Litigation is time-consuming and expensive. The alternative is to try to settle out of court through alternative dispute resolution (ADR). There are many kinds of ADR. The two most common are mediation and arbitration. .
Mediation. In mediation, the disputing parties ask a neutral third party to help them reach a settlement of some or all of their issues. Most Wisconsin residents encounter mediation in small claims suits or divorce. In Winnebago county, all small claims disputes and many larger civil cases are referred to mediation. Mediation is often successful. For example, the Winnebago County Conflict Resolution Center settles about 90% of all small claims cases through mediation. To encourage parties to settle, mediators emphasize the three advantages of ADR.
A. Certainty of settlement compared with the risk and expense of trial.
B. Savings of time and legal fees.
C. The ability to find solutions a court would be unlikely to reach. (Courts award money and property rights. They do not negotiate payment plans.)
Arbitration. In Wisconsin, arbitration is used to settle disputes between unions and employers. Unlike a mediator, an arbitrator makes the final decision.. Credit cards companies and other financial institutions like stock brokers, mutual fund companies, health care insurers and retirement plans may require arbitration of disputes. Chances are that if you or your family do business with a regional or national company, your agreement contains an arbitration clause.
Sometimes these arbitration agreements are helpful. Sometimes not. ADR can deny relief for smaller claims because the cost of mediation and arbitration is higher than court fees. Arbitration of small claims may not include a hearing and may not be required to follow the law. So many employers and financial institutions are requiring disputes be arbitrated, we will soon need to decide if employees and consumers should have a right to their day in court.
Our tradition of open courts helps keep both judges and law accountable to the public. Private settlements are usually confidential. The public has no rights and public opinion is irrelevant in ADR. While this may have advantages, it also means that neither the public or the courts have the opportunity to understand how establish legal precedents fit - or fail to fit - disputes arising form changes in business, culture and society.
Any change in society raises issues. The Saga of Burnt Njal recounts the fate of a wise man living in Iceland in the middle ages. Nhal success at settling disputes eventually interfered with royal politics and prerogatives. One night, Njal is burned alive in his home. Today the story would be a little different. Njal would be CEO of the Fortune 100 company, Global ADR, Inc. Njal is tossed out of the company when the ADR bubble bursts, but his golden parachute allows him to live well after a soft landing. It is individual members of the public and society as a whole who get burned when Global ADR arbitrates all private disputes.
Monday, July 13, 2009
Thursday, June 11, 2009
Did You Know: About Easements?
Most of us are familiar with easements. The power company may have an easement for overhead power lines. A neighbor might have an driveway easement to cross a portion of your property or to share a driveway. Lakeshore properties may have granted easements allowing others to walk across the property and enter the lake. At the University of California at Santa Cruz, certain cattle ranchers had grazing easements for their farms over the grasslands on the lower 1,000 acres. The City of Neenah has the right to maintain Riverside Park as long as no alcohol is consumed there.
Pop Quiz: (Answers near the end of the post)
Do you know which of the following statements correctly describes an easement or easement law?
1. Easements are found with other Candies in Aisle 6 of Walgreens
2. Harry, next door, told me I can dig in his garden any time I want.
3. I signed a contract allow Jones Sign to put a Billboard 10 feet from my back lot-line.
4. I don’t know my neighbor, but I’ve been hunting quail on his land for 25 years.
5. My weekender neighbor doesn’t know, but my Dad and I have been fishing off his pier for 55 years.
6. If Curmudgeon’s snowplow breaks down and blocks your shared driveway, you can drive around it.
7. Wisconsin’s law of easements can be traced back to 450 BC.
A easement is an irrevocable legal right in the property of another, called the subservient estate. A easement usually consists of a right the easement holder can exercise over a specific part of the subservient estate. . The easement holder may be an individual or, if the easement belongs with some other property, the owner of the dominant estate. The easement can be limited by time, place, or any specific condition that may (or will) occur in the future. An easement holder can do what is necessary to maintain the easement rights. Sometimes maintenance includes rights to go outside the easement to prevent damage. The owner of the subservient estate cannot unreasonably interfere with the easement holder’s rights.
Frequently, the subservient estate grants an easement in writing to a person or a subservient estate. If the writing is recorded, the easement holder can enforce his or her rights against all persons (except a buyer at a foreclosure sale of a mortgage created before the easement). How an easement is written is crucial. Say you have an pedestrian easement to cross the eastern 10 feet of Curmudgeon’s lakeshore property. You put on your bathing suit, grab your towel and go for a swim. When you enter the water, Curmudgeon, looking unhappy as usual, dials 911 and tells the County Sheriff you are trespassing. Who is right?
The final answer is: . . . Curmudgeon. The right to enter the water is a riparian right. Wisconsin law holds that no easement includes riparian rights unless the easement says so in writing. Your easement says nothing about the lake or the right to enter the water.
Suppose Curmudgeon plants a row of hostas across the easement? You can remove them. Suppose Curmudgeon parks his boat and trailer across the easement, blocking it completely, and lets the air out of the tires. If your property is in England, you can simply go around it. In about 1857, the Lord Chief Baron of the Exchequer, Sir Jonathon Frederick Pollack, decided the case of Hawkins v. Carbines, 27 LJ Exch. 44. Lord Pollack held that the owner of a narrow right of way had the right deviate from the easement only to the extent necessary to turn his horse and buggy around.
In the U.S. generally, and Wisconsin particularly, the right of deviation is restricted to public rights of way. You can deviate onto the subservient estate if a street is blocked, two moving trucks are parked side by side in the alley in back of your house or if a tree falls across the beach easement. (This is important, in Malibu beach access easements allow paraparazzi to snap pics of movie stars lounging on the back decks of their beachfront property). So in Wisconsin, you can’t go around the easement. You can only move the boat if Curmudgeon does not object. Otherwise, you need to go to court to enforce your easement.
