Can a Small Estate be Handled Without Probate?

Muhammad Ali travels to Vietnam with Albro Lundy

Can a Small Estate be Handled Without Probate?

By Brad N. Baker

Not all estates without a Trust or Will have to be probated even if the decedent did no planning whatsoever; however, the larger the dollar sums in the estate, the less likely that probate can be avoided. California has a statute on the books that allows up to $150,000 to be transferred without probate after a person dies.

How do I know if my estate qualifies to transfer assets without probate?

In computing the dollar amount to see if you qualify for this statute, there are certain assets that are NOT, counted.  California Probate Code Section 13050 sets forth the exhaustive list, but they are basically as follows:

1.  Any assets that are held in joint tenancy with a person who survived the Decedent even if the surviving joint tenant did not contribute to the jointly held asset.

2.  Any vehicles with title in the name of the Decedent.

3.  Any boats held in the name of the Decedent (yes even multi-million-dollar yachts are not counted towards the $150,000 limit!) .

4.  Any mobile home, manufactured home, truck camper, and, drummmm rolllll, any floating home held in the Decedent’s name.

5.  Any payable on death accounts (POD accounts), assets held “as trustee for” (ATF accounts), or assets that have a named beneficiary, such as life insurance, annuities, IRAs, and 401(k)s.

If you are under the $150,000 limit after excluding all of the above items from the computation, then a couple of hurdles must still be cleared to be able to use the affidavit/declaration process that is set forth in Probate Code Section 13101.

What are the steps to transferring assets without probate, if I qualify?

1.  At least 40 days must have elapsed since the Decedent died.

2.  No probate proceeding is open or has been opened for the Decedent.

3.  Oh yeah, you have to be entitled to the asset being transferred by way of the 13101 Affidavit.  (Sometimes this is a little tricky, so check with a lawyer to make sure that the correct people are signing the declaration to get the transferred property.)  California Probate Code Section 13006 (just Google it!) sets forth who are the “Successors” of the Decedent.

4.  You will need a certified copy of the Decedent’s death certificate for each transfer requested. All individual(s) or trustee(s) entitled to the asset must sign the declaration and have the signature(s) notarized.  (Yes, the trustee named in a Pour-Over Will would be the Successor, not the ultimate beneficiaries of the Trust.)

Can I transfer assets by myself?

Many people find that although the above can be accomplished on their own, the 13101 declarations seem to work better in the world of finance when an attorney’s letter attaches the declaration when it is mailed or delivered to the institution holding the Decedent’s asset.  (I believe that the holder of the asset has a better level of comfort that they are turning over the asset to the correct person(s) when an attorney’s letter goes with the declaration.)

Should I get Durable Powers of Attorney even if I don’t have a Will?

So, do we really need to plan if this nifty procedure exists?  If you promise to die quickly once you lose capacity, then you are pretty safe if you are within the statutory limits. However, if no planning whatsoever is done, and you don’t die quickly, then we could be in a conservatorship situation because no one has access to the accounts until 40 days after the Decedent “dies”.  See the gap?  It doesn’t work for incapacitated situations.  So it is recommended that you still get Durable Powers of Attorney in place, one for Asset Management, and another for Medical Decisions, even if you don’t do a Living Trust or a Will.

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Albro Lundy III attorney
Brad N. Baker

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

How to Negotiate Common Area Costs (CAM) in Commercial Leases

Commercial Real Estate Tenant Tips

How to Negotiate Common Area Costs or CAM in Your Lease

Tenant Tip Series

By Clint Wilson

Tenant Tip Series is a series of different tips provided by Baker Burton & Lundy for commercial tenants to consider while negotiating retail leases, restaurant leases, commercial leases or industrial leases. This series will regularly address a variety of important tenant-oriented issues that arise during lease negotiations.

Today’s tip identifies different strategies that any tenant in a multi-tenant project or shopping center should utilize during lease negotiations to gain some cost control measures over Additional Rent. “Additional Rent” is the amount a tenant is obligated to pay under the lease in addition to the base rent and includes the amorphous “common area costs” (also commonly known as “CAM Costs,” “Operating Costs” and “Operating Expenses”). A tenant in a multi-tenant project or shopping center will generally be obligated to reimburse the landlord for its pro rata share of such expenses, which are usually broadly defined to include any and all costs the landlord incurs for real estate taxes, and in maintaining, repairing, replacing, improving, insuring and managing the project or shopping center.

The Issue With Common Area Costs (CAM)

Since common area costs and the increases thereof are generally not fixed or even capped, they often outpace the annual increases in base rent. Additionally, landlord-oriented leases will include few or no limits on the type of and amount of charges the landlord includes as common area costs, thereby enabling the less scrupulous landlord to use common area costs as a means of profiting from such charges. It’s worth emphasizing that the purpose of common area costs is to reimburse the landlord for legitimate expenses associated with the project or shopping center (and specifically the common areas) and not to provide the landlord with the opportunity to profit from such charges. With that said, there are many charges and expenses that should either be excluded from the definition of common area costs or capped to ensure that tenants are paying only their fair share of such costs.

As an example, most leases provide that the landlord can charge the tenant for a management fee for the landlord or some third-party company to manage the project or the shopping center. Without a cap on the amount the landlord can charge as a management fee, the landlord could charge a reasonable management fee or an exorbitant management fee for the landlord’s cousin to manage the project or shopping center. The landlord might also charge a separate administration and supervision fee in addition to the management fee. We have seen these fees as high as 30% of the common area costs, which is an indicator that the landlord is using common area costs to generate additional income. As such, the importance of negotiating certain cost control measures over common area costs becomes paramount in controlling the amount the tenant pays in additional rent.

There are also various other charges and expenses that should be excluded from common area costs which are usually included by the landlords with more favorable leases, including capital expenditures, attorneys’ fees, damages caused by the acts of landlord, etc. In order to make sure that the tenant is paying for legitimate common area costs, here are few suggestions.

Steps To Reducing Common Area Costs (CAM)

1. Establish a First Year Cap on CAM Costs

First, the tenant should start by asking the landlord for a budget of what common area costs are projected to be for the first calendar year during the lease term. A good starting position would be to then ask for a first year cap on common area costs based on the projected common area costs set forth in the budget. If the landlord rejects this proposal, then the tenant can propose that the projected common area costs plus 5% should serve as the first year cap, which will provide the landlord with some flexibility if the actual common area costs are more than what was projected in the budget. Also, getting a budget of common area costs will provide the tenant with insight as to what expenses and charges the landlord intends to include in common area costs. This is helpful in identifying any expenses and charges that should be excluded from common area costs, as further discussed below.

2. Set an Ongoing Cap on CAM Costs

Along with the first year cap, the tenant should also request an ongoing cap on common area costs so that such costs cannot increase year-over-year in excess of some percent (e.g., 5%). An ongoing cap will provide the tenant with a much clearer picture of what common area costs (and additional rent) will be in the future. Being better able to forecast future expenses is beneficial to any tenant. It’s worth noting that certain items of common area costs are generally excluded from ongoing caps, including real estate taxes and insurance costs.

3. Negotiate the Exclusions from CAM Costs

The tenant should also provide the landlord with a list of items that should be excluded from common area costs, such as mortgage payments, capital expenditures and management fees in excess of some percent of common area costs, etc. This ensures that the landlord is not using common area costs to generate profits but to actually cover legitimate expenses relating to the common areas of the project or shopping Center. We typically negotiate on behalf of our client-tenants an extensive list of expenses that are excluded from common area costs.

4. Include an Audit Right

Lastly, the tenant should always negotiate for an audit right (i.e., the right to review the landlord’s books and records relating to common area costs) to keep the landlord honest. If the tenant elects to have an audit performed and the results show that the tenant overpaid for common area costs during the applicable year, then the landlord should then reimburse the tenant the overpayment amount or credit such amounts from the next installment of rent.

Final Thoughts on CAM Cost Control

These are just a few cost control measures that can assist the tenant with controlling and reducing its common area costs and Additional Rent. Over the term of the lease, which might be 5 to 20 years, this can equate to considerable savings to the tenant. Obviously, negotiating to include these measures depends on many factors, including the leverage either party possesses in the negotiation and what is considered customary at that time in that market. If you need assistance in the negotiation process, please reach out to an attorney experienced in commercial lease negotiations.

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

 

Albro Lundy III attorney

Clint Wilson

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

BB&L Congratulates New Partner Evan Koch

Baker, Burton & Lundy Law Partners

BB&L law partners Albro Lundy, Evan Koch, Brad Baker & Kent Burton

Baker, Burton & Lundy Contratulates New Law Partner Evan Koch

Baker, Burton & Lundy is pleased to announce that trial lawyer Evan Koch has been made a partner. After meeting BB&L partners Kent Burton & Albro Lundy on the volleyball courts of Hermosa Beach in 2011, Evan began working as a full-time attorney in the litigation department. Evan’s skill in getting results for his clients was noticed by the legal community and he has been recognized as a Rising Star by SuperLawyers in 2014 – 2018.

