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Monday, September 12, 2016

The Ten Biggest Mistakes Made by Business Owners


10 Biggest Mistakes Made by Business Owners

The Small Business Administration estimates at least half of all new businesses fail within the first five years, and only about one third of new businesses last ten years.  The major factors which play in to the high failure rate of small businesses include a variety of economic and operational risks which are faced to one degree or another by every business.  In cases where those inherent risks of operating a small business are compounded with legal mistakes, the chances of business failure rises significantly.  Below is a list of ten of the most common mistakes our firm sees when we consult with new businesses.


1. Doing business without a corporate entity.
In more instances than you would believe, small business owners start conducting business without first forming a business entity.  Each case is different, some are afraid of the expense.  Some think they can sidestep the tedious corporate formalities.  Some don’t realize the purpose of creating a business entity and some people feel like corporate structure is only for “big” business.  Like it or not, the reality is that EVERY business doing business in Florida (ie. domestic and foreign) needs to register a corporate entity with the Florida Division of Corporations, if for no other reason, than to protect your personal assets from your business liabilities. 

2. Lack of a business plan.
Every business should have a business plan. Unfortunately, the vast majority of business plans are hardly worth the paper they're printed on.  It is not uncommon to see plans that are sloppy, poorly written or incomplete.  A good business plan presents an overview of the business in both the short and long term.  It should explain how you will get from point A to point B.  The plan should be a "roadmap" for your business. It should contain attainable milestones and targets and layout the steps you need to reach those goals. 

3. Outside investors.
Many small business owners bring in outside investors when they are desperate for cash. Shortly thereafter, the investor gets impatient and begins clamoring for a return on his investment.  This almost invariably leads into a dispute between the owner and investor as to how to operate the business, which ultimately ends up in a lawsuit.  To a prudent business owner, the identity and character of the investor is as important as how much money they are willing to invest. The bottom line -- choose investors very, very carefully.

4. Failure to do a shareholder or buy/sell agreement.
Every small business with more than one owner needs a shareholder or buy/sell  agreement.  This type of document specifically lays out how the business will operate,  how the owners will govern the business, management, voting rights, profit-sharing, new owners or investors, succession plans and perhaps most importantly, how dispute between owners will be resolved.  It is more likely than not the ownership group of the business will expand or change and, much like a will that provides for an orderly disposition of assets upon death, having a well-considered agreement among the owners can head off or limit disputes down the road and promote harmony among the owners.

5. Treating Independent Contractors as Employees
Many startup businesses make use of independent contractors, and with good reason.  They provide the ability to get tasks completed and don’t tie you to the requirements that come with having employees.  Use caution in how you deal with independent contractors. The IRS provides detailed information and a multiple point test to determine whether the independent contractor you’ve hired is actually a W-2 employee in disguise. It is important to review that test and understand the legal risk and consequences of not complying with the rules related to independent contractors.

6.  Using Online Contracts
Many business owners seek to skimp on legal services using contract templates they find online.  For small things like maybe advancing an employee an extra week salary, online contracts can be fine.  However, for anything which could have more drastic consequences down the line, contract templates are not a good idea at all.  Worse yet are those business owners who believe they are sophisticated enough to cut and paste clauses from several different online contracts.  In most instances, enforcing these types of contracts is a very difficult and expensive prospect.  Online contracts are generic contracts.  They do not take in to account the unique circumstances which exist in almost every contractual relationship, and such contracts almost always filled with legal loopholes.  The sad part is those legal loopholes can be closed by an experienced attorney for a couple hundred dollars.  Instead, the business owner winds up spending thousands of dollar litigating the meaning of ambiguous terms.   In short, the internet can make you feel like you are an expert, but you aren’t.  Find a local experienced attorney or eventually you will be reminded of the old adage, “you get what you pay for”.
  
7. Signing personal guarantees.
In almost any new business, access to credit is conditioned upon a business owners personal guarantee for the loan.  The reason for this is simple, new businesses do not have the resources to repay a loan.  Unfortunately, many business owners do comprehend the potential negative impact of guaranteeing their company’s debts, or personally guaranteeing other contractual obligations.  If you are one of the 50% of all small businesses that fail within the first five years, you are on the hook for all the debt the company incurred.  The potential hardships are obvious, and drive many people to bankruptcy.

