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Posts on Jan 1970

Restraining Orders to Prevent Violence or Harassment

Those unfortunate enough to be the victims of actual or threatened violence or harassment are usually frightened and often don’t know where to look for assistance.  Whether the violence or harassment is by a former or current cohabitant, family member, co-worker, or complete stranger, the results can be devastating for the victim and the victim’s family. 

Although a restraining order in itself does not guarantee security from future violence or harassment in all cases, such an order does typically send a strong message to the perpetrator and provides law enforcement and the courts an important tool for keeping a victim safe.  However, the prospect of going to court can be intimidating for many victims, especially those who have little or no experience with the court system.  Fortunately, the laws in the State of California make the process relatively simple and inexpensive.

The most frequently used restraining orders are the Domestic Violence Restraining Order (“Domestic Order”) and the Civil Harassment Restraining Order (“Civil Order”).  Which one a victim seeks depends on the nature of the relationship between the perpetrator and the victim.  The good news is that whether a victim needs a Domestic Order or a Civil Order, the law provides for a fairly simple process that is made even easier by the availability of fillable forms with instructions available on the State Courts website.

Domestic Orders

Domestic Orders may be sought where the perpetrator is a current or former cohabitant, current or former spouse, family member, other person in a “close relationship.”  An applicant may also seek protection for others such as children or other family members.  The Domestic Order does not apply to current or former roommates where the relationship is not a “romantic” relationship.  In San Luis Obispo County, Domestic Order applications are generally assigned to a family law judge.

The forms necessary to request a Domestic Order are available here under “Domestic Violence Prevention.”  A good place to start is form DV-500-INFO, which contains information about the availability of Domestic Orders and what paperwork is necessary to request one.  The forms necessary to request a Domestic Order can be filled out on line and printed or printed and completed in type or even filled out in pen.  Once completed, the forms must be filed with the court.  The court does not charge a fee for this filing.

After the paperwork has been completed and filed, the victim will appear for a court hearing.  At this first hearing, the perpetrator will generally not be present.  The judge will decide, based on the victim’s paperwork, whether a temporary restraining order should be issued.  If it is issued, the temporary order will remain in effect until a hearing where the perpetrator will have an opportunity to present his or her side of the case. 

Hearings on Domestic Orders are generally less formal than traditional evidentiary hearings on civil or criminal matters.  Judges have a lot of room to decide what evidence will be considered.  If the judge believes the request is supported by sufficient facts, a Domestic Order will be issued.  If the judge does not believe a Domestic Order is warranted, the temporary order will terminate.

The court website contains important information about the type of conduct that may be restrained with a Domestic Order and other relief that the court may grant.  It also contains information on how each side should prepare for the hearing and what information may be used at the hearing.  Although the court website advises that “it is a good idea” to be represented by a lawyer, inability to obtain a lawyer should in no way deter a victim from seeking a Domestic Order.  The process has been simplified precisely to ensure that victims are able to seek an order without substantial effort and cost.

Civil Orders

The process for seeking a Civil Order is very similar to the process for seeking a Domestic Order.  However, a Civil Order may be obtained to prevent harassment or violence by someone with whom the victim has not had a “close relationship.” This might include people such as a neighbor, a co-worker, a former friend, or even a complete stranger who is harassing or threatening someone.  In SLO County, applications for Civil Orders are generally assigned to a judge assigned to the civil department.

The forms that will allow someone to seek a Civil Order are also available on the court website under the heading “Civil Harassment.”  Form CH-150 is a good place to start, as it provides information regarding the protection available, the forms to be completed and filed, and information to assist in preparing for hearings.

Conclusion

Recognizing that victims of violence and harassment may be reluctant to seek help if it is too difficult or costly, the State of California has provided a relatively easy and inexpensive method to seeks an order preventing further harassment or violence.  Victims shouldn’t let fear or lack of knowledge of legal papers or the court system deter them from taking steps to protect their own safety and the safety of family members.

Mike McMahon – mmcmahon@carnaclaw.com

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THE ELEPHANT IN THE ROOM: COMPLIANCE

For many wineries, compliance is something of an elephant in the room –its presence is known to all. Certainly, maintaining full compliance can be daunting, complicated and time-consuming. Not being in compliance, however, can have far more dire consequences. Penalties for noncompliance can include hefty fines, license suspension, even license revocation. Still, too often wineries may opt to take a “wait and see” approach to compliance, figuring if they get caught by a regulatory agency, they will then cooperate, scramble, and get into compliance. By then, though, the fines or penalties may already have been assessed. The winery could experience some much unwanted negative publicity, not to mention that it could also be shut down if the non-compliance is serious enough. The safer road, obviously, is simply to implement policies that every responsible/managerial employee knows, understands and applies on a daily basis to keep the winery in full compliance with all applicable regulations.

