Posts tagged with "connecticut"

Complying with the FBAR

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If you have a foreign financial account, the federal Bank Secrecy Act may require you to report the foreign bank and financial account (“FBAR”) yearly to the I.R.S. by filing Form TD F-90-22.1.  The purpose of the FBAR is to help the U.S. government investigate persons who may be using foreign financial accounts for illegal purposes, including counter-terrorism, and to identify unreported income maintained in a foreign financial account.

What constitutes a ‘foreign financial account’?

A financial account includes a savings or checking account, securities or brokerage account, futures or options account, an insurance or annuity policy with a cash value, shares in a mutual fund or similar pooled fund, and other accounts maintained with a financial institution.  A financial account is “foreign” if the institution is physically located outside of the United States.  FBAR is not required for an account maintained with a branch, agency, or other office located in the U.S., even if the financial institution is foreign.  An account is not deemed foreign merely because it may contain holdings or assets of foreign entities, as long as the owner maintains the account with a financial institution located in the United States.

Who qualifies as a ‘U.S. person’?

A “U.S. person” must file an FBAR if (i) the U.S. person had a financial interest in or signature authority over at least one financial account located outside of the United States, and (ii) the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

For this purpose, a “U.S. person” means a U.S. citizen or a U.S. resident, as well as a corporation, partnership, limited liability company, and trust and estate formed under the laws of the United States or a state thereunder.

Generally, a U.S. person has a “financial interest” in a foreign financial account if she is the record owner or has legal title in the account, whether or not she is the beneficial owner.

Moreover, a U.S. person has a financial interest in a foreign account held by a nominee, if the beneficial owner of the foreign account is a U.S. person.  Also, a U.S. person has a financial interest in a foreign account where a corporation, partnership, or a trust is the record owner or has legal title in the foreign account, if a U.S. person owns more than 50% of the (i) total value of shares or voting stock of a corporation, (ii) partnership’s profits or capital, or (iii) the trust’s assets or income, as applicable.

A person has a “signature authority” if she has the authority to control the disposition of money, funds or other assets held in a financial account by direct communication (whether in writing or otherwise) to the person with whom the financial account is maintained.

Filing an FBAR

Exceptions to the FBAR reporting are found in the FBAR instructions, including participants in retirement plans that hold foreign financial accounts.

On the FBAR form, taxpayers must report their interest in the foreign financial account and identify the foreign country where the account is maintained.

The FBAR is not filed with the tax return and must be received by the IRS on or before June 30 of the following calendar year being reported.  A request for extension for filing the FBAR is not allowed.

Consequences of a Failure to File

A civil penalty not in excess of $10,000 per violation could apply to a failure to file an FBAR.  No penalty will be imposed if there is a reasonable cause for the failure and the balance in the account is properly reported.  Willful failure to file an FBAR may trigger a civil monetary penalty equal to the greater of $100,000 or 50% of the balance in the account at the time of the violation as well as criminal penalties.  Willfulness is generally determined by a voluntary, intentional violation of a known legal duty.

In the past few years, the Tax Division of the U.S. Department of Justice criminally indicted several taxpayers and advisors for activities associated with U.S. persons holding undeclared interests in foreign financial accounts, and many others are targets or subjects of ongoing federal criminal investigations.  In February 2009, UBS, under threat of criminal prosecution from the U.S. Department of Justice, turned over “secret” bank account information related to 280 of their U.S. clients and subsequently agreed to turn over information on many thousand more.

Credit Suisse reportedly started issuing letters to their US clients stating that a request for information on U.S. account holders has been received and that Credit Suisse has been ordered to turn over the information to the Swiss Federal Taxing Administration, which will then turn them over to the IRS, unless the US clients can demonstrate the turnover of information would violate Swiss law, including the U.S.-Swiss Tax Treaty.

IRS Voluntary Disclosure Programs

Taxpayers with undisclosed foreign accounts can become compliant with the U.S. tax laws by directly participating in the IRS voluntary disclosure program or by merely filing an amended or delinquent returns and FBARs for prior years.  The IRS had issued voluntary disclosure programs in 2009 and 2011 for undeclared interests in foreign financial account.  Under the 2011 program, eligible taxpayer must contact the IRS Criminal Investigation to request participation in the program, must file all original and amended income tax return as applicable, and pay any taxes owed (including interest and penalties).  Under the IRS long-standing voluntary disclosure practice, taxpayers who voluntarily disclosed their foreign bank accounts under the voluntary program are able to avoid potential criminal prosecution.

