Palomar Law Group

Business Law – Collecting Judgments

Mon, 22 Jan 2018 19:05:00 GMT

When you obtain a judgment to pay money, you are a creditor with the “ultimate IOU.” If the debtor doesn’t pay (which they should because judgments earn interest at 10% per annum) then you have the full backing of the enforcement of judgment law to locate income and assets in order to obtain payment.

Contact the experienced Escondido Business Law Attorneys at Palomar Law Group for skilled legal assistance in collecting on a debt owed to your business. Call (760) 747-2202 to arrange for a complimentary consultation .

Enforcing a Judgment

Here are some of the basic tools a creditor has to enforce a judgment:

Abstract of Judgment. This is a two-page notice of the judgment amount with names of the debtors and identifying information including driver’s license number and last four digits of the Social Security Number. When recorded, the abstract creates a lien on the debtor’s real property in the county where recorded. Then, if the property is ever sold or refinanced, the opportunity to obtain payment may well arise depending on the equity in the property.
Judgment Lien on Personal Property. This is a form similar to the abstract of judgment which is recorded with the Secretary of State. It creates a lien on personal property in the state and creates an opportunity to obtain payment if valuable personal property such as financed business equipment is even transferred or refinanced.
Debtor Exam. This is a court-ordered oral examination supervised by a judge. At this exam, the debtor is required to disclose sources of income, expenses, and assets. When coupled with a subpoena to produce financial records, the debtor exam is an effective way to ascertain the ability of debtors to pay the judgment.
Levying. If the debtor has a source of income, it is a potential source of payment through garnishment (or levy). A creditor can also foreclose against some kinds of real property. If the debtor has a business, accounts receivable can be levied and the business can even be turned over to a keeper to receive payments from customers.
Renewal of Judgment. A judgment is automatically effective for 10 years. After 5 years, a creditor is entitled to renew the judgment for an additional 10 years, and to add the accrued interest to the judgment. So, a judgment for $20,000 renewed in 5 years would increase in value to $30,000, and the same judgment could be renewed again and increased in value to $45,000 at the 10 year mark.

Solving the collection riddle isn’t simple. Creditors usually use all the collection tools available in order to increase their chances of payment. If you want answers to questions about collecting a debt, contact the Palomar Law Group and ask to speak to Randy Ortlieb. As an experienced business attorney, Mr. Ortlieb finds solutions for clients in a wide range of business law matters.

Real Estate Law – Boundaries and Encroachments

Mon, 22 Jan 2018 18:57:00 GMT

What does sharing have to do with boundaries and encroachments? Sometimes our selfish nature gets the better of us and we fight over things that should be shared. Boundary and encroachment disputes can often be resolved by better understanding how to share things. Courts will often require sharing even when parties don’t want it. Contact Palomar Law Group for sound legal advice in boundary or encroachment disputes. Call (760) 747-2202 to arrange for a free consultation.

What Are Encroachments?

An encroachment occurs when the boundary between adjoining lands is ignored and the owner on one side builds something on the other side of the boundary. Disputes arise when the parties refuse to share and disagree about what should happen to the encroaching structure.

Legal Action Involving Encroachments

Courts have the authority to grant relief against encroachments through mandatory injunctions requiring the removal of an encroaching improvement or through actions to eject, quiet title, abate a nuisance, or award damages.

A court may grant a mandatory injunction ordering the encroacher to remove the improvements. A court also has discretion to award special damages caused by the encroachment, including exemplary or punitive damages against an encroacher who either created or failed to remove the improvements with malicious intent.

However, a court will not automatically grant relief against an encroachment. Although an injunction may be granted, courts are required to exercise discretion to consider all the equities between the parties, and may deny an injunction.

Equity Applies

Courts generally look at an encroachment case equitably when deciding what to do with the encroaching improvements. Under circumstances where it is clear that the encroacher knew or should have known that he was encroaching on his neighbor’s land, a court may be more inclined to order removal of the encroachments. However, many encroachments are inherited by the present owners, and the outcome is less certain.

In some cases, a court may give the encroacher the option to either remove the improvements or pay the neighbor the court determined fair price for the improvements to remain. A court can also deny the injunction and grant the encroacher an “equitable easement” over the improved property, when the harm to the encroacher outweighs the harm to the neighbor.

Equitable Easements for Encroachments

Courts have ruled in some cases that an encroachment can remain. This results in an “equitable easement.” These cases are decided by applying three factors: 1) is the encroachment willful or the result from defendant’s negligence; 2) would the actual owner suffer irreparable injuries if the injunction is not order and if ordered, would the rights of the public be harmed; and 3) would granting the injunction place a hardship on the encroacher be greatly disproportionate to the hardship the actual owner suffered from the improvements?

To oppose an “equitable easement,” the actual owner must first show that the encroacher either willfully or negligently crossed over the boundary line. The actual owner must then show that without the injunction, he would suffer irreparable injury and the injunction would not harm the rights of the public. Lastly, the actual owner need only allege that the hardship on the encroacher to remove the improvements is less than the hardship to him from the improvements, as the burden to prove this last factor is on the encroacher.

To oppose an injunction, the encroacher must first show that he was innocent in believing the improved land was his. He must then show that the actual owner would not suffer irreparable injury from the denial of an injunction or, alternatively, the injunction would harm the rights of the public. Lastly, the encroacher must prove that the hardship from an injunction outweighs the hardship that the actual owner experiences from the improvements.

Where Is The Boundary?— “Agreed Boundaries”

The location of the boundary between adjoining parcels can only be ascertained by a surveyor. However, if a survey is impossible, impractical, or unavailable, the parties can agree on a boundary and settle the issue.

Courts generally favor parties determining the boundary by agreement. Under this doctrine, owners of adjoining parcels, when uncertain of the location of the true boundary, agree to a boundary that is binding on both parties. There are three elements under this doctrine. There must be: 1) an uncertainty as to the true boundary; 2) an agreement between the neighboring owners fixing the boundary; and 3) acceptance and acquiescence in the line so fixed for a period equal to the statute of limitations or under such circumstances that substantial loss would be caused by a change of its position.

The Bottom Line

Encroachment and boundary disputes can’t be resolved without a “weighing of the equities.” It’s important to carefully analyze the respective hardships on both sides when deciding how to resolve such disputes. The Court will appreciate a party who makes an effort to be fair to his or her neighbor. If neighbors can agree to share the burdens of a solution, their dispute can promptly be resolved and their relationship can be spared.

Randy Ortlieb is the founder of Palomar Law Group, whose practice emphasizes service to families and small businesses. For questions relating to this article or for assistance with a real property matter , please contact Mr. Ortlieb at Palomar Law Group. Call (760) 747-2202, or complete our Case Evaluation Form and we will contact you soon.

Landlord Tenant – ADA Lawsuit Reform

Mon, 22 Jan 2018 18:45:00 GMT

Introduction

The Legislature enacted SB 1186 to address litigation abuse, such as “vexatious litigation” — lawsuits that are not pursued to rectify wrongs or to advance or create a public benefit. As stated by the author of the bill:

Vexatious special access lawsuits unduly burden our courts and taxpayers, and do not result in improved access for those with special access needs. Those lawsuits cost California jobs and economic prosperity, unfairly threaten small businesses, force businesses to respond with higher costs for goods and services, and have adverse impacts on levels of employment and employee compensation.[2]

Our Landlord Tenant Attorneys are experienced at handling ADA defense issues. Call Palomar Law Group at (760) 747-2202 for help in finding the best legal solution for your particular business.

