ROBERT L. BUCHANAN, JR. HAS JOINED HULL BARRETT, PC

 

Hull Barrett, PC is pleased to announce that Robert L. Buchanan, Jr. has joined the firm and has moved his law practice to the firm’s Aiken office.  He will continue to practice in the areas of civil litigation, including personal injury litigation, business litigation, probate and estate litigation, real estate litigation, as well as corporate governance and transactions.

 

A native of Aiken, Mr. Buchanan is a 1973 graduate of Erskine College and a 1976 graduate of the University of South Carolina School of Law.   Following graduation and his being admitted to the South Carolina Bar, Mr. Buchanan returned to Aiken and joined the former firm of Williams & Johnson.  He later formed Buchanan Law Office, PA where he has continued to practice until joining the Hull Barrett firm.  He has served as a part-time federal Magistrate Judge for the District Courts of South Carolina since 1979.    He is named in the Best Lawyers in America and holds the AV Preeminent Judicial rating by Martindale Hubbell.

 

Mr. Buchanan is an active member of the First Presbyterian Church of Aiken where he has served as a Ruling Elder, Deacon, Trustee, and Church School teacher.  He is a former youth sports coach in the community.  He and his wife, Tookie, are the parents of three adult children, all of whom are living in Aiken.  They have four grandchildren.

 

Hull Barrett, PC, founded in 1872 in Aiken and 1916 in Augusta, provides a full range of legal services to its clients through its offices in Aiken, Augusta, and Evans.

Dated: August 29, 2018

Mitch Snyder selected to Leadership Augusta – Class of 2019

Mitch Snyder has been selected to Leadership Augusta, Class of 2019.

Leadership Augusta is a program of the Augusta Metro Chamber of Commerce. The mission of Leadership Augusta is to inform and inspire existing and emerging leaders of the greater Augusta area to build a stronger community. It’s vision is to  recognize the power that trusted relationships between community leaders bring to the region. They believe in cultivating leaders who will build upon those relationships, collaborate across cultural and economic boundaries, and develop innovative ways for the greater metro Augusta area to thrive, socially and economically.  Congratulations Mitch – we sure know you are a great asset to this team.

Read more about them here: https://www.leadershipaugustaga.com/

George Hall elected as Secretary of the Georgia Defense Lawyers Association

Congratulations! George Hall has been elected as the 2018 Secretary of the Georgia Defense Lawyers Association.

The Georgia Defense Lawyers Association (GDLA) was founded 51 years ago by a group of civil defense attorneys to create a forum for networking outside of the office, courtroom and arbitration table. Initially the GDLA’s focus was social camaraderie and the informal sharing of techniques on the vision of its founders and evolved to offer formal avenues for training, networking and communication. Wishing George all the best in his role with the GDLA.

Supreme Court holds that Government agencies have the discretion to produce most open records exempted documents

In the case of Campaign for Accountability v. Board of Regents, the Georgia Supreme Court issued a unanimous decision on June 18, 2018.  This was a case in which the sponsor of a professor’s academic research at Kennesaw University sued to prohibit disclosure of documents between the University researcher and the sponsor of the research that had to do with the effects of payday loans on the financial health of consumers.  The requester of the background records obviously wanted to see if the professor’s research was swayed because it was financed by the payday loan industry.

The Georgia Court of Appeals sided with the Consumer Credit Research Foundation that sponsored the professor’s research.  The Court of Appeals held that an agency could not release documents covered by an Open Records Act exemption.

However, the Supreme Court held that the Court of Appeals’ interpretation was wrong.  The language that precedes the 50 enumerated exceptions under O.C.G.A. § 50-18-72(a) states as follows:  “Public disclosure shall not be required for records that are [listed below].”  The Supreme Court rightly held that a common sense understanding is that not “requiring” records to be released is entirely different from “prohibiting” records from being released.

The Court correctly noted that some Open Records Act exemptions specifically state that the documents in question cannot be disclosed.  But for the great majority of the exemptions, an agency is free to permit disclosure of the requested records should it choose to do so.

