Florida Estate Planning Lawyer Blog

Besides using multiple entities for asset protection, two common methods include the use of UCC liens or lease backs.

UCC filing is the equivalent of equity stripping. The UCC filing is a lien on your business asset from typically from a finance company. You can form a Florida Limited Liability Company and exercise a note from the company to your other Florida Business Entity. Along with the not a properly recorded UCC security document can be filed with the State of Florida. This will encumber the assets of the entity and protect those assets from an attempt to attach them to a lien. In effect the finance company would be first in line to collect any proceeds from the sale of the assets.

Another method is to create a lease back situation where one company owns the asset and leases the asset to another company. Since the operating company does not own the asset, it is not available to satisfy the debt.

It is important to create these techniques prior to valid claims to avoid a fraudulent transfer. To learn more about these and other asset protection techniques, Contact a Florida Asset Protection Lawyer.

After quitting or being terminated, your employer will tell you that you are bound by your non-compete agreement. The reality is that even if the agreement is invalid, most employees don’t have the will or the resources to fight a non-compete or non-solicitation agreement. Many employees think that, just because an employer forced them to sign the agreement or be fired, that they are not bound by a non-compete agreement. That’s just not true.

Continued employment is valid consideration for a non-compete agreement in Florida. Florida statutes presume that non-compete agreements are valid. That doesn’t mean you can’t get out of yours if you’re willing to fight.

What usually happens is the employer sends a letter to the employee and the new employer, threatens to sue both, and the employee gets fired from their new job, even where they told the new employer about the non-compete. That’s because, unless you have a contract with the new employer spelling out that you can only be fired for cause, and that the non-compete is known to the employer and is not cause, Florida is an at-will state. That means any employer can fire any employee for any reason or no reason at all.

Smart employees consult a Employment Lawyer before signing a non-compete to be advised of their rights. Even if you signed without getting advice, you still may have some legal arguments to defeat your Florida non-compete.

1. Employer breaches the contract: If your employer put the non-compete provision in an employment contract spelling out compensation, insurance and other conditions of employment, it is important to have an attorney go through the contract line-by-line. If the employer breached the agreement by failing to pay all compensation due, failing to fulfill the insurance requirements, or failing to meet some other obligation, the employee can be relieved of all obligations under the contract.

2. No legitimate interest to enforce: Many employers attempt to overreach their legitimate business interests, and this is one of the most common mistakes. For instance, an employer has no legitimate interest in enforcing a non-compete against low-level employees such as receptionists and clerical employees. An employer who manufactures computer software for accountants has no legitimate interest in preventing an employee from working on software for doctors. An employer who is phasing out of an area has no legitimate interest in preventing an employee from working in that area. An employer who abandons a particular customer, area of business, or product has no legitimate interest in the area it abandoned. The statute allowing non-compete agreements assumes that the following are legitimate business interests:

a. Trade secrets;
b. Valuable confidential business or professional information;
c. Substantial relationships with specific prospective or existing customers, patients, or clients;
d. Goodwill associated with an ongoing business or professional practice, by way of a trademark, geographic location or marketing/trade area;
e. Extraordinary or specialized training

3. Agreement is for too long a time period: For employees, a period of less than 6 months is presumed valid, and over 2 years is presumed invalid. In between, the employer will have to prove that the time period is reasonable. Most courts in Florida will assume that agreements up to 2 years are reasonable and narrow agreements for longer periods of times to be compliant with what is reasonable. But anything over 2 years is going to be a hurdle for the employer to overcome.

4. The confidential information is something readily available to the public: Many companies get their sales leads from public sources. Phone books, professional directories, the internet, notification services, are all sources that are available to anyone in the industry. So an employer who claims they are protecting their valuable secret client sources is going to have to show that the information was not available to everyone else in the industry. Existing customer lists or unique sources are protected, but chamber of commerce directories are not.

5. Public health or safety would not be served: This primarily applies to doctors, nurses, and people in specialized scientific and health areas. If there is a shortage of people in a particular specialty, or in a particular geographic area, then the employer cannot enforce a non-compete even if all the other requirements are met. If you are one of 10 brain surgeons in the country who can perform a particular procedure, your employer probably can’t prevent you from saving people’s lives.

I tell people to assume their non-compete agreements are enforceable, and not to sign them unless they can live with the restrictions. Even if they are not enforceable, many people do not have the financial resources to fight the enforcement. Florida Statutes allow individuals to recoup their legal fees and costs, but there is no guarantee that the judge will rule in their favor completely. An employee with the time, will, and resources to fight can frequently limit or eliminate their non-compete provisions.

