"Are You Sure It Is What You Thought It Was?" by Anthony J. Bellanca, MCBA President
A kindly Minister was walking down the street one day when he noticed a very small boy on a porch trying to reach up to press a doorbell. The Minister ascended the porch, reached his arm over the little boy and pushed the doorbell. He then crouched down and asked, “Now, what do we do?”
The little boy shouted, “RUN!”
I guess it wasn’t what the Minister thought it was when he saw the little boy. There are many things that are not what we thought they were. A couple of them this month are Veteran’s Day and Thanksgiving.
About the time you are reading this edition of the Bar Briefs, we will be celebrating Veteran’s Day. It is, of course, the date set aside to honor our service men and women who have given of themselves to defend our nation. But, was it what it is? It previously was Armistice Day, first proclaimed by President Woodrow Wilson in 1919, but it wasn’t a federal or state holiday. Congress passed legislation in 1938 (52 STAT 351, U.S. Code, Sec. 87a) which used the traditional November 11th date to declare a legal holiday, “to be dedicated to the cause of world peace and to be thereafter, celebrated and known as Armistice Day.” This, of course, was a remembrance of the end of World War I. In 1953 a shoe store owner in Kansas began to devote himself to turn the date into “All Veterans Day”. Finally, President Eisenhower signed the bill in 1953, officially changing the name to Veterans Day. During the 70’s the date was switched back and forth according to the statute, known as the Uniform Monday Holiday Act and then it was moved to the fourth Monday of October. Later, it was returned to November 11th. So, it wasn’t what it is.
Similarly, we are about to celebrate Thanksgiving Day, which we know is the day when we commemorate the harvest celebration of the pilgrims in Plymouth, Massachusetts. The date given was 1621. It is recorded that the pilgrims celebrated with local Native Americans to celebrate the harvest. According to historians, the actual day proclaimed as Thanksgiving Day was not so proclaimed until 1623, and celebrated in July. George Washington announced a national Thanksgiving Day in 1789, but there was no national holiday until President Lincoln said so in 1863. We have known it as a secular holiday, but it started out as a religious one.
Now, how about this? History records that the Spanish at St. Augustine (Florida) celebrated a Thanksgiving Day in September of 1565.
In the late 30’s and early 40’s, during FDR’s presidency, he decided that it should be celebrated on the next to last Thursday in November. Some of the states, about half, didn’t go along with this. So, it took a resolution of Congress to solve the problem setting down the fourth Thursday of October as Thanksgiving Day.
So, our Thanksgiving Day isn’t what it was before.
By the way, our neighbors to the north in Canada, have a Thanksgiving Day as well. It has traditionally been celebrated in October. Back in 1957 it was the last Monday of October but since then it is the second Monday in October.
We all recognize that Thanksgiving is a day when we gather with friends and family for good food and good cheer. Some will attend church services to show appreciation and most of us, hoping that the Lions are blacked out locally, will kick off our shoes, get into comfortable clothes and watch some good football.
The old adage, “We all have much to be thankful for” should be appropriate each year, but it is a sentiment that we should contemplate daily.
Lawyers, in particular, have one extra reason to be thankful. In these economic times, when literally hundreds of thousands have lost their jobs, and employment benefits are running out, we can still work. We lawyers (and other professionals) have, by reason of our profession, a privilege which only we can lose by our own actions or inactions. It allows us to work when others have no work and to earn when others can’t. Times are tough. Revenues are down. Expenses and taxes are up . . . but we all still have the ability to work.
It is indeed a great privilege, this profession of ours, and when things are rough, we can work harder, we can market and network and pass the word around that we are available to help in solving people’s problems. We have an incredibly large list of ways to get ourselves out there and find clients who need us.
Free Advertising
Last month I mentioned a new way to make yourself known and to develop new clients. Contact me to advise that you are available to be contacted by the press in your area of specialty or interest in the practice of law, to give your own personal opinions in the media concerning those hot issues which come before the court each day. Since last month we had volunteers in several areas. We can always use more. Contact me directly to be put on that list. It is a good way for you to publish your specialties without cost. Call or write soon.
Final Note
Oh, by the way, I just realized that the MCBA was founded 29 years BEFORE the State Bar of Michigan.
