Business and divorce: You do have a prenuptial agreement, right?

I have gotten to really like The Riches on FX. Minnie Driver(who has become beautiful as she ages) and Eddie Izzard (who has become a rather good actor) play con artists taking over a dead man's life - the dead man being a lawyer. The lawyer works in a real estate development company. Actually, he is now a partner to the rather coarse owner of the company. Owner disappeared and returned last night with a bride - a dancer from Las Vegas. No, the show is not for the faint hearted. Owner wanted a prenup from the wife. What ensued was a rather interesting discussion of prenups, their purposes, and marriage.

When remarrying, small business owners need to think hard about prenuptial agreements. Divorce means dividing half the property and a business is property. The Los Angeles Times has an article, Parting Company, in its May 22 edition.

Prenuptial agreements, experts agree, are the best way to prevent a small business from becoming part of a messy divorce. Properly crafted, they will protect a company from being split up or loaded with debt used to buy out the other spouse. This is especially true in California, where community property laws dictate that everything acquired during a marriage belongs to both spouses no matter who did the work.

"A prenuptial agreement is one of the best things people can do for themselves," said Ben Martin, an attorney who advises entrepreneurs at the Small Business Development Center at Loyola Marymount University, which offers free counseling.

The article mentions post- marriage agreements. These are as difficult here in Indiana as they appear to be in California but not impossible.

Reaching the decision to make this kind of agreement is the truly difficult part about these type of agreements. The personal, emotional issues have the real possibility of leading the business to ruin.

Like so many things legal, prenuptial agreements possess a double edge. The agreement protects both parties. The bride in The Riches came around to the idea of a prenuptial agreement when it was pointed out to her that the agreement was a negotiation and all of marriage was a negotiation. I really like description of prenups and marriage. I have written more about prenuptial agreements on my Indiana Divorce and Family Law Blog here.

So, you own a business and no agreement in case of divorce? Why not?

Bad Product Names

I found this Bad Product Names blog mentioned at NameWire and I had to check it out. I suppose it will be interesting to anyone who is designing a brand name/trademark. The writer gives the pros and cons of different brand names. Also, a lot of fun.

How not to handle a judge

Masson's Blog posted about this Chicago lawyer backtalking a bankruptcy judge. Go see the post here. I am surprised that the judge did not through the idiot in jail.

Get a lawyer to do it for you: Reason 1001

Fighting bronchitis has left me grumpy. I say that as an apology for what may appear to be a rant.

Lawyers exist for a reason. I say it is so real people can have real lives and not spend those lives in courthouses. Seriously, we know what are doing and that is the reason you should forget about doing something yourself. I no longer try to do anything mechanical with my car, I do not do plumbing, and I do not do whatever you, dear reader, do to make a living. I know the level of and range of my incompetencies. So why are you trying to practice law without a lawyer?

For a wonderfully written story of how two nice people screwed themselves in a bankruptcy, please read What Not to Do Before Bankruptcy. I see their blithe self-assurance in all sorts of clients in all sorts of cases. Think of any legal matter like jumping off a cliff. Or a tall building. Now think of lawyers as a bungee cord. Now think about how you would like jumping off this tall building without a bungee cord.

Thanks to the SC Bankruptcy and Consumer Law Blog for the link to the article above. Not read it, yet? You really should.

Indiana's Lemon Law

I missed that Robert Duff had finished his examination of Indiana's Lemon Law with the post
Indiana's Lemon Law, How Does It Compare? (Part 3). He starts his post with:

So far in this series, we have determined that the Indiana Motor Vehicle Protection Act, Indiana's lemon law, is the least consumer friendly of our neighboring states' lemon laws with regard to: the deduction the manufacturer receives for the mileage on a vehicle in a buyback situation (Part 1) and the kind of vehicles to which the law applies (Part 2)....

He concludes that Indiana's lemon law surpasses our neighbors:

This time, it appears that Indiana's lemon law is the MOST favorable to consumers of all our neighboring states. The bottom line is that Indiana's lemon law protects new car purchasers longer than the other states' lemon laws.

My opinion remains that Indiana's lemon law protects the consumers a little and the makers even more. I wonder, though, if the Lemon Law has not been somewhat superseded by the market. I remember the Eighties as a time when GM was particularly hapless with its models. Since then Toyota and other auto makers have beat GM over the head about their reliability. I searched quick for statistics by auto maker for Lemon Law violations on Yahoo and Google but turned up nothing. I could find nothing on the Consumer Rights Blog, either. Answering this question might actually answer the bigger question of why Indiana's legislature cannot be bothered to give us a better Lemon Law statute.

New Indiana lawyer blog

Tony Zirkle of South Bend blogs on criminal defense, products liability case, and divorces at Indiana Lawyer Blog. For those who wander in here from the South Bend area, he also has links to his practice web pages.

Internet tip: RSS feeds - what are they?

A post having nothing to do with business or law, but that will save you a lot of time if you read a lot of blogs or online newspapers. I wrote about new aggregators/RSS feeds before in this post. I think these things are one of the best things about using the Firefox browser - I can see the headlines of blog posts or online newspapers without going to that page. I can then decide if I want to read the whole story or go onto something more interesting. Internet Explorer also now has this capability - or so I understand. You can also download newsreaders or subscribe to an online site like Bloglines. A very useful and free way to save time.

If you look on the right of this post, I have a link for subscribing to this blog's RSS feed. It is that easy.

Helping your business with Internet resources

How can the Internet help your business? Information exists freely online that once was too expensive in time or money or both for practical use. This information may provide the competitive edge for your business or the means of avoiding dangerous costs - if you know about the information. The problem is now fighting information overload.

You can now find here links to those business resources I find useful. These post wills now be an ongoing weekly feature for this blog, so check back often or subscribe to the RSS feed or to the e-mail updates. I suggest that you help by using the Comment function at the bottom of the posts to let me know if you find this information useful or not, and also for any recommendations or requests about business resources.