There three are kinds of easements that can be obtained without consent: easements of necessity, implied easements and prescriptive easements (easements gained by adverse possession). If there is no way, no matter how inconvenient or expensive to get from your cottage to a public street, you may be able to have a court grant an easement of necessity. This allows you to walk or drive across a convenient, not unreasonable right of way the court will determine. But, like any access easement, you cannot use it for utilities such as water, sewer, electricity, gas or (gasp!) cable. If you have an access easement or an easement for ingress, egress and/or regress, you do not have the right to place utility lines over, along or under the easement.
Suppose you Curmudgeon sells off a quarter acre, lake view ,cottage with a winding half mile drive down to the lake. The drive leaves your property and goes over Curmudgeon’s land. You may have an easement by implication to use the road. Courts can award an easement by implication for the use of a visible, longstanding improvement which has been used to benefit your property.
Finally, suppose you buy the quarter acre and take a shortcut to the Lake whenever Curmudgeon takes his daily nap or runs down to the post-office for his mail and a few pints with locals. Curmudgeon would never permission. You never asked for permission. After 20 years, you are entitled a prescriptive easement to walk down to the lake via the shortcut. Prescriptive easements are limited to the rights you actually used for 20 years and to the place(s) you used them.. Since you have been walking, the rules are simple. No cars. No entering the lake unless you went regularly went swimming. No fishing unless you frequently took dinner out of the lake
And now for the rest of the story. You must to more than laugh and tell your friends about how you got away with it. Within another 30 years, you have to file a record of your claim or lose it. Clients who tell me they have gone down to the Lake for 45 years can have a prescriptive walking easement. If clients tell me Grandpa started taking Mom to the Lake in 1958 and never filed an affidavit, then they will be able enjoy the lake view, but not the lake shore.
Now go back and take the quiz again. The answers are: (1) No (2) No (3) Yes. Jones should record it as well. (4) This is a quail hunting easement. Your deer hunting friends are out of luck. (5) No. Too bad, because it is so easy to record an affidavit announcing your easement rights. (And so illegal, if you know you don’t have any). (6) a shared driveway may or may not be an easement. Either way, you can only drive around the snowplow in England, where you must remember to kept to the left. (7) Yes. Roman laws were kept secret until 450 BC when the first partial descriptions of the laws of Rome were published as the ten tables (revised as the twelve tables in 449 BC). Table VII outlined legal definitions and procedures for real property.
Now you know a little more about easements.
If you are wondering about your easement rights - or if you are considering buying a property - it’s time to see a lawyer. And never, ever make an offer on a property with an easement – or one that might have an easement – unless you include the right to review and approve any easements.
For more information or advise please call Ken Friedman at 920-231-1500
Pop Quiz: (Answers near the end of the post)
Do you know which of the following statements correctly describes an easement or easement law?
1. Easements are found with other Candies in Aisle 6 of Walgreens
2. Harry, next door, told me I can dig in his garden any time I want.
3. I signed a contract allow Jones Sign to put a Billboard 10 feet from my back lot-line.
4. I don’t know my neighbor, but I’ve been hunting quail on his land for 25 years.
5. My weekender neighbor doesn’t know, but my Dad and I have been fishing off his pier for 55 years.
6. If Curmudgeon’s snowplow breaks down and blocks your shared driveway, you can drive around it.
7. Wisconsin’s law of easements can be traced back to 450 BC.
A easement is an irrevocable legal right in the property of another, called the subservient estate. A easement usually consists of a right the easement holder can exercise over a specific part of the subservient estate. . The easement holder may be an individual or, if the easement belongs with some other property, the owner of the dominant estate. The easement can be limited by time, place, or any specific condition that may (or will) occur in the future. An easement holder can do what is necessary to maintain the easement rights. Sometimes maintenance includes rights to go outside the easement to prevent damage. The owner of the subservient estate cannot unreasonably interfere with the easement holder’s rights.
Frequently, the subservient estate grants an easement in writing to a person or a subservient estate. If the writing is recorded, the easement holder can enforce his or her rights against all persons (except a buyer at a foreclosure sale of a mortgage created before the easement). How an easement is written is crucial. Say you have an pedestrian easement to cross the eastern 10 feet of Curmudgeon’s lakeshore property. You put on your bathing suit, grab your towel and go for a swim. When you enter the water, Curmudgeon, looking unhappy as usual, dials 911 and tells the County Sheriff you are trespassing. Who is right?
The final answer is: . . . Curmudgeon. The right to enter the water is a riparian right. Wisconsin law holds that no easement includes riparian rights unless the easement says so in writing. Your easement says nothing about the lake or the right to enter the water.
Suppose Curmudgeon plants a row of hostas across the easement? You can remove them. Suppose Curmudgeon parks his boat and trailer across the easement, blocking it completely, and lets the air out of the tires. If your property is in England, you can simply go around it. In about 1857, the Lord Chief Baron of the Exchequer, Sir Jonathon Frederick Pollack, decided the case of Hawkins v. Carbines, 27 LJ Exch. 44. Lord Pollack held that the owner of a narrow right of way had the right deviate from the easement only to the extent necessary to turn his horse and buggy around.
In the U.S. generally, and Wisconsin particularly, the right of deviation is restricted to public rights of way. You can deviate onto the subservient estate if a street is blocked, two moving trucks are parked side by side in the alley in back of your house or if a tree falls across the beach easement. (This is important, in Malibu beach access easements allow paraparazzi to snap pics of movie stars lounging on the back decks of their beachfront property). So in Wisconsin, you can’t go around the easement. You can only move the boat if Curmudgeon does not object. Otherwise, you need to go to court to enforce your easement.
