San Francisco Bankruptcy Lawyer Blog

On July 15, 2010, the Dodd Frank Wall Street Reform and Consumer Protection Act was approved by the Senate and expected to be signed into law by President Obama. The Act provides for financial and regulatory reform.

The Act will impose executive compensation and corporate governance requirements on public companies and public and some private financial institutions. New powers for public company shareholders include:

• Nonbinding shareholder say-on-pay vote at least once every three years. The Act requires public companies with securities registered under the Securities Exchange Act of 1934 to give shareholders a "say-on-pay" by including a separate, non-binding proposal allowing shareholders to vote on the compensation of executive officers.
• Nonbinding shareholder vote on golden parachutes in change of control transactions, separate from a vote approving the transaction. The Act requires every proxy statement seeking a shareholder vote to approve an acquisition, merger, consolidation or proposed sale of assets to include any agreements with any named executive officer of the seller concerning compensation based on or relates to the transaction and the aggregate total compensation.
• Shareholder access to issuer proxy materials for nominating director candidates.
• Prohibition against broker voting of securities without instruction from the beneficial owner in election of directors.

New disclosure requirements for public companies include:

• Relationship of executive compensation to shareholder return in proxy materials. The Act requires the SEC to amend its disclosure rules for proxy statements to require a disclosure of the relationship between compensation actually paid to named executive officers and the financial performance of the issuer.
• Ratio of chief executive officer pay to the median compensation of other employees in securities filings such as prospectuses, annual reports, proxy statements. The Act requires the SEC to amend its regulations to require that any prospectus, proxy statement or annual report filed with the SEC include a disclosure of (a) median of the annual total compensation of all employees of the issuer (other than the chief executive officer), (b) annual total compensation of the chief executive officer, and (c) relationship between the foregoing amounts.
• Issuer's policy on separation of the roles of chairman and chief executive officer.
• Compensation consultants' conflicts of interest.

Continue reading "Dodd-Frank Act" »

John Lauderdale, from Carmel, CA, has credits for being the stage manager for Jeopardy, Wheel of Fortune, and American Gladiators. It is amazing how some shows and people have staying power while celebrities once on top have unexpectedly divorced and left in financial ruin.

Jon Gosselin, former star of "Jon & Kate Plus 8" faced severe financial difficulties with an unsold home and mounting debts in 2009 after earning more than $2 million with Kate from their TV show. With the divorce, Kate still got gigs with her own show and on Dancing with the Stars. According to www.californiafamilylawblog.com, Jon, with $13,000 per month in child support and $90,000 to family law attorneys, was looking at the possibility of a Chapter 13 bankruptcy filing.

Prior to his death, Gary Coleman blamed his financial woes on mismanaged finances and a lifelong medical condition.

Kevin Coster and Cindy Silva's divorce cost an estimated $80 million.

After eight years of dating, Harrison Ford and Calista Flockhart got married in June 2010 in New Mexico, where Ford is filming "Cowboys and Aliens." Harrison Ford's 2004 divorce from Melissa Mathison cost an estimated $85 million.

Marion Jones won five medals at the Olympics in 2000 and signed multimillion-dollar endorsement afterwards, but after allegations of steroid use, she spent a significant amount of money on legal representation to fight the allegations. The legal distractions cost her major international meets. When Jones became deep in debt, and $2.5 million mansion went through mortgage foreclosure.

Mike Tyson filed bankruptcy in 2003 after spending on cars, mansions, and a defense for rape.

Donald Trump filed for Chapter 11 protection in 2004 and 2009 to reorganize debts related to construction.

Olympic Gold Medal ice skater Dorothy Hamill came into difficult times and made a choice to file for bankruptcy in 1996.

Continue reading "Celebrity Bankruptcies" »

When determining whether to file bankruptcy, it helps to have background on bankruptcy terms:

AUTOMATIC STAY: injunction that automatically stops lawsuits, foreclosure, garnishments, and collection activity against the debtor the moment a bankruptcy petition is filed.

