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What is the California Probate Code?

You are probably familiar with the California Probate Code, and the hassles that can come with it, If someone you love has passed away. The California Probate Code governs what happens to the property of a person after they die or become incapacitated. This Code provides provisions that regulate wills and other estate planning instruments, as well as laws that dictate what happens to a person’s possessions after they pass away if they did not have a will.

The California Probate Code can affect your estate because it can dictate how possessions can be passed on, how debts against the estate are settled, what waiting period must be followed before assets transfer, and what assets can skip the probate process entirely. Probate courts make decisions on guardianship for minor and handicapped children or conservatorships for the elderly. The Probate Code even dictates whether or not a will is valid– and if it isn’t (or if there is no will) who inherits. Most importantly, the Probate Code in California specifies what happens during probate (the process by which a deceased person’s estate is assessed, valued, and passed on).

How Does the California Probate Code Affect Me?

It’s easy to assume that the probate code hardly matters to the average person. If you want to take care of your family after you pass away, you need to carefully comply with the provisions in the California Probate Code when creating an estate plan. Otherwise, your best intentions can be thwarted by lesser-known provisions. This can lead to stress for your loved ones during an already difficult time, or even unintended outcomes that may leave individual you want to inherit your estate with nothing.

That’s why it’s important to gain a clear understanding of the Probate Code in California before ever drafting a will or drawing up a trust to bypass the months-long probate process. In fact, we suggest that you get expert help with any documents that may be subject to Probate Court. While the Probate Code isn’t intentionally confusing, it is quite specific, which means that even a small misunderstanding of the Code could have major consequences.

At MAJ, we have a team of experienced California probate attorneys ready to help you ensure that your estate plan complies with the Probate Code and even minimizes the impact of the probate process and other annoyances like estate taxes. Let our probate lawyers help you master the California Probate Code and take care of your loved ones with a carefully thought-out estate plan.

CALIFORNIA BUSINESS LAW – WHERE DO I START WITH MY BUSINESS?

 

If you are considering becoming an entrepreneur, you need to understand California business law before you start working on your winning business plan. After all, failing to comply with business and tax laws is a common reason that promising businesses fail. You need to get off on the right foot by understanding the business law basics that apply to any fledgling company or venture.

5 Key California Business Law Tips

The following are five key California business law tips that should get you off to a good start on your new business.

 

  1. Start with a business plan. Just a good idea is not enough to make a business successful. You need to have a detailed business plan that accounts for your finances, as well as the regulatory issues you may encounter. Far too many people wait too long to look up California laws that affect their business until they’ve already made costly mistakes. A business plan that includes a well defined game plan for regulatory compliance avoids major and costly pitfalls.
  2. Incorporate early– and choose your business entity carefully. Before you sign a lease or a contract, you need to incorporate your business. In California, corporations, LLCs, and partnerships all provide business owners good ways to limit their personal liability and provide structure to business operations. Just choose your business entity carefully. These can be difficult to change later, so you need to carefully consider which formation best meets your current needs and allows for future growth. An experienced incorporation lawyer can help you weigh the pros and cons of each option.
  3. Get the right California business permits. Unless you have the right permits, your business has no right to operate in California. Make sure to carefully research all the permits that may be needed in your business model, and discuss any questions with an expert. You need to apply for the permits before you open or risk big fines.
  4. Plan carefully for your federal and California taxes. Taxes remain a huge hurdle for small businesses, but a strategic tax plan can limit your tax responsibility and protect you against audits. A California tax attorney can help you figure out what you owe and how to stay compliant.
  5. Find a California business lawyer you trust. As you can see, every small business needs legal expertise to succeed, even from the earliest stages. Find an experienced California business lawyer you trust early, so you don’t miss any legal risks or waste opportunities for growth. Not only will you be able to protect your business and set it up for success, but you’ll also have a trusted partner ready to fight for you when legal issues crop up in the future. A little prevention goes a long way– and saves you money.

 

With these five tips in mind, you’re a long way towards making your new business a success. Still looking for a lawyer you trust? Talk to the attorneys at MAJ Law. Our California business lawyers have years of diverse experience in the business world, which means we bring a level of expertise to our advice that sets you up for success on day one.

Call us today at (707) 528-2882.

ESTATE PLANNING 101: HERE’S SOME BASICS YOU SHOULD KNOW

Smart people understand the need to plan for the future, including a future for your loved ones after you pass away. Your family needs to be taken care of and have a clear understanding of your desires.  Estate planning provides a way for you to ensure that the people you care are provided for during the difficult time that follows losing a loved one. If you have not already begun, you should begin planning for your estate now.

6 Essentials Of Estate Planning

Here’s six essential basics of estate planning everyone should know to get started.