David Hudson

GPA Counsel

EXCELLENT WEEK OF RESULTS FROM THE GEORGIA COURT OF APPEALS

In four decisions rendered by the Georgia Court of Appeals during the week of March 5, 2018, clients of Hull Barrett obtained excellent outcomes.
One case involved a forest products manufacturing facility that was being sued by neighbors for nuisance, trespass and negligence. The Georgia Court of Appeals held that because the facility had been in existence prior to the construction of the neighbors’ residences, O.C.G.A. § 41-1-7 applied and the neighbors’ claim for nuisance was barred. The claims for negligence and breach of trespass were barred because of an inability of the plaintiffs to show a breach of any standard of care by the defendant in the operation of the facility.
In another case, Hull Barrett represented a company that supplied management services to a local hospital. A physician was terminated during a layoff by the hospital, and she filed suit claiming that her termination was based on her status as a whistleblower who had made complaints about patient referral requirements. The Georgia Court of Appeals exonerated the Hull Barrett client because there was no evidence that the executive who made the decision to terminate the physician had any knowledge of prior complaints she may or may not have made. The client was also absolved for any allegedly slanderous comments made by the executive.
In a third appeal, Hull Barrett represented a family member who brought suit contending that the executor of a deceased family member’s estate had misappropriated estate funds and breached fiduciary duties. At the trial court, Hull Barrett’s client obtained a substantial verdict of $206,000 in compensatory damages, $97,000 in attorney fees, and $12,500 in punitive damages. Upon appellate review, this verdict was upheld in its entirety by the Court of Appeals.
Lastly, the Court of Appeals upheld a verdict in favor of the Augusta Housing Authority, a Hull Barrett client, in a case in which a tenant challenged a dispossessory judgment that had been obtained in the trial court.

Lending a helping Hand for Hurricane Harvey

Red Cross Hurricane Harvey

Hull Barrett is proud to lend a helping hand to the American Red Cross (Augusta Chapter) for their help & support to all of those affected by Hurricane Harvey. Our thoughts will be with Susan Jernigan & her team of volunteers as they head to Texas to assist. Donations are still welcome – see their website for more details.
http://www.redcross.org/

Judge Dickert receives Justice Benham Award

As his nominators say, ” among fellow lawyers, members of the bench and citizens at large, there are a few, if any, who do not admire Neal Dickert for his many exceptional qualities: his kindness and humility; his service to his fellow citizens and his country; his service to his profession; and service to those throughout the community who need a helping hand.” Returning the the Augusta law firm Hull Barrett P.C. in 2008, Neal W. Dickert concentrates his practice in civil litigation, arbitration, and mediation. Dickert served for eleven years as Judge of the Superior Court for the Augusta Judicial Circuit from January 1997 to November 2007 where he presided over civil, criminal, and domestic cases, including over 100 jury trials.Before his judicial service, Dickert practiced for more than twenty years with Hull Towill Norman & Barrett, P.C. from Augusta 1974 to 1996, handling matters in the State and Federal courts of Georgia and South Carolina. A trained mediator since 1994 he has mediated extensively, is listed in The Best Lawyers in America – Mediation and is a Paul C. Harris Fellow of Rotary International.

Judge Dickert received his J.D. from the University of South Carolina in 1974 and was a member of the South Carolina Law Review and Wig and Robe Scholastic Honorary Society. He earned his M.B.A from the University of South Carolina in 1969 and B.A. in Economics from the Wofford College in 1968. Judge Dickert is a U.S. Army veteran who served as First Lieutenant in the U.S. Army Medical Service Corps from 1969 – 1971  and with the Medical Group Headquarters in Vietnam from July 1970 until July 1971. He received the Bronze Star and Vietnam Service Medal. He was admitted to the South Caroline Bar in 1974 and the Georgia Bar in 1975.

Serving the Community

Dickert has served on the Board of Managers for nine years and as President for one and a half years for the Tuttle-Newton Home that started as an orphanage in 1852 and now serves families and at-risk children by providing scholarships, emergency assistance, and other financial help. He serves as Secretary of the Board of the Augusta Partnership for Children that fosters cooperation among groups serving at risk families and combats teen pregnancies. He and two other lawyers started the Augusta Bar Foundation three years ago which how has an endowment of over $100 000 and has given grants to organizations serving at risk youth. He serves on the Disciplinary Board of the Episcopal Diocese, handling clergy disciplinary issues with the diocese and is a frequent speaker at local public schools and works with Communities in Schools.

