You just won your case. The judgment order says the defendant owes you a tidy sum, but how do you collect it? Many creditors are under the mistaken impression that all they have to do is walk into court and pick up the cash. Unfortunately, it's not that easy, especially if you're dealing with an uncooperative debtor. The real challenge may lie ahead.
One of the best and fastest means to collect a judgment is through the garnishment procedures. A garnishment allows you to seize the assets of a judgment debtor. While wages and bank accounts are the most commonly garnished assets, any money owed from a third party to the debtor may be subject to garnishment. You could claim the debtor's accounts receivables, promissory notes, and proceeds from the sale of a business or real estate.
Few creditors take full advantage of this legal right. For example, did you know that a debtor's I.R.A. can be garnished? Most debtors who are hiding assets will not secret this and other exposed assets.
Unfortunately, there are limits to what can be garnished. Money payable by the federal government is not subject to garnishment, including the wages of federal employees or money owed to vendors. Furthermore, there are a whole series of specific exemptions which are available to the debtor. See the box below for a few of these exemptions.
Investigate Credit Worthiness
* Call other creditors of applicant
* Call industry contacts
* Check with landlords and credit references
* Obtain a Credit Bureau Report
* Review Dun & Bradstreet Reports
* Study court records for information about: Judgments, pending litigation, title to real estate, liens on realty, and UCC financing statements
* Hire an investigator or attorney Have your CPA review financial records
This article is advisory only and not meant to replace legal representation. If you need legal counsel, please contact Gross & Romanick.
Monday, September 29, 2008
Wednesday, September 24, 2008
Building Manager Liable for Theft of Tenant's Property
In Virginia it is rare that a landlord or property manager is found responsible for third party criminal acts against tenants. Nevertheless, in the 2002 Arlington County Circuit Court case of King v. Atrium Unit Owners Association, a jury found a building manager liable for the burglary of a tenant's condominium.
Facts: While on vacation, a tenant left the key to her condo with a building manager. Circumstantial evidence satisfied the jury that the burglar used the key left with the building manager to steal $250,000 worth of property.
Finding: The building manager was negligent in the custodianship of the key.
Advice: Landlords, building managers and property managers must protect tenant keys, master keys and access codes that will permit access to tenant's premises. Negligent handling of such keys or access codes may result in liability for thefts.
For more information about commercial landlord law or to seek legal representation, contact Gross & Romanick today.
Facts: While on vacation, a tenant left the key to her condo with a building manager. Circumstantial evidence satisfied the jury that the burglar used the key left with the building manager to steal $250,000 worth of property.
Finding: The building manager was negligent in the custodianship of the key.
Advice: Landlords, building managers and property managers must protect tenant keys, master keys and access codes that will permit access to tenant's premises. Negligent handling of such keys or access codes may result in liability for thefts.
For more information about commercial landlord law or to seek legal representation, contact Gross & Romanick today.
Monday, September 22, 2008
At-Will Employment
Here at Gross & Romanick, our business law division is at the heart of our practice and we're dedicated to keeping our clients well-informed and educated about employment law here in VA. Below, you'll find a general discussion of at-will employment in Virginia, but if you're not familiar with the statutes mentioned, its best to seek legal counsel.
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THE AT-WILL DOCTRINE: In the Commonwealth of Virginia when employees are hired, unless there is a specific contract, they are considered to be at-will employees. This means that the employee may be terminated at any time without notice or reason.
LETTERS OF ENGAGEMENT: Letters of engagement do not form a contract if all they do is state the basic terms and conditions of employment, even if they include items such as benefits, compensation, bonuses, and starting date. To be sure that an engagement letter is not misunderstood by the employee as forming a contract it is important to include a line that states that the employment is for no specific period of time and that the employer is free to terminate the employee at any time.
LAWS TO KNOW: Laws to know are the National Labor Relations Act; the Fair Labor Standards Act (FLSA); Title VII of the Civil Rights Act as amended in 1991; any state or local anti-discrimination laws; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Family and Medical Leave Act (FMLA); the Older Workers Benefit Protection Act; the Worker Adjustment and Retraining Notification Act; the Employee Retirement and Income Security Act; the Consolidated Omnibus Budget Reconciliation Act of 1985 and many others. Sound overwhelming? It can be. If you ever have any questions regarding your rights under the above laws you should consult your attorney.
