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Tuesday, October 4, 2016

Deposition Do’s and Don’t’s -

 

Litigation, or resolving disagreements through a lawsuit, are a growing concern to both business owners and individuals. While there are alternatives to litigation (and should be considered if you have a dispute), the fact is that most significant disputes end up on the path to court.

Matters that are subject of litigation are ultimately decided on facts and the applicable law. The process by which parties uncover those facts is called discovery.  There are many tools in the discovery toolbox.  A deposition (questioning of a party or witness under oath, often referred to as a “dep” or “depo”) is one of the most powerful tools.  

 
At the start of the proceeding, the judge sets a date by which depositions are to be completed.  Attorneys issue subpoenas requiring a party or witness to appear at a certain place on a certain date and time (production of documents or other evidence may also be requested).  A court reporter is present to create a record of the questions and answers.  Some depositions are video recorded.
 
At the deposition, both parties should have their attorneys present.  A witness can have his/her own attorney present if he/she so desires.  Those testifying are placed under oath, and the attorney issuing the subpoena then starts the questioning.  Next, the opposing attorney has a turn to ask follow up questions.  This normally goes back and forth until the attorneys are done.  
 
Depositions aren’t just about questions and answers.  Just as critical as what was said can be how it was said.  Was the person evasive?  Uncomfortable?  Credible?  Nervous?  Sure of the facts?  Would the person damage or help the case if testifying in court?  These issues can be critical when deciding whether to settle a case or proceed further.  If one party’s witnesses are much weaker than those of the opposition, it may make that party much more willing to settle.
 
If you’re going to be deposed, you should keep the following in mind:
 
Tell the truth.  If you knowingly make a false statement while you’re under oath, you may be charged with perjury. In addition, you will lose credibility, and weaken, your case.
 
If you honestly don’t know the answer to a question, say you don’t know.  A deposition isn’t a contest and you won’t lose points by truthfully admitting you don’t know something.
 
Stick to the point and answer the questions as asked.  Needlessly stating information not requested may damage your case.  
 
If you don’t understand a question, ask that it be repeated or re-phrased.  If you feel you need to talk to your attorney before answering, ask to speak to your attorney. After doing so, answer to the best of your ability, in light of your attorney’s advice.  Your attorney may object to a question, but you may have to answer it anyway.  Prior to trial, your attorney may ask the judge not to use the response as evidence, as the question was improper. 

 

Answer the question asked, not the one you wanted to have asked. Listen carefully to the question and wait until the person asking it has completed the question. Too often, people hear what that want to hear, which may not be what was asked. Answering a question that was not asked could put testimony into the record that could damage your case. When in doubt, ask the questioner to clarify his or her question before you try and answer it.

Though depositions can be stressful, they are not to be feared.  They are opportunities for all parties involved in a legal matter to tell their side of the story.  

 

The Law Office of Randall P. Brett represents both plaintiffs and defendants in many different types of lawsuits as well as in arbitrations and mediations. If you have litigation-related questions, need an attorney to represent you, or are considering litigation, give us a call.


Wednesday, September 28, 2016

Protect Your New Business with Preventative Legal Planning -

Most Legal Issues Can Be Resolved Before They Even Arise. Here’s How.

Most people are familiar with the idea of “preventative medicine". But business owners, especially those who are just beginning a business, should also know about "preventative legal strategies".

The term refers to anticipating legal issues and conflicts and working to prevent them, rather than solving them or “winning” them once they occur. Companies can benefit from implementing preventative legal strategies as this approach is often less expensive than litigation, mediation, arbitration, and local, state and federal fines.

By working with an attorney early on in the creation of your new business, you can build a sound foundation for your company while likely saving money down the road. The following steps can serve as a great starting point for sound legal planning:

  1. Establish a relationship with an attorney who can assist you with the legal issues your new business will face early on in the start-up process. When an attorney is familiar with your firm from the onset, he or she can more effectively anticipate and address legal challenges and provide solutions. Also, many business law attorneys will allow for a flat-fee relationship that enables you to address legal issues as they arise without incurring any additional expenses.

  2. Determine what you want, negotiate it and memorialize it in proper legal documents. Businesses encounter disagreements with vendors, landlords, employees, partners and others. To minimize the number of conflicts, it’s important to establish written contracts for all important agreements, arrangements and accommodations.

