U.S. Supreme Court Votes Unanimously On Tax Lien Case

U.S. Supreme Court Votes Unanimously On Tax Lien Case

There are many cases decided by the U.S. Supreme Court that receive scant attention from the public. Despite ideological divisions among the justices, it is not uncommon for the Court to vote 9-0 in case. In the case of Tyler v. Hennepin County, Minnesota, the Court issued a unanimous decision concerning the constitutionality of a tax lien foreclosure.

Geraldine Tyler owed $15,000 in unpaid real estate taxes on a condominium she owned in Hennepin County, Minnesota. The County seized the condomin and sold it for $40,000, keeping the $25,000 excess over what Tyler owed in unpaid taxes. Tyler argued the windfall to the County was unconstitutional in violation of the Takings Clause of the Fifth Amendment. The Takings Clause provides that “private property [shall not] be taken for public use, without just compensation.” U. S. Const., Amdt. 5. The question the Court concerned itself with was whether the surplus funds from the sale of the condominium are protected from uncompensated appropriation by the County. The Court’s analysis provided a history lesson in our English common law roots:

Parliament gave the Crown the power to seize and sell a taxpayer’s property to recover a tax debt, but dictated that any “Overplus” from the sale “be immediately restored to the Owner.” 4 W. & M., ch. 1, §12, in 3 Eng. Stat. at Large 488–489 (1692). As Blackstone explained, the common law demanded the same: If a tax collector seized a taxpayer’s property, he was “bound by an implied contract in law to restore [the property] on payment of the debt, duty, and expenses, before the time of sale; or, when sold, to render back the overplus.” 2 Commentaries on the Laws of England 453 (1771).

Ultimately, the Court held that “Tyler has plausibly alleged a taking under the Fifth Amendment,” reasoning that a “taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc [treasury] than she owed.” Wisconsin’s law on foreclosure of tax liens, Wis. Stat. § 75.521, is similar to the law that was challenged in Tyler. While the Wisconsin law is still on the books, a challenge to its constitutionality seems inevitable.

If you have any questions about tax liens or foreclosures, please discuss it with one of our experienced real estate or tax attorneys.

Is That Damage to Your Vehicle Less Than $1000?

Is That Damage to Your Vehicle Less Than $1000?

For those who may have been involved in an non-injury minor car accident, you may have heard from the other driver or bystander, “that damage is under $1000, no need to get the police involved.” A recent Wisconsin Court of Appeals decision, County of Monroe v. Kling, albeit unpublished, shows that it is better to be safe than sorry.

Wisconsin law states that if the operator of motor vehicle is involved in an accident resulting in total damage to property owned by any one person to an apparent extent of $1,000 or more, the operator must immediately notify law enforcement of the accident by the quickest means of communication.§ Wis. Stat. 346.70(1). Unsurprisingly, the rub is what is “apparent extent?”

In County of Monroe v. Kling, Mr. Kling was heading home from work when he veered to the side of the road, hit a mailbox, overcorrected his steering, and drove into a ditch. Kling was unharmed, and he was assisted at the scene by a several bystanders. Kling could not drive his vehicle out of the ditch, as the tires had popped off their rims and the vehicle had grounded out in the mud. One of the bystanders asked Kling if he had contacted law enforcement; Kling had not. The bystander called law enforcement as Kling received a ride home. After Kling returned home, he called law enforcement and a tow truck driver, and he contacted the owner of the mailbox and offered to replace it. Kling’s call to law enforcement was 34 minutes after the bystander’s call.

At the repair shop, Kling’s tires were reattached to the rims and inflated, the car checked for leaks, but no estimate was made for any bodywork. Kling picked it up two days later. Law enforcement issued Kling a traffic citation in violation of §Wis. Stat. 346.70(1). Kling contested the ticket at a bench trial, focusing his defense that it was not apparent to him that his vehicle has sustained at least $1,000 of damage.

The responding officer was the State’s sole witness on the extent of the damage to Kling’s vehicle, playing portions of his body camera. The video showed an intact vehicle, no leaking fluids, and the only visible damage was deflated tires, and the passenger side panel appeared to have some damage and some bumper trim had fallen off. According to the officer, “that’s way over the threshold of $1,000.”

