text:
THE FILED RATE DOCTRINE IS NO BAR, EVEN ASSUMING THAT IT APPLIES TO INSURANCE CASES.
A 2-to-1 decision last year by a panel of the Eleventh Circuit Court of Appeals, Patel v. Specialized Loan Servicing, LLC, 904 F.3d 1314 (11th Cir. 2018), may not mean what you think it does.
The Patel panel decision has often been put into an argument that goes something like this: Courts have no business changing filed rates that have been approved by authorized regulatory agencies. The federal filed rate doctrine forbids it. Insurance claims are regulated by states, so the filed rate doctrine bars claims that involve filed insurance rates approved by state insurance commissioners authorized to approve them.
That is not what Patel stands for.
In reaching this conclusion, the Eleventh Circuit focused on “[t]he most obvious basis,” id. at 1325, namely, “the fact that the plaintiffs repeatedly state that they are challenging [the insurance company’s] premiums,” id. at 1325–26, using language targeting “artificially inflated premiums,” “unreasonably high force-placed insurance premiums,” and “amounts charged for insurance coverage,” id.at 1326, such that “[t]he plain language of the complaints therefore shows that the plaintiffs are challenging the reasonableness of [the insurance company’s] premiums; and since these premiums are based upon rates filed with state regulators, plaintiffs are directly attacking those rates as being unreasonable as well,” id. The court described these claims “directly challenging the rates ... filed with state regulators” as “textbook examples of the sort of claims that we have previously held are barred by the nonjusticiability principle.” Id.
The other circuit cases on which the defendants rely are distinguishable from the plaintiff’s claims for precisely the reason Patel is: in each case, the plaintiffs directly challenged the filed rate.
Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *12-*13 (D.D.C. March 17, 2019) (Howell, Chief Judge).
In Krukas in contrast, "the Complaint at issue does not challenge the amount of the Medigap insurance rate or the amount collected by the insurance provider [UnitedHealth] that has been approved by state insurance agencies." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *13 (D.D.C. March 17, 2019). Other courts in other cases filed over AARP's collection of what it calls a "royalty" and plaintiffs call an unauthorized "commission" have reached different results over whether a filed rate doctrine applies, "but closer scrutiny shows this is due to differences in the claims asserted." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *13 (D.D.C. March 17, 2019).
This reasoning is easily distinguishable since the instant suit is not filed against UnitedHealth and does not challenge the legality of the approved rates charged by UnitedHealth. Rather, the plaintiff’s claims challenge AARP’s practices and disclosures regarding the defendants' retention of a portion of the rates UnitedHealth filed.
Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *14 (D.D.C. March 17, 2019).
Parenthetically, I say "apparently approved," because as the Court itself noted in the Krukas case, it would not consider exhibits proffered by the defendants at the motion-to-dismiss stage which "would be premature." Neither the defendants nor the Court wanted to treat the defendants' motion to dismiss as a motion for summary judgment "without a full record" regarding the information filed by the carrier with the insurance regulator. Instead, at the motion-to-dismiss stage "the Court looks only to the plaintiff's Complaint" in that case. Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *11 (D.D.C. March 17, 2019).
In sum, the filed rate doctrine is not in our stars, so to speak, it is in the claims that are alleged. The filed rate doctrine does not apply to conduct and practices that "are independent of any approved rates." The FRD does not exist when "resolution of these claims ... does not necessitate any determination about the reasonableness of the rate." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *15 (D.D.C. March 17, 2019). So take a look at what is alleged and what is proffered before a Court rules on the filed rate doctrine.
THE VOLKSWAGEN "DEFEAT DEVICES" ENORMOUS MDL CLAIMS.
This is the beginning of a triolgy of articles that will end our continuing series taking a look at the recent Multi-District Litigation lawsuits (MDLs) involving General Motors and Volkswagen. In this installment and in the next two articles after this one, we will bring the series to a close by taking a look at the Volkswagen "pollution defeat device" MDL. Our special focus will be trained on the secrecy involved in this huge lawsuit, secrecy that is built into multi-district litigation and similar huge lawsuits. To a great extent secrecy is a major reason such lawsuits exist in the first place.
Demands from the Federal Trade Commission in the first months of 2017 for the "policies, practices and procedures" used by a finance company regarding "technologies to track the location of borrowers' vehicles in case they need to repossess them," including "installing devices that enable them to remotely disable a car's ignition after a borrower misses a payment."
It is worth mentioning here that in a multidistrict litigation lawsuit against Hyundai and Kia, consisting apparently of plaintiffs who did not settle their claims with Hyundai and Kia the first time around, there are some 566 entries for pleadings and orders on the docket, and that many of the materials filed in the case concern sealing the evidence. I reviewed all 566 entries and although I may have missed one or more, it appeared that the trial judge granted every motion to seal that was ever filed in that case.
TOMORROW: THE VW MDL: ANOTHER STIPULATED PROTECTIVE ORDER.
 Fiat Chrysler Defeat Device claims: The United States and the State of California sued Fiat Chrysler over defeat devices that basically mimicked VW's defeat devices. The suits were settled in January 2019 with the Federal Government and the State of California for a combined total of some $330 Million in lieu of civil penalties alone (figures mine), on top of an additional maximum estimate of $185 Million in recall costs. See Neal E. Boudette, How Fiat Chrysler Overtook the Pack, New York Times, p. B3, January 15, 2019; Neal E. Boudette, Fiat Chrysler's Penalties Reflect Limits of Diesel, New York Times, p. B5, January 11, 2019.
"Illegal engine-control software" claims alleged by the United States against Fiat Chrysler Automobiles: See Neal E. Boudette, "Business Day Section / U.S. Sues Fiat Chrysler, Accusing It of Using Software to Pass Emissions Tests" (New York Times Online, May 23, 2017), available at https://nyti.ms/2qSYYuH.
Hyundai, Kia inflated mileage claims: After settling regulators' claims for $100 million, Hyundai Motor America and its related corporation Kia Motors America settled for an additional $400 million most of a lawsuit that was brought based on allegations of inflated fuel economy claims for their cars. See, e.g., Jerry Hirsch, "Hyundai, Kia Reach $400-Million Settlement Over Inflated MPG Claims" (Los Angeles Times Online, December 23, 2013), available at http://articles.latimes.com/print/2013/dec/23/autos/la-fi-hy-hyundai-kia-settle-mpg-lawsuit-20131223. It was reported four days after the lawsuit settlement was announced, or on December 27, 2013, that the president and CEO of Hyundai Motors America was stepping down and would be replaced when his contract ended on December 31, 2013. Ronald D. White, "Hyundai Motor America Chief John Krafcik to Step Down" (Los Angeles Times Online, December 27, 2013), available at http://articles.latimes.com/print/2013/dec/27/business/la-fi-hyundai-chief-resigning-20131228.
A class-action lawsuit against General Motors over alleged programming designed to cheat diesel emissions tests: See Neal E. Boudette, "G.M. Accused in Lawsuit of Deceit on Diesel Truck Emissions" (New York Times Online, May 25, 2017).
Demands from the Federal Trade Commission in the first months of 2017 for the "policies, practices and procedures" used by a finance company: See Michael Corkery and Jessica Silver-Greenberg, "DealBook / Federal Agency Begins Inquiry Into Auto Lenders' Use of GPS Tracking" (New York Times Online, February 19, 2017), available at https://nyti.ms/2lwZFaA.
 See Jerry Hirsch, "Hyundai, Kia Sued Again Over Inflated Mileage Claims" (Los Angeles Times Online, November 8, 2012), available at http://articles.latimes.com/print/2012/nov/08/business/la-fi-mo-autos-hyundai-fuel-economy-lawsuit-20121108.
Since an appellate court decision on January 23, 2018, that MDL continues still. The appellate court reversed the trial judge's approval of settlement in that case and sent it back for further proceedings. In re Hyundai and Kia Fuel Economy Litigation, 881 F.3d 679 (9th Cir. 2018), rehearing en banc granted (vacated as precedent in the Ninth Circuit pending rehearing en banc), 897 F.3d 1003 (9th Cir. 2018).
FILED RATE DOCTRINE DID NOT BAR STATUTORY UNFAIR PRACTICE CLAIMS.
In Washington State as elsewhere, the filed rate doctrine is a defense under certain circumstances. In basic and general terms as laid out by a federal court in the case of Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *5 n.1 (E.D. Wash. Nov. 21, 2018), it is Washington State law that the "filed rate doctrine" was made by courts to cover cases involving regulated utilities. The effect is to shelter the appropriately filed rate from attack, whether directly or indirectly. In other words, the reasonableness of a rate filed with a governing regulatory administrative agency and approved by that agency is a settled issue, not subject to dispute.
The Harvey case is an insurance case. Specifically, that case involves health insurance policies.
In the Harvey case, the plaintiff alleged that the defendants breached contracts and violated Washington's Unfair Business Practices and Consumer Protection Statutes by failing to deliver the benefits of their "Ambetter health insurance policy" which they allegedly promised and represented that they would deliver. The plaintiff alleged these claims on behalf of a putative class of Ambetter policyholders. Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *1 (E.D. Wash. Nov. 21, 2018).
In part here pertinent, the federal judge in Washington held in accordance with the concisely phrased headings of his rulings that "1. The filed rate doctrine does not apply to claims that are merely incidental to and do not directly attack Insurance Commissioner-approved health insurance premiums," Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *5 (E.D. Wash. Nov. 21, 2018), and "2. Harvey's claims are merely incidental to and do not directly attack Insurance Commissioner-approved health insurance premiums." Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *6 (E.D. Wash. Nov. 21, 2018). In short, claims based on allegations that the defendants did not deliver the insurance benefits they sold were not barred by the filed rate doctrine.
Even if the Court had not been completely convinced of this ruling, the Court went further in Harvey and stated that this decision was based on a motion to dismiss and "'the better practice'" in any case is to address the filed rate doctrine either on a motion or motions for summary judgment, or at trial. Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *7 (E.D. Wash. Nov. 21, 2018).
"THE INFLICTION OF STIPULATIONS ON LITIGATION OF FACTS AND ON SETTLEMENTS"
PART TWO OF TWO PARTS COMPLETED WITH ALL FOOTNOTES REPRINTED HERE ON THURSDAY, NOVEMBER 29, 2018.
