As we approach our 10th anniversary (more on that to come later), here are the accomplishments and market position of Finney Law Firm, LLC and Ivy Pointe Title, LLC by the numbers.

  • 17 attorneys.
  • 9 paralegals.
  • 3 office locations.
  • 3 wins at the U.S. Supreme Court.
  • 5 wins at the Ohio Supreme Court.
  • More than 18 wins at the Federal and Ohio Courts of Appeals.
  • 8 certified class actions.
  • 13,652 Tweets (now, “X”s).
  • 867 blog posts.
  • 63 newsletters.
  • 9,794 successful real estate closings (est.).
  • $56 million in property tax savings (est.).
  • 73 civil rights cases and taxpayer actions.

Thanks for being a part of it!  Much more to come!

Many people have become familiar with the concept of “reasonable accommodation” under the Americans with Disabilities Act (“ADA”). Basically, the law requires employers to “accommodate” the needs of a disabled employee if it can be done reasonably, and without causing an “undue hardship” to the employer.

Less well-known is the employer’s duty to accommodate the religious beliefs of its employees. This duty arises under Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of such characteristics as race, color, sex, and religion.

The classic example of a religious accommodation case under Title VII is whether an employer must excuse an employee from working on their Sabbath day if their religion prohibits it. As in the case of the ADA, the law requires employers covered by the Act to reasonably accommodate the sincerely held religious beliefs of an employee if it can be done without causing an undue hardship for the employer.

But what constitutes an “undue hardship“? If providing an accommodation would cause some inconvenience, difficulty, or expense for an employer, how do we determine whether it is significant enough to be considered an “undue” hardship under the law? How much hardship is “too much”?

Recently, in a case called Groff v. DeJoy, the United States Supreme Court provided some guidance on this question. In doing so, it significantly increased the burden of proof employers must meet in order to show that a proposed accommodation of an employee’s beliefs would impose upon it an “undue hardship.”

Previously, the Court had suggested that any hardship that was more than “de minimis“ – meaning, “barely noticeable” – was enough to constitute an “undue” hardship in the context of a reasonable accommodation. This was a pretty low burden for employers to meet. In Groff, however, the Court held that the employer must meet a significantly higher burden. Specifically, employers must be able to show that a proposed accommodation would impose a burden that is “substantial,” such as by causing the employer to incur “substantially increased costs,” if it wanted to deny an accommodation on the basis of undue hardship. If it cannot show a “substantial“ hardship, then the employer must ordinarily accommodate the beliefs of the employee.

While the exact contours of this definition are still somewhat unclear, the Court is certainly saying an employer must now show much more than a “minimal” hardship in order to legally deny a requested accommodation of an employee’s religious beliefs.

Both employers and employees should be mindful of this new standard, and should seek competent employment counsel for guidance when these issues arise.

Although there is a lot of conversation and worry regarding the issue, estate and gift taxes do not affect most households.

In Ohio, there is currently no estate taxes for state taxation purposes.  The Ohio estate tax was repealed effective January 1, 2013.

There is a federal estate and gift tax that is 40% on assets subject to the tax; however, there is a large exemption that covers the average household.

The estate and gift tax exemption is the amount of money that can be transferred without having to pay estate taxes.  For 2023, the estate and gift tax exemption is $12.92 million individual, and $25.84 million for a married couple.  There will likely be a substantial reduction at the end of 2025. Unless new legislation is passed, the estate and gift tax exemption is scheduled to sunset back to the 2017 exemption amount (indexed to inflation), and will be approximately $7 million per individual, and $14 million for a married couple, depending on inflation over the next two years.

If your wealth exceeds your available estate and gift tax exemption, there is an opportunity to make gifts using the higher exemption amount prior to the sunset.  For individuals or couples close to the exemption amount after the sunset, it makes sense to explore options in order to try to avoid making the federal government a beneficiary of your estate.

As real estate attorneys and licensed Ohio title insurance agents, we must constantly be on the lookout for the latest scheme to defraud buyers, sellers, lenders and others in real estate transactions.  We have already written about ever-persistent attempts at wire fraud.  (This one is never going away, we fear.)  But yet another fraud that is borne from the bountiful information available on and the anonymity of the internet is on the rise: Seller impersonation schemes.

According to one of our underwriters, First American Title Insurance, Seller impersonation schemes have increased 73% in 2023.  We personally have seen this attempted — but caught — to two separate commercial Realtor clients.

