The Attorneys at Rohrbachers Cron Manahan Trimble & Zimmerman Co., LPA consistently monitor current events and legal decisions to ensure our clients receive the most timely information possible. Our Firm Blog contains commentary of these events by our team. This page is intended to be conversational with our customers and legal advisers. Please feel free to comment or share our thinking with others.
On occasion, I have represented individuals and companies regarding discrimination and harassment. There is a new wave of discrimination claims called “Family Responsibility Discrimination,” or FRD. The most common definition of FRD is discrimination against workers who have family caregiving responsibilities, such as employees who are mothers and fathers of young children, parents of disabled children, or caregivers for pregnant women, aging parents or sick spouses or partners. Legal issues and claims have not been fully developed in this area as of yet, but the claims are often based upon an employee’s absenteeism where he or she has to leave to care for an individual described above, resulting in their being discriminated against by not being promoted, not receiving job assignments or even being terminated.
If one does not believe that this is a significant risk, the example of Novartis Pharmaceuticals, which in 2010 settled a class action lawsuit brought by women (often pregnant) claiming discrimination, is instructive. The cost of settlement for Novartis exceeded one hundred fifty million dollars. More recently, in May of 2013, a class action suit seeking more than $100 Million was filed against Merck & Company in the U.S. District Court in New Jersey. In that case, women claimed that if they had children or had to take maternity leave that they were discriminated against. Merck’s actions allegedly included demotions, less pay, failure to develop women into management roles and treating pregnant women differently than males or non-pregnant women. It was also claimed that the company would try to get pregnant women, mothers and women who wanted to have children to leave the company.
The EEOC in 2007 issued a publication called “Enforcement Guidance; Unlawful Disparate Treatment of Workers with Caregiving Responsibilities.” What this document did was point out areas where disparate treatment might violate Title VII or provisions of the Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA). Such conduct includes such conduct as:
1) the unlawful disparate treatment of female caregivers as compared with male caregivers;
2) the unlawful gender role stereotyping of working women, including benevolence stereotyping and assumptions regarding work performance;
3) engaging in stereotyping in subjective assessments of work performance;
4) pregnancy discrimination;
5) discrimination against male caregivers and women of color;
6) stereotyping based on an association with an individual with a disability;
7) the creation of a hostile work environment by virtue of offensive comments related to caregiving responsibilities; and
8) retaliation related to caregiving responsibilities.
Employer should be aware that the Department of Labor in January of 2013 issued a clarification of the FMLA provision regarding protective leave in the care of a son or daughter who is 18 years or older and has a disability. The Department of Labor found that a parent is entitled to take a leave of absence to care for a son or daughter who is 18 years of age or older, under certain conditions. It should be noted that the document stated that the age of onset of the disability is irrelevant. To qualify for an FMLA leave, the child must:
1) have a disability as defined by the ADA;
2) be incapable of caring for themselves due to that disability;
3) have a serious health condition; and
4) be in need of care due to the serious health condition.
An area of concern exists not only in regards to children, but also that with the aging of baby boomers there will be a corresponding increase in caregivers for elderly parents.
This new area of claims is going to be very challenging for all involved as the law develops. As an employer, the key is to be fair to all individuals even if they have to utilize sick leave, personal time, vacation or even an FMLA leave to be a caregiver. One cannot discriminate against these individuals once they return to work. They should have equal access to promotions, projects and compensation. One should potentially develop a policy regarding this area that would comply with the EEOC policy in defining a caregiver, caregiver responsibilities and what is defined as a family.
If you have any questions regarding the above, please do not hesitate to contact one of the attorneys here at RCMTZ.
Most people are familiar with the concept of transfer on death (“TOD”) with respect to stock certificates, investment accounts, or bank savings and checking accounts. TOD designations have become a convenient and easy way to transfer assets without subjecting those assets to the probate process. Under statutes enacted, and refined, in the State of Ohio in the past few years, the TOD concept is now available for non-probate transfers of real estate.
Although the actual conveyance of the real estate involved does not occur until the death of the party making the designation, a TOD conveyance is initiated by the owner of real estate completing, and recording, a Transfer on Death Designation Affidavit in which certain required information is recited, including the name of the beneficiary to receive the property after the death of the designating party.
Once a designation is made, it can be terminated or changed by recording a Revocation of Transfer on Death Designation form, and completing and recording a new designation affidavit.
The process is complete, and the property is conveyed by operation of law, upon the death of the designating party. A Transfer on Death Affidavit of Confirmation is recorded by the beneficiary to evidence the completed conveyance.
TOD designations are very flexible in that trusts or legal entities may be designated as a beneficiary. In fact, multiple beneficiaries can be designated, even with varying percentages of ownership interest in the real estate. TOD designations for real estate are, therefore, a convenient and flexible tool as part of an estate planning program.
If this sounds like a planning measure that you could use in your planning program, contact one of our estate planning attorneys to discuss its possible use.
Recently, I was fortunate enough to take a cruise into a warmer climate. Although we did not relish returning to the frigid weather of Toledo, we made plans for our return as the cruise entered its final leg. On the last night of our cruise our ship, along with three other ships, was denied access to the Tampa Harbor. A heavy fog had fallen over the area and the port was closed. The ships lined up at anchor roughly 47 miles outside of their berths. Unless the fog lifted very early in the morning, an awful lot of flights were going to be missed. Due to less than stellar planning my wife and I had already changed our flight to Monday morning, and thus we could enjoy the pea soup views.
While the cruise line indicated that this type of delay was a first, the fact that we didn’t leave the ship until roughly 2:00 PM meant that several of the flights that day out of Tampa going north lacked a large number of passengers. The unfortunate reality that many of those passengers learned was that when one flies with non-refundable tickets they may bear the costs of the changes and delays caused by the weather. In speaking with several passengers it became clear that different airlines were taking different approaches towards charging passengers for rebooking. The fog which marred the final day of our cruise, while less than pleasant, taught an important lesson – one needs to ask in advance how weather delays are going to be handled by a carrier. Although a travel agent may very well know in advance how to deal with unexpected delays of this nature, the unprepared traveler may be surprised to see that unexpected delays can deprive them of a lot of their money as they scramble to reorganize travel plans at the last second. Anticipate the impact of possible delays when scheduling your travel plans so that your wallet doesn’t receive a rude awakening when the unexpected happens!
While generally most of my blog posts address issues in litigation or insurance related topics, I was preparing a will and the related documents the other day and a funny thing occurred to me: I have never made my own will. I used to chalk that up to being single and the fact that under the laws of Ohio my family would get anything I had and I was fine with that. But as I sat there I realized how even that was pretty bad reasoning, because the process of getting a will addresses so much more than who gets your “stuff.” The reasoning fails even more when you consider that a simple will, living will, healthcare power of attorney and general power of attorney (generally getting a “will” gets you all four) costs very little and addresses situations well beyond who gets your property when you are gone. In fact, most of the critical things addressed involve a person while they are still living. So I put together a list of the primary reasons why the cost of a simple will is easily outweighed by the benefits.
You have minor children: Perhaps the single greatest reason to have an actual will is that you have minor children. If both you and your spouse/child’s other parent, a will allows you to convey your wishes regarding who you would like to become the guardian of those children. While obviously the will does not make the final decision (a court has to approve the selection), generally a court will give great consideration to the person nominated in the will and in turn provide the greatest chance of implementing your wishes.
You do not die immediately: When people think of getting a will, they often times forget that the process also generally involves getting a living will. The living will is what addresses your desires, should you be unconscious or in a vegetative state and unable to convey your wishes. The living will can address any number of things regarding your healthcare, but the two primary concerns addressed are whether you want to have life sustaining treatment or wish to have that treatment terminated in certain situations, and whether you wish to have food provided to you if you are unable to eat on your own. There are plenty of safeguards built into the language of a living will (more than one doctor has to assess your situation, etc.), but the living will also relieves some of the stress involved with your family and loved ones trying to “guess” at what you would want done.
The person you trust most is not family: In some situations, the person you want to make healthcare decisions on your behalf if you are unable to make them for yourself is not a spouse or family member. The healthcare power of attorney basically gives that power to a person you designate while still in a sound state of mind. In a state such as Ohio that does not recognize same-sex marriage, it permits a person to transfer that decision-making authority to a significant other. And not to worry, no matter who is nominated, you can still put limitations/restrictions on that person’s decision making authority (for example your living will would trump the healthcare power of attorney).
You care who gets your “stuff”: As I am sure we have all seen at one time or another, sometimes when a person dies it is like a race to the house for the remaining family to start looting their stuff and taking the keepsakes that each person wants. Years later, people are still upset because Aunt Gertrude took all the silver in the house. Making a will requires at least some type of oversight process (more so than if you died without one) before things are just taken and, more importantly, allows you to make sure that each person gets what you want them to have.
It relieves unneeded stress on a significant other: I have always joked that the day I die will actually be the most stress free day in a long time. The reality is, however, that those left behind are left with a lot of stressful things to take care of at a time when they are grieving. Leaving a will at least helps minimize some of those stressful things by giving some direction on how you want your affairs addressed. Things such as who should be the administrator can be addressed, thereby preventing fighting between siblings or children and “new” spouses.
While there are certainly hundreds more reasons to get a will and the related documents, the five listed above are important enough not to need more. Furthermore, the time (and expense) involved is generally minimal and the peace of mind priceless.
For years e-mail scammers have been providing me with a good laugh each morning. I start my day by checking my e-mail, only to find that a deposed Nigerian prince e-mailed me in the middle of the night seeking my legal services. In broken English, I am informed that Prince Jones Dimka has fled his country to escape political unrest. Now he needs a lawyer just like me to accept payment of $30,000,000 into my trust account. Best of all, I get to keep 10% of the funds, just for holding his money for a few short days!
Unfortunately, not all e-mail scams aimed at attorneys are so easy to detect. Lately, I have received scam e-mails addressing me by name, practice area, and geographic location. No longer are the scammers posing as foreign dignitaries. Instead, they are posing as small business owners seeking help to collect on bad debts. To further advance their fraud, these scammers claim to work for local businesses which have recently closed. Therefore, if a target runs an internet search on the potential client, the search will appear to identify a legitimate business.
There are many telltale signs of e-mail scams. When attempting to detect potential scams, the thing to remember is that the scammer is ultimately looking for you to write them a check out of your trust account. The scammers are not foolish enough to believe that you will simply cut them a check. Instead, their scam is based upon the illusion that they will give you money in the form of a settlement. With the settlement funds in your IOLTA account, they will ask you to write them a check for the full amount, less your attorneys’ fees. If everything works according to plan, they will cash your trust check shortly before your bank informs you that the previously deposited settlement check is bogus. By that time, the scammers will have absconded with the funds held in trust.
Here are a few telltale signs and tips for identifying whether an attorney e-mail solicitation is a scam.
The e-mail requests assistance from a “barrister” or “solicitor”. This is a sure sign that the e-mail originated from someone who does not live in the United States.
The e-mail seeks assistance for a case pending in your “jurisdiction”. A legitimate client would tell you he or she has a case pending in Toledo, or Lucas County, not “your jurisdiction”.
The e-mail contains poor grammar. The use of poor grammar could suggest that the e-mail has been translated into English via a software translation program.
The e-mail has been sent to “undisclosed recipients”. If a potential client sends you an e-mail, your e-mail address should be listed as the addressee. If the e-mail has been sent to “undisclosed recipients”, the same e-mail has been sent to a number of targets at the same time.
If a potential client asks you to handle an “easy” collection matter, beware. If you accept this matter, you can bet that a quick settlement will be reached, whereby a large check will be deposited into your trust account. Later, you will discover that the settlement check is bogus.
Everyone else in your law firm receives the same e-mail. This is a sign that a scammer has visited your firm website, copied all of the e-mail addresses, and added them to their list of “undisclosed recipients”.
Tips for avoiding e-mail scams.
Insist upon a face-to-face meeting with your potential client. Following this tip will weed out most scammers.
Conduct research on the internet to verify the client’s identify. You can search your potential client by name, address, and telephone number. Don’t forget to check the Ohio Secretary of State’s website, in order to determine if the company is still in business.
If you accept funds on behalf of your client, you may want to consider holding the funds for an extended period of time. Before releasing any funds to a suspect client, you may also want to verify with your bank that the funds previously accepted have cleared.
Ask your potential client a lot of questions. Recently, I called a local number listed on a scam e-mail. When I spoke with the scammer, he delivered a rehearsed story with ease. Once I started asking him specific questions about his business, such as when it was formed, what exactly they did, and the names of other company members, his story fell apart. It was immediately apparent that the scammer was not who he claimed to be. Rather than struggle with answering my simple questions, the scammer hung up.
On November 27, 2013, Ohio’s 2nd District Court of Appeals released its decision in the case of In re The Estate of Horn, 2013-Ohio-5235. In Horn, the 2nd District reviewed a situation where the daughter of a deceased individual claimed she was owed payment from her father’s estate for repairs she performed on her father’s properties while he was still living. In reaching its decision, the Court considered the Hinkle Family Relationship Doctrine and ultimately ruled against the daughter’s claims.
The Hinkle doctrine stems from a 1902 Supreme Court of Ohio case, Hinkle v. Sage, 67 Ohio St. 256. In Hinkle, the Supreme Court established a rule for situations where an individual claimed to have entered into an agreement with a family member who later died. If the individual later filed a claim against the estate, no obligation to pay for the services is implied. Rather, that individual was required to establish that “there was an express contract upon the one side to perform the services for compensation, and upon the other side to accept the services and pay for them.” Id, paragraph one of the syllabus. In other words, the Court was requiring that a claimant must establish conclusively that the decedent had agreed to pay for the services being rendered. This prevented a family member from performing services for a relative and then later, after the relative had died and could not dispute the claim, saying that the relative meant to pay for the services all along.
In the Horn case, the Court was faced with a situation where, when the decedent’s will was presented to the probate court, it was revealed that the father had left equal shares to each of his six children. The decedent’s daughter then claimed to have performed work on real estate owned by her father, and claiming that as compensation for her work, she should be paid $28,572.00 from her father’s estate. The probate court determined that the daughter’s testimony was not credible. In upholding the probate court’s decision, the 2nd District noted that, per the Hinkle Doctrine, a claimant must prove, “by clear and convincing evidence, that there was an express contract between the claimant to perform the services for compensation and the decedent to accept the services and pay for them.” Horn, ¶ 15.
The lesson to be learned from Hinkle and Horn is clear; if you perform services for a family member and expect to be reimbursed for those services, treat the family member like you would any other person with whom you would enter into a contract. Although the agreement can be in the form of an oral contract, you are better off putting your agreement in writing. If you should have to make a claim for your services in the event the family member later dies, it is your job to prove that an agreement exists through “clear and convincing evidence,” a potentially challenging burden to meet. Simply relying on your own testimony, like the claimant in Horn, probably won’t be enough. Remember the Hinkle Family Relationship Doctrine and take the time and care to get your agreement in writing, or else you might not be getting paid later on!
On Saturday, November 16, 2013, Shareholder Mark Trimble took a break from his usual job to participate in a unique Toledo tradition, the Downtown Holiday Parade’s Distinguished Clown Corps. In a full clown costume, from baggy pants to a wig of bright yellow hair, Mark took to the streets of downtown Toledo to hand out candy and balloon animals to the crowds turning out for the parade.
The Distinguished Clown Corps has been a mainstay of Toledo’s Downtown Holiday Parade since 1987 and boasts a long and distinguished list of business leaders, politicians and other participants. The Corps’ members wear custom-made costumes and full clown makeup, and wear bells to mark the number of years each clown has participated in the parade. During the parade, the clowns give candy and balloons to spectators. The Corps was originally founded to help fund the parade, and members of the Corps make a financial contribution to help make the parade happen each year. Mark is the second attorney from RCMTZ to participate in the parade, joining Nick Cron, who served as a clown in the 2011 Holiday Parade. The Corp’s website can be found here.
Should I date my boss? That is up to the individual but the bigger question is should your boss date you? The answer to that question is an absolute NO!
Over the last several years, I have defended multiple cases where there has been an alleged relationship between a superior and a subordinate. All of these cases have ended in a sexual harassment claim. I have heard allegations by the subordinate that they felt forced into the relationship by the superior. Also, that if the relationship initially was consensual that it later became non-consensual and they felt pressured to stay in the relationship because of the superior. In one case, after an initial consensual relationship, it ceased and the subordinate believed that the superior treated them poorly, treated them unfairly and prevented them from having the opportunity for advancement.
As a supervisor, owner or manager, there are various code sections that deal with sexual harassment. The Ohio Revised Code Sections 4112.02 through 4112.99 lists several areas of harassment. Further, if a supervisor allegedly harasses an individual, a company has to have an avenue for an individual to register their complaints of harassment with the company.
I advise my clients on a regular basis that while they can have a professional relationship with employees that work for them that they should never ever place themselves in a situation where that relationship can be interpreted as dating or to ever enter into a sexual relationship. At that point, I inform them that they are playing Russian Roulette with a sexual harassment claim if they choose to have any type of relationship other than a professional relationship.
The Plaintiff’s bar has attempted again to limit Robinson v. Bates in the Moretz v. Muakkassa case (Slip Opinion No. 2013-Ohio-4656). On October 24, 2013, the State Supreme Court rebuffed this attempt. The Plaintiff’s bar in Muakkassa attempted to force the defense bar to use an expert in the introduction of the Robinson v. Bates numbers (indicating the amount of medical bills that were written off by the medical providers). This was defeated as the Supreme Court stated:
On several occasions, we have had the opportunity to clarify the law on the use of evidence of write-offs in negligence actions. . . . We have repeatedly recognized that “either the bill itself or the amount actually paid can be submitted to prove the value of medical services”.
The Court further stated:
. . . we recognized that “R.C. 2317.421 makes . . . bills prima facie evidence of the reasonable value of charges for medical services”.
In an important piece of dicta, the Court stated:
. . . we concluded that the common-law collateral-source rule does not exclude evidence of write-offs of expenses that are never paid. A write-off is not a payment, and thus it cannot constitute payment of a benefit. Thus, evidence of write-offs, can be admitted because the tortfeasor does not obtain a credit therefrom.
The Court further stated in dicta:
Moreover, we declined to adopt a categorical rule that the reasonable value of medical services is either the amount billed or the amount paid. Instead, the reasonable value of medical services is a matter for the jury to determine from all relevant evidence. The jury may decide that the reasonable value of medical care is the amount originally billed, the amount the medical provider accepted as payment, or some amount in between.
