David H. McCarthy

A LEGITIMATE BUSINESS INTEREST ON THE PART OF AN EMPLOYER IS A PREREQUISITE FOR ENFORCEMENT OF A COVENANT NOT TO COMPETE AFTER ALL.

2012-01-02T10:44:00.000-08:00

An employer who would enforce a covenant not to compete must establish that enforcement is necessary to protect a legitimate business interest. That has been the law in this State for a long time. But there had been some doubt about it since 2009, when the appellate court in Sangamon County held that all that mattered was that the covenant be reasonable in time and area. (Sunbelt Rentals Inc. v. Ehlers, 394 Ill.App.3d 421 (4th Dist. 2009)). The Illinois Supreme Court has just set the record straight about that. (Reliable Fire Equipment Company v. Arredondo et al., Docket No. 111871).

In so doing, the Court announced a totality-of-circumstances doctrine: The enforceability of a covenant not to compete must henceforth be determined on a case by case basis evaluating the totality of circumstances in the given case. The presence or absence of a legitimate business interest had hitherto turned on two questions: One, was there a misuse of confidential information? Two, was there a "near permanent" relationship between the employer and the customer?

The answer to both those questions was "no" when the Reliable Fire case was in the trial court (DuPage County) and the Appellate Court (Second District). So both of those courts refused to enforce the pertinent covenants not to compete.
Why, then, a different result in the Supreme Court? Because the Illinois Supreme Court may ignore its own precedents but our lower courts may not. Although there were no trade secrets and no "near permanent" customer relationships in the case, there was flagrant competition on the part of the defendants: While they were still in the employ of the plaintiff-employer, they were using company time and company resources to sell competing product to their employer's customers for their own account.

Employee or Independent Contractor?

2011-11-24T05:35:00.000-08:00

by David McCarthy

As a rule an employer must withhold federal income tax, withhold and pay social security (FICA) and Medicare taxes, and pay unemployment tax (FUTA) on wage paid to an employee; but need not withhold or pay any federal taxes on payments to independent contractors.

The key to distinguishing an employee from an independent contractor is the degree or extent to which the employer has the right to control what will be done and how it will be done.

The price of guessing wrong can be a steep one.

One way to reduce or eliminate the risk is to ask the Internal Revenue Service for a determination. This is done by submitting IRS form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

Newsletter -- October 7, 2011

2011-10-08T06:21:00.000-07:00

http://myemail.constantcontact.com/Newsletter-from-the-Law-Offices-of-David-McCarthy.html?soid=1102904774473&aid=gDjt5p6OIUA

The Pendulum Swings

2011-05-01T09:23:00.000-07:00

by David McCarthy

Oliver Wendell Holmes told us that the life of the law is not logic but experience. Many years ago, when your correspondent was a newspaper reporter, elderly residents in the suburbs north of Chicago were prey to a home remodeling scheme that would start with an offer of a free inspection of the chimney of a house. Invariably a few bricks would be kicked loose. Then the ever-so-earnest contractor would report this disturbing find to the homeowner, collect a substantial advance to make the repairs, and vanish into the hills of Tennessee. That practice and others that gave home remodelers a bad name led to enactment of the Home Repair and Remodeling Act, yet another example of the law of unintended consequences.

The statute requires contracts in writing for repairs in excess of $1,000.00 and delivery of pamphlets full of warnings to the homeowner/ customer and details about their rights. Naturally, this reversed the dynamic, and with the help of case law, unscrupulous homeowners preyed upon contractors, obtaining lavish improvements to their homes and then stiffing the contractors on the grounds that the contract was unwritten or the pamphlet had not been delivered.

