how imposing the burden of property damage on building component manufacturers who place the injurious defects in the stream commerce serves the purposes and goals of strict product liability in tort; it allocates the risk of loss to the party basically at fault and relieves the injured homeowner who, because of relative inexperience in the field of home construction, is less able to predict and meet the risk of damage caused by defects lurking in the integrated components of the house.

Attorney of record and Stark & Stark shareholder, John Randy Sawyer, remarked that the “Appellate Division’s decision in Dean stands in stark contrast to nearly fifty years of precedent in New Jersey recognizing and protecting a homeowner’s legitimate interest in safe and sound habitation.” It applies the economic loss rule, Sawyer noted, “as a virtual shield of immunity for component manufacturers, leaving either the homeowner, or an innocent builder, vendor or developer, saddled with the risk of loss created by the defectively manufactured building components.”

The issues presented in Dean are of broad implication and of vital importance to HADD’s core constituency of homeowners, according to the organization’s New Jersey chapter president, Tracy Kelly. “For most people,” Kelly observed, “the purchase of a home is the investment of a lifetime, and the consequences of a defective building component can be both financially and personally devastating.” The need for legal recourse against manufacturers of such products is, according to Kelly,  “nowhere more pressing than in the context of home construction.” HADD’s amicus submission is supported by Kelly’s certification, detailing the organization’s mission and nearly 15-year experience of advocacy on behalf of residential consumers.

The attorneys on HADD’s amicus submission are Stark & Stark shareholder, John Randy Sawyer and associate, Joseph D. Gumina. The brief is available online at the Stark & Stark and HADD websites.

Navigating Custody Issues

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In this installment of Legal Lines, Stark & Stark Divorce attorney, David Beaver, addresses the challenges associated with custody issues within your divorce litigation.  Special guest, Robert Rosenbaum, Ph.D, from Bunker Hill Consultation Center, shares his insight regarding what to expect in a contested custody litigation from a forensic  psychologist’s perspective.

The episode covers topics such as:

  • Physical Custody vs. Legal Custody
  • Parent of Primary Residence Classification
  • Children’s preferences in the final custody allocation
  • Realistic expectations for a custody litigation
  • Shared Parenting Plans

If you have any additional questions, feel free to contact the Stark & Stark Divorce Group at 1-877-678-Divorce.

Legal Lines - Episode 2 from Stark & Stark on Vimeo.

New York State Energy and Development Authority to provide loans for Energy Audits and Qualified Energy Efficiency Services under Green Jobs-Green New York Program

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On October 9, 2009, the New York State Legislature enacted the Green Jobs-Green New York Act of 2009 (“Green Jobs Act”) as P.L. 2009, ch. 487, amending the Public Authorities Law, to create the Green Jobs-Green New York Energy Conservation and Community Sustainability Program (“Green Jobs-Green New York Program”).  Under this new program, the New York State Energy and Development Authority (“Authority”) is empowered to award financial assistance from the Green Jobs-Green New York Revolving Loan Fund to applicants for the conduct of energy audits and the performance of qualified energy efficiency services on non-residential, residential and multi-family structures.  The Green Jobs Act defines “applicant” broadly to include any “person who owns, leases or manages a structure and who has the authority to contract for the provision of qualified energy efficiency services to such structure.” NY PUB AUTH § 1891.  However, loans for “qualified energy efficiency services,” which are also defined under the Green Jobs Act and include such building improvements as thermostat upgrades and the installation of thermal solar heat or hot water systems, are limited.  For example, loans for approved qualified energy efficiency services may not exceed $26,000.00 per applicant for non-residential structures.  Applicants applying for financial assistance relating to residential structures may only receive up to half that amount.  The cost of the energy audit may be added to the amount of the loan.  Interest rates shall lie within the Authority’s discretion, but may “be no higher than necessary to make the provision of the qualified energy efficiency services feasible.” NY PUB AUTH § 1896.
 

In addition to the provision of loans for energy audits and qualified energy efficiency services, the Green Jobs-Green New York Program requires the Authority to award grants for certain purposes and to promote employment and training services.  In the way of funding, the New York State Legislature has appropriated $112,000,000 to finance the aforesaid loan program and the Authority’s other activities.  The Authority is not expected to begin implementing the Green Jobs-Green New York Program until the spring of 2010.

