May 9, 2016 In Business Litigation, Estate Planning

Wyoming Close LLCs Protect Assets

A popular asset protection tool we use at Patterson Bray is the Wyoming Close Limited Liability Company. One or more people can establish and own this type of entity and may also manage the LLC.

Anyone can establish a Wyoming Close LLC, even if you do not live in Wyoming or conduct your business there.

Protection from Lawsuits

Under current law, assets inside a Wyoming Close LLC are protected from “outside” lawsuits and creditors, such as those resulting from a car accident or malpractice action. In a few states, like Wyoming, the sole remedy for a creditor of an LLC member against that member’s LLC interest is a “charging order.” A charging order only allows the creditor access to the debtor’s LLC interest to the extent distributions are made to the member.

Estate and Gift Tax Benefits

Under current law, the value of a membership interest in a Wyoming Close LLC may be subject to valuation discounts for estate and gift tax purposes. We anticipate in the future that the IRS will institute regulations limiting tax benefits.

Separation of “Hot” and “Cool” Assets

A “hot” asset is something like a rental property. A “cool” asset is something like a brokerage account. Separate LLCs should be formed to keep “hot” and “cool” assets separate. “Cool” assets should be isolated from “hot” assets because any “inside” lawsuits, such as those resulting from accidents occurring on property inside the LLC, will subject “cool” assets to claims of creditors of the “hot” assets.

Is a Wyoming Close LLC right for you?

If you have questions about whether a Wyoming Close LLC might be right for you, or if you’re curious about other forms of asset protection and business organizations, please call us at 901-372-5003 or email us here. We will examine your personal situation and work to develop the asset protection strategy that is right for you.

April 7, 2016 In Business Litigation, Contracts

Small Business Tip: Include Provision in Your Contracts to Recover Attorneys’ Fees

Reason to Add an Attorney Fee Provision

You’re running a small business. You have a form, purchase order, or other short contract you always use. Take a moment to look at your forms and contracts. Do they include an attorney fee provision? If not, we recommend that you add one.

If someone fails to pay you, you might need to file a lawsuit to recover what you are owed. Going to court is expensive. In Tennessee, each party is responsible for paying their own attorney fees. That’s right–even if you win in court, you generally can’t make the other side pay your attorney fees unless you have an attorney fee provision in your contract. For more information on attorney fees, read this blog post.

Sample Attorney Fee Provision

If any party institutes any action or proceeding to enforce any provision of this contract by reason of any alleged breach of any provision herein, the prevailing party shall be entitled to receive from the losing party all legal fees and costs incurred in connection with any such proceeding.

We are Small Business Lawyers.

Check out our team at Patterson Bray. If you need help with your small business contracts, agreements, or forms, or if you have a question about business litigation or the recovery of attorney fees in a lawsuit, please call us at 901-372-5003 or email us here. We have offices in Memphis and Nashville TN.

March 31, 2016 In Business Litigation, Civil Litigation

The Other Side is Lying. Can I Sue for Defamation?

“Can we sue them for defamation?” That is a question we receive very frequently from both Plaintiffs and Defendants we are representing in pending litigation. Typically, the question is a reaction to reading or hearing something alleged in the lawsuit, whether in a complaint, answer, discovery responses, or during courtroom or deposition testimony. The client asking that question usually feels that his or her integrity is being questioned, is very upset, and wants to know if he or she can “counter-sue.” In the context of litigation, the answer is no. Let’s explore why.

What is Defamation?

To win a defamation case, you must prove that:

(1) Someone “published” a statement about you. (“Publication” is a legal term of art meaning the communication of the subject defamatory matter to a third person.)

(2) The publication occurred with knowledge that the statement was false and defaming to you, or with reckless disregard for the truth, or with negligence in failing to ascertain the truth.

(3) Your reputation was injured. Damages from false or inaccurate statements cannot be presumed. Actual damages must be suffered and proved.

Brown v. Christian Bros. Univ., 428 S.W.3d 38 (Tenn. Ct. App. 2013). A statement is not defamatory just because it is annoying, offensive or embarrassing. Rather, the statement must be a serious threat to your reputation. Defamation includes both libel and slander. Libel is written defamation. Slander is spoken defamation.