MCBA News
By Rick R. Troy, Executive Director of the Macomb County Bar Association
Classicially, there have only been three arenas of life wherein an individual voluntarily professes alound their personal devotion ?to an ideological way of life. As we welcome new members of the bar this month, we are reminded of the Oath that they will take, and that you have taken, that will provide them the means to earn a living and the obligations that come with it. The Professions of Divinity, Medicine and Law are the classics and continue to be respected by the masses in part due to the altruism that embodies their work. It is not my intent to disparage any industry, however I question why and how we ever got to the accepted reference to “professional” athletes, salesmen, painters, actors, singers, etc. While these arenas are certainly important to society in a variety of ways, they just don’t fit the true meaning of Profession. What altruistic commitment did Michael Vick profess when he recently signed a multi million dollar promotional deal with Nike? Did Marilyn Monroe or Kurt Cobain contribute to modern society? Sure they did, but did their accomplishments meet characteristics that are generally attributable to professions? They certainly did not live up to a code of ethics, public service, institutional training, licensure or self regulation. Lawyers are true “professionals” because they “profess’ an oath and adhere to such practices as obtaining and maintaining theoretical knowledge and applying them in practice. As Lawyers, you have undertaken extensive study and testing of your competence before you could even be considered for licensure. Because you accomplished all of this you have the ability to choose and control your work. The skill, knowledge and authority that you have attained belongs to you, not the organization that you work for and because of this you have the ability to take your talents elsewhere if you choose. You are a member of a professional body that works diligently to enhance your status through self regulation and calls upon you to contribute for the public good. As a Lawyer you enjoy high status, respect and to a greater extent than others, control over your pay.
?I recently attended a meeting of our Pro Bono Committee wherein the members began to set a schedule of Ask The Lawyer events throughout the county beginning in January 2010. The committee conducted a few of these events over the summer with great response from the public. These committee members did you the favor of enhancing the public’s respect for your profession. They did it by simply giving some of their time to freely answer questions of the good people of Macomb County. They did it without expectation of pay, yet each and every lawyer that participates in these types of programs share in the opinion that they get paid in ways that money can’t match. Participating in Ask the Lawyer programs or the Macomb County Bar Foundation’s Law Day or Constitution Day activities or the Lawyer Teacher Partnership Program all pay in this way.
Circuit Court Corner By Keith R. Beasely, 16th Circuit Court Administrator
Administrative Closings Due to Bankrupties
As you probably know, Michigan courts enter orders administratively closing civil cases once they receive notice that a bankruptcy action has been filed as to a defendant (they are not closed when a plaintiff files). It had been our practice to utilize an administrative closing order that directs that cases be automatically reopened once the bankruptcy has concluded, the automatic stay has been lifted and the circumstances call for the case to continue. Unfortunately, this places staff in the position of having to make judgment calls as to whether cases should be reopened or not.After some research by General Counsel BJ Belcoure, we have revised our practice of automatically re-opening cases following notice that bankruptcies have been concluded. Henceforth, we will be using the SCAO approved form for administrative closing, which directs that cases not be reopened absent order of the Court. Thus, in cases with the new order, staff will not automatically be triggering case reopening. A party will have to file a motion, with notice to the other parties or obtain a stipulation and order.
Electronic Indigent Counsel Request for Payment Form
Judicial Aide is offering indigent counsel an alternative method of filling out and making requests for payment of indigent attorney fees with Judicial Aide. My secretary has revised the Request for Payment form to allow you to fill-in-the-blanks on your computer and forward it via e mail to Judicial Aide at an e mail address set up only for this purpose. The form is posted on the Court’s Website at www.macombcountymi.gov/circuitcourt/forms.htm. An e mail function is built into the form for filing it.
Reminder: You do not have to send an order of appointment as counsel anymore – we have an image of it on the computer system. If you are asking for extraordinary service compensation, a signed order from the assigned judge must be attached (preferably PDF). If you don’t have the technology to attach a copy, please don’t e mail your billing from.
Tips from the Chief Judicial Aide
Paula asked me to write about several issues which seem to repeatedly come up, cause problems and waste a lot of staff and attorney time:
‘Case Shopping’ is not allowed. If you wish to be on a list, you cannot pick and choose the cases you will take when you are called. If you wish to be taken off a list or lists, you must make the request in writing to maintain the integrity of the system. An informal phone call is not sufficient. Notify Judicial Aide in writing of any change of address, in addition to any other notices you are giving the Court. The County’s vendor-payment records are separate from the case management system, which the Assignment Clerk updates. This will help you receive payments. Appearing late, failing to show for scheduled events and/or failing to obtain coverage are violations of attorneys’ duties under the Local Administrative Order for appointment of counsel. Attorneys on the lists must complete their continuing legal education and provide the MCBA with proof. The lists will be reviewed by year end for those who have not followed through on this. Attorneys have to stay current with their MCBA dues. Noncompliance with any of the requirements will be referred to the appropriate oversight committee.
