When a Short Sale Might Be Your Best Option for Your Home

 

How a Short Sale Might Assist You

Transcript:

Hi, my name is Jordan Flake. I’m an attorney at Clear Counsel Law Group. We deal with a lot of real property issues, and there are times that we help people accomplish a short sale. Pretty much everyone I know has either seen a foreclosure, or a short sale, or a default at some point in the last several years, because so many people have gone through that, here in the Valley; but just so that you know exactly what your short sale options are:

The term short sale just means that you’re selling the property out there in the world, and the proceeds from the sale are not sufficient to cover the loan balance. Let’s use an example. Let’s say you owe $80,000 on a house, but the house is only worth $60,000. The owner of that house basically can get a buyer for $60,000, and go to the bank and say, “Hey, listen, I don’t have enough money to cover all $80,000 that I owe. However, I have this buyer, and rather than default on this and have it go into foreclosure for several years, why don’t you accept this $60,000 buyer, and we’ll basically allow that to wipe out the loan.”

 

Short Sale Home, Las Vegas, Nevada Real Estate

 

It’s very important when you do a short sale that you cross all your T’s and you dot all your I’s, because you don’t want that $20,000 deficiency, in other words the amount of the mortgage that wasn’t covered by the sale, to chase you down, and hunt you down, and follow you around for a long time. That’s, depending on whether not you have a first and/or a second, there’s different rules that apply; but if you’re thinking about short selling your home, please reach out to Clear Counsel Law Group. I’m more than happy to do a no-charge consultation, just to discuss your short sale options, give me a call. Thank you.

Your Personal Auto Insurance and Rental Cars

 

Does Your Personal Auto Insurance Include Coverage for Driving a Rental Car?

 

Transcript:

 

Hi. My name is Jared Richards and I’m one of the partners here at Clear Counsel Law Group. One of our readers has asked if a person is driving a rental car, and that person’s not listed on the rental car’s insurance, will that person’s personal insurance cover any responsibility for the car accident?

The answer is yes. If you have rented a car, and you let somebody else drive it, then generally the car insurance, or the car rental company. They all carry insurance, but generally minimal insurance, but generally that insurance will refuse to cover anybody who was not an allowed driver; an allowed driver by the rental company.

 

rental car, car accident, Nevada, Las Vegas

 

The next question is, is there any other insurance to use? Yes, that driver’s own car insurance should cover the accident. I’m not sure that I’ve ever seen a car insurance policy that’s related to that person as an individual that wouldn’t have covered it.

Now, there may be other factors: if he’s driving for reasons of work, or other things that may affect coverage, but in general, if a person is driving a rental vehicle and they’re not an allowed driver, they’re not listed with the car company, then their personal insurance, yes, should still cover the accident.

If you’re in that situation or you’ve been hurt by somebody like that, give us a call, we’re happy to help. You could otherwise explore our website. We’ve got lots of videos to answer all of your questions. Thanks, and have a good day.

Caucus, Nevada, Democrats, republicans, trump, hillary, bernie, cruz

The Answers to All of Your Caucus Questions!

You knew all the fun had to end eventually, right? I wonder if the national parties (in collusion with the cable news networks) decided to move the first primary or caucus back to April, what the candidates would do? Could they possibly keep up this pace for another three months?

Assuming the caucus dates will not be moved (to the chagrin of some establishment types that need more time to buy this thing), we still have so many unanswered questions: Will Rick Santorum wear his patented sweater vest without sleeves once it gets warmer? How many pairs of fancy boots does Mr. Rubio own? Is there anyway to distract Bernie from discussing income inequality?

If only we had more time!

Whether you are all aboard the Trump-train, feeling the Bern, “in” with Hillary, or part of the CruzCrew, you have likely heard all you need and are ready to declare that all import vote in the primary process. Now the only remaining issue is: How?

Below is a composite of most Frequently Asked Questions about the caucus process:

 

When and Where is the Nevada Caucus?

For some reason, (I have a guess but it is not appropriate to speculate), the two political parties host their caucuses on different days:

The Democrats: 20 February 2016, Saturday. Registration starts at 11am, the doors close at 12 Noon. They claim that if you are not at your caucus location by 12 Noon, they may not let you in.1)if you call their bluff, let me know by email what happened! brian@clearcounsel.com. Find your caucus location here.

The Republicans: 23 February 2016. Tuesday night. You have to register Republican by 13 February to participate. If you do not register by 13 February, you will not be permitted to attend (There is a link below to help). Find your caucus location here. (You need to register to vote first).

 

What are the Requirements to Caucus?

Here in Nevada, the state government only administers general elections. The Democratic and Republican Caucuses are administered by their respective party. In turn, the rules are entirely determined by the state parties.

You must abide by the following necessary conditions to participate in the Nevada Caucus:

  1. You must be 18 years old by the date of the Presidential Election on November 8, 2016. Yes, this means, a high school senior (that is currently 17) that will be 18 years old by November may (and in fact, is very much encouraged) join his or her caucus meeting.
  2. You must be a Resident of the state of Nevada.
  3. You must register as a Democrat or Republican (we do not have a so-called “open primary” where folks of any party may vote in any primary). Does this mean that you have to vote for the same party that you caucus for? No! Don’t let them tell you otherwise.

Important note for registration: If you are a democrat, you may register at the caucus site on the day of the meeting. If you are a republican, you have to register to vote by February 13, 2016. You may do so here.

Once more, because it is important, if you intend to caucus for a Republican, you must be registered to vote 10 days before the Caucus! Just click the link above, and so long as you have government-issued ID, you will be able to register to vote online.

 

What Happens at the Caucus Once You Arrive?

Upon arrival at your caucus site, you will register with the nice folks that will have a table near the door. Next, head over to your Presidential Preference Group if you already have a candidate in mind that you want to manifest a preference to support. If you have not made a decision yet, that’s ok! There will be a grouping of folks for “undecided.”

Important note: Standing2)or sitting with an initial group does not lock in your support for that candidate. You will have another chance to change your mind!

Next, (once everyone has arrived and sectioned off into their beginning preference) the Chair of your meeting will likely read/make statements from Nevada elected officials/party leaders.

After which, each campaign represented will be invited to speak on behalf of their candidate to persuade others in the room to help support their candidate.

Yet another important note: You do not have to do any public speaking if you do not want to! Folks volunteer for this responsibility; at the same time, the speaking gig is not assigned by the campaigns. The folks in your preference group will decide whom will speak for the whole.

After the speeches, there will be a fixed time for “persuasion.” Now comes the fun part! At this point in the process, folks supporting any candidate may try to persuade other people to come join their preference group. Don’t worry, no one is going to bully you/make you support any candidate. Better to think of this as the civil, community meeting portion of the event. After the persuasion period, folks head back to their preference groups and the total number of folks preferring each candidate will be calculated.

That’s it. Does it take a little more time than voting in a booth? Sure. But this is so much more memorable and fun (and you can play on your phone the whole time if you want).

 

What Caucus Rules Do You Need to Know?

Viability, mostly.3)Your precinct chair will read the rules to the caucus when you get there

Because the democrats and republicans will administer there own caucuses, they make their own rules. Better yet, the each caucus is different from the other.

Let’s start with the Democrats (because they go first).

