Hi, How Can We Help You?

Category Archives: Miscellaneous

Ohio Real Estate Law: Foreign execution and acknowledgement (notarization) of deeds and other recordable instruments

Author By Christopher P. FinneyPosted on

I got a great question from a client this past week. He had a seller who was located in Mexico for his job. The facility at which he worked was nowhere near a US Embassy or Consulate, and the drive to the Embassy or Consulate was somewhat dangerous.  How could he get a valid and proper signed and notarized deed back to Ohio for the closing?

I thought: What a great chance for a blog entry on foreign execution and acknowledgement of recordable instruments (deeds, mortgages, etc.) in Ohio! (How exciting is my life!)

Domestic execution

First, when I started my career in real estate law, most (not all) instruments required two witnesses and a notary public to sign in order for the instrument to be recordable in Ohio.  Since then, the requirement for two witnesses has been dispensed with, so all that is needed for an execution of a recordable instrument in Ohio is a signature of the owner and an acknowledgement (notarization) (there are lots of other requirements as to the form).

Execution and acknowledgement in other states

Then, O.R.C.  § 5301.06 provides:

All deeds, mortgages, powers of attorney, and other instruments of writing for the conveyance or encumbrance of lands, tenements, or hereditaments situated within this state, executed and acknowledged, or proved, in any other state, territory, or country in conformity with the laws of such state, territory, or country, or in conformity with the laws of this state, are as valid as if executed within this state.

So, for other states and territories of the United States, meeting the execution requirements in that state (usually just a signature and an out-of-state acknowledgement) is just as valid as one from Ohio.

Execution and acknowledgement in foreign countries

Further, the above-statute provides that an acknowledgement from another country is valid if made in conformity with the laws of the other country.

That means that the Ohio title attorney signing off on the instrument would need to know the law the other country, which they will not (and since it is written in their language, would be difficult to research and discern with the degree of certainty required to assure quality transfer of title).

In this instance, the Mexican notary required an expensive (relatively) translation of the instrument into Spanish before acknowledging that instrument, and the Ohio title attorney would not accept the dual-translations in the document for recording.  For these reasons, it was a becoming a disaster before the matter came to our firm.

That takes us to the second option for execution outside of the United States: O.R.C. § 147.51:

Notarial acts may be performed outside this state for use in this state with the same effect as if performed by a notary public of this state by the following persons authorized pursuant to the laws and regulations of other governments, in addition to any other persons authorized by the laws and regulations of this state:

(A) A notary public authorized to perform notarial acts in the place in which the act is performed;

(B) A judge, clerk, or deputy clerk of any court of record in the place in which the notarial act is performed;

(C) An officer of the foreign service of the United States, a consular agent, or any other person authorized by regulation of the United States department of state to perform notarial acts in the place in which the act is performed;

(D) A commissioned officer in active service with the armed forces of the United States and any other person authorized by regulation of the armed forces to perform notarial acts if the notarial act is performed for one of the following or for a dependent of one of the following:

(1) A member of the merchant marines of the United States;

(2) A member of the armed forces of the United States;

(3) Any other person serving with or accompanying the armed forces of the United States.

(E) Any other person authorized to perform notarial acts in the place in which the act is performed.

As a practical matter, I just tell clients to get themselves to a US Embassy or Consular office.  It is best to call in advance and make an appointment (a) to assure they perform these services at the office you intend to visit, (b) to assure a notary is present at the time you show up, and (c) to assure the Embassy or Consulate is open at that time.  Further, embassies and consulates are used to performing these services for American citizens and residents.  This procedure is blessed by Section (C), above.

Then, members of the Armed Forces and their families have the additional option of going to a military base and having “a commissioned officer in active service with the armed forces of the United States and any other person authorized by regulation of the armed forces to perform notarial acts” performing the acknowledgement.

How about the new electronic notary process?

So, I thought when the problem was presented to me, wouldn’t this be a perfect use of the e-notary law (O.R.C. § 147.591, et seq.)?

Well, no, it would not, as I would learn.

