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MEMORANDUM OF LAW;1;MEMORANDUM;From;Baumfield & Baumfield LLP;To;ABC Insurance Company (ABC);Date;16th October 2014;Subject;As an associate of Baumfield and Baumfield, I hereby provide this memorandum in response to;Richard and Victoria Baumfields concern whether ABC Insurance Company may bring or fund;(litigation funding) claims in Michigan as per Michigan law.;Lehman v Detroit, G.H & M.R. Co. et al. (No. 170) (Mich. 1914), the supreme court states that at;common law, champerty is a bargain with a plaintiff or defendant to divide the land or other;thing sued for between them if they prevail at law, the champertor agreeing to carry on the suit at;his own expense. In common law, see, Smith v Childs, 497 N.W.2d 538 (Mich.App. 1993) it was;found that the defense of champerty does not exist in Michigan except as specified by statute;with regard to attorneys seen in the M.C.L.A 600.919(1). Therefore the rule of champtery would;not apply if ABC bought out the policyholders to bring about litigation. In say that, if ABC;decided to proceed with litigation they may have an action of an abuse of process bought against;them. In Peisner v. Detroit Free press, 242 N.W.2d 775 (Mich.App 1976) the court held that;there are two essential elements of common-law claims of abuse of process, they are an ulterior;purpose, and an act which is improper in the regular conduct of prosecution of a case. ABCs;ulterior purpose is ensure that they are not charged that special fund. In this situation it is;MEMORANDUM OF LAW;debatable whether the conduct of purchasing the policyholders claims to litigate, is an act which;is improper in the regular conduct of the prosectution of a case.;Where as maintence is defined in Fetters v. Wittmer Oil & Gas Properties, 242 N.W. 258 (Mich.;1932) as the offense of intermeddling where there is no agreement to share the proceeds. ABC;funding of the policy holder litigation would require a contract and will have to be very careful;with how it is worded as to not share in the proceeds but only to fund them. In Lawsuit;Financial, L.L.C v. Curry, 683 N.W.2d 233 (Mich. Ct. App 2004), the court found that if the;money is a loan then there is an absolute obligation to repay per the contract terms, it also found;that champerty does not apply to financing cases. The court of appeal found that the contract;terms needed to be set before the commencement of the litigation for it to be considered a loan;and the policyholders will only be liable to repay the amount loaned. Usury laws apply to;litigation funding. ABC whether they are funding them policyholders or loaning them the;money. If the loan exceeds 7%, it would be in violation of Michigan Laws and would be;cosindered void.;ABC can fund the policyholders litigation, there will need to be a clear and concise contract;signed by both parties for the loan.;2;Additional Requirements;Min Pages: 3;Max Pages: 5;Level of Detail: Only answer needed;Other Requirements: Michigan is my state


Paper#15916 | Written in 18-Jul-2015

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