The business of wholesaling real estate is often conducted by persons who are not licensed as a real estate broker or as a real estate sales agent.  Real estate wholesalers typically seek to find properties that are not suitable, in their present condition, for listing on a multiple listing service (MLS) and which are not suitable for sale at a retail price.

Once a real estate wholesaler locates a distressed property, the wholesaler, who deals directly with the property owner, attempts to negotiate the terms of a purchase contract or an option contract.

After entering into a real estate purchase contract or a real estate option contract with the property owner, the real estate wholesaler will then “sell” the contract to someone else.  The person who buys the wholesaler’s contract may be a “rehabber,” someone who fixes-up dilapidated properties and then resells them, either to consumers or to other investors.

Historically, Texans (as well as other Americans) could freely buy and sell rights in real estate purchase contracts and real estate option contracts.  That is, they could freely engage — without a real estate license — in the business of real estate wholesaling.

On September 1, 2017, however, the right to freely engage in the business of real estate wholesaling — in Texas — was diminished.  As explained below, the extent to which that right was diminished in Texas is yet to be determined.

Senate Bill 2212 (SB 2212) amended the Texas Occupations Code, by adding section 1101.0045, effective September 1, 2017, which, in relevant part, states:

Section 1101.0045 can reasonably be interpreted in at least two very different — and opposite — ways.

First, section 1101.0045 can be interpreted to mean that a real estate wholesaler’s failure to disclose the equitable nature of the rights being sold will, henceforth, be deemed to be the brokerage of real estate (for which a real estate license is required) and that disclosure alone is all that a real estate wholesaler must do to avoid violating this law.

In other words, according to this interpretation, a real estate wholesaler need only disclose and, after disclosure, may conduct “business as usual.”  This is the simple reading of the law and, indeed, is the explanation of the law which was given by the author of this legislation.  The courts, however, are free to disregard the author’s explanation.  

Alternatively, section 1101.0045 can be interpreted to mean that although a failure to disclose will certainly constitute the brokerage of real estate, and thereby bring an unlicensed real estate wholesaler within the reach of the statute, disclosure alone is not sufficient to protect the unlicensed wholesaler.

However, if disclosure alone is not enough to protect the unlicensed wholesaler, what else is required?  Answer: to “not use the option or contract to purchase to engage in real estate brokerage,” which is the first prong of the two-prong test of section 1101.0045(a)(1).

But that, you may say, just delays the question.  What does it mean to “engage in real estate brokerage”?

The statutory definition of what constitutes “real estate brokerage” is a bit lengthy, but the short answer is that brokering real estate means selling property: (a) that one does not own, (b) for a fee or other thing of value.

There is absolutely no dispute that real estate wholesalers expect to be paid for their efforts, which, of course, is a completely legitimate expectation.

Thus, the only question that remains is whether a real estate wholesaler “owns” the property being sold.  The short, but not necessarily easy, answer is that the wholesaler “owns” an “equitable” property right in the real estate contract that is being sold, but clearly does not own the legal rights associated with the property.  

Whether the Texas courts will decide that a real estate wholesaler sells “property” that the wholesaler “owns” or does not “own” is, currently, an open question.  As courts and judges have often said about various legal issues, this is “a question on which reasonable minds could differ.”  Translated, there are plenty of employment opportunities in this statute for Texas lawyers.

Perhaps one clue to answering the question of how the Texas courts, in a quest to reconcile the different parts of this statute, might answer the question of whether a real estate wholesaler “owns” what is being sold, is to look at the penalties for violation of section 1101.0045.

The most frequently seen penalty throughout this statutory scheme is monetary: no less than, but up to 3 times the profit realized by the wholesaler.

If we assume, for the sake of discussion, that the Texas courts will rule that disclosure alone is insufficient to bring a non-licensed real estate wholesaler into compliance with the statute, and that wholesalers do not own what they are selling, then it would not be surprising if the Texas courts were to hold that an unlicensed real estate wholesaler violates the statute only if the wholesaler is paid a fee.  In other words, “No Fee = No Brokerage.”  And, of course, 3 times $0.00 is $0.00.

Section 1101.0045 does not apply to licensed real estate brokers (sales agents may not lawfully work independently from their sponsoring broker), nor does it apply to attorneys (who are statutorily exempt from the real estate licensing statute).

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Hiring a lawyer — as almost everyone knows — is expensive.  Furthermore, most people would prefer to spend their hard-earned money on just about anything other than legal services.  Thus, when hiring a lawyer, clients demand — and deserve — as much value as possible for the legal fees they pay.

Take, for example, one of our longtime clients, Penny Wise.*  Ms. Wise is a smart, hardworking, and entrepreneurial woman for whom our law firm has done legal work for many years.

We first met Ms. Wise shortly before she started her first business.  At the time, Ms. Wise had just inherited a handsome “nest egg” from a recently deceased relative and wanted to use a small amount of the inheritance to launch her first business.

We suggested to Ms. Wise that she consider subscribing to the LAW Plan, which is our firm’s version of a legal services plan.  Since Ms. Wise was about to start a business, we suggested the Small Business LAW Plan, rather than the Personal LAW Plan.

As we explained to Ms. Wise, each LAW Plan option would provide her with priority access to a Texas attorney, who would answer her questions and counsel her on the multitude of legal issues that come up when starting a business.

We also explained to Ms. Wise that Small Business LAW Plan subscriptions include Registered Agent Service, as well as Demand Letters, written on a law firm letterhead, which we would be glad to send to any of Ms. Wise’s customers who neglected to pay her on time, or who paid her with “bad” checks.

Lastly, we explained that, as a LAW Plan subscriber, Ms. Wise would receive a 10% discount on legal fees for any matter that we might handle for her which is NOT covered by the LAW Plan, including fees for forming the business entity for her new business.

Penny Wise decided to save some money by using an Internet-based, non-attorney, to help her with the formation of business entity and to forgo subscribing to the LAW Plan.

Some time later, Ms. Wise contacted our law firm and requested representation in a lawsuit that had been filed against both her and her new business.

Unfortunately, because the Internet-based company from whom Ms. Wise had purchased her business entity formation documents is not a law firm, it was not able to provide Ms. Wise with the legal advice that she needed to make the best decisions.  As a consequence, Ms. Wise did not have the lawsuit protections that she thought she had purchased.

The good news is that our law firm was able to help her with the lawsuit, although Ms. Penny Wise did, after all was said and done, spend more on legal fees than she otherwise would have spent, had she obtained legal advice before legal troubles arose.

As the saying goes, “All’s well that ends well.”

Ms. Wise moved on from the lawsuit against her business, while still in possession of a good, albeit smaller, portion of her inheritance.

Romance struck soon thereafter, and Ms. Wise was engaged to be married.  When Ms. Wise called our law firm to share the good news, we suggested that she consider some premarital Asset Protection planning.  Not entirely unexpected, Ms. Wise dismissed the idea and, in a good-natured way, suggested that such concerns explain the plethora of “lawyer jokes.”

The next time we heard from Ms. Wise, several years later, was when she called us to request representation in her divorce case.  It seems her husband, Deadbeat Dan, wanted not only his rightful share of their marital property, but also a sizable portion of both the value of Ms. Wise’s business and of what remained of Ms. Wise’s inheritance.

Although our law firm was able to resolve Ms. Wise’s divorce case, there is little doubt that the divorce cost Penny Wise much more than it otherwise would have, if only Ms. Wise had done some effective premarital Asset Protection planning.

Moving on after divorce, Ms. Wise continued with her business, but also became interested in real estate investing.

Ms. Wise became quite successful as a real estate investor.  Unfortunately, however, Penny Wise again tried to save money on legal fees by not doing preventative legal work.  As of this writing, our law firm has resolved several legal matters relating to various real estate investments in which Ms. Wise has been involved.

But please do not misunderstand.  We are not complaining.  Penny Wise has been a very good client of our law firm for many years.  We just hope that you won’t be penny-wise and pound-foolish.



*Penny Wise is a fictional character.  The legal matters described in this article are also fictional, and are intended only to illustrate the perils of not obtaining legal assistance which is appropriate to one’s situation.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

QUESTION

Considering the high cost of litigation and the potential for a financially devastating outcome, I, like many others, have a generalized concerned about the possibility of being involved a lawsuit.  I do not, however, have any reason to believe that I will be involved in any particular lawsuit. 

What are the greatest legal risks to my financial bottom line? 

What can I do to protect against that risk?

ATTORNEY ANSWER

Clients often seek to manage and reduce legal risk, and rightly so.  The cost of litigation – whether in the form of adverse judgments or simply the expenses that must be incurred to litigate a case –  can bankrupt or severely impair the financial well-being of most individuals and businesses.

When discussing legal risk, clients often express concern about liability resulting from personal injuries others might sustain on the client’s real property, liability from automobile or other accidents, or liability from contractual or related business dealings that somehow went wrong.  These concerns are legitimate.  A large amount of money is lost to adverse judgments in these types of cases, as well as from litigating these types of cases.