There three are kinds of easements that can be obtained without consent: easements of necessity, implied easements and prescriptive easements (easements gained by adverse possession). If there is no way, no matter how inconvenient or expensive to get from your cottage to a public street, you may be able to have a court grant an easement of necessity. This allows you to walk or drive across a convenient, not unreasonable right of way the court will determine. But, like any access easement, you cannot use it for utilities such as water, sewer, electricity, gas or (gasp!) cable. If you have an access easement or an easement for ingress, egress and/or regress, you do not have the right to place utility lines over, along or under the easement.
Suppose you Curmudgeon sells off a quarter acre, lake view ,cottage with a winding half mile drive down to the lake. The drive leaves your property and goes over Curmudgeon’s land. You may have an easement by implication to use the road. Courts can award an easement by implication for the use of a visible, longstanding improvement which has been used to benefit your property.
Finally, suppose you buy the quarter acre and take a shortcut to the Lake whenever Curmudgeon takes his daily nap or runs down to the post-office for his mail and a few pints with locals. Curmudgeon would never permission. You never asked for permission. After 20 years, you are entitled a prescriptive easement to walk down to the lake via the shortcut. Prescriptive easements are limited to the rights you actually used for 20 years and to the place(s) you used them.. Since you have been walking, the rules are simple. No cars. No entering the lake unless you went regularly went swimming. No fishing unless you frequently took dinner out of the lake
And now for the rest of the story. You must to more than laugh and tell your friends about how you got away with it. Within another 30 years, you have to file a record of your claim or lose it. Clients who tell me they have gone down to the Lake for 45 years can have a prescriptive walking easement. If clients tell me Grandpa started taking Mom to the Lake in 1958 and never filed an affidavit, then they will be able enjoy the lake view, but not the lake shore.
Now go back and take the quiz again. The answers are: (1) No (2) No (3) Yes. Jones should record it as well. (4) This is a quail hunting easement. Your deer hunting friends are out of luck. (5) No. Too bad, because it is so easy to record an affidavit announcing your easement rights. (And so illegal, if you know you don’t have any). (6) a shared driveway may or may not be an easement. Either way, you can only drive around the snowplow in England, where you must remember to kept to the left. (7) Yes. Roman laws were kept secret until 450 BC when the first partial descriptions of the laws of Rome were published as the ten tables (revised as the twelve tables in 449 BC). Table VII outlined legal definitions and procedures for real property.
Now you know a little more about easements.
If you are wondering about your easement rights - or if you are considering buying a property - it’s time to see a lawyer. And never, ever make an offer on a property with an easement – or one that might have an easement – unless you include the right to review and approve any easements.
For more information or advise please call Ken Friedman at 920-231-1500
Wednesday, March 18, 2009
What to do First When A Loved One Dies
Many people try to “take care of everything” in the first days following the death of a loved one. This is impossible and often makes matters worse. Forcing decisions can leave hard feelings. The law gives 30 days to start probate, but many probates start later. Administration of an estate takes time, often between six months and two years. Even the simplest tasks (like accessing funds in a payable on death bank account) may require a death certificate and several days.
1. Comfort the Survivors
Comforting survivors is job #1. In addition to emotional support, check whether survivors have access to money for living expenses.
Surviving family members and dependents may need several thousand dollars – enough to last for the 60 to 90 days it may take for the personal representative or others have time to arrange for transfers from decedent’s assets (if any). Sources of funds include survivor’s individual bank accounts, retirement or other financial assets, joint accounts or credit cards, POD/TOD accounts and Trusts with surviving Trustees.
Sometimes, family members and heirs are in town for a funeral or reception. Depending on their feelings, this may be a good time for a preliminary meeting with an attorney. Otherwise, it might be better to wait until you have more information. (See step 6).
2. Find the List (if one exists).
It will simplify decision-making if the decedent left instructions for final arrangements and/or where to locate papers or assets, Survivors may know where papers are located, If there was a will or trust and what other wishes the decedent may have had.
3. Help With or Make Final Arrangements
Helping make or confirm final arrangements is the second major priority. Organ donations may be indicated on driver’s licenses, powers of attorney for healthcare or powers of disposition of final remains. Funeral and burial (or other disposition) wishes may be stated in a will or power of disposition. There may be a funeral trust. While final arrangements cost money, most providers are used to the idea that payment will be delayed for some weeks while survivors work out the details of administration of the decedant’s estate. If you are approached for contribution to expenses, make sure you understand who, if anyone, has a responsibility to reimburse you and whether they have sufficient assets to do so.
4. Get Copies of the Death Certificate
The funeral home, county clerk or, in some cases, the coroner, will provide a copy of the death certificate. Death certificates are essential to administer estates and to prove death to parties who hold assets for the decedant and his or her heirs. It will often be helpful to have half a dozen originals as attorneys, courts and most financial institutions will want originals or copies.
5. Take Time For Grief
Each of us needs time to grieve and time to heal. Focusing on financial decisions delays our adjustment to a loss. Even if death appears to be a blessing, focusing on administration of the estate may make it more difficult to adjust.
