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Monday
Aug252014

For Whom the Calls Toll: Employers May Be Responsible for Cell Reimbursements

Wage and Hour DefenseClass Action Defense

by Sue M. Bendavid

818.907.3220

 

Here's another case that may result in further liability exposure for employers in California. The California Second Appellate District Court ordered the trial court to reconsider class certification for a group of 1,500 customer service managers who used personal cell phones for work related calls.

In Colin Cochran v. Schwan's Home Service, Inc., the plaintiff sued his employer for reimbursement for his personal cell phone service. Cochran argued that Schwan's violated Labor Code Section 2802 and engaged in unfair business practices. He sued for declaratory relief and statutory penalties under the Private Attorneys-General Act (PAGA) for himself and on behalf of a putative class of fellow employees.

The trial court refused to certify the class, noting that if the class members did not incur losses (e.g., because they had plans with unlimited minutes) there could be no liability on a class wide basis.  The trial court ruled that “statistics from a survey could not be used to prove liability, especially because there was no pattern or practice regarding the expenditures of the class members."

The argument against class certification was that the commonality requirement could not be met since the class members have different cell service carriers and many different phone plans provided by those carriers – thus determining expenditures for individual class members would not be feasible via the statistical sampling method proposed by Cochran.

Additionally, Cochran's girlfriend may have paid for the plaintiff's cell service which may render the class representative's claims for damages irrelevant.

Employee Class Action – It's All About the Sampling

The Court of Appeals disagreed, and cited Brinker Restaurant Corp v. Superior Court 2012 in the opinion: "if the defendant's liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages."

The Appellate opinion also referenced Duran v. U.S. Bank National Assn. 2014, and stated the trial court should consider the principals of Duran in considering whether to allow statistical sampling evidence in establishing either liability or damages, noting:

Duran noted that the use of statistical sampling to prove liability in overtime class actions is controversial, and explained that the use of it to prove damage is less so because "the law tolerates more uncertainty with respect to damages than to the existence of liability."

The court's opinion also stated that the trial court erred in assuming an employee does not suffer a loss under §2802 if a third party pays for the employee's cell service. Essentially, it's not the employer's business to delve into how employees handle their own, personal business.

In conclusion, the Court stated:

We hold that when employees must use their personal cell phones for work-related calls, Labor Code §2802 requires the employer to reimburse them. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.

Employer Takeaway

Be careful if your employees use their personal cell phones for work related calls.

If possible, do not REQUIRE your employees to have a cell phone. If personal mobile devices are necessary, consider reimbursing your employees for calls and for part of the costs of service, even if that employee has an unlimited calling plan.

 

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

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
Jul312014

Tax Implications: Selling Your Home

Gift Tax AttorneyEstate Tax Minimization

 

by Kira S. Masteller
818.907.3244

 

 

If you've lived at a property for at least two out of the five years before you sell your home, you can consider that property your primary residence or "main home", per the Internal Revenue Service.

The IRS will then figure in the selling price, amount realized, and the adjusted basis (net cost after depreciation deductions and capital expenditures) to determine your gains or losses on the sale.

Special circumstances may qualify you for a partial exclusion if you don't meet ownership/residence tests.

 

Tax Benefits for Selling Your Primary Residence

If you have gained, the profits from the home's sale are generally excluded from tax for up to $500K for married couples filing joint returns and $250K for individuals. There are tests to qualify for this exclusion: 

  1. Primary Residence Ownership: You had to have owned the home for at least two of the last five years.

  2. Use as a Primary Residence: You had to have lived at the property for a 24 month period in the five years prior to the date of sale.

  3. Prior Exclusions: You qualify so long as you did not use the $500K/$250K exclusion within the last 24 months. In other words, you can keep employing these exclusions for selling a series of primary residences every two years.

  4. Married Couples: At least one spouse must qualify for the exclusion, and both spouses must have used the property as a primary residence as outlined above. 

Special circumstances like divorce, change of health or certain unforeseen events may help you qualify for a partial exclusion, if you do not meet the 24 month ownership or residence tests.

You may also be able to extend the exclusions to a second home, if you convert it to a primary residence before selling, though the laws governing this practice have severely limited property owners from doing this since 2008. Still, you may be able to exclude 10 percent of the your gains when selling second or vacation homes.

 

Home Sales and Tax Obligations

The remainder of your profits (on sales after January 1, 2013) may be subject to the Net Investment Income Tax (NIIT), at a rate of 3.8 percent, dependent on factors like the seller's net investment income. The NIIT affects individuals as well as most trusts and estates.