On January 9, 2012, the IRS reopened the offshore voluntary disclosure program “to help people hiding offshore accounts get current with their taxes.”  The IRS announced that it received over 33,000 voluntary disclosures and collected more than $4.4 billion so far from the two previous voluntary disclosure programs.  Under the 2012 program, a single penalty of 27.5% of the highest aggregate balance in foreign bank accounts during the eight full tax years prior to the disclosure will apply, up from 25% in 2011.  Some taxpayers will be eligible for 5 or 12.5% penalties, same as 2011.

In addition, participants must file an original and amended tax return, pay back taxes and interest for up to eight years, and pay any applicable accuracy-related and/or delinquency penalties as applicable.  Unlike the 2011 program, there is no set deadline for people to apply, and the terms of the program (e.g., penalties may be increased for all or some taxpayers) could change at any time going forward.

Conclusion

Generally under the voluntary disclosure program, taxpayers can reasonably calculate the total cost of resolving all offshore tax issues and avoid potential criminal prosecution.  Taxpayers who do not make voluntary disclosure risk detection by the IRS, substantial penalties (including the civil fraud penalty and foreign information return penalties), and possible criminal prosecution.

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If you have any questions regarding FBAR reports or compliance, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a consultation today.

How to Survive an IRS Audit

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Taxpayers in general have about a 1% chance of receiving an IRS audit each year.  You beat the odds and your tax return has been selected for an audit.  What does this mean and what do you do?

What is an IRS tax audit?

An IRS tax audit means that the IRS is examining your tax return carefully for the accuracy with intent to verify the correctness.  Your return may have been selected (i) based on the IRS’s computer program that scores returns based on certain red flags the IRS has identified (e.g., Schedule C filers, cash basis businesses, excessive deductions), (ii) based on information received from third-party documentation, such as Forms 1099 and W-2 that do not match the information reported on your return, or (iii) to address questionable treatment of an item and to study the behavior of similar taxpayers in that market segment in handling the tax issue.

It is helpful to understand the statute of limitation under which the IRS audit is conducted.  In most cases, the IRS has 3 years from the date the tax return is filed to assess any additional tax.  Typically, this means the IRS will issue an audit notice 12 to 18 months after the tax return is filed and have 1 to 2 years to complete the audit.  If the audit is not completed within the 3 year period and the IRS does not timely assess additional tax liability, the taxpayer is generally not liable for the additional tax.

However, if the taxpayer (is found to have) underreported income on the tax return by 25% or more, then the IRS has 6 years to audit and assess tax deficiency from the date the return is filed.  In the case of fraud, the IRS has unlimited time period to audit the tax return.

The Audit Process

The audit may be conducted by mail, in taxpayer’s place of business or preferably at its representative’s office (to minimize the IRS’s access to documents and information), or in the IRS offices.  The IRS will typically request information and documents to review, and may ask to interview the taxpayer.  The law requires you to retain records used to prepare your tax return, and generally you should keep them for three years from the date the tax return was filed.

During the audit process, taxpayers have certain rights:  (i) the right to professional and courteous treatment by the IRS employees, (ii) right to privacy and confidentiality about tax matters, (iii) right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided, (iv) a right to representation by oneself or an authorized representative, and (v) right to appeal.

The audit may conclude with: (i) no change to the return because all of the items under review were substantiated, (ii) taxpayer agreeing with the IRS’s proposed changes to the tax liability, or (iii) taxpayer disagreeing with the IRS’s proposed changes.

Protesting IRS Proposed Changes

If you agree with the IRS proposed changes, you can sign the examination report, and if money is owed, several payment options may be available.

If you disagree with the IRS findings based on the tax law, a conference with a manager may be requested for further review of the issue.  In the case that an agreement cannot be reached with the examiner’s supervisor, the examiner will forward your case for processing and you will receive a letter (known as a 30-day letter) notifying you of your right to appeal the proposed changes within 30 days.

A formal written protest within 30-days is usually required to appeal the case to the IRS Appeals division.  The IRS Appeals division is separate and independent of the IRS Examination division which conducts the audit, and is designed to settle most disputes without going to court.  If is important to respond timely to the 30-day letter if you want to appeal your case.

