Category: Life’s Little Legal Problems

Meeting a Lawyer: Four Things to Bring

An initial client meeting with a lawyer is a time of evaluation. You, the potential client, evaluate the lawyer to see if his or her firm will fight for your rights, while the lawyer evaluates your case to see if it is something the firm can help you with.

Here are four things to bring to your initial meeting to help it go well.

1.  Your Story.

The lawyer needs to know what has happened in order to evaluate the potential of your case, but if it takes an hour for you to tell your story, you’re using too much detail. You should prepare a short version of your story, one that gives an overview of the major points in less than 15 minutes. Don’t leave out any important elements, of course, but keep your story to the point. If the lawyer wants you to elaborate about something, he or she will ask.

2.  A Time Line.

In order to help yourself communicate clearly and efficiently, write down a brief time line of what happened. This will become vital information for your lawyer when he or she drafts pleadings, or legal documents that assert your claims. Example:

  • May 24, 2004 – signed lease with tenants
  • August-December 2004 – rent consistently late
  • January 2005 – no rent paid
  • February 1, 2005 – sent letter warning of eviction
  • February 15, 2005 – lockout on property

3.  Documents.

Depending on your type of case, you will need to have certain documents to prove your claims. However, it is generally a good idea to keep records of the following: correspondence, phone logs and voicemail logs, legal documents related to previous cases, medical records, contracts and leases, invoices and checks, bank statements, tax documents, insurance documents, employee manuals, wills, and closing documents. These papers could very well become evidence in your lawsuit. Bring them with you.

4.  Questions.

Naturally, you have questions about the process of retaining a lawyer. Do you really need a lawyer? How much does it cost to hire a lawyer? How long can you expect a lawsuit to last? How can Mosser Law PLLC help you? First, check out our FAQs page, and then come talk to us. You should leave an initial client meeting with all your questions answered.

As always, our blog posts are not legal advice and do not constitute an attorney-client relationship! At the end of the day, there’s no substitute for having a lawyer of your own.

What Is A Series LLC?

By: James C. Mosser

This post is an overview of a longer article entitled “What Is A Series LLC?”

Many Texas practitioners deal with a client’s business formations as part of their everyday business or ancillary to the other matters they work on for clients. Since I am a lawyer at a small law firm, I am in the latter group.

I like the business formation landscape. There is plenty of interesting nuance and choices. This depends on the client and the purpose of the transaction. In certain circumstances, the new darling is the Limited Liability Company (LLC) and especially the Series LLC. The hot debate in Texas amongst those in the know concerns how to treat a Series LLC nonfiling entity.

Black’s Law Dictionary defines “entity” as “[a]n organization or being that possesses separate existence for tax purposes. Examples would be corporations, partnerships, estates and trusts. Entity includes person, estate, trust, governmental unit.”

However, there’s a problem with the supposedly official definition of an entity, which wrongly excludes the Series LLC.

Over the last two years, many Texas attorneys and commentators have discussed the Series LLC and advised that the nonfiling entity (Series) is not a legal entity. However, the Series specifically is described in the Business Organizations Code (BOC), starting at BOC 101.601. A scholarly reading of the BOC will reveal that these commentators are wrong.

Most commentators in Texas have decided that the Series LLC is not an entity. More egregious is that the Secretary of State has assumed the same position based on badly reasoned writings lacking in any legal theory or support. Then, to make matters worse, the State Comptroller has decided that the Secretary of State is the decision maker when it comes to determining what an entity is in the State of Texas, instead of the Texas legislature.

A reading of the state law given to us by the legislature shows the real definition: BOC 1.002, Definitions. At paragraph (18), “domestic entity” means an organization formed under or the internal affairs of which are governed by this code. This definitely includes the Series LLC.

However, because of the unfathomable attitude of the State Comptroller and the Secretary of State, we are left with a group of powerful regulators acting contrary to the Texas Constitution and the laws of Texas as passed by the Texas legislature!

So, who cares? You should care because if you are not a Texas filing entity according to the Comptroller, you pay taxes for the other Series entities that owe taxes, even if your Series does not owe any money.

A last note: Some commentators claim they do not know how a Series LLC will be treated by Texas (if it is foreign) or other non-Series States. I am not positive how it will be treated by Texas. But a properly formed Series LLC should be given the full faith and credit of the sister states old Public Acts and given effect to the “internal affairs doctrine related to the operations of a series limited liability company.” Art. IV, Sec. 1, of the United States Constitution.