The enormity of such losses might explain why many people seek to manage risk through use of various complicated and fancy (not to mention, expensive) asset protection strategies.  However, the truth of the matter is that the vast majority of people will never be involved in such high-stakes litigation and, therefore, do not need the (sometimes questionable) protection that might be provided by such strategies.

Simple (and usually less expensive) is often better than complex (and expensive).  Such is the case here.

Statistically, most Texans are more likely to find themselves in divorce court, fighting over the division of marital assets, than in a civil court fighting over personal injury or contract damages.  Thus, for most Texans it makes sense to focus, at least in the first instance, on the management of marital property.

A brief look at American marital property systems is necessary to better understand why Texas Divorce Courts pose such a great financial risk.

The marital property laws of all American states derive from two basic systems: the Common Law (aka: equitable distribution) system and the Community Property system.  Generally speaking, in Common Law states, married couples decide whether – and which – assets that are acquired during marriage will be considered “marital property” or part of the “marital estate.”  Upon divorce, courts in Common Law states divide the marital estate in a manner determined by the court to be “equitable.”  Most states can be classified as Common Law marital property states.

The Community Property system, on the other hand, presumes that all property acquired during marriage (with certain limited exceptions) is marital property.  Upon divorce, the marital estate – that is, all community property owned by the couple – is divided equally.  The community property form of marital property, having been derived from Spanish law, is found mostly in states located in the southwest and western areas of the country.

Texas statutes classify the Texas system of marital property as being of the community property variety.  Consistent with such a classification, all property acquired by Texans during marriage (again, with limited exceptions) is considered to be community property.

However, in sharp contrast to the “classic” or “textbook” definition of Community Property, Texas law provides that: “In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.”  Texas Family Code § 7.001.

Neither Texas statutes nor Texas judicial opinions articulate any objective or other meaningful standard by which to determine whether the division of marital property in any particular case is “just and right,” unjust and wrong, or somewhere in between.  Apparently, “just and right” is, as the statute itself states, whatever “the court [that is, the trial judge] deems” it to be.

Thus, the statutory mandate that Texas marital property be divided in “a manner that the court deems “just and right” is, for all intents and purposes, an almost unrestrained legislative invitation for the trial judge to do whatever he or she wants to do.  Indeed, what two or more judges consider “just and right” in a given situation might be vastly different.  There is absolutely no legislative (or judicial) attempt to ensure, or even promote, the uniformity of Texas divisions of marital property, whether from Texas county to Texas county, or even between different courtrooms within any given Texas county.

Furthermore, it is important to note that judicial discretion to divide Texas marital property in “a manner that the court deems just and right” is not limited to divorce cases that allege “fault.”  So-called “no-fault” cases are equally susceptible to the whims of the trial judge.  Thus, to the extent that a divorce litigant (or that litigant’s attorney) can cast the other party in a “bad light” before the trial judge, or where the other litigant brings judicial disfavor upon himself or herself for whatever reason, a divorce case that ostensibly is a “no-fault” case can, as a practical matter, yield a property division that is based on considerations of fault or other wrongdoing.

In all fairness to Texas judges, most probably hold a sincere belief that their “just and right” property divisions are, well, just and right.  The problem here is not most Texas judges; the problem is the Texas legislature.

The Texas legislature has failed to give Texas trial court judges any objective or otherwise meaningful guidance on how to properly divide marital property.  The result has been that each Texas trial judge that is tasked with making a “just and right” decision regarding the division of marital property has no choice but to apply his or her own values and ideas about how marital property should be divided in a given case.  The result is – literally – “Legislating from the Bench” – not because all or any particular judge has decided to be a “judicial activist,” but rather, because the Texas Legislature has failed to legislate.

Now for the good news.  The Texas Legislature has allowed you to do what it has failed to do.  Texas statutes affirmatively authorize and allow married couples to contract with each other on issues such as: specifying what property will (and will not) be considered marital property; whether and how marital property is to be divided; whether, in the event of divorce, one spouse may be made to pay the other spouse’s attorney fees (in whole or in part), whether one spouse may be made to pay alimony to the other spouse (and if so, how much), and other important issues.

More good news.  Marital property contracts are not just risk management tools that can be used in case of divorce.  Such contracts are also extremely valuable asset protection tools for couples where, for example, one spouse is self-employed or who engages in a profession or occupation that exposes that spouse to significant levels of litigation risk from dealings with third parties.

Lapin Law Group offers Affordable, Experienced, and Aggressive Divorce & Family Law Legal Services for Clients, and Cases, Throughout the State of Texas

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction, or since this publication may have changed statutorily or have been affected by judicial decision.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The reasons why lawful permanent residents (persons who have been issued a “Green Card”) (hereinafter “LPR”) become U.S. citizen are many and varied.  The following are the most common reasons.

1.  The Right to Have Rights: Chief Justice Earl Warren wrote that “Citizenship is [a] man’s basic right, for it is nothing less than the right to have rights.”  Perez v. Brownell, 356 U.S. 44 (1958).  Becoming a U.S. citizen will entitle a LPR to all the rights that are secured for citizens by the U.S. Constitution.

2.  Deportation: Consistent with the idea that citizenship is “nothing less than the right to have rights,” perhaps the most important reason a LPR might want to become a U.S. citizen is that citizens may not be deported (removed).  This is especially important because, although LPRs are, as a group, law-abiding people, none of us can predict the future with certainty.  It is not uncommon for a LPR to be placed in deportation proceedings as the result of some relatively minor offense.  Being deported can, of course, tear families apart or, at the very least, cause unnecessary — and avoidable — hardship.  Further, even if a LPR who is placed in deportation proceedings is ultimately successful in avoiding deportation, the legal fees associated with deportation defense can be staggering.

3.  Foreign Travel: Many LPRs travel abroad on a regular basis, either for business or pleasure, or to visit family and friends in their country of origin.  It is no secret to experienced international travelers that those traveling on an American passport experience less inconvenience from foreign border and other officials, as compared to their fellow travelers from other countries.  Also, many countries will allow a U.S. citizen to enter and visit their country for a short period of time, without requiring the U.S. citizen to obtain a visa.  Furthermore, U.S. Customs and Border Protection (CBP) officials can refuse a LPR reentry to the United States for a variety of reasons, some of which may be trivial or, worse yet, erroneous.  American citizens, on the other hand, have an absolute right to enter and remain in the United States.

4.  Living Abroad: U.S. citizens may live outside of the United States for an indefinite period of time.  LPRs, on the other hand, risk losing the privilege of reentering and living in the United States if they are outside of the United States for more than 6 months.

5.  Family Reunification: It is much easier — and quicker — for a U.S. citizen, as compared to a LPR, to bring their family members to the United States.  A U.S. citizen may sponsor their parents, spouse, and minor children, all without any limits, quotas, or priority dates.

6.  Federal Employment: Most positions of federal employment require U.S. citizenship.  Becoming a U.S. citizen thus provides a LPR with many more job opportunities.

7. Voting: LPRs live — and pay taxes — in the United States, but only U.S. citizens have the right to vote in U.S. elections.  “Taxation without representation” was one of the major reasons the American colonists declared their independence from Britain.  Becoming a U.S. citizen gives a LPR the right to vote and, by extension, to be truly represented in the political process.

8.  Become an Elected Official: Most U.S. elected positions require U.S. citizenship.  Once a LPR becomes a U.S. citizen, that person may run for, and hold, elective office at the federal, state, and local levels of government.

9.  Government Benefits: U.S. citizens are eligible for certain government benefits and other forms of financial aid, including college scholarships, that are unavailable to LPRs.

10.  Cost of Citizenship: Most “Green Cards” are valid for, and must be renewed every, 10 years.  Lost “Green Cards” must be replaced.  The United States Citizenship and Immigration Service (USCIS) fee to renew or replace a Green Card was $540.00, at the time this article was written.  The citizenship process, by comparison, is a “one-time” expense.  While it is true that the USCIS fee to renew or replace a lost “Green Card” is slightly higher than the fee to become a U.S. citizen, once a person becomes a citizen, that person will never again be required to pay the USCIS a fee — for anything.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The 2nd Amendment to the United States Constitution states that “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”

The United States Supreme Court, in the landmark case D.C. v. Heller, 554 U.S. 570 (2008), held that the 2nd Amendment is an individual right — not a collective right belonging to the Militia or to the State — that existed prior to the ratification of the Constitution.  In other words, the purpose of the 2nd Amendment is to protect a right which preexisted ratification of the Constitution.

In another landmark case, McDonald v. Chicago, 561 U.S. 742, the United State Supreme Court held that, just as other amendments which protect civil rights, such as those relating to religion and speech (1st Amendment), unlawful searches and seizures (4th Amendment), due process of law (5th Amendment), and cruel and unusual punishment (8th Amendment), the 2nd Amendment was “incorporated” and make applicable to the States by the post-civil war era 14th Amendment.

Thus, the United States Supreme Court has ruled that “the people” — United States citizens — have a constitutional right to “keep” and “bear” that is, possess and carry in public, common firearms that are suitable for self-defense, D.C. v. Heller, and that neither the federal nor state governments may infringe these rights.  McDonald v. Chicago.