“Evan has become an integral part of our winning team,” said partner Albro Lundy, “winning both clients and cases. His superior legal analysis and keen aptitude has added to the foundation of our growing litigation practice especially in the areas of personal injury, employment and business litigation resulting in several seven figure judgments and settlements. Best – our clients really like him.”

Committed to the South Bay community, Evan is an active member of the South Bay Inns of Court, Co-Chair of the Labor and Employment Section of the South Bay Bar Association, volunteer in the South Bay Bar Association’s “Ask a Lawyer” Program, and graduate of Leadership Hermosa Beach (Class of 2014). Evan graduated with honors from Michigan State University and cum Laude from Washington College of Law at American University, Washington DC. Before joining Baker, Burton & Lundy, Evan also clerked for the Honorable Rex Heeseman at the Los Angeles Superior Court and the Honorable Reggie B. Walton at the United States District Court for the District of Columbia.

Albro Lundy III attorney

Evan Koch, Trial Attorney

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Baker, Burton & Lundy Wins Best of the Beach Civil Attorney

Baker, Burton & Lundy Wins the 2018 Easy Reader Best of the Beach Award

Local Hermosa Beach Law Office is Honored as Best Civil Attorney in South Bay

March 8, 2018

The law office of Baker, Burton & Lundy is honored to be voted the Best of the Beach Award for Civil Attorney in the South Bay by the Easy Reader.

Best Civil Attorney

The law firm of Baker, Burton and Lundy is known locally for representing residents before planning commissions, mediating neighborhood disputes, and providing pro bono services to nonprofits. Its one story building on Pier Avenue in downtown Hermosa Beach is about as far from the Century City high rises favored by high powered attorneys as one can get, literally and figuratively, and still be in Los Angeles County. Office dress favors Reyn Spooner Hawaiian shirts over starched Oxford cloth and their email ends in SurfLaw.Com.

The fact that the firm has won over $4 billion in settlements, including $2 billion against Sempra Energy, is nowhere in evidence, except for the fact that they recently bought the nextdoor dry cleaners and are remodeling the space to accommodate their growing staff.

 See the full posting here: https://www.easyreadernews.com/best-beach-2018-professional-services/

 Serving clients from all the South Bay beach cities as well as all over California, Baker, Burton & Lundy is the longest running business on Pier Avenue in Hermosa Beach and committed to providing the excellent legal service to our clients right here in the South Bay.

 

 

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Public Storage Class Action Law Suit

Public Storage Deceptive Advertising

Public Storage advertisement from 2010

Class Action Lawsuit Against Public Storage

By Brad N. Baker

Confronting Deceptive Business Practices in California

Update 7/31/19 – BB&L is no longer accepting Public Storage cases 

Throughout our firm’s history, we have consistently fought to protect and assist consumers across California. From winning cases that make streets safer throughout the state of California to using a class action lawsuit to tackle the energy companies that caused the 2001 energy crisis in California, Baker, Burton & Lundy is a champion for consumers.

Currently, we are involved with a class action that alleges deceptive business practices by Public Storage. This case could benefit hundreds of thousands of California consumers, and could also lead to better business practices in the world of self-storage.

Public Storage for decades advertised a $1 Special where the “first month for only $1” was the main message conveyed to consumers.

It turns out that this may not have been exactly accurate. A case has been brought in Los Angeles Superior Court alleging that said advertisements were false and misleading. There are additional charges and conditions that could make the first month cost the consumer closer to $50.

A second aspect of the case involves the failure of Public Storage to disclose to its renters a fact that was known only to Public Storage. This fact is that approximately 75% of each insurance premium dollar was paid to Public Storage and its partners as an “access fee”. It has been opined that this should have been disclosed to tenants.

We are gathering information to better understand the history of the company’s practices. Your involvement could help ensure fair treatment for California consumers. If you rented from Public Storage or spent any time working for Public Storage  and would be willing to talk to us, please call our office at (310) 376-9893 or email info@bakerburtonlundy.com

 

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

 

 

 

Brad N Baker attorney

Brad N. Baker

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

How to Avoid Having a Lien Recorded Against Your Home after Construction

Avoiding Construction Liens on your Home

How to Avoid Having a Lien Recorded Against Your Home after Construction

By Clint Wilson

During the remodel or renovation of your home, here are some steps to take to help ensure that your property remains lien free after construction is complete. First, it’s worth mentioning that during construction, various subcontractors and materialmen may have sent you preliminary lien notices. These notices are meant to inform you which subcontractors and materialmen, if not paid in full, have the right to record a lien against your property. If any subcontractors or materialmen have previously provided you with a lien notice, you will definitely need to obtain unconditional lien releases upon completion of work.

With that said, the home improvement agreement between you and the general contractor should already provide for most of the following, however, if it does not (or if there was no agreement), here are some items worth requesting from your general contractor to help ensure your home remains lien free after construction.

  • Conditional lien releases from those subcontractors and materialmen that have completed their work (or portion thereof) but have not been paid in full.

    Conditional lien releases should be submitted by the general contractor with each application for payment or invoice. “Conditional” means that they will release their lien rights upon getting paid. Each conditional lien release should be followed by an unconditional lien release once payment has been made.

  • Unconditional lien releases from those subcontractors and materialmen that have been paid in full.

    Unconditional lien releases from subcontractors and materialmen that have completed their work and have been paid in full should accompany subsequent applications for payment or invoices.

  • Unconditional lien releases from all subcontractors and materialmen once the general contractor has been paid in full, or preferably, prior to final payment being made.

    Note that pursuant to an agreement with the general contractor, the owner might have negotiated for the right to withhold some portion of the general contractor’s fee until the owner is provided with all unconditional lien releases and the project is complete. As such, the general contractor will need to ensure that all subcontractors and materialmen are paid and have provided unconditional lien release prior to receiving its final payment.

  • Notice of Completion.

    Also, depending on the project, a Notice of Completion recorded by the general contractor against the property. The Notice of Completion will limit the period of time that any subcontractor or materialmen can file a lien against the property from 90 days to 30 days.

Hopefully by asking for these items, or better yet, having the general contractor required to provide these items in your home improvement agreement, you can avoid having a lien recorded against your property. Avoiding a lien is always easier than removing one from your property and it is prudent to seek legal advice for your specific situation.

 

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

 

Albro Lundy III attorney

Clint Wilson

call Baker, Burton & Lundy

To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Tenant Holdover – What if I Stay Past My Lease Term?

Tenant Holdover Information from baker-burton-lundy-law-office

A Common Tenant Concern – What if I Stay Past the Lease Term?

By Clint Wilson

Holdover Tenant’s Liability after Lease Term Expiration

Frequently we get calls from clients who realize their lease is due to expire and they need advice as to their liability if they do not surrender the leased premises upon expiration of the lease (i.e., holdover). In other words, they would like to know what is their liability as a holdover tenant.

A holdover tenant is a tenant who continues to occupy the premises after the term of the lease expires. The liability of a holdover tenant will depend on whether the tenant, who remains in possession of the premises after the lease expires, does so with or without the landlord’s consent.

A holdover tenant, who obtains the landlord’s consent to holdover, will be considered a tenant at will (likely a month-to-month tenant if rent was paid in monthly installments) subject to the same terms and conditions set forth in the lease including any rental amount applicable to such holdover period (commercial leases often provide for an increased rental amount, such as 150% to 200% of the prior rent, during a holdover period). As such, the only liability of a holdover tenant who obtains the landlord’s consent will be the rental amount (i.e., the holdover rent) owed during any such holdover period. The landlord’s consent to such holdover may be expressed (e.g., written consent) or implied. Consent may be implied if the landlord accepts rent from the holdover tenant at the commencement of the holdover period.

It’s worth noting that the lease may specifically provide that if tenant remains in possession of the premises after the lease expires without the landlord’s consent, then tenant will be considered a tenant at will or a month-to-month tenant rather than a trespasser (being deemed a trespasser is discussed below).  Therefore, if tenant does not obtain the landlord’s consent to holdover it will still be considered a tenant at will or month-to-month tenant pursuant to the lease and will only liable for the holdover rent during the holdover period.

Without any provision in the lease to the contrary, a holdover tenant, who does not obtain the landlord’s consent to holdover, may be considered by the landlord as a trespasser. A holdover tenant, who is considered a trespasser, will be liable to the landlord for the fair rental value of the premises as well and any other damages that the landlord can recover from the holdover tenant (e.g., loss of a new tenant). Additionally, if the landlord entered into a new lease with another tenant for the premises, then the holdover tenant having knowledge of such new tenant, may also be liable to the new tenant for damages for loss of use of the premises. Lastly, if the lease includes an indemnification provision, which most commercial leases will certainly include, the holdover tenant may have to indemnify the landlord from claims arising against the landlord resulting from tenant’s wrongful holdover (e.g., claim by the new tenant against the landlord for its failure to deliver the premises as set forth in the new lease).