Dueling Presumptions...Michigan Supreme Court Declares Winner By Robert Ihrie, Ihrie O'Brien
?On July 31, 2009, the Michigan Supreme Court decided the case of Hunter v. Hunter (Docket No. 13610) finally reconciling two competing presumptions which have been the source of domestic relations confusion for years. The case involved a young married Indiana couple who, after suffering from drug addictions and other difficulties, relinquished their four children to Michigan relatives via a limited guardianship, later to become a full guardianship. After several years of court-ordered drug rehabilitation and ramped-up supervised parenting time, the custodians (guardians) petitioned the circuit court for legal and physical custody. The biological mother opposed the petition.
After a Friend of the Court preliminary hearing on the issue of mother's fitness, the referee determined that the mother was an unfit parent and that there was an established custodial environment with the plaintiff-guardians. A subsequent hearing was held in the circuit court resulting in a finding in favor of plaintiff-guardians. Mother appealed to the Court of Appeals. In a split, unpublished opinion, the Court of Appeals affirmed the custody determination for the guardians. Mother appealed to the Supreme Court.
The primary issues were (1) what is the proper application of MCL 722.25(1) and MCL 722.27(1)(c) and (2) whether the federal constitutional standards concerning the fundamental rights of parents to raise their children control the answer to the first question.
The Michigan Legislature, in 1970, enacted the Child Custody Act (CCA). Included therein are two statutory presumptions pertinent to this case. In this regard, MCL 722.25(1) reads as follows:
If a child custody dispute is between the parents, between agencies, or between third persons, the best interests of the child control. If the child custody dispute is between the parent or parents and an agency or a third person, the court shall presume that the best interests of the child are served by awarding custody to the parent or parents, unless the contrary is shown by clear and convincing evidence.
On the other hand, MCL 722.27(1)(c), provides, in part, as follows:
If a child custody dispute has been submitted to the circuit court as an original action under this act or has arisen incidentally from another action in the circuit court or an order or judgment of the circuit court, for the best interests of the child the court may do 1 or more of the following:
(c) Modify or amend its previous judgments or orders for proper cause shown or because of change of circumstance . . . .The court shall not modify or amend its previous judgments or orders or issue a new order so as to change the established custodial environment of a child unless there is presented clear and convincing evidence that it is in the best interest of the child. . . .
A conflict of presumptions arises when a court must decide a custody dispute between a child's natural parent and a third party with whom the child has an established custodial environment. The court, after citing Troxel v Granville, 530 US 57; 120 S Ct 2054; 147 L Ed 2d 49 (2000), heralding the fundamental constitutional nature of the rights of parents, concluded that the presumption in favor of the natural parent must control.
The Hunter opinion goes on to reject the notion that only a "fit parent" is entitled to the presumption, thereby overruling Mason v Simmons, 267 Mich App 188; 704 NW2d 104 (2005). Rather, the Hunter court concluded that the issue of "fitness" is a matter for consideration in the context of the best interest factors and is not a threshold question in determining whether to apply the presumption in the first place.
As a result of this case, natural parents will now be definitively cloaked with the presumption that it is in the best interests of the child to be with the natural parent, even when there exists an established custodial environment in a third person or agency. In order for the parental presumption to be rebutted, the third person must show by clear and convincing evidence that it is not in the child's best interests for the parent to have custody under the factors specified in MCL 722.23.
Robert D. Ihrie is a partner in the Law Firm of IHRIE O'BRIEN and practices domestic relations law.
Estate Planning: Being an Attorney AND "Counselor" By Kristen J. Kosciolek, Martin Bacon & Martin PC
Estate planning attorneys advise clients with different needs every day. Some clients are concerned about taxes, avoiding probate asset management for minors or many simply want to make sure that Great-Grandma’s quilt gets to the right person upon their passing. No matter what the need, we advise our clients about the best plan that fits within their means. I have recently realized that being a legal advisor without being a true “counselor” is doing a disservice to my clients. Call it an epiphany or the proverbial light bulb going on over my head, but a recent personal experience has made me realize how much more I could offer my clients and in turn how much better an attorney I could be.
