The Law Blawg of Theresa Petrey, PLLC

Post Halloween Mortem

2009-11-05T08:26:00.000-08:00

It was a good halloween.

This year we had the most grotesque pumpkins in the neighborhood-seven of them. And, we had eight trick or treaters (including the parental units). This was double last year's numbers. Our house might be a little too scary and we are far, far away from other houses. Remember the economic theory that two hot dog stands on the beach do better next to each other than at the opposite ends of the beach?

This morning I gave up my Twitter account. I could never really get the hang of it. Sorry to those of you who actually tried to follow. I really do like Facebook the best of all the social media outlets.

A surprise for me-I really enjoy drafting testamentary pet trusts and I've got the dog hairs all over my black pants to prove it too!

Saturday Potpourri

2009-07-25T19:25:00.000-07:00

Ok, I'm smitten by this wedding video.

What's not to love, especially the gerberas and sunglasses. I'm even now a Chris Brown fan, in spite of his domestic violence charge. Obviously and coincidentally, he posted a video apology on his website just after the couple posted their video. I'm hoping for a "remix" video with the JK wedding entrance dance and Chris Brown.

Next, my "little" brother-in-law became a financial pundit this week in the Petrey family ancestral burg's paper the Daily Midway Driller. Read his column here. Dan had previously been a broker with one of the big brokerages but broke off to start his own firm with a friend, Mestmaker and Petrey Wealth Advisors. Dan also got some nice press in Bakersfield with a business section article about their "leap of faith."

I was reflecting on last night's picnic and have concluded that in our media and entertainment age, the social grace of relaxing communally in the park with friends, neighbors and family is becoming a lost art. It is about just sitting in that folding chair, watching the kids play, talking to the old folks and meeting a good friend's second cousin twice removed. I resolve to picnic in the park more.

I've been reading the book The Four Hour Workweek, not because I want to work four hours a week (that's patently absurd for any solo attorney with overhead i.e office and staff), but because I want to have four more really effective hours a week. It has helped me to rethink a few things and to focus a little more. And, it's a fun book to read.

There's rarely a dull moment in a small town law practice and my current "diversion of the waters" case is beginning to heat up. I'm learning everything I always wanted to know about hydrology and then some.

Can a law office be a place of healing?

2009-07-12T22:51:00.001-07:00

Today in church Cathy Gibb talked about her experience this year in running the costuming department for Valley Musical Theater's production of The King and I, and that she had discovered that it was a place of refuge for cast and crew. She related how she grew and came to know that it was important for her to respond to others in such a way that the costume room became a place of healing. I found myself wondering whether a law office could be a place of healing?

Certainly, there are times when I know that people have left the office feeling more whole than when they came in. Knowledge is power and even when it's not, just having answers can be very calming. But there are other times when it's clear that the unique style of verbal violence that lawyers wreak on the world is just that, violence. And, there is nothing healing about that to our clients. One of our local judges, Judge Sparks, has often spoke of the primary role of lawyers as conflict managers.

Some of my fellow lawyers would argue that there is no role for "healing" in law, and that even if a law office could be a place of healing it shouldn't. What do you think?

Fried squirrel and other pastoral treats of the past

2009-04-17T08:54:00.000-07:00

I'm not exactly what this says about me, but I have eaten fried squirrel. In fact, watching my uncles skin the squirrels on the kitchen floor and my grandmother getting the hot fat ready to fry them is one of my earliest memories. Pickled pigs feet were also known to be consumed as a special treat. Later, I also had authentic chiltlins, tongue and other unmentionables at the homes of others.

I still love Grandma's oyster giblet recipe for holiday turkey stuffing. Here is a link to the squirrel eating Hank Shaw's blog of Orangevale, California. www.honest-food.net
I, too, briefly resided in Orangevale and so did Grandma. Oh, those were the days.

Hank is the new darling of the foodie media.

Now back to honest law.

Shared Well Agreements

2009-02-26T12:33:00.000-08:00

In general, the following will apply to determining what rules apply to shared wells in Washington State:

The Department of Ecology is involved in this process at a State level but counties and municipalities carry out the bulk of the work and the reporting. County and City rules on shared wells are not uniform throughout the State of Washington. No prohibiition exists in Washington State against selling a property without adequate water access or rights, but building permits generally are not issued without the water availability being resolved.

Even if a particular jurisdiction does not require a shared well agreement, often lenders require it. Similarly, deeds should reflect any easements created by the 100 foot radius requirement. So, some cities or counties have required both a declaration covenant and a restrictive covenant in addition to the shared well agreement. These legal documents, if required, would be in addition to any testing, forms and diagrams required by the jurisdiction. There would also be recording fees as well as possible implications for the entanglement with other land use regulations.

Good shared well agreements, like good fences, make for good neighbors. Important safeguards include provisions for apportioning the liability for vandalism, damage by guests or tenants, limitations or provisions for consent by all parties to accessory or additional dwelling units, emergency repairs and or shut off, and provisions for abandonment, termination and dispute resolution.