 

  1. A will is a good place to start… The very basic “Estate Planning 101” document that everyone needs is a will. A proper will ensures that your wishes are clearly conveyed to the courts (and your friends and family) after your death. While you can type up a will on a whim and get it signed by witnesses without outside help, a good suggestion is to have a will drafted by an experienced estate lawyer. Every state has unique probate laws and special requirements for wills, so do yourself a favor and make sure that your will complies with them. An experienced legal professional can draft a will you can feel confident will hold up in court as valid.
  2. … But it’s not all you need to ensure that your loved ones are taken care of. A will is not the only document needed to ensure that your wishes are carefully followed. Advanced Health Care Directives, Power of Attorney , trusts, and other legal instruments work with your will to take care of all the details beyond who gets your estate and will help minimize cost before your death if you become incapacitated.
  3. Probate can be avoided. Probate can be slow and confusing, especially when a person’s estate plan is not set up properly. You can avoid the hassle of probate court with the right estate planning strategy. Trusts and other legal instruments can bypass probate, and investments like life insurance make it possible to leave money directly to a specific beneficiary.
  4. Trusts are not just for the extremely wealthy. When you hear the term “trust,” you probably conjure up images of young, incredibly wealthy heirs. In reality, trusts simply provide you with a legal entity that makes transferring assets easier after your death. Because trusts outlive people, anything held by the trust passes to a secondary set of beneficiaries, which means your family can access what you’ve left behind easier than having to wait on probate. An estate attorney can set up a simple trust for any person who wants to minimize probate and estate taxes.
  5. Estate planning is about more than money. If you don’t think that your assets are enough to merit a careful estate plan, think again. It’s not just about money and property. Estate planning includes making vital provisions for what to do if you become incapacitated through documents like a living will and a power of attorney. Your estate plan also makes custody arrangements for minor or handicapped children and provides financial protections in their names. Neglecting a careful estate plan means neglecting much more than just property.
  6. No estate plan is ever “complete.” You’re never really done with your estate plan. A good estate plan requires regular updates. Every few years and after every major life event, you should meet with your estate lawyer to adjust your estate plan accordingly.

 

If you keep these basic tips in mind while developing your estate plan, you’ll be in great shape. Of course, every person is unique which means that no perfect estate plan can possibly follow just these simple guidelines. Let the experienced estate lawyers at MAJ Law help you create the right custom estate plan for your needs today.

Give us a call today at (707) 528-2882 to learn how we can help.

WHAT IS COMPLEX LITIGATION?

Understanding Complex Litigation

Every company faces litigation at some point. Many of these are fairly standard lawsuits related to real estate or disputes with vendors. Almost any experienced business lawyer can help you resolve these matters with the best possible outcome. Not so with complex litigation.

While any lawsuit may be complicated, complex litigation refers to a specific type of large civil case that companies may face. Complex litigation encompasses any court battle with multiple parties in multiple jurisdictions, large amounts of money at stake, lengthy trials, or complex legal issues. These are the kind of lawsuits that can draw serious media scrutiny, and they will likely cost the company serious time and money, even if you eventually win the case.

Many kinds of lawsuits can fall into the category of complex litigation. Class action lawsuits, contract disputes involving subcontractors, international arbitration, and even simple sale of goods agreements across state lines gone wrong can evolve into fairly complex legal battles. These involve unique legal issues rarely faced by corporate lawyers without complex litigation experience. Unless your attorney knows exactly what obscure laws may come into play, your company can wind up paying big, especially since complex litigation can involve thousands, millions, or even billion-dollar judgements.

 

How Can I Mitigate the Impact of Complex Litigation on My Company?

Complex litigation requires an expert touch, or cases can drag on for months and even years, draining your company of much-needed resources. Just any corporate lawyer won’t be prepared to handle the massive amount of due diligence these cases require, nor will they be able to quickly sift through the data to determine the key issues–and the best course of action to address them. The best way to mitigate complex litigation is to trust a lawyer with experience on other complex cases involving similar legal and factual issues.

It’s also important to consider all your options. A complex litigation attorney that you trust won’t just show you the best way to win a case in court. They will honestly assess other options, telling you frankly when an out-of-court settlement may ultimately impact your company the least or when a summary judgement in your favor may be available. They will put minimizing court expenses and keeping your good name and bottom line in mind as a priority in order to minimize the effects of the lawsuit on company operations. At MAJ Law, this means staffing cases as leanly as possible to get results without allowing litigation costs to get out of hand.

As our society gets ever more litigious, even small businesses regularly face litigation beyond what you may be prepared to handle. Luckily, there are lawyers who can minimize the damage of these complicated and expensive lawsuits. If your company is facing a lawsuit that sounds like it may be more complex than you expected, it can help to speak to a complex litigation attorney today to find out if you may need special help.

HOW TO PROTECT YOUR BUSINESS ASSETS

As a business owner, you know how important your assets are to your company’s success. That’s why it is vital to protect your business assets the best way possible from day one. Knowing exactly how to protect your business assets most effectively will depend in large part on the unique details that make your company competitive, including your industry, your business model, your IP, and many other aspects of the business. While all of these are important, here’s five things you can do immediately to better protect your business assets.

