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Estate Planning in the Era of Covid-19

By Shannon A. Jung, Attorney

The global Covid-19 pandemic has forced many of us to confront that distressing “what if” question as we come face-to-face with mortality. Inevitably we think about what happens to our loved ones after we are gone. Although this process can be stressful in such uncertain times, one practical thing people can do right now is to channel that anxiety into estate planning. It can be extremely comforting to know that at least one thing is in your control. And, considering that most people are spending much more time at home, now is a good time to sit down and think about building your estate plan.

The following are common issues and questions that arise during that process:

What are the benefits of having an estate plan?

Most importantly, estate planning gives you control over your assets after your death. Additionally, proper estate planning can save your loved ones money and the headache of trying to figure out what assets you have and where they are located. There are often tax advantages for you during your lifetime and for your beneficiaries after your death. A common misconception to address is that assets do not simply “pass” to your heirs if you die without an estate plan. Generally, if your estate is over $166,250 (as of 2020), it must go through probate before it can be distributed to your heirs.

A Trust vs. a Will

Although both a trust and a will are legitimate estate planning tools, there are key differences to be aware of. Based on your specific needs and your estate, one may be preferred over the other. The basic difference is that a trust is designed to keep your estate out of the court system. A will, however, must generally be presented for probate, unless your estate is under a certain amount, as previously noted. Probate is generally a lengthy and expensive process. However, one upside of probate is that it is court-supervised, which may be a benefit if you anticipate disputes between beneficiaries.

I don’t own a lot of things. Why should I bother estate planning?

Contrary to popular belief, estate planning can benefit anyone, no matter the size of the estate. As noted above, it gives you a say in how your estate is distributed, even if that estate consists of a house, personal property, or money under your mattress. Having a choice in where your property ends up is not only empowering but necessary if you want it go to a specific person or organization. Additionally, estate planning doesn’t have to cost a lot. Many people do not realize they can quickly make a will from their own home, as long as certain requirements are met. Additionally, California offers numerous ways to designate beneficiaries on your home and bank accounts without ever drafting a will or trust.

I have an estate plan already. Should I update it?

If you already have an estate plan, first congratulate yourself on your forethought. Second, think about reviewing your plan every five years or so to make sure it is up to date with current state and federal laws. For instance, the gift and estate tax exemption is $11.8 million in 2020, meaning that your estate will only owe taxes if it is over that amount. However, that exemption is set to expire in 2025, and we do not know what the exemption amount will be after that. It is also advisable to revisit your plan in times of crisis and uncertainty, such as the current pandemic, to make sure it still reflects your priorities.

Herrig & Vogt understands that this time is fraught with uncertainty. Know that you are not alone. But also know that there is something in your control, even during a global pandemic. You may be feeling overwhelmed with the deluge of news, state and federal orders, relief bills, and medical advisories. Our professionals are here to help you sort through all the noise so you can identify what is most important to you. Moreover, our firm has the capabilities to allow you to do the majority of your estate planning from the comfort of your own home. Please reach out to us today to discuss your estate planning questions and needs in this unprecedented time.

Do I Have a Personal Injury Case?

Male motorist experiencing neck pain after car crash

Whether or not you have a personal injury case and can recover compensation depends upon the ability of your personal injury attorney to prove that someone was at fault in causing you to be injured. Personal injury cases can arise out of a variety of circumstances and are not limited to just car accidents, or slip and falls. 

Though the best way to find out about your specific rights is to speak with an attorney whose practice focuses on personal injury law offers, the following information will give you a better understanding of personal injury cases in general.

Person acquiring a personal injury by being hit by car

 

What is a personal injury case?

An injury caused by the negligence or by the intentional conduct of another party may give rise to a personal injury case, but there needs to be more in order for you, as the injured party, to receive compensation. The following are elements that must be present for there to be a personal injury case:

  • There must be evidence proving that another party violated a duty of care by acting in a manner that was negligent, careless or reckless. For instance, all drivers owe a duty to others using the roads to obey the traffic laws, maintain control over their vehicles and keep a proper lookout for other users of the roads and highways. Texting while driving would be careless and considered negligent conduct breaching the duty of care.
  • The breach of duty must be the cause of the injuries you suffered. If texting causes a motorist to crash into you, the negligent conduct caused the accident. However, if you smashed into the rear of a car stopped at a red light, the fact that the driver of the car you hit was texting would not be the cause of the crash and the injuries you suffered.
  • You must have suffered damages as a result of the accident. A car crash that leaves you with a slight cut on the hand that did not require medical treatment would not give rise to a personal injury case.

Damages are either economic or noneconomic. Economic damages are easier to calculate because they represent actual expenses, including medical bills, lost earnings, expenses related to rehabilitation and physical therapy, and the cost of medical equipment, such as crutches and canes. Proof of economic damages usually takes the form of bills and statements.

Noneconomic damages can be more difficult to place a value on because they include pain and suffering, diminished quality of life, scarring and disfigurement and physical impairment. Some states place a cap on the amount of noneconomic damages courts may award in personal injury claims based upon medical malpractice. For instance, the cap in California is $250,000. 

Person under emotional distress

 

Recovering damages for emotional distress

Proving emotional distress or mental harm requires evidence that the defendant, the party causing the harm, intentionally engaged in outrageous conduct or showed a reckless disregard for the emotional harm the victim could suffer from the outrageous conduct. Sexual assault would be an example of outrageous conduct that the perpetrator was intentionally engaged in against a victim. The testimony of medical professionals treating you for emotional distress would be needed to support a claim for damages.

Imposing liability: Who is at fault?