BANKRUPTCY: legal procedure for dealing with debt.

BANKRUPTCY CODE: Title 11 of the United States Code (11 U.S.C. §§ 101- 1330), the federal bankruptcy law.

BANKRUPTCY ESTATE: legal or equitable interests of the debtor in property at the time of the bankruptcy filing. The estate includes all property in which the debtor ownership even when property is used by another.

BANKRUPTCY JUDGE: judicial officer who is the court official with decision-making power over federal bankruptcy cases.

BANKRUPTCY PETITION: formal request for the protection of federal bankruptcy laws.

BANKRUPTCY TRUSTEE: private individual or corporation appointed in Chapter 7, Chapter 12, and Chapter 13 cases to represent the interests of the bankruptcy estate and the debtor's creditors.

CHAPTER 12: bankruptcy designed for family farmers or family fishermen with regular annual income to propose and carry out a plan to repay debts.

CHAPTER 7: chapter of the Bankruptcy Code providing for "liquidation," i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.

CHAPTER 11: reorganization bankruptcy, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.

CHAPTER 13: chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. Chapter 13 allows a debtor to keep property and pay debts in 3-5 years.

REAFFIRMATION AGREEMENT: agreement by Chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property subject to repossession.

Continue reading "Glossary of Bankruptcy Terms - San Francisco" »

Subrogation is the substitution of one person in the place of another for a claim, demand or right against a third party. The substituted party succeeds to the rights of the other against the third party. Subrogation generally arises when someone pays the debt of the other.

For example, insurance companies are obligated under policies to pay an insured for property damage or personal injury which the insured sustained. When the damages appear to have been caused by the negligence or fault of third parties, insurance companies pursue claims against the alleged third party tortfeasors to recover insurance payouts to the insured. For instance, a landlord rents a house to a tenant who causes a fire to the house by leaving a pan on the stove with oil in it. The house burns down, and the landlord goes to his fire insurance company for funds to rebuild the house. The insurance company can recover the funds from the tenant if it is able to prove negligence.

In a subrogation lawsuit, the judge at trial will ask the insurance company how negligence will be proved. Sometimes the insurance company thinks that the defendant will default, and will not be prepared to prove negligence, but only damages. In default, the insurance company can prove up damages with photographs of damages and the invoices on construction costs to rebuild or amounts paid to the insured.

To prepare to prove negligence, the insurance company will need to interview witnesses like the defendant on what caused a fire, or the incident. The insurance company should send an adjuster or representative who took part in the interviews or read the claims logs so that statements can be authenticated for admissibility into evidence as business records, or exceptions to hearsay. When a defendant sees a plaintiff that is unprepared, the defendant might offer less in settlement because a plaintiff unable to show liability could end up with nothing at trial.

In a subrogation lawsuit, the insurance company should also send someone to the trial who has settlement authority. A plaintiff is lucky when it comes across a defendant that has a lot of money. While everyone can say he's poor, the plaintiff can be prepared to stay firm on a demand by checking into the assets of the defendant like seeing if he owns any homes, whether he's close to filing bankruptcy, what other debts he has. Most plaintiffs would rather get what they can without having to deal with collections even when they get the big judgment. A defendant can threaten bankruptcy when negotiating settlement by scaring a plaintiff into accepting a low amount because if the defendant filed bankruptcy, the plaintiff might get nothing, or at least there would be a delay in payment.

Once assigned a judge for settlement prior to trial, the judge assists in presenting demands to opposing parties, but when settlement does not result, the case gets set for trial. A party not ready for trial might ask for a continuance, but a judge is not expected to grant a continuance for not being prepared. Prior to trial, the parties can still discuss settlement informally. Sometimes parties end up settling the minute before beginning trial.

