Unmarried people in relationships cohabitate all the time. The stigma our parents warned us would follow really no longer applies. That being said, societal acceptance of cohabitation does not mean that co-ownership of real property by unmarried people is not fraught with peril. It is. As the number of couples deciding to delay or forego marriage rises, the number of clients we see who have elected to purchase real estate in joint names without the protection of the divorce code is also on the rise. By the time the client sees us for professional guidance, the damage is often done, the relationship has ended and the real estate becomes an instrument of torment or the method by which one party seeks to extract an emotional toll.
Before I go any further, let’s clear one thing up, I am not a divorce attorney - I am a litigator. So why, you ask, am I writing a blog to warn against the purchase of property in joint names with anyone other than a spouse? The answer gets at the very point of this blog, if you buy property without the benefits of marriage, you will not enjoy the protections afforded by the divorce code, and you will need to hire a litigator to untangle the complications which follow if the relationship goes south. .
Unmarried individuals as co-owners of real property enjoy the absolute right of “partition” under Pennsylvania law – meaning that the law will not require co-owners of real property to remain co-owners of that property. An entire section of the Pennsylvania Rules of Civil Procedure is devoted to the mechanism by which ownership is consolidated whether by agreement, division, consolidation of title or, in certain circumstances, private or public sale. At minimum, the co-owners are set to expend significant sums which can be taxed to the real property.
Partition is an equitable proceeding. The Court is empowered to appoint a Master to review, investigate and report on a number of equitable issues such as possession, respective contributions, credit for improvements and value. The Court receives the Master‘s report but is not bound to the Master’s findings and can conduct its’ own evidentiary hearing at its’ discretion. Every step of the way is an argument and evidence gathering endeavor, the impact of which is never fully in either party’s control.
The best way to avoid the potential for a partition action is to maintain title in a single name unless and until married. The parties can agree on shared expenses, application of mortgage payments and any other number of factors in a Co-Habitation Agreement. That Agreement can provide for reimbursement in the event the relationship fails, a lien against the property for contributions or even an option to purchase if the parties so choose. The point is, co-habitating parties, without the complicating factor of title, can decide in advance how to procced and avoid the costs, time and uncertainties of a partition action. The time to do so is in advance and not after a transfer of title into joint names.
An Invitation to Manufacturers:
Antheil Maslow & MacMinn, LLP will host a Manufacturers' Roundtable Breakfast featuring Employment Law Partner Patricia Collins, Thursday, March 7th, 8:30 - 10:00 a.m., at the Bucks County Bar Association, 135 E. State Street, Doylestown, PA. Please share with "Makers", there will be great content on issues that impact this sector, and an opportunity to ask questions and share concerns.
We hope you will take advantage of this rare opportunity to:
Topics to include: Hiring, Discipline and Termination | Overtimes Rules & Violations | Sexual Harassment Training, Practices & Procedures for Managers |Retention & Recruitment Strategies for a "Well Workplace"
To Register: please RSVP by March 1st:
email@example.com or Jessica S. - 215.230.7500
The Pennsylvania Supreme Court has recently held that an employer may be liable to its employees for a data breach involving the employees’ “personal and financial information including names, birth dates, social security numbers, addresses, tax forms and bank account information…”
The case, Dittman v. UPMC d/b/a The University of Pittsburgh Medical Center and UPMC McKeesport (“UPMC”), involved a class action complaint on behalf of 62,000 current and former employees of UPMC. The employees asserted that their personal and financial information (described above) was stolen from UPMC’s computer systems and “used to file fraudulent tax returns on behalf of the victimized [e]mployees, resulting in actual damages”. Significantly, the employees also asserted that the information accessed and stolen was information they were required to provide their employer as a condition of employment.
The employees’ claims against UPMC were based on their employer’s alleged negligence in failing to properly maintain and protect the employees’ personal and financial information. Two lower courts had ruled against the employees, resulting in a dismissal of their claims.
