Can Amazon be Held Responsible for Defective Products Sold by Third Party Vendors?

Can Amazon be Held Responsible for Defective Products Sold by Third Party Vendors?

Amazon, the e-commerce giant, sells over 350 million products online, which includes millions of products from third-party vendors. More than 95 million Americans now have Amazon Prime memberships. What happens if someone gets seriously injured by using a defective product manufactured by a third-party vendor which Amazon sells on its website? Can Amazon be held liable? The short answer is YES.

There is very little regulation when third-party vendors place their products on Amazon. Amazon has argued that it is just the intermediary between buyers and its third-party sellers on Amazon’s marketplace, and therefore it should not be held liable for these defective products. Until recently, Amazon has won several lawsuits escaping liability for selling defective products. However, the tide is now shifting against Amazon. In 2020 a landmark case was decided in California, where a woman purchased a replacement battery for her laptop computer from Amazon. This battery was manufactured by a third-party vendor. After several months, the battery exploded, and the woman suffered third degree burns. The California Court of Appeals ruled that Amazon could be held liable for selling this defective product. In finding that Amazon may be held liable, the Court held that regardless of what role Amazon had – whether it was a retailer, distributor, or mere facilitator – it was pivotal in bringing the product to the consumer.

A similar result was decided in a Wisconsin federal court case in 2019 in the Western District of Wisconsin. (State Farm v. Amazon.com, Inc.)  In this case, a Chinese manufacturer functioning as a third-party and having no presence in the United States, sold a bathtub faucet adapter on Amazon. A month after a homeowner purchased the item, the adapter failed due to a defect and caused flooding to their home. The Court found that the Chinese manufacturer could be held liable but that it was not subject to a lawsuit because it had no presence in the United States. The Court then went on to analyze the potential liability of Amazon for selling the defective product. The Court held that Amazon could be strictly liable because it found that Amazon took on more than a peripheral role in putting the product into the stream of commerce. The Court focused on key facts about the manufacturer’s relationship with Amazon, such that Amazon provided payment processing for the manufacturer and guaranteed the purchases. It also highlighted that the manufacturer participated in Amazon’s Fulfillment By Amazon (FBA) Program pursuant to which Amazon stored the manufacturer’s products and fulfilled its orders. Amazon also required the manufacturer to register its products for sale and reserved the right to refuse registration. Finally, Amazon required the manufacturer to indemnify Amazon for any injury or property damage caused by the manufacturer’s products.

As shopping online becomes more and more prevalent compared to shopping at brick and mortar stores, the courts appear to be finding remedies for online buyers who purchase defective and dangerous products from third-party vendors. In response to these lawsuits and court holdings, Amazon has developed a new policy in 2021 where it will pay customers up to $1,000 for defective products sold on its marketplace by third-party merchants that cause property damage or personal injury. Amazon claims that 80% of its defective product claims are worth less than $1,000. Amazon states that it may pay higher than this amount if the manufacturer is nonresponsive or rejects a valid claim. This damage amount is clearly insufficient for serious injuries and damages can require litigation to obtain the full value from Amazon. Amazon still maintains its position that it is not legally liable for selling defective products. It does appear that the company is taking a proactive approach on this issue in order to potentially avoid further legislation and regulations that may make it more difficult for Amazon to sell third-party products online.

If you experience a defective product that causes serious damages and injuries, it is important to speak to an attorney in a timely manner in order to preserve any potential claims that you may have. If you have questions, please do not hesitate to reach out to one of our personal injury attorneys.

How to Prepare for Your Estate Planning Meeting

How to Prepare for Your Estate Planning Meeting

The thought of preparing an estate plan can be overwhelming. This is especially true if you are completing the estate planning process for the first time. You may have a long list of questions or perhaps you may not know where to begin. An experienced estate planning attorney can help guide you through the process. There are several things you can do to help ensure your first meeting with that attorney is as productive as possible.