But wait . . . there’s the Judicial Proceeding Exception

Statements made in the course of judicial proceedings which are relevant and pertinent to the issues cannot be used as a basis for a libel action for damages. This is true even if the statements are known to be false or even malicious.

The policy behind this rule is the paramount importance of access to the judicial process and the freedom to institute, defend, and participate in a lawsuit without fear of being sued for defamation. This exception in Tennessee may leave a wronged individual with no remedy, but our courts have determined that the rights of the individual must be sacrificed for the public good. Desgranges v. Meyer, No. E2003-02006-COA-R3CV, 2004 WL 1056603, at *5 (Tenn. Ct. App. May 11, 2004).

What should I do if I think I have a defamation, libel, or slander case?

Call a lawyer to discuss your case as soon as possible. The deadline for filing a slander suit is 6 months from the time the words are spoken. The deadline for filing a libel suit is 1 year after the words are written. Gathering and preserving your evidence is crucial. Remember you must prove not only that someone defamed you, but that you suffered actual damages.

Patterson Bray

8001 Centerview Parkway, Suite 103

Memphis, Tennessee 38018

(901) 372-5003

Visit our website to learn why we’re not your everyday law firm.

We have offices in Memphis and Nashville and represent clients in Lakeland, Arlington, Cordova, Bartlett, Germantown, Collierville, and many other areas throughout Tennessee and Mississippi.

March 29, 2016 In Business Litigation, Civil Litigation, Contracts, Estate Planning, General, Government

Top 8 Ways to Save Money on Attorney Fees

Let’s talk about attorney fees. When confronted with a legal claim or issue, some people simply want to “turn it over to the lawyer and be done with it.” Others prefer a more hands-on approach, and they prefer to work closely with legal counsel. Some clients want to resolve a matter as quickly and cost-efficiently as possible, while others desire vindication and want nothing short of a judicial ruling or jury verdict. However, there is one thing that all clients probably agree on. The lower the attorney fees, the better.

How do you keep legal fees in check?

Make sure your goals and legal strategy are clear. Lawyers work for clients, and attorney fees are based on the amount of work the lawyer performs for the client. Clear communication and responsiveness from both the lawyer and the client is critical. Above all, you must make sure you communicate clear goals, and then to listen and understand what actions your lawyer is suggesting.

What can I do to save money on attorney fees?

There are also a few things you can do to reduce attorney fees, legal costs, and expenses:

(1) Come prepared. Each time you meet with your lawyer, anticipate questions and come prepared with information. Bring a timeline, notes, a list of witnesses and contact information, and relevant documents. Don’t make your lawyer beg for the information he or she will need in order to best represent you.

(2) Obtain, review and organize your documents. The overwhelming majority of cases can be boiled down to a few key documents. You don’t want to pay your lawyer to obtain documents you could get yourself. Nor do you want to pay a lawyer to “find a needle in a haystack” or to review unorganized or unnecessary documents searching for one relevant piece of information.

(3) Promptly do what your lawyer asks you to do. Respond quickly to information and discovery requests from your attorney. Failure to do so drives up costs immeasurably. It can lead to unnecessary communications between opposing lawyers, and between clients and lawyers, and often leads to unnecessary motions being filed by opposing counsel.

(4) Stay on top of your case. Keep copies of all papers, letters, and pleadings. Take notes when you talk to your attorney. Keep yourself informed about your case. You’d be shocked at how often clients call and/or ask for meetings to re-review things they should already know, or to get copies of papers they already have.

(5) Be an “information gatherer.” This one is especially true for companies and small businesses. You know your business, employees, and contacts better than your lawyer. Utilize your knowledge and relationships. You can often obtain information and documents much more easily and cost efficiently than your lawyer can.

(6) Utilize your lawyer’s assistant. Many of your questions and phone calls can be directed to your lawyer’s assistant, most of which is not recorded as billable time. For example, questions about scheduling, getting copies of documents, or coordinating meetings and events can easily be handled by a legal assistant much more cheaply than talking to the lawyer every time.

(7) Understand the difference between legal advice and counseling. It is obviously critical that you communicate effectively with your lawyer, but keep communications to the point. Oftentimes clients complain or vent about the opposing party, the unfairness of the situation and/or the legal process, or the tactics of the other lawyer. It’s perfectly okay if you want to pay your attorney to be a sympathetic ear for you, but understand that you pay for your attorney’s time, and that you can very likely get a sympathetic ear elsewhere for free.