6. When You Are Ready, Gather Information and Seek Advice
Gathering is NOT organizing. It is merely putting mail and readily available information about wills, trusts and assets in a safe place. Review the information you have gathered and make an appointment to discuss how the estate will be administered. If there is a trust, the beneficiaries should meet with the Trustee. Trustees should confer with their attorneys. If there is probate property or debts which cannot be paid from probate property, the personal representative(s) named in the will probably need to see an attorney to start the legal process of administration (probate). A family member, heir or creditor may take responsibility for probate if there is no will or if the personal representatives (and alternates) fail to act,
7. Focus on Bills With Time-Related Fees or Interest
Creditors understand that a death will mean a delay in payment or, as the case may be, a write-off. If a survivor or trustee has access to funds, then he or she should start dealing with bills that assess fees or interest for delayed payment. If no funds are available, or if funds are inadequate, it may be necessary to make arrangements for critical services (e.g., heat, light and phone).
1. Comfort the Survivors
Comforting survivors is job #1. In addition to emotional support, check whether survivors have access to money for living expenses.
Surviving family members and dependents may need several thousand dollars – enough to last for the 60 to 90 days it may take for the personal representative or others have time to arrange for transfers from decedent’s assets (if any). Sources of funds include survivor’s individual bank accounts, retirement or other financial assets, joint accounts or credit cards, POD/TOD accounts and Trusts with surviving Trustees.
Sometimes, family members and heirs are in town for a funeral or reception. Depending on their feelings, this may be a good time for a preliminary meeting with an attorney. Otherwise, it might be better to wait until you have more information. (See step 6).
2. Find the List (if one exists).
It will simplify decision-making if the decedent left instructions for final arrangements and/or where to locate papers or assets, Survivors may know where papers are located, If there was a will or trust and what other wishes the decedent may have had.
3. Help With or Make Final Arrangements
Helping make or confirm final arrangements is the second major priority. Organ donations may be indicated on driver’s licenses, powers of attorney for healthcare or powers of disposition of final remains. Funeral and burial (or other disposition) wishes may be stated in a will or power of disposition. There may be a funeral trust. While final arrangements cost money, most providers are used to the idea that payment will be delayed for some weeks while survivors work out the details of administration of the decedant’s estate. If you are approached for contribution to expenses, make sure you understand who, if anyone, has a responsibility to reimburse you and whether they have sufficient assets to do so.
4. Get Copies of the Death Certificate
The funeral home, county clerk or, in some cases, the coroner, will provide a copy of the death certificate. Death certificates are essential to administer estates and to prove death to parties who hold assets for the decedant and his or her heirs. It will often be helpful to have half a dozen originals as attorneys, courts and most financial institutions will want originals or copies.
5. Take Time For Grief
Each of us needs time to grieve and time to heal. Focusing on financial decisions delays our adjustment to a loss. Even if death appears to be a blessing, focusing on administration of the estate may make it more difficult to adjust.
6. When You Are Ready, Gather Information and Seek Advice
Gathering is NOT organizing. It is merely putting mail and readily available information about wills, trusts and assets in a safe place. Review the information you have gathered and make an appointment to discuss how the estate will be administered. If there is a trust, the beneficiaries should meet with the Trustee. Trustees should confer with their attorneys. If there is probate property or debts which cannot be paid from probate property, the personal representative(s) named in the will probably need to see an attorney to start the legal process of administration (probate). A family member, heir or creditor may take responsibility for probate if there is no will or if the personal representatives (and alternates) fail to act,
7. Focus on Bills With Time-Related Fees or Interest
Creditors understand that a death will mean a delay in payment or, as the case may be, a write-off. If a survivor or trustee has access to funds, then he or she should start dealing with bills that assess fees or interest for delayed payment. If no funds are available, or if funds are inadequate, it may be necessary to make arrangements for critical services (e.g., heat, light and phone).
Saturday, March 7, 2009
Did You Know? Wisconsin Home Improvement Regulations Protect Both Homeowners and Contractors
There are three sure signs of spring. Middle-aged men in tuxedos drag groundhogs out of their dens to predict how long winter will last. Seed catalogs arrive in the mailbox. And homeowners start planning home improvement projects. Many home improvement projects go well. Some don’t. In the last year, we have advised homeowners whose contractors didn’t complete the project, owners that have discovered unacceptable construction defects, contractors that been locked out due to contract disputes and contractors who are trying to collect what is due.
Wisconsin has laws and regulations that protect homeowners and contractors. This article address some of things both owners and contractors should know before beginning a home improvement project.
As usual we start with a quiz: True of False?
1. No building permit is needed for home improvement projects of $15,000 or less.
2. Any contractor can obtain the building permits needed to add a bathroom.
3. Wisconsin regulates the terms of home improvement contracts and changes to project schedules.
First, Know the Rules
The most important protections homeowners and contractors have are planning, knowing what to ask for, and knowing the law. There are a number of helpful brochures on building permits and home improvement projects available from state and local authorities. The Department of Agriculture Trade and Consumer Protection ATCP 110 regulates unfair marketing, contracting and construction practices. Wis. Stats. 779 gives contractors who follow the required steps the right to file construction liens to help ensure they are paid. Wis. Stats 779 also makes contractors responsible to pay their employees, subcontractors and material suppliers.. Wis. Stats 895.07 protects homeowners and contractors by requiring 90 day notice prior to litigating construction defects.
If You Don’t Have Plans, You Are Planning for Trouble
Planning takes time and offers a roadmap to guide you through the construction process. Socrates said, “Know thyself.” Make a sketch and write description of the work to be done. Specify by brand and model any equipment that the owner and the contractor will each purchase and/or install. Specify the quality and colors of important materials so the contractor can properly estimate allowances for lighting, floor coverings, etc. Sketching and writing out the plan helps owners add details to the dream and contractors recreate that dream from construction materials.