The proceeding text comes from the 2008 Democrats Caucus guide, and the Nevada Democratic Party has confirmed4)through their spokesman Stewart Boss that these viability demarcations will be used in 2016 as well:

Caucus Viability Formulas Caucuses which elect Viable groups must contain 25% of Two (2) delegates attendees (# eligible attendees × .25).

Caucuses which elect Viable groups must contain 1/6th of Three (3) delegates attendees (# eligible attendees ÷ 6).

Caucuses which elect Viable groups must contain 15% of Four (4) or more delegates attendees (# eligible attendees × .15).

Always Round all fractions UP to a whole number when determining viability (e.g. If 1.1 Round to 2 — If 1.8 Round to 2)

 

Did your eyes just glaze over? Stay with me here, I can easily summarize. If you live in the Las Vegas Valley, it is most likely you will be at a caucus with four or more delegates (The orange line). What you need to know is that the Democrats do not count preferences for a candidate unless s/he has a sufficient level of support, a la at least 15% of the total number of people present. 

Insider tip: Folks who really care about winning for his/her candidate should start counting participants as soon as the doors are closed to figure out the 15% threshold. For example, if you are (if not all in, but at least partly) “In for Hillary,” and you count a total of 100 people at your caucus location, you will know that a candidate must have at least 15 folks in his/her corner to earn anything.

Continuing the hypothetical, if said Hillary supporter saw only 12 people standing on the side of the room to support Gov. O’Malley, it makes sense to make a beeline toward them once the persuasion period begins5)With a pitch like, “given that you don’t have enough supporters present, don’t you want your vote to count?”

I don’t have anything against Mr. O’Malley6)minus what happened in Baltimore under his tenure, but it unlikely, given his poll numbers, that he will be viable at the Nevada (or Iowa) Caucus. Some polls have Mr. O’Malley as high as 6%, which leaves many a 2nd-choice voter to be recruited for the Bernie/Hillary campaigns. How funny would it be for O’Malley supporters to be the ones to determine the Caucus outcome7)By the way, this happened in Iowa in 2008. Many Edwards preference groups did not meet the viability threshold. If those folks’ 2nd choice had been Hillary Clinton instead of Barack Obama, the entire course of human history could be different!8)There is no chance Mr. Obama is elected if he did not win Iowa…he has admitted as much.

 

The Republicans

For our Republican friends, don’t worry, none of this viability silliness applies. One person representing each campaign will give a public statement, and then each person will vote for his/her preferred candidate on a paper ballot. All Republican votes will be counted as there is no viability threshold.

If you are still concerned about the process/have questions, please do not hesitate to call (ask for Brian) or email, and I will do everything I can to help. We are Clear Counsel are not making an endorsement for the primary season, but we all strongly believe in representative democracy, and therefore, will help anyone of any party.

Even if you are still unsure about the caucus and don’t have time to call/write, just show up! I promise you will be able to figure it out; we all are Americans after all.

Thanks for reading.

More information:

http://nvsos.gov/index.aspx?page=1058

 

http://www.rgj.com/story/news/politics/2016/01/21/confused-nevada-caucus-s-easier-than-you-think/79086178/

 

Footnotes   [ + ]

1. if you call their bluff, let me know by email what happened! brian@clearcounsel.com
2. or sitting
3. Your precinct chair will read the rules to the caucus when you get there
4. through their spokesman Stewart Boss
5. With a pitch like, “given that you don’t have enough supporters present, don’t you want your vote to count?”
6. minus what happened in Baltimore under his tenure
7. By the way, this happened in Iowa in 2008. Many Edwards preference groups did not meet the viability threshold. If those folks’ 2nd choice had been Hillary Clinton instead of Barack Obama, the entire course of human history could be different!
8. There is no chance Mr. Obama is elected if he did not win Iowa…he has admitted as much
Nevada Caucus, Iowa, Trump, Bernie, Hillary, Cruz, Jeb

Your Much-Needed, All-Encompassing Caucus Preview! Now with a Small Debate Recap

**Updated With a Debate Recap**

 

To be the man, you have to beat the man.

-Pro Wrestling Proverb

 

 

The First GOP debate of 2016 affirmed my analysis of the race, see below. It is still a two-man contest between Mr. Cruz and Mr. Trump. Fox Business held the first laissez-faire debate of the season last night where candidates could come and go into conversations as they please, and answer only the questions they wanted. In terms of raw entertainment value, this was the best debate by far; each of the candidates is getting better with practice, some improving faster than others.1)Even Jeb!

Mr. Cruz showed last night that yes, indeed, he can win this thing. What you are about to see is the first candidate in the race actually stand up to Mr. Trump:

 

 

That “Constitution didn’t change since September” line was great. Mr. Cruz’s gab gift is such that Mr. Trump even smiled at a few of his quips! If you can’t stand up to Mr. Trump, how will you face Mr. Putin?

Shockingly, Mr. Cruz then found a way to make Mr. Trump sympathetic. Don’t believe me? Watch:

 

 

Five months ago, I would have never imagined Mr. Trump could do that. Unfortunately for Mr. Cruz, he had to burn many a bridge to get himself to his peculiar status as the “insider/outsider”2)Could someone not from Texas pull this off even??. Mr. Cruz may not have enough allies left in the establishment to muster a sufficient challenge to overcome the momentum of the Trump Train.

It’s clear after last night though; Cruz can win.

 

 

Welcome to our Iowa/Nevada caucus3)Yes, some New Hampshire too preview! In only4)haha, yeah only eleven months from now, all this jockeying will be over and the cable news will have to go back to talking about…What did they talk about before? Oh right! Airplanes lost at sea! Weird how no planes got lost over Bermuda during most of 2015; it is as if they know when to get lost to maximize news coverage, or something.

I know you see eleven months noted above and you’re thinking “Pshh, eleven?? Call me in October and I’ll see what these folks are up to.” Ah, my good friend, you do have a little time to head over to Kingman and burn your hard-earned money on an immoral national lottery that the Nevada Gaming Board would never permit5)because of the horrendous odds, but we will need your attention upon your return!

The Caucuses are coming; the caucuses are coming! Shockingly, our two-party political system has produced candidates from each party that differ to such an extent that these primaries will have a significant effect on the political process and the country as a whole. Not only should you be voting the celebrate the sacrifices of the countless others that died for your right of popular political participation, but because you can have a tangible effect on what it means to be an American for five, ten, maybe even twenty years from now.

So we best get this right, eh? This isn’t like those previous caucus seasons when you could pick any of the handful of politicians from one party and the policy result would not differ. You happen to be privileged enough to live in a country where you can actually participate in its future6)At the risk of being mercilessly mocked on the twitter, it is worth taking a moment and appreciating how lucky we are all to live here. You could have ended up in any of the nearly 200 countries in the world, and we are in the richest/most free. Yes, we have many an issue, but it is important not to lose perspective.

Time to get informed then? Insiders tip: don’t tell your coworkers you just noticed last night that we have a caucus in a months’ time. Play it like, “yeah, I’ve been following this stuff this whole time, I just didn’t want to talk about it too much to make y’all feel bad.” People seem to get defensive if you only recently made your 2016 caucus choice, as if your preference has less value than the bro who has been praying that Mr. Trump run for office since 2003.