Today, this leaves the Texas transactional practitioner in the position of not recommending the formation of a Series LLC in Texas. Maybe the real resolution is just to form multiple LLCs in Texas, as we have been doing for years.

To learn more about the Series LLC in Texas, read James Mosser’s full article, “What Is A Series LLC?”

As always, our blog posts are not legal advice and do not constitute an attorney-client relationship! If you want legal advice, you need to retain a lawyer.

A Short Introduction to Discovery

Discovery is why your civil lawsuit takes so long. It’s the cooperative process of exchanging information between parties in a lawsuit, which can take months or sometimes years. The purpose of discovery is so that a case can be judged fairly on the facts and not due to a “surprise” document that the opposing party withheld until the last minute.

Basically, discovery makes things fair.

Your attorney will request discovery from the opposing party. The opposing party will request discovery from your attorney. Legal rules called the Rules of Civil Procedure govern the timing and delivery of responses. As a client, you might be asked to help answer discovery questions from the other party or to give your attorney some documents to allow the other party to examine.

There are three main types of discovery requests that might require client input: requests for admission, requests for production, and interrogatories.

Requests for Admission. This type of discovery request comes in the form of statements that you must admit or deny. You can also say that you don’t know or don’t have enough information to answer the question. Here are examples:

  1. Admit or deny that you are the managing partner of Local Business.
  2. Admit or deny that Local Business signed a contract with Widget Corporation LLC on May 12, 2008.

Requests for Production. This type of discovery request is primarily for documents. You have probably given your attorney most of the documents related to your case, but the opposing party might ask for more.

  1. Produce all originals of and all copies of all contracts signed by you and Widget Corporation LLC since 2006.
  2. Produce all communication (including letters, emails, texts, and other electronic documents) between you and Widget Corporation LLC concerning contracts since 2006.

Interrogatories. This type of discovery request usually comes in the form of an open-ended request for information, requiring a response beyond a simple yes or no. You might initially be asked to answer these questions and then to approve the final answers your attorney has written.

  1. Describe the safety, storage, and maintenance methods and practices regarding Widgets that you maintained in your regular course of business.
  2. Identify all persons formerly or currently employed by you who have or might have knowledge of Widget safety procedures.

As you can see from these basic examples, discovery can become very involved. Your part is to be as forthright with your attorney as possible and to disclose all relevant information promptly to your attorney. He or she will very likely have additional instructions or requests for you to supplement discovery responses as your lawsuit progresses. If you ever have questions about your lawsuit, ask them!

Remember, folks, at the end of the day there’s no substitute for having a lawyer of your own.

As always, our blog posts are not legal advice and do not constitute an attorney-client relationship!

Steinberg Argues Before Fifth Circuit

On December 3, 2012, Alexis F. Steinberg argued before the United States Court of Appeals for the Fifth Circuit in New Orleans, Louisiana. She presented the crucial question of interpretation regarding the homestead provisions in the Texas Constitution, Article 16, Section 50.

The essential issue under discussion was whether a lien against a homestead made in violation of the Texas Constitution is void (legally unenforceable) or voidable (able to become void but not necessarily so). Steinberg argued that the lien against the Appellants’ property was not voidable, but rather void from the start (“void ab initio“).

This “void not voidable” issue was first raised in relation to Mosser Law’s clients in the District Court, where James C. Mosser, who tried this case in 2011, uncovered and explored the nuances of the homestead provisions in his pleadings and motions. After appealing the Court’s judgment, Mosser mentored and advised Steinberg as she prepared to bring her oral argument before the Fifth Circuit.

Mosser and Steinberg are aware that this issue could become persuasive for Texas courts and Texas citizens with void property liens. As Steinberg wrote in Mosser Law’s Brief for Appellants:

In the recent case Smith v. JPMorgan Chase Bank, the “court engaged in a detailed analysis of the plain language of the Texas Constitution; the nature of liens which are void from inception instead of merely ‘voidable’; and the Texas Constitution’s requirement of homeowner’s demand and lender’s opportunity to cure before a forfeiture. The Smith analysis should be applied here. The Priesters’ lien was void ab initio, not voidable.”

Because the lien was constitutionally void, the District Court should not have dismissed the case. This void versus voidable issue is material to Texas homeowners and to the legal interpretation of the state’s Constitution.  If the liens are considered voidable, a four-year statute of limitations applies to a homeowner’s claims.  However, if the liens are properly interpreted as void, a homeowner may bring a claim against a lender whenever the homeowner realizes the liens on his or her property violated the Texas Constitution.