It's a Mad, Mad World

2009-02-06T15:48:00.000-08:00

Lately, I've grown to love a couple of sixties road comedies. Ray and Irwin rock. Sylvester where are you? It's probably impossible to ever assemble the type of ensemble cast that appeared in It's a Mad, Mad World ever again. See also The Russians are Coming, The Russians are Coming.

Sure You Can, But It's Gonna' Hurt

2009-01-22T21:43:00.000-08:00

Here's a pearl from one of our family's esteemed medical providers: "He can rub the spot where he had surgery, but it will hurt and become self limiting." In other words, you can tell someone not to do something that has painful consequences, but if they are not willing to listen to you and insist on doing it anyway, they will eventually get the message through physical, mental, emotional, financial or spiritual pain.

A little less in 2009 is a good thing . . .

2009-01-16T21:31:00.000-08:00

Can you have too much water in a place like Ellensburg? Yes, if it is in the wrong place at the wrong time. My office survived a near flood experience in West Ellensburg last week. Today, I had my first flood related call from a potential client.

Looking for new and creative ways to save money? My landlord has decided to cut costs at the office by only cleaning the bathroom every two weeks. I think that's an interesting response to tough economic times. Of course, I ultimately pay for the bathroom cleaning anyway, or do I?

Can you have too much candor towards the tribunal and opposing counsel? Interesting question isn't it? Or is the truth simply more painful or more difficult or weirder than you care to to experience as a lawyer?

Can your family members play around too much with the remote and the special features on DVD's? It would appear entirely possible to watch the film the "The Russians are Coming, the Russians are Coming" in French with Spanish subtitles. I rather prefer the American English with the contrived Russian accents.

Defective Auto Lemon Laws: A Comparison

2008-10-21T15:53:00.000-07:00

Today, we have a guest blogger. Sergei Lemberg is an attorney who specializes in lemon law. He is not licensed to practice in Washington, but his site, Lemon Justice, offers detailed information about lemon laws, as well as an interactive Lemon Meter for consumers who want to see if their vehicle qualifies as a lemon. The Washington State Attorney General's office also has an online lemon law webpage.

Now for Sergei's comments:

With all of the cars, SUVs, trucks, motorcycles, and RVs being manufactured in the U.S. and abroad, it’s reasonable to expect that some will have defects. After all, vehicles are incredibly complex pieces of machinery and a lot of things can go wrong. In the best-case scenario, any defects that weren’t caught by quality assurance are quickly repaired by the dealer. In the worst-case scenario, you have a vehicle with pronounced defects that make it run poorly, that constitute a safety hazard, or that reduce its value – and the dealer or manufacturer refuses to buy back or replace it.

That’s why every state has consumer protections for defective vehicles. However, lemon laws vary greatly from state to state. Here’s a synopsis of which vehicles are covered in Washington, Oregon, Idaho, Montana, Alaska, and California.

Washington: Washington Lemon Law covers new passenger vehicles, SUVs, vans, and trucks under 19,000 pounds that are purchased in Washington. It also covers motorcycles with engine displacements over 750 cc and the motorized portions of RVs, as well as business vehicles under 19,000 pounds – as long as the business registers fewer than ten vehicles in the state.

Oregon: Oregon Lemon Law covers new passenger vehicles, SUVs, vans, trucks, and motorcycles that are owned or leased by Oregon residents. It doesn’t cover RVs or business vehicles (although other state and federal laws offer some protections).

Idaho: Idaho Lemon Law covers new passenger vehicles, SUVs, vans, and trucks under 12,000 pounds, as well as used vehicles that are sold during the new car warranty period with manufacturer’s warranties. Vehicles must be purchased, leased, or licensed in Idaho. It doesn’t cover RVs or motorcycles, but does cover business vehicles.

Montana: Montana Lemon Law covers new passenger vehicles, SUVs, vans, and trucks under 10,000 pounds that are purchased or registered in Montana. It also covers the non-residential portions of RVs. It doesn’t cover motorcycles or leased vehicles, but it does cover vehicles owned by a business.

Alaska: Alaska Lemon Law covers new passenger vehicles, SUVs, vans, trucks, motorcycles and RVs that are purchased in Alaska. It doesn’t cover business vehicles or leased vehicles.

California: California Lemon Law covers new or leased vehicles under 10,000 pounds, including motorcycles, demonstrators, and the motorized portions of RVs. It also covers business vehicles, providing the business has no more than five vehicles registered in the state. The law also provides for used cars that are sold with a new car warranty.

Patience or Why Does Everything Take So Long?

2008-09-13T18:09:00.000-07:00

One of the things I always try to remember as a practicing lawyer from all of my experiences sitting on the other side of the desk, is that a legal matter always seems to take in an inordinate length of time. At a bar association get together last week, one of the senior attorneys here in my little town explained why he only takes criminal law cases. They can be finished in 120 days or less. Sitting to my left was a lawyer who had been on a probate litigation case for over 14 years. In criminal law there is a constitutionally based "Speedy Trial Rule" that helps to keep things moving along.