So why am I passing along this information for free? Am I being a spendthrift with my knowledge? Is the information really worth something?

I freely admit my self-interest here. First, giving you this information educates you on the subject and about my knowledge of the information. Second, you knowing what you need to do does mean you know how to do this for your specific business needs. Putting those together will hopefully illuminate for you why you need to hire me as your lawyer and as your lawyer I will not need to waste your time educating you about whatever needs to be done. Lastly, some resources may lead you to a profitable market area. Even if you do not hire me as your lawyer, I have improved the economy around me and that will benefit all of us eventually.

Dumb Little Man blog from Inter Alia. Dumb Little Man is about productivity tips, saving money, and maybe just keeping its readers sane. I like the style, not sure a lot of it I can use, but what I can use is great. I subscribed to the RSS feed.

At Dumb Little Man, I found this post, 13 Government Resources for Small Businesses. These are federal publications and only a fraction of what is out there.

For businesses writing probably does not seem as important as doing whatever it is that the business does, but how much of what a business does involve some sort of written communication? I thought about this when I ran across the Business Writing blog. Bookmark it or subscribe to the RSS feed for future reference.

New: Grand Prix lawsuit dead

Something a little different, Indiana Law Blog reports the Seventh Circuit Court of Appeals affirmed the dismissal of the suit over the 2005 Indiana Grand Prix race. In the Indiana Law Blog quote from the AP story is this gem:

But Chief Judge Frank Easterbrook dismissed such claims in the 14-page ruling. The reduced race was allowable under F1 rules, he wrote, "and once it is established that the plaintiffs received a regulation race, they admit that they had no additional right to a race that was exciting or drivers that competed well."

In other words, you get what you paid for and be sure of what you contract for.

Steps in a lawsuit - from service to filing an Answer

I thought a series of posts about the steps in a lawsuit might be useful. This will be the first part of a series about the general procedure in civil lawsuits. Small claims have a wholly different procedure and I suggest you look at the small claims rules if you are looking for information on small claims cases. I am not going into all the nooks and crannies of civil procedure but just the broad generalities.

After filing the Complaint and Summons with the County Clerk, serving the defendant is the next step. In some counties the person serving the Complaint is a Sheriff's deputy and in others it is a bailiff.

By the way, Indiana's Trial Rules have eighteen rules solely about service. See Indiana Trial Rule 4 to 4.17.

If the defendant cannot be served personally, then there is service by certified mail and by publication. The case cannot go forward if the defendant cannot be served. Service is part of the constitutional right of due process.

The defendant then has a certain amount of time for responding to the Complaint depending on the type of service. The response is called an Answer. For personal service, the time is 20 days. Expect that to be extended by the defendant. Usually, the extension runs another 30 days. That is if the defendant gets an attorney or knows the Indiana Trial Rules.

If the defendant does nothing by the 20th day, the rules allow for a default judgment. Just as if it were a ball game, one wins if the other side does not show up.

I wrote the defendant must file an Answer. This is not precisely true. The defendant may file a Motion to Dismiss, or an Answer. If the defendant files a Motion to Dismiss, the judge must rule on the motion before the case can continue. If the judge denied the defendant's motion, then the defendant must file an Answer. If the judge grants the motion, the Plaintiff may have be out of a case or find a way to get back in.

What comes after the Defendant files an Answer? Not trial, but what we call discovery. That is for another post.

Electronic Discovery - new article

One more for any lawyers seeing this blog and for business owners. Law.com's Legal Technology page has a new article on electronic discovery: E-Evidence: Who Let the Dogs Out?. I am still pondering the full meaning of these paragraphs:

When will we see that clients self-immolate far more often through incomplete production than inadvertent production?

We need to devote more time to thinking about what the evidence is instead of where it lodges. Too often, we fixate on the containers — the e-mail, spreadsheets and databases — with insufficient regard for the content. This isn't just a rant against producing parties. I see the failure as well in requesting parties determined to get to the other side's tapes and hard drives but unable to articulate what they're seeking.

Employment law: Kroll study on background checks

I got notice about this report and read the summary. I certainly did not have time to read the full report. Here is the point of the summary:

Criminal record “hits” increased more than ½ a point from 8.5% in 2005 to 9.1% in 2006. Further, applicants stretched the truth more often in 2006 than in 2005, as proven by increases in past employment verifications and education verifications.

The following link leads to the Summary which has a link to the full report: Summary link.

I am chewing over just what this means. How does this apply to litigating a negligent employment claim? From only reading the summary, I am thinking plaintiffs and defendants both will be doing a lot of arguing about the reasonableness of the employer's reliance on background checks. Oh, yeah, I see the agency doing the background check being added to the lawsuit by the defendant.

So much information and so little knowledge.

HIPAA information

Credit a Google search gone astray for this post. HIPAA manages to get itself intertwined into several areas of my practice without really being part of my law practice. I took a look at an entry for the Health Care Law Blog on new enforcement procedures. If you have an interest in health care law, I suggest you take a take a look at the whole blog.

That page took me to the enforcement page at the Health and Human Services website. Further links go to pages detailing the enforcement process, enforcement highlights and case examples.

For consumers, I suggest also checking out this page which links to more educational pages of a general interest. Lawyers should find the links to statutes and the federal regulations of some use, too.

Fiddling about

I changed the look of the blog a bit todayl. I have been thinking that the blog looked a bit drab and also a bit hard to read. If anyone cares to leave a comment about the looks now, I would appreciate the feedback. I would like to think that the information I am providing is helpful but I also want to make the reading of this blog a pleasant experience.

For my reader's convenience I added to the sidebar a link for subscribing to the blog's RSS feed. You can now add this blog to an RSS reader. If you are using FireFox or Internet Explorer 7 you should have a built in RSS reader. You might also see this referred to as a news aggregator or news reader. This is a really interesting and truly useful tool. You subscribe to a blog and the news reader shows you the headlines at the blog instead of having to go to that blog to see what is there. It means you can choose to read what is interesting to you instead of reading the whole blog. Here is a link to the Wikipedia article on news aggregators and RSS.

