Author Archives: Finney Law Firm

• posted: Dec. 01, 2015
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Justin Whittaker

What happens when your previously reliable commercial tenant stiffs you on the rent?  If you are a commercial landlord in Kentucky, you’ve likely had to grapple with this question.  If you are a commercial landlord who has not yet faced this issue, give it time; you’re up next.  All landlords have a fundamental interest in securing a responsible tenant to occupy their property, the security of their property, and collecting rent for the use of their property.  In the event of a breach of a commercial lease, the last thing the commercial landlord wants to do is misstep in securing its rights.  Any misstep may result in landlord being left out in the cold on months of rent, and damage to its property.  These risks will rear their ugly heads if the commercial eviction is not handled properly.

In Kentucky, the commercial eviction procedure is known as a “forcible detainer” proceeding.  The purpose of a forcible detainer proceeding is to simply determine who has the right to possession of the commercial property at issue.  Forcible detainer proceedings arise if the commercial tenant hasn’t paid rent, or if it has otherwise failed to comply with other terms of the commercial lease.  In order to recover the money owed by the tenant for back rent, late fees, damages, etc., a landlord is required to file a separate civil action against the tenant.  In either case, the commercial landlord must act swiftly – and act correctly – to secure its rights.

Commercial landlords are required to provide proper written notice and an opportunity for the tenant to cure its breach of the commercial lease.  If the commercial tenant fails to cure its breach within seven days of proper notice, the landlord must proceed formally by filing a forcible detainer complaint to evict the tenant.  After the complaint is filed, the court will schedule a hearing.  In Kentucky, a representative of the landlord must appear at the hearing to offer testimony as to the landlord’s right to possession of the property.  If the judge grants a forcible detainer judgment, the tenant has seven days to either vacate the property or appeal.  At this point, the commercial tenant can either make plans to vacate the property, appeal, or try to make a deal with you.

Resolution at this point may sound great.  It is important, however, that in your eagerness to put the matter behind you, you do not give up your rights to continue collecting rent and enforcing the commercial lease.  If the tenant appeals the forcible detainer judgment ordering it to vacate, the court will require it to post a bond in the form of ongoing rent payments.  The court clerk will hold these funds until the appeal is resolved.

If the tenant does not file an appeal but also does not willingly vacate the property by the end of the seventh day, the landlord must obtain a writ of possession from the district court judge and ask the County Sheriff to enforce the judgment.  The Sheriff will require a fee for this service, and precise instructions as to the removal of the tenant, either by “put out” or “set out.”  The Sheriff is then authorized to physically remove the tenant and reclaim the property for the landlord.  You may be tempted to avoid the hassle and expense of enlisting the Sheriff’s services and resort to “self help” in evicting the deadbeat tenant.  It is important to understand the risks to the self-help approach.  Regardless, once you have successfully removed the commercial tenant, you will need to secure as much of the back rent as possible through the enforcement of a “landlord’s lien” on the personal property of the tenant.  It is critical that you differentiate between the value of your lien and the overall value of the tenant’s property.  While you are entitled to receive value for rent of your property, you are not entitled to convert the tenant’s property in excess of the value of your lien, lest you face a lawsuit for damages and attorneys’ fees from the tenant.

If you need assistance with these issues, please do not hesitate to contact Justin Whittaker at 859.344.1188.  Justin is also happy to help you prepare a commercial lease agreement.  You can email Justin at [email protected].

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

• posted: Nov. 23, 2015
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Matthew T. Cheeks

Has your practice done a HIPAA Risk Analysis lately?  Indiana provider pays $750,000 settlement for HIPAA violations.

