Leap Year Litigation

Originally published by Kyle White.

Today is February 29, 2016, which is unusual, because February typically only has 28 days. Apparently, the purpose of a leap year is that “the number of Earth’s revolutions about its own axis, or days, is not equal to or connected in any way to how long it takes for the Earth to get around the sun.” The full explanation is more extensive and exceeds the scope of this post, but it is worth the read for those who are interested. Here, we examine the appearance of the leap year in reported case law.

It should not be surprising that courts have faced leap year related excuses for late filings. A plaintiff has allegedly waived the right to file a discovery-related motion, because the plaintiff allegedly “calendared the due date of the motion as Monday, March 26, 2012, and filed it that day based on a lack of awareness that 2012 is a leap year.” Manno v. Healthcare Revenue Recovery Grp., LLC, No. 11-61357-CIV, 2012 U.S. Dist. LEXIS 56272, at *3 (S.D. Fla. Apr. 23, 2012). Unfortunately, the Court ruled that “[t]his type of error, in and of itself, however, does not provide good cause for out-of-time filing.” Id. A notice of appeal was not timely filed, despite the excuse that “the late filing” was caused in part by the appellant’s alleged “miscalculation of the time due to Leap Year . . . .” Hardman v. Comm’r, No. 08-1118, 2008 U.S. App. LEXIS 13613, at *1 (D.C. Cir. June 24, 2008). A leap year was not a basis for equitable tolling, despite the fact that the leap year “caused the statute of limitations to begin running on March 29, 2004, instead of March 30, 2004.” Simpson v. Wolfenbarger, No. 05-CV-71298-DT, 2006 U.S. Dist. LEXIS 6509, at *12 (E.D. Mich. Feb. 21, 2006).

The leap year has also spawned litigation. Litigation has arisen out of a dispute as to how an employer’s payroll practices should be adjusted to deal with the fact that “every eleven (11) years, a leap year causes a 27th pay period to occur.” Matter of Cty. of Erie v. Faculty Fedn. of Erie Cmty. Coll., 2014 NY Slip Op 24158, ¶ 2, 44 Misc. 3d 593, 594, 988 N.Y.S.2d 449, 450 (Sup. Ct.). A court has refused to give a prisoner “an extra day of credit for each leap year that he has served or will serve.” Keystone v. Johnson, Civil Action No. 7:06-cv-00503, 2006 U.S. Dist. LEXIS 63778, at *3 (W.D. Va. Sep. 7, 2006).

Leap years have also thrown wrenches into interest calculations. Kreisler & Kreisler, LLC v. Nat’l City Bank, 657 F.3d 729, 732 (8th Cir. 2011) (“Because the numerator and denominator do not match as they do in the other methods, the 365/360 method increases the effective interest rate by .01389 in a non leap year.”).

The above is by no means an exhaustive list of leap year appearances in litigation, but it does show that even the leap year is not immune from being dragged into the courthouse.

 

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Mortgage Servicing 101

Originally published by David Coale.

In Villarreal v. Wells Fargo Bank, the Fifth Circuit published a straightforward Rule 12 affirmance in a mortgage servicing case, likely to make abundantly clear what law governs several recurring issues in such cases.  Those principles include: (1) a plaintiff’s failure to allege her own performance bars a breach of contract claim, (2) a negligence claim about servicing should arise from a duty independent of the contract, (3) a wrongful foreclosure claim requires allegation of the allegedly grossly inadequate price, and (4) typical mortgage servicing activity is “incidental to the loan” and does not create DTPA standing.  No. 15-40243 (Feb. 26, 2016).

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Client Development Coaching: Where are you now?

Originally published by Cordell Parvin.

As you know, last week I started coaching a new group of lawyers in West Palm Beach, FL.

When I start coaching lawyers, the first thing I want to do is get an assessment of where they are in their client development efforts.

If you want to get a better idea of how I do a self-assessment, check out this short video clip.

 

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Houston Legal Links 2/29/2016

Originally published by Mary Flood.

Top legal news includes: Lawsuit alleges Houston police condone lethal force by officers (Chron subsc); Texas Case Could Define Extent of Abortion Limits; 150 stories take aim at abortion stigma (Chron subsc); U.S. Citizen Jailed in Immigration Status Mistake; For Student-Athletes in Texas, Birth Certificates Will Determine Gender; Sen. Whitmire to Attorneys for Accused Cop Killer: “You Can’t Stop Me.”; Spec’s lawsuit raises questions on how insurance companies should handle data breaches; One victim identified in Navasota plane crash that killed two adults, two children; New poll: Texans favor more medicinal use of marijuana; Woman Stuck in Chimney Calls Cops on Herself, Goes to Jail; Houston Service Workers Demand Livable Wages; Pedestrian killed leaving rodeo BBQ contest; Houston Rodeo Trail Ride Trampling Terrifies Crowd of Schoolchildren; UT System executives get big pay increases, front-line employees do not; Texas Supreme Court Revives Lawyer’s Whistleblower Claim (Texas Lawyer); ATL Gregg Costs argument: Why This Judge May Be One Of The Only Supreme Court Nominees Worth Considering; Cornyn urges more U.S. energy exports, limiting role of Russia and Iran & Report: Rail hazmat safety violations should be prosecuted.

For the water cooler: We Read Apple’s 65-Page Filing Calling B.S. On The D.O.J., So You Don’t Have To; Yet Another Firm To Move Back-Office Operations Offsite; Will There Be Layoffs?; Jury deadlocks in case against lawyer accused of neglect causing his dad’s death; Judge throws out toughest criminal charges against former Dewey leaders as prosecutors’ case shrinks; Red flag in email scams: ‘Have you already been contacted by (insert lawyer name)?’; Dow Chemical Says Scalia’s Death Doomed Class-Action Challenge; Contracts: If Only They Were Fun; Top Kansas court strikes law making it a crime to refuse a warrantless DUI test; Ethics court blocks deal over Pennsylvania supreme court justice’s email; Will Consumer Financial Protection Bureau will adopt rules to rein in mandatory arbitration clauses?; 2 brothers got no time in drug case until they mocked judge in crude Facebook posts after sentencing; Detroit agrees to pay $100K to man whose dog was killed in police shooting caught on dashcam; Dentons tells ex-Luce Forward partners of $1.9M clawback years after they joined predecessor firm & US will pay tribes nearly $1B under settlement approved by judge.

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Use Your Extra Day To LEAP Into Retirement

Originally published by Robert Kraft.

Happy Leap Year!

USE YOUR EXTRA DAY TO LEAP INTO RETIREMENT

By Rosalie Alviar

Social Security Regional Public Affairs Specialist in Dallas, TX

It’s leap year and that means one thing — you can add one extra calendar day to your February schedule. Many people are preparing for the upcoming elections. Others might be getting a jump on spring cleaning. What will you do with your extra day?

You could use a few of your extra minutes to check out what Social Security offers at  http://ift.tt/1hwxoqT. There, you can:
Apply for retirement, disability, and other benefits;

• Get your Social Security Statement;
• Appeal a recent medical decision about your disability claim;
• Find out if you qualify for benefits;

If you’re planning or preparing for retirement, you can spend a fraction of your extra 24 hours at my Social Security. In as little as 15 minutes, you can create a safe and secure my Social Security account. More than 21 million Americans already have accounts. In fact, someone opens one about every 6 seconds. Join the crowd and sign up today at http://ift.tt/1i5dOlJ. With a personalized my Social Security account, you can:

• Obtain an instant, personalized estimate of your future Social Security benefits;
• Verify the accuracy of your earnings record — your future benefit amounts are based on your earnings record;
• Change your address and phone number, if you receive monthly Social Security benefits;
• Sign up for or change direct deposit of your Social Security benefits;
• Get a replacement SSA-1099 or SSA-1042S for tax season; and
• Obtain a record of the Social Security and Medicare taxes you’ve paid.And if you have a little time to spare, you can always check out our blog, Social Security Matters, at blog.socialsecurity.gov. There, you will find guest posts by Social Security experts, in-depth articles, and answers to many of your questions about retirement, benefits, and healthcare. Each post is tagged by topic so you can easily search for what matters most to you.Leaping from webpage to webpage, you can easily see that Social Security has you covered all year long, not just on that extra day in February. Remember, you can access our homepage that links to our wide array of online services any day of the— at http://ift.tt/SZZKeK.

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Division Orders- How Do I Know My Decimal Interest is Right?

Originally published by John McFarland.

So you have received a division order, and it says that ABC Oil Company will pay you for a .015625 royalty interest in the Barn Burner Unit #1 Well. How do you know whether the .015625 interest is correct?