(8) Compromise. Litigation is expensive. Realize that “wins” come in varying shapes and sizes, and that negotiating from a position of strength borne out of effective and thorough preparation can lead to the best long-term outcome. Indeed, a lengthy lawsuit may not be the best long-term strategy even though you think might have a slam dunk case at trial two years from now. Winning the battle isn’t worth losing the war. Smart and tactical compromise can be a virtue, particularly when taking into account both the direct and indirect costs of litigation.

Patterson Bray has offices in Memphis and Nashville, Tennessee. Call us today at 901-372-5003.

March 14, 2016 In Business Litigation, Civil Litigation, Contracts

Insurance Company Bad Faith? Ask the Insurance Lawyer

What You Need to Know about Insurance Company Claims

The overwhelming majority of insurance claims are fairly handled and paid without complication. But, some are not. While there are a number of reasons why an insurance claim might be denied or why you might not get paid what you think you are owed, one thing is certain in Tennessee: An insurance company must handle your claim in good faith. If you think your insurer is acting in bad faith, consult with an insurance lawyer.

Tennessee Bad Faith Statute

If an insurance company does not act in good faith in handling an insurance claim, then it may be subject to bad faith penalty damages. Tennessee Code Annotated 56-7-105 says that if an insurance company’s refusal to pay a claim was not in good faith, then then the company may be liable for up to 25% of the loss amount, measured by the additional expenses incurred by the policyholder. So, if your loss is $100,000, you could recover up to an additional $25,000 if the insurance company didn’t act in good faith.

What is Bad Faith? What is Good Faith?

Every case is unique and it depends on the circumstances. That’s why you need to consult with an insurance lawyer. As a general matter, it is difficult to prove that an insurance company’s denial of a claim was not in good faith. The policyholder has the burden of proving bad faith and the following principles in Tennessee case law favor the insurance companies:

Delay in settling a claim does not constitute bad faith when there is a genuine dispute as to value, no conscious indifference to the claim, and no proof that the insurer acted from any improper motive.

If an insurance company unsuccessfully asserts a defense and the defense was made in good faith, the statute does not permit the imposing of the bad faith penalty. So, even if the insurance company loses or was wrong, it doesn’t necessarily mean that the company acted in bad faith.

Before joining Patterson Bray, I worked for almost ten (10) years at an insurance defense law firm representing insurance companies. I cannot recall a single time that I was not successful in eliminating the bad faith portion of a lawsuit before the case made it to trial. I would add that, in most cases, the bad faith claim was simply thrown into the lawsuit, as if an afterthought. I say these things to stress that it’s an unusual case when the bad faith penalty is actually applicable, but that does not mean you don’t have a claim for bad faith. Ask an insurance lawyer to be sure.

Unfair Claims Settlement Act

Tennessee also has what is referred to as the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act. While the Act does not create a private right of action, it does create standards and rules that insurance companies must follow when handling claims. The Act provides at least some level of guidance concerning activities that might be considered to evidence bad faith.

What to Do if You Suspect Bad Faith by Your Insurance Company

Read your insurance policy. Make sure that you are in compliance with the “Duties After Loss” section.
Keep good and organized records.
Ensure that all of your communications to the insurer are kind and courteous and that they exhibit cooperation.
Keep a timeline of relevant communications and events that support an allegation of bad faith.
Get an insurance lawyer involved sooner rather than later. Insurance policies are full of deadlines and there are specific procedures that are important in preserving a claim of statutory bad faith against an insurer.

Need an Insurance Lawyer? We can help.

Call Patterson Bray at (901) 372-5003 or email us here.

Visit our website to learn more. Our Memphis office is conveniently located at 8001 Centerview Parkway, Suite 103 Memphis, TN 38018, near the intersection of Walnut Grove and Germantown Parkway. We accept cases throughout Tennessee and Mississippi, including Memphis, Bartlett, Cordova, and Germantown.

February 17, 2016 In Auto Accident, Business Litigation, Civil Litigation, Personal Injury, Uncategorized

Can my Fitbit be used as evidence against me?

