PJI Law

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.

Spousal Support in Virginia: Who Gets It, for How Long, and How Much?

What Kind of Spousal Support Awards Are There?

Known by some as “alimony” or “maintenance”, spousal support is often awarded upon divorce, particularly in cases of divorce where the parties have been married for a meaningful amount of time and there is a wage gap between the parties.

The three basic types of spousal support are periodic payments for an undefined duration, periodic payments for a defined duration, and a lump sum award.

  1. Periodic payment for an undefined duration is a specific sum that a party pays at certain intervals, that doesn’t typically end unless 1) one of the parties dies, 2) the payee remarries or cohabitates in a marriage-like relationship for more than one year, or 3) further order of the court.
  2. Periodic payments for a defined duration are payments at certain intervals, for a certain amount, that end on a definite date.
  3. Lump sum support is an award of a lump sum that can be ordered payable at once or over installments, but in which the total amount is set.

Who Is Awarded Spousal Support?

The existence of a wage gap is not strictly determinative of whether spousal support is to be paid. The court must establish whether a party is entitled to support by looking at a list of statutory factors surrounding the marriage and the divorce. A finding of adultery, for example, can preclude a party from receiving spousal support. However, the court may award spousal support in such a situation if it determines that a denial of support and maintenance would constitute a manifest injustice based on the respective degrees of fault during the marriage and relative economic circumstances of the parties. It is important to remember is that spousal support is not punitive, and will not be awarded merely to punish one of the parties for wrongdoing.

There are additional factors the court might consider, such as the duration of the marriage, contributions to the family, standard of living established during the marriage and the earning capacity of the parties. You can find the factors listed in § 20.1-107.1 of the Virginia Code.

How Much Spousal Support Will Be Paid?

While there is no set “formula” for determining long-term / post-marital support, some jurisdictions in Virginia, including Fairfax County, have established guidelines for calculating temporary support.

Temporary or pendente lite support is only paid while the divorce is pending. An award of temporary support is not intended to create the presumption of a final award, but can sometimes serve as a general guide as to whether (and how much) support will be awarded in a final order. The formula Fairfax County has established provides the following:

28% x Payor’s (higher earning party) Income – 58% x Payee’s (lower earning party) Income

EXAMPLE: Payor earns $10,000 per month, Payee earns $3,000 per month.

28% x $10,000 = $2,800             58% x $6,000 = $1,740

$2,800 – $1,740 = $1,060 (monthly support)

The most important thing to remember is that every case is different. We here at PJI Law understand that separating or divorcing couples are unique, and that the questions of whether you or your spouse will get support, and how much it might be, can only be addressed upon a review of your specific situation, facts and finances. A consultation is an excellent way to tackle those questions head on.

Are You Being Called to Be a Witness in Court? Here’s How to Take the Stand

Except for expert witnesses and law enforcement officers who testify on a regular basis, most people are nervous about being a witness in a lawsuit. If you are called to be a witness, whether in a divorce, contract dispute, or any other type of case, there are certain things that you can expect to happen when you testify in court.

Court hearings are formal processes, so arrive early (beware of Northern Virginia traffic!) and dress professionally. When the proceedings start, the clerk may ask you to take an oath to tell the truth and the judge may then ask you to wait outside of the courtroom until you are called to the stand.

When it is your turn to testify, the attorney who called you as a witness will ask you questions first. Then, the other side’s attorney may ask you questions. It is not unheard of for the judge to ask questions as well. Your presence is important to tell a story that has an impact on the case at hand. Therefore, your credibility is key. You want the judge or jury to take you seriously and believe what you have to say. That means you must be clear and confident. Here are some tips to help you accomplish those objectives:

1. Take your time. Court proceedings take time and have serious consequences. Do not feel rushed by the person asking you questions. Feel free to take a breath between the question and the beginning of your answer. It is always better to think through what you want to say than to rush ahead. This is especially true if you are shown a document. Take the time to read it so that you are not caught off guard.

Going into the courtroom and taking the stand as a witness can be intimidating – but it doesn’t have to be.