The Ninth District Court of Appeals had held that the reasonable value of the medical services was outside the common knowledge of a lay person and therefore expert testimony was necessary to lay a foundation for the presentation of this evidence of write-offs to a jury. The Supreme Court strongly disagreed with this notion. The Supreme Court stated that the plain language of R.C. 2317.421 refers to “. . . a written bill or statement or any relevant portion thereof.” Moreover, the Court stated the quotation of “. . . any relevant portion thereof” broadens the meaning of a bill or statement. Further, the Court recognized that there is no language in the statute that would exclude write-offs from the statutory presumption that medical bills are reasonable. Therefore, the Court held:
There is no basis for requiring expert witness testimony that the actual amounts charged for medical services are reasonable, when the initial charges for the services are admissible into evidence without such testimony. Eliminating the need for expert testimony allows both parties to avoid the expenses and the usual empty ceremonial of expert testimony on reasonableness . . .
Thus, we conclude that R.C. 2317.421 obviates the necessity of expert testimony for the admission of evidence of write-offs, reflected on medical bills and statements as prima facie evidence of the reasonable value of medical services.
So it is once again clear for Defendants, that in the State of Ohio, an expert is not required to submit evidence of the write-offs of the medical bills as long as the evidence has been presented to Plaintiff’s counsel seven (7) days in advance of a trial pursuant to R. C. 2317.421.
Detroit Achievement Academy exists to holistically support the education and development of students who have the determination, drive, and skills to shape their own path of high achievement with the ultimate goal of creating civically engaged, joyful citizens who are ready to change the world.
That’s the mission statement of Detroit Achievement Academy, a scrappy start-up charter school located in Detroit, Michigan in the Grandmont/Rosedale area. In a city that has more than its fair share of high-profile embarrassments – whether it’s bankruptcy or the ongoing saga of Kwame Kilpatrick – DAA represents hope and the endless possibilities that exist in children. I was honored to be asked to join the founding Board of Directors of this school, and it’s been one of the most rewarding experiences of my life.
In less than a year, DAA has been founded, authorized by Grand Valley State University and the State of Michigan, and opened its doors to students. Kyle Smitley, my law school classmate and the pride of Defiance, Ohio, founded DAA with the hopes of changing education and the lives of children in Detroit. It hasn’t been easy, but she is doing it. DAA has reached out to some of the poorest areas within Detroit, and provides free education and bus transportation to these students. DAA has hired some of the best teachers and administrators anywhere, and has established a learning curriculum with focus on healthy food. Finally, DAA is a non-profit entity which supplements its funding through donations.
DAA is one of the few charter schools in the state of Michigan that is not run by a management company. In addition, DAA is the only school I know that is partially crowd-funded. To get the school off the ground, DAA raised over $35,000 through indiegogo, which is a website similar to Kickstarter. After a break-in, DAA again utilized its social network to raise money to replace the stolen property.
The biggest asset of Detroit Achievement Academy is its people – Kyle Smitley, the amazing staff, and DAA students. After the most recent board meeting, I got to look at their first self-portraits, and they were amazing. Just walking through the school you can tell it is a joyful place – there are lots of bright colors, students’ artwork lines the walls, and there is a list of the students’ favorite chants and songs in the teacher’s lounge. The work being done there is inspiring, and I’m looking forward to watching our scrappy school turn into the best K-8 school in Michigan.
One of the blessings that may occur during the career of a business lawyer is representing at the same time an innovator with great ideas AND clients interested in investing in outstanding local opportunities. Although such a combination is fraught with the potential for conflict, when it is successful, if business can be beautiful, this is.
And, if such a blessing is possible and its success beautiful, imagine this happening simultaneously in two separate combinations and then the two combinations coming together. Stars align to galactically announce an event seemingly less frequent than the passing of Haley’s Comet. As the enterprises approach profitability, the potential for conflicts is now cubed, becoming as close to certainty as tomorrow is the day after today.
I have somewhat facetiously referred to the process of being aware of the capabilities of clients and being able to bring together those who enjoy synergistic attributes as connecting the dots. When enough are connected, identifying potentials for conflict becomes a daunting exercise. Yes, conflicts identified can usually be waived, but they can be later reasserted. At some point the risks to the clients and to the enterprises must be avoided rather than managed. At that point, the lawyer appreciates the exigencies his profession presents. If possible, that lawyer may withdraw from representing certain of the parties with their approval and may continue representing others. Or the lawyer may conclude that he must no longer serve the clients and the enterprises – where his role has been so significant – as a lawyer.
That is the dilemma I faced this summer. The resolution: I am now the Managing Director of the parent entity of one side of the combination and a member of the board of directors of the company comprising the other side. Earlier I had advised the group of clients who are participants in the enterprises as outside counsel, now I am a participant from within, continuing to connect the dots as I have in the past, but no longer as a lawyer.
As of September 1, 2013 I requested and have been granted inactive status by the Ohio Supreme Court. Although my new roles entail managing those providing legal services to our venture, I now act as a client.
I was admitted to practice law in Ohio in May, 1975, more than 38 years ago. I am proud to have been associated with RCMTZ, the firm I resurrected, rebuilt and turned over to managers more capable than I am. I have in no small measure drawn on the primacy my family name bears in the firm name, the first name of which referenced my father, then me as the guy at the top of the letterhead, and my brother, who is now listed at the top.
The firm has been recognized as an outstanding regional law firm by its membership in Primerus, an international confederation of law firms. Its lawyers are formidable and friendly. I mark as a great memory the years spent there, the people I’ve worked with, the transactions closed, the trials won. Going forward, I expect to be as proud of the firm as a client as I was as a member. If the leaders of the firm permit me, I hope to offer an occasional reflection on my new experience as a client of the firm. Until then….
Ohio recently adopted a law prohibiting texting while driving, which became effective in August of 2012 (See O.R.C. Section 4511.204). If there is an accident while driving, a violation of the Ohio statute would most likely result in civil liability for the driver. Statutes of this nature are typically viewed as safety statutes and a violation would likely translate to a determination that the driver was negligent.
Since that time, other states have gone much further in imposing liability for texting. A recent case in New Jersey, Kubert v. Best, Superior Court of New Jersey, Appellate Division, Docket No. A-1128-12T4, examined the issue of liability for the party who sent the text. That court held, “… that the sender of a text message can potentially be liable if an accident is caused by texting, but only if the sender knew or had special reason to know that the recipient would view the text while driving and thus be distracted.” In that case, the court did not find that there was sufficient evidence to prove the individual who sent the text knew the recipient was driving at the time.
In Ohio it is now common for plaintiff’s attorneys to ask in discovery for phone records to see if someone was talking on their phone or texting at the time of the accident. (This is a common practice of defense counsel as well.) In cases where the plaintiff’s counsel believes there is not sufficient insurance coverage to compensate the injured party, it may well result in the party who sent the text being sued as well.
Many articles have been written about which state or states are most advantageous for the formation of a limited liability company (LLC). One important consideration has to do with how the state of organization treats claims made by creditors of one of the LLC’s members. Members should ask whether the state’s laws or court decisions can be used to force the prospective LLC to pay an individual member’s debt or face the possibility of liquidation. Many states have conflicting court rulings or no statutory laws on this issue. This gives the creditor of a member considerable leverage to force the company, and possibly the LLC’s other members, to pay a member’s personal creditors in order to avoid protracted litigation and possible liquidation. This can have severe consequents for a business, especially one needing to deploy all of its resources to operations.
In May of 2013, Ohio limited the rights of an individual member’s creditors who have been assigned that member’s interest in an LLC as part of their collection proceeding. Ohio Revised Code sections 1705.8 and 1705.19 were amended to limit a creditor’s rights solely to a “charging order”. What this means is that a creditor of a debtor member may not seize, execute, garnish, or foreclose on a membership interest by claiming that the LLC is acting as a constructive or resulting trustee for the debtor member. Ohio law now provides that a judgment creditor’s rights are limited solely to receiving the debtor member’s share of the profits of the company when and if distributions are declared by the company for all members. Thus, business operations are not affected by the personal problems of a member and the creditor can only receive funds from an LLC when a payment is made to all members, and then only to the extent that the debtor member would have been entitled to the distribution.
The new Ohio law also clarifies a long-standing ambiguity as to whether an assignee (creditor) is bound by the operating agreement of the company which it did not sign. By limiting relief to a charging order, this ambiguity is clarified. Further, the new law does not distinguish between single-member LLCs and multimember LLCs; therefore, it is arguable that the statute applies whether or not the company is a single-member or multimember LLC.
There’s no question that today is the age of social media. It certainly seems like all of your friends, neighbors, children and (horror of horrors) your boss and parents, have a Facebook account, a MySpace page, a Twitter handle, a Pinterest app, or all of the above. What a lot of people tend to forget, however, is that just because everyone is posting just about everything they think, say or do to the internet doesn’t mean that it is a good idea, and as lawyers we have begun to see substantial legal consequences appear for people who didn’t take the time to think before they tweeted or posted a status update. Fortunately, there are many examples of behavior from which we can learn how not to act on the internet.
Most of the time, being smart on social media accounts is about using common sense. After all, most of us, if we did something stupid that hurt someone else wouldn’t be in any hurry to joke about it on our Facebook page. But in today’s society, where everything we do, say, eat or think about must be posted online for our friends to like and comment about, some things are just better left unsaid. Take the example of Paula Asher, a young woman who an NBC article reports was involved in a car crash, then posted to her Facebook account that she had gotten a DUI and hit a car, then added the acronym “LOL” (meaning “Laughing Out Loud,” for anyone who has avoided the internet or text messages for the last 15 years) to her message. The judge presiding over Ms. Asher’s case, when informed of Ms. Asher’s post, didn’t find anything humorous about the case and instead ordered Ms. Asher to disable her Facebook account. When Ms. Asher failed to do so, the Court handed her a two-day jail sentence for contempt of court.
Of course, social media concerns aren’t limited to criminal actions or contempt proceedings. As the popularity of social media has skyrocketed, so have discovery requests related to parties’ online presence in civil cases. It is quickly becoming a standard procedure for attorneys not only to search for an opposing party on Google and other search engines, but also to see if those parties have Facebook or MySpace pages where information useful to a case can be obtained. Many people leave their social media profiles or Twitter accounts publically viewable, which means that an opposing party can easily read what that individual has posted to see if there is any information there which could be damaging. It is also becoming a popular strategy to request access to an opposing party’s social media accounts, even if those accounts are set to “private”. While the law in most states appears to be unsettled as to the extent an opposing party can obtain private messages, photographs and other information not available to a widely public audience, it is at least arguable that if a party’s social media account could contain information relevant to a civil case, it should be available for review by an opposing party, especially if the party posting the material has made it available to other people.
Because settled legal issues typically lag several years behind new technology and legal strategies, it is unclear to the extent that courts will allow opposing parties to obtain and use information stored on social media accounts. It is certainly clear, however, that careless or foolish posts on your Facebook page or Twitter account can land you in some hot water, and lead to serious consequences in the future. As always, think before you post information to the internet!
I was involved with another counsel in a large commercial contract dispute. When he abruptly left his law firm, I started doing some digging. I quickly realized one of the reasons why he might have left the law firm. He was national coordinating counsel for Goodyear Tire for litigation involving a particular type of tire. During his years as national counsel, he was involved in a case in the Federal District Court of Arizona. It is clear from the sixty-six page opinion authored by the Honorable Roslyn O. Silver, Chief United States District Judge for the District of Arizona, that she was significantly displeased with the attorney and Goodyear’s actions in that case.
The basis for the case was that there was a tire failure, which allegedly caused a motor vehicle accident. This type of tire was intended for pickup trucks but was being used on RVs. Goodyear conducted tests that revealed that there would be tire failures at certain temperatures and at certain weights. Even though the results of Goodyear’s testing on the tire had been requested by the Plaintiffs’ counsel in written discovery multiple times, local counsel, national coordinating counsel and Goodyear did not provide this particular test.
During the case, written discovery propounded by Plaintiff’s counsel would be sent to Goodyear’s Arizona attorney. That attorney would in turn send the discovery to the Goodyear’s national counsel. The national counsel would prepare the responses to the written discovery and would forward the responses to in-house counsel at Goodyear for approval. Only after in-house counsel reviewed and approved the response would the responses be sent to Plaintiff’s counsel. Plaintiff’s counsel did not believe that Goodyear was fully complying with discovery requests and multiple hearings took place regarding Goodyear’s discovery responses. On multiple occasions in front of the court, local and national counsel represented that all the testing that had been requested had been provided to the Plaintiff.
After the Arizona case was settled, the Plaintiff’s counsel became aware that the testing he sought had been disclosed by Goodyear in a trial involving the same type of tire in Florida. These tests results were harmful to Goodyear’s position. Plaintiff’s counsel was understandably not happy that the requested test information had not been provided in the Arizona case and brought an action for sanctions against local counsel, national counsel and in-house counsel for Goodyear.
The Arizona Court, in reaching its decision, stated that Goodyear’s national coordinating counsel “. . . deliberately withheld these responsive documents in the best interest of Goodyear.” In addition, the Court found that local counsel and national coordinating counsel’s testimony conflicted with the documentary evidence and was not credible at the hearing for sanctions. Further, Judge Silver noted that national counsel and Goodyear “. . . engaged in repeated deliberate attempts to frustrate the resolution of this case on the merits” and that Goodyear and its attorneys “. . . adopted a plan of making discovery as difficult as possible, providing only those documents they wished to provide, timing the production of the small subset of documents they were willing to turnover such that it was inordinately difficult for Plaintiffs to manage their case, making false statements to the court in an attempt to hide their behavior.”
The Court held that the actions of the two outside counsel and that of an in house counsel on behalf of Goodyear were in bad faith. It was determined that the national counsel and Goodyear were held jointly responsible for 80% of Plaintiffs’ counsel’s legal fees. The local counsel was made responsible for paying the remaining 20% of the fees. The total award between costs and attorneys’ fees was $2,884,057.39.
This matter is currently under appeal. But what one can learn from a case like this is that if you have important documents, it is far wiser to cooperate in discovery for a commercial litigation case than it is to improperly withhold the discovery. If you withhold documents that would be relevant to the litigation, whether you are an attorney or a client, you may potentially be held in contempt and face significant sanctions.
Shareholder Matt Rohrbacher successfully defended an admitted liability case in Fulton County, Ohio in early 2013. The case was noteworthy as Mr. and Mrs. Boyers, the Plaintiffs, were both over 80 years of age when the case went to trial; in fact, the judge noted that the Plaintiffs were the oldest plaintiffs that he could recall. The jury was asked to determine; not only how much of the $64,000 paid in medical bills for Mr. Boyers and $22,000 paid in medical bills for Mrs. Boyers were related to the accident, but also how much of the bills that were paid by their auto insurance carrier should be repaid to the carrier.
The Plaintiffs had stopped at an intersection on State Routes 109 and 20 in Fulton County. After they pulled forward from the stop sign, they stopped again on the south side of SR 20 when the Defendant, who was directly behind them, hit the left rear corner of their van. The damage appeared to be minimal in the photos presented to the jury. The Plaintiffs testified that they had been hit at a high rate of speed, information that they had passed along to all of their health care providers.
A little over a year after the accident, Mr. Boyers had a back surgery for a condition that had existed for years but which he argued was aggravated by the accident. The treating doctors, including a neurosurgeon, testified about the Plaintiffs’ medical history. Mr. Boyers had been undergoing steroid injections into his back for years and had received one as recently as 10 days prior to the accident. Some of the presented medical bills appeared to have been charged to the Bureau of Workers Compensation for problems that clearly predated the accident. Mr. Boyers insisted on telling the jury that the medical records, which indicated he could work in his yard after the accident, doing such things as chopping wood, were not accurate.
Mr. Rohrbacher chose not to use an independent medical expert and relied upon cross-examination of the doctors instead. This was in part due to the material in the medical records and past experience with the neurosurgeon, as well as the fact that the various video depositions were already roughly 5 hours long. Additionally, the Boyers’ family physician testified that the hip replacements that Mrs. Boyers had following the accident were unrelated to the accident but rather a result of her arthritis.
The jury was out for nearly 4 hours, due in large part to the jury interrogatories submitted by the underinsurance carrier, who was also a defendant, for the medical bills they had paid. The jury gave each of the Plaintiffs $5,000 for past pain and suffering, $0.00 for future pain and suffering, $0.00 for loss of consortium and for medical expenses each incurred as a result of the accident; $17,600 for Mr. Boyers and $750 for Mrs. Boyers. All of the previously paid medical expenses were eventually repaid to either their auto carrier or Medicare.
The case was tried in large part because the Plaintiffs’ counsel believed that a jury would find the Plaintiffs to be such nice people that they would give the Plaintiffs a sizable award. Plaintiff’s counsel also believed that presence of the underinsurance carrier in the trial would inflate the verdict. The jury did not award the Plaintiffs what their attorney suggested, and, in making their finding, left a sizeable amount of the costs of the trial to be borne by their attorney.
Roughly a week after the trial one of the jurors called and volunteered to explain how they arrived at the numbers they did. She indicated that everyone on the jury knew after they saw the photos of the vehicle that no high speed collision occurred and, after seeing medical records of treatment before and after the accident which appeared to be identical, they were convinced the surgery was not related. She also pointed out that a number of the medical bills appeared to be double billing.
On January 30, 2013, shareholder Mark Trimble won a trial in an auto accident case heard before a jury in the Lucas County Court of Common Pleas. The case, Nancy Bloom, et al. v. Kelly Powhida, culminated in a trial which lasted two and a half days. After only 35 minutes of deliberation, the jury returned a verdict in favor of Mr. Trimble’s client, Kelly Powhida. Read More
On January 30, 2013, shareholder Mark Trimble won a defense verdict in an auto accident case heard before a jury in the Lucas County Court of Common Pleas. The case, Nancy Bloom, et al. v. Kelly Powhida, culminated in a trial which lasted two and a half days.
The Plaintiff, Nancy and Michael Bloom, sought damages resulting from an accident in which Defendant Kelly Powhida struck the rear-end of a vehicle operated by the Plaintiff’s daughter, Carrie B. Stout. Mrs. Bloom was a passenger in her daughter’s vehicle, which was estimated to have incurred damages of $6,250.16. Photographs of the vehicle indicated that it had incurred moderate to heavy rear-end damage. Ms. Powhida’s vehicle was estimated to have sustained damages of $6,444.06.
During the trial, the Plaintiffs presented medical bills of $87,003.44. The Robinson v. Bates number (the amount actually paid to Mrs. Bloom’s medical providers as full payment for treatment) was never clearly identified, but Plaintiff’s counsel agreed on the approximate amount of $33,000.