 

  1. Plan before a claim or data leak ever arises. The first and most important thing you can do to protect your assets is to start now. Once a claim or a leak has happened, it’s too late. This means that you also must regularly update your asset protection plan every time a major change in the status of your business or its assets occurs. Otherwise, you may find these instruments and plans to be lacking.
  2. Apply for as many trademarks, patents, and copyrights as possible. Every company has intellectual property–and in today’s business climate, intellectual property is just as, if not more, important as tangible assets. Keep all IP safe by registering it. At the very least, you’ll have a brand to protect by a trademark.
  3. Use confidentiality agreements and internal security measures to secure trade secrets, data, and business data. Trade secrets from client lists to business practices to operations procedures are often what makes you competitive in your industry. That’s why you must secure these as much as possible. Employee, third-party, and contractor confidentiality agreements will go far. Beyond that, it’s important to invest in other security systems, password protections, encryptions, and security methods to keep these vital business assets secure.
  4. Invest in proper insurance. Too often, small business owners neglect insurance, assuming that disaster won’t happen. When a physical (or digital) asset is compromised, insurance can minimize the impact of its loss. It may seem like an unnecessary expense, but all major company assets should be well-insured.
  5. Use all legal protections that work well for your company’s needs, but keep it simple. There are many other legal protections that your business lawyer can help you leverage to keep business assets safe, but keep in mind that a simple, straightforward plan is best. When the an asset protection plan becomes so convoluted that not even you can understand the basics, it’s easy to create an accidental gap in protection. The best way to avoid unnecessary complexity is to let a single attorney or firm keep track of the big picture, so you are getting a comprehensive approach to asset protection, not a piecemeal approach that will fall apart when you need it.

 

Of course, this alone isn’t enough to fully protect every company’s assets. After all, every business is unique, so your asset protection plan should be just as individualized. Talk to an asset protection lawyer today to see what more you can do to keep your business assets safe.

THIRD-CLASS MEDICAL REFORM WHAT DOES IT MEAN FOR YOU?

 

 

On July 15, 2016, as part of the Budgeting Act to fund the FAA, legislation was passed that included the Pilot’s Bill of Rights II.  This included medical reform for certain private pilots, an alternate to the third-class medical exam.  This legislation was due to the efforts of the AOPA and EAA.  I hope to answer some of those questions I had when I reviewed the legislation, and voice some concerns or unanswered questions.  There are some areas that were expanded to our benefit, but one substantial limitation from the original “driver’s license” medical originally proposed.  Regular exams are still required with your own doctor, every four years.  Further, the FAA still has six months to add their regulations and procedures on how to make this happen.

 

  1. Who Qualifies? An individual holding a driver’s license, who has had a medical certificate issued by an FAA medical examiner within the last ten years.  The most recent application for a medical examination may not have been withdrawn or denied.  It is okay that the medical has expired, as long as it was issued within ten years, and it must not have been revoked or suspended.

 

  1. What Are My Obligations to Qualify? If you do not have a current medical, you must have completed a medical education course (to be developed), and completed a “comprehensive medical examination from a state licensed physician.”  I could not find a definition of a “physician,” and am looking into who might qualify as an appropriate physician.  When your current third-class medical expires, you will need to complete the medical course online, and have your personal physician complete an exam.  Then, every 2 years you will have to complete the online course, and every 4th year, complete the course, printout a sheet and see your doctor.

 

  1. What is the Extent of the Exam Required Every 48 Months? The airmen must complete a checklist, which is still being developed.  You then provide that checklist to your own physician.  The physician must review that checklist with the applicant and perform a “comprehensive medical examination,” in accordance with the checklist.  The full extent of the examination is still to be determined, but it will involve 22 separate items a physician must cover, which concludes with “anything else the physician in his/her medical judgment, considers necessary.”  It also appears a physician can order tests and must discuss all drugs that the applicant might be taking.  Further, the doctor must sign a statement that he certifies you are safe to operate an aircraft.

 

  1. What Are the Limitations? You cannot carry more than five passengers (applicable to flying a six passenger aircraft only).  Must be at or below 18,000 feet, within the U.S. and not exceed 250 knots indicated.  It is not clear whether the aircraft cannot be capable exceeding 250 knots, or if the aircraft is capable of that, you must restrict operations to 250 knots.  But, the new medical can apply without limitation to the number of engines, horsepower or gear type.

 

  1. When Can I Start Relying Upon The New Procedure? It looks like it will be sometime in January 2017, before the new procedure can take effect.  The legislation states that no later than 180 days after the passage of the Bill, the FAA must issue or revise regulations to ensure that you can operate an aircraft under the new standards that would be January 15, 2017.  If your medical expires before that date, you will have to see an AME and obtain a new medical certificate (if you want to continue to fly) or wait until the FAA has issued their regulations procedures.  We will have to wait to see what regulations are developed by the FAA.

 

  1. Can I Still Just Go to an AME? Yes.  Any pilot flying for compensation and hire will need a second-class medical, or for aircraft exceeding the limitations, will need at least a third-class medical.  The prior procedures remain in effect, and this legislation provides an additional way to qualify to act as pilot of command of certain aircraft.  You can always elect to see an AME every two years and obtain a third-class medical.  Further, if you are a new pilot or your last medical was more than ten years ago (before July 15, 2006), you need to get an exam with an AME.

