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June 19, 2015
May 29, 2015
April 16, 2015
April 07, 2015
April 01, 2015
March 20, 2015
What a jury doesn't hear
An American judge talking to a lawyer. (Photo credit: Wikipedia)
After every trial, I try to talk with the individual jurors who heard my case. It helps me as a trial lawyer determine what strategy and tactics worked and what didn’t. I will also ask them what information they wanted but never got and what questions they had that never got answered. Sometimes they even tell me about the assumptions they made on issues even if no evidence was presented in trial. They almost always want to know what the attorneys and the judge were whispering about at the bench where they couldn’t hear.
It seems somewhat counterintuitive, especially in the age of instant, on-line information, but literally over two hundred years of statutes, rules and judge’s decisions have tried to limit the information presented to a jury for their decision in a trial. The main question is what the law has decided is relevant to a case. The North Carolina rules of evidence say that anything is relevant if it makes any fact of consequence more probable or less probable than without that fact. Simple right? Sometimes it is and a non-lawyer can easily see that. For example, where a car wreck happened on a sunny day without a cloud in the sky, it is probably not relevant that the defendant car’s windshield wiper blades were old. However, from the simple idea of relevance comes a host of fact-specific things that are relevant or not relevant for a trial that might not be apparent to a non-lawyer. For example, a non-lawyer might think that the fact that in our car wreck that the defendant driver had one or two prior car wrecks makes it more probable that the car wreck at issue in the trial was the defendant’s fault. Honestly, that non-lawyer might even be right (I certainly think prior acts of my kids are relevant when I am trying to figure out how the cookie jar got broken). However, the law has decided that in most cases, if a person did something before, it doesn’t mean they did it this time. Another example is insurance. If a juror knows that a particular injured party has insurance, they might be more likely to not make the at fault party pay as much. On the other hand, they might award more damages since they know an insurance company is paying for it and not out of the pocket of a sympathetic defendant. A lot of the conversations and arguments between attorneys and the judge and a lot of the objections at trial go to this underlying issue of relevance. Trials are very fact specific, so at almost every trial there is a small wrinkle in the law where the attorneys can argue whether a fact is relevant or not or if a fact can come in or not.
It is important to only decide a case as a juror based on the evidence you hear. The judge and lawyers are not just making up what is important and what is not. They are relying on literally over two hundred years of fine-tuning the law and the jury system. If the judge makes a mistake, or some relevant information was left out for no sound reason, the case can be appealed and the Court of Appeals and Supreme Court can decide it was the wrong thing to do. That opinion will be written down and the next trial with a similar issue will have more guidance on the correct course of action.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.
February 10, 2015
Ask a Lawyer Day
Last week I participated in the Ask a Lawyer Day program in Wilmington NC. This is similar to Justice4All program where local attorneys field legal questions for free from the general public. Oftentimes it involves explanations of legal issues or concepts, similar to what I do sometimes in this blog. Other times it is to try and get people to the proper agency or legal aid office that could help them. Some of the people I talked with included the following:
1. A man who owned land that was claimed by another person. This person was coming on property and had even started tearing down some old barns on the property. The man showed me letters he had sent to the other person, and the deeds and maps that showed his ownership in the land. He had not received any information showing that that other person owned the land. Since the letter had been ignored, I told him that he would have to file a lawsuit for trespass to keep the other person from coming on the property and an action to clear title. He was allowed to file such a suit himself, but I recommended he hire a lawyer to do it.
2. A lady whose grandson was being moved to a different high school because his parents had moved. He had some disciplinary problems and the ROTC program at his current school was helping. I gave her the information to contact the local school board and suggested that she enlist his therapist to help in her hardship claim.
3. A man whose estranged brother owned farm equipment on his property. He was concerned because people were stealing and vandalizing the farm equipment. I told him that just because it was on his property, he did not have responsibility to take care of his brother’s equipment and to write him a letter and tell him so.
4. Another man whose foot was badly burned when using a riding lawnmower. The man was wearing flip-flops but said that the manual did not give any warning about footware and his friend who also used the mower had the sole of his sneaker melt. We talked about negligence and contributory negligence and I recommended he consult with a personal injury attorney.
5. A man whose friend in Texas had some child custody issues. I told him he first had to determine if any action had already been started in Texas. If it had, he would need to get an attorney there, even though the child was now in North Carolina. If there had not been an action, he would be able to file an action in North Carolina and would not have to move here to do so. I recommended he consult with a family law attorney.
6. A lady who was concerned about hunters on a neighboring property. Legally, in that area of the county, there were no laws preventing hunting in that area, even though it was close to a neighborhood where many children lived. I referred her to her county commissioners to see what could be done.
I spent about 30 minutes with each individual and felt that I was able to answer everybody’s questions. Another ask a lawyer event is coming up on March 2, 2015 throughout North Carolina. If you have a question for a lawyer, please feel free to call.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.
February 03, 2015
January 27, 2015
January 21, 2015
January 09, 2015
HOA v. The Doctor
English: The current TARDIS seen at BBC TV Centre and taken by me Zir (talk) 23:04, 20 January 2009 (UTC) Please credit © zir.com if used outside of Wikipedia Category:Doctor Who images (Photo credit: Wikipedia)
Homeowner Associations exist to manage planned communities. Part of that duty is to enforce the restrictive covenants of the community. One Florida Homeowner received a notice of a violation from his HOA for his time machine. Specifically a life-sized replica of The TARDIS from Doctor Who which had been used in the couple’s themed wedding was placed in the driveway of their home. While I have never seen a restrictive covenant that prohibits the placement of space and/or time vehicles on lots, frequently there are restrictions regarding “structures” built on a lot. Sometimes those are specific such as no mobile homes or have specific parameters, such as no fences beyond the front corner of the house. Other times they are more general and even vague requiring the structure “fit into the general appearance and scheme of the community.” Often, there is an architectural committee who has the job of approving or rejecting proposed structures. Even when a HOA board refuses to act on a violation, any other owner of a lot in the community has the ability to bring a lawsuit based on the restrictive covenants for any structure in violation.
The homeowner/putative Time Lord seems to have a good sense of humor about the issue and it seems that the violation can easily be solved by moving the TARDIS to the back yard. Still, if they choose to fight, I envision a Miracle on 34th St. type defense to prove the Doctor is real and not subject to the limitations on structures as their blue box is not a structure, but a vehicle.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.
December 18, 2014
November 21, 2014
November 07, 2014
Aggravation
Only seldom do I have a personal injury case where there was not a doctor or chiropractic visit sometime in the months or years prior to the event sparking the lawsuit. An injured plaintiff can only recover for damages that were actually caused by the defendant’s negligence. If the defendant can prove that a plaintiff’s injuries pre-existed his negligence, it lowers the amount of damages that he has to pay if the jury finds him at fault. In extreme cases, the jury can find the defendant was negligent, but caused nominal damages such as $1. The best argument by a plaintiff is that the new injury is not connected in any way with a prior injury or condition. Even if the injury is in the same location or the same condition, the law allows a plaintiff to recover for the aggravation or the exacerbation of the pre-existing injury. So if you had a small hernia, one that did not require surgery, just monitoring by a doctor, but after the defendant hit you with his car, the hernia gets larger and requires surgery, the jury can award an amount of damages based on how much it got worse.
