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Tuesday
Jan262016

On the Road: Safer Rental Cars

Injury Attorney Los AngelesAccident Attorney

by David B. Bobrosky

(818) 907-3254

 

A mind boggling number of cars are on the recall list for safety problems – including about 34 million American vehicles for defective Takata airbags alone. Additionally, last year was a record for the National Highway Traffic Safety Administration, which levied nearly $300 million in fines against Takata, Honda, Chrysler and BMW, according to Car and Driver.

Defective Cars

Recalls and fines are all well and good for holding automakers and their suppliers accountable for safety but sometimes, it takes solid legislation to curb the defects that injure and kill drivers and their passengers. That may come with the Raechel and Jacqueline Houck Safe Rental Car Act.

The Safe Rental Car Act is named for two sisters driving north from Ojai to Santa Cruz in a rented PT Cruiser in 2004. While driving, the car swerved off California Highway 101, hit an oncoming 18-wheeler and then burst into flames.

Initially the rental company blamed bad driving, and even speculated the accident wasn’t an accident at all – that Raechel (the driver) committed suicide and killed her sister as well.  The truth however, is that there was a recall for PT Cruisers because of faulty power steering hoses, which potentially could lead to loss of steering and fires.

There were no laws prohibiting vehicle rental companies from continuing to loan out cars despite these dangerous recalls. In fact, an area manager for Enterprise (the company that rented the car to the Houck sisters) said that it was corporate policy to rent out unrepaired, recalled vehicles if no other cars were available.

Cally Houck, mother of Raechel and Jacqueline, spearheaded a campaign to put a stop to this policy, which she considers “corporate malfeasance”. Enterprise admitted liability and was ordered by a jury to pay the Houck parents $15 million in 2010. The company began supporting the Houck Bill shortly thereafter, and was soon followed by Hertz and Avis.

The Houck Bill: Corporate Roll Call

Since then, several organizations and corporations (including the American Car Rental Association, Honda and General Motors) eventually helped champion Houck’s cause.

On the other hand, the Alliance of Automobile Manufacturers and the National Automobile Dealers Association opposed the bill, citing less dangerous defects like mislabeled parts and other minor issues which may prohibit companies from getting their cars leased or sold.

Chrysler, maker of the PT Cruiser and company subject to some of those NHTSA fines mentioned above, was opposed to the Safe Rental Car Act.  

Car Recall

The bill also found opposition with car dealers, who feared a law that could pit large rental companies against consumers – who should the dealerships service first, given a finite number of parts and services available? Auto dealers also argued that they shouldn’t be treated like rental companies, as they only keep a few cars on hand as “loaner vehicles” when customers come in for service. 

Safer Cars: Where Do we Stand Now?

The Houck Safe Rental Car Act passed both the U.S. House of Representatives and the U.S. Senate and was then signed by President Obama as part of the Fixing America’s Surface Transportation (FAST) Act. It amended §30102(a) of title 49, U.S. Code. The law now affects (a) vehicles under 10,000 pounds, (b) rented without a driver for less than four months, (c) that are part of a fleet of 35 or more vehicles (most auto dealers providing “loaner” vehicles will be exempt from the law under this condition) used for rental purposes. 

  1. Rental companies will not be able to rent or sell vehicles once they receive notification of a recall approved by the NHTSA until the defect is remedied. 

  2. Companies must comply within 24 hours of notice, unless the company has more than 5,000 vehicles in service. In that case, vehicles must be grounded within 48 hours of notice. 

  3. A company may rent, but not sell or lease, recalled vehicles if the remedy is not immediately available and if the company takes action to eliminate the risk (i.e. the company may remove defective floor mats that may jam under gas and brake pedals, should replacement mats not be immediately available from the manufacturer). 

The Secretary of Transportation will submit a congressional report within a year of enactment of the Safe Rental Car Act, regarding the effectiveness of the amendments and findings of related studies.