I’ve written previously about the purpose and legal effect of division orders, and you can read that post here. The purpose of a division order is to protect the company paying the royalty (“payor”) from double liability. If you sign a division order and it turns out that you should have been paid a larger interest than shown on the division order, the company is protected as long as it paid according to the division order. If you sign a division order and it turns out that your interest is less than the interest shown on the division order, you are legally obligated to pay back the money that you weren’t entitled to.  A payor is legally entitled to require that you sign a division order correctly setting forth your interest as a condition to payment.

To understand division orders, it is helpful to understand how exploration companies handle royalty payments. When a company decides it wants to drill a well in a particular area, it first hires landmen who investigate the mineral title to the tracts in the area where the well will be drilled and identify the mineral owners of those tracts. The company or its landmen then contact those mineral owners and negotiate oil and gas leases covering their interests. Depending on the complexity of the mineral title, there may be dozens or even hundreds of mineral owners from whom oil and gas leases must be obtained. The company may want to acquire leases in a large area around its proposed drillsite, in order to lock up the minerals in that general area so that additional wells can be drilled if the exploratory well is successful.

After the company has acquired the oil and gas leases in the area it wants to exploit, it picks its initial drillsite and then engages an oil and gas attorney to examine the title to the drillsite tract. The attorney reviews all of the documents gathered by the landmen involving the mineral title to the drillsite tract and then gives an opinion, called a drilling title opinion, to the company. The purpose of the drilling title opinion is to assure that the company owns oil and gas leases covering 100% of the mineral estate in the drillsite tract. If the drillsite consists of a pooled unit encompassing two or more smaller tracts, the drilling title opinion may cover all of the tracts in the proposed pooled unit. Where the well to be drilled is a horizontal well, the drilling title opinion should cover at least all of the tracts that will be penetrated by the well bore. If the attorney discovers an unleased interest or finds defects in the mineral title that raise questions about the mineral ownership, the company will engage a landman to “cure” these title defects prior to the drilling of the well.

Once the drilling title opinion is complete and shows that the company has the drillsite 100% leased, the company drills its well. If the well is successful and placed into production, then the company engages an attorney (who may or may not be the same attorney as the one who did the drilling title opinion) to prepare a division order title opinion. The purpose of this second opinion is to tell the company how to pay the royalty owners, based on the record title ownership of the minerals and the oil and gas leases covering the well or pooled unit. The division order title opinion will list each owner of an interest in production and that owner’s decimal interest in production, all of which must add up to 100%. Again, if there are issues regarding the correct ownership of any person, the opinion will discuss those issues and what needs to be done to “cure” the problem. Those issues are listed as “requirements” in the opinion. Where there are requirements, those owners affected by the requirements will not be paid until the requirements are cured.  Remember that a title opinion is just that — an opinion. It is prepared by attorneys skilled in examining titles, but it may be wrong. First, it is based only on the documents provided to the attorney for review. The attorney may not have seen documents that affect the title, or the attorney may have missed provisions in the documents that affect the title. Second, it often involves interpreting documents in the chain of title that could be subject to more than one interpretation.

Based on the division order title opinion, the company then prepares a division order for each owner entitled to payment on production from the well and sends it to the owner. The company personnel who deal with division orders are called division order analysts. When you call a company asking about your division order, you are usually speaking to a division order analyst.  Often, the royalty owner’s receipt of a division order is the first indication to the royalty owner that a well has been completed and is producing. Depending on the complexity of the title, there may be a significant time between the completion of the well and the issuance of division orders – sometimes several months.

So, back to our hypothetical.  You have received a division order, and it says that ABC Oil Company will pay you for a .015625 royalty interest in the Barn Burner Unit #1 Well. How do you know whether the .015625 interest is correct?

Your decimal interest is calculated based on your royalty interest in the tract or unit on which the well is drilled. If your interest is a mineral interest, then it will be subject to an oil and gas lease, and that lease will reserve a royalty on production. So if you own a 1/16 mineral interest in the lands comprising the Barn Burner Unit, and if your mineral interest is subject to a lease reserving a 1/4th royalty, then your interest in production from the well is 1/16 of 1/4, or .015625.

Or, your interest could be a fee royalty interest – sometimes called a non-participating royalty interest — in production, entitling you to a share of the royalty but without the right to sign leases. There are two kinds of fee royalty interests – those expressed as a fractional royalty, and those expressed as a fraction of the royalty.  So in our hypothetical, you may own a non-participating royalty interest of 1/16 of 1/4 of production (a fractional royalty) from the lands within the Barn Burner unit.  Or, you might own a non-participating royalty equal to 1/16 of the royalty reserved in any lease of the lands in the unit (a fraction of the royalty).  If you own 1/16 of the royalty, then you have to know what royalty was reserved by the leases from which your royalty is paid in order to verify your decimal interest in production. If the lease or leases covering the Barn Burner Unit reserve a 1/4 royalty and you own 1/16 of the royalty reserved in those leases, then your royalty is 1/16 of 1/4, or .015625.

So the first key to verifying the interest on the division order is to know what interest you own in the property.

The division order you received says your interest is in the Barn Burner Unit #1 well – the name implies that the well is on a pooled unit.  If so, your royalty interest calculation will be affected by the fact that the operator created a pooled unit.  Pooling is the combining of multiple tracts to create a large enough tract or unit to drill and produce the well. Most leases authorize the lessee to create pooled units. Pooled units are formed by filing a declaration of pooled unit in the deed records of the county that describes the leases and lands being pooled. The lease pooling provisions generally provide that production from a well on a pooled unit will be allocated among the tracts in the unit based on the number of acres in each tract compared to the total acres in the pooled unit. To illustrate, let’s suppose that you own a 1/4 mineral interest in 40 acres, and you leased your interest to ABC Oil Company and reserved a 1/4 royalty. Your lease authorizes ABC Oil Company to put your interest in a pooled unit. ABC forms a pooled unit of 160 acres and includes your 40-acre tract in the unit. Under the pooling clause in your lease, 40/160 of the production from a well on the unit will be allocated to your 40-acre tract – the size of your tract divided by the number of acres in the unit.  This fraction is called the “tract factor.” Each tract in the pooled unit has its own tract factor, and all tract factors in the unit add up to one.  So your interest in production from the Barn Burner Unit is 1/4 (your mineral interest in the 40 acres) times 1/4 (the royalty reserved in your lease) times 40/160 (the unit tract factor), or .015625. To verify your decimal interest in the unit, you need to know your royalty interest in the tract, the number of acres of your tract included in the pooled unit, and the size of the pooled unit. And you need to verify that the company had authority under your oil and gas lease to form the pooled unit.

Verifying your division order interest (DOI), then, is a matter of gathering information. You may already know some of the information you need. Other information you may need to get from the operator of the well. Some operators are very helpful and willing to provide you the information you need to verify your interest — or at least to give you the formula used to calculate your interest: mineral interest times royalty times tract factor. Other companies are less helpful. Sometimes you have to call a royalty help line and listen to music while on hold, or leave a message. Often the cover letter sending the division order provides a name and number you can call.  Be persistent. You’re entitled to the information you need to be sure you’ll be paid correctly. Signing a division order that has the wrong decimal has serious legal consequences.

In the last session of the Texas Legislature, Texas Land & Mineral Owners’ Association sponsored a bill to require companies to disclose the formula used to calculate a royalty owner’s division order decimal, if requested. The bill was opposed by the exploration industry and did not get a vote. I expect the bill will be introduced again. The bill and TLMA deserve the support of mineral and royalty owners. If you have not joined TLMA, go to www.tlma.org and do so.

Lastly, a word about allocation wells. I’ve written about them before. Division orders for allocation wells are different from other types of division orders. An allocation well is the term used for a horizontal well that is drilled across two or more separate tracts that are not pooled.  Suppose that ABC Oil Company drilled the Barn Burner 1H well across three tracts. The first tract is the tract where you own a 1/4 mineral interest that you leased to ABC, reserving 1/4 royalty. The second tract crossed by the well contains 40 acres, and the third tract contains 80 acres.  The situation looks like this:

ABC does not form a pooled unit combining the three tracts. Instead, it proposes to allocate production from the well among the three tracts based on the percentage of the productive lateral of the well located on each tract. Tract A – the tract in which you own an interest – has 800 feet of the well lateral, so it gets allocated 800/4520 = 17.7% of the well’s production. Tract B gets 1320/4520, or 29.2%, and Tract C gets 2400/4520, or 53.1%. So the division order ABC sends you calculates your royalty interest as 1/4 X 1/4 X 800/4520 = .0110619.  This division order is different from the division orders I discussed for pooled units because a division order for an allocation well is not based on any agreement as to how production from the well will be allocated among the tracts. It is in effect an offer by ABC to you to make an agreement with you on what share of the well you should get paid on. You can accept that offer by signing and returning the division order. If you disagree with how ABC proposes to allocate production, ABC will politely refuse to pay you, since you have refused to sign and return a division order. This is one of may problems with allocation wells that have yet to be worked out by the legislature and the courts. If you receive a division order that covers an allocation well, you should seek legal counsel before signing.