 

  1. Can I Qualify If I Have Had a Special Issuance Medical? Yes.  This may be who benefits the most from the new regulations, especially if you can get a licensed physician to say you are safe to fly.

 

  1. What Issues Do I See As Being Unanswered? The liability of your physician, and whether or not they will be willing to sign the statement.  What about medical programs, such as Kaiser?  Will their doctors be willing or allowed to sign the statements?  Is there language in some insurance policies that might require an AME issued medical certificate?

 

  1. What Are My Obligations After Completing The Examination? You must keep the checklist and document signed by the physician in your logbook and make it available upon request.

 

Hopefully, this will evolve into real reform and not just more ways of doing something, that is as cumbersome as the prior exams with an AME.

THE “NITTIE-GRITTIES” OF THE SONOMA COUNTY BAR ASSOCIATION MANDATORY FEE ARBITRATION PROGRAM

by Michael J. Fish
Chair, SCBA Mandatory Fee Arbitration Committee

 

Occasionally, a client or in propia persona litigant may ask other attorneys, court personnel or family law advisors for information about how to deal with a fee dispute with his or her own attorney. The purpose of this article is to provide a summary of the basics (“NITTIE-GRITTIES”) of the Mandatory Fee Arbitration Fee Arbitration Program in Sonoma County (and California) to enable everyone to correctly identify when a dispute is a proper subject for mandatory fee arbitration and refer parties or themselves to the Sonoma County Bar Association program.

 

What is the Mandatory Fee Arbitration Program?

The Mandatory Fee Arbitration Program (“the Program”) provides an extraordinary opportunity to have a volunteer arbitrator (or panel of arbitrators) resolve attorney fee and cost disputes between clients and attorneys through an informal, low-cost alternative to the court system.  This has tremendous value to both the attorney and client. The arbitrator determines whether the fees and costs charged by the attorney are reasonable for the services provided.  The Program is authorized by Business and Professions Code section 6200 et seq.  Fee arbitration is voluntary for the client, unless the parties previously agreed to arbitrate their disputes with the Program.  Conversely, Fee Arbitration is mandatory for the attorney if the client requests it.  (See Bus. & Prof. Code §6200, subd. (c).)

 

How does the Program work?

Virtually all of the Sonoma County fee arbitrations are conducted through the SCBA’s State Bar approved Mandatory Fee Arbitration Program.  Jurisdiction to hear these matters lies in the county where the legal services were provided, where the attorney maintains an office, or where the client lives.  If our program lacks jurisdiction, or, in a rare occurrence, if either party declares that he or she cannot obtain a fair hearing at the local level, the State Bar Office of Mandatory Fee Arbitration will assume jurisdiction of the matter. Either way, the process is the same as described hereinbelow.

 

Are All Disputes With an Attorney Covered by the Mandatory Fee Arbitration Program?

No.  Fee disputes where the fee or cost to be paid by the client has been determined pursuant to statute or court order are not covered.  (See Bus. & Prof. Code §6200, subd.(b)(3).) For example, court ordered or statutorily set attorney’s fees in bankruptcy or probate cases are not covered by the Program.  Nor are claims for affirmative relief against the attorney for damages or otherwise based upon alleged malpractice or professional misconduct.  (See Bus. & Prof. Code §6200(b)(2).)  However, evidence of professional negligence or misconduct is admissible in the fee arbitration hearing and may have an impact on the reduction of fees. (Bus. & Prof. Code §6203, subd. (a.).)

 

What are the Client’s Rights Before an Attorney May File a Lawsuit to Collect Unpaid Attorney’s Fees?

Attorneys are very often ignorant of the state-mandated prerequisites to collecting fees from their clients. Prior to or at the time of service of summons or claim in an action against the client, or prior to commencing a proceeding  as an alternative to arbitration under the Mandatory Fee Arbitration Program (i.e., contractual arbitration), the attorney shall forward a written notice to the client of his or her right to arbitration under the Program.  The Notice shall be on the State Bar-approved Notice of Client’s Right to Arbitration form and not a letter from the attorney. It must be on the State-approved form, which may be obtained on the SCBA website:  (http://www.sonomacountybar.org/wp-content/uploads/2010/05/Notice-of-Clients-Rights-to-Arb-Revised-Mar-20131.pdf ) or at the SCBA office.  Otherwise, the notice is invalid for Fee Arbitration purposes and the time for the client’s election to avail themselves of the program is extended.  The client’s failure to request fee arbitration within 30 days of his or her receipt (not service) of the Notice is deemed to be a waiver of the right to arbitration under the Program.  (See Bus. & Prof. Code §6201, subd.(a)) and the attorney may then proceed to collection by filing a complaint and proceeding through the judicial process or contractual arbitration.