Continue reading "Subrogation - San Francisco" »

In the Delta Air Lines Chapter 11 bankruptcy case, the United States Court of Appeals for the Second Circuit decided on June 22, 2010 that equity owners under pre-petition leveraged aircraft leases were entitled to assert claims against Delta for tax losses from Delta's insolvency and foreclosures on the aircraft.

The court addressed double recovery issues involving Tax Indemnity Agreements ("TIAs") common in leveraged leases. Leveraged leases are financing structures employed by airlines to fund the aircraft acquisition. The purchase price is funded partially by an equity owner, and partially by debt (approximately 80%). The aircraft gets leased to the airline, which makes lease payments, calculated to service the debt and provide a cash return to the equity owner. The primary benefit for the equity owner is not the cash return, but being able to take accelerated depreciation deductions under the Internal Revenue Code to offset general taxable revenue.

To protect the tax benefit, the equity owner enters into a TIA with the airline, where the airline agrees to compensate the equity owner if the equity owner has to recapture tax deductions taken like in a default in rent payments and subsequent foreclosure on the aircraft.

In the Delta case, Delta's 2005 bankruptcy filing was an event of default under its aircraft leases, resulting in foreclosure on the aircraft. The equity owners filed claims under the TIAs based upon the recapture of their depreciation deductions.

The Second Circuit found that the purpose of the TIAs was to compensate the equity owners for their tax losses and relied on the enforcement on negotiated contracts even where a double recovery might result. The Second Circuit clarified that general concepts of bankruptcy equity and fairness should not overturn the carefully negotiated contractual rights of sophisticated parties.

Continue reading "Delta Air Lines Chapter 11" »

On January 9, 2003, Richard Wiseman reported in "Be lucky - it's an easy skill to learn" tips on how to take advantage of chance opportunities. For someone going through bankruptcy, financial difficulties, family squabbles during estate planning, or foreclosure, the article gave good insight on how to recover from challenging situations with dignity.

The article was based on a 10 year study of people who seem to be lucky in every area of life - marriage, financial stability, children, career - and people who appear to be accident-prone and always at the wrong place at the wrong time.

Wiseman concluded that thoughts and behaviors are responsible for much of the events that occur in the lives of people down on luck. Lucky people tend to look fear in the face and say they do not care. They do not look at where they have been but where they are going. Unlucky people miss opportunities because they are too tense with anxiety disrupting their ability to notice the unexpected. Lucky people are less focused so they see more. Wiseman gave the example of searching for a partner. Unlucky people go to parties intent to find the perfect someone and miss good opportunities to make friends. They miss chances because they are less relaxed, too routine, and not open to see things other than what they are looking for.

Wiseman summarized the luck formula: lucky people create and notice chance opportunities, make decisions by listening to intuition, have positive expectations, and adopt resilient attitudes to transform bad into good. Even when things go bad, lucky people imagine how things could be worst. For instance, someone who suffers from balance issues for two months after being hit by a truck might feel lucky because he could have been killed.

Continue reading "Being Lucky - San Francisco" »

In this economy, with unemployment and underemployment, many real property owners are falling into financial difficulties when their tenants do not pay rent and blame it on property conditions.

A tenant's duty to pay rent is subject to a material breach by the landlord.

If the landlord substantially interferes with the tenant's use and enjoyment of the leasehold, the tenant's obligation to pay rent is excused due to constructive eviction only if the tenant gives notice and vacates the property within a reasonable amount of time.

For example, Tenant had a 12 month apartment lease but moved out after 7 months. Tenant repeatedly complained to Landlord about the malfunctioning of the toilet and drain, but Landlord did nothing. Without a functioning toilet and drain, Tenant's use and enjoyment of an apartment was substantially interfered with. Tenant might withhold rent to cover the costs of hiring plumbers. If the plumbers could not repair the malfunctioning, Tenant might move out. In a breach of contract action against Tenant for failure to pay rent, Tenant would have a valid claim for constructive eviction, and might not be liable for the remaining term of the lease or rent withheld.