Some personal injury cases may involve multiple parties being at fault due to their relationship to each other. For instance, the occupants of a car injured when the driver of a commercial truck failed to obey a stop sign and slammed into them could sue the truck driver and the company for whom the driver worked under the legal theory of vicarious liability.

Insurance companies that issue auto or property insurance policies provide coverage to their insureds, but they are not the party sued in a personal injury case. Their function is to provide policyholders with a defense and pay claims if the insured is found at fault.

Average settlement in a personal injury case

Every personal injury case is different, so it is impossible to arrive at a figure representing an average settlement. For example, two passengers in a vehicle each suffer a concussion. The cases might appear to be similar, but the fact that one of the victims continues to suffer from headaches and dizziness a year after the injury would weigh heavily in favor of a higher settlement over the other passenger who recovered within a week with no lingering effects.

Female personal injury lawyer giving thumbs up

 

Choosing the right personal injury attorney

If you have been injured through the fault of another party, you need the services of an experienced and skilled personal injury attorney. Reputable personal injury attorneys take the time during the initial consultation to get to know about you and the accident that caused you to be injured. They do not try to pressure you into retaining them to file your claim for compensation or trick you with promises of a quick settlement.

Only about 4% of personal injury cases ever go to trial, but most are settled before that point. A good personal injury lawyer knows when an offer does not fairly compensate you. Attorneys who focus their practices on personal injury cases achieve settlements by having established a reputation for being prepared to take a case to trial if the settlement offer fails to fairly compensate their client. You want the attorney handling your personal injury case to be both a skilled negotiator willing to commit the time and effort to reach a settlement as well as someone who is not reluctant to take a case to trial if doing so will achieve a more favorable outcome.

What is The Personal Injury Lawsuit Process?

Injured woman signing documents for lawsuit

No one wants to become involved in a lawsuit, but if you have been injured in an accident caused by negligence or by the intentional conduct of another party, you might not have a choice. A personal injury lawsuit may be necessary to enable you to recover compensation for your medical care, lost earnings, and pain and suffering.

The following information about the process should help you to have a better understanding of what to expect while pursuing a personal injury claim.

Injured person on ground gripping arm

1. Document the accident

What you do at the scene of an accident can affect what happens in your personal injury lawsuit. You should begin preparing for your claim immediately after the accident occurs. Documenting the accident preserves essential information your attorney will need, including:

  • The names and contact information of other parties involved in the accident.
  • Photos of the accident scene and of the injuries you suffered.
  • Names and contact information of any witnesses to the accident.

2. Visit a doctor

In some cases, an injured party is immediately treated on the scene of an accident by emergency responders and possibly transported to the hospital for further evaluation. Even if you are not taken to the hospital by ambulance, you should:

  • Immediately see a physician for an evaluation and treatment of your injuries. 
  • Document all visits to your doctor and any treatments for injuries related to the accident.
  • Make a list to give to your lawyer of all health care professionals you see in connection with your injuries and any medications prescribed by them.

3. Consult with a personal injury attorney

You should meet with a personal injury attorney as soon after the accident as possible. Bring all of the reports, pictures, and information you gathered at the time of the accident for your attorney to review.

An experienced personal injury attorney will use the first meeting with you to ask questions about the accident and your injuries to help determine if there are grounds to pursue a claim. The consultation, for which most personal injury lawyers do not charge a fee, provides you with the opportunity to ask about the attorney’s experience and success rate handling cases similar to your own. 

Reputable attorneys will not pressure you or make promises of huge settlements to entice you into retaining them. Instead, they want you to trust in their ability to provide outstanding service and to be comfortable about your decision to retain them.

4. Investigate and contact the insurance company

An investigation into the circumstances of your injury will be conducted by your personal injury attorney. The evidence gathered will give the attorney a clearer understanding of the party at fault, the extent of your injuries, and the best strategy for obtaining the compensation you need and deserve. The length of time it takes to complete the investigation can vary, depending upon the availability of reports and witnesses.

The attorney will keep you informed about the results of the investigation and discuss strengths and weaknesses in the evidence supporting your claim for damages. It is at this stage that your attorney will contact the company insuring the other party to discuss the claim and let them know that you have legal counsel.

Injured person shaking hands with a person injury attorney

5. Efforts to settle out of court

Settlement negotiations in personal injury cases are an ongoing process. Once your lawyer obtains copies of your medical records to fully understand the extent of your injuries, negotiations will take place with the insurance company and the attorney defending the other party. 

An attorney dedicated to looking out for your best interests might hold off on making a settlement demand until you have recovered sufficiently from your injuries to have reached a point of maximum medical improvement. Settling a case too soon could fail to take into account future medical treatment. 

Your attorney will keep you informed about negotiations and won’t agree to a settlement without your approval. Settlement discussions go on for as long as both sides believe there is hope of a resolution.

6. File a lawsuit with the court

The filing of a lawsuit does not mean your case will go to trial and not be settled. The majority of personal injury cases are settled before trial, but there are time limits for commencement of a lawsuit, referred to as the statute of limitations. For instance, the California statute of limitations for personal injury lawsuits is only two years. Failing to file a lawsuit before expiration of the statute of limitation could cause you to lose the right to sue.

Following are the stages of a personal injury lawsuit:

·        Initial pleadings: Your attorney will prepare and serve a complaint on the other party. The complaint contains the allegations upon which your claim for damages is based. The other party, referred to as the “defendant,” has 30 days to serve an answer admitting or denying the allegations. How much time is spent on this stage of the lawsuit depends upon how long it takes for your attorney to prepare and serve the complaint, but experienced personal injury lawyers should be able to get a complaint completed within a matter of days once the decision is made to start a lawsuit.

