Hi, How Can We Help You?

Blog

How Can Kentucky Employers Use Arrest and Conviction Records?

Author By Sean GarzaPosted on

Job hunting can be difficult for a person with a criminal record. There are federal and state protections that can make matters a little easier for these individuals.

In Kentucky, job applicants do not have to disclose any expunged records on their employment applications. However, the state does not prohibit employers from considering arrests and convictions as they make their employment decisions.

That said, there are still additional federal protections afforded potential employees that affect Kentucky business owners.

Fair Credit Reporting Act (FCRA)

The FCRA deals with inaccurate or incomplete records. Criminal background checks occasionally include errors, such as convictions that were expunged, misclassifications of crimes, incomplete information about a crime (such as charges being dropped), multiple listings of a single offense or records that do not actually belong to the applicant.

The FCRA obliges employers to do the following:

  • Get written consent from a job applicant before performing a background check
  • Inform the applicant if the results of the background check could negatively affect his or her chances of being hired, and provide the applicant a copy of the report
  • Inform the applicant if the decision not to consider the applicant was based on the results of the background check

The FCRA also requires all firms that perform background checks to take reasonable steps to ensure the information they provide is accurate and current.

Title VII of the Civil Rights Act

Title VII protects applicants and employees from discrimination. Employers may not, for example, make hiring or firing decisions on the basis of race, gender, sexual orientation, religion or other protected statuses.

This can occasionally tie in to the use of arrest and conviction records. Because arrest and incarceration rates are disproportionately higher for minorities, an employer with a policy of excluding any applicants with a criminal record could, in some cases, be accused of racial discrimination.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

 

Foreign Corporation Primer: Register before filing suit

Author By Finney Law FirmPosted on

One important but often overlooked provision of Ohio corporate law is the requirement that “foreign corporations” (meaning any corporation established outside the state of Ohio) must obtain a license to transact business within the state of Ohio when doing business in Ohio.

No foreign corporation. . .shall transact business in this state unless it holds an unexpired and uncanceled license to do so issued by the secretary of state. To procure such a license, a foreign corporation shall file an application, pay a filing fee, and comply with all other requirements of law respecting the maintenance of the license as provided in those sections.

R.C. 1703.03.

Although a failure to obtain a license does not invalidate any contracts a foreign corporation enters into in Ohio, a lack of registration means that a foreign corporation cannot maintain a lawsuit in Ohio courts.

The failure of any corporation to obtain a license…does not affect the validity of any contract with such corporation, but no foreign corporation that should have obtained such license shall maintain any action in any court until it has obtained such license. Before any such corporation shall maintain such action on any cause of action arising at the time when it was not licensed to transact business in this state, it shall pay to the secretary of state a forfeiture of two hundred fifty dollars and file in the secretary of state’s office the papers required by divisions (B) or (C) of this section, whichever is applicable.

R.C. 1703.29.

A similar provision for foreign limited liability companies is located at R.C. 1705.58.

This is a common provision throughout the United States. In Kentucky the requirement is codified at Kentucky Revised Statute 14.9-20.

A recent Hamilton County Court of Appeals case highlights the importance of licensing your foreign corporation. In LV REIS, Inc. v. Hamilton County Board of Reviison, et al., C-160732. the First District Court of Appeals upheld the Common Pleas Court’s dismissal of a case brought by a Nevada corporation that had failed to register with the state before filing a Board of Revision appeal in the Common Pleas Court.

Had LVREIS been successful in the underlying case, it would have saved approximately $17,000 in property taxes per year – making the failure to register a costly oversight. It should be noted however, that even though the Common Pleas Court granted the motion to dismiss, it also provided some analysis of the merits of the appeal, suggesting that LVREIS would not have prevailed had the case been decided on the merits. 

If you are operating a foreign corporation or limited liability company in Ohio, this case should serve as a warning to make sure you’ve properly registered in every state in which you operate. If you are not currently registered in Ohio, you can register now.

For those involved in disputes with foreign entities corporations, this can be an important defense to raise in litigation, as even though a foreign corporation can cure the defect prospectively, the case law suggests that if an unregistered foreign corporation files suit but later registers with the state, such registration does not cure the lack of jurisdiction.

Contact Finney Law Firm for assistance with your corporate or property tax matter here.

Ohio Real Estate Law: Electronic recording has arrived

Author By Christopher P. FinneyPosted on

The day many of us had anticipated in real estate transactions has arrived: Electronic filing of real estate documents.