This may not be the far-reaching safety bill that Cally Houck initially intended, but hopefully, it will help prevent or at least minimize the number of truly horrible accidents like the one that took her daughters’ lives, from occurring in the future.

David B. Bobrosky is a Shareholder in our Personal Injury Practice Group

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Friday
Jan152016

To Bifurcate, or Not to Bifurcate: That is the Divorce Question

Divorce Attorney

 

 

by Veronica R. Woods

818.907.3250

 

Divorce Bifurcation

 

Some divorcing couples may want their divorce resolved as quickly as possible. In California, the legal minimum time requirement that a dissolution can be entered is six months from the date of service of the Petition to the entered judgment. However oftentimes, complex financial matters or other contentious questions make the process much longer.

Fortunately, California’s Family Code provides an alternative option: Courts may allow parties to request a bifurcation, which essentially gives the Court the leeway to grant a divorce before other outstanding issues are resolved. Bifurcation is the separation of one or more issues in a case.

The California Rules of Court: Rule 5.390 provides for the separate trial of 13 issues, if a quicker resolution of a family law matter may help move proceedings along: 

  • Postnuptial or prenuptial agreement validity
  • Date of separation
  • Date of asset valuation
  • Separate vs. community property questions
  • Distribution of increased value of a business
  • Value of business or professional goodwill
  • Termination of marriage or domestic partnership
  • Custody and visitation rights
  • Support for child, partner or spouse
  • Attorneys’ fees
  • Equitable property and debt distribution
  • Claims for reimbursement
  • Other specific issues

Submitting a motion to bifurcate also means meeting certain demands. If the reason for bifurcating involves determining an alternate date of valuation of assets for example, the party making the motion will have to give the reasons for alternating the date and whether or not the proposed date applies to all or only some of the assets.

Other indemnities must be made to protect both spouses and children, in regards to health insurance, retirement, social security and other estate benefits.

Practical reasons for “Status Only” Bifurcation

There are some practical reasons to submit a motion to bifurcate. In a status-only bifurcation, which effectively restores the parties to “single” again, a common motive is that one or both of the parties wish to remarry immediately. Another less common reason, is to protect the best interests of the children, as in the case of Dwayne Wade’s dissolution in Illinois.

Financially, there are a few reasons: 

  • Tax Incentives: Under IRS rules, a party may file as a single tax payer or “Head of Household” if s/he had a divorce finalized anytime that year, even on December 31st. Remember, spousal support payments are deductible to the payor. Conversely, the party who receives spousal support must claim the money as income.

  • Bankruptcy: If one spouse files for bankruptcy, couples may seek bifurcation so the divorce proceedings can proceed while bankruptcy issues are still being resolved.

  • Time is Money: One party refusing to agree to certain issues to prolong the proceedings just leads to more legal fees. Reasons vary: a party may want to put off the ex’s remarriage or one party is highly emotional and unwilling to compromise, dragging on proceedings for as long as s/he can. 

Legislative Intent: Slight Evidence Required

The legislature intends “that the dissolution of marriage should not be postponed merely because issues relating to property, support, attorney fees or child custody [are] unready for decision.’ [Citation.]” (Gionis v. Superior Court (1988) 202 Cal.App.3d 786, 788.) The court is more concerned that parties forced to remain legally bound to one another when this status can do nothing but engender additional bitterness and unhappiness.” (Hull v. Superior Court (1960) 54 Cal.2d 139, 147-148.) A decision dissolving the marital status is reviewed under the substantial evidence standard. No valid purpose is served by requiring the parties to stay married.

Motion to Bifurcate Divorce

Opposing a Bifurcation

The burden of evidence to defeat a status only bifurcation must be compelling.

In the recent case of In re Marriage of Kimberly M. and Fletcher Jones, Jr., the Fourth Appellate District Court of California upheld the trial court’s decision to allow bifurcation and end the marriage in status.

In 2012, Fletcher made a motion to bifurcate based on, among other reasons, detrimental effects on future investments. Kimberly alleged her spouse did not comply with preliminary disclosure requirements – these must be filed before a bifurcation judgment is granted under Family Code §2337(b). She asked for 31 conditions to be met if bifurcation is granted.