A small minority of states have enacted what are known as “Constitutional Carry” laws, meaning that if a person may lawfully possess firearms, that person may — without a license — lawfully carry a concealed handgun in public.

On the other hand, the vast majority of states, including Texas, now have some sort of licensing scheme which allows residents and, often, non-residents, to obtain a concealed carry license.

Of the states that issue concealed carry licenses, some are classified as “may-issue” states, while others are classified as “must-issue” states.  In a “may-issue” state, an applicant for a concealed carry license may be denied a license even though the applicant has met all the objective statutory requirements for a license, such as training, background check, and payment of a fee.  In “may-issue” states, applicants must also pass a subjective “good cause” test.  “Good cause” is determined by a government official who possesses almost unlimited discretion to deny licenses to otherwise fully-qualified applicants.  Unfortunately, in many jurisdictions, the “good cause” test seems to consist of little more than whether the applicant is politically-connected in the jurisdiction where the license is sought.

In “must-issue” states, an applicant for a concealed carry license is statutorily entitled to the license if the applicant meets all the objective criteria for the license.  Texas, fortunately, is a must-issue state.

However, just because Texas is a must-issue state, that does not mean that every Texan who may lawfully possess firearms is statutorily eligible for a concealed carry license, which in Texas is known as a License to Carry (LTC) a Handgun.

The most common reason our Texas law firm sees for LTC denials is criminal history.  More specifically, it is not uncommon for an LTC applicant to have run afoul of the law at sometime in the past, typically when the applicant was a young adult.  Now, after many years of being a responsible member of society, the applicant is still haunted by that youthful indiscretion.

The relevant statute which applies to this issue states that a person is ineligible for an LTC if the person has even been “convicted” of certain crimes — including crimes which do not affect the applicant’s right to lawfully possess firearms.  The statute does contain exceptions, but unfortunately, by the time an LTC applicant contacts a lawyer, it is not possible, or at least feasible, for the applicant to take advantage of an exception, because the applicant’s LTC application has already been denied.

Many applicants who are denied an LTC mistakenly believe that they were not “convicted” of a disqualifying offense.  Almost invariably, these applicants believe that because they successfully completed deferred adjudication for an LTC disqualifying offense, they were not “convicted” of that offense.  Sometimes this belief is correct; often it is not.

The reason for this confusion is that not all Texas deferred adjudications are “created equal.”  Different courts use different deferred adjudication forms and, of course, these different forms contain different deferred adjudication clauses.  The old saying “words mean things” is especially applicable in this context.

Persons whose LTC applications have been denied by the Texas Department of Public Safety (DPS) have a right to an administrative hearing to appeal the denial.  Administrative hearings are held in a Justice Court in the locality where the applicant resides.

In order to successfully appeal the denial of an application for an LTC, the applicant — or the applicant’s attorney — must be able to successfully rebut evidence introduced by the DPS in support of its denial of the application for an LTC.  In order to do this, it will typically be necessary to make a legal argument, supported by citations to statutory law and/or judicial decisions, which seeks to persuasively demonstrate to the Court that the DPS wrongfully denied the application for an LTC.

For lawsuits filed in a Texas District or County court, a defendant usually must file an answer with the court no later than twenty (20) days after being served with a lawsuit.

For lawsuits filed in a Texas Justice court, a defendant usually must file an answer with the court no later than ten (10) days after being served with the lawsuit.

What, you might ask, is an “answer” that must be filed with the court?

The answer that must be filed with the court is nothing more than a properly-formatted legal document that tells the court that you do not agree with some or all of the statements contained in the petition that was filed by the plaintiff and with which you were served.

Filing a legally-sufficient answer — in a timely manner — is necessary to protect your right to tell your side of the story in court.

A word of caution: Although timely filing an answer will usually protect your legal rights, there are circumstances where filing an answer may actually WAIVE certain rights or defenses that you may have to a lawsuit.

The best course of action, of course, is to always obtain competent legal advice and representation as soon as possible, which often may be prior to the filing or service of a lawsuit.

But at a minimum, you should contact an attorney as soon as possible after being served with a lawsuit.  Any delay beyond this point in time may make it difficult — or possibly even impossible — to find an attorney who will have the time to help you.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office located in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

QUESTION

I am the owner of a small business and a real estate investor.  Although my businesses are profitable, I simply cannot risk a frivolous — and potentially ruinous — lawsuit. 

What steps can my businesses take that will keep them from being dragged through the court system?

ATTORNEY ANSWER

As the saying goes, “anyone can sue anyone else, at anytime, for anything.”  It is often little comfort for the owners of a business to have their lawyer tell them that frivolous lawsuits can usually be resolved relatively quickly and with relatively little expense. 

So here are the top 10 tips for keeping small (and not-so-small) businesses and real estate investors out of court:

1. Use the Proper Legal Entity for Your Business and Make Sure it is Set-up Properly.

Not all business entities are created equal.  Furthermore, the structures within each type of business entity are also not created equal.  So regardless of whether your business would be best-served through use of a corporation, limited liability company (LLC), or some form of partnership, be sure you obtain competent legal advice in selecting and setting-up the legal entity through which your business will operate.

2. Keep Proper Records

Everyone knows (or should know) that it is extremely important to keep records for business tax purposes.  It is also important to keep records in the ordinary course of business that are unrelated to taxes.  Although the type and nature of such records will depend on the type and nature of the business, suffice it to say that there are few (very few) businesses that cannot manage or reduce its exposure litigation risk by keeping proper records.

3. Implement and Maintain Appropriate Data Security Procedures

We live in a digital and data-driven world.  Digital evidence is an ever-present and ever-growing component of business-related litigation, both for plaintiff and defense.  Don’t lose the litigation battle over data by default.

4. Use Independent Contractors Appropriately

Savvy business owners have long understood that one way to increase profits is to decrease expenses, and that one very profitable way to decrease expenses is to use independent contractors instead of employees.  While there are many advantages to using independent contractors, there are many more disadvantages if it is not done correctly.  Make sure you use independent contractors properly.

5. Implement and Administer Appropriate Employee Policies and Procedures

If your business does require employees, make sure appropriate employee policies and procedures are in place to facilitate a good employer-employee experience for all involved.  Not only is it the right thing to do, it also makes good business sense to do so.

6. Adopt and Maintain Appropriate Customer/Client Controls

Just as a business should properly manage its independent contractors and employees, it should also properly maintain proper customer/client controls.  Proper customer/client controls include such matters as ensuring reasonable expectations, such as through the use of written contracts, policies and other business and industry-specific controls.

7. Adopt and Maintain Appropriate Vendor Controls

Vendors must also be managed.  Just as appropriate controls should be implemented to prevent or reduce the magnitude of legal disputes between workers and customers, so too should appropriate controls be used to reduce the likelihood and magnitude of disputes with vendors.  This, too, is a business/industry-specific analysis.

8. Use Business Experiences to Continually “Fine-Tune” Your Business Practices

Simply put: learn from your mistakes.  After your business experiences and works through a problem, make appropriate changes to your business controls so that the likelihood of that same problem being repeated is reduced, if not eliminated altogether.

9. Purchase and Maintain Appropriate Types and Amounts of Insurance

Insurance is cheap, compared to most risks.  Lawsuits can often be settled before trial for an amount equal to or less than the “policy limits” of the defendant’s insurance policy.  However, if the defendant is uninsured — or under insured — well, enough said about that.

10. Engage in Appropriate Asset Protection Planning Before a Lawsuit Is on the Horizon

Lastly, there are many legal strategies that can be implemented prior to the threat of a lawsuit that will either discourage the plaintiff from suing in the first place or, if the plaintiff does sue, provide the defendant with legal tools to terminate the lawsuit, before the lawsuit gets too out-of-control.  Many of these asset protection planning tools, however, are either unavailable after a claim arises, or will be of reduced effectiveness after a claim has arisen.

Lapin Law Group - the Entrepreneur’s Law Firm for Startup and Existing Businesses

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office located in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Dual Agency

In Texas, a Real Estate Broker who is handling a real estate sales transaction may represent (1) the Seller only, (2) the Buyer only, (3) both Seller and Buyer, or (4) neither Seller nor Buyer.

In the discussion that follows, the term “Broker” means a real estate brokerage or “sponsoring” Broker, while the term “Sales Agent” or simply “Agent” refers to licensees who work for a brokerage or sponsoring Broker, even though such Sales Agents may, themselves, be licensed as “brokers.”

Sales Agents are subject to the control and supervision of their Broker; the acts of a Sales Agent are considered to be the acts of their Broker.

Additionally, in the eyes of the law, both Brokers and their Sales Agents are considered to be “agents” of the party whom they represent.  For example, both the Seller’s Broker, and the Sales Agents who work for that Broker, are considered to be “agents” of the Seller.  As such, they each owe the Seller certain legal duties.

The “default” rule in Texas is that a Broker represents the Seller, unless there is an express agreement to the contrary between Broker and Buyer.  This makes sense in that it is the Seller who decides whether to list a property for sale, it is the Seller who will pay the sales commission for brokering the transaction, and it is the Seller’s Broker (and/or that Broker’s Sales Agent) who will pay to advertise the property for sale.