    A business law attorney can help you identify all key concerns regarding employee compensation and benefits, property usage and maintenance, relationships with suppliers and responsibility and profit sharing with partners. An attorney can ensure that, when a question, disagreement or conflict arises, your interests are written down, clearly stated and legally protected by a mutual agreement with the party in question.

  3. There are many exciting steps in starting a new business venture; selecting the type of legal entity the business will be is rarely one of them. Yet, it’s important to select a business structure early. Corporations offer numerous advantages but also require officers, boards, articles of incorporation and other formalities. Partnerships and sole proprietorships are simpler than most other business structures but open owners to potentially costly liability. Limited liability companies offer a middle ground for many, providing a liability shield and comparative simplicity. A business attorney can help you determine which business structure will work best for you by taking into account tax planning, location and other key considerations.

Even with preventative legal planning, a lawsuit may arise. If it does, it’s important to approach it from a business, not a personal standpoint. This strategy can help you make decisions that are best for your company’s future, keep your focus on the day-to-day needs of your business and avoid unnecessarily disclosing information.

The Law Office of Randall P. Brett can provide legal advice and hands-on assistance during the formation and continued operation of your business.


Tuesday, May 24, 2016

Suing for Injuries Sustained while Playing Sports -


Now that the weather is getting warmer in most parts of the country, "weekend superstars" are getting their sports on again. Like spring showers bringing summer flowers, the increase in physical activity is guaranteed to lead to an increase in injuries.  Whether it is due to a failure to keep in shape over the winter, lack of toning and preparation, or just the body getting one year older, sports medicine doctors and emergency room physicians can count on an increase in patient load once the birds begin to sing and the trees grow new leaves.

Any sports can be dangerous for participants. It does not matter what the sport is, there is always the chance of injury when engaging in physical activity.
Read more . . .


Tuesday, May 3, 2016

Why Are Settlements Confidential? -

Every plaintiff and every defendant in a lawsuit will be faced with the decision of whether to settle before trial and if so, under what terms. Maintaining or fighting a suit is expensive and the pressure to settle is hard to resist. If the parties agree to settle, the attorneys must reduce the agreement to a writing.

The settlement agreement is an enforceable contract that almost always contains a clause that the terms of the settlement will remain confidential, barring the plaintiff and his or her attorneys from publicly discussing the facts of the case or terms of the settlement. In exchange for keeping their “mouths shut”, plaintiffs often benefit by obtaining higher compensation.  In many circumstances, the plaintiffs also have a preference for maintaining their own privacy.

Why do the defendants’ attorneys routinely insist on confidentiality clauses in their settlement agreements? Typically, defendants – and their attorneys – want to prevent evidence, such as witnesses or documents, from being accessible to future plaintiffs. In the grand scheme of things, this makes the defendant less accountable for its conduct.

Arguably, our legal system and the overall population would benefit from an outright rejection of confidential settlement agreements. Yet, most plaintiffs’ lawyers quickly capitulate; a settlement in hand is a sure thing, prevents future expenses necessary to bring a case to trial, and avoids the uncertainty regarding how much a jury might award in damages. Plaintiffs typically agree to maintain secrecy, as well. For example, seriously injured victims and their family members may be struggling financially and emotionally, and have a strong desire to put the matter behind them. It is understandable that they focus on their own needs and recovery, rather than how it may impact future plaintiffs’ or the public’s access to information and evidence.

Some attorneys and ethicists believe that lawyers’ rules of professional conduct provide them with sufficient grounds to reject secrecy clauses. Most states’ ethical rules favor enabling the public to have a realistic understanding of which attorneys have expertise in cases involving certain circumstances or against particular defendants. On the other hand, those same rules of professional conduct also require attorneys to act in the best interests of the client – which often means agreeing to a speedy or generous settlement offer.

Some legal ethicists suggest addressing confidentiality upfront, at the beginning of settlement negotiations. However, this approach may reduce the amount of a future settlement offer, or cause the defendant to take settlement off the table entirely. This risk, too, must be discussed with and agreed to by the client.