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Stark & Stark Launches New Website

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Stark & Stark is pleased to announce the launch of our newly redesigned website. Our website has been streamlined in an effort to provide visitors with easier access to attorney biographies, individual office information and descriptions of the many services Stark & Stark provides.
 
The new website includes features designed to better serve our clients and visitors, including the ability to subscribe to a variety of e-newsletters offered by individual practice areas, updates on recent blog posts and access to Stark & Stark’s new video blog, Legal Briefs TV. The site also includes links to the 5 independent blogs offered by the attorneys of Stark & Stark including the New Jersey Law Blog, Pennsylvania Law Monitor, Traumatic Brain Injury Law Blog, Nursing Home Law Blog and Construction Litigation Law Blog.

Federal Law Protects Armed Services Members - What Employers Need to Know

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The term “blitzkrieg” became a common term on September 1, 1939 when Germany invaded Poland.  Thus, commenced the domino effect of nations falling to Germany, and America’s official position of “neutrality” coupled with the realization that its military was no match against the axis nations.  However, the American government knew  a  large  amount of manpower was going to be necessary to deal with the looming war.  Forward-thinking legislators enacted the “Selective Training and Service Act of 1940" , commonly referred to as “STSA”, which was the first Federal attempt to clarify laws relating to the re-employment rights of service members.  As millions of men would ultimately be affected as a result of serving during World War II, the STSA provided returning service members with certain re-employment rights.  However, changing times required the law be updated.  In 1974, Congress passed the Vietnam Era Veterans’ Readjustment Act of 1974 (later re-codified  and commonly referred to as the Veterans’ Re-Employment Rights Act or “VRRA”.)
   

Both the STSA and VRRA were amended and re-codified in 1994 and became known as the Uniform Services Employment and Re-Employment Rights Act of 1994 (38 U.S.C. 4301 - USERRA).  The main purpose of USERRA was: 1) to make certain that persons serving in the armed forces, reserves, national  guard or other “uniformed  services” are  not disadvantaged in their civilian careers as a result of their military service; and 2) to make certain service members were promptly re-employed upon their military service conclusion; and 3) to make certain service members were not discriminated against in their civilian jobs as a result of their military service.
 

In order for USERRA to apply,  an employer only needs one employee.  See  Cole v. Swint, 961 F2nd 58, 60(5th Cir. 1992).
   

In construing USERRA and prior laws, Courts have followed the Supreme Court’s admonition that “This legislation is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need.”  Re-employment rights extend to persons who have been absent  from employment because of “service in the uniformed services.”  “Uniformed Services” consists of the following:

  • Army
  • Navy
  • Marine Corp.
  • Air Force
  • Coast Guard
  • Army Reserve
  • Naval Reserve
  • Marine Corp. Reserve
  • Air Force Reserve
  • Coast Guard Reserve
  • Army National Guard or Air National Guard
  • Commission Corps of the Public Health Service
  • Any other category of persons designated by the President in time of war or emergency

 

In order for an employee to give notice to an employer of military service, all notice may be written or oral.  Notice will not be required if:

  • Military necessity prevents the giving of notice; and/or
  • The giving of notice is otherwise impossible or unreasonable.

   

Upon return to work after military service, the employee has certain time frames to report back to work depending upon the length of service  (assuming the military member is not injured during military service).  Ninety days after military service is the longest time line upon a service member’s return to make an application for re-employment with the employer.  This ninety-day period is for those members who have served in excess of 181 days or more.
   

One of the more interesting provisions of USERRA is a provision that is colloquially known as the  “escalator position”.  That is, USERRA requires that an employee returning from military service be placed back into a position, with limited exception, to a level of employment that the person would have enjoyed if the individual had been continuously employed.  For example, if an employee left for three years of military service, if all of his or her colleagues in similar jobs and pay scale were given promotions and pay raises based on length of service, the returning service member would  also be entitled to the same promotion and pay raises as if he or she had never left continuous employment. 

   

Hand in hand with the “escalator” clause is the returning service member’s right to all seniority rights and benefits a service member would have obtained had the service member been continuously employed.  The test to determine whether or not rights are seniority rights is whether or not those seniority rights are determined by the length of service.  If it is not, the employer is not required to provide the returning service member with the particular seniority right. 
   