Below is a summary of SB 1186 – the details of which are codified at California Civil Code Section 1938.

The Basics of AB 1186

Businesses have 60 days to fix an ADA violation, after receiving notice of the violation, if their facility was completed after January 1, 2008. Businesses that don’t qualify for this benefit can qualify if they have obtained an inspection report from a Certified Access Specialist (CASp).
Qualified businesses may also be able to get damages reduced from $4,000 to $1,000 when the violation is corrected.
A small business that does not have a CASp inspection, which has fewer than 25 employees, has up to 30 days to correct a violation. The statutory fine for a violation may be reduced from $4,000 down to $2,000 if the corrections are completed within 30 days.
Demands for money are now forbidden. Attorneys who send “demand letters” must also send the letter to the California Commission on Disabilities and the California State Bar, for review of compliance with the law. The letter may not make a demand or request for money, and may only state the potential for civil liability.

Notice and Demand Letters

Pre-litigation letters must now contain a factual statement which would allow a reasonable person to be able to identify the violation. The specific access barrier (or reason the individual was deterred) must be set forth in plain language, with enough information about the location of the barrier for a reasonable person to be able to identify it. Further, the letter must explain how the barrier interfered with the person’s full and equal access. It must include the date(s) on which the interference occurred.

Plaintiffs who chose to file their lawsuit without sending a notice must provide the property owner with an advisory of their rights. This must include information pertaining to the limitation of damages and procedural protections, which owners can invoke in order to gain time to address the plaintiff’s claim.

Procedural Protection

Qualifying landlords or property owners can seek an immediate stay (of 90-days), which stops the lawsuit from proceeding. Plaintiffs must then present their claim at an “ Early Evaluation Conference ” which allows the merits of the case to be assessed. This conference is ordered within 50-70 days of filing the application for stay, and the parties must all personally appear. The court is required to view the evidence on both sides and verify that the plaintiff’s claims are supported.

Qualifying categories:

CASp Inspection: A landlord or property owner may qualify if: 1) their property has been inspected or meets the applicable standards; 2) has a CASp determination pending; 3) if no alterations or modifications have been made which might affect compliance with the ADA; or 4) a CASp inspection report has been issued.

New Construction: The property qualifies if it was 1) constructed or improved after January 1, 2008; 2) was approved through a local building permit and inspection process; 3) no alterations or modifications which would affect compliance with ADA have been made; and 4) any violations are corrected within 60 days.

CASp Certified: The property was 1) constructed or improved after January 1, 2008; 2) was approved by a local CASp certified inspector; 3) no alterations or modifications made affect ADA compliance; and 4) any violations are corrected within 60 days.

Small businesses: a business employing 25 or fewer employees, which has gross receipts of less than $3,500,000. Additionally, all violations must be corrected within 30 days.

New Damage Criteria

Establishing liability: Plaintiff must show through one of two methods that the violation denied them full and equal access to the place of public accommodation on a particular occasion.

Method 1: Plaintiff must show that they encountered the violation, which resulted in difficulty, discomfort or embarrassment.

Method 2: Plaintiff must show that they were deterred from accessing the place of public accommodation. This requires plaintiff to show that he had 1) actual knowledge of the violation, and 2) the violation would have actually prevented full and equal access.

The plaintiff may recover damages based on the specific instance that he was denied access. Plaintiffs may not recover based on the number of existing violations, but only per instance where he was denied full and equal access. It is also more difficult for a plaintiff to claim he was denied full and equal access on more than one occasion, because he must show that he acted reasonably, when visiting a location despite being aware of a barrier to access.

New damage limits: Damages are reduced under the law from $4,000 down to $1,000 per offense, where the defendant remedies the violation within 60 days and where either:

The property was inspected by a CASp and met the applicable standards. Further, no modifications or alterations have been made which affect compliance with ADA standards.

The property is currently in the process of being inspected by a CASp. The defendant has also implemented measures to correct the violation or was already doing so at the time of plaintiff’s denial of full and equal access.

The property was a new construction or improvement. The property was approved and inspected by permit and the related inspection process beginning January 1, 2008 or thereafter. Lastly, the property had no modifications or alterations which affected compliance with ADA standards.

The property was a new construction or improvement. The property was inspected and approved by a local CASp. No alterations or modifications affecting ADA standards had been made.

Small businesses may have minimum damages reduced from $4,000 to $2,000 where the business: 1) has had less than 25 employees on average over three years; 2) has averaged gross receipts of less than $3,500,000; and 3) corrects construction-related violations within 30 days of receiving the complaint.

Commercial Leases

Leases of commercial property entered into on or after July 1, 2013 must indicate whether a CASp inspection was made, and whether any violations were found. For more on this topic, see the nearby article on the CASp Report.

Miscellaneous

A $1.00 tax will be charged for applications for local business licenses or the equivalent. The funds will be contributed to the expansion of the CASp program.

Conclusion

SB 1186 helps level the playing field for landlords and businesses and leads to faster resolution of ADA claims.

Randy Ortlieb is the founder of the Palomar Law Group, whose practice emphasizes service to families and small businesses. For questions relating to this article or for assistance with a real property matter, please contact Landlord Tenant Lawyer Randy Ortlieb by calling (760) 747-2202.

[1] Stats. 2012, c. 383 (S.B.1186), § 1(b), eff. Sept. 19, 2012, operative Jan. 1, 2013.

[2] Id. at Section 1(c).

Trust and Estate – Inheritance Conflict

Mon, 22 Jan 2018 15:22:00 GMT

Protect Your Legacy from Inheritance Conflict

If you have a legacy, you naturally want to protect it. The list of risks to protect against is endless, and this article focuses on some common estate planning risks. I’ve handled many trust, probate, and estate disputes involving family estates over the years, and I’ve noticed some common mistakes that put family legacies at risk. These lessons can help reduce self-inflicted damage to a family estate. Call the experienced Trust and Estate Litigation Attorneys at Palomar Law Group for skilled assistance in any type of estate, probate, or trust dispute. Call (760) 747-2202 to arrange for your complimentary consultation .

Ways to Define and Protect Your Assets

Step 1: Define your legacy

Who (or what) is your legacy? The answer to this question may not be immediately apparent. The answer may surprise you. Everyone has a legacy that is unique to themselves and their circumstances. And values and priorities change over time. So the first step isn’t easy for everyone. Thinking about it and then talking with others about it will help you define your legacy.

Step 2: Protect your legacy

The basics. You can protect your legacy by yourself as long as you have (1) the capacity and (2) the skills to do so. Capacity is a broad and complex topic that requires a separate discussion, but it boils down to managing your affairs using your own wits. Skills are management tools that you either have from your own experience or that you can hire others to provide. For example, many people can manage their finances on their own, and many people hire a professional for technical jobs like filing tax returns, getting tax advice, and preparing an estate plan.

