AGGRESSIVE WITH A CAPITAL “A”

Our firm was recently accused by an opposing counsel in Federal Court as having “aggressively prosecuted” our client’s claims “with a capital A.” And I don’t think that OC (opposing counsel) considered this a good thing when he made the remark! Nonetheless, the judge went with our motion and all was good, but it got me to thinking – when is aggressively representing your client a bad thing?

Apparently, I’m not the only guy in the blogosphere thinking of the same issue. In an article in the New York Law Journal, Paul C. Saunders, counsel with the firm of Cravath, Swaine and Moore, LLP, wondered “Whatever Happened To ‘Zealous Advocacy’?” http://bit.ly/eQwELA And, Scott H. Greenfield, a criminal defense attorney and blogger, wrote on “Dead Lawyers Have No Enemies” on his Simple Justice Blog. http://bit.ly/gqpWq0

The question seems to be, what duty does an attorney have to zealously represent the interests of his or her client? At one time, the question would have been an easy one to answer — A lawyer has a duty to zealously represent the interests of his client. But, say the powers that be, times have changed and this is no longer the standard. Attorneys must be civil with each other and zealous representation is so “old school” and “Rambo.”

As discussed in his article, Saunders believes that it was a mistake to take the word “zeal” completely out of the New York Rules of Professional Conduct. He believes that zealous advocacy is an important professional requirement and cites Professor Anita Bernstein for the proposition that “the shortage of zeal has adversely affected the practice of law.”

Greenfield, writing about legal blawgers taking criticism for their views online, takes a similar tack. He argues that blawgers should “just take it [criticism] as proof that you're alive. Only dead lawyers have no enemies. If no one says mean things about you, then you're doing something very wrong.” It is evident from Greenfield’s other writings about his legal practice that he applies this meme to his criminal defense work. Or, as a judge once remarked to me, “The only judges who don’t get overturned are the ones who don’t do anything.”

But how does this apply to your situation, you ask? Why should I, as a business owner, care what the rules of attorney conduct say – or don’t say – about zealous advocacy? It matters to you because it is your business and fortune that are in our hands when we represent you.

Zealous advocacy or representation is a result of “the duty of the lawyer, subject to his role as an ‘officer of the court,’ …to further the interests of his clients by all lawful means, even when those interests are in conflict with the interests of the United States or of a State.” In re Griffiths, 413 U.S. 717, 724 n. 14 (U.S. 1973). The term goes back at least to 1820 and the defense of Queen Caroline of England by Henry, Lord Brougham, wherein he famously stated:

“[A]n advocate, in the discharge of his duty, knows but one person in all the world, and that person is his client. To save that client by all means and expedients, and at all hazards and costs to other persons, and amongst them, to himself, is his first and only duty; and in performing this duty he must not regard the alarm, the torments, the destruction which he may ring upon others. Separating the duty of the patriot from that of an advocate, he must go on reckless of the consequences, though it should be his unhappy fate to involve his country in confusion.”

(BROUGHAM, LIFE AND TIMES OF LORD BROUGHAM 405–07)

This is the traditional standard for attorneys in representing their clients, yet even in Texas, the term “zealous advocacy” has been taken out of the text in the Disciplinary Rules of Professional Conduct, and now resides only in the Preamble, which is not mandatory, but just an admonishment. The Preamble continues to state, as a general idea, that “as advocate, a lawyer zealously asserts the client's position under the rules of the adversary system.” (Tex. R. Prof Conduct Preamble, par. 2). Additionally, we are told that “in all professional functions, a lawyer should zealously pursue client's interests within the bounds of the law.” (Tex. R. Prof Conduct Preamble, par. 3). But, because this admonition is in the Preamble and no longer in the rules, it has no bite; failure to zealously represent one’s client is not grounds for discipline.

But some of us in the legal field hold to the old standard and continue to represent our clients zealously. Even if it means we make enemies and even if it puts us in the minority, we do it because it is the right thing to do. Besides, as Scott Greenfield so aptly puts it, “only dead [or uncaring] lawyers have no enemies.”

Lee Keller King

A Brief Overview of a Trustee's Dutie

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary." If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment and probity. Unfortunately, it is also a major responsibility. Following is a brief overview of your duties: Fiduciary Responsibility. As a trustee, you stand in a "fiduciary" role with respect to the beneficiaries of the trust, both the current beneficiaries and any "remaindermen" named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts. The Trust's Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in 15 years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say "no" and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately. Taxes. Depending on whether the trust is revocable or irrevocable and whether it is considered a "grantor" trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries. Fees. Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what's reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances. In short, acting as trustee gives you a wonderful opportunity to provide a great service to the trust's beneficiaries. The work can be very gratifying. Just keep an eye on the responsibilities described above to make sure everything is in order so no one has grounds to question your actions at a later date.