Though Fletcher provided the required list of assets and debts, and though Kimberly did not disagree that the marriage should be dissolved, she did contend that Fletcher should be required to provide current values of the listed assets and debts, and that she be allowed an opportunity to seek further conditions of the bifurcation.

The lower court found that the disclosure and augmentations Fletcher provided were sufficient to allow the bifurcation.

Additionally,

…Kimberly made no showing the rejected conditions were necessary to protect her interests. She argues they are necessary because the early termination of the marital status “may impact upon property division issues” . . . The same can be said in every situation wherein the court bifurcates the trial, resulting in termination of the marital status prior to resolution of other issues.

Here, the court reaffirmed the legislative intent that severance of a personal relationship which the law has found to be unworkable and, as a result, injurious to the public welfare, is not dependent upon final settlement of property disputes. Society will be little concerned if the parties engage in property litigation of however long duration.

 

Veronica R. Woods is an attorney in our Family Law Practice Group. 

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Monday
Dec282015

Congress Forges PATH in Tax Laws for Business, Individuals

Tax Law Certified SpecialistTax Law Certified Specialist (State Bar of California Board of Legal Specialization)

 

by Michael Hackman
818.907.3279

 

 

 

Tax Attorney

 

Congress has avoided a government shutdown by agreeing to a new budget in its Consolidated Appropriations Act, and the adopted legislation [cynically named the Protecting Americans From Tax Hikes (PATH)], includes some significant tax changes. 

Some of these changes are “permanent” – which even though they’ll be subject to future legislation, at least end the government practice of allowing a provision to expire and then retroactively extend it in late December for the year about to end – but leave uncertainty for future years.

Among the provisions are:

A. Reinstating and making permanent the ability of a taxpayer who has reached age 70 ½ to make a charitable contribution of up to $100,000 from an IRA. These distributions to charity can be part of a Required Minimum Distribution (RMD). This provision has been around since 2006, but lately it has not applied to the current year until revived in late December.  

B. Making permanent the five-year period in which an S corporation is subject to a built-in gains tax (essentially a double tax) when an S corporation sells assets. Initially a 10-year period, and then a seven-year period, the extra tax won’t apply if five years from conversion to an S corporation has elapsed before the start of a year of sale.

C. Eliminating the tax when up to $2 million of mortgage indebtedness obtained to acquire the principal residence is cancelled. This temporary rule starting in 2007 is now in effect through the end of 2016.

There are many other tax provisions in the legislation, some of which will be the subject of a future blog.

 

Michael Hackman is a Certified Specialist in Tax Law (State Bar of California Board of Legal Specialization), and Chair of our Tax Planning and Trusts & Estates Planning Practice Group. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Dec102015

Wrongful Termination & Disability Discrimination: Sarkisian Goes Head to Head With USC

Wage and Hour DefenseEmployment Litigation Defense

 

 

by Sue M. Bendavid

818.907.3220

 

Employment Discrimination Defesne

 

After a much publicized struggle with alcoholism and public firing by the University of Southern California, former head coach for the football team, Steve Sarkisian, has filed a lawsuit against the university.

According to several media outlets, one of the incidents that led to Sarkisian’s termination was the coach’s inability to speak properly at a USC pep rally in August.

The coach was slurring, and used an expletive while speaking onstage. In contrast, Sarkisian claims he had a few beers and took some anti-anxiety medication before the event. Allegedly, USC’s athletic director, Pat Haden, demanded Sarkisian sign a letter requiring the coach apologize to the team and the media, and to obtain counseling with a school therapist.

Sarkisian’s lawsuit against USC asserts claims for, among other things, breach of contract, disability discrimination, medical confidentiality violations, and wrongful termination. Sarkisian is seeking $12.6 million in contract damages as well as additional sums for “extreme mental anguish as a result of not only his wrongful termination, but also the manner in which he was terminated and the statements made about that termination by USC.”

