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Bar Briefs August 2007
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Bar Briefs
August 2007• Volume 26• Number 02

"Honored and Blessed to Serve"

About the President
by William L. Staugaard

"The Power of Association"
From the Executive Director
by Rick R. Troy, Executive Director

Circuit Court Corner
by Keith Beasley

"Parental Consent Bypass Hearing:
FAQ's for When You Get the Call
Feature Article
by Eric Lundquist Jr., Becker & Lundquist PLC

"Adding Insult to Injury:
Collins & Aikman Seeks to Recover
Preferential Transfers

Bankruptcy Article
by Ralph Colasuonno & David S. Maquere,
O'Reilly Rancilio PC

From the President
"Honored and Blessed to Servc"
by William L. Staugaard

Let me begin by saying thank you ! I am honored and blessed to serve as the President of the Macomb County Bar Association. According to the Random House Webster’s College Dictionary, the definition of the word honor includes among its various terms the following: the privilege of being associated with or receiving a favor from a respected person or group. The word blessed includes in its definition the words: favored, fortunate, bringing happiness and thankfulness. I truly consider the opportunity to serve as your President, a high honor and a privilege.

One of Macomb County’s great resident philosophers, Otis Hopson, constantly reminds me, on a regular basis, of the importance of a proper attitude and outlook on life. Whenever I stop to talk and spend some time with Otis in the lobby of the Macomb County Court Building, invariably I’ll get around to asking, “How are you doing Otis?” Otis's response, without hesitation is, “I’m blessed!” It doesn’t matter what time of the year it is. It doesn’t matter what the weather outside is. It doesn’t matter what legal issues are being decided that day in the various courtrooms in the building. I am also sure that there have been days when things haven’t always been the best for Otis, but he always reminds me that he is blessed.

Sometimes I think we need to stop and take time to reflect and take inventory of the things, people, situations and circumstances that cause us to be blessed also. Who and/or what is on your list? I’m blessed by:

• A loving wife and family who keep me balanced. .
• Parents who encouraged me that I could be whatever I wanted to be? I didn’t have to be an engineer like Dad.
• Good and wonderful friends.
• Good associations with two law firms over the 27 years that I have practiced in Macomb County.
• Great secretaries, administrative assistants and paralegals who have helped get those documents out for filing at 4:25, 4:30, 4:45, etc.
• The Bench and Bar of Macomb County who have always prided ourselves on a close working relationship and open lines of communication and who will continue to do so in the future.
• The legal support staff throughout the courts and law offices of Macomb County who make it work.
• The clerks, the secretaries/administrative assistants, paralegals, court reporters, bailiffs, referees, and on and on.
• Macomb County Bar Association and Bar Foundation Staff. (Rick Troy, Dawn Fraylick, Patti Manick, Tracy Stabryla )
• The Board of Directors of the Macomb County Bar Association who are a dedicated and enthusiastic group of individuals who understand what commitment and service are all about.Finally, as I read through Larry Katz’s excellent publication, 100 Years of Legal History in Macomb County, contained in the just released Macomb County Bar Association Centennial Pictorial Directory, I was reminded of the rich and proud heritage of the Macomb County Bar Association. I reflected on the long and distinguished list of attorneys who have had the honor to serve as MCBA President and was renewed in my commitment to our purpose as the Macomb County Bar Association which is "to advocate and promote the legal profession by providing quality service to all members and to the public", and to our goals which are:

1. Enhance the professional image of the Bar Association and its members.

2. Provide leadership in improving the justice system.

3. Promote civility and mutual respect amongst members and public.

4. Maintain harmonious relationships between the Bench and Bar.

5. Deliver quality member services.

6. Provide quality public service programs.

7. Be sensitive to and advocate member concerns.

8. Foster economic opportunities for members.Being mindful of my duties and responsibilities as President of the Macomb County Bar Association, I am honored and blessed to serve. The terms used by the Random House Dictionary to define the word serve include: “to render assistance; help; to be useful or of service to; to contribute to; promote.” I look forward to serving you, the members of the Macomb County Bar Association. I also want to encourage each and every one of you to get involved and be of service to your Macomb County Bar Association and the Macomb County Bar Foundation. Sign up to serve on one of the many MCBA committees listed in Executive Director, Rick Troy's, article in the June issue of Bar Briefs, volunteer for a scheduled activity or event, write an article for Bar Briefs, make a difference!! I’m proud to be a Macomb County Lawyer!