Drawing on the plain-language interpretation of the Texas Constitution and pertinent case law, Steinberg presented her argument on this matter cogently and eloquently.

If you have Windows Media Player, you can listen to Steinberg’s argument here or by searching the Fifth’s Circuit’s Oral Argument Recordings Page for “Alexis Steinberg.”

Do you have an appeal? Find out by contacting Mosser Law.

Statute of Limitations: The Expiration Date on Your Lawsuit

By:  Kelly R. Ledbetter

Let’s say you signed a contract to invest in a business, but the business was never launched and now they refuse to return your money. Can you sue? It all depends on how long it’s been.

The statute of limitations is the time limit you have to file a lawsuit. This time limit varies widely both among states and among reasons for filing (“causes of action” or claims). For instance, in Texas, the statute of limitations for breach of written contracts is four years, whereas the statute of limitations for property damage is only two years. In another state, those numbers will probably be completely different. Some causes of action even have periods as short as a one-year limitation. And of course, there can be a lot of caveats and exceptions—like claims that require notice to the defendant or to a government agency, or a “timeout” on the statute of limitations because the injury was undiscoverable.

Information about statutes of limitations in Texas can be found in Chapter 16 of the Texas Civil Practice and Remedies Code, available through the Texas Constitution and Statutes home page. Here’s an example of causes of action that have a four-year statute of limitations:

FOUR-YEAR LIMITATIONS PERIOD. (a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues: (1) specific performance of a contract for the conveyance of real property; (2) penalty or damages on the penal clause of a bond to convey real property; (3) debt; (4) fraud; or (5) breach of fiduciary duty. (b) A person must bring suit on the bond of an executor, administrator, or guardian not later than four years after the day of the death, resignation, removal, or discharge of the executor, administrator, or guardian. (c) A person must bring suit against his partner for a settlement of partnership accounts, and must bring an action on an open or stated account, or on a mutual and current account concerning the trade of merchandise between merchants or their agents or factors, not later than four years after the day that the cause of action accrues. For purposes of this subsection, the cause of action accrues on the day that the dealings in which the parties were interested together cease.

Confusing? A bit. This is why consulting an attorney even before you’re certain whether you have a case is important. Someone trained in the law, who is familiar with all the ins and outs of the statutes of limitations in your state, will readily be able to say whether your cause of action may has already expired.

Below are some helpful links with more information about statutes of limitations. These sites provide helpful information, but they have not been verified and they cannot take the place of the legal advice you can receive only from an attorney.

Read a full definition of “statute of limitations”  here.

NOLO, a free legal information website, offers a handy chart of states, causes of action, and statutes of limitations.

Cornell University Law School’s Legal Information Institute (LII) has a narrative example of a statute of limitations.

Wikipedia contains an overview and further links to statutes of limitations and related topics.

 

Remember folks, at the end of the day there’s no substitute for having a lawyer of your own.

And as always, our blog postings are not legal advice, nor do they constitute an attorney-client relationship!

Be Careful! Commercial Landlords Should Exercise Care When Tenants Don’t Pay…

By:  Benjamin Tenenholtz

What happens when commercial tenants don’t pay their rent?  Commercial landlords, much like residential landlords, have the right to lock a tenant out of the subject property. However, landlords must be careful to follow very specific rules outlined in the Texas Property Code, lest they subject themselves to a suit for unlawful lockout and reentry onto the property.

1. Make sure your tenant’s rent is delinquent

First, the landlord should make sure that the tenant is actually late in paying all, or at least part, of the rent. This sounds simple, but it is good practice to ensure that your accounting has been done accurately, and there are no outstanding credits or other billing issues.

2. Post notice of lockout

Next, the landlord should post a written notice on the tenant’s front door stating the name and address or phone number of the individual or company from which the tenant can obtain a new key. The new key is required to be provided only during the tenant’s regular business hours, and then ONLY if the tenant pays all delinquent rent.  This is unique to a commercial tenancy, as a residential tenant has a right to reenter regardless of whether he or she has paid the rent.

3. Lockout the debtor tenant

It is important to note that, unlike with residential rental property, the landlord of a commercial property does not need to post advanced notice before locking out the commercial tenant. The posting of notice and the lockout can happen simultaneously.  It should also be noted that to the extent that any provisions in the commercial lease conflict with the law contained in Texas Property Code 93.002, the lease’s language will supersede the Property Code.