Thus, when a Buyer calls a Seller’s Broker in response to an advertisement for a property, the Seller’s Broker is representing the Seller, not the Buyer.  In this situation, the Buyer is unrepresented.

A Buyer, in order to have independent Broker representation, would need to enter into an agreement with a Buyer’s Broker, that is, with a Broker other than the Seller’s Broker.  When this occurs, the Seller’s Broker and the Buyer’s Broker typically share the 6% sales commission (paid by the Seller), with each Broker receiving 3%.  Each Broker’s 50% share of the 6% sales commission (3%) is then divided between Broker and Sales Agent.

Texas, like many other states, allows a Seller’s Broker, with certain restrictions, to “represent” both Seller and Buyer.  When a Seller’s Broker “represents” both Seller and Buyer, the Seller’s Broker is not required to give 50% of the commission (that is, 3% of the 6% sales commission) to a Buyer’s Broker.

In Texas, this dual “representation” (sometimes also referred to as “dual agency”) can take one of two similar forms.

The first of these two forms of dual “representation” involves the Broker acting as a mere “intermediary” (Texas Real Estate Commission’s term) between Seller and Buyer, without providing any real representation to either.  When this occurs, the Seller is not getting the Broker representation that is usually thought by sellers to be included in the 6% commission they are paying to sell their property, and the Buyer, as with the “default rule” described above, still gets no representation at all.

In the second of these two forms of Texas dual “representation” also involves the Broker acting as an "intermediary" between Buyer and Seller, with the Broker appointing one of that Broker’s Sales Agents to “represent” the Seller and another of that Broker’s Sales Agents to “represent” the Buyer.  This arrangement, like the first form of dual representation mentioned about, is rife with pitfalls.

The second form of dual “representation” asks us to naively believe that the two Sales Agents, both of whom work for the same Broker, and who perhaps have offices or desks in close proximity to each other, who may attend Realtor training sessions together, and who might even socialize with each other outside of work, will not put their best interests of closing the deal — and getting paid — above the respective interests of the Seller and Buyer whom they supposedly represent.  This is not an indictment of Sales Agents; rather, it is simply an acknowledgment of human nature.

More importantly, however, each of these Sales Agents is, in the eyes of the law, merely an extension of the Broker.  Thus, although this arrangement may provide the appearance of separate or independent representation, such an appearance is a mere illusion.  One Broker is still representing both sides of the transaction.

Because a real estate purchase-sale transaction, like any other contract negotiation, is, at its core, a transaction with (at least) two mutually-exclusive interests — the Seller trying to sell on terms most favorable to the Seller and the Buyer trying to buy on terms most favorable to the Buyer — it simply is not possible for one Broker to represent the best interests of both Seller and Buyer.

Compare Broker dual “representation” to the representation a Seller or Buyer receives from an attorney or law firm.

Although it is technically possible for an attorney to act as an “intermediary” between Seller and Buyer, and not forming an attorney-client relationship or providing legal advice to either, most competent attorneys would never accept employment on these terms.  The major exception, of course, are attorneys who are employed by title companies.  The difference here, of course, is that these attorneys do provide representation to a client: the title company.

But back to our hypothetical Seller and Buyer.  When was the last time you heard about a law firm representing both sides in a transaction, with one of the firm’s attorneys representing the seller and another of the firm’s attorneys representing the buyer?  Probably never, because such arrangements are prohibited.

One last thought as we conclude this article and bring this subject “in for a landing.”  When litigation results from a real estate transaction, as it sometimes inevitably does, the Brokers and Sales Agents who were involved in the transaction are almost always subpoenaed to provide testimony about what happened.  Such testimony is likely to focus on statements made during conversations by and between Brokers/Sales Agents, on the one hand, and the party they “represented” in the transaction, on the other hand.

Attorney-Client communications, however, are protected from compelled disclosure by the Attorney-Client Privilege.  It is extremely rare for an attorney’s client to be compelled to testify about what the client said to the attorney, or for an attorney to be compelled to testify about what the attorney told the client.

Conclusion

Prudent Sellers and Buyers should seriously consider using a Real Estate Broker for the purpose of finding each other, that is, for what we refer to as the matchmaking function of “bring buyer and seller together.”

Once the match has been made, so to speak, Seller and Buyer should each retain their own attorney to provide legal advice and handle the purchase contract and other legal documents.

Lapin Law Group is Your Real Estate and Investor-Friendly Texas Law Firm

The article was excerpted from:
Real Estate Broker or Attorney: Who Should Represent You in Your next Real Estate Transaction?

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Texas entrepreneurs have two (2) options when choosing a form of Limited Liability Company (LLC):

1. The first option is a “traditional” LLC;
   
   
2. The other option is a Series LLC
   
   

A traditional LLC is composed of a single business entity, for example, Acme, LLC.  It would be possible for Acme, LLC to obtain, and do business under, various assumed names (e.g., “doing business as” or simply “dba”).  Thus, for example, Acme, LLC might do business under one or more assumed names, such as: The Acme Widget Company, LLC; or in the case of an LLC that is used to hold title to real property, The 1234 Main Street, LLC; and the like.

With the traditional LLC structure, Acme, LLC and each “sub-business” — Acme Widget Company, LLC, The 1234 Main Street, LLC, and so forth, would be treated for purposes of civil liability as a single unit.  In other words, Acme, LLC would be liable for the debts and other legal obligations of both The Acme Widget Company, LLC and The 1234 Main Street, LLC.  Furthermore, The Acme Widget Company, LLC and The 1234 Main Street, LLC would both be liable for the debts and other legal obligations of each other, as well as for the debts and other obligations of Acme, LLC.

A Texas Series LLC, on the other hand, although at first glance appears to be structured in much the same way as a traditional LLC, creates a legal separation between the “parent” LLC, Acme, LLC in our example, and each of the “sub-businesses,” The Acme Widget Company and The 1234 Main Street, LLC, in our example.

Thus, with a Texas Series LLC, neither the “parent” LLC, nor any of the “sub-businesses” are liable for the debts or other legal obligations of each other.

As with all legal matters, there is no “one-size-fits all.”  Thus, although a Texas Series LLC is not the appropriate choice for all situations, Texas “serial” entrepreneurs might at least want to consider the option prior to organizing their next new business entity.

Lapin Law Group is Your Real Estate and Investor-Friendly Texas Law Firm

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

There are many immigration visa options available to non-U.S. citizens who want to visit, work, or immigrate to the United States.  This article provides an overview of some of the most utilized avenues to obtaining a U.S. Visa or becoming a Lawful Permanent U.S. Resident.

Immigrant Visas

Immigrant visas and permanent resident (Green) cards are available to non-U.S. citizens who want to relocate to the United States on a permanent basis.  In order to become a U.S. citizen, an immigrant must first obtain a non-immigrant visa and then become a Lawful Permanent U.S. Resident.  Immigrant visa options include:

1.  Family-based immigrant visas are available to the spouse or other close family member of a United States citizen or permanent resident.

Immediate-Relative visas are unlimited in number and, thus, may be obtained without a waiting-period.  A United States citizen may apply for a immigrant visa for the U.S. citizen’s spouse, unmarried children under 21 years of age, parents, and adopted orphans.

Family-preference visas are available for relatives of a United States citizen and for relatives of a Lawful Permanent U.S. Resident (a non-U.S. citizen who has been issued a “Green Card”).  Family-preference visas, unlike Immediate-Relative visas, are available only on a limited basis and, thus, are subject to waiting periods.

The preference classes are:

2.  Employment-based immigrant visas are available to skilled workers, persons with extraordinary ability, outstanding professors or researchers, multi-national managers and executives, investors, and others.

3.  Asylum is also available to persons who had fled from persecution in their home country or who are likely to suffer persecution if they return to their home country.

An immigrant must first obtain an immigrant visa, in order to be eligible for permanent residence (Green Card) in the United States.

Citizenship

Permanent residents may, but are not required to, become United States citizens. 

For more information on becoming a United States citizen, CLICK HERE

Non-Immigrant Visas

Non-immigrant visas are available to non-U.S. citizens who want to visit the United States on a temporary basis, either for work or for pleasure.

Non-immigrant visa options include:

1.  Business or Tourist visa (B-series visa)

2.  Treaty Trader or Investor visa (E-series visa)

3.  Student visa (F-series visa)

4.  Temporary Worker visa (H-series visa)

5.  Exchange Visitor visa (J-series visa)

6.  Executive/Manager visa (L-series visa)

7.  Extraordinary Ability/Achievement visa (O-series)

8.  Religious Worker visa (R-series)

Potential Consequences of Unlawful Presence

The consequences of unlawful presence in the United States can be quite severe.

First, and perhaps most importantly to most non-U.S. citizens who are in the United States, is removal (deportation).  Being deported can tear families apart and result in a myriad of other life-changing hardships.

Second, depending on the length of time a person is unlawfully present in the United States, that person may be barred from reentering the United States if they are deported or otherwise leave the country.

Complexity of U.S. Immigration Law

United States immigration law is extremely complex, always changing, and often not entirely logical or consistent.  Although there is no legal requirement that visitors or immigrants to the United States use the services of an American immigration law attorney, doing so is highly recommended.