The following reprint from the book, Catastrophe Claims: Insurance Coverage for Natural and Man-Made Disasters, is with the permission of Thomson Reuters West, the publisher, and Dennis J. Wall, the author of the reprinted selection. This selection, Section 2:19 (2018, Thomson Reuters), is reprinted here with permission of Thomson Reuters. Any further reproduction without the consent of the publisher is expressly prohibited.
Note: Access to hyperlinked citations are restricted by Thomson Reuters West in this publication; subscription may be required by Thomson Reuters West to access the hyperlinked citations that appear below.
Beyond the three cases which have just been discussed, each decision coming from a different Federal Court and a different jurisdiction, Ursomano from California, Ali from Oklahoma, and Keller from Washington State, there are many other lender force-placed insurance class action cases and many other types of cases which are pending and others which are likely to be filed in the future. Some of those class actions will involve the same defendants as in cases which have settled and in which a “class” has been “certified for settlement purposes,” as in the Fladell case. Orders in those cases will be used in defense in other cases, whether or not they contain expressions of res judicata, preclusive effect as does the stipulated settlement order in Fladell.
Although the Fladell case was ultimately settled by a stipulated agreement which the Court approved in that case, it is interesting to note the several objections which the Fladell defendants raised to class certification when they were against it and before they were for it.
In the Fladell case, the defendants pointed out in their opposition that the plaintiffs were seeking limited certification. According to the Fladell defendants, the plaintiffs requested certification of a national class on three Federal claims but not of their Florida law claims, for which the plaintiffs requested certification “of a Florida-only class.”20 That statement obviously contradicts the position taken afterward by the same defendants in other legal proceedings, that the Fladell class settlement bars all lender force-placed insurance claims in all other cases in the nation.
In approving the Fladell parties' settlement agreement, the parties and the Federal Judge said that the Florida class action settlement complied with Federal Rules 23(a) and 23(b). Rule 23 requires among other things that the proposed class action procedure be a superior means of adjudicating the alleged claims and that the current named plaintiffs are adequate to represent the alleged classes in pursuing those claims.
It is noteworthy but perhaps not entirely surprising that District Judges often make their secrecy decisions in unreported Orders. Being unreported, they are much harder to find than reported decisions. In one such secrecy Order, captioned “ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL,”25 a District Court treated a motion for class certification as a nondispositive motion even though disposition of the motion for class certification was at the heart of the plaintiffs' collective claims. The parties once again stipulated to secrecy, in this instance, to request that exhibits filed in connection with the motion for class certification should be kept secret. Applying an explicitly lesser standard for sealing documents and parts of documents when they are exhibits concerning “nondispositive” motions as opposed to dispositive motions, the District Court entered its Order granting the parties' stipulation to “file all documents sought to be sealed in redacted form consistent with their joint submission.”26 In other words, the holding that a motion to certify a class in a case in which the reason for the lawsuit's existence lies in class certification -- and few if any putative class action lawsuits fit into any other category -- drove the decision to keep documents secret which probably and almost certainly would support the plaintiffs' substantive claims in the case.
© 2018 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.
Houston Cas. Co. v. Charter Oak Fire Ins. Co., No. 1:16-cv-535-LJO-EPG, 2017 WL 35500 at *1 (E.D. Cal. January 3, 2017).
Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 *9 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
See Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 *9 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
See generally Dennis J. Wall, “Conditional and Other ‘Nonspecific’ Objections to Discovery Are No Objections at All in an Insurance (or in Any Other Case),” 33 Ins. Lit. Rptr. 437 (2011).
Floyd Norris, “High & Low Finance / Failed Bank's Broken Vows Mean Little” p. B1, col. 1 (New York Times Nat'l ed., “Business Day” Section, Friday, September 19, 2014). The order of the Federal Court in North Carolina can be found in FDIC v. Rippy, Order of September 10, 2014 granting defendants' summary judgment motion, Dkt. No. 124 (E.D.N.C. Case No. 7-11-cv-00165-BO).
FDIC v. Rippy, Dkt. No. 124, Order of September 10, 2014 granting defendants’ summary judgment motion, at p. 3 (E.D.N.C. Case No. 7-11-cv-00165-BO).
FDIC v. Rippy, Dkt. No. 71, May 21, 2013 Amended Stipulated Protected Order and Non-Waiver Agreement, at p. 2 (E.D.N.C. Case No. 7-11-cv-00165-BO).
Fed. R. Civ. P. 26.
The new reference to trade secrets and other confidential commercial information reflects existing law. The courts have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure.
An alternative to secrecy stipulations pursued in the cases, is to settle the class action case and provide for secrecy in the settlement agreement which the Court is then requested to approve. This method of obtaining secrecy is at work in the class action lawsuit filed against the high-profile corporations of Silicon Valley who allegedly conspired to limit their workers' “mobility and incomes.” David Streitfeld, “New Accord is Expected in Hiring Ban,” p. B1, col. 5 (New York Times Nat'l ed., “Business Day” Section, Thursday, January 15, 2015). As explained in this Times report, a second settlement agreement was reached in the case and presented to the Court for approval “[t]o head off a trial and the exposure of reams of incriminating emails.” The Federal District Judge already rejected one settlement because the amount was too low to be “‘within the range of reasonableness,'” i.e., the original settlement amount presented for the Court's approval was unreasonably low. Although the second attempt at a settlement agreement contains more money, “[t]he settlement money is pocket change to the companies, which include some of the world's wealthiest. If they let the case go to trial, however, it might corrode their image as forward-thinking, worker-friendly benevolent empires.” David Streitfeld, “New Accord is Expected in Hiring Ban,” p. B1, col. 5 (New York Times Nat'l ed., “Business Day” Section, Thursday, January 15, 2015).
Fladell, et al., Plaintiffs v. Wells Fargo Bank, N.A., et al., Defendants (S.D. Fla. Case No. 13-cv-60721), app. dismissed (unreported) (11th Cir. August 4, 2015).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, 2014 WL 644340 *1-*2 (N.D. Cal. February 19, 2014).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, 2014 WL 644340 *2 (N.D. Cal. February 19, 2014).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, Dkt. No. 74 filed on Nov. 12, 2014 (N.D. Cal. Case No. C-13-4381).
See, e.g., Keller v. Wells Fargo Bank, N.A., No. C14-422, 2014 WL 6684895 *2-*3 (W.D. Wash. November 25, 2014) (“limited injunction” ultimately granted against defendants foreclosing on plaintiffs' home so as to allow the plaintiffs to prove that their case is not included in the Fladell settlement).
Fladell v. Wells Fargo Bank, N.A., No. 13-cv-60721-FAM, Dkt. No. 108 [hereinafter “DE 108”], filed December, 2013 (S.D. Fla. Case No. 13-cv-60721-FAM), app. dismissed (unreported) (11th Cir. August 4, 2015).
DE 108 at page 1.
DE 108 at page 19.
Fladell v. Wells Fargo Bank, N.A., 2014 WL 5488167 *7 (S.D. Fla. Oct. 29, 2014), app. dismissed (unreported)(11th Cir. August 4, 2015).
Stitt v. Citibank, N.A., ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL, Dkt. No. 152 Filed December 17, 2015 (N.D. Cal. No. 4:12-cv-032892-YGR).
Stitt v. Citibank, N.A., ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL, Dkt. No. 152, at p.2, Filed December 17, 2015 (N.D. Cal. No. 4:12-cv-032892-YGR).
See, e.g., 1 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 3:107, “Settlement of third-party bad faith claims: Confidentiality (protected) or concealment (void)” (3d Edition and 2017 Supplement, Thomson Reuters West); 2 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 9:28, “Settlement of first party bad faith claims: Confidentiality (protected) or concealment (void)” (3d Edition and 2017 Supplement, Thomson Reuters West), examining among other things, Florida Statute Section 69.081.
The above reprint from the book, Catastrophe Claims: Insurance Coverage for Natural and Man-Made Disasters, is with the permission of Thomson Reuters West, the publisher, and Dennis J. Wall, the author. This selection, Section 2:19 (2018, Thomson Reuters), is reprinted here in its entirety with permission of Thomson Reuters. Any further reproduction without the consent of the publisher is expressly prohibited.
NEW: "INJURY IN FACT": WHAT HAPPENS TO INSURER BAD FAITH STATUTES?
A pdf of this new section can be accessed here or on my website at www.dennisjwall.com.
9:14.50. “Injury in Fact”: What happens to bad faith statutes?
Claims handling and penalties statutes regulating the business of insurance may not any longer provide causes of action to many policyholders and claimants.
In 2016, the Roberts Court grafted a requirement onto the U.S. Constitution which is not found in it—standing — but which is instead found in the Court's cases. Cases decided in lower courts since the Roberts Court raised standing to a constitutional prerogative are divided over whether Congress and State Legislatures can provide standing by providing remedies for statutory violations.
One of the elements of standing is “injury in fact,” which the Spokeo Court raised to “a constitutional requirement” which bars legislatures from conferring standing on people and organizations in most cases. To establish injury in fact, a person invoking a statutory remedy now must meet a newly-found constitutional requirement that she or he had a legally protected interest that is concrete and individualized to her or him, and that the harm is “actual” or “imminent,” not “conjectural” or “hypothetical.”3The Spokeo case itself was presented when Mr. Thomas Robins filed a lawsuit claiming an alleged violation of the Fair Credit Reporting Act by an internet search engine service which incorrectly provided information to the world about him. The Roberts Court remanded for a determination of whether Robins adequately alleged an injury in fact in his complaint.
As it has done by replacing “ultimate facts” pleading with “plausibility” pleading, in which allegations of fact in a complaint must be weighed by each individual judge who must dismiss the complaints that he or she does not think are “plausible,” the Roberts Court has laid down another obstacle to filing lawsuits in Federal Courts.4 It is fundamental to its process to note how many times the Court would have people believe that its work has consisted for several years now of finding procedural and constitutional limitations which other Courts somehow must have overlooked.
However, this decision is by no means alone.8 In Spokeo itself, the Court deciding that case remanded for a determination of “plausibility,” in effect, of whether Thomas Robins and persons like him had alleged injury in fact as the U.S. Constitution now apparently requires.
