Why Your LLC Needs an Operating Agreement

Lots of small businesses decide to become LLCs. When that business has more than one owner, an operating agreement is crucial. Handshake agreements and free forms cannot replace careful planning. Often disagreements can arise between business partners when it is too late to work through them. Here are some issues that can be solved with an operating agreement for an LLC:

  • What percentage of the LLC does each member own?
  • Who will manage the day to day affairs of the LLC?
  • How will profits be distributed?
  • In what proportion will profits be distributed?
  • How can members sell their portion of the LLC?
  • What are the voting rights?
  • Can members compete with the company?

Think about a two person LLC. John and Greg agree to a 50-50 split on everything. They’ve been working together for years. They started the LLC together. Two years later, with the business booming, John decides to sell their share to someone completely unknown to Greg. Without an operating agreement, Greg is powerless to stop John’s sale. Now John is partners with someone he knows nothing about.

While hiring a lawyer may not be on the top on the list for a small business, it really should be. These issues are much more difficult and more expensive to deal with once they become issues. It is like ignoring going to the doctor to treat a small issue and finally going when you need major surgery. Figuring out and planning out these issues are crucial for any small business. That is why your LLC needs an operating agreement.

Despite RXs, Tiger Woods May be Convicted of DUI

One of the things I often hear from clients charged with a DUI is that “I had a prescription for that medication.” In the State of Florida, that is not a legal defense for a DUI as we will likely see from the recent arrest of Tiger Woods in Palm Beach County, Florida.

Tiger Woods was arrested this weekend on suspicion of DUI. He took a breathalyzer test and blew a .000, meaning there was zero alcohol in his blood. This does not mean that he will be able to walk away without a conviction though. He stated to police that he takes several medications, and this morning he gave a statement that this was caused by an “unexpected reaction to prescription medications.” Although the fact that it was a prescription medication can be used as mitigation in order to possibly negotiate with the State Attorney to knock the case down to a lower charge, the law does not make an exception for whether the medication is prescribed or not.

To be convicted of a DUI in Florida one must:

  1. Be driving or in actual physical control of a vehicle;
  2. Be under the influence of alcoholic beverages, any chemical substance set forth in s. 877.111, or any substance controlled under chapter 893; AND
  3. That person must be affected to the extent that the person’s normal faculties are impaired

There is one final caveat. As you can see above in 2, the substance must either be alcohol or a substance set forth in those above two statutes. While medicines like Ambien and Promethazine can certainty impair ones normal faculties, they are not listed in the above statutes, and one cannot be convicted of a DUI based upon taking medicines like these. Obviously one should not drive under any substance that can cause impairment.

Last month, Tiger had his fourth back surgery, a spinal fusion. I am speculating that at least one of the medicines he was prescribed was a controlled substance under chapter 893. Also, according to the probable cause affidavit, Tiger agreed to a urine sample. Soon we will see exactly what type of medication he was on. Ultimately, whether he has a prescription to these medications will not be a legal defense.

States Cannot Keep Fines from Exonerated

The Supreme Court recently held that those who have had a criminal conviction overturned, but had paid restitution while awaiting the outcome of their appeal, must be refunded that money. Some may be left scratching their head that this made it all the way to the supreme court, but it was not a unanimous decision. Despite the fact that their convictions were overturned, the state of Colorado insisted on keeping the restitution. This case, titled Nelson v. Colorado, was a 7-1 decision, with newly appointed Justice Gorsuch sitting this one out.

Colorado had adopted an exoneration act that allows “an innocent person who was wrongly convicted” to file a civil suit to seek refunds but only if they could prove their innocence. This would flip the presumption of innocence on its head, according to the majority opinion written by Justice Ginsburg. She eloquently wrote “Colorado may not presume a person, adjudged guilty of no crime, nonetheless guilty enough for monetary extractions.”

Justice Thomas was not convinced that those who had their cases overturned had “any substantive entitlement, under either state law or the constitution” to the previously paid money. He reasoned that since the defendants were not wrongly deprived of the money, the state did not have to provide a process for its return. UCLA law professor Stuart Banner and the UCLA Supreme Court Clinic appealed the case for Mr. Nelson and noted that Colorado was the only state that regularly refused to refund money from those whose convictions were overturned.

