(Image Credit: technodiaries.org)

The Pennsylvania Supreme Court recently accepted the case of Commonwealth vs. Spence, on appeal from the Superior Court.  This criminal case involves the issue of whether eavesdropping on a speaker-phone telephone call constitutes a violation of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act.  The outcome of this case will have a significant impact on the introduction of electronic communication evidence in all types of cases, including family law cases.

In this situation, the confidential informant was a high school student arrested for illegal possession of prescription drugs.  The student was enlisted as an informant to try to arrest the dealer.  In doing so, a Pennsylvania State Trooper with the Philadelphia Vice Narcotics Unit had the C.I. call the dealer; put the phone on speakerphone in the trooper’s presence and order Percocet, OxyCotin, and Xanax.  The dealer was to deliver them in person to a local Wawa.  Upon the dealer’s arrival, the police were waiting and he was arrested for possession of a controlled substance with intent to manufacture or deliver, as well as a count of possession of drug paraphernalia.

 

At the criminal trial, the Delaware County Prosecutor had asked for a mistrial because they realized they needed to utilize the direct testimony of the confidential informant.  During that break between trials, the defendant filed a Motion to Suppress the evidence on the basis that the State Trooper had violated the Wiretap Act and that any evidence derived from that violation was barred from introduction into evidence.  The trail court judge agreed; the District Attorney’s office appealed and the Superior Court judges agreed with the trial court, leading to another appeal to the Pennsylvania Supreme Court.

 

The impact of this decision will reach beyond criminal cases.  A decision upholding the suppression of this evidence would mean that any time a person overhears a conversation on speakerphone that the potential would exist that that information could be suppressed presumably due to the speaker’s lack of knowledge or consent to expose the info beyond the intended recipient.  Family law litigation often employs the testimony and evidence from individuals who have overheard conversations or recorded conversations (in person) with an unknowing speaker.  The difference between a legal recording and an illegal recording can be a very fine line; the outcome of this case will further shape how electronic recordings are used and whether they will remain a legally reliable method for collecting evidence.

 

Additional information about this case can be found in "The Legal Intelligencer," May 3, 2013, Volume 247, No. 86.

 

 

The Pennsylvania Superior Court recently rendered an Opinion in the case of Ferko-Fox v. Fox, 2013 Pa.Super 1888. This Opinion is important from the standpoint that it affirms the requirement listed under 23 Pa.C.S.A. §6107(b)(1) that a Protections From Abuse petition requires an ex parte hearing to determine if there is immediate and present danger requiring immediate, temporary relief.

In the Fox case, the wife obtained a temporary Protection From Abuse evicting the husband from the marital residence, as well as prohibiting any communication between the two of them. The husband challenged the temporary PFA on the basis that § 6107(b) requires that the trial court conduct an ex parte hearing for the purpose of protecting the respondent’s due process rights. Specifically, the court found that when the PFA Act permits trial courts to temporarily suspend a “respondent’s rights and liberties based upon the petitioner’s demonstration of an immediate and present danger of abuse at an ex parte proceeding.”  As husband argues, what this essentially means is that a basic review of the verified Petition is insufficient to grant temporary relief without an ex parte hearing being done by the Court. 

 

The ex parte hearing is important in the PFA process because it gives the trial court the opportunity to examine the petitioner in person and under oath; this face-to-face examination of the individual allows the Court to explore facts and circumstances beyond that of the contents of the Petition. The petitioner’s motive may be examined and discerned by an in-person examination and questioning by a Judge. It would also give the presiding Judge the opportunity to examine physical evidence (or the absence thereof) of violence such as, “scratches, wounds and bruises.”

 

Consequently, the Superior Court found that Lancaster County’s informal practice of an in-camera review of the Petition prior to the entry of a temporary order was insufficient to protect the respondent and to ensure justice in the application of the act. The Superior Court’s Opinion conclusively holds that “absent an exigent circumstance that prevents a petitioner’s appearance, due process mandates a trial court convene an ex parte hearing prior to entering a temporary PFA pursuant to §6107(b)”. 