The pendulum recently started to swing back to equilibrium owing to an especially outrageous example of overreaching and some common sense in the Illinois General Assembly and the Illinois Supreme Court. A married couple hired a friend to convert a three-flat into a single-family home. The contract was unwritten, and it escalated from $187,000.00 to $500,000.00 as they added ever more improvements, refinements, and upgrades. They paid the first $65,000.00 but refused to pay a penny more till all the work was done. The contractor went in hock and borrowed $150,000.00 to finish the job. Did he do the work and do it right? You bet. Apart from a quibble over a $300.00 repair of flooring the homeowners approved all the work and then stiffed the contractor for more than $300,000.00.

The contractor sued the homeowners. They obtained dismissal of all counts in the trial court on the grounds that the statute had been violated. The appellate court saved one count that allowed the contractor to sue for the reasonable value of his services. The case reached the Illinois Supreme Court, and there all three counts of the contractor's claim were upheld, not least because of an amendment to the statute. A clause that declared it "unlawful" to make more than $1,000.00 in home repairs without a written contract was replaced by a clause which allowed a homeowner damaged by a violation of the statute to sue under the consumer fraud act.

The upshot: A couple of cherry pickers who thought that $65,000.00 and a lost friendship was a small price to pay for a $500,000.00 house got their comeuppance. There is no joy in saying this: One of the homeowners was an attorney with a practice in real estate.

Red Light Camera

2011-04-02T05:24:00.000-07:00

by David McCarthy

Picture this: You have received a ticket in the mail for running a red light at a "photo-enforced" intersection. For a change, you were actually the driver of the car and not just its owner, And you have decided to fight the ticket. So, what next?

One, you go to court on the date recited on the ticket or on the notice that follows the ticket. You will not go to trial that day. Even in the unlikely event that "the State" (or the City) is prepared to answer "ready" for trial, you will not answer "ready." The case will be continued for trial to a "date certain."

Two, on the date for trial you will approach the prosecutor and ask what he/she intends to do that day. Odds are you will be asked to stipulate to the facts. This invitation requires a non-committal response, e.g., a smile and a nod. By and by the case will be called on for trial. The prosecutor, having no undeniable proof of an agreement as to the facts, may solicit a stipulation to them in the presence and hearing of the judge.

Whereupon you will say, no, and that you want to cross examine the technician who maintains the camera. The state will move for a continuance. You will object and move for an order dismissing the case for want of prosecution. The state will move for a "nolle prosequi" and that will be the order. (The state will have the right to reinstate the charges. The chance of that happening is all but nil.)

Did you know... ILLINOIS COUNTY NAMES

2011-02-12T04:46:00.000-08:00

Cook County-- Named for Daniel P. Cook, a pioneer lawyer, first Attorney General of the State of Illinois and Representative in Congress from 1819 until his death in 1827.

DuPage County -- The county took its name from the DuPage River, which was, in turn, named after a French fur trapper, DuPahze.

Will County -- Named for Dr. Conrad Will, a businessman involved in salt production in southern Illinois, and also a politician. Will was a member of the first Illinois Constitutional Convention and a member of the Illinois Legislature until his death in 1835.

Kane County -- Named for Elias Kent Kane, an attorney who helped draft the Illinois constitution and was the first Secretary of State. Kane was later elected to Congress and represented Illinois in the U.S. Senate until his death in 1835.

Further reading at Origin of County Names Illinois Blue Book, 2009-2010.

NAME CHANGE

2011-02-09T17:45:00.000-08:00

By David McCarthy

The story is told of a certain Raymond Nusspickle who did not like his name. So he changed it. To Henry Nusspickle.

To do that in Illinois - change your name - it is necessary to reside in the state for six months, file a petition in the state court and publish notice in a local newspaper.

The petition must be signed, verified, and filed in the state court in the county of residence. The notice must be published three weeks in a row, and the first publication must occur at least six weeks before the petition is presented to the judge in open court.

The same petition can be used to change the name not only of the petitioner but also of the spouse and adult children of the petitioner (with their consent, of course) and minor children (if the change is in the best interest of the minors).