If the idea of “injury in fact” has been elevated surreptitiously from standing to the U.S. Constitution, it can certainly have an effect on claims based on State statutes providing remedies to ‘private attorneys general’ that the States rely on to enforce the laws. Time will tell whether State Unfair Claim Handling Practices Acts and Penalties Statutes governing the business of insurance will feel the effects and, if so, how.
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Spokeo, Inc. v. Robins, U.S. , 136 S. Ct. 1540 (2016).
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547-48 (2016).
See, e.g., Klika v. Capital One Bank, N.A., No. C15-0107RSL, 2016 WL 4544373 at *1 (W.D. Wash. June 30, 2016), and “PLAUSIBILITY AS A STANDARD? DON'T BELIEVE IT,” published on Insurance Claims and Issues Blog on Monday, May 1, 2017, at http://insuranceclaimsissues.typepad.com/insurance_claims_and_issu/2017/05/plausibility-as-a-standard-dont-believe-it-its-just-another-way-of-saying-theres-nothing-left-to-lose-with-apologies-to-m.html.
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540 (N.D. Cal. June 22, 2017).
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540at*1 (N.D. Cal. June 22, 2017).
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540at*6 (N.D. Cal. June 22, 2017).
E.g., Ferrell v. HSI Fin. Serv's, LLC, No. 1:16-cv-04624-RWS-AJB, 2017 WL 8186795 at *4 (N.D. Ga. December 22, 2017) (“After careful consideration of the pleadings and the rapidly expanding catalogue of case law interpreting and applying Spokeo, the undersigned is persuaded that Plaintiff's pleadings are sufficient to establish standing. The Court finds Defendant's motion unavailing on several grounds.”); Abraham v. Ocwen Loan Servicing, LLC, 321 F.R.D. 125, 166 (E.D. Pa. 2017) (“Numerous courts have applying Spokeo found a sufficient ‘injury in fact’ to support a FDCPA claim from allegations that a plaintiff suffered an ‘informational injury’ because the character of a debt had been misrepresented.”).
Progressive Health & Rehab Corp. v. Strategy Anesthesia, LLC, 271 F. Supp. 3d 941 (S.D. Ohio 2017) (“Indeed, as Plaintiff points out, the overwhelming number of courts that have addressed standing in a TCPA case subsequent to Spokeo have found standing.”) (pinpoint page references not available in April 2018).
Lovess v. Embrace Home Loans, Inc., No. JKB-17-2212, 2017 WL 4745452 at *2 (D. Md. October 20, 2017) (“This case is very close to Spokeo, but not quite there. Plaintiff is similarly alleging a procedural violation of FCRA and claiming that she is harmed by potential future consequences. But she has also alleged actual damages in the amount of $100,000 stemming from emotional distress and mental anguish, and therefore this is not a ‘bare’ procedural violation of the type at issue in Spokeo.”).
In re Chrysler-Dodge-Jeep Ecodiesel Marketing, Sales Practices, & Prod's Liab. Lit., No. 17-md-02777-EMC, 2018 WL 1335901 at *6 (N.D. Cal. March 15, 2018)(“Because Plaintiffs allege a financial injury, Spokeo does not support dismissal of their case.”).
Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1002-03 (11th Cir. 2016).
See, e.g., Weldon v. MTAG Services, LL, No. 3:16-cv-783 (JCH), 2017 WL 776648 at *6 (D. Conn. Feb. 28, 2017).
See Tillman v. Ally Fin. Inc., No. 2:16-cv-313-FtM-99CM, 2016 WL 6996113 at *4 n.7 (M.D. Fla. Nov. 30, 2016).
See also Michael G. McLellan, “Finding a Leg to Stand On: Spokeo, Inc. v. Robins and Statutory Standing in Consumer Litigation,” 31 Antitrust 49 (Summer 2017).
Fat Bullies Farm, LLC v. Devenport, 170 N.H. 17, 28, 164 A.3d 990 (2017).
Fat Bullies Farm, LLC v. Devenport, 170 N.H. 17, 164 A.3d 990, 998–99 (2017).
© 2018 Thomson Reuters. No claim to original U.S. Government Works.
Reprinted from Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith, Third Edition (Thomson Reuters). Further reproduction of this article without the express consent of the publisher is prohibited.
MAYDAY, MAYDAY! INSURANCE ADJUSTERS LIABLE UNDER WASHINGTON CONSUMER PROTECTION ACT!
In Washington State, a motorist was injured in an accident. The injured motorist brought an action against the adjuster for the at-fault motorcyclist's automobile insurance company. The injured motorist sued for bad faith and for alleged violation of the Washington Consumer Protection Act.
The Superior Court, King County, Washington, Case No. 15-2-18663-9, John P. Erlick, J., dismissed the injured motorist's action but certified the case for discretionary review, which was granted.
individual insurance adjusters can be liable for a violation of the Washington Consumer Protection Act.
"Thus, we hold that an individual insurance adjuster may be liable for bad faith and CPA violations." Holding of the appellate court: Reversed and remanded.
The case in the appellate court is published at Keodalah v. Allstate Ins. Co., 413 P.3d 1059 (Wash. Ct. App., Div. 1, 2018).
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WELLS FARGO CONSENTS TO CONSUMER FINANCIAL PROTECTION BUREAU ORDER.
Wells Fargo has consented to "pay a civil money penalty of $100 million to the [Consumer Financial Protection] Bureau." The Consent Order is available here: Download CFPB CONSENT ORDER WITH WELLS FARGO.092016_cfpb_WFBconsentorder, or through a link made available by the CFPB on its website at http://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf. The quoted material is from Paragraph 57 on page 17 of 26. The Order was signed on September 4, 2016 (and so that is its "Effective Date," by its terms), and filed on September 8, 2016.
Parenthetically, Wells Fargo also agreed to pay a totally separate amount of "$50,000,000 in civil penalties" in an earlier settlement stipulation with the City Attorney of the City of Los Angeles entered on September 1, 2016 available through this hyperlink provided on the City Attorney's website. That settlement stipulation awaits the entry of Final Judgment in a pending action in the Los Angeles County Superior Court.
These developments are being reported on the day that this article is written. The developments are so new and so related to bad faith that I could not help but make this information and these documents available to my readers. As is often the case, however, there are unanswered questions arising from these developments.
So, the first question is, why?
The answer to the first question may be related to some or all of the remaining questions. The CFPB's Consent Order relied on "an analysis" that Wells Fargo "performed" to "assess" improper sales practices by its employees, which it may or may not have induced, between May, 2011 and July, 2015. (Id., paragraph 15 on page 5.) What "analysis?" No documents resembling an analysis were made available by Wells or by the CFPB, and it even appears that the CFPB did not request any documents.
Whatever the Wells "analysis" may be, Wells attached numbers to two things in the Consent Order as a result.
Perhaps these two areas of apparent misconduct were the only ones mentioned in press reports because they are the only ones provided with numbers in the CFPB Consent Order.
In any event, how did the CFPB come to publish the numbers provided by a Respondent as part of the CFPB's own "Findings and Conclusions" in this Consent Order? If the CFPB performed its own investigation -- and there is no indication that it did -- then the CFPB certainly remained quiet about it.
So, what we end up with are quite a few questions about exactly what went on in this "bad faith" matter. And answers provided only by the accused party, it seems.
This may be the moral equivalent of a stipulated final judgment of bad faith in which the company was willing to stipulate that it did nothing wrong and, such as in this case, the company is paying for the misdeeds of more than 5,300 bad apples or "rogue employees."
Please Read The Disclaimer. ©by Dennis J. Wall. All Rights Reserved.
The problem of systemic or institutional bad faith is pervasive. It goes well beyond the insurance industry.
The numbers show this clearly. For just one telling statistic among many available, "40% of the population … must rely on payday loans". Mehrsa Baradaran, How the Other Half Banks 76 (2015).
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). All rights reserved.
ONCE "ACTING," ONCE "CONFIRMED" PENNSYLVANIA "ACTING" INSURANCE COMMISSIONER OVERRULED.
A Pennsylvania Court has overruled a decision promulgated by one-time Pennsylvania "Acting Insurance Commissioner" Teresa D. Miller. It appears that Ms. Miller, then the PIA, later the CIA (Confirmed Insurance Commissioner), approved business transactions between one Erie Insurance Exchange and Erie Indemnity Company through which Indemnity received, or kept, money paid as "installment and other service charges from Exchange subscribers.'” Ms. Miller administratively ruled that these exchanges did not violate "the [Pennsylvania] Insurance Holding Companies Act (IHCA)." The Pennsylvania Court vacated the Commissioner's decision. Erie Ins. Exch. v. Pennsylvania Ins. Dep't, No. 872 C.D.2015, 2016 WL 324682, at *1 (Pa. Commw. January 27, 2016).
Attorney's fees, costs, whatever. Sometimes people keep on paying for someone else's decisions.
While PIA, Ms. Miller previously decided, too, that fracking does not cause earthquakes. As a result of that decision, homeowner's insurance companies in Pennsylvania cannot issue homeowner's insurance policies with an exclusion for earthquake damages caused by fracking, because fracking does not cause earthquakes she said. See the articles posted on Insurance Claims and Issues Blog on April 20, 2015 and April 22, 2015, which contain links to other articles on the subject.
Please Read the Disclaimer. ©2016 by Dennis J. Wall. All rights reserved.
No Coverage, No Bad Faith Under Pennsylvania Law.
Pennsylvania Supreme Court: "Yes" to Assigning Statutory Bad Faith Claim.
Texas Drilling Damage in Pennsylvania: All Risks Property Coverage?
FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT PREEMPTED.
"By its express terms," said the Court, the Florida Deceptive and Unfair Trade Practices Act "'does not apply to ... [b]anks and loan associations regulated by federal agencies.'" Wilson v. Everbank, N.A., 77 F. Supp. 3d 1202, (S.D. Fla. 2015), quoting Fla. Stat. Section 501.212(4)(c). The Court accordingly granted a federally regulated savings and loan association's motion to dismiss a FDUTPA claim with prejudice in that lender force-placed insurance practices case.