8. Failure to avoid costly litigation.
As a business litigator, take it from me, litigation is expensive and causes a significant drain on the time and efforts of the business owner and any involved employees.  I always council my clients that business litigation should only be considered as a last resort.  Before getting involved in litigation, any small business should try to temper the emotions that are caused by a dispute and consider the costs and benefits of the litigation, just like they would any other business decision, and determine any collateral effects of the litigation as well.

9. Talking trash about their competition.
The temptation for small businesses to talk trash about their competitors publically or anonymously on the web is growing. Be careful not to libel them. What to do: Seek the advice of an attorney for what is libel and what is freedom of speech.

10. Failure to consult a lawyer.
A bit of self-serving advice, to be sure, but sensible nonetheless. Many business owners in general resist working with attorneys mainly due to the expense — they download contracts or  incorporation documents, which is fine until there is a problem.  One a problem erupts you can generally count on spending thousands of dollars to correct the problem which could have been averted by spending a few hundred dollars working with an attorney who has practical experience.




Keep in mind this list is by no means an all-inclusive list of all the possible legal mistakes business owners can make; just some of the most common. If you are a business owner or have the dream of opening your own business and would like some sound legal counsel from an experienced team of attorneys, the lawyers at Guy Yudin & Foster, LLP. are here to help! Feel free to contact our business lawyers here, or give us a call at (772) 286-7372.

Wednesday, August 17, 2016

Property Tax Time Again!



Property Tax Time Again!

Its property tax time again! 

TRIM Notices

If they haven’t done so already, all property appraiser offices around the State of Florida will be sending out their Truth in Millage (TRIM) Notices in the next few days.  TRIM Notices of course are the process by which each county property appraiser’s office informs taxpayers about their proposed ad valorem (property) taxes.  TRIM Notices are otherwise known to most of us as our “Notice of Proposed Property Taxes”


Many property owners simply ignore their TRIM Notice.  If you are one of the many and ignore your taxes until November you will lose your right to file an appeal of the valuation of your property. Therefore it is very important for all of use to review our TRIM Notices just to be sure nothing out of the ordinary.  In the event you do feel like the listed market value of your property is out of line, you must act before the deadline which should be noted at the bottom of your TRIM Notice. 

Be forewarned.  For the normal everyday homeowner, it is not usually cost effective or practical to contact an attorney to contest your proposed property taxes.  Thus, in more cases than not, a homeowner will be left to argue with the property appraiser’s office by himself.  Conversely, with many commercial and industrial properties the dollar amounts are far greater and it makes a lot of sense to contact an attorney with experience in dealing with the property appraiser’s office.

Informal Meeting

The first step in contesting your valuation normally consists of scheduling an informal meeting with the property appraiser.  However, given the fact there is precious little time between issuance of TRIM Notices and the deadline to file an appeal, you must act fast in order to schedule a meeting before the appeal deadline.  When you call to schedule a meeting, you should always request a copy of any and all documents which the property appraiser has prepared, or has relied on in setting your valuation.  Obtain this material as soon as possible, as this will give you guidance as to where you can focus your request for a reduction. 

The next step is to either hire someone or do your own research in order to document a lower valuation. Surprisingly enough, if you have done your homework and can provide the property appraiser with appropriate documentation to substantiate an incorrect valuation, it is not unheard of to reach an agreement reducing your valuation.  The key to a productive meeting with the property appraiser is providing documentation to support a reduction in your valuation.  Without adequate documentation you stand little or no chance of success.  

In the event you are unable to schedule an informal meeting prior to the deadline cited on your TRIM Notice, it is absolutely imperative you file an appeal before your informal meeting.  This create a placeholder for your claim and preserves your rights in the event you cannot reach an agreement at your informal meeting.  You can always withdraw your petition after your informal meeting if need be.

VAB Appeal

If you were not able to reach an agreement with the property appraiser, your next step is to pursue your petition with the value adjustment board (VAB).  This is of course, assuming you have already done your homework and can document an incorrect valuation of your property. If you can’t provide documentary proof the property appraiser is wrong, you are simply wasting your time.  Petition forms are usually available from the Clerk of the Court website or the property appraiser office.  Again, deadlines for filing petitions are usually set forth on the TRIM Notices with the deadline being the 25th day after the property appraiser mails the TRIM Notice.  You are permitted to be represented by an attorney at your VAB hearing, but it is not required.