Learning from mistakes. We can learn from our own mistakes in the “school of hard knocks” – a frustrating but effective way to learn how to protect ourselves. Classic examples include loaning money work to friends, going into a business venture without prior experience, and selling a home without a realtor. We can also learn from the mistakes of others. That is the focus of this article.

Learning from the Mistakes of Others– 3 Real-Life Cases

Over the last 10 years I’ve had the opportunity to see first hand the aftermath of mistakes that people made when creating their family estate plan. I have gleaned three categories of mistakes from real life disputes. The 3 categories are (1) Neglect, (2) Indecision, and (3) Hiring Amateurs.

Note: these facts are from real situations. I have left out names and omitted many details in order to respect the privacy of the people involved.

Category 1: Neglect

Case Example – No estate plan

Second marriage
• New spouse and step children don’t talk
• Parent seriously disabled at early age by unexpected illness

Aftermath

New estate plan created after disability
• Children contest new estate plan and challenge father’s legal capacity
• Medical experts on opposite sides debating legal capacity
• Family business placed in limbo
• Family finances and discord made public

The lesson from this case is straightforward: don’t procrastinate. Get your estate planning done right away to lessen the risk of being caught unprepared.

Category 2: Indecision

Case Example 1 – Lack of follow-through

Substantial retirement account owned by parent
• Beneficiary designation to new spouse
• Verbal promise of substantial gift to children
• Parent dies but leaves nearly all money to spouse

Aftermath

Lawsuit by children alleging interference against new spouse
• 5 figure legal bills to litigate a settlement; medical expert required regarding capacity of parent
• Family finances and discord made public

My takeaway from this case is to grapple with the tough issues and don’t sweep them under the rug. If an allocation needs to be made between a spouse and children, then wrestle with the issue and get it done. Leaving it to chance risks injury to your family and the legacy you worked to build.

Case Example 2 – Changing the Estate Plan

Substantial brokerage account owned by couple
• Relative promised substantial gift
• Relative loses favor and couple disinherits in favor of neighbors

Aftermath

Lawsuit by relative alleging undue influence and lack of capacity
• 5 figure legal bills to litigate a settlement
• Family finances and discord made public

A good lesson here is that change isn’t necessarily a good thing. Patience and leaving the estate plan intact may be the wiser course than a last minute change that invites a challenge by the displaced heir.

Category 3: Hiring Amateurs

This is the most common kind of mistake that I’ve seen in these kinds of cases. Families doing estate planning and trust administration on their own, often without professional guidance or counsel. The results can be extremely damaging to the family and their legacy.

Case Example 1 – The DIY Estate Plan

Substantial brokerage account and residence in the estate
• Self-drafted trust created by settlor with multiple amendments
• Grandparent appoints grandchild as trustee
• Contentious heirs have access to estate planning documents during lifetime of the settlor and multiple versions of trust are created

Aftermath

Lawsuit by children alleging mismanagement, undue influence, etc.

Transfer of residence to daughter challenged

Questioned documents experts and medical expert required regarding alleged forgeries of estate planning documents and capacity of grandparent

Family finances and discord made public

The lessons here are obvious: (1) hire a lawyer to prepare the estate plan, and (2) restrict access to the documents. When a family allows anyone to grab the papers and make changes then the stage is set for mass confusion and contention when the settlor passes away.

Case Example 2 – Out thinking the Settlor

Valuable estate controlled by a long term trust with dozens of heirs
• Heirs make deal with corporate trustee to take over management of the trust instead of trust company
• Family trustees then distribute all income to themselves (less than 10 out of dozens)

Aftermath

6 figure legal bills to litigate dispute through trial
• Family finances and discord made public

A simple lesson here is to respect the settlor’s wishes. Tinkering with someone else’s estate plan is risky and can end up costing the estate dearly.

Case Example 3 – Opportunism

Mid-sized estate with residence and commercial property and brokerage account
• Parents appoint child as trustee
• Trustee loans money to self to buy a manufacturing business and cuts sibling out of the trust
• Sibling dies and grandchild asks for parent’s inheritance, and trustee refuses

Aftermath

Grandchild sues trustee for improper management of stocks over 20 years, disgorgement of profits from business worth high 8 figures
• Legal fees of 7 figures
• Judgment of 8 figures against trustee and very favorable settlement to contestant
• Family finances and discord made public

The lesson here is very simple – don’t create a situation that tempts a family member to treat the family assets as their own. If there is a chance of a lengthy administration, consider appointing a corporate trustee. Although it costs more, it can also be well worth the cost to avoid contention and very costly litigation.

The Key: Create a good succession plan. Most of the mistakes resulted from the failure to create a good succession plan for management of the estate.

Pointers for creating a good succession plan

Work on it, don’t procrastinate
• Make the tough decisions, allocate when necessary
• Hire a professional fiduciary?
• Hope for the best and plan for the worst

“Free advice” – Talk to an Estate Planning Professional

Top reasons why people see a lawyer to create an estate plan:

Avoid probate to protect privacy of family finances
• Sickness
• Age
• Children/ grandchildren

Call our Trust and Estate Litigation Attorneys for help with your trust, probate, or estate dispute. We use sound principles and practical guidance to help clients find solutions. Call (760) 747-2202, or contact us online.

Trust and Estate – Probate and Trust Disputes – Part 2

Mon, 22 Jan 2018 15:15:00 GMT

Sometimes after the death of a relative, an heir receives less or more than expected from the estate. When this occurs, the disappointed heir often asks, “What can I do to fix this?” The most common answer to that question is to become a contestant of the will and attack it by asserting the testator lacked testamentary capacity. This article explores what the law requires to prove lack of testamentary capacity to make a will. A similar evaluation but with added analysis of whether the trustor had capacity to enter into a contract, should be applied when a dispute arises as to the creation of a trust estate. In this article, all references to “Probate Code” refer to the California Probate Code. As experienced Trust and Estate Attorneys at Palomar Law Group , we offer a complimentary initial consultation to individuals involved in inheritance disputes. Call (760) 747-2202 to schedule an appointment.

Presumption of Capacity and the Right to Disinherit

The law poses two major hurdles to a capacity contest:

First, every testator is presumed to have capacity, and the contestant has the burden of proving otherwise.

Probate Code § 810 establishes a rebuttable presumption that “all persons have the capacity to make decisions and to be responsible for their acts or decisions,” and it recognizes that persons with mental or physical disorders “may still be capable of contracting, conveying, marrying, making medical decisions, executing wills or trusts, and performing other actions.” Given this presumption, a will is presumed valid.

To overcome this presumption, the contestant must “prove affirmatively, and by a preponderance of the evidence, that the testator [lacked testamentary capacity] at the time of the execution of the will.” In re White’s Estate (1954) 128 Cal. App. 2d 659, 666.

Second, in California, there is no “right to inherit” from a testator, no matter what the relation between the testator and the heir is.

“Testators have a right to completely disinherit nearly anyone. Munn v. Briggs (2010) 185 Cal. App. 4th 578, 586. Therefore, the contestant’s assertion that a testator made a substantial contribution to a charity or to someone outside the family, standing alone, does not help the contestant meet the burden of proving testamentary incapacity.