A key focal point in the case was that Mrs. Bloom had a significant pre-existing condition, which she partly denied. Mrs. Bloom, during her deposition, admitted that she had surgery on her neck in 2004. During her deposition, she testified that her only neck issue between her surgery and the accident was some mild stiffness, for which she saw a chiropractor for treatment one time. During trial, Mr. Trimble pointed out that this testimony was incorrect as Mrs. Bloom was treated on a regular basis by multiple doctors. Before the accident occurred, Mrs. Bloom received multiple physical therapy sessions as well as an MRI, CT scans, multiple EMGs and X-rays of her neck. At the time of the accident, Mrs. Bloom was taking several medications for her neck.
During the trial, Mrs. Bloom and most of her witnesses were impeached regarding their testimony about her prior medical treatment. In fact, Mrs. Bloom’s husband admitted that his wife had neck and back issues before the accident occurred. Three expert physicians testified on Mrs. Bloom’s behalf: the neurosurgeon who performed her prior surgery, her family physician, and a neurologist that Mrs. Bloom had seen both before and after the accident. A major issue in the trial was Mrs. Bloom’s expert witnesses being unaware of her prior treatment. Another factor which worked against Mrs. Bloom was the investigating officer’s testimony that Mrs. Bloom had stated at the scene of the accident that she was not injured. Following the accident, however, Mrs. Bloom went to her home before going to the emergency room.
The defense did not need to present an independent medical examiner. Instead, the defense’s only witness was the Defendant herself, who testified regarding the accident and admitting her negligence in causing the accident.
Prior to the trial, the parties attempted to mediate the dispute. The Defendant initially offered the Blooms $10,000 to settle the case. The Blooms did not make a counteroffer to Ms. Powhida’s offer at the mediation; instead, the Blooms’ first settlement demand was made a week prior to trial for the amount of $100,000. Ms. Powhida countered with an offer of $15,000. On the date of trial, the Blooms demanded $80,000, but were informed that the defense would not offer more than $30,000 to settle the case. The Plaintiffs suggested $50,000, which was rejected by the defense. Although the court recommended that the Plaintiffs reconsider the Defendant’s offer of $30,000 on the second day of the case, the Blooms rejected the offer and reiterated that they would not settle for less than $50,000.
On January 30, the case was submitted to the jury. The jury deliberated for only 35 minutes, then returned a defense verdict on behalf of Ms. Powhida and against the Blooms, whereupon the Court entered a judgment for the defense. The Blooms have since filed a motion for judgment notwithstanding the verdict and seeking a new trial, which remains pending before the Court.
Shareholder Nicholas Cron has completed his term as Chairman of the Board of the Toledo Regional Chamber of Commerce. On January 31, 2013, Nick participated in the Chamber’s Annual Meeting, featuring a sold-out crowd of Toledo business leaders. During the meeting, Nick spoke to attendees about his time as Chairman, the Chamber’s accomplishments during his sixteen-month tenure, and the challenges and opportunities facing Toledo in upcoming years. Nick reflects on his time as the Chairman as a “marvelous opportunity to be involved in a leadership position in the business community of Toledo.”
Filling Nick’s shoes as Chairman is James Weber of Weber-O’Brien, Ltd. Nick remains a member of the Chamber’s Board of Directors.
With Christmas approaching and part of my practice dealing with fraud and theft insurance claims, I jokingly refer to this as theft season. Each year from December through February, there are always a large number of Christmas present claims. By this I mean that people go out and purchase numerous Christmas presents for friends and family with cash, come home and drop them off at the house, head out to dinner and when they return all their gifts have been stolen. Soon to follow is the insurance claim and as part of that claim, a request that they document what was purchased. Rather than be caught in a bind with the response that you can’t document your purchases because they were all bought with cash, here are a few tips on how to better protect yourself should you be the unfortunate victim of such a Christmas theft.
- Keep receipts separate from the gifts. Immediately take the receipts out of the bags and keep them in a separate place. All too often during Christmas present theft claims people state that they purchased an item for cash and the receipt was still in the bag with the presents that were stolen. By simply removing the receipt and keeping it in a safe place, if the gift is stolen, you can at least demonstrate you actually purchased it.
- Have a receipt sent to your email. Increasingly stores are offering the option of having a receipt sent to your email account, a paper receipt or both. By getting both a paper receipt and emailed receipt, you can keep a backup copy electronically.
- Do not pay cash. From a financial advisor’s perspective, I’m sure this is bad advice. From the perspective of documenting your purchases, using a credit or debit card is a great idea because it allows you to demonstrate that a purchase was actually made.
- Swipe your store’s customer reward card. Most stores these days have a rewards card of some type such as Best Buy or Toys R Us. By swiping your card, in addition to whatever rewards you may receive, the store generally keeps a history of your purchases. If necessary you can then request a copy of that record to demonstrate that you actually purchased that item from that store (as well as the date it was purchased and the amount you paid for it.)
- Take a picture of the gifts. Obviously you don’t need to take a picture of the Strawberry Shortcake doll you purchased for your son Mikey for $7.99, but for items that cost a significant amount and can be easily stolen (e.g. iPads, Laptops, etc.), take a quick photo with your phone, with not only the item, but something recognizable from your house (i.e. you holding it).
While hopefully you will never need to file the “Christmas present claim,” in the event you do have a Christmas theft, the suggestions above should help you make sure that little David and Teresa still have the wonderful Christmas you intended.
As 2012 draws to a close, it’s important to conduct some year-end financial housekeeping. Pulling your free credit report could help you avoid some costly financial consequences in the New Year and beyond.
Even though their commercials might be catchy, I don’t recommend any credit reporting websites that require you to pay for a credit report, or enter a credit card number to see your report. The Fair Credit Reporting Act (FCRA) requires that each of the three main credit reporting companies – Experian, Equifax, and TransUnion – provide you with one free report each year. If you haven’t taken advantage of this benefit, now is the time to do so. You can request a free credit report online, at www.annualcreditreport.com or by calling 1-877-322-8228.
Why is it important to check your credit reports? Credit reports have a significant role in your financial well-being. Credit reports are checked when you apply for insurance, employment, renting a home, and submit mortgage applications. Furthermore, checking your credit report frequently is the best way to prevent identity theft.
If your credit report contains an inaccuracy, there is an internal procedure to appeal an error. The first step is to contact the credit reporting company (Experian, Equifax, and TransUnion) in writing, and clearly identify the disputed items on the report. It also helps to include copies of documents that support your position. The credit reporting company is required to investigate the disputed portion of the credit report, usually within 30 days. The credit reporting company is required to inform the consumer about the results of its investigation.
Finally, if the internal appeal process offers the consumer no relief, the FCRA does provide a private right of action for consumers to sue a credit reporting company for willful or negligent failure to comply with the FCRA. If the company is deemed to have failed to comply with the FCRA, it will be liable for actual damages, litigation expenses, and reasonable attorney’s fees.
As families get together during the holidays, a number of issues are typically discussed. One of those issues might be the need for a Family Risk Management Plan. While typical families deal with the type of risk associated with illness, death, incapacity to a key family figure through the use of insurance; other families are addressing the issue of the members of the older generation who continue to work and live much longer, as well as what the plans of the middle generation might be if they do not have the opportunities created by parents or grandparents retiring from the family business.
Additionally, the divisions of family assets, which arise when divorces occur, are also subject to review and planning, similarly to what might occur with the purchase of insurance. In the situation of members of the next generation getting ready to marry, a prenuptial plan that is carefully drafted and discussed, may well present a viable asset to the overall family plan.
The family members need to have a desire to achieve an understanding and commitment in order to develop a Family Risk Management Plan and determine how that plan might be implemented. Doing this may well require annual reviews of the family’s financial assets, as well as the human and inner-personal situations to minimize liability to the entire family. Each family member needs to understand what their role is expected to be. The use of such things as insurance policies, estate planning consisting of wills, trusts, health care powers of attorney, and powers of attorney for financial management of assets, needs to be put into place, along with the participation and deployment of an investment policy which is set to coincide with what the family’s desires and long term goals are. The development of the plan needs to include the members of the family, legal counsel, financial advisors. insurance representatives and someone capable of taking into account the taxes that will affect the family’s financial security.
As the holidays approach and families are getting together, it may well be a time for a discussion as to what multiple generations desire to achieve with the creation of a Family Risk Management Plan.
This year for Christmas, the firm adopted a family through one of the many excellent charitable organizations in the Metropolitan Toledo area. We do so, in part, because Christmas is about giving and there are many less fortunate than ourselves for who gifts are much less obtainable. The vast majority of the entire office has become involved in providing a gift of one sort or another. There is no emphasis on size or amount of giving or for who it is aimed. I did note that the youngest daughter in the family seemed to be the primary recipient. Last week, the gifts were picked up by the organization to be delivered to the family in time for the holidays.
In the December 14th Wall Street Journal, there is an article that the government is presently discussing the possibility of limiting in some manner the tax deductibility of charitable giving. The article suggests that this is causing many to move up their giving to this year to avoid the potential limitations next year. To the vast amount of people, I know giving is not aimed at getting a tax deduction. (I may simply not move in those circles.) Giving is about something personal and demonstrated much more often this time of year. When you see the volunteer ringing the bell, the Old Newsboys out in the street, the food pantries loading up the meals, it offers all of us something personal that we can feel good about.
This year as you get ready for the holidays, consider others less fortunate. Whether it be a simple smile when you are interacting with the clerks in the stores, (or anyone behind the counters) aiding the neighbor as they string the lights outside, or making a contribution to those in need, Christmas is about giving.
Under Ohio law, the doctrine of judicial estoppel can protect insurance companies in breach of contract claims. Judicial estoppel bars a party from assuming inconsistent positions in separate legal proceedings. If a plaintiff previously took a contrary position in a legal proceeding, judicial estoppel may be grounds for a successful motion for summary judgment.
Judicial estoppel applies when a party shows that his opponent: 1) took a contrary position; 2) under oath in a prior proceeding; and 3) the prior position was accepted by the court. Smith v. Dillard Dept. Stores, Inc. (2000), 139 Ohio App.3d 525, 533. Courts apply judicial estoppel in order to preserve the integrity of the judicial system by preventing a party from abusing the judicial process by taking opposite positions on the same issue.
Judicial estoppel is frequently invoked when the prior proceeding is an insured’s bankruptcy filing. In Smith v. Fireman’s Fund Ins. Co., the plaintiffs filed suit against their insurance company when the insurance company failed to honor their claim for contents after a fire loss. The insurance company argued that the insured misrepresented the amount of their inventory, based on the amount of property claimed on a prior bankruptcy filing. The district court held that the failure to list items on the bankruptcy inventory constituted a material omission, and held that judicial estoppel barred the plaintiff’s claim.
In sum, judicial estoppel can effectively dismiss a plaintiff’s breach of contract claim, provided the plaintiff has previously taken a contrary position in another legal proceeding. Judicial estoppel is an effective tool to when defending a breach of contract claim against an insurance company.
If you have any questions regarding the doctrine of judicial estoppel, or the application of judicial estoppel in insurance defense cases, or have any other questions, please feel free to call upon one of our experienced attorneys listed below.
Ohio roads have just gotten safer, especially when it comes to teens and text messaging. The Ohio General Assembly passed a ban on text messaging while driving on June 1, 2012 and the law went into effect on August 31, 2012. The law is harsh on teens that text while driving, but adults do not face the same penalties.
The law, codified as R.C. 4511.204, sets up a two-tiered system for drivers caught writing, sending, or reading a text message while driving. For drivers under the age of 18, texting while operating a motor vehicle would be a primary offense. Thus, the police could pull over a teenage driver for texting, even if the teenager has not violated any other traffic law. For adults, texting while driving will be a secondary offense – meaning that the police could not pull over an adult for texting, unless the driver violated another traffic law. Anyone that violates the new ban will be guilty of a minor misdemeanor, which carries a maximum fine of $150 plus court costs.
The Ohio law does have several exceptions. First, drivers are allowed to use their cell phones to make and receive telephone calls. Drivers can also access their cell phone contacts – for example they can read or select a name from their phone for the purpose of making or receiving a telephone call. A driver can receive and read information that deals with the navigation of their motor vehicle, including safety-related information, emergency alerts, traffic updates, or weather alerts. Furthermore, drivers can use their electronic devices for navigation purposes. Finally, voice operated or hands-free use of cell phone will still be legal.
Text messaging while driving can produce deadly results. Text messaging while driving increases the risk of a collision dramatically. The Federal Motor Carrier Safety Administration (FMCSA) found that text messaging while driving makes it 23 times more likely a crash will result. Furthermore, according to FMCSA research, texting will take a driver’s eyes off the road for an average of 4.6 seconds. At 55 miles per hour, 4.6 seconds is the time it takes to drive the entire length of a football field.
There is considerable discussion concerning the possibilities of a “Tax Armageddon” occurring by the end of this year if Congress does not take action to extend or modify current tax laws. While there are many tax issues that are relevant to all citizens, it is important that our high net worth clients be advised of what will happen to their potential federal estate tax obligation in the future, if they do not take advantage of the opportunity available to them before the end of this year to utilize the credit exemption now available through that period.
Any individual upon their death may be subject to federal estate taxes to the extent their gross estate exceeds the then current credit exemption from estate taxes. The 2012 exemption is $5,120,000 per individual, or $10,240,000 for married individuals. If Congress does not take action before the end of 2012, on January 1st that exemption will be reduced to $1,000,000 per individual, or $2,000,000 for married individuals. In addition, the federal estate tax rates will go from 35% to 55%.
I recently attended the Annual Notre Dame Tax & Estate Planning Institute in which this topic was one of the main topics of discussion. The Institute attracts the top estate planners in the country as speakers. None of the speakers had any reliable prediction as to what Congress will do.
The current thinking is that clients whose estates are likely to exceed $2,000,000 should consider options to utilize the current exemption before it expires. That exemption can be utilized by making gifts. The Gift Tax Law follows the Estate Tax Law and, therefore, the exemption for gift tax is identical to the estate tax credit exemption. Gifts can be made outright or in trust.
A concern is whether the IRS will honor gifts made in 2012 if the credit exemption at the death of an individual is less than the 2012 credit exemption. Among the experts speaking at the Institute, it appears that there are solid arguments based upon the current tax code and regulations that would prohibit the IRS from refusing to recognize gifts made in 2012, and that such gifts will be recognized at a later date. This concern is commonly referred to as “clawback”.
It is particularly important that individuals who are owners of businesses address this issue sooner rather than later because of the need to value their business before making the gift.
In the course of research on other topics, I recently came across case law and statutory law regarding the duty of officers and directors of corporations facing insolvency that is somewhat troublesome. Ohio law appears to be less than clear on the duties owed to the corporation and/or to its creditors to pay or use corporate assets to pay corporate debts. In the case of DeNune v. Consolidated Capital of North America, Inc., 288 Fed. Sup.2nd 844 (N.D. Ohio 2003), Judge Carr stated that “under longstanding Ohio law, the officers and directors of a corporation that is insolvent or is on the brink of insolvency, owe a fiduciary duty to the corporation itself and to its creditors not to waste corporate assets which otherwise could be used to pay corporate debts. See Thomas v. Matthews.”
When the latter case mentioned (Thomas) is explored, there is language dating back to 1916 when the Ohio Supreme Court ruled in Thomas v. Matthews, 94 Ohio St. 32 (Ohio 1916) that the law of the State of Ohio is “that directors must manage the corporate business with a view solely to the common interest, and cannot directly or indirectly derive personal profit or advantage from their position which is not shared by all the shareholders.” (Thomas at p. 43)
The statutory law in the State of Ohio covering the authority of directors is found in §1701.59 of the Ohio Revised Code, wherein paragraph (D) states:
A director shall be liable for damages for any action that the director takes or fails to take as director only if it is proved by clear and convincing evidence in a court of competent jurisdiction that the director’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interest of the corporation…this division does not apply if, and only to the extent that, at the time of the director’s act or omission that it is subject of complaint, the articles or the regulations of the corporation state by specific reference to this division that the provisions of this division do not apply to the corporation.
The statute then goes on in paragraph (F) to state:
For the purposes of this section, a director, in determining what the director reasonably believes to be in the best interest of the corporation, shall consider the interest of the corporation’s shareholders and, in the director’s discretion, may consider any of the following:
1) The interest of the corporation’s employees, suppliers, creditors, and customers;
2) The economy of the state and nation;
3) Community and social considerations;
4) The long term as well as the short term interests of the corporation and its shareholders including the possibility that these interests may be best served by the continued independence of the corporation.
Reading the case law and statutory provisions, it is difficult to conclude anything other than the law is unsettled. There have been a number of decisions where the DeNune has been distinguished on the basis that it did not address §1701.59.
This unsettled law appears to be such that the directors of corporations that are or may become insolvent may well wish to seek separate counsel in order to avail themselves of the protections under §1701.59(C) which states that “a director is entitled to rely upon information, opinions, reports, or statements, including financial statements and other financial data, that are prepared or presented by any of the following:… (2) Counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person’s professional or expert competence.”
I recently went “back to school” at an area college campus. At a college event, I observed the seemingly unrestricted practice of parents consuming alcohol with their underage (but not minor) sons and daughters. When asked if I wanted to “get a beer” for my underage son, I said, “I believe that is illegal!” I was assured it was not and the party continued.
Determined to prove that I was being a good lawyer, and not just a cautious and concerned parent, I went back to the law books to confirm that I was the only parent who actually knew what he/she was talking about. Without passing on the benefits or morality of the subject, I found, once again, that you are never too old to learn.
In Ohio, as in 29 other states, an underage person can consume alcohol on private, non-alcohol-selling premises, such as a private home, a private office, or on private property, as long as a parent is present and the underage person has their consent to consume.
In Ohio, in addition, however, an underage person may consume alcoholic beverages in a public place, where alcohol is sold, as long as the intoxicating liquor is purchased by a parent and given to the underage person while the parent remains present at the time of the underage person’s possession or consumption of the beer or intoxicating liquor, 4301.69(B) O.R.C. It should also be noted that a spouse or legal guardian over the age of 21 is also subject to the application of this law. The law also applies at a hotel, inn, cabin, campground or restaurant pursuant to 4301.69(C) O.R.C.
However, if you (the parent, legal guardian or spouse) knowingly serve alcoholic beverages to a visibly intoxicated underage person, you (the parent, legal guardian or spouse) can be held legally responsible for the actions of or injuries to the underage person 4301.69(F) O.R.C. Basically, you step into the shoes of the “server” of a visibly intoxicated person, just like any other person who serves a visibly intoxicated person at a restaurant or as a social guest in their home.
I also caution parents who take their sons and daughters on “family vacations.” For example, in Florida, a favorite destination for Ohioans, consumption of alcohol by an underage person is strictly prohibited, whether it is in your home or a tiki bar or restaurant. In South Carolina, another favorite destination, the use of alcohol by an underage person is allowed only in the home and for religious purposes.