I recently had this issue in a trial, and the typical, pattern jury instructions from North Carolina did not seem to address this issue. I did my research and drafted some additions to the appropriate pattern instructions. A copy of those is set forth below.
Proximate Cause - Definition; Multiple Causes
The plaintiff not only has the burden of proving negligence, but also that such negligence was a proximate cause of the [injury] [damage].
Proximate cause is a cause which in a natural and continuous sequence produces a person's [injury] [damage], and is a cause which a reasonable and prudent person could have foreseen would probably produce such [injury] [damage] or some similar injurious result.
An injured person is entitled to recover all damages proximately caused by the defendant's negligence. When his injuries are aggravated or activated by a pre-existing physical or mental condition, defendant is liable to the extent that his wrongful act proximately and naturally aggravated or activated plaintiff's condition. Potts v. Howser, 274 N.C. 49, 54, 161 S.E.2d 737, 742 (1968).
There may be more than one proximate cause of [an injury] [damage]. Therefore, the plaintiff need not prove that the defendant's negligence was the sole proximate cause of the [injury] [damage]. The plaintiff must prove, by the greater weight of the evidence, only that the defendant's negligence was a proximate cause.
Proximate Cause - Peculiar Susceptibility
In deciding whether the [injury to the plaintiff] [death of the decedent] was a reasonably foreseeable consequence of the defendant's negligence, you must determine whether such negligent conduct, under the same or similar circumstances, could reasonably have been expected to [injure] [cause the death of] a person of ordinary [physical] [mental] condition. If so, the harmful consequences resulting from the defendant's negligence such as the aggravation of a pre-existing condition (Smith v. Buckhram, 372 S.E.2d 90, 94 (1988; Potts v. Howser, 274 N.C. 49, 54, 161 S.E.2d 737, 742 (1968) would be reasonably foreseeable and, therefore, would be a proximate cause of the [plaintiff's injury] [decedent's death]. If not, the harmful consequences resulting from the defendant's negligence would not be reasonably foreseeable and, therefore, would not be a proximate cause of the [plaintiff's injury] [decedent's death].
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.
October 30, 2014
October 06, 2014
September 18, 2014
August 27, 2014
August 08, 2014
July 31, 2014
July 18, 2014
Courts curb power of HOAs to amend Declarations
I’ve written before about amending the Declarations for a homeowner association. A new case handed down this month by the North Carolina Court of Appeals could make it harder for an HOA to amend the Declarations to their liking. The Linville subdivision in north Raleigh began construction in 2003. As an incentive to builders to construct homes in the planned community, the Declarations allowed a builder to pay only 25% of the annual assessments. When the housing boom ended, several builders were unable to sell the properties they have built but continued to pay reduced assessments pursuant to the Declarations. In 2011, The Linville Owners Association, Inc., passed an amendment to the Declarations following the amendment procedures in their documents and the statutes, ending the special status of the builders and requiring them to pay the same amount of assessments as all other homeowners. The builders refused to pay, and the North Carolina Court of Appeals eventually heard the issue.
The Court of Appeals found that the original assessments were included in the Declarations to induce and encourage builders to build in the community. To change that, even by following the amendment procedures in the Declarations, went against the original intent and purposes of the Declarations. The Court therefore found the amendments unreasonable, invalid and unenforceable.
I’ve only seen this rule applied before where an HOA didn’t have assessment power in the original declarations and then added that power in an amendment. This Court of Appeals ruling makes even an amendment of the amounts of assessments set in the Declarations to be called into question. When considering an amendment, HOAs should determine what their reasons are for the amendment, why it conforms and assists in the original purposes of the declarations, and why it does not unreasonably divert from those purposes.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.
July 10, 2014
June 06, 2014
June 02, 2014
Trade Secrets
The law in North Carolina tends to support the ability of people to work for who they want, and when they want. In most cases, with at-will employment, an employee can leave a job whenever they want to work for another company who may provide them more pay or benefits. On the other hand, the law recognizes that businesses have legitimate interests that could limit the rights of former employees. One way a business can narrowly protect its interest is through the non-compete contract as I’ve written about before. Another way the law protects a corporation’s business is provide a fiduciary duty that its owners and members owe to the corporation. Still another way when a non-compete clause and fiduciary duty don’t protect a business is the trade secrets statute.
Chapter 66, Article 24 of the North Carolina statutes is the Trade Secrets Protection Act. This law allows a business to sue in civil courts for the misappropriation of a trade secret for actual monetary damages and a court order returning or stopping the use of the trade secrets. Depending on how egregious the conduct, punitive (punishment) damages and attorney fees are also available. To “misappropriate” a trade secret simply means to take it or communicate it without being authorized to do so. If the trade secret was arrived at by independent development or reverse engineering, there is no misappropriation. Proving that something is a trade secret is a little bit trickier. Under the statute, a trade secret is any business or technical information that derives independent value from not being generally known or easily created. The statute includes as possible types of trade secrets formulas, patterns, programs, devices, compilations of information, methods, techniques, and processes. To illustrate, a list of customer names and addresses is not a trade secret since such a list can usually be readily created. However, a customer list that includes specific pricing could very well constitute a trade secret. In addition to providing value from its being not generally known, a “trade secret” must be the subject of some protection from the company to maintain it as a secret. It is logical that if you do not care enough about certain information, that you take no steps to keep it secret, it probably isn’t a trade secret.
It’s a good idea to include in any employment contract some specific definitions of what you consider your business’s trade secrets, to make any possible litigation down the road be as streamlined and as inexpensive as possible.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
May 20, 2014
May 02, 2014
Amending your HOA's Declarations
In North Carolina, the Declarations (also called restrictive covenants) are the main governing document of a homeowner’s association. While the general statutes of the state remain the ultimate authority, they give a large amount of leeway to a planned community to craft its own governing documents. Usually the Declarations are pulled from a boilerplate set and filed by the developer at the beginning of a project. As such, in a mature HOA, the Declarations may be inconsistent or have parts that are simply undesirable for the members. In that case, the declarations can be amended and changed.
Under Chapter 47C for Condominiums and 47F for other planned communities, an amendment to the Declarations may be amended only by a yes vote of 67% of the votes of the members. The declarations can also require a greater percentage for an amendment, but the percentage can’t be lower than 67%.
Here’s how to make changes to CC&Rs.
1. Talk to your neighbors first. Obtaining a 67% majority of all the votes of the association is hard, so strong membership support is essential. Usually apathy rather than active opposition is the problem with amending the declarations.