EVALUATIONS: It is important to adopt a uniform system of evaluation of your employees for hiring and advancement. These evaluations may be closely scrutinized at a later date if your decisions are challenged by your employees in a discrimination suit.
OVERTIME AND THE FLSA: One of the most overlooked and misinterpreted laws is the FLSA's overtime requirements. When a non-exempt employee works over forty hours in one week that employee is to be paid time and one-half of their regular hourly wage. It is often mistakenly thought that this requirement can be satisfied by awarding the employee compensatory time off. Awarding compensatory time off can only be a substitute in very limited circumstances.
ACTION ADVICE: Most Employers prefer the at-will status and should take care not to change it by letter, contract or handbook. If you are not familiar with the statutes mentioned above, contact an attorney and have them explained to you.
***
THE AT-WILL DOCTRINE: In the Commonwealth of Virginia when employees are hired, unless there is a specific contract, they are considered to be at-will employees. This means that the employee may be terminated at any time without notice or reason.
LETTERS OF ENGAGEMENT: Letters of engagement do not form a contract if all they do is state the basic terms and conditions of employment, even if they include items such as benefits, compensation, bonuses, and starting date. To be sure that an engagement letter is not misunderstood by the employee as forming a contract it is important to include a line that states that the employment is for no specific period of time and that the employer is free to terminate the employee at any time.
LAWS TO KNOW: Laws to know are the National Labor Relations Act; the Fair Labor Standards Act (FLSA); Title VII of the Civil Rights Act as amended in 1991; any state or local anti-discrimination laws; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Family and Medical Leave Act (FMLA); the Older Workers Benefit Protection Act; the Worker Adjustment and Retraining Notification Act; the Employee Retirement and Income Security Act; the Consolidated Omnibus Budget Reconciliation Act of 1985 and many others. Sound overwhelming? It can be. If you ever have any questions regarding your rights under the above laws you should consult your attorney.
EVALUATIONS: It is important to adopt a uniform system of evaluation of your employees for hiring and advancement. These evaluations may be closely scrutinized at a later date if your decisions are challenged by your employees in a discrimination suit.
OVERTIME AND THE FLSA: One of the most overlooked and misinterpreted laws is the FLSA's overtime requirements. When a non-exempt employee works over forty hours in one week that employee is to be paid time and one-half of their regular hourly wage. It is often mistakenly thought that this requirement can be satisfied by awarding the employee compensatory time off. Awarding compensatory time off can only be a substitute in very limited circumstances.
ACTION ADVICE: Most Employers prefer the at-will status and should take care not to change it by letter, contract or handbook. If you are not familiar with the statutes mentioned above, contact an attorney and have them explained to you.
Wednesday, September 17, 2008
The Chiropractor: An Expert and An Expert Witness
If you've been injured in a car accident, you need to seek legal representation. We here at Gross & Romanick understand the pain and stress you are going through in dealing with your injury, lost income, and unexpected medical expenses. Our firm represents injured individuals and their families in serious personal injury and wrongful death cases--so please contact us today.
In the meantime, please review a recent article we published on whether or not you can or should use chiropractors as expert witnesses.
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As recognition of the effectiveness of chiropractic increases, the acceptance of the chiropractor as an expert witness in the courtroom is also growing. This recognition may be grudging on the part of the "traditional" medical community, even after the American Medical Association's stinging defeat in Wilk v. AMA. However, any number of studies attest to what millions of auto accident victims and back pain sufferers have known for decades. Even Time, that most-read of the newsweeklies, gave its seal of approval in a report last fall headlined, "Is There Method in Manipulation?" "Now," the magazine piece said, "almost despite itself, mainstream medicine has started to take notice," and it cites reports of medical doctor groups holding symposiums on back manipulation and of orthopedic surgeons admitting they referred patients for such treatment.
In addition to this recognition by the public, the medical community and the media, chiropractic doctors have achieved considerable statutory recognition in many jurisdictions, including the Commonwealth of Virginia. The definition of reimbursable medical expense in a Virginia automobile insurance policy must include payment for chiropractic care (see "Helping Clients Negotiate the Insurance Maze"). That language appears because the Virginia Insurance Code, Section §38.2-2201, requires that any insurance company licensed to issue auto liability insurance in the Commonwealth of Virginia provide chiropractic benefits. Virginia's chiropractic doctors are licensed by the Commonwealth's Board of Medicine, the same body that licenses medical doctors. Becoming licensed as a chiropractic doctor involves rigorous testing, even after the awarding of the Doctor of Chiropractic degree.