An employer who tries to enforce a non-compete and fails can end up paying the attorney’s fees and costs of the prevailing employee, and will sometimes be paying money damages to the employee for tortious interference with an employment relationship if they cost the employee a job.

If you’re leaving a job and you have a non-compete, the best thing to do is get advice from a Florida Employment Lawyer before you leave. A written agreement with the new employer to defend you and to pay you even if you can’t perform particular services if a court issues an injunction will protect you. If you get sued to enforce a non-compete, you MUST contact an employment attorney immediately to defend yourself or you will lose your new job, you will have a money judgment against you, and you will have no ability to raise any defenses to the non-compete agreement.

If you are be affected by this type of behavior or want to put policies in place in your business to help prevent these actions please contact a Jacksonville Employment Lawyer.

While credit is tight and many Jacksonville consumers are facing foreclosure on their homes, and attempts to collect old credit card debts, companies have been trying to use waiver of you homestead to collect debts. For over 100 years Jacksonville residents and those living in Florida have had been able to protect their home from claims of creditors. Arguably the home is one of the most valuable assets a Florida resident has. Recently there has been concern over the ability of a homeowner to waive their right to protection. The Florida courts have allowed people to waive many of their constitutionally protected rights, but up to now a waiver of ones Florida homestead protection was invalid except in the case of a valid pre or post nuptial agreement. This case represented the most recent attempt to allow waiver of ones constitutionally protected homestead protection.

In a case involving the Florida Constitution's exemption which protects homeowners' residences from forced sale, the Supreme Court of Florida reaffirms that, while the exemption can be waived in a mortgage, it cannot be waived in an unsecured agreement. The court rejects claims that it should recede from its precedent based on a constitutional amendment, a purported national trend approving such waivers, and recent holdings that other constitutional rights can be waived.
To review the case and the extensive analysis the Florida Supreme Court took read Chames v. Demayo

If you are having problems with collection agents trying to collect debts, credit card debts, or other types of debts, contact a Florida Business Lawyer, or Jacksonville Consumer Debt Lawyer.

This is the third part to a series on Protecting the Company's Privilege and the dangers of Email. Click here if you missed Part 1 and Part 2. Many Jacksonville Business Lawyers tell their clients that email can be very dangerous in the event of litigation. One should always be careful before pressing the send button.

Some of the things you should implement in regards to email are:

1) Provide training to employees teach them what the proper steps are to prevent inadvertent disclosures, spoliation, and other risks from occurring.

2) Always separate business advise from legal advise, use lead ins to make it clear that what is being provided is legal advise.

3) Indicate in the communications when the communication is for legal purposes or in anticipation of litigation.

4) Limit the distribution of any disclosure to avoid waiver of privileges.

5) Teach and train that any disclosure, even an unintended one, can be a waiver of the privilege.

6) Create, implement, and audit your firms document retention policy.

If you have question on your Document retention policy or how your firm is using email on an internal and external basis, be sure to have a Florida Business Lawyer or Attorney review and audit your procedures.

This is the second part to a series on Protecting the Company's Privilege. If you missed Part 1 it can be found here. Many Jacksonville Business Lawyers tell their clients that Blackberry devices are invitations for disaster because clients have their guard down. In the past people communicated with a short phone call, in a hallway conversation, at the water cooler. Today in house council and employees often communicate with text messages and emails. Often they are giving business and legal advise to employees. Sometimes both business and legal advise is given in the same conversation.

Only legal advise is privileged and the privilege can be lost if business advise is intermingled with the legal advise. This privilege only protects communications within the United States. In house counsel should be cautious when communicating with employees or offices in other countries. Some countries do not recognize a privilege for in-house counsel.

Some countries like France and Switzerland recognize no privilege at all for in-house counsel and Japan is in between France and the United States.

How can in-house counsel protect their emails?

• Be conscious of when you are giving legal and business advise. Sometimes you may want to send two emails.
• When sending out legal advise make sure its clear that it is legal advise. Start your emails with "You have asked for my legal advise on this issue". Teach your staff not to mass forward your messages, if the message is forwarded to one person to many, the privilege can be lost.
• Educate your staff that email is not destroyed by simply pressing the delete key. Blackberry devices create inadvertent documentation in situations where clients have their guard down. Don't send an email that you would not like made public.
• Selectively use Privileged & Confidential" notations on e-mail communications. This will help in the event you have to argue the meaning in front of a judge.

