Tuesday, December 23, 2014

Call for Guest Posts

Instead of doing a "classic" post today, I wanted to take this opportunity to put out a call for anyone interested in doing a guest post on this blog.  I've just recently investigated the idea, and think it would provide some value to my readers to be able to put up a relevant guest post on occasion.  By "relevant" I would mean a post from someone with some level of expertise on topics I cover.  A non-exhaustive list of examples would be a tax accountant talking about the impact separation and divorce has on taxes, a financial planner talking about updating your financial plans following the property division that comes with a divorce, a realtor talking about picking out investment homes to potentially rent out in the future, a criminal defense attorney going into more detail about criminal law matters I've covered, and so on.

A guest post would have advantages for everyone involved.  It would give me the opportunity to provide my readers with a perspective I cannot provide them with otherwise, it would give my readers the chance to get some extra information about topics I cover, and it would give you a chance to expose your business to my readers - which at this point is a small but steadily growing number of people across Virginia.  Because I have discovered that people all over Virginia read this blog, I do not require a guest blogger to be located in the same part of Virginia as I am - in fact, I would be thrilled to have guest bloggers from other parts of the state.

The rules would be fairly simple.  E-mail me at SLeven@thebaldwinlawfirm.com to let me know you're interested, what your expertise is, what you plan to post about, and, if I don't already know you, give me some way to verify who you are and your qualifications.  If I approve, you will write the post (800-1200 words) and e-mail it to me.  I will review it to ensure that it complies with the Virginia Rules of Professional Conduct for me to post, and if it does, I will go ahead and add a header and footer indicating who wrote it, that any opinions expressed are your own, and providing a link to your website.  I will then run it all by you for a final time, and if you approve, I will post it.  If I find that changes are necessary, I will let you know what needs to be changed.

This is a standing offer, so I do not have a deadline by which you have to let me know you're interested.  Due to the holiday, however, I do not plan to post this upcoming Thursday, and probably will not next Thursday, either, so this post should be at the top of my blog for a little while.

Thursday, December 18, 2014

Virginia Commercial Landlord/Tenant Law - An Introduction

As always, before reading this post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

It's no secret that I talk about landlord/tenant law on this blog a lot.  Despite landlord/tenant work being only about 30% of my practice (Family Law is about 50%, and a combination of other practice areas make up the other 20%), most of the time where I am faced with a problem caused by someone acting outside the law, it's a landlord/tenant case.  For this reason, I have not only focused on landlord/tenant law, but specifically residential landlord/tenant law - the law covering landlord/tenant relationships where the tenant lives in the leased property.  But there is a whole other field of landlord/tenant law that I work in which is also important for many people, especially small business owners, to understand - commercial landlord/tenant law.

Commercial landlord/tenant law is the law covering landlord/tenant relationships where the tenant is primarily renting the property in order to run a business out of the property.  Most businesses, especially small businesses, do not own the building or store that they operate out of, rather most rent, and commercial landlord/tenant law governs their transactions.  Commercial landlord/tenant law is, in many ways, radically different than residential landlord/tenant law, so I cannot hope to cover it all in one blog post.  Instead, today I hope to give you a brief introduction to commercial landlord/tenant law.

VRLTA vs. Title 55, Chapter 13 vs. Something else?

I have talked over and over again about how important it is to know what law governs your lease - the Virginia Residential Landlord and Tenant Act ("VRLTA") or Title 55, Chapter 13 of the Code of Virginia.  Well, for commercial leases, the answer is "neither."  Virginia Code Section 55-248.5(A)(7) explicitly excludes commercial leases from coverage under the VRLTA.  Meanwhile, while there are parts of Title 55, Chapter 13 that impose some restrictions on commercial landlord/tenant relationships, pretty much all of the important ones (5 day pay or quit notices, 21/30 notice rights, rights against self-help, etc.) are explicitly limited to residential leases.

As a result, commercial leases are almost exclusively governed by common law principles and contract law.  With rare exception, what it says in a lease goes, especially since even those Code provisions that do cover commercial leases do not have non-waiver clauses.

"Default Rules"

So, let's talk for a minute about the default rules for the common law.  In this example, you have a commercial lease that just says "Landlord leases property to tenant for tenant's business at a rate of $x per month for 12 months."  I've never seen a commercial lease like that, but it's a good starting point, because if you have a lease like that, the "default rules" apply.  The default rules are what the common law says should happen, but can be changed by provisions of the lease itself.  Here are what I consider the most important "default rules" in commercial leases:
  • If the tenant breaches the lease in any way (non-payment of rent or otherwise), the landlord has the right to immediately terminate the lease without advanced notice or giving the tenant an opportunity to fix the breach.
  • A landlord may self-help - he may come in, change the locks, remove all of the tenant's property, and retake possession of the property, all without going to court.
  • If the landlord breaches the lease, the tenant may file a suit for rescission to have the lease terminated.  There is no such thing as a Tenant's Assertion for commercial leases.
  • The tenant may not self-help by refusing to pay rent.  The tenant may self-help by fixing the problem himself and then demanding reimbursement from the landlord.
  • If the landlord sues for non-payment of rent, the tenant may raise as a defense "constructive eviction," meaning flaws with the property were so serious the tenant could not continue to use the property.  Constructive eviction can negate any unpaid rent due, but it does not give the tenant a right to return to the property.
  • If the landlord sues for non-payment of rent, the tenant may raise as a defense "recoupment," meaning the flaws with the property were so serious that they diminished the value of the property to the tenant and so the tenant should not have had to pay rent in full.  Recoupment can negate some or all unpaid rent, but it does not give the tenant a right to return to the property.
  • Even though a landlord has the right to self-help, the landlord may still file an Unlawful Detainer in the General District Court and get a court order for possession enforced by the sheriff.  Doing this protects the landlord from potential liability for an unlawful eviction (if it later turns out the tenant was not in breach and the landlord self-helped, the landlord can get in a whole heap of trouble), and also protects the landlord from potential liability for any damage done to the tenant's personal property in the course of the eviction.
  • Unlawful detainers for commercial leases are exempt from the General District Court's jurisdictional maximum of $25,000 (so, an unlawful detainer in a residential lease where more than $25,000 is owed must be filed with the Circuit Court, but a commercial lease can be filed in the General District Court no matter how much is due).
Now, you will notice that a lot of that is dramatically different from residential landlord/tenant law.  Notices are mandatory in residential law, self-help of all forms, both by landlords and tenants, is banned, and "constructive eviction" and "recoupment," while technically still available, have both been overcome by the availability of much more effective offensive - rather than defensive - tools (21/30 notices, tenant's assertions, etc.).  Similarly, rescission would also still be available but is rendered completely moot in residential law by the availability of 21/30 notices.

Typical Changes

Because the common law is so weak (I mean this in the sense that it can almost entirely be waived by contract), most commercial leases are actually very long, as businesses typically have their own way they want leases to be governed.  Moreover, the power balance between landlords and tenants is much less tilted towards landlords in commercial law than residential law, so tenants are much more likely to actively negotiate their leases.

The result of this is that many of the above common law defaults do not actually apply to commercial leases.  Most leases I have dealt with, for example, have notice provisions.  This actually makes sense even from a landlord's perspective, because an eviction is typically much more expensive than just having your tenant correct the problem.  Additionally, while few outright ban self-help, many provide incentives for not using self-help (for example, attorney's fees only being available if you go to court instead of self-helping).

The end result is that if you are analyzing a commercial landlord/tenant situation, you need to not only understand the law, but also deeply understand the lease.  In residential leases, you can ignore whole provisions since you know the law governs and cannot be waived in some instances.  You do not get that luxury with commercial leases.

Conclusion

As you can see from the above, commercial leases are really a whole separate area of landlord/tenant law than residential leases.  Very few statutes apply to them, almost everything is waivable, and there are complex common law rules that date back centuries that apply.  If you are considering drafting or signing a commercial lease, or are involved in a commercial landlord/tenant dispute and would like legal assistance, please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up a consultation.  Our initial consultations are free for up to half an hour!

Tuesday, December 16, 2014

Classic Law is Your Friend: Virginia Tenant's Assertion

First of all, I realized today that I forgot to post last week.  I must send my sincerest apologies.  Last week, I had to spend all day Tuesday in a class in Washington, DC (I've just been admitted to the Bar there and am trying to get up to speed so that I can take cases there in the near future), then I was in court most of the day Thursday and Friday, so again, I am sorry about the oversight.

