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What To Do if You’re Involved In an Auto Accident

Posted Wednesday, March 24, 2010 by Christopher L. Thayer

alt textIf you have been involved in an auto accident, here are some general suggestions for what to do first.

  • Be Careful. You will likely be in a state of shock. Make sure to take precautions for your safety and health and the safety and health of all your passengers at all times.
  • Check for Injuries and Verify the Safety of Others. Make sure you and your passengers are not badly injured. If it is safe to do so, exit your car and verify whether the drivers and occupants of other vehicles involved are seriously injured. If anyone is seriously injured, provide first aid if appropriate and call 911.
  • Call Police. Dial 911 for local police and tell them you have been involved in an accident.
  • Look for and Talk to Witnesses. Look around and see if there are any witnesses who saw the accident. It is important to do this right away because people will generally leave the scene of an accident within seconds or minutes. If you find witnesses, get their contact information. You may wish to photograph the license plates of any vehicles in the vicinity to help track down potential witnesses at a later date.
  • Photograph Vehicles Before Moving Them. It may be necessary and appropriate to move the involved vehicles off of the roadway so as not to impede traffic or cause a safety hazard. If possible, photograph the cars in the position they came to rest after the collision and before they are moved. With today’s small digital cameras, it’s easy to keep one in the car.
  • Photograph Damage to Vehicles. Take photographs of damage to all the vehicles involved in the accident. Take pictures from multiple angles.
  • Photograph the Accident Scene. Take photos of skid marks, damage to curbs, tress, railings, or nearby buildings. Photograph the scene from multiple angles. Be sure to capture curbs, railings, utility poles, or other objects that may have been damaged in the collision.
  • Record Information from Drivers and Passengers. Obtain information from all drivers and passengers of every vehicle involved in the accident – including name, address, phone numbers, insurance policy number and insurer’s phone number, driver’s license number, and license plate number.

If you or a family member has been seriously injured in an auto accident in the State of Washington, please contact Christopher Thayer by calling (toll free) 1-866-884-2417. There is no charge for the initial 20-minute consultation.

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Business Interests and Divorce

Posted Wednesday, March 24, 2010 by Michael A. Larson

alt textAn already painful divorce can be made even more painful and messy when the spouses and their attorneys consider the valuation and division of business interests and assets. This article touches on some of the issues surrounding valuation and division that family lawyers should consider when dealing with business assets.Community Property Agreements

Although Washington law distinguishes between separate property and community property, some couples getting married choose to go further by converting their separate property to community property through a community property agreement. While this is certainly a generous gesture, it can create problems in the characterization of business and other assets when dissolved.

One form of this type of agreement only converts separate property into community property upon the death of one spouse. Another form, generally called a “three-pronged” community property agreement: (1) converts all currently owned property to community property; (2) provides for all property acquired by the spouses in the future to be community property; and (3) provides for all property to be converted into community property at the time of the death of either spouse. This type of agreement will affect the division of property at dissolution by converting separate property to community property. It is important to be aware of any such agreement a spouse may have made before marriage.

In addition, courts will generally enforce community property agreements even if one party failed to read or understand it or if a party signed it without consulting with independent legal consultation. Thus a family law practitioner should ask her client about any potential community property agreements when valuating business assets.

Divorce and Wills

After divorce, people generally make new wills removing their former spouse as a beneficiary. To supplement this, Washington law provides for the automatic revocation at dissolution of any provision allowing for the transfer of non-probate assets to the individual’s spouse. Non-probate assets include benefits under a life insurance policy, employee benefits package, or IRA. However, dissolution proceedings can often stretch out, and if one spouse were to die before the divorce decree were finalized, it is possible that assets could still go to the surviving spouse. Thus, in order to protect his client’s business assets, a family lawyer should consider changing his client’s will at the beginning of the dissolution proceedings.

Buy-Sell Agreements

If one of the spouses has significant business assets, the valuation of these can cause difficulties during dissolution proceedings. One aspect of this is the valuation of businesses where the owners have completed buy-sell agreements. Buy-sell agreements essentially control the transfer of shares of the business, often allowing the corporation the right to buy shares of a departing shareholder at a reduced price. As a result, the market value of the shares and the valuation method set forth in the buy-sell agreement often result in different numbers. If a court is valuing shares, the existence of a buy-sell agreement is one factor to consider but is not the only factor. However, an accurate and persuasive estimate of the buy-sell value of the shares will be helpful to the stock-holding spouse, just as such an estimate of the market value will help the non-stockholding spouse.

Courts will generally uphold the terms of a buy-sell agreement or other partnership agreement in valuing a partnership interest of one spouse. If the partnership agreement made no provisions for discounting a partner’s interest upon sale, courts will bind themselves to that agreement and will not discount the value of the interest by sales costs, minority interest, and relevant taxes. Therefore, the terms of such an agreement should be considered when starting divorce proceedings. Business owners should consider buy-sell agreements so that in the event of a divorce, they can anticipate business planning and survival of the business.Valuation of Business Interests – Goodwill

Professional goodwill refers to the tendency of customers to return to the same business because of its reputation or other reasons, regardless of its location. A business with goodwill will have a value higher than just the sum of its assets. During divorce proceedings, the valuation of the goodwill of one or both of the spouse’s businesses may become an issue, and so it is important to become familiar with the different ways of valuing goodwill and other factors.

