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Tuesday, August 28, 2007

 

Mediation

As an alternative to litigation the process of mediation can help parties in a lawsuit evaluate the issues and come to a settlement. This can be an efficient process to help resolve disputes. The key component of mediation is that if an agreement is reached, the terms of agreement are determined by the parties themselves rather than being imposed by a third party. A neutral mediator assists the parties in reaching a voluntary, negotiated agreement. Mediators use a variety of techniques and/or skills to open and/or improve dialogue between the disputants, with the purpose of reaching an agreement regarding the disputed matter.
By participating in this process, the parties do not agree that they will actually settle the dispute and the mediator does not have the authority to impose such a settlement. The mediation process may be terminated at any time without cause by either party. Another advantage of mediation is confidentiality. With very few exceptions, what is said during mediation cannot legally be revealed outside the mediation proceedings or used later in a court of law. By contrast, one of the drawbacks of going to court is that, by and large, everything said or submitted in connection with a lawsuit becomes available to the public.
The use of mediation has increased as a means to resolving many types of claims and during the past several years this process has become one of the most widely used methods of arriving at a reasonable compromise settlement. This process may be especially beneficial in cases which are expensive and difficult to litigate to a jury verdict. When approached effectively, it ends the claim or litigation without any further costs to the client. If it fails, the parties proceed through the regular procedures of litigation and jury trial without any penalties.

 

Keeping Old Law Suits From Haunting Your Future - Part I

Being sued can be an unsettling and frightening experience. However, it you are not careful, it can be a haunting one, even when you win. That is because court records about the lawsuit are available to the public - and in many cases over the internet.
A search of court records, which is an increasingly common part of background checks for jobs or housing, can reveal details of a lawsuit that are embarrassing or unfairly prejudicial. California law provides some protections from being unfairly prejudiced by a civil suit that was dismissed or without merit, but you often need to be proactive in protecting your good name.
There are different rules for different types of cases and different rules for who is providing the information about you. This three part series will examine :(1) how to seal information from a typical law suit, (2) the special rules that apply to unlawful detainer actions (evictions), and (3) what can and cannot be reported and by whom.
To understand how the records of a dismissed court case can cause haunt you consider the following scenario:
Jane, a software engineer, quit her job when she became uncomfortable with her employer over-billing clients. After she quit, Jane told the client about the over billing. Her former employer was infuriated and filed a lawsuit against Jane that claimed Jane defamed the company, stole company secrets and violated an agreement not to quit and compete against the employer. The court case was dismissed when the judge found the lawsuit was without merit.
Jane, who is now looking for a new job and is one of two finalists for a position with a local high-tech company. The company, which is concerned about protecting its technology secrets, performs a background check that searches surrounding counties for civil and criminal court cases. The company sees that Jane was recently sued by her former employer for stealing trade secrets. The company decides that Jane is not the best fit for the job. While Jane cannot prove it, she suspects that the record of the lawsuit cost her the job.
Jane could have eliminated the risk of being unfairly prejudiced if she was proactive and asked the court to seal the record of the dismissed lawsuit. California Court Rule 2.550 provides the constitutional standard and procedure a court will use when someone requests to seal a court record that would otherwise be public. Because of strong First Amendment support promoting public access to court records, sealing a record is an uphill battle.
California courts will use a balancing test in deciding whether or not to grant a request to seal a record. The court weighs the First Amendment right of public access to court records against any “overriding interests” that support sealing the record to determine if the request should be granted. While the Rules do not define what may qualify as an “overriding interest,” a person’s interest in housing or earning income definitely qualifies.
In the scenario above, Jane could have argued to the court that her “overriding interests” included protecting her ability to obtain a job and earn a living. Her argument would be strengthened because the claims in the dismissed lawsuit are taken very seriously by her prospective employers. The court would seal the record and prevent it from ever being disclosed if it found that the threat of potential harm to Jane’s career prospects outweighed the public’s interest in knowing about the dismissed lawsuit.