2. You are in control. Just because you are the one answering the questions, you are not powerless. If an attorney or the judge mischaracterizes what you said, politely correct them. If you do not understand a question, ask the questioner to rephrase it. If you do not understand a word, ask for an explanation. Sometimes attorneys slip into using legal jargon out of habit. Not understanding a legal term does not say anything about your intelligence. Likewise, if you cannot hear the question, ask the questioner to speak up. You can only be asked to answer questions you hear and understand.

3. Tell the truth. The court only asks you to tell the truth. You may have answers you know the attorney will not like, but if it is the truth, it is your responsibility to tell it. Tell your story the way you remember it. That also means that if you do not know or remember something, then the truth is ‘I do not know’ or ‘I do not remember.’ Never guess.

4. The proceedings should be respectful. Again, court proceedings are formal. Just as the attorneys should not use sarcasm, inappropriate gestures, and condescending tones, neither should the witness. Unfortunately, sometimes people fall below the standards of decorum. Do not dignify their poor behavior with responses in kind. Also, do not speak over other people. If there is an objection, it is important for you to stop speaking and hear what the judge has to say.

5. Answer only the question asked. Don’t elaborate, and certainly don’t go off on tangents. This sounds simple, but we at PJI Law see this issue come up very often on all sides of cases. You may be inclined to elaborate or tell the story that you want to tell, however, it is best to keep your responses short and direct. If the questioner wants you to elaborate, they will ask you to do so. Remember, it is not your job to be the trial strategist and guess where the questioner wants you to go. Your only responsibility is to answer the questions asked. Otherwise, you may be doing the proceeding a disservice and you may lose credibility in the eyes of the court.

Being a witness in a court proceeding can be very stressful, but it is important to keep yourself collected and follow these simple guidelines.

How to Discuss Estate Planning with Your Family

Death and money are among the two most difficult subjects to talk about. So it is no surprise that combining them both into a discussion with loved ones about estate planning can be incredibly uncomfortable.

With that in mind, we at PJI Law recommend that families have an open dialogue among themselves about estate planning. Estate planning is not only for the elderly or the wealthy. Parents with young children need estate plans to ensure their children are provided for physically and financially. Children over the age of 18 need estate planning documents so that their family can help them manage their finances or make medical decisions in case of an injury or sudden disability. Older adults need them so that their loved ones have peace of mind and are not left guessing about last wishes, or even worse, litigating them. These discussions don’t have to be negative, since they stem from loving, caring for, and planning for our families. In fact, creating an estate plan is a very empowering experience for many people.

Estate planning isn't only for the elderly - all families must do it.
Estate planning isn’t only for the elderly – all families must do it.                                                                        

When looking to approach family members about estate plans, particularly if you have found it difficult to do so thus far, we recommend the following tips:

  • Talk about your own estate plan and goals. If your loved ones know you have taken these steps for yourself, they may be more receptive to the suggestion that they do the same.
  • Keep a tone of respect. The person you are talking to is an adult (whether it is someone younger or older than you). People are more engaged when they feel that they are an integral part of the discussion.
  • Be direct and communicate your position.
  • Make sure you focus on the positive aspect of being in the driver’s seat and making the decisions for yourself while you can.
  • Don’t nag. Simply plant the seed and water it from time to time.
  • Voice your opinions and concerns using “I” statements.
  • Don’t blame or use “You” statements.
  • Be mindful that it may take some time and many conversations for there to be progress.

At PJI Law, it is our goal to give our clients the education and tools they need to take control of their futures and to plan for their loved ones. If you are one of the many Virginians without estate planning documents (including a Last Will and Testament, a Living Will, a Financial Power of Attorney, and any necessary trusts), we are ready to help you take the first step in ensuring your loved ones are cared for. Please call us to schedule a time to meet with one of our attorneys to discuss the next steps.