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From the Executive Director
"Your Membership, Your Choice, A Call to Action"
by Rick R. Troy

The MCBA has 100 years of history to be proud of. Over the past two years we have taken the time to appropriately celebreate this rich history and the many illustrious leaders of law that were a part of it all. And now it is time to build upon this great history.

If we recognize that the building blocks of any organization are its members, then it is true that your bar needs you! If this message sounds familiar it means that you have read it here on these pages over the past two months. Hopefully this time you will send an email or pick up the phone and call to find out how you can influence the future of the MCBA and the legal community that you derive your livelihood from.

Here are just a few MCBA members that are making a difference and influencing their legal community.

Lawrence S. Katz, author of "100 Years of Legal History in Macomb County," published in the MCBA Centennial Pictorial Directory (copies available), ), captures the essence of the MCBA’s history through stories, interviews and archival research. The Directory has recently been included in the archives of the Michigan Supreme Court historical Society.

?Charlie E. Langton, host of the MCBA / MCBF / Sterling Heights Television co-production of “Legally Speaking,” has worked diligently over the past few years to take the law related education television program to new qualitative heights. On June 15 the show brought home two Emmy Awards from the Michigan Chapter of the National Academy of Arts and Television Sciences. These Emmy’s join the first one awarded in 2006, three Wade H. McRree Jr. Awards for Excellence in Legal Journalism and several other television broadcast awards.

?16th Circuit Court Case Evaluation Advisory Committee members
• Hon. Richard L Caretti
• Hon Mary A.
• Hon Mark S. Switalski
• Craig S. Schoenherr, Sr.
• Jeffrey Hartkop
• Keith D. Cermak

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Circuit Court Corner
by Keith Beasley, Court Administrator

Interent Public Access Site

We hope that our Internet access to case information is a useful tool for you. I have heard very positive feedback about it in general. However, there have been increasing problems with the service being overwhelmed by searches and going off-line. After a great deal of technical investigation, it appears that this is most likely triggered by ‘wild-card’ searches in which only partial information is entered and a search of the database begun. There is also evidence that searches of the whole database are being done by corporate users, through wild-card searches. The wild-card feature has only been available since a newer Beta version of Public Access was installed to address some privacy issues regarding the display of disposition information in criminal cases. The vendor has become convinced that wild-card searches must be ended to address these problems.

Therefore, name or case number information will have to be entered in order to obtain results. This might be a bit more work, but should improve access for the intended beneficiaries – Macomb County citizens and users of the Court who need to get information about specific cases. Those with a need for the information usually do have the name or case number information.

Sex Offender Registration

The Court has been concerned about the registration of sex offenders pursuant to the Sex Offender Registration Act, (SORA), MCL 28.721 et seq, following conviction in criminal cases filed in the Macomb County Circuit Court. Sometimes the executive branch has been quite aggressive in registering persons and/or obtaining their consent to registration.

