Expert Title Company Newsletter Issues

HOMEOWNERS’ INSURANCE: THE DEVIL RESIDES IN THE DETAILS Reading and understanding all of the language in a homeowners’ insurance policy are not formalities to be skipped over while searching for the signature line. As with any contract, the fine print can have real and lasting consequences, and its contents will control over any contradictory verbal assurances. Taking the time to understand the terms of their policies might have headed off bad outcomes for homeowners in two recent cases. Business Purposes Exclusion Joan bought property consisting of a home, two barns, and other outbuildings. She also purchased a homeowners’ insurance policy…

  BEFORE YOU START A BUSINESS . . . Both heart and mind must be working well if the owners of a new small business are to experience success. While it is only human nature--not to mention fun--to indulge one's imagination about what a new business started from scratch could be like, would-be entrepreneurs need to engage in some cold, hard thinking and planning before taking the plunge. At the risk of pouring cold water on some of the anticipation and excitement, what follows is a guide for how to plan for, and think through, the many decisions that must…

  AMERICAN TAXPAYER RELIEF ACT OF 2012 At the eleventh hour, Congress averted the tax side of the ominous "Fiscal Cliff" that it faced as 2012 drew to a close. The end result of the intense negotiations was the American Taxpayer Relief Act of 2012 (ATRA). The most publicized part of ATRA prevented scheduled federal tax rate hikes from going into effect for most taxpayers in 2013, while raising taxes on America's highest earners. ATRA also keeps in place many expiring income tax breaks and revives some tax increases that had expired over the past several years. Individual Tax Rates…

  ADA PRIMER FOR SMALL BUSINESSES The Department of Justice (DOJ) recently revised its regulations implementing the Americans with Disabilities Act (ADA). This revision clarifies some issues that have arisen over the past 20 years and contains some new requirements, including the 2010 Standards for Accessible Design. DOJ has published a document, ADA Update: A Primer for Small Business, which provides guidance to assist small business owners in understanding how the new regulations apply and how to comply with them. The Primer can be viewed by going to www.ada.gov.   Public Accommodations Title III of the ADA, on "public accommodations,"…

  CRIMINAL BACKGROUND CHECKS ON EMPLOYEES CRIMINAL BACKGROUND CHECKS ON EMPLOYEES It is not a new development in employment law that many employers take into account an applicant's or employee's criminal history information, including arrests or convictions, when making employment decisions. Nor is it unprecedented for the federal Equal Employment Opportunity Commission (EEOC) to come out with policies and guidance on the subject. But in light of technological changes that have made criminal background checks easier to do, the passage of the Civil Rights Act of 1991, which codified the "disparate impact" theory of liability, and even some prodding from…

  U.S. SUPREME COURT: ARBITRATION IS THE NEW EMPLOYMENT LAW The employment law component of the docket during the most recent term of the U.S. Supreme Court was dominated by decisions on arbitration. Some of the cases have the potential to affect large numbers of employers and employees.   Allocation of Power In the most significant of these decisions, the Court determined the allocation of decisionmaking powers under the Federal Arbitration Act (FAA), where an agreement to arbitrate includes an “agreement within the agreement,” delegating to the arbitrator the power to determine the enforceability of the arbitration agreement. If a…

  LITIGATION OVER NONCOMPETE AGREEMENTS Agreements between employers and their employees prohibiting or restricting competition by a departing employee are nothing new, but their use is growing—and not just for the highest levels of management. This trend makes it all the more important to understand the limits that courts have placed on such agreements, with a view toward balancing employers’ interests with policies favoring competition and unfettered opportunities for individuals to pursue their livelihoods. While courts have sometimes struck down noncompete agreements in their entirety, occasionally they effectively have rewritten parts of an agreement, a practice known as “blue penciling,”…

CAREGIVER BIAS IN EMPLOYMENT Today, it is commonplace for workers to handle both work and caregiving responsibilities for spouses and children, parents and other older family members, or relatives with disabilities. Women still are disproportionately more likely to exercise primary caregiving responsibilities but, in increasing numbers, men also have assumed the dual roles of caretaker and breadwinner. Our society may be evolving toward more individuals simultaneously sharing the duties of an employee and a caregiver, but old stereotypes in the workplace sometimes die hard. The result is a steady rise in claims of employment discrimination based on what is sometimes…

  E-MAILS CAN MODIFY CONTRACTS   We send e-mails so casually and with such informality, even in the business environment, that it is easy to forget that they may carry significant legal consequences. It is only prudent to bear in mind that even e-mails written in the most conversational style may create legal obligations no less binding than a more conventional written agreement laden with legalese and signed with all formalities. If a business wants to entirely avoid the possibility of having e-mails treated as binding amendments to existing contracts, the best approach is to be as clear and direct…

  REAL ESTATE ROUNDUP   No-Show Mover Must Make Mortgage Payments A family hired a moving company to pack up their belongings in their home and move them to a new house in another state. The mover packed up everything, but failed to come back for the loading and moving. This was more than merely inconvenient, because the family's sale of their old house was contingent upon delivery of a vacant house. When the purchasers arrived to find a house full of packed boxes, the sale fell through. The family sued the moving company for breach of contract and negligence.…

  BUSINESS START UP CHECKLIST   Both heart and mind must be working well if the owners of a new small business are to experience success. While it is only human nature, not to mention fun, to indulge one’s imagination about what a new business started from scratch could be like, would be entrepreneurs need to engage in some cold, hard thinking and planning before taking the plunge. At the risk of pouring cold water on some of the anticipation and excitement, what follows is a guide for how to plan for and think through the many decisions that must…