Even in the best of scenarios when nothing else can go wrong, there is the matter of coordinating schedules. Add in a little miscommunication or unprofessional behavior between counsel and problems tend to unnecessarily multiply. Unfortunately, the nature of the beast is paperwork and process intensive. There really are not that many simple matters in the practice of law. The simple matters are largely being attempted by the public. The only problem is that the public really has a hard time truly distinguishing between a simple matter and a complex matter.

Consequently, that in turn often results in the need for a lawyer at a later date. Twenty years of delay and a couple of thousand dollars of legal fees might have been avoided by a $200 legal consult and drafting project. There is no substitute for the trained legal eye. Of course, seeing a lawyer does add an extra layer of cost and time into any project and it's not a foolproof measure because lawyers also make mistakes.

Any kind of civil litigation by its nature is going to likely involve more time than other methods of settling a dispute. Civil litigation is a paperwork and personnel intensive process that takes time. My advice is to psychologically prepare for the long haul when a party to a lawsuit and previous efforts for non-judicial settlement have failed. Patience is a virtue in life and a necessary characteristic for all parties in a lawsuit. Fortunately, although more lawsuits may be filed, fewer and fewer matters are actually going to trial.

Found in the Daily Record Obituaries

2008-09-06T07:05:00.000-07:00

Here's a great poem by Billy Fulleton who recently passed. I did not know Mr. Fulleton but I truly appreciate his sentiments and they are so true here in Ellensburg and elsewhere as well.

A Rule For Life

The trust of a man is a sacred thing
Only heart aches and misfortune without it can bring
To flirt with it or abuse it is the part of a fool
For a man when a man is not soft hearted or cruel
No treasure is greater than the trust of a friend
To flaunt it or mis-use it brings sorrow in the end
An end to accomplish is normal and sane
So do it with honor, roads may meet again

Billy L. Fulleton

Sexual Assault, Harrassment, Discrimination and Finding your Voice-2008 style

2008-06-29T19:54:00.000-07:00

Despite decades of Women's activism, sexual assault and harrassment and other workplace or educational disorders directed toward women still exist. In fact, in many ways they seem to have increased in acceptance and frequency. And, despite what amounts to monumental efforts to prevent rape and increase awareness, sexual assault continues to be a part of women's lives.

One disturbing indicator of this trend is the report that 25% percent of all recent female college graduates were sexually assaulted during their college years. While date rape and stranger sexual assault are included in these numbers, this been associated in the studies to a fairly large extent with binge and party drinking and all the risk taking behaviors associated with that activity. When you add up the facts which clearly indicate that women simply cannot consume alcohol in the same way as men with the same physiological consequences and the ongoing (increasing ?) willingness of some men on the party scene to exploit women, the statistics need little explanation.

Curiously, there seems to be a tendency to simply accept this as a part of the college experience by some adults and the young women themselves. Being the wasted girl on the couch having sex in a minimally aware state of mind with one or more guys is really not something most young women really feel good about a day, a week, or years after the party . . . and it in no way amounts to sexual liberation. When I hear the older adults make comments such as, " she didn't get pregnant, nobody got hurt and this is just what kids do today, " I don't wonder why I get some of the types of calls I get from young women.

I DO wonder what the cumulative societal effects of sending a whole generation of women (teachers, lawyers, doctors, scientists, etc.) out into the workplace with emotional baggage of sexual assault will be in ten to twenty years, who, as a group will presumably have the highest percentage of survivors of sexual assault in history given the already significant probability that a large percentage of women entering college have already experienced sexual assault before the college years. Add in the extremely high numbers of military women experiencing sexual assault and the numbers AND scope of the institutionalized prevalence of sexual assault in places it shouldn't exist is shocking.

The college sexual assault statistics highlight the fact that young women are more vulnerable than they've ever been due to the acceptance of otherwise intolerable sexual explotiation under the guise of a good time and some of this carries over to the workplace. Because of the unique problems faced by teen and young adult workers, the Equal Employment Opportunity Commission has recently launched a website geared towards teen workers. Teens and young adults are among the most vulnerable workers when it comes to discrimination, sexual harassment and retaliation. While young men have been harassed, it is still a greater problem for young women. As young women become more accepting of the notion that being "objectified" or "harrassed" is actually acceptable and even beneficial in some circumstances, it makes the line for personal space and respect harder to define.

When the incursions into women's personal space reach the realm of critical mass of serious consequences, that's when I receive the call asking questions. This is true across the age spectrum even among women who thought by education, experience and training that they were well equipped to deal with these types of issues. In some cases I can help and in others I cannot. In all cases, it is clear that women, young and old, even in 2008, are still struggling to find their voice and their personal space and my most common advice is to speak up and insist on being heard . . . . young and old.