Hamilton County Auditor Dusty Rhodes, Hamilton County Recorder Norbert Nadel and Hamilton County Engineer Ted Hubbard have collaborated to allow — starting Wednesday, February 7, 2018 — for recording of deeds and other instruments conveying property ownership to be filed completely online using the web portal at Simplifile.com.

Warren County has allowed for electronic recording for some time.

  • The Hamilton County Recorder’s Office has a instruction guides here and here.
  • Warren County’s information is here.

The remarkable advancement eliminates the need for a trip to the auditor’s and recorder’s offices to file a broad variety of recorded real estate instruments.

For more information, contact Auditor Rhodes’ office at 513.946.4235.

Proposed Legislation to Clarify Tax Levy Ballot Language

Author By Finney Law FirmPosted on

House Bill 488 sponsored by Ohio State Representatives Becker and Hood will require that the effect of proposed tax levies be more clearly explained on the ballot.

Under current law, information on the effect of a proposed tax levy is expressed based upon the “tax value” of real property (35% of the true value). The proposed law will provide information based on the effect of the tax levy using the fair market of real property, as well as the millage rate against the tax value.

The proposed change will make it easier for voters to understand tax levies and make more informed choices at the ballot box.

You can follow the progress of House Bill 488 here.

Ohio Commercial Law: Is an obligation “joint and several” if the instrument is silent on the topic?

Author By Julie M. GuginoPosted on
Attorney Julie M. Gugino

“Joint and several liability” is a legal concept that provides that each obligor under a contract is fully liable for the obligations under that contract as to the other party to the contract (i.e, the party to whom the joint obligors are obligated).  So, in the instance that two or more guarantors sign a guarantee instrument to a bank for a loan, if they are “joint and severally liable,” it means that each guarantor owes the entire debt to the bank in the event of default.  The bank can’t collect twice the guaranteed amount, but it can choose which guarantor from which to obtain payment.

So, the question addressed in this article is “what is the default position as to joint and several liability on a contract if the instrument is silent on the topic?”  We address topic this under Ohio and Kentucky law.

The answer: In short, “joint and several” is the default interpretation absent language in the instrument that absolves parties of such liability.

General Contract Principles

A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Restat 2d of Contracts, § 1 (2nd 1981). Further, where there are more promisors than one in a contract, some or all of them may promise the same performance, whether or not there are also promises of separate performances. Restat 2d of Contracts, § 10 (2nd 1981). Such is the situation when more than one individual signs a guaranty or a promissory note.

Standard contract language

The standard modern form to create duties which are both joint and several is “we jointly and severally promise,” but any equivalent words will do as well. In particular, a promise in the first person singular, signed by several persons, creates joint and several duties. Restatement (Second) of Contracts § 289 (1981). What this means is that, generally, under the common law, promises of the same performance create “joint” liability on the part of each promisor unless an intention is manifested to create a “solidary” obligation. Restat 2d of Contracts, § 289 (2nd 1981). However, many states have state specific statutes which have altered or refined this rule.

Common law when contract is silent

In Ohio, an individual signing a note as a co-maker with another individual is jointly and severally liable for the debt, except as otherwise provided in the instrument. Ohio Rev. Code Ann. § 1303.14(A). Star Bank, N.A. v. Jackson, 2000 Ohio App. LEXIS 5567, *1. Under U.C.C. Art. 3, a party signing a promissory note as a co-maker is jointly and severallyliable for the debt. Darrah v. Leakas, 1994 Ohio App. LEXIS 220, *1. As among themselves, co-makers are presumed liable in equal amounts, however, these rights are governed by the particular terms of the contract between the co-makers. Poppa vs. Hilgeford, 1982 Ohio App. LEXIS 13658, *1.

In Kentucky, likewise, in the absence of an express agreement to the contrary, when two or more individuals execute a note, such persons are jointly and severally liable to the holder, even though the instrument contains no such express provision.  KRS 355.3-118. Schmuckie v. Alvey, 758 S.W.2d 31, 33-34.

Duty of contribution from co-makers

As between or among themselves, however, in the absence of evidence of a contrary agreement, co-makers are presumed to be liable in equal amounts and a right of contribution, based upon an implied contract of reimbursement and not the instrument, exists between or among them. 11 Am. Jur. 2d, “Bills & Notes” § 588 (1963). Id.