Parenthetically, there is always the option of filing a lawsuit in circuit court, however, that option really only makes financial sense for very few property owners.  In the vast majority of instances, going to the VAB is the only practical option. 

The VAB is a five member quasi judicial board with two county commissioners, a school board member and two appointed citizens.  In most counties, your hearing will be scheduled in front of a Special Magistrate rather than the VAB itself.  Special Magistrates are hired by the VAB to conduct the hearing and provide recommended orders to the VAB. 

Prior to the VAB hearing, there is a mandatory exchange of evidence so again, you must have spent the time doing your homework and have the ability to document a reduced valuation.

On the day of the hearing, the Special Magistrate will probably begin by going over the rules.  Petitioner then goes first presenting his case, followed by the Property Appraiser, and Petitioner then gets a final chance to reply.  Plan on having all witnesses attend and testify at the hearing as frequently you find affidavits, letters and other extraneous documents will not be admitted in to evidence without being authenticated by live testimony.

At the conclusion of the hearing, the Special Magistrate will normally not render his decision verbally, but will issue a written recommended order to the VAB shortly thereafter.  You will be copied on everything that issued by the Special Magistrate or the VAB.  In the vast, vast majority of cases, the VAB will simply rubber stamp the Special Magistrates recommended order.  After all, that is what the VAB is paying him to do.  If you do not prevail in the VAB appeal, you always have the right to appeal that decision to the circuit court.  But again, going to the circuit court in pursuit of a VAB appeal really only makes sense in a very few limited circumstances, as there is no means to recover attorneys fees incurred to contesting your property valuation.

 Conclusion
If it isn’t apparent above, the key to succeeding in contesting your TRIM Notice (whether it be at an informal meeting, a VAB appeal or in circuit court) is to be able to adequately document an incorrect valuation.  Without the appropriate documentation to support your claims you might as well forget about contesting you tax assessment.  With the right documentation however, it might just be worth your time.





Friday, July 15, 2016

Florida Worker’s Comp Costs Going through the Roof Next Month!

                                 Florida Worker’s Comp. Costs                             Going through the Roof Next Month!


     In April of 2016, the Florida Supreme Court issued two opinions which will, by themselves, cause the cost of worker’s compensation insurance to go through the roof starting this fall.   In Castellanos v. Next Door Company the Supreme Court ruled that a law passed in 2009 creating a mandatory attorneys fee schedule for workers compensation cases was unconstitutional under both the Florida and United States Constitution. 

     Prior to the Castellanos decision, attorneys’ fees had to be commensurate with the damages received by the plaintiff in a workers’ compensation case. In this case, Mr. Castellanos was seeking benefits in the amount of $822.70.  His attorney billed 107 hours and sought a fee of $36,817.50.  However under the 2009 fee system, Castellanos’ attorney was awarded attorney's fees of only $164.54.

     Writing for the majority, Justice Barbara Pariente said the law creating the fee schedule violated Castellanos' due process rights under the state and U.S. Constitution because it prevents challenges to the “reasonableness” of legal fees in workers-compensation cases.   “Without the likelihood of an adequate attorney’s fee award, there is little disincentive for a carrier to deny benefits or to raise multiple defenses, as was done here,” Pariente wrote.“Virtually since its inception, the right of a claimant to obtain a reasonable prevailing party attorney’s fee has been central to the workers’ compensation law.”  By replacing the former “reasonable” standard with a sliding scale of legal fees, Pariente said, “the Legislature has thus eliminated any consideration of reasonableness.”
     In the second ruling, Westphal v. City of St. Petersburg  the Florida Supreme Court struck down the two year cap on workers’ compensation temporary benefits, re-establishing the cap at five years.
     Mr. Westphal was a firefighter who was seriously injured on the job, needing multiple spine surgeries. Under Florida’s workers’ compensation system, Mr. Westphal was barred from bringing a legal action for his injuries against his employer, and instead was required by statute, to apply for workers’ compensation benefits. Under the workers compensation system, Mr. Westphal was required to agree to his employer’s choice of physicians and to abide by those physicians’ advice.  After 104 weeks (2 years) of treatment by the employers physicians, Mr. Westphal’s temporary disability benefits ran out.  Despite the fact Westphal was still unable to work the employers physicians opined Westphal’s condition was still improving, and as such, he did not qualify for permanent disability benefits.   Thus, Mr. Westphal was completely cut off from the ability to receive any workers comp benefits until such time as he qualified for permanent disability.
     Based on the fact Westphal fell through the statutory cracks and was ineligible for continuing benefits, the Supreme Court held the eligibility time limit in the workers' comp law unconstitutional “as a denial of the right of access to courts.”   Then, rather than invalidating the entire statute, the Court employed the judicially created remedy of “statutory revival” replacing the 104 week temporary benefit cap with a 260 week benefit cap which existed in a prior version of the statute.  The Court further stated 260 weeks of temporary benefits “passes constitutional muster”.
     As a direct result of these two rulings, insurance industry analysts are predicting a 20% increase in workers’ compensation insurance premiums beginning this fall.  The increase being mainly to cover increased attorney’s fee awards resulting from the Castellanos decision, and to cover three additional years of benefits now allowed by the Westphal decision.