With alcohol use/abuse occurring with increasing frequency, and access to alcohol readily available to the underage person in college settings, I decided that perhaps a parental prescription for moderation and watching and supervising the consumption was the best tool for teaching one’s underage offspring the dangers of excessive alcohol consumption.
Recent Toledo area newsworthy events involving Clifford Gaston brought to mind the decision in the case of Randle et al v. Allstate Indemnity Company, et al, authored by Judge James Carr of the United States District Court for The Northern District of Ohio, Western Division (opinion and judgment entry of July 30, 2009 case No. 3:08CV1746), where our firm represented the Allstate Insurance company in the defense of a claim where Clifford Gaston was a party Plaintiff. The case is significant in that it reaffirms the longstanding rule of law that under the proper set of facts, courts can rule that a person has committed an act of arson as a matter of law and uphold the insurance carrier’s exclusions for Intentional Acts under the policy.
The pertinent facts as set forth in greater detail in the court’s opinion are as follows: On December 1, 2006, William Gaston sold property at 230 N. Schwamberger, Holland, Ohio, to Co-plaintiff Tara Randle, through Power of Attorney of his son, Cliff Gaston. Randle purchased the home for $200,000. On February 2, 2007, she obtained her Allstate insurance policy. On June 18, 2007, at approximately 11:58 pm, a fire damaged the home. Randle alleges that the damages exceeded $200,000.
Cliff Gaston and Randle were childhood friends. Cliff hired Randle to work as his secretary approximately six months before selling her the Schwamberger property. When Cliff hired Randle, she had been unemployed and living with family and friends for five years. As Cliff’s secretary, Randle worked forty hours per week, and earned $600 weekly.
Randle testified that in March or April, 2007, she began working three twelve-hour shifts at Victorian Manor, which Cliff owned. Despite the additional thirty-six hour a week workload, Randle allegedly continued to receive $600/week for her secretarial services. Randle had no other source of income and had no documentation of her secretarial services.
Cliff applied Randle’s earnings directly to the $10,000 down payment so that Randle could purchase the Schwamberger property. He also applied her earnings, taken from her paycheck for a few weeks, as payments for the property. Randle testified that no records of these payments existed and that Cliff paid her approximately $200 of her earnings with the rest applied to payments for the home.
Randle purchased the Schwamberger property without having it appraised. In 2004, the property sold for $135,000. In 2005, William Gaston purchased it for $145,000. Randle purchased the property for $200,000 in 2006, the sale price having increased forty percent in two years. The house was empty at the time of the June 18th fire, and according to the Spencer Township Fire Department, all the doors to the home were locked and only Randle had a key to the property. There was no evidence of a forced break in.
Allstate conducted a thorough investigation, having hired Mike Sherwood of Johnson, Cambra & Libbert, Inc., a forensic accounting firm, to investigate Randle, and Cliff and William Gaston. The accountants discovered that Randle needed money. She had no job for five years prior to working for Cliff, the house payments in proportion to her income exceeded industry guidelines. Toledo Edison, moreover, had recently cut off power to her home because it had not received payment. Randle was also behind on payment of her water bill.
Allstate denied the claim based upon a number of policy defenses, including “Intentional Act” and “Misrepresentation, Fraud or Concealment,” Plaintiffs Tara Randle, and Clifford and William Gaston brought suit against Allstate alleging Breach of Contract and Bad Faith in the claims handling, Allstate counterclaimed alleging Breach of Contract. The court found; 1) Allstate’s Origin and Cause investigator found that the cause of the fire was incendiary; 2)Randle failed to present any contradictory evidence or alternative theories that raise a genuine issue of material fact with regard to the second element of the arson defense, motive; and; 3) Allstate showed all the doors were locked and secure when the fire department arrived. Randle alone had a key to the property. There were no signs of a break-in. Therefore the third prong of an arson defense, opportunity was satisfied as well.
Therefore, it is not always a jury question as to whether the insurance carrier can prove the defense of Arson. Under the proper set of facts, a court may conclude that arson has been committed as a matter of law.
Choosing an attorney with a reasonable hourly rate is just the first step toward controlling legal costs. Regardless of who you hire as your attorney, and regardless of their hourly billing rate, there are several steps that you can take as a client to keep your legal costs under control.
1. Ask for a Budget Proposal.
You wouldn’t hire a mechanic, roofer, or painter without first getting an estimate. So why would you hire an attorney to handle your important legal matters, without also first asking for a budget proposal? Admittedly, unlike the cost of replacing a radiator, the cost of providing legal services can be difficult to estimate. Nonetheless, a client who receives a ballpark cost estimate will be less likely to suffer from sticker shock, and will be better prepared to make informed decisions about their legal matter.
A good budget proposal should outline each step of the legal process, the anticipated costs, and less expensive alternatives, if available. Just remember, a budget proposal is a good-faith estimate of fees that will be incurred, not a price guarantee.
2. Avoid “Block-Billing”- Ask for an Itemized Statement.
“Block-billing” is the practice of combining an entire day of billing activity into one statement entry, which resembles a “block” of jumbled words. Below is an example of a block-billing entry that was taken from an actual statement one of our clients received from their former law firm.
8/21/11: Received plaintiff’s mandatory settlement conference statement; Received e-mail from attorney regarding depositions; Initial preparation of motions in limine; Detailed review of plaintiff’s mandatory settlement conference statement; Sent e-mail to client attaching same; Edited and further prepared defendant’s mandatory settlement conference statement with exhibit; Sent e-mail to attorney enclosing same; Completed review of day 2 of Plaintiff’s deposition for depositions next week; Prepared list of documents for witness to produce at depositions; Edited same; Office conference with co-counsel regarding designation of experts.
Total Hours: 7.2
Everyone would like to believe that their attorney diligently tracks their billable hours. Generally speaking, most attorneys do. However, if your attorney is less than meticulous about keeping his time, “block billing” will make it nearly impossible to detect a “padded” bill. As you can see, the above “block bill” provides no guidance on the amount of time spent on each of the 11 legal tasks listed. As a client, you can better protect your pocketbook by demanding an itemized billing statement, which details the amount of time spent on each task performed.
3. Ask for Monthly Billing Statements.
Monthly billing statements may not actually lower your overall legal costs, but they will keep you from being blindsided by fees accumulated over the course of several months. In addition, monthly billing statements allow you to monitor the progress of your legal matter, and the amount of attention that it is (or is not) receiving. Finally, monthly billing statements allow you to see whether your legal fees are in line with your budget proposal.
4. Consolidate your Communications.
Whoever said “talk is cheap” obviously never hired an attorney. Communicating with your attorney is vital to your legal matter. That being said, calling your attorney four times a day, and sending them 17 e-mails a week, may lead to unnecessary legal fees. By sending one detailed e-mail, or by scheduling a weekly telephone conference, you can have all of your issues and questions addressed at the same time.
Clients with multiple legal matters may want to request a monthly written status report, summarizing the progress made on each matter. Although status reports and conference calls also cost time and money, they are often more efficient than a flurry of e-mails and telephone calls.
5. Review your Legal Bills.
Although my malpractice insurance carrier would adamantly disagree, all attorneys make mistakes, even on their billing statements. On average, a single attorney makes hundreds of billing entries over the course of a month. Occasionally, some billing items are entered incorrectly. Although most attorneys strive to correct any billing errors before the statements are sent out, clients who make a detailed review of their billing statements will have a better understanding of what they are being billed for, and will be assured that they were not overcharged.
It seems that the impression is that you only contact your attorney when you are in trouble. Everybody knows when you get sued, you contact an attorney; when you buy a house, you contact an attorney; when you need to incorporate a business, you contact your attorney; but people should also use their attorney as a consultant.
The area where an attorney can be a valuable consultant is in the business world. A good business attorney with any type of experience has generally seen or been involved with most issues that businesses encounter. The attorney has dealt with multiple businesses with multiple personalities and multiple owners for multiple years. So it is wise to contact your attorney when a new plan of strategy arises or an area of business that you may want to enter. An attorney can provide the advice on what they have observed in similar situations and how it has progressed from their experience. Our most successful business clients are generally those that meet and consult with our firm on a regular basis.
Another reason to consult with your attorney as a business owner on a regular basis is to avoid costlier problems down the road. Unfortunately, when businesses wait to contact their attorney when they are forced to, such as in a lawsuit (which can be a costly and lengthy process,) these suits could have been avoided if the attorney was contacted early on. Even in the planning stages of a contract or a review of a contract or whether to enter into an agreement could potentially avoid the suit. There is an old saying that “all business is good” but that is not always true. There are some business deals that are bad from the start and should be avoided. By using your attorney as a consultant, you could altogether avoid that pitfall.
When a person buys a house, they use an attorney for their closing. However, they should have contacted their attorney well before the closing. Issues arise during the purchasing of the house. In fact, if there are issues that arise at the closing, generally they could have been handled well ahead of time. Issues can arise such as a mistake on the sales purchase agreement. An attorney can be used as a consultant on the sales purchase agreement but also on the issues that need to occur prior to the actual purchase.
If someone is having financial difficulties and trouble meeting their mortgage obligations, the time to contact an attorney is not when the bank forecloses on the property, but well in advance. Once the bank starts foreclosure proceedings it is very difficult to deal with it. It is much easier to deal with a loan officer up front before the foreclosure. This is when the attorney can help guide you through those legal problems.
So what have we learned? Use your attorney as a consultant. Think of your attorney as part of your business team and include them in the strategy and development of your business. You may be able to avoid a more protracted and costly legal issue if you use your attorney on a regular basis.
If you have any questions, please do not hesitate to contact an attorney at Rohrbachers Cron Manahan Trimble & Zimmerman Co., L.P.A.
An area of the law that I have come to find that most parents are not aware of are the driving restrictions upon minors. The restrictions range from the number of people that a minor may have ride with them to the hours that they are allowed to drive.
Ohio Revised Code §4507.071 lists the restrictions that a minor has upon their license while they are under 18 years of age. The statute clearly points out that if the teen is between 16 and 17 years old, they are not allowed to drive between midnight and 6 A.M. unless they are with a parent or guardian. If they are between 17 and 18, these hours are between 1 A.M. and 5 A.M.
There are a few exceptions. If the teen is carrying documentation from an employer and is leaving their place of employment, the teen may drive between the hours specified above. Two other exceptions are if the teen is driving to or from an official function sponsored by the school that the driver attends or there is an emergency. The final exception is if the teenager is an emancipated minor.
There is also a restriction as to the number of occupants allowed in a vehicle if the teenager is under 17 years of age. They may not have more than one person who is not a family member occupying the vehicle unless a parent, guardian or custodian is present. What this means is if your child is under 17 years old, they may not have any more than one person in the vehicle unless it is a family member. I have witnessed cars with many kids in them leaving my son’s high school and this is a violation that occurs on a regular basis.
Another restriction on a teenager is that they cannot have any more occupants in a vehicle than the number of restraining devices originally installed in the vehicle. Further, each occupant of the vehicle has to wear a restraining device. This would require even backseat passengers, if they are with your minor son or daughter, to wear a seatbelt. This includes even parents or guardians.
With all the restrictions cited herein, a law enforcement officer cannot stop an individual to see if they are violating these restrictions. Your teen has to be committing some other traffic violation for them to be ticketed for the infractions described above.
On May 4th of this year Ohio’s new limited liability company law took effect (ORC 1705.18 and 1705.19). One of the chief reasons for forming a limited liability company (“LLC”) is to provide for separation between the assets and liabilities of the business and the assets and liabilities of the individual owners of the company. What should concern an LLC entity is what a creditor of an individual member can do to force the company to satisfy the debts of a member. Often this results in an otherwise viable business being forced to take on a member’s individual debt or face possible liquidation and other legal action to satisfy that member’s personal debt.
Ohio’s law now specifically provides that a “charging order” is the sole and exclusive remedy of a creditor of a member against that member’s interest in an LLC. What this means is that a creditor only has the right to a member’s share of distributions from the LLC when and if they are declared and made by the LLC. Prior to the change a creditor had other avenues available to it such as seizure, execution, garnishment or foreclosure on the member’s interest. The new law also provides that the creditor is considered an assignee of the member’s interest and takes subject to the operating agreement even though the creditor is not a signatory to the operating agreement. This prevents the creditor from asserting other extra-contractual rights on the grounds that they never personally signed the operating agreement.
These new changes apply to single member LLC as well as a multiple member LLC. Ohio now compares favorably to states such as Delaware, Texas and South Dakota, who also limit a creditor’s rights when it concerns a member’s interest in an LLC. These states have previously been preferred because of favorable statutes, case law and recognition of their asset protection trusts. Ohio has taken a big step towards becoming the state to consider when clients are trying to decide in which state they should form their LLC. This is especially true if the business is to operate in Ohio.
The Supreme Court of Ohio recently looked at an issue involving a violation of a specific safety requirement indicating that when “equipment to be worked on” has not been isolated from all possible sources of electricity or is not properly grounded, “Claimant’s failure to request required safety equipment is no defense to failure to provide it.” State ex rel. Glunt Industries, Inc. v. Indus. Comm., Slip Opinion No. 2012 – Ohio – 2125.
The case involved a power failure at a plant with an electrician being directed to investigate the outage. The employee was not wearing any safety equipment when he took the cover off the main breaker cabinet. That cabinet housed two separate breakers; on one side was a breaker with 440/480 volts and on the other side was a breaker with 4160 volts. The employee was not supposed to open the side with the higher voltage, and was injured when the panel blew up. Exactly how the explosion occurred does not appear to be addressed in the opinion. The employer argued that since the main breaker was not to be worked on and the employee was negligent in accessing the main breaker, the employer could not be liable for his injuries. It also argued that it would have provided safety equipment if it had been asked for by the employee. The Supreme Court ruled in favor of the employee, indicating that the main breaker cabinet was “equipment to be worked on” and the employer had failed to supply “protective equipment approved for the voltage involved.”
My own interest in the case lies in part in the fact that my son is an electrical engineer who has conducted arch flash studies in a number of older plants. The Glunt Industries incident occurred in 2006 and some of the standards since then may have changed. Shutting down the power upstream of the equipment would be required along with a log-out tag-out procedure before any work could be performed on the equipment. Wearing safety equipment was not optional when the engineers were completing their studies. Obviously, arch flashes do occur and are a serious enough issue that entities are spending funds on studying how to eliminate the problem. When dealing with a higher voltage, it is essential that all possible safety procedures be followed so as to preclude the chance that someone unaware of what was housed in a main breaker cabinet would be unlucky enough to open the cabinet. The inclusion of warning labels as to what is behind the panel should also be considered.
Forward by J. Mark Trimble
In the latest edition of The Federal Lawyer, I read an article written by Gregory L. Peters regarding Recent Developments in Labor Law. A section of this article dealt with social media policies for employers. This is probably the best short piece regarding social media policies that I have recently read. With Mr. Peters’ permission this section is being reprinted as follows:
Social Media Policies
In January 2012, the NLRB’s acting general counsel issued a report that was intended to provide employers with guidance on what prohibitions can lawfully be placed on an employee’s use of social media. The NLRB’s overall concern about employer’s social media policies revolves around the NLRA’s § 7 and § 8(a)(1). Under these sections, an employer is subject to a charge of unfair labor practice when the employer enforces work rules that “reasonably tend to chill employees in the exercise of their Section 7 rights” – the section that guarantees employees the right to self-organize.
The NLRB report set forth the following parameters:
- Employers may not implement a rule prohibiting employees from “inappropriate postings” or “inappropriate comments” if the policy does not define these terms.
- Employers may not discipline an employee for violating an overly broad rule or policy related to use of social media in the workplace.
- Employers may impose rules forbidding postings that are slanderous or detrimental to the company.
- Employers may impose rules prohibiting postings about the company, co-workers, supervisors, customers, or clients that violate an employer’s non-discrimination and anti-harassment policies.
The report was predicated upon 14 cases that constituted the primary basis for the development and explanation of these parameters. For example, in one such case, an employer terminated an employee in response to her Facebook posting in which she complained about her recent demotion. The NLRB held that the employee’s termination was unlawful under the NLRA, because her posting on Facebook was a protected complaint about the employee’s working conditions. In another case, the employer prohibited employees from identifying their employer on Facebook, unless the identification was done in an “appropriate” manner. Because the employer failed to define the term “appropriate”, the NLRB held this restriction was overly broad, because employees could reasonably conclude that they were restrained from criticizing the employer’s “labor policies, treatment of employees, and terms and conditions of employment.” Conversely, the acting general counsel’s report also cited a case in which the NLRB found an employer’s decision to terminate an employee lawful when the employee used Facebook to voice her own personal anger toward her co-workers. The NLRB reasoned that the employee’s posting was not protected activity under § 7, because her statement was not posted in a forum in which employees shared common concerns, and her posting merely contained “personal rants against coworkers and general profanities about the Employer.”
As a result of this report, at a minimum, employers should review their social media policies to ensure they are not overly broad. Also, prior to disciplining an employee, the employer should analyze whether the social media communication is protected under the NLRA.’
I hope you find this article as useful and interesting as I have in my practice. The following is information about Mr. Peters:
Gregory L. Peters is a shareholder at Seaton, Peters & Revnew P.A. He represents and counsels employers in all aspects of labor and employment law, including union avoidance, unfair labor practices, collective bargaining, arbitration, privacy issues, compliance regulations set forth by OSHA, and employment discrimination.
He can be reached at firstname.lastname@example.org
The Federal Lawyer June 2012 Volume 59
 Office of the General Counsel, Division of Operations Management, Report of the Acting General Counsel Concerning Social Media Cases, available at www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report (Jan. 24, 2012).
As I have gotten older, I have had the good fortune to take a number of vacations with my wife as well as travel on business where we mix in a couple of extra days stay. On a regular basis, I am renting a vehicle to drive during those trips. This year while in a car rental location in southern California, I was asked by the person behind the desk if I wanted to buy their insurance so I wouldn’t have the hassle of dealing with my own carrier in the event of an accident. I thanked the individual and declined his offer.
Later, while making my way through some miserable traffic, I began to think about coverage issues and whether I was or was not covered under my own policy. In the case of trips where there is some business being done but not exclusively the basis for the trip, prudence would dictate that you review your policy prior to leaving to see if it contains language such as, “Non-owned car does not include… rented car while it is used in connection with insured’s employment or business…”. Policies also sometimes require that the person driving be lawfully in possession. In the past, I had not always paid to have my wife listed on the rental contract and my failure to do so might have resulted in our not being covered if she were to drive the rental vehicle.
