Spring 2003 Edition

Vol.7 – No.4

Personal Injury Settlements at a Glance

Veteran trial attorney, Michael H. Ranzenhofer, obtained over one-half million dollars in awards and settlements during the first quarter of 2003, including: $150,000 from Nationwide and State Farm Insurance Companies for a 37-year-old woman who was injured in a two car accident in the State of Florida; $100,000 from United Services Automobile Insurance for a 21-year-old Amherst woman who broke her ankle when she was the passenger in a car driven by her mother; $100,000 from National Grange Mutual for a 46-year-old Clarence man who was injured in a four car chain reaction accident on Route 5 in the Town of Clarence; $45,000 from Nationwide Insurance Company for a 40-year-old Akron beer delivery driver who injured his back in a two car collision at Niagara County Community College; $37,500 from Main Street America Insurance Company for a 22-year-old Akron woman who injured her back and broke a tooth while a passenger in an accident in the Town of Newstead; $42,000 from the Erie Insurance Company for a 63-year-old Attica woman who slipped on ice in her daughter’s driveway; $15,000 from the Toronto Dominion Bank for a 31-year-old Batavia man injured in a two car accident; $8,500 from Wegman’s for an Elma woman who cut herself on a sharp plastic cabinet while reaching for a donut; and $130,000 from Traveler’s Insurance Company for a 72-year-old Amherst woman who slipped and fell at a Tops supermarket. Attorney Michael H. Ranzenhofer of Friedman & Ranzenhofer, PC, PC, P.C. (716) 333-5144 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, New York Trial Lawyers Association, New York State Trial Lawyers Association and Erie County Bar Association Negligence Committee.

Friedman’s Personal Injury Guide Published

Robert Friedman advises injury victims in layman’s terms how to protect their legal rights and obtain maximum cash damages in the Personal Injury Litigation Guide. Published in Thomson-West’s Am Jur® Trials, the guide provides straight forward answers to frequently asked questions. The types of injuries covered are automobile accidents, defective products, criminal, domestic violence, workplace violence and accidents, slip and fall, dog bites, toxic mold and lead paint. Medical malpractice, nursing home abuse and recreational accidents are also explained. Authored by a virtual “Who’s Who” of the American bar, Am Jur® Trials shares the techniques and strategies that spelled success in the actual cases of more than three hundred prominent trial attorneys, judges and other legal experts.

It’s Expensive to Drink and Drive

On November 1, 2003, the legal blood alcohol limit before an individual is charged with Driving While Intoxicated per se will drop from .10 % to .08%. As a result, it is anticipated that there will be a greater number of arrests and convictions for this crime. Below are the typical costs incurred by a first time offender facing DWI charges: Additional legal fees and filing costs may be incurred by a driver who needs to enter Canada due to restricted access for non-citizens convicted of drinking and driving. From the DWILINK Newsletter by Attorney Michael S. Taheri, author of the DWI Reference Guide and DWI Defense Manual: Pleadings, Motions and Forms. To obtain a free subscription to DWILink, read past issues or order Mr. Taheri’s books elsewhere on this site.

What’s New In Landlord/Tenant Law?

Rent is not dischargeable in bankruptcy. A tenant was not permitted to discharge overdue rent in bankruptcy because his landlord justifiably relied on his promises to pay. The tenant and landlord were friends. After a few years, the tenant began to fall behind on his office rent payments. Although he repeatedly assured the landlord that he would pay, he never did. One year after the tenant moved out, the landlord sued to recover the back rent. When the tenant filed for bankruptcy, the landlord claimed that the debt was nondischargeable because it was obtained by false pretenses, a false representation or actual fraud. The tenant argued that the landlord could not have actually relied on his promises to pay, because he took no action until a year after he abandoned the office space. However, the court ruled that the tenant’s assurances where perfectly creditable from the start and were renewed from month-to-month (U.S. Court of Appeals, 1st Circuit). Landlords must comply with Fair Credit Reporting. Landlords may use consumer reports to evaluate rental applications. However, they must comply with the Fair Credit Reporting Act (FCRA). This Act protects the privacy of consumer reporting information and guarantees that the information supplied by consumer reporting agencies (CRA) is as accurate as possible. Landlords who deny a rental application based on information in the applicant’s consumer report must provide an “adverse action notice”. A “consumer report” contains information about a person’s credit characteristics, character, general reputation, and lifestyle. A report also may include information about a tenant’s rental history, such as information from previous landlords or from public records like housing court or eviction files. To be covered by the FCRA, a report must be prepared by a CRA – a business that assembles such reports for other businesses. The most common type of CRA is a credit bureau. Landlords often use consumer reports to help evaluate rental applications. These reports include:

• A credit report from credit bureau, such as Trans Union, Experian and Equifax or an affiliate company;
• A report from a tenant-screening service that describes that applicant’s rental history based on reports from previous landlords or housing court records and/or includes a credit report obtained from a credit bureau;
• A report from a reference-checking service that contacts previous landlords or other parties listed on the rental application on behalf of the rental property owner.