 

Some of the most common compliance (non-compliance) issues include, but by no means are limited to shipping wine to customers in other states without having the appropriate licenses in place, insufficient records supporting the winery’s Report of Wine Premises Operations (TTB form 5120.17), improper transfer of the Small Producer’s Tax Credit, incomplete tax paid removal records, failure to apply for and obtain a new COLA when needed, insufficient records regarding bottled wine, failure to report changes in ownership or control of the winery, taxes (e.g., quarterly tax payments made without sufficient tax deferral bond coverage, late filing of excise tax returns)  and exceeding the privileges of a particular license.

 

While there are a number of excellent compliance companies that assist wineries with compliance issues, there are numerous situations in which a winery may also benefit from the services of an experienced wine law attorney who could compliment the work of the compliance company.

 

Our next posting will describe what services a wine law attorney can provide to a winery to assist in maintaining a winery in full compliance.

 

Jeannie Goshgarian    and Z Naccasha

Jgoshgarian@carnaclaw.com     znaccasha@carnaclaw.com

 

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The Elephant in the Room: Compliance – flull blog to be posted tomorrow…so please stay tuned.

For many wineries, compliance is something of an elephant in the room __its presence is known to all.

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I Have to Pay Taxes On Forgiven Loan Proceeds?

I Have to Pay Taxes On Forgiven Loan Proceeds?

One of the harsh realities of our beloved taxing system is that it will tax you on any benefit received. With the housing market still crawling out from the depths of its collapse, many taxpayers are still saddled with mortgages so disproportionate to the value of the underlying real property that simply walking away from the debt seems the only option. What are the consequences associated with foreclosure/short sale/debt forgiveness, and why are you lucky if you live in California?

 

In general, if you owe a debt to someone else and they cancel or forgive that debt, the canceled amount is income subject to tax. This comes up most often in the context of home mortgages and other loans secured by real property. If a mortgagor forecloses/agrees to a short sale/ or somehow modifies the debt, any deficiency or amount of the debt forgiven could be income. Assume a loan for $500,000.00 secured by real property. Assume further that the owner simply walks away from the property and the lender forecloses realizing only $300,000.00 on the foreclosure sale. Assuming no deficiency judgment, in many instances, the lender will actually send the borrower a 1099 indicating $200,000.00 of ordinary income. Not a great result.

 

What to look for in California:

  1. Is my home loan recourse or non-recourse. Non-recourse loans do not result in Cancellation of Debt (COD) income, the policy being that since the lender never had recourse beyond the underlying real property securing the loan, foreclosure on that underlying real property fully satisfies the loan resulting in no COD income.

     

    1. One lucky aspect of living in California is that it is a non-recourse state. Basically, this means that most loans procured in anticipation of purchasing a residence are non-recourse meaning that foreclosure on these loans will usually not result in COD income to the borrower. (There are multiple nuances to this, not the least of which is the fact that refinancing usually converts a non-recourse loan to a recourse loan in California. A borrower should have his or her loan document thoroughly reviewed by counsel prior to making any final determinations on whether to walk away from a loan and simply allow foreclosure.)

     

  2. Is the loan on my personal residence as that term is defined under the Internal Revenue Code? If a foreclosure/short sale or loan modification does ultimately lead to COD income, there may be some exemptions allowing the borrower to avoid paying income tax.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Both debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Under the new law, a discharge of "qualified principal residence indebtedness" is excluded from taxable income. "Qualified principal residence indebtedness" is acquisition indebtedness secured by the principal residence of a taxpayer as defined for the deduction of residential mortgage interest, but the limit is $2,000,000 for the exclusion ($1,000,000 for the mortgage interest deduction) and $1,000,000 for married persons filing a separate return ($500,000 for the mortgage interest deduction). Also, the exclusion only applies to a mortgage secured by the principal residence of the taxpayer.

If, however, the taxpayer continues to own the home after the debt cancellation, generally occurring upon a loan modification agreement, the tax basis of the residence (cost used to determine taxable gain or loss upon a subsequent sale) is reduced by any amount of discharge of indebtedness excluded from taxable income, but not below zero.

 

As you can see, the Federal Government is at least trying to alleviate some of the destructive force of the housing bubble burst. Although these exemptions/exclusions, loan nuances are well known, understanding how they apply to any borrower’s specific situation can and is tricky. If you have any questions regarding your loan, or any inquiries in general, please do not hesitate to contact us.

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