If a holdover tenant continues to trespass, then the landlord will likely have to initiate a special court proceeding known as an unlawful detainer action to evict the holdover tenant as the landlord cannot use self-help to evict the holdover tenant (e.g., changing locks and removing tenant’s belongings). If the court rules in favor of the landlord, then it will issue a writ of possession, which orders the sheriff to remove the tenant from the premises, but will give the holdover tenant five days to move voluntarily. If the lease provides for an attorneys’ fees clause, then the wrongful holdover tenant will be liable to the landlord for all damages as well as its attorneys’ fees.

In conclusion, a tenant who remains in possession of the premises after the lease expires with the landlord’s consent will only be responsible for the holdover rent (likely an increased rental amount during the holdover period), while a tenant who remains in possession of the premises after the lease expires without the landlord’s consent will likely expose itself to a range of liabilities, including damages sustained by the landlord (such as rent, lost tenant), the landlord’s attorneys’ fees, and possible damages incurred by the landlord’s new tenant.

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Clint Wilson attorney

Clint Wilson

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Helping Families who Suffered from Morgue Negligence

Helping families deal with grief and mortuary negligence

Helping Families Who Have Suffered from Morgue Negligence

By Albro L. Lundy III

The Intersection of my Personal and Professional Experience

When you are an attorney, your clients don’t often call you with good news in their lives. Usually someone is calling because they are facing a difficulty, sometimes a very big one in their life. And sometimes, they call because they know you have faced or dealt with a similar difficulty.

It has been that way in my life. My father, USAF Major Albro L. Lundy Jr., was lost in the Vietnam Conflict in 1970, flying search and rescue over Laos. My family had been told that he was dead, actually Killed In Action, Body Not Recovered. For years that is what we believed until information started to surface in 1990 that he might have survived the incident. The story of the search for him is too long to tell here, and could actually take a book to tell. In many ways what I learned along the way has impacted my career as an attorney.

While searching for my father, I learned more than I ever wanted to about human remains and using DNA testing and dental records to prove identity. I also learned the high value placed on returning a body with dignity to a family and treating it with honor. The US government spends millions of dollars and many servicemen and women have given their lives to bring back a body to a grieving family.

It was this experience of mine, this experience with remains and identification, that led a good friend to refer one of their newly widowed friends to me. She had received a knock on the door late at night from the crematorium where she thought her husband had been cremated a few weeks before. They asked her to identify pictures of a body that they thought was her husband – since they realized they had cremated the wrong body. The ashes she thought were his were sitting on the mantle close by. Shocked and horrified, she needed to seek and discover the truth of what happened to her late husband, and receive justice for the dishonor to her husband’s body as well as the traumatic shock that the news and pictures of her partially decomposed husband had caused her. She could not identify him through the photos and needed to find alternate means to identify his remains through intra-oral photographs and dental record comparisons. Many times the bodies that came home from Vietnam had only the dental records to make identifications as well. After helping her confirm the identity and finally honor her late husband’s wishes, we were able to help her also receive a significant settlement for the emotional harm and trauma she suffered through this mistake.

This experience has given me the training, education and skill to assist other families in need when they have experienced negligence by a mortuary, crematorium or morgue. Our law firm has helped families presented with the wrong ashes, missing bodies, and identification of bodies. This is something we hope no family even needs to go through. But if you suspect something unusual has happened to the body of your loved one, know that there can be help and legal remedies. Our culture places a high value on the dignified treatment of a body after death and allowing it to rest in peace. Our law firm stands ready to help families with this sad and difficult part of life when needed.

http://www.dailybreeze.com/general-news/20170222/switched-at-death-trial-set-over-burial-of-wrong-woman-in-cemetery

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Albro Lundy III attorney

Albro L. Lundy III

call Baker, Burton & Lundy

To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Property Line Issues – Good Fences Make Good Neighbors

Good Fences Make Good Neighbors - Solving Property Line Disputes

Resolving Property Line Disputes

“Good Fences Make Good Neighbors” – Robert Frost

By Clint Wilson and Kent Burton

If good fences make good neighbors, what happens when the fence you share with your neighbor has been constructed on your side of the property line depriving you of a portion of your property and allowing your neighbor exclusive use and access to a portion of your property?

This scenario often presents itself after a property owner (we’ll call this owner “NotSoHappy”) has a survey completed of her property, for whatever reason (e.g., remodeling, selling or purchasing the property), and the survey reveals that the good neighbor next door (we’ll call this neighbor “Encroacher”) has for years been using and benefiting from that portion of NotSoHappy’s property made available to him by the erroneously placed fence. NotSoHappy, who undoubtedly has been paying property taxes based on the legal description of the property, might feel that she is entitled to all of her property, including that portion being enjoyed by Encroacher on the other side of the fence (we’ll call this portion the “subject property”). More importantly, the implications in selling NotSoHappy’s property or building improvements near the property line are further complicated by the erroneously placed fence.

The first and logical step in this situation, after showing Encroacher the survey, would be for NotSoHappy to ask if the fence can be relocated to the actual property line. But what if Encroacher is not such a “good neighbor” and despite not having prior knowledge of the erroneous placement of the fence, adamantly refuses to relocate the fence and even threatens litigation if the fence is moved without his consent? To make matters more complicated, what if Encroacher asserts that he has spent a lot of time (in particular more than 5 years) and money improving his property, including the subject property. At this point, Encroacher and NotSoHappy both have compelling arguments, but what is the likely outcome if Encroacher and NotSoHappy resolve their dispute in court?

First, it is worth noting that there are various legal arguments that Encroacher might assert in hopes of retaining the right to use or possess the subject property, including adverse possession and the agreed boundary doctrine (both of which are not the subject of this article). However, adverse possession and the agreed boundary doctrine are not likely to apply in this particular situation or in general to a boundary line dispute arising from an erroneously placed fence. In addition to the reasons discussed below, adverse possession requires the adverse claimant to have paid property taxes on the subject property, which is rarely the case in a boundary line dispute as property taxes are based on the legal description for each property. With respect to the agreed boundary doctrine, the doctrine provides that a boundary may be established by agreement between coterminous landowners where the true location of the boundary is uncertain, which is rarely the case in developed areas where boundary lines are well defined. As such, the focus of this article will be on Encroacher’s ability to obtain a prescriptive easement or equitable easement over the subject property.

If NotSoHappy were to pursue an action at law against Encroacher (e.g., an action of declaratory relief, quiet title or trespass), Encroacher might seek a prescriptive easement for the continued use of the subject property. As way of background, an easement, in general, is the non-exclusive right to use another’s property for a specific use. While easements can be granted by a property owner to another (e.g., to an adjacent landowner for ingress and egress), an easement can also be acquired through prescription without the property owner’s consent. To establish the elements of a prescriptive easement, a claimant (i.e., the person claiming the easement) must show that the use of the subject property was (i) continuous and uninterrupted for the statutory period of five years, (ii) open and notorious; (iii) hostile to the true owner; and (iv) under claim of right. Without digressing into a discussion on the foregoing elements, if Encroacher can satisfy these elements, then he will have the right to the continued use of the subject property for the specific purpose for which he used the subject property during the 5-year period.

Without elaborating on whether Encroacher satisfies each element of a prescriptive easement, the courts have generally held that a claimant cannot obtain an exclusive prescriptive easement to use the property of another through encroachments or fences. Since Encroacher would have the exclusive right to use the subject property located on his side of the fence (as the fence would necessarily exclude NotSoHappy from the subject property), the effect of such an easement would be to effectively grant Encroacher fee title to the subject property. To this point, the courts have reasoned that when “the use of land becomes so comprehensive as to supply the equivalent of fee title ownership, and conveys an unlimited use of real property, it constitutes an estate and not an easement.” Mehdizadeh v. Mincer.

In these situations, courts draw a distinction between adverse possession, where one can obtain fee title to another’s property, and prescriptive easements that should only provide for the non-exclusive right to use another’s property for a specific use. Adverse possession, which includes many of the same elements used to establish an easement by prescription, also requires that claimant pay the property taxes on the property being adversely possessed, as noted above, which is rarely ever the case in a dispute over an erroneously placed fence. As such, adverse possession is very rarely is applicable to a boundary fence dispute.

To this point, the court in Mehdizadeh quoting an earlier decision in Silacci v. Abramson, reiterated, that “an exclusive easement is a very unusual interest in land. The notion of an exclusive prescriptive easement, which as a practical matter completely prohibits the true owner from using his land, has no application to a simple backyard dispute. An easement, after all, is merely the right to use the land of another for a specific purpose—most often, the right to cross the land of another. An easement acquired by prescription is one acquired by adverse use for a certain period. An easement, however, is not an ownership interest, and certainly does not amount to a fee simple estate.”

