Ed Patton Presenting on How the USMCA will Affect North American Trade

Edward Patton will be presenting on Friday, July 26 at the at the City of Mentor’s Seminar: How Will the USMCA Affect North American Trade? The USMCA (United States-Mexico-Canada Agreement) is slated to replace the 25-year-old North American Free Trade Agreement (NAFTA) once approved by legislatures of the three participating countries – Canada, Mexico and the United States. This program will address changes that may impact your business and will also provide an overview on principal documents required for export to Canada and Mexico. For more information or to register, click here.

On March 7, 2019, the Department of Labor announced its Notice of Proposed Rule Making to increase the “white collar” overtime exemption threshold from $23,660/year to $35,308/year (or $679/week). https://www.dol.gov/newsroom/releases/osec/osec20190307

This increase is projected to impact more than one million Americans, making them eligible for overtime compensation for all hours worked over 40 in a workweek. Once the rule is published in the Federal Register, there will be a 60-day public comment period.

Communication: “Who gets the china?” (OK, but who actually wants the china?)

By:  Dan McGuire

This is part 2 of a series breaking down the process of helping clients set up their Wills by breaking the issues down into smaller, individual topics, enabling the adviser and client to take the necessary steps, and get the plan moving.

People generally think that their family will not fight over anything after they die. That may be the case in a lot of situations, but in others, long dormant rivalries and issues suddenly surface. Perceived slights become the basis for litigation. A thoughtful approach to the estate plan can minimize that risk. The key, of course, is communication, both with the client, and the client with his/her family.

Simply asking family members what each would like to receive, or expects to receive upon the client’s death, can mitigate many issues. Without those conversations, the client may be wrestling with deciding who should get the painting in the dining room when no one really wants it in the first place. That may be heartbreaking to the client but knowing in advance may allow the client to find someone who really would appreciate getting it. In fact, family members may want things the client never even considered such as holiday decorations, old gifts from the child that the client may still have but forgotten the source, or other items that may hold sentimental value to a particular family member. It is also better for the client to find out in advance that more than one person has set their sights on one specific object!

Often, part of the initial discussion with a client who wants to start defining the estate plan involves giving the client homework: “Talk to your family and find out what THEY want from you.”

Our next topic will be a discussion of how to address the distribution of the personal property the client has discussed with the family.

Our attorneys are always ready, willing and able to meet and discuss all of those questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small bites, the problem that used to lead to procrastination and uncertainty has been addressed and resolved. Learn more about Mansour Gavin’s Estate Planning & Probate group.

By: Brendon Friesen

Copyright law immediately protects a creator’s original work once reduced from a mere idea to a “medium of expression” such as artwork, novels, photography and video. Among other rights, the creator has the exclusive right to copy it. While copyright exists at common law, if you want the full protection and remedies offered by the U.S. Copyright Act you must deposit your work with the Copyright Office and pay a fee. Many do not take that extra step to protect their original work.

The Supreme Court shook the copyright world on March 4, 2019 with its decision in Fourth Estate Public Benefit Corporation v Wall-Street.com. Justice Ruth Ginsberg issued the decision, finding that copyright owners must register their copyright with the U.S. Copyright Office before bringing a lawsuit to stop infringement. Prior to the Fourth Estate decision, Circuit Courts were split on the issue – some of which allowed copyright owners to apply for registration at the time of filing the lawsuit. The wait-and-see approach became common practice and, according to Justice Ginsberg, defeated the purpose of the Copyright Act and intent of Congress. The Court believed that forgiving the failure to register de-incentivized copyright owners to take the required steps to register their copyright at, or before, the time of publication. The decision, while perhaps consistent with the language of the Copyright Act, is problematic if you have not already taken steps to register your copyright. The current review period of the Copyright Office from submission to registration, assuming there are no problems faced in the process, can be months, not days or weeks. That is, the copyright owner must wait months to bring a lawsuit to stop an infringement.

What does this mean for you? That original work you created is always at risk of infringement. If you have not taken steps to register the copyright, given the Fourth Estate decision, you’ll be sitting on the sidelines before you can get in the game to defend your turf. All the while, the bad guys are cashing in on your hard work and just might get away with it for not more than a slap on the wrist. Also keep in mind that certain statutory damages, up to $150,000 for each violation plus attorney’s fees, are not available if the infringement occurred after publication and before your effective date of registration. So take that extra step and get your copyright registered with the U.S. Copyright Office.