Today's classic blog post discusses tenant's assertions - one of the options available to tenants with abusive landlords who violate their lease and the law.  It was originally posted on November 13, 2013 and was titled "Avoiding Tenant 'Self-Help' Part 1 - Tenant's Assertions."

Where I felt it necessary, I have added a few lines here and there.  Additions that were not in the original blog post will be in brackets ([]).

As always, before reading my post, please review my disclaimer by clicking on the link above, or by following this link.  As always, any principles discussed apply only to the Commonwealth of Virginia.

Introduction

Most of my regular readers will remember my post from several months ago talking about how it is improper when in a landlord/tenant dispute to engage in self-help.  Self-help, again, is what happens when, without a signed agreement with the other party, and without court approval, you take action altering the terms of your lease (a non-exhaustive list of examples as a tenant is withholding rent or fixing damage yourself, while for landlords can be changing the locks, cutting off power, etc.).  If you engage in self-help, even if you are legally in the right, the consequences can be very severe - heavy imposition of damages, injunctions, attorneys' fee awards, etc.  [Not to mention eviction if you are a tenant.]  As a result, it is important you avoid self-help.

Since posting my "don't do self-help" post in July [of 2013], however, I've gotten numerous questions about what the alternatives are.  Since the alternative is generally clear for landlords (legal eviction proceedings), nearly all the questions I get, and nearly all the examples of improper self-help I see, involve tenants.  While I do present these alternatives in my July post about self-help, my presentation is short, and probably not very helpful.  As a result, starting this week, I've decided to start a multi-part series discussing each of the options available to a tenant whose landlord is in active violation of the lease.  Today's post will discuss a legal proceeding known as a "Tenant's Assertion."

VRLTA vs. Common Law/Chapter 13 Lease

Regular readers will again remember that it makes a substantial difference in many areas of landlord/tenant law whether your lease is covered by the Virginia Residential Landlord and Tenant Act, or if it is a Common Law/Chapter 13 lease.  While it is still true in this area of landlord/tenant law, this is not nearly to the extent that it used to be.  Prior to 2011, the only remedy a non-VRLTA tenant had to a breach of the lease by the landlord was an after-the-fact lawsuit for damages.  The law changed in 2011, however, and now, while not identical, the rights of tenants regarding a tenant's assertion are largely similar.  In fact, the only difference that seems relevant to me is that a non-VRLTA lease could theoretically waive the tenant's right to pursue an assertion (I say only theoretically because I am aware of no court case to this point directly dealing with that issue) while such a provision would be barred in a VRLTA lease by Va. Code Section 55-248.9(A)(1).

What Is A Tenant's Assertion?

So, before getting started, you might be wondering what a tenant's assertion actually is.  This is an action where the tenant "asserts" that the landlord is in active violation of the lease or the law, and that a remedy is necessary in order for the tenant to properly enjoy his rights to possession of the property.  A tenant's assertion is primarily for people who either want a problem fixed without having to move out of the property, or want their lease actively terminated by the court, instead of engaging in the notice termination (which I will discuss in part 2) and then potentially being sued by the landlord.  The major disadvantage is that a tenant's assertion, under either VRLTA or common law leases, usually cannot win attorneys' fees, while other actions sometimes can.  I generally recommend a tenant's assertion to tenant clients who like their home except for the issue causing their complaint, cannot find a new place to rent, or just cannot stand the thought of the uncertainty that comes with a notice termination.

Pre-Conditions to a Tenant's Assertion

The law for tenant's assertions is laid out for non-VRLTA tenants in Va. Code Section 55-225.12 and for VRLTA tenants in Va. Code Section 55-248.27.  You will notice the two sections are very similar but have some differences.  Both sections include the following required pre-conditions to a tenant's assertion:
  • A condition must exist on the property that allows an assertion to be approved.  This condition must be a "material" violation of the lease or of the law, a fire hazard or serious threat to the life, health or safety of occupants, a lack of heat or hot or cold running water, a lack of light, electricity or adequate sewage disposal facilities, an infestation of rodents, or the existence of paint containing lead pigment on surfaces within the dwelling
  • The landlord must have been "served" with a written notice from the tenant or a state agency of the condition and failed, within a reasonable amount of time after that service, to fix the condition (note that more than 30 days is presumed unreasonable)
  • The condition must remain up to the day of the trial
Additionally, the VRLTA has these provisions (which the common law assertion does not):
  • The "condition" on the property cannot be a rodent infestation if the property is a single-family dwelling (namely a detached home or townhouse).
  • Va. Code Section 55-248.4 allows notices to be served simply by first-class mail as long as you also simultaneously swear out a certificate that you've sent the mail.  The non-VRLTA tenant needs to serve notice either by formal service, or by certified mail (unless he can show proof that the landlord actually received the notice).
If those pre-conditions are met, however, you can go ahead and file your tenant's assertion (note that if you file the assertion before giving the landlord a reasonable time to remedy under the assumption that any trial will occur after such amount of time has elapsed, you are in violation of the statute and could be sanctioned by the court).

While Assertion is Pending

While your tenant's assertion is pending, you must continue to pay your rent in full.  Instead of paying it to your landlord, however, you must pay it to the court.  If you don't pay your full amount of rent to the court within 5 days of its due date your assertion will be dismissed, the money you've paid to the court will be released to the landlord, and you start over again.  If you do, however, your money is held in escrow.  This is the true advantage of a tenant's assertion over an after-the-fact lawsuit.  If you win damages, your escrow gives you a source from which you can collect immediately, instead of having to engage in post-judgment collections.

Trial

Somewhere around 5 weeks after filing your assertion, assuming it is contested, you will have a trial.  It's important to note that both the VRLTA and non-VRLTA assertion statutes allow as a complete defense a landlord to say "the condition's been fixed."  This means, if the landlord fixes the problem while the assertion is pending, your assertion will lose, even if it was proper at the start!  The remedy to this is to try to convince the judge to let you amend your case to a warrant in debt for damages, then still seek any monetary damages you may have suffered (you may even be able to still pull that money out of escrow).

If, however, the condition does remain as of the date of trial, you must prove the following things in order to win your assertion:
  • That the condition is, in fact, of the type listed in the statute (material noncompliance with lease or law, hazard to health and safety, etc.),
  • That the condition still exists,
  • That notice was properly given to the landlord, or that the landlord had actually received notice even if not properly given,
  • That the landlord was given a reasonable amount of time to remedy the problem before the assertion was filed, and
  • That you have paid all rent, in full, into the court while the assertion has been pending.
If you successfully show all of those things, you will win, and the judge will grant you one, some, or all of a myriad of possible remedies, which include, but are not limited to:
  • Terminating the lease,
  • Dividing some or all of the money in the escrow account between the tenant and/or landlord as the court sees fit,
  • Ordering the escrowing of rent continue until the repairs are complete,
  • Abating rent prospectively and/or retroactively,
  • Ordering money in escrow be paid directly to a contractor in order to repair the property,
  • Referring the matter to a state or municipal agency for investigation, and
  • Ordering escrow funds be used to pay a mortgage in order to prevent foreclosure.
After Trial

It is very rare for a trial to end a tenant's assertion unless the landlord prevails.  Instead, some form of continuing of the escrow account usually occurs.  If this is the case, no escrow money can be distributed without a hearing, so there may be occasional hearings going forward to decide what to do with escrow money, or if a party is not following the terms of the order.  Perhaps the most serious issue, however, is that if the condition is not remedied within six months of the date the escrow account was established, the court is then required to return to the tenant all money then in the escrow account (unless the landlord can prove he has made a reasonable effort to finish the repairs).  When that happens, though, the escrow is not terminated, but a new six month period begins.

The assertion really does not end until the condition is repaired and/or the lease has ended, and all money in escrow has been distributed.

Conclusion

When a landlord is in violation of his lease obligations, a tenant's assertion is a very robust and flexible means for a tenant to assert his or her rights without risking a lawsuit from the landlord, and without necessarily having to terminate the tenancy.  If you are in a landlord/tenant dispute that already involves, or may require, a tenant's assertion, please feel free to call (703)281-0134 or e-mail me at sleven@thebaldwinlawfirm.com to discuss representation.  Our initial consultations are free for up to half an hour!

Thursday, December 4, 2014

What Happened in Ferguson and New York

Introduction

As sometimes happens on this blog, at times I feel it necessary to step out of my usual format of getting into the nitty-gritty of areas of law I practice, and talk about current events.  These posts will cover practice areas I do not practice, and do not intend to provide any practical considerations for someone going through the process - just to offer an explanation of what's happening.  These posts tend to also be imbued with my own opinions.