Over the years, Dickert has served on the Board of Trustees of the Institute of Continuing Judicial Education for Georgia (Chairman, 2005 -2007), Board of Governors of the State Bar of Georgia (1986-1990), president of the Augusta Rotary Club (1991-1992) and the Wofford College Alumni Association (President, 1996-1997). He has also served on the Board of Directors of the University of South Carolina Law School Association (1992-1998) and as a Senior Warden of the Church of the Good Shepherd (2004-2007).

Personal Life

Married to the former Floride Clarkson for 47 years, they have one son, Dr. Neal W. Dickert, Jr., an Assistant Professor of Cardiology at the Emory University School of Medicine.

See profile here

 -Published in the 18th Annual Justice Robert Benham Awards for Community Service Reception Program, Feb 28, 2017

Defend Trade Secrets Act (DTSA) of 2016

Trade Secret Misappropriation Recourse and Whistleblower Protection

New Legislation Impacting Business

All businesses have intellectual property and trade secrets.  A company is in business because it is offering something of “value” which can be a number of things from product to process to promotion.  For example, proprietary software, product systems, new product generation, or even client lists.  The loss or misappropriation of such can be devastating to the success and profitability of a company.

In a measure to further protect businesses, the Defend Trade Secrets Act (DTSA) of 2016 was signed into law on May 11, 2016 after being unanimously passed in the Senate and ratified in the House. It creates a federal cause of action for trade secret misappropriation.  The central provision of the DTSA will be codified as 18 U.S.C. § 1836(b) and reads:

An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.

What this Means

A “trade secret” means “all forms and types of financial, business, scientific, technical, economic, or engineering information …  if—(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the another person who can obtain economic value from the disclosure or use of the information.”

Misappropriation includes: without permission (A) obtaining a trade secret that was knowingly obtained through improper means or (B) disclosing or using a trade secret with knowledge that either (1) it is a trade secret or (2) it was obtained through improper means. The “improper means” include “theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” However, misappropriation does not include “reverse engineering, independent derivation, or any other lawful means of acquisition.”

The DTSA also creates an ex parte seizure procedure for use in extraordinary circumstances where the party against whom the seizure is ordered would “destroy, move, hide, or otherwise make such matter inaccessible to the court, if the applicant were to proceed on notice to such person….”

Protection for Whistleblowers Under DTSA

The DTSA seeks to protect whistleblowers from criminal or civil liability for disclosing a trade secret if the disclosure is made for purpose of reporting a violation of law. Employers have an affirmative duty to provide employees notice of the new immunity provision in “any contract or agreement with employee that governs the use of a trade secret or other confidential information.” Failure to comply means that the employer may not recover exemplary damages or attorney fees in an action brought under the DTSA for theft of trade secrets against an employee.  The definition of “employee” is drafted broadly to include contractor and consultant work performed by an individual for an employer.

What Companies Should Do Next

Companies should update their employment manuals, employment agreements and confidentiality agreement to disclose the whistleblower immunity provisions in the DTSA. Otherwise the company is not eligible to recover double damages or attorney fees in trade secret litigation.

Trade Secrets

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IP Protection of Typeface Logos

A current trend in design and marketing are simplified corporate logos or typeface logos.  Take Hull Barrett’s logo as an example:

Hull Barrett

The words “Hull Barrett Attorneys” in the logo are a typeface and not an artistic element like the peach in the State of Georgia’s logo.  Due to this trend, companies often inquire about protecting intellectual property in font or typeface logos.

The Background of Using Font and Typeface Logos

Typefaces and fonts are often used to create logos, designs, and graphics.  Such designs are protectable as a form of artistic and intellectual property. There is much confusion, however, regarding typefaces and fonts—particularly who has the rights to use them.  Many people are not informed of the law governing the use of typefaces and fonts. Not all typefaces or fonts may be used freely without license to do so.  Those interested in intellectual property rights in fonts and typefaces include type designers, lettering artists, punch-cutters, calligraphers, software developers, as well as persons or entities interested in trademark protection of names and logos written in certain typefaces.

