Fall 2008 Issue

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THE HON. ISAAC BORENSTEIN (RET.) JOINS RUDOLPH FRIEDMANN LLP

One of the best known and most highly regarded Superior Court Judges in Massachusetts has joined our firm as a Partner effective September 15, 2008. We are proud and excited that the Hon. Isaac Borenstein (Ret.) has brought his considerable skills, experience, broad knowledge and reputation as a Judge, law professor and trial lawyer to our firm.

At Rudolph Friedmann LLP, Judge Borenstein will specialize in civil litigation and criminal defense at the state and federal levels. He will also handle appeals, mediation and arbitration matters and will be available to consult individuals and corporations on a variety of matters in the general practice of law.

A member of the Superior Court for the last 16 years, Judge Borenstein has handled the most complex civil and criminal matters, including business and real estate disputes, products liability, wrongful death and other major personal injury matters, insurance and contract cases, discrimination as well as many other areas. On the criminal side, he has presided over murder and other felonies, including white collar crimes. For 6 years prior to serving on the Superior Court, he was on the Lawrence District Court where he also handled civil and criminal cases. Gov. Michael S. Dukakis initially appointed Judge Borenstein to the District Court. His reputation and accomplishments in the District Court led Gov. William F. Weld to appoint Judge Borenstein to the Superior Court in 1992.

Judge Borenstein has presided over more than 300 jury trials and 100 jury-waived trials as well as hundreds of pre-trial motions. He has also brought considerable skill and savvy to the resolution of innumerable cases through settlement prior to and during trial. Judge Borenstein has received several awards for his work as a Judge and much recognition in the media and other circles. He has a significant record of public speaking as well as participating in training programs for lawyers and judges.

Judge Borenstein has been a part-time law professor at several law schools prior to and during his judgeship (Northeastern University School of Law, Suffolk Law School, and Boston College School of Law). He also taught as a full-time professor at New England School of Law and Northeastern University School of Law. He has received several awards for excellence in teaching. Prior to his appointment to the bench, he also established a reputation as a skilled trial attorney over the course of 11 years.

Judge Borenstein currently lives with his wife and stepdaughter in Newton, Massachusetts. He has one child, a son who is a junior in college. He is a native of Havana, Cuba, arriving in the US in 1961, just short of his 11th birthday. He received his LLM (1983) at Harvard Law School, his JD (1975) at Northeastern University School of Law and a BA “With Distinction” (1972) from George Washington University. He is a member of the Massachusetts Bar (1979) and the Florida Bar (1976).

LEGAL VICTORY WON FOR 40B DEVELOPER AT THE HOUSING APPEALS COMMITTEE

By Thomas Alexander, Esq.

On June 9, 2008, in 100 Burrill Street, LLC v. Swampscott Board of Appeals, the Housing Appeals Committee voted to vacate the decision of the Swampscott Zoning Board of Appeals (“Board”) to deny the application of 100 Burrill Street LLC (“100 Burrill Street”) for a Comprehensive Permit to build a multi-unit condominium development in Swampscott. The Appellant, represented by Jim Rudolph, is a real estate developer who had applied for a Comprehensive Permit to build a mixed income development in the Town of Swampscott. The Board denied 100 Burrill Street the Comprehensive Permit and Rudolph appealed to the Housing Appeals Committee.

The Housing Appeals Committee is an agency of the Commonwealth of Massachusetts hears appeals of the approval or denial of applications for a special permit (a/k/a Comprehensive Permit) under G.L.c. 40B. G.L.c. 40B was designed to permit developers to build housing with set asides for low income residents in those communities in the Commonwealth that have less than 10% of their housing available to low income residents. In its denial the Board cited concerns regarding possible fire, traffic, and design problems posed by the proposed development.

During the final portion of the hearing before the Housing Appeals Committee testimony on behalf of both parties was received from different experts regarding the issues raised by the Board. 100 Burrill Street was initially disappointed when the Housing Appeals Committee notified both parties that in its preliminary draft it intended to rule that the developer had failed to carry the burden of proof. However, Rudolph filed a lengthy and persuasive reply to the Housing Appeals Committee’s request for comments. Rudolph cited the evidence presented during the hearing, and convinced the Housing Appeals Committee to reverse its proposed initial ruling and enter a final decision in favor 100 Burrill Street.

In its final decision issued on June 9, 2008, the Housing Appeals Committee ruled that 100 Burrill Street had established a prima facie case that it was entitled to the Comprehensive Permit and that the Board’s decision to deny the application for a Comprehensive Permit was not consistent with local needs. It ruled that the Board had failed to show, despite its intense efforts, that the development posed any risk to the health, safety, and well being of the residents of the Town of Swampscott that outweighed the regional need for low income housing. It vacated the decision by the Board and ordered the Board to grant 100 Burrill Street a Comprehensive Permit.

CYBER INSURANCE FOR BUSINESSES

Businesses have been dependent on computerized information for some time now, but it has been only relatively recently that insurance companies have devised and offered insurance policies specifically tailored to the potential losses from a variety of problems that can affect a computer system.