It's very hard right now for me to think of doing a post on something other than the events in Ferguson and New York.  Two grand juries have refused to indict two white police officers who killed two black men in the line of duty.  Since then, I have been inundated with questions from friends about what it all means and what I think.  In today's blog post, I'll cover a little bit about what happened, why I believe the grand jury got it wrong in both cases, my best guesses on why the grand juries didn't indict, and some thoughts on where the cases go from here.

So, what happened?

In Ferguson, Missouri back in August, a young black man named Michael Brown was jaywalking on a local street.  A police officer asked him to stop jaywalking, and that's about where the generally accepted version of events ends.  It picks up again with Michael Brown lying dead on the street, having been shot by the officer.  The officer claims Mr. Brown attacked him, even reaching for his gun in the police car, began to flee, then turned around and charged at the officer.  Several witnesses back up this claim.  Other witnesses, however, say that Brown was attempting to surrender, but having already had an altercation, the officer shot him dead.

In New York, back in July, Eric Garner, a middle-aged black man, was suspected by several police officers of selling loose cigarettes.  This is illegal because cigarette sales are tightly regulated and taxed, and privately selling individual cigarettes out of the pack is a form of tax evasion.  Nonetheless, it is a relatively minor crime.  Garner denied selling cigarettes, and when the officers moved to arrest him, he swatted their arms away.  Treating this as resistance, the officers attempted to force him to arrest, with one officer placing Garner in a chokehold.  Garner, who suffered from asthma, started saying over and over again (nine times in total) that he couldn't breathe, but the officer kept him in the chokehold until the other officers had him in handcuffs.  As a result, Garner went into cardiac arrest and died.  The facts are much less in dispute in Garner's case, since this was all caught on video.

In both cases, the police resisted conducting a criminal investigation at first, but public pressure finally forced them to.  In both cases, a grand jury was convened to decide whether to bring charges against the officers involved.  In both cases, the grand jury ultimately decided not to charge.

What is a "grand jury" anyways?

A grand jury (as opposed to a "petite jury," which is the technical name for a jury during a trial) is a group of citizens brought together to consider bringing criminal charges.  In many states a felony charge can only brought by a grand jury.  Grand juries are usually larger than petite juries, and usually hear more than one case when they are composed - however, if a case is especially complicated, they may hear only that one.

The only right a potential defendant has at a grand jury is to give the grand jury a statement.  Otherwise, only the prosecutor can present evidence, and the prosecutor chooses what evidence to present.  The prosecutor is not required to show a grand jury any evidence that might point to innocence.  Further, the grand jury's burden of proof is "probable cause," usually defined as saying there is enough evidence to say that a reasonable person would believe a crime has been committed.  This is a very low standard of proof.  Much lower than the "beyond a reasonable doubt" of a criminal trial, even below the "preponderance of evidence" of a civil trial.  If you were to express burdens of proof as "percent certainty" that something happened, I've usually heard it said that "beyond a reasonable doubt" is 95%, "clear and convincing evidence" is 75%, "preponderance of the evidence" is 50.1% and "probable cause" is 25%.

So, as you can imagine, the deck is usually stacked against defendants in a grand jury.  Only the prosecutor presents evidence, he can choose what evidence to present, and the jurors basically need to think there's only about a 25% chance that a crime was committed to indict.

Why I think the grand juries got it wrong

I've looked at the documents and evidence presented to the grand jury in Ferguson.  That information still hasn't been released in New York, but we do have a pretty clear picture of events from the video.  I am convinced the grand juries made the wrong decision in both cases.

In Ferguson, there was conflicting testimony as to what occurred.  That being said, conflicting testimony shouldn't matter at the grand jury stage - judging which witnesses are more credible is for a petite jury at trial, not a grand jury.  Instead, the grand jury needs only look at the evidence to see if there is enough there to say there's a probable cause of criminal action.  We had witnesses who stated that Mr. Brown was surrendering (suggesting, at a minimum, negligent homicide), and combined with a clean toxicology report and the fact that Mr. Brown suffered multiple gunshot wounds, that should have been more than enough to say there was probable cause for an indictment.  It's entirely possible, I'd even say probable, that a trial would have resulted in a not guilty verdict given the high burden of proof there, but again, the grand jury's job is only to determine probable cause, and there was plenty of it here.

The New York decision is even more baffling, considering it was caught on tape and minimal facts are in dispute.  I do not doubt the officer's account that he did not mean to harm Mr. Garner, but intent only matters for murder charges, not manslaughter or other charges that could be brought.  Mr. Garner is clearly audible that he can't breathe, and chokeholds have actually been banned within the NYPD since the 1990's.  Again, those facts alone, especially coupled with the medical examiner's finding that the cause of death was homicide, amount to fairly clear probable cause.

So what went wrong?

Well, as you can imagine, the vast, overwhelming number of cases that go to grand juries return indictments.  I've once heard the number 99% thrown around, but I don't have evidence to back that up.  However, in several studies, grand juries have been found to almost never return indictments against police officers who kill in the line of duty.  Interestingly, this seems to be little affected by race, of the officer or the victim - the grand juries actually seem more blinded by police blue than any other color.  The racial aspect seems to exist more in the fact that police officers are substantially more likely to kill black men than anyone else in the first place, rather than in how the grand jury handles it.

So, why is the indictment rate so low for police officers?  Well, frankly, people respect police officers, are inclined to believe them, and prosecutors who work with the local police every day of the week are very disinterested in prosecuting them.  This is why special prosecutors are usually needed, but almost never actually brought in.

Consider Ferguson for a moment.  Remember what I said about there being conflicting testimony?  Why did the grand jury even hear about it?  Again, prosecutors control what the grand juries hear, the only right an accused has is to present his own statement.  In Ferguson, however, the prosecutor presented the grand jury with the entire case, including statements from witnesses who agreed with the police officer's account.  While the grand jury, as I explained above, should have dismissed those witnesses anyways, the prosecutor should never have presented him - I would even say that it seems like dereliction of duty that he did.  It is hard to read anything into that choice other than that the prosecutor was intentionally trying to make the grand jury uncomfortable with the idea of indicting the officer.

Prosecutors who tank cases and citizens who trust the police make a dangerous combination for a grand jury.  If you want my opinion of why grand juries tend not to indict police officers - that combination is it.

What happens next?

So, what's next in these cases?  Well, what many people don't realize is that the decision not to indict is not like an acquittal.  Because the accused never had a chance of actually being sentenced to jail time from a grand jury hearing, "jeopardy" never "attached."  I could write entire blog posts about what that means, but the short answer is that there is no double jeopardy implication.  If a prosecutor wanted to, or a governor wanted to appoint a special prosecutor, a new grand jury could be convened.  Further, both officers are being investigated for committing possible civil rights violations.  That's important because civil rights violations are federal crimes, and federal prosecutors don't have relationships with local police like state prosecutors do.  As I recall, in fact, most of the time when police officers have actually been convicted for killing on the job, it's been in federal court (for example, many people don't remember that after the four officers accused of beating Rodney King were acquitted, touching off the Los Angeles Riots, three of them were indicted in federal court, with two of them ultimately being convicted and sent to jail).

In addition to possible federal charges or even a new state grand jury, the families of both Brown and Wilson have the right to file civil lawsuits against the officers and police forces for "wrongful death."  Such civil cases have had some success in the past, and I would not be surprised if either family went forward with such an approach.

Conclusion

The events in Ferguson and New York can be very confusing to people who don't know the law.  Some don't understand what a grand jury is, others don't understand how people could say the grand jury got it wrong.  In this post, I hope I've at least touched on an explanation for those of you who may be confused.

Thursday, November 20, 2014

Two Week Hiatus

Hi all.  With a trial coming up tomorrow and Thanksgiving coming up next week, looks like I'm going to have to step back from the blog for a couple weeks.  Look for new content to come on or around December 4th, and have a wonderful Thanksgiving!

Thursday, November 13, 2014

True Virginia Law: Some Common Myths About the Law

As always, before reading my post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

After I refused to watch for a great deal of time, last week my wife finally convinced me to watch an episode of ABC's How to Get Away with Murder.  Honestly, I was horrified.  The story was certainly captivating, and for artistic purposes, I don't fault it for that, but its portrayal of both law school and legal practice is not only completely unrealistic, it actually perpetuates some negative stereotypes about lawyers and the practice of law that I find appalling.  In fact, in the one episode that I watched, completely ignoring the backstory of the murder of the professor's husband and just focusing on the cases dealt with in the episode, the professor and a US Attorney both engaged in conduct that in real life would get them disbarred, and one of the students also engaged in conduct that in real life would disqualify him from being barred.