In Deeds

2008-06-04T07:03:00.000-07:00

A small but steady area of practice for my office revolves around deed preparation. Washington is a state where limited practice officers (LPO's) prepare the vast bulk of deeds, mainly through their employment with title companies. Apparently, there are an ever increasing number of companies even in the mortgage industry that would appear to prefer working with an attorney. Over the course of doing a couple hundred deeds in three or four different contexts, I'd like to offer the following thoughts and warnings:

-You cannot circumvent the State of Washington's land use laws by just going out and filing a deed without doing the appropriate platting and other procedure. Yes, I've seen it tried.

-Your elderly parent or grandparent may or may not be competent to quitclaim you anything, transfers can result in medicaid qualification problems for all parties and charges of undue influence.

-The doctrine of constructive trust may apply if you are holding title for someone else and will most likely legally complicate your affairs rather than simplify them.

-Because a successive deed fails to convey every easement or encumbrance previously granted in the chain of title, this does not necessarily extinguish the provisions of previous deeds.

-In general, transfering multiple parcels of land that are not part of large subdivisions, is probably not worth its savings in deed preparation relative to the time it takes to tease out confusing language. Deed preparation is relatively inexpensive. Spend the time and money up front and it will save you or your successors cash in the long run.

-Remember that a Real Estate Excise Tax affidavit will need to be filed and that you may need to provide documentation to qualify for an exemption.

When Lawyers Are the Heroes

2008-05-24T20:21:00.000-07:00

Having attended Seattle University School of Law during the time that the Wenatchee Child Sex Ring convictions were beginning to be reversed, I watched the FLDS cases proceed with great interest. I'm also a member of the mainstream LDS church, and, surprisingly, only once have had to clarify the difference for a person who actually knew better anyway. The Texas Bar Association, Texas Access to Equal Justice, Texas ACLU, ACLU and Texas Rio Grande Legal Assistance have all, through their members and staff attorneys, made a huge difference in these past few weeks in protecting every American's constitutional freedoms.

I support enforcement of Statutory Rape laws, enforcement of State and Federal Labor laws, and enforcement of the laws pertaining to public assistance fraud. I also do not support expansion of marriage beyond what it is currently constituted as in the forty-eight states that only permit marriage between one man and one woman regardless of who it is that wants an alternative form of marriage. Having made that disclaimer, I've also followed the R Kelly child porn trial simultaneously with the FLDS follies in Texas. R has also had a high profile marriage to a 15 year old. His trial is an interesting counterpart to the FLDS legal follies in Texas.

The other side of the equation-Vendors

2008-03-14T21:14:00.000-07:00

As a solo practitioner, I'm a small business person, too.

I just finished my first year of practice and although my senior lawyer mentors tell me I have all the "right problems," it has been a hair raising first year. Following the advice of mentors and experts, I've tried to select clients carefully, not carry much in accounts receivable and tried to provide great customer service. What I haven't done so well is manage my vendors effectively. And, its clear that some of the expenditures on purchases from vendors aren't producing the expected results.

Now that I know the direction my business will grow in and what expenditures of cash, time and energy are yielding the best return, its time to make some difficult choices. And, some not so difficult choices. I've had three vendors really perform on an outstanding basis on my behalf. One oversold me, but has always kept the big picture of the remainder of my career in mind in helping me to manage that situation.

I know that I can count on that company to do every thing that staff can humanly and humanely do to help my practice grow. It helps that they really understand the business of lawyering. And, their staff from my account representative, to the people answering the phones, to the accounts receivable people really know how to build long term relationships.

I did trim one of my subscriptions with that company back, but picked up a less expensive addition that I use over and over in my practice. While I wish I'd known then what I know today, I can honestly say that the value of the service and information products that I get from my two remaining subscriptions exceeds my expectations and compensates a bit for being in an excess subscription that first year.

A large bank has been seeking my business and working diligently to build a relationship. That has been refreshing. They started with some baggage, there had been some issues that were not so positive in the past. However, they kept doggedly trying to correct course and build a positive relationship. They've also made the effort to do a site visit to my office.

Finally, I have a family owned small business that I trade with that has friendly counter staff that have been there for a couple of years. They manage to turn around special orders of relatively esoteric items in less than three days, and make a good effort to carry comprehensive stock. Additionally, they've sent a small amount of business my way. Not much, but nevertheless appreciated.

Some of the negatives I've experienced with vendors over the past year are: 1) mechanical mistakes and failures, 2) intermittent service outages, 3) unresponsiveness to genuine concerns, 4) overly aggressive collection efforts on past due amounts (yes, I have the same problems the rest of you do), 5) bookkeeping errors, 6) failure to timely make changes requested, 7) delays in performance, 8) failure to return phone calls and e-mails, 9) malfunctioning product upgrades, 10) inability to get to my project at all and the list goes on.

My resolution for my second year of business is to more carefully manage my vendor relationships and expenditures to maximize value and identify those vendors who will be my long term "partners" in building this practice. It's a good goal for any business.

Got summons, get lawyer.

2008-01-08T06:13:00.000-08:00

I am a big fan of several self help law websites here in Washington State, most notably www.washingtonlawhelp.org. But, outside of family law, simple estate and elder law problems, the probability of successful pro se litigation dramatically declines. In general, if you receive a summons and a complaint, you'll do better and SPEND LESS if you see an attorney right off the bat.