·        Discovery: Either party to the lawsuit may demand additional information from the other. Discovery takes the form of documents, testimony during depositions, reports from doctors and other experts, and the names of witnesses in the position of the opposing parties. The discovery stage can take several months to complete.

·        Motions: Motions may be used by either party to ask the court to do something. For example, attorneys can ask the court to order a party to comply with a demand for discovery or risk sanctions, including dismissal of a claim or a defense for failure to comply. The party served with a motion has 14 days to serve written opposition to it and the other party has 5 days to respond to the opposition papers. 

·        Mediation: The process of mediation may take place at any time upon request of the parties. A neutral mediator hears from the parties and their lawyers and attempts to negotiate a settlement. Mediation is not binding, which means the mediator cannot force a party to accept a particular result. A mediation session could take several hours with cases usually requiring only one session to determine if the case can be settled.

·        Trial: It can take a year or more for a lawsuit to reach the trial stage. The plaintiff, the party making the claim, presents evidence through documents and witnesses to support the claim. The defendant has the opportunity to present evidence in opposition to the claim. Once each side has completed presenting evidence and the attorneys present closing arguments, the judge or jurors deliberate and reach a decision known as a “verdict”.

A verdict after trial does not mean the case is over. The losing party has the right to make post-trial motions asking the judge presiding over the trial to set aside or alter the verdict. Either party also has the right to file an appeal asking for review by an appellate court.

The importance of finding the right lawyer

The attorney you choose to handle your claim for personal injuries plays an essential role in the outcome. A skilled and experienced attorney understands the process of negotiating to achieve a successful settlement, but has built a reputation as someone who is prepared to take a case to trial in order to achieve an outcome that is most beneficial to you. Before you decide on the attorney who will represent you, be sure to compile a list of questions to ask the personal injury lawyer.

10 Questions To Ask A Personal Injury Lawyer

Asking a personal injury attorney questions

When you’ve been injured, finding a good personal injury attorney can feel like a daunting task. This is especially true when you see advertisements for personal injury lawyers everywhere you go in California. With the right information, you can narrow the field to the attorney best suited to handle your case and get you the maximum compensation for your injuries.

A face-to-face meeting with a personal injury attorney is a good place to start. Use the following 10 questions to ask if a lawyer has the background, experience, skills and other qualities required to provide outstanding representation.

Asking questions to a person injury attorney

1. How will you make a difference in the outcome of my personal injury case?

Personal injury lawyers handle claims on behalf of people injured in accidents or incidents caused by the careless, reckless or intentional acts of another party. The insurance company for the party whose negligence caused you to be injured has experienced claims adjusters, investigators and defense lawyers committed to protecting the insurance company’s money by paying you as little compensation as possible.

An experienced personal injury lawyer has the necessary skills to take on claims adjusters and insurance company defense lawyers to give you the best chance at recovering the compensation to which you are entitled. Your lawyer knows how to gather and present to prove the fault of the other party and establish the extent of the injuries it caused you to suffer.

2. How long have you been in practice?

Though time alone doesn’t make for a good attorney, it’s helpful to know how long your prospective lawyer has been practicing. Whether they are fresh out of law school or they’ve been practicing for decades can be a factor in their suitability.

Additionally, the number of years that an attorney has been in practice is not as important as the number of personal injury cases they have handled during their years of practice. For instance, an attorney whose practice sees one or two personal injury cases each year will not have developed the same skills, knowledge or ability as someone handling significantly more personal injury cases on a daily basis.

What is also important is the reputation the attorney has developed with judges and other lawyers as well as with former clients. One way to find out what clients think about the lawyer is through websites on which people write and post reviews. Google and Yelp offer reviews written by consumers on a wide variety of services. A reputable website that limits its scope to attorneys and law firms is Avvo, where you can find consumer reviews of attorneys practicing in your community.

Another excellent indicator of an attorney or law firm’s reputation within the legal community is the peer-review ratings from Martindale Hubbell. The company asks attorneys practicing within a geographic area to anonymously rate the legal ability and ethical standards of other attorneys. The highest peer-review rating is AV-Preeminent, which indicates the lawyer or law firm has been recognized for exhibiting outstanding legal ability and possessing the highest ethical standards.

3. Does your practice focus on personal injury cases similar to mine?

You want the attorney you choose to not only have significant experience handling personal injury cases but to have experience handling personal injury cases similar to your own. An attorney may be a veteran personal injury lawyer when it comes to construction accidents but a complete newcomer to the area of dog bites. 

A personal injury attorney must have knowledge of the law as it applies to the various ways in which a claim may arise, including:

·        Bicycle accidents

·        Construction accidents

·        Car accidents

·        Drunk driving accidents

·        Distracted driving accidents

·        Fires and explosions

·        Dog bites

·        Truck accidents

·        Slip-and-fall accidents

·        Hit-and-run accidents

A personal injury lawyer who has handled other cases arising under circumstances similar to your own may have a better understanding of the law and the evidence needed to prove a claim for damages. For example, an attorney who handles construction accident claims on a regular basis would know that multiple parties could be at fault and must be included in a lawsuit.

4. What is your success rate?

Though it is an important question, the answers you receive to this question could be misleading. A law firm that only focuses on settling cases might claim to have a very high rate of success, but some settlements could be for less than the compensation the clients could have received had their cases gone to trial. Be sure to ask about how the success rate is determined (is it simply cases settled, or cases won at trial), that way you have a clear picture of what the attorney’s previous outcomes have been.