By: Erin Shea

As I was driving to work yesterday, I heard an advertisement for a Local News Story on Fox 13 about potential unintended consequences of using one of those trendy new fitness tracker devices, such as the Fitbit®. This piqued my interest for a couple of different reasons: (1) My husband bought me a Fitbit® for my birthday recently, and (2) Part of my job as a lawyer involves looking for information to either support or weaken a particular factual claim being made by someone in a lawsuit, and doesn’t a fitness tracker record accurate and factual information?

Using Fitbit® Data as Evidence in Court Cases

What could be the unintended consequence of using a fitness tracker? Relevant to my job as a lawyer, Fox 13’s story and this article discuss how fitness tracking data can make or break a court case.

I haven’t seen any reported appellate decisions in Tennessee yet discussing the admissibility of fitness tracking data at trial, but I’m sure they are coming. Also, even if the data never sees the inside of a courtroom, there are other uses for it, including using the information to secure other evidence or as a negotiation point during settlement talks.

For example, if a person in a personal injury suit is making a claim that they can no longer walk more than a few steps at a time, but the person’s Fitbit® data shows that the person is taking 20,000 steps a day, I would argue that the claim is being exaggerated. On a somewhat related topic, I will never forget an old case I worked on where the injured person claimed he could no longer run races, but his social media accounts showed several post-race photographs that were taken after the accident.

Moral of the Story

Don’t forget that your electronic devices, including fitness tracking devices like a Fitbit®, are collecting data and information about you. Think about how that data might be used to help or hurt you because you can be sure that the lawyers are!

Need a Lawyer?

Call me or any of the other lawyers at Patterson Bray at (901) 372-5003. We’d be glad to help you. We handle cases in Memphis, Cordova, Germantown, Bartlett, Arlington, Lakeland, Shelby County, and throughout Tennessee and Mississippi. If we can’t help you, we’ll point you in the right direction.

February 4, 2016 In Business Litigation, Civil Litigation, Contracts, General

Insurance Claim Deadlines May be Shorter Than You Think

Suppose your insurance company denies your claim – whether for a fire loss, water damage, theft, or storm damage. How long do you have to file a lawsuit against the insurance company? Well, it may not be as long as you think, so be careful! The best thing you can do to make sure you preserve your insurance claim case is to consult with an insurance lawyer as soon as possible.

Insurance Policies Can Shorten Time for Filing Suit

While an insurance policy is a contract, and the “regular” deadline (a/k/a the statute of limitation) on contract claims in Tennessee is usually 6 years, your homeowners policy almost certainly has a much shorter “contractual statute of limitations” provision hidden in the fine print. In most cases, that shorter contractual deadline is only 1 year, and sometimes even shorter.

Immunity and Loss Settlement Periods in an Insurance Policy

An insurance policy usually provides for a period of immunity, or loss settlement period, during which you can’t sue the insurance company. This is to give the company time to investigate your claim before having to respond to it. Many policies provide for 45-60 day periods. In some cases, the immunity period may expire before they actually finish investigating your claim, or before you receive a payment or denial. Because of this, Tennessee case law provides that your time to file suit begins to run following the “accrual of the cause of action” against your insurance company.

What does “accrual of the cause of action” mean?

The “accrual of the cause of action” against the insurance company occurs – and thus the clock starts ticking on your deadline – when the immunity period expires, or when the insurance company denies your claim, whichever comes first.

In some cases, depending on what the policy says, an insurance company’s immunity period may be extended if it continues to actively investigate a claim and request information beyond the time stated in the policy. It is critical that you consult with an insurance attorney to determine the applicable deadlines in your insurance claim case.

Important Dates in an Insurance Claim

If you have an insurance claim, keep all of your claim-related papers in one place. Look at your policy and figure out the loss settlement period. If you don’t have a copy of your policy, ask for one. Keep any letters or emails you send to or receive from the insurance company. Record, be aware of, and keep up with the following dates:

Date of loss
Dates of claim payments
Dates of correspondence or phone conversations with the insurance company
Date of Denial

Don’t Wait Too Late to Involve an Insurance Lawyer

Determining insurance claim deadlines can be complicated, confusing, and depends on a number of factors. The insurance company understands how these time frames and deadlines work, and because adjusting insurance claims and reading insurance policies probably isn’t what you do for a living, you are at a disadvantage, especially in a complex or large loss insurance claim.

