December 10, 2010

We here at the Indiana Law Update sincerely hope that none of our readers ever need to apply yesterday's decision from the 7th Circuit in In re Wick, Case No. D-10-0015 to their own practice. However, it is an interesting decision dealing with how the Court will treat a request to resign from its bar.
Lessons:

1. The Seventh Circuit will not allow you to resign from its bar in order to avoid attorney discipline.

http://indianalawupdate.com/entry/7th-Circuit-Will-Not-Allow-You-to-Resign-from-Its-Bar-to-Avoid-Disbarment

December 7, 2010

I.C. Chapter 32-21-5 abrogates the common law rule of caveat emptor with regard to representations made in a statutorily required Sales Disclosure Form. Yesterday, the Court addressed a related issue in Rex Breeden Revocable Trust v. Hoffmeister-Repp, Case No. 03A04-1003-CT-18 -- whether these rules apply to any residential real estate sale to a living trust. The Court found the statute ambiguous and limited its language to sales from one person to that person's own living trust.

In this case, a homeowner sold a home to a buyer. However, the buyer did not buy the property directly; rather, he purchased it using a living trust. A dispute arose concerning whether the seller had made misrepresentations about the residence and the buyers eventually brought suit. The parties filed cross-motions for summary judgment and the trial court granted the seller's motion. The buyers appealed.

At issue was whether I.C. Chapter 32-21-5 applied to the sale. I.C. § 32-21-5-1(b)(9) states that this Chapter does not apply to "[t]ransfers to a living trust." The buyer argued that this language clearly exempted this sale from the Act. The seller argued that this could be illogical. The Court found this language ambiguous -- arguably because the parties disagreed over its interpretation.

http://indianalawupdate.com/entry/Residential-Real-Estate-Disclosures-Must-Be-Made-in-Sale-to-Living-Trust

A former executive of the bankrupt health care company Canopy Financial Inc. has agreed to plead guilty in an alleged multimillion-dollar fraud.

Court documents released Wednesday say former chief technology officer Anthony Banas will plead guilty to wire fraud.

Chicago-based Canopy was known as one of the nation's fastest growing businesses before its 2009 bankruptcy. Many clients relied on it to pay medical bills.

Banas and former chief operating officer, Jeremy Blackburn, have been charged with wire fraud, which carries a maximum 20-year prison sentence.

Banas' agreement says he participated in transferring $60 million of investor funds and misappropriating $18 million in health care savings accounts.

Messages left for defense attorneys weren't immediately returned.

Boston lawyer Edward M. Swartz, a product safety advocate who garnered national headlines with his annual list of the 10 toys he deemed most dangerous, died Saturday from congestive heart failure at his home in the Brookline section of Chestnut Hill. He was 76.

Mr. Swartz, a Chelsea native who put himself through law school in the 1950s and began publishing the dangerous toys list in the early 1970s, won multimillion-dollar judgments for clients injured by defective products ranging from little toy people to pools.

President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of showing action on the economy ahead of the November elections.

An administration official said the tax breaks would save businesses $200 billion over two years, allowing companies to have more cash on hand. The president will outline the proposal during a speech on the economy in Cleveland Wednesday.

Amid an uptick in unemployment to 9.6 percent, and polls showing that the November election could be dismal for Democrats, Obama has promised to propose new steps to stimulate the economy. In addition to the business investment tax breaks, he will also call for a $50 billion infrastructure investment and a permanent expansion of research and development tax credits for companies.

The proposals would requires congressional approval, which is highly uncertain given Washington's partisan atmosphere.

Outsourcing has become easier with modern technologies like the Internet.  I suspect outsourcing will become even more popular as businesses seek greater efficiency and as professional services become more specialized.

If you are a business handling confidential client information, outsourcing comes with risks and responsibilities.  The risks are fairly obvious.  Sensitive information in the hands of third parties presents opportunities for identity theft, fraud, and other illegal or unseemly activities.  In many cases, you cannot closely monitor third party activities or easily hold them accountable for mishandling information or breaking confidences.

Such risks probably do not outweigh the benefits of outsourcing, but they should perhaps inspire your adhesion to policies and procedures designed to minimize them.  For example, maybe all your clients should know about and give explicit written consent to your outsourcing, even if your outsourcing seems like a commonplace, obvious, or implied part of the service being offered.  Although you may have good relations with your third-party vendors, keep in mind that the good relations are yours, not your clients’.  Even if you regularly outsource to a firm which you know and trust and which has its own professional responsibilities, your clients may have personal reasons for avoiding contact with your vendors of first choice.

You may also wish to formally evaluate the credibility of third-party vendors you hire to perform outsourced work, perhaps maintaining a list of credentials for being eligible to handle confidential information.  Explaining these concerns to your clients, and the steps you’ve taken to mitigate them, will inspire confidence in your services.