Above, you see the most recent Nevada caucus polling. There is not much Nevada polling, and frankly, none of it would matter much anyway. We see the press (and Mr. Trump) playing a lot with national polls, yet there is no national caucus to decide the candidate for each party. No, the caucus or primary takes place in a pre-ordained sequence, meaning, in a Samuel Huntington7)Huntington wrote political theory about developing countries saying the the order in which institutions are established matters significantly to the outcome.-esq way, sequences matter! If New York voted first, followed by Texas then California, we would be looking at a completely different race!8)Shout-out to William Vollmann whose excessive use of exclamation points I am currently [poorly] emulating

My point being that the result of Iowa, New Hampshire, and South Carolina will affect the caucus here, so taking snap-shots of the current Nevada polling doesn’t mean that much/have much value. In turn, to understand potential outcomes for the Nevada caucus, we need to glance at the state of the race in Iowa and New Hampshire.

After tossing the coin, the Republicans9)not surprisingly advised by Bill Belichick opted to defer to the 2nd half, so we will start with your friends, Hillary and Bernie.

 

The Democrats and Their Caucus

I haven’t written much about our Democratic friends, as there really wasn’t much news to report. Hillary was up by 20 points, nationally and in all the early states, and there was no reason to presume that Bernie would be able to rise above the 30% plateau attributed to his support in November. Then there was Christmas, New Year’s…and all of a sudden:

 

Whoa! #Bernmentum indeed. I always knew America would take to democratic socialism, it just needed the right, pretty spokesman to do the job10)On a related note, Bernie’s hair is combed in nearly half his television appearances now, much marked improvement. Trends/momentum are important for the caucus, and as you can see above, Hillary must be having nightmares of 2008 all over again (she was up by about the same amount in 2007 December over Obama and Edwards).

I have no insider Hillary knowledge11)I should disclose here that they offered my a job in 2008 but I declined, but my guess is that Team Hillary hoped to hire all the Obama operatives (I watched these folks work in 2008, they are very impressive), and then transfer his popular support directly to Hillary. The plan did not go as hoped. Hillary has been unable to form Hope and Change 2.0 and instead is dealing with all the same issues she had in 2008 with the base democrats, just with new topics. In 2008, the base dems saw Hillary as a war hawk, and her rival campaigns used the base’s hatred of Mr. Bush’s Iraq adventure to defeat Hillary.

Instead of foreign policy12)apparently all the politicians in Washington believe in war in perpetuity now that Mr. Obama has embraced the Bush doctrine, now Hillary is getting attacked for being too moderate on the income inequality, which happens to be Bernie’s pet issue/the issue he speaks best on. The difference eight years later is that as opposed to the 5 competing campaigns teaming up to defeat Hillary in Iowa13)She was that much of a sure-thing then, promise, Bernie is doing it all by himself14)well, along with his coalition of the willing. Unfortunately for Hillary, it looks like the old Edwards/Obama/Biden supporters did in fact come together in a big tent, just against her. Again.

Things are even worse in New Hampshire, Bernie’s next door neighbor:

 

https://twitter.com/RichardAngwin/status/685634979179593728

 

I don’t know about KABOOM, but yes, Bernie is doing well. Does it mean he has got this thing locked up? Not even close. Hillary is up big in South Carolina, and as you saw above, polled very well in Nevada in late December.

The state count could be 2-2 come Super Tuesday. Hillary is not going to go down easy, folks. Take a look at this ad they put out yesterday:

 

 

Pretty effective on the liberals and their hatred of all things gun. Hillary is at risk of the sky falling on her campaign if she does not win one of the first two states. The every-moment-of-the-day15)trademark pending media will just go crazy with their hot-takes and “I told you so’s”.

Yet if the worst occurs, and if she can get out of Nevada with the score 2-2, Hillary is still a -200 favorite to win the nomination, given her fundraising.

Like I said before, your Nevada caucus preference16)This is correct term for a caucus, not “vote,” talk like you’ve done this before really matters!

 

The Republicans and Their Caucus

 

“More than 1,000 words and no Trump talk yet?? I thought you said we were going to ‘Make Caucusing Great Again’?”

Ok ok ok, sorry. Yes, your friend Mr. Trump has turned out to be a much better politician than anyone (besides the Donald) gave him credit for. And yes, like I wrote a few weeks ago, he remains the front-runner.

..But there is a bit of overcast for Team Trump. Of course, though, we have to start with a national poll that Trump dominates:

 

Twenty-eight points! The republicans found lots of folks to run for President, yet none of them have any military or state experience. Imagine if Jim Webb didn’t promote organized labor and registered republican; no way Mr. Trump is up by this much. More than a dozen candidates for President, and the candidate with the most military experience was a JAG lawyer and already dropped out17)Come back Lindsey!. You have to think that if Gen, Petraeus didn’t ruin his career with the book lady, he would have been the nominee for the Republicans, and given all the worry over terrorism, he’d probably be polling pretty well.

But here we are, with a combination of first-term senators, governors, and private sector folks with a combined zero days of military experience. Thus, Trump.

 

But sequence matters with the republicans too! Let’s see what’s going on in Iowa:

 

Mr. Cruz is winning! (probably). Guy is working his tail off in Iowa; I have no doubt he will have visited each of Iowa’s 99 counties by caucus day on 1 February. Iowa voters take their responsibilities very seriously, as they say, they got to kick the tires of a candidate two or three times before an individual would even consider caucusing for him or her.

If Mr. Cruz can pull off the upset and defeat Trump, the sequencing effect likely takes hold (people want to vote for a winner after all). An Iowa win for Mr. Cruz could completely change the dynamics of the race (for him and Mr. Trump only, sorry kids). If Mr. Trump blows out his establishment opponents in the first two states, he potentially18)can’t believe I’m typing this could sweep the field. He’s up Yuge in New Hampshire, South Carolina and Nevada, and if he sweeps the first four states, I cannot imagine another candidate will be able to raise enough money to compete with him. Mind you, Mr. Trump has spent very little19)around 2 million dollars, compare with the 9-figure expenditures of the Jeb PACs, and will likely have sufficient funds available to get the vote out on Super Tuesday.

But if you think Mr. Trump will just allow Mr. Cruz to take away his nomination, think again. By early February, expect all the country to know that Mr. Cruz was born in Canada20)stay tuned for a more in depth discussion on the qualifications for the office of the President. “Natural born citizen” confuses many. What isn’t clear is how well-organized21)in this context it just means, he employs plenty of staff, has lots of volunteers/veterans of the process Mr. Trump is. Look at these articles, for example:

http://www.politico.com/story/2016/01/trump-builds-data-juggernaut-217391

 vs.

Both of these pieces can’t be accurate. Did The Times just find dull Trump supporter in Ottuma to make him look bad? Is The Politico just trying to get back in Mr. Trump’s good graces? We will find out in three weeks. As much as the press loves the “yeah well it’s neat that all them folks came out for the rally, but are they really going to vote” angle22)example , given how well Mr. Obama did in 2008, might be time to give the candidate the benefit of the doubt that if you can get that many folks to attended a political rally in freezing weather, a good number of these folks are likely to caucus.23)Unfortunately for Mr. Obama, he was never able to muster the same enthusiasm for the rest of his party

The future of the Party of Lincoln rests in Iowa. Will they go the way of the Whigs/No-nothings? Will the populist-right break off and form their own party if the nomination is taken away from Mr. Trump? Stay tuned!