The landlord must provide property that is reasonably suited for residential use. Most states now require the landlord to repair. If the landlord breaches, the tenant may (1) refuse to pay rent, (2) remedy the defect and offset the cost against the rent, or (3) defend against eviction if the premises are not safe or habitable.

For example, an apartment was arguably not habitable because it did not have a functioning drain and toilet. Tenant withheld rent to offset the costs of plumbers he hired. When the plumbers were not able to repair the malfunctioning, Tenant moved out and stopped paying the rent after seven months. In a breach of contract action against Tenant for failure to pay rent, Tenant would have a valid claim for violation of warranty of habitability, and might not be liable for remaining term of the lease or the rent withheld.

Continue reading "Landlord - Tenant Duties and Obligations - San Francisco" »

Title to property can be held in various forms. One form is a joint tenancy. A joint tenancy exists when two or more individuals own property with the right of survivorship (upon the death of a joint tenant, the interest terminates and automatically goes to the surviving joint tenants). A joint tenancy requires four unities for creation: each joint tenant having (1) unity of possession (equal right to possess or use of property), (2) unity of interest (each interest equal to the others), (3) unity of time (at the same time), (4) unity of title (in the same instrument).

Although an interest in a joint tenancy cannot be devised, joint tenants can convey all or part of their individual interests during their lifetime to a third party, severing the joint tenancy. Once the joint tenancy interest is transferred during the lifetime, the right of survivorship to that interest is destroyed and converted to a tenancy in common.

A joint tenant may grant a mortgage interest in the joint tenancy property to a creditor. In the lien theory jurisdiction (majority view), the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale.

For example, B and A bought a house with a deed of title that provided they were "joint tenants with rights of survivorship". B borrowed $10,000 from Lender on his own without A knowing, and gave Lender a mortgage on the house as security for the loan. If A died, under the lien theory, at A's death, A's interest would pass to B through the right of survivorship, resulting in B getting a fee simple absolute, subject to Lender's mortgage, and leaving A's estate no interest in the house.

In a title theory jurisdiction (minority view), a mortgage severs the title and the tenancy between the joint tenants and creditor is converted into a tenancy in common.

Adverse possession allows ownership to be granted to a person who exercises exclusive, continuous, actual, open and notorious, hostile, physical possession of property for a certain amount of time. But, it would be difficult for a joint tenant to argue ownership of an entire property after the death of a joint tenant in a title theory jurisdiction even if the person lived at the property alone because the use of the property was not hostile from the unity of possession.

A joint tenant must account to cotenants for rent received from third parties, but can deduct operating expenses when calculating net proceeds.

A joint tenant can collect contribution from cotenants for paying more than his portion of operating expenses (i.e. taxes or mortgage interest), unless he is the only one in physical possession of the property and his use is equal to or outweighs the overpayment.

Continue reading "Joint Tenancy - San Francisco" »

After recovering from personal injuries and suffering financial distress from medical expenses, accident victims might think a wrongdoer or its insurance company would feel sorry for the injuries caused, but accident victims should not be too naïve when money concerns override humanity.

Even when a big rig truck hits an innocent pedestrian within a crosswalk when the light is green, the truck driver and insurance company will think of numerous ways to delay settlement, not apologize, or payout the least possible to the accident victim. First, the truck driver might claim there was a witness and assess comparative fault on the innocent victim. When this happens, the claimant should ask that the witness be substantiated. The insurance adjuster for the wrongdoer might claim work product on the witness statement, and compel the claimant to file a lawsuit. When the witness happens to coincidentally be affiliated with the wrongdoer, like a door company that receives building suppliers from the trucking company, there is cause for bad faith settlement concerns. The accident victim should not be afraid to invest in getting a filed endorsed copy of a complaint by the court to send to the insurance adjuster to show how serious getting a fair and reasonable settlement is.