“Stand Your Ground” Set To Expand

The State of Florida has one of the strongest protections for those claiming self-defense in the entire country. Now, that protection is almost certainly going to get even stronger. A technical change to how these cases play out in the courtroom will make it easier than ever for someone to prevail on a self-defense claim.

If one is charged with using or threatening to use violence, they can raise self-defense in all 50 states. However, in Florida, one gets the ability to raise this defense before having to go to trial. In this sense, a defendant can get two bites at the apple. First a defendant can raise self defense in a pre-trial evidentiary hearing asking the Judge for immunity from prosecution. Then even if the defendant loses this hearing the case continues. They have not been convicted of any crime and they can still proceed with a self-defense claim at trial.

Previously at these pre-trial hearings, the defendant had the burden of proof, to prove that their actions constituted self defense. Now, once the defendant provides some competent evidence that his or her actions constituted self defense, the government must prove by clear and convincing evidence that the defendant’s actions were not self defense. This change is assuming, as widely expected, Governor Scott signs SB 128.

I have had many of these hearings, and they are usually very much toss-up, “he said-she said” situations. Now these “toss-ups” should be ruled in favor of the defendant much more frequently because the burden of proof will be on the Government. Thus Florida’s broad “Stand Your Ground” law is set to expand even more.

Most Estate Plans Ignore Digital Property

Many Estate Planning attorneys are not prepared for the modern era. At this point, very few attorneys are creating a plan for disposition of digital property. Digital property is not cell phones and tablets, but the information stored on them. This can include information stored on Facebook, Twitter, blogs, websites, and more.

Some may think they do not need to worry about these accounts because they have no value. This line of thinking is categorically incorrect. Much of this information holds immense sentimental value, including communications, pictures and videos. Other assets may have more economic value including business websites, frequent flier miles or even bitcoins. Still others have a large digital library of books, movies or songs. Even online accounts with stored credit card information should be properly disposed of, as identity theft, even for those who have passed, is becoming more and more rampant.

In 2016, Florida became the first state in the nation to pass legislation adopting the Uniform Fiduciary Access to Digital Assets Act (UFADAA). These rules require specific triggering language in a trust, power of attorney or will, otherwise this digital property will be inaccessible. Using generic catch all phrases or including digital assets in one’s “entire estate” will not be enough. A family member or loved one could even potentially be criminally prosecuted if they try to access digital property without the correct triggering language under the UFADAA. Please hire an estate planning attorney who is familiar with these recent legal changes. Call us today if you have any further questions.

Florida Legislature Cracks Down on “Totalitarian” Condo Boards

I represent a condo homeowners association and also many people who are unhappy with the way their condo is run, so I always stay up to date on the latest in Condo/HOA law. Previously, you either had to attempt a hostile takeover by getting the votes or suing civilly with an administrative state board. If Governor Scott signs the bill passed by the Florida Legislature, condo boards will have more regulations to follow and those unhappy with the way their condo is run can call the police if their board is violating the law.

If the law is changed, condo associations with 150 or more units will be required to publish password-protected financial reports, bylaws, and the articles of incorporation online. Directors will no longer be able to receive money from their associations for services like property management. Directors would also no longer be able to hire their relatives. There would also be term limits for board directors of 8 years unless the director receives a super-majority or there is a lack of candidates to fill the position, which in my experience is actually an incredibly common experience. A renter of a unit also would have the right to copy and inspect the association’s bylaws and rules.

Previously even if there was wrongdoing, police were very hesitant to arrest someone for a violation of condo association law because the statute made no explicit mention of criminal penalties. If the Governor signs this bill, that will change dramatically. Forgery of a ballot envelope or voting certificate used in an election is now a third degree felony, which is punishable by up to 5 years in prison. Refusing to allow inspection or copying of an official record of a condominium association within the time periods required by law in furtherance of a crime is now a felony, punishable by up to 5 years in prison. These are just two examples of a long list of illegal activity that will now be met with felony charges to combat what the author of this bill calls “totalitarian” condo boards.

What are your rights if you are involuntarily bumped from a flight?

