Issue 2/95 · Online Edition · June, 1995

A periodic newsletter on legal issues for clients and friends of David B. Forest, P.C., 42657 Garfield, Suite 211, Clinton Township, Michigan 48038 (810) 263-5690
Disclaimer: Nothing in this newsletter is intended to be or a substitute for legal advice.

New Business Type: Limited Liability Co.
Less than two years ago, a new type of business entity became available in Michigan: the Limited Liability Company (L.L.C.). An L.L.C. is a hybrid between a corporation and a partnership. It provides the owners (called 'members') with a shield of liability protection, similar to what shareholders have with corporations. However, from a tax standpoint, it is similar to a partnership, in which the profits (and losses) flow down directly to the owners without being subject to double taxation (first as profit by the business, then as income to the owners).
In many ways, an L.L.C. is like an "S" corporation, but with subtle differences, primarily when a member's contribution is disproportionate to the percentage of profits to be received.
As this business organization is still relatively new, the IRS and Michigan Department of Commerce continue to make changes in how these entities are treated; as a result, attorneys are constantly adjusting the set-up. (Note to L.L.C.s set up by our office - so far there is no reason to adjust your set-up). Bottom Line: an L.L.C. is an option worth considering for a new business or an existing one.

"O.J. did it; Why waste time with the Trial?"
A lot of folks have thought this, if not said it out loud. While the evidence against O.J. Simpson as learned through the media certainly looks damning, his trial is not in the media; it is before a jury. There are certain rules and procedures that have to be followed, including what evidence can and cannot be presented to the jury.
The reason for all these 'loopholes and technicalities' in law is simple: imagine what life would be like without them! What are so often referred to as "legal technicalities" are in fact Constitutional protections for each of us as individuals. None of us want to live in a state where the Government can barge into our personal lives, enter into our homes and turn them upside down searching for who knows what, or worst of all, just summarily deciding that we're guilty and should be hung.
Does this mean guilty people sometimes go free? Absolutely. But better some guilty people go free than an innocent person (it could be you or I!) be falsely convicted. Flaws and all, our civil liberties system is still the world's best. Thus, O.J. gets his trial, even if it drags on ad infinitum, ad nauseam.

Anti-Stalking and Personal Protection Orders
The Michigan Legislature continues to add more methods for individuals to get needed protection from others. Each method is a little different and is designed for different situations.

  • STALKING

A person who has been harassed (continuing, unconsented contact that causes a person to feel terrorized, frightened, intimidated or threatened and creates emotional distress), whether by phone, appearances within sight, at work or home, or sending mail or electronic communications, can commence an action in Circuit Court to prohibit such future conduct. If sufficient cause is shown, the court can issue a Temporary Restraining Order ex parte (without the other party being notified). No prior relationship between the parties is required.
  • PERSONAL PROTECTION

As of April 1, the availability and scope of Personal Protection Orders (PPO) increased in Michigan. PPOs are designed to prevent harassment or violence between presently or formerly married persons, parents, persons who do or did live together, or persons in a dating relationship. Dating relationship does not mean casual; it refers to more intimate and frequent associations.
With the law change, it is now easier to get and enforce a PPO: application can be ex parte and is now immediately effective when issued, instead of not until served upon the person restrained.
The acts that can be restrained have also been expanded, including assaulting or threatening a named person, removing a minor child, and purchasing or possessing a firearm.
Once the PPO is entered by a Judge, it is immediately put into the LEIN system, thereby notifying all law enforcement agencies. Violation of a PPO can and will subject the violator to civil and criminal penalties.
  • SPOUSE INJUNCTIONS

These Orders have been available for some time and differ from the above in that they are used only during a divorce action.

CASES IN POINT: Misrepresentation

  • Misrepresentation on Insurance Application

A misrepresentation on an insurance application, even if made innocently, is grounds for rescinding an insurance contract.
On April 9, 1991, Plaintiff made application for no-fault auto insurance, and stated that he had not received any traffic citation for the previous three years. As it turned out, a citation for driving while impaired had been issued on May 1, 1988, or 35+ months before. Nonetheless, when the insurance company discovered the material misrepresentation, it rescinded the insurance contract (treating it as if it were never made) and disallowed a subsequent accident claim. Even though the Plaintiff honestly thought the old citation had occurred more than 36 months before, his later lawsuit against the insurance company to pay for the claim was thrown out by the Michigan Court of Appeals. Lash v Allstate Ins Co.
  • Misrepresentation on Job Application

Another recent case concerning misrepresentation went the other way: Plaintiff prevailed.
Plaintiff claimed he was wrongfully discharged from his job for refusing to "fire as many black employees as possible". After Plaintiff was himself fired and then brought suit against his former employer, it was discovered that he failed to reveal a prior conviction for felonious assault. The employer argued that had it known about the prior conviction, it could have and would have fired him anyway, so Plaintiff had no discrimination action against the employer for wrongful discharge.
Based on a recent U.S. Supreme Court case, the Michigan Court of Appeals ruled for the Plaintiff on the basis that after-acquired evidence (about the earlier conviction) is not a complete bar to a wrongful discharge claim, and may only affect some of the relief (damages) that can be awarded. Wright v. Charters, et al.

REFERRALS
If you have been pleased with the service and professionalism you have received from our office, it would be greatly appreciated if you passed the good word along. Referrals are always appreciated and encouraged, and we look forward to the opportunity of being of service to your associates and friends. If we can not immediately service their needs, we will be happy to refer them to the appropriate attorney specializing in their specific area of need.
However, if you have not been pleased, contact us directly!

David B. Forest, JD, MBA
Attorney and Counselor at Law
(810) 263-5690

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