The disqualifying factors are what you would expect them to be, e.g., conviction for sexual abuse of a minor, for identity theft, or for any felony that is recent and unpardoned.

New Illinois Laws

2011-01-01T07:45:00.000-08:00

One hundred ninety-four new laws go into effect in Illinois on January 1, 2011. A partial list follows:

Credit History Discrimination: Employers will no longer be able to request credit reports as part of the hiring process nor can they ask about an applicant's credit history in the interview.

Red Light Cameras: All red-light violations will now be reviewed by a police officer, a retired police officer or technician not employed by the company that runs the cameras. An image of the violation must be made available on the Internet, and any municipality or county that uses red light cameras must provide notice to the public by posting the locations of the cameras on their official web site. Finally, a safety impact study must be undertaken to assess the number of accidents at the red light camera monitored intersections.

Unpaid wages: Workers are now allowed to go straight to court to collect their wages plus any legal fees when employers don't pay.

Adoption: Adopted adults no longer need a court order to obtain their birth certificates.

Pet disclosure: Pet stores must inform potential buyers about an animal's health history and the name of the breeder as well as other details.

Commercial Vehicles: Increases the fine to no less than $500 for commercial trucks that fail to display the name of the company on the side of the vehicle.

Fake dope: Outlaws the sale of "Spice" or "K2," a material similar to synthetic marijuana.

Sexting: Teens under 18 face stiffer penalties if they are caught distributing lewd photographs using their cell phones or computers.

Car seats: The fine increases to $75 from $50, for not properly strapping a child into a car seat.

Belt-in passenger: Drivers must adjust and fasten a passenger's safety belt if the passenger is unable to do it.

Bike safety: A new law makes it illegal to "crowd" or threaten a bicyclist by unnecessarily driving a car or truck too close to a bicyclist.

Presidential primary: The date of the presidential primary election moves to the third Tuesday in March in even-numbered years.

HAPPY NEW YEAR!

2010-12-31T20:53:00.000-08:00

Ring out the old, ring in the new,
Ring, happy bells, across the snow:

The year is going, let him go;
Ring out the false, ring in the true.

~Alfred, Lord Tennyson, 1850

MORE ABOUT AVOIDING PROBATE

2010-11-30T14:00:00.000-08:00

by David McCarthy

We recently spoke about an effective (but imperfect) tool for avoiding probate: the living trust. Some elaboration about the subject, probate avoidance, might be of interest.

Probate is not the ordeal it is widely supposed to be, and its hellish reputation is a triumph of the advertising of the living trust industry over reality.

One of the claimed advantages of the living trust over probate is privacy. The living trust "community" cited for this point the estate of a deceased celebrity (if memory serves, the celebrity was either Bing Crosby or Natalie Wood). In any case, the estate was probated. In the course of that proceeding an inventory of the property of the departed was required by law to be filed of record. And the gawkers of Southern California were at liberty to pull the file and see all that the deceased owned.

The risk of that is diminished if not eliminated in Illinois by the availability of "independent administration." Virtually any estate that must be probated in Illinois is eligible for "independent administration." "Independent administration" eliminates the privacy objection touted by the proponents of the living trust: The inventory of the property of the deceased need not be filed of record in an "independent administration."

Let us now turn to that most basic and obvious of probate avoidance devices: the will. True, the existence of a will does not, strictly speaking, enable one to "avoid" probate. It can and does, however, manage and control a number of risks that give probate a bad name.

The greatest advantage of a will is surpassingly simple: It distributes the property of the deceased in the way that the deceased intended the property to be distributed.

When a person dies intestate (that is, without a will), the property is distributed in the way that the State dictates pursuant to the statute of descent and distribution. Those intentions -- the intentions of the deceased and the intentions of the statute of descent and distribution -- are not necessarily one and the same. Another advantage of a will, especially as to estates of some consequence, is that it can call for no surety on the bond of the executor. Surety bonds can get expensive.