If you have a little extra time, I suggest this Guardian piece written by Ms. Abdul pictured below (right), on why she brought her extra-large Koran to a Trump event in Reno. I am happy to report the Reno folks kept their disrespect to micro-aggressions. Yay Nevada.

 

http://www.theguardian.com/commentisfree/2016/jan/13/i-went-to-donald-trump-rally-in-my-hijab-supporters-arent-just-racist-caricatures

Footnotes   [ + ]

1. Even Jeb!
2. Could someone not from Texas pull this off even??
3. Yes, some New Hampshire too
4. haha, yeah only
5. because of the horrendous odds
6. At the risk of being mercilessly mocked on the twitter, it is worth taking a moment and appreciating how lucky we are all to live here. You could have ended up in any of the nearly 200 countries in the world, and we are in the richest/most free. Yes, we have many an issue, but it is important not to lose perspective
7. Huntington wrote political theory about developing countries saying the the order in which institutions are established matters significantly to the outcome.
8. Shout-out to William Vollmann whose excessive use of exclamation points I am currently [poorly] emulating
9. not surprisingly advised by Bill Belichick
10. On a related note, Bernie’s hair is combed in nearly half his television appearances now, much marked improvement
11. I should disclose here that they offered my a job in 2008 but I declined
12. apparently all the politicians in Washington believe in war in perpetuity now that Mr. Obama has embraced the Bush doctrine
13. She was that much of a sure-thing then, promise
14. well, along with his coalition of the willing
15. trademark pending
16. This is correct term for a caucus, not “vote,” talk like you’ve done this before
17. Come back Lindsey!
18. can’t believe I’m typing this
19. around 2 million dollars, compare with the 9-figure expenditures of the Jeb PACs
20. stay tuned for a more in depth discussion on the qualifications for the office of the President. “Natural born citizen” confuses many
21. in this context it just means, he employs plenty of staff, has lots of volunteers/veterans of the process
22. example 
23. Unfortunately for Mr. Obama, he was never able to muster the same enthusiasm for the rest of his party

Can You be Held Liable for a Car Accident if You were not Issued a Ticket?

 

 

No Traffic Ticket Does Not Mean that You are not Liable for a Car Accident

Transcript:

Hi, My name is Jared Richards, and I am one of the partners here at Clear Counsel Law Group.

One of our readers has asked if he can be held liable if he has a passenger that was injured in an accident, but he didn’t receive a citation. He didn’t get a traffic ticket.

The answer is yes. Traffic tickets don’t determine liability. You can technically be following the law and still get somebody hurt. Even so, the courts do not rely exclusively on the cops to determine who’s more at fault. The real question is … It’s not a question of traffic tickets, because cops sometimes don’t give them. Sometimes, quite frankly, cops get them all wrong.

 

traffic ticket, Las Vegas, car accident, Nevada

 

The real question is; did the driver do something that was negligent? Did the driver breach his duty of care to drive carefully? If he did, then he’s going to be responsible for any injuries that he causes. Since the passengers in his car generally are fault free, unless they’re being stupid and grabbing the steering wheel, I suppose. Mostly, 99.99% of the time, the passenger is absolutely fault free. So, yes. Even without a traffic ticket, you can be responsible for your passenger’s injuries.

Thanks. If you have any questions, give us a call.

What You Need to Know about an LLC Operating Agreement

 

 

What to Know about an LLC Operating Agreement

Transcript:

Jonathan: Hello, my name is Jonathan Barlow. I’m a partner attorney at Clear Counsel Law Group. A question that I’m often asked by my business clients is, “What is an operating agreement and why is it important?” In short an operating agreement is the document in an LLC that regulates how the business is operated. It tells us how profits are distributed. It tells us the respective responsibilities of the owners of the business. It tells us who the managers are, it tells us what authorities the managers have in regard to the business. Do they have authorities to make major decisions? Does that require a higher level of decision making? It tells us what percentage the votes are taken at. Does it require a 75% vote to take the action? In other words, it regulates the internal affairs of the LLC.

Now, why is the operating agreement important? That’s a really good question and that goes to one of the main benefits of an LLC. Typically you want to set up an LLC to give yourself asset protection and that means that if the LLC incurs a debt or a liability and somebody sues the LLC they would not be able to come at you individually as an owner to get to your assets in order to pay that debt. It works the other way also. If you individually have a debt, say you hit somebody in the street, you owe somebody a whole bunch of money on a personal injury claim, and they come after you on payment on that. They cannot get to the assets that are held in the LLC in order to pay that debt. It creates a wall of separation or liability protection between those two.

 

LLC operating agreement, Nevada, Las Vegas

 

Why is an operating agreement important in that light? The operating agreement shows, or is one of the ways to show that we treat the LLC as if it is separate from us. We respect it as a business entity, we’re not treating it as just a natural extension of ourselves. By showing the operating agreement, we show, “Hey, we have legal documents that say we are a separate entity. We operate the business according to the operating agreement. We should be treated as a separate entity and therefore, we should have that benefit of the asset protection between the LLC and the individual owner’s.” Brian has a good question here.

 

Brian: Hypothetically, if I was operating, let’s call it Drum Circle LLC, and me and my hippie partners just want to have an oral operating agreement because we trust each other would that have any legal value?

 

Jonathan:  Okay. An oral operating agreement, I’ve never heard of that, but the concept makes sense. You can have an oral contract, just like any other contract. You can orally state this is how we’re going to operate the business. Yes, you can do that and you can have agreements amongst yourselves of what you’re going to do in certain circumstances with the business. Of course, that has dangers and risks, which are disputes about what the agreement was. If a dispute ever arose one person may say one thing and the other may say a different thing. It also becomes difficult as I was talking about when you need to prove that the LLC is separate from yourself. I would be difficult to prove the oral operating agreement. It’s much easier if you have a written paper copy of the operating agreement to show them and say, “Hey, here it is. Here’s our agreement, this is why we treat it as a separate entity.” Never the less, I suppose you could make arguments that no we did treat it as a separate entity and here’s evidence of our oral agreement about how we did that, but in any event I always advise clients to be as formal as possible in creating their LLC and operating the LLC.

If you want help to create your operating agreement or to review your operating agreement to make sure that it complies with good requirements and will give you that asset protection. I encourage to give me a call or any of our other attorney’s here at Clear Counsel Law Group and we’ll do the best we can to help you with that.

puppy mill, Las Vegas, pet stores

Is the Las Vegas Puppy Mill Ordinance Constitutional?

The greatness of a nation and its moral progress can be judged by the way its animals are treated.

Mahatma Gandhi

 

On 30 November, the City of Las Vegas held a meeting to get public comment regarding the proposed city ordinance that would ban pet stores from selling dogs that were purchased from a so-called “puppy mill.”

Elizabeth Gadley of KTNV was nice enough to post a few photos from the public meeting. Folks look as cheerful about the subject as you would expect1)Hard for me to think of a public meeting topic that would have most of the attendees smiling; these are our times, unfortunately.:

 

 

You can read a media account of the meeting here.

The city only took public comment at the meeting and did not pass any regulations, making this the best time to evaluate the law (as in, before it will go into effect). Before we can discuss the constitutionality of the proposed ordinance, however, it is best to take a step back and look at what a puppy mill is.