We in the practice have all seen a grantor who through his/her estate planning documents attempts to assert control from the afterlife. Sometimes control is a great idea, like determining how much money an heir receives at certain intervals because such heir has historically not been good with money. Sometimes control is not such a great idea, like posthumously controlling people and their emotions.
In many cases, there is no love lost in blended families – to which I can personally attest. Until recently, I advised clients on the legalities of what they wanted to do with their money, specific gifts, the family company, or stocks, with or without restrictions or conditions. Now, I counsel clients on their proposed ideas and walk them through the realistic consequences of their choices. I seem to be asking clients the question “why?” more than I ever did in the past to try to get an understanding of the basis for their choices. While this takes a little longer, and at times I feel like I should replace my office chairs with couches for my clients to recline upon, I find many clients have really not thought through the real life ramifications of their estate plans. Specifically, will the plan work in the real world and, ultimately, what results may occur?
Sometimes I hear “what do I care what my (family member) feels about what I decide – I’ll be dead.” I used to smile at that statement. Not anymore. I now tell my clients that if they care at all today what a person thinks of them shouldn’t they care what they will be thinking of them when they are gone? Do they want their family recalling funny stories and happy memories on a sunny day in a backyard over drinks or thinking instead “how could he/she have done this?” . . . “What was he/she thinking?” Or – much worse. Choices in an estate plan can destroy good memories. Don’t think it can happen? I can tell you from personal experience that it can. I was recently in that backyard with family and trust me, difficult family situations with poorly advised estate plans result in tears, anger, business problems, and sadly the loss of that person again.
People say that it is only about money when heirs complain about the outcome of an estate plan. In many cases, money is the root of an heir’s displeasure. We in the practice see it all the time. However, on the flip side, I now see that many times it is less about inheritance and more about the feelings of hurt and disillusionment that causes complaint. Personally, I can state that true strife amongst a family, blended or otherwise, comes from someone trying to assert a level of control over your feelings and emotions after they are gone.
There are some clients that have their plan firmly settled and that is okay. I simply prepare their legal documents and wish them, and their families, the best. My personal experience has been tough and sad. However, I am trying to look at it as a learning experience. Maybe next summer I can share a drink with my siblings on a beautiful Michigan summer day and recall good things about our family member. I truly hope so. I think he would be sad to hear our thoughts, to see the total and complete breakdown of the extended family he had so hoped to have maintained contact after his death. His overall plan has been a complete failure in so many ways.
They say what does not kill you only makes you stronger. In my case, it has made me a better attorney. What I have learned is to listen to my clients so as to hear more than they are telling me and then provide them with the best legal plan to effectuate their desires while taking the time to counsel. I hope that my experience helps my clients and their families to avoid similar results and that my story can help others in the practice as well.
Legal Issues Surrounding H1N1 in the Workplace By Gillian P. Yee, Ogletree Nash Smoak & Stewart PLLC
Background on Swine Flu / H1N1
After dealing with the economic downturn and the new FMLA regulations, amended ADA obligations, and new COBRA requirements, HR and legal professionals now move on (or perhaps return) to pandemic planning. The strain of influenza which has prompted the latest preparedness initiative is influenza A (H1N1). The media attention and public interest are intense, especially after the World Health Organization (WHO) signaled on June 11, 2009 that a global pandemic of H1N1 was underway by raising the worldwide pandemic alert level to Phase 6. This action was a reflection of the spread of the H1N1 virus, not the severity of illness caused by the virus. At the time, more than 70 countries had reported cases of H1N1 infection, and there were ongoing community level outbreaks of H1N1 in multiple parts of the world.
As of the date of this writing (September 22, 2009), there have been over 296,471 cases of H1N1 in 11 countries. The WHO Regional Offices, including Africa, the Americas, Eastern Mediterranean, Europe, South-East Asia and Western Pacific have reported at least 3,486 deaths from the H1N1 strain.