Most airlines will regularly overbook flights. Often the airlines will ask for volunteers to be bumped, however as we have seen in recent news, there are often not enough volunteers. The Department of Transportation requires airlines to give each passenger who is bumped involuntarily a written statement that both describes their rights and that explains how the carrier decides who gets on an oversold flight and who doesn’t.

Compensation

  • If you are bumped involuntarily and the airline arranges substitute transportation that is scheduled to get you to your final destination within one hour of your original scheduled arrival time, you are not entitled any compensation.
  • If the airline arranges substitute transportation that is scheduled to arrive at your destination between 1-2 hours after your original arrival time (and between 1-4 hours on international flights), the airline must pay you an amount equal to 200% of your one-way fare to your final destination that day, with a $675 maximum.
  • If the substitute transportation is scheduled to get your to your destination more than two hours later (four hours internationally) or if the airline does not make any substitute travel arrangements for you, the compensation doubles to 400% of your one-way fare with a maximum of $1350.
  • If you paid for optional services (seat selection, checked baggage) and you did not receive those services on your substitute flight, or had to pay again, the airline that bumped you must refund those payments to you.

Remember, if you are bumped involuntarily you have the right to insist on a check. They cannot force credits or free flights upon you. The rules are a little more complicated than this, but these are the basics.

If you have any questions about the above information or about any legal matter, call Nathan Nevins Law at 954-249-3144.

FL Senate Seeks to Expand Removal of Criminal Records

Anyone who has been charged with a criminal offense understands that a simple background check can be devastating. Florida has some of the toughest rules in the country to seal or expunge a criminal record. Even so, now that we live in the technology age, even a simple google search can bring back dark secrets of a past arrest. Worse still, some companies try to profit by charging a fee to remove the booking photo. Now the Florida Senate is seeking to expand the rights of those previously charged with a crime to help make removal of those records a little bit easier.

Senator Greg Steube, a Republican from Sarasota, has introduced Senate Bill 118. It has already passed through the Judiciary committee with a 9-0 vote, and through the Criminal Justice committee with a 5-2 vote. The legislation does two main things. 1) It expands the State’s sealing and expunging eligibility; and 2) It classifies charging a fee to remove a booking photo as an “unfair trade practice.”

When a record is sealed, the public will not have access to it, while government agencies can. When a record is expunged, government agencies do not even have access to that file without a court order. As it stands now, even if a Judge dismisses a criminal charge in the middle of trial due to lack of evidence, or a Defendant is found not guilty at trial, a case cannot be expunged, only sealed. This bill expands cases eligible for expungement to include when an acquittal is received at trial either by the Judge or the Jury. Additionally, as it stands right now, if one is adjudicated guilty of a criminal offense, even a misdemeanor long in the past, none of that individual’s criminal record can be sealed or expunged. This bill seeks to make it so if it has been 10 years since an individual has been adjudicated on a misdemeanor, it will not otherwise bar the applicant from getting a criminal offense sealed or expunged

The legislation also importantly ends the practice of allowing websites to charge a fee to remove a booking photo. If the website refuses to take down the photo for free after 10 days, one can sue the website civilly for up to $1000 per day that it does not remove the photo, plus attorney’s fees and costs. Nothing in the bill prohibits companies from creating these websites that collect booking photos, as just the practice of charging to remove a photo will be prohibited. However, by taking a bite out of these websites’ profits, they may become less common.

With strong bi-partisan support, it looks as though this bill will pass the Florida Senate. A similar bill has passed through Florida House committees as well. It appears that in just a few months it will be a little bit easier for one to remove their criminal record from public view.

FL High Court Overturns DUI Conviction for Lack of Communication Between Officers

Last week the Florida Supreme Court made it harder for blood and breath evidence to be admitted in DUI cases and required officers to be more diligent in their communication amongst themselves. In a little noticed case, the Court held that the “fellow officer rule” requires actual communication concerning probable cause. The Court further held that a consent form signed by a suspect can be involuntary if it is preceded by a warning that their license could be suspended.