Guardianship Rewind

2007-12-06T09:03:00.000-08:00

Last December, I posted a blog reviewing the excellent series by the Seattle Times on the problems with Professional Guardianships. Last week the times ran a two part series on predatory lending to seniors and the depletion of estates by persons not functioning as a family, volunteer or professional guardian under court supervision. Read it here.

Like the situation with Linda David, this woman's case had been reported to Adult Protective Services (APS) without results. Finally, a long term friend went to court as an "interested person." This is an option provided by statute and most people believe mistakenly believe that reporting to APS is the only recourse. If you find a dear friend or loved one in a similar situation, have a look at the Frequently Asked Questions from the Washington Guardianship website.

Steam from the Copper Kettle

2007-10-22T22:16:00.000-07:00

It's a rare occassion when I blog back to back, but I've got a little steam to work off today. The front page of the Daily Record reads "Evicted" and it's the story of another old line Ellensburg small business biting the dust. Read all about it here. Now there are many, many very interesting tidbits of information here ranging from contract issues, to lawyer fees, sales of existing businesses, and, well, retirement planning in the burg.

First, let's introduce the parties, Mr. Kruckenburg (restaurant owner) and Pautzke Bait Company Defined Benefit Plan and Trust (building owner). What's very interesting to me is the building owner. Not so very much that it's the Pautzke's because technically it's not, it's the pension plan. For the uninitiated or those who live outside the walls of this valley, the Pautzke family owns the bait company-yes it is soft and satisfying and mostly brightly colored. Out of this mini empire of fake fish eggs has come an enduring and endearing small business, a real estate agency, and presumably many other holdings that I know little of.

But again, not so interesting. Defined Benefit Plan and Trust, now that's the stuff you can really sink your teeth into. It's the pension plan and as such must manage the assets in the plan in such away as to meet the plan's benefit commitments. Under this type of plan, the trust must pay out a certain dollar amount every month. This unlike defined contribution plans (what more and more of us poor sods rely on at least in part) wherein the promise is only a return on the contributed amount. Note, that in the defined contribution plan the person receivng the pension bears a significant amount of the risk.

Now then, let's say you are a company and you've entered a contract with your loyal employees to provide them x amount of dollars in retirment. In doing so, you've sought to take advantage of tax incentives provided by the federal government and agreed to be in compliance with federal laws most notably ERISA(Employees Retirement Income Security Act) and the Internal Revenue Code. And, let's say you have had a long string of years where, well maybe you as the employer, didn't have to contribute too much money because the stock market was doing pretty well and your real estate investments were doing pretty well too. Some years you might have even moved some money out of the pension funds for other uses, because there was a "surplus."
But, then you notice that your former employees are living longer than expected. Oh, and let's not forget that very soft stock market return, well. relatively speaking after all those exceptional years. Suddenly. you find your pension fund struggling to meet it's expenses, but you have some rental real estate . . . might raising the rents be a way out of an otherwise difficult spot? Especially, when the penalties on defaulting on the federally regulated pension plan can carry some pretty nasty penalties including those troubling criminal charges.

So, while I have no information one way or the other to indicate that any of these issues came into play in our own Copper Kettle story, it's certain;y something to ponder when one is searching for an explanation for the seemingly inexplicable.

Now back to Mr. Kruckenberg. Not knowing him, it would be easy to write him off as a poor manager, right? Not so fast. This was a career employee of what looked to be the previous two owners. And, presumably, the previous owners who sold to him, had confidence in him, because the daily record article states that they still carry the contract on the sale of the restaurant to Mr. Kruckenberg.

Which then leads us to the next interesting tidbit to chew on. They sold the restaurant to Mr. Kruckenberg for $214,000. We know that the previous lease was based on a percentage. 5% to be exact. So, let us work the numbers. In the best months. $2,300 was the lease payment. This means that in the highest grossing months of the year the business might have cleared $46,000 monthly. Unfortunately, many months grossed just $26,000. So for the sake of the argument let's figure 4 months at $46,000 and $26,000 for the remaining 8 months. So roughly a $380,000 gross.

While some businesses warrant a 100 % conversion from gross to purchase and sale price, they are very rare. A general rule of thumb for businesses without customers under contract is a third of the gross, and with businesesses that are very dependent on personal services that number falls even lower. Using the 33% rule, Kruckenberg probably paid twice what he should have for the business. And, that's probably just one reason the previous owner's carried the contract, because it was unlikely that commercial financing was available at that price.

So along with reading all the documents that were part of the sale, a more thorough examination of the underlying financials of the deal might have been in order. So, now not only Mr. Kruckenberg is in a loss position and so are the previous owners who were obviously relying on the sale proceeds to help fund their retirement. Might all parties have been in better shape had the deal been structured in a way(i.e. a more reasonable price) that would have allowed a commercial lender to participate? The underlying lease contract would have been subject to scrutiny by the underwriter and might have been resolved at that time. Of course, this might have necessitated another price reduction.