Owners should get multiple written bids from licensed contractors who are recommended by friends. Check references, Better Business Bureau ratings and suits filed on CCAP. If possible, go see their work. Owners should review the contractor’s license, workers compensation insurance, liability insurance and all building permits before work commences
Supervision keeps the job on track. Check on progress. Building inspectors (and your architect, if you have one) act as inspectors general. All alternations to a home require building permits. All work which affects the occupancy, area, structural strength, fire protection, exits, light, or ventilation of a building, requires a building permit. Minor repairs or alterations do not require a permit if they do not affect the occupancy, area, structural strength, fire protection, exits, light, or ventilation of a building. (See, for example, Oshkosh Building Code 7-12 and 7-30 exempting only minor repairs up to $1,000 in value). No one may start work under a home improvement contract until all required State and local permits have been issued. By law, your contractor must inform you about building permits required and give you copies of all inspection reports. Oshkosh and other municipalities will not issue permits to unlicensed contractors (factsheet). If you are adding space, you may need an occupancy permit for the new room(s).
Depending on the size of the project, owners may hold back 10% to 50% or more of the project price until the project is completed, inspected, approved and the contractor provides lien releases from all employees, subcontractors and suppliers.
What You Don’t Know About Advertising Statements Can Be Expensive
Wis. Stats. 100.18 (factsheet) and ATCP 110.02 (factsheet) allow homeowners to recover damages induced by untrue deceptive or misleading advertisements including the oral promises attorneys advise you to get in writing. Deceptive advertising includes:
o bait and switch selling tactics,
o disparaging or discouraging one product offered for sale to induce the buyer to purchase other products,
o substituting products or materials for those specified without the homeowners consent,
o failing to have available a quantity of the advertised product sufficient to meet reasonably anticipated demand, and
o misrepresenting that certain products or materials are unavailable or that there will be a long delay in their manufacture, delivery, service or installation.
Having second thoughts after signing? Wisconsin law allows homeowners three business days to cancel, but only if you were solicited and signed a contract for more than $25 at any location other than the contractor's regular place of business. Solicitation includes personal calls, telephone calls and direct mail. The contractor is required to provide owners with two copies of the notice of the right to cancel at the time the contract is signed. To cancel the sale, owners must sign and date a notice of cancellation and mail it to the contractor before midnight of the third business day. Sending cancellation notices by certified mail, return receipt requested, protects contractors and lets owners know the notice was delivered.
Let Your Contract Be Your Guide.
ATCP 110.05 requires written contracts for all home improvement projects solicited and signed outside the contractors office and/or requiring payments prior to completion. Outside the office means in person, by mail, telephone, handbill or circular. Contractors and owners should protect themselves with a written contract that meets the requirements of ATCP 110.05. Contract requirements include:
o Name and address of the contractors and salesperson
o A description of the work to be done and the principal products and materials to be used or installed in performance of the contract. The description shall include, where applicable, the name, make, size, capacity, model and model year of principal products or fixtures to be installed, and the type, grade, quality, size or quantity of principal building or construction materials to be used. Where specific representations are made that certain types of products or materials will be used, or the buyer has specified that certain types of products or materials are to be used, a description of such products or materials shall be clearly set forth in the contract.
o A description of what the contract price does not cover. If the contract is time and materials, the contract should say how these are determined (e.g. hourly rates and mark-ups).
o Any warranties the contractor promises.
o All terms relevant to pricing and payment should be set forth.
o The written contract must be delivered before payments are made or work begins.
An accepted bid is a contract. Be careful as a bid may not contain all the information required by law for your protection.
Enforce Your Rights to Resolve Problems Without Litigation.
ATCP 110 gives owners remedies for project delays or refusals to perform if you have paid for services in advance. Wis. Stats 779 gives lien rights to contractors and regulates the use of payments. Construction defects are handled under Wis. Stats 895.07.
What if the project is delayed? ATCP 110.02(7)(c) requires a contract schedule in the written contract and, in any case, that the contractor give owners notice and obtain their approval for any delay in the schedule.
If an owner has made an advance payment and believes the contractor has failed to supply materials and services in a timely manner, ATCP 110.07 gives the owner the right to do any or all of the following by sending a certified letter (form) to the contract.
o Cancel the contract.
o Demand return of all payments the contractor has not yet expended on the project with 15 days.
o Demand delivery of all materials paid for with the owner’s funds within 15 days or 5 days after delivery to the contractor, whichever is later
o Demand a detailed written accounting for all payments made within 30 days.
What if the contractor cannot or will not fix a construction defect? Wis. Stats. 895.07 requires that you give a contractor notice and a right to cure before filing suit. If you have made advance payments, ATCP 110.07 may apply. If you are thinking about litigation, please call so we can explain the procedure.
What happens if the contractor has financial issues? Wis. Stats. 779.02(5) and ATCP 110 require contractors to use all payments received on behalf of the owner exclusively for the owner’s project. Contractors must pay employees, subcontractors and suppliers before using an owner’s funds for his services, overhead and profit. Except for the initial deposit, owners should make payments only on written request with copies of signed lien releases from the contractor, each of his laborers and each of his suppliers. Lien releases for progress payments should be a partial lien release in the amount of the payment to be received. A lien release for a final payment should waive all lien rights. The final draw request on any project requiring a building permit should include a warranty that the project meets all applicable code requirements.
In construction projects, as in the rest of life, problems rarely go away and often get worse. Know the rules, make your plan, make frequent progress inspections and insist on formalities. If things go wrong, ask for advice on proper steps to take to protect your rights.
The law has teeth. If a contractor violates Wis. Stats. 100.18 and/or ATCP 110, the homeowner could receive double damages and attorney fees. Under Wis. Stats. 895.446, contractors may be liable for triple damages and attorney fees if they fail to pay 100% of all the project costs before reserving funds for overhead and profit.
Wisconsin has laws and regulations that protect homeowners and contractors. This article address some of things both owners and contractors should know before beginning a home improvement project.