In State v. Montes-Valeton, the Court overturned the lower court. In the case, the initial officer responded to a crash. This officer noticed a smell of alcohol, but did not inform other officers about it. In fact, the officer who asked Mr. Montes-Valeton for the blood draw indicated “he did not recall” if there was a smell of alcohol. The Fellow Officer Rule in broad terms, means that the collective knowledge of law enforcement will be imputed to each individual officer. However, the Court reasoned that this information must be actually communicated in order to be valid. Since there was no proof the first officer’s observations were communicated to the other officers, the fellow officer rule did not apply and there was no probable cause.

The government was able to secure a signed consent form from Mr. Montes-Valeton allowing a blood draw in this case. However, this was only after the police incorrectly noted that his license would suffer a lengthy suspension if he did not comply. The Court held this was involuntary and thus invalid. Since there was no probable cause, there would be no license suspension and the consent was induced by a misrepresentation.

This case can have far reaching impacts in many areas of criminal defense besides DUI, as these days it is very common for multiple officers to be involved in one case. If their communications amongst each other are not sufficient, it can be grounds to suppress evidence.

HOW PRESIDENT TRUMP CAN BYPASS THE COURTS AND MAKE HIS TRAVEL BAN STICK

A panel on the 9th circuit court of appeals ruled 3-0 to keep in place a temporary restraining order that stops, for now, President Trump’s travel ban. This is likely headed to the Supreme Court, but it is important to remember that the merits of the case have not yet been decided. There has been no trial. However, even if the Supreme Court upholds the restraining order, and even if this case goes to trial and the President loses, it will be next to impossible for the Courts to stop this travel ban over the long haul.

Congress has ultimate authority on immigration. Article I Section 8 explicitly allows for the Congress “To establish a uniform rule of naturalization.“ But wait, so why does the President have so much say over immigration policy in reality? That’s because the body of law on immigration, the Immigration and Naturalization Act, gives vast discretion to the President on who to allow entrance to the country. Congress could hypothetically check the President on requiring issuance of visas and green cards, but in reality, any sort of check on the President forcing issuance of admittance would be far to broad to be practical. Congress simply is not just going to let everyone come in who wants to, in reality there needs to be some level of discretion. Congress cannot adequately provide that level of discretion, neither can the courts, only the executive can.

Enter President Donald J. Trump, fresh off a (likely) judicial defeat on his executive order to ban travel for certain individuals. The crux of the legal argument against the President’s travel order is that it discriminates on the basis of religion. It is one thing for Courts to strike down an executive order, it is another thing entirely to force the President to issue visas and green cards on a case by case, person by person basis of discrimination. In order to highlight how difficult it would be to prove someone not being issued entrance was on the basis of discrimination, we should look at McClesky v. Kemp.

The US Supreme Court decided in 1987 that despite overwhelming scientific studies that blacks were far more likely to receive a death penalty sentence than whites, this was not enough to show a “racially discriminatory bias.” This was after some of the studies showed that blacks who killed white victims were sentenced to death at nearly 22 times the rate of blacks who killed blacks. Studies further showed that prosecutors seek the death penalty for 70% of black defendants with white victims, but only 15% of black defendants with black victims. Despite all of this evidence, the Supreme Court held merely discriminatory impact was not enough. Thus even if there are overwhelming statistics that Muslims are very unlikely to be allowed in, there must be some evidence of racially discriminatory purpose. So long as there is no “policy” of discrimination (which is exactly what the 9th claimed they are striking down), it will be very difficult to prove discriminatory purpose on a case by case basis.

Another large issue is the limited judicial authority to review the admission of any alien. It well established that the constitution does not apply to non citizens that are not within the territory of the United States. (Johnson v. Eisentrager, 1950). So for instance, a non citizen who has no connection to the United States would likely not be able to sue in federal court to review a denial of a visa. Also, even if this individual was able to find jurisdiction for a federal court to hear a matter, there is plenty of caselaw that suggests the issuance of a visa is unreviewable by a federal court. (Knauff v. Shaughnessy, 1950). There are internal review measures, but ultimately, due to the power given by congress, the President has the ultimate say as to who gets in and who does not.

So while federal courts may have won the battle for this travel ban, it seems very unlikely that they will win the war. Those immigrants  who are already here, or already have green cards/visas have limited rights, but for those who are new that wish to enter it will ultimately be up to the President. It will be nearly impossible for federal courts to adequately check President Trump and force him to issue visas to people he does not want to.