The majority of civil cases in California, including personal injury claims, are resolved before they go to trial according to data compiled by the state. You want an attorney who is not only a good negotiator but also has a record of successfully taking cases to trial when a fair settlement offer is not forthcoming from the insurance company.

5. How much will you charge to represent me, and when do you get paid?

Most personal injury lawyers work on a contingency fee arrangement, under which they are paid a percentage of the amount recovered through settlement or verdict after trial. The percentage is determined between the client and the attorney, so ask the attorney to show you the fee agreement, including the percentage you will be charged.

Personal injury attorneys usually get paid after a case is concluded through settlement or verdict after trial. Ask to see a copy of a typical retainer agreement spelling out the fee arrangement.

6. Who is responsible for costs and expenses related to my case?

The costs for expert witnesses, investigators, depositions and other expenses related to the personal injury litigation are incurred regardless of whether you win or lose. Responsibility for payment of those costs must be spelled out in the retainer agreement with your lawyer.

The agreement should clearly state how the costs of litigation are handled if you win. For example, the retainer agreement should state whether the contingency fee is calculated based upon the recovery before or after deduction of litigation costs.

7. Who will be responsible for handling my case if I choose your firm to represent me?

The attorney you meet with might have primary responsibility for your case, but other personnel might be the ones handling it on a day-to-day basis. It is customary for associate attorneys and paralegals in a law firm to work on a personal injury case performing various tasks, including interviewing witnesses, obtaining medical records and other documents, and preparing pleadings and other documents for court.

Ask the lawyer to explain the process the law firm uses to assign tasks related to your personal injury case. You should be given the name of at least one contact person who will be available to answer routine questions about the case when your attorney is unavailable.

8. Will I need to take my case to trial?

Each case is different, so it may be difficult for the attorney to give you a definitive answer to this question. However, the attorney should be able to discuss his or her prior experience settling cases similar to yours in advance of trial.

9. How much is my case worth?

It is difficult for an attorney to accurately evaluate a claim for personal injuries during the initial meeting with a prospective client, but experienced attorneys should be able to give a value range for cases similar to yours that have settled or gone to trial.

10. What documents will I need for my case?

The documents your attorney will need depend upon the type of case. For the first meeting, you should bring copies of accident reports, names and addresses of treating physicians and hospitals, and any other documents containing information about the accident and the injuries that you have in your possession. The lawyer you select to handle your case will obtain additional records, documents and information on your behalf as the case progresses.

Person with a lightbulb above their head

Do your homework to find a personal injury lawyer

Do your homework before choosing a personal injury attorney. Don’t pick a lawyer solely based upon the recommendation of a friend, relative or because of an advertisement. The best method for finding a lawyer that you trust and feel confident can give you the best representation is through a face-to-face meeting.

New Attorney: Shannon A. Jung

Shannaon-A-Jung

Herrig & Vogt is excited to announce the addition of a new associate attorney, Shannon A. Jung.

A Nor-Cal native, Ms. Jung grew up in the Bay Area and attended UC Berkeley before moving to New Orleans to attend law school at Loyola. She is a firm believer in the power of the study abroad experience and spent a month and a half at the University of Amsterdam. They had classes four days a week, and often took “field trips” around the city – one of which included a visit to observe criminal proceedings in action at the International Criminal Court in The Hague.

She also participated in the first Law & Technology clinic at Loyola in New Orleans, which she credits not only with giving her very practical real-world training, but also for keeping her focus on the ever-changing landscape of legal tech. That year their project was to create some piece of technology (an app, a website etc.) to accompany criminal defense. Ms. Jung and her partner created a web application that would ask the user questions to determine if they were potentially eligible to have their criminal conviction expunged (a notoriously tricky and complex process).

“Technology is an inevitability of our society and I want to learn as much as I can about it,” Ms. Jung said. “I just really wanted to be a part of whatever was going on. This is cool. It’s new. It’s forward thinking. Especially in the law, because the legal field can be so stagnant.”

After law school, Ms. Jung worked in the Louisiana state court system – and during her time as a staff attorney at the Louisiana Supreme Court she received a call from Judge Paul A. Bonin (whom she’d met previously at a state bar function). He asked her to stop by his office, which just happened to be one floor up in the same building. She’d made such a good impression on him that he offered her a job as his clerk at the court of appeals right there and then. About a year and a half later, Judge Bonin decided to move to the criminal district court, and Ms. Jung moved with him.

Of her time with Judge Bonin, Ms. Jung fondly recalls the “legal treasure hunts” he would often send her on – adventures that had her heading to the library to scour through obscure legal documents for argumentative gold.

After about 9 months at the district court, she and her husband decided to make the move back to California.

Her husband is a chef de partie at Sacramento’s much lauded The Kitchen restaurant, which recently found itself on USA Today’s “30 Best Restaurants in America” list. He puts those culinary skills to great use at home too. Ms. Jung is particularly partial to his Italian food – his recent scratch-made Genovese ravioli was a hit, as is his now-perfected focaccia recipe. Their young daughter is only just recently venturing into solid foods, but you can bet there’s not a Gerber baby food jar in sight with such a great cook around the house.

Ms. Jung enjoys practicing yoga and Transcendental Meditation, reading a variety of fiction books (if not actually finishing them), and watching Sci-Fi.

General Contractors: Serve a Preliminary Notice or Lose Your Rights

General Contractors Construction Law

A preliminary notice is essential to preserve the rights and remedies afforded to California contractors in disputes with owners for unpaid amounts.  Without a preliminary notice, contractors lose their statutory mechanic’s lien and stop notice rights, precluding any foreclosure on that lien to satisfy payment.  Losing these powerful rights forces contractors to pursue unsecured breach of contract claims against an owner, which could languish in court for years with little chance of success.

