Going It Alone In Court

Going It Alone In Court

Individuals have a right to self-representation in Wisconsin courts and in federal court.[1]  Pro se is Latin for “on one’s own behalf.” When a litigant proceeds without legal counsel, they are said to be proceeding “pro se.” See, e.g. Rivera v. Florida Department of Corrections, 526 U.S. 135 (1999). Although proceeding pro se is allowable, that does not mean it’s advisable.

The proliferation of legal self-help books such as Law for Dummies and Free Legal Help Made E-Z create the perception that anyone can successfully self-represent no matter how complicated the case. This, in turn, plays into the overconfidence effect, which biases our judgment in three ways: “(1) overestimation of one’s actual performance; (2) over placement of one’s performance relative to others; and (3) over precision in expressing unwarranted certainty in the accuracy of one’s beliefs.”[2]   Overconfidence can be dangerous.  No self-help book would convince a logical person to perform an invasive surgery on themselves. Although the risks of self-representation are less drastic, the likelihood of failure is equally high.

In court, the self-represented are bound by the same rules that apply to attorneys. The right to self-representation is “[not] a license not to comply with relevant rules of procedural and substantive law.”[3] While some leniency may be allowed to pro se litigants, “neither a trial court nor a reviewing court has a duty to walk pro se litigants through the procedural requirements or to point them to the proper substantive law.”[4]   A court’s patience will run thin quickly if a pro se litigant fails to follow the rules. As one commentary states: “Although the court may make special concessions in certain pro se appeals, it cannot be said that pro se appellants have any advantage over appellants who are represented by counsel. Whatever minor procedural deviations are allowed, a pro se appellant cannot compensate for the lack of legal training and therefore has a greatly reduced likelihood of success on appeal.”[5]

Based on the “greatly reduced likelihood of success,” most lawyers would never recommend that someone proceed without assistance of counsel. However, there are certain situations where it is a viable option. For instance, given the lower stakes in small claims action and the fact that small claims courts routinely deal with unrepresented parties, small claims court can be an acceptable arena for proceeding pro se. The Wisconsin courts’ website publishes free legal forms for small claims. [6]  

In short, there are a lot of factors that influence the decision of whether to retain an attorney or go it alone. If you have any self doubt  about self-representation then you should seek professional legal advice.

[1] A “corporation must be represented by a licensed lawyer in a legal proceeding other than in small claims court. See Wis. Stat. § 799.06.” Jadair Inc. v. United States Fire Ins. Co., 209 Wis. 2d 187, 198, 562 N.W.2d 401, 405 (1997). The right to appear pro se in a civil case in federal court is defined by statute 28 U.S.C. § 1654.

[2] https://en.wikipedia.org/wiki/Overconfidence_effect

[3] Farretta v. California, 422 U.S. 806, 834 n.46 (1975).

[4] Waushara County v. Graf, 166 Wis. 2d 442, 451, 480 N.W.2d 16 (1997).

[5] D. Walther, P. Grove, M. Heffernan, Appellate Practice and Procedure in Wisconsin, Ch. 11, sec. 11.9 (1986).

[6] https://www.wicourts.gov/forms1/circuit/ccform.jsp?page=3&FormName=&FormNumber=&beg_date=&end_date=&StatuteCite=&Category=51; https://www.wicourts.gov/services/public/selfhelp/docs/countylegalresources.pdf

Deeds, Deeds, Deeds

Deeds, Deeds, Deeds

Often when individuals purchase real estate, their understanding of the transaction is that the Seller will convey the real estate by executing and recording a deed. However, there are actually various types of deeds, each with their own set of warranties or guarantees regarding the title being conveyed. Because of the differences between the various types of deeds, it is important to understand which type of deed is being used to convey the real estate in your transaction. Three of the most common types of deeds are the following: General Warranty Deed, Special Warranty Deed, and the Quitclaim Deed

The most commonly used deed is the General Warranty Deed. This type of deed provides the Buyer with the most protection by the Seller. Under a General Warranty Deed, the Seller is warranting or guaranteeing that they have lawful title to the property, the right to convey the property, and that title is clear aside from standard exceptions, such as municipal and zoning ordinances, recorded utility and municipal services easements, building restrictions and covenants, and taxes levied in the year of closing. Since the Seller is warranting that there are no issues with the title, even dating back to prior property owners, it offers the best protection to the Buyer. If the Seller conveyed the real estate to you using a General Warranty Deed and later a defect in title is discovered, the Buyers are able to sue the Seller, as they are legally responsible for the breach of the warranty.