As to medical expenses, when a claimant has foresight in having his own health insurance, wrongdoers argue claimants should not be entitled to a double recovery when there are contractual write offs by medical providers from agreements with the claimant's health insurance. The tortfeasor argues the windfall should go to him so that he does not have to pay the damages actually caused. This is in direct opposition to the collateral source rule. When people pay premiums to protect themselves with insurance, they should benefit from the existence of that coverage. It does not represent a double benefit when someone pays premiums for months and years.

In Peri v. Los Angeles Junction Ry.Co. (1943) 22 Cal.2d 111, 131, the court decided that while it is true the plaintiff in the case received compensation while he was unable to work, that sum may not be deducted from his loss of earnings recovery, because it was received from an insurance company under a policy owned and held by him. Damages recoverable from a wrong are not diminished by the fact that the party injured has been wholly or partly indemnified for his loss by insurance effected by him, and to the procurement of which the wrongdoer did not contribute.

In Helfend v. Southern California Rapid Transit District (1970) 2 Cal.3d 1), the court explained that the collateral source rule encouraged citizens to purchase and maintain insurance for personal injuries. The tortfeaser should not garner the benefits of his victim's providence. An injured party's compensation from a source wholly independent of the defendant should not be deducted from damages otherwise collectible from the defendant. The court ruled all evidence of collateral sources inadmissible.

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On April 21, 2010, SFGate.com reported in "MUNI budget cuts service 10%" that MUNI riders can expect longer waits for more crowded buses in exchange for their higher fares, while MUNI operators can expect labor concessions in exchange for fewer layoffs.

In this recession, riding public transportation in San Francisco is no longer a simple concept of either purchasing a monthly discount fast pass or paying a single ride fare. In the past few years, police patrols have stepped up in making sure people pay their fares by going on rides and ticketing people $75 for expired transfers or no proof of payments. These days, it might take more than $2 to get from one place to another when transfers sometimes expire during a ride that takes over 1 hour.

There has also been the introduction of different types of fast passes. Most recently, the San Francisco Municipal Transportation Agency (SFMTA) Board of Directors and the Bay Area Rapid Transit District (BART) Board of Directors approved a pilot program to allow senior and disabled customers unlimited access to BART in San Francisco and on all Muni transit services with a MUNI Senior/Disabled Pilot Pass.

Fare gates operated by BART within San Francisco will be programmed to accept the Senior/Disabled Pilot Pass and the pass will be accepted on all Muni vehicles. To participate in this pilot program, seniors and persons with disabilities must register for a random lottery by going to www.sfmta.com/pilotpass or calling 311.

Persons with disabilities and seniors must demonstrate eligibility for the Senior/Disabled Pilot Pass with a Regional Transit Connection (RTC) Discount ID Card. A Discount ID Card costs $3.00 for new, renewal, or visitor; $5.00 for replacement. All pilot pass participants must carry their purchased pass and a valid ID at all times to verify age or disability when using MUNI or BART within San Francisco. The pilot passes may only be used by the person for whom they are issued.

Continue reading "San Francisco MUNI Senior Pilot Pass " »

Even when people find success, they can still face challenging financial times. In "Barry Bonds facing 30 years in jail and a rough financial future" Beth Gaston Moon on November 15, 2007 reported that Barry Bonds' cold attitude toward the media and toward humanity in general did not earned him many endorsement gigs, and while his career earnings were in the $200 million, legal bills mounted as a federal grand jury accused Bonds of lying under oath when he said he was unaware substances handed out by personal trainer Greg Anderson were steroids.

People get off insulting others by the how bad things look, and highlight people who live double lives -married lawmaker on family matters committee boasting about lobbyist mistresses, doctor with $150K/month salary overdosing celebrity client, diligent lab technician murdering a co-worker, home run king losing for cheating. It's not education, family upbringing, or affluence that motivates people to cross the lines, but even when people make assumptions from prior conduct, life always brings unpredictability. Everyone is a mystery, changing at every meeting, transforming from kindness to hatred. Memories do not define people in the moment when disassociating from someone causes another to miss out, or listening to someone benefits the adviser more than the counseled.

