Once again, simple but complex – the rule is that the “client” had a reasonable expectation that such a relationship would be or was established.  Before trying to understand that, we should consider the benefit which the “client” is expecting from the relationship.  Buried in these imaginings are additional myths. While there may be other “benefits”, these capture the most important:

1. Confidentiality
2. Exclusivity (as to that matter) – that is, counsel is legally unable to represent the adverse party
3. Accountability for advice given
4. The right to future services

Confidentiality.  If you have an appointment with an attorney who knows, based upon you setting the appointment, that you want defense against a suit by X for some alleged obligation, then you can expect confidentiality – ususally.  If you tell the attorney that you are going to do a particular thing because you are angry with X, and the attorney is aware that this is a criminal act you are proposing, then forget confidentiality  If you obtain advice from the attorney, and without his or her knowledge, use the advice to commit a fraud, forget the confidentiality.  Those are not reasonable expectationsof confidentiality even in an attorney-client relationship. A recent fraud involving counterfeit Cashiers Checks sent to attorneys, with a legal fee to be withdrawn, and the balance sent to the client DOES NOT give an attorney-client realtionship or privilege.

Exclusivity.  You speak to an attorney you barely know at a function you both attend, and in a conversation blurt out facts about a problem that you have with Y, and are thinking of filing suit; does he do that kind of work?  Unfortunately, the attorney represents Y regularly – what now?  This is difficult.  The setting is not one in which you could reasonably expect confidentiality; however, if you and Y went to court, this attorney may have to first ask the court to determine if he is disqualified from representing Y.  That is likely to upset Y, and the time to ask the court for a ruling will likely be at the attorneys expense.  He could also lose Y as a client.  Do you understand now why attorneys are reluctant to be “open” to such discussions?

What if you were an attorney, and in your early morning e-mail you received a solicitation from someone you don’t know, telling you all their dirty secrets, and asking you to consider their case.  Assume that the story draws you in before you realize what is being asked.  Are you bound to NOT represent the adverse party in this person’s matter?  No.  Until a few months ago, here in Florida the answer would have been “maybe”.  States are now dealing with this more than ten year old question, and for most, the decision has been that such blanket solicitations have no reasonable expectation that an attorney-client is established.  These solicitations come by e-mail, USPS. telephone calls, any of the other delivery services, and soon, I am sure, texting, Twitter and other means.  This is ususally someone trying to conflict potential opposing counsel out of representation – unsuccessfully now that the issue is settled here.  Be aware that the rules do vary in other states.

Accountability.  The coffee clatch advice is dangerous.  In any area of law, there are details which can turn an issue on its head, and lead to a different conclusion and result.  A conversation is a poor way to record what advice was given, if any.  Each of tries to record the discussion at a later time, but it is impossibel to fully do so.  If you were to ask me if the sun is shining, I might first ask if you were asking the lawyer in me for that answer.  Do not laugh!  Alright, so you could not help yourself!  The lawyer in me would answer, “Define shining.”  Believe me, every conversation, even those in this information, is flavored with, “Seek professional advice” because digging  out all the relevant facts is difficult.  Equivocal answers are given in an uncertain world, and ours is all of that.  Yes, we are accountable for our advice; yes, despite evidence to the contrary, we are human – we feel for our clients and really want to solve their problems.  We must avoid an indiscreet bit of advice, for it can, has and will bite us.

Future Services.  With rare exception, the access to counsel is based upon employment accepted by counsel and proper compensation.  Usually we have an agreement that says cooperation, timeliness, etc, although the case law shows this to be implied.  We DO NOT have to work for someone who doesn’t pay per agreement, fails to cooperate and assist, or acts belligerently and abusively.  We cannot drop our client in the mud, for example in the middle of a trial, but we can withdraw except where such would prejudice the client.  At a certain point in some Federal matters, judges will not allow withdrawal.  That is why counsel who starts a Federal case usually requires a sizable retainer, unless the matter is contingent.