Furthermore, in this type of situation, the risk is borne by the plaintiff but the benefits are only realized by the general public, as mentioned above, or the lawyer who later enjoys “bragging rights” when he would otherwise be muzzled. It can be a tough sell, and one fraught with its own ethical implications. In the end, only the client can decide what is best for his or her situation. Some will agree to the risk “for the greater good” while others must do what is best for them and their families.

The message here is that you, whether you are the plaintiff or the defendant in a lawsuit, should discuss the issue of confidentiality BEFORE agreeing to settle the case. Your attorney should explain to you why or why not a confidentiality clause is warranted and what you may gain or lose by not agreeing to confidentiality. Only with this information can you make an informed decision regarding settling your lawsuit.
 


Monday, April 25, 2016

Are You Bound by the Terms of a Real Property Letter of Intent? -

Complex commercial real estate transactions typically involve a back-and-forth negotiation of numerous terms of the agreement, a process which does not occur overnight. Accordingly, parties to a real estate purchase or lease transaction generally first execute a letter of intent (LOI), which documents the parties’ intent to proceed with the negotiation of a full contract. The LOI includes the essential terms of the agreement, such as closing date and purchase price, or lease term and rate. However, detailed terms and conditions are reserved for the final, formal lease agreement or purchase contract.

The LOI, with its brief description of only the most basic, essential terms, is not intended to be a binding contract.  However, if it is not properly drafted, the parties could find themselves locked into a binding LOI. For example, the existence of elements required in an enforceable contract, such as property description, price, closing date and payment terms, without expressly declaring parties’ intent that it be non-binding, could constitute it as a valid contract.

While parties who enter into an LOI generally intend to consummate the transaction, if the LOI is deemed enforceable as a stand-alone contract, both parties may be subject to undesirable consequences. For example, the LOI lacks essential contract terms such as indemnity clauses, warranties, financing arrangements, or any other detailed terms necessary to protect one or both parties. To ensure the LOI serves its intended purpose, it must contain a specific provision that states the LOI is intended to be non-binding until such time a final agreement is executed by the parties.

What if you want parts of the LOI to be binding, regardless of whether the deal is finalized? Perhaps buyers and tenants want an enforceable provision stating that the seller or landlord will not offer to sell or lease the property to others while the parties are in negotiations. A hybrid LOI can be drafted to ensure the negotiations and final terms are kept confidential until a final agreement is executed. Just as with the provisions stating the LOI is intended to be non-binding, the provisions that are intended to be binding must be carefully drafted to ensure they are enforceable and do not pose unintended consequences for other provisions within the document. A hybrid letter of intent can be a very effective tool in facilitating the purchase or lease of commercial real estate, but care must be taken to ensure it is drafted so that it serves its intended purpose.  

The ​Law Office of Randall P. Brett​ can provide you with the advice and counsel you need to enter into a LOI that achieves your objectives while protecting your interests.


Tuesday, October 13, 2015

Legal Mistakes That Cost Entrepreneurs Time, Money and Headaches…

The economy is improving and it is a good time to consider going into business for yourself. However, entrepreneurs must navigate through a maze of legal issues and decisions when launching a new business. At the outset, you may think some seem inconsequential – but, tragically, that would likely be your first of many mistakes. The choices you make today will have lasting effects on the viability and profitability of your new business venture. Below are some of the most common mistakes made by first-time entrepreneurs, and what you can do to avoid making them yourself.

 

Choosing the Wrong Business Structure

The type of business entity you select will affect your liability exposure, income tax obligations and opportunities to raise capital throughout the duration of your venture. Sole proprietorships, C-corporations, S-corporations and limited liability companies (LLC) all have their advantages and drawbacks. Sole proprietorships are simple to start up, but leave your personal assets vulnerable and offer few tax advantages. C-corporations and S-corporations shield your personal assets, and each afford different tax advantages and disadvantages. Additionally, maintaining the protection afforded by the corporate business structure requires a certain amount of record-keeping and forms which must be filed with governmental agencies. LLCs offer you liability protection, but may not be the best choice depending on various factors, including taxes, ownership structure and, in some states, professional licensure. Often, the corporate structure is the most advantageous, but this decision really should be made in consultation with a business or tax attorney.