     With an increase of 20% in worker’s comp insurance, it goes without saying Florida consumers and homeowners alike can expect to pay a lot more for goods and services starting this fall as many companies, predominantly in the construction sector, go out of business.  

     For instance, companies such as roofers will see their premiums escalate so much that homeowners simply won’t be able to afford to have the work done and work will dry up.  With homeowners being unwilling to afford to pay licensed and insured roofers, you can then expect unlicensed and uninsured roofers to come in and fill the void at substantially lower prices.  Why is this a problem for homeowners?  Well, aside from the fact the quality of work will suffer with unlicensed and uninsured companies, if a homeowner hires an unlicensed and uninsured contractor there could be serious financial repercussions if a worker is hurt on their property.

         These two opinions also expose the inherent problems with the current workers compensation system.  For instance, the Supreme Court correctly recognized in Castellanos the current system encourages abuse by insurers since, without the fear of large attorney’s fee awards, there is no incentive for insurers to do the right thing on an $822 claim and just pay it.  However, on the flip side, I can think of no other court or administrative proceeding where anything approaching $36,000 would ever be found to be a reasonable amount of attorney’s fees on an $822 damage claim.  Thus, this ruling will only serve to encourage unscrupulous billing practices and file churning by plaintiff's attorneys.

         The same sort of conundrum is also apparent in Westphal.  Clearly, if a man is legitimately unable to work due to a work injury, but has yet to qualify for permanent disability his benefits should not be terminated.  However there is also no doubt that raising the time cap from 2 to 5 years will be another avenue of abuse of the system by workers, as there will be no incentive for them to settle their claims and return to work.

That all being said, perhaps the most disturbing part of both of these opinions to me are the legal red flags which are exposed.  In each of these decisions, the Supreme Court has yet again taken a judicial activist role, ignoring the separation of powers which is key to the workings of our government. 

Under the separation of powers, the legislature is empowered to make policy determinations and enact the laws of the state.  The judiciary is empowered to interpret the constitution and laws of the state, not pass judgment upon the wisdom of legislature's policy decisions.

In both Castellanos and Westphal, the Supreme Court has strayed from simply interpreting the law but rather, has taken it upon itself to encroach in to the legislature’s realm of deciding what constitutes good policy for the state.  In fact, in Castellanos and Westphal Justices Canady and Polston politely take their colleagues to task for ignoring separation of powers and invading the legislature’s authority to make policy determinations. 

In the Castellanos dissent, Justice Canady recognized that it was a policy determination, and the Legislature was fully within its authority to establish a relationship between the amount of benefits obtained in workers’ compensation cases and the amount of attorney’s fees awarded.  He went on to chastise the majority for declaring the law unconstitutional simply because they disagreed with the wisdom of the Legislature's policy determination.

Canady and Polston also penned a similarly themed dissent in Westphal because essentially the majority of Justices arbitrarily decided 260 weeks of benefits was constitutional, yet the 104 weeks of benefits authorized by the Legislature was not.

 We know almost for certain that since this an election year, there will be no special session called to deal with the workers comp insurance.  Thus, it seems likely the Legislature will deal with amending the workers comp statute as soon as the 2017 legislative session begins.

We can only hope this time, when the Legislature comes up with its fix, the Supreme Court will respect the principle of separation of powers regardless of whether they concur with the wisdom of the Legislature or not.  