2. Avoid controversial amendments such as those changing assessments so that some members pay more or less assessments or those requiring unpopular use restrictions.
3. Send out the exact text of the amendment. If there are relatively few changes, help the members by sending two versions — a “redlined” one showing what is being removed and added, and another version showing the exact text. If your association is pursuing a complete rewrite of your Declarations, a “redlined” version will be too complicated. Instead, consider sending along a summary or highlights of what will be new or different.
4. While trying to amend Declarations, consider if bylaw amendments are also needed. Bylaws generally deal with elections and removal of board members and officers. The process for amending the bylaws should be contained in the bylaws themselves. While the statutes regarding planned communities do not require a minimum percentage, the statutes regarding non-profit corporations, which is how most HOAs are set up, do. Under Ch. 55A, the bylaws can be amended by 2/3s of the total votes of an association or a majority of the votes actually cast at a meeting.
5. If homeowners want to express their disagreement, let them. The board should already have expressed why the amendment should be passed, in HOA meetings or newsletters. If there is a lot of disagreement or misunderstanding, the board should slow down and work more to build a consensus.
6. Have an attorney prepare the amendment. Declarations and bylaws are legal documents. Sometimes, amendments can unknowingly violate the law or contradict another part of the Declarations. Have your attorney involved very early in the amendment process to avoid wasted effort. Explain to your lawyer what you want and let him draft the language to make that happen.
7. Make sure your amendment is recorded. Once it is filed with your county’s register of deeds, all owners and future owners are deemed by law to have notification of the amendment and are therefore bound by it.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
April 15, 2014
Suing the School
Our kids spend thousands of hours in the public schools of North Carolina. Not only are they on school grounds for classroom work, they participate in a vast amount of after school activities such as cheerleading, baseball, football and other sports. Just like a store or a private residence, negligence can occur from the actions or inactions of staff, teachers, coaches, or administration at a public school. The claims against a school or its employees would be the same against any other landowner or any other person. Depending on the facts, this could be a claim that the teacher or coach negligently acted or failed to act and caused an injury. It could also mean that there was a hidden or concealed condition that the school knew about and the injured person did not, and the school failed to correct or warn and caused injury. The school would have the same defenses that a private person or landowner would have, primarily any contributory negligence on the part of the injured person, which would bar his recovery. This defense is mitigated somewhat as a child 7 and under cannot be found to be contributorily negligent and a child between 7 and 14 will be compared to a reasonable 7-14 year old, rather than a reasonable adult.
The main defense a public school will have that a private individual or landowner will not have, is the defense of sovereign immunity. The general rule in North Carolina is that you cannot sue the State or its lesser government entities such as towns and school boards. Therefore, under the general rule, even if you have negligence, you cannot sue a public school or school board for your injuries. However, there are some exceptions. First, the activity must be a traditional government activity. Any classroom activity is a traditional government activity and would be protected by sovereign immunity. The courts have also found school basketball games and after-school daycare are also protected under sovereign immunity. Only where the activity is not a traditional activity is sovereign immunity not a defense, as when a city runs a concert arena or rents out low-income housing.
The second exception occurs when North Carolina allows itself or its lesser governmental entities to be sued. Suits against the state or its agencies can proceed before the Industrial Commission rather than the state courts. School bus accidents can also proceed in this manner. Also, the state has provided by statute that if a governmental entity entitled to sovereign immunity purchases liability insurance, it has waived any sovereign immunity right up to the amount of that insurance. Historically, this has been the route to defeat sovereign immunity arguments against schools. However, in recent years several counties in North Carolina, including my home county New Hanover, have not purchased insurance but rather participate in the North Carolina School Board Trust. While it appears that the trust would have the same function as true liability insurance, the North Carolina Supreme Court has determined that a school board that participates in the Trust does not waive sovereign immunity.
Even where sovereign immunity exists, some counties will allow for a small amount of recovery for medical bills of the injured student that are not paid by the student’s health insurance. In New Hanover County, this amount is $2500.
Finally, even where the school and school board is protected by sovereign immunity, that protection does not extend to the individual teachers, coaches or staff that were negligent. While an individual teacher likely would not have personal assets to pay for a serious injury to a student, the teacher may have a personal policy of insurance they have privately purchased or obtained through membership with a teacher union or organization. Also, beginning in 2012, the state has paid for an “excess educator’s professional liability policy” for personal liability for teachers in their professional capacity (probably to remove the impetus for the teachers to join a union). Although the policy says “excess,” if the school board has paid nothing voluntarily, that excess insurance should be primary and pay from the first dollar spent, or at least after the school board has paid the $2500.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
April 09, 2014
Indemnity, Exculpatory and Hold Harmless
Cropped screenshot of title from the trailer for the film Double Indemnity (Photo credit: Wikipedia)
Has this ever happened to you? You are getting ready to race go-karts, rent a truck, scuba dive, or lease a storage unit and the owner hands you a document to sign. Maybe you read over it, maybe you just skim the front page for what you are getting and how much you are paying. If you pay a little more attention, maybe you notice it says you are responsible for any property damage or personal injury and you “hold harmless” the owner. Most likely, you have not truly considered what the possible consequences are of your signature.
Parts of a contract or agreement that take any responsibility from the owner to you are known in the law as indemnity clauses. If you wreck the owner’s go-kart, then you’ll have to pay for it. If you ram your go-kart and hurt somebody else on the track, you and not the owner of the go-karts will pay for it. Most people would agree with that and think it fair, but frequently those clauses try to go far beyond that. For example, I have represented a client who was renting an item from its owner. The owner did not perform inspections on the item as he was supposed to and the item was defective. Not knowing it was defective, my client was severely injured (paralyzed) when it collapsed on him. My client had signed a contract and within that contract was an indemnity clause. However, not only did my client agree that he would be responsible for damage to property or to his own injuries, he did so even if it was the fault of the owner.
Most people would not agree with that if they thought about it. The owner can cause injury to you even if he was at fault, even if he did it intentionally, and you, who had zero fault would have to pay for your own injuries. This far reaching indemnity clause (also called an exculpatory clause) is allowed in North Carolina, but the courts, recognizing that this is an unnatural result, limit these provisions as best they can. In order to be effective, the contract language must be clear and explicit that they are protecting the owner from his own negligent or intentional acts. The courts “strictly construe” the language. Nevertheless, if it is in the contract, the court must uphold it.
There are a few exceptions. An indemnity clause protecting against a party’s own negligence is prohibited by statute for construction contracts. Also, if the activity is extensively regulated to protect the general public from danger, this type of indemnity clause is prohibited. The courts have found this exception in contracts for health care, motorcycle safety training, and cosmetology. Finally, an exception has been found when the parties have unequal bargaining power. This exception usually only applies where the person was not given the opportunity to read the clause. Note that under North Carolina law, if you sign something, legally you are representing that you did read and understand what you signed.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
March 21, 2014
March 18, 2014
February 14, 2014
Insurance Adjusters
After you are involved in a car accident, but before you retain an attorney, you are in a critical and dangerous time. You begin dealing with insurance company representatives in an effort to get compensation for your personal injury or damage to your car or other property. Even the most fair and honest claims representative does not have the mandate to get you the most he can for your injuries, or even to get you a fair amount. His job is to provide you with the least amount he can that will quickly resolve any claims you have. In doing so, there are a number of things adjusters do, either on purpose, or just by the nature of the situation, that push you to quickly resolve your claim, and in doing so, you run the risk of settling for far less that you would otherwise be entitled to.