How to Prove a Deficit

As discussed in Part 1 of this article , a contestant asserting lack of capacity must prove the person in question had a deficit in one or more of four categories of mental functions.

A contestant must show the frequency, severity, and duration of periods of impairment of at least one of the mental functions categories. Probate Code § 811 contains a list of deficits that impair mental function and therefore have the potential to adversely affect creation of legally binding documents, including a will (or a trust):

Alertness and attention
Low levels of arousal or consciousness;
Disorientation to time, place, person, and situation; or
Inability to concentrate;

Information processing;

Decreased short and long term memory, including immediate recall;

Inability to understand or communicate with others, either verbally or otherwise;

Decreased levels of recognition of familiar objects and familiar persons;

Inability to understand and appreciate quantities;

Inability to reason using abstract concepts;

Inability to plan, organize, and carry out actions in one’s own rational self-interest; or

Inability to reason logically.

Thought processes
Severely disorganized thinking;
Hallucination;
Delusions; or
Uncontrollable, repetitive, or intrusive thoughts.

Ability to modulate affect

Pervasive and persistent or recurrent state of one or more of the following that is inappropriate in degree to the individual’s circumstances:

Euphoria;
Anger;
Anxiety;
Fear;
Panic;
Depression;
Hopelessness or despair;
Helplessness;
Apathy; or
Indifference

A deficit in at least one of these areas, together with a showing that the deficit significantly impaired the person’s ability to understand the consequences of executing the document, are required in order to support a finding of incapacity. Probate Code § 811(a) and (b).

The Struggle to Show Significant Impairment

A contestant may not satisfy his burden by merely showing a deficit in one or more of the aforementioned categories; such deficit must constitute “significant impairment.” Cal. Probate Code § 811(b). The second step of proving incapacity is for the contestant to show the deficit, by itself or in combination with another deficit, caused a mistaken transfer of rights. In other words, the contestant must prove that but for the deficit, the document would not have been signed.

Example of NO significant impairment:

The son of a testator contested the will on the basis that his father left him nothing because of the testator’s delusion that his son was stealing from him. Although the court found that there was evidence the delusion existed, the will was still upheld as valid. The delusion did not cause any mistake in the will because there was evidence that the contestant would have been written out of the will even if the delusion did not exist (e.g. the contestant had put his father in a retirement home that his father detested). See Dougherty v. Rubenstein (2007) 914 A.2d 184, 293-94.

Timing: When is Incapacity Relevant?

Finally, in addition to the foregoing, the contestant must also prove that the testator suffered significantly from the deficit at the time of the creation of the will. Even if a contestant proves the testator suffered from a sufficient deficit, the will can still be valid if it was created during a time when the testator was lucid. Anderson v. Hunt (2011) 196 Cal. App. 4th 722, 727.

Presenting Evidence of Incapacity

In addition to documentary evidence, a contestant may use the testimony of both experts and laypersons in proving the testator lacked testamentary capacity at the time of the creation of the will.

Expert Witnesses

The opinion of an expert witness well-versed in cognitive functioning can be very persuasive. These opinions are usually based on medical records, family histories, and (sometimes) the expert’s interactions with the testator. An expert witness is often most helpful in establishing the first step in proving lack of capacity, i.e., the testator suffered from a deficit. The deficit can best be proved by a medical diagnosis. One of the challenges faced by a medical expert is reconstructing a deceased person’s capacity based on statements in medical records, testimony of family and friends, and the like.

It is instructive to note that “the mere diagnosis of a mental or physical disorder” was held insufficient, standing alone, to support a conclusive determination that a testator lacked capacity. Cal. Probate code § 811(d) (Emphasis added). The court stated that the testimony must also connect the mental deficit (which may be proved by diagnosis) and the creation of the disputed will. Unless the expert witness has had some first-hand experience with the testator, his or her testimony may not be persuasive of the capacity determination because of the inability to provide evidence of the connection. See Estate of Goetz (1967) 253 Cal. App. 2d 107.

Nonetheless, if the medical expert testifies to the deficit and a connection to the will, and that to a degree of medical certainty the testator probably lacked capacity when the will was signed, then the contestant meets their burden of proof and the burden shifts to the opposing party. If an opposing expert testifies, it is the court’s duty to consider and evaluate the likely conflicting opinions and render a decision based on the more credible opinion.

Laypersons (Non-Experts)

A common part of capacity disputes is the testimony of family and friends of the testator who have knowledge of the testator’s behavior at the time of the execution of the will. The testimony of friends and family members about the testator’s behavior, routines, habits, and personality traits (and changes thereto) can help illuminate any potential connection or effect that the testator’s mental state had on the creation of the will.

Conclusion

Proving a testator lacked testamentary capacity is a daunting task. The potential reward of a successful challenge, however, has long convinced frustrated heirs to attack the estate plan in an effort to uphold the perceived wishes of the testator. Knowing the kind of evidence required in order to meet the burden of proving incapacity is essential before launching an attack on a will or an estate plan. Contact our experienced Trust and Estate Litigation Attorneys to discuss you concerns about a will, trust or probate issue. Call (760) 747-2202, or contact Palomar Law Group online.

Trust and Estate – Probate and Trust Disputes – Part 1

Mon, 22 Jan 2018 15:09:00 GMT

Legal capacity – also known as being of “sound mind” – has specific legal definitions in probate and estate planning disputes. The law recognizes that the level of understanding necessary to execute a document varies with the complexity of that document.

This article concerns evaluating the most basic level of capacity, which is required to make a will. Evaluating the capacity to create a trust involves a similar analysis but with the added requirement of assessing the complexity of the estate plan and the related trust document. It is widely felt among probate practitioners that the level of capacity to create a trust is often greater than needed to make a will. Contact Palomar Law Group for assistance in any probate or trust dispute. Schedule your free consultation by calling (760) 747-2202.

Definitions

Testamentary Capacity: The mental ability that a person must have to prepare a valid will. Sometimes referred to as “of legal age and sound mind.”

Testator: Person who makes a will.

Capacity to Make a Will?

Probate Code § 6100.5 states a testator must have an understanding of the following in order to have the requisite testamentary capacity:

Nature of testamentary act (“What am I doing?”);
Extent and character of the testator’s property (“What do I own?”); and
Relationship to family members and all others whose interests may be affected by the will (“Who will inherit?”)

Further, in order to have testamentary capacity a person may not suffer from:

A mental disorder with symptoms including delusions or hallucinations; and
The delusions or hallucinations cause the testator to devise his property in such a way that he would otherwise not have done.

Analyzing Capacity – Two Factors

Factor One: Is or was there a deficit? Probate Code § 811 sets forth four categories of mental functions. A person may lack testamentary capacity if he has a “deficit” in one or more of the following categories:

Alertness and attention;
Information processing;
Thought processing; and
Ability to modulate mood and emotions

Factor Two: Does or did the deficit cause significant impairment? If it can be shown that a person had a deficit in one or more of the above mental functions, the next step is to assess whether that deficit “significantly impaired the person’s ability to understand and appreciate the consequences of his or her own actions” with regard to the creation of a will. Probate Code § 811(b) (emphasis added).