Washington courts have recognized five main methods of valuing professional goodwill. The first three are accounting formulas. The fourth is the market value approach, which considers how much the business would sell for. The fifth is the buy-sell agreement method, which values the goodwill based on the amount of a recent sale. Courts have stated that these methods should be used in conjunction such factors as ”the practitioner’s age, health, past demonstrated earning power, professional reputation in the community as to his judgments, skill, knowledge and his comparative professional success.” Courts must outline their reasoning for finding goodwill at a particular value, so it is important for an attorney to present credible evidence supporting valuation of her client’s or their spouse’s professional goodwill. Goodwill can potentially be a very large asset, so familiarity with its valuation is important for a family law practitioner.

Valuation of Business Interests – Stock Options

Stock options that are unvested during the marriage but vest after separation of the parties complicate the valuation of property. The Washington Supreme Court has adopted a complex rule for determining which of these options are separate property and which are community property. First, courts determine whether the options were given to the spouse in consideration of past, present, or future employment services. Then the court applies the “time- rule” formula, which is a fraction involving the time of the separation vis-à-vis when the options were given and when they are exercisable. This rule does not apply to socks purchased during the marriage, however, so it is important to have a good grasp of all of the dates involved. Like goodwill, stock options can be a potentially large asset, and a family lawyer should be familiar with how they are valued and how ownership is decided.

Tax Considerations

Taxes can be very important in determining property settlements and child support obligations after a divorce. For example, Washington courts have held that capital contributions a self-employed spouse makes to his firm that are not deductible for federal income tax purposes do qualify as “normal business expenses” for the purpose of determining child support obligations, and so are deductible.

The impact of capital-gains taxes can also be significant. Washington courts will only reduce the value of an asset for property settlement purposes by considering the effect of capital-gains tax if evidence is presented showing an imminent sale of the asset and sales costs. The issue of sale of an asset is essential, whether a spouse does or does not want capital-gains taxes considered. Thus, familiarity with tax implications of divorce is essential for a family law attorney.

“Meretricious Relationship” Dissolutions

Washington recognizes the meretricious relationship doctrine, which states that certain stable, cohabiting unmarried couples may take advantage of the community property scheme. This doctrine has been applied to characterize the increase in value of a cohabitant’s individual business during the relationship as community property, since it was achieved by community labor. An individual’s business interests will not necessarily be shielded from valuation and division simply because the parties were not actually married, so the nature of the relationship is important to consider in the division of business and other assets. Many business valuation issues are applicable in dissolving a meretricious relationship and important for a family lawyer to be aware of.

For more information, please contact Michael Larson at 206-340-2008.

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Subrogation Claims in a Personal Injury Case

Posted Friday, March 12, 2010 by Christopher L. Thayer

alt textOne of the more perplexing concepts that I need to explain to most personal injury clients is the concept of subrogation. Here is an explanation in a nutshell, in a typical personal injury action arising out of a motor vehicle collision, your medical expenses are paid through your own insurance company under what is known as your Personal Injury Protection (PIP) coverage. Under PIP coverage, your own insurance company pays for your medical bills (as long as they are “reasonable, related and necessary” to treat an injury or condition caused by the motor vehicle accident. This payment is made regardless of who is at fault for causing the collision.

Assuming there is a 3rd party at fault, you can (and usually should) pursue a claim for damages against the at fault party. A component of your damages that you are entitled to recover are your medical expenses – even though they may have already been paid by your PIP coverage. When/if you settle or receive an award against the at fault party, you will then need to deal with your PIP carrier’s subrogation claim that it will assert against your recovery.

Your PIP carrier is entitled to this claim based on the language in your auto insurance policy. You know, the one you have probably never read, right? There are also equitable principles that allow your insurance company to seek reimbursement. The theory is that your insurance company has paid medical expenses that were incurred due to the fault of another and if you recover any money from the at fault party, your insurance company will want to seek reimbursement to the extent your recovery includes compensation for medical expenses incurred.

Many clients find this concept frustrating. Why are they having to pay some of their money to their own insurance company? Why have they been paying premiums all these years if this is how the insurance company is going to treat them?

Well, the good news is that there are some exceptions and some Washington case law that helps personal injury clients in this situation, especially ones who have hired an attorney. I will come back with a follow up blog post on these tidbits in the next few weeks.

For more information, please contact Christopher Thayer at 206-805-1494.

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New Google Scholar Feature

Posted Monday, November 30, 2009 by Christopher L. Thayer

alt text Google has announced a new feature, Google Scholar, that allows users to search case law and legal journal articles on a variety of topics, and its free! As lawyers most of us have access to this information via a pay service, but now the public can access this information for free. I believe that this a huge step for Google and for how people will use the internet for research to help answer legal questions for average citizens.

Here is a blog entry describing this service.

And here is a link to the actual Google Scholar service itself.

For more information, please contact Christopher Thayer at 206-805-1494.

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Helpful Link on Personal Injury Claims from the American Bar Association

Posted Friday, November 13, 2009 by Christopher L. Thayer

alt text Here is a useful link from a site maintained by the American Bar Association (ABA) containing a basic overview of personal injury claims.

Link: “Personal Injury Claims”, American Bar Association

For more information, please contact Christopher Thayer at 206-805-1494.

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DISCLAIMER: This blog is not legal advice. This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice under any circumstances, nor should it be construed as creating an attorney-client relationship. The information on this blog is a general statement of the law and may not be up to date, accurate or applicable to your specific circumstances. Prior success in litigation is not an indication of future results; each case is unique and past results cannot predict future outcomes.

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