Hacking and data breach incidences are increasingly common and have become a fact of life in modern business.  Regardless of the sector or industry, individuals rarely have to wait long before the next hack or breach grabs national headlines (e.g., government, banking, retail or healthcare).  The constant media attention and an increased awareness of the risks of identity theft have driven healthcare consumers’ concerns about the use and security of their electronic protected health information (ePHI).  This growing concern and the ease of electronically filing a Health Insurance Portability and Accountability Act (HIPAA) complaint via the U.S. Department of Health and Human Services Office for Civil Rights’ (OCR) online Complaint Portal have led to tremendous increases in the number of HIPAA complaints OCR receives.  For instance, there was a 16 percent increase in the number of complaints received between 2011 (9,018) and 2012 (10,457).  The number of complaints increased 24 percent in 2013 (12,974) and jumped 37 percent in 2014 when OCR received 17,779 complaints.  As healthcare consumers’ interest in ePHI has grown, so too has OCR’s enforcement efforts, and OCR publicly maintains that enforcement is a high priority.

The natural result of these factors is the increased risk to healthcare providers of potentially significant liability, particularly growing out of the failure to be proactive in guarding ePHI.  For example, OCR recently announced the $750,000 settlement of potential violations of HIPAA’s Security Rule and Privacy Rule against Cancer Care Group, P.C. (CCG), an Indiana-based group that includes 18 physicians.

CCG self-reported the theft of “computer server backup media” (e.g., back-up tapes) containing the unencrypted ePHI of 55,000 patients from a CCG employee’s vehicle in August 2012.  OCR’s investigation revealed that “CCG failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI help by CCG.”  OCR further found that CCG had “failed to implement policies and procedures that govern the receipt and removal of hardware and electronic media that contain [ePHI] into and out of a facility, and the movement of these items within the facility.”

While the impermissible disclosure of ePHI of 55,000 patients certainly played a role in the outcome of OCR’s investigation, it is clear that CCG’s failure proactively address the security of ePHI was a—if not the—significant factor.  OCR reinforced its emphasis on the Risk Analysis and Risk Management requirements (45 C.F.R. §164.308(a)(1)(ii)(A) and (B)) in the Resolution Agreement and required CCG adopt a “robust corrective action plan” subject to OCR’s review and approval.

Despite OCR’s efforts in recent years, the U.S. Department of Health & Human Services Office of the Inspector General (OIG), Office of Evaluation and Inspections, released two reports in September 2015 (found here and here) calling on OCR to strengthen its enforcement efforts regarding general privacy standards and security breach reporting requirements.  OCR agreed with the OIG’s reports, and indicated that it intends to do just that (the implementation of Phase 2 audits in 2016 will be part of these efforts).

Thus, all signs point to increasing risks for providers with respect to ePHI and the need to be proactive about the security of ePHI.  The unfortunate fact, however, is that policies and procedures—or lack thereof—similar to CCG’s are probably not uncommon.  Providers are too often reactionary, addressing these issues only after a breach for a variety of reasons (e.g., costs of risk analyses, costs of implementing recommended safeguards, or even a general unawareness of the need for the analyses).  Old adages often hit the mark and, when dealing with ePHI, an ounce of prevention is truly worth a pound of cure.

Matthew Cheeks is a trial attorney with Hemmer DeFrank Wessels PLLC.  His practice focuses on helping individuals and businesses solve complex problems through negotiation, mediation, arbitration and trial.  You can reach him at [email protected].

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

• posted: Nov. 12, 2015
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Kyle M. Winslow

Limited liability companies (“LLCs”) have become a popular business entity for individuals in Kentucky. One of the main reasons that Kentucky small business owners choose the LLC is because of the protection offered by Kentucky Revised Statute 275.150 – “no member…of a limited liability company…shall be personally liable by reason of being a member…for a debt, obligation, or liability” of the LLC. Generally, LLC members can take business risks and creditors cannot seek their personal assets should their business ventures fail.

However, the LLC protection is not absolute. “Veil piercing” is an equitable remedy that allows a court to impose personal liability on shareholders for a corporation’s wrongful acts. In Turner v. Andrew, the Kentucky Supreme Court stated that the doctrine can also apply to LLCs.