Some insurance policies clearly limit your policy, so they do not pay until after the coverage on the car pays. In the event of a significant accident, this could result in a dispute between carriers and may leave the insured stuck in the middle. Anyone who travels and rents cars, but does not choose to buy the coverage, should remember to check with their insurance agent regarding what their coverage is on rental cars. If you are traveling on business and your business has specific limited coverage that applies, you may wish to buy the coverage from the rental car company.
So you’ve found yourself involved in a legal matter and you’ve decided to represent yourself. Maybe you’ve just received a copy of a complaint which was filed against you. Maybe you’ve received a letter from an attorney who claims to represent someone against you. Perhaps a neighbor who’s borrowed your tools now refuses to return them and you’d like to be reimbursed for their loss. Regardless of how it happened, you’re facing the prospect of diving headfirst into the legal world. Where do you begin?
Fortunately, there’s an easy answer. If you have decided not to hire an attorney to represent you in your legal issues, the first thing you need to do is research. Research is probably the most critical part of preparing for your case, no matter what the case is actually about. As it turns out, the legal world can be incredibly complex. Even seasoned attorneys spend a huge chunk of time researching the issues and law involved in a case. You can bet that any other attorneys involved in the case, their clients and the judge are spending a significant amount of time researching – if you are not prepared to do the same you run the risk of seriously hurting your chances of winning.
First, you need to identify the issues in the case. Are you being sued because a former business partner thinks that you breached a contract? Did you get pulled over because you were speeding or because you ran a stop sign, or both? What facts do you have to prove to show that the person in the Wal-Mart parking lot was negligent when they backed into your car? Learn what it is that you are trying to prove, or what defenses you have for your conduct before you prepare to make your case. Once you have identified the issues, it’s time to research.
There are several methods by which you could begin researching the issues in your case. You could apply to and enroll at a law school, spend three years and significant amount of money learning the basics of law and practice, and pass a bar exam, at which point you might have an idea how to prepare your case. This is probably not the most cost and time-effective way of going about dealing with a minor legal issue, however. Instead, rely on the rich variety of resources available at your fingertips.
The most accessible resource is obviously the internet. There are many excellent sources of information available, free-of-charge, just a mouse-click away. For example, Cornell University Law School’s Legal Information Institute, found at http://www.law.cornell.edu, provides an enormous amount of information related to the Constitution, federal and state statutes, and information designed to make the law more accessible to non-lawyers. Likewise, companies such as Westlaw (www.westlaw.com) and LexisNexis (www.lexisnexis.com) publish an exhaustive number of court decisions, statutes, and other resources which are used by lawyers on a regular basis. These are excellent places for you to begin your search. Note that some of the best databases such as Westlaw and LexisNexis require a subscription or access to a law library (more on that in a bit). The Legal Information Institute is free.
A word of warning though: while the internet has tremendous value as a means for locating relevant study materials, you should be extremely careful about the reliability of those materials. For example, don’t rely on Wikipedia – while information there can be correct and is frequently a way to gain a general understanding of a subject, it is impossible to gauge how accurate that information is. Always rely on a reputable source.
Another excellent source of legal information is your local law library. Law libraries frequently have large collections of books containing key case law at both the state and national level, and, more importantly, usually have a public subscription to Internet services such as Westlaw and LexisNexis. Thus, a visit to a law library can be an extremely cost effective method of doing your research. Note that not all local law libraries are open to the public. For example, the Toledo Law Association Library’s computers and online services are only available to members. On the other hand, the Wood County Law Library, 25 minutes to the south, is open and available to anyone wishing to use its resources. To locate a law library near you in the state of Ohio, visit http://www.clelaw.lib.oh.us/public/misc/colawlib.html, which contains the address and contact information for county law libraries throughout the state.
Using the types of resources discussed above should give you a head start on understanding the legal issues you face. If you are representing yourself in a legal matter, take the time to familiarize yourself with these sources of information. Winning a legal battle requires that you understand the law you are dealing with – now you know where to start looking. Next time, we’ll discuss the differences between statutes, case law and other types of legal authority in order to help you narrow down your search.
Adam is an associate attorney at Rohrbachers Cron Manahan Trimble & Zimmerman Co., L.P.A. This article is the second in a multi-part series providing practical tips for pro se parties representing themselves in a legal action.
The owners of small or closely-held business enterprises should be cautious when making personal guarantees of payment to their suppliers. That was the lesson in an opinion issued by the Ohio Fifth District Court of Appeals on March 12, 2012 in Countywide Petroleum Co. v. El-Ghazal Gasoline Servs., Inc., 2012-Ohio-1009. In its decision, the Court determined that the doctrine of “promissory estoppel” permitted a supplier of goods to recover damages from a business owner when that owner had personally promised to pay for those goods.
In Countywide, the plaintiff was a wholesale supplier of gasoline. The Defendant was the sole owner of an LLC, “EGS”, which operated a gas station located in Massillon, Ohio. The parties entered into a business relationship, during which EGS submitted credit applications to the Plaintiff in which the Defendant and his wife personally guaranteed EGS’s account.
During an audit of the parties’ accounts, it was determined that the Plaintiff was owed approximately $82,000 for the delivery of gasoline that EGS had not paid for. The Plaintiff asserted that in addition to its contract with EGS, it could recover damages from Defendant personally because he had personally promised to pay the invoices. To support its position, the Plaintiff relied upon an affidavit filed by the Defendant during the trial. In his affidavit, the Defendant argued that a cognovit note entered into between the parties during the course of their business relationship was invalid because it had not been properly completed. However, the Defendant also admitted in the same affidavit that he had originally agreed to “pay each invoice within 30 days” of receiving it. The Plaintiff asserted that it expected the Defendant to be personally responsible for the payment of the invoices, which is why it continued to do business with him.
The Court decided that the principles of the doctrine of promissory estoppel applied to the Defendant’s promise and ruled that he could be held personally liable for the unpaid invoices. Promissory estoppel is a doctrine that attempts to prevent harm to parties which reasonably rely upon another party’s false promises. To establish a claim for promissory estoppel, a Plaintiff must show:
- A promise that is clear and unambiguous in its terms;
- The party to whom the promise is made (the Plaintiff) must rely on that promise;
- The Plaintiff’s reliance must be reasonable and foreseeable by the Defendant; and
- The Plaintiff must be injured by the reliance.
Countywide, 2012-Ohio-1009, ¶ 26. The Court determined that, despite the fact that the Defendant’s business was a limited liability company, because the Defendant had personally promised to pay the invoices, he was personally liable for the Plaintiff’s damages under the promissory estoppel doctrine because his promise was “reasonably relied upon” by the Plaintiff to its detriment. Id, ¶31.
If you are a business owner, the lesson that you need to take away from the Fifth District’s decision in Countywide is that you must be extremely careful when negotiating business arrangements with your suppliers or other parties you enter into contracts with. If, in an effort to get a deal done or to make sure that you continue to receive supplies on a timely basis, you promise that you will personally pay for any shortfalls that your business may run into, you may be forced to fulfill to that promise later even if you otherwise would be protected from liability because of the structure of your business.
The Defendant in Countywide was the owner of a limited liability company, meaning that he had substantial protections from the liabilities and debts of the company that he owned. However, because he admitted that he had personally guaranteed to pay the Plaintiff for any invoices which his company could not pay, the Court required him to live up to that promise because it believed that the Plaintiff had relied upon that promise and was injured as a result. This may lead to some hard decisions; because suppliers and lenders frequently require personal guarantees to work with small businesses, you may not have any other options, but you should at least be aware of the possible consequences to your personal bank account.
The temptation to enter into a deal with the Plaintiff caused the Defendant in Countywide to step beyond the protections offered by his company’s limited liability and led him to make a promise that he ended up regretting. Learn a lesson from the Defendant’s mistake – think carefully before you make a personal guarantee just to get a particular deal done and, if you do make a guarantee, understand the potential consequences of doing so.
Beginning in March of 2012, RCMTZ will be doubling its number of offices when it opens its Columbus, Ohio area office (Dublin, Ohio to be exact). While perhaps not hard to double when going from one office location to two, the expansion signifies RCMTZ’s commitment to better serving its clients. It also underscores the recognition that as technology helps the world get smaller, in turn it makes a client’s potential legal needs expand geographically. Thus by opening our second location in Columbus, RCMTZ will be better suited to do what it has always done – service the entire State of Ohio and Midwest region.
Perhaps even more exciting than the fact we are opening a second office is that I will be moving back to Columbus to be the managing shareholder of the Columbus office. I say back to Columbus because as I tell people, I spent seven years going to school at The Ohio State University. When the response I get is people looking at me strangely wondering if they should be hiring an attorney that went to Ohio State for seven years, I quickly point out that I did manage to graduate twice, with both a business degree and from law school. Beyond simply going to school at Ohio State though, Columbus is also where my fiancée lives, where a large amount of our family and friends are located and where I’ve spent most of my weekends for the past few years. And finally, who could ever forget the electric feeling of Saturday afternoons during football season.
While I will undoubtedly miss things about living in the Toledo area, yet another nice thing about the practice of law is that it can now be done effectively state and even nationwide. Thus, while I will be expanding our office locations and be based primarily out of Columbus, I will continue to spend time in the Toledo office and handle matters in the northern part of Ohio. Likewise, the Columbus office will serve as a base for my partners and associates based in Toledo, to better address the needs of clients in the central and southern portions of the state. Without question having attorneys in both locations at all times will better serve the needs of clients in the most economical way.
While perhaps not directly comparable, as I write this blog I can’t help but think of the timing of the opening of the office and the return of Urban Meyer to Ohio State to coach the Buckeyes. Both of us spent time at Ohio State and are returning to Columbus. Both of us are excited about the upcoming year and opportunities that await. And both of us plan and hope to lead our team to great things in Columbus and across the State of Ohio.
Recently, I had the pleasure of cross-examining three individuals during a jury trial, each of whom I had never met before. No lawyer in their right mind would recommend this practice. However, my client and I made the calculated decision to forego depositions, based upon the potential value of the case, versus the cost of deposing three witnesses. In other words, we decided that the cost of depositions wasn’t worth the increased economic benefit at trial.
In hindsight, my experience of cross-examining complete strangers worked out well. This, in spite of the fact that I blatantly violated one of the “Ten Commandments of Cross-Examination”, as taught by trial advocacy legend, Irving Younger. During law school, I vividly remember watching video lectures in which Younger revealed his “Ten Commandments of Cross-Examination.” In these lectures, Younger led thousands of lawyers and law students through the wilderness of cross-examination, into the promised land of success at trial.
Younger’s stone tablets read as follows:
Thou shalt be brief.
Thou shalt ask short questions, using plain words.
Thou shalt always ask leading questions.
Thou shalt not ask a question to which you do not know the answer.
Thou shalt listen to the witness’ answers.
Thou shalt not quarrel with the witness.
Thou shalt not allow the witness to repeat his direct testimony.
Thou shalt not permit the witness to explain his answers.
Thou shalt not ask the “one question too many.”
Thou shalt save the ultimate point of your cross for summation.
I confess that I violated the fourth commandment on numerous occasions during trial. It was simply not possible to know the answer to a question I did not have the opportunity to ask during depositions. In order to atone for my transgressions, I followed my own personal eleventh commandment, “Thou shalt prepare.” I located every possible bit of information I could obtain on the witnesses. I studied their credentials, certifications, correspondence, reports and websites, along with any other documentation related to the subject matter of our case. By over-preparing for my cross-examinations of strangers, I was able to anticipate most of the answers to my questions, even though I did not “know” exactly what the response would be.
In summary, there is nothing quite like the feeling of meeting an opposing witness for the first time when they are called to testify at trial. It is not a good feeling, and I do not recommend it. However, by following the “Ten Commandments of Cross-examination,” and by exhaustively preparing, you too can reach the promised land of success at trial.
What happens if you are a victim of a crime, either in a parking lot of a mall or your vehicle is broken into at your favorite restaurant? What duties does the business owner have?
Ohio has been somewhat reluctant to extend significant duties upon the business owner. The caselaw in Ohio has been settled since 1995. The Ohio Supreme Court in Simpson v. Big Bear Stores Company (1995) 73 Ohio St. 3d 130 held:
. . a business owner has a duty to warn or protect its business invitees from criminal acts of third parties when the business owner knows or should know that there is a substantial risk of harm to its invitees on the premises in the possession and control of the business owner. This duty does not extend to premises not in the possession and control of the business owner.
In the Big Bear case, an individual was mugged in the parking lot. The court ruled that because Big Bear did not own or control the parking lot it could not be liable for the acts of a third party even though there had been multiple muggings in the area.
A case that really summarizes the duties of a business owner is Caywood v. Ryan’s Family Steakhouse, 2006-Ohio-6005 (Ninth Dist., unreported). In Caywood, the Plaintiff was verbally accosted and attacked in a lobby. After the incident, in the parking lot, the Plaintiff was beaten by the other party. The Court noted that the law in Ohio was established in the Simpson case, supra.
The Caywood court then summarized that a criminal act:
. . . must be foreseeable. The foreseeability of harm in such situations depends upon the knowledge of the business owner and is determined by the totality of the circumstances.
The Caywood court further stated that a business owner is not an insurer of an individual’s safety. In looking at this law, the Court stated that:
Because “somewhat overwhelming” circumstances are required to establish the foreseeability of the harm and, thus, the existence of a duty, courts are reluctant to impose a duty to protect invitees from the criminal acts of third parties when no evidence of prior similar occurrences appears on the record.
What is even more interesting is that even when there have been multiple criminal acts in an area, the courts have been reluctant to impose a duty on the business owner when an individual is a victim of a crime because that specific crime was not foreseeable.
As a practical matter, the courts have been very reluctant to extend much of a duty to protect an individual that is a victim of a crime at a business. So the key is the foreseeability of the individual act. While it is not impossible to hold a business liable for the damages of the crime, in Ohio it is very difficult to win such an award.
The firm is proud to announce its expansion into the Columbus, Ohio area. Todd M. Zimmerman has been named “Managing Shareholder” of the Columbus area office, which opened on March 1, 2012. Todd will also continue to serve clients out of the firm’s Toledo office.
The firm’s Columbus office will offer the same services provided by its Toledo office, with a particular focus on insurance defense, insurance fraud investigation, commercial litigation, small and closely-held business representation, and estate planning and estates administration.
Rohrbachers Cron Manahan Trimble & Zimmerman Co., L.P.A. has been in business for over 60 years, and strives to deliver excellent legal services in a personal, prompt and cost-effective manner. The firm’s attorneys are licensed to practice in Ohio, Michigan, Florida and various federal courts.
The Columbus office is located at 655 Metro Place South, Suite 600, Dublin, Ohio 43017. Inquiries may be directed to either the Columbus office at (614) 726-3080, or the Toledo office, at (419) 248-2600.
Some of the best memories I have as an attorney are not in Federal or Common Pleas Court, but instead in the “People’s Court” …. Small claims court that is. I think the reason for that is that while small claims court provides access to the average person for what is a dispute too small to merit the expense or hassle of a larger court, it also throws open the door for every crazy claim that anyone can write down on paper and is willing to put twenty five bucks down to file. At the end of these cases however, there is usually a lesson or piece of information that may seem obvious to some and not so clear to others. As I revisit some of these cases, hopefully what you thought all along will simply be confirmed or alternatively you’ll learn something, not in front of a bailiff and courtroom full of other people waiting there turn, but instead behind the privacy of your own computer. The first such lesson is that spicy beef-stick may be spicy.
Yes, you read that last sentence correctly, in approximately 2001, Toledo Small Claims Court swung open its doors to what I like to think was the northwest Ohio case of the decade, up until the Tom Noe or Father Robinson trials. I represented a local grocery store that was being sued by an older gentleman because he claimed the spicy beef-stick (it was a homemade store brand) was too spicy. While most plaintiffs would have undoubtedly hired some high-powered product liability attorney, this crafty gentleman chose to go it alone. When given the opportunity to present his case he kept it simple. He had purchased spicy beef-stick expecting it to be spicy, “* * * but not that spicy.” His injuries: His voice had been changed forever ….. oh, and he had back and neck pain, his hair gotten thinner and whiter, his feet and legs hurt, at times his shoulders would bother him, he had ongoing headaches and his elbow started to crack and bleed one day. All this from two bites of spicy beef-stick. Just when I thought his case couldn’t get stronger he pulled out his ace in the hole …. He told the judge that it wasn’t necessary for the judge to believe him because the Plaintiff had kept the rest of the beef-stick in his freezer for the past year and a half and the Judge was welcome to take a bite to see for himself.
Perhaps I should have realized that it was my lucky day when rather than try the beef-stick and have the Judge’s elbow start bleeding, the Judge declined citing that he had no desire to eat beef-stick, let alone beef-stick that had been frozen for a year and a half. The other sign that things were going my way might have been that literally no one could look the Plaintiff in the eyes for fear of laughing hysterically. Finally, I think it helped that on cross-examination the Plaintiff conceded that he had eaten spicier things in his life without the same results. Whether it was the cosmos or application of common sense, I managed to triumph in the case with the Court’s ruling serving as an indelible lesson: When you buy spicy beef-stick, you should expect it to be spicy.
As my practice has progressed to bigger cases involving far larger consequences the lesson to be gained from that case still seems pertinent: When involved in litigation expect the crazy and unexpected and your chances of success improve greatly.
In a recent article from Ohio Lawyer Magazine dated January/February 2012, Steven Voged presented an article on recreational immunity relative to government entities which caused me to consider some of the other activities that such immunity might apply to.
In my efforts I came across some jury instructions which I had written a number of years ago involving a trampoline case. It had been my position at that time that the use of a trampoline as a recreational activity was such an activity that one should be immune from all but reckless or intentional actions. In the case I defended, an individual had asked to use the trampoline then while in the course of using it, sustained an injury. We looked at the case of Marchetti v. Kalish (1990) 53 Ohio St.3d 95, for the proposition that “where individuals engage in recreational or sports activities, they assume the ordinary risks of the activity and cannot recover for any injury unless it can be shown that the other participant’s actions were either “reckless” or “intentional” as defined by Sections 500 and 8A of the Restatement of Tort 2d.” (Marchetti, p. 100.)
In the case of Kelly v. Rosco, (2009) 185 Ohio App.3d 780, a child, while bouncing a trampoline, at a 4th of July party, was injured breaking her leg. The court in that case held that the use of the trampoline constituted the primary assumption of risk, and that certain hazards were known to people who used trampolines, and thus, the Court of Appeals upheld the granting of a summary judgment by the trial court.