OSHA Issues
The federal Occupational Safety and Health Act (OSH Act) requires employers to maintain a workplace that is “free from recognized hazards” that may cause serious injury or death. This provision is referred to as the “General Duty Clause.” To prove a General Duty Clause violation, OSHA would have to prove that the H1N1 virus was actually present in the workplace and that the efforts undertaken by the employer to control exposure were insufficient. The scope of an employer’s obligations under the General Duty Clause depends upon the circumstances. For example, the obligations of a hospital treating patients infected with H1N1 will be very different than the obligations for a typical office. Also, an employer’s duty now may be different than it is a week or month from now if the virus becomes more prevalent in the United States or demonstrate a greater ability to be transmitted from one human to another.
Employers should also be aware of other OSHA requirements that may relate to the H1N1 virus. Specifically, OSHA’s recordkeeping regulation (29 C.F.R. Part 1904) requires employers to record work-related injuries and illnesses that meet one of the recording criteria on their OSHA 300 Logs. For example, if an employee transmits the H1N1 virus to another employee and time-off or medical treatment is necessary, then the employer must record the illness on the OSHA 300 Log. The recordkeeping regulation does not require employers to record cases of the “common cold or flu” that are transmitted in the workplace, but does require work-related cases of tuberculosis and “other contagious diseases” to be recorded if they meet the recording criteria. It is not clear whether OSHA would characterize the H1N1 virus as the “flu.” Also, if employers provide respirators or dust masks to employees, OSHA’s Respiratory Protection standard, 29 C.F.R. Section 1910.134, applies.
Can an employee refuse to come to work because of a concern that he or she may be infected by H1N1? The answer depends on the circumstances. According to OSHA’s regulations, if the employee has no “reasonable alternative” and “refuses in good faith to expose himself to the dangerous condition,” then the employer is prohibited from discriminating against the employee. The condition “causing the employee's apprehension of death or injury must be of such a nature that a reasonable person, under the circumstances then confronting the employee, would conclude that there is a real danger of death or serious injury and that there is insufficient time, due to the urgency of the situation, to eliminate the danger through resort to regular statutory enforcement channels.” 29 CFR § 1977.12(b)(2).
Workers' Compensation, Privacy Law, FMLA, and ADA Issues
In addition to the OSH Act, H1N1 raises other legal issues related to the workplace. For example, state workers’ compensation laws cover illnesses that are contracted in the course of employment, and in the event of a pandemic, how a worker contracted the virus will be an important question. Moreover, privacy laws protect workers from undue intrusion into the medical information related to employees, and generally employers are entitled to discover only information that bears on the employee’s ability to perform essential functions and that could increase the risk to others. H1N1 will also most likely qualify as a “serious health condition,” entitling an employee to leave under the Family and Medical Leave Act (FMLA), if the employee is otherwise eligible for FMLA. The new, lower thresholds for disability coverage under the Americans with Disabilities Act (ADA) also come into play. Returns to work are subject to guidance from, as applicable, the FMLA and the ADA.
Labor Law Issues
Additionally, H1N1 creates issues under the National Labor Relations Act (NLRA). To be covered by the NLRA, an individual's refusal to work based on employee concerns about safety and health (i.e., the strike) must be “concerted protected activity.”
There is a fairly low threshold to satisfy the NLRA's “concerted” requirement for safety and health concerns, although employers would be wise to consult with labor and employment counsel before deciding that an employee statement or activity is “concerted.”
The strike also must be “protected.” Unlike the OSH Act, the NLRA does not require an individual to have a “reasonable” belief that a situation is unsafe in order to refuse to work (i.e., there is no mandatory “reasonableness” requirement for a strike based on safety issues or concerns). NLRB v. Washington Aluminum, 370 U.S. 9, 16 (1962) (“It has long been settled that the reasonableness of workers’ decisions to engage in concerted activity is irrelevant to the determination of whether a labor dispute exists or not.”); Odyssey Capital Group, LP, III, 337 N.L.R.B. 1110, 1111 (2002) (quoting Tamara Foods, Inc., 258 N.L.R.B. 1307, 1308 (1981) (“[i]nquiry into the objective reasonableness of employees’ concerted activity is neither necessary nor proper in determining whether that activity is protected . . . . Whether the protested working condition was actually as objectionable as the employees believed to be . . . is irrelevant to whether their concerted activity is protected by the Act”).