This is a notable issue because, although the law changed in 2012, some general contractors may still be unaware that California law requires them to serve a preliminary notice on the construction lender in order to preserve their mechanic’s lien and stop notice rights.  Prior to 2012, it was clear that subcontractors were required to serve preliminary notices on owners, general contractors, and construction lenders in order to assert valid mechanic’s lien and stop notice claims, and subcontractors became accustomed to doing so. It was unclear, however, whether the rule also applied to general contractors, because they were expressly exempted from serving preliminary notices by Civil Code section 3097(a), even though Civil Code section 3097(b) appeared to qualify that exemption.  Despite the ambiguity, general contractors, for the most part, concluded that they did not need to serve preliminary notices in order to assert valid mechanic’s lien and stop notice claims.

This is no longer the case.  In 2012, the California Legislature amended the preliminary notice statutes, in part to address the ambiguity found in Civil Code section 3097.  The Legislature removed the ambiguous language which appeared to exempt general contractors and clarified that a general contractor is, in fact, required to give preliminary notice to a construction lender on a private work.  (See Sen. Com. On Judiciary, Analysis of Sen. Bill No. 189 (2009-2010 Reg. Sess.), p. 4, as amended Dec. 15, 2009.)

The current law, therefore, requires any contractor in a direct contractual relationship with an owner to serve a preliminary notice on the construction lender as a necessary prerequisite to a valid mechanic’s lien or stop-payment notice claim.  As such, all general contractors should prioritize service of a preliminary notice to the construction lender at the outset of each project to preserve their rights and remedies under California law.

If you have any issue related to a mechanic’s lien or stop notice, contact us to schedule a free case evaluation.

Contact us online or call (855) 982-7182 to schedule your free consultation with an experienced construction lawyer who can help with all matters related to a preliminary notice.

Resolution: Get Organized

2019-New-Year's-Resolutions

 

Popular New Year’s resolutions for Americans don’t seem to change a whole lot through the years. You’ll often see things like “lose weight” and “save more money” on resolution lists. Another common trend for resolutions is getting organized.

Now is the time to go beyond just cutting back the clutter, and start planning for your future and protecting your family. Here are a few organizational goals you can set for yourself to accomplish this in the New Year:

  1. Find out if a trust is right for you – and if so, what type
  2. Write or review/update your will
  3. Complete an Advance Health Care Directive
  4. Change or update your beneficiaries
  5. Draft a Power of Attorney
  6. Digitize your important documents

This list may seem daunting and you may just need to understand what estate planning documents you already have or might need for the future. Get professional help, like the experienced estate planning team at Herrig & Vogt, LLP, to finally tackle those big to-dos.  

Make an appointment for a free consultation to discuss your inquiries or needs for estate planning.

California Consumer Privacy Act of 2018

Consumer-Privacy

By: Lindsay Volle, Attorney

The California Constitution grants a right of privacy. And now, with the passing of AB 375, also known as the California Consumer Privacy Act of 2018, this right to privacy has evolved to meet the needs of consumers in the modern world of data collection.

With every web search, companies collect analytics and gather information about consumers. Last week I searched for plumbers on the internet; this week I saw two advertising banners for plumbers in my area. Somewhere in the “world wide web” it has become known that I am in need of a plumber and that information is being used to create personalized, targeted advertising.

But what if I want to opt out? Beginning January 1, 2020, The California Consumer Privacy Act of 2018 will allow me to do so. The text of AB 375 provides “it is the intent of the Legislature to further Californians’ right to privacy by giving consumers an effective way to control their personal information, by ensuring the following rights:

(1) The right of Californians to know what personal information is being collected about them.

(2) The right of Californians to know whether their personal information is sold or disclosed and to whom.

(3) The right of Californians to say no to the sale of personal information.

(4) The right of Californians to access their personal information.

(5) The right of Californians to equal service and price, even if they exercise their privacy rights.

Great news for consumer protection, but what does this mean for California businesses? That depends. For-profit businesses that collect or receive consumer information and who meet any of the following criteria will be required to comply with the California Consumer Privacy Act of 2018: 

  • Has annual gross revenues in excess of $25 million
  • Annually buys, receives for the business’ commercial purposes, sells or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households or devices
  • Derives 50 percent or more of its annual revenues from selling consumers’ personal information.

..

Based on the above criteria, it might seem that this new law only applies to “big” businesses with “big” marketing departments. However, the CCPA has practical implications for even small businesses who are marketing on the internet. For instance, Facebook and Google ads are popular marketing tools. But these ads use consumer’s collected information and data to target an audience. If more than 50,000 people see your ad, suddenly your business is subject to the law.

So if the law applies – what does this mean for my business? If your business activity would trigger the CCPA, your business will be required to:

  • Disclose to a requesting consumer the categories and specific pieces of personal information the business has collected; 
  • Inform consumers, at or before the point of collection, the categories of personal information to be collected and the purposes for which the categories of personal information shall be used;
  • Upon receipt of a verifiable consumer request, disclose and deliver (free of charge) the personal information as requested by consumers.

Additionally, if your business sells personal information to third parties, the consumer will have the right to opt out. A clear and conspicuous link titled “Do Not Sell My Personal Information,” will be required to enable consumers to easily opt out of the sale of the consumer’s personal information.

Businesses are not required to retain any personal information collected for a single, one-time transaction if such information is not sold.

Enforcement of this new law will vary depending on the extent or severity of the infringement. However, the text of the law authorizes broad authority for the Attorney General to prosecute actions against violations.