Tuesday, July 5, 2016

"AN OUT AND OUT PLAN OF EXTORTION"

"AN OUT AND OUT PLAN OF EXTORTION" 


As we roll in to July, it has not been widely publicized but a new set of amendments to the Martin County Comprehensive Plan are set to go in to effect later this month.  These amendments are numerous, and will eventually prove shocking and troublesome to many residents of Martin County.  
For those having the patience to sit, read through and understand all these amendments it becomes clear these latest changes are not part of a coherent “plan” for Martin County.  A “plan” would clearly lay out the big picture with regard to how residents want Martin County to evolve.  The bulk of these amendments do not address big picture items.  Rather, they are specific new local governmental regulations which are being improperly injected in to a “planning” document..  What is the difference you ask?  It’s simple, local ordinances and/or regulations are the method by which the “plan” is implemented.  Logically this makes sense since we want the process of changing the “plan” to take longer so we don’t change the  “plan” on a regular basis.  To the contrary, we DO want the ability to change regulations and ordinances in a timely manner because we may, from time to time, stumble upon better or more appropriate ways to implement our “plan”.
That having been said, there is only one motivation for placing specific  regulations in the “plan” where they don’t belong.  That motivation is………….wait for it………………to make it as difficult as possible to undo the continuing and unabashed assault upon the private property rights of the citizens of Martin County. 
For instance, one of the more objectionable provisions in the amendments is laid out in Policy 8.1C.1(1), providing for the creation of a new seventy five foot (75’) shoreline protection zone (SPZ).   This new 75 foot SPZ is, or will now be, required for “all new development”.  Thus, as of the effective date in July, “no construction” will be permitted in Martin County within 75 feet of the waterline on any waterfront property within the County.   In other words, in Martin County no waterfront real estate owner will be permitted to make any use of a 75 foot wide strip of land which abuts the water.  There is no scientific justification cited in the "plan" for this regulation, rather, the 75 foot SPZ is premised upon a generalization and presumption "that of course a 75 foot buffer will help water quality". 
This type of regulation, which denies a limited group of property owners the right to use their property is not new by any means in Martin County.  It is simply a perpetuation of the problematic mindset which all to often goes unchallenged because citizens believe a burdensome regulation will only affect someone else.  After all, why would any voter object when there is a governmentally identified "public purpose" that is being advanced solely by burdening a small minority of property owners?     
            Looking at it  purely from a fairness perspective I think we would all agree if there is some truly legitimate “public purpose” to the community, the cost or burden of achieving that"public purpose' should be borne by the entire community, not just by a small minority of property owners. So for instance, (leaving aside the issue of 75 foot SPZ being improperly injected in a planning document) if there truly is a “public purpose” to the community to be achieved in enacting a 75 foot SPZ, then Martin County should pay all waterfront property owners for taking their 75 foot strip of land.  To be fair, Martin County should then turn around  and assess all County residents their fair share of the cost of buying the land needed to achieve this "public purpose".  
This type of governmental regulation which takes property without providing just compensation violates the United States Constitution’s Fifth Amendment’s Takings Clause which states: “nor shall private property be taken for public use without just compensation.”
Uncompensated regulatory takings of private property have become an immense problem not just in Martin County but all across the nation.  This, notwithstanding the fact the US Supreme Court has recognized it is inappropriate for governmental regulation to act as a substitute for the power of eminent domain, calling it an“out and out plan of extortion” 
With any luck however, the tide many be turning on uncompensated regulatory takings.  There is currently pending before the US Supreme Court the case of Common Sense Alliance v. San Juan County which is a case from San Juan County in Washington State.  The most interesting factor in Common Sense Alliance  is that the unlawful regulation which precipitated this case is eerily similar to the 75 foot SPZ in Martin County.    
As is the case in Martin County, San Juan County’s “growth management approach" to regulating land-uses adjacent to environmentally sensitive lands relies almost exclusively on presumptions and generalizations. 
In 2012, San Juan County enacted a regulation stating that as condition of obtaining local government approval, a waterfront property owner must dedicate a portion of their property as an on-site conservation area.  So, just as with Martin County’s 75 foot SPZ, San Juan County shoreline property owners are required to set aside “water quality buffers” as a condition of development.   Again similar to the 75 foot SPZ in Martin County, San Juan’s “water quality buffers” are not based on any harm the proposed land use itself might cause, but based on the county’s general efforts to reduce pollutants and improve water quality.   
            The San Juan regulation was challenged as a taking without just compensation by a local property owners’ association called the Common Sense Alliance. Unfortunately, at each level the Washington state courts ignored the Fifth Amendment and sided with San Juan County finding the ordinance was permissible because it was a generally applicable ordinance instead of a case specific  regulation.  Because the Washington State courts ignored well established federal precedent with regard to the federal Takings Clause, the case has been appealed to the United States Supreme Court.
The Washington State courts logic flies in the face of several U.S Supreme Court decisions, such as Nollan v. California Coastal Commission and Dolan v. City of Tigard, which  hold the government may only demand property from a permit applicant when necessary to mitigate a harm that the proposed project would cause.  Put another way, permit conditions are legal only when they mitigate identifiable development impacts caused by that permit applicant. Permit conditions cannot be imposed to cure problems not created by the permit applicant, or be disproportionate to the impact.
In 2013, following along the rationale of Nollan and Dolan, the Supreme Court said in Koontz v. St. Johns River Water Management District that government is forbidden from pressuring citizens into forfeiting their constitutional rights by coercively withholding benefits (i.e., giving up property to obtain a permit).
            With any luck the Supreme Court will grant review to Common Sense Alliance v. San Juan County, and there is hope the case could be heard by the Court before the end of 2016, so perhaps by 2017 private property rights in Martin County and across the country can begin to be restored as the Constitution intended..   