While the guy you buy the insurance from works out of a small office with one or two employees, and is always available on the phone, or Saturday on the golf course, or Sunday in church, he is not the person who is making the decisions on what your will receive from your car accident. That person is usually in a different city, and will handle sometimes up to 150 separate claims in a variety of geographic locations at any one time. In contrast, you have only one case that you are concerned about. Discussing the claim in a timely matter may therefore mean different things to the adjuster than to you, even assuming the adjuster is not purposefully ignoring your claim. You may become impatient for a resolution and quickly agree to a settlement, dreading protracted negotiation. Resist that urge.
If you are having constant communication problems, consider making all your requests by letter. Insurance companies can face unfair and deceptive trade practices lawsuits on claims handling even on cases they have the right to deny if they fail to reasonably make an investigation and timely notify you of their denial or acceptance of your claim. Keep in mind that in a motor vehicle claim you have three years under the North Carolina statute of limitations to file your complaint. In most cases, just because you are trying to get cooperation from the insurance company, or even when you are actually communicating, the statute of limitations does not stop running. If the adjuster wants to take a recorded interview of you, consult with an attorney. While it may seem to you that their insured is at fault in the accident, an innocent statement by you, admitting to any contribution to the wreck, will immediately provide the adjuster with a large bargaining chip to lower the value of your claim. North Carolina has contributory negligence, meaning that if a jury were to find you to have even a small amount of fault, you would not recover anything, even if the other party was much more negligent.
Typically, when they determine that their insured is at fault, the insurance company will provide offers to settle the property damage claim (damage to the car and contents) and the personal injury claim. Usually the property damage claim is easier to settle. They simply go by the Kelly Blue Book value for the car. As a result, oftentimes this claim gets settled before any personal injury. When you accept money for the property damage, be sure it follows the typical practice of only settling the property damage and not the personal injury. The personal injury, even when fault is not an issue, will typically take longer. Agreeing to a value on pain and suffering, the amount of injury that is caused from the motor vehicle collision as opposed to a pre-existing injury, questions of what is “reasonable” medical care, and ongoing treatment, make settlement of the personal injury claim harder. Unlike a worker’s compensation claim, the insurance company will have no interest (and there is no law to force them) in paying your ongoing medical bills as you go. They will write one check and you will release them permanently. Once that is done, there is no going back, even if additional, unforeseen medical bills arise later out of the same car wreck. So again, don’t sign away your personal injury claim just to get a quick resolution (the goal of the insurance adjuster).
Be immediately suspicious if the claims examiner tells you that you don’t need an attorney, and if you do, you’ll just reduce the amount of money you receive. While this may be true in some cases, don’t take the word of the claims examiner. Most personal injury attorneys will offer a free consultation where they can let you know the risks and benefits of proceeding with an attorney. A good attorney will tell you when not to hire them. With a property damage only case, or a personal injury case that simply involved an E/R visit and maybe some X-rays just to confirm there are no broken bones, it usually would make economic sense to proceed on your own. Any additional amount an attorney could get would be eaten up by the fee. If it involves ongoing treatment, it usually makes sense to hire a personal injury attorney. Again, in either case, take a free consultation first.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
January 24, 2014
Two Tenants, One Apartment.
I recently competed a semi-famous one-act play entitled "Box and Cox." The play is a 19th century farce about two men. Cox works all day as a hatter, and Box works all night as a printer. An enterprising landlord, Mr. Bouncer, decides to rent them the same room without telling them. This works remarkable well, until Cox gets a rare day off and finds Box in “his” room. How would this play out under modern North Carolina landlord/tenant law?
In North Carolina, in every residential lease, there is a promise that the tenant will have undisturbed use and enjoyment of real property. Known as a covenant for quiet enjoyment, this promise is implied in a lease, even if it is not expressly written into the lease. Mrs. Bouncer would have breached this covenant of quiet enjoyment as to both Box and Cox. Both parties would have a cause of action against Bouncer. Assume that Box signed his lease before Cox. Box would therefore have the legal right to the room. He could also recover any monetary damages against Bouncer he may have suffered, including increased utility fees, personal items (coal, sugar, candles and Lucifer matches, according to the script) that were consumed unknowingly by Cox. He could also sue for a return of some of his rent. A “rent abatement” action allows the wronged tenant the difference between the rent actually paid, and the market value of what was actually received. If Bouncer had leased to two tenants who knew they would be sharing, how much less would those hypothetical renters have paid? The one thing that Box could not do (unless Bouncer agreed to it) would be to break the lease and move out. Only where the landlord actually physically removes or blocks access to the premises (eviction) or where the circumstances make it impossible to remain on the premises (constructive eviction) could he legally break the lease.
Cox would have a claim for monetary damages against Bouncer, but couldn’t get the actual room (what the law calls “specific performance”). In addition to a recover for the same types of monetary damages that Box would enjoy, Cox’s monetary damages could also include the difference between the cost of a comparable room and Bouncer’s room, moving and relocation expenses.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
January 03, 2014
Should HOAs file liens?
I’ve written before about the lien procedure required when a homeowner’s association is attempting to collect on past due assessments. Some of the HOAs I’ve worked with have annual assessments as low as $50, but still have a handful of people who neglect or refuse to pay. My staff is trained on the process of organizing and filing liens, allowing me to supervise the work and figure out what to do if something comes up that is not typical of most of the liens we file. This keeps legal fees down, but my bill can still be considerably more than the overdue assessment. I frequently tell all my clients to consider their cases from an economic and business perspective, even if they have a personal injury or emotional claim. I will tell them I don’t want to charge them more for legal work than they may receive in a settlement or verdict. Why then, do I advise my HOA clients to file liens even when my fees, as low as they are, may still be more that the amount they are trying to recover?
First, the legal fees are low enough that a worst case scenario, no recovery, will not cause any hardship on any medium to large sized organization. The legal fees get even lower where I have several liens to file at the same time.
Second, in my experience, a large number of the unpaid assessments come from simple neglect. Even where a homeowner has received multiple letters from the HOA board and ignored them, there is something about a legal document, on file with at the courthouse, which will shake the procrastinating homeowner out of their stupor. In my experience, over half the time my office gets a phone call asking how much to pay and where to send the check.
Third, if the HOA declines to enforce their assessments, more and more people will ignore them. That causes a situation where a group of homeowners are essentially making voluntary payments to fund an entire planned community. A question arises if the board is fulfilling the duties that are required under the statute.