As usual we start with a quiz: True of False?
1. No building permit is needed for home improvement projects of $15,000 or less.
2. Any contractor can obtain the building permits needed to add a bathroom.
3. Wisconsin regulates the terms of home improvement contracts and changes to project schedules.
First, Know the Rules
The most important protections homeowners and contractors have are planning, knowing what to ask for, and knowing the law. There are a number of helpful brochures on building permits and home improvement projects available from state and local authorities. The Department of Agriculture Trade and Consumer Protection ATCP 110 regulates unfair marketing, contracting and construction practices. Wis. Stats. 779 gives contractors who follow the required steps the right to file construction liens to help ensure they are paid. Wis. Stats 779 also makes contractors responsible to pay their employees, subcontractors and material suppliers.. Wis. Stats 895.07 protects homeowners and contractors by requiring 90 day notice prior to litigating construction defects.
If You Don’t Have Plans, You Are Planning for Trouble
Planning takes time and offers a roadmap to guide you through the construction process. Socrates said, “Know thyself.” Make a sketch and write description of the work to be done. Specify by brand and model any equipment that the owner and the contractor will each purchase and/or install. Specify the quality and colors of important materials so the contractor can properly estimate allowances for lighting, floor coverings, etc. Sketching and writing out the plan helps owners add details to the dream and contractors recreate that dream from construction materials.
Owners should get multiple written bids from licensed contractors who are recommended by friends. Check references, Better Business Bureau ratings and suits filed on CCAP. If possible, go see their work. Owners should review the contractor’s license, workers compensation insurance, liability insurance and all building permits before work commences
Supervision keeps the job on track. Check on progress. Building inspectors (and your architect, if you have one) act as inspectors general. All alternations to a home require building permits. All work which affects the occupancy, area, structural strength, fire protection, exits, light, or ventilation of a building, requires a building permit. Minor repairs or alterations do not require a permit if they do not affect the occupancy, area, structural strength, fire protection, exits, light, or ventilation of a building. (See, for example, Oshkosh Building Code 7-12 and 7-30 exempting only minor repairs up to $1,000 in value). No one may start work under a home improvement contract until all required State and local permits have been issued. By law, your contractor must inform you about building permits required and give you copies of all inspection reports. Oshkosh and other municipalities will not issue permits to unlicensed contractors (factsheet). If you are adding space, you may need an occupancy permit for the new room(s).
Depending on the size of the project, owners may hold back 10% to 50% or more of the project price until the project is completed, inspected, approved and the contractor provides lien releases from all employees, subcontractors and suppliers.
What You Don’t Know About Advertising Statements Can Be Expensive
Wis. Stats. 100.18 (factsheet) and ATCP 110.02 (factsheet) allow homeowners to recover damages induced by untrue deceptive or misleading advertisements including the oral promises attorneys advise you to get in writing. Deceptive advertising includes:
o bait and switch selling tactics,
o disparaging or discouraging one product offered for sale to induce the buyer to purchase other products,
o substituting products or materials for those specified without the homeowners consent,
o failing to have available a quantity of the advertised product sufficient to meet reasonably anticipated demand, and
o misrepresenting that certain products or materials are unavailable or that there will be a long delay in their manufacture, delivery, service or installation.
Having second thoughts after signing? Wisconsin law allows homeowners three business days to cancel, but only if you were solicited and signed a contract for more than $25 at any location other than the contractor's regular place of business. Solicitation includes personal calls, telephone calls and direct mail. The contractor is required to provide owners with two copies of the notice of the right to cancel at the time the contract is signed. To cancel the sale, owners must sign and date a notice of cancellation and mail it to the contractor before midnight of the third business day. Sending cancellation notices by certified mail, return receipt requested, protects contractors and lets owners know the notice was delivered.
Let Your Contract Be Your Guide.
ATCP 110.05 requires written contracts for all home improvement projects solicited and signed outside the contractors office and/or requiring payments prior to completion. Outside the office means in person, by mail, telephone, handbill or circular. Contractors and owners should protect themselves with a written contract that meets the requirements of ATCP 110.05. Contract requirements include:
o Name and address of the contractors and salesperson
o A description of the work to be done and the principal products and materials to be used or installed in performance of the contract. The description shall include, where applicable, the name, make, size, capacity, model and model year of principal products or fixtures to be installed, and the type, grade, quality, size or quantity of principal building or construction materials to be used. Where specific representations are made that certain types of products or materials will be used, or the buyer has specified that certain types of products or materials are to be used, a description of such products or materials shall be clearly set forth in the contract.
o A description of what the contract price does not cover. If the contract is time and materials, the contract should say how these are determined (e.g. hourly rates and mark-ups).
o Any warranties the contractor promises.
o All terms relevant to pricing and payment should be set forth.
o The written contract must be delivered before payments are made or work begins.
An accepted bid is a contract. Be careful as a bid may not contain all the information required by law for your protection.
Enforce Your Rights to Resolve Problems Without Litigation.
ATCP 110 gives owners remedies for project delays or refusals to perform if you have paid for services in advance. Wis. Stats 779 gives lien rights to contractors and regulates the use of payments. Construction defects are handled under Wis. Stats 895.07.
What if the project is delayed? ATCP 110.02(7)(c) requires a contract schedule in the written contract and, in any case, that the contractor give owners notice and obtain their approval for any delay in the schedule.
If an owner has made an advance payment and believes the contractor has failed to supply materials and services in a timely manner, ATCP 110.07 gives the owner the right to do any or all of the following by sending a certified letter (form) to the contract.
o Cancel the contract.
o Demand return of all payments the contractor has not yet expended on the project with 15 days.
o Demand delivery of all materials paid for with the owner’s funds within 15 days or 5 days after delivery to the contractor, whichever is later
o Demand a detailed written accounting for all payments made within 30 days.
