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Should I Consent to Judgment in Court?

Sit in the courtroom during any lengthy Virginia General District Court civil return docket, in Fairfax or elsewhere in Virginia, and you will likely see the following scenario play out: a pro se (meaning “unrepresented”) defendant will approach the front of the courtroom, whether in response to a lawsuit filed by a credit card company, homeowners association, medical provider, or any other type creditor, and the judge will ask the nature of the Plaintiff’s claim and the amount of damages alleged—sometimes thousands of dollars and sometimes hundreds. The judge will then ask the defendant whether or not he or she agrees with the claim, and the individual either responds affirmatively or acknowledges owing the money but attempts to explain that they have unsuccessfully tried to resolve the matter outside of court, or that the debt constitutes a hardship.

Occasionally a judge will ask or prompt the creditor’s attorney to speak with the defendant in the hallway to see if the matter can be resolved, but most of the time the court will proceed to enter “judgment by consent” and then encourage or instruct the defendant to follow up with the attorney to make arrangements to pay off the judgment. The entry of the judgment alone will almost always end up on a defendant’s credit report, and many judgments are taken when both sides would have benefited from making arrangements to satisfy the debt and thereby avoiding the entry of judgment.

Many creditors might assume that getting the quickest and easiest judgment always leads to the optimal recovery of the debt, but often times the threat of judgment is a more effective tool than the judgment itself in causing a debtor to pay the debt or entering into a satisfactory settlement or payment agreement. Collection and enforcement of a judgment can be frustrating and time consuming, and a voluntarily agreement or resolution is almost always the most effective path towards recovery of the debt. When judgments are obtained quickly either by default or by consent, it frequently signals that the debtor might not have many assets or revenue sources to protect.

Any defendant can answer the judge’s questions at the return date in a manner that will effectively constitute a sufficient denial of the claim that will result in a trial being set. This trial date is usually months down the road, and if nothing else, this provides the defendant with time to make payments or time to try and work out a settlement agreement or payment plan to resolve the debt. For creditors and their counsel, the pending trial date and continuing threat of judgment provides great incentive for the defendant to resolve the debt, if possible.

We at PJI Law can provide advice and assistance to both creditors and debtors, both prior to litigation, during litigation and during the post-judgment collection period. Contact our office today at (703) 865-6100 to schedule an in-person or remote appointment.

What Can Virginia Landlords Do About Tenants Who Are Behind on Rent in the Age of COVID-19?

Whereas commercial landlords can often utilize “self-help” and evict a non-paying tenant by changing the locks or, in some instances, shutting off utilities, landlords with residential tenants must use the court system by filing a Summons for Unlawful Detainer in order to evict a tenant.

Beginning March 16, 2020, all judicial evictions were frozen due to the judicial state of emergency declared by the Supreme Court of Virginia. Since then, there have been all kinds of changes that can be immensely confusing for those who, unlike landlord-tenant attorneys, don’t have it as part of their job descriptions to keep tabs on legislative and judicial updates.

A freeze on evictions would inconvenience and frustrate landlords during ordinary times, but a freeze on evictions during a period when many tenants are suffering financially and missing rent payments can cripple a landlord still facing monthly mortgage bills. Certainly both landlords and tenants are facing and dealing with unique hardships during the pandemic. If possible, both parties should explore and consider every possible way to resolve difficulties and avoid evictions. However, a resolution is not always possible; so what remedies do landlords during the eviction freeze?

If negotiations fail, the best thing a landlord can do is to have their unlawful detainer proceeding filed with the court now and scheduled on the soonest date permitted by the court. General District Courts have been accepting unlawful detainer filings since March 16th, and these matters have been piling up in the clerk’s office. For example, in one standard-sized General District Court in Virginia, nearly 200 unlawful detainer lawsuits were filed in the seven weeks following March 16th.

Many of the landlords with pending matters have had their initial return dates continued by the court, or have had to select new dates, due to extensions of the judicial emergency. A law firm familiar with the peculiarities of your local court would be well positioned to strategize with you about how to improve chances of getting to the “front of the line”.