Fourth, once a lien is in place, it will remain for three years. During that time, any sale or refinancing of the home will be held up until the lien is satisfied. Therefore, in many cases, the liens are paid automatically in a closing.
Finally, unlike most legal actions, reasonable attorney’s fees are recoverable for the filing and enforcement of a lien.
While, there will no doubt be judgments for assessments and attorney fees that are simply not collectable, it is well worth it for a homeowners association to at least file the liens on unpaid assessments. If the lien is not satisfied after the three years, action must be taken by the HOA to enforce the lien. As that would require far more legal fees than the filing of the lien, another analysis must be made by the attorney and the board before taking that step.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
December 13, 2013
Who's in Charge Here?
Most Non-profit corporations, including homeowner associations, have a volunteer, part-time executive board, with a full-time professional manager, management company, or executive director. The relationship between these two parties can get tumultuous. After a large turnover in board membership, the new board members may see the professional manager as a holdover and supporter of the old regime. Conversely, a long time manager may become so invested in an organization, they dismiss new board members as temporary and amateur dabblers in the business of the organization. For a smooth running non-profit organization, it is important that the professional manager and the volunteer board understand their respective duties and responsibilities.
The Board
The board of directors of a non-profit corporation has a duty to discharge its duties in good faith, with the care of a reasonably prudent person, and in a manner he reasonably believes is in the best interest of the corporation. A board for a non-profit organization owes its duties to the corporation’s mission goals. A board for a homeowner’s association owes duties to the planned community and the owners. The purpose and goals of the corporation are usually contained in its bylaws or articles of incorporation.
A board of a non-profit is not expected to operate the non-profit’s day-to-day operations. Those tasks are delegated to the executive director, staff, and/or management companies. The board is responsible for overseeing those persons and their activities.
The following major duties are suggested for a non-profit board.
1. Provide continuity for the organization by setting up a corporation or legal existence; to represent and advocate to the public and its members the organization's goals and point of view through its products and services.
2. Select and appoint a chief executive to whom responsibility for the administration of the organization is delegated. This chief executive could be the president or another officer on the board, but usually would be the professional executive director or managers. In determining and appointing and managing such an individual, the board should do the following:
Specify a job description for that chief executive which could include his executive relations with the board, leadership in the organization, in product/service/program planning and implementation, and in management of the organization and its personnel.
Review and evaluate the chief executive’s performance regularly on the basis of that specific job description.
Offer administrative guidance and determine whether to retain or dismiss the executive.
3. Govern the organization by broad policies and objectives, formulated with the assistance and agreement of the chief executive and employees, including assigning priorities and ensure the organization's capacity to carry out products/services/programs by continually reviewing its work.
4. Acquire sufficient resources for the organization's operations and to finance the products/services/programs adequately.
5. Account to the public and/or its members for the products and services of the organization and expenditures of its funds, including:
Providing for fiscal accountability, approving the budget, and formulating policies related to contracts from public or private resources.
Accepting responsibility for all conditions and policies attached to new, innovative, or experimental products/services/programs.
President
The president of the board of a non-profit has the same duties of good faith and reasonableness as a board member. The statutes do not set forth specific duties of the chairman or officers but allow the corporation to set the duties of the chairman and other officers in its bylaws. Typically the president has the duties of a chairperson as set forth in a standard manual of parliamentary procedure (such as Robert’s Rules of Order) and presides over the annual, executive, and special meetings of the organization. The president and other officers will represent the organization to the public. In many cases, the president has additional administrative functions, which are set forth in the corporation’s bylaws. In the rare cases where there is no professional executive director or management company, the president may take on a larger number of management functions.
Executive Director/Manager
Even where the bylaws of the organization do not refer to an executive director or other staff position, the board generally has the power to hire and contract with employees and independent contractors and to define their duties. The board of directors and officers are also allowed to reasonably rely on the expertise and competency of those individuals.
Robert’s Rules of Order describes an executive director as a salaried individual who devotes full time to the position of administrative officer and general manager of the organization, usually under a contract of employment. He is responsible for seeing the board’s instructions are carried out; recommend plans of work; conduct the day-to-day business of the organization; and hires, fines and determines salary of other staff members. Robert’s notes that in many organizations, the professional executive director provides all the management functions that would otherwise be exercised by the president, leaving the president with the duties to preside over meetings and act as a spokesperson for the organization. The executive director takes orders and direction from the board, and not from the president or another officer independently. As typically the professional executive director is operating under a contract, specific tasks and duties that he is to perform are contained in that contract. Generally those tasks and duties are in line with the executive director providing day to day management of the organization and carrying out the goals and policies as set by the board.
Conclusion
In general, the standard business practice of a non-profit corporation, including homeowner associations, provides for an executive board that formulates policy and direction and oversees the professional executive director or manager as he conducts the day-to-day affairs of the corporation and carries out the policies established by the board.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
December 06, 2013
Insurance for Homeowners and Homeowner Associations
Under Chapter 47C for condominiums and 47F for other planned communities, a homeowner’s association is required to purchase certain types of insurance. In both types of communities, the HOA is required to provide insurance for damage to the common elements of the association. A common element is anything owned by the association, and not an individual owner, and not an individual lot or condominium unit. Typical common elements include parking lots, pools, clubhouses, and green spaces. For condominiums, common elements also include shared walls or structural elements between townhomes. The amount of insurance must be at least 80% of the replacement value of the insured property. It must be insured for all “direct physical loss commonly insured against including fire and extended coverage.” “Extended coverage” is not defined in the statutes. The standard definition in the insurance industry for “extended coverage” generally covers physical damage due to wind, hail, fire, smoke, riot, civil commotion, aircraft, and vehicle damage. Currently, these coverages are typically included in the standard insurance policy rather than as an extended coverage endorsement. Note that this does not include flood insurance, and therefore, depending on the restrictions in the declarations, the HOA may not be required to purchase flood insurance.
For condominiums where the individual units are stacked, one on top of the other, the insurance includes not only the common elements, but the units themselves. This does not include any improvements or betterments that were installed by the homeowner. For example, if the base unit includes carpet and Formica counters, the insurance will cover the replacement cost of those materials, even if the homeowner had installed hardwood floors and granite counters.
The HOA is only required to purchase this insurance if it is reasonably available. If certain coverages are unavailable or unreasonably expensive, the HOA simply has to notify the unit owners of the gap in coverage.
Even though a homeowner in a stacked condominium has coverage under the HOA’s policy, I would recommend that he purchase additional coverage. Known as an HO6 policy, the condominium unit owner insurance would cover personal property, interior walls, floors and ceiling, including any improvements. Although there may be some overlap between the HOA’s policy and the owner’s policy, keep in mind that one way HOAs keep down the cost of insurance is to agree to a high deductable. The owner’s policy could cover part of that deductable.