However, the Court entertained a cornucopia of claims allegedly arising under Florida, New York, or Illinois law, some of which it left standing, including claims based on the Truth-in-Lending Act, and alleged breaches of contract and of the implied covenant of good faith and fair dealing.
Please Read The Disclaimer. Copyright 2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). Listen to the author's most recent Thomson Reuters Legal Current podcast. All Rights Reserved.
Federal Loan Modification Program Another Profit Center for Predatory Lending.
CLASS ACTION SETTLEMENTS BECOME LEGALIZED WEAPONS OF MASS DESTRUCTION.
This article is an adaptation of a much longer article (Wall, 2015).
A possible defense of res judicata arises as a result of recent class action settlement agreements: Can a party obtain the right to raise res judicata in other cases because of a Court-approved class action settlement in one action, that the party could not have obtained unless the Court approved a settlement because the Court never otherwise certified a class in that action?
Not only that, but the case law also features parties raising the settlement agreement who in the end did not have to do anything more than talk about it in order to convince a Federal Judge to bar other claims.
As a starting point, the focus of attention was a Federal case in Florida in which the Federal Court approved a nation-wide class action settlement of lender force-placed insurance (“LFPI”) claims. The settlement agreement in that Florida case included the LFPI claims, if any, which are or might be held by absent persons. The “Order Granting Final Approval to Class Action Settlement” in that case is reported at Fladell v. Wells Fargo Bank, N.A.1 The author’s research has turned up three cases in which the mere fact of a class action settlement in Florida in the Fladell case was raised as a bar to prosecuting the civil actions of other persons in other jurisdictions.
This turns the affirmative defense of res judicata or claim preclusion on its head in several ways. One way is that at least three District Judges were confronted with representations by lawyers that the claims alleged by people in a case at bar should be halted because they, the lawyers, knew about a settlement of allegedly similar claims in a class action in a different State. Further, the burden of proof on affirmative defenses lies with the party raising them, rather than on the parties opposing the defenses.
Among the claims alleged in Lee are claims for damages for Florida unjust enrichment and tortious interference, breach of fiduciary duty, violation of the implied covenant of good faith and fair dealing, and alleged violations as well of the Florida Deceptive and Unfair Trade Practices Act.
In determining the settlement class in Lee, the Magistrate Judge cited a precedent which held that the Court is not endorsing any evidence or arguments in that process. However in actuality the Magistrate Judge also purported to make determinations that the settlement class in Lee should be certified in part because “[t]here are questions of law or fact common to the members of the Settlement Class.” The Court in Lee made this determination without ever mentioning what those common questions are, let alone making any attempt to identify even one of them as “predominant”.
In sum, the preliminary settlement order submitted by the parties and signed by the Magistrate Judge in Lee contemplates that objections to the settlement and to the Preliminary Order approving the settlement will be considered at the Final Approval Hearing. The final hearing, now rescheduled by Court Order,15 is due to be held as of this writing, in Miami on June 11, 2015. Objections presented in compliance with the Court’s preliminary Order are due to be entertained at that time.
FN1 Fladell v. Wells Fargo Bank, N.A., No. 0:13-cv-60721, 2014 WL 54881677 (S.D. Fla. October 29, 2014). Many notices of appeal were filed from this order. Their dates and dispositions are available on PACER. Several appeals are still pending as of this writing. See also Dennis J. Wall, “Class Action Settlements Have Consequences, From Florida to the State of Washington,” 69 NWLawyer 27 (April/May 2015).
2 Ursomano v. Wells Fargo Bank, N.A.,No. C-13-4381 EMC, 2014 WL 644340 *1-*2 (N.D. Cal. February 19, 2014). The Ursomano case was dismissed by the Court’s own Order on October 30, 2014 and again on November 13, 2014 by Court Order approving the parties’ stipulation of dismissal, which expressly stated that it did not affect claims of absent persons who would not fall within the class in Fladell.
3 Ali v. Wells Fargo Bank, N.A., No. CIV-13-876-D, 2014 WL 819385 *2 (W.D. Okla. March 3, 2014).
4 Keller v. Wells Fargo Bank, N.A., No. C14-422 RAJ, 2014 WL 6684895 *2-*3 (W.D. Wash. November 25, 2014). In this decision, the District Judge in the Keller case allowed Mr. and Mrs. Keller, the plaintiffs, “an opportunity to come forward with evidence or argument that demonstrates that they opted out of the [Fladell Florida] settlement or that their claims are somehow not covered by the settlement.” The District Judge dismissed the Kellers’ case with prejudice after the defendant notified the Court that it was informed that the Kellers would not contest dismissal, and incidentally, that the Kellers had twice filed for bankruptcy already.
The presiding District Judge in the Ursomano case approved this stipulation without issuing a written Order, according to PACER.
6 These efforts are also joined by unrelated third parties such as mortgage servicers and their related affiliates and subsidiaries and partners. Among mortgage servicers, one, Ocwen, is prominent.
7 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220 (S.D. Fla. Report and Recommendations of U.S. Magistrate Judge Goodman, January 13, 2015), report and recommendations adopted on appeal, 2015 WL 309441 (S.D. Fla. January 23, 2015 Order by USMJ Goodman sitting by consent of the parties after his report and recommendations were made 10 days earlier).
8 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, *4 (S.D. Fla. Report and Recommendations of U.S. Magistrate Judge Jonathan Goodman, January 13, 2015), report and recommendations adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; USMJ Jonathan Goodman).
9 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, *3 (S.D. Fla. January 13, 2015 Report and Recommendations of U.S. Magistrate Judge Jonathan Goodman), report and recommendations adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; USMJ Jonathan Goodman).
10 Lee v. Ocwen Loan Servicing, Docket No. 106 filed 12.01.14 (S.D. Fla. Case No. 0:14-cv-60649).
11 This holding was reached in an earlier lender force-placed insurance practices case in the same Southern District of Florida: Kunzelmann v. Wells Fargo Bank, N.A., No. 9:11-cv-81373-DMM, 2013 WL 139913, *7-*10 (S.D. Fla. January 10, 2013).
13 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, at p. *3, ¶ 5 (S.D. Fla. January 13, 2015 Report and Recommendations of Goodman, USMJ), adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; Goodman, USMJ).
14 See, e.g., Karhu v. Vital Pharmaceuticals, Inc., No. 13-60768-CIV, 2014 WL 815253, *10 (S.D. Fla. March 3, 2014), dismissed on March 27, 2014 and appeal filed on April 15, 2014 (both unreported); Kunzelmann v. Wells Fargo Bank, N.A., No. 9:11-cv-81373-DMM, 2013 WL 139913, *7-*10 (S.D. Fla. January 10, 2013).
15 Lee v. Ocwen Loan Servicing, Docket No. 127 (S.D. Fla. Case No. 0:14-cv-60649).
Please Read The Disclaimer. Copyright 2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). www.lenderforceplacedinsurance.com All Rights Reserved. No Claim to Original U.S. Government Works.
ROBOSIGNING VIOLATES LAW, SO DOJ REQUIRES ... PAY MONEY, NO SANCTIONS.
FAILING TO OBEY EVEN COURT RULES WOULD NOT RESULT IN SANCTIONS IMPOSED BY COURT.
The United States Department of Justice has a history of settling claims against large financial institutions rather than trying them. Moreover, it is apparent that the DOJ also has a policy not to accuse individuals at large financial institutions of wrongdoing.
These strains of policy came together in a matter involving the U.S. Trustee Program and the Bankruptcy Courts of the United States. The inappropriate result in this case is the central focus of this article.
The Trustee Program took certain "actions ... in districts around the country concerning [J.P. Morgan] Chase's improper practices in bankruptcy cases, including robo-signing." This is the DOJ's description in a press release announcing that the DOJ has settled the U.S. Trustee Program's "actions." Press Release, Department of Justice Office of Public Affairs, Tuesday, March 3, 2015. These actions and the announced "robo-signing" deserve a little closer look.
First, the announced offense. Statutes and Court Rules require that affidavits and declarations under oath shall be submitted to Judges based on the declarant's personal knowledge, if they are supposed to be considered by the Courts as evidence. "Robosigning" means that the persons testifying to their personal knowledge actually did not have personal knowledge. It means that these same persons had no idea what was in the documents that they swore they knew all about.
"Robosigning" never involves what might be called schoolyard bragging. The robosigned affidavits and declarations -- so-called because they are signed so fast that the declarants swear and sign them like robots -- are always submitted as evidence. Otherwise there is no purpose to them.
Chase "acknowledged," i.e., admitted , according to the DOJ's press release, "that it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices." [Emphasis added.] Chase even outsourced some of the 'signings' to "individuals employed by a third party vender on matters unrelated to checking the accuracy of the filings."
So, the United States Department of Justice was presented with a case in which 50,000 persons allegedly committed perjury. These 50,000 people signed false or incomplete papers which falsely declared that persons in bankruptcy should be subjected to payments for mortgage debts, so-called "payment change notices."
Not one of the 50,000 people involved in this practice faces any sanctions, or at least the DOJ does not mention any in its press release. The only thing achieved in this perjury settlement is that Chase will pay some money.
That is not sufficient to maintain the integrity of the Courts including the Bankruptcy Courts of the United States. No-one should ever be permitted to declare the truth of something under oath which they know not to be true. Declarants committing perjury should still suffer the consequences of their perjury for the sake of preserving the integrity of the judicial system -- and for preserving the willing obedience of every member of society to the rules and rulings of the Courts. This settlement does not even come close to serving that purpose.
The DOJ's settlement on behalf of the U.S. Trustee Program has reportedly been submitted for approval to the United States Bankruptcy Court in the U.S. District Court, Eastern District of Michigan. The DOJ press release does not provide the case number. An Internet Search by the author does not reveal it either, although the author's search did turn up many places in which the terms of the DOJ's press release are either repeated or summarized.
The readers of this column are invited to register their comments in accordance with the rules of the Court.
PRAYER FOR RELIEF. The Court in that case is respectfully requested to impose sanctions and require more than the payment of money in this settlement, which is all that the Department of Justice was content to require, if this settlement proceeds at all.
Secret Insurance Bad Faith: Presumptions, Rebuttals and ... Stipulations.