Call us sooner rather than later if you feel like your homeowners insurance claim is not being handled or paid properly.

Insurance policy language is confusing and it doesn’t always mean what it sounds like.
Your insurance adjuster is not your advocate.
We know insurance law. We will apply insurance policy language to your advantage.
We understand how insurance deadlines work.
You’ve paid your premiums for all of these years. Don’t lose out on a technicality.

Let us help you with your insurance claim case. Call Patterson Bray at 901-372-5003. We have offices in Memphis and Nashville. Don’t wait too late and lose your legal right to recover.

February 3, 2016 In Auto Accident, Business Litigation, Civil Litigation, Contracts, Estate Planning, General, Government, Medical Malpractice, Personal Injury

Lawsuit Deadlines: How long do I have to file a lawsuit in Tennessee?

Why are there statutes of limitation or lawsuit deadlines?

In Tennessee, there are lawsuit deadlines called “statutes of limitations,” so it is important to speak to a lawyer as soon as possible if you believe you may need to file a lawsuit. If you wait too late, you may lose your ability to seek a remedy or recovery in court.

Statutes of limitation serve a number of purposes. They promote stability in personal and business relationships; they prevent undue delay in filing lawsuits; they help to avoid uncertainty in pursuing and defending old claims; and they help to ensure that evidence is preserved and not lost due to the lapse of time, fading memories, or death of witnesses or parties.

What time limit applies to my case?

It depends on what kind of case you have. Even our courts sometimes struggle with which statute of limitation applies. Generally, a court looks to the “gravamen” of the complaint to determine which statute of limitation applies. Think of the “gravamen” as the “real purpose” or the “main point” of a lawsuit.

The Tennessee Supreme Court, in Benz-Elliott v. Barrett Enterprises said that when determining the gravamen of a complaint in order to decide which statute of limitation applies, “a court must first consider the legal basis of the claim and then consider the type of injuries for which damages are sought. This analysis is necessarily fact-intensive and requires a careful examination of the allegations of the complaint as to each claim for the types of injuries asserted and damages sought.”

You may have multiple legal theories and claims available to you in your case, but those claims could have different statutes of limitation that will affect your ability to recover. Because this analysis can be difficult, and it is to your advantage to include as many viable claims for recovery as possible, you should consult an attorney as soon as possible to discuss your case.

Statutes of Limitation in Tennessee for Common Claims

Below are statutes of limitation for common types of claims. There are others, so make sure and consult with an attorney to make sure you understand what time limit applies to your case.

Personal injury or wrongful death – 1 year
Property damage – 3 years
Conversion – 3 years
Breach of Contract – 6 years
Fraud/Misrepresentation – 3 years
Legal or medical malpractice – 1 year
Consumer Protection Act claims – 1 year
Sale of Goods Contract Claims – 4 years
Slander (spoken defamation) – 6 months
Libel (written defamation) – 1 year

Exceptions

There are certain exception to the statutes of limitation in Tennessee, but you should never assume an exception will apply to your case. For example, if a person took active steps to keep you from discovering an injury or claim (i.e., fraudulent concealment), then you may have additional time to file suit.

Courts will not allow you extra time to file suit simply because you did not know the applicable statute of limitation, or because you suffered an injury but didn’t find out the full facts or extent of your damage until later in time. Consult with an attorney as soon as you think you have a claim.

Don’t Lose Your Ability to Recover. Call us today.

Statutes of limitations and lawsuit deadlines can kill your case before it even starts. If you think you may have a legal claim against someone, please call us today at 901-372-5003 or email us here. Don’t wait too late and lose your ability to file suit or recover damages. Let the attorneys of Patterson Bray help you today.

February 1, 2016 In Business Litigation, Civil Litigation, Contracts, Estate Planning, General

I No Longer Want to Own Property with a Partner – How Do I Break Up?

Imagine you and a partner purchase a rental property in the hopes of generating additional income. Or perhaps you jointly inherit some property. You own the property as tenants in common, meaning that you each own a ½ interest. You’re each responsible for ½ the property taxes and expenses, as well as ½ of any rental income.

