California Increases Small Claims Dollar Limit to $7,500

California's Small Claims Court system was created to provide a cost-efficient means for resolving smaller disputes. Through the end of 2005, the maximum amount that a party may recover in Small Claims Court is $5,000. This creates a problem for a party with a claim in the amount of, say, $7,000. Filing a Small Claims Court lawsuit will allow the party to avoid attorneys' fees but the maximum recovery will be $5,000. On the other hand, a Superior Court lawsuit will require an initial expense of about $1,000 plus perhaps thousands of dollars more if the case is not quickly resolved.

On January 1, 2006, the jurisdiction of the Small Claims Court will be increased to allow claimants to recover judgments of up to $7,500. However, the new law only applies to cases filed by individuals and does not apply small claims lawsuits filed by business entities such as corporations or LLCs. The new law provides for new training regulations for people who serve as judges in small claims lawsuits.

This increase still creates issues for a person or business with, say, a $9,000 claim, for the same reasons that currently affect a claim in the $7,500 range. However, the jurisdiction increase does dramatically help parties with claims in the $5,000 to $7,500 range.

There are a few steps that all businesses should take to empower them to recover debts without having to use the court system. For example, businesses should make sure that they have attorneys' fees provisions in their form contracts that allow them the ability to recover all or most of the attorneys' fees that they incur. Obviously, it is also important for businesses to make sure that their customers are signing a contract as part of any transaction.

If you have questions regarding the Small Claims Court procedure or if you would like to learn more about terms to include in your contracts used by your business, please feel free to contact us.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Reforming the Americans With Disabilities Act

San Diego attorney Theodore A. Pinnock is a self-styled disability rights lawyer who has filed nearly 2000 lawsuits under the Americans with Disabilities Act ("ADA"). Mr. Pinnock recently demanded more that $200,000 from 67 businesses in the historic mining town of Julian, CA for alleged violations of the ADA. Mr. Pinnock apparently claims he visited Julian over a recent holiday weekend and found a number of properties that he believes do not provide a sufficient level of disabled access.

Passed in 1990, the ADA has helped ensure equal access to public and private facilities. In addition to calling for building standards to be user-friendly for disabled patrons, the federal law also allows individuals harmed by a violation to sue for monetary damages. California is one of only three states that also allows an injured party to recover extra monetary sums (attorneys' fees, punitive damages, etc.). Allegations of abuse of the ADA law, and the gross number of cases filed in courts, have skyrocketed in recent years.

Mr. Pinnock has engaged in case-by-case litigation of ADA lawsuits for years. Now Mr. Pinnock has embarked on what he is calling the "Julian Experiment", basically to test his theory that it is more efficient to sue an entire community rather than pursue individual violators of the ADA. Unfortunately, Mr. Pinnock's approach comes with a hefty price tag and no guarantee that business owners will be protected from future ADA lawsuits.

In Mr. Pinnock's latest settlement demand (which has now been removed from his website), he proposed that all 67 Julian business owners select one attorney to negotiate a settlement agreement on behalf of the entire community. Mr. Pinnock gave the business owners less than one day to select this attorney. Mr. Pinnock also gave each business owner until December 9, 2005 to pay him $900 and he has not even provided a specific list of ADA violations for each property. The money is payable now and the scope of the unknown repairs would be subject to further negotiation.

Julian was hit hard by the fires of October 2003. Nearly one quarter of the local residents lost their homes and tourism still suffers. Mr. Pinnock's hard deadlines will only inflict further economic hardship on Julian businesses and make it nearly impossible for the owners to get qualified legal advice before the deadlines pass.

The California legislature recently rejected a proposal to give property owners a 120-day window to correct violations before an ADA lawsuit could be filed. Mr. Pinnock's "take it or leave it" settlement tactics indicate the rejection of this legislation was premature. California and the federal government should act now to protect small business owners from abusive ADA lawsuits.

For more information on about how you can help the citizens of Julian, please contact us or the San Diego Citizens Against Lawsuit Abuse.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Talking Turkey About Employer Gifts

AccountingWEB.com - Nov-23-2005 - For many businesses, holiday gifts are a tradition. As with most gifts, some prefer tangible items, like turkeys or hams, other prefer things that can be used in the office, such as mouse pads, books or pens, while still others prefer cash because it is more versatile. There is another reason a company might prefer to give things like turkeys or mouse pads: taxes.

To the Internal Revenue Service, gifts such as turkeys and hams are nominal gifts having minimal dollar value meaning they fall under the de minimis fringe benefits rules. In other words, they can be given to employees without being included as part of employee wages that are subject to withholding and taxes, according to a statement from the National Association of Tax Professionals.

Click in the link below to read the full article:

http://www.accountingweb.com/cgi-bin/item.cgi?id=101507

Simplify Tax Payments with Treasury’s EFTPS

AccountingWEB.com - Nov-22-2005 - Do your clients make tax payments? If so, the U.S. Department of the Treasury wants to talk to you about the benefits of paying taxes electronically.

Simplify is a national campaign launched to communicate to tax professionals and small businesses the benefits of paying taxes electronically using the Electronic Federal Tax Payment (EFTPS). EFTPS enables tax professionals, accountants, businesses and individuals to pay federal taxes electronically, including corporate, excise and employment taxes and 1040 quarterly estimated tax payments. EFTPS offers a variety of payment options including the Internet and a telephone voice response system, as well as other electronic solutions for tax preparation and planning firms of all sizes.

Click below the read the full article:
http://www.accountingweb.com/cgi-bin/item.cgi?id=101505

Consumer Bill of Rights for Credit Cards

We hold this truth to be self-evident - consumers have the right to fairness in lending. To secure this right, since biblical times, society has attempted to balance the unequal relationship between people who have money and people who need it. To guarantee a fair balance of power between borrowers and lenders, we establish this consumer bill of rights for credit cards.

1) Credit card companies may not unilaterally change the price, terms and conditions during the credit card agreement period. Revised pricing is prohibited and consumers are protected from rate increases on existing balances for any reason.

2) Accounting should be straightforward and fair to the consumer.

3) Credit card underwriting must consider the borrower’s ability to repay.

4) Binding arbitration is a violation of consumers’ rights to due process and is prohibited.

5) Fees must relate to the cost of providing credit services.

6) Interest rates may be priced according to risk, but must be conscionable.

7) Billing procedures must be fair with the benefit of doubt given to the consumer, i.e., accept the postmarked date as proof of on-time payments with no arbitrary cutoff time on the due date. The billing cycle must be consistent and preferably 30 days.

8) Minimum balance payments must be sufficient to reduce the principle and an explanation should be provided of how long and at what cost repayment of the existing balance will take if no further charges are made.

9) If the company approves charges above the credit limit, then an over limit penalty may not be charged without first granting the borrower an opportunity to lower the balance.

10) Consumers have a right to clear, simple and understandable explanation on the full cost, terms and conditions for credit cards.