To that end, it got me thinking about the many myths about the practice of law that exist out there, and how many of them are harmful to the legal profession.  In today's blog post, I will address some of the pervasive myths about the legal profession I face - some of them will be directly inspired by this episode of How to Get Away with Murder, some will not - and the truth that these myths overlook.

Myth:  Lawyers can lie to a witness while testifying to get them to admit to something damning.
Reality:  Lawyers are strictly forbidden from lying, in any capacity, in their work.  Lying during a trial or other official proceeding is a quick way to get disbarred.

In the episode of How to Get Away with Murder that I watched, Annalise (the professor/lawyer) represents a woman accused of insider trading.  Annalise arranges for a deposition of two employees of the woman and works with the US Attorney (prosecutor) to get them to confess.  First, Annalise presents a stack of papers she claims is the transcript of the other employee implicating the witness and then the US Attorney offers to give the witness a deal if he or she confesses.  Both witnesses confess and are arrested, Annalise reveals the stack of papers were just notes, and the US Attorney admits he has no deal to offer.

I'm going to ignore the fact that there was a deposition - depositions are pretty much exclusively used in civil cases, not criminal cases - and focus on Annalise's and the US Attorney's conduct in the deposition.  As stated above, attorneys cannot lieMy post on legal ethics gets into this in more detail.  There's a reason that police officers conduct interrogations, rather than prosecutors - police officers can lie, prosecutors can't.

As a result, Annalise would be facing disbarment in the real world for her stack of papers lie and the US Attorney would be facing disbarment for his lie about offering a deal.

The takeaway is, when you are dealing with a lawyer who is acting as a lawyer, she cannot lie to you.  If she does, you should report it to the Bar immediately.

Myth:  Lawyers are generally greedy people who are only interested in you for your money.
Reality:  Lawyers have many motivations in what they do, and while some are, in fact, greedy, just like in any other profession, most lawyers are in the profession because they find it interesting and rewarding on an emotional level.  Like all professionals, however, lawyers do expect to get paid for their work.

This particular myth is one that bothers me.  Once upon a time I had a client's father accuse me of being only interested in representing his daughter so I could milk as much money out of her as possible while she suffers in her conflict with her estranged husband.  What he didn't know, and I couldn't tell him at the time, was that his daughter hadn't paid me in months, had no prospect of ever paying me for the work I was doing, and yet, there I still was, fighting for her every day.

We are professionals, like doctors, accountants and carpenters.  We do expect to be paid for the services we provide - you sign a contract with us agreeing to do that before you hire us.  That doesn't make us greedy.  This is our job, just like you have yours, and this is how we make our living and feed our families.  I have very low tolerance for people who assume lawyers are greedy because we, heaven forbid, ask them to pay us for the work we do for them.  These same people don't bat an eye at paying their doctor, their accountant, their home contractor, etc., yet they expect us to somehow work for free.

If you believe your lawyer is really only in it for the money, then you've either done a bad job choosing your lawyer, or, more likely, you need to figure out why you're so offended that they want you to pay them to begin with.

Myth:  We have way too much litigation today.  We need tort reform to bring about some sanity.
Reality:  Litigation rates in the United States peaked in the 1970's and have been dropping steadily since.  Tort reform, in states that have enacted it, has led to substantial abuses of power by the powerful at the expense of the weak, and does practically nothing to prevent the filing of frivolous lawsuits.

My answer in the "reality" really covers this a great deal.  The fact is, while sensational stories abound, litigation rates are dropping in the US, and have been for about forty years.  While this is only my opinion, tort reform does practically nothing to reduce frivolous lawsuits.  It doesn't help individuals who are sued, since the limits still tend to be high enough to still put individuals into bankruptcy, but it does protect mega-corporations, to whom the limits are laughable amounts of money that cause them to give no pause or concern about the potential costs of their actions.

All of this ignores the fact that many of the "frivolous" lawsuits we hear stories about aren't even frivolous.  Let me give you an example.

Let's say a company made a commonly used product that is moderately dangerous.  Everyone knew the danger level of this product, though, so they generally took precautions, and understood that if they didn't, they might get a little hurt.

Now, let's say that the company determined that it could make more money by making this product even more dangerous - and not advertising that they've done so - under the assumption that by the time someone actually uses the product after purchasing it, the product will be back to its normal danger level.  Now, let's add on that dozens of experts have written to the company warning it about just how dangerous their product has now become, but the company ignores those warnings and continues to make their product that much more dangerous without warning consumers.

Finally, a woman purchases the product and injures herself with it.  Her injuries are not what you would normally expect from this product under its normal danger level - in fact, she has to go to the hospital, have major surgery, and will be in pain the rest of her life.  In court, it is conclusively proven that the extent of her injuries was caused by the increase in dangerousness of the product.  Wouldn't you agree that this woman, who had no warning of how much more dangerous the product was, who had major surgery and will be in pain the rest of her life, deserves some very substantial compensation?

Well, I've just described to you the infamous "McDonald's Coffee" case.  McDonald's knowingly made their coffee 20 degrees hotter than normal, and was repeatedly warned by experts that this was dangerous - yet they ignored the warnings.  The woman that ultimately sued had third degree burns on six percent of her body, required extensive skin grafting, is permanently disfigured and in pain, and was disabled for two years following the accident.  This was not a typical "coffee burn," yet so many people hear only the top line of the story and say "duh, coffee's hot, lawsuits are out of control."  As an added fun fact, in this case, even though the jury awarded the woman $2.9 million (which is what got all the press), McDonald's ended up paying less than $600,000.

The fact is, when you investigate other frivolous lawsuit stories, you find similar flaws.  This, the fact that tort reform does far more harm to the poor and powerless than the rich and powerful, not "greed," is why lawyers overwhelmingly oppose it.

Myth:  It's a court's job to deliver justice and when a court makes an unjust ruling, the court itself is unjust.
Reality:  It's a court's job to apply the law to a given situation presented to the court and when a court makes an unjust ruling, frequently it is because the law is unjust.

I can't count the number of times I've heard a judge say "well, I understand your point, but that's something to raise with Richmond [where our General Assembly sits], not with the court."  The reality is, if an unjust result is dictated by the law, unless you can find an actual constitutional principle that is violated, the court is powerless to do anything but make an unjust ruling.  In fact, ignoring the law and making the just ruling would be good grounds for the judge's removal from the bench.

When a court rules against someone I always tell them to listen carefully to why the court is doing so.  Most judges will give some explanation of their ruling.  Nine times out of ten, where a result is unfair, it's still the result mandated by the law.  In January, I wrote a blog post about a case I was handling where the other side was unrepresented, and didn't get most of her evidence even considered by the court because it was inadmissible.  Now, I believe in that case I was representing the right side regardless, but the fact is it was not an injustice by the court that her evidence was not considered - its inadmissibility was clearly required by the law and the Rules of Evidence.  What I remember most, however, was the exasperated exchange she finally had with the judge.  When the judge asked her what theory of the case she was possibly proceeding on, she responded, "I'm seeking justice, this is a court of justice!"

The judge responded, "I'm sorry, ma'am, but this is a court of law.  It is only a court of justice when that justice is authorized by the law."

That judge was exactly right.  We do not have "courts of justice" in this country, we have "courts of law," and when the law requires injustice, injustice is what you will get in court.

Myth:  The courts are biased against men/women, minorities, the poor, etc.
Reality:  In my experience, I have seen almost no evidence indicating that the courts are biased against anyone.  Some individual judges, maybe, but the courts or legal system as a whole?  Almost definitely not.  That being said, I do think there is, oddly enough, a flaw in our system that produces extra difficulties for litigants and defendants who are lower middle class.

I hear this myth all the time.  Most of the time it's from people who have had their own bad experiences in court, and really I am left with little else to do than smile and nod.  I know there are judges here and there who have clear biases - they definitely exist - but imputing those judges on the whole system is ridiculous.  Nonetheless, psychologically, I've discovered that not only is it easier for someone to believe that his or her loss in court was someone else's fault due to bias, but it's also easier to believe that they are not alone.  As a result, while it's much easier for that person to believe that "the system" is stacked, rather than that they deserved to lose, it's also easier to believe that "the system" is stacked rather than just that that person's particular judge was biased.

