February 1998

Vol.2 – No.5

Your Small Business Dot Com

The Internet provides a speedy, cost-effective way for businesses and professionals to compete internationally. Whether you are operating from your basement or Madison Avenue, your business can look like a million dollars.

The Internet has leveled the playing field between big and small businesses. A small business can reach as many potential customers as a large business. The Web gives a whole new meaning to the phrase “home based business”.

What’s New in Consumer Law?

Unconstitutional noise ordinance. An ordinance that makes it illegal to make “any noise which either steadily or intermittently annoys, disturbs (or) injures” another person so “impermissibly brought and lacking (in) objectivity” violates the due process clause. It has a “chilling effect” on free speech. The U.S. District Court for Rhode Island ruled that an ordinance cannot be “so ambiguous as to allow the determination of whether a law has been broken to depend on the subjective opinions of complaining citizens and police officials.” However, the court upheld a separate section of the ordinance which established a precise decibel limit for noise.

What’s New in Debtor/Creditor Law?

Cable company pays $5 million for charging late fees. A Cable TV company that charged customers a $5.00 late fee must pay $5.4 million in damages plus interest in a class action suit. The late fee in the subscriber contract is a form of “liquidated damages” which is unenforceable if it is “grossly excessive and out of proportion to the damages that might reasonably have been expected” as a result of a breach. The Baltimore City Circuit Court ruled that the $5.00 late fee was “grossly excessive” because an expert testified that the cable company actually lost only 38¢ when a subscriber paid late. The court said that a “reasonable” late fee would have been 50¢ and ordered the company to refund everything collected in excess of that amount.

What’s New in Divorce/Family Law?

New tax law affects divorce strategies. The tax law signed in August, 1997 will result in dramatic changes in divorce strategies. The law lowers the capital gains rates holding periods. The rate on property held for more than 18 months was lowered from 28 percent to 20 percent. Therefore, property with a low tax basis is more valuable when negotiating the division of property in a divorce. There is less of a disadvantage in taking low-basis assets. It is more practical to make alimony and support payments by selling low-basis property. The 15 percent excise tax on IRA withdrawals has been repealed for withdrawals after December 31, 1996. Therefore, spouses can no longer argue that they can’t make withdrawals to pay support. IRAs are now valuable sources for support and property buy-outs.

What’s New in Estate Planning Law?

New IRAs. The new Roth IRA is the opposite of a regular IRA. You obtain a tax deduction when you deposit money in a regular IRA and pay income tax on what you take out. There are no tax deductions at the beginning with a Roth IRA, but withdrawals are tax-free. In converting a regular IRA to a Roth IRA, your adjusted gross income in the year of conversion must be $100,000 or less. If you convert to a Roth IRA, you must pay income tax, but no early withdrawal penalty, on the amount you convert. For conversions in 1998, the income can be spread over four years. If you are married and file your tax returns separately, you cannot convert. You can make contributions of $2,000 per year to the Roth IRA, minus any contributions to other IRAs, even if you are participant in a qualified plan such as a 401k and even if you are over 70½. To make a full contribution, you can’t have income over $150,000 if married and filing jointly or $95,000 for single filers. The advantages of the Roth IRA are lower estate taxes, lower social security taxes and withdrawals without tax or penalty.

Beginning in 1998, you can make non-deductible contributions of up to $500 per year for each child under 18 to an education IRA. Withdrawals are tax-free as long as the money is used for higher education. Otherwise, withdrawals of earnings are generally taxed and subject to a 10 percent penalty. The income limits are the same as the Roth IRA.

What’s New in Health Law?

Check on your doctor. Massachusetts passed legislation giving consumers access to background information on doctors, including their malpractice histories. Florida passed legislation that will provide profiles of the state’s 43,000 doctors by telephone and via the Internet. In seven states (Arizona, California, North Carolina, Iowa, Maine, Texas and Vermont), information on doctors, including disciplinary actions, but excluding malpractice histories is available at www.docboard.org.

To determine whether a New York doctor is been disciplined for misconduct or to file a complaint against a New York doctor, see the New York State Department of Health site (www.health.state.ny.us/nysdoh/provider/provider.htm).