Making Goliath Blink

Oftentimes, litigation between employers and employees is as contentious as a divorce. Cases involving employer - employee relationships become heated because one party, inevitably the employer, believes its trust has been breached, and the "golden boy" (or girl) has disappeared with the company's confidential information and trade secrets. The employer, especially in companies heavily invested in IT and conducting significant research and development, often launches aggressive litigation against the departing employee, seeking injunctive relief, suing for damages, and asking for attorney fees and costs. Most departing employees may be quickly daunted by their circumstances, and try to cut a reasonable deal. Others believe they should fight the battle to the bitter end, with no thought of the consequences or cost. So, which is the preferred approach?

Many employees believe themselves to be in the shoes of David against Goliath. However, unlike the story in the Book of Samuel, David may not always win. Goliath may just pummel an errant shepherd who is found fleecing the employer's sheep. But a “win” is based on the relationship the employee had with the employer. Was the employee trusted with confidential information, that he or she was not privy to except from the employer? Was the employee in a position of trust and confidence with the employer? While certainly not dispositive, these factors are very relevant to the battle.

Employees may then look at the confidential information the employer is trying to protect. Is that information truly an issue at the employee's new place of business? If the employee is actively taking the former employer's trade secrets and confidential information to the new employer and the former employer can prove it, then Goliath wins.

If, however, the employee can show the former employer is merely trying to prevent the employee from plying his or her trade, and the former employer's confidential information is not an issue at the employee's new place of business, Goliath is forced to pause. In that time, the employee may directly challenge the former employer's contentions, requiring the former employer to place his "confidential information" cards on the table — a very uncomfortable process, because much of this information is often the employer's customer information. No business wants its customer information involved in an intramural scrimmage. Essentially, the employee challenges his former employer as to how far it is willing to go. Thus, Goliath blinks.

By focusing litigation and discovery, the dispute may have a realistic chance of resolution, short of trial. True, the parties will have incurred fees and costs to get to this point, but the alternative —to proceed with continued litigation, for the sake of litigation — is prohibitively expensive and may be unwarranted. Focused litigation, conducted by business lawyers experienced in these types of cases, identifies issues that are important to both the employer and employee. And, hopefully, Goliath and David may look at other, more profitable battles to wage.

Charles M.R. Vethan

AARP Sues Government Over Reverse Mortgage Foreclosures

Charging that reverse mortgage borrowers were caught in what amounts to a regulatory bait and switch, the AARP's legal arm is suing the Department of Housing and Urban Development (HUD) on behalf of three now-deceased borrowers' surviving spouses who are facing imminent foreclosure and eviction from their homes. 

The case involves the spouses of individuals who took out Home Equity Conversion Mortgage (HECM), which are the most widely available reverse mortgage and are administered by HUD. A reverse mortgage allows homeowners who are at least 62 years old to borrow money on their houses. The loans do not have to be repaid until the last surviving borrower dies, sells the home, or permanently moves out. 

The borrowers in the AARP case all died, leaving their spouses, who were not listed on the loan documents, living in the mortgaged homes. Because of the housing downturn, the homes are now worth less than the balance due on the reverse mortgage. None of the three spouses -- residents of Indiana, New York and Maryland -- can obtain loans for more than their homes are worth and so are facing eviction. 

Since 1989, HUD rules governing reverse mortgages have stated that a borrower or heirs would never owe more than the home was worth at the time of repayment. But at the end 2008, the Bush administration abruptly changed this policy and said that an heir -- including a surviving spouse who was not named on the mortgage -- must pay the full mortgage balance to keep the home, even it if exceeds the value of the property. This, AARP says, violates existing contracts between reverse mortgage borrowers and lenders. 

"HUD has illegally and without notice changed the rules in the middle of the game at the expense of vulnerable older people," said Jean Constantine-Davis, a senior lawyer with the AARP Foundation, the organization's charitable unit. 

A spouse might not be named on the mortgage for a number of reasons: one spouse may have taken out the reverse mortgage before the marriage, or one spouse may be under age 62 and ineligible, or, more likely, lenders often encourage the younger spouse not to be named as a borrower because then the loan amount can be bigger. AARP notes that, perversely, under HUDs current rule a stranger can purchase the property for its current appraised value, but a surviving spouse cannot. The policy also negates a key purpose for which borrowers pay for insurance, AARP adds, pointing out that reverse mortgage borrowers have always paid insurance premiums to protect against going "underwater" -- owing more than their homes are worth. 