If you do not respond to the 30-day letter (or if you do not reach an agreement with the IRS Appeals Officer), the IRS will send you a letter (known as a 90-day letter), notifying you of your right to file a petition with the United States Tax Court within 90 days.  Alternatively, you may take your case to the United States Court of Federal Claims or the United States District Courts.

Taking your Case to Court

Generally, the Tax Court hears your case before any tax has been assessed and paid.  If you do not file your Tax Court petition on time, the proposed tax will be assessed, a bill will be sent to you and you have to pay your taxes or collection can proceed.

The District Court and the Court of Federal Claims hear tax cases only after you have paid the tax and filed a claim for a credit or refund with the IRS on Form 1040X.  Generally, you must file a claim for a credit or refund within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.

If the IRS rejects your claim, you can file suit for a credit or refund in the District Court or in the Court of Federal Claims within 2 years from the date IRS rejects your claim.  You can also file suit for credit or refund if the IRS has not delivered a decision within 6 months since you filed a claim.

The IRS Appeals Office will normally consider any case petitioned to the United State Tax Court for settlement before the Tax Court hears the case.  You may be able to recover reasonable litigation or administrative expenses to defend your position with the IRS if you are the prevailing party, exhaust all administrative remedies within the IRS, your net worth is below certain limit and other requirements are met.

Potential Penalties

If you owe any additional taxes, you must pay interest on the additional tax, and interest is generally calculated from the due date of your return to the date of your payment.  Interest, however, may be suspended or abated under certain specific circumstances.

If you owe any additional taxes, various civil tax penalty provisions could apply, including the 20% accuracy related penalty on the total understatement of tax, failure to file penalty, failure to pay penalty, and civil fraud penalties equal to 75% of any federal tax due to fraud, plus interest on penalties.  Worst case, possible criminal charges (misdemeanors and felonies) could arise in applicable cases.

When faced with an IRS (or a state) audit, the goal is to limit the scope of the auditor’s review and limit your financial impact, and settle any disputes as early as possible during the examination or appeals process.  The first thing you should do is consult a tax counsel who can assist you, especially if you have complex or sensitive issues, since settlements of disputes often involve legal analysis of the tax law and an in-depth understanding of the tax procedure.  You should consult a tax counsel if you have potentially sensitive tax issues that might involve criminal tax matters.

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If you have any questions regarding IRS audits, or tax law in general, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a consultation today.

Failure to Warn Case Against Generic Ibuprofen

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A federal appeals court has reinstated a lawsuit against the maker of a generic brand of ibuprofen. The lawsuit is on behalf of a child who suffered liver damage after taking the drug as prescribed after surgery. The case holds generic drug makers to the same labeling standard as makers of patented drugs. The case alleges failure to warn of ibuprofen risks by the drug maker. The court says the duty to warn applies to generic drug makers.

Drug Label Failed to Warn of Known Risk

Ibuprofen is a popular over-the-counter painkiller. The lawsuit says the drug is known to cause liver failure under some circumstances. The label contained no warnings about this potential side effect.

In 2009 the Supreme Court ruled drug makers can be sued for failing to warn of the risks of a medication even though the FDA has approved package or label warnings. This ruling makes clear the same standard applies to makers of the generic forms of the drug. Failure to warn is one of the main theories of product liability law.

By now everyone should be clear on the risks of liver damage associated with the two common aspirin alternatives. The FDA instructed drug makers to limit the amount of acetaminophen in prescription painkillers like oxycodone and hydrocodone. As this case shows, what you don’t know can hurt you.

By: Arthur Buono

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If you have any questions relating to a personal injury claim or would like to schedule a free consultation, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com.

Nightclub Owners Agree to $4.2 Million Settlement in Wrong-Way Crash Case

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Case Background

The parents of Connecticut College student Elizabeth Durante reached a settlement in their wrongful death lawsuit against the owners of the Ultra 88 nightclub at Mohegan Sun Thursday for $4.2 million.

Durante, a 20-year-old aspiring medical student, had recruited fellow students for a humanitarian mission to Uganda during spring break in March 2009 and was en route to the airport when she was killed in a wrong-way collision on Interstate 395 that was caused by an intoxicated nightclub patron Daniel Musser.

Durante’s parents, Keith and Kathleen Durante of Islip, N.Y., had sued the club’s Boston-based owners, Plan B LLC, and the Lyons Group, and its permittee, Patrick Lyons, claiming the nightclub had acted recklessly and negligently.