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As Christians we often celebrate the Gospel. We celebrate that wonder that God would save undeserving sinners not according to deeds that they have done, not according to human effort, but by his sovereign mercy. It’s a truth we glory in daily.
And at Christmas, we reflect on this truth. The wonder of God’s plan in bringing salvation to sinners.
Today, we will look at a few verses in the Gospel of Luke together. Turn with me please to Luke 1.
This passage reveals the human side of God fulfilling a divine plan. What did the human characters think and feel and do when God was at work in their lives as recorded here for us in Scripture. It’s a historical record of the events surrounding the birth of Jesus.
In our passage today, we will see two women, Mary and Elizabeth, marvel that God has sent his Messiah, and that Mary is his mom and reflect on the joy of God making good on his promise. God can be trusted to fulfill his promises—you can always bank on them, and he promises to save all who call upon his name.
There is a timestamp here and a transition from v. 38. End of v. 38—and the angel departed from her. And, (v. 39) now at this very time Mary arose.
The story begins when an angel named Gabriel comes to visit Mary in v. 26 to let her know the new that she’s going to be a mother soon to a very special baby.
It’s a shocking message because Mary is a virgin. But Mary believes Gabriel’s message, and then he lets her know that her relative Elizabeth, who was barren, also had a miraculous conception.
She was in old age past child-bearing years and God miraculously gave her a son. And she’s already six months along in the pregnancy.
So Mary, lives in Nazareth, up in Galilee (same hometown as Joseph). She catches her breath from the news. She stands up (the text says she arose) and she went in a hurry. She wasted no time. Her destination in an unspecified city in Judah.
She’s going to visit her relatives Elizabeth and Zacharias.
The hill country of Judah puts her trip somewhere between 80-100 miles. So that’s about Albany to Vancouver, Washington or Sisters. Roughly a 3-4 day journey on foot. Not a common or safe trip for a teenage girl to make on her own.
But there’s no indication that she had anyone accompany her.
It would have been an intense moment. In one conversation her entire life has been flipped upside down. Mary is vulnerable and no doubt overwhelmed.
It’s a big deal to find out you are pregnant. Then you add the fact that you aren’t married. Then you add the fact that this child has a divine origin. That’s pretty overwhelming. It’s not an easy circumstantial pill to swallow, but she trusts God.
Luke 1:38—And Mary said, “Behold, the bond-slave of the Lord; may it be done to me according to your word.” And the angel departed from her.
She embraces God’s plan. And God is so kind to Mary.
Just consider—God miraculously opened the womb of Mary’s older female relative just six months prior. Another believer, another persona who knows what she’s going through and will believe her.
Mary has the promise of God, but her story isn’t exactly very believable.
An unmarried teenage girl ends up pregnant and her story is that the Holy Spirit overshadowed her? But Elizabeth will believe her. God providentially orchestrated Zacharias and Elizabeth could be a source of consolation right now.
Boy I’ll tell you what. When you are in a tough spot and God provides a mature saint, whose walked that path before you it is such an encouragement.
Of course, Elizabeth had no idea God was going to use her in this way when she was rejoicing over her own pregnancy. It’s just like our Lord to do these things in caring for his people.
(40) and entered the house of Zacharias and greeted Elizabeth.
Mary arrives and when we read that she greeted Elizabeth. There is much more here than a hug and a kiss.
It’s the back and forth getting brought up to speed on life.
(41) When Elizabeth heard Mary’s greeting, the baby leaped in her womb; and Elizabeth was filled with the Holy Spirit.
Now six months into pregnancy Elizabeth has already felt little Johnny kicking in her womb. First pregnancies typically you feel the kicking later as you learn it. This is Elizabeth’s first child.
But what she experienced here was significant and it was a sign that the Spirit of God had come upon her.
Crying out with a loud voice means yelling. And although there is excitement and urgency here, there is more than just excitement going on here.
Crying out with a loud voice is a technical reference to something that prophets do. A prophet is a mouthpiece for God. A prophet receives revelation directly from god and communicates it to others.
Paul says that Isaiah cries out in Romans 9:27; Jesus cries out to sinners in John 7:37; John the Baptist cries out in John 1:15 as he prepares the way for the Lord.
In this moment, Elizabeth just became a prophetess. Prophets are the boy version, prophetesses are the girl versions. The Spirit of God is giving her revelation. A special message to encourage Mary.
This particular prophecy by Elizabeth is actually a song.
God saving his people makes us sing.
We will sing about Jesus tomorrow night as we celebrate his birth. And that’s appropriate. Five times in the opening of Luke we find singing about the news that Jesus is coming. This is the first of those five.
This hymn pronounces blessing on Mary, on her child, on Elizabeth and all those who believe in God’s truth.
Now this is not an easy thing to say if you aren’t humble.
Elizabeth is using a Hebrew figure of speech meaning you are the woman of all women. No woman has greater privilege on earth. No greater honor.
What is it that causes Mary to be blessed? She gets to be the mom of the Messiah, which brings both positional and practical benefits.
Positionally. In Jewish culture a mother’s identity is connected to her children for better or for worse. Proverbs 29 says that an undisciplined child disgraces his mother. On the positive side, Mary will get called out thirty years from now and publicly blessed as a woman marvels at the teaching of Jesus.
Mary has a high position to be associated so closely with Jesus, for all time. And not only was this positionally a high honor, but it was a practical honor as well.
I mean, just consider for a moment, in the intimacy of a mother-son relationship, this teenage girl gets to nurse God, to sing lullabies to him, to comfort him and train him and love him. Mary had the most intimate human relationship with her maker than any other person on earth.
She had a front row seat to his perfect obedience day in and day out. Surely there is no greater honor than to spend your days and nights with Jesus as he grew up.
At the same time, we need to be clear here on what Mary was not.
The Roman Catholic Church has taught error regarding Mary. Mary is not called the mother of God in Scripture. She is the mother of Jesus who was God. In other words, Mary was a sinner. She wasn’t without original sin.
And now she isn’t the mother of the church by her union with Christ. She didn’t play a special role in bringing the church about through her prayers. She is in no way our Advocate, Helper, Benefactress, and Mediatrix. She’s not our model of faith and charity, she is not a perpetual virgin and she is not Queen over all things.
Mary was a sinner saved by God’s grace through her son Jesus Christ by faith. And in that salvation she needed it just as much as the vilest sinner and after salvation she stands in the same grace of every believer.
Her role was temporary and earthly and there is no spiritual significance that goes beyond that. Understood rightly, as we will see, she is surely an example to us, but only insofar as all true believers are an example to us when they are dependent upon God.
Mary is blessed, but we must understand that blessing properly.
And blessed is your son, the Messiah.
Elizabeth under the inspiration of the Holy Spirit right now is affirming what Mary has been told already by Gabriel. That your son will be your deliverer (31); he will be great (32); he will be God, the Son of the Most High (32); the heir to the throne of David the promised King (35); a holy child (35).
He’s the one we’ve been waiting for.
(43) “And how has it happened to me, that the mother of my Lord would come to me?
And you know what? I’m blessed just by knowing you and having you visit me. The mother of my lord, my master. She views this child that is in the first days of gestation as being her God, her master.
Up until now, Luke has been narrating. But now he switches to Elizabeth and she recounts to Mary in her words, what Luke just told us back up in v. 41.
So the women are sitting there, they are conversing, and Elizabeth says to Mary.
(44) “For behold, when the sound of your greeting reached my ears, the baby leaped in my womb for joy.
I picture this as a proud mother moment.
I mean every mother thinks her baby is so special. Elizabeth is thinking, my baby has so much discernment that he leaped for joy when he heard your voice. Obviously, this was a special work enabled by the Spirit of God.
When the angel came to Mary, she believed God.
Now Mary did ask a “how” question in v. 34, when she received the news that she would bear a son. But it was a fair question. God who sees the heart saw it not as disbelieving the angel, but rather an honest request for logistical clarity on how she a virgin would find herself with child.
Once explained, she tells Gabriel in v. 38—I understand, and I’m good with it.
Here then it is fair to hold up Mary as an example for believers. Not as the quasi-deified mother of God, but as a humble servant who takes God at his word.
Sarah in the Old Testament, Abraham and Sarah, in Genesis 18, she failed this test. And more recently, in this very chapter, Zacharias does too.
Oh man. Knowing my own prideful heart, this was probably a little rough for Zacharias (not that he could tell anyone if it was). He expressed unbelief just six months earlier in the year, and God put him on nine months no-talking as a consequence.
Zacharias was a priest, he was seasoned in life, he was educated in the Scriptures, and he was in a position of spiritual leadership. And now your wife is commending a young, uneducated girl who is probably 50 years your junior for her character that is putting you to shame.
Look God doesn’t care about how long you’ve been a Christian. He doesn’t care about what credentials you have, or how much Scripture you have studied or learned. God looks favorably upon humble hearts which trust in Him.
Lord, whatever you ask, I’ll submit to it in humble faith. I’ll take you at your word.
This trust in God’s promise has borne fruit in Mary’s life.
These verses are commonly referred to as the Magnificat. That’s the first word of this song in Latin. It would seem that this song came bursting out spontaneously from her heart.
What we will see is that this country girl from Nazareth was also a theologian. She was waiting for the consolation of Israel, and the hope of the deliverance of her nation, and herself.
Mary has been highly regarded by God.
(46) And Mary said: “My soul exalts the Lord, 47 And my spirit has rejoiced in God my Savior.
My soul μεγαλύνω lit. praises the greatness of God. This word exalts or magnifies means to highly honor as you regard something as important. It carries the idea of making something larger, magnifying and expanding it.
And she continues, my spirit has rejoiced. χαίρω is the Greek word you would be most familiar with, appearing 74 times in the New Testament—rejoicing. For rejoicing, being glad or happy or joyful. But this word here for rejoicing is used only 11 times and it means. ἀγαλλιάω to be exceedingly joyful, exult, be glad, overjoyed.
The preposition indicating the object of the rejoicing is the person of God, identified not just the universal Savior (though that is true, and Mary will highlight his universal benefits in the verses to come).
But at this point Mary’s song is about her own personal Savior. Mary, God is your maker. God is your judge. God is your sustainer. But here in this moment, what has captured Mary’s heart is the reality that her God has come to save her.