Significant Impairment

The deficit must have significantly impaired the testator’s mental processing enough to have obscured or confused his understanding of the will. In other words, the deficit must have caused the decedent to mistakenly create a will or bequeath the property in question.

Erratic Behavior Alone Does Not Prove a Significant Impairment

Evidence consisting solely of loss of function such as forgetfulness and mental confusion, and even behavior that seems outrageous or antisocial has been repeatedly rejected by the courts as proof of testamentary incapacity. One appellate court opinion states:

“[O]ld age, feebleness, forgetfulness, filthy personal habits, personal eccentricities, failure to recognize friends or relatives, physical disability, absent-mindedness and mental confusion old age, feebleness, forgetfulness, filthy personal habits, personal eccentricities, failure to recognize old friends or relatives, physical disability, absent-mindedness and mental confusion do not furnish grounds for holding that a testator lacked testamentary capacity.” Estate of Selb (1948) 84 Cal. App. 2d 46, 49-52.

Thus, aberrant or eccentric behavior alone is not enough to prove incapacity.

Examples:

In one case, the court determined the testator had capacity even though he was “eccentric,” forgetful, and child-like; he slept on a cot without a mattress and wore clothing that was so soiled and worn that it fell to pieces; and he had a “mind that seemed like it would drift off onto other subjects altogether.” Estate of Agnew (1944) 65 Cal. App. 2d 553. Despite this eccentric behavior, the court of appeal reversed the judgment of the trial court, finding that the challenger failed to prove lack of testamentary capacity.

In another case, around the time the testator signed his will, he exhibited the unusual behavior that persuaded the trial judge to find he lacked testamentary capacity and to deny his will into probate:

He lived alone in a junk-filled dirty shack;
He gave someone a fish he had said he had caught, and the person discovered it was soaked in kerosene;
He would often run out of the house partially dressed or with nothing but a blanket wrapped around him;
He picked up articles out of garbage cans and hid them around his house; and
He would pin paper flowers to his rose bushes,

Despite this odd behavior, the Supreme Court reversed the judgment of the trial court and found that the contestant failed to prove lack of testamentary capacity. Estate of Wright (1936) 7 Cal.2d 348.

Conclusion

Testamentary capacity has a very specific definition which requires more than proof of debility and eccentric behavior. Which begs the question, how can incapacity be proven?

Contact the experienced Trust and Estate Litigation Lawyers at Palomar Law Group to discuss your trust, probate, or estate dispute. Call (760) 747-2202, or contact us online.

Business Law – Writ of Attachment

Mon, 22 Jan 2018 15:04:00 GMT

A major concern collecting a business debt is whether the debtor has the assets to satisfy a money judgment and whether the assets will be available once a judgment is rendered for the creditor. The writ of attachment is a powerful tool to secure property of the debtor at the beginning of the case, in order to satisfy money judgment.

For skilled legal assistance in collecting business debt, contact the experienced business attorneys at Palomar Law Group . We offer a complimentary consultation to discuss your concerns and find workable solutions. We can be reached by calling (760) 747-2202.

What is an Attachment?

Attachment is a provisional remedy, obtained before an actual judgment is rendered and even before trial, intended to secure assets in order to satisfy a future judgment.

Restrictions

Pre-judgment attachments are generally available in civil actions involving claims for money. However, there are four restrictions on the kinds of actions in which attachment is authorized. Nakasone v. Randall (1982) 129 Cal.App.3d 757, 761-62.

The first is the claim must be based on an expressed or implied contract. C.C.P. § 483.010(a). Second is the total amount at issue must be a fixed or readily ascertainable amount of $500 or more, which may include costs and fees. C.C.P. § 483.010(a). Third, the claim must not be secured or, if it is secured, the security must have no value or a value that is less than the amount of the claim. C.C.P. § 483.010(b). Lastly, if the action is against a person, an attachment may be issued only on a debt which arises out of a trade, business or profession. C.C.P. § 483.010(c); 492.010(a).

The burden is on the creditor to prove that he or she has a right to attach the debtor’s assets according to the statutory requirements listed above and that the claim is probably valid. C.C.P. § 484.090.

Validity of attachments

The necessity for the strict statutory requirements is due to the constitutional attack on the validity of pre-trial attachment orders. In 1969, the U.S. Supreme Court held that attachment orders, pretrial wage garnishments in particular, are a violation of constitutional due process when property is taken or secured without prior notice and a hearing, except in extraordinary circumstances. Sniadach v. Family Finance Corp. of Bay View (1969) 395 U.S. 337, 341, 342.

In 1971, the California Supreme Court decided in a similar fashion by holding that pretrial attachments of bank account, without due process of law, are an unconstitutional deprivation of property. Randone v. Appellate Department (1971) 5 Cal. 3d 536, 563-564. Since then, California has amended existing pre-trial attachment statutes protecting individuals’ rights to property while also protecting individuals’ rights to secure property to satisfy an eventual judgment.

What can be attached?

Property is defined by the California attachment statutes to include both real and personal property or any interest in either. C.C.P. § 481.195. Personal property may be tangible or intangible, including money, chattel paper, documents of title, instruments, securities and general intangibles, as well as equipment, inventory and accounts receivable. C.C.P. §§ 481.020-481.225.

Individuals

In California, the list of attachable property owned by an individual is defined by statute. C.C.P. § 487.010. California also provides a list of property exempt from attachment, which includes any property that is exempt from enforcement of a money judgment, property necessary to support a debtor and his or her family, earnings, and all property not defined by statute to be attachable. C.C.P. § 487.020. A debtor may claim that his or her property is exempt by statute and a granting or denial of an exemption claim is subject to appeal. C.C.P. § 703.600.

Business entities

When the debtor is an entity, such as a corporation, partnership, or association, all property held by the entity is available to attach by the creditor. C.C.P. § 487.010.

Procedure to attach property

In order to attach the debtor’s property, the creditor must obtain a right-to-attach order and a writ of attachment, both applied for in a single form. C.C.P. § 484.010. A right-to-attach order is provided if the claim can support the issuance of a writ of attachment and a writ of attachment will not be issued unless the court determines that the property to be attached is not exempt. C.C.P. §§ 487.010-484.110. After issuance of the right-to-attach order, the creditor can obtain writs for attachment of other additional property, as long as that property is not exempt. C.C.P. §§ 487.310-484.370.

Two methods are available to obtain a right-to-attach order:

Noticed hearing procedure

The most common method to obtain a right-to-attach order is by a noticed hearing method. The notice of hearing and application for a writ of attachment must be served to the debtor at least 16 days before the date set for the hearing and the debtor’s notice of opposition must be filed and served at least five days before the hearing. C.C.P. §§ 484.020-484.060.

Ex parte procedure

The second method is by an ex parte application for a right-to-attach order or for a temporary protective order.

If a creditor shows that he or she will suffer great or irreparable injury by the delay of the issuance of the writ of attachment until after a noticed hearing, a writ may be issued based on an ex parte application. C.C.P. § 485.010(a). In ex parte procedures, the creditor is only required to give a one-court-day notice prior to the presentation of an ex parte application, substantially shorter than the 16 day notice for the noticed hearing procedure. C.R.C. 3.1203(a).