Conclusion

What this means is that if you sign a note or guaranty or other like instrument with another individual, the holder of that note, in their sole discretion, can choose to recover the full amount against you and only you. As between you and your co-maker, depending on your agreement, you likely retain the right to seek contribution from them pro-rata.

For more information on commercial instruments and personal guarantees, contact Julie Gugino at (513) 943-5669.

Making a difference: Turning legal work into cheese

Author By Julie M. GuginoPosted on

Through the course of our representation of clients, they often encounter zoning codes which are outdated and properties that are non-conforming, often in vibrant flourishing neighborhoods.  This was the case for one client, who desired to seek a use variance for a property in Evanston, a stone’s throw from the burgeoning Walnut Hills neighborhood.

The challenge

In this case, the clients desired to purchase a block construction building that was zoned Residential Mixed Use and convert the same into an artisanal cheese making facility and retail store/tasting room. This building had previously been operated as a medical building and was constructed prior to implementation of the current Zoning Code. As a result, an 8,334 square foot block building sat vacant and unused, a blight to its community because of zoning that relegated it to Residential Mixed Use. As a result, we were retained to pursue a use variance on their behalf and assist them in their endeavors to “put Cincinnati cheese on the map and to begin that dream in the Evanston neighborhood.”

Variances under Cincinnati Municipal Code

Under §1445-15 of the Cincinnati Zoning Code a variance from the requirements of the Cincinnati Zoning Code can be granted, provided the condition giving rise to the request for the variance was not created by the current or prior owner.  In addition, a variance can be granted owing to special conditions affecting the property, where application of the Zoning Code would be unreasonable and result in practical difficulties. Finally, consideration is given as to whether the variance is necessary for the preservation and enjoyment of a substantial property right of the applicant possessed by owners of neighboring properties.

Showing of unnecessary hardship

In addition to these factors, under §1445-16 of the Code, no variance can be granted unless the applicant demonstrates it will suffer unnecessary hardship if strict compliance with the terms of the Code is required. Hardship is demonstrated by the following factors: (a) the property cannot be put to any economically viable use under any of the permitted uses in the zoning district;  (b) the variance requested stems from a condition that is unique to the property at issue and not ordinarily found in the same zone or district; (c) the hardship condition is not created by actions of the applicant; (d) the granting of the variance will not adversely affect the rights of adjacent property owners or residents; (e) the granting of the variance will not adversely affect the community character, public health, safety or general welfare; (f) the variance will be consistent with the general spirit and intent of the Zoning Code; and (g) the variance sought is the minimum that will afford relief to the applicant.

“In The Public Interest”

Finally, in order to obtain a use variance, an applicant must show the proposed variance “is in the public interest.” The factors considered under §1445-13 of the Code include: present zoning, community guidelines and plans, existing traffic, buffering, landscaping, hours of operation, neighborhood compatibility, proposed zoning amendments, consideration of adverse effects, the elimination of blight, economic benefit, job creation, effect upon tax valuations, and private and public benefits.

The wasted potential of a long-vacant property

In our clients zoning matter, an existing structure which did not conform to the Code had sat vacant for five years or more.  The zoning needs of the Property were unique to it and the hardship had not been created by the owner of the Property. Its impact on the immediate neighborhood as a vacant and blighted building were adverse, contributing nothing to the neighborhood, and detracting greatly from the same.

Making a difference for our client

Our clients were able to obtain a use variance and now that vacant building has been transformed into a cheese making facility and retail store/tasting room that will further transform this already bustling community.

Read more about their story here.

Ohio Real Estate Law: Ohio Auditors take aim at “LLC Loophole” transfers

Author By Finney Law FirmPosted on

Ohio imposes fees on the conveyance of real estate, and generally determines the value of real property based upon the sale price when the property is sold. One means of avoiding the conveyance fee and reporting the sale price is the use of a “LLC Loophole.”

The LLC Loophole is a means of conveying title to real property using an LLC as an intermediary, rather than transferring title directly from the seller to the buyer. A property owner transfers title to real estate to an LLC that she owns, and then sells the LLC itself to the buyer. One benefit of  this conveyance is that no conveyance fee is paid, and the auditor is not alerted to the sale price.

