Month: October 2023

Child Abuse and Neglect in North Carolina

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By North Carolina statute, anyone who has reason to believe a child is being abused must make a report to CPS (Child Protective Services).  This also applies to suspected neglect or dependency upon the state when a child is abandoned.  The identity of a person who reports suspected child abuse is sealed by the State so that the parent or caretaker of the child will not know who made the report to CPS.  As long as you have a good faith basis to report child abuse, you do not have any legal liability if CPS decides no abuse has occurred. The name of the person reporting is strictly confidential.

The policy of the law is to trigger an investigation into a child’s circumstances so CPS can prevent potential harm to the child, or remove the child from an abusive environment. People sometimes hesitate to report suspected abuse because they feel the parent will be punished.  Reporting doesn’t always result in a finding that abuse or neglect has occurred.  Upon receiving a report of suspected abuse, there is an investigation by social workers and/or other trained and licensed professionals. If the CPS investigation finds evidence there is abuse or neglect, a lawsuit may be filed and the parent will usually be entitled to an appointed attorney to represent him or her in the case. Parents are then given access to resources that give them tools for dealing with their inclination to abuse their child. Punishment is not the goal in these civil (non-criminal) courts. The constitutional rights of parents must be respected, just as they are in criminal cases.

What Counts as Child Abuse?

In a perfect world, there would be a simple definition for child abuse.  But we live in an imperfect world where it is necessary to include lots of examples of abuse as we try to define it. Taken together, this patchwork of situations creates the legal definition of child abuse in our state.  It gives you a flavor of the sort of thing you must report. Fortunately, you don’t have to figure all of that out because it is the task of the NC Department of Social Services through CPS to decide exactly what fits into the definition of child abuse or neglect. All you have to do is err on the side of caution and call CPS when you see abusive behavior or evidence that indicates a child is in danger. An abused child is one whose parent, guardian, custodian, or caretaker:

  • Inflicts serious physical injury by other than accidental means.  This includes an adult allowing someone else to inflict injury on the child;
  • Creates a substantial risk of serious physical injury to the child by other than accidental means (or allows someone else to create that risk);
  • Uses or allows . . .  cruel or grossly inappropriate procedures or cruel or grossly inappropriate devices to modify behavior;
  • Commits, permits, or encourages the commission of various sexual and obscenity offenses;
  • Creates (or allows to be created) serious emotional damage to the juvenile shown by the child’s severe anxiety, depression, withdrawal, or aggressive behavior toward himself or others; or
  • Encourages, directs, or approves of delinquent acts involving moral turpitude committed by the child.

What are the Signs of Child Abuse?

For the signs of suspected abuse, see the list on the NC Department of Social Services web site. If you suspect a child is being abused in Pitt County, call 252-902-1110 during the day, and 252-830-4141 after hours. There is also information about the basics of reporting suspected abuse in NC, offered by the TEDI Bear Children’s Advocacy Center.

Why Can’t We Use the Same Attorney If We Both Agree?

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This is a question I often hear during consultations. The potential client may say they agree on everything and don’t want to pay for a second attorney. Depending on the circumstances, there are at least two main reasons a family law attorney usually can’t take a case for both parties.

One reason is that representing both clients is a conflict of interest, or it creates the appearance of one. Another reason is that sifting through the case with an attorney uncovers a number of important issues that weren’t discussed between the parties.

What Is a Conflict of Interest?

A conflict of interest means divided loyalty. An attorney is required to zealously represent a client and act only in the best interest of that client. When that best interest of one party differs from, or conflicts with, the best interest of the other party, an attorney must choose which person to represent. Even taking on responsibilities that limit an attorney’s ability to fully represent the client is a conflict. In most family law cases, one person’s best case scenario is the other person’s worst case scenario. For example, if one spouse is seeking alimony and the other spouse is trying to use legal defenses to avoid payment, there is a conflict of interest. The State Bar has strict rules about an attorney’s ability to represent more than one party so the lawyer’s responsibility is only to one. Even when parties are in agreement about the outcome of the case and want a separation agreement, there are negotiations after the other spouse gets a copy of it to review. Your attorney cannot answer legal questions by the other spouse or give any legal advice to your spouse. Your ex should choose an attorney to advise him or her about the case.

What Else Matters Beyond the Agreement We Have?

Clients tend to think that once they address child custody or support, the house they own, or the payment of certain bills, they are finished with the unpleasant task of legally wrapping up a separation. A client may be disappointed to discover there are numerous topics he or she did not discuss with their ex. Many clients don’t stop to consider the tax implications of their settlement, whether the money they exchange will be taxed as income or as a tax deduction, and whether the division of retirement assets will be subject to taxes and IRS penalties instead of simply being treated as a tax-free exchange of marital property. A court order is usually required to divide retirement assets the proper way, to avoid detrimental tax consequences. Even if the parties agree concerning alimony, it must be addressed properly to get tax benefits (or to avoid tax burdens).