The NLRA does include a reasonableness “option” (though not a requirement). If the employee's belief is reasonable, there are additional restrictions on employers – in particular, employers cannot replace strikers who satisfy this “reasonable belief” element. Section 502 of the Labor-Management Relations Act (LMRA), a 1947 law that amended the NLRA, states, “[N]or shall the quitting of labor by an employee or employees in good faith because of abnormally dangerous conditions for work at the place of employment of such employee or employees be deemed a strike under this chapter.” Under Section 502, employees do not have to prove the actual existence of abnormally dangerous working conditions; they need only prove that they have a good faith belief – supported by ascertainable, objective evidence – that their working conditions are abnormally dangerous. If an individual satisfies this Section 502 “reasonable belief” element, the striking employee may not be replaced.
A bit of good news for employers, however: If there is no immediate danger to employees based on the Section 502 “reasonable good faith belief” standard outlined above, employers generally can bring in replacements and permanently replace a striker who refuses to work because of safety concerns or issues.
As with all protected, concerted activity, employees may not be disciplined for engaging in the protected, concerted activity. Employers can refuse to pay strikers, although employers should beware of FLSA wage-hour guidelines regarding exempt non-supervisors.
WARN Issues
H1N1 also may bring up issues under the Worker Adjustment and Retraining Notification (WARN) Act. A plant closing or mass layoff (as defined in WARN, generally exceeding six months) because H1N1 still requires 60 days’ advance notice. There are two exceptions to WARN which allow for a shorter notice – the “national disaster” exception and the “unforeseeable businesses circumstances” exception. A plant closure or mass layoff because of H1N1 would not satisfy the current definition of the “national disaster” exception but might satisfy the “unforeseeable business circumstances” exception.
Conclusion
It is one thing to understand the risks of the pandemic, and another to monitor its progress so that appropriate steps may be taken in light of the risk involved. The government has various organizations involved in educating the public both on the pandemic risks and the progress of the disease. One of the most informative websites about the H1N1 virus is http://www.pandemicflu.gov The CDC, the National Institute for Occupational Safety and Health (NIOSH), and other organizations have helpful information on their websites as well. Also keep informed on efforts on the development of a vaccine, development and production of antiviral medications, and pandemic preparedness plans discussed by companies and organizations.
Because “swine flu” improperly suggests a problem with pork products (i.e., it is not foodborne from pork products), we call this strain of influenza by its technical name – “H1N1.”
Given that countries are no longer required to test and report individual cases, the number of cases reported actually understates the real number of cases.
Formerly, the general rule was that Section 502 applied only in a unionized context (e.g., when an employer has an expired, to-be-negotiated, or current collective bargaining agreement with a union). However, the National Labor Relations Board (NLRB) and at least one federal circuit court have held that Section 502 applies to all employers, whether unionized or not. TNS, Inc., 329 N.L.R.B. 602 (1999), vacated on other grounds, TNS, Inc. v. NLRB, 296 F.3d 384 (6th Cir. 2002).
NLRA Section 7 rights are not applicable to “supervisors,” as defined by the NLRA and interpretive case law.
Bankruptcy Q & A: Reaffirmation Agreements By Christopher Julliet, Becker & Lundquist PLC
As odd as this might sound at first blush, not all debtors wish to discharge all debts during the process of seeking bankruptcy protection. When a debtor wishes, for example, to keep a car or truck held subject to a lien or keep the home held subject to a mortgage, most creditors will require the debtor to execute an agreement reaffirming the debtor’s obligation to pay the debt. In bankruptcy, this is known as a reaffirmation agreement.
What is a reaffirmation agreement?
A reaffirmati
on agreement is a legal agreement between debtor and creditor under which the debtor renews his or her obligation to pay all or some of a debt that otherwise will be discharged in bankruptcy. Such an agreement should include the new principal balance of the debt, the interest rate, payment terms and collateral. Accompanying the agreement should be a declaration by the debtor’s attorney stating that the agreement and debtor’s agreement to reaffirm the debt is “in the debtor’s best interests” (assuming, of course, that it actually is—if not, the debtor should take another course). As a practice tip, it may be advisable for you, as debtor’s attorney, to not sign a declaration and instead, have the debtor go before the Court for approval of the reaffirmation agreement.
When is reaffirmation a good idea?
Well, each case is different, but reaffirmation agreements are generally useful when your debtor client wishes to keep the car or boat or house and believes that he or she can keep the payments current. That’s the upside—they keep the property securing the debt. The downside is that if the debtor later can’t make the payments and the property is repossessed, the debt remains in full force and effect, even after the bankruptcy is completed. As just stated, the reaffirmation of the debt must be in the debtor’s best interests.