Tuesday, June 21, 2016

LICENSED CAPTAIN OR NOT?

LICENSED CAPTAIN OR NOT?

I recently received a call from a long time marine business client looking for some help resolving a problem that had arisen regarding the need for a licensed captain.
For the past several years, this particular client has operated a camp for kids with cancer at his waterfront property.  The camp is free for all children who are referred through a particular well known local non profit.   The entire cost of the camp is underwritten by this particular client so campers pay nothing. 
Not surprisingly, one of the favorite activities for the kids is going on their daily boat trip.  Trips vary each day taking campers fishing, water skiing, eco tours, trips to a waterfront restaurant for lunch, etc.  These boat trips have always been conducted by volunteer (but very experienced) boat operators. 
Based upon the outstanding feedback received from camp attendees and their parents, my client decided this year he would offer a similar summer camp for local kids.  This summer camp however, includes a minimal fee to cover expenses for the week.  My client arranged to use the exact same experienced volunteer boat operators whom he used for his free camp, but was told by his insurer they would not issue an insurance policy unless licensed captains were operating the boats taking campers out on their daily boat trips.
His question of course, was why do I need a licensed captain for my summer camp when I never needed one before.
I must admit I have never encountered an insurance company refusing to issue an insurance policy for not using licensed captains, but as a business lawyer in an admiralty and maritime firm, every year I do get the same basic question from at least a couple of my clients, that being: am I required to have a licensed captain operating my boat?
The Coast Guard provides a very good and detailed explanation of when a licensed captain is required.   
Under Coast Guard rules, a licensed captain is required for all charter operations.  Charter boats are referred to as uninspected passenger vessels (UPV).   Coast Guard regulations make it illegal for a UPV to engage in “passenger for hire” operations without a Coast Guard licensed captain.  
A passenger for hire is a “passenger for whom a consideration is contributed as a condition of carriage whether directly or indirectly flowing to the owner, charterer, operator, agent, or any other person interested in the vessel is a passenger for hire.”  Basically, anyone who is required to contribute something to get on the boat.
Thus, in my client's case I had to break him the bad news.  Coast Guard regulations demanded he get licensed captains to operate the boats for summer camp because attendees were required to pay a fee to attend camp.  Conversely, since attendees at his kids with cancer camp were not required to pay anything to attend, this would be classified as a recreational excursion and volunteer boat operators were acceptable (I’ll leave for another day a discussion of the propriety of volunteer boat operators from a boating accident and boating injury perspective).
Aside from the importance of the question for my client, locals up and down the east coast need to understand this is an important issue for every weekend warrior. 
It's no secret the Coast Guard has been cracking down up and down the east coast on what they perceive to be unlawful charter boats.  It is not uncommon for a small center console type boat with several individuals aboard heading in from a day of fishing to be stopped by the Coast Guard.  Questions usually begin with an eye towards a safety check, but then quickly transition in to questioning the vessel operator and passengers separately regarding how the voyage was financed.  
In fact, there appear to be instances where the Coast Guard has determined an illegal charter to exist where a boat owner basically said to one of his buddies Hey Joe, if you pay for half the fuel, food and drinks we can go out trolling for dolphin.  The logic presumably being that Joes buddy felt he was required  to pay for half the fuel, food or drinks to go fishing.  Illegal charters can subject a vessel operator to criminal and civil liability of up to $40,000.00 per violation. 
Given the high degree of confusion surrounding the issue, the Coast Guard has published guidance specifically stating it is not an illegal charter when passengers freely and voluntarily contribute to the voyage.  Thus, for anyone who fishes recreationally, the lesson to be learned is if your fishing buddies don't feel they are freely and voluntarily sharing the expenses of the fishing trip, an otherwise fun day of fishing could end up as a very costly nightmare.