What is the Difference Between a Font and a Typeface?

The terms “font” and “typeface” are often used interchangeably.  While the colloquial definitions are nearly identical, the difference between the definitions in a legal sense is significant. Put plainly, a typeface refers to the way that a set of characters (sometimes called “glyphs”) appears on paper or a computer screen.  Some examples of typefaces are Arial®, Times New Roman®, Helvetica®, and Lucida®.  A font, however, is a computer program or software that instructs a printer or computer display the manner in which a glyph or character is intended to be shown. Consequently, what people generally refer to as a “font” in conversation is actually a “typeface.”

Are Fonts and Typefaces Protected by Federal Copyright Law?

Congress has determined that “typefaces as typefaces” are not protectable under United States copyright law.[1]  Federal courts, on the other hand, have found that font software programs are protectable under federal copyright law because they are original works of authorship due to the creativity and artistry involved in their creation.[2]  Therefore, persons and entities that create typefaces should be aware that they do not have any copyright in such typefaces. But, those that create font software should consult an attorney in order to register and protect from infringers the copyrights that they have in font software.

Are Fonts and Typefaces Protected by Federal Trademark Law?

While copyright law deals with how a typeface or font is written, United States trademark law can protects the name of the typeface or font.  Some examples of typefaces which have been registered with the United States Patent and Trademark Office (“USPTO”) include Times New Roman®, Helvetica®, and Lucida®, while some examples of font software include Wingdings® and Helvetica®.  The owners of these trademarks may license the trademarks to software programs that use the typefaces.  However, this presents the problem that infringers need only to change the name of the typeface or font when using them to skirt the protections of trademark law.

Trademarks can be registered in a stylized design or typeface, or in block lettering.  If a trademark is registered in block lettering, its owner enjoys trademark protection regardless of the typeface in which the mark is written.  The waters get muddied when you consider that typefaces are commonly used as part of a logo or design. For example, the iconic Coca-Cola® logo mark, which has been registered numerous times, is written with specific cursive characters.  As mentioned before, the typeface itself is not subject to copyright protection in the United States, but the logo design in its entirety is protected as by United States trademark law.  Thus, trademark law can protect the design of a typeface so far as its use in a design, but not the typeface itself.

Typefaces themselves are not protectable under United States copyright or trademark law.  However, the names of the typefaces are protectable by trademark law, and the font software used to produce the typefaces is protectable under copyright law.  Those that create typefaces and font software, or design trademark logos should consult an attorney to help protect their intellectual property rights.

Typeface Logos

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[1]              37 C.F.R. § 202.1(e).

[2]              Adobe Sys. v. Southern Software, Inc., 1998 U.S. Dist. LEXIS 1941, 45 U.S.P.Q.2D 1827 (N.D. Cal. Feb. 2, 1998).

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The Curtain is Rising on the New Overtime Rules

Changes to the Overtime Rules are Here

On May 18, 2016, the Department of Labor announced the Final Rule defining and delimiting the changes in overtime exemption for Part 541 (“white collar workers”).¹  The new regulations significantly impact white collar overtime rules by more than doubling the salary threshold that would exempt an employer from paying employees overtime.  Prior to the new rules, if an employee qualified as a white collar employee, and had a salary more than $23,660 annually, then they were exempt from overtime pay.  The new rule changes that threshold to the 40th percentile of earning for full-time salaried workers for the lowest wage Census Region (currently the South), which is $47,476.00 annually ($913 weekly).² The threshold will be automatically updated every three years.  However, the Final Rule allows employers to satisfy up to 10% of the standard salary requirement with non-discretionary bonuses, incentive payments and commissions so long as they are paid at least quarterly.

What the Change Means to Businesses

The effective date of the Final Rule is December 1, 2016.   Employers should be taking action now to prepare.  The change in the overtime threshold for white collar employees will impact employers differently depending on the number of employees to be newly classified as non-exempt.  It is likely that the change may be felt more acutely by the retail and restaurant industries.