In the dispute between NotSoHappy and Encroacher, if the fence is not relocated to the property line, then Encroacher’s exclusive use of the subject property would be the equivalent of a fee interest because the fence would effectively exclude NotSoHappy from the subject property. As such, Encroacher will not likely prevail under the prescriptive easement doctrine against NotSoHappy.

Alternatively, Encroacher might have more success in a court of equity (this is the same court, only claimant asks the judge to apply equitable principles rather than the rules of law). The dispute between NotSoHappy and Encroacher would be resolved in a court of equity if either party seeks an injunction against the other (e.g., NotSoHappy seeks to enjoin Encroacher from trespassing, or alternatively Encroacher seeks to enjoin NotSoHappy from exercising her self-help rights in relocating the fence). Once in a court of equity, the Court will have equitable powers (i.e., not necessarily bound by the rules of law) to determine whether an “equitable easement” would be just under the circumstances. The courts use the term “equitable easement” in reference to a judicially-created easement on equitable grounds when claimant (i.e., the encroacher seeking an easement) would not otherwise be entitled to an express or a prescriptive easement.

Encroacher might succeed in being awarded an equitable easement if he made expensive improvements to the subject property and the relative hardships between Encroacher and NotSoHappy “tip disproportionately” in favor of Encroacher. A court in equity balancing the hardships between the parties will consider whether (i) claimant used and improved an easement for a long period of time with an innocent belief that he or she had a right to use the easement, (ii) there would be irreparable harm if claimant could not continue to use the easement, and (iii) the property owner would suffer little harm from the further use of the easement by claimant. The court can then balance the equities by requiring claimant to pay the other property owner the fair market value of the property being encroached upon.

This was illustrated in Hirshfield v. Schwartz, which involved a boundary line dispute between two adjacent property owners in Bel-Air, California. In this case, claimant’s predecessor had constructed a swimming pool in the backyard and installed a fence. Over the years, claimant thought the fence marked the boundary, and caused further improvements to be constructed, including a koi pond, waterfall, stone deck, putting green and sand trap. However, after a survey was completed, it was determined that certain of claimant’s improvements encroached on the neighbor’s property, including a portion of the sand trap and utilities for the waterfall and pool.

In applying the relative hardship doctrine, the court in Hirshfield, denied the property owner’s request for an injunction to remove claimant’s encroachments, and instead granted claimant an equitable easement over a portion of the owner’s property. Moreover, the court ruled that the equitable easement would terminate upon the happening of certain events, and further ordered claimant to pay the fair market value of the property being encroached to the owner.

In the dispute between Encroacher and NotSoHappy,  Encroacher might have some success in a court of equity, however, it is important to emphasize that the court will start with the premise that Encroacher is the wrongdoer, and the hardships by granting the injunction against Encroacher must be greatly disproportionate to the hardship caused by the continuance of the encroachment, and this fact must clearly appear in the evidence provided by Encroacher. See Hirshfield v. Schwartz.

At the end of the day, Encroacher has the burden of proof to establish that (i) in an action at law, his right to the continued use of the subject property has ripened into an easement by prescription that does not provide for the exclusive use of the subject property, or (ii) in a court of equity, the relative hardship doctrine supports a finding of an equitable easement in his favor. Even then, a balancing of the equities will usually require that Encroacher pay the fair market value of the subject property to NotSoHappy. More likely than not, Encroacher would be wise to work amicably to resolve any dispute with NotSoHappy before incurring legal expenses and being labeled a bad neighbor.

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

REal Estate Attorneys Kent Burton and Clint Wilson

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Thanksgiving Reflections

Hermosa Beach in Fall

Thanksgiving Reflections

By Brad N. Baker

Although the challenges in our lives seem to be headed our way with increasing speed, the blessings that we are given far exceed the challenges when a moment is taken to reflect.

The amount of information that is available to all of us is truly staggering compared to years past.  We are now able to empathize with people from the four corners of the globe when tragedy strikes. We almost instantly now know of matters that just ten years ago would have gone unreported to us, and thus unnoticed.

How do we survive the onslaught of information and maintain the inner peace that we all strive to attain?  Counting our blessings each and every day, not just on Thanksgiving, is one path that can provide some perspective and help calm the soul.

The ability to turn on the tap and have safe drinking water is something that I just take for granted (even in the midst of drought) until I actually think about it; flipping a switch and getting electricity; walking into a grocery store and having 10,000 choices for food; hopping into our car and driving up to the pump to get gas; having well-trained doctors and nurses and emergency response teams at our disposal; charitable organizations that provide temporary safety nets for us all and reach out to provide help to those less fortunate…

The list is really limitless when blessings are recognized.

The blessing of health is the one that seems to be overlooked the most until we are robbed of the feeling of wellness.  To receive the love of another, and to be able to love someone are more of the blessings that get overlooked.

The challenges are there, to be sure.  However, the tremendous blessings that surround us will hopefully help us gain perspective and help us survive the challenges.

We are all in this together which is actually another blessing that often goes unrecognized.  Despite our differences, there are actually many many more common bonds that we share that will allow us to work together when the going gets tough.

We at the law offices of Baker, Burton & Lundy wish all of you inner peace this Thanksgiving Holiday and thank each and every one of you who add to the blessings that surround us.

Día de Los Muertos and Mortuary Negligence

Day of the Dead

Día de Los Muertos and Mortuary Negligence

By Albro L. Lundy III

Reflections on Resting in Peace

This week many countries and cultures celebrated All Souls’ Day also known as Día de Los Muertos in the Latin culture. In our office, Diane created an All Souls’ Day display on her desk with funeral programs and mass cards to honor her friends who have died this past year. She included marigolds (the traditional flower in Mexico for the Day of the Dead) and items with special meanings to make a lovely shrine. As I stopped to admire it, I realized that I had been friends with most of the people she was honoring. And it gave me pause to reflect on life and death. I had just exchanged condolences with another attorney I have never met but who is opposing me on a case. He indicated he had a death in the family and apologized for his delay in responding to me. I responded that it was times like these that made us realize what was most important in life. He immediately agreed and we, two adversaries, shared a moment beyond the case at hand.

Rest in peace. That most common phrase is truly meant for both the spirit that has passed into afterlife as well as those of us who remain in these mortal coils. Death is part of life although in this modern world we try to hide that fact. Gone are the days when the kitchen table or the living room couch served as the resting place for the body of a deceased loved one while the family gathered for their final goodbye or in the Irish tradition, a wake.   Nowadays the body is whisked away by “professionals” and we are left to trust that they are going to handle our loved ones with as much respect as we would. But I am always left wondering if that really is true. You see, I have handled many mortuary and crematory negligence cases and I have seen true horror stories (too graphic to describe here) of how they treat your loved one’s remains.

Unfortunately the bottom line for some of these organizations that provide cut-rate crematory services or sometimes even high-end funeral services is how much money they can make and they cut corners. Their economic welfare triumphs over your emotional well-being.

A powerful but not well-known legal tool I have used is a case decided by the California Supreme Court that makes an exception (the only real exception in contract cases) that emotional distress damages can be recovered for a mortuary’s breach of their contract and failure to respect and care for the remains of your loved one.

There is enough pain when losing loved ones without it being compounded by the people you entrust for their peaceful repose.   If you have any suspicions there has been mishandling of your loved one’s remains, you should definitely investigate. The sacred duty of caring for your loved ones after their death should remain inviolate.

 

Albro L. Lundy III attorney

Albro L. Lundy III

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Upcoming Changes to Employee Overtime Pay: What is the FLSA’s “Final Rule” and How Will it Affect Your Business?

Evan Koch on Employment Law

Upcoming Changes to Employee Overtime Pay:

What is the FLSA’s “Final Rule” and How Will it Affect Your Business?

By Evan Koch

A number of business owners have recently contacted our office regarding the Department of Labor’s (“DOL”) new overtime pay rule that is going into effect on December 1, 2016. These business owners are specifically wondering what this new overtime rule is and how it will affect their business. With the effective date for this new rule rapidly approaching, now is the perfect time for employers to learn what they can about the upcoming changes in the law and determine what actions, if any, they will need to take to comply with the law.

What is the DOL’s new overtime rule?

On May 18, 2016, the DOL finalized a new overtime rule (the “Final Rule”) under the Fair Labor Standards Act (“FLSA”), which increases the minimum salary level that certain workers must meet to qualify for one of the major exemptions to overtime pay under the FLSA: the “white-collar” exemption.

As a little background: The FLSA requires that most employees in the United States be paid (1) at least the federal minimum wage for all hours worked and (2) overtime pay for all hours worked over 40 in a particular workweek. However, the FLSA provides an exemption from both the minimum wage and overtime pay requirements for certain “white collar” workers who are employed as executive, administrative, and professional employees. Examples of employees who generally fall into this exemption are executive assistants, retail managers, engineers, and creative professionals.