The “Gentlemen’s Agreement” – A Handshake and Your Word

Your word may be your honor, but a written contract is the only way to be sure all parties share a mutual understanding regarding their obligations. Whether it is your best client, that independent contractor you’ve been courting, or vendors you have known for years, do not assume everything will go according to plan. Putting your agreement in writing not only ensures that everyone’s expectations are clear, it is also valuable evidence in the courtroom, should things not proceed according to plan. Bottom line – get it in writing!

 

Adding Partners Without a Written Agreement

It’s easy to sweep this one aside when you are passionately focused on the work of getting your business off the ground. And those new partners likely share your same passion. However, until a detailed written Partnership Agreement is drafted and signed, you may be unclear about each other’s expectations in the short term, or, if your business is wildly successful, tied up in protracted, long-term litigation, to establish who owns what (Facebook comes to mind). Redirect some of that passion, and benefit from the goodwill it creates, to negotiate a Partnership Agreement early on that covers responsibilities, ownership structure, provisions for transferring ownership, and what happens when there’s a disagreement about the direction of the company.

 

Sharing Ownership 50/50

Establishing equal percentages of ownership in the company sounds like a fair and reasonable arrangement. However, this type of situation makes it difficult to bring on investors, and can bring the company to a standstill if the partners cannot agree on a decision. Instead, issue shares in the company in such a manner that investors can be added later; and make sure those shares are distributed to the founders with at least a 51/49 split, giving the majority shareholder the authority to make executive decisions even if there is a stalemate.

 

Doing It By Yourself

The internet contains a wealth of information on business formation; some good but most bad or inaccurate. In order to save some precious start-up capital, many entrepreneurs rely on pre-printed forms, general information, or "one size fits all" packages they find on-line. However, starting a business without the benefit of sound legal and accounting advice is like trying to do dentistry on yourself. The gain is definitely not worth the pain! A good business attorney, a business insurance expert, and professional accountant can save money in the long run by forming the company correctly, accounting for risk, and working to minimize legal and financial exposure and tax consequences. Many experts in business formation state that a successful business is like a sturdy piece of furniture: a solid idea supported by legs made of a sound business plan, competent legal advice, focused accounting, and realistic insurance coverage.

 

 


Tuesday, July 21, 2015

“We Don’t Get Paid Unless We Win” – What does it REALLY mean?

You've been injured or wrongfully terminated, or the victim of a scam or a breach of contract, and you want to sue. All of your friends tell you that you have a strong case and that any attorney worth his (or her) salt will take your case on a contingency basis - the "we don't get paid unless we win" representation. So you go on the internet, pick up the newspaper or search in the telephone directory (how quaint) to find a lawyer to represent you.

Each day, thousands of advertisements for lawyers can be found in local newspapers, on television stations and even on social networks like Facebook and LinkedIn. Most of these ads explain that the firm doesn’t collect any fees unless they win. Of course, there’s usually a catch with this statement and it centers around what the advertising firm means by “fees” and what other costs you might be expected to pay regardless of whether or not you win your case.

Attorney fees usually involve the time and labor of the attorneys and their staff. These fees do not include the out-of-pocket case costs that are inevitable in any court proceeding. So while you may not be required to pay any attorney fees upfront or at all (unless you win), you usually will be required to pay all related case costs. Case costs are usually expenses charged by third parties for work on your case. These may include court filing fees, expert witness fees, cost of obtaining medical records, court reporter fees, etc. Depending on the scope of your case and the duration of these proceedings, these fees can easily be thousands of dollars.

While some firms will require you to pay case costs as they are incurred, others won’t require upfront payment (especially, if you have a very strong case) and will instead deduct these expenses from the final settlement. Combined with legal fees, these costs may add up to 50% or even more of the settlement. Frequently, attorneys who specialize in litigation, such as personal injury or workers compensation lawyers, have arrangements established with lenders who in return for a promissory note signed by you, will advance the expenses to the attorney.

In selecting an attorney for your litigation matter, it’s important that you take time to understand what expenses, in addition to attorney fees, you will incur. You also need to know if you will be responsible for these costs even if you don't win (generally, you will be responsible) or if the amount won at trial or agreed to in settlement is less than the actual costs of the litigation. Your attorney should be candid with you and if she or he says "don't worry, I always recover expenses for my clients", you should run, not walk, away.


Tuesday, June 30, 2015

Distracted Driving and You - An Accident About to Happen.