Nonetheless, my own experience tells me otherwise regarding "the system."  I see many more cases than the individuals who come through the court, and with only one exception I can think of, I have never seen a judge I believed was biased, and I have seen no sign that "the system" is stacked.  Certainly judges make rulings I disagree with all the time, but even then I have never seen anything to lead me to believe it is due to systemic bias.

Now, as I said above, there is one flaw with our legal system that I do wish would be fixed and that I think tends to harm the lower middle class (the "working class").  This has to do with lawyers, and the inherent disadvantage you are at in court if you do not have a lawyer.

In criminal law, as you probably already know, poor defendants are entitled to have a lawyer appointed for them, but how do you determine who gets to have an appointed lawyer?  Well, they fill out a questionnaire about their income and assets, and if they fit below certain thresholds, they are considered poor and get a lawyer appointed.  What about the people right at the threshold?  The people who have little money, but just enough to not get a court-appointed attorney?  Well, they're out of luck - they have to hire their own attorney, and pay just as much as the rich defendant has to pay.

The same is true to some extent in civil cases.  While poor people do not get court appointed attorneys in civil cases, they can often get free attorneys from their local legal aid or a law firm doing pro bono hours.  Again, there are income qualifications, and those on the cusp are left out to dry.

What often ends up happening in those situations is that the client doesn't hire an attorney at all - and then gets harmed badly in the legal proceedings.  This is a problem, and one that begs a more creative solution.

Some areas have experimented with what I'd call "partial appointment," and this is something I'd love to see expanded.  The idea is that after your income and assets hit a certain level in a criminal case, you could still get a court-appointed attorney, but you would be responsible for paying a portion of that attorney's fees, with that portion being determined by how far above the threshold for a free attorney you are.  That way, you can hire an attorney you can actually afford.

Some legal aid agencies also do this.  The legal aid agency still provides the attorney, but you pay the agency part of the cost of that attorney.  I don't know if any agencies in Northern Virginia do it, but I have heard of others throughout the country.  I think this would be a worthwhile experiment for the legal system, and one to help curtail the one systematic disadvantage I do encounter regularly.

Conclusion

There are many more pervasive myths about the legal world, but this post is already getting long, so I will wrap it up here.  You can look for this to be a continuing series in the future.

Wednesday, November 5, 2014

Virginia Uncontested Divorces: When the Fighting is Over

Before you read this blog post, please review my disclaimer by clicking the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

[UPDATE:  Some information contained in this blog post is no longer accurate due to subsequent changes in the law.  Please see my changes in the law blog post for 2019 for more information.]

Introduction

Given the entire industry of family law and the horror stories we hear about cripplingly expensive divorces, you might be surprised to learn that most divorces are short, simple and relatively cheap.  Generally speaking, divorce tends to be more likely to go to a contested trial than other areas of litigation, but that's because there are, in many cases, about five areas in which there are potential issues to dispute (grounds of divorce, property division, spousal support, child support, and child custody/visitation) - so while each of those five areas is about as likely to settle as any other type of litigation, settling all five in one case is much more challenging.  That being said, divorce cases being "more likely" to go to trial is not the same as saying divorce cases "generally do" go to trial - they do not.  Most cases ultimately do settle completely - it's just, in my experience, closer to 60-65% of divorce cases, as opposed to about 85-90% of other types of cases.

So, what happens if, despite the hurt feelings and all the emotions that caused your marriage to end, you find yourself in a situation where you and your soon-to-be ex actually are in agreement on the five issues I listed above?  In today's blog post, I hope to cover the basics of obtaining an uncontested divorce in Virginia.

First, Get it in Writing

If you are in agreement on everything, it would be to everyone's benefit to get it in writing.  Technically, you can do this on your own - write down your agreement, each of you signs it in front of a notary public, and suddenly you have a binding marital agreement (see this post for more on marital and pre-marital agreements).  That being said, there are many ways that you can screw up putting this together, so it's always best to have a lawyer draft your agreement (typically referred to as a "separation agreement").

So, why have a signed agreement?  Well, first of all this allows you to get divorced faster if you do not have children (after six months of separation instead of a year).  Moreover, this prevents your spouse from backing out of your agreement at the last minute, as separation agreements are very hard to challenge.  Finally, it provides clear guidance to attorneys, courts and each spouse going forward as to what is supposed to happen - much clearer guidance than you typically get without a written agreement.

Next, Wait the Requisite Time Period

If you do not have children and you have a signed separation agreement, you can get divorced after six months of separation.  If you do have minor children or do not have a separation agreement, you must wait until you have been separated for a year.  In either case, you cannot take further action to get divorced until that time has elapsed.  During the waiting period, however, you can start getting your ducks in a row so you can complete the remaining steps as quickly as possible.

Identify a Corroborating Witness

To complete your divorce you will need someone to "corroborate" your eligibility for divorce.  This should be someone who is not you or your spouse, who knows both you and your spouse, knew when you and your spouse separated, and has visited you in your home at least several times since your separation.  Your corroborating witness can be any adult other than you or your spouse, so it does not matter if they are "biased" (such as a parent, sibling, or adult child).  It is best to talk to your corroborating witness as soon as possible to make sure they are comfortable serving in that role.  Let them know they will not need to come to court and will just be signing an affidavit.

File Your Paperwork in Order

Once the time period for separation has passed, it is time for you to file.  It is very important that you file your paperwork in Order however.  The paperwork you will need to file in court is as follows (and in this order):
  • Complaint for Divorce (initiates the divorce suit)
  • Acceptance/waiver of service of process and notice signed by your spouse (allows divorce to proceed faster)
  • Affidavits for divorce signed by you and your corroborating witness
  • Completed Virginia State Form VS-4
  • Final Decree of Divorce signed by you (or your attorney) and your spouse
Note that the Acceptance/waiver, affidavits, VS-4 and Final Decree can all be filed at the same time - only the Complaint has to be filed first.  The above order must be followed, however, if you do not file the other documents at the same time.  If you file all of those documents, in that order, and they are completed properly, your divorce should proceed without you or anyone else ever having to appear in court.  You will probably have to wait about two or three weeks for your Final Decree to get in front of a judge, but then it should be signed and mailed back to you (assuming you provided the court with a self-addressed, stamped envelope).  That's it - you are divorced.  Note, however, that under Virginia law you cannot get re-married until 30 days after your divorce is entered.

Why Hire an Attorney

So, the above process probably seems simple enough - so why hire an attorney for it?  Well, because as simple seeming as it is, it is very easy to screw up if you are not familiar with the process.  In fact, I have many clients come to me with cases they filed where their divorce got rejected, and often their case is so messed up by the time it gets to me I have to close their original case and start over from scratch - which is typically more expensive than if they had just come to me in the first place.

So, what's so easy to screw up?  Well, it's easy to have a separation agreement that doesn't actually cover everything it has to, or leaves important matters out.  It's easy to not include all the statutorily required statements in the Complaint, Acceptance/waiver, affidavits, or Final Decree (the affidavits and Final Decree are the toughest since there are things that are required by law to be in them that many people do not know about).  While you can often get samples from your local courthouse, they usually are not perfect, and moreover, they usually do not include sample affidavits, meaning you will have to go to court for what is called an ore tenus hearing, rather than proceed with a simple affidavit.

On top of it all, an attorney for an uncontested divorce is much cheaper than an attorney for contested divorces.  Attorneys typically charge flat fees for uncontested divorces - and depending on the complexity of the case, these fees can be as little as $600 (though $1,200 or so is more common, with up to $2,000 or so for more complicated cases that require drafting and negotiation of a separation agreement along with filing of the divorce itself).  Compare this to the $15,000 to $75,000 that a typical contested divorce runs (with atypical contested divorces I have heard of running as high as $250,000 to $500,000 in legal fees) and you can see how an uncontested divorce is a much cheaper option.

All in all, for the security that comes from having an attorney handling your uncontested divorce, the cost truly is not that high, and is certainly worth it.

Conclusion

Most divorces in Virginia are uncontested.  They require neither protracted litigation, nor even an appearance in court.  Hiring an attorney is the simplest way to make sure that your uncontested divorce runs as smoothly as possible.  If you are involved in a divorce where all matters are actually resolved (or look to be resolved fairly easily), please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour!

Thursday, October 30, 2014

Virginia Tenants' "Get Out of Jail Free" Card - the Redemption Tender or Payment

As always, before reading my blog post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

[UPDATE:  Some information in this blog post is no longer accurate due to changes in the law.  Please see my blog post on changes in the law for 2019 for more information.]