Compile a List of your Assets and Liabilities.
There is no one-size-fits-all solution in estate planning. Your individual family, assets and goals should guide your plan. When preparing for your initial meeting to discuss your estate plan, it is very helpful to bring a list of your current assets and liabilities. Some examples of assets are: funds in savings accounts, owned vehicles and retirement accounts. Some examples of liabilities are: taxes owed, credit card debt and mortgage debt. In addition to current values, it is also important to provide the attorney with information regarding how the assets are titled and whether you have any existing beneficiary designations. This information will help the attorney recommend the most appropriate plan for you and discuss estate tax and probate avoidance concerns.

Consider Who You Want to Play a Role in Your Estate Plan.
To have a comprehensive estate plan, you must nominate people and/or entities to act in certain capacities on your behalf. Below is a list of some of the different roles they may play in your estate plan as well as some considerations to think about before your initial appointment.

  1. Personal Representative. Your personal representative, also known as your executor, will handle the settlement of your estate upon your death. In most instances, the personal representative selects an attorney for the estate and works with that attorney throughout the process.
  2. Guardian. Perhaps the biggest decision for people with minor children is the selection of a guardian. This is the person who will be responsible for the care and custody of your minor children upon your death. The guardian of the estate oversees the child’s property, while the guardian of the child is responsible for the child’s day-to-day care.
  3. Trustee. Depending on the size and complexity of your estate, there are several trusts that may be appropriate for your circumstances. Some trusts are created in a separate document, while some are integrated right into your will. When there are minor children, we always recommend some form of trust for their protection. The trustee will be responsible for managing the assets of the trust, employing advisors to help with the trust, generally tracking the beneficiary’s needs and ensuring the trust is administered according to its terms.
  4. Durable General Power of Attorney. A Durable General Power of Attorney nominates an agent and alternate agent to act on your behalf regarding the management of your property and other financial issues. You may establish your Durable General Power of Attorney to be effective immediately or to become effective at a later time when you voluntarily activate it or when a physician certifies that you are incapacitated.
  5. Health Care Power of Attorney. A Health Care Power of Attorney allows you to name an agent and an alternate agent to make health care decisions on your behalf if appropriate medical personnel certify that you are incapacitated, including end of life decision-making.

Decide on Your Beneficiaries.
Perhaps it goes without saying but an essential part of any estate plan is designating who you wish to leave your assets to upon your death. Prior to your initial meeting, you should consider who you want to name as the primary and contingent beneficiaries in your estate plan. Also, you can leave a bequest (property given to someone through a will) to a beneficiary in a variety of ways. You may leave a beneficiary a specific asset or dollar amount.  Alternatively, you may name beneficiaries to receive a percentage of your overall estate. Finally, you should consider whether you want your beneficiaries to receive their bequests outright, or if you want to place certain restrictions on the bequests to help ensure the funds are managed appropriately for minor beneficiaries or those with special needs. This can often be accomplished by using a variety of different trusts that fit your situation.

When you have completed the above steps and you have your documents in order, please reach out to one of our experienced estate planning attorneys, they would be happy to assist you.

Protecting Retirement Accounts for Spouses Who Need Long Term Care

Protecting Retirement Accounts for Spouses Who Need Long Term Care

Given the rapidly increasing cost of long-term care in a nursing home or assisted living facility, many couples inquire about how to protect their assets from being consumed by such costs, particularly their retirement accounts which often account for the majority of their wealth. While the Medicaid program is designed to provide payment for long term care costs for those who cannot afford the monthly cost, it is only available to those who qualify financially. A major determining factor for Medicaid eligibility is the amount of resources (assets) that are available to pay for care. An applicant for Medicaid cannot qualify for assistance if they possess excess assets, including the value of their retirement accounts. The Medicaid program also looks at the assets of the spouse in determining whether the applicant qualifies for assistance.