There are other devices that can streamline and simplify probate, or avoid probate altogether. Holding property in "joint tenancy" is one such device. Property held in "joint tenancy" does not pass into the probate estate of a joint tenant so long as one other tenant is still alive. Rather joint tenancy property passes, upon the death of one joint tenant, to the co-tenants who survive. Another handy device is for the testator (the person who makes a will) to purchase a modest policy of insurance on his/her life and designate as the beneficiary thereof his/her estate. The proceeds of the policy payable upon the death of the person whose life is insured will pass into his/her estate and provide liquidity to pay expenses.

Probate differs in no important way from any of the other business and affairs of life that end up in court.

There is a direct correlation between the time, expense, uncertainty and hard feelings and the level of contest. When all disputes between the parties in interest are resolved by agreement, the cost (in all senses of the word "costs") is low. When all disputes between the parties in interest are resolved by the court, the costs are high. In most cases, we see a bit of both, that is, a mix of disputes resolved by agreement, and disputes resolved by order of court. And over time, in any given case, the amount of business resolved by agreement rises and the amount of business resolved by the court falls, because the parties in interest feel ever more acutely the pain of having to pay the lawyers.

SEVERANCE PROPOSALS

2010-11-19T18:31:00.000-08:00

by David McCarthy

Severance proposals have two things in common.

First, no two are the same with respect to the number of months of pay offered. There simply is no hard-and-fast rule about this.

Second, they are all the same (or appear to be) with respect to their negotiability: They are take it or leave it. The thinking is that modification of one proposal will inevitably lead to modification of all proposals.

Living Trust or Probate

2010-11-06T13:10:00.000-07:00

by David McCarthy

The "living trust" has been pitched as a new alternative to probate. It is neither one. It has been around for hundreds of years. It is not an alternative to probate.

As a probate avoidance tool, the living trust is only as good as the settlor's ability to make sure that all his/her property gets into the trust.

The settlor is the person who sets up a trust.

As time goes by the settlor acquires other property, e.g., by purchase, by inheritance, or by transfer or exchange of trust property. However, the settlor neglects to put the newly-acquired property into the trust. Unless that property is otherwise disposed of during the lifetime of the settlor, it will become part of the settlor's probate estate. Having a living trust in addition to a will makes sense. Having one in lieu of a will does not.

Doing Business Without a Well Drawn Contract

2010-10-02T18:39:00.000-07:00

by David McCarthy

Many are the stories of successful businesses that began with a contract drawn on a cocktail napkin. Contracts don't much matter when everything is going well.

Contracts matter when things go wrong.

One of our clients is now in litigation over a bare bones contract made with a rascal and without the benefit of counsel. The decision to save on expenses on the front end by skipping the lawyers and banging out a crude one-page agreement with the other party has proven to be a false economy.

Dying Without a Will

2010-09-26T09:10:00.000-07:00

By David McCarthy

When someone dies without a will, the State does not take all the property; but the State does draw a will, so to speak. The way the State-drawn will disposes of the property may be at odds with the way the deceased would have done so had he/she made a will.

The state-drawn will in Illinois is known as "Rules of descent and distribution." (755 ILCS 5/2-1). It provides, among other things, that when there is a surviving spouse and descendants (e.g., children), the surviving spouse gets one-half and the descendants one-half.

One would suppose that in most cases when there is a surviving spouse and descendants, a will would give all to the surviving spouse.

At-Will Employment Rule

2010-08-31T18:55:00.000-07:00

by David McCarthy

A young man walked in off the street the other day and provided living proof that for all its simplicity, the at-will employment rule is tough to grasp.

An employer to whom he had given three weeks' notice of his intention to quit told him to leave at once.

"Can they do that?" he asked.

Of course.

The point of giving prior notice is to allow the employer to adapt to the change. It does not alter the at-will nature of the relationship.