 

The practical application of this holding is that each and every Protection From Abuse requesting temporary relief that is filed in Pennsylvania will now have an initial ex parte hearing on the record before a determination as to whether a Temporary Order will be entered. This will certainly increase the work load of court reporters since the Protection From Abuse Act requires entry of a final Order within ten (10) days of the filing of the Petition (except where a continuance is granted) and thus requiring significant turnaround of the transcript of the hearing for use at trial. 

From a practice perspective, counsel for PFA Petitioners and Respondents will need to be vigilant in obtaining the record from the Court and it is fair to assume that pro se litigants will not have the knowledge or wherewithal to either know about the necessity of having a transcript, nor how to go about obtaining it. Like any change to a standard practice, there will be some adjustment to this new procedure, but I would assume that the courts, court reporters, and counsel will develop as efficient a process as possible to address the added requirement of an ex parte hearing and transcript. An unintended consequence of this rule may also be that temporary orders will be much more judiciously entered in some Counties than perhaps they were before. The requirement of an immediate and present danger of abuse will be much more closely scrutinized in situations in which the facts are much less clear than in more obvious situations.

 We live in an age when both people and transactions cross state borders more and more often. Evidence concerning what occurred in Pennsylvania is often located outside of the four corners of the Commonwealth and thus, beyond the subpoena power of Pennsylvania Courts.  This is true for all forms of litigation, not just family law.

 

In the past, if you needed to secure documents or depose a witness outside our borders, you had to secure something called a foreign commission.  Essentially, one filed a motion in the Pennsylvania case to be permitted to conduct discovery outside of the Commonwealth.  Your opposing parties could contest the motion here, typically on the basis that the evidence was not relevant or a mere fishing expedition.  If your relief was granted, you next hired counsel in the jurisdiction where the evidence or witness was located.  That attorney would file a miscellaneous action in the foreign court (“foreign” meaning outside Pennsylvania) specifying the needed discovery, indicating that Pennsylvania had approved pursuit of it and asking for leave to proceed in the other state.  This action would be served on the witness or records custodian outside Pennsylvania.  That person or entity had its own right to ask that the relief be denied. Again, most often that would be because they denied relevance.

 

Effective December 24, 2012 Pennsylvania adopted the Uniform Interstate Depositions and Discovery Act (Act No. 183 of 212: SB 79 of the 2011 Session).  This act has been adopted by 28 states (including (DE, MD, NY, VA).  The purpose is to streamline the old cumbersome procedure by making it a one-step process.  If you the litigant in Pennsylvania need evidence in New York, you will need to follow the New York statute and engage counsel in New York to actually take the discovery.  But the “permission” part of the old foreign commission rules has been abandoned as far as the Commonwealth is concerned.  Similarly, if a New York litigant wants to take discovery here the New York litigant issues a New York subpoena to the Prothonotary in the county where the witness or evidence is located.  The Prothonotary is to “promptly issue a subpoena for service upon the person to whom the foreign subpoena is directed.” 42 Pa. C.S. 5335(b). The Pennsylvania subpoena is to conform to the foreign subpoena in content and have the identity of all parties and/or counsel, if represented. The statute expressly adopts Pa. R.C.P. 4009.21-.27.

 

Pennsylvania parties served with such a subpoena must file for a Protective Order under Rule 4012 if they wish to oppose the request discovery.  Otherwise, the re-issued foreign subpoena (now in its Pennsylvania form) is subject to the same powers as any other Pennsylvania subpoena including the right to enforce through contempt. 42 Pa. C.S. 5337.

 

The statute makes clear that parties in Pennsylvania may informally comply.  The remedy is limited to subpeonae issued by any of the United States, Puerto Rico, the US Virgin Islands and the District of Columbia.

 

(Image by Bettman/CORBIS) – Lunch at 800 feet only seems normal if you are used to it.

I recently took a phone call from an individual who wanted to learn about the laws related to the emancipation of a minor.  This person would not identify herself, but described herself as a “case worker” who was calling for a family friend who wished to remain anonymous: a fifteen year old girl who wanted to become emancipated from her parents due to what she described to the case worker as abusive conditions. 

My immediate response was to ask whether the police or Children and Youth Services had been called.  The caller did not know, but did not think so.  Since the caller was a “case worker” who described working with pregnant teens and “at risk” kids, my next question was simple: if there is abuse, don’t you have a duty to report the case to CYS and the police?