Wednesday, June 15, 2016

BOAT WAKE LIABILITY

BOAT WAKE LIABILITY

While up in north Florida this past weekend, my in-laws were hosting a party at their home which sits on one of the larger rivers up that way.  Saturday was the first nice day of the week, and all the crazies were on the water early.
As I was standing on the river bank with some family friends eating hot dogs, we watched in horror as an exceedingly large sport cruiser passed the property going way too fast.  As you can imagine this boat which belonged in the gulf, not the river, threw up a gigantic wake in comparison to the minimal wakes created by the little “go-fast” boats which usually populate the river.  This particular wake picked up my father-in-laws floating dock and deposited it on a tree branch hanging over water.  The local real estate attorney who happened to be eating hot dogs with me, piped up asking if boats on the river could be held liable for damage caused by their wakes.  He then proceeded to tell me his tale of woe about one of his clients trying to sell a house on the river with boathouse and dock having suffered significant damage from similar large boat wakes. 
The short answer I gave him was yes, all boats (including jet skis) are responsible for any damage caused by their wakes, be it personal injuries or property damage.  Our firm has litigated several of these boat wake cases, but thus far they have always involved personal injuries, not property damage.   
That having been said, we find normally there are two big challenges presented in boat wake cases.  First, there is frequently a problem identifying the owner and/or operator of the vessel who created the damaging boat wake.  The second major issue that arises is that it is often difficult to prove the damage (personal or property) in question was caused by the excessive wake rather than being a pre-existing condition.   

As more and more boats hit the water, more and more people are operating boats without the requisite skill and experience needed for the protection of everyone on the water.  As a result, it would seem boat wake cases are only going to continue to become more prevalent as the years go on.   If you don’t want to find yourself on the wrong end of a boat wake case, go the extra step and make sure you are a conscientious and courteous boat operator.   Competent boat operators are something we can never have enough of.

Monday, June 13, 2016

WHERE IS FLORIDA’S HOMEOWNERS’ BILL OF RIGHTS?

WHERE IS FLORIDA’S HOMEOWNERS’ BILL OF RIGHTS?

Momentum is building around the nation to finally say enough is enough when it comes to overly intrusive governmental regulations.  More and more citizens are becoming aware of the fact that almost invariably each new, well intentioned governmental regulation comes with far reaching unintended consequences.  Not only do these unintended consequences usually strip away property rights, but the accumulation of the unintended consequences over time cause a financial drag on communities.
Most recently, two legislators in Wisconsin rolled out their “Homeowners Bill of Rights”.  The stated intent of their legislation is to protect homeowners from the “creep of overbearing government at all levels”.  Citing studies indicating nearly 25% of the price of a new home is directly attributable to governmental regulation; the legislation seeks to significantly reduce housing costs, which will in turn lead to greater home ownership and a more invested community.  The Wisconsin Homeowners' Bill of Rights includes provisions to:

1) Control property taxes
2) Increase broadband access
3) Make the supply and delivery system for propane affordable 
4) Provide property owners additional protections from "takings" 
5) Reform unreasonable regulations that threaten property rights
6) Reduce regulatory barriers for home buyers
7) Protect your "right to fly the flag"
8) Require a warrant based on probable cause for any search of a property
9) Broaden the concept of grandfathering
10) Inject a private property rights element into the Smart Growth program

Any such bill would obviously need to tweaked a bit to conform to Florida’s peculiarities.  But wouldn’t it be nice to see our legislators in Tallahassee taking concrete steps to proactively begin reigning in overzealous governmental entities, protecting property rights, encouraging families to become homeowners and fostering the American Dream?