Along with the RSS subscription service, there is also an e-mail subscription service on the sidebar to the left of this post and down. This means you get an a-mail letting you know when there is something new on the blog.

I do hope this make this blog more useful to you, my readers.

The Civil Rights Tax Relief Act

The HR Lawyer's Blog wrote a post about this subject on May 9. I was unaware of this proposed federal law. I think it might be of interest and will follow up on this next week.

The Personality Rights Database

I posted briefly on the Seventh Circuit's wiki and here is another. At first, I thought The Personality Rights Database would only provide some mildly interesting intellectual stimulation. I think it might also have some practical value, for the wiki includes privacy rights within its definition of personality rights. More importantly, the wiki includes United States law.

Not that the wiki has copious amounts of information at this point in time. It does get me thinking of applications closer to home. One thing crossed my mind was how much of a future West's Indiana Digest (and all those other digests) will have when enough enterprising attorneys join together to create wikis on an area of law. For example, what would happen if the Family Law Section of the Indiana State Bar created a wiki exploring the fullness of Indiana's family law? I do not recall writers like Dennis Kennedy using the analogy to the West Digests but I think it is one that other attorneys will understand immediately.

That describes my take on the Emma McPeek, et al. v. Charles McCardle from the Indiana Court of Appeals. Mother owns the farm that was in the family for generations when she marries McCardle. When she dies the children from the first marriage file a declartory action requesting the court find mother's marriage to McArdle void. After all, mother died without a Will so McCardle stands to inherit half the farm via Indiana's intestacy statute. Losing the family farm did not please the children.

The children's theory revolved about what makes a valid marriage. The Indiana Court of Appeals described their theory like this:

Here, it is undisputed that Edwina and Charles complied with the requisite statutes in obtaining and filing their Indiana marriage license and certificate with the clerk of the Ohio County Circuit Court.2 It is also undisputed that Reverend Campbell could have solemnized the marriage under Indiana law had the ceremony taken place in this State. The only question, therefore, is whether the officiant’s failure to obtain the requisite license to marry the couple in Ohio—notwithstanding the fact that he was statutorily authorized to perform Indiana marriage ceremonies—and the couple’s failure to obtain an Ohio marriage license—notwithstanding the fact that they properly obtained an Indiana marriage license—render the marriage void.

The children went onto argue that Indiana courts should find the marriage void because it failed to comply with Ohio law. The Indiana Court of Appeals got rid of that argument quickly.

Which leaves the children and step-father to divide the farm that had been in the children's family for years and years.

Marrying someone with children and with property is a recipe for trouble. A Will might have solved some of the problems. A prenuptial agreement would have been a better solution.

Reading around: Employment and business law blogs

A caution: these blogs interest me because they the qualities of good information being well-written and not because they have anything directly to say about Indiana law. I make this caution for the non-lawyers reading this blog who might not understand why a blog written by an attorney practicing in the State of Washington (such as Jill Pugh who runs two of the blogs below) does not mean much in Indiana. State law still controls a large swath of employment law and each state has its own local variations. Even with federal law, differences exist between the different federal circuit courts of appeal.

For example, Ms. Pugh's Employee Handbooks Blog does have several posts that are useful outside of Washington. The post FLSA Online Overtime Calculator has utility because the federal regulations apply nationally and the overtime calculator does not necessarily require a judge's interpretation. While the post When You Have to Fire An Employee - 10 Things to Keep In Mind has really good ideas, I must point out that Indiana law also says what cannot be withheld from an employee's paycheck. It is a lawyer thing, see? The point made by in the post still applies. Then there is,Handling Employee Personal Data, which deals with applying a specific Washington statute. However, this does give me an idea for a post of my own.

As I read her Employment Law Blog, I see as providing more general information for both employers and employees. I must admit to some muddling of the employment law part of my practice since leaving my in-house counsel job. Employment law for me has been employer oriented and that has had to change a bit. I think small businesses need access to counsel for employment issues but I am finding few in the area interested in my overtures to provide these services. If I do not scale down employment law as part of my practice, I find Ms. Pugh's blog has some inspirational ideas for this blog.

Taking a far broader scope than this blog is West Virginia Business Litigation. My aim here was to stay closer to home with more specifically Indiana focus. I am finding myself with plenty to write about, so much that posts planned have been postponed, and I find myself envious of this blog.

Potential trouble for employers and income withholding orders -

I already outlined some potential problems for employers withholding child support payments from employees' wages, here comes another source of potential trouble.

Indiana Code 31-16-15-16(b) requires employers with more than 50 employees and more than one of those employees has an income withholding order to send the payments to the state central collection unit by "electronic funds transfer or through electronic or Internet access made available by the state central collection unit." Failing to do this results in a $25.00 civil penalty per child support obligor per pay period. The General Assembly added the penalty last year.

Those employers having less than 50 employees are not required to pay the withheld child support by electronic means. The Department of Child Services has a page describing its free online processing and also where to send checks for those without the electronic payment requirement.

Employers should also read the The Department of Child Services FAQ (Frequently Asked Questions).

Employment law - accomodating religion

Just how far must an employer go in accommodating a person's religion?

I missed this case when it came down from the federal Seventh Circuit Court of Appeals (Indiana lies in the Seventh Circuit) but picked it up from Ross' Employment Law Blog. Here is the case outline from that blog:

What to do when a pharmacist, for religious reasons, refuses to handle birth control prescriptions?

Neil Noesen went to work for Wal-Mart as a pharmacist. He had religious objections to contraceptive articles, so the boss set things up so Noesen did not have to fill birth control prescriptions, take customer orders for birth control, or handle birth control items.