The suit charges that HUD is ignoring another provision of the HECM program that protects a surviving spouse from being arbitrarily displaced from the home upon the death of the borrower. 

"This is shameful and we intend to make HUD honor the representations and promises they made to borrowers when they signed up for these government-insured loans," Steven A. Skalet, of Mehri & Skalet, the law firm pursuing the case for the AARP Foundation. The case was filed in Federal District Court for the District of Columbia. HUD had no comment on the pending litigation. 

Nearly one-quarter of all mortgaged homes are underwater, according to CoreLogic, a housing data firm.
For AARP's news release on the lawsuit, click here.
For a New York Times article on the case, click here. For excellent analyses by the Times and Reuters, click here and here.
For more on reverse mortgages, click here.

Mickey Rooney Headlines Senate Hearing on Confronting Growing Problem of Elder Abuse

Legendary actor Mickey Rooney told a packed Senate hearing room last week of the emotional and financial abuse that he has endured in recent years. 

"I was eventually and completely stripped of the ability to make even the most basic decisions in my own life," Rooney said. "If elder abuse happened to me, Mickey Rooney, it can happen to anyone." 

In fact, financial and physical mistreatment is happening to a large and growing number of "anyones" at a time when government resources to deal with such cases are plateauing or diminishing. Rooney's story was part of a Senate Special Committee on Aging hearing exploring the nationwide trends of abuse, neglect and financial exploitation of seniors. 

At the hearing, the Government Accountability Office released a study estimating that 14 percent of elderly Americans experienced some form of abuse in 2009. However, in all likelihood this is a significant undercount of the dimensions of the problem, witnesses said. A study of elder abuse in New York, also unveiled at the hearing, concluded that for every elder abuse case that is reported, another 23 to 24 go undetected. 

In most states, Adult Protective Services (APS) caseworkers are the first responders to reports of abuse, neglect, and exploitation of vulnerable adults. But according to a new AARP-funded national survey, support for these programs is not keeping pace with the growing crisis. The study found that in 2010, 24 states plus the District of Columbia reported increased calls for APS, with all of the states naming financial exploitation as a cause of the increased calls. 

But despite a rise in the number of APS calls, only three reporting states -- Alaska, Idaho, and Nevada -- increased APS spending in 2010, while the rest either maintained current funding levels or actually reduced spending. 

The AARP observes that The Elder Justice Act, which was part of the new health reform law, authorizes a direct federal funding stream for state APS programs, as well as money for state grants to test ways to improve APS. Nevertheless, Congress has not yet appropriated these funds. 

Sen. Herb Kohl (D-WI), who chaired the Senate hearing, urged committee members in attendance to help pass legislation to improve federal, state and local agency cooperation in fighting elder abuse. Kohl later reintroduced his "Elder Abuse Victims Act," which would establish an Office of Elder Justice within the Department of Justice and strengthen the coordinated law enforcement response to cases of elder abuse. 

For more on the hearing, click here. 

For more on Rooney's testimony, click here. For YouTube excerpts of his testimony, click here.

“Don’t Panic, Johnny!” (1)

You just found that the secretary of a key employee has gone to work for a potential competitor, without giving two-week notice. Not only that, she has not surrendered possession of your company’s laptop, which she used to access your computer network from home via Virtual Private Network. What do you do?

First, run in circles, scream and shout! Use profanity – it may help you feel better. [insert cheesy emoticon here]

Then, after you’ve blown off some steam, take steps to reduce the damage.

The first thing to do is call your IT provider and have VPN access cut off to the wayward laptop. It may be closing the barn door after the horse has left, but at least the leakage of information will be limited to anything taken before the VPN connection is killed.

If you used some foresight, you had your IT provider LoJack for Laptops (www.lojackforlaptops.com). If you did, you can trace the laptop via the Internet and/or remotely freeze the computer, displaying a custom message to the user. As a last resort, you can even delete all of your data from the laptop remotely.

But you say you didn’t have LoJack for Laptops installed? Well, don’t panic. There are other things you can do.

If your server has VPN logging activated, your IT provider will be able to track when the laptop has accessed your server over the VPN. You may also be able to determine which, if any, files were transferred to the laptop. Obviously, any access after the employee leaves your company is suspect, and evidence to support the issuance of a temporary restraining order by a court.

It is of great importance to retrieve the former employee’s laptop. A competent forensic technician can make a forensic copy of the hard drive and then determine what files are on the machine, what files were deleted, and what portable storage devices were attached and when. Even if incriminating files have been deleted, they will probably be accessible.