To currently qualify for this “white collar” exemption, an employee must generally: (1) receive their full salary for any week they perform work; (2) earn at least $455 per week; and (3) have primarily executive, administrative, or professional job duties assigned to them. If an employee qualifies for this “white collar” exemption, that employee is exempt from the FLSA’s minimum wage and overtime pay requirements.

However, under the Final Rule, the minimum annual salary threshold for this “white collar” exemption will be increased from $455 per week ($23,660 annually) to $913 per week ($47,476 annually), starting on December 1, 2016.1 The Final Rule also allows employers to now count bonuses and commissions towards as much as 10 percent of the salary threshold.

The “white collar” exemption also applies to “highly-compensated” workers who “customarily and regularly” perform one of the exempt duties of an administrative, executive or professional employee (though it is not their primary job duty) and who have a total annual compensation of at least $100,000. The Final Rule similarly increases the income requirements of this exemption from $100,000 per year to $134,000 per year starting December 1, 2016.

How will this Final Rule affect my business?

Short Answer: The Final Rule will not affect compensation of non-exempt employees, as the changes in the Final Rule primarily pertain to employee eligibility for the “white collar” exemption. Accordingly, unless you are currently utilizing the “white collar” exemption for your employees, the Final Rule will not likely affect your business.

Long Answer: If you do have employees who currently qualify for the “white collar” exemption, then the Final Rule might affect your business. Until recently, many California businesses did not generally worry about the federal minimum salary thresholds for the DOL’s “white collar” exemption because the California salary requirements for the state’s “white collar” exemption were so much higher. To qualify for this exemption in California, an employee currently must be paid a monthly salary that is at least twice the minimum wage ($10.00 per hour), or $41,600 per year. Because the Final Rule will make the federal standard more demanding than the existing California standard, employers will now need to comply with the Final Rule if they wish to maintain their employees’ “white collar” exempt status.

In other words, the employees likely to be affected by the Final Rule in California would include those employees who are treated as exempt employees and make between $41,600 and $47,476 per year. If your business has employees who fit within these parameters, you should evaluate your current employee classifications and determine whether any currently exempt employees will lose their exempt status as a result of this Final Rule.

I have exempt employees who will be affected by the Final Rule. What should I do next?

Employers will have a number of options at their disposal for responding to the Final Rule, ranging from simply allowing the employee to be reclassified as non–exempt to adjusting the employee’s salary to maintain exempt status. Employers will want to perform their own cost-benefit analysis to determine what response, if any, is most appropriate for them. For some employers, it may be more cost effective to reclassify an employee as non-exempt and pay overtime when necessary, if the amount of overtime hours worked by that employee would be minimal. For other employers, it may be more cost effective to increase their employees’ salaries in order to avoid reclassifying an employee and paying significant overtime wages.

Because the Final Rule will not go into effect until December 1, 2016, employers still have sufficient time to review their employee classifications and implement any plans to comply with the upcoming changes. To the extent that you need assistance in making this evaluation, be sure to contact an employment law attorney to assist you with this process.

 

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

1 The Final Rule also established a mechanism to automatically update these minimum salary thresholds every three-years, so the changes coming on December 1, 2016 will likely be changed again in 2019.

Evan Koch Attorney

Evan Koch

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The Difference Between Probate vs. Wills vs. Trusts

What is the Difference between Probate vs. Wills vs. Trusts?

By Christine Daniels

Many of my friends don’t really know what estate planning means. Granted, most of them are my age, in their mid-twenties and have been lucky enough to not have experienced a parent’s unexpected, premature passing. Nonetheless, having an idea of the three main ways to administer the assets after a loved one’s passing is good info to have in your back pocket. In addition to giving you an idea of the logistics behind a very emotionally draining time, it can also allow you be in a better place when thinking of your own assets.

PROBATE (What happens if you do nothing):

When you die without having done anything to prepare for this event (i.e. no will, no trust) most* of your assets will need to be probated. What does that mean? A judge at the Probate Courts — located in Downtown LA for the entire LA county — will need to oversee the administrator (the person in charge of managing all your assets: usually your closest living relative) while your assets are transferred out of your name and into the names of your heirs.

But who are your heirs when you die without a will and without a trust?

Your assets will go as dictated in the California Probate Code. This is called “intestacy.” In this section of the California Probate Code, state legislators tried to guess how the average person would like to distribute their assets when they die. That is, if you have a spouse and a child, you would most likely want to divide your things between them 50-50. Or for example if you had no spouse or child, that you would want your things to go to your parents, assuming they outlived you. That’s all fine and dandy if you have an “average” family life or “average” preferences, but when you vary from the mold, the intestacy outcomes can be unwanted.

Say for example, that you are very close to your siblings but are estranged from one or both of your parents when you pass away without a spouse and without children of your own. The intestacy law would dictate that all your assets go to your parents, not your siblings, no matter the evidence of your relationships.

And that’s not even taking into account the cost. Transferring your assets through Probate Court will put a significant dent in your “estate” (your assets). The fees are imposed by law, and both the administrator as well as their attorney will each get a fee. The statutory fee is as follows:

(1)       4% on the first $100,000.

(2)       3% on the next $100,000.

(3)       2% on the next $800,000.

(4)       1% on the next $9,000,000.

(5)       0.5% on the next $15,000,000.

(6)       For all amounts above $25,000,000, a reasonable amount to be determined by the court.

(7)       Lastly, the court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable. Things like the sale of property would generate additional fees.

So for an example’s sake, let’s say you passed away with just a house worth $400,000 (don’t forget that your home’s fair market value at date of death will be included, not the purchase price, so for LA home owner, this $400,000 is really low). Your administrator will be paid $11,000 and the attorney for your administrator will also be paid $11,000—compensating both for their time and effort through this probate. Also, you don’t get to reduce the fees by any mortgage owed.

Did I mention the time? To open and close a probate—where there are no bumps in the road—takes a minimum of a year from the filing date (not date of death).

What about out of pocket costs for this hypothetical $400,000 probate? These costs exist in addition to the $22,000 in fees:

  • Filing fees totaling a minimum of $1,000
  • Publication costs ranging from $200-$800 (depending upon the residence address)
  • Probate Referee fees of $400
  • Certified copies of documents between $50-$100
  • Cost of a bond will be roughly $2,000

WILLS:

So now that you’ve made it to this section, and you think: “Good, writing a Will is a way better plan than doing nothing.” While there is some truth to that statement, it’s not as much as you’d expect.

In your Will, you – rather than the state legislature – would be able to decide who gets your assets (great Pro!). However, a Will doesn’t get you out of Probate, at all. The Will’s function is just to provide the Judge instructions on what to give to whom. The fees and duration of the Probate remain the same. You can however, name who you want to administer the estate and have them serve without bond, which will save some money.

TRUSTS:

Here comes the magnificent legal document called the Trust: this is your ticket out of probate.

With a Trust, you set it up during life and you decide who gets what – you even get a say as to when (i.e. not till reaching age of 30) or how (i.e. give outright or give in different types of trusts offering a variety of protections). Upon your passing, your family and friends will not have to go through the hassle of opening a probate to transfer title. Your successor trustee (who you identified in the trust) will go to an attorney, who specializes in this field, and will embark on a journey called “Trust Administration.” This generally consists of:

(1)       Giving notice to your beneficiaries that you have passed away and that the Successor Trustee is going to be in charge while your assets are transitioned to the beneficiaries.

(2)       Updating title to your real estate, bank accounts, cars, etc.

(3)       Preparing necessary tax forms and paying off creditors.

(4)       Distributing the assets, and if specified in the trust, opening up sub trusts.

For situations where there are no bumps in the road, this process takes between 4 to 6 months, and distribution can be made prior to the closing of the trust in most instances. Unlike in probate, the cost is not set by law: the attorney gets paid for his hourly rate (and quite a bit of this work can be done by paralegals working under the attorney’s supervision) and the successor Trustee is usually entitled to 1% of the assets for one year of work. This is significantly less than the probate fees.

Another bonus of going the Trust route, is that the Trust can protect you when you are incapacitated (whereas a will only kicks in after death). This means that if you are physically or mentally incapacitated, your successor trustee can step up and manage your assets and care for you.