How to Obtain More Information

Lapin Law Group provides immigration law services nationwide.
For more information, please call (877) 570-2200 today, or  CLICK HERE

Learn how you can have a Lawyer Available Whenever to review your legal documents and answer your legal questions. Watch our popular video below.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The Miriam-Webster Dictionary defines “irreverent” as “having or showing a lack of respect for someone or something that is usually treated with respect [or] treating someone or something in a way that is not serious or respectful.”

We concede that the title of this article leans toward the irreverent.  However, the irreverence reflected in the title of this article merely reflects the apparent irreverence with which many divorce litigants handle the issue of Dividing the House When Divorcing the Spouse.

On a fairly regular basis, we are contacted by potential clients who relate the following scenario: Harry Husband and Wilma Wife divorced several years ago.  At the conclusion of the divorce proceedings, Wilma, who had been a stay-at-home mom, received title to the family residence.  Harry, as part of the divorce decree, received the right to receive a sum of money that reflected his marital property interest in the family residence.

The divorce decree also contains a provision that purports to require Wilma to refinance the debt which is secured by the family residence — “within a reasonable period of time” — or some such similarly vague language, so that Harry will no longer be contractually obligated to pay the loan.

When Harry or Wilma calls our law office some years after the divorce (our office didn’t represent either party in the underlying divorce proceeding), either Harry complains that Wilma never refinanced the residence as is “required” by the divorce decree, or Wilma complains that Harry is “harassing” her to refinance the house even though she lacks the financial ability to do so.

As with most problems, it is easier and less expensive to do something correctly the first time, rather than to try and remedy a problem at some future point in time.  Harry and Wilma, by the time their problem is resolved, will likely be acutely aware of this truism.

While it is understandable why Harry and Wilma (and their attorneys, if they were represented by counsel) took the “easy way out” at the time of their divorce — the easy way being “just get the divorce over with and we’ll worry about the refinance later — the reality is that taking “the easy way out” only makes the problem more difficult (and expensive) to resolve at some future point in time.

Regardless of whether you’re about to get married, already married, or facing divorce, don’t be a “Harry” or a “Wilma.”  Obtain the assistance of an attorney who is familiar with asset protection, real property, and marital property law, and implement appropriate legal strategies that, in the event of legal troubles “down the road,” will help negate, or at least minimize, the negative impact and expense of those legal troubles.

As the old saying goes, “Those who fail to plan, plan to fail.”

Lapin Law Group offers Affordable, Experienced, and Aggressive Divorce & Family Law Legal Services for Clients, and Cases, Throughout the State of Texas

For more information on Divorce and Family Law services that are available through Lapin Law Group, watch our popular videos below.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction, or since this publication may have changed statutorily or have been affected by judicial decision.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The Texas court system can be confusing.  Texas has 254 counties, which is more than any other U.S. state, and every Texas county has its own set of courts.  At a minimum, each county has a District Court, a County Court at Law, and Justice of the Peace courts.  Each court, in turn, typically has multiple judges, who are assigned to various different courtrooms.  For example, each District Court is likely to have multiple courtrooms, likewise with each County Court at Law and each county’s Justice of the Peace Courts.

Texas, like other states, has various intermediate courts of appeal, which typically hear appeals from the lower (trial) courts.

Finally, Texas has a State Supreme Court.  However, unlike the overwhelming majority of other states, the Texas Supreme Court does not hear appeals from criminal cases; Texas has a separate “Supreme” court for criminal cases.

Want to Know How Much Time You Have to Respond to a Texas Lawsuit?
One of the most pressing questions a defendant has after being served with a Texas lawsuit is: “How much time do I have to respond, so that I don’t lost the case by default?”

CLICK HERE to learn more about time limits for responding to Texas lawsuits.

Still Need More Information?
Contact us today by calling (877) 570-2200, or simply CLICK HERE to send us an email.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

In legal jargon, a person who dies without a Will (or other appropriate estate planning device) is known as an “intestate,” or is said to have died “intestate.”

Under Texas law, the property of an unmarried person who dies intestate passes to certain descendants, in an order of priority which is set by statute.

The relevant statute refers to property passing “in parcenary to the person’s kindred . . . [, and states that, in certain circumstances] the moiety passing to the decedent’s paternal kindred passes to the descendants of the person’s paternal grandfather and grandmother, and so on without end, passing in like manner to the nearest lineal ancestors and their descendants. . . .”  Texas Estates Code § 201.001.

In similar fashion, the separate property and community property of a married person who dies intestate passes to certain descendants, in an order of priority set forth other statutes. 
See, Texas Estates Code §§ 201.002, 201.003.

Ultimately, if there are no statutory descendants, the property of an intestate goes to the State of Texas.

“(a)  If an individual dies intestate and without heirs, the real and personal property of that individual is subject to escheat.

(b) ‘Escheat’ means the vesting of title to property in the state. . . .” 
Texas Property Code § 71.001.

“Okay, no problem,” one might say.  “I’ll simply buy and download an inexpensive form from the Internet, fill-in the blanks, and be done.  Problem solved; time to move on to something more important.”

But before heading off to that next, more important task, this person might want to consider the case of Ms. Aldrich.

Ms. Aldrich, a resident of Florida, created a Will by downloading a presumably inexpensive form from E-Z Legal Forms, an Internet legal forms provider.

Long story short, the E-Z Legal Form that Ms. Aldrich purchased did not contain all of the legal provisions that Ms. Aldrich needed.

After her death, the effect of the needed, but absent, provision of Ms. Aldrich's Will was litigated all the way to the Florida Supreme Court, which ultimately said:

An attorney undoubtedly would have charged Ms. Aldrich more for a Will than the amount she paid for the fill-in-the-blanks Will form that she purchased on the Internet from E-Z Legal Form.

Ms. Aldrich’s “savings,” however, came at a very high price: When an Executor of a Will is forced to litigate in a trial court (and in Ms. Aldrich’s case, multiple appellate courts, as well) the validity or effect of a Will, the attorney fees that are incurred in representing the Executor are paid out of the assets of the decedent’s estate.  Those payments of attorney fees, in turn, reduce the amount of the inheritances which ultimately are distributed to the decedent’s heirs.

The bottom line: Even though it may be tempting to purchase inexpensive legal forms on the Internet, doing so is not worth the gamble.  Don’t be a “Ms. Aldrich.”  Obtain the assistance of a trained, experienced, and competent attorney.

Lapin Law Group offers Affordable and Experienced Estate Planning, Probate, and Trust Administration, Legal Services to Clients Throughout the State of Texas

Learn how you can have a Lawyer Available Whenever to review your legal documents and answer your legal questions. Watch our popular video below.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Even if a default judgment has been entered against you in a Texas lawsuit, it may still be possible to “have your day in court” and prove your case.  But you must act quickly, as you only have thirty calendar days from the date of the judgment to take corrective action.

A default judgment can be entered against a defendant in a lawsuit after the defendant: (a) fails to timely file with the court papers that are legally sufficient to constitute an answer to the lawsuit or (b) fails to appear in court for trial or an important hearing.

In order to persuade the judge to give you a second chance to prove your case, you must demonstrate that: (a) your default was not intentional or the result of conscious indifference to the lawsuit, (b) you have a meritorious defense which, if proved at trial, would alter the outcome of the case, and (c) giving you a second chance to prove your case would not unduly prejudice the plaintiff.

The type of evidence needed to prove that your default was not intentional or the result of conscious indifference to the lawsuit will, of course, depend on the specific facts of your case.

If, however, you were self-represented (did not have an attorney) when the default judgment was entered, you will want to hire an attorney.  Your request for a second chance to prove your case will be much better received if the judge knows that you’ve hired a professional and are no longer trying to “go it alone.”

Likewise, if you were represented by an attorney when the default judgment was entered, you will want to discharge your current attorney and hire a new attorney.  After all, a request that you be given a second chance will have much more credibility coming from an attorney who is new to the case, as the judge who signed the default judgment may not be too pleased with the performance of your current attorney and may be skeptical of any representations your current attorney may make regarding the reason for the events that led to the default.

In any event, hiring an attorney, or hiring a new attorney, as the case may be, will suggest that you are taking the lawsuit seriously and, by implication, hopefully suggest that whatever led to the default judgment was not caused by your intentional conduct or conscious indifference to the lawsuit.

Assuming that you have a meritorious defense to the lawsuit, proving the existence of that meritorious defense should not be too difficult for your (new) attorney.  Remember, however, that in court, there is a huge difference between the existence of a “fact,” on the one hand, and, on the other hand, introducing admissible evidence of that fact.

You should expect that your opponent, the plaintiff, will attempt to challenge the admissibility of your meritorious defense evidence.  Thus it is important that your intended evidence is able to withstand all of the objections a determined plaintiff’s lawyer can find in the Evidence Code.

Lastly, you will be required to prove that giving you a second chance will not unduly prejudice the plaintiff.  Because giving you a second chance is — by definition — prejudicial to the plaintiff, your (new) attorney will need to use the facts of your case to convince the judge that any prejudice to the plaintiff is not “undue,” that is, excessive in the context of your case.