Easements and Boundary Disputes in California

Neighbors Discussing Property Boundaries

By Anthony P. Fritz, Herrig & Vogt, LLP

 

Easements

An easement is a right to use another person’s land for a specific purpose. A right of way easement gives the right to cross over another owner’s land, typically to access to a public road. Utility easements for water pipes, sewer pipes, and electric lines give utility companies the right to access land for installation, maintenance, repairs and upgrades to services. An easement may benefit a specific person or persons, or it may benefit a particular piece of land.    

Express easements are created through a deed or other document that describes the use. The scope of an express easement is determined by terms of the document creating the easement. An easement affecting real property typically transfers with the property when it is sold.

The document creating an easement should be recorded with the recorder for the county where the property is located to give future buyers notice of the easement.  

An easement by necessity arises by operation of law when (1) there is a strict necessity for a right-of-way, such as when the claimant’s property is landlocked and (2) the landlocked property and the adjacent property with street access were originally owned by one person.    

A prescriptive easement may arise when a person uses another’s person’s property and the use is notorious, adverse, continuous and uninterrupted for at least five years.  “Adverse use” means that the owner has not expressly consented to the use. “Continuous use” means use that is as frequent as appropriate given the nature of the use and the character of the land.    

In Aaron v. Dunham (2006) 137 Cal.App.4th 1244 a private road was built that went from a public street across two adjoining parcels to a third property.   For many years owners of the middle parcel used the road across the adjoining parcel to access the street without the adjoining owners’ permission.  The street parcel owners informed the middle parcel owners that they could no longer use the road across the street parcel, and the middle parcel owners sued to establish an easement.  The appellate court held that the owners of the middle parcel held a prescriptive easement giving them the right to use the road on the street parcel to access the street because prior owners of the middle lot had previously used the road for street access without the adjoining owners’ permission for more than five years.

An owner can prevent a prescriptive easement by periodically interrupting the adverse use, or by posting at each entrance to the property or at intervals of not more than 200 feet along the boundary, a sign substantially reading: “Right to pass by permission, and subject to control, of owner: Section 1008, Civil Code.”  Aaron v. Dunham holds that signs with the language required by Section 1008 will not prevent a prescriptive easement if they are posted by someone other than property owner or the owner’s authorized agent.   

Maintaining the Easement.  Let’s assume that multiple landowners agree to establish right of way easements over their properties giving each access to a public street. Who pays the cost of building the private road and maintaining the road after it is built?  It is a good idea for the owners to agree on cost allocations when they agree to the easement, and to include a road maintenance agreement with the recorded easement in order to avoid future disputes over the costs of maintaining or repairing the road.

Civil Code section 845 addresses the allocation of maintenance costs among easement owners. Section 845(a) provides that the owner of a private right-of-way easement or the land attached to the easement shall maintain it in repair. Section 845(b) provides that in the absence of an agreement, the cost of maintaining or repairing the easement “shall be shared proportionately to the use made of the easement by each owner.”  A property owner is only required to contribute to the maintenance of the segment of the right of way lying between his or her driveway and the public road. Healy v. Onstatt (1987) 192 Cal.App.3d 614.  It may also be proper to adjust maintenance costs between vacant parcels and parcels with occupied residences to reflect each owner’s actual use of the easement.  Id.   Civil Code Section 845(c) describes remedies that are available if an owner refuses to pay his or her proportionate share of easement maintenance or repair costs.     

Boundary Disputes

The Agreed-Boundary Doctrine.

In 1864 the California Supreme Court invoked the agreed-boundary doctrine to resolve a lot line dispute between adjoining landowners.  In 1847 L.W. Boggs and G.W. Harrison each acquired adjoining one square mile tracts of land from Salvador Vallejo, but the descriptions of each parcel in the two grant deeds were ambiguous.  

Harrison later sold three smaller adjoining parcels in his tract to others.  In 1854 the purchaser of a ten acre tract built a fence around the perimeter of what he believed was the boundary of his land.   Later surveys determined that that the actual boundaries of the ten acre parcel were significantly different from the boundaries shown on earlier surveys, and litigation ensued.  In Wiley Sneed v. J.W. Osborn (1864) 25 Cal. 619 the Supreme Court held “when the owners of adjoining lands have acquiesced for a considerable time in the location of a division line between their lands, although it may not be the true line according to the calls of their deeds, they are thereafter precluded from saying it is not the true line.”  In Wiley Sneed, the Court invoked the agreed-boundary doctrine in deciding that the fence around Sneed’s land established the parcel’s boundaries because the legal descriptions of Sneed’s and the adjoining parcels were ambiguous, and the other owners waited too long before taking steps necessary to establish their actual property boundaries.     

The agreed-boundary doctrine has fallen into disfavor, as overtime land surveys have established accurate property boundaries throughout California.   In Bryant v. Blevins (1994)  9 Cal.4th 97 the California Supreme Court held that where property boundaries are established by publicly recorded surveys, an owner may not alter the dimensions of his land merely by building a fence on his neighbor’s land.   The Court notes that the agreed-boundary doctrine “encourages a lack of due diligence on the part of property owners by tempting them not to consult legal descriptions in an effort to reach an amicable resolution of their disputes, and instead induces property owners to resort to the courts to resolve their boundary disputes”.  

Publicly recorded land surveys have not eliminated all boundary disputes, however, and courts now invoke the “relative hardship doctrine” to resolve similar boundary disputes between adjoining landowners.   

The Relative Hardship Doctrine.