Another type of deed used is the Special Warranty Deed. This type of deed is similar to the General Warranty Deed, except the main difference is that it limits the timeframe of the warranties that the Seller is providing. With a General Warranty Deed the Seller is warranting there are no defects of title all the way back to previous owners of the property. However, with the Special Warranty Deed the Seller is only warranting that no title defects have occurred during their time as owners of the property. Thus, the Sellers are not warranting or guaranteeing against any defects in title that existed before they became owners of the property.

Lastly, the Quitclaim Deed is another commonly used deed. This type of deed affords the least amount of protection to the Buyer.  With a Quitclaim Deed the Seller is not warranting or guaranteeing any ownership rights in the property. Instead, the Seller is simply conveying any title or rights that they have in the property. Pursuant to the statutes, a Quitclaim deed will pass all of the interest the Seller can lawfully convey, but does not warrant or imply the existence, quantity, or quality of such interest in the property. Therefore, if a title defect is discovered after the deed has been signed and recorded, the Buyer has no recourse against the Seller.

These were just three of the types of deeds that are utilized in real estate transactions in Wisconsin. As a result of the varying levels of warranties and guarantees provided by each type of deed, it can be helpful to seek the advice of a real estate attorney before purchasing or selling a property. A real estate attorney will be able to explain the differences between the types of deeds used for the conveyance, if a particular deed type is more favorable in certain transactions, as well as what your legal recourse or responsibility is based on the type of deed used. If you have any questions about types of deeds and what type of deed to use in certain transactions, do not hesitate to reach out to one of our experienced real estate attorneys.

Family Court is a Court of Equity

Family Court is a Court of Equity

Often when trying to define what “equity” means in the legal context, people use words like “fair” or “equal” but neither of those really encompass what it means for the Court to be a “court of equity.” So, I am going to try and explain what it means without using ‘legalese’ or using the word in the definition. Even though this article will be mostly referencing family law or family court, this can apply to non-family law cases also.

Below is the Cornell Law School Legal Information Institute’s definition.

Equity: In law, the term “equity” refers to a particular set of remedies and associated procedures involved with civil law. These equitable doctrines and procedures are distinguished from “legal” ones. While legal remedies typically involve monetary damages, equitable relief typically refers to injunctions, specific performance, or vacatur. A court will typically award equitable remedies when a legal remedy is insufficient or inadequate. For example, courts will typically award equitable relief for a claim which involves a particular or unique piece of real estate, or if the plaintiff requests specific performance.[1]

This definition provides an interesting dividing line worth noting. Family Court is a court of equity and not a “court of law”, which means that there are not always hard and fast rules that the judge uses to make a ruling. In Family law there generally are not statements such as, “Well, Spouse A, because you did ‘X’ that means you get primary placement of the child.” Instead the court has a number of factors to consider when making most decisions.[2] Compare this to a court of law that says, “You were going one mile an hour over the speed limit, that’s illegal, here’s your fine.”

While there may be discretion as to whether to enforce the law, there are typically few factors that a court reviews to determine if someone actually broke the law. As a practical matter, most Family Law cases are difficult to appeal because the Family Court judge has discretion in making most decisions and two different judges might come to different decisions when looking at all the factors. On appeal, the court of appeals is only allowed to determine if the Family Court judge abused that discretion, which is rare.

Wisconsin courts have used a variety of phrases to describe the Court of Equity. “”A court of equity has inherent power to fashion a remedy to the particular facts.”[3] Other cases say that the court of equity has “wide latitude”[4] to provide both sides the relief they need. This means that a court could try to find a way to give both parties all, or a portion of, what the parties want, even if there is not a specific law that says that particular outcome is required. Courts get to “adapt,”[5] or “shap[e] [their ruling] . . . to fit the changing circumstances of every case and the complex relations of all the parties.”[6]

This type of court ruling is incredibly different from the “justice is blind” statue that we have heard about the court system. Courts of equity are not blind. Courts of equity have their eyes wide open, looking at all the circumstances they are allowed to look at. They try to mold and craft a ruling to the contours of the case.