Although the e-notary situated in Ohio can perform valid acknowledgements remotely, including with signers sitting in other states, he has no authority to acknowledge an instrument for a principal sitting outside of the “territory of the United States” O.R.C. § 147.64 (C).  Well, that threw cold water on that idea!

Corporate and LLC signatures

If the owner of the property in question is a corporation or a limited liability company, it may be possible to sign a corporate resolution (not requiring a notary) authorizing someone in the US to sign and have acknowledged the recordable instrument, thus saving the need to drive to an Embassy or Consulate.

Conclusion

So, in short, if you are outside of the United States or its territories, and want to execute and properly notarize a real estate instrument for recording in Ohio, (a) have the documents emailed to you where you are, (b) print them out, (c) get thee to an Embassy or Consulate and (d) Fed Ex them back to the closing agent in Ohio (subject to an escrow agreement or such other assurances as your attorney advises). If you are in a country without diplomatic relations with the United States, you may be out of luck.

For assistance with your Ohio and Kentucky real estate closing needs, please contact Rick Turner (513.943.5661), Isaac Heintz (513.943.6654) or Eli Krafte-Jacobs (513.797.2853).

Trademark and Copyright Considerations for Small Businesses

Author By Crystal M. LykinsPosted on

Trademarks and copyrights can be used to prevent your company’s original creations or identifying features from being misappropriated illegally.

A trademark can be registered with the U.S. Patent and Trademark Office (USPTO) for a brand name, slogan, logo or other mark used to distinguish the goods or services of its owner. If a company’s trademark in the form of an identifying word, name, symbol, phrase or design meets the USPTO’s registration criteria, it can be registered with the USPTO.

A copyright (which is different than a trademark) deposited with the U.S. Copyright Office (USCO) can establish one’s ownership of originally authored written works, musical compositions, software programs, architectural designs, films and other media.

However, there are right ways and wrong ways of acquiring and preserving protections for your valuable intellectual property. Here are some steps you can take to help avert legal woes.

  • Do the research — You may shield yourself from major headaches and infringement claims by doing thorough trademark or copyright research, either yourself or through a professional. An experienced researcher can inform you about any other businesses using slogans, logos or other brand materials similar to the one you hope to use. It is better to know that you need to change identifying brand details before creating marketing materials. If you don’t do the research and simply hope your brand is unique, an infringement claim could arise.
  • Put Others on Notice of Your Intellectual Property —Use of the “TM” symbol by a person or business is an informal way of putting others on notice that the user of the “TM” symbol is claiming the mark as their own (in other words – don’t infringe on this mark). Use of “TM” also shows that the mark is not registered with the USPTO.  Once a mark is registered with the USPTO, the “TM” can be switched to an “(R)” for “registered.”
    A person can claim a copyright for any piece of original, published work by using the symbol “(C)” without depositing the work with the USCO.  However, depositing an original work with the USCO is advisable for the benefits it provides, and it creates an official record of your original work.  Registration of a mark or depositing of an original work also makes your intellectual property discoverable to other people conducting trademark or copyright research.
  • Use the correct symbol — Making “TM,” “(R)” or “(C)” (for copyright) next to your mark or creative work lets others know that you are claiming ownership. This may make someone think twice before mimicking your work for their own benefit and may also be used as evidence in support of your case if you need to file or respond to an infringement claim.

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.

 

Our twin class action wins in Bedford and Oakwood are featured in this blog entry

Author By Christopher P. FinneyPosted on

This blog post by attorney Stephen Richmond of the Cleveland and Columbus law firm of Kohrman Jackson Krantz features our important twin class action victories in federal court in challenging municipal post of sale and rental inspection ordinances as violations of the Fourth Amendment (unconstitutional warrantless searches) to the United States Constitution.

We co-counseled these cases with attorney Maurice Thompson of the 1851 Center for Constitutional Law, which uses litigation strategies to advance the cause of free enterprise throughout Ohio.

This blog entry actually misses the first in a series of point-of-sale warrantless search cases in Ohio, our challenge in 2014 an ordinance in the City of Portsmouth, Ohio.  That decision from 2015 by Federal District Court Judge Susan J. Dlott is reported here.