 

If the attorney has already filed a lawsuit against the client for unpaid fees, the client may elect to either respond to the lawsuit or request fee arbitration.  If the client files a response to the lawsuit, after Notice of the right to arbitration is given, his or her right to arbitrate the fee dispute is deemed waived.  (See Bus. & Prof. Code §6201, subd.(b).)   If the client requests fee arbitration, the lawsuit is automatically stayed.  (Bus. & Prof. Code §6201, subd. (c).) To alert the court, the client should file the appropriate notice of automatic stay where the lawsuit is pending using Judicial Council Form CM-180.  To preserve the right to arbitrate, the client should file a request for arbitration with the SCBA promptly. If the client is unaware of the automatic stay provisions, it would be in good form for the attorney to prepare and file the Notice with the court.

 

What Happens Once Arbitration Is Requested?

To request arbitration, a party submits a completed arbitration request form from the SCBA fee arbitration program and pays any required filing fee.  A telephone call or letter to the program requesting arbitration will not protect the right to arbitration. Most attorneys appreciate the value of the program and, as such, sometimes, in order to keep the matter out of the court system, attorneys initiate the arbitration by paying the filing fee. However, it remains the client’s right to ultimately elect Fee Arbitration unless a provision for such mandatory arbitration is included within the written fee agreement between the attorney and client.

The program will assign a sole arbitrator or a panel of three arbitrators (depending on the amount in dispute) to hear the dispute and determine whether the attorney’s fees and costs were reasonable (or unconscionable in the case of the existence of a valid, enforceable written fee agreement).  If the arbitrator determines that the attorney’s fees were not reasonable (or unconscionable, as the case may be), the client may be awarded a refund of attorney’s fees or costs.  Alternatively, the arbitrator may determine that no refund is owed or that the client owes fees to the attorney.

Depending on the circumstances, the arbitrator will consider a number of factors in making a decision.  These may include: whether there was a valid, enforceable written fee agreement; the reasonable value of the attorney’s services; the amount of time the attorney spent on the case; and whether any misconduct or incompetency by the attorney affected the value of the services.  The arbitrator will decide the matter based only upon the evidence presented at the hearing.  The arbitration award will be served on the parties by the SCBA after the hearing is submitted for decision.

 

Is an Attorney Necessary for a Party in a Fee Arbitration?

Absolutely not. This is the simple beauty and value of the program. Because the program is intended to be a low cost alternative to the court system, parties do not need an attorney to represent them in fee arbitration. While either party may choose to hire an attorney at his or her own expense, the arbitration award cannot include the attorney’s fees incurred for the preparation for, or appearance at the arbitration hearing, regardless of any contractual provision to the contrary.  Any such contractual provision is simply unenforceable by law (See Bus. & Prof. Code §6203, subd. (a).)

 

What if the Client Believes that the Attorney Engaged in Misconduct or Malpractice?

The Mandatory Fee Arbitration Program cannot help recover damages or offset expenses incurred by attorney malpractice or misconduct.

If the arbitrator determines that the attorney’s malpractice or professional misconduct reduced the value of the attorney’s services, the arbitrator can reduce the attorney’s fees accordingly.  However, the arbitrator cannot offset the fee or order the attorney to pay for any damages the attorney’s conduct may have caused. (See Bus. & Prof. Code §6203, subd. (a).)  If there are concerns about attorney malpractice, they should be discussed with an independent attorney.

In addition, a disciplinary complaint may be filed with the State Bar of California by calling the State Bar’s toll-free number: (800) 843-9053.  A copy of the pamphlet “What Can I Do If I Have A Problem With My Lawyer?” is available on the State Bar website (http://www.calbar.ca.gov/Public/Pamphlets/ProblemwithaLawyer.aspx) or by calling the State Bar.

A discipline complaint and a request to arbitrate a fee dispute are separate matters.  Filing a complaint may result in disciplinary action against the attorney; however, the result may or may not require the attorney to pay restitution or unearned fees to the client.

 

Can the Client Still Litigate a Fee Dispute In Court If He or She Is Dissatisfied with the Arbitration Award?

It depends on whether the fee arbitration proceeded as binding or non-binding.  Fee arbitrations are non-binding unless the parties agree in writing to binding arbitration after the dispute arises but prior to the hearing.  This usually occurs by checking the appropriate box requesting “binding arbitration” when the parties request fee arbitration. If the arbitration is binding, the award is final and neither party may request a new trial in court.  A binding award can only be corrected or vacated for very limited reasons (i.e., bias, failure to allow the introduction of evidence, etc.) within a limited period of time as set forth in Code of Civil Procedure section 1285 et seq.  The time period for filing a petition to correct or vacate the award is 100 days from the date of service of the award. (Code. Civ. Proc.§1288.2.)

If the award is non-binding, a party has 30 days from the date of service of the award to file an action in court requesting a trial to reject the award and to request a trial de novo (Bus. & Prof. Code §6204 (c).)  If a trial is not requested within the 30 days by either party, the award automatically becomes binding, with the same effect as if the parties had agreed to binding arbitration.  In small claims court, the parties may use the Judicial Council forms SC-100 and SC-101 to request a trial de novo. Form SC-101 contains useful information on this process.

 

 

How Does the Client Enforce An Arbitration Award Against the Attorney?  