Registration of sex offenders under the SORA has been clarified by the Michigan Court of Appeals in People v Meyers, 250 Mich App 637 (2002) and People v Golba, 273 Mich App 603 (2007). As a result, the Circuit Court has stated its position on the registration of sex offenders pursuant to the SORA to the DOC Circuit Court Probation Office. There are two types of registration: One for ‘enumerated offenses’ is to occur only when a defendant is convicted of an offense defined MCL 28.722(e)(i) – (x) and (xii) – (xiv). Probation Officers are not to obtain the consent of defendants to earlier registration. The second is the ‘catch all’ provision of MCL 28.722(e)(xi). It requires [per case law and MCL 769.1(13)], in addition to a conviction, that the sentencing court first make findings of fact that the conduct underlying the conviction was ‘inherently sexual’ and thus falls within the meaning of MCL 28.722(e)(xi). The sentencing court shall include the basis for this determination on the record and in the judgment of sentence. There is no provision for defendants to ‘consent’ to registration absent these findings.

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Feature Article
"Parental Consent Bypass Hearings: FAQ's for When You Get the Call"
by Alan Polack

A couple of months ago, I got a call from Judicial Aide. "Hi Eric, can you cover a bypass hearing at 1:00pm today?" It was then almost noon.
That all powerful entity that controls me (i.e. my calendar) said I could.
“Sure,” I said. “What the hell is a bypass hearing?”
“You know… abortion waivers.”
“Uh, ok.”
“Thanks, Eric. Have a great day.”
“You too.”
Click. Dial tone.

Crap.I had never heard of this type of hearing; much less know the applicable law. And I had less than an hour to do something about it. I’ve found that in this business, when in doubt, it helps to hit the books and actually read the law. I went hunting for statutes with only the terms “abortion”, “waiver”, and “bypass” to work with. Thankfully, it was quick work, and moments later I had what I was looking for. With statutes in hand, I went to court and did the hearing. It wasn’t that difficult because I had taken the time and researched the law. I recently found out that there have been some lawyers who accepted the chance to represent clients at these hearings, but, by failing to research the matter, they crashed and burned at the hearing. The following FAQ I’ve compiled to quickly get you up to speed on the law so that you can effectively represent your client in a parental consent bypass hearing. 1. What Are These Hearings, Anyway? The Parental Rights Restoration Act, MCL 722.901 et seq. holds that a person may not perform an abortion on a minor without first obtaining the written consent of the minor and 1 of the parents or the legal guardian of the minor. MCL 722.903 (1). However, “if a parent or the legal guardian of the minor is not available or refuses to give his or her consent, or if the minor elects not to seek consent of a parent or the legal guardian, the minor may petition the probate court pursuant to section 4 for a waiver of the parental consent requirement of this section”. MCL 722.903 (2). Note that a petition is not necessary if the matter is a medical emergency. MCL 722.905

That’s where you come in: You represent the minor petitioning the court to allow her to have an abortion performed without her parent’s consent. 2. What Court Has Jurisdiction? Section 4 of the Act originally designated to the probate court, but MCL 600.1021(1)(i) gave this jurisdiction to the Family Division of the Circuit Court. For these hearings, you will likely be in front of a Family Division judge. 3. Who Is The Typical Client? Your client will be a pregnant female under the age of 18. She either doesn’t want her parents to know that she wants an abortion or her parents won’t give their permission for the abortion. Beyond that, the clients’ circumstances will vary. A minor need not be a resident of the State to be eligible for this type of hearing. MCL 722.906.4. Are These Hearings Confidential? Yes. Under the Act, the hearings are confidential and closed to the public. MCL 722.904(2) and (2)(g). Thus, your client’s name is not made part of the record in any way, and she has the right to use only her initials in the petition. However, if the court suspects that the minor has been the victim of child abuse, the judge may report that abuse to the proper authorities, pursuant to the procedures of MCL 722.624. If the minor reveals to the court that she is the victim of sexual abuse, and that her pregnancy is, or may be, the result of sexual abuse, the court is mandated by the Act to perform the duties outlined in MCL 722.904(6)(a) and (b). 5. What Does My Client Have To Prove To The Court In These Hearings? MCL 722.904 (3): “The (family division) court shall grant a waiver of parental consent if it finds either of the following:
(a) The minor is sufficiently mature and well-enough informed to make the decision regarding abortion independently of her parents or legal guardian.