Since the beginning of the “First Gulf War”, the Country’s National Guard has been called upon time and time again.  The question that frequently  arises is if  these “week-end warriors” are covered by USERRA when these National Guardsmen must report for the one week-end a month and two-week training in the summer.  The “week-end warrior” is covered under USERRA,  and any employer prohibition against National Guardsmen performing his or her duties is prohibited under USERRA (this is not to say that the Guardsman is allowed to abuse the rights afforded to Guardsmen under USERRA. If an employer feels an employee is abusing the USERRA rights, the employer is well within his or her right to contact the employee's commanding officer to discuss the situation. Further, there is a national organization called the ESGR (Employer Support for the Garden Reserves), including its local chapter here in New Jersey to assist both employers and employees regarding USERRA rights). While service members may use vacation time to fulfill the service member’s obligation to the military, an employer is prohibited from requiring a service member to utilize vacation to do so. 
 

An aggrieved service member may bring an action against an employer privately, or utilize an attorney in the Department of Justice if VETS refers a matter to the Department of Justice.  Once a service member chooses the path he or she wishes to take, the service member is barred from using the declined option if the chosen path is unsuccessful.  While the Department of Labor  is charged with overseeing the law and implementing its requirements (The Department of Labor has a specific sub-group within the Department called the "Veterans Employment and Training Services (VETSS)" which investigates complaints and attempts to resolve these complaints. If a complaint cannot be resolved in an amicable fashion, VETS can refer the matter to the Department of Justice).   
   

While this article has dealt with the service member once employed, employers should be aware that it is also unlawful to deny an employee-candidate based solely on his or her involvement in the Uniform Services.  The burden of proof to prove other factors resulted in denial of employment is rested squarely on the employer.   
   

While USERRA is a law that may be difficult to navigate and understand, the rationale for its implementation certainly is very clear.  Individuals who are willing to leave their safety nets for higher service to the country need to be valued and protected upon his or her return to civilian life.  While the law does recognize the sacrifice employers make to allow service-member employees to perform his or her duties, it is very difficult to argue against the safety net that USERRA provides.

Non -Domestic Violence?

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In a case of first impression in New Jersey, an appeals court affirmed a trial court's ruling that a paid escort qualifies as a "date”, and thus is a victim under the New Jersey Prevention of Domestic Violence Act. In J.S. v. J.F., the trial judge determined that the parties had entered into a "dating relationship" even though most of their "dates" were at the club where J.S. danced. As for the exchange of money involved, J.S. testified that J.F. was simply trying  to help her out financially, as opposed to rendering payment for professional services, an argument unsuccessfully advanced by J.F.'s counsel.
 

By way of background, J.S. sought protection under the Domestic Violence Act when she began "seeing another man" to which J.F. responded by sending her harassing and threatening text messages. The case serves as fair warning that the commonly-held definition of "dating" is being expanded to satisfy the presumed legislative intent of the Act. As we lawyers like to say, "please be guided accordingly". As others might put it, "buyer beware".

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Divorce In The Troubled Economy

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In this installment of Legal Lines, Stark & Stark Divorce attorney, David Beaver, discusses various issues and challenges connected to your divorce litigation in a down-turned economy. Special guest, Thomas Gates from Arlington Capital Mortgage, fields questions regarding protecting your marital residence during a divorce litigation and flexible refinance options:

  • Job Loss
  • Change of Circumstance
  • Child Support Modification
  • Alimony Recalculation
  • Tips regarding improving your credit score for a favorable refinance

If you have any additional questions, feel free to contact the Stark & Stark Divorce Group at 1-877-678-Divorce.
 

Untitled from Stark & Stark on Vimeo.

Legislature Defines Inherently Beneficial Use to Include Wind, Solar and Photovoltaic Energy Facilities and Structures

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On November 20, 2009, Governor Jon S. Corzine signed into law Senate Bill S1303 as P.L. 2009, ch. 146, which codifies the term “inherently beneficial use,” a concept originally fashioned by the Supreme Court in Andrews v. Ocean Township Bd. of Adjustment, 30 N.J. 245 (1959) and, thereafter, expanded and refined by the judiciary over many years.  The new law, which amends Section 3.1 of the Municipal Land Use Law (L.1975, c.291, C.40:55D-4), defines inherently beneficial use to include, among other things, “a wind, solar or photovoltaic energy facility or structure.”  This will undoubtedly make it easier to obtain approvals for and install these alternative energy facilities where they are not permitted under local zoning regulations and require a use variance.  However, the text of the amendment presents a number of issues of which property owners, developers and others should be aware.
 