What if the contractor cannot or will not fix a construction defect? Wis. Stats. 895.07 requires that you give a contractor notice and a right to cure before filing suit. If you have made advance payments, ATCP 110.07 may apply. If you are thinking about litigation, please call so we can explain the procedure.
What happens if the contractor has financial issues? Wis. Stats. 779.02(5) and ATCP 110 require contractors to use all payments received on behalf of the owner exclusively for the owner’s project. Contractors must pay employees, subcontractors and suppliers before using an owner’s funds for his services, overhead and profit. Except for the initial deposit, owners should make payments only on written request with copies of signed lien releases from the contractor, each of his laborers and each of his suppliers. Lien releases for progress payments should be a partial lien release in the amount of the payment to be received. A lien release for a final payment should waive all lien rights. The final draw request on any project requiring a building permit should include a warranty that the project meets all applicable code requirements.
In construction projects, as in the rest of life, problems rarely go away and often get worse. Know the rules, make your plan, make frequent progress inspections and insist on formalities. If things go wrong, ask for advice on proper steps to take to protect your rights.
The law has teeth. If a contractor violates Wis. Stats. 100.18 and/or ATCP 110, the homeowner could receive double damages and attorney fees. Under Wis. Stats. 895.446, contractors may be liable for triple damages and attorney fees if they fail to pay 100% of all the project costs before reserving funds for overhead and profit.
Sunday, December 21, 2008
In Wisconsin, Good Samaritans Must Call for Help & Stick Around
A Good Samaritan volunteers help to those in need. I was surprised to learn that the California Supreme Court decided that Good Samaritans are liable for negligent care given in an emergency. The case was Van Horn v. Watson, S152360. Van Horn, a Good Samaritan, pulled a friend, Torti, out of a car after an accident. Torti became paralyzed, she sued Van Horn. Like many states, California has a Good Samaritan statute. In a divided opinion, the court held that the statute protected only persons giving emergency medical care. While this may have been a "good decision" to a legal scholar it leaves California with a bad law.
What about Wisconsin? The good news is that Wisconsin's Good Samaritan law applies to ANYONE who provides emergency care in an emergency. The good samaritan law - Wis. Stats. 895.48(1) - says, in part:
"Any person who renders emergency care at the scene of any emergency or accident in good faith shall be immune from civil liability for his or her acts or omissions in rendering such emergency care."
The bad news is that not everyone knows what emergency care is and which acts are covered?
The most recent case is Mueller v. McMillian Warner Ins. Co., 2008 WI 54. In Mueller, a teenager suffered a head injury near a north Wisconsin cottage owned by the family of a friend. The owner, Mrs. Switlick decided to monitor the teenager's symptoms before calling for help. She let the teenager sleep, but woke her every hour to see how she was doing. Six hours later, when the teenager showed signs of confusion, she was taken to the hospital and diagnosed with a skull fracture.
The Wisconsin Supreme Court considered how the law applied to a situation where a Good Samaritan provided care for six hours after becoming aware of the injury. The court ruled that "emergency care" means care rendered by a layperson in a sudden, unexpected happening, occurrence, or situation that demands immediate action until professional medical attention is available.
Then the court took two more steps. First, the court found that "emergency care" given by a layperson consists of "initial evaluation and immediate assistance, treatment, and intervention rendered to the plaintiff during the period before care could be transferred to professional medical personnel."
Then the court found a duty to call for medical help. Since the Switlicks waited for six hours to get medical help, the court found immunity did not apply. Writing a unanimous court, Chief Justice Shirley Abrahamson held that "[t]he care rendered by the Switlicks after the initial evaluation and immediate assistance, treatment, and intervention for longer than the period necessary to transfer care to professional medical personnel does not constitute "emergency care."
In other words, a Good Samaritan only has immunity if they call for medical help as soon as possible. Why? In the court's mind, this solution reflected the “legislative intent” of balancing two public policies. The legislature wanted to encourage bystanders to help those in need. And the legislature wanted to encourage laypersons acting as Good Samaritans to seek professional medical treatment.
The Wisconsin Legislature was apparently satisfied with this result. It revised the statute in 2007 without making any changes in the Good Samaritan Law, Wis. Stats. 895.48(1).
The decision leaves at least two (and probably more) questions unanswered. First, the decision may not be logical. It is said that bad facts make bad law. In this case, the Court was faced with an injured teenager under care of an adult who knew medical help might be required. One question that the court did not explicitly consider is whether a state of emergency is objective (the court decides what a reasonable person would think) or subjective (the Good Samaritan decides).it is easy to think of situations in which a person is not aware of the need for medical attention. One could argue that Mrs. Switlock’s decision not to seek assistance was part of her initial evaluation? On the face of the statute, shouldn’t an inaccurate (negligent) evaluation of when an emergency exists be protected by the same law that would protect negligent treatment?
Second, does a good Samaritan take on any other obligations besides calling for help? The court defined emergency care as care rendered until professional medical help is available. If a Good Samaritan leaves the scene after starting to help, would he or she be liable for injuries that might have been prevented? What if the Good Samaritan leaves the scene to call for help?
The Supreme Court has not yet answered these questions. Meanwhile, play it safe. Call for help. And don't leave until help arrives.
What about Wisconsin? The good news is that Wisconsin's Good Samaritan law applies to ANYONE who provides emergency care in an emergency. The good samaritan law - Wis. Stats. 895.48(1) - says, in part:
"Any person who renders emergency care at the scene of any emergency or accident in good faith shall be immune from civil liability for his or her acts or omissions in rendering such emergency care."