An arbitration award must become final before it is enforceable.  Generally, that means that the 30- day time period to request trial de novo or the 100-day period to petition to vacate or correct the award must pass.  Either party may then request the court to enter a judgment confirming the arbitration award. The client may then enforce the judgment against the judgment debtor (attorney).  (See Code Civ. Proc.§1287.4.)

Something to consider and understand: If the arbitration award rendered is in favor of the client for a refund of attorney’s fees or costs, the client may request the State Bar for assistance in enforcing the award or judgment. (See Bus. & Prof. Code §6203, subd.(d).) The attorney’s reply may consist of a payment proposal, a claim of financial inability to pay or lack of liability.  By statute, the State Bar is authorized to enforce an unpaid award by imposing administrative penalties on the attorney member.  It may also seek a State Bar Court order enrolling the attorney on inactive status until the award is paid. (Ibid.)

 

For further information about the Sonoma County Mandatory Fee Arbitration Program, please contact the address below:

 

Sonoma County Bar Association
Mandatory Fee Arbitration Program
Win Rogers, Legal Program Manager
37 Old Courthouse Sq., Ste. 100
Santa Rosa, CA 95404-4938
(707) 542-1190 ext. 19
win@sonomacountybar.org

 

 

Michael J. Fish is a partner with the firm of Merrill, Arnone & Jones, LLP with locations in Santa Rosa and Novato.  He is a past chair of The State Bar of California Mandatory Fee Arbitration Committee and the Marin County Bar Association Client Relations Committee and the current Chair of the SCBA Mandatory Fee Arbitration Committee.

 

GENDER DISCRIMINATION IN EMPLOYMENT – A NEW FOCUS

 gender discrimination in employmentGender discrimination comes to the forefront this year in confirming that an employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:

(1) The wage differential is based upon one or more of the following factors:

(A) A seniority system.

(B) A merit system.

(C) A system that measures earnings by quantity or quality of production.

(D) A bona fide factor other than sex, such as education, training, or experience – which factor shall not be based on a sex-based difference in compensation, related to the job in question and consistent with a business necessity – which factor will still not apply if the employee can demonstrate that an alternate business practice exists that would serve the same purpose with causing the wage differential.

This more robust approach to determining gender discrimination is to be viewed industry-wide not just within the confines of the individual employer’s workforce.

Additionally, it may be enforced by a complaint filed with the Labor Commissioner’s Department of Labor Standards Enforcement or a private right of action that provides for the recovery of attorney fees, interest on the claim and liquidated damages equal to the wages recovered; together with reinstatement to the position if applicable.

Discrimination also includes discharge and/or being retaliated against in in the terms and conditions of an employee’s employment.

All employers need to take a new look at their workforce where men and women are doing the same job with a view towards avoiding a zealous visit from the Department of Labor Standards Enforcement!

THE “NITTIE-GRITTIES” OF THE MARIN COUNTY BAR ASSOCIATION MANDATORY FEE ARBITRATION PROGRAM

 

by Michael J. Fish

            Occasionally, a client or in propia persona litigant may ask other attorneys, court personnel or family law advisors for information about how to deal with a fee dispute with his or her own attorney. The purpose of this article is to provide a summary of the basics (“NITTIE-GRITTIES”) of the Mandatory Fee Arbitration Fee Arbitration Program in Marin County (and California) to enable everyone to correctly identify when a dispute is a proper subject for mandatory fee arbitration and refer parties or themselves to the Marin County Bar Association program.

 

What is the Mandatory Fee Arbitration Program?

The Mandatory Fee Arbitration Program (“the Program”) provides an extraordinary opportunity to have a volunteer arbitrator (or panel of arbitrators) resolve attorney fee and cost disputes between clients and attorneys through an informal, low-cost alternative to the court system.  This has tremendous value to both the attorney and client. The arbitrator determines whether the fees and costs charged by the attorney are reasonable for the services provided.  The Program is authorized by Business and Professions Code section 6200 et seq.  Fee arbitration is voluntary for the client, unless the parties previously agreed to arbitrate their disputes with the Program.  Conversely, Fee Arbitration is mandatory for the attorney if the client requests it.  (See Bus. & Prof. Code §6200, subd. (c).)

 

How does the Program work?

Virtually all of the Marin County fee arbitrations are conducted through the MCBA’s State Bar approved Mandatory Fee Arbitration Program.  Jurisdiction to hear these matters lies in the county where the legal services were provided, where the attorney maintains an office, or where the client lives.  If our program lacks jurisdiction, or, in a rare occurrence, if either party declares that he or she cannot obtain a fair hearing at the local level, the State Bar Office of Mandatory Fee Arbitration will assume jurisdiction of the matter. Either way, the process is the same as described hereinbelow.

 

Are All Disputes With an Attorney Covered by the Mandatory Fee Arbitration Program?