The rules are, as in most tax-related areas, both simple and complex.  The simple: an indepedent contractor has to be truly independent.  The complex is in what that really means.  Roughly stated, determing the status is not easy – and once again we say “Don’t try this at home – hire a professional!” – an independent contractor should have a license for their business; business cards and other documents bearing their name or that of their company; insurance; set their own hours and work methods (within safe parameters); price their services or goods; make profits or sustain losses as any other business does; provide their own tools of the trade; generally must work in areas other than that which your business conducts; etc.  For example, as a law firm, if we hire a painter to touch up our office space, that is not our customary business activity.  The more business formalities that are observed, the more likely that person is an “independent contractor.” 

The consequences of improper classification can be severe, including paying the employer’s share of Social Security and Medicare contribution, and the possibility of paying all the income tax which was due from the “employee” for their employment earnings with you – all this plus penalties and interest.  Worse yet is an injury “on the job,” where workers’ compensation should have been provided and wasn’t.  Suddenly you may find yourself determined to be that person’s “employer”, and your potential liability is unlimited.  With workers’ compensation, you are relieved from liability for anything except egregious gross negligence, which is rare. 

Unless you have determined with prudent research by competent specialists that you may employ persons as independent contractors, DO NOT TAKE THIS RISK.  It is just too dangerous.  For a current example of the breadth of this, go to:  http://www.boston.com/news/local/massachusetts/articles/2009/08/11/chelsea_strippers_each_entitled_to_thousands_in_class_action_suit_judge_rules/

Our law is based upon the English system of “Common Law”, but that is another story for later.  The courts system has taken the language English law and adopted it to our law and courts.  We depart from England in many ways, but in one respect we maintain a parallel – you must be admitted to the Bar to practice law.

Judges appointed by the King would travel to towns around England on a “circuit.”  There were no fine courthouses, no great buildings dedicated to justice.  The towns were in a primitive land.  The towns all had a central square, sometimes called the market or town square.  This pattern is present throughout the old towns and villages of Europe, not just England.  We have cycled England and other European countries, and can tell you that the farming villages are a short distance from one another – five to 7 miles, no more.  The market towns are in the center of a hub of such villages, all for the commerce in food, animals and other agricultural products.

Some of the “roadies” for the judge would ride ahead to the next town as the final cases were being heard in the last one.  They would announce that the judge would soon arrival so that litigants could be summoned (think of “Summonses” today), and would prepare the town square for the next court session.  We take our notion of circuit riding judges from this process.

In each town square were vertical posts buried in the ground at numerous points, and projecting above ground to about waist high.  These were used for market day, for fairs and for court.  A “bar” was horizontally secured on the vertical post to enclose an area for the court.  The party asking the court to hear a problem and the person accused of being responsible were not allowed inside.  Only persons whom the judge had recognized as having sufficient knowledge of the law were “admitted to the bar” – allowed inside the area set aside for the court – to make arguments for their clients.  Witnesses were allowed in to testify, and a prosecutor for the Crown in criminal cases.  From this elementary beginning our legal system of advanced education and testing for, even today, admission to the Bar, has emerged.

It is true that under Florida and the laws in many states that the failure to pay for certain kinds of materials or services allows the filing of a lien.  Usually this involves services or materials to improve real property, including construction, repairs, some design and landscaping, and architect and engineering services.  These are specifically protected under statutes, and a provider of materials or services of this type may file a protective lien for the payment of their services even before a failure to pay occurs.  This is the single most common type of lien other than a “judgment” lien.  This lien for improvement of real property has limitation and special notice requirements, and is only applicable to the real property to which the services relate.

Judgment liens are based upon having properly recorded a judgment received after successfully completing a suit against a defendant.  There are technical requirements as to what the judgment must contain to be recorded and thus become a valid lien.  The judgment lien is against all real property of the defendant in the county where recorded.  A creditor holding a judgment may also record the judgment with the State of Florida.  This then acts as a lien against all personal property anywhere in Florida.