Pennsylvania’s laws for mandatory reporting can be found under 23 Pa.C.S.A. § 6311, which is the statute controlling Child Protective Services.  Section 6211(a) broadly states that anyone who comes in contact with children “in the course of their employment, occupation or practice of a profession shall report or cause a report to be made…when the person has reasonable cause to suspect…that the child under the care, supervision, guidance or training of that person is a victim of child abuse.” 

This section identifies the basic procedure for mandatory reporters to bring allegations of abuse to the attention of Child Protective Services.  Not surprisingly, this section of Pennsylvania’s code received quite a lot of attention in the midst of the Jerry Sandusky/Penn State scandal and criminal case.    

The caseworker’s response to my question was slow and contemplative: “Yeah. I guess I do have an obligation to report.”  This was clearly the first time she had put her friend’s situation into the context of her profession.  When it comes to deeply personal issues such as abuse, divorce, or addiction, the personal and professional line can be easily blurred and it made me wonder whether she “missed” connecting her friend’s personal experience with her job’s duties was due to the context of how it was presented.  Had this situation been presented to her at an intake session with a teen, the case worker would have likely seen the abuse and notified the authorities.  When the facts were taken out of that context and she was addressing them as a friend with personal knowledge of all the people involved, her judgment clouded and her professional instincts were not triggered.

Most any job eventually desensitizes a person to the unusual circumstances of their profession.  What is strange and fascinating to one person is the job description someone else finds routine.  Someone free climbs a tower at 1,700 feet to change a light bulb; the Louisville basketball player who suffered the terrible broken leg last week was a shocking sight, but I bet that was not the first – or worst – open fracture of a leg his orthopedic surgeon has seen in his career.  A client’s divorce will always be the worst one they can experience, but often the attorney has had to deal with even more difficult facts.

In this instance, the social worker who deals with kids in broken homes, addiction, teen pregnancy and bullying may not view her abused friend as being someone to whom she has a duty to report this to the authorities.  She tried to be a friend, instead, and called an attorney.  This is not an excuse for the case worker, but it could indicate a loss of perspective of what is normal and where her duty to report begins and ends under Pennsylvania law.

My call with the case worker was short; perhaps no more than a minute.  I would like to think she hung up with me and immediately called CYS; possibly the police department.  Hopefully not another attorney to ask about Pennsylvania’s emancipation laws.

 

It came over the newswires that five people had been shot and three killed in the Court House in Wilmington DE.  As trial attorneys in a field where the Court Houses are part of our daily existence, hearts stopped for a moment.  We have family lawyers in Wilmington and we know they go through security just as we do in Pennsylvania.  We go through security staffed by ladies and gentlemen responsible for making certain that bad things don’t happen on the inside.  But from the reports we have received thus far, a disgruntled Father decided that he wasn’t bothering with security.  He would just start shooting in the lobby.

In thirty minutes I am due in the Chester County Court House to judge a mock trial competition for high school students.  The students will be over prepared, nervous and probably won’t realize just what service the sheriff who pats them down provides to them.

Ordinarily, I don’t stop to think about that service either.  These folks are my friends and I have come to see them as such.  But tonight will be different.  Much as the parents of Sandy Hook awakened to a new reality on December 21, all of us who work in the courts will enter with a new level of respect today.

 

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(Photo by Indi Samarajiva)

 

The Pennsylvania Support Rules were recently amended on December 30, 2012.  Rule 1910.29, formalizes the presentation of support evidence for Family Law Cases.  Anecdotally, the Rules of Evidence may not always be strictly adhered to in family law cases due to probative value of some forms of evidence weighed against the cost and difficulty of verifying it or authenticating it at trial. 

 

Rule 1910.29 attempts to eliminate some of ambiguity about the admissibility of some forms of evidence by providing counsel the opportunity to offer the other side copies of those documents they will be offering into evidence twenty (20) days prior to the hearing.  In doing so, provided the other party does not object to the admission of those documents into evidence, they will be accepted as authentic and admitted into the record.  If an objection is made to the records, then the Pennsylvania Rules of Evidence will apply as to the admissibility of those documents into evidence.