GET IT IN WRITING When an Internet executive held a meeting with the chairman of a telecommunications company, the agenda was a new business idea that the Internet executive had. The discussion was transformed into a recruitment when the telecommunications executive suggested that the idea should be pursued within the company he headed. For two men in the upper echelons of high tech businesses, they then chose a decidedly low tech way to memorialize their agreement. The end result, however, shows how substance can sometimes triumph over form in the law of contracts formation. At the end of their meeting,…

  REAL ESTATE ROUNDUP   Flood Zone Fraud A jury recently gave a hefty damages award to homeowners who sued a real estate company for falsely representing that the home they were buying was not located in a flood zone. When the rains came after the homeowners had moved in, the front yard, backyard, and a patio were under three feet of water. The house itself was never flooded. While this was fortunate, it limited the economic damages that a lawsuit would yield, prompting the homeowners to use an unusual legal theory. The homeowners successfully argued that the realty company…

  FAMILY RESPONSIBILITIES AND THE WORKPLACE There is no federal law called the "Family Responsibilities Discrimination Act" or the "Caregiver Discrimination Act." Nonetheless, there has been an increase in claims brought under a variety of federal statutes on behalf of job applicants or workers who assert discrimination by an employer on the basis of family-related decisions. Relevant federal statutes include the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, and the Family and Medical Leave Act (FMLA). If the employer is a government entity, the claim may be couched in terms of a violation…

COMPUTER FRAUD AND ABUSE ACT UPDATE The federal Computer Fraud and Abuse Act (CFAA) is most closely associated with criminal prosecutions brought by the Department of Justice. But the CFAA also provides for a civil cause of action for anyone who suffers damage or loss because of a violation of the statute. In light of the expansive reading that some courts have given to the law, victimized companies should give consideration to taking the civil route. A civil lawsuit gives the wronged party more control and may provide a quicker fix. By means of such a lawsuit, the victim can…

  WHAT HAPPENS TO YOUR E-MAIL AFTER YOU DIE? When a young Marine died in Iraq and his parents wanted to retrieve his e-mail as a memorial to him, they came up against the privacy policy of the Internet service provider (ISP), which declined to provide the information. Ultimately, a probate court ordered that the parents be allowed to retrieve the e-mails. When a prominent poet died without leaving the password for his e-mail account, where he kept virtually every significant piece of personal information, his daughter had no means of gaining access to that information so that she could…

  DOING BUSINESS ON THE WEB--CLICKWRAP AGREEMENTS Every day, more and more business transactions are conducted over the Internet. Many of these transactions begin with a "clickwrap agreement." Clickwrap agreements are variations on "shrinkwrap" agreements, those printed terms and conditions usually found in the packaging for software. Clickwraps basically work the same way, but the user agrees to the terms by clicking a button on his computer, instead of by opening the package and using the product. While clickwrap agreements are still widely associated with software licensing, their use has spread to a wide range of business settings, such as…

  EMPLOYMENT DISCRIMINATION AND RETALIATION BY EMPLOYERS For as long as federal law has prohibited discrimination in the workplace, it also has separately prohibited punishing, or “retaliating against,” an employee who opposes the prohibited discrimination. Employment discrimination can occur on the basis of factors such as race, sex, and religion. Usually, there is an anti retaliation provision found in the same laws that prohibit the underlying discrimination. There are dozens of federal statutes with anti retaliation provisions. The policy of protecting those who object to what they perceive as unlawful discrimination is so ingrained in federal civil rights law that…

DEDUCTING THE BUSINESS USE OF YOUR HOME The federal income tax deduction for the business use of a home has a good dollars-and-cents upside for those who qualify. Some detailed questions have to be answered correctly to get to that point, however. Not surprisingly, the IRS publication on the subject makes use of a complex flowchart filled with "yes or no" questions to guide taxpayers to a determination of eligibility for the deduction. Qualifying for the Deduction To pass the threshold for use of the home business deduction, a taxpayer must satisfy the following two basic sets of requirements. The…

SHOULD YOU INCORPORATE YOUR BUSINESS? Following fast on the heels of a decision to go into a particular kind of business is the decision about what kind of legal form it should take. The most common options are a sole proprietorship, a partnership, or a corporation. You may lean toward the corporate route because you like the sound of having "Inc." after the company's name, but there are some more practical, business-like considerations to take into account. More so than with some of the other structures for a business, starting a corporation means complying with formalities required by state laws.…

WHERE TO SUE? WEBSITES CAN AFFECT JURISDICTION In a nation of 50 different systems of state courts and a highly interconnected national economy, the issue of when one state's courts can assert jurisdiction over a nonresident person or business has always been fertile ground for litigation. State legislatures have addressed the matter with laws that are the civil counterparts to the notion that criminals cannot escape the "long arm of the law." But "long-arm statutes," as they are known, do have their limits. Essentially, nonresidents can be sued in the courts of any state where they have had such contacts…

COURTS BEGIN PUTTING THE BRAKES ON "TAKINGS" The power of government to take private property for a public use, with payment of fair compensation, has been nearly unassailable in our legal system. In most condemnation cases, the right to take the property is a foregone conclusion, and the parties litigate only the amount of compensation. Courts generally have deferred to the government's articulation of a public purpose for the taking, even when private parties also benefit. In recent years, there has been a trend toward closer scrutiny of a proposed condemnation to find a paramount public purpose, and even to…