Here’s how the scam works, according to First American:

  1. Scammers search public records to identify real estate that is free of a mortgage or other liens. These often include vacant lots or rental properties. The identity of the landowner is also obtained through these public records searches.
  2. Scammers pose as property owners and contact a real estate agent to list the property for sale. All communications are through email and other electronic means and not in person.
  3. The listing price of the property is typically set below the current market value to generate immediate interest in the property.
  4. When an offer comes in, the scammer quickly accepts it, with a preference for cash sales.
  5. The title company or closing attorney transfers the closing proceeds to the scammer. The fraud is typically not discovered until the time of recording of transferring documents with the applicable county.

The natural reaction of a Realtor or buyer is: “that it’s the job of the closing attorney or title agent to ascertain the true identity of the seller,” but in the cases of limited liability companies and corporations, there typically is no public information at all (including the Secretary of State’s records), to ascertain the true owners and officers of these entities.  In the case of individual sellers, if they are shipping to Ohio a notarized deed signed out of state, it is possible that no one even asked for their I.D.

Thus, not only is it not negligence on the part of the attorney or title agent to fully ferret out the “authority” question, it’s something that’s not even possible in many instances.  In short, it’s one of the inherent risks in real estate transactions.

Thus — and it sounds self-serving to say this, but it’s true — one of the only sure ways a buyer can protect himself against his scam is to purchase an Owner’s Policy of Title Insurance at the time of the acquisition.  (And, no, simply buying coverage for the lender is simply insufficient — it is in fact NO COVERAGE AT ALL for the buyer).  In the above scenario, a non-fraudulent buyer who purchases an Owner’s Policy is covered if they fall victim to this scam.

__________

We are tremendously proud of the title presence we have in Ohio and Kentucky through Ivy Pointe Title.  Our residential division headed by Rick Turner (513.943.5660), and our commercial division headed by Eli Krafte-Jacobs (513.797.2853) are — as our tag line says — “accurate and on time, every time.”  They are here to protect you from these kinds of scams and schemes.  Let us know how we can help you safely close your next transaction.

Image

Our own Chris Finney will be speaking on a legal panel — Legal Issues Forum – Avoiding Legal Nightmares — at the Ohio Association of Realtors convention to be held in Cincinnati on Wednesday, September 13, 2023 at the Hyatt Regency in Cincinnati.

The planned topics for the program — in addition to panel discussion and Q & A from the Realtors in attendance — include (a) Avoiding Scams, (b) Taxes can be Taxing, and (c) Disclosure issues.  Mr. Finney will be teaching with Cincinnati attorneys Chip Brigham and Roccina Niehaus.

For both commercial properties as well as single family homes, owners have flooded us with inquiries about their notices from County Auditors in Hamilton, Butler, Clermont and Montgomery Counties as to new property valuations.  We can’t imagine the number of calls the County Auditors must be getting.

A few guideposts for you:

  • First, read this important blog entry that essentially tells you that the first 30% of the valuation increases in southwest Ohio will not result in an increase (or at least not a significant increase) in your actual tax bill.
  • Second, Auditor’s property valuation is not some magical number — for the January 2024 tax bill, it is to be the fair market value as of January 1, 2023.  Thus, if your property was worth more then than in the prior valuation period, you should expect a valuation increase — perhaps one even above average for all properties in the marketplace.  Some clients seem to think that since valuations were less than what they thought the property was actually worth in the past, the Auditor’s valuation process is supposed to yield a lower number.  Well, it’s not.
  • Third, if your property was purchased since the last triennial valuation date (January 1, 2020), the sale price likely will be reflected in the valuation.  As this blog entry addresses, a recent arm’s length sale essentially — and largely irrebuttably — IS the value by law.
  • Fourth, if your property falls in one of the gazelle categories of properties whose values have leaped ahead of the market — single family homes, warehouse and industrial properties, and apartment buildings — you should both celebrate your good fortune and expect a bigger tax bill as a result.
  • Fifth, on the flip side, if you are a victim of the weak office market or the mall or downtown retail market weaknesses, you should should see some tax relief in the January tax bills.
  • Sixth, gas prices are up, grocery prices are up, car prices are up.  You have not had a valuation increase in three years.  Wouldn’t you expect your tax bill would rise some, at least modestly?
  • Seventh, for both buyers and sellers in today’s market, the looming valuation increases create both a possible problem and an opportunity as to contractual tax prorations for sales between now and January when the new — very different — valuations come out.  Read here for more detail on this.
  • Eighth, remember, the Board of Revision process to challenge property valuations is a two-way street.  If your property truly is undervalued, you risk an increase.  Cautiously keep in mind the upward dynamics of the real estate market over the past three years.  You could wind up with an increased valuation as opposed to the sought reduction if you overplay your hand.
  • Finally, I had a client recently ask me “why would single family home valuations be increasing in Cincinnati?” and I swear he must live under a rock.  I responded, “haven’t you seen newspaper articles explaining that Cincinnati has had one of the hottest housing markets in the nation since the start of COVID?”  The response, “ummm, no.”  It is surprising since we deal with this every day, and to some extent it is just denial of the obvious fact that we are blessed in Cincinnati with a fantastic housing and commercial real estate market.  Enjoy it while it lasts!