No.  Fee disputes where the fee or cost to be paid by the client has been determined pursuant to statute or court order are not covered.  (See Bus. & Prof. Code §6200, subd.(b)(3).) For example, court ordered or statutorily set attorney’s fees in bankruptcy or probate cases are not covered by the Program.  Nor are claims for affirmative relief against the attorney for damages or otherwise based upon alleged malpractice or professional misconduct.  (See Bus. & Prof. Code §6200(b)(2).)  However, evidence of professional negligence or misconduct is admissible in the fee arbitration hearing and may have an impact on the reduction of fees. (Bus. & Prof. Code §6203, subd. (a.).)

 

What are the Client’s Rights Before an Attorney May File a Lawsuit to Collect Unpaid Attorney’s Fees?

Attorneys are very often ignorant of the state-mandated prerequisites to collecting fees from their clients. Prior to or at the time of service of summons or claim in an action against the client, or prior to commencing a proceeding  as an alternative to arbitration under the Mandatory Fee Arbitration Program (i.e., contractual arbitration), the attorney shall forward a written notice to the client of his or her right to arbitration under the Program.  The Notice shall be on the State Bar-approved Notice of Client’s Right to Arbitration form and not a letter from the attorney. It must be on the State-approved form, which may be obtained on the MCBA website:  (http://www.marinbar.org/docs/FeeArb_Client_Notice_Arbitrate.pdf) or at the MCBA office.  Otherwise, the notice is invalid for Fee Arbitration purposes and the time for the client’s election to avail themselves of the program is extended.  The client’s failure to request fee arbitration within 30 days of his or her receipt (not service) of the Notice is deemed to be a waiver of the right to arbitration under the Program.  (See Bus. & Prof. Code §6201, subd.(a)) and the attorney may then proceed to collection by filing a complaint and proceeding through the judicial process or contractual arbitration.

If the attorney has already filed a lawsuit against the client for unpaid fees, the client may elect to either respond to the lawsuit or request fee arbitration.  If the client files a response to the lawsuit, after Notice of the right to arbitration is given, his or her right to arbitrate the fee dispute is deemed waived.  (See Bus. & Prof. Code §6201, subd.(b).)   If the client requests fee arbitration, the lawsuit is automatically stayed.  (Bus. & Prof. Code §6201, subd. (c).) To alert the court, the client should file the appropriate notice of automatic stay where the lawsuit is pending using Judicial Council Form CM-180.  To preserve the right to arbitrate, the client should file a request for arbitration with the MCBA promptly. If the client is unaware of the automatic stay provisions, it would be in good form for the attorney to prepare and file the Notice with the court.

 

What Happens Once Arbitration Is Requested?

To request arbitration, a party submits a completed arbitration request form from the MCBA fee arbitration program and pays any required filing fee.  A telephone call or letter to the program requesting arbitration will not protect the right to arbitration. Most attorneys appreciate the value of the program and, as such, sometimes, in order to keep the matter out of the court system, attorneys initiate the arbitration by paying the filing fee. However, it remains the client’s right to ultimately elect Fee Arbitration unless a provision for such mandatory arbitration is included within the written fee agreement between the attorney and client.

The program will assign a sole arbitrator or a panel of three arbitrators (depending on the amount in dispute) to hear the dispute and determine whether the attorney’s fees and costs were reasonable (or unconscionable in the case of the existence of a valid, enforceable written fee agreement).  If the arbitrator determines that the attorney’s fees were not reasonable (or unconscionable, as the case may be), the client may be awarded a refund of attorney’s fees or costs.  Alternatively, the arbitrator may determine that no refund is owed or that the client owes fees to the attorney.

Depending on the circumstances, the arbitrator will consider a number of factors in making a decision.  These may include: whether there was a valid, enforceable written fee agreement; the reasonable value of the attorney’s services; the amount of time the attorney spent on the case; and whether any misconduct or incompetency by the attorney affected the value of the services.  The arbitrator will decide the matter based only upon the evidence presented at the hearing.  The arbitration award will be served on the parties by the MCBA after the hearing is submitted for decision.

 

Is an Attorney Necessary for a Party in a Fee Arbitration?

Absolutely not. This is the simple beauty and value of the program. Because the program is intended to be a low cost alternative to the court system, parties do not need an attorney to represent them in fee arbitration. While either party may choose to hire an attorney at his or her own expense, the arbitration award cannot include the attorney’s fees incurred for the preparation for, or appearance at the arbitration hearing, regardless of any contractual provision to the contrary.  Any such contractual provision is simply unenforceable by law (See Bus. & Prof. Code §6203, subd. (a).)

 

What if the Client Believes that the Attorney Engaged in Misconduct or Malpractice?

The Mandatory Fee Arbitration Program cannot help recover damages or offset expenses incurred by attorney malpractice or misconduct.

If the arbitrator determines that the attorney’s malpractice or professional misconduct reduced the value of the attorney’s services, the arbitrator can reduce the attorney’s fees accordingly.  However, the arbitrator cannot offset the fee or order the attorney to pay for any damages the attorney’s conduct may have caused. (See Bus. & Prof. Code §6203, subd. (a).)  If there are concerns about attorney malpractice, they should be discussed with an independent attorney.

