TLD's General Counsel Blog

Individuals Defaulting On Loans And Accounts-Payable

The downturn of the economy has resulted in both businesses and individuals defaulting in loans or accounts-payable.  Not only have banks been suffering from the repercussions, but also small businesses and individual lenders as well.  Unfortunately, our firm has been consulted by a significant number of clients who have contracts, promissory notes, or invoices with out an attorney's fee provision.  While the economy was booming, and while optimism was high, the terms of contracts were not a focus during negotiations.  Now, however, as borrowers or customers default on those contracts or accounts, the terms become essential as they govern the rights and remedies between the parties.   Without an attorney's fee provision, the party trying to collect must pay for the legal fees involved out of its own pocket and is unable to recover the amounts expended from the debtor.  It is imperative that in any exchange of money, goods, or services, there is a contract in writing with an attorney's fees provision requiring that any attorney's fees or costs expended in any attempts to collect are recoverable.  If you are unsure if your current contracts or invoices contain a sufficient provision, our firm can review your documents for a low fee.  This could save you a significant amount of money in the event that you have to initiate a lawsuit to collect.

Article Submitted By: Attorney Min N. Thai

Notices Of Pendency Of Action

In a recent article in the Los Angeles Lawyer magazine, attorney Jeffrey Huron discusses recent changes to the law regarding "Notices of Pendency of Action" or as is more commonly called a Lis Pendens.

Lis Pendens are not uncommon in family law matters. The purpose of such notice is to advise third parties that there is a claim that affects title or possession of real property. Most often Lis Pendens are used when the person filing and recording the notice is not on title. This could be a spouse who moved into their husband/wife's house owned before marriage, and were never added to title. It might also be situations where one spouse's parents control title. In either situation, the notice encumbers the property precluding a sale or refinance until resolved and removed.

In some cases, these notices have been loosely used as "chips" in the bargaining or negotiating process; particularly early on in a litigation. Changes in the law, however, force parties and their counsel to be careful. Because the recording of such a notice clouds title, an improper Lis Pendens may expose the recording party to damages for slander of title; and possible attorney fees.

A Lis Pendens is valid if the recording party has a "real property claim" against the property in question. A "real property claim" is one which affects title to, or the right to possession of” real property. Kirkeby v. Superior Court of Orange County (2004) 33 Cal.4th 642, 93 P.3d 395.

When facing a property dispute that erupts in the middle of a divorce proceeding, it is best to address your concerns with a Certified Family Law Specialist.

Article Submitted By: Attorney Daniel Gold

What You Don't Know Can And Will Hurt You

Many businesses, small and large, are successful because early attention was paid to properly forming, maintaining and organizing the structure, observing formalities and ensuring legal compliance. Other businesses are successful in spite of themselves. No surprise, it is this latter group that faces the most risk from employment-related claims from its workforce.

Oftentimes, the first an employer becomes aware of an issue is when it has received notice of a complaint from an administrative agency or a lawsuit. Challenged practices include how and when employees are paid, overtime, meal and rest periods, handling of harassment, discrimination and retaliation claims, privacy issues, breach of contract, benefits administration, whistle blowing, termination, workers’ compensation, safety, unemployment, due process and union issues. By then, it is too late. An employer’s business practices will be laid bare for examination by a hearing officer, judge or jury. If that employer did not take the time to scrutinize and test its own business practices before that time, liability is sure to follow.

So then, where to begin? The jumping-off point for any business (new or established) to begin its evaluation is with a formal audit. This can be a daunting task, especially if the enterprise has no pre-established human resource department. HR Network is a human resource outsourcing firm which has worked alongside Tredway, Lumsdaine & Doyle LLP in caring for business clients.  HR Network routinely provides formal audit functions, which are broken down as follows:

HR Compliance Audit

HR Network will come on-site to conduct a comprehensive assessment and audit, reviewing all areas of HR compliance required of employers including: employee file set up, compliance and maintenance; procedures and policies for employee issues; affirmative action plan; safety plan; wage and hour compliance; hiring and termination practices; payroll procedure; required postings and open workers’ compensation claims. After the audit, the business client will receive a full report highlighting areas of concern regarding compliance issues with an analysis and recommendations, as well as a timeline of proposed changes. Costs for this audit range from $1,995.00 for a business with less than 20 employees, to $2,595.00 for 21-49 employees and $3,595.00 for more than 50 employees.