Introduction

I have repeatedly covered on this blog the concept of "self-help" in landlord/tenant law.  Self-help is when a landlord or tenant takes matters into their own hands, without the court, and for a tenant typically includes withholding rent.  In residential leases, self-help is strictly forbidden by law.  Today, however, I want to touch on a different but related topic - delayed rent.

Say you are a tenant and you've had a financial issue arise.  You know you will have the money to pay your rent in a few weeks, but you don't have it right now.  What should you do?  Well, recommendation one is to talk to the landlord and see if he will agree to accept a delayed payment (if he does, get that agreement in writing).  If that doesn't work, recommendation two is to try to scrape the money together to pay.  If that doesn't work, recommendation three is to prepare to utilize a little known feature of Virginia landlord/tenant law called the "redemption tender" or "redemption payment."  I will get into the risks and drawbacks of this approach later in this post - there's a reason it is my third recommendation, not my first - but executed properly, this process can buy you about a month to get a late rent payment in without facing eviction.

In today's blog post, I will discuss the way "redemption tenders/payments" work, how to execute them, and their risks and drawbacks.

VRLTA vs. Non-VRLTA Leases

Any long-time reader of my blog knows that the first question you need to ask when dealing with landlord/tenant matters is which landlord/tenant law applies to your lease.  The basic breakdown of figuring that out can be found here.  Once you figure out which law applies, the next question is to ask what the difference between the two laws may be.  In this case, the law is largely the same.  "Redemption tenders/payments" for non-VRLTA leases are governed by Virginia Code Section 55-243 and for VRLTA leases they are governed by Virginia Code Section 55-248.34:1.  The relevant provisions of the two code sections are identical, so for most purposes this post applies equally to both kinds of leases.  Note, however, that the non-VRLTA provision does not have a non-waiver rule, meaning that a lease could probably waive your right to use this procedure.  I will say, however, that to date I have never seen a lease that waives the right to a "redemption tender/payment."

So What Is a Redemption Tender/Payment?

"Redemption tenders" and "redemption payments" are two processes that, if completed properly, will cause an unlawful detainer action (a civil case for eviction) to be dismissed entirely (thus "redeeming" your right to live on the property) if the reason for the unlawful detainer is non-payment of rent.  In other words, to take advantage of this provision of law, you will have had to not pay your rent, been served with a pay or quit notice, not paid in accordance with that notice, and had an unlawful detainer action filed against you.

A "redemption tender" is a fairly limited option primarily available to those with lower incomes.  A redemption tender is a letter signed by a governmental entity or a non-profit charity promising payment in full of the amount due to the landlord - including rent, late fees, other charges, reasonable attorneys' fees, and court costs - within 10 days after the first return day on the unlawful detainer.  If presented to the court at the return day, the return day will be continued for 10 days.  If the payment is made to the landlord before that time is up, the unlawful detainer is dismissed and your lease is resumed.  If it is not, possession is granted to the landlord immediately, without a trial.

A "redemption payment" occurs when at your court date (specifically, the first return) you pay the landlord, the court, or the landlord's attorney the full amount due to the landlord - including rent, late fees, other charges, reasonable attorneys' fees, and court costs.  If you do this, the unlawful detainer will be dismissed, and your lease is resumed.

Limitations

There are some limitations on this option.  For example, this option is only available for residential leases, not commercial leases (unless provided for in the lease).  Additionally, a "redemption payment" can only be done once in any given 12 month period.  Finally, if you dispute the amount owed to the landlord, then a redemption is not available to you as the court is unlikely to be willing (and in the case of a redemption tender, is not allowed) to hear an argument on this for the purpose of a redemption.

Risks and Drawbacks

So, the risks and drawbacks of the "redemption" approach should be very clear.  The risk is mainly that you will not handle it properly - that you will underpay, still get evicted, and now be out the money that you paid.  If you have done one before, you may forget when your last "redemption payment" was and try to do it a second time in 12 months, getting evicted in the process.  The final risk, if you have a non-VRLTA lease, is that you may have missed a lease provision waiving your right to a redemption, in which case you will be out of luck.  I would also note that as this is a very rarely used provision of law, you also risk appearing in front of a judge who does not understand it (and has never seen it before) and may not apply it properly.

This approach also has drawbacks.  First and foremost, it is much more expensive than paying your rent on time or having an agreed delay.  You will have to pay not only the rent, but the court costs and attorneys' fees of your landlord and any late charges included in your lease.  You also lose your ability to contest the amount you owe - if you disagree with what your landlord claims you owe, you either have to go to trial (and risk eviction) or suck it up and pay what your landlord claims.  Finally, you create a public record (since a lawsuit has been filed) of your non-payment of rent that future potential landlords may discover.

For these reasons, I consider redemption to be a last resort option.

Conclusion

"Redemption tenders" and "redemption payments" are last resort options for tenants who simply cannot pay their rent on time for a month but know they will have the money later.  If you are considering making a redemption payment or have a tenant who is attempting to do so, you may want to consult with an attorney to make sure it is being done right.  You can contact me by calling (703)281-0134 or e-mailing me at SLeven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour!

Thursday, October 23, 2014

No Blog Post This Week

Hi all.  It looks like I've come down with whatever's been going around, so it does not look like I'm going to have the wherewithal to do a blog post this week.  I'll be back next week though!

That being said, it's always a good time to remember that just because you haven't paid your rent, doesn't mean the landlord can kick you out without a court order - and this is true whether you are covered by the Virginia Residential Landlord and Tenant Act or not.  You can read more about that here.

Thursday, October 16, 2014

Defining Marital Property in Virginia

As always, before reading my post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

One of the most important and well-known topics that comes up in divorce law is the division of property.  It is also a topic that I have almost completely avoided on this blog.  It's not that I don't think it's important - it most certainly is important.  Rather, I have had trouble coming up with ways to talk about it while keeping blog posts on the topic of a reasonable length.  You see, I can go on and on about the weird rules of spousal support, or how you calculate child support, but in my personal opinion, nothing about divorce law is more complicated than the laws surrounding the division of property.

Virginia is an "equitable division" state.  We are also not a "community property" state.  What this means is that we do not consider all property owned by married couples to be eligible for division, and when property is divided, there is no presumption that it should be divided 50/50.  As a result, there are very complicated statutes on property division, and very, very many volumes of case law interpreting it.  Today, I've decided to start addressing some of these issues, and to do so I'm starting at the beginning - what property actually gets divided?

Today's blog post will give a brief overview of the meaning of marital property - the property that gets divided in a divorce.  Even this is a complicated concept with volumes of case law, so today's post will remain fairly basic.

Marital Property, Separate Property and Hybrid Property

So, as you can probably guess from the names, marital property is property that is considered to belong "to the marriage," while separate property belongs "to the person."  Marital property is divided in a divorce, separate property is not - it stays with its owner.  Hybrid property is property that is itself both separate and marital, so only the marital portion of hybrid property is divided.

All property you own prior to the marriage is generally considered your separate property.  Similarly, any property you acquire after you separate is also considered your separate property.  Some examples of this may be a retirement account that you owned before you were married - it is your separate property.  A bank account that only has money in it that you earned after you separated - also your separate property.

All property you acquire during the marriage, however, is generally considered to be marital.  Money you earn during the marriage, for example, is marital property, and the things it purchases are marital property.

But what happens when you mix separate and marital property?

Transmutation vs. Tracing

The general rule is that if you mix separate and marital property, the whole property becomes "transmuted" to marital property.  There is an exception, however, where the owner of the separate property can "completely trace" his property.

I will give two examples.  If you had a bank account before marriage but then started depositing your marital income into that account, the account will become marital.  Money is fungible, and as a result, there is no realistic way to figure out what portion of the bank account is now marital and what portion is not.

On the other hand, if you use an entirely separate bank account to pay half the down payment on the house, and you can prove that the money was, in fact, used for the down payment, you now know what share of the initial equity in the house was separate, and can use that to calculate the portion of the house that remains separate.

Marital Contributions to Separate Property

There is another rule of some importance to know as well.  If you bring separate property into the marriage, but then contribute marital property to it, or either party makes significant efforts to assist it during the marriage, and the property has a "substantial" increase in value, it might become hybrid property.  There are several situations where this comes up - for example, a separately owned house brought into marriage where substantial work and improvements are then performed on it during the marriage.  A recent Virginia Supreme Court case also counted as hybrid a pre-marital retirement account to which no contributions were made during the marriage, but on which the spouse who owned it had done a great deal of work in terms of active trading to increase its value during the marriage.