Whatever you may be able to do on your own, you cannot save yourself from the judgment of God upon your sins. You are helpless the Scriptures teach. And like someone who falls overboard from a ship in the middle of an ocean, unable to swim, you will surely perish if you are not rescued by another.
Mary’s song here is a song that every child of God sings. It is an expression of gratitude that cannot be rivaled because your God saw fit to nail the debt of your sin to the cross so that you might know freedom.
Mary is a sinner. If she was sinless, why would she need a savior.
Mary had been disrespectful and disobedient to her parents. She had lied to cover her sin. She coveted and complained and lived selfishly. And yet she also loved her God, and when God chose her to be the mother of Jesus it was to reflect his mercy.
God’s salvation immediately places us in a place of gratitude and joy and dependence because we see our inability that he did for us what we could never do for ourselves.
This is a reason clause that provides the basis or grounds for the previous statement. I rejoice exceedingly in God my savior because he has paid attention, he has looked upon me in my state of lowliness.
Yes Mary. Today as we reflect on the birth of Jesus, we say that Mary was given a favorable position by God. And it didn’t go to her head.
Can you see the humility here?
She is attributing this to the grace of God coming to her in her humble state. I figure that my proud heart could have never handled being the parent of Jesus because I would have assumed that was someone in indication that I was the most deserving, or a top candidate, God’s best option.
Mary says, this is unmerited favor.
(49) “For the Mighty One has done great things for me; and holy is His name.
Most commonly in the old testament when God is called the Mighty One it is in reference to his strength as a victorious warrior fighting in behalf of his people.
The mightiness of God can turn the hearts of great rulers, overthrow entire armies, disrupt nature, and put a child in the womb without human involvement.
Holy is his name she says. He is set apart and unrivaled. No one like our God.
(50) “AND HIS MERCY IS UPON GENERATION AFTER GENERATION TOWARD THOSE WHO FEAR HIM.
God’s mercy is everlasting David said. And that mercy is bestowed on those who fear him. They don’t earn God’s good favor, but they receive it by trusting him and looking to him to provide forgiveness of their sins.
Those who fear him are those who love and trust him. They are his people. And over the next three verses (vv. 51-53), Mary highlights the mercy of God in action.
Look at the actions of God in these verses… v. 51 He has done; He has scattered; v. 52 He has brought down and has exalted; v. 53 He has filled and sent away; v. 54 He has given help.
What are these actions that Mary is referring to?
I believe it is looking at the historic promise made to Abraham, now being brought to fulfillment in the birth of Jesus Christ.
God’s delivered and saved, Israel many times throughout history. He delivered them from Egypt. Later from enemies in Canaan. He brought them back from Assyria and Babylon. But those were all temporary, physical deliverance.
With the coming of the Messiah, this salvation of God is reaching its intended point, which is Jesus. Of course, Mary doesn’t understand the mystery of the church yet. She is viewing this primarily through the lens of salvation for Israel, but as we will see in a minute that is an offer of salvation that extends beyond Israel.
(51) “He has done mighty deeds with His arm; He has scattered those who were proud in the thoughts of their heart. 52 “He has brought down rulers from their thrones, and has exalted those who were humble. 53 “HE HAS FILLED THE HUNGRY WITH GOOD THINGS; and sent away the rich empty-handed.
You could summarize these verses with this—God doesn’t save those who can save themselves, but he saves those who can’t.
God is no respecter of persons. He doesn’t save people because they are pretty or popular or wealthy or gifted or intelligent. He doesn’t look at your moral statistics about how good or bad you are.
This is at the heart of the beatitudes, the statements that begin with: “blessed are the…” in Matthew and Luke. It isn’t blessed are strong people, blessed are the satisfied and the rich, blessed are those who are thought well of right now and popular.
But blessed are the meek, and hungry and the poor in spirit, and those who are hated by the world. God doesn’t esteem or regard you in the same way that humans esteem and regard one another.
Mary’s hope is in God and his promises. And in fact, she sees this situation with Jesus as God making good on a promise.
He has come to the aid of his servant Israel. He’s remembering his promise to come help his people.
God made a promise to a man early in the book of Genesis named Abraham. And the wonder of this promise is that it was made irrespective of Abraham’s faithfulness. When God ratified the covenant, the promise, in Genesis 15, there were animals that were cut in two.
The point was that when two people would make a covenant, they would pass between the animal carcasses and it was a way of saying—if either of us break this promise, may we end up like these animals.
And yet in Genesis 15, God and Abraham don’t both pass between the animals. Why? Because God is swearing by his own name to accomplish this plan, and it is not dependent upon Abraham’s performance. It’s called a unilateral covenant.
And the New Testament affirms over and over, that according to this promise we have hope. God sent Jesus because he had a promise to keep that he would make an everlasting Covenant and he would make Abraham a blessing to all the nations of the earth through his descendants, which found its vs ultimate fulfillment in Jesus.
My friends, God always keeps his promises. God’s words are always true. God cannot lie. God is always faithful.
Because he is all-powerful nothing can ever prevent or stop him from accomplishing what he intends to do. That’s why his promise is so sure. There is nothing greater than himself to answer to.
Well, this was a fruitful season for Mary. What an incredible time in her life. She stuck around with Zacharias and Elizabeth for some time after that.
(56) And Mary stayed with her about three months, and then returned to her home.
That’s a trimester—one of three equal periods of a nine-month pregnancy. Just to refresh our timelines. Mary arrived days into her pregnancy at Elizabeth’s house, who was six months along.
Three months means Elizabeth either just had John or is about to and Mary now has a baby bump.
Three months of fellowship, now Mary is going back to a challenging social environment in Nazareth. The Scripture is silent on that time period, so we don’t know any specifics. But being pregnant as an unmarried woman was certainly going to present stigma and challenges for her reputation.
It was a time for Mary to continue to walk by faith in the truths she had been convinced of and been growing in. She’s going to be tested over the next six months. Then tested over and over as she is a sinful mother, parenting her savior, and eventually looking to him on a cross where he would bear her guilt.
Mary’s response to God here is a model for us as believers as she humbly submits to God’s providence and plan for her life. She experiences God’s care for her and then she rejoices in his personhood. In this way, Mary isn’t anything than a normal believer.
Friends, this is a reminder of what we celebrate this Christmas—that our God is promise-keeping God who grants mercy to sinners.

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When considering a repair or maintenance problem, it is important to keep in mind two separate questions. First, who is responsible to carry out the repair or maintenance work? Second, who is ultimately responsible to pay for that work?
The Strata Property Act consistently uses the phrase, repair and maintain, which suggests that repairs differ from maintenance. Neither term is defined in the legislation. Despite any technical difference in their meaning, the legislation clearly treats both repairs and maintenance the same. Accordingly, every reference below to repairs includes maintenance, unless context requires otherwise.
To answer the question, “Who is responsible to carry out certain repair work?” a strata corporation must look to the Strata Property Act and the corporation’s bylaws. In this chapter, we assume that a strata corporation has the Standard Bylaws under the Act. To the extent that a strata corporation amends its bylaws to deal differently with repairs, the answer will differ. Before applying the analysis in this chapter, verify whether the repair bylaws under consideration are those found in the Standard Bylaws. If a strata corporation’s repair bylaws differ from the Standard Bylaws, then together with the Act the corporation’s particular bylaws will govern the answer.
This chapter explains how to determine who must actually perform a repair under the Strata Property Act. After determining who must make the repair, the next question is who must ultimately pay for it. For information about answering the second question, see Chapter 26, Paying For Repairs.
The Strata Property Act deals more clearly with the subject of repairs than the former Condominium Act. Unfortunately, the most significant repair provisions are found in the Standard Bylaws, rather than in the body of the Act. This means that a strata corporation may change its repair scheme by amending the corporation’s bylaws. When it comes to repairs, however, most strata corporations use the Standard Bylaws. Some strata corporations do not.
It is essential to identify a strata corporation’s repair bylaws before approaching any repair problem. For information about identifying a strata corporation’s statutory repair bylaws and the extent to which those bylaws are altered by any amended bylaw, see Chapter 19, Statutory Bylaws and the Effect of the Strata Property Act.
The Strata Property Act and the Standard Bylaws together dictate who must perform a repair, according to whether the subject of the repair is common property, limited common property (“LCP”) or part of a strata lot. In each case, the Act and Standard Bylaws divide responsibility between the strata corporation and an owner, depending whether the repair occurs in common property, LCP or a strata lot.
The following explanation tracks this scheme.
As a general rule, if the subject of a repair is common property, or a common asset, the strata corporation must carry out the repair. 1 There are a few exceptions in which an owner may be responsible to make the repair.
For the purpose of determining responsibility for making a repair, the Strata Property Act and the Standard Bylaws treat both common property and common assets the same. Accordingly, when speaking of repairs, in this chapter every reference to common property includes common assets, unless the context requires otherwise.
The Strata Property Act requires a strata corporation to repair common property and common assets. 2 In particular, if property is common property (and has not been designated as limited common property), the strata corporation must repair it. This is a statutory duty and the strata corporation cannot escape its responsibility. Tadeson v. Strata Plan NW 2644 3 is a good example.
A residential strata complex contained 35 units. The building envelope suffered water penetration. An engineering report recommended extensive repairs to the building envelope, which was common property.
The strata council presented special resolutions (now called “3/4 vote” resolutions) at two separate general meetings to carry out the repairs. In each case, the resolutions failed because too many owners objected to the cost of the work.
In frustration, three owners applied to the Supreme Court of British Columbia for an order requiring the strata corporation to carry out the repairs.
The court ordered the repairs and authorized a special assessment (now called a special levy) to all of the owners for $312,645 to pay for the work.
As appears from the record of its proceedings the Council was at all times alive to its repair and maintenance responsibilities; and throughout the period of the plaintiff’s ownership of her strata lot took steps to remedy the defects which she drew to its attention . . .
The defendants [the court used the term “defendants” to refer to the strata corporation] are not insurers. Their business, through the Strata Council, is to do all that can reasonably be done in the way of carrying out their statutory duty; and therein lies the test to be applied to their actions. Should it turn out that those they hire to carry out work fail to do so effectively, the defendants cannot be held responsible for such as long as they acted reasonably in the circumstances: and in this instance I have to say that the defendants did just that. They cannot be found to have been negligent.