In 2012, the Supreme Court of Kentucky clarified the test for veil piercing in Inter Tel Techs v. Linn Station, LLC. While Inter Tel Techs discusses veil piercing in the context of a corporation, Kentucky law does not distinguish between corporations and LLCs when analyzing the equitable remedy. In Inter Tel Techs, The Supreme Court stated that in its determination of whether to pierce the corporate veil, trial courts should essentially resolve two dispositive elements: (1) domination of the corporation resulting in a loss of corporate separateness and (2) circumstances under which continued recognition of the corporation would sanction fraud or promote injustice.

So how does the veil piercing doctrine affect small businesses? In Inter Tel Techs, the Court noted that in assessing the first element above, courts give the most emphasis to several factors, one of which is the egregious failure to observe legal formalities.

In my practice, piercing the corporate veil has come up most often where small businesses fail to follow the legal formalities associated with the business entity. This can include failure to hold meetings, failure to keep records of important decisions, and failure to monitor the activities of its members. To avoid personal liability, LLC members should make sure that they know the ins and outs of their LLC’s operating agreement and strictly comply with the agreement’s provisions.

Our team at Hemmer DeFrank Wessels is ready to answer any questions that you may have about your operating agreement or corporate bylaws, or how the legal doctrine of piercing the corporate veil may affect your business.

Kyle Winslow is an attorney with Hemmer DeFrank Wessels PLLC. He helps business professionals solve problems in Kentucky, Ohio, and Indiana.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

• posted: Oct. 30, 2015
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Kyle M. Winslow

The construction industry is on the rebound in Kentucky and throughout the rest of the country. In northern Kentucky, our river cities are booming with various development projects. Nevertheless, in a good or bad economy, contractors and subcontractors encounter payment problems.

Kentucky’s mechanic’s lien statutes, found in Kentucky Revised Statutes (“KRS”) 376, provide protection to construction companies who furnish materials and labor on public or private projects.

While some of the statutes’ terms are interpreted liberally, Kentucky courts have consistently held that lien claimants must strictly comply with the notice requirements of KRS 376. Due to the demands of the construction industry, contractors and subcontractors routinely miss these deadlines and forfeit the leverage and security that accompany a mechanic’s lien.  The general notice requirements for private projects can be simplified into four steps:

(1) Preliminary Statement of Lien. The lien claimant should file a Preliminary Statement of Lien with the county clerk to secure priority over subsequently recorded liens. While the Preliminary Statement of Lien is not required to establish a valid mechanic’s lien, it protects the lien’s precedence. Since it’s not required, there is no deadline to file the Preliminary Statement of Lien.

(2) Notice of Intent to File Lien. Prior to filing the Lien Statement, subcontractors must notify in writing the owner of the property to be held liable or his authorized agent, of their intent to file a lien. This notification must be completed within 120 days on claims in excess of $1,000 (75 days on claims amounting to less than $1,000) after the last item of material or labor is furnished.

(3) Lien Statement. Lien claimants must file their Lien Statement with the county clerk within 6 months of the last day on which the lien claimant last furnished labor or materials. KRS 376.080(1) imposes strict requirements on the form of the Lien Statement.

(4) Notice to Property Owner. The lien claimant must send by regular mail a copy of the Lien Statement to the property owner at his last known address within seven days of filing the Lien Statement. Failure to follow this last requirement dissolves the lien.

In my practice, when a client anticipates payment problems, I immediately calendar all four steps on my personal calendar and on my firm’s litigation practice group calendar. I have forms for all four steps so when a deadline arrives, I’m prepared to take action. Should your company encounter payment problems, I’d encourage you to contact a construction lawyer familiar with the ins and outs of KRS 376. While many of the deadlines seem simple, they often involve complex factual issues.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

• posted: Sep. 23, 2015
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Scott R. Thomas

It’s a nice fall day and you sit down with a cup of coffee to go through your mail.  You see you’ve got a letter from the County Auditor and you hold your breath.  You open the letter and breathe a sigh of relief when you see the bold words “This is not a tax bill.”  You read on and learn that the county thinks your property has increased in value.  For about 30 seconds, you feel good, as you reflect on the wisdom of your investment.  Then it sinks in that your Ohio property taxes are going up.  Not just one year but every year after that.  The notice typically provides scant information about the process and what rights you have as a property owner.  Many property owners are unaware of their ability to fight the county’s determination.  The good news is that you have the tools to contest an unfair valuation.