Kling presented evidence that the cost to tow and remount the wheels was $200.45, and he replaced the bumper a few years earlier and it had cost him about $500. He presented an eBay listing for a comparable bumper for $146.91. He did not provide any estimate for repairing the side panel. The trial court credited the officer’s testimony and said it was confident that the total damage was much more than $1,000. Kling appealed.

The appellate court’s decision hinged on the undefined term of “apparent.” Per the court, the term apparent means damage that is visible and obvious, regardless of whether later inspection reveals more. Any damage that would require specialized training or expertise to identify is not apparent. Also, “apparent” means at the accident scene, and while the factfinder can consider after-the-fact estimates or receipts, they are not directed toward the disposition o f the case. Crucially, the Court held that § 346.70(1) is a strict liability statute that does not require proof of subjective intent; “apparent extent” is an objective person test.

As such, the Court held: “I conclude that an operator of a vehicle must report an accident when it would be obvious to a reasonable person in the operator’s position, at the time of the accident, that the total costs of repairing the visible damage to any one person’s property to as good of a condition as before the accident equals or exceeds $1,000.”

The Court of Appeals upheld the Trial Court’s ruling, focusing on the damage to the side panel pushing the total cost above $1,000 and crediting the responding officer’s testimony and opinion. It is important to point out that this is not a published decision and cannot be cited for authority; also considering that Mr. Kling was unrepresented at the Trial and Appellate Courts, it would not be a good case to make established law. That said, there can be little doubt that the various charging authorities have knowledge of this decision. The next time you scrape a pole in a parking lot or get into a fender bender, to avoid a citation, it is best to call the authorities.

Litigation and the Risks of Social Media

Litigation and the Risks of Social Media

Today social media use is an integral part of everyday life for many.  There are numerous platforms people use for communication, such as Facebook, Instagram, Twitter, Snapchat, TikTok, emails, texts, etc.  Electronic communications and interactions on social media can be easily done with the use of smartphones.  Statistics show there are currently an estimated 6.8 billion smartphone users in the world.

While technology has made life more convenient and has offered new innovative ways to communicate, those communications can pose significant risks if anyone finds themselves in a lawsuit or a potential legal claim.

Social media activities are sometimes posted in a public setting where everyone can see them, sometimes these activities are intended to be private, only for a select few.  However, information contained within social media accounts, whether public or private, can be discoverable in lawsuits, and can be used against individuals in court.  A few examples of how social media activities can impact or undermine claims in litigation include the following:

  • Personal Injury: In a personal injury claim, an insurance company or defense attorney could discover the claimant posting pictures or videos showing them on vacation doing aggressive physical activities, such as skiing, kayaking, mountain climbing, while at the same time the claimant states that they are seriously injured and unable to perform basic activities of daily living.  Even if the claimant attempts to explain that they are just trying to go on with their life and are in significant pain when doing these activities, these social medial posts can undermine their entire claim.
  • Business Litigation: Texts and emails can undermine a party’s argument that they did not communicate with the other side, or that they did not have a contract or an agreement.  Texts and emails can be severely damaging in any type of lawsuit because the parties who are writing those communications do not intend or expect them to be shown in court or used against them.
  • Family Law. Texts, emails and social media posts can be very damaging in divorce cases showing the activities of the parties for example, the negative or hostile interactions they have with each other, and/or with their children and whether they have engaged in inappropriate behavior.
  • Defamation. Posting defamatory content online about a business or another individual may expose the person who posted that content to a lawsuit for defamation.
  • Employment. Making comments about one’s employer or job online may get someone fired or prevent that person from being hired by prospective employers.  Social medial posts, texts and emails may also be used in any dispute between an employer and employee regarding any claims, including those based on wrongful termination and/or discrimination.  Social media posts by individuals showing photographs or videos of them doing activities that some may seem inappropriate, may also have a negative impact on the individual as far as their current or future employment.
  • Criminal Cases. Social media posts, videos or pictures can be used to support the prosecution of crimes.  Additionally, information from smartphones and apps can also be used to track someone’s location which could potentially impact the investigation of various crimes as well.