Importantly, the Finney Law Firm challenges and confronts zoning and land use enforcement actions by municipalities using all of the legal tools at the disposal of our clients, including the United States Constitution.

It explains the issues well.

 

 

 

Ohio Employment Law: Is a salesperson entitled to receive sales commissions after his or her employment ends?

Author By Stephen E. ImmPosted on

Most salespeople are compensated at least in part on commission. Some earn a salary in addition to sales commissions, and some are paid solely by commission. Either way, sales commissions are the “lifeblood” of a salesperson. If someone messes with the commissions of a salesperson, they are going to hear about it. It’s how they earn their living and feed their families.

But what happens if the employment relationship ends? Does a salesperson have any right to commissions after they leave or are terminated?

What does the contract say?

This can be a very complicated question. There are a variety of factors that courts will look at in determining whether or not post-termination commissions may be owed to a salesperson who has resigned or been terminated. First and foremost, courts will look at whether or not the parties had a contract that dictated how post-termination commissions were to be handled. Such a contract can exist in an explicit, written form, but it can also arise from the course of dealings between the parties, or by way of commission plans that are clearly communicated to salespeople during their employment.

What if there is no contract?

In the absence of a contract, courts will sometimes look at what is the custom in the industry in order to determine whether, and if so to what extent, post-termination commissions may be owed to a former salesperson.

Was the commission “earned” prior to separation?

Another important factor is the extent to which the commission was “earned” by the salesperson before termination. If the salesperson, prior to separation from employment, had already done everything required of him/her in order to receive the commission, but the payment of the commission just didn’t happen to come due until sometime after separation, courts are more likely to find that the employee is legally  entitled to the commission. There is a saying that “the law abhors a forfeiture.” This means that the law does not like it when, through no fault of their own, someone is forced to “forfeit” money or property that they possess or have earned.

On the other hand, if a salesperson separated from employment when there was still work to be done for an account – for instance, if certain services were still needed from the salesperson after the sale had been made, and such services were not performed because the salesperson’s employment ended in the meantime – courts are less likely to find that the salesperson is legally entitled to the commission, since the commission arguably had not been fully “earned” at the time of separation.

Different treatment of employees versus independent contractors

It is also important to note that the treatment of sales commission issues are handled differently when the salesperson is an independent contractor, rather than an employee. Ohio, for instance, has a specific statute that addresses sales commissions earned by independent contractors. The statute is very favorable to the salesperson, in that it allows him or her to recover significant additional amounts beyond the unpaid commissions themselves. This statute does not apply, however, to employees.

Conclusion

Obviously, this is a very tricky and complex area of the law. Both companies and salespeople need to have knowledgeable legal counsel in their corner when facing issues involving disputed sales commissions.

Contact Stephen Imm (513-943-5678) or Matt Okiishi (513-943-6659) from the Finney Law Firm employment group for answers to any questions you may have on this topic.

Ohio Real Estate Law: Avoid creating “clouds” on title to your own real estate

Author By Christopher P. FinneyPosted on

The Ohio standard for “marketable title”

The standard for real estate title is, without putting too fine a point on it, pristine.  This is true not only in Ohio, but but in every state.

Indeed, one really could put a fine point on it.  Nearly any title defect can be a “cloud” on title that impairs its marketability.

Some minor title defects are OK

As is addressed here, some title defects can be “papered over” with title insurance; others are made acceptable under the marketable title act or standards and customs that allow title attorneys and title insurance companies to ignore minor defects.  Both of these solutions can allow a transaction to close.

But the standard in title is, essentially, perfection.  A buyer is not going to buy, a lender is not going accept a mortgage to secure a loan, and a title insurance company is not going to insure matters that are a “cloud” to title to real estate.

An unreleased Land Installment Contact “clouds” title

I recently helped a client who had “sold” their home on Land Installment Contract.  After three years of payments, the buyer was to pay the balance of the Land Installment Contract, a “balloon payment,” and then get a deed conveying title to the property.  Unfortunately, the buyer defaulted and moved out of the property at the end of the term.

[Is the buyer liable for monetary damages in such circumstance?  Probably.  But the cost to pursue those claims many times exceeds the recovery.  Many sellers are wise to just pack their bags and move on to the next opportunity.]