 

What is a Puppy Mill?

 

In short, very distasteful. In essence, they are factory farms for producing puppies at the best profit margins. Imagine you were going to attempt to breed dogs for the most amount of money possible, how would you do it?

  1. Keep the female dogs in a constant state of pregnancy to produce the maximum number of puppies during the mother’s lifetime.
  2. Store the dogs in the smallest confines possible in an effort to keep costs as low as possible.
  3. Leave the dogs in the cages in order to keep labor costs minimal.

Distasteful indeed.

This is not the correct forum to be anymore graphic than my description above, but the pictures of a puppy mill are the most persuasive. Take a little time if you are unfamiliar to check out these links before continuing:

 

http://www.humanesociety.org/news/publications/whitepapers/puppy-mill-research.html?referrer=https://www.google.com/

http://www.vice.com/read/i-worked-for-a-puppy-mill-915

http://www.newsweek.com/investigating-puppy-mills-94245

http://usatoday30.usatoday.com/news/nation/2007-10-31-puppy-mills-main_N.htm

 

https://www.aspca.org/animal-cruelty/puppy-mills

 

That should be sufficient. The City of Las Vegas is righteous and moral in its attempt to cease the sale of puppy mill dogs by area pet shops, and this piece will continue under that assumption. Yet, an inquiry into the constitutionality of the proposed ordinance is a different matter.

 

What Does the Las Vegas Puppy Mill Ordinance Say?

 

First, I would like to thank the folks managing the City of Las Vegas twitter account for providing me the text of the ordinance2)Unfortunately, the link provided no longer functions. I printed off of the ordinance while I had the chance and will quote from my hard copy..

The ordinance is only a page and half long, the most important part being Section 1(A):

No pet shop shall display, sell, deliver, offer for sale, barter, auction, give away, broker or otherwise transfer or dispose3)??? of a dog or cat except for a dog or cat obtained from an animal shelter, nonprofit humane society, or nonprofit animal rescue organization

The ordinance goes on in Section 1(B) to require pet stores to keep certification that their animals are not from puppy mills for one year. Section 2 declares if one section of the ordinance is unconstitional, than the rest of the ordinance remains good law. Section 3 repeals any part of the city code in conflict with the new ordinance, and Section 4 defines the punishment for violation of the ordinance4)a fine of no more than $1,000 or a jail term of not more than 6 months.

Seems simple enough, right? Think again; this is constitutional law we are talking about after all.

 

Applying the Phoenix Puppy Mill Law for Comparison of Constitutionality

 

Multiple media accounts have stated, erroneously5)I’m sure it was an accident, that the Las Vegas ordinance is similar to the one passed by Phoenix. They are correct in stating that each concerns the subject of pet stores selling puppy mill dogs, but there is a very important distinction between the laws, which we will get to in a moment.

The Phoenix law is important because its constitutionality was challenged in federal court by the disaffected area pet store. As much of an6)self-proclaimed expert as I am of constitutional law, it seems reasonable to rely on the analysis of the Arizona judge regarding the constitutional questions at hand7)His 36 page opinion also happens to be well-reasoned and thoughtful

First, let’s take a look at the Phoenix law:

8-3.06 Prohibition on sale of dogs or cats:

A.    No pet shop or pet dealer shall display, sell, deliver, offer for sale, barter, auction, give away, broker or otherwise transfer or dispose of a dog or cat except for a dog or cat obtained from:

1.    An animal shelter;

2.    A private, nonprofit humane society or nonprofit animal rescue organization; or

3.    An animal shelter, nonprofit humane society or nonprofit animal rescue organization that operates out of or in connection with a pet shop.

B.    All pet shops and pet dealers shall maintain records, for a period of one year from the date of acquisition, listing the source of all dogs or cats under their ownership, custody or control. Records shall be immediately available, upon request, to law enforcement, code compliance officials, and any other City employees charged with enforcing the provisions of this section.

C.    This section does not apply to:

1.    A person or establishment, other than a pet shop or pet dealer, which displays, sells, delivers, offers for sale, barters, auctions, gives away, brokers or otherwise transfers or disposes of only dogs and cats that were bred and reared on the premises of the person or establishment;

2.    An animal shelter;

3.    A private, nonprofit humane society or nonprofit animal rescue organization; or

4.    An animal shelter, nonprofit humane society or nonprofit animal rescue organization that operates out of or in connection with a pet shop.

D.    Nothing in this section shall prevent a pet shop or pet dealer from providing space and appropriate care for animals owned by an animal shelter, nonprofit humane society or nonprofit animal rescue agency and maintained at a pet shop for the purpose of adopting those animals to the public.

Date of Addition/Revision/Deletion – Section 8-3.06

+1    Addition on 12-18-2013 by Ordinance No. G-5873, eff. 1-17-2014

 

Section A and B are very similar to the Las Vegas ordinance, which we will deal with first (Section C will come soon, not to worry).

That’s right, now it is time to get out our pocket constitutions!8)Get out from under the desk, it’s going to be ok.

Article I, Section 8 Clause 3 of the U.S. Constitution states that the Congress shall have the power:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Much of our discussion going forward will concern just those first three words.

 

Puppy Mill and the Dormant Commerce Clause

 

Is the ordinance constitutional? You are going to be sorry you asked..Kidding, please don’t go! I promise we will get through this without too much pain9)I will skip the really trying parts.

Before we move on to the Commerce Clause analysis, I can hear our loyal readers shouting at their ithings10)trademark pending “I remember that GMO discussion regarding the Supremacy Clause. How can these municipalities regulate interstate commerce in this instance?” Great question! The difference here is that the federal law regulating the treatment of animals, the Animal Welfare Act, states that it “shall not prohibit any State (or a political subdivision of such State) from promulgating standards in addition to those standards promulgated11)Subsection 2143(a)[1]. Thus, the answer to your question is that the states are permitted to regulate in this arena, so long as the rest of the constitution is abided by.

..Like the Commerce Clause above.

Now we need to define to the so-called Dormant Commerce Clause. Judge Campbell, the author of the Phoenix decision, explains it better than I can:

The Clause also contains a “‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.”…This negative aspect has come to be known as the “dormant Commerce Clause.”… Courts “analyze dormant Commerce Clause claims using the Supreme Court’s two-tiered approach.”…“The first tier asks whether the Ordinance ‘either discriminates against or directly regulates interstate commerce.’” …If so, the Ordinance is subject to strict scrutiny – a “virtually per se rule of invalidity[.]”…The second tier has come to be known as the Pike balancing test. Under Pike, the Court asks whether the burden the Ordinance imposes on interstate commerce is “clearly excessive in relation to the putative local benefits.” (citations omitted, emphasis added)12)Puppies ‘N Love et al v. Phoenix, City of, F.Supp.3d . 2015 WL 4532586 (D. Ariz., 2015), p. 8 link

I will spare you anymore Commerce Clause discussion13)we could go deep into this rabbit hole; there is a reason the Phoenix opinion is 36 pages long, it is the bold part above that really is pertinent to our discussion. The Las Vegas law, like the Phoenix law, will not be subject to strict scrutiny14)because it does not directly regulate interstate commerce, but instead will be evaluated by the Pike balancing test.