Consider this illustration:

Property owner owns a strip mall valued by the auditor at $500,000. She has received an offer to buy the property for $750,000, but the buyer wants to avoid the publicity of reporting the sale through a conveyance form and the automatic increase in tax value that would come by simply buying the property directly from the property owner. So, the property owner sets up a new limited liability company, Strip Mall, LLC; conveys title to the property to Strip Mall, LLC; and then sells her 100% ownership interest in Strip Mall, LLC to the buyer for $750,000. The only filing with the county auditor is the conveyance fee showing a fee exempt transfer from the property owner to the LLC. No one is alerted that the buyer now owns the strip mall or that it was valued at $750,000 in an arm’s length transaction.

Under the proposed law, when the property owner sells her ownership interest in the LLC, she would have to report that sale to the auditor as if she had sold the real estate directly to the buyer. At that point, the auditor would assess a conveyance fee, and the real estate would be taxed at the sale price. The proposed bill would require the reporting and payment of taxes whenever any interest in an LLC or other entity that owns real estate (directly or indirectly) takes place.

To be clear, there is nothing unlawful about using LLCs in property transfers, and it is a perfectly legitimate method for conveying real estate.

We expect that public school boards in particular, as well as other property tax funded organizations will lobby in support of this legislation; and that it will find opposition from real estate investors and small government advocates generally. Whether it is this particular bill or another future proposal, the LLC Loophole will be facing continued scrutiny and efforts to impose conveyance fees and determine the purchase price.

The Legislative Services Commission’s analysis and the bill text are below.

Finney Law Firm will be keeping an eye on this bill as it works through the Ohio Legislature.

[scribd id=370187443 key=key-6s2g2qtMWnOArPxcnU1w mode=scroll]

Ohio commercial transactions: Think twice before signing these six transactional documents

Author By Christopher P. FinneyPosted on

As we march through our lives, folks shove documents under our nose for signature all the time.  In reality, we should carefully, very carefully, read them and consider their implications before signing any of them.

After all, there are charlatans and fraudsters standing eager to take advantage of us at every turn.  And even if other parties don’t start out as such, life events can put people in default or desperate straits – and then “desperate people do desperate things” as they say.

Still, certain documents bear significant additional risk or have a history of resulting in litigation or economic calamity for the signer.

Here, we take a serious look at six transactional documents that frequently result in legal or financial problems:

  • Personal guarantee for debts of another. Your daughter and son-in-law are buying a house, but have bad credit, or you are starting a business and need to guarantee the lease or franchise agreement to provide the fiscal backing for the undertaking.  A personal guarantee is fine and in some instances both called for and reasonable.  But think it through:

–>  Am I financially capable of fulfilling this guarantee if the underlying obligation falls into default?

–>  Would the other party accept a guarantee limited in time, amount or some other cutoff?  Or proceed with no guarantee?

–>  If there are multiple guarantors, would the lender be satisfied with me just paying my pro-rata share of the underlying debt?

–>  Is there some other way that the transaction can proceed without my guarantee?  Can someone offer security for the loan instead?

  • Non-Compete agreements. More and more employers are asking new employees to sign non-compete agreements or agreements wherein the employee agrees not to solicit customers, employees or vendors of the enterprise.  Employers are entirely within their rights to demand such agreements (the question of whether they are enforceable is addressed here).  But should an employee agree to restrict his future earnings potential and career path based upon this job opportunity?  If you really think it through, many time the answer is “No thanks, I’ll take a pass.”
  • Agreements with attorneys. We really hate to say this, but one of our clients was a seller under a land installment contract for the sale and purchase of real estate.  The buyer was an attorney.  After repeatedly falling into default, our client initiated a forfeiture action against the attorney.  He countered with a blistering series of arguments that were all untrue or frivolous.  Confronted with withering legal bills to prove their case, they quickly settled on relatively unfavorable terms.  Lesson learned.
  • Businesses with 50/50 ownership. It seems to make sense: Two partners throwing in equal shares of cash and effort to start a business; they should own it 50/50.  And in decision-making, decisions are 50/50, meaning it requires the consent of both parties to move forward with anything.  However, after years of addressing business disputes, it has become clear that these ownership structures – with no one in charge and everyone’s cooperation required to make decisions – are the source of operational and legal gridlock, resulting in painful, expensive and endless litigation.  I have even seen very difficult dispute resolution between former (or soon-to-be-former) spouses in a 50/50 ownership structure.  Indeed, getting into business with any third party can be the source of conflict, monetary losses and litigation.
  • Agreements you are not prepared to litigation to conclusion. If you think about it, in an instance in which you are investing time or money, you have two essential choices: Either be prepared to “eat” these investments by walking away or be prepared to litigate your claims to conclusion to defend your investment.  Is the person you are contracting with someone you are prepared to sue to enforce your rights?  Is the transaction structured and documented in such a way that you could prevail in that litigation? Will the cost of enforcing these agreements (or defending against a suit from the other party) of such magnitude that it will be worth litigating?
  • Indemnity and “hold harmless” clauses in leases and other contracts. It’s easy to sign a 50-page legal document that satisfies the major business terms you have negotiated.  But what about the fine print?  Buried deeply within a lease, loan documents, or asset purchase contracts can be all sorts of warranties, indemnities, and “hold harmless” provisions.  It seems simple that a seller or borrower should stand behind his obligations, but do you really want to give an open-ended contractual indemnity or warranty in this specific instance?  It is, as is addressed here, a potential blank check, open-ended access to your checkbook.