Continued in Part 3

The Florida Asset Protection Blog has an interesting article on the advantages of being paid as an independent contractor over an employee when you are an unmarried debtor who does not support minor children. Generally wages are exempt form wage garnishment when the person is married or supports minor children.

This is one of the reasons why a properly structured Florida limited liability company (LLC or L.L.C.)can provide more protection than a Florida corporation. While both the Florida Limited Liability Company and the Florida Corporation can protect personal assets from liability that is created by the company, a Florida LLC can also protect the company assets from the personal liabilities of the owners or members.

Jonathan Alper goes on to state that a unmarried debtor who does not support minor children is subject to wage garnishment and garnishment of the independent contractor fees. A wage garnishment will stay in place for all future wages while a separate writs of garnishment needs to be obtained each time the employer is going to make a payment to the debtor. It is difficult for the creditor to anticipate payments to the independent contractor and to serve a writ prior to each payment.

You should speak to a Florida Business Formation Lawyer about setting up a Florida Limited Liability Company or converting your Florida Corporation to increase your asset protection.

As a Jacksonville Florida Contracts & Business Lawyer, I often get asked about Florida Business contracts that are broken. Often when we sit down and look at the Florida contract it is evident that there never was a contract as defined in Florida.

When there is not a contract there are other methods of recovery. One of these is Unjust Enrichment and the Florida Supreme Court has defined the elements of the unjust enrichment claim as (i) a benefit conferred upon a defendant by the plaintiff, (ii) the defendant’s appreciation of the benefit, and (iii) the defendant’s acceptance and retention of the benefit under circumstances that make it inequitable for him to retain it without paying the value thereof.

The courts in Jacksonville and the 1st DCA use the following elements for unjust enrichment:

1. plaintiff has conferred a benefit on the defendant, who has knowledge thereof;
2. defendant voluntarily accepts and retains the benefit conferred; and
3. the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying the value thereof to the plaintiff.

The Statute of Limitations for unjust enrichment in Florida is (4) four years per Fla. Stat. §95.11(3)(k);

There are several recognized defenses to unjust enrichment. These include:

1) Express Contract: An action for unjust enrichment fails upon a showing that an express contract exists
2) Payment Made: Unjust enrichment cannot exist where payment has been made for the benefit conferred
3) Received in Good Faith: The law seems to be settled that money paid under a mistake of facts cannot be reclaimed where the plaintiff has derived a substantial benefit from the payment, nor where the defendant received it in good faith in satisfaction of an equitable claim, nor where it was due in honor and conscience.

To have a valid contract there must be an offer, acceptance, and consideration.
If you feel that you are dealing with a breach of contract and have suffered damages as a result, you should discuss the facts and circumstances with a Florida Business Lawyer.

One of the newest areas in Florida Estate Planning is the use of Patented Tax strategies for saving on estate taxes, and income taxes. The IRS has a new proposal that would require those who use these methods to report them to the IRS. Gerry W. Geyer with the Wills, Trusts and Estate Professors Blog reported this today. This could put a damper on the use of patented tax methods. Read IRS Reg 129916-07 on Patented Tax methods for more information on how this may affect you. You may want to speak with your Jacksonville Estate Planning Lawyer about this and other issues regarding your Florida estate planning techniques.

Florida employment agreements and Florida non-compete agreements frequently contain non-solicitation clauses. These agreements or clauses prohibit an employee from soliciting the employer's clients and/or employees while they are employees and for a period of time after there employment.

The Texas Non-Compete Law Blog references a Massachusetts case that illustrates the difficulty in making the determination of whether an act or communication constitutes solicitation. They have very in depth article on this case. Here is a short summary of the case they review. The following provision was at issue:

Non solicitation Covenant. For a twelve (12) year period commencing on the date hereof, Seller shall not, directly or indirectly, (a) employ or contact any person who is employed or engaged by the Company or in any manner seek to induce any such person to leave his or her employment or engagement with the Company.

The issue in the case came down to whether social interaction with potential clients was a violation of the agreement.

The court found that social interaction could be a violation when there was an attempt to solicit clients for business, but that social interaction in itself was not restricted. The company could have prohibited all interaction but their agreement did not.

If you have a question about the validity or enforceability of a non-solicitation agreement under Florida Law, contact a Jacksonville Non-Solicitation Lawyer for a review of your facts and circumstances.

As a Jacksonville Business Lawyer, I often run up against cases which involve Florida non-compete agreements.