That wasn't enough for Noesen. If a customer phoned in with a birth control prescription, Noesen put them on hold and walked away without alerting someone else. When a customer came to the counter with a birth control prescription, he would walk away without telling anyone that a customer needed assistance.

Wal-Mart fired Noesen, so of course he brought a federal suit claiming a violation of Title VII.

Wal-Mart won. Accommodating an employee's religion cannot impose undue burden on the employer. The opinion is here (PDF format) and it shows as a non-precedential opinion (which means that it cannot be cited). However, I do think the opinion can be educational if not cited as law.

Title VII always protected an employee's religious beliefs from interference by an employee. Yet, I think a trend of more litigation on religious claims exists and the pharmacists refusing to provide birth control is the cutting edge of this litigation trend. Ross'e Employment Law Blog found the case on the Religion Clause blog. I think reading the post there and its comments gives an idea as to the ideological basis for this trend.

Back to the present case, I was thinking what my reaction would be if one of my business clients called with this sort of problem. I tend to err on the conservative side and would probably have counseled accommodation. Even though I think the behavior goes so far beyond what most would consider reasonable to be disruptive of the business. I noticed that Workplace Prof Blog has a post on the case and I do like his description of the employee's behavior:

Given the employee's insubordinate actions, however, I think the Court could have upheld the termination for reasons unrelated to the employee's religious beliefs without doing a religious accommodation analysis.

Even though I agree with the ideas above, I do think the Court needed to do the accommodation analysis. The accommodation analysis forestalls similar cases in the Seventh Circuit. I doubt the decision stops all similar litigation due to my belief that ideology drives these cases and not legalities.

Employee or subcontractor?

A question that never seems to die, sort of like Frankenstein's monster. An employer giving the wrong answer is looking at a variety of problems. I remember reading a few years ago about the IRS scrutinizing small businesses about whether subcontractors were actually subcontractors.

Workplace Prof Blog's post,More on Independent Contractors vs. Employees, makes me think that the problem still exists and may be even bigger than might the conventional wisdom. Workplace Prof Blog has a very succinct description of the problem:

One of the most important threshold issues in any area of employment law is whether a worker should be classified as an independent contractor or an employee. Not only is this classification important for determining whether an employer meets the employee threshold for a statute, but it also indicates whether a worker can bring a lawsuit under these statutes and how a company has to treat a worker regarding such things as employee benefits.

I will point out two ares of law where the classification makes a difference: 1) as alluded to above, tax law; and 2) worker's compensation. From my experience, employers know about those two areas of law and are precisely the reason for miscategorizing workers. Employers cut their costs (employee withholding and workmen compensation premiums) by characterizing employees as subcontractors. This a risky and shortsighted plan.

I suggest any employer who thinks about labelling their employees as subcontractors read the post at Workplace Prof - including his links to other sites.

Franchising and trade secrets

Franchising pretty much requires a trade secret even if not one that is technically a trade secret. Coca-Cola bottlers hang the value of their franchise on the secret of what goes into Coca-Cola while McDonalds' franchisees have its secret sauce. However, until I was reading the Don't Sign An Agreement To Receive Information article at Blue MauMau I was not aware of franchisors having potential franchisees signing off on non-disclosure agreements.

There are franchise investment offerings that are so transparently not innovative, and that can so easily be done without whatever it is that the franchisors pretend they have that is “unique” (yeah, right). They request that a prospect sign a non-disclosure agreement / confidentiality agreement as a condition to being sent the offering circular or to being allowed to attend “discovery day”.

I agree that any franchisor playing this game is one of the following: 1) an idiot who knows not what they are doing; or 2) a con artist. Mr. Solomon suggests: "[y]ou are dealing with a bozo franchise and they are just looking to get a handle on you so that they can threaten you if you don’t buy the franchise and decide to do anything else on your own that may be in a similar business." If these franchisor do think that way, then they are dangerously stupid. But then I also thinking that their "trade secrets" are not so secret as to be protected by the law.

Remember this: get an attorney as soon as you get serious about buying a franchise.

Foreclosure sales - Madison County, Indiana

Finding information on Madison County's Sheriff's sales is not so easy, as I found out in the past half hour. First, the Madison County Sheriff decided that his website looks good in the same brown used in their uniforms. Dark brown with black lettering does not work with my aging eyes. Luckily there is a search function and this is this blog. Here are two direct links needed for finding out about Madison County foreclosures:

1. General information on sale procedures: Sheriff Sale Procedures
2. 
   
3. Sheriff Sale Newsletter

Tip for anyone interested in buying real estate at a sheriff's sale but from outside of Madison County: take a look at the web pages for your local sheriff to see if that county has its sheriff sale information online.

Seventh Circuit Wiki

Let me say first, I do not practice in the Seventh Circuit Court of Appeals. Secondly, this post really does not fit into any category or the purpose of this blog. Last, I think this is cool and so I am going to ignore that this really probably will be of no interest.

The Seventh Circuit has its Practitioner's Handbook on the web as a wiki. A wiki like Wikipedia. Yes, you got to be a lawyer with a good dose of geek in them to be really interested in this. I guess that might describe me to some. After all, what has the Seventh Circuit done? They have made an electronic version of their arcane procedural rules available online for the all the world in a format neutralizing that same arcana. What if the Indiana Supreme Court (which does a very good job of putting its rules online in different formats) did this for its rules?

For anyone thinking I am getting a bit arcane myself, please take a look at these articles on lawyers using wikis:

Online Resources - Overtime Wage Calculator

Workplace Prof Blog had a post about the Depart of Labor providing an online calculator for overtime wages. I could not get the link to work except to start my e-mail program. Google lead me to FLSA Overtime Calculator Advisor. I have no idea how well it works. If anyone uses it from this blog, I would appreciate you leaving a comment in the Comment section.

Franchising - some things to consider

Thoughts for franchisees.

Reading Blue MauMau on Saturday evening focused some ideas I have had on franchisees. Who does not dream of easy riches with a franchise? If not riches, then a comfortable living?