We will assume, for sake of brevity, that the ordinances being discussed only incidentally affect interstate commerce. With that being so, the ordinance will be upheld “unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefit.”15)Id. at 28.16)This is where my more conservative friends get upset about judicial activism, and they have a point here. The judge will now evaluate the the effectiveness/value/purpose of the law, and if it is to her liking, then the law will obviously pass the balancing test. If the law seems frivolous in effectiveness/purpose/value then she will say that it does not pass the balancing test. One could argue these are evaluations that should be made by the legislature. If anyone dares to tell you that constitutional law is not political, that judges are just “referees,” for example, stop taking that person seriously at once.

Judge Campbell weighs the factors of the Pike test in favor of Phoenix. He concludes:

“The modern law of what has come to be called the dormant Commerce Clause is driven by concern about ‘economic protectionism, that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.’” The Ordinance is not an act of economic protectionism. It is a legitimate attempt to curb the problems associated with the inhumane treatment of animals and local dog homelessness and euthanasia. (citation omitted) 17)Id. at 30.

There is no reason to think the the proposed Las Vegas ordinance would not pass a similar evaluation, given that the need to curtail the inhumane treatment of animals and help find homes for homeless animals is no less serious here. A similar law in Chicago was also recently upheld.

 

Where the Las Vegas Puppy Mill Ordinance May Have Some Constitutional Trouble..

 

So everything’s dandy right? The Phoenix law got the sign-off from a federal judge, so there is no reason to to think the Las Vegas ordinance will have any legal trouble…or is there?

Recall earlier that I claimed the Phoenix law differs from the Las Vegas ordinance in one major regard. Allow me to reproduce Section C of the Phoenix Ordinance:

C.    This section does not apply to:

1.    A person or establishment, other than a pet shop or pet dealer, which displays, sells, delivers, offers for sale, barters, auctions, gives away, brokers or otherwise transfers or disposes of only dogs and cats that were bred and reared on the premises of the person or establishment;

2.    An animal shelter;

3.    A private, nonprofit humane society or nonprofit animal rescue organization; or

4.    An animal shelter, nonprofit humane society or nonprofit animal rescue organization that operates out of or in connection with a pet shop.

D.    Nothing in this section shall prevent a pet shop or pet dealer from providing space and appropriate care for animals owned by an animal shelter, nonprofit humane society or nonprofit animal rescue agency and maintained at a pet shop for the purpose of adopting those animals to the public.

The proposed Las Vegas ordinance copied Sections A and B from Phoenix, but left out the above text. Why? Well, I am happy to speculate. Of the 36-page opinion quoted above in our Dormant Commerce Clause discussion, more than 2/3rds of it addresses the constitutionality of Part C. Any serious constitutional challenge to the ordinance would concern the municipalities creating an economic climate that favors local sellers to the detriment of out-of-state sellers.18)Judge Campbell upheld Section C above as constitutional, by the way.

Perhaps the City of Las Vegas thought the best way to avoid a constitutional challenge would be to delete the most controversial language of the Phoenix ordinance19)Or maybe their copy/paste functions as well as mine. Politically, this seems like the best course of actions and the city attorney should be commended on his cleverness.

But this may have unintended consequences.

Chew on this question: Based on the quoted language of the Las Vegas ordinance above20)No pet shop shall display, sell, deliver, offer for sale, barter, auction, give away, broker or otherwise transfer or dispose of a dog or cat except for a dog or cat obtained from an animal shelter, nonprofit humane society, or nonprofit animal rescue organization, what is the definition of “pet shop”?

The purpose of Section C of the Phoenix ordinance is to clarify what businesses the new ordinance would apply to. There is no language in the Las Vegas ordinance addressing this issue.

This is a big deal, honest. If you breed your own dog and sell a puppy to a neighbor, are you a pet shop? If not, how many dogs would you have to sell before you would be classified as a pet shop? Are only shops with business licenses considered pet shops?21)And so on, and so on.

There’s a constitutional law theory called the Vagueness Doctrine that may come into play here. The Legal Information Institute will assist us with a definition:

1) A constitutional rule that requires criminal laws to state explicitly and definitely what conduct is punishable.  Criminal laws that violate this requirement are said to be void for vagueness.  Vagueness doctrine rests on the due process clauses of the Fifth and Fourteenth Amendments of the U.S. Constitution.  By requiring fair notice of what is punishable and what is not, vagueness doctrine also helps prevent arbitrary enforcement of the laws.

2) Under vagueness doctrine, a statute is also void for vagueness if a legislature’s delegation of authority to judges and/or administrators is so extensive that it would lead to arbitrary prosecutions.22)Source

A word on the practicalities of constitutional law before we continue. A law or ordinance is never unconstitutional on its face; meaning, the legislature/city council cannot pass a law that is unconstitutional upon ratification. A court must declare a law unconstitutional for it to be so. My point being that all laws are constitutional until a court says otherwise.

So, for the sake of this conversation, neither of these ordinances, as passed, are unconstitutional. I am only saying that there may be a risk that a court might declare the ordinances unconstitutional.

The City of Las Vegas, while cleverly23)I mean that in the true connotation of the word omitting the disputed language from the Phoenix case, may have opened the door to a different constitutional issue. One might say that it makes more sense24)in terms of risk, not to mention good law/clarity to just include language similar to Section C of the Phoenix ordinance as a federal judge has already declared it constitutional. Why open a fresh can of worms with little legal precedent?

 

That was fun, right? I appreciate you sticking around and spending a little time with us on the Clear Counsel blog. If you are thinking of adopting, I highly recommend the Nevada SPCA25)That little dog in my avatar came from there. They even post photos online of the dogs (and other animals) available for adoption. Look at those cute faces and tell me your home would not be improved with a little fury friend!

http://www.nevadaspca.org/adoptable-animals/adoptable-dogs

 

A couple more links for further reading:

 

http://lasvegas.suntimes.com/las-news/7/104/18721/puppy-mill-regulations-map

 

http://www.abajournal.com/magazine/article/anti_puppy_mill_legislation_across_the_country_is_dogging_pet_stores/

 

Footnotes   [ + ]

1. Hard for me to think of a public meeting topic that would have most of the attendees smiling; these are our times, unfortunately.
2. Unfortunately, the link provided no longer functions. I printed off of the ordinance while I had the chance and will quote from my hard copy.
3. ???
4. a fine of no more than $1,000 or a jail term of not more than 6 months
5. I’m sure it was an accident
6. self-proclaimed
7. His 36 page opinion also happens to be well-reasoned and thoughtful
8. Get out from under the desk, it’s going to be ok
9. I will skip the really trying parts
10. trademark pending
11. Subsection 2143(a)[1]
12. Puppies ‘N Love et al v. Phoenix, City of, F.Supp.3d . 2015 WL 4532586 (D. Ariz., 2015), p. 8 link
13. we could go deep into this rabbit hole; there is a reason the Phoenix opinion is 36 pages long
14. because it does not directly regulate interstate commerce
15. Id. at 28
16. This is where my more conservative friends get upset about judicial activism, and they have a point here. The judge will now evaluate the the effectiveness/value/purpose of the law, and if it is to her liking, then the law will obviously pass the balancing test. If the law seems frivolous in effectiveness/purpose/value then she will say that it does not pass the balancing test. One could argue these are evaluations that should be made by the legislature. If anyone dares to tell you that constitutional law is not political, that judges are just “referees,” for example, stop taking that person seriously at once.
17. Id. at 30
18. Judge Campbell upheld Section C above as constitutional, by the way.
19. Or maybe their copy/paste functions as well as mine
20. No pet shop shall display, sell, deliver, offer for sale, barter, auction, give away, broker or otherwise transfer or dispose of a dog or cat except for a dog or cat obtained from an animal shelter, nonprofit humane society, or nonprofit animal rescue organization
21. And so on, and so on.
22. Source
23. I mean that in the true connotation of the word
24. in terms of risk, not to mention good law/clarity
25. That little dog in my avatar came from there.
Accident, car accident, Las Vegas, Metro, non-injury, investigation