Now back to the question – why not just file the lien?  Unless you are one of those permitted to obtain a lien by merely recording it in the correct form, you may be placing yourself at risk of a suit for falsely claiming a lien.  Imagine the you have a debt due to you for $10,000, and you file a lien even though you have no right to do so.  How bad can that be?  After all, maybe the miscreant who hasn’t paid you will sue to get rid of the lien, and you will sue for the debt you’re owed, so you are O.K., right?  Well, not necessarily.  Imagine that your lien disrupted a several million dollar sale of real estate by the debtor to you, who intended to pay you after the sale.  Having lost the sale because of your “slander of title” – the filing of an improper lien – you become the defendant in a multi-million dollar suit.  Oh, yes, that has happened!

This is not for amateurs.  Collect your debt the right way.  Do not try this at home – ask a professional!

In the days of wooden warships, high quality iron, called “boiler plate” was hung like scales of a fish on the hulls of the ships.  This prevented cannonballs from penetrating and sinking the ship.  The ships were called “iron-clads.”  Those without this iron plating were easily sunk – they lost.  Contract clauses which have stood the test of the courtroom battles are called “boiler plate” or “iron -clad” out of respect for their having been tested and prevailed.

Simple contracts are those that accomplish their given purpose with a minmum of language, using well-tested legal phrases – they are iron-clad with boiler plate clauses, that are not “filler” but solid and time tested.  These agreements are as short in length as the law will permit while still protecting a client.  I have asked a client paragraph by paragraph, phrase by phrase what he would have me omit?   In doing so, I explained the purpose of each, and the consequences of omission.  I have also explained that if essential elements were left out, I must draft a letter advising against this, and have the client sign, requiring the omission and accepting responsibility for the results.  In the end the client acknowledged that he could find nothing to be omitted.  This was an endeavor brought on by repeated frustration, that I have not repeated.  I have, however, mentioned this experience to other clients for the point it makes: being too economical with words can be very expensive in litigation.  Another way of seeing this fallacy, this “legal myth” is to consider that in a complex world there are very few places where a short and simple answer is actually a solution!

Legal mythology in credit unions, banks and finance departments at almost every auto dealership is that the parent should own the car, or be a co-owner and co-maker of the loan with the child.  Follow that mythology at your own peril, and pray that the first accident isn’t a bad one.  This is a seriously flawed concept that we hear time and time again, many times, unfortunately along with the news of a tragic accident.

Firstly consider a fact of life – insurance for teenagers (and those in their early 20s) is really expensive, especially for high coverage limits.  If you’ve accumulated even a little bit of assets, you haven’t insured yourself for the minimum coverage in a long time.  If you could have your college-bound teenager insured for the minimum, and be certain that liability for an accident will not touch you, would that not be a better economic choice?  After all, your teenager doesn’t own anything yet; he or she can’t lose non-existent assets. But wait a minute – what about the car?

Since your teenager is now age 18 and therefore of legal age, he or she can own the car. There are two practical problems to having your teenager own the car; (1) you don’t want to make a gift of the vehicle, (2) because most teenagers are by definition knuckleheads.  If he or she has a bad day, exam, break up with boyfriend or girlfriend, etc. you do not want to receive a telephone call from some distant point on the planet that he or she has just run out of the funds derived from selling the car, and needs help getting home.

The practical solution is either becoming a guarantor of the loan to your teenager (who will be the sole owner of the vehicle), or have your teenager own the car, sign a loan with you, a security agreement on the car and a lien on the title.  Yes, both methods mean you would have “bought” the car, but you were going to do that anyway, one way or the other.  If he or she successfully completes college and hasn’t gotten into too much trouble, the title may be transferred to your recent college graduate as a reward.