The Durantes and attorneys involved in the case agreed they would not comment publicly on the settlement, the details of which were put on the record Thursday afternoon by Hartford Superior Court Judge William H. Bright Jr.

The Settlement

The judge released a jury that had listened to two days of evidence in the case before the parties agreed to the $4.2 million figure. In reaching the settlement in state court, the Durantes also agreed to release the nightclub backers from a case that is pending in Mohegan tribal court, according to a court transcript.

New London attorneys Robert I. Reardon Jr. and Kelly E. Reardon represented the Durantes. Attorneys Scott Behman, Frank Ganz and Domenick Secundo from the Wallingford law firm Behman Hambelton represented the club and its backers.

Musser, then a sailor stationed at the Naval Submarine Base in Groton, had been drinking at Ultra 88 for several hours before he drove the wrong way out of the casino in the early morning hours of March 7, 2009. Musser’s car collided head-on near Exit 79A on I-395 with a van carrying Durante and seven other students to Logan Airport.

Pretrial Settlement Discussion

Pretrial settlement talks were unsuccessful, so the sides selected a jury and testimony began Tuesday in Hartford Superior Court. Bartender Sarah Webster, who sold Musser several drinks at the nightclub before calling security to eject him for lewd behavior, had been on the witness stand for several hours when the settlement talks resumed.

Musser, who had a 0.13 blood alcohol level following the crash and is serving a 75-month sentence for second-degree manslaughter, was slated to testify on Friday had the trial continued.

Three other students and the van driver had also sued Ultra 88 and had settled their lawsuits during jury selection. The Durantes had initially sued Mohegan tribal officials, but a judge ruled they had sovereign immunity.

In late 2009, following the deaths of Durante and two others that occurred after patrons left the casino under the influence of alcohol, the tribe said it was expanding its measures to prevent drunken driving.

By Karen Florin, theday.com

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If you have any questions relating an auto accident, wrongful death claim or would like to schedule a free consultation, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com.

Surviving Medical Malpractice

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It sometimes seems that friends and family are constantly in and out of doctor’s offices and hospitals.  We once went six months straight with a different friend in the hospital each month.  Hospitals are amazing places staffed by people whose job is to help you get better.  Unfortunately, that doesn’t always happen.  Sometimes people are beyond help.  Worse yet, sometimes the actions or inactions of the doctors or nurses can unnecessarily injure or kill a patient.  This happened to a friend of mine almost five years ago.  She is still paying off the medical bills from her hospitalization despite the fact that her doctor committed medical malpractice and she came within a few hours of dying.

So, what’s the problem, why is she paying off the bills, including the fees of the doctor that nearly killed her?  None of the attorneys she spoke to would take her case.  Why?  Because she lived.

Medical Malpractice Cases

That’s right.  If she had died they would have been happy to help her husband go after the people responsible, but because she lived they felt the damage wasn’t catastrophic enough.  Apparently weeks in the hospital, hundreds of thousands of dollars of medical bills that her insurance didn’t cover, and inability to work for about a year wasn’t catastrophic.  It was incomprehensible to me that medical professionals nearly killed her and then legal professionals did nothing to right the wrong.

I’ve done some research and discovered that my friend isn’t the only one who has been left out in the cold.  It turns out one of the reasons attorneys are so picky about the cases they accept is that it is very hard to win a medical malpractice case.  The things an attorney will consider in taking your case are:  liability, damages, and who would pay the damages.  If you think you have a potential medical malpractice claim, here are some things you should consider in deciding what to do next.

Do you live in a state that requires you to first try to work things out through mediation or arbitration? 

The process can vary from state to state so you may want to ask a legal professional in your state what to expect.

How long ago did this happen?

While there can be variants in different states’ statutes of limitations, if what happened was over two years ago you may find it hard to bring your claim now.  Seek the advice of a lawyer on this for your state’s particular rules and any factors that may extend the time you have to bring suit.

Was your doctor negligent? 

Negligence can come in many forms.  Common ones include: misdiagnosing a problem, failure to treat a problem correctly, giving the wrong medication, and failing to warn you of the risks of surgery or other procedures.  Of course, even if your doctor did misdiagnose you, that doesn’t automatically mean you can take him to court and win.  The question then becomes: was that a common enough misdiagnosis that other doctors would have made the same mistake?  That leads to the next question.

How would your doctor’s actions compare to those of other doctors? 