Another provision of the Virginia code is important to both the chiropractic and the legal professions; viz., the admissibility of expert testimony in court by chiropractors. "A doctor of chiropractic," reads Section 8.01-401.2, "when properly qualified, may testify as an expert witness in a court of law as to etiology, diagnosis, prognosis, and disability, including anatomical, physiological, and pathological considerations within the scope of the practice of chiropractic ..." Thus chiropractic doctors by Virginia statute are considered to be experts and cannot be excluded as experts in their field of medicine.
Nearly 20 years ago, celebrated defense attorney Melvin Belli noted in an article in The Digest of Chiropractic Economics that, while the chiropractic doctor would scarcely expect to be called to testify on a matter that is out of his field, "... the list of what is 'out of his field' is daily being limited, at least by the courts." Of particular interest is Belli's contention, dramatically illustrated by a Michigan case, that chiropractors can testify successfully as to the permanence of an injury, and hence as to future pain and suffering, even against the opinion of orthopedists and other medical men. In that case, Corbin v. Hittle, a chiropractor testified that his patient's injuries were permanent and that he would never be free of pain. Challenged by the defense as reversible error, the testimony was allowed to stand by the appeal court, which said in essence that, since the state allows and regulates the practice of chiropractic as a restricted form of medicine, it must also allow it as expert testimony.
Edward Gross has represented many clients who are patients of chiropractic doctors, and he does not hesitate to call upon them as expert witnesses. Mr. Gross finds these doctors to be well prepared in offering expert testimony and able to demonstrate to juries that they understand their patients' problems.
In reflecting on his successful presentation of the case for Dr. Wilk and his colleagues, Plaintiffs' Attorney George P. McAndrews stated that one of the highlights of the case was the difficulty the plaintiffs had in finding a law firm that was willing to undertake the case. He was told by Dr. Wilk that 15 or 16 other firms that had been approached all found some kind of a conflict, usually representation of some part of the adversary medical community. It took three or four years, Dr. Wilk told him, to find a firm that would take this antitrust case. In retrospect, looking back at that landmark decision, perhaps some of those bashful lawyers would be less reluctant today.
When the victim of a violent collision enters the chiropractor's office seeking relief for his or her considerable pain and discomfort, the stress that patient is experiencing is apparent to the doctor. As the doctor's patient and as the lawyer's client, the victim needs an advocate, a role that the chiropractic doctor and an attorney who understands chiropractic are amply prepared to fulfill.
In the meantime, please review a recent article we published on whether or not you can or should use chiropractors as expert witnesses.
***
As recognition of the effectiveness of chiropractic increases, the acceptance of the chiropractor as an expert witness in the courtroom is also growing. This recognition may be grudging on the part of the "traditional" medical community, even after the American Medical Association's stinging defeat in Wilk v. AMA. However, any number of studies attest to what millions of auto accident victims and back pain sufferers have known for decades. Even Time, that most-read of the newsweeklies, gave its seal of approval in a report last fall headlined, "Is There Method in Manipulation?" "Now," the magazine piece said, "almost despite itself, mainstream medicine has started to take notice," and it cites reports of medical doctor groups holding symposiums on back manipulation and of orthopedic surgeons admitting they referred patients for such treatment.
In addition to this recognition by the public, the medical community and the media, chiropractic doctors have achieved considerable statutory recognition in many jurisdictions, including the Commonwealth of Virginia. The definition of reimbursable medical expense in a Virginia automobile insurance policy must include payment for chiropractic care (see "Helping Clients Negotiate the Insurance Maze"). That language appears because the Virginia Insurance Code, Section §38.2-2201, requires that any insurance company licensed to issue auto liability insurance in the Commonwealth of Virginia provide chiropractic benefits. Virginia's chiropractic doctors are licensed by the Commonwealth's Board of Medicine, the same body that licenses medical doctors. Becoming licensed as a chiropractic doctor involves rigorous testing, even after the awarding of the Doctor of Chiropractic degree.