Years ago, the value of your property would stay unchanged until a sale occurred.  An “arm’s length” sale between strangers is always the best evidence of a property’s value.  Ohio counties have gotten more aggressive in recent years to increase their tax base.  County auditors will now increase a property’s value on their records if they feel they have any justification for doing so, whether it be a comparable sale down the street or a “drive-by” appraisal by a county employee or independent contractor.

The first step is to seek a review by the County’s Board of Revision.  You begin this process by filing a Complaint with the Board.  That sounds difficult but it’s really just a form that requires you to identify the property and explain why you think the valuation is unfair.  That is, you need to tell the County what you think the valuation should be and why.  At this stage, only broad brush strokes are required.  The Complaint form is usually available online.  The Complaint must be filed by March of the following year.  For example, if you got a notice this week, your Complaint would need to be filed in March 2016.

The Board will set your Complaint for a hearing.  That hearing will usually be conducted in May or June.  The hearing will typically be conducted at a conference room at the county offices.  The usual players who appear are the County Auditor, the County Attorney, the County’s appraiser, and staff members.  An attorney for the pertinent school district will often appear as well.  School districts jealously protect the auditor’s valuations because they get the lion’s share of these revenues.

Convincing the Board to overturn the Auditor’s value is a tall order.  To prevail, you have to convince the Board that if they affirm the Auditor’s opinion, their decision will be reversed on appeal.  To get that kind of traction, you must present evidence at this hearing to support your opinion of the property’s value.  You are not required to have an attorney at this hearing but you have little chance of success unless you hire an appraiser.  The appraiser you select must not only prepare a report but also be willing to testify at the hearing.  Without testimony—and the opportunity to cross-examine your appraisal, the Board may reject the appraisal report itself.  Consequently, you want to be careful to select an appraiser who not only knows how to value your property accurately, but who can also communicate that valuation to the Board effectively.  You need to work closely with your appraiser to determine the best strategy for calculating the value of your property.  While there may be different ways to get to your number, choosing the Cost Approach, the Sales Comparison Approach, or the Income Capitalization approach may have strategic consequences you need to consider in advance.

You will also have an opportunity to examine the Auditor’s evidence.  An attorney accustomed to these proceedings can be helpful in this regard.  The time a county takes to render a decision varies but you can typically expect a decision within 30 days.  If that decision is not in your favor, you can ask the Board of Tax Appeals (BTA) to review the case.  You only have a short time to make this choice.  Hiring an attorney at this stage is usually critical, if only because of the intricate procedural requirements imposed by the BTA.  A misstep on any of these procedural issues may result in the loss of your appeal on a mere technicality.  The BTA may conduct a hearing in Columbus but it will usually decline to hear evidence that was not presented to the Board of Revision.  This underscores why it is so important to present your entire case to the lower Board.  A property owner who saves the best witness for the BTA may find that witness never gets heard.  Because the BTA operates state-wide and has no connection to the County, some property owners feel they get their first objective consideration at this stage.

The BTA usually takes much longer to render a decision than the Board of Revision.  The tax bill based on the increased valuation will usually come due while your BTA case is still pending.  In this situation, your attorney can often negotiate an arrangement with the County to ensure your account is not deemed delinquent.

If the BTA decides the case against you, the decision may be appealed to the Ohio Supreme Court.  As before, the Supreme Court’s review will be limited to the issues before the BTA.  The Supreme Court will refrain from disturbing a BTA decision if there are reasonable grounds to support it.  That is, they will not intervene to say the BTA should have given more weight to your appraiser’s testimony than the County’s.  Still, the Supreme Court will carefully review the BTA’s decision to ensure it conforms to Ohio law and judicial precedent.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.