To illustrate, assume that a tenant in an upstairs condominium unit leaves the water running in the bathtub. The upstairs unit fills with water which soaks down through the walls and ceiling, and damages the lower unit’s furniture and hardwood floors. The insurance company for the HOA accepts the claim as a covered peril. After subtracting their deductable (let’s say that amount is $10,000), the insurance company pays for the damage to the upstairs floors, the areas within the common wall and between the floor and ceiling of the stacked units, and the amount to replace the damaged hardwood floors with the original carpet. They do not pay for the cost to replace the more expensive hardwood or the furniture. The below unit owner has an HO6 policy which pays for the furniture and the additional amount to replace the hardwood after subtracting their deductable (let’s say that amount is $1000). The HOA then assesses the upstairs unit owner for the $10,000 deductable amount as they caused the damage with their negligence. If the damage did not come from the negligence of the upstairs neighbor, (assume a faucet broke rather than the owner left the water running) then the HOA would likely assess both owners for the $10,000 deductable. At that point, the downstairs neighbor’s HO6 policy may pay part of that assessment that goes to damage to the ceiling, walls and floors.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678 or at [email protected].
November 08, 2013
Always On
When you are called to go to court for your own case, or as a witness in somebody else’s case, hopefully your attorney or the attorney calling you has prepared you for your testimony. You should have some idea as to the questions he will ask, the answers you will give, the cross-examination topics of the other side, and how best to make your testimony clear, believable and truthful to the judge or jury who is hearing your evidence. What witnesses frequently fail to do, and attorneys neglect in their preparation, is the non-verbal communication the witnesses is giving the jury when they are not on the stand answering questions. There are a few things for a witness to keep in mind as they sit in the courtroom waiting to be called so they don’t undermine their verbal testimony.
First, you should consider yourself always on. In the courtroom, in the courthouse, in the parking lot, at the downtown lunch counter, always assume there is a juror looking at you. In one case I tried, I won after what I thought was an exceptionally devastating cross-examination of the defendant. Thinking to pat myself on the back, after the trial I was interviewing jurors on my performance in trial. When I confidently asked about my withering cross-examination technique, I got a resounding “meh.” What really hurt the defendant’s testimony was the jurors seeing him laughing and carrying on in the parking lot at the end of a tough day of trial where the plaintiff had talked about her serious injuries. On another occasion, the juror turned on a defendant because he kept rolling his eyes and sighing throughout the plaintiff’s testimony. One juror gave the then timely reference to "Al Gore face."
Second, spinning off of the first point, dress with respect for the court. I saw one District Court judge look incredulously at a defendant on trial for marijuana possession wearing a Bob Marley T-shirt. I’ve been told by people more fashionable than I to dress “business casual.” I used to tell my clients to dress like they were going to church until a termite inspector showed up for court with a three-piece suit, cufflinks and a tie pin. I certainly don’t need my clients to be dressed better than I do. The jury might get confused on who the actual lawyer is.
Third, unless you are the party in the lawsuit, or a close relative there for moral support, don’t stick around and watch the trial. The longer you sit in the courtroom watching the proceedings, the more any appearance of being unbiased erodes away.
Fourth, when you are testifying on the witness stand, look at the jury when you give answers longer than one or two words. They are the ones that need to hear your testimony and they are the ones that are going to judge your credibility.
Finally, tell the truth. This is as important in a non-verbal sense as it is in a verbal sense. Don’t manufacture tears, or make other big emotional productions. The jury will know you are faking your responses and will then take a short trip to assuming your verbal testimony is a lie as well.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
November 01, 2013
Prelitigation Mediation for Homeowner's Associations
One of the new laws for homeowner associations in North Carolina is a law “encouraging” parties with a dispute with their HOA to try and resolve the dispute before filing a lawsuit. The statute provides for a voluntary prelitigation mediation that is similar to a mediation required in every North Carolina Superior Court case. The only wrinkle I see in the new law is the statute of limitations for filing a claim is tolled until the mediation is concluded. Therefore, you are not penalized with a shortened period of time if mediation fails and you need to file a lawsuit.
The law is curious in that it doesn’t really do anything (other than the statute of limitations extension I just mentioned). The mediation is voluntary and either side can refuse to do it. In addition, prior to the law, there was no prohibition from doing what the statute describes. I have participated in a prelitigation mediation for HOAs and members on a number of occasions. The law specifically excludes a member’s failure to pay an assessment or fine or fee from being covered by the statute, but again nothing would prevent a prelitigaton mediation on that basis. If either side declines mediation under this statute, and the case is filed in Superior Court, it will wind up in a mediation anyway.
The law does require the HOA to notify the members every year that they can initiate mediation under this law and include it on their web site. If the HOA doesn’t have a website, it needs to publish the notice at the same time it gives the required list of the names and addresses of all the officers and board members of the association.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
October 21, 2013
Preventative Medicine
Once I had to explain to one of my kids why they had to brush their teeth every night. I told them I knew it was a hassle and took up ten minutes that they could use to play Angry Birds, but it was important because they could get cavities and we’d have to go to the dentist for a filling. They would rather use that ten minutes than to use an afternoon getting fillings and I would rather pay $.85 for a toothbrush than a few hundred dollars for fillings. This is preventative medicine and most people get the concept at least for their health care. However, those same people ignore preventative medicine strategies in other parts of their life.
Typically, in cases about contracts or business, lawyers charge by the hour. I have the same hourly rate if I am reviewing a contract, drafting a contract, or representing somebody in a dispute over a contract. However, the amount of hours I spend on litigating a contract is far more than what I would have spent in an initial review of a contract. In just about every suit on a contract or business dispute I’ve had, I can see in the document where I could have simply added a small paragraph or changed a word in the agreement that would have gone a long way to quickly resolve or even prevent the issue I was litigating. Most of these contracts and agreements were not drafted or reviewed by attorneys. Often what the person thinks the contract or agreement says is not actually in the contract, or at least is not clear. If you are signing an agreement, have an attorney review it. They will have clauses and requirements that you may not have considered. They may find that the language in the contract and what you intend are different.
If you do have a jargon-filled contract, they can explain to you what it means so you know what you are agreeing to, and change it if needed. If you want to terminate a contract or business agreement take the document to an attorney before you do so. I have recently handled a case where a business owner didn’t like the way his partner was running the business and thought that he could just give up his ownership and walk away. However, there were loans from the bank that he had guaranteed. As it stands, he has to pay money for loans to a business he no longer owns or works for. If he had consulted with an attorney who could have explained the risks, he may have been able to get out of the business cleanly.
It’s always easier to fix problems before they become problems. One attorney I know had a client who was a partner in a new business. The attorney kept trying to get him to get his partner to sign an operating agreement so that the amount of ownership interest for each was clear. The client kept putting it off because every thing was going well and he didn't want to rock the boat. When the time came to sell the business, the partner had conveniently forgotten any oral agreement he had on the split of the proceeds of the sale. The client eventually won, but it cost him about ten times as much in legal fees to get the same result.