PJI law has represented landlords in Fairfax County, Loudoun County, Prince William County, Arlington County, the City of Alexandria and other Northern Virginia jurisdictions in matters ranging from unpaid rent, to evictions, to property damage, to fraudulent representation. If you need advice on the best course of action or need assistance in getting your matter through court efficiently in light of the long queue that has built up, please schedule a consultation either in person, on the phone, or by video to discuss your matter. You can reach us at (703) 865-6100 or at landlords@pjilaw.com.

Super Lawyers Names Paul J. Abraham a 2019 Rising Star

PJI Law is pleased to announce that for the fourth year in a row, its Managing Attorney Paul J. Abraham has been selected by Super Lawyers to its Rising Stars List!

The selection, according to Super Lawyers, stems from Mr. Abraham having “attained a high degree of peer recognition and professional achievement.”

“This award is due entirely to our excellent team and to our team approach,” Mr. Abraham noted. “Every one of our clients and their cases get the benefit of being attended to by everyone from our Managing Attorney, to a committed Associate Attorney, paralegal, legal assistant, and of course to our Client Liaison. This exposure to so many members of our PJI Law family is what allows our team to deeply understand and work together effectively on our client matters, and it is a large part of the reason we have so many happy clients.”

The recognition is the result of a rigorous selection process by the nationally known and respected organization, which includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

Is In-Home Separation Possible in Virginia?

When you think of a married couple being “separated”, you probably envision one spouse moving out of the marital home. While that is the most straightforward way to separate, Virginia courts do recognize in-home separation as well. In-home separation occurs when the couple is still living in the same home, but each person is conducting his or her life as though they weren’t living together.

This is helpful to people because in most cases, and depending on the specific circumstances, Virginia requires a couple to be separated for one year or six months before they can file for divorce. Virginia requires a separation, or waiting period, in hopes that the couple will have enough time to work things out or, hopefully, reunite during that time. Waiting that long, however, can be difficult financially and sometimes even logistically. Therefore, many people elect to continue to live in the same home – but separately – so that they can avoid the expenses of maintaining two homes.

In-home separation doesn’t come without awkward moments and other difficulties.                                    

The question then becomes, how does the court know that the couple is separated if they are still living in the same house? While there is no formula, here is a checklist of some of the main facts the court would look at:

  • Using separate bedrooms.
  • Not engaging in marital relations.
  • Not running errands for the other spouse (grocery shopping, dry cleaning, etc.).
  • Not preparing food for the other spouse.
  • Not sharing meals together (unless it is a holiday or event pertaining to the children).
  • Not sharing chores (each spouse should be responsible for his or her own portion of the living space).
  • Not doing laundry for the other spouse.
  • Establishing separate checking accounts.
  • Not socializing together (not going on dates together, not going to family reunions, social gatherings, or work events together).
  • Not celebrating or exchanging gifts for special occasions.
  • Letting other people know that you are separated.
  • Having other people over to the house and making it clear that you are separated.
  • No longer wearing wedding bands.
  • No longer playing the role of the happy couple.
  • At least one person deciding that the separation is permanent (not trying to work things out, not going to couples therapy, etc.).
  • Note: If a couple has children (even if they are not minors), they are both still going to be parents regardless of whether they are separated. It is perfectly acceptable to continue to do things for the children such as attending sports events, concerts, and other special events for the children.

Again, there is no black and white rule, but all of these factors can add up to show either that the couple has been living separately or that they have not been.  In order to ensure that couples are not saying that they were separated before they truly were, the courts require a third party witness to confirm that they know the couple and know for a fact that the couple was separated for the necessary period of time.

We at PJI Law have guided a large number of Virginians through a divorce when the couple was separated within the same home. Sometimes, the separation may not have been as “clean” as one would have wanted, but our experienced attorneys have seen countless such situations and are ready to advise on how to deal with them, and on helping our client achieve their goals.

Remember Your Loved Ones (of All Species!) in Your Estate Planning

When thinking about estate planning, most of us think about our loved ones. Who will take care of my children? Who will inherit my estate? How will my spouse manage to pay the bills? However, a beloved household member is often overlooked . . . the pet!