Great or irreparable injury can be shown if there is a danger that the property to be attached may be concealed, substantially impaired in value, or made unavailable to the levy of an attachment. C.C.P. § 485.010(b)(1).

Great or irreparable injury can also be shown if the debtor is insolvent to the extent that he or she is past due on his or her debts. CCP § 485.010(b)(2).

“Probable validity”

In either method to obtain a right-to-attach order, the creditor must prove by affidavits the “probable validity” of their claim. C.C.P. § 483.030.

Attachment bond

Before a creditor is granted a right-to-attach order, the creditor must file an undertaking or a bond in a sufficient amount that would protect the debtor should damages arise from a wrongful attachment. C.C.P. § 489.210. Right-to-attach orders require a bond and, if the bond is not filed when the writ of attachment is granted, the writ is invalid. Vershbow v. Reiner (1991) 231

Cal.App.3d 879.

The undertaking must be in the minimum amount of $10,000, which may be increased by the court if the debtor can show that the damages for wrongful attachment would exceed this amount. C.C.P. § 489.220. Also, when the creditor serves the notice of attachment to the debtor, he or she must also disclose the debtor’s right to object to the undertaking. C.C.P. § 489.230.

A debtor may take advantage of an undertaking by filing one to obtain the release of an attached property. Upon the issuance of a writ of attachment, a debtor may move the court to substitute a bond for the property that had been attached. C.C.P. § 489.310(a).

Temporary protective orders

A creditor who had filed an application for a right-to-attach order and a writ of attachment through the noticed hearing procedure may also simultaneously apply for a temporary protective order, which places an immediate lien on the property described on the order for 40 days, at which point the order expires or merges into a subsequent attachment order. C.C.P. §§ 486.050-486.100.

If a creditor pursues the ex parte procedure, the court had discretion to deny the ex parte request and convert the procedure to a noticed hearing procedure and issue a temporary protective order. C.C.P. §§ 486.010; 486.030. Similar to attachment procedures, a creditor would have to file affidavits in support of the court granting a temporary protective order on the debtor’s property.

Conclusion

For collection of business debts, there is no more effective tool to secure payment than a writ of attachment. In an appropriate case, attachment can literally save the debt from becoming uncollectible by requiring prompt payment of the debt before a debtor goes out of business or into bankruptcy.

For questions relating to collection topics or for assistance with collecting business debts contact Randy Ortlieb at the Palomar Law Group. Call (760) 747-2202, or contact us online.

Trust and Estate – Awesome Trustee

Mon, 22 Jan 2018 14:58:00 GMT

So, you want to be a trustee? That’s great, because it’s a very important job. Be careful what you wish for, however. The fact is that being a trustee is hard work, often for very little (or no) compensation. For those who believe that hard work is its own reward, a trustee job suits them well. For others who want something tangible in return for their work, another kind of work will probably suit them better. At Palomar Law Group, our knowledgeable Trust and Estate Attorneys provide sound counsel to trustees. Call (760) 747-2202 to schedule a complimentary consultation .

Topics for Trustees to Consider

Here are some topics for thought:

Understand the position.

The trustee’s job is to serve the beneficiaries. The trustee must work diligently to serve others’ interests, and must place their own interests in a subordinate position to the interests of all the beneficiaries.

Remember who is the Boss.

We all know the slogan “The Customer is Always Right.” The office of trustee was created to serve the beneficiaries. Also remember that is the settlor who created the trust and all of the rules in it, and the trustee cannot change these rules. Nor can the trustee ignore the rules. The trustee is strictly bound to follow the rules set forth in the trust document. Further, the trustee is strictly bound by many rules outside of the trust document, including the prudent investor rule and rules against self-dealing.

Be prepared to be walked on. Because of our suspicious nature, the trustee is often suspected of wrongdoing merely because they have access to the assets of the estate. So, even a trustee who is doing a good job can be subject to unjust and unfair criticism, and other disrespectful treatment.

Don’t expect any thank you notes. When the trustee performs their job well, others often don’t seem to notice. This is the paradox of a job well-done as a trustee. Not only does a good job usually go unnoticed, it is also usually uncompensated.

A higher calling.

Being a trustee is a higher calling, far outside of normal human experience. It is therefore a potentially dangerous trap for unwary amateur trustees.

Getting prepared. A wise trustee takes stock of the assets of the trust and seeks professional advice before embarking on the work. Consultation and planning are very important.

Remember the parable of the talents.

Three servants are entrusted with money. Two of them work hard to use and increase the money and are rewarded for their work with praise and greater responsibility. A third servant is suspicious and lazy and buries the money, thus gaining nothing. When the truth is discovered, the servant is fired and banished for negligence and insubordination. The moral of the parable is that loyal diligence is rewarded, and laziness is punished. The Courts are the watchdogs of trustee performance. Judges do not hesitate to order repayment of losses caused by mismanagement.

Lessons from the trenches.

I have personally been involved in disputes in which trustees have committed serious blunders. I have seen trustees who have actively engaged in changing estate planning documents while the settlor was alive; trustees who have paid themselves exorbitant management fees; and trustees who have loaned themselves money from the trust, engaged in risky investments, and have failed to prudently invest assets. I have even seen trustees accused of forgery and theft.

The lessons are simple but not easy: (1) a trustee must strive to live up to the Scout Law,* and (2) should avoid even the appearance of self-dealing or conflicts of interest.

Hiring a Professional?

Some people aren’t sure if they (or their chosen trustee) can do the hard work of a trustee. In that case, they should seriously consider finding another person such as a professional trustee. It’s true that a professional trustee costs more, but the value provided is easily justified.

The Bottom Line.

If you want to be a trustee, make sure your eyes are wide open before you accept the job. When you accept and welcome the hard reality of the job, you are ready to begin planning for the job. Only then are you on your way to being an awesome trustee.

* The Scout Law reads: “A scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent.”

For skilled guidance in trust and estate matters, contact Palomar Law Group by calling (760) 747-2202.

Real Estate – Home Sale Nondisclosures

Mon, 22 Jan 2018 14:52:00 GMT

Nondisclosure – a recurring theme in home sales which dates back to the Middle Ages, or even earlier. What is it, and how should it be handled?

Simply stated, nondisclosure is any condition of a home that two sides of the sale disagree about. It could be the roof, or termites. The home buyer is often convinced that the seller concealed a hidden problem from them. The seller is convinced that there is no problem and that the buyer should accept the property “as-is.”

The wide gap between these ironclad feelings creates the potential for the two sides to spend vast amounts of legal fees and emotional energy. Which begs the question – who’s right? And also the ultimate question – how do we deal with it?

Contact the experienced Real Estate Attorneys at Palomar Law Group for answers. Call (760) 747-2202 to schedule a free consultation .

Residential Real Estate Disputes in Escondido, CA

Caveat Emptor. Under the traditional rule of caveat emptor, a home buyer was essentially deemed to assume the risk of all defects, with a few very rare exceptions. So, if a roof or window leaked, the buyer handled it. If a crack was discovered in the slab, the same result would apply. Sellers loved this rule. Buyers hated it and it led to some very bad results. Eventually the law had to change.