Always remember to use a little bit of preventative medicine in your business arrangements.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
October 04, 2013
Bicycle Safety
Sometimes, even the safest automobile driver will ignore rules that they wouldn’t think to disobey in a car. However, the law of North Carolina considers a bicycle a “motorized vehicle” and expects a bicycle rider to obey the same rules of the road as an automobile bicycle rider should always go with the flow of the traffic. These would include:
- Always ride on the right side of the road, and in a bike lane if one is available.
- Don’t ride on the sidewalk. Admittedly, the law in North Carolina is a bit murky about riding a bike on the sidewalk. The statutes state that a bicycle is a motorized vehicle and no motorized vehicle should be driven on the sidewalk, but other statutes provide that cars should yield to pedestrians or bicyclists on sidewalks. There also may be local ordinances regarding bicycles on the sidewalk. As a safety issue, expect for small children, it is usually safer to bike on the roadway rather than the sidewalk. Neither pedestrians or cars expect a bicycle on the sidewalk and at every intersection or driveway, you are in greater risk of being hit.
- Use signals for turning. (Think back to your Driver’s Ed days and remember the hand signals you were taught)
- Obey all traffic signs and signals.
- Yield the right of way to pedestrians.
- Driving a bicycle while under the influence of alcohol or drugs is illegal.
Other laws specific to bicycles include the following:
- When riding at night, equip your bike with a front lamp visible from 300 feet and a rear reflector that is visible from a distance of 200 feet.
- Wear a bike helmet. The law requires all riders under 16 to wear a helmet.
- Bicycling on Interstate or fully controlled limited access highways, such as beltlines, is prohibited by policy, unless otherwise specified by action of the Board of Transportation.
Other than the possibility of local ordinances, there is no requirement for bicyclists to ride single file, nor is there a law that gives cyclists the right to ride two or more abreast.
Not only is obeying the laws of the road and bicycles important for your safety, if you do not obey those laws, and you do get in an accident, you may be barred from recovery even if the other person was at fault. Disobeying traffic laws that have been enacted for public safety is negligence per se, or negligence as a matter of law. North Carolina has the rule of contributory negligence. This means that if you as a bicyclist disobey one of the rules of the road, and it contributes, even in a small way, to your injuries, you won’t be able to recover any money for your damages, even if the other person was 99% at fault.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678. He rides his bike at lunch nearly every day.
September 20, 2013
Bursts
I had a meeting the other day with a client who was concerned about the status of his lawsuit. We represent him for the death of his father due to medical malpractice. Not surprisingly, he is constantly thinking about his father and his lawsuit, pouring over medical records, doing his own medical research and analyzing our expert’s reports and opinions. When a few weeks go by and he hasn’t heard from our office, he gets anxious and wants to know that we are doing all we can. When we had our meeting, I did a better job of explaining how the lawsuit works and the procedure that has to be followed. I explained that over the life of a lawsuit, there will be bursts of activity followed by weeks and even months of little or no action. The first burst of activity happens when the client first comes in. We get medical records, interview the client and any important witnesses, and get preliminary opinions. After that, there will be down time as we wait for all the medical providers to copy and provide records. Seldom do I get all the medical records on the first request, so there will be additional downtime. Once those records are received, they go to an expert for his review. In a medical malpractice action in North Carolina, medical experts are required to file a complaint and those experts have to be actively treating patients. As a result, there will be more downtime before the doctor can get to a review of the records. Once all the information is together and the opinions are finalized, there will be another burst of activity as the complaint is drafted, reviewed by the client and the experts and then filed. The ball is then in the defendant’s court. After they are served by mail or sheriff they have 60 days to respond with their answer. (Technically it is 30 days with a perfunctory extension of time for another 30 days). A month or two after that there will be another burst of activity around the written discovery, particularly as the client has to help provide all the answers. Depositions of experts and defendants will then take place and it often takes some time to get a date that is convenient for all the attorneys and experts. After all the discovery is completed, the lawyers and parties get their calendars out again to find a date to conduct the court-ordered mediation. This will be the final burst before the actual trial.
Your attorney should notify you about the progress of a trial, and if you have not heard from him in 30-60 days, you should not be hesitant about contacting him about a status update, but keep in mind there are large stretches of time where there is nothing that is being done because nothing can be done.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
August 30, 2013
Explaining a Fee Agreement
Any time you hire an attorney, they should provide you with a fee agreement to sign. The fee agreement provides both you and the attorney with some certainty as to what the attorney has agreed to do for you and what you are supposed to provide the attorney for his services. It is both good practice and an ethical requirement for the attorney to get this in writing. Attached is a copy of the fee agreement I use in my office. Download Fee Contract (Hourly) Although it doesn’t fit for every client and situation, it generally has the same language and intent for business clients, personal injury clients, family law clients and others.
The introductory paragraph makes it clear who the firm is and who the client is. While this may seem obvious, and frequently is, it is very important to establish just who the client is. A lawyer has different and stronger ethical obligations to a client than a non-client. Note that a client is not necessarily the one paying the attorney fees. If the client is a child, the guardian will sign for the client, but the duties still run to the child.
Paragraph 1 of my fee agreement also makes it clear that if a corporation is the client, that the person signing is authorized to sign. Frequently with small companies, the individual signing, as well as his company, has issues. That person will need to sign twice, once for himself and once for the company for the attorney to represent both. (This is assuming there is no conflict of interest in representing both).
Paragraph 2 makes it clear what the client is hiring me for. I don’t want to do work for a client for something they don’t want or need me to do, and neither do I want the client to think I am working on an issue when I am not. The latter is especially dangerous as a statute of limitations could expire and the client could find a valid claim prevented by the passage of time.
Paragraph 3 sets forth the client’s duties. If I can’t reach a client with important decisions regarding their case, I’ll have to withdraw. If a client is not truthful with me, I can’t give good advice on their case, and if it causes an ethical conflict, I’ll have to withdraw.
Paragraph 4 is the retainer for an hourly contract. Essentially this is a refundable retainer that is based on a minimum amount to make a good start on a civil lawsuit. I will then send out monthly bills as set forth in Paragraph 5 and show the money moving from the client’s trust account, to the firm’s operating account. When I am no longer representing the client, for any reason, any funds remaining in the trust account of the retainer are refunded.
Paragraph 5 is the rates for an hourly contract for attorneys, associates, and staff. Usually in my firm, one attorney and one paralegal work on a case, but occasionally other attorneys and staff will contribute. One of the questions every client should ask a potential attorney is who will be working on the case. In some firms, while a partner may sign up the client, a junior associate will do all the work. The staff work that is billed is usually confined to paralegal work as opposed to general office work such as copying, cover letters, and filing.
In some cases, I will agree to represent the client on a contingency fee basis. Rather than an hourly rate for the fees, I will charge a percentage of the total recovery. For some cases in our firm, usually in the family law realm where the legal service is very specific, for a small amount of time, and we have a very good idea regarding the amount of work that needs to be done, we can charge a flat fee.