If the average practitioner would have done the exact same thing, you’re probably not going to be able to win a lawsuit.  Your doctor’s actions have to be judged in light of a standard of care observed by doctors.  This guarantees that you can’t go after a doctor just because he isn’t on the cutting edge of research or number one in his field.  If your doctor’s actions were in line with accepted medical practice, then he’s probably covered.  However, if other doctors are surprised or perplexed by the actions of the one who caused your injury, you might be able to bring a case against him.

What damages did you suffer? 

This is another one of those fuzzy areas.  Of course, some damages such as medical bills are obvious.  However, you also need to think in terms of loss of ability, pain and suffering and what the short and long term effects will be.  What makes this difficult is that this varies greatly from person to person.  For example, loss of a toe for a professional dancer could be much more catastrophic than for a banker.  The physical marring and the loss of balance could negatively impact a dancer’s work and income whereas a banker should be able to do his work just fine without the toe.

There are a lot of factors that affect a medical malpractice case.  If you think you have one, seek out an attorney as soon as possible.  Keep in mind the above list so you know what to ask and what to expect from the meeting.  Don’t be too shocked if the attorney refuses to take your case.  Do seek out a second opinion, just like you would from a doctor!

However, if multiple attorneys tell you the same thing then the best thing you can do for yourself is let it go.  Work on recovering physically and financially as fast as you can.  A lawyer can help you work out the details of your medical financial obligations and how to best handle them.  The important thing is to do what you can to minimize the impact and get on with the rest of your life and do your best to thrive, not just survive!

By: lawyers.com

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If you have any questions relating to a personal injury claim or would like to schedule a free consultation, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com.

‘Distracted Doctoring’ a Danger to Patients

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Distractions From Patient Care

A survey found that 55 percent of technicians monitoring bypass machines admitted to talking on cell phones during surgery. Half admitted to texting while in surgery. A widely read editorial in Anesthesiology News by Peter J. Papadakos, MD, says health care workers today are “fixated on computer screens” and rarely receive information directly from their patients. Papadakos referred to a study presented to the American Society of Anesthesiologists this year that said nurse anesthetists and residents were distracted by something other than patient care in 54 percent of cases. The study further cited surfing the Internet as the primary distraction. All of these distractions serve as a potential danger to patients.

Additionally, a report in The New York Times cited polls of medical professionals in which a majority of respondents admitted using cellphones during critical procedures. The Times cited a survey of medical technicians published in Perfusion, a journal about cardio-pulmonary bypass surgery, which found that 55 percent of technicians who monitor bypass machines acknowledged talking on cell phones during heart surgery and half said they had texted while in surgery.

“Why does anyone carry a cell phone into an operating room?” Patrick A. Salvi, managing equity partner of Salvi, Schostok & Pritchard P.C. in Chicago, asked. “The patient on the table deserves the undivided attention of everyone in that room.”

Malpractice of Healthcare Workers

Salvi, a medical malpractice attorney, expressed concern that healthcare workers’ increased reliance on electronic devices has become a distraction that has led to medical errors and injuries.

“We’re dismayed by reports that say doctors, nurses, technicians and others providing medical care are spending too much time focused on smartphones, computer screens and other devices when they should be paying attention to their patients.” “We’re not against the use of electronic devices for delivery of medical records or even personal communication, but it is absolutely crucial that a focus on the patient is not dropped from the accepted standards of medical care,” said Salvi.

Anyone believing their injuries or the injury or death of a loved one in a hospital or another medical setting may have been caused by medical errors resulting from distraction should contact an experienced medical malpractice attorney immediately.

By: Larry Bodine

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If you have any questions relating to a medical malpractice claims, medical negligence or injury, or a personal injury claim or would like to schedule a free consultation, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com.

In Marriage Dissolution, Alimony Award Was Determined by Length of Marriage and Stress in Relationship

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On July, 15, 2011, following trial in a Stamford based dissolution action, Judge Wenzel ordered the defendant husband to pay alimony to the wife as follows: from August 1, 2011 to December 31, 2011, the sum of $9,500 per month; from January 1, 2012 through December 1, 2012, the sum of $8,000 per month together with 30% of his gross income between $200,000 and $350,000; from January 1, 2013 through December 31, 2014 (or the closing for the sale of the marital residence, whichever occurs first) the sum of $6,000.00 per month together with 20% of his gross income between $200,000 and $300,000; and from January 1, 2015 until his 65th birthday, the sum of $4,000 a month.