Cost to Employers

The cost to employers to incorporate overtime changes will vary depending on their industry size, sector and employee distribution.  However, the change itself is generally applicable and many businesses and employees will experience a substantial financial impact.  Accordingly, when CSRA businesses are budgeting, they should certainly consider the increased expense from the number of employees who are either given a raise above the new threshold to remain exempt or paid overtime because they are suddenly nonexempt.  Employers should also factor in the cost of initial compliance to include the changes in human resource and payroll.  For many businesses, there may also be cost associated with the possible increase in salary for employees up the chain if lower level employees receive raises because of the regulation.

Other Challenges

One additional challenge that businesses may face is the net negative impact on morale on staff from changes since many formerly exempt white collar employees will now be forced to “punch a clock.”  Some managers will now have to keep up with their lunch breaks, etc. and many will likely take issue with it.  However, if businesses focus some attention to their planning and roll out efforts they may more easily be able to highlight the positive aspects of the changes.

Steps to Prepare for the Overtime Changes

  1. Gather and assess information such as employee salary and total working hours. Taking the pulse of the organization is a great place to start.  Businesses should start to look at salary and benefit information to get an idea of how to most efficiently pay employees.  An employer should also take a close look at the hours of employees to assess how much time an employee spends both in the office and at home working.  Remember, responding to emails from cellular devices or home computers are a part of total working hours.
  1. Gather information about the actual duties of employees. An organization should take a close look at the duties of employees. The goal is to discover the actual activities performed in a position, not the written descriptions of the position, which are often outdated.  This step is important to determine how best to redistribute employees in the most efficient manner.
  1. Consider the Types of Changes Possible for your Organization to Comply with the Rules.
    a.  increase the salaries of currently exempt employees to the new threshold;
    b.  reclassify exempt employees as nonexempt and pay them hourly;
    c.  change staffing to eliminate the need for overtime;
    d.  change benefit plans.

The stage is set, and all of the actors in this production – regulatory agencies, employers and employees – must get ready to play their part.  It is imperative that local businesses take the time to familiarize themselves with the changes and start to take stock of their positions so that they can avoid the potentially crippling financial consequences of non-compliance.

overtime rules

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¹ The official document is scheduled to be published in the Federal Register on 05/23/2016 and will be made available online at http://federalregister.gov/a/2016-11754.
² The number was based on data from the fourth quarter of 2015.

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Interpretation of Georgia’s ER Statute

In a decision in November 2015, the Georgia Supreme Court has provided for a greater understanding of Georgia’s Emergency Room statute, O.C.G.A § 51-1-29.5.  That statute provides tort immunity arising out of emergency medical care unless the physician or other health care provider is shown by clear and convincing evidence to have been guilty of gross negligence as opposed to ordinary negligence.

The Case – What Happened at the ER

In this case, a six month old child fell while in the custody of a babysitter and was taken to the Phoebe Putney emergency room.  A physician assistant examined the child and found no signs of the need to be examined by a physician or for more testing, and the child was discharged.  The child appeared normal for the next two days but then stopped breathing and was readmitted to the hospital where the child was found to have a skull fracture and surgery was performed.  The child suffered brain damage and now suffers severe developmental deficiencies including an inability to walk or talk.

The Takeaways – ER Statute

In the trial court, it was held that the hospital and its staff were not entitled to the heightened scrutiny of the ER statute.  The Georgia Court of Appeals reversed, and the Supreme Court of Georgia affirmed that reversal.  In doing so, the Supreme Court provided the following guidance:

  • Routine medical services provided in an ER setting do not receive the benefit of the statutory protection. An example would be routine flu shots administered in an ER.
  • If patients present themselves and assert that they require emergency care, the protection of the statute will generally be available, even if the diagnosis at the time is that the patient did not require, or no longer needs, emergency treatment. Even if the health care provider mistakenly concludes that the patient has stabilized or does not require emergency treatment, the statute will provide protection if “objectively” the patient appeared to initially need “emergency medical care.”
  • While the health care provider’s subjective opinion regarding the patient’s condition is not controlling, it will be relevant evidence to be considered by the trial court.
  • The patient’s symptoms or diagnosis after emergency department care will not be relevant to the question of whether the patient presented for emergency medical treatment initially.

Nguyen v. Southwestern Emergency Physicians, PC, 298 Ga. 75 (2015).

ER Statute

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So You Are Presented with a Form Contract?

What About It?