 

This rule also standardizes the admission of medical evidence in both record and non-record proceedings, (i.e. proceedings which are not recorded by a court reporter).  Whenever a party raises a medical issue as preventing them from earning income, that party will need to obtain a Physician Verification Form and have their physician fill it out and verify its contents as accurate.  This Physician Verification Form will hopefully eliminate some of the ambiguity for those parties who claim a disability, but conveniently have failed to file for Social Security Disability or worker’s compensation benefits. 

 

If the party who has introduced the Physician Verification Form at the non-record hearing would like to have it entered into the record at the record hearing, then the above rules will apply with giving the other party twenty (20) days notice prior to the hearing and allow the other side the opportunity to file and serve an objection within ten (10) of being served with the document. 

 

By filing an objection, it is likely that the physician will need to testify since there will not be any medical evidence available for the record and if the court deems that the objection to the entry of the Physician Verification Form was frivolous or unnecessary then it is within the court’s discretion under this rule to allocate the costs of the physician’s testimony between the parties.  This portion of the rule is a not-so-subtle suggestion to attorneys to keep their objections substantive and not use objections as means of delay or obstructing the other side’s case.

 

This rule update is a significant change in how evidence is admitted in support actions.  This should help streamline litigants’ ability to offer complicated financial evidence and have objections and questions addressed in advance of the trial, rather than bogging down or delaying the substantive hearing by what amounts to a discovery dispute. 

 

This rule can also have the positive effect of keeping some litigation costs down by allowing a party to produce a non-expert summary and have it pre-approved for admission into evidence, thereby alleviating the need to bring an accountant or other financial expert to court in order to testify as to the information. 

 

Finally, Pennsylvania Family Law procedure varies from county to county and is reliant upon local practice when dealing with a variety of different issues.  This rule update gives some state-wide uniformity to this form of evidence.

 

For Pennsylvanians who live below Interstate 80 and east of the Allegheny Mountains, the Marcellus shale boom is vaguely known to us.  But it is told mostly in the context of cocktail party stories about hunting camps being transformed into huge payments for gas rights. Unless you own a hunting camp these stories are heard with a level of disinterest; much like hearing about the friend of the friend who won it big at the lottery.

 

Truth be told, oil and gas deposits are consuming the northern and western regions of this state unlike anytime since the discovery of Spindletop moved hydrocarbon exploration in Texas to the forefront and away from Pennsylvania.  That was a century ago and it is ironic that for many Pennsylvania counties, the glamor lost in that era appears to be destined to rise again.

 

That being said, the purpose of this is to provide divorce lawyers with a very thin view on a very deep and lucrative subject. Until 10 years ago, when a spouse offered up that her husband had a longtime interest in a hunting camp deep in the woodland, most attorneys would glaze over.  The land sold for $50 an acre after the end of World War II and might otherwise command $500 today.  The camp was 300 acres and 30 families owned “interests”. That was $5,000 before we considered minority and marketability discounts. 

 

Then came Marcellus shale.  More accurately shale has been around for millions of years. It was recognized to have some trapped mineral or gas deposits just about the same time as coal was discovered to be useful (circa 1830).  But until hydraulic fracking (or more accurately “fracturing”) and horizontal drilling came along, this energy was trapped deep in the ground with no commercial means to extract it.

 

The world has now changed and with it the value of the land on which Marcellus and now Utica shale is found. Beginning roughly seven years ago established exploration companies began to appear throughout the north and western regions of the commonwealth with helicopter operated surveying equipment and miles of orange extension cord as these companies identified where they thought shale gas could be positively identified through seismic testing. They approached families and hunting clubs through “landmen” with offers of sometimes eye-popping payments merely for the right to explore for hydrocarbons.  If they ultimately began to extract gas they would do so for additional royalty payments that are a minimum of 12.5% of the value of the stuff extracted. Typically these leases provide that unless the drillers began to make the land productive by actually drilling and extracting product within a specified time, the landowner can keep the payment and re-let the land to others.