First time home buyer credits may need to be repaid when you sell, depending on when you purchased the property.

Previously, you may have postponed tax obligations on home sales by using the proceeds to buy another primary residence – deferring what you owed the IRS under what was called rollover rules. The law changed in 1997, and rollover rules will no longer apply.

 

Other IRS Considerations

You must report any gains that exceed the exclusion amounts above, though we recommend you report all real property sales anyway. If you received Form 1099-S, report it.

Kira S. Masteller is a Trusts & Estate Planning Attorney at our firm. Contact her via 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.

Wednesday
Jul232014

What Happens in a Personal Injury Case During a Deposition? 

Injury Attorney Los AngelesPersonal Injury Attorney

 

by David B. Bobrosky

(818) 907-3254

 

In part three of this Injury Claims Process series, I blogged about What Happens When an Injury Lawsuit Is Filed. We covered quite a few topics in that one, including injury litigation depositions. This post will take a deeper look into what happens at a deposition.

Personal Injury Depositions: Follow the four basic rules given below.Giving a personal injury deposition can be a little intimidating for our clients. In fact, other than testifying at trial, it is usually the most stressful part of the case for the client. But it doesn’t have to be.

I often hear that clients are afraid because he or she knows the defense attorney is going to try and “trick them.” Yes, the attorney’s job is to weaken your case wherever possible. However, if you are honest and answer the questions based on your own knowledge, the power is on your side.

 

What is a Deposition?

A deposition is a question and answer session between you and the attorney(s) on the other side. It is the only chance to speak to you directly prior to trial.

Your attorney is there to defend you by objecting to improper questions and to help control the situation. A court reporter is present taking down everything that is being said in the room, so be very careful about what you say at all times.

 

Preparation for a Personal Injury Deposition

You should meet with your attorney prior to your deposition. Your attorney will go over ground rules for the deposition, discuss the general areas to be covered, review the facts of your case with you, and highlight any issues that may be a problem. Remember everything discussed with your attorney is privileged and cannot be disclosed to the attorney.

 

Basic Ground Rules for the Deposition

  • Oath – You will be given an oath by the court reporter which is the same oath you would be given in court. Therefore, even though you’re typically in a conference room, your testimony is being given under the penalty of perjury just as if you were in court.

  • Don’t Guess – If you do not know an answer to a question DO NOT GUESS. Guessing will only get you in trouble. If you do not understand a question, let the attorney know that you need it rephrased.

  • Don’t Ramble – Answer only the question you are asked. Do not add to it if you do not need to.   If you can answer the question “yes” or “no”, do so. If you need to explain an answer to benefit your case, do so. The deposition is a fact gathering session for the other attorney – it is not your day in court.

  • Take a Break – Depositions are not endurance tests. If you need to break to use the restroom, get something to eat, or just re-group, you can do so. Just let your attorney know.

 

What Will the Defendant's Attorney Ask in an Injury Deposition?

Personal injury depositions generally follow a certain pattern, which of course, can vary by attorney and case. Typically, the following areas are covered:

  • Personal/Educational/Employment Background – The attorney will gather basic personal information. For example, are you married?  Do you have children?  Who were you living with at the time of the accident?  This may lead to potential witnesses to determine what you were like before the accident, as well as after the accident. Educational and employment information is always asked, and is covered in much more detail if there is a loss of earnings or earnings capacity claim.

  • Facts of the accident – Whether it involves a trip and fall, a defective product, or an auto accident, you will be asked questions about how the accident occurred. Your attorney will prepare you on the important issues regarding the accident.

  • Injuries and Medical Care – You will be asked, in detail, what injuries you suffered and what you were feeling at different points in time. You will also be asked very detailed questions about your medical care and future prognosis. It is important to go over your medical records in preparation for your deposition. You do not need to know on the exact date you saw each doctor, but you need to generally know which doctors you saw, in what order, and what care you received from each. You will also be asked what activities you cannot do since the accident and how the injuries have affected your life in general.

A deposition does not have to be stressful, and it certainly shouldn’t harm your case. Be prepared, be honest, and be credible, and you will be fine.

David B. Bobrosky is an experienced Accident Attorney in our Personal Injury Practice Group. Contact him directly for more information: dbobrosky@lewitthackman.com; (818) 907-3254.