Medical world search (www.mwsearch.com) has general medical information.

What’s New in Landlord/Tenant Law?

$125,000 verdict for lead poisoning. A child contracted lead poisoning while living for seventeen months in a second-floor apartment. He suffers from learning disabilities, has trouble concentrating, has failed to progress in school, throws tantrums and demonstrates violent behavior. The landlord was in violation of the New York Public Health Law and the City Housing Code and had been ordered to perform lead paint abatement (Supreme Court, Orange County, New York).

Landlord can’t collect rent from tenant who broke lease. The tenant signed a one-year apartment lease in January. In July, the tenant informed the landlord that she planned to move out by the end of August. The landlord placed a “for rent” sign in the front yard but did not use newspaper ads to find new tenants. Although the apartment manager showed the apartment to 30 prospective tenants, none of them leased it. The landlord sued for loss of rent and the tenant counter-sued for the return of her security deposit. The Alaska Supreme Court found in favor of the tenant ruling that the landlord had a duty to mitigate his damages.

What’s New in Personal Injury Law?

Car manufacturer liable for lack of air bags. A driver of a 1990 automobile died of head injuries in a head-on collision. The car manufacturer was sued because the lack of an air bag was a defect. The Ohio Supreme Court ruled that a car manufacturer can be sued in strict products liability for not including an air bag. Similar claims have been allowed by the high courts of Arizona, Indiana and New Hampshire. The Mississippi Supreme Court has held to the contrary. The Ninth and Tenth U.S. Circuit Courts have held that such suits are preempted by the Motor Vehicle Safety Act, which gives auto manufacturers the option to install either an air bag or an automatic seat belt.

What’s New in Real Estate Law?

Discrimination insurance now available. Real estate sellers, landlords and managers face awards of millions of dollars and costs of over $100,000 for inadvertent discrimination. General liability policies do not cover the costs of defending and paying for discrimination suits for refusing to lease or sell property or offering terms to a prospect with discriminatory conditions.

Sales or leasing discrimination insurance is now available to corporations and professionals involved in the ownership, management, development, sales or leasing of commercial or residential properties. It pays for defense costs and coverage for class action suits and administrative hearings with limits of $250,000 to $2.5 million. Intentional acts of discrimination are excluded from coverage. Insureds must have explicit written policies and procedures forbidding discrimination. For further information, call Atlantic Underwriters at 800-888-9088.

What’s New in Small Business Law?

Criminal prosecution of employers for workers’ injuries. Employers can be criminally prosecuted for injuries to workers when there are repeated violations following notification and/or a conscious disregard of known, existing and potentially dangerous situations. Under most manslaughter or negligent homicide laws, prosecutors do not have to prove that employers intended to kill their workers–only that recklessness or negligence caused their death. Maine (ME. REV. SDAT. ANN. Title 17-A, Section 203[1][c] and California Penal Code Section 387 have facilitated state prosecutions by enacting laws specifically providing for criminal charges against employers.

Injured Victims’ Rights

The Friedman & Ranzenhofer, P.C. Ten Point Pledge to Accident/Injury Clients is:

  • To communicate with you in plain language that is easy to understand.
  • To promptly return your telephone calls.
  • To quickly and thoroughly investigate and analyze your case. Friedman & Ranzenhofer, P.C. does not accept every accident case.
  • To have your case personally handled by an attorney.
  • To keep you informed of the progress of your case at all times.
  • To show you the personal care, concern and attention which has been the hallmark of our law firm since 1955.
  • To not handle your case in an “assembly line” fashion.
  • To accommodate the needs of you and your family during the handling of your case.
  • To vigorously protect your legal rights.
  • To never release your name to the media after your case has been completed, except with your written permission.

Attorney Michael H. Ranzenhofer limits his practice to automobile accident, slip and fall, dog bite and defective product cases. He is a member of the Association of Trial Lawyers of America, the Western New York Trial Lawyers Association, the New York State Trial Lawyers Association and the Erie County Bar Association Negligence Committee.

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