The Letter of The Law: June 2015
IN THIS ISSUE:
By: Andrew Yun
A chapter 7 bankruptcy is more commonly referred to as a “liquidation” or “straight” bankruptcy, meaning that an individual debtor’s assets will be liquidated by a court appointed trustee, and the proceeds, if any, will be used to pay off – pro rata – the debts owed to creditors. The debtor will then be declared debt-free, and will be able to wipe the financial slate clean. With that being said, let’s explore some questions you may have in deciding whether you should file a chapter 7 bankruptcy petition.
What is bankruptcy?
Bankruptcy is a legal proceeding that allows an individual to be free from debt and to have a fresh start. In other words, if the court grants you a discharge in bankruptcy, you will no longer be obligated to pay your debts. The right to file bankruptcy is enacted under the federal law (not state law) and the cases are handled in the U.S. Federal Bankruptcy Court.
Do I have to do anything once I decide to file a bankruptcy petition?
Within 180 days before you file a bankruptcy petition, you must attend a budget and credit counseling session by an approved credit counseling agency, which can be done in-person, over the telephone or the internet. The agency will issue a certification of completion which you will need in order to file your bankruptcy petition. A list of approved credit counseling agencies can be found on the U.S. Federal Bankruptcy Court’s website (www.cacb.uscourts.gov).
How do I file a chapter 7 bankruptcy petition? Where do I file?
In order to file a chapter 7 bankruptcy petition, you must submit to the U.S. Federal Bankruptcy Court Clerk’s Office the following:
- Credit Counseling Certificate of Completion
- Filing Fee of $335
- Bankruptcy Petition Documents (which is provided on the court website)(at the very minimum, you need to file the Statement of Social Security Number); Voluntary Bankruptcy Petition; Electronic Filing Declaration (if you file online); and Master Mailing List of Creditors (a list of all your creditors’ names and addresses)
The U.S. Federal Bankruptcy Court has courts throughout the nation. If you are a resident of Orange County, the proper court will be the Central District of California – which has three divisional offices located in Santa Barbara, San Fernando Valley, Santa Ana, and Riverside.
Are there any fees to file a bankruptcy petition?
The fee to file a chapter 7 petition is $335 for one person or a married couple. In certain situations of hardship, the court will allow the filing fee to either be paid in installments or possibly waived; however, you must make such request with the court. The court accepts cash, money orders, or cashier’s checks but not credit cards.
Can I repay my friends and family once I determine I am going to file a bankruptcy?
There is a presumption that 90 days prior to your bankruptcy petition you are insolvent. Hence, any acts you perform to sell, transfer, repay or give away your assets will result either in the trustee unwinding the transaction and returning the assets to the estate and/or you will be liable for such “preferential” transfers. Therefore, it is strongly advised that you talk to an attorney prior to any such bankruptcy filing.
What are my obligations after the petition is filed? And, how long does it take to get my fresh start (get a discharge)?
After you file a chapter 7 bankruptcy petition, you will need to attend what is called a 341(a) Creditors’ Meeting. This is where the appointed trustee and creditors will have an opportunity to interview you regarding your assets and liabilities. Thereafter, if there are no objections from the trustee and/or creditors, the court will grant you a discharge approximately 80 – 100 days after your petition date.
Do I need to hire an attorney?
It is not necessary to hire an attorney to file a bankruptcy petition BUT it is very advisable to do so to protect your rights and interests afforded to you under the law. For example, you will not be allowed to discharge certain debts, e.g., student loans, child support payments, alimony, taxes, etc., and so bankruptcy might not be advantageous to you. Also, certain personal property may be exempted, e.g., jewelry, professional equipment, clothing, equity in your home, etc., meaning that you will be able to keep it even after you file bankruptcy.
I see lots of ads in the newspaper and internet regarding agencies that provide assistance to prepare the bankruptcy petition for a very low cost – what is this?
There are many non-attorney bankruptcy petition preparers out in the market that help you file the documents; however, they are limited to strictly that – preparing the document. The law prohibits them from providing legal advice, and you should not accept such advice. Filing a bankruptcy incorrectly can cause more harm than good.
If you are considering filing a chapter 7 bankruptcy petition in California, or have bankruptcy related questions, please contact Andrew Yun. In addition to preparing the requisite forms, he can advise you on the best financial strategy for your situation.
You have worked very hard to get a case ready for settlement or trial and the parties are now ready to settle the case in its entirety. You, the parties and counsel have spent hours hammering the general terms of the settlement out and you want to put the terms on the record or in writing quickly, so the settlement can be enforced as a judgment, if necessary, pursuant to CCP Sections 664.6 (non-construction defect matters) and 664.7 (residential construction defect matters). There are essential conditions you must follow if you want to use these code sections successfully to enforce the settlement you worked so hard to reach.
Code of Civil Procedure Section 664.6 states:
“If parties to pending litigation stipulate, in writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties , the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” (Emphasis added)
Code of Civil Procedure Section 664.7 states, in pertinent part:
“(a) Notwithstanding Section 664.6, if parties to a pending construction defect action stipulate personally or, where a party’s contribution is paid on its behalf pursuant to a policy of insurance , the parties stipulate through their respective counsel, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.
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(c) For purposes of this section, “construction defect action” shall mean any civil action that seeks monetary recovery against a developer, builder, design professional, general contractor, material supplier, or subcontractor of any residential dwelling based upon a claim for alleged defects in the design or construction of the residential building unit.” (Emphasis added)
Unless your case is a residential construction defect action, you must use Section 664.6 to enforce your settlement as a judgment.