New Illinois Laws

2010-08-22T09:05:00.001-07:00

Employee Credit Privacy Act -- Effective January 1, 2011. Prohibits Illinois employers from discriminating based on a job seeker or employee's credit history. The new law will remove a significant barrier to employment for the growing segment of the population whose credit history has been affected by the recession. The law forbids employers from inquiring about an applicant or employee's credit history or obtaining a copy of their credit report. The law does not affect an employer's ability to conduct a thorough background investigation that does not contain a credit history or report. Employers who violate the new law can be subject to civil liability for damages or injunctive relief.

Illinois Small Business Tax Credit -- Small businesses that create new jobs between July 1, 2010 and June 30, 2011 may be able to take advantage of a $2,500 tax credit for new hires. The Illinois Small Business Job Creation Tax Credit, signed into law earlier this year, targets the foundation of Illinois' economy - the 500,000 small businesses across the state.

Debt Settlement Consumer Protection Act -- Effective immediately. Establishes stringent guidelines and enhances consumer protections for Illinois families seeking help to pay overdue bills.

The Intolerable Co-Worker

2010-07-18T18:51:00.000-07:00

by David McCarthy

We get a remarkable number of calls from persons who have inflated notions of "hostile environment harassment." Usually the caller is new to the job in question and the complaint is that a co-worker is curt, abrupt, abrasive, indifferent, quarrelsome, and on and on. Eventually the term "hostile environment" enters the conversation. Invariably the caller displays an unduly broad (and erroneous) notion of "hostile environment harassment."

It began 24 years ago when the U.S. Supreme Court expanded to scope of gender-based harassment from the so-called quid pro quo variety to the "hostile environment" variety. In order for the "hostile environment" to be actionable it must have the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment and it must be connected to one of the forms of discrimination that is prohibited, e.g., race, sex, national origin, age, disability.

Quite recently a caller who had been let go after fewer than 60 days on the job had just received from EEOC (Equal Employment Opportunity Commission) her right to sue letter and a notice that, after investigation, EEOC was unable to conclude that the caller had been the victim of workplace discrimination. She brought her charges on a theory of race-based discrimination, and it soon became clear why: Both of the "villains" in her story were women. One was a supervisor and the chief complaint as to her was that she refused to take sides in an ongoing, low-grade clash between the caller and a co-worker with whom the caller did not get along.

From what was described to me, I concluded that the conduct complained of did not rise beyond a clash of personalities. Apparently EEOC had reached much the same conclusion after a long investigation. The caller was free to go to the next step, that is, file suit; but the wisdom of doing so in light of the tepid conclusions of the achingly-sensitive EEOC was far from clear.

Can Blogging Get You Fired?

2010-07-16T17:40:00.000-07:00

by David McCarthy

Can blogging about your job or your boss get you fired?

Absolutely.

Illinois is an at-will State. Either party to the employment relationship can end it at any time for any reason.

By and by exceptions have emerged as to the right of the employer to end the employment relationship. To fire someone after she has complained of discrimination because of race, sex, age, or disability is to run the risk of liability for "retaliatory discharge."

As for blogging about the job or the boss, it is tempting to suppose that the constitutional guarantees of free speech diminish or eliminate the right of the employer to fire the blogger. But it is not so.

First, the constitutions regulate only the relationships between individuals and the national and state governments, not the relationships between individuals and private employers.

Second, the Illinois Supreme Court has expressly rejected the proposition that a claim for retaliatory discharge can be grounded on free speech. There is an exception when the free speech is of the "whistleblower" variety.

Otherwise, you can blog to your heart's content and no judge will prohibit it. But you take what comes, and if a "pink slip" is what comes, you might as well put all your attention on looking for a new job because you are going nowhere with a claim of retaliatory discharge.

Counties with Personalities: It Matters Where You File

2010-06-14T18:29:00.000-07:00

by David McCarthy

The conventional wisdom as to personal injury cases in Chicagoland is that plaintiffs want to avoid DuPage and get into Cook County whenever possible and defendants want to avoid Cook County and get into DuPage County.