 

Keeping Old Law Suits From Haunting Your Future - Part I

Being sued can be an unsettling and frightening experience. However, it you are not careful, it can be a haunting one, even when you win. That is because court records about the lawsuit are available to the public - and in many cases over the internet.
A search of court records, which is an increasingly common part of background checks for jobs or housing, can reveal details of a lawsuit that are embarrassing or unfairly prejudicial. California law provides some protections from being unfairly prejudiced by a civil suit that was dismissed or without merit, but you often need to be proactive in protecting your good name.
There are different rules for different types of cases and different rules for who is providing the information about you. This three part series will examine :(1) how to seal information from a typical law suit, (2) the special rules that apply to unlawful detainer actions (evictions), and (3) what can and cannot be reported and by whom.
To understand how the records of a dismissed court case can cause haunt you consider the following scenario:
Jane, a software engineer, quit her job when she became uncomfortable with her employer over-billing clients. After she quit, Jane told the client about the over billing. Her former employer was infuriated and filed a lawsuit against Jane that claimed Jane defamed the company, stole company secrets and violated an agreement not to quit and compete against the employer. The court case was dismissed when the judge found the lawsuit was without merit.
Jane, who is now looking for a new job and is one of two finalists for a position with a local high-tech company. The company, which is concerned about protecting its technology secrets, performs a background check that searches surrounding counties for civil and criminal court cases. The company sees that Jane was recently sued by her former employer for stealing trade secrets. The company decides that Jane is not the best fit for the job. While Jane cannot prove it, she suspects that the record of the lawsuit cost her the job.
Jane could have eliminated the risk of being unfairly prejudiced if she was proactive and asked the court to seal the record of the dismissed lawsuit. California Court Rule 2.550 provides the constitutional standard and procedure a court will use when someone requests to seal a court record that would otherwise be public. Because of strong First Amendment support promoting public access to court records, sealing a record is an uphill battle.
California courts will use a balancing test in deciding whether or not to grant a request to seal a record. The court weighs the First Amendment right of public access to court records against any “overriding interests” that support sealing the record to determine if the request should be granted. While the Rules do not define what may qualify as an “overriding interest,” a person’s interest in housing or earning income definitely qualifies.
In the scenario above, Jane could have argued to the court that her “overriding interests” included protecting her ability to obtain a job and earn a living. Her argument would be strengthened because the claims in the dismissed lawsuit are taken very seriously by her prospective employers. The court would seal the record and prevent it from ever being disclosed if it found that the threat of potential harm to Jane’s career prospects outweighed the public’s interest in knowing about the dismissed lawsuit.

 