First, there must be pending litigation when the stipulation or settlement agreement, in writing, or orally before the court is made. If the case has been dismissed before the settlement is properly placed on the record or properly placed in writing, then the court lacks jurisdiction to act in any way whatsoever. (See, Hagen Engineering, Inc. v. Daniel Mills, (2003) 115 Cal.App.4 th 1004, 1007-1008)
Second, the request that the court retain jurisdiction over the case in order to enforce the settlement must be made orally by the parties before the court or in a signed writing by the parties, not by their attorneys, spouses or agents. If after a suit has been dismissed, a party brings a Section 664.6 motion for judgment on a settlement agreement but cannot present to the court a request for retention of jurisdiction that meets all of these requirements, then enforcement must be left to a timely filed separate lawsuit. (See, Caesar Wackeen, et al. v. William Malis, et al., (2002) 97 Cal.App.4 th 429,433 ).
Remember, in non-residential construction defect cases, only the parties, not their attorneys, can secure the protections of Section 664.6.
In regard to Section 664.7, it was enacted to allow counsel to bind the parties and allow the court to retain jurisdiction to enforce insurance funded settlements by judgment. This is known as the “parties themselves” exemption found in construction defect cases. Please note, subsection (c) of Section 664.7, only applies to construction defect actions for residential dwellings. If your construction defect action is commercial, industrial or a mix of residential and commercial uses then you would be wise to follow the requirements of Section 664.6, even if the settlement is funded by insurance proceeds.
Keep an eye on these requirements and you should be able to use these CCP Sections 664.6 and 664.7 as the legislature intended them to be used.
By: Melissa Bright
In Nevada, in determining as to whether a claim of injury is covered by the uninsured provision of an insurance policy depends on the interpretation of the uninsured provision. The court will look at the insurance contract in determining what individuals are covered in the provision and what injuries the individual may recover. Further, unless an uninsured motorist provision specifies that punitive damages will be included, punitive damages are not covered in an uninsured motorist provision.
In Allstate, the court determined that the underinsured provision was unambiguous in that it only limited recovery to the injured insureds. Allstate Ins. Co. v. Fackett, 125 Nev. 132, 137; 206 P.3d 572, 575 (2009). Barbara Testa was a fault-free passenger in a vehicle and ultimately passed from her injuries. Id. at 135; 574. Respondent, Deborah Fackett, was Ms. Testa’s daughter. The insurance policy stated that Allstate would pay the damages an insured is entitled to recover from the owner or operator of an uninsured auto because of bodily injury sustained. Id. Ms. Fackett argued that she was entitled to a wrongful death action against the driver of the other vehicle; therefore, as the insured, she was entitled to the underinsured benefits for the death of her mother, Ms. Testa. Fackett agreed that she was not injured in the accident.
The court ruled in favor of Allstate. The court determined that the uninsured provision of the policy was unambiguous and comports with the plain language of Nevada’s uninsured statutory scheme, therefore it is enforceable. The insurance policy was unambiguous in that it provided coverage to the insured only for bodily injuries sustained as a result of an accident. Fackett was not entitled to damages for the death of her mother, because, the death of her mother was not “bodily injury” of the insured, Fackett.
Further, punitive damages are only included if set forth within the uninsured provision and in no way are punitive damages within the definition of bodily injury. In Siggelkow, the uninsured provision provided that the company “will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury sustained by the insured.” Siggelkow v. Phoenix Ins. Co., 109 Nev. 42, 44, 846 P.2d 303, 304 (1993). Siggelkow argued that the provision sets forth that the company “will pay all sums” legally entitled to from the uninsured individual. Id. The court ruled that punitive damages are not covered in the uninsured motorist provision because: (a) requiring an innocent party (insurance company) to pay punitive damages circumvents the purpose of punitive damages; and (b) allowing punitive damages to be covered in an uninsured provision would “distort the plain meaning of the uninsured motorist provision limiting coverage to ‘bodily injury only'” because “[u]nder no construction can the language ‘for bodily injury’ be read to include punitive damages.” Id. (citing State Farm Mut. Ins. Co. v. Belvins, 49 Ohio St.3d 165, 551 N.E.2d 955, 959 (1990). As such, the only way an insured can obtain punitive damages through its carrier from an uninsured provision is if the uninsured provision sets forth that punitive damages are included.
NEWS AND EVENTS:
PAID SICK LEAVE AND PIECE RATE PAY UPDATES
Kyle Kring of our Irvine office recently presented webinars focusing on paid sick leave and piece rate pay to members of CALPASC.
The paid sick leave webinar covered important items relating to the implementation of California’s paid sick leave law (AB 1522). Participants received vital information pertaining to options to provide the benefit and associated timelines, best practices, and pitfalls to avoid.
The piece rate pay webinar provided best practices and discussed ways to avoid potentially costly pitfalls relating to piece rate pay.
Employers are strongly encouraged to contact Kyle Kring to ensure they are complying with the piece rate pay system as well as the new paid sick leave law.
CALIFORNIA HR CONFERENCE – JOB DESCRIPTIONS
Kyle Kring and Laura Hess will present, “Job Descriptions – They Are More Important Than You Might Think,” at the 2015 California HR Conference taking place at the Anaheim Convention Center on Monday, August 31, 2015 from 10:45 a.m. to 12:00 p.m.
During the session, you will learn the importance of job descriptions as it relates to ADA claims, wage and hour claims (exempt/non-exempt), harassment and discrimination claims, and worker’s compensation claims. Attendees will learn about important information that should be included in job descriptions and the reasons for it. The presenters will also discuss practical advice for formulating job descriptions and updating them on a regular basis along with their use as a teaching and evaluation tool for annual or regular performance reviews.
Our attorneys have represented employers in all aspects of employment law. They defend employers against claims for sexual harassment, wrongful termination, retaliation, disability and age discrimination, failure to accommodate whistleblower, gender discrimination, misclassification and unpaid wages.