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A Better Encryption Mousetrap?

Originally published by Patrick Keating.

Some businesses object to the use of cloud storage of electronic data because of a fear that employees of the storage provider (or others) could access the businesses’ data stored in the cloud.  Even if the data is encrypted, this fear can still exist if the cloud storage service holds the key necessary to decrypt the data. 

In a 2015 post, I wrote about the options available to encrypt data through a method that will prevent the cloud storage provider from accessing the data.  At that time, the user needed to retain the services of a third-party encryption service such as Sookasa or Boxcryptor to encrypt data before it was loaded into the cloud.  This is a functional approach, but it is cumbersome because the user must hire two separate service providers to get the job done – a cloud storage provider and a separate encryption provider.

The New Year brings increased ease of use for customers of Box, which is one of the major cloud storage providers.  Box now offers its “KeySafe” service to customers who wish to prevent Box from being able to decrypt the customer’s data.  To allow customers to do so without having to retain a third party service to store data encryption keys, Box partnered with Amazon Web Services (“AWS”).  Customers who elect this level of protection will have an additional layer of encryption placed on their data stored in Box.  The first level is the standard encryption that Box places on all customer data.  Box will retain that decryption key.  The second level of encryption will be performed with the customer’s decryption key, which will be stored with AWS.  Box will not have access to the customer’s key.

An analogy to explain this approach is the two-key method of launching nuclear missiles.  To avoid the risk of one rogue person performing a missile launch without authority, two authorized people must activate the launch by each inserting and turning their key in the launch mechanism.  Box’s Keysafe approach is similar.  To access the data, both the key maintained by Box and the key maintained by AWS must be used.  Box states that only the customer will be able to make that happen.

This new security feature in Box should be appealing to businesses with a heightened need to secure their data or the data of third parties.  For example, health care providers or law firms handling particularly sensitive client information.

//

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Legally Responsible Person Restrictions …

Originally published by Jerri Lynn Ward, J.D..

 

Effective November 15, 2015, Deaf Blind with Multiple Disabilities (DBMD) rules, Title 40 Texas Administrative Code (TAC) Chapter 42, were amended to clarify:

• restrictions on a legally authorized representative (LAR) or a legally responsible person

  (LRP) providing employment assistance or supported employment services;

• the composition of the service planning team (SPT); and
• the service providers required to receive cardiopulmonary resuscitation (CPR), first aid, and

  choking prevention training.

  A Financial Management Services Agency (FMSA) must inform a Consumer Directed Services employer about the information provided in this information letter (IL).

  Supported Employment and Employment Assistance

  The DBMD waiver application states that an LRP is prohibited from providing any services in the DBMD program, including employment assistance and supported employment services.

  The Centers for Medicare and Medicaid Services defines an LRP as:
  • a parent of a child under the age of 18 (natural or adopted); or
  • the spouse (regardless of age) of an individual receiving waiver services.

  An LRP does not include the parent or legal guardian of an adult (18 years of age or older) receiving services. An LRP also does not include the guardian of a minor.

  In Title 40 of the Texas Administrative Code (TAC)§42.103, DBMD defines an LAR as a person authorized by law to act on behalf of an individual regarding a matter described in 40 TAC Chapter 42 and may include:
  • a parent, guardian or managing conservator of a minor; or

  • the guardian of an adult.

Visit us at Garlo Ward, PC.

The post Legally Responsible Person Restrictions, Service Planning Team Members and Cardiopulmonary Resuscitation Training appeared first on Garlo Ward, P.C..

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Understanding the Legal Ramifications of Marriage Fraud

Originally published by Bob Kraft.

Fraudulent marriages are entered into in attempts to circumvent existing United States immigration laws. For purposes of immigration, a legal marriage here in the United States or elsewhere with a valid marriage certificate doesn’t make the marriage valid. Upon getting married, the parties must intend to live together as a couple in an actual marital relationship. In proving an actual marital relationship, actions often speak louder than words.

Investigating marriage fraud
Uncovering fraudulent marriages is a pivotal concern for the U.S. Customs and Immigration Service due to national security issues. Spouses entering the United States might really be intending on committing serious crimes here or even participating in terrorist activities. Those are just two of the reasons why there’s a mandatory two year conditional “wait and see” period on spousal visas that are issued. Within 90 days of the expiration of that two year period, another application must be made for permanent residency.

What are the indicators of a valid marriage?
For purposes of immigration, there aren’t any statutes or regulations that define what a valid marriage is. According to the Law Offices of Joshua L. Goldstein, P.C., the indicators come from the guidance of previous court cases and experienced immigration attorneys. Usual and customary indicators of a valid marriage might include but not be limited to:

• Speaking the same language
• Participation in activities together
• Attending significant events with each other
• Sexual relations with each other
• Common children
• Joint financial responsibilities
• Joint titles of vehicles or homes

The penalties for marriage fraud
The U.S. Immigration and Nationality Act sets forth the penalties for marriage fraud. Title 8 Section 1325(c) states as follows: “Any individual who knowingly enters into a marriage for the purpose of evading any provision of the immigration laws shall be imprisoned for no more than 5 years, or fined not more than $250,000, or both.” Other charges could also be filed, each with further imprisonment and fines.

How violators might be charged
What an individual might be charged with depends on the facts of each individual case. If a calculated conspiracy arranging for sham marriages is involved, more charges and higher penalties will likely be sought. Whether the immigrant might be charged is a matter of prosecutorial discretion, but he or she faces almost certain deportation without eligibility to return to the United States.

Sham marriages with foreign nationals involve the national security of the United States. Valid marriages and marital relationships must exist.

This article is from Lizzie Weakley, a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. She enjoys the outdoors and long walks in the park with her four-year-old husky Snowball.

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Mike Maslanka @ Your Desk: Nugget Wisdom

Originally published by Teri Rodriguez.

Mike Maslanka talks about practical wisdom and lessons learned from U.S. Supreme Court Justice Frankfurter and Poet W.H. Auden — in the latest installment of Mike Maslanka & Your Desk, a video series presented by the State Bar of Texas on its YouTube channel, Texas Bar TV.

View other installments of Mike Maslanka @ Your Desk

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Toyota Seatbelt Recall

Originally published by By Muhammad Aziz.

Toyota recalled nearly three million RAV4 sport utility vehicles worldwide. This recall includes 1.33 million units in North America, 625,000 in Europe, 434 in China, and 177,000 in Japan. Uncovering a defect in the rear seatbelts resulted in the automaker’s recall. In the event of a frontal collision, the seatbelts could be damaged or completely severed, leaving passengers unprotected. The automaker said in an email that the lap-shoulder seatbelts in the vehicles’ second-row seats could come into contact with the metal seat cushion frame causing it to cut off. “There is a possibility that, in the event of a high-speed frontal collision, the seatbelt webbing could contact a portion of the metal cushion frame, become cut and separate,” stated the company. “If this occurs, the seatbelt may not properly restrain the occupant, which could increase the risk of injury to the occupant.”

The world’s largest automaker said they have received two accident reports out of North America involving rear seatbelt separation. One of the accidents was fatal. Toyota said that, at the moment, a determination could not be made in regards to whether the death or injuries are linked to the defect.

After careful investigation, Toyota stated the problem was traced to the original design of the metal seat-cushion frames. The automaker made the point that the seatbelts themselves were safe and the supplier wasn’t the cause of the problem. Toyota said they would add resin covers to the metal seat cushion frames on any affected vehicles.

If you or someone you know has been injured in an accident with a recalled vehicle, contact an attorney at Abraham, Watkins, Nichols, Sorrels, Agosto & Friend by calling 713-222-7211 or toll free at 1-800-870-9584.

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Top 10 from Texas Bar Today: Defamation, Arbitration, and Position

Originally published by Joanna Herzik.

To highlight some of the posts that stand out from the crowd, the editors of Texas Bar Today have created a list from the week’s blog posts of the top ten based on subject matter, writing style, headline, and imagery. We hope you enjoy this installment.