Today’s Rule. The rule of caveat emptor in home sales has gradually disappeared. The law in California now requires a pre-closing disclosure of significant problems whenever a residence is offered for sale.

31 Questions. Significant problems are defined by the law and boil down to 31 questions in 2 main categories: (a) deferred maintenance such as roof leaks and cracked slabs and (b) legal issues such as CC&Rs and lack of building permits. The required disclosures – on a form called the TDS (for Transfer Disclosure Statement) – are part of the Civil Code (Section 1102.6). Nearly all nondisclosure disputes involve one or more of these 31 main topics.

Common Disputes. Some of the more common types of disputes involve unpermitted room additions, roof leaks, cracked slabs, soil problems, encroachments, noise and even bad odors (in the case of a nearby egg ranch).

Explosion of Nondisclosure Claims. In 1984 a court of appeal opinion in a landslide claim made it easier for buyers to file claims for nondisclosure, especially against the brokers involved. The TDS law went into effect in 1988. The real estate industry had a real problem dealing with the increased volume of claims. The costs in time and money were staggering. Insurance carriers came to California and then left abruptly due to the onslaught of claims.

The Solution. The industry had to find a solution. Early attempts included binding arbitration which helped but wasn’t strong enough. Today the situation is better with the nearly universal acceptance of mandatory mediation followed by binding arbitration.

Why it Works. Mandatory mediation successfully resolves most nondisclosure disputes because in theory it provides the parties with the benefits of a trial – a full presentation of their claims and defenses to a neutral party – in an abbreviated and less costly process. The parties are essentially forced to gather their evidence and present their strongest case early on, instead of waiting for many months or years. For instance, a trial can take a year and cost $100,000 or much more. A mediation can resolve a claim in around 60 days for about 1/5 the cost of a trial.

Timing is Everything. The preferred scenario is dealing with the issues early in the transaction, well before the closing. When the property is listed for sale, the seller with prompting from their agent should diligently and thoroughly disclose all known problems, possibly even including past repairs. A buyer with guidance from their home inspector should investigate, inspect thoroughly and ask questions. Ideally there will be a pre-closing discussion of all important issues, and a resolution of all issues that is documented in writing. The nightmare scenario is to wait until after the closing to address a problem. This situation usually results from inadequate planning, poor communication, inattention and unrealistic assumptions.

Not a Panacea. Finding yourself in mediation is not the preferred solution, since it is far costlier than a pre-closing negotiation. But mediation gives both sides in a nondisclosure dispute the opportunity to present and debate their claims, and then resolve them in a fraction of the time and expense of a traditional trial.

Real Estate Lawyer Randy Ortlieb has handled many different kinds of real estate nondisclosure claims . If you have questions, contact Randy at the Palomar Law Group. Call (760) 747-2202, or contact us online.

Landlord Tenant – The CASp Report

Mon, 22 Jan 2018 14:44:00 GMT

First, some bad news for landlords and their property managers. A CASp report[1] is now required by law for commercial properties when a lease is negotiated. The good news: when you have a CASp report, you have the power to correct accessibility problems and to better defend ADA lawsuits. If you are facing a lawsuit for ADA violations, contact the experienced Landlord Tenant Attorneys at Palomar Law Group. Call (760) 747-2202 for a free consultation .

CASp Report Basics

Here are the basic topics the CASp report should cover:

A description of the facility. This should include characteristics such as on-site parking and the type of occupancy.
Descriptions of all access barriers (by priority under the ADA).
Photos of the barriers.
A plan for removal of barriers, based on the scope of work and your budget.

Taking Action

The CASp report is your roadmap to ADA compliance. The correction process may take a few days, or it may take months. Here’s how to use the road map:

Review and highlight all access barriers and violations. Correction of these problems within a reasonable time is required by law.
Review and highlight the suggested corrective action. The CASp report should provide options for correction of all ADA problems.
Obtain bids for the corrective work. Seek out contractors with experience in ADA compliance.
Prepare a plan and budget. You can create a plan to address the ADA problems gradually, as the cost is spread out over months or longer.
Do It. Start the corrective work as soon as possible. Diligence is very important in case a lawsuit is filed before all the work is complete.

The Good News. A CASp report can help you defend ADA lawsuits, ensure compliance with accessibility requirements, and give you reasonable time to make corrections. The report will allow you to decide how and when to address your ADA problems.

Randy Ortlieb is the founder of the Palomar Law Group, whose practice emphasizes service to families and small businesses. For questions relating to this article or for assistance with a real property matter, or landlord tenant issue, please contact Mr. Ortlieb at Palomar Law Group.

[1] A CASp report is prepared by a licensed CASp. Here is a list of CASp service providers .

Real Estate – Easements

Mon, 22 Jan 2018 14:36:00 GMT

Easements – A Lesson in Sharing

By Randy Ortlieb

What does sharing have to do with easements? Sometimes, our selfish nature gets the better of us and we fight over things that should be shared. Easement disputes can often be solved by a better understanding of how conflicting uses should be shared. Courts will often require sharing even when the parties don’t want it. Contact our experienced Real Estate Attorneys at Palomar Law Group for assistance with an easement dispute. Call (760) 747-2202 to schedule a complimentary consultation.

What Are Easements?

An easement is a sharing of land between a land owner and a land user. Common easement uses are water supply pipes, telephone poles, driveways and roads, and views. The user of an easement is sometimes called the dominant tenant. The owner of the land on which the shared use is located is called the servient tenant. When one or both parties refuse to share, then the law operates to enforce the sharing.

Most easements are permanent and run with the land of the dominant tenant – the technical term for a permanent easement is appurtenant easement. An easement is different from a license. When the use of land can be terminated at will by the servient tenant, it is a license rather than an easement. A license is a revocable nonpossessory right to us land for a limited purpose, like parking in a parking lot.

How Are Easements Created?

There are several ways an easement is created: 1) by express grant or reservation; 2) implied grant or reservation; 3) adverse use (prescription); 4) necessity; 5) equitable easements; and 6) private condemnation.

Express Easements. An express grant of an easement is created when the owner of the property conveys the easement to someone else. An express reservation is when the actual owner conveys actual ownership interest in his whole, or part of, his property but retains the right to an easement on the conveyed property. An express easement can be created by any instrument that transfers an interest or estate in property. Examples are deeds, wills, agreements, or recorded covenants. This is the most desirable and simplest way to create an easement, as it is defined in writing and clearly shows which property has a legal right to the easement.

Implied Easements. An easement can be created by implication under various circumstances, usually determined when the trier of facts, such as a jury, concludes that the parties intended to create an easement, even if they failed to expressly establish it. Implied easements usually arise when the original owner subdivides his land and leases or sell a portion of it and when a use of the land existed before the conveyance. Denying an easement in these circumstances would deny the new owner or tenant full enjoyment of the premises. An implied easement can only be created under circumstances that an express easement could have been created.

Prescriptive Easements. An easement can be created by prescription, which is analogous to adverse possession. Most of the elements needed in adverse possession are applicable to prescriptive easements. As long as the elements are met, a dominant tenant would have an easement on the servient tenement, without an express or implied easement. The person claiming prescriptive easement must establish use of the property, which is uninterrupted for 5 years and done without permission of the servient tenant. The requirements are similar to those needed for adverse possession, with one key difference: prescriptive easement does not require the dominant tenant to pay taxes in order to claim the easement.