If the hard drive has been wiped so as to make files inaccessible, that in itself is evidence of bad conduct as such an action is beyond the competence of the average computer user. The forensic image and the data from analysis of the copy will be very potent evidence in court.

If you believe that your company’s confidential and/or trade secret information has been taken, then your only recourse may be immediate legal action.(2) A Houston law firm, such as The Vethan Law Firm, PC, which is experienced in protecting its clients’ confidential information, can file a suit seeking injunctive relief from the court. That is, a suit asking the court to order the former employee to return any data taken, and forbidding him or her and her new employer from using or disclosing any such information. Obtaining injunctive relief is not cheap, but it may be cheaper than losing your company’s life blood, its intellectual property and trade secrets.

And remember, “forewarned is forearmed.” If you take steps today to protect your confidential information tomorrow, you can reduce the damage from an employee deciding to take that information to his new employer.

(1) Edward James Olmos in “Stand and Deliver,” 1988.
(2) Legal action will be much more effective if you have the right employment documents, including an enforceable non-disclosure agreement with the rogue employee and a written policy regarding confidential information.

Group Calls for Federal Probe into Florida's Firing of Nursing Home Advocate

A nursing home advocacy group is calling on the federal government to investigate Florida governor Rick Scott's recent removal of the director of the state's Long-Term Care Ombudsman Program. 

Every state is required to have an ombudsman program that serves as an independent voice for nursing home residents -- addressing resident complaints and advocating for improvements in the long-term care system. As ElderLawAnswers reported earlier, shortly after taking office, Gov. Scott ousted Brian Lee, who during his seven years directing Florida's ombudsman program had gained a reputation as a staunch advocate for the elderly. After Scott, a Republican, won the governorship last November, the Florida Assisted Living Association, an industry group, sent him a letter recommending an individual to replace Lee, one who would presumably be friendlier to their industry. 

Lee's removal has alarmed The National Consumer Voice for Quality Long-Term Care, a leading advocate for long-term care residents nationwide. In a letter to the head of U.S. Administration on Aging, the Consumer Voice's Executive Director Sarah F. Wells charges that "Mr. Lee was forced to resign from office at the request and recommendation of nursing home and assisted living operators." Wells calls on the federal agency to "investigate the reasons for Lee's dismissal as potential willful interference and detrimental impact on the ability of the State Ombudsman to advocate on behalf of the long-term care residents of the state," and notes that willful interference with the ombudsman's job is illegal. 

ElderLawAnswers has obtained a copy of the letter that the Florida Assisted Living Association sent to Governor-elect Scott recommending an individual to replace Lee. To see the letter, click here. 

Some of the state's 17 councils of volunteer ombudsmen are considering legal action and/or filing a formal complaint with the U.S. Attorney General.

I Would Have Made It Shorter…

Mark Twain is often misquoted as having said "I would have made the letter shorter, but I didn't have time."(1) Regardless of having been the first to utter this pearl of wisdom, it remains true in legal writing today, especially when referring to contracts and agreements.

The general tendency for a Houston attorney is to "write long" because of the fear of leaving something important out. And it is essential to keep the important things in an agreement between businesses, or between an employer and its employee. However, unrestrained, this tendency can result in what we call in the legal field, "a mess."

The drafter of a legal document must maintain some sort of sense of proportionality. An agreement for a $100,000 piece of heavy equipment may not need to be as lengthy as an agreement for a $100,000,000 merger.

Furthermore, the more items, issues or terms you place in an agreement or contract, the more likely you are to create an ambiguity. Plaintiff's attorneys-seeking to sue your company-love ambiguities. An ambiguity-a term or sentence that could reasonably be given more than one interpretation-opens the door to consideration of circumstances of the terms included on the written page of the contract. If you are the party defending the agreement, you DO NOT want any ambiguities.

So, how do you determine "what to leave in; what to leave out?"(2) The best way is to seek legal counsel from an attorney with experience not only in drafting such agreements, but also in testing them through litigation.
And remember my three rules from "The Social Network,"
1. Get it in writing;
2. Have your own attorney;
3. Have your own attorney draft/review the document.
Longer is not necessarily better, and neither is shorter. But, you won't know which choice to make if you don't get, and follow, quality legal advice.

-Lee Keller King

1. Blaise Pascal, Provincial Letter: Letter XVI, 1657 (English Translation): "
Je n'ai fait celle-ci plus longue que parce que je n'ai pas eu le loisir de la faire plus courte." Literally: I made this [letter] very long, because I did not have the leisure to make it shorter.
2. Bob Seeger & The Silver Bullet Band, 1980. http//www.youtube.com/watch?v+PmrkY-EZy74