We are not saying that you should never sign any of the foregoing instruments.  What we are saying is that experientially these undertakings result in much conflict, legal fees and emotional angst, and should be undertaken only with great caution.

 

Ohio Probate Administration: Rights of Trust Beneficiaries

Author By Isaac T. HeintzPosted on
Attorney Isaac T. Heintz

On multiple occasions, Finney Law Firm has been approached by a beneficiary of a trust when the beneficiary is concerned with the administration of the trust by the trustee.  In these types of situations, our firm has helped the beneficiary pursue and protect the beneficiary’s rights.

Although there are other rights, below you will find a summary of some of the statutory rights of a trust beneficiary.

Under current Ohio law, a trustee shall, within sixty (60) days after accepting its duties as trustee, notify the current beneficiaries of a trust of the trustee’s acceptance of the trust, together with the trustee’s name, address, and telephone number.

Further, within sixty (60) days after the date the trustee acquires knowledge of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, the trustee must notify the current beneficiaries of the existence of the trust, the identity of the settlor/grantor, the right to request a copy of the trust instrument, and the right to receive a trustee’s report as defined below.

Upon the request of a beneficiary, the trustee shall provide to the beneficiary a copy of the trust document.  Unless the beneficiary specifically requests a copy of the entire trust document, the trustee may furnish to the beneficiary a copy of a redacted trust document that includes only those provision of the trust that are relevant to the beneficiary’s interest in the trust.  If the beneficiary requests a copy of the entire trust document after receiving a copy of the redacted portion, the trustee must furnish a copy of the entire trust document.

The trustee is also required to send a trust report at least annually and at the termination of the trust, to the current beneficiaries, and also to other beneficiaries who request it.  This is commonly known as an accounting.  The report shall detail the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee’s compensation, a listing of the trust assets and, if feasible, their respective market values.

Any beneficiary may waive the right to a trustee’s report or other information otherwise required to be furnished to a beneficiary. A beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.

A trustee, in fulfilling its fiduciary obligations, must keep the current beneficiaries reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.

Please note that the above rights are not a comprehensive list of the rights of a beneficiary of a trust.

_________

For assistance with an Ohio trust or more generally Ohio estate planning and estate administration needs, contact Isaac T. Heintz (513-943-6654; Isaac@FinneyLawFirm.Com) or Eli Krafte-Jacobs (513-797-285; Eli@FinneyLawFirm.Com) of our transactional team.

 

Ohio Employment Law: Attorney Steve Imm Presents at Empower U on “What Employers Can Learn From Hollywood’s Sexual Harassment Problem?” 4/10 at 7 PM

Author By Stephen E. ImmPosted on
Attorney Stephen E. Imm

Finney Law Firm attorney Stephen E. Imm will present to Cincinnati’s Empower U on April 10, 2018 on the topic:  “What Employers Can Learn From Hollywood’s Sexual Harassment Problem.”

The seminar will be presented at the EmpowerU studios at 225 Northland Blvd., Cincinnati, OH 45246 at 7 PM.

Empower U was founded by our firm client and friend Daniel Reginald of Frame USA to provide a full annual program of free education programs to empower citizens to understand and impact their communities.

They have invited experienced employment law attorney Stephen Imm to speak on April 10 on the hottest topic in America today: Sexual harassment in the workplace.  Steve Imm has more than 30 years of experience working on employment law issues and so the #MeToo movement is old hat to him.

We will send sign-up information as it becomes available.  Please plan on joining us for this free seminar.

1 … 49 50 51 52 53 … 105