Fast forward 3 years from Moon's article to 2010. Though Bonds' legal troubles might have took a bite of his savings, there is no news on any bankruptcy filings by him. In June 2010, a federal appeals court ruled that drug-test records prosecutors linked Bonds to steroid use could not be admitted as evidence against him in his trial on perjury charges, unless prosecutors could compel Greg Anderson to confirm the blood and urine samples that tested positive in a confidential 2001 drug screening came from Bonds.

When Greg Anderson refused to testify, the federal appeals court deemed the lab records inadmissible because there was no evidence the blood and urine tested came from Bonds.

Continue reading "San Francisco Giants Slugger Barry Bonds" »

There are two US Bankruptcy judges in San Francisco. The US Bankruptcy court in San Francisco is located at 235 Pine Street, San Francisco, CA, in the heart of the financial district. The judges' names are Judge Dennis Montali and Judge Thomas Carlson.

According to his bio on the US Bankruptcy Court, Northern District of California web site, Judge Carlson graduated from Beloit College, B.A. in 1969, and then went on to Brandeis University, for graduate studies in American History from 1970-71. He graduated from Harvard Law School, J.D. in 1975 and received a LLM in Tax from N.Y.U. Law School, LL.M. in 1985. Judge Carlson is well respected by attorneys for seeing things in cases that sometimes the parties do not catch. He appears to want the best interests of all parties served, even continuing status conferences sometimes to give parties another chance to review their issues to make sure they are making the right decisions. In one recent status conference in June 2010, he asked the debtor to review again to see if dismissal of his Chapter 11 case rather than converting to Chapter 7 was really in his best interest, considering he had unsecured debt that could be discharged in a Chapter 7.

According to his bio on the US Bankruptcy Court, Northern District of California web site, Judge Montali received a Bachelor of Arts, University of Notre Dame in June 1961, and a Juris Doctor, University of California, Berkeley in June 1968. He was appointed United States Bankruptcy Judge Northern District of California, San Francisco Division in April 23, 1993, and reappointed in April 23, 2007.

A bankruptcy judge is not the same as a state court judge. The bankruptcy code is federal law and the US Bankruptcy Court has exclusive jurisdiction in all bankruptcy cases. A person cannot file bankruptcy in a state court. Bankruptcy judges are federal judges. The bankruptcy court is a court of specific jurisdiction, meaning that a person cannot file any other claim in bankruptcy court except for matters related to bankruptcy. If there is a related civil action, like a contract dispute, the person must file the action in a state court.

A debtor might need to appear in bankruptcy court for status conferences or motions when there are decisions to make on keeping personal property that the person does not own outright, disputing reliefs from automatic stays, or asking to re-assume liability for a certain debt.

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Understanding how the insurance claims process works after a personal injury can go a long way in preventing an injured party from going into financial turmoil from medical expenses, lost wages, and therapy for emotion distress after an accident that was not the fault of his/her own.

The insurance adjuster for the wrongdoer is not always friend who wants to help the injured party get a fair and reasonable recovery. He/she works many claims, and attempts to settle claims for the lowest amount to impress his/her manager at the insurance company. Even when a wrongdoer/insured has paid premiums, and believes it's reasonable to give to an injured party's medical, wage loss, and general damages, the adjuster may not play fair.

The California Department of Insurance helps claimants when there is an improper denial or delay in settlement of a claim. Types of improper denials are when an adjuster does not provide an explanation for why certain medical expenses are considered for reimbursement while others are not. For instance, if an adjuster includes a hospital bill but not a doctor bill for the same medical visit in a settlement offer, there is a flag for questioning especially when the hospital bill is usually more expensive than a doctor bill, and the treatment from a visit is usually from the doctor, not by being present at a hospital.