Easements by Necessity. An easement can be created by necessity. Easements by necessity are somewhat rare. However, in certain situations, courts may recognize an easement because the law favors the use of land and an easement is needed to use the land. A common situation is when a subdivision of property creates a landlocked parcel of land. Prior creation of the easement before the transfer of title, which is required for implied easements, is not needed. An easement by necessity only lasts as long as the necessity exists. If a parcel of land can be reached by another way, regardless of inconvenience, necessity will usually not be found.

Equitable Easements. In cases where the usual easement elements are not present, such as encroachment cases, courts can exercise their equity powers to grant protective interests in land belonging to another, an interest commonly known as an equitable easement. To create an equitable easement, three factors must be present: 1) the easement seeker must use and improve the property innocently, as in the encroachment must not be willful or negligent and a court should weigh the parties’ conduct to determine their responsibilities for the dispute; 2) the actual owner will not suffer irreparable harm by the creation of the easement; and 3) the hardship of denying the easement must be greatly disproportionate to the hardship of allowing it.

Private Condemnation. An owner may acquire an easement through private condemnation (similar to eminent domain) in order to provide utility services to his or her property, including water, gas, electric, drainage, sewer, and telephone service. In order to acquire an easement through private condemnation, the dominant tenant must show a public necessity and is required to establish the following: 1) there is a great necessity for the taking; 2) the location of the easement affords the most reasonable service to the dominant tenement, consistent with the least damage to the servient tenement; and 3) the hardship to the dominant tenant, if the taking is not permitted, clearly outweighs any hardship to the servient tenant. A similar temporary taking is authorized for repair of land or improvement.

Sharing Put to the Test – Disputes

Sharing comes in handy in untangling easement disputes.

Access Easements. A common question is whether the servient owner can place a gate across a driveway, ostensibly for security reasons but often only after a dispute arises. It all comes down to how the trier of fact defines a proper sharing of the benefits and burdens of the easement. A simple question to ask is whether the obstruction is an unreasonable interference with the use. So, is a chained gate unreasonable? Quite probably. Is a motorized gate with a keypad unreasonable? Maybe not. How about speed bumps? Possibly, but not necessarily. My take is that if your client is being a good citizen and sharing, there’s a good chance they can prevail in their dispute.

View Easements. A view easement prevents an adjoining servient tenant from obstructing the view of the dominant tenant. Is an owner unreasonably interfering with a view that is protected by an easement? How can the owner and neighbor equitably share the limited space available and still satisfy their needs? It is helpful to note that public policy favors property development, so view easements are strictly construed by the courts. View easements can only be created expressly; in California, implied and prescriptive view easements are not recognized.

Terminating an Easement

A party only has a limited number of options to terminate an easement. The simplest way to terminate an easement is through the language in the grant. An easement may be created temporarily or conditionally. If the time limit or condition is no longer applicable as described by the grant, the easement is automatically terminated.

Merger can also terminate an easement. If a servient tenant acquires the dominant tenement, the easement can be automatically terminated. Likewise, if a dominant tenant acquires the servient tenement, the easement can be automatically terminated, since the dominant tenant now also has the actual title to the property.

Parties can also agree to terminate an easement by the holder of the easement giving a release deed to the servient tenant. The deed transfers the easement and the easement then merges into the servient tenement. Just as the creating of an express easement requires formalities, the release deed also requires the same formalities. Just a verbal notice to terminate an easement or nonuse of the easement does not automatically terminate the easement. However, courts may find that an easement is terminated by a verbal notice followed by nonuse of the easement, which has to be long enough to prove the intent to terminate the easement. A similar concept is abandonment, which can result in termination of an easement.

An easement can also be terminated by adverse use by the servient tenant or other third parties. If a servient tenant or another party obstructs the easement and the dominant tenant does not assert a cause of action, the easement is then lost. The rules of prescriptive easement apply in these cases. A similar situation is called abandonment, when nonuse together with other conduct is found to result in a loss of the easement rights.

Construction – Contracts for Construction

Mon, 22 Jan 2018 14:27:00 GMT

Contracts for Construction – Getting Your Forms in Shape

Good contract forms are a must for every business. In the construction business, a well-written agreement with carefully prepared provisions can be a huge advantage whenever a dispute arises; these provisions can spell the difference between a prompt and favorable result, or a drawn out and costly legal battle. These benefits are priceless since they allow the business to concentrate on the project, without the worry and expense of litigation. As experienced Construction Law Attorneys, we can help you get your forms in shape. Call (760) 747-2202 to schedule your free consultation.

Construction Contracts

The Owner Contract. Contracts between a general contractor and the owner should contain important protections for the contractor, including:

Scope of work. A carefully defined scope of work with reference to updated drawings. There is no more important aspect of the owner contract than a clear description of the project, and the scope of work.
Budget. Is the budget clearly stated? Does the budget match up with the scope of work?
Proof of funding. When an owner lacks adequate funding for the project, disputes and frustration are highly probable. Proof of funding, including the name and address of the construction lender, is critical.
Completion date. A carefully prepared schedule with ample time for completion of the project is essential.
Delay provision. An owner contract without a delay damages provision for late completion can create huge risks for the contractor. The solution is a carefully drafted and negotiated delay damages provision that puts a cap on delay damages and allows extensions of time for delays outside of the contractor’s control.
Payment. Good payment applications are crucial. Do the applications track the budget? The contract should describe the form and the process for review and approval of the applications, and for payment on a regular basis.

The Subcontract. A good subcontract form should protect the general contractor with provisions like these:

Failure to perform. One of the most common disputes in construction is a failure to perform by a subcontractor. If a general contractor has a good subcontract form, powerful remedies will be available such as rapid termination of services, back-charging for the cost of completing the work, reimbursement/indemnity, and mandatory mediation/arbitration.
Failed work. If a dispute involves failed work, some of the remedies available under a good contract form include: rapid correction requirements, termination of services, back charging, Insurance certificates for the General contractor and owner, indemnity, and mandatory mediation/arbitration.
Insurance covering both the general contractor and the owner is essential. Careful attention to proper insurance is essential. Does the subcontract require the needed coverages and prudent policy limits?
Integration with the Owner Contract. The subcontract should incorporate the schedule, drawings, and insurance provisions of the Owner Contract.

Other Contracts. Other contracts that should be carefully reviewed include indemnity agreements between lenders and general contractors and owner contracts with specialty contractors. These contracts should be carefully reviewed to ensure adequate protection for the contractor.

Getting Your Forms in Shape. Our attorneys have more than 30 years of experience handling construction disputes, representing general contractors, subcontractors, design professionals and material suppliers. Our attorneys can help review your forms and spot potential weaknesses. When necessary, we can help reach rapid resolution of late payment, substandard work, failure to perform, delayed completion, and other types of construction disputes.

Contact the experienced Construction Lawyers at Palomar Law Group at (760) 747-2202 for skilled legal advice and counsel with any type of construction contract. We can also be reached online.