Franchisees need to remember they are going into a business relationship. The franchise circular (the UFOC) are designed to protect consumers from outright fraud but the UFOC can avoid fraud and still trap the unsophisticated franchisee. Some points came out sharply when reading about Quiznos (see my post here on Quiznos). Start with Reflections on the Franchise Relationship on Blue MauMau and read through the comments. Then consider this passage from Franchisee Associations Are Not Social Clubs:

Franchising is not about democracy. Franchising is not about fairness. Here’s the deal – the deal is very one sided – the risks are high – we tell you that it’s a cinch if you believe and want to succeed – that’s our cheerleaders’ favorite cheer. Well, my friends, if you believe that cheerleading is reality, and you sign the contract and then are unable or unwilling to play the game that is going on out on the playing field (the real game), no one is going to change the rules to make tough people play nice. THAT’S WHY YOU HAVE TO BUCK UP AND LEARN TO PLAY THE REAL GAME OF DEFENDING YOUR SIDE OF THE FIELD.

Sometimes litigation remains the only means for the franchisee to defend their side of the field. United Parcel Service is being sued by its franchisee, the gist of their complaint is found in this news release from May 2:

According to the complaint filed by the law firm of Hagens Berman Sobol
Shapiro, franchise owners measure packages in the store, charge the
customer and ship the package to UPS where the company re-measures the
package using what the suit claims is inaccurate techniques and
back-charges the franchisee for the difference.

(Thanks to Wiggins and Dana's Franchise Law Blog for the post tipping me off to this. That post links to the Franchise Law Blog's other posts on UPS). Now where in the UFOC might have this information have been disclosed? I suspect that it was not.

Then read the post, Franchisee Failure, on Blue MauMau. You might also want to check out what else I have written on franchising here.

If you still are interested in franchising, start researching the company. Franchisees need no longer start with the UFOC. I suggest if a franchisee sees a UFOC without knowing any detail about the franchise system than the name of the company, the franchisee is already in trouble. I suggest looking at the stores, and seeing them in operation. See how the public reacts to the product. Talk to the franchisee. Check out the franchisor on the Internet - use Google or Yahoo and their respective news search engines.

Then check out the UFOC. While not wanting to pick on Quiznos, I did catch this paragraph on Blue MauMau:

And starting from electronic page 342 to 362 is a list of Quiznos owners and Area Developers who left the system. It contains their contact information. A prospective franchise owner will want to speak with a number of these Quiznos ex-franchisees.

My reaction was - no kidding, ex-franchisees should always be checked out. Especially those ex-franchisees who are being sued by or are suing the franchisor. Then I would suggest going back over the information from the beginning before going any further. After all that, have an accountant check the numbers and an attorney check the operation. Then think hard for this will be a major commitment in your life.

Reading Around: Chilling Effects Clearinghouse

I discovered the Chilling Effects Clearinghouse this past Saturday. I get asked some simple questions about the Internet (such as will someone get in trouble for posting something stupid to a web page.), but I think this site has the credentials to be a starting point for researching Internet issues. The site describes its credentials and its purpose in the first two paragraphs on the site:

A joint project of the Electronic Frontier Foundation and Harvard, Stanford, Berkeley, University of San Francisco, University of Maine, George Washington School of Law, and Santa Clara University School of Law clinics.

Do you know your online rights? Have you received a letter asking you to remove information from a Web site or to stop engaging in an activity? Are you concerned about liability for information that someone else posted to your online forum? If so, this site is for you.

If the traffic to this blog is any indication, Indiana has not the interest in the Internet found in other states. None of my business clients leap for the chance of a web presence. I do not think that will last for many more years. Facebook and Myspace will change that. I know one client's daughter received abuse via Myspace and we were able to deal well before litigation but we got lucky that the abuse approached the criminal. More troublesome will be the non-criminal attacks on businesses or businesses attacking non-criminal criticism that will appear in blogs and online forums. I suggest reading Defamation Lawsuits at Blue MauMau for background to this kind of problem. Then read Chilling Effects Clearinghouse to keep up on what is happening elsewhere.

Franchising news - Quiznos

Thanks to Wiggins and Dana's Franchise Law Blog and Blue MauMau for the heads up on these news items.

Quiznos lost a motion for a preliminary injunction brought by a franchisee group whose members it had terminated. Wiggins gave a link to this article on Fast Casual.

Quiznos terminated the Toasted Subs members' franchise agreements in early December, saying the group uses hostile efforts to damage the company's reputation. The termination letter was sent after the Toasted Subs organization posted a suicide letter on its Web site from Baber Vhupinder, a longtime franchisee and litigant against Quiznos.

Blue MauMau has a link in the article TSFA Files for Injunction to Quash Quiznos Termination Notices to the Quiznos' termination notices that does not work but the link to the franchisees' Brief does work. Click here to read the Brief in PDf format. Quiznos used the generic "detrimental to the goodwill of the Mark" ground for termination.

Franchisors retain the ability to terminate franchisees for anything the franchisor thinks hurts the goodwill associated with the franchisor's trademarks. I think of these clauses as being akin to the morality clauses that once were part and parcel of Hollywood actor's contracts. Behave well in public or get fired. Here, Quiznos uses this clause for offensive purposes. The franchisees made public their criticisms of Quiznos and I would say that they were damaging to the Quiznos trademark. Deservedly so, too, if true, as reported at Blue MauMau:

In a Rocky Mountain News article this morning, Franchisees terminated by Quiznos seek injunction to stay in system, it states that a slew of lawsuits by franchisees and former franchisees, including Baber, allege that the company promises profits that are out of line with reality; that it forces franchisees to pay approved vendors too much for suppliers; that it allows stores to be built close together and; cannibalize each other; and that it blankets markets with coupons that further lighten the franchisees’ bottom line.”

I wonder about Quiznos' strategy here. I think a public lawsuit is the last place I want to air problems with my clients' franchise structure. Even the appearance of problems can kill a business.