(b) The waiver would be in the best interests of the minor. (Emphasis Added). 6. What Is The Attorney’s Role In These Hearings? Your job is to voir dire your client on the record about certain aspects of her life in order to impress upon the judge that she is mature and well informed to make a decision about having the abortion or this waiver would be in her best interests. If the judge asks for it, you may also be called upon to give a closing argument on behalf of your client, highlighting the positive aspects of her testimony. 7. What Questions Do I Ask? Here’s a very useful outline you can use as a guide for your voir dire of the client. (It was given to me by a social worker who accompanied my client to the hearing I mentioned earlier, so, other than a few refinements, I claim no credit for its creation.) Identification

• Initials of client
• Age
• County of residencePregnancy
• Length of pregnancy
• Tests (What kind? Over
the counter?)
• Been to a doctor?
• Any previous
• Any previous abortions?Education
• Current level
• Grades
• Extra curricular
• Honors, school
government, etc.
• Future plans for
education, goals, etc.Responsibilities/Duties At HomeVolunteer Activities
• School
• Church
• CommunityEmployment
• Past & present, if any
• Future plans (immediate
and long term)Has The Client Received Counseling About Abortion or Anything Else?
• Type (one on one, video,
• LocationParents
• Family composition
• Has pregnancy/abortion
ever been discussed
• If not, describe reason for
not discussing these
mattersAwareness of Alternatives Besides Abortion
• Birth and raising child
• Birth and releasing the
child for adoption
• Boyfriend/father’s
opinion?State of Minor’s Health
• Any history of health
• Awareness of health
risks with abortion
• Abortion procedure
• Complications
• Infections
• Bleeding
• Future miscarriages
• SterilityMinor’s perception of why an abortion without parental involvement is in her best interests

Ever been denied in another court?8. Then What? At this point, the matter is largely out of your hands. The judge will likely ask his or her own questions to the minor, so be sure that your client understands the judge’s question before answering. You might be called upon for a closing argument, so be ready for one. The judge will then either issue a ruling from the bench, or issue one after a recess. Note that the Act requires that hearings must be held with “sufficient expedition”. MCL 722.904(2). It is thus reasonable to interpret this to mean that the Legislature intended the court to act quickly in issuing its decision.

After that, you’re done. If she fails to sway the judge, you may advise the minor that she has a right of appeal to the Court of Appeals. Again, the Act mandates that the appellate proceedings be expedited and confidential, but it is important to advise her that she is on a very short deadline. The notice of appeal must be filed within 24 hours of the issuance of the order denying the petition. The appeal must then be perfected within 72 hours, excluding Sundays and holidays, from the filing of the notice of appeal. MCL 722.904(4).9. How Do I Get Paid? (And How Much?) To get paid, submit the standard Judicial Aide Juvenile billing form. There is a line item for the bypass hearing. Your fee is $100.00. Your payment stub will reflect representation of a “Jane Doe”.

With prom season a few months or so behind us and its accompanying unwanted pregnancies starting to pop up on the radar, it is essential that we all become familiar with this type of hearing, as you may be next on Judicial Aide’s list.

Eric Lundquist, Jr. is a partner in Becker & Lundquist, PLC. He and wife Michelle are proud parents of two Labrador Retrievers.

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Bankruptcy Article
"Adding Insult to Injury: Collins & Aikman Seeks to Recover Preferential Transfers"
By Ralph Colasuonno & David S. Maquera, O'Reilly Rancilio P.C.

You may already have heard the collective gasp uttered by many local automotive design shops, tool & die manufactures, mold makers and other related businesses over the fact that former automotive supply giant Collins & Aikman Corp. (“C&A”) has begun suing for the return of alleged preferential transfers made by C&A to its creditors in the 90 days immediately preceding C&A’s filing of Chapter 11 bankruptcy. In addition to the prospect that they might not collect from C&A on their outstanding accounts, many creditors of C&A face the prospect of having to return money already received and which, most likely, has already been spent. C&A has filed preference lawsuits against approximately 1,000 creditor companies seeking return of alleged preferential transfers.