The conventional wisdom has it that the jury pools in DuPage County are conservative and will demand that a plaintiff prove her case, and particularly establish that the damages she requests of the jury are fully justified. On the other hand, the thinking as to jury pools in Cook County is that they start with the premise, "We've got to give this poor plaintiff something" and the only question is how much?

We speak specifically about DuPage County because it is widely regarded as the most conservative of the 102 counties in the State. Cook County is considered among the most liberal, along with Madison and St. Claire Counties over on the Mississippi River.

The above discussion might suggest that a plaintiff can file a lawsuit anywhere she wants to. Not true.

The general rule is that the suit must be filed in the county where the defendant resides or where some part of the transaction took place. A corporation "resides" in any county in which it has an office or regularly transacts business. Out-of-state defendants can be sued in any Illinois county.

Great Strides Fundraiser

2010-05-22T12:51:00.000-07:00

Thanks to everyone who contributed to the cystic fibrosis Great Strides annual walk today.

"Team McLenighan" raised over $400.00!

David and Pat McCarthy

More About the Work-At-Will Rule

2010-05-16T18:46:00.000-07:00

Illinois is a work-at-will state. My advice to prospective clients who have just lost their jobs invariably begins with the proposition that the employment relationship is terminable at will by either party (employer or employee) at any time for any reason or for no reason.

Virtually all the action in employment law over the last 40 years has been in the development of exceptions to the general rule that the employer can terminate the employment relationship whenever it wants to.

Quite recently we received a query from an individual who had lost his long-time job with a national retailer after he was late reporting back to work from a trip overseas that was unrelated to his employment.

He had developed quite a good case to show that he had a good excuse for not getting back to work on time. But he was unable to identify any situation, circumstance or event which - in his case - diminished or eliminated the right of his employer to terminate the employment relationship.

Even if he had reported back to work exactly when and where required, his employer was nevertheless free to terminate the relationship. There are indeed situations in which an employer’s decision to end the employment relationship can fairly be challenged (e.g. discrimination on the basis of age, race, sex, disability).

In the case under discussion here, there was the faintest hint of discrimination on the basis of national origin, but my invitation to him to tell me more about that point went unaccepted.

All this presupposes that the employee does not have a contract for a specified period of time. If the employee does have a contract for employment for a specified period of time and the employer terminates the employement relationship before the period has expired, the termination may be (and often is) actionable on a basic, common law breach-of-contract theory.

DO I HAVE A RIGHT TO REVIEW MY PERSONNEL FILE?

2010-04-18T18:41:00.000-07:00

By David McCarthy

Yes.
Current employees and some former employees are entitled to see their personnel file and to make a copy of it by authority of the Personnel Records Review Act, 820 ILCS 40/0.01 et seq. The question is often put by someone who has just been fired, and the right of access survives for one year following termination of the employment relationship.)

In general the employer must produce the file within seven working days of receiving a request therefor, and may not charge more for copies than the actual cost of the copies. Small employers (fewer than five employees) are not bound by the statute, and the statute does not require an employer of any size to maintain personnel records.

There is a right to correct the record.

It hardly needs saying that when the employer and the employee concur that the record is erroneous, it can be corrected by removal of the offending material, or otherwise, as they mutually agree.

What if they disagree?

In that instance, the employee is entitled to submit a written statement of his or her position, which must be attached to that part of the record it takes issue with, and any time the disputed portion is produced to a third party, the employee's position paper must be produced as well.

Records pertaining to disciplinary action may not as a rule be produced to third parties unless the employee has been notified. The employer must examine the file before producing it to third parties and must in most instances delete information about disciplinary matters that are more than four years old.

Do you get to see everything?

No.

Letters of reference are not subject to production. The same is true for personal information about someone other than the employee in question and for records pertinent to a criminal investigation.