Franchising: Amended Franchise Rule FAQs

Not much to this post but a pointer to the Federal Trade Commission's Amended Franchise Rule FAQs here. I have been more interested lately in franchisees than franchisors and missed the FTC posting this FAQ. Use of the new rule starts July 7, 2007.

Workplace harassment - Dealing with Troublesome Employees

Does your company have a policy of dealing with harassment issues? Some reasons for having a good policy in place.

Not dealing with sexual harassment in the workplace costs a construction company $60,000.00. Such was the story in the May 8th of The Arizona Republic. All because the company lacked a policy for reporting harassment and dealing with the problem in-house.

The Employer's Law Blog reports on Andreoli v. Gates, a case from the federal Sixth Circuit Court of Appeals. The decision came down last month.

The court allowed Andreoli to proceed on her claim because of the inaction on the part of the Department of Defense. An individual can prevail on a sexual harassment claim if the employer was reckless or negligent in training, disciplining, firing, or otherwise taking remedial action when notified of harassment by a co-worker. Here, the court looked at the timing of the incidents and the employer’s response. In the eleven year period since the complaints were first raised, DeLutiis never received sexual harassment training, nor did he ever receive discipline or counseling regarding his behavior. The only discipline DeLutiis received was a memo instructing him to stay away from Andreoli, after she had already left her position.

This case highlights the importance of taking prompt remedial action to address complaints of discrimination or harassment in the workplace. The alleged lackadaisical response by this employer left it exposed to claims that it failed to properly respond to Andreoli′s complaints.

Title VII applies to employers with more 14 or more employees. Small businesses are most likely to have a problem with this type of case (which might make you wonder what was the problem with the Department of Defense). Their very smallness makes a formal complaint and response procedure difficult to keep from sliding into the informality inherent in a small business. That will make no difference when the Indiana Civil Rights Commission comes to investigate.

I had a call last week about harassment but with different facts than this Arizona case. The person calling me was receiving harassment because she received a reasonable accommodation under the Americans with Disabilities Act (ADA). I am waiting now to see what action the business takes to stop the harassment. It was a small, family owned business.

Smaller businesses also find themselves more vulnerable because they do want the expenditure for legal services. Sixty thousand dollars exceeds in terms of magnitude what any preventive legal services would cost the business owner.

Debt relief scams

The SC Bankruptcy & Consumer Law Blog has a post on this subject titled Better Than Bankruptcy? Look Out For These Scams!. I have not heard of the scam Ms. Schelin writes about which does sound like a variation on the old credit repair scam. I would not be surprised that this scam starts showing up in Indiana, so beware. If there were better solutions to credit card debt than bankruptcy, then there would be no federal bankruptcy law. I cannot say it any better than Ms. Schelin:

Don’t let your guard down. No one - literally, no one - has any kind of special “in” with your creditors. If you’ve tried to renegotiate your terms (and you should), and were unsuccessful, then move on to consider other alternatives. Credit counseling - real credit counseling, with an appropriate and well-respected nonprofit organization (and here’s a hint: not all nonprofits are well-respected) - might be one answer. Filing for bankruptcy might be another. If you think you’re there, speak with a lawyer today.

A few words about practicing at home

Since January 1, 1998, my office has mostly been at home except for my sidetrack to Indianapolis from 2000-03. Even then I would say that I would say that I had an exclusively home office only between 2005 and this year. It works for me and I think it works for most of my clients.

It did bother one client very much and I suspect that it bothers some others in other ways. It really distresses my father. I have debated the matter many time. For me, the decision since 2003 came down to this:

1. I could put the usual front with its costs or put the money into other areas of the practice that did something useful for myself and my clients.
2. Where is the office? I do all my work on a computer connected to the Internet. The telephone can reach me wherever I want it to reach me. I use Vonage and that allows me to move the office telephone from home to the office and back.
3. Too many of my business clients can ill afford to come to the office for meetings.
4. When I had the more common sort of office, I always hated clients seeing my working process. Making sausages is prettier.

On the other hand, I need some place to meet non-business clients and they need some place to drop off their paperwork.

So I share office space that allows me to meet with clients by appointment only and for them to drop off documents. I can get my work done. Hopefully, everyone is happy.

What got me to write on this is a bunch of articles that I ran across the past few days. After reading them, I decided that I had made a better choice than I first suspected.

Chuck Newton has several posts about this on his blog: Overhead Creep (no kidding about that one), Et tu, Brute, and What Part Of Solo Do You Not Understand?. I keep my costs down and I can provide good services for a reasonable fee. (I am just enough of a cranky smart aleck to ask anyone balking at my office set up whether they want to pay the higher fees to pay for digs rather than what they are paying for the services.) Keeping the costs down keeps the stress from getting any worse.

Building a Solo Practice, LLC blogs on the general insecurity of our economy and Big Law in general. The post is titled:Do You Need Anymore Reasons To Not Be Part of Big Law?

But that is not the main reason I am bringing this article to your attention. I'm alerting you because so many students tell me they need the security of Big Law, a steady paycheck because of their financial and familial obligations. This article, just one of many, that if you read between the lines you will hear it shouting through a bull horn, 'no security here."

As I tell everyone, my format means that any screwups in the office are mine. I worked for a firm in Indianapolis that spent a lot of money on office furniture and by picking up the tab at Morton's and Shula's. They went under. None of these did anything to impress the clients except the closing of the firm.

Prestige can buy a a lot. Prestige and fifty cents can get you a cup of coffee. If you need some evidence on this, then read this article from The San Francisco Magazine.

Now, I need to get the desk uncovered.

Madison County news: Indigent cases and forms

With absolutely no fanfare or information given to the local attorneys, the judges of the Madison County Unified Courts have set up a process for dealing with indigent (pauper) custody cases. Actually, a bit more than just custody cases. You can also apply for a court appointed attorney for your civil case (that is anything that is not a criminal case).