Several months ago, I wrote on this site about teens and texting while driving. However, recent reports indicate that it is not just teens that are driving while distracted. Adults are too.

Full disclosure: In June of last year, I was rear-ended by a distracted adult driver, which caused me to learn more about this problem and prompted this piece.

Distracted driving has emerged as a disturbing trend that poses a serious threat not only to preoccupied drivers, but to other motorists on the roadways. Accidents caused by this unsafe practice have seen a major uptick in recent years due to the widespread use of smart phones to text and post to social media platforms, such as Instagram and Twitter, while driving. Although drivers of all ages may be guilty of driving while distracted (see above), studies have found that teenage drivers are especially tempted to use their phone to snap photos or text from the driver's seat.

More than 3,300 fatalities occur each year as a result of distracted driving, according to the Department of Transportation and Distraction.gov, the official US website dedicated to distracted driving. Drivers are twice as likely to crash if they're texting while driving than if they were paying attention.

Car crashes are the leading cause of death among teenagers, with cell phone use being reported in 18 percent of all distraction-related fatalities in America. These scary statistics have led the National Highway Traffic Safety Administration (NHTSA) to create an campaign against distracted driving aimed at young adults.

If you have teenaged children or you just happen to be up on current trends, you'll know that many people use their cell phones to take "selfies", a nickname for self-portraits. It's come to the attention of law enforcement and safety advocates that teens and older drivers are taking selfies and posting to social media while behind the wheel, some of them even use the hashtag #Ihopeidontcrash with their photos. Expressing that fear, even though it's disguised with a supposedly amusing hashtag, shows that these drivers have an inkling as to how dangerous this practice could be.

On average, texting takes your eyes off the road for 4.6 seconds. Distraction.gov says that at 55 mph, 4.6 seconds with your eyes on your cell phone is like driving an entire football field blindfolded.

Distracted driving falls into three main categories:

  • manual: taking your hands off of the wheel
  • visual: taking your eyes on the road
  • or cognitive: not being mentally present while driving.

Distracted driving laws vary by state, but many (including New Jersey, New York, and Pennsylvania) ban drivers from using handheld phones. In addition, most states ban bus drivers and beginner drivers from all cell phone use (handheld and hands-free), and enforce a ban on texting for all drivers.

With the July 4th holiday fast approaching, you and your family are probably taking to the road for vacation or just to get away for the long weekend. Make it a safe trip and avoid distracted driving. After all, I may the driver in front of you.


Monday, June 22, 2015

Confessions of a Litigator - I Like Mediation

I have a confession to make. Even though I litigate on behalf of my clients, and (so I am told) I'm successful at it, I don't like to fight. I would rather resolve my client's problems without resort to litigation if I can do so while still protecting their interests.  In New Jersey, and in many other states, litigants are required to mediate early in the litigation process. And this is a good thing.

Mediation is one form of alternative dispute resolution (ADR) that allows parties to seek a remedy for their conflict without a court trial. Parties work with a mediator, who is a neutral third party. Usually, mediators have received some training in negotiation or their professional background provides that practical experience.

Unlike a judge, a mediator does not decide who wins; rather, a mediator facilitates communication between the parties and helps identify issues and solutions. The goal is for parties to reach an acceptable agreement.

Mediation can be an appealing option because it is less adversarial. This might be important when the relationship between the parties has to continue in the future, such as between a divorcing couple with children or between business partners. The process is also less formal than court proceedings. Mediation often costs less than litigation, which is another benefit.

Mediation generally takes much less time than a traditional lawsuit. Litigation can drag on for years, but mediation can typically be completed within a few months. Court systems are embracing mediation and other forms of ADR in an effort to clear their clogged dockets. There are some programs that are voluntary, but in some jurisdictions, pursuing ADR is a mandatory step before a lawsuit can proceed.

Mediation can be used in a variety of cases, and it is sometimes required by a contract between the parties. Mediators can be found through referrals from courts or bar associations, and there are companies that specifically provide ADR services. Ideally, a mediator will have some training or background in the area of law related to your dispute.

Mediation is often a successful way to reach a settlement. If parties fail to resolve their conflict, information learned during mediation might be protected as confidential under state law. Settlement offers made during mediation are not admissible if mediation fails and the parties proceed to litigation.

