HD Law Partners Blog

When it comes to owning and operating a business, not only is it important to ensure that all of your financials and tax information is in order, but there are a number of operations you want to make sure are in order at the end of each year. Forgetting even one of these important tasks could set your business back.

Below, we discuss some of these important activities, and how a business/corporate lawyer can help you ensure that everything is in place as we enter 2019:

Forming or Dissolving a Business

If you are in the process of forming a business, and you are interested in incorporating or forming a limited liability company (LLC), you may want to work with your attorney in considering delayed filing, which allows you to set an “effective on” date in the near future that is realistic for your plans. And if, conversely, you are dissolving your business, remember that you need to work with an attorney to file your Articles of dissolution with the Secretary of State in order to ensure that certain obligations, such as paying state fees and taxes, cease.

The estimated damage – just to agricultural resources – from Hurricane Michael across Florida and several other states is forecast to go over $1.3 billion, and includes cotton farms, pecan farms, and poultry operations as some of the hardest hit. Hurricanes are especially damaging to cotton crops, leading to an increase in the price of cotton. It is clear that farmers in particular are going to need all the help they can get in order to recover, and most of that help will need to come from crop insurance.

Florida also suffered significant timber losses as well. An estimated three million acres of timber were damaged by the hurricane, along with other commodities. It will likely take years for the industry to recover and replace lost trees.

In anticipation of these losses and those expected to hit homeowners, in mid-October, Gov. Rick Scott ordered emergency changes to insurance rules as they apply Hurricane Michael recovery, specifically. Under these rules, not only do policyholders now have an extra 90 days to submit their claims, but insurance companies are prohibited from canceling or failing to renew homeowners’ policies on homes damaged by Hurricane Michael for 90 days as well. In addition, Florida’s insurance regulator issued an emergency order that freezes any rate hike for 90 days in order to support recovery efforts in areas impacted by the Hurricane.

While new technology is expected to solve a number of our problems–from reducing human error to growing the global economy–it is also expected to have a significant effect on corporate liability, commercial litigation, insurance litigation, and product liability claims. As the industry grows in complex technology, companies and insurers need to make sure that they consult the right attorneys so that they ensure that their claims processing is up-to-date because, as cyber risk liabilities increase, so too does liability for manufacturers, suppliers and providers.

Take, for example, liabilities surrounding cyber security and the increasing digitalization of society: liability and litigation is becoming more and more complex and technical, especially as data protection rules become stricter and carry stiffer penalties in response to governments trying to bolster cyber security and protect privacy. An accident no longer involves just two people, but manufacturers, software providers, and other third parties, all requiring that insurance claims handlers and other experts understand specific algorithms involved in order to determine the cause of accidents.

For many people, divorce is time consuming and emotionally draining, which explains why some are tempted to make some considerable financial mistakes during the process. While this is understandable, we as attorneys practice in divorce and family law frequently have to address some of the financial fallout from this decision-making, which then makes the entire process that much more difficult.

Below, we discuss how to avoid making the most damaging financial mistakes while going through divorce:

First and foremost, do not let yourself go out and buy a big ticket item, like a new car or house. While these items might have been financially feasible before, you may very well find that they significantly interfere with your ability to stay on top of new finances that you are now solely responsible for.

Also be careful about cashing in on investments and 401(k)s to pay the bills. Keep in mind that “cashing out” on these items could lead to substantial tax consequences; even potentially placing you in a higher tax bracket for the entire year, which can affect other payments, such as student loan payments. Also, even if you cash in on 401(k) funds that have already been taxed, you can get hit with a penalty by the IRS for cashing in on those funds before you turn 59 ½.

Many parents these days find it difficult to find that right life-balance when it comes to juggling career, child support, and shared custody after divorce. Recently, CNN ran an interesting piece focusing on some perspectives of fathers, in particular, who feel that the system has let them down. Some of these fathers have spent time in jail because they were unable to pay court-ordered child support; gone bankrupt; or even been altogether barred from seeing their children due to civil protection orders. And not all of them ended up in custody battles due to divorce: some learned all too late that they had fathered children but were excluded from the child’s birth certificate.

According to the statistics, even today, more than 80 percent of custodial parents are mothers. Does this mean that men automatically do not get a fair shake when it comes to custody cases? Laws in states like Florida and elsewhere were supposed to prevent this phenomenon by focusing on what is in the best interests of the child. Still, that doesn’t mean that men do not sometimes get the short end of the stick due to judges’ traditional perspectives. Below, we offer some insight on how fathers can avoid acrimonious outcomes in circumstances like these.