If, after reading this and the prior blog entry on the new valuations coming out in January, you still have tax valuation questions, please contact me (513.943.6655) or another member of our tax team.  We are glad to help.

As recently as 2018, just half of the country’s small businesses had a website. But today, in the aftermath of pandemic-era lockdowns and closures of physical plants, around 95 percent of small businesses have some form of online identity. The internet offers powerful tools to present your products, generate revenue and provide customer service. However, taking full advantage of an internet presence requires devising new ways to deal with the public, including adoption of a terms and conditions agreement.

Also known as terms of service (TOS), a terms and conditions agreement outlines the rules governing your website or app and defines the relationship between you and your users, who implicitly agree to the terms and conditions.

The TOS should be crafted to fit the types of merchandise and services that your business offers, but certain provisions are generally advisable. Here are seven clauses that you should consider having:

  • Limitation of liability — You can include disclaimers designed to protect your business from being held liable for certain losses suffered by users, such as data loss, malware infections and other mishaps outside your control. You can also state a maximum amount of damages for which your company can be held liable.
  • User code of conduct — Any site or app that allows users to post content, such as reviews or comments, should have a code of conduct. It should also state the consequences of posting unacceptable content, such as account suspension or termination. The code can explain that you have the right, but not the obligation, to remove offensive user posts.
  • Governing law clause — This tells users that if they file a legal claim against you, it will be governed by the laws of the state you specify.
  • Intellectual property clause — This prohibits the use or distribution of your company’s name, logo, domain name, trademarks or copyrights without your permission.
  • Payment and refund procedures — The TOS should clearly explain the payment methods you accept, the consequences of non-payment and your policy for issuing or refusing to issue refunds.
  • Termination clause —This reserves your right to delete a user’s account if they violate the terms of service.
  • Cookie usage — The TOS should explain how your site or app uses cookies to track users and to provide them with relevant information. It should also explain users’ rights to limit or prevent use of cookies.

There may be other clauses you’ll want to include, such as one setting out a procedure for conflict resolution. A qualified business attorney can analyze your situation and draft a TOS that is best suited to your needs and objectives.

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.

In the category of “you learn something new all the time,” this week I learned something new about Remote Online Notaries (“RONs”) used for real estate closings.

The scenario was that a seller was unaware until he reached the closing table that the signature of his wife — married since the house was acquired — was needed on the deed in order to release her rights of dower.  Unfortunately, the wife was (a) a non-citizen of the USA, (b) she had a green card and had resided in the US for years, and (c) was physically located in Germany as of the time of the closing.

In the days before RONs, the only option was (a) email the deed to the signer and have them print it out in the remote jurisdiction (usually on funny-sized paper), (b) make an appointment at the U.S. Embassy for an overseas equivalent of a notary (or acknowledgement) (typically you can’t just drop in unannounced), (c) wait for that  appointment and (d) Fed Ex the deed back to Cincinnati.

The wife was able to get a quick appointment at the U.S. Embassy and would be able to get a deed back to Cincinnati about five days after the initial closing (even including an intervening weekend).  Unfortunately, the buyer just could not wait the five days and was throwing a fit, demanding thousands of dollars of concessions for (what we saw as) a relatively short delay.

So, RON to the rescue, right?

Not so fast.  The title underwriter’s (the guys who ultimately make the call as to whether we can close or not) first reaction was “so long as she is a US citizen, we can use a RON closing.”  I replied, “well no, in addition to being out of the country she is not a US citizen.”