Is mediation right for you and your situation? Your attorney is the one to answer that question but as for me, I always present it as an option to my clients.


Monday, June 15, 2015

What’s really covered on your homeowners insurance policy?

 A solid homeowners insurance policy can provide peace of mind about securing one of your most valuable assets. Unfortunately, many homeowners don’t fully grasp what exactly is covered under that policy, and most importantly, what isn’t.

Homeowners insurance policies generally cover your home itself and other physical structures on the property. Your personal belongings also fall under most policies, along with property damage and bodily injury sustained by you or others on your property. You, your spouse and children, and any guests, tenants, or employees in your home can all be covered under this policy, just be sure to check when you purchase the policy.

Sounds like they’ve got you covered, right? Not so fast; there are a number of possible perils that are often not covered under basic homeowners insurance. Knowing what falls into this category can save you a lot of time and trauma if you ever experience one of these situations in the future.

The two main exceptions are earthquake and flood damage. The impacts of these natural disasters would not be covered by your standard policy. Earthquake insurance and coverage for some types of water damage can often be purchased as an addendum, but flood insurance must be purchased on its own as a separate policy.

Further, standard policies don’t cover damages to your building as a result of your failure to perform regular maintenance on your property. Insect, bird, or rodent damage, rust, mold, and any kind of wear and tear on your property is typically not covered. Neither are hidden defects, mechanical breakdowns, or food spoilage in the event of a power outage. Though there is no current concern for this, damage caused by war or nuclear exposure is also not covered.

Some things have minimal coverage built into your standard policy, for which you can purchase additional coverage as an addendum. Valuable property, including firearms, jewelry, silverware, etc., is usually covered by a standard $1,000. Insurance for replacement value of lost or damaged property is usually determined on an itemized basis that takes depreciation into account. You can expand this coverage by paying to remove depreciation from consideration.  Liability coverage can be increased if desired as well.

These should serve as general guidelines for your homeowners insurance, but be sure to consider the details on your specific policy.  It’s important to consider exactly what you have covered in order to determine what additional types of insurance you may want to purchase.

 


Wednesday, February 18, 2015

The Risks of Tenancy In Common

Historically, tenant in common (TIC) projects were owned by a relatively small group of investors who knew each other, such as long-time friends, business partners or family members. Strategies to maximize tax savings and preserve equity typically guided investors to this type of structure, rather than creating a limited liability company or partnership to own the property.

In the late 1990s, real estate sales in the form of tax-deferred 1031 exchanges created a new industry. Promoters began soliciting and pooling funds from investors to purchase real estate. Participation in the pool helped investors find replacement property to guarantee their capital gains tax deferment continued.

In 2002, the IRS clarified when this type of pooling is considered a partnership interest as opposed to a TIC interest, a critical distinction for investors using funds from a 1031 exchange transaction. Following that, investments in TIC interests grew considerably due to the numerous advantages. For those who needed a place to invest their 1031 exchange funds quickly, TIC interests provide a relatively simple way to ensure the funds are spent within 180 days of the sale of the previous property, without the hassle of researching, investigating, negotiating and financing a property in less than six months. TIC investors do not have to burden themselves with the day-to-day management of their investment property. Finally, TIC investors can pool their resources to purchase fractional shares of investment-grade property which would otherwise be out of reach.

With all of its advantages, the TIC interest also carries its share of risks. For example, many TIC promoters charged fees that were excessive, or sold the property to the investors for more than it was worth. If property values decline or purchase loans mature, it may be difficult to refinance, forcing the property into foreclosure and taking the entire investment with it.

Other promoters failed to maintain reserve funds separate for each property. If a promoter filed for bankruptcy and did not properly use the reserve funds, TIC investors were left with no recourse and were forced to cover the reserves out of their own pockets or risk losing their investment.

Further risks are caused by the investors themselves and the nature of their relationship to one another – or lack thereof. Owners of TIC typically do not know each other. Decisions regarding TIC governance often require unanimous agreement by all owners, and just one objection can grind the action to a halt. When owners don’t know each other, or are spread across many states, it can be difficult to communicate and obtain a unanimous agreement.

Despite the risks, TIC interests can still be a good place to park your money – but you must be a cautious, diligent purchaser. Visit the property, seek information from sources other than the promoter, and carefully review the past and projected financial data.
 


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