On appeal, the Pennsylvania Supreme Court reversed the lower courts and concluded that an employer has a legal duty to exercise reasonable care in collecting, storing and safeguarding its employees’ personal and financial information where the employer chooses to store such information on an “internet accessible computer system” and the employees are required to provide such information as a condition of employment.
Based on the Court’s recognition of this duty, the issue in the case then turned on the question as to whether the UPMC could be said to have been negligent in the performance of its duty to its employees. As with any matter, where one party is claiming injury because of another party’s negligence, the ultimate outcome is fact- specific. In this case, the Court held that the employees had stated a potential claim where they asserted that their information was negligently “collected and stored on its [employer’s] internet-accessible computer system without the use of adequate security measures, including proper encryption, adequate firewalls and an adequate authentication protocol.”
The Court did not accept UPMC’s defense that the data breach occurred as result of criminal activity rather that UPMC’s own negligence: the criminal activity would be “ ’within the scope of risk created’ “ by UPMC and thus something against which it would have to provide protection.
Also rejected by the Supreme Court, was the lower courts’ application of the economic loss doctrine. This doctrine, as interpreted by the lower courts, would have barred the employees’ claims because they alleged no physical injury or property damage-only an economic loss. The Supreme Court held that this doctrine was not applicable to the claims in this case because the employees’ claims were not based on a contract claim but based on a tort, namely the alleged negligence of the UPMC in undertaking its duty to protect the employees’ information.
The Supreme Court, having set forth the employer’s duty to its employees, sent the case back to the trial court for new proceedings consistent with the Supreme Court’s ruling. (The Supreme Court did not actually make a factual determination by this case that the employer was negligent).
The decision in this case should cause an employer to triple-check the safeguards attached to the data it maintains and to further consider what personal data and financial data(if any) of its employees the employer actually needs to retain. Any data breach may be litigated and analyzed against what protections were in place, what protections could have been in place and whether the employer used reasonable care to protect the information.
AMM is pleased to welcome Michael A. Klimpl back to full time practice with the firm.
Mr. Klimpl has been serving full time as the Bucks County Solicitor since 2012, and was an assistant Solicitor from 1984 until his appointment as Solicitor in 2012, representing 34 years with the Solicitor’s Office.
As County Solicitor, Mr. Klimpl oversaw all litigation brought by and against the county, and provided counsel to its leaders on a broad swath of legal issues confronting county government – everything from contract law to personnel and labor questions.
Commissioners’ Chairman Robert G. Loughery praised Klimpl for providing clear-headed legal advice that always transcended partisan politics.
“Above all of that, you cared deeply for Bucks County, and that is what made you stand out,” Loughery said. “You have a lot of institutional knowledge, and you can’t put a price on that.”
At Antheil Maslow and MacMinn, Michael Klimpl will resume his full time practice in the areas of Real Estate, Municipal Law, Zoning and Land Use, Employment Law, Civil Litigation, Estate Planning and Estate Administration and Transactional Law.
Now that the hustle of the holiday season is over, everyone is looking forward to the new year. January tends to be the month where people look for a fresh start and catch up on the tasks that were pushed off during the holiday season. For many people, that involves making new year’s resolutions. While some resolutions are harder to keep than others, a very simple resolution to make and keep is to review and update your estate plan.
Here are factors to keep in mind when considering updating your estate plan:
1. Life changes in your family: An estate plan is not one-size-fits-all; it is customized to meet your family’s unique circumstances and needs. Perhaps you had an estate plan prepared when your children were very young, but now they are older and capable of managing their own financial resources. In contrast, perhaps you have concerns about a child’s ability to make prudent financial choices, and would like to know your options for protecting any inheritance they might receive. Maybe you have a child or other family member with disabilities, and you are concerned about how the receipt of an inheritance will affect their public benefits. Perhaps you now have grandchildren that you would like to provide for as part of your estate plan. An estate plan can take all of these areas into consideration and be drafted to best fit your needs.
2. Your personal financial profile: Everyone’s financial profile changes over time. You may have accumulated significant assets since the last time you reviewed your estate plan, or you may be retiring and drawing down on your hard-earned assets. An estate plan created when you had a very different financial profile may not provide the best treatment of your estate based on its current and projected status.