Las Vegas Metro to Resume Investigating Non-Injury Accidents in January

In March of 2015, the Las Vegas Metropolitan Police Department announced it would stop responding to car accidents where neither party was injured. This was quite an interesting change since Metro had been reporting to all car accidents for nearly forty years. Budget and staffing concerns were cited as the reason for the cut back, and citizens were left puzzled. Many clients raised concerns to our office: What happens if I don’t feel injured right away but later realize I am? What if the person deserves a ticket? What if someone who hits me denies s/he were at fault and my insurance will not cover me?

These are just a small sample of the dozens of concerns that were raised. Personally, the concern that stuck me the most was a question of safety. A female client expressed concern to me that if she got in an accident after dark, she would not feel comfortable exchanging insurance with a complete stranger, leaving her vulnerable on the side of the road. This resonated with me. Particularly of concern was when a person who causes an accident and might face someone with “road rage,” which is quite rampant in Nevada. All of these concerns appeared likely to cause other problems for the citizens that the police may not have anticipated.

 

Accidents, car accident, las vegas, metro, investigation

 

I certainly can understand this non-response policy working well in smaller, slower paced cities but not in the Las Vegas Valley. Our city continually ranks high in the number of accidents, making a decreased police presence on the streets all the more concerning. If the thought of getting a ticket for causing a minor accident is not looming over people’s heads, drivers will probably take more risks and end up causing more accidents in the long run.

On the other hand, of course, we all want the police to be protecting the streets from murders, robbers, and kidnappers and not spending hours taking statements from victims of a paint-smudging minor collisions. I am sympathetic the the resource concerns of Metro.

 

Metro changes course with non-injury car accidents

As it turns out, public safety concerns outweighed this ill-fated policy. Starting January 2016, the policy will be officially reversed. Metro will again respond to any accident where they are called and prepare a report for the parties.

Clearly, there are other ways to save officers time in responding to accidents, specifically by reducing the number of accidents! It is clear that Las Vegas has too many, and the reasons are many and complicated. The roads need to be safer for our citizens, but getting there will not be easy. Perhaps if tickets were more expensive and more common, drivers would be more cautious and more motivated to be careful. There are many options for reducing the number of accidents on our roadways. Intersection cameras might be expensive at first, but are likely to pay off in the long run. Or perhaps, harsher penalties for those who drive under the influence. This, combined with the presence of ride shares like Uber and Lyft may help keep Las Vegas safer by making it easier for folks to get a ride home. Lowering speed limits, raising the age to start driving, adjusting the patterns at high-accident intersections, mandatory insurance increases with each accident, or even public ad campaigns reminding people how getting a little bit ahead on the roadway really does not save time in the long run.

These are just a few options for making our roads safer. However, all public safety measures come with a cost and it’s often hard to get the citizens on board for raising the funds needed, i.e. taxes…. But for now, it is a step in the right direction to put police back on the scene of even minor accidents, so these small inconveniences do not end up as big hassles later on.

Cryotherapy, nevada, product liability

Cryotherapy and Liabilty

There can be so many benefits to unconventional therapies and natural remedies. Many people like to dabble in essential oils, vitamins, and yoga. But some people like to go to the extreme. Case in point: Cryotherapy. This new and largely unknown procedure works by exposing people to extremely cold temperatures using liquid nitrogen for short periods of time. This exposure to various parts of the body is thought to act as an extreme “ice pack” of sorts by reducing inflammation, pain, and soreness in the body. Cryotherapy also claims to be able to heal tissues of the body, increase energy, reduce aging, and combat depression1)according to the company that sells it, anyway…. Certain athletes are rumored to use it to heal injuries instead of an ice bath. These cryotherapy “spas” have recently popped up in Las Vegas, and then quickly made the news when an off-duty manager froze to death in a cryotherapy chamber after hours. Sounds terrifying if you ask me, but apparently it is catching on.

At least it was.

A Fatal Cryotherapy Accident

On October 20th, the body of the 24 year old manager was found in the fetal position, frozen to death inside the chamber. According to various news sources, it appears that the worker attempted to use the cryotherapy chamber on herself while she was alone, against standard procedures. However, at this time of publication, it is unclear what really happened. The chambers are supposed to be properly adjusted for a person’s height so they always have access to oxygen above the level of the cryotherapy chamber. News reports speculate that the machine may have put out too much nitrogen, possibly locked her in, or otherwise malfunctioned. But a machine malfunction is nothing more than speculation at this point until further investigation can be done. News reports are also fairly consistent in noting that the cause of the death was most likely “operator error.”

 

Will There be a Lawsuit?

But what about compensation for the victim’s family? This is a tougher question. No regulatory agency appears to oversee the cryotherapy business. Not the cosmetology board, not the medical board, and certainly not the FDA. Users are invited to participate in cryotherapy at their own risk. This is the same as the disclaimer on a bottle of vitamin C, which notes that it is not a drug regulated by FDA; but clearly the risk is quite different. So, the only option at this point looks like civil litigation. Although it would initially appear to be an uphill battle because users participate in the therapy at their own risk, this might not really be the case. Depending on what actually went wrong, if the victim’s family can prove that the “operator error” was a reasonably foreseeable misuse, then they will have a fairly strong case against the company. Should it have been fairly obvious that a user of the machine might try to operate it alone? Maybe the machine should have had an automatic shut off or a finger print pad confirming that there were two operators overseeing the use…. On the other hand, the victim was clearly violating safety procedures by using the machine alone after hours. But again, maybe her employer should also be held liable for not having better security which could have prevented employees from entering the building after hours alone. These are all factors that will play out in what will most definitely be an interesting case.

Products liability is a somewhat unique area of law which puts a huge burden on the manufacture of a product to anticipate all “reasonably foreseeable” misuses. In this case, a cryotherapy chamber carries so much risk as a reasonably foreseeable misuse can (and maybe did) cause death. No amount of warnings and disclaimers can negate liability if an economically feasible safety feature could have been incorporated into the product. The examples above, like an automatic shut off or device to ensure two operates were present, certainly do not seem too complicated in light of the innate risk of the product being sold. If there is a company policy that a person should never use the machine alone, then this is clearly a foreseeable misuse. But, this is all just speculation at this point, as we do not know enough facts surrounding the incident to know anything for sure. We will continue to follow the matter closely as it plays out.

Footnotes   [ + ]

1. according to the company that sells it, anyway…

Child Negligence: When a Hug Can Go Terribly Wrong

In 2011, Jennifer Connell attended the birthday party of her eight-year-old nephew Sean Tarala.1)Read more about the facts here. Ms. Connell broke her wrist and sued, but she lost. The break of her wrist was the boy’s fault and not hers.