You may be thinking, it seems that all courts should be like this. The issue is, this type of court ruling or procedure, where each case is treated as unique, becomes near impossible to predict. Different judges might look at the same facts and consider the same factors but come to different conclusions or rulings. We rely on our courts to interpret laws consistently so that there is predictability in our society. People want to know what the consequences of their actions will be. But, there are settings, like family law, where we realize that no two cases or families are similar enough that a one size fits all approach would work.

In Summary, the best way to describe the court of equity, is to say “it’s like a court of law and rules, but it is allowed to be more creative in finding a solution that is right for the specific case at hand and the court of equity can be less concerned about if that same ruling would work for the next case.”

[1] https://www.law.cornell.edu/wex/equity

[2] Wis. Stat. § 767.41(5)

[3] Town of Fond du Lac v. City of Fond du Lac, 22 Wis. 2d 525, 531-32, 126 N.W.2d 206 (1964).

[4] Beidel v. Sideline Software, Inc., 2013 WI 56.

[5] Am. Med. Servs., Inc. v. Mut. Fed. Sav. & Loan Ass’n, 52 Wis. 2d 198, 205, 188 N.W.2d 529 (1971).

[6] Ash Park, LLC v. Alexander & Bishop, Ltd., 2010 WI 44.

WI Supreme Court Rules Against Bars and Restaurants on COVID-19 Pandemic Financial Losses

WI Supreme Court Rules Against Bars and Restaurants on COVID-19 Pandemic Financial Losses

This article is a follow up to one I wrote on August 10, 2020 relating to potential insurance coverage for business losses due to the government shutdowns and restrictions for in-person dining during the COVID-19 pandemic. The first lawsuit on this issue was filed nearly two years ago.

One case finally made its way to the Wisconsin Supreme Court, and on June 1, 2022, the Court unanimously held that Society Insurance Company did not have to provide coverage for business interruption losses claimed by restaurants and bars due to government shutdowns and restrictions imposed on in-person dining. This case is Colectivo Coffee Roasters, Inc. v. Society Insurance, 2021AP463 (June 1, 2022).

In this lawsuit, the plaintiff and other bars and restaurants experienced substantial losses as a result of the COVID-19 pandemic and related government restrictions on in-person dining. The Supreme Court addressed the specific issue of whether those losses are covered by a property insurance policy issued by Society Insurance. Specifically, the questions are: (1) Whether a bar or restaurant’s inability to use its dining space for in-person dining because of the pandemic and related government restrictions constitutes a direct physical loss of or damage to its property under Society’s policy; and (2) Whether the presence of COVID-19 on a bar or restaurant’s property caused the bar or restaurant to suspend its operations, thereby entitling it to coverage under the policy’s contamination provision. The Supreme Court concluded that the answer to both questions is no, and ruled against the bars and restaurants.

The Wisconsin Supreme Court followed the majority of courts nationwide in holding that the presence of COVID-19 does not constitute a physical loss of or damage to property because it does not “alter the appearance, shape, color, structure, or other material dimensions of the property.”  The Court held that although the restaurants could not use their dining room for in-person dining for a period of time, “the dining room was still there, unharmed and it was not physically lost or damaged. Without such a harm, the policy’s business income and extra expense provisions do not apply.”

With respect to the civil authority provisions of the insurance policy, which the restaurant argued should apply based upon the government’s imposed shutdown, the Court ruled that the restaurant did not identify any physical loss or damage to its property or surrounding property such that the business income or extra expense coverage should apply.

Finally, the Court affirmed the ruling of no coverage under the contamination provision of the policy for three reasons. (1) The restaurant did not suspend its operations due to the presence of COVID-19, but did so based upon the Governor’s orders. (2) The Governor’s orders did not prohibit access to the restaurant’s property – they restricted how the property could be used. (3) The Governor’s orders did not prohibit the restaurant from producing its products – they prevented it only from serving its products for in-person dining.

This ruling by the Wisconsin Supreme Court marks a trend among state Supreme Courts in finding no business interruption coverage for alleged COVID-19 related losses, and also follows the well-established nationwide trend in the federal courts denying insurance coverage for these claims.