Copper Kettle is not the only business that has been sold in Kittitas county in the last few years for more than it was worth. One thing these businesses have in common is that they've run their conceptual or aesthetic life. Or, they are on the downside of their lifecycle. And, we are all familiar with the businesses who closed their doors without a sale after asking high prices which did not appear to bear relationship to the existing business.

Many, many of those businesses which sold and didn't sell, had another thing in common with the Copper Kettle Story. The underlying leaseholds were not secure in the long run or were too highly priced to allow for any downturn in revenue or upswing in costs. In a retail or restaurant business where location is a premium asset of the business, having a secure leasehold is a major part of the businesses assets.

One of the least scrutinized aspects of the grueling ordeal of the purchase of the train depot by the city, is the underlying lease of the land of which BNSF would not grant more than a five year term. This with a building needing literally millions of dollars of restoration funds to make habitable again. BNSF is but one downtown property owner that has placed unreasonable burdens on existing and potential tenants.

So as a potential buyer how do you protect yourself?

Under the traditional school of thought, it's been posited that it's often more appropriate to lease your site. However, if you are really interested in building your business as a long term asset AND your business is highly dependant on location, you will want to own your land and your building in this town. Understand also, the underlying cyclical economy in this town, with summer months being the most profitable. Understand the economic culture of the area, wherein most people are relying on the volatile real estate market to provide for their "retirement." Understand that the successful retail businesses and even some service businesses (mine is a prime example) in this town rely on their internet business/marketing to carry them through the slow times and factor that into purchase and finance decision making.

If you must lease, find out who rented your space before you and go and talk to them about the landlord, the foot traffic and the quality of the property management. Do some research on your landlord. Are they a trust that has a duty to maximize current return and not interested in investment for the long run? Have they been in court frequently with tenants? Will the landlord attract customers to your business or drive them away?

Before buying a business with a lease and any supply contracts, audit, audit, audit and audit again with the assistance of attorney and accountant. And, then listen to the recommendations of both. Make sure you know what you are getting into three, five and ten years out. It's far easier to negotiate terms before the contract to purchase is finalized than after.

What if you are business owner looking to sell?

It's as inappropriate to rely on selling a small business for retirement without diversification as it is to rely on holding a block of a single stock. So, the key is to diversify. In my opinion, both spouses should never work exclusively in the same small business. One should have an anchoring job elsewhere as an employee, preferably with solid benefits including health and retirement. The Small business itself should have some sort of retirement plan. Avoid the trap of making decisions on spending solely for deductibility. When feasible, buy the Ford rather than the Mercedes and stash the difference for retirement. Build solid value for your business by actively reviewing underlying contracts such as leases, vendor agreements and customer contracts on an annual basis to make sure your are creating an asset that another party can assume.

Now onto lawyer fees. I've only been in practice in Ellensburg for a year, but I've come to the conclusion that not too much thought is being put into the cost of being in court. I'm not really sure why that is. In this case, there was $16,000 in attorney fees. Roughly the same amount in controversy. And, it's very likely the building is going to sit empty for awhile. Even if Pautzke, er . . . Defined Benefit is awarded fees in the amount of $11,500, will they be able to collect? Doubtful. Stay tuned and let's all watch what becomes of that very interesting corner location.

The jury agreed with Pautzke that they were right on their technicality, but came back with a fairly strong statement by only awarding $1. That speaks volumes.

Local politics

2007-10-20T05:29:00.000-07:00

It's been a long week for me and find myself wondering why I care. Then I wonder why others care. I haven't found a good answer to that. For some it's money, others its power and influence, and many, many others seem to truly desire to make our community better.

A few random thoughts:

You cannot build a thriving economy on real estate development alone.

Retirement planning based on a real estate portfolio without diversification is risky business. I'm sorry if you find yourself in this position. My office can help on a number of fronts from estate planning to corporate reorganization.

Water is a finite resource.

Laws are somewhat fluid and subject to court interpretation.

Judges, with relatively few exceptions, are honest, unbiased individuals who do not prejudge matters regardless of their political affiliations.

Citizens have constitutional protections both at the State and Federal level that permit them to engage their government.

The Washington State constitution provides a greater level of protection and rights for Washingtonians than does the Federal constitution.

Those elevated rights under the State Constitution include the right to recall elected officials.

To quote (paraphrase) the Daily record, " elected officials represent all their constituents, not just the ones they agree with."

There are state statutes that impose penalties for tampering with the voting process. Tampering includes threats and intimidation.

Federal statutes such as RICO, the anti-racketeering law also may come into play.

We should all exercise our right to vote, for we women that right was hard fought and paid for over 50 years of court, legislative, and grass roots effort in this state. No one should take that away from any of us by any means.

Why you need a lawyer (and an accountant)

2007-09-04T08:27:00.000-07:00

This summer I've seen several cases where, if the parties had initially seen a lawyer when they got started in the endeavor that is the genesis of the current problem, they would need less of my help right now or could have avoided seeing a lawyer altogether.