When you or your company is presented with a form contract prepared by the other side in a transaction, red flags should go up. This is because the other side in the transaction has had its lawyers draft the form contract in order to maximize the interest of that party – that is what lawyers usually do for their clients.

Maximizing interest can take the form of setting forth only the obligations of the opposing party without setting performance obligations for the drafting party. Or a form contract often limits the damages that may be pursued against the drafting party without setting similar limitations for the opposing party.

Here are some additional items to be on the lookout for:

Indemnity and Hold Harmless Provisions in a Form Contract

The other side will often insert language that you or your company will be responsible for any and all claims that arise out of the contractual arrangement. Don’t agree to it. It is certainly appropriate for you to agree to be responsible for any claims that arise out of your errors or omissions, but you do not want to be in the situation of agreeing to hold harmless or indemnify some other party for its shortcomings.

Venue and Jurisdiction in a Form Contract

Many times a form contract will state that any dispute about the contract or its performance shall be brought exclusively in the home courts of the other party. Don’t agree to it. You never want to agree that you can be hauled into court in some distant place where the cost of litigation and inconvenience is far greater than would otherwise be the case. The best rule is for the contract to be silent on courts and venue as there are general principles of law that allow either party to bring a claim in a court that has significant contacts with the subject matter of the dispute and where the parties are registered or have done business. At the worst, try to compromise so that any claims against you must be brought in your home county, and any claims against the other party to the contract will be brought in its home county.

Arbitration Clauses in a Form Contract

Arbitration is another way for disputes to be resolved privately rather than in a court. One of the main drawbacks of arbitration is that the parties have to pay the fees of the arbitration company and for the arbitrator(s). Except for a relatively modest filing fee, the courts and judges are free – subsidized by all taxpayers. Also, if arbitration is agreed to, it is much more economical to conduct arbitration under the arbitration code of the state where the matter will be heard rather than to use the American Arbitration Association or some other arbitration group which charges stiff up-front fees and significant hourly rates for the one or three arbitrators who preside. Arbitration under the law of the state gives the same protection as arbitration in general, but administration fees to an outside company are avoided and the parties together can select the arbitrator or have one appointed by a local court.

These are not the only items of concern that might be found in a form contract, but they are three that often arise.

form contract

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Federal Estate Tax Is No Longer The Biggest Concern

Focus of Estate Planning Shifts

As many of you have heard, recent tax law changes are turning traditional estate planning on its head – causing a shift in attention from an estate tax focus to an income tax focus.   Planning techniques long considered wise – e.g., shifting wealth to younger generations while senior family members are still alive or automatically leaving assets to a bypass “credit shelter” trust – may no longer be necessary to save estate tax and could now leave many families paying income tax they would not otherwise owe.  Chances are, if you have accumulated modest wealth, your existing estate planning documents drafted prior to 2013 contains planning techniques that are out of date.

The New Law Changing Estate Tax

The legislative deal Congress passed in January 2013 set the top estate and gift tax rate at 40% and raised the exemption to $5 million per person, adjusted for inflation. It now stands at $5.43 million and will rise to $5.45 million in 2016. That means an individual can leave $5.45 million to heirs and pay no federal estate or gift tax. Not only will this exemption rise with inflation, but spouses can now share–and effectively inherit through a portability election–each other’s exclusions.  In other words, a married couple will be able to shield $10.9 million from federal estate and gift taxes before the 40% rate will kick in.

As a result, the federal estate tax is no longer the biggest concern for most Americans who want to avoid taxes on wealth they leave to heirs.  In fact, according to the Tax Policy Center, only about 4,000 estates, or approximately .14% of the total, are expected to owe federal estate tax this year.  To provide perspective, 2.3% of estates were subject to tax in 1999 and 7.65% in 1976, according to the Tax Policy Center.

Income Tax Focused Planning

Although the legislative deal Congress passed in January of 2013 provided a generous estate and gift tax exemption, it also raised the top income tax rate on long-term capital gains to 20% – its highest level since 1997.  With the new 3.8% net investment income tax that took effect as a part of the Affordable Care Act, the top rate on long-term capital gains from investments is now 23.8%, up from 15% in 2012.  As a result, a main focus of current estate planning is what some practitioners refer to as “freebasing” – or utilizing planning techniques so that it frees survivors to get the most income tax savings from the step-up in basis of the decedent’s property.   In other words, while historical planning techniques oftentimes arranged for assets to be excluded from a loved one’s estate, under the new law, the greatest tax savings is now most often achieved through planning for estate inclusion, and minimizing capital gains.