First, strangely missing from the new statutory definition of inherently beneficial use is any mention of religious institutions, affordable housing or certain other uses that have been long recognized as being inherently beneficial.  Although the list of uses contained in the definition is expressly stated not to be exhaustive, the omission of uses traditionally viewed as being inherently beneficial is troubling and could open the door to a reexamination of their value and purpose by municipal agencies and the courts.  Additionally, it is unclear whether the term “wind, solar or photovoltaic energy facility or structure” refers only to stand-alone facilities or to facilities that are accessory to (and situated on the same site as) other uses or structures, as well.  It also remains to be seen whether a wind, solar or photovoltaic energy facility that is connected to the grid and supplies excess energy to off-site users qualifies as inherently beneficial.

Well... Everyone Knows It: The Testimony of a Mold Expert

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Everyone knows that humans only use 10% of their brains (not true, unless you mistakenly voted for Pat Buchanan in 2000), that Christopher Columbus called Native Americans "Indians" because he thought he landed in India (not possible, that part of the world was called Hindustan at the time) and that being cold will ensure that you actually catch a cold (also not true, sorry Mom).  So when you hear people say that they know mold causes serious personal injuries, you know it has to be true because common knowledge (as well as Dateline and 60 Minutes) tells us so.  Everyone has heard that a couple in Texas got $32 million dollars because their house was filled with so much mold they had to burn it down.  You likely didn't know that the money was paid by their insurance company for acting in bad faith and deceptively failing to cover their claim for property damage, not because they were physically damaged by mold exposure.  Read closely the articles about "toxic mold" and you'll find that most if not all of the money paid to homeowners is for lost personal items that have to be discarded because of mold/water damage, or some underhanded act of an insurance company.  Rarely are the damages directly related to mold exposure and resultant health problems.  Believe it or not, newspaper headlines are not designed to be accurate, they are designed to attract attention.  "Toxic Mold Injures Family" unfortunately just sounds better than "Insurance Company Pays Money on Bad Faith Claim". 

 

The connection between moldy houses and a particular physical ailment is a difficult one to make.  Mold is everywhere.  And while it is possible for some growths of mold to cause temporary damage to an allergic person, there is little if any proof that exposure to a certain type of mold will cause specific symptoms in anyone.  The effects of mold exposure differ from person to person.  In fact, the Centers for Disease Control web site states that:

Mold exposure does not always present a health problem indoors. However some people are sensitive to molds. These people may experience symptoms such as nasal stuffiness, eye irritation, wheezing, or skin irritation when exposed to molds. Some people may have more severe reactions to molds. Severe reactions may occur among workers exposed to large amounts of molds in occupational settings, such as farmers working around moldy hay. Severe reactions may include fever and shortness of breath. Immunocompromised persons and persons with chronic lung diseases like COPD are at increased risk for opportunistic infections and may develop fungal infections in their lungs.


Everyone knows that placing your hand over a flame will cause a burn.  Not even the scientists at the CDC know if the mold in your house or workplace will harm you. There are no recognized standards for the amount of mold that will cause symptoms, or the length of time you need to be exposed to certain mold to be injured.  Most people who have mold allergies stay away from hay, potpourri and indoor plants.  If they are exposed to mold they may have sneezing, coughing and breathing problems, but those go away as soon as they leave the horse stable or their grandparent's house.  These pesky facts however, have not precluded industrious lawyers and plaintiffs from filing numerous questionable "toxic mold" lawsuits.  Lawsuits based on the "I know it’s true" platform are being filed all the time, accompanied by "I'm a doctor and I'm pretty sure the Plaintiff was injured based on what they told me and that article I read last week" medical reports as proof.

