Case Talk

I. Did you know?

In the modern era, lawyers unfortunately are not always held in high esteem in all parts of the country, by all people. It might do those critics some good to reflect on how many lawyers were in fact American heroes in their own day. For example, many people do not realize that David Crockett, a/k/a "Davey" Crockett, of Walt Disney fame was an attorney. He died defending the Alamo in Texas against the onslaught of Mexican soldiers led by General Santa Anna. American forces within the fort were greatly outnumbered but fought bravely to keep the fort in American hands until reinforcements could arrive.

Crockett served as a Magistrate in his own home state of Tennessee beginning in 1817. He held Court sessions in his own cabin. When he wanted an alleged criminal arrested, he did not bother to write out a written warrant. He merely spread the word and some well-intended citizen or sheriff would find the culprit. Once hauled into Court, the judgment made on the case by Crockett was seldom appealed, as Crockett's reputation for fairness and reasonableness was high. Crockett read the law on his own and became a self-educated member of the bar, as was allowed in that era.

Crockett served in the U.S. Congress from 1827-1831 and again in 1833-1835 as Tennessee's representative. However, the lure of free land in Texas led him to move there in 1836. Shortly after, he volunteered to defend the Alamo with old friends from Tennessee at his side. During the siege that lasted over one month, Crockett fought valiantly, told stories and played the fiddle to keep the spirits of the 200 defenders inside the fort as high as he could. He died there on March 6, 1836 and was identified among the bodies by his distinctive coonskin cap, which fell beside his body. Six other attorneys were among the defenders, but none were as well known as Crockett although all fought hard to save the Alamo.

II. Marital Discord: Proper Valuation is Key to Fair Distributions by Court

When a couple decides to divorce, emotions run high. It is difficult to place a value on any marital property which is subject to division under the states' laws of equitable distribution. This process is made even more difficult if the asset is not something that can be objectively evaluated, such as a house or a vehicle, by use of standardized appraisal methods. Of special concern in many cases is the problem of how to evaluate a party's interest in a small business or "closely held" corporation [one with less than 10 stockholders], as well as in a professional practice. These assets may have high values, which greatly affect the way all the marital assets are to be divided.

The Courts have devised approaches for these specific issues that draw on reasoned approaches from areas of business law. For example, if a spouse owns 20% of the stock in a "closed corporation" with other stockholders who also hold 20% interests each, he has greater control over the affairs of the corporation than if he held 20% against another stockholder who held the full 80% of the remaining stock. The amount of control becomes a prime factor in determining the value of the spouse's interest in the business. Thus, when the business is appraised, a "discount" on how much the divorcing spouse's share of it is worth gets applied. A minority shareholder spouse could get the value of his/her interest in the business lowered from 10% to 50% historically.

There is also the "good will" aspect to be considered in these valuations as to professional practices and small businesses held entirely by the divorcing spouse. There is "enterprise good will" and "personal good will." Most states hold "enterprise good will" as a marital asset. Thus, if a spouse owns a business entity with value based on location, recognizable brand name or other characteristics, it has a divisible value upon divorce. However, if the business is really based on the party's professional reputation, knowledge or skill, it may not have a divisible value upon divorce, as this is strictly "personal good will" adding to business value. The rules are still being shaped on a case-by-case basis.

III. Continuing Care: Choices to Make

As the first wave of the population known as Baby Boomers reaches 60 years old in the current year, they finally have something in common with those older than them: the need to plan where they will live as they age. For many, the attractions of continuing care communities appear to be the practical choice for their parents and for them.

Currently, there are about 2,100 continuing care retirement communities in America. Approximately 675,000 people reside in them and their popularity is growing. Many are run by non-profit groups, such as churches. A newer development has seen corporations such as Hyatt Resorts enter the market, building hotel-like communities with many amenities.

The attraction to these continuing care settings is the promise of lifelong care once illness or incapacity occurs and the independent living unit must be given up. The downside is that an often large initial entrance fee is charged along with an additional monthly fee. Yet the high entrance fee has a purpose: to help cover the cost of long-term nursing care at the facility.

Variations exist in the expenses. Some community care centers have low initial entrance fees but provide more limited coverage with the nursing home or assisted living units one may require in the future. There are also different forms of contracts used by these centers. When investigating one of them, review the contract carefully to understand the fees and how much future services may cost. Some allow refunds of entry fees under limited circumstances. Some do not. Information to assist in the process is available from the American Association of Homes and Services for the Aging (AAHSA) in Washington, D.C.

IV. Welcome to Cyberspace: Web Users Beware

With the presence of computers hooked into the worldwide web becoming a reality in more and more households, the law has had to catch up with ways to protect the innocent from the not-so-innocent web surfers in cyberspace.

Of special concern is the use of so-called Spyware programs. Spyware is software that can be installed on your computer without your knowledge. It then monitors your conduct, especially e-mail activities and chat room activities. It can even record your financial record keeping activities, letters to others and updates of business records. Unfortunately, some very sophisticated Spyware programs can gather your personal identifying information like credit card numbers, passwords for frequently used sites and even Social Security numbers. This information can then easily be used to perpetrate an identity theft or fraud. These programs function like a camera, snapping a photo of what you put on the screen every few seconds.

So what is the law doing about this predatory computer theft? Until late 2005, no federal law existed to prohibit Spyware. Finally a bill passed in 2005 called the Spy Act. It requires businesses to obtain permission to place a Spyware program on one's computer. The bill also outlaws the extremely dangerous practices affiliated with Spyware that involve the "gimmicks" these programs use to deceive people into installing them. A hefty three million dollar per violation fine can be levied. The bill has yet to clear the Senate.

There is also a movement to make existing laws like those prohibiting unfair trade practices, enforced by the Federal Trade Commission, apply to these predatory Web programs. The Electronic Communications Privacy Act of 1986 makes it illegal to intercept and/or disclose communications sent by wire or electronically. It also metes out punishment to people who obtained this information through illegal means. Likewise, the Computer Fraud and Abuse Act already on the books makes illegal the accessing of a computer, without authorization, to obtain governmental, financial or consumer information.

On the state level, existing laws exist in 28 states under general headings such as stalking laws, fraud laws, harassment laws, computer trespass laws, wiretap law and the like. Enterprising prosecutors are using them to deal with uses of Spyware programs for illegal purposes. To prove you've been a victim, a software technologist will have to find and document the spyware's existence. He will also have to determine where the information gathered by the Spyware program is being sent. Only then can you be sure if you have suffered a cognizable damage from the stealthy program's presence in your computer.

The law has always had to change with the demands of different eras. The age of the World Wide Web, internet crime and Spyware will continue to cause the laws to evolve to meet the problems of this latest age.

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