Lapin Law Group is Your Aggressive and Experienced Texas Law Firm.
We Accept Litigation Legal Matters Throughout the State of Texas.

Can we help you with your Texas default judgment or Texas lawsuit?
Call us today at (877) 570-2200, or simply CLICK HERE to send us an email.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Do you need legal advice, but don't want to pay high hourly fees for a formal consultation with a lawyer?  If so, listen to the following recording of a telephone call to Lapin Law Group.

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Being a good Texan who values and seeks to exercise the right to self-defense by carrying a handgun, you applied for a Texas License to Carry (LTC) a Handgun.

Unfortunately, something in your background has caused the Texas Department of Public Safety (DPS) to request that you to provide additional information or documents in support of your LTC application, or has denied your LTC application outright.

Make no mistake about it.  A request from the DPS for additional information or documents is often followed by a denial letter.

Regardless of whether the DPS has requested additional information or documents, or denied your LTC application outright, you would be well-advised to obtain the assistance of an attorney who is both knowledgeable and experienced in LTC law to assist you in attempting to persuade the DPS that you are statutorily eligible to be issued an LTC.

A request for additional information or documents, or an outright denial of your application for a LTC, will often necessitate obtaining court records from one or more courts, perhaps including courts located outside of Texas.  Once those records have been obtained, it will be necessary to review and analyze those records.

If it appears from a review of the relevant records that you are statutorily-eligible to be issued an LTC, a legal argument, supported by citations to one or more statutes and, perhaps, prior appellate court decisions, will need to be formulated and presented to either the DPS (in the case of a request for further information) or to a court (in the case of a denial of your application).

If DPS has requested more information or documents from you, or has denied your application for an LTC, you must not delay in taking action to protect your legal rights.  Failure to timely respond will result in a waiver of your rights.

QUESTION

I own a residential property with two other individuals; however, I am the sole borrower on the loan which is secured by the property.  We – the three co-owners – want to begin renting the property to tenants.  What should we do before renting the property to protect ourselves from legal liability?

ATTORNEY ANSWER

Before acquiring title to real property with any person other than one’s spouse, it is always advisable to have in place some type of “co-ownership agreement.”  (Spouses should consider using a marital property agreement, which is a special-purpose form of co-ownership agreement.  Such agreements may be used as “stand-alone” agreements, or in conjunction with other asset-protection strategies.)  The appropriate type, or form, of such agreement will depend on the objectives of the co-owners and the intended use of the property.

Often (but certainly not always), a Limited Liability Company (LLC) will provide co-owners of real property with an appropriate legal framework to effectively manage their asset, while also providing an acceptable level of asset-protection.  Depending on your specific circumstances, a Series LLC might be a good choice.

A properly-drafted LLC Operating Agreement should address issues such how much capital each Member must contribute to the LLC, as well as each Member’s obligations and details concerning each Member’s ownership interest.  For example, if a mortgage loan is to be obtained in the name of one or more, but not all, of the Members of the LLC, the issues relating to that loan should be addressed in the Operating Agreement.  The Operating Agreement should also contain provisions for day-to-day operations and, in the event of disagreement or dispute, provisions for resolving conflict.

When an LLC or other form of business entity is set-up after an asset is acquired by one (or more) of the owners, title to the asset typically must be transferred to the entity.  Issues raised in such circumstances may include selection of the jurisdiction where the entity will be formed or organized; the avoidance (if possible) of transfer and related taxes (depending on the state in which the real property which will be owned by the entity is located); and often in the case of real estate loans, avoidance of due-on-sale clauses.

For purposes of asset-protection, an LLC is often a very good choice of entity, as the only remedy that is usually available to judgment creditors of a Member is a Charging Order against that Member’s interest in the LLC.  A Charging Order will allow a judgment creditor to “intercept” or receive any distributions from the LLC to the Debtor-Member, but will not allow a judgment creditor to obtain an ownership interest in the LLC itself (or in the assets of the LLC) or to otherwise interfere with the operation of an LLC.

Lapin Law Group - the Entrepreneur’s Law Firm for Startup and Existing Businesses

Contact us today at (877) 570-2200 to schedule a consultation.
CLICK HERE to email us

Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Businesses, like everything else, change over time.  The successful business must, therefore, constantly evaluate its operations and, in order to remain competitive, make any changes that may be necessary.

One area that every business should constantly evaluate is whether it is not only complying with the law, but also whether it is using the law to its maximum advantage.  The following are five, non-exclusive, areas that every business should review with its attorney, at least on an annual basis.

1.  Compliance with New Laws and Court Decisions

The federal government and state legislatures are constantly passing new laws that affect businesses.  Additionally, federal and state courts are constantly interpreting laws, as they apply to specific businesses and circumstances.  Business lawyers work hard to keep abreast of these changes so that their business clients can focus on their businesses, and not on the law.

2.  Changes in the Structure of Your Business

Businesses sometimes start out as sole proprietorships or partnerships.  Often, however, once a business grows, it is best to transition to a business entity.  There are a number of entity options from which a business client can choose.  A business attorney can assist not only by helping a business client select an appropriate entity type, but also by drafting the legal documents needed to take maximum advantage of the benefits that are available with a particular type of business entity.

The avoidance of legal disputes and limiting legal liability are the primary considerations in business entity formation.  Tax planning is important; however, business entity selection and formation should not be based solely on tax considerations.

A word of caution:  Certified Public Accountants (CPAs), because they assist businesses with tax issues, are authorized by law to form business entities for their clients.  Most CPAs, however, are not attorneys and, thus most CPAs may not lawfully give legal advice.

A business attorney, unlike a CPA, is able to provide business clients with Attorney-Client Privileged legal advice on all aspects of business entity formation and operation, including tax planning.

3.  Legal Liability/Risk Management

There are certain legal risks that are inherent in every type of business.  For example, grocery stores historically have experienced greater legal risk from “slip-and-fall” lawsuits than most other businesses.  Likewise, delivery and courier services usually experience greater legal risk from motor vehicle accidents than most other businesses.

Regardless of the nature of your business, there likely is one or more areas of your business operations that expose your business to heightened levels of legal risk.  Regular, at least annual, review of these areas of your business operations is crucial to effective legal risk management.

4.  Business Contracts

Many businesses find, as they grow and gain more experience, that the contracts they use with their customers either don’t adequately address certain situations, or perhaps don’t address those situations at all.  A business attorney can draft or revise a business entity’s contracts so that those contracts provide the business client with legal protection that are designed to maximize the business client’s revenues and minimize its legal troubles.

5.  Employee/Independent Contractor Issues

Every business needs personnel in order to serve its customers.  Employee and independent contractor issues, in turn, can be as varied as workers themselves.  It follows, then, that every business should constantly be aware of employment law issues that may affect its continued and future operations.  Although more frequent attention to personnel issues is often required, an annual legal review of these issues, including personnel status, employee handbooks, and personnel policies, should be considered the absolute minimum.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Texas title companies often authorize one or more Texas lawyers or law firms to act as their agent, for the purpose of issuing policies of title insurance and closing real estate transactions.  These “fee attorneys,” as they are known, act as escrow agents and issue title polices when closing real estate transactions in their law office.

While it may be convenient, and even seemingly cost effective, to use a Texas fee attorney to close your Texas real estate transaction, doing so may, in the long-run, cost you much more than the amount you likely thought you were saving by not hiring your own attorney.

The key to understanding the role of a Texas fee attorney is to know who the Texas fee attorney actually represents.  The key to knowing who the Texas fee attorney represents, in turn, requires knowledge of the source of the Texas fee attorney’s compensation, which is not an insignificant amount in most transactions.

In Texas, title insurance premiums are set by law.  This is an extremely bad idea, but that’s a discussion for another time.

Fee attorneys are often paid a whopping 40% of the premium for a title insurance policy.  But since title insurance premiums are not negotiable, it is not possible for a buyer or seller to find a better deal by shopping around.

Texas fee attorneys typically make it quite clear (at least in the fine print) that their only client is the title insurance company who is paying them 40% of the title insurance premium.

Sometimes, however, a Texas fee attorney will, for a small fee, to be paid by a buyer or seller, provide “neutral” legal services to a buyer or seller, such as the preparation of legal documents related to the transaction (e.g., contracts, deeds, etc.).

It is well-known that an attorney may not represent multiple clients who have conflicting interests.  For example, in a lawsuit, an attorney may not simultaneously represent both the plaintiff and defendant.

This conflict-of-interest rule applies with equal force both inside and outside the courtroom.

Thus, an attorney may not simultaneously represent both the buyer and seller in a real estate transaction.

Just as legal “representation” is not confined to the courtroom, so too, it is not confined to the negotiation aspects of a real estate transaction.

Drafting the legal documents for a real estate transaction can often be just as consequential, if not more so, than the verbal negotiations that led to a written contract.  For example, just look at a written lease agreement that is used by a property management company that leases large numbers of apartments to residential clients.  This type of lease is likely to be many pages in length, in small print, and with terms that clearly favor the landlord over the tenant.