 

Despite the fact that the CDC is unable to nail down a cause and effect relationship between mold and physical ailments, jurors around the country are asked every day to do just that.  They have become the means by which the courts differentiate the junk science from the real science.  This disturbing trend is, in part, a result of judges abdicating their responsibilities as expert witness gate keepers.  Increasingly, courts are allowing experts to testify, regardless of how they come to their conclusions, their level of mold related illness experience, or the plausibility of their conclusions.  The playoff football, "let them decide it on the field", approach is one that is leaving the final decisions to jurors, who inevitably bring their own "knowledge" to the courtroom.  Regardless of what "School House Rock" says, knowledge is not always power.  Sometimes "knowledge" isn't even accurate.  Take this example: 

 

Mr. Jones sues ABC Apartments for keeping his apartment too cold which, he claims, resulted in him having a runny nose, cough and that "achy feeling".  Mr. Jones produces a report from his family doctor that says "Mr. Jones told me it was cold in his apartment in November, so given the fact that his symptoms started in November, I believe that the low temperature caused his cold.  In addition, when he warmed up at his friend's house, the symptoms seemed to go away."  The doctor doesn't specify how cold is cold enough to make someone sick, nor does she account for the person sneezing in the cubicle next to Mr. Jones at work, or the fact that Mr. Jones had 3 colds before moving into ABC Apartments, or that during the 3 weeks between his first and second visit to the doctor, when he got better, Mr. Jones ate 37 oranges. 

 

ABC Apartments asks the judge to throw out this claim, because the Plaintiff can't show that A) it was too cold in the apartment because they can't define "too cold", B) if it was "too cold", that the temperature caused Mr. Jones to actually catch a cold, or that C) he didn't catch the cold from his cubicle-mate, or that D) the vitamin C in the oranges cleared up the cold, not the fact that he went to a warmer apartment.  The court denies ABC's request, saying that there is a sufficient basis for the report, and that ABC is free to beat up (verbally of course) the expert during cross examination and convince the jury that the doctor has no idea what she's talking about. 

 

This seems to be a reasonable decision, until my Mom is picked to sit on the jury.  As soon as my Mom hears that it was cold in the apartment, and that he has a cold, her mind would be made up.  As sure as the sun comes up in the morning, being cold gives you a cold.  There is no disagreement, believe me.  It doesn't matter if ABC produces the President of the Hot and Cold Association of America to testify that they took the temperature in the apartment, and its 59 degrees.  And while that might be mildly chilly, it’s definitely not cold, and besides, being mildly chilly doesn't cause any sort of illness.  There has been no such proof ever produced.  In my Mom's head, however, that Plaintiff wins 10 times out of 10.  Case closed.  The question then is, shouldn't the court have excluded this testimony to prevent my Mom from using what she "knows" to be true, even if there was no real causal connection?  Shouldn't the court know better than to allow an expert to testify that will at best confuse a jury and at worst confirm inaccurate "common knowledge".

 

The New Jersey Appellate Division thinks not.  In an unpublished opinion, the court recently permitted a case to go forward where a tenant claimed to have been injured by exposure to toxic mold.  In Smith v. Northridge at Edison, the Plaintiff's doctor, relying on the Plaintiff's explanation of the facts as she believed them to be, submitted a report that said essentially because the water intrusion and mold growth occurred at the same time as her symptoms, and because her symptoms seemed to diminish when she left the apartment, she was obviously damaged by the mold in the apartment.  The doctor claimed that the temporal similarities led him to believe that her condition was caused by the "harmful conditions present in her residence."  The doctor had never visited the apartment and did no testing or investigation of the types of contaminants present in the apartment.  The trial court dismissed the plaintiff's claims, finding that the doctors lack of specificity as to the type of mold spores, the lack of objective testing on the plaintiff, and the failure to identify that it was even mold in the apartment was fatal to the doctor's ability to testify.  There was no way to tell what the plaintiff thought was mold, actually was mold, and that whatever it was that was found type of mold caused the symptoms experienced by the plaintiff.

 

The Appellate Division, however, found that the temporal evidence (the fact that the "mold" apparently grew around the same time as the symptoms occurred and that the symptoms subsided when she left the apartment) and the plaintiff’s positive response to treatment, was sufficient to permit the doctor to testify at trial. The matter was remanded back to the trial court for further proceedings, which means a trial will eventually be held to determine the outcome of the case.  No word whether or not my Mom has been called for jury duty.