Allocation of Bluesky - Goodwill in an Automobile Dealership Sale

The IRS defines goodwill as “the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor.” IRS Publication 535: Business Expenses, Ch. 9, Cat. No.15065Z.
The American Society of Appraisers defines goodwill as: “that intangible asset arising as a result of name, reputation, customer loyalty, location, products, and similar factors not separately identified.” And as “that intangible asset arising as a result of elements such as name, reputation, customer loyalty, location, products, and related factors not separately identified and quantified.”
Goodwill, however, can be separated into personal and business (enterprise) goodwill. Unlike enterprise goodwill, personal goodwill is the intrinsic value of services of a specific and identifiable person to a business.
The distinction between personal and enterprise goodwill is important insofar as: (a) saving taxes in the sale of businesses; and (b) dividing assets in a marriage.
In divorces, enterprise goodwill is considered marital property and can be divided, while personal goodwill is the sole property of the individual. See: May v. May, 589 S.E.2d 536 (W. Va. 2003) and Ledwith v. Ledwith, 2004 Va. App. LEXIS 488 (October 12, 2004).
When a C Corporation is sold the enterprise goodwill is taxed at the corporate rate (which could be as high as 35%), and then again as a dividend (another 5 – 15%) when it is distributed. Not including any state taxes that may be owed, a $3,000,000 gain could result in only $1,500,000 after-tax dollars to a shareholder.
With some exceptions, sales involving S corporations, partnerships, sole proprietorships or other pass through entities, blue sky gets taxed only once as a capital asset. Note: One can also incur C Corp. tax with an S Corp, if the S Corp. is not at least ten years old and does not have, for example, adequate built in gains. (Visit your accountant for the fine details).
In this article we are interested in car dealership sales and are looking at assigning a portion of the sale proceeds to personal goodwill because, as CPA Carl Woodward notes in the Spring 2006 publication of The AutoCPA Group’s “Headlights”: “For some dealerships, much of the total blue sky value is due to this personal goodwill.”
The concept of separating goodwill with personal and enterprise distinctions first appeared in the 1986 Nebraska case of Taylor v. Taylor 386 N.W.2d 851 and then spread to other states. See: Beasley v. Beasley, 518 A.2d 545 (Pa. Super. Ct. 1986); Hanson v. Hanson, 738 S.W.2d 429, 434 (Mo. 1987); Prahinski v Prahinski, 75 Md App 113, 540 A2d 833 (1988); In Re Marriage of Talty 166 Ill 2d 232, 652 NE2d 330 (1995) and Martin Ice Cream Co v. Commissioner (110 T.C. 189 1998).
In 1998, Norwalk v. Commissioner TC memo 1998-279 held personal goodwill stems from an intangible asset that is the property of the individual, not the corporation, and that personal goodwill could be paid to owners because the employment contracts of the individuals expired when the corporation was sold.
(Some courts suggest a seller enter into a non-competition agreement to protect the value of personal goodwill, however, if the personal goodwill portion of a purchase price was paid for a non-competition agreement, it would create ordinary income rather than capital gain.
Also, while Norwalk held personal goodwill is not transferable without a covenant not to compete, in most states and the Restatement of Contracts non-competition agreements are controlled by, among other things, standards of “reasonableness.” And, in some states, enforceability is questionable. Personal goodwill allocations have ranged between 10% and 90% of the total purchase price. In sale of Tresco Dealerships, Inc., roughly 40% of the goodwill was allocated to the dealer principal as "personal goodwill," resulting in a tax savings of approximately 27 cents on the dollar.
In on case a medical practice had a total appraised value of approximately $600,000, with hard assets of $165,000. The appraiser then allocated $165,000 to the equipment and supplies, $35,000 to corporate goodwill, and $400,000 to the personal goodwill of the doctor.
When structuring asset sales of “C” corporations, buyers are usually agreeable to such allocations because it does not produce adverse tax consequences to them.
The IRS' evaluates personal goodwill in the context of the facts revolving around each sale and the selling corporation’s contracts, articles, minutes, and such. Did the shareholder, for example, have a non-competition agreement with the corporation? Was there an employment contract that gave the corporation the benefit of the shareholder’s personal goodwill? Did the buyer think he was purchasing personal goodwill? Did the seller think he was selling it? (See: Private Letter Ruling 9621002).
This article is limited to discussing “personal goodwill” and is not intended to cover all of the tax-saving methods available in the sale of a dealership. Talk to your accountant and tax attorney about other options, such as installment sales and such.

 

Forensic Animation

Forensic animation is a newer legal tool used in just about every type of legal suit imaginable. In murder cases forensic animation can be used to recreate a forensic crime scene. In car accident cases this legal video tool can be used to recreate the accident and to determine who was at fault. However, while this technology is very effective, before it can be used as evidence it needs to be evaluated by the court for its admissibility.
The admissibility of forensic animation depends on several factors. First of all the court is going to look at how objective the animation is. They are going to look for significant biasing of the animated footage, which can give one side an unjust advantage. Next the court is going to look at the data used in creating the animation. The data used must be verifiable and it must be supported by witness testimony or authoritative facts. Finally, the forensic animation must be easy to understand and be relevant to the case at hand.
Forensic animation, while intriguing and helpful, is not right for every type of case. It is expensive and it takes time to generate. For most average forensic animation presentations under 3 minute, you should expect a turn around time of between 1 and 3 months. You should also expect to pay $6,000 plus for a piece of forensic animation. The actual cost that you will incur is going to depend on how long the piece needs to be, the complexity of the animation used, how soon you need the piece by and what forensic animation company you use.
The cost of forensic animation mostly goes towards the labor costs. In fact, labor is going to make up about three quarters of the total cost of your animation presentation. Some of the labor costs that your project will incur include: consulting, model generation, camera animation and actor animation. Again the actual costs that you will be charged are going to depend greatly on the complexity of the animation that needs to be generated and the company that you work with.