An early impetus for cyber insurance was anticipation in the late 1990s of losses associated with the coming of “Y2K.” That concern turned out to be overblown, but the threats that have spurred cyber insurance offerings since then are real enough, including viruses, hackers, and legal injuries to others from information on a company’s website. One study has found that the average annual technology- related financial loss for United States companies more than doubled just from 2006 to 2007.

Another development that prompted more cyber insurance policies was the realization, which sometimes came as a surprise to insured businesses, that general liability policies did not cover computer problems. Cyber insurance is a good idea for all of the usual reasons associated with insuring against business losses. But it also makes sense because of the particular costs associated with responding to a computer data breach, especially now that many states have adopted data breach notification laws.

This kind of postmortem after a breach could include such measures as notifying affected customers, paying for credit monitoring for those customers, replacing compromised credit or debit cards, and undertaking forensic analyses of affected databases. All in all, there are some expensive scenarios to insure against.

Categories of Losses

The losses covered by cyber insurance generally fall into two categories: first-party losses, meaning those affecting the business itself; and third-party losses, meaning incidents mainly affecting outside parties, including the customers of a business. Of course, the same underlying problem can cause both kinds of losses, such as when unauthorized access to a computer system shuts down the computer system of a company whose customers or clients rely on that system through an extranet.

A comprehensive cyber insurance policy should encompass both kinds of risks. These are the typical categories of coverage:

* First-party business interruption, covering lost revenue experienced during downtime due to accidents or security breaches (but typically not losses due to catastrophic regional power outages);

* First-party electronic data damage, such as the compromise of data from a virus infection;

* First-party extortion, including the demands made by hackers;

* Third-party network security liability, arising from compromise and misuse of data stemming from identity theft and credit-card fraud;

* Third-party network liability in the form of court judgments obtained by persons harmed by problems originating with a business’s computer system; and

* Third-party media liability, aimed at the full range of potential liability from matter published in interactive online communications.

FEDERAL ESTATE TAX

The federal estate tax credit, currently at $2 million, is set to increase to $3.5 million in 2009. This means that in 2009 you can leave up to $3.5 million to your heirs without any federal estate tax liability.

If Congress takes no action, the federal estate tax will be repealed altogether in 2010. While this is an unlikely scenario, it does underscore the uncertainty involved in estate planning over the next few years. Make sure to meet with a professional to review your plan.
FIRM NEWS

The litigation department continues to be extremely busy. During the last few months our attorneys’ have tried three cases successfully to conclusion. Two of these were tried before a Judge and one was tried before a jury.

In the first of these, John Moorman tried a case in front of a Judge. The issue was whether a lease automatically extended after a tenant had vacated the premises but not formally given notice to the landlord that the lease was being terminated as required by the lease. The Court found in favor of our client indicating that it would be inequitable to extend the lease when the Landlord had actual knowledge of the tenant vacating the premises prior to the renewal date.

The second case, which was tried in the United States Bankruptcy Court for the District of Massachusetts, involved defending a debtor against a claim of a creditor that certain loans had not been repaid. Jonathon Friedmann represented the defendant in this matter. At the end of the plaintiff presenting its evidence, Jon moved forward as it is referred to as a Directed Finding. The Court allowed the Directed Finding and our client, therefore, prevailed without even having to introduce any evidence.

The third matter was also tried by Jonathon Friedmann, but before a jury in Suffolk County. Our clients had performed a gut rehabilitation of a building listed on the Registry of National Historic properties. They had converted the building into four (4) condominium units. One of the unit owners brought suit claiming a violation of the implied warranty of habitability. After a full week of trial, the jury came back in favor of our clients indicating that the plaintiff had not established that there was a latent defect in the construction. The implied warranty of habitability in condominium unit sales is new theory that has recently been recognized by the Courts of The Commonwealth of Massachusetts. In order to be liable, a party must prove that there was new construction, that there was a latent defect, that there was a defect in the design, construction or material and that such defect was latent and that if that such latent defect caused some or all of the unit or the common areas of the condominium be unfit for human habitation. This same theory has previously been applied to new construction. However, in our case the application of the law was to both common areas and the condominium unit itself. Our defense was able to establish that there was no latent defect and that our client had properly developed, designed, and constructed the rebuild condominium units and common areas.

Jim Rudolph recently argued and won a case in the Massachusetts Appeals Court. The case, Shamrock Realty Company vs. David O’Brien, involved the application of a statute of limitations law in Massachusetts. The decision of the Appeals Court clarified how the Commonwealth’s choice of law doctrine should be applied. The firm’s client signed a guaranty of a personal loan in Massachusetts relative to a Rhode Island transaction. Rhode Island has a10 year statute of limitations; however, the Massachusetts statute of limitations for a suit on a breach of a guaranty is 6 years. The deficiency action on the guaranty was filed 9 years after the guaranty was signed by the client. Originally, the Superior Court ruled against the guarantor but on a Motion for Reconsideration the ruling was reversed. The Appeals Court upheld the decision on the Motion for Reconsideration and ruled in favor of our client, which resulted in his being relieved of any liability on the substantial deficiency on the guaranty.

Herb Friedman has been designated a 2008 Angel in Adoption by the Congressional Coalition on Adoption Institute, Washington, D.C., a national adoption advocacy organization with many congressional members, to celebrate his contribution to the lives of children through adoption.”

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