Adultery Is Still a Crime in Virginia – And Many Plead the Fifth

Although it is extremely rarely prosecuted, adultery has long been a crime under Virginia law, specifically a Class 4 misdemeanor. And only a few days ago, the legislature reaffirmed this fact by rejecting an effort to decriminalize it. Although on its face this law seems to discourage people from engaging in marital affairs, in many ways it actually protects such adulterous activity in divorce proceedings.

Here’s why: In Virginia, a spouse can seek divorce on the grounds of adultery, which if proven, could result in significant financial gain for that spouse when the court distributes marital property and considers spousal support. With that said, it is very difficult to prove adultery, and as such, one of the best ways to do so would be to get the allegedly adulterous spouse to admit to it in court.

In Maryland, adultery is also a misdemeanor, but punishable by a $10 fine.
In neighboring Maryland, adultery is a misdemeanor punishable by a $10 fine.                                               

However, via the Fifth Amendment of the United States Constitution, Americans are protected from self-incrimination in criminal matters. And since adultery is a crime, the spouse being questioned about cheating can plead the Fifth, which allows them to avoid discussing the matter in divorce proceedings. From one perspective, this provides important protection to the spouse being questioned, and from the other perspective, the criminality of adultery actually only serves to reward a cheating spouse during divorce proceedings. It further causes the other spouse to expend much more in legal fees and expenses in order to try to prove adultery in other ways, such as by hiring private investigators, digging up hotel records and combing through Facebook.

We at PJI Law have been on both sides of such cases and as always, we watch legislative developments closely in order to provide our clients with the best possible representation. Please do not hesitate to contact us if you have any further questions on how this issue might affect your marriage or divorce.

Can You Sue for the Ring When the Engagement is Called Off?

An unfortunate but common question we come across at PJI Law is: Who gets the engagement ring if the couple breaks off their engagement? Virginia law on the issue has historically been muddled, but we are closer to an answer now that the Virginia Supreme Court has weighed in on the matter in McGrath v. Dockendorf, a case that first arose in Fairfax County.

Originally, Virginia courts allowed a jilted fiancé(e) to sue the other for breach of promise to marry. Damages could include loss of comfort, injury to feelings, wounded pride, and loss of economic security. But in reality, the cases became primarily a function of humiliation and public entertainment.

Eventually, the practice was criticized as being outdated and subject to abuse by blackmail, and as a consequence, Virginia enacted the 1968 “heart balm” statute specifically prohibiting actions for alienation of affection, breach of promise to marry, and criminal conversion. Va. Code Ann. § 8.01-220 (1968).

"Take this ring to mean that I want to spend the rest of my life in litigation with you"
“Take this ring to mean that I want to spend the rest of my life in litigation with you.”                                                            

Since then, courts have been divided as to whether a party may sue for the return of the engagement ring and diamond. Some courts have found that the ring is part of the promise to marry and that the heart balm statute bars all suits for any action related to that promise. The majority of courts, however, have ruled that a suit for the ring is separate from the breakdown of the engagement because it only seeks recovery of property.

The Virginia Supreme Court has now ruled once and for all that Virginia courts may hear suits for the return of engagement rings because they are actions focused solely on the return of property.

Interestingly, the Court also implied that it does not matter if the person who gave the ring is the one who broke off the engagement, which is a contrast with the new Virginia law we recently covered allowing courts to consider the cause of divorce in determining spousal support. Although the facts will vary from case to case, in the McGrath case, Mr. Dockendorf proposed to Ms. McGrath, gave her an engagement ring, then broke off the engagement himself, brought the suit for the return of the ring, and the court ruled in his favor.

This is an example of why it is important to know your rights and responsibilities when entering into a life-changing event such as an engagement. The attorneys at PJI Law are happy to discuss these, and many other relevant issues including premarital agreements / prenups, with you if you are entering an engagement or marriage.

List of New Virginia Laws Enacted in 2016

We don’t practice law passively here at PJI Law – we pride ourselves on keeping up with the latest laws in order to gain as big of an advantage as possible in our clients’ cases. And as we welcome the year 2017, we take a look back at some of the most interesting laws enacted in Virginia in the year 2016. If you wish to read more about new laws, click here to visit a summary of some of the legislation put together by the Virginia General Assembly’s Division of Legislative Services.