For married couples, the spouse who needs long term care (the “institutionalized spouse”) can only have $2,000. The spouse who does not need long-term care (the “community spouse”) can have the residence, vehicle, personal property and their own retirement accounts. They can also have a community spouse resource allowance that is based on the total countable assets that the couple has at the time of applying for Medicaid (between a minimum of $50,000 and a maximum of $130,380). Although the community spouse’s retirement accounts are not counted, all retirement accounts of the institutionalized spouse are counted in determining the asset limit. This can be very problematic when the institutionalized spouse has larger retirement accounts than the community spouse. Normally, the institutionalized spouse cannot just transfer their retirement accounts to their spouse without triggering income tax on the entire amount transferred.

The exception is a transfer of a “qualified” retirement asset that is divided by a Qualified Domestic Relations Order (QDRO). Qualified plans include: 401(k) plans, profit sharing plans, pensions, 403(B) plans and some forms of Simplified Employee Pension (SEP) IRAs. QDRO’s are typically thought of as a mechanism to divide assets when a couple divorces; however, if the retirement account is held in a “qualified plan” it can be divided by a QDRO without having to go through a divorce. Although a court order is required, it can be obtained in an action in family court for property division of a married couple, or through a guardianship action for transfer of the ward’s assets to a spouse, and no divorce action is required. Whether to bring the action in family action or a guardianship action will vary depending upon the circumstances, but either will accomplish obtaining the necessary court order.  Importantly, if the retirement account is an IRA, then a legal separation action must be filed in family court. Federal law provides that non-qualified retirement assets that are transferred from one spouse to another are not taxed if “transferred under a divorce or legal separation instrument.”

The benefits of the transfer of retirement accounts are numerous. Once a retirement account is transferred, the community spouse will become the owner of the qualified plan, without triggering any tax. The account will be considered an exempt retirement asset of the community spouse and will not interfere with the institutionalized spouse’s eligibility for Medicaid. Furthermore, any income received from the retirement account will not be considered available to pay the institutionalized spouse’s care costs and will not be available for estate recovery.

Although the transfer of a retirement account can be accomplished at the time one spouse needs care, it is important to think about advanced planning so that if retirement accounts need to be transferred pursuant to legal action, you have given each other the authority to do so under your durable general powers of attorney or other documents in case the institutionalized spouse is unable to sign the documents necessary to participate in the planning. Consult with a qualified elder law attorney who can be sure that you have the necessary documents in place for this important advanced planning.

 

How Long Will My Divorce Take?

How Long Will My Divorce Take?

Everyone who is going through a divorce wants the process to be over as soon as possible through either the granting of a final divorce decree or, in certain cases, reconciliation of the spouses. The uncertainty and emotional toll that accompanies almost all divorces results in people wanting the divorce done sooner rather than later. Unfortunately, the family court system rarely moves at a speed that will satisfy its participants.

Even if spouses have an agreement on all issues and timely file all the required paperwork, Wisconsin law dictates that a final divorce date cannot be scheduled for at least 120 days after the filing the of the initial divorce petition. Beyond this requirement, the length of a divorce proceeding largely depends on the issues being contested. For example, if divorcing parents do not agree on issues concerning custody and placement of the children, the court will appoint a Guardian ad Litem to complete an investigation and provide a recommendation to the court on behalf of the children’s best interests. Such investigations can take anywhere from a couple months to over a year to complete. Even when there are no issues concerning custody and placement, if spouses disagree on issues pertaining to the division of marital property or spousal support, many months may be spent requesting and exchanging financial documents, taking depositions and finding professionals to appraise assets and evaluate spouses’ earning potentials. The most contentious divorces can take multiple years to reach a final divorce hearing date.

Those going through a divorce can take some steps to avoid unnecessary delays. Promptly collecting financial records, responding to discovery requests and filing the appropriate documents with court is recommended to keep the process moving forward. Additionally, spouses who are willing to make reasonable compromises are more likely to reach a marital settlement agreement, which allows the spouses to secure a final divorce hearing date with the court. An experienced family law attorney can help divorcing spouses understand what is and is not reasonable under Wisconsin law in order to work towards such an agreement. Whether by agreement or contested hearing, an attorney can help spouses complete a divorce in a timely manner while furthering the interests of their clients.

 

Post Pandemic Public Benefits, Who Will Lose Eligibility?