The longstanding standard of what constitutes bad faith in Florida was determined by the Florida Supreme Court almost 40 years ago. The Court determined that an insurer has a duty to use the same degree of care and diligence as someone “of ordinary care and prudence.” Insurers must investigate the facts, give fair consideration to settlement offers and–where a reasonably prudent person would–pay total recovery.

However, two recent appellate decisions have made some important changes to what constitutes a bad faith insurance claim in the context of third-party liability claims, as we discuss below.

Eleventh Circuit Decision

The first of those decisions—by the Eleventh Circuit—upheld a lower court decision finding that Geico deciding to offer settlement limits twenty days from the first notice of the claim was not done in good faith as a matter of law. The court ultimately upheld the jury verdict in favor of plaintiffs, finding that the jury was reasonable and had enough evidence to conclude that Geico had acted in bad faith.

In September, a lawsuit was filed against Tower Hill Insurance in Florida, alleging that the company engaged in fraud concerning a number of claims filed by Hurricane Irma victims, defrauding them of money that they are owed. The lawsuit specifically alleges that Tower conspired with two other companies—Humble and Ladder Now—to deny or underpay compensation on various insurance claims filed by the hurricane victims.

According to the complaint, Ladder Now is an “unlicensed independent adjusting firm” that effectively worked with Humble, a consulting and restoration firm, to doctor fake engineering reports that ultimately found little-to-no damage done as a result of the hurricane. As a result, the lawsuit not only accuses Tower Hill of fraud, but also of mail and wire fraud, theft, and the use of unlicensed adjusters and engineers to systematically rob policyholders of premiums. The complaint alleges not only past harms to these policyholders—but ongoing harm—as a result of Tower’s allegedly nefarious activities.

According to a new study, Florida’s third-party bad-faith legal environment increases claim costs for every insured vehicle by an average of $106 per claim, or a total of more than $7 billion in additional claim costs over more than a decade. According to some experts, most of these costs can reportedly be attributed to the rapid growth of bodily injury liability claims, as well as Florida’s legal rules and standards when it comes to resolving bad-faith allegations.

Under Florida law, anyone can bring a civil action against an insurance company if they have been damaged by the company’s failure to attempt, “in good faith,” to settle claims when, under all circumstances, they could and should have done so, while acting fairly and honestly towards the insured, with due regard for the insured’s interests.

The report compared key bodily injury liability claims in Florida to similar trends in three other states that are all no-fault (like Florida); specifically, New Jersey, New York, and Pennsylvania. According to the results, these three states experienced relatively stable injury claims over the study period after taking primarily administrative approaches to investigating and resolving bad-faith allegations on behalf of car insurance companies. Conversely, Florida’s trends did not reflect this kind of stability.

While many think of the housing crisis as a thing of the past, in fact, a decade later, it still haunts a number of homeowners, especially in Florida, where many have to deal with foreclosure defense on a daily basis. Just between 2007 and 2016, there were close to eight million foreclosures in the U.S.

For those affected, losing their home isn’t just a matter of losing their most valuable asset, but of losing the source of countless memories of holidays, birthdays, graduations, and other important moments in their lives. It also means that their credit is destroyed, and any future mortgage that they pay will include a very high interest rate.

The Disparities Are Often Racial and Income-Based In Nature

Although the homeownership rate has rebounded in recent years, it remains well below the high it reached immediately prior to the foreclosure crisis. As of the summer of 2018, only approximately 64 percent of all households own their home.

For anyone who has gone through it or had friends or family go through it, you know that divorce is rarely an “easy” process, especially if it is contentious and children are involved. Some children can go through a variety of worries as a result; worries that include potential guilt, fear of abandonment, fear of change, worries that they might hurt one parent if they spend more time with the other one, etc. Some also act out and develop behavioral issues as a result.

Given that divorce is inevitable in some circumstances – and sometimes, it is also simply healthier to go your separate ways rather than expose your children to a toxic relationship – note that there are steps you can take to ameliorate the effects of divorce on your children, keeping in mind what they need most from you, as we discuss below.

The phrase “be the adult” is arguably both obvious and confusing at the same time. Obviously, you are the adult, so what exactly does this mean? It means that, while your children acting out can be expected during this time, it is also important that your children know that certain types of behaviors are still unacceptable, and if the “heat of the moment” isn’t the best time to address these behaviors, you will circle back to it the next day, noting that, you understand that your child is going through a lot, but it is still not OK to do x, y, and z. In other words, according to the experts, what your child needs is a decisive leader who is also supportive and understanding, and who will provide them with a stable environment, even when things get stressful.