The seller was able to quickly re-sell the property to another buyer, but the recorded land installment contract constituted a “cloud” on title, making title unmarketable.  When the closing was set to occur, the title insurance company for the lender and buyer refused to pass on the title.

How do you clear title “clouds”

There are two ways to clear a “cloud” of this type: (a) buyer and seller jointly execute a notarized document in recordable form voluntarily terminating the Land Installment Contract or (b) a signature of a Common Pleas Court Judge in an appropriate proceeding extinguishing the Land Installment Contract and then the passage of an additional 30 days to avoid an appeal of that decision (or the exhaustion of appellate rights all the way through the Ohio Supreme Court).

Other than these two alternate steps, there is no “shortcut” to clear and marketable title to defeat a Land Installment Contract that is of record.

And the judicial proceedings could take 12 to 36 months, or even longer, to clear the title problems.

Many title problems can only be addressed in the same way: Either the party who has a colorable claim must sign a recordable instrument releasing the claim or a Judge, after appropriate due process of judicial proceedings, signs an Order wiping away the title claim.  This can be an extended and expensive undertaking.

How can an owner avoid the fate of a “clouded” title?

How can a seller avoid the fate of an impaired title?

First, buy property only after a title examination and with a proper owner’s policy of title insurance.

Second, once you own property that has clear title, don’t sign and record a Land Installment Contract clouding the title.  (Or, get a significant enough up-front down payment make it worth the while of judicially extinguishing the buyer’s interest at a later date if he defaults.)

Similarly, granting voluntary but poorly-thought-through covenants, easements, mortgages and other instruments can foul one’s real estate title and make the title either unmarketable or less valuable than otherwise might be the case.

Involuntary “clouds”

This blog entry addresses problems that an owner causes by his own signature.  But other title problems can arise from, for example, mechanics liens arising from unpaid claims of a contractor on real property, defects that existed when an owner took title to property, and affidavits that another party places of record unilaterally declaring an interest in your land.  These, too, may require one of the two steps noted above to clear, but they are not as easily avoided as ones created by the owner’s own hand.

Conclusion

The essential message of this blog entry is that title is a delicate thing, and can be “clouded” or impaired easily.  Thus, don’t voluntarily sign documents — even if they might initially seem like a good idea — that will constitute a cloud on title, at least not without careful consideration.  Cautiously think through the impact of documents that you voluntarily elect to place of record.

 

Media wrap-up on Ohio Supreme Court decision on Village of Bratenahl Open Meetings case

Author By Christopher P. FinneyPosted on

Here are links to the media articles on today’s Finney Law Firm win against the Village of Bratenahl on an important Open Meetings decision under Ohio statute.

We will update this blog entry as new stories come online.

Ohio Employment Law: May an employer fire or discipline an employee for discussing his or her pay with Co-workers?

Author By Matthew S. OkiishiPosted on

While discussing pay may foment worker dissatisfaction and be considered rude in polite circles, an employer may not prohibit the discussions from taking place or punish an employee for discussing pay or benefits with their coworkers. These discussions are protected by the National Labor Relations Act (“NLRA”). Among other things, the NLRA protects the right of workers to engage in “concerted activity,” which includes discussing wages, benefits, and other conditions of employment. This right to engage in “concerted activity” exists regardless of whether the workplace is unionized or the employee’s membership in a union. As a result, employers who prohibit, punish, or discharge employees for discussing their pay with coworkers are subject to discipline from the National Labor Relations Board (“NLRB”).

Because the penalties levied by the NLRB can be onerous, employers should be especially cautious when implementing policies, whether verbal or written in a handbook, which prohibit or dissuade employees from discussing their pay or benefits with coworkers. While most of these policies are ostensibly well meaning and meant to promote or foster synergy, collegiality, and comradery, the intent of the policy is of little value in defending against an unfair labor practice.

If you believe that your employment policies may not be compliant with the labor and employment laws, consider speaking to one of the qualified labor and employment attorneys at the Finney Law Firm: Stephen E. Imm (513-943-5678) or Matt Okiishi (513-943-6659).