In other words, a strata corporation must act reasonably when carrying out its duty to repair and maintain.
I conclude that if a strata corporation such as the defendant (strata corporation) has taken all reasonable steps to inspect and maintain its common facilities, consistent with the practice of other such associations generally, they should not be held liable for damages arising as a result of any strict statutory liability nor should they be put in the position of acting as an insurer by default.
By analogy to the standard of care of a reasonable person in the law of negligence, the John Campbell case effectively confirms a standard of care of the reasonable strata corporation in a claim for breach of statutory duty. An owner wishing to sue a strata corporation for damages for breach of the statutory duty to repair must show that the corporation failed to take all reasonable steps to inspect and maintain the relevant property, consistent with the practice of other strata associations generally. As in a negligence claim, in a suit against a strata corporation for breach of a statutory duty to repair, the claimant must present evidence to establish the standard among strata corporations generally for inspection, repair and maintenance. In other words, one has to first establish a benchmark before one can prove that someone has failed to achieve that benchmark. After the norm among strata corporations is established, the court may then measure whether the strata corporation in question acted reasonably in the circumstances. A claimant who fails to produce such evidence risks the dismissal of his or her lawsuit for failure to establish the relevant benchmark.
In the John Campbell case, the sewage backup occurred when roots from a tree on a neighbouring property blocked the strata corporation’s sewage pipe. Since the strata corporation had never before experienced problems with the pipe, the corporation had not previously inspected it for potential blockages. Nor did the corporation have any policy for regularly inspecting the sewage pipe. There was no evidence, however, to suggest that other strata corporations made regular inspections of their sewer pipes, whether or not a problem had occurred. In addition, the evidence revealed that most strata corporations do not usually flush sewer pipes unless a problem has first presented itself.
The court dismissed the owner’s claims for breach of statutory duty and negligence. The court found that unless there was some obvious reason to regularly inspect the sewer pipe, the lack of an inspection policy could not be held against the strata corporation. Bearing in mind the evidence concerning the inspection and maintenance practices of other strata corporations, the strata corporation in question acted reasonably. Even though the strata corporation never inspected or maintained the sewer pipe before the incident, there was no reason to be concerned about a sewage blockage, especially where no other strata corporations inspected their sewer pipes in similar circumstances.
In Basic v. Strata Plan LMS 0304, the British Columbia Court of Appeal reiterated that a strata corporation must act reasonably when carrying out its duties to maintain and repair common property. 7 In Basic, an owner had the use of a common property storage locker. There was a drain near the locker. In 1997 and 1999 water backed up through the drain wetting the contents of the owner’s locker. In each case, the strata corporation promptly hired plumbers who cleared the drain with a roto-rooter.
In 2000, water from the drain again reached the owner’s locker. He spent two days cleaning the locker and its wet contents. When the owner told strata council about the problem, it arranged within a day for a plumber to cap the drain.
Still, the water problem persisted. In September 2001 the strata corporation hired an engineer, who recommended re-routing the drains to the parkade below. Within two months, the strata corporation implemented the engineer’s suggestions, completing the work by November that year.
In November 2006, a leaky pipe inside the locker caused another flood. The strata corporation repaired the pipe by early 2007.
The strata corporation also posted notices warning owners to elevate the contents of their lockers above the floor. In addition, every night a strata council member inspected the common property areas, including the storage area in question.
The owner sued the strata corporation for damages for negligence and breach of statutory duty to repair common property. He claimed that during the 2000 clean-up he was exposed to harmful mould, which caused him cold-like symptoms, including shortness of breath.
While a strata corporation must act reasonably to maintain and repair the common property, the trial court emphasized that the strata corporation is not an insurer. The 2000 flood was not the result of any negligence or breach of statutory duty by the strata corporation. The court dismissed the owner’s claim, finding that here the strata corporation acted reasonably to repair the various water problems.
In another case, a strata corporation breached its statutory duty to repair common property when it failed for a period of approximately eight months to assess the condition of a building’s envelope. 8 The strata council had received an engineer’s report to the effect that building envelope deficiencies in one strata lot may also exist in other strata lots in the building. The council members and owners were well aware that their six-storey, 22-unit building had suffered water ingress problems for years. An assessment of the building envelope was not only prudent, it was necessary.
After receiving the engineer’s report, it was unreasonable in the circumstances to wait approximately eight months to take action regarding a building envelope assessment.
Similarly, a strata corporation acts unreasonably if it attempts without justification to shift its responsibility to repair common property to an owner. 9 For example, in Taychuk v. The Owners, Strata Plan LMS 744, 10 certain pipes inside a strata lot were common property. The pipes supplied badly discoloured water to the unit, and the strata corporation was responsible to repair the water problem. Except for one period of roughly 18 months, the strata corporation took consistent steps over seven years to solve the problem, including consulting experts, flushing the system, and replacing certain valves. Progress stalled for approximately 18 months when the strata corporation proposed installing a particular filtration system in the owners’ unit and insisted that the owners would have to bear the cost of replacing the filters and maintaining the system. The owners objected. The owners commenced legal proceedings and, for a time, the strata corporation took no further steps to solve the problem.
The court declared that the strata corporation breached its duty to repair during the relevant period. The court gave the successful owners liberty to apply again to the court if the discoloration problems returned. The court also awarded costs in favour of the owners who brought the application.
An owner cannot be relieved from paying his or her proportionate share of a special levy to repair common property merely because the strata corporation has, in the past, breached its duty to the owner to act reasonably regarding the repair of that common property. 12 In the Taychuk case, the successful owners asked the court for a remedy in the nature of an order to exempt them from paying any share of a special levy to raise funds to repair the common property hot-water system. The court held that the Strata Property Act does not permit such a remedy.
In addition, if injury is caused by a strata corporation’s failure to repair common property, the corporation may incur liability. Cater (Guardian Ad Litem) v. Ghag Enterprises Ltd. (No. 1 and 2), 16 is a good illustration.
The owner was a corporation that leased the strata lot to a young family. At the time, the owner’s representative told the tenants that the lease, in effect, entitled them to use the driveway in front of the unit.
The driveway was common property. The driveway contained a hole described as a depression about three to four feet wide and five inches deep. The depression was in plain view and remained there for some months.
The tenants’ eight-year-old daughter rode her bike through the depression and fell. She suffered a broken leg. On behalf of their daughter, the tenants successfully sued the owner of the strata lot and the strata corporation for damages under the Occupiers Liability Act.
The court found that the strata corporation and the owner were both occupiers within the meaning of the Occupiers Liability Act. Since the driveway was common property, the strata corporation was an occupier because it had a statutory duty under the condominium legislation to repair and properly maintain the driveway. The owner was also an occupier because it had legal control, as a landlord, over the premises, including the associated right to use the driveway.
The court found the child partly at fault and allocated 25 per cent (25%) of responsibility for the accident to the child. The court assigned 75 per cent (75%) of the liability equally between the owner and the strata corporation, who were each 37.5 per cent (37.5%) responsible.
Section 72(2)(b) of the Strata Property Act permits a strata corporation, by bylaw, to make an owner responsible for repairs to common property, “only if identified in the regulations and subject to prescribed restrictions.” When the province first brought the Act into force on July 1, 2000, the government specifically refrained from proclaiming section 72(2)(b) into force.
Since all, or virtually all, of the features listed in paragraphs (a) through (e) of this amended bylaw were part of the common property, the court held the amended bylaw unenforceable. The court found that the strata corporation could not, by bylaw, require an owner to repair common property until the province enacts the required regulation to identify what repairs to common property may be the subject of such bylaws and to prescribe the necessary restrictions.
It appears, however, that in at least two situations a strata corporation may by agreement, rather than a bylaw, compel an owner to repair common property.
First, under the Standard Bylaws, an owner may ask the strata corporation for permission to alter common property, including LCP, or a common asset. The Standard Bylaws permit the strata corporation to require, as a condition of its approval, that the owner take responsibility for any expenses relating to the alteration. 20Presumably, the owner will be responsible for expenses relating not only to the initial alteration but to any further expenses that arise as a result of the alteration, including repairs or additional insurance. Note, also, that section 59(3) of the Strata Property Act requires each Information Certificate (Form B) to disclose any agreements under which the owner takes responsibility for expenses relating to alterations to the common property or common assets, among other things. 21 For information about the Information Certificate (Form B), see Chapter 13, Record Keeping.
If a strata corporation approves an owner’s request to alter common property in exchange for the owner’s promise to pay for any expenses relating to the alteration, the strata corporation should always record the agreement in writing. The written document will serve as an accurate record of the agreement for future strata councils and property managers. Experience also suggests that recording the agreement in writing tends to avoid disputes later.
Note that an owner’s agreement, in exchange for permission to alter common property, is not likely binding on subsequent owners of the same strata lot. Normally, an agreement is binding only on the parties to it. If a strata corporation wishes to make an owner’s agreement to pay for repairs to alterations to common property binding on subsequent owners, the corporation should seek legal advice.
At present, our land title registration system does not appear to offer any type of charge that a strata corporation might register against title to the owner’s strata lot to bind subsequent owners to the agreement. From the strata corporation’s perspective, the corporation may wish, as a term of the owner’s agreement to repair common property, to insist that if the owner sells his or her strata lot, he or she must require the buyer to assume the owner’s obligations to the corporation under the agreement.
In theory, if an owner enters an agreement with the corporation to repair common property, that owner’s liability may continue indefinitely, depending on the wording of the agreement. For instance, in the absence of wording that terminates the owner’s liability upon a sale of the strata lot, an owner who sells his or her strata lot may nevertheless remain liable to the corporation for the cost of repairs, even though he or she is no longer a member of the corporation. Where repair costs are potentially significant, an owner may wish to obtain legal advice before finalizing any agreement with the strata corporation.