When you do go this route there are a couple of negatives that you should be aware of:

  • When a Will is drafted and then signed and properly witnessed, you are done. When a trust is drafted, signed, and properly notarized, you are not done. You will need to change title to your real property so that it is in the name of the trust (which most Estate Planning attorneys include as part of their services), but you will also need to change title to your bank accounts (and that part you will have to do yourself), and any other assets that you want to have in the trust. The fact that the Trust mentions certain specific assets doesn’t mean that they are in the trust. You actively need to change the title to those assets. The good thing is that most Estate Plans include a Will just in case you had some assets that weren’t titled as trust assets (i.e. you missed changing title on a bank account). The Will in these cases is just a “Pour Over Will” which just directs the Judge to look to the Trust to determine where the assets would go.
  • When you have a Trust, there no probate and thus no court supervision. Most of this article has presumed that court supervision is inherently bad and all people want to get away from this. But, it’s important to know why you don’t generally want your assets to go through probate: (a) it’s expensive and (b) it’s slow. That’s it. But the good thing about going though probate is that there is an impartial person (a Judge) overseeing what the Administrator is doing, and so it’s really hard for the Administrator to wrongfully run off with your assets. The same cannot be said of your Successor Trustee, who can take advantage of his/her position of power and can dissipate the assets before the beneficiaries can realize what is happening. Nonetheless, this risk can be mitigated by carefully choosing your Successor Trustee. In some cases, the best choice may even be to find a professional fiduciary or (if funds suffice) a financial institution.

CONCLUSION – WHAT ESTATE PLAN IS BEST FOR YOU?

Hopefully this can be a good starting point to understand what basic options exist when we need to transfer assets. Here at Baker, Burton and Lundy, we believe in our clients making educated decisions about their estate plans. We won’t rattle off a bunch of legal concepts you can’t wrap your head around. Our job is to help you know what the options are and what the pros and cons of each path you might take. You are in the best position to know what would work best for you, it’s our job to facilitate that process with 40 years of experience in the field to know what works and what doesn’t.

 

*Assets such as your IRA, life insurance, bank accounts – so long as they specify beneficiaries that survived you—will automatically transfer without need of court supervision. Assets that don’t have a title (such as your epic CD collection) also don’t require going into probate because there is no change in title to supervise.

Please Note: This document DOES NOT constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Muhammad Ali & Me – Fighting for POWS

Muhammad Ali travels to Vietnam with Albro Lundy

Albro L. Lundy III, Muhammad Ali, Carol Hrdlicka, wife of MIA/POW USAF David Hrdlicka in Hanoi, Vietnam in 1994

Muhammad Ali and Me – Fighting for POWs in Vietnam

By Albro L. Lundy III

Larger than Life

I always thought that Ali was larger than life until I was sitting across from him on a chance limousine ride we shared to the Philadelphia airport. This was long before Parkinson’s disease quieted the voice of this great orator. And my conversation with him was nothing less than ethereal. At that point, he became simply a man with a great heart. I was a young attorney and suddenly working on the biggest case of my life – trying to discover the truth about what happened to my father, USAF Major Albro L. Lundy Jr., when his Skyraider plane was shot down December 24, 1970.

Looking for my Father

In my mind, I had lost my father when I was 10 years old while he was flying a search and rescue mission. I later found out it was a secret mission to save the lives of Laotian allies and CIA operatives. One day, one Saturday the day before Easter in 1991, I received a letter from a judge in Kentucky who said my father, who had been declared dead but his body had never been recovered, might still be alive and held prisoner as a Prisoner of War in Vietnam. I wept when I read this letter for I had done nothing to save my father those 20 years.

So I set off on a quest to bring my father home should he still be alive and held in captivity in the communist recesses of Laos or Vietnam. I didn’t meet many people who knew where Laos was much less how it was involved in the Vietnam War. I traveled all over America and even to Southeast Asia in my quest.

Meeting The Champ

On one of these journeys, on that chance ride I shared with the Champ, I shared with him the story of my lost father. The Champ asked me, “Do you believe he is still alive?” I answered, “The only spiritual, the only logical, and the only moral thing I can do is to believe he is alive until I can prove otherwise.” Ali looked at me, his dark eyes searching my soul and connecting with my heart. He said to me, pounding his right fist into his left palm repeatedly, “You and me, let’s bring him home. Let’s go get him.”

I had no experience with Muhammad Ali until this point and my doubting Thomas mind was amazed yet wondered if what Ali had declared, that we would find my father together, was nothing more than an empty promise. Ali was a man of his word. In the months that followed an expedition to communist Vietnam was arranged by Let Freedom Ring Inc., a nonprofit organization.

Muhammad Ali Travels to Vietnam to Save Instead of Fight

Ali and I, with a cadre of POW family members and advocates, took off to North Vietnam, a country that by refusing to fight, Ali had risked his freedom and had been stripped of his World Champion Belt. He would not to go Vietnam to fight then but now was willing to go there to save. I can recall like it was yesterday, Ali sitting next to me as we were landing on a dilapidated airstrip in North Vietnam saying, “I can’t believe I am here. I spent so much of my life fighting not to come. But now I am here to bring your dad home.” I had no response. The magnitude of his statement and the reality that I was living took my words away. I just reached over and grabbed his hand and said “Thank you.”

Meeting with the North Vietnamese

I thought that if anyone could bring my dad home if he was still alive it was Muhammad Ali. When we met with the Premier of North Vietnam and later the Politbureau, which really controlled the decision making of North Vietnam, Ali was brilliant in negotiations. I will always remember him describing to the Premier how the world was his home and each county was a room within it; and we as family living in that home should work together for peace.

Then, he brought up my father and asked – if he was held by the Vietnamese (who ruled Laos), would they release him? And I can remember so clearly, the Premier saying, “Champ, if this was between our peoples, we would have resolution. But this is between our governments. And out of my and your hands.” Later when we met with the Politbureau, they so much as admitted that they still held prisoners of war, but under their interpretation of the Geneva Convention did not consider them prisoners of war but air pirates and merely criminals deserving of Vietnamese punishment.

A Gracious Ambassador

It was tragically devastating when we realized that our hopes of Ali bringing a man, a POW, home were not going to happen. At that point, we then needed to be as cordial as we could to the North Vietnamese yet not allow them to use us as propaganda. This was not an easy task. In 1994, Ali was one of the most recognizable men in the world.

Crowds followed him wherever we went. He would always entertain the children who flocked around him with magic tricks and give them simple hugs of love. Ali was not interested in tourist attractions and government appointments. He came to bring the POWs home, and if he couldn’t do that, he had little patience for the rest of what the Vietnamese had planned for him. But he ultimately made a decision for equanimity. If he couldn’t bring the POWs home, he could at least be the ambassador for the US and the World. And he was.

We all mourn the loss of Muhammad Ali. I was blessed to understand and experience how great a man he really was, the Champ, the dancer in the ring, the humanitarian — truly greater than most people will ever know. He was the Greatest.

Albro Lundy III attorney

Albro L. Lundy III

News on Portability for Estate Planning

News on Portability for Estate Planning

Learn About New Legal Changes Regarding Portability and How to Maximize Basis Step-up

Recent estate law changes have created new opportunities for people with less than $10 million in assets to reduce future income taxes for their beneficiaries.
Brad N. Baker, senior estate planning attorney at Baker, Burton & Lundy, describes what basis is and how the new opportunities with Portability might affect you. After watching these videos, please call our office to schedule a meeting if you feel your estate can take advantage of considering these new legal developments.

Learn about Establishing Basis for Estate Taxes

Learn About the Changes in Portability Law

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To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

A Game Plan for Surviving Construction Defect Litigation

By Kirk Retz

Along with the rise in construction comes the rise in construction-related litigation. One particular area of growth in the past few years has been construction defect litigation. These days, if you are involved in construction, you can anticipate being served with a lawsuit at some point in your career. Being served with a lawsuit can cause a moment of panic and confusion, but it doesn’t have to. In our construction law practice, we have found that the answers to some frequently asked questions can provide a “game plan” in the unfortunate event that the process server comes knocking on your door. Below, we have set forth those questions and some general answers based upon our experience.

1) What do I do if I get sued?

There are three things you should do immediately if you are served with a lawsuit: 1) contact your lawyer; 2) contact your insurance company; and 3) find your job file. These three steps are critical to your protection.

Contact Your Lawyer

If you don’t have a lawyer, you should get one. You have a short window of time to answer a lawsuit once it is served. If you do not answer in time, the plaintiff can get a judgment against you even if you did nothing wrong. If you have a judgment against you, some states will suspend your contractor’s license until the judgment is paid off. You could end up having to pay for something you did not do and lose your ability to earn money to pay it off. A lawyer skilled in construction law can help you avoid this terrible result.

Contact Your Insurance Company

Many times, your insurance company will hire a lawyer for you (or pay for yours) and pay to settle the suit, if necessary. However, it does not have to do anything until it receives notification of the claim. A good way to do this is through your insurance broker, since he or she will have information such as the policy number, type, exclusions and effective policy period. Often as a subcontractor, you are also required to name the general contractor as an additional insured under your policy. If the person who sued you asks for this additional insured information, your broker should have that too.

An important point here is the distinction between informing your insurance broker about a claim and informing your insurance company. Many insurance brokers are not employed by insurance companies. This means that giving your broker notice of the claim may not provide the necessary notice to your insurance company. One way you can ensure that the company is notified is to ask the insurance broker to send you a copy of the letters sent on your behalf. This will give you peace of mind and a written record of when your insurance companies were first notified. Another way to make sure your insurance companies know about the suit is to send the letters yourself. You do not need to follow any special form. Just tell them you have been sued, explain that you are asking them to defend you, and include copies of the complaint.