Case Details

The Court found that the parties were married for approximately twenty-two (22) years.  Before marrying, they both lived and worked in New York City.  They moved to Connecticut around the time they got married and bought a house in Stamford.  In the late 1990s, after having three children, one of which was diagnosed with autism, they moved to New Canaan, where they purchased a new home.

The wife accused the husband of having multiple affairs, although the court noted she was unable to support her suspicions.  The wife also alleged that over the course of the marriage the husband spent long hours at his business, traveling frequently and staying at work late into the night, leaving her with all the responsibilities of running the household and caring for their special needs child.

The Husband denied the affairs and alleged that the wife had an extra-marital relationship of her own.  The wife concealed the physical component of the relationship for several years, but finally admitted to it immediately before her deposition.  The Court ultimately found the causes of the divorce to be attributable to the wife, and that her accusations were made solely for tactical reasons.  Nevertheless, the court held that its assessment of the cause of the breakdown of the marriage could not play a significant role in fashioning its alimony award.  Instead, it considered the length of the marriage and the fact that there had been great hardship and stress during the last half of the parties’ relationship.

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If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com. We offer free initial divorce consultations as well as free initial consultations on all other familial matters.

Boost in Divorce Boosts Economy

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The number of Americans getting divorced rose for the third year in a row to about 2.4 million in 2012, after plunging in the 18-month recession ended June 2009, according to U.S. Census Bureau data. Whatever the social and emotional impact, the broad economic effects of the increase are clear: It is contributing to the formation of new households, boosting demand for housing, appliances and furnishings and spurring the economy. Divorces are also prompting more women to enter the labor force.

“As the economy normalizes, so too do family dynamics,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Birth rates and divorce rates are rising. We may even see them rise strongly in the next couple of years, as households who put off these life-changing events decide to act.”

Divorce Rates

Divorces were at a 40-year low in 2009, according to Jessamyn Schaller, an economics professor at the University of Arizona in Tucson, citing data from the federal government’s National Center for Health Statistics. The divorce rate more than doubled between 1940 and 1981 before falling a third by 2009, according to figures from NCHS, based in Hyattsville, Maryland.

The rise in divorces has coincided with an increase in household formation. Almost 5.3 million households have been formed in the past four years after the figure slumped to fewer than 400,000 in 2009, according to the Census Bureau. That is bolstering the need for apartments, condos and furnishings.

“Separations and divorce often create additional housing demand by creating two households when there was one,” said David Crowe, chief economist at the National Association of Home Builders in Washington.

Home Construction Rebound

That has contributed to the rebound in home construction. Housing starts surged 67 percent to 923,400 in 2013 from 2009, according to Commerce Department data. Multifamily housing starts have almost tripled since the recession and accounted for 33 percent of residential construction in 2013, up from 20 percent in 2009.

Newly single men have been renting apartments in suburban markets as they seek to stay close to their children and attend school events, said Gregory Mutz, AMLI Residential Properties Trust chief executive officer. The Chicago-based company develops and acquires luxury apartments in the U.S.

“In unhappy marriages, they have started having the macroeconomic ability to unwind,” he said. That is creating “a little bit of a tailwind” for apartments.

About 150,000 divorces were postponed or avoided between 2009 and 2011, said Philip Cohen, a sociology professor at the University of Maryland in College Park who linked breakups to the economic cycle in a January 2014 paper.

Marriage and Unemployment

Both marriages and dissolutions are tied to unemployment, University of Arizona’s Schaller found in a May 2012 paper. Each one percentage point increase in the jobless rate is associated with a 1.5 percent decrease in the marriage rate and 1.7 percent drop in the divorce rate, she calculated.

Unemployment slid to a five-year low of 6.6 percent in January from 10 percent in October 2009. Home prices increased 22 percent in third quarter of last year compared with the first quarter of 2012, partially recovering a 35 percent drop from 2006’s second quarter, according to the S&P Case-Shiller U.S. Home Price index.
Story: Goldman: Corporate Profits Grew Five Times Faster Than Wages in 2013

Rising stock and home prices are giving couples greater financial security. Household net worth for the third quarter last year was more than $8 trillion above its pre-recession peak of $69 trillion reached in same period in 2007, data from the Federal Reserve showed in December.