3. Fiduciary roles in your estate plan: Creating an estate plan involves selecting various individuals (or entities) as fiduciaries, such as the Executor of your estate, Trustee of any trusts created under your estate plan, Guardian of your minor children, Agent during your life under your Power of Attorney, and Surrogate to make end-of-life decisions in your Living Will. Each of these roles is very important, so you should consider if the individuals who are named in these roles in your current estate planning documents are still the people you would want to serve. Your documents may name individuals who have gotten older and may be unable to serve in these roles due to health concerns, or individuals who have moved away and may not be able to effectively serve due to geographical distance. You may have created documents when your children were younger, but may now feel that your children are mature enough to take on these responsibilities. While anyone named in an estate planning document may resign or renounce if they are unable to serve in a fiduciary role, updating your documents now will avoid the time and delay involved in appointing the appropriate individuals to these roles in the future.
4. Changes in the tax laws: There is a saying that the only two constants in life are death and taxes, and your estate involves both. Your estate may be subject to various estate, inheritance, and/or generation-skipping taxes, and the law in these areas is constantly evolving. Depending on the law and your personal financial profile, your estate plan can be crafted to reduce your estate’s exposure to these taxes. Documents designed to account for one set of tax laws may not be as effective once those laws change, so it is important to update your documents to ensure they stay current.
For more information about our mediation services, contact:
Denise M. Bowman
Patricia C. Collins
Jessica A. Pritchard
William T. MacMinn
Commercial & Orphans’ Court Matters
Alan G. Wandalowski
Orphans’ Court Matters
Mediation is an alternative dispute resolution process which serves as an option to civil litigation in the court system. It is a voluntary, non-binding, structured process where people in conflict can work with the guidance of a neutral party toward the best, most mutually agreeable outcome. Mediation eases the friction between people so that they can pursue a common end without the stress, trauma, cost and uncertainty of civil litigation. Antheil Maslow & MacMinn has a strong team of seasoned attorneys who are trained mediators in the areas of commercial litigation, family and Orphan’s Court matters. With comprehensive knowledge of each court system, and the challenges and costs inherent to litigating disputes, our mediators bring a high level of legal acumen and interpersonal skill to every mediation.
As commercial litigators, Antheil Maslow & MacMinn’s mediation team is able to leverage extensive trial and litigation experience to work with the parties and their counsel in a collaborative and thoughtful way to achieve an agreeable resolution. Much of our practice as commercial litigators involves analyzing and resolving the competing claims and interests of shareholders, owners, general contractors, design professionals, suppliers and subcontractors. As a result, we are well versed in the essential elements key to commercial conflicts and necessary to achieving agreeable resolutions. Our years of representing stakeholders to business conflicts lends itself to mediation, as AMM mediators are comfortable and experienced in negotiating the resolution of strongly contested multi-party disputes.
Controversies arising from disputes with employees are a major risk factor in today’s business environment. The damages that may result from a major dispute with an employee or conflict with a key executive can be tremendously costly, not only in financial terms, (legal fees, and potential jury awards), but with regard to the negative impact that litigation causes in distraction, disruption and emotional cost to managers, owners and employees alike. When a terminated or current employee makes a claim against his or her employer, it is generally in the interest of both parties to attempt to resolve the matter early through a procedure called mediation. AMM employment law mediation offers an efficient, economical and low stress alternative to the litigation process. We assist parties facing employment law disputes including:
Individuals who are parties to estate, trust or guardianship matters may find themselves in situations which are difficult, emotional, financially challenging and life-changing. Our estate and trust attorneys are accustomed to assisting executors, trustees, guardians and beneficiaries come to a resolution. When parties are at an impasse, or emotions too strong for effective progress in their conflict, using a mediator is a highly effective approach to avoid more stress, cost and pain for all involved. •
For families going through the process of divorce or separation, the path ahead can be difficult, emotional, stressful and frightening. Going through costly and adversarial court battles only makes a bad situation worse. For couples who can work together toward a resolution, choosing a skilled mediator who can facilitate a discussion between the parties and their counsel with as little trauma and acrimony as possible can significantly minimize the emotional and financial cost to the family. The aftermath of successful divorce mediation can help the parties to amicably and move forward toward the future.