From the law in the State of Ohio, it is likely that anyone who uses a trampoline, albeit in the neighbor’s yard, their own yard or somewhere else, they will not be able to collect for injuries they sustain as they have assumed certain risks which are known to arise in the use of a trampoline. While this interpretation of the law does not constitute “recreational immunity” in the truest meaning of the term, it would be wise for the parents of any child or the parent should they be using the trampoline to be aware that they most likely will not be able to collect for injuries they sustain as a result of any mishaps on the trampoline.
While recently reading an article in the ABA Journal about techniques to taking an expert deposition, I began to do what I perhaps do best ….over-think the issue. My focused turned not to expert depositions, but depositions in general and the different styles and techniques I have seen over the years, and what was most effective in different situations.
One approach is the attorney that simply cannot overcome his own personality and thus every deposition is a reflection of his personality. While sometimes effective, often times this can be the least effective because the defending attorney can prepare his client for what to expect. If I know the other attorney always has an aggressive, jerkish style, I can let my client know that’s what should be expected. When the attorney then follows through with the approach I’ve described, the client is not caught off guard, but instead feels assured that what I told him to expect is what’s happening. If the attorney has a weak personality or is usually unprepared or unfocused a client can feel lost when being deposed because their natural thought is that an attorney is prepared and knows where they are going in a deposition. Again forewarning the client to expect this aimless approach makes them feel reassured that the situation is as to be expected.
My conclusion was that the best attorney is not subject to a particular style, but instead can have many styles depending on the person he is deposing and ultimate goal. More important however is that the most effective technique is not always the one that mimics the personality of the deponent, but often times is the opposite of the deponent’s personality.
That brought me to the Grinch and Cindy Lou Who as an illustration of how taking an approach opposite to the deponent’s natural personality can be most effective. If sent out on the task of deposing the Grinch and Cindy Lou Who, one’s gut reaction would be to think that an aggressive, in your face type approach would be best to use for the Grinch. On the flipside, certainly little Cindy Lou would merit a pleasant, friendly environment … sweet as she was. In reality, just the opposite approaches may produce better results. The Grinch certainly is not expecting anyone to be nice to him. Put him in a hostile situation, treat him poorly and disrespect him from the beginning and you’ve simply put him in his own living room. He’s right at home and thus less likely to give you helpful information. Treat him nicely, disarm him and force him to re-evaluate the entire situation and you will catch him off guard. Suddenly you’re not the jerk his attorney told him you were and he’s questioning his attorney while talking to you. After all, Cindy Lou Who’s kindness caught him off guard so much that his heart grew three sizes and he suddenly became a huge fan of Christmas.
On the other side, with a meeker Cindy Lou Who deponent, a more aggressive approach may produce better results. The pleasant approach may make the deponent feel comfortable and thus give only the information he or she wants. Taking the witness out of their comfort zone in this scenario can cause them to be more forthright in their attempt to please you, thereby hoping you will allow them to return to their comfort zone. A caveat is that a sense of decorum is still necessary. If Cindy Lou is simply beat up and bloodied she may retreat into her shell and produce absolutely no information. Thus, the style is aggressive or confrontational, but not simply being a jerk.
Obviously while the approaches with the Grinch and Cindy Lou are only two of many possibilities, they underscore the importance of an attorney’s style being geared toward the desired result and not just a reflection of the attorney’s own personality. They further underscore the importance of having an attorney that thinks through the strategy and approach of a case to maximize effectiveness on your side and minimize the impact of the other side. After all, clients hire attorneys to win their case, not simply show up and be themselves.
As I write this blog the official first day of winter is only one day away and I am celebrating its arrival with having just won a slip and fall case stemming from the winter of 2009. With winter comes the promise that undoubtedly there will be snow and ice and falls. That’s right, fortunately or unfortunately for me, every winter numerous people fall on the snow and ice and then sue a business or someone else for their fall. Luckily, slip and falls on natural accumulations of snow and ice are perhaps one of the most easily won premises liability cases. While I would like to claim its due to the brilliance of defense attorneys (ok, well perhaps in my case), it has more to do with the Ohio Courts consistently recognizing that you cannot impose liability on others to protect an individual from what are natural occurrences in Ohio …. snow and ice.
The general rule in Ohio is that a homeowner or business is not responsible for a patron/visitor’s fall on a natural accumulation of snow or ice. Nor are they responsible for removing the snow thereby creating water left behind that turns to ice (i.e. courts do not want to punish people for making an effort to shovel). Nor is snow or ice unnatural because it accumulates around a man-made structure such as a handicap ramp or curb. I think you begin to get the drift of the arguments made …. all with the underlying reasoning that it is anyone but the injured person’s fault that they fell. Keeping this in mind, over the years I have put together an informal list of points that, while they may seem obvious, apparently escape quite a few people until pointed out during a lawsuit.
If it’s cold outside, what looks like a wet spot may be ice.
If there’s snow or ice outside, it is cold.
If there is snow or ice on the ground, it may be slippery.
If it feels slippery when you put your foot on it, it’s probably slippery – don’t continue to walk over it.
If you can walk around the snow and ice do it …. it really won’t take you that much longer to get into the dollar store and everything will still be a dollar when you get there.
If you’ve just walked around ice, there is a strong possibility that the next wet spot you’re approaching is ice.
Snow is the brother to ice. When you can see snow, you shouldn’t be surprised that it is icy outside.
Your rubber soled shoes are not magic …. you can still slip on ice and snow while wearing them.
Much like rubber soled shoes, salt is not magic …. you can still slip when you see salt in the area.
Just because someone else didn’t slip on the ice doesn’t mean you won’t.
As obvious as these points may seem, if implemented I think about ninety percent of my snow and ice slip and fall cases would have been avoided. Hopefully by letting you in on these “trade secrets” you can enjoy safe and happy holidays and a wonderful new year!
In this day and age when employers are interviewing perspective employees and trying to select the right employee, it is not unusual for a potential employer to obtain a credit report for a prospective employee. This practice though has several pitfalls. To be able to obtain a credit report on a prospective employee, one must inform that person that you are going to obtain the consumer report before requesting it from a credit-reporting agency. Typically, this is at least a 5 to 7 day notice. Further, one should obtain written approval from the applicant to do so.
Now the question arises; what does one do if the applicant has a poor credit report? The employer must notify the applicant of the contents of the credit report before making a decision as to whether to hire or not to hire the applicant. Further, if the credit report has an impact on the employer’s decision not to hire the applicant, the applicant must be informed of this situation. If a non-hire occurs, the applicant must be informed of the name, address and phone number of the credit reporting agency that supplied the credit report. This would allow the applicant to obtain their credit report at no cost. The applicant may want to do so for the purpose of validating/repairing potentially problematic items appearing on said report.
While the use of credit reports may aid an employer with screening prospective employees/applicants, they must use the reports carefully to avoid any liability.
For a more in depth analysis, refer to the Federal Fair Credit Reporting Act, 15 U.S.C. §1681.
We all have our favorite legal show—whether it’s Law and Order, Judge Joe Brown, or my personal favorite, the Three Stooges classic “Disorder in the Court”—and just about everyone knows (or thinks they know) a little about how the legal system works. In some of those shows, the people arguing the cases aren’t lawyers; they’re just regular people arguing their own cases in front of a judge without the help of an attorney. What these people have to do usually isn’t very hard; in fact, you’ve probably even said to yourself, “I could do a better job than he could!” Maybe you’ve even considered representing yourself in a legal issue—after all, who needs a high-priced attorney when you can go it alone?
Let’s be clear, though: watching Judge Judy once a week or having “TiVoed” a few episodes of Boston Legal does not make you qualified to argue your case in front of a judge or jury—the real-life legal system is not like what you see on television. There are many factors to take into consideration before deciding to make the (potentially life-altering) decision to represent oneself in court. In this article and those that follow, I’ll give some tips and point out some potential problems to anyone considering acting as their own lawyer in handling a legal issue.
A person who represents himself or herself in a court of law or another legal capacity is said to be acting pro se (pronounced “pro say”). Pro se is a Latin term—and get used to Latin if you decide to represent yourself, since many of the legal terms still in use today derive from Latin—defined as “for oneself; on one’s own behalf; without a lawyer” (see Black’s Law Dictionary, 8th Ed., p. 1258). People choose to act pro se in legal proceedings for a variety of reasons: they may wish to avoid the expense of hiring an attorney, the issues involved in the case may be simple enough to handle on their own, they may want to control their own case directly, and so on.
There are certainly situations in which it may make sense to act as your own attorney, such as certain legal matters that may be simple enough to handle on your own. In Small Claims courts, for example, the amounts being disputed are frequently fairly small, while hiring an attorney can cost hundreds of dollars per hour! If you’ve been sued for a small amount (a few hundred dollars, for example) it may not make sense to pay an attorney—your costs are going to outweigh any potential benefit. On the other hand, remember that in the legal world there is no such thing as a “one size fits all” approach. For example, if you’re only being sued for a few hundred dollars but losing the case means that you’ll miss a house payment or a credit card payment, choosing to represent yourself when you have other legal options may not be the best idea. Remember that even seemingly simple situations can have far-reaching consequences.
Although I’m a bit biased, being an attorney myself and getting to see the advantages and disadvantages of hiring a lawyer from an up-close perspective, I’m a firm believer that at least in situations where a legal action (such as a lawsuit or criminal charge) is pending or may be filed in the future, it is wise to hire an attorney or at the very least to talk with one to get an opinion on whether legal services are needed.
Don’t EVER make the decision to represent yourself without carefully considering the potential outcome of that decision. If you choose to represent yourself, the odds are that no matter how good your legal position may be (or how good you think it may be), you will be at a serious disadvantage in most situations. Opposing parties who have hired lawyers will have access to trained professionals who understand the complex and challenging court system, who know how to try cases, who understand judges and juries, and who have access to research and resources that you may not even be aware of. Even worse, legal professionals—whether they are opposing attorneys, court personnel, or even judges—will assume that you don’t have an understanding of “the way things work.” They may view you as a burden on their time and energy and anticipate that you will struggle with doing things the “right way,” even if those assumptions are wrong. While you technically have access to an equal playing field when it comes to representing yourself in a court of law, the reality is that the legal system tends to favor parties who hire attorneys. You will need to be prepared to face these hurdles if you are to be successful in representing yourself.
My goal in this article and those that follow is not to provide you with a perfect plan in which you are guaranteed success if you represent yourself—there are no guarantees in the law. Every person’s situation is different, and every legal decision is the result of a lot of different factors; what works for one person might not be effective in another person’s case. So, instead of looking for a foolproof strategy, please use this information as a resource to learn some steps you’ll need to take if you decide to act as your own lawyer.
Remember, no single approach to resolving a legal action is foolproof. While you can’t guarantee success or even a good likelihood of success, you can improve your chances by using common sense and being well prepared. Representing yourself in a legal matter is an intimidating thing to do, so you should only make the decision to do so if you’ve carefully considered your options and are prepared for the results. Consider talking to an attorney to see whether hiring one will even be necessary; many attorneys will offer an initial consultation for this purpose without charging a fee.
Although the articles in this series will be written with those in mind who are actively involved in a legal matter, the concepts they will discuss can be applied to almost any aspect of the law. If you’ve made it this far and you feel that representing yourself is the best course of action, hopefully the rest of the articles in this series can provide some useful guidance.
Finally, and most importantly, remember that no article can provide a substitute for legal advice specifically tailored to your situation from a licensed attorney. Consult a lawyer if you have any questions about the legal issues you are facing.
Adam is an associate attorney at Rohrbachers Cron Manahan Trimble & Zimmerman Co., L.P.A. This article is intended to be the first in a multi-part series providing practical tips for pro se parties representing themselves in a legal action.
Since the recession began in 2008, The City of Toledo has experienced a level of suspected arson fires that are unprecedented in recent memory. The prolonged recession has created a climate where “desperate people are doing desperate things.” Homes are being destroyed, lives are being lost, and the risks of injury to occupants and firefighters are ever present. The summer of 2011 is the second summer in a row that the city has had a significant increase the number of fires labeled “suspicious” by the Toledo Fire Department.
There are a number of reasons why arson fires are set (i.e. domestic issues, revenge, and thrill seeking), however, during these difficult economic times, setting fires for the purpose of procuring insurance benefits is the primary motivation. While arson fires have been set in various areas of Toledo’s central city, the fires are primarily in areas of depressed property valuations.
In order to establish that an individual intentionally set a fire, in ether a civil or criminal case, the prosecution or the insurance company must prove that someone had the opportunity and the means to have set the fire. While not necessary as a matter of law, it is also important that the individual have some motivation to have set the fire. Financial motivation (i.e. the collection of insurance proceeds) is a strong indicator.
In making a determination of whether the individual had the opportunity and the means to set an incendiary fire, an inspection of the scene by a certified fire investigator, following proper guidelines established by the Nation Fire Protection Association (NFPA), is critical in making that determination. As City of Toledo Deputy Fire Chief Phil Cervantes told the Toledo (Ohio) Blade newspaper, “I’m sure there are a lot more out there that are arsons that we can’t determine,” he said. “I just don’t have what I need to definitively say it’s an arson fire. I know it is from experience. I know what I’m looking at or what I’m reading is an arson fire, but if the house fell down or we had to tear it down, we’ve got to list it as ‘undetermined’.
Toledo Firefighters order a structure to be torn down when they believe the structure poses a risk to public safety and/or to the safety of firefighters. This has become a source of frustration for insurance companies who are called; sometimes days after the fact, and must ask an expert to make a determination of the origin and cause of the fire and the security of the dwelling after the fire is extinguished. Often, if the arsonist has properly performed his criminal act, the structure is an inferno by the time firefighters arrive and it is unstable and eventually torn down in the interest of safety. The scene, as a result, is compromised, and often, critical evidence is lost. While both the Toledo Fire Department and the insurance carrier have a stake in determining whether an incendiary fire occurred, many times, efforts to balance the interests of safety against making a determination of the origin and cause of the fire have been unsuccessful. The Toledo Fire Department has erred on the side of safety on every occasion. While public safety is their primary goal, an unintended result is that the suspected arsonist is often unable to be prosecuted or to have his insurance claim properly evaluated because the scene has been destroyed. This situation makes it difficult for an expert to make an origin and cause determination.
Let’s hope that a solution can be found and a balance struck between these two oftentimes competing yet laudable goals.
“Medicaid is the single-largest program in the state budget, with funding across several agencies. The Ohio Department of Job and Family Services has the largest Medicaid line item with recommended GRF (General Revenue Fund) appropriations in FY 2012 of $11.8 Billion and $13.2 billion in FY 2013.” (Overview of Governor Kasich’s Budget/Budget Summary Book/FY 2012-2013 Biennium)
As Medicaid is such a large part of Ohio’s budget it should be no surprise that, to the extent possible, the Attorney General of Ohio (AGO) is charged with obtaining repayment of Medicaid benefits once a Medicaid recipient has died. All assets owned by a Medicaid recipient, at the time of their death, whether real property or personal property, are subject to collection. This includes but is not limited to property that passes through probate.
The executor/fiduciary of the estate of a Medicaid recipient is responsible to notify the AGO of the death of the recipient, at which point the AGO will present a claim. If the fiduciary does not notify the AGO then the time for presenting a claim (statute of limitations) does not run out. If funds are distributed prior to informing the AGO or before the AGO finds out about the property, the heirs or family members may be ordered to repay the State. Over the years many offspring of Medicaid recipients have expressed disappointment that the State has any claim to assets of their deceased parents; those same individuals typically did not have a problem utilizing the Medicaid program to take care of their parents while they were alive. The law requires, and the other citizens of the State of Ohio need, the family members or heirs to repay those assets deceased recipients had in order for Medicaid to continue to be viable in Ohio.
If you have a question as to whether a decedent was receiving benefits under the Medicaid Program the Medicaid Estate Recovery Unit of the AGO is located at 150 E. Gay Street, 21st Floor, Columbus, Ohio 43215-3130 or contact me and I will contact the AAG in charge of the program to make the inquiry. It will often take a couple of months for all of the charges to be posted by ODJFS.
H.B. 22 – Animal Liability – (effective September 23, 2011):
The act requires the owner or keeper of horses, mules, cattle, bison, sheep, goats, swine, llamas, alpacas, or geese to have acted negligently in order to be liable in damages caused by the animal in specified public thoroughfares, on unenclosed land, or on another’s premises. It essentially repealed the liability for an owner to be responsible for certain animals by them merely being out of their enclosure. It also prohibits an owner from simply letting his animals to run at large on a public thoroughfare or unenclosed land.
H.B. 54 – Gun Rights – (effective September 30, 2011):
Permits people with certain prior offenses (stated as “disabilities” in the legislation) to apply for relief from that “disability” thereby permitting them to own or possess a firearm.
S.B. 17 – Gun Rights – (effective September 30, 2011):
1. Expands the types of liquor permit premises in which a concealed carry license holder may legally possess a firearm to include those with a class D permit (carry outs, restaurants, nightclubs, clubs, hotels, shopping malls, museums etc.). This exception applies only if the license holder is not consuming beer or liquor or under the influence of alcohol or a drug of abuse while in such an establishment.
2. Allows a concealed carry license holder to transport or have a loaded handgun in a motor vehicle regardless of whether it is secured in a holster, case, bag, or box. In turn it removes the prohibition of a license holder from removing such a gun from its secured area or touching it while the vehicle is being operated on a street, highway or public property.
3. Authorizes the expungement for a prior conviction of something that would no longer be a crime under the act.
RECENT DECISIONS/JUDICIAL DEVELOPMENTS:
UNITED STATES COURT OF APPEALS – ELEVENTH CIRCUIT
State of Florida et al. v. U.S. Dept. of Health and Human Services et al., Case No: 3:10-cv-00091-RV-EMT (August 11, 2011): The Eleventh Circuit Court of Appeals held the mandatory healthcare bill (Patient Protection and Affordable Care Act) was partially unconstitutional to the extent it required the purchase of health insurance. The Court also held the unconstitutional portion was severable from the remainder of the act.
OHIO SUPREME COURT
Dominish v. Nationwide Ins. Co. (August 23, 2011), 2011-Ohio-1818: The Supreme Court upheld the limitation of action clause of a Nationwide policy as enforceable. The case involved tree damage to the home of Mr. Dominish. After investigation, Nationwide twice wrote Mr. Dominish a check for his damages and he in turn wrote void on the check, apparently disputing the sufficiency of the amount. Almost two years after the tree fell, Mr. Dominish sued Nationwide. Nationwide raised the defense that Mr. Dominish had failed to comply with the policy provision stating that no action could be brought against Nationwide unless there was full compliance with the policy provisions and any action must be commenced within one year after the loss or damage. The Court held the clause was not ambiguous and that Nationwide did not waive its right to enforce the clause. Nationwide had neither recognized further liability for the disputed portion of the claim nor held out hope of adjustment to Mr. Dominish.