 

This case is an example of the courts increasing unwillingness to dismiss marginal claims or thinly based expert opinions.  Much like the criminal justice system would rather a guilty man go free than put an innocent man behind bars, the civil courts would rather permit a marginal claim to proceed, than dismiss even a slightly meritorious claim.  Americans should have their day in court.  Recent cases on toxic mold personal injury cases are a clear example of this philosophy.  The problem is that the pendulum has swung too far in favor of allowing almost any doctor to testify as to causation of mold personal injuries, mostly based on what they have been told by their patient, and permitting jurors to ignore the science in favor of what they think they know about mold and its health effects.  Courts need to take into account the possibility of an erroneous jury decision based on facts not in evidence, and the implicit message they send to jurors when allowing a doctor to testify on matters on which they have only slightly more experience than do the jurors.  Judges need to be the gatekeepers and the Appellate Division needs to support their effort.

YAZ® Birth Control Linked to Serious Side Effects, Including Deep Vein Thrombosis

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As we have discussed in previous posts, studies have shown that the ingredients contained in YAZ®, Yasmin® and Ocella® have been linked to various forms of severe side-effects. Reportedly, these side-effects include: heart attack, stroke, deep vein thrombosis (also known as DVT or blood clots), internal organ damage (including gallbladder damage), myocardial infarction and pulmonary embolism. Recently, a large number of YAZ® lawsuits have been designated as Mass Tort or Multidistrict Litigation (MDL) cases.

Studies show that one of the more serious YAZ® side effects, Yasmin® and Ocella® use is Deep Vein Thrombosis, which is commonly known as DVT. DVT is a condition characterized by the presence of a blood clot in a vein, usually in the legs or pelvis. DVT does not always show symptoms, but may cause swelling and pain in the affected extremities. If the blood clot dislodges and travels to the lungs, it may cause a Pulmonary Embolism - this potentially fatal condition is commonly known as a PE. Studies also show that DVT and PE sufferers have a heightened risk of long-term complications and multiple DVT and PE episodes, which can, in turn, lead to the need for continuing treatment. Further, DVT and PE sufferers have a much higher incidence of arterial thrombosis, heart attack and stroke.

Stark & Stark’s Mass Tort/Pharmaceutical Litigation Team pursues claims throughout the nation against drug manufacturers, so they can be held accountable when the drugs they market are proven to be defective or cause catastrophic injury to the people who use them. If you feel you have experienced any side-effects from taking YAZ® or Yasmin® (or the generic brand, Ocella®), you can contact Stark & Stark and speak to one of the Mass Tort/ Pharmaceutical Litigation attorneys, free of charge, who can help assess any claims that you might have against the YAZ®, Yasmin® or Ocella® manufacturers.

Pending Federal Regulations and the Residential Mortgage Market

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On Jun 12, 2009, the Federal Housing Administration ("FHA") announced a new, stricter approval process for condominiums to be eligible for FHA financing.  Condominiums, and their managing agents and attorneys, must be aware of the mortgage market and how tightened underwriting standards will affect association operations and property values.  Recent studies show that the FHA alone currently insures approximately 23% of all new mortgage transactions.  It is believed that the FHA, Fannie Mae, Freddie Mac, the Veterans Administration and the Department of Housing and Urban Development account for 90% of the mortgage market.   Under the proposed regulations, all condominiums previously approved for FHA financing would have to be reapproved or FHA financing would not be available.

 

Some of the proposed regulations are as follows:

  1. Projects consisting of three (3) or fewer units will no more than one (1) unit encumbered with FHA insurance.  Projects consisting of four (4) or more units will have no more than 30% of the total units encumbered with FHA insurance.
  2. The new regulations require that at least 50% of the total units must be sold prior to endorsement of any mortgage in the project.
  3. Transfer of control of the association shall pass to the owners of units no later than:  (i) 120 days after the due date 75% of the units are conveyed to unit purchasers; or (ii) one (1) year after completion of the project evidenced by the first conveyance to a unit purchaser.
  4. A final certificate of occupancy is required as a precondition to project approval.  Temporary certificates of occupancy are not permitted.
  5. No more than 25% of the property's total floor area in a project can be used for commercial purposes.
  6. No more than 15% of the total units can be in arrears (more than 30 days past due) of their assessments.
  7. A current reserve study must be no more than 12 months old.
  8. Existing condominium project approvals will expire two (2) years from the date placed on the list of approved condominiums.

These lending guidelines were to be effective October 1, 2009.  The effective date has been twice postponed however.  The current effective date is December 7, 2009.