Definition: Covenant not to compete is a common provision in a contract for sale of a business in which the seller agrees not to compete in the same business for a period of years or in the geographic area. This covenant is usually allocated (given) a value in the sales price. It may also prohibit an employee from seeking employment within a certain time frame, a limited geographic area, and in a limited business.

It is altogether reasonable for employers to wish to prevent disclosure of trade secrets and other confidential information by employees. It is understandable that they do not want to invest time and money training an individual who then quits and goes to a competitor or opens a competing business. On the other hand it is reasonable for an individual who accepts employment to avoid forever being barred from using hard earned skills in pursuing a livelihood. Florida law undertakes to balance these interests, but that balance is not always easy to find.

Florida Non-Compete Agreement
Non-compete agreements must be analyzed as of the date they were entered into and there are separate rules and requirements based upon the date they were executed. We evaluate Florida non-compete agreements that were entered into prior to June 28, 1990, from June 28-1990 until June 28, 1996, and those entered into on or after July 1, 1996.

Most recent Florida Non-Compete Agreements are evaluated on the reasonableness as to time, geographic area, and business area to be restricted. It is important to deal with trade secrets, valuable confidential business or professional information, substantial relationships with specific prospective or existing clients, customers, and their goodwill associated with ongoing business, trade names, trade marks, geographic location as well as any extraordinary specialized training

Florida Covenant-Not-To-Compete Cases: Injunction is the normal remedy for breach of a covenant not to compete. Graphic Business Systems, Inc. v. Rogge, 418 So.2d 1084, 1086 (Fla. 2d DCA 1982), Cordis Corporation v. Prooslin, 482 So.2d 486, 489 (Fla. 3d DCA 1986); Miller Mechanical, Inc. v. Ruth, 300 So.2d 11, 12 (Fla. 1974). With regard to covenants not to compete, the court shall not enter an injunction contrary to the public health, safety, or welfare or in any case where the injunction enforces an unreasonable covenant not to compete or where there is no showing of irreparable injury. However, use of specific trade secrets, customer lists, or direct solicitation of existing customers shall be presumed to be an irreparable injury and may be specifically enjoined. Florida Statutes §542.33(2)(a) (2005).

If you feel that you are dealing with a case which involves a non-compete agreement, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve misappropriation.

Definition: Misappropriation is the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate or by any person with a responsibility to care for and protect another's assets (a fiduciary duty). It is a felony (a crime punishable by a prison sentence).

If you feel that you are dealing with a case which involves Misappropriation, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve Florida Non-Solicitation Agreements.

Definition: Solicitation is the crime of encouraging or inducing another to commit a crime or join in the commission of a crime. Solicitation may refer to a prostitute's (or her pimp's) offer of sexual acts for pay.

Florida legal theories and defenses
one who is employed as an agent, independent contractor, or employee may agree ... with her or his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a reasonably limited time and area ... so long as such employer continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction, be enforced by injunction.
Defenses

If you feel that you are dealing with a case which involves solicitation or a non-solicitation agreement, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve unclean hands. This defense to a claim can limit or eliminate a potential recovery.

Definition: Unclean hands is a legal doctrine which is a defense to a complaint, which states that a party who is asking for a judgment cannot have the help of the court if he/she has done anything unethical in relation to the subject of the lawsuit. Thus, if a defendant can show the plaintiff had "unclean hands," the plaintiff's complaint will be dismissed or the plaintiff will be denied judgment. Unclean hands is a common "affirmative defense" pleaded by defendants and must be proved by the defendant. Example: Hank Hardnose sues Grace Goodenough for breach of contract for failure to pay the full amount for construction of an addition to her house. Goodenough proves that Hardnose had shown her faked estimates from subcontractors to justify his original bid to Goodenough.

Florida legal theories and defenses
The Doctrine of Unclean Hands: plaintiffs who seek a remedy in equity with “unclean hands,” which does not require the commission of a crime but only acts “condemned by honest and reasonable” persons, will be denied relief. Roberts v. Roberts, 84 So. 2d 717, 720 (Fla. 1956).