In addition, a disciplinary complaint may be filed with the State Bar of California by calling the State Bar’s toll-free number: (800) 843-9053.  A copy of the pamphlet “What Can I Do If I Have A Problem With My Lawyer?” is available on the State Bar website (http://www.calbar.ca.gov/Public/Pamphlets/ProblemwithaLawyer.aspx) or by calling the State Bar.

A discipline complaint and a request to arbitrate a fee dispute are separate matters.  Filing a complaint may result in disciplinary action against the attorney; however, the result may or may not require the attorney to pay restitution or unearned fees to the client.

 

Can the Client Still Litigate a Fee Dispute In Court If He or She Is Dissatisfied with the Arbitration Award?

It depends on whether the fee arbitration proceeded as binding or non-binding.  Fee arbitrations are non-binding unless the parties agree in writing to binding arbitration after the dispute arises but prior to the hearing.  This usually occurs by checking the appropriate box requesting “binding arbitration” when the parties request fee arbitration. If the arbitration is binding, the award is final and neither party may request a new trial in court.  A binding award can only be corrected or vacated for very limited reasons (i.e., bias, failure to allow the introduction of evidence, etc.) within a limited period of time as set forth in Code of Civil Procedure section 1285 et seq.  The time period for filing a petition to correct or vacate the award is 100 days from the date of service of the award. (Code. Civ. Proc.§1288.2.)

If the award is non-binding, a party has 30 days from the date of service of the award to file an action in court requesting a trial to reject the award and to request a trial de novo (Bus. & Prof. Code §6204 (c).)  If a trial is not requested within the 30 days by either party, the award automatically becomes binding, with the same effect as if the parties had agreed to binding arbitration.  In small claims court, the parties may use the Judicial Council forms SC-100 and SC-101 to request a trial de novo. Form SC-101 contains useful information on this process.

 

 

How Does the Client Enforce An Arbitration Award Against the Attorney?  

An arbitration award must become final before it is enforceable.  Generally, that means that the 30- day time period to request trial de novo or the 100-day period to petition to vacate or correct the award must pass.  Either party may then request the court to enter a judgment confirming the arbitration award. The client may then enforce the judgment against the judgment debtor (attorney).  (See Code Civ. Proc.§1287.4.)

Something to consider and understand: If the arbitration award rendered is in favor of the client for a refund of attorney’s fees or costs, the client may request the State Bar for assistance in enforcing the award or judgment. (See Bus. & Prof. Code §6203, subd.(d).) The attorney’s reply may consist of a payment proposal, a claim of financial inability to pay or lack of liability.  By statute, the State Bar is authorized to enforce an unpaid award by imposing administrative penalties on the attorney member.  It may also seek a State Bar Court order enrolling the attorney on inactive status until the award is paid. (Ibid.)

For further information about the Marin County Mandatory Fee Arbitration Program, please contact the address below:

 

Marin County Bar Association
Mandatory Fee Arbitration Program
101 Lucas Valley Road
San Rafael, CA 94903
(415) 499-1314

 

Lengthy Fee Fight Settles In $6 Million Harass Case

The Supreme Court to ruled that lawyers splitting fees need the client’s written consent.

By Michael Fish

Vice Chair of the State Bar Mandatory Fee Arbitration Committee
And Chair of the MCBA Client Relation’s Committee

 

A ten-year fee fight, which prompted the state Supreme Court to provide strict rules governing attorneys’ fee-sharing agreements, has been settled.

For five years, attorneys Arthur Chambers and Philip Kay litigated over fees earned in a historic sexual harassment case. Their dispute reached the California Supreme Court, which used the case to, among other things, declare that fee-sharing agreements between lawyers are void without written consent from the client. Chambers v. Kay (2002) 29 Cal.4th 142.

The litigation came to a when both parties agreed to settle. Terms were undisclosed.

The Chambers case brought increased focus to fee-sharing agreements by both the state Supreme Court and the state bar.

A review of the fee disputes in Marin County reveals that many attorneys are not aware of the Chambers rule and the perils of fee division agreements, who are practicing on handshake agreements for division of fees.

The case began when Kay asked Chambers for help on a sexual harassment case filed by a legal secretary against the giant law firm Baker & McKenzie.

The two lawyers agreed that Chambers would receive 28 percent of the attorneys’ fees if the case went to trial. During discovery, however, the lawyers disagreed over tactical matters, and Kay dismissed his co-counsel.

At trial, a jury awarded the secretary $6.9 million in punitive damages, which the trial judge knocked down to $3.5 million. The case ultimately generated about $2.5 million in attorneys’ fees. Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128.

Kay reneged on the fee-splitting arrangement, saying Chambers had failed to perform his duties and billed for services improperly. Chambers sued in 1999.

The State Bar’s Rule of Professional Conduct 2-200 mandates that lawyers shall not divide a fee for legal services with another lawyer who is not a partner, associate or shareholder, unless the client consents in writing. In Chambers, the California Supreme Court held that, absent such approval, a fee-splitting agreement is void.

The decision left open the possibility that Chambers could recover for the reasonable value of the work he did on the case, and the two lawyers returned to the trial court to litigate that claim. They were weeks away from their trial date when they reached the settlement.