Because a Texas fee attorney works for the title company that is paying the attorney a significant portion of the title insurance premium as a legal fee, the Texas fee attorney is not capable of providing either the buyer or seller with adequate or effective legal representation.

Lapin Law Group represents both buyers and seller of real estate, but not at the same time, in the same transaction.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

Texas has affixed the label of “community property” to its statutory scheme which addresses marital property.

Regarding community property, Texas law states:

Texas defines separate property as:

Texas divorce courts have been given extremely broad discretion when dividing community property during a divorce.  All that is required is that the court do what is “just and right.”

Of course, what is “just and right” in one Texas divorce court may not necessarily be “just and right” in a divorce court in another Texas county, or even in a Texas divorce court that is located next door or across the hall.

With such a subjective and arbitrary standard, how could it be otherwise?

Appeals are extremely expensive.  Furthermore, an appellate court will presume that the divorce court’s order dividing property is just and right.

In other words, in most cases, it probably will not be worth the time and expense to appeal an “unjust or wrong” divorce court property division order.

But there is good news: Texas couples — who plan ahead — can prevent Texas divorce courts from ever dividing their marital property and — at the same time — each spouse can protect their property from the claims any future creditors might acquire against their spouse’s property.

Asset protection planning of this sort is not a “one-size-fits-all” type of proposition, nor is it obtainable by downloading a “fill-in-the-blanks” legal form from the Internet.

Rather, legitimate asset protection planning involves an individualized evaluation of a couple’s situation, followed by the creation and implementation of an appropriate — customized — asset protection plan that is best-suited to the couple’s specific situation.

“Sounds expensive,” you might say.  Perhaps.  Until you consider the cost of litigating a case from filing, through pre-trial discovery, through settlement negotiations, and then through trial.

Oh, and don’t forget all those attorney fees you’ll need to pay your lawyer, regardless of whether you win or lose.

And even if you win in the trial court, the other side can still appeal.

Considering the high cost of litigation — both in dollars and in emotional well-being — a little asset protection planning probably isn’t so expensive after all.

Lapin Law Group offers Affordable, Experienced, and Aggressive Divorce & Family Law Legal Services for Clients, and Cases, Throughout the State of Texas

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The overwhelming majority of us want to live and work in a safe and orderly society where people are free to go about their legitimate business without being victimized by criminals.  Thus, we see that “law and order” (not just the television show, but also the enforcement of laws and punishment of crime) is a good thing.

We also want a government that administers the laws, not just in a fair and impartial manner, but also in a manner that strikes an appropriate balance between what is in the best interest of society and what is in the best interest of the criminal defendant.  That is why we call it the criminal “justice” system, not the criminal “vengeance” system.

It is not uncommon, nor has it been uncommon throughout the generations, for a young person to run afoul of the law on a single occasion, only to turn his life around and become an “upstanding” and productive member of society.  This is the type of person for whom “deferred adjudication” was intended.

The concept of deferred adjudication, as it is practiced throughout the United States, generally works as follows:

The agreement between the prosecution and the defense goes something like this:

Because the ultimate outcome of the case — dismissal or conviction — will not be decided until the defendant has had an opportunity to successfully complete a period of probation (and pay any related fine), adjudication of the case is deferred until it can be determined whether, in fact, the defendant did successfully completed probation.  Hence the name “deferred adjudication.”

In Texas, however, it works a little, or perhaps a lot, differently.

Historically, most Texas cases where defendants have agreed to deferred adjudication have resulted in a conviction — not a dismissal of the criminal charges — after successful completion of probation (known in Texas as “community supervision”).

The only thing a Texas defendant typically receives after successfully completing probation is a “release” from probation and a criminal conviction.  Not a very good deal, at all.

Not surprisingly, many Texas defendants who agreed to deferred adjudication reasonably, even if erroneously, thought that the criminal charges against them would be dismissed if they successfully completed the period of community supervision (probation).

If you are a Texas defendant who agreed to deferred adjudication and you are still in the deferral period, that is, you are still on community supervision (probation), it may still be possible to have your case dismissed.  But it probably won’t happen automatically.

If you were a Texas defendant who has already been “discharged” from community supervision, a thorough examination of your court file will be needed to determine whether your case resulted in a conviction and, if so, what options might still be available to you.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and shall not constitute legal advice or serve as the basis for the creation of an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

Lapin Law Group, with its principal office in the Dallas-Fort Worth Metroplex, serves all 254 Texas counties.

The State of Texas submitted to the United States Supreme Court a petition for leave (permission) to file a Bill of Complaint (lawsuit) against the Commonwealth of Pennsylvania, and the states of Georgia, Michigan, and Wisconsin.  The purpose of the intended lawsuit was to challenge the constitutionality of presidential election procedures in those jurisdictions.

In its lawsuit, Texas alleged outcome-determinative election irregularities in the defendant states and that those irregularities worked an unconstitutional dilution of the votes of Texans.

The Supreme Court, in a two-paragraph ruling, declined to grant Texas leave to file its lawsuit, stating that Texas did not have standing to sue because it had “not demonstrated a judicially cognizable interest in the manner in which another State conducts its elections.”  Justices Alito and Thomas dissented.

When talking about the Supreme Court, it is not uncommon to hear that the Court declined to grant “cert” — certiorari — to a case, that is, that the Court declined to accept a case.  This is not surprising as, typically, review in the Supreme Court is sought only after a case has been extensively litigated in the lower federal courts and/or state courts.  Cases which attempt to invoke the Court's “appellate jurisdiction” comprise the vast majority of the Supreme Court’s work.

The Supreme Court’s jurisdiction, however, is not limited to appellate cases.  It also has original jurisdiction in several other categories of cases, one of which is in cases between two or more states.  See, U.S. Const., Art. III, § 2, cl. 2.

When a court exercises original jurisdiction, it fulfills the function of a trial court, not an appellate court.  Thus, by definition, when a plaintiff seeks to invoke the original jurisdiction of a court, the plaintiff has not litigated its case in any other court.

Such was the situation in Texas v. Pennsylvania, et. al.  Texas sought to invoke the Supreme Court’s original jurisdiction — as a trial court, not as an appellate court — to hear its case against Pennsylvania, Georgia, Michigan, and Wisconsin.

Furthermore, because the case was between “two or more states,” no court other than the Supreme Court had original jurisdiction to hear the case.  In other words, the Supreme Court was the only court which had jurisdiction to hear the case.

If the Supreme Court had concerns about whether Texas had standing to sue, it could have done what trial courts across the country do on a routine basis: accept the filing of written briefs, hear arguments from the parties on standing and jurisdiction, and then issue a ruling.

By refusing to accept the case, the Supreme Court effectively denied Texas of the right to litigate its case in any court, thus depriving Texas of due process of law.  Justices Alito and Thomas appear to have acknowledged this fact in their dissent, which states in relevant part: “we do not have discretion to deny the filing of a bill of complaint in a case which falls within our original jurisdiction.”

When a person seeks to purchase a firearm from a federally-licensed firearms dealer (FFL), the FFL is required by federal law to obtain government approval for the transaction prior to transferring possession of the firearm to the buyer.

The federally-mandated government approval process begins with the buyer completing a “Firearms Transaction Record,” also known as an “ATF Form 4473,” or simply a “4473.”  After the buyer completes the 4473, the FFL verifies the buyer’s eligibility to receive the purchased firearm.

In Texas, this verification may be accomplished in one of two ways:  If the buyer possesses a valid License to Carry (LTC) a Handgun, the FFL need do nothing more than photocopy the buyer’s LTC.  If the buyer does not possess a valid LTC, the FFL initiates a telephone inquiry with law enforcement.  Law enforcement officials then attempt to verify the buyer’s eligibility to receive the purchased firearm through database which is setup specifically for this purpose.

The vast majority of 4473s are approved immediately and the FFL is then authorized to transfer possession of the purchased firearm to the buyer.

Of those 4473s which are not approved immediately, some are denied immediately and others are neither immediately approved or immediately denied.  Federal law provides that when a 4473 is delayed, that is, not immediately approved or immediately denied, a FFL may, but is not required to, transfer the purchased firearm to the buyer if the FFL does not receive a denial notification within 72 hours.

There are many possible reasons why a 4473 might erroneously be denied or not immediately approved.  One common reason is that incorrect information was reported to law enforcement and has thus become included in the purchaser’s criminal history record.

The solution to this type of problem is to ascertain what specific entry (or entries) in a person’s criminal history record are causing the 4473 delay or denial; determine whether that entry (or entries) is erroneous; and if an entry (or entries) is erroneous, take the appropriate steps to have the erroneous entry (or entries) corrected.

Asset protection clients are often sold elaborate – and expensive – trusts and other legal planning devices, often by slick lawyers or seminar presenters who promise, or who at least strongly imply, that their particular planning device (which no one else has managed to replicate) will provide all the asset protection the client could ever need.

Sometimes elaborate and expensive asset protection plans are warranted; more often, however, they are not.  But even when they are warranted, a lack of attention to basics can defeat the most sophisticated of asset protection plans.