You go up to the Court Administrator's Office on the fourth floor of the Madison County Government Center, and tell them that you are indigent. If it is a custody case, you get a form petition and an affidavit to prove you are indigent. Now the online Merriam-Webster dictionary defines indigent as being impoverished. That could mean most of Madison County, Indiana but it certainly means being something more than just between paychecks.

Now Indiana has long had a statute allowing for appointing an attorney for poor people in a civil case. I think Madison County has actually done something innovative here by creating a process for implementing the statute. We will see how much dedication they put in carrying out the statute to its fullest.

This statute may still impinge on those who are not indigent. At least Judge Brinkman requires the indigent affidavit if you are seeking to waive the filing fee in a case. A client of mine lacked the $132.00 for court costs and I filed a request that the court costs not be paid up front. Judge Brinkman declined to do so until the indigency affidavit was signed and filed. The moral of this story is: do not file in Madison County unless you have the filing fee in full or are truly indigent.

Blog News

I fixed the e-mail subscription service. What this does is allow you to subscribe by e-mail to the blog. When I update the blog, you get an e-mail. You will find the subscription form towards the bottom of the right hand column.

I hope you find this web log useful as way to keep informed of legal issues that might affect you. Adding this e-mail subscription is meant to make the web log even more useful by sending the information to you rather than having you come to it.

Also, remember that after each article there is the means to comment on the article. I do moderate the comments to eliminate spam but that is the only censorship done to the comments. Do feel free to let me if any particular post was helpful. Or to let me know that it was dreadfully dull!

More automating the office

I wrote about automating the practice under the heading Fees, Automation and Business Clients - it is a long one. This post follows up on that post.

For almost nine years I have been trying to follow Ross Kodner's PaperLess Office concept. Every document coming into the office and every document going out becomes a scan on the computer. Where I differ from Ross Kodner's program is that I do not use Worldox. I am finding that a combination of Paperport (ver. 10) and Copernic desktop search tool handles the document management tasks. (I create a folder for each client under Paperport and I convert the scans into the Adobe Portable Document Formant - PDF - for searching under Copernic. I use Copernic since Google Desktop did not include WordPerfect files in its search parameters.) Crude but effective for a solo office, but I suggest that anyone who has not set up a system like this read everything you can Ross Kodner's site.

Frankly, I see a great benefit from scanning and not touching the hard file. I can read the documents on the computer screen while talking on the computer and not take the time to find the file while keeping a court, a client or another attorney on the line. Another benefit comes from clients who have e-mail: I can e-mail them PDF files without having to copy and send by regular mail. (I did have an odd incident where a client insisted that I had not e-mailed him all the documents but that was the concluding incident of many in a deteriorating relationship. Yes, not every client is a happy person.) Kodner's theory is we cannot eliminate paper and I still agree with that theory. However, I do think that as more clients and attorneys use e-mail that we will get closer to a no paper office (on the other hand, no one wants to hear me rant about my problems with electronic filing with the federal courts). I think this post at TechDirt is more about this future than the present.

What does this have to do with document automation? A lot. Forms received from other attorneys or form books can be can go from a scan to the word processor via Paperport. That they need cleaning up (no OCR - Optical Character Recognition - software is perfect) has less importance when they are going to converted over to HotDocs templates. (I have written a bit more about using HotDocs here on my Indiana Divorce and Family Law Blog.) The time saved by scanning and converting to a WordPerfect document beats typing directly into WordPerfect.

All this does have two weaknesses and one problem. First, making sure that everything is scanned in. I recently hired a girl to do some part-time work. I found she did not scan everything and now she is unemployed. The other weakness lies in the scanned documents being on a desktop machine. Since I acquired a laptop, I expect that problem to fade away

I think I discussed the problem before: documentation only succeeds if the work can be automated. That means in practical terms what gets processed through HotDocs are those documents for an area I practice in on a regular basis or routine work for a particular client.

What does the Internet do for trademarks?

Something I am not likely to see any time soon in my practice but an interesting question. The Internet lacks borders so how does the Internet affect trademark law?

e-Commerce Blog writes on the effect the Internet has on trademark use in the post Web use affects trade-marks and how an English court ruled on the issue.

The court reviewed the case law to determine when a trade-mark is in use via the Internet. The court took the position that placing a mark on the Internet from a location outside the U.K. can constitute use of that mark in the U.K. The fundamental question became whether or not the average consumer of the goods or services in issue within the U.K. would regard the advertisement and site as being directed at him.

Due to the fact the YouTube, MySpace and BadBoy sites all were used to advertise and promote Combs' Press Play album and tour -- including his U.K. dates -- the court determined it was a use directed at users in the U.K.

I wrote above that this will not be something that I will see any time soon. Why not? If you, dear reader, are in business consider the extent of your Internet presence. As more clients expand their Internet business, I suspect this problem will be seen more often. I am wondering if trademark searches should include not only the United States Patent and Trademark Office but also foreign sources also.

Franchising: Darden Restaurants closing 56 Smokey Bones

I caught the story about this in today's Indianapolis Star. I am assuming some of these restaurants were franchisee owned, even though this is unclear from the news.

Darden Restaurants, operator of Red Lobster, Olive Garden and other restaurants, said Saturday it's closing 56 of its Smokey Bones Barbeque & Grill locations, including the one in Downtown Indianapolis and two others in the metro area.

The Star mentions that Darden Restaurants did this to increase profitiablity. Google News provides links to some other articles. From some of these articles I infer they may be corporate stores and that Darden may be looking to sell itself.