BAILEY HOBSON HOUSE

2010-03-06T07:20:00.000-08:00

This rather glum-looking gentleman was an early pioneer settler of Naperville and is frequently called the "Founding Father of DuPage County."

Bailey Hobson and I have something in common.

The old stone building in front of my office was built between 1845 and 1847 as the home for this man's son, John Hobson. I have called the structure behind the old stone building my home away from home for the best part of 20 years. The Hobsons resided in the building somewhere around 49 years.

Besides the Hobsons, various colorful occupants have lived in the old building over the years. From 1894 to 1910 it was used to board both horses and their trainers. Gambling was a favorite past time of the trainers and sometimes there were differences of opinion. The bullet holes found in the original front door are thought to date from this time.

In 1979 the Law Offices of Cellucci and Yacobellis purchased the old stone building and under their ownership the building has flourished. I'm happy to report that although there have been quite a few heated discussions in the building, no additional shots have been fired since the horses and trainers vacated the premises.

In 1988 a red brick addition was built behind the stone house creating an attractive space for professional offices. Next time you're in the office check out the interior design. The fireplace, staircase, doors, bookcases, and moldings were removed from a monastery in Oconomowoc, Wisconsin and masterfully installed throughout the addition.

I'm just speculating, but I think Bailey Hobson would be impressed.

A LITTLE LEARNING IS A DANGEROUS THING

2010-02-09T15:46:00.000-08:00

by David McCarthy

There is a saying in Texas: You can’t fix stupid. Is it true? We’ll report. You decide.

At the request of an on-again, off-again client we recently made contact with a distant relative of hers who had been named a respondent to a petition for an order of protection.

Orders of protection are available under the Illinois Domestic Violence Act of 1986, and they can be used to obtain all sorts of relief, from a “stay-away” order to exclusive possession of a house or apartment to custody of a child to an order on the respondent to undergo counseling. In the case at hand a long-time adversary was asking the court for a “stay-away” order on grounds that the respondent was guilty of stalking.

The conversation took place at three o’clock on a Wednesday afternoon. The case was going to be up in court the next morning. The respondent had been served with the court papers a month before and had, in fact, gone to court some weeks earlier to get the matter continued to the date in question.

Why, then, did she wait until late on the afternoon prior to the hearing to think about hiring an attorney? She inferred from the fact that she had spent some time in the employ of a law office that she was fully capable of defending herself, and she continued to think so until there arrived, in that day’s mail, notice that the petitioner had a dozen witnesses under subpoena.

At that point the respondent prevailed upon a family member to front the legal expense, but just as she had overestimated her abilities to defend herself, so, too, she grossly underestimated the expense associated with a hearing at which the opposition proposed to submit testimony from 12 witnesses.

Next, the respondent drew upon her law office experience to conclude that she could defend the case on the grounds that some of the witnesses under subpoena had not received the per diem and mileage fees required by statute. That objection was available only to a witness under subpoena, not to the respondent, and it did not provide her with a defense of any sort.

Finally, for all the importance the respondent placed upon having once worked in a law office, the experience had not enabled her to identify her best defense. The petitioner was not within the class of persons eligible to seek an order of protection against the respondent.

A little learning is a dangerous thing, said Alexander Pope.

The law office experience of the respondent in the foregoing case worked against her, not for her. She overestimated her abilities, underestimated the expense, and mis-identifed her defense.

YOU OWE IT TO YOURSELF TO BUY UM/UIM INSURANCE

2009-12-28T18:11:00.000-08:00

by David McCarthy

If you value yourself as much as you value others (and why wouldn’t you?), the car insurance you buy will include UM/UIM coverage, and at limits equal to the limits of your liability coverage.

UM stands for “uninsured motorist” and UIM for “underinsured motorist.” In case you are in an accident, you will want as much insurance for your own injuries as for the injuries of people you hit. So buy UM/UIM coverage, and buy it at limits equal to the limits of your liability coverage.