Those who start or run their own businesses are usually at least somewhat familiar with the asset protection (e.g., pre-litigation risk management) strategy of using some type of statutory business entity (e.g., corporation, limited liability company, etc.) to protect their personal assets from their business creditors.  As we – and the Texas courts – all know, the ability to avoid personal liability “is an essential reason that entrepreneurs” shoulder the risks of starting and running their businesses.  Willis v. Donnelly, 199 S.W.2d 262, 271 (Tex. 2006).

Most asset protection clients have also heard of the tactic of “piercing the corporate veil,” which is used by plaintiff lawyers who would like to be able to satisfy a judgment against a business by going after the personal assets of the business owner(s).  Commonly recommended precautions to prevent a “corporate veil piercing” include such common-sense practices of keeping good corporate records, maintaining separate personal and corporate bank accounts, and not co-mingling business and personal funds and expenses.

However, many Texas business owners may not realize that the asset protection qualities provided by their business entity (e.g., corporation, LLC, etc.), can be forfeited – automatically and without any effort whatsoever by a plaintiff’s lawyer – simply by the business owner’s failure to timely file an Annual Franchise Tax Report and pay any tax that may be due.  See, Tex. Tax Code § 171.251.

When “the corporate privileges of a corporation are forfeited,” officers and directors are liable for the corporation’s debt.  Tex. Tax Code § 171.255.  When “corporate privileges of a corporation are forfeited . . . each director or officer of the corporation is liable for each debt of the corporation that is created or incurred in this state after the date on which the report, tax, or penalty is due and before the corporate privileges are revived.”  Id.  The period of liability thus begins “when the report, tax or penalty is due,” and not when the corporate charter is eventually forfeited.

Furthermore, “liability . . . is not affected by the revival of the charter or . . . corporate privileges.”  Id.  Thus, revival of the corporate charter will not protect the business owner from personal liability for a corporate debt that arose during the period between the tax or report being due and the revival of the corporate charter.

Although section 171 refers to “corporations,” these forfeiture provisions apply to all “taxable entities” in Texas.

This article analyzes the hypothetical situation of whether a person who is properly licensed to carry a handgun in public (Armed Defender) would violate Texas state law by discharging that firearm, in the context of an otherwise lawful self-defense (including defense of others) shooting, while upon, or across, a roadway, or from, or at, a motor vehicle.
 
“A person commits an offense [of disorderly conduct] if he intentionally or knowingly discharges a firearm on or across a public road.”[i]  Discharging “a firearm on or across a public road” is a Class C misdemeanor[ii]; however, discharging “a firearm in a public place other than a public road” is a Class B misdemeanor.[iii]
 
Regarding the discharge of a firearm from, or at a motor vehicle:
 
A person commits an offense [of Aggravated Assault] if the person commits assault as defined in Sec. 22.01 and the person: (1) causes serious bodily injury to another, including the person’s spouse; or (2) uses or exhibits a deadly weapon during the commission of the assault.[iv]
 
An offense under this section is a felony of the second degree, except that the offense is a felony of the first degree if: the actor is in a motor vehicle, as defined by Section 501.002, Transportation Code, and: knowingly discharges a firearm at or in the direction of a habitation, building, or vehicle; is reckless as to whether the habitation, building, or vehicle is occupied; and in discharging the firearm, causes serious bodily injury to any person.[v]
 
Felonies in the second degree are punishable “by imprisonment in the Texas Department of Criminal Justice for any term of not more than 20 years or less than 2 years” and by a fine not to exceed $10,000.[vi]
 
Felonies in the first degree are punishable “by imprisonment in the Texas Department of Criminal Justice for life or for any term of not more than 99 years or less than 5 years” and a fine not to exceed $10,000.[vii]
 
In our hypothetical situation it appears our Armed Defender would appear to have some exposure with regard to the Texas law that proscribes discharging “a firearm on or across a public road,” a misdemeanor.[viii]
 
Additionally, if our Armed Defender was even mildly successful in terminating the felonious aggression that was being committed by the assailant, it is likely that our Armed Defender would also have some exposure under the statute which criminalizes Aggravated Assault,[ix] a second-degree felony.[x]
 
If our Armed Defender discharged his firearm from a motor vehicle and was successful in neutralizing the threat by inflicting “serious bodily injury” on the assailant, our Armed Defender would seem to have a very good argument that our Armed Defender did not commit a felony in the first degree, as our Armed Defender’s actions were not “reckless.”  Indeed, our Armed Defender intended to – and did -- stop the deadly threat posed by the assailant, which by definition, is not reckless conduct.
 
However, if our Armed Defender, while shooting from a motor vehicle, inadvertently injured or killed a hostage or other innocent person, our Armed Defender’s conduct might be deemed “reckless” and thereby expose our Armed Defender criminal liability for a first-degree felony.
 
That’s the bad news.  The good news is that although our Armed Defender may be exposed to criminal liability, our Armed Defender may also be able to take advantage of one or more affirmative defenses.
 
An “affirmative defense” is defined as “[i]n pleading, matter asserted by defendant which, assuming the complaint to be true, constitutes a defense to it.”[xi]
 
This author, some years ago, attempted to elucidate for a misinformed instructor who taught the statutorily-required course for applicants who were seeking a Texas concealed handgun license, that an “affirmative defense” is not a statement by a criminal defendant that the defendant did not engage in conduct that might constitute a crime; rather, an affirmative defense is an admission that the defendant did, in fact, engage in such conduct, but that the defendant was legally justified in doing so.
 
This explanation of an affirmative defense might sound like a lot of legal “mumbo jumbo,” but it is, nevertheless, quite important.
 
The typical criminal defendant goes to court and pleads “not guilty,” and, thereby, compels the government to attempt to prove, beyond a reasonable doubt, that the defendant committed each and every element of the charged offense.  The defendant need not say anything in his defense and, indeed, the government may not compel him to say anything.
 
A defendant who asserts an affirmative defense, on the other hand, admits that he committed the acts that constitute the charged offense, but then asserts that he was legally justified in committing those acts.
 
Thus, once a defendant asserts an affirmative defense, the focus of the criminal case is no longer on whether the defendant committed the acts that constitute the offense.  The focus is now on whether, given that the defendant did commit the acts in question, whether the defendant’s conduct was legally justified.
 
Texas, in the context of the hypothetical situation faced by our Armed Defender, recognizes and has codified, among others, the affirmative defenses of necessity and self-defense.
 
Consistent with our foregoing definition of an affirmative defense, Texas law provides that “It is a defense to prosecution that the conduct in question is justified. . . .”[xii]
 
“Justification,” for the purposes of our Armed Defender, could be established by a showing that the acts in question constitute self-defense or were otherwise necessary.
 
Regarding the affirmative defense of self-defense, Texas law states that:
 
. . . a person is justified in using force against another when and to the degree the actor reasonably believes the force is immediately necessary to protect the actor against the other’s use or attempted use of unlawful force.  The actor’s belief that the force was immediately necessary as described by this subsection is presumed to be reasonable if the actor [acted reasonably, within certain statutory parameters that are consistent with well-settled principles of self-defense law]. . . .[xiii]
 
A person is justified in using deadly force against another if the actor would be justified in using force against the other under Section 9.31; and when and to the degree the actor reasonably believes the deadly force is immediately necessary to protect the actor against the other’s use or attempted use of unlawful deadly force; or to prevent the other’s imminent commission of aggravated kidnapping, murder, sexual assault, aggravated sexual assault, robbery, or aggravated robbery.[xiv]
 
In setting forth the affirmative defense of necessity, Texas law states that:
 
Conduct is justified if the actor reasonably believes the conduct is immediately necessary to avoid imminent harm; the desirability and urgency of avoiding the harm clearly outweigh, according to ordinary standards of reasonableness, the harm sought to be prevented by the law proscribing the conduct;  and a legislative purpose to exclude the justification claimed for the conduct does not otherwise plainly appear.[xv]
 
The law of self-defense can be complicated.  The foregoing summary merely “scratches the surface” of the subject and is not intended as legal advice.
 
This article also appeared in a February 2020 newsletter published by the Armed Citizens Legal Defense Network.  https://armedcitizensnetwork.org


[i] Texas Penal Code § 42.01(a)(9).
[ii] An individual adjudged guilty of a Class C misdemeanor shall be punished by a fine not to exceed $500.  Texas Penal Code § 12.23.
[iii] An individual adjudged guilty of a Class B misdemeanor shall be punished by: (1) a fine not to exceed $2,000; (2) confinement in jail for a term not to exceed 180 days; or (3) both such fine and confinement.  Texas Penal Code § 12.22.
[iv] Texas Penal Code § 22.02(a)(1-2).
[v] Texas Penal Code § 22.02(b)(3).
[vi] Texas Penal Code § 12.33(a-b).
[vii] Texas Penal Code § 12.32(a-b).
[viii] Texas Penal Code § 42.01(a)(9).
[ix] Texas Penal Code § 22.02(a).
[x] Texas Penal Code § 22.02(b).
[xi] Black’s Law Dictionary, 6th edition, p. 60 (1992).
[xii] Texas Penal Code § 9.02.
[xiii] Texas Penal Code § 9.31.
[xiv] Texas Penal Code § 9.32(a)(1-2).
[xv] Texas Penal Code § 9.22.