From PR Newswire:

"This was a difficult decision because guests continue to give the Smokey Bones experience solid marks and there is a core of restaurants with good sales and earnings levels," said Clarence Otis, Chairman and Chief Executive Officer of Darden. "However, the Smokey Bones concept and related business model was designed to be a nationally advertised brand. Since it is not on a path to achieving this vision, we have concluded that it is not a meaningful growth vehicle for Darden. As a result, we've decided to exit the Smokey Bones business and offer it and the related assets for sale. Even as we make this difficult decision, we appreciate the passion and commitment of the employees of Smokey Bones and we're working to ensure that employees affected by the closures are given opportunities to transfer to other Darden locations. We are convinced this action is appropriate, timely and beneficial to our shareholders."

Articles on Darden as a possible target for buyouts can be found here and here.

Even if the Darden owns these restaurants, this story serves to make a point about franchising. Every franchisee and franchisor needs to think about the sale of the franchise system. Seldom do franchising systems reach the size of McDonalds and a sale of the franchise system is likely, if the system is successful. Of course, every franchisor wants to be as successful as McDonalds. That sums up what I think is the franchisor's interest in selling the system - having such a successful franchise system that someone will pay a lot of money to take over the running of the system.

The issue differs for the franchisee. When the franchisee first looks at the franchise circular the possibility of a sale of the franchise system must be in the franchisee's mind. The franchise agreement provides that the franchisor does certain things for a franchisee but I say that the franchisor brings one overarching thing to the franchise relationship: a marketable brand which will bring profit to both franchisee and franchisor. Within that adjective of marketable lies certain standards. The franchisor requires the franchisee to maintain certain swystem-wide standards. A McDonalds restaurant in Augusta, Maine differs not one essential bit from an McDonalds restaurant in San Diego, California. Customers going from the restaurant in Augusta to the one San Diego can eat without the anxiety of ordering strange food in a strange place. However, the franchisor must also provide a certain level of quality and oftentimes marketing. When contemplating a franchise agreement, the franchisee must be certain that the franchisor's obligations in maintaining the quality of the franchise system are enforceable against the franchisor and the franchisor's successors.

No probate, a house and the owner died years ago

What to do after paying on the mortgage for years and having two siblings? I got asked this question a while back and after some thought decided to blog about this kind of problem. What was my answer?

- Bite the bullet and get an estate opened and hope for the best.

The person asking the question did not like my answer. Without a Will, Indiana's intestacy statute divides the house between the three siblings. That puts the sibling who made the house payments for years (and we will call her sibling #1 from here on) on edge. She wants to keep the house and is far from happy that the non-contributing siblings might get a piece of it.

Sibling #1 does not seem to realize that she has one major problem with her situation. She has been paying the on real estate to which she has no title. Without opening an estate, she cannot get title.

What is meant by title? Title means the ability to show that you own the real estate. Specifically, title means a deed. If you would like a more formal definition, try this one:

Title
n. 1) ownership of real property or personal property, which stands against the right of anyone else to claim the property. In real property, title is evidenced by a deed, judgment of distribution from an estate or other appropriate document recorded in the public records of the county.

So what is the big deal about having good title to the land? Having good title means that the person having title owns the land and if one does not have good title then they cannot sell the land. So let us say sibling #1 pays off the mortgage, she will not automatically own the land. The mortgage company sends a deed to the dead person. Now sibling #1 could record that deed but what happens when she wants to sell the property? Oops, she is not the owner.

Now, if sibling #1 has lived in the house for ten (10) years she might be able to claim title to the house on the basis of adverse possession. I call that very tricky and a good deal more expensive than opening an estate.

If she does open an estate and wants to keep the house, sibling #1 has some options. First, I say the estate owes her for the mortgage payments and other costs of upkeep for the house. Second, she has the right to offer to buy the house house by paying to the other siblings their share of the house. So take the amount paid on the house against the shares of the other siblings and pay the difference - if any.

Let me be brutally frank about all those schemes about avoiding probate - I think they are scams. They made a lot of money for the people selling those books and schemes but they did so by working on the buyer's biases against paying inheritance tax and paying attorneys. Unlike attorneys, the sellers of these schemes will not be around when the problems come up and cost more than consulting an attorney, more than Indiana's inheritance tax and far, far more than the book on avoiding probate cost. If you want to avoid probate then talk to a lawyer and do not do it on your own.

Sites to check out: franchising and bankruptcy

Finding information on franchising is not all that easy. For technical information, nothing beats the FTC site. Franchising news, however, gets trickier. Some sites are just about drawing in potential franchisors and franchisees. Now I have found Blue MauMau and I think it hits all the marks for a franchising news site. Anyone with any interest in franchising should check it out.

I no longer have a consumer bankruptcy practice and for any insolvent businesses I am suggesting state law alternatives . Why? Because I detest the 2005 bankruptcy amendments. However, I still like to keep an eye on what is going on under the new law. I still think that any case involving money means taking bankruptcy into consideration and I am keeping up the creditor side of my bankruptcy practice. So far I have been quite taken with the blog Credit Slips. Credit Slips is a blog written by a group of law professors. Quite a lively read and one I would suggest for others to read.

Child support issues for Indiana employers and employees

Child support affects employers whenever they get an Order from a court for deducting child support from an employee's pay. Distinguishing between an Income Withholding Order and a Wage Assignment does matter much for the discussion here. Regardless of how the court's Order comes to the employer, the point is that it is an order of the court for the employer to take money from the employee's wages.

The employer faces the possibility of being hauled into court for violating the court's Order if the employer does not take the money from the employee's wages . That is called contempt of court. The court may penalize the employer by ordering the employer to paying the amount not deducted from the employee's pay. So do not think about not following the court's Order.

Also, employees fear that they will lose their job when the employer gets an Order deducting child support. Some employers may even think they can fire an employee rather than deduct the child support. Indiana law imposes a penalty upon any employer who does fire an employer for having to process a child support order.

Small business news: New York Time/Small Business Page

I am preparing for a jury trial and have not had much time for posting. I am barely keeping up with what is going on in the outer world. Baseball has started, right? I did notice that the New York Times has now started a section for small business. The headlines pose the possibility of useful information. Without any more preliminaries here is the New York Times' Small Business section.