Charles Brown (former chief magistrate of the Cuyahoga County Probate Court) will be the guest speaker at the upcoming Cleveland Association of Paralegals, Inc. Student Workshop.

Saturday, April 13, 2019
Stautzenberger College
Brecksville, OH
9am-noon (registration will open at 8:30am)

For more information, visit https://www.capohio.org/home-page or RSVP by April 6th, 2019 to secretary@capohio.org.

By:  Josh Morrow

The long-awaited Ohio Supreme Court decision in Ohio Northern University v. Charles Construction Services, Inc., finally hit the books in the last quarter of 2018, sending a clear message to Ohio contractors that their commercial general liability (“CGL”) insurance policies likely will not cover damages caused by their subcontractors’ defective work.

Contractors were already made aware of their lack of CGL coverage for their own defective work, thanks to the Ohio Supreme Court’s ruling in the often discussed Westfield Ins. Co. v. Custom Agri. Sys., Inc. decision from 2012. However, the question arose in ONU as to whether the defective work of a contractor’s subcontractors could be considered an “occurrence” under the contractor’s CGL policy, thus deeming it a covered event. The Court held that the subcontractor’s defective work is not “fortuitous” and therefore not “accidental.” As such, the defective work was not a covered “occurrence” under the general contractor’s CGL policy.

The decision deviates from the position in the majority of states, which have found an event to be an “occurrence” pursuant to the general contractor’s CGL policy language. Time will tell as to how the Ohio legislature responds to the ONU decision, if at all. Until then, contractors should address the issue with their carrier and look to purchase a rider or other form of an endorsement to their current CGL policy in order to fill the gap in coverage.

Perhaps more importantly, contractors should also conduct thorough due diligence when selecting their subcontractors, ensuring only those subs who are qualified and reputable provide work. Significant and consistent on-site inspections should then follow once a subcontractor’s work commences.

While uncertainty remains as to the extent of the ripple effect caused by the ONU decision, one thing seems to be a given. The decision will impact Ohio contractors’ bottom line, as they will now be forced to address their subcontractors’ defective work purely out of their own pocket without the assistance of their carrier. Alternatively, contractor insurance premiums will likely rise in connection with any rider that may look to provide coverage for such work.  Contractors should consult with their insurance agents and lawyers regarding the impact of the decision, both short and long term.

By:  Katie Weber

A: It’s still not too late! Here’s the background: In Cuyahoga County, the County Fiscal Officer is responsible under Ohio law for the valuation of all real estate in its respective county. Real estate is reevaluated in two cycles, the sexennial reappraisal (every six years) and the triennial update (every third year between reappraisals). The key difference between these two reevaluation cycles is the scope and methodology. Although both use an analysis of recent comparable sales to set value on a parcel-by-parcel basis, the Sexennial Reappraisal requires all property to be personally viewed.

Proposed Value Notices were sent out in Cuyahoga County this past July that provided the new proposed value that was determined during the reappraisal. This notice should have provided a “Market Value” and an “Assessed Value.” The “Market Value” is defined as the price your property would likely sell for in an open and competitive market between a willing buyer and seller. “Assessed Value” on real estate is set at 35% of market value by the State of Ohio. Assessed Value is the value of taxable property to which the tax rate is applied to compute the amount of property taxes.

Cuyahoga County allowed informal appeals. However, regardless of whether an informal appeal was filed or the outcome of the informal appeal, property owners are entitled to challenge the tax evaluation through the formal appeal process with the Cuyahoga County Board of Revision. Tax Evaluation Complaints are accepted between January 1, 2019-April 1, 2019 for the 2018 tax year.

In order to successfully challenge an increased appraisal, evidence will need to be submitted that shows the property was reevaluated incorrectly. A recent sale that is below the reevaluation is strong evidence in addition to evidence regarding some form of damage or destruction that impacts the property’s value. Otherwise, a professional appraisal of the property may need to be done in order to have sufficient evidence to successfully challenge the reevaluation.

If you think that the county has incorrectly evaluated the value of your property, give us a call in order to discuss in more detail whether you could bring a successful appeal.

By:  Jen Horn

What happens if you’re a trademark licensee – and your licensor declares bankruptcy? The U.S. Supreme Court will finally be tackling that question in 2019, as it has agreed to hear the case Mission Product Holdings, Inc. v. Tempnology, LLC.