Another provision of the Virginia code is important to both the chiropractic and the legal professions; viz., the admissibility of expert testimony in court by chiropractors. "A doctor of chiropractic," reads Section 8.01-401.2, "when properly qualified, may testify as an expert witness in a court of law as to etiology, diagnosis, prognosis, and disability, including anatomical, physiological, and pathological considerations within the scope of the practice of chiropractic ..." Thus chiropractic doctors by Virginia statute are considered to be experts and cannot be excluded as experts in their field of medicine.
Nearly 20 years ago, celebrated defense attorney Melvin Belli noted in an article in The Digest of Chiropractic Economics that, while the chiropractic doctor would scarcely expect to be called to testify on a matter that is out of his field, "... the list of what is 'out of his field' is daily being limited, at least by the courts." Of particular interest is Belli's contention, dramatically illustrated by a Michigan case, that chiropractors can testify successfully as to the permanence of an injury, and hence as to future pain and suffering, even against the opinion of orthopedists and other medical men. In that case, Corbin v. Hittle, a chiropractor testified that his patient's injuries were permanent and that he would never be free of pain. Challenged by the defense as reversible error, the testimony was allowed to stand by the appeal court, which said in essence that, since the state allows and regulates the practice of chiropractic as a restricted form of medicine, it must also allow it as expert testimony.
Edward Gross has represented many clients who are patients of chiropractic doctors, and he does not hesitate to call upon them as expert witnesses. Mr. Gross finds these doctors to be well prepared in offering expert testimony and able to demonstrate to juries that they understand their patients' problems.
In reflecting on his successful presentation of the case for Dr. Wilk and his colleagues, Plaintiffs' Attorney George P. McAndrews stated that one of the highlights of the case was the difficulty the plaintiffs had in finding a law firm that was willing to undertake the case. He was told by Dr. Wilk that 15 or 16 other firms that had been approached all found some kind of a conflict, usually representation of some part of the adversary medical community. It took three or four years, Dr. Wilk told him, to find a firm that would take this antitrust case. In retrospect, looking back at that landmark decision, perhaps some of those bashful lawyers would be less reluctant today.
When the victim of a violent collision enters the chiropractor's office seeking relief for his or her considerable pain and discomfort, the stress that patient is experiencing is apparent to the doctor. As the doctor's patient and as the lawyer's client, the victim needs an advocate, a role that the chiropractic doctor and an attorney who understands chiropractic are amply prepared to fulfill.
Monday, September 15, 2008
Security Deposit Treatment in Bankruptcy
In today's worsening financial climate, more and more landlords are worried about their legal rights when a tenant declares bankruptcy. In the following article published by Gross & Romanick, the firm's attorneys discuss security deposit treatment in bankruptcy. Keep in mind, though, that the article is not meant to replace legal representation: if you need legal counsel, please contact Gross & Romanick today.
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What happens to a tenant's security deposit after the tenant files bankruptcy? If rent is owned, can the landlord apply the deposit to unpaid rent?
An informal poll of area Bankruptcy Lawyers reveals a belief that a security deposit can be used as a set- off against both pre-petition damages and lease termination damages under Section 553 of the Bankruptcy Code. The set off is subject to mitigation by the landlord, including releting the premises. The safest process is to have a court grant relief from stay before applying the security deposit; but this procedure may cause a debtor to file an objection. Right or wrong, most Landlords simply keep the deposit.
Some attorneys also argued that Landlord can assert a "secured claim" up to the amount of the security deposit.
Thursday, September 11, 2008
Payment Bonds
As part of its Construction Law practice, Fairfax law firm Gross & Romanick fields so many questions about payment bonds that they've compiled a brief article about it. Keep in mind, though that the article provides a very broad overview of the complex area involving payment bonds and can't be relied upon as a substitute for legal advise. Please contact Gross & Romanick directly if you'd like information about your own specific situation.
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If your company is a subcontractor or supplier to a government project, you need to understand payment bonds. Some private jobs also utilize payment bonds. The federal statute generally applicable to payment bonds on federal projects is the Miller Act, with state and local statutes termed Little Miller Acts.