While Virginia still classifies pets as property, their owners often treat them as members of the family. As such, responsible pet owners need to have a contingency plan in place for their pets in case something happens to the owners. If you leave your planning to chance, your pet’s future is uncertain. If something happens to you, your pet will be left relying on your friends or family to step up and care for them. If no one has the desire, time, space, or resources, your pet may end up at the mercy of a shelter or adoption agency.

You may believe you’ve addressed this issue via a verbal agreement with someone you trust. You may have a friend or family member who is pet-friendly and has told you they are willing to care for your pet. Unfortunately, that verbal agreement does not come with any guarantees that the person will (or, more often, can) follow through when circumstances change and times get tough, not to mention the potential disputes and competing claims over your pet that may arise among your family, friends, and acquaintances.

Good planning ensures your pet is properly provided for.

A far better course of action is to provide for your pet in your Last Will and Testament. This can be as customized as your needs require. You may simply direct whom you want to take care of your pet, you can set aside money for that person to use in caring for your pet, or you can even establish a pet trust.

A trust may cost slightly more to establish than a provision within your Last Will and Testament, but that is the safest way to ensure that your last wishes will be followed with respect to your pet. With a trust, you can not only leave your pet to someone’s care, but you can also leave funds to be specifically used for your pet and outline the conditions for use.

In addition to these formal steps for ensuring the care of your pet, it is also necessary to prepare the person you choose to care for your pet. Make sure the person knows where to find important information like medical records, and organize those records so that the person can easily identify allergies, medical conditions, and medication. Have the person and your pet spend time together and get to know each other. It would be helpful for the person to have information about your pet’s groomer, sitter, routine, and favorite things. These steps will make the adjustment period much easier for everyone involved.

Responsible pet owners must think about all of their loved ones, including their pets, and plan for the unexpected. Our PJI Law family has many pets, and being very much in the same boat as you are, we care about you and the ones you love, regardless of their species. Contact us if you would like to discuss options for your estate plans and the plans for your loved ones.

Check Out These Newly Enacted Virginia Laws

We’re not passive about the practice of law here at PJI Law – we pride ourselves on keeping up with the latest changes in the law in order to gain as big of an advantage as possible in our clients’ cases.

Newly enacted Virginia statutes typically go into effect on July 1 of each year, which means it’s now time to look at some of the newest and, in some cases, most interesting, laws that have gone into effect as recently as a last week:

Family Law

1. For the purposes of petitioning the court for a modification of spousal support, the payor spouse’s reaching full retirement age (per the Social Security Act) must be considered a material change in circumstances.

2. Virginia has developed a Kinship Guardianship Assistance Program to facilitate child placements with relatives if it is not appropriate for the child to return home or be adopted. The law also allows financial payment to the relative acting as the guardian of the child.

Business Law

3. The board of directors of a nonstock corporation is now authorized to determine that a meeting of members be held via remote communication, assuming the articles of incorporation or bylaws don’t have contradictory requirements.

4. A new law removes the requirement that a corporation authorized to issue one or more classes of shares list the number of shares of each class on its corporate annual report.

5. Landlords may now accept full or partial payment of rent during a court action for possession and still receive an order of possession if the landlord states in the written notice to the tenant that any payment of rent, damages, money judgment, award of attorney fees, and court costs would be accepted with reservation and not constitute a waiver of the landlord’s right to evict the tenant from the dwelling unit.

Miscellaneous

6. Everyone with pets knows that there can be liability if the pet bites someone. If there is a history of biting, the repercussions could be even worse. A new law in Virginia requires that previous bites must be disclosed upon the release of a dog or cat for adoption.

7. Virginia is lifting the prohibition on hunting or killing raccoons after 2:00 a.m. on Sundays.

8. Health care practitioners employed by the Department of Health may now prescribe antibiotics to the sexual partner of a patient diagnosed with a sexually transmitted disease without physically examining the partner.

9. Effective July 1, 2020, 911 is required to be able to receive and process calls for emergency assistance via text message.

If you have questions on how these or other Virginia laws may impact you, we stand ready to assist you.

How Does the New Tax Law Affect Spousal Support in Virginia?