All of our mediators take an active, persistent, conciliatory approach to their role. Our focus is to defuse emotional drivers which may impede progress toward agreement, and boil the conflict down to its practical realities, thereby helping the parties to generate and analyze options, and identify ways to overcome barriers to reach their settlement objectives.
Part 2 of our Noncompete Series will focus on employers. Noncompetes, when well drafted, are a powerful tool to protect customer relationships, confidential information, trade and training secrets, and key employee relationships. But, the law does not favor these agreements, so drafting requires care, and, as a practical matter, timing is everything.
While noncompetes are disfavored and maligned, they do serve useful purposes for certain employers. There are two types of restrictions that such agreements can impose: general prohibits on certain kinds of competition; or, prohibitions on soliciting customers, vendors, employees, contractors, or other valuable relationships. For the most part, restrictions on soliciting customers, employees and other key relationships are easier to enforce. They allow the employee to continue to work, and protect those relationships for the employer. For some employers, these restrictions, tailored to their business and in place for a sufficient period of time, are enough. Generally, these restrictions tend to last a year or perhaps two. Employers will need to weigh the dangers of making the restriction too long, and thus unenforceable, as against the time it takes for those relationships to go stale.
Restrictions on competition generally are another matter. The general principle applied by the court is this: a court will not enforce the restriction if it is not designed to protect a legally recognized protectable interest, renders an employee unable to pursue his chosen profession, or appears designed to eliminate fair competition. The court will only act to protect the following interests: trade secrets or confidential information, specialized training the employee received from the employer, or customer good will developed using the employer’s resources. Given these competing factors, it is best to narrowly tailor the restriction to the employer’s business. An employee is more likely to comply with such a restriction (thus avoiding court), and a court is more likely to enforce it as written.
Employers next must consider when to ask employees to sign noncompetes. These agreements are enforceable when signed at the beginning of the employment relationship. A noncompete executed by an employee after the employee has worked for the employer for a period of time is not enforceable unless accompanied by a raise or promotion, or some other benefit. This creates a practice problem for employers. Often, a noncompete is not required at the beginning of employment, but circumstances change: employees are promoted, the nature of the business changes, the employer becomes more sophisticated about its internal procedures, for example. A skilled employee with options in the marketplace may very well refuse to sign such a restriction where the new consideration offered is simply not worth it. So, for example, while a bonus of $500 is enough to make the agreement legally enforceable, it may also not be enough to cause the employee to sign. This creates a difficult situation for the employer – should the employer terminate and lose the key employee, or allow the employee to stay without a noncompete?
Creating a noncompete program for employees is complex, and many of the issue are interrelated. In addition to the legal concerns, employers must consider what concerns and relationships truly require protection, as well as retention and morale issues. We have helped many employers sort through these issues and are uniquely equipped to help businesses navigate difficult noncompete issues.
The third installment of my Navigating Noncompetes series will look at noncompetes from the employee's perspective, outlining potential issues which should be considered before signing such an agreement.
Elaine Yandrisevits,an associate in Antheil Maslow & MacMinn’s Estates and Trusts practice group, will participate as faculty on December 3rd at a National Business Institute continuing education program focusing on the requirements, procedures and pitfalls of fiscal planning with supplemental needs trusts. This legal briefing will provide an overview of the specialized skills required to provide special needs beneficiaries with financial structure and stability and enable accountants, attorneys and financial planners to offer clients guidance on this important estate planning tool and find creative cost-effective ways of funding supplemental needs trusts. To Register, visit Special Needs Trusts and the ABLE Act,
• Get tips for accurate assessment of the client's present and future disability and needs.
• Determine whether a client qualifies as a beneficiary of a special needs trust.