Find Your Job File

This will be the best source of information about what happened on the job as it happened. You will be asked many questions about what you did, why you did it, and why you did not do something else. Most lawsuits are not filed until long after the job is completed. No one can remember all of the details of a job that was completed 100 jobs ago. The best source of this information will be contracts, blueprints, requests for information, inspection reports and other letters written when you were working on the job. You can be sure that your lawyer and your insurance carrier, as well as the lawyer on the other side, will ask for this information.

2) Which of my insurance carriers might provide me coverage?

The answer to this question depends on the laws of each state and the language of each policy. For example, in California, all insurance carriers who issued policies that are “on the risk” might be obligated to defend you. “On the risk” means those policies that were in effect at any time between the date you began work on the project and the present, subject to the statute of limitations. In California, contractors can be sued for latent defects (e.g., those hidden inside walls or underground) for 10 years after construction is completed. That time frame can be extended for an additional three years if the plaintiff files suit on time but the general contractor delays filing suit against the subcontractors. Under these circumstances, it is possible that 13 years of insurance policies may be “on the risk.” In Nevada, contractors can be sued as long as 12 years after the project is completed. You should contact your lawyer to find out how long the exposure lasts in your state.

Be advised though that the fact an insurance policy is “on the risk” does not mean the carrier will be obligated to defend you against a lawsuit. There are numerous types of insurance policies and countless types of exclusions within each of those policy types. Addressing these policy types and exclusions is beyond the scope of this article. The important part is for you to know that they exist.

If your insurance company denies your claim, you should contact your lawyer because sometimes insurance companies deny claims for improper reasons. In that case, a lawyer is needed to protect your interests. A lawyer skilled in construction law can fight for your rights and make sure that you receive the protection you paid for when you bought the policy.

Keep copies of your insurance policies for as long as you have potential exposure. Insurance companies sometimes lose records. If you keep a copy of your policy, you do not have to depend on the insurance company to find it for you.

3) If each of my insurance carriers requires a deductible, should I notify them all?

The short answer is “yes.” If you are sued, you should tell each of the insurance companies that issued you a policy at any time between the date you signed your construction contract and the present. Generally speaking, an insurance company has no responsibility to pay for a claim it does not know about. If you choose to notify only one insurance carrier, and for some reason that carrier fails to cover the claim, the other carriers have no responsibility until they are notified.

4) If I have 10 insurance companies providing a defense and each has a $5,000 deductible, does the first $50,000 come out of my pocket?

The answer depends on your state’s laws. In California, insurance companies are not allowed “stack” deductibles. A contractor can make an “Armstrong Election” (Armstrong World Industries, Inc. v. Aetna Casualty and Surety Company (1996) 45 Cal.App.4th 1).

With Armstrong, if there are multiple insurance policies that could cover a certain claim, the contractor can choose which one of those policies he or she wants to defend the suit. This means only one deductible must be paid. You should check with your own lawyer to find out if your state has a similar law.

5) Is there anything I can do during construction to help me defend myself against a future lawsuit?

Yes! Keep good records. Since most construction lawsuits happen long after the projects are completed, the papers that remain from the job speak the loudest about what happened. For example, in a recent matter, an underground electrical contractor (“UEC”) who installed utilities for a school district was sued. The school district and its architect claimed that UEC installed the utilities in the wrong location. The general contractor sued UEC asking for nearly $400,000. Fortunately, UEC had kept two sets of blueprints used for takeoffs that clearly showed the conduits were installed in the right location, as well as a memo from the architect confirming this fact. In light of those documents, the school district chose not to pursue UEC at all and sued the architect instead. Without the documents, the UEC would have had a much more difficult and expensive defense.

The most important information to keep is: 1) your contract and any change orders; 2) your insurance policy; 3) any requests for information; 4) any variation of blueprints drafted by the architect or anyone else; 5) copies of inspection cards; (6) any notes you wrote about the job as it was happening; and 7) if you hired subcontractors, any additional insured endorsement written in your favor. If you are named as an additional insured under anyone else’s insurance policy, the endorsement may provide you with more protection. This is a pretty short checklist, but it can make a world of difference if you are sued.

In addition to refreshing your memory, these records will provide evidence you can use in court. The contract and change orders define your scope of work. The requests for information and blueprints will show the specific changes to that scope. The inspection cards will show what the governmental inspectors requested. Your job notes will fill in any blanks. Many times, lawyers have tried to define a contractor’s scope of work based on the progress payments from the construction lender since they were the only remaining documents. These records are rarely accurate and generally do not reflect what happened on the job. Don’t let this happen to you.

Let’s face it, you know what happens on your job sites better than any lawyer ever will. After the job is finished, if you take a few minutes to organize your file, you may save yourself tremendous headaches years down the road. Following the “game plan” outlined above can help protect your company from the expenses of a lawsuit, or at the very least reduce them.

Should I Incorporate in Delaware, Nevada, or Another State?

Should I Incorporate in Delaware, Nevada, or Another State?

By Kent Burton

While certain state laws (especially Delaware) are generally more favorable to company organizers, especially where passive investors/shareholders are involved, oftentimes difficulties created with foreign incorporation outweigh the benefits. Some of the reasons for this are as follows:

  1. If you are operating a corporate (or LLC) business in California (and California defines “operating” very broadly), the corporation or LLC is required to qualify in California and to pay its annual $800 franchise fee, as well as state taxes. As such, incorporating in another state usually requires you to comply with two different sets of state compliance laws, to file tax returns for each state and to pay additional annual fees.
  2. For business matters arising in California, the California courts will generally apply California law, no matter where the corporation was formed.
  3. For most relatively small corporations, California corporate and LLC laws with regard to creditors “piercing the corporate veil” to hold individuals liable are generally not terribly different from those of other states.

As such, while incorporating in another state can offer advantages in certain specific situations, especially for those doing business in many states and/or with a large number of shareholders, for most small corporations owned by California residents and doing business in California, incorporating in a different state is not advisable. For an analysis of your specific situation or general corporate or LLC needs, please feel free to contact our corporate attorneys at 310-376-9893.

Please Note: This document DOES NOT constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Kent Burton
Kent Burton

Martinez: Burned But Not Beaten

Electrical Burn Injury lawsuit
Gloria and Ray Martinez

Burned But Not Beaten

Ray Martinez saw the lights flicker and heard a noise. Turning to investigate, he saw a bright ball of light moving towards him and felt a horrifying heat as he was engulfed in flames. On fire and screaming for his life, Ray was burning to death.

After winning his fight against death, Ray and Gloria Martinez came to Baker, Burton & Lundy to fight those whose negligence had almost killed Ray.

The Referral

Baker, Burton & Lundy prides itself in having clients for life, with many decades-long client relationships to our credit. We are honored that clients consider us their lawyers for life, and a significant number of our cases comes from clients referring us to their friends and relatives.

Former clients the Grijalvas had suffered a tragedy and been represented by Albro Lundy and Brad Baker in the 80s and 90s. Here was another tragedy: their close friend Ray had burns on 75% of his body, and over 35% of those were deep second and third degree burns. He was teetering between life and death when Jim Grijalva arrived at the hospital and began urging Ray to hang on. Gemma Grijalva called our firm, asking if we could help Ray in any way.

Pre-Trial Investigation

Without hesitation, BB&L moved as quickly as possible to prosecute the matter for Ray, launching an investigation into how the electrical explosion occurred and who was responsible for the injuries not only Ray and but also Gloria suffered. (Ray’s wife Gloria was entitled to money damages as a result of Ray’s tremendous physical and psychological injuries through something the law calls “loss of consortium”.)

Within days of being notified of the event, BB&L had an attorney and an investigator at the site of the explosion, preserving the evidence and developing theories of liability. Our team found that the demolition company had failed to properly protect against metal shavings falling into an electrical panel. Those metal shavings eventually caused a short circuit and a fireball explosion.

BB&L’s quick response and thorough investigation proved crucial to establishing liability against the demolition company found legally responsible. It also protected the Martinezes against the negligence of Ray’s own employer.

Ray’s New Life

Ray vividly recalls the approach of the massive fireball, when he began to burn and the sensation of his flesh searing as he screamed for help and tried to extinguish the flames.

While BB&L meticulously conducted its investigation, Ray and Gloria attempted to adjust to their new life. Ray could not do most of the activities that he used to do for enjoyment.  Ray loved to coach, especially baseball, and had remained a coach in the Little League in his area even when his sons had grown and moved away. Ray found a great sense of purpose in teaching the boys sportsmanship and character in addition to the love of the game. But after the accident, because of his body’s inability to cope with heat and sun, Ray had to leave this important pastime in the past.