The complaint also states that:

“Instead of supporting its Head Coach, Steve Sarkisian, when he needed its help the most, USC kicked him to the curb. Instead of honoring the contract it made with Steve Sarkisian, USC kicked him to the curb.”

Sarkisian and his attorneys further allege that Haden repeatedly and derisively said “Unbelievable” during a phone call in which Sarkisian asked for time off to get help for alcohol addiction, placed the coach on indefinite leave, and subsequently wrongfully terminated him.

Both state and federal law provide protections for disabled employees. California’s law is the Fair Employment and Housing Act (FEHA).  The federal law is the Americans with Disabilities Act (ADA).  Both FEHA and the ADA recognize that alcoholism is a form of disability. As noted by the Equal Employment Opportunity Commission (EEOC), employers must make reasonable accommodations for disabled employees if the accommodation will not result in an undue hardship on the employer.

Also, under California Labor Code Sections 1025-1028, certain employers must make reasonable accommodations for employees who ask for time off to enter rehab. And, the employer must maintain the employees’ privacy.

What Should Employers Do To Keep Workplaces Running Safely and Efficiently?

Lawyer for EmployerEmployers should remember that alcoholism is a disease recognized by the American Medical Association, and that this disease may entitle an employee to take time off from work. Not only may employees have leave rights under the ADA and FEHA, but also under other leave laws such as the Family and Medical Leave Act and the California Family Rights Act (for employers with more than 50 employees).

Employers who must terminate an alcoholic should do so with caution. They should consider all of the circumstances of the employee, including work history, performance records and other factors. Documentation of misconduct is key to helping prove that the termination was due to performance and not to a disability.

Employers should also establish policies and ensure all employees are aware of such policies prohibiting the use of alcohol or controlled substances while working.

 

Sue M. Bendavid is the Chair of the Employment Practice Group at our firm. Contact her by phone: 818.907.3220, or by email: sbendavid@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Dec032015

Tax Planning Before Turning 70: What You Should Know About RMDs

Trusts & Estate Planning

 

 

by Kira S. Masteller

818.907.3244

 

 

Tax payers aged 70 ½ or older this year must take a Required Minimum Distribution, or RMD, from their traditional IRAs (Individual Retirement Arrangements), SEP (Simplified Employee Pension) IRAs, SIMPLE (Savings Incentive Match PLan for Employees) IRAs, or retirement plan accounts. RMD reporting is required for inherited IRAs as well.

Those who do not take distributions in time may be subject to a 50 percent excise tax on excess IRA accumulations.

RMDs: The Devil in the Details

Keep in mind:

1. Defined Contribution Account owners may be able to wait until retirement to file a report. 

2. Those who turned 70 ½ in 2015 must report a RMD before April 1, 2016 – unless they turned that age in the first half of the year. If that’s the case, the first RMD report must be made before December 31st of this year. 

3. First year reporters who wait to report in April will be required to report twice (which could raise tax obligations) because they are required to report an RMD again before December 31st. This is why it’s important to begin tax planning for RMDs at age 69. 

After the first year, IRA owners are required to report annually by year’s end. 

4. Life expectancies of the taxpayer and the taxpayer’s spouse will play a factor. See the IRS’s resources for calculating RMDs for more information, but it essentially comes down to the taxpayer’s account balance the preceding year’s end, divided by an IRS life expectancy factor. 

5. Taxpayers who have forgotten to take RMDs in the past should take all of them as soon as possible, because of the excise tax mentioned above.

Retirees and other tax payers who don’t need their RMDs might consider reinvesting those funds into a Roth IRA, which won’t require withdrawals until after the account owner passes, or a grandchild’s 529 college savings account. And there are other planning tools available to help reduce your taxable estate. Simply speak with your accountant or trusts & estates attorney for more information.

 

Kira S. Masteller is a Shareholder in our Trusts & Estate Planning Practice Group. She may be reached by email: kmasteller@lewitthackman.com or by phone: 818.907.3244.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

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