Picture this:

You are rear-ended at a red light by an “at-fault” driver whose limits of liability insurance (say, $100,000.00) are not nearly enough to compensate you for your medical expense, your lost income, your pain and suffering, and all the rest of it. Can you go against your own insurance company for the UIM coverage under your own policy? Yes, but only if the limits of your liability insurance exceed the limits of his liability insurance. If his liability limits equal or exceed yours, he is not “underinsured” in relation to you.

You would fare no better if you had greater limits of liability coverage (say, $250,000.00 per person/ $500,000.00 per occurrence) but only $100,000.00/ $300,000.00 of UM/UIM coverage (which is to say, that you provided more insurance for the people you hit than you provided for yourself). You not only want to buy UM/UIM coverage, you want to buy it at limits equal to the limits of your liability coverage.

UM/UIM insurance protects you in case you are hit by a driver who has no insurance, or by a hit-and-run driver, or by a driver whose liability limits are less than your liability limits. UM/UIM insurance helps fill the gap between the value of your injury and the amount of insurance available to pay for it.

Your relationship with your own insurance company will be adversarial because you will be looking to it to pay you for that part of your claim which exceeds the limits of liability insurance of the at-fault driver but does not exceed the limits of your UM/UIM coverage. (No matter what the value of your claim, your insurer will not pay out in excess of the limits of your coverage.)

It is easy to foul up a UM/UIM claim.

A mis-timed “okay” is all it takes. We recently got a call from a man who believed he had an open-and-shut UIM case and who was annoyed that his insurer had not already cut him a check. To us it was at least as likely that he had outsmarted himself, but he did not stay on the telephone long enough to tell for sure. He had already received a “policy limits” offer from the insurer of the “at-fault” driver and he had already told the adjuster for his own insurer to “open a file” for his UIM claim. He acknowledged he had reached a point at which some professional advice would be of help to him. Alas, he may have taken one step too many, but there is no way to tell, for at that point, something that meant more to him than his UIM claim came up, he ended the call, and nothing further has been heard from him.

We assumed that he had already prejudiced the right of his own insurer to pursue the at-fault driver, and so his UIM claim was DOA.

But beyond that, he was indulging some rosy assumptions that his insurer was likely to challenge. For one thing, he took his best-case outcome for granted, and he carped that he did not have a check in hand already. His best-case was a payment of $145,000.00 under the UIM clause of his auto policy, that is, the limits of his UIM coverage ($250,000.00) reduced by payments from the insurer of the “at-fault” driver ($100,000.00) and from the “med pay” clause of his own policy ($5,000.00). His actual medical expense to that point was rather modest. The evaluation of the case was predicated on “wage loss” and on “future medical expense.”

As for “wage loss” we would love to know how he planned to reconcile the fact that he was working full, eight-hour shifts with his assertion that he was receiving only half pay. His insurer is apt to want a plausible explanation for that.

Additionally, there was a conflict between his complaints that his insurer had not yet offered him the full $145,000.00 and his assertion that surgery was inevitable (and lots of physical therapy thereafter) but that he would not have this surgery for at least four months. (It is not the practice of liability insurance companies to throw gobs of money at you while you are still being treated for your injuries and before you have reached the point of “maximum medical improvement.”)

Then there is the question of comparative fault, that is, the extent to which the caller’s own negligence caused his injuries.

It does not follow from the fact that the other insurer made a “policy limits” offer that the caller’s own insurer will proceed as if the caller were free of fault. On the contrary, and because they are spending their own money, they will investigate whether, and to what extent, their insured was responsible for his own injuries. And even were they to conclude that he was utterly blameless, they might formulate a settlement offer that factors in some comparative fault.

Our caller professed dismay that his insurance company had not yet written him a check for the full $145,000.00. We allow for the possibility that he will not receive a dime on his UIM claim because he blundered at a critical moment in dealing with the representatives of both insurers.