10. Denbury Case Returns to Texas Supreme Court – John McFarland of Graves Dougherty Hearon & Moody @GravesDougherty in Austin

 

9. EEOC to Release Employer Position Statements to All Claimants – Georgia Jolink of Baker & McKenzie LLP @bakermckenzie in Houston

 

8. Court Rules In Favor Of an Attorney Regarding Claims Arising From a Conflict of Interest – David Fowler Johnson @TXFiduciaryLit of Winstead PC in Fort Worth

7. Start-Ups in Austin and Elsewhere Should Consider Utilizing International Arbitral Procedures … – Beth Graham of Karl Bayer @karlbayer in Austin

6. Litigation triple-header – David Coale @600camp of Lynn Pinker Cox & Hurst, LLP in Dallas

5. Attorney Work Product and Hiding the Coverage Opinion – A Refresher on Attorney-Client Privilege – Patrick McGinnis of Merlin Law Group @MerlinLawGroup in Houston

4. Substance use and other mental health concerns among US attorneys – Douglas Keene @KeeneTrial of Keene Trial Consulting in Austin

3. Defamation: Internet Crisis Control – Cleve Clinton of Gray Reed & McGraw @GrayReedLaw in Dallas

2. Warrantless Search Under a Man’s Mattress Held Constitutional – Brandon Barnett of Barnett Howard & Williams PLLC @BHWLAWFIRM in Fort Worth

1. Loving Thy Neighbor & the Defamatory Flyer – Drew York of Gray Reed & McGraw @GrayReedLaw in Dallas

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Are Homeowners Ever Liable for Natural Disaster Injuries?

Originally published by highrank.

Natural disasters don’t wait until everyone is safe in a home or public building to strike. You could be watching the game over at friend’s house or need to take shelter during a service call. If you suffer an injury at someone else’s home, you may wonder how you will pay for medical bills, the cost of rehabilitation, and time off work.

Homeowner’s Insurance and Natural Disasters

Natural disasters, including tornadoes, lightning strikes, severe storms, floods and earthquakes, are considered “Acts of God.” No one can foresee or prevent the damage caused by these events. Homeowner’s and renter’s insurance are the first two places many individuals look after a natural disaster, but these two forms of insurance may only offer limited coverage after a natural disaster.

All insurance policies are negotiated using a “standard risk measurement.” Natural disasters often fall outside of those categories, and some homeowner’s insurance policies may not cover any injuries or damage associated with the disaster. Every insurance policy varies slightly. Homeowner’s should look closely to see what types of damage and injuries are covered after a natural disaster.

Many insurers do not cover flood damage, and others may limit the amount of compensation a policyholder or injured individual can collect. Both residents and guests who suffer during an incident may find some financial relief from these types of insurances, but it may not fully cover the associated costs.

When a Homeowner or Third Party Is Liable for a Visitor’s Injuries

Proving homeowner or third party liability after a natural disaster is difficult but not impossible. Property owners are required to reasonably address foreseeable hazards in and around the home. When they fail to do so or to warn visitors of the hazard, they are liable for any resulting injuries. For instance, if a friend comes over for dinner and a heavy wind gust in a storm knocks a tree over, hurting the individual, the homeowner may be liable. If the tree was dead or a hazard prior to the weather event, injury liability lies squarely with the property owner.

An injured individual may also hold a product manufacturer or a construction/installation company liable for an injury in some cases. For example, if a wooden beam falls in a barn during a tornado and a subsequent investigation shows the beam was not reinforced according to building code, the construction crew may shoulder the responsibility for any resulting injuries.

How Your Attorney Can Help

If you suffer an injury after a tornado, flood, mudslide, or other natural disaster on someone else’s property, you may have access to compensation through a homeowner’s insurance policy. In addition to helping you investigate the proximal cause of your injury, your attorney will:

• Negotiate with medical insurance providers – After a serious injury, your health insurer may try to deny or reduce your coverage. Your attorney can represent you in front of your health insurer.

• Represent you in front of homeowner’s insurance providers – A homeowner does not have much control over how their insurance provider handles their claim after a natural disaster. Your attorney can help you negotiate your claim with the insurer if the policy included coverage for injuries resulting from an Act of God.

• Represent you during a lawsuit – In conjunction with negotiation with insurance providers, your attorney will likely pursue an alternative case to prove negligence on the part of a homeowner or a third party.

After a natural disaster, an injury attorney will help you secure compensation through every possible route. You shouldn’t have to suffer with the consequences of an injury that was out of your control. The team at the Law Offices of Aaron A. Herbert PC can help you determine the right course of action to secure the treatment and compensation you deserve. Contact our office in Dallas today for a free case evaluation.

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Defamation: Internet Crisis Control

Originally published by Cleve Clinton.

Arriving at his warehouse last week Knott Faire, owner of Faire Carpet Cleaning, discovered yet another complaining critique posted on WELP: “Lots of hype, a mediocre cleaning and a hassle at the end. Don’t get tied up with Knott!” In over 75 previous reviews only 3 were slightly negative. Since the “hype” complaint, another dozen scathing complaints were logged. Believing that the negative reviews are from a competitor, not his customers, Knott called his trusty lawyer Icahn Ficksit for help. Icahn issued WELP a subpoena demanding production of identifying information and ISP (Internet Service Provider) addresses for the dozen offenders. Can Ficksit successfully subpoena the documents? What should Knott Faire do about his on-line reputation?

Ficksit may well not get the documents he wants. In Texas, probably not. Texas courts require a defamation plaintiff to submit sufficient evidence of a prima facie case on each essential element of the claim (see Cahill and Dendrite) to subpoena the documents sought. Just saying the postings are tortious or illegal is not enough. Texas businesses seeking personal details about website users must lay out actual facts to support the subpoena. For example, if the reviewer was a customer and the posted review was based on personal experience, defamation is not likely. If the statement is false and the reviewer was never a customer, then the review is not an opinion and may well be based on a false, defamatory statement.

Internet Crisis Control for Knott Faire?

Faire probably should focus more carefully on fixing his internet reputation. How can Knott Faire best get this done?

Be Proactive.  “Nip it in the bud.” Release your side of negative information first, by putting your most favorable spin on the facts. If it is reasonable, it will be believed.

Be Upfront.  Consider contacting and offering to meet with the online poster if the negative comments have already been posted. Be conciliatory.

Apologize if Necessary.  Consider ‘fessing up to your mistakes. A quick apology is less painful and less costly than years of litigation, and is likely to put you in a better light rather than appearing to be clueless and defiant.

Negotiate to Get the Post Down.  Consider the cost to get it down. Words are forgotten. Even newsprint fades. The permanence of the web creates a major branding challenge.

Own Your SEO (Search Engine Optimization).  Consider creating your own content and drive the bad stuff down in search engine rankings. Only your worst enemy will look for dirt on you past the first Google search page. See Reputation Repair below.

And, know that there are those who believe that any company that sues over online reviews someone makes is clearly a company not worth doing business with, since they might, potentially, sue you over any bad review you write online about them.

Tilting the Scales in Your Favor.

Our advice on this subject of almost two years ago is the same today. Consider undertaking internet reputation repair. Managing your internet reputation is not a new idea. In fact, Gray Reed regularly works with some of our clients on crisis communications and dealing with damaging or misinformation on the internet. There are also internet service providers and websites like Reputation Changer, Reputation Management Consultants, Integrity Defenders,and Online Reputation Management that promote their ability to clear negative search results arising from an internet search engine. And by the way, consumer-review websites—whether Yelp, Angie’s List, Google + Local, Yahoo Local Listings, or Amazon.com—are shielded from liability for defamation claims stemming from user comments under the Communications Decency Act of 1996.

Prior Tilting Articles.

• SLAPP Happy: Can a Business Sue a Customer who Gave a Bad Online Review?
• Keeping a Good Name: Protecting Yourself From Internet Defamation
• Defamation Primer
• When is a Tweet Not So Sweet?

Also check out: Defamation Law: The Basics

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Loving Thy Neighbor & the Defamatory Flyer

Originally published by Drew York.

Pete Kusdel was walking his dog through his neighborhood one morning when he saw papers strewn all over one of the streets—it looked like a recycling truck had lost its load!  Mad as heck and ready to call the local garbage company, he soon realized that each piece of paper had a picture of his neighbor, Holly Roundtree, on it. Pete picked up one of the pieces of paper and was shocked by what he read: “Holly Roundtree, 4001 Polka Drive. You’re no Christian! Leave my husband alone!” He picked up another piece of paper and it was exactly the same. Pete thought to himself, “Man, I can’t wait for my wife to share more details on the neighborhood gossip. This is the biggest scandal in years!” Sure enough, rumors began spreading that Cynthia Senhan made the flyers because she thought Holly was sleeping with her husband. Now, Holly is furious because the rumor is false. Does she have a good defamation claim against Cynthia?

Defamation Primer. 

We’ve written a number of articles on defamation over the years. Basically, defamation involves a false statement of fact about a person that is published to a third party and tends to injure the person’s reputation. Assuming Holly is telling the truth, it’s pretty obvious that Cynthia’s fliers are defamatory.

But does Holly really have a good lawsuit?  Maybe. The law divides defamatory statements into two groups: (1) statements that are defamatory per se; and (2) statements that are defamatory per quod. Defamatory per se statements are typically statements that unambiguously charge someone with committing a crime, being dishonest, engaging in fraud, rascality or general depravity.  All other statements are defamatory per quod.  Some courts have recognized that statements claiming a person engaged in an extramarital affair are defamatory per se.