 

History took a strange turn in this; a kind of deceptive turn, as well.  Until 2000 the wellhead price of a thousand cubic feet of natural gas had been less than $2.00. But beginning in 2000 the price rose precipitously peaking at more than $10.00 per 1000 cubic feet in October, 2005.  It dropped off but then returned to $10.00 in June, 2008. Throughout this entire time leases were being formed and many wells were being drilled. But after reaching a peak of $10.79 in Summer, 2008 prices fell as quickly as they rose. Gas price at the well dropped 70% in the following year and the price was less than $2.00 in May, 2012.  Currently the shift in production is headed toward Southwestern Pennsylvania where the shale deposits contain “wet” gas; methane coupled with propane, butane and ethane.  Theses gasses have not suffered the same decline in price as dry (methane) alone and are therefore, more profitable to extract.

 

There is no certainty in any market and commodity markets are among the world’s most volatile as this history shows. But folks who invest in these commodities have learned to embrace this risk knowing that Americans are addicted to hydrocarbon energy. Between Labor Day 2008 and President’s Day 2009 the average retail price of gasoline fell by 50%, creeping back to almost $5.00 in Spring, 2012.  The betting is that prices will rise for all of these commodities.  

 

Marcellus and Utica shale reserves are near the Northeast corridor where most energy is consumed. The Utica shale formations are found even deeper in the ground than their Marcellus cousins.  There is plenty of water in the region to use for the fracturing process. As this is written drilling has tailed off in many areas because it is expensive and gas prices are low.  But anticipating an eventual rise in price, the energy companies have turned to building pipelines and compression stations to regulate gas flow once in the pipes.  Bear in mind that when we say drilling has tailed off, 3,400 wells have been drilled since 2008.  Some of these wells are paying royalties to landowners of tens of thousands of dollars each month despite depressed prices.

 

"Hunting camps" are no longer an unimportant asset; appraisals of the land and mineral rights thereon are a critical element whenever this type of asset is in the marital estate.  The system of leasing and royalties can make for a complicated analysis and requires the diligence of a family law attorney to ensure the value of the land is properly evaluated and considered at equitable distribution.

 

(attached is a power point presentation, please view in full screen)

This is not a real estate blog but many of our clients have a heavy portion of their net worth invested in residential real estate.  So when the Fels Institute of Government at Penn Published a State of the Philadelphia Housing Market in mid November we thought it worthwhile to secure and read a copy.

According to the survey home prices peaked both in the region and the country in the first quarter of 2007.  The last time we had seen a decline was from 1990 to 1994. We tend to forget that prices climbed as an amazing rate from 1998 to 2007 and that prices are currently in the same range as they were circa 2004-05.  Measured against 10 other metropolitan markets over the past 25 years Philadelphia housing grew 25% less in price than the other cities.  But, in typical Quaker style when we did plunge from the high, Philly houses declined by less than one-half of the decline in the 10 composite cities.  Where we feel like today is 2005 in home pricing our ten city neighbors are feeling more like mid-2003 in terms of value. Resorts fared the worst with losses of 61% in Las Vegas 51% in Phoenix and 45-48% on the Florida coasts when measured against the high.  Only Dallas and Denver fared better than Philadelphia.  Even the darling markets of Washington and New York was 26-27% declines from the peak.  Still, we will need to recover an additional 14% to get back to our 2007 peak.  We may not feel happy about what occurred but our house value declined later and was more modest than in our shoulder cities of New York and Washington, both of which will need to see another 25% price rise to recover that old time 2007 feeling.  Meanwhile if you had been in a Dow Jones index fund this entire time you are less than 2% away from the Dow’s all-time high in early October, 2007 of 14,006.

 

There is another unhappy aspect to consider.  Securities are highly liquid.  And while we are reporting that home prices are recovering, actual home sales remain very sluggish.  From 2002-through the third quarter of 2008 (the Lehman Bros crisis) the Philadelphia market saw pretty steady sales of more than 5,000 houses each quarter, the first quarter of each year excluded.  In 2012 just over 3,000 homes sold and our region has not seen us break 4,000 since second quarter of 2010. The quarterly average since 1995 has been about 4,300 homes per quarter and measured by sales alone in contrast to price, the data look more like 1995 than 2005 when we peaked at 8,000 homes sold each quarter.  Another approach to this is to look at the number of homes on the market.  From 2001 to early 2005 Philadelphia typically had 5,000 6,000 homes for sale each quarter. In 2005 that number began to spike reaching a peak of more than 12,000 homes for sale in late 2006 and again late in 2007. The number has bounced around between 9 and 11,000 homes since late 2007 with the current trend close to 9,000.  But this still means that in times of relatively stagnant growth we have one-third more homes on the market than we did eight to thirteen years ago.  So the lesson is that if you want your price be prepared to wait a long time and if you don’t have time, your price is going to have to be very competitive.