Another situation where reaffirmation might make sense is when a creditor is willing to forgive a portion of a debt that is arguably non-dischargable. Agreeing to pay a part of the debt can bring more certainty to the situation, which is what debtor clients (and creditors as well) really want from the bankruptcy process.
When dealing with debts owed to family members, reaffirmation might “politically expedient” to keep the peace. However, even without a reaffirmation agreement, debtors can still pay family debts even if those debts are discharged in bankruptcy.
Is reaffirmation ever a bad idea?
Yes, when debtors want to “keep the credit card” or “maintain the line of credit,” reaffirming the debt might not be a good idea or in the debtor’s best interests. Many credit card issuers will close debtor’s accounts soon after the bankruptcy is filed, even if those accounts are current. Reaffirming such debts is not unlike throwing good money away. In many cases, there is simply little incentive to reaffirm such debts.
In any event, beware the creditor’s attorney who shows up at the Meeting of Creditors (the “341 meeting”) armed with reaffirmation agreements that are “really short—only a paragraph or two, so can you just review this here and have your client sign it—right now?” Resist the temptation to look these over on the fly and recommend your client sign. Debtor is under no obligation to enter into such an agreement and cannot be coerced into doing so. A better move is to take the unsigned agreement back to your office and there, in relative calm (relative, at least to the din of the crowded waiting room outside the 341 meeting rooms), discuss with your client the pros and cons of the agreement, then let the client decide what to do. You and your client have time, up to 30 days after the 341 meeting, to file those reaffirmation agreements that are in the debtor’s best interests. Don’t be pressured.
Is reaffirmation automatic once the agreement is executed?
No. Reaffirmation agreements are subject to the approval of the Bankruptcy Court. In fact, a debtor who enters into such an agreement without legal representation is required to appear at a hearing before a judge, who will determine whether the reaffirmation agreement is valid. At that hearing, the debtor will be required to prove that the reaffirmation agreement is in his or her best interests, including that the debtor will be able to make the payments described in the agreement. During that hearing, the debtor can expect to be questioned by the creditor or creditor’s attorney, but since most creditors prefer to be repaid rather than discharged, those questions are generally framed to get obtain responses that will support court approval of the agreement.
Can a reaffirmation agreement be rescinded by
the debtor?
Yes. The debtor has up to 60 days to inform the creditor that he or she has rescinded the reaffirmation agreement. Such a rescission should be in writing.
What if the debtor doesn’t sign the reaffirmation agreement?
It depends upon the creditor. Most car dealers or lenders really don’t want the collateral—they want the payments. As long as the debtor stays current with his or her payments, it’s not very likely that the lien holder will come out and repossess the vehicle (although you need your client to know that it can happen). The same is true for mortgage lenders, who have just about all the foreclosed properties they can stand these days. In a recent bankruptcy our firm handled, I called the mortgage lender to ask for a reaffirmation agreement only to be told that they don’t execute them. Instead, I was asked to suggest to my clients that they stay up to date on their house payments and all would be well. Of course, this could change when property values recover, so exercise caution. I made a file note and moved down the list.
Christopher Juillet is a principal in Becker, Lundquist & Juillet, PLC, a Mt. Clemens-based law firm focusing on personal and commercial bankruptcy and asset protection. For more information, contact Chris at 734-827-9450 or cjuillet@bljplc.com.
The Enduring Myth of "Physical Custody" in Family Law By Craig Feringa, Law Offices of Craig Feringa
Sometimes long held beliefs and practices should be reviewed for accuracy, and even though entrenched, if those are shown to be inaccurate, they should be discarded. Such an event occurred this year when the U.S. National Geodetic Survey determined that the monument marking the spot where Utah, Colorado, New Mexico and Arizona join is approximately 2 ½ miles from the location where the four corners of these states actually meet. Despite the fact that for 110 years, thousands of people from all over the world have taken pictures of themselves touching four states at once, and despite the fact that the there is an elaborate monument erected, the original surveyors were wrong, and those people were not standing at the “Four Corners”. Someone decided to go back, check the data with the tools available and make the correction. As lawyers we should do the same, and if long held practices are not based in law, then they should be challenged, and if shown to be inaccurate, discarded. The awarding of “physical custody” is, in this writer’s opinion, such a practice and should be left behind.