Digging deeper (which we appreciate our title underwriter doing), it turns out that the “US citizen” thing is not a bright line test.  Rather, RON closings use sophisticated Knowledge-based Authentication (“KBA”).  These are whose odd security questions that pull and query minute details from your past (many times when I am asked a KBA question, I don’t even know the answer, even though the question is about something I should know!).  Well, as it turns out, those KBA questions are primarily pulled from information contained deep in your credit report, and — if your contacts to the US and its credit-reporting system ae sufficiently robust — RONs can possibly work for non-US citizens, including those who at the time are overseas.  (You actually find out “if it works” during the execution of a RON closing.)

So, the closing was saved — RON got it done within hours of the first phone call.  And I learned more about RON, citizenship and what “KBA” is.

#MakingADifference

 

You expect your lawyer to represent you effectively and to work hard to achieve the results you want. However, the fact that the lawyer fell short of your expectations doesn’t automatically mean you can sue for legal malpractice. Also known as professional negligence, malpractice is limited to situations where an attorney does not act according to the accepted standard of professional care. The lawyer might do something that a reasonably competent lawyer would not have done in a similar case or, conversely, might fail to do something that should have been done. In addition, the act or failure to act must have harmed the client in some way.

The following are some of the most common examples of legal malpractice:

  • Commingling funds — This means the attorney or law firm failed to keep client funds in accounts separate from business accounts.
  • Lack of experience or training — Lawyers cannot know everything about every area of law, so they are obligated to take only those cases they are competent to handle. A corporate lawyer who has no experience in family law could make critical mistakes in a divorce case.
  • Missing deadlines — Attorneys are expected to adhere to all deadlines imposed by law and by courts or other tribunals. Among the most critical deadlines are statutes of limitations that set time limits on certain claims.
  • Not knowing the facts or applicable law — Lawyers must take the time to learn the facts and laws applicable to each case in order to represent the client’s interests thoroughly and effectively.
  • Fraud or misrepresentation —Lawyers must disclose to clients all material information about their cases and do so truthfully. Lawyers also have a duty of candor and honesty to courts and tribunals, as well as to other parties and lawyers.
  • Failure to communicate — Lawyers have a duty to keep clients informed of what is happening in their cases so the clients can participate in making informed decisions. 
  • Improvident acceptance or rejection of settlements — Lawyer should not accept settlement offers that are not in their clients’ best interests, nor should they reject settlements that might be beneficial. Failure to discuss settlements with clients can also constitute malpractice.

Legal malpractice claims can be challenging to win. You have to prove that you would have achieved a benefit if your attorney had adhered to the proper standard of professional care. This is known as a “case within a case,” since it means presenting evidence sufficient to support a favorable outcome in the underlying matter. The lawyer you retain for your legal malpractice claim should also have familiarity with the area of law involved in the original case.

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.

Dividing property is one of the most important and potentially contentious aspects of business partners falling out and going their separate ways. A business divorce requires that the company be fairly valued so that all or part of it can be sold, whether to insiders or to outside buyers.

A business valuation analyzes all areas of the company to determine the worth of its various departments and of the entity as a whole. Professional evaluators look at such as elements as the company’s capital structure, its management, the market value of its assets and its future earnings potential.

There are numerous ways to value a company during business divorces. Some of the most common methods are:

  • Market capitalization — The value of a public company typically is calculated by multiplying the company’s share price by the number of shares outstanding. If the price is $50 and there are one million shares outstanding, the company’s value is $50 million.
  • Times revenue — A multiplier is applied to the revenue the company has generated over a certain time period. The multiplier varies by industry. A tech company might be valued at 5x revenue while a service company might be valued at 1x revenue.
  • Earnings multiplier —The company’s price-to-earnings ratio is adjusted to account for current interest rates. This is often more accurate than the times revenue method because the earnings multiplier is based on profits.
  • Discounted cash flow — This is similar to the earnings multiplier method, except that the company’s cash flow is calculated taking inflation and other market risks into account.
  • Book value — This is the company’s total assets minus its total liabilities as shown on its balance sheet.
  • Discretionary earnings — This method, often used for valuing small businesses, takes gross earnings and adjusts them for depreciation, interest expense and non-operating and non-recurring income.

When business owners are engaged in a split up, it is to be expected that the choice of valuation method will be a point of contention. Different owners will likely choose their own evaluators, with each employing a different method. If the owners can’t agree on a selling price, some form of alternative dispute resolution, such as mediation, may be used to arrive at a settlement.

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.