Under the Bankruptcy Code (the “Code”), a “preferential transfer” is defined as a payment or transfer of the debtor’s interest in property (1) to or for the benefit of a creditor, (2) for or on account of antecedent debt owed before such transfer was made, (3) while the debtor was insolvent, (4) made on or within 90 days before the date of the filing for bankruptcy or between 90 days and one year before the date of the filing for bankruptcy if the creditor was an insider, and (5) such payment or transfer enables the creditor to receive more than the creditor would otherwise receive under the Code.

The purpose of the Code’s prohibition against “preference” payments is to facilitate the equal treatment of creditors. Otherwise, an aggressive creditor might present the debtor with “incentive(s)” to pay its debt to such creditor thereby depleting the bankruptcy estate for remaining creditors. Any creditor that receives a greater payment than others is required to disgorge the payment so that all may share equally. The debtor must prove all five elements set forth above or the payment will not be considered a preference. Even if the debtor is successful in proving the elements, there are a variety of defenses of which the creditor may avail itself to eliminate liability. Any successful challenge to a preference action, therefore, must begin with the proper analysis.

First, the transfer must satisfy the statutory elements. Simply because a creditor is sued for a certain amount does not mean the amount claimed is accurate. More often than not, debtors will use the “shotgun approach” and list a large number of payments – often all payments received by the Debtor during the 90-day preference period – leaving it up to the creditor to closely examine the dates and amounts. For example, a “cash-in-advance” payment would not qualify as antecedent debt and, therefore, would not amount to a preferential transfer. Likewise, any payments received outside the general 90 day preference “window” is not, by definition, a preference payment. Further, a payment made by a guarantor or parent of the debtor, or a payment made from funds held in trust for the benefit of the creditor is not a transfer of the debtor’s property.

Second, the creditor may qualify for protection under one of the available statutory defenses. These defenses are as follows: (a) the transfer was made as a result of a contemporaneous exchange (i.e. C.O.D.); (b) the transfer was made in the ordinary course of business; (c) the transfer involved a security interest in property securing new value to the debtor; (d) the transfer was made after the creditor provided the debtor with new value; (e) the transfer was a security interest in inventory or receivable such as a floating lien that did not impair other creditors; (f) the transfer involved the fixing of a statutory lien; (g) the transfer was of an alimony or child support payment; or (h) the transfer was of property with a value of less than $600.00.

In addition, relatively recent changes to the Bankruptcy Code make it easier for a creditor to prove the defense of whether the transfer was made in the ordinary course of business. Prior to the recent changes, a creditor asserting the “ordinary course of business” defense to a preference claim had to prove that payments for a debt were ordinary between the creditor and the debtor AND ordinary within the industry. Under the 2005 amendments to the Bankruptcy Code, a creditor need only prove either that the debt was paid on ordinary terms between the creditor and debtor OR ordinary terms within the industry. One method for determining “ordinary course of business” between the parties is to analyze the payment cycle during the 90-day preference window (minimum-maximum mean) against prior history, such as the last 12 months. Alternatively, a method for determining “ordinary course of business” in the creditor’s industry is to analyze industry statistics, which are usually available from industry associations. In either case, the “ordinary course of business” defense, like any other defense in a preference action, requires careful analysis of the creditor’s records and often involves the use of expert witnesses.

The defense of any preference action begins with good record-keeping and expert analysis. Any person or entity sued by a debtor such as C&A should immediately begin compiling the necessary information relative to the claims against them. The failure to assemble and properly analyze this information could prove costly.

*Mr. Colasuonno is a shareholder and Mr. Maquera is an associate with the law firm of O’Reilly Rancilio P.C. in Sterling Heights. Both attorneys specialize in commercial litigation.

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