Paragraph 6 defines the costs. Note that costs are in addition to the hourly rate or the percentage amount obtained by contingency. They are simply pass-through charges that are specific to the file. The biggest cost is usually when expert witnesses are hired. Those large costs are discussed with the client before they are incurred.
Paragraph 7 gives my firm the duty to provide written monthly statements in hourly cases, and provides for interest for past due amounts.
Paragraph 8 is the discharge. Essentially the client can terminate the contract for any reason or no reason. My firm can only withdraw with good cause. Usually when I am forced to withdraw it is for a lack of cooperation or a lack of payment. Although I have to file a motion and have a hearing before a judge before being allowed to withdraw, this process is not billed to the client. After withdrawal, the former client would owe any past balances for any work my firm actually did on the case.
Paragraph 9 makes it clear that I cannot guaranty any result. In fact, I am ethically prohibited from making any such guarantee.
Paragraph 10 is for situations where some work has been done, usually where time is of the essence, before a contract has actually been signed.
Paragraph 11 is basic contract language that preserves most of the contract even if for some reason a particular portion can’t be enforced.
Paragraph 12 is what is known as a merger clause. It makes it clear that the fee agreement is what governs the arrangement, not any prior agreements, statements, promises etc. If you are expecting something different or additional than what is in the agreement, be sure it gets included.
Finally, the attorney who will be in charge of your case signs and the clients sign. When there are multiple clients, the all need to sign. They are usually billed jointly, but each is responsible for the entire amount of the bill.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
July 06, 2013
June 20, 2013
May 31, 2013
May 24, 2013
May 10, 2013
Attorney Fees
A frequent misunderstanding about civil lawsuits that I encounter is about the payment of attorneys fees and costs. A sizeable number of potential clients assume that they can ask for the other party to pay their attorneys fees. Their (logical) thinking is they wouldn’t have to pay for an attorney if the other side would have done the right thing. This type of system is usually called the “loser pays” system. However, most of the United States, including North Carolina, follows the “American Rule.” In our system, each side is responsible for their own attorneys fees. The theory behind the rule is that people would be more inclined to fight for their rights in the court system if they did not have to worry about paying the other guy if they lost. Critics of the rule point out that, particularly in modern America, individuals are far less able to prosecute a lawsuit against corporations, businesses, and governmental entities who can afford to drag out litigation. Even an individual defendant in a car wreck lawsuit is backed by an insurance company who is paying the defendant’s attorneys fees and costs. If not for the ability of plaintiff’s lawyers to pursue cases for their clients on a contingency fee basis (meaning they earn a percentage of what they recover) hardly anyone would be able to fund a modern lawsuit.
In North Carolina, there are exceptions to the American Rule. The North Carolina legislature can write specific laws that provide for attorneys fees. Some laws currently on the books that include attorneys fees are unfair and deceptive trade practices, frivolous lawsuits, suits against a city or county, and suits to enforce a lien.
In addition to statutory exceptions, if the claim involves a breach of contract, and the contract calls for attorneys fees, those can also be recovered. The fees in such a contract action can’t exceed 15% of the claim. Similarly, a homeowner's association can recover for attorneys fees for a violation of their declarations, including failure to pay assessments, if that power is given in the declarations.
Your attorney should advise you on whether or not any exceptions apply, but be clear you understand the ability and the likelihood of recovering attorney's fees when you make decisions on proceeding or settling your case.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
April 19, 2013
Timber Trespass--Time to Sue
Lately I have had a few calls about the wrongful cutting of timber, so I thought I would update on the state of the law in North Carolina when your timber is illegally harvested. Basically, as I have written before, if a person cuts the wood off your property, intentionally or not, they are liable for double the net value of the timber. If you can prove it was done intentionally, or can show that it is a practice of this person or company, you may be able to get treble the net value and attorney fees under the unfair and deceptive trade practices statute. For more detail you can read my original article here.
The statute of limitations for the wrongful cutting of timber is three years from the date the trespass began. (Four years if you can proceed under unfair and deceptive trade practices). One unique problem of timber trespasses is that the cutting usually occurs on rural property, far from major roads or residences. I currently have a client who had a tract of timber in a swamp, with no access other than by small boat. In that case it could be years past the statute of limitations before the cutting is found out.
Therefore, timber cutting cases frequently benefit from an extreme application of what is known as the “discovery rule.” For the statute of limitations on timber cutting and trespass, as well as most other types of lawsuits, the statute does not begin to toll until the plaintiff knew or should have known about the trespass. In other words, to determine your deadline to file a suit, you start counting from the date you found out that your timber had been cut, or when you should have found out. If the property is on a street that you drive by several times a year, or if you hear a rumor that your property has been cut, but you fail to investigate, a jury could find that you “should have known.” I’ve had timber cases that survived a statute of limitations defense where the property was so far back in the woods that the owner didn’t find out until almost 10 years later, and that only from a coincidental aerial photo.
Some types of claims other than trespass, notably medical malpractice and construction, in addition to a statute of limitations, also have a longer statute of repose, which is a hard deadline, and will start the clock running whether the plaintiff could have known about what happened or not.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
April 05, 2013
March 29, 2013
Business Judgment Rule in Homeowners Associations
Under the community documents (declarations/covenants, bylaws, rules and regulations) and under the planned community and condominium acts in North Carolina, an HOA has certain obligations, for example, maintaining or repairing the common elements of the association. Unless it specifically sets forth in the declarations how late the pool can stay open or how many times a year the crape myrtles are pruned, the board of directors makes those day to day management decisions. If homeowner has a problem with the management of the common areas or other obligations like those, does he have standing to file a legal complaint against the HOA and the board and force them to perform?
Theoretically, they do, but the way the law is set up, the facts need to be so extreme, that it is extremely rare. Boards of an HOA have the advantage of the same business judgment rule that other corporations do. Homeowners don’t really consider that they are part of a corporation when they own a home in a planned community with a homeowners association, but they are. The corporate business judgment rule gives a legal presumption to a Board. In any legal action against a Board for failure to perform its duties, a court initially is required to presume, without any additional evidence, that the Board acted due care and on an informed basis for any decision they made. The court further presumes that the Board acted with good faith that the decision was the best for the association, even if later the Board is found to be wrong. The complaining homeowner is the one who must produce evidence showing this was not the case. All the Board has to show is that there was some rational business reason for the decision. The Board doesn’t have to have made the best decision, just have any rational reason for making that decision.
Usually the best way to effect changes in the management of a Board is to run for the Board and elect directors with the change you want. This usually can be done at an annual meeting, or at a special meeting called to remove the present Board.
--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
March 22, 2013
Bradley Coxe
Bradley A. Coxe is a practicing attorney in Wilmington, NC who specializes in Personal Injury, Medical Malpractice, Contract and Real Estate disputes and all forms of Civil Litigation.
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