 

What is a Real Estate 1031 Excange?

What is a Real Estate 1031 Excange?

In the field of real estate, a commonly used term is a 1031 Exchange. But what exactly is that? A 1031 Exchange is aptly named after Section 1031 of the U.S. Internal Revenue Code, which permits the deferral of capital gains tax in certain real estate transactions. Capital gains taxes are owed on the profits from the sale of most investments if they are held for at least one year. Due to the possibility of deferring the tax, there are many requirements in place that must be followed in order to receive the benefit of deferring the capital gains tax.

The first requirements is that a 1031 Exchange can only be used in certain real estate transactions. A 1031 Exchange is only applicable to the sale of real property that is held for productive use in a trade, business or for investment. Furthermore, the replacement property that is purchased also has to be held for productive use in a trade, business or for investment. Therefore, a 1031 Exchange would not be allowed in real estate transactions with property that is used for personal reasons, such as your residence.

The second requirement of a 1031 Exchange is that a qualified intermediary is required to facilitate the transaction by handling the funds. As part of the regulations, you (the owner) are unable to receive or control the funds from the sale of the property in a 1031 Exchange. A qualified intermediary can be a person or a company, however, they cannot be a disqualified person as defined in the Treasury Regulations. The qualified intermediary will take possession of the funds from the sale of your property and hold those funds until they can be transferred to the seller of the replacement property you are purchasing.

The next requirement is that there are certain time periods that must be met to complete the 1031 Exchange. Firstly, you have 45 days from the sale of the property to identify a replacement property. Secondly, you need to conclude the 1031 exchange within 180 days. If you miss any of these deadlines, then the 1031 Exchange will not be complete and you will not receive the tax benefit of deferring the capital gains tax.

Although these are three important requirements of a 1031 Exchange there are still other requirements and technicalities involved with completing a 1031 Exchange. For that reason, if you are considering utilizing a 1031 Exchange it will be helpful to seek the advice of a real estate attorney before selling your property. A real estate attorney will be able to help you navigate through the requirements and technicalities of a 1031 Exchange so that you may benefit from the deferral of capital gains tax. If you have any questions about completing a 1031 Exchange, do not hesitate to reach out to one of our experienced real estate attorneys.

Are Contractors Actually Fully Insured?

Are Contractors Actually Fully Insured?

Anyone who has inquired with, or hired, a contractor or homebuilder has invariably seen or been told by the company that they are “fully insured.”  More times than not, this statement simply means that the company has a standard commercial general liability (CGL) policy. Unfortunately, these “fully insured” statements understandably give the customer a false sense of security that if anything goes wrong with the work performed by the contractor or builder, its insurance company will cover the damage and make things right. In fact, with a standard CGL policy, the opposite is true:  the insurance company will not cover damage that arises out of the company’s work (or its contactor or subcontractor). What is often referred to as the “your work,” “business risk” or “exclusion” directs to an exclusion in standard CGL policies that bar coverage for property damage to the part of the real property that the company is performing work on. The language often looks like this in CGL policies:

This insurance does not apply to:

  1. Damage to Property

Property damage to:

…. (5) That particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operations.

Practically speaking, this exclusion bars insurance coverage for damages such as deficient or defective work performed by the company or damage to your property caused by the company’s work. The net effect of no insurance coverage means that any recovery by the aggrieved customer will have to come against the company itself, which, depending on the company’s financial status, can be exceedingly difficult. Not only are many contractor and building companies set up as legal entities designed to protect against liability, but Wisconsin law exempts up to $15,000 in business assets from execution of a judgment. See Wis. Stat. § 815.18(3)(b).

In summary, it is incredibly important to vet the contractor or building company prior to hiring. In addition to their reputation and longevity in the community, you can inquire whether they have any insurance coverage or bond above a standard CGL policy and whether they have the financial resources to pay a judgement if a dispute arises. Moreover, the Wisconsin Circuit Court Access search (https://wcca.wicourts.gov/)  allows you to look up a company and see if they have unpaid judgments entered against them. This due diligence is necessary because a contractor’s claim of “fully insured” means little to nothing when the contractor’s work is the subject of the claim.

 

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