California courts apply the relative hardship doctrine to fashion appropriate remedies where an owner builds a structure that encroaches on another’s land.  Once the court determines that a trespass has occurred, it conducts an equitable balancing to determine whether to grant an injunction prohibiting the trespass, or whether to award damages.  Under the relative hardship doctrine, the courts consider three factors: (1) whether the encroachment was placed innocently; (2) whether the encroaching neighbor would suffer significant injury if forced to move the encroachment; and (3) whether the hardship caused by ordering removal of the encroachment would be disproportionately greater than the hardship on the neighbor that would result if the encroachment is allowed to remain.   The trial court first identifies the competing equities underlying each party’s position. It then balances the relative hardships of granting or denying an injunction to remove encroachments from the plaintiff’s property. If the encroachment is extremely difficult or costly to remove and is causing little inconvenience to the adjacent property owner, a court may allow the encroachment to remain and instead award the adjacent landowner monetary damages for the loss of use of the property due to the encroachment.

The application of the relative hardship doctrine is demonstrated in Hirshfield v. Schwartz (2001) 91 Cal App 4th 749. The Hirshfields and the Schwartzes owned adjoining lots in Bel Air, but they were uncertain about the exact boundary line between the two lots.  Over the course of 20 years, the Schwartzes built a concrete block wall, waterfalls, a stone deck, a Koi pond, and a putting green on what they thought was their land. In 1997 the Hirshfields determined that a portion of the improvements had been built on 800 feet of their property.  The Hirshfields sued for quiet title and trespass and sought an injunction to compel the Schwartzes to remove the encroaching structures. The trial court concluded that the Schwartzes innocently believed that the improvements did not encroach on the Hirschfield’s property when they were built and that the hardship of forcing the Schwartzes to remove the improvements significantly outweighed the hardships the Hirschfields would face if the encroaching improvements remained.   The court held that the encroaching improvements could remain until the Schwartzes either moved or sold their residence and ordered the Schwartzes to pay the Hirschfields $23,000 for the fair market value of the 800 square feet of their land occupied by the Schwartzes’ encroachments. The appellate court upheld the trial court’s decision but clarified that the Schwartzes’ qualified right to use a portion of the Hirshfield’s land was not an equitable easement.

Conclusion.  

A landowner cannot change the boundaries of his property merely by building a fence or other structure on another person’s land, and even an innocent error can be a costly mistake.  On the other hand, a person can gain the right to use his neighbor’s land for a specific purpose without the neighbor’s permission if the use is continuous and uninterrupted for five years or more.  An owner who allows others to use their property for access or egress can prevent a prescriptive easement by posting a notice on their property stating: “Right to pass by permission, and subject to control, of owner: Section 1008, Civil Code.” 

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Survey of Yountville Napa County

Image Source

 

Survey of Yountville, Napa County, drawn by T.J. DeWoody, identifying lands owned by James M. Harbin as of September 4, 1857.  T.J. DeWoody served as Napa County Surveyor in the 1850s and 1860s. The map was likely used as an Exhibit in a Land Grant court case involving Harbin.

Salvador Vallejo received a land grant from the Mexican government in the 1830s.  Vallejo called his lands “Rancho de Napa” in what later became Napa County. Salvador Vallejo began selling his lands to American settlers after the Bear Flag revolt in 1847 during the Mexican-American war.  California became a United States territory in 1848 under the treaty that ended the Mexican-American war.

Retention Payments & Prompt Payment Penalties

Construction Site

Retention Payments & Prompt Payment Penalties:  The Supreme Court in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co. Interprets “Good Faith Dispute” in Subcontractor’s Favor. 

By Anthony P. Fritz, Herrig & Vogt, LLP

It is a standard practice in the construction industry for a project owner to pay its prime contractor (1) in installments at various stages of the project’s completion, and to withhold a certain percentage of each progress payment until the project is completed.  The retention withholding gives the owner some protection to ensure satisfactory performance of the construction project. The prime contractor typically passes these retention withholdings on to its subcontractors by including corresponding progress payment and retention provisions in its subcontracts. If a subcontractor fails to complete its work or correct deficiencies in its work, the general contractor may use the retention to pay costs needed to bring the subcontractor’s work into conformance with the project and subcontract requirements.  

The owner is required to release the final retention payment to the prime contractor at the completion of the project, and in turn, the prime contractor is required to pay each subcontractor their share of the retention.  However, the owner is allowed to withhold all or a portion of the prime contractor’s retention when there is a good faith dispute concerning the prime contractor’s right to the retention payment. The prime contractor may withhold all or a portion of a  subcontractor’s retention where a good faith dispute exists concerning the subcontractor’s right to payment.

Retention payments on construction projects are governed by Civil Code section 8810 et seq. Civil Code section 8812(a) requires the owner to pay the retention owed to a direct contractor within 45 days after the project is completed.  Section 8812(c) provides that if there is a good faith dispute between the owner and the direct contractor as to the retention payment due, the owner may withhold up to 150 percent of the disputed amount.   

Civil Code section 8814(a) requires the prime contractor to pay each subcontractor their share of the retention payment within ten days after the owner pays the retention owed to the prime contractor.  Section 8814(c) provides that if “a good faith dispute exists between the direct contractor and a subcontractor, the direct contractor may withhold from the retention to the subcontractor an amount not in excess of 150 percent of the estimated value of the disputed amount.”   Failure to make payments required under Sections 8812 or 8814 can subject an owner or a prime contractor to a two percent penalty per a month on the amount wrongfully withheld. (Civ. Code, § 8818(a). Section 8818(a) also provides that the prevailing party in an action to collect a wrongfully withheld retention is entitled to recover attorney’s fees.  