The notion of “physical custody” is probably the most litigated and emotionally charged issue in family law cases. In some courts, it is the “Holy Grail” in a DM, DC, or DS case. It is the part of the case where it is the most important to know your judge and how he/she defines the term. It is a term that evokes the most extreme emotions between litigants and, consequently, promotes the most mudslinging and defensive (or offensive) parenting. During the litigation, parents are discouraged from facilitating additional parenting time with the other parent to thwart arguments for a more shared parenting time schedule. Parents will inconvenience themselves and spend a large amount of money on day care just to prevent the other parent from parenting the children on “their day”. Good parenting takes a back seat to selling one’s self as the better parent to the children and to the Court. An attorney once advised a parent to get a puppy or kitten in order to emotionally coerce the child to stay with them ….”Fluffy will miss you so much when you are gone”. In all cases where the parents are fighting to have the term “physical custody” awarded, the children endure the adverse consequences.
Different judges, Friend of the Court referees and custody evaluators define, weigh and incorporate the term “physical custody” differently. Some consider “sole physical custody” to only include a parenting time plan that provides the every other weekend type of schedule to the “non-custodial” parent. Some consider the parent with the majority of parenting time as the parent with “physical custody” of the children. Some consider the parent who has the children the majority of school nights as the parent with “physical custody”. Some judges insist on the term “physical custody” being included into a judgment, and some judges insist that the term is not included in the judgment. In one case, a judge settled a case by including the term “joint physical custody” to a parenting time plan that was a “standard” every other weekend type of a plan. Another judge refused to enter a judgment that didn’t contain the term “physical custody”. Some Friend of the Court investigators refuse to modify parenting time plans from an every other weekend type of plan unless there is also an order modifying custody from “sole physical custody” to “joint physical custody” A Macomb County Friend of the Court notice misquotes MCL 722.26a’s requirement to advise parents of the existence of joint custody. Instead of using just the statutory term of “joint custody” the Friend of the Court includes the term “joint legal custody”. So, does “physical custody” exist? If so, what is it?
Every power exercised by the Circuit Court must have its source in a statute or it does not exist. In Michigan, child custody is governed almost exclusively by the statutes contained in Chapter 722 of Michigan Compiled Laws, and most specifically, in P.A. 1970, the Child Custody Act of 1970. If, therefore, there is no provision that defines and authorizes the Circuit Court from awarding “sole physical custody” or “joint physical custody” to one person or another, then the award has no basis in law, and the court does not have the authority to award it.
The Child Custody Act of 1970 requires “[i]n all actions involving dispute of a minor child’s custody, the court shall declare the child’s inherent rights and establish the rights and duties as to the child’s custody, support, and parenting time in accordance with this act”. The factors to be considered by the court are provided in MCL 722.23 and are commonly known as the “best interest factors”. The act requires that the parents be advised that, if requested, joint custody shall be considered by the court and that the court may consider it even if it is not requested. The term “physical custody” is used once in the Child Custody Act and used as its common definition to describe that the physical care and control (custody) of the children. MCL 722.26a(7) defines “joint custody” to mean one or both of the following: (a)”that the child shall reside alternately for specific periods with each of the parents” or (b) that the parents shall share decision-making authority as to the important decisions affecting the welfare of the child”. An award of “joint custody” can, therefore, be awarded if there is any specific overnight parenting time plan, and/or the court authorizes joint decision making between parents.
MCL 722.27a provides that “parenting time shall be granted in accordance with the best interests of the child” Further, the statute provides that “parenting time shall be granted to a parent in the frequency, duration, and type reasonably calculated to promote a strong relationship between the child and the parent granted parenting time.” The statute does not prevent some parenting time plans from being ordered if one parent already has been awarded “sole physical custody”. The frequency and duration of parenting time is not dependent on any custody label. Utilizing the language of the statute, therefore, the only analysis to be used for parenting time should be the best interests of the child factors as provided in MCL 722.23. For the court to do otherwise is exercising authority the court has not been granted.
To conclude, the authority and process of child custody and parenting time litigation is provided by Michigan statutes that include the Child Custody Act of 1970. The statute authorizes the award of “custody” or “joint custody”. This term only describes whether the children reside with one or both parents for specified times of any duration, and/or whether one or both parents share decisions making responsibilities. The statutes do not define or otherwise provide the Court with authority to include an award of “sole physical custody”. In this writer’s opinion, the terms “sole physical custody” and “joint physical custody” are legal myths that should be debunked.