If someone deletes their social media posts and regularly deletes their emails and texts, will that help protect them from having this information used against them?  The answer is: “It depends.”  If someone keeps their posts, emails and texts private for the most part and routinely deletes them, that will be helpful in maintaining privacy.  However, what typically happens in a lawsuit is that when a party files a lawsuit based upon a potential claim that they have against someone else, it is only after the filing of the lawsuit that they engage in what’s known as “discovery,” and it is at that time that they are able to uncover the treasure trove of texts, emails and any social media posts that the opposing party has.  Even if the opposing party has deleted any potentially incriminating evidence prior to the lawsuit, today’s technology will allow vendors who have expertise to be able to retrieve deleted information that can be used against that party.  Additionally, it may be possible to subpoena someone’s search history on Google or other platforms even if it is deleted from their smart device.

It is noteworthy that once a lawsuit begins, if a party intentionally deletes social media posts, emails or texts, that party can potentially be accused of destroying evidence which will negatively impact their position in the lawsuit.  Therefore, deleting social media posts, emails or texts comes with a risk, and may be contrary to that jurisdiction’s laws if there is a potential claim or lawsuit pending.

In conclusion, one needs to be extremely careful of what they post, how they post it, and what they text and email and to whom, as there may be a risk of creating a permanent electronic trail of one’s activities which can have significant ramifications in the context of a lawsuit or other aspects of that person’s life. If you are ever in a situation where your social media posts or electronic communications may be used against you in court please contact one of our experienced attorneys.

 

The Catch With An Account Stated

The Catch With An Account Stated

“An account stated is an agreement between a debtor and a creditor that the items of a transaction between them are correctly stated in a statement rendered, that the balance shown is owed by one party to the other and that the party has promised to pay that balance to the other.”[1] Put simply, this means that if a party claiming to be owed money sends a statement showing a balance owed and the other party does not object, that party may be responsible for the amount stated. Even more simply, this means that if there is a dispute over the amount claimed to be owed in a statement, the party receiving the statement should immediately object. The objection should be in writing and specific. Silence in the face of an account stated is not golden.

Wisconsin law informs us that in an action on an account stated, “the retention of a statement of an account by a party without making an objection within a reasonable time is evidence of acquiescence in or assent to the correctness of the account.”[1]  Said differently, an implied agreement to pay may be presumed from such retention. In addition, an account stated may arise where a debtor makes a partial payment on an account or accompanies partial payment with an agreement to pay the balance.[2]

To illustrate the legal theory of account stated in action, let’s briefly examine the Wisconsin case of Stan’s Lumber v. Fleming. Naturally, Stan’s Lumber sells lumber. Mr. Fleming inquired whether Stan’s Lumber would provide building supplies for a home he was intending to build. Stan’s Lumber provided Fleming with a credit application which he completed and was approved by Stan’s Lumber. Shortly thereafter, Fleming began purchasing the materials from Stan’s Lumber. Stan’s Lumber regularly billed him for the materials. Fleming made some payments, but then stopped. At that time, Stan’s Lumber claimed an account balance of $33,200.99. Stan’s Lumber then continued to bill him for this balance plus the accrued financing charges. Importantly, after payments stopped, Fleming told Stan’s Lumber to be patient regarding payment, but failed to object to the account balance.

The court concluded that the evidence demonstrated a classic account stated scenario. In ruling for Stan’s Lumber, the court reasoned:

(1) Stan’s and Fleming formed an initial agreement for an “open account:”

(2) Fleming ordered materials on the account:

(3) Stan’s delivered the materials:

(4) Stan’s billed for the materials: and

(5) Fleming made payments on the account without objection. This evidence afforded a solid basis for the jury’s answer that, an account stated existed between Stan’s and Fleming.

In conclusion, the essence of an account stated claim is not the presence of a dispute between the parties as to a stated balance, but rather the failure of the debtor to object to the account, disputed or not, within a reasonable time. Ultimately, Fleming’s failure to object to the account balance resulted in his loss at trial. The takeaway is that a timely objection to an account statement with a disputed balance will go a long way to defeat a claim based on the theory of account stated.

[1] Onalaska Elec. Heating, Inc. v. Schaller, 94 Wis. 2d 493, 288 N.W.2d 829 (1980).

[2] Lepp v. Tamer, 1 Wis. 2d 193, 83 N.W.2d 664 (1957).

 

 

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

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.