What’s the effect of a defamatory per se statement?  The law presumes a plaintiff, such as Holly, suffered loss of reputation damages without proof of actual injury. If the defamatory statement is not per se, the plaintiff must present proof that the statement caused a loss of reputation, and how those damages are calculated, to recover.

Are Cynthia’s fliers protected “free speech” communications?  Highly doubtful. We’ve  written about free speech and defamation on a couple of occasions, but it’s worth revisiting.  If Holly sues Cynthia, the Texas Citizens Participation Act probably won’t protect her fliers because they were not a matter of public concern—that is, until Cynthia decided to make it known to the public. Had Holly been a public official, it might be a different story.

Tilting the Scales in Your Favor.

Remember the Golden Rule: if you don’t have something nice to say about someone, don’t say it. But if that doesn’t stop you, (we’ve talked about this before) you better have evidence to back up your statement if you’re going to accuse someone of engaging in reprehensible conduct. Otherwise, it’s probably best to not make the statement, especially in today’s age where everything posted online is forever memorialized. If you’re sued for defamation, one of the first things you should do is contact your homeowner’s insurance company because you probably have coverage for those statements.

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Start-Ups in Austin and Elsewhere Should Consider Utilizing International Arbitral Procedures …

Originally published by Beth Graham.

Many new businesses understand that domestic arbitral proceedings may save the company both time and money in the event of a legal dispute. Increasingly, start-up companies based in Texas and across the United States are reportedly utilizing the International Chamber of Commerce’s (“ICC”) arbitration rules as well. According to a recent article published by the Miami-based blog internationalarbitrators.com, young companies that do business across international borders are now opting to engage in international arbitration in lieu of what can sometimes become “risky global litigation campaigns.”

In the article, the author advises new start-ups and their legal counsel to review an ICC guide entitled “Effective Management of Arbitration: A Guide for In-House Counsel and Other-Party Representatives.” According to the article’s author, the resource offers new businesses and their lawyers timely and useful information regarding how to cost effectively handle cross-border arbitration.

Due to the variety and complexity of legal issues many start-ups face, it is imperative for new business owners to consider utilizing arbitral provisions in their company contracts and other agreements. A quality Austin-area small business and start-up attorney can help.

Additional Resources:

Even Start-ups are Using International Arbitration to Resolve Disputes, by Santiago A. Cueto, internationalarbitrators.com (February 8, 2016)

Photo credit: stevendepolo via Foter.com / CC BY

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USEPA Announces National Enforcement Initiatives for 2017 through 2019

Originally published by Walter James.

On February 18, 2016, the USEPA announced its seven “National Enforcement Initiatives” for the 2017 through 2019 fiscal years. Five of the initiatives are hold-overs (one expands its focus, however) and two are new. The National Enforcement Initiatives are:

1. Keeping Industrial Pollutants Out of the Nation’s Waters (new initiative)
2. Reducing Risks of Accidental Releases at Industrial and Chemical Facilities (new initiative)
3. Cutting Hazardous Air Pollutants (expanded initiative)
4. Reducing Air Pollution from the Largest Sources
5. Ensuring Energy Extraction Activities Comply with Environmental Laws
6. Keeping Raw Sewage and Contaminated Stormwater Out of the Nation’s Waters
7. Preventing Animal Waste from Contaminating Surface and Ground WaterThe top enforcement priority is to protect safe drinking water, and three of the initiatives include a focus on keeping pollutants out of drinking water sources.

The top enforcement priority is to protect safe drinking water, and three of the initiatives include a focus on keeping pollutants out of drinking water sources. The USEPA selects National Enforcement Initiatives every three years in an attempt to focus its resources on problems where there is significant non-compliance with laws.

The National Enforcement Initiative that focused USEPA enforcement on reducing pollution from mineral processing operations will return to the base enforcement program level. The USEPA also reiterated its enforcement statistics which can be viewed here: http://ift.tt/1SYtc82.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

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Grandparents Rights in Texas

Originally published by Nacol Law Firm - Dallas TX.

The statutory rights of grandparents in response to a child in the State of Texas, absent existing executions, are minimal. The Texas Courts observe the rights of the parents to prohibit visitation and communication of these children from their grandparents if the parents wish. There are however limited circumstances when grandparents of a child may petition the Court to receive an order that forces the child’s parents to let the grandparents see the children on a regular basis. Texas Courts honor the rights of the parents and must presume that a fit parent makes such decisions, as to who the child may or may not see, those decisions are in the best interest of the child.

In order for a grandparent to interfere with a parent’s right to prohibit the grandparents from seeing the child, the grandparent must prove three elements under 153.433 of the Texas Family Code:

a) The Court may order reasonable possession of or access to a grandchild by a grandparent if:

1. At the time the relief is requested, at least one biological or adoptive parent of the child has not had the parent’s parental rights terminated;
2. The grandparent requesting possession of or access to the child overcomes the presumption that a parent acts in the best interest of the parent’s child by proving by a preponderance of the evidence that denial of possession of or access to the child would significantly impair the child’s physical health or emotional well-being; and
3. The grandparents requesting possession of or access to the child are a parents of a parent of the child and that parent of the child:

A) Has been incarcerated in jail or prison during the three-month period preceding the filing of the petition;

B) Has been found by a court to be incompetent

C) Is dead; or

D) Does not have actual or court-ordered possession of or access to the child.

This Statute is limited in application because the Texas legislature gives deference to the parents’ fundamental authority to determine who their child may and may not see.

An example will help clarify this Statute. If a grandparent’s son died in car accident and the grandparent had been helping their son and daughter in-law raise the children, then the grandparents could request visitation rights. The daughter in-law would have to be alive and not have her parental rights terminated. The grandparents would have to prove to the Court by a preponderance of the evidence (more probable than not) that the denial of visitation would significantly impair the children’s’ physical health or emotional well-being. If the grandparents were helping raise the children the grandparents would request some type of visitation for the well-being of the children. These fact situations must be significant because Texas Courts and statutes make it difficult for grandparents to receive any type of visitation or possession if it is not in line with the parents’ wishes.

If you are a grandparent or a mother/father of a child in which the grandparents are attempting to sue you for some type of visitation, it is important to contact a qualified attorney to be informed of your options.

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Attorney Work Product and Hiding the Coverage Opinion – A Refresher on Attorney-Client Privilege

Originally published by Patrick McGinnis.

Recently, while going through the insurance company claim file on two cases, I saw references to a coverage opinion letter from a lawyer (or referencing emails shared between the adjuster and an attorney about coverage). These communications occurred in the claims handling process before the claim was denied and before the policyholder hired me as their lawyer. At about that point in the claim file there was much redacting where the lawyer defending the case had blacked out (or blanked out) anything having to do with communications between the coverage lawyer and the insurance company. I sent (pre motion to compel) letters to opposing counsel kindly asking them to reconsider their redaction of the documents, and withdraw their objection to my discovery request. The response I got was one of complete disdain that I had the audacity to make such a request. This is because many insurance defense lawyers think that anything done by a lawyer at any point during the claims handling process…

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Phoning It In

Originally published by Darin Klemchuk.

Mobile order and pay-ahead apps boost sales and customer loyalty – but restaurant operators must address legal issues, too.

Only a few years ago, customers relied on restaurant mobile apps primarily to find a nearby location or to browse a menu. But now, they’re reaching for their phone for a whole lot more.

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BP Personnel Most Likely to Completely Avoid Any Jail Time for 2010 Spill

Originally published by By Sammy Ford.

In April 2010, BP’s Deepwater Horizon rig exploded leading to the deaths of 11 workers, and spewed an estimated 134 million gallons of oil into the Gulf of Mexico. Federal prosecutors were able to secure an enormous settlement for the criminal and civil charges placed on BP, as a corporation, after this blowout. Despite the punishment against the corporation, 5 years have passed, and it is increasingly possible that not one person from BP will serve prison time.

In June 2015, a jury acquitted former BP executive David Rainey and found him not guilty in manipulating calculations to extremely underinflate the amount of oil that actually spilled into the Gulf of Mexico. Furthermore, a BP engineer pled guilty to a misdemeanor charge and did not have to go to jail after he faced two felony charges for spoliation of evidence. Similarly, a Halliburton manager pled guilty after deleting computer records, but only was sentenced to probation.

A 13-day trial began for Robert Kaluza, one of the last people to stand trial for the 2010 BP oil spill. Kaluza was one of two supervisors, who ignored tests which indicated that a rig explosion and well blowout were imminent. Kaluza and the other supervisor faced manslaughter charges for the death of 11 workers when it was alleged that they clearly missed signs of an impending blowout. However, prosecutors charging manslaughter on lower-ranking employees in other BP oil related cases are having their cases unravel before them with jurors and judges skeptical on the criminal liability. With that in mind, prosecutors in this case are only charging Kaluza with a violation of the Clean Water Act.