4. Take steps to secure payment of delinquent rent

Once a landlord has successfully locked out a non-paying tenant, she can then petition for, and attempt to foreclose upon, a building landlord’s lien. The Property Code is designed to ensure that a landlord’s lien gets paid before other creditors of the debtor tenant. The landlord can also file an application for a distress warrant. A distress warrant allows a landlord to seize some of the debtor tenant’s property (subject to posting a bond) in order to ensure that her landlord’s lien is preserved until it can be foreclosed upon.

5. Be careful!

If you are a commercial landlord or tenant and are unsure of the steps you should take when dealing with a commercial lockout, consult with an attorney. Violation of the rules contained in the Texas Property Code can subject a commercial landlord to fines, attorney’s fees (both for herself and for the wrongfully locked out tenant), and court costs.

Remember folks, at the end of the day there’s no substitute for having a lawyer of your own.

And as always, our blog postings are not legal advice, nor do they constitute an attorney-client relationship!

Helping Clients Help Themselves

While attorneys will write almost all documents related to a client’s case, a client may be asked to take an active role in helping to draft an affidavit.

An affidavit is a written, factual statement signed by the person making it (the “affiant”) and sworn to be true before a notary. Affidavits have a number of purposes in litigation; they may be used to provide testimony when a live witness is not needed, they can demonstrate that a document is a true and correct copy of an original, and they can provide a lawyer with narrative about the facts of the case and the reason for the suit–the story of what happened. An affidavit can be attached to other documents filed with the court as evidence to strengthen your case, or it can become a helpful reference in your attorney’s files.

When utilizing an affidavit as the narrative for the case, the attorney might ask the client to use his or her own written words to describe who, what, when, where, how, and why–any information about the case. Remember that a specific, detailed piece of writing is typically more informative and persuasive than a vague one, so be sure to include dates, names, facts, and details.

Vague: And then the van rear-ended me and pushed me forward into the other car.

Specific: Even though I pulled my car as far onto the right-hand shoulder as possible, the dark blue minivan still clipped my back left wheel and bumper with enough force to propel my vehicle forward ten feet into the rear bumper of the red sedan in front of me.

Vague: He told me he didn’t get the check and I had to move out by the end of the month.

Specific: On May 3, 2012, Mr. Landlord told me in a telephone call that he had not received Check #1001 in the amount of $900.00 for my May rent and that therefore I had to move out of 202 North Street before May 31.

The attorney will then render the client’s testimony into the form and format of an affidavit, including an introductory paragraph declaring that the affiant is competent to testify, has personal knowledge of the facts, and swears that the facts are true. It is important never to invent or exaggerate information in an affidavit, yet it is equally important to include all the relevant information. The final document must be as factually accurate as possible.  Here is a sample affidavit, incorporating this advice.

After the client reviews the draft of the affidavit, perhaps contributing more knowledge, he or she will sign the document in person in front of a notary, who will notarize the document, making it a valid affidavit. It is critical that if the attorney has misquoted the client, or summarized something incorrectly, that the client speak up and correct the affidavit.

What does this mean for you?

If you are considering retaining an attorney, write down a narrative of what happened to you. This will not only help you remember and discuss your situation with precision, but it will also help your attorney know what questions to ask to elicit the best details for your affidavit.  When hiring a lawyer, make sure you find someone who is taking the time and effort to understand your story.  After a jury verdict is the wrong time to realize that your lawyer doesn’t understand your case!

Locked out? Late on rent payments? Out of Luck? Maybe not…

By:  Benjamin M. Tenenholtz

Almost everyone has months where money is tight. And as you may or may not know, if you’re late on rent payments for your rental home or apartment, you may find yourself locked out of your property. While your landlord has a right to lock you out if you don’t pay your rent, he must follow very specific rules in the Texas Property Code in order to lock out a tenant.

1.  Warning of the Lockout

If your landlord locks you out of your residence, he must post a notice on your front door which provides you with a 24-hour on-site location to access your new key, or a 24-hour phone number you can call to have a new key delivered within two hours. The landlord’s notice must also tell you the amount of late rent/charges and he must provide you a new key, at any hour, REGARDLESS of whether or not you pay the delinquent rent. It is important to know that your landlord cannot lock you out on a day on which a designated person is not available, or the on-site management office is not open, for you to pay the delinquent rent.

2.   Notice of Lockout and Legal Niceties

Additionally, your landlord cannot lock you out of your residence at all unless your lease agreement tells you that you can be locked out for failing to pay rent, and you are actually delinquent in paying your rent. In addition to these requirements, the landlord is required to provide a warning notice either: five days before the lockout by local mail, or three days before the lockout by hand-delivery or by posting on your main entry door. This notice should tell you the earliest date you may be locked out, the amount you must pay to prevent the lockout, the contact information for the individual or management office to discuss your rent, and tell you in underlined or bold print that you have a right to get a new key to your residence at any hour, REGARDLESS of whether you pay the delinquent rent.