Retirement Plans

Now, I've alluded to retirement plans a couple of times, but they are one of the harder bits of property to define, so I do want to address that as well.  Retirement plans come in two forms - defined contribution (such as an IRA or 401k) and defined benefit (such as a pension).  Both are considered property in divorce, not merely future potential income, although payments from these plans can be considered income for the purpose of determining support (the interplay between income for support and income for property division is a whole other issue probably worthy of its own post).  As a result, both are divisible, even if you are nowhere near retirement age yet.

For defined contribution plans, the "marital share" is generally considered to be all contributions made during the marriage, and the earnings and losses thereon.  Contributions (and their earnings and losses) from before the marriage and from after the separation are generally considered a separate portion.

For defined benefit plans, there are a number of approaches that can be taken to determining the marital share, but the most common I have seen is the fraction formula.  In the fraction formula, the percentage of the defined benefit plan that is considered marital is equal to an equation defined as x / y * 100 (you can leave out the 100 if you are just going for a decimal fraction rather than the percentage).  In that formula, x is the number of months you were employed by the employer offering this plan where your month of work was credited towards your plan and you were married and not separated.  For the denominator, y is the total number of months of work credited towards your plan as of the date you retire, whether married or not.  Usually x will be defined by the date of divorce, but y will not be, and that's alright - y is not expected to be known yet as of the divorce date and the division can still be done with y unknown.

Now, it is worth noting that unlike the other areas of law in property division, there is a specific rule regarding division of retirement accounts.  Specifically, once you have determined the marital share of a retirement plan, the non-owning spouse cannot be awarded more than 50% of the marital share of a retirement account.  This was done to prevent people from potentially having their retirement savings wiped out by a divorce.

Restricted Stock Options

Another complicated area of property law is restricted stock options - these being stock options frequently awarded by employers which cannot be exercised until a certain date.  If that date is after the separation, then you don't really have these options before the separation, so there is some debate in the law about whether they are marital or not.  The general rule as it stands right now is that if they were earned during the marriage (so, for example, they were given as a bonus for work done during the marriage), they are marital, regardless of when they vest.  If, however, they were given by employers not as compensation for work done, but rather as merely an incentive to continue working for that employer, then they are separate if they vest after the separation date.

This is an area of law that is still evolving, however, and I cannot say the above is the final word on the matter.

Separate Property Acquired During the Marriage

Now, there are some exceptions to the rule that property acquired during the marriage is marital that are worth discussing.  The first exception is that property acquired during the marriage solely with separate property (so, for example, a TV bought with money from a separate, pre-marital bank account) is still separate.  The second is that anything inherited during the marriage is separate property, unless the inheritance is from a will that specifically bequeathed the inheritance to the couple, rather than just one of the parties.  The third is that any gifts that are given by someone other than the person's spouse to the person during the marriage also remain separate property.

Ownership Presumptions

I'm going to wrap things up here because this post is already longer than I'd like, but I do want to note that the law does have some presumptions regarding ownership that are worth remembering.

First and foremost, any property that is jointly owned is presumed to be marital.  You can rebut this presumption with some strong evidence, but it is fairly unusual that a court will consider something jointly owned to be entirely separate - at best, you will sometimes get a finding of hybrid property.

Second, the law also presumes that property that is separately titled is separate.  That being said, this presumption is much easier to rebut, because as soon as you show that the property was actually acquired during the marriage, the presumption switches to it being marital property.

Nonetheless, it is important to know these presumptions because of their impact on the burden of proof.  If property is jointly owned, the party trying to prove separate ownership has the burden to prove it.  If the property is separately owned, the party trying to assert marital ownership has the burden to establish that it was acquired during the marriage, but then the other party would have the burden to establish that it was still separate property.

Conclusion

The law surrounding property division is, in my opinion, the most complicated part of property law.  Consider that this entire blog post only even talked about what property gets divided - we didn't even touch how that division is actually done - and we didn't even talk about all the topics in that arena.  This is one of the biggest reasons why you should get an attorney if you have any property at all that needs to be divided.  If you are involved in a divorce and have property to be divided, please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up a consultation.  Our consultations are free for up to half an hour!

Tuesday, October 14, 2014

Classic Law is Your Friend: Using Common Sense in Virginia Legal Matters

Today's classic blog post discusses situations where, in reality, you may be better off listening to your common sense than the strictest rules of law.  It was originally posted on November 6, 2013 and was titled "Common Sense vs. The Law - When Doing What Makes Sense IS the Right Choice."

Where I felt it necessary, I have added a few lines here and there.  Additions that were not in the original blog post will be in brackets ([]).
As always, before reading this post, please review my disclaimer by following the link above, or by clicking on this link.  As always, any legal principles involved in this post apply only to the Commonwealth of Virginia.

Introduction

Most people who have learned anything about the law know that the law's relationship to common sense is tenuous at best.  Most lawyers will regularly advise people that "well, I know that makes sense, but that's not what the law says."  Usually that's good advice, but not always, and I hope in this post to explain when listening to your common sense is a good idea.  [Remember, however, that every situation is unique, and if you aren't sure which way to go, you are best off speaking with an attorney who can address your specific case.]

The Self-Help Example

As is frequently the case, my inspiration for writing this post comes from experience with an actual case.  As is unusual, however, I think talking about that case in some level of detail is warranted to explain the point.  As a result, please remember that every case is unique, and relies on its own sets of facts.  Do not conclude that just because something happened in one case it will happen in yours, rather your own case is unique and will require its own unique considerations.

Recently, I represented a client who was a tenant to out of state landlords.  Many months earlier, the basement of the house my client was renting was flooded and rendered unusable.  Under both my client's lease and the law, she should have been entitled to abate some of her rent while repair was pending, but she took no action, relying instead on the landlord to do the right thing and just repair the basement quickly.  After several months of practically no repairs, however, she finally got fed up and withheld part of her rent from one of her rent payments.  Those of you who have read my blog before already know that this is self-help, and that in a residential lease self-help is a big no-no.  The landlords were outraged, hired an attorney, and my client received a pay or quit notice.  That's when she came to me.

We agreed to pay back the withheld rent, along with late fees and the reasonable attorneys' fees the landlords had paid to get the pay or quit drafted and served.  The next week, I filed a tenant's assertion on my client's behalf, seeking fairly extensive relief.  After two months of rent going entirely into escrow, we finally had our trial.  At trial, the judge agreed that my client should have an abatement of her rent.  However, the judge's commentary didn't end there.  He then expressed his outrage that the lawyers for the landlord had advised their client to submit a pay or quit, and called that conduct "reprehensible."  Even acknowledging the landlords were right under the law, the judge expressed concern at their morally outrageous behavior.  In the end, my client was reimbursed partial rent (a higher "portion" even than she had withheld the one month she did withhold) dating all the way back to the date the basement was flooded, and my client was even reimbursed the late fees and attorneys' fees she'd paid on the pay or quit.

The reason this relates to my blog post is this - if the landlords had ignored the law [or more specifically, their rights under the law] and just listened to their common sense, done what is right, all they'd have lost out on is a little bit of rent for a few months until the basement was finished.  Instead, they looked bad to a judge and lost out on a heck of a lot more rent.  In the end, not doing the "common sense" thing probably cost the landlords around $4,500 or more (not including the legal fees they spent defending my Tenant's Assertion).  That's a lot of money to pay just to prove a legal point.

So, How Do You Tell the Difference?

So, it's simple to look at an example like that and say "ok, sure the landlords were jerks and shouldn't have been, but how do you know when to listen to common sense instead of the law?"  Well, the rule I suggest following [at least usually] is that if you are legally barred from doing what common sense tells you to do, follow the law.  If you are legally required to do what common sense says you shouldn't do, follow the law.  However, if you only have the legal right to do or not do something common sense says you should not do or do, respectively, but there's no legal requirement, then listen to common sense.

Using my example above, my client was legally barred from doing what common sense told her to do (withhold rent), so she should have listened to the law, and ultimately she did.  The landlords, however, only had a legal right to send a pay or quit.  They weren't required to.  They could have just accepted her withheld rent and said "yeah, we should have repaired the basement faster, sorry, this is an ok amount to pay us until the basement's finished."  That's where the difference comes in.