With Kaluza being one of the last people individually charged in the BP oil spill, it seems that nobody related to the BP oil spill will ever serve any prison time.

If you or someone you know has been injured as a result of an oil and gas related accident, contact an attorney at Abraham, Watkins, Nichols, Sorrels, Agosto & Friend by calling 713-222-7211 or toll free at 1-800-870-9584.

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Fifth Circuit Report: Oct.-Dec. 2015

Originally published by Steve Sather.

The Fifth Circuit decided cases dealing with appellate procedure, exemptions, judicial estoppel, jurisdiction, sanctions, standing and surcharging collateral during the fourth quarter of 2015.  A common theme among the cases is parties being disappointed in a variety of contexts, including having an appeal dismissed on procedural grounds, having a lawsuit dismissed based on incomplete filings in a bankruptcy case, losing exemptions based on unfortunate timing and failure to establish damages after dismissal of an involuntary petition.  
 
Appellate Procedure
 
Neurology andNeurophysiology Associates, P.A. v. Tarbox (Matter of Neurology andNeurophysiology Associates, P.A.), 2015 U.S. App. LEXIS 18007 (5^thCir. 10/15/15).

Debtor’s charter was forfeited in 2009.   Under Texas law, it remained as a legal entity for three years for purposes of winding up.   Five years later, debtor filed a chapter 7 petition.     Case was dismissed on motion of a creditor.  

Debtor then appealed the dismissal but failed to file a timely brief in the district court.   Creditor moved to dismiss the appeal.   Several days later, debtor filed a motion to extend time and a proposed brief.   Debtor contended that its counsel did not receive the Notice of Docketing Record because notice was sent to an outdated email address.    District court dismissed the appeal.    The Fifth Circuit found that the district court did not abuse its discretion in denying the request to extend the deadline to file the brief.  

Exemptions

Brown v. Sommers(Matter of Brown), 2015 U.S. App. LEXIS 20457 (5^th Cir. 11/24/15).

Chapter 11 debtor who was domiciled in Florida died during pendency of case.  Court converted case to chapter 7 and appointed a personal representative to assert the interest of the debtor.  Personal representative asserted an exemption under the Texas Estates Code and spouse asserted her own allowance under the Texas Estates Code.  Bankruptcy Court entered final order providing that surviving spouse could not be paid out of bankruptcy estate and submitted proposed findings and conclusions to district court on allowance to be granted from probate estate.  Surviving spouse appealed from District Court’s order adopting bankruptcy court’s findings but not from bankruptcy court’s separate final order.  As a result, surviving spouse forfeited appeal on issue of whether widow’s allowance could be paid from bankruptcy estate.

Although debtor was domiciled in Florida at time of his filing, he had not lived there for two years.  Because he lived in Texas for the 180 days preceding two years before the filing date, his exemptions were determined by Texas law.  However, personal representative could not claim allowance under Texas Estates Code because debtor was alive on date of petition and snapshot rule applied.  Court held that Frost and Zibman did not abrogate the snapshot rule but instead operated to limit exemption based on subsequent events.

Surviving spouse was not entitled to allowance under Texas Estates Code because debtor was not domiciled in Texas at time of death.  Instead, allowance was governed by Florida law where he was domiciled.  Florida only allowed a widow’s allowance of $18,000.  Further, this amount could only be paid from the probate estate, not the bankruptcy estate.

Judicial Estoppel
 
Allen v. C &H Distributors, LLC, 2015 U.S. App. LEXIS 22567 (5^th Cir. 12/23/15)

Debtors filed chapter 13 in 2009 and confirmed a plan. Approximately a year and a half into their chapter 13 case, the debtors filed a personal injury suit.   They did not disclose the suit in their pending bankruptcy.  In April 2014, the bankruptcy court closed the case without a discharge due to failure to complete a financial management course.    In September 2014, the defendants filed a motion for summary judgment based on judicial estoppel.   The district court granted this motion.

The Fifth Circuit affirmed, finding that the debtors had taken inconsistent positions, that the bankruptcy court had accepted the debtors’ position in confirming the plan and that the failure to disclose was not inadvertent.   

The court rejected the argument that the debtors had no motive to conceal the asset since their case was closed without a discharge.   However, the court found that the relevant time frame is when the debtors failed to make the disclosure so that the subsequent failure to receive a discharge was not material.

The Fifth Circuit modified the district court’s order to allow the case to be reopened in the event that the debtor’s bankruptcy was re-opened and a chapter 7 trustee chose to intervene.     

Jurisdiction 

Collins v.Sidharthan (Matter of KSRP, Ltd.), 2015 U.S. App. LEXIS 21807 (5^thCir. 12/15/15)

KSRP owned and operated a hotel in South Padre Island.   It contacted Collins to represent it in making and litigating storm damage claims against insurance companies.    Sidharthan signed a contingency fee agreement on behalf of KSRP.   

However, when Collins attempted to represent KSRP on claims, Sidharthan denied that he was authorized to do so.   Collins sued both KSRP and Sidharthan.    Collins non-suited his claims against KSRP.    Nine days later, KSRP filed for bankruptcy.   Sidharthan removed the state court action to bankruptcy court and asserted an indemnity claim against KSRP.

The bankruptcy court found that it had “related to” jurisdiction because of Sidharthan’s indemnity claim against the estate.    Because the parties did not consent to entry of a final judgment, the bankruptcy court submitted proposed findings of fact and conclusions of law to the district court.   The bankruptcy court found that Collins’s claims were against KSRP and not Sidharthan.   However, since Collins had non-suited the claims against KSRP, he could not recover.   Because KSRP had been dismissed from the state court action and Sidharthan had not filed a claim in the bankruptcy, he did not have a claim.   The district court adopted the bankruptcy court’s findings.

Collins appealed, alleging that the bankruptcy court lacked jurisdiction under 28 U.S.C. §1334.   Collins claimed that the indemnity claim raised by Sidharthan was illusory and should not have conferred jurisdiction on the bankruptcy court.    The Fifth Circuit held that jurisdiction could not be based on the outcome of the case.    There was related to jurisdiction so long as the case could conceivably had an effect on the estate being administered in bankruptcy.   Had the indemnity ot claim been successful, it would have had an effect on the estate.   Therefore, jurisdiction was present. 

Sanctions

Treaty EnergyCorp. v. Hallin (Matter of Treaty Energy Corp.), 619 Fed. Appx. 443 (5^th Cir. 10/27/15).

Debtor sought sanctions after involuntary petition against it was dismissed.    Part of its damage claims included an allegation that it was forced to sell restricted shares at a discount due to the bankruptcy.   The bankruptcy court granted summary judgment finding that the restricted shares sold for the same amount before, during and after the involuntary petition.    Additionally, the debtor failed to establish that it lost an actual sale at a higher price.

Standing

FortuneNatural Resources Corp. v. United States Department of Justice, 806 F.3d 363 (5^th Cir. 11/19/15)

Fortune held a 12.5% interest in a lease operated by ATP Oil & Gas and also filed an unsecured claim in its bankruptcy.   ATP sought to sell substantially all of its assets, but did not seek to sell the lease in which Fortune had an interest.   Fortune objected to the sale.   The bankruptcy court approved the sale over Fortune’s objection.    Fortune appealed to the district court.   However, the sale order was not stayed and the sale closed.   The district court dismissed the appeal on the basis that Fortune lacked standing to appeal and because the appeal was statutorily moot due to the fact that the sale had closed.

The Fifth Circuit affirmed.    The Fifth Circuit held that in order to appeal, the party must be a “person aggrieved,” a standard which requires that the party must be “directly and adversely affected pecuniarily by the order of the bankruptcy court.”    Fortune argued that because prior versions of the sale order arguably provided for payment of decommissioning costs associated with Fortune’s lease that the failure to include this provision in the final order directly and adversely affected its pecuniary interest.    However, the Fifth Circuit held that what was relevant was not whether another possible sale order would have been better for Fortune but whether Fortune could have required payment of the decommissioning costs from the estate if the sale had not taken place.   Because Fortune could not show that it could have accessed the assets of the estate but for the sale order, it lacked standing.   

Surcharge Collateral

SouthwestSecurities, FSB v. Segner (Matter of Domistyle, Inc.). 2015 U.S. App. LEXIS 22787 (5^th Cir. 12/29/15)

 
Trustee attempted to sell property subject to secured creditor’s lien.   However, only offer received was below the amount of secured debt and lender did not agree to sale.    Trustee then abandoned the property.   Trustee sought to surcharge collateral for amounts spent by estate to preserve the property.   Creditor argued that amounts spent while trustee was trying to sell the property were for the benefit of the estate rather than for the creditor and could not be surcharged under 11 U.S.C. §506(c).   Bankruptcy court allowed surcharge as a priming lien.   Fifth Circuit affirmed, finding that creditor’s argument would gut §506(c).   