 

Settlement Documentaries

Settlement documentaries are a legal tool used by lawyers to strengthen their pre-trial lawsuit game plan. These video presentations are used to demonstrate how strong their case is, to encourage an out-of-court settlement and to improve the terms of the final settlement. To get the most out of a settlement documentary you really need to select a legal videographer or legal video production studio that is well trained, that has experience and that is certified.
The importance of using a professional legal videographer cannot be stressed enough. Because the amount of time, energy and resources devoted to winning your court case is riding on your settlement documentary, you want someone who can produce a professional looking video and who knows how to edit, light and orchestrate a video shoot effectively. The cost of a professionally produced settlement documentary can easily top $5,000, however, in lower value court cases, a basic settlement documentary can be produced for around $1,200. When looking for someone to produce your settlement documentary you will want to look for someone who has been certified as either a Certified Video Documentary Specialist or as a Certified Court Video Specialist.
Every settlement documentary is going to be different and each is going to have elements that are relevant to the type of case it is based on. However, each settlement documentary needs to include similar key features. These key features include: narration by the lead counsel for your case, witness testimony, video of the accident scene, actual footage of the accident, video footage that illustrates the pain and suffering that has been caused to the plaintiff and the clarification of what damage was caused and what liability the defendant has.
Settlement documentaries are not an appropriate option for every civil or criminal case. However, they are extremely valuable when used for establishing the strength of wrongful death cases, personal injury cases and class action settlement cases. If you are involved in any of these types of cases, then you may want to consider using a settlement documentary to support your desires for an out-of-court law suit settlement.

 

What is a Legal Videographer

A legal videographer is an important legal professional who can specialize in a wide variety of video related legal services. The main services offered by legal videographers include creating Day-in-the-Life videos, forensic animation productions, settlement documentaries and filming court proceedings. Other services offered by legal videographers include legal reporting, video evidence analysis and training new legal videographers.
The first service offered by legal videographers is the production of Day-in-the-Life videos. These videos are developed to be admitted as evidence in a court of law. Their purpose is to demonstrate how an accident or product malfunction has negatively impacted the life of the plaintiff. These video productions utilize many tricks of the trade, like somber music, depressed lighting and dramatic staging of the victim, in order to solicit sympathy for the case’s victim.
The second service offered by legal videographers is the production of forensic animation. These video productions are intended to be admitted as evidence in a court of law. Their purpose is to recreate an event to help clarify to the jury what happened and to clarify who was liable for the accident or for the wrongful death. This service takes time and money. Average forensic animation productions cost over $5,000 to produce and they can take upward of 3 months to complete.
The third service offered by legal videographers is the production of settlement documentaries. Unlike Day-in-the-Life films and forensic animation, settlement documentaries are not intended to be admitted as evidence during a trial. Instead, they are intended to encourage the defendant to settle out-of-court. In the event that an out-of-court settlement cannot be reached, these films can be edited to create very effective Day-in-the-Life films to be admitted as evidence and used to support the plaintiff’s case during their trial.
The fourth service offered by legal videographers is court room video documentation. This is a very basic service. What it entails is setting up a camera in a court room to film the proceedings of a court case in order to preserve it for posterity, public record or to be used by the jury when reviewing the case.
The final service offered by legal videographers is video analysis. There are several different analyses that legal videographers can offer. They can verify that a piece of video evidence has not been tampered with or hoaxed, they can identify anomalies in the video and they can also enhance the video or images to make them easier for the court to interpret.

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