Credit: Steve Matthews, Bloomberg news: http://www.businessweek.com/news/2014-02-18/worsening-u-dot-s-dot-divorce-rate-points-to-improving-economy

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If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com. We offer free initial divorce consultations as well as free initial consultations on all other familial matters.

ESI or “Electronically Stored Information” – The Hidden Litigation Tripwire

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When examining the impacts of ESI technology, we must understand that we live in a digital world.  So prevalent is “data” that we forget that we are surrounded by visual portrayals of streams of zeroes and ones.  We have computers at work as well as at home, and laptops, PDA’s, and “Blackberrys” to keep us connected to e-mail, voice mail, and text messages while we vacation or commute (and blur the distinction between the two).  It has been said that technology is a wonderful slave and a terrible master.

Technology may also present the least understood and a most dangerous trap for the unwary litigant—one that can lose a case before it is even begun.  The solution is a timely and thoughtful “litigation hold” letter, and this article will explain when one has to be sent, and what it should say.

Adoption and Aftermath of the Federal Rules of Civil Procedure

Over the years, the Federal and State Rules governing pretrial discovery have generally kept pace with societal changes so that discovery vehicles such as Requests for Production could be tailored to fit the myriad and unique circumstances that surround any case, and perform as designed.  Technological advances, however, have pulled far ahead of the rules, and Courts have been scrambling to catch up.  Thus began the evolution of discovery of “electronically stored information”, or “ESI.”

Court interpretation of the discovery rules has given lawyers and litigants guidance on how to uncover ESI, but they also impose draconian penalties for conduct that heretofore might have been countenanced by a well meaning and lenient jurist.  The purpose of this article is to warn business owners and their counsel of the unseen pitfalls of ESI, and ensure by means of a “litigation hold” letter that devastating sanctions are avoided.  Simply stated, a “litigation hold” letter commands a party (or client) to locate, segregate, and preserve documents and data that may be relevant to pending or threatened litigation.

Relevant Court Cases: Zubulake IV and Pension Committee

In 2003 and 2004, Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York, decided two in the series of the Zubulake v. UBS Warburg LLC cases and introduced a brave new world of ESI discovery.  In 2010, Judge Scheindlin decided Pension Committee of the University of Montreal Pension Plan v. Bank of America Securities, LLC, 2010 U.S. Dist. LEXIS 1839 and dispelled any doubt about the duty to preserve and produce ESI, and the penalties to be imposed for its breach.

One teaching of Pension Committee is that the rules articulated in Zubulake are now “well established” and lawyers and litigants ignore them at their peril.  Judge Scheindlin leaves no room for interpretation or debate:

“Possibly after October, 2003, when Zubulake IV was issued, and definitely after July, 2004, when the final relevant Zubulake opinion was issued, the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” 2010 U.S. Dist. LEXIS at * 10.

The corollary teaching of Pension Committee is that if a party is currently in litigation or reasonably anticipates litigation, then such party in conjunction with its counsel must issue a timely and written litigation hold and supervise and oversee that hold diligently and in good faith, or face sanctions to include termination of the underlying case to its extreme prejudice.

Consequences of Misconduct with Respect to ESI

A party to litigation or a party that reasonably anticipates litigation (more on that amorphous concept later) has a duty to preserve, collect, review and/or produce relevant evidence.  In failing to discharge that duty with respect to ESI, the party’s conduct may amount to negligence, gross negligence (a failure to exercise even that care which a careless person would use), or willful and bad faith misconduct (an intentional act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow).  In each instance, available sanctions ratchet up accordingly.

With regard to the duty to preserve, post-Zubulake, the failure to issue a timely, written litigation hold will likely rise to the level of gross negligence.  With respect to the duty to collect, the failure to collect paper or electronic records from “key players” (another “fuzzy” concept that may even include former employees) constitutes gross negligence or willfulness, in contradistinction to failing to collect records from all employees, which may be viewed as mere negligence and carry a lesser penalty.  As noted by Judge Scheindlin, “[e]ach case will turn on its own facts and the varieties of efforts and failures is [sic] infinite.”  Id. At * 12-13.

So what is a business owner/HR executive/general counsel to do?

The first step is to understand when the ESI duty to preserve, collect, etc. attaches.  Where a party sues or is sued, that particular point in time is clearly defined.  But when must a party “reasonably anticipate” litigation?  If one or two employees get a mere whiff of threatened litigation, that does not impose an “all hands on deck” company-wide duty to preserve.