Now again, you might wonder "ok, so where's the limit?  Surely in your example, the landlords should have filed a pay or quit if your client had withheld all of her rent, since the basement is nowhere near all of the rented house."  Well, that's the thing.  Common sense is flexible while the law, generally, isn't.  If the amount my client had withheld had been unreasonable (obviously I believe it was not, nor did the judge in this case) then common sense would say to the landlords to exercise their legal rights.  Common sense and the law don't always conflict.

Nonetheless, while every situation is unique and I'd encourage you to consult a lawyer when making your own decision for your case, I believe the rules I've outlined above generally hold.  When you are legally barred from doing or required to do something your common sense says you should or shouldn't do, respectively, listen to the law.  When the law only permits you to do or not do something your common sense says you shouldn't or should do, respectively, then listen to your common sense.

More Examples

Well, the above is a bit abstract, so I want to use some more examples.  Unlike my opening example, however, these examples are not taken from real cases.  Like my opening example, however, each case is unique, so do not assume that something I outline here applies to your case without consulting with an attorney first.  As I said, however, the following examples are simplified, and made up.

John and Suzie are married and having marital troubles.  They have no children.  They decide to get a divorce.  John demands that Suzie gets out of the house, and while she's out one day, John changes the locks.  Suzie remembers that a spouse cannot just kick another spouse out.  Suzie's sister, however, owns an estate with a luxurious guest house and has regularly told Suzie she can move into the guesthouse for free if she ever needs to.  In that case, despite Suzie having the right to stay in the marital home, I would suggest she move out and move into her sister's guest house (after having John sign some papers making clear that he recognizes Suzie is not abandoning the marriage).  This would get her out of a probably unpleasant home situation without too horribly interrupting her life.  If John were my client, however, I'd tell him to return the locks, since he is legally barred from forcing Suzie out at this point.

Bill rents a condo from Jason.  Bill cannot afford the rent anymore, so he stops paying it.  He finds a new place that he can afford and moves there.  In the meantime, without serving any notices or filing an unlawful detainer, Jason changes the locks and bars Bill from the property.  Bill wants to sue for unlawful eviction.  If Bill's my client, I would advise him to let it go.  He hasn't paid rent, he's already moved out, all he's doing by suing is getting Jason to get his papers in order to file an unlawful detainer that will likely cost Bill more.  If Jason's my client, however, I would advise him to immediately change the locks back and let Bill in whenever he wants, since what Jason did was illegal.  I'd, of course, also advise him to get his notices in order and file an unlawful detainer.

So those are a couple more examples I hope will help explain what I mean.  I suppose the simplest saying to use is that just because you can do something doesn't mean you should (and the reverse, when you must do something, then you should).

Conclusion

Sometimes people get so caught up in the law and their rights that they forget that common sense still has a role to play in their decisions.  Much like just because the first amendment says you can say something doesn't mean you should, so too with exercising your other legal rights.  In some cases, ignoring your common sense can cost you dearly.  If you're in a situation where you think your common sense and the law may be in conflict, I'd advise you to consult with an attorney before deciding what action to take.  If you want that attorney to be me, please call (703)281-0134 or e-mail sleven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour.

Thursday, October 9, 2014

Same-Sex Marriage in Virginia: Untangling the Legal Complexities

As always, before reading this post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles discussed shall apply only to the Commonwealth of Virginia.

Introduction

As discussed on Monday, same-sex marriage is now legal in Virginia.  While this is obviously a very exciting time for many same-sex couples in Virginia, the reality is the old laws are still on the books (just no longer enforceable), and in general your same-sex relationship will still be in the legal limbo it was in before Monday unless you take concrete steps to change it.  Today I will address some of the important steps same-sex couples in Virginia need to take in order to take advantage of the change in law.  Please note that some of these steps need to be followed even by couples that were already legally married in other states but resided in Virginia.

First of all, you need to get married

While Virginia law covering who can and can't get married has changed, Virginia law regarding how you get married hasn't.  This means that if you had a religious marriage ceremony (or a civil one) in Virginia previously, you aren't suddenly legally married.  In order for a marriage conducted in Virginia to be legally valid, you must follow a three step process, and it must be followed in this order:
  1. You must obtain a marriage license from any Circuit Court in Virginia.
  2. You must be married by a person (minister, rabbi, civil officiant, etc.) certified to perform marriages in Virginia within 60 days after the license is issued.
  3. The person performing your marriage must return the now-completed marriage license to the court where it was issued within 5 days after performing the marriage.
So, because you could not previously get a license, your prior Virginia marriage is not valid because steps 1 and 3 were not followed.  Since the above must be done in order, you must again go through step 2 in order for your Virginia marriage to be legal.

Of course, this provision only applies to same-sex couples who previously got married in Virginia.  If you were legally married in another state, then you don't need to get married again - your marriage will now be recognized in Virginia.

Re-title your property

There are many advantages that states give to married couples that will become available to you automatically with the change in law (if you were already legally married elsewhere) - and of course federal advantages were given to you with the Supreme Court's decision in Windsor back in June.  However, some of these advantages are not automatically given, meaning you need to take action.  One of them is how your home is titled.

In general, there are three ways property can be titled - tenancy in common, joint tenancy and tenancy by the entirety.  A tenancy in common creates the idea that you each own half the property, you can each fully dispose of your half as you wish, but a creditor can also attach to your half and force the sale of the property.  A joint tenancy means you each jointly own the whole property, but this can be broken up at any time by either of you, and creditors are sometimes able to get in and take a lien on the property.  A tenancy by the entirety means you each own the whole property as a single entity, thus neither of you can break up the tenancy by the entirety without the agreement of the other, and only a creditor who is a joint creditor (as in, you both owe that creditor money) can come in and place a lien on your property.

A tenancy by the entirety is legally only available to a married couple.  As such, if you bought property jointly before the change in law, even if you were legally married in another state, Virginia law did not recognize your marriage and you were, at best, made joint tenants.  You should see a property lawyer ASAP to get your property re-titled as a tenancy by the entirety to take advantage of its availability.

Re-title your bank account

The above goes double for a joint bank account.  Even a joint bank account that is owed as a "joint tenancy" can have up to half of it garnished by a creditor of just one owner (with some very rare exceptions).  If a bank account is owned as a tenancy by the entirety, however, a creditor of just one owner cannot touch the account in a garnishment.  You should go to your bank and ask to have your account re-titled as a tenancy by the entirety - be aware they may require you to close your current account and open a new one.

Review your estate plan

The change in law will have an impact on a wide array of issues in estate planning - too numerous for me to list.  This would be a very good time to go to your estate planning attorney and review your wills, medical directives, etc. to make sure they do what you want them to.  Same with your beneficiary designations on life insurance policies, retirement plans, etc.

Review your insurance policies

Many health, homeowners and auto insurance policies provide benefits for families, but require you to be married to take advantage.  Again, these won't be changed automatically just because the law has changed - you need to update your marital status with the companies and potentially apply for new policies.

Consider a marital agreement

Perhaps one of the most confusing aspects of same-sex marriage will be what happens if you get divorced.  Usually, most property acquired during a marriage is considered "marital property" at the time of divorce - but how do you define "during a marriage" in this case?  If you were only married in Virginia, then you were clearly not legally married previously, so the clock will only start ticking once you get legally married - but what if you were legally married in another state, then lived in Virginia where your marriage wasn't recognized?  We can have guesses as to what the courts will say, but the best plan to prevent problems if a divorce becomes necessary is a marital agreement.

Marital agreements are just like pre-marital agreements, except they happen after you are already married.  I get into more detail about these agreements in a blog post from last August, but the key is you can resolve property issues by a marital agreement pretty much however you want.  If you want all property from the time your non-legally recognized marriage was performed in Virginia to be recognized as marital, your marital agreement can do that.

Look, no one wants to think their marriage might end, but somewhere around 35% of marriages do, and you really should prepare yourself.  If you don't, you could be in for a much more expensive divorce than usual because of the extra legal complications.

Get extra copies of your completed marriage license

As I said before, the old laws will remain on the books until actually removed by the General Assembly - they are not automatically removed just because they are unenforceable.  Combine this with the fact that most government employees were trained under the old law, and you are bound to run into at least some trouble somewhere along the way in updating your records, property, etc.  Having copies of your marriage license on hand to prove that you are, in fact, married would be one of the easiest ways to get past this problem.  You can get copies of your Virginia marriage license from the court in which it was issued or from the Virginia Office of Vital Records in Richmond.

Conclusion

The sudden change in Virginia law for same-sex marriages could create a number of legal issues for same-sex couples here.  If you would like to talk to an attorney about what you should do to protect yourself and take advantage of the new law, feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour!