By Christopher D. Vanderbeek
Missouri businesses have kicked off 2012 with a legislative measure that is intended to effect comprehensive reform with regard to Missouri workers’ compensation law. The business-backed measure is the coordinated response of Missouri businesses to many recent issues that have surfaced on the state’s legal landscape.
One major issue, the depletion of Missouri’s Second Injury Fund (SIF), arose gradually.
Other issues arose much more suddenly. Specifically, two recent Missouri cases flipped Missouri’s workers’ compensation system on its side by respectively providing:
(a) that an employee can sue a co-employee in civil court for the co-employee’s negligence in causing a workplace injury, and
(b) that an employee can sue his or her employer in civil court for a work-related occupational disease (e.g. carpal tunnel syndrome).
Prior to these court cases, it was believed – and, Missouri businesses argue, the Missouri legislature intended – that the sole venue for a claim based on a work-related injury was the workers’ compensation system.
Missouri businesses have responded by throwing their weight behind SB 572. The bill proposes a plethora of amendments to Chapter 287 of the Missouri’s statutory code, which is informally known as the Missouri Workers’ Compensation Act. Included are several amendments to Section 287.120, otherwise known as the “Exclusivity Clause.” This section was recently cited in the case of State ex rel. KCP & L Greater Missouri Operations Co. v. Cook in support of the argument that employees have the right to sue their employers in civil court for work-related occupational diseases.
Some highlights of the proposed bill:
- Prohibition of occupational disease claims outside the workers’ compensation forum
- Prohibition of negligence-based injury claims against co-employees
- Elimination of a $40-per-week benefit paid to injured workers out of the SIF
- Elimination of benefits paid by the SIF to uninsured employers
- Prohibition of all claims for permanent partial disability (PPD) against the SIF
- Prohibition of all claims by employees not legally entitled to work in the US
- Elimination of benefits for employees who become incarcerated
SB 572 was introduced by Senator Tom Dempsey of the 23rd District of Missouri (St. Charles County). The bill is currently being considered by the Small Business, Insurance, and Industry Committee and was initially presented to the committee on January 10, 2012.
Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.
01/16/12 4:33 PM
Workers' Compensation | Comment (0) |
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New Proposed Bill Would Impact Workers’ Compensation Reform in Missouri
By Jeffrey R. Schmitt
On Wednesday, January 11, 2012, the United States Supreme Court granted victory to religious organizations across the nation by confirming that their First Amendment freedoms insulate churches and schools from certain employment discrimination claims. Some will consider this a landmark decision, and it may be the Court’s most significant church-state ruling in decades. The decision in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC confirmed churches’ and schools’ autonomy to make decisions about whom to hire and fire, when those employees have job duties related to the ministry of the organization.
The Court ruled against an elementary school teacher in her employment discrimination claim against Hosanna-Tabor Evangelical Lutheran Church and School, of Redford, Michigan, holding that the First Amendment protects the school from the reach of anti-discrimination laws, when the claims involve certain employees. The ruling was in line with many lower federal court rulings, but the issue had not previously been presented to the United States Supreme Court.
In the decision, written by Chief Justice John Roberts, the Court confirmed the “ministerial exception” to certain anti-discrimination laws, concluding that the courts could not force the school to reinstate the teacher, Cheryl Perich. Perich claimed she was fired because she pursued a claim under the Americans with Disabilities Act, alleging she suffered from narcolepsy.
While the Supreme Court confirmed the ministerial exception for religious organizations, such as churches and schools, it did not provide a strict test for determining exactly who was considered a “minister” for purposes of the exception. However, the Court’s ruling is clear that the exception applies to a class of employees broader than merely clergy. Perich was an educator, and was responsible for teaching secular courses, in addition to religion class, and she attended chapel with students. However, she had formal religious training and had recently been designated as a “called” teacher of the school, as opposed to a lay or contract employee. Chief Justice Roberts’ opinion is clear that her duties with respect to religious instruction at the school were sufficient for her to fall under the umbrella of the ministerial exception. The Court was further not persuaded that the small amount of time spent by the teacher teaching religion class during her work day was a significant factor, stating “the issue before us, however, is not one that can be resolved with a stopwatch.”
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01/12/12 12:10 PM
Employment Law, Litigation | Comment (0) |
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Supreme Court Ruling Protects Religious Organizations from Employment Discrimination Claims
By Jeffrey R. Schmitt
A recent article by the St. Louis Post-Dispatch reports that the Moody’s Credit Agency has downgraded the State of Illinois’ credit rating to A2. The Post-Dispatch reports that this is the lowest mark Moody has given to any state, and, in part, the state’s severe pension underfunding has contributed to this credit problem.
The impetus of the story is new legislation passed by the Illinois legislature which outlaws “double dipping” by union officials. According to the article, union officials allegedly misused the pension system to secure large public pensions based upon short teaching stints and even substitute teaching for as little as a single day. Certainly this kind of abuse, if true, is, or should have been, discouraged by all the players involved, including both the state and the public pension plan trustees.
As highlighted by the rest of the article, Illinois continues to face a significant fiscal and budgetary problem, due to many factors, including public pension liabilities. The author notes that the crisis currently amounts to an $83 billion funding shortfall, resulting in the worst unfunded pension liability in the nation, with only 43% of the long-term pension obligations currently funded. Part of the fault certainly lies with the State of Illinois for its failure to fund in earlier, more prosperous times. If uncorrected, this funding shortfall will continue to cause headaches for Illinois lawmakers and public pension plans alike. Ultimately, if not corrected, the continuing trend could possibly cause personal financial losses to deserving retirees across the state.
While unions and public pension plan officials urge the state to fully fund the pension liabilities, lawmakers continue to evaluate plans for both the temporary and permanent fix to the state’s pension woes. Employees and retirees will be keeping a close eye on these legislative developments, and some options may threaten continued benefits for future and/or existing employees.
As the author of the article correctly points out, any attempt by the Illinois legislature to modify the retirement benefits of existing employees entitled to those pensions will almost certainly raise serious legal and constitutional questions that the Illinois, or perhaps even Federal courts, will ultimately decide.
Posted by Attorney Jeffrey R. Schmitt. Schmitt practices in commercial litigation including banking, real estate, construction, and other matters for individuals and businesses.
01/11/12 4:05 PM
Litigation | Comment (0) |
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Pension Underfunding Contributes To Illinois Credit Downgrade
By David A. Zobel
Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives.
The state where you reside shapes and defines what marriage is and what it means for you and your fiancée through its laws and licensing requirements. Because these laws and requirements govern very intimate aspects of our lives, they can be emotionally and financially significant. This discussion sets forth several legal considerations to keep in mind as you travel towards the big day.
Living Together Before Marriage
On December 14, 2011, the Pew Research Center released a report concluding that the number of young adults waiting to get married is on the rise. The study also concluded that cohabitation has risen to its highest level in decades. Cohabitation has its benefits; however, it can also have drawbacks.
In the state of Missouri, simply living together does not affect any property either of you own. Upon break up, you are each entitled to your own property. The situation becomes more complicated when you begin purchasing real estate or personal property together or if you pay off each other’s financial obligations. Depending upon the circumstances, a court may require one party to compensate the other. Paying for your share of the fifty dollar rug you purchased together is one thing, but what about your share of that car? Or the house?
Plan on moving to another state? In some states, merely living together can have great implications. Depending on where you live, who you live with, and how you present yourself, you might find it interesting that in the eyes of the state, you might already be characterized as married. Known as a “common-law marriage” and contracted in a handful of states, this type of marriage carries with it the same rights, responsibilities and obligations of a traditional marriage, including those in divorce.
Who Gets the Ring?
You’re a huge Cardinals fan. You find out she has been hiding from you that she is a dyed-in-the-wool Cubs fan and don’t think you can ever forgive her. The engagement is off. Now what? What about that ring you saved for months to buy her?
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01/10/12 10:14 AM
Family Law | Comment (0) |
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Considerations Before Popping the Question: What the Law Has to Say and What You Should Know
By Michael J. McKitrick
Your lease may be the most important asset of your business. Commercial leases are complex transactions and should not be taken lightly.
Following these basic points will make the lease renewal or new lease go smoothly.
- Know your dates. I have seen many cases where tenants allow their lease renewal deadline to pass or, even worse, have their lease automatically renewed by failing to follow these important deadlines. You should check your lease to see exactly what options you have to renew and the deadline specified in the lease to notify the landlord of your intention to renew. These deadlines are usually strictly enforced by the courts.
- Start early. You should start your decision process well before the deadline in the lease. The earlier you start, the more time you have to test the market, review potential alternative sites, and make your decision. Many renewal provisions have a market rent adjustment, so you will need to find out what your landlord proposes as “market rent” well in advance of the deadline to give you time to negotiate or to consider alternatives.
- Consult the experts. You should consult a commercial real estate broker familiar with your type of property to assist you in determining the options available in the market including rent and other terms landlords are providing. They know the market, the players and concessions generally available. Brokers generally work on a commission basis and your landlord will most probably be consulting with his broker so you need to even the playing field. At the same time, you should consult with a real estate attorney so that your attorney will be on board when the lease proposal is made and when you are presented with a lease or renewal document.
- Carefully review the lease documents. Depending on the type of property, whether construction is contemplated and many other factors, leases are lengthy and complex. Much legalese is involved and terms have meaning and importance that are not apparent to someone not experienced in reviewing and negotiating leases. The lease or renewal document should be carefully reviewed by your attorney and revised to include provisions necessary to protect your interests. Most landlords have lease formats that are not favorable to tenants but landlords are willing to negotiate lease terms especially now when it is still a tenant-oriented market.
If you follow these steps you should be able to navigate the lease renewal minefield. If not, you risk a blow up!
Posted by Attorney Michael J. McKitrick. With over 30 years of hands-on commercial litigation and transactional law experience, McKitrick’s practice encompasses business and transactional advice, commercial real estate matters, and regulatory and practice management guidance for health care professionals. Most of his clients are in the medical, financial services, and manufacturing sectors.
01/9/12 4:02 PM
Business Law, Real Estate | Comment (0) |
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Four Points to Follow When Your Lease Term is Ending
By Misty A. Watson
On January 1, 2012, the Illinois Uniform Real Property Transfer on Death Act (Act) goes into effect. The Act permits owners of real property in Illinois to execute a deed which will allow for the property to be transferred to a designated beneficiary upon the owner’s death. If the property is owned jointly, the deed will transfer ownership upon the death of the second owner to the designated beneficiary.
The Transfer on Death Deed varies from its counterpart in other states in that it requires the deed to be executed with the formality of a Last Will and Testament. The deed must be witnessed by two witnesses, notarized, and the witnesses must attest that the person signing the deed is of sound mind. The deed requires certain language such as that it is not effective until the death of the owner and must be properly recorded before the death of the owner.
Prior to the enactment of the Act, owners of real property were forced to have a trust in order to avoid probate of real property, even if the owner’s situation did not warrant having a trust. Also, the Transfer on Death Deed allows for property to be maintained in joint names with a spouse which is a great form of asset protection against the creditors of one spouse.
The Transfer on Death deed will permit greater flexibility in estate planning and cost-effective probate avoidance.
Posted by Attorney Misty A. Watson. Watson’s practice focus is estate-related: planning, administration, and probate. She creates trusts, wills, financial, and health care powers of attorney, guardianships, and conservatorships.
12/29/11 2:44 PM
Estate Planning, Probate, Trusts | Comment (0) |
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Transfer on Death Deed Now in Illinois
By David P. Renovitch
Deal Did Not Include Details on Practices that Led to Housing Market Collapse
A federal judge in Manhattan refused to approve a $285 million settlement entered into between the Securities and Exchange Commission and CitiGroup, Inc. The SEC sued CitiGroup alleging that in 2006 and 2007, it sold $1 billion in mortgage-related securities without telling investors that it was betting against those same securities. In other words, CitiGroup anticipated a collapse in the housing market and sought to unload securities that would lose value as a result of the collapse.
Judge Jed S. Rakoff rejected the settlement because CitiGroup did not have to admit or deny any allegations. The Judge ruled that without knowing more details of the facts, both he and the public have no way of knowing whether this is a reasonable settlement or whether such practices should be corrected. In its Order, Judge Rakoff stated “If the allegations of the Complaint are true, this is a very good deal for CitiGroup; and even if they are untrue, it is a mild and modest cost of doing business.” The Judge noted that investors lost more than $700 million in these transactions.
This decision is seen as a fairly dramatic shift in a very long-standing policy of permitting the SEC to reach settlements without any admission of wrongdoing. The SEC settles hundreds of enforcement cases each year, usually by getting the company to pay a fine or reimburse investors without admitting or denying any charges. The Judge hinted at his motivation for deviating from precedent by stating “… in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth.”
The SEC has decided to file an appeal citing “… legal error by announcing a new and unprecedented standard that inadvertently harms investors by depriving them of substantial, certain and immediate benefits.” The SEC also cited the break from decades of precedent.
There is, indeed, a growing sense of frustration as economists and other experts seek to learn the factors and variables that led to the collapse of the housing market. Obtaining accurate information is critical to determining what, if anything, needs to be fixed.
Posted by Attorney David P. Renovitch. Renovitch has extensive litigation experience in matters related to insurance companies and their insureds, real estate, construction, banking and lending, especially in the areas of title litigation, recoupment and mechanic’s lien litigation.
12/29/11 12:43 PM
Banking and Finance, Real Estate | Comment (0) |
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Judge Rejects SEC Settlement with CitiGroup
By Christopher D. Vanderbeek
In September 2011, Missouri’s Western District Court of Appeals rendered its opinion in State ex rel. KCP & L Greater Missouri Operations Co. v. Cook. The Court ruled that Missouri employees may sue their employers in civil court where they have allegedly suffered an “occupational disease” as a result of their employment. It is important to note that the Court did not bar employees from filing workers’ compensation claims based on occupational diseases. Rather, the Court essentially gave employees with occupational diseases the option of either filing a workers’ compensation claim or filing a civil lawsuit.
Prior to KCP & L, the general understanding among employers, employees, the State of Missouri, and workers’ compensation legal practitioners was that the Missouri workers’ compensation system was the exclusive remedial forum for any claim involving a work-related injury, whether it be a broken arm or lung cancer. This general understanding was derived from Section 287.120 of the Missouri statutory code. Section 287.120 (the “exclusivity provision”) states as follows:
- Every employer subject to the provisions of this chapter shall be liable, irrespective of negligence, to furnish compensation under the provisions of this chapter for personal injury or death of the employee by accident arising out of and in the course of the employee’s employment, and shall be released from all other liability therefor whatsoever, whether to the employee or any other person.
- The rights and remedies herein granted to an employee shall exclude all other rights and remedies of the employee, his wife, her husband, parents, personal representatives, dependents, heirs or next kin, at common law or otherwise, on account of such accidental injury or death, except such rights and remedies as are not provided for by this chapter.
The intent behind the exclusivity provisions was that Chapter 287 of the Missouri statutory code would provide the exclusive remedy for all claims based on work injuries. However, the Court in KCP & L exploited an oversight in legislative wording – the legislature only made the workers’ compensation system the exclusive forum for claims based on injuries (or deaths) caused by accidents.
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12/20/11 12:30 PM
Business Law, Employment Law, Workers' Compensation | Comment (0) |
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Employees Can Now Sue for Occupational Diseases: Understanding Breeds a Solution to the Problem
By David A. Zobel
Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives
It’s probably a safe bet that most people in their twenties and thirties have not given much thought to estate planning. Short of a first child or a friend asking if you want life insurance, planning for what will happen when you die probably hasn’t come up and why should it? You’ve got youth and health on your side. Moreover, you probably don’t have a lot of assets at this point.
So why is it important? I asked estate planning attorney Misty Watson to help explain. According to Watson,
“Planning for the future encompasses much more than where your property goes upon your death. Estate planning can also cover who handles your finances if you are out of town, who makes medical decisions for you in the event you become incapacitated, and who becomes your guardian if a court declares you incompetent.”
With these thoughts in mind, you may want to reflect upon the following considerations:
What Happens to My Assets?
You have more than you think you have. Even if you don’t own a home or a wall safe full of bullion, you still have assets and they need to be distributed somehow and to someone. Consider the following examples: bank accounts, savings accounts, stock, bonds, 401ks, IRAs, other retirement accounts, automobiles, clothes, art, appliances, and furniture. Chances are you have at least one of these things and more than likely you have a few. Maybe you’d like your friend to get your watch or a fund be set aside for your nephew’s college fund. Estate planning assists in sorting out who gets what and when.
What Happens to My Children?
If you have children and are single, chances are you may have spoken with someone about taking care of your children in the event you pass. However, without any sort of document proving these intentions, how will the State know what to do? If you are married with children, your spouse will take on the responsibility, but what if you die at the same time? Or get divorced? Your children’s future should be your decision and not left up to the State or a court system.
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12/12/11 9:32 AM
Estate Planning, Family Law, Probate, Trusts | Comment (1) |
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Estate Planning for Young Professionals: Why Considering Your Death is Important Even at this Age
By Misty A. Watson
Your parent, aunt, grandparent, or friend has appointed you as trustee of their trust. You may have briefly glanced at the document 10 years ago when the trust was formed and never gave it a second thought until you get the call that the trust creator has become incapacitated or has died.
What do you do? What are your duties as trustee? What information are you supposed to give the beneficiaries? What are the steps to collecting assets? What bills do you pay? Are you supposed to file tax returns?
Serving as a trustee can quickly become overwhelming. Timing issues regarding notice to the beneficiaries and reporting to the beneficiaries your activities are often the most difficult for a trustee to know without the help of legal counsel. An accountant and financial advisor can also be valuable resources during the initial trust administration period.
Whether you are currently serving as trustee or know you will be serving as trustee in the near future, a consultation regarding your legal responsibilities as trustee is critical.
The duties of a trustee may include:
- Notice to the beneficiaries of the trust. Notification may be necessary to beneficiaries that you are serving as trustee, and to inform them that they have a right to contest the terms of the trust. Each state differs in how the wording must be stated in the notice and what steps must be taken in order to provide appropriate notice. Some states require that a copy of the trust be provided to the beneficiaries, while others do not.
- Collection of the assets. Many assets may not currently be titled in the name of the trust. Some assets may list the trust as the payable on death beneficiary while other assets may need to be probated in order to transfer those into the name of the trust.
- Proper accounting. As trustee, you will be responsible for accounting for the assets in the trust. Most states require that the beneficiaries be sent an annual report regarding transactions that occurred.
- Taxes. You will be responsible for filing taxes both for the trust and for the decedent.
This is not an exhaustive list of all the duties of a trustee. Being a trustee can be time-consuming and overwhelming, but with the right team of professionals, the burden can be lighter.
Posted by Attorney Misty A. Watson. Watson’s practice focus is estate-related: planning, administration, and probate. She creates trusts, wills, financial, and health care powers of attorney, guardianships, and conservatorships.
12/6/11 2:30 PM
Estate Planning, Trusts | Comment (0) |
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So You Are a Trustee