This way you can insure the vehicle for minimum coverage; your child will be treated as residing wherever their college is, and you have removed the temptation to run away from a bad day.  You also will need to ask your auto insurance company to revise your insurance to declare that your college-bound teenager is no longer a member of your household.  The insurance company may place a restriction on your policies disallowing any driver under the age of 25.

A second fact to remember is that the owner of a motor vehicle is the primary party responsible for any damage or injuries that the motor vehicle causes, no matter who the operator is.  The million-dollar mistake is to own the vehicle your student is using, even a partial ownership.  To avoid that potential of huge liability, your college student must own the vehicle. The savings you can generate by structuring this correctly is just a bonus. Do not allow the finance department of the auto dealership, your credit union or your bank to direct you to the contrary. Play it safe.

 

The answer is simple: the transferor is providing a warranty.  This is not an appliance, so what is the warranty?  The transferring party is specifically claiming some quality of ownership of that property, is describing that quality of ownership (for example, an undivided one-half interest therein), and warranting both the title and agreeing to defend at the transferor’s expense the title of the new owner in the interest being transferred.

In a Quit Claim Deed, the party transferring simply states “Whatever interest I have in the property I’m transferring to you.”  Notice that there is no interest or quality of title ever warranted or represented, nor any agreement to defend.  A Quit Claim Deed could very well be the most expensive thing you have ever done in the wrong set of circumstances. If anyone is interested, I am willing to sell by Quit Claim Deed my interest in the Brooklyn Bridge (an ancient scam done in New York to new immigrants to America).  Any takers?

Even in a friendly, within the family transaction, a Quit Claim Deed can be quite damaging.  You see, that warranty language really means something.  It means that the title insurance possessed by the transferor will now benefit the transferee. Let me try that again – - usually the owner of a property has received a title insurance policy that provides for an amount of money or a defense of title should some defect later be found.  The title is searched quite carefully before that title insurance is issued, and it is rare that a defect is found later.  However, it does happen, and while usually correctable, it can be expensive to file suit to “Quiet Title.”  Since a Quit Claim Deed has no warranty, the benefit of the title insurance DOES NOT TRANSFER. Of course, the transferor by Quit Claim Deed has no obligation to “defend” your title – it isn’t part of the Quit Claim Deed!

So, even in an instance where Dad says to Son and Daughter: “How about Mom and I give you the mountain cabin.  It is hard for us to travel, but maybe you could let us use it once in awhile.”  Dad and Mom, having a title insurance policy for the $100,000 they paid for the cabin, transfer it to Son and Daughter by Quit Claim Deed.  Later it turns out that access to the property has been cut off by the new neighbor, who built his home and blocked the access.  Oops!  Now Son and Daughter have a major problem.  If the transfer had been done by a warranty deed that contained no exception for access, and assuming that the title insurance policy had no exception regarding access, the title insurer is likely to pay all the costs of establishing the right to access across the neighbor’s property.  Note that when Dad and Mom purchased the property, the title company would have given them in writing that access was an exception or, more likely, declined to insure the purchase until that was cured.

We have acted to repair numerous title defects for clients, and can assure you that they are not easy or inexpensive.  It is much preferred to have the title insurance company work on your behalf to resolve the problem.  That is their purpose, what they were paid to do.

Oh, and one more thing.  The preparation costs of a Warranty Deed and a Quit Claim Deed are no different, one from the other, and the recording costs and documentary stamps required are the same.  Which type is the least costly?  RIGHT!

As an aside, we have wondered how many of the dearly departed have been subjected to self-help suppression of Wills. Having observed many suspicious happenings, we recommend that counsel retain the Will original, and a copy be kept by the client. In most states, fully executed copies are capable of being accepted for probate with a sworn statement. It is much less likely that the Will will be lost – then we can read it to the family if they wish!

An observation we have made in a small number of cases is that the deceased actually may have wanted to stir up trouble among everyone affected.  During their lifetimes they had enjoyed interfering in others lives, so why not in death?  We will never know for sure if that was their intent.