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Possession: How Parenting Time is Determined in Texas

Originally published by Beverly Via.

This article was written by Hance | Wickham associate attorney Beverly Via.   One of the most important (and potentially contentious) aspects of a divorce settlement has to do with parenting time. The Texas legislature and courts have established that the public policy of the state is that children should have “frequent and continuing” contact […]

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DVAP hosts 11 free legal clinics in March

Originally published by Amy Starnes.

The Dallas Volunteer Attorney Program (DVAP) will hold 11 free legal clinics in March, providing consultation in civil matters to Dallas County residents who meet certain financial guidelines.

Applicants are asked to bring proof of income, identification, and legal papers with them to the clinic.

Schedules and locations are as follows:

East Dallas — Grace United Methodist Church, 4105 Junius St.

• 5 p.m., Thursdays, March 3 and 17

South Dallas — Martin Luther King, Jr. Center, 2922 MLK Blvd., Room 122

• 5 p.m. Tuesdays, March 1, 8 and 22

West Dallas — 2828 Fish Trap Road

• 5 p.m., Thursdays, March 10 and 24

Garland — Salvation Army, 457 W. Avenue D

• 5 p.m., Thursday, March 17

Friendship West Baptist Church, 2020 West Wheatland Road, Dallas

• 5 p.m., Wednesday, March 16

St. Phillip’s Community Center, 1600 Pennsylvania Ave., Dallas

• 5 p.m. Tuesday, March 15

Veterans Resource Center (for veterans and their families only), 4900 S. Lancaster Rd, Dallas

• 2 p.m. Friday, March 4

DVAP is a joint initiative of the Dallas Bar Association and Legal Aid of NorthWest Texas.  For more information on DVAP, click here.

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Warrantless Search Under a Man’s Mattress Held Constitutional

Originally published by Brandon Barnett.

United States v. Garcia-Lopez (5th Circuit, 2016) FACTS: On February 5, 2014, the Wharton County Deputy Sheriff’s Department served a felony arrest warrant on Yonari Garcia at his father’s trailer…

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EEOC to Release Employer Position Statements to All Claimants

Originally published by Georgia Jolink.

At some point, an employer may face the unpleasant task of responding to an EEOC Notice of Charge of Discrimination from an employee or former employee. Until recently, however, a well-drafted position statement often could stop a discrimination charge in its tracks.  A new EEOC policy may change all that.

In an effort to standardize a process that was previously left to the discretion of each EEOC field office, the EEOC now uniformly allows claimants or their designated representatives to request access to an employer’s position statement, with confidential information redacted. Previously four EEOC districts, including Houston, had provided position statements to charging parties upon request.  However, all other field offices provided verbal summaries of the employers’ position statements, rather than a copy of the statements themselves.

The policy will apply to all position statements filed on or after January 1, 2016. Moreover, a claimant who requests a copy of the employer’s position statement will have 20 days to file a response with the EEOC. Interestingly, however, employers will not be allowed access to the claimants’ responses.

So what are the upsides and downsides to the EEOC’s new policy?

Pros:

• The EEOC’s approach will be consistent across all field offices and districts. Thus, employers can now safely presume that a claimant that requests to see the employer’s position statement will receive a copy of the statement.
• A well-drafted position statement demonstrates the exact, non-discriminatory reasons why a claimant suffered an adverse employment decision. This could provide closure for certain individuals and cut down on the number of lawsuits that result from EEOC charges.

Cons:

• The policy provides that only the non-confidential portions of the employer’s position statement will be released to the claimant or his/her representative. It will fall to the EEOC to determine which portions of the statement are “confidential”. This opens the door for an employer’s confidential information to be disclosed, inadvertently or otherwise, to claimants.

• In a bizarre and ironic twist, employers are not entitled to a copy of the claimants’ responses to employers’ position statements. This means that employers may have to wait until the claimant files suit in state or federal court to discover the content of a claimant’s response. The worst case scenario is that employers may never discover what was in a claimant’s response.

Takeaways:  When drafting a position statement, employers should think twice about including information that they do not want to share with the claimant or his/her representative.  We recommend submitting any confidential information separately from the position statement (i.e., in an exhibit or in a separate letter).  In addition, employers should consider that their position statements now have a slightly different audience – the EEOC and potentially the claimant.  This may or may not alter the approach to drafting such a statement, but it is something to keep in mind.

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NTSB is Urging Stricter Rules on Drinking and Driving

Originally published by Bob Kraft.

WTSP-TV St. Petersburg, FL reports that the NTSB is urging stricter rules on drinking and driving. NTSB chairman Christopher Hart “kicked off a SADD conference on Wednesday with a push to lower the legal blood alcohol level nationwide,” the article reports. He said, “Alcohol impairment starts with the very first drink. The NTSB continues to recommend a legal limit of .05 or lower BAC in all states, not the .08 we’ve gotten used to.” Hart’s recommendation has not yet received support from legislators, but some advocates for stricter rules, including MADD, like the idea and are pushing for a built-in device in cars that would detect alcohol in drivers and block the car from starting.

From the news release of the American Association for Justice.

The post NTSB is Urging Stricter Rules on Drinking and Driving appeared first on P.I.S.S.D. — Personal Injury, Social Security Disability. Dallas Texas Lawyers.

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Court Rules In Favor Of An Attorney Regarding Claims Arising From A Conflict of Interest

Originally published by David Fowler Johnson.

In Fitts v. Richards-Smith, three brothers were riding in a car when the car hit another vehicle properly stopped in the road. 2016 Tex. App. LEXIS 1542 (Tex. App.—Texarkana February 17, 2016, no pet. history). The driver was killed and the two other brothers were seriously injured. The family of the killed driver and the two other brothers and their families all hired the same counsel to pursue a claim against the car manufacturer. After counsel was retained, the counsel allegedly did not (1) advise some of the clients that they might have had a claim against the driver’s estate for negligence, (2) disclose a conflict of interest arising from their joint representation of the entire family, and (3) advise them about and preserve the statute of limitations on their viable claims.

Without their attorneys’ knowledge, some of the family made a claim under the driver’s primary liability insurance and settled their claims for around $250,000 (policy limits). They then attempted to collect under an umbrella policy that had around $5 million in coverage, but that carrier denied the claim based on the settlement with the primary insurance carrier and the resulting written release of claims that released the insured. After a settlement with the automobile manufacturer, the family sued their attorneys for breach of fiduciary duty and malpractice, alleging that the attorneys’ malpractice prevented them from recovering under the umbrella policy. The trial court granted summary judgment for the attorneys, and the family appealed.

The court of appeals first addressed whether the family had a breach of fiduciary duty claim. The court held that legal malpractice is not the only cause of action under which a client can recover from his or her attorney. When the facts of a case support claims against a lawyer for something other than professional negligence, the claims may be allowed. However, unless the claim cannot be characterized as advice, judgment, or opinion arising from the attorney-client relationship, the cause of action is for malpractice. The court held that courts do not allow a case arising out of an attorney’s bad legal advice or improper representation to be split out into separate claims for negligence, breach of contract, or fraud, because the real issue remains whether the professional exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise.

The court also held that the question is not so easily determined where there is an allegation of failing to disclose a conflict of interest. While “some Texas courts have recognized that breach-of-fiduciary-duty claims alleging the lawyer obtained an improper benefit from his representation or improperly failed to disclose his own conflict of interest are not professional negligence claims[,] . . . other courts have held the claim is a professional negligence claim if the claim is really that the lawyer’s conflict of interest prevented him from adequately representing the client.” Id. In order to determine whether the breach of fiduciary duty claim in a case is really a malpractice claim, one should look to the difference between the two causes of action. “A cause of action for legal malpractice arises from an attorney giving a client bad legal advice or otherwise improperly representing the client.” Id. On the other hand, “[t]he essence of a breach of fiduciary duty involves the ‘integrity and fidelity’ of an attorney.” Id. Its focus “is whether an attorney obtained an improper benefit from representing a client, while the focus of a legal malpractice claim is whether an attorney adequately represented a client.” Id.