Many people are concerned about how the new federal tax law is going to impact their taxes. What some people do not yet realize is that the tax law is also going to have a drastic impact on spousal support numbers in divorces.

Currently, the individual paying spousal support is able to claim the payments as a deduction on their taxes. The individual receiving support is then obligated to declare the support as income. (As always with taxes though, there are exceptions).

The new tax law states that, for orders entered starting January 1, 2019, the paying individual will no longer able to claim the deduction, and the receiving individual will no longer be required to pay taxes on spouse support received.

With that said, if you modify an agreement or divorce decree that was entered under the old law, you are still governed by the old law allowing for deductions and income unless both you and your ex opt-in to the new law. That means that the applicability of the tax law is yet another negotiation point when the time comes for modification. The paying spouse will want to maintain the support under the current regulations, while the receiving spouse will likely want to opt-in to the new laws.

The new tax law will make the date of entry of divorce and spousal support orders very significant around the end of  the year 2018.                                                                               

The new tax law is not retroactive. Therefore, if you have a divorce decree or settlement agreement that is executed on or before December 31, 2018, the new law does not apply to you (for now). As many people know, however, it is not uncommon for circumstances to change and depending on the settlement or court decision, support may be later modified.

Aside from the above implications, spousal support determination in Virginia remains unaffected. See our post on the subject to better understand generally who gets spousal support, for how long, and how much.

People often ask if the new laws will change child support as well. Interestingly, the current tax laws relating to child support mirror the new spousal support laws in that paid support is not deductible and received support is not treated as income. So, the short answer is no, there is no change to child support. The long answer is that spousal support is a factor used to determine child support. Therefore, there may be additional negotiations and factors to consider when determining child and spousal support starting January 1, 2019.

Regardless of whether you are paying or receiving support, it is clear that there are significant changes ahead. Many of the practical aspects of the change will have to be ironed out. It is important to have legal guidance to navigate these waters. At PJI Law, we are dedicated to staying abreast of the new changes in the law and helping our clients address those changes head on. If you would like to schedule a meeting to discuss, we would be happy to review your situation and go over your options with you.

The Dangers of Not Properly Registering Your Company in Virginia

The Supreme Court of Virginia has overturned a $2.35 million verdict for a telecom company because the company was not properly registered with the Virginia State Corporation Commission (“SCC”). The ruling of the Court means that in order for a company to prevail in its lawsuit, it must have the necessary certificate with the SCC before the entry of the final judgment.

In this specific case, Tulynet FZ, LLC, a company of Dubai, had a subsidiary company, World Telecom Exchange Communications LLC (“WTXC”), which had its prin­cipal place of business in Virginia. The companies filed lawsuits in the Fairfax County Circuit Court against their former employees, alleging that they conspired to put WTXC out of business by divulging trade secrets and interfering with WTXC contracts.

After a jury trial in 2015, the jury awarded the companies $4.864 million (which was later reduced). The defendants argued that Tulynet FZ, LLC could not proceed because it did not have the necessary SCC certificates of authority and/or registration. The trial court found that the party has until the judge signs the final order to obtain the necessary certificates.

Companies ranging from one person in a home office to multinational corporations are at risk if they fail to            properly register.                                                                      

The Supreme Court of Virginia, however, wasn’t as merciful and found that because Tulynet FZ, LLC did not have the necessary certificates at an earlier point in the process, it could not prevail in the trial. The ruling thus stripped Tulynet FZ, LLC of all monetary awards.

The purpose of enforcing the requirement of SCC certificates is ultimately a public policy issue. By not having the necessary certificates, a foreign company may be able to avoid paying Virginia taxes. Likewise, it may prevent the consumers from being able to sue the deeper pockets of the international company. If the international company is going to reap the benefits of conducting business in Virginia, it should have to register with the SCC just like any other company.

What does this mean for you? If you are a company that does business in multiple states, it is of utmost importance to ensure you are registered with the SCC (or equivalent entity) in each state and that all registration information is up to date. By failing to do so, you may leave yourself open to liability without any recourse. If you have questions about this or other issues related to your business, please reach out to the team at PJI Law by calling (703) 865-6100. We look forward to helping you.