For example, when you sell an asset such as stock, you owe capital gains tax on the difference between what you paid for it (its basis) and the sales price.  If you inherit certain assets you can “step up” the decedent’s tax basis to whatever the asset is worth at death.  Thus, highly appreciated inherited property can be sold immediately with no capital gains (or later, with all the gains before you inherited it disregarded).  On the other hand, if you receive property from a living donor, or receive a remainder interest from a standard “credit-shelter” trust, you do not get the stepped up basis and can result in significant capital gains tax.

Bottom Line

Do not fall victim to the trap that estate planning is just about reducing estate taxes.  Just because you do not have a taxable estate, does not mean that your existing estate documents still suit you.  While the true meaning of estate planning is more about people and relationships than about cold, hard numbers, if you are not diligent with your estate planning, you could be losing a stepped up basis in appreciated assets.  These new rules are complex, but they present tax-saving opportunities that many people planning estates remain unaware of.

estate tax

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Open Records Noncompliance by Board of Regents

Schick v. Board of Regents, 334 Ga. App. 425 (Nov. 12, 2015)

Starting in 2012, the editor of the Georgia Perimeter College student newspaper commenced open records requests for documents concerning a $25 million budget shortfall at the College and personnel layoffs. The request for document by Schick was expansive and would have been costly to fulfill. For example, the documents covered a period of time of approximately six years. College and Board of Regents representatives discussed with Schick that he might want to narrow the scope of his request and the amount he would have to pay to have the documents provided. As the Board undertook these discussions with Schick, the Board never invoked any statutory exemption to withhold any of the requested documents. Ultimately, with the assistance of counsel, the Board’s cost estimate to produce the documents was reduced from approximately $2,500 to $291.

The Board then began the process of reviewing and providing documents to Schick. By February 2013, the Board had produced over 12,000 pages of documents and it notified Schick that the compliance with his request was complete.

Schick believed there were certain “missing” documents and filed suit in June 2013 seeking complete production of documents responsive to his request. In its answer, the Board asserted that some documents were withheld under O.C.G.A § 50-18-72(a)(4) [for law enforcement, prosecution or regulatory agency pending investigation documents], and the Board produced an additional 713 pages of documents.

The case went to trial in Superior Court. The trial court found that the Board had violated the Open Records Act by failing to timely designate specific exemptions upon which it relied to withhold documents, and imposed a $1,000 penalty. The trial court did agree that the Board could withhold documents under the “pending investigation” exception, and Schick appealed.

On appeal, the key holdings of the Court in connection with the Open Records Act were these:

  • The Court reaffirmed that the Open Records Act is to be broadly construed in favor of allowing inspection of government records, and any exceptions should be narrowly interpreted.
  • One purpose of the Act is to make the production of records expeditious.
  • The Court did not accept the argument that the Board of Regents was a “regulatory agency” for purposes of the pending investigation exception in 50-18-72(a)(4).
  • And most importantly, the Court of Appeals rejected the argument that some documents were exempt just because the Board had shared these documents or provided them to “a law enforcement agency.” The Court of Appeals said that the exemption in (a)(4) is for records of a law enforcement, prosecution or regulatory agency, and not records merely related or pertaining to an investigation.
  • There is a separate exemption in 50-18-72(a)(3) of records “compiled for” law enforcement purposes, but these are limited to documents that would identify a confidential source, disclose confidential investigation or prosecution material that would endanger life or physical safety, or that would disclose a confidential surveillance or investigation.
  • The Court of Appeals affirmed the trial court’s refusal to impose attorney’s fees on the Board for the amount of time it took to produce the voluminous records. The Court found that the Board had worked diligently including nights, weekends and holidays to provide documents.
  • However, the Court of Appeals did remand the case for the trial court to determine if attorney’s fees should be assessed because of the Board’s invalid reliance on withholding some records based on the pending investigation exception.

open records

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