Second, the Strata Property Act permits a strata corporation to enter into a short term exclusive use agreement with an owner or tenant to give that person the right to exclusively use common assets or common property that is not designated as LCP. 22 When a strata corporation gives an owner or tenant exclusive permission to use common property under these provisions, the corporation may make the arrangement subject to conditions. 23 It appears possible for a strata corporation to require, as part of the agreement, that the owner or tenant carry out certain repair work on the common property allocated for that person’s exclusive use. To avoid disputes, the corporation should record any short term exclusive use agreement in writing. For information about a short term exclusive use agreement, see Chapter 17, Common Property.
The Standard Bylaws specifically require a strata corporation to carry out repair work on LCP in certain circumstances.
Note that a bylaw is required; strata council alone does not have the authority to make an owner responsible for LCP repairs. In Guenther v. Strata Plan KAS431, there was a three-storey wooden-frame building with 42 strata lots. 29Every unit had an LCP balcony. All but one of the balconies had earlier been enclosed by the various owners.
3.2 An owner who has the use of limited common property must repair and maintain it, except for repair and maintenance that is the responsibility of the Strata Corporation as directed by the B.C. Strata Property Act.
The bylaws restricted the strata corporation’s duty to repair and maintain LCP to repairs and maintenance that ordinarily occur less than once a year. The bylaws also required the corporation to repair and maintain LCP such as “railings and similar structures that enclose balconies,” no matter how often the repair or maintenance ordinarily occurs.
Repairs became necessary when the strata corporation discovered that water was penetrating many of the balcony enclosures. In response, the strata council passed a motion in 1999 declaring that it is an owner’s responsibility to repair his or her balcony. The motion also required an owner to first obtain the strata council’s approval before making repairs and to use an appropriate construction professional. Despite strata council’s motion, it appears that none of the owners repaired their LCP balconies. In 2009, an owner asked the Supreme Court of British Columbia for a declaration that the strata corporation was in breach of its duty to repair the LCP balconies.
Since the bylaws required the strata corporation to repair LCP “railings and similar structures that enclose balconies”, the corporation breached its duty to repair the LCP balconies. The Strata Property Act permits a strata corporation to make an owner responsible for LCP repairs by enacting a suitable bylaw. Since a bylaw was necessary, the strata council alone had no authority to make owners responsible for balcony repairs. The council’s motion was of no force or effect. If the strata corporation wished to change the allocation of responsibility for LCP repairs to the balconies, a bylaw amendment was necessary.
Under the Standard Bylaws, for example, if a parking stall is designated as LCP, the owner is responsible to carry out most repair work on the parking stall. Any repair, however, that occurs less often than once a year, such as repainting lines, or resurfacing, is the responsibility of the strata corporation to perform.
Where the subject of a repair is part of a building strata lot (that is, a strata lot that is not part of bare land strata plan) the Standard Bylaws divide responsibility to perform the repair between the strata corporation and an owner.
The Strata Property Act also permits the strata corporation, by bylaw, to take responsibility for the repair and maintenance of specified portions of a strata lot. 32 For example, a strata corporation may amend this provision in the Standard Bylaws to expand or reduce the corporation’s duty to carry out repair work on particular portions of a strata lot.
Some individuals mistakenly try to determine the duty to perform a repair on the basis of whose insurance covers the problem. This is wrong. Whether the strata corporation, or an owner or tenant, or some or all of them have insurance has nothing to do with determining who is responsible to carry out a repair. The liability to carry out a repair is determined according to the Strata Property Act and the bylaws, as described in this chapter. For an illustration of the irrelevance of insurance to the duty to make a repair, see “Insurance v. Duty to Repair” in Chapter 16, Insurance.
Deciding who is responsible to carry out repair work is likely the most common area of dispute between strata corporations and owners. Despite the prevalence of these disputes, strata managers receive little guidance in this area. The courts have not produced much case law concerning repairs because most disputes are settled informally or through arbitration.
As a general rule, the legislation, and in particular the statutory bylaws, have always assigned responsibility according to whether the subject of the repair is common property, LCP or a strata lot.
In reality, many repair problems include features shared between a strata lot and a neighbouring unit, LCP or common property. In many cases, the former Condominium Act overlooked the practical difficulties in assigning responsibility where strata lots are physically linked in various respects to other strata lots or to LCP or common property.
One of the few sources of information in this area is Understanding and Improving the Condominium Concept, 34 by Gerry Fanaken in which the author relates his extensive experience in solving these disputes over many years under the former Condominium Act. With that author’s permission, the following guidelines are adapted from his text, taking into account changes introduced by the Strata Property Act and some of the most common disputes. Among other things, the Strata Property Act expands the definition of common property. 35 The changes in the definition of common property will also change the approach to some repair problems.
For the most part, the disputes described below under the Condominium Act did not distinguish between the responsibility to carry out the repair work and the ultimate responsibility to pay for the repair. Readers should keep in mind that, under the Strata Property Act, the two obligations will not necessarily be the responsibility of the same party.
Finally, in the following review every reference to a strata lot is a reference to a building strata lot, being a strata lot that is not part of a bare land strata plan.
Many strata complexes have a gas-heated boiler to heat water, which is then circulated through pipes to the individual strata lots. This type of system is often used to heat the complex or, alternatively, to supply hot water to the strata units. If the complex uses hot water to heat the facilities, each strata lot typically has a thermostat to regulate the temperature of the suite. The thermostat usually controls some form of zone valve, which regulates the flow of hot water to and from the unit. Some zone valves are located inside strata lots, others are located in a common property area.
In the past, if the thermostat failed, the strata corporation held the owner responsible because it was located inside the strata lot.
If the zone valve failed, and it was located within the common property, the strata corporation accepted responsibility. If the failed zone valve was inside a strata lot, most strata corporations still accepted responsibility. These strata corporations considered the zone valve to be an integral part of the building’s heating system. On the other hand, some strata corporations imposed liability on the owner because the valve was inside the strata lot.
1.(1) “common property” means . . .
(b) pipes . . . and other facilities for the passage or provision of water . . . heating and cooling systems, . . . if they are located . . .
Under this definition, clearly the zone valve and, arguably, the thermostat, are common property.
If so, under the Standard Bylaws, the strata corporation must carry out repair work on the zone valve and, in appropriate cases, the thermostat.
In a building strata plan (that is, one that is not a bare land strata plan), window and door repairs are frequently the subject of disputes.
The statutory bylaws under the Condominium Act required the strata corporation to maintain and repair the exterior of buildings excluding, among other things, windows and doors included in a strata lot. 37 A plain reading of this provision suggested that if a strata lot’s exterior window broke, it was the owner’s responsibility to carry out the repair work.
To complicate matters, the property insurance policies carried by most strata corporations included exterior windows, subject to a deductible. If an exterior window broke, most strata corporations assumed responsibility in view of their insurance coverage. However, many strata corporations charged back the deductible to the owner because the statutory bylaws excluded windows from the strata corporation’s responsibility.
The Strata Property Act and its Standard Bylaws clarify the respective responsibilities of a strata corporation and an owner to repair property that is common property, or LCP or part of a strata lot.
8. The strata corporation must repair and maintain . . .
Accordingly, under the Standard Bylaws, if an exterior window or door is LCP, the strata corporation must carry out the repair work.
So, if an exterior window or door is part of a strata lot, the Standard Bylaws require the strata corporation to carry out the repair work on that window or door, as the case may be.
Most strata lots have their own fuse boxes, including a master electrical on/off switch for the unit, and a meter. In most residential complexes, a strata lot’s electrical meter is usually kept with all the other meters in a meter room. Typically, the meter room is part of the common property.
If a strata lot experienced a power loss and the source of the problem could be isolated and fixed within the strata unit, including its fuse box, most strata corporations considered the owner responsible. For example, a power failure might be caused by an overloaded circuit or a defectively wired appliance in the strata unit.
On the other hand, if the difficulty was in the meter room, and the meter room was part of the common property, the strata corporation usually took responsibility to fix it. For example, a defect in the main trip-switch in the meter room might cause a power failure in the strata unit. Since the defect arose in the meter room, which was common property, the strata corporation was responsible.
This definition will help solve disputes where the source of the electrical problem can be located. If the problem occurs within a strata lot, including the fuse box, the owner will have to perform the repair work under the Standard Bylaws.
On the other hand, if the source of an electrical problem is located in the wiring within a floor, wall or ceiling that forms a boundary with another unit or common property, under the Standard Bylaws the strata corporation must carry out the repair work. Similarly, if the problem occurs within wiring that is inside a strata lot, but the wiring is intended to be used for the enjoyment of another strata lot or the common property, the strata corporation must carry out the repair work.
Some strata lots include fireplaces. In most cases, the fireplaces do not appear on the strata plan, so it is hard to say what portion, if any, extends beyond the strata lot to the common property.
In the case of a wood-burning fireplace, the chimney may occupy both the strata lot and the common property.
The Condominium Act did not address responsibility for chimneys. If some, but not all, strata lots had fireplaces, many strata corporations required the owners to clean and maintain the chimneys. Other strata corporations carried out annual chimney maintenance to ensure overall safety but charged back the cost to the owners with fireplaces. If all the strata lots had chimneys, the strata corporation typically carried out annual chimney maintenance.
Gas fireplaces do not need chimney maintenance but may require repairs. Neither the Condominium Act nor the Strata Property Act specifically refer to gas fireplaces.
In the past, most strata corporations considered owners responsible for repairs to gas fireplaces within their strata lots. Nothing in the Strata Property Act or Standard Bylaws suggests that past practices will change.
Neither the former Condominium Act nor the Strata Property Act refer specifically to toilets or bathtubs.
In the past, the location of the problem determined responsibility.
For example, if a toilet was plugged inside the toilet itself, a strata corporation looked to the owner to fix it.
116. The strata corporation shall . . .
(d) maintain and repair, including renewal where reasonably necessary, pipes . . . existing in the parcel and capable of being used in connection with the enjoyment of more than one strata lot or common property.
Strata corporations applied the same approach to leaky bathtubs. If a leak arose, for example, in the perimeter caulking between the tub and the wall or floor, the owner was responsible. Similarly, if the bathtub developed pinhole leaks in its surface, the owner had to fix it.
On the other hand, if a leak arose in the bathtub drain, which was situated between the strata lot and the common property drain, the strata corporation performed the repair work.
In the case of bathtubs, under the Strata Property Act many strata corporations follow the same approach they took under the Condominium Act, as described above.

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