• Don't reinvent the wheel - modify our sample trust documents and use our drafting tips to create airtight trusts.
• Understand and communicate the limitations of SNTs and ensure reasonable client expectations.
Who Should Attend
This legal briefing offers a simple guide to supplemental needs trusts that will benefit attorneys. Others who may benefit from this course include trust officers, estate planners, accountants, and paralegals.
• What SNTs Can and Cannot do for Your Client
• Assessing the Degree of the Beneficiary's Current and Future Disability and Needs
• Types of SNTs and Their Uses
• Basic Drafting Considerations
• SNT Funding, Administration and Termination
In the corporate setting, it has long been the case that a shareholder can assert a claim on behalf of the corporation when management of the entity refuses to do so – a so called derivative action. Under Pennsylvania’s limited partner statute, a partner (general or limited) can now do the same. A derivative action is one brought by a partner to assert a claim on behalf of the partnership where the general partner refuses to do so.
To bring a derivative action, unless the requirement to do so is excused, the limited partner must first make a demand that the general partner take steps to assert the partnership’s right. The demand must be in “record form” and “give notice with reasonable specificity of the essential facts relied upon to support each of the claims made in the demand.” As will be seen, it is important to carefully craft the demand, since the scope of the derivative claims that can be asserted is limited to those claims identified in the demand and because making the demand also temporarily tolls the statute of limitations on such claims.
After receipt of the demand, the general partner may choose to appoint a special litigation committee (SLC) to investigate the claims asserted in the demand and determine whether pursuing any of them is in the best interests of the partnership. The statute gives the general partner wide discretion to appoint members of the committee, so long as they are not interested in the claims and can exercise objective judgment. Indeed, other limited or general partners may be committee members.
The SLC is then charged with conducting an investigation. The scope of that investigation is limited by the claims set forth in the demand letter and is subject to the good faith requirements of the statute. Within these limitations, the investigation conducted is left to the committee.
Upon conclusion of the investigation, the SLC can make one of several recommendations authorized by the statute. These range from recommending that the claims not be brought (and if brought, discontinued) to recommending that the limited partnership itself assert them. The SLC has ultimate power over the claims as Court is bound to enforce its decision with judicial review limited to whether the members of the committee met the qualifications required under the statute and whether the committee “conducted its investigation and made its recommendation in good faith, independently and with reasonable care.”
I recently used the SLC procedure in a case involving a limited partner who owed a large sum of money to the limited partnership. The general partner authorized a claim against the limited partner to collect the balance due. The limited partner defended the case by asserting that the general partner was improperly appointed and therefore did not have authority to commence the collection action. The limited partner issued a demand for removal of the general partner under the act. I suggested that a special litigation committee be appointed. In this instance, I suggested that one committee member be a retired judge from the county in which the action was pending to defuse any argument that the SLC was not qualified or that it did not act in good faith and independently. As I represented the limited partnership, separate counsel was engaged to represent the general partner before the SLC.
In proceedings before the SLC, the limited partner’s counsel sought to expand the claims to include mismanagement and breaches of fiduciary duty alleged to have been committed by the general partner. Illustrating the importance of properly crafting the demand, the SLC refused to consider any of these expanded claims, holding that its review was limited to the issue raised in the demand – whether the general partner was validly appointed. .
Ultimately the SLC found that the general partner was validly appointed and directed that no claim be brought on this issue. As this claim had already been asserted, the limited partnership was preparing a motion to be filed with the Court to enforce the SLC’s determination when settlement negotiations, which had stalled over a year before, resumed, leading to a prompt settlement. The entire SLC process, from demand letter to decision, took four and one half months – a much quicker resolution, and at less cost, than fully litigating the issue.
The SLC procedure allows an independent review of the merits of derivative claims. If appropriate, such claims can be asserted on the partnership’s behalf or by the partnership itself. However, where such claims are found to be without merit, they can be summarily dismissed. The SLC is a powerful tool to address the merits of derivative claims on an expedited and reduced cost basis.