Ward et al. v. United Foundries Inc., et al.; Gulf Underwriters Ins. Co. (July 6, 2011), 129 Ohio St.3d 292: The Supreme Court held that the stop-gap endorsement to a commercial liability insurance policy for a substantial-certain intentional tort language in a commercial liability insurance policy stating that insurance does not apply to bodily injury resulting from an act that is “determined” to have been committed by an insured with the belief that an injury is substantially certain to occur, does not require a final determination by a fact-finder before the insurer can refuse to defend a claim alleging a substantial-certainty employer intentional tort. Thus, an insurer seemingly does not need to first have a judge or jury make the determination that an underlying injury was caused by a substantially certain tort prior to refusing or withdrawing a defense under the commercial liability policy.
Powers of attorney need to have language in them regarding disability or they will not be effective after the grantor of the power becomes disabled.
Section 1337.09(A) of the Ohio Revised Code states in part,
Whenever a principal designates another as attorney in fact by a power of attorney in writing and the writing contains the words “This power of attorney shall not be affected by disability of the principal,” “this power of attorney shall not be affected by disability of the principal or lapse of time,” or words of similar import, the authority of the attorney in fact is exercisable by the attorney in fact as provided in the written instrument notwithstanding the later disability, incapacity, or adjudged incompetency of the principal…
In a recent matter handled in our office, our review of a power of attorney, prepared (not by our office) out of state, failed to contain the above language. The result requires a guardianship to be established to take care of the principal. Going through the formality of the guardianship is much more expensive and time consuming than having a properly drafted power of attorney. If you have a question contact our office to review the document.
During some recent reading, I came upon an article about additive manufacturing, which is the opposite of traditional manufacturing wherein material is removed during construction by milling, turning, carving, etc. In the additive manufacturing, it has been said that they extract some 26 times less material out of the ground to make the same product. The additive machines typically use a range of laser-based or advanced printing techniques to build up models layer-by-layer and have a number of compelling advantages over traditional manufacturing techniques. (See The Engineer First for Technology and Innovation, www.theengineer.co.uk, May 24, 2010, John Excell and Stewart Nathan.)
The technique that is used builds a solid object from a series of layers, by placing each layer directly upon the previous layer. These types of products can be made out of plastic, metal, stainless steel, and titanium with the printing chamber usually heated slightly below the melting point of the product being made. This allows a range that would be used to heat the product to be melted quickly. (To view a video example, follow this link: http://www.youtube.com/watch?v=ZboxMsSz5Aw.) For metals, preheating eliminates residual stress in processing, which can then in turn result in warping when welding.
A machine operating software cuts the computerized design model of the workplace into slices, with thicknesses being as small as 0.1 millimeter per polymer, and 30 microns in its metal. Machines work at room temperature, again, speeding the process and producing pieces with a rougher service finish than required for further machining, thereby eliminating residual stress.
Interestingly, several of the products that are developed end up being used in the medical device sector, with such things as hip socket replacements, cranial implants, dental crowns, hearing aids, etc. From the legal perspective, the technology creates a wonderful new world regarding warranties and whether an item is suitable for the next use that was never fully intended originally. Ian Stewart and Terry Wohlers, writing in Litigation Management, Summer 2011, noted, “Additive manufacturing may also complicate the ability to prove the existence of a defect under traditional product liability principles. For example, how can one prove the expectations of an “ordinary” consumer when the design can be modified to fit the needs of each consumer individually?”
From a legal perspective it appears that the law will be chasing the engineers using this new form of manufacturing for the next several years as the products evolve at a faster pace than the laws presently enacted.
An Ounce of Prevention ……
I was recently thinking about the examinations under oath that I have taken, from insurance claim filers, on behalf of their insurance companies; and the common issues I have seen arise time after time. As a result, I decided to put into writing a few simple steps that you can take, to save time and consternation, should you suffer the unthinkable; a home fire, theft or tornado loss and need to file an insurance claim. In many of these claims the issue is not whether there was a legitimate fire, theft or tornado, but instead what you, as a claimant, really owned prior to the event. In the insurance industry, this is referred to as your inventory. Taking the following simple steps to document your inventory before a catastrophe will save time and frustration, both in making your insurance claim and in determining if you have the proper amount of insurance to begin with.
1. Make a list of the major items you own – Already, I can imagine your eyes glazing over with boredom, thinking this is a nice idea, but who really does it? Well, the problem I’ve encountered repeatedly is that, once an insured has a claim, they really know very little about even the big things they own. Was that 60” television a Sony, Vizio or store brand? Was it a plasma or LCD? When the television is sitting in front of you every night it seems like it would be impossible to forget the brand, but it happens all the time. To help yourself, spend a quick half hour to an hour going through your house and listing, by room, the major items you own such as appliances, furniture and electronics. To the extent possible list the manufacturer, make or model, the year you purchased it and even an approximate purchase price. As you get something new, simply add it to the list.
2. Take a photo or video of the items you own – As you’ve repeatedly heard, a picture is worth a thousand words. While a list is helpful, a photograph is more helpful in establishing you owned what you claim you owned. With digital cameras these days the storage of multiple photos or video footage is relatively without cost and thus well worth taking more photos or footage. One tip; while a close up photo is helpful in establishing the brand or model number, be sure to take a photo of your item(s) in the room(s) from a distance. This will assist in showing the photos are of your items and in your house.
3. Keep receipts for major purchases – In my experience there are primarily two types of people with insurance claims; those who always keep a receipt for everything and those who never keep a receipt for anything. Somewhere in the middle would be a good place for most people. Make it a habit to keep your receipts for major items and perhaps anything else over a certain amount, such as $50 or $100.
4. Get your valuable/unique items appraised – I am not suggesting you have your television set appraised, as its value is easily determinable. I am saying that if you have something unique; such as art, a collection, antiques or jewelry that could be worth over $1,000, you have it appraised. An appraisal generally costs very little and assists you in a claim in at least two ways: First, it helps establish that you owned a particular item and it assists in establishing a value for that item. While jewelry and art are two types of items that people routinely think of having appraised, take a minute to think of others you may own. Items such as grandpa’s old gun collection or the antique crystal, silverware and china that have been in your family for ninety years may be worth getting a professional opinion on exact item descriptions and values.
5. Store your lists/receipts in a fireproof box or offsite – Perhaps most importantly, once you take the time to document your items, store the list, photos, receipts and appraisals in a place or location that will not be impacted by the possible catastrophe. A list and photos are of little use if they burn in the very fire for which you are now making a claim. Nor is your fireproof box much good if you keep it in your bedroom and a burglar steals it or a tornado carries it five miles away. Thus, the best thing to do would be to scan your items and keep them on a flash drive or in some other form at a location other than your house (a parent or sibling’s home or a safety deposit box). That way, in the unlikely event that you need them, they are still available and your road to normalcy after your claim, will hopefully, be a short one.
Before I go anywhere, I always make sure that I have three things with me: my wallet, my keys, and my cell phone. I suspect that most people share this attachment with their phone. In fact, I suspect that, as you are reading this blog, you have your cell phone within arm’s reach. What you may not be aware of is that if you were to pick up your cell phone right now and make a call, your geographic location would immediately be recorded and stored by your cellular service provider. Although a bit unnerving, this technology called, “cellular locating” can be a valuable tool when investigating suspicious insurance claims.
Most claim reps would agree that, when investigating suspicious claims, it is often important to determine the whereabouts of the insured(s) or key witnesses at the time of the loss. Until recently, investigators usually relied on the statements of the insured when establishing their whereabouts. With today’s technology, the physical location of an insured, or at least their cellular phone, can be scientifically verified using cellular locating.
In a nutshell; “cellular locating” is a technology which measures power levels and antenna patterns used by mobile phones. Because cellular telephones communicate wirelessly with the closest base stations (i.e. cell tower,) it is possible to determine the general location of the cellular user when he or she places or receives a telephone call. In other words, by determining which cell phone tower the phone communicates with, one can determine the geographic location of the phone itself. This technology works, not only with “smart phones,” but with any cellular phone.
The good news is that you don’t have to understand how cellular locating works in order to make use of the technology. Cellular locating records usually consist of a log of telephone calls made, including times and contact numbers, as well as precise GPS coordinates for each phone call. Each coordinate represents the location of the nearest cellular telephone tower to the cellular user. In urban areas, these coordinates are amazingly precise. In rural areas, where cellular towers are sparser, the coordinates may provide a less precise indication of the cell phone user’s location.
Now for the bad news, cellular locating records cannot be obtained without a subpoena or court order, even if an insured is willing to execute an authorization or release. As a result, the use of cellular locating technology is usually reserved for those claims that become lawsuits.
I would be remiss if I didn’t remind you that strict ethical and security measures are required when employing technology to determine the geographic location of an insured’s cell phone. In other words, this technology cannot, and should not be used, or even sought after without a proper court order, and/or subpoena, whether or not your insured consents to the release of this information.
As always, there is at least one exception to the rule that cellular locating must be reserved for post-suit discovery. This exception deals with 911 call centers, almost all of which employ cellular locating technology to determine the general location of a caller. Furthermore, because 911 call logs are a matter of public record, one can easily obtain a computer printout of the GPS coordinates of any person who calls 911.
Last, but not least is one very important piece of information concerning cellular locating records. If at any time you believe that cellular locating records may be useful to your investigation, you must take steps to have these records preserved by the cellular service provider. Although each cellular telephone service provider is different, most cellular locating records will be purged from the service provider’s system within months of the date the calls were made. As a result, when a suspicious loss occurs, and the whereabouts of the insured is in question, one of the first things an investigator should do is send a preservation of records request letter to the cellular phone service provider. This preservation letter should specifically identify the cellular customer, the cellular customer’s telephone number, and the specific date(s) for which cellular locating records will be sought. Please note that text messages and voice mail content are usually retained for no more than 72 hours, while cellular locating information is retained for several months.
As you can imagine, there is much more to this technology than can be crammed into this blog. However, if you have any questions, concerns, or if you require assistance and/or guidance in preserving and/or obtaining cellular locating records, please do not hesitate to contact me directly.
Early planning is key when addressing the issue of an owner(s) successfully exiting a business. In 2003, it was estimated that within 20 years more than 90 million baby boomers will retire and more than $10 trillion will transfer to the next generation. The largest generational transfer of personal wealth in history will occur during this time. Seventy percent (70%) of the 12 million privately owned business will change hands. (MassMutual & Raymond Institute’s American Family Business Survey 2003)
Most of these businesses are short on cash to fund a buyout. Many of these business owners, because they do not have a family member(s) active in the business or a strong management team in place willing to take on the risk, will chose to sell their businesses because it is the only viable alternative available. Many of those will have to sell at a price well below what they anticipated to be the fair market value of their business. Some will find that they will have to operate the business well beyond the age at which they would have preferred to retire. Others will find that simply closing the business and liquidating the assets is the most viable option. These options frequently result in dissatisfaction on the part of the owner(s). They are either unhappy with the net cash realized or the need to work well beyond their desired retirement date; consequently, these issues are often ignored by owners until it is too late for effective planning.
Sometimes, the highest dollar value can be achieved by selling the business to someone already involved in it. This may also be the most risky. For example, if the successor fails to operate successfully, the former owner may find he or she is right back in a business from which they thought they had retired. A spouse of a deceased owner may find that he or she may have to step into a business they know little about when the new owner operator fails to meet payment obligations. It is even more complicated if the new owner is a family member. Achieving this higher dollar value means you are not really out of the risks associated with the business, such as the market generally, dependence on the business skills of the successor and the size of the burden assumed in relation to the businesses ability to meet the obligation.
Many of these issues can be effectively addressed if the parties have in place a buy sell agreement that covers the issues well before the event occurs that may trigger a buyout. An agreement typically addresses value; provides a method of payment and addresses other issues such as divorce, personal bankruptcy, disability, future incompatibility of owners, retirement and death. If the business owners are multiple generations of family members, the agreement can address the various issues among the members of the generations. One of those issues often concerns the rights of the operating generation to reinvest in the business, versus the rights of non-operating family members who are looking for a stream of income from the business. These issues are complex and the right answers change, based on the personal dynamics of the people involved and therefore one size does not fit all. Because of these competing interests, multiple representatives of the various individuals involved may be required. The process may be frustrating and expensive. Discussions will often involve consideration of life insurance, disability insurance, deferred compensation and reasonable payment period and valuation.
However, if done properly, the issues that keep owners up at night can be successfully addressed resulting in a secure retirement from the business.
Thirty years ago, when I started my legal career, my first jury trial resulted in an award of roughly $3,500 for the plaintiff (I represented the defendant). The trial had taken two days and involved the testimony of two physicians. The settlement offer prior to the trial had been in the neighborhood of $5,000, with a demand of $10,000. Recently, one of my cases settled with the agreement of the insurance carrier to pay $1,000. The trial was expected to last two days. The doctor had already been deposed and the net to the Plaintiff would be zero.
Since I began practicing law, the philosophy of risk on many minimal cases has changed. Rather than coming up with a number that represents what the insurance company would have paid in costs to try a case it expected to win and then save something off that, the burden appears to have shifted, so that what is being paid is something needed to cover costs the Plaintiff has incurred or less. The medical bills do not always get covered and many offers are a fraction of the total of those medical bills. We know the Plaintiffs will negotiate down the subrogated medical bills. Plaintiff’s counsel argues to the health insurance carrier that the treatment they told us was related no longer seems to be related.
This change has resulted in the carriers taking the position that they are better equipped to handle the costs and a possible verdict than the Plaintiff is equipped to handle the cost associated with a loss. The insurance world has decided to limit the nuisance settlement to reflect the relative bargaining strength of the parties, and in so doing also reflect the lack of merit in the claim.
As many people know Michigan is a no-fault motor vehicle insurance state. What many people in Ohio do not realize is that their auto insurance policy written in Ohio will comply with the laws of the state of Michigan. This may have some unintended consequences when you have an accident in Michigan with your Ohio insured vehicle. For instance my daughter, while a student in Michigan, was rear ended near campus. She was driving an older vehicle and we had removed the collision and comprehensive coverage from the vehicle. The accident was not her fault and under the laws of Ohio the wrongdoer would have been responsible to repair her car. In Michigan such a claim is turned into your own insurance carrier, who settles it regardless of fault. This results in having no recourse for the repair of the vehicle if you have Ohio “liability only” car insurance.
Any Ohioan, who is going to be spending much time in Michigan, should raise coverage questions with their Ohio insurance agent, to make certain they have protected themselves from risks that are viewed much differently just one state north.
Almost every local newspaper has an online edition. What does this mean to me? In addition to getting a free newspaper every day, it means that some poor individual at the local newspaper types up every news article, before uploading it to the newspaper’s website. The end result is that thousands of news articles, past and present, can be easily searched in a matter of seconds.
What you may not know is that many newspapers print “Daily Logs” of all criminal activity. While some newspapers are more specific than others, my hometown newspaper provides the names and general addresses of the individuals who report property crimes. Your local newspaper may be different. For example, today’s edition of “The Toledo Blade” contains the following report:
Shannon Banks*, 5700 block of Swan Creek, three video game systems, desk-top computers, and five flat-screen televisions.
(*Name has been changed.)
Pretend for a moment that Ms. Banks is a claimant, and has submitted a claim under her homeowners or renters policy. As a SIU claim rep, you would like to know whether Ms. Banks reported any other burglaries or theft offenses in Toledo, within the past five years.
Here is how to answer that question in ten minutes or less.
1. Go to www.toledoblade.com
2. In the search bar, type “Shannon Banks” (Using quotation marks will provide results with “Shannon” followed immediately by “Banks”.)
3. View the list of results;
4. Open all of the “Daily Log” results in separate tabs;
5. Go to the first tab,
6. Since you don’t have the time to search each article for the name in question, use the following search function: push the “Ctrl” key and the “F” key at the same time.
a. A box will appear in the upper right portion of the screen;
b. type “Banks” in the box, and press “Enter”;
c. Push the down arrow, next to the search box, at which time you will be taken directly to the portion of the news article which contains the highlighted name, “Shannon Banks.”
d. Within seconds, you should be able to determine if the reference to the insured is relevant.
7. Go to the next tab, and repeat step 6a-d until you have searched all of the tabs.
A word of warning, 9 out of 10 times, the articles that you view on a newspaper’s website will not be useful. The tenth time however, could make it all worthwhile.
I promise not to bore you with too many “war stories,” but an example of a time when this technique paid off occurred just a few months ago. Specifically, I searched the name of an insured who submitted a burglary claim in December of 2010. After searching the Toledo Blade’s daily logs, I learned that the insured reported another burglary just four months earlier. After learning of the prior burglary, I obtained the Crime Report from the Toledo Police Department.
From the Crime Report I was able to determine that the prior burglary was identical to the loss that I was currently investigating. In fact, the exact same items were reported as being stolen four months earlier. Moreover, attached to the Crime Report was a request of information form submitted by the claimant’s prior insurance carrier. Finally, the Crime Report contained copies of several receipts that were identical to the receipts submitted by the insured in the subsequent claim. In summary, a ten minute search of the local newspaper’s website led to a “smoking gun” Crime Report.
I realize that some of you may be wondering why we did not learn of the prior claim from the ISO Report. Don’t get me wrong, ISO Reports have proven very useful in the past, but I know from experience that they often do not contain prior claims. In the aforementioned scenario, the first claim submitted by the insured was actually paid by a well-known insurer. Yet for reasons unknown, the prior claim was not listed on the ISO Report generated just four months later. As a result, had I not searched the local newspaper’s archives, I would have never known about the prior identical claim.
Mitchell Kapor, the founder of Lotus 1-2-3 was quoted as saying, “Getting information off the Internet is like taking a drink from a fire hydrant.” Ironically, anyone can use the internet to test this claim by simply typing the name “Mitchell Kapor” into Google’s search engine. Within 0.11 seconds of pressing “Enter,” Google will retrieve 592,000 results, all of which contain the name “Mitchell Kapor.”
Undoubtedly, those 592,000 search results contain everything anyone would ever want to know about Kapor. Yet the question remains, how can one find out what you want to know, in a timely fashion. Put another way, how does one take a sip of useful information from a fire hydrant that is spewing mass quantities of information?
The goal of this blog, and my 10 blogs that will follow, is to share with SIU investigators a series of internet research techniques which, when used effectively, will provide useful information regarding a claim and claimant. Most importantly, these techniques can be used to complete a thorough internet investigation in less than one hour. I have personally fine-tuned these techniques, which have allowed me to provide additional relevant information to insurers. With this information, insurers are then able to make more informed decisions about how to handle suspicious claims.