Lots of Details

Clients look at the big picture of custody and visitation agreements. The devil is in the details. When they say they have already agreed to a custody schedule that gives each parent ½ of the Christmas, what does that mean? Do they mean December 24th and 25th every other year or did they assume the holiday was determined based on the school calendar, from the first day off until the day school starts? Does either parent intend to go out of town for Christmas and need to add specifics concerning the travel arrangements over state lines? Other typical problem issues include an “agreed upon” amount of child support. Parents might have an agreement that one pays for daycare while the other pays for health insurance. That tends to be unrelated to the way the state determines child support. Is there an argument that a bonus or commission should be included as income? What about extra-curricular expenses, sports and the payment of medical expenses not paid by insurance? Will there be out-of-state travel expenses by one parent? Should child support be calculated based on a shared visitation schedule or the more typical visitation schedule? And yes, you pay your attorney to be a pessimist, which usually means making sure things are handled properly at the beginning of your case after your attorney gives you legal advice. The decisions will be yours to make, but don’t assume you’ve reached an agreement until you know all the questions have been asked.

My Ex Is Using the Attorney That I’m Paying For?!

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The Attorney Client Relationship

Clients can be resentful that their attorney is wasting time dealing with the pro se person. In most family law cases, each person has an attorney. When the other person is pro se, Latin for representing himself or herself, lawyers aren’t working for the pro se person and charging you for it as clients sometimes think. That is prohibited. An attorney may represent only one person in a family law case, such as a divorce or child custody case. Failure to do that is usually a conflict of interest. That means what is good for one person might be a bad thing for the other person. For example, if one spouse gets alimony that’s a good thing for him or her, but it is might be a bad thing for the other spouse. The lawyer has to choose one person or the other as a client.

What’s Different?

If your ex had an attorney, your attorney would have to talk with the other about settlement, discovery (documents, etc.), trial matters, and logistics of court events such as depositions. In other words, your attorney would still be taking time to talk with the other attorney. It doesn’t always take more time than it would to negotiate with an attorney. In fact, some people without attorneys are anxious to get down to business instead of posturing the way other attorneys will because they want to avoid court.

The Law and Equality

The law requires everyone to be treated in the same way, regardless of whether they have an attorney or not. The same deadlines, rules, laws and other requirements apply to both sides. In the eyes of the law, people shouldn’t be penalized if they cannot afford an attorney. But the judge is still bound by the law. Judges have to walk a fine line in these cases. Attorneys also have to be very careful when communicating with a pro se person. We certainly can’t give them legal advice but sometimes we do explain the reasons why the offer we are making on behalf of our client is a good one. Depending on the circumstances, the attorney will tell the pro se person that he or should talk with an attorney.

Same Rules as Everyone Else But . . .

Attorneys have specific things they need to prove in court, based on what the law requires in each situation. But in court, judges sometimes give pro se people a little leeway when they testify and present their side of the case because if they were held to a strict standard they probably wouldn’t be able to say much at all. More often than not, the pro se person usually just wants the judge to hear what they want and why they want it. In a democracy, it is important for all citizens to have the right to their day in court. It’s especially important for parents who are in child custody cases to be heard because the judge must award child custody to one or both parents based on what the judge believes is in the child’s best interest, regardless of whether the parent is represented by an attorney.

Can My Ex Look at My Credit Report?

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The Problem: Hide the Ball

The short answer: No! He or she can’t legally access your credit report without your permission. When I begin representing a client, I suggest he or she pull a recent credit report because that is the only way to identify whose name is on what account. I generally don’t need to see it, but I do need my client to be certain what debts are reflected there so we can address them in court or by settlement. That may be the only way to see if your ex has opened a credit card in your name, or jointly in both names. People are sometimes surprised to discover accounts they were unaware of, opened when the ex signed his or her name on the account application. It is not uncommon for the other spouse to open a post office box so mail does not come to the residence. You probably won’t know about this credit problem unless you look.

Now What?

If you find out your ex has been snooping around looking at your credit report, what can you do? You have various rights pursuant to the Fair Credit Reporting Act, including the right to sue him or her. You may want to consult with a consumer law attorney about the remedies available to you pursuant to that statute, including any claim for attorney’s fees. You can also file a police report. Federal law 15 U.S. Code §1681q “Obtaining information under false pretenses” says: Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, imprisoned for not more than 2 years, or both. The Federal Trade Commission has a link for consumers to file complaints. Consider asking the credit reporting agency to place a fraud alert on your account, or have your credit frozen, which protects you from any future activity unless you specifically agree.

While there are many web sites that advertise credit reporting services, you should consider checking your credit on the federally recognized web site where you can access free credit report each year: www.AnnualCreditReport.com  This site permits you to access free credit reports from the three credit reporting, TransUnion, Equifax, and Experian once each year for free. Ideally, you should access one credit report every four months. That way, you can cross reference the data available to you and find any variations on a regular basis all year long.