Types of improper delays are requiring a claimant to provide information on collateral sources for evaluation in the reduction of medical expenses before a claim can be settled. Many claimants thinking to cooperate in the claims process do not realize that a claims model may be set up for litigation preparation for the wrongdoer when settlement does not work.

The adjuster gets information on a claimant's collateral sources by asking the claimant to complete a medical authorization at the beginning of the process when the claimant is not suspecting the adjuster is not on his/her side. The medical authorization allows the adjuster to get all the medical and billing records, seeing what special deals the claimant has with the medical provider from his/her own insurance. Then the adjuster deducts from the medical specials that actual amounts the claimant paid, benefiting from the claimants own foresight in obtaining insurance. If the claimant takes such a settlement, the claimant loses from letting the wrongdoer benefit from the premiums he/she paid for medical benefits. When an adjuster does this, tell the adjuster that he/she is negotiating in bad faith and can be reported to the California Department of Insurance. The wrongdoer's insurance company has the duty to protect its insured for all legal liability.

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For contractors who are not licensed, they need to be care not to go into financial turmoil by taking on work that requires a license.

There have been recent cases in California awarding homeowners disgorgement of fees paid to general contractors under Business and Professions Code Section 7031. Under Business and Professions Code Section 7031, no person engaged in the business or acting in the capacity of a contractor, may bring a lawsuit for the collection of compensation for the performance of any act where a license is required without alleging that he/she was a duly licensed contractor at all times during the performance of that act.

In White v. Cridlebaugh, 175 Cal. App. 4th, 1535 (2009), the plaintiffs filed an action against various defendants including a building contractor on the construction of a retirement home. The corporation that acted as the building contractor on the project violated California licensure requirements. The general contractor had been licensed at one time, but failed to adhere to the guidelines or insurance to remain licensed. Based on the license violation, the homeowners were entitled under Business and Professions Code section 7031(b) to recover all compensation paid to the contractor for the unlicensed work. The recovery authorized by section 7031(b) was not reduced by the unlicensed contractor's claim of offset for materials and services provided in connection with the unlicensed work.

Even when a homeowner knows that the general contractor is unlicensed, the general contractor still has to disgorge all payments, including costs of the job.

The legislative intent of the Business and Professions Code appears to protect consumers from unlicensed contractors, and the courts evaluate whether the general contractor is licensed at the time of negotiating the contract with the homeowners prior to examining any unjust enrichment to the homeowners.

Continue reading "Unlicensed Contractors in California" »

Effective April 22, 2010, the Environmental Protection Agency (EPA) issued a rule (Lead; Renovation; Repair; and Painting Program) requiring lead-safe practices aimed at preventing lead-based paint hazards when renovating, repairing, and painting housing and child-occupied facilities.

Under the rule, contractors performing renovation, repair and painting activities that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and follow particular work practices to prevent lead poisoning.

The EPA requires companies performing renovation, repair, and painting projects that disturb lead-based paint in pre-1978 homes, child care facilities and schools be certified by EPA and that they use certified renovators trained by EPA-approved training providers to follow lead-safe work practices. People can become certified renovators by taking an eight-hour training course from an EPA-approved training provider.

For homeowners, this means if they have a painter, repair person, remodeler work on their homes or real property such as residential real estate or commercial building with a child care service, daycare, school or afterschool program, that could disturb the old paint, the painter, handyman individual, or general contractor may need to do comply with the EPA rule requiring certification to use lead-safe work practices and comply with procedures on containing the work area, minimizing dust, and cleaning up thoroughly after the completion of work.

For people who buy or sell real property, they need to make sure anyone who completed work in the six weeks since April 22, 2010 disclose that there was work performed relating to repair, renovation, painting, and whether or not the handyman individual, painter, or general contractor was EPA certified.

Continue reading "Lead Paint - San Francisco" »