Protect Your Digital Assets After Death

Most Virginians know the importance of having estate planning documents drafted in order to ensure that their final wishes are carried out, their assets are distributed to their loved ones, and any loose ends are eliminated. When planning, people often think about their personal property, real estate, and bank accounts. They may even make specific provisions for sentimental items such as family jewelry, paintings, pictures, and furniture. However, times are changing and it is important to have the information and guidance to not only plan ahead, but also to think outside of the box, or the home, as the case may be.

In our technologically savvy age, many assets are moving away from the physical realm and toward the digital frontier. Photographs have vanished from the beloved family albums and are now only maintained on social media sites. Some of these sites are password protected or are impossible to recreate. As we become more reliant on technology, we need to take different steps to ensure that our estate plan also protects our digital assets.

Being locked out of your online accounts can present a significant challenge to your family upon your passing.

Ownership varies depending on the type of digital asset. This means that some things are owned by you, while other things are still owned by the license holder. For example, your family photographs uploaded to social media are typically yours, but you only hold a license to any music on iTunes. With this in mind, it is important that the person responsible for managing your estate is aware of your digital accounts, what your level of ownership is, and how you wish for these accounts to be managed.

Some online giants provide some resources for those planning ahead. For example, Facebook allows you to name a “legacy contact” who would have some access to your Facebook account after you pass away. Google can be set to send an email t trusted contacts a certain amount of time after inactivity (presumably death), and allows you to share certain data with those contacts.

These companies’ resources, however, are limited and typically further action would need to be taken. Clients have a variety of options ranging from providing account information that is stored with his or her Last Will and Testament, to obtaining password storage services, to employing a service that provides for post-mortem storage. There are benefits and drawbacks to each of these options, but it is important to consider the issues and work toward setting the plans in place to meet your goals.

This is only one of the many discussions we have with our clients here are PJI Law. It is of utmost importance for us that our clients be fully informed of their options in order to strategize and meet their estate planning goals, and in this age this includes a thorough understanding of digital assets.

Shortcuts in Business Contracts: Penny Wise and Pound Foolish

In today’s uncertain economy, marginal increases in revenue or minor reductions in expenses can noticeably improve the bottom line of a small business. However, many small business owners in Northern Virginia attempt to cut costs by managing their commercial contract drafting or negotiations without an attorney, an ill-advised attempt at cost-cutting which often backfires.

Whether negotiating a commercial lease, a promissory note, a distribution agreement, an asset purchase agreement, or a joint venture agreement, consulting with an attorney early in the process will likely save you money and help avoid headaches both during the negotiation process and during the term of the agreement.

Many small business owners or entrepreneurs are tempted by the thousands of easily obtainable agreements online, and in fact, many of these agreements are indeed professionally and expertly drafted—but for different parties dealing with different and unique circumstances, often in a different state or legal jurisdiction. Since the addition or omission of a single word or sentence can often radically change the meaning or enforceability of an agreement, attempting to modify and utilize these agreements without professional assistance can end badly.

When it comes to business agreements, business owners without legal training don’t know what they don’t know.

The attorneys at PJI Law have seen countless commercial agreements that omit critical provisions which should always be included, as well as agreements made by individuals when the parties should be corporate entities, or agreements made by corporate entities which have been dissolved or have never existed to begin with. We often find ourselves helping clients who had poorly drafted agreement resolve contract disputes at a far higher cost than the small upfront investment in legal guidance that would have likely prevented such problems from arising.

When both parties are represented by counsel and the attorneys drafting the agreement have a clear understanding of their clients’ desires and concerns, the process can become streamlined and efficient. An effective commercial contract can save even a very small business tens – or even hundreds – of thousands of dollars by helping to reduce the likelihood of problems arising and minimizing the damage in the event that problems do arise – whether from breaches, negligence, liability, or indemnification issues.

Finding ways to cut costs in your small business is absolutely critical for success and survival, but business owners should think twice before trying to save money by taking shortcuts with their commercial contracts. No one wants to reach a point where they realize they were penny wise and pound foolish.