The bad news is that not everyone knows what emergency care is and which acts are covered?
The most recent case is Mueller v. McMillian Warner Ins. Co., 2008 WI 54. In Mueller, a teenager suffered a head injury near a north Wisconsin cottage owned by the family of a friend. The owner, Mrs. Switlick decided to monitor the teenager's symptoms before calling for help. She let the teenager sleep, but woke her every hour to see how she was doing. Six hours later, when the teenager showed signs of confusion, she was taken to the hospital and diagnosed with a skull fracture.
The Wisconsin Supreme Court considered how the law applied to a situation where a Good Samaritan provided care for six hours after becoming aware of the injury. The court ruled that "emergency care" means care rendered by a layperson in a sudden, unexpected happening, occurrence, or situation that demands immediate action until professional medical attention is available.
Then the court took two more steps. First, the court found that "emergency care" given by a layperson consists of "initial evaluation and immediate assistance, treatment, and intervention rendered to the plaintiff during the period before care could be transferred to professional medical personnel."
Then the court found a duty to call for medical help. Since the Switlicks waited for six hours to get medical help, the court found immunity did not apply. Writing a unanimous court, Chief Justice Shirley Abrahamson held that "[t]he care rendered by the Switlicks after the initial evaluation and immediate assistance, treatment, and intervention for longer than the period necessary to transfer care to professional medical personnel does not constitute "emergency care."
In other words, a Good Samaritan only has immunity if they call for medical help as soon as possible. Why? In the court's mind, this solution reflected the “legislative intent” of balancing two public policies. The legislature wanted to encourage bystanders to help those in need. And the legislature wanted to encourage laypersons acting as Good Samaritans to seek professional medical treatment.
The Wisconsin Legislature was apparently satisfied with this result. It revised the statute in 2007 without making any changes in the Good Samaritan Law, Wis. Stats. 895.48(1).
The decision leaves at least two (and probably more) questions unanswered. First, the decision may not be logical. It is said that bad facts make bad law. In this case, the Court was faced with an injured teenager under care of an adult who knew medical help might be required. One question that the court did not explicitly consider is whether a state of emergency is objective (the court decides what a reasonable person would think) or subjective (the Good Samaritan decides).it is easy to think of situations in which a person is not aware of the need for medical attention. One could argue that Mrs. Switlock’s decision not to seek assistance was part of her initial evaluation? On the face of the statute, shouldn’t an inaccurate (negligent) evaluation of when an emergency exists be protected by the same law that would protect negligent treatment?
Second, does a good Samaritan take on any other obligations besides calling for help? The court defined emergency care as care rendered until professional medical help is available. If a Good Samaritan leaves the scene after starting to help, would he or she be liable for injuries that might have been prevented? What if the Good Samaritan leaves the scene to call for help?
The Supreme Court has not yet answered these questions. Meanwhile, play it safe. Call for help. And don't leave until help arrives.
False Advertising Wis. Stats. 100.18
Many states have laws designed to discourage false advertising statements. Wisconsin's law allows any individual who suffers monetary damages due to false advertising to sue the seller and, in many cases, recover their attorney fees.
What is a false advertising statement? False advertising is any communication, written or oral, made to the public, that is untrue, misleading or deceptive. The public includes anyone - even a single individual who does not have a "particular relationships" with the seller.
Let's take it a step at a time. Any communication is an advertisement. Say Joe is selling his home. Advertising communications include newspaper ads, internet ads, spec sheets (like a realtor's handout), the real estate condition report and oral statements, as long as the communication is made before an offer is accepted. Joe tells Lookie Lou, "I had a building permit for my deck." If Lookie Lou makes an offer and discovers there was no building permit and the deck does not meet code, Joe is liable for false advertising. If Lookie Lou has to rebuild the deck, he can recover his costs and, if Lookie Lou wins in court, his attorney fees.
What is a "particular relationship?" Most often, it is a sales contract or a previous customer relationship. If Joe has accepted Lookie Lou's offer to purchase the house, they have a particular relationship. In that case, the statute does not apply.
Another exception is puffery. Puffery is a qualitative statement, usually an exaggeration, whose truth cannot be determined. Joe is using puffery when he says "this is the best house on the block." Other examples of puffery include: "extensively remodeled," "move-in condition" and "Be the envy of the neighborhood."
For more information, write Ken Friedman or call at 920-231-1500.
What is a false advertising statement? False advertising is any communication, written or oral, made to the public, that is untrue, misleading or deceptive. The public includes anyone - even a single individual who does not have a "particular relationships" with the seller.
Let's take it a step at a time. Any communication is an advertisement. Say Joe is selling his home. Advertising communications include newspaper ads, internet ads, spec sheets (like a realtor's handout), the real estate condition report and oral statements, as long as the communication is made before an offer is accepted. Joe tells Lookie Lou, "I had a building permit for my deck." If Lookie Lou makes an offer and discovers there was no building permit and the deck does not meet code, Joe is liable for false advertising. If Lookie Lou has to rebuild the deck, he can recover his costs and, if Lookie Lou wins in court, his attorney fees.
What is a "particular relationship?" Most often, it is a sales contract or a previous customer relationship. If Joe has accepted Lookie Lou's offer to purchase the house, they have a particular relationship. In that case, the statute does not apply.
Another exception is puffery. Puffery is a qualitative statement, usually an exaggeration, whose truth cannot be determined. Joe is using puffery when he says "this is the best house on the block." Other examples of puffery include: "extensively remodeled," "move-in condition" and "Be the envy of the neighborhood."
For more information, write Ken Friedman or call at 920-231-1500.
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