If a person unintentionally hurts another person, we usually expect the person who caused the harm to be responsible, even if the harm is the result of an enthusiastic hug.  But what if the person causing the harm in the process of giving a hug is just an excited eight-year-old child?  Should the child’s parent or guardian be required to pay?  And how does a person’s homeowners insurance play into the equation?

It may be helpful to discuss some scenarios that have some similarities with each other when analyzing these questions, the first of which is nearly identical to Ms. Connell’s case.  They are as follows:

 

3 Child Negligence Scenarios

Scenario one: 8 year-old Sean Imahugger, while playing in the street near his parents’ home where he lives, sees his aunt arrive.  He runs to greet her because she has come for his birthday party.  He then enthusiastically jumps into the air to hug her while shouting “Auntie I love you!” They both fall to the ground, but auntie breaks her wrist in the fall. Sean did not consider that they might fall prior to the hug. She incurs medical bills and, as a result of the incident, her wrist is forever weakened, and it is now less flexible, which makes her daily routine at work typing on her computer more difficult.

Scenario two: Four year little-league veteran Jeff ImaGoodAllAmericanKid, who is also 8 years old, was playing baseball in the narrow street near his parents’ home where he lives. While at bat, he sees neighbor 3 year-old Frankie IopenFrontDoors wandering on the sidewalk across the street.  Jeff thinks2)if he considers the possibility at all that it is very unlikely that his baseball would hit Frankie. Sadly, the probabilities are in neither boys’ favor on this day. Jeff makes contact with the ball with his bat and the ball hits Frankie in the head, which knocks him unconscious and causes him to fall and break his arm. He incurs medical bills, reverts to needing diapers again, suffers nightmares and has a daily fear that he will be hit by falling objects when he is outside.

Scenario three: Without his parents’ knowledge, 8 year-old adventurer Dennis ImaMenace comes home from school and takes the keys to his parents’ old car from the junk drawer and drives the car on a joy-ride down the street. He knows about driving because he drives ATVs on his grandpa’s farm, and his Dad lets him sit on Dad’s lap to help steer the old car while Dad drives on the dirt roads. Unfortunately, Dennis does not make the turn of the end of his street and crashes into a neighbor’s home. Sadly, the neighbor’s mixed-breed dog was killed in the incident. The property damage totaled $25,000, including the cost of a replacement dog with all shots from the local pound.

 

The Child’s Negligence Caused Harm in All Three Scenarios, Now What?

In all three scenarios, a child did something that resulted in unintended actions or consequences, which are commonly referred to as accidents3)Or a ‘tort’ in legalese.  In each, the results were costly to someone else.  Someone must pay the price because the child certainly cannot, at least not in full.  The persons who will most likely pay the cost of these damages will either be the persons hurt or the child’s parent or guardian (I am just going to say “parent” from here on), whether or not the parents have some form of insurance.

Negligent acts are unintentional4)Although this term is unnecessary, added for clarity accidents for which the law states that someone should be financially responsible. The above scenarios involve actions that would most likely be negligent acts on the part of the child; however, children cannot be sued directly and children do not usually have funds or insurance to pay claims or judgments.

In most states, there are laws that make a parent legally responsible for the negligent acts of their children.  However, the parent must have failed in their duties to supervise their children in the standard and customary manner for the area in order for the parent to be responsible for the negligent acts of the children.  This is called negligent supervision. Laws regarding negligent supervision by a parent is sometimes more specific when automobiles are involved.

An analysis of whether a parent should be liable for negligent supervision usually requires knowledge about the type of activity that the child in which the job was engaged, analysis of the parent prior knowledge of that child, including their abilities and personality, and knowledge about the parent such as where they were when the accident occurred versus where s/he should have been.

 

Now that We Understand Child Negligence, Let Us Look at Those Scenarios Once More

In scenario one, Sean Imahugger was probably negligent in his overenthusiastic hug, but should his parents be responsible for the injuries to Sean’s aunt? Sean’s parent was probably home because it was his birthday. Unless Sean had a history of being too physically aggressive, including with his affection, his parent likely had no prior notice that he would run up to and hug Sean’s aunt with such enthusiasm that they would both fall over.  Thus, it is not unreasonable that a jury found that Sean’s parents should not be responsible for the injuries to Sean’s aunt.

The result in scenario one is probably the least fair because Sean’s aunt certainly did not cause for own injuries, yet she is the person least likely among the persons harmed in these scenarios to be compensated for her damages. She is reasonable for wanting someone else to pay for her injuries5)If you disagree, put yourself in her shoes. It is a difficult situation.  Unfortunately, these are one of those accidents for which the law does not provide a remedy for the person who is harmed.

In scenario two, we know a little more about what Jeff ImaGoodAllAmericanKid’s parent likely knows about Jeff and the location of the incident.  His parent had to sign him up and take him to little league baseball for four years.  Thus, Jeff’s parents should know that Jeff has some abilities in hitting a baseball.  We also know that Jeff and his parents live on a narrow street and that baseballs are hard objects that can cause damage to other people and property.  This type of claim may be a toss-up in front of a jury, who may find that the parents should have ensured that Jeff played baseball on the nearby field instead of on his neighborhood street.

In scenario three, the parents likely knew that Dennis ImaMenace drove ATV’s on grandpa’s farm, and Dad was teaching Dennis to drive the old car.  The keys were apparently kept in a location were Dennis could find and get them.  Did his parents know he was adventurous on other occasions that would suggest that he would do something like this? The results of this type of a claim would be less likely in favor of the parents of Dennis; however, a jury may still find that these facts are not sufficient to show that one of his parents should have known that he would drive the car on his own.

 

Homeowner’s Insurance and Child Negligence

If one of the harmed persons in the above scenarios expected payment from the parent for their damages, and the parent purchased homeowner’s insurance, the next questions are whether the insurance would defend the claim and pay if the parent is found liable.

In most homeowner’s insurance policies, if a family member who is living at the home causes another person to be injured, the homeowners insurance will provide coverage and defend against such claims.  Insurance policies have many exclusions and fine print, including against car accidents and intentional acts that cause harm.  In all of the above three scenarios, a homeowner’s insurance would be expected to defend against claims made arising out of the scenarios.  The homeowner’s insurance would only be expected to pay the harmed parties if a jury or judge decides against the homeowner or the insurance chooses to settle to avoid going to trial.

It is important to note that every situation is unique as even small facts can turn a claim/case from bad to good or vice versa. The value of a good personal injury attorney is that s/he will be able to assess the facts of a specific scenario to determine the likelihood of recovery.

Footnotes   [ + ]

1. Read more about the facts here.
2. if he considers the possibility at all
3. Or a ‘tort’ in legalese
4. Although this term is unnecessary, added for clarity
5. If you disagree, put yourself in her shoes. It is a difficult situation
Clear Counsel Law group

Contact Info

1671 W Horizon Ridge Pkwy Suite 200,
Henderson, NV 89012

+1 702 522 0696
info@clearcounsel.com

Daily: 9:00 am - 5:00 pm
Saturday & Sunday: By Appointment Only

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Nothing on this site is legal advice.