But for a quicker read, here are some of the news laws that most caught our attention (please note that these are incomplete summaries):

1. Marriage: You now have to be 18 years old or emancipated in order to get married. Previously, you could marry at 16 with the consent or a parent and even earlier in case of pregnancy.

2. Asset Forfeiture: The law makes it more difficult for the government to convince the court that property is subject to forfeiture in civil asset forfeiture cases.

3. Dogs: Hide your chickens – rather than being killed or removed to another state, dogs who injure or kill poultry now face milder consequences, such as microchipping or transfer to another owner.

4. Smoking: Smoking in a car with a minor who is eight years old or younger now earns you a $100 fine.

5. Public Schools: Effective in the fall of 2018, the law requires an average of 100 minutes of physical activity per week for students in grades kindergarten through five. This compares with the current 150 minutes required for students in grades six through twelve.

New 2016 Virginia Laws include slight deregulation of ABC liquor stores.
New 2016 Virginia Laws include slight deregulation of ABC liquor stores.

6. Car Doors: Virginia legislators actually deemed it necessary to pass a law that says that you cannot open your car door on the side of moving traffic unless it is “reasonably safe to do so”.

7. Medical Services: If you will be receiving a medical service/procedure at a hospital, and if you request at least three days before the service an estimate of the cost for which you will be responsible, the hospital is required by law to give you the estimate.

8. Social Media: No college or university may require a student to disclose login information for the student’s social media accounts. An exception is made for campus police officers performing official duties.

9. Protective Orders: The penalty for an individual possessing a firearm while subject to a protective order for family abuse has been elevated from a Class 1 misdemeanor to a Class 6 felony.

10. Guardianship: No guardian may unreasonably restrict an incapacitated person’s interaction with others with whom the person has an established relationship.

11. Alcohol: As we slowly move away from nineteenth-century liquor laws, ABC liquor stores may open at noon on Sundays, which is an hour earlier than before, as well as on New Year’s Day.

12. Hunting: The new law makes it specifically legal to hunt wild animals with slingshots where shooting is permitted. Exceptions are made for deer, bear, elk, and turkey.

13. Fantasy Sports: Virginia now requires the registration of fantasy contest operators to register with the government and makes them subject to various regulations.

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

A Change in Virginia Law Makes Spousal Support Even More Contentious

You may know it by the terms “alimony” or “maintenance”, but you have almost certainly heard that spousal support can be a major source of contention in divorce. Indeed in any divorce case in Virginia, the court will, upon the request of a party, determine whether or not a spouse is entitled to spousal support, including the nature, amount and duration of such support.

There are certain factors that the court must consider in awarding spousal support, and if your lawyer does not continually keep abreast of the latest legislative changes on the topic, it is likely that you may not be aware of the changes that were made effective July 1, 2016. Pursuant to these changes, in determining spousal support awards, courts must now consider “the circumstances and factors that contributed to the dissolution” of a marriage, “specifically including any ground for divorce”.

The change in the law could impact spousal support orders by thousands of dollars - in either direction.
The change in the law could impact spousal support orders by thousands of dollars – in either direction. 

Previously, although the court could consider such factors and any fault grounds in distributing marital assets, there was no clear guidance from the law that the court could also consider the same factors in determining spousal support. This led to many spousal support decisions being made with a complete blind eye to the causes of the marital breakup. Our legislators decided that this needs to change, and as such, a few months ago Virginia Code section 20-107.1(E)(13) was amended so as to provide the court with the power to essentially punish what it considers to be non-innocent parties, or “bad actors”, through a spousal support decision.

Although only a few words in the law changed, the impact can be very significant. We at PJI Law have already identified a number of our current cases that might be impacted by this law, and have adapted our legal strategy accordingly, to the benefit and protection of our clients. This demonstrates the importance of lawyers closely following changes in the law, and explains why our attorneys make it a priority to stay updated and analyze our cases accordingly.