Last year, my oldest son graduated from high school. During the prom and graduation season, I was surprised to learn how much alcohol was being consumed by the 18 year olds. As anybody who knows me is aware, I am not adverse to kicking back and enjoying a few alcoholic beverages. That being said, the amount of alcohol consumption by those high school seniors, was surprising to me not only as a parent, but also as an attorney.
The Ohio law is very clear about these issues. The law (Ohio Revised Code 4301.69) lets everyone know that they cannot buy alcoholic beverages for anyone under the age of 21, unless it is for religious purposes or consumed at home under the supervision of a parent or a spouse age 21 or over. Further, you cannot knowingly allow anyone on your property or in your home to possess or consume alcohol, if they are under age 21, unless it is given to them by their parent or spouse who is at least 21 years old. If you are 21 or over and you purchase alcohol for an underage person and they consume the alcohol then injure or kill someone, you can be held civilly liable under what is known as “the social host theory.” If an underage person you provided alcohol to dies from alcohol poisoning, you could be held legally liable for their death.
There are many articles written and available about “social host” claims for civil liability. But, the bottom line is; if you, as an adult 21 or over, purchase alcohol for a person that is under 21 years old and they injure or kill someone else or they die as a result of consuming alcohol you provided, you can be held civilly liable.
We rarely see articles regarding the criminal aspect of supplying alcohol to a person under the age of 21. But the fact remains; if you violate the Ohio law (R. C. 4301.69) and a person dies from alcohol poisoning or a person that consumed alcohol supplied by you causes a death, whether their own or that of another person, you could be convicted of involuntary manslaughter and sent to prison for supplying that alcohol.
A case that I am currently involved with has that exact scenario; I am representing a young man in a civil lawsuit under “the social host theory.” He, my client, was 21 years old at the time of the incident. Friends of his, who were 18 and 19, contacted him to purchase beer for them to drink at a party. The 19 year old picked up my client, drove him to a carry-out where my client purchased two cases of beer with money given to him by these friends. After the purchase, the 19 year old dropped my client off at his girlfriend’s and took the beer to a party where he and other friends, including the 18 year old mutual friend, proceeded to consume the beer. The 18 and 19 year olds then left the party in a car and drove out into the country. The 18 year old was driving intoxicated with a blood alcohol level of 0.13. He lost control of his car while travelling at an estimated speed of 94 to 101 miles per hour. A fatal accident occurred in which that 18 year old driver was killed. Because my client purchased the beer for these two friends, who then consumed the beer, he was convicted of involuntary manslaughter. He was sentenced to serve 4 years in prison, where he remains today.
Before anyone, whether a parent, older sibling or friend, purchases alcohol for anyone under the age of 21 to consume at a graduation party or prom, I hope that they think twice and be aware that there can be significant and life-altering consequences when a serious mishap occurs.
I suggest that parents take this information to heart and share it with their children who are age 21 or over. Tell them to think long and hard before they decide to be that “cool” older brother, sister or friend to anyone by buying them alcohol. Making the wrong decision in a case like this could have a devastating affect upon the rest of their life and potentially end someone else’s.
When we started our blog, I made a commitment that I wouldn’t simply type words on a page every day to meet some requirement, but instead cover a multitude of topics and attempt to make it interesting. While Ohio has plenty of dull and dreary statutes, perhaps my favorite in the “interesting” category, and one that has spurred three of my favorite cases is R.C. 2305.321 – Immunity from liability based on equine activity.
Even among very seasoned attorneys in the defense field, I find few are aware that in Ohio, you are immune from liability for actions taken by your “equine” when participating in an “equine activity.” Both the definition of equine (horse, mule, donkey, zebra etc.) and equine activity are very broad. The theory being that traditionally these animals served a critical role in farms and farming and we want to keep them around. Thus while there are some inherent dangers to them and their perceived unpredictability, the dangers are obvious and anyone wishing to avoid such hazards need simply avoid equines.
One such case I had involved a man walking through the horse barn at a local county fair. The man alleged that while walking through the barn, my client’s horse lunged forward from its stall and bit the tip of his pinky finger off. While the facts demonstrated it would have been impossible for the horse to have lunged that far given the steel bars on the stall, the Court held that regardless, the owner would be immune from liability because showing horses at a county fair constituted an equine activity. As a result, summary judgment was granted and the case was dismissed. In another such case, an owner was immune from liability when his horse reared up and threw a potential purchaser that was riding the horse off its back, resulting in a broken arm. Again summary judgment was granted in favor of the horse owner.
While one may argue that immunity from potential liability for equines is unfair, the counterargument is a simple one: Avoid putting yourself around equines at equine activities. Unlike dogs, one rarely encounters a rogue horse running lose and chasing the neighborhood children. Thus, R.C. 2305.321 literally provides what many people have sought for a long time – immunity for the family jackass.
A well drafted buy sell agreement is a critical document for a closely held business. It is useful in order to keep ownership within a family or limited group of owners, avoid termination of a Sub-S election or partnership, create a market for an owner’s interest and establish an orderly method for liquidation of an owner’s interest upon death, disability or retirement.
Any business where there is more than one owner should consider the advisability of such an agreement. Unless registered as a publicly traded company there is generally no market for the ownership of an interest within a company whether it is a corporation, partnership or LLC unless the owners themselves create such a market. This should be of particular concern if the owner is a minority owner. A minority owner is one who generally owns less than voting control which in many states is 66 2/3% of the voting power of the company.
Many family businesses employ sons and daughters-in law in the business but are often concerned about other in-laws acquiring an interest who could later pass that interest on to even more distant relation or unknown owners. The agreement should address these issues through restrictions on transfers, mandatory purchases upon divorce or death of the original owner and conversion of an ownership interest to a non-voting interest upon a triggering event.
The agreement can provide a mechanism for the patriarch to sell control to one or more business children, with payment made over a period of time, so as to treat fairly other non-business children. More family business have been destroyed, from my observations of over 30 years in practice, by patriarchs dividing ownership evenly among all children whether involved in the business or not so that no one child has control of business decisions.
The agreement can also provide a mechanism for resolving business disputes. This is especially important if ownership is divided so that no single owner has control. While minority owners have certain protected rights by law (see my January 2, 2011 blog) enforcing those rights can be expensive and can ultimately harm the business of the company if the majority owners have to be constantly looking over their shoulders to gauge the reaction of a well-heeled minority owner prepared to fight.
A buy sell agreement is a document not easily discussed in one article and has permutations that need to be discussed in detail. Therefore, over the coming months I will explore the various common provisions of business buy sell agreements on an individual basis through a series of articles.
In a recent case that I tried, the issue of alcohol became very prevalent. In the State of Ohio, the use of alcohol can now be a strict liability issue. The Ohio Revised Code Section 4511.19 sets forth that nobody shall operate an automobile with a blood alcohol concentration of eight hundredths of one percent or more (.08). If a person is under 21 years of age, the blood alcohol concentration is only two one-hundredths of one percent (.02).
The standard Ohio Jury Instruction 411.25 states:
- A person must not operate a vehicle while: (A)(2) having a concentration of eight hundredths of one percent or more a rate of alcohol in his blood.
- There is a second section that states if there is: evidence introduced of a blood test, that is used to determine the concentration of alcohol in their system that this could be used by the jury to determine the amount of alcohol in a person’s system.
But, the key thing is, if the jury finds that by the greater weight of the evidence that a party was operating a vehicle while under the influence of alcohol or they find by the greater weight of the evidence, that they were operating a vehicle by a concentration greater than 0.08%, then that person is deemed negligent.
This issue was key, as my trial was a disputed liability matter and it was the Plaintiff that had a blood alcohol level of 0.20.
Over the past few months, I have been approached by a number of clients inquiring about the advantages of a revocable living trust. Based on information received at various seminars or perhaps advertising pieces received in the mail, some of these folks have developed the erroneous impression that their estate plan would not be complete without the inclusion of a living trust. Under the right set of circumstances, a living trust may well be the proper estate planning vehicle for the disposition of a client’s assets at death, but there may be other, less costly alternatives for achieving the same result.
Generally speaking, legal fees tend to be greater for an estate plan that includes any kind of trust and the fees will vary, depending on whether there are tax issues to address, the overall complexity of the trust, as well as the attorney’s degree of expertise in estate planning. Other related fees may be incurred in connection with the creation of a trust, including appraisal costs with respect to the assets being transferred, accountant’s fees, and the fees associated with re-titling real estate or other business interests. Once the trust has been created, trustee fees may be incurred, which may vary widely, depending on whether the grantor has delegated responsibility for the ongoing operation of the trust to a family member, friend or corporate trustee.
Notwithstanding the costs associated with the creation and ongoing operation of a trust, there are certain situations where a revocable living trust may serve as the optimal tool for meeting certain client needs during his/her life and for the disposition of client assets at death. During life, clients may rely upon a trust and the trustee to handle day-to-day finances and the management of trust assets where the client is facing physical and/or mental health issues or where the client’s occupation or extensive travel schedule prevent the client from handling his/her own personal affairs. Moreover, privacy issues may predispose clients toward using trusts, since items deposited into trusts not only avoid probate, but also avoid becoming matters of public record. Many times clients in second-marriage situations, where one or both spouses have children from a prior marriage, consider using a trust which, at the client’s death, is managed by an impartial trustee to balance the competing financial interests of the surviving spouse and children from the prior marriage.
These are but a few reasons why a client may be interested in having a revocable living trust; keep in mind, however, if a client’s primary reason for establishing a living trust is to avoid probate, there are many other devices or techniques available.
Having been licensed to practice law in Florida since 1999 and having worked with Ohio residents who own real estate in Florida, usually when administering an estate; I have been amazed at how many Ohio residents own real estate in the state of Florida. Many do so because after a short two hour flight you can be in the tropics. A great break from the harsh Ohio winters. Others want to spend their retirement years in a place that is warm, income tax free and estate tax free. Ohio is one of 17 states that still has an estate tax; and now, real estate is relatively cheap in Florida.
Florida has a unique homestead law. Florida’s homestead law is found in its constitution and was first enacted in 1843. Because it is in the constitution the state legislature can not change it unless by a constitutional amendment which requires a favorable vote of the citizenry of Florida. It affects three different aspects of real estate ownership in Florida.
- Exemption from creditor’s claims
- Restrictions on alienation
- Tax exemptions and benefits
To qualify for the homestead exemption, the real estate must be owned by a natural person who claims the real estate as their primary residence. How you own the property or what type of property ownership is usually not an issue. For example ownership can be in a trust, life estate, leasehold interest, mobile home, condominium, cooperative or boat, but does not apply to any portion of real estate used for a commercial business. Homestead is established by submitting a homestead application (Florida Department of Revenue Form DR-501) to the appropriate Property Appraiser’s office on or before March 1st of the year for which the exemption is sought.
From a local tax perspective a person claiming homestead has the first $50,000 deducted from the assessed value of a primary residence before taxes are assessed.
Creditors, other than the taxing authority for assessed taxes and the lender with a mortgage on the property, can not force the sale of the real estate or lien the property. This applies to qualified homestead property for up to one-half acre of contiguous land in a municipality and 160 acres outside a municipality. Bankruptcy law exemptions and Federal tax liens supersede Florida’s law.
In a like manner, creditors of a decedent can also be forestalled from claiming a decedent’s qualified Homestead, especially if there is a surviving spouse and minor children.
Florida’s favorable homestead laws are certainly one item to consider if you are considering changing your primary residence to Florida.
In December of 2010 a former partner and friend of mine died unexpectedly. He was only 56 years of age at the time, had gotten divorced a couple of years before his death and had not made the necessary plans for the hard times that faced his parents and children in dealing with the last week of his life. The fact that he was an accomplished attorney, estate planner, CPA and college business professor, makes this a lesson that all of us should learn from.
I will not hold myself out as an accomplished elder lawyer or estate planner, I have other partners and associates who possess those skills. While I have written lots of wills and powers of attorney over the years, what life has taught me is that planning should not be put off. Here is a link to blank Ohio health care power of attorney that I believe almost anyone could fill out. You should consult an attorney if you have legal questions about the form or for the preparation of wills and trusts, which I believe laymen should not attempt. In tribute to my friend and former partner please feel free to contact me with your questions and if I can’t answer your questions, I will forward them on to others in my office who can.
Recently the Ohio Supreme Court issued its decision in the case of Kincaid v. Erie Ins. Co., 2010-Ohio-6036. In 2001, Don Kincaid was involved in a motor vehicle accident and was provided a defense under his auto policy with Erie Insurance. That case was settled and dismissed. Apparently following the old adage “No good deed goes unpunished” in 2008, Kincaid filed a class action complaint against his insurer, Erie, alleging that Erie had failed to compensate and reimburse him and all others similarly situated for travel expense, lost wages incurred during the defense of him and other incidental expenses. The only problem was that Kincaid had never requested to be paid by Erie for the expenses.
The Supreme Court held that there was no actual case or controversy because Erie had not refused to pay Kincaid for the expenses that may have been covered by the ‘additional payments’ clause of the policy. The Supreme Court further stated that the Courts cannot render advisory opinions and therefore was without authority to weigh in on whether the expenses would be covered or not.
While the case was decided appropriately and entrenched in the principles of common sense, it hopefully is the reaffirmation of a bigger trend that Ohio has enjoyed in the last few years. No longer is Ohio a state that will bend over backward to figure out how to take money out of the corporate pocket of an insurance company only to give it to an insured who received what he asked for. In a state that indulges the theory of bad faith, there still remains some obligation on the part of the insured. In Kincaid, the lesson is perhaps even a simpler one, before filing suit, ask and you never know what you might receive.
In starting the New Year, launching our revamped website and refocusing some of our marketing efforts, we at Rohrbachers Cron Manahan Trimble & Zimmerman Co., L.P.A. (“RCMTZ” …. I promise that will be the last time I use the entire firm name) decided to add blogging to the website’s capabilities. With that decision behind us, we soon realized that for blogging to be a successful component of a website, you actually need to blog. So here it is, the first of what I hope will be regular blogging contributions. I thought it perhaps appropriate for those that care to follow my blogs, to give a brief introduction of what you can expect in the weeks and years to come.
As my firm profile says so much more formally than my blog, I am a civil litigator. The bulk of my practice has been in insurance liability defense and coverage, special investigations and insurance fraud, commercial defense and appellate work, though I certainly handle other matters. That said, I believe that a blog should be anything but dull, as dull reading seems to find its way into the field of law without the need to turn to me for your periodic dose. As a result, while I will try and regularly include pertinent entries on recent decisions, trends and developments and pertinent legislation (primarily focusing on litigation), I will also at times share my thoughts on (or links to) the odd and interesting that makes us scratch our heads and laugh. I also have a passion for politics and while not intending to turn my blog space into the everyman’s American Spectator, I am certain that from time to time there will be entries pertaining to the latest developments in political matters. Finally, at times I am certain that I will provide my thoughts on items of interest to most, but having absolutely nothing to do with the law. I mean, isn’t everyone truly wondering why I still to this day think McDonald’s is one of the world’s greatest restaurants?
Finally, if I am anything, it’s willing to have a good discussion or debate. As such, I welcome comments whether kind, harsh, in agreement or diametrically opposed to what I have said. I hope to make this a fun blog site and provide some levity while also passing on something of interest. So here it is … the blog to begin all blogs!
As a business attorney representing closely held business I am often approached by clients who desire to make a key employee, a spouse, family member or an investor an owner. This usually prompts a discussion of their reasons. Typical responses include a belief that if the employee has a stake in the future of the company they will be less likely to quite; will maybe be more willing to stick it out when times are tough; the owner feels a sense loyalty to a key employee or spouse, a desire to reward past performance that has helped to make the company successful, this is a family business, to avoid paying interest on a loan or because it is a requirement of the investor.
The owner usually desires to maintain control which normally includes the ability to sell the business, control compensation and make all the important decisions concerning the business. This results in a discussion concerning what control means. Many owners believe that if they own 51% that they have control. Under Ohio law that is not necessarily true. Corporations normally require a 2/3 vote of the shareholders to approve many transactions unless the articles of incorporation provide a lesser amount but in no event may the vote be less than a majority. ORC 1701.76 (A)(1)(b) (asset sale) ORC 1701.83 (A) (stock sale) ORC 1701.78 (F) (merger) ORC 1701.71(A)(1) (amendment of articles of incorporation) In a limited liability company any action taken by a member that is not in the ordinary course of business requires the unanimous consent of all the members unless there is an operating agreement in place specifying a different ratio. ORC 1705.25 (A)(3).
Another common issue is whether there should be any restrictions on the transfer of ownership. While an owner is usually comfortable with an employee or investor owning stock the same does not follow for maybe their spouse, creditors, children or other heirs. It is for this reason and others that most often such ownership usually result in the implementation of a shareholders agreement, closed corporation agreement or operating agreement. Such agreements usually address a myriad of issues including restrictions on transfer, management control, covenants not to compete, purchase of ownership interest upon death, termination of employment, divorce, bankruptcy and disability.
Owners who are used to total control should also be mindful of the duties and restrictions Ohio courts have placed on majority owners of businesses. In 1989 the Ohio Supreme Court in Crosby v Beam 47 Ohio St. 3rd.105 created a fiduciary duty on the part of the majority owners of a closely held company to their minority owners. The minority has a right to have an equal opportunity to benefit from the business as the majority. On the face of it this only sounds fair. However, when you consider that as long as the owner owns all of the company he had no such duty. He or she is free to sell the business, hire or fire employees within the confines of employment law or simply close the business and open a similar business.
In larger businesses and in particular corporations if the majority or management take actions that advantage themselves or disadvantage the corporation the disadvantaged shareholders may only bring suit on behalf of the corporation to recover damages which if they are successful are paid to the corporation.. The individual shareholders have no independent right of recovery except possibly for attorney fees. This is commonly referred to as derivative shareholders suit. In a closely held corporation minority shareholders have a right to recover personally for any harm they may have suffered at the hands of the majority. Below are examples of issues courts have considered.
Two of three shareholders formed a new company to conduct a similar but unrelated business. Court held it was a question of fact for the jury to decide if they had breached their heightened fiduciary duty to the third shareholder who was not included. Medina v Perumbeti (1994 WL 716539)
An officer and shareholder of a company were not allowed to enter into new business that the minority believed would compete with the business of the company. Morad v Task (1994 WL 78157)
A shareholders employment could not be terminated unless there was a legitimate business reason. Morrison v Gugle (2001) 142 Ohio App. 3rd 244.
Minority shareholders may question the compensation paid to the majority shareholder. Soulas v Troy Donut University, Inc. (1983) 9 Ohio App 3rd 339.
Minority shareholders may force the payment of dividends. Ohio Jurisprudence 3rd Business Relations 721.