If those same employees, however, document their concerns with an identifiable plaintiff and targeted defendant, then the duty to preserve would arise well in advance of the actual filing of the lawsuit.  Often, it is middle-management that first sees litigation storm clouds on the horizon, and they need to be conditioned to alert senior management and outside counsel to threatened litigation.

Once the alarm is sounded, the litigation hold letter must be carefully drafted and quickly disseminated.  Each situation is different, and this is not an area where a generic, “one size fits all” form letter can be sent.  Management and counsel should collaborate on ensuring company-wide compliance and the letter should emanate from the company’s upper echelons (e.g., CEO, COO, and CIO).  Implementation and supervision of the litigation hold cannot be delegated away and senior management must remain involved and responsible throughout the process.

In the words of Judge Scheindlin, “[i]n short, it is not sufficient to notify all employees of a litigation hold and expect that the party will then retain and produce all relevant information.  Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.”  Zubulake V, 229 F.R.D. at 432.

Conclusion

The litigation hold letter is both a sword and a shield.  It is a recognized and ubiquitous “terrain feature” on any litigation landscape and litigants and lawyers are now on notice that they are expected to be familiar with the evolving law and conform fully to its requirements.  Every case is different, however, and must be analyzed and evaluated on its own peculiar facts and circumstances.

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If you have any questions relating to litigation hold letters, or ESI in general, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a  consultation today.

Liability Under Dram Shop Act Requires “Visible Intoxication”

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The Appellate Court of Connecticut considered whether or not a trial court’s denial of a motion to set aside the verdict in a case involving the Dram Shop Act was an abuse of discretion, because a required element of the offense charged was not established by the plaintiff.

Case Background

In this case, a citizen and his friend were at a restaurant-bar where they were playing billiards. The citizen consumed five beers, two alcoholic shots, and a blackberry brandy within a four-hour period, but did not exhibit any physical signs of intoxication. Nonetheless, while drunk, he purchased an alcoholic beverage from the restaurant’s bartender. Subsequently, the citizen and his friend left the restaurant-bar and were involved in an accident, resulting in the friend’s death.

The estate of the friend (plaintiff) brought a wrongful death action against the owners of the restaurant (defendant), claiming liability under the Dram Shop Act, Connecticut General Statutes (CGS) § 30-102. A jury found in the plaintiff’s favor and awarded $4 million in damages, though the defendant sought reduction to the statutory $250,000, which the court granted. The defendant also filed a motion to set aside the verdict and a directed verdict, arguing, in part, that “no evidence was presented from which the jury reasonably could have concluded that [the citizen] was intoxicated” under CGS § 30-102. The motion was denied, and the defendant appealed, arguing that the trial court abused its discretion in denying the motion.

Proof of “Visible Intoxication” Required

CGS § 30-102 is the statutory mechanism through which a plaintiff may recover damages from one who sells alcohol to an intoxicated person, and such person subsequently causes an injury. For the plaintiff to prevail in such an action, he or she must prove that “there was (1) a sale of intoxicating liquor (2) to an intoxicated person (3) who, in consequence of such intoxication, causes injury to the person or property of another.” At issue on appeal in this case was whether or not the second element requires proof of “visible intoxication” or what amounts to per se intoxication.

The Appellate Court agreed that a showing of visible intoxication was required, and stated that for purposes of CGS § 30-102, “an individual must exhibit some type of physical symptomology in such a way that an observer could perceive that the individual was indeed under the influence of alcohol to some noticeable extent.” In addition, the plaintiff must present evidence that shows the subject in question was either visibly or perceivably intoxicated.

Appellate Court Ruling

In this case, the Appellate Court noted that while the evidence presented at trial may establish intoxication as it is used in our DUI law (CGS § 14-227a), it was insufficient to prove intoxication under CGS § 30-102. As the Court elaborated, the plaintiff did not present any evidence of visible intoxication – indeed, there was no evidence at all showing that the citizen “was exhibiting any visible or perceivable indications that he was intoxicated.” Therefore, the court abused its discretion in denying the motion to set aside the verdict, because based on the evidence presented, a jury could not have found the required element of “intoxicated person.” Therefore, the judgment was reversed and case remanded.

Written by Lindsay E. Raber, Esq.

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If you have any questions regarding this posting, or any other matter, please do not hesitate to contact Attorney Joseph C. Maya at Maya Murphy, P.C. in Westport, Connecticut at (203) 221-3100 or JMaya@Mayalaw.com.