 

Ohio Commercial Law: A pitfall of private lending — a borrower committing fraud

Author By Christopher P. FinneyPosted on

We’ve seen to over and over again, individual lenders “conned” by a borrower into making a supposedly secured loan, but in fact the same borrower has “pledged” the same collateral to multiple lenders for duplicate loans.  That means, of course, when it comes time to pay the money back, there is not enough cash to go around to the various lenders and someone is left holding the bag (or everyone is left holding the bag).

This blog entry explains the scam, and tells our readers how to carefully avoid it.

The scam

Here’s how the scam works: The borrower has control of an asset.  It might be a piece of real estate or a business.  Using that asset, he is able to convince the lender of his “bona fides.”

The borrower says: “If I had enough cash, I could complete the improvements on this property, and repay you your money with a good rate of interest.”  Or, “if I had enough money, I could  stock the shelves of this business, sell more inventory, and pay you a good return on your loaned funds.”

Wanting to help the fraudster, or, more likely, motivated by the greed of an above-market rate or return, the lender lends money.

But either trusting the borrower or trying to save money on legal fees and other expenses like an appraisal, the individual lender advances the cash in anticipation of great rewards when the property sells or the inventory turns, but the lender fails to properly document and  secure his loan.

Because nothing is recorded in terms of a security interest from the first lender, the borrower then goes to a second, a third and a fourth lender, promising the same high returns, and showing unsecured business assets (real estate, inventory, accounts receivable) as assets to stand behind the obligation.   These subsequent lenders are similarly fooled.

The out-of-town investor

I once had an investor from Chicago.  He was lured in to a scheme whereby his Cincinnati borrower was purchasing single family homes, and supposedly renovating them with the investor’s cash.  For simplicity and to save legal fees, the investor did not get a mortgage against the real estate and did not come to Cincinnati to check on the progress of the improvements.  He simply trusted what the Cincinnati borrower was telling him, and relied upon some phony cell phone photographs of the progress on the improvements.  And he wrote check after check after check to the borrower.

What was really happening was that the local borrower was taking my client’s cash for the purchase and improvement of property, but (a) the borrower was not in fact completing the improvements and (b) he had pledged the proceeds from the same properties to three other lenders.

The result

The result of these scams is entirely predictable: eventually the lenders want to be repaid, usually when the real property sells, the inventory “turns,” or the business is supposed to become profitable.

And each of the multiple lenders wants their cash more or less simultaneously.

Of course, there is no cash to pay these various lenders, or perhaps even one of them.  The lenders are left holding the bag.

Sure, the lenders can try to recover their investment through either litigation or — more likely — bankruptcy court.  But in all likelihood the borrower has no assets and the process will be a big, expensive mess.

A $1.3 billion version of the scam

We were recently reminded of this scam by this article from the Los Angeles Times.  There, a scammer conned “thousands of investors” out of more than $1.3 billion in a more complicated version of the same scam.

One wonders why someone did not ask for proper documentation and a first mortgage position in these supposed real estate investments and why someone did not blow the whistle on this guy earlier.  Of course, folks still are asking the same question about Bernie Madoff

How to avoid being scammed

First, “neither a borrower nor lender be” /1/ is not a bad admonition for individuals with cash to loan.  The lure of high rates of return may not be — likely are not — worth the risk.  Banks are in the business of lending money — and collecting it back.  And they are pretty good at it: Assessing the risk, securing the asset, obtaining guarantors for debt, assuring a proper down payment.  These folks have actuaries who assess the risk of certain kinds of lending and have the experience to avoid pitfalls that amateurs make.

Thus, as a general rule, if a borrower needs to borrow funds, tell him to go to a bank, which can spread the risk among many loans, assess the risks make prudent lending decision, and require appropriate down payments, guarantees, and security.  They also know to check for pre-existing liens and to properly document each loan.  They also don’t tolerate excuses for late payments that private lenders might.  They do this for a living.