Post Pandemic Public Benefits, Who Will Lose Eligibility?

During the Public Health Emergency (PHE), the State of Wisconsin was required to keep people enrolled in Medicaid as a condition of receiving a temporary increase in the federal share of Medicaid costs.  When the PHE ends (recently extended to January of 2022) so will the increased funding, and the state will need to look at whether currently eligible individuals will be renewed for benefits. 

Those individuals who could keep benefits during the PHE were:

  • Individuals who did not pay their patient liability or monthly cost share;
  • Individuals who did not report changes in assets, income, work status or household composition;
  • Individuals who received maximum FoodShare benefits during the pandemic regardless of qualification; and
  • Individuals over age 65 who received prescription drug benefits but did not do their annual renewals or pay the annual fee.

When the enhanced federal funding ends, states will need to resume processing renewals for eligibility, many of which have been pending for almost 18 months.  Current federal guidance provides that states will have up to 12 months to discontinue benefits that were extended under the PHE.  Further, an individual must be provided with at least 60 days advanced notice before losing benefits.

For individuals who properly reported the receipt of excess assets and income during the PHE and continued to receive benefits, an overpayment occurred that has not yet impacted benefits.  For those who did not properly report changes in resources, a discontinuance of benefits may be looming.  The fate of those who properly reported changes remains to be seen in terms of how the penalty for overpayment will be treated.  Generally, only those overpayments that are due to a consumer’s failure to report or provide updated information are recoverable.  Consult with your attorney to ensure that you are provided with the requisite time frame to provide necessary eligibility verification and proper notice of any adverse action regarding benefits.

 

Joint Tenancy vs. Tenants in Common, What is the Difference?

Joint Tenancy vs. Tenants in Common, What is the Difference?

When buying real estate in Wisconsin, one of the items you will need to consider is how you would like to take title of the property. If you are buying the property as an individual, then this is usually not an issue; however, this item will play an important role if you buy the property with one or more co-owners. You will need to consider whether you will be joint tenants or tenants in common. Both ownership types have different aspects and characteristics, so it will be important to consider the facts and circumstances pertaining to your situation.

In the case of joint tenants, each will have an equal interest in the whole property for the duration of the joint tenancy period, regardless of different or unequal contributions at the start of the joint tenancy. Additionally, joint tenants have a right of survivorship, therefore, upon the death of one of the joint tenants, the survivor becomes the sole owner of the property.

In contrast, tenants in common each have an undivided interest in the whole property for the duration of the tenancy. Tenants in common do not need to have equal interests in the whole property. Therefore, if there is a difference in the contribution amounts, then you may take that into consideration to determine the ownership interest each tenant in common receives. Additionally, there is no right of survivorship for tenants in common. Therefore, upon the death of a tenant in common, their ownership interest will be passed to their heirs at law under Wisconsin law and/or pass via their instructions within their estate planning documents.

Because there are differences between these types of ownerships, it will be important to consider how you want to take title. You should determine if you want your ownership interests to be equal or unequal, considering any differences in the amounts contributed by each co-owner. You may also want to consider how you would want the title to pass upon the death of a co-owner. Do you want the survivor to become the sole owner or would you like your interest in the property to pass to your heirs?

Under Wisconsin Law, it is assumed that co-owners of a property own as tenants in common, unless the intention of creating a joint tenancy is expressed in the document of title, instrument of transfer or bill of sale. Furthermore, under Wisconsin law, it is assumed that tenants in common each own an equal undivided interest in the whole property, unless the intent to have different undivided ownership amounts is expressed in the document of title, instrument of transfer or bill of sale.

As a result of the differences between joint tenants and tenants in common, it may be helpful to seek the advice of a real estate attorney before purchasing the property. An attorney would be able to analyze your situation and your intentions for the property and advise you on the best manner to take title with a co-owner. Moreover, an attorney will be able to assist you in expressing the appropriate language on the document of title, instrument of transfer or bill of sale to honor your intentions and prevent future issues regarding the ownership of the property. If you have questions, do not hesitate to reach out to one of our real estate attorneys.

 

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