3.  Remedy for Wrongful Lockout

If your landlord violates any of these laws, you have substantial rights to which you are entitled! You may either regain entry to your residence, or terminate the lease. In addition to these rights, you are entitled to recover a penalty from the landlord of $1,000, one month’s rent, actual damages, court costs, and reasonable attorney’s fees (minus the amount of delinquent rent). Additionally, if your landlord fails to give you a key after you request it, you may be entitled to another month’s rent.

Maybe most important to wrongfully locked out tenants… Your lease cannot waive any of these rights!

So in summary, remember these things:

  1. Warning of Lockout–it should come ahead of time in the mail or on your door or by personal delivery and include delinquent amounts and contact information
  2. Notice of Lockout–Posted on the door to the residence, including the delinquent rent amount but more importantly advising you that a key is available to you at any time, within 2 hours, regardless of your ability to pay the delinquent amounts
  3. Vindicating your Rights–Lockouts not done in strict accordance with the property code are subject to stiff civil penalties.  A lawyer can help you recover the damages and fines your landlord might owe you, but you probably still have to pay your rent.

 

Take my word for it…Or don’t.

It sounds like the beginning of a joke:  One lawyer says to the opposing lawyer, “take my word for it…” But it’s actually the beginning of an unenforceable agreement.  And not because lawyers are untrustworthy!

To be enforceable, any agreement about any matter in a pending lawsuit must (generally) be in (1) in writing, (2) signed, and (3) filed with the court.  An agreement meeting those three requirements is referred to by lawyers as a “Rule 11” or a “Rule 11 Agreement” after Texas Rule of Civil Procedure 11.  The text of the rule reads:

Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.

Above I wrote that it generally has to be in writing.  But from the text you can see that an agreement made in open court and entered of record is also enforceable as a Rule 11 Agreement.  What’s even more useful is that some courts will enforce agreements made on the record at a deposition, and later filed with the court!  So if you can get the other party to agree to terms of a settlement—or even agree to provide you with additional documents—on the record during a deposition, that may be enforceable as a Rule 11.

And here’s another wrinkle:  let’s say you sign what you believe to be a Rule 11 Agreement, but it’s about a suit that you haven’t filed yet.  That means it’s not really a Rule 11, because the suit isn’t pending.  Remember, the text of the rule only relates to pending suits—what then?  Even if you don’t have a valid Rule 11, you may still have a valid contract.  Of course, contracts are also enforceable by a court, but you’ll probably have to file a lawsuit, first.

So moral of the story?  Put everything in writing!  It may not seem important, but you never know when someone will conveniently forget what they’ve agreed to do.

Do you know your local rules?

You might know that civil lawsuits in Texas are governed by a set of rules, the Texas Rules of Civil Procedure, which are promulgated by the Texas Supreme Court.  Much like the federal rules, the Texas Rules (TRCP) cannot “abridge, enlarge, or modify the substantive rights of a litigant.”  But did you know that every court in Texas can also draft its own rules?

Known as “local rules” a court wishing to adopt its own rules must file copies of its local rules with the Supreme Court for approval, and those rules must be published at least 30 days before they are effective, in accordance with TRCP 3a(3) and (4).  Attorneys and parties operating within a court are charged with knowing its local rules.  Failing to familiarize yourself with the local rules can be damaging.

Consider one of the Dallas County District Courts’ local rules

2.03. JUDGMENTS AND DISMISSAL ORDERS
Within 30 days after the Court has announced a verdict or judgment or the Court receives a written announcement of settlement from either party or from a mediator, counsel shall submit to the Court a proposed judgment or dismissal order, unless ordered otherwise. Failure to so furnish the Court with such a proposed judgment or dismissal order will be interpreted to mean that counsel wish the Court to enter an Order of Dismissal with prejudice with costs taxed at the Judge’s discretion. (Emphasis supplied).

That’s a pretty hefty rule.  If the parties notify the court they are settling, but don’t furnish a proposed judgment of order in a timely fashion, the court will dismiss the action with prejudice!  In other words, the plaintiff won’t get to file another lawsuit, and his or her only remedy is on appeal.  This is the sort of trap that could be fatal to a pro se plaintiff, or an unwary attorney.

Moral of the story:  read the local rules!