Payment Bonds Defined
Payment bonds are required on almost all federal, state and local construction projects. Federal and state laws require these bonds on public projects for the protection of the subcontractors, materialmen and suppliers against insolvent or defaulting contractors and subcontractors. Although no legal requirement exists regarding privately owned construction projects, payment bonds are frequently required by owners and lenders.
The bonding relationship is as follows: The "principal" is the general contractor or the subcontractor whose work is being bonded. The "surety" is usually an insurance company that is standing behind the principal. If the general contractor is the principal, the "obligee" is the owner of the project. If the subcontractor is the principal, the "obligee" is the general contractor. The "claimant" is the subcontractor, materialman or supplier seeking payment from the bond.
Who is Covered, and What is Covered
Payments bonds posted by a general contractor will always cover the subcontractors, materialmen and suppliers who have a direct relationship with that general contractor. On public projects, a general contractor may be required to have its subcontractors post payment bonds; in such a case, sub-subcontractors, materialmen and suppliers to those subcontracts will then be covered by the bonds of those subcontracts. In addition, on both public and private projects, the terms of a payment bond itself might extend coverage to include suppliers and materialmen who would not generally be covered.
The terms of a payment bond along with any applicable statutes define the extent of the bond's coverage. The typical payment bond coverage is for labor and materials furnished for use on contract projects. Numerous factors are considered by the courts in determining coverage, including the relationship of the parties, the nature of the product or labor provided and the cost of the work or materials relative to the overall project. Such an analysis is complex.
Notice Requirements
Notice of a bond claim to the principal and surety needs to be done within prescribed time limitations in order to pursue a claim. The terms of the payment bonds on both public and private projects typically contain strict time requirements for giving notice, as well as time limitations on when suit must be filed. Furthermore, federal, state and municipal statutes will set strict time deadlines.
For state projects in Virginia, the applicable statute is Virginia Code Section 11-60B. This section bars suits or actions under certain circumstances on a payment bond unless the claimant had given written notice to the principal and surety within 180 days after it performed the last of the work or labor or furnished the last of the materials for which the claim was made.
Summary
Before you begin a job, get a copy of the bond that covers the project in order to determine whether you are covered and how to enforce your rights. Notices of your claim must exactly track the bond and applicable statutes. Legal enforcement is never simple, since the principals and sureties typically assert every available defense.
Tuesday, September 2, 2008
Pre-Judgment Attachment: Get It Before It Vanishes
Gross & Romanick's Business Law, Commercial Landlord Law, and Litigation divisions handle diverse legal matters. If you'd like representation for a situation similar to the one discussed below, don't hesitate to contact us today.
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Unfortunately, filing a lawsuit to collect a debt is often an encouragement to the debtor to move and conceal assets. This sometimes makes creditors hesitant to take early legal action. But, Virginia law has a solution: the pre-judgment attachment. Virginia law allows a creditor to bring the debtor's property into court custody at the outset of a lawsuit, thereby assuring that the property will be available to satisfy any judgment the court eventually grants.
Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.
To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.
Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.
Grounds for Attachment:
In summary form, it is sufficient grounds for attachment that the defendant:
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Unfortunately, filing a lawsuit to collect a debt is often an encouragement to the debtor to move and conceal assets. This sometimes makes creditors hesitant to take early legal action. But, Virginia law has a solution: the pre-judgment attachment. Virginia law allows a creditor to bring the debtor's property into court custody at the outset of a lawsuit, thereby assuring that the property will be available to satisfy any judgment the court eventually grants.
Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.
To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.
Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.
Grounds for Attachment:
In summary form, it is sufficient grounds for attachment that the defendant:
- Is a nonresident corporation or individual, which has assets or debts owed to it in Virginia
- Is removing or about to remove out of the Commonwealth with intent to change domicile
- Intends to remove, or is removing, or has removed the specific property sued for or his assets or the proceeds of the sale of his property out of the Commonwealth so that the debtor will not have therein assets sufficient to satisfy the judgment
- Is converting, is about to convert or has converted his property into money, securities or debt with the intent to hinder, delay or defraud creditors
- Has assigned or disposed of or is about to assign or dispose of his assets with intent to hinder, delay or defraud creditors
- Has absconded or is about to abscond from the Commonwealth or has concealed himself to the injury of his creditors, or is a fugitive from justice.
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