Landlords often ask applicants to provide personal, employment and previous landlord references on their rental applications. A reference verified by the landlord is not covered by the FCRA. However, a reference verified by an agency hired by the landlord to do the verification is covered. An “adverse action” is any action by a landlord that is unfavorable to the interests of a rental applicant. Common adverse actions by landlords include:

• Denying the application;
• Requiring a co-signer on the lease;
• Requiring a deposit that would not be required for another applicant;
• Requiring a larger deposit than might be required for another applicant; and
• Raising the rent to a higher amount than for another applicant.
• When an adverse action is taken that is based solely or partly on information in a consumer report, the FCRA requires Landlords to provide a notice of the adverse action to the consumer. The notice must include:

The name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide; A statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and A notice of the individual’s rights to dispute the accuracy or completeness of any information the CRA furnished and the consumer’s right to a free report from the CRA upon request within 60 days. Landlords who fail to provide required disclosure notices can be sued for court costs, reasonable legal fees and punitive damages. Additionally, the Federal Trade Commission (FTC) and other federal and state agencies may sue landlords for non-compliance and obtain civil penalties. However, a landlord who inadvertently fails to provide a required notice in an isolated case, has a defense if it can be demonstrated that at the time of the violation he or she maintained reasonable procedures to assure compliance with the FCRA.

Series LLC

Q:We own five small rental properties and would like to put them into a limited liability company (LLC). Forming and maintaining five separate LLCs would cost thousands of dollars. Can we use just one LLC? A:Yes. You could form one Delaware Series LLC and transfer each property by deed to a separate “series”. This would achieve your goal of segregating the properties for asset protection purposes while saving thousands of dollars in start-up costs and ongoing administration costs. The Delaware LLC Act provides for the creation of separate “series” within a LLC whose debts and other liabilities are enforceable against that series alone. The series provisions allow for the creation of “separate protected cells” within one limited liability “container” without the need to create separate entities. However, to obtain this protection, each series must be treated separately. Separate books and records must be kept for each series. There can be different members and managers for each series. The LLC is a hybrid business entity which combines the best features of partnerships with corporations. LLCs are commonly used for real estate ventures and family partnerships because of their tax advantages. The LLC is formed by the filing of Articles of Organization with the Secretary of State and publishing a notice. The operating agreement, which is similar to the by-laws of a corporation, sets forth the members’ rights and obligations and the required procedures for the LLC’s operation. After forming the LLC in Delaware, you could file an application for authority to do business with the New York Secretary of State. LLCs have the following advantages over other types of business entities, especially for the acquisition and holding of real estate:

• Greater informality and flexibility of management. Members can participate in management and/or structure control of decision-making as desired.
• No stock structure and shareholder limitations as in S corporations. The flexibility in the allocation of income, gain, and loss is very advantageous. Whereas an S corporation can have only one class of stock, more than one class of ownership interest can be created in an LLC. In addition, distinctions can be made between the equity interest of employees, investor-nonmanagers, or investor-managers based on the future success of the business, a part of the business, or realization of loss on the sale of the business.
• Inability of creditors of members to force a sale or dissolution of the LLC.
• Ability to hold real estate in the LLC name, which allows transfers of interest within the LLC without recording requirements.
• Partnership “pass-through” tax treatment. LLC, like partnerships, are not subject to income taxation. Gains and losses flow through the company and are taxed to or deducted by the members.
• Special allocations and distributions. LLC members may divide income and tax liability among themselves. For example, a 10 percent member could obtain 10 percent of cash flow but 40 percent of depreciation deductions for a particular property.
• Ability of investors to participate in management without losing their liability protection as in a limited partnership.
• Avoidance of corporate-level income tax gain when appreciated property is sold.

Answers to Divorce Questions

Do you have questions about divorce, alimony, annulments, child custody, separation, prenuptial agreements, visitation, QDROs or family court? Contact attorney Elizabeth M. DiPirro at (716) 333-5144 for straight forward answers to your questions and to learn about your legal rights and responsibilities. Elizabeth was admitted to the New York State Bar in 1989. She received her B.S. in 1985 from LeMoyne College and a Juris Doctor in 1988 from S.U.N.Y. at Buffalo. Ms. DiPirro has served as a judicial hearing officer for the Buffalo City Court Small Claims Arbitration Program. She is a former Consumer Aide for the Division of Consumer Frauds of the New York State Attorney General’s Office.