But if you feel you must lend privately (or simply elect to do so), here are some pointers:

  • Do your best to prudently assess the risk the best that you are able,
  • Lend only against assets that can secure the repayment of the debt — real estate, jewelry, stocks or a lien on inventory and demand that the borrower post adequate security for the funds borrowed.
  • Think about getting third party guarantees for the funds loaned.
  • Make sure the borrower’s husband or wife are also guaranteeing the debt, as the easiest place to hide assets and income is in the name of the spouse of the borrower.
  • Whether through a real estate title examination or a “UCC lien search” for liens on personal property, ascertain whether there are existing liens that stand before yours.
  • Obtain a first lien position in those assets.  There are different ways under Ohio law to assure that you are in “first position” as to real estate, as to stocks, as to inventory and other personal property and special assets such as cars or jewelry.
  • Purchase a lender’s policy of title insurance for the loan amount.  In fact, make the borrower pay the cost of this insurance.
  • Properly document the loan, the security, and the guarantees.
  • Properly track loan payments and vigorously enforce the note and other lending covenants.

Using these techniques, a private lender can avoid the “multiple lenders” scam, and or at least — among all the others — be properly documented and secured in a first lien position against assets to pay the indebtedness.

Our firm knows each of these methods and can help you implement them properly them.

Conclusion

You have worked hard and invested carefully to accumulate the assets you have.  But others don’t have that same success, that same diligence and that same honesty.  There are millions of fraudsters out there glad to take your cash today on the promise of paying you tomorrow.  And they have neither the intention or the ability to fulfill that promise.

Use a Finney Law Firm transactional attorney — Isaac Heintz (513-943-6654), Eli Kraft-Jacobs (513-797-2853), Rick Turner (513-943-5661), Chris Finney (513-943-6655) or Kevin Hopper (513-943-6650) — to make certain that you are properly secured in for the money you are lending.

__________________________

/1/ From the web site “LiteraryDevices.Net“:

This is a line spoken by Polonius in Act-I, Scene-III of William Shakespeare’s play, Hamlet. The character Polonius counsels his son Laertes before he embarks on his visit to Paris. He says, “Neither a borrower nor a lender be; / For loan oft loses both itself and friend.”

It means do not lend or borrow money from a friend, because if you do so, you will lose both your friend and your money. If you lend, he will avoid paying back, and if you borrow you will fall out of your savings, as you turn into a spendthrift, and face humiliation.

It”s amazing this same advice applies more than 400 years after this noted author’s death.

“Making a Difference” in 16 hours and 30 minutes

Author By Christopher P. FinneyPosted on

Unless you live under a mossy rock, last week you read or saw that the Finney Law Firm won a swift and important victory for our clients in an important civil rights case.

At 10 PM Monday night, our firm filed a lawsuit exposing the unlawful handcuffing, arrest and search of a black Realtor and his homebuyer by nine police officers responding to a caller falsely claiming a breaking and entering at a home for sale in Price Hill.

At the same time as the filing, Channel 19 broke the story with a detailed newscast using body cam videos from the officers showing guns drawn, handcuffing for a protracted 4-5 minutes, and an illegal search of the innocent pair.  The house was for sale and had a “for sale” sign in the yard and a lockbox providing keyed access to the home.  The Realtor properly had made an appointment for the showing and legally made entry into the home via the key provided.

Our clients, Realtor Jerry Isham and his home buyer Tony Edwards, entrusted the important case to our firm.

In addition to the constitutional violations by the responding police officers, the City had illegally destroyed seven of the body camera videos months after our firm formally requested them, in itself actionable in a law suit.

At 2:30 PM the following day, fewer than 16 hours and 30 minutes after the filing of the suit, the City settled the case for 100% of the demand of the clients, including police and Realtor training seminars on police interaction on home sales.

In this instance, the Finney Law Firm provided swift and full justice for the Plaintiffs, but also sent a message into the community about respect for the constitutional rights of African American citizens engaged in entirely lawful behavior.

You may see the Channel 19 story here and read about the settlement in the Enquirer here.

In addition to our appreciation to our clients for entrusting our firm with this case, we also thank the City Solicitor’s office and Mayor Cranley for their leadership in quickly recognizing the legitimacy of the claims and settling them.

1 … 15 16 17 18 19 … 31