 

In the end, the news is not gratifying but before we start complaining it might be wise to remind ourselves that in comparison with almost all of the rest of the United States, we were not badly hurt.

Most domestic relations practitioners have fairly standard agreement clauses which they are comfortable with and use day in and day out in the preparation of property settlement agreements. We have recently encountered two seemingly innocuous “boilerplate” clauses that can come back to bite if the document draftsperson does not consider all of what has transpired during the weeks, months or years culminating in the property settlement agreement.  We offer two examples:

1.             The typical settlement agreement incorporates a mutual release of all claims; whether past, present or future, that the parties may have against one another except for those related to enforcement of the property settlement agreement itself. Often, it makes reference to claims for past, present or future support. Is the intention in this case to release support arrearages that may have accrued prior to the agreement?  Chances are that is not the case but shouldn’t your agreement make that point a clear element of the release.

 

On a related point, a couple of years ago, we reviewed a case where two spouses became immersed in a fight where the wife was injured severely enough to bring a civil action to recover damages. That case settled quickly and wife’s counsel (not her divorce attorney) had her sign a general release at the time the tort case was settled. The problem was that a divorce case was still pending in which Wife had raised claims for equitable distribution and alimony.  In that instance, the Court permitted parole evidence and used it to decide that the release was not intended to include the pending divorce claims.  But one can just as clearly assert that a general release is not an ambiguous document and that this was a case of unilateral mistake on the part of one spouse.

 

2.             In many cases where closely held businesses are involved, there are often tax indemnity agreements and/or document confidentiality agreements.  The former provide that the owner of the business will indemnify his/her spouse for tax liabilities imposed on the couple jointly based on problems with the business return. The latter are agreements that state that information or data provided in the divorced valuation process will be kept confidential. 

 

Many standard property settlement agreements negotiated long after the indemnity or confidentiality agreements are reached contain language stating that the settlement agreement sets forth the “entire understanding of the parties and supersedes any and all prior agreements.”  The practical effect is to dissolve the tax and confidentiality agreements.  One wonders whether one could say that it might also be used to avoid pending court orders in support or custody as well.  We think the latter argument a stretch but if the law of contract states that we are to give life to every word of an agreement according to its plain meaning, the argument could easily roll another way.

As we all know sometimes statistics tell a story.  And as we look at the evolving American family the data coming out of Pennsylvania tell an interesting story as the family has evolved over 50 years.  The chart will tell most of the story:

Year

PA Population

No. of Marriages

No. of Divorces

No. of Births

         

1960

11,319,000

71,835

14,429

241,100

1970

11,794,000

94,516

22,622

192,154

1980

11,864,000

93,673

34,922

158,670

1990

11,882,000

84,925

39,971

171,532

2000

12,281,000

74,311*

38,479*

145,874

2010

12,702,000

67,950

34,899

142,000

* This data comes from 2002 as the Pa. Dept of Health states it did not preserve data from 1999-2001 on these topics.

 

Some points we find interesting.  First the state’s population has actually started to experience some growth in the past 20 years after a generation of stagnation. But while the population had grown 11% over half a century the number of marriages has remained fairly static after peaking in 1970.  The number of divorces rose precipitously from 11-14,000 per annum in the 1950s to 22,622 in 1970.  By 1979 it almost doubled again to 39,808.  But since, 2002 it appears to have actually declined by a few percentage points.  The birth rate has plummeted 40% since 1960. In 1960 there was a child born for every 47 residents.  Today one child is born for every 89 residents.  So families are smaller and fewer folks are choosing the formalities of marriage.  But while the population has grown 3.4% in the first decade of the 21st century, the number of divorces actually declined by almost 10%. It does give one pause to ask: what is the future of marriage where over 40 years the population grew by 7% but the number of marriages performed fell during the same time frame by 28%?