Defenses
1. Unclean Hands: One who seeks the aid of equity must do so with clean hands. Bradley v. Health Coalition, Inc., 687 So.2d 329 (Fla. 3d DCA 1997). This rule applies to the State when it becomes a litigant. Valdez v. State, 194 So. 388, 394 (Fla. 1940).
2. Totality of the Circumstances: In deciding whether to issue an injunction in a particular case, a trial court must consider the totality of the circumstances and determine whether injunctive relief is necessary to achieve justice between the parties. This well-settled maxim of equity jurisprudence is summarized in §936 of the Restatement (Second) of Torts (1979): The appropriateness of the remedy of injunction against a tort depends upon a comparative appraisal of all of the factors in the case, including the following primary factors:

(a) the nature of the interest to be protected,
(b) the relative adequacy to the plaintiff of injunction and of other remedies,
(c) any unreasonable delay by the plaintiff in bringing suit,
(d) any related misconduct on the part of the plaintiff,
(e) the relative hardship likely to result to defendant if an injunction is granted and to plaintiff if it is denied,
(f) the interests of third persons and of the public, and
(g) the practicability of framing and enforcing the order or judgment.

Davis v. Joyner, 409 So.2d 1193, 1195 (Fla. 4th DCA 1982).

If you feel that you are dealing with a case which involves Unclean hands, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve unclean hands. This defense to a claim can limit or eliminate a potential recovery.

Definition: Unclean hands is a legal doctrine which is a defense to a complaint, which states that a party who is asking for a judgment cannot have the help of the court if he/she has done anything unethical in relation to the subject of the lawsuit. Thus, if a defendant can show the plaintiff had "unclean hands," the plaintiff's complaint will be dismissed or the plaintiff will be denied judgment. Unclean hands is a common "affirmative defense" pleaded by defendants and must be proved by the defendant. Example: Hank Hardnose sues Grace Goodenough for breach of contract for failure to pay the full amount for construction of an addition to her house. Goodenough proves that Hardnose had shown her faked estimates from subcontractors to justify his original bid to Goodenough.

Florida legal theories and defenses
The Doctrine of Unclean Hands: plaintiffs who seek a remedy in equity with “unclean hands,” which does not require the commission of a crime but only acts “condemned by honest and reasonable” persons, will be denied relief. Roberts v. Roberts, 84 So. 2d 717, 720 (Fla. 1956).

Defenses
1. Unclean Hands: One who seeks the aid of equity must do so with clean hands. Bradley v. Health Coalition, Inc., 687 So.2d 329 (Fla. 3d DCA 1997). This rule applies to the State when it becomes a litigant. Valdez v. State, 194 So. 388, 394 (Fla. 1940).
2. Totality of the Circumstances: In deciding whether to issue an injunction in a particular case, a trial court must consider the totality of the circumstances and determine whether injunctive relief is necessary to achieve justice between the parties. This well-settled maxim of equity jurisprudence is summarized in §936 of the Restatement (Second) of Torts (1979): The appropriateness of the remedy of injunction against a tort depends upon a comparative appraisal of all of the factors in the case, including the following primary factors:

(a) the nature of the interest to be protected,
(b) the relative adequacy to the plaintiff of injunction and of other remedies,
(c) any unreasonable delay by the plaintiff in bringing suit,
(d) any related misconduct on the part of the plaintiff,
(e) the relative hardship likely to result to defendant if an injunction is granted and to plaintiff if it is denied,
(f) the interests of third persons and of the public, and
(g) the practicability of framing and enforcing the order or judgment.

Davis v. Joyner, 409 So.2d 1193, 1195 (Fla. 4th DCA 1982).

If you feel that you are dealing with a case which involves Unclean hands, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve a Breach of a Fiduciary Duty. These disputes can be between employees and employers, companies and their suppliers, Personal representatives and beneficiaries, guardians and wards, Trustees and beneficiaries, or officers, directors, managers and the company they work for.

Definition: a fiduciary relationship is where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business. The relationship is not necessarily formally or legally established as in a declaration of trust, but can be one of moral or personal responsibility, due to the superior knowledge and training of the fiduciary as compared to the one whose affairs the fiduciary is handling.

Elements Cause of Action - Florida Supreme Court
The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff’s damages

If you feel that you are dealing with a breach of fiduciary duty and have suffered damages as a result, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve Contract disputes. These disputes can be between employees and employers, companies and their suppliers, or individuals and contractors.

Definition: failing to perform any term of a contract, written or oral, without a legitimate legal excuse. This may include not completing a job, not paying in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not providing a bond when required, being late without excuse, or any act which shows the party will not complete the work ("anticipatory breach"). Breach of contract is one of the most common causes of law suits for damages and/or court-ordered "specific performance" of the contract.

Elements Cause of Action - 1st DCA
It is elementary that in order to recover on a claim for breach of contr