A few thoughts:

1) Using canned software or even document "mills" is a sure way to create problems down the road for many reasons including bad documents, incomplete documents, irrelevant documents and clauses, and, problems due to the failure to follow up.

2) Prosecutors are not your friends, and you should never accept a plea bargain without competent legal evaluation. And, in many cases competent means someone other than assigned counsel.

3) Alford pleas-please no, if you didn't do it, why take the rap? This plea will follow, follow you and you will be forever explaining yourself on the societal presumption of "where there is smoke there is fire."

4) Fear coupled with ignorance is recipe for disaster in self-help legal work. Spend the money for an hour of legal consultation or if you absolutely cannot, go to the excellent website at http://www.washingtonlawhelp.org/ for guidance on most simple legal matters.

5) When you handle money or property for yourself or others, proper tracking of the funds received and expended is essential and not optional. Do not try to cut costs or save time by not properly accounting. Get to know your accounting professional before you need them. It can be difficult to find competent accounting assistance when you are faced with litigation without an existing relationship with a pro.

6) Keeping up on the accounting issues will significantly reduce the chances you'll need a lawyer.

Gaining Access

2007-06-09T16:20:00.000-07:00

A few weeks ago over lunch, a forty-something friend from Seattle confided that she wondered if moving to LA would be the right choice for enhancing her acting career. Remarkably, two of her forty something friends moved to LA in the last couple of years and found immediate and continuing work as actresses. While we like to think of the Northwest as a great cauldron of independent film and music activity, realistically, the opportunities here are limited for paid work. She had moved here from Northern California hoping to be able to work in "socially meaningful" film projects, but to her great disappointment large numbers of those types of films are not being made here either.

In the film community, "socially meaningful" tends to means a production which has the potential to change the mind of the viewer to another position of thought. The classic documentary film from a balanced journalistic perspective, while still with us, now represents only a small fraction of the documentary genre. Now, documentary film with strong viewpoints is accepted, or, in some instances, scorned depending on your point of view. BJ Bullert in her book Public Television: Politics and the Battle over Documentary Film presented case studies from the 1970's and 80's where the then difficult topics such as AIDS could not get airtime, especially where a strong argument was made by the filmmaker on the most controversial side of the subject. Some argue now that the pendulum has swung too far in the other direction.

With the literally thousands of films and other artistic endeavors promoting a perspective, how does a person gain the type of access that lands a major media slot? Arguably, there now may be an opening for a few created by You Tube and other internet sources, but the long and short of gaining access is still going to be getting out and doing. For a filmmaker that means actually making the rounds on the festival circuit, direct marketing to consumers, or the harder work of finding a distibutor. For an actress that will probably mean working in pieces that are not "socially meaningful" works of art. And, so on . . . .

Which brings us to the real question, how many of us do "socially meaningful" work in any profession all the time and on every project? And, do those who do have the opportunity to make a living? While the answer is undoubtedly yes for a few, careful scrutiny of the facts shows that most pros in the entertainment industry had to pay their dues on projects of lesser enlightenment. Many continue to do so even when their star quality is in high demand.

One of the perks of Celebrity is the opportunity for access. Angelina Jolie is but one example of a celebrity using her access for "socially meaningful" work. Bono is another. This also explains why sometimes an industry insider gets wide access for a project of questionable quality and gets to have their voice heard when others would not.

James Cameron's Lost Tomb of Jesus was just such a project. Much hyped, but slow and not scientifically sound (one prominent archaeologist called it Archaeo-Porn), this documentary presented a clearly defined anti-biblical perspective. The same cable network would never present a documentary coming from the opposite viewpoint with such sloppy scientific and production value. But, because James Cameron produced it, he was able to get access. Cameron's most notable directorial roles included all three Terminator movies and Aliens, and while these films arguably contain some social commentary, they hardly could be considered truly socially meaningful.

Artists and others get access to have their voice heard or point of view seen by doing. To do it may be necessary to go to where the opportunity to work exists. Or, alternatively to bring the work to where you are. North by Northwest in Spokane is an example of a local entertainment industry company that has been able to successfully bring meaningful film industry production work to Spokane, Washington. Pete Jackson was able to bring production home to New Zealand on a sizeable scale. But again, he did the hard work of both going where the gatekeepers of the work were located in Southern California and then convinced them to bring the production to where he was.

He did not accomplish this by putting up a You Tube video. Along with great skills in production, simple skills but oft times frightening phone calls, e-mails, and networking are what makes a difference for an artist. Couple that with a substantial portfolio of finished projects and start reaching out to people in your industry whatever that may be and you will be surprised how many established professionals and emerging professionals will respond. Being active and meeting people is one of the best ways to establish access and that can be done over the phone and through e-mail. It's old fashioned hard work, but worth it.

The Most Common Estate Planning Mistake

2007-05-01T18:09:00.000-07:00

I belong to a nationwide listserv of estate planning attorneys and the "most common" estate planning mistake is:

Failure to fund Revocable trusts (Virginia).

Failure to fund Revocable trusts (Illinois).