“We were an incredibly active family,” Ray wistfully recalled, “When we were not working, we were playing. We were gone almost every weekend.”  Ray’s motto was work hard, play hard.  Now, he could neither work nor play. Ray and Gloria fought through the changes with admirable strength. Gloria stayed at her husband’s side, encouraging him to embrace his therapy and adapting to the role of a caretaker.

Results: $3.16 Million Awarded

Baker, Burton & Lundy prosecuted this case tenaciously, trying the case for over 30 days and taking the case up to the California Supreme Court twice. The jury spent over a week determining a verdict, awarding $3.16 million to the Martinez family for their damages suffered as a result of the explosion.

The BB&L litigation team is proud that it spared no time or expense in righting this wrong. The firm knew it wouldn’t receive a cent unless it won and following the jury verdict of $3.16 million and an appeal, over $600,000 had been spent in expert fees and investigation costs alone (not attorney’s fees). And rather than giving up following a loss in a mock trial, the team had used the experience to win the case in California Superior Court.

Baker, Burton & Lundy’s litigation team does whatever it takes to get the best possible results for clients. Though no amount of money can replace their loss, the Martinez family now has the ability to pay Ray’s many medical expenses and they can begin to move on with their lives.

Verdicts and Settlements

Click here to view a more complete list of our verdicts and settlements.

call Baker, Burton & Lundy

To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Road Design Case Results in Safer Roads for California

dangerous-T-intersection

Road Design Case Results in Safer Roads for California

Schmidt vs. California is an example of award-winning consumer attorneys at work not only for an individual but for all people. When Clete Schmidt got in a horrific accident at a rural T-intersection that left him a quadriplegic, Baker, Burton & Lundy made sure that California roadway managers Caltrans were brought to court for their negligent management of the dangerous intersection that caused Schmidt’s life-changing accident. For this work, Albro Lundy received the prestigious award of 2009 Trial Lawyer of the Year for California.

What Happened to Clete Schmidt

On the night of January 16, 2006 the case’s plaintiff, Clete Schmidt, a retired seventy-seven-year-old attorney, was on his way to Lake Havasu. Unable to see a stop sign in time, he crashed into a five-foot stony embankment just beyond a T-intersection. His Ford Crown Victoria was destroyed and Clete was close to death throughout his two month stay in intensive care. When he could finally leave the hospital, the impact had left him a ventilator-dependent quadriplegic with limited arm movement.

Taking the Case

In the early stages of investigation it appeared that there was no concrete evidence of liability against Caltrans. In fact, Albro Lundy III characterized the case as having a 5% chance of winning. But despite the great difficulty and expense the case would bring the company, the partners’ vote was unanimous to accept the challenge. It was simply the right thing to do.

The case began with an extensive discovery campaign by Albro Lundy III and his team. This included multiple trips to the Caltrans archives in San Bernardino and Sacramento and literally hundreds of hours spent at and around the scene of the accident by Albro and his associates to uncover witnesses and evidence regarding whether the roadway was unsafe.

Breakthrough and Mounting Evidence

During an interview with a longtime resident of Riverside County, the resident recalled that many years previously, the roadway had contained Botts dots which had been removed or destroyed, but had not been replaced. Botts dots are ceramic discs placed in the road to warn the driver through vibration of upcoming road changes, and Caltrans knew the Botts dots were an important warning system when approaching a stop sign in the desert. They had, in fact, replaced them at least once in the 1990s, but despite photos within their own files that showed the current state of deterioration, nothing had been done or planned for the near future.

Searching further, the team discovered that in addition to the missing Botts dots, a large double arrow “End of the Road” sign had been removed or lost and not replaced. An added danger was the man-made berm that cut into the road across from the stop sign, eliminating the room needed for recovery should a driver fail to slow down at a T-intersection. The truth was that this was a highly dangerous intersection that had been ignored for years: there had been 23 accidents in the 10 years prior to the Schmidt accident, with predominantly elderly drivers.

Presenting the Case

In an isolated Riverside County school house courtroom, BB&L’s litigation team developed, organized and presented a month-long case on the road’s dangers and its consequences for Clete Schmidt and his family. They produced a “Day in the Life” video showing the jury the catastrophic changes in Clete Schmidt’s life. They also presented courtroom graphics, computer simulations, and testimony from the life care planner, economic expert, medical fact witness, liability experts and ten lay witnesses.

The Verdict

The jury results came in with an astonishing outcome for Clete Schmidt and his wife Marlene: $11.6 million for Clete’s injuries and future medical bills, as well as one of the highest damage awards ever for loss of consortium. The verdict itself was remarkable both in terms of the liability apportionment and the damages awarded.

Help for All California Drivers

This case instigated many changes at Caltrans. Since the verdict, it began a review to make sure that the safety devices in similar T-intersections are installed and not missing across the state. The implementation of these safety devices at the intersection of Mr. Schmidt’s accident resulted in a drop to zero accidents in the following 15 months, illustrating immediate and lasting improvement in roadway safety. This intersection and all T-intersections throughout the State of California will be safer because of this verdict.

Baker, Burton & Lundy’s Success

In Schmidt vs. California, Baker, Burton & Lundy’s litigation team fought with the same tenacity they fight every case. They conducted several months of their own investigation and incurred the financial burden of putting on a case against a state agency with governmental immunities and vast resources.

Not only did the team win and make roadways safer for all California drivers, Albro Lundy received the coveted award of 2009 Trial Lawyer of the Year for California for his work on the Schmidt case.

For more information on this case, watch the video to the right.

Verdicts and Settlements

Click here to view a more complete list of our verdicts and settlements.

call Baker, Burton & Lundy

To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.

Winning Back Billions for California Consumers

Winning Back Billions for California Consumers

Baker, Burton & Lundy’s eight year fight and multi-billion dollar victories will provide decades of benefits for all California energy consumers and prevent energy companies from benefiting from their conspiracy.

September 1996: Setting the Stage

The start to one of America’s most devastating multi-billion dollar energy conspiracies began in a most unlikely place: a remote and seedy hotel room in the heat of Arizona. The meeting, attended by thirteen top executives from three major pipeline companies, occurred without attorneys or assistants present.  This secret meeting—with only the hotel room’s bed as witness—focused on how these companies could abuse their collective monopoly of the flow of natural gas into Southern California.

No one kept any notes from that meeting except one meticulous, some say compulsive, vice president.

1999: Finding the Evidence

In an unrelated case in Texas, boxes and boxes of worthless documents had been dumped by one of these energy companies in an attempt to bury their adversary in endless pre-trial review. Instead, they gave their opponents a document that became the key to one of the largest cases in California history.

Four sheets of paper among those thousands revealed the agenda, draft agenda, and notes of the secret meeting. These pages laid out their foundation of non-competition, which ultimately limited natural gas pipelines into California, creating the energy crisis of 2000-2001 that hurt so many families and businesses in California and Nevada.

2000-2006: Forming the Team

With this evidence in hand, Baker, Burton & Lundy partnered with Lance Astrella to spearhead the monumental task of getting justice for the wronged Californians. Recruiting and organizing a team of top attorneys and experts, they filed a lawsuit  September 2000 against El Paso, SoCalGas and SDG&E that would lead to billions of dollars of benefits for California businesses and consumers.

Baker, Burton & Lundy and the team began the grueling process of fighting off waves of jurisdictional motions and preparing the case for trial. It was not unusual for an attorney at Baker, Burton & Lundy to spend over 100 hours a week working to counter the efforts of the defendants and their hundreds of elite attorneys. Despite overwhelming odds and opposition, they did not quit.

In preparing for trial, millions of pages of documents were reviewed, categorized, analyzed, and incorporated into a database for future reference and easy recall. Dozens of depositions from around the nation were hotly contested day after day as the energy companies fought tooth and nail to avoid the company-threatening trial, which all involved understood would be “betting the company.”

In 2004 El Paso settled for $1.7 billion. The tougher fight continued with Sempra Energy.

In 2005, the team thwarted ten weeks of pretrial motions seeking to exclude any harmful evidence against the energy companies. After five months of living out of a suitcase in a hotel, it finally paid off as a settlement was reached in the middle of trial. This settlement not only returned ill-gotten gains to the consumers, but forced the utilities to reverse and restructure their natural gas delivery system and storage, giving everyone a level playing field for the first time in almost a decade.

2006-Present: Justice

Baker, Burton & Lundy understood that money alone would not solve the problems created in the natural gas delivery system. Today the consumers of California are reaping the benefits of the lowest natural gas prices in decades, in large part because of the restructuring forced upon the utilities by the lawsuit. The value of this restructuring was estimated by experts to be worth over $2.3 billion to the consumers of California.

To learn how Baker, Burton & Lundy can help you win a difficult case, Contact Us or go to Referring Attorneys/Joint Ventures

call Baker, Burton & Lundy

To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.