Social Security Disability Questions

Q:I was injured at work and will not be able to work again. Am I entitled to any benefits through social security? A:If you worked and have paid into the Social Security Trust Fund through a Federal Insurance Contributions Act (FICA) tax, you and your dependants may be entitled to Social Security benefits and Medicare. To be insured, you must have paid sufficiently into the Social Security System for the requisite number of quarters per year prior to becoming disabled. To receive Social Security disability benefits, one must be “currently insured”. Workers disabled after the age of 31 must have 20 quarters of coverage within the 10-year period immediately preceding the onset of their disability. Those disabled under the age of 31 require fewer quarters of coverage but never fewer than six. Individuals over the age of 31 who become disabled after they have left work and who do not have 20 quarters of coverage within the 10 years prior to becoming disabled, will not be “currently insured” and will not be able to receive Social Security disability. Also check with your employer and union for long term disability insurance coverage and disability pension benefits. Q:What if I am disabled but have not worked enough to be covered by the Social Security program? A:The SSI (Supplemental Security Income) program provides a monthly stipend to aged, blind or disabled individuals who have not paid sufficiently into the Social Security system through the FICA tax to be covered by Social Security disability. To be eligible for SSI, a single adult individual may have no more than $2,000 in available resources. A couple may have $3,000. The same kind of assets exempt for the Medicaid program, such as a house and a car are also exempt for SSI.

Pressure-Treated Lumber Can Make You Sick

A Mississippi couple used pressure-treated lumber to build their dream home because they did not want the exterior, bathroom and kitchen to rot. They ate, drank and smoked after handling the wood with their bare hands. They burned some of the wood scraps. A few weeks later, the wife became violently ill. She was in and out of the hospital six times over the next four months. The amount of arsenic in her system – more than 100 times what is considered a safe level – led doctors and police to suspect that her husband was trying to kill her. The prosecutor took an attempted murder case to the grand jury which declined to indict the husband. An FBI investigation revealed that the arsenic was coming from the pressure-treated wood. The couple claims that no one told them that pressure-treated wood contained arsenic, let alone gave them any instructions as to how it should be handled. They are suing eight companies that made, distributed or sold the pressure-treated wood; the company that built their home; and the American Wood Preservers Institute, the industry’s national trade association. They claim that the defendants knowingly marketed and sold a defective and dangerous product without any notice or warning to the public, knowing that the average consumer would not recognize the potential danger it posed to human health. In a 1986 agreement with the Environmental Protection Agency, the industry agreed to voluntarily distribute a set of safe-handling instructions wherever their products are sold. According to those instructions, a dust mask, goggles and gloves should always be worn when working with the wood. All work should be done outdoors, if possible. Exposed skin should be washed thoroughly before eating, drinking or smoking. The wood should never be burned. At least three class-action lawsuits are pending against chemical companies, wood treatment companies and retailers. Dozens of individual lawsuits are pending for personal injury or property damage from arsenic that leached out of pressure-treated, outdoor wood structures such as decks, docks, picnic tables and playground equipment. The wood is treated with an insect and rot-resistant chemical called chromated copper arsenate (CCA). In some states, the wood is called “salt-treated wood” because it is a salt formulation of copper and chromium. The plaintiffs claim that arsenic leaches out of the wood, causing neurological problems, skin problems, amputations, fatigue, and a variety of cancers. Consumers who have sawed the wood, burned it or got splinters have become very ill, some even close to death. A Utah woman received a $150,000 settlement in federal court for splinters from CCA-treated wood that resulted in the ends of her two fingers being amputated. The Centers for Disease Control recently named arsenic, a heavy metal that accumulates in the liver, as the single most dangerous substance to human health, ahead of mercury, lead and benzene. The industry announced that sales of pressure-treated wood products containing arsenic will be phased out for residential use by the end of 2003, to be replaced by other wood preservatives that do not contain arsenic.

Disclaimer

While a great deal of care has been taken to provide accurate and current information, the ideas, suggestions, general principles and conclusions presented in this newsletter are subject to local, state and federal laws and regulations, court cases and any revisions of same. The reader is thus urged to consult legal counsel regarding any points of law – this newsletter should not be used as a substitute for competent legal advice. The purpose of this newsletter is to give the reader a general understanding of the law – not to provide specific advice. Every effort has been made to achieve accuracy. The law constantly changes and is subject to differing interpretations. Always consult with your attorney and act only on his or her advice. Legal Survival, LLC shall not be responsible for any damages resulting from any inaccuracy or omission. This newsletter is designed to provide accurate and authoritative information in regard to the subject matter covered. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Certain portions of this newsletter may be applicable only to New York State law.