Not funding your trust (Hawaii).

Unfunded trusts (Michigan).

Clients who forgot to transfer real property into the trust (California).

It may seem like a no-brainer after spending so much time and money, but failure to place assets into a trust is repeated over and over as the biggest estate planning mistake clients make. And, its not just the clients who may or may not be excused by age and forgetfulness, for the worst unfunded trust problem involves children who didn't know the property had not been transferred, and, apparently, didn't take much time to review the trust itself and its supporting documents. No probate was opened and the mistakes were only found later when the kids wanted to sell the farm and discovered it was still in the name of the parents and not the trust with the statutory timelines for filing probate long past.

If you have a trust of any kind, be sure to transfer real estate, re-title non-retirement accounts and change beneficiary designations. Also, check all changes and transfers for correct information.

Evaluating Business Financial Health

2007-04-01T17:53:00.000-07:00

Here are few possible questions to ask when contemplating the purchase of a business, legal action against a business, or simply whether or not your own business is saleable.

1) What is the typical profit ratio in the industry? Is it 30%? Is it 10%? Is it 1%? Are there published financial models that could be applied to determine whether costs are in line with the overall industry?

2) If a business grosses 2 million dollars, and the gross profit is $600,000, and the board reasonably declares a 10% dividend, shareholders receive $200,000, how does that relate to actual profits earned? Similarly, if the business only has a 10 % profit in a given year and the board decides to give 10 % profits out in dividends to keep the shareholders happy, is that a good thing?

3) Has the business run through its lifecycle? Is the concept still current and exciting? Is the physical aesthetic clean and fresh or dated and stale? Is further investment needed just to maintain the status quo?

4) Are there substantial management problems? Has the business been stripped of all saleable assets? What is the debt level? Is the company pre-bankruptcy? Is there a decent set of books? Is the company current with IRS, Department of Labor and Industries, Department of Revenue and other tax and regulatory agencies?

Valuable Vault Contracts

2007-01-30T10:53:00.000-08:00

It's become a rather pedantic refrain that I've uttered over and over in various settings, "Contracts create value." This refers from the fact that without a contract in writing most types of marketable "intangibles" have no valuable. The paper in and of itself didn't have any intrinsic value. Not so anymore. Twentieth Century Fox will auction off contracts from their vaults. Depending on the success of the auction, look for follow up litigation and future contract language limiting the right of one party to profit from the other party's signature on a legal document without sharing the profits. Commercial misappropriation anybody?

Designer Disabled?

2007-01-16T07:53:00.000-08:00

Disabled child in your home difficult to care for? Have her body modified to suit your needs. A couple in Seattle claims to have successfully surgically and hormonally altered their child to keep her size and weight child size. Regardless, of which side of the debate you find your sympathies lying, once again, important issues which should be debated and further examined are ignored.

Disabled children do have differing interests than their parents. And, there are many adult disabled who have uncomfortable and unpleasant memories of the problems they had with parents who wanted them to take a different path. At some point in time, every parent of a disabled child, if they are honest with themselves, must face the reality that their child may (and probably should) live an independent life. Even if a child can never live independently, parents must acknowledge the possibility that they themselves may die or otherwise become unable to care for the child.

There are many things that parents can do to begin the process of planning for the transition into adulthood without resorting to such drastic measures. First, the large majority of disabled children do qualify for educational services or accommodations under various federal and state programs. Second, even parents who otherwise do not qualify for federal and state assistance with medical and care requirements outside the school setting, can begin the process of qualifying the child for Social Security before the child turns eighteen. Third, parents with larger financial resources can shelter assets for a disabled child through the use of a supplemental or special needs trust.

Nevertheless, the difficult issue that cannot be addressed by accessing any of the above programs or legal mechanisms, is the day to day grind of raising a profoundly disabled or medically fragile minor child. The simple facts are that we do ration health care and resources in this country. Many parents of disabled children describe themselves as “have” or “have nots,” depending on whether or not their kids qualify for governmental assistance. The guidelines for qualification for benefits can seem quite arbitrary.

Even with adequate personal financial resources or governmental assistance, finding good help is still a challenge. This extends to all types of resources ranging from adequate home health assistance to finding competent professionals. For example, the ongoing shortage of speech, occupational, and physical therapists takes it toll on the entire system of services to the disabled of all ages. Indeed, the couple in Seattle cited the difficulty of finding good in home assistance as the primary impetus for the body modification of their child.

The larger societal issues that aren’t getting airtime in this debate include the underlying problems with health care and insurance, the inadequate number of health professionals this country’s health education system is producing at all levels of employment, and, a failure to protect and appropriately assist the families of the disabled of all ages. A dirty little secret in this country is that while the Disabled do enjoy some protection under the law in terms of access to employment and legal remedies for discrimination, those associated with disabled persons do not. Many parents of disabled children, particularly women, can tell stories of not getting jobs or advancement opportunities due to their roles of caretaking a disabled person. Realistically, it’s pretty difficult to keep a disabled child under “wraps” and parents of disabled children shouldn’t have to.