A few years later, you decide you want out. The income (when there is any) doesn’t seem worth the headache, and in some years, you even wind up paying more than your share of the expenses because your partner can’t seem to keep a steady day job. The two of you don’t get along anymore and you really just want out. What can you do?

The law in Tennessee does not require you to continue owning property jointly with another person if you don’t want to. If you can’t reach agreement with your partner about an exit plan, then you can file what is referred to as a partition lawsuit. There are two ways a Court can partition, and it depends on the particular facts of any given case. You will likely need an attorney to help you navigate the particular circumstances of your case.

Partition “in kind”

If a Court partitions a piece of land “in kind,” it means the property will be physically divided among the co-owners – almost quite literally splitting the baby. An example would be if two people owned a two acre tract of raw land and the Court simply divided it in half, giving each person one of the two acres.

Partition “by sale”

A partition “by sale” is exactly what it sounds like. The Court will order a sale of the property and then distribute the money proceeds to the parties. The Tennessee Code provides that a party is entitled to a partition by sale if either (1) the property is situated such that it can’t be divided, or (2) when it would be manifestly to the advantage of the parties for the property to be sold instead of divided. For example, a Court can’t split a house and give each person half, so it would instead order the house to be sold.

Expenses and Distribution of Income

What if you paid more than your share of expenses prior to filing the lawsuit, or what if you don’t think the rental income was distributed properly? In a partition lawsuit, you can ask the Court to award you that money in addition to what you are owed for your ownership interest. The key to recovering this additional money is proving the amount you are owed. Hopefully, you have kept, or can obtain, records concerning your income and expenses associated with the property. In some cases, you might be able to obtain financial records during the partition lawsuit that may help prove what you are owed.

Settlement or Partition Lawsuit? We can help.

If you currently own a piece of property with another person and you’ve decided you no longer want to continue in the joint ownership, we can help you fashion a solution. Filing a lawsuit should not be your first step in any dispute, but a partition action is an available legal tool if an agreement can’t be reached. We are experienced at helping our clients negotiate resolutions without the necessity of filing a lawsuit; however, because we are trial attorneys, we know our way around the courthouse and are prepared to file and handle a partition action on your behalf, if necessary. Please call us today at 901-372-5003 if we can help you.

January 26, 2016 In Business Litigation, Civil Litigation, Contracts, General

Get it in writing: A handshake probably won’t do.

The Dangers of Unwritten Agreements

You’ve heard it before: “If it’s not in writing, it doesn’t exist.” While that is not technically true, we don’t recommend entering into an unwritten agreement or contract of any significance. If it is important to you or to your business, get it in writing. Unwritten agreements, or oral contracts, can be legally enforceable in Tennessee in certain cases, but they are extremely difficult to prove in court.

Contracts Required to be in Writing

According to a legal rule called the “statute of frauds,” there are some agreements that are required to be in writing in Tennessee, including:

An agreement to pay someone else’s debt
An agreement concerning the sale of real property or land
A lease with a term longer than a year
A contract that can’t be performed or concluded in a year
A contract for the sale of goods for over $500.00

What Should a Contract Say?

Any contract should contain the essential terms of the agreement. The contract should clearly spell out what each party is going to do in plain language. Say what you mean, and mean what you say. If you don’t clearly spell out your intentions in a contract, then you run the risk of having a judge decide what your agreement means. You wouldn’t believe the number of cases in Tennessee where courts have had to interpret contract terms and agreements because of drafting failures on the front end. Do you really want a judge telling you what your contract says?

Be Smart: Hire an Attorney During Contract Negotiations

Contract law and litigation can be complicated, but it doesn’t have to be. One way to avoid disagreements, misunderstandings, and the high cost of contract litigation is to involve an experienced lawyer during contract negotiations. Many people believe that hiring a lawyer during contract negotiations will signal distrust of the other party, but that is not true in today’s business world. It is common, and usually expected, that attorneys will be involved. We are often successful in obtaining favorable contract language for our clients that they would have never known to request had they not involved an attorney. It is sometimes a matter of knowing what to ask for, and we can help you with that.

We are not only experienced in drafting and reviewing agreements and contracts, but we are trial attorneys. Call us today at 901-372-5003 if you need help with a contract or agreement.