 

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
Jul112014

The Road Ahead for California Transportation Industry Employers

Wage and Hour Defense Attorney Employment Defense Attorney

 

by Sue M. Bendavid & Hannah Sweiss

 

The 9th Circuit Rules FAA Authorization Act Does Not Preempt State Meal and Rest Break Laws

On July 9, 2014, in Dilts v. Penske Logistics, Inc. the Ninth Circuit Court of Appeals held that, for motor carrier employers, California’s meal and rest break laws are not preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).      

Class Action: 349 delivery drivers and installers claim Defendants create an environment that discourages employees from taking breaks.Up until this ruling, motor carrier employers tried to argue they need not comply with California’s meal and rest break rules, as those rules had an impermissible negative impact on “prices, routes and services” and therefore, those laws were preempted by federal law under the FAAAA.

Defendants in Dilts argued compliance with California’s meal and rest break laws would force drivers to deviate from routes and would result in a cessation of delivery services throughout the day. This could cause longer delivery times and greater costs to employers. However, the Ninth Circuit was unpersuaded.  

 

The Ruling's Impact on California Employers     

So what does this mean for certain motor carriers in the transportation industry?

Generally, under California law an employer must provide a duty free meal break of 30 minutes for nonexempt employees who work more than five hours and a second 30 minute duty free meal break for those who work more than 10 hours. If a nonexempt employee’s total daily work time is at least 3.5 hours, employers must also provide a paid rest period of 10 minutes for every four hours or major fraction thereof.

Based on this decision, motor carrier employers may have to: 

  • Hire more drivers,

  • Stagger employee break times,

  • Reallocate resources to maintain a particular service level,

  • Allow drivers to make minor deviations from their routes, and

  • Make other changes to ensure compliance with California’s meal and rest break rules.

A failure to do so may result in substantial penalties and is expected to result in more class actions on this issue. 

Sue M. Bendavid and Hannah Sweiss are Wage and Hour Defense Attorneys at our Firm. Contact them directly: sbendavid@lewitthackman.com or 818.907.3220; hsweiss@lewitthackman.com or 818.907.3260, for more information.

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.

Tuesday
Jul082014

Inherited IRAs Not Exempt From Bankruptcy Proceedings

Trusts & Estate Planning Attorney

by Kira S. Masteller
818.907.3244

 

Individual Retirement Accounts or IRAs, are retirement funds – at least until you pass the asset on to heirs other than your spouse. Then, according to a recent decision handed down by the Supreme Court, they become fair game for creditors.

The case at issue was Clark v. Rameker. Heidi Heffron-Clark and her husband Brandon Clark declared Chapter 7 Bankruptcy in 2010, and listed a $300K IRA inherited from Heffron-Clark's mother in 2001, as a primary asset exempt from the bankruptcy estate. The bankruptcy trustee, William Rameker, maintained that the funds in the account did not qualify as retirement funds and should be used to pay off about $700K of the Clarks' debts. The Bankruptcy Court agreed with the trustee.

A District Court reversed the decision though, citing that the exemption covered any account in which the funds were originally accumulated for retirement purposes, and a Seventh Circuit Court reversed the District Court's opinion.

Nine Said No: Supreme Court Justices Unanimously Decide Inherited IRAs Not Protected

When the Seventh Circuit sided with the Bankruptcy Court, the Clarks petitioned the Supreme Court.  Justice Sonia J. Sotomayor delivered the opinion that inherited IRAs do not count as retirement funds because:  

1. Bankruptcy code is written to ensure creditors recover losses but also to ensure debtors can meet their essential needs. Inherited IRAs do not fall in the category of an essential need; and

2. Inherited IRAs cannot prevent the heir from blowing the entire balance on luxuries or non-essential needs.

So where does this leave you and your IRA?

Spendthrift Trusts Protect Assets

When considering your assets and who's going to get them when you pass, think about how best to give your heirs the most benefit while minimizing risk of loss. Most of you would rather see your money go to your designated beneficiaries rather than credit card companies or Uncle Sam.

A spendthrift trust will limit your beneficiary's access to the principal – but it also limits his/her creditors' access to the funds. Instead of direct access to all of the money at any given time, you could ensure your heir gets regular payments, or certain goods/services purchased by the Trustee.

Which beneficiaries will most benefit from this type of trust? Consider the heirs that are:

1. Prone to addictions

2. Generally bad with money

3. Prone to fraud

4. Engaged in a business venture with a high potential for failing

5. Overextended with credit

If you need further information regarding managing your IRA, spendthrift trusts or other estate planning matters, contact me directly. 

Kira S. Masteller is a Trusts and Estate Planning Attorney at our firm. Contact her via 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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