The issue before the First Circuit in Mission Product Holdings was whether a trademark licensee could take advantage of rights that were granted to intellectual property licensees under Section 365 of the Bankruptcy Code. Currently, trademarks are not included in the defined categories of “IP” that receive bankruptcy protection.

Under the Bankruptcy Code, if the debtor (the licensor) rejects an IP license, the licensee has the following options: it can (a) elect to treat the license as terminated, and file a proof of claim for damages, or (b) it can retain its rights to use the IP under the license for the term of the license, as well as any remaining renewal terms that are provided.

To date, lower courts have been split on whether a trademark licensee can continue to use the trademark regardless of a licensor’s bankruptcy filing. Some courts have ruled that it is not permissible, and Congress did not intend to protect a trademark licensee the same way that licensees of other forms of IP, such as patents, are protected. Other courts, though, have held in favor of the trademark licensee.

In re Tempnology ruled against the trademark licensee, with the First Circuit stating that the licensor should be released from any continuing obligations that would interfere with its reorganization. The First Circuit further ruled that it should be up to Congress to expand Section 365 of the Bankruptcy Code to include trademarks.

With the Supreme Court agreeing to hear the appeal, however, parties should finally receive guidance on what happens to a trademark licensee if a licensor rejects the license agreement because of a bankruptcy filing. Regardless of what the Court decides, the ruling is certain to have an impact on the rights and obligations of both trademark licensors and licensees. Stay tuned for updates!

Make it a New Year’s Resolution to Refresh

(or Finally Address!) Your Will

By:  Dan McGuire

Everyone talks about the need to get a Will done (or updated), but many people never take that next step. Perhaps it is the unwillingness to face our own mortality. Perhaps it is just a general lack of knowledge as to what “getting a Will done” involves that makes the individual procrastinate further. If we break down the estate planning process into smaller bites, it may be easier to understand what is involved, and to take that first step, and get the process moving.

Helping clients establish their estate plans is a process that requires diving into a lot of detail: family dynamics, the financial situations of our clients, and the financial situations of their intended beneficiaries, to name a few. It is not a simple “off the rack” solution. You can’t put a suit on someone who is not looking for one. And you certainly should not put one on someone who does not need one.

The main question for a client to answer in getting started in the estate planning process is: “What do I want to accomplish?” Fact finding and organization of thought is imperative. We live in a world of blended families; fast pace; “no time” to sit back and plan years ahead, let alone tomorrow’s activities. Everyone has these issues to address, and delay does nothing to prevent the potential for confusion, disagreement and pain. We assist our clients in defining their situation and goals and designing a plan to accomplish those goals. But that is not where the process ends. We must then implement the plan to ensure those goals are actually met.

Our first goal, then, is to help our clients define what they want to accomplish with their estate plans. As the process continues, our client’s needs and concerns are revealed and developed, which serves to directing the attorney to consider the relative benefits of each sort of plan that might be employed. Ultimately, the client must weigh the cost and benefits of each part of the proposed plan.

So, how does a client actually develop an understanding of what a Will does?

Let’s start with what probate “is” and what it covers. Probate courts cover a lot of subject matters, from the guardianship of minors or incapacitated adults to the process of administering the estates of those who have died, and many other specialized areas. Let’s focus on the administration of a person’s assets after death.

When a person dies, the assets that the person owned individually are what pass through the probate process. So, a car or bank account or house that is in the client’s sole name are included.

OK, then, what does NOT pass through the probate process? Property that does not go through the probate process includes (for example) property owned by the client jointly with another person. So, a bank account or house owned jointly by spouses is not a probate asset.  Similarly, an asset for which there is a beneficiary designation (such as an insurance policy, or IRA, or payable on death bank account) are not probate assets, because that “contract” with the insurance company or investment company or bank defines who is to get the property when the client dies.

When you take OUT the non-probate property, what is left is what is covered by the probate process. And THAT is what is covered by the client’s Will.  If there is no Will, it is distributed according to the state’s law of descent and distribution.

If you want to control who gets how much of all of that property, whether it is probate property or non-probate property, you need to revisit WHAT each asset is, HOW each asset is titled, and IF there is a co-owner, or a beneficiary designation. When all of that is assembled, the client has to determine if that is the plan the client really wants in place. If the answer is anything other than an unqualified “Yes!” then it is time to take action.

Our attorneys are always ready, willing and able to meet and discuss all of those questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small bites, the problem that used to lead to procrastination and uncertainty has been addressed and resolved.