Disputes over cost overruns, delays, and defective or deficient work can arise during a construction project, and assigning fault between the owner, the prime contractor, subcontractors and other project participants can be a challenging task.  The owner will typically withhold all or a portion of all of the retention payment pending resolution of the dispute, and the prime contractor will withhold final retention payment from the subcontractors deemed to be responsible for the problems encountered on the project.  The prompt payment penalty provisions of Civil Code section 8818 are intended to mitigate the financial hardships that can result when a final retention payment is withheld without proper justification.

The California Civil Code does not define the term “good faith dispute”, and the language of section 8812(c) differs from section 8814(c).   Section 8812(c) allows the owner to withhold the retention payment where a good faith dispute exists between the owner and the direct contractor “as to the retention payment due”.  Section 8814(c) allows the prime contractor to withhold a subcontractor’s retention where “a good faith dispute exists” between the two, but the statute does not include language requiring that the dispute be “as to the retention payment due”.

Prior to the Supreme Court’s decision in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co. certain courts had concluded that because the language in Section 8814(c) differs from Section 8812(c) the California Legislature must have intended to allow a prime contractor to withhold a subcontractor’s retention where a good faith dispute exists as to any issue concerning the subcontractor’s right to payment.   Other courts held that the prime contractor can withhold a subcontractor’s retention only where the dispute concerns the subcontractor’s right to the retention.   

In United Riggers, the owner hired Coast Iron & Steel Co. (“Coast”) as its prime contractor to work on the new “Transformers” ride at the Universal Studios theme park.   Coast hired United Riggers & Erectors, Inc. (“United”) as its subcontractor and agreed to pay United $722,742 for its work on the project. Approved change orders during the project more than doubled the original subcontract price.  Coast paid United 90 percent of the total contract price during the course of work and withheld 10 percent for retention. By the end of the project, United had been paid $1,346,377, and was owed $149,602 for the retention withheld under the subcontract. The owner paid Coast the full retention amount Coast was owed under the contract at the end of the project.  

United demanded payment of its $149,602 retention, plus $352,542 it claimed for delays and outstanding disputed change order requests.  Coast refused to pay any amount. United sued Coast seeking $446,857, plus prompt payment penalties and attorneys’ fees under Section 8818.  Coast did not dispute United’s right to the retention but claimed that it was entitled to withhold the retention because there was a good faith dispute over United’s right to additional payment for delay damages and unapproved change orders.  Coast eventually paid United the $149,602 retention amount several months after the lawsuit was filed.

The trial court found that United was not entitled to any payment for delay damages or contested change orders.  The court denied United’s claim for prompt payment penalties and attorney’s fees under Civil Code Section 8818 because it decided that the parties’ dispute over the contested change orders was “a good faith dispute between Coast and United . . . that entitled Coast to withhold the payment of retention.” The trial court found Coast to be the prevailing party under Section 8818, and awarded Coast $150,000 in attorney’s fees.

The Court of Appeal upheld the trial court’s ruling denying United’s claims for change orders and delay damages. However, the Appellate Court overturned the trial court’s decision regarding  prompt payment penalties, and held that under Section 8814(c) “a contractor is entitled to withhold a retention payment only when there is a good faith dispute regarding whether the subcontractor is entitled to the full amount of the retention payment.”  The Court determined that United, not Coast was the “prevailing party” under Section 8818, reversed the trial court’s award of $150,000 in attorney’s fees to Coast and ordered the trial court to award “attorney’s fees to United, including attorney’s fees for this appeal as it relates to the retention claim.”

The Appellate Court wrote: “To excuse Coast in this case from paying United the retention payments would unduly increase the leverage of owners and primary contractors over smaller contractors and subcontractors by discouraging subcontractors from making legitimate claims for fear of delaying the retention payment. This consequence is not allowed in light of the ‘broader remedial purpose of the prompt payment statutes’ to ‘encourage general contractors to pay timely their subcontractors and to provide the subcontractor with a remedy in the event that the contractor violates the statute.’”

The California Supreme Court affirmed the Appellate Court’s decision by its opinion in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co.(2018) 4 Cal.5th 1082.  The Court’s opinion  includes a detailed analysis of the legislative history and the policies underlying California’s prompt payment statutes: “These statutes are intended to discourage owners and direct contractors from withholding monies owed as a way of granting themselves interest-free loans.”   The Court held that even though the language of Section 8814(c) differs from Section 8812(c), the legislative history and policies of the prompt payment statutes do not support different interpretations of the two statutes. A direct contractor may not “withhold a retention that is simply part of that undisputed minimum amount, because a dispute has arisen over whether additional amounts over and above the retention might also be owed. In effect, the payor must be able to present a good faith argument for why all or a part of the withheld monies themselves are no longer due.” The Court states that its interpretation of Section 8812(c) “prevents contractors, who may have more leverage than the subcontractors they owe (Citation) from using the withholding of monies over which there is no dispute to exacerbate subcontractors’ cash-flow issues and chill the assertion of legitimate claims for additional compensation.”   

Comments:  The United Riggers makes sense from a policy perspective.  But the case also illustrates how several seemingly innocuous words in a statute can lead to expensive court battles between litigation adversaries.  Coast paid a high price for its decision to delay payment of United Riggers’ retention. Each side incurred attorney’s fees that greatly exceeded the retention amount, and United recovered its attorney’s fees in addition to the retention that Coast voluntarily paid after the lawsuit was filed.  Others in the construction industry are well advised to learn from Coast’s error and not make the same mistake.

 

(1) The prime contractor has a direct contract with the owner, and typically employs subcontractors to carry out specific parts of a construction project.   The terms “prime contractor”, “direct contractor” and “general contractor” have the same meaning and are used interchangeably.