“A breach of fiduciary duty occurs when an attorney benefits improperly from the attorney-client relationship by, among other things, subordinating his client’s interests to his own, retaining the client’s funds, using the client’s confidences improperly, taking advantage of the client’s trust, engaging in self-dealing, or making misrepresentations.” Id. “Unlike a claim for breach of fiduciary duty, legal malpractice is based on negligence, because such claims arise from an attorney’s alleged failure to exercise ordinary care.” Id. The court noted that the family’s complaints supporting their breach of fiduciary duty and malpractice claims were the exact same. The court held that the family’s allegations challenge “the degree of care, skill, or diligence in performing [the] duty to inform appellants about issues that could arise during the representation of multiple clients and [the lawyers’] duty to communicate with and among the clients [they] represented” and were solely legal malpractice claims. Id. The court, therefore, affirmed the summary judgment on the family’s breach of fiduciary duty claim.

The court then turned to the malpractice claim and held that a plaintiff asserting a malpractice claim must prove damages. This is important because a breach of fiduciary duty claim does not require damages; a plaintiff can seek profit disgorgement or fee forfeiture. Regarding damages, the court held that the family’s release was effective to bar their claim against the umbrella policy and held that the attorneys  were not at fault for that. The family also did not provide evidence that they could avoid the release due to a defense of mistake. The court affirmed the summary judgment on the malpractice claim due to no damages – specifically noting that there may have been malpractice.

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What is the real relationship between your ISP and CEG-TEK?

Originally published by houstonlawy3r.

Obviously I am not privy to the contracts signed between CEG-TEK and the internet service providers (“ISPs”).

There are three possible relationships between a copyright enforcement company and the ISP through whom they send DMCA letters informing subscribers that unless they settle the claims against them for downloads that allegedly occurred, they might be implicated in a copyright infringement lawsuit.

1) A RELATIONSHIP OF FORCE AND THREATS AGAINST THE ISP (where CEG-TEK threatens, and the ISP complies),

2) A RELATIONSHIP OF PROFIT FOR BOTH SIDES (where CEG-TEK pays, and the ISP cooperates), and

3) A RELATIONSHIP OF PURE MOTIVE (both CEG-TEK and the ISP hold hands and cooperate, to “fight piracy”).

SCENARIO 1) “A RELATIONSHIP OF FORCE AND THREATS AGAINST THE ISP” (where CEG-TEK threatens, and the ISP complies)

In the first scenario, a company or set of attorneys representing the copyright holders contacts the ISP and informs them that they might be in violation and subject to various lawsuits, fines, and penalties for not complying with the U.S. Digital Millennium Copyright Act, and other statutes (in Canada, the ISPs are literally required to pass on claims to their customers, and this is referred to as “notice and notice”). If the ISPs do not comply, they could be sued for millions of dollars for encouraging piracy on their networks (I am speaking in the vernacular).

ISPs across the US would be included in this first scenario, which explains how many of the bigger ones like Comcast [who I understood were clearly NOT working with CEG-TEK] and those supposedly under the “Six Strikes” system started sending out abridged CEG-TEK infringement notices a few months ago. This is also the reason why Charter subscribers often get their internet suspended with a pop-up notice that they need to click on to acknowledge the claim of copyright infringement against them.

In each of these scenarios, the ISP does the absolute minimum to comply with the claims against their customers, but what you don’t see is a wink and a nod from the ISP that they are likely not going to shut you down or lose you as a customer over this (in other words, your activity violates the ISP’s terms of service “TOS” or “PUA”, but I have not been hearing of anyone’s account being shut down).

UNRELATED, BUT STILL VERY IMPORTANT: I have even heard that ISP customer service representatives actively tell their subscribers [in ignorance of the law] to just delete the infringing content and to ignore the notices.

FYI, look up “spoliation” of evidence, where the victories of the copyright holders in the US against downloaders happen where the copyright holder can prove that the accused defendant wiped his hard drive or deleted the infringing content after being notified by the copyright holder that there was a claim of copyright infringement against the subscriber. Thus, take what the ISP customer service representative says with a grain of salt because even though they might not care that the download happened on their network, there is still the law and the claims against you, and your ISP’s customer service rep is not a lawyer, and they are in no position to be giving you legal advice. Better to deal with or resolve the CEG-TEK claim against you first (if you were going to settle) before wiping the hard drive in fear of having other claims of copyright infringement or lawsuits filed against you (e.g., by other copyright holders such as Malibu Media, LLC, etc.) in the near future.

NOTE: Your relationship with your ISP has ABSOLUTELY NOTHING TO DO with your relationship with the copyright holder (or CEG-TEK) or the claims against you, since the copyright holder(s) still have one or more claims of copyright infringement against you.

SCENARIO 2) “A RELATIONSHIP OF PROFIT FOR BOTH SIDES” (where CEG-TEK pays, and the ISP cooperates)

In this scenario, the understanding is that CEG-TEK is actively paying the ISP for providing their DMCA infringement notices to their subscribers. While in Canada I did not think this happened, as of this morning, I now believe that Shaw Communications Inc. (a.k.a. Shaw Cablesystems G.P., or “sjrb.ca”) is working with CEG-TEK in a “for profit” relationship. I obviously cannot prove this, but from what I understand is about to happen with their subscribers [who will shortly be receiving multiple letters of infringement sent to them at the same time], this usually happens in a “for profit” relationship where the ISP is being compensated for the time they spend complying with the copyright infringement requests.

A perfect example of displaying the “for profit” motive of the ISPs in the U.S. (in these two cases, forced upon CEG-TEK to their frustration) is seen in the past behavior of both Comcast and AT&T. A few years back, to handle the increasing number of subpoena requests (at the time, as a result of John Steele / Prenda Law Inc. lawsuits and the increasing number of bittorrent lawsuits across the U.S.), Comcast opened up a “subpoena compliance” department in Morristown, NJ and staffed [at the time] twelve new hires just to handle the new subpoena demands from the lawsuits. Then in the lawsuit filings, it came out that Comcast was asking for something like $25-$50 per IP address lookup or subpoena, a service that in the past was free. Similarly, for those who know anything about Ira Siegel, the name that shows up on the bottom of every single CEG-TEK DMCA notice, he absolutely refused to work with AT&T because they would charge $200 per subpoena or IP address lookup, something at the time I heard that he found infuriating. Thus, you’ll notice that even today, you’ll never find a recipient of a CEG-TEK violation notice being a subscriber to AT&T, but as you can see, there is a profit motive of the ISPs to benefit financially from the growing influx of copyright infringement claims against their subscribers.

NOTE: I understand that the relationship between Charter, Centurylink, Suddenlink, Cox, sometimes Comcast, [and most recently in Canada, now Shaw Communications] fall under this scenario. The reason I am of this understanding is because of the advanced information CEG-TEK is able to identify about that subscriber, sometimes including the subscriber’s name (I have my own understanding as to how they get this from the geolocation), the geolocation itself of where the downloads occurred, along with other “past downloads” that allegedly happened weeks or months in the past at that same location, or by that same subscriber (based on a list of old “IP addresses” provided to CEG-TEK so they they can correlate that list against their own bittorrent records).

SCENARIO 3) “A RELATIONSHIP OF PURE MOTIVE” (both CEG-TEK and the ISP hold hands and cooperate, to “fight piracy”)

This is the “kum baya” view of piracy, where CEG-TEK approaches the ISP and tells them that they want to fight piracy. They show statistics of how when other ISPs “joined forces” with them and started sending out the DMCA violation settlement letters, piracy dropped significantly on that ISP’s network.

The ISP then sees this information and also decides to “sign on” with CEG-TEK to help them forward their settlement demand letters to their subscribers with the hopes of diminishing the amount of “piracy” of copyrighted content that occurs on their networks.

NOTE: In this last scenario, you won’t find a profit motive by the ISP, and this is where I believe they get colleges and universities to sign on with them to fight piracy on their networks.

In sum, whatever the relationship or the scenario between CEG-TEK and the ISP, in the end, the subscriber is the one who suffers because it is THEY who receive the “settle or else my client will sue you as a John Doe Defendant in a U.S. federal court lawsuit for copyright infringement.” I have personally been in conversations with CEG-TEK where they were excited that piracy was actually going down on a particular ISP’s network — so apparently they do believe in what they do — but then again, whatever I feel about piracy and how the copyright laws should be changed to match today’s internet generation, in the end, it is the college students, their parents and landlords, the young graduates who are trying to find a job, and those who are lured in by the adult content which is so addicting, widely available, and prevalent on the internet who fall prey to the tactics of the copyright holders, and for this reason, I still believe the copyright holders should focus their efforts on those SELLING FOR PROFIT, PUBLICLY DISPLAYING, POSTING OR INITIALLY SHARING the copyrighted content, and not on those subscribers who have no profit motive, who click on a link to view the copyrighted content.

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CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

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NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

Filed under: Copyright Enforcement Group (CEG-TEK), Copyright Trolls, DMCA Scare Letters, Geolocation of IP Addresses, Ira Siegel, Peer-to-peer, Torrent Tagged: CEG-TEK, cegtek, Copyright Enforcement Group, DMCA letter, Ira Siegel, speculative invoicing

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