HR Mini Compliance Audit

HR Network will come on-site to conduct a limited assessment and audit, reviewing the 10 most common employment mistakes that employers make and give the business client insight on how to avoid them. In addition, HR NETwork will review the business’ current employee handbook for compliance. The cost for this audit is $295.00.

Once the audit is completed and the recommendations made, the next step is to implement those suggested changes. Rolling out a new pay plan, vacation plan or benefit plan involves more than just having your employees sign a revised Employee Handbook. Among other things, thought must be given to whether the new plan imposes new and different terms and conditions on employment, unfairly affects some employees over others (i.e. discriminates), deprives employees of earned and vested compensation or alters promises made to employees in a written contract.

What you don’t know can hurt you. The benefit of a formal audit is to highlight areas of concern which can then be followed by implementation of lawful policies before those buried and ticking timebombs explode into liability for the business. HR Network can be contacted at (714) 799-1115.

Article Submitted By: Attorney Shannon M. Jenkins

Parent- Child Exclusion - Recent Property Tax Developments

Propositions 58 and 193 are constitutional initiatives that provide property tax relief for property transfers between parents and children and from grandparents to grandchildren. The two propositions have made it easier to keep property “in the family.” Proposition 59 states that real property transfers from parent to child or vice versa may be excluded from reassessment. Proposition 193 broadens the tax relief to include transfers between grandparents to grandchildren.

Most recently, effective January 1, 2008 Assembly Bill 402 (Ch. 450, Stats. 2007) amends section 63.1 to extend the parent-child exclusion to transfers between foster parents and foster children. These provisions apply to transfers that occur on or after this date and are not retroactive. To take advantage of the foster child exclusion, you must provide: 1) a certified copy of the court decision regarding the foster child status of the individual, and 2) a certified statement from the appropriate county agency stating that the foster child was not, because of a legal barrier, adopted by the foster parent. Further, an assessor may request legal substantiation of these two items.

It is important to note that in order to obtain the parent-child exclusions, the claim must be filed within three (3) years after the date of purchase or transfer for which the claim is filed or prior to transfer to a third party, whichever is earlier, or within six (6) months after the mailing of the notice of supplemental assessment. Tredway, Lumsdaine & Doyle has handled property tax appeals and can assist you in securing your property tax exclusion to keep your family home within the family.

Article Submitted By: Attorney Pamela Tahim

Valentine's Day and Office Romance

Today is Valentine's Day, the day to rekindle romance or find new romance.  Most employees may look around at the people they spend the most time with every day: their coworkers.  Employers, beware!  Although inter-office romance may seem harmless and lead to a more inviting and friendly work environment, the legal perils of sexual affairs and supervisor-employee relationships are great.  A 2005 California Supreme Court decision makes it riskier for employers to ignore sexual relationships between supervisors and their subordinates.  See Miller v. Dept. of Corporations.

Cutting off the behavior before it begins, and punishing those employees that fraternize not only lowers a company's legal liability, it also is the best way to keep a "friendly" working environment from turning sour.  Companies should engage counsel to implement an appropriate social code of conduct.  Please contact an employment and labor attorney for additional details. For more information on this subject you can read the article by Chris Hoffman in the Forum section of the Los Angeles Daily Journal titled "Frisky Business", dated Thursday, February 14, 2008 - Page 6.

Los Angeles Daily Journal

Article Submitted By: Attorney Brooke M. Pollard

Corporate Updates

The purpose behind incorporating a business is normally to limit the liability of the owners of the business.  Once an owner transfers the assets of a business to a corporation, he or she becomes a shareholder of the corporation.  California Corporations Code Section 600(b) requires each California corporation have an annual meeting of the shareholders.  The purpose of this meeting is normally to elect the board of directors and any other matters deemed relevant to the shareholders. 

Annual meetings are one way the shareholders of a corporation can protect themselves from personal liability in the event of a lawsuit against the corporation, because the corporation is acting as an entity separate and distinct from the shareholders; thus mitigating any attempts to "pierce the corporate veil."  Tredway, Lumsdaine & Doyle keeps a record of the date of annual meetings of the shareholders for each corporation, sends reminders to have the annual meeting, and will prepare minutes of meetings for execution by the shareholders. 

Be sure to speak with your corporate attorney for advice and guidance in drafting and executing shareholder minutes. 

Article Submitted By: Attorney Brooke M. Pollard