 

Businesses in NC Marital Property Division Cases

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In equitable distribution cases when the court divides marital property, a business ownership interest is an asset to be identified, classified, valued and distributed to (usually) one of them. Like any asset, it might be marital property or separate property and it may be distributed to either spouse if it is marital. The scope of this topic is very broad and cannot be fully addressed here. This article is a brief overview of the things experts, such as CPAs, might consider when performing a business valuation.

Business Entity: What is the Structure?

The way a business is organized impacts the value of it and the manner in which the business is taxed. Sole proprietorships are businesses owned and operated by an individual, created without filing any formal paperwork. Other businesses are created formally by paperwork filed with the NC Secretary of State.  Limited liability companies (designated with “LLC”) are more suited to ownership by an individual or a few people, and they usually require less paperwork. Corporations (designated with “Inc.”) are formal, and require special paperwork to be annually maintained, corporate officers to be elected and formal bylaws to be followed.

Why the Business Structure Matters

There is value added or subtracted from the value of a business based on many factors, including whether the business is publicly traded or owned by a few people as a closely held corporation (CHC).  CHCs owners are often family members who sign buy-sell agreements that require the co-owners to give each other the first right of refusal if one chooses to sell his or her share of ownership. The ability of an owner to sell his or her ownership interest is key because market value is based on what a willing buyer would pay a willing seller. In CHCs for example, willing buyers might require that only a few people, such as family members or business partners, get the first right of refusal in the event a spouse wants to sell. This can reduce the value of the business. If the business owner is a licensed professional, such as a doctor or lawyer, who works alone as a solo practitioner, the value is limited because the value of the practice depends on that one person whose license isn’t transferable. While a business or practice has a value, the actual professional license or business license that terminates on transfer is separate property. Businesses and any co-owners must be named as a party to the lawsuit for the court to have authority to order them to do things.

Factors That Impact Value

Name recognition of the business is known as “good will.”  For example, a local car dealership that has existed for 40 years has more name recognition, and may be more valuable than, a brand-new dealership. Consumers tend to more highly trust an established business. Tangible assets contribute to the value as well. Company assets might include equipment and office supplies, vehicles, bank and investment accounts, certain contractual rights, promissory notes and outstanding accounts payable to the company, inventory, and even real estate. Retained earnings are funds that remain in the business accounts, instead of being distributed or paid to the owner(s). This is critical when determining income for purposes of support to the other spouse, especially if it is unclear whether these funds are counted twice, once as business value and again as income. Company debts and expenses can include mortgages, lines or credit and business loans, insurance, state and federal taxes for the business and employees, payroll, retirement contributions for employees, health insurance, etc.  Business value is also impacted by potential liability in the event the business is faced with litigation (personal injury, unemployment claims, malpractice, bankruptcy, etc.) or the likelihood of anticipated litigation.

 

Is My Attorney Friends with My Ex’s Attorney?

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When I was a law student, I remember tagging along with my mentor for a trial and being shocked that he was talking and joking with the attorney who represented the opposing party before court. In my mind, court was a war and the opposing party was the enemy. It wasn’t until I began trying cases myself that I had a context for that event. Lawyers by definition are zealous advocates for clients. However, clients sometimes think that means an attorney must be rude, loud and hostile. When I became a lawyer, I realized that is not the case. In fact, cordial relationships can benefit both parties.
Professional Relationships
As “officers of the court” attorneys are expected to have a respect for everyone, including the opposing party. Professional relationships among attorneys are often long-term. A trend for attorneys is to choose an area of law to concentrate in, or even become a board certified specialist, as I am. As a consequence, more attorneys practice only family law, spending years or even decades litigating or negotiating cases with each other. And a smart attorney makes efforts to keep a cordial relationship with his or her colleagues.
Consequences 
But more to our point, attorneys who are professional and have a basic level of respect tend to cooperate when it is necessary, even though they are deeply divided on the disputed issue. They return calls to each other and try to determine whether there are issues that can be resolved outside of the courtroom. They can actually have conversations about the case instead of just “performing” in court. A frank conversation before the trial could lead to a stipulation to certain things, for example, giving the judge a written agreement saying they agree to those things. Such an agreement might reduce a three day trial to two days, benefiting both parties.
On the other hand, the attorneys lacking a cordial professional relationship with colleagues tend to be the same ones who drive up billable time with big displays of bravado even when doing so isn’t really necessary. That often translates into a long, hard and expensive road. When that type of attorney is in a case, I can tell my client to count on the case costing twice as much what it should cost.  There are cases that absolutely have to be litigated tooth and nail. But that doesn’t mean the lawyers have to needlessly inflame an already tense family situations, especially when children are involved. Seeing your attorney shake hands with the other attorney, or make small talk, is not a bad thing.